Ashtead Technology Holdings (LSE:AT.) — Investor Presentation

0:01 Good morning, and welcome to the ASHTEAD Technology 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 on the right hand 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. 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. And I'd now like to hand you over to Alan Piri, CEO. Good morning,

0:32 sir. Thank you, Lily, and good morning, everyone. Thank you for joining us. It's an exciting time for the business. We've traded strongly through 2023, and the market is creating a strong growth runway for us. In summary, if I get the slides moving correctly, we increased revenue by 51% last year across all geographic markets. We increased of the revenue, we increased it 35% organically and 17% through m and a. Pleasingly, we increased, renewables revenue by 50%, which now accounts for 31% of our total revenue. We also increased our oil and gas revenues by 52%.

1:17 We increased cost utilization. We increased pricing, which drove gross margins, which increased to 78%. The business is positioned for growth. Last year, we invested 19,100,000 of CapEx in our fleet to expand its breadth and depth. We increased headcount organically by 25%, and we also added 203 positions through the acquisition of ACE to finish the year with 527 people. We fully integrated the acquisitions that we did in 2022, and we acquired ACE Winches in November 23. We continue to view m and a as a key growth driver, and our approach will continue to be selective and disciplined.

2:03 The structural tailwinds are providing a positive outlook. We continue to see focus on energy security and energy affordability, and we also see our increased recognition that all forms of energy will be part of the transition. Our outlook continues, to grow in confidence given the customer backlog increase over, the last, few months. And, combined with the increased customer backlogs and the internal positioning that we have within the business, we believe that the business is well set up for long term sustainable growth. The board is encouraged by the group's performance in q one twenty twenty four, and the full year '24 expectations remain unchanged.

2:58 We are really pleased with how the the business has has come together over the last few years. The platform that we have creates a great opportunity to drive financial performance and further scale the business. We have substantially grown and strengthened business since we listed in November 2021. And through both organic and inorganic investment, we are building unrivaled capability. We have a reputation for delivering differentiated customer solutions. The market outlook is significantly stronger, and we are well positioned to benefit from that. In summary, we know what we're doing. Our strategy is clear. Our team is focused on executing the plan.

3:40 Drilling further down into why we believe that we're well positioned. We're building integrated capability through our three service lines with a one team approach and three core values at its heart, agility, collaboration, and excellence. From a customer's perspective, we continue to innovate, developing new products and solutions for our customers. We have the experience and expertise to really add value. We have the biggest independent fleet in the market, and we have proper international reach. As we continue, to go through the points on the right hand graphic from sort of the the bottom coming right to the left hand side. From an investor perspective, we're positioned to benefit from a high growth market.

4:27 Propendency to rent has continued to increase given the skills shortage and the lengthy new times or lead times on on equipment. Through complementary m and a, we are building enhanced capability and competitive advantage. The business produces strong margins and cash flow. We've got real momentum to continue the growth that we've seen over the last couple of years. I'd like to hand over to Ingrid who will talk us through some of the numbers. Thank you, Alan. I'm delighted to deliver yet another excellent set of results for the year. 2023 was a transformational year for our business as we continue to increase our top line through both organic investment and m and a. 2023 sees the first full year trade in of our 2022 acquisitions, higher tech and resubsea, and one month results from Ace Winches, which we acquired in November 2023.

5:18 Our revenue growth, as Alan said, of 51% can be split 35 from organic growth and 17% from M and A, so the full year impact of those two acquisitions and then one month of ACE, with a small reduction from FX. Our EBITDA grew by 82%, and we continue to increase both pricing and cost utilization, delivering a ROIC of 28% whilst maintaining a robust balance sheet.

5:45 The blue graphs demonstrate the growth journey the company has been on over the past few years. The dark bars are actual, and the yellow shows the pro form a, which would add to eleven months pre acquisition trade in for Ace So to look at the business as a as a whole now, if we had had ACE for the full year, we would have delivered a 149,600,000 of revenue, 60,900,000 of EBITDA, that's a 41% margin, and then 45,400,000 of EBITDA, which is a 30% margin. As the mix of services continues to change and we continue to build out our service capability and with continued investment and growth, we see go forward margins in the high 20%. Our revenue growth came from both renewables and oil and gas with 50% growth in renewables, representing 31% of our revenues and a 52% growth in our oil and gas business. We delivered strong margins while continuing to invest in people and facilities to build a business capable of continued growth.

6:46 At the bottom line, we were delighted to deliver an adjusted EPS growth of 73%. Our cash flow remains strong due to our positive trading results and a positive inflow from working capital. We invested GBP 19,500,000 in CapEx in the year, of which GBP 19,100,000 was in our rental fleet. And we continue to maintain a robust balance sheet. Our net debt to EBITDA leverage was 1.3 times at year end. And if you look at that on a pro form a basis for the full year of ACE, it's one times. We delivered ROIC significantly ahead of cost of capital, and this will continue to evolve as we invest in growth, both organically and through acquisition. If you look at our capital allocation priorities, these remain the same as we have indicated in the past. Our pro form a leverage of one times gives us capacity to continue to invest both organically and inorganically to build the breadth and depth of our business.

7:45 We will continue with our progressive dividend policy and have recommended a 1.1p per share final dividend for approval at our AGM on the May 30. And we finally we've and before I hand back to Alan, we've made good progress on our sustainability journey with a strategy linked to 11 of The US sustainable goals. We grew our revenue from renewables by 50%, and this represents 31% of our revenues, and we maintain a 50% target of revenues from renewables in the medium term. Our employees are at the heart of our success, and we remain focused on making sure that we provide a support and development opportunities for them and are investing further in learning the development through 2024. Thank you, Ingrid. So turning to the market opportunity that's in front of us.

8:36 We continue to see a strong growth runway for the business. If we look at the graph or the graphic on the left hand side, ASHTEAD TECHNOLOGY's total addressable market is expected to grow to 3,500,000,000 US by 2027 at a CAGR of 11% from 2023. Leading that growth is offshore wind, 25% CAGR, with oil and gas growing at 7%. As I said earlier, you know, the need for a balanced energy transition is increasingly being recognized driven by energy security and energy affordability. In terms of offshore renewables, despite recent headwinds, the offshore renewables market is forecast to grow strongly.

9:22 ASHTEAD is very well placed to benefit from offshore wind because of the transferability of our skills and expertise from oil and gas, supporting the same customers with the same type of equipment from our existing locations. We see oil and gas very much being part of the energy transition and will fund the ASHTEAD TECHNOLOGY's transition to offshore renewables. On the right hand side, we show a graph of offshore greenfield investment by sanctioning year. As can be seen, over the last six years, the average has been $87,000,000,000. That increases for on a forecast basis over the next four years to US129 billion dollars being an increase of 48%.

10:12 In 2023, of the US128 billion of greenfield investment sanctions, we saw the sanction of Roastbank in The UK. We saw significant activity in Norway, and we also saw significant activity coming out through South America, specifically Brazil. Actually, the technology is very well placed to benefit from all those markets. Turning to offshore wind. To portray this business, or so this industry, instead of showing, gigawatts as we normally do, we thought it'd be easier to show the number of offshore wind farms that's in operation. So from the graph, a 194 offshore wind farms were operational in March 2024, forecast by Raistat to increase to 501 by the end of the decade, being an increase of 158.

11:09 If we dial back, you know, closer to where we are now and look at the timeline out to 2026, the increase is expected to be 43% going from a 194 to 277.

11:26 Of those that need to have all the activity that needs to happen to achieve that, 34 wind farms or 41% is under construction, 31 or 37% is approved with a balance in application.

11:47 In terms of backlog, ASHTEAD TECHNOLOGY is not a backlog business, but our customers are. So what we've done here is taken publicly available information to show how backlogs have moved over the last few years. From the left hand chart, you can see that for seven customers who made up a significant part of ASHTEAD TECHNOLOGY's revenue in 2024, Backlogs have doubled since 2020.

12:13 Looking specifically at certain customers, PRYSMUM Group, which is 100% pure wind, increased their backlog by a 109% last year. TECHNOLOGY, we're very much focused in oil and gas, increased their backlog by 41%. And then the others, other down the list who operate across both end markets increased their backlogs in very decrease and with the, SiPen increasing by 51%. Not only are backlogs increasing, but they're also increasing in duration. If we take the key subsea players of SiPen, subsea seven, and TECHNOLOGY, we can see that after the backlog that existed at the end of twenty twenty three, 29% of that backlog was for execution in 2026 and beyond.

13:06 Increasing multiyear customer backlog is ASHTEAD's growth runway for the future. These are all positive market dynamics, which underpin our confidence in our market and our ability to fully execute on our strategy.

13:21 Last year, ASHTEAD continued to increase both utilization and pricing. Cost utilization increased by 1% to 45%, with pricing increasing by a form of 13%, which offset any price increases that we saw coming through on wages and supply chain inflation.

13:44 We're delighted to say that the 22 acquisitions are performing strongly. These were acquired to build out capability in our Mechanical Solutions service line, consolidating a highly fragmented market. They're both now fully integrated and are now operating under the ASHTEAD TECHNOLOGY name. We've invested to expand the rental fleet, adding people and also increasing geographic

14:07 coverage. Customer feedback has been very complementary, and we're continually seeing increased opportunity to hire bundled equipment packages. In WE Subsea, we increased 2023 revenues by 54% compared to the revenues that we acquired at acquisition. The fleet has been dispersed across the ASHTEAD TECHNOLOGY locations to drive revenues not only in Europe, but in Asia and also The Americas. Cost synergies were also achieved through subletting the facility and changes to the team.

14:42 In higher tech, on a similar basis, we increased revenue by 23% last year. We have also expanded geographic reach of this business and invested in the business through CapEx and building out the team. Both acquisitions are examples of how we fully integrate acquisitions, driving synergies through customers, investment, and geographic reach.

15:10 The m and a strategy, that we are following is the same strategy that we developed in 2026. The plan is to sorry. 2016, I should say. The plan is to do more of the same. We operate in a highly fragmented market. We see an opportunity to build a business of scale within international reach. We plan to become more relevant to our customers through product and solution expansion and expanding further into offshore wind. The m and a criteria is very straightforward to consolidate a highly fragmented market, to expand geographically, to expand to build out our capability across the our existing service lines and to do more to focus in our offshore wind market.

15:54 Critically, the target, criteria that we follow is absolutely key to how we spend our m and a dollars. We're looking at five key attributes, strong cultural alignment, market leading expertise, long term customer relationships, opportunities to grow our service lines, and also to find revenue pull through opportunities.

16:18 We take a disciplined approach to m and a, and we believe that there are further opportunities out there that will, considerably strengthen and expand ASHTEAD's capabilities. We were delighted to acquire ACE Winches in November last year. ACE Winches significantly increases ASHTEAD's capability in mechanical solutions and also increased our addressable market by 30%. The business that we acquired was in great shape. It's got a great well invested fleet and a very strong team who have been very welcoming and are engaged with the integration process. We're focused on sales, commercial, and financial controls and processes to to continue to build out, the sales pipeline, to maximize the opportunity in terms of utilization and pricing and to make sure that the management discipline is within the business.

17:20 To date, trading has been in line with expectation. So in summary, we are well placed to benefit from the long term structural drivers that are at play in the market. Strategy conviction is high. We believe that we're very well placed to benefit from the energy transition, the supply of secure affordable and low carbon energy from offshore energy sources. We are confident in the market, supported by record customer backlogs and increasing multiyear visibility. Turning our attention to 2024. Q1 trading has been strong. Activity levels are high with increasing customer propensity to rent. We remain confident in making further progress during 2024.

18:06 And with all that in mind, the Board is encouraged by the group's performance in Q1 to date, and our full year expectations remain unchanged. So that's the end of the slides. We'll then move on to questions. Alan, Ingrid, if I may just jump back in there. 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 situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

18:57 Perfect. So a couple of questions around debt levels and, interest costs and really kind of how we're gonna manage, this debt position going forward. So I'll I'll pick those up. So, first of all, in terms of finance costs, or or net debt, we're at 28,700,000 in '22. We're at 61,700,000 in December 2023 having funded, the ASHT acquisition fully through RCF. And we have a 100,000,000 facility available to us, plus a 50,000,000 accordion. So there's still available debt to us, We're very conscious that we don't wanna overstretch the leverage. We're currently at 1.3 times as of December 2023. If we look at that on a pro form a basis, it's actually one times. So, you know, relatively low debt. We're very focused on, maintaining debt levels at certainly no more than two times, but in that sort of one to two, range as we continue to invest in m and a. The business is highly cash generative.

19:56 So if we do no more m and a, we actually, can decrease our net debt very, very quickly. Our cost of debt is around about, 22.25% over Sonya. The current facility that we have, was recently extended out to April 2028. And I think the other question was around, the cost of finance cost for next year. Finance cost, so gross finance cost, in 2023 were £4,000,000. Given that step up in net debt, we do expect that to increase by just over 50%, so just to just over £6,000,000 in 2024. But as I said, you know, very conscious of making sure that we manage that levels. And as we look at doing more m and a, we obviously look at the balance of ensuring that we're managing that net debt position as well as looking into the market potentially

20:47 to look at equity raise at some point if it makes sense to do so. There's another question around our current WACC, that's sitting just over eight percent, currently. I think that probably deals with quite a few questions. So a piece around m and a, sort of question, which Alan can maybe pick up on, which is around, obviously, a lot of the growth this year that we're if we look at the if we look at the market forecast and the guidance, we've been guiding to just a low double digit growth on the pro form a numbers. The question was what proportion of will m and a play going forward? We haven't baked any m and a into the numbers that we've obviously forecasted, but, Alan can maybe pick up a bit on on what the plans are from an m and a perspective.

21:35 Yeah. Thank you, Ingrid. The the the plan on m and a is is to continue doing what we've we've done for the last, you know, seven or eight years. We've got a clear m and a strategy. We've got a strong pipeline of opportunity that we continue to build. But the one thing that you can't forecast in m and a is is the timing of it. You know, we've been very fortunate to do the acquisition of Ace Winches last year. That's a super business. And, you know, we did we did two acquisitions in in the prior year. Since 2017, we've now done a total of eight acquisitions, four of which were international. The last three, businesses have all been, local here in Aberdeenshire, but we continue to look at acquisitions on, an international basis, and it remains a key growth driver for us.

22:36 There's still a few questions on here that are really into the debt. If the if the guys that are hosting could maybe delete some or just remove some of those photos, that would be good. There's one question around the current gap between ROIC and WACC and where we see that moving to. So we have achieved ROIC of 28% in the current year. That has been trending up in recent years. When we came to market IPO in November 2021, we set a target of sort of mid to to high teens and possibly hitting sort of 20% ROIC. In '21, we hit 17. 22, we hit 21. Last year, we hit 28. We do expect that ROIC to to to sort of evolve, particularly as we continue to do some m and a, and we're very much to continue to make sure that we can target that sort of high teens, low 20 percents.

23:31 So there's there's a question around, the fleet. What do you consider to be the critical mass for your rental fleet in terms of size and market current coverage? And how do you plan to achieve this to maximize efficiency and profitability? So when we look at the the the the fleet, you know, we have to take that into context of the market. And when we invest in an equipment, we're making investment decisions for for ten or fifteen years plus given the longevity that we get out for equipment. We've been in business for thirty nine years, so we know the business well. We see a great opportunity in today's market to put more CapEx to work. So last year, we had an initial budget of 50,000,000 of CapEx. We increased that to 20,000,000 and ended up spending 19.5 because the other 500,000, that we had approved, the equipment didn't turn up in time to to get into the books after '23.

24:29 This year, we've increased CapEx further to 30,000,000 and are making good progress in approving that and getting the equipment into the fleet. But when we look at the market opportunity in front of us, we're looking at, you know, a number of things. Not only are we looking at the fleet, we're also looking at the utilization or the shape of the fleet. We're looking at the utilization that we get from, you know, certain items, and we're also looking at pricing. Because the way to drive a return on investment in this business is to win business, have the right fleet, get the right utilization, and maximize pricing. The business that we've got has got a huge amount of data in it. We are data led, and we believe that by focusing on the key KPIs, we will get the the mix right.

25:20 There's a question around, trade receivables given that there's obviously a noticeable increase in both trade receivables and the proportion of those past due. I think one thing that's maybe a little bit misleading in the accounts because of the timing of the acquisition of ACE is that we've obviously got all of ACE's full debtor book and balance sheet in the in the numbers, but they're only the only one month of the revenue. So when you actually look at the proportion and the debtor's days, it's it's not quite as bad as it as it may look from that. You will see in note 24 that we do have a sizable proportion in this sort of past year, zero to ninety days. Just to give you some comfort on that, you know, unfortunately, our industry is not one that is known for paying particularly quickly. We we do chase down our debts pretty hard. We've got the benefit that because we do a lot of churn with our com customers, you know, we are not scared to put our biggest customers on stock if they're not paying us on time.

26:15 We do have a a centralized credit control function, and we and we actually, continue to invest in that during the course of last year. But to give you a better comfort, the expected credit loss rate that's calculated obviously in terms of your previous history of credit losses for the for the sort of ninety days, up to ninety days past due is less than 1%. So we've got a strong track record of recoverability. There are some of the older debts. You'll see that on the on the far end of that trade receivables in in the more than three hundred sixty five days. Those of you that have listened to the call previously will know that we had, one debtor out in Asia, which is currently in a scheme of arrangement. That scheme of arrangement keeps getting extended, and that's, and that's what causes that large number of, yeah, that's fully provided for.

27:04 So there's a there's a question about where does the revenues come from. What proportion of your overall revenue is outside The UK? The way that we present the revenue is, the location where the revenue, or the the equipment was mobilized from or the facility it was mobilized from rather than where it actually come where the revenue comes from. So Europe is our biggest, operation. It accounts for 60 our our European operations account for 65% of our revenues. But from Europe, we are supporting not only the North Sea, the Mediterranean, the Caspian, but also supporting West Africa and and Brazil. If we take Ace Witches as as a great example, Ace Witches is is based in The UK, but at point of acquisition, 79% of Ace Witches revenue came from out with The UK.

28:00 We are a very international business. We operate across 12 locations. We're focused on a global market, and we will move our equipment and resources to wherever our customers require those equipment and resources to be. There's a there's a question around competitors. Who do you consider to be your main competitors? And following on, what are your concerns about the business in terms of weaknesses? So in terms of competitors, we've got a wide range of competitors. On surfing robotics, we've got three main competitors, all private equity backed, all international like ASHTEAD, which are Acteon and Group, which includes, Sutronics. We've got unique maritime, which is based in The Middle East, and we've got subsea technology and rentals. And then there's various other, mom and pops in in in various locations.

28:51 So concentrated market, four main players of which ASHTEAD TECHNOLOGY is the largest leading player. When it comes to mechanical solutions, the market is highly fragmented. So we've got competitors across almost everything that we do from winches to dredges to cutting equipment to ROV tooling. But that has created an opportunity for us through m and a to consolidate a fragmented market, and there is no one out there, today with the range of skills and capabilities across three service lines that ASHTEAD TECHNOLOGY, has. And by continuing to build out that three service lines, we believe that we're, increasing not only the, the moat around the business, but fundamentally positioning the business to add more value to our customers, which is the center of our strategy.

29:43 In terms of weakness, in the business, I wouldn't say it's a weakness, but and I think the biggest challenge facing our industry is is, the the skill shortage, the lack of people. And the way that we've addressed that is that we continue to add to our team. We increased our team by 25% organically last year, and we're spending, you know, significant amounts of effort time and money in learning and development. We added an HR director to our team last year who comes from a learning and development background that was not by accident. You know, we we selected Christine specifically for her skills and capability so that we could, put more effort into growing our own talent.

30:32 We have recruited we we we recruited a recruiter, if that makes sense, to to be in the front foot to continue to to add to the business. But, you know, whilst that is a challenge for us and a challenge for the rest of the industry, it also provides an opportunity for increased propensity to rent because our biggest competitor is actually our customers, and the skill shortage that are in the market is affects them as far as much as it affects us. And by us investing in our team, growing our team, growing our capability, we're seeing a higher propensity to rent as a consequence. There's a question around, on what basis do we depreciate our fleet. Our survey in robotics equipment is mostly depreciated over seven years.

31:19 Our mechanical equipment is a bit of a mix. There's a a pretty high proportion. That's seven and eight years. With Summit ten, and then the recent acquisition of Ace, the winches that we bought there are actually depreciated over fifteen years. They've got a a much longer life. And obviously, we looked at that as part of our acquisition accounting, and and and we're very comfortable with those depreciation rates. The other part of that question was have you had to do any large unexpected write downs? No. We haven't. So there's a question around, project delays. You mentioned there were some project delays and cancellations during 2023. Can you talk about the reasons behind this? What is the current state of play? In the offshore environment, project delays is just one of these things that happen.

32:09 You know, projects continue, you know, to slip back to the right. But given the volume of, activity in the market, given that our customers' backlogs are at at all time high, that is not a concern, to us. I think the question may have been in the context of a comment I made in offshore wind where, you know, there was some negative, press, around that market last year, the challenges around, increasing, supply chain costs, increasing finance costs, having an impact on the results of licensing grants and and the like. You know? Companies like who live a a number of projects on the East Coast Of The US, but we don't see that having any impact in in our in our in our business, whatsoever. You know, the market outlook is is very, very strong.

33:04 There's there's a question around slowdown in The UK offshore given increasing numbers of projects being unfunded and underinvested by all oil majors given the tax implications. You know, I think when we look at the The UK sector of the North Sea, whilst Rosebank was sanctioned last year, the North Sea is a mature basin, and, you know, we shouldn't expect to see major projects being sanctioned in in that basin. We have focused our business on inspection, maintenance, repair, and decommissioning, specifically to around oil and gas. We believe that we are very well placed to to benefit from the activity in the North Sea. But if we look at the Norwegian continental shelf, which is obviously still the North Sea, there is a significant amount of activity, not only in terms of inspection maintenance repair, but also greenfield development in that market.

34:04 But as I said before, you know, we're we're an international business supporting a global market. Our equipment is is highly movable, and we will move our equipment wherever the activity needs to be. So, you know, at the moment, you know, we see great opportunities across all markets, and we, you know, we see pockets of of high activity in the likes of Norway and and Brazil, which we're we're very much focused on. There's a question around have any of your acquisitions underperformed post acquisition compared to their prior years. The the great answer to that is no.

34:50 You know, we've we've done done done eight acquisitions. You know, they've all performed well. And in many ways, you know, the results of those acquisitions have been far better than their acquisition cases. We we bought a decommissioning business in the form of underwater cutting solutions, to focus on decommissioning in oil and gas. We're now using that skills and capability to install, offshore, wind farms and and for monopilot work. You know, we never saw that at at the point of of acquisition. I think the thing that we do is we spend a lot of time, with the the owners and management teams of the business. We diligence them very, very, very hard, and we make sure that we're buying these businesses for the right reasons.

35:40 And then once we buy them, we fully integrate them to get, the the synergies, both, revenue cost and the added value that comes from from increasing the mix. So, you know, a big part of our focus is around remaining, you know, very selective and disciplined on our active on our m and a to ensure that our 100% hit rate continues. There's a question around, are you considering a move to the main market, FTSE two fifty in the short to medium terms? If not, why on why not? Obviously, as a business, we're watching all the changes that are happening to the, to the regulations around around the London markets. And what we're aiming to do is build a business that is is big enough that we have optionality.

36:27 We've made no decisions on any of that. We're very conscious of the shareholder register we've we've got, and it's something that we, you know, we just wanna make sure that at some point, we have the optionality and but no decisions made. So there there's a question around comments on skills and whether, you know, competition or so given your comments on skills and competition, do you see, therefore, more opportunity in services revenue? Yes. We do is the is the easy answer to that. In in terms of services, you know, this is a rental business because we rentalize everything, but, you know, we provide services across the the three service lines that that we've got.

37:13 In terms of serving robotics, that's electronic equipment rental. Most of that equipment goes into the field without people because, our customers are well versed in the operation of that. In mechanical solutions, you know, significant proportion of equipment goes into the field with our own operators. And on asset integrity, all of our equipment goes goes into the field with their own people. So as part of building the the business, people are at the core of of what we do. That's the reason why, we are investing in the team through recruitment and skills development. And by doing that, we believe that we will drive services revenue. There's there's a comment around the the drop in ASHTEAD TECHNOLOGY's, share value in, Tuesday last week.

38:09 I think the the answer to that is that the market is a fickle place. We can control, what we are doing as a business. You know, we cannot control, what the market does. The the stock market on Tuesday was was was a difficult place with with a lot of concern around instability in The Middle East and other places. You know, we did see a significant reduction in share price initially, but it has rebounded, you know, well. And if you look at the context of how the share price has performed since we came to market in 2021, know, we came to market with a share price of 1.62.

38:57 You know, it's now at £7 plus. We believe that, you know, we've we've delivered on our promises. We've got a business today that is stronger than it was when we came to market, and we've got a market outlook that is stronger. And our focus as a management team is to continue to do what we've been doing to add value to to our investors. There's a question around what the risks that we face mobilizing and transporting equipment internationally, particularly on shipping rates and geopolitical risks. Yeah. So I think that that that that's a good question. I think the the easy answer to that is that we can still move equipment with relative ease given the size of it.

39:53 Most you know, all of our surfing robotics equipment can be air freighted. Some of our mechanical equipment can be air freighted. Our bigger equipment on the mechanical solutions side can be air freighted, but, you know, is generally shipped. I think the the key difference between now and and pre COVID is it takes slightly longer to move the equipment than it did in the past, and, you know, it may cost a bit more. So, you know, we we plan on where the fleet should be based on what we see, you know, through through the budget process, through the forecast process that we do three times a year, and through ongoing customer relationships to make sure we've got the right fleet in the right place at the right time.

40:44 And but I think one of the great strengths of this business is the fact that we are not locked into any one geography, and we've got that flexibility to move the equipment, across the world depending on where the activity is. And, you know, sometimes that is done on on our account if we if we decide to move it proactively. Quite often, the customers will actually pay for the transit equipment into other markets or other geographies if if the equipment is is is elsewhere in in the world. Then there's a there's a question around, do we intend to work in offshore carbon capture and hydrogen sectors? How would this be different for the company compared with oil and gas?

41:31 Again, a great, thing about our business is that we are focused, on oil and gas and offshore wind at two different end markets but requiring the same skills, capabilities, and equipment because our our domain is is subsea. And if you want to do things subsea, they have to be done from a vessel, and they will generally require divers or remote operated vehicles and the equipment and skills and capabilities that we've built. You know, carbon capture is not a new thing for us. We worked on the Northern Lights project for Equinor back in 2018, 2019. Yeah. We don't see carbon capture as being a a massive opportunity for us anytime soon, but, you know, we are very well placed to to pick up projects in that space if or when we can.

42:34 I think that's all the questions, Lily. So, if you're okay, we'll hand back to you. Alan, Ingrid, thank you for answering all those questions that you can from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to yourselves and the company, Alan, could I please just ask you for a few closing comments? Great. Thank you, Lily. Well, thanks, everyone, for your interest in ASHTEAD TECHNOLOGY. Thank you for your attendance on the call this morning. We believe that the business is ideally placed to benefit from the market conditions that are in front of us. We came to market in November 2021 with four growth drivers.

43:19 We saw an opportunity in oil and gas. We saw an opportunity to grow our business on the back of our high growth offshore renewables market. We saw an opportunity around increasing propensity to rent, and we also saw an opportunity to build and grow our business through M and A. And I'm delighted to see that those four growth drivers remain very much in place. The market outlook is stronger today than it was when we IPO ed, and the focus of the team is to continue to execute the strategy that's in front of us. So thank you very much, and we look forward to seeing you on the next call. Alan, Ingrid, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations?

44:07 This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of ASHTEAD TECHNOLOGY HOLDINGS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.