Reach plc (RCH) Earnings Call Transcript

Okay. Good morning, everybody, and welcome. We'll get going with the obligatory disclaimer. Lovely to see so many of you here. It's been a very solid set of results, which the team are going to take you through and a year of really solid progress as well in developing our strategy based on increased customer engagement and a single view of our customer. So obviously, one of the highlights of 2019 was the arrival of these 2 in their roles. And Jim is going to take you, other than that highlight, through our financial highlights and our operational performance. And Simon will then expand upon the financial side of that, before Jim talks about our strategy founded upon that customer engagement. Then Simon will talk a little bit more about why we believe we've got the solid foundations for that strategy and most importantly, I guess, from your point of view, what our measurements of success are going to be in delivering that strategy. Our business is nothing if it is not founded upon our content. We're very proud of the journalism that we produce. And Lloyd is going to talk a bit more about that content. Jim will summarize and then we will take questions. Over to you, Jim.

Thank you, Nick. So good morning, ladies and gentlemen. I'm delighted to be presenting the 2019 full year results for Reach plc. And I'm also delighted to be presenting such a strong set of financial and operational performance metrics, particularly in my first set of results as Chief Executive. Now my early impressions of Reach have been extremely positive. And I feel privileged to lead a business which is laden with excellent journalistic content and creative talent. Our news brands have long been the trusted source of news and information. And this has largely been achieved through investing in journalism and content, content producers who offer a high-quality, trusted news service. Now my first task as Chief Executive was to reestablish our purpose and put this front and center to what we stand for as an organization, which is why we have rewrote and released the vision for our stakeholders to see. That is that we touch lives, we shape conversations and stir emotions and our trusted brands connect with people to the world every minute of every day. Reach delivered a solid financial performance in 2019 and a good operational performance. And I would just like to draw out a few points before Simon takes you through the detail. The company saw reported revenue of GBP 703 million. And on a like-for-like basis, revenue declined by just over 5%, which is an improvement compared to 2018 with a year-on-year revenue decline was over 6.5%. Our digital revenue demonstrated strong growth, increasing by over 13% on a like-for-like basis. And this marks an acceleration from just over 9.5% growth in 2018. Now this increase benefited from strong page view growth, up 25% versus the prior year, with a particularly strong H2. Our U.K. monthly online audience in December '19 was 40 million, up 8% on the prior year. Adjusted operating profit increased to GBP 153 million as a result of our continued focus on driving operating efficiency and reducing costs. And our adjusted operating margin increased by 1.7 percentage points to just shy of 22%. A key point that demonstrates our operation and management skills is the cash generation continued strongly during the year and resulted in the group becoming debt-free with a net cash balance of GBP 20 million at the financial year-end. We, therefore, continue to be committed to progressive dividends and to our pension obligations. Now in 2019, this was a year of change with new management and the not-too-minor development and delivery of a new strategy within 6 months of my arrival, all the while ensuring we continue to deliver well across the group. We are working hard to ensure as a team that we don't take our eye off the ball. With what we've still achieved a lot in 2019, I just wanted to share a few of the team's achievements. In Q1, we launched InYourArea. As part of our customer strategy, we have positioned this as a vanguard hyper local and acquisition platform. In April, our Iceland campaign ran from April '19 worth a total gross revenue of over GBP 4 million and was a catalyst for similar truly national and regional campaigns for other advertisers, a capability that only we can deliver. Later in Q1, the Daily Record was named Newspaper of the Year at the Scottish Press Awards. And their Power Up The North campaign, which titles across the north of England, united to demand fair funding for that region. Liverpool.com launched the first U.S. and international site dedicated to LFC's U.S. fan base, which we have seen considerable page view success. Being the dominant media representative of Liverpool FC, we expect to see an increase in page views, if or when the league title campaign concludes successfully. Reach Sports Media were the official publishers for the Rugby World Cup programs in Japan, which had a positive impact in 2019. And we continue to build in that offering in the U.K. Now I am particularly excited by the expansion of a Live site into competitor areas, at least 7 to launch in 2020: Sunderland, County Durham, Sheffield, North Yorkshire, Bradford, Newport and Bolton. Including Leeds Live, this will mean that we will have a dedicated local presence across the whole of Yorkshire and which we can demonstrate that organic development can provide greater returns than acquisitions of certain assets. And a final note to The Daily Mirror and the Mirror Online Climate Crisis Issue, a substantial campaign that also attracted a new selection of advertisers. Now this is only a selection of the campaigns and journalism we create through a network that represents a diverse set of opinions across the political spectrum, which is arguably unmatched in U.K. media. Our publications geographically and demographically represent a true reflection of our readers and our customers. And this is a rich base of information to build our customer-focused value strategy. Now looking at our business today, we have a very strong foundation in which to drive our new strategy in 2020. We reach 47 million U.K. adults at a national and local level. Our U.K. monthly audience in December '19 was 40 million, up 8% on the prior year and the first U.K. publisher to reach this scale landmark. In 2019, we moved from the sixth biggest digital asset in the U.K. to the U.K.'s fifth biggest asset after Google, Facebook, Amazon and Microsoft with 40 million unique users accessing our online content in December '19 alone. With 34 branded Live sites and 7 titles in a top 20 market share for digital print brands, we have unprecedented distribution across national and regional audiences. This is hugely valuable to advertisers and no one can do this on the scale that we can. This scale builds in the strong financial and operating performance. And a GBP 20 million net debt cash position leaves us ideally positioned to drive customer focus, sustainable growth for Reach. The 2019 outturn has left us well placed for the future and the strategy that we're shortly going to announce. Simon will now run through the numbers in a bit more detail. Simon?

Pass the baton. Thanks very much, Jim. Good morning, everyone. We're very pleased, as Jim's just summarized, to be announcing a really positive update to the market today with both financial and operational momentum that we've built up during 2019 and which clearly accelerated in the second half of the year. And so we're going to use the same format for our results that we used at the half year 2019. And I'd like to take you through the key points of our results. So the first slide demonstrates the real breadth of progress that we have made during 2019. We've delivered across a whole range of financial metrics, alongside good growth in our earnings. We've described this as an outperforming year. And we've done so for a number of reasons, and I'll cover those in more detail. But to summarize, we've seen really good performance in our digital like-for-like and we've moved into double digits for the full year and broken through 16% in the second half. Alongside this, we've seen good growth in our operating margins, up 1.7 percentage points. That's been helped by synergies and also structural cost programs. And then finally as well, we've moved, as Jim just mentioned, from being a net debt to net cash. That's a really important moment for the business less than 2 years after a major acquisition. It's for all of those reasons taken together that we've been happy and confident to put forward an increase in our dividend for a fifth consecutive year with a dividend increasing by 6.7%. No slide would be concluded or review of our performance be concluded without touching on pensions. And it's a positive story there, too. We've seen a reduced pension deficit following another year of cash contributions. And you can see the figures on the screen, and I'll touch on them again in a bit more detail in a moment. Now encouragingly, we have seen a slower decline in our overall group revenue, with a 1.3 percentage points progression year-on-year from negative 6.6% to negative 5.3%. Now we can see from the chart on the right-hand side that this is our best annual like-for-like performance for 5 years. We also note that the performance on the full year basis compares favorably with what we updated the market on at the first half, where we described a negative 6.3% like-for-like. And we've seen both the print and the digital comparative trends improving in the second half of the year. Digital mix now accounts for 15% of our business and it moved ahead year-on-year. And I mentioned a 5-year time frame a moment ago. If you were to look at the digital mix 5 years ago, it was just 5% of group revenue, now 15%. So we are making progress, but there's more to come. And that touches on the strategy update that we'll be giving shortly. If we move on to print revenue, this continues to absolutely be important for the group. And now more than 3/5 comprises circulation revenue. And again, that's performed robustly with the second consecutive year of trend improvement. Now this all reflects, as you know, the consistent passion, hard work and dedication of our 2,000-or-so journalists and editorial colleagues. They have real belief and pride in our heritage brands and it's relentless. They continue to work hard in whether it be our national or our regional newsrooms, and we've been able to drive results through that. In fact, to hold total circulation revenue broadly flat in millions of pounds, which is what you see on the chart, is a significant achievement, albeit part helped by 2 more months of our Express & Star acquisition year-on-year. Finally, just to touch on print advertising on this slide. We know that this is the most structurally challenged part of our print revenue streams. But there are 2 important points that we wish to draw out. First of all, we've seen that print advertising is now reduced from being 30% of our mix to 26% of our mix. And therefore, there is a moderation of the decline effect. But secondly and as a response to the structural challenges in this area, print advertising is an area where we continue to innovate. We've continued to develop new packages and solutions. Jim's already mentioned our campaign with Iceland. That was a collaboration through the course of 2019 that saw us put forward both promotional and brand collateral in the market together working in our national and our regional titles. Let's move on to talk about digital. This slide, without a question, demonstrates a strengthening set of digital metrics. In 2019, we have successfully delivered strong and accelerating growth across both digital revenue, which, as you can see from the slide, is up by 13.2% like-for-like, and also average monthly page views, up 25% like-for-like. Alongside this, and importantly, we've continued to grow our monthly unique users as measured by comScore, so our audience is getting bigger. And we've moved to 40 million, increasing by about 8%. Now we take all of this together, and it means that for the first time in our history, we've broken through GBP 100 million of digital revenue. And this is supported by scale consumption. So in the year, we had 15 billion page views across our network, and we reach a huge audience of about 80% of the adult population of the U.K., so very much a strengthening set of digital metrics. But importantly, this progressive trend, this improved performance trend has been progressing through the year. It's been an accelerating trend. And both of these 2 charts confirm that fact. We're already beginning to see the beneficial effects of our increasing focus on customer engagement. Particularly impressive on the left-hand chart is the step-up through the year in page views. Quarterly page views, as we would measure, you can see have been improving quarter-on-quarter-on-quarter and were particularly strong in Q4, 41% like-for-like growth. And that was equally strong across both our national and regional titles. In fact, in 2019, our Manchester Evening News website became the first-ever regional news site in the U.K. to hit 1 billion page views in a year. And in fact, across the Greater Manchester area, we now reach more than 84% of the adult population. We are so relevant in the areas in which we operate. All of these developments continue to contribute to digital revenue like-for-like. And so we saw half 2 stepping up versus half 1 and delivering that 16.4% growth rate that I've already referred to. And so management's key focus will be about maintaining a double-digit momentum in our digital business. And that very much links with the strategy that we're going to be talking about in a moment. Now we've got real confidence in our digital future and our content future. And that's why we're able to continue to invest in the business. In fact, we had 4 key digital investments in half 2 that I'd just like to talk to you about for a moment or two. This not only reflects our confidence but also our strengthened business fundamentals. Importantly though, the common spine of these 4 is journalism and content. Firstly, our Live model is absolutely working. Jim has already talked about the 7 new sites that we are opening, covering areas such as Yorkshire and County Durham. This is a proven editorial model with relatively modest start-up costs and therefore is a low-risk way of expanding our presence in the U.K. And it builds on the fact that Reach already operates 9 of the top 10 regional news sites in the U.K. We're already an established player. And this is about becoming even more of a scale player in the U.K. We've also invested in national digital journalism to further enrich our content in popular areas, areas such as show business, politics or royal coverage. And we've developed our newsroom in Scotland as well, including investing in the Daily Record. Now that further content investment is absolutely not the end of the story, it's what we do. And we will continue to actively respond to changing needs and wants in our very loyal customer base. Finally, we're very excited about the hyper local InYourArea platform. We've talked about it a number of times with the city. Almost 60 signed-off roles absolutely confirmed our belief in the bright future of that platform. This is a product which absolutely taps into the growing appetite for personalized news based on the area in which you live. Now we've been able to do that, all of that, whilst maintaining absolute discipline in terms of our operating margin performance. This organic investment, in fact, has been made possible through our ongoing continued cost discipline, particularly in managing our significant print cost base. Our operating margin at 21.8% is the highest level we've achieved in 15 years and it's with material acquisition synergies in the year which have helped us to step up by 1.7 percentage points. As we also described in our half year presentation, the management of costs and operating efficiency is absolutely in our DNA. We have a highly experienced senior management team, a number of whom are here today, who will help us to continue to develop our operating model into the future. But critically, this will be whilst protecting high-quality journalism and enabling us to invest for the long-term future of this business. The cash performance of Reach continues to be a jewel in the crown. This waterfall chart demonstrates that with an in-year operating cash flow of GBP 133 million delivered from an EBITDA of GBP 175 million. It's very strong conversion. And we'll talk about that a little bit on the next slide as well. In fact, in the year, as well as meeting our scheduled pension contributions and dividend payments, we were able to fully repay our acquisition term loan that we took out in 2018 to part-fund the purchase of Express & Star. Not only did that early repayment help us to simplify our debt structure, but it also reduced our interest charge in the year, which was down by about 1/4. Now operating cash flow in the past 5 years has never fallen below GBP 100 million and has consistently exceeded GBP 130 million in the last 2 years with a reliably high average conversion since 2015 of approaching 80%. Now I'll pick this thread up again in my second section in a moment's time. But this impressive cash flow generation will help to power our ongoing journey as a business. We will work to more fully capitalize on our scale audience and our operations through these strong business fundamentals. Now supporting our future growth ambitions will not only be the net cash balance, which Jim has referred to in his intro, but also a new 4-year GBP 65 million revolving credit facility with 3 high-quality financial institutions. Also, notwithstanding weaker bond yields, we've seen a reduction -- a net reduction in our combined pension deficit of GBP 53 million or GBP 41 million after adjusting for deferred tax. This importantly takes us to the lowest net pension deficit since 2013 with GBP 49 million of in-year cash contributions having been made. We're now underway with our next triennial review, and we remain in close and constructive dialogue with our trustees, our chairs and the team that we work with. So 2019 has been a really important year for Reach. It's one upon which we fully intend to build. As we've started 2020, we continue to perform in line with expectations, and we're pleased by the early progress that's been made in the year as well as being encouraged by the strategic potential of this business. And we will work hard to maintain that double-digit momentum in our digital growth that we've mentioned. Now is the time to capitalize on the hard work of the past 5 years, during which we have built a scale customer base. So let me hand back over to Jim to talk about the exciting next chapter.

Thanks, Simon. So here we go. Now before I start, just let me give you some context because this is really important, just to frame this strategy. Never in the history of our company have so many leaders accessed so much content in such frequency than they have today and never has a reach been so extensive, our distribution across the country has been so well aligned and never have we had the ability to engage directly with each and every one of our readers for asking for consent. Reach has historically not chosen to fully capture the value inherent in our scale, but that approach has now ended. It ends today. We intend to build direct, consensual, trusted relationship with our readers and we'll unlock value by providing them with more relevant content, services and products, capturing this ourselves and retaining the value of our customers rather than losing it to platforms, agencies or other commercial entities. We have to understand that traditional publishers are not our only competitors. The real battleground is in the value inherent and deep customer relationships. Tech platforms have built these relationships, and use them to challenge our distribution model. These are relationships that agencies require to understand how to properly service the clients. And the customer insight provided to clients ensures that the products and services remain competitive and relevant. It is this customer value that we have previously passed on anonymously, only monetizing, although not insignificant distribution reach. It's therefore high time for us to start competing aggressively and far more smarter. I talked earlier about the scale opportunity and the reach that the company has. And this is worth just reiterating just to put the value opportunity of the customer into perspective. We're the fifth biggest online property in the U.K., we reach 40 million unique users every month. And combined with our national and regional print products, 47 million U.K. adults engage with our content. We have 9 national print brands, 110 regional print brands. And combined, our newspapers sell over 1.4 million copies a day. Now that's not bad for a declining sector, particularly if you happen to believe those who haven't properly looked at our fundamentals. With over 50 websites and 40 news apps, we are the biggest commercial, national and regional news publisher in Britain with further reach through associate brand events and e-commerce partnerships. Our reach is not declining. It's actually been growing quarter-on-quarter. It's one of the reasons we've announced such a solid set of numbers this morning. The additive value opportunity is not just the scale, but it's the fact that the top 4 U.K. online entities of Google, Facebook, Microsoft and Amazon have an estimated average customer consent or addressable sign-up ratio of over 90%. We, on other hand, as the fifth largest online property, have less than 2% of our audience signed up and giving consent. I'm going to say that again, less than 2% of 47 million regular U.K. adults. And the reason for this is simple: We've never asked for it. We have never asked for their consent. Now hopefully, you can see the significant customer value opportunity that we feel very excited about. Now this section is about trust, which is why Alison's face is there, it's a very trustworthy face. I hope you believe that because it's all about trust. Now this is Alison Phillips, the Editor of the Mirror and our Deputy Editor-in-Chief. And she's one of the reasons that news and content are at the heart of this. The Reach portfolio represents the views of, informs and entertains multiple segments of the U.K. population both nationally and regionally. The news and the content we produce is the only reason we attract and maintain our audience. There is one reason that those different audiences continually come back to consume our content. And that is trust. Our representation is entrusted by these readers to the editors of their respective sites and their titles and it's key to our long-term growth. A tech platform doesn't have editorial oversight, we do. Whether it be relevant or personalized content, ensuring the right conversations and campaign that started on their behalf, whether the trust in sharing relevant customer information will only be used for the purposes that it was intended, trust is key. We believe the sacrosanct relationship between editorial and commercial allows us to develop noncustomer relationships in an environment where trusted, relevant and intelligent content is becoming key to building long-term relationships. So we've had great customer value opportunity and unparalleled content at the heart of our strategy. And we plan on achieving this through 4 main pillars. I'll go through them in greater detail through the presentation, but just to provide a brief overview. Firstly, we need to increase our customer engagement. This comes through deepening our relationships and improving the reading and content experience. We also need to get a single unified view of each customer. And once we've engaged the customer, we have the opportunity to view them as a known individual. Once we have given, or they have given that consent, they now have a unique fingerprint that allows us to call through their Reach ID to build a unique customer profile that means we can attach their interest to this particular ID. Through this, we will continue to innovate and broaden our platform to grow and diversify our revenue base. And underpinning all of this is customer data combined with talent, team and culture within the firm. To understand the principal customer value, we need to understand how our brands increase engagement. The fundamental point to recognize is that the readers of our titles, whether it be the Mirror, WalesOnline, the Echo or the Star, is that our customers, the customers that belong to us, are being serviced by other platforms, product and service businesses. This is true whether it be credit checking, insurance, travel, lotteries, switching comparison sites. It presents a substantial value opportunity for us. The customer crossover between our brands and highly engaging and high-margin product verticals is actually near perfect. Our ability to either disrupt in one of many verticals or to accelerate returns by using our brand equity for trusted engagement is a significant opportunity that we have not historically targeted. Our Animal Heroes Awards (sic) [ Animal Hero Awards ], the premier brand for engaging those concerned with animal welfare via the Mirror, and our football coverage both nationally and regionally covers over 90% of football in the U.K. We have an unmatched authority. That's just a couple of them. So these are the -- some of the only customer verticals that are covered. And the relationship between the customer and a vertical is very rarely one-to-one. In most cases, it's multiple but recognizing the vertical as a first step. The second step is recognizing and recording these behaviors and interests. And this starts with a nonregistered customer via just regional data such as postcodes. We can then strengthen that engagement through more relevant content. And the value transaction is usually just an e-mail address for personalized content, which makes those customers registered with consent. And now that we can individually tie customers to a vertical, we can, where appropriate, introduce customers to you and relevant products and service verticals, either as a transaction partnership or simply as higher-yielding targeted advertising. These 3 steps to acquire, retain and manage churn in our customer base through the verticals is all built upon brand trust and continued engagement. So how does it actually work? How do we start to build a single view of customers in our universe of 47 million. Well, it starts pretty anonymously. So if we take this real but anonymous user who visits Birmingham Live, he or she reads general news items but also repeatedly returns to things to do in Birmingham, specifically things to do with the family. At this point, all we know of the user is an IP address and a browsing history via cookies. But that's enough for us to start with. After a period of time, this loyal user signs up to Aston Villa news. Again, a real but anonymous example. The club's risk of relegation has increased their interest at this time of the season. And because this reader gives us consent, we can now use browsing data to personalize content. The more interfaces the customer engages in, then the richer the profile becomes and the better we can serve the needs. Now this in itself allows us to understand if they require car or pet insurance, discounted vouchers or a type of leisure activity. So in this example, we find that this reader repeatedly browses our car features. So a rich profile has now started to develop: e-mail, single IP address, type of phone, an interest in the mighty Villa and cars. And we are now starting to paint a picture of who this usually anonymous customer is. The reader then enters their postcode in our vanguard customer acquisition product InYourArea. And InYourArea provides all the relevant news, content, public notices and what's on and much more in the postcode areas that this particular reader has submitted. This piece of information is critical, as from the postcode data, we can determine sociodemographic and geographic information. But from this postcode, we pick up a key piece of information about this reader. Despite engaging with Birmingham Live and signing up to a newsletter about Villa, this reader actually lives in Borehamwood in Northwest London. She's an expat Brummie. Her search on kids' activities in Birmingham is to visit family and she likes to keep in touch with news from her hometown. This reader now becomes a customer. And we can introduce local businesses and services to her. But these are local businesses in Elstree, Borehamwood and Barnet, not Birmingham. InYourArea is accessed via her downloaded app. And we notice that restaurant vouchers have been downloaded and redeemed for a family of 3 in Harrow in Northwest London. We notice that a local carpet cleaning service in Elstree has been clicked through via the app and we've benefited from an affiliate agreement that was sold through our regional commercial team. We now notice that this customer, a reader who's now became a customer, also accesses our national Mirror title but only the travel section. Travel sections, in particular cruises, because that's what's been cross-targeted to. The explicit choice not to engage with any other content in the Mirror is also valuable as we can make data-driven assumptions about this customer. For instance, does she access the Express for news and content? We should check that and we have done. Now not all readers and customers will provide this much content. Some may hover at the left of this chart and others will be at the right-hand side, that's the most loyal cohorts. Whilst a considerable number will remain unknown, but they will be monetized through our programmatic models whilst we continue to develop relevant content to encourage them to engage and give us their consent. The point is that we are now aiming to capture that value that we have always passed on to other platforms and brands, whose understanding of our customer data was far more sophisticated than us. We recognize now is our time and operate in an environment where authentic news brands now have to have a clear advantage over other providers and the customer value opportunity. That 2% of the 47 million is there to be seized. So let's explore how we can diversify and grow our revenue to exploit this. Essentially, how do we unlock the value? What's compelling about this relationship is that we do not ask our readers or our customers for a penny. There's no pay walls. There is no fee for entry. But an implicit trust that their use of our network will result in better content and services for them. The unknown customer is anonymous and the programmatic model will still deliver yield as page views grow and continue to grow. But once we have consent, then by default, we have a highly engaged customer with more dwell time and the ability to segment across thousands of micro segments. This segmentation information improves the value to advertisers, advertisers as campaigns become more effective. Now note, this can still be programmatically served but with higher yields due to better targeting. It means that within the Reach network, and this is where our scale is still hugely valuable, we have more pages with increased revenue per page to a reader who gives us consent. An already considerable display advertising revenue can now take advantage of non-programmatic revenues. This could be sponsored content that has increased conversion rates, effect of product sampling of partner brand newsletters and comms, essentially targeted lead generation. It also opens up an opportunity for non-advertising revenues via premium app development, which by its very nature is a niche segment. And this could be niche podcast, like we've done in the recent Rugby World Cup podcasts, soft gaming opportunities with the football pools, niche travel segments for over 50s or insurance for high-margin categories. It also provides a great platform for a distribution network for lotteries and seasonal products. Now our deep customer knowledge increases but so does the conversion rates. And therefore, revenue share opportunities improve our yields. We now begin to have a whole new portfolio of products for our national and regional sales team to pitch, partner and sell, all because of our deep customer data, which is appropriately targeted. The most important factor in determining if we're going to be successful or not is our talent, our team and our culture. We have over 4,500 colleagues. And in the areas of national and regional journalism, printing and distribution, commercial and corporate management, we have some of the best people in the sector. We also have an editorial culture that welcomes commercial opportunities. And you can see that in our national and regional media solutions. But they're also an editorial group who will not countenance the dilution of the product with a first-class Editor-in-Chief, who sits on our executive and balances our commercial future with quality journalism. That's worked so far. Digitally, we have consistently delivered quarter-on-quarter growth. And the value of our media and advertisers seen in our brands is due to the growth in scale our online team are delivering. We're still the biggest printer of newspaper titles in the U.K. and Ireland by volume. And we do that profitably because we're good at it. Despite the ongoing views of the decline in the printed product, 23 million newspapers leave our sites on a weekly basis. That's not an insignificant business, and we do it well. I think it's time to start talking it up. From a corporate level, our ability to manage cash and integrate assets and deliver synergies is ingrained in our culture. And to be this efficient means you only get a game for this team if you're good enough. And we don't carry passengers. This was to be fair but is now even more so a tightly run ship. The pivot to our customer value strategy was not a jolt that required a huge change in our culture. Our readers and audience were always the most important aspect of our business. We just used to pass them on. Now we intend to bring them in and build deep relationships. So I can assure my stakeholders today that we have no cultural hurdles anymore that will block this. So what we're hoping to achieve, we will have 7 million registered customers by the end of 2022. That's a customer who's provided an e-mail address, has given consent and is engaging with us. These are customers we will know better with a single unified view and customers who will get an improved experience through deeper relationships with us, these customers will get greater value from our customer-centric culture, underpinned by data. Now let me hand you over to Simon, who's going to explain the details on how we're going to measure this.

Okay. Thanks, Jim. When I finished my previous section, I said that the time was now for the exciting developments that Jim has just been describing. But you might ask the question, "On what do I base that strong conviction?" Well, let's cover that in this section. For a start, the audience development of the past 5 years has moved us to a real scale. We've gone from a 15 million online unique user audience in 2014, you can see it on the far left, all the way through to a 40 million online unique user audience. And at the same time, we've more than trebled our digital revenue since 2015. Two scale acquisitions as well as the development of our broader digital proposition have been instrumental in achieving all that you're seeing on the chart and helping us to become the fifth largest digital property in the U.K., I'm not sure if we mentioned that. This is not to forget that we have a growing global relevance as well. Hundreds of millions of page views of ours originate outside of the U.K. Just to take an example of our digital progress. We had 9 Live regional sites in 2016. That grew to 29 in 2018. And in 2020, we fully expect to exceed 40 Live regional sites. Similarly, at a national level, we have now 5 scale branded online sites compared to just 2 at the beginning of 2018. And in fact, the Mirror and the Express sites now drive in excess of 300 million monthly page views from mass audiences. Now in order to develop a long-term digital business, as Jim has been describing, scale is absolutely critical. It's now the right time because we've got that scale. But it needs to be combined with depth of customer engagement. Let me just illustrate this for a moment, and let's just assume a constant audience and page view consumption level. Here's a traditional scale-only model with an anonymous customer base that over time may see a decline in customer value as market inventory increases and yields diminish. That's a traditional model. Let's talk about Reach's customer value strategy though, which will increase engagement through data and insight, which Jim has been describing. And this, we feel very strongly, can increase and accelerate the value relationship. In other words, yields can grow through that deeper engagement. And this all starts from this largely untapped base of about 2%-or-so customer registrations. That's where it all starts. And we aren't even actively monetizing that 2%. This is the scale of the opportunity. And of course, we don't intend to standstill on audience size or page views whilst we achieve this customer value strategy. And so if you see those 2 effects together, you can understand how there can be a real significant ratchet of customer value. So that's the core belief that underpins all the things that Jim has been describing. And it's what gives me the confidence that the customer value strategy is the right one for the business. Now you may well ask, "Is the market of sufficient scale to support these ambitions and the things that we've been describing today?" Well, we'd strongly urge that it is. According to estimates, based on the accredited IAB PwC Adspend report, easy for me to say, digital display advertising in the U.K. reached GBP 5.6 billion in 2019 and it continues to grow on a compound rate. Now despite us reaching a scale audience in the U.K., you see this little sliver at the base of the graph, that's how much market share we currently have, about 2% of the U.K. digital display marketplace. If you look at this bigger circle, which represents the U.K. total digital ad spend, we've got about 1% market share currently. That's a GBP 15 billion market. Our digital revenue, we've just described, this year is GBP 107 million. And so we see that the difference between that sliver at the base of the graph and then the area above it as the real opportunity that we can access and is one of the clear indicators of the opportunity available through this customer value strategy. Or perhaps put this another way, we'd only need to move that market share of 2% by a very small amount upwards to then materially move our total digital business. Now we believe very strongly that not only is the market scale there, but the business now has the right attributes and characteristics to deliver that growth. Our balance sheet strength has considerably improved and strengthened further over the past 12 to 18 months. And we have the capacity to support the journey we're on. It's very important to emphasize at this point though that we will not lose our financial discipline. And we will continue to be obsessive about returns on investment. But I'll cover that a little bit more on the next slide. Now all of the financial -- alongside all of these financial attributes, we also have our operational capabilities. Jim has already mentioned it. But this already includes 150 established print and digital brands and a set of digital platforms that, of course, will continue to require development and further improvement but through which we already deliver a mass audience. We already do it. It's just about tapping into the value of that audience. We also have a fantastic product and engineering capability within Reach. In fact, as part of our commitment to continuing to develop our product set and also importantly our user experience, we recently reassigned about 50 of these colleagues to sit directly in the editorial function that they work with, that they support. And so they will work shoulder-to-shoulder with the editorial teams to make sure we deliver the right products and the right user experience in order to secure the long-term vision that this business has. A further important step has been the recent recruitment of a Chief Customer Officer and the setting up of a customer division, something the company has never had before, and it's going to be an important ingredient for our future success. Maureen is here today. She recently joined us just a month ago from Facebook, where she was a senior executive. And she's here to help us to hone and develop our strategy so far as customers are concerned. Jim described our customer value strategy as an additive strategy, a very deliberate word chosen to describe it. And that's because it does build upon the bedrock of an already operationally strong business. Now at the half year, we shared this framework, you may remember it, to help to lay out the elements that we will consider when we allocate the capital and resources of this business. Now you may remember that the voiceover at the time was that we can absolutely continue to get the right balance and optimal balance across the different priorities, the 5 priorities or 4 perhaps if you exclude the leverage point, which perhaps sits over across all of them. Now at face value, our CapEx at sub-1% of revenue may seem low. But this ignores the fact that digital development and all the things I've mentioned, the product and engineering capability, the development of our platforms, that's routinely expensed through our P&L. Now what we're describing today does not require a major change in our tech stack. It does not require a re-platforming of our business. That's not a planned part of our customer value strategy. We already have the majority of what's required. And so a sudden double-digit million-pound increase in CapEx is not what we expect, it's about realizing the potential of what we have. Now on an earlier slide, we referenced the fact that we had a fifth consecutive year of dividend growth. And that's a track record we are rightly proud of and we fully intend to maintain. Now alongside this, we have our 10-year pension recovery plan as scheduled through to 2027. As I earlier hinted at, we're very pleased that we have a constructive dialogue with trustees and chairs of those schemes. And of course, it's clear that whilst both sides of the conversation have their own points of emphasis, the priority of delivering and driving a long-term sustainable business model is 100% aligned between these groups. We want the same thing. Now with a strong balance sheet which we have, we will systematically scan the market for opportunities to support our strategy. This could be through digital capability, it could be through further increasing audience scale or it could be through adding monetization options to our platforms. What's important about this though is that any such opportunity review will always be about aligning with our core values and our core purpose as a business. Also, I've already said we will do this on a disciplined basis. But just to talk a little bit about how we will look at this market scanning, how we will conduct that. We will, of course, continue to look at consolidation opportunities in the market, but importantly only where value exists for the business. What we will prioritize is M&A opportunities that help us to drive our digital and customer value strategy. And that will be the prioritization of those resources. Catch up. And then linked to this, just in terms of the bottom row, moving to an unleveraged balance sheet so far as bank debt is concerned is a key moment for the business. We've guided previously to wishing to keep below 1x net debt as a ratio. But this absolutely gives us ample scope for investing in the business. Today, we're setting out what we believe to be an exciting journey for the company. Now in terms of the yardstick by which that progress can be measured, Jim has already referred to a registered customer target, 7 million registered customers by 2022. But of course, you might be asking, "Well, what are the milestones or the stepping stones on that journey?" Very reasonable question. And of course, you will also recognize that this will take time to begin to influence the shape of our financial performance. Well, at half 1 2020, we intend to provide a further progress update on all of the things that we've described today, particularly including our registered customer target. Alongside that, we will start to talk about some of the themes and developments on our monetization thinking and customer experience. We plan to demo some of that customer experience for you. Then by the time of year-end, we will look to provide specific financial guidance on future digital ambitions and the value that we plan to extract from our new strategic approach. Alongside this, as is on the slide, we will continue to provide regular updates on our M&A and organic priorities for the business as we look to expedite our clear strategy. So by way of conclusion for my section. At the heart of our customer value strategy is a powerful network of brands which the business has assembled and launched over the past decades. We've repeatedly emphasized that we are a trusted part of the lives of approaching 50 million people in the U.K., not to mention a wider global audience. However, this absolutely relies on us continuing to maintain a high-quality editorial product, a product that has already ensured, already ensured our continued relevance across multiple centuries. But that's where our Editor-in-Chief Lloyd should definitely pick up the story.

Thank you, Simon. Well, good morning. Oh dear, sorry about that. I'd like to start by thanking Jim and Simon for inviting me to take part today. I've been at Reach and Trinity Mirror before the name changed, of course, for 26 years now. And this is the first time the company's most senior editor has done anything like this. So while addressing the great and good of the city is obviously not the reason I came into the world of journalism, I think today really does make an important statement about our company, our strategy and our vision. Jim thought it would be a good idea for me to explain what I do at the start of my bit. Hopefully, the suggestion was for your benefit rather than his. So I head up the editorial team across Reach. This role didn't actually exist when I was made Editor-In-Chief of the Mirror in 2012. And the reason that it didn't then, but is absolutely essential now, of course, is because the way in which we have restructured the business. We had editorial silos all over the place, national and regional ones, print and digital ones, even into departmental ones on the same titles. Back then, it took me more than a year to convince the business that it was in everybody's interests for the Mirror's digital journalists to actually report to the Mirror editor, rather than operate as an entirely separate entity. We were also spending somewhere approaching GBP 1 million a year, buying content from agencies, which had originated in one of our own regional titles. Our structure now means we are best placed to properly benefit from our national and regional mix. Part of my role is to ensure that our editorial teams are set up and working in the best possible way for the business, part editorial, part strategic, part commercial liaison, part manager, part marketing. But the most important day-to-day role of all of our senior editors is to protect the relationship between their news brands and their readers and users. Oh and I'm an Aston Villa fan, which you may have gathered from Jim's cruel jibe, but it must mean that Aston Villa has now had more mentions in any Capital Markets Day presentation in its long and proud history. And history is a particularly appropriate word with this football club. So we have around 2,000 journalists working at Reach, but they are joined by one common bond. Whether we're talking about someone sitting in a small regional office writing about potholes and planning applications, or a football writer revealing the latest transfer gossip, or an investigative journalist exposing child sex grooming gangs, they all want their work, their words to be read. Reach is a content business. We are a provider of news. We inform and provoke our readers and users. We entertain them, advise them. Sometimes, we agitate them. Sometimes, we shock them. Our relationship is about so much more than simply delivering information. There is and always will be, an emotional connection between reader and trusted news brand. As you've heard, some of our most senior editors are also in the room today. And again, this is the first time they've been invited to this kind of event. Given the entire company is built on the work that they and their teams do, this does seem a bit crazy to me, but we are very grateful to have been invited to the party this time. Each one of our editors knows and understands their readers and users, but every single one of them would like to strengthen that relationship. We are a professional news organization. We're not in the business of vanity publishing. One of the main reasons that I, and in fact, all of us from editorial are here today is to provide confidence that, as journalists, we support the corporate strategy. Well, the truth is we don't just support it. We embrace it, developing loyalty and engagement, being a go-to publication or authority, whatever the subject -- isn't some kind of chore for us, it's actually why we wake up every morning. And as Jim mentioned earlier, never in our long and proud history have we reached so many people with our editorial content. Scale and the benefit of our national and regional portfolio is a huge strength for Reach, but scale alone isn't enough. There are clear and obvious benefits editorially and commercially from our customer value strategy. The way people engage with our content has changed dramatically, and it is continuing to evolve. So I joined the Mirror in the pre-Internet days, and one of my first jobs involved sitting in the office late at night waiting for a dispatch rider to deliver the first editions of our rivals. They would usually arrive shortly before midnight. And then we'd see what, if anything, we had missed, messed up or what exclusives any of the opposition had. It would then be a frantic race against the clock for us to write our version of any stories that we could stand up, redesign the paper for the third and fourth editions to accommodate the changes. Fast forward to the newsrooms of 2020, and much has changed. The way we tell stories, the way we source stories and the way we share stories have all been radically impacted by digitalization. But while the methods have changed, it is content that remains our reason for being. Many of Reach's titles have long and rich histories. The Daily Mirror was founded in 1903. The Daily Express was first published 3 years earlier. The Sunday People is older still, started life in 1881. And that same rich heritage runs through our regional titles, too. The oldest paper in the group is the Huddersfield Examiner, which was founded in 1851. When the Titanic sank, it was the Mirror which campaigned to ensure that no ship ever went to sea again without enough lifeboats for every person on board. During the second world war, the Daily Express proprietor, Lord Beaverbrook, energized the newspaper readers to raise vast sums of money to build the spitfires needed to win victory in the skies. The Liverpool Echo fought for a quarter of a century for justice for the victims of Hillsborough. When the Manchester Dogs' Home went up in flames, it was the Manchester Evening News which raised more than GBP 1 million in 24 hours to secure its future. Scotland has the highest rate of drug-related deaths anywhere in Europe, prompting the Daily Record to ask some fundamental questions about the crisis in 2019. The highlight of the campaign was the Record's front page with the headline decriminalized drug use. This has since become the official policy of the Scottish government, which is trying hard to put pressure on the Prime Minister to devolve the powers to Holyrood. Last year, the Daily Express won the battle for life-enhancing drugs to treat thousands suffering from cystic fibrosis. And the paper has now launched a campaign for a new cutting-edge cystic fibrosis wonder drug to be made available on the NHS as soon as possible. And in April this year, a major change to the laws on organ donation comes into force in England, which will see the introduction of an opt-out system after a successful campaign by The Daily Mirror, supported by all of our major regional titles. It is estimated that this one change alone could save in the region of 500 lives every year. All of these major campaigns ran seamlessly across print, website and social media because, unlike our rivals, we have fully integrated multiplatform newsrooms. Last week, the shortlists were announced for the National U.K. Press Awards, and we received 19 nominations. And I'm delighted that cystic fibrosis and organ donation were among them. But history alone does not give us the right to thrive in the future. Yes, it's important. It's the rock on which our entire business is built. But we must continue to reshape our newsrooms and our news products for the future. It's not all serious stuff, though. We do fun, too. Our portfolio includes the celebrity loving must-read, OK!, and new magazines and the unashamedly irreverent, Daily Star. And we're proud to give people some proper me-time and escape from the day-to-day and something to make them smile, even on Brexit day. And we have plans for how these titles can help to play a key role in our new customer-focused strategy. Our content isn't restricted to newspapers, websites and magazines either. We have a fantastic portfolio of events. The flagship is, of course, Pride of Britain, which we created and launched in 1999 and has been on prime time ITV every year since 2000. The Pride brand also has a number of spin-offs, including Pride of Sport, Pride of Birmingham, Pride of Manchester, and starting this year, Jim, Pride of Scotland. And for the last 7 years, we have staged the emotional and highly entertaining Animal Heroes Awards (sic) [ Animal Hero Awards ]. This year, we will also be holding 8 Pub in the Park music and food festivals as part of our joint venture with Brand Events. And here's a video to give you a little flavor. [Presentation]

This is an exciting time for Reach, and we are already making good progress. We currently have 1.2 million app users visiting us at least 28x a month, and that number has been growing at 100,000 a month. The number of loyal readers on our regional titles is up 25% year-on-year. On the nationals, the number is 20%. And the number of readers subscribing to one of our newsletters is currently growing at 10% month-on-month every month. There's no doubt that editors across the group felt more confident at the start of this year than they have for a long, long time. We've made great progress. But we know that we are now at the start of an exciting new chapter, and our data-driven customer value strategy underpins this optimism. So what does it all mean for our journalists at Reach? Well, it means live blogs data, social media desks, audience teams, podcast studios, content hubs, new apps, live events streamed online. It means verticalization, videographers and fashion and beauty influencers. It means new launches, such as our expanding network of regional live sites, which Jim mentioned earlier. And our new InYourArea website, which, powered by cutting-edge product innovation, allows us to deliver bespoke and aggregate content at postcode level. It means investing in journalism and our products. Over the past few months, we have recruited or are in the process of recruiting more than 70 new journalists across the group, and we are being actively encouraged to pitch for more. It means ensuring our powerful print products with their huge loyal readership base are as relevant and influential as ever, breaking exclusive stories, setting agendas and provoking debate. It means growing a digital audience of real scale. You've seen where we've got to. But there's so much more to be done. And unquestionably, it means we absolutely must build closer, deeper relationships with our customers, delivering them the content they want, when and where they want it. What journalist wouldn't want to do that? Thank you.

Thanks, Lloyd. One of our best. I don't know why we keep our best behind the scenes, that's changing as well. And they're all here in the first -- the front row as well if you want to speak to them. Right. I know you're desperate to ask the questions, but I just want you to give me 2 minutes just to summarize where we are because I think these points are important. The first one is, with the full year result out on from '19 is solid, it's what we needed to launch our strategy. And it's great to have that because it's strong foundations to build upon. You heard about the scale of distribution, it's huge. We might think back 10 years ago when it was smaller, but it is still considerable and some of our fundamentals that I think were either unknown or misunderstood. And I'm going to be fair, there may be some people in the room or others who have been following us, I don't think we told the story that well. I think a lot of it sits on us. So we're trying to tell you that now. You've heard about a British company, which is nice, not far behind the tech platforms and customer engagement, sitting at #5, that's something to be proud of. I've shared the good trust and trusted content. And again, why am I telling you that? It's the reason people come back. We really believe the public want to know where the news and the content come from. Just like the clothes that you wear and the food that you eat, who is producing it? What's the purpose of it? We think that's important. And we think our customers and readers think that's important as well. So we're going to recognize this. Simon and I have used this word, if you've been counting, 8x. It's additive, it's an additional strategy on top of the work that we're doing well. So the bread and butter is our scale, is our reach and our yield and cost management that, that is an additive strategy. And if I was to describe the brief, as I said earlier, we just used to let 47 million of our customers just pass through, and we'd take a small clip, but we just let them pass through, no intent to bring them in. And that 2% number we intend to grow. So our target to start with is 7. And then finally, because we're actually quite an intelligent organization, they're very bright, we've got a lot of good listeners. I just want to say 1 thing, we could not have done this without the people at Reach. Simon and I are just in the door. It's because of them that we've got this strong end to 2019. The news, the content, the copy, the pictures, they all come from somewhere. And I was speaking to one of our editors who I was walking out the door with on Friday night and forgive me, I forgot this, but some of these people are in very dangerous places. So I do apologize for that. And it's important to remember it. So I want to say thank you to them for the contribution in the company in '19. And now, I'm going to hand you over to Nick for some questions.

Okay. Sorry, if I could just interrupt. I've just got the last editions of today's papers, Daily Express. "Reach Chief unleashes data-driven plan to boost growth". "Publishing giant supercharges revenues with customer value strategy." That was a good one. Daily Mirror, oh, "Mine the gap." "Reach boss announces strategy to unlock more value from customers." Very good [ Alastair ]. Daily Star, world exclusive "Ka-ching."

Hope so.

"Reach big cheese" -- sorry about that -- "unveils trailblazing data strategy." Thank you, Johnny.

Thank you very much.

Right, I'm getting out of the way.

Fabulous. Thanks, Lloyd.

Well, we've done our best to use Lloyd's words to inform and provoke. So I'm sure there are some questions. Could I ask -- we've got a roving mic. When you get to ask your question, could you say who you are and where you're from, and we'll take it from there. So first question.

Yes, Gareth Davies from Numis. Kick off with 2 for me. When we're thinking about the 7 million and sort of how that builds over the next year or so and how we should be thinking about that impact in revenues, presumably from a monetization perspective, you need a bit of scale in that before it starts to really impact revenues. So it's sort of 2021 into 2022 before we start seeing any real benefit coming through. Can you maybe just put a bit of a revenue framework around the sort of timing to set our expectations? And then secondly, one for Jim. In terms of -- I mean, it's interesting that you sort of flagged systems well invested and no need for an additional CapEx spend or big investment. I mean it would have been a sort of easy opportunity to say, right, actually, we're going to put GBP 20 million into systems at this point in time to really speed this up. Maybe you can give a little background around why you felt that wasn't needed.

Okay. So I'll start with the 7 million and how it builds up. We've been very deliberate in not giving financial guidance at this stage, and that's because part of the journey we're on around building from that 2% or so up to the 7 million is about learning from that deeper engagement. So it will -- the strategy will be self-informing in that sense. As we build that bigger scale, we will be able to understand and identify verticals and opportunities that will open our eyes to new revenue streams. So whilst we've given you some of the key elements of the framework, in terms of the detail, clearly, that will evolve as we build that deeper customer understanding and build from there. I think you're right, Gareth. I mean in terms of what that will mean for revenues, we're looking at 2020 as a key year of moving that strategy forward. We've talked about the foundation that 2019 has given us. I think 2020 is a year of building, a year of evolving the operating model and helping to sort of build the framework for what will come in the years thereafter. And therefore, yes, it will take some time. We do need to get to a certain scale. Certainly, in terms of some of the things that Jim was talking about, in terms of advertising monetization, we need scales -- a scale level in order to be able to tap into some of those verticals and those niches that's been described. So you're heading in the right direction, I think, in terms of looking more to 2021 and 2022 in terms of starting to see that contribute to our result. But in the meantime, and that's really important, we will continue to build our page view growth, build our audience and monetize on the basis of our current strategy.

We knew the question on the platform effect was coming. It's the right question to ask. We actually have a lot of it. And I would say that a lot of the tech CapEx, the way I described it, it was left on the table for initiatives that we tried digitally. I mean some of it is new stuff, it's well polished, it's been well maintained and it sits there. And we're using a de minimis amount of its capability. So that's the reason why we're not coming back with a big CapEx investment. So we've got the farms, we've got the DBMSs, we've got the data lakes. What we don't have or what we didn't have is capability, so it's capability over CapEx. Maureen is the vanguard of that. She basically represents the customer analytics and the measurement side of it. And she's already highlighted some of the gaps that we need to fill, and we're doing that. That's already progressed, but that will be continuous. And then the final thing to say is that there is money I've put aside, single-digit millions for the capability of maybe some of the analytical tools that we'd need. So we have it. But the big double-digit CapEx investment, that's not where this is and neither do we think we need any anymore.

One in there.

It's Nick Dempsey from Barclays. I've got 3. First up, if I go look at DMGT, they've got GBP 140 million of revenues are made online. Rough estimate, somewhere around GBP 100 million of that is in the U.K. There, on comScore, their unique visitors are a bit less than you guys, not completely out of that bracket, a bit less. So are they doing any of this? Have they invested in custom -- sort of building more data about their readers? And if they have, why aren't they getting more revenues if the opportunity's there? Second question, do you worry about changing views on privacy in relation to your strategy? So we saw some negative articles about a company called Avast, which does antivirus software, about their data capturing business on consumers and they killed it within hours because they were afraid of the reputation element there. So your views on the changing privacy world in relation to your strategy. And the third one, how do advertising agencies view all of this, when you talk to them about it? They're all putting together big consumer data strategies of their own. Are they excited by what you're proposing?

Okay. I'll take the first 2. Andy, are you happy to take the third one? So on DMGT, so basically, you've asked me a question about another publisher's strategy. So I'll try and give you a view because it's mostly for them. Yes, they do have a large audience. They are monetizing it well. It appears their strategy is to monetize their audience anonymously through programmatic. I think I picked up in the last releases that they were moving from B2B into B2C which we're both doing. We -- I can only talk about us. We are looking to continue that approach with the scale that they have. But also, we think getting to know the customers is better. Now putting aside the revenue reasons for doing that. We are well aware of the browser privacy and the third-party cookies reduction that is going to happen. And we think, I can only speak for Reach, that we believe that the way to a future that is through growth, is to prepare yourself with direct customer relationships before that actually lands. And it was timely that I came in and then Maureen -- I was delighted that Maureen accepted to start because she's -- that's obviously front of mind for her. So we are going down a route where we're trying to build direct consumer relationships. Where DMGT go, it'll be unfair of me to comment on that. Okay.

Can I just say one other thing? I mean the other thing that's clearly different about our 2 businesses is we've got the footprint of both the regional and the national estate. And therefore, we've got the opportunity to get to understand our customers, not just from a national title, but in the regions and areas in which they live, whether that be through InYourArea, whether that be through our regional titles, online and in print. So we have got some capabilities that they haven't and which we are looking to exploit.

The worry about data privacy? Yes, every day. Every single day. It's the asset that we're trying to capture. It's one of the reasons, not the only reason, why editorial are here -- about the relationship, about how we behave as a corporate is that these readers, these customers will be managed and given information and content, which is only applicable to them. Now, that'll have oversight by Maureen and our Data Protection Officer. But we're also -- we're accountable for editorial as well about how we manage this. Which is why I talked about the trust and everything else. So we are going to behave appropriately and the governance procedures for that have already been -- started to be implemented. So do we worry about it? Yes. Will we ever be stop worrying about it? No. It becomes a risk to the business as you gather more data, but that's the world we live in now. So we think we have quite strong trusted values to start with. And then the expert on ad agencies, our CRO sitting there, Andy Atkinson. Do you want to answer that, Andy?

So advertising agencies are and will continue to be a very key partner of ours. As we've talked about, this strategy is additive to how we've worked with them in the past. They are very excited because they recognize the unique relationship that we have with our customers will enable us to build a data relationship with those that can help maybe change the shape of their business models moving forward. So we'll continue to work with them. We want a fairer relationship of how that money is split up, but they're very excited about the opportunity that, that will throw up for them.

Thank you, Andy. Is that all right, Nick?

Yes, it's Natasha Brilliant from Citi. I just wanted to come back to sort of Nick's point on privacy. And just from a consumer perspective, you talked about trust and things going wrong. But I think in this world, now consumers are getting sort of more knowledgeable on privacy and then perhaps less willing to part with their data and their details. So how do you overcome that hurdle? And how do you persuade them to convert? Because I -- your point about the likes of Amazon having 90% of their users registered, I wonder if they were launching today, whether they'd actually achieve that? And so you overcome from a consumer standpoint to getting them to convert.

Yes, I agree with you. I think if Amazon launched this week, they wouldn't see the same uplift curve as they have seen. And I think people are becoming far more sophisticated with the data. One of the slides I showed you about a very, very gradual uplift of information that we gather. All we're trying to say if it's Jim Mullen who lives in Surrey and he's interested in Scottish football, then speak to me for 3 or 4 months on Scottish football. And then you'll find out that I also access the cars features, so maybe a few months later, talk to me about cars. So there's a period of time where we want to grow it. And then one of the things we were wary of is people who say, "Oh, wait a minute Simon, Jim, you get 7 million of 47 million in 2 years, come on." And the reason why we've done that is we want to gradually build this up, so people have the trust. So the curve of let's start the business in 12 months, you will see us get to 50 million. That's why we've done it, so it's over a period of time, so as we can build up the trust.