Ashtead Technology Holdings (LSE:AT.) — H1 results

0:01 Good afternoon, ladies and gentlemen. Welcome to the ASHTEAD TECHNOLOGY HOLDINGS 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 via the q and a tab that's just situated in the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so, and these will be available via your investor meet company dashboard. Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to CEO, Alan Piri. Good afternoon, sir. Thanks, and good afternoon, for joining us. My name is Alan Piri.

0:51 I'm the CEO here at ASHTEAD TECHNOLOGY, I'm joined this afternoon by Ingrid Stewart, our CFO. So our plan is just to run through the slide deck here, and then we'll we'll open up to q and a. It's a really exciting time to be involved in the business. We're trading strongly. We've got great opportunity to capitalize on the long term growth drivers. In the first half of the year, we've grown revenue by 57%, 41% of that was for from organic growth, 14% from the acquisitions that we did at the back end of last year, and we got about 3% from favorable FX. Across the two end markets that we service, we increased revenue from offshore renewables by 74%, and we increased revenue from oil and gas by 50%.

1:41 We increased cost utilization by 1%. We increased pricing by 22%, which drove a 5.4% increase in gross margin to 78.8%. As we look forward, the business is really well placed to capitalize on the market opportunity in front of us. We invested $8,000,000 in the first half of the year in CapEx, and we forecast to spend $20,000,000 through the full year. We increased headcount by 11%, predominantly in technician roles and also bolstered the sales team to deliver continued growth. We appointed our first HR director that we'll make some comments on later. And we also fully integrated the two acquisitions done in 2022, HireTech and WeSubsea, and we're already getting strong synergies from both of that from both of those, and we continue to build out our lead pipeline. Encouragingly, tender activity or quote activity in the first half of the year was more than 50% higher than the prior period, last year. We've traded strongly. We've increased confidence in the outlook for the business, and the board expects FY '23, I turn to be comfortably ahead of its expectations.

2:57 Before we get into, the financials, there's a couple slides just, by way of sort of background that that we'll run through. Just as a reminder to maybe those who who haven't followed the story for too long, we are a subsea technology rental and services business. We support the full offshore life cycle, and we play across both oil and gas and wind markets. And we're the market leader in what we do. We've got a long track record. Business has been in existence since 1985, and we support all the major subsea contractors globally. Our fleet consists of over 19,000 items. It's highly mobile, and we are we're we're able to quickly adapt to changes in end market and geographic die dynamics.

3:43 In terms of the two key end markets that we service, seven 67% of our revenue comes from oil and gas, and the focus there very much around operations and maintenance and then field life extension. And we have deliberately bought businesses through m and a to focus further on decommissioning. In offshore renewables, which for us means wind, 33% of our revenue is coming from that market. And at the moment, the focus is very much on site characterization, construction, and installation given that industry in is in its infancy. It takes, I mean, one to two years to build an offshore wind farm. Life expectancy is about twenty five years, and then it'll take a year to two years to decommission it. So as the installed base, increases in scale and and starts to age, we see a great opportunity in operations maintenance and field life extension, which would be a new market for us.

4:43 In terms of competitive advantage of what makes ASHTEAD technology unique, we continue to build on rivaled capability, which widens and deepens our competitive advantage. We've got a great opportunity in front of us, not only to drive financial performance, which we've done through the first half of this year, but also to scale the business. At the heart of everything that we do is to increase customer, relevance, to do more for them, to increase higher propensity to rent, plus the skills gap, and also to make sure that we minimize the cost of of failure. We've got a strong team, internationally, which we continue to grow. We've got the link the largest independent fleet in the market with a trusted partner through and expertise to our customers. We continue to build our capability both through the use of CapEx and through m and a. We we're plugging technology gaps to, be bigger and stronger, and we are very much focused on project efficiency and a commitment to quality, which, is driving benefit, to our customers.

5:49 We've got three service lines, serve surveying robotics, mechanical solutions, and asset integrity. Surveying robotics service line is electronic equipment rental. That's where the business started from. It now, makes up, like, 58% of our revenue. Mechanical solutions, has been built out, recently through m and a, and that started in 2017, and that makes up, roughly 35% of our revenues, and the balance is coming from asset integrity. The real difference, that we can create for our customers versus our competition is in the bull's eye in the middle, where we overlap survey robotics, mechanical solutions, and asset asset integrity. You know, that is our key focus area.

6:35 That's where we differentiate ourselves. And as we look at m and a and as we look to buy additional products and services to add to the mix, that is the area we are very much focused on. Turn it over to Ingrid who will talk us through some numbers, and then I'll come back and talk about market and some, operational aspects. Perfect. Thanks, Alan. Good afternoon, everyone. I'm delighted to present, another excellent financial performance in the business. The momentum that we saw through the back end of twenty twenty two very much continued into the first half of this year. We saw year on year revenue growth of 57%, and that resulted in EBITA growth of 92%. We delivered record margins of 31.4, that's up from 25.8% in the prior year. And then we dropped that down to earnings per share, and earnings per share of 14.2% at 14.2p, sorry, is up 72% on prior year. As Alan said, we've increased our cost utilization. We've also increased pricing, and that's what's allowed us to drive these increases to our profitability.

7:36 And that has allowed us also increased our ROIC from 19.1% to 25.5. Our strong financial performance has also allowed us to reduce our net debt leverage to 0.7 times, providing balance sheet flexibility to allow us to continue to invest both organically and inorganically. This slide here just demonstrates the strong growth trajectory that we have in our business. The the three graphs are our revenue, our adjusted EBITDA, and our adjusted EBITDA, and the left hand columns on each of those graphs so our full year results and then our our half year results and both last year and this year on the right hand side. The full year '22 and and the half year '22 yellow additions are performer for the acquisitions that we did at the back end of last year. So as you can see, the organic growth has been very strong in the first half of this year. The business continues to deliver consistently high EBITDA margins of around 40% plus and EBITDA margins in the high twenties, low 30%.

8:41 On the p and l, our revenue growth of 57% can be split 14.5%, organic 13.9% from M and A and then with a small balance from FX. And as Alan said, when we look at that from a market perspective, 74% growth from renewables and 50% from our oil and gas revenues. 33% of our revenues now come from our renewables business, and that is up from 30% in the prior year. Our margin increased to 78.8%, reflects the growth in rental revenues, increased pricing and economies of scale. We've maintained admin costs at 37% of revenue, and this is in line with prior year. And and for those of you that, have access to the, web the our Internet address on on the investor page, if you look there, you'll find an appendix that's got a breakdown of the overheads.

9:31 We've also increased the depreciation, and that's following the increased investment in our fleet. When we turn to cash flow, this business has a very strong cash flow, and our operating free cash flow conversion is very consistent with the prior year at 80%, 31%, respectively. Our working capital outflow, in the in the period comes from significant uptick in activity with working capital representing 9% of trailing twelve months revenues, which is very much in line with our expected range. We've also continued to invest in CapEx in the first half with an 8,000,000 spend, and we forecast to spend a full year CapEx of GBP 20,000,000. We further strengthened our balance sheet, reducing our net debt leverage to 0.7 times, and that alongside the increased facility that we raised earlier this year allows us to have significant flexibility to continue to invest in the growth of this business.

10:27 And then finally, on on capital discipline, our strategic priorities remain the same as they have been since we IPO ed. Our number one growth, is is from organic our organic fleet, and we continue to invest in building out the breadth and depth of our offering. Secondly, with the recent high-tech acquisitions now fully integrated, we're continuing our attention again to m and a and continue to review quality m and a opportunities. And then finally, from a shareholder return perspective, as per previous guidance, you have not proposed an interim dividend, but we'll continue our small progressive dividend policy when focused on paying a final dividend only in the medium term. Great. Thanks, Ingrid. We'll now turn to the market. We we are seeing, you know, significant increase in in activity.

11:15 This is creating a strong growth runway for us, not only through the course of this year, but into the next few years. And we're seeing customer backlog, increase well, which is multiyear backlog. For those who have followed the story since IPO, the graph on the left hand side is one that we've consistently shown, 12% CAGR, 22% through 25%, and we call out the offshore wind growth of 24%, which is significant. On the right hand side, we've pulled out a cross selection of ASHTEAD TECHNOLOGY customers that during the first half of this year accounted for 38% of our revenue. And as you can see from the graph, they've increased their their backlog by 80% over the period 2020 through 2023.

12:07 That is significant in that it creates the growth runway for us going out the next two or three years. But importantly, they continue to build the backlog and the market tone is very positive. Record backlogs, high tendering activity, increased pricing and the like. We've added a couple slides this time around, one looking at oil and gas, and at this point, we're looking at greenfield investment. So whilst our focus is very much in in inspection, maintenance, repair and then decommissioning, there is still significant investment in greenfield activity in oil and gas globally. Forecast this year is a 120,000,000,000 US, of which 75% has been sanctioned year to date, which is running 35% higher than the last eight year average.

12:58 If we look only at the North Sea, there's very little greenfield investment in the North Sea. However, our Norwegian cousins, you know, are seeing significant investment given the tax breaks that was introduced during COVID to stimulate the Norwegian economy. And as we look at our business globally, there is significant investment ongoing in the likes of Brazil. Guyana is opening up, and there's also significant activity ongoing in in The Middle East. So, you know, whilst there's regional variations here, you know, we are we've got a very, very strong oil and gas market in front of us. In terms of offshore wind, the capacity that's to be auctioned this year is at an all time high. The UK is has been a leader in offshore wind.

13:46 40% of all auctions have taken place in the last eight years in The UK, but the rest of the world is catching up. And today, we are working on projects in Asia and the likes of Taiwan, and we're on the East Coast Of The US. If we look at three offshore renewable businesses, NKT, Subsea seven, and Prismium, they've increased their backlog by a 135% from 2020. The key thing for offshore wind for our business is our equipment fleet is highly fungible. It's about 85% fungible across oil and gas and offshore wind. We're being pulled into the wind market by our existing customers.

14:31 So never before in the history of this business has there been a situation where there've been significant activity not only in oil and gas, but at the size of the offshore wind market continues to go from strength to strength. If we turn to see the the impact that that's having on our business, year to date, we have or certainly in the in the first half of this year, tendering activity was running more than 50% higher than the prior year. We increased cost utilization by 1%, and we also increased pricing by 22% through that period. In terms of things that we've been doing to sustain and and grow the business further, we've been continuing to invest in our people, in our equipment, and in quality.

15:20 We're delighted to see that we've recruited Christine Cochrane as our first HR director, and we see the opportunity to attract, retain and develop talent to this business as being key to the future. We've increased headcount by 11% year to date. We've invested 7,700,000 in the fleet. Our forecast for the full year is 20,000,000, and that's been increased from a budget of 15,000,000 that was set at the end of last year, the increase being a result of the opportunity that we see in front of us. Our focus remains very much on quality. We recently went through ISO certification for quality environment and HSC.

16:05 Actually, having external accreditation on our systems and process processes is an important aspect of of what we do. We're delighted to to see that we have, you know, made really great progress with the two acquisitions, HireTech and Resubc that we bought at the back end of last year. Both of these acquisitions have very much supported the the mix and both in terms of products and services that we are delivering here at ASHTEAD. We bought both of these businesses at sensible valuations. We paid five times EBITDA for we subsea, 4.9 times for Hardtech. The rationale for both of these deals were very much the same, which was they were highly complementary to our mechanical solutions business that we're building out through m and a. We fully integrate all the deals that we do, the theory being that we treat as one brand, ASHTEAD TECHNOLOGY. We act as one team, and we drive synergies across our business by being one brand, acting as one team, and being one voice in the marketplace.

17:09 In terms of international expansion, we've already moved some of the vSubsea fleet across the geographic footprint that ASHTEAD TECHNOLOGY has. In time, it's a higher tech. You know, we've been a bit slower in internationalizing that just given the demand that we've had in the business. The thing that you really gives us the most comfort is through both of these acquisitions, the teams that we've acquired have integrated exceptionally well, and customer feedback in terms of service and quality has been great. M and A is a key growth driver. It was one of the fourth growth or one of the fourth growth drivers that we came to market with in November 21.

17:56 And we operate in a highly fragmented market, and we see M and A as a great opportunity to to scale this business and broaden the depth and reach of it all to be more relevant to our customers. So what are we looking for? We're looking for a strong culture alignment. We're looking for market leading expertise, ideally businesses that have got long term customer relationships that we that we can benefit from, opportunities to grow the service lines that we've got and to increase regional capability, and also pull through revenue synergies is very much important to us. We're not a house of brands. We're not here to collect the businesses. What we're here to do is is is scale this business and to differentiate it through the mix of products and services that that we can acquire. So we're very much focused on that bull's eye that I talked about earlier.

18:51 The key theme here is to be to remain very disciplined. You know, we're very focused not only on buying businesses at the right valuation, but making sure we buy businesses of quality and that we're very clear on what we're gonna do with them and how they're gonna make ASHTEAD TECHNOLOGY a better place by the time we acquire them. And then finally, if we wrap all this up, we believe we're very well placed to benefit from the long term structural drivers in our marketplace. The business has traded really strongly. Year to date, activity levels are high. We've expanded the fleet through the investment we've done. We believe that, you know, we're strategically well positioned. And as a result of all that, we have got increased confidence in the for the business, and the board expects f y twenty three to be comfortably ahead of its expectations.

19:45 Thank you. Alan, Ingrid, thank you very much indeed for your presentation this afternoon. If I may just jump back in there. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of slides and the published Q and A can be accessed via your investor dashboard. Ingrid, Alan, as you can see in the Q and A tab, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But, guys, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you.

20:33 Okay. Yeah. So let me just go go through those. So what what support of any disaster TECHNOLOGY receive? And fixed listed ASHTEAD Group and at what cost? Maybe you can give some detail on the background on that. Sure. So the the business was acquired from ASHTEAD Group in 2008. And at the point of, acquisition, we had a services agreement with them, which expired during 2009. So there's been no involvement with ASHTEAD Group since, 2009. So great to see the growth from recent acquisitions and plans for more. If so, how much you'd like to fund them and what areas would you look in? So think Alan covered the the areas that we'd like to look at. But just in terms of funding, earlier this year, we closed a £100,000,000 RCF facility with a £50,000,000 accordion.

21:27 And we increased our banking club from from two, which was HSBC and Clydesdale to include ADN, Ambro, and Citi. And that, facility goes out to 2027 and with some extensions on on top. Currently, we have, you know, just under 30,000,000 of that drawn. So there's significant kind of RCF available, and the rationale for for reason that was purely to look at, for the m and a. We're very focused on maintaining leverage at one to two times and certainly no more than two times. And if we were to find a bigger acquisition that needed more funding, and we'd obviously, now also come out out and look at the equity markets as well. You sound very positive for the outlook.

22:14 Geographically, where do you expect to see the strongest organic growth? So we, you know, we are very positive about the outlook. We see opportunities to grow our business organically across all four regions that we operate in. So just for for those on the call, you know, we have been in Singapore since '94. We've been in Houston since '97. The business was set up here in 1985. So we've been doing business on that international footprint for quite some time. We now operate from 10 locations around the world. We split it up into four regions, APAC, Middle East, Europe, and the The Americas. And one of the key things about the m and a that we do is when we buy businesses, they're generally from owner managers, and they're generally regionally specific.

23:07 And one of the great opportunities that we've got is to internationalize those across the international footprint that we've got. But whether it's oil and gas or, offshore wind, there are opportunities to grow this business across all four regions that we operate in. And the next one, how is the headcount of the group changed over the first half? How many have been placed in sales, and how do you see this changing over the second half? So we've we've increased headcount by 11% in the first half of the year. We're sitting currently just under 300 employees. At 60% of the additions in the first half of the year were into technical roles, so technicians both to support base operations and to go offshore, and that is to support growth.

23:56 We've added something like six positions to the sales team. The business is is really well placed to to drive growth. You know, we've got a structure in place whereby we don't need to significantly increase headcount to support higher growth, albeit the focus is very much continuing to build out, the technical team. Could you please make a comment about the competitive environment? So we've got two aspects to this. In terms of serving robotics, our biggest competitor is our customers because they own roughly 65 to 70% of the equipment in the marketplace. In terms of, you know, actual competitors in the rental space, we've got three main competitors, both international and Outlook, all private equity backed, you know, we believe we've got market share in that market of sort of 25 to 30%.

24:58 When it comes to mechanical solutions, the the the market is highly fragmented, which is creating the opportunity around m and a, and we don't really have any competition other than some of our our from our customers in terms of what we're doing in ASHTEAD TECHNOLOGY. But when you look at ASHTEAD TECHNOLOGY, you know, we are very differentiated from anything else that's out there. No one else has got the scale depth and experience that we've got, and nobody's got three service lines interlinking the way that we've got them working. There's a question around the tax losses that we had at the end of twenty two, which subsidiaries they are located in, and any chance that, the concerned loss making subsidiaries become breakeven. So as the first point in that is that we don't actually have any loss making subsidiaries, And there are some historical tax losses, sitting in the group, for various reasons, with change of ownership over the years. Those are actually quite restricted in terms of what we can use them for.

25:56 And they they're actually you know, it's gonna take us years and just unwind those those tax losses. So we're running, I think the the tax rate effective tax rate in the first half was, just over 21%. That's the sort of expected rate for, for the full year, it's probably slightly ahead of that. We're looking at kind of a sort of 23% to 25% tax rate going forward. There's a question that's kinda linked to this, which is around, where our revenues are split, the geographical split of the of the revenue. And as Europe is our biggest, kind of revenue generator currently, and that's run through our our UK entity. Clearly, we're kinda moving towards our UK tax rates. But, Al, do you wanna take the geographical split question? What's your geographical split of revenue and how much how dependent are we on the North Sea? So that links back to the sort of four regions that we that we operate through.

26:52 So the share across the four regions in terms of revenue is 66% Europe, 18% Americas, 11% APAC, and six percent from The Middle East. But when we look at our European operations, they don't only support the North Sea, they also support activity in the Caspian, in the Mediterranean. We do projects in, the West Coast of, Africa and also Brazil, from from here in Aberdeen. So we would estimate that less than 30% of our business is is in the North Sea, and of that, there's probably half of that, from from offshore wind.

27:38 And that leads nicely to the next question, which how big an opportunity is offshore wind for the company? So we we see a tremendous opportunity in offshore wind. You know, back, in 2016, we did no business in offshore wind. By 2018, 10% of our revenue has come from offshore wind. In the last half, 33% of our revenue came from offshore wind. And when we kicked the market in November 21, we stated that our medium term expectation was to grow revenue from offshore wind to be more than 50% of group revenue. And this question here around interest rates on the RCF, that fluctuates depending on the, on the gearing.

28:26 We're currently at 2.25% above, Sonia, and that increases up to to 3%. And it's it's not a fixed rate. We haven't hedged. And given the low debts in the business, we've made a conscious decision not to hedge at that rate. That's something we will look at should we do a a larger acquisition that that kind of ate up more than facility. Another question here on new technologies. Are there any new technologies coming to market that offer you growth opportunities? And if so, would you have to buy those in? So in in terms of new techno in terms of technology, in our serving robotics service line, all of that technology, is bought from OEMs. In mechanical solutions, we would say probably 80% of the technology is designed, manufactured, and assembled in house, with the balance being, bought in.

29:22 So there there is a continual trickle of new technology in terms of serving robotics, But it's not technology in terms of consumer technology. We're buying equipment certainly for electronics that will last ten, twelve, fifteen years. Technology churn in this industry is is really slow, And customers, because they own a lot of equipment, it's not in their best interest to move, you know, on anyway, but they really rely on trusted methods. Where we see the opportunities around new technologies is new technologies to ASHTEAD technology as we continue to grow. And that, again, is very much around the management solutions space. We've we've built that business or that service line through m and a. And as we continue to expand that and to have further conversations with customers, you know, there are there are a number of technology gaps that we are we are actively plugging, and some of that will be bought in, some of that will be designed and and assembled in place.

30:24 And then linked to that in terms of growth, are there any new regions, specific locations you would like to enter today? So in in terms of regions, you know, we we're we're very well pleased to benefit from the geographic footprint that the business currently has. We we'd like to be more active in Norway, and to do that, you need to be Norwegian. So that is a focus that we have on m and a. And the other thing would be around offshore wind. You know, over the fullness of time, to be active or to be you know, to benefit, the most from that market, you probably have to be closer to the projects, which means opening a facility possibly further north in Asia or in Taiwan or possibly on the East Coast Of The US.

31:15 But today, we're supporting the Asian wind market very successfully both from Aberdeen here in The UK and from Singapore, and we're supporting the East Coast, The US wind market, not only from Aberdeen, if it's European customers, but also from our three locations in Texas and Louisiana. Okay. So question here around, m and a, and it's is it probable that the longer you wait to do bolt on m and a, the higher the valuation multiples will ultimately have to pay given the strength of the markets you service, inflationary trends, deep customer backlogs, etcetera. Let me just I can do that one. I think what we're what we're seeing is that multiples aren't necessarily changing, but earnings are. So we're finding that a lot of the conversations we're having, people are are generally some people are are would rather wait a bit because there's the the we see the businesses are are continuing to go from strength to strength.

32:12 But from a multiple perspective, you know, fairly consistent with what we've always said on that. I I think that there's there's a follow-up question that's popped up on the screen, which is, you know, is it probable that longer you wait to do more bolt on m and a, the higher the valuation multiples you'll ultimately have to pay given the strength of the market, inflationary trends, and the like. But what we're seeing is we're not really seeing too much movement on valuation multiples. What we're seeing is a bit of delay in owner managers who were predominantly buying businesses from just holding back a bit given the strength of the market. And, you know, everything is is is moving in a very positive direction.

32:58 So it's not really about multiples. It's about, you know, do I hold this business for six months, twelve months, longer to increase my earnings so I I I I get a a higher valuation. There's a question then around cash. What's the cash situation of the business company? And what interest rates are we getting, and and do we invest it? So we we typically we're in a net debt position. I think at the at the year at the half year, it was sort of around 30,000,000. Mark, we are we kind of tend to monitor, maintain a cash position of around 5 to £6,000,000. And as we build that cash, we'll just reuse some of that to to repay the RCF. So we typically don't invest it in terms of we we don't actively put that into any sort of saving type accounts. We're just very much using that for working capital.

33:52 We've got a question again going back to, you know, m and a. What's the top price earnings that you're willing to pay for acquisitions? And so, you you know, what is it? You know, without being specific there, we bought HireTech, and we subsea last year for, you know, five times EBITDA, 4.9 times EBITDA, and we believe that's a a sensible multiple for those type of businesses. For businesses that have got high offshore wind content, you know, we may have to pay a bit more, but, you know, we believe that the range is probably, you know, four four to six times with with a bit more depending on the scale of the business, and and how much wind contact, has the that business has. There's a question which has come in around hedging currency.

34:43 We typically don't hedge currency. Again, we've we've got a natural hedge in the business. We've effectively trade and probably in in g in GDP, US dollar, and Singapore dollar. And in each of the regions that we, operate, we we have a cost base in those currencies, and then CapEx is generally either between pounds or or US dollar. So, you know, we do we'd if we if we are certain, like, heavyweight in one in one, we might sell some US dollars, for example, if we and take advantage of of changes in rates at times, but it's more opportunistic, and we don't typically hedge anything. I think that's probably unless there's any more coming through. Alan, Ingrid, And thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform.

35:50 But, Alan, perhaps before really just looking to redirect those on the call and to provide you their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great. Great. Thank you very much. All that's left for us to say is thank you very much for tuning in this afternoon, for following the ASHTEAD TECHNOLOGY story. We've had a strong run through the first half of this year. You know, we're very positive about the outlook for this business, and we believe that the market opportunity provides a great platform for us to not only scale this business, but to drive, you know, further financial return from it. And the business is in really good shape in terms of, you know, how we're positioned, in terms of debt facility to do further m and a, in terms of the team and the strength that we've got and from the benefit of investing, over the long term in in our fleet.

36:45 So, yeah, we are very positive about about the outlook, and, you know, we look forward to seeing you all again in our next results presentation. Thank you very much. Alan, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations? This may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of ASHTEAD TECHNOLOGY HOLDINGS PLC, we would like to thank you for attending today's presentation. That now concludes today's session, so good afternoon to you all.