Titon Holdings (LSE:TON) — Final Results

0:01 Good morning, and welcome to the TITON HOLDINGS PLC final results investor presentation. Throughout this recorded 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 top right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review questions submitted today and publish responses where it's appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand you over to Tom Carpenter, CEO. Good morning, sir. Thank you, Charlie. And hello hello, everyone, and thanks for joining, this investor presentation. We're gonna take you through, our results over the last financial year.

0:47 And I think more importantly, we're gonna show you the progress we've been making executing our turnaround strategy, and then we'll answer any, questions at the end of the presentation. So moving to to the next slide. So on this presentation, you have Carolyn, our our CFO, and myself, Tom Carpenter, the CEO. I would I will take you through our strategic and operational performance, then Caroline will take you through our finances over the year. And then at the end with the questions, we'll answer any questions between us. But, before we start, I'd just like to say that this is a turnaround that we're driving through execution. The market's obviously very important, but we can't rely on the markets to recover TITON. And I would also like to say 2025 marks our first full year of delivery against our strategy.

1:33 So moving straight to slide four, Carolyn. So for those of you who don't know TITON, I thought I'd give a quick overview. So we're a UK based manufacturer, and we serve the residential construction industry through two complementary business units, mechanical ventilation systems and window and door hardware. We were established over 50 ago with weathered multiple building and housing cycles. Both of our business units have products underpinned by regulations covering indoor air quality, safety, and energy efficiency. We recognize that our margins need to improve. However, we currently manufacture and own design about three quarters of our revenues, and this gives us ample scope to improve our margins through value engineering and productivity improvements. As as you will see, we're executing a turnaround strategy. We're making solid progress, but we're not where we need to be yet.

2:25 Finally, we have a strong balance position. We own our own manufacturing facility in Haybourhood, Suffolk. We have no real debt, and we have a cash position that allows us to invest in in improving the business and weather any market volatility. So what differentiates TITON? Well, like I said, we have two complementary business units that sell into adjacent markets, but both servicing residential new builds, RMI, and social housing markets. We have a broad portfolio of award winning products, which I will go over in the next slide. And we have in house system design and expertise in the relevant building regulations, and this allows us to win at the specification level early in project cycles. We have a lot of spare manufacturing capacity, so this will allow us to significantly grow before we need to make any major capital investments.

3:12 From a value creation point of view, we're actively making margin improvements. We're focused on growth through winning market share, not relying on the market. We're not where we want to be within the door hardware, but I think we're doing the right things to return this business unit to growth. I do think the group will see real upsides once we get both business units growing simultaneously. Against this backdrop, we have a set of clear and measurable medium term ambitions. We want our combined sales to be growing by at least 10% year on year and achieving a net profit before tax of 15%. Moving to slide five. So you can see the picture in the middle, and, I think this illustrates the range of products and solutions that we sell split between the two business units. Historically, we have not adequately adequately been promoting or taking advantage of our breadth of offerings.

4:02 So if you look at both the business units, we estimate the content of our home ranges between several several hundreds to several thousand pounds per dwelling. Importantly, both our business units have in house design, regulatory expertise, and our own manufacturing. Moving to the next slide. If you look at the highlights for 2025, I think we've made good progress on the strategic plan I outlined last year, and, hopefully, you'll see that in the numbers Karen presents. We've further strengthened our leadership team. We've got two new sales leaders for both business units, and we onboarded a new operations director last year. On the whole, we've tried to simplify organization improve the accountability of our of our employees.

4:48 I think we've made good inroads with our customer service, especially from the operational side with improved responsiveness and lead times. Our mechanical ventilation systems business delivered a little bit over 20% of sales growth over the year, but actually our UK, sales of that of that business unit grew by 27%, and this was a record year for ventilation systems UK sales. We made good progress on profit gross profit improvement. We increased gross profit by nearly £1,000,000 and almost five percentage points on what was frankly similar levels of overall sales last year. Finally, we reduced our losses. We essentially broke even from an operating profit point of view and compared to a £900,000 loss last year. And more importantly, I think we generated £1,200,000 worth of cash. So I'd just like to hand over to Carolyn to go over our financial performance.

5:42 Thank you, Tom. So I'll start by just going through the income statement. So I'll just summarize the group's performance for f y twenty five. Total sales for the year were 15,800,000 when you compare that with 15,500,000 in f y twenty four. Whilst the overall growth was quite modest, sales in mechanical ventilation systems increased to 8,600,000 from 7,200,000, which was a twenty one percent increase overall. But actually, if you look at our UK side, that was a 27% increase. This was, however, partially offset by a reduction in the wind and door hardware sales, which were 7,200,000,000 compared to 8,300,000 in the prior year, which is a 13% decrease. Gross margin, though, improved 32.9% compared to 28% in f y twenty four.

6:32 This is a a brilliant improvement. We achieved this across both business units reflecting some of the pricing actions that we have taken, improved cost control, improved productivity, and changes in our sales mix. Overall, this contributed to an improvement in underlying operating loss before exceptional items, and this reduced to £40,000 when you compare that to a loss of 900,000 in previous year. Underlying EBITDA improved to 800,000, again, compared to breakeven in f y twenty four, so markedly improved position. In summary, f y twenty five showed a real improvement overall over the previous financial year, driven by significant progress in executing our strategic programs. So this slide just shows you the breakdown of our revenue and the mix of our business overall. As you can see, we've had actually flipped this year. So while in previous years, window door hardware made up the majority of our revenue overall, mechanical ventilation systems actually contributed 54% this year compared to 46% last year. Window or hardware revenue made up the remaining 46% compared to 54 in the prior year, so a complete flip.

7:47 84% of our revenue came from UK sales, which compared to 81% in the prior year, And 75% of products were manufactured on our own facility, which was in line with, last year. 25% of our products that we sell are bought in from third parties. So this slide shows, our improved trajectory across, h one versus h two. Total net revenue for f y twenty five, as I said, was 15,800,000. It increased from 7,650,000 in the first half to 8.15 in the second half, representing a 6.5 increase between the periods. There were, again, contrasting trends across the two business units. Revenue from the mechanical ventilation side actually increased from 3.97 to 4,630,000, which was a 16.6% increase, and again, offset the decline in the window and door hardware side where revenue had reduced from 3,680,000 to 3,520,000, a decrease of 4.3%.

8:55 Overall, though, obviously, that mechanical ventilation systems growth more than offset, so we did see a modest increase. Gross profit increased materially in the second half. So gross profit rose from 2,300,000 in h one to 2,900,000 in h two, which was an increase of 26.1%. Importantly, that meant that the actual overall gross margin improved from 30.1% in h one to 35.6%, which was an increase of 5.5 percentage points. Again, this improvement reflects a focused approach to the product mix and operational efficiency and the cost actions implemented during the year. Profitability also improved in the second half. Underlying profit for exceptionals and tax moved from a 160,000 loss in h one to a 120, thousand profit in h two. Underlying EBITDA increased from 260,000 in h one to 560,000 in h two.

9:56 As a result, both underlying EBITDA and net profit were positive in the second half, contributing to a full year underlying operating loss of 40,000 and underlying EBITDA of 810,000. In summary, FY twenty five showed improved performance in the second half with higher revenue, improved margins, and positive underlying profitability. So just moving on to the balance sheet. We continue to have a strong balance sheet. We have we still have no non lease borrowings, and our cash position is strong. We ended at 3,500,000 compared to 2,300,000 in f y twenty four. The increase was underpinned by positive operating cash flows, reflecting our improvement in underlying trading performance, and we expect operating cash generation to remain positive, as the business operations continue to strengthen. We did, of course, also have the 700,000, coming from our sale of the Korean operations, but we can we expect this to continue into the next financial year.

11:00 The balance sheet continues to benefit from significant asset backing. Our property assets are still held at a book value of 1,600,000 with an estimated fair value of 5,800,000 as of end of September twenty five. We had a revaluation, carried out. Based on those external assessments, this value could actually increase to 6,700,000 if each of those buildings are sold separately, providing additional balance sheet strength. We've also continued to make, good improvements in working capital management. We have again managed to reduce our inventory levels by 500,000 during the year with our continued focus on that stock control operational efficiency. And as we look ahead to f y twenty six, all of our capital allocation decisions will remain disciplined with a focus on capital expenditure initiatives aimed at supporting organic growth drivers, but also evaluating targeted bolt on acquisition opportunities where these align strategically and meet our return criteria.

12:00 So again, in summary, ended with a strong cash position, no bank debt, and continued strong working capital discipline with a strong working, solid asset base. Okay. Thank you, Caroline. So clearly clearly, we're in the midst of a turnaround. We're not where we wanna be yet. Those of who attended last year, hopefully, you can remember I set up a turnaround strategy. So this previous financial year has been about executing that strategy. I've got a lot of lot of work. You know? The the following slides are set up for people who who aren't gonna listen to this presentation, so they're quite wordy. I'm not gonna read the slide the words out. I'm just gonna talk around the slides. So let's start with that. So I'm not gonna read out the whole strategy, which which which kind of detail on the left hand side.

12:49 However, briefly, we do know where we wanna be, and what our ambitions are. We know where we're gonna operate. We know how to achieve these ambitions, and we've set out a number of programs, inside the company to drive that required change. I'm gonna take you through, our progress improving our core drivers over the next few slides. But before I do, I just wanna point out that all these drivers interact with each other. They're not they don't operate individually. So for example, you know, products and efficient operations drive margin improvement and our competitiveness, how we sell and customer service that gross sales, and and the share of the wallet from our customers, and effective marketing, promotes the company to the right decision makers and generates more leads. It's all like a virtuous circle supporting each other. So moving to, slide 14 about our superior products. So we wanna win by having superior products.

13:42 But I think rather than just focusing on performance, which has been the strength of of TITON in the past, we need to also focus on the costs of our products and and and their ability to scale and grow. So we can spend a lot of time and effort over the last twelve months, not just on product performance, but also designing the margin improvements and standardization to allow us to scale and get economies of scale, of our products. Over the last twelve months, we've spent we've we focused on reducing our product complex complexity and improving manufacturability together with improving our product development processes, not just focusing on d, but focusing on how we develop products cost functionally with much more input from operations sales, during the product development process.

14:29 We've released a new dual handed rationalization rationalized pro platform for our MBHR products. And overall, we've reduced about a thousand SKUs from our from our catalog. We've developed an actionable road map of design and cost reductions that we'll implement over the next twelve months. We're making progress, but none of this work is complete, and these pro then this pro these programs will continue through 2026 and beyond. Moving to slide 15 and our customer service. So when I joined the business back in 2024, we identified that our customer service was quite weak. So we've implemented a cost functional customer improvement program and ensured the whole company is focused on servicing the customers.

15:17 Over the year, we've made good good improvements in our service and responsiveness. It's early days, but our customers are reporting the RC improvements. We've implemented a machine learning order entry system, and this is to allow our customer service team more time to focus on managing customers rather than purely order or entering orders manually. At the end of the year, we benchmarked ourselves with a program called investors and customers, and we achieved the silver award. We got our first, net promoter score, and this benchmark is now in place, and we're gonna drive further improvements throughout 2026. Moving to slide 16 and our manufacturing, and organization. So we've been very focused on driving productivity and margins, and this focus continues.

16:05 Again, if you remember, back to last year, I highlighted we had a lot of silos in the organization, so we've actively focused on improving cost functional working between operations, customer service, and product development. I'm pretty happy with the improvements we made in our productivity and cost reductions, which I think you've seen in our gross margins that Karen has presented. We've increased our manufacturing output whilst reducing our headcount, and I'm confident that we're gonna see significant increase in volumes with very small increases in headcount and capital expenditure. As with our other initiatives, it's really more of the same during 2026 as we continue to drive manufacturing cost reductions and overall company productivity. Moving to slide 17. We we've tried to modernize, how we sell our products, with both business units, with the view of re really trying to win at both business units, further up specifications chain where we can compete with specification rather than competing on price. So we've been transitioning to a consultative selling model.

17:11 The goal is for both businesses to add value to the customer by via our expertise and to win a greatest share of their wallet by selling multiple products and selling solutions to them. Over 2025, we've strengthened both our commercial teams, both from headcount and from leadership. Previously, we spent a lot of time and resources developing bespoke products for the European market. The reality is the resulting margins were not adequate, so we re we evaluated this this approach. We're not exiting Europe, but we're not spending the same amount of time and resources on trying to win business there, and we will only sell to new customers opportunistically if their products are based on our UK platforms. Our focus on consultative business development appears to be working, especially with our UK event systems team, with with us winning more projects at the specification side rather than trying to out outplace competitors between the tender.

18:08 Our order book grew, and this allowed us to smooth out some of the project phasing issues we saw during the last quarter of the year, as, new build starts with bottleneck with new regulatory safety approvals. Next year, again, kind of repeating pattern here, it's more of the same incremental improvement. I'm hopeful that we can we'll get some modest expansion into an adjacent market to decouple us a little bit from the residential new new build market. Moving on to slide 18. So on to our marketing. So we are quite a traditional catalog selling marketing business, eighteen months ago, and we really wanted to, improve on online messaging and the content really to again, about winning leads. So, we've over the last twelve months, we've released a new website, and we have separate landing pages for the two business units. I would encourage you to please go and have a look at our website.

19:06 And what we're trying to do is is position ourselves as experts in our fields and as solution providers. We've released a lot of content on technical and regulatory issues, and and our goal is to engage decision makers at the earliest stage possible. We've seen this contribute well towards the early stage engagement, and we are seeing a lot of quality leads and business quoted and wanted this approach. We have several marketing projects ongoing. This year, we plan to implement a web shop really initially to sell our accessories and our consumer orientated products. This is really to make the life easier for some of these customers, but also to give us more time in our customer service team to focus on servicing and managing customers.

19:53 And, you know, as AI gets more and more important, we need to work on our website to facilitate AI enabled search and research. And, again, this is with the view of getting ourselves in front of architects and decision and decision makers at the earliest possible stage. Moving to slide 19, please, Caroline. So we're now quite a metric driven company, so I thought it'd be good to share a turnaround scorecard, with you. We use quite a lot more metrics in this, in the business, but at top level, we think these are a good way to track our progress. I'm not saying that any of these numbers are world class, but with the exception of one metric, and that's window door rev window door hardware revenue, I think it demonstrates good momentum over the last year, and we report this or very similar store scorecard next year.

20:45 In summary, there's no real magic shortcuts to our turnaround. You know? And our turnaround is mostly common sense, and and really, it's just persistent incremental improvement everywhere all the time. As I've said earlier, I'm relatively happy with our progress. You know, we could have done better, but I I I think I would have taken what we did when I joined the company. But, you know, we're not content with our performance, and we see a lot of scope for further improvement over the months and years to come. Moving to slide 21. So over to our trading and outlook. The the new build market is not helping us at the moment. It it was subdued, I think, pretty much throughout most of 2025 and especially the last quarter quarter or so.

21:35 The key issue for us has been what's called gateway to building safety approvals, and this is severely bottlenecked construction starts. I think if you do some searching the Internet, you can see that with the construction starts in The UK have really, over the last few months have really really reduced. However, our goal, has been to make make strategic and financial progress regardless of what the market does. So trading at the end of December is a line of with our expectations. Markets you know, challenging markets aside, actually, vent systems continues to grow. However, the delayed construction starts have impacted our mix and gross margins. So what's happening is that we're selling, at the moment, less of our own manufactured products that go into the fabric of the buildings, which ironically have been specified because of the new fire safety regulations.

22:27 But we're selling a lot more first fit products, which largely consist of lower margin bought in products. We do believe that the gateway to approvals bottlenecks are easing, and we expect them to normalize over the next coming weeks and months. And once they normalize, our full expectation is that mix and margin, from mechanical ventilation systems will normalize. Window door hardware sales do appear to be flattening out, and I'm hopeful that we can see this return to growth in second half of the year. Our order book is is strong. It's about 60% higher than it was this time last year. We have we retain a healthy cash balance, and this gives us flexibility in our turnaround.

23:12 Excuse me. And as our cash position strengthens, we'll we're making selective investments in the business. If we come across a suitable opportunity, you know, we're we're very conscious of the size of the business and the size of acquisitions we can make. But if a suitable one suitable one comes across, we'll potentially make a small bolt on acquisition if we can. I think as as our businesses grows over the medium term, I think, hopefully, a bit of m m and a will be part of our story. Finally, the board does remain con confident in the outlook of the group. We believe that the incentives we're we're taking are the right ones, and we think that they continue to make traction for us over the medium term. Ultimately, we believe that our medium term ambitions to deliver a blended revenue growth of 10% and achieve an underlying net profit before tax of 50% is achievable, and our goal is to do this in financial financial year 2028.

24:08 Moving to slide '22. Finally, I'd like to summarize the case for TITON. So we're an established industry player with over fifty years of trading history. While our core market is cyclical, sensible regulations drive the demand for our core products. We have growth opportunities for both business units. I think we've demonstrated the potential for for mechanical ventilation. It's now up to us to demonstrate this with Window Door Hardware. We have a healthy balance sheet, and we're generating cash. We have our properties valued, really at £6,700,000. We have 3 and £1,000,000 of cash. We have another £3,900,000 of of net assets. So I'm with the view that our enterprise value to sales ratio is out of proportion to the, health of the company.

24:56 Finally, we're executing a shared strategy that is definitely not easy to turn around our business, and we're still very sensitive to small movements in revenue and mix. But, hopefully, you can see that our trajectory towards achieving our medium term goals is in place. So that that completes our investor presentation, and I'd like to now hand over to Charlie. Perfect, Tom. Caroline, thank you for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top hand corner of your screen. Just 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 your investor dashboard. Carolyn, could I please ask you to read out the questions and give responses where appropriate?

25:43 I'll pick up from you at the end. Great. Thanks, Charlie. So first question, what are your growth ambitions? Where could TITON be in five to ten years' time? Well, we've laid out our growth ambitions to grow by at least 10% a year. You know, I'd like to, in a few years' time, hopefully, be growing inorganically as well. You know, with sensible sensible acquisitions. So I you know, five years' time, there's no reason why we can't be in excess of £25,000,000 of revenue, perhaps a little bit more, some acquisitions. And in ten years' time, there definitely was some acquisitions. You know, I don't see why we can't be a £40,000,000 business or more. Great. Thank you. And how are you maximizing the use of AI within the business? I don't know if we're maximizing the use of AI. I think we're sensibly using AI.

26:29 So, obviously, beyond chat GPT, we've got machine learning with automatic order entry, which is actually pretty smart. And, again, the idea for that is to release our customer service time to actively manage our customers rather than just tapping in orders. We use a similar system for our per for purchase orders that we receive, and we're investigating the use of, of chatbots to help, help help the actual house owner to answer technical questions and help them to to use our products. That's early days yet, but hopefully, we can do some with that over the next twelve months. Okay. Do you have a trade counter? And if not, why not? We don't have a trade counter. I I don't think we're set up for that.

27:18 We we we sell via distribution for that. I don't think this is something we would look at over the next twelve months. Are we any closer to getting back on the dividend list? Well, I know it sounds glib, so apologies if this does. I mean, we're twelve months closer. I I I don't think you know, you saw we broke even. We've got modest you know, with the market, we've got modest ambitions for this year. I mean, we can have achieved those ambitions, I think. But I I'm of the view that I we should only be paying dividends once we have sustainable high level profit levels of profitability. Okay. TITON has some great brands, but they don't seem to be that widely known in the industry. How are you marketing and promoting these brands, and what is your marketing spend per annum, and what can you do to lift the recognition of these brands? Okay. Yeah. It's a great question.

28:11 And I agree. I think we do have a great brand, but we aren't one in our industry, so I completely agree. I think we we're really trying to focus on on the online content. The reality is is that most branding is most research is done online. I think it's much less about catalogs now, much less about trade shows, and we still do the 10 trade shows. So I think we covered what we're trying to do with with what we're trying to do to raise our brands. And I think also part of our issue is that people know us only very small product categories, and, actually, we sell a whole wide range of solutions, and that our goal is to be selling these solutions to to to our customers. So I think I covered that in in my marketing slides.

28:57 Our spend, excluding trade shows, is about £200,000 a year. So we are spending significantly on marketing. Great. Thank you. Next question. At this valuation, do you think a takeover approach is likely? It's I think we're I think we're very undervalued, so potentially. Okay. What gives you confidence the growth in ventilation sales can continue, and what are the drivers, strike trends that you are seeing? I think our sales team is very strong. I don't I think I I I think, actually, the build the construction business will probably recover in the second half of the year.

29:44 I think our products are really good. I I think all the actions we're doing will show will continue to show growth. I don't think you know, I mean, hopefully, I'm wrong, but I don't think I I don't think we'll have too many 27% revenue increases per year. But if you add but the regulations that for new builds and what we're trying to do with air quality and heat efficiency, and safety, fire safety, all drive, demand, for our products. And and house builders have to buy our products to order to hit those regulations. And with minimum wage rising sharply from next April and many more jobs around the country becoming minimum wage, how will this affect TITON?

30:42 Yes. It it increases our our costs. We do have you know, ideally, we'd to be paying everybody more than minimum wage. We we do have some minimum wage, folks on the on the shop floor. I I I let Karen answer about how it impacts us financially, but I think one of the from a from a employee point of view, what it does, it it it basically it causes a problem because it basically narrows the band. So so so so so you know, the entry level level wages are getting closer and closer to, actually quite skilled and, quite experienced, employees, which I think is a a bigger problem.

31:27 But maybe, Caroline, you wanna touch on the Yeah. So, I mean, financially, think I reported on this last year. The hit was about £40,000 a year for us, And this year, it will be of a similar amount. So financially, it's it's it does have quite a big impact. What we're trying to do though is mitigate that with efficiencies in the factory. So we have reduced our headcount quite significantly through natural attrition, and that will continue as we become more efficient. Mhmm. And the next question actually is very similar. So approximately what and I'll take this one, Tom. What effect has the major NI changes had on the bottom line? Again, that's between 40,000 a year, $4,050,000 pound a year that we've seen, as a direct hit. And, again, just going back to what I've just said, we're trying to mitigate that with, labor efficiencies.

32:19 Okay. Is there a spares requirement for the ventilation products? And if so, do you have a rapid re response system? Again, if there is, is the precise model number easily visible to the person who may be asking for spares? So, yes, there's a spares requirement for the ventilation products. We do have a spares program. From a household point of view, there's a requirement to change the filter. What I I can't remember actually, but once every twelve months or once every twenty four months. There is there there is a precise model number visible. I think there's probably more we could do with this with some two d with some three d sorry, two d barcodes, which we'd like to look at. And, also, we want to this is also part and parcel of why we want to have the web shop to make it easier for the homeowner to buy, to buy these filters.

33:09 We yes. It is a visible part of our revenue every single every single month, and we typically, at the moment, sell through distributors these filters and spare parts. I think that will become easier when we have our webshop back online. We'll be selling spares through that, which will be easier to tie through to our products. Any update on news from our presence in The US, and any update on progress in Europe? Yeah. Actually, European we are our US sales are pretty poor in 2025, and we've put a lot of focus on either recovering The US or, frankly, exiting The US. I'm very happy to say that actually US sales are very much up in the first quarter, So, we don't have any plans now to go next to that business.

34:03 Obviously, we can can you continue to monitor that, but it's, you know, it's a very small part of our business, but it's now profitable a little bit and and growing quite substantially. So it's looking quite positive for you at the moment. On Europe, on our ventilation systems business, essentially flat, really. It's we have we have some important customers we want to service. This isn't really a business we want to be developing bespoke low margin products for, so we sort of stopped that that activity. We're gonna do a hardware. Grew last year for for for for our when for European customers. I think at the moment, it's about flat, but we are expecting a little bit of growth, this year. Okay. And I'll take the next one, TON.

34:51 Yep. Although sales are mostly UK based, has there been any impact from variations in foreign currency exchange rates? We're very fortunate in that we have some natural hedging, so we both buy and sell in US dollars and euros. So the impact generally on the business has minimal. I think we had a £9,000 exchange loss overall for the whole financial year, so this doesn't doesn't appear as a risk to us. Tom, how big is our largest customer percentage terms? Probably our largest. We have we have one we have one dish we have one housing builder who's one of largest customer, but actually, we're we're quite we don't have a lot of concentration. Their business is probably less than 10% of our of our overall of our overall revenues.

35:41 Who do you see as TITON's biggest competitors? In the mechanical ventilation side, it's the folks like Volusion or Ventaxia and NewAir, that side. So we're prob you know, they're probably the tier one. We're probably at the hills on a tier two. Our WindowDoor hardware, it's people like Total Hardware. It's it's some of the more value add distributors, I I would say. Okay. Do you class any of our revenue as recurring revenue? We don't class it as recurring. You know, maybe you could say some of our filters are recurring revenue, but, you know, we don't class it as recurring. K.

36:27 Why are sales and head office on different sites? History is why. Okay. And is there an opportunity to consolidate those two sites? We're always looking at things like that. Nothing's off the table. Do you consider yourself as a potential future 40,000,000 business without conducting m and a? Given us given us enough runway, I think so. And what differentiates our mechanical ventilation products from those of our competitors? If you it's kinda like everything so if you look at mechanical ventilation product, especially on the I'm gonna talk mostly on the heat recovery products, which is our core product range.

37:20 It's all about physics. So so if you if you improve thermal efficiency, you make you you make, specific fan power worse or or you make the noise worse, your efficiency work, or your or your power consumption work. So it's basically trying to get a a nice Venn diagram, or or the sweet spot of the products. And I think for the vast for the majority of our mechanical ventilation heat recovery products, we're pretty much on the heat spot of cost, size, thermal efficiency, and specific fan power. So our our goals really now are to are to, you know, gain gain economies of scale and get some design for manufacturing, engineering activities so so we can actually scale these products and get a bit better margin from them.

38:10 Okay. Will you look to include software sales in the future or make greater use of customer product data and its usage? We we talk about that. I I I don't think that's something we're gonna do in the short term. It would be would be great. So we do you know, we have spoken internally. Wouldn't it be great if we had an app? We do have a very, very basic app, but it is very basic. I I I think of all the things we need to do right now, I don't think this is a priority. Down the line, it'd be fantastic to have a really good app and get some data from our customers and and have a having something that helps them helps them use the product. But I I I think we got other things to to attack first. Okay. And that was the last question.

38:57 Guys, thank you for answering those questions you can from investors. And, of course, the company can review all questions submitted today and publish those responses on the InvestoMeet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Tom, could I please just ask you for a few closing comments? Well, thank you very much for attending. We appreciate you sharing the journey with us with TITON, and I look forward to talking to all of you this time next year. Thank you very much. Tom, Karen, thank you for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations.

39:44 This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of TITON HOLDINGS PLC, we would like to thank you for attending today's presentation, and good morning to you all.