Galliford Try Holdings (LSE:GFRD) — Half Year Results 2021

0:02 Good afternoon, ladies and gentlemen, and welcome to the GALLIFORD TRY HOLDINGS PLC Half Year Results Investor Presentation. Throughout this 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. Just simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we will

0:33 notify you by email when they are ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll, and we'd be very grateful for your attention. And I'd now like to hand over to Bill Hocking, CEO and Andrew Duxbury, CFO of GALLIFORD TRY. Good afternoon to you both. Afternoon. Well, thanks for joining everybody. I'm going to take you through a slightly shortened version of the half year presentation, then of course we'll take any questions. So I'll get straight on with it. The slide you see there in the picture is a sports science facility we built for Leeds Becket University. It's a great building and typical of the sort of things that we build all the time. That red cube at the top there is actually a 100 meter long running track that runs down the length of the building and filled with all sorts of electronic gizmos to monitor the athletes. So really impressive building. Thanks, Juan.

1:34 Okay. So here are our highlights for the half year. We've made really good progress in the half year. We've been fully operational across all of our sites with productivity close to normal. And I say close to normal because apart from a few people and the occasional gang going off to have to isolate and so on,

1:52 it's gone pretty smoothly. And as I said on the main presentation last week, thanks to all of our staff, subcontractors and clients for working together so well over this period and keeping the whole thing on an even keel. I'm very pleased to report a return to profitability with an operating margin you see there at 1.6% and delighted to be back on the dividend list with a dividend of 1.2p. So a really good half year, revenue down slightly in period, and Andrew will take you through the numbers in a bit more detail. But overall, in a nutshell, we've got a really strong balance sheet. And coupled with a high quality order book, pounds 3,300,000,000 there, gives us confidence for the future. So if I just take you through the financial performance. And as Bill has already said, it's really pleasing for us to report our return to profitability.

2:41 And really importantly as well, that is a clean number. So there's no exceptional items in there. That's bang in line with our expectations, and it means that we are on track for our full year targets. We set the targets out in September, and Bill will come on to those a little bit later on. You can see on the slide, revenue is a little bit lower than this time last year, but it is in line with our expectations. And I'd say it's on track for our full year target. And then we'll start to grow that revenue number again from next year. The reduction really reflects two things. One is our focus on core sectors, our selective approach to bidding to make sure that we take on the right type of contracts. And in particular, as well, in our infrastructure business, our water business is transitioning from the asset management program, the sixth asset management program, AMP6, into the seventh program. There's always a slight dip and a hiatus as we transition from one program to the other. And that's reflected in the revenue numbers this period. But overall, as I say, the revenue is banging in line with our forecast and our expectations.

3:45 Similarly, our margin, the operating profit, 3,900,000. Our operating profit in the divisions was 1.6% across Building and Infrastructure. And both Building and Infrastructure showed really strong improvement in the half year. And that 1.6% margin is in line with our expectations for the year. And again, there's good opportunity for us to grow that further in line with our medium term goals.

4:12 Profit before tax was £4,100,000 And due to our relatively low tax rate because of some previous losses, our earnings per share of 3.4p and as Bill said, coming on to a dividend of 1.2p. I should just mention as well, you can see it on the bullet points on the slide, that because of our strong performance, Bill's mentioned, we've been open through the whole financial year, We've taken the decision to repay the furloughed money that was received during this financial year. We had some small amount, about £1,500,000 of receipts through July and August that we are now in the process of repaying. Moving on to the balance sheet. Our balance sheet remains very strong. We remain a very well capitalized business. And this is important and a real differentiator for us in the marketplace, both for our clients and for the subcontractors who work for us. They want to work with strong companies as well.

5:06 We've got a good cash position. Average month end cash is £158,000,000 Bill and I focus entirely on that average month end rather than the year end position. It's much more illustrative of the overall state of the company. And importantly, we've got no debt. We've got no pension liabilities. And also, we've got no supply financing arrangements. So that is a really clean and strong balance sheet position. Importantly, as well, through that cash number, although that's grown in the period showing good cash generation, we've also improved our payment performance to our supply chain. And that's really important to us. Dealing with the supply chain fairly through the COVID disruption is important to bring that cultural alignment and bring that supply chain closer to the business because that's so important for us in delivering our objectives.

5:52 And finally, you can see on the slide, our PPP portfolio is valued at £44,000,000 This is a portfolio of PFI assets, and that generates for us interest income returning about 8% to 10% to our bottom line each year.

6:08 And Bill's mentioned the reinstatement of dividends. So pulling the strands together of the strong balance sheet, the encouraging trading in the period, our quality order book and the outlook and the fact we're trading in line with our targets has given the Board the confidence to do two things: firstly, to reinstate the dividends and secondly, to improve the dividend policy. And we've done that by improving the dividend cover from previously 3x earnings to a range of 2x to 2.5x. And we've also said that we will keep that under review as we go forward to see if there's opportunity to reduce that cover further. And as a result, you can see the interim dividend declared of 1.2p per share. Great. Thanks, Andrew. So this is just a reminder of what GALLIFORD TRY is about. Our purpose is to improve people's lives by safely and sustainably constructing the social and economic infrastructure that communities and, of course, the country at the moment needs. And in going about this, we aspire to be a people orientated, progressive values driven business that predictably delivers for our stakeholders.

7:16 This is an overview of our business model. We have our purpose there on the left, which I've just gone through. And we approach the market with the philosophy of safety in construction, safety in use, of course, very pertinent at the moment, particularly delivering high quality projects to repeat clients with a strong focus on risk management, commercial management and modern methods of construction. Over there to the segment section, we focused on building an infrastructure with 90% of our revenues through the public and regulated sector frameworks and the remainder with blue chip private clients. And all was an aim towards generating cash and margin to fund growth, return value to shareholders and of course, to society through the social value that we generate.

8:03 ESG sustainability runs through everything that we do. We have a code of conduct simply called Doing the Right Thing that provides guidance to all of our staff and our supply chain. I'll just speak on some of these statistics here. The top one is safety. The safety of everyone on our sites is absolutely paramount in everything that we do. And I'm really pleased to see our AFR, accident frequency rate improve again to 0.06, which is a very good performance in the industry, notwithstanding the fact, of course, that we aspire to zero on that line. And we work very hard in pursuit of that goal. We measure our scope one and two carbon emissions. Those are those emissions that we can control directly. Our cars, for example, our our our buildings and so on. And we're working hard on understanding and getting better at monitoring the Scope three emissions, which are embedded and whole life carbon emissions from the project we build.

8:59 We're busy developing our whole sustainability strategy alongside the broader corporate strategy, which we'll publish later on in the year. Moving on to our markets. Our markets remain resilient. And as Andrew said, it has held up well through the pandemic. We expect the government's leveling up in zero net carbon objectives to underpin growth in the construction sector over the medium term. The medium sorry, the recently constructed construct recently published, apologies, construction playbook,

9:33 is in essence a far more mature approach by government as to how they approach construction and building a more sustainable way of contracting through public sector procurement, which we welcome, which which plays well to our strengths. Our building order book you see there is GBP 2,000,000,000 and the constituent parts of it are on the left hand side there. All of these sectors continue to provide a robust pipeline of work with the Education Schools Funding Agency, DIO, the Defense Infrastructure Organization and the NHS, our biggest clients. And our order book there at GBP400 million has grown organically in the period. Thanks, Andrew. Infrastructure, we also have a very resilient sector here. The order book stands, as you can see there, at GBP 1,300,000,000.

10:21 And we have excellent framework positions with Highways England and various local authorities. We've just been awarded last week a GBP 48,000,000 scheme by Lincolnshire County Council following the successful opening

10:32 of our Lincoln Eastern BiPros product project before Christmas. And then in environment there, we have two further frameworks with Thames Water in the period and anticipate further framework awards in the sector by the end of this full year. Excellent.

10:51 So these markets provide an order book which stands altogether at £3,300,000,000, up a 100,000,000,000 a 100,000,000. Sorry. A billion. That's last minute. A 100,000,000 on the previous period. 87% of this is in frameworks in the public regulated sectors, broadly similar to the previous period. And the private sector you see there is probably PRS, private rental sector, and student residences with some commercial office buildings as well. Our disciplined approach to project selection and risk management is reflected through the order book you see there in terms of its future client base, sensible terms and conditions, embedded risk profile, embedded cash, things like that. And so the order book quantum and the duration of that order book is what really underpins our strategy. And it highlights the importance of our strong framework position.

11:40 Most of this year's revenue is secured. And as you can see there, we have 76% of next year's revenue already secured, which is a good position to be at this time of the year. So here's a bit more detail on our risk management process, and this underlies our order book and everything that's in it. So what happens is our business unit managing directors review potential tenders using a defined process to identify any own risk contract conditions or risks. And if any of these arise and if the b b u still wants to proceed,

12:12 then the project comes to an exec meeting, which we meet monthly to look at these bids and decide whether the bid can progress or not. If it does, we'll either then stop the bid or allow it to progress on strict sort of risk mitigating parameters. But the really important thing here is that the culture of the business has evolved to the point where very few projects will come up to the exec now because the business units reject them on the basis of a poor risk profile before they get anywhere near us. So it's really working well in that regard. And then the bottom line there, commercial control and reporting. Once we're in contract, we have robust project controls to manage and overview the project forecasts. And in addition, we have a system what we call commercial health checks, whereby operational and commercial directors from another part of the business spend a couple of days on another region's project to to review that project, the forecast, and to give their view on the likely outcome.

13:10 And again, I'm pleased that the culture of the business means that these health checks are now welcomed by the receiving site, and any recommendations or observations by the visiting directors are taken seriously and acted upon and reflected through the forecast. So this is really working well for us overall. So putting all this together, what we mean by the long term or sorry, the medium term KPIs here, the third column, These are unchanged apart from the previous period, apart from the increase in the divisional operating

13:41 margin to more than 2.5%. And that's based on the performance of our current projects. So we're encouraged by our current performance and have raised our sites from 2% to more than 2.5% over the medium term. The revenue range there of 1,200,000,000 to $1,500,000,000 remains valid as we continue to focus on bottom line quality of earnings and not top line revenue growth. Thanks, Edgar.

14:06 And so in summary then, and everyone, we've made really good progress in the half year, which gives us confidence in the longer term performance of the business. We have a really strong balance sheet, no debt, no pension fund liability and an excellent order book, which I've just described, with all the attributes that we need for success. We're really happy to return to profitability and return to the dividend list with a more generous dividend policy. Overall, our markets are supportive, and we're on track to meet our full year targets and confident for the future. So that was a quick overview of the presentation, everyone, and we'll now move on to take any questions. That's very kind of you. Thank you to Bill and Andrew. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the company take a few moments to review investor questions submitted already 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 your Investor Meet company dashboard.

15:02 I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations. Andrew, Bill, thank you so much for the presentation. Obviously, investors had the ability to pre submit questions in advance of today's meeting. We received three questions I'd like just to perhaps start off the Q and A with. The first question, and if I hand over to you guys to pick up, given the impact of COVID, does the market present any M and A opportunities to accelerate your growth?

15:38 Well, we're not looking at any specific M and A opportunities. I think COVID has from an industry perspective, what happened through COVID is that the whole industry was very focused on on keeping the industry on an even keel. So it was all about cash flowing through from tier one clients and particularly government through tier one and making sure that the tier one contractors continue to pay their supply chain. And that way, everything is kept in an even keel and gives the industry the ability to bounce back. So that was coordinated by the construction leadership council in liaison with with the cabinet office of pays and

16:17 has succeeded very well, actually. So actually, you know, the balance sheets of most of our supply chain are are reasonably robust, and there's been no specific opportunities for m and a that comes out of the back of COVID. I think that's the answer there. I think that's right. And we would always focus on m and a, which is in line with the strategy that Bill's Bill's outlined Yeah. As as opposed to m and a for its own sake. It's about m and a, which fits our strategy of bottom line quality growth. Yeah. Perfect. Thank you very much indeed. The second question we received was how do you see future infrastructure spending driving revenues? And what is the sales cycle into such projects? Well, the infrastructure pipeline is very robust. Today, I'll put the slides in. Of course, we don't address the whole infrastructure market. We very concentrate on roads or highways and environment, which is predominantly water and wastewater.

17:10 So those pipelines are robust. The water companies do the five year or six year in Scotland regulatory period, and that's a robust pipeline.

17:19 And in Highways England and local authority roads, again, a very robust pipeline. I mean, Highways England's got some £27,000,000,000 in in their budget. So that's all holding up well. The cycle, you know, roads less lesser water, but roads have quite a long sort of gestation period. The roads that we are involved in, we've got a few on the ground of course, but we've got a further six roads project that start up in the next sort of six to twelve months on the ground. So we're working on those. You've probably had those in the books for best part of the year already, I'm guessing. So they have quite a long gestation period to get through the whole statutory approvals process and then the final design and into contracting. So the cycle is does have a bit of a lag, I suppose, in it, but that lag is really built into the order book. I might just add as well on I mean, that's very much on our infrastructure market. Of course, the our building market is still heavily based on public spending in terms of education, defense, health care, as Bill has touched on.

18:17 And typically, those projects will have a shorter gestation period, quicker to ground. So new primary

18:21 schools, secondary schools and so on can be to ground and completed over a shorter period, perhaps a sort of, yes, six, twelve months lead in and a kind of eighteen month build program. So a shorter sales cycle in the building business. That's great. The final question that was presubmitted was what do you see as the optimal level for margins?

18:46 As high as possible. No, I think people talk about industry standard margins of sort of between 2.53.5%. And if you've been around a few years ago, that language has moved quite a lot. It's moved from two to 2.5 to three, and now the range that people are talking about is 2.5. I suppose 2.5 to three is the most is the normal. What we've said is more than 2.5. So that's what I think the answer is. And I think it's that is achievable with the risk profile that we're looking to achieve. So that's the balance. It's about making sure we get sufficient margin without pricing ourselves out. That's right. But making sure we get the right margin commensurate with our risk profile. Bill, Andrew, thank you very, very much indeed for that. So that takes care of those that were presubmitted.

19:31 If I could ask you both to just select the Q and A tab, you'll see investors have submitted questions throughout the presentation. Could I ask you possibly to read out the question and where appropriate give a response and then I'll pick up from you at the end? Thank you so much. Yes, we'll do. So I'll read out the questions and then Bill or I will

19:49 both we'll do our best to answer those. So the first question is what do we think sets us apart from our competitors when tendering for contracts?

19:58 And what do we see as the greatest risk to the business moving forward? I mean, when it very much depends on the client, but most most clients and most of our clients in the public and regulated sectors, and indeed, with the future private sector clients, are very focused on quality. So they look at the quality of our people, you know, what team is gonna build whatever they want built, and and do they have the right culture, the right track record, the right experience, etcetera, etcetera. They look at the strength of our balance sheet because our clients want comfort that the companies that that choosing to construct whatever it is they're building is gonna be around to see it through. And that's really important, by the way, in terms of our supply chain as well because our subcontractors also want to work for companies with strong balance sheets that they trust.

20:45 And then it's about how long it's gonna take and and the actual physical proposals. And I would say that typically,

20:52 clients are looking at probably 70% of their of their appraisals based on the sort of quality questions, people, track record, balance sheet, specific proposals for the project, and probably 20% or 30% on the commercial, of which there's terms and conditions and all sorts of other things. So I think that's what sets us aside, our people, our culture, our balance sheet. And should I pick on the the risk of business going forward? I think for me, there's probably two two things to raise in a similar vein, of course. One is people, and and the other is is the the right order book. So by people, actually, we need the right people right through the organization. We spend a huge amount of time investing in early careers, that's graduates, apprentices and trainees, and in developments of our people throughout the organization, developing their own skills and so And just to give you an example, through the COVID disruption, we spent a lot of time on well-being. So as well as the physical safety on-site, we spent a huge amount of time on well-being, helping people to work through these unusual situations. So make sure we keep the right people. And then in terms of order book, making sure we've signed the right contracts, bring the right contracts into the order book because if we

22:03 lose our discipline in that, then of course, what that does is that undermines our projections going forward. So keeping our discipline and keeping our good people outside of it are critical to moving forward. Yes. So moving on to the next question. What can we expect with regards to new business coming through post pandemic? And how can we flex the business to take advantage of

22:25 this? I think that our pipeline is pretty much the same as it has been. As we said, we're very focused on the public sector and the regulated sector. Those pipelines are pretty consistent, and we don't expect them to change. In fact, we see a gentle uptick, think, which is good for us, by the way. A massive tsunami of new work isn't good for anybody. A nice gentle manageable uptick is far better for the industry and for us, obviously. So I don't think there's any going to be any particular change there,

22:53 personally. Okay. And then very similar, other new market segments we're looking to expand into and how does our current order book convert into contracted work. Let me just cover off the second of those first. So the current order book is contracted work. Behind that order book and outside of that $3,300,000,000 there is a pipeline of other work that we are currently tendering, which we will look to convert to get that contracted and then that will come into the order book. So the order book is work that will be delivered on the ground. I think in terms of market sectors, we are very happy that we are in the

23:24 right market sectors at the moment: education, defense, health, commercial space, highways, water. And of course, we regularly keep that under review. We're very satisfied. Those are all markets with good growth opportunities at the moment. Okay.

23:39 There's a couple of longer questions here, which I will just take in part, if that's okay. So first of all, perhaps just tell us how we intend to improve margins over the medium term. Yes. So margins look, the basis of good margins is all about having the right jobs in the first place. And hence, our focus on risk management in what we do and as always say, more importantly, what we don't do. So so once we get the order book to the stage where we have got it now, where everything in that order book is the type of work that we can do day in and day out, we've got the people, we've got the experience, we've got the supply chain, we can do that confidently. And and while I'm saying there's never gonna be issues in construction because that wouldn't be correct, the magnitude of those issues will not be material across our portfolio of 200 to 250 odd projects. So some will be slightly up and some will be slightly down, and most of them will be in a pretty narrow band. And that's what we aim to achieve, predictability with no surprises.

24:35 So so so that's the first thing about improving margins. The second thing is about people. So it's having the right people with the right skill sets, right culture, the right attitude. We spend a lot of time on bringing the right people into the con company, inducting them properly, training them properly, and put a huge focus on on sustainability, obviously, and also around project management and commercial management skills. Then we've got a relationship with our supply chain, which is really important. So it's called advantage to alignment that gives our supply chain, the biggest supply chain partners, access to our pipeline, access to our training, and brings them closer to the the company in terms of culture and in terms of aptitudes. So that's really important. And then all of these things go together with safe, efficient delivery, modern mess of construction, the use of digital platforms, all things like that to to come around the circle and and to for us to deliver high quality projects on time to satisfy clients.

25:33 That's how we raise our our our margins. So there's no rocket science in all of that. There's lots of attributes to it, of course, but it's just good solid growth. Thank you. And in terms of our carbon footprint, perhaps just an example of how we're looking to reduce our carbon footprint. I mean, there's there's lots of different parts of carbon. Of course, scope one and two carbon emissions are about the the emissions that we can control. So for example, in this building, we we have a green energy tariff. Our company car fleet, more than a thousand cars. We're busy greening that fleet by having more and more electric and hybrid vehicles and and and heading towards 40% of that fleet now is is pure electric or or hybrid. And that's a good example because a few years ago, our our emissions average emissions across the fleet were a 133 grams of carbon per kilometer.

26:21 That's now something like 86 grams of carbon per kilometer and we forecast it being 35 grams of carbon by 2025. So that's really good in terms of driving carbon out of the business, it's also good in saving money because we're

26:35 also saving hundreds of thousands of pounds in petrol and diesel costs by moving to electric electric vehicles. So that's a good example of driving carbon and cost out of the business. And then scope three emissions are are the more difficult ones to be frank. It's it's the embedded carbon in the buildings that we build and the whole life carbon performance of those buildings. But again, we're working hard on that, and we're very supportive of the government's twenty fifty targets. A couple of examples, we built two nursery schools up in Scotland recently. One was built to a very green standard, passive house standards, and one was built traditionally. And we're looking at measuring the embedded carbon in both of those buildings and then the the the operational carbon that each uses to get a a good idea of how they actually perform in real life and and obviously look for areas to improve.

27:25 Okay. And then actually, this question links to the previous answer around what measures we're undertaking to improve productivity through the use of new technology. Yeah. Well, we certainly do that. I think we I don't think I know we we sit in the forefront of BIM in the in the building industry in in in The UK. We use virtual reality in a number of arenas. One really important one actually is safety. So we've we've got a whole we've we've made a whole lot of three d short films, whatever description, in various environments. So a rail environment, a building environment, a road environment, and so on. And we use these from a safety perspective to induct people onto our site. So the the people can put on their virtual reality glasses and be transported as it is into a a three d highways project, and all sorts of stuff happens to raise their awareness of the potential hazards on our site.

28:18 So we use that sort of technology for safety. We use, you know, building information modeling, three d modeling, class detection, all these sorts of things, how we design our buildings. And the technology is fantastic. Now you can put on the glasses again and walk through these buildings now to and and and, obviously, our clients like that so they can see what they're getting, but we also use it very practically to look at where things are, the layout, etcetera, etcetera. So so, yes, we certainly do a lot of pretty high-tech stuff for us in the business. Yes. No, I agree. And then finally, I'll cover this one I'm sorry, finally, this particular question. Could I give a brief summary of why investors should consider looking at the company now? I think probably I'll give you four reasons. The first is the markets are very strong at the moment, the tailwinds across from government, across all of the sectors that we've talked about. There's huge opportunities in those markets at the moment.

29:13 Secondly, it's really about our discipline and risk management, and Bill's talked about this a huge amount. But this is about us making sure that we are bidding for the contracts, which we know we can deliver and then delivering those and managing those properly through the organization. I think the third one is about the balance sheet strength. And the balance sheet includes both cash and the PFI assets, which are included on that balance sheet. And those are good quality liquid assets if we wanted to trade those in the secondary market. And then finally, the fourth reason, really about the growth opportunity. So our revenue will grow. Our bottom line margin will grow faster. And then with the dividend cover, our dividend will grow faster still. So actually, there's real opportunity for investors coming in. Moving on. So the next question is, have we completed the rightsizing of the overhead since the transaction?

30:02 The simple answer to that is that we have, of course, there's a little bit more to do as we look to change our office footprint and move to more efficient and cheaper offices. But we have right sized the organization, but we continue and continually focus on overhead to make sure that our overhead stays at the right level. I think we've covered the next question, which is confidence that our margin targets of 2.5% are realistic. I think we've largely covered that. The question does ask about the split of revenue between public and regulated sector and whether that will carry on into the delivery rather than the order book. And I think the answer to that is that it does. So our order book and the actual percentage of revenue that we trade are very similar in terms those percentages.

30:49 The third question, Bill, I assume there's no cladding issues identified from building divisions past work. Well, obviously, in the light of Grenfell, the morning after Grenfell, we disassembled a task force to look at this very issue. And there were a few small issues which have been sorted. There's there's one building left that is currently being the tallying is being this this composite tallying is being taken off and changed. That's being paid for by insurance, actually. That's the only one we have. Yes. And then final question from this questioner is how many analysts are following the company? And is it only company appointed brokers? So we currently have three covering analysts plus Capital Access Group who provide summary notes as well. And they are not all company appointed brokers. So for example, Liberum write on us, and they are not appointed by the company.

31:44 Okay, next question. If we were to look to raise funding in the future, how would we make sure that shareholders are given a fair opportunity to participate alongside institutional investors? Perhaps I'll answer that, Bill. So we have no plans to raise funds. Our balance sheet is very strong. As we said, we've got cash position of an average cash of £158,000,000 at month's end, plus we've got £44,000,000 PFI portfolio of assets on the balance sheet. So we think that sets the company well and strongly for the future and for our plans. And actually, that also gives us the confidence to return capital through our dividend policy. So we are not expecting to require additional funding in the future.

32:29 Of course, if that were to change, then we would absolutely make sure we did that on a fair basis. The next question. Could you tell us what your average payment time is to suppliers and how this has changed over time? So and yes is the answer. So our average payment in the last six months was we paid 92% of our invoices within sixty days. Our average payment days were across our tool. We've two entities. It was just under forty days across on average across the two companies. What's really important is our supply chain value is treating them fairly and paying when we said we'll pay. And we're in the certainly upper quartile in terms of paying two terms. So that's setting the expectation and paying in line with that expectation.

33:24 Those numbers that I've just referenced have improved. So our average days to pay have reduced by two or three days over the last six months. And our percentage of invoices paid within sixty days improved by from 86% to 92%. So really strong increase in the number of invoices being paid within sixty days. And we expect that to improve further during 2021. That's very important for us. We're spending a huge amount of time on improving our processes. So we will continue to make sure we pay the supply chain fairly and on time. Bill, Andrew, I think that's pretty much most of, if not all, of the questions that have been submitted by investors during the call today. And thank you to everyone that has taken the time to submit questions, both ahead of the event and during the event. Obviously, we'll publish these questions. We'll transcribe them and make them available to investors, and you will receive an e mail from us notifying you when they're ready. Perhaps, Bill, Andrew, I could just ask you for a few closing comments. I know investor feedback is important to you. And of course, we'll divert investors to give feedback after you have closed. Thank you.

34:35 You. I've enjoyed the session, and thank you to everybody for joining. I think it's been good, and the questions were good. So thanks very much, and keep safe, everybody. Thank you. Thank you very much indeed. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide feedback. If you access this meeting from our website, the feedback page will appear. But if you access this meeting via the link sent to you via email, you'll simply be asked to log in, to submit your feedback. If you could give the company your thoughts and your views and expectations, I'm sure they will be warmly received. On behalf of the management team of GALLIFORD TRY, we'd like to thank you very much for attending today's presentation. That now concludes today's session. Good afternoon to you all. Thank you once again.