Hargreaves Services (LSE:HSP) — Capital Markets Day

0:00 It's great to see some familiar faces here, and I'd like to welcome in particular those new friends that we've got who are spending the time with us today. And not forgetting all the folks who are online, so thank you for making the effort to do that too. So the team are here today. What we're going to do is concentrate on two particular areas of our business, where we've got some new developments to run through with you, and where we feel strongly we can grow and develop shareholder value, which is what we're all about. So those of you who are familiar with the group will not need a reminder that we're organized effectively into three really clear pillars.

0:46 We have a services business. We have a land business, and we're deliberately not talking about the land business today. We have no particular surprises there. The land business continues to develop positively. And then we've got the HRMS business, which is our activity in Germany, where we do have some new news. So this structure has been in place for a number of years and is really clear cut and is the basis on which we operate. We want to and will continue to grow the services business. We'll talk further about that through the accumulation of some high quality, robust contractual positions in our target markets. And we do have a little bit of a tailwind in that area, which we'll talk to.

1:33 As I've said, the land business is in good shape. And the game plan there over a period of time is to realize capital from that land portfolio, including, and we've recently announced one disposal, the renewable energy land assets. The game plan in Germany is to maximize the returns from our German joint venture and create a valuable and there I say unique asset, more of that later. So we're making good progress on those three strategic aims, including not make too fine a point of it, our presence at Sizwell and the recent sale of the first tranche of the energy and assets that I've just referred to and continuing cash receipts from our German business, HRMS, which support in no small measure of the group dividend.

2:27 So today, we're gonna focus, as I've said, on the services business unit and very interesting opportunity emerging within the world of steel waste recycling. I know it's hard to believe there are exciting things emerging in the steel waste recycling world, but believe me, there are. So the last five years have seen substantial growth in our services offering with profit growing at an annual rate of 30% over that period. Simon and the team will be building on that forward momentum, highlighting the business model that's allowed us to be successful, as well as the scale of the opportunities that lie in front of us and why we're well positioned. So as I did say, we have a little bit of a tailwind in that area. Then Gordon will present on two key areas.

3:13 Firstly, he's got to give a more in-depth understanding of the steel waste recycling process at DK Recycling in Duisburg. And then he's going to present a new opportunity to recover and recycle zinc oxide. This has been developed in house building on the group's expertise, innovation and commitment to minimising industrial waste. There's going to be opportunities for questions as my colleague has just said, at the end of each section. So just hold your questions until the end of each section. We're also taking questions online, think, And we'll are we gonna manage them at the end of each section as well? We'll manage them at the end if we've got sufficient time. Okay. So so that's the game plan. Today, I'm gonna introduce Simon, who's gonna take over at this point.

4:01 And I forgot to press the button. So there it is. Thank you. Thank you, Roger. And good morning to everybody. Services strategy. So first of all, really pleased to be presenting to you all here today. First time I've presented to you as an audience. Six months in the business so far. So I just want to introduce who's going to be presenting today: myself, Chief Operations Officer of HARGREAVES SERVICES PLC Neil Fraser, who's joining us. He's the MD of our Blackwells business. He's been working through Lower Thames Crossing, Siswell and HS2 and is a very busy gentleman, glad he's with us today. And Sean Hager, who looks after the business that services a number of our core customers in a number of the sectors that we operate in energy, waste, water, environmental and industrials.

5:07 As you can see by our photos, lots of experience between the three of us, about a century of experience collectively that we have. We have all been in this sector from very early in our lives. And we've been working through what, for me personally and for other colleagues, has been a decarbonisation ourselves. When I started in the industry, I started building gas plants and operating oil and gas assets. And we've been on that journey with our customers over the last thirty years. And in front of us, we see, in my mind, a really exciting future. It's the first time in a generation, I think, for the infrastructure sector we've had some certainty. So I'm going take you as our investors through how we're approaching those opportunities in front of us and how we're looking to deliver value as we go forward.

5:58 A reminder first of what the services model within HARGREAVES is about, that long term set of relationships that we've built over many years, 70 plus customers we tipped over last year. That gives us a really strong base to think about the future. Without that certainty and that resilience, it will be difficult for us to look forward into the opportunities coming. This business delivers really strong fundamentals. 6% margin is very good in the sector. It's a good, strong performance. We tipped over that last year. Really strong free cash flows. We're converting the work in progress in line with our contract commitments, and it's an excellent return on capital employed. 36,000,000 of our EBITDA last year, and most importantly, that firm base gives us that ability to select.

6:49 We've built a business that's inflation resistant. You saw that during the times of high inflation. It's resistant in its revenues and it's resistant to credit exposure. The sorts of customers we deal with, large blue chip organisations. And we're very careful about how we contract with those customers. So with all of these factors working together, we've now got an opportunity to grow. The question for us going forwards is where do we now grow and where do we take that growth? Those of you may have seen in June this year, the government published for the first time in a long time a robust industrial strategy for infrastructure. The ten year infrastructure plan and the aligning of NISTA, the National Infrastructure Services Trans formation Authority, now has given us a clear, and if you choose to look at it online, a portal that shows us what the ten years looks forward for The UK's investment in infrastructure.

7:47 Lots of people, you know, when I talk to folk, they say, are we sure we're going to get this done? And they start to look at some of the signs of what's happening and where we're seeing that activity starting to come towards us. $725,000,000,000 is the publicly announced number the government says is going to be spent, and that's a 20 to 25% uptick on what's spent in previous years over the next ten. All of the industry bodies that represent skills are saying that's going to increase too. I sit on the engineering construction training board, and we're seeing the volume of apprenticeship starts and people going on the sides already ticking up. We're partly way through through Hinkley as a as a country, and we're now looking forwards to other large infrastructure. So if I just take it in the three columns that HARGREAVES operates in.

8:38 Connectivity, which in in our minds is connecting people. So all the things that bring people together, that large infrastructure of roads, rail, airports, and indeed now data, large rollouts of infrastructure investment in data. And what does that mean to HARGREAVES? Well, we've been on HS2 for some time now. Neil's team have been there delivering for a long time. When it gets finished, it's in the public domain, probably, as we always say, another two years to run. So HS2, we're there. East West Rail is coming. Lower Thames Crossing. We've done some preliminary work on that already in this year, and we're looking forward into next year. So if we get the timing right, it moves our fleet from one contract onto another contract. Lower Thames Crossing already engaged.

9:25 Enhanced regional transport in Heathrow, which is now called expanding Heathrow on the Heathrow expansion project. We've worked on the preliminary work for that. We've done some of the scheme work already. So again, well positioned to take advantage of that. As I touched on the data centers, data centers for HARGREAVES could mean a number of things. It could mean on our land. It could mean we provide services to prepare the land, or it could mean we provide services to build those assets and operate them. In our minds, a data center is a small refinery. It needs large amounts of electricity, large amounts of clean water, So it fits neatly with the services that we would provide. The second column we're interested in is, of course, clean energy. And in clean energy, we're already supporting size well with the temporary construction area. If you go down to Sizwell, the moonscape that we've created has been done over the past two or three years. We've been involved very early on in the project, and we've been transitioning our fleet to one that's ready and prepared to do the major works down there. They are in a very good place at Sizwell.

10:35 If we look at SMRs, the nuclear fusion, the government has just announced the rollout of Wilver, which is going to be multiple SMRs. They have announced the investment in the HARGREAVES which is going to be a third nuclear, new build nuclear using American technology. And we are at West Burton clearing the site of old ash, and that prepares that site for the Atomic Energy Authority to come into there to start thinking about the first fission and fusion project. So we're well placed there. Energy from waste, colleagues in the room who operate our haulage and waste management businesses. Energy from waste presents us with an opportunity that we're already in. We move the waste around on our vehicles, we operate some of their assets, and we are maintaining some of their assets. That sector has now stabilized for us. It's a good position for long term contracts, we have some really good customers in there.

11:27 Renewables, developing wind farms and solar on our land, And energy storage, battery storage that we have up at Broken Cross. So that segment clearly available to HARGREAVES to target and lots of investment going in there. On to the environment and the environmental sector. We just completed some trial pits at the Lynx Reservoir, and we're doing the Fens Reservoir trial pits in the spring. We are going to be in The UK investing in a series of large reservoirs that we haven't done for forty to forty five years. Significant investment on the same scale to that we are seeing at HS2 and Sizwell. And Cesaro, the strategic reservoir for Thames, we have already been engaged in the pre contractual conversations with Thames.

12:17 Ampate, Sean's business in it, has a business we acquired a few years ago which operates within the existing water treatment businesses and that's providing us mechanical, electrical services into the water treatment business, water processing. We are doing small EPC type projects for them in upgrading their plants or amphates coming towards us, which gives us another opportunity there. Not only do we operate and assist them in the operation and we build reservoirs, we are also dealing with a waste product from waste. Our land remediation takes the waste sludges from a number of water companies Scottish Water, Yorkshire, Northumbria and Thames And we use that to remediate land in Scotland. That material will keep coming towards us. We have to think about a different solution for that as we run out of land bank to put it onto the land. And there's quite a lot of energy and conversation going in as to what do we do next, how do we upgrade the facilities to deal with that waste. Large scale investment there too.

13:18 Sustainable resources. We're looking at bringing in all these clean energy projects and infrastructure projects, all need sustainable type of resources. There's no point building clean energy assets from materials that aren't sustainable. So I'll talk about a case study later on, which talks about how we're finding sustainable materials to bring into the construction of these infrastructure projects. So hopefully you can see our enthusiasm for large markets ahead of us. We've got a strong business that's delivering strong returns. The question for me is how do we make sure we maximize the opportunity and take those opportunities ahead of us? A simple operating model, I like simplicity, and I like to keep things so that we can convert that message into all of our people. And it's built under three pillars.

14:10 Inspire people. Get the best people into our business. Train them well, look after them, and engage them, and they'll do great work for us and and for our customers. That's the first pillar of our work stream, and Neil will talk about a live example of how we're doing that within the earthmoving business. Once we've got those people, deliver excellence. HARGREAVES has got a really strong reputation in the sector. I've known HARGREAVES all of my life, and we've always seen HARGREAVES as a really strong deliverer. We've got to maintain that reputation. Maintaining that reputation and that standard of excellence is what delivers in these large infrastructure projects and what keeps our customers coming back to us. Sean is going to talk about how we do that within a specific project within our business. And if we have the greatest people delivering on those standards, we win more work.

15:03 And win is not just about winning more work for us, is winning for our people. Winning for them by winning more work gives them more employment prospects, more opportunities to develop, and grows our business. So this is a circular model, understand our business, understand our customers, and follow them with great people who are inspired to deliver excellence. Now I'd like to hand over to Neil, who's going to talk about how we're inspiring some of our people on the ground. Thank you very much, Simon. Simon says, I'm going to pick up the first step in the operating model, the inspire step.

15:53 And I'm gonna look at that through the lens of Blackwell Earth moving and how Blackwell Earth moving as a part of HARGREAVES resources, these very larger moving projects, which in the infrastructure sector, which Simon has described. By way of context, we've been doing it next year for seventy years. Next year is our platinum anniversary. So this this isn't new to Blackwell. It's what we do as a business. And obviously, we've been doing it as part of the HARGREAVES group for the last ten years and have benefited enormously from the support and the backing of the PLC. So thank you to Simon. In terms of how we inspire our resources, you can see I split in three here. We have a workforce which currently actually is, is a page of say 400 is nearly nearly 500. We we have quite a lot of subcontract staff working for us at the as well. We have a a professional managerial supervisory staff of about a 100.

17:02 And then we have the earthmoving fleet. The earthmoving fleet is amongst the largest. It's amongst the newest in The UK, and it includes over two fifty items, heavy earthmoving equipment. But gonna focus in the inspire space on the people because however hard I try, I do find it quite difficult to inspire a bulldozer. So how how do we inspire our people? And what does inspiration mean? Me it means, and this really is reiterating what Simon has said, it's how we recruit and retain the best people for the business, the best people in the industry.

17:47 So I believe our team right away from workforce through to leadership contains the strongest earth moving proponents within The UK. So how do we do that? Let me give you some examples. As I stress, we've been doing this for a long, long time by way of more recent illustrations since HARGREAVES acquired us ten years ago. We've grown the business about threefold. So we went from the headcount on the A14, which was our largest, largest highways earthmoving project ever undertaken. We've grown the business since we moved from a 14 into HS2 and size well about threefold. So it shows how we can do it. How do we do it in that in the people space?

18:34 What makes people want to come and work for Blackwells? I'm gonna refer here to a few of the pictures on the slides. One is the heritage. Blackwells are a very, very well regarded name in UK civil engineering. As part of the HARGREAVES group, with that backing of the PLC and the mice and the credibility that that gives us, I do believe it makes us a very, very attractive proposition for those seeking a career in civil engineering. The opportunity which Blackwell presents, because we only work on the very largest projects, which are in the national consciousness, Simon's mentioned, Sizwell, HS two, HS one. I worked on HS one. I've worked on HFO terminal five.

19:22 These are projects which people are keen to work on from a career development perspective. If you come to work for Blackwell's as part of HARGREAVES, you are going to work on career defining projects. So that I think makes us very attractive. The opportunities within the group for our people to gain because but danger and we are a very specialist business. We we we do one thing and one thing only, and it's earthmoving. That can be seen as pigeonholing, but as part of HARGREAVES, we offer our people training and other experiences, wherever as part of a division in Hong Kong, which our people wouldn't have if we weren't part of broader group.

20:07 And those projects extend not just in the super, into the construction phase or construction cycle of a project. Blackwell also provides professional services, advisory services at a very early stage of the projects. I just mentioned HS two. We actually started working in a paid capacity, believe it or not, on HS2 in 2012. We didn't put our first bucket on the ground until 2019. So the opportunity for our people to gain experience at very early stages of the project, which most certainly most of our peers, most specialist contractors don't offer, I think also makes us very attractive. We're also a very progressive employer. The image on the bottom right here has a logo on it, '25 in '25.

20:57 We've been driving the recruitment of women in UK civil engineering for a number of years, resulting in our twenty five in twenty five campaign, where we set out during the course of 2025 to increase our headcount of women to 25%. We're very, very nearly there. I'm conscious there's not much of a year left. But given that national average in UK civil engineering is 13%, we're way ahead of the curve. We're also very progressive and Simon again touched upon this in and let me just place back into the plant fleet. In our approach to carbon reduction in earthworks, We've been looking at carbon reduction initiatives in earthworks since 2011. We worked with the University of Cambridge into a research research paper into the carbon impact of earthworks.

21:48 And back in 2011, and I think it was still called global warming, it wasn't climate change at that point. So we've been doing this long, long before others were thinking about it. We still lead the industry. We've an early adopter of battery electric equipment because, simply speaking, we need to take diesel out of earthmoving, which is a real challenge. One of ways we'll do it is using battery electric equipment. With the support of HARGREAVES, we've bought the first two battery electric earthmoving excavators in The UK, which is really, really exciting. That inspires people to come and work for us because they see Blackwell as being an employer who's taking the challenges of of sustainability very, very seriously. We have to recruit and retain the best people to meet the challenges and to meet the opportunities which are in front of us. Simon again has alluded to many of these. The scale of the earth moving required for the new fleet of reservoirs for Anglian Water, who we're already engaged with in in a consultancy in a minor contracting capacity, and Thames Water dwarfs anything that this country has seen. Certainly, and I've I've been doing this thirty seven years, and it dwarfs anything that I've seen in thirty seven years dwarfing even the scale of the earth moving on HS 2.

23:10 That coupled with airport expansion earth moving, particularly Heathrow Airport means that there's huge opportunities ahead for Blackwell's and the broader group on these projects. We have to inspire our people in order to have the capacity to do it. And with that, I'm gonna hand over to Sean for the next chain. Let me ask Sean. Thank you, O'Neil. Sean Hager, managing director of HARGREAVES SERVICES, but I also have responsibility at group level for health and safety and delivery of operational excellence. And as Niels mentioned, Blackwells have been around for seventy so years, almost seventy years. The industrial services division has been not quite seventy years, but it's useful to go back to the mining industry as the mine. So we've been involved in this decarbonization of industry for many, many years now.

24:18 The positive, and I hope you take some comfort from this, about industrial services is that we never lose contracts. So the only time we lose a contract is when the contract comes to an end or the plant ceases to exist that we're working on. Occasionally, we'll make a commercial decision to end a contract because it's not working for us or it's not working for the client, but predominantly our contracts continue to roll over, the inflation proofed, and they provide good, steady, safe income. We put this down to our operating standards. Repeat business comes from having really, really good, really established, really safe operating standards. Many of our operations take place in really high risk environments, power stations, heavy earthmoving, significant large projects.

25:10 These type of environments demand really high levels of health and safety. It's an expectation, and we build on this expectation with real higher levels of operational delivery. Again, as I mentioned, that reinforces the brand and almost guarantees repeat business. There's an oh, sorry. Yeah. There is an example on the slide. So the example on the side slide that is behind me, sorry, is one of our activities where we handle sludge and biosolids on behalf of a number of water companies. This just is another example of where HARGREAVES were involved in the repurposing of a waste and really turning it into a usable commodity. Bile solids, just for a bit of background, so bile solids really are the byproduct of sewage treatment works.

26:03 So the sludge is made as part of the sewage treatment works, it's cleaning the water, the sludge is treated, and what you get out of that treated flood is basically a fertilizer that can be put to land. And we choose soil quality, it's crop growth, all supporting a circular economy. Some of the sludge, unfortunately, is unsuitable, can't be treated. So what we do with that sludge is that we take it to predominantly large industrial land banks in Scotland, where it's used as a soil enhancer and helps support landscaping activities. So very circular. We're currently working with two water companies on these projects, and we provide an absolute full end to end service. So we take the sludge as it comes out of the sewage treatment works all the way through to putting it out on land.

26:59 Sorry. In these activities, we provide all the plant, we provide all the labor, we provide all the operating consoles. Everything we do is provided and controlled by HARGREAVES. Everything is safety critical, and our focus is on how we deliver safe, reliable operations. What we can't do is take floods to land, which aren't gone through a proper process and being released correctly because that brings a health and safety risk, brings an environmental issue, brings a food safety issue potentially. We've got some really robust, well embedded control procedures that ensure that everything we do is managed tightly.

27:47 We invest heavily in plant. We invest heavily in people. The plant is the most up to date, most environmentally friendly, most efficient plant that you can get in the market. Our people are safe, are competent, are multiskilled, are invested in. Having modern plant, competent workforce, and a can do attitude of a business that is regarded as safe and has a great reputation, guarantees repeat business and make sure that we can keep generating good, safe revenue. Okay. Thank you, Simon. Thank you, Sean. So covering those first two points there, the next thing for me is to win and to win more work and win for our people.

28:48 Thank you, Neil. Thank you, Sean. Let's not forget that at the core of Hargreaves' history, we were a trading business. Origins can be traced all the way back to 1936 if you do the history and check back where the name came from. This is a business that has followed its customers for all that time. We provided solid fuels into the thermal energy business for many years and we have done in that we have started to build up the services you have seen today. So instead of using our equipment to mine mines, we are using it to prepare the ground for clean energy. Instead of using our equipment to move solid fuel into thermal power generators, we are using that to move sludge. So we have transitioned as a business now from an old product that went into delivering energy for the country into the services that purviewed future infrastructure and future energy for The UK.

29:44 We are well prepared and well positioned for the future markets coming towards us. The example that me sums a lot of that up is a recent project that our minerals team worked on in conjunction with our earthmoving teams and industrial and haulage businesses. In building these assets, you have to make sure, as I said before, have to have sustainable products and sustainable equipment that is going in there. Is no longer optional. Rather, the consent orders on these assets say suppliers will deliver sustainable products. So our minerals trading team sourced the product to fulfil a need down at Sizwell. Sizwell needs circa six to 9,000,000 tonnes of aggregate to backfill the project. Minerals team sourced a secondary product, it was a waste product being put to waste, Granite that was a waste product from digging a tunnel in Oslo. So that product would have normally disappeared and been lost. And they sourced the product, tested it for quality and compliance so that it could go into the project, the right size, the right composition, the right hardness.

30:48 And not only that, they took it upon themselves to work out that because it's a byproduct, it can be certified as having 22.5% less CO2 in its production. And that's when you compare it to mining virgin materials out of a quarry. Because it's a byproduct, it's got less carbon intensity, which was appealing to our customer. So we've then set about organizing the shipping, organizing the port handling, organizing the delivery of that stuff on our vehicles and incorporating into that product. Customers were really pleased. We fulfilled one of their sustainability needs in a project by joining the services that HARGREAVES does separately together on this project, maximizing the value into our business. We will continue to drive forwards with our strategy hopefully you have seen today how focused we are as a leadership team on making sure that we are delivering for our customers and delivering for our shareholders.

31:47 I'd just like to now share with you that we've prepared a short video which gives you an insight into some of the things we're doing so you can have a look at what we think is a very exciting business. Hopefully, that gives you a flavor of what

33:33 our teams are doing and how we're supporting the country in its infrastructure development. We have great people, and we are building inspiration into those teams. We deliver excellent services, We are always looking to drive greater efficiencies and winning more work. I hope you can see now we are positioned to take advantage of the pipeline of critical infrastructure projects ahead of us. Happy to take questions at this point. Hello, it's Ed Stacy from Cavendish. Just one question about the reservoirs. Niall mentioned that the scale of the earthmoving contract would dwarf HS2.

34:19 I know you're not going give me a number for any of those reservoirs but in terms of like are we talking it would dwarf the total scale of HS2 but would be spread over fifteen years or, you know, kind of annual run rates? Are we talking about contracts that might actually be bigger than what you've been doing on HS2? Thank you. That's a really good question. There's more than one reservoir. There's a fleet of 10 new reservoirs to be built in The UK. Pretty much starting construction wise in four to five years' time and then running for ten to fifteen years beyond that. Of those reservoirs, three of them have an enormous amount of earth moving and two of them have a modest amount of earth moving and the other five less, less so.

35:06 The combined earthmoving required for all of those reservoirs, and and there's no firm figures available for this. So some of this is my judgment equals and is slightly greater than the earthmoving requirements for HS two. So in terms of the magnitude, slightly more than and and in HS two here, I'm talking HS two phase one, obviously, London, Birmingham, what's currently in construction. In terms of magnitude, slightly more. In terms of run rate, depending on the timing of the reservoirs, it's potentially over a slightly longer period. HS2 has been concentrated over five years. Here, we're looking at between 5%. Thank you.

35:56 Thank you very much. Ildar, Davletchnan, Investor. I just wanted to ask maybe a broader question on the competitive landscape. Could you talk about your major competitors and maybe your market share and the way you win businesses? Is it more like I'm simplifying it, but I hope you explain in more detail, like pricing or quality or timing? And then, if I may, on the contracts, like, just for us to understand as investors, like, what kind how the contracts work? Is it like a twelve month, a multi year? And you mentioned this 6% margin. What gives you confidence in this? Like, how do you arrive at that? Like, is it a cost plus or just underneath the kind of a bit more on the contracts, please? Thank you. Okay.

36:49 In in terms of competition, if if you look at HARGREAVES, we we operate a number of services. So we would compete with potentially different people in those services. A clear example is, you saw on the video, some trucks. Lots of people own and use trucks, but we're actually quite niche in that. So we move certain specific projects associated with the sector we're in. So you could arguably say we don't have thousands of competitors in that. We have a narrower space of competitors who have trucks. In earthmoving, large scale earthmoving, there are maybe two or three in this country, two definitely on smaller that do the type of work we do. So those large infrastructure projects that haven't been around for a long time are very well positioned because there isn't a great deal of competition in The UK.

37:40 In our industrial business, there are probably more customers because we have a broad spread of what we do. But, again, we're quite specific in what we do. We do handling of stuff rather than general mechanical, electrical. So what I'm trying to paint you is we're quite niche in that infrastructure space, but there are lots of people who could claim they're they're in that space too. So it's a very big market with lots of services. But if you want it, especially earthmoving, you would come to Blackwells. In terms of the contract models we adapt, because we're selective and we have a strong base, we're not out there doing lump sum EPC type of work. The industrial business is very much a flow through of cost with a margin and management fee. Derisked, we're providing the customers with efficiency gains by working with them, and they pay us broadly our costs.

38:35 Same in earthmoving because there isn't such a great deal of competition. We're not doing that big lump sum pieces of work. We tend to be fee based. So I hope that answers the question. We're not in that area of lump sum big construction. All good. Steven, did we get anything online? Yeah. So if I stick to services related questions, first part is which part of the HARGREAVES services are you most hopeful of seeing good growth? What area of service? I mean, the obvious in there is the volume of earth moving, Neil talked about, but that feeds.

39:20 If we get the businesses as we bring the businesses into those larger projects and they communicate and work well together, which they do, it pulls through other things. I guess all of it. We have got a really good example Sean just reminded me of. We did a significant amount of earth moving for HS2, as everybody knows, And we also installed a large conveyor, which the industrial services did, big piece of work, it takes stuff across a road and a highway so that we don't have to have trucks coming in and out there. That's an example of pull through. Good relationship with a customer. We're bringing through the other services. I think this question is it is a services related question, although I think the the genus of it is in the land business.

40:07 Whether or not the business has considered checking closed mines for the present presence of rare earth metals, I I suspect it means. As there could be this one might be for you. Well No. We we haven't done. Thank you, Gordon. That's all I'm gonna cover on services. There's a few questions that are more generic, but we'll pick them up after. There's one on one on one. Thanks. Simon Caulfield, shareholder. How do you measure inspire excellence? I guess winning is easier to measure, but how do you measure inspire and excellence? Tricky. Yeah. It's the answer to that. But inspire is a people based thing. So for me, it's about if I if I look at our people I was I was up in Scotland, looking at land remediation last week, and I was talking to a gentleman that's worked for us for many, many years. He's 62 years old, started with an apprentice, started mining coal for us in an open gas coal mine in Scotland.

41:04 And he's now operating a digger, which is taking the waste sludge Sean talked about, putting that back in the land and putting the land back on top, restoring it to nature. He's enormously proud about that activity. And he says to me specifically, you've allowed me to do that as a business. So you do it by talking to people. You do it by the traditional do people engagement studies, people engagement surveys and say whether people are happy to work for us, whether to recommend us to a friend. Excellence is about keeping contracts. It's what Sean talked about. When we retain contracts and then renew them without negotiation, that's our hard measure for excellence. We've delivered that service. I'm going to hand over to Gordon, if it's okay.

41:58 Good morning, everybody. I think most of you know me, Gordon Banham, CEO. I just want to say thank you to the team for what they did on services. Simon's been a great addition to the group. And of course, the old faithfuls, Sean and Neil, continue to do a really great job for me. So let me just talk about Germany. I just want to take some time because you can imagine on the roadshows, we don't have a lot of time to talk about Germany, and I have been fairly throwaway with a lot of the shareholders by saying, well, if you're doing a sum of the parts calculation, just look at what the balance sheet is and put it in a balance sheet value. And that's very unfair on the German business. So what I'm going to do today is just take some time to try and give you the data to make your own decision on what that valuation should be in your sum of the parts play.

42:51 So at the moment, the balance sheet's about 58,000,000 of our share of it. So let me just take you through and remind you. So the German business, forget DK zinc processing, it's a new announcement today. Historically, you'll all be aware of that the business is split into two parts. So you have the trading business, HARGREAVES, which owns DK Recycling. DK Recycling, HARGREAVES, and the zinc processing business are all ring fenced, so you have to do a little bit of a sum of the parts of the three, but they are ring fenced from each other, which is important to know. Well, I've been on roadshow with a lot of you and I've spoken about HMS as a trading business, and I've said to you very simply, it makes about 1,000,000 a month. So if we eventually wanna recover value, very easy route is to close it down, liquidate the stocks.

43:46 There's about three months of inventory in the books, so you've got 3,000,000 of profit, which we wouldn't take. That would deal redundancy closure costs. So, hopefully, you look at it and go, right, Gordon. I've got my head around that. That bit's secure. Easy. That trading business is a bunch of people and always say, you know, I don't attribute a value to that, per se because these people can leave. So I try to be realistic as that. DK Recycling is a very specific business in the recycling sector, and I'm gonna explain that in a lot more detail for you, reminding some of you or explaining it to people. Just remember, voting rights are different from economic, so basically the profits of this business, we get 86% of it. The little nuance, and it's really exciting, and please pay attention as we go through because you'll see how they all link very well.

44:40 DK's ink processing is a new announcement today from a point of view of where we're developing the business. But if you look at it, it stands alone and we have purposely shown it as part of PLC because we will be reporting on this as part of the group. So it sits as part of the group. It's not a joint venture. So I just wanted to make that clear. So just reminding everybody today about the business at DK. So DK is a recycling business. Its technology is the only technology that deals with waste dust from blast furnaces. You really have only two options with the waste dust. You either put it to landfill or you give it to us.

45:27 Traditionally, some have gone to landfill, some have gone to us. What the process does, and these are all our customers, so very big blue chips that you'll know the names of, We mix coke and coal with iron ore and we put it into our blast furnace and we get pig iron, zinc and energy out. So we're recycling. It's very positive. We're also protected because we have our own power station on-site. So it's a big industrial complex and does the job very well and ticks along dealing with this. Like I said, the customers can either do it with us or landfill. But one of the key points that I'll pick up later is it typically can only deal with a zinc content of about 3%. Now it's a USP because nobody else can deal with 3%. That's why it goes into landfill.

46:12 But it can't deal with high zincs, which is what the new electric arc furnaces do. So what I say here is, and this is just the correlation, in the old days, I would sit and say this business is gonna bob along, making between 5 and $1,020,000,000 profit. Why does it vary? Well, if there's operational problems at the plant. And then, of course, zinc is a commodity. So what tends to happen if zinc prices go up and we have a good run and we're producing well, we could be up closer to the 20? If zinc prices are down and we have some problems at the plant, we could be down at 5. But it's always worked in that range. We've always been very comfortable looking at it like that. But I think everyone in this room knows there's a huge amount of change in the steel world.

46:59 These are the three points that you've all heard of, people have mentioned over the last twelve months. I'll try and dig into them in a little bit of detail to explain what impact they're having, but you're all aware of Trump you finally used that name today Trump and the tariffs and all that's going on. So it's creating some huge dynamics, and that's why DK has had some challenges over the last couple of years. So what are the market drivers in DK's world? Well, if you think about it, as I told you, coke and pig iron prices tend to be symbiotic. So that was okay, wasn't it? Well, tariffs are causing major disruption to the steel industry in Europe. You're seeing plant closures or capacity reduction.

47:48 That's meaning that steel prices are very, very low. Most of it's loss making, which is driving pig iron prices really below cost of production. So that's hurting us. Construction sector, down in Europe, therefore running at roughly 60% of normal levels. That's a negative to us. A positive, and I mentioned this when I've been out on roadshow with some of you, that Russia was dumping a million tons a year of pig iron into Europe because it wasn't an embargoed product after the Ukrainian invasion. That has now been sanctioned. So by the end of twenty five, a million tons of pig iron will come out of the European market, which should help drive prices up. Then there's this thing called the carbon border adjustment mechanism. Now some people in this room will know all about it and go, oh, yeah, understand that. Some of you may not.

48:38 The scary thing, and I'll put it very easily for you, if you bring a ton of pig iron after 2035 into The UK, into Europe, you will be paying a 100 and based on what the price was in November, you will be paying €164 a ton more for that commodity. Just a straight tax, on the top, 164. So if you're involved in any businesses that are heavily involved in bringing in or using steel products, that is the green tax that is coming by 2035. It's called CBAM. It's just starting. And what it really means is that if you bring anything into Europe and you have done it with high global emissions, so pig iron is roughly two tons of CO2 for every ton produced, If you do that in Brazil or China or India, you will have to pay this on top of normal tariffs, 164.

49:39 So that shows you how much these prices are gonna move up. In Europe, you get what's called free allowances. And at the moment, DK gets about 500,000 free allowances to keep us in business, and then we give those 500,000 back. It's a very circular process. In 2026, the EU has to make a decision because what's going to happen if they carry on in their current trajectory? By 2035, we will get no more free allowances, so we'll have to buy them. But all of our competitors who are bringing it in outside of Europe are gonna pay 164. What it really means is if you buy pig iron, whether it's from us or from these guys, you're gonna pay €164 a ton more based on that price.

50:28 So that's a significant cost to European economies. I think the governments are starting to panic in Europe at the moment, especially Germany. There's a lot of challenges. But if that trajectory carries on as it is, prices of pig iron will go up and we will be in balance. What it will do is stop us exporting pig iron. Because if you think about it, once you're outside of the carbon border adjustment, sales to Korea, Japan, Pakistan, places we do, Europe will be uncompetitive. Won't be able to get a look in. So we're internalizing our sales. And with the moon moved to electric arc furnaces, the demand for pig iron is increasing. So if you take Tata at Port Talbot, they're looking to buy European about 100,000 ton of pig iron that they didn't. So we think we can internalize inside Europe, which is a good thing, but the prices of everyone's pig iron is going go up. It isn't going to improve our profitability, but at least it shows that we're protected.

51:28 Everyone talks about carbon capture. It's got a long way to go. So if you hear all these stories about carbon capture, the first people that are gonna put this on is gonna be cement plants. We'll let them have what I call bleeding edge technology, and then we'll look at it. But it's very, very expensive. We're protected by C band protecting us, taking things forward. So it's creating a lot of uncertainty and opportunities. The other thing that's happening is steel decarbonization. Now a lot of you will have seen, if I take a UK perspective, closure of Port Talbot. So they closed Port Talbot, highly polluting. You saw that they nationalized British steel because they were going to close the blast furnaces. It's now lost the government $260,000,000 in the first six months since they've owned it.

52:15 So everybody's looking to move away from the traditional blast furnace. And these people that we all are in we as a company are on detailed discussions with at the highest levels are all building big electric arc furnaces with subsidies. For instance, Tata getting 2,000,000,000 at Amoyden, Salt Skitter's already got 2,000,000,000, Tisson's got 2,000,000,000, Sastar. These are big projects. They run to a size of about a three three million ton electric arc furnace. So they're big pieces of kit, They need huge investment. But the really interesting thing is that they now create a very different dust, and I point you to the zinc content between eight and fifteen. Now as I told you, DK can't deal with anything much more than 4%.

53:04 So it's like, oh, that's a problem for us. But it's a problem for everybody because I'll talk about traditional method of treatment. That can't deal with it either. So somebody needs an answer to that. Is it an opportunity or is it a risk for us? So this is why it's an opportunity for us. I don't know if they'll just stand up. Stefan and Robert. So Stefan and Robert have been leading the project for three years. They're in the front. Please catch up with them later. They're intimately involved. You can stand up so everyone knows who you are. Otherwise, they will not know who you are. So if you want to catch them later to talk to them, they've been involved with this Robert Stefan Hamilton in three years, I think. Four, sorry. Five for you. Alright. See, at least I set it shorter. I must have enjoyed it.

53:51 So look, this is a new technology that we've developed in house. The cost of the build is 18,000,000, so bear that in mind. We've set an internal ROCE a minimum of 20%. We'll talk about that later. German government have looked at all of this and gone, absolutely great. 2,000,000. It's agreed. We've got the 2,000,000. They've also said, tell you what, we will give you a loan of a minimum so I wanna say minimum because it could be slightly more, but a minimum of 4,000,000. So we're now getting 6,000,000, which is ring fenced to that business. So at the moment, the risk to you and shareholders with this crazy CEO is actually 12,000,000, because I bet you've all sat through presentations and someone said, oh, this is gonna be great, and then it's all exploded and it's called a problem. So the risk is 12,000,000 because this is ring fenced.

54:45 And I always say to everyone, Remember, eight and a half percent of the money is mine as well, so I am that's why it took three years to even talk to you about it. The building will start in January 26, so spades in the ground. It will be fully operational in H2 twenty seven. It's 86% owned by the PLC, and that's important because I will tell you what's happening every six months on this, so it isn't gonna get hidden in the other numbers. It's going be clear, it's going to be transparent and open for you to understand. The really exciting thing is the first plant can do about 50,000 tons of dust. On the site that we have, we can actually build two more. There's a patent pending, and there's an opportunity to deploy this technology elsewhere. So you sort of say, well, challenges. So I'll just explain. An electric furnace at the moment, they only so the normal electric arc furnace uses scrap, and that means it has a zinc content of anything from about 18% up to 40. So remember, there's this sweet spot. DK can deal with up to about five or it goes landfill.

55:51 Anything above 18 up to 40% is dealt with technology that's called a vaults kiln. And if you do your research, you'll see there's a dominant player in the market called Buffazer. Market cap's about 1,000,000,000, and it deals with all of the electric arc furnace dusts on long term contracts. It makes a margin of about a €100 a ton on every ton it processes. So the problem for the existing relatively small electric arc furnaces who use 100% scrap is they can only go to landfill or these guys, and these guys make a significant profit. Now, the problem with the Valts kiln is it uses pet coke or anthracite or coke, So it has a CO2 footprint.

56:38 The residual that comes out the back end goes into landfill, but they do extract the zinc. It's the only thing they take out. They take out the zinc. But they produce a zinc concentrate, which then has to go to a zinc smelter, which is again energy intensive. And if you go down at 15 to 18%, it doesn't work. The economics because you do the math and go, well, if it breaks even, Gordon, at 15%, you go, well, actually, you're down at eight, I've lost 7%, and zinc at the moment is trading at, let's call it, about €2,500 a ton. So a waltz kiln will have to charge you about €175 a ton. We've had that tested because we deal with a company called me in Poland who run valts kilns. We've run the numbers through and they said, yeah, that's roughly what we would charge for that type of material.

57:30 Landfill's cheaper. So it's like, oh, so you've got these big projects being built that are producing a waste, which is supposed to improve their footprint. And guess what? They're gonna put a big pile of dust in landfill. So that doesn't work for them either. So what do we do? Well, interestingly, DK already supplies about 8,000 tons of material to Bofesa, so we already deal with their contracts. We I had a guided tour of their plant, which they'll regret doing that a few months ago, And they take so we take DK's material, about 8,000, and material from electric arcs. 50,000 tons, it's chemically treated. We're not saying exactly what we do because we don't want the competition to know because we've got a patent pending. At the far end comes zinc oxide and waste dust.

58:20 Now, there, we already have letters of intent to buy the oxide. We've run a pilot plant and the customers have looked at it. We've agreed a formula. So we know what the output price is gonna be. It is linked to zinc price. So the strategy will be, once the technology is proved, we'll hedge this, because that's the right strategy. You can hedge zinc in the market. The waste dust is really interesting because you can, what I might call, polish it down to 2% and then you can put the material into DK. Now, if you didn't put it into DK because they're ring fenced, you would landfill it. So the transfer price to DK is at €70 because that's exactly what they pay for landfill. So it's arm's length transaction, but the quality of that dust with a €70 gate fee is earnings enhancing for DK.

59:10 So actually, there's a benefit over in DK because it gets a new customer that's paying a higher gate fee. Typically, they're paid something like a €30 an average gate fee. So this material's probably worth 20 or 30. The quality's not quite as good, but there's a definite uptick. What's the advantages of this process over a volt scale? Well, if you it's it's electricity, really. So if you use green electricity, it has a minimal carbon footprint. The residual, if it goes to DK, you're recycling 99%. Remember, a waltz kiln, its waste goes into landfill. And one of the big barriers to entry, why Buffazer has been so dominant, to build a waltz kiln, you have have to get planning permission, you have to do all of that, but it roughly costs you a 100,000,000.

59:55 So they have a dominant position controlling about 80% of the market in Europe. So you say to me, okay, I've listened to all that. And believe me, I have stress tested this. Robert and Stefan have the scars of how does this work, how does that work? So we took it to Imperial and said, here's the chemistry, does it work? They've signed off and has Alan Williams' MBE. German government looked at it and said, Yeah, we'll give you the grants and we'll give you the state guarantees. So the German government are backing this project. We've run a pilot plant, which, important thing for anyone who knows chemistry, the scalability is a factor of 50. So it isn't a big scale up from something to a factor of a thousand. It's only 50 times.

1:00:42 This chemical it's a chemical perishes, not heat treatment. So it's all about surface interaction, mixing it correctly. As I said, we have the letters of intent. We're only looking to place about 6,000 tons in a market that's 239,000 in Europe. So we're not worried about driving prices down. One of the things I say to everyone is DK is probably the most perfect place for this because it's got rail connection, it's got road connection, it's got river connection right next to the waterways. We already have planning permissions to deal with dusts. We have all of the infrastructure. So what this business has done When I talk about the 18,000,000 spend, 2,500,000 of that is to buy land off DK as a standalone. So we own the land.

1:01:27 It's already got all the permits it needs. So there's a We've had a very low barrier to entry. The other really great thing is we already deal with Buffaza, so we already supplied us. We've seen their contracts. We've visited their plants. All of the people that supply Buffaza take pig iron from us as well. So we're already a trusted partner with all of them. They're all talking to us and saying, Great, you're an alternative. All of the big steel boys do not deal with Buffaza because they've never produced this type of dust before, but we're a trusted partner because we already take their existing low zinc dust. I'll be a bit of an anorak and quickly explain. If someone says to me, Why is the zinc content different? In the big electric furnaces, they use what's called DRI, which is effectively iron ore. So they use a blend of between 5070% iron ore, 30% scrap. A typical electric arc furnace is a 100% scrap. That's why you get a different zinc content. Zinc comes from galvanizing.

1:02:22 So again, I have stress tested this like I hope all of you in the room would do, and I've gone, right, what can go wrong? Well, it could be cost overrun. So we have contractors tied up. It's been under R and D. Sean and Simon are helping me oversee all of that as well, because obviously it's an expertise that we have to make sure that that doesn't go wrong. Okay, seen it happen on other companies. What about the feedstock being inconsistent? Because it is a waste byproduct. The answer is this plant can deal between 640% zinc in its process. So we have got a lot of flexibility. It's very adaptable. We've already trialed in the pilot plant all the different types of dust, so we already know the ways they react.

1:03:11 Zinc price could collapse, totally true, and the way we protect that is hedging, but I wouldn't be hedging until we prove the technology for everybody. We obviously don't want a hedge position. But if you look at Buffetzer, they hedge about 85% of their output. And there's always the classic, never forget, some new technology could arise. So all of the customers I'm talking to at the moment, I'm talking about a five year take or pay contract. So they're desperate. If you think about it, they're spending something like 4,000,000,000 a plant, and the governments are going, okay, we'll give you 2,000,000,000. What are you doing with your waste dusts? So they actually need these contracts, and we've actually got got more customers than we can deal with. And one of my conditions is it has to be a five year take or pay. So what's happening in terms of next steps?

1:04:00 So I have a meeting with four of the main steel companies in the summer. Remember, the plant's starting to be built in January, so they want to come and see it being built. They all want to contract by the end of 'twenty six because the first plant comes online in 'twenty seven. I'm hoping they get delayed a bit because they may come on stream before we do if we're not careful. They normally get delayed by six months. We're building stock of our own material to cover that gap. So how we're gonna manage any slowdowns is we're gonna have our own stock on the ground that gives us six months supply so we can we can flex around six months. At the moment, we we can only handle 50,000 tons, and I have 200,000 tons banging on the door. Interesting. I had a phone call yesterday. Swedish Steel rang us and said, we heard what you're doing. Can we come and talk to you about about doing a contract with you? Because we're putting in a big a one and half million ton electric arc furnace.

1:04:54 So they're coming down to see us next week to to chat it through. So that's a a new one that I wasn't aware of till yesterday. So in summary, if I've tried to take you through this properly, what I've tried to explain, and only you'll be able to tell me if I've got it right, is I've always very loosely said some of the parts. So I think you can see trading, great business, very happy with it, tick can seem protected there. I hope you can see DK is going through a challenging period, but we see a way to the other side. And we also see that when we open this zinc project, it will further improve the profitability of DK and give it a long term future. But finally, the really exciting thing for me is DK Zinc.

1:05:42 It's an arm's length. The management team in Germany and us are very aligned. We think it's an industry disruptor. We're being very cautious. We're talking about a 20% ROCE on the first plant. We will only build plants two and three there once we have contracts to underpin them and we've proved the technology. So I'm not going to race ahead. My only issue is that we will trial it and by the end of 'twenty seven is likely where we'd make the next invest decision because the customers are queuing up and we need to be ready to react to that. But I think you can see it's a really exciting development. I hope that this presentation has given you more in-depth understanding of the German business and hopefully, you put your own number on what you think it's worth, but hopefully you can see there's more intrinsic value than just a balance sheet recovery issue there.

1:06:33 So if I could open it up to any questions, please. Well done, Simon. I was that confusing or that precise, I'm not sure which. A couple of questions. First of all, on page 24, your final bullet point, driving prices 8% implies a 7% increase in the price. Didn't understand that. Which one? Sorry. Page 24, the final bullet point. This one? No, 24. Oh, sorry. Right. Let me take it back. Sorry. So they're outnumbered on here. Sorry, Simon.

1:07:19 Oh, okay. This one. Yes. Okay. Perhaps I'm being stupid, but I didn't understand that at all. Right. Biggest biggest drawback of a Vault scale, it breaks even at 15%. Okay? So it's zero. It doesn't make any margin. The new dust from the new electric arc furnaces are coming out indicative of 8%. Okay? So if you turn up to a Volt's kiln with an 8% dust, and I've took the worst case scenario, 15 Yeah. So it breaks even at 15, which is not likely, but we'll use 15, then you turn up to a volts kiln and says, I break even at 15. You're asking me to process eight. Therefore, I'm not recovering 7% of zinc, which today is 2,500.

1:08:05 So a Volkswagen will have to charge you €175. That's an important number because one of the discussions, I think it was yourself I was having, is at the moment, the prices we're pitching to these new electric arc furnaces, I actually don't wanna be too friendly. So I need to know what my competition is, and I need to try and be just under it. So that's the nuance I'm trying to deliver. We've been very conservative in terms of what we expect to get as a gate fee, but we know what our comp we're close to what our competition is. Remember, I already supply Buffazers, so I know what they charge. I've checked with me at Stetchco. I've checked with my customers. I think getting the pricing right. As I've said to the board many times, I only get one go at getting it right, and I wouldn't like to leave any money on the table if I can help it.

1:08:53 Understood. Yeah. I think what confused me was that the 8% refers to the zinc content. Yes. Got it. Second question is, could you talk a little bit about financing both the initial plant after the loans and sorry, the grants and also potentially subsequent plants? Yeah. So at the moment, we're in a position where, as I've said here, the the minimum we're gonna get from the German government is 4, but they're looking at it to see whether they can increase it. We get the 2,000,000, so it leaves 12. Of that twelve, two is buying land, which we could always sell ultimately if we needed to. So really, look at it and go, four, two, two, eight. Our real risk money as shareholders is probably 10.

1:09:38 So that's how we're gonna fund it. That's it up and running. Okay? So Steve and I will be talking to the analysts, and you'll see that our debt number will go up as we oh, sorry. The amount of cash we have will reduce as we invest in this. And that's the first plan. We are being conservative in terms of how we're managing people because we're saying, Look, let's get the first one built, let's prove the concept, and then we'll have to move very quickly. So I think this is gonna be really exciting to talk to shareholders about every mean, their stuff's really exciting as well, Heathrow and all the yellow Tonka toys and all the stuff they guys do. But I think this will be really interesting to talk about on roadshows every six months. I've set a very defined target, remember, for myself.

1:10:23 Starting in '26, operational in '27, profits are transparent. So I'm not gonna hide this anywhere. You can judge me, look me in the eye. Just hang around for the next two years if you can, Simon, just We'll walk through it together. Good man. Hi, cheers. Ollie Knot at Chelverton. Just on HRMS rather, 3,000,000 of working cap, what's the other 15,000,000 of balance sheet value? I'll let the finance director do the finance numbers. He hasn't done a lot today, so we said we'd give all finance questions to Stephen. So within HR oh, the 18,800,000 in HRMS? Yeah. Yeah. So that that that is all predominantly working capital through either funding.

1:11:25 So the stock that they have is 80% funded, through their borrowing base facility, and then the remainder will be, I guess, the the split of debtors and creditors. So it's predominantly the stock the stock that they hold, and a and a and a small amount of cash. They don't hold a lot of cash into that into that balance sheet, but there's not really anything else in there. Okay. So that all unwinds on a wind down scenario? Correct. So when Gordon was talking about 1,000,000 a month, he was talking about, I guess, shut down additional costs, etcetera. That 18,000,000 is all asset backed. Okay. And sorry, some people might get the wrong idea. All I'm saying is I tend to look at, you know, defend the ground. So the team are happy, they're going on, Hilar, who's the lead trader, probably got another five years in him, but he is 65.

1:12:15 And I was asked by our bankers over in Germany, you know, well, why don't you get some new traders in? Why don't you get it's a very niche market that they they live in, and I trust the team. They've never lost money and their shareholders alongside us. So when the markets are down, they stop trading. Instead of chasing a big bonus at the risk of our balance sheet, they don't. So they never lost money. And personally, you know, when I retire, someone might wanna do something different. But personally, my view is they've done great. They've looked after us, let's not be greedy and risk putting someone else in there that might risk the balance sheet. Anyone in the room? Are they already online?

1:13:03 Yes. So we've got three online questions, two of them pre submitted. First one is, would it be financially viable for DK Recycling to build another recycling blast furnace? No. It wouldn't. The cost of building one, think, is about 300,000,000. So so you wouldn't. So the answer is no. It wouldn't be economic to do that. One of the points is something that hasn't been covered today, but is related to the HRMS business. Is the company exploring any strategy to move the coal pulverization plant into profitability? Yeah. So if people know that we own a coal pulverization plant, it grinds coal for cement plants, but at the moment, the German industry is still pumping out huge amounts of CO2 from the lignin brown coal power stations. If that closes, then we will fill it up quite quickly.

1:13:55 But we're waiting to see what policy changes are in Germany. Okay, thank you. And the final one is from Alan online. It's quite a long question, but the short answer is he acknowledges there are a lot of, I guess, coming for pig iron prices in in in the future. But what he's been seeing over the last six months, pig iron prices look like they've been weak. Is that what you're seeing? And has that been having any negative Yeah. Absolutely right, Alan. I know we chat about it from time to time, Alan, and the the answer is yes. They're weak at the moment. They track scrap price. We're fine with shall I put it like this? We are fine with the brokers' forecasts, so that's there's nothing that particularly worries me. But, no, it's challenging. You know, I thought, Steven, what's brokers' forecasts for Germany? Well, it's not broken out, is it? The German so our share of the German result is about 6,500,000 our share.

1:14:46 What we expect to get from DK is pretty much breakeven, slight profit, and we're on track for that. Yeah. So that's the point, Alan. It's where we expect to be. And that's why I'm saying all of these changes will move it back to where it should be over the next few years. Anything else? That is all the German related questions. We do have a handful of other questions related to the rest of group, most of them pre submitted, but what I intend to do, given this is focused on services in Germany, is respond directly to those questions via the the portal. Very good. Alright. If everyone doesn't ask me anything, I will hand over to Roger and let him close the presentations. Thank you, Roger. Try to remember to press the green button this time, Gordon.

1:15:34 That's not going well. Please Where go are we? There we are. That's good. Well, again, let me reiterate, thank you very much for taking the time out today with everything else that's going on. Hopefully you found that, well, interesting. There may be some questions that you feel free to ask afterwards in the plenary session out there where there's some refreshments and sandwiches that you're to participate in. But if I were just sort of, I'm looking for emphasizing where we are in really simple terms. So we have a very strong land business that will throw off cash over the next few years. Now it's hard to predict quite when those cash incidents will fall, but there's a lot of cash to come out of that business.

1:16:32 And it's a relatively simple business model. We've got a services business, which is world class in my humble opinion, and hopefully the guys have convinced you of that, which has some fascinating opportunities in front of it. And then we've got our German activity, which Gordon spends an enormous amount of his time on and a lot of time in German, where I think this zinc project in really simple terms is is what's what I'm looking for? Disruptive market changing and potentially, I think Gordon's underplay actually has implications beyond simply what we do at DK.

1:17:21 If the technology works and we're as confident as we can be that it will, then you can imagine in the world zinc processing market, how this technology may play out because it's massively more efficient and massively greener than the existing technologies. It almost seems too good to be true, but we believe that it is actually too good to be true. I don't mean that, obviously. So I'm really proud of what the guys have done on this particular project. I'm certainly proud of what the guys have been doing in the business that's the existing business. And I think we're very well placed to create some very meaningful shareholder value here.

1:18:06 And hopefully that will be recognized in our share price. And by the way, we're going to continue, certainly for as long as Gordon and I are shareholders in this enterprise, to pay a meaningful dividend. But thanks for coming. Thoroughly enjoyed it. And please feel free to go through, help yourself to a drink and a sandwich and whatever else you want to do. And ask questions of us whilst we're there. That's it, I think.