Velocity Composites (LSE:VEL) — Preliminary Results

0:01 Good morning, ladies and gentlemen, and welcome to the VELOCITY COMPOSITES PLC Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Please just simply type in your question at any time and press send. The company may not be in a position to answer every question that received during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin,

0:32 I would like to submit the following poll. And if you'd give that your kind attention, I'm sure the company will be most grateful. I would now like to hand you over to Andy Beeden, nonexecutive chairman, and good morning to the rest of the team. Good morning, everyone. Welcome to our investor presentation for January 2022. With me, I have John Bridges, our CEO, and Chris Williams, our CFO. I'm gonna take you through a short summary, and I'll pass you over to John, who's gonna do a deeper dive on the long term market opportunities and strategy. And then Chris is going to walk you through the current numbers which have been published. Thank you. And next slide. So one of the key messages, really, is from a strategic point of view.

1:25 In the last twelve months, we've renewed all our major contracts, something that we've explained before. But one of the fundamental important factors of that is that the velocity strategy around growth is about building growth through our current relationships and establishing ourselves initially in The UK, which is what we've done. And then through those customer contracts and relationships, being able to break out into markets which are actually much larger like The States and Europe and Asia versus just The UK on its own. The in doing that, we have, in the last two years, also focused on some key areas which improve our proposition ultimately to the customers as well as you'll see our own operational efficiency.

2:17 That is a rework of our own operational cost base, investments in our technology, development of our services around supply chain management, and in all those things, pulling them together into one overall package for customers. And the fact that customers have renewed those long term contracts in The UK who have been seeing visibly the benefits of our services in what's been a difficult time. And those benefits reducing material cost, reducing inventory, cash costs, and improving quality within the front end of their own manufacturing processes has given us actually a stronger position in in what we believe now as we look forward in what is an expanding market again on a global basis.

3:13 John, do wanna pass the next slide?

3:18 So in terms, again, of the year just reported, key messages are all major contracts renewed. We are winning some new business, and we have been held back through COVID stopping us being able to go, for example, to The States where we have been started on new projects. We are now back in The States on the ground and working on some significant opportunities with customers that we've known for quite some time and already transact within The UK. Some of those customers in The UK are also looking at expanding their use of our technology in The UK and Europe as well. And one of the elements that you see is, yes, our results are down. They're suppressed because the underlying contract volumes are down.

4:08 But as we move forward, we are diversifying out of the civil aerospace into defense and ultimately into non aerospace applications as well. And that will be a trend that we expect to see as we expand on a global basis.

4:23 In terms of outlook, there was a very strong positive long term outlook for the use of composites in the aerospace industry and the use of our technology outside the aerospace industry as well. Some of the key factors that, you know, are relevant today, which maybe weren't as relevant maybe even two or three years ago, is the key agenda around sustainability. And this doesn't just mean the use of composites as ever increasing amounts on current aircraft to take out, weight and improve fuel efficiency. But also, there is an agenda in terms of eliminating waste within the manufacturing supply chain.

5:10 And you'll see that reported within our our customers' own, comments and accounts, and ultimately Airbus and Boeing, explaining how they want to see those trends strengthened over the next couple of years. Things like COP twenty six, COP twenty seven coming up, all these areas are pushing in the same direction and helping the agenda and the growth path for the use of composites over the next few years. One of the, elements of COVID, which is important to explain, is that, yes, a lot of aircraft, ended up on the ground. What has happened is airline have actually decommissioned older aircraft, and their plan is then as things return back to normal and hopefully into a growth phase, they will be replaced with new aircraft, which have a higher level of of composite content.

6:08 And that means that that long term opportunity for our technology and its use in the industry has strengthened, not weakened, as we come out of this difficult period. And I'll pass you over to John, who's gonna do a deeper dive on that market outlook. Thanks, Andy. Good morning, everyone. If you just wanna pick up on this slide really to sort of show and explain what sort of underpinning the this sort of rate reduction and recovery, of course. So this is data taken straight out of the Airbus global market forecast. And as as we've talked previously, both Airbus and Boeing published very detailed documents normally, you know, normally on an annual basis. So we've got links to those in the annual report.

6:58 But you can see what ultimately what underpins everything is is air travel. And this really shows the immediate impact of, you know, of COVID on on air travel, global air travel in revenue passenger kilometers. And you see a huge reduction initially, recovery to a to a degree. And for the first time now, we're actually seeing a recovery corridor being published which sort of shows our path back up to pre pandemic levels. And a couple of, obviously, interesting points here which link heavily to what we're doing is that, you know, you've got a a bit of a difference there in terms of that corridor and there's differences within those data from whether you're looking at single hour platforms, twin hour platforms, business jets, military, defense spending, etcetera. So all that is explained in detail in in those reports.

7:53 But we are looking to see 2023, 2024 as the the point where we take back over to air travel at around the sort of pre pandemic levels. As Andy touched on as well, you've seen the airlines go through this huge disruption as well as that sort of fleets were grounded. And through this pandemic, you've also probably read around, you know, the recapitalization of airlines and also as they've looked to, you know, save costs and retire their older fleet sooner. So, you know, some of the immediate obvious ones probably saw or read about a lot of reduction in thing platforms like the seven four seven, you know, for engines, you know, less efficient. So again, it's you know, the airlines as they come out of the pandemic are different in their in their capital structure, but also in the the fleets that they they're using.

8:46 And really, they're taking this opportunity, if that's the right word, to look at investing in a lot newer fleets, a lot more efficient and sustainable fleets. And, you know, two of the other factors of oil prices are reasonably high. So again, that, you know, helps the business case in terms of changing to newer aircraft. But also credit costs remain quite low for them to do that as well. So

9:13 ultimately here, what you see is a picture of recovery with airlines emerging from this in a, you know, a better capitalized structure, but also with much more newer fleets and much more clearer plans to transition to a a more sustainable fleet as everyone looks to achieve the sort of net zero agenda. On top of this, if we look at the fleet, what what does that makeup look like going forward? So the the the green boxes are the newer generation, the the aircraft that really contain the most composite and will contain the most composite going forward. And as you can see, pre COVID, the the share of the fleet was around 13% for those newer generation aircraft. And as we come out of COVID and into the recovery and growth, I guess, couple of headlines there, the fleet is scheduled to double in size over the next twenty years and the makeup within that fleet of more, you know, later generation, more composite aerostructure aircraft significantly increases as you can see there.

10:18 And the air platforms that we're involved in and our customers are involved in are highlighted there in blue. And you can see very well represented there and continue to expand across the sort of breadth the aerostructures in those programs. And the key drivers Andy mentioned there was around reducing weight, know, better, more efficient use of energy. And also the maintenance costs with composite structures is, you know, less with fewer, you know, maintenance cycles and issues around things like corrosion, etcetera. So again, double benefit there for end users. And also, as Andy mentioned, this is the strive to be more efficient in terms of energy use.

11:03 But within our customers, there's a huge drive to reduce the cost of manufacture with COMPOSITES. So again, this is where our technology supports that by removing waste from not only the supply chain, but also the manufacturing processes as well. So overall, with with the growth in the fleet, with the growth in higher composite split there, know, using the the airframe and the platforms, and also this desire for the whole industry to build back stronger post COVID with a more sustainable supply chain, we feel our technology, our processes and our services are very well positioned to take advantage of that.

11:47 On to the next slide, you know, we also talk a lot in our summary of 2021 really in the operational improvements that have taken place. Two reasons, clearly, one is obviously to to drive the performance of the the existing contracts and the existing business, but also to prepare the the business for the the recovery and to, you know, provide much better and more compelling bids into customers as we look to use that technology investment to drive not only the internal efficiency, but also the the business cases of new bids as well. So, you know, that's prove proven out, as you can see in Chris will take you through in a moment, in the numbers in terms of the breakeven position in the year, but also in in the sort of overall operational performance and also the the level of efficiencies that we're now seeing in new biz as we use that technology to drive even further efficiencies across the board.

12:50 Key marker, of course, will be the the level of gross margin, and as Chris will you through in detail, that's improved significantly. But also, as everyone starts to look beyond COVID and look sort of through the recovery, we've continued to invest in not only the technology, but also the people needed to position the company well through that recovery. And we've made some significant recruitment recruitment there in terms of the the operational performance of the team. And also a lot of training has gone on with more detail there in the the annual report around how we've utilized some UK sort of industry level funding to to drive some operational training improvements through the business in terms of lean manufacturing, policy deployment, and

13:40 the key activities there to again help position the company well. And then again, also Chris will take you into detail but still remains a very strong net cash positive position. So I think overall, you know, the teams worked very hard through the disruption and the the sort of the reductions in volumes brought about by COVID, you know, as of, you know, we've tried to assist our customers as well through the period. But overall, good improvement there in the the operational performance of the business. I'll hand you over now to Chris to take you through the financial summaries. Thanks, John, and good morning, everyone.

14:25 Just to take a few financial highlights for the year. On the left hand side there, can see a summary P and L for FY 'twenty one, FY 'twenty. As you can see, we've still got the COVID suppressed sales levels coming through.

14:46 For FY 'twenty, our sales were 9,800,000. But I think the key thing for on the sales side of things is there's been no customer losses over the whole COVID period, over the two years impacted to date. But probably more key is we have stabilized the sales base. Going back twelve months ago, we were seeing lots of volatility in the outlook and forecast that has stabilized and we have a lot more confidence with our outlook standing here today. From what we've done internally in response to that, so we've had a fairly relentless drive on margin throughout the period. You can see despite the suppressed sales, our gross profit is higher than it was last year and that's supported by a stronger margin.

15:35 The investment in our technology has helped to

15:38 drive this through both labor efficiencies, but probably most importantly, material efficiencies that customers benefit from as well as ourselves. And that's driven our gross margin up from 17% in FY 2020 to 26% in FY 2021. When we account for sales mix and a couple of small one off impact, we probably have an underlying gross margin of 24%. But compared to historic levels, which are typically maxed out to about 20%, 21%, we've managed to move the needle successfully on the gross margin. And then from an overhead perspective, we've seen the full year effect of the FY 2020 rightsizing efforts. So they're down GBP 1,600,000 to GBP 3,900,000 when you include the restructuring exceptionals in FY 2020.

16:31 So successfully managed to kind of see the right size through for the year.

16:36 And that puts us in a good position for future growth from our view in terms of operational gearing. Overall, those impacts have improved our operating loss to GBP 1,400,000 for FY 2021 and our EBITDA position from GBP 1,900,000 loss in FY 'twenty to GBP $05,000,000 loss in FY 'twenty one, the key being in the second half of the year, we successfully broke even at the EBITDA level in FY 2021. Next slide please, John. Thank you. From a just a couple of things to pull out from a cash and balance sheet perspective. So we've continued the cash focus throughout the year, but that hasn't let up. You can see our stock balance has reduced GBP 1,000,000.

17:28 That's despite sales run out being higher at the end of the year than it was at the start of the year. But we continue that drive with the targets of internal an internal target of stock turns of 10, we will get there over the next few months. But also supporting that has been the civils and asset refinancing facility that we implemented during the year, which has added a net GBP 600,000 benefit to the cash position. Overall, that cash has improved, looking on year on year, GBP 200,000 as a result of those two developments.

18:08 Next slide. And then finally, just to take a look at liquidity. So liquidity is still in a strong position. We're just shy of GBP 1,000,000 on our net cash position, which really puts us in a good place for the future growth to come. And then just a point to pull out on our EIS funds that were raised upon flotation. So they've been utilized during the year to support our R and D activities, the investments we've spoken about in technology, but also

18:41 helping us enable geographic expansion in the future as originally designed to do. So just in summary then, our performance greatly improved off the back of operational improvements and investment technology, cash in a good place and we're ready for the future growth and recovery. Thanks, Chris. Well, thank you, John and Chris. So just to really summarize before we go back into questions, key, contracts renewed. Major investment has continued in our digital offering and technologies.

19:26 That's been bought in by the customers.

19:30 There is a significant upside in demand from the current contracts and renewed interest in has been able to now transfer this technology to overseas in the same customer base. And with the green agenda and sustainability, there is an acceleration in the use of composites and newer aircraft being brought into the industry by the airline industry. So we believe we are well positioned for growth. Margin's up. Cash cash is strong. Net cash on the balance sheet. Gross cash, pounds 3,500,000,000. So, we'll now move on to questions.

20:16 John, Andy, Chris, that's perfect. And thank you very much for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions using the q and a tab that's just situated on the right hand corner of your screen. But just while the company take a few moments to review those questions submitted already, I would like to remind you the recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. John, Andy, Chris, we received a number of presubmitted questions from investors ahead of today's event. And if I may, I wanted to start off the q and a session with these. The first one reads as follows.

20:51 In September 2021, Braveheart Investment Group acquired 4.13% of the company, stating that this is an investment that fits well in its portfolio of advanced technology businesses. Do you see this acquisition as a vote of confidence for the company going forward? So I'll answer that. Yes. We do. We've met with Braveheart. They're a long term investor,

21:14 and they are highly supportive of our strategy. And, yes, we we see that as a very positive thing that people are investing here and looking at and this is the business, Braveheart, that invests in these type of of businesses which they see as underpinned by technology with significant growth opportunities.

21:41 That's great. The second question we have, from investors submitted ahead of today's event, reads as follows. The business is focused primarily on the aviation sector, which is recovering with Airbus, for example, delivering 611 aircraft in 2021. And the Airbus single aircraft family has a backlog of 6,314 aircraft. Are you geared up for dealing with the backlog on top of new orders?

22:05 And will will bad press, the 737 MAX received, impact the business? Okay. So I will answer that. So at the moment today, our civil aerospace exposure is nearly all in terms of Airbus. We do wanna expand into Boeing, and we have had some qualifications on the seven three seven MAX. But they due to its own problems, they have not materialized into any significant sales volumes for us. So at the moment, our focus in terms of opportunity on current contracts is it is with Airbus. Therefore, the fact that Airbus has that strong backlog, has that strong growth, It is doing better. The two OEMs at the moment is a benefit for us. In terms of this coping, absolutely.

22:57 Our one of our propositions is to help customers to manage increases in volumes and improve operational efficiency in the current plants and provide them with the ability to increase capacity in a very cost effective way because we

23:15 take control and manage for them the that front end of the composite manufacturing process, including using our own clean room technology, and that gives them the ability to focus in their their added value back end processes. So our proposition is always to to help customers which are looking to expand rapidly themselves. I think if I could just add in something else there, Andy. Yeah. I think the the the ratio between Airbus and Boeing is nothing other than geographical. The the processes, the materials, the technology, everything is perfectly well suited there for either end user.

24:01 And secondly, in terms of the, you know, dealing with the the recovery rates, I think with the exception of the the way the the market contracted at the onset of COVID, I think, you know, the industry we work in is very regulated. It's very well planned. It's very structured. And so any rate increases and recovery is is very well planned in with our customers. Because I think if you look at the part, the supply chain we work in, it's it's the perhaps the easiest bit, if you like, from their point of view. The, you know, the the supply chain itself can't, you know, double in size overnight or, you know, be subject to any large increases without the whole supply chain being geared up for it. So a lot of those sort of recovery activities and rate increases are very well planned in and cascading through the whole supply chain including our part of the the front end with composites.

24:56 That's great. Oh, sorry. Was there anything you wanted to add to That's good. So the last pre submitted question we have relates to composite construction. I know you've touched on this in the presentation, but if you could maybe provide some more color. The question reads as follows. Has the company considered venturing into supporting the manufacturing sector, particularly supercars, with their composite construction to supplement the aviation sector? So it's a very good question. Strategically, absolutely, we are looking to diversify the use of our technology. Currently, just absolutely currently, clearly, there is now growing and significant demand within our core initial sector, which is the aerospace market.

25:43 But we have continued to work with

25:50 clients and potential clients from other sectors and over the next couple of years, look to build out and start to develop that. We already do that to some extent, but it's not meaningful revenue at the moment. But it's definitely part of our long term strategy because our focus is on the technology and how that can help any business in any industry which is using these high value composite materials or similar types of materials in terms of their preparation in going into production and which is which reduce cost, improves inventory management, takes eliminates waste, and therefore is a a smart technology in terms of sustainability going forward.

26:42 Thank thank you very much for that. That concludes the pre submitted questions that we have here. Andy, John, Chris, as you can see, we received a number of questions throughout today's presentation as well. And thank you to all investors for submitting those. Can I please ask you to read out the questions and give responses where it's appropriate to do so? And then once you've done that, I will pick up from you at the end. Thank you. Okay. Well, thanks. So the first question is from Tim g, and it is a follow on really from what we've just been discussing, which is which is saying, what do you consider to be the three largest non aerospace opportunities? And would you expect any of these applications to exceed aerospace in terms of revenue in the next few years?

27:27 So I'd say in the next few years, no, I don't. But, there are some very significant, very large, opportunities which longer term can supplement and could, equal the size of aerospace. We've just mentioned around automotive. But a wider sort of area actually is the use of composites within various types of large ticket consumer products from, you areas that you see in the home and, you know, the use of composite materials. For example, you know, you see in flooring and other areas and in The States, in particular, you know, there are growing markets which are very significant in the use of carbon fiber applications.

28:22 And that is an area that we're very interested in getting into far more. It will take time, but again, our technology is being developed so it is very easily transferable. So it becomes a matter of marketing and business development. It will not really require us to invest heavily within the core technology itself. John, do you want to add anything to that on the strategic side? No. I think you could I think I guess the only other point is, you know, as we've talked previously, some of the best ways to exploit that is with our partners or even suppliers as well and utilize their already sort of sort of exposure into those different markets and to utilize their, you know, partnerships with those sort of people to aid entry into those markets without, as Andy said, going to enter them cold. So we are using partnerships and material suppliers to look at those.

29:25 Yeah. Thank you. So the next question is what would you say would be the trigger for the inflection point in your business? So I think we're at an inflection point, you know, the in terms of recovery. And I think that if you looked at those markets analysis, you know, there will be a steady recovery in 2022, but probably a much stronger one following on in 2023 with significant double digit growth in both years in, you know, underlying production levels in our core market. For us, the the major event that can happen is that we win new business, potentially with current customers, but on in larger non UK facilities.

30:21 And, for example, in The States or Europe or Asia, where you have some very large, facilities which are, focused and specialized within the aerospace industry and on their own, are much larger than, what you will see within The UK market itself. And so that is the one of the key near term prices that we, you know, aim to get to. And in doing that, would give us the opportunity of significantly rerating our our size as a business. Then despite that, though, there will be growth anyway within the contracts, and also there's incremental opportunities with new packages of work and new programs, closer to home in The UK, or or near side of Europe.

31:14 So the next question, is is the cash sufficient to fund the expected growth over the next few years as aircraft manufacturing increases? So in terms of our current contracts and what we expect to see, in terms of the core business, yes, you know, we have a means to fund that. And so the only challenge would be that major inflection point of massive upside in terms of volume and opportunity. That would be a fantastic problem to have, and as I said, would include a rerating of the size of the business anyway. But at that point, yes, there may need to be some additional capital coming in. In terms of where we are and the sort of organic growth within context of where our footprint today, you can see that we are well funded and have been well controlled from a cash management point of view.

32:15 Chris, do you want to add Yes. Just to add to that, Andy. Would we see that being a barrier to growth? Absolutely not. I think one of the benefits of kind of being in the sector we're in with the kind of long term contracts that we have and the visibility of demand if we can look forward, you know, one, two years to to plan ahead for these kind of things and the kind of pace of, you know, adopting new contracts and things gives us time to plan and cash manage. I think on top of that, we we are regularly kind of looking at that demand, analyzing it, sensitizing it. We're in a position now where we've never been leaner in terms of our working capital management and we plan to maintain that.

33:02 So that will not consume as much cash as perhaps it may have done historically. So we're in a good place to manage that growth. And then we have other levers at our disposal as well, as our invoice discounting facilities as yet to utilize and potential for asset finance. And as Andy said, should a really significant contracts come along, then then then we have these levers and then there's also, you know, with regard to the end markets as well. So we we feel comfortable that that should not be a barrier for us for growth in the future. Now I think the key there is a, you know, major long term contracts, which, you know, we can plan very significantly ahead, and we have all these different levers. And one of the key USPs that we now have with into this market with customers is, of course, that our stock terms are significantly improved and, you know, say, 10 times plus.

34:04 And a lot of customers would be at stock turns at three or four times. So one of the propositions we bring in to that customer is the generation of of true free cash through adopting our technology, which benefits us as well as the customer in terms of return on capital and how much capital you actually need to manage the contract. So the next question is what's the size of your addressable market? John, do you want to take on that in terms of the core markets of aerospace? Yeah. So we're in the process of refreshing our numbers as we come through the other side of COVID, but essentially, in the three key territories that we've talked about, you know, we had addressable markets of the 500,000,000 to a billion dollar range fairly, you know, so easily mapped out in terms of identifying those customers and locations and working with partners to, you know, sort of be in the engagement plans there.

35:05 Yes. It'll need a refresh post COVID, but I wouldn't have expected it to reduce significantly. Of course, it's actually, you know, growing in real terms and as we'll see the the combined impacts of the recovery and, you know, the general growth in the market, we'll we'll continue to to monitor those going forward. It's large markets. It's the same processes and technologies in all those three territories. It's the same end users and suppliers. So, yeah, very, very addressable and very public information as well. Thank you, John. So the next question is what do you see as the greatest opportunity for the company moving forward? And in terms of currently, this comes back to the inflection point, back to the other questions.

35:56 The prize really is that we get a customer, which we already are transacting with in The UK, to decide strategically wants to adopt our technology on a global basis. And then that would go through a program of change with that customer, which would enable us to roll that out across on a global basis, particularly in much larger markets that are set like The States or Europe, Asia, rather than confined just to UK, which is our focus at the moment. And that is the single closest opportunity for major growth. And what it it, you know, is is is on top of all the dynamics we've talked about of the opportunities for still double figure growth in the current contracts, current business that we have today.

36:51 So the next question. Covered that. Yeah. Is do you yeah. We covered that one, which is another question on funding, which we've talked about. And the next question is just a very immediate outlook. So in this next twelve months, as you've seen at the moment, we've significantly improved the margin that which means that, you know, we're close to EBITDA breakeven even at these subdued levels. You'd expect those volumes to have some uplift this year and further, maybe more significant uplift next year.

37:36 And at the current margins, that would take us to at least breakeven as we did achieve part of last year or or into a small EBITDA positive position. But in terms of funding growth, we, you know, we are taking those gains and reinvesting, not a significant amount, but an important amount, I would describe it, say, at your 500,000 to 1,000,000 over a period of time of gains and putting them back into the business in terms of looking to underpin those growth opportunities through business development, investment in technology, working in in overseas environment. And and so we don't and I think if you look at outside analysis of the company on that, you'll see that that's what the expectation would be as well. So in terms of EBITDA breakeven for 2022, we are at that level, but some of that benefit is most likely gonna be invested back in the business, you know, in the growth side opportunities.

38:48 So it's a it's a balancing act at the moment. Longer term, the objective is to get into some very significant, positive, meaningful EBITDA. But at the moment, it's about reinvesting some of those margin gains. The next question, the workforce reduced in 2021, but you advise for coveralls starting 2022. Can you support proposed growth with existing staff levels? So as I just explained, there will be some reinvestments in terms of what I would call staff which are focused in the technology and growth side of the business, which comes through the administration level in our accounts.

39:36 In terms of other head counts, that will that flows flexibly in terms of direct heads with the volumes of contracts. And, obviously, we make a margin on a profit on that, and you can see that that margin has improved. So there's no issue with, you know, if we have higher volume, yes, we'll have more staff on the shop floor. But as you can see, we would expect, having gone through this operational change, for those staff to be far more productive than maybe, you know, we were two, three years ago. So that's really, an answer to the question. Some investments in, overhead for growth, and the headcounts in the shop floor varies really with, the levels of volume, but, we are seeing, that higher margin and efficiency, through the staff productivity.

40:33 I think that's gone through all the questions that we Andy. Yeah. Andy, John, Chris, thank you so much for that. And I think, yeah, you're right. You have addressed all the questions from investors today. And, of course, ladies and gentlemen, if there are any further questions submitted, the company will have the opportunity to review those questions, and we'll publish those responses on the investment company platform. But perhaps before redirecting investors to provide you with their feedback, which I know is particularly important to the company, can I please ask you for a few closing comments? Yes. The first one is really to thank all all the team for the hard work over the last twelve months. This business is underpinned by long term contracts, and those long term contracts have very significant upside volume expectations based on external market forecasts and long term demand in the industry.

41:27 The losses at the moment have been significantly reduced even at lower sales volumes with margins up significantly from two years ago. And our operating cash is actually higher. Our total cash on the balance sheet, 3,500,000. Interest inventory levels have been slashed, and that is through operational, improvement and changes and has then folded into part of our service offering to customers. And therefore, we growth will come, and it will come through expansion of the current contracts, but also through, expansion overseas as we cement those relationships with those long term, customers. And as other people have pointed out even in this q and a, there's then the opportunity to transfer this technology across industry sectors for even more meaningful growth in the long term.

42:25 So our message is, you know, we are financially stable. We have strong technology offering in a market that is seen to grow through the pressures of sustainability across industry, and we believe that we are in a better position today than in fact we were two years ago when we entered into the pandemic. And I'd to thank all investors for their support over the last twelve months. Andy, John, Chris, thank you very much for updating investors this morning. 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.

43:16 This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of VELOCITY COMPOSITES PLC, I'd like to thank you for attending today's presentation, and good morning to you all.