Nexus Infrastructure (LSE:NEXS) — Interim Results

0:02 Good morning, and welcome to the NEXUS INFRASTRUCTURE PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses, which is appropriate to do so.

0:30 Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Charles Sweeney. Good morning to you. Good morning, and thank you, Alex. Morning to everybody. Thanks for your interest in NEXUS and for attending this presentation. So Don and I will be presenting the infrastructure interim results for the period to the March 31, which we published on Thursday, May 15. We have in front of us there the contents of our presentation, so we will do a brief introduction to the company, talk about our strategy and progress to date. Dawn will then pick up on the key financials. I'll look to markets. I'll talk about progress in the order book, and then we'll have a summary and close, and we'll have time for q and a.

1:22 So moving on. So NEXUS INFRASTRUCTURE, a civil engineering business, established more than forty eight years ago, operating in the Southeast. We've got as far North as Peterborough to the South down as far as the South Coast. We've got two operating subsidiaries. One is Tam Down in the house building sector, and the second is Coleman operating in water rail and some other sectors listed there.

1:55 So looking a little bit further into Tandem. So it is focused on the house building sectors, very strong brand, civil engineering of anything to do with the infrastructure through to the foundations of the housing with large housing developments. It's been recognized and has its experience capabilities in complex long term multiphase developments. Again, we'll be talking about that in further detail in this presentation. We're also going to present the fact that the housing market looks to be in a recovery process now, and Tamdown's very well placed to benefit from that going forward. So Coleman, we acquired Coleman in the beginning of this half year, and it's part of our strategy to diversify into those other sectors that I mentioned previously.

2:47 It's been in business for for more than twenty years. It operates along the South Coast from Kent right the way through to Hampshire. Principal focus is the water sector, but does have other activities, particularly rail. So strategy and progress. So we laid these out eighteen months back, and we've been talking about these in these various presentations over the last periods.

3:16 So very pleased to see that our focus on key customers has actually seen seen the order book grow in this first half. So 72,000,000 at the at this time last year, and it's 81,000,000 now. And if we actually just look beyond the end of March into April, we picked up an extra 16,000,000. Very pleased to get that too. And I can say that so far in May, we picked up a further 9,000,000. Very pleased with that. They're part of the strategy to stay very close to our customers and make sure that we can be with them as they start to grow. Expanding our market was related to need for us to diversify, not to be solely reliant on the health food sector.

4:08 And that's part of our strategy over twelve months prior to the conclusion of the acquisition, which, as I say, was in October '24. So we now get our exposure into the water sector. I will be talking a little bit more about that in the latter part of this presentation. Things have gone very well in the integration of Coleman into the business. Very pleased with progress to date on that. Very excited about that. And then on the matter of keeping things tight, focusing on financial delivery, make making sure that we are on top of things, that's been producing results this last twelve to eighteen months as well. So we do see that the although the revenue has grown, that's great, but the gross profit margins on a like for like basis, just on tamp down, it was 13.5% previously.

5:03 It's now gone up to 13.6%, which is good, but we're expecting that to improve further. But it's also the case that because we brought Coleman into the business now, that has increased the profit margins overall. So for the group, our gross margin is 14.9% in this past half year. Cash, and Don will go into that in more more detail just shortly. But cash, even after having done the acquisition and the cost of the acquisition, because of the other things that we've been doing, we've been able to maintain that cash position. In fact, actually, increase it slightly up to 9,600,000. So I think we're very well placed to proceed from here with our strategy. And I will now hand over to Dawn.

5:53 So, overall, we're pleased with how the first six months of the financial year have gone with, all key metrics positive and improving from this point last year. Revenue from the house field and sector was delivered by Tamdown and has increased by 8% to 27,800,000 in the first half of the year.

6:13 In the five months since we've acquired Coleman, they've delivered 2,800,000 in revenue as they complete projects under the previous AMP program. Gross profit increased by 31 to 4,600,000 including £800,000 from Coleman who delivered a margin of 28%. The gross margin in tandem continues to improve following the operational and financial steps taken to manage delivery and costs. The operating loss before exceptionals was reduced by 200 through the increased revenue, the increased gross profit, and the work done to reduce the overhead costs in NEXUS.

7:00 The house building sector has been slower to recover than we anticipated, and we're pleased that Terminal has recently secured several projects to increase the order book to 80,800,000 at the half year. And as Charles has already mentioned, has secured further work in April and May, taking the order book to the mid 90 millions.

7:24 We've got a well maintained cash position even after the acquisition and the exceptional costs in Coleman. This will be important over the coming months as both Tam down with its increased order book and Coleman as it starts the new AMP eight program will need working capital. As already mentioned, the group performance for the six months shows an improvement on 2024 with revenue or gross profit improving and the loss reduced. The steps taken to manage costs over the last couple of years continue to produce positive results despite the challenging market backdrop of the housing sector. We've been able to integrate Coleman into the NEXUS financial reporting system, reviewed their IT structure and people systems, making savings and improvements through use of the group resources.

8:25 The strength of the group's balance sheet continues supported by the cash of 9,600,000. This gives us the capacity to deliver the order book and support both subsidiaries as they grow. We continue to invest in owning plant as this is more cost effective operation while balancing it with hiring in plants so that we can manage the fluctuations in revenue and order book that we need to deliver. Actions taken on trade receivables are delivering positive results with aged debt and retentions reducing. As well as reducing debt, we're taking step to step to control retention balance as new contracts start considering retention caps, whether it's across the client or across the job to secure a maximum amount that they can take or by reducing the amount of retention that's actually held per contract.

9:26 The board, has also declared an interim dividend of 1p per which will be paid to shareholders on the June 27, continuing the dividend policy that we have had in place over the last few years. Charles will now start to talk about the market give you some information on the markets.

9:50 Okay. Thank you, Dawn. So first of all, let's turn to the matter of the house building sector. So on this chart, it's just to emphasize the point, that the long term on despite of housing is still there. Those of you that are close enough to the house building sector will know that the government set the target originally as 300,000 new drawings per annum and then increase that to 370,000. I mean, there's some doubts in the sector overall as to whether the 370,000 will be reached, and I I noted that in March, the OBR evaluated the situation. The OBR's evaluation was to say, not going to make the 370,000 per annum, but 300 plus thousand. So I think they I think they said 305,000 per annum should be reached by the end of the parliament. So that is still a significant gap against what we are currently as a sector being producing.

10:52 So the initiatives are there from the government's planning and infrastructure bill is going through parliament at the moment, but things that are already being done, the changes, the national planning policy framework changes at December 24. Those changes are starting to have an impact. So the government is really trying to do its best on the supply side to make things easier. So we are starting to see the benefit of that coming through. Just also turn to something else, which is the matter of in the short term, in in this last couple of years, we've seen that there's been a gap between the light colored blue line is the actual number of houses completed in England.

11:47 This is ONS data released quarterly. The dark colored line is the actual numbers of starts. And so we'd even say that even if the market were not to ramp up as it is needing to do to that 300 plus thousand a year, there's been a gap. And sooner or later, that's going to have to close again because otherwise, you could say that the main housing developers are just eating into their stock, if you like. So we would expect housing starts to pick up anyway in the near term. In the q and a, or shall I do it now? I'll do it now. Because I did notice that, Glenigan data I'm just gonna look to it here. Glenigan data issue, I saw it, this morning, indicating quite a significant upturn in housing starts in the last couple of of months. That's one source of data.

12:42 I also noticed that Forterra, the brick manufacturer, their q one revenue that they're basically saying that there's been a significant increase in demand from their side, 22% increase in revenue in the first quarter of this calendar year versus last year. And I also finally on this, notes that the planning portal information, which I saw mid last week, was indicating a 44% increase in the, amount of planning applications. So degree of caution required in this, probably a high degree of caution because we all don't we've because we've seen, false storms before, but there still seem to be subject to macroeconomics and nothing else crazy happening. The delays that we've had as a result of, let's say, the the chancellor's announcements last last autumn and then subsequently the whole business with United States and tariffs and so on.

13:46 That would this long term demand is finally looking like we're seeing there's going there's gonna be a pickup in the housing sector, and Dawn's given some details there before about the what our experience has been, our order book growing to a position that we've not had for some time. So so optimism can be there, but I think we just need to be careful before we get too too carried away, too excited about it. Here, if I look at the house building sector, this is from, Savile's research. This is eight PLC house builders, the average sales rates, which, again, we can see how that is from a very low point, admittedly very low point, has been ticking up. And, again, for those of you that are close to the sector, you'll be seeing that yourselves from the announcement coming from the major developers or the TW, the ones that were out most recently, I think, a week back, and they were indicating that their, experience in the in the week since January is a point seven six sales per unit.

14:55 Sorry, sales per outlet per week at point seven six in the first weeks of the year. So so looking positive, but we just need to be cautious in in how this will develop in the coming six months. Got a a few case studies, which I will talk to briefly in each, but I think it sort of comes to what we've been talking about about the experience of Tandem and how it's how it's respected for taking on large complex developments, and particularly those that can be over multiphase multiphases stretching ten years plus in their lifetime. So this one, this was awarded October. It's quite large. It's 16,000,000.

15:46 It's for Blur in Basildon. In this instance, part of the selection process was was working together with Bloor in coming up with what would be a strategy for the earthworks. I mean, when some of these sites are they're not flat when it'd be brilliant if they were. They're not flat when we turn up. So we have to come up

16:06 with a strategy of how we can flatten out the land without needing to export off the site or import into the site too many lorry loads. These can be substantial sometimes, lorry loads of soil being moved from one location to another. So in this instance, we came up with a a strategy which is good for the environment because we won't have the lorries trundle trundling up and down, but also has reduced cost and certainly will reduce the time to implement. So that was part of this. Also, I'll make reference. We'll use trenchless technology to minimize disruption in the roads in the surrounding area where we do have to undertake some development of the road infrastructure.

16:52 And if I then turn to another example, I like this picture just because it gives an an impression of the scale and also the what we start with, if you like. This is this is a typical start when we're clearing out the the earthworks and just starting into the the infrastructure, the roads for the site. In this case, again, large job, 17,000,000, Bellway Homes, Rivenholl. It's been awarded with a program of five years. I I think it can always be the case, that the likes of Bellway, should they see sales pick up, that they can accelerate that. They can ask us to to bring in the work a little bit sooner than that. But it's got a five year program, 17,000,000.

17:38 Again, same sort of statistics of the previous slides. More than 200 units will be installed. It's 2,000 meters of infrastructure roads. In this case, we'll have a sports pavilion, sports pictures, and so on will be part of the development. It's a 12 hectare site. And we've come up with a plan, in particular to reroute, the access access into a local golf club just so to make sure that this we've eliminated the interface between the public and the construction traffic. Again, I think that was valued as part of our tender for this work. And then this is the third and last case study for for this presentation on tamp down. Again, large job, 11,000,000.

18:24 But what why to mention this in particular was two years back doing this presentation, Don and myself doing this presentation, we were making reference to phase two. So we've carried out phase one. Phase two had just been awarded then. I think that was at £10,000,000 in March 23 award. So this is phase three. So it's just an example of this of what I mentioned about multiphase developments. Phase three, in this case, 185 residential units, and, yeah, 1,200 meters of road, etcetera, etcetera, etcetera. So, again, the construction strategy in this instance is has been developed to ensure we're trying to minimize the impact of disruption to the existing residents in the earlier phases.

19:08 Hopefully, that's given a good snapshot of case studies. So the summary of the market for the health business sector, I'd say you can you can read the bullet points here, but the summary is that near term, we we are seeing steady growth. Just wanna emphasize that steady growth. It's really encouraging to see it. We've we've had the pickup in the both the volume of our revenues, but also the order book has grown significantly and is looking very healthy.

19:37 And we would like that, of course, to continue. We still see government support will be there, and it might be that the government at some point may take, some sort of steps on the demand side. We'll have to see. But there is remains a significant upside potential for the sector overall.

19:57 So I'm just gonna talk, in a similar way about the the water sector. So now that we have ourselves with, with Coleman, we're we're active in the water sector. So just a few things about the water sector, again, for those that don't know too much about it. So the the programs are awarded, are put together and are awarded on five tend to be five year,

20:19 tenures. So in the case of the next five years, which has just started from April, the total expenditure agreed by Ofwat is a £104,000,000,000 for the country. So that's a significant it's almost double. It's not it's not double, but it's almost double previously. So with regards to the capital investment, specifically in developing

20:44 water for the benefits of the environment and so on and so forth, it's a four times increase in what was previously been expended. So so that's that's particular interest, of course, to construction companies. And it's part of a twenty five year strategy. We will be, unfortunately, as a water bill payers, we will have to do something about the infrastructure that we have, and that's not going to be fixed just in five years. So I've got a little bit more detail into Southern Water. And why? Because Coleman does work for other water companies, but predominantly it's Southern Water. So that in the case of Southern Water, of that 104,000,000,000, that which was agreed for them was 8,500,000,000 total expenditure, and that is 4,200,000,000 more than the previous five years. So this is why you can see that from a construction company point of view, it's particularly exciting, the water sector, because there is gonna be a significant upturn in the amount of work that is going to need to be done in the coming five years and beyond.

21:54 So Southern Water is currently challenging the the 8,500,000,000. They're actually saying we think we need more than that, but that will be a debate between Onfloor and

22:05 the Competition Markets Authority and and Southern Water. They're not alone. I think there are four or five other water companies that have done that, that that have gone through the challenge process. But as it is, the program is going ahead. We had a supply chain. Coleman attended a supply chain engagement session in March, at which Southern Water and its strategic delivery partners presented the work that was to be undertaken.

22:33 And it as I say, it is it is significant, dotted right across the south in the in the territory for Southern Water. So I'm very encouraged by that. So I've got a few examples of Coleman's work that they've done and some information of what they're doing at the moment. So this is an example of a of a typical large project at Cullman we'd undertake. It's it's it's a revamp, if you like, and an upgrade of an existing treatment facility in Lingfield in Surrey. The value was 3,600,000 approximately, and it's completed just in in '24. So there's a whole bunch of things we could talk about this, but I was, you know, just looking at the in the top left of that picture, you can see the the tank, the concrete tank that they installed 31 meters in diameter.

23:28 I mean, this is not insignificant civil engineering work. This is

23:33 substantial work. So they're always having to deal with the fact that working in it's an existing area, as in there are pipes and cables and all sorts of things that they have the expertise to be able to do this work, in a safe manner, which is one of the reasons why Coleman is highly valued by their customers. And just as of interest, as if we wouldn't have enough problems, this is actually located in a in a floodplain. So part of the construct construction strategy was actually to address how should there be problems with flooding, how that would be dealt with. So that was a really successful project.

24:13 This one, again, I really like this photo. So it's it's at Bulewater, which is I think it's the largest reservoir in the in the Southeast. So Bulewater, and you can see the guys just in the picture there, just a little little compared to the size of the dam wall, etcetera, there. It just it just gives you this the scale, understanding of the scale. But, anyway, this project is to install and I see the pipes in the background. They're they're large 1.7 meter diameter pipes and the infrastructure that goes with it, and they will be used to siphon out the water when repairs to the dam will be required in the future. So, again, lots of reasons why we could get excited about this, but certainly in terms of the criticality, it was important for this work to get completed before Christmas because they wanted so the water wanted to to be able to fill the reservoir back up again, I guess, in in anticipation of a dry spring, which is what we've we've had. So that was achieved.

25:18 This project is continuing on in terms of their completing the works, the final works to the outside of this, but the first step was get it done by the end of twenty four, as I say, so they could refill the reservoir, and that was done very successfully. Client very pleased with Coleman's performance on that. And then this here is just an example of work which is started quite recently.

25:46 This would still be the tail end of the AMP seven program. Common was busy on this phase one activities, about 500,000, which was completed mid last mid last year. Then we started into phase two the early part of this year. So that's underway at the moment. Again, it'll be many similarities to the, excuse me, the first pictures I was showing you in this case that the the tankage is is almost 25 meter diameter pipe, but it's the same sort of thing. Lots of pumps, pipework, working in and around existing kit, often very old and fragile equipment. So Coleman's expertise is, as I say, is particularly valued in their ability to deliver this type of work.

26:41 So sorry. I was just gonna do if I can get this to move. Yeah. There we go. Water sector summary. So we'll go through the bullets as I before. We're transitioning to AMP eight now. So AMP AMP seven is is tailing off. AMP eight work is currently going through the design planning process. We've attended the engagement seminar in March and really encouraged by the type of project, size of projects, and how those projects will will be scheduled out. So it's a huge increase in spend. And for the water sector overall, this is an investment which will go on for some years and decades to come.

27:32 So in terms of our our wrap up then, summary from where we're at is that with the three strategic objectives, we've taken positive steps with all three. I'm really pleased with that. H y, the half year so far, we've had increases in revenue and the order book. That momentum should see us well through the second half, and we'll also make sure we've got a good foundation for f y twenty six and beyond as that that order book is looking really quite strong. We have diversified in accordance with our plan into other sectors, as mentioned with Coleman. So that and that's gone very well. Gross margin has improved again, and and that's just as toned down without further increases, but also through the addition of of Coleman.

28:22 We do see a recovery in the house building sector, and it's positive. We've been slightly cautious just to make sure that momentum continues, but so far, indications early indications from a number of different places are looking like we subject to anything crazy going on on macroeconomics, you know, internationally. But just looking at the the housing sector, looks like we've got a process of improved improved conditions. Water sector, AMPY, it's almost double the spend, certainly is with Southern Water, and we're really, really happy with that. As Don mentioned, we've got a robust balance sheet, and that's in place so that we're gonna be able to take advantage of these growth opportunities and to deliver our strategy.

29:12 So, overall, I think we're very well placed for future growth. That brings us to the end of the main presentation. So I'll hand back to to Alex now. I think she will see if there are any questions. Fantastic. Charles thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the top right corner of your screen. I'm Charles Dawn. We have received a number of pre submitted questions, and I wanted to start off the q and a session with these. The first few questions are on profit, with the first one being, with orders and margins up, why no profit to report? Well, sorry. What was the second part of that?

29:57 So the second part was with or the first sorry. Let me just read out the entire question. With orders and margins up, why no profit to report? I think one of the parts of the order book increase was that it came a little bit later than we originally planned. So as I mentioned, it was a slight delay. I think in this six months back, we were talking about how we'd observed or in January, how we had observed there'd been a significant increase in our inquiries in October. It was substantial increase. I think we had in Tamden. We had a 100,000,000 of inquiries in October. And when the market is busy, from the time we receive a tender to when we might actually get that work on-site, might be three months.

30:45 And so it can actually be shorter than that, but three months is when the market's really busy. We had experienced that four to six months would be a period between tender activity through to work actually starting. The way it's turned out, and I'm gonna say because of the uncertainties that came through maybe from March, April time, unfortunately, that that perhaps delayed a couple of things. So what am I getting at is the order book is in. Revenues, we have now every opportunity for for revenues to increase further in the second half, and we will see that TAMDAL's profit TAMDAL will be in profit in the second half. So just a little bit of a delay to that order book build to allow us to get the revenues really, really flowing.

31:31 Thank you, Charles. And the next question we've got is, will you report profit or loss for Coleman separately? When should Coleman report a profit? Yes. We will show Coleman financials separately. We will talk about them and we will show them within the notes section of the accounts when they're published. And in the first five months, Common did deliver a profit of a £100,000. Perfect. Thank you. Next few questions are on Tammdown and Coleman. To what degree do Tammdown and Coleman rely on immigrant labor and will your costs increase as immigration declines? Yeah. I've seen this as as a in just general trade press and so on. I mean, our own experience was from a Tamdown point of view.

32:25 When we were doing the the high rise concrete framework projects in Central London, I used to notice that that is a far more prevalent case that you'd see quite a lot of people from the from Continental Europe. So we'd be working on-site. As we're currently set up on the activities we're currently doing, it's less of an issue than perhaps would have been in the past. But so as we see things at the moment, it's not it's not causing us a problem. If the market, and I'm talking about both housing sector and more generally, were to ramp up and overheat, then, of course, I think we will we will find a problem with that, and and cost will increase.

33:13 But where am I going with this is don't see it as a particular issue just at the moment. The market seems able to respond and to to take care of this. But for the longer term, if there was a significant upturn in activities, it's possible that we would see some pressure on rates. Thank you. Next question is, has Tandem down lost any major customers? I think what what is the case is that the business has had its core major housing developers for many years, many, many, many years. It is the case that from time to time, the interest in in some of the particular clients over others increases just because of their activity and perhaps their approach in the market. So we might we might back off away from from certain entities for periods of time. But if that is the case or if it has been the case, then the kind of businesses come back together again some down the track. So nothing unusual for us, I would say.

34:28 Thank you, Charles. The next question is on acquisition. What type of acquisition are you looking at? We would look at further acquisitions at the right time. So I suppose that's the first thing to say. The second thing would be it would be only in the case if it would fit with our strategy that we've been presenting today. We wanna be always involved with the right types of business. Culture is very important to us and attitude. Sector is a prime interest, of course. We only want to be involved in sectors that are not based on discretionary spend, if you like. So the but there's a a degree of transparency and, well, I was about to say certainty.

35:15 Nothing is certain in life, but a greater degree of certainty as to how what needs to get done within the time frame is not as affected by general economics as other sectors. So so it's part of our plan, and we've we're enthusiastic and returning to grow. So we'll see where the opportunities come and whether that fits with our timing. So Thank you, Charles. Moving on to the next question. Does the company have an LTIP scheme? And I believe you mentioned this in the presentation, but if you had anything to add there. No. The company doesn't have an LTIP scheme currently in place. We did have a scheme, that was settled when TriconEX and ESmart were sold back in '23, and remuneration committee is now looking at the options of what that may look like going forward.

36:15 So it's something we would like to we're investigating reintroduction of. Thank you, Dawn. Next question. Communications between financial reports is almost nonexistent, and there isn't enough liquidity in NEXUS shares. Could you announce new contract wins as they arise? Yeah. What I do see is we we try to be more active on LinkedIn. Well, that may not be I don't know if that's an appropriate thing to say whether we should be doing it, you know, in terms of formal releases of information. I guess we'll have to look into that. You do find information on LinkedIn, but I think we'll do use that as a takeaway because that's fair Subject to client confidentiality, if they're happy with that, I guess we could set something up more formal. So we'll take that away. I don't think so.

37:14 I'd I'd encourage people to, in the in the meantime, check check out LinkedIn. Maybe I'll I'll also personally put things onto LinkedIn, but that's perhaps not the the only way to do that. So we'll take that's the takeaway, see what we can do to improve that. Thank you, Charles. Next question we've got is, what impact will the recent lowering of interest rates have on the company? A bit then, well, I'm sure Don will say something about what we do with our with our money and and but that would be one thing. But the main thing by far, of course, is the impact on the the housing sector. So there have been various comments in in general about the expectation of being two or possibly three further base rate reductions in the coming year.

38:16 Yeah. So that that's the biggest impact by far. The the demand side for the housing sector and the connection between every time the rate comes down another point two five and then another point two five, the impact on mortgages, the expectations of that happening, better mortgage deals, and what that can be doing to to house for demand on the house building side. So I I as I mentioned, think, in the presentation, I don't even know. I'm speculating. But at some point, it might be that the government will do something further on demand side that they may be tempted to start to get involved again in something akin to improving a first time buyer and possibly on stamp duty, but I'm purely speculating.

39:06 But straight answer to the question is the biggest impact on us by far would be increase in the housing sector through reductions in the base rate. Thank you. We've got an investor here asking, what are retentions, and how does the company reduce them? So retentions are monies that are held back by the developer when they pay us so that they have they are building a pot of money for any remedials or items at work that need to be carried out towards the end of the contract. That's held until partly practical completion. We'll release some of it, and then it can be up to two years before the balance is then released.

39:55 We work with the developer to get them any remedial works done as soon as possible to release the retention, but we're looking at what we can do to keep those retention balances down. So I mentioned during the presentation about retention caps so that the client is holding maybe a maximum amount of money across all the projects we work on for them so that that retention amount that they're holding doesn't get to too high level. Thank you, Dawn, for clarifying. Next question we've got is in the water sector, how many years will investment be needed? And will there be an AMP nine? Yeah. So I think I touched on that before, but, yeah, it's the it's a twenty five year horizon for sure.

40:49 If you look in the all the strategic planning, is all talking about 2050. The unfortunately, the investment goes requirement investment from a bill payer point of view will continue way into the twenty fifties and beyond, driven by several different factors. One is, of course, is climate change. I think last week, there were a couple of news articles going on about drought being such dry spring. BBC had presentations on it about how we're going to deal with this, and it comes around every couple of years recently, the the impact of potential drought and housepipe bans and so on and so forth.

41:38 So environmental impact on the on the drought side, but also when it does rain, I think as we experienced last year, it's flooding all over the place. So so it has two sides, bizarrely. There's drought side and there's a flooding side. Then there's a quality side of it. We need to reduce the amount of sewage being put into the rivers and into the sea. So that's part of the statutory regulations I I talked about before, the reduction of that. And then there's the aging infrastructure. Much of it needs to get replaced if nothing else just because it's falling apart. And then there's technology, changes in technology require I mean, just even as we know about the, I don't know, the the on the IT side from what I see about supercomputers in the in the press just recently, but the whole matter of AI and the demands on cooling and so on and so forth. And then finally, there's population growth and the population growth in different parts of the country. Every time there's a new every time there's those housing estates, which has been talking about, I'm doing another 200 units. Each time there's one of those, the infrastructure requirements pick up.

42:48 So water investment for all those reasons will be significant, and it will go on, and it's at least got horizon in the statutory planning documents through to 2050. And then I think the other thing was, is there an outline? Yes. There will be an outline. I think there's a possibility that at some point, there may be a change in how the whole process is set up with off work and so on and so forth. I see that being reviewed. But but, yeah, some of the program activity for AMP eight actually just already includes into the following year, another couple of years at least into what is referred to as AMP nine. So, yes, there will be an AMP nine. Thank you, Charles. Another question on Coleman. How are things going with Coleman?

43:40 Well, from a point of view of just started with on the culture side, it's been it's been really good. It's been really enjoyable. And we couldn't we couldn't have wished for better, and I think you'll find that both ways. We are very conscious of the need to provide support and assistance and offer benefits and reductions wherever possible, but without fiddling with things. The business is a very successful business. So what we were trying to do is to bring that support and encouragement, but we're not interfering with the business operations, the customer interface, all that sort of side of it. I think it's very important for a successful acquisition to have that in mind. And I think we've we've we've got that in spades so far. So there's more to be done. I'm gonna actually also point to to Dawn because she can about some of the things that we have brought to to common. But but our intention is, as I is to continue that we just started in the first six months. And even on the I say, just the the personal relationships and so on has gone very well. So I'm very pleased with it so far. But, Dawn, turn to you.

44:58 Yes. So I think we've made some really good progress. They we've integrated them into our financial systems. We've been able to provide them with a better pension scheme. We've been able to provide them with access to some of our systems that they've not had before. And they're also talking to term down about items such as the best way to get vans or how to get equipment. So there's this bit of sharing starting to go on between the subsidiaries as well which is really positive. Thank you very much. And moving on to a few live questions. If water related projects are won, will they only be implemented by Coleman? Or is there cross selling potential for Tandem down as well?

45:51 There's an expertise and a differentiation between operating the house building sector and in the water sector. So in terms of frontline delivery, it will be done by Coleman. The the qualifications, the tickets, and the etcetera that's required is specific to the water sector. So that's not the intention. But as we're just talking about is there is as further steps down the track, there will be potential for us to get benefits from the economies of scale. We we should be able to purchase, like, aggregates and concretes and etcetera, things which are common to the two sectors. We'll be investigating how that might bring benefits to the to the subsidiaries.

46:39 So that that's for the next stage. But we're certainly not going to have water undertaken by by Tandel. That wouldn't be the plan. Thank you, Charles. And the next question has got two parts. With early signs of recovery in the housebuilding sector, how does NEXUS plan to capitalize on this market rebound? Are there any geographic or customer segments you see as particularly promising? Well, I think if we were based outside of the Southeast, we might have been saying we need to get a piece of the action in the Southeast. I think the Southeast, in terms of this market size and its growth potential, is more than enough for for our plan with Tanga. Can we do more? And, of course, we go back around the strategic planning cycle. It's just beginning just now.

47:35 So we would look at potential areas of likely to be geographic growth rather than any sector specific changes with inside of housing. So we we currently operate, like I say, as far up as as Peterborough right down to the to the South Coast, but we're predominantly if I put it on a clock face, it's almost from from the Essex base of Tamdown. You might say that it stretches across to, like, 11:11 o'clock. And so taking that over to, like, the the M 1 and maybe a little bit further stretching towards the M 40, M 1 sort of area. And then to the South, that maybe goes around to, like, 05:00.

48:22 So it's Kent. We do activities in Kent, but I'm not pushed further around, you know, into Surrey or or beyond. So there are always those steps to take, but I'd I'd say again is the housing sector just as it is being in the Southeast and for the potential growth that's in front of us is is surely more than enough to meet our our strategy and our plan for growth. Thank you. And the next question perhaps for you, Dawn. On the 09/30/2024, overdue receivables sat at approximately 7,800,000. Has this come down at all over the last six months? Yes. With a similar reduction in overdue receivables, partly, I think, due to the introduction of a commercial director into Tandem down, which has added a further degree of expertise in there and also helped free the MD up to concentrate on different areas such as work we're in.

49:26 And I think you see that in the level of cash that we have that we've been able to maintain even after the acquisition and because of the acquisition have come through. Thank you, Dawn. And next question. CapEx rose significantly in the first half. Do you expect similar levels in the second half and beyond? I don't expect similar levels in the second half. The first half was very much part of our reinvestment program. Once machines get to around four year old mark, they tend to start to cost a lot more money to keep running and we like to recycle and and upgrade them and and bring the new machines in. We will be monitoring the number of machines that we own over the next few months as we expect work to tick up just because it's more cost effective to, run our own machines than it is to hire, but we do like to keep that flexibility on the higher, numbers so that we can increase or decrease depending on the workload.

50:36 Thank you, Dawn. And perhaps some final questions here. What sectors are you targeting next for diversification? So, again, I would say that with the water sector, we have quite an opportunity in itself with will be huge. So our intention wouldn't be to stray too far away from what we've started with until we have that in place, and I'm comfortable with the with the growth and the performance in that. So with Coleman, we have also the rail sector. Coleman's already busy with the rail sector. They have activities in that. I would comment that rail sector, the CP seven, which started from March last year, has been slow in in coming through with the work. But at the moment, Coleman provides safety critical personnel into activities in the Southern region for network rail. So that that's that's a diversification, and we'll we'd like to see that to grow. But there'll be other sectors that we would that we would consider as our plan, but not just yeah. I think we'll we'll continue to push with water, rail, and we'll keep an eye on some other areas for for the future thereafter.

52:01 Thank you, Charles. And the final question we've got here is how far into the future does the order book stretch, and to what degree is it a guide to the next twelve months revenue? So I think you saw some of the cases that say that the order book for particular projects, you can see already that some of them have five years as a schedule. Of course, the profile within that varies quite quite considerably. There's a bunch of activity clearly at the start of any housing development when is putting in is doing the main earthworks and then putting in the principal infrastructure, etcetera. Then the housing plots themselves start to go in, and so Tundown is involved in putting the foundations in for the individual plots. Then there's a for that for that particular area, Tundown is pulling away from the activities.

52:58 The other trades come in and do the rest of the completion of the house, but then they come back again to complete the the landscaping and externals as it's referred to at the tail end of the work. So there's a profile to to consider. So to come to the the base of the question, with regards to the future, let's say, into f y twenty six, I mean, we would like to we would like to build the order book. And I think the order book, as it stands with the way that it will be burnt in this coming half year, we'll still have a substantial order book for the period thereafter As to how much of that will burn within the twelve months for next year, it varies across across contracts.

53:45 And I think what we'll do is we'll provide further updates in the coming months as to how we see that developing and provide a further amount of detail on that subject. But good order book, and it's got a it's got a a five year profile for some of the jobs. For some of the others, it's shorter. It's in three years or two and a half years. So we'll provide further details later in the coming months. That's great, Charles Dawn. That concludes the q and a session. So thank you for addressing those questions for investors today. And of course, the company can review all questions submitted today, and we will publish those responses on the InvestoMe company platform. But before redirecting investors to provide you with their feedback, which one is particularly important to the company, Charles, could I please ask you for a few closing comments?

54:35 Well, just I'd say thanks to to to everybody that's has attended and has listened to us present our h one. Our concluding points would would would have been in those those final slides. I mean, the volume is up. The order book is significantly up. We've continued improving the gross margin. We've maintained our cash position. In fact, we've improved it slightly beyond and that's even taking into account the the acquisition and the cost of the acquisition. We've we've got confidence in the market. It looks like it's it's pointing in the right direction in both housing and will come when AMPY gets rolling in the latter part of this year, a significant spend upturn in expenditure there.

55:20 And as Dawn has presented, the robust balance sheet will enable us to to take advantage of the growth going forward. So so we're we're optimistic, but we're trying to keep things just measured because we'll see how the housing sector comes through in the coming months and if it continues the the growth that we've seen recently. So thank you, everybody, for attending. Fantastic. Charles, Dawn, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of NEXUS INFRASTRUCTURE PLC, we'd like to thank you for attending today's presentation, and good morning to you all.