Billington Holdings (LSE:BILN) — Interim Results

0:01 Good afternoon, and welcome to the BILLINGTON HOLDINGS PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time by 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 you received during the meeting itself. However, the company can review your questions submitted today and publish responses when 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 Mark Smith, CEO. Good afternoon, sir. Good afternoon. I'm Mark Smith, chief executive officer of BILLINGTON HOLDINGS PLC. I and my colleagues, Trevor Taylor, chief operating officer, and Dave Jones, chief financial officer, are pleased to present to you our twenty twenty six interim results.

0:51 Our executive summary provides some of the highlights for the first half of twenty twenty six. However, firstly, leadership changes. After more than twelve years with BILLINGTON's, I have informed the board of my decision to retire as chief executive officer from 12/31/2026. It's been a great privilege to see the business grow and evolve into one of the industry's leading structural steelwork companies, and I am proud that I've played my part as group CEO in achieving these successes. I've had the pleasure of working with friend and close colleague, Trevor Taylor, since joining BILLINGTON. And as I step down from the role, I do so knowing that he's well experienced to take on the role of CEO and has the support of an excellent team to continue to drive the group forward.

1:46 He will be ably assisted by Kevin Campbell, who moves to a strategic, group role of special projects to direct internal and external change and development. Daniel Duffield, after over ten years within BILLINGTON Structures, has taken the role of managing director. I will be retained by the company in an advisory role to assist and support the management team, clients, and promote the wider industry. A further change to the PLC board has been the appointment Olivia Abie as nonexecutive director replacing Alexander Oschfeld. Ollie has been known by the company by for a while and is a natural replacement being directorship and engineering experience.

2:37 Operationally, BILLINGTON has grown upon its position and reputation as one of the leading structural steelwork and construction safety solutions group. In a challenging market, the company has reacted by reviewing its cost base, consolidating activities, extending night shifts, and continuing to invest in expansion, new technologies, and machinery that will improve quality and efficiency. Furthermore, we have secured significant contracts with new financially secure clients across the group, delivering in sectors that we are recognized as market leading. This has resulted in a record order book and production secured throughout 2026 into 2027 and beyond.

3:26 2026 being second half weighted, we can report PBT of 2,800,000, underlying operating profit of 5.1% for the half year, and on course to meet year end expectations. The BILLINGTON HOLDINGS PLC share register has remained relatively consistent in the period with the largest movement being an increase in the shareholding of GPIM of 2% during the first half of twenty twenty six. Since the release of the full year results in April, the share price has increased from 3.80 to £4.45 an increase of 17%.

4:15 The net asset value per share is £3.48 representing 86% of the current share price. I hand over to Dave Jones to provide an overview of the financial performance for 2026. Thanks, Matt. In the first half of twenty twenty six, we delivered a strong trading performance and improved profitability in challenging market conditions while continuing to strengthen the business operationally. Revenue increased to 54,000,000, principally reflecting a return to higher average steel content across structural steelwork projects in the period. We expect this more typical trading profile to continue throughout the remainder of 2026 and into 2027. A key driver of the improved underlying performance has been the successful consolidation of activities within Barnsley.

5:07 This has reduced our overhead cost base and enhanced operational efficiency across the business. The closure of the Yate facility has removed approximately 4,000,000 of annual fixed direct costs and reduced future capital expenditure requirements by around 3,000,000. Following the closure of Yates, we have continued to increase capacity capacity at both our Runwell and Shafton facilities supplemented by a great use of qualified subcontract fabrication partners. This provides greater operational flexibility and scalability, enabling the business to respond to better to changing market conditions. As a result, the business delivered underlying operating profit margin of 5.1%, demonstrating the benefits of these operational improvements despite a competitive trading environment.

5:58 Reflecting our confidence in the business and commitment to shareholder returns, a dividend of 11p per share was paid in July 2026 covered 2.46 times underlying earnings. Cash generation remained robust throughout the period, although working capital requirements increased. We closed the period with a net cash balance of £12,600,000 compared with an average net cash position of £17,000,000 year to date. This reduction reflects the high level of trading activity and timing of contract delivery. Our £6,000,000 revolving credit facility of HSBC remains undrawn and we are currently progressing its renewal for a further three year term. We expect the renewed facility to be agreed before the end of the year and in place well ahead of its maturity in March 2027, supporting our ambitions for future growth and acquisition opportunities.

6:56 From a risk management perspective, we continue to maintain credit insurance on our principal customers despite challenging conditions within the underwriting market. It is encouraging that a number of recent contract wins with new customers have been secured with financially strong and credit worthy organizations, further supporting the quality and resilience of our order book. Our pension derisking program continues to make good progress, with the scheme moving closer to formal buyout of its remaining liabilities. This represents another important milestone in reducing long term financial risk and strengthening the group's overall balance sheet position. This slide provides some of highlights of the 2026 trading period.

7:44 Revenue increased 29% to £54,000,000 while underlying profit before tax rose to £3,100,000 from £1,700,000 in the comparable period. Underlying operating margin also improved to 5.1% compared with 3.3 last year. Underlying return on capital employed increased to 16.9%, demonstrating the benefits of enhanced operational performance and our investment strategy. Earnings per share increased to 16.3%, up from 9.8% in the prior period. The group's balance sheet remains a key strength, supported by net assets of £51,000,000 and a pension scheme surplus, providing a strong platform for future growth and investment.

8:35 Looking in more detail at the income statement, underlying operating profit increased from GBP 1,400,000 last year to GBP 2,800,000 in the current period. Although the period noted a higher investment in working capital and a consequent reduction in net cash balances, we continue to maximize returns on surplus cash deposits, generating interest income of 294,000. Non underlying restructuring costs of 229,000 were incurred during the period, reflecting the substantial completion of the closure of the EA facility with the site now fully cleared and marketed for sale. This slide illustrates the movement in cash during the period and our approach remains one of disciplined capital allocation.

9:22 The underlying profitability generated cash, although this was offset by increased working capital requirements during the first half of the year. Importantly, the group remains debt free and retains significant financial resilience. Looking ahead, we expect to realize the value from the Yate facility with the completion anticipated during the first half of twenty twenty seven. The proceeds will further strengthen an already robust balance sheet and provide additional flexibility to perceive strategic opportunities as they arise. 2025, Materia noted the completion of the group's five year capital investment and modernization program.

10:08 One machine replacement was deferred from 2025 and is now ordered and scheduled for installation at Shafting in October. The closure of the Yate facility allowed for some relatively new piece of platinum machinery to be transferred to the balancer facilities and therefore mitigating approximately £3,000,000 to add of anticipated future capital expenditure. The expansion of the TubeCon business necessitated a new dedicated facility, costing 1,700,000 and is now fully operational. Further capacity expansion out options at our Shafter facility are currently being considered in line with our strategy of driving value from the principal properties that the group owns. Twenty twenty six anticipated to note £2,000,000 of capital expenditure as a result of the deferred machine replacement before falling to a more normalized level of between 1,000,000 and £2,000,000 from 2027.

11:04 Projects to increase capacity relating to new or extended buildings are not included within the capital expenditure forecast at this time. I will now hand you back to Mark to take you through the group businesses. Thanks, Dave. Divisional breakdowns. The organogram shows the makeup of the BILLINGTON HOLDINGS Group. QUECON has noted a smaller proportion of group revenues in the period, although this is expected to be substantially increased in the second half as some significant projects are delivered. The billing and structures proportion of the group revenue was increased to 75% in 2026 from 70% in 2025, principally as a result of more normalized portfolio contracts being delivered in the period and a higher proportion of steel content per productive hour, and therefore increasing the level of revenue generated.

12:00 All other group companies remain broadly consistent to 2025 regarding the proportion of revenues generated. BILLINGTON structures project highlights. No note activity in the most buoyant sectors, data centers, energy from waste, and other projects ongoing throughout a variety of sectors. Looking forward, future work is predominantly in the same sectors, although also include project delivery in the defense sector, education, and low carbon energy production and associated carbon capture facilities. Peter Marshall Steel Stairs. As in previous years, it can be noted here the wide range of clients as well as in group trading with Billington Structures.

12:50 The business continues to operate at year maximum capacity supported by partner subcontractors with strong revenues being noted. A wide range of clients, including Billington Structures competitors and principal contractors directly. We have secured a very robust order book looking forward, sharing the same clients as BILLINGTON structures within the same buoyant sectors, namely data, energy from waste, and education. EZH, site safety solutions. As the commercial sector continues to be subdued, EasyEdge has noted reduced levels of utilizations for its primary product.

13:35 The scale and volume of projects for the latter part of 2026 and into 2027 are more encouraging, and higher utilized levels are expected. There remains a good spread of clients with volumes of work anticipated to increase from q four twenty twenty six. We are investing in replacing our whole barrier fleet with a newly designed lightweight version, which we will continue to roll out over the next eighteen months. However, the company continues to note pricing pressure in the market as competitors discount stock to maintain their own utilization. HOLDIT, our environmental hoarding and branded graphic branding solutions, have experienced another fantastic trading period for the company with its principal products remaining the product of choice for its customers.

14:31 Prospects and inquiries are positive, and we're hopeful of another great year in 2026. Brandit, the associated marking marketing division of the business, continues to expand its product range and deliver its services into both internal HOLDINGS clients as well as hoarding systems supplied by others. HOLDIT and Brandit benefit from being able to deliver to all construction sectors, including the residential sector, utilizing both sales and higher models. Shafton Steel Services is one of our largest steel processing businesses in The UK, servicing internal and external clients with the cutting, burning, drilling, and processing of heavy steel plate.

15:22 A further heavy duty saw drill line is ordered and will be installed in October 2026, following the deferral of the last item of machinery within the group's cradle expenditure and modernization program. Shaft and steel services are extremely busy, currently servicing its internal clients, BILLINGTON Structures and Peter Marshall Steel Stairs. However, there is a good external work for respected competitors in construction, engineering, as well as wider steel sectors. With the above in mind, there is a very strong pipeline throughout the remainder of 2026 and into 2027. Specialist protective coatings.

16:08 This specialist facility supports the group's wider requirements for the application of high-tech treatments and fire protective coatings for internal group companies as well as the wider construction and oil gas pipeline industries. The group is yielding the benefit from the significant investment in automated equipment. We are seeing a significant increase in demand for intumescent fire resistant painting of structures to work in The UK as a result of the most buoyant market sectors regularly specifying these off-site treatments. The company is operating at full capacity working for BILLINGTON Structures, Peter Marshall's, TubeCon, and many external clients, which is anticipated to continue at current levels well into 2027.

17:03 There's also been work carried out and continues for respected competitors to Billington Structures. The company continues to deliver projects for the water industry, specifically replacement pipelines. The program for replacing water pipelines is taking longer to gain momentum than we had originally anticipated. The capabilities of the Sheffield facility in Sheffield set it aside from other painting contractors operating in the market. TubeCon specialist steel and bridge division, the team are now fully embedded within BILLINGTON structures. TubeCon's first contracts have been secured, fabricated, painted, and successfully delivered.

17:50 The new production facility is fully operational and consistently delivering projects for its clients. The division was awarded its largest order to date and is currently in production with installation scheduled early in 2027. Pleasingly, the margins achieved on these contracts are margin enhancing to the wider structural steel activities within the group. There is a good order book combined with a strong pipeline of opportunities looking forward, which spans through to the end of twenty twenty seven. Further resources to expand available capacity of the division are being implemented. Trevor will now discuss the sustainability and strategic initiatives.

18:39 Thank you, Mark. There has been continued good environmental performance with the group maintaining its carbon neutral status. Our established sustainability committee continues to investigate and implement carbon reduction projects to ensure that our sustainability commitments and aspirations are at the heart of the Billington business. We have expanded the Billington Apprentice Training Academy based at Shaffton to accelerate the installation of capacity at our Barnsley facilities and further address the skill shortage within our industry. September noted a further intake of 15 apprentices, which are enrolled on a fast track training program delivered by a dedicated fabrication expert to a syllabus specifically tailored to the activities BILLINGTON's undertakes.

19:36 We continue to uphold our social responsibilities, supporting local and national charities as well as those charities local to our construction projects through our group chat charity set up in 2016. We also continue to identify local labor and apprentices close to our construction projects. Projects. We are gold members of the five percent club, an organization that represents businesses that have 5% or more of their workforce in earn and learn positions. This champions our commitment to modern apprenticeships. Cybersecurity and the associated risks are actively addressed with regular and increased investment in resources being made to ensure the company maintains the highest possible standards.

20:29 We respect the governance required in being a listed PLC, and we continue to follow the QCA code, implementing changes as new elements of the code come into effect. Our five p's strategy. Our strategic projects and initiatives are aligned and inconsiderate consideration of our five strategic pillars. Our focus is to proactively identify and manage risk while creating a sustainable, profitable work stream with financially robust clients using efficient processes to ensure competitiveness and generate a market leading return for our shareholders. We focus on people, developing, promoting, rewarding, and primarily keeping our staff safe.

21:23 Properties, updating, modernizing, expanding, and maximizing the facilities to ensure production is safe, efficient, and fit for purpose. Product, focusing on quality right first time, providing exceptional service to guarantee repeat business that protects our company and our clients. Position. We believe we are the best in the business and aim to maintain this status for our cherished clients, expanding our offering into new markets. Planet. We are committed to ensure that our green initiatives deliver on our commitments and as we, as a group, play our part in the road to carbon zero.

22:16 Following a period of subdued market activity, the implementation of our capital investment program and the consolidation of our structural steel activities at our Barnsley facilities, we now positively look forward to the future. Kevin Campbell, previously the Managing Director of Billington Structures, has subsumed the role of group strategic and special projects director to provide additional capacity with which to investigate and progress some of the many strategic initiatives. Our record order book allows us to look to the future with confidence and commence our journey on the next phase of our growth strategy. Our strategy will focus on four distinct areas.

23:05 Fixed asset optimization, deriving more output and associated value from our properties. Targeting markets and clients operating in the most buoyant sectors, namely data and power generation. Process automation, both in our factories and throughout our administrative and support functions. Diversification into other sectors and products which are able to add value to the group. This will be principally completed through acquisition. We have increased our focus on strategic projects and initiatives.

23:51 This has reduced costs, improved processes, and increased production efficiencies, further enhancing the margins the group is able to generate for its shareholders. Our strategy will be executed while ensuring financial capital resources are prudently allocated and taking a cautious approach to identify and mitigate financial and operational risks. Over the course of 2026, we have and continue to replay replace Yates' capacity in Barnsley with further recruitment of fabrication resources on an expanded night shift at Shafton and the commencement of a night shift at the one well facility.

24:40 These efforts to consolidate the operations of the Yates facility into the two Barnsley sites is consistent with our strategy of reducing our cost per productive hour and seeking to enhance the level of margin the business is able to generate. Furthermore, in our quest to increase the volume and level of skilled fabrication resource, we have expanded our BILLINGTON apprenticeship academy at Shafton. This will take two to three years to produce the necessary level of skilled labor resources, although the investment and foundations have been laid with the initial intake of 15 apprentices commencing earlier this month. Our objective is now to secure contracts with financially stable clients in our target markets.

25:31 It's been successful in that BILLINGTON has secured projects with a number of new financially robust clients with whom credit insurance is attainable. With a record order book, we are seeking to partner with end user clients as well as principal contractors to proactively engage with and develop future projects at an earlier stage. This engagement under certain design contracts allows BILLINGTON to utilize its specialist design resources to positively influence a project and provide program and financial benefits for BILLINGTON and its clients. In closing, relating to our strategic direction, there are many future projects being investigated and considered that will seek to increase revenues and enhance margins in our various businesses.

26:30 Long term growth. Our strategy is for long term growth organically and to acquire and diversify with the right opportunities. We continue to drive our margin improvement through modernization and efficiencies, continuing to reinvest profit back into developing the businesses. We continue to have a well established succession plan developing, promoting the next generation of managers and directors. In the current market, we have an even stronger commercial focus, working hard to secure the best contracts with fair terms and conditions. We have the resources to continue to be acquisitive as a group, and we will review all opportunities that complement and diversify the group's operations into areas where we are able to enhance margins and add value.

27:29 The wider steel market. The UK government subsumed control of British steel in 2025 with a transfer to public ownership in July of this year. British steel continues to supply The UK construction and other steelwork markets. After a period of relative stability in relation to steel prices, 2026 started to note steady increases. The ongoing conflict in The Middle East and the associated escalation in fuel costs is having a consequential inflationary impact to raw material steel costs. BILLINGTON's is principally hedged for its secured workload, for its raw material steel costs through either price escalation clauses with clients or fixed price arrangements with steel manufacturers or stockholders.

28:26 The UK government announced their steel strategy for the few for the future in March this year. This includes import steel quotas and their related tariffs for EU and worldwide imports into The UK being implemented on the first of July this year. Quota and tariff levels have been set for varying categories of products utilized within our industry. The level of impact to date has been limited as a result of high stock levels being built up in The UK prior to the new quota regime coming into effect in July. Future quarters will note an increased volume of materials being affected by the quotas with those most heavily affected in those products that are not produced in The UK.

29:25 The level of quotas for varying product categories will be reviewed again in July 27, and BILLINGTON stands with our collective industry in influencing government policy in relation to quota levels along with the categories of products included within the policy. Billings and forward order book. This slide gives the Billings and structures historical order book combined with the number of secured production hours. The order book stands at a record level following the recent award of a number of large projects for delivery in 2027 and into 2028. The portfolio of contracts within the current order book are of a less complex nature, which can be noted by the volume of productive hours content relative to the order book value.

30:23 The above order book is that for Billings and Structures, and with the awarded contracts are packages of work for other group companies within the group. Some projects have and continue to note slippage to on-site programs resulting in management of manufacture slots and working capital. Future projects in our target markets remain robust, and there are further significant opportunities that BILLINGTON's is hopeful of securing that would further extend the visibility of the current order book. And finally, Mark will take you through the current market outlook and concluding summary. Thanks, Trevor. Following a subdued market environment in 2025, it is pleasing to note a number of large projects we have been working on for some time come through as contract orders.

31:18 The current secure workload, combined with a number of highly developed prospects, underpins the brokers forecast for 2027 and starts to see volume secured for an element of 2028. 2026 has seen the return of several publicly funded projects in the health and education sectors that have previously undergone a period of review. Projects and opportunities in the defense sector appear to be increasing that further provides opportunities for BILLINGTON in an established sector. Sectors relating to information technology and power generation remain buoyant, and these sectors are those that BILLINGTON has a successful history of delivering in.

32:04 The acquisition by the UK government of BREECE Steel in July is a positive step for The UK steel industry and provides certainty of domestic supply and production for the future. We are eager to see and understand the strategic direction and investment plans for steelmaking of British steel as it seeks to replace its aging blast furnaces at Scunthorpe. Recent steel price increases associated with the ongoing conflict in The Middle East, combined with navigating the newly imposed quotas and related tariffs, has created a period of uncertainty for raw material price inflation. We remain alert to possible future impacts on consumer and client confidence in The UK.

32:55 Credit insurance, where possible, is put in place, which remains essential given the current market. However, with long standing clients with whom we repetitively deliver, combined with our strategic approach to broaden our client base, continues to ensure that BILLINGTON is able to mitigate risk and secure sufficient volumes of work in the most robust market sectors. In summary, operations. The capital investment and modernization program has been hugely successful, and the investments made at our Barnsley facilities has ensured that raw materials can be efficiently processed as we continue to increase output at these facilities.

33:43 We have strengthened our commitment to local employment and modern apprenticeships from September 2026 through the expansion of our Better Well Apprentice Training Academy located at Shaft. The investment into the TubeCon facility and the securing of its largest order book to date provides optimism for the future trading and expansion of this division. Our continued focus on strategic indicatives and projects will ensure that we continue to drive operational improvements and enhance the margins we are able to deliver for our stakeholders. Forward order book and pipeline. The outlook for the group is encouraging with a record order book of projects across multiple market sectors.

34:36 Our workload for the remainder of 2026 and through to 2028 is populated by projects in the most robust sectors, mainly power generation, data, defense, and education. Many of our future opportunities and prospects are of a similar nature. The current order book largely underpins the market forecast for 2027, although we remain mindful of ongoing global events that may have an impact on future schemes because of cost escalation. Several contracts continue to be subject to client led delays, although they are being actively managed to ensure that the production facilities remain fully utilized. Financial.

35:24 We move through the second half of twenty twenty six with a diversified order book, encouraging further prospects in our target markets and confidence to further grow and develop the group's activities. While there has been a short term increase in the working capital requirements associated with the increase in workload, the group continues to be debt free and will use its strong cash reserves to capitalize on any complementary acquisitions. Our robust balance sheet, strong cash balance, and proven track record of delivery of the most complex of projects positions Billingstons as the steelwork fabricator of choice for many of its clients in The UK.

36:14 I would like to thank you all for taking the time to join us today. I'll now take your questions. Thank you. That's great. Thank you very much for your presentation this afternoon. And if I may just, bring up your camera. 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 by our investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Could 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. Good afternoon. I'm Mark Smith, CEO, and I'm happy along with Trevor and Dave to answer quite a few questions that have been submitted following the presentation.

37:09 So we'll take these in turn. Number one, could you give an overview of the market sectors within your current order book? So, currently, the data center market is about 40%. The energy from waste market is about 30%. Tune con and bridges about 10. And then, other areas, carbon capture about 8%, defense 6%, and education about 6%. Number question two. I can pick one up, Mark. So second one is, do you anticipate any further reduction in cash balance?

37:58 I can also see the one following that as well fairly interlinked. It's the the balance sheet shows a large increase in work in progress. Does does the board expect the figure to be much lower by the year end? Well, in terms of the cash and absolutely right. The cash position at at the half year was a particular low point, and we don't expect it to go below 12,000,000 throughout the year. As we mentioned in the presentation, the average cash balance for that first half year was 17,000,000, and, generally, we saw a fluctuation in cash of between 15 to 20,000,000 was the normalized position. We very much expect that to continue into the second half as well. So it is slight it remains slightly subdued and still slightly higher work in progress than we've had historically.

38:44 But, actually, we're starting to see that unwind, and we will continue to see that unwind in part towards the year end where we'll be back up to around the 20,000,000 mark. So, yes, yes, cash does continue to fluctuate, and we still use we use our cash for the work to manage that working capital as we have always done. But, yeah, we we we are starting to see that unwind and should continue toward back towards the 20,000,000. K. Number four. K. I'll take that one. You describe a record order book providing visibility into 2027 and for some projects into '28. Can you quantify its current value, expected revenue conversion by year, and margin quality?

39:35 Okay. The we've set the current order book that principally underpins the broker's forecasts for '27. So the order book really reflects about 75% of the broker's forecast for '27. We do expect some contracts to grow within there that may take some further capacity. Also, about 12% between 1015 at least is '28 and is covered. And I think we described the margin as consistent with what we believe the 26 out turns about. Number five. Five. Five. So that one says how much of the 13,900,000 h 1 increase in contract work in progress has converted into cash since June?

40:29 And what working capital outflow should investors expect as the order book grows? But I think we've pretty much covered that in the earlier question. And broadly, the the the we don't expect any significant increase in working capital in the long term. It's more just timing and project delivery at certain points of time, which can lead to fluctuations over various periods. Six. I'll take that. How much of the 42,000,000 data center award is expected to be recognized in '26, '27, and '28? I would suggest 5,000,000 in '26, 13,000,000 in '27, and 7,000,000 in '28, although we are expecting some of those contracts to grow in value throughout through variation.

41:24 So, probably answers that one. Seven? I can take that one. So that's about the eight sites. It says roughly what net proceeds do you hope to receive from selling the eight sites? Well, for the side, we've not published what proceeds we expect to receive. However, I can say for that is that the properties were all revalued in the last couple of years, and we expect the book value that it's currently held out in the books to be recovered on sale. And that's the other indications as well what we've had as well from the advisers we've go into market. We don't expect particularly any gain or loss result from the sale that we expect to complete in the first half of next year. Eight. K. I'll that one. Given the length of time you've held significant cash balances without using it to expand the business, surely, it is time to use it or lose it.

42:22 I think the last five or six years while we've undergone the capital investment program, We've invested heavily into machines, building improvements. We've constructed a new building and facility for our newly established TubeCon business. Always looking for the next opportunity to either grow, enhance, or diversify our business operations. And it's a story moving forward as well. We one of the questions I can see below is about capacity and how we may seek to further increase capacity throughout the group for some some of the smaller companies as well as for Billings and Structures. So we're looking at a number of ideas to increase the footprint and resources in a number of the businesses to allow expansion, which will all follow a similar theme to our strategy of consolidating, outputs and business streams on our current facilities, and expanding that and generating more margin there from. So with the eight proceeds, and our plans to further increase capacity, we plan on putting some of that, what's, we deem as surplus cash to use to expand the business.

43:49 Okay. And the billing to ensure consistent supply of steel for a competitive price, we tender it. We principally, we look at buying directly from a mill as we're able to purchase closer to our cut lengths and so less waste, but we also then challenge our mill partner suppliers with buying from stockholders well. So where we can, we prefer to buy from the mill, but we're mindful of the fact that if we've got to hit delivery dates and the mill rollings don't suit, we'll equally buy from the the largest of steel stockholders.

44:37 11. And I'll turn that one back. Please, could you provide a little color on possible areas for m and a and the potential size of any deals? Well, we are more actively looking at some opportunities, Areas that would be of interest to us are infrastructure related, rail, road, as well as power and power generation and renewable energies. So we see those areas as specialisms, ones that BILLINGTON's can support with some of its activities, but not ones that, we have either the capacity or some of the specialisms in house and therefore be done by acquisition.

45:25 In question to size, well, what looks good? Not always available at the time, but we see acquisitions of 10 or 20% of our current turnover level being reasonable, affordable, and achievable with the resources both in terms of management and financial. Note 12, you've already answered, I think, Trevor. Question 13, Kemenich notes that steel prices have risen by around 25%. That's principally on their input costs of energy. I think energy, they've quoted as saying, has gone up 70% since February.

46:11 And then I think scrap has gone up. Iron ore has been fairly stable and I think they're rising coke prices now. So however, has been down in the market, which has kept the steel price fairly stable of late. What are the opportunities and risks associated for this for 2027, especially in light of the steel hedges the company has in place? We try and hedge our input cost for steel material. The opportunities arise when we're able to hedge at a better price at point of order than we have in the estimate. The risks are that we hedge out major steel prices, but consumables are still at risk. So if we get welding wire and associated consumables go up, then we stand at risk to that as well as some specialist materials that we have to buy as export, but they're fairly minor in the scheme of things.

47:18 14. Okay. I'll take that mark. Cavendish's £5.15 target price is 3.4 times EV, BILNDAR. Do you feel this is a fair reflection of the business, and does that represent good value? Well, we believe we are good value. We believe we're on a growth trajectory moving forward. We have the resources to expand, grow, improve, and deliver well for our clients. So we believe we're good value. We have a prudent policy regarding our financials. We like to hold cash. We like to own our properties.

48:03 We like to be well invested. We will continue to be so. And, yes, we believe we are good value. We are gonna have to terminate some of these questions, I guess, because they're still coming thick and fast. You say the company has a record order book, but seems a bit coy about putting a value on it. Please do so. We never have published that. We give an indication of of of where it sits both in relative to previous years, and we have put a indicative line on there for production hours. Absolutely. There's a question about our pension scheme at number 18. Dave, do you wanna touch on that one? Yes. That one says, what surplus do you expect to receive from the pension buyout?

48:59 And when do you expect this to be received? And have recent bond yield increased increased improved the surplus? As a seam allowance has been hedged at this point. Well, on the last point first, yes, it's been hedged for a good long while now. So there's been no particular change to the surplus. We don't expect great a deal of surplus coming out of the out of the buyout, maybe a few $100, and that would be a bonus really to come out. All we know is that that we don't have to put more money into it. And at this point, we just want to derisk it and buy it out. There's a question there again, about Yate and capacity. I think we've answered that within our previous questions. How much your output goes abroad to Belgium and elsewhere? There's simply the current order book has no export work in it. We have got a history of of working in Belgium as well as other European countries and Scandi countries. So as I said, but at the moment, that doesn't feature in the current order book.

50:04 I'll take 17. Are there any capacity constraints at your facilities? We have always operated a model subsidized by partner subcontractors that allows us to flex workloads when contracts move forwards and backwards. So we, we do supplement our own capacities with that of partner subcontractors. That is the case now and will remain so moving forward. If modular reactors ever get built, how how would you enter the market? Much the same as we enter energy from waste and any other nuclear market. We're one of the major steel suppliers.

50:51 And so obviously, we have an interest and are watching keenly on the progress of SMRs. Okay. And final question. I'll take that. Are the margins achieved in '23, '24 envisaged to return in the coming years, or are these anomalies given the drop in '25? Well, I think it's our secret that the last few years with conflicts, government changes, and price inflation, We've termed the market has been subdued and challenging. That is absolutely the case. We have taken measures to improve the cost base of our business through consolidating on-site.

51:41 Our capital investment program seeks to improve the efficiencies at our facilities to improve the level of margin we are able to return. Do we see very short term the market returning, to the levels a number of years ago? No. It is improving. The prices we are able to achieve at the very large end and the most complex of work where competition is relatively reduced is where we target and need to be, and we're putting all efforts in behind the scenes to make up for as much of a difference in the challenging market as we can. I think that concludes all the questions, and I think we've answered everyone.

52:30 That's great. Thank you for, addressing all these questions that you can, from investors. And perhaps, just before we before we redirect investors to provide you with their feedback, which is particularly important to the company, if I could just ask you for a few closing comments. I'd just simply put, I'd like to thank the investors for their support, the attendees of this webinar, for their support and the interest of Shernan attending today. And I'd encourage you to keep an eye on our progress and growth, and perhaps we will see you again at the at the end of year announcements next year. That's great. Thank you for updating investors today. Can I please ask investors not to close this session as you'll now be redirected to provide your feedback in order that our management team can better understand your views and expectations?

53:23 This will only take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.