Impax Environmental Markets (LSE:IEM) — Investor Presentation

0:00 Good afternoon, and welcome to the IMPAX ENVIRONMENTAL MARKETS PLC investor presentation. Throughout the quarter presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time by the Q and A tab situated in 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 in the meeting itself. However, the company can review 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 over to Tom Morris Brown. Good afternoon to you, sir. Good afternoon. Yep. Thank you everyone for joining this presentation on IMPAX ENVIRONMENTAL MARKETS PLC. As said, my name is Tom Morris Brown, and I'm a portfolio specialist here at IMPAX. Joining me today are Glenn Suarez, IEM's chairman, as well as John Forster and Fotis Hajimikalakis, co portfolio managers on the trust.

0:53 We expect this presentation to last around twenty five minutes. That should leave plenty of time for Q and A at the end. So with that, I'd like to hand over to Glenn Suarez, Chairman of the Board, to begin the presentation. Good afternoon, everyone, and welcome.

1:13 Thank you for making time to attend this presentation this afternoon. As you've already heard, I'm Glenn Suarez, chairman of IMPAX ENVIRONMENTAL MARKETS or IEM for short. In a moment, I'm gonna ask John Foster and Fotis Catsy Nikolakis, our portfolio managers, to take you through the results and the prospects for the company. But before I do that, I want to make three points that you should bear in mind when you listen to them. Firstly, this is a thematic trust that focuses on investing in companies which are developing more sustainable ways to provide critical needs such as water, food, energy, and housing.

2:02 This is one of the mega themes for the rest of the twenty first century, And we are the only investment trust in The UK market and possibly on the European continent, which offers investors broad spectrum exposure to this theme both geographically and in terms of the subsectors that make up the environmental markets. If you'll allow me to say this in a technical way, the company offer... Offers diversified, non correlated exposure that could be part of the toolkit for managing market risk. That's the first point. Secondly, over the past decade, the earnings of companies in IEM's portfolio have been growing faster than the earnings of companies in the broader market as a whole.

2:54 We believe this trend is likely to accelerate in the future, not just because of customer demand for a cleaner environment or convenience for that matter, but because there's a technical revolution taking place at the same time. This means that many companies in our focus area can deliver at lower cost than in the past or indeed compared to companies with... To compare to more traditional companies. You only need to think of a company like KATL, which is in our portfolio, which announced on Monday that it was going to start production this December of sodium batteries.

3:32 These are much cheaper and safer than lithium batteries and promised further reductions in the price of electric cars and lower costs in the management of intermittency risk of renewables worldwide. Thirdly, in the third and fourth quarters this year, in preparation for this year's AGM, our board consulted with shareholders on their expectations and on the changes they would like to see for the structure of the company, and these fed into our strategy deliberations in October last year. In addition, the board undertook a thorough exercise to test the suitability of the manager to continue in this role. This involved both a qualitative review as well as a quantitative review, which looked at the manager's process for stock selection, risk management, buy sell discipline, leverage, and things like that.

4:29 We also looked at the manager's record in choosing companies based on their own forecasts of earnings growth versus the outcome. This, of course, is a key test of manager skill. As a result of these investigations, we, that is to say the board, and the manager have identified a number of changes that we believe can drive performance improvements. But in terms of the big picture, it's clear to us that IMPAX has the research depth, the talent, and the financial resources to continue to create attractive risk adjusted portfolios for investors. Now we recognize that performance over the last three years has been very challenging, but this is not because the companies in the portfolio have been weak, but rather because the market has been underpricing them and their prospects.

5:18 That appears to be changing now, and there is an exciting prospect given the discount and a modest degree of leverage as the market begins to align valuations with earnings fundamentals. I say all of this because we have a continuation vote coming up at this year's AGM, and the board is strongly recommending that you, as shareholders, vote in favor of this. So that's all I want to say at this stage, and I'll come back at the end. But I'm going to pass over to John and to Fotis to take you through the presentation.

5:52 Thank you very much, Glenn, and hi, everyone. First of all, apologies for the lack of camera. Just when we thought we had technology sorted out, my laptop decided to crash just before the webinar. So sorry for that. If we could please start with slide six, Tom. So let's maybe start with a reminder of the investment thesis behind IEM. So in a world with finite resources and constant demand for higher living standards, we believe that companies enabling the cleaner and more efficient delivery of basic needs, like water, food, energy, and also companies addressing risks like climate change will grow earnings faster than the global economy.

6:38 And in the long run, this should be reflected in superior stock returns. So IEM is really all about giving investors pure play exposure to this very attractive growth opportunity. And by pure play, I mean investing in companies that derive the majority of their revenues from these growth areas that I just mentioned. If we go on to the next slide, please. Obviously, the past couple of years, you know, the world has been a lot more volatile and performance has been challenging, as Glenn mentioned. But it's important to remember that IEM has been going on for about twenty five years now, and the problems that it was designed to address haven't really gone away because we have the Trump administration in The US or because everyone has been focusing only on AI in the past couple of years.

7:33 Sadly, we still have global warming. We see more and more extreme weather events that are very disruptive and expensive to deal with, and that is putting pressure on water and energy networks. These are multi decade issues, and there is a massive need for investment, which creates opportunities for the companies providing the solutions to these problems. And I think that's something important to appreciate that we're not investing in NICE to have policy dependent products, but in mission critical solutions that the world absolutely needs today. And these solutions are being provided by proven profitable companies with proven and profitable business models that we invest in IEM.

8:21 If we go to the next slide, please, I think this is a very important slide because it illustrates the core of the IEM's investment thesis. We don't have yet 2024 complete data, so this stops in '23. But, you know, what you can see here is that over the long term, IEM has been delivering superior earnings growth versus global equities. So we can really see the pieces playing out. Of course, nothing is a straight line. So over the three years, we have had, once in a lifetime disruption in supply chains after the COVID boom, and we've had also outsized earnings growth from mega cap AI companies that are not in our opportunity set. So that has meant that on a three year period, earnings growth has been just below AQI.

9:16 But as I said before, IEM has been going on for a quarter of a century. And during this time, we have had periods when our markets went out of went out of favor. But what eventually happened is that the portfolio companies eventually reestablished themselves as high quality businesses with superior earnings growth. Something else that's interesting to note here is that over the three years, earnings growth has

9:45 been just below MSCI ACUI, just below global equities. But at the same time, we have seen a very aggressive de rating of IEM compared to global markets, which has left IEM valuation at historically low levels. If we go the next slide, please. The next slide looks at what happened in 2024, and I appreciate now that's almost four months ago, so I will only make a few key points here. But the main message to take away from this slide is that the headwinds we have faced last year have largely played out. So point number one, and at the risk of stating the obvious mega cap tech and financials are not really in our opportunity set. They're not the types of companies that, you know, we have in IEM.

10:38 And this has been a very material headwind versus ACUI that we can't really do a lot about, but we have seen that reversing this year. We have seen signs of a broadening market. Second point I would make here is that it's been a very tough time for renewables for a variety of reasons. Where we are now is that we have exited equipment manufacturers, and we have consolidated our exposure in project developers that trade at historically low valuations. Towards the middle of this slide, we're calling out some challenges around destocking and life sciences, and these have now largely normalized. There were leftovers of the COVID boom and the subsequent crash of supply chains. Of course, that's now, you know, pretty much fully played out.

11:29 And the final point I would make here is around mergers and acquisitions. Historically, M and A has been one of the one of the drivers for IEM as large companies have bought their way into our markets by acquiring portfolio holdings. There has been a bit of a pause for four, five years. But in 2024 and so far this year, we have had four holdings that have been M and A targets. So that goes again back to the point that the portfolio is trading at historically low valuations. If we go to the next slide, please. This is a snapshot of the portfolio as of the end of twenty twenty four. I will not spend a lot of time here. Just some key points to make is that are that we do have a structural overweight in industrials. I'm looking now at the top right hand side at the GEEX sector allocation.

12:27 So we do have a structural overweight in industrials, and the other key sectors for the portfolio are IT, materials, and utilities. So these are sort of the key sectors we have exposure in IEM. In terms of our regional exposures, we have about 55% in North America, 32% in Europe, which effectively means that compared to global equities, we are underweight North America and overweight Europe, and that is looking at the country of lifting. Of course, you know, we do invest in global companies. So if we look at where the underlying revenues come from, it's a lot we are a lot more balanced compared to global equities.

13:13 If we then go on to the next slide. So over the next three slides, we thought it would be a good idea to talk to you about some of the themes we are excited about and also give some examples of, you know, what do these what do these companies actually do. And I will start with the first theme, which is digitalization. It has been an area of growing prominence within environmental markets, and that trend started about ten years ago around the same time I joined IMPAX, actually. So if we go back ten, fifteen years, when we wanted to do something more efficiently, we always focused on improving the performance of hardware.

13:59 So make it lighter, make it run faster, increase precision. Now that has been changing. And, you know, the incremental wave of efficiencies are more and more coming from using software and using data to generate actionable insights. And that's creating some very interesting investment opportunities from an environmental markets perspective. And a good example of such a company is Bentley. You can see that on the left hand side in this slide. So this is a company really digitizing the construction industry. Construction is amongst the least digitized sectors in the global economy. I studied civil engineering at university. I have spent some time in in construction site.

14:47 So I have seen how inefficiently projects are being run. The statistic that's out there is that about 20 of the materials ordered on a construction site ending up being wasted. And, you know, I'm sure if you've ever had building works done to your house, you have probably seen that. So there is a massive opportunity from an environmental market's perspective to improve efficiency. There is also an existential issue for the construction industry itself, which is lack of labor, and that's because younger people see this sector as very manual, not very attractive as career choice, and that is creating a shortage of, you know, available labor for for the construction companies. And that means that there are some pretty interesting structural drivers that support higher penetration for Bentley software.

15:40 And then another attractive characteristic I would I would highlight here is that Bentley sells its software using a subscription based revenue model, which adds more resilience and defensiveness to to the whole story. So that was one example of digitalization, and now I will pass to Don to talk about some of the other things we're excited about. Thank you.

16:05 Oops. Okay. So Tom, you're moving the slides. Thanks for that. So good afternoon, everyone. So onto the second theme is one of electrification. At the front of the presentation, we talked about forecasts for up to 50% demand growth for power between now and 2050. That's the International Energy Agency. So a very credible organization. The avoidance of that, those are massive numbers in a world where power demand's been pretty, you know, flattish for for many years. So this is a big deal, and it creates a huge amount of opportunity for us as portfolio managers. And it's through the whole value chain. It starts with the renewable power project developers like Ormat. You can see on the top left.

16:56 It continues through the necessary expansion of the grid with the likes of Prismean who make cables that go into strengthening grid infrastructure. And then it extends into companies that are providing the technologies to electrify end markets. So we're talking heating, ventilation, and air conditioning. We're talking in transportation markets and and across broader sections of industry. So there's a there's a huge opportunity. If I was gonna pull a name out, it's actually one that Glenn has mentioned already. It would be cattle contemporary IMPAX. To give you a little bit more detail on it, it is a... It's the leading battery manufacturer globally.

17:43 It has about 40% market share across relevant markets. It's very strong both in electric vehicles, but also broader energy storage. It's dominant in its home market of China, and it's a key solution provider into

18:01 Europe as well. It's an industry where scale really matters, and their scale provides them with some fantastic advantages. The the first is in manufacturing. So their scale gives them the ability to invest in automation. It's a highly automated company, which gives them cost advantages in manufacturing. The second is in r and d.

18:27 This is a company that spent $2,500,000,000 on r and d last year. It means that they're at the forefront of all of the different chemistries within battery development, and it's leading them to, you know, announce the kind of advancements that Glenn was talking about earlier on. The one he didn't mention is they've announced a new lithium ion battery that can charge 500 kilometers worth of charge in five minutes, which is a which is a huge number, quite frankly. So so that is one of the investments within the portfolio, but hopefully, you can see from this slide that there are many opportunities around electrification, and this is very early days.

19:15 So if we go to the next slide, we're talking about climate change adaptation. No one really wants to talk about climate change anymore. But at the end of the day, you know, the science is no longer in doubt and the financial implications are, you know, also very real. We've talked about... That's actually $368,000,000,000 of climate related damages and losses that were caused in 2024. That's the ninth consecutive year of three hundred billion plus, and it's 50% above the average since the start of the 2000. So this is very real. And what it means is a massive investment requirement in order to adapt to a more volatile and changing climate.

20:08 So again, there are multiple different opportunities for us. Everything from backup power for when the grid gets taken out, efficient HVAC products for cooling in a hotter environment,

20:25 kind of the need to invest heavily in water infrastructure, whether it's storm water management or broadly across water infrastructure. And also, finally, you know, the need to clear up after these massive hurricanes and storms roll through sensitive infrastructure. That's where Clean Harbors comes in, which is the name I was going to draw out very briefly. They are the dominant US player in industrial hazardous waste management. One of the services they offer is emergency response, which is where they go and clean up after disasters. So if you remember the BP oil spill, Macondo, any of the hurricanes that have rolled through the Gulf Of Mexico, they're heavily involved in in cleaning up these disasters.

21:17 Clean Harbors, as I said, is dominant in in its market in The US. It's got a 65% market share of the hazardous waste incineration market. It's a very highly regulated industry with very strong barriers to entry. It's almost impossible to get a permit to open a new site. What that means is it gives them a lot of pricing power and the ability to grow earnings. So notwithstanding all of that, you know, there are other drivers for growth, including onshoring of manufacturing in The US, which I'm sure you've all seen. There's a lot of closure of of capacity of in house treatment plants within their industrial client base and emerging opportunities in the likes of PFAS or these forever chemicals that you may have heard of. So plenty of opportunities, a very strong business, and a top 10 holding in the in the portfolio.

22:16 So with that, if we move on... So, yeah, as we said, we're, you know, we're not happy or satisfied with the performance of of the strategy in recent years. I would say it came off a high base

22:32 and that focuses try to address some of the reasons for that performance. But we... What we have been doing over the last six months is undertaking a deep review of the portfolio and undertaking a dynamic renewal of the of the portfolio that we have. So in terms of what we're looking for, you can see the focus areas that we've just been talking about in sector terms. Each of those has 15 to 17% within the portfolio. In addition,

23:04 we have been looking for new defensive opportunities and for value in an environment of increased kind of geopolitical and macro uncertainty. That's what we've been focusing on. Outside of that, if you look at the bottom left, we were looking at sectors that had proved themselves fragile, whether it's the sector itself or the business model of the companies. We were seeing the escalation of these trade wars and tariff uncertainties. We are looking at manufacturing footprints and how suitable they were for the the new world. We've been sharpening our pencil in relation to valuation discipline, which is, you know, definitely a learning point over the... This kind of last three years.

23:59 And in addition to that, we were looking at small positions with the port... Within the portfolio on the basis of up or out, basically. So as a result of all of that, we have taken significant action. We've boiled the portfolio down from 60 to 55 holdings. You can see we had six new positions and 11 exits, which were done in the first quarter. We're very pleased with the quality and shape of the portfolio we've ended up with. It does have a higher weighting in the top 10. It's gone from 25 to to the high twenties. It's improved the quality of the portfolio taking the return on equity up by three points to 17, 18% and with similar risk characteristics.

24:51 So we're very pleased with this portfolio and looking forward to take it through into the next cycle of of performance and markets. Talking of which, in terms of quick update on performance, q one was a difficult period with the escalation of trade wars in in March and obviously carried on into into April. The trust was down 7.8% in q one. That was three and a half percent behind AQI, the MSCI or country world index, but broadly in line with the MSCI AQI SMID growth. So if you look at our style our style and size bias, then we're much more in line.

25:40 And if you compare with our sector comparator index, the e t 100, which is going to be replaced. We were four and a half percent ahead of that index. So challenging markets. I would say April so far is is looking actually better, But that's a quick update on on performance where we stand in in these challenging markets. So if we go to the next slide, looking to the outlook, obviously, the biggest issue in discussion at the moment is tariffs and trade wars. I think the main issue is one of macro related concerns. What does this mean for the global economy?

26:26 It's definitely damaging to confidence and growth. It does raise the potential for a recession. So we're seeing the sell side with probabilities maybe 35 to 40% and has been rising. So what do we do in that kind of environment? We have been in recession... Recessionary environments before. And what we do is we manage our clusters of risk. So we avoid geared names. We had a low tolerance for gearing anyway, but we have reduced exposure to the more geared names within the portfolio. Secondly, we've got cyclical exposures particularly to things like construction activity, which we've also materially reduced. We were... It's been an area of strength. We were taking profit to stay within our 20% soft limit. We've since reduced that to 13,

27:25 14%. In addition to that, I've talked about looking for new and diversifying defensive opportunities, which we've also added to the portfolio in q one. So I think those are the main risks. Obviously, there... Some people worry about the sustainability pushback and outflows from sustainability related funds. I think my response to that is that has nothing to do with the earnings of these... Of the companies, and we're very confident that they will deliver the goods. So if anything, having been here before the... This sustainability pushback and out of favor status, I'm more inclined to say is an opportunity and belongs on the right hand side.

28:12 Speaking of which, in terms of strengths and opportunities, I've been working on this for twenty three years. I firmly agree with everything Fotis said that the that the growth drivers of environmental markets remain very strong. We are investing in the industries of the future that are providing valuable solutions that will drive growth over time. We've got a really diverse range of opportunities. When we first started, it was very dominated by alternative energy, lots of speculative unprofitable businesses. It's much broader, more diverse these days, more global, and it's mainly driven by pure economics. So I think it's a really exciting opportunity set we're looking at.

29:05 IEM itself is pretty unique in these markets, in the investment trust realm, and also in broader sustainability funds. The SMID bias, the focus on pure play companies is all very differentiated compared to other sustainability funds, but also compared to global equities.

29:29 So notwithstanding all of that, you know, we are very out of favor at the moment. The valuation is near... We'll come to in a second, is significantly below long term average in terms of the premium to. We have a 10% discount that comes on top of that. So if we go to the next slide, that will allow me just to show you what this looks like. So top right is the history of the PE ratio. And I think the way to think of it is we're back at pre COVID levels, notwithstanding the fact that we've got a different mix in the portfolio with more technology and software. So if you allow... If you took that to one side, the valuation would be below a long term average.

30:20 And the premiums, AQI is currently in kind of low double digit percentage, which is, you know, pretty much as low as it's as it's been. So,

30:31 you know, we feel quite strongly about valuation. We feel strongly about earnings, delivery, and growth potential within our industries. And that's... I think with that, we'd circle back to the end of the deck to re... Reiterate the points. Next slide. Yeah.

30:56 Reiterate the strength of our conviction in in the outlook for environmental markets and IEM. So I think with that, we probably... I'll hand back to, I guess, to... Is that to Tom? Or? I think we're gonna let Glenn make some closing remarks. Alright. Apologies. Yes. I mean, I think... Thank you very much, John and Fotis. It's a really good insight into what you do and the portfolio. I think we're going to take some questions, aren't we, Tom? We are. So let's do that, and then I'll wrap up with with some closing comments. Okay. Perfect. Alright. Well, thank you, gentlemen, for for your presentations. As Glenn said, we have a few pre submitted questions, which I will go through and and allocate accordingly.

31:48 There's still time to get those questions in. So if you do have them, please put them in the chat, which should be on the right hand side here. So looking at the first one, I think John or Fotis, either of you can take this one. What sectors are expected to drive growth, and how are you positioning the portfolio to capitalize on these opportunities? Phojis, you wanna take that one? I I could take the second one. Yeah. I I would say, you know, going back to what are we most excited about at the moment, it it is these three themes that we mentioned, the opportunities around digitalization, climate change adaptation, electrification. So there's a lot of, you know, interesting, exciting sort of growth opportunities in there. Then I would also highlight the fact that, you know, we have had some sort of sector specific head... Headwinds over the past couple of years. And as I hopefully explained, you know, a lot of these have now largely played out.

32:51 So, yeah, I would... This is what I would highlight in the first instance. John, anything you would add there?

32:58 No. I know. I think outside of these three key areas that we tabled, you know, we're finding really broad opportunities across environmental markets. That's not it's not only there, you know, after the derating that we've seen, the opportunities are are broad across all categories. So we're so we're just drawing out some highlights. So otherwise, I'd leave it at that. Okay. Okay. Thank you. Glenn, I think this question is is best directed to you. So, reads, at year end, the discount was minus 10%, and buybacks don't seem to have closed the gap much. What else is the board doing to narrow the discount? So the discount rise... So the question is why does the discount rise? That's the first question.

33:43 There are some short term issues, and there are some long term issues that that drive drive the discount. The long term issue that driving the discount is the perception of performance, and we've talked about the steps that the board has taken to understand what the drivers are and to and to position this company to to be able to address those, and I'm very optimistic about that. And you've heard John and Fotis about the long term driver. The short term issue is a reallocation of people's portfolios, and that's to do with where interest rates are relative to... In The USA versus versus the The UK. So the trust shares are basically basically move in line with UK interest rates, and the trust net asset value and and share...

34:35 Underlying shares move with international interest rates. And the and the difference between the two concertina's and drives the and drives the discount. There's there's a limited amount that we can do to do that in the short term, but the answer is basically at the long term. In the short term, the question is getting the drivers... In the in the long term, the the answer is getting the long term drivers in place and in the short term to provide liquidity for those shareholders who wish to exit, to do so, in a in an orderly fashion, in the expectation that the long term performance is right. But the really big issue, and I want to emphasize this, is that you have to believe, as we do as a board, that what we have here is a story that stands up both in terms of what the managers are doing, in terms of their day to day work, which we've been through and I've explained that to you, and in terms of where the markets are for this kind of thing. And I think both of those, I think, are extraordinary opportunities. So I think that that is the answer to the question of discounts. I mean, if it was a simple answer of closing the discounts, you know, that could be done and keep the trust going over the long term, everybody would be doing it. You know, it's just not... This is not a... Discounts are not a factor that only affects IEM.

35:53 It affects the whole of the investment trust sector for the reasons I've mentioned. Okay. Thank you, Glenn. I've got a question here, which I believe, John, you touched upon, so maybe you can expand on this.

36:05 How do you see the US administration's approach to climate change impacting fund flows for climate related investments?

36:15 So I think, you know, the US election and Donald Trump's elevation to president, it was definitely a a negative catalyst in q four of last year. It basically did lead to underperformance of renewable energy. But bigger than that, it led to expectations of tariffs and trade wars, inflation, and higher rates, all of which are, you know, a challenging backdrop for performance in smaller cap companies and some of the sectors we invest in. So there there was definitely a challenging q four. If you take a step back from that and think what does Trump actually mean for the fundamentals of environmental markets, our argument is that it's actually much more nuanced that there are sectors that he is taking aim at,

37:09 particularly renewable energy and also the subsidies and support for electric vehicles. But outside of that, there are multiple sectors that can thrive under a Trump administration. So, you know, what is Trump focused on? He's he's focused on growth. He's focused on domestic opportunities and reshoring of manufacturing. So we have multiple sectors that can thrive in that environment, whether it's buildings energy efficiency, water infrastructure, the waste management players. We've talked about clean harbors as a as a solution provider for industrial hazard waste in North America. So the market perception is that Trump is very bad for environmental markets and for for IEM.

38:01 But, you know, we would say that that is definitely not the case. You know, first of all, in terms of what he is looking to do. I'd also add that federal policy is only one part of the jigsaw in The US. There's a lot of state and local policy corporate decision making, continues to drive growth. And I'd also say it's, know, we're operating in global markets and investing in global funds so we can, we can move to where the better growth prospects and attractive valuation is. So, I think it's overdone this concern about Trump, but it's exactly what we saw in 2016. But hopefully, that is... That's clear. That is clear, clear, and comprehensive.

38:47 I think we've got time for maybe a couple more before we hand over to to Clint to wrap up. Fotis, maybe you could take this specific one around earnings and and historic earnings growth because I know that's something that you're you're close to. So the question itself is if... So is average portfolio earnings for the next five years expected to be around 16%? I think that's a question about the forward earnings growth. And then what has it been like for the last five years?

39:19 Maybe we can provide some information around historic earnings growth and forward looking. Yes. So just to be clear on what the slide we're showing, this is looking at next twelve months versus last twelve months earnings growth, and these are consensus estimates. Now as to what has earnings growth been in the past five years, I would say we have seen the IEM thesis around, you know, going back to the very first slide that I was talking about, which is that we invest in these companies because we believe they deliver superior earnings growth. You know, we have seen that happening in the past five years. We did have, you know, as I said, a few things happening that meant that there's been a couple of single years that, you know, Global Equities grew earnings faster than IEM, and that's been mainly because of outsized growth in mega cap AI companies.

40:17 It's been, you know, only a year that energy as a sector had very strong earnings growth with a lag, but we have generally see generally seen that that playing out. So that's that's what I would say. I don't know. John, would you add anything to that?

40:41 Sorry. I was struggling with screens. So... Yeah. I mean, what what we've said is that the the historical CAGR was 7% over the last five years. Right? That's delivered growth. If you if you look at kind of longer term expectations, I was looking for the report. It's in, yeah, it's in a high single digit type range. So the long term expectations are consistent with the short term that could have delivered growth that we've seen over the last the last five years. Obviously, you know, the bigger number for the next twelve months also reflects coming from a low base normalization from some of these disruptions.

41:27 So I think that's what I would that's what I'd add to it. Hopefully, that's additive. Alright. Thank you both, John and Fotis. I think that that leaves us in a good place to to wrap up. So so, Glenn, over to you for some closing remarks. So we have our AGM coming up this year on the May 20. Shareholders are all invited to attend if you can in London. If you can't attend, please vote on the resolutions. The board is recommending that you vote in favor of the of the resolute... All the resolutions there, including the continuation vote. We are very keen to involve more retail shareholders, particularly to get more retail shareholders to vote in our AGMs and to involve more retail shareholders in in in the governance of the trust and the shareholders in the trust, of course, going forward. So that's the message I think I'd like to leave you but... Leave you with, but I I just want to reemphasize some points that we've made here.

42:40 The the trust is a thematic trust. It is investing in the kind of companies that are going to be investing and are going to be developing stories and solutions around energy and food and water and housing that are under pressure from the environment for the rest of the twenty first century. This is not a story that's going away. In fact, it's a story that's coming up upon us faster and faster and faster. I'll just give you one

43:11 statistic I heard this morning. In 2024, electricity demand grew faster than, as John has said, faster than it has grown for many, many, many decades. But the biggest single element of that growth was not AI and was not data centers. It was air conditioning because of a very hot summer in China, in India, and in USA. And the technology around that, would you believe it, is the heat pump. Heat pumps basically are the are the are the technical... Virtually the only technical solution for air conditioning. And you can imagine that whether we go for net zero or not, this is going to be very important. So this is the first bit of that story.

44:01 The second bit of that story, we've talked a lot about earnings here, so I won't go over it here, but we have a big earning story here. And in the end, this is what drives valuations in the market. And the third bit here is we have in IMPAX, and John and Photos whom you've heard today, a team with depth and talent and financial resources to be able to create the kind of portfolios that make sense in the long term for investors in in this area. Many of the companies that they are researching and they are investing in are simply not in anybody else's portfolio in The UK market. I believe... I'm sure someone will tell me I'm wrong here. That that that that share in cattle is only held in two portfolios in The UK.

44:54 In the whole of The UK market, there are only two, and it's the biggest battery company in the world. So I think those three... And that's a bit of research done by done within IMPAX, and, you know, it's... I... I'm do investing myself. I'm very impressed by that. So let me bring that story together. Those are the three elements there, and that is the that is the platform around which IEM is based. So I'd love to see you on the May 20 in London if you can. And if you can't, please vote the shares. Thank you. Perfect. Thank you very much for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected provide your feedback in order that the management team can better understand your views and expectations. On behalf of management team for IMPAX ENVIRONMENTAL MARKETS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.