Cohort (LSE:CHRT) — Investor Presentation

0:01 Good morning and welcome to the Cohort PLC Investor Presentation. Throughout this quarter presentation, will be in listen only mode. Questions are encouraged and they can be submitted anytime just by using the Q and A tab situated in the right corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can view all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you to chief chief executive, Andy Thomas. Good morning to you, sir.

0:31 Good morning, and thank you very much, Alessandro. Yeah. As as Alessandro mentioned, I'm Andy Thomas. I'm the chief executive at COHORT PLC. It's great to have this opportunity to talk you through who we are, what we do, and I'll also cover our most recent set of results, which are for the half year that ended on the thirty first of October last year. So to begin, who are we, and how do we provide value for investors? COHORT's a group of seven businesses providing technology based defense products and services to The UK and to its allies around the world. We are especially focused on maritime and land systems, but we also do do some work in the airborne field. The business model aims to maximize the autonomy and independence of our businesses, consistent with good financial and regulatory governance.

1:25 And that means that decisions can be taken quickly and, very importantly, close to the customer. The model maximizes agility and innovation. And at the same time, we support our businesses with a strong balance sheet and the market reach that we have as a wider group. And we have no layer of overhead between our small but experienced headquarters team and the operational management, and that helps give us a real cost advantage as well. We've got a strong record of growth both organically and by acquisition since we IPO ed back in 2006. And in November, we announced the acquisition of our seventh business, EM Solutions, which we expect to push that growth onto the next stage. And I'll say more about that in a moment. Our organic growth has accelerated since 2022, when the Russian invasion of Ukraine shocked, really, NATO Europe into a step change in defense spending.

2:17 And, of course, we're seeing strong pressure from the new American administration to increase that further now. And other worldwide tensions are also contributing to a strengthening demand picture, which I'll say a little more about in a moment or two. Another result of the geopolitical position is a strong pipeline of future opportunities. I'll give some examples of those as well later in the presentation. But the ultimate hard evidence of growing demand is our growing order book. And as you'll see in a few moments, it hit a new record at the end of the first half, and it's had a further significant boost with the EM Solutions acquisition. That acquisition was funded using a combination of our existing cash resources, some bank debt, and also support from our investors in the form of a £40,000,000 placing.

3:03 And the result of that is that we've maintained a very strong balance sheet with low gearing, and that gives our customers confidence in awarding us substantial contracts. And it also allows us to invest in product development, in capacity building, and potentially in further acquisitions as well. And finally, I should mention our progressive dividend policy. We've grown the dividend every year since our IPO and by 10% in each of the last three years. And, of course, that's valuable income for our shareholders. But I think just as importantly, it's a signal that we're not just developing interesting technology, but we're also a successful and cash generative business. A word or two on our development as a business.

3:50 As I said, we IPO ed on AIM in 2006. And since then, we've made a number of acquisitions as well as some divestments to ensure that we remain focused on our core markets. And some of the most important transactions were the acquisition of Mass in 2006, SEA in 2007, MCL in 2014, EID in 2016, and Elac Sonar in 2020. And I'll say a little more about each of those businesses in just a moment. So by the end of twenty twenty four, we developed into a group of six businesses with revenue of more than £200,000,000 and adjusted operating profit of over £20,000,000. And that compares to adjusted operating profit of just £3,000,000 on revenue of 34,000,000 in our first full year on the market.

4:37 And over that period, I should say that we've been very, very mean with issuing a new equity. And apart from employee share schemes, we issued no new shares at all from 2008 through the last year, and we funded all of the acquisitions in that period through a combination of operating cash and bank debt. But late last year, as I mentioned, we announced the acquisition of EM Solutions. And to fund that, we carried out a £40,000,000 equity placing in November. So another word then about that acquisition. It's a very significant transaction for us. It'll have a big impact on our product range, on our technological capability, our geographical footprint, and our financial performance as well. EM Solutions provides highly capable satellite communications terminals, primarily for naval surface ships, And that is a a a challenging technology to develop.

5:33 The terminals need to stay locked onto satellites. And in the case of low and medium earth orbit satellites, those will be moving across the horizon. As the ship, you know, potentially rolls and pitches really quite significantly in heavy seas. Demand for satellite communications is growing, particularly for advanced navies like those in Australia and the NATO countries. This is the first time with this acquisition that we've been involved in this technology, and so it gives us access to an important new stream of growing revenue. Over time, the balance of our output as a group has moved more and more towards the maritime market, And this acquisition adds another important family of naval products to our portfolio, and that enables us to offer packages of systems to ship builders and integrators, which is an efficient way to offer our products into the market.

6:28 Very importantly, bringing EM Solutions into the group will have geography based advantages in both directions. The group's position as a domestic supplier in three NATO nations and our strong export relationships around the world will help EM solutions in markets that have become very important to them. And similarly for the existing group, Australia's close relations with The UK and its growing defense budget make it an increasingly important customer. And having a footprint there, will greatly enhance our ability to access that market. Now we recently announced that the transaction completed at the end of January, and we're already well into the process integrating this great new member, of the group.

7:16 So EM Solutions is clearly an exciting development, but I should also let you know a little about our other businesses. We've got two reporting divisions, communications and intelligence and sensors and effectors. Taking the communications and intelligence division first. EID is our Portuguese business. It's based just outside Lisbon, and they focus on communications management for naval surface ships and also communications for land vehicles and deployed army headquarters as well as soldier radios as well. Our business, MASS, provides highly specialized services, including electronic warfare operation support, cyber defense, and also large scale simulation based training for The UK's strategic command.

8:03 Our business, MCL, works with overseas and UK partners to supply a wide range of communications and intelligence equipment to The UK, and that's especially important for urgent operation requirements, which, as you can imagine, there are quite a large number of at the moment. In our other division, sensors and effectors, CHESS provides optical tracking, surveillance, and weapon control control system for land and sea applications, and those are especially important for countering the threat from drones. ELAC Zonar, based in Kiel in Northern Germany, is a world leading provider of sonars for ships and submarines. And our business SEA provides systems for protecting ships from submarine and missile threats as well as communications for the Royal Navy submarines.

8:53 And it was SEA that won our largest ever contract last year valued at a £135,000,000 for their product known as Ancilia, which is designed to protect the the Royal Navy's surface ships against the threat from modern hypersonic anti ship missiles. In total, we've got something over 1,500 employees, a very large proportion of whom are highly qualified engineers, scientists, and mathematicians. Overall, we offer a complementary and extensive range of technology based products and services for defense customers worldwide.

9:32 So that's some background about the business and what we do and how we do it. And now for a bit about how well this has all worked in practice, and in particular, in our most recent reporting period. And the summary is that it was a good first half for us, much stronger than the same period in the preceding year. Revenue and operating profit, as you could see, were up materially. And once again, we reported a new record order book. Our prospects look good. We expect to continue that growth into the full year and beyond. It was a good period for new orders, and those are, of course, the best leading indicator for future growth. Order intake significantly exceeded the revenue we recognized. So the total order book has grown to over £540,000,000 at the period end.

10:19 And that order book covers more than 99% effectively all of the consensus forecast of our revenue for the year, and it will be generating revenue for us well into the 2030s. Finally, our operating cash flow is very strong, significantly exceeding profit and helping to push up our net cash position to nearly £38,000,000. And I should emphasize that that's before the placing and the acquisition. And against that positive background, the board has again increased the interim dividend by more than 10% compared to last year. So a bit more about the roots of of the demand for our products and why it is that I say the demand for our products and services is growing.

11:04 The two main driving forces for demand in defense equipment worldwide are the continuing conflict in Ukraine and the influence of growing Chinese assertiveness and indeed aggressiveness from the Indian Ocean to Australasia. And adding to that mix is the deeper instability in The Middle East as well. In Central Europe, the conflict there has driven demand directly as the NATO countries seek to help Ukraine resist the Russian invasion. And, also, many of the lessons being learned from Ukraine are particularly relevant to us. So the increasing importance of electronic warfare, the need to counter drones of all kinds, the need for accurate and timely battlefield intelligence have all been emphasized by the the conflict in Ukraine. All of those have had a direct positive effect on our orders and prospects.

11:57 There's been a lot of talk recently with the Trump plan for a ceasefire and hopefully peace in Ukraine, And that's something that we should all welcome if it stops what really is an appalling waste of thousands of lives every week in that conflict. But whether or not that Trump initiative is successful, in the end, we can be confident that there will be a ceasefire in Ukraine. However, absent a complete defeat and occupation of Russia, which would seem to be on the, extremely unlikely end of the possible spectrum of outcomes, that will not mean a reversal of the increases in defense spending that we've seen across NATO Europe. The persistent Russian threat and pressure from a much more transactional US presidency will be powerful forces for sustained high levels of spending in Europe.

12:49 Unfortunately, the days of the nineteen nineties peace dividend are are well behind us now. Chinese aggression and investment in its defense forces has also had an impact on our prospects right across the Indo Pacific region. The AUKUS alliance and the new program to provide nuclear submarines for Australia is one example, but we've also seen strong demand from countries including Thailand, Indonesia, The Fill and The Philippines as well, really across that region. Japan remains committed to a doubling of its historic level of defense spending up to 2% of its GDP by 2027. And and Japan has joined the Anglo Italian next generation combat aircraft project. And that bodes well, I think, for the opening up to European suppliers of a market that's historically been dominated by The United States.

13:41 As well as export markets, we've seen similar effects in our domestic markets. We expect to see the results of The UK strategic defense review in the second quarter of the year. But the government has already committed to increasing defense spending to 2.5% of GDP, and there is already talk about the potential for increasing that level of spending further. In Germany, we can see the impact of the step change in defense spending that's taking place, and we're seeing that with increased local orders and opportunities for our German business, EVAC. And even in Portugal, one of the NATO members that still fall short of the 2% target, we saw some long awaited orders arriving in 2024 and are very optimistic that there are more to come. I should emphasize that we're investing to respond to these changes in demand. We're increasing capacity at our businesses, CHESS and SEA, by expanding and reorganizing our facilities.

14:37 And ELAT will be moving into a brand new custom built facility next autumn. And as our revenues continue to grow as a result of this strong demand, we expect to see a gradual improvement in margin as well as our overheads remain relatively constant with great demand. I mentioned that we continue to see good opportunities beyond the current order book, and I wanted to share a few of them with you. I should say that when when producing these slides, we have to have to move quite quickly as it turns out. Some of the opportunities I'm I'm about to talk about have, in fact, already been turned into orders. And that's that's true of the of the very first bullet point there because at at ELAC, we have just received an order for the sonar of the fourth of the four new Italian submarine sonar suites that we've been providing.

15:28 And together with some some other changes to that contract, that brings the total value of that program up to over a €100,000,000. And we're now starting discussions about two further possible submarines as well as upgrades to some in service vessels. ELAC's also in discussion with the German Navy about upgrades to anti submarine sonars on some of its surface ships, and that will be a really important step forward for us with our domestic customer in Germany as most of VNAG's recent orders have been with export customers. ERD EID, the Portuguese business, won some large orders orders earlier in the year, and they're in discussion with the Portuguese Navy to provide communication systems for its new fleet of six offshore patrol patrol vessels, and it sees some promising naval export opportunities through a growing partnership with the Dutch shipyard, Dahmer.

16:21 And following some initial success in Asia, SEA has multiple opportunities to provide its very specialized CrateSense product, which is thin line towed array sonar system to export customers. And it's also in discussions with BAE Systems and others about contributing to the next generation of Britain and Australia's nuclear submarines. And SCA has recently announced a partnership with the Danish company, Terma, to offer a complete anti missile system for naval ships based on the ancillary product that I mentioned earlier. MCL sees many large potential prospects from urgent operational requirements, most of which are too sensitive to go into any detail about.

17:07 And MAS, again, sort of overtaken by MAS, has actually just won a two year extension to its long term contract to design and run large scale military exercises for The UK's strategic command known as JCARST. And it also has a growing relationship with a multinational defense alliance to provide digital secure communications. Our business, CHESS, sees some really good short term opportunities for its optical tracking system for countering drones, and it's doing that through a very successful partnership with Rheinmetall, and it's building other partnerships in that area as well. And finally, our newest business, EM Solutions, has a really promising list of opportunities in Australia, Europe, and East Asia as well.

17:53 And it's shortly about to begin deliveries covering almost the entirety of the Australian surface fleet with a lot more in the pipeline. Now these are all prospects rather than firm orders, and the value and the timing and the probability of winning all of these is uncertain. But what I hope this does is to paint a picture of the strong demand and opportunity that we're seeing at the moment for the group. Now now I've talked in broad terms about markets and opportunities, and this slide shows the the tangible results of that demand picture by splitting out the the order book as at the October 31. And, of course, as as it was at that particular moment in time, they exclude the contribution from EM Solutions.

18:40 We're working on the completion accounts now for EM Solutions, and we'll make public the substantial contribution to our order book that that that will make at the appropriate moment. But at over £540,000,000, that period end order book was stronger than ever before. It includes a substantial element that will directly feed into revenue in this current year and the next. But it will it also includes over £280,000,000 of order cover for 2026, '27 and beyond, guaranteeing a solid flow of revenue well into the next decade. As you can see from the color coding, the larger part of our order book continues to sit with the sensors and effectors division. I expect that to remain the case, but the addition of EM solutions into communications and intelligence will redress the balance between the two to some extent.

19:38 I wanted to say a brief word about our shareholder register. Our largest shareholder is one of the founders of the business, Stanley Carter, who is a long term holder, And our chairman, Nick Prest, also remains a significant shareholder. But the backbone of our shareholding is a highly reputable list of institutions, and the largest are Schroders, Lion Trust, and Canaccord Genuity. But other long term holders include Citi Asset Management, Herald, and Unicorn as well. It was really good to see some new institutions coming in on our recent placing, and those included BlackRock, Lazards, and Royal London as well.

20:21 And that's about all I wanted to say before giving you an opportunity for questions. It's been a pleasing period in terms of performance. It sets us up well for the year as a whole. And as I mentioned, the consequence of that is that we've been able to increase our interim dividend again by 10%. A point that I've tried to make strongly is that the acquisition of EM Solutions will take COHORT to the next stage of its development. It's a good deal financially. We expect that it will be accretive in the first full year of EM Solutions being part of the group. It'll broaden our product range, our technical capacity, and our geographical footprint in a very beneficial way. The strong balance sheet that we've retained give us the flexibility to invest in facilities and product development, and if more good ones emerge, in value adding acquisitions as well.

21:13 And finally, I'll draw your attention again to that large order book, that record order book, and the excellent pipeline of further opportunities ahead. So thank you again for your attention this morning. If you have any questions, I will do my best to answer them in the next few minutes. Andy, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions and you can do so just by using the Q and A tab that's situated on the top right hand corner of your screen. This point, I'd like to head straight into the Q and A with the first question here, which reads as follows. How do you see increases in NATO spending impacting the cohort business in the near to medium term? Well, we do anticipate that there will be increases in spending in NATO Europe, I would expect that that will have a positive impact on our opportunities and revenue and profitability in the short to medium term is the quick answer of that perhaps unsurprisingly.

22:14 As I mentioned earlier, I think a lot of the things that are I mean, growing expenditure is one thing. But, specifically, I think the lessons being learned from the conflict in Ukraine is is driving expenditure into particular areas where we can provide very good solutions. It's also worth mentioning that our strong maritime capabilities are very well suited to nations that are responding to the aggressiveness and assertiveness of China in the South China Sea and the Indo Pacific more widely. I think our maritime systems like Ancylia that I mentioned, like our sonars sonar systems are well suited to navies who are operating in those areas and want to push back against that aggressive posture.

23:01 That's great. Turning to the next question. Is the current UK defense review having any impact on delivery of the current order book or unexpected future orders? Well, we're we're we're waiting expectantly to see the results of the defense review, which I expect will be released at least in part towards the middle of this year, the second quarter of the year. There's lots of gossip about what it it might produce. I don't think it would be a surprise if there was a greater focus on the North Atlantic for The UK's defense posture. And that, I think, is something that that suits us as a significant

23:41 provider of equipment into the navy. But we'll have to wait and see what the results of the strategic defense review are. What I would say is it's certainly being led by a very, very expert team of well reputed individuals. So I'm I'm my my expectation would be that it would be a good piece of work. Is it affecting us at the moment? Well, because the MOD is in the midst of a defense review, that has made it pause some decision making on future projects. That hasn't affected us in a material way. Mostly, it's been in terms of some areas of research and innovation type funding, which have been put on pause awaiting the results of that review. But as you've seen from our our our results, let's say that that hasn't really affected our growth trajectory at all.

24:30 Thank you, Andy. Next question we we've had from an investor. They've asked what the biggest growth opportunities for the company are in the current market environment. Well, as as I've mentioned, we really do see quite a few. I think an increase in in NATO spending is a very substantial opportunity. But, also, I I think some of our products, which are just starting to come into service, really offer very good prospects for growth in the coming years. I'll include in that our product, Ancilia, the missile defense system for surface ships. SEA's Crate Sense product, which is a specialist towed array sonar. It's very light. Towed array sonar is is like a sort of hose pipe that you pull behind a ship or a submarine.

25:18 Historically, they've been very large hose pipes indeed, you know, weighing well into the tons and needing a very large winch to deploy. SEA's product is much lighter and smaller and suitable for small ships and and can give a real antisubmarine capability, the kind of lightweight ship that you see operating typically around the South China Sea. So we see strong demand from that driven by what China is doing in in terms of increasing its submarine fleet. I've mentioned CHESS' capability for for countering drones, which as we've seen in Ukraine is absolutely vital in any modern warfighting or or indeed potentially hybrid warfare scenario. And I'll mention the really capable sonar systems, which our business ELAC sonar in in Kiel is pushing new ground in. Those are some examples, I think, of where we see really good growth opportunities.

26:09 I mentioned satellite communications and EM solutions too. That's great. Moving to the next question. How much of next year's revenue is already covered by existing contracts? Well, just clicking back a few slides, if I can do that. Yeah. You can see there, and I can see there if I take my glasses off, that we were at for we were at over 130,000,000 for the second half of the sorry, for next year at the end of the first half. And that's grown significantly since. I mean, obviously, we'll make our order book public. I expect we'll do so when we put out a trading statement in advance of our full year results. But as you can imagine, that's grown significantly since then.

26:58 And also, it'll it'll grow very significantly as a result of EM Solutions becoming part of the group. I can't I mean, I don't actually have the precise figures to hand at the moment. We'll just say we'll go public with those at the appropriate moment. Thank Thank you very much, Andy. The next question, changing gears slightly, moving on to to the topic of m and a. The investors asked, what types of business businesses or technologies are you most interested in acquiring? Well, I think our criteria for acquisitions are that firstly, I mean, it needs to be in defense technology. I mean, that's what we know about. That that's what we're good at, and that's what we understand. So, you know, we're not about to to move out of that into other areas. But we'll be looking for technologies where there is clear access to growth opportunities, to growing markets.

27:52 Defense as as a whole is growing at the moment, but it's a large and diverse market. And even when it's growing, yeah, some areas are static or in retreat. And even when it's shrinking, which it has done, some areas are in growth. So it's finding those growth niches. And some kind of sustainable competitive advantage is really important. So we're not fighting off, you know, multiple other suppliers with very similar products purely on the basis of price. So those are our main criteria. We're particularly interested in maritime systems because I see, you know, particular growth opportunities in that area, especially around the Indo Pacific, but also areas where technologies have been accentuated by experience from conflicts in Europe and where European demand is likely to grow. So I'm I'm sorry that's not a precise answer on specific technologies, but it's kinda hard to do that.

28:45 We are very selective in our our approach to acquisitions, I would say. And we're not like some other companies that will have a performance indicator of doing a certain number per year. We'll only do so when we see the opportunity to add real value for shareholders and potentially from our other businesses as well in doing that. Thank you, Andy. It's very helpful. Turning to the next question. Do you believe the other businesses in the group will have greater access to the Australian market as a result of the acquisition of EM Solutions? Yes. I do. I think when we announced the the acquisition, I went to Australia, obviously, to talk to the employees and the management of of the business, but also to talk to government and defense representatives out there. And the head of the Australian Defense Procurement Organization welcomed us as part of the sovereign Australian defense industry.

29:45 And and indeed, that's very much how we're seen over there. Australia is an an interesting geographical position. It's obviously isolated from its main allies by many thousands of miles. And so the ability to provide support to Australia locally and quickly, which is very hard to do from 10,000 miles away, is really important. Having a physical footprint where we can where we can make things and support things, you know, really adds value as far as the as the market is concerned. Definitely. Moving to the next question here. You talk about seven different businesses now within the group. How do you maximize synergies? Well, that's a that's a very interesting question.

30:33 I said right at the beginning that our business model really emphasizes autonomy and independence. And the reason for that is that it means that those businesses can take decisions fast and take them take them close to the customer. So we deliberately forego the approach that some, for example, large integrated prime contractors can take where they have a sort of strategic department putting together those businesses and aligning them in particular ways to provide vertically integrated solutions for customers. We don't we don't try and do that. But, actually, we do find that there is quite a bit of synergy between our businesses. And our managing directors meet together on a quarterly basis with me and some members of my senior team to talk about what it is that we're doing, expose the opportunities that we see, both technologically and in terms of market, and try and identify opportunities when we can work together. And when it's in the economic to the economic benefit of the group as a whole, then we do cooperate very closely.

31:33 Good examples of that are the Ancilia system, which SEA is providing, and that incorporates a very significant piece of value from our business, CHEST Technologies, which actually provides sort of the base moving platform on on which the missile or the decoy launcher rather sits. Also, our businesses SCA and Elon Sonar are working very closely together on providing particular expertise into into areas of Sonar which each are working on. So there's quite a lot of examples of where our businesses do work together. But we always insist that that should be done on an arm's length commercially sound basis. So where it's not to the detriment of one business to support one of the others.

32:18 And I think that's very, very important. If it's better to work with a partner outside the group and that provides a better opportunity of winning a program, then we'd always prefer to do that rather than, you know, cooperate internally at the risk of losing that program. So so I have a very strong policy in in respect of that approach. Thank you for providing color there. The next question is really around sales and marketing. And how does the company attract new business, and how does your sales and marketing function operate broadly speaking? Well, the the answer is, unsurprisingly, being close to our customers. And we engage with them regular face to face meetings, both with our domestic customers, obviously, where it's quite easy, but we also visit customers around the world.

33:04 And we do that through shows and exhibitions worldwide. One good example is the biennial DSEI show, Defense Systems and Equipment International, which takes place here in London. There's a version of that, which I'll be going to in a few months' time in in Japan as well. There are big shows in Australia and really around the world. So those provide great opportunities to meet our customer, to understand their needs, and and to explain how we can help them. And in turn, that means that when they have a particular need, they will contact us either directly or the contractors that they select to provide ships, submarines, land vehicles, and so on will contract will contact us to look at what we can provide for them. So that's that's the way that the basic process operates.

33:54 Typically, it's it's through a tender mechanism often competitively or in some cases where we've got products that are not easily matched by others on a single source basis. Thank you very much. And the final question we've got here for the moment is in terms of US revenue exposure, it is currently small. Do you expect this to stay at this level? And how would increased US defense spending impact cohort could you be a supplier to The US ultimately? Yeah. That's that's an interesting one. It would be lovely to do that. I mean, The US is clearly the biggest market in the world for defense equipment. But it's also a very national market. The I mean, The US has taken the view that they want to keep their defense industry onshore to a very to a very large extent.

34:41 We do supply subsystems and material into The US in small ways. But as the question is rightly picked out, it's a very small proportion of our revenue because it's a very hard to access market. Now some UK companies have have, you know, spotted opportunities and been able to to develop a real niche in The US, but that really depends on a combination of having a particularly strong product that isn't easily replicated by the, you know, very strong domestic US defense industry. And and also, putting it bluntly, something's below the horizon of the of the the large US competitor companies. And so there are not many that that fall into that into that particular niche. So and also, I I should say, making acquisitions in The US, which is clearly one way of accessing that market, is not an easy thing to do because the security restrictions on passing information between a US subsidiary and its non US parent are are very stringent and can make it much more difficult working with a subsidiary than working with just a commercial partner in The US. So there are some really quite big barriers to overcome, but we are always on the lookout for for ways that we might be able to do so.

35:55 Perfect. And we thank you very much for answering those questions from investors. Of course, the company can review all the questions that have been submitted today, and we will publish those responses out on the investor meet company platform. But just before redirecting investors to provide you with their feedback, it's particularly important to yourself and the company. Andy, could I just ask you for a few closing comments? Yeah. Well, thank you very much indeed, Alessandro, for this opportunity today. I think I'll I'll draw people's attention to the the EM Solutions acquisition, the strong demand picture that we're seeing, and, you know, that that being a reflection of the very difficult and troubled times in which we live geopolitically, and the manifestation of that in our in our large and growing order book. You know, we've we've had a successful run over really quite a few years. We've grown a lot organically and through acquisitions since our IPO, and we see very strong opportunities to continue that accelerated growth over the years ahead.

36:55 Thank you to everyone for your attention this morning. Much appreciated. Andy, thank you once again for updating investors today. Could I please ask investors not to close the session as you now be redirected 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 some should be greatly valued by company. On behalf of the management team of COHORT PLC, we'd like to thank you for attending today's presentation, and good morning to you all.