Hercules (LSE:HERC) — Full Year Results

0:00 Good morning, and welcome to the HERCULES SITE Services PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated at the right hand 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, company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you up to Bruce Cork, my CEO. Good morning to you, sir.

0:29 Good morning, Alessandro. Thank you so much. Good morning, everyone, and thank you for everyone's time today meeting us. As you might have already seen from our announcement this morning, we had a fantastic year. Just to summarize, our year on year turnover increased by 71% to £84,700,000, and our year on year EBITDA increased by 79% to £4,100,000 compared to year ending 2022. In today's presentation, we will talk about our performance over the last financial year, and we will also share our future graph growth plans with you. Just to give you a brief introduction for our company, HERCULES PLC is a technology enabled labor supply company operating in the infrastructure sector.

1:22 Next slide is the disclaimer, and our third slide is about our board and our board members. I am Bruce. I'm the CEO for HERCULES, and I'm joined by our CFO, Paul Wickroft. Hi, everybody. As you can see from this slide, we have a very strong and well respected board with both exec and nonexec directors with great blend of experience in infrastructure, financials and banking, sales, PLC, governance, and even starting and running an aim listed company. Together, we believe that we can grow HERCULES even further. Next slide, please, Paul.

2:01 As I mentioned before, we had a fantastic 2023. Our revenue for the year ending 2023 is £84,700,000, which is 71% increase in comparison to year ending 2022. Our EBITDA is £4,100,000, and, again, the increase is 79 percent in comparison to last year.

2:23 And our EPS is 1.27p, which is a 119% growth in comparison to 2022. As you can see, we had a really busy and very successful year. We have been achieving record numbers since I started HERCULES sixteen years ago. Obviously, we weren't public listed then. However, being on the AIM market has helped us to accelerate our growth for the last three years. Our year on year growth for 2021 was 43%, in 2022, 51%, and in 2023, 71% accordingly. We have seen growth across all of our divisions With regards to our labor supply arm, which is our core business, we had a great year also. We achieved £63,000,000 in revenue and increased act activity across all sites, including the H s two Birmingham section, highways, and water projects.

3:21 With regards to our construction services division, our revenue is £20,000,000, and this is mainly due to delivering works in the water sector for the AMP seven. That is asset management program seven. As you are aware, there are huge issues with sewage being spilled into the rivers and into the seas. Therefore, we have been really busy working for TAMs water and Angling water projects. It does seem that the next AMP, AMP eight, starting next year will also be hugely busy for us. As you're aware that there is a a skill shortage in The UK, and it is important for us to have a sustainable approach, which is finding local people for local projects, putting them to work, and upskilling and and cross skilling our workforce. We also want to monetize this opportunity as well.

4:08 Therefore, our training academy plays an important role in the sustainable approach. In 2023, we have completed our HERCULES construction academy, and we'll be launching our academy officially on the January 31. It will be good to see you all there at the opening, obviously, if we can make it. So please get in touch if you decide to join us as we can send you an invitation. And finally, in 2023, we have been concentrating on strengthening our relationships with our blue chip clients such as Balfour Beatty, Costain, Gulliver Tri, and Vinci delivering more work for them. Next slide, please, Paul. The the next slide is about our Hercules' business overview. On the right of this slide, you can see some of our blue chip clients we work for in the infrastructure sector.

4:58 As I mentioned before, we are mainly a labor supply company working for the blue chip infrastructure companies and complemented by our construction services division. Our labor supply is our core business and is significant part of our company, which currently contributes to 75% of our turnover, and this percentage is still growing. We have been supplying labor into UK's highways, rail, utilities, energy, and other infrastructure projects. Under the construction services division, we carry out civil projects in the water industry, and we also hire out our suction excavator services under the same umbrella. The biggest USP we have got is that we can supply all of these services by cross selling opportunities to our clients under the same umbrella.

5:47 Our clients prefer dealing with only one reputable supplier, who is in this case, HERCULES, rather than dealing with different suppliers as it is more efficient and less paperwork involved for them to do so. Having our construction services division and our cross selling opportunities help us to also help us to retain our clients as we have a high retention rate with our clients that we started working with sixteen years ago, and we have been adding on to this list every year. Next slide, please, Paul. So this is the group statement. Sorry, Paul. I think we are missing the we are missing the graph. Yeah. It's it's it's not there, Bruce.

6:34 Okay. I don't know why. Oh, there it is. I'll I'll I'll jump back. It's out of order. You carry on, Bruce. Thank thank you. No problem, Paul. Thank thank you so much. Sorry about that, guys. As you can see from this slide, we have a very strong growth history. As I I set up HERCULES in 2008 from a family spare bedroom. Since then, we have been growing every year. You can also see from this slide that there are several milestones that we have achieved over the last sixteen years. Just to mention some of the significant milestones, winning the HS two labor supply framework in 2022 for Birmingham section with Balfour Beatty and VINCI joint venture. At the beginning of February twenty twenty two, we listed HERCULES on the AIM market, and this is a major milestone for us. We are very excited about being on the AIM platform, and we believe that this will enable us to grow as we have ambitious plans for the next part of our journey.

7:31 As you can also see from this slide that our revenue has been growing since we started in 2008 apart from the COVID year. And as as I mentioned before, the last three years, we grew 43% in 2021, 51% in 2022, and 71% in 2023, achieving £84,700,000 in revenue. Since the end of the financial year in November last year, we have acquired FutureBuild Recruitment. They are an excellent and high performing company operating in the white collar recruitment in the construction industry. This will add significantly to our HERCULES' exposure in the white collar sector for the infrastructure and construction industries.

8:18 As you can see from the from the top right top right corner, there's a there's huge investment being made in rail, nuclear energy, and renewable energy, and the water sectors as well, and we are ideally positioned to grow even further for the next twenty years. Next slides are yours, Paul.

8:41 Yep. So, group statement, guys. So you can see from here three columns, how our results have, changed from 2021 through to 2023. I think the first obvious point is, and apologies for saying it again, but our revenue increased 71%, you can see, from 49,500,000 in twenty twenty two to eighty four point seven million in 2023. Our EBITDA, adjusted EBITDA increased 79% from 2.3 to £4,100,000. Earnings per share at the bottom of the screen, that's a 119% increase from naught 0.58p to 1.27p.

9:30 So, a very good year, whichever way you look at it. Our continued growth coming through loud and clear. Very, very busy business. We're all very proud of what we've achieved. I'm looking forward to to doing greater things in the future. This is, focusing in on the labor supply division of the business. So we've, had continued organic growth. We've got a very strong project pipeline. There is a huge amount of investment going into the infrastructure sector. And because of our fantastic relationships, that Bruce was alluding to with our blue chip clients, we we do very well out of it. They always come to us when they get more projects.

10:17 We know what their pipeline is. We know we're going to be on those projects. Great news. The rail division was something that we created very recently, in fact, a few months ago, because we won a contract with, Balfour Beatty Rail. We've also moved towards a white collar recruitment division, and Briska's just mentioned the acquisition of of a a future build. We've also won with won contracts with new clients. I I just mentioned the rail business, but Galliford Tri, preferred supplier list, and Octavius are some notable new client wins within the year. You're probably aware that we're on the HS 2 Birmingham section, and we have been for some time now. And even though we're one of six labor suppliers, we currently supply around 25% of that blue collar workforce. So we're doing incredibly well there.

11:13 On all our sites together, we've currently got over a thousand people, which compares, favorably to the 750, we had around the same time last year, and that's growing every week. Again, you may be aware, but we've got a couple of apps. One of the app, is a recruitment app, which we've now got 12,000 people registered on that recruitment app. Again, 8,100 last year. So, that that's an incredible change. We've also got another app called the, onboarding app, which means we can get people, onto, on onto sites and working, without any paper or or digital. We've now got I think we've processed 3,000 people or more now since we, since we introduced that onboarding app. We call it our one team app, and that was 1,200, at the same time last year. So, again, that's really now becoming the way we do business, which is great.

12:15 Finally, we continue to upskill and cross skill our operatives, which is very important. Every three or four years, everybody that we employ, needs to be retrained. You don't just have a have a certificate forever. So this is how we approach the business. You can see that the labor supply revenue has increased from 33,000,000 to 63.8 and a a more than doubling of the operating profit in that time as well. So fabulous result. And this as a reminder, labor supply is our core business. Construction services is about 25% of our business as as you saw from the pie chart recently. And you can see we've got a healthy increase in that from 2022 to 2023.

13:05 In fact, 29% all told. Couple of things have have made that growth happen. The AMP seven asset management program, which continues up until April 2025, has been incredibly busy. You'll all be aware of the the issues in the water sector, water and sewerage sector. And we will work, really in the end for Thames Water, Southern Water, and Anglian Water, etcetera. And they are very, very busy, which is making us very, very busy. All good news. So the construction services element is of the business is broken down into civil projects and suction excavator services. The civil projects revenue increased from 12.4 to 15,700,000 in the year, and the suction excavator revenue increased from 3.6 to 4,900,000, and partly due to the fact that we almost doubled the fleet. We we got an extra 14 vehicles delivered in the second half of the year, which was important because it was the point at which the super deduction was going to the chancellor's tax benefit was going to be removed. So it's important that we got them in just before the end the end of the first half of the year.

14:32 And we've been spending the last six to eight months, getting them up to speed and getting them added to the fleet, and increasing our revenue accordingly.

14:43 A word on the balance sheet. Interestingly enough, our cash, has increased significantly from where it was a year ago from 1,200,000 to, £4,100,000. This is, for a a number of reasons. We did have a 1,600,000, share issue, earlier in the year, But the the main part of the change is that we've done incredibly well, with our our debtor control and improved that significantly. I'll mention a bit more about that on the next slide. Again, I also mentioned about the 14 suction excavators. They're all that that came during the year.

15:28 They're all financed by conventional asset finance. Therefore, the lease liabilities have increased due to those 14 arriving. They won't we're not currently planning on buying anymore. Our view is that we need to make this fleet quite, you know, really, really sing and make it super profitable. So those lease liabilities will now start to come down from the peak they've now got to. Finally, putting that into some numerical context, putting the invoice discounting debt and the asset finance debt together, that increased from 13.4 to 24.9. That's mostly the suction excavators, but also a a slight increase in the invoice discounting level included in that as well. And for those who aren't familiar with it, because we pay our people weekly, and we invoice our clients monthly, and they're typically on average forty five to fifty day terms.

16:28 That means we need constant working capital to address the market. And we've got a a new facility, which I'll tell you about, imminently.

16:38 Moving on to cash flow then. The real change here is that whereas we absorbed 5,300,000 cash in 2022, we generated 3.8 in 2023. So that's a a complete turnaround from where we were, and it was very important as we grow in the way that that that we have, that we're able to to manage working capital in that way. We're very pleased with that. It's a great result. All the team have been involved in working with clients to make sure that we control debtors. And you can see here that debtor days reduced on the labor supply, which is the, as as I've said, is the primary element of our business, reduced from 75 at this time last year to to 40, ending the year.

17:27 A lot of that was due to to issues with with one or two clients who were new sites where they needed to get their systems up and operating. And we've well and truly worked with them to get that so that, it all works very well in a streamlined way, and you can see the results reducing that down to 40. I mentioned the fundraise we did in spring twenty twenty three. That was 1,700,000 gross. And, again, people who are familiar with our dividend policy, we paid naught 600,000 out in dividends in the year compared to a a lower figure of naught 400,000 in the year before.

18:09 What's happened post period end? Well, you've already heard us talk about FutureBuild. FutureBuild is a white collar construction business, and it's one area of of the infrastructure sector that we've not been able to break into in the way that we would have liked to. We found these guys. They're great guys, Simon and Richard. They have a business that's based in Brighton, currently employing 16 experienced consultants. This is our first acquisition, and it shows, or or indicates, should I say, how we have an acquisition based policy for the future, and this is how we're going to develop our business overall.

19:01 White collar, we think is we've we've dabbled in it in the past, but, Nate, we now wanna get into it seriously. What why future build? Well, their client base is completely different to ours. There's no crossover with clients. They have a lot of high end residential and social housing clients, but they've built these relationships over ten years, and they're very hungry guys and and ready to go.

19:26 So we're looking for cross selling across those clients, and looking for some growth in the business from them in the years ahead. I also mentioned earlier on, how important, funding growth in working capital terms is. We actually negotiated a new invoice discounting facility with IGF Business Credit in November. Now that's a £15,000,000 facility to help fund our continued organic growth and working capital needs. Now Russ spoke quite a bit about the, construction academy, earlier on, and this is really important. Why is it important?

20:12 It's because there is a skill shortage, and there will be further skill shortages because there's an awful lot of work and you need people to be able to do the work. We knew this a year or two ago, and we started a period of development and refurbishment refurbishing a site in the Neaton, which is in the middle of the HS 2 Birmingham section. And that site is now, now finished, and it's now operational, and its official official opening is the January 31. And we hope to see as many people there as possible who who would have an interest in this super facility. So we need to impact this skill shortage. People like steel fixers, etcetera. We need to tackle it head on. The industry needs it to develop to to deliver on these, on these huge projects. The country needs it.

21:04 But we're not just doing this for the for the sake of it. We think we can get develop a new income stream from this by selling this specific training to clients across the infrastructure and the construction industries, but to colleges, etcetera as well.

21:23 Bruce. Thank you, Paul. This slide is about our current trading and our current outlook. We had a a fantastic start for this financial year also. Strong momentum has continued across all divisions into quarter one of financial year twenty four. Infrastructure remains buoyant with £650,000,000,000 of investment earmarked across our main markets where we operate, highways and h s two and other rail infrastructure projects. The next AMP, AMP eight, where we are operating in the water sector, has a committed investment of £98,000,000,000 over the next five years, which is nearly double the amount of £51,000,000,000 for the current AMP seven asset management program seven.

22:13 Network risk, c p seven investment plans of £44,000,000,000 investment into rail network will be from this April over the next five years. As you are aware, in 2023, we established our rail division to supply labor in the rail industry, and we became a a framework supplier to Balfour Beatty Rail. So we are well positioned to maximize our revenue and profits. As you might have already seen recently in the news that the UK government committed to major infrastructure projects throughout '24 2024 and beyond, including further investment in the nuclear energy such as Seiswell Sea in Ipswich and Iwilfa in Wales. We are a strategic labor supplier to Balfour Beatty, and they have been awarded the project in to deliver £30,000,000,000 worth of works.

23:03 Balfour Beatty are already in touch with us about this project, and we believe that we'll be mobilizing on-site in the second part this year.

23:12 As you have seen from the list of these investments, we are well positioned in the market to further grow over the next twenty years. Next slide, please, Paul. And this is our final slide. As you can see from this slide, we have a we have multiple growth opportunities for our future. We have been growing across all divisions through a strong pipeline of projects into financial year 2024. There are billions of pounds of investment being made in the nuclear energy, rail, and renewable energy sectors. Therefore, we are strategically moving to these sectors to supply labor and white collar stuff to bolster our growth. A partnership approach will help us accelerate our labor supply growth following the future build acquisition.

24:00 We lined up a couple of partnerships to start in 2024. With regards to our m and a activity, we are already talking to identify acquisition targets in the labor supply sector. And finally, as I mentioned previously, we are opening our construction academy on January 31, and we wanna upscale and cross skill our workforce to future proof our growth as well as we wanna monetize this opportunity by selling construction related training to our clients, colleges, and individuals.

24:33 Yes. This is the end of our slides, and thank you so much for listening to us today. And we really appreciate your feedback, and please feel free to ask any questions. Thank you. Perfect, Bruce. Paul, thank you very much for your presentation. I'll just bring your cameras back up now for the q and a. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab, which is situated on the top right hand corner of your screen. But just while the company take a few moments to read those questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As you can see, we received a number of questions throughout today's presentation. If I could just hand over to you, Paul, just to read through those questions, that'd be great. Thank you very much. Okay. So the first one is is one that we've, we've answered before.

25:20 Even though the situation is the same, it's the same, answer, so to speak. Why are our shares crashing? Is it worries about a fundraise? If not, why?

25:32 Shares have been at the same low level since I think it was around February, March of last year when we did our our fundraise. What why did we do our fundraise? We did a fundraise because we needed working capital for the business. We did it at a time when the share price was very high. They told us the brokers told us that the market required a 20% discount to to raise that money to buy those shares. I think the shares at the time when we made that decision were 55p, so we expected to do it at 45p. And and then our shares went up to 73p. As soon as the fundraise was was completed, the share price went down to 45p.

26:17 That's just the way the market worked. It was disappointing. But at the moment, nobody will do extra funding without a discount.

26:27 And now since then, of course, we've had everything going on in the world. We've had a very, very depressed AIM market and and stock market in general, and that's reduced the share price further. It's nothing it's nothing to do with our results. As you can see from our results, our results are fantastic. They have been for three years. We're in a depressed market where the market's affected by the Ukraine war, by the after effect of debt and from COVID, etcetera. All of these things are and interest rates and inflation, they're all, if you like, depressing the the AIM market. We can't do a great deal about that. What we can do, is work on our results and work on developing the company. And as you can see, that's exactly what we've been doing, and we'll be doing more of it. So, that that's our answer, to that one.

27:17 Not a perfect will, but, hey, we operate in the will that is is not the will that we'd like it to be.

27:25 So, another question here is, about the, why is the finance cost so high?

27:34 It's had a big hit to the bottom line. Well, the finance cost really comes from the purchasing of the suction excavators. So to increase the fleet in the way that we have, to double that fleet effectively, We had to finance those assets. They're all on conventional asset finance. And interest rates at the time when we we we completed and purchased those 14 were probably at the highest level they've been. I think they were just shy of 8%.

28:06 Highest of all the suction excavators that we've got, the ones before that that we purchased, we purchased them about one and a half percent when we started it in 2020. So the commitment was made the year before when the finance costs were, again, seriously lower. Mhmm. But that's a good investment for the future. These suction excavators are profitable, and they they will add add to our our results in future years. So I think in the middle of last year, we we so therefore, we we we got these extra 14. The fleet doubled. We only really started to get the benefits of them August, September, early days on utilizing all of those vehicles. So whereas we've got the interest charges come in the second half of the year, we haven't yet seen the, the boost in profits that will, come.

28:57 Right. So this one's for you, Bruce, I think. The question is, from Ian. What outcomes do you expect from the training academy in terms of contributing to the company's bottom line and addressing industry wide skills shortages?

29:13 Yes. Sure. Thank you, Ian, for asking this question. It is very important for us to have our training academy. In order to upscale and cross skill our workforce to future proof our growth in the future is a massive achievement for us, and we have been planning this for for for a while. And and we believe that because there is quite a lot of investment being made in the infrastructure sector, we need to be able to provide long term employment for our workforce as well as to be able to have our workforce to be to have upskilling opportunities for them to earn better salaries, for them to have a career in construction with us for a long term, we believe having training academics, establishing our training academy is so important.

30:04 We also wanna monetize this opportunity, as I mentioned before, by selling construction related training to colleges, our blue chip clients, as well as to the individuals. With regards to the how the contribution is going to be, the company's bottom line, for the first year, there is investment being made, obviously, with, the people being there. Am I right to say that, Paul, around Yeah. The So I think the fairest thing to say is it's it's a new business. So new businesses, it it's it's uncertain exactly how quickly we'll get this up and running. We think long term is the right thing to do, but how much it will affect this year with only nine months of the financial year from a standing start is hard to say. But we think in in the next year or so ahead, we think we can get to something like, £22,500,000 revenue.

31:02 But, time will tell, and we think that will be relatively profitable, as well. Okay. Thank you, Paul. Yeah. So the, another question from Nicholas is, with such decent figures and prospects, why hasn't there been, an increase in the dividend? Well, I think we've partly answered this already. We've got quite a bit of change coming in this year. We've, we've got, a new business starting. Those new biz any such new business needs some, investment in it. We've got a number of other plans in relation to partnerships, which Bush alluded to on the growth strategy slide, that's going to require, some funding. So, we didn't think it was appropriate, in this year, at this stage, to increase the dividend.

31:53 But we've made it clear our long term policy is to, look to to be progressive in terms of dividends. But at the same time, everybody wants us to grow as well and continue growing in the way that we have been. So I think it's important that we we we utilize some of that cash as you know, rather than give an increased dividend at this stage to help boost that investment. Okay. Right. This is one you you can answer this one, Bruce. From Samuel, do you have any plans to expand internationally? Thank you, Samuel. Great question. With regards to our international expansion, we are not thinking of it right now because there's quite a lot of work coming up in the in The UK, in the infrastructure sector.

32:39 So we wanna concentrate on, so how we can maximize our exposure to increase our revenue and our profits. So we believe that maybe within within after five years, we can we can have a thinking about that. But currently, it's quite a lot of work coming coming in, and and and we believe that we'll be really busy in The UK for the next twenty years. So, yeah, hopefully in the future. Another one for you, I think. Again, I think this is for me. It might be the same, Ian. I'm not sure. Yeah. Do you maintain your competitive edge, and what measures are taken to continuously assess and improve this? Yeah. Sure. Really good question. Thank you, Ian.

33:27 We we are a technology enabled labor supply company operating in the infrastructure sector. So we have got the technology that we have been investing. We've got our apps, as Paul mentioned, so we can find local people for local projects, and we can put them to work efficiently in a paperless process. So this is our edge, really. And so we can move moving quickly quicker than our our competitors as well. We can find people quicker than our competitors because of our edge with with with our technology and digital products. And, again, having a training academy as well, investing in our people is also important, especially there's a skill shortage in The UK as as we have been mentioning it. That is also our edge as well. So we are continually assessing how we can do things differently, and we think outside the box as a as a team, as as people, and how we can improve, how we can have an edge in the in the infrastructure and construction industry.

34:32 Also, having these services as well, suction excavator services operating in the water sector as well as now in the white color as how we can maximize by by acquiring future build recruitment. These also give edge edge as well to us and and give us a unique selling point of cross selling opportunities, all of these services under the same umbrella. Okay. We've now got a question from Marcus. I'll I'll happily take this one. It's the question is, given the 71% increase in revenue and the 79% growth in adjusted EBITDA, how sustainable is this level of growth, especially considering the potential changes in the economic climate.

35:20 Okay. Well, I don't think any of us are starry eyed about this, Marcus. Nobody's expecting stupendous risk increases in in the business every year forever. Nobody will in their right mind would say that. But I think it's worth pointing out that, I mean, you know, there have been that the economic climate's not been good for a few years. We've achieved these levels of growth despite that. The the economic climate and and I'm sure we'll all have a different view on this, but most people would expect now inflation has come down. Most people would expect interest rates to follow soon. And how long the Ukraine war will take and what impact that will have, we don't know.

36:05 But we know that our government and come to that, whichever government is is in power in The UK, will want to ensure that we are energy sufficient without relying on on on anything from the Russian side. So we've that's we don't think there's anything likely to change that we're aware of in a negative sense in the economic climate. We still think it'll be depressed for a while, and the AIM market will be depressed for a while. But there are plenty of people pointing in the direction of an improved outlook for that. So what are we going to do about the business in in terms of trying to maintain the best growth we can? Well, you saw Bruce slide on the the growth strategy. We've made one acquisition, albeit a small one, but it's got potential.

36:55 We're starting a new training academy, which is really important. We're interested in some more partnerships. A lot of those are are being discussed currently. So and, of course, the the pipeline for my clients, is fed by lots of funding from UK government and and and commercial partners, are all going in the right direction. So we're not starry eyed about huge levels of growth, but we're confident that there will be growth and growth for a a good number of years into the future. This is from James. Bruce, do you wanna take this one? How do you expect demand on the HS two contract to progress over the next two years?

37:45 Yes. Sure. As everyone knows that we are operating on the Birmingham section of the HS 2, and there's a committed investment there. And that project probably will take another five to seven years to to to to to finish. And we are we have been supplying on the on this section for a for a while, for two, three years, but that hasn't peaked yet. So there's there's quite a lot of work to to achieve, to complete that, and we have been and we believe that we'll be growing there for the next couple of years. So, yeah, HS two has been a really good good contract for us. And with our apps as well, our technology, we we have been maximizing this by finding local people for for this project and putting them to work. Yeah. It's going really well for us, and and it will it will grow with for the next two years.

38:45 Okay. Now I think, actually, we've got another question from James. I'll I'll I'll take this one. The question is, how has the future build acquisition been received internally and externally? Is the business being rebranded HERCULES? Is there much systems integration to do? So three three questions there in in one. Well, I think it's been received brilliantly. If you if we cover it internally, first of all, our our top management team have been to Brighton. We've met all the staff. We've get on great with them. The two guys who the two main guys who run the business have been here numerous times now working with the team here. We all go extremely well. Very, very good vibe from everybody. So, externally, obviously, these two guys are going around their clients and telling them what's happened, and that's all being received very well. We're already getting a lot more contact about white collar because of because of that. So all good so far.

39:45 At the moment, we're not rebranding HERCULES. Rebranding the company as HERCULES, but what we are saying is it's future build recruitment, a Hercules site services PLC company. And there have been many benefits to to the guys at future build from being part of the of the HERCULES group. In relation to systems integration, yes, there is some systems integration to do as it probably is with most acquisitions, but it's relatively small in this case, and that's something that will be addressed, over the next few months. Right. Okay. We've got another one from James. Brush, do you wanna cover this one? It says, are you seeing wage inflation beginning to ease now?

40:30 Yeah. We believe that the the rates that we are paying and to our workforce is easing off now with regards to the increases that has been happening over the last year or so. And so this is going to help the infrastructure industry to push further further along with more projects coming in. As you might be aware, in the short term within this year to start, there's also lower terms crossing starting. A 66, big huge project starting. A four two eight just started. A 12 project is is is about to start where the government gave a a permission to start that as well. So there are quite a lot of projects starting due to they were a bit bit delayed due to the inflation, but now they're about to start. They're all going ahead. So, yeah, we see that the, you know, wage inflation beginning to to to to ease now, and that will help more projects to to to start, and and and we can crack on delivering them.

41:42 Okay. What I think is the last question then, I'll I'll take this one. It's from Andy. Andy's asked he says, Paul, that's an impressive reduction in labor debtor days. Do you think forty days will be a typical ongoing rate, or can further reductions be made? Well, yeah, I I haven't got a crystal ball. I can't say exactly what's gonna happen, but I I don't I don't think there's there's scope for any major reduction in the 40. I suspect it will always be between forty and forty five. Sometimes during the year, particularly Christmas and New Year is a bit of a tricky period for the way, the way that the timings of everything works. You tend to get a little worse then. But ongoing, we would think it's gonna continue between '40 and 40 '5, and that's what we would aim to achieve. And we think that's a a very good result in terms of cash management. And anybody in our business, I think, would be very would be very pleased with that sort of that sort of outcome.

42:43 Okay. That's the end of the questions and answers. Perfect. Bruce, Paul, thank you very much for answering those questions from investors. And, course, the company can view all the questions submitted today, and we'll publish those responses on the investor meet company platform. But just before redirecting investors to provide you with their feedback, which is important to you both, Bruce, could I just ask you for a few closing comments? Yes. Sure. Thank you so much for everyone listening to us today, and we had a fantastic year. We have been growing since I started the business. And and we will our aim is to grow and and and make sure that we are more profitable than before. So hopefully, you will join us in our in our journey. So thank you so much, everyone. Perfect. Thank you, everybody. Thank you once again for updating investors today. Could I please ask investors not to close the session? As you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the team.

43:43 On behalf of the management team of HERCULES PLC, we'd like to thank you for attending today's presentation, and good morning to you all. Thank you. Thank you.