Light Science Technologies Holdings (LSE:LST) — Full Year Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the LIGHT SCIENCE TECHNOLOGY Holdings PLC Full Year Results Investor Presentation. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so and notify you by email when they're ready for your review. Before we begin, we would like to submit

0:32 the following poll. And if you would give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand over to CEO, Simon Deacon. Deacon, good afternoon. Good afternoon, everybody, and thank you for attending LIGHT SCIENCE TECHNOLOGIES HOLDINGS PLC results presentation. So I'd like to run you through it today and introduce you to who's presenting. I have got myself, Simon Deacon, chief executive officer. I've got Andrew Huntsell, chief operating officer to my left, and I've got Jim Snooks, chief financial officer and company secretary on my right. So just to introduce you to the people who who not necessarily know a bit about the business, but LIGHT SCIENCE TECHNOLOGIES HOLDINGS PLC operates two complementary businesses within it.

1:24 UK Circuits Electronic manufactures up in Manchester. It's a contract electronics manufacturer, CEM, and is a facility which is fully automated manufacturing facility with 60 employees up up in Manchester. The market for UK circuits is growing. It's growing 11.12% in two thousand nineteen, two thousand twenty, and is currently a market value of 2,300,000,000. And we've seen real key growth here of over 30% in the last two years as the company's grown. So it's a real buoyant market for us as manufacturing returns HOLDINGS to The UK and product, security comes back, from all the difficult situations which are happening around the world.

2:18 LIGHT SCIENCE based in Derbyshire and is in the controlled environment of agriculture, and we design and manufacture smart technology products, lighting products, sensor products, and have our own scientific lab here in Derbyshire. This market is over 20,000,000,000 worldwide,

2:39 and is growing. It's growing at a CAGR of 21.1% up to 2025. So it's another area. And the synergy between the two companies, UK Circuits, manufactures, product on on our behalf and has got the electronic side to it with the lighting and sensor technology, side. From there, we go into the controlled environment where we're putting this technology into old industries as well as new from vertical farms, polytunnels, and glass houses. Moving on, I'm gonna hand you over to Jim who's gonna talk to you about the highlights of the financials. Thank you, Simon. So we successfully admitted to AIM last October, raising gross proceeds for the company of 5,000,000.

3:32 Reason for that was to allow us to accelerate our growth plans primarily for life science technologies, the CEA operation, the controlled environment agriculture operation, but also to put some funds towards The UK circuits, the contract electronic side of the business. So looking at the the financials, predominantly, this represents our platform business, UK circuits. It's a business that is cash generative and profitable. It's been trading twenty four years, and it's seen a significant growth over the last couple of years in revenue of in excess of 30% in what is a very turbulent trading period with the onset of COVID and Brexit and, latterly, the component shortages, worldwide component shortages in the electronic marketplace.

4:29 Light science technology, if you like, is much more than new kid on the block. It's a much more recent business. It's got the real growth opportunities there. So as I say, it's not really representing in the historic financials. It is very much the platform business UKC. One of the the elements that that is is pertinent to mention here is that we achieved EIS and VCT qualification as part of our flotation. And that effectively, we did that on the basis of entering into a new product marketplace being the controlled environment agriculture marketplace. And that meant that we weren't in a position to take on orders prior to flotation. So it's it's quite important to understand that in the backdrop of these historic financials.

5:18 In terms of our gross profit margin generation, you've seen the picture there. It's a fairly consistent pattern. We ex we expect in in the in the business to generate between twenty two and twenty three and a half percent. And with tough challenges, as I've just mentioned, we are pretty comfortable. We're very comfortable. That's a solid cash generation to to have made.

5:43 With LST coming in to the the fray, we would expect those margins to be pushing up to the 35% and above into 40% as we embed our solutions, particularly the sensor technology and the data and the recipe best recipe for growth that that that will flow from all of that. So what you're seeing here is very much the the gross margins that that derive from the platform business UK circuits. In terms of the, the group, loss before tax, it was very much on expectation as $22,350,000. And that really was as as as a result of our admission to AIM, the costs involved in admission.

6:29 But also, very importantly, the investment that's gone into the CEA business, life science technologies. You know, we've made a significant investment over the last eight eighteen months in terms of product development, IP protection, marketing, and that's very much reflected in our in our our performance there. Turning to the balance sheet, continued investment in UK circuits to improve automation. We're looking to break into new new sectors, medical, defense. Those are areas that we've got the capability to do with more sophisticated equipment. So some of the investment from the from the raised funds is going in that direction.

7:19 It also offers us the ability to take on higher higher level volume production as well as as new sectors. Further investment into the controlled environment sector, We opened our laboratory, state of the art laboratory in the first quarter of last year. That was a 400,000 investment, and we're continually improving and investing in in that to keep ahead of the curve in terms of making sure our our solutions and products do what they they need to do and complement the customers. Cash and cash equivalents, 3.86 at the end of the year with a net cash position of 1.35. That leaves us in a really strong position to move forward with our investment plans and our growth plans throughout the group.

8:11 So if I can hand over to Andrew to go through the operational highlights. Thank you, Jim.

8:18 Okay. So the the main priority for Life Science Technologies during the past year were to develop our CA products and then generate a pipeline of client projects and and and future projects for this year and for next year. So we were very fortunate to be supported by grants from UKRI for the indoor farm sensor sensor grow. That's now patent pending. And now the current project that we're working on is intelligent polytunnel solution, which we're just drafting the patents for at the moment. It's a real sort of validation of our innovation getting those awards. Some of those schemes have a success rate of around 6%. So to get the first two that we've got in for, we're really pleased with. So we received a sustainable award for our luminaire range, nurture growth. That's another patent pending product range.

9:08 And what what we can do there is where with all our competitors, you have to take the whole light away at the end of the product's life dispose of it, all sorts of mix of materials. With ours, you can leave 95 percent of the body in place and just take out the sort of printed circuit board with the LEDs. So, you know, that's why it got the sustainability award there, and that really is something that's quite instrumental in tying us in for those recurring revenues, which we'll talk about later on in the presentation. We previously announced this contract with Zenith up to £13,840,000. I'll I'll give an update further update further in the presentation on that. And then we've built the in house laboratory

9:51 here in Derbyshire on-site. So what that's really doing is it's taking us away from, being a catalog lighting company that gets very commoditized into some, you know, company that's we're looking at all nine cardinals of plants' life, not just the lighting. And, you know, it gives real validity. Clients can trial, you know, in our lab, the the lights lights and the performance before they roll that out in a big scale. So it's a real strength to the company's arm. On the CEM division up in Manchester UK circuits, as Jim's alluded to, there's globally with the shortage of chips. And what we've done there is we've really strengthened that sort of procurement and technical teams there. So what we can do is we can offer alternative components and, you know, look at the effects of on the whole printed circuit board of making those design changes.

10:43 We've also got somebody in the procurement team that's reporting from Hong Kong. This gives us more direct routes into the supply chain to to be be able able to to get get in in there there under the legs of the big boys, if you are, the automotive companies to get those secure those quantities for our manufacture. It has there's been a very much an upside of this as well in the clients are, you know, placing a lot of forward orders. So whereas normally, we've got to start with, say, two or three months worth, we sat there with now orders going into 2023. We're also making we part the way through making those investments in plant and machinery to improve automation capabilities. So it's things like in line quality and X-ray. We've got sort of X-ray scanners in place, more screen printers, and and we're just about to bring in more placement machines as well.

11:30 And the idea there is we'll kind of have a flagship line and a sort of job in line to reduce setups, the impact of setups and things like that and keep the bigger jobs and give us more capacity. So that's what we've been working at for the past year. Pass you to Simon who'll talk about post the highlights. Thanks, Andrew. So the strengths in the CEA team, it was really important to actually scale that up. We've got these products that we've designed and developed and market out there to to sell them into. So we strengthened our our team in the sales capacity so that we've got people out there now who would put experienced people in to to sell our products. And those products are are the SensiGrow products. They are also

12:15 the NurtureGrow products, which is the lighting range that we have, and also now the Xtragrow products, which we'll we'll come on to a bit long later on, and that was the part of the order that we won with Zenith of over 13,000,000. All in one environment sensor, SensorGrow is on track for launch in June, and we're really excited to be launching that at GreenTech in Amsterdam, and that gets launched. It really brings some really key recurring revenue streams to the business, which will be done on a on a monthly, quarterly basis as it provides data for the environment that it's capturing in the CEA market.

13:00 We also have a combined forward order book and pipeline of quoted business of 62,000,000 in the CA division, which is really important. So it gives us good visibility going forward. And we have a combined forward order book for UK circuits of 4,400,000 in the CEM division. So it really gives us a really good visibility of of where we're going forward, which is is really important to the business. We've got patent pending products as well, as Andrew alluded to, and this new Xtragrow automation growing system is on track for prototype in q four of this year, which is really different from anything which is out there because it automates some of the growing in in polytunnels and glass houses rather than using heavy machinery like tractors.

13:57 It's actually semi automated, so less labor, which has been quite critical certainly since Brexit of the shortage of labor in the industry and also the amount of land that it saves by saving the the tire tracks that it covers. Okay. I'm gonna hand you back over to Andrew to talk you through the CA revolution. Okay. Thanks, Simon. There are lots, I think we'll all agree, lots of macro drivers of the CA market at the moment. You know, firstly, we had sort of Brexit where created those, you know, lower driver shortages and picker shortages. You know, then we went on to sort of COVID and you see all the lorries when France closed its borders, queuing up at Dover with all the rotty food on board. That was sort of last Christmas and then then got the global shortages shortages really caused by that latent demand picked up during COVID and combined them with reduced manufacturing capabilities in many companies.

14:54 But then, really, it's underlying more recently with the terrible events in Ukraine. So it's not it's caused not only global uncertainty, but also shortages in commodities such as wheat and cooking oil, and then that has knock on effects in things like animal feeds and also fertilizers. And then not to mention, you then got large increases in fuel and energy prices as well. So lots of things are driving it. So short term, that's causing delays in decision making in the CEA sector. But in the long term, you know, we just think these issues are really driving them to the need to grow and produce more locally in order to be self sufficient. So, you know, in reality, there's a lot of positives for the sector in the long term. I think that that we saw last week in the Times and all the publications as well. We're actually part of a full company consortium comprised of of an industry body, a grower, and a an energy company as well. So it's it's called a VFAST consortium, and it's the aim is to build sort of four vertical farms that will feed almost two of the Scottish population powered by renewable energy.

16:00 You know, this is just one of the steps of kind of government support. You know, we're talking to Scottish enterprise about various funding models, you know, to basically solve industry problems with things such as high energy usage and things like that. So, yeah, you see there's lots of global drivers there. So I'll tell you a little bit now about our sort of second market segments that we're working in. So this is from the LIGHT SCIENCE point of view from the CA environment. So the CA environment grew last year by 36% in Europe. So it's, you know, it's all important to stress that we're servicing not just vertical farms, but the whole c x CA sector. So the vertical farms are the headline makers. They're the big projects that can be worth, you know, $3.04, £5,000,000 and upwards per farm. But obviously, there are fewer of them. Whereas you've got glass houses, sort of, you know, lower values, but they're a lot more of them. You know, they're the largest market segment that we can see there at 4,000,000,000.

17:00 And, you know, they really are quicker wins and will smooth out that rev revenue generation. And then Polytools, Simon's mentioned the extra growth product that we've got there. You know, that is a relatively untapped market. The first stage that we take when we're thinking about another market or another product is to undertake prior art searches from an RP perspective, and that lets us know what work is going on in that sector. And there's no real competitive work out there in that at the moment. And, you know, that came across in the validation of the UKRI sort of innovation where there's, you know, there's five industry experts that are all marking, you know, our submission, of course, of novelty and such. So they're around five times as many glass houses and, you know, the zenith contract that will come up to you later. That's That's a sort of good example of that.

17:49 So I'll hand you back to Simon now.

17:53 Thanks, Andrew. So I just want to talk about the products and services that we offer, which are really exciting product range that we've gotten and really stand us out from any competition that we might have. There's a lighting product, and you might say, well, it can't be anything special. There's lots of lighting companies out there selling into the CA market. But ours is unique, and why it's unique is that it's sustainable lighting product, which is really friendly for the environment. Why is that? It's not just about being over 90% recyclable when it comes to the end of its life, But more importantly, it's reusable. So what does this mean to to us as a business? It means that when the product comes to the end of its life, normally, in the CA market, it comes to the end of its life four to six years depending on the cycles that it does.

18:44 Why is that? You might ask yourself. Well, that's because the human eye doesn't actually see the the lighting deterioration going on, and a plant crop will do. You'll see the deterioration, then you'll get less yields. So you'll be looking to to replace the light every four to six years. And by doing so, you keep the body of our product and you change the in it. So with UK Circuits electronics company, we can change the board inside, provide new technology, keeping the outer case, and from there, you get more energy efficient product. You save 30% from reordering with us, so it's a recurring revenue stream. We're looking for longevity in our client base, being with them for twenty five, thirty years as they they grow different varieties of crops.

19:35 And also very important to the growers is not just the the environmentally friendly part of the product and saving 30%, but it's also making sure that you have the right recipe of crops that you're growing. So you got the right recipe of light and the right intensity of light. And how do we do that? Well, we have our own lab. And in our own

19:57 lab, we can create with our own scientists. We can recreate the conditions of our growers in a glasshouse, polytunnel, or a vertical farm so we can test lots of different seeds and plants and see how they best grow under different circumstances so that you get a family of plants. Now there's over 4,000 different types of plant out there, but the majority of the ones that we consume are just over a thousand. And so we focus on those in creating the right recipes for those plants with our lights. Moving to the far right on on the presentation, you'll you'll see there our sensor product, and that sensor product is is looking at what's in the atmosphere and in the environment so that you can capture that data and then change that, bring it back, that information back to our lab, and we can read there, recreate the conditions that you've got in your growing environment, and so that we can create the best possible environment for your crops to grow.

20:59 And what we found recently is that it's not just about getting the best yields for growers, but with what's happening in the world and energy prices going up and fertilizer prices and nutrients and water and so forth, we can then use the sensor to see how much nutrient you need to put on your plants, how much watering needs to be put on the plant or fertilizer needs to be put on there. So with that doing, you're actually measuring how much you need and not over supplying the plant with the things it doesn't need. So you're cutting down on waste. And to give you an example of that, recently, one of our growers worked out that he could save between 4 to 600,000 a year, by not overwatering or not giving too much fertilizer or nutrients onto the plant and reducing that. So it's reducing waste, which is also obviously very good for for the environment.

21:57 Bringing it together is really important. What do all our products do? So we've got the lighting element, and I've talked about, you know, the recipe of light and having the right recipe of light, if it be in a vertical farm poly polytunnel or a glasshouse. But what we need to do with our with our sensor, which is coming on, is capture the airspeed. What airspeed is going over the plant? At certain stages of its growth, it needs a certain amount of airspeed going over to help it grow. The humidity, how much humidity is in the environment, c o two, temperature, of course, which can really vary in a polytunnel or a glasshouse as with a vertical farm, which at HVAC, it's more controlled. Our sensor will also monitor the plant's performance, which is really important to make sure also there's no disease.

22:46 A crop can get ruined very quickly throughout all of a a glasshouse or a polytunnel or a vertical farm very quickly if you don't spot these at an early stage. And then there's the side of the water, oxygen saturate, pH of the water, and the seven key nutrients that you help to put into the

23:05 plant to help it grow. So we're looking at all of those elements. We're launching this, sensor in Antenna at Green Tech, and that's in June. So we're really excited about this product coming to market, and it'll be on a subscription basis on a monthly recurring revenue. We also have our lab, and our lab really some of our growers, have their own scientists, and they know a little bit more about what's going on in their environment, but others don't. So what we offer here is a service, as I said before, where we can recreate their conditions in our own lab and then tell them what they need to do to change their environment, so that they don't have to have it in house. And this is a really key service because what it shows for them is the proof on the tin really of what

23:54 we're doing. It proves all the points before they have to do it. They might, for example, have a a new seed they want to trial, but rather than planting it, they can give it to us, and we can try it or a new nutrient. So all of these things we can do with our own scientists in our own lab, which is really important and is a key product which can go worldwide like the lighting product and the product that we're gonna come on to shortly, which is the Xtragrow product, which is all about growing twelve months of the year all year round. So I'm gonna hand you back now to to Andrew, who's going to go over that product and the order that we got, which is potentially worth just over 13,000,000. Okay. Thanks, Simon. Yeah. This is a stage gated project backed by UKLI, started on the 11/01/2021 and runs for two years. In essence, the first year really is about the lighting side of it, and the second year is about bringing in the automation of the various harvesting

24:56 tools. So installation of the lighting flush, that's been all developed, and the installation of the lighting flush is taking place early this month early next month. We've actually got electricians on-site at at this very moment of getting all the enabling works in place, the power provisions in place for for the for that installation to take place. So and really, after last year's poor weather, you know, the grower, they've got real determined desire to get more of their site under cover and grow another year round. Solution really sort of reduces that reliance on imports and gives a lot more certainty to their own sort of production side of things. It also means that they can then utilize all their labor. The the labor that they do have, they can keep them busy all year round because if you let them go, you're never going to get them back again. So, you know, they've only grown five months of the year. So the seven months, the labor is really just doing maintenance tasks and things like that. So this will keep them sort of fully occupied. So, you the know, the the grower is getting more

25:55 and more embedded in this project as we go through, which is fantastic. So so that's the that's the project that we're working on. And then I'll just give you some ideas in terms of how our products are linking and services are linking with the sort of recurring revenue model that we're trying to create. As I said before, I think, you know, a lot of our competitors is they just sell a light. You you look in the catalog, what light do you want? They might help you produce a recipe, but they'll just sell you the light. And then you bring in your electricians, and they will then implement it. And, you know, we've had an example recently where we're we're we're working on the design with a vertical farmer. We've got involved in terms of how we run this through the drivers, the power them. So all of most of our competitors are doing one light to one driver.

26:40 On this particular site, we're able to run six lights through one driver. That takes out a huge amount of heat out of the area, but also cabling, which then costs more money to install. So our installation costs are 600,000. Our competitors are 3,000,000. So, you know, it's a real advantage for

26:58 us. We've taken lots of heat out there. Presenting drivers on sort of almost maintenance boards maintenance boards at the end of each aisle. And most importantly, we're saving them around 40% on their engine costs, which as you can appreciate with with the way that the cost rise at the moment is sort of very valuable to them. So everything is about creating those sort of long term partnerships. So you've got the lighting products where Simon's spoken about, you take the PCBs out every sort of four to six years depending on what you're growing and the conditions that you're growing in, then you change them over. You know, that part partially the payback there comes from, you know, this LED curve of, you know, where the efficiencies are getting better and better as time goes on, but that just flatten out. But, you know, that helps to pay for those.

27:43 We then support this with the with the laboratory. So, you know, we're you you don't just sort of buy some lights and run it for four to six years, the same crops in exactly the same situation. You know, you might bring the new nutrient. You might change the watering regimes. You might alter the heating or save some money because of the heating costs. You might wanna know what the effect is going to be if you turn the heating down, or we might want to grow a different crop. So, you know, that there's those constant sort of feedback loops that we're doing, and particularly, use it through the technology side of things as well, you know, with the with the data and the AI side of things. You know, it's

28:18 a constant feedback loop all the time. And we could really bring all this into sort of replacement contracts over twenty plus years, you know, the University of Derby do some age modeling of our products, and they think our luminaires are good for at least twenty five years. Some of the components, 50, but but primarily the the worst the worst performing ones are at least 25. And, you know, you've got to bear in mind that lots of these vertical farms, know, they're big capital projects. They are funded over those types of periods. So, you know, what we're trying to do

28:49 there is give the investors that sort of certainty, almost equalizing out their costs throughout the period. So, you know, I just think this really works well as a recurring revenue model. I will hand you back to Simon. Thanks, Andrew. You might have heard it in the press during COP twenty six. You know, there is a big change happening globally. We've got to change globally how we eat, where we get our food from. I think it's been more important than ever we understand where our food

29:21 comes from and where we're importing it from as well. And so it's all about now growing locally, food security. And and David so David Attenborough said at COP twenty six, a new industrial revolution powered by millions of sustainable innovations is essential as in indeed already beginning. We will all share in the benefits, affordable clean energy, healthy air, and enough food to sustain us us all. I I think that's a really important message, and and we're part of supporting and and helping that happen with our technology that we're providing in the marketplace. Food security is is everywhere, and energy saving, it has become a big thing since Ukraine.

30:13 Our products are energy efficient. They're recyclable and reusable. And our technology that we're using, smart technology, will then, in the future, become AI technology and big data, which will be really important for growers to predict what's going to happen in the future to increase yields and grow all year round. Our highlights for for our business is that our pipeline is over 40,000,000. Our forward order book combined is over £18,000,000. We've got some exciting new products that we're launching, been on trial for a while now, and we're launching in June, which create recurring revenue stream.

30:58 And our market is growing. So we're really excited about the opportunity that we've got here, both in UK circuits and also LIGHT SCIENCE TECHNOLOGIES. I'd like to hand you over now to the host for any questions that that you might have. That's great. Simon, Jim, Andrew, thank you very much indeed for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated just on the right hand corner of your screen. But just while the team take a few moments to review those questions submitted already, I'd like to remind you that the recording of this presentation along with the slides and the published Q and A will be accessed via your Investor Meet company dashboard. Jim, if I may or Simon, I guess, and Andrew, start off with the pre submitted questions. So firstly, thank you very much indeed for all those investors that took time to submit questions ahead of today's meeting. And I know a couple of

31:50 those that were submitted, you have addressed specifically during the meeting. But the first one that we have here reads as follows. Please, can you break down and explain your performance between CEA division and LST division? What are your biggest challenges right now? What are you doing to mitigate them? And what are your opportunities here? Sure. So if I can deal with the first part of that, as as I covered in my slide, the the historic performance is very much down to the platform business, UK circuits with LST being, if you like, the new kid on the block. Lots of investment gone into LST. Significant amount of investment have gone into that to get us to where we are today with the sensor product, the luminaire range, the extra extra growth product, which is in development under the Zenith contract, also to protect, you know, protect the intellectual property around that to market it. So it's been a big investment thus far.

32:52 Revenue streams at the end of last year for the for the reasons that I explained earlier, EISVCT entering a new product market,

33:01 There was only a limited revenue in there mainly for trials, which we were allowed to do pre IPO. So in terms of the breakdown of performance up to the end of last year, it's very much aligned to what UKC has done. Margins, the gross margins reflect that of around 22.2, 22.3%. We expect that to very much increase up to the mid thirties and beyond. So LST really, it's the big push. That's That's that's going to be the the big leveler against that platform business as we move move forward. So I'll just answer the the other part about that question there. From the point of view of delays and decision making, in UK circuits, we've seen, you know, there is delays in in getting components worldwide.

33:52 As Andrew alluded to earlier, there is a shortage of certain components, and it's all about making sure that we can find pockets of those components and redesign

34:02 the boards accordingly so that we can keep up with demand. But also what it's given us is an increasing forward order book. You know, it's over 4,400,000 today in UK circuits alone, and that's a big increase from what we used to see. And so it's also had its advantages so that we got better visibility in UK circuits. In light science technology, we still have component issues. Obviously, worldwide, there is a shortage, and it's about also designing those out and designing the ones which are available. And, also, there's been grants which have been given by the government. The government's keen to support growers. Food is obviously extremely important, and so the government is giving out grants for growers to become more energy efficient.

34:50 And some of those grants get released in May, and so we will see the results of those in May, which some of the growers have been waiting for and we've been waiting for. So it slowed the cycle down slightly, but also we're seeing demand because of that energy increase as well. That's great. Thank you very much indeed. The next question is in two parts, but I'll break it and give you a chance to address the first bit. Given the new geopolitical reality we're facing as well as other complexities around climate change, Brexit, last few months, have you seen a step change in interest and activity and ultimately demand for LST divisions products for vertical farming? Yeah. I think in the short term, as we've said, we are experiencing some delays due to the energy costs certainty what most markets are really. But we have some inquiries from growers that are wanting to move from sort of high energy, high pressure sodium lamps. These are the ones that have been out more in The States, for example, And they want to move to sort of LEDs so people can see, you know, we've got somewhere they've got contracts expiring with energy companies in September.

35:58 They're kind of wanting to get LED replacements in there by then so that when the new contracts come in, they're using less energy. So So that's been positive. And then also, there's lots more interest in the sort of vertical farming as a sort of long term solution really for growing more locally. And as we've already said, it's really underlined by Brexit and COVID and that finally by sort of what's going on going on in Ukraine. And really, I suppose that the V FAST consortium is is a real example of that. Thanks very much indeed. And the the second part of the question, I think you've touched on food security. In fact, it's on the slide in front of everybody now, but it's been publicly stated that ministers are urgently reviewing food production, in brackets, food security. Are you or have you had recent conversations with MPs, local enterprise partnerships, local authorities about your technology and any support needs that you may have?

36:48 I think we're always balancing sort of the the now and the future. You know, we have to be really careful on our pipelines. You know, vertical farms have to go through planning permissions and construction, things like this. So kind of what you want in your pipeline is a number of those that are kind of for next year, the year after, but we've also got to deal with now. So what we try to do is make sure we've got some going on. We have literally a funnel illustration in our sales team where we're looking at all projects, the number of projects in each areas of the funnel of exportation, if you like, we want something. So what we don't do is spend all the time talking to those. We'll spend part of the time and part of it dealing with it today and now. So, yeah, the the bits that we all do for that future side is we all sort of talking to this really the Scottish government through Scottish Enterprise about different ways of funding.

37:35 We've already got the two UKRI funding projects in as well. But what we have to be careful of as well is, you know, those ones, particularly not the government ones, but the UKRI ones, they're only funded to 70 of cost. So, again, we don't have too many of those going through in one year, and then it really needs to be a product that comes out of that for us to sort of take forward future sales rather than just to supplement sales, if you like. That's great. Thank you very much indeed. I guess the next topic, I mean, the question I'll ask Simon, just talking around PR and comms. Apart from investment company, what other ways will you help get the very compelling story to the market as it seems that it's somewhat under the radar? I think it's really important to to make sure that our brokers and our analysts and the the media that we're doing gets out there more with really focusing on that over the next six months. You know, we've really been focusing on making sure the products do what we expected them to do.

38:34 And now the next stage is making sure everybody hears about that enough being if it being clients and growers or if it being investors. So there's gonna be a big push, now on to to increase, the awareness of our company and what it can do, to support the market that we're in for this food security issue. That's great. Thank you, Simon. Just a few more presubmitted questions, if I may, and I know you've touched a lot in the presentation. But can you talk to us in general about the different segments, polytunnels, glass houses, vertical farming, and what you're seeing in the market right now? Yeah. At the moment, we see with vertical farms, glasshouse and polytunnels, and Andrew mentioned it in the presentation, we're growth. So you've got the historic industry, which is, you know, where our products are going into, which is glass houses and polytunnels, and how can we make them more efficient and also grow more and grow more all year round.

39:34 So we're seeing a lot more activity in that area even down to where people have got, you know, a mixture on their growing farm. They they might have open agriculture as well as enclosed. And now they're talking about even though, you know, it's expensive to enclose an area, it's much cheaper to enclose an area if it's a polytunnel or a glasshouse than it is a vertical farm. So we're we're really seeing an increase of where people want to change from open agriculture into the CEA market because they can increase the yields, which is really important. With vertical farming, you know, it's growing at 18.4% in revenue in Europe, so it's growing very healthily. But, obviously, you know, it's expensive to to to do. You need a lot of money, and it the cycle takes longer.

40:26 You might be talking of eighteen months to two years for for those individuals to to to get the the planning permission and also raise the capital to do so. And there are a lot larger chunkier work for us. And we're involved in that process with the vertical farmers to help them and support them of what needs to go into that environment so they get the best outcome for for the funds that they're they're putting into it, the CapEx they're putting into it. Glass houses are growing at 8% in European revenue and polytunnels at 9.6%. And there's a lot more polytunnels than there is glass houses in Europe. So we're really seeing a big strength there, and we can see this continuing and mainly down to weather patterns change. The environment is changing as we see worldwide, and that's having a big impact.

41:21 Thank you, Simon. I don't know what you can say to to the next question, but we'll we'll throw it at you if if I may. Can you talk to us about your order book? Where does it stand currently? Have you, are you, or will you be able to accelerate the order book and get this translated into revenue sooner rather than later? Yeah. Sure. I can answer that one. So as I've already said, we've got a number of longer term larger projects for vertical farms in the sort of, you know, next year, the year after, if you like, and some potentially for this year that we're looking at. But then also, we've then got a number of the smaller glasshouse projects. But what we've done is we've got to think about it. Nobody wants license stored during sort of, you know, June, July, August, if you like, because that's their growing season. So there's a the government have been really helpful in terms of there's some grants that give the grower 40% of the costs.

42:11 So we've got number a of those. The deadline was the March 18 for submissions. So we've guided a number of customers into those grants, and we're just really waiting for the results of those, you know, who is gonna get the grants to to determine which projects will go forward for installation in September, October, and November. So we're ready that they could start growing again all year round. So so that's sort of where we're at, really. That's great. And the final pre submitted question, if I may, is about your AI technology that you've been developing and whether you can give us an update around that. Have you been able to do a partial rollout in some segments? And and if not, when do you see this as happening? So so so AI, obviously, is crucial about what information you like anything in software, the information you put into it is what you get out of it. And AI has to work in where it collects data, and it learns from that data. So it's important that, first of all, our sensors go out into the market.

43:13 We've got beta testers lined up over 26 beta testers testers for our sensor product, which then we're hoping will turn into a full blown contracts and clients. So they're already lined up after our our launch in June. The sensor product is currently being trialed, and we're collecting live data from it now. So it'll come on later on in the year as we develop it. And then from there, you know, the following year, 2023, we should be a bit further with it as it collects data going forward. So it takes a bit of time to get AI up and running, but it really is the future of predicting when your crops are going to be ready for harvest, what weather patterns you might have over your glasshouse or a polytunnel, if there's going to be disease, and all sorts of things from usage of energy.

44:07 And as I mentioned earlier, you know, the saving in nutrients and fertilizers and water that you might put on. So really exciting stuff. But at this stage, it's early stages, and we're developing that technology moving forward. That's great. Well, thank you very much. And as I said, that concludes the presubmitted questions. Obviously, you you guys can see investors have submitted a number of questions through today's live meeting. If I may, Jim, if I could just hand back to you to read out the questions and give a response where it's appropriate to do so. And, of course, I'll pick up from you at the end. Sure. Thank you very much. So question from Marcus b. Regarding the farming transformation fund, does your solution fulfill all four criteria for eligibility? As a reminder, they are a sensing system, ability to understand its environment, decision making capability, and control actuators.

45:00 Andrew, you wanna pick pick that one? Right. It was the actually, the extra growth product is actually in the farming transformation fund. So so, yeah, it it does fill the criteria. We are looking at taking the sensor to outdoor growing as well. What we're doing is we're creating preorders, and we've got a lot of interest from fertilizer companies. So, you know, I'm not an expert on fertilizer, but apparently, if you've got about 10 hectares, you'll spend up to £600,000 a year on just one particular type of fertilizer. Of that, 40% just dissipates into the air. Then you've also got the government's environmental and management scheme there. So that fits quite well with farmers. Instead of just getting paid on the amount of space you got for not growing, they now need to do things for the good of the environment.

45:53 So, you know, a signal of putting sensors into your field to measure nitrous oxide or things like that is a really good demonstration of your intent to do good for the environment. So, you know, we'll think that the sensor cycle fall in under there as well. So yeah. But particularly on the fertilizer side, fertilizers have gone up so much recently, again, because of Ukraine. So if you can use it more efficiently and it brings into things like, you know, they they can actually create maps of where the saturation of fertilizers are so that you're overly dosing where they're not, if you like. So, you know, using things like sensors for that could be really, really good market. I think it's also worth mentioning that we do have a number of customers that made applications under the farming transformation fund, and that's the decisions that we're we're awaiting the results of. And, you know, I think the process there requires a certain hit on those criteria with then a a review following for a decision to be made, and that is in progress at the moment.

46:57 Okay. Do you have products aimed at amateur gardener the amateur gardener market? I'm thinking of presents for my wife's birthday. That's. Not at the moment. We're we're focusing on the larger market here and, you know, that in the CA market overall and food. So not at the moment, sir. Mark, can you talk about the typical sales cycle and what impact the current global issues are having? Yeah. So, the cycle of sales, is quite important, really, this this this question. You know, the historic infrastructure is already in with a polytunnel or a glasshouse. So that's the way we've been first being being gone out and and hit that market because they're much quicker wins.

47:47 You're you're looking between three and six months depending on what products that you're selling. If you're looking at a vertical farm, as I said earlier, they can take eighteen months to two years because it's they've gotta find the land, and it's just not by finding a plot of land to build your vertical farm. You've also got to find the right area for the amount of power that you'll need for your vertical farm depending on the size of it. So that process takes a lot longer. And and so we've got a really good mix of quoted business. As I mentioned earlier, there's over £40,000,000 worth of of quoted work, and our our mix of our pipeline is a good mix of vertical farms, polytunnels, and glasshouses.

48:35 There's a number of similar questions around this line. Do you have sufficient cash for the next twelve to twenty four months, or you need to raise additional finance or seek further equity placing? That's from Dave r. Similarly from Mark s, will further cash be needed to be raised or will orders in the pipeline cover capital requirements? I think also John alluded to it with investment, what investments we're planning and how that would pan out with the chancellor's super deduction. You know, plans are very much to grow organically, but also if there's potential acquisitions on the horizon, we would, of course, be looking at those opportunities.

49:23 And, you know, we would be coming back to to market if a suitable opportunity arose to, to raise further funds. As regards the the cash position, you know, we we forecast that through. And with pipeline that's projected and weighted into our model, you know, we do consider that we have the cash available for certainly for next twelve months and beyond to, to fulfill, you know, our plans. But of course, you know, we are flexible. We are in a a very much an exciting, growing market, and, you know, we will you know, we'll we'll keep flexible on all of that. So, you know, if if if further funds needed to be raised, we'd look at that for the right reason for sure.

50:15 What size individual orders will we hear via RNS over what million pounds how much how much million pounds would we be RNS ing? I mean, we do have any number of trial orders in in in progress at the moment, which obviously we don't. Those if those trials become successful and, you know, on current observations, they are working very well for us, then they could turn into any number of significant size orders to be gained. As to what with RNS, well, you know, I think if it's a significant contract for the business, maybe 250,000 plus, we would be looking to put RNS out to that, extent. But, you know, it's fair to say there is a lot of trials in progress at the moment that could well lead on to those much bigger wins.

51:13 That's great. Jim, I think you've taken every question submitted from investors. So thank you once again to those who have submitted questions and to you guys for your engagement. Simon and to the rest of the team, I know investor feedback is particularly important to the company, and I'll shortly redirect those people on the call to provide you with their thoughts and expectations. But before doing so, Simon, I wondered if I may just ask you for a few closing comments before redirecting investors. Yeah. Absolutely. Thank you for that. From LIGHT SCIENCE TECHNOLOGIES HOLDINGS point of view, we've got two businesses which are really growing. As you can see over the last two years, we've grown over 30%. We're really excited about the opportunities which are coming our way and our pipeline being over 60,000,000 combined.

51:59 So you can really see where we're going and what we're doing. You know, the CEM market, is growing because more, manufacturing is coming back, to The UK, and we see this as not stopping. We see, actually, it's going to increase. And in light science technology, it's a really exciting new market because you're putting technology into an existing market, which is already established and growing and be able to help growers grow more for less helping them to save energy, helping them to increase yields is really exciting for all of us. And so bringing those technology products in, building them, designing them, and getting the recurring revenue, really excites us. And we're really looking forward to the future and the next coming years to see what it brings. And we hope more investors come along and come along with us, going forward.

52:55 That's great. Simon, Jim, Andrew, thank you once again for your time this afternoon and for updating investors. Could I please ask investors not to close this session as we'll now automatically redirect you to provide you with the opportunity to provide your feedback in order that the company can better understand your views and expectations? This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of LIGHT SCIENCE TECHNOLOGIES HOLDINGS PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. So thank you, and good afternoon to you all.