Sigmaroc (LSE:SRC) — Interim results to 30 June 2020

0:03 Good morning, ladies and gentlemen, and welcome to the SIGMAROC PLC Interim Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. The company may not be in a position to answer every question it receives during the event itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard. I'd also like to remind you that this

0:34 presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Max Vermorken, CEO and Dean Macefield, CFO of SIGMAROC PLC. Good morning. Good morning, and good morning to Will, and thank you very much for joining this interim results presentation. We've obviously used the slides that you will will have found on the results section of the website, which I will go through and which you could see on your screen. So, I'll do a quick overview of a few key highlights of the year first in this first Slide number four, and we'll go through a few more details subsequently. Then Dean will take you through the financial highlights, and after which, we'll come back to outlook statements and the GDH acquisition, which we completed at the beginning of the month.

1:24 So highlights for the first half, a good solid first half, 4,500,000 sales, 10,900,000 EBITDA underlying, and EPS, which is slightly ahead of last year at the same point in time, which we're very happy about, and EBITDA margin of 20%, even that we managed to increase. The fact that the EPS number has increased to the first half, is something that we're we're extremely proud of. That's got to do with an effective management of the COVID crisis and also the quality of the businesses that we bought. In terms of COVID, as you know, we've made quite a few statements on that in, various media and also on the website. We were quick with dealing with the the COVID problem. We were starting in February to analyze what the potential risk and impact could be.

2:13 Beginning of March, we started to really put things in place to meet to to deal with it effectively. That has had a number of interesting effects for us. First and foremost, a very supportive workforce will, in in in pretty much every case in the business, said we'd like to continue to work. We'd like to keep this business going. We think it's the right decision, and that has allowed us to continue to trade through, the the health crisis. At this point in time, we have had one confirmed case of COVID in the business. That person was identified through testing, and the people around that person were also tested. So far, we've had no further confirmation of any other other cases in the business, which is which is good. In terms of acquisitions, we obviously completed the acquisition of the Welsh business, GDH.

3:06 We had 40% of that business already, and we've now completed, buying the remaining 60%. And I'll come back to that in detail later on. Operationally, we've done everything, I think, to a high standard, especially in Belgium where we have, the newest sort of most recent business that we added last year, which is Belgium Bluestone and aggregate quarrying, in that same site. It's a very big site, 300 plus hectares, and I'll come back to a to a few details on that as well later on. Outlook, I will spend some time in in detail at the end of this presentation because, obviously, the outlook is quite key. Q three has been a good quarter for us so far, and I'll come into I'll I'll give you some extra detail on what q four, might look like or where we think the business may be be headed.

3:58 So, some more detail, first. So trading, trading across the first half. The first half is effectively a half in two parts. The first three months up to March included were were good. They were in line with our forecasts. They were in line with the budgets that we'd set. Obviously, there was no COVID impact at that point in time. The second part of the first half obviously got impacted by the coronavirus and the the lockdowns that ensued. If you look at the various hubs and the various components in the business, each single hub, each single platform was affected by it differently because local governments and local authorities in these various places approached the lockdown differently. Roanoke, The Channel Islands first, a very harsh lockdown, closing the borders, sending people home, keeping them home for a long time.

4:52 A release of those of the harshest measures, in the month of April, and then a gradual release of of the other measures in the month of May and June. Guernsey currently still has closed borders. Jersey, you could fly in and out of with testing. So it's it's a it's a clearly different view on on life than than than for instance here. The the consequence of that was a difficult month of April, but a recovery in May and a recovery in June. The good thing is that that platform had a positive EBITDA, and therefore positive cash flow, for each for each month. PPG, Precast Products Group, totally different story again. We, kept trading throughout. We didn't shut any sites. We didn't we stopped producing at CCP in the North, a little bit for a little while for a few weeks because, demand dropped off in April. That's, that was obviously logical. But, again, across all the various businesses in that platform, positive EBITDA for the for the month of April, positive cash flow, and then a a good recovery and a good bounce back in May and into June. And so at the half year mark, we have really good performance out of the PTG group business.

6:06 South Wales GDH at the point at the first half, we were only a 40% minority shareholder. It was a really good test for us, in our view to see, what that business would do across the first half in these conditions, and basically confirm that purchasing this business and purchasing the rest for which we had an option was actually the right idea. Same story, again, different lockdown procedure, harsher than elsewhere. Business had, obviously, a fifth 50% drop in revenue on in the month of April, pretty much similar to everybody else, to everywhere else, and then a bounce back after that in May and into June. Again, positive EBITDA, even though not much in this particular case, but still positive EBITDA, positive cash generation across the the the more difficult months, the cash position improved.

6:57 Belgium, both the the Bluestone and the aggregates side of our, of our business there, similar to here, a 50% drop in output, a difficult month of of of April, obviously, as a consequence of that, lower lower margins, but a positive EBITDA and positive cash generation. So once we got through, that period, we were, we're back on track for the recovery in in May and in the and in June. Operationally, there's a few things that we need to obviously highlight. As I said, health and safety wise, last November, we put a new health and safety plan in the in the business to level everybody up. Essentially, level them up to the Roanoke levels because that's the furthest advanced in terms of, implementation and and standards.

7:49 That's being, tracked very, actively. We've got, an an internal audit team that does audits of every site, sets targets, sets plans to make sure that we, that we get all the businesses to the to the highest level of of of in terms of health and safety standards. There's quite a lot of improvement going through as we speak. Belgium, for instance, had the longest period without harm, without incident in its history, right after we acquired the business. So we see the results there, already. Obviously, COVID, and the protocols there, a rigorous implementation of of of that, and then the consequence of that is obviously that we have been able to keep trading, that we have the support of staff and unions to keep trading, and that number of cases in the business is limited so far to one.

8:36 Across the first half, we put a lot of cost controls in. We also deferred a lot of the CapEx to make sure that we remained that we kept our margins as high as possible that we, that we could control or or or manage the the the impacts of the lockdown. A proportion of those cost controls we can maintain, a larger proportion, obviously, we can't maintain at this rate because you start to harm the business in the in the short or even the longer term. So we will have to come back to some CapEx investments, but we will not accelerate any CapEx investments, and we'll have to release some of the the more strict, cost control measures that we put in place, again, to make sure that the business stays stays in good shape, for the future. Asset development, there's quite a few there's quite a few things that have happened there. As you know, in Belgium, we're going through an exercise of extending the site by about a 100 hectares. There's planning approvals required.

9:35 There's removal of roads putting in different different locations. All of that's gone smoothly even though, there was a lockdown, and we're making it a progress exactly to the schedule that we set out earlier last, at the end of last year. And, in terms of PPG, specifically in Pound Field and in CCP, we've acquired more land, to be able to be to stock more, be more productive, be able to deal with, more different types of products. There's a few initiatives on the ESG front, which we'd like to highlight. There will in in the future be a a very well defined ESG policy, which we will, publish in our annual report with all the the goals and the targets. At this point in time, we're still formulating and seeing how we can, put that policy in place, and so we're focusing on a series of initiatives to make sure that we tackle all the various aspects.

10:28 Governance, we've appointed, Anthony Broadbank on a part time basis as our general counsel. He's ECM, so equity capital markets partner to Phil Fisher, one of the most talented lawyers of that field in the city, and that's very good from our perspective in terms of regulation and requirements from a governance perspective as a as a traded business. It's important that we've got that. We've got two non executive directors that joined the board in April, Jacques Emsens on the one side and Simon Chisholm on the other. Jacques is of the Emsens family that have a large empire, if you will, of of large industrial businesses, Subelco, Ethics, Aliaxis, multibillion, multibillion euro or pound, companies in the industrial sector, in our sector as well, sand, because that's what Subelco does.

11:25 And to have someone of that quality on our on our board is is is a real privilege. And then Simon Chisholm, former fund manager with Henderson, a chartered accountant, very well known in the city. So that gives us a real exposure to to what the to to the financial side of things, and and gives us someone with a chartered accountant background for the audit committee. Carbon initiatives, we are

11:51 going through a series of test phases on different products that we'd like to develop. These test phases are for carbon and cement free, so low carbon cement free concrete blocks, which is clearly a product that is going to be of of interest to the in the future. That's it requires testing so that we make sure that the product that we sell is, meets the, the standards of British standards and other standards that we need in terms of strength and so on in terms of quality. And as soon as we've got the final product there, we will obviously come out and and and make make that known. And then in terms of energy savings, we launched into the third phase of our, solar panel, project in Belgium. We will generate three megawatts or 30% of our energy consumption in Belgium through solar energy, which is a very important point. We are also a net contributor to water system. We pump water out, which we filter in our installations and pump it to the water system in Belgium.

12:48 So all of these things are are quite important in our sort of journey towards sort of more sustainable operations. I'll hand you over to Dean now for the for an overview of the of the financial results, and we'll come back to some some further updates later on. Dean? Thank you, Max. Good morning, everybody. I'm sure you've all seen been through the results just to to pick up some of the highlights of the of the growth we had in the first half of this year, substantial growth. So with an 83% increase in in revenue, taking us to 54,500,000 for the six months, a 91% increase in underlying EBITDA, a 51% increase in profit before tax and the increase in our earnings per share.

13:40 Now obviously, in the half first half of this year, we benefited from the contribution from CVH. But it's pleasing to note that if we take on revenues on a like for like basis for 2020 half year, they're consistent with the prior year despite the COVID-nineteen crisis. Another point to mention is our EBITDA margin is higher against the previous half year. It's at 20% against half year 2019 of 19.7%. And again, despite the turbulence of this year, it's not too far behind. It's only marginally behind the EBITDA margin for the whole of 2019, which was at 20.7%.

14:26 Moving on from there. This is a snapshot of the income statement for the first half. As you can see, some of those figures we've talked about. The EPS is pleasing to note. It's up marginally, but it's still up despite the circumstances. It's also worth mentioning our contribution from GD Harry's for this year is reasonably minimal as its equity accounted. But now with it being a full subsidiary, its contribution to the results of SIGMAROC will be far more meaningful going forward. So that will be reflected. And when we get to the end of this year, we'll start to see a real impact from the contribution of TD Harris. In terms of the key balance sheet statistics, you'll note that our tangible assets have more than doubled, and our total assets are practically double with with that's obviously with the the inclusion of a CDH now.

15:28 Our net debt has has grown, again, because there's there's an element of debt within c Carrier Derena. One of the the the key statistics, our cash balance at the half year point was over 17,000,000 compared to last year, 3,000,000. And it's because of efficient cash management, cash generation within the businesses, it's put us at that strong position, allowing us to do the acquisition, complete exercise of option of G. D. Harris from our own cash reserves.

16:05 Net debt, the evolution of the net debt since the year end 2019. We've actually seen a slight reduction in the debt position. It was circa GBP 50,000,000, and it's now sitting at approximately GBP 46,000,000. So all of our our results, we're we're presenting a strong set of results. We're we're pleased and proud of the way we've got through this I say got through this crisis. It's obviously ongoing, but we continue to have measures in place, good cash generation, good cost control and allowing us to present this strong set of results. I'd like to hand you back to Max to to talk about the outlook for the rest of the year. Thank you very much, Gene. So there's two slides to come here. First and foremost, the acquisition of GDH and then and the outlook.

16:57 So to remind, all of you, about GDH. GDH is independent construction materials business in the West Of Wales. It was set up by, the Harry's family, Gerald, and then subsequently, his son, Ian, took took the business, forward. It consists of about seven Hearthstone quarries, with 38,000,000 tons of reserve. That 38,000,000 tons will last, current output around about fifty years. And then there's a third of 35,000,000 tons of resources in these same areas, which will allow for another another, around about, fifty years worth of, extraction. It comes with six concrete plants, three asphalt plants, a wharf, four contracting gangs, and it's about 240 employees. It's a fantastic setup.

17:46 It has a really good, strategic positioning in the West Of Wales. It supplies, the various areas there. It supplies all the infrastructure jobs. It supplies some of the wind farms, out to the sea, the, obviously, the sea coastal defenses, and all the road network and house building. We were very happy to buy that business, at least to buy a stake in it at the end of at the end of April last year with the intention to purchase the rest of that business, the remaining 60% from cash generated over that period of time so that we would avoid dilution. The first tranche of 40% was bought from cash in the business and the second tranche, which we now completed, will be as well. That, from a perspective of earnings enhancement, is obviously good news for shareholders.

18:34 If you look at the GDH business, and well, if you look at the statements we made about it in April last year, you'll see that, the, financing structure inside GDH, the debt structure and the way they've used their capital there is actually not ideal from our perspective. It's too highly geared, and the gearing they've got is, is fairly expensive debt. We intend over the next three months to refinance that and put that put the that business in in a in a better place to get rid of some of the highly and and expensive, primarily HP loans and replace that with standard bank debt. And that will be done in line with the refinancing of the group in general, which is a project we're working on as well to put up a one large credit facility to to fund the entire group for which we then will draw, to to restructure the balance sheet of of GDH. An important point to note, in terms of our policy, in terms of leverage in the business, we always like to run our business at maximum two times EBITDA leverage with a trend down.

19:45 Two times EBITDA, is is, in our view, a good and healthy upper limit. It's far enough away of our covenants at 3.25, and it allows us to be most efficient in terms of the use of capital. If we were to, run at lower leverages rates than we would have obviously, for December expansion, would have been, more intensive in terms of equity use. From an EPS perspective, obviously, this system works well. I'm convinced that we're able to do and maintain this sort of run rate because even across the first half of this year, with all the disruption we had, we were able to generate plenty of cash through the business and lower our debt to EBITDA ratio across the first six months from 2.07 to one nine seven. And so from that perspective, we're fairly happy where we are currently.

20:37 If we now look at, basically, the outlook for this year's number of statements to make. We were very swift, very quick in making sure that we, that we got to grips with the potential impact of of the corona, coronavirus and COVID. And that was, that was help with Dean's help, was actually the right approach, to be so quick on it. We managed our our cash very well. We beefed up our credit controls, and we also started to really speak and interact on a on a more than daily basis with with suppliers and customers so that we could keep the local economy essentially going. We were we were constantly talking to our suppliers saying, well, we will continue to pay you. Please pay your suppliers as well. We were telling our customers, please keep paying us because we can then continue to pay our suppliers as well, so that this sort of logic and and this circle keeps keeps going around. And that works very effectively.

21:34 We had no delinquent debt, we had no non payments, and we kept paying everybody within the within the standard terms. So it was excellent. If you then look at the performance of the business into post period July and August, the trends that were set in, June are continuing. We're quite happy with that. Obviously, there's a few things that you need to note. July is a holiday month. In particularly in Europe, there are mandatory sort of shutdowns of construction in, the the the July month. That means that the July month is not going to be as strong, in terms of EBITDA generation as, for instance, June would have been where there was no holidays. But the trends in the front of the model trends of demand were still exactly, the same.

22:20 In the September, we see those trends also, continuing. It varies across each platform in terms of how these trends come through. Jersey, Guernsey, it's much more visible and sort of you can more easily forecast because the market is relatively small and locally, it's very clear what projects are going to be up and running and at what point in time. There's a similar sort of feeling about, West Wales because, again, the same sort of logic. England proper with our Precast, business, that's a shorter lead time product. So it's it's these products get sold on a shorter sort of delivery notice time. Therefore, the outlook forward is less easy to to ascertain because the order books aren't aren't months and and weeks ahead.

23:09 That said, if we look at the various projects and the various components of the businesses there, we have sort of decent enough visa visibility into q four to make to to say that we're we're fairly confident that q four will be fine from a PPG perspective. If you look at Belgium, a similar sort of story as as PPG. Again, a product that has not huge lead times, so therefore, the order books are not weeks ahead, months ahead. It's sort of few weeks ahead. These order books are fairly good at the moment. What is what is interesting, and this happened a little bit in The UK as well, is the whole planning approval process is slightly jumbled up at the moment. I suspect it's got to do with the fact that administrations and local councils and so on have been shut. People are working from home or starting to work again.

23:59 So it's less visible or less less predictable what projects will be accepted in terms of planning, and therefore, what projects will be we will need to we we will supply in terms of materials.

24:12 That hasn't actually changed in too much in terms of the order book volume. It just has has changed a little bit the visibility we have further out. And so that's why we're always we were slightly cautions cautious in our in our statements and our outlooks to to the market, but basically making this point very clear. Trends are good. Fundamental demand is good. But the consequence of this COVID crisis has meant that, the visibility is slightly less than it would have been, for instance, last year. We will start to consolidate in full the GTH business. As I said, from an EBITDA perspective, there will be essentially one quarter of of EBITDA coming through, for this for this calendar year. December is always a weak month in in in our sector in general, but in g d g d a is particular because of weather disruption and so on.

25:03 But from from 2021 onwards, both full contribution in terms of EBITDA and EPS will be obviously nicely accretive for the group. So that sort of wraps up the outlook. So if I want to sort of summarize that, it's we're trading well. We're optimistic that the future will will remain within the the current trends, but we need to be also realistic. It is a period of crisis. It's a period of of difficulty in terms of forecasting. The order books are good, but visibility further out is obviously less as easy than it used to be. So these two things need to really be be kept in kept in mind. So that concludes the slides I had for you today.

25:53 And I see a number of questions have appeared, already. I will sorry? That's great. Thank you, Matt. Perhaps we could just look at some of the, presubmitted questions before we jump into the live ones, if that's okay. That's perfect. Happy to do that. Great. And and just to just to say, ladies and gentlemen, do please continue to submit your questions just using the Q and A tab situated on the right hand corner of the screen. Just while the team have a quick review of those questions submitted today, I would like to remind you that recording of this presentation,

26:22 along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard and investor me company platform. And lastly, before I go back to Max and Dean, I would like to remind you that your feedback is important to the company. So immediately after the presentation has ended, you will be redirected for that opportunity to provide feedback in order the company better understand your views and expectations. So perhaps, Max, if I could just address these to you. We had a couple of pre submitted questions, if that's okay. The first one we had in, what trends are you seeing in the market at present and how are you protected from the downward market pressure that may arise? Okay. The trends we see in the market is what I sort of tried to allude to in the last slide. May, June May, June essentially were a massive rebound where a lot of the demand that was held up in April because of the lockdown was then basically coming back on. And so a lot of projects that were started were stopped and were started again. That helped the recovery in the construction industry a lot.

27:23 Since then, the type of demand has slightly shifted, where we would have a sort of a more even spread between infrastructure, housing, industrial demands for the different products we have. We see we have seen that infrastructure dropped away a little bit because of government shutdowns, that housing, especially new housing, softened a bit, and that but instead, there was quite a lot of strength in home improvement extensions, terraces, all that sort of stuff. So for instance, fence posts have been a very good seller seller for us at over the last five, six months. I suspect because a lot of people in the lockdown have were at home and decided that they could do some home improvement work. The fact that this happened is is is really good because it compensated for some of the demand in new build housing that that disappeared in the lockdown period. Now as we were sitting here, the demand starts to shift back towards more traditional forms again. New build housing is starting to pick up again.

28:24 Infrastructure work starts with governments pushing those projects starts to appear and and become stronger. So that's particularly good. And I suspect that the home improvement the home improvement work the additional demand for home improvement work will not continue as it as it is because it's particularly strong at the moment. So that's sort of the rough outline, and that's pretty much the same everywhere across the group. That's fantastic. Thank you, Max. Next question we had in, is there scope to consolidate and increase market share through accelerated acquisitions at this time? And what are your M and A criteria? Yes. So that's two questions in one, actually. It's a good question. All m and a work across the lockdown basically stopped because most people a lot of the m and a work also depends on meeting people, talking to them, trying to convince someone to sell a business, having a look at the business that none of that was possible. It started to pick up again over the month of August, and into September.

29:25 The m and a work that we see is in part same that we were already on before. And as you as we've repeatedly said, we're typically in discussion with five, six companies at any point in time for acquisition. We do that on purpose. It means that we have a choice of what assets we can we can buy. I suspect that over the next few months, we will see two new sources of of potential acquisitions arise. Large groups, majors will probably want to restructure their balance sheet a little bit after this crisis, maybe get rid of some for what they perceive as noncore assets in their portfolio, and therefore, those will come on the market. That that, I suspect, will not really happen before the end of this year as most of these major groups are currently in budgeting phase, at least at least at what was the case when we were with the the Farage Holsim. This is the budgeting phase, and out of that budgeting phase, they will then set targets of what disposals they could possibly look at. So that's the first

30:20 source. The second source will probably be, is already independent sellers of of so independent owners of businesses who, for whom the COVID crisis was a little bit of a wake up call that they are in the business, they're working, maybe this is time to enjoy the life a little bit more, and and that for that reason, they could, they could sell the business at this point in time. Both these sources, we'll very much look at. In terms of m and a criteria, it was always it's always very, similar in in every case for us. A business needs to be, first and foremost, something that you are happy to own for twenty years plus. Because once you own it, it's very it's it's it's your problem, essentially. So you need to be happy to have it. You need to be happy to have it for the long term. It's not just for for for for the next year and a half, then hope to get rid of it or something.

31:09 That's just the wrong approach. Secondly, the if well, a corollary to that first point is that typically means that the business needs to be of high quality,

31:19 a very good, asset base, good location, combination of both, some interesting products that they produce or have patents on, something that sets the business apart. Thirdly, when we buy a business, we want it to be earnings enhancing without us doing much to the business. Not that we don't do work on it, because we want to just make sure that we already have earnings enhancements for shareholders even if we did nothing to it. And then typically, we start to then look at what can we do in terms of improvement, and that's probably the fourth criterion. Can we improve that business to increase profitability by 30% so that their money is made and check and the EPS goes up? If we can manage those things, we've got a good we've got a good acquisition. And if you look at what we've done over the last three and a half years, that's essentially what we've we've done. Each time, good business, good quality asset, nice location, plenty of improvement potential to then drive EPS.

32:12 That's great. Thank you very much indeed. That that concludes the presubmitted questions. So, Maxine, perhaps I'm giving you a great amount of time to look at the Q and A that we've had come in during the live event. But perhaps I can just ask you to have a little scan through those and read out the question. Yep. And as well and answer them, that would be great. Thank you. Great. Okay. We're happy to do that. I've got a question here from Adam at the start. Hermco Property Limited. So it's a it's a publicly what's the it's the worst kept secret that that's Peter Tom's vehicle. Peter Tom is obviously the founder of Breeden, chairman and and and previously CEO of Aggregate Industries, one of the the true great entrepreneurs of this of this sector. He's built multiple businesses of high quality, in our industry, 2,000,000,000 plus status, so that's excellent. We were very we were surprised that Peter took a stake in us in April, and also also, actually flattered because if Peter takes a takes a position in the business, it means that he he believes in its potential.

33:16 The question was, more specifically, does Peter have any direct involvement in our company? The answer to that is no. Peter made it clear that this was a passive investment for him because he sees value in in what we're trying to build, And so there's no involvement of Peter in within SIGMAR. Second question, and perhaps, Dean, this is more one for you on the PPA. Yes. Hi. So a question for Martin regarding the PPA process on our acquisitions and what our expectations regarding intangible assets on the balance sheet after these PPA processes. Just to in case any of you are not familiar with the PPA exercise, when we make an acquisition, subsequent to that, the the the acquisition price is allocated to the various assets and liabilities on a fair value basis.

34:11 So, obviously, at the the point of acquisition, we're buying assets that are valued at their balance sheet book value. So they are fair value uplifted based on the the purchase price allocation exercise.

34:25 In terms of our expectations to to intangible assets, it's fair to say that we we are buying asset backed businesses. We've recently been through the PPA process on Carriere du Eno, and you'll note it's within the interim report that over 40,000,000 was allocated to land, minerals, reserves, land and buildings, which is sort of testament to the fact of how much asset backing the businesses we're acquiring have. We tend to do the PPA exercise on acquisitions within six to twelve months or sooner after an acquisition. I couldn't say there's a a particular number to put on what our expectation to intangible assets.

35:12 But as a general rule, because we're buying asset backed businesses, you will find that on that subsequent to that PPA exercise, a lot of the the goodwill is being reallocated to tangible assets. Dean, maybe to to add a little point to add. So the PPA process is required under international accounting standards. Indeed. Yeah. So that part of yeah. So to give you a bit more background on that, it's it's also under US accounting standards. I I think it's a different different name. But, yeah, it's a requirement when you under international financial reporting standards, when you you have a business com combination as they refer to it, it's it's a requirement of that standard that you go through this PPA exercise.

35:58 And that that's performed by an independent accountant, independent of our auditors. Our auditors also review it. So, yeah, that's probably sums it up. Good. We've got a couple of questions here following on from which is which are, first and foremost, Bluestone and the opportunity to sell a Bluestone in The UK. So that's a statement we made. We've appointed we're starting to create a commercial team here in The UK to sell this this this very nice and prestigious material, which is a dimension stone called blue Belgian blue limestone. So we've put a salesperson in The into The UK now who's starting to do the rounds and get the product known to the various outlets.

36:47 We've done that on the back of organizing distribution and a distribution system, essentially. So we could we're able to to ship the material and effectively stock it in various hubs so that people can come and view the material. We've also made sure that all the pricing and and brochures and everything else, all the marketing material is ready. So it always setting up a new market for for a product like this always takes a bit of preparation, but we've we've gone we've gone through that now. So that's that's now started. And then the follow on question is, whether we've gained market share in Belgium from competitors and if it was the same in The UK. So, yes, we have gained market share, in that's got to do with, a couple of a couple of reasons.

37:35 Some of our competitors shut down during the the lockdown, and obviously, since the building industry still continue to to operate, we were supplying customers that we had not supplied in the past before. We're very happy to, with that with that fact, obviously. That's a it's a positive for us. We're we're trying to see if we can, make a good case to keep supplying these these these new, these new customers on on a longer term basis. As in this industry, in some cases, it's impossible to be, the supplier of choice for a customer because we're just simply too far away for them, and it's not convenient for them to come all the way to us to pick a product up. That's in some cases, true. In other cases, it's just convenience or habits that they've, basically shopped elsewhere before and and are are currently shopping then with us. So we're we're doing our best to make sure that we service these these new customers and and obviously keep them.

38:36 Question from Jake. Great presentation. Thank you. Do you see any new areas you would look at to expand into? We've we we work on a basis of hubs and hubs or platforms. Each platform is in in a in a way its own small little business. Each platform has the potential to expand on its own. So that's the first area we will look at because the infrastructure is there, the hub is there, the management teams are there. Everything that you need to bolt on a new business is already present. So these are the four hubs we've got. It's Channel Islands, West Wales, England through its precast sector, then and then Belgium. So that's our active focus at the moment. Now we never exclude setting up a new platform or a new hub.

39:24 Regions we've we've looked at are actually quite interested in, would be North Germany, would be Scandinavia, perhaps North France on a very, very case by case basis because the Benelux were obviously already already present in. The way we decide where these platforms should go, it it's often dictated by the type of businesses we can buy. Are they good quality businesses? Can we expand them? Can we do some bet something better? So that's for sure one aspect. The second one is also what kind of an economy, what kind of regional structure is this? Is it a good market you can you want to operate in? Is it a, market with a rule of laws but established or some jurisdictions further away we would not want to operate in because of exactly exactly that. We like really well established good, mature economies.

40:14 So that's sort of the focus at the moment, our current platforms initially, and then if we if we feel, it's right to move forward, then we'll we'll set up a new one. Great, Max. Thank you. I think, Maxine, I think you've addressed, those questions you can from investors. And of course, the company will review all questions submitted by investors today. I'll publish those answers on the investor meet company platform. Max, perhaps just I could ask you just to wrap up before I direct investors to give some feedback for you. Oh, yeah. Happy to very happy to do that. So first and foremost, thank you very much for for taking the time to listen to our presentation. As you know, we've we're trying to make, trying to make some some efforts to make sure that we, speak to all of our shareholders, which is not always obvious because there's quite a large group.

41:04 And we thank Investor Meets company for having set this up because this is an excellent tool from that perspective. You're always welcome to submit any questions by email to our email address, ir@sigmarock.com. And perhaps the word of, sort of word of wisdom at the end of this presentation is for the last three years as a business, we've been going around, the city and going around investors and shareholders with a very simple statement saying that our industry is a local industry. It's based on local markets. The products are fairly simple. They're heavy. They're well they're abundant everywhere. So if you wanna be successful in this kind of an industry, it needs to be on a very localized basis. Local product, local economy, town based essentially. You differentiate yourself fundamentally by the service quality, you offer because the commodity product is essentially the same across, every every supplier.

42:00 And I believe that this crisis has allowed us an opportunity to demonstrate that this localized approach, this nimble, focused on your local market, structure, works very well. We were quick, able to deal with all the, the the the challenges that COVID threw our way, able to make the changes to the business to keep open and running, put the cost cost controls in place, cash controls in place to be able to be cash generative and profitable, and therefore, through this this this first part of the crisis relatively well. And so we hope that that gives all of you a lot of confidence in in our business, and thank you for your support thus far. That's great. Thank you, Max. Thank you, Dean, for updating investors today.

42:46 Could I ask investors not to close this session as you will be automatically redirected for the opportunity to provide your feedback to the company? If you access this meeting from our website, the feedback page will appear a couple of seconds after the meeting concludes. If you access from the link sent to in an email, you'll be asked to log in to submit your feedback. Therefore, on behalf of SIGMAROC PLC, an investor meet company, we'd like to thank you for attending today's presentation. That now concludes today's session. Thank you and good morning. Thank you.