NWF Group (LSE:NWF) — Full Year Results

0:00 Good morning, and welcome to the NWF GROUP PLC Final Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Chris Belsham. Good morning to you. Thank you, Alex.

0:28 Hello, and welcome to the NWF GROUP results presentation for the year ended 05/31/2026. I'm Chris Balsham, the CEO, and I'm joined by Katie Shortland, our CFO. And we'll start with the highlights of the period. Against the backdrop of a highly variable oil market, I'm pleased the group has demonstrated its resilience in delivering a full year result only slightly below initial market expectations. And importantly, at the same time, building on the foundations for growth, we have continued our strategic progress with business improvement initiatives across the group to strengthen our capability and enhance our systems and processes to develop the existing business, but also to make us scalable for growth.

1:22 In fuels, we rolled out our new regional operating model in July 2025, and we continue to embed that model so that we can realize the operational and commercial benefits. We also undertook two further bolt on acquisitions, which were integrated into our Northwest region. In food, we saw a 19% increase in operating profit as we secured new business and started to proactively pursue the strategic option create a national network of scale. And in feeds, we made the most of largely positive market conditions through effective management of gross margin and operational costs. Our long track record of dividend growth continues with a further 3.6% increase, and we continue to have a robust financial position as we pursue our strategy.

2:20 Moving on to our financial highlights. Revenue was slightly higher, and that reflects the oil price increase in the final quarter. Headline EBITDA was up 2.7% to 22,800,000. Headline operating profit was up 3.1% to 16,800,000, and headline profit before tax was down 5.3% to 12,500,000, which was just below initial market expectations. Strong cash management resulted in a positive cash balance of 9,000,000. We'll now look at the individual business highlights for a couple of minutes. So in fuels, we saw a year of fluctuating demand and volatility.

3:07 So we saw very weak demand for both heating oil and gas oil in the first half, and that was due to mild weather. And that led to a really competitive market with a corresponding impact on our volume and margins. That demand normalized rapidly in late November, leading to improved performance. But then in the final quarter, the conflict in The Middle East saw a significant increase in oil price and in price volatility. That resulted in a period of stronger performance in March and April before the market normalized from May onwards. Whilst demand for commercial diesel and gas oils maintained throughout that period, the sharp increase in price did lead to a reduction in demand for domestic heating oil, and that's persisted into the summer.

3:59 Our new regional operating model was rolled out in July 2025 as I've already mentioned. And despite market conditions affecting the speed of implementation, the business continues to embed that model and improve its processes. And alongside all of that, two bolt on acquisitions were made in the year and integrated into our new model. In food, as already mentioned, profit was up 19%. We saw increased demand from both new and existing customers, and that led to increased storage levels and higher pallet throughput with our Linedale warehouse, which we invested in a couple of years ago, enjoying its first full year operating at full capacity. The business also benefited from the cost base restructuring that was undertaken in June 2025.

4:51 Now given our plans for the growth of the business, the management team have continued to improve processes and has invested in capability to help create a more scalable platform for growth. And with that growth in mind, we've also focused on building a further customer pipeline. And at the year end, we were using off-site storage because we were so full. Feeds saw another year of good results. There was a strong milk price in the first half, so dairy farmers wanted to maximize yield. We then saw a softening in the milk price as the dairy sought to encourage reduced milk production. We managed that change in market conditions very well. We retained strong volumes at a sensible margin.

5:39 And throughout the year, our new moist feed product range, which we launched in the prior financial year, continued to perform ahead of plan. We now look at our markets. We saw very different conditions across our our our three different markets. So fuels are a low and stable oil price in the first three quarters, then the conflict in The Middle East saw a sharp increase in the price of both crude oil and refined products, as you can see in the two graphs on the right hand side of the slide. So the biggest increase was seen in heating oil or kerosene because that's also used as aviation fuel, and you you will be aware of all of the speculation around the, the countries running out of of aviation fuel.

6:29 And you can see that increase in the green line on the graph in the bottom right hand corner. But as well as the high price, March and April also saw high volatility in prices, and that benefited the performance of the group. And you can see that in the graph on the left hand side. So the blue line there is the daily price each working day through February, and you can see there wasn't a lot of volatility there. If you then compare that to the yellow and green lines, which are March and April, you can see there's much more movement in price from day to day. And then you can see that starts to normalize in the red line, which is May, albeit it normalizes at a higher price than February. Now the price increase for domestic heating oil in March resulted in the, CMA launching a market study with which we proactively engaged.

7:26 I'm pleased to say the CMA has released its report in July, which concluded that the market for domestic heating oil is generally competitive. It made some recommendations, but none of those, do we believe will have material impact on our business. Oops. Sorry. So we now move on to the food market. So in food, demand is driven by population growth, so it tends to be very stable. However, the cost base of the group's food business can be impacted by government policy, particularly in respect to payroll taxes, business rates, and the national minimum wage. And and we obviously need to try and pass those cost increase onto our customers, but our ability to do that depends ultimately on the ability of the major retailers to pass that onto the end consumer through price inflation.

8:20 So in f y twenty six, the group saw an increase in the national minimum wage of 6.7% coming into the year, and then we saw a further increase of 4.1% in April 2026. By contrast, food inflation varied through the year from about 2.2% up to 5.1%. In addition, from April 2026, the government has increased the business rates paid by warehouses with a a rateable value over 500,000, and that does impact a number of the warehouses operated by the group. So, again, we need to try and pass those costs on to our customers. And lastly, the feeds market. Excuse me. So in the first half of the financial year, demand for rumen and animal feed was strong as farmers sought to maximize the yields to benefit from milk price.

9:12 This resulted in continued strong milk production. And in response, the dairies reduced the milk price from October onwards. And this started to reduce demand for Reuben animal feed towards the year end. We expect that to continue across the summer. And milk production was stable in the year, but, again, we expect that to, reduce in the summer before starting to pick up again in the autumn as we move towards Christmas.

9:43 Now before Katie talks through the financial performance, I thought it'd be helpful to give a brief reminder of the group's business model. So NWF GROUP exists to add value to supply chains by using expertise to connect customers and suppliers who otherwise would struggle to connect mainly due to a difference in scale. And we currently operate across three markets where we apply our expertise, which you can see in in the box at the middle of the slide there. In fuels, we connect domestic oil heated homes and SME fuel users, both of whom need to buy fuel in bulk with the major UK oil suppliers. In food, we connect small grocery brand owners, manufacturers, and importers into The UK grocery supply chain in the most cost effective and environmentally friendly way by providing a consolidated storage and logistics solution.

10:43 And in feeds, we connect dairy, beef, and sheep farmers with global agricultural commodity traders by formulating yield optimizing diets, procuring the commodities to make those, manufacturing that diet, and then distributing the feed effectively to farm. And as you can see from the numbers on this slide, all of our businesses have significant scale in in their specialist markets, and are robust and resilient. And that means they all have scale and capability barriers to entry. They need infrastructure. They need vehicles, and they need deep expertise in their specialist market to operate successfully. I'll now hand over to Katie to talk through the financial performance in more detail.

11:31 Thanks, Chris. I'll now talk through the financials for the year starting with the key highlights. Revenue is 2% higher year on year driven by commodity price movements in fuels and feeds along with higher volumes in food. Our headline operating profit of 16,800,000 is 500,000 higher than the prior year of 16.3 and is slightly ahead of analyst expectations following May's trading update. The result reflects a strong year in both the feeds and food businesses offset partially by the challenging market in fuels. Headline PBT finished the year at 12,500,000, which is 5.3% lower than the prior year. This figure includes the year on year increase in lease interest costs that has previously been signaled, which largely relates to fleet renewals across the group.

12:20 We expect this interest cost to increase further in f one twenty seven as we look to extend the lease on our crude facility. Our net cash balance in the year is 9,000,000, a strong performance when factoring in the two acquisitions we made in the year. Working capital has also been managed well in the year and has benefited from some timing differences at the year end. This flows through to a strong operational cash conversion of just over 95%, reflecting the cash available to support future investment activity. Our headline EPS is 17.9p in the year and is slightly lower than the prior year. As Chris has already mentioned, our board is pleased to propose a full year dividend of 8.7p consisting of the 1p at the half year a further 7.7p at the full year.

13:08 Our return on capital employed has increased from 17 and a half percent to 17.8%. This reflects the strong returns of the businesses with both foods and feeds again improving year on year. Our fuels returns, as already mentioned, are impacted by the challenging market conditions in the year.

13:27 Moving on to the summary income statement. Operating profit in the year is 16,800,000 versus 16,300,000 in the prior year. This compares to a headline operating profit, which is also 16,800,000. As a reminder, our headline operating profit adjusts for exceptional costs and amortization of acquired intangibles, which this year actually offset each other. Our amortization of intangibles increased year on year by naught point 4,000,000 as a result of the recent fuels acquisitions. And our exceptional items finished the year as a credit of 1,400,000 versus the prior year cost of 2,900,000. These include acquisition costs in fuels as well as costs associated with IT projects in both food and feeds. These costs have been more than offset by the 1,200,000 insurance receipt following the conflict of interest that we previously communicated as well as negative goodwill on one of our acquisitions, which results which reflects a stronger negotiation on our final purchase price.

14:27 Finance costs increased in the year by 1,100,000, largely as a result of the completion of the current tranche of fleet renewal in fuels. And our bank interest showed an increase year on year from naught point five to naught 800,000 as a result of the investment activity in the year. Headline PBT in the year was 12,500,000 compared to a prior year of 13.2 and a reported PBT of 12.4. Our pension scheme interest has reduced marginally to naught 100,000 in the year, driven by the value of the pension moving into an accounting surplus state during the year. And our effective tax rate is 25.8% in the year, which is marginally higher than the corporation tax and is largely due to disallowable costs associated with our acquisitions.

15:13 I'll now spend some time talking through the in year performance by segment. In our fuels business, revenue was just over 636,000,000 in the year with an increase from last year driven by commodity prices. Headline operating profit decreased in the year from 8.4 to 8,100,000. Performance was driven by both lower volume and pence per liter or PPL in the year,

15:37 both being driven by the challenging first half around burning oil and gas oil, which put pressure on margins across other products. Our full year PPL ended at 1.25 versus the prior year of 1.27, and we expect our future PPL to remain somewhere in the one point twos.

15:55 Food revenue increased by 5.1% to 90,600,000, reflecting the increased activity and storage levels with average pallet stored increasing from a 156,000 to a 165,000 as the Lyondell warehouse reached capacity. Headline operating profit in the period increased by almost 19% to 5,100,000 as a result of the increased activity and an internal focus on operational efficiency, resulting in an operating profit margin of 5.6% for the year. The growth in the year means that the food business is now just under a third of the overall profit for the group, reflecting strong growth with operating profit more than doubling over the last five years. The feeds business had a decrease in revenue of just under 6%, which is impacted by commodity price changes year on year.

16:45 Tonnes increased marginally from 546,000 to 559,000 tonnes, reflecting the strong customer management by the team as well as an uplift due to the moist feed product line, which continued to perform above its business case in its first full year of manufacture. Overall, operating profit was in line with the last year, reflecting continued positive market conditions. And as a result, operating profit per tonne was £6.44. We expect this profit per tonne to remain in the 6 to £6.50 range.

17:20 Moving on to cash and looking at net cash from operating activities first. Our headline operating cash flow in the period was 16,000,000 on a headline operating profit of 16,800,000, reflecting a cash conversion of 95.2%. This conversion was impacted in the period by higher capital expenditure year on year as well as the expiry of the rent free period on the Lambdale warehouse. This operational cash has then enabled us to invest in two further acquisitions in the year as well as supporting our dividend and pension strategy. Overall, despite the challenging first half for fuels, the group has generated strong operational cash, which continues to be used to invest in supporting existing business as well as growth. In addition and as a reminder, we have existing facilities of £61,000,000 for an accordion of 20,000,000 supported until May 2028, which are primarily invoice discounting.

18:15 And we, as a board, continue to support a net debt to EBITDA position of two times, which provides plenty of headroom for continued growth. The cash generation of the business and access to facilities continue to place the group in a good position for further growth investment. With regards to the balance sheet position for the group, the key headlines to note are the strong cash position I've already talked about and the continued strength we see in the operational cash generation of all three businesses, A continued strong asset underpin with net assets of 286,000,000, an increase on the prior year, providing support and stability for growth. And a strong return on capital employed position across the group, which has increased year on year, demonstrating continued value in the investment made by the group.

19:03 Our cash generation and solid balance sheet support our overall investment case and are reflected in our capital allocation policy. As a reminder, we will continue to invest in CapEx across the group to support the ongoing business requirements whilst also looking to invest in growth where possible. This strategy is reflected in our mined debt investment, which required a CapEx outlay upfront, along with our moist feed product line and fees. The group continues to deliver shareholder value through its dividend payment, which as we've already mentioned, we will increase again this year. With regards to m and a, we will continue to utilize our cash facilities to support inorganic growth in the group as demonstrated with the two additional acquisitions completed in fuels in the year. Finally, subject to the above priorities for capital allocation, we will consider share buybacks and plan to renew the authority to do so at the forthcoming AGM.

19:58 In summary, a resilient financial result for the group demonstrating strong performance in our food and feeds businesses and a stronger second half in fuels despite challenging market conditions. I will now hand over to Chris to talk about NWF GROUP's strategic progress in the period and investment case. Thanks, Katie, and profuse apologies for my slow slides changing. Hopefully, nobody spotted you poke me to make me do it. Our strategy is based on building from the strong foundation provided by our business model, and we're doing this by focusing on four key areas. Commercial effectiveness is about understanding our customers' needs, ensuring our services meet those needs, developing and tightly managing our routes to market and sales processes, therefore, maximizing the commercial return.

20:49 And in terms of operational efficiency, we have lots of infrastructure and vehicles required to provide a good service. Therefore, it's absolutely essential that we have a continuous focus on using those assets as efficiently as possible whilst maintaining or or improving that service to deliver increasing operating margins. Growth investment reflects that we have a strong financial position as as Katie's just articulated. So it's about looking for opportunities to invest in growth through new services, new products, new geographies, or business improvement initiatives in commercial effectiveness and operational efficiency. And examples of that could be a new warehouse, manufacturing a new feed product, putting fuel tankers into a new geography, or piloting business improvement initiatives.

21:42 And then last but not least, targeted acquisitions are about growing through step change and bolt on acquisitions in existing and adjacent markets. So our most recent focus has been on consolidating fragmented UK fuel distribution sector, but we can also see that acquisitions may have a role to play in expanding our network in food. And over the next few slides, I'll walk through some examples of strategic progress in the year in each of these areas. So we start with commercial effectiveness. And as already mentioned, in fuels, we undertook the national rollouts by regional operating model in July, excuse me, to provide performance benefits.

22:29 So we previously operated under a federated depot model. This meant we had limited visibility of the sales activity and margin management by employees spread across 30 depots. We now have specialist teams based in a smaller number of regional hubs, and we're able to see call activity, call conversion, volume and margin performance in real time. And, therefore, we can make immediate adjustments on a regional basis, and that's really helpful when we're in situations like we are now where the oil price is moving quite significantly from day to day due to events in The Middle East. In food, we've invested in a new commercial team to proactively grow the customer base. So previously, actually, we just relied on on word-of-mouth for work to oops. Sorry.

23:18 To come to us. And that team has three areas of focus. Firstly, they're about more proactive management of existing customers to make sure we're meeting their needs. Secondly, they're focused on getting an increased share of wallet from those existing customers. And thirdly, they're targeting new new business. So we've mapped the market. We've got a detailed target list for each product category and geography. We're starting to work through that, and we're already securing new business.

23:49 And that capability to win additional business gives us the confidence to look to expanding into other areas of the country. And then in feeds, we've similarly realigned our sales structure to improve our effectiveness in selling both our core feed products and additional nutritional products once reducing our sales overhead. Now look at operational efficiency. And, again, as part of the fuels regional operating model, we have more visibility and control over fleet than previously, and we started to improve utilization and delivery plan achievement. We're also better able to move drivers around the country to deal with spikes of demand in different regions.

24:39 And moving forward, that greater visibility that we have of fleet utilization will enable us to manage when vehicles are off the road more effectively and to reduce tanker numbers over time through better better capacity planning. In food, we achieved greater warehouse efficiency with the restructure we undertook in June 2025, but we continue to look at all our systems and processes for opportunities to improve efficiency and create standardized, scalable ways of working. In transport, we'd already improved vehicle utilization and reduced our fleet size whilst delivering more pallets, but we believe there's more opportunity there. And we're currently in the early stages of implementing a new transport management system, which will help us realize efficiencies from our current operations whilst also providing the capability to operate and realize the benefits of having a national network of scale.

25:40 And similarly in the feeds, we're also implementing a new transport management system, in that case, to optimize our load planning and optimize the balance between delivering products on our own fleet versus using third party providers.

25:57 We then move on to growth investment and targeted acquisitions, and and this section is going to be focused on our food business. So NWF's food business, which trades as BOA Logistics, is the leading specialist ambient grocery consolidator. We focus on customers who are too small to have their own dedicated supply chain into retailers, I e businesses with sales of up to about 250,000,000 per annum.

26:25 And most of our competitors are either very large generalist logistics groups who would rather run a dedicated warehouse for a much larger brand, or they're smaller players who don't have the scale and expertise to match our service. We estimate that our addressable specialist market, which is ambient grocery consolidation, is worth about £1,500,000,000 per annum. And on that basis, our market share is about four to 5%. And if you look at the little, pie charts on the right hand side of the chart, we have similar market share across most of the key product categories demonstrating the opportunity to gain market share. Therefore, in summary, we are the leading specialist in a large market with a market share that gives us plenty of scope to grow.

27:19 But to make the most of that market opportunity, we need a national network. So we currently service a national customer base from three warehouses in the Northwest, and this means we're missing out on transport synergies and potential customers because of our location. So our plan is to build a national network with facilities close to each of the big UK population centers, which is where the retailers have their own distribution centers. And this will give two benefits. So firstly, transport synergies. Currently, our fleet cannot get to delivery locations, and back in the day, if that end location is more than about three hours from our sites. So, really, only the Northwest, Yorkshire, and the Midlands fall within that radius.

28:12 And nearly 50% of our out outlets are traveling further than that with a significant proportion going to the Southeast. Now that results in the driver spending the night in a cab somewhere. So we're paying for a vehicle, and that isn't moving anywhere and the driver to to sleep in there. It also results in empty running miles because we're traveling to other sites to try and pick up back loads or we're running empty back to base if it's a shorter outward leg, and it also results in the lower fleet utilization and additional cost. So significant transport synergy opportunity.

28:50 The other benefit is customer expansion. So whilst we service a national customer base very effectively, some customers or target customers do want proximity to their manufacturing facility or the port of entry for the products they're bringing in. So a national network would expand our target customer base.

29:12 A lot of ambient groceries are imported, and the imports mainly come into The UK through southern or eastern ports with the majority of container traffic, which is probably what we're most interested in coming into the East Coast. And and currently, we're more than three hours away from all the major ports except Liverpool and Holyhead, and those combined only account for about 80% of ambient grocery imports. So having a national network will really open up our target customer base. So how are gonna do that? Well, firstly, we're making sure that our current operations are as efficient as possible and that our systems and processes are scalable. We then have a range of options. So we've been looking at targeted acquisitions of providers in other geographies, and we have been making approaches to those businesses.

30:05 They are generally family owned, so acquisition is dependent on someone wanting to sell and at a price that makes commercial sense to us. But in addition to that, given our experience of opening two new sites in the Northwest in the last six years, we've also been exploring opening our own warehouses in our target geographies, which does give us the benefit of more control over both location and timing. Now alongside m and a and new warehouses, we're also looking at smaller options to realize some of those transport synergies. So that could be about working more closely with, some of the providers in other regions and also considering our own network transport yards where we could at least swap trailers.

30:53 As a board, we believe the growth of the food business represents a significant opportunity for the sustainable long term development of the groups, and we are actively pursuing it.

31:06 So why should people invest in NWF GROUP, and why now? Well, firstly, we're a leading player in each specialist market with scale and capability barriers to entry. In these uncertain economic and geopolitical times, markets are large, they're robust, and they're resilient with continued demand, and that gives confidence in our ongoing performance. Secondly, as a group, we're focused on continuously improving our financial performance through strategic focus on commercial effectiveness and operational efficiency. Thirdly, we're constantly looking for opportunities to invest in growth. And in particular, as I I just talked about, we're seeking to continue to grow our food business to develop a national network of scale.

31:54 And lastly, we deliver consistent attractive financial returns. All of our businesses are profitable. We generate cash. Our asset base gives us a strong balance sheet. We deliver a strong return on capital employed on that balance sheet, and we have an excellent track record of growing our dividend. And whilst as a rule, I tend not to comment on our share price at the current level, I don't believe it represents the value of the group. So in summary, a resilient financial performance, slightly below initial market expectations against the backdrop of a very volatile oil market with fluctuating demand, strong growth in food profitability, reflection reflecting the actions we took early in the year and our previous investment in the Limedale warehouse and further strategic may progress made to build a platform for growth.

32:53 In terms of outlook, it's very early in our financial year, and it's our seasonally quieter part of the year. So far, we've seen a normalization in the fuels market, although that's in the last few days has been little varied.

33:08 But assuming that continues, then the board expects that f y twenty seven will be broadly similar to f y twenty six. We continue to focus on our growth strategy, and the board remains confident in the future prospects and potential for the group. I'd like to thank you for watching, and, we look forward to updating you at our half year results, but also look forward to, answering your questions now. Fantastic. Fantastic, Chris, Katie, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. While the company take a few moments to review those questions submitted today, 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 our investor dashboard.

33:56 And, Chris, Katie, if I may now hand back to you for the q and a session, read out the questions where appropriate to do so, and I'll pick up from you both at the end. Thank you. Thank you. So we'll we'll just run down these in order. So the the first question we have is, are we looking to open a new warehouse? I think that was submitted at the, start of the presentation, so I've probably dealt with that in the presentation. But, yeah, that is one of the options we are considering as a way of growing the food business. Clearly, if if we do find a suitable site that works for us financially, then we will update shareholders in due course on that. But that that isn't some that is an option that we're actively considering.

34:44 The next question is around the CMA and what the implication for us and what may have to change and how might competitors be affected. So we are pleased with the CMO report because, ultimately, that concludes that domestic heating oil market is very competitive. So that's the first key point to make. They have made some recommendations. The most important of those is probably around the introduction of a proportionate regulated regime, probably under Ofgem. Those recommendations have gone to the government, so the government has a period of time to act on those or not. My expectation is they will act on those, and we will end up, with a regulatory regime in time.

35:35 We welcome that. I think what we're doing in terms of our operating model is in line with that direction of travel. And therefore, as a scale provider, we think that actually might be quite helpful. I think that's probably more difficult for some of our smaller competitors because we're as we're whenever there's additional regulation or compliance, then there's an additional cost and burden of doing that. And for those of us who are bigger players in the market, that's probably easier to deal with. But, yeah, we think largely the CMA report is pretty positive. Next question is, what are our expectations for the food business for f y twenty seven given that h two operating profit was only flat and that you're operating close to max capacity already?

36:28 Katie, do you want to deal with the sort of analyst expectations bit there and also to deal with the the narrative element of that? Yeah. Sure. So so you're absolutely right. Given that we're almost at max capacity, there's only so much we can grow our underlying profit there. But as Chris talked about earlier, we we continue to look at improving our operational efficiency. So we will look to try and improve the cost base that supports that network. So from an underlying, analyst point of view, we expect a small improvement year on year on our profit as we, invest some of those operational efficiencies. And our operating profit margin, I think, is around about 5.6%. We'd expect that to stay around about 6% mark for for that business. But as you say, we are constrained by the, the network that we have at the moment.

37:15 Yeah. And just to add to that, the fact that we're fully using off-site storage is, less efficient. You wouldn't yeah. If we weren't looking to grow, then we'd actually probably reduce, our customer base slightly for all we were doing was looking to optimize our our current network. So it's very much in the context of trying to grow. Next question. Is it possible to rebalance the dividend between the final and interim amounts? This is something as a board we consider on a regular basis. The reason we haven't is we are quite seasonal because of fuels by business, but also our feeds business. So our our profit is very much second half loaded and as is our cash generation to some degree as well.

38:08 Therefore, we feel it's appropriate to take a view on the dividend, once we've got a clearer view on what the the performance for the overall year is and what our cash generation for the year overall is. That being said, it is something we continue to revisit. And, clearly, over time, there will come a point where it does need to be rebalanced. So it is something that's actively under consideration. Next question is, have we had any contact with our new shareholder, Aimia Inc? The answer to that is yes. We have. So we've had some dialogue with Aimia and the executive chairman there. And if you want to know more about Aimia and, its investment strategy, actually, I'd encourage you to look at, its website where it's got a pretty good description of what they are trying to do, and and probably better than me trying to paraphrase it on this presentation.

39:12 The the very short version, it is that it is seeking to become a patient capital investor. And probably the best comparative of something like that would be a a Berkshire Hathaway. But, if you want to know more about them, I'd encourage you to to to go and look at their website. But, yes, we have had dialogue with them. Think this one is one for you, Katie. So it's how confident are you in the return on capital employed you publish for fuels business? You seem to spread the lease liabilities across the segments, but not the lease interest. Do you want to Yeah. Sure. And it's interesting because it's this is something we've actually been talking about recently. So, yes, you're right. In terms of, our capital employed, it will look at that that how that lease liability is spread across the the businesses as part of their operating profit.

40:05 We do have segment information in our annual reporting accounts, which does show how that interest splits out because clearly we can split that across the businesses. We do have interest in our our food business as well as our fuels business, particularly related to, our leased warehouses as well as our fleet. So there is a spread across the three businesses, but you can see that in in the segmental numbers that we publish in our annual report on accounts. K. Next question is anything been done to make broker research available to retail shareholders? It's another one as a board we're we're looking at. I was sort of hoping that, with Brexit and potentially, therefore, whether there was some way we could, water down MiFID too and and perhaps there'd be more availability of broker research. But, that's something we need to discuss as a board again because I appreciate the the frustration of that for people who don't have access to that research.

41:10 And next one, given the very low valuation of the shares compared to your free cash flow, why not give more cash back to shareholders? How are you benchmarking potential m and a valuations versus your own valuation? I'll deal with the second bit of that first. That's a very good question. And, actually, it's one of the things that potentially is in the favor of, in terms of food expansion, doing that through opening our own facility rather than doing it through m and a. Because as as I've said in the presentation, I think we are undervalued. That does have an implication for buying other businesses because if they're not public companies, then, they don't have the same views on on valuation multiples.

42:03 So that does nudges more from a shareholder value perspective to looking at our own sites versus m and a. In terms of cash back to shareholders, I think Katie dealt with that in capital allocation policy, but we see opportunity to deploy capital at the moment to create growth. Clearly, if we don't have those opportunities, then we would consider share buybacks as a way of of giving more value back to shareholders. Next, when you continue to grow despite challenging market conditions, where do you see the biggest opportunities to accelerate earnings growth? I think there's there's two answers to that. So firstly, it has been a difficult fuels market.

42:52 With the changes we've made to our operating model, I think we can improve both our margin, but also I expect we, we can grow organically our market share because we've made our sales engine far more effective. So we want to grow our fuels business. Secondly, as I've talked about, we see a big opportunity to increase our market share in our food business, and we're very focused on doing that. Then we have can you please give some details of acquisition economics? What volume, multiple, what proportion of sales are normally retained? I'm guessing that's reflecting more back to, fuels acquisitions.

43:44 So in that case, historically, we've paid about six times EBIT, and that's the EBIT that we will make from the business, but not really factoring in any synergies. Obviously, clearly, that's a bit more challenging given our current valuation. In terms of what proportion of the volume we normally retained, we we the businesses we buy have tended to be more domestic focused businesses. So our retention of customers is pretty high because domestic customers tend to be quite sticky. So we retain most of the volume that we've acquired. And then lastly, what proportion of fuels business is domestic heating oil, which is in structural decline?

44:36 I'll just challenge the last point to that question. If you actually look at the market stats, the market's been pretty flat for ten years. So whilst I don't dispute in the longer, longer term, that will be a structural decline. The reality is that isn't happening particularly quickly. And if you look at the uptake of alternatives, which heat pumps is really the main one, the uptake is really, really low. So the domestic heating oil market is is pretty stable and robust for the for the medium term. In terms of how much of our business that, accounts for, it's about 25% of our volume.

45:24 It's more than that in terms of gross margin. However, the cost of serving that domestic, market is higher. So from a net margin perspective, it's probably not dissimilar to its share of the volume at at sort of 25%. That's great, Chris. Katie, if I may just jump back in there, and thank you for addressing all those questions for investors today. But Chris, before I redirect investors to provide you with their feedback, which is particularly important to yourself and the company, could I please just ask you for a few closing comments? Yes. So, thank you everyone for attending, and thank you for the questions as well. I thought those were, very good questions. Really just summarize that it it has been an interesting year.

46:12 Very pleased that we managed to drive a resilient performance out of that, but more pleased with the fact that we've continued to make improvements to the business that will create the foundations for us to be able to achieve the growth that we want to, both in our fuels business through benefiting from the changes we've made to the operating model and as we've outlined in the presentation with our plans for growing our food business. Fantastic. Thank you once again for updating investors today. Could I please ask investors not to close this session? As you know, we'll be automatically redirected to provide you feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.