eEnergy Group (LSE:EAAS) — Half Year Results for the six months ended 30 June 2026

0:00 Good morning, and welcome to the EENERGY GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time 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 it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and I'd like to hand you over to the management team. John, good morning, sir. Well, good morning, everybody, and, welcome to the EENERGY h one twenty twenty six interim results investor presentation. I'm joined today, on the presentation, by Akash. Akash Harnel, has been in the finance function for just over two years. And following some of the changes, which we'll talk about shortly, Akash has joined the senior leadership team and is now the finance director.

0:52 I have retained, my CFO role as well as acting as the interim CEO role. It's obviously been a very busy, period, and, it's been pretty turbulent. But, actually, we feel that we've we really are now turning the corner, and things are are beginning to look up for us. And I'll be going through some of the details shortly. So on the h one result summary, we had record revenue in the first half of twenty one point eight million. Revenue more than doubled from 10,100,000 the previous year. Adjusted EBITDA was 1,200,000. Again, EBITDA had more than doubled from the first half of twenty one of h one twenty five. Gross margin was lower than we were expecting. We'll come on and come on to the real real reasons for that and explain it.

1:37 Effectively, gross margin was 17% against sort of 30.6% last year and was lower mainly due to the impact of the MACE project. The MACE revenue was around circa 70% of the total first half revenue. We incurred a $0.5500000 pounds worth of unrecoverable MACE contract costs because there was a six month time lag between award and actually start on-site, and it was a government contract pretty much on sort of take it or leave it terms. That's not normal for us. We're normally able to pass on increases in in product prices if there is a delay between award and start on-site. So we end up incurring a hit of 500,000 of of unrecoverable contract costs. And also, we have to remember, we expensed £600,000 of the contract asset, which we booked in the second half of last year. So, effectively, those two items together reduced gross margin by around five percent. So gross margin would have been in the low twenties on a statutory accounts basis had we not had those two items.

2:37 Cash was was disappointing. It was just £600,000. The previous year, we're at 3.1. The cash flow was definitely hampered, by a number of factors principally around the solar PV paperwork compliance. This will come as a as a surprise, to investors, and it was a bit of a surprise to us. But effectively, almost all of the solar PV work on MACE had been completed by the end of June. But unfortunately, we had not kept the paperwork compliance in good enough order, and therefore, we are waiting to invoice. And as as we'll explain later, there was around 4,800,000 of Mace cash, which was yet to be invoiced and collected effectively at the June 30. So this cash will be received in the second half of twenty twenty six. Following my appointment as the interim CEO, we launched a cost saving exercise pretty quickly.

3:31 The impact of this exercise will save an annualized £2,000,000 in costs. There's an anticipated benefit of around £1,000,000 in the second half of this year. So, that work, commenced in June and was effectively completed by the end of June. So, I've been in position now for eleven weeks. There's been a lot of change in the last eleven weeks, and we've been streamlining the SLT and streamlining the operations of the business to reduce costs, and I'll give you some more details on that shortly. As a result of the changes we made, we booked a a first half one off restructuring cost of £500,000. But effectively, we're already seeing the cash and the profit benefit coming through as a result of the changes which we've made. One of the other major changes, which I've implemented is I've reorganized the sales and marketing team by sector because previously, the sales team was set up by postcode, which didn't seem the which wasn't optimized.

4:26 And I've also put it under new leadership and and with one person managing both sales and marketing, where previously we had different people managing both of those functions. And so they're now much, much more coordinated, which is which is great. The pipeline is around 66,000,000. These are investment grade opportunities where we have outbound and inbound comms with the customer, and we're working to try and close those those those opportunities into revenue in the balance of this year and into next year. The contracted revenue for the second half of this year is 5,500,000. So that breaks down as follows. 3,000,000 of signed contracts at the end of June. And in July, we we signed £2,500,000 worth of business. We signed another 100,000 this week, which is great. But effectively, for the balance of the second half, $500,000 of revenue is already secured, and we anticipate that that revenue will be delivered in the second half this year.

5:24 As we sit here today, we continue to trade in line with FY '26 market guidance, which we revised on the twenty second of June of this year, which indicates revenue of around 32,000,000 and adjusted EBITDA of 1,700,000. So just to talk about the cost saving exercise. Effectively, we had a management team of around 10 people often attending meetings regularly on a on a sort of weekly, monthly basis, but I've reduced the team to a team of five. So the management team was effectively, set up really for probably a business around twice the size that we actually are. So we had, used to have an enormous number of people sat in meetings. Even the cleaner, was in the c suite is sort of one of the jokes we we talked about internally. But effectively, we've reduced the management team down to five now.

6:14 So we've created one operational team across all technologies under one chief operating officer. So Chris Paulton now runs lighting and solar, which has brought control over the CV and battery business back into head office as we had with the LED business. So Chris is getting his arms around all the paperwork involved with the MACE project. The solar PV project managers now implement decisions made centrally. Historically, they were they were working more remotely and making decisions, but, actually, we've brought the authority and the decision making back into the head office, which has given us much more control around no PO, no go, which is an instruction we've given out, last year around not fan suppliers not actually doing any work until they've got a a signed purchase order from us. So improving just been strengthening controls, and it's making a a big difference already.

7:06 And, also, we've now got one project manager effectively respond responsible to the customer for each of the, revenue streams which you deliver. What we used to have, and we sort of saw this under May, is on Monday, the solar, project manager would turn up traveling across The UK to arrive at the customer. Then on Wednesday, the LED project manager would turn up traveling across The UK to meet the customer. And then on Friday, when we're talking about batteries or EV installation, another person would turn up. So, effectively, we've we've made this made the delivery of the of our services much more customer centric. So there's one person responsible to the customer for delivery of all of our activity, which massively reduces our cost and simplifies our delivery of the project. It's all going through one person, not three. And, also, the customer views it much more favorably because they've only got to communicate with one person, not not several.

7:57 There was quite a bit of sales and marketing activity, which was outsourced, and I brought it back in house. So this has helped reduce the cost and get us closer to the to the to the to the the key actions and activities that we're doing to try and drive revenue. We've also moved offices in London. So literally, we've moved across the road to a slightly smaller and, a cheaper office, which is great. And we've just taken a much, much tougher stance across all areas of expenditure across the business where we were spending too much money in a number of areas. We've just we've just cut that right back. So the board has reduced from, six to three directors now. So that's also a a cost saving for shareholders. So overall, yes. A 2,000,000 annualized cost saving with an expected benefit of around a million pounds in the second half of this year, and that work is now done. So I've now moved moved away from moving on and away from the cost saving exercise to now making the changes stick as as as part of the senior leadership team and to now focus my efforts on new sales.

8:58 So as I've mentioned before, we've reorganized the sales and marketing team by sector. So effectively, we serve three sectors, education as being our principal markets principal market, and, of course, NHS, and then what we call C and I, which is the commercial industrial space. So historically, the sales team was organized by postcode. And so when people woke up in the postcode, they were responsible for all of those customers in the postcode. Restructuring and reorganizing the sales team by sector makes so much more sense to me, and sales team reacted really positively because they see themselves as education, health care, or c and I. So that makes sense. We've introduced a new sales process, which looks at the probability and the likely timing of converting pipeline opportunities into revenue.

9:43 This has been the Achilles' heel of this business historically. I'm pleased to say that in July, for the first time in a long time, we actually achieved the the sales team delivered the the revenue forecast for July, which is really pleasing. And so one of the changes we've implemented is we're reclassifying a lot of the opportunities into three buckets. Commit, where effectively, we're really sort of 95% confident the customer will sign the contract. Upside, where, yep, there's there's a good opportunity, good chance that they will, but we're we're working to try and drive upside into commits. And then, of course, pipeline, which is we've sent the customer an investment grade proposal typically, and we were then working through that and answering customer questions and trying to progress it into upside and commits. So there are now clear and unambiguous criteria to forecast revenue in each category.

10:31 I look at it every single week now as the interim CEO. I see all the detail, and the sales team are now doing a great job using the information in Salesforce to slice and dice the data in such a way which makes it understandable. I'm looking at the same data in the same way each week. What is not measured is not managed, and I'm really pleased with with how we progressed really quickly, the changes in the sales team, to try and increase the accountability of the business to achieve the commit sales. So we've we've got some mechanisms now to track opportunities through to pipeline into upside into commit. So marketing is now much more focused on lead generation than the brand. I think historically, we did a good job trying to develop the EENERGY brand, but effectively, what I'm really interested in is lead generation.

11:18 And that's where my focus has been probably around 60% of my time now is spent on lead generation and new sales. We're also introducing AI in a number of areas. We've got, AI, which we are taking the data out of Salesforce using AI, which is Clay, effectively to validate and improve and scrub the data to make it better, make it more accurate, which will allow us to improve the targeting of our of our customers as we pursue sales leads, which is really good. We're also using an AI tool around solar desktop work to try and quantify what the savings for customers will be, which is a really quick way of getting to sort of an accurate starting point to have to engage with customers. We can do it live. It literally takes less than sixty seconds to enable us to be able to assess and measure very quickly and provide details to customers for their, solar desktop work.

12:14 I've also introduced a stronger focus on customer and vendor interaction. So one of the things which is really important is that I've insisted that customers if they if I've assisted to the staff. If customers are calling or a vendor's calling us, they take those phone the individuals in the business take those phone calls even if they're in an internal meeting. You know, it's our customers that pay our bills, and we have to work closely with our vendors. So I'm sort of prioritizing, interactions with those two groups. Even if those people are in a meeting with me, which causes some amusement sometimes, people, please step out, take the customer call, take the vendor call, and we'll make sure that we are as responsive as we possibly can be, to our customers and and our vendors. I'll now hand over to, Akash, who'll just quickly run through a summary of the h one twenty six financials.

13:04 H one twenty six saw us achieve our record revenue of 21,800,000 in comparison to the h one twenty five of 10,100,000. For the whole of 2025, we achieved on average 1,600,000 of revenue per month, to get to the 19,000,000 full year number. Whereas for the first six months of this year, it was just over 3,600,000, which contextualizes the improvement. 70% roughly of our revenue related to the MACE contract, which again underpins its strategic importance to the performance of this year. Adjusted EBITDA was 1,200,000, which again was an improvement on the 500,000 compared to the prior year, although we would have liked that number to be higher.

13:50 The gross margin was 17%, compared to the restated h one twenty five margin of 30.6%, And the MAZE project was a reason behind this. We had to go in a very competitive margin in order to win the work, which was one of the factors. But another factor was that there was a six month delay between when we were awarded the contract to start on-site. And in that time, there was a surge in the panel prices, which was circa 500,000,000. Usually, we have provisions in our contracts to deal with this, but because of the tender, the contractual terms were pretty rigid. Therefore, we could not reflect this in our ultimate selling price.

14:37 Moreover, there was a naught 600,000 noncash charge for a contract asset in h one twenty six. This related to costs that we had incurred in q four of twenty five in order to mobilize the MACE project. The amalgamated impact of these two things was that gross margin reduced by circa 5%. So if you were to allow us to add these back, the gross margin actually stood at 22%. Further to this, as a result of our accounting policy change, we can now attribute staff time directly towards department, and this means that we recharge into cost of sales, and the cost in h one was 1,200,000, again, in relation to the higher levels of activity associated with the MACE award.

15:27 This also reduced the statutory margin by a further 5%. The PLC costs held are the same as as last year, which was the 900,000, and the total overheads reduced by 100,000. So they were roughly in line with the prior year, but the cost benefits we should see will really materialize in h two. The closing cash position in h one twenty six was 600,000. And the main reason for this is that 4,800,000 of the MACE cash that we had expected to receive in h one, we will now be receiving in h two. The reason for this is that the construction was very fast paced, and the paperwork could not keep up with the pacing of this.

16:17 But we are working with the Department of Education in order to expedite the process of us accessing this cash. And with it, we'll pay down our trade creditor balance as well as the remaining 500,000 in the Harvard loan. Of the Harvard loan, we did repay 500,000 of it already, and we have extended the term so that the balancing figure will be repaid in November. The cost saving exercise, which was undertaken in h one, which will be a 2,000,000 annualized benefit, we'll really see that impact in FY '27 fully. However, in h two, we will see 1,000,000 of that benefit, and we're already starting to see from a cash perspective the benefits of that starting to materialize.

17:11 Moreover, in h one twenty six, there was a restructuring cost of circa 500,000 in order to progress with that cost saving exercise. Regarding the outlook for the rest of FY twenty six. So there is a £10,200,000, revenue bridge, of which 5,500,000 has already been contracted. We expect to deliver these projects in h two, and therefore, that leaves a 4,700,000 gap, remaining. We have been making positive inroads towards this, and we, are looking forward to hoping to realize this. Thank you, Akash.

17:59 So the all important summary outlook. So we can see that legislation continues to drive revenue growth. And later on in in this presentation, there is in the appendices, we've set out a summary of some of the key legislation that is driving activity in each of our core markets. Later this year, we are seeking to secure a share of GB Energy's three year partnership, which was delivered through MACE this year. So we should remember that the reason why we went in with MACE at at a very competitive margin to secure it is it was the first of what we knew were was likely to be some very sizable, awards from the government into our sector, of which we were one of three delivery partners. So we are positioning ourselves, hopefully, to win a chunk of that work going forwards.

18:45 The government's talking about 500 schools compared to the 250 schools, which the project involved in 2026, of which we secured 65 sites for solar. So we had fifth around £15,000,000 worth of revenue this year. And it wasn't just solar. We ended up with a a a very sizable LED EV charger and battery, portion of installation as well, which is great. So that's exciting, and, we hope to hear later on this year as to as to what the government's plans are exactly and who we will obviously tender for that work, and we will see whether we win it or not. In the NHS, we've already got a couple of trusts taking our sort of private finance EPC contract, which allows the NHS to use third party private sector finance to fund solar and LED installations in the NHS sector.

19:40 So this is a very significant development for us. Redaptive is our sort of key funding partner and are very supportive here, but I think this could be a very, very sizable sector for us going forwards. This this is, it's an area where, obviously, again, structuring the sales team into individual sectors has allowed us to provide greater focus on making sure we we can secure our rightful share of NHS. Longer term, I think the NHS market could actually be, could actually be bigger than education for us because as we sit here today, the government has thus far not been using third party finance. This is a a very significant change in strategy for the government. And as we know, the NHS is quite strapped for cash. The third sector which we are targeting is C and I. And, specifically, we're trying to target owner occupied buildings. And the reason why we're doing that is we then don't have to deal with the complexities around managing the tenant and the landlord. It makes life much easier.

20:38 And, also, there is legislation in 2029 and 2030, which the government have already published, which requires buildings to improve their EPC ratings, which they can do through the implementation of LED and SOLUS. That will make a massive difference. As I mentioned earlier, we're also using AI to drive a number of the to identify the key customer leads, and that's proving quite fruitful, which is great. So sales and marketing has now been reorganized by market sectors we've discussed. We can see already we've got several multimillion pound sales opportunities for solar PV. The issue is, of course, they're binary. You either get them or you don't, which we're chasing those opportunities down, and hopefully, a number of them will close this year. Most likely, we'll see we may not see so much revenue, particularly in the last couple of months of this year because it takes a minimum of sort of two or three months between contract signature and sort of working on-site to be able to develop the revenue from that project. But we'll be updating the market later this year on how we're progressing, and we'll give a trading update, yeah, later this year.

21:41 Towards the end of the first half, EENERGY was appointed to everything estates framework for schools, trusts, and sort of the wider public sector. I think being on frameworks is really important to secure public sector work. We're also on six other major frameworks. There's quite a com complex, convoluted buying process where when you want to secure work in the public sector, you have to have a framework, review your contract, and ensure value for money, etcetera. But we're working with all the six major frameworks on a regular basis. And, obviously, we've had work previously extensively approved for approved to to to progress the contract, which is which means that we've got good relationships with them, and we'll continue to work with them to get business across the line and so we can then deliver it as as quickly as we as we can. But, normally, typically, a framework approval probably adds another up to sort of two or three weeks into the timetable to before we're able to start work.

22:35 And we're working through the 66,000,000 investment grade pipeline. We can then slice and dice it. It's sort of roughly sort of $50.50 between LED and solar, and we're working that through with the sales team to try and progress those from pipeline to upside into commit. So in summary, EENERGY is definitely going in the right direction. You know, we've got a streamlined team of five now. I'm really pleased with how the team's working. Obviously, it's been through a peer the business has been through a period of significant change, but, the team's pulled together. I'm really pleased with how the staff have responded as well. It really feels like we're we're all pulling together and going in the right direction. We strengthened the controls now with sort of one business unit managed by Chris, supported by Akash running finance. So, again, the disciplines that we've had and the the the efficient way in which we have run and we are running the LED business, we're now applying those disciplines to solar, which I think need does need some support as we've seen some evidence by the fact that some of the paperwork around the MACE installations has not kept up to date with all the operational work. We've kind of reenergized the sales and marketing team now under Mark Dolling's leadership as chief sales officer. So all activities are focused by sector.

23:43 It's giving us much greater focus, much greater insight into the sector. We're also now allocating marketing budget by sector spend, which is great, to try and drive activity there. I'm currently spending around 60%, maybe slightly more of my time driving revenue and trying to link, the marketing activities to drive revenue. Because historically, that's always been an area where we've that that that relationship has been quite loose. I want to see it a direct link between the marketing spend and the the lead generation and the conversion of those leads into revenue. The 2,000,000 annualized cost saving exercise is completed. We'll just keep a very, very close eye on costs for the balance of this year. But effectively, there's no more work to to do there. And we're already seeing the benefits coming through in cash flow and p and l now, which is great. Improving cash flow and gross margin are obviously key for us. Second half is really important.

24:33 Margins will definitely improve in the second half because we're through all the MACE work now. There is no more MACE revenue to be recognized in the second half of this year. Where we are today, we continue to trade in line with the FY 'twenty six guidance, which we revised on the twenty second of June of this year, with revenue around GBP 32,000,000 and adjusted EBITDA of 1,700,000. And in summary, I think we're in we're in a good position to take advantage of the opportunities to drive a sustainable growth in shareholder value. So that concludes the presentation today. I'll just hand back to Lily for a second, and then we'll we'll take any questions which have been submitted, which should come up on my screen shortly. Thank you. That's great. Thank you very much for presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab while the company take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via investor dashboard.

25:33 If I could just hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. So, in no particular order, just looking at the first question here, is John Garn expected to move into a permanent CEO role? Well, I've been doing the c e the CEO role and the CFO role. It's been a really busy time. I'm really enjoying the job. Obviously, the board are considering its options, and I'm sure they'll make an announcement, at the appropriate time when they've decided how they want to progress. But, right here, right now, I've got a job to do. I'm getting on with the job. I've got a a fabulous team of people, to help help me manage the business. And it's it's a pretty it's been yes. It's been a turbulent period, but it does feel like we've really turned the corner now. And the group of people we've we've got managing the business and and a loyal workforce, it feels like we're really making progress.

26:24 There's another question here. Okay. Explain why you're only able to deliver 1,700,000 EBITDA on 32,000,000 for '26 when you delivered 2,200,000 on '19 in 2025? And, obviously, you've unlocked £1,000,000 of cost savings. So what's happening here? Okay. There's a couple of things going on here. Firstly, I think it's important to understand there's been a major shift in the revenue mix year on year. So I think shareholders know that the LED margins are typically sort of mid thirties and solar's kind of mid twenties. Historically, back in 2025, we were circa two thirds LED, a third solar. And so one of the things that's happened is that that shift has completely gone the other way. It's now two thirds solar, one third LED in the first half of this year specifically.

27:19 So that's one of the reasons why the margin's low. We obviously know with MACE as well that we, we incurred around sort of 500,000 of additional unbudgeted costs as it due to the factors Akash has explained where effectively the panel prices increased from the January 1 due to action taken by the Chinese government, which, unfortunately, we weren't able to pass on. When we were budgeting, we were expecting more of an LED split than a solar split. So that's another reason why sort of the overall profitability is lower. And I think the other point that is worth mentioning without going back without wishing to go back over all the old ground of the previous accounting adjustments, Shareholders may remember that we originally announced that the adjusted EBITDA for FY '25 was going to be one point circa 1,700,000 was our expectation. And the final number we ended up with was around 2,200,000.

28:09 So the rev adjusted EBITDA actually increased by $500. And the reason for that was there was a lot of accrued revenue, which then was shifted out of 2024 to the beginning of 2025, which then came into the 2025 numbers. So that's an another reason why 2025 was boosted by the 500,000 of the from the accrued revenue of profit in the accrued revenue, which was an adjustment from 2024. I think it's also worth remembering that we moved £700,000 worth of cost, pre contract cost. So it's people cost effectively, internal cost mainly, out of the p and l and put it into the balance sheet because it represented a contract asset, which the auditors have been very happy with. But it represented the work the value of the work which we've done, but where we hadn't actually secured any business. So, again, when I look at 2025, 2025 benefited from that 700,000 shifts. If you take the if you take the, sorry, the 600,000 shift, the contract asset.

29:12 If you take the contract asset out and you back out the 500,000 profit in the accrued revenue, that's 1,100,000 in total. 1,100,000 off the 2.2 then kind of indicates that f y twenty five was probably a lower number of circa 1,100,000. So, yes, there is an increase this year, and, the revenue's gone up. But, obviously, the MACE revenue, which will account for around 50% of the revenue in the full year and around 70% of the revenue in the half year, the MACE contract was at was at a significantly lower margin. And as a result, with sort of two thirds of the revenue materializing in H1 and one third in H2, when we are we will struggle to try and significantly improve the margin because of the weighting impact of the revenue, H1 versus H2. So yes, we expect an increase in margins in the second half. The margins on non MACE business are still performing well, kind of in line with expectation, in line with the guidance that I've given, sort of mid twenties for solar, mid thirties for LED.

30:14 But effectively, I think at current course of speed, we are on we are on track for a second half to deliver second half results in line with expectation. So it's quite a diff quite a long answer to that question. I hope I hope that people can follow the the detail there. So in H2, the revenue forecast is currently 10,800,000 with 5,500,000 pounds contracted. What percentage of H2 forecasts is likely to be LED? So if I look at the 5,500,000 it's roughly sort of fifty fifty split between LED and solar, maybe slightly solar weight, maybe slightly solar weighted. But when I look at the the the balance of the pipeline opportunities, which we'll have to convert to secure that revenue of 10.2 in the balance of h two, it is slightly more solar weighted again. So, if we're able to to swing it back towards LED, then I'd expect that to be a slight slightly margin accretive.

31:08 But as we sit here today, it's a slightly higher weighting for for solar. Okay. Which customer verticals are growing fastest? That's a really interesting question. I I think that when I look at the opportunities, I think NHS has got to be a really good opportunity for us. And I think C and I is at a really low starting point. So if you look at percentage growth, it's difficult to compare. And sort of education, I mean, there are around some 28,000 schools. Market penetration still suggests there's there's loads to go at over for the for for the foreseeable future. I hopefully, we'll be able to provide investors and shareholders with a with an update.

31:58 We'll give you more detail on the individual channels later this year. We're still exploring all the pipeline opportunities. I think that the NHS is is is a great opportunity for us. And once we've got the the first EPC contract and it we've proven the model, and, it's got government support as well. So I think that that could be that could be, probably, as I sit here today, probably the most sizable growth area for the business. Having said that, we are making great strides with the C and I business as well, targeting owner occupied buildings, as a as an opportunity to try and and drive revenue growth. The slide shows PLC costs in H1 at $1,800,000 annual run rate. What is included in that?

32:45 And has that been reduced? How has that been reduced by the $2,000,000 cost reduction? So the PLC costs were about 900,000 in the first half of this year. There will be a reduction on that number in the second half. Obviously, we've lost a number of of people from the c suites, roles, which has made a sizable dent in the cost base. I think that probably around 3 or 400,000 is the is the saving at a PLC level. But there are also savings and most of the savings falling in the business unit, in the in the arena of the business unit as well because we have consolidated a number of roles, project management. We're obviously operating now with one chief operating officer, not two chief operating officers.

33:33 So, yeah, I think so there'd be savings probably the savings are probably split 70% in favor of business units then and the balance in the in the PLC line. But, obviously, we're just keeping a very, very close eye on costs. So yeah. So that's where I I do expect to realize circa 1,000,000 in the second half of this year and 2,000,000 annualized. Here's a question. Is there any risk that the 4,800,000 of MACE cash won't be received once the paperwork is fully provided? I don't believe there is a risk at all that it won't be received. And we're talking to the DOV today, to try and secure and accelerate the the the timing of those payments to us. It's fair to say that the solar business was not in the state which was which it should have been, frankly, and it's disappointing to be in a position where we expected to collect all of that MACE cash before the end of June.

34:27 And in fact, our internal trackers showed that. The trackers which we showed to the customer showed that. But the reality is we're just not. So the team have done a great job getting their arms around exactly what is outstanding, and it's it's a paper paperwork exercise to do the all the relevant planning, the o and m manuals, the building control, etcetera, etcetera, etcetera. There's quite a lot to sign just get signed off and get submitted. You have to provide the as built drawings, not the original drawing. We need to know exactly what was installed and provide the technical drawings for that, and that takes time. So, yeah, I don't think there there isn't a risk around the the quantum coming in. It's only a risk around the timing of that cash being received. We received a big chunk of it already in in July, And, obviously, we're trying to secure the rest as quickly as possible.

35:21 Question here. So you've got a 500,000 profit in h two implies a loss making business with the 1,000,000 cost savings delivered. Why are not able to deliver more than a million pounds? Good question. I think the our focus is obviously trying to drive up margins, particularly in the solar business where I think margins are constrained. I think they're constrained for two reasons. I don't think we've got an ideal fix on the on all the purchase prices of products. But given the increase in volumes, we're trying to now go back and speak to vendors to try and secure better pricing for some of the key components, which will which would make a difference. I think secondly, the competitive market, particularly when we're doing tenders, for example, we're having to compete at very, very keen prices to secure the work. That's particularly the case for solar.

36:08 And obviously, as we have a higher solar proportion of revenue in the second half of this year, that's obviously having a a slight dilutive impact on margins. And obviously, when we look year on year, as I said before, we had last year, LED was 65% and solar was 35. This year, it's flipped around the other way with sort of, solar around 35 and LED, at around sorry. Yeah. Solar at 65 and LED at 35. I think it's also worth also worth pointing out that we we had the this year, as part of the MACE contract, we also been installing EV charges, which is about 1,600,000 of the total circa 50,000,000 of revenue recognized this year on MACE. And margins on EV charges are kind of low low 20. So again, that's slightly margin dilutive versus LED.

36:55 And similarly with batteries, margins on battery installations have been sort of low twenties. So there's definitely further work to do to try and drive up the revenue to help us boost the bottom line and improve our operating leverages. And the changes we've made have definitely helped there, but there's definitely more work to do to drive up and improve and increase the profitability of the business. Look at the next question. If you win further government contracts, will you be putting in protections on costs? I'd love to be able to do that. It's great question. I think the reality is is that the government presents a lot of these contracts, GB Energy, present them as a take it or leave it. And I kind I guess we're in because of the quantum of the contract, and the GB Energy contract could be a very sizable contract, potentially three years' worth of revenue for us if we can secure it.

37:49 So there's very little scope really to negotiate, unfortunately. In all of our contracts, we do have a clause which which talks about if the work is not commenced within three months of the contract signing, then we're allowed to go back to the customer and secure, and have a negotiation in good faith to secure the on cost which we've incurred. But I think, with Mace where Mace was concerned, we we unfortunately couldn't do that. We did factor in a small contingency, by the way, but we kind of burnt through that pretty quickly, with some of the panel cost increases we saw after the Chinese government increased the duty on panel prices coming out of China from the first of January this year. Let me have a look at the other questions. Is there any thought of clearing out the share the share overhang from the holders who are no longer with the company?

38:39 Look. Investors make their own decisions. It's it's not for me to determine what investors wish to do. So I I will just let the market decide, how investors will decide how they how they want to play that going forward. It's not for me to answer that one. So in terms of cash going forwards, after paying trade debt as a Harwood loan, are we okay for cash, or could there be another lead another need for a loan from Harvard, or any other large MACE contract wins going forward? So I think look. Once we've collected the cash from MACE, we can repay the the the balance of the Harvard loan. 500,000 of the loan was extended from the end of July to the end of November for repayment. So that that's great. We've got a very supportive shareholder. The other thing to note is with the MACE contract, we're paid on twenty eight days from date of invoice.

39:29 This is a very significant change, and, obviously, it's one of the reasons why our working capital if you look at the net working capital year on year, working capital should be in credit for this business because we should always be all of our projects should overall be self funding. So we should be be able to collect the cash, particularly on LED projects, in advance having to settle all of the creditors on the hardware, etcetera. So it should be cash positive. However, on the MACE contract, the the the credit terms are horrible. They're twenty eight days from date of invoice. And this again, it's a sort of take it or leave it. I think we've learned a lot over the last over the last sort of twelve months, particularly around management of networking capital. We've had really supportive creditors around hardware and some of the contractor creditors as well, which have been terrific.

40:19 But once the cash comes in from May, we'll obviously be bringing creditors up to date and repaying the Harvard loan. And we're kind of going back to a sort of normal run rate of of working capital where effectively, once we raise an invoice, we get paid within seven days. So I'm hoping cash flow should improve going forwards as well. So if we win the then if if we win another piece of Mace business, we'll have to assess it. It won't be it may not be MACE business. Would probably be GB Energy because they're the awarding company. We'll to assess it at that point in time. But as we sit here today, there are no plans for that. Can we have an explanation of what went wrong with the NatWest facility? Well, the NatWest facility was put in place by the previous management team back in I think it was around March, April 2024 at a cost of 3 or £400,000 on professional fees and legal fees. And on the face of it, it was a really good facility because it allowed EENERGY to secure finance from that west at really competitive interest rates.

41:21 I'm talking sort of six and a half percent. So it's a really, really low interest rate. The only problem was is that EENERGY had to leave in the deal 15% of the of the the value of the installation revenue in the contract. And when you're short of cash, as EENERGY was historically, you haven't got the cash flow to be able to do it. So when I joined, one of the first things I observed was that NatWest facility is actually unaffordable, and therefore, it's unusable. And so one of the first things, we did, we we we approached Redaptive to see whether they would would be willing to provide the funding to us, and they offered us a 100,000,000, facility, which we've been using ever since, which has been great. And effectively, Redaptive purchased if you remember last year, they purchased the NatWest facility from us. So it's just not it's just not, as a facility, great great interest rate, but the cost is just far too high in terms of the cash flow. Obviously, energy would have to leave that money in, and then we recover our investment plus interest over the course of the contract for seven to ten years. Well, I mean, we'd we'd need an enormous balance sheet to be able to utilize the full 40,000,000 if circa 15% of the of the deals which we secure, we've got to leave that money in for seven to ten years. So it just wasn't workable. And as a result, we we terminated this year, which is helpful.

42:42 We save around £10,000 of nonutilization fees a month, which will be offset by the interest cost broadly on the hardwood loan. So that's that's why that's why we terminated the NatWest facility. And as a result, yes, we wrote off the the balance of the the fees. It's around 300,000 still in the balance sheet because it was terminated. That was part of a noncash charge in the interest line in our results. Another question here. Is the Streamline team still able to be geared to deliver significant growth in future revenue, or would there be a need for additional hiring? So excellent question. I think that we know where the bottlenecks in this business are, and we could, if we won g the next contract with GB Energy, scale up much faster by outsourcing some of those key activities and managing and tightly managing those outsourced resources.

43:38 We know what they are, but I think any any additional cost will be justified by additional profit on those contracts. I think I'm really comfortable with the size of the team where we are today, bearing in mind, this team, I believe, as they're constructed today, is is sufficient to be able to deliver twenty twenty one point eight million of revenue, which is what we did in the first half. So that kind of implies we've got a a business a cost base that could deliver circa 40,000,000 of annualized revenue. So, you know, a lot of the savings we've made have been in the senior leadership of the team as well. So it's not just the operations side, which we have we've trimmed the cost base and streamlined the number of roles. I think putting everything under one chief operating officer makes complete sense. I wish we'd done it previously, but we are we are where we are. We've done it now, and it's made a massive difference to how the team operates, which is great.

44:33 Okay. I think I think we've answered all of the questions. So thank you very much, everybody, for attending today. I really appreciate it. On behalf of Akash and I, I hope we've answered all the questions that you've raised. And if you've got any other questions, then, please feel free to submit them, through, to to, this website. And, obviously, they'll be forwarded on to us. We'll try and answer them as best as we can. I'll hand back to Lily. Thank you. Thank you. That's great. Thank you for updating investors today. Can I please ask investors not to close the session and should now be automatically 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, 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 morning to you all.