Concurrent Technologies (LSE:CNC) — Full Year Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the CONCURRENT TECHNOLOGIES PLC Full Year Results 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 just situated on the right hand corner of your screen. Please 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 will review all of the questions submitted today. Published A response is where it is appropriate to do so. These will be available via your investor meet

0:31 company dashboard, and we will notify you by email when these are ready for your review. Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand you over to CEO, Miles Adcock. Good afternoon, sir. Good afternoon, and good afternoon, everybody. Thank you for your time today. If we can go to the next slide, please. So to briefly introduce myself, I've been here at CONCURRENT TECHNOLOGIES since June last year, so almost a year. That follows twenty five years in senior leadership roles in technology based businesses, mostly in defense and aerospace. And I guess the the common theme with any role that I've had is one of transformation. So a lot of experience in transforming operations and businesses to deliver growth. Next slide, please.

1:22 So what do we do here at CONCURRENT TECHNOLOGIES? So thirty five, thirty eight years ago, the company was founded to concurrently launch computer boards at the same time as Intel launched its processors. That's why it's called CONCURRENT TECHNOLOGIES. And since that time, that's what we've done. Single board computers based on Intel processors where our boards are typically used in extremely demanding environments where performance, quality, and robustness is necessary. Since I joined, the company is experiencing quite a lot of positive change. One of those changes is we're widening our portfolio from not just single board computers, which is core to what we do, but also to include other plug in cards.

2:12 So on the left here then, we say that we design and manufacture a range of plug in cards. Earlier this year, we launched something called a position navigation and timing card, so not a single board computer. And that's an example of a new plug in card that delivers a very specific capability to customers and their end users. In the middle of this chart then, we're emphasizing that we also bring value by adding software to our hardware, for example, security software, and you'll see an increased focus on differentiated software as part of our product and service offering going forwards. And on the right hand here, and for the first time ever in the history of this company, we're also positioning ourselves to be a systems integrator.

3:01 So a plug in card goes into a box called a system. Those systems are typically worth 10 times what a single plug in card might be, and that system may contain our cards. It may contain other people's cards. So getting into this systems market, yes, it attracts higher revenues, but it's also architecturally closer to the end user and and suggests a more intimate discussion and relationship with customers as well. Next, please. And so that's a much wider set of products and aspirations than what have been seen before. In terms of segmentation for this business, 40% of our revenue is derived from The United States. So by far the biggest market for us in The US. We currently have a sales and customer support team, and in a moment I'll be telling you about how we also intend to manufacture product in The US so that we can really grow the revenues that we enjoy there.

4:03 The UK, by contrast, is just 5% of our revenue. So that has to represent an opportunity in a post Brexit national, assured supply type environment where we are the only company in this country that does what we do. There has to be opportunity to grow our relationships in The UK and revenue, and that's exactly what we're striving to do. Our second largest region is Malaysia. That's by virtue of one very large customer who's based there for us, and then the rest of the world is a fairly even distribution. Market wise, 70% of what we sell goes into the defense sector. So, clearly, the largest part of our business is for customers in defense, followed by communications where typically our products might be used in five g test equipment or ground stations, and we're seeing that develop quite nicely.

4:59 And then we have smaller business in such areas as medical, scientific, and general industrial. Our customers, we have a small number of what are for us very large customers. Our biggest single customer is about 15 of our current revenues, with top 10 customers being substantially more than half of the business, and then a long tail of 250 other customers as well. Next slide, please. So the markets we are in are enormous. So we are a small player in very, very large markets. The global embedded systems market is hundreds of billions of dollars. And if you pair that down to the defense element of that, it is still a vast market space. So we're about securing more market share from a position of being a relatively small company.

5:53 Next, please. So the investment proposition then for this business is we sell valuable products to very high quality customers. We tend to get designed in. So our our sales cycle is quite long, but then we get designed in, and then we're designed in for the manufacturing lifetime of that customer's product. So if we're designed into, for example, a radar system, then if that radar system is then manufactured for a further ten years, we might enjoy ten years of revenue associated with selling that exact same product back into the customer. Once we're designed in, it is extremely rare for us to become replaced or designed out. We have a very strong team. I'll be talking through later about the focus on talent in the business. We have three new directors on the board. We've got six new leadership team members, all bringing significant experience of leading businesses like this and growth.

6:52 And we have an extremely healthy balance sheet. So we have a lot of cash. That's by virtue of many years of being cash generative and then perhaps a relatively conservative stance about what to do with that cash. We're entering a period now of high ambition, putting the cash to work for growth. Next, please. And again. So last year's results then, a strong year. A strong year. Revenue was slightly down on the prior year, but would have been a lot stronger were it not constrained somewhat by components availability in the second half. Highest ever profit last year, so the most profitable year ever. That is in part because we closed our r and d office in India the year before, and we're in the process of building back up the r and d team in The UK. So there's a cost saving one time there perhaps, but nonetheless very strong year. In previous years, for some time, we've paid a second interim dividend, elected not to do that now and more conventionally pay a final dividend for approval via the annual general meeting, which is scheduled for the June 29 this year.

8:08 Okay. Next slide, please. On the left, we remind ourselves of the last five years of revenue and profit. So you see a business prior to me being part of the team. You see a business that was trending at modest growth, relatively reliable profit. And then on the right, this is a business that has reliably paid a reasonable dividend year on year. Next, please. This is cash. So we have for some years been cash generative, which is really very good. The key message here is twofold. One, great to have strong balance sheet during a period of supply challenge because we can put that cash to work, increasing our equipment to inventory, for example, and we've done quite a lot of that.

9:02 But the real note here is, yeah, a mindset and intent from the board to put this cash to work for material growth, whether that's organic or inorganic, and I'm happy to ask any questions on that at all. So absolute intent to grow the business as as well as we can. Next.

9:28 So this is the last five years of numbers. Now if you had followed this company previously, it would be fair to say that it shared very little in terms of financial performance, I'm taking a very conservative stance. We're seeking to be more transparent here. So for the first time, we're sharing order intake as well as some other metrics. If you look at the top two lines, revenue and order intake, again, it emphasizes that track record of moderate growth before any strategic initiatives that I might be leading. You'll also see a book to bill over that time of about 1.1, which is encouraging. Okay. Next slide. And so, strategic initiatives for growth. The first and most important in my view is a real focus on research and development.

10:22 So this company is called CONCURRENT TECHNOLOGIES because we launch product concurrently with when the market expects it and, in particular, concurrently with when Intel launches its processes. It's just a fact that for some time, actually, we've launched product six, twelve, maybe even sometimes eighteen months later than Intel have, and I am absolutely returning us to being authentically concurrent. So we've had six months now of fairly intense step change improvement in r and d. We had fantastic people already. We've supplement supplemented them with additional talent, introduced new tools for trade, some best in class practices and processes so that we really drive performance and schedule through our R and D activity.

11:11 The result of that being I'm now confident in being quite bullish with the statement, which is we're capable of launching broadly twice as many products in half the development time than we have been in recent years. So that's a real step change improvement in designing and launching to market products, really important. The second area then is systems, and I talked about systems being the things that cards go into. We've made a number of critical hires to begin that business. One of our major competitors, we hired a very senior business development leader from in The US. He will absolutely be growing a systems pipeline for us in that world's largest market. And we've also recruited some fairly high profile technical and general management capability, well experienced in growing systems businesses in exactly

12:03 this domain. So by the end of the year then, I'm confident that we'll be selling systems and growing that line of business. Made in The United States is also very important. So we do well in The US. It's nearly half of our business. We will do even better, I believe, if we also make a product in The United States. The Biden administration has been very open in wanting to increase the amount of US content in federal programs from 50 to 75%. We're now well progressed working with a third party manufacturer in qualifying our designs through their factory such that by the end of this year, I'm confident we will be selling made in America product.

12:51 And in so doing, we'll have opportunity to access many more US programs than we currently enjoy. And then finally, just reinforcing the point on r and d. At a time when a lot of businesses are cutting costs in order to safe to safeguard short term profit, we are absolutely resolute in investing in modernizing a progressive r and d function so that we launch as many fantastic products as possible into the marketplace. Next. And just on the point of launching products, you know, a key thing to observe here, we make products in a factory. We do one shift five days a week at the moment, and that factory has really high quality modern equipment. So we have enormous capacity. If we double or tripled shifts, it wouldn't take a great deal of extra investment, but we'd clearly be delivering two, three times as much product. So enormous untapped potential in terms of capacity.

13:49 A few words on talent then. So when I started here, you know, a year ago, we had about 99 people. We've now increased that headcount. Inevitably, we've had a number of people leave. We've more than compensated for that by hiring some really good talent, yes, in engineering, but also across the board. I said earlier, we've got three new board members, six new leadership team members. We've introduced an HR function to a business that didn't previously have one, specifically to drive our ability to develop, retain, and hire talent. We've also introduced a commercial function to a business that didn't previously have one so that we can engage in a wider range of progressive business relationships with both suppliers and customers as we strive to grow the business in new areas and lots more focus generally on personal development and performance.

14:42 So talent is a key differentiator for us. Next. So this year then, we started the year with a very strong order book. By the end of quarter one twenty twenty two, that was in excess of £16,000,000, which for us is a substantial order book driven by a general trend in improving order intake. Yes. Also, because the components shortages tend to delay our ability to ship, which further increases the size of that backlog. Nonetheless, very strong order book, very strong backlog as we enter the year. We will absolutely remain focused on these strategic initiatives as well as on time delivery of both of our designs and our manufactured product.

15:29 So it will be a strong year, but but with a short term headwind around components availability. What that does to us, customers don't thus far, and I don't see this will change, customers don't really renege on their commitments to us because we're so so designed in. But what does happen if we're frustrated by components is that we'll struggle to ship as quickly as we would otherwise like, and therefore, the impact is we see a little bit of a delay in revenue. But in all other regards, this is going to be a strong year. Next. This is a really important slide. Very important slide. So what I've done on the chart on the left is a chart of normalized order intake against a backdrop of growth in order intake. But as normalized, it looks back a couple of years and then forwards to next year. The three lines then are orders that have been placed on us for new and current product, and the other two lines are last time buy or end of life.

16:33 Clearly, if something is categorized as last time buy or end of life, then it's near the end of its product life cycle and therefore represents revenues that you can't rely on in future years. Okay? What you'll see two years ago is that less than half of the orders we took on were for new or current products. So more than half was for last time buyers or end of life product. We're now transitioning. This is the focus on r and d and new products. We're transitioning so that much more of our order intake, 70% this year, 90% next year, will be for new and current products. So these are products at the beginning of their life cycle, with a long future ahead of them. We assume product life cycle of seven years. Actually, in practice, it's much longer than that. So this is a business in very positive transition.

17:26 Next slide. So,

17:30 clearly, a board has a lot of components on it. So if there's just one component missing, then we can't ship. So just like everybody else, we are not immune to the changes in supply chain. It was a headwind for 2021. It is absolutely persisting through 2022, likely into next year. We've taken a number of actions in the first half that we think will ease the situation somewhat for us in the second half, but it's still tough. Right? So we've we've implemented a number of changes in practice. We're able to use cash to be more committed to the supply chain. We've improved our strategic relationships with critical suppliers. And what we're finding is we can get components as fast as anybody else can. We have had customers want to test that with their own supply chain teams to see if they can source components any quicker than us.

18:25 And so far, the feedback is, no. You get components just as fast as anybody else. And indeed, we are seeing some of the competitors struggle perhaps more than we are, but let's see. So that's the components thing we're living with at the moment. Next slide. And so just to close off components, the the issue for us is not losing customers. That that that should not happen. It defers revenue a little bit. So if you were to look back through this presentation at some of the numbers, what you'll figure out is there's a a growing backlog, which as the components ease will represent a surge in revenue whenever that occurs, maybe next year, maybe the year after, depending on how long the challenge persists.

19:13 But unlike a lot of customers, what we're not doing is slashing costs. What we're absolutely doing is focusing on talent, r and d, and investing in those, what for us, are big growth plays around made in The United States and systems and launching more products than we have done in the past. So we will be committed to remaining focused on investing through this period with an absolute intent to grow markedly as supply chains ease. Next. Another example of investing, this is our new facility in Theale, which is near Reading. So our factory is in Colchester. We've got about eighty, ninety people in Colchester. This is our facility in Theon. We've had employees in Theon for some time because N 3, N 4 Corridor, it's it's a good place to secure talent.

20:02 I would say the accommodation there was entirely unfit for purpose. So we now have, you know, post COVID, an environment which is really attractive to existing and potential employees, but also somewhere that signposts to the customers and stakeholders that will visit with us our intent to being a really progressive investing growing business. Next. So then the outlook is extremely positive. Right? So, yes, there's a short term frustration, but the opportunity this this fantastic business was led for some thirty years by the same person who did a very, very good job. But, you know, my analysis on assessing joining the company was there's substantial opportunity to modernize, be more progressive, more committed to the market, and hence, really grow a UK based business as well as now a US based business.

21:07 And everything I'm seeing and experiencing, including our feedback from critical stakeholders, is that we're on a very good track indeed, albeit with some short term challenges. Thanks. Thank you. That concludes the presentation. I'd be very happy to take any questions. Miles, that's great. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while Miles takes a few moments to review those questions submitted already, I would 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 your investor dashboard. Miles, as you can see, we've received a number of questions throughout today's presentation. May I thank you for addressing those that were presubmitted, and, of course, we'll publish those on the platform where it's appropriate to do so. Perhaps if I take this question that we have here first from Martin, it reads as follows.

22:01 Great that you're doing a webcast with q and a for the individual investors. Thank you again. Should we expect these at every reporting from now on? This is the first one we've ever done. So the truthful answer is we'll review the impact afterwards. I mean, I my attention is being much more transparent and engaging. So assuming we get some positive feedback from this event, then, yes, I think it is likely we'll do similar going forwards. That's great. The next question that we have here reads as follows. What's the reporting delay due to an illness or issues that led to qualification? Yeah. Primarily illness. So the lead partner from our audit had an extremely severe case of COVID. Our own team at the last in the last few weeks also was beleaguered by COVID, and our lead finance person became extremely ill with a different condition.

22:55 So, yeah, we've been beleaguered by illness in that team. No underlying cause in terms of the financials. I'll take the opportunity to note that our new CFO started this week. She is extremely experienced and will be a step change in how we lead finances going forward. Thank you very much for that. The the next question that we have here reads as follows. Please illustrate the profile of revenues of a typical product over its lifetime, e g, if sales at peak are a 100, in which year is the peak, and what rough level is sales in the offer years? How long is the typical lifetime? Typical lifetime, we assume to be around seven years. Sometimes it's ten or even fifteen. Part of what customers value from us is when they design something in and buy it from us on day one, they are able to secure it 15 later, the exact same product, which means they don't then have to requalify their product.

23:51 Typically, it is a bell shaped curve. So the peak, but with a longer tail. So the peak may well be, remember, we get designed in. So we'll launch a product. We then make, you know, a handful for a customer. We'll then evaluate the product. If we get designed in, it could then be twelve or twenty four months later that they hit peak production. So and we see that coming, of course, because we've been designed in. So the peak revenues are likely in the middle, more or less the middle, year three, year four, maybe. But, clearly, if you're not there on day one to deliver evaluation boards, then you miss the opportunity of being designed in, and you don't get that big revenue two, three years later.

24:41 Thank you. That's great. The next question that we have here reads as follows. Can you please illustrate which a system might be with a simple example? Yes. So a sis a system, the the parts most commonly found in a system might be a single board computer, which is what we have made for many years, a storage module. There might be a dedicated communications module. You might have a task specific card like our position navigation of timing card, which tells the platform it's in what the time is and where it is, which is clearly important to particularly a military customer. And a switch will often be in there as well. So that's you know, manage your data flow between all these different cards.

25:29 So that could be a typical system. A a system could be as little as two slots or as many as typically seven or eight. Thank you. Thank you. Maybe moving on to a question from Mark. Reads as follows. The company issued a statement in January that said the company expects to report revenues and profitability slightly ahead of market expectations. But in the first sorry. The final result showed a slight miss on EPS and dividends versus same cost forecasts. Can you explain the discrepancy, please? Yeah. It was slightly up on the same cost forecast that was issued. Forgive me if I'm with the exact date, but, you know, middle of the second half of last year, CNCOS issued forecast.

26:16 In the end, we were slightly up on that. Yeah. So we're slightly on that. It was down versus the forecast earlier in the year. Okay? So there were two different forecasts coming out about six months apart, and that was as a direct result of the components throttle in the second half. Thank you. I know you touched on this slightly in the presentation, but we have a question here from James, which reads as follows. What's your acquisition criteria, both strategic and financial? We're developing that. And and if we had it very clearly, I might not share at this point in time anyway, but we're developing that. So we do have a number of potential organizations that we're considering as part of an early pipeline.

27:04 I mean, the worst thing to do is make the wrong acquisition. So we're not, you know, we're not in a hurry to acquire for acquisition's sake, but putting that cash to work is really important. And as we develop this systems business, it may well be there's piece parts of a system that are affordable organizations that could be candidates for acquisition. Now there's some criteria that I think are evident is, yeah, our biggest market is in The United States, and hence, that's the market which also has most ability to grow. So US based organizations could well be attractive. It has to be accretive to our strategy, so it's gonna be a bolt on that makes sense to the presentation I just gave, not something too far away from what we currently are.

27:54 And, of course, it has to make absolute financial sense to make that investment. Sorry. I'm not more specific than that at this time. Thank you. And a follow on from James. The question reads, are systems more risky than simply plugging cards? Different risk for sure. So they there are off the shelf systems and custom systems, and customers may want either. Whereas cards are generally off the shelf. It's generally a COPS product, although we will do specials for customers. So systems have more NRE in. So there's more engineering risk to manage. My entire career has been about managing risk.

28:41 So I guess the short answer to the question is, yes, there's more risk to manage, but therein, there's more value to deliver as well. That's great. Another question that we have here from James reads as follows. Might be a silly question, but given Intel's product issues over the last few years, might it make sense to broaden partners to other OEMs as well, or are Intel still bleeding edge for you for for your business? That's a great question. What we find is typically our customers have track record in understanding and appreciating Intel products. So for a lot of our customers, assurance and track record might matter more than transient or, you know, sort of latest Gucci features as it were. And Intel's competitors still haven't quite got the traction that Intel do in our customers' markets.

29:39 So, you know, sticking with Intel as our primary supplier of processors is is absolutely where we're at. There's no point changing. Now there are processors that are a very different proposition to Intel. So whilst we might not be investing in a like for like versus Intel, that position navigation timing card we launched earlier in the year does utilize an ARM processor, which is a completely different proposition in terms of size, weight, and power. So we are learning how to use ARM processors. And if opportunity comes up to design and deliver cards utilizing ARM, then we'll be doing that as well. Perfect. Thank you very much for that. Just moving on to a question from Scott that reads as follows. What needs to happen for the component shortage to ease?

30:27 There needs to be enough capacity in semiconductor foundries. So, you know, I'm sure you all know, but the there's there's multiple factors that caused this. So COVID shut factories. COVID also prompted people to buy a lot more domestic electronics. So reduced supply and increased demand, and it's as simple as that. So enormous spike in demand has caused a lot of people to over order. So they might place orders with multiple suppliers or something and then cancel half of them. But by the way, we don't experience that as a problem with our customers given the nature of what we do. And bringing on board new semiconductor foundries takes years. You know, they're they're nontrivial plants. So we're we're all waiting for capacity to catch back up with demand, and that that's gonna take some time.

31:20 Thank you very much for that. Another question that we have here from James, reads for us. Do you know what sort of shareholders sold after the results announcement causing the big drop in share price? Most of the transactions, maybe even all of them, have been with private investors, in that period. Now the market is extremely difficult in technology and in particular UK technology at the moment. So I'm actually not concerned by that short term change in share price. Not at all, really. Feedback from our institutional investors is extremely strong, and doing things like this helps us get closer to private investors. So but if you have to look at other technology stocks over the year, then, you know, we don't stand out as struggling.

32:12 And I do think it's a short term issue. Now people are really spooked by this components thing. What I would say is, you know, if you look at the broker's forecast, it's still actually a really strong year despite the forecast from our broker being, you know, a little bit less than last year. Thank you. Another question that we have here. Can you please name a few of your larger customers, Lockheed, Boeing, TECHNOLOGIES, etcetera, all different smaller names? I'm cautious about deliberately naming customers, but US defense and UK defend and worldwide defense primes, like you've mentioned, feature quite strongly in our customer base. So large blue chip organizations as well as some of the mainstream suppliers for communications, for example.

33:04 A lot of what we sell, about half of what we sell, we do through distributors. So we direct sell half. We direct sell in The US, and we direct sell in The UK. Much of the rest of the world is through distributors. I know that wasn't a question, but I thought you might find that interesting. So so I've slightly evaluated the question, but you're on track with the names that you've mentioned. That's great. And if I may follow-up with a question that we have here from Philip that reads, do you use chip suppliers other than Intel? What proportion of your chip supply comes from Intel, and how important are they in your product design? All of our not true. Most of our processes are Intel. We've now done some ARM. And a single board computer without a processor is is not a product. So we have an absolutely critical dependency on Intel.

33:52 Absolutely. But they're also our biggest asset. We're top what's called a titanium partner. So that means we get to understand their development path a long way ahead of the public so we can design our products around theirs even before they're launched. So that's a critical partnership. On a single board computer or on any plug in card, there may also be other Intel components, not just the processor. For example, they may have an Ethernet controller. So we do have a small number of Intel components beyond just the processor. And then after that, it's a very wide range of component suppliers, not just Intel. Thank you. We've had a number of questions come in regarding competition, and we have two questions here, if I may. The first one reads as follows. Who are your main competitors?

34:43 Then another question that we have here from Mark reads, thanks for the webcast. Who do you regard as your direct competitors, and how much of the recent increase in headcount has gone into the sales and commercial function? Thank you. The majority of the increased headcount has gone into engineering, so r and d, which, by the way, we capitalize and then amortize over seven years. So it's not too shocking to have recruited some people into engineering. We then have commercial HR to improve leadership on the leadership team. So a little bit across the board. I've forgotten the first half of the question. Can you repeat it? Absolutely. The the first question was, so your major competitors, and then Oh, yes. Thank you. Who do you regard as your direct competitors? Got it. So in terms of competition, so the the big players in this market are ABICO, which is a subsidiary of AMETEK, Curtis Wright, Mercury, companies like that. So predominantly US based, very large companies.

35:54 CONCURRENT is another one. Perfect. That's great. If I may then move on to another question we have from Scott. What are your expectations for systems revenue and earnings contribution in twelve to twenty four months' time? Well, we've got some qualifying to do to answer that with confidence. And therefore, I'm going to be imprecise. But, yeah, when we get it right, it should be at least as big as the existing cards business. Now that won't be a step change. We'll have to it must be considered in getting up to that kind of scale. But, yeah, it really should be single digit millions in that time frame. Thank you very much for that. A question here from SAT reads as follows. Where do you source your components from, and any plans to source more from The UK, USA?

36:49 Most of our components, we get through distributors. So if you're if you're Intel, for example, Intel don't direct sell. They do it through distributors. And in any case, the components originate from hundreds of different places. So the vast majority of what we buy, we get through distributors. And our biggest distributors are UK based so that we can have a strategic relationship with the distributor as well as with Intel who will help us as much as they can from their end. And then we'll let the distributors that do most of the hard work in terms of sourcing components from wherever they come from around the world. Thank you very much. Just turning on to a question that we have here from Peter reads as follows. Please may I ask a question on the treatment of development costs in relation to new products?

37:40 At what rate do the company expect to capitalize these costs in the future? Further to this question, are the cost of end of life products already expensed through the profit and loss account in full? Thank you. Yeah. So we'll depreciate it's a seven year life cycle. Okay. So after seven years, we've completely paid for the product. We capitalize over a seven year period. So anything we sell after seven years is a 100% upside, if you like. I think that answers the question. Thank you very much. Just turning back to the competition. I know you touched on this briefly, but it says, will make your products more attractive than your competitors?

38:27 First and foremost, being first to market is really important. We've got a good reputation for quality and customer support, and maintaining that is absolutely vital. I think it's also important then for us in the future to invest in some really differentiating software capability on our boards. I mentioned security earlier. You know, security is a thing that's going to intensify rather than diminish as an issue. So I think that's what's really important. And it would be true to say that the purchasing decision often in a program is made quite late in the program and at relatively junior levels in big organizations.

39:17 So our other focus is to really enhance business to business relationships so that we're, you know, we're in there. We're in amongst the program way ahead of when that that particular team feel like they need to make a purchasing decision for a single board or system. This is where doing systems really helps. Because if you're involved in the system, then you're necessarily much earlier in the customer's life cycle because they have to worry about the system a long time before they have to worry about the boards that go in it. Thank you very much for that, Miles. Perhaps a few last questions. So the first one here, when you miss out on being designed into a new platform, what are the common reasons? Good question. We when if we have product available, we have good track record in winning. So we would expect to win approximately half of the time, which is good.

40:14 Reasons can vary. So sometimes it's price where competition have just come in at a at a lower cost. Sometimes it'll be an issue of functionality. So we have to decide what product we're going to design, and it will then take six, maybe even twelve months to complete the design and qualify that product. If at the time we've made decisions about the exact processor type or the configuration board or or what Internet pro you know, the decisions we made then, we're banking on being right. Now often they are, but it might be that for a customer's very particular need, the competition are in the marketplace with a slightly different mix of components or functionality that just slightly better suits the customer's application than ours does at any time. I think that's the most common cause for not being designed in.

41:12 But as I said, our track record for being designed in is really quite good. It's much more about being on time with the product so the customer has something to evaluate from CONCURRENT TECHNOLOGIES. Thank you very much for that. Just turning back to Intel, a follow on question from Scott Reed. Going forward, how quickly do you expect to develop a system after an Intel launch? Well, of course, the process of processes are about boards. So boards and systems might be on, you know, very different life cycles or a system might be able to utilize any number of boards. So I don't necessarily see there's a hard link between Intel launching and the life cycle of a system, actually. I I think they're decoupled. It's building systems is pretty well understood thing.

42:02 Having the expertise of being the board designer will really help. Some systems providers who don't also do boards do struggle with integrating the system and getting it fully working because they don't sufficiently well understand the subtleties of how the cards work themselves. Thank you very much. And perhaps one final question here from Satt. Reads as follows. Will a strong dollar help your business and more specifically against USA competitors? It could do. I I tend I tend to do exchange rates as swings and roundabouts. I mean, it could do. Clearly, if we're manufacturing in The UK and exchange rates in our favor, then that could be good. Equally, we buy all of our components on a global market, which is typically not in sterling.

42:53 Yeah. The processes might be in dollars, but the other parts come from elsewhere. So I don't typically focus on it. If we end up having a bit of a windfall by virtue of exchange rates, then great. Clearly, if there's very strong long term trend, then it can change a company's appetite for where it invests in developing and building product. Thank you very much for that, Miles, and thank you for addressing all of those questions that came through from investors this afternoon. And, of course, if there are any further questions submitted today, we'll make these available to you immediately after the presentation for your review, and we'll publish all those responses where it's appropriate to do so on the investment company platform. But perhaps before redirecting investors on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please ask you for a few closing comments, that'd be great. Yeah.

43:39 I'd just like to thank everybody on the call. Your time is extremely precious. Your feedback will be welcome. Sorry I didn't get to hear or see you individually. Look. I I would say this, wouldn't I? I think this is a great company. It's a great British company at a time when a lot of the competition is slashing costs to deal with short term challenges, where we have the opportunity to really grow it and make it into, you know, a much larger, prosperous, progressive organization. So if you choose to be part of that, then I'll be absolutely delighted. That's great. Miles, thank you very much indeed for taking the time to update investors today. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations?

44:28 This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of CONCURRENT TECHNOLOGIES PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you.