Van Elle Holdings (LSE:VANL) — Review of Interim Results and Prospects

0:01 Good afternoon, ladies and gentlemen, and welcome to the VAN ELLE results presentation. Before we begin, we would like to submit the following poll, which you will see on your screens. Throughout this presentation, investors will be in listen only mode. However, questions are encouraged and can be submitted at any time via the q and a tab situated on the right hand corner of your screen or if anyone has dialed in via vanel@walbrookpr.com. The company may not be able to answer every question it receives during the presentation. However, the company will review all questions submitted today and publish responses where appropriate. These will be available via your Investor Meet company dashboard. Finally, we would like to remind you that this presentation is being recorded. I would now like to hand you over to Chief Executive, Mark Cutler and Chief Financial Officer, Graham Campbell.

0:50 Thank you very much. Good afternoon, everyone. Hope you're all well. Just a quick initial overview of our results. Hopefully, you've all had a chance to read some of the narrative this morning, but just a few summary bullet points. Still quite subdued market conditions, but I I think in a nutshell, some early signs of of improvement and recovery, which I know has been a message that we've been been looking to to to say for for a while. But the period in question, we've seen, you know, still delays and uncertainties in most of our markets. And in particular, the Building Safety Act has has continued to impact on tour residential development. So our our London business, Rock and Alluvium, is still still loss making in the period.

1:44 In other areas, as we'll come on to it a bit more detail, we're we're seeing some some indications of of of improvement, and our revenues are up, of course, a little bit. We disposed of the Canadian subsidiary just after the period end in December. We'd hoped to do it by by by the half year, but we didn't quite manage it. It proved to be a slower process than we we had anticipated, which I think it it summarizes our Canadian experience, in in one sentence. But we've agreed, and I'm happy to take questions on this, a, a partnering relationship with the new owners that allow us to focus on the technical expertise that we can still provide with some excellent opportunities, albeit, of course, very mindful that these delays have really hurt us, but we don't have any exposure at all now in that respect. But still got a lot of value to add, hopefully, with some some opportunity over there on a consultancy basis.

2:43 So revenue's up a bit. We'll talk through where that's come from. Margin's down a little bit, but temporarily, we don't see this as as anything to worry about. There are some explanations for this later on that we'll we'll talk through. We're still very much on track for the 6% margin target that we've laid out before. We've got more confidence on that than than ever looking looking towards really f y '28 for that, and we'll explain where that's coming from. And we've also got a rookie plan and and a set of initiatives that we'd like to talk through as well, Again, aiming towards 15% plus in terms of medium term targets. We should we should easily achieve that by FY '28.

3:30 Order books up slightly. Nothing really too earth shattering in that, but remember, we don't include the revenues that are coming through, in frameworks. And we're more confident than ever of the framework revenues that we're seeing because the nature of those frameworks is now strategically much more embedded and aligned. And and in some cases, we are the sole provider. So visibility of that work is increasing all the time. I think for our next report, we're gonna start reporting what that visibility looks like, that we have workload in frameworks because I think it's gonna be quite material over and above, solely the order book, which is secured call off orders or contracts on a stand alone basis. Balance sheet is still strong, and, a note there on the dividend, is in line with with what we've we've done previously.

4:25 Thanks, Mark. I'll talk through the financials, and some of the highlights on the, on the results in the six months to the end of October. The first slide is just a quick summary of the markets across we operate, as you know, if you joined these calls before, across residential, infrastructure, and regional construction markets. Historically, we've seen around about 40% resi, 40% infrastructure, and 20% regional construction. You can see here the infrastructure is starting to grow as a percentage of our overall business, and this is really what we'd hoped as part of our core strategy as we see growth into energy and and water sectors. And that that's interesting because, typically, that's the niche skill set, high growth areas where we achieve, good margins from from works in those areas.

5:15 On the residential side, we've seen that's declined to 32%. That's primarily around house builder confidence. So on on new build residential, low rise housing Markets are relatively subdued. We've seen some increases in activity, some increases in inquiry and orders, but not really a sustained growth through the period. Just little pockets of growth. And of course, we've got the building safety act, delays on the high rise, particularly impacting, the London market. So those delays have again, of course, to some subdued revenues in those areas. Regional construction, we've got the first large contract for quite some time for a couple of years.

6:03 In fact, the Sheffields Forge Masters where we've been very active during the first half, and that that project's gone very well closing in the completion. So that's that's bolstered revenues in the, in the regional construction sector. In terms of the p and l for the period, I'll just pull out a couple of highlights here. But broadly, profit before tax is very slightly down on the, on the prior comparative period. Healthy growth in revenue at 16%. Mark touched on the margin and sort of explained some of the some of the variances there. Really, there's there's three key points here. One is that transport has moved from where we've had overhead transport costs. So this is unutilized costs in transport. That's now because we've outsourced our transport division. That's now all being coded into jobs.

6:53 So it's all within gross margin. So no impact on the group numbers overall, but there is a decrease of about 1% of the gross margin and then a commensurate reduction in the in the admin costs. Think post HS two, we've seen some pretty price competitive tendering out there, working hard to win to win work, and we've been reasonably successful there. But there have been you know, there has been downward pressure on on some of the gross margins. And we've got one challenging job where we've taken a prudent position within our general piling division. Not particularly unusual that we have, you know, we have challenging jobs moving complex ground conditions, for example. But, again, taking, you know depending on the position we take at the half year end, that has brought the blended average down. Again, as a business, we very rarely, have loss making jobs.

7:47 This is just a sort of blended average pulling, pulling margins down overall. Jumping through to the divisions. I mean, the key story here is, clearly, you can see I'll start with the middle box, specialist piling and rail, where we've seen operating profit improvement. We've got an increase in the revenue there that's supported by two things, in particular, Albion, which we acquired in October 2024. So there's a full six months of revenue built in there and reported within our specialist piling division. And we've also got a some growth in our design capability. We set up designers as sort of separate internal division where there's a lot of opportunity there, particularly in in energy.

8:34 And so a lot of that design work has been reported within specialist piling. That's coming through at good, strong, high margins. And so overall, period on period, that's a a positive movement we've seen within the division. This is the area where we are gonna see most of our energy and water opportunities coming through. So we do expect it to be even more opportunity as we move forward into into the medium term. Looking to the left, general piling, as I mentioned, some pricing, competitive pricing pressures there, a reasonably challenging contract causing some some downward pressure on mix. But overall, the revenues have improved. We just haven't quite got back to the to the level of return that we had in previous year. So I think as as we get moving to the second half, we should see some more positive margin opportunities coming through there. We can hold the revenues, there's certainly strong potential there within general planning, which is bedrock of of the business.

9:29 In grand engineering services on the right hand side, for those who've watched these presentations before, that's 80% of the revenues come from our housing division delivering SmartFoot and and and associated piling, and of around about 20% comes from our ground investigation business, Strata Geotechnics. What we've seen here is a broadly flat performance year on year. As I mentioned, housing market remains subdued. Building safety app continues to impact, but importantly, Strata is starting to see some early progress, particularly north of the border in Scotland, on on energy sector works where we're getting very active now in in design and then that that subsequently moving into, in in GI as well. So, positive moves and good visibility, in GI as we look forward into the medium term, particularly in Scotland.

10:22 Balance sheets, not too many points to make here. We've had a strong investment in in capital in the period, a number of new rigs arriving into the business to support future workload. But the net CapEx is relatively low because we outsourced as as we announced during the period, we outsourced our transport division. And so whilst there's 5,500,000 of outgoing CapEx spend, we, recovered 3,000,000 from the disposal, of the HGV fleet and and subsequent outsourcing. So broadly, broadly sensible, movement on on fixed assets. In net working capital, you see a slight improvement, so declining working capital. We've touched on this before in previous presentations.

11:09 We had a review performed by HMRC around our r and d tax claim that took nine months to conclude. That was concluded successfully. And while it sat as a as a debtor at the period end, the last financial year end, that's now been closed out and paid in full. So we're sort of back to, if you like, normalized levels of of net working capital. In terms of the rest of the balance sheet, assets held for sale, you'll see at the end of last year, we had 5,600,000. That's a combination of our Canada business along with the, we've taken the decision at the year end to outsource the, the transport fleet. So as we sit at the half year end, the current reporting end period, the transport fleet has been disposed off, and the Canada that so what remains there is the Canadian assets.

11:58 And, of course, as we've said, subsequently disposed off in December 2025. So that will drop off by the time we get to the end of the end of the reporting period, the end of the financial year. So remains a strong balance sheet. We've got a healthy cash position, very low debt, and a renegotiated facility with Lloyd's. Our previous financier ABN AMRO pulled out of the market, for asset based lending, and we've now, agreed a 10,000,000 HP facility with with Lloyd's, of which two about 2,500,000 is utilized. So we've got another 7,600,000 of available headroom there for purchase of new assets. The cash flow slide just bridges from opening to closing cash. I've touched on all of the key movements there, really.

12:45 The big ones are, obviously, a healthy operating cash flow. The net CapEx we've touched on, the only one I haven't really mentioned is is dividend, and we've continued with the full year dividend, which was paid in October. So cash outflow during the period. And couple of new slides, to come. We've set out here, excuse me, the revised strategy. So our strategic plans were set in f in in 2019, and and this is really restating things as they currently start. Yeah. So this is restating our strategic objectives really on a on a just a simple slide.

13:35 So organic growth in our core markets, is effectively, you know, infrastructure and building and and residential markets as as we've always traded. We see recovery in all those in all those areas to some degree. We'll come on and show where those where those opportunities are. But transformational growth in the energy sector, we're gonna create a new division to, deliver that. And we've set some, targets here. We think these are quite prudent, based on, identified schemes that are, if not already locked into frameworks, in negotiation to be locked into frameworks to deliver 40,000,000 per annum of new revenues over and above the aforementioned box by FY twenty eight. And and don't forget, these are upper end margins, primarily delivered by our specialist piling division as it as it looks today, but we're gonna replicate that with a new energy division with a dedicated team.

14:38 A range of ROCE improvements that go hand in hand with that, which we'll touch on in a minute, take us, comfortably to our 15% ROCE target by by the same, time frame. And then, you know, the long the long talked about margin improvement to 6%, which I I I know we keep threatening to do and and don't really sort of make enough progress. We can absolutely now see, the the glide path to that by FY twenty eight from the work mix that is now emerging and the operational leverage that will come with the top line growth as well because we don't really need to do anything to grow our overheads to support it. That structure is all in place. And we'll continue to be very interested in selective bolt on m and a. I mean, we do look at targets all the time.

15:27 We don't often find something that attracts our attention, but we're pleased enough with what we've done. If we find something else in perhaps areas like design or civils, which complement our growth in energy in particular, then we're we're certainly quite interested. So we're keeping an eye on that as well. All of those in the round take us to the medium term targets that we've laid out previously. And this slide just, summarizes really how the market growth is going to be delivered. It's what we see today and what we've got a pretty reasonable level of confidence will come in the future. We might not get the timing perfectly right. It's very difficult to be certain how quickly some of these markets will recover or or stabilize, or in the case of highways, not not really go very very far from here onwards, unfortunately. It's been always been such an important part of our business, and you could say the same for rail, which we see as being, you know, pretty pretty stable.

16:28 Unfortunately, it's not gonna deliver much growth outside of the outside of the c p seven sort of slight improvements that we could see coming. But the big story is is energy. And there's a few words on this slide to explain the quite steep trajectory that you see on those first on that first cluster of bars. We're we're we've already got locked in this year now 20,000,000 of revenues, we believe, for FY '26, up from 7,000,000 last year. So the the the sort of momentum is underway. The 40,000,000 that we've talked about by FY twenty eight is on the prudent side, for certain. We've there's a great opportunity to do quite a bit more than that.

17:16 But, of course, at the moment, whilst we're still negotiating frameworks and kind of this this movement in terms of when some of these projects start, we're we're we're just gonna be a little bit careful, but we'll update this, every period end. But it's it's it's moving upwards, not downwards so far in the assessments that we we revisit every time we get together on the energy sector. And there's more to come there. So once the big hydro scheme start, which I mentioned on the on the following slide, there's there's, you know, some big big stuff to be delivered, particularly with the help of our friends in Albion based in Stirling. And the reason that we're in a strong position here is not just the relationships, but that is very important. It's the holistic end to end capability that we've got, which is a unique differentiator.

18:03 This grand investigation to design to delivery and all of the techniques and delivery that only we can offer, including, very importantly, ScrewFast, which is the off-site modular system, and the ability to deliver the ancillary and civil engineering works, which we've created a team to focus on as well, is is, is unique in the industry. I'm sure people will copy it. But, so far, it's very much what our customers are looking for, and the frameworks are being designed around that, package offering, with with us. In water, we can see similar trends, but the scale is smaller. And although AMP eight is big numbers compared to AMP seven, and by the way, AMP nine is is expected to be considerably bigger than than AMP eight, I've seen numbers that are seen growth of another 30 or 40% in AMP nine.

18:57 And we're going here with embedded aligned partners such as Ganifred and Volkers and Costain and Kia. The the projects are smaller, so the intensity is not so great. It's a bit more fragmented. And there are delays getting unpaid going because there are more affordability challenges than are in energy at the moment where it's very much a, can we get it done? Is there enough resource? It's not quite the same in water at the moment, but we're pretty confident that it will, you know, make make good progress from here onwards. I suspect these numbers, which we don't show numbers on on that second batch of of of lines, is is on the low side, but we're we're we're seeing progress, and we're we're pretty pleased that it's gonna be an important growth area for us. Rail is is is steady.

19:44 We'll make the most of what's what's to be done in CP seven. Transpent and route upgrade will finish in the the next eighteen months to to two years. And we're we're looking at opportunities in Ireland with our existing mature customers such as Amy and Balfour Beatty, but we'll do so cautiously. Otherwise, we'll make the most of what's available in The UK, but but there isn't quite enough in The UK really to sustain the ambitions that we've got, which is why we went to Canada in the first place. But I think we can focus all of our efforts on on what you're seeing here in The UK, and still achieve some exciting outcomes. Housing is coming. Very, very slow progress on normal housing. Our SmartFoot system and all the rest of it is there ready to do some quite exciting numbers when volumes pick up, but we don't think we'll see those sorts of volumes until at least next year. And that's just to get us back to 2022, 20 '3 levels where we've been underbuilding in The UK for a long time. So that's nothing exciting, but it does deliver an impactful set of of numbers within the business.

20:52 To get beyond that is is is very tantalizing, but with no signs of that just yet. But we're moving forwards. House builders are showing signs of opening bigger sites, with a bit more confidence. But the Building Safety Act is also unlocking as well. And we've mentioned in our results, you know, we've seen a fourfold increase in gateway to approvals. That's quite meaningful for us because it's been a nightmare for two years. And and so ROCK and ILUVIUM, our London business, should stop losing money by q four, which will be quite a quite an important milestone, and that gives us it will give us then a lot of confidence that we we won't have that dragging on our results going forward into FY twenty seven. And there is quite a lot going on in the wider industrial and public building markets, but, we could spend all afternoon talking about the individual details.

21:45 But across manufacturing, data centers, warehouses, and public build programs, particularly prisons and schools, There's still quite a lot going on, but it is a competitive part of the market. This is where most of our lower barrier to entry competitors will be, you know, nipping at our heels. So we're trying to do this more in relationships and partnerships with customers rather than just bidding for the sake of it. And we're having some success in those areas and some partnerships that we're working on. We know about Gallifers. We've also got Kia and Waits where we're we're developing important partnering arrangements, McLoughlin Harvey, another one. And we're gonna keep plugging away at those customer led, growth initiatives rather than, just, you know, try and be more bit more selective.

22:41 This slide, I probably have said everything I need to say on this slide. This is just a a more detailed look at the energy sector, but I think I've covered all the key points already, if I'm honest. Let me touch on our ROCE improvement plan. So this was one of the pillars of the strategy that we just set out. And, really, this is just a quick summary of some of the actions that we've taken and continue to take, recognizing that the business is a capital intensive business, carrying a lot of assets. So ROCE is a key absolutely key metric for our business. What have we done in terms of the asset base? Well, last year, we disposed of surplus property assets. We disposed of our old head office and a plot of land, that was being underutilized. As I mentioned, we outsourced the transport fleet, during, the current period, so May 2025.

23:35 We're constantly now looking at our underutilized rigs and equipment and making sure that where possible, where they're not required, if there's an opportunity to sell them, and and if they're only being used on a very low basis lease back, that is that is an option. And we've got around 20 rigs that we're looking to to offload historically, and now we we would like to sell them outside of The UK so they're not remaining and competing against us because they're they're still reasonable quality assets. It's just not necessarily generating the return that we would like. As we mentioned, disposal of the Canada operation in December, that's taken a chunk off the balance sheet, about 2,500,000 of of assets that were were held for sale. And importantly, when we're looking at investing in in new rigs, we we're making sure that, we're not investing in anything anywhere near less than 25% of return on capital, and and normally, we see significantly higher forecast returns, on our new on our new rig purchases.

24:37 We've touched quite a bit on energy and water, which we're very excited about as two two sectors. Importantly there, the average rig acquisition cost is not is not as large as some of those very big general pilot rigs, which which can cost well in excess of a million pounds. These are the sorts of rigs that we will need to deliver these works. We will need to buy more, but but, typically, they're not very expensive rigs. We're talking more like sort of, between 0.25 and £500,000 per rig, rather than the very large stuff that we've acquired, over the, over recent years. Of course, we're heavily focused on profit and margin improvement. The mix is a key factor in energy and water. We, you know, higher technical skill set, and therefore, we expect to deliver normal infrastructure margins just sort of, healthy and at the upper end of our of our normalized range.

25:32 Operational leverage as, as residential comes back, as as the market volumes come back, we were sort of at the modestly profitable part of the business. As soon as volumes come back, do expect, that leverage to improve. The design capability that we now have in the business, no capital, of course, required, but but generating, operating margins for the business. And, of course, as you would expect any business to be doing, we're looking at cost reductions and, and efficiency improvements on a on a consistent basis where we can deliver more effectively. And, I mean, that final slide is a summary really of everything we've just said. We're we're cautiously optimistic in terms of the outlook ahead. Current trading is not easy yet.

26:20 You know, I think we're we're doing okay in the circumstances, but we can certainly see some green shoots coming through. And, you know, looking ahead to f y '27 now, we're we're we're quite excited by, you know, the the projections that we have. And there's a few points there that summarize pretty much what we've just been talking about. So I don't think there's anything more I need to to cover in terms of slides. Thank you, Mark and Graham. Now if we could turn to the questions. We've had a number of questions that were submitted ahead of the presentation. However, please continue to to submit your questions using the q and a tab situated on the right hand column of your screen. Now there's been a number of questions and a number of sort of crossover with some of these with a few themes of note, and you have touched on some of the answers already.

27:10 But the key one has been talking to the margins and the sort of revenue mix. You have of touched on how that's moving, but is there any more color you can provide as to sort of time scale and sort of how the revenues might sort of sort of change from this year to next year? Well, I think the areas that we expect to see growth in for the first time, we're getting the right balance of mix. The opportunity for if just going back to the slide that Mark presented on the growth opportunities in each of our sectors. The the real potential here is energy and a steady growth in water where we expect to achieve solid returns.

27:58 It is inevitable that if the residential market comes back and and it and it will do, it's just a case of timing, that that historically is high return on capital but lower operating margins because we're just highly competitive in competing against traditional foundation techniques. But I think as as I mentioned on the the broad three streams three sectors that we work in, I think as that infrastructure proportion increases and we see higher volumes in there, then I think we'll start to get towards the 6% operating margin and the 15 to 20% return on capital that we've committed to in our strategy. Overall, timing is very difficult to predict. Think on residential, house builders are still fairly subdued, but we are starting to see some early positive signs, particularly in the high rise stuff with the Building Safety Act.

28:54 I think on energy and water, the spend is more committed. We're not necessarily reliant upon government spending. It's the likes of you and I who are paying our energy and water bills that will fund that work. So I I think that will happen. And the fact that we're into deep into design and ground investigation phases already is a very positive sign that the work is likely to flow from here. Great. Thank you. Do you see potential in the European energy market for VAN ELLE, similar grid infrastructure? Or are you feeling the pain from the Canadian adventures? No. We've got no strategic intent to look at the European energy market, I'm afraid. Okay. And you talked about potential M and A activity.

29:42 Is there anything on the horizon? Assume it would be sort of small bolt ons of anything, but just to understand a bit more about the strategy there. Yeah. Nothing nothing much more to add to to what I said earlier. It would be selective bolt ons. The obvious areas for us would be a civil engineering capability to accelerate the the the the growth that we have started with our own team internally, but we don't have national reach or or or depth of capability or or resources just yet in this area. And this is because customers are increasingly interested in the packaging of geotechnical foundations work with with adjacent civil engineering works. Not big civils.

30:29 This is all little civils, but it makes sense. And and there's nobody that is able to do both in a in a in a an expert way. And the other area that we're keen to explore further is design. So we are at the moment delivering a lot of design work with a very small VAN ELLE team and a very embedded close partner that is is is is fine for now, but we perhaps need to bolster that capability with with, you know, potential bolt on if we can find the right sort of organization. And what we find with design is it opens up doors into into other markets, and and it's a fantastic business development and way of winning work because you're you're almost designing your own order book.

31:17 So it works very well. It's taken us a while to sort of build this up to this position, but we're seeing energy and water. There's a big demand for this. So those are two areas I would look at most closely. Okay. Thank you. And John C has asked, you mentioned the national skill shortage in energy. Is labor availability a constraint on growth? Do you currently have sufficient capacity to execute on the opportunity set that you see? So I think what I said in energy is that there is a part of the the speed at which these frameworks are getting put into place and the fact that embedded frameworks with the supply chain are being put in place at all is to secure the resource.

32:02 And that's right because the, you know, the energy companies themselves are worried about is there enough capacity in the industry to deliver everything that's got to be done. So you're you're right. Resource is a a real focal point. This is why we bought Albion Drilling last year because this is a Scottish based business with with resources and the ability to recruit locally on top of that rather than relying on resources being sort of commuting up two weeks at a time from the Midlands and the North Of England to to deliver these projects. But having said that, there's still going to be a real need to train and bring young people into the industry to deliver these big projects across the Highlands Of Scotland. The part of the answer to this is to develop solutions that are less labor intensive in their delivery, which is where some of our techniques around off-site manufacture come into play, the ScrewFire system, for example, where we can, and our customers get this.

33:02 But it's not applicable everywhere. Having said that, you know, there's still going to be a need for us to train and develop, you know, a whole new additional workforce here rather than just rely on people traveling. Okay. Thank you. Turning to Canada. Someone's asked Gavin L has asked, how are you going to get paid for your Canada work? Well, we will with what we've agreed in the in the purchase agreement is that we will provide technical support for the geotechnical foundations works that the new owner undertake with the business they've acquired and their own business more widely, we will agree and have agreed a consultancy agreement for for those arrangements that has different different terms according to the the situation.

33:54 But our people will be paid for effectively, and then we will have a fee sharing arrangement for the, in particular, the big schemes that we went to mobilize in the first place and the frameworks that we've created. We will have a fee sharing arrangement as as the work is delivered. Thank you. And I guess there's some sort of a broader picture here. Someone's asked, what is your competitive advantage? Why do you think this will endure over time? I think we've got different competitive advantages in different sectors. We are a very broad, multi skilled business, more than just a piling contractor. And and even our customers are are are starting to repeat this back to me now.

34:40 We presented to the VOLCA Fitzpatrick leadership team a couple of weeks ago, and they were astonished by the capabilities in the group and how unique they are compared to anyone else they've ever seen as a part of the wider VOLCA trading agreement we've put in place. And that and they were spot on, you know, the breadth of capability, the end to end integrated service offering that we have, and we've mentioned it a few times, is is unique. And what makes us even more unique is the sector expertise that we've got in the particularly the sort of highly regulated infrastructure sectors that we've we've talked about and and scale And the customer relationships that we have and the collaborative culture that we have and the financial strength that we have, these are all the things that differentiate us.

35:30 We're independent of a tier one contractor, so we don't have a paymaster that's got its own agenda. You know, there's quite a few things that differentiate us in different in different ways. And we've got some unique capabilities that nobody else has got. We specialize in modern methods of construction in in SmartFoot and ScrewFast, which nobody else has in the same in the same way. We've got engineering expertise in rail and and and the like that nobody else can compete with. So we've got all sorts of technical advancements as well that we've created. That's why our our debt claim is is is quite healthy every year because we're big innovators, very technically adept organization. I hope that hopefully, summarizes a few. Perfect. Thank you. We've got Michael j asks, what's the approach to cost efficiencies?

36:23 Well, it it it's it's it's a combination of a lot of things with a as you would as you would hope, a business of our scale would have a lot of project initiatives underway. It it it's about it's about making sure we've got the right fleet, the right rigs, the the highly utilized ones with the highest returns. It's about looking at back office and making sure that we have got improving systems. We're moving our eVision system, which is Microsoft Dynamics into the cloud that'll deliver better ways of reporting, tracking how the business is performing. In the next month, we'll be launching a new HR system, which will have potential to help us to make sure that onboarding is is more efficient. It'll also have the capability to automate time sheets, which at the moment is is a is a is a well controlled process, but it is far too manual.

37:16 And there's great deal of potential there. And it's making sure we've got the right people in the right seats in each of our departments. So quite a lot of project initiatives underway right across the across the group, but there's a a just a couple of examples there of things we're working on right now. Great. Thank you. As as mentioned, there's been quite a lot of crossover on a lot of the questions that have come through, but perhaps this one sort of provides the opportunity for an overarching sort of strategy here. It's what is the long term value creation story from here, and how do you maximize shareholder value? Cool. I I feel like we've answered that in the slides. I hope we have and some of the answers already. Is there anything to add? I think we've talked about the key end markets that we're focusing on. I I I think I hope we've given an answer in terms of why we're focusing on those with the the the level of commitment that we see and the and the potential and the margins that they can deliver and why we're why we are particularly well positioned to to deliver on that potential.

38:27 And and I think the key slide there is the is the resetting of the strategic pillars. Those sort of five boxes are really how we've how why we think we will be able to, you know, generate shareholder returns. Yeah. Mhmm. And and I guess slightly along that that theme, but someone 's asked, what are the key advantages of remaining an independent specialist piling company in The UK against being integrated into in a large construction group? Well, there's pros and cons, I guess. I mean, I'm I'm often envious of the amount of work that's handed on a plate to some of our competitors from their parent. I won't name any names now, but I've long been frustrated by how anticompetitive that can be sometimes on publicly procured projects.

39:20 I should write a book on this one day. It must be nice to be handed 70 or 80% of your work just like that rather than compete for everything as we do. And I'm very proud of the way we compete, and we're so dynamic and innovative as I mentioned earlier. But, of course, there are costs to being independent, and there's there's there are lack of synergies and efficiencies that you might create as being part of a bigger entity. But we are we are who we are, and we're, you know, we're we're hopefully making good progress, you know, in that. Great. Thank you. I think, actually, we've covered pretty much most of the the questions off now. As I said, there was an element of crossover, so I will sort of start wrapping up. So thank you both.

40:06 Could I now ask investors not to close the session as you will now be automatically redirected for the opportunity to provide your feedback? If anyone has further questions or would like additional information on VAN ELLE, please do get in contact via VAN ELLE at WALBROOK PR dot com. Many thanks for attending today's presentation, and please, as I said, do sort of contact us directly. But I think that wraps it up for now.