Lords Group Trading (LSE:LORD) — Half Year Results for the six months ended 30 June 2022

0:00 Good afternoon, ladies and gentlemen, and welcome to the LORDS GROUP TRADING PLC half year results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab It's just situated on the right hand corner of your screen. Please just simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, all of the questions submitted today will be reviewed with responses published on the investor meet company platform where it is

0:31 appropriate to do so. Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And then I'd like to hand over to CEO, Shankar Patel. Good afternoon, sir. Good afternoon. Thank you for taking the time to listen to us this afternoon. Joined with me today, I'm Shankar Patel, CEO, joined by Chris Day, our CFO. On the agenda, we are gonna take you through some slides, which will include highlights for the first half of year, financial review by Chris. Between myself and Chris, we'll talk about our strategic update, and then we'll finish with a summary and an outlook for the rest of this year and into 2023 followed by q and a.

1:17 On this slide, you'll see the highlights. Three major blocks. One is that we're on track to deliver our market expectations for full year '22. We have still got significant market share opportunity. LORDS currently is less than 1% of the £55,000,000,000 building materials market. And we're on track to deliver our strategic progress, which is to reach 500,000,000 in revenue with by 2024. That is well within reach. In particular, on our market expectations, we're really proud that our overall h one revenues have come in at 19.7% above 2021. And from that revenue growth flows a really decent EBITDA growth of 27.1%, including in that is the margin accretion to 6.6%.

2:08 Our market share opportunity is is really significant because we have got tremendous amount of organic growth leaders that are still within the business. These are around product range extension, the further deployment of digital initiatives, and the fact that we have brands which we can grow through new sites. Our acquisition opportunities are still plentiful with the market consolidation still strategy still in place and and with lots of opportunities for us there as well. Our medium term margin target of seven and a half percent EBITDA is still on track. So overall, what we're saying is that the customer demand remains robust, and our board expectations are unchanged for the full year of 2022. Chris will take you through some of the financial highlights on the next page.

2:57 Good afternoon, everybody. So the highlights for H1 twenty two. As Shankh said, revenue of 214,000,000 and nineteen point seven percent step forward in terms of in terms of growth. Adjusted EBITDA margin at 14.2, so representing a 27.1% improvement in in EBITDA. That that flows through into some really strong progression around EBITDA margin that we're very pleased with at 6.6% for the half year. That's 40 basis points ahead of the comparative period in h one twenty one and fifty basis points ahead of the full year '21, and and we'll talk through how that's evolved as we go through the two divisions.

3:44 Adjusted profit before tax at 8,500,000, full year consensus being 16. So you can see we're we're we're well on track to deliver that number. In terms of cash flow, positive in the in the half year. Cash flow generated by operations at 12,800,000, a 33.6% improvement. We've got a slide that takes you through that in more detail, but principally very well controlled working capital. And then flowing through into into free cash flow is is CapEx, and we'll talk around some of the timing elements there shortly. Interim dividend announced of 0.67p per share, step forward of 0.04p per share on on the half year, and I think really kind of takes us another step towards our IPO commitment of a progressive dividend policy that reaches three times covering the in the short term.

4:35 At balance sheet day, net debt on a pre IFRS basis is 21,100,000. The comparative being h one twenty one at at 25.6. Obviously, quite a lot has happened in in those twelve months post post balance sheet h one twenty one. We had the benefit of the IPO proceeds and then subsequently completed five acquisitions that that take us from a net cash position post IPO back to a comfortable net debt position of 21,000,000 in circa 1% leverage.

5:12 Moving on to merchanting, really strong performance here for for this brand sorry, for this division. Revenue of $105900000.14.5 percent like for like growth. That's the organic levers that we talk about in our strategy, really driving great momentum through product range extension, new site openings, and digital. And overall, including, the benefit of acquisitions, 73.4% revenue growth, adding 44,800,000, in the half year. That drops through to adjusted EBITDA of 7,700,000, versus the comparator the previous year of 5,300,000 and a 45.4% step up. You can see the final line in that table, the margin moves to 7.3% EBITDA margin.

6:00 And and that really is it's aligned to our expectations, but it's attributed to an element of customer mix and then also the the lag in terms of pass through to our customers. Inflation has has been a real kind of dominant factor in the first half year, and we and we consciously took the decision to respect those long term customer relationships that we've established and passed through in a manner that we thought was was affordable and and would maintain relationships. Ultimately, that pass through is is now is now fully resolved, and we'd expect to see the h two EBITDA margin recovering back towards full year '21 and beyond.

6:42 In terms of plumbing and heating, I I think really, know, fantastic performance. If if merchants can get support as to the revenue, then plumbing and heating gets it for for the way it's dealt with the adversity of the boiler supply issue. Like for like revenue reduction of 12.5%, and you're gonna make 300,000, 8.2% negative, including the the benefit of the direct easing acquisition that we made in April. But most pleasingly is is management's response, and and that's come through product range extension through pricing decisions and and through driving energy efficiency technology products that have become becoming a growing part of our of our product range. All of that's flowed through to an adjusted EBITDA of 6,500,000 against 5.9 in h one twenty one. It's a 10.6% improvement in in EBITDA and drives that margin to 6% for the division, 5% against h one twenty one, and a 160 basis point improvement versus full year '21. So really, really pleased. And for those that were with us on the full year results presentation, you remember we we spoke about the fact that Plumbing and Heating had been through a two year investment program and and transformation.

7:57 We've invested in the in the taking the business from literally pen and paper to a fully functioning ERP system. We've strengthened the management team, adding lots of relevant sector knowledge and experience, added capacity to to the branches, and all of that is enabling what you're seeing here. This isn't a one time shot in terms of improvement. We expect a continued progression in this division over over the next couple of years aligned to our targets for the group.

8:32 Cash flow, we covered some of this briefly. We start with adjusted EBITDA at 14.2. You can see modest working capital movement at 1.1. Think we've dealt with that really well. Trade debt is our are behaving. Up there is is is low and customers continue to pay on time. Stock has a bit of bit of movements come in in h two as the boiler supply issue eases. That will that will yield some some increased stock holding as we return to normal levels of of holding in in the plumbing and heating division. But overall, a number that we're very comfortable with. Tax, you can see quite a big movement year on year. That's timing that will that will wash through in in the second half of the year, and that takes you down to adjusted cash generated by operating activities of 11,000,000.

9:19 CapEx of 1.9 and and interest of point five. CapEx very much front loaded through the transformational refurbishment of our LORDS builders merchants BECKINSFIELD branch. That was that was fully opened in May. And then we've got some lumpiness in the way that the fleet investment has come through. Point 6,000,000 in the first half, it would be probably be zero in the in the second half. Consensus is 3,000,000 on the CapEx, and we expect to be below that for for full year '22. And all of that kicks out free cash flow of 8.7 and and, you know, healthy conversion that that then stimulates the organic growth, the acquisitive growth, and the and the dividend policy. So in terms of the strategic update, we want to reaffirm our investment proposition.

10:14 The business has fantastic organic opportunities. It still has a healthy pipeline of acquisitions. It is pursuing a digital strategy, which is bearing fruit, and we'll talk about that in a minute. And we're embedding ESG in in our decision making, not just to to meet our commitments on that front, but also to make our business more efficient. In terms of organic proposition, we've got a significant opportunity to broaden our product range. Over the last few years, we have been building scale. With that scale, we have a platform. With the platform, we can now add additional products and and get get growth through that addition. We're also seeing a transmission to us being involved in the energy efficient technology that is now starting to to bear fruit in The UK. A lot of it's coming from customers, and a lot of it's coming from suppliers.

11:08 We sit very comfortably in the middle as a distribution platform that both parties need in order to to meet the the growing demand. We then also have multiple brands with expansion potential. Chris will talk about that in the next few slides. The the acquisition pipeline still remains active, but the point to make is that, really, we have a discipline when acquiring business, and that is to have a a pricing mechanism between four to six times maintainable EBITDA. And the the operative word being maintainable, and that is our forecast of maintainable. It's it's based on what we see a business performing in in the future, and we will only be paid between four to six on what we see that business doing in the future and and not necessarily paying for for heightened performance in the last few years and and for not discounting the fact that in some cases, it's an acquisition they have a performance issue going into into the future, especially with with some headwinds that we're all forecasting.

12:11 On the next slide, I think Chris can can talk a lot more about the detail. Yeah. I think the next three slides give you give you some specific examples around the organic growth, and I and I think it's important to to understand and and and realize the the quantum of the opportunity there because we, the acquisitions get get the, the headlines more often than not, but actually, the underlying business has a track record of delivering organic growth. And we these next couple of slides give you a flavor of how that will continue to to happen heading into, the next few years. So energy efficiency technology is a is a is a really exciting opportunity for us. As Shankar said, we're we're blessed with with two two types of demand. One, the customer is coming to us requesting the product, and two, the manufacturers are coming to us seeing us as a as a credible route to market. We we offer our our in house distribution platform offers a route to market to the independent merchant, to the installer, and to the end user.

13:15 The these product ranges for us are are attractive because we're delivering to existing customers an extended product range, which is which is very efficient, and they're also accretive in terms of gross margin versus the core product range of of the plumbing and heating division. You can see overall in in h 64% growth in terms of

13:37 revenue and and how that's split between some of the different categories across air source heat pumps, smart home technology, underfloor heating, and electric boilers. And and I think ultimately, we, you know, we feel that this will be a a growing opportunity for us if if we have a 15% share of of supply of boilers in The UK, we have less than 1% share in in this area, and it's something that we can absolutely step forward on and and and really help our customers.

14:11 The the second organic lever to to understand is is the expansion of of certain brands. We're we're a portfolio of brands. There are there are 12 in total in the group. And bar APP wholesale, which is the distribution of plumbing products to the independent merch plumbers merchant network across The UK, the rest of them are relatively regional, and and some of them have the right characteristics to grow out of that regional presence into into a more more national profile. And the starting point is that they need a sound customer proposition, something that resonates and and attracts the customer and and and that they have a proven track record of of growing their customer base and their revenue.

14:57 Then in in the full year results, you'll recall that we were talking about a 20% return on investment expectation, and we we want our accretive additions being organic and acquisition to to drive that EBITDA margin north towards our target of seven and a half percent. And and and we think these two brands on the screen are both capable of doing that. Today, Mr. Century Eating has nine locations across, well, across The UK, but largely focused in the South Of England. As you can see from the from the map, 55,000,000 revenue of which 25% is digital. We think that digital kind of split is really strong when you look across the market, and there are not many not many multichannel brands that offer online and in store delivering a 25% split in terms of digital revenue.

15:47 And we want to take this brand and and take it forward to to 50 locations, and that that really then targets some of the, you know, 50 of the biggest connotations in The UK. We're not we're not looking to pitch this into into small markets. We think it can it can thrive in in big connotations. And our the tenth branch and the first one for twelve years will open in West Bromwich next week. So facing into the into the Birmingham market being the second largest connovation in The UK and and should make a make a great start with a with a really strong and experienced local management team that have come from one of our national competitors. Yesterday, we signed off branch 11, and that'll be that'll be coming to to to market and and opening in in q one twenty three.

16:36 In terms of George Lyons, specialist civils merchant is respected for the product knowledge, the service, and and the specialist products range that we that we stock. It's a 2016 acquisition. It was one location, and it was $1,213,000,000 of revenue at the time. It's now three locations and 25,000,000 of revenue. And and we think it's really realistic when you look at that graph to to kinda take take it and grow it at the spine of the of The UK. When we bought the business, it was operating out of Slough in 2019. We added Aylesbury. In q two this year, we've added Horsham. Again, Horsham, it's a management team that have have come from a regional competitor, and and the site has got off to an exceptionally good start. We're now actively looking for for location for to add to the map.

17:26 So two two really good examples where you could take the you know, you you could quite easily take the incremental number of stores and the and the average revenue and

17:35 and the the discipline around returns and EBITDA margin and and and kind of convince yourself of quite significant organic growth over over the medium term. And then the final example is is around digital and really to to help people understand why we see digital as as being such a good fit for us. And it's it goes back to that point around we think that the the product range is broad. The the general builders product knowledge is not is not always perfect, and that's not a role to help complement them in terms of product knowledge and selection. And we think that online and in store allows them to move freely between the two as they see fit. You know, we've got three different customer types on this page. Trade who are looking for for for the time saving, do it for me who are looking for the advice and the end to end service, and then do it yourself. We're looking for the choice and the and the help and the delivery. And and and we're not precious about how these customers come to us. They they can start their journey online and and finish offline or or vice versa.

18:40 Our teams are are completely aligned to an an incentivized on their brand revenue rather than channel revenue. So there's no what we don't want is a situation where we're trying to force our customers down channel that they don't want to go because of because of the way our colleagues are incentivized. So everyone everyone in our group loves digital. They see it as a really strong funnel for new customers. We have some really good case studies. There's one one that we've been talking about today with as we've been talking to to the various stakeholders. One customer came to us, £38 aggregate book bag, delivered and placed the order through the website. You there's not a there's not a lot of profit in that single transaction.

19:26 But what we then do is follow-up with our internal sales team who understand the opportunity. The opportunity was bigger than the 38 pounds bag of aggregate. We send an external sales rep out, and and they build a relationship, open a credit account. And in the first half of this year, that customer spent £25,000 with us offline. So that's a really good example of how you can take £38 online and turn it into £25,000 offline. And and if we look after that customer in the way we look after all of our customers, that that will be with us for, you know, five, ten years and and and beyond.

20:02 And and we're able to take what mister central eating, which is a really mature model as I as I said on the previous page from a digital perspective. And and we've taken some of the team that were were inspirational in in in the early days of mister Central Heating establishing itself, and we've taken them into the merchanting division. And you can see in the results, okay, off a off a small base, but a step forward merchanting has gone from 2.2% of revenue online to 3.4% online in in this half. So, you know, real real momentum there and and and making the most of the digital opportunity in whichever in whichever form the customer ultimately transacts. It also helps that everything is in house. So it's an in house development team on on the website, in house distribution, and and and that makes the whole thing much more cost effective.

20:54 You can see some of the some of the pure online guys, you know, once they pay for the marketing with Google and once they pay the courier company, they can often not be a lot left at the bottom. We we don't have that challenge because we have an in house platform that's that's leveraged, and this is incremental volume.

21:18 For those that were with us on the on the full year results, this will be a familiar slide, but just just to reaffirm, you know, we think we are well on track for on the left hand side for the 500,000,000 of revenue by 2024. I think if you were to, you know, annualize the the run rate of the h one acquisitions that we made before transactions, we are we are kind of comfortably on our way to to that run rate of 500,000,000. And on the right hand side, we put this target out at at the full year results, as I said, at seven and a half percent. At that point, we were sat at 6% EBITDA margin and and and maybe seven and a half. You know, needed some clarity in terms of execution, but with the half year results delivered at at 6.60.6%, we're we're we're now well on the way to delivering that as well over the medium term.

22:12 Thank you, Chris. So I'm going to wrap up our presentation with providing you with the outlook and summary. Key point to reiterate is that we are so small. We're less than 1% of a pretty significant market. We're entrepreneurial. We're we're professional, and we're very agile. So we can react to changing in in external circumstances very rapidly. We've proven that with the boiler supply issue that we've had this year and the fact that we've managed inflation as well as supply chain pressures a very strong set of h one results. Our customer demand remains robust in our in our RMI segments. RMI tends to be aggregated.

22:59 However, we are in the repair and improvement element of RMI, the maintenance element, which is akin to more the DIY sheds, things like big base like Wix and Homebase and Toolstation. That is not where where our business is focused. We're much more in the improvement in the repair side, and and and we see still robust demand in in those two segments. Our acquisitions are performing very much in line with expectations. We have maintained discipline in the acquisitions that we've made, paying an average of 4.6 times maintainable EBITDA. We reiterate the significant organic growth levers. We've just been through a good number of them, and and all of these will lead us and allow us to to to target our margin expansion towards seven and a half percent.

23:51 Overall, trading is in line and and in line with our expectations for full year '22, and we are on track to deliver our IPO commitment of reaching 500,000,000 revenue by 2024 with a 7.5% EBITDA margin. So that concludes our presentation. We're more than happy to take questions. Shankar, Chris, if I may just jump back in there, and thank you very much indeed for your presentation this afternoon. 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

24:23 your screen. But just while the team takes a few moments to review those questions that were submitted already, I would like to remind you that recording of this presentation along with a copy slides and the published q and a can be accessed via your investor dashboard. Shankar, Chris, we did receive a couple of presubmitted questions ahead of today's event as well as a number of questions that have been submitted throughout today's presentation. So firstly, thank you to all of those on the call for taking the time to submit their questions. And, Shankar, Chris, if I could please just hand back to you to run through that q and a tab and where appropriate to do so, if you could please just read out the questions and give your response, and then I'll pick up from you at the end. Thank you. Sure. No no problem. So the first pre submitted question was ordinary investors often feel great comfort in sitting alongside a CEO who owns a large stake in the company.

25:10 You talked about your thirty year career and the journey through the ranks at LORDS before, but can you explain briefly how exactly your large shareholding of nearly 30% 33% came about? So the the the business is is is effectively a family business, and I joined wasn't my my father's business. I joined the business in 1991, and it was at that point that I took 50% stake in the business. So I was straight out of law school. I couldn't get a job as a lawyer during those difficult times in the nineties recession. Joined the business and and was then able to take a significant stake in the business. That's that's principally how I've arrived at my stake in over thirty years. Obviously, I've grown the business from from being an owner managed business to to something that's professionally run with with still a a the family holding a significant share in the business.

26:09 The next question is from Andy m, and it is what cash payback do you look for in a new site rollout and how the local incumbents typically react to you entering the market?

26:23 In terms of payback, so we we we ultimately at maturity, we talk about 20% return on investment, but payback would be within within a five year horizon. And more often than not, we'd we'd be striving for that to be closer to four four years in terms of payback. So that that's the first half. And then the second half, I I think kind of competition is is something merchants are are used to and and relaxed by. I think, the brands that we're rolling out in in in quite unique spaces within their markets, and and we we we deal with it and and find our place in in in each market. I think so to add to that, we don't actively target any competitors' business. Right? So when we enter into a local market because, you know, market's quite large, effectively, the share we take is small amounts from various competitors rather than targeting one particular competitor and and gaining share that way. So the reaction tends to be a lot less aggressive from from our competitors because I don't really see a direct immediate impact when we enter into the market.

27:34 Nick b, what benefits are you seeing from applying your digital strategy to the acquisitions? Do you see an additional uplift in return? Yeah. And so yes is the answer, and I I think a really good example is Condell. It's a brand that sits within our merchanting business. Quite a large part of its revenue is online, And and, actually, what we've been able to do with our with our merchant team and missus Central Heating team is really optimize their website.

28:02 It's in we've added product range. We've improved the search functionality on the website. We've improved the the way you get from from home page to product to to check to check out. And all of those things have made a real difference to to the conversion rates that we're seeing on the website and ultimately the lift that we're getting in in revenue off the back of that. And I I think typically when we when we buy a a deforming business and and in those cases, we will often rebrand it into into one of our existing merchanting brands. You get the instant uplift because you immediately take that that presence into those markets. And and we're almost doing the reverse on mister central heating, so it has such a strong online customer base that we're using, that online customer base to determine where the next new branch should go as well in in reverse.

28:56 So you it it goes both ways in terms of the synergies. Oh, it's fine. Fine. Ollie d. Yeah. Right. Ollie OllieD. I'll let I'll let Shankar answer this one. What did you learn in the financial crisis and other recessions that will help you through the predicted slowdown this winter and how looking how are you looking to in implement what you have learned? So the the key the key learning and and having started in 1992, which was a pretty tough downturn at that time seeing the dot com bubble, great financial crisis, and COVID, our business has grown in each of those downturns. And and the simple reason is because as we've always said, we focus on two key stakeholders, our colleagues and our customer. And in a downturn, it's most important that you actually really focus on those. So increase customer service and customer experience levels, ensure colleague engagement is as high as it could possibly be, and that's where management should be focusing.

30:02 And then invest in your business. So we've always invested through down downturns. And the reason why we do that is most of our larger competitors either won't or can't, and and their approach to downturn is is diametrically opposite to our our approach. We would go and invest in our business to provide our customers with far better customer experiences than they had before, and and that allows us to gain market share. Many examples, but the great financial crisis, the the merchant in market was was down by 20% in 2009. Our business grew by 2%. Again, what we did was focus on providing our customers same day or or guaranteed next day delivery. That was a major part of of the issues that our customer customers were facing. As we head into the the current downturn, again, in each of our individual businesses, our local branch managers who are the really the entrepreneurs in our in our 45 plus locations, they will be looking out to see what initiatives can they employ or deploy to make sure our customer service proposition is even better. To give you an example, if there's a truck which is half empty, we would expect them to call a customer and say, I can make the same day delivery to you. Do you want some some some products? And just simple things like that will allow will allow that business to grow because, unfortunately, what our competitors will be doing in a downturn is actually reducing capacity to try and make sure that they fit

31:32 their costs in line with the with the predicted downturn. Unfortunately, when you reduce capacities, quite often what we've seen in our markets, you actually drive that revenue line down because you've actually taken away that customer service proposition that that you have. And there are many other examples of of the kind of things that we tend to do in in a downturn. But like I said, in summary, it is focusing on on excellent customer colleague engagement that then leads to excellent customer service and experience. K. And then I think Ollie has teed up nicely the other presubmitted question, which is I'm sure that the board is fully aware of the Bank of England's recent gloomy forecast of 13% inflation and up to five quarters of recession for The UK economy starting in q four of this year.

32:18 To add to that, the ONS recently published that conscription orders were down 10.2% in the second quarter of this year. A serious reflect recession were to happen, would this in any way affect the company's growth plans for the group in the short term and derail the board's target ambitions of achieving 500,000,000 in revenues by 2024. Do the board, for instance, have any contingency plans? I think I think I'll I'll have a first crack at this, and then why don't you contribute off off the side? So I guess, order's down 10.2% in the second quarter. You can you can see from our results that that that's not consistent with what we're experiencing. We continue to experience strong like for like performance, And and we've been saying to people today that actually July and August have been our best two like for like months of the year so far.

33:13 And we think the reason that we're getting our differentiation is is the point Shankar was raising earlier around the the discrete elements that we sit within our MNI. So very much focused on the r, so that's repair and, you know, every we'll all go home to to our to our homes tonight, and they all have heating and hot water in them. So the demand will always be there for for for that side of our of our group. And then on the merchanting side, we think we're more into the improvement side, but very much focused on the the homeowner who is mid to high income. They're still sat on record levels of of savings at the moment, and they are focused on on on driving improvements into the home and and not proportionally impacted by the cost of living challenges exist, and we're still continuing to see demand from them in in our in our monthly sales figures, but also, you know, from anecdotally from our trade customers who talk about being busy all the way through through to the end of the year and and and to normal levels.

34:17 In terms of the scenarios and the and the 13% inflation, yeah, we we've we we we like to kind of model downturn scenarios as early as as they land. We we were modeling COVID lockdowns at the beginning of February, you know, before, you know, we're real kind of like, real paranoid approach to to potential problems, and we've been modeling off a off a 12% inflation, and and we think that we can absorb absorb what that would bring in terms of forecasts and and and kind of the the general economist view seems to be that 12% inflation would would potentially be a 5% downturn. I don't think that would be a 5% downturn for us for the reasons I've just articulated, particularly around the r element of our of our scripture. But then we have a huge opportunity from organic levers to outperform the market.

35:07 So if the market is negative five, we would expect it to outperform that market through our organic levers being product range extension, new geography, and digital. And and just to just to add to to to that point, one of the things that the business is is always pride itself on is to approach professional management with a degree of paranoia. We know right right now whilst we don't see it in our numbers, we know there are headwinds. And so our scenario planning and the modeling shows us if there's a downturn, what the impact is. But but more than just knowing the impact, it's what are we going to do about it. And that's what's really helped this business continuously is is is to look at a a problem scenario that might be occurring currently or might be coming and then saying, what are you going to do about that? And effectively executing a, what I call, a countermeasure set of actions that then lead you to to effectively outperform.

36:09 We've done that with supply chain issues. We've seen especially around boilers. We we we called the issue very early on, made a public statement, but but really what we were saying is that we're on it. And that's that's effectively how this business because, again, it's it's an entrepreneurial owner managed type type of business with 45 to 50 branch managers, general managers, and colleagues below, all of whom are constantly looking at the issues that they face or are going to face and what are they going to do about it. And and and I hope that that gives you a very clear sort of proposition of why in downturns we we grow. It's because we we we plan it early and then we plan what we're going to do about that downturn. So I suppose the answer to the question is, do does the board have any contingency plans?

36:59 Yes. As as always, a good business should always have a contingency plan. Okay. And I think that's that's the last question. Yeah. Yeah. Shankar, Chris, absolutely. And if I may just jump back in there, and thank you very much indeed for taking the time to address all of those questions that came in from investors this afternoon. And, of course, if there are any further questions that are submitted today, we'll make these available to you immediately after the presentation has ended for you to review. And ladies and gentlemen, we'll publish all those responses where it's appropriate to do so on the investor meet company platform. Shankar, perhaps before redirecting 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'd be great. Well, firstly, we we we are meeting the IPO commitments that we made in July last year. Our first half results are testament to the fact that we are a business that does what we say we're going to do. We're on track to grow our business through a very experienced management team that have been through multiple downturns.

38:00 And in each of those downturns, we have thus far managed to grow our business, and we hope to be able to continue doing that as we head into a slightly more difficult period in in in q four of twenty twenty two and and potentially beyond into 2023. Thank you very much for your time. Thank you. Shankar, Chris, that's great. And thank you very much indeed once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the 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 afternoon to you all.

38:50 Hello?