Alumasc Group (LSE:ALU) — Half Year Results

0:00 Good afternoon. Welcome to the ALUMASC GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Paul Hooper, CEO. Good afternoon, sir.

0:31 Thank you very much, Lily, and thank you all for attending the ALUMASC interim present results presentation for the half year to December 2025. Introductions. My name is Paul Hooper. I'm the chief executive of the group, and I'm joined today by Simon Dre, the group finance director. This is my fiftieth and last results presentation for the ALUMASC Group. So if we may, I suggest that we go on to page four, and this is really an overview of our divisions. Sustainability drives our future growth. We have three divisions, and I'll give you a quick description of each of those.

1:17 And we start with the water management division, which is involved in water and storm water management. Many of our systems are specified. We manufacture circa 70% of our products, and 70% are sold to merchants with 30% direct to contractors. Our second division shown in the middle here is the building envelope division, which consists of our roofing systems company, which gives technical advice, for instance, by taking core samples from current roofs and then advising what the solution is. We supply premium roofing systems from Durbogum, HydroTank, both global leaders, and we also have our own brand, Euroroof, plus other brands.

2:09 We're also involved in other niche areas such as blue roofs, green roofs, and biosolar roofs.

2:17 This division does not manufacture, and it imports its products from Canada and Europe from suppliers who it has had a thirty five to forty year relationship with. It supplies its systems directly to contractors, so no merchants involved here directly to contractors only. And then our third division is the house building products. It operates under the Timlop brand, which is has really developed by giving an outstanding next day service and a 100% record for on time and full delivery.

2:53 If an order is received by midday, it will be delivered often in small quantities the next day. Above a 100 pound delivery is free of charge and a 150 to site. We bought it for just over £3,000,000 around twenty years ago, and it makes more than that in profit now with a 30 with a circa 26% operating margin. It manufactures 95 of its products, and, again, around 95% of sales are through builders merchants. So if I may, I'll ask Simon to continue on our clear and well established growth strategy, please. Thank you, Paul. We have a clear and well established growth strategy, which we organized under four separate pillars.

3:44 Just briefly because they we will touch on many of these during the presentation, but we are a champion for sustainable building products. We use environmentally efficient materials to create durable, high quality, low maintenance products that help address the environmental challenges facing the built environment. We look to accelerate our organic sales growth. We sell into markets that will grow faster than the general construction market, and we have international opportunities for parts of our product range. And we therefore look to outperform general construction growth. We look to drive our margin improvement through efficiency, automation, and volume growth, And we look to use our strong balance sheet and cash generation to make value enhancing investments in the business, capital invest and revenue investments that enhance future growth, but also selective bolt on acquisitions to accelerate our ambitions.

4:50 And pass back to Paul now for the overview of our half year performance. Yeah. This is on page seven. These are the highlights of this half year where we've had a resilient performance, and we're on track for delivering on our full year expectations. It has been challenging though, the market, and we are against a strong prior half year comparator. The revenue in the period under review was £50,400,000, and that really if we take the Cheplap cock business out of there, which was into the Hong Kong airport, which accounted for around £5,500,000 of revenue, we were actually, as Simon will show shortly, 3% down on the prior year.

5:39 Now there were headwinds that we encountered, and particularly with the Building Safety Act delaying larger projects. And let me just tell you that, in construction news, it was commented on in the House of Lords Industry and Regulations Committee on the 09/02/2025 that the local authority building control CEO commented that there had been anticipated to be 20,000 starts of projects in London in the last year, but only 900 started. Now that is a 95% reduction in anticipated starts. In The Sunday Times just two days ago, it commented on a seventy five year low of concrete sales in London. 27% reduction versus the prior year, 39% versus 2023.

6:35 There have been 310,000 houses built, in eighteen months since the government came into power. And Matthew Pennycock, the housing minister, indicated, and this is according to the Sunday Times, that live discussions were in government right now, and there was a reference in that article, to, the government looking at Help to Buy scheme. This has all been stunningly unhelpful, to our industry. So we've been battling against all of this, and at the same time, affordability concerns, planning delays have affected house building. And we then had the autumn budget, which had a one month delay into November, and that didn't really help either.

7:26 But we had a bit of a pickup in the right at the end of the year, which I come on to. I touched on the CLK revenue in the prior year, and we had minimum in our h one. But we have got £2,000,000 of orders. Those are with us. We've got payments all up to date, and we expect, to be able to ship those in our h two. The underlying PBT was £4,000,000, and actions have been taken to drive efficiency and margins. We took £1,100,000 of annualized costs out, which will benefit h two, and those are all in the water management division. We have a strong balance sheet with a net debt of 7,700,000. We have conservative leverage ratio of naught point five times, and we maintain the interim dividend at 3.5.

8:20 Moving on to the next page.

8:23 It was a resilient performance, and we're on track to deliver the full year expectations. And this is evidenced amongst other things by a healthy and growing order book and a robust pipeline of opportunities. We haven't referred to those opportunities in the pipeline much in the past, but we're going to today. And if we start with the order book, which has a growing momentum, at the end of December, that was £14,500,000. And if we take out Cheplev Cock, that is 27% ahead of December 24, 50% ahead of December 23. So some good growth there. We've had several overseas projects won, and I'll touch on some of those that have already been supplied into h one later.

9:15 And we've had 2,000,002 million pound order from Changi Airport in Singapore. Now this is a really important win because there is further business there, which we believe could be worth 10 to million 10 to £15,000,000. And that will have to be won, but having worth won the first part of this, the £2,000,000, puts, I think, us into a strong position for a further win. In terms of our pipeline here, the opportunity is robust. We have a £190,000,000 of near and medium term UK export opportunities, and these are largely ALUMASC or ALUMASC brand specifications.

10:00 So around 75% are specified, and that reflects our investments in sales resource, technical sales resource, and customer relationships management. In other words, the CRM tools that we're now using more fully. We've announced my succession, and I will be succeeded as chief executive starting really at the end of March, early April, and Pamela Bingham joins us as CEO designate at the start of March, and she has a PLC background. She was a nonexec director at Simon PLC, and also Weir, CRH, and Rotoq, and I'm sure she'll do a fantastic job.

10:49 She'll bring a new level of energy energy, and I'm sure she's gonna be a great success. We've also taken the opportunity of strengthening our water management division with two MDM appointments. One, Peter Blanchard, formerly of East Jordan, a competitor going back a few years ago, to Gattick. He will take he's taken over and is running Gattick Wade. And then we have Steve Dan, who came with our ARP acquisition a couple of years ago and now takes responsibility for AWMS, our water management solutions, part of the water management side. Our full year expectations are unchanged, and we're well positioned for medium term market recovery.

11:37 And actually at the end and coming end of this period, coming into December, there was an interesting review by Ricks on the residential market survey that indicated improving near term twelve month indicators, for improvements really here in confidence. So that that was encouraging. We've identified, opportunities to outperform in our target markets, and and we are confident of achieving our FY '26 expectations. And over time, we're well positioned to deliver substantial shareholder value, as these markets recover.

12:21 So now I'll ask Simon to continue, please, with the financial review. Thank you, Paul. As Paul mentioned, first half group revenue was down by 12% or or 3% if you exclude the contribution from Czech Lapkok Airport in each period. UK revenues were down five percent on the strong headwinds that Paul mentioned that intensified in q two in the run up to the autumn budget. Export revenues in the period, in the prior period benefited from £5,500,000 of sales to CLK Airport. There was only a small contribution of around about £100,000 this half year. Excluding this, export sales grew by 30% on growing demand, especially outside of our traditionally strong territories in Asia and The Middle East.

13:14 Our contribution margin, which is revenues less variable cost of sales, was level with the prior period. So product pricing, and product material costs were good. But due to a small element of fixed cost of sale, our gross margin was a 140 basis points lower than the prior year at 36.2% due to the revenue decrease in the period. Similarly, our operating margin at 8.9% was impacted by the lower revenues. We took action in the period, reducing operating costs at our water management division by an annualized £1,100,000, which will benefit the second half of the year. And our medium term margin target remains in the 15 to 20% range.

14:02 And reflecting its confidence in the group's full year outlook, the board has maintained the interim dividend at 3.5 p per share.

14:15 The revenue and profit bridges illustrate the impact of the challenging UK market on our water management and building envelope divisions. Where the effect of the delays from the Building Safety Act implementation and the uncertainty caused by the autumn budget were felt particularly in their core markets of larger mid to high rise projects. Housebuilding products was more resilient, and it grew both revenue and profit. They were less affected by the Building Safety Act delays, but still faced strong headwinds from the low house building volumes, yet managed to gain further share in their markets. Margins were affected by the lower volumes, but the cost reductions together with our operational gearing, so the, incremental impact that increased revenues, less variable cost of sale has on covering the, fixed cost of the business will drive improvement in the second half.

15:17 As well as the lower volumes, cash flows in the period were also reduced by a 2,000,000 cash outflow into working capital. Our average working capital as a percentage of revenue over the period was 18% compared to 15% in the prior half year. We carried a a significant level of debtors into the beginning of this half year from the Czech backed cock project, which have now cleared. But in the second quarter, there was a temporary stock build to service the growing order intake for the second half. This we expect to unwind as the second half progresses. Payments into our pension scheme reduced from £1,200,000 per year to £700,000 per per year midway through the half from September 2025, following the funding plan agreed with the trustees at the April 2025 triennial review.

16:14 Capital expenditure totaled £1,200,000 versus £2,000,000 in the prior year, and the prior year included, spend to complete the access covers automation project at our Halstead plant. Current period spend included an upgraded injection molding machine at Timlock to improve the flexibility of their manufacturing process and a new CNC lathe at Halstead to in house some component manufacture to reduce cost and inventory holdings. Net debt at the end of the period closed at £7,700,000, which represents a conservative leverage ratio of naught point five times, giving us substantial headroom against our debt coverage leverage of less than 2.5 times.

17:06 And those bank facilities total £25,000,000 plus a £20,000,000 accordion facility, which gives us good headroom. These expire in August 2027, so we will begin the process of negotiating replacement facility in the second half of this financial year. We have a good relationship with our partner banks and expect good appetite for the new facility. And our IS 19 pension surplus improved again and is now £7,100,000 on outperformance from the scheme's growth asset investments. The scheme is now largely hedged against bond yield movements, and we're on target to reach a self sufficient position where the scheme will have a low expectation of requiring further payments from the sponsor employer from ALUMASC on or before 2030.

18:02 I will pass back to Paul now for the divisional review. Thanks, Simon. And I will start with water management, which is our biggest division. The revenue declined here by 6,900,000, of which the CLK project represented 5,500,000. So if we take that out, the decline was in the order of about 5%. We haven't been helped by the Building Safety Act that I've gone on a bit about today, and then the budget didn't really help, especially when it was delayed by a month. This UK market, as a result, was subdued. On the more positive side, our exports excluding, CLK were encouraging. We had a 24% increase in those.

18:50 And to give you some examples, we supplied into a Slovakian NATO airfield, with SocTrain, the Sliac Airfield, Quellba Port in Spain for SocTrain, Bangalore Airport in India, Suape Port in Brazil. Those who follow us, may know that we won that, Brazilian, project, around a year ago, and it was worth around £500,000. So these are further, products going in. Those are actually separators. And then we also had Western Sydney Airport in Australia for slot trains. So encompassing quite a few parts of the world there, and there's more potential which I I would come on to.

19:39 The underlying profit was £1,500,000, and we took the opportunity of taking £1,100,000 of annualized cost savings out, or we made cost savings and took those costs out, and those will be implemented from h two. The action's already been taken in the final quarter.

20:00 There has been a strong momentum in our order book and the opportunity pipeline, which we'll again come on to. And there's an example here of the rather beautifully manufactured precision engineered f 900 access cover that we've moved manufacturing from our Dover plant into Halstead, which came with the acquisition of Wade a few years ago. And it's quite interesting because, certainly, Heathrow have very much liked the quality of this product. There is no lead that's being used as an infill here. And, actually, now we're manufacturing. We're putting components on shelves, and then pulling them off, and it's giving us an advantage in being able to supply, these products very quickly, and assemble them from the components that we've already manufactured.

20:57 So that's been a really good move. We've also launched a new facade rainscreen. I've got a separate section on new products, so I'll cover that one there. And then I've touched on the two appointments in the senior management side, two MDs that we brought into, to this division. The order book, at the end of December was actually 53% ahead of the prior year, so that's quite significant and 63% ahead of, 2023. So I move now into the second division, which is building envelope, and roofing. And actually, the performance with the revenue down 6%, profit underlying profit down 25% belies the actual performance here where they did very well in developing some blue chip customers, including Waitrose and work with BT.

21:56 These have got very large property portfolios in The UK that require refurbishment from time to time. We supplied Hinkley Power Station, Manchester University with the start of a project, and there's further to come there. Various health care areas, as I say, Hinkley Power Station. So some quite big projects in here across both the private and public sector. A high level of activity. But once again, the Building Safety Act interfered, I'm afraid. Don't get me wrong. We were very much for the Building Safety Act, but it's just the way it's been implemented that has given problems to really contractors and ourselves.

22:46 But coming into late quarter two, we found revenue and order intake improved. We've been continuing to grow our market share because of the outstanding technical support that we give.

22:59 We've been also benefiting from increasing regulations and sustainability requirements. And in addition to the blue chip private landlords and the rec and the public sector demand, we've also brought in a new product. This will be featured, and I'll show you this in the new product area. But it's ALUP PLY, under our brand, actually. They're very good at getting a top product and a top manufacturer to supply this product as a known label for ourselves. And our order book, at the end of December was 12% ahead of the prior year, 38% ahead of 2023.

23:45 So moving in the right direction. Now I move into the third division, which is house building products, with the brand in there. This was the Victor Ludorum. This was, in my view, an an astonishing performance where it grew, its sales. It grew its profit to 2,200,000.

24:10 And this is against a very difficult house building background where volumes have not really recovered very much, but it has a fantastic outstanding customer service and competitor supply issues also benefited it. It's OTIF was a 100% again. It delivers next day,

24:35 and it's launched new products. As a matter of fact, the one launched a couple of years ago, Inventive, we now reckon has got about a 12% market share. This is a tile vent going through specialized roofing products, merchants, but ending up on a house. And this has helped to plug the shortfalls from the reduction in the marketplace. And they've also taken market share, and they've had further trading agreements signed. We've had to, invest in a further thousand ton injection molding machine, to improve our capability, and we've had to extend the building there slightly. We have a new product, which is the new Loftite Loftdoor, and we have around 30 to 35% of The UK Loftdoor market anyway.

25:28 But I'll come on to more detail of that and how we think it's going to be a winner. We're well positioned to support any demand recovery. We have a focus on sustainability, which supports the drive for lower carbon homes, and we will continue to launch new products into the new financial one into 2026 as well.

25:52 Significant capacity for growth. We estimate 40 to 50%. And actually, with the injection molding tools, you can, add cavities. So in other words, if you've got a 10 cavity wire, you might make that into a 15 or 20. It's not infinite. You can't go to a 100 easily. But there are things like this that can also help our capacity so that out of a bang, on the equipment, we can get more products coming out.

26:25 So significant capacity there for growth. And just to remind ourselves, Timlop doesn't have an order book because it's straight in, straight out really the next day, and that's where where it wins its business. Okay. So let's have a little look here on page, 19 at our order book and the opportunity pipeline. We haven't really talked about opportunity pipelines much in the past, but we think this is a good moment to come into this. And, actually, if we look at the order book in the top right hand area, the numbers in white or invisible, you might say background there, are CLK, and you can see those coming down from 7,000,000 to 1,700,000 in 2025.

27:14 Meanwhile, our other, general orders, and bear in mind, this is water management and roofing only, moved from 8.9 to 12,800,000 there. So good good movement, good strengthening there. And then our opportunity pipeline, which we estimate to be a 188,000,000 at the end of December twenty twenty five, with 75% of it specification backed, you can see with 59.8 coming into '26, 73.3 into '27, and 54.4 for FY '28 and beyond. And then on the left hand side, higher up, we're showing the comparators excluding the CLK of the order book

28:05 versus the prior years. So looking quite strong coming into h two. We've got the CLK final phase of £2,000,000 orders already in. We're ready to go.

28:18 And then we've got the start of the Changi Airport project that was in total at this stage £2,000,000. So let's have a look at The UK opportunity pipeline at a £145,000,000 here. And you can see it's quite well spread across private and public sector areas. We've got defense driving some of that public, you know, the 3% GDP that's going to be spent, health, education, prisons, energy center generation and data centers, transport infrastructure. So it's a quite reasonable spread here of opportunity. And, yeah, we're gonna win a good good proportion of these.

29:04 And then moving to the next slide, this takes us into the export area. And our traditional areas, of exports have been in Asia, Chabamb, Koch, Singapore, etcetera, in The Middle East.

29:16 And there are two big airports that are coming through in The Middle East over the next few years. King Salman Airport in Saudi and The UAE have got an equivalent, and these could have six to eight runways, very big airports. And then if we move fully to the left hand side, we're describing it as Americas, but it's really Latin America. And we've moved in there in the last couple of years with this win, particularly in Brazil from a chap operating one of our salespeople operating out of Bogota in Colombia. It's also covering Colombia, Mexico, Costa Rica, Peru, Chile, and unearthing of of some good opportunities there and further ones in Brazil, Sao Paulo area, etcetera.

30:07 So we're quite excited about the opportunity there moving across into the next area, which is Africa, in West Africa, particularly Nigeria, there are good opportunities there. It's a petrodollar

30:19 state country that's quite wealthy. In Senegal, in French West Africa, there are ports that are available. Nigeria would have airports and ports that give opportunities. So, you know, the evidence is that you put the people in, you put the salespeople in, and with our good products, our good technical support on particularly on Gattic covers and salt drain and particularly into airports and ports, then we are starting to win some additional business. And that's pretty exciting. I know. Really, it's very exciting, actually. So we have and we will be investing further into our sales teams for exports in the second half year.

31:05 Now let's go on to NPD, new product development. And we've got in facades on the left hand side, water management. These have only just been launched. The BBA approved CWCT, that stands for Center for Window Cladding Technology, weather tested, ready to go here, marketed under a strong brand that we have called Skyline that's already covering copings and facies. We won't be installing, but we will be supplying, and we will be in combination with market leading bracketry partner there. So we're quite excited about that one, and we are ready to go. And then in the middle, building envelope, which is roofing.

31:51 We don't manufacture, but we are bringing this in from a very reputable supplier under our own brand, which is great under any ply. We have cost and performance advantages, the highest level of European fire safety classification, and warranted up to twenty five years, and this is suitable for new build and refurbishment projects. And then finally, on the right hand side, we have this house building products, new loft door that exceeds the requirements for l one and l two,

32:28 etcetera, has two seals for maximum air tightness. Now what is quite interesting here is that it has a patent pending situation on the fitting slots that allow rapid single person installation. That is important for house builders if they can have these products installed by just one person. So we're quite excited about that. There is some good interest as we look to, again, get this product going. We've only just launched it. And if I may, I'll ask Simon to cover the next slide on championing sustainable building products, please. Thank you, Paul. It's important part of our growth story are the target markets that we look to sell into. Over 80% of our product portfolio addresses markets with long term regulatory and environmental growth drivers,

33:22 And these cover building decarbonization improvements to a building's energy efficiency, primarily through improved insulation, managed ventilation, but also through facilitating solar power generation and even c o two absorbing membranes. We also improve buildings' climate resilience with products that manage urban rain and storm water, and we help provide urban green spaces which reduce habitat loss and improve biodiversity in the built environment. And we continue to see strengthening demand tailwinds in these growth drivers despite the recent market disruption. Back to you for the Thank you, Simon. And we're on our last slide now, which is the outlook.

34:09 We had a resilient performance in h one, and we're on track to deliver on the full year expectations. We have a strong order book and pipeline with growing momentum. We've restructured the cost base in water management. We've strengthened the management team there. We expect 2,000,000 to come in for the rest of the CLK project, which will be shipped in h two, and we have the first call offs coming in from Changi Airport. There are some early signs of improving business and consumer confidence evidenced by that RICS report in December, and any interest rate reductions, which have already happened to some extent and further ones will assist, and also getting, the BSR and reforms in place will help unlock latent demand later in the year.

35:00 Now in terms of medium term potential, we believe that's significant because of our significant end markets, diversity of our end markets rather, and also the export potential. We have a strategic alignment with shift with the shift to sustainable construction. We like to innovate with products, and I showed examples of three that are coming in over just a couple of months period. We have an experienced management team. We have best in class service. We have operational excellence, and the board remains confident in the group achieving its full year forecast. We're also well positioned to deliver substantial shareholder value as markets recover. Excuse me.

35:48 So that's us. Thank you. I think we have a couple of questions, do we? That's great. Thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your rest of the dashboard. As you can see, we have received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so? And I'll pick up from you at the end. Thank you very much. So first question, Paul, is can you talk a bit more about the international opportunity, and is this just focused on Gattic or other brands too?

36:34 Okay. Good question. Yeah. I I covered that quite a bit, I think, on the the side on '21 on the export opportunity pipeline and really our plans in that area, but it is to keep hiring people in in different parts of the world because I'm so excited from what we did in Colombia and bringing that salesperson in who's been so successful, and we will be doing that in other areas of the world. And it isn't just Gattic that we're promoting out there. There is, somewhat of an opportunity as we use our Uroooth brand on roofing. For instance, as data centers pop up in colder parts of the world like Finland, we're not restricted from exporting our own brands, whereas we would be with some of the other, brands that we are using and importing such as Durban and Hydrotech where there's a limit, mainly into UK and Ireland, so Southern Ireland.

37:41 So therefore, we won't just be Gattic. We will look at opportunities for Uroooth, which is an interesting brand name because it came with a a company we bought around forty years ago, and the contractors certainly in The UK are aware of that name. And we've now used it to bring and use our own products, our own branding, really. So we have full control, of those products and those brands. So it's an exciting area, And as you saw, we've grown by 24% in the water management division with our exports in in h one, and we've just won Changi, which is very exciting, Changi Airport in Singapore, and that will lead to further business that in effect will replace the chap lab cock we anticipate project.

38:38 Thank you. Thank you, Paul. The next one is what is the five year via value creation story from here? How will you maximize shareholder value? If you like, I'll cover that. Paul? Cover that. Well, we do have ambitious plans. Over that sort of time frame, we'd expect some market recovery. We believe volumes in our key markets are still 15 to 20% below pre pandemic levels. So over that time frame, we would expect some cyclical recovery. We also expect ALUMASC to outperform that market recovery. We have lot markets with long term and progressive environmental and regulatory growth drivers. We will leverage our spare capacity and the investments we've made, and we'll continue to make in capability.

39:26 And we've got a lot of export opportunities that Paul's just spoken to with a sort of large project specification led approach that we have. There's a circuit two to five year lead time. So you reap now what you sowed two to five years ago. So there's substantial opportunity there following the investments that we have made and will continue to make in technical sales capability. We expect margins to grow into that 15 to 20% range over that time frame, and we will expect to have done some bolt on m and a. We have a good track record of creating value and accelerating strategy through acquisition. So hence, statement, we're well positioned to deliver substantial shareholder value over the medium term.

40:15 Pretty good. What is management and board stock ownership like? Will you be buying more given the current share price? I can well, comment on that briefly. About 5% of the company's stock is in management hands. It's something we encourage through stock ownership schemes, share retention guidelines. It's good practice to align the interests of management with shareholders. Second part of the question, would would would I buy? I'm not in the business of giving people investment advice. I but I will always be a net purchaser regardless of price. I think it's as a director of a publicly listed company, I think you want to be holding a substantial part of your own personal wealth in the company stock.

41:07 Yeah. And I'd like to feel that I've tried to set an example there. My shareholding isn't just from LTIPs, etcetera. I have bought quite a number of those and had to rebuild a bit after a divorce twelve years ago, so I've used bonuses, etcetera, to try to to buy shares along the way. On the opportunity pipeline, what would you class as medium term? So I think, you know, opportunity pipeline, I think probably most of that is is things that we're aware of and and are coming. We've either tendered on them or in the process of tendering for them, or we are aware that they are about to come to tender.

41:53 So I think most of that is is short coming into medium term opportunity. There will be some out there that get into the medium term, but equally, there's ones on the that will drop into the opportunity pipeline that I think aren't yet out there, but will be in the next year or two. Hope that answers. Yeah. What's the manufacturing capacity level of your product production? I think you covered Timblok, Paul. I did, and and we probably got around a third to 50% that we could call on. We're not running twenty four hour shifts. We're not running across weekends, and we do flex quite a bit. For instance, at Gatican Wave, when we get, you know, good order book of Sodrain in a month, we'll bring temps in along the way.

42:49 So I I would say we've probably got a a third, you know, 33 to 50% that we could call on fairly readily. Mhmm. Is ALUMASC considering doing any bolt on M and A? And what sort of areas are you looking at? Do want to comment on that? Sure. It's yes. It's definitely part of our strategy. This we are I guess the the the key points are we would look to be in areas we currently know well or adjacent ones. We don't wanna buy something we don't really understand. We want something that we believe that we can grow and or bring synergies into the group. Bolt on for us is probably in the 10 to £15,000,000 consideration range.

43:34 And I think we're sector agnostic. We're division agnostic. I think we would we would consider the right acquisition if it came along. It wouldn't matter whether it's water management or building envelope or house building products. It's it's the right acquisition. It's the right acquisition. Agree with all that. Were timelock prices increased this year, and how did this contribute to the revenue increase? And what was the volume change year on year? I don't believe timelock prices moved significantly. If they did, maybe a a percent or two. So it wasn't a big part of the year on year revenue increase, and you can see that from the volume, the drop through into profit and the further accretion in the in the operating margin.

44:23 So substantially, all of that was was volume change, I think. Yeah. Do you see any opportunities within water management projects in the water sewage industry sector with the extra funding that's going into that sector to 2030. Yeah. We have looked at that area in the past, mainly with Gattach and Wade on the sort of dirty water side. And at the time, it was fairly well catered for. We did try to make an acquisition that didn't come through in the end, but it's an area that we will be considering. But I can't really comment further than that, and I think my successor will have some interest in looking at that too. How do you sell to foreign accounts?

45:16 Okay. Good question. Mainly through distributors. We're very keen on having the local presence. We understand the culture and how how the markets work, and that would be an example. For instance, in in Singapore where we're selling through a distributor there. So generally, would be through a distributor, not an agent. There are complications with agents, so we tend to avoid those. Okay. Your margin is so much higher than like minded building product makers. It can't just be the service. What is the secret sauce? Well, we're very focused on it, and, you know, people are very accountable for their margins.

46:02 And, we've been targeting that 15 to 20% bottom line margin across the group over the last five years. We were at about eight or 9% if we go back five, six years ago, and we've set our stall out to get get up to that level. And it's not been easy to do that, but we've done it through some operational improvements, by moving, consolidating some of our facilities, by ensuring through each board meeting every month that we analyze what have been the cost increases that have been incurred, what have we been able to pass on in prices, and actually being the number one or number two player, as we are in many cases, has allowed us to successfully move our prices on when we've needed to, and at the same time, a good customer support is very key to differentiate ourselves and to really have our brand strengthened.

47:05 It's a very key thing to have a brand that people want to buy, and you mustn't be complacent. You've gotta continue to really give a great service to customers, and that will include technical support along the line. And so it's been a combination of those events and particularly operational efficiencies. For instance, Timlock, you know, how do you get 26% is the bottom line? Well, you operate very efficiently, and that's a very automated plant and a very good management team running it. And make sure you don't get caught with costs that you can't pass on. It's very very important that you give you pass your costs on, and that you give an outstanding service. So I think that's probably all I can say on it.

47:55 I think down to the last couple now. Can you clarify your dividend policy? I'll have a go at that. We have a progressive policy, which means that we would expect the dividends to rise in line with earnings or rise as earnings lie increase, I should say. We would look to distribute or maintain dividend cover of between 2.5 to three times, and that's based on earnings, but obviously cash flow is important, but over time, we'd we'd normally expect cash flow and earnings to to to move side by side alongside each other. Okay. That one. And then just a couple which I will summarize together.

48:44 Thank you, Paul. Wish you all the very best as a long term shareholder. I appreciate the leadership and service. Well, then that's so kind of you. Thank you very much. Thank you for your support as a shareholder too. So we couldn't have done it without our shareholder support too. Which probably leads quite nicely onto the wrap up. Yes. Thank you. Thank you, Simon. We've had a tough h one, but we are on track to deliver on the full year expectations. We are also well positioned to deliver substantial shareholder value as market recovers. So so thank you very much everybody for attending today and for your support and for your very good questions too. Thanks a lot. Paul, Simon, thanks for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations?

49:39 This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of ALUMASC GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.