Nexteq (LSE:NXQ) — Interim results presentation

0:01 Good afternoon, and welcome to the QuickSumc PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right corner of your screen. Just type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to John Jay, our CEO. Good afternoon to you,

0:32 sir. Good afternoon to you all. Thanks very much for joining the Quitsum PLC twenty two interim results presentation. I'm just gonna start by taking you through a brief summary of the business. So Quixson PLC is a technology business, and we look to provide outsourced solutions for a range of markets where electronic equipment manufacturers have a need for technology which is not met well by the standard solutions available from from computer and electronic manufacturers. And we focus on specific vertical markets where we can bring hardware, software, display, and mechanical engineering expertise, which we have built globally within the business and enable us to become a a key technology partner for those customers that we work with in those selected sectors.

1:22 The first sector we identified in 2005 when the company was started was the casino gaming market. And within that market, we have designed a bespoke computer platform solution. And why that's valuable is because it enables the manufacturers of the casino machines who also write the games to outsource this critical component of the computer platform to Quickson, and that allows them to focus increasingly on the game software, which is the most important part of their offering and is what drives the the key differentiator for them against their customer base. In 2015, we went on to acquire Densitron. Densitron has got a fifty two year pedigree of supplying industrial display products to a global customer base.

2:07 Why that's so valuable is through Densitron, Quipsent identifies new markets that are outside gaming, and it looks to identify in those vertical markets opportunities to move up the value chain in those sectors. So what we look for is markets where there's a transition occurring. There's a trend occurring where that that trend is not easy to establish through standard technology available in the market. And because of that, we've got a portfolio of patents that we generated where we've identified areas where we can innovate and develop bespoke technology. So we've got 22 patents granted and and several under application, and we've got a series of registered trademarks as well. Quixent's a very global business, so we have, 230 employees spanning nine countries, many languages spoken across the country, and customers across 50 countries. So we really are truly a global business spanning, time zones in the West Coast Of The US all the way across to Japan in the Far East.

3:04 And we've historically had a strong double digit growth track record, 17% CAGR since flotation to FY '21 revenues. So it's a strong, growth within the business. Just sort of diving into what we do within gaming. So on the left hand side, you can see one of our orange boxes installed in a customer slot machine. So we provide that hub of all of the all of the computer hardware and some of the low level software for our customers. And and why we do this is because when the casino gaming machines start to evolve into video slots, those video slots needed a computer, but the computers that are available from the broader technology space don't meet the requirements of the video slot market particularly well, principally because of regulation, and because of the feature sets that are needed to drive, modern video gaming machines.

3:52 So, therefore, the customers that were developing these new round of machine machines, which sort of starts to gather steam in the mid two thousands, were spending a lot of money on the computer platform design when actually that didn't drive a significant amount of their differentiation and and commercial success. So what we did when QuickSync came along is we named to outsource that computer platform to us, and that enabled them to balance the investment they were making in computer platforms with its commercial differentiation and increase significantly the investment they were making into into game development. And and that generated for those customers increased level of differentiation and player attraction to their machines. The market is a very big business, so there's around a billion dollar or a billion dollars of addressable market for us across the globe.

4:40 And a handful of names on the slide there are the sort of the largest of the gaming machine manufacturers, some of which all of which, in some extent, we we work with. And overall, globally, there's about 9,000,000 units installed base with a replacement cycle of of the video slot part of that of of of four to 5% per annum. And, typically, for a video slot, the average lifetime is is three to five years. And and over that period is is the lifetime of our products. So every three to five years, customers would look to upgrade their product to the next generation platform. So that's gaming. Just coming on to Densitron. So Densitron has a pedigree in supplying the industrial display components as you see on the left hand side of the slide. What we look through that display components business is to identify new sectors, where we're already supplying that display component, but we can leverage our group's engineering expertise to migrate off the value curve to high value products.

5:37 And the control surfaces opportunity that we saw was in the broadcast sector. And what we brought in broadcast is revolution of the way you interact with broadcast equipment to move from mechanical type touch mechanical type tech, input technologies to, to touch screen type technologies. And this requires, additional functionality in the form of computing, in form of graphical user interfaces to enable those, those touchscreen type technologies to revolutionize broadcast. So we've brought that to the market through a range of products, including, innovative and patented tactile touch technology, which allows, you to feel the touch screen as well as as well as to see it. And then we also went on to buy a business in 2019, which adds software to the mix. And all of these additional elements of the, of the offering enable us to increase the unit price and increase the margin of growth to achieve within that. So broadcast is our next significant market after the broad the gaming industry, and we believe that that has the opportunity to deliver double digit growth at at more attractive margins than than the rest of the Dentitron business.

6:45 So so making good progress within Dentitron towards that objective. So overall, just on the investment case, we've got proven effectiveness in delivering innovative patented products to to key markets, And we look for that sort of market transition and the market characteristics which drive, a barrier of competition, and that's through a combination of domain knowledge, so specific understanding of what the market needs are, a regulation, if possible in that market, and then also just simply that we have the hardware and software engineering disciplines covered within the business. And those disciplines span multiple different geographies. We blend the the very, very high quality experience of the the Far East with the innovation and the creativity that you can get in in Western countries.

7:35 In the gaming market, we've generated a very lot we've of seen a in through a proven ability in the difficult past. Supply chain environments that we're facing today. And Companies historically had a very strong balance sheet and continues to have a net cash position on that balance sheet, and we're cash generative. And we believe there are significant opportunities for further growth available within the gaming sector and indeed in the broadcast sector to diversify revenue mix. So that that's what we do and a bit about why, hopefully, we're an interesting investment. I'm gonna come on to now talking a bit about how we performed over the last six months. So we've had a really strong trading period in the six months to June 2020. So we've had very buoyant customer demand, and we've under underpinned that by signaling order intake being ahead of the current year revenues, which have been, you know, significantly up on the prior year, and also that order intake has been ahead of the prior year order intake that we had. So that sort of buoyant customer norms really is only tempered by the supply availability that we've had, and that's a really challenging period that we're facing around supply chains over the last eighteen months or so with the shortages that have been plaguing the electronics markets.

9:00 Despite those supply chain challenges, though, we've seen significant revenue growth, as I've said. So gaming revenues have been approaching pre pandemic levels, and Densitron has had a second period of the highest ever six month revenue since acquisition. So it's a good performance within the business in the last trading period up to the end of June. Pleasingly, we've also seen early stages of recovery in gross margin. So last year, we passed on price increases we were seeing on the input side through to customers, and we were playing catch up with that with the ongoing increases in component prices. But as those have started to level off and they they haven't in the aggregate gone down yet, but they've leveled off, Those sale price increases that we affected during 2021 have started to now filter through the p and l and benefit the profitability.

9:52 And that profitability has also been benefited by higher production volumes, which is driving operational leverage. So overall, a good, you know, progress in improving our margin performance back to to former levels. Supply chain risks, I've talked a bit about, but we we took action early last year to introduce a strategic stock purchase program. That's been extremely important for managing the business through these turbulent supply types. So retaining customers through avoiding stockages in their production and reducing the impact of price inflation that we experienced, but also our customers' experience has been enabled by that strategic stock purchase program. And and and what that was was required us to do is to deploy our balance sheet to buy stock, which enabled our cost which enabled our inventory to provide that lifeblood of raw materials into our production.

10:46 And and whilst that has resulted in an outflow of cash from operations, it's been incredibly important for us to underpin our ability to supply and deliver those strong trading periods that we've seen in the first half. Also, really pleasingly is we've also made good progress on new business. So we have been working for some years now on generating business from our turnkey cabinet solutions, and I'll come on to exactly what those are. But in gaming, we saw an opportunity to develop more than just a computer board, but also to move up the value curve and to deliver full turnkey cabinets. And those, I'm pleased to say, we announced last week that we've had our first mass production order for $4,000,000, and that order is due to be delivered in the fourth quarter of this year and into next year. So it's a good progress on our gaming cabinet solutions as well, which is a strategic shift that we're pushing to increase our value to our gaming customers and to support through the the difficult supply chains that we what we face today.

11:47 So so with that, I'm gonna hand over to Johan, who's gonna take you through a bit more detail on the financials. So, Johan, over to you.

11:53 Thank you, John. Good afternoon, everyone. The slide sets out some of the financial highlights for the first half of twenty twenty two compared with the first half of twenty twenty one. And as John said, a really strong half of the the group. Revenues of $53,000,000, up 46% on the first half of last year and also sequentially higher 5% higher than the the second half of last year. Gross margin, we started to see the recovery there with gross margins of 31.6%. The improved gross margins coupled with the the higher revenue spent that we were able to grow both both our profit before tax and EPS by triple digits to $3,500,000 and 4.1¢, respectively.

12:38 So really strong performance in this first half. We have seen an outflow of cash flow in the first half, 3,600,000 in operating cash flows. That was predominantly due to the investment in working capital that we've made to secure stock to continue to meet existing and future demand for our our for customers. And as John said, I think without that that investment, much of the the performance in the first half would not have been not have been possible. At the end of June, the the group still had $12,000,000,000 of net cash. So a good good operational liquidity and a strong balance sheet moving into the into the second half of the year. Moving on to the next slide, which sets out the the group's half yearly revenues for for '22 and then compare it just going back to 2018.

13:26 You can see the impact that the pandemic had on the group in in 2020, but we've we've recovered from that with the first half this year being the fourth half year of cons consecutive growth, and we're up now consistently back to pre pandemic levels of about 50,000,000 for a half year. Not only are we growing revenues in absolute terms, but we're also pushing to to to to grow a stronger, more diverse revenue base. The the chart at the bottom left shows revenue from our top 10 customers as a percentage of our overall revenue, with revenue concentration broadly the same in the first half, but still improved compared to the pre with the pre pandemic. This is in part due to the higher contribution from our division and also continued diversification within our gaming customer base. It's a key metric for the group, and it's something that we continue to to monitor at board level.

14:21 Our order intake in the first half has been more diverse, and looking ahead to the second half and into 2023, we expect revenue diversification to continue. This slide just sets out our revenue by division. Starting with with gaming on the on the left, can you see the impact that the pandemic hit on gaming in 2020, but recovering from that and now back to pre pandemic levels for gaming with revenues in the first half of this year up 71% on the first half of last year and also 9% higher than the second half of last year. This has really been been driven by strong demand from our customers with order intake in the first half, ahead of order intake in the first half of last year and ahead of revenues in the first half.

15:10 We've also benefited from continued resilient management of our supply chains, which has meant that we were able to ship 22 and a half thousand platforms in the first half of this year, up 45% on the first half of last year and the highest shipments since 2018. Dentitron on the right was not as heavily impacted by the pandemic, but, again, strong continuous growth over the last four and a half years with the first half of this year being another record high for the division at 21,900,000. What's particularly pleasing with the Dentitron growth is that it's across it's broad across all of the subsectors, particularly the the broadcast sector, which has grown by 43% year over year at elevated margins compared to the rest of the Dentitron business.

16:04 Sticking with gross margins, and and this this slide shows our our group gross margin in the first half compared to the previous halfs going back to 2018. You'll note in 2021, a decline in gross margins. This was principally due to component price inflation because of the supply chain shortages, which which depressed our gross margins. We've seen a recovery in the first half of the year, and the recovery would affect three three factors. First of all, as John noted, we've seen a leveling off in component pricing, which allowed the effect of custom price rises that we put through in 2021 and early part of twenty twenty two to positively impact our margins. We've also benefited from a higher proportion of gaming revenues, which which is shipped at a higher higher margin.

16:55 And as we shipped more gaming revenues, that's supported our margins. And then finally, as our overall group revenue has increased, we benefit from operational leverage leading to lower cost of manufacturing. It's really these three factors combined that has led to the the the recovery in in gross margins, and this was delivered despite what is still a very challenging supply chain environment, specifically freight costs that are still elevated compared to pre pandemic. We have taken actions to to recharge these to our customers and continue to look to to maximize our gross margins. Moving on to our profit and and profit before tax of $3,500,000 in the first half, nearly three times the level for the first half of last year, principally due to the higher revenues year over year, adding $5,000,000 of profit, additional upside from the improved margin rate. We have seen, an increase of $3,000,000 in our operating expenses.

17:57 This has been principally due to, increased headcount, as we we've added, sales and product development heads to support the existing and the future growth of the business. We've also seen the effects of cost inflation in our our in our cost base in the first half of the year. Lastly, last part of this was wage inflation. Now we've we've tried to balance the need to retain top talent with higher wages by increasing those wages and focusing on the the variable pay structure and share based payments to link the the payment structure to the group's performance. Looking ahead to the second half of the year, we expect that cost inflation will continue to to have an effect on our operating expenses.

18:45 But despite that, we expect our profit margins to increase in the second half of the year approaching double digits with this upward trend expected to continue into 2023. And then finally, our our net cash position. The the graph on the right shows the movement in the first half of the year with net cash of $12,000,000 at the end of the half. The large movement for the over the half year, as I've mentioned, is the investment in working capital that we've made, principally securing stock to deliver to secure demand for our customers for existing one and for for future for future demand. And without these investments, we would not have been able to to deliver the the revenues that we have in the first half. Apart from the the working capital investment, we also continue to invest in new product development with $1,200,000 capitalized in the year, and we've also made tax interest in these payments of $1,600,000 in the year.

19:44 Looking ahead to the second half of twenty twenty two, we expect a a further cash outflow in part due to the the dividend of $1,900,000 that we paid in August, but also because we expect that working capital will remain at these elevated levels through the balance of of 2022. Looking ahead into 2023, we expect improvement in working capitals alongside the improving supply chains. And with that, I'll hand back to John.

20:12 Thanks, Johan. So I wanted to take you on a bit of a tour of what's happening globally in the gaming market because it's a really quite stark numbers that are coming out, from the North American market. And and really importantly, North America represents 60 of our gaming business, so it's a very critical market for us. And after that low we saw in the second quarter of twenty twenty entirely inflicted by the pandemic and the casino closures that were were widespread across the whole of The US in March. Very quickly, that market recovered rapidly and actually was a, you know, certainly a v shaped recovery that we saw in in the sort of the latter part of the second quarter and into the third quarter of twenty twenty. And from there on in, the gaming market's been going great guns in The US commercial land based casinos.

21:02 And so we've actually seen through 2021 record revenues being recorded in US commercial casinos, and that's continued in 2022. So, actually, q two twenty two is an all time high for land based commercial casino revenues in the slot space. So incredible performance coming through from the North American market. And just sort of characterize where that sits. So this is our customer's customer and the revenues that they're generating. So what that says is not directly correlated towards what we can sell into, but what it shows is that US gaming market is very much buoyant right now and historically has been very stable in in downturns. So, you know, on the basis that we are facing potential recession, historically, in downturns, economically, the gaming market has been relatively resilient.

21:51 The European market, was much much slower to recover. So in 2021, it didn't see that bounce back that the North American market had, really because lots of European economies were much slower to, reduce the the COVID related restrictions that were in place. And so you didn't see that bounce back you saw in The US. However, the European Gaming and Betting Association is predicting a a significant growth in that market back to pre pandemic levels in 2022, and we've seen evidence of that coming through in terms of customer demand and new business activity. And then Asian market, so in particular, the Macau market remains heavily subdued. So COVID restrictions still weigh heavy on the Macau gaming industry.

22:36 However, historically, Macau, whilst it's a very big market from a revenue perspective for global gaming, is a very small slots market. So it's a very much a table games market, and therefore, slot machine numbers are very limited in that in that area, and therefore, it's been a very small proportion of our addressable market. So whilst Macau is still very much in in a sort of a COVID related limited revenue, it is it is a very small proportion of the video slots market which we can address. So so not heavily impacting our our revenues. So to talk about the cabinet offering, I think it's important to understand what's going on within our customer base. So customers are increasingly struggling with hardware.

23:22 It's been a trend of outsourcing for a number of years now, and that's why we've won business for our computer boards. But, actually, hardware in general is increasingly difficult, particularly in this current supply environment. And so what what the cabinet's offering does, it allows customers to outsource all of the hardware that they need to do to bring a slot machine to the market. So we don't get involved in any of the software. That's entirely in their domain apart from that sort of low level plumbing software that enables their their game to interact with the hardware. But what this cabinet enables them to do is to to entirely outsource their their their hardware offering to Quixen. And what we bring is something that's designed for purpose as a regulated gaming machine. They then add their game to it, and then they go and get their license and deploy it into into regulated gaming markets.

24:11 And and what this does by bringing the cabinet offerings out is it executes part of our growth strategy to increase our share of the customer wallet, and I'll go through the other areas in terms of the growth drivers in due course. So so, typically, these products are aimed at the the smaller end of the market and typically at the the lower cost gaming markets. And and as I said, it enables those customers in those areas to focus exclusively on game software development, which as I said at the beginning is the key driver to their commercial success. We've got two offerings. We've got the electronic gaming machines, and we've also got the self-service betting terminals. So the latter is designed for sports betting, kiosks, and the left the the the one on the left is designed for video gaming slot machines.

24:58 And the first order we've had is for the EGM cabinets, and that's a $4,000,000 order that's gonna be deployed into The US gaming industry. So it's a really exciting strategic progress on on our cabinets offering and driving further that outsourced trend that we believe is very much alive and kicking. So within Dentitron, we covered the fact that Dentitron's had an excellent trading period. It also built on that resilient trading through through the pandemic. And and and it's very pleasing to see that some of the efforts that we've had around improving that business, driving new focused markets such as broadcast and indeed enhancing the sort of the core display components business is now delivering rewards in terms of financials.

25:43 And part of that growth comes from our first focus sector, the broadcast market, which grew 43% year on year. And why that's growing is because we've got an increasing pipeline of opportunities within that market, and we're landing revenue within those opportunities for, you know, for a wealth of products, including some of the high value products that we have we've developed. We've also continued to make investments into that part of our increase in OpEx, and some of the key highs we've had in q three are a senior product specialist coming from Grass Valley and a broadcast sales leader. So focused individuals entirely, exclusively focused on the dental and broadcast sector. And, and and then we've also launched a number of new product offerings, including announcement in August of the ITS cloud SaaS solution, which takes what we previously supplied as an on premise control system that's used in some very high profile customers in the broadcast professional broadcast market, but now can be available on a deployment as a a a cloud SaaS solution.

26:43 So exciting evolution of our broadcast product offering and part of the reason why we have that confidence in future growth within that broadcast sector. And then the display components business. So since we bought Dentitron in 2015, we've done a lot of work to transform that business and give it that opportunity of single digit long term sustainable growth within the core dense and display components business. And that sits alongside the double digit growth we get from the focus sector such as broadcast. So some of the work we've done is around centralization procurement, and that's been incredibly important in the current climate where we've had our expert purchasing team in Asia sourcing and and and managing the difficult supply environment and improving our operational efficiency so that we can get our sales teams much more focused on on new business and sales growth.

27:33 We've also got better management information that's enabling more management driven KPIs to to improve our our our sales success, and also we've terminated non performing business units and product offerings over the sort of the period since we bought the company. So overall, all those changes, we believe, has driven a better availability of product product and and and enabled us to have a competitive advantage in in what is a very competitive display components market. So display components also see good momentum in trading alongside the double digit growth we've we've announced in the in the broadcast sector. So overall, from the group, how do we talk about growth? So we we follow a sort of a a series of steps that defines our growth strategy. So we identify a target market, and we look for that technology change. So if we take the gaming market as an example, the technology technology change was about the mechanical real based machines going to video slots.

28:30 In the broadcast market, it's about mechanical control solutions going to touch screen based digital solutions. So we look for that technology change, and then we look in that market whether there's

28:40 any existing providers which are already developing a product which provides an outsource for the manufacturers of that equipment. And if it doesn't, that market may well look interesting to us to participate in. We then try and acquire customers within that market in the chosen segment, and we then try and increase our share of the customer wallet by, providing additional outsourced solutions and becoming a more integrated partner to those customers. And we will invest in r and d as part of that so that we have that higher value of of of product, including adding software to the mix. And where necessary, we may also augment that organic growth with strategic acquisitions, which add to our technology capabilities. So we've made good progress in all those areas as identified on the slide here. So we've had another consecutive periods, our second growth market within broadcast alongside the extremely strong growth within gaming. We've converted new customers within gaming cabinets, and that sits on progression of pipeline with the game boards and broadcast.

29:40 And in terms of increasing our share of the customer wallet, our gaming cabinet mass production order confirms our ability to make migrate up the value chain within gaming machines, not just supplying the computer board, but also high value products within that. And we've also continued to evolve our r and d efforts around the broadcast markets. We've launched Tactila, and we've also launched the ITS cloud offering, which has been delivered to sample. The sample has been delivered to customers. And we continue to have a very robust balance sheet and a net cash position. So should we see positive opportunities, we we have the ability to take advantage of those. So overall, in summary, we have an ongoing strength of order intake, and it's broad based across multiple customers and multiple sectors.

30:27 And that gives us good confidence in future growth in high quality revenues. And we talked at the beginning about that order book or order intake that's above current period revenues in the first half. And that really is only constrained by our by our availability to supply based on supply shortages. But nonetheless, our product offering is is extremely strong. We continue to invest in that. And our brand strength, I think, is at an all time high as we're working so hard to look after customers and deliver them with the stock availability. That's pushing customer momentum. And so although there are many macro uncertainties remaining, those are around supply environment and pricing volatility and, you know, around, you know, sort of macro political factors. We believe that our experience in tackling these issues means that we can take advantage of that buoyant market demand as we go forward.

31:19 And so we we upgraded our expectations for full year revenue and profit in July. But given our support of a strong start to h two and excellent oil coverage, we are very confident in achieving those those upgraded expectations.

31:33 So longer term, we've got a we've got a growth strategy, which we believe that through disciplined execution of that strategy, we can deliver compelling long term growth coupled with improved profit margins in the business. And we're very, very excited about what is achieved within that, taking us to new highs on revenue and profitability. So I'm gonna finish on that and hand over to q and a. John, Johan, thank you very much for your presentation. Ladies and gentlemen, please do continue to make your questions using the q and a tab, which is just situated in the top right hand corner of your screen. But just while the company take a few minutes to review the questions submitted today, I'd like to remind you the recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

32:18 I'm just turning to the questions. Could I ask you to read out the questions and give responses to what is appropriate to do so, and then I'll pick up from you at the end. Thanks very much indeed. So the first question we've got is what is your contingency plan in the event China blockades or invades Taiwan? So it's a it's an excellent question. It's obviously very newsworthy at the moment, and we are implementing a contingency plan for that event. So currently, a lot of our gaming manufacturing is done in all our gaming manufacturing is done in Taiwan, and Dentitron is manufacturing some in Taiwan and some in China. So we are going to have multiple sources of manufacturing also in sort of the the Southeast Asia region, but potentially in other countries, not Taiwan, but continue to manufacture in Taiwan.

33:06 I think that, you know, from a sort of a a group stability point of view, we have, you know, a very, very much sort of a cloud based deployment of our IT systems, so the IT elements wouldn't be affected by that. The the the raw materials for semiconductors all are coming out of of Taiwan. So 90% of the advanced semiconductors are produced by Taiwan. So in the event of a sort of fallout war with China, it would be very, very difficult to find a contingency plan for any businesses that are in the technology market, whether it's consumer or or industrial. However, what we're seeking to do is to have multiple locations for manufacturing backed by stock out of country, outside Taiwan, and then also to hold finished goods stock, that is not in the Southeast Asia region.

33:51 So we have warehouses, for example, in North America and having some contingency for that. I I would also add that I think that there is a lot of news flow around this area, and I think that the likelihood of an all out sort of war is is relatively low. It's much more of a long tail event. I think that the likelihood is more in terms of economic sanctions. And, you know, clearly, manufacturing diversified across multiple countries helps us with, you know, mitigating excessive taxes or what have you that might be inactive as a result of that. So it is something that we have got on our risk register. It's certainly gone up in our risk register, and we're now executing our contingency plan to to to mitigate against any unexpected but but still plausible risks that happen as a result of that.

34:38 Second question we've got is around visibility. So the question is very good performance with good visibility to 2023. Do you expect current levels of revenue becoming a new base level from which to grow? And and the answer very simply to that is yes. We are expecting, you know, this being a sort of continued ongoing recovery. We've talked about the strength of order intake, that being ahead of revenues and the trading momentum being in an upward trajectory. You know, we've talked about the first few months of h two being strong, so we are expecting, you know, the revenues currently to be something that we build upon as new business converts and as supply chain eases, and we're able to supply more of the demand. And the next question that's come in, can you talk about competition in your markets? Are they seeing similar growth, or are you taking a share?

35:30 So so mixture of things in that. So within gaming, we don't see the gaming market market overall as growing. In fact, if we look historically, it is growing on a low single digit basis. But overall, we conservatively view the gaming market as flat. But what we are seeing is a push towards more regulated gaming in in comparison to sort of illegal unregulated gaming. That certainly benefits our business. And what we're also seeing is is more customers seeking to outsource versus insource their designs, and that is driving an increase in our share of that market. If we look across, you know, other parts of the business within the broadcast sector, there is very much a narrative there around how much is hardware gonna be part of our business versus should there be more focus from our customer about software, and should we help them with doing the hardware aspect? So so that is certainly about gaining share.

36:26 And overall, in broadcast, there was certainly a glut of capital expenditure through 2020, 2021. We've really started to see that resume in the second half of last year and into this year where new projects are coming back onto the onto the table again. And more broadly, within the sort of the densitron business, I think our ability to supply and have better availability, we have been seeing a share share gain coming in that, but it is a very big market, and we have a very small share of it compared to, say, the gaming market where we think we're about 10% to 15% of the annual replacement cycle. That's all the questions I can see on the screen. If anybody's got any others, please do ask. John, Johan, thank you very much for that.

37:11 I think you've addressed those questions from investors, and, of course, the company will review all questions submitted today and will publish those responses on the Investor Meet company platform. But just before redirecting, investors provide you with their feedback, which I know is particularly important to you both. John, could I just ask you for a few closing comments? Yeah. Sure. So we're very excited as you probably gathered by how the business is trading momentum is building. And we have had, you know, a number of of challenges that have hit us over over the last few years. But, you know, we've we've worked our way through them, and, certainly, I think it's very important to call out the team effort that that's been within the business globally. Everybody's worked very hard to try and tackle those challenges head on and deliver the kind of trading results that we've had. But going forward, we believe that the work that we've done, the platform we've built positions us extremely well for a longer term growth track record and that growth track record being more diversified than it has been in the past. And, you know, with a wealth of compelling business opportunities with a strong, balance sheet and a good platform to build from, we believe the next few years will be an exciting period of, of opportunity growth for Quicks.

38:20 John, Johan, thanks once again for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few minutes to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Quicksand PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.