Image Scan Holdings (LSE:IGE) — Preliminary Announcement for the year ended 30th September 2021

0:01 Good afternoon, ladies and gentlemen. Welcome to the IMAGE SCAN Holdings PLC preliminary announcement for the year ended 09/30/2021 investor presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Just click q and a, scroll to the bottom, type your question, and press send. Company may not be in a position to answer every question received during the meeting itself. Have the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your investment company dashboard, and you'll be notified

0:32 once they're ready for your review. I'd also like to remind you this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Bill Moore, chairman and CEO Sarah Atwalking, finance director, and Vince Deery, sales and marketing director. Good afternoon. Good afternoon. Thank you for setting this up and for the introduction. And welcome from me, Bill Moore, the chairman and chief executive of IMAGE SCAN to those attending. Firstly, why are we doing this? I think one of the things we've found through the COVID pandemic is that we've had to be more inventive about how we communicate with our customers and and partners around the world, and we've set up different ways to do that.

1:19 And I guess it's good to be inventive and think about new ways of communicating with shareholders and potential shareholders. And so we're trying this this platform for doing that for the for the first time. I'm going to give you a brief introduction to the business. I'll talk a bit about the makeup of the board and introduce Sarah and Vince properly at that point. And then Sarah will run through the financial results for the year that finished at the end of September. We just published those results a couple of weeks ago. And Vince will talk through our product and market strategy going forward. And as you heard, we'll do our best to answer questions that you might have at the end.

2:07 So for those of you not familiar with the business, this is a brief overview of ImageScan and how we got to where we are today. Company's a spin out from Nottingham Trent University. It's been aim listed since 2002. We were originally working with a set of patents generated within Nottingham Trent around X-ray three d X-ray imaging and moved into period a of really doing one off sophisticated X-ray systems solve different problems across a variety of industries. Since around 2010, we're much more focused on standardized products in security and industrial markets rather than one off projects, and that's where we are today.

2:56 Our two main markets are security screening and industrial screening. On the security side, our core product is portable X-ray systems for bomb squads, and you can see an image on the right there of somebody setting up one of our systems. And below, you have one of our industrial systems that is used for inspecting catalytic converters in the automotive industry. We're based in just outside Loughborough. We have manufacturing and r and d facility there, so our 19 staff includes salespeople, software engineers, hardware engineers, and and a small production team. So we're quite vertically integrated in that sense.

3:43 And we have a global distribution network and and so a particular feature of the company, we're able to access more than 60 different countries around the world and and and and sell our systems very widely through that through that means. Our share price is currently around 2.5p, values the company at £3,400,000, and you can see there our results for September 30 year ending September 30. We'll go through those in a bit more detail, so I won't dwell on that now. And at the end of that period, we we're in a happy position, having well over a million pounds in the bank, which is a decent amount for a small company like us. Just to introduce the board and those of you that seen the announcements that we've made recently will notice that we're planning the first stage in the succession planning process.

4:40 Just I'm Bill Moore, obviously, currently chairman and CEO. I'm gonna be moving to executive chairman role from the January 1. Apart from the the normal roles of the chairman, I focus on the on product development within business. My background is with before I joined IMAGE SCAN is with Smith's Group PLC, particularly Smith's detection. Sarah, who you'll be hearing from later, is both our financial director and company secretary. And that role doesn't particularly change from the January 1, although Sarah would be looking to pick up things to help Vince slide into his new role. Vincent, again, you'll be hearing from our product. He's moving from sales director to be what we're calling interim CEO from the January 1 and as well as his sales focus, sales and marketing focus, pick up responsibility for for operations.

5:37 We have two nonexecutive directors who are not with us on the on the platform today. Doctor Richard Lever has got a lot of experience across a wide range of security technologies. And Tim Jackson is a former FD of a a large

5:55 AIM listed company and provides help in in in those areas that come from his experience. And what we said in our recent announcement, repeated at the bottom, is that we're gonna be making this change from the January 1. And then over the six months, we're going to, obviously, support Vince in that interim CEO role and consider whether we want to make further changes to the constitution of the board at the end of that at the end of that period. So so that's a little bit about that part of the announcement that we made alongside the results. Just a word about our past and current performance. What I've done on the list chart is showing the light blue our sales and in the dark blue our operating profit over the period of 2014 to 2020 and put our share price on top of that.

6:51 And the reason for showing that is two things, really. One is to show that we have, in that period, demonstrated that we were able to achieve organic growth. And in that 2017 period, we hit around 5,000,000 of sales and a £500,000 of profit. And and the share price did, you know, respond well to that. Reached around about the 12 p level. And we then did subsequently hit a number of roadblocks that have prevented us from capitalizing on that growth to make an acquisition, which is what we plan to do at the time. And what we've been doing over the last couple of years is building the platform to get the company as soon as possible back to those kind of organic performance figures and again create that platform from which we can use other techniques, not least acquisitions to further grow the company. Our long term aim is still to build a a portfolio of

7:52 small security technology businesses and achieve a platform for sustainable sustainable growth. And a large bit of this presentation will be about things that we're putting in place both in terms of products and markets to achieve that. So with that background, I'm going to hand over to Sarah with her FD hat on to

8:20 talk through a little bit more detail how we the business performed in the in the twelve months up to the end of September. Over to you, Sarah. Thank you. Good afternoon. As you can see on the slide in front of you, we have the basic stats that we we announced as part of our our announcements last week. If I start on the left hand side, it shows that the order book was up, which is really quite pleasing for us. It was it's been a difficult year, obviously, building on a difficult year last year, so that was great to see. Sales were down a little bit. But sorry. Excuse me.

9:06 Beg your pardon. Sorry about that. Sales were down, but they built on the order book that we had going out. Excuse me. Sorry about this. I beg your pardon. I'll start again. Sorry. So we had a good order book showing some good growth, and then on the back of that was some sales. Our order book really came out in two halves. The first half the first first first half of the year was quite quiet sort of following on from last year and sort of the difficulty of COVID. The second half of year was really quite strong in terms of ordering, and we're seeing that continuing this year, which is all very pleasing. And behind that, we're seeing a really good pipeline.

9:54 We've been very good internally in terms of getting our orders turned around really promptly. So the sales like the orders reflect sort of in the two half years. So the first half of this year was not so strong. It was much stronger in the second half of the year.

10:14 Excuse me. Sorry about this. It was much stronger in the second half of the year. Our sales were were down slightly on last year on the previous year, and that was mainly because of the order book coming into the previous year had a large order in it. Once we turned that around, that gave us sort of the performance for last year, our first year of profit. And the second half of this year, obviously, then helped us deliver a good profit for this year. The great position to be in is a good gross mark gross profit. For those of you that don't know the business, our our product is a quite high margin product.

10:55 Depending exactly on what the product mix is and, you know, each year, product mix is is has quite an impact on what we deliver. The last year was the product mix was slightly different and the territories were slightly different. So we sell globally and different territories do give us different margins. I mean, one of the positive things to highlight to you on this is that the margin at 53% meant that we didn't have to give away any of the margin to get the bookings in. And sometimes when we have larger larger volume orders, we have to do that. So that was really good. The other thing that this shows is the fact that as a business internally, we've been working really well and looking after our processes. We've been looking after how we turn these orders around, and all of those are reflected in the margin. You don't necessarily see it in sort of detail, but that really reflects a really good effort by the whole team.

11:46 I suppose the other thing I ought to pop into the gross margin is the fact that we have had one or two supply chain issues. Everyone's sort of seen the media about packaging and electronic components. Mainly, the packaging have impacted us, but not greatly in the year. Electronic components probably more into the follow-up into this this financial year. But, again, it reflects the good work we've been doing with our suppliers, working with them in terms of dealing with forecasts, working with them to find out where where the shortfalls are coming. So that all is a really good credit to the whole team. In between gross profit and tax, gross profit and net profit is obviously overheads, and overheads really well contained in the year. As a business, we have quite fixed overheads.

12:33 So there's sort of a level of turnover we need in order to cover those, which we've obviously done.

12:41 But and that with the two sort of discretionary ones of marketing and r and d. Excuse me. Sorry about that. Things that have impacted us this year is obviously COVID. So we've done some targeted furlough, which should brought our overheads down a little bit. We haven't done so many shows in marketing, and Vince will pick up on how we've managed to mitigate that. But that's obviously contributed to slightly improved overhead position. And then the last thing we've done is we've looked at the way we treat our overheads. And, again, if you're technically minded, accounting standards require you to capitalize r and d expenditure based on certain standards. As a business, we've taken those, and we've sort of created higher standards because it's very easy just to put normal on the balance sheet and create problems for future years, which we're not fair to do.

13:30 But we have sort of taken a few key products, products, the ones that we've launched or about to launch. And again, we'll touch on those later in the presentation and move those into the balance sheet, which increases the profit a little bit more for us, obviously, charging the costs in future years against the revenue as they come in. At the bottom of the page, you'll see two notes on year end order book, which was slightly down again on this time last year, not significantly, and actually probably reflects as much the fact that the team had been really strong in turning the odds around really quickly and getting them out the door. Behind that is also control of stock and control of other working capital. Stock in particular is a significant part of our business.

14:17 And we we have a stock holding policy, which we try and keep keep the minimum amount while allowing us to turn orders around really promptly for us customers, and that's reflecting in our position for this year. So it's a really good credible year, second year of profit, which is really good for the business, I think. If I pop on to the next slide, this sort of just reiterates exactly what I was saying. I suppose one thing I didn't actually say at the start, I apologize, was that our orders are quite lumpy. If you don't know us, working with government contracts is not a smooth, predictable thing. It was always difficult for me even on forecasting. And we you could see that as being partly about COVID, but I think actually it's also just about the nature of our business.

15:04 Some years, you will have more lumpy order sales than other years. But if you look to the second graph, you can see how orders and sales are very, very closely linked. The guys are retaining them down really quickly, which is great news for us. It means that we're getting our working capital working nicely.

15:21 And then I suppose if you look from the second slide to the third slide, the point I'd like to make you is obviously that, as I said, working that overheads are relatively fixed. And therefore, once you get over to a certain level of sales, your profit turns around quite quickly. So that looking forward, you know, once we start to grow ourselves just a little bit more, we suddenly make an awful lot more profit. I think I've covered all of those, Bill. So if I hand back. Yeah. Thank you, Sarah. So a quick run through there of our performance in in previous financial year. I'm now gonna hand over to Vince and ask him to talk about our new product development and some of our sales achievements. And perhaps, Vince, while you're talking, you could pick up Simon's question about how we go to market and recurring revenue is probably appropriate for you to cover that in your presentation.

16:16 Yeah. I will do. Thank you very much, Bill, and thank you, Sarah. So just a brief introduction to myself. I joined IMAGE SCAN in 2008. I emanated from a electrical and manufacturing engineering background and spent the past thirty years in various sales and marketing functions across a variety of companies and indeed a range of industries ranging from the power generation, ship propulsion, oil and gas petrochem industry, and also the measurement metrology industry. So since 2008, as Bill mentioned, we've been trying to commercialize and commoditize the technology that we have within IMAGE SCAN three d X-ray. And one of those ways of doing that is in this new cabinet based X-ray system that we're going to show you here. And I'm just going to introduce this with a a video so that you can just get a a feel for the use of the product. And the interesting point about this video is the fact that this video was developed and created in the new online demonstration facility that we developed here at the premises just outside Loughborough to show our products across the globe due to the restrictions on exhibitions and travel.

17:34 So as you can see, this is a very contemporary looking piece of equipment. We look really at home in the front of a corporate building bank, commercial offices, and it's got a really ease of use. You can see the touch screen capability. So we're maximizing ease of use and producing some exquisite image quality. The slight difference with this product compared to the other products like this in the marketplace is that you could see there that we could fit a typical cabin bag size baggage in there. These systems were originally designed and built around mail screening, so mail packages and parcels. But we've extended the capability to include the ability to inspect carry on cabin bags so it can be used in the front of house in lieu of a traditional baggage scanning machine.

18:22 And as I say, we spent the lockdown period making sure that we could reach our clients and our partners. So in terms of the the the sales process, we have built up a very extensive network of partners. Bill mentioned we've got installations of our systems in over 64 discrete territories, countries across the globe. And to do

18:45 that, we operate predominantly through a range of partners. So our partners, we have a range of over 50 partners. Some of these have been with us for a very long time, very well established, and understand our product very well. A number have their own demonstration pieces of equipment as well, and a lot of the sales process tends to be governmental organizations. And sometimes these sales processes can take anything from, six months up to eighteen months and indeed sometimes longer. So the predominant mode for sale of the portable X-ray system, which tends to be the bread and butter of our business, is is done through agents and through government sales. The, expanding product range, what, this slide shows here is the new cabinet CXI system. So we've introduced this, to, develop a market in more commercial buildings, some government institutions, courthouses, and prisons.

19:46 And what we've done is we've repurposed the technology that we've had for over ten years in the EUD world, the IED, our portable X-ray, and place that within this cabinet system, put it in a nice new wrapping with very easy to use software interface, and we're taking that to market through existing partners as well. Now bearing in mind this product was released during the lockdown period year. We're delighted with the fact that we're able to demonstrate this equipment online and indeed receive our first order from,

20:17 an organization in Hong Kong. This is the typical market we're aiming at with this product, where, space is a premium, and the footprint of the equipment is is is key to its installation. So indeed, the first installation actually takes this cabinet based system with a smaller footprint and replaces a conveyor system that the the incumbent customer previously had.

20:45 So one of the other things that we do need to do to develop our our product range is reintroduce a conveyor ice system. Traditionally, twenty five, thirty years ago, three d X-ray launched an axis three d system, and it was a stereoscopic three d system into the marketplace. Now history has moved on quite a bit since then, and we are now going to reintroduce a conveyorized system into the marketplace. We're taking the core technology from a partner we have in Asia. We've been working with these these these guys for quite some time. We've taken two of their systems over into The UK. We've stripped them down and had a look at the build quality. Bearing in mind, we've got our own software designers, our system designers, electronics designers, and mechanical engineers within our facility here.

21:37 We're able to strip this machine down, investigate it, and check it, and and ensure that we were happy to put our three d X-ray brand on it, and indeed wrap it with the same themes and, design cues as we've launched the CXI. This product is going to be released in the early part of our financial year 2022. One of the other things I would say about this product is that we shipped one of these units over to The US where we've got a an ex marine EOD technician, and he's had thirty years in the security industry where he was also responsible in the marshal surface, the US marshal service, for investigating and inspecting the various X-ray equipment

22:21 and walk through metal detectors that were deployed in over 800 courtrooms in The USA. So he had a look at this system and was very pleased with the capability and the performance of the system, which gives us great confidence to introduce this into the market in the coming year.

22:38 So let's just looking back on f y twenty one. We recruited a couple of new key customers. The Asian customer was a significant winner of a fairly high volume of portable X-ray equipment. And the typical portable X-ray equipment you see there, which is the large panel behind the ammunition box and the portable generator in front, and it's deployed there with a gentleman in in his bomb suit. But the new Asian customer, was following a recommendation, and it's a long standing good partner we have in Southeast Asia. The original deployment was for considerable number of units in a metropolitan city. The local border force, had a view of this from and recommendation from the Metropolitan City Force, and they invested in a significant number of these to secure their borders.

23:30 The other two notable points there, Royal Air Force and the UK Police Force, these were the only two notable investments in The UK in portable X-ray. The UK is not renowned for investing very heavily in in technology,

23:43 and for us three d X-ray to win these from not just UK competition, but global competition, was a real endorsement of the technology that we have. So some of the key points that these guys noted is the ease of use and the quality of imagery that we're able to produce from these systems. And indeed, the Royal Air Force bought what we call a combi system, which was a large panel combined with a small panel, which in essence gives them a two system capability without paying the same as a two system price. So we're very pleased with both of those, and they're very good references to have. 90% of our business in the portable X-ray market is overseas. And one of the markets that is very large and has been traditionally very hard for anybody outside of The US to break into

24:33 has been with the US police departments and federal agencies out there. As I mentioned previously, we've recruited an ex marine EOD guy. He's got thirty years of experience in security. He finished up actually being a an EOD trainer for the marines and indeed does advanced X-ray interpretation courses. And that's very much how the two sales into The US agencies have occurred. John Howell has undertaken training programs of advanced X-ray interpretation where he has used our equipment to demonstrate the capabilities and what you should be looking for in an advanced portable X-ray system. So So the US police department was a very prestigious department, and we know that the both the Boston bomb squad and the Cambridge bomb squads have had a look at our equipment and are very impressed with it. And the same with the federal agency. There's a US agency. They're responsible for aviation security.

25:35 They've taken delivery of one of our first systems out there. And we see this market as very key. It's a very difficult market to break into as we are not a US supplier, and The US market has very much tended to purchase from their own homegrown industries. One of the other areas that we've been looking at, which has been a real success, and this has happened during twenty

25:59 financial year, is development of the Australasian market. And we've made sales of this portable X-ray system into the Australasian market to government sales, diplomatic security teams out there, and we hope to build on that going forward. And indeed, subsequent to the financial year '20, we've actually made sales into Australia for the other newly launched product, the CXI, that we first saw the video of. So we don't just do portable X-ray on the security side or cabinet based X-ray on the security side. We also have a significant chunk of business which is based around industrial X-ray. It's a fairly well defined niche market for the inspection of catalytic converters, and more importantly, what we call the substrate or the brick that goes inside a catalytic converter that's wash coated with precious materials like platinum and palladium. And so what we do is we give the, tier one suppliers into the automotive industry the ability to analyze the amount of precious metal that's layered on these systems.

27:06 So we've got almost as we're well over 50. We're up to almost 60 installations of these across the globe. And these the beauty of these systems is that they also provide a very nice after sales revenue. We provide a twenty four seven call out facility with these systems with a two hour response time, and indeed on some of them, we have a twenty four hour to fix time. So it's quite a demanding service that's requested, but it also provides a very good revenue for three d X-ray. Now we all know the internal combustion engine is going to go through its its dying days, but we have it directly from the the manufacturers that we deal with that there is an investment program still in the next three to five years in capital equipment for inspecting catalysts for the internal combustion engine.

27:57 Now these investments will be predominantly in Eastern Europe, China, and India, but we have installations in these facilities already, and we do expect to see the continual rollout of this capital equipment in these areas. One of the other things that we undertook this year was a an enhancement and development of the software capabilities of this equipment. And this had two combined effects. One was that we became more integrated with some of our customers in terms of our software became much more integrated with their manufacturing processes, and it also gave us additional capability. And this additional capability will allow us, more scope to roll this out to similar organizations across the world.

28:43 And, yes, we do keep an eye on the future developments in terms of the beyond the three and the five year plan for the application in catalytic converters for the automotive sector. We are looking at new applications using this technology. So we've already started to have discussions and investigate the battery and fuel cell markets where our line scan technology, which is the same technology used for inspecting catalysts, could be applied to those new industries that that are developing as we speak. So in in summary, we have a strong portable market. We're breaking into new territories. We're layering new products into our extensive partner network, and we're hoping to build upon the existing service and support revenue and develop that because what we want to move away from, as Sarah mentioned, is this lumpy business. If we can have a steady revenue of support business, that would be ideal for us as well.

29:42 So I'd just now like to pass you back over to Bill. Thanks, Vince. Oops. Gonna double click there. Yeah. Thank you. So you can see there, I think Vince touched on how we go to market the new products and the fact that, you know, in growing, it wasn't just that we grew our order intake last year, but we achieved some very important new customers. And, you know, just emphasize again what Vince said about The US market. Yeah. That that's it's taken a while to get there, but we feel that that's a really significant achievement and clearly one that we're hoping to to build on. So, obviously, the important thing for investors and potential investors is not so much how we did last year. It's how we're gonna grow the business.

30:36 And we've really touched on a lot of these things. So this slide, to some extent, sort of reemphasizes those. And, you know, two two key headings really, expanding our products and and developing new markets. On the security side, we haven't talked a lot about new product in the portable x-ray world, but we are very much continuing to invest in that product range to keep it at the the high end of where it needs to be. And we, you know, watch this space. Would say we are, you know, planning a a new launch of a portable x-ray system in the in the new year.

31:22 And at the same time, adding to our product range. And and we're adding to the product range in in three different ways, I would say. You know, one is to develop our own new products in house. But and that's great. It gives us total control of the the technology. But, of course, with a limited a small company with a limited r and d team, well, you know, we can only innovate so fast. So alongside that, we are, in other instances, working in partnership with companies to take perhaps some of our technology, some of their technology, and and develop something new that's greater than the sum of the parts. That's that's part of what we're doing. And the third thing that we're doing is taking products directly from other manufacturers who perhaps don't have the market reach that we have and taking them to market with our brand. And you'll be seeing us doing more of that as well going going forwards.

32:22 And then from the marketplace side, our primary market on the security side is the is the Bond Squad. And the Bond Squad guy built the extensive route to market that we built up with our partners around the world makes it easy for us to take these new screening products, the cabinet and conveyor x rays, and take them into mail screening, access control, secure buildings, and so on. So expanding those market sectors in which we operate is important, while at the same time expanding the territories, the market geographies, if you like, to which we take those products. We've talked quite a bit about North America, but but South America is is is becoming, you know, quite good for us. And we also see opportunities, indeed, one programs in in Africa, particularly North Africa in the last year or two.

33:18 There's a question earlier about service and support, and I'll just sort of address that now. That's important for us. And one of the reasons we're to products like cabinet x-ray and conveyor x-ray is that these products are deployed in in public spaces. And by law, in pretty much any country you go to around the world, they have to inspected be inspected and safety checked and serviced at least once, if not twice, in some countries a year. And so as the deployment of those systems build up, our service and support revenue, which predominantly comes from the industrial products at the moment, will increase in the security side as well. And that, you know, that we see as a as an important trend for us, an important reason for working in those those new areas.

34:11 So just to finish with a a summary slide. Yes. Business does continue to be impacted by COVID over the last financial year, and all the signs just at the moment that that is going to continue, but I think we're doing a good job of getting our product to market in that COVID environment. Obviously, we want to be able to get on planes and get out and see customers, attend trade shows, and demonstrate and trial our equipment as as we would normally, but we're doing what we can to to work within the restrained environment that we have. The business is profitable for the second year in succession, and that's two years impacted by the pandemic. We feel that's a significant market for marker for us. And as Vince said, we're adding new customers and strengthening our our product pipeline, and these these were the opportunities for growth outcome.

35:06 And alongside that, as part of a succession plan that's been thought about by the board for some time, we are making some tweaks in responsibilities starting the first of January, and and we'll keep that under control as we as we look forward. So that's the that's the end of the the the presentation. Bill, thank you very much indeed. And thank you, Sarah and Vince also. Ladies and gentlemen, do please continue to submit your questions using the Q and A tab situated in the right hand corner of your screen. Just while the team take a few moments to view those questions that have been submitted already, I'd like to remind you the recording of the presentation, along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard on the Investor Meet company platform. I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations.

36:03 We've had a number of questions submitted during the event. Bill, perhaps if I may just hand back to you just to click on that Q and A tab, just start at the top. And if you could distribute the questions where appropriate, that'd be fantastic. Thank you. So the first the first one here is relates to whether we think that the impact of COVID on how we go to market is permanent. Vince, will you just just comment on on these new tools that we've developed and what we see happening as COVID eventually reduces its impact? Yeah. Indeed. The opening up of the exhibitions has already occurred. We have already attended one exhibition in London in September, the followed up by one in Paris, and we are, planning to exhibit in Dubai in January. So we have started to already get out into the marketplace.

36:51 These exhibitions have been good, but probably not the same footfall as previous. And indeed, one of the noticeable absentees have been the Southeast Asian and Chinese persons. But what we've been able to do is implement this conferencing facility, this demonstration room. And what we've been able to do is create a room here that has all the audio and visual communications that we require, and we can wheel in or import in any of our products, both industrial and security products, either cabinet or portable, into this facility and give people a real time demonstration of the equipment, which is is really, really good. And in fact, we can go even one better than than that. We can actually allow the customer at the other end to use the conferencing facility and use the product, through a a TeamLink hookup, as though he was in with our in with us in that in that same facility.

37:45 So just for instance, in the past week, we've undertaken demonstrations in Australia, one this morning in Kuwait, and there's one going to happen this afternoon to Ecuador. So, yes, it's preferable to be out there in person, but we are doing the very, very next best thing. And we believe that this process well, we know this process has worked with the CXI sale into Hong Kong. So physically, those guys were not able to touch and and see that equipment, but they were able to see it through the video link and the conferencing facility that we set up. And, also, at the end of the question, it talks about customer support. We've implemented exactly the same process throughout this the pandemic period. We've given the guys the tools to create videos, the servicing videos. We've allowed our partners, in various territories to undertake maintenance programs on our behalf.

38:37 We've actually been supplying calibration equipment out to customers, and we've been giving customers guided through, maintenance programs. So one of the real real positives for the support team, it's phenomenally good, is that we have not seen a dip in our support revenue over this period even though we haven't been able to travel to some of the facilities. So it's a testament to the technology that we've got and also the partner network that we've got that we've been able to continue a seamless support characteristic to our customers. Thanks, Vince. I think just to to add to that, I think my thought is that, yeah, when when we can travel again, we're not gonna suddenly stop using these online demonstration facilities. It's, I think I think, yeah, it's a it's a it's a bonus that we've developed these, and we'll carry on using them, I think, and mix that up with the travel and the live demos.

39:31 I'm gonna pick up the next one myself, which is around the shareholder issues regarding previous m and a plans, and I've just noticed there's a question later about m and a opportunities. Just a little bit of background for those not familiar with it. At that period, twenty seventeen, eighteen, when we'd, you know, got the the price of the company up and value of the the business up, we did line up a m and a acquisition opportunity that we'd been working on for the last year or two. Unfortunately, in terms of timing, we then hit a number of speed bumps that impacted the share price while we were going through the acquisition process, and we ended up raising part of having to raise part of the funds for the acquisition at price that was not palatable to our larger shareholder who holds about 23% of the of the stock.

40:26 And having been very much supportive of the acquisition before, that shareholder actually pulled the plug on it at the time. And that is still the situation in terms of the makeup of the shareholder base, but and and, obviously, you know, discussions with that shareholder are very much between us and and the shareholder. But what I can say is that we have a good understanding of what conditions would need to be in place, what we would need to achieve for that shareholder to be willing to allow dilution of her stock by one means or another. And and what we're very much doing is working to achieve those conditions and and get her support. So, you know, we look at these two aspects of the business in in parallel, the the shareholder side and and and and, obviously, the performance of the business.

41:22 And then and just to answer the question about acquisition targets, yes, there are small companies with very complementary products to us there in the marketplace. And and and we believe that provided that we can get shareholder support and get our own market capital size to the point where, you know, where fundraising becomes practical and, again, that there are are opportunities. Our primary focus over the next year or so is to is to do that, you know, is to is to grow the business, get back to that £5,000,000 of sales, £500,000 of profit number, and then use that as a platform to to grow beyond that.

42:11 Do you receive better margin from service provision from sales? Sarah, just wanna answer that one quickly. Yes. Only the answer quite simply is on the whole, yes. I mean, obviously, rep represents insurance, so it has the potential not to. But as long as we've got good quality product, which we do have, we do see very good margins from it. You. Question about the Surztec collaboration that we announced recently. Vince, you just very quickly is is that's kind of your Yeah. I would do. Maybe to some extent, could you just very, very quickly quickly say what we've learned to do with that product? Indeed. So Cirsteq is a collaboration where we're going to combine technologies. So we have an inspection technology with X-ray.

42:56 The Cirsteq collaboration is to introduce a chemical detection. And what we want to do is integrate those two systems into one package, and it's something our partner network is crying out for. And indeed, we have trailed this once before and made a significant sale where two these two items have been combined previously. So we do see this as a complementary product to the portable x-ray system, and we we're going to take this to market through our partner network again as an integrated solution. I do notice also these there's a question about the competing against them as your imaging superior. The competition is quite extensive. There's a number of Israeli competitors, some in The USA, some in Europe, one particularly in in The UK.

43:46 And our imaging capability is on the level or if not better than our competition. One of the things that we do get very much very good compliments on is the ease of use of our equipment. And as we have our own software engineers in house, the feedback from the market is taken directly into our team, and then it can result in a direct output back to the marketplace, and that's very much appreciated by the customers. Thank you. Cost of shipping on margins, Sarah? Sarah's just dropped off there, Bill. Oh, okay. I'll I'll just transfer that. Back in. Thank you. Yes. Cost of shipping is a factor.

44:36 You know, some of our suppliers are far away. Some of our customers are far away. And I wouldn't say it's having a major impact at the moment, but it but it is making us think carefully about about both where we source things from and and and about our route to market. So yes is the short answer to that. Where do we hope revenue will be in five years' time? If you have access to the recent WHI note, they see us back to that sort of £5,000,000 of of of sales number in f y twenty four, and that's absolutely what we'd hope to achieve.

45:22 But we don't just want to do that. We have a product road map that goes out five years. And and in the last part of that period, we're looking to develop higher value products. I mean, higher sales value per product than than our current product range. And so we would want to, you know, continue that growth beyond that that point. But the WHI note does give that perspective slightly long term perspective, and that's now in public in the public domain. I touched on interesting acquisition opportunities. Does the new product CXR, I guess that refers to come with come with free support? More more of warranty period, isn't it, Vince? Yeah. That's right. So, obviously, we we come with with the basic warranty.

46:22 And during installation, we will give and we also offer a support contract as part of the new equipment sale. So many of the industrial pieces of equipment go out with a support contract as part of the new capital equipment sale. And we make that offer with the CXI and also our portable equipment as well. Yeah. The next question, we Vince touched on screening batteries and other markets. Can't say too much about that at this point, but, Vince, I just wanna touch on some of the former customers that we're we're now talking to in a in a in a different context with without necessarily naming them. Yeah. Indeed. I mean, we've we've got a long history with some chemical based organizations, and that those guys are moving into either battery or fuel cell production, and we're talking with those.

47:17 And we're also looking at talking or have been talking to some automotive OEMs as well. It's very early stages, and that is a direct relationship with three d X-ray headquarters in our technology team here and the end users because very much it's an exploratory stage for X-ray in in the battery market, certainly in relation to the automotive industry. In relation to the consumer industry, your double a batteries, etcetera, etcetera. That market is a historically old market dominated by Japanese or Taiwanese. But the automotive market and automotive batteries and fuel cells is very much an emerging market, and there is no real incumbent in terms of in line inspection of those systems yet. Thank you, Vince.

48:02 So I think the final question here is the the perfect one to finish on, which is not not even really a question. It's someone saying thank you for your presentation and telling us they've just purchased a 100,000 shares, which feel feels like like a good spot to Great. A great spot to wrap up on, Bill. So thank you very much indeed, Bill. Vince, Sarah, thank you very much indeed for updating investors today. Bill, perhaps if there was just any final closing words, just a final couple of seconds, and then we'll redirect the attendees to give you some feedback. Yeah. So thank you, everyone, for listening. This is first time we've done this kind of thing on this platform. It's been been a pleasure to talk to you.

48:48 As as you can see, we're yeah. We are a small business, but we're working very hard to to make it otherwise and doing that by a very ambitious product development program. We have the route to market in place for those products to be successful as we get them out into the market, and and that's really our platform for growth over the over the next over the next few years. And, you know, I very much look forward to working with Vince and Sarah and indeed the rest of the fantastic team that we have up near Loughborough to to drive those plans forward. Thank you for your time. Bill, thank you, Bill Seraphin. Thank you again for updating Investor Day. Please ask investors not to close the session. It should be automatically redirected for the opportunity to provide your feedback in order that the management can better understand your views and expectations.

49:42 This will only take a few moments to complete and is greatly valued by the company. On behalf of the management team of IMAGE SCAN HOLDINGS PLC, we'd like to thank you for attending today's session. That concludes today's presentation. Thank you, and good afternoon. Thank you.