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Mar 2024: In search of Nirvana – Supernatural Compounders

March 15, 2024
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In search of Nirvana – Supernatural Compounders

March 2024

 

We think we now have a decent mouse trap for finding good businesses when markets dislike them. More recently we have also spent a more time thinking about the very best compounding companies, how to identify them and value them. We’ll call them Supernatural Compounders.

Preamble: Cyclically depressed compounders

The work we undertake to seek out better compounding investment opportunities often sees us look at businesses going through a period of flux. We try to only assess businesses that are profitable and proven when we look at their past compounding. Hopefully we assess them as likely probable to return to that compounding power/rate in time also. Examples of this trait we have looked at are now numerous (Ryanair and Jet2 come to mind). Another one we wrote on last year, that is still at the depressed stage of its return cycle, is shown in the chart below: CarMax.

CarMax, as a proven long-term compounder offered at a great price, remains in our sweet spot.

Fig.1: CarMax Return on Equity

A graph of orange bars Description automatically generated Source: Bloomberg

“For 26 years CarMax’s focus has been making car buying more ethical, fair and stress free by offering a no haggle experience and an incredible selection of vehicles.” Harvard Business Review report on CarMax, 2019

When assessing cyclically depressed compounders our thinking is along these lines. The proven growth in intrinsic value that we assess as likely to soon return gives us the long-term compounding we are after. The depressed starting price provides our margin of safety.

This balance of a forgotten past compounding ability vs near term uncertainty results in Mr Market seeing such companies in a bad light. This is what sits behind our favourite investment pictorial shown once again below. We think this is the essence of our job as investors and custodians of other people’s money, i.e. to invest in great companies when they are not priced as such.

Fig.2: The best chart in investing..!

A diagram of a diagram Description automatically generated Source: Holland Advisors

Sometimes these marked-down businesses we are assessing are Dream businesses (i.e. high ROIC with little capital required to grow). More often they are Compounder businesses. i.e. ones making good, rather than great ROICs/ROE’s but where more capital can be deployed to grow further.

Compounding vs Franchises

Hopefully the above paragraphs act as a short summary of how we have spent our time in the last five years. Recently however we have been thinking a little harder about some of the very best companies that might fall outside this remit of ‘depressed compounder’.

Indeed, with our focus on ‘compounding’ vs other investors sometimes being more obsessed with ‘franchises’ there is maybe a perception that we don’t like companies with great economic models. This could not be further from the truth. What we don’t like is overpaying/fully paying vs the likely compound growth rate we are most likely to get.

“Pay only a reasonable price, even for excellent businesses” Lou Simpson

Let us consider three companies whose returns and valuations are not depressed and whose outlooks are different but seemingly predictable:

  • Company A – likely 12% intrinsic value grower priced for 25x earnings,
  • Company B – c.12-15% grower priced at 16x earnings,
  • Company C – c.25% grower priced at 30x earnings.

Looked at in this light we found many companies in the Company B camp in c.2010-2014 that we liked (Unilever, Becton Dickinson, Diageo). However, as the trickle of people looking for such franchises became a flood these companies became more highly rated. This resulted in higher PE multiples, reducing margins of safety and lower rates of intrinsic value growth due to less ability for enhancing share buy backs.

In short, we like companies in the Company B group, less so Company A. We accept and observe that companies such as Unilever, Becton Dickinson and Diageo are more interesting today than they have been for many years. This is either due to absolute share price falls or due to their growth having caught up with once elated valuations.

In hindsight we may have been foolish to move on from these high quality businesses too early in the 2014-2018 period, as they re-rated higher. That said we are pleased that our valuation discipline held/holds. Also, to have used our time in other investments to learn more than just a need to ‘pay up’. This maybe updates our thinking on ‘what price to pay’ for semi-predictable quality growth (i.e. Companies A and B), but it is not what this research piece is about.

In search of Nirvana – Supernatural compounders

At Holland we are mean-fisted investors, always wanting value even when we are looking to invest in a great company. Consequently, pricey newly formed growth companies can sometimes pass us by. If this growth is outside our circle of competence and is largely unproven, we are relaxed about such misses. That said we need to accept that our desire to pay reasonable (read low) look through multiples can mean we have missed investing in some wonderful understandable businesses. A good example might be Costco as we reflected on last year.

We are always wanting to learn, however. As such we have spent a little time reflecting on what we describe above as Company C. I.e. to consider how in the past we would have, and now should be, thinking about the very best businesses in the world, even if they are seemingly expensive to purchase.

“At Berkshire, we particularly favor the rare enterprise that can deploy additional capital at high returns in the future. Owning only one of these companies – and simply sitting tight – can deliver wealth almost beyond measure. Even heirs to such a holding can – urg! – sometimes live of lifestyle of leisure.” Warren Buffett, Berkshire Hathaway 2023 annual shareholder letter, published 25th February 2024

“This may be a good place for me to share a semi-philosophical thought: The ideal business is one that earns very high returns on capital and continues to generate high results on incremental capital. But businesses of this sort are exceedingly rare, and it is even rarer to purchase one at a reasonable valuation. Sadar Biglari, Biglari Holdings 2023 annual shareholder letter, published 25th February 2024

The above quotes were both published on the same day this year (25th February) each without sight of the other. The first quote all readers will hold in high esteem, the second many may dismiss. Both however speak to the point we are interested in and were made by people who have thought very hard about this subject. A business that not only makes a high return on capital today, but also can keep deploying future capital at that rate is highly valuable. Just how valuable we will come to shortly. A bit like our past observations on compounding it is easy for us all (readers and writers) to conclude that we know all this. Maybe we do..? More likely we don’t understand it quite as well and fully as we should. Some of our discussions in such areas might be seen as ladybird in style, but we think that serves a purpose.

“Everything should be made as simple as possible, but no simpler.” Einstein

Raffle tickets and secret prizes

Last week I hosted my village quiz, and we had a raffle. Imagine yourself buying a raffle ticket. You know the price of the ticket and you know that someone will win. You can maybe even judge the odds of winning by looking around the room at how many tickets are being sold. But imagine I had the prize table covered up. You don’t know if the prizes include a week in Barbados or just some soap on a rope. If the prizes were amazing chances are we would sell a lot more tickets and/or could raise the price of them.

Eighth wonder of the world

Let’s now return to the idea of our supernatural compounders. Few great companies today can deploy all of their retained profits for future growth, but let us assume four of them can, companies W, X, Y and Z. We also assert that future Returns on Equity will match those of today.

They make Return on Equity and have PE’s as follows:

  • Company W: ROE 10%: PE 12x
  • Company X: ROE 20%: PE 15x
  • Company Y: ROE 30%: PE 20x
  • Company Z: ROE 40%: PE 30x

Finally, we will tell you that each of these companies in ten years’ time will be valued at the same PE multiple it is today. How much do you want to invest in each company?

Hopefully we have made this quite simple. Cleary Company Z will grow the fastest so that’s our best investment, but the absolute outcomes are worth seeing. Here is the end value of each company ten years from now if it rolls forward as we observed above, redeploying all profits at its current ROIC/ROE rate:

  • Company W: 10% grower – valued at 2.6x current value
  • Company X: 20% grower – valued at 6x current value
  • Company Y: 30% grower – valued at 14x current value
  • Company Z: 40% grower – valued at 29x current value

Maybe these outcomes surprise some readers, maybe not. All they are is the outcomes of constant compounding (see 8th Wonder of the World on Holland Advisors website). Today when investors discuss PE multiples, they are discussing the price of the raffle ticket. Doing so without a consideration of the potential chances of winning the raffle is foolish. I.e. Is this company likely to have a positive outcome ten years from now (is it a safe or risky venture)? What we are interested in in the case of supernatural compounders is the size of the prize offered to us in ten years (the Barbados holiday raffle prize if you like). If there is a chance of making c.15x our initial investment, we need to think hard about both the traits that produce such outcomes and the price we might pay for them in today’s money.

Back to our reality

Quite a lot of the companies we look at might have ROIC/ROE’s of say 20-25%. The good ones can maybe re-deploy 60% of their profits to grow. If reproducing past returns on capital, then they are growing at 12-13% pa and maybe paying us 2-3% pa in dividends/buybacks. As such we are owning companies that will likely beat market returns by offering +/-15% pa growth in intrinsic value.

What we need to be doing however is reacting correctly and thinking harder when we are being offered a raffle ticket with a potentially far greater payout. This likely comes from a business making ROE/ROIC of 20-40%, but importantly one that can redeploy almost all of those profits in future growth capital.

Is c.20% long term growth actually possible?

Clearly many company and analyst forecasts have growth rates of c.20% built into them. Our job as seasoned investors is to realise:

  • That, in most cases, the probability of such forecasts being worth the paper they are printed on is very low indeed
  • That very few companies in the course of history have ever compounded at such rates
  • That those that did, had some powerful driving forces that enabled them to do so:
    • These are likely either secular or structural in nature
    • Also, with a human backup, i.e. most likely headed by a highly talented Owner Manager and strong company culture.

We consider a few businesses we know that have compounded at such rates.

  • Amazon sales grew at a 26% IRR from 2010 to 2020
  • Berkshire Hathaway’s book value per share rose 20.2% between 1965 and 2010
  • Danaher’s EPS grew 19% pa from 1993 to 2013

The first conclusion we would make is that something very special was going on at these companies either structurally or where new secular growth was occurring. There was also a strong culture at work. These traits are easy to see after the event. But a good analyst at the time could have got a sense of these drivers:

  • By 2010 Jeff Bezos was articulating a clear vision and was showing the drive to achieve it. Amazon’s online offering and consumer obsession was powerfully differentiated.
  • Buffett was clearly an exceptional investor, and importantly the insurance float structure Berkshire possessed gave him a structural ability to outperform others who were investing non-float capital.
  • The Danaher Business Systems implemented by Rales Brothers was a whole different approach to cost budgeting and efficiency that was being rolled out across acquired companies.
Where to find supernatural compounders

Reflecting on these and a few other companies we observe a few areas where we think supernatural compounders (i.e. 20% pa growers) can emerge.

Organic growers/Roll outs

A powerful new route to market or new product/cost offering is likely taking place. Clearly Amazon’s online offering was a great example, but there are plenty of others. These might include the exponential rise in use of semi-conductors (TSMC) or the rollout of fast food/other retail formats across America (McDonalds, Wal-Mart, Floor and Decor). The quote from Peter Lynch, which we have used many times recently speaks to this. I.e. the idea of not having to be invested at the very beginning of such companies but seeing the success of the rollout then extrapolating further. Indeed, forcing ourselves to think afresh as to why a company with a compelling cost/service offering cannot in time have a c.25% market share vs say c.3% today is a great exercise. Fast food/low cost airlines and maybe even CarMax/Carvana are all good examples of this exercise.

Crucially there probably has to be a step change in either the quality and/or price offering for the growth occurring to be lasting in tenure. There also likely has to be a long indefinable runway for the business to grow into and a strong leader/culture to keep the business focused on the right values to achieve it long-term potential.

A large part of the reason for our recent enthusiasm for Nubank is that we think it may well fall into this camp. It’s offering is loved by consumers, its unit cost base very low vs any global banking peer and its business economics very good (>40% RoE in Brazil). Both in Latam and other banking markets worldwide it might have a long runway of growth to redeploy large amounts of future capital.

Ferrari is another such company, making c.50% ROIC’s but also having a strong capital rollout potential. In hindsight Chipotle was also an organic super-compounder with rollout compounding potential when we looked at it some years ago. Not keeping our conviction on it was in hindsight a huge mistake. Maybe if then we had thought about 14x rewards we might have been more diligent/patient. That is what this exercise is designed to do, illustrate when/how supernatural outcomes can occur to make sure we give them due attention now and in the future.

Assets Managers/Conglomerates

A second potential source of super-natural compounding is Assets Managers/Conglomerates. I.e. those able to take capital from one area of business and re-invest it in another. In theory as investment managers ourselves we have the ability to do this, but to achieve 20% annual returns is very difficult indeed. For all of the trading abilities we think we have, in truth our returns will end up matching those of the average company we own over time. (NB: Finding 2-3 supernatural compounders is hard enough, finding 20-30 is maybe impossible). The only, and rare, examples of diversified fund managers achieving c.20% pa results were the likes of Anthony Bolton or Peter Lynch.

Conglomerates are effectively Asset Managers, and the very best managed ones do demonstrate an ability to redeploy capital in a sophisticated way. Unlike mutual fund managers, conglomerates can move capital between sectors and assets classes, i.e. public and private markets, equity and debt, globally. Also, they can use other people’s money in their structure to boost returns further (deferred tax, debt and insurance float all being examples). Two examples of successful outcomes creating supernatural compounding are Berkshire Hathaway and Bollore Group. Our fund holding Biglari is aspiring to that ideal, moving capital between sectors and assets classes. As yet its outcomes of the last 20y (judged on book value per share) are a good clip below that 20% level. Exor is aspiring in this camp also.

Serial Acquirers

A segment amongst a third group of companies have shown the ability to compound at the c.20% rate also. These are serial acquirers. These businesses are either rolling up an industry or acquiring across different industries. Clearly the ability to keep deploying acquisition capital in such an astute and enhancing way is a rare and intangible skill. It is often only valued by markets after the event has taken place (i.e. after years of proven acquired compounding). Even after the concept is well proven and the shares seemingly fully valued the best of such business can still be excellent investments.

Constellation Software is the perfect current example, but others exist also such as Heico, Danaher, John Malone‘s cable assets and a few Swedish serial acquirers (e.g. Lifco & Lagercrantz)[1]. If an investor expects/assesses such companies can keep redeploying capital at c.25% return rate, then paying c.30x for such business is easily justifiable.

A few final reflections

The three buckets above are places we think investors should look for outstanding compounders. Each bucket can of course overlap, particularly in conglomerate/serial acquirer space. In such companies the future maybe hard to see, not just for the investor, but even for the company manager themselves. The decision to invest will often be in large part a play on the skill that person/team possesses and the structures they have in place around them to help them repeat past good asset allocation decisions.

On the organic grower side, we think the companies and roll-outs in front of them should be out-standing. Arguably they also should be ‘stand-out’ organisations that are obviously offering their customers something different.

The hunt for great compounding continues.

Andrew Hollingworth

The Directors and employees of Holland Advisors may have a beneficial interest in some of the companies mentioned in this report via holdings in a fund that they also act as managers to.

Disclaimer

This document does not consist of investment research as it has not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore even if it contains a research recommendation it should be treated as a marketing communication and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. Holland Advisors is authorised and regulated by the Financial Conduct Authority. This presentation is intended for institutional investors and high net worth experienced investors who understand the risks involved with the investment being promoted within this document. This communication should not be distributed to anyone other than the intended recipients and should not be relied upon by retail clients (as defined by Financial Conduct Authority). This communication is being supplied to you solely for your information and may not be reproduced, re-distributed or passed to any other person or published in whole or in part for any purpose. This communication is provided for information purposes only and should not be regarded as an offer or solicitation to buy or sell any security or other financial instrument. Any opinions cited in this communication are subject to change without notice. This communication is not a personal recommendation to you. Holland Advisors takes all reasonable care to ensure that the information is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. This communication is based on and contains current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of this communication may have been disclosed to the issuer(s) prior to dissemination in order to verify its factual accuracy. Investments in general involve some degree of risk therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investment discussed in this communication may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of this investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. This document is for informational purposes only and should not be regarded as an offer or solicitation to buy the securities or other instruments mentioned in it. Holland Advisors and/or its officers, directors and employees may have or take positions in securities or derivatives mentioned in this document (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manage conflicts of interest in regard to this communication internally via their compliance procedures.

  1. Two weeks ago we attended a Serial Acquires conference run by Redeye in Stockholm. We recommend it most highly to any looking at this space. ↑

 

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Therefore, even if they contain research recommendations they should be treated as marketing communications and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. These communications are not personal recommendations to you and any opinions cited are subject to change without notice. Holland Advisors takes all reasonable care to ensure that the information on this site is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. Documents on this site are based on, and contain, current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of these documents may have been disclosed to the issuer(s) prior to dissemination in order to verify their factual accuracy. Investments in general involve some degree of risk, therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investments discussed on this website may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of an investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. Holland Advisors and/or its officers, directors and employees may have or take positions in securities, funds or derivatives mentioned on this site (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manages these potential conflicts of interest internally via its compliance procedures. Fund Information Parts of this site may refer to Funds managed or advised by Holland Advisors. These are not solicitations to invest and any potential investors should refer to the “Our Funds” section of the website in order to learn more about these Funds and find out how and where to obtain the relevant full legal documentation. Linked Websites This site may be linked to third party websites or contain information provided by third parties. Holland Advisors does not make any representation as to the accuracy or completeness of such websites or information, has not and will not review or update such websites or information, and cautions browsers that any use made of such websites or information is at their own risk. Holland Advisors does not accept any liability arising out of the information contained on any linked website or Information provided by a third party and the use of such sites and information is at your own risk. This does not exclude or restrict any duty or liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. Indemnity You agree to indemnify and defend Holland Advisors, its affiliates and licensors, and the officers, directors, employees, and agents of Holland Advisors and its affiliates and licensors, from and against any and all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your access to or use of this website and the Information. Use of Cookies If you agree to these terms and conditions a “cookie” might be placed on your computer. A cookie is a packet of information that does not identify individual users of a website, but allows the collection of website activity (such as the number of users who visit our website, the date and time of visits, the number of pages viewed, navigation patterns, what country and what systems users have used to access the site). We can use this information for statistical purposes, which allows us to analyse and improve our website. The cookie will expire automatically after 6 months or you can manually remove cookies in your browser settings. Copyright, Trademarks and Other Rights Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Holland Advisors or relevant third party providers. You may use the Information and reproduce it in hard copy for your personal reference only. The information contained herein and any supplemental documentation provided is confidential and should not be copied, reproduced or redistributed without the prior consent of Holland Advisors. Governing Law You agree that your use of this site and any dispute arising from this use is subject to English law and you submit to the jurisdiction of the Courts of England & Wales.
Privacy Notice
This is the privacy notice of Holland Advisors London Ltd our company number is 07431314. Our registered office is at The Halt, Smugglers Way, The Sands, Farnham, Surrey, GU10 1NB.
Introduction
This notice describes how we collect, store, transfer and use personal data. It tells you about your privacy rights and how the law protects you. In the context of the law and this notice, ‘personal data’ is information that clearly identifies you as an individual or which could be used to identify you if combined with other information. Acting in any way on personal data is referred to as ‘processing’. This notice applies to personal data collected through our website www.hollandadvisors.co.uk. Except as set out below, we do not share, or sell, or disclose to a third party, any information collected through our website.
Data Protection Officer
We have appointed a data protection officer (‘DPO’) who is responsible for ensuring that our privacy policy is followed. If you have any questions about how we process your personal data, including any requests to exercise your legal rights, please contact our DPO, Claire Brunt at  claire@hollandadvisors.co.uk.
Personal data we process
1. How we obtain personal data The information we process about you includes information:
  • you have directly provided to us
  • that we gather from third party databases and service providers
  • as a result of monitoring how you use our website or our services
2. Types of personal data we collect directly When you use our website, you may provide personal data by submission of data by our Sign Up or Contact Us forms. This can be categorised into the following groups:
  • personal identifiers, such as your first and last names
  • contact information, such as your email address and your telephone number for communication
  • records of communication between us including messages sent through our website, email messages and telephone conversations
  • marketing preferences that tell us what types of marketing you would like to receive
3. Types of personal data we collect from your use of our services By using our website and our services, we process:
  • technical information about the hardware and the software you use to access our website and use our services, including your Internet Protocol (IP) address, your browser type and version and your device’s operating system
  • usage information, including the frequency you use our services, the pages of our website that you visit, whether you receive messages from us and whether you reply to those messages
  • your preferences to receive marketing from us; how you wish to communicate with us; and responses and actions in relation to your use of our services.
4. Our use of aggregated information We may aggregate anonymous information such as statistical or demographic data for any purpose. Anonymous information is that which does not identify you as an individual. Aggregated information may be derived from your personal data but is not considered as such in law because it does not reveal your identity. For example, we may aggregate usage information to assess whether a feature of our website is useful. However, if we combine or connect aggregated information with your personal data so that it can identify you in any way, we treat the combined information as personal data, and it will be used in accordance with this privacy notice. 5. The bases on which we process information about you The law requires us to determine under which of six defined bases we process different categories of your personal data, and to notify you of the basis for each category. If a basis on which we process your personal data is no longer relevant then we shall immediately stop processing your data. If the basis changes then if required by law we shall notify you of the change and of any new basis under which we have determined that we can continue to process your information. 6. Information we process with your consent Through certain actions when there is no contractual relationship between us, such as when you browse our website or ask us to provide you more information about our business, you provide your consent to us to process information that may be personal data. Wherever possible, we aim to obtain your explicit consent to process this information, for example, we ask you to agree to our use of non-essential cookies when you access our website. We continue to process your information on this basis until you withdraw your consent or it can be reasonably assumed that your consent no longer exists. You may withdraw your consent at any time by instructing us  claire@hollandadvisors.co.uk. 7. Information we process for the purposes of legitimate interests We may process information on the basis there is a legitimate interest, either to you or to us, of doing so. Where we process your information on this basis, we do after having given careful consideration to:
  • whether the same objective could be achieved through other means
  • whether processing (or not processing) might cause you harm
  • whether you would expect us to process your data, and whether you would, in the round, consider it reasonable to do so
For example, we may process your data on this basis for the purposes of:
  • improving our services
  • record-keeping for the proper and necessary administration of our business
  • responding to unsolicited communication from you to which we believe you would expect a response
  • preventing fraudulent use of our services
  • exercising our legal rights, including to detect and prevent fraud and to protect our intellectual property
  • insuring against or obtaining professional advice that is required to manage business risk
  • protecting your interests where we believe we have a duty to do so
How and when we process your personal data
8. Your personal data is not shared We do not share or disclose to a third party, any information collected through our website.
Use of information we collect through automated systems
9. Cookies Cookies are small text files that are placed on your computer’s hard drive by your web browser when you visit a website that uses them. They allow information gathered on one web page to be stored until it is needed for use at a later date. They are commonly used to provide you with a personalised experience while you browse a website, for example, allowing your preferences to be remembered. They can also provide core functionality such as security, network management, and accessibility; record how you interact with the website so that the owner can understand how to improve the experience of other visitors. Some cookies may last for a defined period of time, such as one visit (known as a session), one day or until you close your browser. Others last indefinitely until you delete them. Your web browser should allow you to delete any cookie you choose. It should also allow you to prevent or limit their use. Your web browser may support a plug-in or add-on that helps you manage which cookies you wish to allow to operate. The law requires you to give explicit consent for use of any cookies that are not strictly necessary for the operation of a website. 10. Personal identifiers from your browsing activity Requests by your web browser to our servers for web pages and other content on our website are recorded. We record information such as your geographical location, your Internet service provider and your IP address. We also record information about the software you are using to browse our website, such as the type of computer or device and the screen resolution. We use this information in aggregate to assess the popularity of the webpages on our website and how we perform in providing content to you.
Other matters
11. Your rights The law requires us to tell you about your rights and our obligations to you in regard to the processing and control of your personal data. We do this now, by requesting that you read the information provided at  http://www.knowyourprivacyrights.org 12. Communicating with us When you contact us, whether by telephone, through our website or by email, we collect the data you have given to us in order to reply with the information you need. We record your request and our reply in order to increase the efficiency of our business. We may keep personally identifiable information associated with your message, such as your name and email address so as to be able to track our communications with you to provide a high quality service. 13. Complaining If you are not happy with our privacy policy, or if you have any complaint, then you should tell us. When we receive a complaint, we record the information you have given to us on the basis of consent. We use that information to resolve your complaint. 14. Retention period Except as otherwise mentioned in this privacy notice, we keep your personal data only for as long as required by us to provide you with the services you have requested. 15. Compliance with the law Our privacy policy complies with the law in the United Kingdom, specifically with the Data Protection Act 2018 (the ‘Act’) accordingly incorporating the EU General Data Protection Regulation (‘GDPR’) and the Privacy and Electronic Communications Regulations (‘PECR’). 16. Review of this privacy policy We shall update this privacy notice from time to time as necessary.

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