Solid State (LSE:SOLI) — Presentation of Final Results & Prospects

0:03 Good afternoon, ladies and gentlemen, and welcome to the SOLID STATE PLC final results presentation. To start with, if we could cover a couple of housekeeping items. Before we begin, we would like to submit the following poll, which you will see on your screens. Throughout this presentation, investors will be in the listen only mode. However, questions are encouraged and can be submitted at any time via the q and a tab situated on the right hand corner of your screen or if anyone has dialed in via solid state at Warbrook

0:34 p r dot com. The company may not be in a position to answer every question it receives during the presentation. However, the company will review all questions submitted today and publish responses where appropriate. These will be available via your investor meet company dashboard. Finally, we'd like to remind you that this presentation is being recorded. I would now like to hand you over to chief executive Gary Marsh, group finance director Peter James, and John McMichael, managing director of the value added supplies division. Gary? Thank you, Tom. I'd like to thank you all for taking the time to attend the the presentation this afternoon. Since our interim results last December, we've seen great momentum in the following through IMC. So whether you're an existing shareholder or attending our presentation for the first time, I hope you find it informative.

1:27 And we look forward, the three of us, to taking your questions at the end of the presentation. So in a year that was probably the most challenging in our fifty year history, we've delivered a second consecutive set of record results with revenue stable, outperforming the market, and we achieved EPS growth of 18% giving us confidence to increase dividend by 28 to 16 p. And despite the challenges of operating a pandemic, we completed two acquisitions in the period, both enabling us to deliver on key elements of our strategy, increasing our own brand product offering and developing international sales, whilst broadening our technology portfolio in computing with the introduction of image processing and the addition of electromechanical products to our component component range.

2:35 We'll cover this in a bit more detail later in the presentation, but we're successfully building our open order book and have seen record order intake in q one in our target markets.

2:52 Our headquarters are in the industrial heartland of The UK, Redditch, just South of Birmingham. This year, we're celebrating a a double anniversary, fifty years since the business was founded together with our twenty fifth year on AIM. Throughout the company's history, we've been consistently cash generative and return profits to our shareholders. We operate a decentralized model with five production locations in The UK and one in The USA. With the recent acquisitions, we're now in a have a meaningful footprint in The USA, which we can build on. This decentralized approach is certainly one of the factors that has helped us avoid production downtime during the pandemic.

3:40 Just a reminder of our structure following the recent acquisitions. SOLID STATE is made up of two divisions, manufacturing that you can see on the left hand side there, focuses on computing, power, communications, and antenna products typically used in harsh environment applications. And value added supplies often referred to as our components business focuses on electromechanical, optoelectronic, and semiconductor devices together with our growing value added capability in own brand components and our sourcing and obsolescence management service. John will come on to more detail on that. It's been a can imagine the current climate a very, very popular service we're offering our customers there.

4:26 There is a group video on the PLC site that will give you a good overview of the business, and it's it's only two minutes four seconds long, so I I thoroughly recommend a a quick, review of that.

4:44 We've built a reputation of supplying trusted technology for demanding applications. We focus on our core capabilities in power, components, computing, and communications, and these are not the core competencies of our customers. Safety, quality, and reliability are paramount to our clients. Example applications in manufacturing are battery packs for robotics, rugged computer systems for warship operations, or antenna systems for met office weather radar. We've got a deep knowledge in our chosen fields providing impartial consultative product selection. As a trusted partner, we provide reliable long term supply with strict revision control. And our components business follows very much the same philosophy, taking the time to solve customers' problems to its technical staff, resulting in higher design in levels for our franchise suppliers, and increasing the value of our components business to our customers.

5:52 We're continuing to invest in our people with further business development and design resource to enable larger scale projects and increase our custom product capability. In value added supplies, our franchises continue to innovate and remain at the leading edge of their respective technologies, examples being solutions for five g and the emerging LoRaWAN networks. In both computing and components, we're working on new a AI applications in concepts for autonomous quarry trucks and a more and a more advanced stage, intelligent ultrasound. Our structure provides a stable platform to grow with with now more than 2,000 account customers across the group, giving us resilience and diversity, supplying a broad base of products to a wide range of market sectors.

6:48 Thanks, Gary. I'll start with a couple of charts in terms of some of the the numbers here and there. You can see there the the revenue and adjusted profit chart. Consensus guidance for the year ahead for revenue is just shy of 79,000,000, and for f y twenty three, just over 81,000,000. So moving to to this year's results, you can see there in the table, pleasingly, we at an EPS and PBT level, we outperformed marginally the recently upgraded expectations, which is very positive. Revenues comparable with the prior year and reflected a strong q four where we did see some demand pulled forward from customers who looked to mitigate the well publicized supply constraints in the electronics market.

7:37 Operating margins in the year benefited from overhead savings as a result of activities that were restricted due to COVID nineteen, trade shows, travel, and the like. And pleasingly, when you look, that translates to profits up 14% on the prior year.

7:58 Positively, we're on track to meet our five year goal of doubling EPS to 60 p for f y twenty two, and that's where the the the consensus expectations are for for that. On this chart here, you can see, the profit added to shareholders' reserves has grown nicely over the period, and that's given the board the confidence to increase the dividend to 16p, which Gary talked to on the on the first introductory slide. I'll spend a little more time on the balance sheet this year as there's been quite a lot of change with the two acquisitions we've completed during the year. You can see there the non current assets have almost doubled year on year, and that's largely driven by the acquisition intangibles and the goodwill recognized on the acquisition of Active Silicon and Willow.

8:46 Coming down, inventories are a little lower than we might have expected, and that reflects the pull forward in demand, which was shipped in March, and the management of the the supply chain constraints. However, we do feel we're very well placed to exploit the opportunities that are available, and John will talk to that in a little more detail on some of the later slides. Our strength of balance sheet really does provide us a position that some of our smaller don't have. In terms of acquisitions, you can see their net debt of £4,400,000 That includes net cash with the bank of £3,100,000 offset by deferred contingent consideration of about 7,500,000 We do have some additional funding headroom within our our bank facilities as well of just shy of £4,000,000.

9:35 So in terms of cash conversion and cash flow, you can see on the chart on the right there, the the underlying cash conversion. Second half of last year, we saw very strong cash conversion with the cash conservation measures we took as the COVID pandemic hit. We unwound those in the first half of this year. And pleasingly, you can see with the full year's profit, the cash conversion has continued to be very strong. That's enabled us to fund the acquisitions of Willow and Active without further dilution. And pleasingly, we've continued and restarted our CapEx program, which we paused. Later in the presentation, John will bring to life what we've been investing in. From a cash flow perspective, you can see the CapEx cash flows are really very modest this year.

10:22 That's because actually the cash flows are are capital commitments rather than cash out the door. A lot of the payments for the EMC equipment went out post year end. In terms of the acquisition, we paid 4,100,000 on completion. The 2,500,000 was paid in q one of this financial year once the completion accounts were finalized. And then there's an estimation of the earn out, which is of £5,000,000, which is payable q one next year. So q one twenty two twenty three and q one twenty three twenty four. And the split of that is about 4,000,000 in the first year, probably about 1,000,000 in the in the final year. So that's a bit of a counter through the numbers, and generally very, very positive. I'm very pleased to have come in a little ahead of expectations.

11:09 And I'll just hand back to Gary. Thanks, Pete. There is quite a lot to cover on this slide. We thought it was appropriate to continue sharing our strategy for sustained growth. And as you move around the dial, you can see there are four key elements that we focus on. So moving clockwise from the top, the first area is to continue development of our own brand products. Recent acquisitions have accelerated this with DuraCool and Hermocele, our components business, which, by the way, also supports our existing power capabilities and the Harrier brand for active silicon, which supports and expands our computing business. We're also introducing own brand product within the power business unit and supplementing our long standing antenna products with new communications own brand.

12:05 This not only complements our project based work, but it also reduces the exposure to third party suppliers. A natural development of this is the semi custom work that we're focusing on, which provides a lower cost, lower risk means of getting to an end product whilst locking the customers in.

12:25 Geographic expansion and is an obvious strategic imperative, and, again, recent acquisitions have helped us here. Work is now underway to ensure we establish appropriate sales channels in Europe and in The USA, whether that be direct or using third parties. The development of our own brand products opens up the opportunity to use third party sales and thus get that force multiplier without significant additional cost. The addition of United States manufacturing gives us a foothold of potential and material advantage over China based China built product in the current geopolitical climate, whilst our knowledge and use of subcontractors in lower cost economies is allowing us to compete in in those more price sensitive areas.

13:14 So moving around the dial, you can see there are that broadening our product offering is clearly key to increasing growth, and this is happening now both organically as we develop our brands, but also through acquisition. A broadening of the portfolio was, as you could put it, stick into our knitting, which could be as simple as adding cables and connectors on the component side or providing data analysis and user interface software, training services, and embedded technical support on the manufacturing side. This is giving us increased resilience as well as growth opportunities. Notably, a move to complementary offerings such as end to end IoT services and software solutions within our target applications, and that's opening up the possibility of recurring revenues and increased revenues from our existing customer base with the further potential to capture new customers.

14:13 Not least is our strategy in development of our our talent to retain existing talent and attract new, whether that be in the areas of technical expertise where recruitment also plays a part here to keep us at the leading edge and ensure that we are industry and application leaders, supporting and empowering our senior leadership team to ensure that they are they have the necessary professional qualifications and skill sets to accelerate our growth and secure business for the future. Or at the operator level, where we invest heavily in skills training, it's particularly relevant as we invest in new automated production technologies, such as the bonding equipment and testing capabilities in EMC and RF environmental.

15:00 John will will touch on this later on in the presentation. All of these are now in house skills.

15:12 Thanks, Gary. So we've looked at the strategy. Gary's just shown you the strategy, and I think it's important for us to show how the strategy that Gary just described translates into action. So this is a slide that we've shown before. So I'm not going to read it through today because what I want to do is focus on what it means in practice. As we've reported previously, our strategy is to provide technology products and solutions that enable and target structural growth markets. So recently, I'm sure you're all aware the government's made a number of announcements such as the government's 10 plan for a green industrial revolution. And green tech is the foundation of that plan. In addition, they've pledged to increase defense budgets by, well, $240,000,000,000 per year. And the focus there is on cyber, space, and cutting edge technology, all of which are aligned with our technology strengths.

16:10 We've been achieving success in the transport sector for some time now, and it remains as one of our focus areas. We have, for example, been selected as a supplier for a prestigious underground rail project, and that will see us work with an existing rail customer to deliver a computing solution which has customized board designs from the recently acquired active silicon. And and with complex commercial considerations, that customer is looking to reduce suppliers. So our ability to provide the wider enhanced capabilities and products has been exceptionally well received in that application. We've won significant business on new designs for medical devices, both here and overseas, and that's with our value added supplies or components business, specifically the displays business,

17:04 where we've been providing bedside equipment for hospitals in The Middle East, and monitors for infant ICU cots that have been designed in Ireland but are sold worldwide. Our recent acquisition of Willow and AC has given us a range of high voltage contactors, and these are being designed into EV charging systems, whilst our manufacturing division is currently bidding on multiple military contracts with a major UK prime following a quite lengthy prequalification process.

17:39 Our value added supplies division, won a silver award from BAE for its service levels throughout 2020, and the company has also joined the Midland Space Consortium, really to give us greater access to that lucrative space market. Other words, through a focused approach, we're we're winning business in our target areas right across the group. So where once we might have had a single device designed into an application, this focused approach is now giving us multiple devices in a single application. So each customer becomes a greater value to us. And an example of that would be where we have devices for Wi Fi, GPS positioning, switching and displays designed into EV charging posts on the component side of the business. And then if we look on the other side, we have auto focus, auto zoom cameras, computer baseboards, and bespoke antennas, all divided into surveillance systems on the manufacturing side.

18:45 So just continuing to look at our strategy execution, and this time focusing really on the recent acquisitions, you can see, as you read through the slide, that these recent acquisitions play securely into the strategy elements that were highlighted a few slides ago. So just a bit of background first. So for background, Willow Technologies and AEC, AEC being the manufacturing arm, are a distributor and manufacturer of electromechanical products. This greatly increases the product portfolio for the component business, whilst active silicon are a manufacturer of very high end vision and image capture systems.

19:27 Critically, both acquisitions have got established brands in the marketplace, which gives us our own brand products, and both have sales outside The UK. In the case of Willow AEC, that's circa 70% of their business. And in that wider geographic area, active silicon, it represents about 50% of their business. Both companies are selling into our identified strategic markets. So for example, AI and machine vision, transport, EV, EV charging, green tech, and so on. And finally, both have got very strong technical resources and leadership, and that's really extending and complementing our existing talent pool. So apart from the strategic benefits that each of these companies brings individually,

20:17 you can see from the slide that the group benefits from an enlarged technical offering. And that differentiates us in the marketplace, especially when that's combined with our existing IP and know how. And that we've seen this in action and actually ahead of expectation with the success on the underground rail project that I've mentioned on the previous slide where active silicon's baseball computer design skills was blended with our existing customer relationships to address a much more complex program.

20:49 The acquisitions themselves, now get access to a wider customer base through their group membership, and the group benefits from an enlarged customer base from the acquisitions. And, of course, all elements of the group benefit from access to a wider enhanced manufacturing capability and the consequent wider supply chains that that brings. So again, as a specific example, active silicon is now benefiting not only from its ability to purchase components at lower cost through our value added supplies business, but it's also winning from access to hard to find products.

21:29 And the technical expertise that our applications engineers bring on the component side is also now being utilized within active silicon on the manufacturing side.

21:41 So we're now seeing new inquiries from the Willow team, that combine technical know how and geographic reach with our power team's battery design, and manufacturing skills. And to put some color on that, I'll give you a specific example where we have a battery opportunity with a Belgian design

22:03 house sorry. A Spanish design house where the build is actually taking place in Belgium, and the battery packs will be manufactured at Krukurn, our facility in the South Of The UK. And that's an opportunity which we wouldn't even have knowledge of had we not made these acquisitions and got the extended, geographic reach. So that was all about the strategy. Now we've been asked frequently about these challenging market conditions that are taking place in the electronics industry at the moment. So what I'd like to do is address that head on and just really explain to you what's going on and what we're doing about it. So it's been very well publicized that these are not easy times in the electronics marketplace.

22:54 But what you may not be aware of is just what opportunities that brings and how well placed this group is to take advantage of them. So you won't be surprised to know that we've been through these cycles many times before. You you saw our pictures earlier on, and we're old enough, to to have been through this several times. So we have a very experienced team that knows how to deal with this challenging period. The bottom line is we saw this coming. And what does that mean? Well, it it means that as long ago as September 2020, we were prepositioning stock into The UK and placing extended order cover to keep us at the front of the queue. We had notified the manufacturing division of the pending problems, and they were able to secure some level of stock on critical components even down to securing cells for the battery manufacturing operation.

23:50 And this, for me, really highlights the advantage and synergy of having the components business alongside the manufacturing business. And our early warning of the impending shortages to our key customers is demonstrated very clearly in the record opening quarter that we have in terms of our open order book and the order intake. And this is clearly because customers are working with us to secure stock for their builds. And because we have a trusted position with these customers, that's allowing us to design in second sources for products where we weren't even providing the product in the first place. So that's business that we are taking away from our competitors. And the sourcing and obsolescence group that Gary mentioned earlier has really been instrumental in finding devices both for our own production and for our customer base.

24:47 And very critically, these this is a team of very expert people who know where to go to find the product from trusted sources. And what I mean by that is it's their expertise which is ensuring that counterfeit product does not get into our customer supply chain. When a customer buys a product that's been sourced through our sourcing group, we are guaranteeing that that is not counterfeit product. And, of course, we're getting access to new customers and especially where we're able to assist them in that designing in of second source parts. So not surprisingly then, all of this has led to some price increases. And on the whole, we're able to pass those on to customers. If customers understand the position in the marketplace, they know what's going on, and they're accepting those increases.

25:37 There's also been some opportunity for margin improvement, but I want to caveat that and be very clear about that because we are a valued supplier and a trusted supplier to our customer base. So we will not put at risk a long term relationship for a quick book. In other words, we'll treat our customers fairly. We are improving our margins slightly. We are taking advantage of it, but not to the extent that we would damage a relationship with a customer. And, clearly, it's not just about what's happening now, but as we come to the end of these shortages and these supply chain issues, we need to be equally as alert so that we manage coming out the other side of that. And, for example, not ending up in a position where we're overstocked in the marketplace.

26:33 So hopefully, that gave you a bit of a flavor. I know we've had some questions on the supply chain pressure and so on, but we can deal with that in more detail later on if there are still questions. As we've outlined previously, we continue to invest in technology and to develop our capabilities, particularly enhancing our IP and know how. And that's specifically true in terms of our capital investment. So I just want to take you through a few here to give you a flavor for what's happening in the business. On the bottom left there, you can see our brand new e m c chamber. That's now commissioned. It's our Redditch facility. And what you don't see, of course, is all the test equipment that surrounds that, which has been certainly a significant cost, but a very worthwhile cost. Because by bringing this in house, it makes us far more agile, gives us much greater flexibility, and improves the turnaround time for our customers.

27:33 And that center picture that you can see there is the installation of a crane system, and that enables us to handle increased demand for testing larger antennas in our RF test chamber. Additional to that crane, and you can just see the guy operating on there, has been an investment in a series of spectrum analyzers as well to give us enhanced capability for testing and development at that Lancaster facility. And then on the right hand side, what you're looking at there is our class seven clean room down in Weymouth. And again, continued investment there with the installation of new semi automated dye bonders into that area. And those give us several advantages, increased throughput, for example, increased repeatability, higher quality.

28:24 That's not all of the investment. Further planned at our power business in Krugern with a new wire bonder there for battery pack assembly. And at AEC in The United States, we've currently purchased and installed new diffusion pump for the glass to metal seal production. And so I think what you can see is together these investments mean that we can deliver more integrated customer solutions, and that differentiates us from our competitors, whilst at the same time, it's driving productivity, and margin improvements. Back to you, Peter. Thank you, John. As we scale the business, it'll enable us to deliver stronger returns as the revenues increase.

29:12 And this year, we're celebrating our twenty fifth anniversary on AIM, and we're really proud of the track record we have, having paid a dividend every year since we joined the market. The robust performance of the group has given the board confidence to increase the dividend this year by 28%. So in summary, the the group is well placed to take advantage of current challenges and emerge in a stronger position than many of our competitors. Our technology is aligned to evolving applications in our target growth markets with the recent acquisitions further enhancing our capabilities in these sectors. We've demonstrated that a diverse business model with over 2,000 account customers now across the group and a wide supplier base gives us resilience, And a strong order intake has resulted in a record open order book in q one with our balance sheet strength enabling us to execute on strategic m and a and the investment program that we've spoken about.

30:20 Our focus remains on supplying trusted technology for demanding applications with the business in a strong position to take advantage of market opportunities as they arise. Super. Thank you. Thank you, Gary. Thank you, Pete. Thank you, John. Now if we could turn to the questions, we had a number of questions that were submitted ahead of the presentation. However, please do continue to submit your questions using the q and a tab situated on the top right corner of your screen. I'd like to remind you that the that a recording of this presentation along with a copy of the slides and the published q and a can be accessed by your investor dashboard on the investment company platform. Additionally, your feedback is important to the company.

31:06 So immediately after the presentation has ended, you will be redirected for the opportunity to provide feedback. While you're submitting questions, let us first have a look at those submitted ahead of the event. And in fact, certainly, in the first case, I think we have covered the the content of the question within the presentation, albeit that we may expand about a little as we go through the q and a itself. But the question was, can you give examples of new opportunities gained as a result of the acquisitions of companies earlier in the year? So we won't address that specifically, but we may touch on it as, again, as I say. Equally, we did touch slightly on the supply chain issues, but this might enable you just to add a little more color to it. Do you anticipate long term supply chain pressure? Whether you can just have a little bit more to that. Yeah. Perhaps I should respond to that. So it's very hard. We were asked earlier when will this end. Well, that's how long is a piece of string. But in reality, we can see from most of our suppliers in the semiconductor industry that they are anticipating that things will start to free up towards the end of this calendar year.

32:11 So that the first quarter of the next calendar are are f y q four, we should see things starting to ease. And then most of the issues resolving by roundabout the middle of twenty twenty two. That's sort of a best estimate. It's very difficult to to go beyond that, but certainly that's what we're seeing from the wafer fabs that are being brought on, the capacity that's being brought on, and the messages that are coming back from the semiconductor suppliers. So not all negative at all. We're well positioned, and it's not going on forever. I see the point that, John made, you know, we've both been in the market, a long time in the semiconductor market. And I remember that the dot com bubble in ninety nine, two thousand when they were building out the Internet that long ago. So we've been through this before equally as John touched on the presentation, managing the other side of this when supply returns and not not holding excess inventory. So we've got a lot of knowledge within the group.

33:16 So that that's helpful. It also helps helps the new acquisitions we've made. So the active silicon have have taken advantage of that to help sourcing in in John's business on FPGAs and and other products because they're they're very much buying semiconductors and that that balance of having our component division and our manufacturing division, I think, has really come to the fore in this in this situation. Great. Sweet. Alright. That's that's understood. One question here on the the pandemic. The challenges of the pandemic have been widely reported. Have there been any positives? Yeah. I'll I'll take that one. I one of the positives I think I get out of it is whilst well, obviously, very eager to return to face to face meetings. I think we'll work more efficiently in in the future.

34:11 Previously, there's a lot of traveling for face to face meetings carrying covering long long distances. But I think the use of Teams now and Zoom will mean you'll you'll now get a a mix of those, and I think that that will improve productivity. I think it validates a decentralized business model. We've got production facilities across The UK now and The States. Prior to COVID, I think if you could said you had one large facility, very efficient, that would have been welcomed. But I think it certainly helped with COVID security and kept production running, having our, as we term it, centers of excellence, you know, our battery business in Krukurn, our tenant business in Lempstra, computing business in Redditch to to keep production rolling. And I think that that validates our strategy.

35:03 And and lastly, I think some positives are still to come. You know, we we do very well out of trade shows. They've obviously had to had to be suspended. So we'll that back. That's a great area for us to develop business. So we look forward to those returning. Great. So okay. Two questions I'm gonna tie together. They both relate to acquisitions and m and a activity. What does the m and a pipeline look like moving forward, And what kind of IRR are you looking for on acquisitions? Maybe we can tie those together in an answer. Maybe I'll turn the first bit and pass to my learning colleague, Peter, for the the second. Good pipeline. We've there's been some that would as we sort of suspended some activity last year, I think there were businesses that weren't coming to market for for sale that are now. So I know there's been sort of very good IPO activity on on the market.

36:01 Similarly, we're seeing that in in m and a. But we've got a good pipeline in power, in communications, in components. They're very much follow the same theme that we've spoken about in the presentation, broadening our product offering and capabilities in our target markets and continuing that international expansion. I think, to be perfectly honest, some of that will be slower with the international aspect of it. We need to be able to go and visit some of these businesses, and that's restricted at the moment. So there's a certain amount of desk work we can do, but we'll we'll be able focus that as as hopefully things things free up. In terms of, yeah, return on investment, I I think when we look at acquisitions, we're seeing that, you know, there is competition in terms of pricing.

36:53 If you look at the two we've just done, there's sort of seven to nine times earnings is the the multiples we've been paying there. Yeah. I I think yeah. In the past, we've had some particularly cheaper acquisitions where they've been distressed businesses and they've needed turning around. Certainly, more recent acquisitions are are more mature businesses with with very good brands and reputations in their in their sectors. And and as a result, that's been reflected in the in the multiples we've been paying. I I think we're still getting very good deals on both of those. The the other thing we've done with our recent ones is we've added a an earn out element to the consideration, and that incentivizes the management team, which are staying with the business.

37:40 And one of the big pluses for for those acquisitions has been the the quality of the management teams we've we've added in terms of both technical expertise, but also some of the support functions as well. Yeah. In my team within finance, it's really added a lot to the group. So, yeah, I think it's it's it's maturing our acquisition approach over the last sort of two or three years. Great. Okay. Thank you, Peter. Just had a question in from Peter A in respect to chip shortages. I think we've covered that, Peter, so so we won't repeat that again. A question on the five year target. Post achieving the 2022 target of 60 p EPS, what sort of annual growth rates do you envisage being able to reasonably achieve given the anticipated demand in your target markets?

38:29 We're we're actually in the process of of reviewing our strategy on that as as we approach 2022. Great benefit from our new non executive directors that have joined the board recently. They they bring a lot of new insights into to help on that, and we'll we will be, as as we've done in this report, publishing our our targets in in due course. Once that that process is complete, we'll be we'll be laying that out to to our shareholders. Right. Okay. Now conscious that that companies and management should never comment on their own share prices and on on valuation, so we'll be we'll be gentle with this one. But there are two which we might just tie together.

39:15 The first question is, can you comment on the market cap of the company, please? It seems low to me considering the record you have your plans to move to focus on advancements in future technology. Maybe you have a target for market cap in future years. The second of the question is, were you surprised that the SP reaction to yesterday's update? Conscious, obviously, that this shouldn't be a particularly detailed answer. For the first part, I completely agree on the on the kick out. But, personally, my my own personal guide in the in the coming years, I'd I'd love to see us at 250,000,000 market cap. I think we've got the right strategy in place. We can you know, we've set out how we can grow the business. We've we've demonstrated growth. We've we've grown EPS in 2017 from 30 p to a target that we're we're striving to achieve of 60p by next year. So and we're we're firmly focused on executing on that strategy.

40:18 Great. Okay. Well, I think that is a fitting summary to to end the presentation on. Thank you all for updating investors today. Can I ask investors not to close this session? As you will now be automatically redirected for the opportunity to provide feedback. If anyone has any further questions or would like additional information on SOLID STATE, please do get in contact with our solid state at walbrook p r dot com. Alternatively, many thanks for attending today's presentation, and we look forward to updating you again in due course. Thank you very much. Thank you. Thank you.