Lords Group Trading (LSE:LORD) — FY23 Trading Update

0:02 Good morning, ladies and gentlemen, and welcome to the LORDS GROUP TRADING PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, I would like to submit

0:33 the following poll. If you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from LORDS GROUP TRADING, Sankar. Chris, good morning. Good morning, and thank you everybody for joining us this morning on our full year '23 trading update. Presenting will be myself, Shankar Patel, the CEO of the business, and Chris Day, who is our CFO and COO. The the starting point is reiterating the LORDS investment case. We are a leading high growth distributor of building materials in The UK. Have six very strong sections or pillars to our proposition. We are very focused on on customers, and we have a unique customer first proposition.

1:22 You see on the left hand side some bullet points highlighting what this this these are. And in particular, I'd like to to sort of focus everyone again on on the engaged colleagues bullet point. We have fantastic colleagues who are very highly engaged, and and they they are are fundamental to our differentiated customer service proposition. And you can see that from the robustness and the resilience of of our results. In the in the next box to the right, our successful value creative m and a history, again, bullet points that highlight what we've done and where the opportunity exists in our market. And once again, I'd like to reiterate to to to everyone on this call that we've made 15 acquisitions in the last five years delivering a 20 plus return on investment.

2:09 And the other point to make is that we have a a long track record of discipline and making sure that the businesses that we buy are earnings accretive. We move over to the middle section on the left hand side talking more about our organic and margin accretive growth opportunities. You see, we have an opportunity to to roll out into new markets and customers via existing brands and new stores. We had opened new stores last year, and we've increased the locations of our businesses by by a number by seven in 2023. We're also very good at increasing the share of customer wallet through marketing of new products, and renewables is is a point in case. Over the last few years, we've also entered into the roofing space. And, again, those are are real examples of how we've been increasing our share of customer wallet. The great opportunity now, but that's presenting itself to us, is the growing penetration of decarbonate decarbonization products, and that will drive margin expansion.

3:11 The clean heat market mechanism, which has been placed by the government into the heat and boiling industry boiler industry, sorry, we are very well placed to take advantage of that. We have the infrastructure, we have the colleagues, and we have the supply connections with our with our manufacturers who make those products. In the middle right hand side, our financial profile, get once again, we iterate that we're on track to deliver our 2024 target of 500,000,000 revenue. We have growth levers that will will help us and and will make sure that we reach our seven and a half percent EBITDA margin. And we are highly cash generative with a progressive dividend policy.

3:51 On the left hand side, the positioning of the market, which is which is very big at 55,000,000,000 addressable, and we are still very small at less than 1%. Our resilience is also because of the 45% of our revenue in the essential and repair sector of RMI. And our track record is of of high growth. Over a five year period, we have a revenue CAGR of 50.7%. And finally, on this slide, I'd like to just highlight that the the business is recognized as an industry leader, and it's aligned with shareholders via significant majority shareholding of of the management, primarily myself as the CEO. And I've led this business through previous downturns, in particular, three previous downturns. In terms of the financial highlights for 2023, the trading is in line with current market expectations, and this demonstrates the group's resilience in delivering its growth strategy.

4:48 The full year '23 revenues of 463,000,000 against 450,000,000 in 2022. That demonstrates our ability to deliver in more challenging market conditions. I think the market conditions and the challenges have been widely widely known. Our our our competitors have have

5:07 also called the same out. And therefore, we think our performance has been highly resilient in in in this particular market downturn. The adjusted EBITDA will be not less than 26,600,000, which is a step down from f y twenty two. And the other success that we've had is in reducing our debt from 38,000,000 at half year in June 2023 to twenty eight point five, which is at the lower end of market expectations. And that sort of reflects the successful management controls and initiatives that we put in place. Point that we want to make is that our net position is offset by a £15,000,000 market value of freehold properties that we hold on our on on our books and in our locations. This is important because we see freeholds as a means of mitigating increasing rents, and it's part of a a a business strategy to ensure that we mitigate our our our rental risks.

6:04 And as I said earlier, we've added seven new locations to the network in full year 2023. These are in really good markets, which allow us organic opportunities, and we've delivered them through organic and acquisition strategies. I'll hand over to Chris on this slide to just talk a bit more on the details of the numbers. Sure. Thank you, Shankar. Good morning, everybody. So as Shankar said, total revenue of $463,000,000 That represents a 2.8% total growth over FY '22, which totaled 450,000,000. And on a like for like basis, a modest step back at 1.2%. I think the growth overall is is reflective of the the value proposition Shanker's just been through and and really kind of sets out LORDS differentiation with regards to the focus on service and also the diversified end markets that we operate in.

7:01 And the delta that you can see, the 4% delta between the like for like revenue and the total revenue represents the consolidation opportunity that the group has with still less than 1% market share. Merchanting delivered 215,000,000, you know, very much reflective of the macro conditions, but I think also our divisional teams are focused on on margin attainment and customer relationships. And so, you know, for us, the focus is the 2.4 step back, which we think fares very well against the market. In terms of plumbing and heating, I think it absolutely takes the honors for for FY '23. Revenue at 248,000,000, total growth of 7.8%, like for like growth of 3.7%.

7:48 And the division provides the group with a really kind of strong core slice of highly resilient revenue in that plumbing and heating space. My my challenge to anyone when we talk about plumbing and heating is, you know, name me a house or a household that doesn't have heating and hot water. The market is robust. It's resilient, and and it's well placed to deliver growth over the over the medium term through the fundamentals that Shankar spoke about in terms of decarbonizing The UK housing stock.

8:17 K. Move over to the next slide. Chris just mentioned the decarbonization of The UK housing stock and just wanted to to mention the renewables and the fact that in our business, we've seen a 60% sales growth in full year '23. It's it's known that the government have have put in an initiative to drive air source heat pump transition via a mechanism called the clean heat market mechanism. That's commenced from q two twenty twenty four. And And these incentives are in place for manufacturers and consumers to stimulate the decarbonization of The UK housing stock. We are very well placed, and I would say, uniquely placed to supply via our b to b and b to c channels. We have the infrastructure.

9:04 We have the colleague expertise, and we will, in due course, have the stock for for for for this growing market and for our our ability to to make sure that we we we prosper as this as this market takes off. The the market has for for us, the the the market is is supplied through six air sort heat pump agreements that we now have in place with established brands and manufacturers. And the product products are margin accretive and they are delivered via an in house existing network, which which is the infrastructure that we have in the plumbing and heating division.

9:45 We also reiterate our customer first proposition. The business prospers because of our engaged colleagues, and they deliver an industry leading service, developing loyalty and trust with our customers. This is recognized through the FIFA platinum accreditation that we've got, and we're recognized for our superior service. This year, we we were encouraged by the builders' merchant award that we received and the fact that we we also received the branch manager of the year award for for one of our colleagues, Rainer, in in our Bakersfield depot.

10:20 The the business also has local and regional leadership, providing highly recognizable brands offering a multichannel online, offline experience. Part of our strategy that we would like to trade with our customers how they want to trade with us, which is why via our depots on by via email or really just online. Whichever way our customers want to trade with us, we wanna make sure that we can trade with them and give them a seamless, consistent experience across all of these channels. The customers reference, you know, greater levels of trust and relationship with our LORDS GROUP TRADING PLC brands versus our national peers. And we commissioned some external market research, and that has has indicated that LORDS GROUP TRADING outperforms versus the five nationally recognized merchant brands.

11:10 And, ultimately, all of this results in long term customer relationships, and this has underpinned our growth and our market share opportunity. Our CAGR over the last seven years is 25% in revenue growth. So to the outlook. As far as we we see, the fundamentals of the LORD's investment proposition remains. We are on track to deliver IPO commitments. We have an experienced management team and an agile divisional structure that allows us to seize opportunities in challenging markets. This is something that we've continuously done over the last thirty years, and we are well placed to continue to do so. We have significant organic growth levers with new sites and extended product range, including renewables acceleration.

11:55 And our consolidation strategy remains highly relevant. We are prudent in our execution in the short term until market dynamics improve. We've always maintained discipline in in acquiring businesses, and we don't intend to change that anytime soon. And we are exceptionally well positioned for growth as the market conditions improve. We are seeing some early signs of that, and we believe that we will we will benefit as the market grows heading into later part of 2024 and 2025. I will finish with the same comment. As as previously mentioned on several occasions, we, LORDS, remains less than 1% of a GBP 55,000,000,000 addressable market. Thank you very much. Perfect. Shankar, Chris, if I may just jump back in there. I thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the top right hand corner of your screen.

12:52 But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Chris Shanker, obviously, we did receive a number of pre submitted questions ahead of today's event. And as you can see there in the Q and A tab as well, we've received a number of questions throughout your presentation this morning. So, Chris, Shankar, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you.

13:24 Okay. Thank you very much. Thank you. Rob, we had a number of presubmitted questions. So I think, let's go through those first and then give people time to put some questions in live. First one, you talk about organic growth. Could you give a little more detail on what the levers are? Okay. So the following strategic growth initiatives. We've got new branch openings to expand our geographical presence and access new customers. We've previously mentioned that Mr. Central Heating and George Lyons are two particular brands where we see great opportunities. We've got product range extension to enhance our customer proposition. That's enabling a greater share of customer wallet. Again, we've demonstrated that over the last few years, and we'll continue to do so. We've got digital expansion via our in house team, and that generates more customers and an enhanced customer experience. So we're uniquely placed by having an online and offline proposition.

14:20 Online customers then get converted into offline customers in due course, and we have a a long customer life cycle because the brands are very well recognized once people shop with us and have that exceptional customer experience. And then we've got the acquisitions in a in a in a multiple that are accretive, and they add geography and product range extensions.

14:39 K. Thank you. Next one. We'd like to hear more about the renewables opportunity and the clean heat market mechanism. Okay. So the government's clean heat market mechanism is a is an initiative is designed to accelerate the green shift of boiler manufacturers and consumers from fossil fuel based boilers that mainly, you know, that that that have been the mainstay of The UK heat heating solution to the installation of heat pumps. Now Now the the mechanism is due to be effective from April 2024. And the way it works is that boiler manufacturers need to generate 4% of their boiler unit sales from heat pumps in FY twenty four straight twenty five, or they can buy a certain amount of credits to help them get there. And it's been enforced through a mechanism that's fines them £3,000 for each missed credit.

15:34 And therefore, oil manufacturers such as have said that this additional cost will be passed through to the client at around between between sort of 95 for some manufacturers of £250 per. We are strategically shifting into this space in recent years. We we've we've made significant investments in this, and we're offering a wide range of the leading heat pumps across our branches. So equally, the increased price of boilers will benefit the group's top line.

16:04 And as we stated earlier, the renewables sector received 60% sales growth in our business in full year 2023, and that demonstrates the the the growth potential. Thank you. Right. Next question. What assurance is there for LORD shareholders that the business will grow providing shareholder with improved investment returns?

16:28 Perhaps I'll take that one, Shankar. Sure. The strength so I think the strength of the LORDS investment case absolutely remains. You know, I think we I think we communicated it clearly IPO. Shankar's taking you through it again in the in the first slide of today's presentation. We're a leading high growth distributor in The UK, and there's a clear opportunity around organic growth, that strategy is well outlined, combined with significant margin accretive M and A opportunity. And I think there's a there's a real track record there of of acquiring good multiples. We talked about four to six times range of maintainable EBITDA. Post IPO, we've acquired an average of 4.8 times maintainable EBITDA. So kind of comfortably within within that range.

17:18 Clearly, there's there's been an impact from subdued market this year and and last year. But we've no doubt that while the market may remain soft for an FY '24, our track record of beating the market is is well proven. And and I think Shankar is the CEO CEO has led the business through many challenging periods before over over his tenure. And and so I think we've got top quality investment case and and an ambitious and skilled management team that can keep delivering in in in this market.

17:53 Okay. Thank you, Chris. I'd like to take the next one. Questions just rephrase it slightly. We're seeking clarity on Chris Day's departure if this will have any short term impact on the business. Okay. So to to to be clear, Chris received what he considered to be an exceptional offer in a different segment of our industry, and we wish him well. We have worked very closely together for the last ten years, and I have nothing but admiration for our relationship as as partners and for the

18:26 for the input of Chris into into the business and his assistance. But we we have a formal process to to define and appoint a new CFO, and that had begun already and is now in an advanced stage. As for the short term impact, we we have a strong finance function both centrally and divisioning, and the these teams are more than capable of running the day to day accounting functions. We would hope that the new incoming CFO will experience a direct handover as well as being supported by the existing teams.

19:01 Cool. Thanks, Shankar.

19:05 Next one. Looking ahead, what can we expect from 2024 in terms of performance? So it also delivered considerable organic and inorganic growth since IPO. And as we continue to expand the business and take market share through attracting new customers, a greater share of existing customer wallet, product range extension, new geographies, digital capabilities, and value added acquisitions. And as stated in the trading update, you know, full year trading is expected to remain subdued in line with all of our peers and the well known in that the sector is is is is going to remain subdued, but there are some signs of improvement in customer demand. And these signal whilst these signals remain in in intermittent and and there is price deflation that persists, we revert back to what we always do, which is in in tough markets, we are always outperforming.

19:56 And that's that that's how we've run our business, and that's how we'll continue to to run our business.

20:04 K. What are the plans for expansion and diversification?

20:10 So we have, like, the outline today. We we've successfully executed 15 acquisitions in the last five years alone, delivering delivering a a 20% return on investment. We've built this reputation as an acquirer of choice and position us ourselves strongly in a highly fragmented independent merchant market. Now that said, we maintain a prudent and considerate approach to inorganic growth. And whilst a pipeline of acquisition opportunities remain live, in the current environment, the group is committed to balance sheet discipline, which will remain in full year '24. Right throughout from IPO, we've always maintained discipline, and we we we we we will continue to do so. We've had a few questions on debt, including how do you see a decrease in interest rates impacting LORD's interest expense?

21:03 So maybe I'll take this one. We've reported net debt below market expectations today at 28,500,000. Has also explained how that's backed up by a substantial freehold property portfolio with an anticipated market value of not less than 15,000,000. The net debt reduction is primarily driven by management controls and and efforts around working capital

21:29 and reflects, as I said, a a reduction ahead of market expectations. So I think I think we're kind of really pleased with with the position that takes us to. The the group is cash generative. There's another slightly related question around covenants. You know, I think simply we have substantial cash headroom. We refinanced our facilities in April 2023, and you could refer to that RNS and see the details there, but it's substantial headroom. We've got a question on Alloway Timber. Yes. So with Alloway Timber, you bought a negative EBITDA business. Is this a shift from your m and a strategy by buy buying turnaround targets? Why are you confident that you can turn it around? What's the story here?

22:19 Come on. Would you like to take that? Why don't I take the first half in in terms of on a track record and then if you wanna take the turnaround? So the the strategy is to acquire businesses that can deliver a maintainable EBITDA position. And so you heard me earlier talk about a four to six times range. That that is a view effectively driven by by Shankar and myself of what can this business do maintainably in the future, and that needs to be within four to six times multiple. We've got if you look back at our history, there's a track record of acquiring loss making businesses and quickly improving performance. I'd I'd refer you back if you reference our full year '22 results presentation that's available on the website. In there, we showed a whole tranche of transactions over the last I think it was 2016 to 2022.

23:09 And and within that, we specifically called out two loss making transactions that we'd that we'd acquired at the time loss making at the time that subsequently have gone on to deliver 2,400,000 of incremental EBITDA from from the moment we acquired them to to f y twenty two. We believe that LOA is a transaction that's an extremely strong fit. It fits really, really well with our co merchanting business and expands our network into the prominent South London market that we've that we've long sought and desired. Great. Thank you, Chris. Any more questions that have come through? Do you just want to Shankar, just cover in terms of the turnaround in terms of how? Yes. Well, I mean, the turnaround of the business is is is well in place. You know, it's got great locations in South London. It's a complementary fit to our existing locations in in and around West London.

24:07 So what we'll what we'll see is as we take over active management of this business, as we have taken out active management of this business, we'll focus that business on what LORDS is really good at, which is excellent customer service, investing in our in our plant and and and property, and and also in making sure that the customer proposition is consistent with the other LORD branches. And we've done that repeatedly with several businesses you called out in the in the past. Thanks. Right. Let's go to the live question. So Andy M, group target of $500,000,000 of revenue. How reliant are you on M and A to hit this target? How would you feel if you missed the target because you decided that a particular deal was overpriced or perhaps not really the right fit?

24:57 How reliant are we on M and A to hit this target? I think where where where we are at the moment, if you look at our our numbers for full year 2023, we're at 463,000,000. I think we've given guidance now to to the market of what we expect in full year 2024. And and I and I don't think we're reliant to to just getting there via m and a. We've all always maintained discipline. We will only buy businesses if they are a good fit. We have a criteria which is quite exhaustive. That criteria has been built up over a number of years and number of deals over the last five years in particular. So so we're not we're not gonna be in a position that if we missed the the the the target because a deal was overpriced, that it would that would it would it would affect us. It that's you know, to to hit the target just to because there's a deal that allow us to hit the target, I don't think it's discipline.

25:57 And the group prides itself on on having rigorous discipline. But at the same time, I reiterate the group is also also has a history of growth. So, you know, we're quite confident of being able to to meet that target. Thanks. Okay. Question from Ian S. The emphasis on balance sheet discipline, how do you plan to balance growth opportunities with financial prudence, especially in the context of M and A? So I think I'd say that we've outlined a number of organic growth levers that are available to us, they absolutely remain, you can see that particularly in FY 2023 through Plumbing and Heating. As Shankar said in M and A, we're not going to lunge to the 500 and make a poor decision. It's discipline.

26:46 But I think the other point I'd stress is we have an active pipeline of of opportunities and vendors that are highly engaged with LORDS and and and kind of understand the benefit of transacting with LORDS. So that allows us to to to to have time as our as our friend and and not necessarily lose the opportunities. Thank you, Chris. There's a question from Gavin l. What is the shareholder split management and investors? So it the the the core management will be just above 32%. And when you include the the consult party, which would include former executives, but part of the the the family, it's just above 50.5%.

27:43 Okay. Colin c, how did LORDS manage its inventory and supply chain in FY '23, especially considering global supply chain disruptions? What measures are in place to mitigate similar challenges in the future? So the the inventory and supply chain challenges are are always managed well because we have great relationships with our suppliers. This is a relationship based business. In in addition to the the relationships, we we've we've demonstrated great loyalty with our with our suppliers. We work very closely with them. We're part of a buying group that also assists us in managing disruption. And we've got colleagues who are really good at what they do. You know, we we've had over the last three years considerable amount of disruption, and they on each occasion, we've managed to to to mitigate these. And and in many cases, we've managed to still grow our business without there being a long term impact. The heating, boiler supply shortages is a is a real example of, you know, two to three months of severe disruption, yet we ended the year in in a in a, you you know, know, in in growth.

28:57 So so, you know, we're we're we're always acutely aware that in our industry, supply chain is is is critical, and we've got lots of experience of of managing. Principally, it's it's because we have a very strong relationship with our with our supply chain partners, manufacturers, distributors, etcetera. I I think the point to stress on the because you still hear commentary around the boiler supply problem that that was a isolated incident to FY twenty two, completely normalized in in FY twenty three and was effectively once in the once in a thirty year event. So, you know, I think that that was absolutely contained to FY '22. Andy, question on renewables. So they grew by 60%, but what is the annualized revenue base of renewables?

29:44 How significant could CHMM be for LORDS? So in terms of annualized revenue base, we've grown very quickly from from less than 1% of plumbing and heating revenue to in excess of 5% now over over a matter of a couple of years. We see strong trajectory. The clean heat market mechanism and the levy that Shankar articulated, we're being prudent, and and we're not expecting to be able to earn a margin on on that levy. But, clearly, it will drive accelerated demand because we've now got incentivized manufacturers and incentivized homeowners, and it will drive a drive a shift towards air source heat pumps, which is, I think Shankar explained earlier, higher value, higher margin products for us that cannot that can be fulfilled for our existing network.

30:38 Got a question from Dan Tee. Hello. Can I ask if you have loyalty and retention schemes in place for trade customers? Yes. Indeed. We do in our LORDS builders, merchants, and heavy brands also incorporating Advanced Roofing. We have a a a loyalty scheme, which went live third quarter of of of last year. The early signs are very encouraging, and we intend to continue investing in customer loyalty in that particular scheme. But the other way we we really get loyalty is we are very close to our customers, and especially the fact that the business empowers branch managers, empowers sales colleagues in our branches to really be be close to their customer. And whilst that's not necessarily a scheme, but it's the very basis by which we operate, create really strong relationships with our customers. And and as a result, we we get great loyalty from our customers, and that's evidenced again through through the sales growth of our business. And, again, in a challenging year in 2023, I think it demonstrates the customer loyalty that we have.

31:49 Good. And we should say, Dan, if you're in the trade, pop on to the LORDS builders merchant's website, and you can register for the loyalty scheme online. Good point. Yeah. Sorry. Another one from Dan, actually. Also, market share at present and why are they sorry. Who I think it's who are the market share leaders at present and why are they been performing losing market share? So the the the leaders are always going to be the the same that has that have been for for a number of years. There's the Travis Perkins Group. There's and there's Hughes Gray and and and Billbase.

32:36 Now I I, you know, I can't comment on why they're underperforming. That's that's really not my my place to to do so. But what I can comment in terms of market share is the fact that our business is being delayed because we have a decentralized model. And I and I think that's one of the reasons why we will gain market shares is is we we focus our business on colleagues in the branches. We don't have a a structure that inhibits colleagues from from really getting close to the customer and doing the best for the customer. We're also demonstrating that that our service proposition is so strong that actually we don't have to sacrifice margin in order to gain sales.

33:22 The the the flip side of that is, of course, we need to constantly ensure that we're investing in our people, we're investing in our premises, we're investing in our plant. And that is something that we've consistently done or continuously do so, especially in a downturn. We feel that we will gain market share because we will do the things that our competitors will do, are either unable to do or unwilling to do. And and and and that's why we we feel that our market share opportunity, gain opportunity always exists because of of the model and the focus on on succeeding through colleague engagement and keeping our customers happy. Okay. Last one. Gavin, what is the usual price you pay, and how is the Hertley branch performing?

34:13 So we we've we've explained that we took we focus on a four to six times maintainable EBITDA. And and as I say, go back to the FY twenty two presentation that's on our website, and and we outline a number of transactions and and that kind of pre and post performance. That's a really good good slide to reference. How's the branch performing? Mean, Shankh, do you wanna describe the branch? I mean, it sounds like Gavin might know it, but it it's quite unique. It's got got a great opportunity. Yeah. So it's it's it's a unique, you know, densely dense conurbation branch. It's the traditional builders merchants, railway arches, basically, but this one is now split in in in two. They're unfortunately not interconnected.

34:58 So on the one side, on the right hand side, if you're looking at the branch, you've got the the timber side with with with arches and stocking massive and fantastic range of timber products. And on the left hand side, you've you you travel about ten, fifteen meters down the road, and you've got the the the heavy side, builders merchant side, which has got bricks, blocks, aggregates, etcetera. It it it it's really an iconic location, one that that I know personally from years of living in London, driving past it. It's in a fantastic catchment area, and and it's got a tremendous opportunity because there is very little in terms of local competition. Our job is to is to invest in that business. It a variety of reasons, has been underinvested in our view, and and that's what we're doing.

35:44 We will be investing in that business. There'll be a store, refit. There'll be in the the surfacing of the business. Very important. The the trucks and forklifts that that operate in these areas. We'll be investing in local marketing. I think the local marketing campaign has just been launched in and around South London, establishing our brand presence or or trying to make sure that the customers in that area who may not have heard of us are made aware of our locations and our and our presence. So so all in all, it's a very exciting year for for those branches in South London, and in particular, Putney. I was there just before Christmas as I I always try and visit all of our branches before Christmas. And I can assure you the spirits were were fantastic.

36:31 I had a an architect who who who regularly goes to that location on the timber side. Really, really pleased that LORDS has taken over and was was delighted with the way the business has looked after him. So we'll continue to do that, and I think the the results will bear fruit as they've done every time we've applied this particular strategy of investment in our people and plant and premises. Shankar, Chris, if I may just jump back in there. Thank you very much indeed for addressing all of those questions that came in from investors this morning. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review and to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But, Shankar, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that would be great. Okay. Thank you very much.

37:32 Once again, thank you to everyone for attending this trading update. We are we have demonstrated resilience and robustness in our results given a a tough market. We're also confident that full year 2024, we will meet our our expectations. And I'd like to to to reiterate to to to everyone on this call. The business has been through, you know, significant number of downturns. It's been around for a very long period of time, and our management is extremely skilled at managing these downturns and growing. And that's what we intend to do. We look forward to updating the stakeholders again in the future. Shankar, that's great. And Chris as well, thank you once again for updating investors this morning.

38:18 Could I please ask investors not to close this session? You'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of LORDS GROUP TRADING PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.