VP (LSE:VP.) — FY24 Results

0:01 We are VP Group, leader in equipment rental for infrastructure, construction, house building, and energy, supporting critical projects that allow societies to thrive and economies to grow. When companies need specialist solutions, they turn to us for our equipment, our people, our services, our support. They trust us with exceptional requirements where complexity and constraints demand capabilities far beyond the ordinary.

0:34 And for over seventy years, we have delivered for them safely, efficiently, and responsibly with no shortcuts or half measures. We focus on niche markets where our people lead through their greater knowledge and expertise. We focus on our customers, the job in hand, and their changing needs, what really matters to them and where we can make the difference. We are agile, responsive, moving quickly to solve problems. Our structure is flat and our decision making is effective. Autonomy and accountability are equally high. We are known for being a well tuned operation, ready to mobilize our people, resources, and capital at scale and speed.

1:20 We are fair, reliable, ethical, sustainable, and good to deal with. We are plain talking and straight dealing. We keep our promises and we only make claims we can support. We are VP Group, sector experts with a shared purpose, delivering specialist capabilities for critical projects. Focused, agile, fair, beyond the ordinary. We are VP Group.

1:51 Good afternoon, ladies and gentlemen, and welcome to the VP PLC full year results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and we'll publish those responses where it's appropriate to do so on the investor meet company platform. Before we begin, I would just like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from VP PLC, Anna. Keith, good afternoon. Good afternoon. Thank you very much.

2:37 Thanks everybody for joining, and it's great to have you here. I'm Anna Bealby, and this is my first full year results presentation as CEO. I'm joined today by Keith Winstanley who took on the CFO role in January. I'm gonna start with a brief introduction. I'll then hand over to Keith who will cover the financial review, and then we'll talk through our strategy and our operational performance, and there'll be plenty of time for q and a at the end. So I want to start with our investment case, why I think VP is a great business and why I was really excited to take on the CEO role.

3:15 Our main differentiator is the specialist element of our rental model, which sits right at the heart of what we do, whether that's the specialist nature of our assets, our specialist end markets, or the specialist way that we deliver projects and solutions. The second important factor is the diversity of our revenue streams due to the different end markets in which we operate. And we've seen this clearly in the current year where the overall group has managed to perform well despite challenges in, for example, the general construction market. Looking forward, I'm really excited by our growth prospects. I think we're aligned to markets with good growth potential, particularly in infrastructure and energy. And we're well placed to invest both organically and through M and A.

4:01 I also see growth potential through our specialist divisions working more closely together to support our major customers and some complex projects. Underpinning those things that make us different and unique is a really good strong financial profile. As a business, we have consistently demonstrated strong returns with a target return on capital of 15% and that's supported by thirty years of uninterrupted dividends. We also have a strong balance sheet and disciplined capital allocation. Our strategy, which I'll cover later, is focused on growth and operational excellence, and that's supported by three key areas, people, digital and ESG. So I'll move on to FY '24 and some of the key highlights.

4:49 Overall, we recorded a solid performance with revenue in line with last year and our profit slightly down. I think this reflects the strength of our business and our end market exposure. From a market perspective, infrastructure was strong with demand from the rail, transmission and water sectors. Construction was more challenging, which particularly impacted our brand and higher station division. And this led to a noncash impairment charge of GBP 28,000,000, which Keith will talk to later on. We continue to invest heavily in our asset base. Our fleet CapEx in the year was GBP 63,000,000 with a continued transition towards cleaner, greener solutions. Our return on capital employed remained strong, slightly above prior year at 14.5%, and this really demonstrates the quality of our earnings.

5:39 As I mentioned, we have a robust balance sheet. Our refinance was completed during the year and our net debt is trending downwards. The Board's confidence in the future mean that we increased our proposed final dividend by 4% to 27.5p per share, resulting in a full year dividend of 39p per share. Before we go into the main part of the presentation, I just want to acknowledge some of the changes that VP has gone through during the current financial year. When I became CEO in September, one of my first jobs was to ensure that I had the right team around me. We've brought in some fresh talent to the business, and I think we now have a really good blend of fresh ideas alongside existing knowledge and existing experience.

6:26 We've established an executive team which sits below the board, and we've simplified the management structure. We've also changed the management team in Brandon Hire Station, and I'll talk about that later in the presentation. Over the last few months, we've spent some time refreshing the group strategy. Our strategy builds on our successful history and heritage, but the key areas that we're focusing on include encouraging our specialist divisions to work more closely together to support our customers, driving simplicity and consistency through our business model with an increased focus on digital, and pursuing growth through a refreshed corporate development plan. These changes give us a good level of confidence, and we believe that we are well positioned for the future. I'm now gonna hand over to Keith who will talk through the financial review.

7:15 Thanks, Anna, and hello, everybody. This is my first results presentation after joining the group in January. I think I've joined the business at a really great time. As Anna's just pointed out, last year, we saw we saw some big changes at VP, and we got some exciting future plans that we'll cover later. But in mean in the meantime, I'm gonna talk us through our f y twenty four financial results. So these are our highlights. The main message I want you to take from this slide is that our key metrics, be that revenue, EBITDA, adjusted PBTA, or return on capital, are all broadly in line with the prior year, and we think this is a good result.

7:55 We wouldn't have been able to deliver this result had we not operated in diverse end markets. However, as Anna has just mentioned, we've seen some softness in the general construction market this year. And the general construction market has particularly impacted the performance of our Brandon hire station business. After taking into account the performance, we've impaired the intangible assets initially recognized on the Brandon acquisition back in 2017 by around 28,000,000. This is a noncash impairment that doesn't impact any of our current year key financial metrics. And I will touch on our plans at Brandon Higher Station, including those we've already implemented a little later on. We've also incurred 5,800,000 of exceptional restructuring costs. These relate to board and senior leadership changes as well as branch closure costs.

8:45 The majority of those closures have been in Brandon Heights Nation. So on to our balance sheet. Despite the impairments, our balance sheet remains strong and robust, which positions us well for future opportunities and investment. In fact, we increased the investment in our rental fleet to 63,000,000 this year. In what remains a challenging environment, we maintained our focus on working capital, which saw an overall improvement, and there was a slight reduction in DSO as well. Pleasingly, net debt reduced by around 9,000,000, which I'll just give give a bit more flavor over over the next couple of slides.

9:28 So this slide shows our movement in net debt over the year, and really it shows two main points. First, we're a cash generative business with operating cash flows of around 81,000,000. The second thing it shows is that we are disciplined in how we allocate our capital. We invest for growth by investing back into our fleet. We pay interest in our taxes, and we continue to return funds to our shareholders via progressive dividend. Our net debt sits comfortably within our facilities. As a reminder, back in November, we were pleased to announce the refinancing of our revolving credit facility on good terms.

10:14 The RCF sits alongside two fixed rate low cost private placements, the first of which matures in 2027. Including our road overdraft, we have around a 190,000,000 of facilities. We operate with significant headroom and well within our covenants. We have funds available, but they'll be spent with discipline. We are in a strong position.

10:40 I want to provide you a little bit more detail around our fleet investment. We increased our investment this year both on a gross basis or considering investment net of disposals. As a reminder, we actively manage our fleet through the full life cycle, including disposal at the end of life. Fleet disposals generated around 7,500,000 of profits this year. We are selective in how we invest in our fleet. We consider a range of factors, including opportunity size and expected returns. Over recent years, we've worked more collaboratively with our customers and our suppliers to move our fleets to greener and cleaner technology. Around 80% of this year's investment was either zero emission at point of use, so it doesn't need any power to operate, or it was powered by a cleaner technology.

11:30 And just to call out one example from our fleet, this is a solar powered charging station up on the the picture you'll see up on the screen. It's a new offering in Brandonhire Station. It generally does what it says on the tin. But as it doesn't require any power to operate, this falls into our zero emissions at point of use category. But this this piece of equipment also drives the adoption of cleaner technology, facilitating the move to battery powered equipment. So moving on to our returns and our dividends, these are two areas that have been and will continue to be key underpins of our investment case. The top graph shows our ability to deliver remarkably consistent strong returns over several years.

12:16 The bottom graph shows our history of delivering a progressive dividend. In fact, we have an uninterrupted dividend now stretching back over thirty years. Reflecting our confidence in the business, the board has recommended a final dividend of 27.5p per share, representing a 4% increase over last year. So just to summarize, we've seen a year of resilient trading. We've seen that we operate well within our finance facilities, positioning us well for the future. And we've just seen the group's ability to generate strong returns in its history of progressive dividends. And with that, I'm gonna hand you back over to Waila. Thank you, Keith. So I'm now gonna cover our strategy. And when we presented our interims back in November, I set out the group's refresh strategy.

13:07 The key areas remain the same, and over the last few months, we have been working through more of the detail. The overarching aim is to make VP as a business more straight forward and greater than some of its parts. The key elements of the strategy relate to delivering growth and driving operational excellence. From a growth perspective, we will continue to drive organic growth by investing in our fleet, and we'll prioritize investment in those areas where market opportunity is strongest and where we can generate really good returns in line with that 15% that, that Keith talked about. We'll also explore opportunities for our specialist divisions to work better together, both in terms of sharing customers and also taking advantage of market opportunities on a group wide basis.

13:54 We've also refreshed our corporate development strategy and we'll look at we'll look to take advantage of acquisition opportunities. From an operational excellence perspective, VP has always had a keen eye on costs, and this has enabled us to generate strong returns over the years. That said, I do think there is an opportunity to be a bit more simple and consistent in the way we work, and our digital roadmap will be a key enabler for that and I'll touch on that later in the presentation. I also think there's an advantage of an opportunity for us to take advantage of the scale of the group. For example, taking a more group wide approach to procurement and proper site where we see an opportunity to deliver some quick wins. These key areas of growth and operational excellence are underpinned by people, by digital, and by ESG.

14:41 I'll talk about digital and ESG later, but to briefly touch on people, we've now got new HR leadership in the business, and we're in the process of refreshing our people strategy. We recognize that our people are our greatest assets, and we're focused on recruiting and retaining talented people who can best serve our customers. I'm now gonna talk about some more of the areas of our strategy in a little bit more detail. So as I mentioned, I've spent some time or we spent some time shaping the corporate development plan to ensure that we've got a suit a suitably focused approach. I've touched on organic growth already, so I won't go into that in any more detail other than to say that we will continue to invest in our fleet where we see market opportunity and strong returns.

15:27 We'll also be investing modestly in other areas to support the overall strategy, digital being a good example. We see acquisitions as an important part of our growth strategy, particularly in the medium term, but we've got some really strict parameters. Any activity in this area will be specialist with good growth potential. Any opportunities must offer us access to or extensions to geography, assets, or sectors. And it's really important that things are within our strict financial hurdles in relation to returns and also to the group's gearing. They must be value accretive to the group. And it goes without saying that we would only pursue opportunities around M and A that was that sat comfortably within the group's risk appetite.

16:16 We see two types of acquisitions. We see bolt ons, which would likely be smaller and be extensions to our existing divisions and strategic, which would likely be larger and quite possibly new divisions. Overall, I've been encouraged by some of the opportunities that have come our way in recent months, and there's more detail on some of the criteria and approach in the appendices of this presentation. Finally, just to touch on disposals, they're not explicitly part of our plan, but each division is tested on a number of criteria, including the level of return they're generating given the importance of that 15% based on scale and growth potential and also based on fit with the overall VP story and VP strategy.

17:05 So moving on to digital. Again, this is an area that I briefly touched on when we presented our interims in November, and we spent the last few months working with an external partner to review each of our divisions to identify those areas where the use of digital tools and digital techniques can help us drive growth and improve performance. Our approach in this area is pragmatic and it absolutely builds on what we currently have. And while some investment will be required, we expect this to be relatively modest and with strong payback and returns. Our initial roadmap is eighteen months long, which I think is appropriate given the fast moving pace of technology. There's a number of priority areas for this first phase. Firstly, harmonizing our systems and processes and that's to drive simplicity and consistency in the way we work.

17:56 We've got good systems across our UK businesses. And by making things more straightforward, it will be easier for our specialist divisions to work better together. Secondly, we think that a new configure price quote or CPQ tool will add digital capability and will improve our pricing controls. It will also make things simpler for our customers to do business with us, and it will improve the customer experience.

18:23 The third area is improved data and analytics. At this stage, I'm not going to talk about AI because we're not ready for that. But there is a need to focus on our data and getting best value for it, for example, through better analytics, because better information will help us to make better decisions. Finally, and underpinning this, we'll be using modern cloud capability to ensure we can provide our people, our customers with reliable, stable, and effective systems. So in summary, we have a plan. It builds on what we already have, and we think the investment will be relatively modest. And any investment will be closely linked to driving growth and making things more straightforward and improving the customer experience. So moving on to ESG, this is a really important part of our strategy, but our approach is pragmatic and the financials must work and must support our business model.

19:20 ESG is embedded in the way we work on a day to day basis through our people, through our customers and through our supply chain. We continue to work closely with our customers to respond to their needs. And as Keith mentioned, it's a really important part of our CapEx decision making. During the year, we were really pleased that our science based targets were validated by the SBTI and across each of our businesses, we're focusing on carbon reduction.

19:49 We're also continuing to develop our social value strategy and we've recently had a responsible business health check with business in the community. And we're also training our people and increasing their engagement through carbon literacy training. So in summary, we see ESG as an important part of how we do business, and we take our responsibilities in that area very seriously.

20:13 So far, we've looked at our financial highlights as well as our new strategy, but now we're gonna just spend a few minutes walking through our operational review. One of our key differentiators is our diverse revenue streams, mitigating the risk in any specific area. We operate nine specialist divisions across a range of geographies, which are aligned to four principal markets.

20:39 The graph on the left splits each of our division's revenues by these end markets, whilst the graph on the right shows how our total revenue is made up. As you can see, our major end markets continue to be infrastructure and construction.

20:56 As we've touched on already last year, the infrastructure market was supportive with a good level of project activity. The construction market was more challenging, particularly in nonresidential. As you know, house building was subdued, but the energy market grew. Anna's now gonna tell going to tell you what this is meant for

21:21 infrastructure, as Keith mentioned, the infrastructure market was very supportive for us and we were really pleased with our performance in this end market. Our ground force division was a standout performer. Our TPA and Torrent businesses also performed well and managed to record good results despite being impacted to some extent by some of the rail strikes. The particular areas of activity for us within infrastructure were rail and that was both CP6 and also HS2, Water through AMP7 and transmission and that was both in our UK business and also over in Germany. As we move into FY 2025, we started the year well and we have a strong visibility of projects, which gives us a good level of confidence. So we expect the strong performance of FY 2024 to continue through the current year.

22:13 Construction was a slightly different story for us, particularly in non residential where our brand and higher station business was most affected. As we've already mentioned, we took decisive actions and we now have a new management team in place in this business and are refocusing the activities. We reviewed physical footprint of Brandon and we closed a number of branches and simplified the way the branch structure works. We also performed a detailed review of our customers to ensure we're focusing our efforts in the

22:43 right place and where our sweet spot exists. And we kicked off a clear set of initiatives around a number of things, including pricing, cost reduction and process and control. And whilst the market challenges remain, we believe that these actions are starting to have an impact and we're cautiously optimistic about the future. Our other businesses in construction have had a better experience during the year. MEP performed well, benefiting from a number of redevelopment projects and the growth in the commercial office fit out sector. That business, however, was impacted by a more challenging credit environment. Our ESS business had a challenging start to the year, but after actions were taken, it made progress and it ended the year strongly.

23:29 As we move into FY 2025, construction activity remains subdued, but we remain cautiously optimistic that the actions we are taking, particularly in Brandonhire Station, will improve our performance. In house building, the market has been challenging with reduced activity levels throughout the year. Our UK forks business has been impacted, but it managed to perform well as a result of rightsizing its fleet and generating profits on disposal, thanks to good strong residual values. In FY 2025, we've seen a subdued start to the year, which we expect to continue throughout the first half, but we are more confident about prospects in the medium term. So moving on to energy. Now the energy market has been supportive throughout FY 2024, helped in no small part by the strong oil prices.

24:25 Our AirPack business had a good strong year benefiting from a number of pipeline and LNG projects, particularly in Asia. AirPack has started the new financial year well and the supportive market conditions look set to continue. So in summary, we think FY 2024 represents a good solid performance and we continue to support perform strongly in our specialist markets despite some of the challenges that we've talked about. As I've touched on, we now have a new team in place and we are focused on delivering the refresh strategy, which includes exploiting opportunities to work together better across the group, driving simplicity and consistency through our new digital roadmap or our refreshed digital roadmap and pursuing a clear corporate development strategy.

25:15 It's early days in FY '25, but we started the year well and we have an excellent track record of navigating difficult markets, which provides confidence for the future. That concludes, the formal slide slide part of the presentation, and Keith and I will now answer the q and a that have been submitted. You very much. Perfect. Anna, Keith, that's great. And if I may just jump back in there, thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the company take a few moments to review those questions that were submitted already, I would just like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

26:02 Anna, Keith, as you can see there on the right hand side, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But, Keith, Anna, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Sure. So so I think I think I'm gonna be question master and and and and pass them over to Anna to answer where relevant. I'm gonna I'm gonna skip over the first question because it was asked about the digital road map, and then we covered it later on a specific slide. So I think we've we've covered that one as we go. I will I will ask the the next couple of questions together because I think I think that the same answer covers them both. So so the first question is the capital investment in the rental fleet increased slightly to 62,800,000.

26:55 What specific investment opportunities are being targeted with this capital? And the connected question is, what is the split of CapEx between the divisions? Are you asking that to me, Keith, or are you going to answer it? Oh, well, I was I was talking to I was talking to you, but I I can I can cover it off if you want me to? Yes, please, CFO. Okay. Okay. So so this is we we consider a a range of a a a range of factors when we when we are looking at where to deploy our our capital. The the most important one for us is our our return on capital employed. So we have a we have a target rate of 15%, and we have some divisions who operate a little bit lower than that, and we have some divisions who operate a little bit higher than that. And then, I guess, the divisions, we have specific projects or specific opportunities which have its have its own return.

28:03 We've we've we've we've kind of investigated in sorry. We we've invested in some of our processes during the year, and and we have this kind of central sign off forum. And and, basically, we are we are looking to where we can get the highest return. So, you know, if if division a comes to us, you know, they they are only making a return of 10% or and division b comes to us and they have a a return on that investment of 20%. And then clearly, we're going to favor division b with with with with the 20%. So I won't I won't give a specific example on on on on which divisions, but I would say broadly, you know, this this year, those those divisions that operate in the in the infrastructure markets have been seeing better better returns.

29:01 And therefore, we would we would more likely favor favor a a project or a CapEx request from one of those divisions. Now it's I've kind of simplified that a little bit, and there's and and there are other other factors at play. But in a nutshell, we we will we will deploy our capital where we where we see the best returns being operated generated. Anything to add to that, Anna, before I move on? No. I think nothing nothing. That's fine, Keith. Thank you. Okay. So next question down. How will you achieve improved cross divisional working? Okay. So I think it's really important that our divisions work together as well as support their own customers and their own end markets, and there's a number of factors. One, we have to make it easy for them to do so. So the things that we're doing across digital, will make it easy for them, to access information and to work collaboratively with the other divisions.

30:02 And the other important factor is I think that, if you want people to support a strategy, then aligning the reward mechanism to that strategy also makes sense. So aligning the reward of people to support both the group's results and also the divisional results, is a good way of of driving the right set of behaviours. So I think it's about tone at the top. It's about making it easy for people to support, the aims you're doing by technology and processes, working as facilitators. And I think it's it's driving reward to support the end games that you want to achieve. And I'll ask a a similar similar question. How integrated are the businesses? With each other? That's that's how I've interpreted the question. Yeah. Yeah. So so if you if you look on our website, you would see a number of examples of large projects significant customers where our divisions do work collaborate and do work together. So there are plenty of examples across VP of our divisions supporting one another to drive the group forward.

31:09 But part of the reason that VP has been successful historically is that we're very niche in what we do. We're very specialist in what we do and we know our markets, we know our customers, we know our assets. And what we need to do is get the balance right in terms of making sure that our agile management team support the growth of each of our divisions, but also that there's a read across and there's an awareness of the wide group perspective. But there are plenty of examples today and in the past of our divisions working together, but I do think it represents an opportunity for the group to to to drive revenue and drive performance. K. And then next question, and and I think we've I think we've just answered the this the second half of this and and perhaps touch on touch on the first, but I'll read I'll read the the the question out in full.

31:54 So how is the progression of the group strategy enhancing organic investment and cross divisional working? So there are sort of three areas to the to to the growth strategy. One is the organic investment, and that's doing what the group has always done in the way it has always done it. And we've got a very, very good track record of driving organic growth. And as Keith said, that investment will be focused on the area where market opportunity exists and where we're strongest. I think the cross divisional working supplements that and I think if we already have visibility of projects and customer relationships, It may advantage of those in driving in driving the growth strategy. So that's an important part of it. And the third area is the is the corporate development area, particularly around m and a as opportunities present themselves, but that needs to be measured and it needs to be disciplined.

32:49 K. I will I will take the the next one. So so the question is, why do you not provide any divisional operating profit information? It's a it's a very good question. It it is one that we keep under under review, and we we we've we've had quite a quite a lot of conversations about what what is the best level to to to share and present results. And it is one that will continue to be under review as as we go through the through the next next financial year, obviously, as a as new CFO in in in this role, kinda how we how we present these things is very important to me. This I guess we we we we walk a fine balance between publishing lots of information that that provide useful information to to investors and people who will use it for good and honorable purposes versus, frankly, kind of giving away too much and and and too much information.

34:04 Historically, there there hasn't been a a a want to to to show information to to that level. But as I say, it's a it's it is it is up for review, and we'll be we'll be considering it ahead of ahead of future results presentations. Next one down, is the medium term growth opportunity in Brandon Hires still intact and why? Yes. I think it is. I mean, Brandon has probably been the biggest challenge that I've faced in stepping up into the into the CEO role. But fundamentally, Brandon is a good business. And I think that the work that we have done within Brandon and Hirestation to tighten up its focus, look at its processes, look at its its cost base means that that business is well positioned to take advantage as and when the market performance in general construction improves. And we think there are small green shoots that the market is moving in the right direction and we didn't that the actions that have been taken by the team are driving the business forward in the right direction. So yes, we think there is opportunity for growth within the brand and business.

35:16 The brand and business is typically very cyclical and we do see peaks and troughs in the to that business in no small part due to its cost base and its gearing, but we think that the work we have done positions that business well to to generate good growth in the medium term. Okay. So the the next question is in three parts. I'm gonna answer part one and two. And part three, I think, actually, it sits quite nicely with with a couple more questions. So I'm gonna split this question into two bits and then answer three questions together if you can if you can remember all all those at the same time on it. So I will I will take the first bit. So there there's a question on what is the average payback of your fleet CapEx, and what is the current utilization ratio of of your equipment.

36:12 On both of those, it is it is really, really hard to to actually give a give a decent answer because of of the kind of vast differences in in the CapEx across our across our divisions. You know, if you take, yeah, Brandon Brandon hire station perhaps as a cement mixer or or something something in there, it is it is an asset that is relatively low cost and and and won't won't last particularly long as, you know, it spins around and kinda destroys itself as as it as it's doing it. You compare that to some of our bigger and more expensive assets, you know, in in our air pack business, we we rent out these these kind of ginormous air compressors, which which are you know, they they are huge great big huge machines, very, very expensive, and they fire fire compressed air down down pipelines.

37:23 They they are just not comparable in terms of what you would want for for for utilizations or or or payback. So so providing some kind of weighted weighted average for across the the entire group is not something that we actually look at because we we we will look at each division and and the the make with the CapEx in in in each of those divisions separately. So can't can't give you a a global answer on on either of those. So there are three three questions here, Anna, about Sorry, Keith. Just just sorry. Just to add on on that one. So from from our perspective, we do absolutely scrutinize utilization business by business on an almost daily basis, but what we find is the the best metric for the external market is is that return on capital. And if that return on capital is is is doing what it needs to be, if that's hitting the 15%, then that that tells us what we what we need what we need to know.

38:24 So three three questions all about all about the future. So I'll I'll kinda ask them ask them all together at the same time. So question one is, given the strength of the energy market, in offshore, could this sector represent a priority in your m and a strategy? Second question is, which lead indicators give you confidence about the year ahead? And thirdly, can you talk about the potential opportunities presented by the current debacle in the water industry as a consequence of the discharge of sewage untreated effluent to water courses? So so one on one on in the future, one on water in the future, and one on general indicators for the future. Yeah. I'll I'll start I'll start with general indicators. And I think I think, generally, there seems to be a level of positivity that consumer confidence is moving in the right direction, which I think is helpful. I think that certainty from a government perspective sooner is not unhelpful.

39:27 In terms of lead indicators, a good chunk of revenue and and it's circa 40% is derived from infrastructure. And I think on infrastructure, we've got really good visibility of the level of projects that are likely to be available over the next year, eighteen months, two years. I think that gives us a good level of confidence. I think to touch on some of those specifics, I think some of the debacle as as as and I quote that in in the water industry and some of the things we keep hearing around sewage and quality of water. I think that's likely to mean that AMP eight has a significant ramp up in investment from AMP seven, and I think that provides us with opportunity. We work not only with some of the water companies directly, but we will work with a lot of the tier ones and subcontractors.

40:17 So I think greater spend across water will absolutely represent opportunity for us. I think the question on energy, interesting one. I think when I stepped up into the CEO role, energy probably wasn't the area that I was expecting to be quite so strong and quite so buoyant. And at the moment, we're absolutely working with the with the management team of our AirPack business to talk about where we can invest organically to take advantage of opportunities in that area. I think the interesting thing around energy is is is possibly the area of renewables, and that's absolutely somewhere, you know, in terms of an area of focus for us from an ESG perspective. So, where we see market opportunity, we will absolutely look to position both our organic investments and also might be an area just from an acquisition perspective.

41:06 And the reference points we have to give us positivity are probably principally linked at the moment to the infrastructure market because that's what's proven to be very strong during f y twenty four, and we believe we've started f y twenty five with a level of strength in that area as well. K. So I think that is all all the questions answered. I think we're just gonna hand back over to Jake now. Perfect. Keith, Anna, thank you very much indeed for being so generous of your time and addressing all of those questions that came in from investors this afternoon. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, just for you to review to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses out on the platform.

41:53 But, Anna, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great. Yeah. Thank you. So thanks everybody for joining this afternoon. We do appreciate your time and your interest in VP. We think that FY twenty four has been a really good solid performance, against the backdrop of some mixed markets, and we think it's absolutely demonstrated the resilience of our business model. We think VP is a company with a strong heritage, a strong history, and a really good track record, and the new management team along with our refreshed strategy gives us lots of reasons to be excited about the future. Perfect. Anna, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations.

42:53 This will only take a few moments to complete, but I'm sure be greatly valued by the company. On behalf of the management team of VP PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.