Titon Holdings (LSE:TON) — Interim Results

0:01 Good morning, and welcome to the TITON HOLDINGS PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged and can be dismissed at any time by the Q and A tab situated in the right corner of your screen. 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. Have the company camera view all the questions submitted today and publish responses to it as appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Jamie Brooke, chairman. Good morning to you, sir.

0:30 Good morning, everybody. Thank you. And good morning, everybody, and thank you for attending. I'm Jamie Brook, chairman of TITON. I met you or some of you at the last, IMC meeting, having recently joined in in January this year. And welcome to the, 2024 interim results. Firstly, before we go into this, I just wanted to thank you, our shareholders, for your sort of patience and support over the past few periods. You know, they've been difficult for TITON, and I'll come on to why, you know, I think we've got a good base, from which to build from from here. And also thank you anyone who's attending, who's not a shareholder, and hopefully, we can, interest you in the business. Very happy to welcome you up, for site visits and so on if if there is any interest.

1:20 As you know, we've been waiting for our new CEO to arrive. So this morning, the most important thing is, to welcome Tom Carpenter. He's been with us for three weeks, so very new to the business. What he'll be doing today is sharing his initial thoughts, and then we will come back at the next time or next meeting and and report on a more developed strategy at that stage. Unfortunately, Caroline, our CFO, is unable to attend today. She's not very well today. So Tom will also run you through the the numbers as well. At first, I'd just like to say, you know, we're not gonna sort of paint this in anything it isn't. This is unfortunately not a great set of results.

2:07 It was well flagged in the brokers' reports that this would be a a difficult year. It is a difficult year because the market is difficult, but we really wanna get away from blaming the markets for our our problems. We did also have a high sort of last, which we had prior periods. There were some backlog, issues for them for the ERP prior to that, and those have now been fixed. And we had, therefore, had to run through a backlog of the prior period, so it was a particularly strong prior period. So this period looks very weak, in comparison. However apologies. However, we are small, we're agile, we we should be nimble, and we should be growing market share. And that's what we are focusing the business on, and Tom has come in to do that.

3:02 And Karen has done a great job leading the company to this stage, whilst we waited for Tom. Not not easy in the situation, and I wanna congratulate her for the excellent work she's done. She's really, sort of focused on many of the internal issues, and she's built a very good foundation and an excellent team from which to grow. And and operationally, the business is well set and and a great platform for that growth. On top of that, and Tom will talk about it, we have some really good new products which are coming through. So r and d has continued a pace whilst whilst we've been through this period. And as I said, you know, we will come back and report on a more detailed strategy in future meetings. So with that, I'd like to hand over to Tom who will talk you through the results and his initial thoughts.

3:50 Good morning, everyone, and thanks, Jamie. So this is my first, investor meeting, and I just wanted to say that I'm really excited and pleased to be joining group TITON at this time. So what what I plan to do is I'll go through my first impressions, then I'll go through our our key performance for the first half of the year, some key messages I want to give you, and then I'll I'll sub for Caroline and go take you through a more detailed review of our financial performance. And then at at the end of the presentation, Jamie and I went to some questions that you may have. So if we go to slide two first. So, you know, about beating around the bush, clearly, have a lot of work to do. You know, if we look at our competitor results, not, you know, this the poor results of this last period notwithstanding, you know, it's clear that the company has been underperforming for some time, you know, in terms of our sales growth, in terms of our gross margins, and our operating margins.

4:50 The other observation I have is although it accounts for about half of our sales, I don't think that we've been focusing enough on our Windows or hardware business unit. And I'll be talking a little little bit more about both of our business units in a few slides later on. On the positive side, I think there has been a lot of good work performed internally. Our processes over the last twelve to eighteen months have been completely reengineered. That's not to say we don't need to further improve, but I don't think our operations and our systems and our processes will cause any major barriers to growth in the medium term. We are seeing good signs in our mechanical ventilation business, and we're seeing signs that this business is recovering. And I'll go through this in more detail later.

5:36 I also see a positive internal culture, in the company. I'm finding the team here to be very flexible and very open to change. And finally, just reinforcing what Jamie has said, I think the company has done a good job in managing their costs and their cash reserves and driving industry levels down. I don't think our industry levels are where we need them to be. So we we do need to drive further reduction in these levels, but I think we need to recognize what they have done under quite difficult circumstances. So if you look at my immediate goals for the business so I'm I'm currently developing a revised strategy with the management team and the board and with the obvious goal of returning the business to profitable growth. However, if I'm speaking generally, I think our immediate issues are commercial.

6:24 So my priorities are to make TITON a more outwardly facing business. I I need to refocus the business on the window and door hardware and to build and I want to further build what we're doing with our mechanical ventilation systems business unit. I want to further improve how we interact and manage our customers. And I'm a real believer that, you know, with great customer service and and processes to manage customers, can really help us, grow our business and our and our sales. Finally, as everyone knows, we've been struggling with our Korean business for some time. So I'm reviewing our strategic fit of our Korean business, and we have commenced positive discussions with our joint venture partners about the shareholder structure, and we will announce, more, if and when we can.

7:15 Turning to slide three.

7:20 So our our group sales were were down under just under 25% this time last year with our UK and European sales decreasing by just under 29%. As Jamie stated, you know, we do believe that our our backlog in mid twenty twenty three presented an artificially high set of numbers, you know, and we do continue to face market headwinds. However, I I want to be frank, you know, these numbers are not good numbers, and and we should be performing much better than this regardless of our internal problems and the headwinds in the market. Going forward, I don't want to be blaming the market for our performance. I think we are smart enough and should be agile enough to grow our business regardless of what the market is doing, and that is how we'll be taking the business, going forward.

8:07 Our gross margins are eroded by 1.1% basis points. This is mostly due to lost economies of scale. Our net loss was £700,000 for the first half of the year compared to a net loss of £400,000 this time last year. We continue to manage our cash levels and balance sheet and actually increased our cash levels by 40% over the last twelve months at £2,200,000. But finally, again, in danger of repeating myself, operationally, I think a lot of work has been done in the background, and I believe that we are well positioned for growth with good internal systems and capacity. And finally, we have strengthened our sales force and are actively growing our mechanical ventilation systems pipeline.

8:53 And clearly, lot of further work to do with our window and door hardware business. Moving to slide four. So rather than read the slide, I think I just want to talk generally about our two core business units, window and door hardware and mechanical ventilation systems. So our window and door hardware business is a somewhat commoditized business. It has relatively low gross margins. And if you look at our results, it's been slowing and declining for for some years. Now there's there's a number of factors with this decline, but I think it's fair to say that not all of these are due to the market. As I said earlier, I don't think we're spending enough time on this business, and it's my goal to change this moving forward.

9:38 While our numbers don't show it, I believe we do have actually quite a positive story with our our higher margin mechanical ventilation systems business. This business, for those who don't know it, is a project based business where we have to be specified into large building developments. Once we are specified, orders and sales are usually spread out over, multiple phases and spread out over many months, actually even years. And hence, there's very often a significant gap between us winning the project and us recognizing sales, from that project. After the issues that we had last year, sales and orders in this business bottomed in August. And since then, we've strengthened the sales team and have seen a positive trend from our order wins and our project our project wins and our order growth.

10:30 Actually, our order levels right now are approaching our previous highs. But given the project based nature of the business, there's a delay between having an order and recognizing that in sales. And we have in recent months also seen some customers delay their construction schedules and then delay quite important shipments of product for us. However, we are seeing other good indications that demand for these products is strengthening. Firstly, our sales of ducting is up 80% compared to this time last year. So why we think ducting is important? We sell ducting and our ventilation systems as as a as a whole combined system. And the ducting is is typically a first fit within a within a building project.

11:17 And the ventilation the more expensive ventilation systems lag for the final fit an apartment or building. Secondly, we are winning more and more new projects, and we have significantly grown our project pipeline. And finally, we have a design team who designs these ventilation systems for our customers, and our design team has never been busier.

11:41 Moving to slide five. As we've repeatedly said in multiple, presentations, you know, we invest, and release new products continuously. I just wanted to highlight, some wins, you know, just to show you that the investment in these new products, is a good strategy for the business and that we've continued to win new sales based on these new product releases. So I just wanted to show you, three new project wins in recent weeks. So firstly, we recently won a ventilation system that's a combination of duct and ventilation units for quite a large, building project in the South Of England for 450 apartments. This this included two of our newer releases, a one point one point six five smaller mechanical ventilation system, and a award winning 4.25 system.

12:36 This project is worth about £500,000 to us, if that a little bit more, and will be spread over multiple phases in the next twelve months or so. Secondly, we recently released a combined heat recovery and cooling unit. And last month, we started receiving orders in in volume for this product for this product. And finally, you know, because I do want us to talk about we're gonna do hardware going forward. We released a a new door lock system called the Hexalock. And, again, we won awards for this for this product. And this month, we received our first substantial business for this worth about a £150,000 a year. So now I'd like to move over to our detailed financial results to slide seven.

13:24 You're gonna have to suffer me muddling through this a bit as Karen's unwell, so do do bear with me. So moving moving to slide seven. Our first half of the year, for this financial year, our sales were £9,100,000 compared to £12,000,000, for this time last year. Our gross margin was £2,300,000 compared to 3,000,000 £3,200,000 this time last year. And our gross margin was two 25.1%, 1.1 basis points lower than this time last year. I mean, we do have a lot of work to do in our margins, but the erosion this particular erosion, is mostly down to economies of scale.

14:09 We we did mitigate the reduction in sales, by focusing on growing our our highest margin product lines. So most of our erosion was seen in low in lower margin. Again, repeating myself, we did strengthen our ventilation system sales team, and we do see recovery of our mechanical ventilation systems order book. And we continue to invest in new products, and we we will remain focused on careful cost management for the foreseeable future.

14:38 Touching on Korea. The Korean loss for the first half a year was slightly improved, a loss of a £120,000 compared to a loss of a £250,000, last year. And then I wanna want to touch on the dividends. So we decided to pause paying dividends. It's not really, you know, we are focusing on cash. It's not really indicative to the results that we're doing this. It's basically with myself and Jamie coming on board. Our thoughts are that we really shouldn't we think we can use our funds in a more productive way, than paying dividends when we are loss making business. Instead, we'll be investing money that we will be paying in dividends, on projects coming out of our strategic plan. I would like to reassure investors that once we return to profitability, we will be reviewing our dividend policy.

15:29 Moving over to slide eight, and on the balance sheet. So I won't read the whole the whole list out. I just will touch on some important key items. So our inventory reduced by, 16.3% to 5,800,000 pounds.

15:47 The team is making active inroads to reduce our inventory. I I think it's fair to say our inventory is too high, but, we are seeing positive month to month deductions on inventory, and we see that trend continuing for the rest of the year. Our net assets did decrease by, 1,400,000, and that's reflective of of our of our losses that we made, as a business.

16:13 We we have no debt as a company other other than, some leases, and our capital expenditure was negligible, for the period. And we'll be carefully making careful decisions on further capital expenditure. I don't have any forecast for the next six months, but that may change. But we will make sure that any capital investment that we make has good payback and a good return on investment. Our cash held by TITON Career remained consistent at £30,000 throughout the year. So we are very much focused on maintaining our cash position, going forward, to to offset is offset our losses.

16:54 Moving on to slide nine. So with our summary and outlook, so, obviously, our half one trading was below our expectations. I've covered some of the reasons why we think that is. I think, predominantly, the business, had some internal issues, and there's a lot of internal focus. And I think, frankly, the business was a little bit in limbo whilst it awaited a new CEO. There was a substantial gap between, our old CEO leaving and myself joining.

17:24 We have had had a transitionary sales team, which we are seeing the benefit for benefit of right now, but we have had insufficient focus on the window and door hardware business. And, you know, whilst we're not gonna say that's the primary reason for our our reduction, I I I do think we need to recognize that, we've had poor market conditions with our customers pushing out significant orders and few of our customers going bankrupt over the last, twelve months.

17:53 Our sales are down £3,000,000 this this time from this time last year. However, we have mitigated our losses for a reduction of about £300,000. The team has done a very good job of cost controls, I believe, and we have managed the the our sales reduction predominantly on lower margin products. I'd like to congratulate Carolyn and the team for a a lot of good work done fixing our internal issues, and a lot of good work done developing the team. I believe we've got a very strong platform for growth with good processes internally, with our ERP system actually working well and being a benefit to the company. We've we've revitalized the cell team, particularly in the, ventilation systems business unit, and we've made new hires in in sales, production, r and d.

18:46 I believe that our medium term prospects are good, and I've shared some of those early indications. We are seeing good growth in the mechanical ventilation, sales pipeline, and we've shared the good growth that we have with our with our duct team, which as I say, is a, first fit when we win a system. And we are seeing, first sales of products that we've released recently. The board and I remain confident for the prospects of the group, and we anticipate that our core UK businesses will return to profitability sometime in the second half of this financial year. That concludes our presentation. I'll hand over to Alexandro for opening up the questions.

19:32 Thank you very much. Perfect. Tom, Jamie, thanks 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 for you, those questions have been submitted today, I'd like to remind you the recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And, Jamie, at this point, if I could just ask you to read out the questions where appropriate to do so, I'll pick up from you at the end. Take them in order oh, I'll take them in order where I can. First question, headcount has been reduced at the beginning of the financial year. What is the extent of the reduction from which departments has this involved? Redundancy costs and so on.

20:21 So what I can say, if you bear with me and and sorry. I had to just get this detailed information, from somebody. So, we did take out, a number of people in the restructuring. Between the end of f y twenty three, our headcount went from a 157 to a 149. We're now we're now have put recruitment, on freeze, and we're generally sort of one for one or if that's required. One in, one out, if that's required. But we are now down to a 140 people. So we we are controlling costs as we've said a number of times in this presentation. We are, absolutely sort of reviewing, all costs and efficiency, and that will be part of TON's strategy going forward.

21:12 Tom, don't know if you anything to add on that? No need Not really. You know, the the cost reductions are across the board. We and we've made a you know, there's I don't think there's a department that hasn't had a change of head either from performance or for cost reduction. K. Great. The next question is regarding John Anderson, who is one of the founders, previously director, and is was president for some time. Is he still receiving payment for advisory services? He asked no. And nothing more to add on that. And the welcome growth in TITON HOLDINGS, that was essentially just we had a couple of big customer wins.

21:58 We hope to grow TITON HOLDINGS. It's nice to see it making, small profits. And we do think there's big prospects in that market. We totally understand we're a very small business to try and address The US. But if we can do that on a sort of zero cost basis, then it and it makes sense. Next question. Given that we continue to be loss making and our interim dividend has reached net zero. I think that's a good pun. Our interim dividend has reached net zero. We are still are we still resolute in pursuing our own net zero carbon targets? We, our whole strategy will review everything we do. I just wanna say we take our environmental impact, very seriously. We are ISO 14,001.

22:46 But, yes, we will be reviewing our situation, and we'll come back and report on that in the next, meeting. TYSON, recently allowed his options to lapse. I think that is right. The question is, should directors be withdrawn if they do not participate in should options for directors be withdrawn if they don't not participate in them? I I can't comment on TITON's personal reasons for exercising or not exercising, other than I suspect they they were options sort of out of the money. But yeah. I'm I'm not gonna comment on that. I just wanted to flag up the question. Yeah.

23:35 Next question. Apologies. I have to read some of these. They're quite long. Is it is it general comment, which I will respond to about, directors owning shares? I think all I'll say at this stage is, there's been quite a change of teams. So, you know, you would expect people who weren't initially there not to own shares. However, we take it very seriously, and we want not just directors, but, senior leadership team members, you know, where possible to, be shareholders and, you know, have a have a sort of, financial commitments and interest in the business.

24:22 I'll make a comment for on that. So I I I believe I believe the CEOs should should own shares in the business. And, you know, just to be sure, the question and answer, I if there are things that sometimes prevent me from buying shares as as inside knowledge, but I will buy shares in the business if no. When I am able to. Okay. So if I was there any significant impact on us from Everest going into administration?

25:09 No. There was no, significant impact on that at all. Sorry. The questions are coming in thick and fast, so bear with me. Does TITON have this sufficient scale to compete in the mechanical ventilation market? Tom, you may wanna address that. I think the short answer is absolutely we do, and we're proving it by initial sales. But if you can put some color on that, that'd be great. Yeah. I I mean, I I think so. I I I think there's obviously, you know, some disadvantages compared to people like Volusion. But, you know, I would say if you look at some of the other other competitors like Envirovent, yes, yes, they're bigger than us, but they're they're not, like, multiple they're not, like, 20 times bigger than us. So I would say we do do we do have the scale, and and we do have some advantages for such a small company. We're quite vertically integrated. I mean, that's a double edged sword, but I I don't see any reason why we can't compete with mechanical ventilation.

26:06 And and as I say, you know, we are winning new business, and we have if you look at our mechanical ventilation sales this period notwithstanding, that has been showing, you know, good double digit growth for the past past few years. We're not gonna show that growth this financial year, but I I fully expect that to continue going forward. So short answer my that's a long answer to a short answer of yes. There's there's a number of questions here from I'm not sure I'm allowed to say who's who's from, so I won't but they're from the same person, I appreciate that. Thank you. I'm gonna group them together. Essentially, it's about the performance over the last thirty years Is there need for some serious change recognized? I mean, hopefully, what we're trying to do today as a new team in front of you is tell you that, you know, change is happening, I e, at the team level.

26:59 We we recognize performance is poor, and we understand that some serious change is required. So so the answer to that is absolutely yes. Yeah. I hope we got that across in the presentation. If we didn't want didn't, then, you know, I just wanna stress that that's that is the case. And in terms of the other question about when we could expect it here, we we will be TON will be working on the strategy over the next two or three months. That will be or not really the next month, obviously, but, you know, it'll take two or three months to finalize it. Board will review it. We will all sign up to it. And then at the next set of results, we will come and and report on it. And then there's a specific question, Tom, about the gross margin. I mean, I think I'm I'm I'm gonna Tom did some excellent work on competitors, and it slightly depends on the different sectors.

27:54 But there's no and there's I'm gonna preface it by saying there's no reason TITON shouldn't achieve these in time, but but we have to be patient because we're not gonna do it overnight. Do do I mean, I can I can touch briefly on the two business units? Oh, wait a minute. Okay. We we can share a bit more of that. Yeah. You know, the the the the mechanical ventilation should be should be in the mid thirties mid thirties, low forties. Gross margin. And the and the window door hardware should be in the mid twenties, low thirties. And, Tom, do you wanna just touch on some of the, I mean, the kind of best competitors' growth rate and maybe operating margin even. Yeah. So so we we have have been looking at our competitors. I mean, information is, you know, limited them, but, you know, our core mechanical ventilation competitors, you know, are making typically about 20% net profit.

28:52 You know you know, that needs to that needs to be our goal. And if you look at the principal hardware competitors, they they are typically making 25 to 30% gross margin, typically very, very efficient operationally, and, again, make making, you know, 10 to 20% net profit. And and that needs to be where we need to be benchmarking ourselves against, and where we need to be making sure that we're you know, our goal is needs to be achieved that, together with, showing showing showing the same sort of levels of growth of our competitors. So so work to do. There's a question here, Tom, about, you know, new products, you know, when and expected time frames are seeing significant growth and what are the KPIs for. I mean, I think, if I can just break that down, I think, really, what they're saying is is, you know, when do we see just growth generally and, you know, how will they be affected by by new products?

29:57 And and what are the kind of early indicators that we might want to look forward to to understand that growth? Well, I think we've covered I think we covered that in some detail in the presentation. So for the mechanic so we're not we're not we we haven't returned Win and Build hardware to growth. That that is still solid. And there's another question about Subinco. So I I cover that as well. So we we did lose a major supplier with Subinco with with indoor hardware. And, actually, that Hexalot project product that I that I showed you was a replacement of a Subinco product that we sold in high volume. But for mechanical mental mechanical ventilation, we are seeing indications of growth. I mean, our order book is not as high as it has been, but it is steadily growing month on month since the the lows in August, a bet from a low a low base.

30:48 And I fully expect with current trends, mechanical ventilation or order coverage will actually exceed the high highs sometime this year. So I I don't know I don't know what more I don't think I can share anymore other than the indications of that. But we are tracking orders. We're tracking pipeline, and I I hope to be able to share a lot more of this information in in coming investor meetings. There there's a question which I'm actually gonna open a bit wider, but it's a very good question about oh, it's now just disappeared. Okay. It's been taken away. But, it was it was a question really about, you know, new build projects that are low.

31:35 Are we addressing the social housing market? I think if we can just generically answer our kind of Yeah. To reach the market and market sectors. Yeah. So so the business is predominantly new build. Business actually, I say, within the new build, predominantly multi dwelling unit builds. And, obviously, a lot of our competitors have grown by by entering the social housing market. So you know? And and TITON TITON hasn't. And I think that's been a major factor why we've lagged behind some of our competition. But it it isn't straightforward to enter the the social housing market. So what I will say, it is an option. I'm really keen that we you know, the e one of the easiest easier ways there's no easy way to grow, but one of the easier ways to grow is to sell the same products we have to an adjacent market.

32:28 And so what we will explore in the strategy is what those adjacent markets could are are going to be. So it could be social housing. Social housing is a an adjacent market that that that we may be able to sell into. But what I what I don't wanna do, you know, it's not just one that we can just do. It would require investment in our in how we go to market or in surveying a building. So I wanna make sure that we attack adjacent markets in a way that we will now succeed. And, again, I'll share more that I can that I can when I do the strategic plan. But, yes, we are looking at that, and that is one of the options that we are gonna consider. There's a there's a question here on, is the trading period showing the effect of depending on orders of ducting and system sales, which delayed payment frauders, as opposed to more immediate orders of vents and hardware.

33:24 I mean, the the if I can just do an initial response, hope yes. Absolutely. We haven't focused on Windows and Doors hardware. And to as a a very a very, very basic level, those are sort of almost cool down orders. We don't get much visibility. There is some frameworks and so on, but we don't get much visibility and they're immediate. And, yes, absolutely, the system sales take more time. That's not an error in itself that we focused on the system sales. It it is an error that we haven't focused on Windows and Doors hardware. You know, we clearly should be focusing on both. But, Tom, if you wanna add to to that, that'd be great. I'm not sure. I think you've covered it, really. No. Okay. One Just in the question. That that's it. Yes. We are we are showing we are showing impacts on that in the trading period, but, you know, we're also showing impacts on minimum hardware erosion as well.

34:14 And, again, Tibinco is part of that, but it's it's also part part and parcel, I think, a go to market for for window and hardware, you know, could be very much improved. Great. Okay. So we're getting so towards the end of the questions. I think those two have been answered already. Just so everyone feels everything has been answered, there are a couple more questions which I'll just touch on. The is a question specifically about becoming one tree planted or certificate certified b corporation. I answered earlier about our net zero, approach. We'll be we take it very seriously. We're looking into it. We are ISO 14,001.

35:03 We are a number of other sort of accolades as well. So, yes, it is something we're looking into, but we want to balance that with making sure we're absolutely profitable and get the right return for our shareholders. And then there are a couple more sort of very detailed questions. There's one question about h two UK profits negating group losses for the year. I'm not sure where that's come from. I think the, point is that we said The UK, in h two, we expect to be profitable. That is the case and remains the case. There are forecast numbers out there, from our broker where you can see what our expectation for the year is. And there is a there was one more question.

35:53 Yeah. Just about the Hayward Hill land. Is there any excess land and so on? I mean, we're obviously looking you know, the Hale Hill land is an asset. It's an investment. You know, we're looking at every investment we have and and trying to maximize return on, that investment. So we're reviewing it and looking at it seriously, and if there's any excess or any any way of of improving returns, we absolutely will. And with that, I think, actually, all those questions, there are four remaining there, but but I'd say, IMC guys, we have answered all of those. Perfect. Jamie, Tom, thank you very much for answering those questions from investors. And, of course, the company can view all the questions submitted today and publish those responses out on the investor meet company platform.

36:38 But just before redirecting investors to provide you with their feedback, which is important to you both, Jamie, could I just ask you for a few closing comments? Yes. I think we've, sort of summarized everything. I mean, I just wanted to say, you know, thank you for Tom. I know it's not easy coming in with initial thoughts after just three weeks. It has been, you know, a a good start. We we had a board meeting yesterday, which was sort of immense positive. I think we're developing a clear direction for the business, but that will take some time. The Korean business we said we're reviewing, I mean, the main thing there is that we need to sort of focus on the core business and, again, make sure we're getting a return on all our investments. But I think overall, there is, you know, fantastic base here for the business. I know this is not good results, and, you know, we we hold our hand up to that, accept that, and and we want to improve.

37:34 You know, we do have a strong balance sheet. We have got some really good products. Competitors are achieving good results, so this is a market we can, you know, create a good business in. So there is a lot to build on. You know, we've got to focus on more sales. We've got to focus on enhanced margins and improved operating margins, gross margins, operating margins, and we've got to be much more sort of outwardly focused, and that's absolutely accepted. One of the most encouraging things to me is that, you know, the culture really is strong. There are lots of people who are driving for success in this business. So there is a fantastic base from from which to grow, but there is a lot of work to be done, and we're not gonna shirk from that. We know that needs to happen.

38:20 So with that, I really just wanted to say thank you very much everyone for your time. As we said, happy for you to contact us and answer more ask more questions or, you know, come and visit. And we look forward to seeing everybody in six months time and reporting on the renewed strategy for the business. Thank you very much. Perfect. Jamie, Tom, thank you once again for updating investors today. Could I please ask investors not to close this session? As you know, we automatically redirected, provide your feedback in order that the management team can better understand your views and expectations. This will then take a few moments to complete, but some should be greatly valued by the company. On behalf of the management team of TITON HOLDINGS PLC, we'd like to thank you for attending today's presentation, and good morning to you all.