Trifast (LSE:TRI) — Final results for the year ended 31 March 2021

0:02 Good morning, ladies and gentlemen, and welcome to the TRIFAST final results investor presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab on the right hand corner of your screen. Please just simply type in your question 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 questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard and we'll send you an email to notify you when they're available for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll and if you could give that your kind attention, we'd be most grateful. And just before I hand over to the management team, perhaps I could ask the presenters just to turn off their cameras just so we can make the screen slightly bigger for the attendees.

0:53 And I would now like to hand over if I may, just waiting for Claire, just the icon at the top Claire, the camera symbol. Perfect. Don't worry. Let me bring up the slide. Here we go. All gone. Worry. That's perfect. Thank you very much indeed, Claire. I'd now like to hand over to Mark Belton, CEO from TRIFAST. Good morning, Mark.

1:13 Morning, Mark, and thank you very much for the introduction. Good morning, everybody, for joining us. Joining me today later will be Jonathan Chirman, our Chairman, and also Claire Foster, our CFO. If I can move on to the next slide. So, some of you may know us and some of you may not, so I thought it would be a good idea to give a very quick overview of TRIFAST or Tiara, as we're known in the trade. We were formed in 1973, nearly fifty years ago now. It seems very quick it's gone that fast. By Mike Tims and Mike Roberts, hence the TRI name. We are an international specialist in the design, engineering, manufacturing and distribution of high quality industrial fastenings and Category C components, principally to the large global assembly industries.

2:05 Our core strategy has been a full service provider to our multinational OEMs around the world. How do we do this? Well, we get our engineers in at the early stages working with our customers on the new application builds that they're working on, and then getting our parts designed in at that stage. Where possible, we'll try and manufacture those parts at one of our seven manufacturing locations, and then we have the ability to be able to deliver those parts to the customer sites pretty much anywhere around the world.

2:42 One thing I would like to say is we are not a standard commodity supplier. Over 75% of our products sold are to specific customer or TRIFAST specifications. We have 32 locations worldwide, split into four regions, as you can see: The UK, Europe, Asia and America. And from these, we can supply into over 75 countries. We have a fairly well balanced sector spread, which you will see later, and we have around 5,000 customers, with no one customer being more than 7% of the Group's overall revenue. For more information, please go on to our website, which now has the twenty twenty one reports and accounts uploaded.

3:27 That was a very, very quick high level overview, but there is a lot that we would like to get through today. So without further ado, I'd like to now hand over to Jonathan, our Chairman. Thank you Mark. Let me add my welcome to everybody. As Mark said, I'm Jonathan Shearman. I have the privilege of chairing TRIFAST and just a few words from me before I hand back to the exec team who will walk us through the rest of the slides. We start with our purpose and you can see our purpose there. We don't talk about our purpose all the time but it is by design that we start with this and it's this that's at the core of TRIFAST, it anchors Mark's vision for us for the future and in turn informs both the strategy and the culture. And so for any of you that haven't seen that before, it's there. I'm not going to read it because you guys can read it, but to pull out some of the phrases trusted reliability, a play on the TR that Mark has referred to. To our global customers, Mark's talked about that, we'll talk about that some more, and it's our fastenings that enable innovation.

4:33 Sticking with culture just for a minute, as a board we treat this as complementary to and sitting alongside strategy in terms of importance. We see the two things as two halves of the same circle of working together and as one part of our culture, we refreshed our values and cultural pillars in the year that's just gone. I believe that there's a slide at the back end of these slides in the appendices. If that doesn't work for people, as Mark said, for the first time today we've published our accounts on the same day as the finals and so you can go there. I think it's page 24 of the PDF, but the accounts will tell you more about our culture. Moving on to a few comments in terms of the highlights slide. We've expressed our gratitude on previous occasions but we never want to be slow to say thank you to both our people and stakeholders.

5:25 It has been an extraordinary year and our people have sat at the core of what we've been able to do. By looking at the highlights there again, Mark and Claire will walk us through pretty much all of those and you can read those at your leisure as well. I think I'd pick out cash conversion from there, which alongside an equity raise during 2020 has put us in a really strong position with regard to a balance sheet that confront both organic growth and acquisitions. And towards the end, Mark will update us on the strategy, what that currently looks like, what the outlook looks like, and he will include some comments on current activity levels and headwinds because we have to consider them both at the minute. And with that, I will hand over to Claire.

6:12 To introduce themselves, I'm Claire, Claire Foster, Chief Financial Officer here at TRIFAST What I want to do with this slide really is just take us through a few of the key results for the year, set the scene if you like and provide a bit of context. As Jonathan said and as in fact we all know, it has been an extremely challenging year, especially in the first half of the year. But we've shown a lot of resilience in the face of those challenges, as you can see there with a revenue figure that's only gone backwards by 6%. I'm not going to go into any more detail on that because Mark will touch on that in a moment's time. What I would draw your attention to here is the gross margin. Here we have seen a fall of 90 basis points, so the 26.6% you see there. Now most of that is due to the reduction in sales.

7:00 As you would expect, we are operationally geared to some extent, even at the cost of sales level. However, the other thing to note, and this is something that will come up again throughout the presentation, is that we did start to see the negative impact of those well publicised increased freight costs starting to come through into our margins, especially in the final quarter of financial 2021. Now, we are obviously working hard to minimize those costs and recover them as appropriate from customers, but we do think it's likely for the shorter term that we will continue impact on margins there. Despite these pressures, though, operating margins have held up well at the 6.4% you see there on the table, and this is in part due to some careful overhead savings that we've been able to make in a number of places. And as we've previously reported externally, we have also made use of some of the various government support schemes that have been available to us over the course of the year.

7:54 The last thing I would point out on the balance sheet side before handing over to Mark is the net cash position. This is something Jonathan's mentioned. Following a successful equity raise in June, we did find ourselves back into a net cash position for the first time for a number of years, but it is worth saying we've really further supplemented that by very high operational cash conversion rates over the course of the year, just under 150%. So we have been generating cash in what's been a very difficult year and it's fair to say a fair amount of it. And as Jonathan did say, that does put us in a great position to take the business forward. And on that note, I'll hand you over to Mark to take us through a bit more on the revenue section. Thanks, Claire. Right, moving on.

8:43 In the next few slides, I'll run through what we saw last year, but also what we will be seeing going forward. As you can see here on this slide, I think this is a really graph. And as we are in the middle of the Euros at the moment, I'd like to say it really was a game of two halves here. COVID had a significant impact in the first half, down twenty one percent, as you can see. And the most affected region was The UK, down twenty five percent. We saw growth start to continue start to grow really steadily from April onwards. And then in the second half of the year, we saw revenue grow around 10% year on year against 2020. Europe saw the quickest recovery, up nearly 16% in the second half of the year, with The US slowest to rebound at 2.5%.

9:38 Moving on to this slide here, with the exception of Europe, which remained in line with 2020, the other regions all weakened by around 9%. Looking at the sectors on the right hand graph, we have made a slight presentational change. And again, more details of this can be found certainly in the appendices in the booklet. They're not huge changes. It's more of a fine tuning. And the main reasons for this were as follows: It provides better customer focus, which are now handled by our global account

10:08 directors, who have expertise in these sectors. It also aligns and provides greater synergies with our suppliers and our products. It rebalances certain sectors. For example, previously we just lumped light vehicle and heavy vehicle together, whereas actually, they both have very different market life cycles and have different products in some cases. And finally, by moving some customers into more relevant sectors, it gives them access to more aligned engineering expertise that we have, which is going to enable us to take advantage of new emerging technologies, which I'll talk about later. Just looking at that revenue split, as you can see, and as expected, most sectors were hit hard. The only exception was health and home, which delivered growth across all our regions, which I'll, again, come on to shortly.

11:02 Looking at Europe, Europe definitely had the quickest bounce back, with trading in line with last year. And given everything going, I think that was a jolly good performance to make. The main reasons for this success, our Spanish operation continues to deliver over 50% growth in the light vehicle sector, even with the well publicized semiconductor shortages seen in automotive and experienced in Spain. Italy saw a large restocking of inventories, particularly in the health and home sector. Following in 2020, there was a marked destocking within domestic appliances, as they wanted to get down to a just in time sort of approach, which was just not sustainable. Hungary saw double digit growth in our energy, tech and infrastructure sector, and as a result of that, and contained sustainable growth, we will be moving to new larger premises later this year.

11:58 If we look ahead, in line with other industrials at the moment and as Jonathan alluded to, we are expecting to see supply chain challenges continue in the short term. Raw material increases, freight costs increasing, lead times being significantly pushed back, but we are managing this with our customers and suppliers accordingly. And then, obviously, there was the well publicised Brexit deal. This was not as good as we had had all hoped for, but we had planned for this, and one of the options was that we are now transferring around between 5,000,007 of our branded products from our UK location to our German site. This is to ensure our European distributors continue to receive that seamless service that they've come to expect.

12:46 This will happen later in the year. It's not a P and L, a group P and L impact, it's more of a switch between regions. So, really, to summarise, we have had some very nice pipeline wins during the year and previous years as well, which are now coming on board. And really, the upshot of all of this is that we expect to see strong growth across all our sectors continuing.

13:13 Looking at Asia. Overall, the Asian region was down 8.8%, but it was a mixed bag across several of the locations. Our Taiwanese operation, which sells direct to distributors in Europe and in The US, did see a slower recovery. However, our Chinese operations saw growth throughout the whole period, as the economy was able to recover much quicker after the outbreaks. And our Singapore side, again, saw double digit growth in the second half of the year, following a quicker recovery from one of our largest global OEMs in the health and home sector. Looking ahead, labour and raw material shortages are definitely creating challenges in the shorter term at our Asian sites, and we are seeing more lockdowns in Asia, certainly impacting the ability to run at full capacity. A good example of that is in our Malaysian site, which is currently only allowed 30% of its workforce in. It tends to be a closure for a month, and then there is a sudden upsurge in the next month when everybody comes back.

14:21 That said, other sites such as Thailand are continuing to forecast double digit growth for us. So, overall, we're expecting strong growth to continue during FY22.

14:37 Looking at The UK, I mentioned earlier that The UK was the hardest hit in the first half of the year, but then did rebound strongly in the second, particularly in quarter four. With respect to Brexit, we did expect a ramp up of orders pre the December Brexit deadline, but the demand continued into quarter four and continues to remain strong.

14:58 You can see there that the light vehicle did struggle, and it struggled particularly more so in the first half of the year with automotive shutdowns. That said, health and home performed well in the period. A large part of this was down to medical, which requires a lot of stainless steel parts, And one of our subsidiaries in The UK, PTS, is an expert stainless steel. And we saw that subsidiary grow both in the first half and in the second half. And that is why we are looking at expanding that to much bigger premises going forward.

15:38 Looking forward in The UK, I've already mentioned about the transfer of business from my UK operation to the German location, but we have secured plenty of new wins, largely in the EV and general industrial space. So again, we are expecting trading levels to continue to recover during FY 2022.

16:03 Looking at The US, we had an overall sales reduction of 9% there. The main reasons for this slower growth was due to delays in startup productions and the indirect impact of the semiconductor shortages, which has hit them harder than in any of our other regions. This region is continuing to be hit hard with freight and lead time issues, as well as the chip shortages. However, that said, once these shorter term challenges can be sorted, we do expect to return to double digit growth again as we've witnessed pre COVID. And with that, I'd like to hand over now to Claire, who will talk a bit more about the operational margins. Thank you, Mark. We'll get used to the technology at some point.

16:52 We've heard about the top line and some of the challenges and opportunities and particularly the opportunities that we're facing there. But of course, as we all know, it's not just about revenue and therefore what I want to do with this slide here is really provide you with an overview of what's happened to our underlying operating profit in financial year 2021. Now, we touched on some of these things at the beginning, but what we've really tried to do is just put a few more numbers around it so that you can have a little bit more context. And as you would expect, the biggest impact in absolute terms has reduction in sales. And you can see that in the slide there, in the first orange column at £4,500,000 But looking beyond the impact of the sales reduction, on the gross margin side, as discussed at the beginning, we have also seen some negative impact of those freight costs feeding through into that reduction, particularly in quarter four.

17:45 Although on the good change side, we have been able to offset this to some extent by careful cost savings, including the use of some government support schemes where possible, and the two of those things together really get you to the 500,000 that you see in that second orange column on the graph. And of course, the main reason we went out to do the equity raise in June 2020 was to give us confidence to continue to invest in such an uncertain macroeconomic environment in some of our strategic objectives. And as you can see there in the last column, the £1,100,000 in orange, we've been investing in those strategic investments over the course of this period, having been given the confidence with the shareholder equity raise that was completed. These have largely been in the form of a number of key strategic hires at our operational and executive board level.

18:35 And we've announced these previously, but just for information here, that was including a new M and A lead for the group, a new group sales and commercial director, and also a global supply chain director here at group level. A number of other recruitments in there, but they were really the key strategic hires. Hang on, having a There we go, I think we've resolved that. Oh, it's a challenge, isn't it? And the other thing that's gone into that, and we'll talk some more on this later, is Project Atlas, our big investment into IT platform processes and policies. We've started to roll that out and that has also led to some planned business as usual type costs coming through in the year. So we're excited by that £1,100,000 It looks negative, but it actually is a real reflection of ongoing investment for growth to keep us carrying forward and growing sustainably.

19:32 The last bit I would look at is the £2,400,000 the blue block in the middle that you see there, and that is the net effect of effectively our cost saving activities in the year. As you would imagine, in the middle of a global pandemic and a downturn, we did the responsible thing and we looked at our cost base and took swift and effective action where we could to defer costs and to remove costs out of the business in this difficult year. It's worth noting that the majority of these savings are only short term. They're things like bonuses, travel and discretionary spend reductions. Use of government support schemes have also gone into that number. They're not things we'll be able to continue to put through the income statement as we move forward, especially now that, as Mark has made clear, demand and growth have returned so strongly to our key markets.

20:21 Notwithstanding that caveat, and I think this is worth mentioning, as you would expect, over the second half of the year, we did also perform a more detailed review of our underlying cost base, and we didn't expect this process to result in any substantial savings. We're in a period of investment driven growth. However, we have been able to secure some small reductions in our global headcount as a result of this, as well as some property right sizing at a couple of our locations. And overall, that kind of self help will save us around £1,000,000 per annum as we go forward, split between cost of sales and overheads. So if I move on to the next slide, it's also important not just to look at operating profit, but also, of course, to understand what's been happening on the balance sheet side.

21:11 The best way to do that for us is to really take a look at what's happened to our net cash position. We've mentioned this at the beginning, I did, and so did Jonathan. And we are in a net cash position for the first time, and you can see the movement there on that graph. It is probably worth noting here, just a technical point, but we are talking adjusted net cash here, I. E. Before the impact of IFRS 16 and right of use liabilities. This is how our banking covenants are calculated and this is certainly the key metric that we look at on an internal basis when we are managing the business. If you do look to the note at the bottom there, you can see that even if we do include those IFRS 16 liabilities, we are still in a net cash position of £500,000.

21:55 So what's been going on? Well, at a high level, we've seen an increase in cash of £28,500,000 taking us from a net debt position you see on the left hand side of £15,200,000 to a net cash position of £13,300,000 on the right hand side. There are a number of reasons for this. The first very noticeable one is the net cash inflow of £15,400,000 that followed on from the equity raise in June. Now, the eagle eyed among you may spot that the actual number on that graph is £15,500,000 It's not a mistake, I promise you. That is just in fact the impact of people also exercising some of their Save As You Earn shares in the course of the year. Outside of Atlas, which we can talk about later, we've seen 1,800,000 pounds of plant and machinery, routine maintenance spend really, across our manufacturing sites and there's nothing there that we would pull out for your particular attention.

22:47 Going forward, we would always expect CapEx to be around 1,500,000 to 2,000,000 just to keep our plants and machinery in operating condition. The working capital is really the bit that we are particularly pleased about and would like to give you a little bit more detail on. There we've seen a reduction of 7,300,000, bringing that money into our net cash balance. Stock levels have come down by just north of £2,500,000 and we are now to a more normal level, having started the year higher due to all the volatility and uncertainty at the beginning of the year. We are now back to a more normal level of gross stock weeks, twenty three and a half weeks, and we tend to average just shy of 23 in recent history. One other thing in there is creditors have increased significantly and this is really to support the higher forecast trading levels that we're now seeing and also to take into account some of the current logistical challenges and the lead time pressures that Mark has mentioned as well earlier.

23:47 I think it is worth understanding that in reality, given all the challenges that are out there, we probably are likely to see a temporary return to higher stock levels, at least in the first half of financial year 2022.

24:00 It's incredibly difficult at this point of time when people are desperate to get stock into the business and get stock around them to turn around and not allow that to happen. And so, do expect that over the first six months, we may well have to invest a little bit into stock, but would imagine it will regulate again by the end of the year. So, taking all that into account, overall, as mentioned at the beginning, we've got that very strong underlying cash conversion of just under 150%. That's helped to further supplement our net cash position that we reached in June following the equity raise. To give you a bit of a flavor on the banking side, and I won't go into detail, but suffice to say, we have north of £60,000,000 of available headroom at the moment, which is providing us with capacity and confidence to continue to invest in market share opportunities and our strategic investments. And as you will hear in a little bit of time, also giving us confidence on the M and A side to carry on our journey there.

24:58 If I just take us over to the next slide, just give you a flavour of where we are on the dividend. I suspect some of you are aware, but just like a lot of other businesses this year, we didn't propose an interim dividend for financial year 2021. However, the Board does absolutely still recognise the role that dividends play in forming part of our TSR and we are committed to maintaining a progressive dividend policy as we move forward. Therefore, and this reflects the strong recovery that Mark's been talking about in half year two, but also our confidence for the future. We're very pleased to be able to propose a final dividend of 1.6p for financial year 2021. And we do still believe an appropriate level of dividend cover is in the range of three to four times. However, it is worth noting that for the medium term, we are expecting to target payout at the top end of that range to allow us to progress with all our exciting organic growth, strategic investments and M and A ambitions.

25:57 And on that positive note, I will hand back over to Mark, who's going to talk you through our strategic update. That's great. Thank you, Claire. So, really, the next few slides will give you an update on strategy, but also share our aspiration of what this could actually lead to. As Claire has mentioned beforehand, we've been investing for future growth, really, over the last five years with the sole ambition to become a much bigger, more profitable company. And as you can see in those boxes there, by having a more sector focused approach, as I mentioned earlier, we would expect organic revenue to exceed global GDP. With a dedicated M and A lead that we now have in place, we hope to see more acquisitions come on board. And by enhancing capacity at both our manufacturing and distribution sites, such as Hungary and that's in PTS that I mentioned earlier, It will support organic growth and margin enhancement.

26:54 Project Atlas will be implemented, and all of this will lead to margin improvements around the group. In addition, during the year, the board focused in great detail on its capital allocation policy with respect to organically working capital investments, capital CapEx and m and a as well as shareholder returns. And again, more of this can be found on page 48, I think it is, of the annual report, as we said, was released this week. The key focus of all this is to ensure we have an efficient balance sheet to provide the flexibility and capacity to support future investments and long term returns. However, as we get bigger, I do not want to lose sight of our culture, which, as Jonathan alluded to earlier, is really at the heart of everything we do and what makes TRIFAST so special, as some of you may already know. And

27:50 again, there's more on that in the appendices later on. So, moving on. The next few pages will give you an update on our strategic drivers, but I wanted to show that, really, sustainability and long term decision making has really always been embedded within the business and underpins the three key pillars you see there: investing for organic growth, acquisitions and innovation. Turning to sustainability. As we know, ESG is an absolute hot topic at the moment, and to be frank, and a really important one. I believe we've always punched above our weight in this and have got already a good foundation to work from.

28:35 Already, we've got some of the scores, as you can see there, AA from MSCI and Silver rating from EcoVadis. And if we look at the three key areas of ESG, environmental first and foremost, we already calculate greenhouse gas emissions and have shown reductions against previous targets. Going forward, we will expand on this further. We've had for many years the environmental ISO certification, 14001, and really one of the great things about FASTON is that really since taking on the mantle of driving the ESG, and I've only thought about this recently, is that they allow applications to be opened up for repair rather than being thrown away if faulty. And this really goes a long way in supporting a much more circular economy.

29:24 From a social perspective, we recognise that we need a skilled, dedicated workforce, as without them, we won't achieve the success that we want and have hinted earlier. We introduced last year a regular online cultural survey, which provides useful insight for us as a management team to take actions. We actually scored nine out of 10 from our employees for their commitment to the success of this company, which is absolutely incredible. 96% of respondents said they were satisfied as to how the group handled the COVID pandemic. That said, it is all about finding room for improvement, and one of those areas was around training and development, as last year, this was not as much as we wanted to. So this financial year, we are investing more into that area.

30:14 And then, finally, from a governance perspective, we are already in a good position and have the relevant framework, policies and governance in place to put us really along some of the larger mid cap sized companies. Looking ahead, we actually formed an ESG committee earlier in the year, which is chaired by myself, and also we have appointed an ESG advisor. Going forward, we will be working on other ESG platforms in endeavour to improve on those scores. Again, if you're interested, look at the website and the reports and accounts because there is a lot of detail put in there this year on sustainability. But by the end of this, by the end of November, we hope to be able to publish our first stand alone sustainability report.

31:04 Okay, moving on to innovation. With customers focusing more on the environment and new growth markets emerging, we're seeing an increasing need for our early engineering support. And how are we doing that? Direct contact with the customer, as I mentioned right at the very beginning, on new projects at the very start. Also, customer engineers are visiting our website as a font of knowledge. We have tens of thousands of engineering drawings there, which instigates dialogue with our sales and engineering teams. And then also, we have three technical centres around the world, one in The UK, one in Europe, and one in America. And this provides and is able to demonstrate with customers the value add initiatives that we can give them.

31:53 This engineering support is across all of the sectors, and if I can just run through a few of those in a moment. If we're looking at the health sector, this has enabled us with existing customers, but also with new customers, to get into things like the ventilators during last year, infusion pumps, hospital beds, and this whole new approach to cleaner air is leading to new air purifiers, fans, coolers, all of that good stuff, all of which is fastener rich. Then if we look at the home side of things, again, really with COVID, we saw an increase in the, for example, DIY power tool applications, and the purchase of home appliances, as I mentioned right at the very beginning.

32:40 With respect to light vehicles, we're now working with several new EV start ups, several new charging unit companies, and working with the existing companies on new EV platforms. And then when we turn to the heavy vehicles, more and more of these companies now are turning to environmentally friendly battery technology. Into example, buses and vans, particularly with online shopping increasing. You know, you look at Amazon and that last mile delivery, people want cleaner engines to be able to support that, and that is an area we are working with several new customers, global customers, on the battery technology there.

33:28 Then we're looking into the energy, tech and infrastructure sector. We're seeing an increase in the need for digital infrastructure. We saw a large increase in the second half of last year with our five gs customers, and this looks set to continue. And then, of course, there is the renewable energy customers to go after. Clare mentioned earlier about acquisitions. This is a key driver for us. It's never easy to predict as and when you find the right one, and we are choosy. But like organic sales, we're building a strong pipeline of opportunities to give us options. It's it's no secret that at the moment we're focusing more on The US to give us a more balanced geographical spread, but we won't discount other opportunities where there is a good strategic case to do so.

34:20 Paul is our new m and a lead, and he joined us in August last year. And, also, we appointed an external US adviser, which has been enormously useful to us. From this, we have seen a great number of good quality opportunities to review. And certainly, we hope by this time next year, we would have certainly acquired something. So, I'd like to now just hand over to Claire, who will give us an update on ATLAS. Thank you, Mark. Okay, let's talk about Project ATLAS. I'm sure some of you may already have heard the term, but Project Atlas is a hugely important part of our investment for growth strategy, as it's via this multi year investment into, as you see there, our IT business platforms, our underlying processes, our policies and our procedures that TRIFAST is going to become the fully integrated global player that really our multinational customers aren't demanding but are certainly looking for in order to support them on their growth journeys.

35:22 And one of the key things to note about Project Atlas is, as you see in the quote there on the left hand side of the page, the other thing is the medium term benefits case supporting this investment has also always been very compelling, with a return on investment of over 25% expected at the point of full realisation. And despite the bullet, you may have noticed right at the beginning of the presentation about us revisiting the budget of this, budget of Project Atlas. Very importantly, nothing I'm going to say today over the next couple of slides makes that statement and that ROI any less true. But, we turn on to the next slide, really, what a difference a global pandemic can make. At the end of financial year 2020, so the end of March last year, we were in a position where we had a system, it was designed, it was developed, it was tested, tested, it was ready to go and just really as COVID hit us.

36:20 We deferred for six months. We did sensible things with that time deferral, preparing for the ongoing rollout, but it wasn't until October 2020 that we were able to launch with successful on-site pilot in Ireland. And that pilot really was very successful with very few issues coming back, far less than you would normally expect at that point of a project. However, October 2020 was a very difficult time for us here in The UK and across many of our geographies around the world. And there was no doubt that ongoing travel restrictions have really had an impact on the speed with which we've been able to continue roll out. And this disruption, coupled with rapid returns in trading volumes that Mark has mentioned and all the associated pressures this has put on the underlying business operations, would have, if we'd left it unchecked, continued to push out the timeline.

37:11 And that makes no sense at all. As any timetable delays are only going to push that benefits case out and are only going to incur ongoing project costs for a longer period. So, over the second half of financial 2021, we've been revisiting our timetable and budget together in order to prioritise rollout speed over total costs and make sure that we can get this thing done. The end result of this has been an increase in the total budget to around £17,500,000 we were 15,000,000 before, with extra costs largely being focused on external training support to allow almost remote rollout at our overseas sites, at backfill resorts to allow us to accelerate the rollout time table for our main UK subsidiary for obvious travel reasons, which is also the biggest entity in the group, and further backfill costs across a number of sites to ensure that pre transition work can still be appropriately completed ahead of rollout without jeopardising our ability to support the rapid trade in recovery and growth that we're seeing across our business.

38:13 It's not all been about coping with COVID, we've also seen a number of successes that are worth shouting about. Obviously, the successful pilot in October 2020 that I mentioned earlier was a key point for the project, but we've also seen the successful rollout of our global talent management system to 16 of our locations and this has really helped to reinforce our care and support of our people in what have been quite exceptional times. And following on from Ireland, in June this year, we also successfully piloted our almost remote rollout process in Spain and as we speak to you today, we are now using that new process to roll out into our Dutch operations. With the new budget and with the COVID proofing work we've completed over the course of financial year 2021, we really do consider this project to be back on track.

39:01 Now, it's inevitably going to take us slightly longer and it's inevitably going to cost us slightly more than we originally planned, But this still remains a hugely exciting investment project for us and as it says there, one that will underpin our ongoing organic and acquisitive growth journey. And on that note, I will hand back over to Mark to summarise everything we've gone through this morning. Great, thanks Claire. So, hopefully you can see that last slide, really summarizes everything that we've said over the last forty odd minutes. To summarize, really, trading wise, we are pretty confident with the return on the top line growth with the opportunities and the pipeline wins that we've seen or secured in previous years.

39:46 But in the short term, we are going to be hampered to some extent by the supply chain pressures, as you've heard. The foundations that we've been investing in are now largely in place, and we really are very much looking forward to getting on and achieving those medium term aspirations. So, really, to summarise, I believe we're on the cusp of probably one of the most exciting times for TRIFAST in a really very long time. So with that, thank you very much. And there are a few questions. That's brilliant, Mark. Let me just jump in, just to give you a few moments, just and thank you to Claire and Jonathan and Mark for updating investors this morning. Could I please ask investors to continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the company take a few moments to review those investor questions submitted already, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard.

40:43 I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, you'll be redirected for the opportunity to provide feedback in order the company can better understand your views and expectations. Mark, Clare, Jonathan, obviously you can see in the Q and A tab there, Mark, that there's a number of questions that have come in from investors. Perhaps I could just hand back to you. If I could ask you to read out the question and perhaps give a response where it's appropriate to do so, and then I'll pick up from you at the end. Okay. Thank you very much, Mark. Can you hear me still okay? Sorry, Paris, can we have to put the videos back on? No, yeah, absolutely. Was a clink. And let me just make those cameras just slide. If you guys need the slides back up, please let me know. I'll now put your cameras into a better position. Thank you very much indeed.

41:28 Okay, that's great. Thanks again, Mark. So really the first question has come from Simon. How do you envisage your growth profile moving forward? Do you see it coming organically or through in M and A? I definitely, certainly in the early stages, it will be through the organic growth that we're seeing. But certainly, the hope is very much that it will become a very much balanced fiftyfifty growth, both from organic and from acquisitions, certainly as we get nearer to the medium term aspirations. The next question is from Ryan. Thank you, Ryan. Are there any new geographical regions you would like to target or invest further in?

42:14 At the moment, with the four regions that we've actually got, The UK, Europe, Asia and America, that really gives us enough firepower to support the multinational customers that we're actually seeing there. We're always on the lookout to see if there is if somebody wants to go somewhere else, maybe into South America or into Africa, but at the moment, we're concentrating purely on those four regions and we'll be investing into those regions accordingly. I think if we're looking at investing further into those regions, the idea we're looking at more in the medium term will be very much looking at onshoring, particularly into The US for manufacturing, and also looking into Europe as well, as we're trying to make less reliant, I guess, on the manufacturing in Asia. So that would be an area that we would be moving towards in the more medium term.

43:19 Thank you Ryan for that question. We've got one from Andy as well. Thanks for the update, very helpful. That's a nice start, thank you Andy. Are you seeing improvements in the efficiency of the supply chain? I think the answer to that is we will do, we will do. It's extraordinarily difficult at the moment with everything that is going on, with the lead time challenges, with the capacity constraints within the supply chain, to see efficiencies. This is a time period where it is about using the goodwill and the relationships that we've got with those key suppliers to keep things moving and to ensure that we can keep our customers supplied with the products that they need. So it's that kind of environment at the moment. Looking ahead though, there was a reason why we recruited our new global supply chain director and there is a reason we're putting Project Atlas in. There are many reasons for Project Atlas, but one of them is to look at how we can improve the efficiency of our supply chain, how we can use the data and the management information that will come out of a global IT system in order to better interact with our supplier base and to make better use, I guess, of our global economies of scale. So, have different conversations with them about pricing, about minimum order quantities, about how much stock may be held at their site rather than ours. A big part of Project Atlas and a big reason for getting our supply chain director on board was

44:50 to do exactly that. There are opportunities and we will be progressing with them as soon as we come out the other side of the current conditions. Thank you to all the investors that have taken time to submit questions. If any further ones do come in, as I say, I will make those available to management team and we'll publish responses on our platform. Perhaps therefore Mark, I know investor feedback is important to you and we'll shortly redirect investors to provide that. Perhaps I could just hand back to you, Mark, just for a few closing comments before doing so. No, that's great. And well, first and foremost, thank you all for taking the time to join us today. It really is very much appreciated. I hope you found it useful. There's a lot of information in there. But obviously, you want any more, please go to the website, look at the reporting account.

45:36 And more importantly, if anybody does want to contact us and want to know more about TR and TRIFAST, please contact us directly. We're more than welcome more than open to be able to tell you more. So thank you again, and, yeah, really appreciate the time. Thank you very much. Thanks all. Thank you very much indeed to Mark, Jonathan and Claire from TRIFAST. 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? This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of TRIFAST PLC, we'd like to thank you for attending today's presentation. That now concludes today's session and good morning to you all. Claire, thank you very much indeed and also to Mark and Jonathan. I think that's you've addressed the questions that have come in from investors.

46:51 I'm mindful, sorry, not to hold you on forever, but if any other questions do come through, obviously, we'll make those available to you.