Billington Holdings (LSE:BILN) — Interim Results

0:00 Good afternoon, and welcome to the BILLINGTON HOLDINGS PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via 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 remove 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 Mark Smith, CEO. Good afternoon,

0:30 sir. Good afternoon. Good afternoon. I'm Mark Smith, chief executive officer officer at BILLINGTON HOLDINGS PLC, and my colleague, Trevor Taylor, chief financial officer, are pleased to present to you our 2024 interim results. Next slide.

0:52 Next slide. Our executive summary provides some of the highlights of 2024 to date. Following an exceptional group performance in 2023, we're pleased to present our 2024 interim results, which report the BILLINGTON Group's achieving a turnover of 57,900,000, PBT of 4,600,000, and a margin of 7.3%. 2023 was an exceptional year, and we are proud to reward our loyal shareholders with a very competitive ordinary dividend of 20 p per share and a further exceptional dividend of 13 p in June. Despite subdued trading conditions, the group operating in all construction sectors has achieved a strong order book we spanned into 2025 with the thread of work into 2026.

1:43 We've continued the implementation of strategic investment program with the purchase of a new high-tech laser fittings machine, and a coke drill line is expected to be installed in the next few weeks at. At Easy Edge, we have implemented a newly designed safety edge barrier, which is lighter, and we've been rolled out to replace our older stock over the next eighteen months. Next slide.

2:11 We're pleased to announce the expansion of our Toucan brand with the acquihire of skilled staff from the specialist bridge and complex structures company SH. We will enhance our group offering, and we have already secured bridge structures contracts for delivery in 2025. Our new welding and training academy, Betterwell, continues to be successful in providing skilled local local labor force, both Balsley and Yate, and, you know, assisting in securing skilled labor for the business whilst improving local employment opportunities. In 1982, AMCO acquired BILLINGTON's to help with the rapidly growing need for structures to work in the local coal mines advance. The company became a UK listed company in September 1989 before changing its name to BILLINGTON HOLDINGS PLC in 2008.

3:03 To improve the trading liquidity, Gatenga has released shares over a number of years, the major investors being close brothers, Otis Capital, Ruffa and GPIM. Recently, Gatenga has divested further shares, and we are very pleased to welcome the Charles Stanley Group to the shareholder register as a major investor. Many other new investors. Next slide. The divisional breakdown particularly shows the continued success of HOLDINGS and its associated branding division branded over the past eighteen months, combined with and the successful integration and progression of the specialist protective coatings entity.

3:48 We look forward to the expansion of TUCON as we start to deliver infrastructure projects. The most significant group company has been into structures. Third biggest UK steelwork contractor trading for three sites, two in Barnsley, one near Bristol. The company manufactures and erects the largest steel frame structures in The UK. We'll provide further details later in this presentation. Next slide. This slide depicts a number of our current and recently completed projects. Amazon fulfillment center in HOLD, the long data centers in Slough, Smart Park, a high-tech food process manufacturing development, and energy from waste development in Ribbonhall, and Westfield, a further energy from waste facility.

4:37 Circle Square commercial office Manchester and a very large, the second largest in the world, energy from waste development at North London heating power project for as well as a defense project for project Conan in Sheffield. Move through the company's divisional highlights, which identifies this these prestige projects that have been successfully delivered and the geographical market spread. Next slide. Shaft and Steel Services continue to service the most demanding steel process projects for its wide ranging customer base. The division services all sectors of engineering and infrastructure markets as well as providing specialist services to build infrastructures.

5:26 Further investment in capacity and machineries plan and the Shafton facility in 2024 and 2025, and we'll provide some further details later in the presentation. Next slide. Peter Marshall's have continued to be extremely busy in 2024. They boast a positive order book and with some very large prospects close to being secured. As in previous years, it can be noted here the wide range of clients as well as ingroup trading with billing structures. Next slide. SPC, this specialist facility supports the group's wider requirements for the application of high-tech treatments and fire resistive coatings. The group is yielding the benefit from significant investment in automated equipment and the modernization program during 2023.

6:18 SBC, as well as providing in group services, has maintained relationships from the previous company's external clients in the oil, gas, and pipeline sectors. The capabilities of the facility at Sheffield set it aside from other painting contractors operating in the market. Next slide. EZEDGE. An increased focus was put on the operations at EasyEdge during h one, and pleasingly, the utilization of its products has noted significant improvement over the period with the results anticipated to further improve in h two and into 2025. The company is the market leader in edge protection systems in The UK and seeks to continually improve the design of its systems and provide a premium product to its clients.

7:07 The design of the system was improved in the period, and it is intended the barrier fleet will be replaced during 2025 with the first orders anticipated to be delivered in December 2024. Next slide. HOLDINGS has continually expanded since it commenced trading in 2010 with the company now being the second largest in terms of revenue within the group. Company is projected to see this positive growth and progression continued in 2024, and with the product being selected as the system of choice for many of the main contractors and residential developers in The UK. Next slide. Sister company branded a division of HOLDINGS provides graphic solutions for the HOLDINGS product as well as third party systems.

7:55 Branded is now recognized again as a premium branding and marketing company and is contributing well to the overall results of HOLDINGS. Next slide. Okay. Some of the financial highlights. I'm delighted to say that 2024 has seen the positive momentum expansion noted in 2023 continue. Group results in H1 have been delivered in a period of macroeconomic uncertainty, suppressed demand in the construction sector. Following the election and in light of a long awaited downward trajectory in the interest rates, the market is forecast to return to regular growth in 2025, providing increased confidence that output in our sector will support our strategic plan of managed growth and expansion.

8:46 We paid a record dividend of 33p in July. This has been split into an ordinary dividend of 20p per share, and an exceptional element related to the steel windfall gains noted in 2023 of 13p per share. Operating profit margins have remained materially consistent with that of 2023 despite a subdued trading environment. This is as a result of the progression of the group's process improvement projects and further delivery of the capital expenditure program to improve capacity and efficiencies. BILLINGTON Structures and Peter Marshall's as of June 2024 post record order books that span a number of market sectors, including energy from waste, retail distribution, leisure, and defense.

9:36 Cash has remained at consistent levels noted in December 23 with a balance of 21,900,000 at June 2024. The group has historically had an overdraft in place of 4,000,000. To provide confidence to investigate and progress acquisition opportunities as they arise, the group has now implemented a £6,000,000 RCF facility with the group's primary bankers, HSBC, in March 2024. Historically, the group's freehold properties have been held in the accounts for their historical cost value. Following their revaluation as part of the RCF implementation, these have been revalued in the accounts, noting a gain on revaluation, 5,900,000.

10:23 2024 remained challenging for the construction industry with a number of main contractors and specialist subcontractors ceasing to trade in the period. The group's policy is to credit insure its projects and clients where commercially available insurance can be obtained. Credit insurance limits have seen reductions across the board in the year as a result of some high profile company failures. The group remains debt free, providing flexibility to continue its capital investment program and to capitalize on suitable acquisition opportunities as they are identified. Next slide. This slide provides some of the highlights of the 2024 trading period.

11:09 Revenue of $57,900,000 materially consistent with that of 2023. With the timing of some of the significant contracts, revenue is anticipated to be weighted towards H2. Operating profit margin, 7.3%, remains consistent with that of 2023. Significant increase in the net asset value of the balance sheet of the group, standing now at a record £51,800,000. The dividend paid in July in respect of 23%, reflective of the exceptional performance last year. The continued and consistent strong cash balance of nearly 22,000,000 provides the flexibility to ensure the group can further progress strategic objectives.

11:58 Next slide. This slide is the income statement for the group for the first half. On top of the strong trading performance, you will note the positive interest generation as a result of the surplus cash balances being placed on deposit. Following the upgrade today of the market forecast, the anticipated profit before tax has been increased to a projected GBP 9,250,000 for the full year. Trading in the second half is projected to be at similar levels to that out earned in H1. Next slide. The balance sheet, as you'll note, net asset value now stands at just short of $52,000,000 and is at the highest level since the formation of the BILLINGTON group in 2008.

12:48 The final salary pension scheme remains a significant surplus. There are no intangible assets or debt on the balance sheet. This, combined with a strong cash balance, strong trading momentum, and record order books at June this year, allows the group to look forward with optimism and with the resources to continue its expansion and diversification objectives. Next slide. This slide provides an overview of the current capital investment program. This is a five year program with one point five years remaining. The capital expenditure for 2024 is expected to be 3.5 to 4,000,000 with similar levels for 2025.

13:37 Page one noted the installation of a new laser fittings machine in the facility in one well. This technology is recent into our industry. BILLINGTON is at the forefront of its utilization. Page two will note the delivery of a cope drill machine to our Shafton facility, further increasing the capabilities and capacity of the business. This machine is anticipated to be installed and commissioned by the end of the year. It is intended that an extension to a building in our Shefton facility will be progressed in 2025 to provide additional capacity and capability to efficiently deliver bridge work projects secured by the Tubegram division. Next slide, please.

14:25 This shows the cash bridge from the year end to June 30. It's a measure of the strong, stable cash balance being managed since December 2023. Next slide. The steel manufacturing industry has received more pressively than ever before with the request from Tata and British Steel for government support to construct electric arc furnaces to replace the existing blast furnace. This will assist The UK in achieving carbon emission reduction targets and maintain the steelmaking industry in The UK. Despite a mature supply of steel material from Europe and other world countries, retaining a steel manufacturing in the industry in The UK will secure home supply and ensure a competitive steel supply.

15:14 The company has very mature supply relationships and is able to secure fixed prices to ensure that we are not exposed to potential rises from any contract. The British Construction and Steelwork Association is predicting demand to contract by 4.9% during 2024. The group achieved a record order book for June 2024 that should insulate against what is still a very competitive market. Predictions are that regular growth should return in 2025. We have an unprecedented volume of work to give for 2025 on our intent on further building on this strong position. Next slide. This slide presents the historical order book level on a relative basis.

16:00 The order book at June 2024 represents a new record for the group. A good proportion of the secured order book is scheduled for delivery in 2025, underpinning the 2025 anticipated performance. We have a good number of opportunities that are in negotiation that provide further confidence of that level of work secured work can be further enhanced. The specialty sectors in the industry that we are well known to have successfully delivered over the past three years are still buoyant with potential for 2025 and beyond. We're very hopeful of securing a good volume of this work with other opportunities in the large industrial, high-tech manufacturing, and film industries.

16:44 Current workload and opportunities, this provides us with the confidence for 2024 and forwards into 2020. Breakdown of the steel steelwork strategies is contained in the appendix for your information. Next slide. The group considers its environmental impact and records, monitors, strives for continual improvement. The group, through its charity foundation set up in 2016, supported many local and national charities through fundraising and sponsorship activities. We encourage our loyal staff to join with us in this endeavor to improve the local communities in which we operate. The group follows the QCA code and strives to implement responsible change ahead of market op obligations to ensure our governance is work.

17:35 Next slide. H one notes the certification of all companies within the BILLINGTON HOLDINGS group as carbon neutral, a significant milestone in achieving the group's ESG objectives. We continue to investigate and implement further carbon reduction measures to support our commitment to achieving net zero. The company's ESG focus group has flourished during 2024 and realized the ambition set by the board in delivering carbon neutral status. Next slide. Okay. We launched our five p strategy initiative in 2023 and commit to continue to deliver this in '24 and '25. We are to focus on people developing, promoting, rewarding, and primarily keeping all our staff safe.

18:27 Properties, we look to update, modernize, expand, or maximize our facilities to ensure production is safe, efficient, fit for purpose.

18:39 Product, focusing on quality right first time, providing exceptional service to guarantee repeat business that protects our company and clients. Position. We believe we are the best in the business and aim to maintain that status for our cherished clients, expanding our offering into new markets. Planet. We are committed to ensure that our green initiatives deliver on our commitments, and we, as a group, play our part in our role to calving zero. Next slide. The group has defined strategy to drive long term growth focused on both organic and inorganic development. We continue to focus on margin improvement and driving efficiencies with our targeted capital expenditure program and other margin improvement projects, together with increasing direct labor recruited from both The UK and overseas.

19:35 We continue to focus on training and developing skilled labor locally, working in partnership with a number of education providers.

19:44 Having had a long standing successful history of delivering in Europe, we have, during the period, completed a significant contract in The Netherlands, and further opportunities are currently being reviewed to complement its UK offering. The TubeCon acquihire completed in 2024 has demonstrated the benefits of the group from acquiring complementary businesses that can diversify and increase our offering to our customers. We continue to look at further acquisitions and will undertake these where appropriate. Next slide, please. The group is in very good position with a record order book as at third of June twenty twenty four. Furthermore, there remains a number of significant high profile projects that are currently under negotiation that seek to further enhance the level of secured work for delivering 2025 and 2026.

20:40 We're very well positioned as a successful and recognized supplier to the sectors we that we remain robust in a challenging market. We remain committed to further modernize and enhance our facilities, which will ensure that BILLINGTON continues at the forefront of the industry. Following a period of turbulence in the supply of steel materials, it's pleasing to see that twenty twenty four notes have returned to more normal, stable environment. Working together with our close supply partners, we are able to ensure that the needs of our clients and businesses are omnipresent. We believe in investing in our people and are committed to train, promote, and provide opportunities for employees within the company to prosper now and in the future. The company has a robust balance sheet underpinned by strong cash position and property assets.

21:31 We will continue to protect our cash position investing wisely with an aim to continue to reward our loyal investors with growth and competitive.

21:41 I'd like to thank you for the time you've taken to listen to us today. The appendix in this presentation provides information for your perusal. And as ever, we are willing to receive your questions either directly or through our representatives. We can now hand back over and and possibly address a few of the questions raised during this presentation. Mark, Trevor, thank you very much for your presentation this afternoon. 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 received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so on a pickup from you at the end?

22:33 Thank you. Question one. What do you see as the sectors that provide the best opportunities for growth and expansion moving forward? I'm going to say the sectors that we're in. The government has a long term aim to be a net exporter of energy, so we see the energy sector as a strong market. We have carved out a good reputation for solid delivery in this sector over the last few years, and we currently have on our order book two of the largest, and we're currently tendering a good and are have knowledge of a good four to five of these in the pipeline that we're looking forward to seeing over the next two to three years. That's strong. High-tech manufacturing, again, working with partner contractors.

23:22 We've delivered large food manufacturing and processing developments over the last two to three years and are currently looking at that sector eagerly as well. Defense, our order book boasts some very large and complex defense projects that we're we're pleased to be delivering. We're seeing on the larger scale a return of Amazon. And looking at it, I think one of those next questions mentions this, so I'll probably pick that up in the as we come further forward. One sector that we've been very strong in as well has been what we're calling leisure. And when I say about that, I really mean the film industry. During the last government, they saw an increase

24:06 of the rateable value of film studios. That's been unwound, and so it's ignited the return to market of some considerable developments, no more so the more we're involved with with Warner Brothers with, again, a partner contractor, Bowen and Kirkland. So those are the sectors we see strong. That's what we're backing. It looks as though it's got a a good pipeline going forward. That together with our breaking into the bridge market with TubeCon, which we probably won't see the benefits overly in terms of revenue and profits in '25, but we certainly will in '26 as we bring online the further capital investment that we're looking at at making at Shafton in a specific workshop to service their activities.

24:54 Question two. What gives you confidence that you're able to achieve your strong forecast in what you've already mentioned is a contracting market?

25:01 Well, we're saying it's a contracting market in 2024. It was predicted at that point, and we went out and reviewed the market and competitively secured work to secure the the company's future during that period, not only for BILLINGTON structures, but for the other group companies. A lot of them are servicing in group BILLINGTON structures, but also the largest of our competitors as well, which we're very pleased to be doing. Our group companies are the best in the business, and so it makes sense that both ourselves internally and our competitors externally utilize those facilities, and we're very pleased to do so. I have been a long term investor and supporter of the management team.

25:51 Thank you very much.

25:53 I view BILLINGTON as a company that has delivered regular stable and measurement growth for many years whilst paying a competitive dividend. Do you feel that you're able to continue this trend? Yes. We we would say that, but we truly believe it. What we've got at the moment is the strongest order book coming forward that we've ever had In the sectors that we're specialists in and working closely with our partner companies, we can deliver and will deliver. But we're very grateful that our clients are staying loyal. Our investors are staying loyal and supporting us. We we spend our cash wisely. We reinvest into the company in terms of of machinery, our properties, and our staff, and we're we're hoping that return investment is seeing increasing efficiencies, effectiveness, increasing quality that will ultimately result in better margins.

26:54 Here we go. In light of the recent development from Amazon about further investments in The UK, has BILLINGTON worked with Amazon in the past? And is it likely you will be pitching for this business? I don't know if you were looking at that that presentation, but one of those developments was an Amazon development we're currently delivering in HOLD. Amazon has been a great client over the last year and only exited the market really as build costs proved to be exceptional, not more so as we were suffering, unfortunately, the the Russia Ukraine conflict and and COVID applications. We found that Amazon are returning. We're very pleased to be included in their supply chain along again with our partner and clients, contractors.

27:41 And so, yes, we want to be front and center of that business both in car parks, in their distribution warehouses, as well as their data center ambitions.

27:55 How is the integration of SH structures progressing, and what sort of pipeline, if any, was inherited at the acquisition point? When, our colleagues, now colleagues from SH structures joined us, they brought with them a lot of opportunity. What we found with SH, unfortunately, was as the change of government was afoot, a lot of their projects involved companies going really public spend and that had been put on ice or stagnated. And so that that suffered SA structure structures as a business. And so with our support, our service offering through Shaft and Steel Services, our steel processing, we've been able to lower their price point, and the efficiencies we're able to bring into them is beneficial.

28:47 So we're hoping that we've been able to protect their business, and now we're seeing in in light of a two or two, three recent contract wins as well as an awful lot more opportunity, we're seeing some of those project return of which then we can be competitive as our new brand TubeCom, which is recognized in the industry for delivering architectural projects. But as I say, without our new resource and staff from SA structures, that that expertise is is in place. We just need to now want the confidence

29:24 that this business has has legs as we know it has. We're going to invest further and give it a bespoke facility to make delivery of the largest of bridge projects. Number six, this isn't me at the moment. While still early, could you please comment on how you see the labor government initiatives affecting BILLINGTON in the medium term? I'm hoping they support business businesses. I'm sure they will. No more so. We're in a very strong labor area, and we'd like to see support of of of our business particularly going forward. And we'd also like to see, as we've said before, labor supporting the industry, backing the steel manufacturing businesses with their support and and initiatives to put in electric arc furnaces.

30:16 That secures the steel manufacturing in the industry.

30:21 We'd also like to see, support of IHT being an aim listed company. We know that we are attractive to certain types of investment and funds, so we'd like to see that continue. Okay. That's the pre submitted questions. You might have to forgive us. We've got a long list here today, the longest list I've ever seen. But we'll we'll whisk through a few of these, so forgive me if we don't answer all of these today. If we don't, we will put some answers on the platform for you to, revert back to. Okay. How much of the next twelve months sales is covered by the current order book?

31:02 That probably starts between 6070%, subject to no contract slippage. We don't like to fill the whole order book. We need to service the needs for short term contracts with cherished clients as well as being able to take advantage of margin enhancing opportunities moving forward. That said, to see an order book for a year in front at this point of 60 to 70% is unprecedented for the business. It's a great position to be in. I invested in Billington after meeting management at Mello event. Good. Thank you. Will the company be attending at the Mello event in Derby? Well, funnily enough, we were asked this question only this morning.

31:48 We do have the details, and we are looking if we are able to attend at that time. So you might well see us there. Given the market doesn't seem to have reflected the recent strong performance in its share price, would it not be a great time to buy back the shares and accelerate the EPS growth?

32:12 Something we have discussed. We do have, as we've spoken about, surplus cash. That said, rather than buying back shares, we would like to put that cash to better use us to further progress the business, to further diversify the business, grow it for the future as opposed to just buying back shares. If we're not able to achieve our objectives, that will be considered. Given the facility at Yates in Bristol and the development of the new proposed battery factory at Bridgewater in Somerset, known as the AgriTAS facility, will Billingsons be involved? We do know, of course, of the project. At this stage, it is unlikely BILLINGTON's will be directly involved in the main structural steelwork.

33:01 That said, it does provide opportunities for the companies as the ancillary benefit of taking out and absorbing quite a bit of The UK structural steelwork capacity. So in theory, at least, the market becomes less competitive because that will absorb a lot of The UK's capacity. It's a it's a very, very large scheme, and it's going to make one single contractor very, very busy to deliver that scheme. It it could well be that that sees the start of maybe a combined contract that that jointly several companies can deliver because they're going to be looking to try and put that development up as quickly as they possibly can. That does possibly sound attractive to us, but we'll we'll review the opportunity as it comes. That development is still in its its early stages as we know it.

33:57 Okay. There's two questions here regarding acquisitions, one related to that in Europe and one related to domestic UK acquisitions. I think we spoke about before, we currently would not seek to progress an acquisition of a steelwork fabricator in Europe at this time. We're able to satisfy any European demand for our facilities in The UK. We've proved we can do that competitively. If demand in the EU reaches a level where an acquisition would prove appropriate, we might consider that moving forward or not at this time. In The UK, at least, we always have an eye of what an acquisition should do. We want it to be margin enhancing, diversify the operations, reduce the risk ultimately, and provide collective benefit.

34:51 So you have to ask what are we not in that we would like to expand our offering into. The the two obvious candidates, defense, ring fenced government expenditure, a want and a wish to maintain and increase the level of GDP expenditure on defense areas. That is something that we are keen to look at and progress. We've got a good history of delivering in that sector as well. Yeah. We do have experience in the defense sector, looking at all the specialist products and services we can deliver. The other one being nuclear, the government and increasingly a labor government appears to want to increase the level of energy generation through nuclear projects.

35:37 So we're seeking areas to which we might be able to expand into in those markets. It's wrong there about blast furnace, isn't it? Are you concerned about the time of difference between the closure of Port Talbot blast furnace and the eventual opening of the new electro arc furnace? We don't buy a lot of steel work from Port Talbot. Port Talbot is servicing other industry. We we see they manufacture tube and some coil and plate. Not a huge amount of that material is purchased directly from Tata. So, yes, we are keen to see it still delivered and that production maintained. It doesn't have a huge effect on the business.

36:23 K. If the order book is at record highs and the market is expected to grow in 2025, why has the company guided Cavendish towards slightly lower EPS forecast for '25? As we've mentioned, 70% of an order book secured. For those that know the business, we like to have sight of the projects, the margin opportunities, the ability to generate an engineer margin into the projects and have sight of a result that we can confidently deliver. We have those projects in place. Once we remain fill the remaining order book, and at the appropriate point, we will seek to upgrade if appropriate that guidance will be formed.

37:10 What is the level of credit insurance available to you? I'll let you We spoke about credit insurance increasingly over the last eighteen, twenty four months. In uncertain markets, it's always an insurance natural reaction to reduce the level of exposure either in certain sectors, industries, or specific clients. There's been no different. We've seen a number of insolvencies, high profile insolvencies over the last twelve, eighteen months. So that the level of insurance has been reduced. If you'd have asked me twelve, eighteen months ago, I'd have said 80 to 90% of our work in progress and debt to book was insured.

37:55 Today, it probably sits more 70%. We wouldn't take a project with no element of credit insurance. However, with our robust financial procedures, we will seek to accept a moderate level of uninsured risk on certain clients if we are confident after our investigations. The good news is looking at forward order book. Majority of the larger projects going forward are insured or are payment guaranteed with good attractive terms that are probably enhanced on on what we would normally see in the industry. And so we're in a better position than we have been for a number of years, and and as the credit assurance has been clawed back, our order book and we seek to improve that position with more financially by robust clients.

38:53 A lot of that I'd rather lock the judgment, but it's it's worked that way. Question. Do you look at introducing robotics and automation into our production procedures? Well, the short answer is yes. Our first robot, what's called a coke drill line, arrived last Friday. That's I referred to that in the presentation. It hadn't been delivered when I wrote that. That's currently getting installed via two month installation period and commissioning period, and that seeks to automate some of the processes and procedures that have been done by the fabricators on the shop floor. So not only improves the efficiency, speed that we produce the steelwork, but also the quality, the accuracy, and the reduction of errors of the work we complete. So it reduces what we call the NCR nonconformance costs when steel is delivered to site.

39:50 So, yep, it will increase capacity and hopefully margins as the other machines that we put in. I mean, these machines, as soon as you implement them, they bring in processes that were traditionally manual. And so they also you're able to turn on aids that are marking the steelwork that's already preloaded on the CNC so the steelwork will come through the machine. And then if the fittings have got to be attached to it, there is a visual aid that's marked on the steel to indicate where that's to be welded to. So you can imagine that that would speed up the process and cut down on any inaccuracies. Final bit on robotics and automation. We're not producing widgets. Robotic you know, robotics that you'd see in the car industry, for example, aren't as progressed in our industry because every structure, every piece of steel, every weld is bespoke, individually designed.

40:47 It's particularly difficult to design and implement robotics that can accommodate all levels of the steel that we produce. So we're a few years, a good few years from pure automation, but we are investing where we can see the benefit from it. And the last question, question 21. The company's historical return on capital employed is great, and the current incremental investments delivering at similar levels. Yeah. The return on capital employed, although on the face of it, shows a decline for the first half. I think I put footnote in there. But due to the revaluation of the group's properties, this has the unintended consequence of reducing that return on capital employed number when you look back to the historical periods.

41:39 But to say, is it looking consistent with our current investments? Yes. And we projected so, and we hope to continue to deliver at those levels. Mark, Trevor, thank you for answering those questions 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 the company, Mark, could I please just ask you for a few closing comments? Thanks, guys, for taking the time to sit with us through this presentation. Interest is appreciated. The company is in a great position. And as I say, on the back of 2023 record results, we're bullied by the fact that in a difficult market, we're able to deliver a what we view is a very good cracking set of resilient h Word of the day. Word of the day. H one results.

42:40 The the company has traditionally been h two weighted, and so we're we're hopeful of that continued performance into h two to give a good good result at the end of the year. The most encouraging thing as we sit here today is the fact that we've got the a strong order book going forward. The market is suffering some difficulties. It is still competitive, and we have to be realistic measured over what the future brings, but we are in a very, very good place to be able to deliver with the record order book in '25 work that continues into 2026. Again, thank you very much for your time and for your support. And as I say, if you have any other further questions, then either reach out to through investor me or some of our representatives.

43:27 Thank you very much. Thank you. Mark, Trevor, 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 management team can better understand your views and expectations? 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 BILLINGTON HOLDINGS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.