Severfield (LSE:SFR) — FY Results

0:00 Good morning and welcome to the SEVERFIELD PLC full year results investor presentation. Throughout the recorded presentation investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Alan Dunsmore, CEO. Good morning to you, sir. Thank you, Alessandro. Good morning, everybody, and thank joining. You So before we go into the highlight of the results, we want to just frame what we're going to talk about with what we've achieved over the last eight years. This first chart shows that we've delivered an eight year CAGR of 14% despite the very many crosswinds and headwinds that

1:03 we're all very familiar with during that period. What it says to us is two or three things. One, we're building a kind of resilient business and two, we've got a strategy that's delivering and delivering growth and we think if we go through the slides in the next thirty, forty minutes or so, will present more opportunities for further growth in revenue and profit in the future. So moving on to the headlines for the year. We delivered revenue of £463,000,000 a little bit lower than last year for a couple of reasons.

1:50 With the cancellation of one big contract for Sunset Studios, which we communicated during the year that it was £50,000,000 of revenue, with slight reduction in steel prices year on year, which comes through the revenue line, and with a soft market sector warehousing and distribution, which contributed to that slight revenue decline overall. Notwithstanding that, we continue to deliver further profit growth, underlying profit before tax up 13% to £36,500,000 which was ahead of expectations for the year. Underpinning that profit performance was another strong year of operating cash conversion of 110%, which enables to finish the year with net debt of £9,400,000 despite having invested £23,000,000 during the year in the acquisition of the development. So there has been very, very good cash performance during the year and Adam will expand on that in a few minutes time.

2:48 We're also pleased that the order book for UK and Europe is remaining strong at level £478,000,000 It's well diversified, a higher proportion of European work at this time, but it does give a good visibility for the forthcoming financial periods.

3:06 We're also seeing momentum and value continuing to build in our Indian joint venture GSSL. Our share of the after tax profits has increased to £2,000,000 and the business itself has recorded a record EBITDA of over £13,000,000 and we'll expand these figures through the slides as well. And just to sort of be able to continue with that momentum, we've now bought a second plot of land to build another factory in Gujarat to help us deliver the strategy of significant further growth over the next few years in the Indian joint venture. The pipeline is growing and we're pleased also that that's now resulted in a record order book of £181,000,000 So overall a good set of results. Underlying basic EPS up 5% at 8.9p per share and most importantly for all shareholders is the total dividend is up 9% at 3.7p per share, which means we have 10 of progressive dividends.

4:12 So I'll now hand over to Adam, who will talk through the numbers in bit more detail before I come back and talk about the market outlook and strategy. Thanks, Alan. Good morning, everyone. As Alan said, it's a really good set of results for us this year with profits ahead of expectations with another good year of strong cash generation. Revenue for the year was 4 and £63,500,000 and that was a decrease of 6% over the previous year, reflecting a reduction in steel prices and also the impact of some challenging market conditions in 2024. Underlying operating profit was £37,700,000 that's up 14% over the previous year. And this increase reflects improved profitability from our core construction operations, which now include the recently acquired development companies and also an improved result for our modular solutions division, which has reported a full year profit for the first time.

5:00 The share of results from JVs and associates of £2,000,000 includes £1,900,000 from Jess SL, our Indian joint venture, which reflects a continued high level of output, improved margins and a record EBITDA for the business of over GBP 13,000,000. Underlying PBT of GBP 36,500,000 is up 13% to the prior year and the dividend of 3.7p per share, which includes proposed final dividend of 2.3p per share is up nine percent. And this represents, as Alan said, the tenth consecutive year that we have made progressive dividend payments to our shareholders. Looking ahead to 2025, our expectations are unchanged. And this has taken into account market conditions that are now showing signs of improvement, but also retaining an element of caution in the guidance given that there remains some uncertainty in the wider economy as a whole.

5:50 FY24 is the first year that we've reported our results under our new divisional structure. Our core construction operations include the combined results of our Commercial and Industrial division and also our Nuclear and Infrastructure division. You can see that revenue for core construction operations is $449,000,000, that's also a decrease of 6% over the previous year. In commercial and industrial, revenues decreased by 5% to £362,000,000 and that represents the impact of lower steel prices, the softer market conditions in the distribution sector in 2024 and the pause in construction at Sunset Studios, which in combination those three things have reduced revenue by £87,000,000 and that's been offset by new revenue from Vernon of £59,000,000 In nuclear infrastructure, revenue has also decreased slightly by 8% to £87,000,000 driven by the market conditions in the short cycle infrastructure business in 2024 and also normal nuclear revenue timing differences.

6:48 From a profit perspective, operating profit has increased by 11 to £37,400,000 and this reflects continued contract execution improvements, which are helping offset the reduction in revenue and also new profits from development. And just as a reminder on our strategic targets that they are unchanged for both C and I and N and I. In C and I, we're targeting revenue growth in line with GDP. In N and I, we have a medium term target to grow revenues to GBP 125,000,000 plus. For both divisions, the margin target is our normal 8% to 10%. Modular solutions, this consists of our wholly owned modular business SMS and CMF, our cold rolled steel joint venture business, which is based in Wales.

7:35 Although revenue of £21,500,000 is 6% lower than the prior year, for the first time Modular Solutions has reported a full year profit and that reflects an improving sales mix of higher margin SEVERFIELD products in SMS. The divisional result of £400,000 include £100,000 share profit from CMF and the lower profitability at CMF includes a softer distribution market conditions in 2024 and also some under recovery of overheads as the business continues to ramp up its new production facility in Wales. And again, from a strategic target point of view, this is unchanged as well. We have got a medium term target to grow revenue between 75,000,000 and £100,000,000 with margins of 10% plus.

8:18 In India, GSS owners reported a record EBITDA for the year of 13,200,000 and profit before tax of £5,000,000 all of which results in the group's after tax share of profit of 1,900,000 which is an increase of nearly 50% over the previous year. This reflects revenue of 131,000,000 which represents a slight decrease over the previous year, mainly due to currency aspects and an output of over 100,000 tonnes, including subcontracted work for the second year running. Operating margins in India have improved as well. You can see 38% compared to 6% in the previous year and that represents an improved mix of work and strong operational delivery. Finance costs in the JV there at 5,500,000 They are unchanged from the previous year and reflect a continued high level of borrowings, which is partly due to the impact of inflation and also higher letter credit costs, which are linked to higher value state purchases.

9:15 Unusually for us, we've had some non underlying items this year over and above our normal non cash amortization of acquired intangible assets and that was £5,400,000 in 2024 compared to £3,400,000 in the previous year. Firstly, we have a legacy employment tax charge of 4,400,000 which relates to assessment raised by HMRC for historical employment tax and national insurance liabilities. Like many other construction companies, we pay our site based workers an overnight allowance to cover the cost of accommodations of systems when they're working away on our construction sites. HMRC is claiming that as a result of some procedural matters linked to changes in legislation in 2016, which is ironically put in place to try and make things easier for companies, some of these payments are more taxable.

10:02 We are appealing this and we are currently in discussions with HMRC to resolve the matter. But since formal determinations have been raised for the tax that they consider is due, we have recorded a liability for the full amount, including some interest. The second item is a non cash impairment of £4,500,000 which relates to the landlord's decision to terminate the factory lease at our Sherburne facility where our modular solutions business is based. Given our growth plans for modular solutions, we've already started a wider footprint review for this business and we expect to relocate to a new factory in 2026 or in FY 2026 when the lease now ends.

10:43 Finally for me on cash, the Group's balance sheet and cash position remains healthy. We had another year of strong cash generation and our operating cash conversion of 110% resulted in year end net debt excluding IFRS 16 lease liabilities of £9,400,000 and this included outstanding acquisition loans of £20,000,000 strong cash performance reflects a working capital inflow sorry, an operating cash inflow of 38,700,000 and an inflow from working capital of £11,000,000 which represents an improvement in underlying working capital. Our year end working capital was around 4% of revenue, which is back within our normal range of 4% to 6%. These inflows have been offset by the acquisition of Vertman for a net cash consideration of £23,000,000 which is partly financed by a new term loan of £19,000,000 CapEx of £11,300,000 which represents new production machinery, an extension of our production facility at Dalton and also general site and infrastructure improvements.

11:40 We've had an investment in India of £2,800,000 which represents our share of the purchase price of the new expansion land in Gujarat This amount was matched by our JV partner. We have had a normal dividend payment of £10.7 and then other items of £14.8 includes tax interest and also the purchase of shares. We have now stopped issuing shares for our LTIP and share save schemes and are buying in the market instead. Given the improvement in working capital in 2024 and our strong cash position, we announced a share buyback of up to £10,000,000 in April to further improve returns to our shareholders. Today, we bought around we bought back around 1,500,000 shares at a cost of around £1,000,000 And then finally for me and also returning to working capital, we expect an outflow from working capital of around £10,000,000 in FY 2025 as customer advances of £10,000,000 on the balance sheet at the year end unwind. And given this, we're continuing to guide to an unchanged net debt position of 20,000,000 to £25,000,000 excluding IFRS 16 at the end of twenty twenty five. So I'll hand back to Alan, who will take you through the rest of the presentation.

12:49 Thank you, Adam. So just by way of introduction to the next phase, a reminder that our strategy is unchanged. We continue to seek ways to drive growth both organically and through acquisition and we've seen good examples of both in recent years. And we now believe we're well positioned in many growth markets which are driving the green energy transition and we'll say a bit more about that in a second. We've got a stronger position in Europe, which we'll say more about. We've got frameworks, nuclear infrastructure and we've got a growing motor solutions business and the expansion of CMF, which Adam referred to on. And underpinning all that is our relentless focus on driving operational excellence, mainly now through Project Horizon or digitization project, but also through continuing to drive for manufacturing productivity and efficiency.

13:48 And again, underpinning all of that is bringing real innovation to all parts of the business. Alongside all of that is the Indian JV we're building value, which is benefiting from the strong continuing strong economic growth of our economy and the structural shift from concrete to steel construction in India. There's many, many growth opportunities there and we're also looking at say further opportunities in Saudi Arabia, which is quite accessible from India. We've bought some new land in India in Gujarat, as we said, We expect to start building on that in the second half of the year. A little bit about Project Horizon which we launched eighteen months ago.

14:40 It's our long term digitization project. We've identified over 100 individual projects along that roadmap, of which 50 were for delivery in the first couple of years. We're over halfway through those first 50, with many completed already. We've got a dedicated team of 14 people now focusing on this. That's all being self funded from the benefits we're getting from Horizon. And we've got some examples here of some projects that have been delivered under realising benefits already, such as a new automated QA system, which is automating some pretty arduous but important QA requirements, particularly in the nuclear sector for example.

15:26 We're integrating databases across the whole business allowing us to actually drive efficiencies in pricing and design, production and so on. We are also committed to some foundational projects barcoding steel, sounds straightforward, but it's not, but it will allow us to try real time the progress of projects on-site once we're through the factory. And there's many other projects as well. We're measuring everything in quite some detail and we expect to continue reporting in further periods of the progress that we're making and transforming how the business.

16:10 We include as usual a reminder of our ESG credentials. It's something which is important to us, we take it seriously and there's many examples on this page, I won't go through them all, but there are many examples of how we are at the forefront of

16:28 environmental and social activities for the industry and for the sector. One or two examples to draw out are that we have an A for leadership in climate change, which is unusual for the construction sector. We've now got our net zero targets verified by SBTI. We've been the FTA Climate Leaders Listing for the fourth consecutive year. Further down, we're proud of our continued 5% club, which has 5% of our workforce earning and learning and working towards a qualification at any one time. So lots going on there and we continue to work hard to make sure we are at the forefront taking all these things seriously and driving benefits for the business.

17:18 Taking a deeper dive into The UK and Europe, and then we'll come on to India later on, but The UK and Europe, looking at general market themes, think the last year became a bit more difficult in H2. I think we can also across a wider economy. Economy was teetering into recession, construction was not immune from that. We saw a project canceled, we saw continued weakness in the distribution and infrastructure sectors. We are now seeing conditions improving, volumes are improving in these sectors, pricing remains tight, but we are seeing recovery. And we look forward to more stabilization once we're beyond the general election, and hopefully we start to see interest rates come down as the year goes on.

18:14 Steel supply has been more stable over two or three quite turbulent years with steel, not with steel supply per se, but with steel pricing. But it is now more stable, supply is stable and that's good news for the sector. But I think looking forward to this increasing stabilization of the economy, we think we're really well placed through the order booking pipeline in a second, we'll see that we are well positioned for a lot of kind of growing demand in many different sectors across the business. Just looking at The UK and Europe order book as a whole, it's £478,000,000 which remains a comparatively high level. And you can see the breakdown by our three divisions there and also see the growing importance of Europe and Ireland at the bottom. And we'll see more of that when we look at the commercial industrial order book in more detail in a second.

19:16 I've talked about the green energy transition. I thought it was just worth having a quick look at this slide here, which tries to capture the full range of investment activity that will be required across the economy to get us towards net zero and as more and more things are electrified. The picture on the left contains examples of all the different types of projects which are likely to happen during this whole transition. These all represent projects that we have either done or doing or are tendering for or the capability for as the transition becomes more and more real. The key point here is that we think this will generate net additional demand over and above the traditional sectors we have used to be servicing over the past number of years.

20:08 So it's one to bear in mind, there's lots of detail there but we think it's quite an important theme that will drive additional demand for the next five to ten years. So again to the order book of the commercial industrial division in more detail. We can see the shape of that order book on the left hand side what I'd like to just talk a bit about is the future trends for SEVERFIELD, because this gives our best insight into the sort of pipeline that we're seeing ahead of us. So the industrial sector, which is quite large industrial factories for battery plants, wind turbine plants and so on, that's a strong sector for us just now.

20:54 And we see that remaining strong for the foreseeable future. There's quite a few more of these types of projects in the pipeline in The UK and in Europe. Commercial offices ebb and flow a little bit, but when we look out the way we're starting to see some quite large commercial office projects emerge in London. Over the next two or three years we're starting to submit budget prices for these and we see that taking a growing part of the order book in the years ahead. Distribution, as I've said before, relatively weak just now. It has picked up in recent months but that has been near 15% of the order book in recent years and we expect that demand to recover in the next year or two.

21:42 Data centres weaker in recent years, we've said that the pipeline is full and it will strengthen. It has now strengthened and we can see that at 30% of the order book and we see that remaining a significant part of the order book for the foreseeable future. There's quite strong data centre

22:00 demand and build plans again in The UK and around Europe and also India, we come back to it over the next few years. Stadium leisure now is somewhat weaker at 1% and a launched the Everton Stadium and the Co Op Live Arena. There's a few more projects in the pipeline and we would see that picking back up again over the next year or two. So really quite a positive outlook in these sectors for the next two or three years, as the economy continues to sort of strengthen over the next few months. And I mentioned the Europe, the importance of Europe earlier on. Here we see it again where Europe and Ireland now accounts for 48% of the total commercial industrial order book.

22:52 Looking at Europe, we completed the acquisition of Europe at the beginning of the year. It's integrating very well. It's been rebranded. The rebranding timetable was driven by the local team. Wanted to rebrand ahead of our schedule. There's now rebranded. It's also integrated with our pre existing European business And we're really very pleased with how that has gone. The SEVERFIELD flag now is firmly in Europe and the Vuitton business itself is doing well, performing slightly ahead of expectations during the year. But what we've all seen in parallel with that is an increased win rate for other projects outside Holland and outside the European Natural Scope, which we are servicing from The UK. So it's been a really positive year for building our presence in Europe and we see more of that to come in the years ahead. Moving on to the Nuclear Infrastructure

23:54 Division, I thought I would just open with this slide here, which sets out the kind of a decade ahead of infrastructure investment as mapped by the infrastructure project and authority. $755,000,000,000 and the important thing there is that of the three biggest parts of that wheel that energy, electricity and gas and transport we have positions in all three of these. So there's a strong underlying public sector investment programme for the next ten years, which we think will be unchanged regardless of whatever government has elected, which will stand to benefit from over that time period. So was a very encouraging underlying backdrop.

24:41 On the next slide you can see the current makeup of the order book between transport infrastructure, nuclear and power and energy, along with our kind of expectations of demand backed up by that investment framework we just looked at. Also what this doesn't capture this slide are the framework agreements that we have in several of these sectors, which give us good visibility of demand beyond

25:03 the order groups. We've got framework agreements on the Sellafield Nuclear site, we've got framework agreements for ancillary steel work at Tinkley Point and also for network rail in one or two areas. Overall, it was a good business there and lots of positive dynamics to help drive that forward in the years ahead. So finally for The UK and Europe, we just want to spend a couple of minutes on the modular solutions business, which is a small, what we believe is quite significant growth potential. Three elements to it, there's the SEVERFIELD PLC product, which is bespoke steel containers for electrical switchgear backup generators and such like. The second one is the supply chain that's largely the cold rolled steel used for sort of a framing of modular buildings and supplied by our joint venture partner or through our joint venture with CMF.

25:58 And then there's a niche product called the Rotoflow which does bulk handling solutions. So three elements to it. If we look over the page, we've just set out some of the growth opportunities that we see there. SEVERFIELD, we see that the addressable market growing all the time. It's moved from a product used in quite specialised environments for remote network rail sites, difficult access sites in somebody's cellar field, oil and gas and so on. We were seeing this product migrate into onshore and offshore wind farms, data centres as data centre design modularizes increasingly. And we see the addressable market growing with a good blue chip client base there.

26:47 And there remain a few competitors of scale, I think a good advantage to drive growth in that sector. The supply chain, we've talked before about the growth of modular buildings in general, that they do use light steel frames, which we've got good position in. We're seeing more of these in education, healthcare, to some extent homes, although that's been more difficult in the last year or so. I think medium term we think that'll come back. And overall we see quite strong growth for this division from a small base the years ahead.

27:24 So finally if we move on to India, we continue to be really very excited about the kind of the direction of travel and the momentum and the value that we're building in India. We were starting to grow strongly before COVID. There was like a two year disruption with COVID in India, we've seen that momentum rebuild over the last couple of years. We've seen the pipeline growing as more clients become interested in building in steel and that's culminated now in a record order of £181,000,000 with a lot more in the pipeline as well. As I mentioned earlier on, India itself is providing substantial growth opportunities, but we're also paying attention to some of the opportunities emerging in Saudi Arabia, is also quite significant in volume terms.

28:17 We acquired a second plot of land during the year in Gujarat. We're going to start building out that land during this financial year and ready to start manufacturing on it in the next financial year and beyond. Once complete that will give us another 100,000 tonnes of capacity which will enable us to deliver on our strategic plan to get to 250,000,300,000 tonnes over the next three or four years. We're already strengthening the front end sales and estimating team, the engineering team and the supply chain and so on. And you can see at the bottom just how strong the underlying dynamics are with the Indian GDP growth expected and the growth in steel and construction along there. The dynamics are going to really push this business along quite substantially over the next three, four, five years and beyond.

29:10 On the next slide we can see that the order book evolution over the last few years, and as well as being at a record level, pounds 181,000,000 most recently, we've also got a kind of a much stronger commercial work. Now it's commercial work that's higher margin and is going to be the driver of the future growth there. So we're good to see that coming through. And this here maps out in a similar way to what we've seen in The UK, the different sectors that we're just assessing in India, every single one of them we're seeing significant increased demand in the coming years. Our biggest challenge will be to make sure that we're prioritising the right sectors and the right clients who appreciate the value that we're able to offer with our engineering and expertise and the fabrication that we're able to do for complex structures.

30:07 So just to conclude, the strategy we said at the beginning is unchanged and that has delivered 14% compound growth over the last eight years. It's delivering more opportunities for the future and we think that will continue. We've got a good high quality order book at the moment that gives good visibility through the rest of 2025 and our expectations for the current year are unchanged. The strategy is positioned as well to work in markets with positive long term growth and set out a lot of these, including the green energy transition. And India as we've just seen, we think is delivering on the potential we saw it was, it's growing and there's very significant growth still to come.

30:56 We have a very aligned strategy with a joint venture partner to push that forward and build significant value in the years ahead. So that concludes the formal presentation and we're now more than happy to take questions. There's already a few that we're seeing in the Q and A sector, we'll just pause there and start looking at some of the questions coming up and start taking these one by one. Perfect. Alan, Adam, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab which is situated on the top right hand corner of your screen. But just while the company take a few moments to view those questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

31:42 Alan and Adam, as you can see we have received number of questions throughout today's presentation and if I could hand back to you at this point just to read out the questions and provide responses, but appropriate to do so. I'll pick up from you both at the end. Thank you, Sandra. The first of three questions all relate to Wurtman and Europe, just looking across them all. I'll try and take them all as I want. The first question I'll read the questions out and I'll answer them all together. The first one is were there any issues with the recent Dutch acquisition and what evidence is there of its benefit to the group? Second question is how has integration of the Rotman progressed and what synergies have been realised so far? Are there additional opportunities for further integration benefits?

32:34 And the third question is additionally with the acquisition of Rotman, what are your strategic plans for expanding the European market? Are there specific sectors or reasons that you are targeting? Order first of all, the order went very smoothly and that was particularly pleasing because there was a bit of a shift in auditor from that business from a small local auditor in Holland to a KPMG, probably a slightly different approach, that went very, very smoothly so there's no issue there at all. In terms of the integration and the value is building in the integration has gone well. As we said, with a very detailed integration plan, know, day one, week one, month one and so on.

33:20 We're now largely through all that. The business has all been rebranded with the local team pushing that rebranding. The business itself has performed slightly ahead of expectations financially in its first year. But what we're seeing is that having that greater physical presence we think is giving clients even more confidence to deal with this. The Wurttemberg itself within Holland is doing well, but now that we have a physical presence and resource and manufacturing capability and so on, we're seeing our win rate for other projects outside Europe in Benelux, Scandinavia and so on, increased greater infrastructure and ability to deliver these projects at the same time.

34:08 So that's all been really positive, probably better than we might have hoped in terms of that wider push into Europe. If we look forward, now that integration is largely complete, business and the team are looking more outwards than inwards and we're looking to build that pipeline to grow organically. And we're also very open to future acquisitions. We think there will be further consolidation in all of the sector in Northern Europe in the next few years. We would like to think we will be a consolidator in that. We do have an appetite for acquisitions. The first one's gone really well. We think we can do some more, but in the meantime we're building strong organic growth plans there for Europe.

35:02 If we then look down, there is a question on are the finance costs not expected to reduce and is the tax rate charging usually higher for any reason or was that rate normal? I'll let Adam answer that. Yes, the finance costs in India are high. They consist of three main things. There is about £2,000,000 of costs for letter of credit costs, which are related to steel purchases. There is about £2,000,000 of general borrowing costs relating to working capital facility and then £1,000,000 of let's say other finance costs. Would expect the borrowings in the JV have reduced. We would expect the finance costs to come down in the year ahead. Think obviously as Alan talks about expanding the new land, any financing for expanding the new land will be borrowed locally by the joint venture. So that might involve some extra interest costs in the business as it continues to grow. But at a high level, we would expect them to come down over the next twelve months.

36:05 In terms of the tax rate, tax rate isn't unusually high. There are two main tax rates in India 2530%. GSSL is able to take advantage of the 25% tax rate. We would expect that to continue for foreseeable. There is There was a question on milestones for the next few years. What must we have, like three to five years? We don't set milestones per se, we've done that in the past and delivered them easily. What we've been focusing more on in the last three or four years is setting out the strategy quite clearly and identifying the areas for growth. Think that's what we're trying to do here. We're positioning the business to keep growing organically in our core markets, which we can do.

37:08 We're going to net additional growth from the green energy transition. India will continue to build value. We'll continue to look and complete acquisitions. And I think the best milestone that we can point to is what we've delivered over the last seven or eight years following the same strategy and say that we expect to continue that kind of trajectory for the next few years. The final question we have at the moment reads, a 14% growth rate has not been reflected in the share price. Why do you think that that is? It's an interesting question, we can give some sort of answer, sometimes other advisors are the best place to answer than we are. But we have spent quite a lot of time looking at it, particularly last year.

38:02 And what we saw was that between if we compare ourselves with the wider construction sector, the main contractors are listed, valuations in general compressed between 2016 and 2023. And the compression in our valuation wasn't out of line with that. There's been a number of factors Brexit outflows from The UK market, regulatory changes, rules, liquidity of investments and impact of small caps and so on. But so I think we can sort of explain that it's been a little bit frustrating, but not as line with other players in the sector. But I think we're beginning to see recognition that we are well, there is a view that there is a bit of a disconnect there. And I think we're starting to see signs in recent months that thing is in the wider small caps out the way London market might be beginning to change. That starts to get beyond things I'm able to comment in detail. I think all we can really do is to keep building a bigger and stronger business and having a strategy that delivers that, which we've demonstrated that we can do.

39:17 And we'll keep trying to communicate all of that, which is why the group of potential investors as we can. And the final question, another question relates to that, with the low financial ratings of your company and many other smaller companies in The UK, are you worried that you'll be bought out by either competitor or financial buyer? There are very few competitors anywhere our size, certainly not in Europe. So we don't see that being a particular risk. Whether a financial buyer emerges or comes along, wouldn't speculate, but certainly if you look more widely in recent years, financial buyers generally haven't looked for companies in contracting construction for various reasons.

40:18 You can't predict the future, it's not necessarily something keeping a week, we might just know you, but we, I think, as I said before, all we can do is keep building a bigger and stronger business delivering value that clients appreciate and communicating what we're doing to as wide a range of potential investors as possible. And that's what we'll continue to do. Perfect. Alan, Adam, thank you very much for answering those questions from investors. Of course, company can review all the questions submitted today and we'll publish those responses on the Investor Me company platform. But just before redirecting investors to provide you with their feedback, is particularly important to you both, Alan, could I just ask you for a few closing comments? Yes, I'd just like to say just one more comment popped up here.

41:09 Yeah, it's a positive comment. Thank you, Alessandro. I'd just like to thank you all for your interest and attention. It talks to the point I was just making about trying to communicate what we're doing to as wide an audience as possible. I think we have a clear strategy, we've been delivering on that and we believe we're setting out a wider range of opportunities we have ahead of us than we have at any point in recent years and we feel really quite positive about what lies ahead for the group. So thank you again for your time and attention and then look forward to engaging with you in the future. Thanks everyone. Perfect Alan and Adam thank you once again for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations?

42:01 This will only take a few moments to complete but I'm sure it be greatly valued by the company. On behalf of the management team of SEVERFIELD PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.