Journeo (LSE:JNEO) — FY23 Results Investor Presentation

0:00 Good afternoon, and welcome to the JOURNEO PLC Full Year Results Investor Presentation. Throughout this recorded meeting, investors will be in listen only mode. Questions are encouraged to be submitted at any time using the Q and A tab. Just situate on the right hand corner of your screen. Just click Q and A, scroll to the bottom, type your question and press send. The company may not be in a position to answer every question received during the meeting itself. The company can review all questions submitted today and publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Russ Singleton, CEO. Good afternoon.

0:29 Thank you, Paul. Good afternoon, everyone. Many thanks for making time to hear our sort of f y twenty three results presentation. I'm Russ. I'm the chief exec. I'm an engineer with a background in sort of building technology services businesses. My colleague over to my right is Nick Lowe. He's our chief financial officer. Been with the company since 2017. So we've been here quite a while, and it's taken us quite a while to get the business, the technology, the platform into the shape that we want. So it's really gaining momentum now. The sort of exact summary, really, of this short deck that we're going to show you today.

1:15 Really, just is intended to sort of give you a snapshot of of where JNEO are in in in its development. We we haven't finished our sort of growth phase yet. So we're investing a lot of new technology and new systems. But JOURNEO is is about information systems, managing the very large datasets that are involved in public transport and providing the physical services to buses, coaches, trains, trams, and the sort of deployment to those in around towns and cities and in airports. We're actually really pleased as we put in the stock exchange announcement with what we achieved last year. The results are in line with expectations.

2:02 We delivered strong organic growth, about 20%, and we completed two acquisitions in the year, one in January and one in September. And they've added depth and breadth to our product offering and also strengthen our position in some new markets, particularly in Continental Europe. We supply software, hardware, and services to now the domestic and international markets. And as we said, we it's got some real momentum behind it. The group is growing. We're profitable and we're cash generative. And so the highlights are that the revenue more than doubled at from 21,000,000 to 46,000,000. The gross profit increased from 7.8 to 14.3. The adjusted profit before tax increased four times, and we have a sales pipeline on our CRM system now of qualified opportunities of over 60,000,000.

2:58 If there's anybody here that's not familiar with the business, I just prepared a slide here to sort of give an afterglance introduction to to what we're about. So it's about innovation and technology that's applied to real customer problems. And we have a suite of of hardware and software, real time information systems, passenger counting systems, telematics. Most of them are agnostic, so we can connect to whatever technology already exists. And we do that in such a way that it can allow our operator customers to reduce the number of discrete services that they have to buy. We can aggregate them.

3:44 And our technology and our products then go out to the end user customers through our operating companies at a moment, which we have four, our fleet systems business, which is essentially about an integrated services model where we design and deliver the safety critical systems, passenger count in CCTV, I've just mentioned, into the Boston rail market. On our passenger systems business, they're really about the management and delivery of travel information to members of the public in street through displays in universities, shopping centers, bus interchanges, and bus shelters. And then we have Infotech. It's a business that we acquired in January last year, which is the market UK market leading manufacturer of rail passenger information systems.

4:37 And MultiQ is a business based in Aarhus, Northern Denmark, which we acquired in September, which is essentially a software business providing fleet management and infotainment systems with some hardware layering around that. And so the so the essence of what we do is we develop solutions using ideally best of breed components to build the solution where we can't buy the right sort of building components. We'll design and manufacture it ourselves

5:09 and we do that from an open standards point of view and an agnostic point of view. So whatever the legacy applications are, we can integrate them along with the the oscillating technologies. We're doing this for

5:26 really growing list of super sort of customers or all the customers that you kind of expect a business like ours. So we have, you know, bus operators, like, Abelio and First Bus, some city center applications, which are the whole of Edinburgh, large part of the East Midlands. And we have some international or multinational businesses such as Kyolis National Express Transdev where we're providing systems on board the buses, but also at the airports on the inter terminal passenger and crew transfers and also between the car parks and the terminals. We've got now 15,000 assets connected to our cloud platform. It's roughly 12,000 buses, coaches, and trains, and just over 3,000 displays are now connected to the platform they were previously on our EPI product.

6:25 About 30% of the buses in The UK now are connected to our cloud application, And there's just under 200 of us in the company. And what we're trying to do, as I said, is we're trying to bring open platform approach and open standards approach to this market to unlock it from sort of proprietary locking, which has been the case for for many years up until this point. So I think I'll hand over now to to Nick to talk through the financial results. Okay. So as as Russ mentioned, revenue was up a 118% year on year, but very strong performance. 20% was on an organic basis, and 98% was was through the acquisitions we made in the year.

7:13 Gross profit, again, very good increase, up by 84%. Organically, it was lower, so the organic uplift was 2%. So we had a few several factors impacted margins during the year, not one factor. They all cleaned out by the end of the year, so we actually did enter well, we closed the year with much better margins, and we've carried that on into this year. So it it was a mixture of some hardware in stores where we gained benefits in the future through recurring revenue, some small supply chain factors, but, again, they they all sort themselves out. So we although we now have 2% uplift organically, it's it's very different as we've we've moved into this year.

7:59 Flow to the bottom line was was very good. Adjusted PBT was was more than four times up at at £4,000,000, and our EPS almost doubled to 17.96 p.

8:13 Cash, very strong, $88,100,000 at the end of the year. We are we are cash generative. Not all, but most profit is is now turning into cash as as as as we we sit here today. So so we see the cash balance balance growing as as as we move forward. And and we we always we always talk about r and d, so we spent £1,500,000 on r and d during the year. That all passed through the p and l, so the the profit profit numbers above at 4,000,000 are all are the 1,500,000 has gone through the p and l.

8:51 Into the into the operating companies, so if we start with the bar charts at the bottom, Fleet had a very, very strong performance on revenue. It was up 31% after we had a similar increase the year before as well. Margins were down by by a few points in fleet. As as I said before, that has all righted itself by the end of the year, and we're we're back to where margins should be and where we expect them to be as we are now. Passenger systems, good uplift at 5%. We received a lot of orders later in particularly the second one on the left hand side. So we have entered this year with a with a very, very strong order book to to pass through p and l this year.

9:41 Margins were small had a small decrease, but but nothing nothing significant there. That's just timing. So it's like no no no margin pressure within passenger. And on the right hand side, you can see the blue bar is is the addition that the acquisitions bought to the revenue of of the group in the year. The vast majority is Invertech. We had Invertech for the full year, and we had three months of multi q towards towards the end. Not not on this page, but our recurring revenue was just over 10% of the whole in in 2023. ARR entering 2024 is is strong. It's around £7,500,000, and we see around half of that recurring revenue is is is of the software and SaaS nature.

10:38 To to the top left of the graph, we have we have various contract wins. These these show good spread of the the different different elements of the business. So transport for Wales and Cardiff is is predominantly software, some some hardware, but shows the strength we have there. Hearts and Northern Transport partnership is is predominantly hardware through our passenger business, but with a five year tail on it. The Areeva framework is a framework renewal. We've had we've had the Areeva framework for for a long time, and that's that's an extension to that, and that's what we expect to to generate in a year through through that contract. Network Rail Northern Trains cross country show our our rail capability, so we we have capability within Infotech and within the existing or the original fleet systems business, so we had some strong strong wins there.

11:32 The bottom two, Gatwick and East Midlands Airport, so two opposite ends of our airport offerings. So Gatwick was our first airport, and they renewed the contract by a further five years. So that's a five year software renewal, and East Midlands Airport became our sixth airport during during the year. Operationally, we've already mentioned the acquisitions and the R and D. The third point, we spent just over $400,000 to increase capacity, our manufacturing production capacity. We have a future benefit for that as we we can pass more group production manufacturing through that facility, so we will see the benefit of that, again, moving forward in margin gains.

12:16 And we also retained all our ISO and certifications. Thanks, Nick. So this next slide really is a slide that we've been using for a year or so, and it's it's why we're here, why why we are personally investing in this business, and why we are very excited by the opportunities that that we're creating or the ones that are unfolding in the market. And it is against this kind of background theme of smarter cities and interconnected cities and sort of bringing that into something that's tangible in the shorter term with these megatrends, which there's obviously a number of these, you know, rapid urbanization where people are increasingly moving into towns and cities. And we're seeing the move to try and decarbonize public transport as one of the ways that society can meet these goals of

13:11 sort of trying to manage the climate change. We're seeing obviously shifts economic and demographic changes, and this is driving some incredible technological breakthroughs. And we're seeing this with some of the hydrogen fuel cell technologies and also these solid state aluminum batteries, which are gonna sort of revolutionize the sort of zero emission electric vehicles.

13:32 And this this sort of public transport in many sort of advanced cities around the world is not been a really great place to be. It tended to be legacy infrastructures, not tended to be generating very high margins. And the result of that, the individual suppliers within that supply chain haven't been in a position to move from hydrocarbon based transport to zero emission. And there's been a number of initiatives to try and encourage us that haven't worked, but the sort of most recent one was when the the current government pledged 1,400,000,000 in this bus service improvement plan to kick start the transition from diesel based energy

14:21 engines, sorry, to carbon zero engines. And that's then and that started. But the real stimulus just coming through now through something called the CRSTS, which stands for City Regional Sustainable Transport Settlements. And that's 5,700,000,000 that's been allocated to local authorities to sort of encourage the use of clean energy public transport. And this really, really is at the heart of what JNEO have been doing because we've been acquiring market share in the public transport sector in terms

14:58 of the on vehicle side through our fleet business. But also in our passenger infrastructure business, we've been actively working with the 60 or 70 local authorities or combined authorities helping them prepare their bids in order to benefit from the b SIP Zebra and CRSTS funding. And it's just starting to work. So another sort of final point about this, then this is obviously some of these are UK, but some of them are not UK. They're outside The UK.

15:28 We're seeing that the rail control period is about to start. So the rail business works in a five year cycle, which we call control periods. We're right at the very end of c p six and control periods seven starts in April.

15:44 So our strategy really from JNEO has been to apply apply technology, not just for technology's sake, but to actually to improve the economics of our fleet operator customers by agnostic approach and open standards. And then try and do the same in the passenger infrastructure as local authorities in towns and cities prepare themselves for autonomous vehicles where you need much higher speed, sort of lower latency five g communication to all of the infrastructure. We effectively launched JOURNEO as a brand right at the end of twenty nineteen.

16:25 So in fact, to the 2020, that was when our first cloud application came to market. And and I won't go through each of these sort of years, but our revenue, can you see, has organically gone from 11.4 to 12.6 to 15.6 to 21.1. And that 21.1 increased organically by 20% and then overlaid on there, as Nick was saying, the acquisitions of Infotech and MultiQ.

16:53 And we really have been in building now a very, very strong pipeline both in terms of our recurring revenue, contracted SaaS revenue, and also future opportunities spread over a wider catchment of of customers. So it's no longer bus, no longer coach or rail. It's got airport systems in them. And it's also now sort of moving into

17:18 highways, parking applications, and traffic light priority sort of applications. So we we can see more potential in front of us now as a result of the position that that we've created.

17:31 So so the this slide really is to to to update. Again, it's a slide that we've used before, but why we think this is an exciting place to be. We're we're trying to get to revenues about a 100,000,000 now. We believe double digit operating margins are deliverable, particularly as the business mix evolves from being essentially installation and service of other people's technology to integration of other people's technology

18:03 to sort of enterprise wide applications of our entire solution, which we're seeing in a number of number of cases. So our organic growth strategy is to increase our share. That's both through, obviously, increasing our share of the existing market and capturing share of the growing market. And we intend to do that through a mixture of sales and marketing applications and sort of vertical marketing within quite large customer base. We do intend to continue to add strategic acquisitions or consolidation

18:40 to further provide depth and breadth to our offering. And our ambition really from the acquisition point of view is to acquire service businesses as a line of sight to their customers where these businesses have domain expertise which we don't have, but we have the technology and the the service capability to assimilate them into the JNEO offering.

19:05 As Nick said, our annual recurring revenue is growing. In the current year, we expect it to be at least 7,500,000, and about half of that now is going to be software. We'll see that, and that will alter our margins, net operating margins.

19:25 And what we're doing with this is we're creating a scalable and resilient business with much better visibility of earnings, and the SaaS is is critical to that. And it's not just software as a service revenues. We also benefit from other sorts of software revenue, which is actually embedded in some of our hardware applications. And then we intend to take this into adjacent markets as a number of opportunities both in The UK and outside The UK where we can see from conversations we've been having or some joint bidding that we've that we've been working on, that it would be in our interests for some of these businesses to actually sit within the JNEO envelope rather than be sort of white label or licensees of our technology.

20:13 So that's sort of our strategy. Our strategy hasn't changed and and we can see in front of us how we can get to this 100,000,000 revenue mark and and we're determined to do that. So the last slide really is just a is just a summary. It's to open the the the floor to any questions that that you might have. And just to just to summarize that we're we're very pleased with the progress that we're making. So Fantastic. Thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions just using the q and a tab situated in the top right hand corner of the screen. Just while the team take

20:49 a few moments to review those questions submitted today, I'd to remind you, recording the presentation along with copy of the slides and the published q and a can be accessed via your investor dashboard. Do have the ones that we're above? No. Okay. Unfortunately, you've got quite a few questions there, Russ. So that's what they you can you can scroll. So look, thank you to all the investors for submitting those. And on that face, if I may, ask you to just click on that q and a tab. And where appropriate to do so, just read out the questions and give you a response. Thank you. Okay. There's there's there's such a lot of them. Would can we scroll to the top of them? Yep. Okay. Just bear with us a second. We're just trying to get to this on. Okay. So should we talk about the there was one on the m and a, which one where's that one, Carl? I think it was It's gosh. There's so many of them. Okay.

21:41 We'll talk about this one. Okay. So can we talk about the m and a landscape and how many other interesting potential acquisitions are out there? So at the moment, we have we're we're targeting a number of or tracking a number of interesting businesses. I would say there's probably 10 or so that we've got dialogue going with and maybe half a dozen at various stages in the process. Most of them are in The UK, although two of them are outside The UK. And if we're able to, obviously, you can never be sure with with the m and a work, but if we're able to, we would look to do at least one of them or possibly two of them this calendar year. And they are literally a route to market for our core technology, so no diversification.

22:32 So I'm not sure if that answers. You want to scroll down to Yeah. That's right. Yeah. Do you want to take that one? That's fine. Okay. Nice balance sheet once I have it. Please explain the increase in provisions in noncurrent and current liabilities. Predominantly, it's warranty provision. We we've had no change in our policy. Most of it has come through through the acquisitions. So so we have I'd say we have we have a we have a very sensible warranty provision as did the companies that we acquired. So we've made no change to policy during the year predominantly. So what what what's come with with with acquisitions. So the next question is, to what extent are we in a virtuous cycle where new contract wins are proof points to win further contracts with customers?

23:20 Well, she got to be careful we don't appear arrogant here. So we we we we don't take these situations for granted because we're still in what we describe as an entrepreneurial phase of the business. But it's really encouraging when customers come to us because they've had a reference from an existing customer. We've recently just been through the net promoter score process, which which obviously we it's an ongoing process that was quite positive. Most of our airport sales have actually come through that route. So we we initially designed the system for Gatwick and they then started to promote that within their their airport group.

24:05 And that then led to a number of airports coming to to see that system and that led to the sale of the system at Stansted. They've then did the same and that subsequently led to Heathrow, which is our largest airport to date, generating probably somewhere in the region of about 4,000,000 to us. And as Nick said, we've we've now got six airports and they all seem to come that way. There's a fairly long sales cycle, but we do anticipate another airport this this calendar year. And it's it's probably as much as we can say about that. We we we don't take anything for granted, and we obviously, we're delighted when when when customers do refer us.

24:51 K. I'll take this one. That one. Yeah. So there's a question about receivables. Receivables seem high at 12,200,000. I guess I guess on first first look, yes, they do. If if you strip out some of the contents of that, so there's just over £2,000,000. It relates to construction contracts accounting. So on the passenger side of the business, we we we account use using construction contract basing. So that's a that's a balance sheet movement rather than actually a a physical trade receivable. So it it's it's 2,000,000 movement in and out. So our our true trade debtors was was actually about 9,000,000. You strip the VAT out of that year, it's about 7,500,000, and we had a strong we had a decent run rate at the end of the year. So it's it's equivalent to only just over forty five days. So nothing nothing nothing usual. Just just I say it just supports a strong run rate at the end of the year.

25:43 K. The question here, I don't know if there's anything above that. It's it says double digit operating margin is quite a broad target. Might you be able to get to 20%, for example? Leading SaaS businesses get to 25 to 30%, though he appreciates that we're not pure SaaS. That's a really good question. At the moment, we don't think we can get to 20%, but we we think we could obviously, this year, we we we generated 20 organic growth. And you can see with the Infotech business, that's got quite a high ROS. So because we're building out the entire solution, we actually want the entire solution. So we are selling now some software applications where the gross margin is very high because it's minimal cost of sale.

26:36 But we don't break that out. So there there will be a a pure SaaS SaaS or software component within that sale, but they also maybe then some integrated services and possibly some civil engineering or communication or subcontract. So it's difficult with the top line growing so strongly for us to deliver a 20% net ROS. But we we are pretty confident that we can we can deliver double digit growth. And it's possible within the segments of the business that we will be better than that. Not all the segments have got the same sort of operating margin potential. So I hope that's answer answer that question. Okay. Okay. I'll try the bottom How much the cash is related to customer payments upfront?

27:23 So so we we've previously highlighted that we had a a large upfront payment on on one of the contracts that that came with Infotech. That that's predominantly washed out now, but there's there's very little bit left and and and most of it is, I say, it it has gone. Our cash profile on on certain contracts, mainly in passenger systems, does have an up upfront element. So a portion of the whole contract is paid paid upfront, but that that very, again, very quickly washes out in in in in two or three months. So so so we also have total cash balance of of 8,000,000. As a whole, probably just over a quarter is is is payments upfront. Let's say it cycles depending on times of year.

28:09 It's likely to increase actually now because local authorities often pay more cash out in in at the end of their years. But but, yeah, vast majority of the cash is is is not upfront upfront payments and is is our cash. Okay. Can you just scroll up? There's one there. Just that that one. I can't see the front of the question. Okay. So Oxford University report is out this morning highlighting three key drivers for dementia, and second on the list is traffic pollution. Does any of our technology record pollution? Yes. It does. We've we've got a pollution sensor module, which is initially, we started off with a full gas sensor where we're looking for nitrous oxides and the, you know, the carbon monoxide.

29:02 But we figured that after doing carrying out some some some tests with with the local authority customers, what they really were interested in was diesel particulates. So we we actually have a trial in West Midlands where we've got around a dozen of our new particulate sensors being networked, and we can we're producing a heat map where you can see particulate density changing over time. And what we're working on now is whether it's possible to feed that into their into the app that people use when they're looking at the the the bus departure times to have, like, a differential between going to a particular bus stop versus another bus stop, which has actually got lower particulates in.

29:54 So it's actually something that we've used with a minimal infrastructure. So it literally just requires a local power which we can pick up from our displays. So at the moment, it's in it's in beta. It it absolutely works, and it's very accurate. But what we're not sure about is is actually who will pay for this. Is it something a local authority would pay for, or is it something actually that maybe that the transport operators may pay for? So it's a very it's a very interesting area, and there's gonna be a lot more focus on this. And then also the road tire wear, that's now starting to become an issue in the waterways, particularly the sides of motorways and busy trunk roads.

30:41 So I think it's a watch this space kind of issue there. Okay. I'll pick that up. Yeah. Pick that one. Yep. So question. On the 60,000,000 pipeline, how is this phased o, over the next two years? So to be qualified in that pipeline, we we we have to view it as a as a a strong opportunity where we we it's it's fully qualified, so we either know the customer or know the potential customer very well. It would I guess, we would expect to probably win that over the next couple of years, although more will go on the pipeline in that time. The the phasing of the revenue when it lands again could be depending what segment of the business sits. Some some may be immediate p and l, some may be spread over two years, some may be spread over five years.

31:33 So I think, yeah, I think I think it's fair to say we expect to win the majority of what's on the pipeline, but that that's not in the next three months, six months. It could it could be, yeah, up to up to two years. Scroll. Scroll. See if there's more. Yep. Top on the top one. That one. Okay. Can we talk more about the latest purchase orders for cameras to replace mirrors to enhance safety? How big is this opportunity for us? Okay. So in in The UK, just if you just talk about The UK market, there's 35 to 40,000 buses of that sort of magnitude. And buses and coaches and heavy goods vehicles by law have external wing mirrors. It's a mandatory requirement.

32:24 They have them. And they're quite big, and they do damage buildings and other vehicles and very sadly, occasionally, people. And a number of countries have been looking at how they could reduce these accidents, and The UK is one of them. And transport for London have this vision zero policy where they they they actually want to have no fatalities on the road as a result of TFL activities. And one of the things that they focused on was digital wing mirrors to replace the high profile physical mirrors. So we we have a have a product which has been through the the the vehicle testing agency. It's homologated.

33:17 It took us about three years to get that homologation, and we've been installing it on initially on new buses. But we've recently had it passed by the the vehicle standards agency and also the the trade unions for it to be retrofitted. So the two announcements we made, one on the March 11 and one the other day, they are for vehicles inside London. And inside London, there's about 9,000 buses and around thousands of the what were known as Boris buses or the new route masters. And we we've recently secured orders for about I think it's just over 440 Mhmm. For that sort of number of them.

34:03 And we are expecting expecting more. Yeah. So Can you give us a view on the different gross margins of your product offering and how they will how the mix will change over the long term? So so on hardware, depending on which part of the business we are and and and certain contract, we we would expect to get late thirties. It can range between 303040% for hardware. Services, we we would hope to be north of that, I guess, in your 40 to 50 territory. And then software, the target is to get that much higher. You you you sixty, seventy, 80%. We need the economy of scale to get that, so we're we're we're moving there.

34:51 So we're not there yet, but we are we're heading in the right direction. So I guess that leads to the second part, how will the mix change over the long term? I think we we would we we would expect the margins to increase as as we have a greater element of recurring revenue and more economy of scale on that revenue as well. Okay. Obviously, some I'm sorry. I thought you're gonna take the the the one I built from that. Okay. This obviously is bit of a delicate question. What gaps do you see in your current product services offering that you can enhance with an acquisition? And you say you ask because the last acquisition was exceptionally well structured. Obviously, thank you for that. Could this happen again? We would hope so. And some of the characteristics that that we have internally have some metrics for for acquisition, we apply. So if it doesn't fit that, we don't do it.

35:46 And we have a number of them that potentially would would fit that. And the the the gaps in the market really are if you're going back to that that slide about the megatrends, that the sort of public transport passenger transport market hasn't converged like many other industries have. There's been some lost disparate systems, and we believe it's inevitable that they're going to connect together. And in fact, there's some new technology coming that's that's driving that. And we can see these opportunities then sort of little vertical markets within that overall envelope that we don't currently have. And so it's it's that sort of thing. I don't think it'd be appropriate for me to sort of mention them specifically.

36:35 But as we make these acquisitions, you'll see how they sort of fit together jigsaw style. K. We've got to so that which ones haven't recovered? Any more coming in? You wanna talk about that one? Perhaps, can we give a sense of confidence about how much of the f y 24 have we already effectively got? Concluded on the let's tackle that one. Yep. Yeah. Can you give us a sense of the level of confidence you have in the business at the moment? So, yeah, for us to so for for '24, we are we're we're we're confident. Yeah. We we have we have a good proportion in the order book for for a mixture of the, I guess, the new the newer system sales and the recurring.

37:29 There's we always have more to win, but we have the we have the comfort of framework agreements with operators where we may not have a PO yet, but we know or we believe POs are highly likely to land. So, yeah, we let's say, we we we have a we are confident sitting here about about the numbers. And how is your expansion going into Mainland Europe? So we we haven't sort of featured this, but we've had a a JNEO Stockholm business for ten years now. And we have a team of five engineers supporting the PTOs in and around Stockholm. And in September last year, we acquired MultiQ based in Aarhus, Denmark.

38:18 And our intention is is to bring those together from JNEO initially, JNEO Scandinavia, but ultimately, that will be the the hub for JNEO Europe. And and at the at the moment, we're going through the certification of Inpatec product so that they can be sold into Germany, France, Sweden, Denmark, Iceland, Norway, the whole sort of and Italy, and that sort of region through the JNEO Europe business. So we we're expecting a lot of growth to come from that over over the years as we enable our products and software to be sold into continental European markets. K.

39:05 What's the next one? Touching Yeah. Do want to do that one? Yeah. So just a question about coming out of a bit more color to the operational cash flow. May I guess, may look quite low. So we we have we have good good cash conversion rate. I I would say we we've we've put majority of what we need to into working capital now in terms of turning that to cash with, say, with one particular large contract that came with Infotech, we did already have half of the cash because of an upfront payment. So that would that would impact what what what's what's seen as cash generation during the year, but that's that's that's washed out. So say, we see this year as not to the pound, but but profit should turn well into cash this year.

39:57 Any more down the bottom? What's that one about potholes? Oh, no. There you go. Alright. Potholes are a major issue, and JNEO are in a great position to provide data with buses on most roads. How about a pothole app created by JNEO and welcomed by all road users? That's a perfect question. I almost brother David actually is our customer. We actually have a trial of this at the moment. So we we thought like you possibly do that a bus would be a great thing to tell you about potholes. But what so did we. And we have accelerometers on all of the buses that should be able to tell us about the impact. But what people tend to do is if they see the potluck, they tend to try and avoid it, particularly other road users.

40:49 So what we did is we mounted a LIDAR on the front of a test vehicle and started scanning the road ahead and building up quite a sort of good metrological database where we could we knew the GPS location and we could measure the potholes diameter and its average depth to quite a degree of accuracy. But we realized that we can't use g force sensor on its own to do that because a lot of drivers actively avoid the potholes so you don't see it. And so at the moment, we we have a research program going on where we're fusing a video image with lidar information so that along with the accelerometer so we can actually pinpoint the the pothole and also excuse me. We can trace whether it was repaired within the SLA of the road contract to the highways authority.

41:50 So it's it's one of about half a dozen development things that we have, which are pre revenue from JNEO's point of view. I hope that answers your question. I think that's have we yep. Can just have a look? I think we've answered most of them there. Yep. So I think it's back to you, Paul. Fantastic. Thank you very much indeed. Thanks for covering off so many questions you've had through. Obviously, you will have the opportunity to review any further questions that come through, and we'll publish response when appropriate to do so on the investor meet company platform. Look. Before redirecting investors to provide you with their feedback, know it's particularly important to you. Russ, can I just ask you just for a few closing comments, if I may? Okay. Really, obviously, again, thank you very much for making time to to to to hear our story.

42:40 The takeaway message is that we're doing what we set out to do. We are solutions business. We believe that's our strength in the market. We're not just about products. We're not just about software. It's about the whole solution. We want the solution. We want the enduring relationship with the customer that builds, you know, a great degree of trust. We call that bonding, and that's something that we're very keen on. And we are profitable. We're growing, and we have a great pipeline of opportunity and an exciting kind of vista opening up in front of us. So thank you once again for your interest. Fantastic. Ross and Nick, thanks indeed for updating investors today. Can I please ask investors not to close the session? It should be automatically redirected to provide your feedback order management can better understand your views and expectations.

43:27 This will take only a few moments to complete and is greatly valued by the company. On behalf of the management team, JOURNEO PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.