Aurrigo International plc (AURR) Earnings Call Transcript & Summary

Okay. So I think maybe we'll get started now. And so thanks again to everyone for joining. As you will have seen in the e-mail, this will be available via recording on the Aurrigo website afterwards. But thanks for those of you who have made it live. And so it's a pleasure to have Dave here to chat about Aurrigo and also have Louisa here from who's also advising to Aurrigo in this capacity. And so I'm from InvestorHub. We support Aurrigo with their Investor Relations via their website and other tools such as today's webinar. And then I'd like to ask Louisa to introduce yourself and then we'll get over to Dave.

Sure. Thanks,. So hello, everybody. I'm Louisa from Strategic Communications. So we handle Aurrigo's Investor Relations and PR. So that means that we work with David and the team on results announcements, webcasts like this one and sort of making sure investors and analysts have clear information on how the business is progressing. So yes, great to be here today. And if any of you have any questions after the session, I'm always happy to help.

Thanks, Louisa. And then, Dave, would you like to give yourself a short introduction and then we can jump into some of the questions that have been submitted in advance.

Yes, sure. Thanks very much. Yes, great to see everyone. Thank you for so many who are online live. My name is David Keene, I'm the CEO and founder of the company. And it's really great to get this series of webinars going. This is the first one, and hopefully, many more to come. I'd like to thank Louisa and also Fintan because part of these webinars is all about getting the softer side to the company, and exposing to shareholders and nonholders some of the things that we are doing and the people that are working not only in the company but also as our advisers. So it's great to have Vincent and Louisa on the call today. We have a number of questions that we have had submitted, which is fabulous, and thanks for that. And as I said, this is all about a more relaxed way to get to talk to me and get a feel of what the company is doing rather than the more formal reporting that we would do at end of year or interims. So we're going to make it a relatively short session this morning because everyone is busy and got lots of things to do. But we will cover some questions in a little bit of depth, but if people want to get that in more depth, we'll swing that into future webinars, and we'll cover those items, because there's a lot of questions coming in, and I'm not sure we can cover everything in the detail that people want. So Vincent is going to help me out. Saves me reading my bit of paper that I've pre-done, getting my glasses on. So Fintan, if you'd like to help me out with the first question, that would be great.

Yes, certainly. Thanks, David. Thanks, Louisa. So yes, I think maybe starting with some of the recent great news that we've all seen. Your largest ever manufacturing order was placed recently, I believe, were UltraGlobal, a 6.28 million contract. So yes, I think there's been a few questions about how that's all come together. And if you'd like to talk about that a little bit to get a state.

Yes. Yes. So a really exciting contract for us and borne out of a strategy that probably goes back maybe more than a year ago now, where a Board level, we identified that really in addition to the institutional investors that we had and that we've had more since, which we're very proud to have on the shareholder base. We really wanted to see whether we can get some strategic investors coming in. And when we meet strategic, we mean customers -- sorry, investors that can turn into potential customers or can door open us into global potential customers. So it was really fantastic to get next-gen mobility onto the shareholder base. They invested GBP 9.75 million at the last round. And they are very very prominent in the world of mobility, investing into multiple companies around the world. And one of those was to purchase the intellectual property rights for the PRT system that's at Heathrow. So if anyone has been to Heathrow Terminal 5 and gone into the pod parking area and taking the little seat apart from the car park to the terminal building, next gen have actually bought the IP for that. And then they came to us because of our expertise in not only autonomous vehicles, which it is but also in our ability on the automotive side to design and develop vehicles and produce them. So that's turned out really nicely in that we were given the first off small contract for us to look at the IP that they purchased and to do a bit of a gap analysis on that. And from that piece of work, we then won the contract to bring that design of the Heathrow IP and system up to modern day levels because it was first developed and installed in about 2012. So if you can imagine, electronics and software needs updating. So we've been working on that. And as part of that contract is to build the first 25 of those vehicles, which we also hope will turn into more than 25 because NextGen are very confident that this PRT system can be applied in multiple locations around the world. So we're well into that program, and we will have significant revenue of that in '26 and the balance in early '20 -- or mid-'27 when we deliver the 25 vehicles. So exciting times, proper strategic investor and our strategy at Board level coming through very nicely.

Yes. Thanks, David. And then moving to the ground handling license at each Midlands Airport for live deployment. And could you want to speak a little bit to that?

Yes, just 30 seconds on that. It might seem to shareholders, it's a bit of a weird one that we're currently trying to get a ground handling license. But it was really a means to an end because East Midlands Airport, where we're doing the cargo and passenger project with UPS, there's a little quirk in the way that, that airport works. You really can't operate vehicles on the airport unless you've got a ground handling license. So I wouldn't say we were forced into it, but it was a strategic move that we needed to do that. It wasn't a huge overhead for us, but it did give us some really good background knowledge of what a grand handle has to do, what's the contract, what are the requirements with the CAA. So yes, we went through that process. We got a ground handling license, and that's enabled us to operate the vehicles at East Mids with UPS.

That's very good. And then on the new U.K. home facility at Power Park and Coventry, I know it's a much bigger facility than your previous facility. I think you're moving more and more operations there. Did you want to speak a little bit to that?

Yes, sure. So I'm actually speaking to you from my new office at the new facility at Power Park. It is a significantly bigger facility more than 3 times what we actually had in the middle of Coventry. We're actually only 3 miles away from that facility. So the move has been progressive. We had 5 units at the old facility. We've moved 3 of those units and all of the people and all the facility over here, and we've handed those units back to the landlord. The other 2 units, which predominantly have all of our automotive business, they're now confirmed as moving in the last week of July, this month and the first week of August. So we shut down operations on the 24th of July, and we are fully functional here from, I believe, the 10th or -- Monday, the 10th of August. And then we will sort out any dilatation on those buildings at the old facility and hand those back as well. All of the move actually has been done very cost effectively. In fact, we've done it all ourselves. We're pretty used to moving things around and dropping facilities off and gaming facilities over the 33 years that we've been in business. So we're able to do a lot of these things ourselves. And I must say the team has done a terrific job in the planning of getting this over here and moving the automotive business in those 2 weeks is, again, strategically planned because those are the 2 weeks that are traditionally the shutdown weeks for Jaguar, Land Rover, Aston Martin and a large number of the vehicle OEMs, who are our clients. So while it's quiet on that front, we can move the facility. So that's all looking good. And we've settled in the new facility. I have to say, I personally think it really reflects our ambition as a company now. And I know people who have visited us, whether they be suppliers, customers, in fact, some shareholders have visited us as well. They're pretty wound out by what we've got. And we've done all of the move and the negotiations in a very cost-effective way, and we will continue to do that as we go forward. So really super exciting. It's like being reborn from the 33 years in the old buildings and I'm now on now in this super facility, which is world class.

Yes. Good for you. And in terms of personnel, you recently brought in Mark as the Director of Global Airport Operations. Could you talk a bit to the thinking behind that hire?

Yes. So I would say that we have shareholders know, we've been traditionally an automotive company, and we're very specialized in how we do that and the knowledge we've got in there. Since 2018, it was the moment we went into the aviation sector, and we have learned a lot. I personally have learned a tremendous amount about how airports and airlines operate in that time. But there is nothing like having someone who's had pretty much decades of experience right at the sharp end and knows how right down under the skin, how all these operations work. And it was, again, strategically really important for us to get people with knowledge of absolutely with what is happening in the airport industry. So Mark has joined us from Gatwick ground services, a pretty large company, wholly owned by International Airlines Group and operating their British Airways operation out of Gatwick, but also Mark negotiated some of the other contracts with Qatar and India and others. And he was Managing Director there. So he was literally and that's the whole operation and has come in with a vast amount of knowledge and has already made quite a big impact in terms of linking us to companies that he's worked with. And that is part of as well of all of our hub strategy in expanding the company and getting more knowledge of really how we're going to scale the business within these aviation sectors. So Mark was Managing Director, as I said, GBP 60 million turnover company, 1,200 employees. So he really has got experience. And we've made him Global Director for Airport Deployments. He has already taken over every deployment we have globally and is actually just arrived in Cincinnati today, which will be his last globetrotting stop. He's been to every location, from side to Singapore to Zurich and back, and now he's finishing up in Cincinnati. And he's taken over the teams there, and he's really driving us forward on that. So he's a great acquisition into the company. So we're really pleased to have him here.

Great to hear that. And I think that dovetails nicely with the next question, which is what kind of milestones remain before some of today's expanded airport pilots convert into those kind of commercial fleet deployments?

Yes, that's a good question because shareholders will be thinking that we've been -- we -- when we list, we listed about 4 years ago now, and technology and technology implementation into -- particularly into airports just take quite a long time. They're a very conservative group of people and they're obviously incredibly safety conscious. And we are the same. We are a very safety-conscious company. So things have to be done correctly. It is regulated through civil aviation authorities in different jurisdictions. So you just can't walk in with some equipment or system that you've made in the lab and it works in the lab and they're going to chuck it into an airport because that would be wholly irresponsible. It does take time to do these things, but I have to tell you that the technology of the vehicles that we've developed, the way they drive, the systems that then coordinate them to run these fleets, is all very much advanced and has gone through significant testing in multiple companies in multiple countries. So really, the things that we're really working on now, yes, we are continuing to develop and make the vehicles drive better, better and better, but actually, we're at a point now where the thrust of the company is more into how do we get the systems and integrate the systems and get the reliability and repeatability such that we can take those kid gloves off and the vehicles and the systems will run themselves. And that's where we're spending all of our time or majority of our time getting that robustness with our customers. So I'm hopeful that we'll see something within 2026. And certainly, in 2027, where we see these vehicles actually start to go out into live operations.