Titon Holdings (LSE:TON) — Investor Presentation

0:00 Good morning, and welcome to the TITON HOLDINGS PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right 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 received during the meeting itself, however the company can review all questions submitted today and publish responses where it's 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 Brook, chair. Good morning to you, sir.

0:29 Good morning. Thank you, Alessandro. Good morning, everybody, and thank you for joining us today from wherever you're located. I'm delighted to be here. My name is Jamie Brook. I've recently taken on the role of chairman at TITON just starting at the beginning of January, so I'm now on my twenty third day. First and foremost, just like to express my gratitude to you, our shareholders, for the warm welcome onto your board. And I'd also like to to give my appreciation to Keith Ritchie, our previous chairman, for his dedicated service to the company over the past eleven years. And today, joining me is Carolyn Eisen, our CFO, who has been holding the fort very well over the last few months, and our new CEO, Tom Carpenter, who we'll talk about more later, is joining us in April.

1:19 So in the interim, I'm here to represent him. In today's agenda, we'll be discussing our FY twenty three results and achievements year end September as a reminder, as well as outlining our future plans and focus for driving profits.

1:38 As a newcomer, and it has only been three weeks, I'd just like to share my initial observations on the group. So I've been rapidly immersed in the business, working alongside Caroline on producing the announcements today. And I'm also getting to know the rest of the board as well. So thank you all on the board for your welcome. I've met a number of the senior staff across all divisions in r and d, manufacturing, finance, sales, and so on. And I've been out to visit the Rochester office and also the Haverhill factory, which, as a reminder, the group owns. Value taken last September 2022. We'll talk about it later. And also had a number of conversations with our Korean partners. So it's been a sort of baptism of fire.

2:24 And I think the my initial views is this is a really robust company with some great potential. You know, it's been a key player in its markets for over fifty years, and and long way that continue. It boasts a strong focus on product development, a really positive ethos within the business, and there is a solid core team, much of which has been newly developed over the last sort of twelve to eighteen months. And, you know, we have to face that the last few years have been challenging with COVID. Supply chain disruptions, subdued new builds, and all these things which many companies have faced. But TITON during that period has also navigated a particularly difficult time with an ERP implementation that was difficult and a number of CEO transitions, all of which has impacted performance.

3:19 And, hopefully, we're at the end of all that, and we have one CEO coming in April. So despite all this, though, I see a really driven team, it's been significantly enhanced over the last eighteen months. And that is vital to future success, and and addressing all the challenges that the business has been through. I'm really excited about Tom joining us. And I have to say, and for Karen, who may be blushing now, she's been fantastically dedicated in steering the company until Tom's Tom arriving. There's a lot to do. Absolutely. We all know that. Needing to drive new sales, but the potential is is evident. And let let's be clear. This is supported by a very strong balance sheet.

4:04 So today, we'll delve into the business and talk about how we plan to unlock this potential.

4:12 So just in terms of summary of what we're gonna talk about today, I'll give a brief summary of the business. Some of you all know this. Carolyn will, with her sort of experience with the group, will handle most of the presentation, and she'll talk about business and market overview, followed by a detailed review of our financial performance, highlighting key achievements of the year. I'll then discuss our business imperatives focusing on our to return to profitability, and enhance our medium term performance. So if we can okay. Okay. To get to the first slide. So talking to each of these points, TITON sort of specializes in supplying ventilation products and window and door hardware.

5:01 And it's got a long, long standing presence in the market. And the market itself has a lot of key long term drivers. There's obviously ongoing demand for new housing. Okay. This has been subdued recently, but there's lots of vested interest in this picking up over time, and it's it's not gonna go away. So I think there's good sort of demographic long term demand for this. There is increasing regulation, and that's basically all no regulation doesn't reduce. There is real emphasis on sort of healthy living and high air quality, and that requires ventilation.

5:49 Need for energy efficiency and airtight homes, and that also requires ventilation. So there are a lot of factors which are driving the medium to long term growth in this business. Albeit, you know, we do accept and are very aware that the short term new builds are being tough. So our our sales encompass new builds and repair and maintenance. We have been more focused on new builds and need to focus more on RMI. We know that is a of a key to our future. And in terms of the products, we have both passive and natural ventilation products and mechanical ventilation products. And we see the real significant growth in in the latter of those.

6:35 And the numbers have have proven that out, and we'll talk about that later.

6:39 So while Europe offers significant opportunities and and there's been some good growth in that in in the year, The market is is difficult there, but we see that as a big part of our future. The USA, it's easy to look at and think it's relatively small. We have a foothold that has become profitable, which is a sort of significant turning factor in The US for us. But, I mean, our absolute focus is on The UK market, which is well over 70% of our sales. And there's plenty more to go for in that space. And then in terms of the sort of ethos of the business on development, in my recent visit to the Haverhill site, I mean, it's very encouraging. You know, there was a huge commitment to sort of manufacturing and lean practices. And Paul, who runs that manufacturing site, is is incredibly focused on that having been at, you know, a number of businesses, you know, focusing on on the efficiency of of a manufacturing site.

7:34 And then the other pool, there's lots of pools over there at Haverhill, runs r and d. And again, there's a impressive sort of r and d site. I think probably in time, we'll need more investment as well. But there is a real focus on new product development. And then then lastly, I'd say that a real kind of strengthening has been the sales team. The sales team has definitely been depleted over the last twelve months or so, but has has more recently, six months or so ago, under the leadership of James Fisher, been replenished and is now at. And obviously, their focus is is on driving the pipeline and delivering future sales.

8:21 So with that introduction, I'd like to hand over to Carolyn, who will talk you through the business overview. Thank you, Jamie. Good morning, everyone. So I'm just gonna give you a quick, brief overview of the markets that we operate in. Jamie's mentioned, a bit of it, but I'll just put, a bit more detail to that. So 47% of our revenue does come from our window and door hardware business, and that would be your kind of natural ventilation, so background ventilators or trickle vents as you might know them, and other window and door hardware such as locks, hinges, handles, etcetera. 74% of those sales are manufactured in house, so in our Haverhill factory. And then the other 26%, are externally sourced, half of that being our own branded products.

9:09 Ventilation systems, so that's our integrated mechanical ventilation system side of the business. That accounts for 53% of our revenue, and that will include, mechanical ventilation with heat recovery units. We often refer to them as NVHRs. Centralized mechanical extract units, a decentralized, and also our fire safe air brick range. And we manufacture 84% of our products that we sell, and 16% are bought in. So where there is a crossover in markets that both of those areas sell into, so we do, sell into new bid market. But also on window and door hardware, we, sell more into window and door fabricators, which are more focused on the RMI side, often referred to as the refurb market.

9:56 So we do have a little bit of diversification there. The only exception to both of those areas, are the sales we make into Europe, which go through, OEM and distributors. And you can see just there at the bottom, the split between our UK and export revenues with vent systems typically selling 70% into UK, 30% into Europe, and window and door hardware, predominantly being UK based with only 7% going into the rest of Europe. So just looking at what products kind of fit into those different areas. We've got the mechanical ventilation products there at the top. So we have, the CME range, which are continuously running centralized fans, which have been which has proved really popular with UK builders and developers.

10:48 They provide a whole house ventilation solution instead of your traditional intermittent extract fans. HRBs, so that's our MBHR range. We have a lot of units that fall within this range. They have an extent we have an extensive range of energy efficient models that, again, typically go into our new build market. TITON fire safe air brick. These were developed to provide a fire resistant solution, with to work with whole house ventilation systems, particularly in high rise situations and also with the fire legislation changing as well, and that's been proven very popular product for us. And the TITON ultimate DMEV, again, that's an award winning product, which is a decentralized continuous running fan specifically designed to meet the increased performance levels required by the building regs.

11:46 At the bottom there, you'll see our net natural ventilation products, which might be more familiar to you. So we've got the Trim Vent, Select Extra, Trick Event. We have the SF Extra Vent, the venture standard duty friction hinge, and the steering door cylinder. The steering door cylinder is a BSI cut mark three star designed cylinder to meet high security standards.

12:14 So product highlights for 2023. I won't, go through all of the detail on this, but the top one so that was an extension to our FireSafe Verbrik range, and this was around push through wall kit. And that actually won ancillary products for the year at the HRV awards twenty twenty three, so I'm really proud of that product. The TITON DMEV, which I've all already mentioned, which again received the highly commended award at the recent OV Saving Awards for domestic product of the year. Hexalock, which is a window and door hardware product, not selling really well at the moment since launch. We continue to develop new advanced control systems, linking our products with mobile phone apps. Again, proven very popular with our client base, particularly the way the the world is going technologically.

13:05 And down at the bottom, we've launched two new HRV units, the HRV four and four point two five. And again, well received by the market is a compact unit, which does offer cutting edge performance. And we see that that will be a key those will be key products in our range going forward.

13:26 Okay. So a brief market overview. We are a market which is driven by building regulations, and and thankfully, those regulations actually continue to drive demand for us. As we go more away from the natural ventilation route towards the CME, mechanical a ventilation of heat recovery route that drives higher revenue for us and higher margins.

13:52 June 22, the regulations did introduce that all new build properties and replacement windows had to be fitted with background ventilators, so that's been good for our business. And we do have the product range, to keep in line with these regulations. We're constantly reviewing to make sure that we that we are selling what the market needs. And similarly, all of our export markets are driven by similar regulations, and our r and d team often are developing products to fit into those to those markets as well. So this data source was Experian in January 23. So a little bit out of date, but actually the the trend has has has seen good. So as you can see, new build in RMI was always meant to drop in 2023, and we did see that in our business.

14:42 But the green shoots are there for the for them to start rising in 2024. So we remain hopeful that our market, increases. So f y '23 financial performance. Just give a brief overview of the income statement. So during the year, we managed to grow revenue marginally by 1.1%, and we managed to increase our our gross margin. We increased our underlying EBITDA to point four three million, up from point one four million as we continue to efficiently control labor, materials, and energy cost inflation. The group loss before tax, I think it's important to note that the Korean, loss within that was 650,000, which accounted for more than 75% of the total group loss.

15:38 UK and Europe and America were in line with our expectations. Korea continued to to really suffer with their market conditions. And I'd like to note that we have a proposed final dividend of 0.5p per share, which which will be presented at the AGM for approval by our shareholders. We, as you can see from the table, the total dividend per share share last year was 2p. This year, it'll be 1p. We did, as a board, feel it was important to show our confidence in the business by declaring a dividend and trying to maintain that dividend level. However, with keeping a little bit of caution given the market uncertainty, and the changes that we've had at TITON. Balance sheet wise, so we still have a very strong balance sheet. We still have no financial debt.

16:31 Within that non current asset figure, we have, the freehold property. That's included at cost, which is, which equates to 1,710,000. That property was valued in 2022 at 5,400,000, so we have some strength there. Also, it was very pleasing that we managed to increase our cash by 500,000 in the year. 900,000 of that was cash generated by operations, which was due to careful working capital management. An important element of that, and this has been highlighted in the past, was, getting continued control of our inventory. And you can see from that table there, we managed to decrease our year end stock level by six and a half percent.

17:15 We also managed to increase our or decrease our debt today, so we're working much more closely with customers. So that's really been working in our favor. Capital expenditure was in line with last year and and will be similar levels in 2024. And it's it was really pleasing that we received our first ever dividend from our associate company, Brown Tech, in March 23, which amounted to just under 300,000.

17:48 So this shows our segment and divisional analysis. Revenue was lower in the window and door hardware vision division in 2023. Our UK sales of background ventilators had increased, but our sales of our window and door hardware products that were externally sourced from Savinco, decreased by 12%. We've talked about the end of that relationship, previously. We are starting to replace those product with different relationships, but they're not quite at the level that we had with Savinco.

18:19 Sales of TITON manufactured products overall rose by 3%, and our branded bought in products rose by 5% as we released the Asterion two range, which has been proved very popular with our customers. Ventilation systems for mechanical ventilation, revenue increased by 17% overall. 71% of that was European sales.

18:43 We've recently launched our new HRV four and four point two fives, which will go into the European market as well. So we look to look forward to see what that product will do there. To the right, you can see a breakdown in our revenues over the years. TITON Career has has made up less, of our overall group revenue with, UK and Europe making up 84%. TITON HOLDINGS PLC, very small percentage at 4%, and Korea only now at 12%.

19:17 So 2023 highlights and progress. As Jamie said, it has been a challenging year with various different changes, but there are a lot of good things to report as well. So we have continued to develop our ERP system so that we can improve our processes. We're starting to see the benefit of that now. One of the main benefits you can see, as mentioned before, is the reduction in stock, which is ultimately down to an improvement in processes with our supply chain team.

19:44 This did mean that we resolved our order backlog, which we'd spoken of previously, and we now have returned to delivering on time in full, and we have very good lead times for our customers. We have continued to enhance all of our processes in house and continued focus on health and safety and culture improvements. Leadership team, as we've mentioned before, we do have a new chief executive starting in April, and we were pleased to welcome Jamie onto our board. We also recruited key role recruitment in operations, commercial, and r and d. And we have we did, as Jamie mentioned earlier, our sales team was depleted. So we've strengthened that area, and we've grown our sales teams. And we're now at capacity, and we're focusing on growing that pipeline.

20:34 Product developers, we have a continued focus on product development. Those guys never sit still as we try and make sure that we are in line with regulation and providing the products that our customer needs, and we'll continue that investment. And we were as I said before, we are pleased that our HRV 4.25 recently and the recently won awards.

20:56 We had an ongoing focus on cost and working capital controls, which again can be seen in our number, particularly the working capital side. And we have been very mindful of controlling our cost base, and we have seen a 13% reduction in our employees as we've met demand.

21:15 Financial performance. So excluding career sales had actually grown by 4.2% year on year. As mentioned before, we have very strong ventilation system sales, and European sales also had increased as had America. So some really good news, in there in there. Third party products, again, we're still working on different relationships to supply products that we used to enjoy with Subinco, and that's going very well, but still under under review, and we're not quite completely mitigating the loss of.

21:50 And career sales, as mentioned before, very tough market as they move to mechanical ventilation as well. Their sales were down 18% overall.

22:05 Okay. Back to you, Jamie. Thanks, Karen. So yeah. So so firstly, just to say that our sort of primary focus clearly is to return the group to profitability and to make that a sort of sustainable path to some profitable growth over the future. And we have our new CEO coming in in April, as we've mentioned a number of times. He will be specifically targeted on sort of improving growth, increasing our sort of commercial discipline, focusing on profit margins and their improvement, working capital, and and just generally driving profitable growth.

23:00 And that will filter down, as you'd expect, to the rest of the senior leadership team. So, you know, how are we gonna do that? And there are obviously, you know, detailed factors behind all of this, but it's about sort of improving operating efficiencies and therefore getting gross margin improvements. We believe there is is a lot to go for in terms of buying and procurement strategies, achieving discounts, volume rebates, and so on, just a more cohesive and controlled buying strategy. And in terms of pricing, that's been looked at in in quite a lot of detail across each of the product ranges. There's an understanding of the cost of each product, but we need to make sure that we respond quickly to any inflationary pressures.

23:49 I really understand the the quality of the product because the the the products are sort of top quality within their sectors, and understand the achievable pricing that we can get from that. We as you're well aware, sort of, that we need to push harder into the residential market. Mechanical ventilation, we think, is the sort of strong area for growth in that. And not to say that we'll forget the the natural and passive side, but mechanical being the being the sort of particular growth areas that we see.

24:23 And also in social housing, we need to give a a big push. And there are other areas we are strong in. Certain areas of the market with certain types of customers. There are other areas such as apartments and so on that also need mechanical ventilation and we can can drive into. New regulations are gonna continue. We really do, through Nick on the board, have have really good insights into that. And just to give a you know, that's gonna continue and drive some mechanical ventilation every single area of our of our business. But, for example, even on the passive side, trickle vents need to be put into all window replacements across The UK now. So there's continuing demand for for even the sort of earlier products.

25:12 Our new team is is is gonna make a massive difference, and and, you know, we think they need to we will try and drive the sales and the operating profits as we've mentioned, particularly trying to to drive sales pipeline, and there's a strong focus on that at the moment, and that is is growing. And and all of this, we're gonna have a strong commitment to to sort of ESG metrics and environmental metrics. And then lastly, South Korea. I I'm sort of well aware that that seems a distant place to The UK for a company like TITON. I just wanna stress that has been so I've obviously spent a bit of time reviewing that. That has been a very good return for the business.

26:00 And we

26:01 estimate that the return over many years, about twelve years, has been sort of mid to high teens IRR returns, so a very good return for the business and good cash flow returns that is as well. We are a new team, me coming in, Tom coming in, and others coming in. We've mentioned a number of times. So we're looking at all our options there in order to to maximize our value over the over the short to medium term. And then if we can let me flip to the next page. So this is really a reiteration of the previous page. I won't spend much time on it. But I will say that as you'd expect, we keep the customer at the forefront of every decision we make.

26:48 We really focus on driving product innovation and sales. And I know that's easy to say, but if you went to the site, you would see that happening, live. And delivering that at a at a high quality and efficiently and cost effectively, but not trying to be the lowest cost operator necessarily, but understanding where the strength and high quality of our products can really meet customer demands. And all of that, we know could only be delivered with a effective and happy workforce. So we really focus on a culture of excellence and driving the staff. And and clearly, there's a massive prioritization at the at the factory particularly, but everywhere, on health and safety and and considering our environmental impact.

27:40 So with that, I'll just flip to the outlook. I think you can sort of get a feel that we're optimistic about the, sort of medium term future for the business. It's been a tough time, but but we think they're very strong medium term sort of market drivers. And we've got a really good balance sheet up with which to build this business or rebuild the growth of this business. We've got a new CEO coming in who will drive that growth and be incentivized to drive that growth. And although we're operating in a challenging sort of economic and housing markets, we do think that will recover The sort of RMI market is or sorry, the new build and RMI market is showing a fairly subdued year this year, but with recovery in 2025.

28:28 And I think there's a lot of things that will drive that beyond that. So with that, we come to the end of the presentation. And I'd like to open the floor to questions. Perfect. Jeremy, Carolyn, thank you very much for your presentation. Ladies and gentlemen, please 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 for the company to take a few moments to review 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. As you can see, we have received a number of questions throughout today's presentation. And Jamie, at this point, if I could just hand over to you just to share the q and a by reading out the questions where appropriate to do so, I'll pick up from you at the end. Okay. Bear with me. This is a a long question. The first one, is it fair to say that your level of UK sales are predominantly predicated on the level of new house builds?

29:25 With new house builds per annum being significantly below historic levels and looking unlikely to ever return to the 300 k per annum at previous years even under a new labor government, perhaps. If this is the case, then how do you intend to drive sales in a subdued new build landscape? Can I just first address that? I I mean, new builds are around 200,000 as we did on a previous slide. I'm not sure they were ever 300,000, but forgive me if I'm I'm wrong and the questioner knows more about this than me. I think that was a target that people wanted to go for. It has been subdued. I just wanna make the point that it's subdued by sort of one or 2% at the moment. And yes, there's a lot in the press about it.

30:11 There is an expectation of a mild recovery. We are gonna have to drive growth through market share growth, and that is a key focus in RMI growth, and a growth in the RMI area. Karen, I don't know if you wanted to add anything to that. No. I think what you've said is is correct. You know, we are a lot of our products do go into that new build space, but we do have a lot of other products as well that that go into the refurb market. And as Jamie said, it's really key for us to start growing our market share. There's a lot of market to go after. So in a subdued subdued market, that is where we need to focus our efforts. And I was just gonna add one thing as an example that was mentioned to me is, you know, for example, we're very good at the sort of new new housing development companies.

31:02 You know, there are other people you can sell through such as, you know, the companies that do the the kind of fit out for those housings and the sort of mechanical engineering fit out. And, you know, that's an area which we should we do sell to. But, again, there are plenty of customers which we haven't tapped into in that area that we could address. So, moving on to the next question, from David. You mentioned efforts to reduce inventory levels and improve cash flow. Could you elaborate on the specific strategies being employed and their expected impact? Karen, do wanna do that? Or I can Yeah. So a lot of that was has been around process. So we've introduced, a product life cycle process. We've also reviewed our buying strategies and procurement procurement limits.

31:51 We strengthened the procurement team and supply chain team overall, so that has certainly helped. But also, we've introduced better levels of forecasting so that we can make sure that our internal MRP is is working correctly. And as you as you can see from the inventory number is working so far, but still a lot to do in that area, but we're on the right road. And if I can add to that as well, some of that was sort of COVID related when supply chains were very difficult. So we had, you know, many, many months of of sort of order volume in in the raw materials, and that's obviously been focused on and and worked through to to get those excesses down. And then as Karen says, you've seen that in numbers. David as well. Thank you. Are there any plans for strategic acquisitions or expands expansions into new markets or product lines to drive growth?

32:48 And then shall I just touch on that, Karen? I mean, I've only come in very, recently. I mean, strategic acquisitions absolutely could be a possibility, but there are no plans at the moment. And until we get our TON onboard, then I don't think there are gonna be any plans for that. And the other thing I'd just add is the absolute focus is driving sort of sales growth with existing products. And then, maybe you can talk to I mean, Karen has touched on our focus on new product development, which is, significant to us as well. But, Karen, do you wanna add to that? No. And I think one of the key things that we have planned this year is to actually work on our strategic plan. So as Jamie said, no, no plans at all for strategic acquisition at this stage.

33:39 In terms of expansions into new markets, that's always a possibility, and that is being reviewed currently. And as I say, product lines to drive growth, we're always looking at at that as well. And that will that will form part of our product strategy. And then some windows and door companies have had a difficult time recently. We've that sort of in in some of listed companies with Safestar, for instance, going to administration. Has TITON been impacted by potential customers going to administration? I think that's probably a twofold question, isn't it? One is, have we seen any bad debts as a result of of sort of specifically wooden and door conversion? Well, generally. And then two is, you know, as a route to market, has that affected us?

34:25 Karen, that's probably one for you. Yeah. So in terms of, our debts, it has affected us, but not materially so. So we've we've seen a couple of our smaller customers, go into administration. We keep a very close eye on it, and we still have very rigorous credit control, procedures. So we we're not offering credit if they don't have strong credit scores. So we're managing that on the go on an ongoing basis. Also, group is looking at credit insurance loss as well, which we will bring in should we should we need to. And then in terms of it affecting the market, not really. And in fact, I mean, that work hasn't gone away that SafeStyle had. So their order book would have gone to to other, other players in that industry. So in terms of, the market, not as much.

35:20 And the and just to stress that the, you know, bad we went through this with the board. We shouldn't probably say a number here, but the bad debt level is is extremely low for for as a percentage of the business. Good. Looking at whether there are any other ones that we're able to answer. So we've got one here from Richard. You mentioned in your first investor meet presentation that there is little prospect of selling European standard mechanical ventilation products profitably into the Korean market. Given the continuing less losses in Korea and development costs for new local products or the strategy not to be to exit that market, Add to that, the lack of management control, is the balance sheet carrying view realistic?

36:23 So, I mean, I I can address that. As I said, Korea has been a good return for us. It is focused very much on the sort of natural ventilation. There is little sort of product kinda crossover at the moment between Korea and The UK. Historically, there was, but little at the moment. So it would be difficult for mechanical ventilation from The UK to be sort of sent over to Korea and and perhaps not applicable in terms of regulations. And then in terms of the continued losses, yeah, I mean, it has been profitable in the past. It has had recent losses. We're obviously working hard to try and, you know, get those to be profits.

37:11 And are reviewing all our options in Korea. And then is the balance sheet value carrying value realistic? We have just been through an audit, and we have sort of assessed and reviewed the balance sheet value, and so we believe that is realistic. I think how are we doing for time? I think if if I could just there's a couple more questions come through. Andrew, how sustainable is the current dividend policy? Obviously, we just review the dividend year on year. It was reviewed this year again and has been halved. The Karen has mentioned the reasons for that. You know, we're not profitable this year.

38:04 Is if is a dividend in the future sustainable? Yes. Because we have adequate retained reserves. And and once we get back to profitability, then then we will have further profits to pay out. I would I would just say that we should reserve the right to review the dividend every every year. There are just a couple more questions that we've probably got time to address. How does TITON view its current position in the competitive landscape, especially in its primary markets? And how do you differentiate from others?

38:50 I mean, I I've I've just been sort of round looking at all the products. I mean, it's there's no doubt that the market is competitive. So, for example, I'm just gonna say one particular product. If you take trickle vents, there are suppliers in the market who are doing cheaper products, and they are they they they should have manufactured them down by by very high process manufacturing, but they are much flimsy and lower quality products. That area for us is still an area for growth. We have a high quality product, and it's important that we address the customers that want that high quality product.

39:35 I mean, such to the effect that you can you can feel it. The customer can see it. The customer can feel it. So it's it's not a sort of out of sight, out of mind product. So there's no doubt that our market's competitive. All of our markets are competitive. We must therefore continue to invest in to research and development ensure that we have the best products. We and just to be clear, although we are always gonna be focusing on trying to be price competitive, we don't always have to be the lowest cost operator, and that's not not our target. We want to maintain the quality. There is one last question, which I might ask your help on, Caroline, is you reported improved performance in The UK and Europe in the second half of the year. What were the key drivers for that, and how do you maintain that momentum?

40:25 So part of that improved performance was margin orientated. So we managed to control our our margin, as we said earlier in the presentation, you know, making sure that we've made an allowance for inflation, the cost the increased cost of energy and employment costs. But also, there was a there were a few new products that came to market, which was successful. And also during that time, careful cost management, and there is a real focus on that in the business now. In terms of maintaining it and enhancing it, so all of those processes now are in place. So they are ongoing. So that means that that will continue anyway naturally. We have strengthened teams with the business now as well, so we'll be able to keep that momentum going. And I think it's gonna be really important doing that strategic review this year to do with the focus and direction as well that we can work to.

41:21 And I I was just gonna add one thing to that. I mean, for example, you look at our European sales, 71% growth. Fantastic. I'm just gonna just wanna be clear. Don't expect that to continue at that level of growth. Some of that was backlog being cleared. So, you know, whilst we are still you know, Europe is a, I think, a very exciting area, we won't maintain 71% growth going forward. Jamie, Caroline, I think that is all the questions. So thank you very much for answering those. And, of course, the company can review all the questions submitted today, and we'll publish those responses on the investor meet company platform. But just before redirecting investors, provide you their feedback, which is particularly important to the company, Jamie, could I just ask you for a few closing comments? Yes.

42:07 Absolutely. I mean, really just to say thank you very much everybody for attending. We are absolutely on focused on sort of driving performance in this company. We are very aware of a board as a board that we work for the company and for shareholders. And we will be back with the interims which you will be receiving in May. And so we look forward to seeing you all then. Perfect. Jamie, Caroline, thank you once again for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but some should be greatly valued by the company. On behalf of management team of TITON HOLDINGS PLC, we'd like to thank you for attending today's presentation, and good morning to you all.