Costain Group PLC (COST) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to Costain's preliminary results presentation. Little change today that as a result of coronavirus, we're doing a live webcast simultaneously with the physical presence here because quite a number of people are under travel and meeting restrictions from their own organizations, hence the different approach. Just by way of introduction before I hand over to Alex. I think the first thing I should say is to acknowledge that 2019 was a challenging year for Costain in terms of the results, but below that is also seen an acceleration of the transformation of the group, and Alex will be talking more about that as he goes through the presentation. I think, underlying our performance, we had a very positive order intake last year, GBP 1.7 billion, and we see increasing opportunities as the new conservative government really comes forward with its proposals to increase infrastructure spending, both the level of the U.K. to decarbonize and make the U.K. more resilient. So I think we're seeing increasing opportunities out there that we can take advantage from. And in order to take advantage of those opportunities, as you have already seen, we are seeking to strengthen our balance sheet and make sure we're in a position to take on those new contracts by raising up to GBP 100 million of new equity, which is fully underwritten on a standby basis. So we're really trying to get ourselves in a position where we can capitalize on those opportunities as they develop. And in fact, as they're developing already. So having said that, Alex, let me hand over to you.

Thank you, Paul. Well, good morning, everyone. A lot went on in Costain in 2019. And this morning, Tony and I want to make sure that we give you a very clear understanding of what's -- where we are with our business: the results that we're delivering; the market opportunities that are available; the strategy that we set out to increase the value of Costain; what was behind some of the challenges that we experienced last year and what we've done about it; and also to talk about the exciting opportunities that we have ahead of us as we grow and develop the business. 2019 has been a year of transition for Costain, and in today's results, as Paul said, we've announced full year profits -- operating profits of GBP 17.9 million, in line with the guidance that we gave following the trading update in December. We've also confirmed that we've continued to make good progress in continuing to win some pretty good work. We've won GBP 1.7 billion worth of new work and orders from our clients, a clear demonstration that they see the value that we're bringing through our services. And the Leading Edge strategy is now well embedded in our business and is starting to deliver results, and I'm going to talk more about that. But as Paul says, we're now in a backdrop where we have very strong market opportunities and that gives us great confidence for the future for us to continue to grow and develop the business. And we've got GBP 23 billion of addressable market every year already for us as a business. And I think what's really important about our announcement today is many of those opportunities are now. We are very busy in bidding work for our clients on big strategic programs on the back of the government's commitment to investment and infrastructure. Our clients are able to make that decision to commence that work now. But as Paul says, to take advantage of those opportunities, we've today announced the planned underwritten equity raise that we're going to make, to strengthen the balance sheet of Costain to position us to really take advantage of that market. But before I hand over to Tony to talk us through the numbers, I just want to talk about the rationale for the investment proposition in Costain and the equity raise. Our clear investment proposition is fourfold. As a business, we have a long-term track record as being one of those premier league players in our market, as one of the smart infrastructure solutions player meeting the critical needs of our clients. And we have a track record of being able to deliver those broad range of services right across their life cycle to be able to help them with their changing challenges. We're also very well positioned as a leading business in what is a sustainable and growing market. We have a GBP 23 billion market opportunity across transportation, water, energy and defense, focused around meeting those key strategic needs for the U.K. And on the government background today, that opportunity is even stronger with a real commitment to unlocking economic growth and decarbonizing the U.K. has been led by the government. We've also, really importantly, got the strength of the relationships with our clients. Because we are very client focused, we truly understand their strategic priorities, their needs. And that's underpinned in the GBP 4.2 billion forward order book that we have today, the fact that we have a record of achieving 90% repeat order work and that we're serving our clients with a much broader range of services. And that brings us to us having a very focused Leading Edge strategy that aligns our business to meet the changing needs and spending priorities of our clients that will allow us to accelerate our growth and enhance our margins. But as part of that strategy, I've also had a really strong look at the business about how efficient we are. And we've identified a program that is now in place for us to deliver self-help measures that we're going to deliver GBP 20 million per year worth of efficiency, and we're going to use that efficiency to drive the acceleration in the development of our capabilities to move us to the targeted margins that we've got. But coming to the equity raise, there are 3 key factors that underpin the proposed capital raise that we're making today. And from a market backdrop, it's about the growing market for infrastructure and the growing opportunities that we have that are here and now and present today. It's also about the fact that our clients are placing longer-term, more strategic programs with us, and therefore, they are forensically looking at our balance sheet to ensure that we are as business have a strong and stable base and a strong and stable balance sheet to support them. And we're also -- we've responded to the changing structural changes in our marketplace. We've had improved supplier payments that we've made big changes on already. We've got joint venture bank accounts, which are now holding up a lot more cash retained in those joint ventures. And clients are continuing to use project bank accounts on an increasing basis. And all of those things are affecting that. But we're also having to affect some of the headwinds that we met last year as we strengthen and ensure that our balance sheet has the headroom for the working capital investment moving forward. Tony?

Thank you, Alex. Good morning, all. That's both for those in the room and those who are listening live. So as Paul and Alex just touched on the highlights of the financials, so this slide has just got the highlights on. We've got an underlying operating profit in the business of GBP 17.9 million, and I'm going to talk through that in quite a bit of detail. We finished the year with a good cash position of GBP 64.9 million. And again, I've got quite a lot of detail, and I'm going to walk you through the cash movements in the business. GBP 4.2 billion strong order book. And we have taken the decision as part of our balance sheet strengthening to paying out final dividend. And I'll talk you through our balance sheet as we go forward. So getting into that detail. Firstly, revenue. So as the chart on revenue on this slide suggests, we have seen revenue growth in the business over the last -- over a number of years. But over the last couple of years, we've seen the fall in net revenue. And that is a direct result of some large capital programs coming to their completion. Most notably, within the rail businesses, as the bars suggest, where we've seen the completion of our London Bridge Station development project together with the Crossrail program. But also some other changes, a lot less material. Obviously, we're going from AMP6 to AMP7 within our water businesses, and there's always a transition in revenues through that. And also within our energy activities, we're refocusing those away from the kind of EC -- EPC project delivery to some of the higher-margin consultancy engineering services. Just a little bit of guidance on revenue in terms of our secured position, including the main works on HS2. There is opportunity for us to grow our revenues in 2020 and beyond of our guidance. And that is based on a secured level that we've got today with those HS2 higher than where we were this time last year. Turning to the profitability of the business and, most notably margin. Again, as the chart suggests, we've seen a number of years of profit growth and margin growth in the business. But as Alex has alluded to, in 2019, there were 2 significant items that impacted the profitability of this business. Just to remind you of those. Firstly, in the summer, where we saw a delay in a number of our contracts, notably HS2 and also the cancellation of a contract M4 Corridor around Newport. And that required us to reassess the revenue, the profit, the business forecast from there, which is what we did back in the summer. And then in December, we saw the impact of the arbitration on the A465 contract. And we, as a result of the outcome of that arbitration, had to reassess our position on that contract and took a decision to take a GBP 20 million provision against that. So those are the key moving parts in terms of the profit in the year. In terms of margin, obviously, the second of those impacts upon the margin of the business. If you strip out for a second, the A465, the underlying divisional margins, so if you take out 2 divisions and the margins that they are delivering are at 3.9% for the year, which is consistent to where we were at the half year, give you the sense of the margin position. Just turning to the income statement of the business. I've touched on the kind of divisions. But just to remind you, transportation delivered GBP 9.7 million at that margin of 1.3%, including the A465 and natural resources up GBP 15.4 million, as it says here, margin of 3.5%, and I'm going to come through the margin bridge in a second. Just a few other points of detail, just in terms of Spain. So in December, we sold the land and golf course holdings in Spain. And we are intending to sell the Marina Concession that we hold in the first half of this year. And that will be an exit from all of our operations in Spain. And then on the finance charges line. So for the first time, this includes the -- we -- the new accounting treatment for leases, so includes GBP 1.3 million for IFRS 16 in that number this year. Also includes the cost of our banking facilities and interest costs, et cetera, but that's the key movement during the year. And then on tax, we've had a bit of a one-off tax credit from old provision -- provisions that we were holding that are now released. So going forward, our tax rate will be more normalized, somewhere between 17% and 19% normal tax -- effective tax rate. So a bit of detail on income statement. I just want to touch on margins, and just talk you through the kind of moving parts within the margins. So firstly, in transportation. So we have seen margins in our rail business decrease. That's a direct result of the fall in our volumes, some contract settlements, but also the high level of overhead and work winning costs in rail, given we're pursuing a lot of opportunities there. That's been more than offset by enhancement of our margins within the highways, excluding the A465, where we're seeing really good returns from a range of activities in highways. And then we've broken out the A465 separately to give you that breakdown. Just in terms of guidance, again, so excluding HS2 main works for a moment, just excluding that for a moment, the revenue in transportation and margins will come down naturally because of that operational gearing. But there is opportunity with the HS2 main works for upside on that. Just to give you the sense of the right guidance regarding the transportation division. Turning to natural resources. So firstly, water. As it says here, we've seen good growth in our margins in water, and that is a direct result of the changing mix in services. And Alex is going to talk about that in a lot detail in a second. Also, within natural resources, in energy, as I said, we're kind of refocusing our energy activities. So that has been impacted by lower revenue in energy, the impact of a final settlement on one of our contracts and that real extra cost associated with the refocus on high-margin services. And then in defense, where we only do professional services, we've seen our margins add up -- edge up in defense. And the other thing that's quite important is that we've broken out on this slide is, how we're investing pretty heavily in our technology capability. So both divisions, we are investing in the skills, the capabilities in terms of technology opportunities. And that is a -- today, that is a drag on our margins. And in P&L terms, that's over GBP 7 million of investment, and I think that's pretty close to double where we were last year. And then in capital terms, we've invested GBP 3.5 million in a new technology center, out in Bristol, pretty heavy investment. And it's kind of that -- those items that are impacting the kind of split the margins within the business. So as you know, we've set out a very clear strategy regarding the mix of business. At the moment, we're about 1/3 higher-value, higher-margin services, 2/3 complex delivery. But actually, the margin from those activities are not that different. And that is, of course, because of that investment in the skills, the capabilities, the work winning in that higher-value services that we're looking to grow. Okay. Just a bit of an update on some key contracts. So, I've touched on HS2 a couple of times. We have a enabling works contract live. If you've been to Euston station, you've seen a lot of the work that we're doing there. And we're successfully delivering the enabling works in the Southern section. And then we have 2 main works contracts, it's actually known as S1 and S2, and that is the section between Euston out to the M25. We've got professional services contracts there, but we are still awaiting the formal notification to proceed the main construction activity on those contracts, just to be clear. And when we get that notification, that will enable us to give pretty clear guidance around the impact of that on our numbers going forward. In 2020, that's probably more limited as we have been cautious about our profit take in the first year, but opportunities for enhancement in full year '21 and full year '22 and beyond. Just the A465. So a bit of an update there. We're continuing in dialogue with the customer there. So it's constructive dialogue about the right finances for this project going forward. And we'll obviously keep you up-to-date as to where they are. But there's no change in the assessment that we made back in December regarding where we are with that contract. We're also highlighting this morning the Peterborough and Huntingdon contract for National Grid. A bit of a background on this. So this is a contract that we are upgrading to compressor stations for National Grid, one in Huntington, one in Peterborough, hence the name, started back in 2017. And in January this year, there was a reforecast of the outturn cost on that contract and because of changes in design changes in scope, quite an increase in that outturn cost. And therefore, we're in a commercial process with National Grid in accordance with the contract regarding the resolution of those costs. The majority of those costs are close to completion, so on cost we've already incurred and completion date is now October 21. And National Grid have a pretty formulaic process around that, which we're in. But that process means that we have to demonstrate our entitlement. And therefore, there's a natural 3- to 4-month working capital cycle associated with that. And therefore, it's appropriate that we, given the materiality of that, that we disclosed that this morning as part of the results. We are very confident about our full entitlement of that. This is about the commercial process for the reimbursement of those costs as we go through the contract. Just one more on the contracts and the risk profile. So obviously, as you'd expect, on the back of the A465, what we've done is look at the way that we manage contract risk in the business, and we've tried to set out here the kind of 4 steps. So firstly, the way we go about selecting contracts and bidding. So we have a pretty rigorous process internally. They will tell me it's way through rigorous around a 5-stage gated process for how we go about assessing opportunities. And what we've done is recently upgraded and updated how we assess the risk and what is acceptable from a profit and risk profile on the back of, particularly, the A465. Secondly, is how we administer those contracts through the life once we've won. And in particular, how we ensure that any changes in scope and the cost impact of that is flagged up as early as possible. And hence, the Huntington and Peterborough, this is about flagging up the potential impact of future costs, and we've enhanced how we go about that across our contract portfolio. Then there's the monthly review that Alex and I go through of all our contracts that we've had in place for quite some time. As you expect, we go through all of our contracts every month. And then the cash management around that, weekly cash flow processes for the timely collection of the cash in the business. Right. What I'd like to do now is just talk about the cash in the business. And what we've tried to do on this slide is set out in a bit of detail the cash bridge. So I'm going to take you through it step by step. So we started this year with GBP 118 million of cash, net cash on our balance sheet. Within that, there was GBP 85 million held in joint operations. So that is our share of cash held in bank accounts within joint operations or joint ventures as some people like to call them. And also, within that number, there was GBP 35 million of positive timing that reversed pretty much straight away. And then if I take you through 2019. So first of all, as Alex has touched on, there is a structural change going on in regard to the payment of suppliers. So we have moved from 58 days average by way of number to 34 days, the average time to pay suppliers. And that is consistent with the best-practice requirement for the Prompt Payment Code. That is a structural change within our industry, as you know. In terms of working capital, so we've had a GBP 7 million working capital outflow. That's part of that change particularly in the Project Bank accounts, the change in mix in the business going forward. And then we've had the impact of the A465. So A465 had a GBP 37 million cash flow impact on the business last year. And then you'll recall, we had the outcome of a arbitration of a very old project called the Diamond project, which we announced back in May. And the award against us was GBP 9.7 million cash outflow on Diamond. If you then take the kind of normal working capital cash outflow -- cash movement, sorry, during the year, it's sort of breakeven. So we've had a small GBP 2 million negative when you take profit, less dividends, less pension contributions, less tax and interest, et cetera. And then as I said, we sold the land in golf in Alcaidesa in December. So that added GBP 12 million. Then we had positive timing at the year-end of GBP 35 million, and we finished the year with GBP 64.9 million cash. And then within that GBP 65 million, we had GBP 84 million of our share of cash within joint operations. So hopefully, that gives you absolute clarity around all the moving parts within the cash within the business. And then if we project -- oh sorry, we take that forward into a net cash position on our balance sheet. So GBP 64.9 million at a headline level, average month-end in the business was GBP 41 million in the year. Average month-end -- given some of those changes during the second half, average month-end in the second half, GBP 20 million, to give you a sense of that. And then we've got average -- circa GBP 80 million within the joint operations. So if you take that GBP 20 million average month-end, and you take the average GBP 80 million for the joint operations, we have GBP 60 million of structural debt in the organization. And our belief is that an organization like us in this market shouldn't have that level of structural debt, and hence the money raise. So the equity raise enables us to eliminate that structural debt and headroom beyond that. And hopefully, that gives you the metrics around why we're talking about up to GBP 100 million. Turning to the balance sheet. As Alex has set out the requirement from our clients. Look, it's pretty forensic around how they're looking at their suppliers, as you'd understand. So what we've done is set out the clear metrics around our target balance sheet going forward. And I believe a net asset level above GBP 200 million is the right place for us. We must have a current asset ratio, I believe, greater than 1.3x, which is what we've got today. And we have to demonstrate a high positive net cash position with that no structural debt. And the money raise, as I said, we are very confident, will put us in a strong position to enable us to capture some of those opportunities that are right here and now. There are 2 other very important parts of this kind of package that we've announced today. The first of those is that behind that, we have the support of our banking and bonding group. Some of whom are in the room, and we continue to get great support from that group. So a part of this, we have reached agreement to extend our facilities -- current facilities for another year and a bit out for September 23. So again, that's part of this whole strengthening the position of the organization. And we've also reached agreement with our pension trustee on the latest actuarial valuation in the 3-year -- and the deficit plan that goes with that. You do that every 3 years. And that is a GBP 10 million per annum core contribution, growing with inflation, plus a top-up to match the total payment of the dividend, and that's where we were before. So effectively, we've agreed at continuity of the plan that we've already got in place. And so the GBP 10 million will eliminate the deficit over 9 years, and the top-up would bring that forward. That's how that works. Just on order book. So as Paul said, we've enhanced our order book by GBP 1.7 billion. So the order book is at the same level. So we've taken GBP 1.2 billion out by way of the revenue that we've turned over in the year, but also we took out that contract, M4 Corridor. We've replaced all of that with new work within the order book. And then finally for me, what we've tried to do here is just to give you a little bit more granularity around what the makeup of that order book is. So both in terms of the time line, but also the type of business within Costain. So as I said, we've secured over circa GBP 940 million, which is up from where we were this time last year. And we've broken out the order book into 5 main areas. So there are the formal contracts on which we're in the construction delivery phase, as it says there. We also got those contracts, we're in the ECI phase, early contractor involvement, HS2 main works is in that phase until we get that formal notice to proceed, as I said, also the Highways England routes to market framework that we're on. We also got a number of generally 5-year framework contracts. For example, in water, obviously, the AMP cycle is a 5-year framework cycle. We've also got a number of service-based contracts. So where it's more about an annual spend on ops and maintenance. And then we've got a growing level of consultancy and technology contracts. Obviously, that's a smaller number within our order book because some of those tend to be shorter-term in nature. So hopefully, that's given you a good feel of the makeup of the order book in the business. Thank you.

Thanks, Tony. All right. Thank you, Tony. And I'm now going to just take you through the strategy, as I said at the start, I'm very keen that you understand the strategy and the opportunities that we have as a business. The Costain team has a very clear focus. Our purpose as a business is to improve people's lives. Now that is really important because that totally aligns with every one of our clients' business plans. Every regulator and the government is driving business and our clients to improve their people's lives. And you will have seen that Network Rail launched their new strategy and that was all about putting their passengers first. So Costain is totally aligned with our purpose of improving people's lives to our clients. Now in order to improve people's lives operating in the infrastructure market, we've got an ambition that we want Costain to be the U.K.'s leading smart infrastructure solutions provider. Now what do we mean by smart infrastructure solutions provider? By smart, I mean we've got to be able to have the ideas to help our clients meet the new challenges that they're facing, like we are in helping government think about how do we unlock hydrogen energy. We've also got to be a business in the way that we deliver our services that we use new skills, new methods, new technology, that we deliver our services safer, faster, better, smarter and more efficiently than they've ever done before. And to achieve that position of being the smart infrastructure solutions company, we've embarked upon and launched and have now in place, our Leading Edge strategy. But in addition, it's also about how we as a business are a responsible business. Our clients want us to be a responsible business to support their responsibility. And increasingly, our investors want us to be a responsible business supporting their ESG requirements. And we've got 3 focuses that we have around being a responsible business. Costain is proactively going to play a bigger role in creating a greener future. And 2 weeks ago, we announced our carbon targets and our carbon plan. And we've made a commitment that by 2023, we will offer every client, a low-carbon solution. And by 2035, every whole life solution that we deliver will have eliminated carbon totally. Also, as a business, we've prioritized in helping our people be at their best. We are very proud to have an industry-leading safety record. We're also proud that we are building a team that is much more inclusive in its mix. But we're also a business that's very focused on enhancing the value that we bring to society. And we work extensively with SME businesses in how we coach, support and develop them, but how we unlock opportunities for them. Also, our team are very committed to volunteering to support, meet local challenges and needs. So we're a business committed on being responsible. But we have a huge market opportunity ahead of us as a business. You'll know that we have focused the business on those big strategic priorities for U.K. PLC. We're then geared around transportation to improve the connectivity and productivity of how we connect the U.K. In water, how we increasingly meet the sustainable needs of supplying water, but also that we improve the performance of businesses in the water marketplace. And for energy, it is about the sustainable supply of an increasing demand for energy but recognizing that is now going to be a decarbonized energy to safeguard our future and meet our governance targets. And in defense, it's about safeguarding the security of our nation. Those are our chosen markets. Those are the strategic priorities for the U.K. government. And all of our clients working within our markets have very clear long-term committed programs that they are working to that are driven by regulatory outcomes that have to be met. So we've got great visibility of the market opportunity and the business plans of our clients. And that's really been enhanced on the back of today's government that has [ turned around ] and said that infrastructure plays a key role in unlocking the leveling up of the U.K. economy and truly decarbonizing the U.K.'s environment, and that generates a GBP 23 billion opportunity for Costain. But it isn't just about the size and scale of the opportunity that's attractive. It's also about the changing nature of that spend. I've spent time with you in the past talking about the megatrends that our clients are coping with. And you can see that they are having to increase capacity, improve resilience, especially if we look at the flooding that we've had recently, accelerating their decarbonization, enhancing that customer service and driving efficiency. And that's been borne out by some examples of how they're changing their spend. Government, regulators and our clients are now spending over GBP 1 billion, trying to develop those new solutions. The green energy solutions, the alternative transport solutions, and we're playing a key role there. Our clients also recognize that the assets they've got today increasingly are the assets they're going to be relying upon in 30 years' time. And they've taken a big decision to be more strategic in their operations and maintenance activities and in how they can unlock additional productivity from their existing infrastructure. And climate change, whether we like it or not, is having a big effect on our clients. The water industry has committed to be 0 carbon by 2030. And therefore, they're investing GBP 13 billion in the next AMP over the next 5 years to reduce their carbon footprint and to improve the resilience of their water supply. And we're seeing similar investments across transportation to address the big challenges that we've seen over the last 3 weeks, where many transport infrastructure networks have been brought to a grinding standstill as we face an -- ever-present challenge of climate change. And we've talked for a long time about the role that digital technology is going to play. Every one of our major clients within their business plan now has a digital technology strategy that is about enhancing performance and improving productivity. Whether it be Network Rail's Digital Railway plan, Highways England's Digital Roads plan or the water companies' Digital Water plans, there is huge investment being made to improve performance by using technology. And those opportunities for a business like us that has the broad range of skills and capabilities and a strategic relationship with our clients is really important about why we're positive about our strategy. Now, many of you have seen this slide on numerous occasions. This is our strategy on a page. It talks about the markets we're in and those big blue-chip clients that we are supporting in a strategic way to meet their changing needs. But we've built our strategy around 5 key service lines that we offer to our clients in an integrated way. It's about the role we're playing with government today in helping them develop new decarbonized solutions. So we are shaping the future of the U.K.'s decarbonization and carbon capture. We announced 2 weeks ago that we've won project Acorn for the government up in Scotland to capture carbon from industrial emissions to treat it and be able to store it. We're also using our skills and capabilities that we have as a business, a business with a reputation for innovating, making things happen and getting things done. And we're using those skills to help clients optimize the performance of their business. And for example, we're supporting EDF with 100 of our team to extend the life of their nuclear -- their existing nuclear fleet. And from a digital technology, we're working with clients to help them develop new solutions. So for Network Rail, safety on unmanned level crossings is a big challenge. There is no solution, but jointly, we've now developed that solution that brings together sensors and communication technology that we're now rolling out across their network to eliminate fatalities on their network. And I've talked about asset optimization about how clients now recognize the importance of the productivity and sustainability of their existing infrastructure. And for United Utilities, we won the maintenance services contract, which is the transformation program to help them step change the way that they maintain and operate their assets to unlock the available capacity. And we continue to deliver complex programs of work, still a very important part of our business, but we deliver those in a very different way. If I look at the A19 contract that we're delivering for Highways England, which is a contract to unlock connectivity to drive investment of industry in the area near Newcastle, we're using our capabilities in consultancy to help them develop the business case in the first place. And then when we deliver that program, we're using digital technology in the productivity apps that we've got in the digital BIM models to ensure that we're delivering that program a lot faster and a lot more efficiently than ever before. And our strategy will see us change the shape of the future profitability of the business. And again, we've talked to you through this slide before. For our integrated service offering, it has 2 key drivers. The first one is about aligning the services that we provide to meet those changing investment priorities of our clients. So the mix there is increasingly reflecting the type of spend that our clients are making. But it also reflects how we are accelerating the growth of our higher-margin services to get the best value for Costain. We've got an ambition to evolve the services that we deliver, grow our profitability and enhance our margins. And we've set out a very clear ambition that by 2024, we want to be delivering margins in the 6% to 7% range. And I want to share with you the progress that we're making on that through 2 examples. Firstly, in water, to look at how we're aligning ourselves to make the very changing spend priorities of our clients. In AMP6, Costain's position in the water market was predominantly around capital programs of work that we were delivering. But in AMP7, we have a very different picture. We're now working for more clients who see the value that we can bring to help them with their challenges. But we're also providing a range of services right across our service mix from strategic maintenance programs, continued capital delivery first of a kind digital twins to unlock future optimal performance of assets and then a range of consultancy contracts in helping them improve performance. That is a very different picture that goes across our business as we drive our strategy. And secondly, to demonstrate the focus that we're bringing to accelerating the growth of our higher-margin services. In consultancy, last year, we won over 150 consultancy contracts. And we have now secured 30 long-term consultancy frameworks with our clients that give us a route to their investment. That is a step-change on where we were previously. And to give you an example of what those types of contracts are, I've talked about how we're using our engineering skills and our carbon capture knowledge to be the -- one of the first to develop the design for industrial carbon capture in the U.K. For AWE, we are using our project delivery skills as their project -- program manager to deliver a step-change in delivering what is a very challenging and complex program for them. And we've successfully step changed the performance of that program. And for EDF, I've talked about how 100 of our team are in there helping them manage project controls to manage the extended life of their nuclear fleet. And for the first time, we have our first consultancy contract with Network Rail. And it's a long-term, multi-services contract where we're in partnership with Jacobs. And this is about helping them drive efficiency through the delivery of their business and find the new ways of working. And another important milestone is that last year, we were recognized by our clients and our peers as one of the U.K.'s leading management consultancy businesses, quite a change. So we're making good progress, but we do have more to do. And we've got 5 clear investment and implementation priorities. I've talked about the progress we're making on aligning our services to the changing spend patterns of our clients, as evidenced by the water slide. And I've talked about how we're accelerating the higher-margin services through the work we're doing in consultancy. And Tony has been very clear about the work we've done. We've taken a long hard look at how we manage contracts. And we've made changes to how we manage the risk to ensure that we take on contracts on the right terms and that we deliver them well and to plan. But there are 2 things I just want to draw out. We've also, as I said at the start, had a good look and we've identified a program to deliver GBP 20 million worth of efficiency per year after 3 years. And that program is about bringing greater robotics to our processes. So we've now brought greater robotics and automation to how we deliver a lot of our high-volume services. We've also looked at the structure of the business and the layers we've got in the organization to make our operating model much more efficient. And we've launched our operational excellence module, which drives the total sea change in how we deliver our contracts to drive efficiency and greater productivity. We're going to use that GBP 20 million to reinvest in the business to drive assurance in the delivery of our numbers and to also drive a step-change in our capabilities, so that we can deliver the 6% to 7% margin. And that allows us to continue to invest in developing the skills, capabilities and in broadening the technology because I want to remain being the business that our clients come to when they've got a problem, and they don't know what the answer is and they ask for our help, and we can help them by giving them the solution. So in summary, Tony and I this morning, we've talked about the challenging year that we had last year. But we've also shared with you the good progress that we're making implementing our strategy. We've also talked about the strong momentum that we're continuing in securing much better quality work and a really good volume of GBP 1.7 billion worth of work. And I think we all recognize the positive infrastructure market that is available to a business that has a leading position and strategic relationships with its client and present significant opportunities. But to be able to take advantage of those opportunities and to support the confidence I have that we will grow Costain, and we will add great value to our investors, we announced this morning the underwritten capital raise that will provide the necessary financial strength that we can take advantage of the opportunities that are with us today and as we move forward. So with that, thank you very much.