Austin Engineering Limited (ANG) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Austin Engineering Investor Conference Call. [Operator Instructions] I would now like to hand the conference over to Mr. Sybrandt van Dyk, Austin Engineering CEO and Managing Director. Please go ahead.

Thank you, and good morning, everyone. Obviously, with me is David, our CFO. And the main purpose of today is to address the trading and guidance update we did yesterday and to give everybody the opportunity to potentially ask us any questions that wasn't clear out of that announcement. I will give a very quick update and try to put some context around that announcement, and we do not have a script prepared. So please bear with me. I would like to stress that the main reason for the guidance update is because we're seeing schedule drift, schedule drift that the product that we were hopeful was going to be manufactured across May and June, which is very large -- 2 large months for us. And May and June has always been very large months for Austin, if you go back in time, and it probably has to do with probably reporting periods or more people getting the product into their budgeted periods that they are working in. So we're seeing that drift mostly in North and South America with North America, about $8 million of its sales drifting into the next financial year and in South America about $10 million of revenue drifting into the next financial year. But that is due to us not having our throughput at the right level that we need to, to actually get the product through in time. We have about a $2 million revenue drift in APAC and a lot of this revenue drift is product that will miss the month ends by a few days or will not meet the accounting rules to be revenue recognized as obviously, that has been a lot -- it's a lot harder or a lot more governance around those accounting rules that we want to obviously respect and honor. So that's the main reason why we're seeing this. But I would like to talk through a little bit, give you a bit more color about all the regions that is not clear out of the announcement and where we are up to and what's driving us. So let me start with probably the biggest challenge we have, and that is still Chile. So obviously, we've highlighted our Chile challenges up until now quite extensively. We've been working very hard at fixing a lot of the operational or the challenges in Chile. We've addressed probably everything but fix the manufacturing side to the level that we would like it to be. It's not due to a lack of trying. We have gone and spent a lot of money getting people into Chile, embedding new processes. But what we're finding is that those processes get followed for a few weeks and then it all regresses back in time. So what we've done is Max Flores that is actually based -- is a Chilean but based in the U.S. and runs our U.S. operation is actually in Chile right now, landed 2 days ago and is going to spend the next 2 months actually in Chile in the factory itself, embedding and making sure a lot of these processes that we know what we need to do sticks in Chile. We also notified the market that the OEM contract there has been renegotiated, but we've seen none of that product at that new pricing going through our books as yet. So that will only happen in the new financial year due to this schedule drift, if I can call it that. And that's -- I'm not going to sugarcoat it. That is obviously disappointing, but we do have a definitive plan to try and fix this. The operational improvements that we're doing is fairly universal what we're doing, just to refresh people's memories, we're obviously addressing our planning, our scheduling, our product flow through our facilities as well as just the -- ensuring we're creating and we're working hard on giving people standard work instructions. That standard work instructions did not exist, and that will help us to be more efficient and effective. Going into North America. So North America has seen a lot of improvement and a lot of those improvements that we spoke about has been already addressed in North America, where our productivities have increased to some months into the 80s. Last month was 76, but it has been up to 82, 83 the previous 2 months. So as you can see, our productivities have increased significantly, so that planning, scheduling and flow through our facilities have been well addressed. We still need to work on our efficiencies to the debottlenecking of the facility to get -- to ensure we can actually get the product through as planned in our facility. That does have an impact on unit cost. But like I said, I'm very comfortable that the U.S. are on the right track, got the right team and making the improvements. I also would like to just highlight the fact that I'm not sure the market fully understands and it's probably on to us to educate the market more. In the U.S., one of our big challenges there is product mix. Some of our contracts are less profitable than others. And unfortunately, this year, we've had to deal with a contract or most of our volumes have been from a contract that is less profitable from some of the other contracts we have. Now it's both bad and good. This contract isn't as profitable is the bad. The good is that it's obviously keeping our volumes up and keeping us busy. But just to give you a -- and I won't name the client, but just to give you a bit of a reference point, the margins we make on this client is probably about 10% lower than on other clients. And this contract was signed about 2 years ago. So we're working our way through that contract. In the second half, up until the end of May, that contract accounted for 51% of my revenue in North America. That same contract accounted for 27% of my revenue in the first half. And then if I go back to last year, it accounted for 9% in the second half of revenue and 26% of revenue in the first half. So as you can see, that contract as a percentage of revenue is significantly higher in the second half, which does unfortunately impact our margins. We are, again, confident that higher-margin work will come through. But as we've said, our order book in North America is on the light side as we're going through a cycle and people are diverting capital to new capital purchases rather than replacing their trays and buckets to the level that we would have hoped for. Not that, that business has gone away. We haven't lost that business to competitors. It's just it will cycle through when it comes. Probably remiss of me to say that our order book in South America is very robust. We've got a lot of orders from that OEM that we renegotiated. We've got orders up until the end of this financial -- this calendar year with them, and we will get orders again for the next calendar year. That is 55 bodies just on that 1 OEM contract that we have in hand. We've also -- we've got a big contract down there with a mining house that we rent bodies to them. It's been part of our operating practices down there for a very long time. And that contract has been verbally or an e-mail confirmed as being reawarded to us for the next 5 years. We're actually going through the final contractual negotiations for that contract to be finalized. And then we recently also won some work there with a Tier 1 mining house in Chile that we haven't had any dealings with until 2018. So business in Chile or in South America is very robust. In North America, we're going through a soft patch. And that's the 2 challenges we have. In Asia, as I said, mostly on target. We're basically missing some -- one revenue item of $2 million will not flow through our books that we planned for. So that is a contributing factor to that revenue downturn. But APAC is going really well. We've also worked really hard at optimizing our workflows here, getting that standard work processes in, and it seems to be going really well in Indonesia and the Australian business unit is going well. Again, looking into our order book for the next -- at least for the next 6 months, my Indonesian business unit is pretty much at capacity. We will be producing our full allotment of bodies there between now and the end of this calendar year. We're also doing some underground work for a major client there, and that client that -- as we communicated in the first half of this financial year, deferred some work, has got a very strong order book with us and working with us or talking with us about upscaling that over the next few years, and that's very encouraging. We also, with a different OEM to the OEM we deal with in Chile, have -- we'll be subcontracting for that OEM starting in Batam with 1 unit. We want to ensure we learn from our mistakes in Chile. So we've priced it well. We work really well with this OEM to get work instructions from them. And we've got 1 unit on order. It's a big dipper bucket that we will be manufacturing over the next few months or starting to manufacture over the next few months. And again, that's very encouraging because that will be potentially a significant body of work going -- coming through to us if we can do that properly, profitably and both parties are happy. I will pause there and open -- so sorry, I just probably before I do that. Question I normally get asked is how is the balance sheet looking like? Currently, our balance sheet is looking okay. We do have to refinance the business by October, November this year. We're engaging with our current bankers. And we are obviously looking -- we are actually ensuring we keep lines of communication up with others. And those discussions to date has been encouraging. So whilst there's still a lot of water that has to flow under that bridge, I just wanted to close off with that comment. I will now open the meeting to any questions that anybody has to ask just myself or David.

[Operator Instructions] Your first question comes from Philip Pepe from Shaw and Partners.

Thanks for the extra color. Yes, you've answered my first one. The second one, if I may, obviously, Rome wasn't built, Chile wasn't repaired in the day. How long are you giving the team to get things to the margins where they should be? Is it realistic to assume that FY '27, everything will be efficient? Is it 3 years away? Internally, how long are you predicting before the production is as efficient as it could be?

Yes. Good question, Phil. So I -- probably my answer is Asia Pacific is probably as efficient as it's going to be. Well, probably I shouldn't say that. I think Asia Pacific is efficient, but we will work hard on actually increasing that efficiency by doing a few things. To date, we rely very -- we don't really rely on automation. This business actually has a probably state-of-the-art robotic welding machine in Perth and has had it since 2021, but it's been dormant. We have recently reactivated that. And again, we'll work hard on mobilizing that and other technologies to try and lower our unit costs and thereby both make us more competitive in the market, but also help us with our margin. I do think we are actually efficient in the U.S. Like I said, we're not far from that. My technician productivity is up. We need to actually work a little bit on our efficiencies, but we're not far from that. The issue more in the U.S. is product mix that we need to get right. And I said my order book in the U.S. is low, and that does come with -- I need obviously volume to cover the overhead structures we have in the U.S. But I don't think that's a challenge. The challenge more is work rather than operational execution. In Chile, we've seen significant improvements, like I said, in supply chain, HR, steel management in Chile. It's that operational element. So we know what we need to do. I'm hopeful that I don't have high expectations of Chile for -- but we will be -- in 2027, I will be guiding the business to a low level of profitability in Chile. But -- and hopefully, we exceed that. But if we can make a 5% to 10% profit in Chile, I'll be very happy.

[Operator Instructions] Your next question comes from [ Jay MacGregor ] from [ JMJT ]. Pardon me Jay your line is now live. Your next question comes from Ken Chen, a Private Investor.

I just want to ask, do you expect the next 6 months to be profitable for both North America and South America, considering the fact that the order book is low for North America?

Ken, the short answer is yes. I will -- we are -- so the short answer is yes. The level of profitability we will obviously indicate when we actually release our results, but they will be profitable. There is no reason why Chile won't be profitable. A big part of our business is obviously the OEM contract there. It takes more than 50% of our volumes through that shop, and that has been renegotiated at a 30% increase in pricing that we used to have. So there's no reason why we shouldn't see that profitability flow through once that product gets -- flows through our facilities.

Your next question comes from Graham Douglas from [ Essen ] Investments.

Thank you for your call. You made a question -- a point earlier on about in America where some product lines are less profitable than others. What are the chances of getting those product lines that are less profitable, more profitable? Increase prices or is it purely going to be an increase in efficiency?

No. Obviously, we can renegotiate that contract, and we are contemplating that right now. I just need to contemplate the risk to the business as well. Like I said, it accounts for a big portion of my revenue lines right now there in the volumes and obviously is absorbing the overhead cost that I have there until the new cycle comes through. But we are contemplating relooking at that. But the biggest thing is just fixing our gross margins on that product grouping. So just to give you an example, and I am going to share this, I don't think I'm doing the wrong thing. But the first half, that product -- for that plant, the product we sold and I'm talking about gross margin there. We made a 9% gross margin. In the second half with all the improvements we've done, we actually made 18% gross margin on that same client. So you can see it's because of all the improvements we've been able to flow through the facility. It's been a significant increase in our margins just on one client. But that is still not good enough because obviously, if you actually add our overhead structure, then that margin falls backwards. So we are working on our efficiencies. We still have more to harness in North America and then relooking at the pricing construct of that contract.

Your next question comes from Jay MacGregor from JMJT.

I'm not sure what happened before. Just if you could talk a little bit more about your processes. You mentioned before that you had some process installed, after a couple of weeks some of the staff sort of went back to their old ways. It doesn't feel like processes to me. I just wonder if you could sort of talk a little bit more about that, what gives you the confidence that they will -- those efficiencies from new processes can become more embedded into the overall manufacturing process?

Yes. So thank you for that question. I guess one of the challenges we have is that we are very reliant on spreadsheet management of the business. We are looking at upscaling that and actually putting in better -- so we've actually improved our accounting systems or started that process. We're upscaling our HR systems and one of the areas that we are looking at is outstanding our production management systems. Currently, it's a very manual driven process. So all our scheduling, our planning is actually done in spreadsheets. So -- and that takes a mammoth undertaking to continually manage that planning cycle. So if I can give you a prime example, one of the main improvements we saw in North America to try to take our productivities from 62% to the high 70s, 80 percentage points is just better planning. And the better planning of saying when does steel have to be cut and prepped for -- to start the process? When does all our workstations, when does the product flow from one area to the other, Japanese call it the Kanban system, right? So the flow-through system, you can call it anything, but effectively, it's that various handover systems. It is very high and then you need to have discipline to stick to that process to ensure you do not have people standing around waiting either on product to come to them or maybe a crane or something like that. It's a highly integrated planning system that we currently do manually. So that is what I'm referring to. So when those systems get deployed and operated in Chile, other priorities kick in or the discipline isn't there to follow that process and not to be distracted. And that's one of the challenges we're facing. And then the other one is in Chile, it is a different operating model than anywhere else that I've ever seen in my life is we actually do have a lot of contractors in our space. And those contractors work in our facility, but they're not like a normal Western contractor where they take direction from the Austin management team. They actually have their own management team in place that actually operates in our facility. And with all the growth, that has been one of the main sources of labor for Austin. A lot of those contractors will do what you ask them to do upfront and then they actually will remake and go back to the way they operate, which then disrupts our production flow. To give you a little bit more color, we had a large -- and probably what set us a bit back in Chile, we had a very large subcontractor in Chile that we recently set our relationship for exactly this reason. So we're displacing -- we have displaced that contractor with a contractor that is known to ourselves, especially with Max and have worked with Max before and which will -- we are much more hopeful for and confident that they will follow our work instructions. So I hope that explains it.

Can I ask a follow-up question then?

Yes.

If you're heavily reliant on spreadsheets and you're a global business, it sounds to me that the controls and just risk management and your oversight at head office, if you like, can become very challenging. And just generally, when people are operating off spreadsheets, just human behavior that sort of bad news can travel slowly back to head office and good news travels quickly. What gives you the confidence that you have the visibility that you require so as to not have the sort of these sorts of announcements?

Yes. So I don't think this announcement has got a reference to that. I guess like any business where you are far away, we are heavily reliant on the people we've got in the chairs. So for instance, that in Chile, well, we went through a total cleanse of our management team there for some of the reasons you just mentioned. And we have embedded or we put in place rigorous management oversight on our monthly processes. So we -- Dave and I sit every month looking at every single account through Chile, looking at their performance, looking at what's in their work in progress, how dated that work in progress is, what's their steel offcuts, what's their steel wastage, their scrap levels. And just to put a little bit more comfort there, every steel -- steel is our biggest input cost, that is actually managed out of North America for Chile, where they will sign off on every nesting that files effectively taking steel either from steel plate, that is new steel plate or off cuts to process. So that's what we do. We are heavily reliant on oversight. So we have numerous meetings early mornings or late evenings with our respective teams to ensure we have that governance structure in place.

Are you pulling the reins in on just contract pricing well and how you go about that? So what visibility do you have over large contracts on pricing?

You mean for customer pricing?

Yes.

Yes. So we have a tool. Again, it's a worksheet tool, but it's a price to win, what we call a price to win. We have guidance on the business as what they can price that at. So if they want to price it at a lower level than what our guidance is, they have to elevate that through the structures, and we've got a delegation of authority matrix for that or if the contract is over a value, it has to elevate. And if the contract is large enough, it will go to our Board.

Your next question comes from Samuel Cash, a Private Investor.

Sy, earlier in your comments, you said that Chile was a key drag. I understand that. You also said that a senior manager was -- had flown into Chile in the last 2 days. I raised the issue of fly-in fly-out management. And I wonder whether that is part of the problem in Chile and certainly fly-in fly-out management is not usually conducive to consistent efficiency. Is there any better value in stationing a senior manager in Chile to keep a ruler over the works in that place. I understand your contractors are different in Chile to other places, and that perhaps is more reason to have a senior person on the ground watching it day by day.

Yes. It's a very good point. And no doubt, we have contemplated all these various options. Let me maybe just explain it and maybe it's per choice of my words. We do have -- I mean, the general manager in Chile that joined us in September has done an enormous amount of work trying to clean the Chilean business up from contract -- subcontractor, contractor management, HR, steel prep, security, all of that. And it's a phenomenal workload that is done. So I think that individual is well placed and I think is well set. What we're missing in Chile is deep manufacturing fabrication experience, right? We have -- we don't have it at a high enough senior level. That skill set is really hard to come by and to get in the region where we are based. So we are based in La Negra. I am going to reference that is like -- or Antofagasta, that is like getting people to work for you in Kalgoorlie, in Western Australia. It's a mining town when we're competing with mining wages. So it's a tough, and that's the challenge we're bearing. The challenge is, there is not many manufacturing experts in that region. There's a lot of people that actually do what we do, but there's a lot of what I can call repair work rather than actual building it up. Max has got deep manufacturing experience, right? It's embedding that tool set that we have. And once that tool set is embedded and it actually is forced through, and we can then say it's there, it's stuck. That's why Max is there for the next 2 months. Now Max has been to Chile numerous times over the last time. And yes, I take your point of fly-in fly-out, and we've had many other of our North American managers going to Chile to help them. But this is a putting in play those tool sets, that discipline and ensuring our manufacturing people that we have -- can carry the torch going forward with Max overseeing that. So that's why Max is there. And I'm not sure if I addressed your question properly, but that's what we -- the current plan that we have. And I feel reasonably comfortable that, that is the best option because I do have trust in Leonardo, our General Manager down there.

Thanks Sy. Sy, in the end, it will be all about outcome rather than words. So we can move forward on that. But the other -- if you like -- I just wanted to raise very quickly with you was communication. I think today's call conference is a plus, and I congratulate you on that. It would probably be helpful to us involved in the industry, if you would consider a quarterly call conference so that we can listen to you and understand better the operational efficiency of the business. And I'll leave that one with you.

I will definitely do that. I will take that on board.

Your next question comes from Mike Menell a Private Investor.

Yes, I just want to follow up from what the previous investor was saying. And say thank you for this telephone conference. And particularly for allowing so much time for questions from shareholders like myself. As you -- you only have to go to HotCopper or other shareholder/investor blogs, and you will see by far the highest number of posts are complaints that Austin has not been transparent enough. And we all know what happened FY '24 going into FY '25. So I can assure you, every single shareholder is hoping that you will bring far more transparency into the dealings with shareholders than we've had in the past because we feel while some of the facts in Chile were not readily evident, it was very hard for us to comprehend that it took so long before this was actually revealed to the market when prior updates had indicated everything was going well. So I just want to reiterate, I think a quarterly telephone conference the day after you do a trading update is by far the best way you can give confidence to shareholders. And we need confidence. We've been hammered. I mean most of us paid in the $0.40, if not $0.45. Thank you for that. Okay. And also, you've given several live examples today in your conference, for example, going from a 9% gross margin to an 18%, increasing efficiency from about 70% or high 60s up to 80%. Those sort of hard numbers give us an insight, which we don't get when people just write airy-fairy sentences. So please keep that sort of presentation going, and it's certainly welcome. Okay. Having said all that, I've got 2 questions. The first one, your -- I think you said his name is David, your CFO next door to you might want to answer. It's short and simple, but it's by far the most important thing shareholders want to know. And there's a lot of fear right now in HotCopper that we're going to show a negative free cash flow for FY '26. We're only 13 days away from the end of the financial year. So you must have a pretty good idea. Are we going to have a net-net profit this financial year? Or will it be a loss?

David here. Just in response to the operating cash flow, free cash flow. To date, we have been trading in a free cash flow position. So our cash flow actually has improved since the prior year. A large part of that is the steel management and work down of the inventory. So it's been implemented and it's tightly controlled, particularly in Chile, where we've drawn down excess inventory that's been kind of flown through into our cash position. Also, the -- some of the new business we've recently received, we've been fortunate to still push within the Asia Pac region, the advanced payments. So that's still occurring, which is good and has strengthened into the second half. And in terms of the overall trading performance, the expectation at this stage based on our numbers is we will have a bottom line profitability -- profitable position.

Yes. We will definitely be profitable. We obviously -- our EBIT is still -- we're saying $10 million to $11 million. So that is -- we're profitable. I mean I take your point on cash flow. But yes, we're still good. I'm not saying it's not tight, but we're still good. And as David said, a big part of what we actually experienced is because we're actually asking for deposits upfront when clients pay purchase orders. We have seen some of that unwind as our order book has unwind in North America, but then we've seen some of that flow back into Asia Pacific, where our order book is probably stronger. So but yes, so -- but from a cash flow perspective, we're still positive, if I can call it that way. So I don't think there's any too much concern there.

Well, that's a huge relief. I know a lot of shareholders will be feeling the same thing. Okay. My next question is, you did mention at the very beginning that instead of replacing trays, quite a few mining companies have just been buying brand-new equipment. Obviously -- well, not obviously, but I assume with OEM trays fitted. However, North America has been a shining star for, what, 2 to 3 years. And as you know, Austin had to buy or lease new premises just to handle the rapid expansion in work. So I've been under the impression that things were really humming in North America. But you said earlier in the conference that the order book has dropped away substantially. What's been the cause of this?

Yes, it's exactly as I said. Basically, one of our largest clients in North America recently placed orders for about 550, that's our information, orders on new capital equipment to expand their oil sand operations. So their management team pretty much said all capital outside of that fleet replacement enhancement is going to be put on hold. And therefore, they aren't going through that replacement cycle. So bad news for us in the short term because that's been a big driver of that revenue line over the last years you mentioned, but probably so the silver lining down is that at some stage, we're going to have a backlog of those orders coming through us, but it's just not -- unfortunately not happening right now. So I hope that answers the question. If it's not, I can try and explain more.

Well, yes. Well, you have answered it. I also have shares in tungsten companies and other rare metals. And a lot of the old tungsten mines and heavy metal mines in Nevada, which is not far from Wyoming, are reopening as we speak. Are you seeing any orders likely to come from these outburst of mining in Nevada?

Yes, we will see some orders coming through, but I'll probably -- the biggest bulk of our volumes come from what we call the base commodities. So where they're moving a lot of dirt. So rare earths and tungsten, unfortunately, they don't move a lot of earth and some of those operations are underground as well. And we don't have a big workflow from those. Where we get big workflows from is obviously the iron ore mines, coal, oil sands and copper because they are bulk commodities that they use. They obviously move a lot of overburden and ore in the mining of those operations. So even gold, I'm not saying gold is not a driver of revenue, but it's not a significant driver of revenue.

Okay. I was going to say thank you, but you've just triggered something. You did mention in -- I think it was at the AGM last year that because of Trump's tariffs, you were having problems sending or selling into Canada. So you weren't selling -- building the complete tray in U.S.A. Instead, you were sort of sending the basic parts and then it was -- the assembly was being completed across the border in Canada. Is this still the case?

No, it wasn't last AGM, was the AGM before that. But yes, no, I'm trying to do everything in Casper. The main reason for that is that once we -- yes, we sometimes can't ship a product because of the size restrictions in 1 configuration and a fully finished configuration. So therefore, it has to go into either 2 pieces or 3 pieces and sometimes 4 pieces up to a specific site. And then we have to use a local provider to actually do the final assembly. As soon as we do that, it eats into my margin, right, because I'm then sharing margin with a third party. So my -- our preference is to do as much work internally and not to outsource any work.

Right. Well, just to reiterate, thank you very much. This increase in transparency makes a huge difference. And I'm sure it will affect the share price. So thanks for today's conference.

Your next question comes from Graham Douglas from [ Essen ] Investments.

Sai, you mentioned -- I can't remember it was last year or the year before about the enterprise resource planning system you're putting in place. And if I understand what you said correctly today, you've got it there basically in finance and HR. How long do you -- and you also mentioned, I think, correctly about that system that you were going to standardize it across your sites so that you could get a better visibility over productivity and flow and everything. Is that still the case?

Yes, that's the long-term plan. So let me give you the details around that. So the business had various financial management systems across the company. Even within Australia, some of the business units had different financial systems operating and in Indonesia. So the first thing that the team did is they implemented Oracle NetSuite in the finance systems, and that is now fully embedded in Australia. The North American team uses Infor. So we are actually going to roll out the NetSuite financial systems the Oracle NetSuite systems over there. The aim is to go live early July. Let's see if that happens. It might not happen to early July, but will happen in the first quarter next year. Then we actually will roll out that same financial system in Chile. They use a system called Spring. It's an old system. It's functional, but just. So that's the aim to actually ensure we've got one financial system across all the business units. So the next thing that we're doing, so that's the one. So if you look at Yara in Australia, we do have a manufacturing system, but it's pretty much a homegrown database that was created. In North America, we use a system called Infor and with spreadsheet control over around that. And then in South America, pretty much spreadsheet. The -- so the aim is to roll out the financial system so that we can have the same financial system processes, and that includes purchasing attached to that across the globe. The other one that we're working on simultaneously but not linked is an HR system just to get better control over the HR processes. And we're doing -- we're rolling out a program called Workday there. Now that program has gone live everywhere except Chile. And the reason why we haven't gone live in Chile is just purely because we don't want to overpower the team there that's focused on operational control and management. And we will flow through in Chile, but we just need to ensure we don't -- I don't detract the team there that has got their hands full. But that workday has got 3 phases. We're doing Phase 1. We'll embed Phase 1, and then we'll see if we want to go to Phase 2 based on the business case that has to be crafted for us. In all of this, we're also looking at how do we actually get a system that is actually a manufacturing system. So we are -- we have explored 2 systems. We are currently leaning towards a product that's in that Oracle NetSuite realm, that's called Delfoi. Now Delfoi is an operational management and planning -- an operational manufacturing planning, scheduling and execution system. That's what we're doing. But that will take a bit of time. So I hope that answered it.

What sort of time frame do you think?

So obviously, the HR system is being rolled out. I would like to have that manufacturer because it's the finance system fully embedded by the end of this financial year across the business -- sorry, next financial year, FY '25, '27 as well as a standardized production system across the company.

Your next question comes from Evan Kourambas from [indiscernible].

Look, my question has probably largely been answered by the last caller, but it's just frustrating that you've got -- you run a pretty substantial business, $300 million-odd business, and you've just told us that you don't really have an integrated manufacturing platform to run that business. And you're sort of relying on spreadsheets and it's all cobbled together, which would make it very difficult for you as the leader to know what's going on. And subsequently, we end up getting these sort of calls happening. And it looks like we're now going to wait another year or 2 before you can actually get a proper manufacturing system integrated with your financial system and a complete [indiscernible] to make it all work. And like others, I've run businesses, and I know you can't do it without something like NetSuite to do your planning and your cash flow forecasting, et cetera. So I'm just finding it a little bit frustrating that it hasn't been implemented, and it's going to take a little bit longer from here, a couple of years from here, for example.

Yes. So can I just do that? I mean, obviously, a system and all systems make your life easier. I don't think it detracts from the fact that we can do this without systems or the systems we have in place. This is more a disciplined execution framework. And yes, it might take a little bit harder time to actually get data and analyze data and prosecute that data, but it doesn't stop us from doing that. It just makes it a little bit harder, and it makes it a little bit more work. But I don't think it detracts from this. Our biggest challenge is discipline. Our biggest challenge is execution and giving the teams that work instructions, call it recipes, recipes to stitch our product together. That is what the main aim is the planning and that -- but we can do this all. I don't want people to think that that's -- I don't think it's an excuse for the situation we find ourselves in.

There are no further questions at this time. I'll now hand back to Mr. Sybrandt van Dyk for any closing remarks.

No, I don't have anything else. Thanks for your time. Thanks for your interest in the business. Thanks for your questions. And we'll definitely take on board and host our quarterly conference call going forward.

That does conclude our conference for today. Thank you for participating. You may now disconnect.