Quartix Technologies (LSE:QTX) — Final Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the QUARTIX TECHNOLOGIES PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The 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, we'll and publish our responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, we would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to executive chairman, Andy Walters. Andy, good afternoon, sir. Good afternoon, Jake. Thank you very much. Well, thank you everyone for to for attending this call.

0:50 I have a presentation here to take you through, firstly, a brief introduction about QUARTIX for those of you not familiar with the company, and then through the performance that, we achieved last last year. So

1:03 let me start off by explaining a bit about what we what we do for those of you, who are unfamiliar with it. We provide telematics service for customers. We provide them with data which is presented in the form of operational reports on their business, which we offer as a on a subscription basis. So we fit small telematics telematics boxes into our customers' vehicles. They're typically light commercial vehicles, and we we track this their position via satellite. We also monitor what's happening with the vehicle in terms of its activity. That information is then transferred back via four g to our database servers. And from that, we email out reports to our customers and also make information available to them either by our web app or our mobile app. So that's the basis of our business.

1:58 And the most significant financial benefit that our customers derive from that is really that they can squeeze more out of the day. They they increase the capacity in their organization, and that far outweighs what they're paying us on a monthly basis. So that's the the financial basis for the for for for the, you know, for the service offering that we provide. Now since we started the company back in 2001, so I I started it back in 2001 with, with three others, we've grown to have now more than 300,000 vehicles under subscription. And you can see some of the key milestones for the business along the way. We launched our service in France in 2010, in The USA late, 2014, and then we entered Italy, Germany, and Spain in 2018, 2019. And what you'll see in those columns is a breakdown of the subscription based in units by each of those countries.

2:59 So that's that's the growth that we've enjoyed over the last twenty odd years. And now I am executive chairman, as Jake said. I returned to the company. I retired in 2021, and I returned to the company a couple years later. One of the things that I wanted to address when I came back that I could see is if you look at this chart, which is the customer base growth, was that, from 2022 to 2023, that had tailed off quite a lot. I felt that the company had lost a bit of focus, on customer acquisition, and, you know, I I I thought we could kick start that again. So what you can see, you can just make up in 2024 that, you know, I'm very pleased to say that our UK customer base started growing again, and the same with The US. So our customer bases in The UK and The United States had started to shrink, And and I and I think the business was getting a little bit or losing a little bit of focus and getting a bit distracted, and that's basically what I wanted to come back and address.

4:05 Now on in the box in the middle, I highlight really our target market. Our target market is small to medium sized enterprises, and and we've targeted those. I mean, if you work out the numbers, so we have 30,000 customers, 300,000 subscriptions, so an average of 10 vehicles per customer. So why do we target small to medium size? Well, obviously, it's quite costly adding lots of small to medium sized businesses. However, you know, it's a very defensible position once you establish that having an awful lot of small companies makes it a very sticky kind of business, and it's it's more difficult effectively to to to lose that base competitively. And our customers are in in sectors such as construction and building, service, repair, facilities main maintenance, landscape and grounds maintenance, and also the public. More recently, a lot more in the public sector, housing associations, emergency services, and even utilities.

5:11 And with each of those applications, our customers it's important to think of our businesses as we're not really into logistics. Our customers are not into logistics. There is typically a skilled person in that van who's going to work at their customer site. So it's more about the person in the van than it is about the van itself. It's it's not it's we we are not focused on heavy goods vehicles. We're not focused on the delivery of small parcels. So all of our software is oriented towards providing those people with business and operational reports. So that's, really the first thing. Second thing is I mentioned customer acquisition. One of the things I wanted to fix when I got back to the business was and this chart shows cumulative customer acquisition by month. So three years, 2020, 2021, and 2022. And what you can see in the gradient of 2022 is that by the middle of '22, that rate of customer acquisition was slowing down.

6:17 And that resulted in 2023 falling behind both '21 and '22. And what I'm very pleased to say that we've done in the last eighteen months, particularly last year, is we've now rectified that. The the the the the line there for 2024 shows how we've established kind of clear water between us and the others, the other years now, you know, the '24 and the previous years. And moving on from that, ultimately, what this is all aimed at achieving is increasing our annualized recurring revenues. And by that, what I mean is it's the value of our subscription base. So what have our customers committed to pay us by way of subscription?

7:04 And those subscriptions are collected by direct debit typically or standing order in each of our territories. And it's a key indicator of future revenue and and future revenue growth. Now in 2023, that increased by about 7.7% or £2,100,000, which was lower than the year before. So that slowdown in customer acquisition ultimately leaves leads to a slowdown in ARR growth, in turn leads to a slowdown in revenue growth. And that, again, we wanted to address. And I'm very pleased to say that last year, we increased our annualized recurring revenues by 12.2%, taking them up by 3,500,000, which was a record amount or 32.2 getting us to £32,200,000.

7:59 So that was very much ahead of revenue growth in the year, and I'll talk about that later on. And I think one of the important things well, I'll I'll come on to that in just a moment. But that was a significant new record for us, 68% ahead of the prior year. Second point, really, is that that comes from customer acquisition, but it also comes from how well we retain revenues from our existing customers. So we are very focused on revenue retention. So what I mean by that is sorry. Excuse me. So if we have a customer base at the end of the year with a a certain revenue, in that case, 28,700,000 when we started last year, This measures that customer base what what that customer base would be worth for us at the end of the year without the addition of any new customers or new business during the course of the year.

9:00 And last year, we managed to take that revenue retention up by 2.7 percentage points to 95.7%. So that meant that we were starting with that base. And then during the course of the year, as well as having improved our performance in terms of revenue retention, we added record levels of of new business. So our new business increased by 20% to 4,700,000 during during the year, taking us to 32,200,000.

9:35 And representing that in the same way that I showed with the customer acquisition growth, this is showing the cumulative growth in annualized recurring revenue by month through the years 2020, '21, and 2022. And, again, a bit like customer acquisition, you can see that by 2022 in the second half, that growth had started to slow down. The gradient decreased as the company focused more and more on some new services it was trying to develop at the time. And so there's kind of effectively an opportunity cost associated with sales and marketing being somewhat distracted by that. That resulted in 2023 slipping back to the same level of performance as '21.

10:24 And what I'm pleased to be able to announce today is that our performance in '24, shown by the orangey yellow line at the top there, is a long way ahead of any prior year. And that was achieved in part by, some price indexation at the beginning of the year. So, again, when I returned to the business at at the end of twenty three, the company, although it had undergone fairly well, being subject to fairly significant increases in input costs in terms of overheads, you know, purchases, and so on, it hadn't actually passed any of that onto our customer base. And so one of the first things that we did was to introduce price indexation, which amounted to about 3% across the customer base at the beginning of last year, which which was absolutely fine. We don't, as far as we're aware, we didn't really increase any attrition as a consequence of that. We had a small number of customer calls. I mean, we're talking about, you know, thirty, forty customer calls where we had to talk it through with customers, but we have 30,000 clients. So, you know, that has to be put in context. So we don't think we lost any business as a consequence of that.

11:38 And in any case, all of us will have had experience over the last few years of subscription prices on whatever it might be, whether it's your broadband or whether it's Spotify or Amazon Prime or any any of these things over time, you know, are either going up in price or including advertising or or some something to effectively re you know, to to help help the provider cover their costs. So in the middle of that chart, you can see in the middle of the yellow line, you can see that we had a few things in the course of the year which dented our rate a little bit. One of which was a very large contract that had been won in 2022 in The UK, which was a fixed term two year contract.

12:23 It was actually the largest contract the company had ever won, which actually was just a fixed term contract. So that came out. We also had some aspects of of debt collection and so on in France. But there are a number of things, if if you like, we we sort of tidied up in the middle of the year. And by we the time we got to the end of the year, we were able by shifting our overhead investment from, sort of some uncertain admin areas and into sales and marketing investment, we're able to increase our rate of customer acquisition and ARR growth. So that gradient towards the end was picking up quite nicely and continued into this year.

13:05 Sorry. Excuse me. So this next slide, shows ARR and ARR growth by country. In the top left, you can see the breakdown of annualized recurring revenue, the actual level at the end of last year broken down by country. And why I find the the the bottom right graph particularly interesting because although if you look at the top left one, you will see Italy, Spain, and Germany looking quite small, Look to the bottom right, and you can see quite what the potential is in those new markets for us in terms of ARR growth and how much they've grown by, in terms of their contribution to the overall, growth for the company in the year.

13:55 And, in addition to that, ARR growth in The UK trebled during the year. And France was again the strongest contributor to growth, although I've gotta say we, you know, we obviously, you know, it was the strongest contributor, but it did decrease slightly in terms of the growth it contributed. And we're on top of that. That's something we want to address this year. The USA, I think, is an important point about The USA when, again, when I returned to the company, we really were down to pretty much a skeleton crew handling The USA, and we've rebuilt that. And it was near the end of last year before that started the effect of that started to kick in. But nonetheless, we turned it around from a loss of ARR, a deficit of about 200, to positive growth of 200, which again made a huge difference to the group result overall.

14:54 I will press I mean, I know that there'll be some questions about all that. Be happy to take those later on. I'll move on to summarize the financial results for the year. And in revenue terms, we increased our revenue in the year by 8.4%. It was about 9.4, 9.5 on a constant currency basis. But, again, it's important to stress that that was largely as a result of ARR growth the previous year being under 8%. So, you know, we we would hope to achieve better than that this year based on the ARR growth last year.

15:34 Secondly, our adjusted operating profit increased by 25%, and it's adjusted for last year because in '23, we had some exceptionals and recorded a loss. So the, profit for 2024 has not been adjusted at all. That's just a comparison with the adjusted number from last year, and we're still up 25% against that. Earnings per share were at 9.885 per, you know, pence per share versus a loss last year. And we are recommending on that that we're going to pay a dividend, a final dividend of 3 p on top of the one and a half p that's already being paid. And free cash flow was, just under 2,600,000. Now that on, you know, historic basis for us I mean, that's pretty low in relation to our previous record on on on free cash flow. But I'm gonna come back to free cash flow later on because, obviously, there there are a couple of factors at play there in terms of the issues that the company faced when I returned.

16:41 So I, you know, I think we're gonna be able to put that behind us as well. In this next slide, what we have done is to break the company down into segments, hopefully, give people a better understanding of the makeup of our business and the investment that we make in customer acquisition. So, obviously, we had some connect the the company when I returned to the business 2023, immediately before I came back, I discovered that the company had acquired a business called QTX TECHNOLOGIES PLC in Germany, which was a business which had no revenues but fairly substantial cost. And for some reason, the board felt that this was gonna contribute quite strongly to the business. I disagreed, I didn't see any prospect of the company of the acquisition really making it any kind of contribution to the group. And so after some deliberation, including offering to sell the business or to give the business back to the original owners of Kinetic who didn't want it even at no cost, My only option was to liquidate it, and we have put the business into liquidation.

17:56 But that has still incurred some cost this year, but we feel that we have all the cost behind us. So that that's a column separated from the total fleet business. But if we focus on fleet, we have two subsegments, customer acquisition and fleet telematics services. And in the same way that earlier on, I was looking at new business versus existing business, fleet telematics services shows, if you like, the contribution from operating our services for those customers that we have or we had at the end of the previous year, whereas customer acquisition looks at, if you like, the p and l just for the new business one during that year. So recurring revenue from the customer acquisition segment is really just that invoicing that we're able to make of those customers in that first year. So we don't get a full year contribution. So when I talked earlier on about getting £4,700,000 worth of new business, this would be the part of that, which we were able to invoice during the year.

19:00 And then the following year, we get a full year's contribution, but it would shift into that next column along, fleet telematics service. So what you can see is that customer acquisition cost us about £7,000,000, whereas fleet telematics services operating that generated 4,600,000, 17 foot 17,460,000. And and, essentially, it's up to us how much we decide to invest in that left hand column. I just wanted to highlight that because, obviously, we take a conscious decision that we want to invest in growth, and we increased in the second half last year that growth, which I will show in the next slide. But there's a sort of breakout of total fleet came to an operating profit, 6,800,000.

19:51 But QTX, which couldn't be avoided, we couldn't, you know, cut shut it down anymore

19:57 cheaply than that, if you like, because there were various employment agreements we had to terminate and so on. Cost us actually about £460,000, but we had a fair value gain on the fact that we didn't have to pay them out the earnout that had been included in the write down we made the year before. So net impact was operating profit was just under 6,500,000. So this slide, brings out some really an an explanation I I wanted to give about what we did during the course of last year. It's very difficult to look at our results for the year as a whole and get a really good picture of what the run rate was at the end of the year because we had so much to deal with.

20:42 And once once again, we've got Connecticut in there, which cost us money in the first six months as we were winding it down or or incurring the cost of those employment agreements and so on. But we also had higher administrative expenses. So one of the things I've done since I've been back in the business is to cut back on management and administrative expenses. And so, overall, we reduced overheads in the second half by 9% compared to the first half. And that despite that reduction, because the reduction was largely in admin and kinetic, we were able to invest additional amounts in marketing. So if you look at the the orangey yellow segment at the bottom, we increased that by 11% in the second half, but reduced overheads overall. So that you know, for us, it was a a great shift in the in the structure and makeup of the business.

21:42 And by the end of the year, we reached the point where we were winning, acquiring over 700 new customers per month on a on a rolling thirty day basis, whereas it had been 400 and something when I returned to the business at the end of the year. So, you know, that really puts us in great shape, and that's continued well into the start of this year. We started off this year in January. We had a new record in new installations of 8,200 units, above previous records, and continued over 700 new customers a month despite the fact that January sometimes gets off to a slow start. So that that's that's I wanted to come back to I mentioned free cash flow. I wanted to come back to that point.

22:28 I mentioned that it you know, 2,600,000 is relatively low for us. We'd always, you know, been known as a company that generated decent return on sales and decent dividends, payments for shareholders. So last year, we achieved 2,600,000 of free cash flow, which was double the level of the year before, but still well below the potential of the business. So what I've shown here is a free cash flow bridge to the underlying free cash flow if you kind of eliminated the problems. And the problems are obviously kinetic. So we had over £600,000 worth of cash because we were contractually committed to the earnout agreement that the previous board of directors had agreed to.

23:13 That we had to pay out in September. We had the operating cost of £460,000, and we also had the four g upgrade program, which I learned about when I got back to the business in October 23, which we are we're we're going through at the moment, and that cost us, you know, about one point yeah. Over £1,300,000 in cash. And that upgrade program will continue this year and next before completion. But adding all those back, then, obviously, the underlying free cash flow would have been about £4,500,000. And then a final point, which I've noted at the bottom of that slide, is that in order to carry out that upgrade program in France, we have had to increase stocks levels in France.

23:58 And so our stock levels overall have gone up. Very difficult to work out exactly how much of that was really down to the upgrade program. So we haven't included that, but that's another element in terms of the buildup of working capital for that.

24:14 Product development. I touched on the subject of telematics hardware. Now, obviously, given the demands of the French upgrade, the upgrade in France and just a general desire to improve our profitability for the future, I kicked off a development program at the start of last year to try and reduce cost of our principal product, the TCSV telematics terminal. And I'm very pleased to say that the team completed a very radical redesign of that, probably the most radical redesign of both hardware and firmware for a decade. And that has taken about eight pounds per unit out of the cost of it. Eight pounds doesn't sound a lot, but it is when you're doing 7,000 of them a month.

25:05 So we took a prudent approach to that. So it's great that we got it into manufacturing by the end of the year, but we also have because we have many long lead items in our manufacturing, we, we have procured through till the middle of this year. So it's not until July of this year that, that's really gonna kick in, in in terms of in terms of having a benefit. And the first benefit really is gonna come, I would say say, in the in cash flow. It's gonna come in terms of the cash flow expenditure on the four g upgrade in France and also cash flow on our our general trading account. The units that we install as part of new contracts, the value or the cost of that amortized over twenty months, the first twenty months of a contract. And so therefore, as far as the p and l is concerned, it will take a bit longer to work its way through. Now although the principal objective with that development was to reduce cost,

26:07 it also has increased performance. So we now support four different satellite constellations. So not just GPS, but GLONASS, the the Russian equipment equivalent, Galileo, and also Baidu, the, Chinese, satellite constellation. So overall, that is simultaneously tracking 30 plus satellites at any one time, which helps us with some of those more awkward installations on top of batteries and so on. Our customer helps us where customers are doing self install or may not do as good in install as as as we would, for example. And then as far as application software is concerned, we made updates. So in order to sort of get that back on track and accelerate that, we commissioned a software house in Poland to help us with our mobile app, and we updated that, completing it towards the end of last year and finishing the launch and release in January, two months ago.

27:07 I think that's gone down reasonably well now. You know, customers are happy with that new interface. The web application, we introduced new new a a new user interface and a new fleet tracking application for a very limited number of reports in the middle of last year. Our goal for this year is to accelerate that development, and we will invest as necessary to bring that to market quickly. We have to be careful because our customers are very conservative. They they they they would welcome change as long as, obviously, all the functions and features that they currently use are readily accessible. So we will do that carefully, but hope to get that completed this year.

27:55 One of the questions I am asked quite regularly, and there was one question that was pre submitted about this, which is kind of is planning and what my plans are. Clearly, I retired in 2021. I hadn't anticipated coming back to the business two years later. And so the question generally is how long am I gonna stick around for? The the answer to that is I you know, my intention is in future. I'm currently executive chairman. I'd rather like to be nonexecutive chairman. And in any case, as far as I'm concerned now, I think we're getting the business very much on the straight and narrow. And this executive management team, of which I don't form a part, so their ops board meetings, I I don't attend.

28:41 I think what we've done at the PLC board level, there's just three of us now, is, you know, our main aim is to allow the executive management team to get on with running the business, and they are the people who've turned this business around. Largely, what I've been doing over the last year, it is really taking the decisions in terms of what we need to do to resolve the issues that we face when I got back to the business. And I think that's largely behind us now. So I hope at some point before very long, I can become nonexecutive chairman. That that's that's my goal. And, frankly, for as long as I have the large stake that I have in the company, I I I don't think I'd move from that position. Anyway, one of the things that you'll see in amongst that team is that they all have significant service with the company. Everybody has been and has at least seven years of experience with the company, which is fabulous. Or I I guess, well, Sally is probably six years.

29:44 Then the final slide, there's a lot to cover on this final slide. And I think, know, obviously, I've covered most of it already. But, firstly, what was really important for me was we achieved record growth in annualized recurring revenue. You know, you can't you can't suddenly up the growth rate in actual recorded revenue overnight. First, you you know, you have to get ARR growing at a faster rate in order to give you faster growth in revenue the following year. We improved upon our net revenue retention, and that was quite significant in terms of helping us get to that ARR growth. And the second point was the record levels of customer acquisition. Our adjusted profit before tax increased by 25%.

30:33 We managed to make substantial reductions in overheads in the second half, and that allowed us to increase investment in sales and marketing. The French upgrade program was, as I said, one of the things I sort of got to grips with when I got back in 2023 is very much on track. We've taken our manufacturing costs down from the second half of this year onwards. I think the '23 issues are behind us, and we have new product developments on their way. In terms of outlook, I mentioned already we've had a very strong start to 2025 both in terms of new installs and ARR growth. We're looking at and we've announced a further upgrade to our financial outlook today in the statement. Our six target markets I haven't really had time to explain all of that, but we in each market, we target those markets from but you using a number of channels, typically. I mean, as many as five different channels to market in The UK, but in others, maybe two to three.

31:33 But we have plenty enough potential building out those channels in those six markets. So rather than get distracted by going after, I don't know, The Netherlands or Portugal or wherever, for the moment, we have huge potential within our existing markets by just filling out those channels and doing better in the channels where we're already present at the moment. Price indexation, we mentioned that. And I'd like to sort of deal with there was another question, presubmitted question on price indexation, and thanks for that. You know, we had never previously increased our pricing. And the question was, you know, would that have a negative impact on attrition or slowdown momentum? We don't think so. Nothing that we can see suggests that it's increased attrition at all. And also in the past, generally, prices in the market were coming down, and it was a very stable very stable situation probably in economies around the world in terms of inflation. But what we heard what we saw after the the invasion of Ukraine was obviously in '22 and '23, inflation peaked.

32:39 And that hit our cost base. It hit everybody's cost base, and we didn't respond to that by passing on some of that to our customers. And, you know, frankly, we we had to do that. Are to some degree catching up there on indexation. So we have although we we applied 3% last year, we're probably closer to five to five and a half percent we're applying at the beginning of this year, and that's going down fine with customers. Customers appreciate the level of service we deliver for them, we haven't really had any questions or queries about that. As I mentioned earlier on, any anybody who has subscription to anything will have been used to and has has seen increases. And we've set ourselves a we've set ourselves the the the the goal of at least achieving the 3,500,000 in ARR growth that we achieved last year.

33:33 So that's that's the outlook. That that's it. A quick run through the presentation. And, you know, hopefully, there may be a few more questions, which I'll I shall look through. Absolutely. Andy, at this point, if I may just jump back in there, and thank you very much indeed indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while Andy takes a few moments just to review those questions, that have been submitted already, just like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can all be accessed via your investor dashboard. Andy, as you can see there, we have received a number of questions, throughout your presentation this afternoon, and thank you to all of those on the call for taking the time to submit their questions.

34:20 But, Andy, at this point, sir, if I may hand over to you just to read out those questions and give your responses where it's appropriate to do so. And if I pick up from you at the end, that'd be great. Thank you. Okay. Good. Thank you. Well, I the apologies for the first two because I they were submitted to me before by word, and I I personally have lost the name. But thank you both for those questions. So I've the subscription pricing question, I think answered that. And then the second one was around my leadership being pivotal in the company's return to growth. How long do I intend to remain? Well, I intend to remain on the board and as chairman bluntly for as long as as long as I can, but I would prefer to be nonexec chairman.

35:08 Right. So the next question from David s. Thank you for that. What is the expected timeline for full production and deployment of TCSV 17? What volume of units QUARTIX are expecting to install? How does this new product fit into your broader customer acquisition and retention strategies? Well, it it's it's just a direct replacement for the unit that we currently have. It's seamless as far as customers are concerned. It will come into manufacturing in July. It will be used for, all European installations. You know, we have basic basically, network requirements are slightly different in The States, so we can't yet use it for The States. The only part of our business it won't cover is where we provide plug in OBD tracking system. So those are the tracking systems that customers just plug into the diagnostic port under the dashboard.

36:01 That's a relatively small volume. But now that we have the TCSV 17 in production, we're taking exactly the same electronic design, reformatting it, and putting an OBD plug on it and putting that through type approvals so we can have it in that format as well. But until we reach that point, if you include the four g upgrade for France, the total volumes will be about 7,000 units a month from July. Great. Okay. William d, thank you very much. What caused the tripling of U R UK ARR growth, and can we sustain or even expand the £1,000,000 ARR growth in The UK in 2025? So what caused it? Firstly, obviously, the price indexation helped, significantly. But apart from that, we actually you know, we we saw very strong growth in The UK. And I think that was directly as a consequence of I mean, I really don't wanna go back over the issues too much, but, the company had, for a couple of years, been working extensively on something called EVOLVE, an EV, transition consultancy type product. And that's it's for that that they bought the kinetic company because the kinetic company in Germany, which this technology was based on, was likely to go into liquidation. So they bought it to save it going into liquidation, which is unfortunate.

37:27 But I think once we stop that and got everybody working back on the core business, selling in The UK, our our core telematics offering, we achieved pretty substantial growth last year in The UK. So we it was a combination of that price indexation plus the growth particularly related to some larger contracts that we we won and we continue to win in The UK. So I think we're in a strong position. Can we expand the 1,000,000 ARR growth in UK in 2025? We'll we'll try. I think, you know, possibly. Yeah. So but you'll have to wait and see on that. Okay. So next one. Please talk through how QUARTIX product could be impacted by self drive vehicles, and that's from Chris. Thanks for that. It's a good question.

38:21 It often gets raised, and it's been raised for the last, whatever, seven or eight years. And, again, if it take you back to the point that our business is all about it's about the person in the van. It's not about the van. So self driving vans, you know, are all well and good for delivering goods. But, basically, if a plumber is going to site to install a boiler on a new build, you know, how much money does it really save having the plumber sat in the passenger seat? That's the first question. The second question really is, and when that plumber gets to site, which isn't yet mapped out, you know, it's actually sort of a building site, how how does the driverless van, you know, report into security and ask where they need to go to park the van and so on? It just economically just doesn't make sense yet.

39:17 And I don't really see it making a lot of sense for some time. Might be different if you're talking about a vehicle that's delivering small parcels or something of that sort, but there is no great advantage. I mean, there would be more of an advantage if the driver was doing very, very high mileage, but our drivers aren't. You know, they're typically 20,000 miles a year, something of that sort because, actually, our customers are only earning money when the vehicle's stationary, not when it's moving. And then that's the difference between our business and other businesses in vehicle tracking. Okay. Good another good one. Thank you. Adam, why did the company ultimately decide against expanding into Poland? It's a very good question. So it was kinda my decision to go in well, it was my decision to go into Poland, we didn't make a phenomenal success of that. I think the team believed in the end and put it to me very politely that actually for the money we would spend on marketing, we weren't getting the same impact as we were in Italy, Germany, and Spain.

40:21 And and secondly, the market in Poland was much more price sensitive and much more focused on logistics as opposed to that site based services approach. We still have custom we don't report them. We still have customers in Poland. Actually, the attrition level is such that it is, I e, it's not very high that that's not really going down that much. So, you know, who knows? Maybe I'll persuade the rest of the team. We'll have another crack at that one at some point. Okay. Next one. Who leads the executive management team? That's Dan Mendes, our commercial and operations director. He was he joined us in 2017. He was previously my CFO and chief operating officer.

41:06 When I retired in 2021, he decided to step back from a from from that role. And and when I rejoined in 2023, you know, he agreed to step back up again. So that's extremely you know, obviously, was very pleased with that. So, Ken H, thank you very much. How much shared resources are there between the six countries? Which countries are subscale, not cash flow generative? Again, that's a that's a great point. So I think this is one of the things that we and the answer the answer is a lot. And that's one of the things that we feel we have in our benefit. We don't have country managers. We don't have so in pre Brexit, we did as much as we can out of Newtown in Mid Wales with all of those people recruited from Germany, Italy, Spain, France, whatever, and coming across to work for us. In many cases, those people may only have stayed for a couple years, of years, for example, but nonetheless contributed strongly to the business. It is not as easy to do that since Brexit. And so therefore, we have created a subsidiary in France. So more and more of that now is happening in France. So we moved employment as a consequence of Brexit. We have moved quite a chunk of our employment to France.

42:25 And aside from that, when we recruit people in The UK like the Italian sales team, we recruit people who are already in the country because that's, you know, far easiest people who have sort of settled status. And those people generally report into so for example, for service and support, they all report into the same person. So we don't we don't have what will be a traditional and I've always wanted to use, or to consider Europe as a single market, which obviously went out of favor a bit with Brexit. But, I just felt in terms of overheads, we could keep those as a minimum by treating it as a single market and having people who spoke different languages all reporting into the same team leader. Which countries are subscale and not cash flow generative generative?

43:12 Now, again, the if you look back at the segmentation slide, I get asked this quite a lot. The bottom line is none, no country is cash generative with regards to customer acquisition. Pretty much every one of the countries we're present in, we could operate at a profit if we choose not to win new customers. Simple as that. So, you know, we choose to invest in customer acquisition. Even the The UK well, maybe not quite The UK, but all of the most of those markets, if we chose not if, you know, we we if we just looked at the customer acquisition, we would be losing money. So, you know, there there is investment going on probably in all of those countries.

44:00 I would say probably, you know, France and The UK could completely stand alone, including both customer acquisition and telematics service, and still make good money, but the others probably not, to to answer your question. And, Ken, as well, are you nationwide in The USA? The the the previous management had started to adopt a strategy of just using field sales in Texas. That didn't really work out. They recruited two or three field salespeople who, unfortunately, weren't selling anything. We've gone back to selling by telephone or by email across the whole of the country. So, yes, we're nationwide. Any more questions? There were some good questions there. Thank you.

44:47 Andy, if I may just jump back in there. Thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended. But, Andy, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that'd be great. Yeah. Well, I think I've sort of pretty much yeah. Thank you everyone for attending. I think I've covered in that summary slide. We have returned the business to to its core effectively, growing that annualized recurring revenue at the at the the best rate we can is really our focus.

45:34 And this year, in particular, we'll be looking at how we can improve on the efficiency of our sales and marketing operations. We'll give another update probably at the beginning of April. Perfect. Andy, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'd be greatly valued by the company. On behalf of the management team of QTX TECHNOLOGIES PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.