Concurrent Technologies (LSE:CNC) — Half year results presentation for the six months to 30 June 2024

0:00 Good afternoon and welcome to the CONCURRENT TECHNOLOGIES PLC Half Year Results Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can view all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you to CEO, Miles Adcock. Good afternoon to you, sir.

0:32 Good morning, everybody. Thank you very much for your time here today for our half one results presentation. Sadly, I'm not joined by our chief exec sorry, CFO Kim. She's really rather ill, so it's just me today. Next slide. So for those of you that don't know me, I'm Miles. I've been with CONCURRENT for just over three years. Prior to being here, I led rather larger businesses as parts of companies like Teledyne, Kinetic, and BAE Systems. And Kim joined us just over two years ago having been the finance director of Kinetic's international group of businesses, hence lots of experience of overseas acquisition and integration. Next. So what we do as a business, we were formed almost forty years ago to do one thing. And that thing was to take the latest generation of Intel microprocessors, design the printed circuit board that those processors would then plug into, and add in all of the other components to create what's called a single board computer.

1:40 An entire computer on just one board. And those were targeted at customers who had particularly demanding requirements not just for performance but also for environmental rugged conditions such as temperature, shock, salinity, things like this. Roll forward to when I started with the company three years ago, and we absolutely continued to do that, creating products that customers had high regard for in terms of quality and excellence in service. But it was my assessment that it was a company lacking the operational excellence to really take it forward to fulfill its potential, and also a company lacking somewhat strategy and clear understanding of the market opportunity.

2:29 Three years later then, and we'll see in this presentation, we do have a clear strategy. We set that out two and a half, three years ago. We're making excellent progress on that strategy. And as a marker for change, some three quarters of our colleagues joined after I did. We've had a fairly fundamental uplift in capability in the team. And just to really share part of the journey, if you don't know it already, in my first year in the company, 80% of the purchase orders that customers gave us were for last time buy or end of life products. So that was a company rapidly running out of road in terms of offerings to customers.

3:16 We turns out we were coming to market some eighteen to twenty four months late relative to the best of our competitors by which time, of course, there are a lot of the business that you could do has gone. So we set about a pretty fundamental step change transformation in in earnest. The most important part of that transformation was to completely overhaul our approach to product development so that we would aim to be first to market with the products that we brought. And indeed, in 2022 and since then, 80% of the purchase orders placed on us by customers are for new and current product. We deliberately hired some of the best salespeople in the world in our market and, yeah, recruited a number of extremely senior professional and functional managers so that we could set about growing the business.

4:17 The way that we sell, if you are a customer and you're probably in defense, the way that we sell is if you have a program, for example, upgrading fleet of vehicles, you might be upgrading the electronics in a fleet of vehicles, you will get to the point where you wish to down select the computing capability that you want in that vehicle. At that time, we have to put what we call an evaluation card, product, computer in your hands. Hopefully, we're the first to market with what you need, but assuming not, you'll evaluate a number of offerings from us and others. If we get down selected by you at that point in time, then you will place purchase orders on us for the duration of your program.

5:02 That program is typically around seven years in length often, And it may well be two or three years from the point at which you down select us. We call that a design win until you heat hit peak requirements and therefore peak revenue from our perspective. So that's how we sell. And therefore, we're all about having much better strategic engagement with clients so that we understand what customers are doing and what they need long before they run any kind of competition. We're absolutely about bringing market to market products very quickly being first if we can. And then the underpinner for all of that really is talent and culture.

5:47 And we engage in talent and culture just as strongly as operational excellence and strategy. Next slide, please. So here's here's what we offer. I've talked about the left hand block here. The design and manufacture in our factory in Colchester in Essex of these very high end rugged computer boards. In the last three years then, we've also introduced systems integration services. This is the middle block whereby customers who want to take our computer product, they will plug that into what we will here call a system. And alongside our computer board will be boards that do other things, graphics, things called field programmable gate arrays, storage, custom cards for the customer.

6:40 That all sits in a box called a system. And those systems can be technically demanding to integrate and get up and running first time around. And it's people like us who really understand how the boards inside their work that can add a lot of value to systems integrators. So we've started to do that. That's really a precursor to the right hand block here which is we really want to design and manufacture the systems that our computers go into, not just the computers themselves. And so it was last September we raised money from the market to buy a small but extremely competent company in Los Angeles who have the capability to design and manufacture these systems.

7:26 An important distinct an important difference between the boards and the systems they go into is the boards are by and large standard product, and we can sell them globally from The UK including into North America. But systems are typically very custom, very sensitive to how the customer works, customer typically being a prime contractor, but also sensitive to some of the national security issues in that country. And therefore, you absolutely have to be local. That's why we bought a company in Los Angeles because The USA is by far the biggest market for these systems and our computer boards that go in these systems. That business is going very well. I'll brief on that later. Next slide, please.

8:17 So a superb first half. Record first half results by some significant margin. The integration of our new systems business in Los Angeles is progressing very well indeed. I'll brief on that later. We've secured eight major design wins in the first half. So a major design win, and I just talked about how we get designed in, a major design win is one where we believe our customer will place purchase orders in excess of £1,000,000 per annum on us once they're up and running. Often two or three years later after the design win happens itself. We secured eight of those in the first half. We secured eight in all of last year. And prior to that, typically, we might have won one per annum.

9:07 So this is a substantial step up in terms of the medium and long term confidence in real growth in this business. Continue to invest in talent and new product development as well, of course. And notably, we've enjoyed our largest ever contract in the first half of $4,500,000, which got upgraded just after the half to almost $6,000,000. That's with The US based defense prime. Very good. Next.

9:42 So in the first half, around a third of our revenue was into The USA, single biggest market that we address. Important to note, however, that the Department of Defense budgets did not get signed off by a central government in October 2023 and were delayed for political reasons until April 2024. So we have seen quite a headwind, something but slip across the board with closing orders in The United States in the first half of the year. That's unlocked now, But had that not been the case, we would have seen North America feature rather more strongly in the first half than it did. Europe is very strong for us, which we sell to via distributors.

10:27 And Asia Pac is picking up very well. We do good business in India, South Korea, and Japan in Asia. The UK is really picking up. So last year, we secured 5,000,000 of order intake in The UK. That compares to a trend prior to that of 1,000,000 per annum. And this year, order intake wise, I anticipate we will again do at least £5,000,000. So very good. Our addressable market has stepped up really quite significantly, mostly because we are now able to address system level opportunities, not just card level opportunities. Suffice to say, we're a very small player in an extremely large market.

11:13 Our competitors are typically billion dollar plus, often US large corporates. Next slide, please.

11:26 So first half then, revenue up about 30% on first half of the prior year. That was itself a record revenue year. So this is extremely pleasing. Profit, of course, up in line with revenue. Note that our acquisition in LA as planned is loss making in the first year. So there's some dilution to the group results on profit as a result of that, but nonetheless a record performance. Next. This is the five year trajectory. We've included order intake here as well. So we see record order intake for the first half. Again, note that would have been somewhat stronger again if US government budgets had been approved as expected.

12:13 So strong there. You see a dip in performance in 2022. That was in the midst of the global component shortages whereby our lead time to customers was extended from sixteen to almost forty weeks, which really reduced the amount of revenue that we processed that year. That issue is now gone. It's very much business as usual, pretty much. Next. Wanted just to touch on cash, and you'll be able get copies of this presentation if you wish to analyze this further. But we are returned in general to being cash generative. During the period of shortages in components, we elected to continue to invest in the strategy of the business, recruiting and developing teams that could bring products to market quickly and sell them.

13:05 And therefore, we depleted cash quite substantively during '22 and into '23. That That is now reversing except that we lost cash in the first half for one very simple reason. In 2023, we consciously chose to make a significant last time buy $4,500,000 of a particular product that it was coming to the end of its life. That product is a voltage regulator that we use in all of our boards. So rather than incur the significant internal distraction of reengineering, redesigning all of our products and simultaneously being deeply inconvenient to our customers, we elected to buy five years worth of that voltage regulator.

13:54 We didn't have to pay the cash for it until April this year, so good cash terms. Nonetheless, that's a major lump sum. Because we're growing perhaps a little ahead of that planning assumption, we are using that product more quickly. We'll have used all of it in three to four years, which is a good thing. Meanwhile, we've made excellent progress in doing the design work necessary to switch to an alternative product as and when we use up our stock. Next.

14:24 So in terms of share around the so this is the global split I talked to earlier. What I neglected to talk to earlier was the market split. So defense is up at some 82% of the business that we do globally regardless of region. You can see the regions here. Defense is getting stronger for us as a company and will continue to grow. Other markets we address opportunistically, but other markets most often can secure the computing needs they need most of the time from more commoditized, lower cost solutions. And it is by definition defense that always want the very best and latest and most capable equipment they could possibly get.

15:12 And therefore, we see a lot of growth in defense. It is absolutely our focus for a number of years to come. Customer concentration is good. If you were to look at our customer concentration three years ago, you would have seen we were very dependent on one or two customers up at the 2 to £3,000,000 per annum mark. We've introduced a good number of larger customers now such that our tenth largest customer is almost half the size of our largest. And therefore, we have the ability to accommodate the fact that one or two of these customers may or may not appear in future years. Our first largest customer by region in the first half of this year was India. Second was Italy, and third was Malaysia.

16:00 Malaysia is a division of Keysight, a communications customer. They were our largest customer for many years. They deferred last year. They didn't take much product last year. Good to see them featuring back here again. By virtue of the $6,000,000 order that we've received, expect to see The United States feature very strongly in the second half as we turn much of that $6,000,000 into revenue. Next.

16:29 Wanted to explain a little bit about how our order intake and our pipeline is evolving. So it used to be the case that we had one kind of business and one kind of business only, which is a customer would place a purchase order on us. And then however long our lead time is, we would deliver products to them and one month later claim cash. That was a 100% of our purchase orders followed that routine. We now have much larger purchase orders on average order size going up. Sometimes they are for scheduled multi year drops of product, so not just delivered as quickly as our lead time allows. We will also now take contracts from customers who wish to pay for us to modify our standard product, what we call mots, modified off the shelf.

17:20 And for systems, these are typically milestone based projects where we would secure an upfront mobilization payment and then recognize revenue in line with progress against milestones. So having more having more vehicles in our order intake with different revenue profiles, different ways of recognizing revenue and cash, it gives us more levers to pull in terms of balancing performance. 2024 and 2025 are arguably transition years

17:52 as we move towards the time at which these layered up design wins, which start to really have impact in '26, '27, give us a much more predictable and strongly growing order intake. Next.

18:12 So I wanted to give three different examples of design wins. The first one represents how most of our business is still done, which is a custom orders standard product from us. This was one of our very latest boards, an example of us being literally first to market to put key technical features onto a product that this customer wanted. We were also able to bring innovation to bear in terms of the weight and power of this particular product. Computers like this generate a lot of heat. And to get the heat off, you use a very large heavy, typically copper, heat sink. We designed an aluminum heat sink here with a technology called air flow through, which enables the processes to run at full power for longer before overheating becomes an issue.

19:04 Plus it weighs a lot less, which is important for an airframe. Customer very pleased here. We've worked with this customer for two and a half years to get to this point. All of the customers with whom we've secured major design wins are customers who are new to us in the last three years.

19:23 This customer has transitioned very quickly, not two to three years, transitioned very quickly to placing large purchase orders on us, $6,000,000, and we expect the lifetime value of this single opportunity to be in the region of $40,000,000 over an up to ten year time frame. So that's that gives us fantastic visibility. The middle example is a UK based defense prime who very much liked one of our standard products but wished to pay us to modify slightly the software, the hardware, but also the qualification regime by which we proved certain environmental survivability features, which we're very happy to do.

20:10 Working through that and we expect approximately £5,000,000 worth of orders to follow over future years of that modified off the shelf product. The example on the left then is our embryonic systems business. This is a European but with a large footprint in The US defense prime. I met with the divisional leadership of this business unit in Washington DC some time ago. And it is their desire to increasingly use us as their hardware provider. They design and manufacture electronic defense electronics boxes, very capable. They wish to diminish the amount of time and resource they use on hardware design and manufacture, instead focusing on software where they develop applications which for them are the value they bring to their customer.

21:05 And therefore, they'd like to see us doing more of the hardware design and manufacture at system level. They've paid us 300 k to design a custom system for them. This displaces their current incumbent with whom they were not satisfied, and we now expect $6,000,000 plus of orders of this initial program to work with them, which is very much an opportunity for us to prove our credentials and then move to hopefully providing greater support to them as they pursue their strategy, which is also coincident with ours. Next.

21:44 So these are those same three design wins with anticipated order intake projected from 2025 to 2032. So seven years worth of order intake there. Clearly, the standard product for a large opportunity dominates in terms of scale, but the other two are types of business that until very recently, we did not do at all. So they're incremental to what this business was previously capable of doing. Now we've secured eight of these design wins in the first half and eight last year, so 16. So internally, of course, we've got this chart with 16 layers on it. And it is very much that that underpins our confidence in the forecast that Cavendish recently issued, which if you haven't seen it, upgrades this year to 36,000,000, but also introduces a 2027 forecast from Cavendish at £55,000,000.

22:46 Substantively for us underpinned confidence wise by this kind of model, which we're now able to populate with pretty reliable data. Usually, in defense, timing is the variable rather than whether or not the program will happen. Once the program gets up and running and prime contractors are contracted, then it's pretty reliable. Occasionally, defense programs get canceled mid flight, but it certainly isn't norm, and we've taken a very prudent approach to any expectation setting. Next. Capacity is, of course, an issue as we grow. So taking our boards business first, the computer boards business based primarily in factory wires in Colchester in Essex. We also have an office based and lab facility in Theale near Reading.

23:40 We have two production lines capable of generating approximately £40,000,000 worth of product. We're well developed in planning to implement a third line that would come at a cost of small single digit millions of pounds for which that we have the cash, which would approximately give us a capacity of £60,000,000 per annum. We would then need to decide, and we haven't finalized that decision yet, but we would then need to decide, do we displace office staff in our already rather full facility in Colchester, put them somewhere else, and then implement the third line there? Or would we move lock, stock, and barrel to a larger facility? That's a decision we need to make anyway because in August 2026, our lease either expires or we will have renewed it. So in the next quarter, we will make that decision.

24:31 However, meanwhile, we have four external contract manufacturers that we have qualified, and we can switch them on very quickly for additional capacity. Therefore, we can consider, as of right now, our capacity for boards to be, to all intents and purposes, unlimited. It is quite common for our competitors to use contract manufacturers. The decision for us is what co capacity do we wish to have internally going forwards, And we will have made that decision in the next quarter. Systems business then. I said it's a little loss making this year, and that's because we've gone ahead and recruited an extremely experienced general manager. He ran a tens of millions of dollars business in Teledyne prior to coming here in LA.

25:19 We have a financial controller that we've hired. We've got a contracts officer inbound. We have a project manager, and we're hiring technical talent. The nature of this business in LA systems business is customers will contract us to design and manufacture against their requirement. And therefore, the risk in a business like that is commercial, contractual, programmatic, engineering, financial. It's all about project management, risk management, and understanding governance, which is why we've gone ahead and recruited those people ahead of the pipeline developing into volume through the facility. The pipeline is good. We will see that work start to come through in the second half of this year with an intent to be at least breakeven in 2025.

26:08 The systems business will then be self funding in terms of growth. So whereas in the boards business, you invest upfront to design a product which you then sell. In systems, we will get custom contract after custom contract where the customer pays for mobilization design and manufacture, and you can recruit in line with the profile at which you're winning that work. The capacity for a new facility that will move into end of this year, early next year is around 45 people. And we already assumed approximately a million pounds of expenditure to kit out that facility. And again, we can do that for existing cash. Next.

26:52 So to summarize, we've, to a substantial extent, transformed the computer boards business. I would say that is now fixed, more to do, but it's fixed and on a path of real growth evidenced by these major design wins that we've got some excellent momentum with. The systems business, we bought it. Integration's going well. The underpinning planning and recruiting is going well. We now need to start to win those those opportunities to transition it into being profitable and growing. And therefore, both short term and medium medium term outlooks for this business are really very good. We're very pleased indeed. That concludes the presentation. So if we'd like to move to q and a, please, and drop the deck, please.

27:40 Yeah. Perfect, Miles. 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, which is situated in the top right hand corner of your screen. We have received a number of questions both pre submitted and throughout today's presentation. I'll start the q and a session with this one here which reads as follows. Is the life cycle of new products getting shorter or does it vary significantly from product to product? It's typically at least seven years. It's not particularly varying. Some products change a little bit. The reason it's quite a long life cycle is you want to sell to a customer the very latest technology. As soon as they've down selected you, they then don't want that to change for the whole life cycle of their program, which is typically seven to ten years. So we depreciate our capital investment on r and d over seven years, which is usually the minimum lifespan of our products because customers will keep buying them once they've locked us into their program.

28:36 We don't see any particular change in lifespan of products. Thank you very much. The next question is around dividends. Why the reluctance to pay at least a small interim dividend? We do have a healthy cash balance, and we're now in a position of generating cash flows going forward. Yeah. I understand and have sympathy with the statement. We, of course, get highly contrary views on dividend and if and when to pay it. We have said we'll pay dividend out of India profit and cash generation. Clearly at the half, we look like we're well on track to do that, but it will be at the full year that we make that final decision. If you have access to the Cavendish forecast, you will see that they forecast dividend payments annually. At this point in time, we have no reason to think that's not what will happen.

29:23 Thank you, Miles. Turning to the next question. If president Trump wins in November and introduced tariffs, how would you manage such situation?

29:33 Personally, and who knows what will actually happen. Personally, I think it's extremely unlikely that tariffs would apply to inter country defense opportunities. The UK and The US have extremely close relations, and we both have defense companies operating in each other's country with a lot of equipment going back and forward. So I would be hopeful that tariffs would not apply to our kind of capability. If they did, we're well positioned to manufacture in country. Said we've already qualified in country too in The US who can build our product and our systems business issued is located in The United States. So were tariffs to be a thing, we simply turn on the capacity that we've already lined up in The United States. Thanks very much for your comments on that.

30:20 What's the biggest problem to solve for the company in its future?

30:25 Well, it it's no longer how do we transform an out of date struggling to perform business that doesn't have products to bring to market. That's that's largely done. Needs to keep on top of it. It's largely done. The most important things to get right in the medium term are mobilizing our systems business and making the right next acquisitions. Acquisition for us medium term will be important. We're not gonna do that in the short term. We want to prove that Philips works well. But medium term, you know, there's lots of content of a of a system that we don't yet own. Getting that right and then integrating those businesses over time such that they deliver on on their promise will, of course, be extremely important.

31:14 Thank you. The next question is is related to the Philips acquisition and asked how it's helped your US presence. It's fundamental. So whilst we can sell boards from here into The US, if you want to sell a system, you have to be local. You have they formally assess track record as part of their buying criteria. So if you're a startup, it's very difficult. Quality standards really matter and can take a long time to get organically. Philips has things like a s nine one hundred, which is very deep quality standard. So despite Ladies and gentlemen, I do believe we've just momentarily lost Miles. What I'll do is I'll just connect Miles back in. Do bear with us.

32:12 Ladies and gentlemen, do be aware of this as we just reconnect miles. I'll just request control then miles for you. If you could accept that, then we'll bring you back into the room. Hi, Miles. Sorry. I think we lost you momentarily. No problem. So I was just I was just saying that Philips NLA gives us all the credentials we need to operate as a domestic US supplier, which would be very difficult to do organically from here. So they give us permission to operate that we could not get any other way. Thank you for that. The next question asked is the COVID backlog is over.

32:59 Yes. Thank you. The next question is really around management. What management positions have you filled, and what do you still need to hire? We have no open vacancies for management positions. Reporting to me six of the eight reports I recruited, two have been long term in the business. The next layer down, similarly true, roughly 80% of the population have been hired. More than three quarters of all colleagues started after I did. So it's been a big uplift. We've introduced functions that didn't exist before, like HR. Since we brought HR on board, we've recruited something like a 120 people. We didn't have a commercial director.

33:44 Richmond joined us having been the commercial director for capital defense. That's essential if you're gonna do large custom contracts. So the overhaul in management is significant, and we've been able to recruit people who have real experience of scale. These are ambitious, highly accomplished executives who've come from typically very large successful companies. Thank you for the color on that. The next question, what products are you spending r and d expenditure on? We've got 10 standard products in development at the moment. Nine of them are Intel based single board computers. One is just finishing off our position navigation timing product, which is a way of effectively letting people know where they are and what the time is, but in a military sense.

34:36 Yeah. We've got we've got a long term product road map that we execute pretty swiftly and always with the intent of putting technology into people's hands earlier than anybody else. In systems, what we design and develop will be driven by customer inquiry. Thank you, Miles. Given you have some larger competitors, are you seeing any reaction from them? Not yet, but we I'm absolutely certain that we're getting noticed because we are most of what we're winning is displacing somebody who was already engaged with that customer. It's also the case that industry bodies publish statistics on who's growing in particular markets, and we're certainly featuring high in the stats there with very strong double digit growth, which is unusual in this market at this time.

35:30 That's great. Turning to the next question. How many design wins are you targeting for the second half? We were pursuing 24 for the year. Let's see how many we win. Last year, we pursued 20 for the full year. We say we won eight, but in fact, there's a further four where we won with our customer, but our customer is yet to win their competition. So should they win their competition, eight from 2023 would be uplifted, so it'd be upside. So we have a strike rate of somewhat better than half. Thank you for that. When will the first of the 2023 major design win start generating revenues? Most of them generate some revenue upfront as as people order small numbers of products to go into their labs.

36:26 The from 2023, we've said any significant revenue from design wins would start to happen in 2026. We might see a bit of it at the back end of '25, but it's prudent not to assume that. The exception we've experienced, of course, is this very rapidly developed design win, which is the $6,000,000 contract we enjoyed very recently. Thank you, Miles. We did answer a question on competition, but there's another question that's come in and it asks who your main competitors are and if there are any new competitors. No new competitors. The The major competitors are Curtis Wright, which is a $3,000,000,000 US defense electronics company. Mercury Systems, about a billion dollars. ABCO, who were bought by Amic a couple of years ago, they're a very large multi $100,000,000 competitor, and CONCURRENT, a German company in Europe. Again, very large German based but global company.

37:25 We most commonly compete with some combination of those four. That's great. Thank you, Miles. I note that this week's CAM and DISH note stated that the longer term target for PBT margin is at least that high teen percentages. At what scale of revenue would this be achievable? Well, actually, it would be achievable right now if we didn't want to invest in growth. So that's going to be the balance. The balance is gonna be between developing that bottom line and our understanding and ambition for continued growth beyond this particular phase of our evolution. We always said that for the board's business, we'd resource up to a level upfront that was was capable of prosecuting better than £40,000,000.

38:14 That's starting to come true. We we don't intend to grow the cost base in the board's business particularly for the foreseeable. Good bottom line margin for businesses like this is mid to high teens. You don't typically see it much higher than that. Historically, this business did around 20% occasionally, but, you know, that was environment of severe cost control with no real ability to grow. Thank you. Moving on to the next question. Is the increasing focus on systems integration causing a need for increased an increased software development resource? And if so, how are you managing that? Good question. Yes. We've we've now got a very competent, relatively small, very competent software team. We needed software anyway for our boards. Things like BIOS and low level security management requires software.

39:09 I do see us in the future requiring more and more software as we you're quite right. As we own more elements of the system, software becomes increasingly important. I don't see us in the short to medium term evolving into writing application level software, though. That's typically what our customers want to do for themselves. Thank you. The next question here. When you talk about major board orders being over £1,000,000, are these increasing in size as your capabilities and reputation grow? Yeah. We're certainly capable of accessing much bigger opportunities than we were before. Yes. Because of reputation and track record, but also because the the world led really by The USA increasingly moving towards open standards.

40:00 Historically, the big vendors locked customers in with proprietary architectures. Think think Apple the Apple ecosystem tends to be ones hard to leave. The same was also true in our marketplace. So the drive for open standards, which is prevalent in The US but will happen elsewhere, gives us the opportunity to, on a level playing field, compete for work that previously we would have been locked out of. Thank you, Miles. The next question's around your AGM and asks, when you hold your next year AGM, would you consider holding it at Colchester so we can see the manufacturing facility? Yeah. Actually, that's quite a common question, which is good. And, yes, of course, we will accommodate that next year. That's great. Thank you. What types of acquisition would you look to make?

40:49 It would most likely be a business in The UK or The USA. We're not in any hurry to the third jurisdiction to govern. It would absolutely fit the logic of the system strategy that we have. So it'd be some piece parts, either physical or cross cutting technology that we don't yet have. But we will wait until Philips Aerospace acquisition is proving itself before we move ahead with with the the next next one. Perfect. Thank you very much. The next question really is around your shareholder base and ask if you can provide a bit more color on that. Mentions that the founders have stock and if is there any institutional demand? I don't believe there's any founder stock. Couple of long term prior employees have stock. We bought on board Lombard as a major institution at the equity raise last year.

41:40 By proportion, our balance is now more institutional than retail where it was fairly evenly balanced, but we still have a large retail following. A lot of interest for investors. We were oversubscribed on both the retail and the institutional side at the last equity raise. And now being at the end of a fairly full week of briefings, the sentiment is extremely positive from current, but we also meet a lot of future holders. That's great. Thank you for that. And the final with final question we've got here at the minute, ask if there are any senior staff incentives. Yeah. So myself, the exec directors, my first line, and then the leadership teams of the board's business, we are all on exactly the same bonus and long term incentive plan for stock, albeit there's different quanta. But the the triggers are all are all exactly the same.

42:39 We are looking at implementing potentially an all employee share scheme, but we haven't got that in place yet. Perfect, Miles. Thank you very much. Thank you for answering those questions. Of course, the company can review all the questions which today and we'll publish the responses that Miles given on the investment company platform. Just before providing asking investors to provide you with their feedback, which now is particularly important to you, Miles, if I could just ask you for a few closing comments, that'd be great. Yeah. Thank you for your interest. It's this three years so far for me has been about putting in place foundations that can really take us forward. So in many ways, this is the beginning of the journey that we are seeking to have. Very pleased. Very exciting. We didn't talk much about culture, but if you visit, you'll find there's a real buzz about the place. People are really motivated by what we're doing. It's good fun. Thank you.

43:32 Perfect, Miles. Thank you for updating investors today. Today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback and hope the management team can better understand your views and expectations? This will only take a few moments to complete, which I'm sure will be greatly valued by the company. On behalf of the management team of CONCURRENT TECHNOLOGIES PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.