Zytronic (ZYT) — Interim Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the ZYTRONIC PLC 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 will review all questions submitted today and publish responses where it is appropriate to do so, and these will

0:31 be available via your Investor Meet company dashboard. Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to CEO, Mark Cambridge. Good afternoon, sir. Good afternoon, Jake, and thank you very much for that introduction. Welcome everybody to this investment company presentation of ZYTRONIC's interim results for the period end 03/31/2023. We'll run through the slide deck. There's there's roughly about 12 slides covering the sort of the data associated with the the results and a couple of forward looking slides. The first slide as we move forward is just an overview.

1:18 Obviously, we'll be expecting to pick up all of these points as we run through the slide. I think the first one, just to pick up on that sets the scene for a lot of things that we'll be mentioning, Claire will be mentioning that's affected finances and is affecting sales is the the the effect of the voluntary

1:35 chapter 11 bankruptcy petition that was done by one of our customers' final end customer in America in the early part of February. So at this moment in time, I'll move forward. The first couple of slides are talking from Claire's point of view, looking at the finances. So I'll pass on to Claire as we move forward. Good afternoon everybody and thanks Mark for the introduction. I'd like to talk to you today about the financials for the half year financial year 2023 and compare that to where we were in half year financial year 2022. The first half of this year has unfortunately started slower than we anticipated with group revenues of CHF4.7 million. What has occurred over the first half is that we have sold less units in this first half period compared to the prior period.

2:27 There were a few factors that impacted the revenue line, one of which was that we had an overstock in our gaming and vending markets which impacted sales to those markets. The overstock in occurred in financial year 2022 but has impacted into 2023 as those customers who would have normally placed orders for goods did not so. The second impact in revenue is that the Chapter 11 situation with our customers end customer has meant that our customers have not placed orders for more product really into that situation. So that has impacted into half one and we're $1,200,000 down in revenue for the period.

3:13 This obviously impacts into gross margin whereby our margin for half one twenty twenty three is significantly lower than that of twenty twenty two half one. 4.5% points of that impact is due to a 200,000 impairment provision for stock whereby the end customer who has gone into Chapter 11, we had already started to produce stock in work in progress stock and finished goods stock for orders that were due post half one. We have since decided that as we're not sure of the outcome of this situation in which Mark will talk into more detail later through the presentation, we thought it was prudent to impair the stock. So that's had a £200,000 impact into the gross margin line.

4:04 Gross margin has also been impacted by the change in the sales mix whereby we have sold less volume of the larger format sensors over the period and those larger format sensors that have additional add ons such as being curved or printed and things like that, they do normally attract a higher margin premium. So that's been another impact into the gross margin over H1 twenty twenty three. We've also had the half year twenty twenty two versus half year twenty twenty three impact of the rewards. We're mindful of the cost of living crisis and the fact that the national minimum wage is continuing to increase and we have to ensure that we pay our very loyal and very skilled workforce a fair wage. So that impacted in 2022.

4:56 It also has been enacted again at the end of March twenty twenty three. So those current year pay awards will increase costs in half two of FY 2023. We've managed to maintain our utility costs over the two half year periods. This is as a result of our highly successful purchasing ahead strategy with regards to the commodities and we're paying considerably less for our electricity and gas than what would be achieved if we had to go to market right now. So that has had a benefit in the fact that there's been no price rise there. Admin expenses are higher half year to half year. Again we've taken the decision to impair 300,000 of debt associated with the AGA group, this relates to two customers.

5:48 The debt only became due for payment at the end of March so it wasn't particularly overdue, however because of the situation that AGA find themselves in, we again felt it was prudent to put a provision in for that and we are actively chasing that through our lawyers to see what we can do in terms of recovery. We've also had higher travel and subsistence and marketing costs from H1 twenty two to H1 twenty three. This relates to our sales team being able to prospect more and go out and meet current customers and new customers and we've also undertaken a lot more trade shows in the first half of twenty twenty three that couldn't occur in the first half of twenty twenty two due to the Omicron variant of COVID rearing its head and delaying things later into the year.

6:39 As mentioned in gross margin, we did have the pay award impact for our admin staff So this will impact again into H1 sorry, H2 FY twenty twenty three. So unfortunately that resulted in an EBITDA loss of 600,000 which gave us a loss before tax of £900,000 However, we won't obviously pay tax on that loss and therefore there's a cash benefit to not doing so, but it has resulted

7:08 in a loss before tax of 7.5p for the period. There's no weighted shares in calculation at the half year so the EPS is calculated on the actual share number in situ. The board have also agreed not to pay an uncovered dividend so there is no interim dividend proposed for the period.

7:36 Moving on to the statement of financial position and cash flow, the balance sheet remains solid. We still have reported cash of £5,400,000 at the end of the first half. That compares to £6,400,000 at the end of September twenty twenty two and it has been impacted over the half year by the impact of the debt that we've had to write off. Really it should be GBP 300,000 higher. We've also utilized cash in operations over the first half of the year of GBP 400,000. Our working capital has decreased by CHF 200,000. Debtors and creditors have both decreased, but stocks have increased. The result of the stocks increasing is because we had placed orders in financial year twenty twenty two for some of the difficult to source semiconductor parts that we required to put into our chipsets to sell alongside our sensors and because there's still a problem in the market in the supply of that particular product, we had to be placing orders in advance to try to guarantee some of what we required, not even all of what we required.

8:47 So they're starting to drip through now into the business into first half of the period, hence increasing the stock. We've received 100,000 cash back in tax and pleasingly we've also been able to earn interest over the first half period of almost 100,000. We've got quite a lot of our cash tied up in deposits in terms of fixed term deposits and notice deposits. We're managing the situation in different ways to maximize the interest earning and we're able to get approximately 3.5% to 4% interest yield on our deposits, but we're also mindful of the working capital situation and the fact that we need to have a fluid method of interest earning.

9:36 CapEx spend has been 600,000 over the period. We've invested almost equal in both R and D and plant and equipment. Our R and D spend has been around the costs of implementing the new ERP system which is currently ongoing and that will give us better efficiencies through our factory, better coordination of understanding of processes and costs and things like that. We've also spent on £300,000 on plant and equipment whereby we paid for the final installment of the new laser machine that's now in situ. That has been in operation since January and is working very well and it's also helping with production yields. So we're pleased with the progress of that.

10:22 Dividend payments during the period were up GBP 200,000 and that relates to the final dividend for the financial year 2022. And as discussed earlier, we're not proposing an interim dividend for half year financial year 2023. So moving on, I will now hand you back to Mark to take over the activities of the business. Thanks very much, Claire. The next three slides cover really the the sales that's happened in the half year, and we'll we'll talk around the reasons why we've had sort of significant movements in in them. The following slides thereafter, I'll I'll look a little bit forward into the opportunities log and the developments that the business is particularly working on at this moment in time as we try to readdress the the positioning in the in the market and and drive the revenue line back towards where it it it was pre COVID.

11:22 So look at the slide at this moment in time, very similar to what we presented over the last couple of years, just showing variation in the markets that we're addressing and, you know, how we get seen movement in the the the size of the products that we produce as we as we look forward. So arguably, as we sort of state, revenue is 4.7, obviously, significantly down. Biggest impacts that we actually saw was in the gaming and vending marketplaces. Relative relative stability, a little bit of a drop in industrial. Financial, obviously, on the decline, but slightly up against the same measure point of last year. Signage slightly down, others slightly down.

12:09 As reason for the changes, fairly significantly, we talked about the the AGA point. Mean, I there has been a question that's been asked really about the timing of it and what actually happened. We were fully aware of the situation that was occurring when it was announced on the February 2. Unfortunately, the information that we were being fed back was that this was very much procedural. It was a a measure to protect the assets of the owner of the group. And we say as when things move forward, we didn't really see many changes in what we're ultimately doing as we thought of until we hit towards the end of of of March, where suddenly we were then asked not to ship any more goods.

12:56 We we had debt that was owed, but it was just becoming owed at that point. And, ultimately, as things then move forward, we've been made more aware of significant changes of not being able to get funds released and finally being informed that the entity, Aruzay Gaming America, is going to actually be auctioned off at some point in June. So we're expecting a a resolution to the... To what's happening at some point in June, but we're not expecting really to see orders flow through as a consequence of everything that's happened because of the level of trading that had occurred and stocking that was probably in the system at that time.

13:42 Regarding overstocking, again, we had a situation with one of the customers that had produced or had requested more product to be produced for them during the FY twenty two period. I think we've always stated as a business, we very much work on projects, and we very much receive purchase orders. And the purchase orders we ship as a as a belief that that is the customer demand cycle for it. So we we knew that we'd got increased orders in the first half of of twenty one, and we were commented on that at the the prelims that we've been... Had orders placed because of the difficulties in the electronic componentry market through the whole of '21 running into '22, and that some customers had placed those orders to what we believe ring fence production and raw materials.

14:31 However, when the customers were demanding that this... They'd be shipped over that time period, ZYTRONIC was supplying the product to them. It's only laterally that we then found or been informed that the overstocking that they'd created with with our product hadn't been matched with them getting all the products that... Into... For them to make the final piece of equipment. And therefore, there's been a delay in further supply of products that we need to supply for that that particular item. Arguably, this may well now drift as supplying the products on the POs are already placed now into f y twenty four as a consequence. Regarding vending, again, two two issues that we saw in in vending. One was an oversupply. That was for The US OEM brand independent drink fountain that we were manufacturing in there. The difference in in value between what was supplied in the first half of last year and the first half of this year due to that overstocking situation, very similar reasons as we described... As I described in gaming, was about £500,000.

15:36 So significant effect in in that particular one. And then also, we saw one of the projects that we were... We've been working on for a a pizza vending oven, vending machine. Sorry. That that they had gone through a redesign and regulatory approvals, and that that allowed the option for them to look at at alternative touch technologies as a as a consideration. And, unfortunately, they put a cheaper solution in than than what we were we were offering to them at the time. This is obviously always of concern. Pricing in the marketplace is always of a concern. The issue really is is have they put a technology in that meets the technical specifications that we were addressing, or have they actually just gone forward and and and put a a technology on based on price savings that they will will gather?

16:31 We believe it's the latter rather than rather than the former. Regarding industrial, again, the reduction we can see is purely down to the revenues coming from the the... Our European market, and it's significantly related to one European VaR that we deal with where two of the sensor designs that we produce are actually a lower in f y twenty three than f y twenty two. This is not an abnormal issue regarding the the, you know, the the demand cycles that we see from customers. They're not steady state. They they basically move month on month. So seeing sort of two slightly lower at a period is not... Is is not an unusual scenario that we find ourselves in.

17:18 Regarding financial, again, it's... This has been flagged over a long period of time how we were actually going to be seeing movement occurring in in the marketplace, particularly as not all to all products that go into the ATM marketplace were touch. A high proportion of it was what we referred to as non touch or display filters, and that marketplace was significantly moving to lower supplied territories and low low material content and not necessarily wanting the highly engineered display filters that ZYTRONIC was producing. But equally, we've seen then movement in the... Continuing movement in the touch products that are supplied into that marketplace. And again, flagged that, you know, regularly on about a five to seven year cycle, the manufacturers in that particular area are looking at platform and machine redesigns and a little over the period that we've been significantly involved from about 2003 through to about twenty twenty nineteen.

18:19 We'd gone through three of three... At least three platform redesigns at that time. But at the point that we're looking at this very latest platform redesigns, they had they had looked at trying to advance the touch technology into multi touch. And, unfortunately, ZYTRONIC's multi touch offering at that time wasn't in the right place to be sufficing the change in the marketplace. Also, they were looking at, obviously, price reductions, but ZYTRONIC was was capable and able to be working in in that form and providing them the technical solution. So we were... We we would flag that we we weren't designed into the to the latest platform that was being released and that arguably, as the movement moves back around probably in the next sort of three to five years that we will be looking to try and work with the the the ATM entities again in looking at whatever platform designs they may ultimately be looking at doing going forward.

19:17 Arguably, the ATM marketplace is still a volume reducing marketplace basically because of digital banking and mobile banking having such a high effect on on the use of of cash. And primarily, that's the main use of of ATMs is providing a cash transaction. Signage, very little movement in signage. I know in in in fiscal terms, there's a slight drop if one's looking at the graph and the number, but but arguably very little variations in who we were supplying for what we were supplying in either geographies or customers. And in the other, again, that looks slightly down, and that's a combination of of markets where it's telematics, health, military, generally smaller sized panels than the larger sized panels.

20:06 And again, what we really can see is that that is down the change that we've seen between the two comparative periods is generally associated with the German VAR that we were supplying product through for a medical device manufacturer that predominantly we saw an uplift during the COVID nineteen period that just hasn't been repeated in in sales form during the first half of of twenty three. If we move to the next slide and see the the variation in in sizes, I mean, Claire commented on the effect that this has had in margin.

20:39 Obviously, we're we're down in volume terms across the the number of units that we supplied in every size range that we we're manufacturing. But arguably, the significant impact really is coming through the larger format panels, And particularly where the larger format, we would have been adding premium technology in the form of multi touch and also significant curves... Curving for for the gaming marketplaces where that again is adding a premium to the price compared with the product being flat.

21:11 So with those both being significantly down, we obviously seen a significant drop in in in the revenue proportionally, and therefore, the the effect that that's had on margin. Arguably, revenues coming from gaming in the larger formats... In the larger format size was not significantly down. We've seen the the bigger impact in that particular area in the vending marketplace. Whereas in in the the medium sized panels, we've had more of an impact across the broader range except financial at this moment in time where we saw a slight uplift in the number of touch units that we we were doing and compared with the prior year. As we move forward and look really at the... What's happening looking forward, obviously, one of the big measures that we've continually talk about within the ZYTRONIC business is the measurement of the opportunity log through our CRM system.

22:08 And, you know, a lot of those been significant movement in that one can see that in the graph. Obviously, we've gone from from an end of period at the end of September where we had 484 opportunities open at that time active, and that's at a value of 59,000,000. We've closed the half year period at $49.01 and 62,000,000. Beneath the bonnet, there was roughly a 140 new opportunities that actually entered the the log system from the end of September position. Obviously, as we can can comment, there's dynamic movement that happens in in that in our CRM segment and the monitoring of the logs that go on as products that are open move to closure.

22:53 Closure being either they're being won and they're going into production or or they're being lost for various reasons that we've we've covered in in prior annual reports. But arguably, a conversion rate of of the the number roughly was about a win rate of about 3030% being added added to the marketplace... Added to the to the production

23:16 production volumes that we will be putting through. Regarding the split into the actual markets themselves, we can see that vending remains pretty strong as far as an application area. Gaming and value is is lower than the value that we're seeing in in in vending, but on a basis of a a a lot lower number of opportunities constructing that. Vending itself, we basically look at two particular differentiations in vending. One being product vending where you are getting an... Dispensing of something physical. So in the form of, you know, petrol, electricity, gas, if... For for sort of hydro... Or hydrogen for for hydrogen vehicles, that the dispensing of of liquids in the form of drinks dispensing, for instance, the the American US branded drinks machine.

24:16 Now the other side of it is service vending, whereas not necessarily getting a a product dispensed, I e, for instance, like car parking meters and and such like. So of the 33,000,000, roughly about 19 to 20,000,000 are in product vending. And of that 20,000,000, roughly about 1,500,000 is in new opportunities in the electric vehicle charging stations with a lot of work that we're also going through at this moment in time that's already into production. Financial, there is still opportunities in the financial market. Although we said at the moment, we're not necessarily dealing with the the ATM marketplace in the form that we were previously, but there is still obviously novel opportunities and bespoke opportunities that we're constantly reviewing.

25:07 And any encryption work that we're working on also falls into the financial sphere. Signage, again, it's one of those areas where there's a lot of opportunities, but the opportunities generally are small in volume, therefore reflected in the value... The total value of that that particular area as it stands. Industrial, again, very similar to signage and the other being picked up with with everything else that we are we are working on, including medical medical devices that are still forming a lot of the opportunities in that particular area. Again, if one's looking at the graph, you can see that that there's there's there's continuous movement in in the form of peaks and troughs. That is not not not an unusual situation we're finding ourselves in at this particular point in time.

25:58 The issue really is is ensuring that the graph in totality moves back towards it was pre COVID area where we really should have been... We're really looking at the sort of the eighty, ninety million total size at any... At at any one monthly end point relatively. And we're looking at sort of an opportunity base in volume terms of of probably in excess of 600, which is which is where we were pre pre COVID. One of the things I had been looking at in preparation for the the preparation of the results was whether or not an overlay of the the actual order intake onto the graph quarterly would have been revealing of certain sort of traits. And certainly, if I had been doing that, the one message I would have been looking to put forward was if one pushes the whole order intake back by roughly eighteen months, which is the reference time frame that we talk about as being the maturation period of us engaging with an opportunity and then an opportunity eventually going into production for us.

27:05 We see a a very good mirroring of the situation that we found ourself in being that through through the COVID period, saw we saw a drop we saw a drop which has manifested itself now eighteen months later in the in the order order intake levels that we're ultimately seeing, which is why I believe that we we are looking at a timing issue as we look forward at this moment in time where the return of the opportunities log growth that we've been seeing since roughly the the beginning of the fourth quarter of twenty one really starts to manifest itself out as the work towards increasing revenues from from opportunities converting into production really is is from this point onwards over the next six months at least.

27:56 So that's really why I think I think we're we're seeing a a a lower period in our order intake at this moment in time, basically being compounded by the near two years of COVID effect and the the rough eighteen to twenty four months of recovery time that we needed once we'd actually started to come out of that. And we were starting to engage more formally on on the the normal business prospecting, business development activities globally.

28:26 As we look really at the sort of the the developments that we're ultimately working on, what's what's gonna be generating and driving everything forward. Just really a couple of comments on all of that. We have been talking about the major expense that we put in into putting a a a second laser bonding system into the manufacturing facility. A lot of that was was basically allowing us to risk mitigate between the two manufacturing facilities that we have on-site, but... And ensuring that if one... The original laser was to go down, we had a secondary laser that we could actually switch on. Arguably, it's it's always switched on, and we're now able to sort of flex manufacturing more efficiently between the two facilities that we have. Claire touched on really sort of the other part of the the expense, the CapEx expense that's actually been going through, and this is really associated with the installation of the new integrated ERP, CRP system that we're actually putting through at this moment in time to significantly improve the the the management controls and management information that we're able to work on and control the business through.

29:35 I think one of the key features through the through the COVID period and that's... And the effect of the the inability to... For... To to to get raw materials in the form of the electronic components and particularly the processes was the amount of r and d manpower that that actually sucked up within the business and and basically them continuously firefighting as the process went went on. Obviously, we've been commenting as we're coming through '22 that we saw the likelihood of that period starting to ease as we we were coming through into the middle of twenty three, and that's... We have continuously been seeing that moving forward. And the benefit of that is actually allowing us now to return to looking at that... The team being more actively engaged in in working with with customers in defining sort of what they're looking for going forward and looking at now more of the development work that we had sort of just slightly put on the back burner as we were... We... As we we were trying to improve the the manpower usage.

30:45 So the things that we're actually looking at as we're going forward, again, we've commented in a new... Over numerous years that ZYTRONIC manufactures its product in a very specific way that's relatively unique in the marketplace and provides us with a technical advantage in some instances, but makes it... Makes what we do very bespoke in essence for customers. And we're always looking at whether or not we can utilize other sensing techniques rather than the micro filament technique that we have developed. So at the moment, we're working with... On a third party collaboration on on a metal mesh sensors, which is another derivation of the PCAP technology that is is dominant in the marketplace. What we're actually looking at more more in line with that is whether or not the uniqueness and capabilities of the ZYTRONIC control electronics can be better...

31:41 Be utilized by other particular sensing technologies. And that then may well allow us to look at leveraging our capabilities in electronics more in working with other sensor manufacturers to... As a as a straight potential control electronic supplier as well as whether or not we can actually take that metal mesh and add it to our own portfolio of products that we're looking to to sell out. I think one of the issues that we've we've seen over the number of years, and again, something that's been significantly compounded by COVID and to a degree by Brexit is ongoing logistics costs. ZYTRONIC, again, and it hasn't changed in the numbers that we're talking about this moment in time, you know, is exporting roughly about 95% of the value of the products that we are manufacturing to various sort of countries and geographies in the world. And one of the recognitions of it is that ever increasing logistics costs and the potential really of how that affects ZYTRONIC when we are producing significantly weighty and large glass based sensor solutions that have to be transported to those locations, which inevitably adjust that adding to our our landed cost price and use of our product in those particular marketplaces.

33:05 So again, ZYTRONIC is evaluating the the the processes of us not necessarily manufacturing all product on glass for all instances and manufacturing film based sensors and then working with regional contract laminators in particular territories to actually have our film product converted to glass in situ. And then basically look to then sell that product hopefully at a at a at a reduced price to market as we look forward. One of the key drivers and innovations that we've we've been working on over the the past period is is what we refer to as this floating button technology where we have the capability of incorporating a mechanical button within the within the structure of our touch sensor in any location.

33:56 It could be very much right in in the very middle of a of a touch panel providing the ability to... For the display itself to be used in combination with the button to create the the button the button area and the mechanical effect of the button being used. So we're very much... Have gone through the development process associated with that now and are just doing all the finalization of the productionizing of the actual use of the button. So it's a it's a solution that can actually be sold into market rather than rather than just sampled into market at this moment in time. And one of the key areas that the business has been looking at over the period is is the utilization of our technology, not necessarily at component level as a component sale, but combining at our sensing capability, our knowledge, our USPs that we've got, and whether or not we can produce some form of finalized productive item...

34:57 Product item as a as a as a sellable item rather than continuously looking to upsell a component level. And one of the things that we're looking at in this area is the production of the potential the potential production of of bespoke tables. Again, we're looking really at the derivation and difference that we can provide into that marketplace. So we're looking pretty much at at circular tables rather than rather than traditional rectangular tables and incorporating the the button technology as part of the product offering that we've got. We see this probably more as a as a potential of a table that is more likely to be used in in retail environments such as cafes rather than being something that will be a a sort of a home use consumer item.

35:52 Again, as far as developments, obviously, the... One of the big market areas that we we move on and and and utilize really is participation at at trade events that's either doing exhibitions in our own rights, supporting our channel partners, or or actually having our business development people visit different types of events that are specific to application areas that we're intending to target. So as we... As things now have moved forward, we're back really to seeing those expos and trade shows back fully flowing, fully engaged. Participation levels are significantly up. Attendee levels are significantly up, and we're continuing to sort of address our positioning and what we're intending to do in those particular areas.

36:41 There's a number of shores that are still to be addressed as we move forward, but we're not necessarily attend... Exhibiting as those ones. The next one that we're likely to be at exhibiting at is if the next gaming shore g two e in The USA in October of this year.

37:01 And as we finally sort of move towards the the end of the the the presentation, just really a a summary, an outlook page to really sort of just reflect upon what has happened in the half year and what we're looking to do going forward. I mean, it's pretty obvious that the revenue has been impacted to a fairly high degree, which has affected gross margin and profit in this in this period through sort of unpredicted events that we've seen in in the vending and gaming markets in particular. As Claire has sort of explained, if we've been able to recoup the 300,000, we would have been in a cash position reported of 5.7. But, unfortunately, it's 5.4, but this still provides a pretty good solid platform into our balance sheet and and a platform for the continuation of the business as we look forward and and look look to return to to to growth.

37:55 The global business development and marketing activities have significantly returned to pre COVID levels, so everything is backfiring and active now. But it's all really about the activity levels right across the board, bringing in further and further opportunities into our log. The r and d returning to its increased process technology and product development rather than having to firefight all of the the electronic component supply issues is a is a big bonus for the business. And the opportunities pipeline rebuild, as we can see from the graph, is continuing. I think it was fairly... One of the things that obviously had impacted throughout the business and and and the year and certainly in this first half is the effect that we had with the the ill health departure of our chairman at the beginning of October.

38:44 The... My my unfortunate having to step in as a as as an acting exec chair over a period to to get us to the point of the AGM as we then start to fully and have been addressing the issue of bringing in a more permanent chair, a nonexecutive chair into the business and and and redefining and looking at how... What we're doing and what we can be doing as far as a ongoing strategy movement looks to manifest itself as as we get through the process of the chair appointment. We're expecting that to sort of have concluded certainly within the next coming month to months. Finally, one last point really is obviously is how how the expected revenues in the second half have really been impacted and hampered by what has happened with the Ruseo chapter eleven event and the overstocking situation that has been found ourselves in. And as we then issued the trading update on the May 4, it has meant that we've had to reevaluate the outcome for the year and readdress

39:47 where we believe it's going to be. And as we indicated in the update, really pushing us to a range of 8 to 8,800,000. At the moment, there's a few appendices slides. The the

40:01 the information in the slide deck is available on our website. If anybody wants to ask further questions around the appendices, more than happy to take them. But as it stands at this moment in time, this concludes the the the interim presentation for the results ended 03/31/2023. Thank you very much, everybody. Mark, Claire, that's great. And 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 top right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard.

40:49 Claire, Mark, we did receive a number of pre submitted questions ahead of today's event. And as you can see in the Q and A tab, we've also received a number of questions throughout your presentation this afternoon as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And, Mark, Claire, if I could just hand back to you to respond to those where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Okay. I'm just sort of reviewing the questions at this moment in time. I would say there's a number of them that probably requires significantly more in-depth response, to the answer of these questions, which obviously we'll intend to do as immediately, as soon as we can after the conclusion, of this meeting. But just picking up on a on a couple that, we can probably provide some details on almost immediately.

41:38 I think one question that has come in is regarding our our energy price fix, remaining in place. When does it expire? And what is the very approximate impact assuming current market prices? So I'll actually hand that over to Claire to answer that question. Yeah. We currently have rolling contracts in place. We've purchased ahead up until 2025 and we're continuing to purchase ahead when the market is favorable. But to answer the question, if we were to go to the open market now to purchase our electricity for example, we'd be paying approximately 20p per kilowatt hour and we are paying a fixed price of 5.5p, so it's a considerable saving that we're making by having a purchasing ahead strategy in place.

42:33 Okay. Thanks, Claire. There's a question in really about is the overstocking affected sales for the period, and presumably, means the overstocking boosted sales in the previous. I think I've covered that point as we as we went through the presentation that certainly, yes, in both instances, there's no doubt that there was a boost in sales. Consequently now as we see it, that if they'd been taking product at a rate where they actually were going to be using it, we probably wouldn't have seen some of the sales that we'd received in the in the f y twenty two period that would've... We would've then seen in the FY twenty three twenty three period.

43:17 And the second question that was coming from, the the same person was how how do you plan to recoup the lost ATM sales, or is it not reasonable to expect those to be recouped in full in the coming years? Again, I would hope I've covered that point when I was referring to sales within the financial area and that, you know, it... It's a cyclic period that the ATM manufacturers go through regarding design and development of new platforms, new features, new product, and that, you know, at the time, we... We've... We didn't have correct product to meet their their aspirations at the time they were going through the very last platform redesign. But, certainly, as things then move forward and they look to the next platform redesign within the next sort of... I would suspect it's going to be within the next five years, That that ultimately, we will have a... We will have beef positioned in the... With the product and the products and technology that we have, and we'll certainly be looking at whether or not that will include encryption technology as being something that can be added as part and parcel of our solution to market.

44:33 Yes. Again, there's a there's a question really regarding the interim period, obviously, ending trading statement not until the May 4. How come it it took so long to realize there was a sales shortfall? Again, I I think we've covered that point, when we're regarding the sort of the movement and the effects that's happened with the Arouse Gaming Americas chapter eleven event. You know, leading up to the point, the way... The... There was not an issue. We're we're not led to believe there was an issue, although we were constantly monitoring it and had feedback coming from the itself through our through our our representative in Japan.

45:14 But the time that we did fully react was when we built... When we were informed that the, business was actually going to go formally to auction and the consequences of that that might ultimately result, depending upon who buys it. You know, it may be that the business is bought and it just continues and the revenues then sort of... We get the return of the receivables that we're due, and we're able to move all of the product that we've got. Or it may happen that another company buys it altogether, and they don't want to use any of the Arouse product that's being developed specifically for the Arouse sales, and really all the purchasing it for is to get the the order book that Arouse had to put their own machines into the floor area spaces on the casino that the Arouse machines were destined for.

46:09 Yeah. I think there's a there's a there's a lot of there's a lot of different variations of very much the same thing. And as I said, I think a lot of it really requires us to provide a little bit more detail to it than than than just talking about it at this moment in time and questions. So I think if if everybody is okay, I'll I'll draw an end to the questions, and we'll move towards ending the the webinar and the presentation. Mark, Claire, thank you very much indeed for being so generous of your time and addressing those questions that you can for investors. And of course, we will give you back all of the questions immediately after the presentation has ended just for you to review and 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 Investor Meet company platform.

46:56 But, Mark, 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.

47:08 Yep. I I... I'd just like to thank everybody for for taking the time to attend the webinar. The business really appreciates the sort of the the shareholder engagement that the platform allows us to engage on. The questions are are are always pretty much in-depth, and certainly, we look forward to answering those questions. And as part and parcel of our our governance requirements, we very much look forward to receiving the poll once everybody's had a chance to sort of reflect on what they've heard today and what what the... What they want to give consideration to. Mark, that's great. And Claire as well, thank you once again for updating investors this afternoon. 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.

48:02 This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of ZYTRONIC PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you. Thank you.