Northern Bear (LSE:NTBR) — Preliminary results for the year ended 31 March 2026

0:00 Good afternoon and welcome to the NORTHERN BEAR PLC Investor Presentation. Throughout this recorded 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. Please just simply type in your questions and press send. Before we begin, I'd like to make the following poll. And I'd to hand you over to John Davies, CEO. Good afternoon, sir. Good afternoon. Thanks, Charlie. Good afternoon, everybody. I'd like to welcome to you to our investor presentation for the year end March 2026.

0:30 I'm John Davies. I'm the CEO of the group, and I have with me Jim Waring, who is our interim FD. The areas I'm gonna cover are gonna give an overview of all of the businesses. We're gonna look at highlights in the year. Jim is gonna cover financial performance, and then we're gonna look at strategies and operations going forward.

0:59 So the group, we're basically be made up of 10 businesses in the North Of England. I'll run through the various divisions. We've got three roofing companies. We have Jennings Roofing, which has a nice public sector and private sector mix. Springs Roofing, which actually has our widest delivery in the group, and they have a lot of social housing clients as well as have private house building and commercial and are pretty strong at the minute. And Wensley Roofing, which has 75% new sales house building, but also has their solar delivery, which is up and running now within that business. And actually, at the moment, they're purchasing over £500,000 worth of solar panels per annum. We'll just move on to the materials handling business, Alcoa.

1:46 It's a Mitsubishi dealership and has over 500, forklifts in its fleet, and it carries out a full remit of sales, leasing, maintenance, and long term and short term rentals. Just move on to the specialist building services. We have MGM, which is a traditional construction company with over 40 tradesmen, and it specializes in historic restoration and maintenance frameworks for local authorities. However, it does also do numerous larger projects. Arcas is a fast track project management business, a 100% subcontract delivery, and specializes in education, blue chip clients, and refurbishment works. Listers is our electrical contractor based in York, and it has strong delivery of decarbonization within the solar and LED areas.

2:41 And the clients are basically health and education that they work for. Callisto Glass Facades, who I'll cover later, so that carries out design and installation of glass facades work for me and contractors. And our fire stopping business carries out fire stopping works and passive fire stopping works nationally and also carries out design works, and I'll cover that off later on the presentation. And finally, NORTHERN BEAR SAFETY carries out all in house training in the group as well as for some external clients.

3:21 Just covering off some of those as well, the client base within the group, is a good mix of public and private sector, fifty fifty. And we do our clients range NHS, education, university, social housing, national private housing developers, and a lot of blue chip private clients include hotel groups. The businesses are fully autonomous. We will cater separately, and have a clear communication and leadership. And the group really supports the business with finance strategy, governance and growth, and the general support across all the businesses, particularly with regards to synergies and cross trading. I'll just cover our operational highlights in the year. Specific to the year, we've got strong underlying performance, particularly in the first six months.

4:10 We settled a material historical claim within isolates in the first six months.

4:15 We've been developing Callisto glass facades as a business in the year. The private sector work has slowed, with delayed contract awards throughout the year, particularly in the last six months, and we've supported businesses through that part in the last six months of the year. The long term operational highlights, we've continued to ensure we've got a balanced client portfolio, which is absolutely paramount for us. We've focused and support the business on its organic growth strategies, particularly in areas where we know there's profitability. Engaged in acquisition opportunities, we've been looking at throughout the course of the year and look at numerous opportunities. Unfortunately, some of them haven't come to fruition, but we will continue to look at those. Decarbonization opportunities, we've been focusing on throughout the group.

5:01 We'll continue to drive our cash position, and we've also invested in people and premises. So I'll just hand over to Jim now to cover finance. Thanks for that, John. So firstly, we've got a a financial highlights slide to show, with some of the key figures on comparing year ended March 26 to year ended March 25, and we're going to some of these a bit more detail in the further slides. So the revenue of financial year ended March 26 was 86,100,000. It's 10.2% increase from prior year. We've had some really good revenue growth in a number of our businesses year on year, particularly MGM, Isola, Arcas, J Lister Electrical, and Springs Roofing.

5:58 Our gross margin for the year was 25.5%, which was a 0.9% increase on the prior year. A number of reasons for this, we're being quite selective in the contracts that we bid for and tender for, ensure that we are able to generate what we consider to be an acceptable margin on the project. We also have been taking advantage of the size of the group and negotiating some of our materials purchases in larger quantities, which we're able to do for a number of group companies. We have been under some pressure during the second half of the year ended March 2026 In terms of material price increases, some of that's been driven by the geopolitical climate and such like.

6:48 Our adjusted operating profit for the year was 3,800,000, which was down 1.9% compared to the prior year. The adjusted operating profit is after a couple of adjustments, an onerous rental provision and a one off nonrecurring profit in our specialist building services area. Cash flow before financing, 6,900,000 for the year, which trends quite in line with the EBITDA reported for the year. The adjusted earnings per share, 22.7%, which is an increase of 3.5p per share in the previous year. And at the end of the year, our net cash was 6,200,000 compared to prior year of 2,200,000.

7:41 So that was 6,200,000 of cash and no external debt. Going on with the financial performance, a little bit more detail now. What we have is a five year comparison to show how the business has trended from the year ended March 2022 through March 2026. And there's been some significant increases in revenue, which has increased 9% on a cumulative annual basis over the five years. Adjusted operating profit, which has increased by 9.7% across the five years from 2,600,000 in March 2022 through to 3,800,000,000 in March 2026, which is quite a a substantial and sustained increase.

8:32 Our gross margins increased across the five year period as well, which, as we mentioned, is by us focusing on higher quality contracts. And our adjusted operating margin on an absolute terms has increased by 0.4% over the five years. 2025 was a particularly good year in terms of adjusted operating margin. 2026 was good as well. However, it was impacted, as we've mentioned, by some of the headwinds in half two of the year.

9:08 So moving on to the income statement now. We've mentioned the increase in revenue from year on year and the increase in gross profit and gross margin percentage. Our net operating costs, our operating expenses have increased by a million pounds year on year. The large proportion of this is people cost investment in our people. We're always looking to recruit, train, retain people, retain good people, and develop the people who are gonna lead the businesses in the future as well, keep the pipeline of, of progression going. Reported operating profit for the year, 5,100,000 compared to twenty twenty five's 3,400,000.

9:56 When we adjust for the the adjusting items, namely the owner of lease provision and the one off contracts profit, then we get an adjusted operating profit of 3,800,000 versus a comparable 3,800,000. In terms of basic earnings per share, it was 30.2p per share for the year ended 03/31/2026, which is a significant increase from March twenty twenty five's 16.8p And an adjusted basic earnings per share has increased 3.5p per share, up from 19.2p to 22.7p.

10:40 We thought it would be useful to bridge between our reported operating profit for the year ended March 25 through to the year ended March 26 to get give a bit of a flavor about, how things have changed within the business. So there's been a small increase in corporate operating costs over the period compared to prior year. Some of that's people cost, some of it's insurance cost, and some of it's other general corporate operating costs. We've then got a net 137,000 onerous lease provision. So this is in the Jennings business where during the year ended March 26, Jennings actually moved into the offices that had been occupied by H. Peel.

11:29 The purpose of this really was for Jennings to have a better geographical spread coverage, accessibility to some of its key customers, and that made sense from a strategic point of view to do the office move. So the provision's being made there to to cover the rent costs, rate costs, and all that kind of, cost in relation to Jennings' previous office. We then look at the underlying operating profit in building services, That was a fantastic year for the business. Operating profit for the building services on an underlying basis has increased by almost a million pound year on year. And a lot of that was driven by the increased activity that we mentioned earlier on, namely increased revenues in MGM, Isla, Arcas, JLister Electrical.

12:27 We then have pulled out what we consider to be nonrecurring profit on contracts within building services. So these are contracts that we we worked on and we, we generated what we consider to be nonrecurring profits. The roofing business or the roofing division, there's been a small reduction in revenue year on year. In addition to that, there's been some extra costs involved in the business in terms of materials, things like roofing tiles increased towards the the back end of last year. We continued investing in people, so we had some increased people costs. There's also costs associated with Wensley obtaining their MCS accreditation to be able to do solar.

13:15 And for Springs Roofing, starting the process of getting their MCS accreditation too. And then materials handling, it was a strong year for Alcoa, performed well, and their operating profits increased by a 143,000 compared to the prior year.

13:38 Moving on to the balance sheet now. The business has a very strong balance sheet. As of March 2026, we had just over £4,000,000 of higher fleet. These are forklift trucks within ALCORE that are leased out to customers or hired out to customers. We had just over 4,000,000 pounds of other fixed assets, and these typically tend to be vehicles for many of the businesses that travel to do the work that they do. There's also some other bits of light equipment and things like that. We try and stay lean where possible on stocks. So typically, we would buy stocks in just prior to contract work beginning unless we were aware that there was going to be a price increase coming down the line, or if we were aware that there was likely a bit material shortage at any point soon, then we'd try and hold a bit of buffer stock. But generally speaking, we try and stay light on stock.

14:39 We ended the year with £6,200,000 of cash compared to just under £4,000,000 the year before, and we had no external bank debt at March 2026. All of the existing bank debt was repaid early ahead of schedule in September 25. Our return on capital employed for the year increased by 4.5, so 17.8% for the year ended March 26.

15:14 Moving on to cash generation within the business, cash utilization within the business. We bridged from where we ended at 03/31/2025 through to where we ended the 03/31/2026. So our cash generated from operations is just less than 6,900,000, and this corresponded quite, quite nicely with the EBITDA of the business, which was also 6,900,000, which would imply a 100% operating cash conversion. It's probably worth noting, and we have said this on numerous occasions, that the cash position of the business can fluctuate by between 1.5 and £2,000,000 at any given point in time. And it really just depends on the timings of customer payments or customer receipts and supplier payments.

16:08 So I guess it's probably worth pointing out that in the cash position at the year ended 03/31/2026, there was about £1,500,000 worth of cash that we'd received in advance from some of our public sector clients. We also paid just over £600,000 of tax during the year. We had a net capital expenditure of £1,100,000. A large proportion of that was investment in the, in the fleet, in the forklift fleet in ALCOR. However, there are also leasehold improvements in the Wensley new offices that they occupied during the year. And when Jennings moved to the old appeals office, there's also some work to be done there as well.

16:57 We've repaid £1,450,000 with the loans in the year. The large proportion of this was done in September 25, which cleared that balance down to nil. Other financing cash flows, these are really the lease finance costs and repayments. So again, they are related to HP and lease mainly on the the fleet within ALCO. And then in September 25, we paid a dividend of £482,000. We also thought it would be quite useful to look at the returns to shareholders over the past three years. So we've we've used September 23 as a starting point where we paid 4p ordinary dividend and 1p special dividend, which created £836,000.

17:53 Following that, in December 23, we did a share buyback of £3,100,000, which was funded by a £3,500,000 loan from Virgin Money. In September 24, we paid a dividend, pence per ordinary share of £275,000.

18:13 In September 25, we did 2.5p ordinary dividend and a 1p special, 482,000. And we're proposing that in September 26, we pay a 2.5p ordinary share, 5p special share of a million pounds resolution to hopefully be approved at the annual general meeting. What this would mean is that over the course of thirty six months, then the business has returned just over £5,700,000 to shareholders.

18:48 Thanks, Jim. I'm just gonna cover our strategic and operational update now. So, key group strategic drivers, up valuing our offer, which I talk about often, and there's always there. We must do that. We're absolutely limited on the amount of resource we can gain with the labor within the business, so we must offer more to our clients in order to get more back. And that goes on,

19:14 for example, in ISLA with the compliance team where we are getting a much better position to receive more back from that client and provide about a service. Improve the quality of the opportunity to avoid one in six competitive tenders get into one on one negotiations with clients are always drive. Invest for organic growth, that's tied in with the two above. We have to invest in our businesses. Develop new business, I'll cover that in the next page. That was with Callisto, which we carried out in the last twelve, eighteen months. Review acquisition opportunities. As I said before, we have looked at some this year, but, nothing's come through thus far. But we will continue to look particularly in the fire stopping sector. Drive the public and private balance, client balance, absolutely paramount, and really given the present economic climate, it's, paying some dividends, the fact we do have a decent public sector, client base.

20:10 Increase efficiencies via ISO accreditation. We're being really attacked on some cost increases at the minute, particularly with what's happening in the, economy, so we need to look internally at efficiencies throughout the business. One way of doing this is to bring in ISOs to improve what we do and actually review what we do to ensure we are doing it in a very efficient way. Focus on cash generation. We always do this. I think on Jim's presentation, you can see we have got our cash in, but that's continued throughout the business. Recognize and reward the success of our people, absolutely key, and provide support to the businesses from group in the present economic climate.

20:53 What I'd like to do is just go through the different business sectors. So and have a look at that, and we've developed we've divided this up into emerging trends, which I'll cover, and then what strategies we have in place. So and, also, we've kept the separate slide for isolating because it's a bit of a special case. We need to just go through that a little bit of detail in the presentation. So we built the services, emerging trends, tough market conditions, particularly in the private sector, that's coming through strongly, expanding our offering. Because of that, we must expand our offering in all of the businesses. Reduced client funding, particularly on the private sector, that is a bit of an issue for us, and you can see that particularly within our cast and MGM. Growth in the public sector frameworks, more prevalence in that public sector, around decarbonization and affordable homes, and higher compliance because we're looking at more work in the public sector, We need to look at higher compliance within our businesses.

21:53 So our strategies around these emerging trends are raising the profile. When the market becomes tight, we have to invest in our business development and look at the businesses, promote them further in in the region, and we must do that, going forward.

22:09 Callisto, we've got a new start up there. So Callisto started, in April 24 as a division of MGM. It's now been trading eighteen months, and it is now in April of this year became a subsidiary of MGM and a limited company. And we'd hope to think within the next twelve to eighteen months, it will step out from MGM and become a full subsidiary of NORTHERN BEAR at a group level. Card reduction, often for education and health, installation of LED light and smart controls really list us of how to really go on the back of this and continue to push that, particularly within the education sector. Up value now offer, we must do that, particularly within ARC as an MGM.

22:59 We've got to get early contractor involvement, and we have to have negotiations with clients and also look at the USP.

23:06 For example, we've got the Husq product where we've carried out one contract already last year, and we're hopeful of two, three more in the pipeline going forward in the next eighteen months. This enables us because there's a patent around this, enables us to discuss with social housing clients one on one and not go out or compare the tender market, which is one of the drivers within everything we do. Framework and public sector contracts, MGM and Arcas are actively pursuing these long term frameworks given this particularly given the environment at the minute, we're hopeful of some success in there.

23:41 Investment investment led growth, we invest in the ISOs, look at efficiencies, cholesterol glass facades, and across the whole of our group, wherever we look to invest, we also make sure that's an area where we think there's gonna be profit to come from. Helping safety and training, really a paramount within this sector. It improves our compliance. It's enhanced our reputation, and it provides training across the part of all of the businesses in the group. Isola. We'll just jump on isola now. Emerging trends within isola. Building safety act, that's caused has caused some problems during the year with delays. Hopefully, they're gonna be resolved and work will start to come forth. Building owners held accountable. This continues to grow and grow with building owners being for the issues within their buildings.

24:32 National opportunities has been become clear throughout the course of the year. There are more national opportunities in the Northeast for this business. Tier one contract remedials, this continues to roll on. We continue to work with tier ones who are doing rec vacation contracts on their historical work. And public sector, we are seeing that it's it's better funded, there's lots of funding there. And there's obviously some long term opportunities for ISO in there. So the strategies and the focus areas we're looking at, on the build and safety compliance, we now in full we now employ full time compliance team, which really does help us. It provides a one stop shop solution for our clients. It really does up value what we're offering, and it's a great route to market and actually get construction work done via direct appointments and negotiated works.

25:19 National delivery. About 30% of our turnover was nationally was outside the Northeast, and we can see that that's gonna be increasing and increase. So we opened up an office in London to give us access to the Southeast and London markets. We've also been successful on a housing council framework, which actually gives us access to all of the London boroughs. So putting this together, we have a strategy around this, and hence, we're working the London office to really push work, and the the team are working hard on that at the minute. End user clients, they have massive problems, really, and what we do is we provide a holistic solution to the existing premises, often passive fire services and systems and design, and, again, that one stop shop. People who have the end users who own buildings, this is a complicated technical issue for them, and we provide full support through that process.

26:15 Public set of frameworks, we've been pushing on that for the last twelve months, and we've had some success. So there's good funding and long term frameworks available. We've just been successful on two four year frameworks with BELIEVE Housing and Carbon Homes. And we also one of our major clients is Gentoo Homes up in the Northeast, so quite successful. And if you align that with housing council, we're quite pleased with our progress in that area. Isolates facility and training. We provide in house training to all of our clients, consultants. It really does promote the business, and it really, and brings those client back to us because they carried out their training on our premises, and also it's excellent for upskilling our, employees. Roofing.

27:03 So I'll just go through some of the emerging trends. Material increases at present, in the economic environment, particularly around plastics, and some increases coming through on roof tiles as well. The demand is still there for solar and PV integration driven by plan and the legislation. Public sector is there and seems to be becoming stronger. New build housing and solar are still there and still a a trend which is pushing through. And private development work has slowed in six months, and we have seen that in some of the roofing clients. So our strategies around this solar PV, Wenzi provide a full accredited solar product installation now, and they're developing a brand called Wenzi Solar further expand on that.

27:48 Springs are just awaiting accreditation. Their MCS accreditation will be able to do that as well, and we're hopeful we'll see that in next six months. One of the areas we we do within the business, although every business is autonomous, we do consolidate our purchasing power within the roofing contractors, and this is being helpful in trying to reduce increases that are coming through and also get a better buying power in a highly competitive market. New facilities. We've had major investments in Jennings And Wensley's, and we're having new depots now, which are already made to be able to deliver solar because we do have to have a slightly different model to be able to do that, and they're in place. Partnerships with house builders. We love to do longer term partnerships with private house builders. It does see here in the economic market that they're going back to price first, but we will continue to push that because it will be key for us to be able to get into some two to three year frameworks with the private house builders.

28:45 We also pushed that balanced portfolio between private and public sector, and that's really sort of give us a benefit, particularly in Springs Roofing over the last twelve months and going forward, where they have really went into their social housing market in a really strong way, and it's been reflected in their performance. Just gonna cover. So emerging trends, shift towards electric power fleet, which is continues, increased outsourcing from clients who just do not want to have real ownership and responsibility for forklift trucks and want us to look after them for them. Great integration of telematics. And you can imagine with the way AI is going forward, this just progresses constantly.

29:33 And market stagnation, it has been tight for, would say, six months in this market, which is, really in the logistics and manufacturing area of the of the economy. So our focus around these areas is we have full leasing leverage, and we provide a full service to our clients, whether that's secondhand sales, new sales, direct sales, long term leasing, buybacks, full maintenance contracts. We provide everything to the clients that they require, and those options are really good for us from a sales point of view. All of our engineers and sales team are fully qualified for electrification on the fleet and are fully up to speed on that, and that's part of our sales strategy. Given that the market is tightened, we have done a sales refresh again, back to some of my earlier comments. You've always gotta push on sales when things get tight, and we've got a new head of sales in the business. It was not close to things, and we've got a particular focus in the Teyside region at the minute.

30:35 Wide now offering. Obviously, we we do offer wider than just forklifts and racking systems and cleaning systems. We continue to progress that. Mitsubishi is a brand is high quality, brand in the marketplace, and our team reflect that, the services we provide, and the debt we have, and that that seems to work really well for us. Operator training, we continue to train the drivers. Clients want this, and it's really good for sales, and it's good for the sales team. And the smart telematic integration, again, the way new technology moves forward, our guys are constantly on training courses to be right at the forefront of this with our clients. So inorganic strategic priorities that are known as acquisitions.

31:28 So what we're looking for, we're looking for established businesses probably in the North Of England, and businesses would benefit and improve our group. We'd like to see them with a good blue chip blue chip client list or good private public sector mix and the type of businesses that we're looking at for fire solutions, roofing, businesses working in affordable housing, and decarbonization in businesses. The issue we've got is they're far and few apart, and often the owner operator has very high aspirations. One benefit of the present economic climate could be those aspirations start to dip a bit, and that could give us some opportunities. In particular, we do look, and we have done in the last year, looked at fire solution businesses, but to this point, there was no success.

32:17 But it will continue to do that. So in summary, key points. Normal trade has been stable in the first quarter of this year, but conditions are challenging. We've had good underlying margins achieved in the year based on sound strategies. All the divisions delivered operating growth for prior year, took advantage of one off contract profit opportunity, which we have to do. It could have caused some issues for the business it, it was involved in, but we had to take that opportunity. It was so good. Diversified customers and sectors continue throughout the group. We continue to push that. Strong cash generation from trade with good advanced payments at the year end, which Jim mentioned.

33:05 Our policy of ensuring a good mix of private public sectors working and really helping us in the current current economic climate. We'll continue to invest in the business and enable more valuable service. Investing in isolate in particular, enabling access to that Southeast market would be absolutely key for us. And on dividend, we'll propose an ordinary dividend of 2.5p and a special dividend of 5p. And the Board are confident the underlying 27 performance will be strong in the present economic environment. So thank you for your time, and we'll just hand back to Charlie now for questions. Thank you. Perfect. Thank you both for updating investors today. Could I please remind investors to submit your questions just by using the Q and A tab situated on the right hand corner of your screen. The reference recording of today's presentation will be available in the Investor Me Company platform shortly after the meeting has ended. Guys, as you can see, we received a number of questions during today's presentation. If I could just hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Yep. That's fine.

34:11 I've been taking notes and kind of, grouping the the questions. There seem to be a few themes that are are standing out through the questions. So what I'll do is I'll I'll read the questions out, and we can answer them together or individually if needed. So one of the the first ones is the Callisto Glass Facades business. How do you envisage this looking over the next three years? I'll answer that one, Jim. Callisto Glass Facades, is a business where we can see growth. The client base is tier one, tier two main contractors. The the strategy here is not about turnover. The strategy is very much about profit. We'd anticipate a 2,000,000 plus turnover in this present year, but we like to think we get that up to 3 to £4,000,000 a year turnover, which has every opportunity producing the 300 to 400,000 PBT on the back of that.

35:10 It isn't a massive team. It's a very light on overhead, and we just say this is a nice bolt on to the group. Okay. Yeah. A couple of questions themed around the the new prime minister and the new government as well. Could we, as a business, benefit if more social housing is built under the Andy Burnham government? Yes. But, we definitely could. There's two themes there. Obviously, there seems to be a thought about the North Of England, which would suit us, and also social housing would suit us. And both of those would make a big difference. They'll have to come through, though. That's the key. So regardless of that, I think we're well placed even though the economy is turning.

36:00 We have diverse clients and diverse delivery as a group, so it puts us in a really strong position compared to some of our peers. But if the new prime minister decides he wants a well, hopefully, he does want a massive input in social housing, we're well prepared for that and well placed. K. I'll give you a voice for rest, John, so I think I'll probably answer this one. It's around CapEx. So the net CapEx for the year ended March 2026 was $11,100,000. The question is kind of what level would it be in the year that we're in now? And it's our belief that the the net CapEx over the course of this year should be in line roughly with the same amount of CapEx we spent during the previous year.

36:49 Again, a proportion of this will be the higher fleet in ALCORE. There's been a couple of linked questions about, about the level of CapEx spend in ALCORE and the fact that it's a capital intensive business. I think what we've said previously, the previous investor presentations is that, yes, ALCORE is a capital intensive business. However, on a net profit basis, it returns between 2025% net profit, whereas the return on capital employed throughout the business is 17.8. Our weighted average cost of capital is around about 13.8%. And it also acts as a bit of a hedge as well. The construction industry, as we're all aware, is cyclical, goes through ups and downs, and we find that it's very useful to have something that generates consistent returns even when there's ebbs and flows in the rest of the construction industry.

37:53 I've just seen a question there, Jim. I'll probably I think it's worth answer answering, which is how we're gonna cope with working in London when our employees are based in the Northeast, and costs. So just on that, I still have been working nationally now for eighteen months. The vast I would say the vast majority of employees are based in the Northeast, but we do employ people regionally and locally. And what we tend to do is we'll work with our direct employees, and we'll use domestic subcontractors to work with them also, but only work with our employees and the training program within Isles facility as well. It's worked quite well, and we've been doing a lot of work on the South Coast. So we don't envisage being any issues with employees because our guys in the Northeast are quite happy to work work from home now.

38:44 What we do believe in, though, is steady organic growth. So when we do work in London, rest assured, we'll be doing that gradually, and we won't be taking on any £5,000,000 contracts straight away. We'll grow that, and we'll have to build in the London region. But we do think there will be good prophecy made in that area just given the amount of work and lack of businesses which are in that area, which specialize the way we do, particularly having a compliance team and that design capability. Okay. I think there's there's probably two more questions, John, where we've we've had a a number of similar questions. So given that NORTHERN BEAR historically has been acquisitive business, we put a slide up about inorganic growth opportunities. Firstly, in which areas of the business would we consider acquisitions?

39:35 Would we move into any new areas? And finally, what kind of value of acquisitions would we be looking at and how would we fund them? So a lot linked, but linked to Yeah. Acquisitions. So the main driver over the last twelve months has been in fire stopping in acquisitions. And this is obviously all our operators. The issue we have is everybody working on a fire stopping sector are making a lot of money at the minute. So we haven't added two or three different businesses to to talk to them about potential acquisition, haven't got anywhere with them, it'd be fair, because aspirations were absolutely crazy. We would also look at a roofing contractor, particularly Yorkshire based. That is something that we're really serious about so that we can actually replicate the Northeast delivery with the Yorkshire delivery.

40:29 And I'm sure shareholders recognize that the Yorkshire region is a lot larger than the Northeast Region. So we have got that track record and ability to do that. So it's really around fire stopping. The interesting thing with fire stopping is because of the marked standing of isola, it could be a position where we're actually purchasing a business to reverse into isola and change the brand because of the level of the level at which I still work at, particularly with the compliance team and the design because there'll be more profits we have from that. In terms of value, it all depends on what the business is and what what it would be. I I wouldn't really like to say where it would be, but we would be able to probably fund it via bank funding at the level we'd be looking at on that.

41:19 Is that okay? Yep. Yeah. I think in terms of funding, we mentioned that the business cash fluctuates depending on timings of customer receipts, supplier payments. So any acquisitions that we make, if there were of a certain size, would be a combination of own cash and probably external debt funding. Yeah. The other one where there's a a bit of a theme, we mentioned in H two of last year, and we've certainly seen a bit during the first quarter of this financial year as well. We've been subject to cost increases, particularly for materials and roofing, but generally across the the whole construction piece.

42:07 And the question is really how do we mitigate these and how easy are the costs to pass on and how quickly can it be passed? Sorry. So the so the issue we've had and really where the biggest impact's been in the roofing contractors, the issue is there's always a lag. So we always try to pass on increases. So for an example would be if there was a legislative change by the government, and therefore, we can plan for that. And, actually, most of our contracts, we have the ability to get an increased cost when that happens. When something like the Iran war occurs out of the blue and increase go up, it's really difficult to put those straight at the clients because we have existing contracts that need to run out.

42:53 And most of the long term contracts we have have a a clause in with an annual increase. So we do since COVID, to be fair, some of the clients, particularly on the public sector, will consider these increases, and so we deal with that. But then as soon as we can, we reflect the increased prices in our new tenders, in our annual pricing for clients, and get it back then. But there's definitely a lag with all the businesses. I would suggest three to six months. The issue we've had at the minute is with, for example, the plastics and roofing as they're putting an extra increase on for the Iran war. And if that stops, it's taken off. Well, that's really difficult to approach clients about. To be fair, we're kicking back on that as best we can. And given the size of the business there, we have had some success in that, but it does hit in the margin.

43:42 Okay. Yep. Yeah. I've spotted one just here, John, about, we mentioned earlier on in the slides that our gross margin for the year ended March 26 had improved up to 25.5%. We said that a portion of that was being selected by the contracts that we bid and tender for and trying to get into direct negotiations with customers where possible. The question is, do we think we've optimized that now or is there there more to go? But I think the feeling that I get in the current economic climate is that that 25.5% is probably as good as it's gonna get currently.

44:29 So we we are selective about our contracts. We are looking to push things more towards, direct negotiation and award. However, when there is some belt tightening among amongst sort of private sector customers and the like, you have a number of businesses competing for less amount of packages of works. So there's always, there's always price tension and and things like that. And we said that we're we're doing what we can to mitigate cost increases, such as using the whole group position to buy materials and things. So it feels like where we are at the moment in the current climate that we've probably sort of hit an an optimum point of gross margin. Yeah. I would agree with that.

45:17 But what I would say is that we continue with our long term strategies of book valuing and given the clients what they really want, but also adding stuff to it. For example, isola with the compliance team, solar as well as PV, we can get more back for that. And when things do pick up, which inevitably they will, we'll be in an even better position. So we're just gonna maintain those strategies we have of investment in the team and continue to offer that value service and the quality that we provide, and, that will come through. But I agree. Yeah. I think, we're about done, Charlie. So isn't there more coming through to be fair? Perfect, guys. Thank you for updating investors today.

46:05 Before we ask investors to share their feedback, which I know is particularly important to this company, John, if I may, could I just ask you for some closing comments? Yes. I'd just like to thank everybody for listening to the presentation. I hope it was, interesting to you all, and rest assured that the whole team in here are progressing and developing the group further, and, we'll continue to do that. So thanks for your time. Perfect. Thank you to you both once again for your presentation this afternoon. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations? On behalf of the management team of NORTHERN BEAR PLC, we would like to thank you for attending today's presentation, and good afternoon to you all.