Lpa Group (LSE:LPA) — Investor Presentation

0:00 Good afternoon, and welcome to the LPA GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and will be submitted at any time by the Q and A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all questions submitted today and publish responses as appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Paul Curtis, CEO. Good afternoon to you, sir. Hi there. Good afternoon, and hi, everybody. Welcome to the LPA investor presentation, January 24. Pleased to be here. I'd like to introduce, myself and and colleague, Stuart. So I'm Paul Curtis. I'm the chief executive officer of LPA GROUP. I've been in this position since March 2020, but I've been with the group for approximately thirty five years working across all of the divisions in multiple disciplines.

0:59 Stuart? Hi. Good afternoon, everyone. I'm the chief financial officer of LPA GROUP. I joined LPA in March 23. My background is unqualified with PLC having worked in The UK and overseas. I I then then spent twenty one years with in various senior finance leadership roles in Rolls Royce Civil Aerospace in The UK and overseas. More recently, I've worked for a p backed company,

1:24 which we sold in December 23. I'm really pleased to have joined the group as we seek to grow the business. Excellent. So what we're gonna do, we've got about 25 slides to to get through. Probably take about twenty five minutes, and, obviously, then there's technical questions that we can talk through. We'll tell you a little bit about who we are. We'll go through the financials of the business, and then we'll give you a bit of a flavor to where we try to take business over the coming years.

1:52 So for those who don't know who are LPA, so we're an engineering group, UK based, that specialize in electronic and electromechanical components and systems. Our core industries are railway, aerospace and defense, and then niche industrial and infrastructure markets. We're definitely not into picking out buildings or anything like that. The infrastructure is more things like ports, railway stations, and and that type type of industry. We sell to a multitude of customers around the world and everyone from very small companies up to some of the flagship companies that you see on this slide here. I'd like to take you through a couple of these to give you a flavor of the things that we actually do.

2:42 Starting up near the top left, Siemens, which is obviously a very worldwide name. We work with them at multiple sites in The UK, but in particular, we work with them in Austria. They actually won the project from Transport for London to build a thousand new cars for the underground system. So they are currently building to replace the Piccadilly line trains that are coming running around. So I have an order for a thousand. Those will be built in Austria, and then they will come to The UK for finishing off before they go into service. We're actually one of only four UK companies that got onto that project, and we're supplying we designed and will supply the complete interior lighting systems and the door status lights for the outside.

3:28 So that's the light. So when it comes into the station, on the outside of the train, all around the doors, it's a red light or a green light, you know, trying to direct the passengers when and when not to enter the train. So that program, you'll start to see those trains come into service during '25, and that will run for about another two and a half years of production. It's actually part of a bigger project where transport for London actually requires 3,000 cars, and this is the first tranche of 1,000. For us, that's approximately £5,000,000 of revenue, and we hope that that then repeats for the other 2,000, which will be worth 10,000 of today's money, but obviously more when we take into account inflation. Whilst we're talking about supplying to transport for London, if I come down to here, you can see that we supply to them.

4:17 So at the moment, transport for London will be focusing the central line train. That train was built in the early nineties and needs to face it. So we're supplying all of the interior lighting on that project. That's another £5,000,000 project, and the first and third with Central Line is actually running about the tracks. And over the next couple of years, you will start to see those flow through as well. Coming out of transportation or in trains, we come down to Airbus. So with Airbus, we do many things directly and indirectly. So Airbus took a stake in the Bombardier Belfast facility where they build the a two twenty plane. And they there, they build composite wings for that aircraft. That's equivalent to an Airbus a two twenty size for the 100 passenger territory.

5:07 So we supply all of the plants holding the fuel pipes that run through the wings. In another area of aerospace, we supply electrical connectors to a company called Safran, and those electrical connectors go into the business class seats that go on to say the a three fifty aircraft. So as I said, we do it direct and indirect. And then there are multitude of customers here where we do similar type things. What they all demand is excellence in engineering. We have three sites, Safford, Gordon, and Faction, and Normanton, which I'll go through in a minute. But the common thing is we are not in a commodity market. Everything we do is about engineering. You've got to be right first time. You've gotta be able to back it up with service. We have highly invested factories with full capabilities from electronics and chemical engineering, and that's incredibly important to our customer base.

6:01 So LPA Connection Systems is our electromechanical division. This is up in Southampton. That site, we have robotic welding, laser cutting, five axis machining, CNCs, automated cable cutting, our full design capability to be able to design everything from simple electrical connectors to complex electrical cubicles that we sling underneath the train. So if I come back one slide and if you look here, this is about a meter and a half long, 70 centimeters then wide in-depth. That is full of electrical equipment That's designed to be slung underneath the train. So all the stress engineering that we have to do to ensure that there is no chance of this can fall off the train at a 100 miles an hour.

6:47 So that capability is what we have within within that factory. All of our sites are incredibly invested. So these parts down here, so this is for aircraft. When an aircraft comes into, say, Lanta Heathrow comes up to the gate, the first thing or the most important thing now is to turn the engines off. They want to save fuel and and not pollute the atmosphere. However, you also need to go ahead and run the air conditioning, the lights, keep the flight computers on because that plane is gonna be turning around and going out. The way you do that is you basically bring electricity in and you plug it into the nose of the plane. And so you'll see cables going into the front of the plane. We make those connectors that go into those aircraft, and we supply those all around the world. We also then do the cable carrying systems you'll see here that take the cables out to the front of the of the aircraft.

7:37 They can be done many ways for some airports like a cable carrying system. Some airports use readers and and bits. So that's our kind of electromechanical capability there. If I come on to our components division, this is channel electric. So we supply here to aviation defense and railway. Now this is not a distributor like you would expect from the Nguyen Air or the City Electrical Factor. This is actually a specialist partner for our suppliers. So we are effectively their sales and their engineering within The UK. So our teams will go and work with British Aerospace, also, as I say, Leonardo, and get the components designed into the projects. And then our suppliers protect the route to market for us so that we get the business.

8:27 So as I say, we will supply relays in in a train door system or we have relays in the load management system that's built by British Airways. We have high performance cooling fans that go into airborne radar systems. We supply USBs into passenger charging for trains and and many other things. If I go to lighting systems, this is our electronics division. So we have two state of the art surface mount production lines, first order ovens, automated inspection equipment, and we can design from from the ground up for PCB, write the software at all control aspects. So the main product that comes out of this factory is LED lighting. And for that, we are a market leader. So we supply all around Europe seems ultimately identified in Japan, into Australia, and and every.

9:24 But what we've also done is try to take that business into other areas because of the electronics capability it's got, we believe it can actually move from lighting into other areas as well. And that's something I'll explain a little bit more with the seats electronics that that you see listed here. So some operating highlights for the year. First one up here is a £5,300,000 order that we received. That was actually for the product line for the acquisition that we did in March of last year. So as it says here, we bought the product line Amazon of what was their railway connectors for UK projects. So we bought that for a 500,000. And to date, we've had orders of about £6,500,000 for that product line. We also received further orders for 2,000,000 from Siemens in Austria for the OBB. That's a very prestigious overnight sleeper train that runs around Europe. So the first project we had for that was actually a few years ago, and the initial order was 1,800,000.

10:28 And this was then a follow on order for a further 2,000,000, and we expect further awards at least another two tranches of that as we move through the coming years. Some of the work we want is actually platforms. It's a bit like the automotive. You get onto a car, they set it for a period of time. A lot of training manufacturers build a model and then sell that to multiple customers about the world. So the application of USB into aerospace, that's a key thing. We've been supplying charging onto trains for about eight, nine years now. What we're looking at now is is the aerospace industry, and that's the twofold. One, this application here is actually a new generation of helicopter that's being designed and built in The UK. And we're designed into there, which is our first aerospace application.

11:15 But we're also looking at how we can move into the commercial air as in the the big passenger airlines. The specification has changed from USB a to USB c. And therefore, over the coming couple of years, most people will have changed their phone and will have USB charging requirements rather than USB a that you see on every single aircraft flying around today. So this is a very big market that will need to happen quite quick to change that. So we're working with several customers on taking that technology we've got and applying it and see what we can do in the aviation industry, and this is the first step of that. So in regards to certification, our connection systems business achieved a s nine one hundred. That is if you want to put something onto a plane or into a defense application, you generally have to have this accreditation. Most companies will have ISO 9,001.

12:09 AS nine one hundred is a specific aviation standard that a lot of customers require if you want to move into that industry. Our components division has AS nine one twenty, which is distribution part of it. Our electronics division has Iris, which is an equivalent for the rail system. So we put this into our electromechanical connection system business because that then means all of our sites are running enhanced levels of quality system. We also see that as a big growth area because defense is a market receiving much investment at the moment. And because we have the context of our our components division, we believe we can leverage our electromechanical division capabilities into that market as well and hence putting the approval in place. They also achieved the ISO 14,001, which is the environmental standard that has come to be expected now.

13:04 Another thing of note was the continued expansion of our sales partners. When I took over in March 2020, I would estimate that we probably had about six good distributors around the world. And this is for a product range that we could sell around the world. We're now up with the acquisition of Red Box at around 50 partners around the world covering our aviation and rail market. This is absolutely essential because our plan is as well as the project business that we have is to develop the sales channels and then a stream of product coming from our engineering departments that we can feed through our managed sales channels. This will hopefully scale the business very quickly and is already working in China and various other markets.

13:51 We have the the Red Box acquisition. As I mentioned earlier, we had the Anthem acquisition in the year, and we started the new calendar year in January by the Red Box acquisition. But I'll talk about that a little bit later.

14:06 So the last three years have been quite busy. We have a complete new board, but it's not just new. The caliber is excellent. We have an LED who used to run various Siemens plants within The UK and and with Robert and Andrew, two other very good chairman and NED, and with Stuart coming on board as well. It's a a a high caliber board that positions us for for the future we want. Our factories are fully invested. We during the last few years, we finished off with with new equipment and we have state of the art manufacturing capabilities whether it's electronics or electric mechanical. We have new teams. Our connecting systems business, we have new MD, new engineering directors, new sales teams, and the same at our channel electric components division.

14:52 We're trying to rebalance the business. So not only do we have the projects that are 4,000,000, 5,000,000 at a time, but we also get some standard components running through multiple customers around the world. We've been a little bit beholden to some of our customers and delays, and that's why results have been tricky over the last few years. We're absolutely aware of that and we're trying to rebalance the business so that we have a a more favorable revenue stream. As you'll see, as mentioned earlier, we've done our first acquisitions for over twenty years. This is all part of a big strategy review that we undertook. Our goal was to be at 50,000,000 by the end of our financial year '27. Now we finished at 22,000,000 in our financial year '23. So So it does seem a big jump. But if I can go back to 2018 where we had several projects that came together at the right time, at that point, we achieved sales of 28,000,000.

15:52 If we were to add inflation to that today, it would be approximately 35,000,000. We now have more efficient and more invested factories and we have better caliber teams working around the group. So if we can get back to those same levels that we achieved in 2018 and bolt on certain acquisitions, that is our way through to 50,000,000. Along the way, we will obviously need some better investors. We have lots of shares that sit with ex employees and

16:29 family, which is where the company was first listed. Those shares will become available at some point, and we would look to hopefully move those into a a quality hand that can see future for the group as we move forward. So the investment case is here and as we've gone through, we'll carry on going through. But a couple of points I'd like to bring out here. The high barriers to entry. In every market we we are, in every country, we normally only have a handful of capacities. We're not up against a plethora of 20 or 30 people coming in from low cost economies. Everything is about quality and the service that you bring. We have invested factories as I've said. It's been a a key part. I inherited very good factories, and we've continued to to grow those.

17:16 And the sales channels. We're trying to take the business away from being this bespoke engineer and trying to become a more balanced engineer that uses different sales channels in in different different areas.

17:31 So I'm gonna pass over to Stuart, who's gonna take you through some of the financial results. Thanks, Paul. So let me take you through the the the FY '23 results. Firstly, the the income the income statement and key highlights. And I and I'll just caveat the next couple of charts because in f y twenty two, there was a significant land sale which generated 1,700,000 in cash and was a profit of 1,500,000. That obviously gets embedded throughout the key financial statements and sort of distorts a like for like comparison. So looking at the order book there, you could we actually got a record year end order book of 31,600,000 which is up 14% year on year. I'll go into a little bit more detail on that later. Order entry was remained robust during the year as well, up 30%.

18:20 From a revenue point of view, that was up 12%. Approximately, two thirds of that is volume and a third is price. We do have escalation clauses in all of our longer term contracts. On the gross margin value added line there, you can see that our gross margin has held up and more as important, the value add has slightly improved from last year, which is a sign of managing the material costs and direct labor and overheads. And that's especially important with the difficulties in recent supply chain availability and delays during the year. You'll note we do have an underlying loss again in the year of naught point one. Slightly better than that at 69 k loss and last year was 226 k loss.

19:06 The bridge to profit before tax in both periods is exceptional items. In this year, it was the negative goodwill on the purchase of the Amphenol product line. And last year, as I said, it was the sale of the land. The EPS comes off the profit before tax. Net debt has gone up during the year as you can see and that's that's mainly a result of working capital investment in the in the product line acquisition I'll come back to later. You will also note that we've proposed a dividend of 1p. This is really important to us historically up until COVID. We used to pay a dividend. We think it is really good financial practice to do that, and we plan to adopt a progressive dividend policy going forward as the group grows.

19:53 On to the balance sheet. The

19:56 the key things to pick out here is the increase in intangible assets. That's a result of the acquisition of the product line. No significant change to tangible assets. The pension scheme represents the surplus on our defined benefit scheme. This this was closed over ten years ago and is an extremely good position there. The next triennial valuation is due in May 24. The previous one in sorry. March 24. The previous one in March 21 had a surplus of a 121%. There was a surplus of a 145 in the March 23 valuation. Cash position remains strong.

20:44 The gross debt represents the primarily the bank finance, which was refinanced recently for another five years. That's last for another fifteen years. It's refinanced every five years and there's a margin there. We we pay on top of base of 2.25%. Moving on to the cash cash flow statement. So the the the key things to pull out here are that very broadly the same year on year, increasing working capital 22.5, increasing 23.4, and there were investing activities of point three in each year. The investing activities were split between property and plant and investment in our capitalized r and d.

21:35 The big change, as I mentioned, on the cash flow at the bottom there was the due to the land sale. Moving on to a little bit more detail on the order book and revenue. So what we try what we're showing here is that the order book, as I mentioned, of thirty one point six is a is a record high for a period end. It was slightly higher during the year. That is split across the three businesses. It was at 14% year on year. The biggest element of that is in lighting systems, which has the more project based business. The the pie chart on the right hand side there shows the forward split of the 31.6. 32% of that is gonna get used in f y twenty four, the current year, but you can see it spread through to 2027.

22:27 Moving on to a little bit more detail on the revenue, three charts here. The one on the left hand side by sector shows a high degree of rail of 75%. That is actually up from 72% last year. So, actually, that's up 17% year on year. Most of that is due to the purchase of the Amphenol product line. The other key key item to pull out is that aerospace and defense has gone from 13% to 20%, which represents a 69% increase. As Paul alluded to, that's due to the distributors and a new standard products. Moving across to the revenue by segment, you can see that most of that that the highest amount is is lighting systems.

23:14 That remained broadly flat year on year, and the the main increase over last year is through channel and connection systems. On the right hand side here, you've got revenue by market. The key thing to pull out here is that export revenue has gone from 31%. Sorry, 35% to 39% year on year. So I'll pass back to Paul now to go through the forward looking. Excellent. Thank you. So I know there's a question here for this as well. So how are we going to work? Basically, by organically and by acquisition. As you can see on the slide here, I'm just going to focusing on a couple of bits here. So if we look down on the organic side side on on the the left left hand hand side, standard products, lighting, relays, connectors, geophysics, strength. This is our our standard bits. So what we're looking at, how we can use that technology and move into new markets and how we can develop new products into our existing markets.

24:18 So an example here is Graham who was listed one of one of the the customers there. This is a German seat manufacturer, and we supply to them USBs and lighting products for for their seats, reading lights. So they got involved with the next generation TGV train for France for Boston. And what they required on that is actually they're they're nearly moving into aircraft technology with the seats. They want a full electric reclining seat in the train. So this means motor control actuators, etcetera. So they came to us and could we do it? So we now supply the USB, the reading light, ambient light in the seat, and then we do all of the motor control.

25:06 A fault diagnostics that then talks back to the train computer. We supply that to GROUP in Germany who then build that seat and supply it to Ulster in France to go on the flagship TGB. That's taken something there. We used to supply maybe equivalent of a million pound on that project where it would have been just lights in USB. But by designing the brand and doing everything else, that has become a £4,000,000 project. Now that's a £4,000,000 project for 50 trains. Once these 50 are built, there'll be another 50 that then go behind. So that's an example of where we can take our existing products and technology, but leverage confirm of the new products to sell to our existing customers. We're also then looking at how we take our existing products into new markets.

25:55 So I talked about USB here for trains, but we're looking at can we put them onto planes as well? And as I said earlier, we we've got that there. So we can look to to develop new products into those existing markets. We're looking at value infrastructure where we do limited, but can we take some of these products into the infrastructure? At the moment, we do special electrical connectors. So for the London underground stations that are being refurbished, they have to be of certain qualities for smoke and toxicity. So in the event of a fire, they they maintain the the connection for, say, three hours. And if they do burn, they don't give off toxic fumes. So, yes, that's important for stations, but that could also be important for buildings. It could be important for submarines or ships or various things. So where can we take our products and move into other markets? That's where we're looking for our our organic growth. Then we have our acquisition growth.

26:52 So the analog product line we bought was a competitor. They had the same kind of products doing the same kind of things with us, but they weren't really interested in moving this forward. It wasn't part of their strategy. So we bought it, as I said earlier, for £500,000. And what that actually gave us is a customer base of 2,000 counts. So this is on the electric staff need to train, which is look at numbers on the train, would be the 377, the 378, Southeast London, Great Western London. And so these trains, approximately fifteen, sixteen years old, will be around for another twenty years at least. And the connectors are really coming up for change. And so the £6,000,000 business we've had already is only a quarter of the fleet that is out there. And it is only about 30%, 40% of the products that are actually on

27:50 those cars. So that's been an absolute great example of us buying an existing marketplace. We've also done is bought Red Box. This is in existing markets, but new products have actually. As I we built a distribution channel around the world. So we have our partners in China, Australia, and and and many other places. What we did was cut the world up into into categories. So a grade, absolutely the the high GDP, lots of aircraft life. So that was absolutely essential that we had a good sales partner in all of those channels. And so I'm pleased to say that we're pretty much 95 covered in all of those a categories. We're then moving down into into the b categories to make sure we're covered there. So as soon as we acquired this company, all of our distribution networks say, do we have access to that? So the answer is yes as long as it doesn't conflict with the distributors that we picked up by actually buying that company.

28:52 So we're moving into a new product area with that. So this gives us ground power, DC ground power. And that's incredibly important because DC is a growing market around the world. And, actually, one of the things that is developing over in this section is actually new generation of electric flights. So if you look at companies like Joby, Lillian, in The UK, you have vertical airspace. This is a new breed of companies that are making electric aircraft. And I mentioned virtual airspace in The UK. They have an order book of 1,400 aircraft that they will be supplying to Delta, Virgin, people like that. We have components designed into that aircraft. But what we're looking at is all of these aircraft are gonna need charging systems similar to to cars, but it's different because it's a different technology. It's a lot more power. So what we've got with Red Box is the ability to say we've been in this industry for twenty years. It gives us a foothold in the technology that we could leverage and then look to supply into this growing market.

29:56 It also gives us a product line that we can take into our other market to play our infrastructure and and other areas there. Legislation that came out last year across Europe was that ports have to basically stop using diesel. So all the ports around the world where the boats are coming in, they can't just sit there with diesel. They've gotta have sure supply. They've gotta be bringing electric in a bit like aircraft, turn off the engines, and bring in sure supply. That's gonna be portable GPUs and and various bits of equipment. So the red box also could be leveraged further down to that. So there's some examples of how we're looking to grow organically and by acquisition to get to our goal of 50,000,000. Talking about the two we've done, just to give you some highlights of what they were.

30:41 As I said in March 23, the Amphenol product line acquisition, 500,000 investment paid for by the end of the year, and then earnings and half as we go through through the coming years. It's all in line with expectations. We fully integrated that within our Saffron Ward facility. So we manufacture everything at our site. And as I say, there's at least £50,000,000 worth of revenue, as those cars are are refurbished over the coming years. If I come down to Red Box, this was a strategic win for the whole company. Again, we will integrate that within our Saffron Morgan site. And our goal is to have that integrated by the end of April. That gives us a complete range of DC ground power equipment. And more importantly, it gives us access to The US market.

31:27 When I talked about our partners, The US was the one area where we actually really do nothing. We supply to, let's say, to to China, Australia, all through Europe, but America was a bit of a closed market to us. Interestingly, Red Box's biggest market is America, and they have a great partner over there that sells their product. We've already been in communications with them. We're going over to see them next next month, and they're very excited to being able to take our other product lines to market. So as an example of what we're buying is certainly a it's a technology, but it's also access to market.

32:07 So moving forward,

32:11 how do we decide on our acquisitions? We sat down, looked at it, and we're looking for opportunistic bolt ons, of course. Amphenol, Redbox, they are opportunistic. They're quite small. We believe we can bring them in and leverage them to more than what they are. We're also looking at on the journey, private companies up to 10,000,000 in valuation. Now this may be to get us to the 50, but it may be when we start to move beyond 50. But we set at the moment a limit for that for obvious reasons. We're looking for product driven businesses and not project. We have good project business. It's a it's currently the majority of a a lot of our turnover. What we're looking for is standard products that we can build and put through growing distribution channels.

32:56 We're looking for company with technology know how or brand. They've got to be bringing us something that is worth something. We're also looking for access to markets. So as I mentioned with the Red Box, that gives us access to America. So it gives us a good brand. It gives us credibility. It gives us a product line that we can leverage, but it gives us access to market as well. And we're also interested in acquisitions where we can use our invested factories. As I said, you know, our electromechanical, our electronic factories are state of the art. We can make anything. So if we're buying companies that are sudden work out rather than manufacturing itself, that's all added value that we can bring back within the group. So what are we looking at? We're confident about our goals of 50,000,000 for '27.

33:45 We're continuing to rebalance the business so we have a healthy split across multiple countries and products and projects. We have an acquisition pipeline. Those two that we've done are are not where we intend to end. And the Red Box acquisition is is testament to the criteria we're looking at. So we had revenue growth in in challenging times. We we need transportation. When COVID hit, our market fell from the floor. Despite that, we we kind of held the van and breakeven. We're investing heavily into the factories. We've done the strategy, shown growth, but we're really now looking to take that even further. We've got a good order book. As Stuart said earlier, 31,600,000 is a record for the year end. During the period, we actually picked up about 34, 35,000,000.

34:37 Up 24 is trading in line with expectations, and the order book and our plans give us a lot of confidence that this will progress beyond the end of twenty five. So thank you very much, and we'll now open that up to some questions. Perfect. Paul, Stuart, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just while the company take a few moments to view those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation, and thank you to all the investors for submitting those. Paul, Stuart, if I could just hand back to you just to read out those questions and give responses to do so, then I'll pick up from you at the end.

35:28 Cool. The floor is back to you. Okay. That's it. Okay. Hi. Right. Let me address a couple of the questions on cash and land. So first question is that, as I mentioned, we we we sold a piece of land in 2022 well in excess of book price. Yes. We we we did. We made a profit of 1.5 on on and and pro profit of 1,500,000 on a sale of 1,700,000. Do we intend to sell any to sell anymore or or do any sell and leasebacks? No. We don't. As we mentioned in the presentation, our three facilities are freehold. We intend to keep them like that. We believe in the long term, it's better to own our property as that's better from a from a cash point of view. And I guess linking to that, our gearing ratio, whilst it went up in the year from 3.5% to 7.7%, still remains pretty low.

36:24 So that's we're we're we're gonna keep the property where we are. The second question linked to that is, can you explain how you intend to spend the 1.7 proceeds? So, essentially, it was a conscious decision to hold on to those proceeds. And as as you'll see through the presentation there, we effectively used 500,000 of that on the acquisition of the Amphenol product line, and the balance of that is going through increased working capital, which which you need as you're growing the business. Paul, should I did you wanna answer the the one on the team? Yeah. So I'll make one too. Yeah. It was our first acquisitions for for over twenty years and definitely my my first. I've I've never done anything like that.

37:12 And so it was a bit of a a learning curve, but we've got some very good solicitors. We did a lot of research. But, also, we've got some some great skill elsewhere in the group. So Stuart's been involved with that. He was involved with the sale of his last company, you know. And we've got Alan Bates who is at the connection systems. He's been involved with with several groups before and done many acquisitions and integrated them within the factories. So, yes, we we were quite inexperienced compared to to some of the bigger groups that that do this a a lot more, but they both gone incredibly well. And we look forward to doing that. And just coming down to see some of the other questions.

38:03 Do you wanna take five? Okay. Right. So with LPA's improved performance in the second half, can we expect to continue a continued positive trajectory? So our '24 guidance is in the market where we see an increase of revenue to about 26,000,000 and an EBIT of naught point eight. And then '25 guidance is also out there at the moment with turnover go going up to 29,000,000 and a 1.3 EBIT. Greatest risks over the sort of next eighteen months, I guess, we all see it in the news. The Red Sea issues may may cause delays to delays and increased cost to components.

38:50 Inflation seems to be coming in under control whilst we've experienced project delays in the past. Most of the projects that lighting systems are working on now are actually coming into production. So there'll always be some schedule changes, but not the significant delays that we've suffered in the past. Interestingly, the the the the central line project that we're working on at the moment was initially scheduled for four years ago. That's that's just started in the last few months. So, hopefully, we're past the the the majority of that. Okay? Yeah. Absolutely. So I see a question here, six from from Colin. Do we see the growth being organic or m and a? I think as I said earlier, we we see it we see it both absolutely key to us, and we we intend to do more acquisitions. But we're definitely not going to rely on that. We've got to grow our existing businesses as well.

39:47 I guess just just just perhaps before we move to the next one, I guess the the the other point we perhaps like to push in is that the market cap's about 11,000,000 at the moment, and that assets are are near 16,000,000. So that's we've got fully invested facilities, and and that's we believe it's a good case for investment at the moment. Yeah. So coming down to what we're biggest one to last, why why should we invest in LPA? We have great technology, great people, marketplace, expanding our reach around the world, and great ambitions. We've written out some really quite difficult times, and a lot of results haven't been spectacular. A lot of good work has been and we're still here, but a lot of other companies are struggling much more.

40:36 We have a bit of a good win behind us and the strategy we've got, you know, it really could get quite exciting moving forward. And we're definitely not here just to look after this company. We're here to drive this forward. So as as Stuart said there, the share price is is currently under the net asset value. So, So, really, there's there's not much downside, but there could really be some quite exciting upside. So I'll I'll I'll leave it on that. Thank you very much for your time. Perfect. Paul, Stuart, thank you very much for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure we'll be greatly valued by the company. On behalf of the management team of LPA GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.

41:31 Thank you. Thank you.