Trifast (LSE:TRI) — 2023 - Half Year Results

0:01 Good morning, ladies and gentlemen, and welcome to the TRIFAST PLC Half Year Results Investor Presentation. Encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just 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 will review all of the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to CEO, Mark Belton. Good morning, sir.

0:42 Thanks, Jake, and, good morning, everyone, and welcome to TRIFAST half year presentation. Before I begin, I would, like to, introduce two of my colleagues who will be joining us on the presentation today. The first is Andy Cooksey. Andy joined us in September this year as an interim CFO. Andy hit the ground running and along with the finance team has enabled us to present the information today. And the second person is Dan Jack. Dan has been in the vast industry for well over twenty five years and has a wealth of international experience. Dan joined us in June 2020, sales and commercial director, and pleased and delighted to say that Dan has been promoted this month to chief operating officer.

1:31 So without further ado, if I can, move on to the next slide, which I'll give you an an overview of the of the company. Okay.

1:47 So just a very quick overview, if I may. We were formed in 1973 and listed in '94 on the London Stock Exchange. We are an international specialist in the design, engineering, manufacture, and distribution of high quality industrial fastenings and category c components, principally to the, to large global assembly industries. We have a fairly well balanced sector spread, which you can see here.

2:18 And then if you move on to the next slide, it give you an, an indication of what the market looks like. It is a highly fragmented market valued at around £60,000,000,000, and it's not dictated by any one player. Our core strategy is working with our global OEMs and tier ones to get our parts designed in at the early stages. And then where we can, we try and manufacture those parts ourselves. And then from that, we get our parts designed in, we try and manufacture those parts, and then working with global customers, we're able to go across the globe to each of their sites in the four regions that we have. If I can go on to the next slide, we have 34 locations worldwide split into four regions, and that is The UK, Europe, Asia, and The US.

3:10 75% of our revenue comes from customer specific branded or licensed parts, and I think that's a key thing to point out. We have seven manufacturing plants, and currently, these represent around 30% of our revenue. And finally, we have well over 5,000 customers with no one customer being more than seven and a half percent of the group's revenue. Moving on to the next slide. I'll give you the highlights of the of the first half of the the performance of TRIFAST. As you can see, revenues have increased by 13 and a half percent to a 117,800,000, and this reflects the market share gains that we've seen. This has also been reflected in the 12,000,000 wins achieved in the period, which Dan can cover about later.

4:01 Gross margins unfortunately have decreased in the period to 24 and a half percent, and that's largely due to the lag between passing the high cost increases onto customers, which we will expand on later, and it will provide confidence looking forward of what we are seeing. An operational improvement program has already begun to drive recovery in the second half of this year and beyond, and this will include margins and delivering the necessary price increases and cost efficiencies, inventory and the reduction initiatives, and project Atlas and that accelerated rollout. In addition, I will expand on a new exec committee that has been formed to increase agility and pace within the business. And what I would like to say is currently, with the initiatives that we've already started, trading and margins are in line with our forecast expectations.

4:55 If I can now hand over to Andy to run through the financial highlights, please. Thank you, Mark, and good morning, everyone. So this slide shows the key financials. I'm not proposing to actually go through these in any great detail because I'll be covering them in the next few slides. However, the numbers and our performance in the first half of the year have have been driven by two of the highlights mentioned by Mark in his last slide. The firstly being the overall growth in many of our sectors driving top line sales growth, And secondly, the substantial inflationary cost increases we have faced in October lag in recovering some of these increases,

5:36 which has resulted in reduced margins, profits, earnings per share, and and return on capital invested. It is important to note, however, that this lag in recovering costs is improving with time. Q two was better than q one. We're already seeing that q three is better than q two and q four will even be better. This will help drive improvements in all these profit numbers in in the second half of the year. Which probably brings me on to the one point which I would like to talk about is the last point about the interim dividend and the board taking into account the ongoing activities and actions and confidence they have in both the short term and the overall fundamentals of the business have declared a 7% increase in our interim dividend to naught point seven five p.

6:25 The next slide next slide shows the the bridge in our in our revenues. Our revenues increasing from 103,000,000 to 120,000,000, showing a 13 and a half percent increase at constant exchange rates, and actually almost 16% when looking at actual exchange rates. The first item on there shows how successful we've been in generating 6,100,000 in digital revenue by passing through the substantial cost increases we have faced via contract price increases and surcharges. We have been faced by some geopolitical challenges as as as we previously reported. The direct and indirect impact of the Ukraine Conflict has impacted our Italian business in particular and has reduced and reduced sales of circa £1,300,000.

7:16 And in the first two months of this year, we were also impacted by the COVID lockdowns in Shanghai impacting our Chinese operations, which reduced revenues by, again, approximately £1,100,000. We've we've had good organic growth. This has generated just over £6,000,000 of revenues. Mark will go into this into a little bit more detail, but the main years of growth have been in light vehicles, general industrial, and the energy tech and infrastructure sectors. We've also seen the the the good benefits of the acquisition of TRIFAST PLC that was completed in August 2021, and North America now accounts for circa 12% of of total group revenues.

8:00 Next slide shows the impact on on on of our underlying profit before tax. The bridge between £7,000,000 in half year twenty two to the £5,500,000 this year. The first two items on the bridge reflect the profit impact from the revenue movements that we talked about in the last slide. So the contract price increases 6,500,000 flowing through to the profit, and the combined impact of the organic sales growth, the partner acquisition, and the geopolitical issues increased the profit by 2.3. As mentioned, we have been significantly impacted by inflationary cost pressures, main items, areas being commodity and raw material prices, people, freight, and energy, and this has reduced margins by gross margins by £7,500,000, substantial amount having already been recovered by our price increases.

8:59 Overheads. Overheads increased year on year by by 3,300,000 pounds. There are three major items of this. Firstly, the full impact of the of the Falcon acquisition does add £800,000 to our cost base. Secondly, we have invested approximately £1,000,000 in our central support functions to help drive growth in our business, especially in the areas of sales and quality. And thirdly, in line with a lot of UK companies, we have undertaken a major benchmarking exercise on our salaries that we pay to our employees, and this has increased costs, our overheads by £1,300,000. Go on to the next slide, please. Net debt bridge. So this slide shows the increase in our net debt. Our net debt has increased during the year from 24,000,000 to 40,000,000, an increase of £16,000,000.

9:53 When we actually do strip out the impact of foreign exchange, then the net increase is £13,000,000. Clearly the standout item this bridge is the continued increase in our stock levels, which has a cash impact of £9,000,000 in the period, And when you look at the balance sheet taking into account foreign exchange movements, it has been impacted 14,000,000. The key fundamental driver of of our higher stock levels has been our determination to ensure ongoing continuity of supply to our customers amongst, you know, amidst the the global supply chain challenges and almost chaos that that's that's started to exist with with with COVID.

10:39 For the first half of this year in particular, there have been four main drivers of the stock increase. Firstly, costs costs have increased, and that's impacted us by about £2,000,000. New business wins where which we've had where we've had to actually build up our stock to ensure that we can actually fulfill the new contract wins that we've won. There has been some volume increases of of just over £3,000,000, and we have seen

11:09 some customers actually deferring some of their orders arising from Microsoft sorry, Microchip shortages coupled with a decline in demand from our health and home customer base. We are working rigorously and actively to re reduce our stock levels, and this coupled with a softening in supply chain lead times and costs should lead to a reduction in stock levels in h two of this year and also into the financial year '24. Moving on to the last slide. The last slide talks about some key balance sheet figures.

11:52 As mentioned on the previous slide, net debt has increased to £40,400,000. We currently have facility headroom including the accordion of 50,500,000, and an adjusted bank adjusted leverage ratio of 2.21 times comfortably well within the the maximum covenant levels of of three times. Q three and q four trading will help boost profits and along with a number of working capital initiatives should see a sizable reduction in net debt and adjusted leverage ratio prior to the year end. We have working capital initiatives which cover stock, debtors, creditors, and also improvements in our internal cash allocation of funds within our global operations.

12:38 I'll now pass on to Mark who will take us through the regional operating review. That's great. Thanks, Andy. At a high level, on those slides, you can see that all the regions grew in the period, with North America growing the fastest by nearly 81%. A large element of this is down to the acquisition of TRIFELCON, but even so, organically, it delivered a commendable growth rate of 24%. Again, all sectors showed growth with the exception of health and home, which I flagged at the year end, which was softening. Light vehicles grew the largest in absolute terms, and it's pleasing to see the inroads were making heavy vehicle, which delivered the fastest percentage growth in the period of 41%. This along with growth in other sectors is creating a more balanced sector portfolio.

13:29 I would say frustratingly, the revenue could have been much higher, but it's still being hampered by semiconductor shortages, which is affecting production at many of the OEM manufacturers. This wasn't just across light vehicle. Other sectors have been hit hard too. A high level estimate puts this deferral of revenue at around circa 800,000 per month, and, we are beginning to see it ease slightly, which, obviously, is gonna be beneficial going forward. Just going into a little bit more detail, Europe has probably had the, the biggest impact, and I'm going to talk about health and home first. This fell 13 and a half percent and had the largest impact on our results.

14:15 As I as I said, I mentioned the softening that we were seeing in this sector as well as the impact of the Ukraine conflict. The indirect consequences of the Ukraine conflict

14:28 had a big impact on some of our global domestic customers, more so than we anticipated. This had a severe impact on TRIFIC and our Italian operation. However, I am pleased to report that those customers have been able to reallocate their production filler facilities, and we have started to see supply resume again. If we look at, for example, the e t and I sector, this delivered strong absolute growth, mainly from our Hungarian operations, which specializes in this sector. This operation moved earlier this year into larger and more eco friendly premises and now gives us the capacity to grow the Eastern European region further. Likewise, as part of our core strategy, we have been working closely with a global power company, and I'm pleased to see that invoicing has started in the first half of this year with more exciting opportunities for future collaboration globally as well as utilizing TRIFAST manufacturing capacity.

15:30 With respect to light vehicle, growth has been seen across majority of the European regions, and and these are these are wins that were made eighteen to twenty four months ago, basically. And then finally, looking at distributors, they saw strong growth. Two main reasons. We transferred EU distributors from The UK to Germany, which I mentioned at the year end because of Brexit, and this will be completed by the end of this financial year. And also, we've done a competitive push of our own branded products with these European distributors, and that has been successfully increasing demand there. If we move on to, Asia, the Asian region grew over 14% with the largest, growth coming from light vehicle at 44%.

16:18 And this was despite the Chinese lockdown for two months. We're also this was also boosted by an automotive OEM project that we've been working on for over two years with tier one suppliers based in Thailand. And really in contrast to Europe and The UK, the home sector also grew in Europe and Asia by 18%, delivering a strong order book to one of our large domestic appliance customers. I can now move on to The UK, which, the new the, this group five and a half percent. And at the year end, I mentioned two large multi million pound contracts that we have we're working on. I'm pleased to say they would've been secured, and we've started invoicing in the first half of this year. So, again, a good move in in that in that area.

17:08 And with regards to the heavy vehicle, we've seen an increase in material handling equipment, but likewise, a rise in a significant rise in orders

17:17 in aerospace and defense, which should increase invoicing in the second half of this year. And then finally, with North America, 57% of the growth came from TRIFAST PLC, which is performing well, is in line with our expectations and grew 20% on a like by like basis. General and industrial saw the largest growth, Our core strategy is to develop OEM customers globally, and we we certainly have on the acquisition, we received a new customer, which is growing locally in in in America as well as developing inquiries for the rest of the group elsewhere. And the same goes with a customer in the energy tech and infrastructure sector where, again, that large customer, we are beginning to invoice sorry, get inquiries for locations elsewhere in the group. This particular customer is a multimillion dollar revenue customer with an order backlog, in excess of that revenue due to chip shortages, which is incredible.

18:23 Okay. If I can then move on to the operating profit. This is key actually, and I know Andy has touched on it earlier. Underlying operating profit has been impacted largely down to the inflationary challenges and also, some targeted investments into overheads. Of the 200 basis points drop, a 140 of those basis points is down to Italy. Our operating mark profit reduced from 6,000,000 to 5.1% compared to that 7.2% previously.

18:57 The reason for that drop in Italy is that sales in that site had been severely impacted by the reduction in demand by the low large domestic appliance customers I mentioned, and this reduction had a negative impact on the plant's utilization rate and coupled with those significant rising input costs such as energy and freight, resorted in a significant negative swing in the period of 1,800,000 against the prior period. To try and put that into perspective, pre COVID, TRBX annual energy costs were €600,000 per annum. Following Ukraine conflict overnight, this went up to an annualized figure of 3,400,000 and certainly impacted us in April and May.

19:44 The good news is that we do expect to get TRIFIC back into profit again in the second half of the year, and that's passing on further cost increases to the global domestic appliance customers through a a note through a a process and a mechanism, which Dan can talk about. Lots of activities have gone on in the cost and production efficiencies to mitigate the inflationary costs. And although early days, we are starting to see a softening in the energy commodity prices. The UK, this is a mixed bag. We have seen price increases and margin increases in our distribution site. However, this has been offset by cost price pressures and our contractual site at TRIFAST PLC in The UK. We do expect these margins to recover in the second half of the year.

20:30 Asia has been not as hardly hit hasn't been as hit hard with inflationary costs as other regions, but you can see there that, the margins increased by 350 basis points due to, higher growth rates to other distributors in Europe and North America. And North America, although this is still a small loss, we have seen a margin improvement of two seventy basis points. And again, we expect to see margins improve in the second half of the year, certainly as customer negotiations conclude and costs begin to suffer. If we go on to the next slide, just to give you an update on strategy. There are three core drivers to this. Firstly, organic growth. The core strategy remains working with our global customers as a full service provider, engineer our parts in, and use our manufacturing and then distribute worldwide to customers at their global sites, margin expansion, commercially and operationally, look at market pricing, cost, and operational efficiencies, and acquisitions to expand our global customer growth, risk, and enhance margins.

21:35 All of this is wrapped up under ESG, which for me is about investing in the long term sustainability of TRIFAST. If can go on to the next slide, please. We do have ambitious growth plans, and we need to protect the business against potential global recession. As a result, I recognize the need that for pace and agility, we changed the reporting structures, created a new executive committee. There is only, six of us in that committee to, aid pace and agility, looking at targets, performance metrics, and concentrating on those key areas. A key part of that is getting a team together

22:17 that covers all the functions. That will be, the new CFO, which I'm delighted to announce Darren Hayes, will be joining us on the December 1, global HR director, the company secretary, the business transformation director, and Dan, as I mentioned earlier, our chief operating officer. And with that, can I now hand over to Dan, please? Thanks, Mark, and good morning, everyone. Yes. I do wanna talk on a couple of points on organic growth before we move into margin expansion activities. Firstly, it's without doubt noticeable that disruptive technology is providing us with opportunities to expand our PART portfolio. Our customers and our core markets are finding, new opportunities to utilize technology. And as that happens or as legislation or public demand or the replacement of older technologies continues, we, our sales force, our engineering team, and our manufacturing teams are able to, help design in new products at higher profit margins with a smaller competitive footprint.

23:20 This year, we've seen a substantial increase in those type of inquiries. We are seeing a substantial increase in our wins, and our order book is already reflecting that quality of higher engineered components. The second element of organic growth is about regional and sector rebalancing. We're being very deliberate in our organizational design and our marketing activities to maintain and improve the sector balance. And similarly, we want to continue and deliver a more poised revenue profile between key geographies. Now a key to that is the continuation, of our investment in a global sales force focused by sector and key customer and supported by a wider organization and our supply chain partners. And we've invested in this significantly in the last twelve months.

24:08 The successful completion of our Atlas program will be the icing on this particular cake as we'll be able to utilize the Microsoft CRM system, and that will help us to move away, from a very manual process that we have today. Moving across to margin expansion, firstly and most importantly, we talk about price. And then the key to this is for us to build pricing into our t TR DNA. We talk about pricing every week. We talk about margins across geographies and customers. Pricing is now within our weekly KPIs and is a core component performance review. And this is evident, frankly, as we've successfully concluded first, second, and in some cases, third round price increases. We're significantly progressed in remaining negotiations, mainly in Italy, as Marcus alluded to, and we expect to conclude those before the end of this calendar year, and those pricing will be effective in our fourth quarter of this financial year.

25:07 We've got a range of pricing tools available to us as we nuance from customer to customer. We go from open book to surcharges to straightforward price increases themselves. Coupled to price increasing, we have niche products with increased margin potential. These products can be produced by our own manufacturing locations or by working closely with supply chain partners. We introduce these to our customers, and we blend the competencies of manufacturing, marketing, engineering, and sales communities. Of course, a niche product by default has a smaller competitive footprint and a higher price and margin profile. We've spent a lot of time working on supply chain synergies. In this last year, we've overhauled our supply chain structure. We've created one voice to face our suppliers, and through a consistent message, we're able to standardize and improve credit terms, income terms, pricing, rebate schemes, and frankly, place more business, with fewer suppliers.

26:03 On top of that, we've also worked with a flexible supply chain network to help us deliver onshore and near shoring needs, and of course, improve our working capital by improving inventory turns along the way. To come alongside this, we've also focused a lot of time on intercompany. Intercompany spend is not a new initiative, but it's a deliberate metric. Again, we've woven it into performance reviews. Our sales communities and engineering teams and our supply chain chain teams are all committed to spend more money with ourselves. I think testament to that is we expect to see our intercompany spend increase from last year to this year, by 20%. Mark's referenced the operational improvement program already. We are going through a process. It's global and functional, where we look for synergy and sustainable cost improvement opportunities on our core operating model. We're taking action now that will deliver annual cost improvements, and this is captured in our forecast expectations to an to a degree. And coupled to this, we have a wider reaching program running in parallel, which we will be enacting, over the next couple of years.

27:10 Finally, before I hand back to Mark, just wanted to touch on our manufacturing investments. They do allow a greater capacity, for us to reach higher value components to our end customers, bringing in niche products, and of course, it supports our supply chain synergies. We've invested in world class machinery, and we continue to deploy lean manufacturing principles wherever we go, and that enables us to win blue chip OEM awards and pass all the audits, that go through almost every week. Thanks, back to you, Mark. Thanks, Dan. If I can just give a very brief summary of of Atlas, it's moving on swiftly. The final phase of TR Parsings in The UK, the largest and most complex site, will be implemented in q four. This means the whole system would have been fully tested, going forward, we should be able to lift and drop this into other locations with only local, regulatory, and accounting changes required.

28:06 And this gives us the confidence that we can accelerate the rollout in FY '24. After this date, we envisage that the Atlas name will be dropped, and any new sites to be included would be just a business as usual implementation. It does mean some of the benefits we're expecting in FY twenty four, will be pushed out slightly to FY '25. And on the working capital, obviously, Andy's gone through that in in detail. Can we move on to the next slide, please, Rachel? Regarding acquisitions, I've mentioned TRIFAST PLC. It's integrating well, and it's performing on a like like basis very well as well. With respect to further acquisitions, ongoing discussions are being had with potential targets, but obviously, caution is being exercised at this moment given the current macro environment.

28:55 And then with sustainability, there is a lot of work going into this, which you can find out more on our sustainability report in our website. But in general, we you can see that we're moving in the right direction. We've been awarded silver status from EcoVadis, which only 25% of the companies receive, and an a rating from MSCI. The main areas to bring the retention that we're working on is very much around aligning our scope one, scope two emissions reduction to science based targets, and then implementing a network of sustainability champions around the group, which will support those energy saving initiatives. This leads me on to the next slide, which, you know, we all know how challenging it is at the moment, but it doesn't prevent us moving forward with our medium term aspirations.

29:42 You can see that the core strategy is working by taking market share, which gives us the confidence that we'll exceed gross domestic product each year. With the commercial and operational margin initiatives that we've shared, we should expect to achieve 10 to 13% operating margin as we've done in the past. Careful investment and allocation of capital, coupled with increased operating margin should get us back to the 10 to 15% rocky. And North America, as you know, is a strategic region for us and by both organic and acquisitive means, will enable a better rebalancing of the regions. And implementing ATLAS by the FY twenty four will certainly facilitate the future the group's future growth and margin expansion plans. I can go on to the final slide, please. As you all know, macro and geopolitical challenges will continue.

30:35 However, currently, as I mentioned, trading hour and margins remain in line with our expectations. Momentum is growing on passing pricing through to mitigate further cost inflation as you've heard. Operational margin improvements have been identified and are being implemented for now and the future. We are we have put mitigating actions in at TRIFAST to reverse the losses of the first half of the year, and hopefully, you've heard that the new executive committee has been formed to ensure all of the above happens at pace. All of this gives us the confidence for the future and our medium term goals. With that, I think we can go to questions and answers. We have got a few in at this moment.

31:22 Mark, absolutely. If I may just jump back in then, Andy and Dan as well, thank you very much for your presentation this morning. I will just bring back up your cameras there. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, 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. Mark, Dan, Andy, as you can see there in the q and a tab, we did receive a number of presubmitted questions ahead of today's event as well as a number of questions that have come in during your presentation today itself. So firstly, thank you to everyone on the call for taking the time to submit their questions. And guys, if I could just hand back to you to run through the q and a tab to respond to those questions where it's appropriate to do so, and then I'll pick up from you at the end.

32:13 Thank you. No. That that's great. Thanks, Jake. I think the first one is could you elaborate as to what the new chief operation officer will do, which will speed up decision making, and do you have the current example of that in practice? That's a very good question. Damn. What are you gonna do? No. I think the the first thing is on is about having a a smaller team in the exec committee. That exec committee covers all the functions that we need in the regions to be able to act quickly. That meets on a a frequent basis, currently on a weekly weekly basis, and that will cover some of the key performance metrics that that Dan alluded to, such as the pricing, such as stock reduction.

32:58 And part of Dan's new remit is having the reporting lines, the regional and directors report into him so that we can monitor exactly how each of those regions is doing and by location as well. The second question says, absolutely. We acknowledge that stock inventory is high and are working to normalize the inventory. Do you have an estimate of the running value of write downs due to the obsolescence and a current budget figure for the full year? Andy, can I hand over to yourself to answer that? Sure. Okay. Thank you for the question. I think first of all, I'd say that our stock provisioning policy is aggressive or prudent from a from an accounting point of view. We're we're more aggressive for customer specific stock than we are for general stock.

33:52 It it's it's an area which the auditors at the half year end spent a lot of attention looking at and and feel very comfortable in our provisioning. We to to give some figures for you, then the stock provision at the end of September is approximately £10,000,000, which which represents about 9% of of of gross inventory. And I think an important point is just because it's showing us as we got £9,000,000 obsolescence provision, it it sorry. £10,000,000 obsolescence provision. It doesn't mean that stock is is is obsolete. The the vast majority of that will be sold and will be sold at at at normal prices. It it is just a provisioning that that that we do to to produce prudent and reliable sets of financial accounts.

34:42 That's great. Thank you, Andy. The next question is, you mentioned throughout the report medium term. Do you have a time scale in mind or is this a broad general view which reflects as big as become known? I think realistically, you know, providing the world doesn't fall fall off a cliff, you know, we are with initiatives that we are putting in place, you know, we would hope to start seeing those margins, get to where we wanted them to get to in during FY '25, to be honest. Obviously, if the world goes to Helena Hancock, then that is something that we'll obviously have to address. But, no. That is that is our aspirations.

35:34 This is from Tom. Thank you, Tom. You referenced significant benefits of Atlas that can were both expected and unexpected. Can you expand on the unexpected benefits? I think one of the and it's a really good example that came out recently when we're looking at the data actually of our sites. Here we I mean, and this is just one example of picking up a part and it had one part, had 17 different suppliers with nine different prices from those suppliers. Part of what we are looking at is, well, that's just that's crazy. You don't need seven or nine nine suppliers. We can consolidate that down into one or two, basically. And and instead of with with a fixed price and be able to negotiate with those one or two suppliers, as customers are consolidating their supply chain, and thankfully we are part of that supply chain and that consolidation process, Likewise, we would wanna be doing the same with our suppliers, and instead of doing small margins from each of our sites going to the different different suppliers, we can have a bigger volume going to one or two suppliers and therefore have better supplier synergies and terms. So I think that's a that's a key key benefit going forward.

36:59 Just trying to think. Have have your significant investors explained why they have punished the share price so much? That's a really good question. I I think going around today or going around this week, I think it's it's been quite therapeutic because we're able to explain where we are. I think I mentioned about trading is in line with expectations. I think at the half year, a lot of pricing negotiations kind of happened throughout the second quarter of the first half. And so we don't we don't get to see those benefits that have been concluded in that first half, but we do get to see them in the in the results certainly from October and, looking at November as well. So I think for us, that's the positive. I I understand the the concern, obviously, with the margins dropping and and the stock increasing.

38:03 I think what we've got to do is to show how show the data on that, in q four and show the success that we're we're making in that area. Here's another question. Where's that? So I guess the this is good to see the depth on the board. What key strengths do the new board members have that will help strengthen the position of the company? I think if you look at the the PLC board, we have Scott Meakin has come to the, the the ten year tenure.

38:50 Scott has been, really, really good to us, good for us. He has worked in our industry and has been, very good from an industrial point of view and support on our strategic initiatives. We're really pleased to, find Louis who again has worked in engineering component business, gets pricing in pricing challenges and gets what we need to do, and and having somebody as a CEO that has worked in that will be, superb, basically, to as a sounding board to, to bounce ideas off. So, no, I'm really pleased with that. Andy has done a a great job coming in, but we have a new CFO also joining us, Darren. And again, Darren has worked in, Rolls Royce as a CFO and as good in Gucci attire with huge amounts of international experience and really good practical hands on, working capital and margin enhancement initiatives.

39:58 So again, we'll hit the ground running basically. I'm conscious now it's ten past, and if there's any other questions, happy to answer. Mark, Dan, and if I may just jump back in there, thank you very much indeed for addressing all of those questions that came in from investors this morning. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended for you to review to then add any additional responses, of course, where it's appropriate to do so. Mark, perhaps before redirecting those on the call to provide you their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great.

40:46 No. Well, firstly, thank you all for joining the call today. It is it is very much appreciated. There is quite a few of you on the call, and, yeah, I think from all three of us here, we do we really do appreciate it. And I think I don't think we're alone. It is a very challenging environment at this moment in time, but what I'm hoping is the presentation that we've provided will give you some reassurance and the confidence, that we are heading in the right direction. And with that, thank you all very much, and and, thank you, Jake. Mark, that's great. And Andy and Dan as well, thank you very much indeed for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations.

41:37 This may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of TRIFAST PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.