Alumasc Group (LSE:ALU) — Half Year Results

0:01 Good afternoon, and welcome to the ALUMASC GROUP PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, they can be submitted at any time using 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 as well as what is appropriate to do so. Before we begin, I would like to submit the following poll.

0:31 And I would now like to hand you over to CEO, Paul Hooper. Good afternoon to you. Well, good afternoon, everybody, and thanks, Alex, for the introduction. A very big welcome to the interim results of the ALUMASC GROUP, for the year 2425. My name is Paul Hooper. I'm the chief executive, and I'm joined today by Simon Drey, the group FD. By way of introduction, we'd like to cover a couple slides at the start of the, presentation here, which Simon's just going to. And sustainability drives our future growth. We have three divisions with a diverse range of products and markets.

1:18 And I'll touch on the first, which is the water management, and this consists of, metal building drainage, including surface water drainage, metal gutters, downpipes, and specialist access covers under the brand name of Gattic. Our second division there, is in building envelope, and this consists of our roofing business and predominantly flat roofs, including green roofs. And then our third division, house building products, which range really from loft doors, weeps to tile vents, and in effect, really from the ground level to the top of the roof of a house. So if we move on to the next slide, these are our growth strategy pillars.

2:10 This is a summary for reference, and you'll see more detail as we touch on each division. But we're championing sustainable building products. We will accelerate organic growth, drive operating margin improvements to achieve the targeted 15 to 20% operating margin, and we're going to invest our capital and revenue to enhance future growth. So if we can turn now to page seven, this is the highlight these are the highlights of our first half of the f y twenty five year, and we've had a record half one performance in what are challenging, end market conditions, particularly in The UK, where Experian indicates for 2024, there's been a reduction of 5% in activity, construction activity.

3:09 We grew our revenue by 20%, and we grew our underlying PBT by 19%. We've had organic growth in all three divisions. In fact, all three divisions have moved ahead of the prior year as we did and managed to achieve in the full prior year to June 2024. We've had an excellent performance from ARP, and you may recall this is a business that we bought just over a year ago, and it's exceeded expectations. We've had strong cash flows. In fact, 127% operating cash conversion, and the balance sheet is in a very strong state with a point three times leverage there, which we'll come on to later on what that means for us.

3:58 We took the opportunity to tick up the dividend to 3.5 p. Moving on, the delivery of strategic priorities are driving market outperformance and the successful execution of these and commercial priorities have really made a difference. Our organic revenue growth has been 8%.

4:24 Overseas sales growth has been 43%, and that's been assisted by the acceleration of the ChepLab Kok Hong Kong airport order. We've had resilient domestic sales. So it hasn't just been exports. It's been The UK as well, and that was ahead by 3%, and that is outperforming the challenging UK market, which I've just touched on was down by 5%. We managed to keep our underlying operating margin stable at 14.1%. And just to remind ourselves that 80% of our portfolio is aligned with strong environmental growth drivers, which we see as a definite advantage. We closed our facility in Dover in December and moved the manufacturing of Gattic access covers to Halstead, which is the facility that came with Wade when we bought that a few years ago.

5:23 And this has been very successful. And we've started manufacturing, and we estimate that we will save circa £800,000 a year from this. And you'll see a little bit later on that we will have improved products from this move as well, which will give us a competitive advantage. We have significant headroom to support future growth, and you've just seen that referred to with the balance sheet gearing. We have a clear line of sight on delivering our growth ambitions. It's pretty much more of the same, and there'll be a continued outperform performance of The UK construction market. So pretty much more of the same, doing what we've been doing.

6:10 And in our h two, we'll start to get the benefits of the £800,000 saving that I've just touched on, and the acquisition synergies from ARP will start to come through more strongly where we estimate overall that there are benefits, savings, purchase savings of circa £500,000 there. So now I I will hand over to Simon to cover the financial review. Thank you, Paul. And I will start with our income statement. As Paul mentioned, revenues were 20% ahead of the prior half year. 12% of that growth was due to an incremental six months contribution from ARP, which was acquired at the end of December twenty twenty three.

7:00 Organic growth, so like for like growth, contributed the remaining 8%. Margins, gross and operating, were stable. Raw material prices weren't significant in the period, and inflation in other costs such as labor were mitigated by active management of costs and prices. Our underlying profit before tax was 7,500,000, 19% ahead of the prior half year, 11% of which was of which was organic growth, and 8% was from ARP. The tax rate on our underlying profits was slightly below the prior period due to the mix between UK and overseas profits. So our underlying earnings per share was 22% ahead.

7:48 And the board had declared an interim dividend of 3.5, about one and a half percent increase on last year's interim. And in the period, we reported £700,000 in non underlying restructuring costs related to the closure of our Dover site. As we indicated last year, we expect these costs to total £800,000 by the end of the year, with a further £100,000 due in the second half of the year. Although any profit from the disposal of the property will offset this in due course.

8:25 Our revenue and profit bridges analyze out the split between inorganic and organic growth. Excluding the contribution from ARP, very pleasingly, all three divisions contributed to organic growth as you can see in the gray boxes. Boxes. ARP itself contributed £5,700,000 of sales, and after interest on the acquisition consideration, £500,000 of underlying profit. And our operating margin was stable at 14.1%, consistent with the prior half and prior full year. We'll cover on a later slide our operating margin target and the opportunities to achieve that through strategic actions and through volume growth.

9:14 And now looking at our cash flow. We had strong cash generation in the period with operating cash conversion. Essentially, our ability to convert pretax post pension operating profit into cash was a 127%. We had significant destocking during the prior year, but pleasingly, we saw a further £1,100,000 inflow from working capital in spite of the volume increases and some higher stock holdings to offset extended lead times caused by the Red Sea crisis. Our average trade working capital reduced from 16.7 of sales to 14.8% of sales. And these strong cash flows allow us allowed us to continue to invest in our future growth.

10:03 We had £2,000,000 of capital expenditure in the period, £400,000 of that related to the completion of the project to relocate and automate the manufacture of our access cover, business at Halstead following the closure of the Dover site, and a further £700,000 was spent at Timlock on further automation and to support its new product development efforts. And ARP's strong performance meant that the final earn out, £750,000, was paid in full in January just after the period end. Net bank debt closed at £4,600,000, a 37% reduction since June 2024.

10:52 And a couple of key points to highlight on the balance sheet. Our debt facilities are £25,000,000, extendable to 45,000,000 through what's called an accordion fist agreement, which allows us to upscale the bank the total bank facilities without renegotiating the agreements. And they're committed until August 2027. Our net bank debt of £4,600,000 represented gearing. That's net debt divided by our twelve month trailing EBITDA, essentially a measure of how big our debt burden is relative to our earnings, of a modest naught point three times compared to naught point five times at the last two reporting periods. We retained substantial headroom against both our covenant level, which is less than 2.5 times gearing, and our 1.5 times internal debt ceiling.

11:46 And our defined benefit pension scheme funding position improved again on strong growth asset performance and higher bond yields, lowered the present value of the liabilities. At December, we reported a £3,300,000 accounting surplus, which compares to an £800,000 surplus at June 2024 and a £4,800,000 deficit at December 2023. While the accounting valuation doesn't reflect the basis on we on which we agree funding with the trustees, the scheme is now approaching a self sufficient position where the assets can be held in low risk investments, which effectively hedge the majority of the liability risks. While the company still retains an obligation for the scheme and it remains on the company balance sheet, the company is required to meet the costs of running the scheme.

12:38 There's a low risk of the company needing to pay further deficit repair contributions. Our next triennial is in March this year, where we'll be seeking to agree with the trustees an affordable level of contributions, which reflects the improved valuation while also keeping some further derisking options on the table.

13:01 My final slide in this section is reflects on our performance against our financial key performance indicators. Our first target is revenue outperformance. We've achieved a compound organic revenue growth of almost 6% in the five years to June 2024 against a flat overall UK construction sector. In the current period, we grew revenues by 8% organic in a sector that declined by between 35%. Our operating margins have grown over the five years to 2024 from 9.8% to 14.1%. This period margins were in line. And although achievement achievements of our target range of 15 to 20% will depend somewhat on volume growth, There are some strategic actions, which Paul will cover later, which will begin to feed into the second half.

14:00 And strong cash generation is an important enabler of our strategic growth. Our cash conversion this period was a 127%, well above our 93% average over the last five years and our target of at least 100%. And finally, we continue with our carbon reduction activities with scope three emission calculations, which cover our entire valuation value valuation chain, sorry, including sourcing and logistics performed for the majority of our businesses. Target setting and accreditation activities are underway, and we expect to publish the results of these later in 2025. And I'll now hand back to Paul for the operating review.

14:45 Thank you very much, Simon. So we have three divisions. And once again, during this half year, all three divisions have an improved performance versus the prior year. And I'll start with water management, which is our biggest division. And it had a record performance, and you can see that the revenue and underlying operating profit grew significantly, circa mid 30% growth there. We had six months benefit from the contribution from ARP that was acquired just over a year ago, and we had organic growth in revenue of 9% and operating profit of 11%. We had a terrific export performance where it grew by 42%, and we had faster than expected call offs from the significant Chep Lap Kok Hong Kong Airport project.

15:39 We have a growing pipeline of opportunities from expanded overseas sales team. And what does this mean? Well, excitingly, on Friday, we received our first order for Brazil for a port there, Suape Port. And although not material, it was still very significant to us with several £100,000 value, but this is our first, project in Brazil. And we put somebody in there a year ago into Latin America, into Colombia actually, and he's doing a fantastic job. It just shows what we can do with our products in other parts of the world. So we're we're very excited, or I'm particularly excited about this, because, you know, the the areas like Peru where they've got military and civil airports, etcetera, Mexico, Chile, etcetera. And we really haven't, gone there in the past. So I'm I'm very excited about this.

16:41 And I feel although it's not huge, the first project, it's still a breakthrough. Meanwhile, we've had resilient UK revenues, and we've invested in leadership positions. There's a new MD for this division, which in effect replaces me, which I've been doing for five years pretty much part time. It'll allow me to focus on other chief exec responsibilities like acquisitions.

17:10 We brought an experienced operator in, and we've also brought an experienced export sales director. This is part of our succession planning because the incumbent will retire at the end of this financial year having done a really good job, been with us for forty odd years. And then from h two, with the automated access cover manufacturing move to Halstead, 800 k annualized saving, ARP synergies, 500 k over time, we will start to have the improvement further improvement on the margin. And, hey, this is a picture of one of the first products coming off the production line, if you like, at Halstead. And can you spot any lead filler in there?

17:59 Well, please let me know if you can because there isn't any there. And, actually, this is a beautifully machined product. It is better than the competitors now without doubt. They used to be bespoke and individually crafted at Dover, a process that's probably being carried out for eighty odd years. So we're saving 800 k. We got a better product, and the first shipment of this has gone into Heathrow, and the contractor is delighted with the end product. So this is innovation, and this is us investing, wanting better products, wanting to save money too. So that's water management. And then our second division, is building envelope, which consists of our roofing company.

18:46 And this also grew. It grew its revenue by 8%, its operating profit by 6%. It took market share. It's by hiring really good salespeople that it's achieved this and having new products available. And it's had a metal roofing standing seam, cold liquid systems, etcetera, shown at the bottom of the page. And those have all helped. And then the margin, is from the investment in our sales capability and regional coverage, strengthening that. But we've also had to invest in other linked to the Building Safety Act compliance on products and on training, and that's cost us a few 100,000. But it's probably gonna be a barrier to entry over time.

19:34 We're very happy to be spending that money because it puts us in a good position. We need well trained people as well. So I have talked about some of the new products there, but an interesting aspect where this business has been successful has been by nurturing and bringing in some large clients that might be high street shops. They might be other companies that they've got a lot of buildings around The UK that need refurbishing over time. So we get a a site of the future, and this these will run for several years, and that's good to have in your portfolio. So we're pretty excited about that as well.

20:15 And then finally, I shouldn't call it the third division because this business this division is making a 25% return. It's really well run. It also had a record h one performance, and that's against a house building market that's declined by 7%, but it's moved ahead with its revenue ahead by 6%, its profit ahead by 8%. And it's done that from outstanding customer service, 100% OTIF, and also bringing new products in. You may recall the tile vents that we've had launched around eighteen months to two years ago. We reckon we've taken about a 10% share.

21:01 And all of these things have helped to offset the decline in the market. We've invested further in some equipment in h one and this increases the improves the efficiencies and the cost management, and it's increased that operating margin by half of 1% to 25%. We're well positioned to support any demand recovery. In other words, the market lifting up because we're we're pretty cost efficient. We reckon we're probably the lowest cost manufacturer. It's highly automated, robotics all over this plant. And we're focusing on sustainability, which supports the drive for low carbon homes. We have substantial manufacturing capacity.

21:48 We estimate that to be in in the order of 50% plus. So this business is very well run. It continues to grow. It's just had a record h one as has the water management, but equally, our roofing business has also grown in h one. So how are we gonna keep this going? You know, we wanna accelerate our growth. So we have various strategic priorities. And the first one I'll touch on is accelerating our organic sales growth. The photo here looks as if this is our latest robot. It's not actually. It's a play area, and it's demonstrating our in the photo, the way linear channel drain system. But we've grown, as you've seen, our revenue both in The UK and overall against a very challenging market.

22:40 We are fortunate in having long term growth drivers assisting us in terms of 80% of the product portfolio is subject to regulations and legislation, and 80% of revenues derived from environmental solutions.

22:57 So when the markets recover, we will be in a good position to take and increase our volumes. And meanwhile, we'll continue to take market share gains. So moving on, this is exciting. This is our overseas area, which we grew by 43%. We shipped into Australia, Sodrain, we shipped into Saudi, into NEOM. We've got a guy permanently positioned now in Dubai. We're looking to move into The Philippines and Thailand and more representation in India over time.

23:36 Singapore, there's gonna be increased work there, which we're excited about. And we're also, as I've touched on, very excited about Latin America, and what can be achieved there. We're only, I think, scratching the surface. Our products are really good. They're as good as the competitors, if not better, along with our technical support, etcetera, and our marketing, and we're going to grow this. So it's an exciting time for us, actually.

24:04 And I'm so over the moon as you probably gathered by that Suape Port. We're in one of the biggest ports in Brazil. It's a start. So how are we gonna drive our margin improvement? We've said we're gonna hit 15 to 20% as an operating margin. We're at 14.1. We've touched on the 800 k saving. We've touched on also the ARP synergies of circa 500,000 coming through over time. But we'll wait and we'll be assisted by The UK market recovery. The overseas growth will assist us. That's more in our own hands, and that's what we'll be pushing hard on so that we can make that happen too.

24:49 But we can grow this operating margin. We have grown at 435 basis points from 2019, moving, as Simon touched on, from 9.8% to 14.1%. Of course, we can move it further to 15%, and that's what 15% plus, and that's what we'll be doing. So if I may, Simon will touch on the next slide, please. Thank you, Paul. Well, we believe, a very important factor behind the group's performance over the last three years, last five years and its future growth potential as well is our successful alignment with markets that support the shift towards sustainable construction.

25:35 Over 80% of our of the group's revenues are derived from one of our three environmental pillars there,

25:43 either reducing a building's carbon footprint, either by reducing embedded carbon at the point of manufacture, our products that typically are highly high content of recycled material,

25:57 and they are low life cycle carbon products, but also by reducing operating carbon. So the bill the energy a building uses while it's in use. And they do that by controlling ventilation, improving insulation, and some of our roofing products also absorb atmospheric c o two to reduce the building's energy footprint. We also improve buildings' climate resilience by managing rainwater and attenuating stormwater, and we also provide biodiverse green spaces within the urban environment. And our market demand is supported by building and planning regulations, addressing decarbonization and building quality and safety. I'll pass back to Paul now. Thank

26:45 you very much. Yeah. Thank you very much, Simon. So what are we going to do about value enhancing investment to grow organic to get organic growth? But we are investing for the long term, and that's including the sales, people and building envelope. We've continued to do that. We've continued to invest ahead of the game, and it's paid off. And we'll continue to do that. We're taking market share. That's the real litmus test with these things. We've invested in senior management, the divisional MD coming into water management. That will bring new energy along. And the export divisional or the export sales resource as well in water management is a positive, very experienced people coming into both of these positions.

27:36 I've touched on the access covers automation. All of that will help in terms of cost savings and better products, and we will continue to develop new products, particularly but not exclusively, in the house building products. And that tile vent is such a fabulous example of bringing a new product in to offset a decline in the marketplace, but we want it to be supported as as the market recovers,

28:07 and then we'll be able to move even further forward. We have strong cash flows, and we have a strong balance sheet that will support further investment. So, Simon, would you like to cover the next slide, please? This is a really interesting one on m and a. Thank you, Paul. Yes. M and a, acquisitions are have been an important accelerator of our growth strategy, and, we, hope that they will be going forward as well. The left hand side of this table, shows the characteristics we look for in an acquisition. Principally, we look for bolt on opportunities, typically up to around 20,000,000 enterprise value, and businesses which operate in markets that we have a good understanding of, so, our current markets or close adjacent markets.

28:57 We also look for businesses that are consistent with our group targets and strategy, particularly regarding sustainability, and they need to be businesses that we believe we can grow and ideally bring synergies into the group.

29:11 And to illustrate that, there are some case studies set out on the right hand side, of some of our recent acquisitions. As you can see from the initial return on investment ROI, we look to pay a fair price for good businesses with moderate initial returns on investment based on their performance at the point of acquisition. However, critical is our ability to grow these businesses through implementation of our strategy, and in in many cases, the synergy they bring with the rest of the group. You can see from the ROI actual target. So there, we we look for and have achieved substantial growth in business acquired businesses, current or near term expected returns.

29:56 And in that way, we create value for our shareholders. We have a pretty good pipeline of opportunities. We have a long list of companies which aren't being marketed at the minute, but we keep an eye on. One or two of those, we are getting some traction with, so we are hopeful that we will be able to progress with something over the next twelve to eighteen months. Paul? Thanks, Simon. And this is our final slide, which is the outlook. And after an excellent h one, we expect a continued resilient UK performance despite the persistent demand headwinds. H two export growth is likely to normalize. We'll have strategic pro progress on margin targets from further efficiency improvements that we've touched on, the Dover plant closure.

30:45 We expect a minimum impact from the NIC NLW increase. It's around 600, but our record is good of recovering cost increases, you know, which might be down to cost reductions, efficiency gains, gains, and price adjustments. We've demonstrated our quality of our businesses and the capacity to deliver medium term growth plans. We have a diversity of end markets. We have the export potential, which is really there, and we have the strategic alignment with a shift to sustainable construction, which helps us.

31:22 Product innovation, that's more of the self help, and that will continue. We have an experienced management team, best in class service, and we have operational excellence where we believe we are one of the lowest, if not the lowest cost producers depending on which, division. The board and the board remains confident in the group achieving its full year forecast. There is a clear line of sight to deliver long term shareholder value, it will be more of the same. We've outlined the strategic moves that will make that happen. And if we reflect over the last five years, we've consistently improved this group. And as Simon touched on, that 435, BPS movement to 14.1% from FY nineteen is quite significant.

32:16 So we can do it, and we're gonna continue to do it and to build that to the 15 to 20% operating margin. And we have the capability both in terms of growing our sales and improving our efficiencies. We're constantly looking to see how we can make improvements on both of those areas. And the end result is good.

32:41 So we're pleased. We're not complacent. We're quite pleased with progress so far, and we want more, and that will also include m and a activity where we've had a a good record. We've had good synergies coming through over the years as well. So I think that's really it other than to thank you all so much for attending. We've got some questions, and then I will just say a few words at the end. So thank you very much. Fantastic. Paul, Simon, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the right hand side of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard.

33:35 Paul, Simon, as you can see, we have received a number of questions throughout today's presentation. And Simon, if I may now hand back to you to chair the q and a, and I'll pick up from you at the end. Thank you. Thank you very much, Alex. So Paul, first question is for you. When will the company move itself onto the main market? There are no current plans to move ourselves back onto the main market. I'd say never say never, but we're very conscious of, there are some investors that are invested in us, because of the IHT benefit, even though that will have been changed, to some extent in the budget, of course, I think it's been halved. But nevertheless, there are institutions and individuals out there who've got an AHT reason for investing in us.

34:24 And actually, overall, you know, our share price has moved up significantly, I would say, in the last year. So from that point of view, it it seems to be working quite well, but we will continue to keep the situation under review.

34:42 Thank you, Paul. The Feet reports that UK businesses are set to offload 70,000,000,000 of pension risk to insurers. Why can't ALUMASC do the same? Would it not reduce risk and make the company more attractive? Just one for you, sir. Yeah. Well, Gerard is referring here to the the pension scheme, defined benefit pension scheme, and there are essentially two options for a late stage scheme like ours. You can either hold it on the balance sheet and run on on self sufficient basis like plan a if you like, or you can pay an insurance company to take it off your hands. And the simple answer to the question of why don't we, pass it on to insurers is that it doesn't represent good value for money for the shareholders right now.

35:32 We continue to keep it under review. We will have a better idea of what ongoing cash flows look like post the trialing review with trustees. And I think the likely outcome of that, as I mentioned when we covered it, is that we will agree some level of contribution basis, which keeps some further derisking, including partial off from insurance buyer on the table. But to do it right away, I think, would not be good value for money. So we'll see who wants to do this one. The dividend increase of 1.44% doesn't reconcile one bit to the positive tone of your RNS.

36:19 Why haven't you had the confidence to increase it more? Want to handle that? I'll add to it if you want. Sure. Well, what we were doing, we weren't trying to send a message with our interim dividend increase. We took look at these things on a full year basis. So we are once we you know, if if we the business performs in the second half in line with the board's expectations, then we would expect to increase the dividend by more than the the increase seen at the half year. But we're not trying to set a message. We are just looking to show a little bit of progression and review it in the full year. Which is what we did last year, and we had somewhat of an uplift in the for the final dividend. Yeah.

37:09 How much do you pay into the pension fund looking to sell the fund to an insurer, question mark? Well, I think the latter part of that question we've covered. Current contribution level is £1,200,000 per year. Going forward, the discussions with the trustees are likely to revolve around how much it's gonna cost to run the scheme, the expenses of the scheme itself, plus a moderate level of contribution to keep as I mentioned, derisking options on the table. But I don't know more can't give you more than that until we've sat down with the trustees. Okay. How is the sale of the Dover site going? Have you had some interest from prospective purchasers?

37:56 Shall I answer that? Yeah. It's going quite well. We have had some interest. We are still finalizing the clear up of the site because it was manufacturing up until a few weeks ago. But there has been interest, but we're we're not I would say we're not close to selling it, but that could change, you know, if the two or three, four people who've been around it, etcetera, start to, show, further interest and and want to accelerate that. But it's not without interest. Let's put it that way. Okay? Well done, Paul, Simon, and all at ALUMASC. Great results and prospects. Thank you very much. Thank you. So thank you. Scroll down. How many staffers do you have versus, say, five years ago? How many employees?

38:49 Oh, gosh. Right. Well, I know from five years ago, we're likely to have fewer employees in because we've sold a business called Levelux, and we have just closed our site in Dover. So we are there'll be a slight downward trend in staff numbers, but I think we're about 450 employees in the same. Can't give you that exact thing. It's not something that we necessarily publish, but Not ten to six months. No. Yeah. Four nine five. Four nine five. Yeah. So it's not not far off. So consistent, but a bit lower than But that would have included some of Dover. So you could take actually, there'll be around 15 or to come off that.

39:40 Maybe slightly less. Sorry. 12 ish. So yeah. And five years ago, it would have been a lot more. I haven't got that number with me in my mind. Do you contemplate international manufacturing expansion, or will overseas remain an export business for the foreseeable future? Well, again, never say never, but at the moment, you know, our expertise, our investment in modern equipment, etcetera, is all in The UK. But, you know, over time, then we may do it. It's a question of, you know, the cost of shipping versus the investment and the size we can build a a market up to, but it would be a possibility over time.

40:25 But I don't think we're near that at the moment for several years, to be honest. And then how is the ERP system performing for the business now? You can have that one. Yes. That's a reference. It's the the implementation of of a new system in our two biggest businesses only happened six, eight months ago, something like that. They are now going through the system, which is a lot more stable now and gives them a lot more options in terms of understanding the business, and they are implementing the changes, you know, as we speak. They're starting the process of improving the system. What has improved a lot over the last few months is CRM, customer relationship management data.

41:16 And the sales and marketing teams are increasingly using that to better direct their efforts. And the next one is yours. Okay. Well done on the strong cash flow generation. How long can working capital continue being positive, particularly as you continue growing the business? Well, it's a good question. And I'd I was very pleased that we had some inflow from our working capital in the six months. I think 14.8% of of trade working capital as a percentage of sales is probably a reasonable place to be, and I don't anticipate squeezing much more out of that until we really get into the ARP synergies and the ERP benefits, and then we might see a little bit more coming out. But I think they're medium term targets, so I'm not expecting too much more to come out of that certainly in the next six, twelve months.

42:14 I think you've got the number on that next one. Yeah. Innovation, what percentage of sales is from new products? So I think in the last report, we don't publish it every six months, but in the last full year, was about 16 of our sales were from products launched in the last three years. And that varies from varies from division to division. Tim Lock, it was up near it was about mid 22 to 23%, I recall. Paul, do you wanna comment on Yeah. I have got a view on this, and that would be over time, I'd like it to be nearer 25%. Certainly, to 25%, but, you know, over time to get to the 25%, I think that's a healthy percentage because it really is true that if you launch what is actually a new product and something that's innovative, you will get better margins on that until the competitors catch you up. And what you need is a flow of other new products coming through that will continue to come into the, yeah, into the businesses.

43:20 So that that's what we'll be doing. And, yeah, it's always exciting launching new products too. Fantastic. That's great. Paul, Simon, thank you for addressing all those questions for investors today. But before redirecting investors to provide you with their feedback, which I know is particularly important for the company. Paul, could I please ask you for a few closing comments? Yeah. It's just a very big thank you for your support today and for your kind comments, for the great questions as well, and and really just being here attending and showing interest in our business. We feel we have come a long way in the last five years. This hasn't been an overnight wonder, and we've got a lot of plans really there for the future where we're going to grow this business even further.

44:06 And we feel that now is the time that we're hopefully getting credibility, of being able to, you know, deliver, and against the difficult marketplace as well. So when the markets return, we hope that we'll be able to move further forward. And, yeah, we've had a strong h one, and we, expect to be able to, continue growing the business. So thank you very much indeed for your attendance. Fantastic. Paul, Simon, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company.

44:55 On behalf of the management team of ALUMASC GROUP PLC, we would like to thank you for attending today's presentation, and good afternoon to you all. Thanks so much.