CyanConnode Holdings plc (CYAN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the CyanConnode Holdings plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and will publish responses where it's appropriate to do so on the InvestorMeet Company platform. Before we begin, I would just like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to Chairman, John Cronin. John, good morning, sir.

Good morning, Jake, and good morning, everybody, and then thank you for registering and giving us the time to talk with you today. Just to frame this conversation that we've had a lot of excellent questions from shareholders, which is very good, that's been pre-submitted onto this platform, which actually we'll answer. And we're answering some of those questions throughout this presentation by way of some slides that we put together because we thought that was a good format as well. Unlike what we've done in the past, we're going through what we do in detail, and this and that and the other excerpt, we thought this is all about a Q&A, giving you, our shareholders as owners of the company a chance to ask us, the executive team, and the Board members, exactly what's going on in the company and what we can share with you. And as Jake said, the questions will be on the platform afterwards. We have had numerous questions sent to the company as well via brokers and other shareholders, which if we can, we'll pick those up as well in addition to the platform questions. And regardless anyway, depending on time, we'll also get all of the questions that's on the platform and send direct to the company onto the platform and sent out to everybody on this call and those that have registered. And also we'll put it on to our website as well because with these questions, we've got a lot of excellent information for shareholders. And as I say, with the time we may not get through all on this particular webinar today. So thanks again for all of that. And we'll move forward into some of the slides. As I say, that hopefully, we'll give some of the answers to some of your questions that have been put to us. So myself and Heather. Heather is the CFO and Company Secretary of the company, we'll actually be doing the presentation and leading the questions and answers with me. I missed what particular side, as you know, just going back one, sorry, is all about the -- what we are allowed to say and can't say. So we can't give forward-looking statements, and we are governed by [indiscernible]. Obviously, we have a nomad that keeps us on our toes to make sure that we do what we should do and what's appropriate. We also are under the QCA governance, which actually is a variant of the FTSE 100 governance rules that we adhere to. So the London Stock Exchange rules and QCA. So believe you and me, we would like to tell everybody anything all of the time, but practically, we can't do that, and we're not allowed to. So we don't avoid any questions other than for those reasons. So we are transparent in what we do. Just to summarize what we are is all about offering vision is all about 4 communications a seamless, what we call a seamless network, offering to all of our customers with a global footprint. And yes, we've got certain countries that we operate in, which we'll talk about later in the presentation. But there'll be others as we move forward, as we develop into other territories and develop the full IoT communication platform that offers not just RF, but NB IoT, cellular, any other communications that come along in the future. That is what we're all about, always developing what our customers, what the markets are looking for, and we'll continue to do that. So over to you, Heather.

Thank you, and good morning, everybody. There were a number of questions that came to us relating to our latest trading. As you know, we put out a trading update, which is not our full results and we put this out in April. So this really, this slide really summarizes where we expect our trading to end up for the financial year that ended the 31st of March, where there were questions that asked us things that have not yet been made public. For example, there was a question asking for the split of the revenue by territory. We can't do that at the moment because we haven't put out the full year results. So all of those details will be given when we do the full year results, which is expected at the end of July. So as you can see, significant revenue growth, our market expectation was GBP 16.3 million. We've said that we expect to materially exceed that -- in simple terms, generally, what is accepted is that to materially exceed market expectation that's sort of anything 10% and above what your -- what the consensus expectation is. We had 58% increase in cash received from customers, so GBP 16.9 million from the previous year of GBP 10.7 million, 250% increase in the number of modules shipped. So you can see that that's a big jump and that's the majority of that being in India. 19% increase in the NB-IoT hubs delivered to customers. So as you know, we've announced over the last 2 years these NB-IoT hubs set that we're shipping to various territories in the Middle East and North Africa region. So we received a follow-on order for that during the most recent financial year. And you can see that the number of hubs has increased there as well. We received orders for a total of 2.7 million Omnimesh modules in India during the year, 106,000 Omnimesh cellular modules ordered for Thailand. Some of you who've been around for a while will remember that we've been working in Thailand for some time, and we've been deploying RF so far. And we've started deploying some cellular there, which is seeing some really good success. So this is our cellular, what we call our [ CNC ] module that we're now delivering in Thailand as well. And as I mentioned earlier, 52.3 thousand NB-IoT hubs ordered during the most recent year as well. Our expected deliveries on our backlog that we have we believe, will cover approximately 80% of the FY '25 revenue expectations. The consensus revenue expectation in the market is $32.5 million -- so as you can see, we've got good coverage from our existing orders and existing backlog. What I'm trying to do here, we get a lot of questions over time about how -- what the working capital cycle is typically for India because that's where the majority of the orders are. When we place orders, when we get paid from our customers and various other elements of it. So they're not all identical. So that's just one caveat to this, but I've tried to put it in very simple terms on one slide to show you approximately the time from the initial order from a customer to all the way out to when we receive the EMI payments, which is the equal monthly installments that we receive. Now just to remind people, the contracts that we receive, they usually consist of a CapEx element and an OpEx element of the payment. The CapEx, we received a majority of this against the orders of the modules and during the first 2 to 2.5 year time frame, which is the deployment time frame of the orders. Then after that, we have what I'll call equal monthly installments or OpEx payments. And those kick in -- the very first ones will actually kick in after the first SAT. So SAT is the site acceptance test. So the first SAT will be for 5% of the order, and that's anything from 7 months after the contract is initially one that will happen. And so you can see that those EMIs will gradually increase over the term of the contract as the deployment goes because there'll be EMIs for each part that is being deployed and passes SATs as we go along. The very first step that we would have when we receive an order, we place orders on our contract equipment manufacturer and our silicon providers, often the silicon will be a bulk purchase because there are lead times. There have been significant improvements to the lead times. You'll know that over recent years, during COVID in particular, lead times were pushed out to 12 months, but they have come into a more typical around about 3 months lead time. Sometimes you can get sooner than that, but that's sort of a typical time frame to work towards. And so we've got to always be looking at and forecasting and planning the orders of the silicon in advance to cover a number of deliveries that we expect over the coming months. And then, we will place the orders on the manufacturer. They will start to manufacture. Obviously, we receive, assumed here, after 3 months, we will receive the silicon, things going to manufacture and that process is not very long and we will then ship to customers. Then in terms of payments, we will receive payments from the customers, anything from 30 to 60 days, depending on the contracts, after we've shipped the goods of the manufacturers actually ship the goods to the customers. So you can see there's a bit of a delay in some of these from when we first procure items through to when we start to get paid from the customers. And there's a portion of what we get paid from customers that is spread over the remainder of the contract. And the full contract is generally a 10-year contract. So the first 2.5 years would be the deployment and 7.5 years of support and maintenance after that. And EMI is rolling out over that particular time. And as I've said here, this is the simplification of a typical contract, but there will be often variations. It's a lot more simple than things used to be a few years ago because of the standard bidding document but there will always be variations in terms. So -- and then the next slide. This is a slide many of you will be familiar with. This is just showing all the territories around India that we got deployment, and this is the latest position across all of these territories. So you can see that we are north, south, east, west, all sorts of terrain. We're in urban terrain, we're in terrain HP province, that's the foothills of the Himalayas. So it's quite a vast range. And you can see that our technology is suited to all of that because we're deploying successfully in all of these areas. This is also the latest phasing of the Indian rollout. At the moment, there's 222 million meters that have been sanctioned, 116 million that have been awarded, and as I've explained previously, by awarded, that means that they've been awarded to the prime bidders. And as we'll talk about later on in this, you would all have seen recently our announcement of impediment as an AMISP, which means that we can also be a prime bidder in the future. But where these 116 million have been awarded, that's to the prime bidders who then will set up SPVs and start negotiating contracts with the subcontractors. Many of these -- all the historic contracts we would have been subcontractors and we'd be working with many of the parties. And not all of that 116 million -- and in fact, only a very small portion of that 116 million has actually been awarded all the way down to subcontractors. And there's been a total of 11 million installed across India. Our position, our latest order book, total is 6.6 million, 3 million has been fulfilled and there's 3.6 million yet to fulfill, which is why we have the confidence of the market expectation for this current financial year. And I'll hand over to John to talk more in detail about the status of the RDSS and business in India.

Yes. Thanks, Heather. And just to recap for everybody, the RDSS scheme that's funded in India, and we're focused just at the moment on India, we will talk about the rest of the world later on as we call it, that's everything outside of India. Just to recap for everybody, the government is saying, 250 million smart prepaid meters as opposed to postpaid that we have in the U.K. Interesting enough, only the other day, somebody said to me, well, John, we believe that 250 million has actually gone to 330 million. And why is that? I said, well, because they build more houses, more apartments, et cetera, in India. So obviously, there's more to go at, which is great. And at the end of the day, why are they doing it? Well, first of all, what the government wants is to move from an analog platform to digital platform on the grid. They want to move the DISCOMS utilities to profitability by collecting the cash, cutting out reduction in theft, which is high in the $32 billion a year. They lose by sending out the electricity is being used, but they don't collect that because of theft or nonpayment. And with the smart meter and all this helps. And once they've got to profitability, the government owns about 90-odd percent of the DISCOMS utilities, then they'll probably sell some of those off as they privatize the industry going forward into the future. It's all about enhancing overall power supply and determining what power supplier need and bringing in renewable energy, et cetera, as you look at the advanced technologies that the utilities are looking at. If you look on the next solid point going, the sort of growth and expectation of smart metering by $6.1 billion by 2031. That's a great growth over the next number of years. And it is all about putting the platform in place to do that and actually build out even further into the grid itself. Today, we deal mainly with distribution companies, we call them DISCOMs. And they're part of the utility, as you know, you've got transmission as well as the distribution part. But it's a distribution part that we deal with and those are the ones that are rolling edge and our owners of the meters. And if you think, all these meters are there today, done meters and we just go around to swap them out in the same locations that they are to real-time data and delivering the service level agreements that these distribution companies are looking for. Just to recap, we've been 12 years in India, a lot of experience that is both Cyan and [indiscernible] as Connode before and as you know, was CyanConnode since 2016. We actually, as Heather has shown, with the length and breadth of the country. And today, we are the holders of the RF deployed in the country of about 45%. And really, we are the leaders in our RF communications in India. And as I said, extensive on-the-ground expertise and delivery of SLAs and have a great reputation as a reliable supplier for India. I want to -- wanted to just touch on was just to -- and some people have asked is that we have -- and continually looking at the growth and what changes are needed for growth as we go forward. And obviously, we don't want to people, that's going to hit the glass ceilings. So we're always involved in as to what's needed for the next level of growth. So we have had some organization changes, and I'm just putting up what these are, I'll just have a glass of water. So what we have here is you've got myself as the Executive Chairman. To the right, then is we've got Rahul Das, who's the Senior Vice President for International Sales. It's a small team that looks at after everything outside of India. And we got ahead of this. I mentioned Group CFO and Company Secretary, looks after the finance also for India as well as Group. And then what we've done is we've -- Ajoy Rajani -- Ajoy staying with us since 2020. He was the original MD CEO, moved to Executive Vice Chairman, so has always been there -- and we've made in the additional MD CEO because he's got a lot of history and background in India, a lot of contacts in the industry, not only in India but elsewhere. I think actually was an investor and part owner of Connode when it's Connode India. So he's really sort of got the experience with his reliance background of running large companies. And that's what we felt is needed for today. So he's been the leader of the team now. And what we have done is really consolidated for growth key roles. So what we had before was it was sort of split. So I had this -- the Executive Vice President for Engineering that covered lots of areas, report to me. And then the rest reported to Ajoy. What I felt was we need to have one team, one focus alone for growth and split out the engineering role to more manageable chunks. So now we've got a split out there. We've got Software, Dushyant Singh. Dushyant, excellent pedigree, joined the company in the last few weeks. And that's what we're waiting for to announce this. And we only announced this organization to the company last week. Dushyant has 15 years in the company within -- sorry, winning companies in the U.K. for EDF, worked for other companies such as British Gas, National Grid, really understand smart metering, especially the software side of things, is located in India. He has worked in India for a number of years. So great experience, great added value to the company. So we split that out from engineering, it's software on its own. Split out hardware and firmware with Partha. Partha has been in the company for about 9 months. He also was with Wipro, has international experience as well. Aniruddha, who's been with us for about 9 months as well. He's the Senior Vice President of Delivery and Operations. And then we have [indiscernible] India sales, Shriprakash Tyagi, and that comes in there. And sitting over that then, we have Matt Kern. Matt's been in the company for what, nearly 16 years now.

19 years.

Thanks, Heather. A long time. One of the original founders, if you like, Senior EVP, Technology Innovation, really understands what's needed on the software and hardware of our customers going forward. So a real good find for us and move that forward. So we did have the previous MD CEO, Ratna, he's moved on. Ratna moved from the COO first time into a CEO MD role. And he's been with us 4 years. He actually located in Hyderabad, and it was every Monday flying to Delhi in the office, flying home until Friday, back to Hyderabad. And then he's away from his family. So he wanted the job back in Hyderabad with his home. So it coincided with the change in this organization, which suited all parties. The next one then, just to emphasize why we're doing this organization change. Well, strengthen the leadership with key skills, key experience through the next growth level that we're going for as a company. Looking at also operational efficiencies and looking at how best to get productivity utilization from the company as we move forward, focus on innovation, and that's why I split out all these roles into hardware, firmware, services, delivery, software and innovation. So very much share focused teams to continue the product development that's needed for market expansion that we're looking at with CyanConnode's technology. And we're all aligned now as one team, one focus for you for delivering to our customers. No. You've -- we did an announcement recently about we're in parallel now as an AMISP, that's a service provider, a lead bidder. We've been doing this qualification for some time. So our credentials now has given us this qualification. So I'll explain on another slide how Digismart network fits into CyanConnode India, and really look at how it all comes together. But in essence, we've actually -- the reason we're doing it is that we have the choice now to be a lead bidder, or we can still be a vendor to our existing customers. And we'll decide on a bid by bid cases of which one we'll go for. If you look at today, Digismart networks can participate in about 70-odd million smart meters, which are yet to be tendered. And as I say, that could end up in 100 million the way that the growth is to 330 million. So we can participate as a system integrator for 110 million. So it opens up the market for us, opens up really other opportunities and growth for us. And we can see as well that we can offer the full total solution, not just communications, but be it to data management system as well as cellular as well as the meters. And it's all about the credentials that we got, it's about CyanConnode really now got the capabilities. And when you go through stringent process and criteria to become an AMISP, all of our background for the last 12 years has been taken into account. So the next 2 slides, just to encapsulate a little bit more what does this look like? So on the right-hand side, you can see the utility or the DISCOM as we call them, that's the end customer. You see on the left-hand side, then you've got all of the suppliers coming in with its hardware or hard -- on the bottom there, with its software services, project management. And you can see, we can talk to different meter manufacturers get them to sell through us as a one-stop solution. We, today, the management system, we've then got their cloud services. We have to put in place asset insurance, system integrators, et cetera. And all of that then comes together from CyanConnode into Digismart networks as the AMISP, and we pull that together. And we made sure that we have a back-to-back arrangement, especially with the liabilities, penalties, SLAs to all the vendors that come through us. Then we have an SLA agreement with the utility for 8 to 12 years, and then we can decide which meter manufacturer, which MDA -- and we have a solution that can actually be adapted to lots of different meters, lots of different meter manufacturers. I think we're integrated now to something like 12 different meter manufacturers in India, and that's a lot, and we continue to do that as we move forward. Here's another slide just to give you a different sort of angle on how this works. So you've got in the middle there, Digismart Networks, that's 100% owned by CyanConnode India, that's 100% owned by CyanConnode plc. So what we do, we set up the Digismart, we have got a Digismart network. That platform bids for the tenders to the DISCOMs to utilities. When we win a tender then, what we'll do, CyanConnode India will actually, on the left-hand side, provide all those services through to that platform. And how we got -- there's been a question, well, how do we fund this? So it's fresh money. It's money from infrastructure funds that are there for the long term and numerous funders globally that do this, not only for smart meters, but for also for solar panels, lots of power stations, et cetera, motorways, airports and the like. So we will then discuss with infrastructure funds, potential investment into the platform and will negotiate debt with that and also equity. And what we look for then is CyanConnode is to share the equity with the funder, depending on how much the funder puts into the platform, of course. And there may be several funders, it may not just be one. There may be 2 or 3 funders coming into the platform. And they're interested in their IRR, the investment return on that investment over a period of time. That's what they're interested in. We come up with the expertise in smart metering and all the [indiscernible] deployment experience and how to handle the utilities, the DISCOMs and the customers and do the performance level criteria, the SLAs, that's needed. That's our owners. Once we win a tender, Digismart Network wins that. What we do then for each different tender, we set up what we call an AMISP-V, that's a special purpose vehicle, for each different utility. Why would we do that instead of putting it all through Digismart network? That's because each, say we're winning 1 million units, that is a finite start and end date. We then go and win another 2 million units, that is, again, got a different start and end date. So you can't put them into 1 vehicle, you put them into separate vehicles for those projects because after a while, the infrastructure funds may be, once they got their return back in 4 to 5 years of a 10-year contract, they may decide to sell that to a pension fund for the annuity that's rolling out continues for the number of years. And even though we say 10 years, in our experience, it doesn't stop 10 years. Our first contract with Tata Power 5 years, that's come to an end, but they renewed for another 5 years. So we renegotiated the support and maintenance. And that's what I anticipate here. And during that 10 years, we're probably of attrition as well and maybe 20% of the meters. So that will also go into the AMISP as we move forward. So hopefully, this just gives you an idea. And I know it's a lot to take in. But it's really what the advantage is of an AMISP, the Digismart Networks, can improve our margins because let's face it, we sell through someone else to put the margin on our margin to the end user. So this will keep us more competitive and this to say, this is going to take time. We have to get our credentials first. It's not like a light switch. So don't expect something to happen tomorrow. It might be 6, 9 months away before we really get into one because we're now talking to investment funds. We've been talking to them, by the way, for a number of years. So one -- it's not all new to them. But now that we've got to decide which utilities we want to bid for and which ones we want to continue going through our existing partners, we'll do them both. So we're looking at that right now, and we decide on a case-by-case basis. So people have just sort of asked really about some of the advantages of our RF in the marketplace. Well, as you know, we call it the Omnimesh RF Smart Mesh Network. And that's our flagship product, the Omnimesh network. And it's deployed really for rapid deployment and exceptional performance really that we look at. And really, we have a competitive total cost of ownership. If you look at really over the 10-year period of -- against cellular, for instance, then RF just work out cheaper. In the beginning, in the first 18 months, you'd look at it's slightly cheaper on cellular, but then it crosses over the total cost of ownership that RF really comes into its own area. Of course, what we do have is a suitability not only for urban, but semiurban. And as Heather mentioned, we've been in the hills of the Himalayas and delivered a product there. And how have we done that? Well, we've got a product that's a long-range radio that actually covers up to 10 kilometers, and we tested that at the foot of Himalayas. And that's great for hilly areas and agricultural areas, even where cellular, as you probably all know, wouldn't work very successfully. I mean, it doesn't work efficiently all in the U.K. cellular, even in places in London and other areas in the country. And what is important is delivering the SLA, billing gives a success rate of 99%, which is really important that our customers look for, especially on prepaid because as you know, people are paying money upfront, so they expect to ensure the quality of service is there and we deliver accordingly. We also have scalability and flexibility within the platform. That's important as we move to not just 0.5 million, 1 million, 3 million, 4 million, 10 million, 20 million, et cetera. You've got to always ensure flexibility within the platform. And not only as you move forward with the Internet of Things, for electricity metering, but also for gas, water, street lights, [indiscernible]. So as we look at all this going forward. So versatility and readiness is important on the platform. And we do have a platform that is self-forming, self-healing. Unlike cellular, which is point to point, when that network signal goes down, you cut off. Whereas on mesh, what you get is self-forming, self-healing, it's like spider's web. If one part of the web goes down, it finds another route to get the signal through and get the data through to actually the billing system, which is important. We do have great upgrades and flexibility that we'll continue to do. We're probably on about the third, fourth generation of our product right from the ultra mesh that we started up many years back, and we developed into international standards, IPv6 6LoPAN, and continue to look at those standards as we look at areas like -- we hear about the [indiscernible] standards and other standards. And always, we're looking, watch there. And we sit on technical bodies within India, the government of India, industries of India, advising what's coming, always listen and looking of what else is happening within communications or what people are looking for. We have got global recognition and deployments around the world, which is great. And we've been successful in multiple countries and demonstrated the effectiveness and reliability on a global scale of the Omnimesh product. And really, this underscores our leading position in the market and the trust that we get from our customers. And we get repeat orders from customers. And that's proven to us. So that's really important. I mean if you look at what we are, Cambridge Headquarters company, pushing our products from the U.K. to multiple countries around the world. And for India, we were the largest -- second largest exporter last year, which was released by the U.K. government, which says something, which is good. And believe you and me, going from Britain out to these countries, setting it all up, getting people, finding people, finding customers, finding partners of the ecosystem, it's a full-time job. Believe you and me, all credit to the team and the individual that's got a lot of knowledge and expertise around the world that we have in this company. So people also then just asked really about the security model that we have, and this is really important. We have got signed off by GCHQ. MI6 approval for our technology, GCHQ based in Cambridge, they ensure obviously that because it's national [indiscernible] infrastructure we're dealing with that. We've got to have real good security models in place that actually stop the hackers getting into electricity networks. And we call this -- well, it is, first of all, industry standard, multilayered end-to-end. So we call it the Swiss cheese model as well. So if you imagine the Swiss cheese of [indiscernible], so you might get through one hole, but here's another piece that does not have a hole through that one, we stop that threat even if we got through the next layer of cheese, so there's another block, another defense that we put up. So multiple layered security approach, multiple defenses against potential attacks that might happen. This end-to-end encryption is important. We have what we call the data transport layer security when also -- I think called public key infrastructure that actually supports key management, we call it, authentication to ensure that the data that transmitted over the network is encrypted end-to-end. So nobody can steal that along that journey going from the customer all the way through the RF, all the way through our head-end system, the software into the billing system. We also, not only on the network, also have device and network layer security, i.e., all our devices, all of the hardware have security built in. Our wide area network, also, this is really where I'm talking about security. We have offered cellular, encrypted cellular unlike straightforward cellular, open cellular that people use on the public networks. These are private networks, dedicated physical lines to ensure a robust protection of the data that's transmitted across large distances. We also have infrastructure security. This is where we have protected firewalls, intrusion detection systems, prevention systems, all these measures help to monitor and prevent unauthorized access or attacks on the network. We have identified -- identity, sorry, an access management as well, again, to improve who's coming in. Certification of devices, that's really important. Role-based access controls and we also set up audit log in to ensure enhanced security. So we have external companies test our system on a regular basis. So we comply with international standards. You mentioned any standard, then we do deal with that. Also where we may offer cloud services that go into data centers, we ensure that those also have great security and we look at versatility to support smart -- city initiatives, where we look at street light EVs, all of that will be part of our security model going forward. So hopefully, that you got a good feel for this. Good question. We probably haven't had that before, but hopefully, you've got a better understanding of the protections. So looking at then, when we talk about our product, is it future-proof? Well, goodness me, I mean, continually looking at evolving what's coming, the enhancements we do, and that's why we get R&D tax credits every year because we're continually developing the product, enhancing the software, the hardware. We look at costing. We look at putting in different components into the product. And we look at the frequency upgrades and replacements, continue looking -- I mean, if you look and think, we don't really have any sunset of our technology. There is sunset that's happening within cellular as you probably know, within the U.K. smart meter in the moving from 3G to 4G. Unfortunately, they're going to have to change all the household equipment inside the house to handle 4G. [indiscernible] RF, we could have done that front outside of the home in the gateway. But in the U.K., there's a lot of cellular out there with some RF, which is our RF. But unfortunately, how they've done it is maybe if they relooked at it again, they'll probably do it in a different way. But we believe it's going to cost an additional GBP 4.5 billion in the U.K. to upgrade from 3G to 4G. And that's only for 50% of the deployed network so far. You imagine when they go to 5G, 6G, 7G, another GBP 4.5 billion, et cetera. And that -- I mean, that's on top of the GBP 13.5 billion that they've done all because of the sunsets of the technology and the life components that has happened with the U.K. as an example. We could have deployed the whole in the U.K. for GBP 4.5 billion, would have been really happy with that, but there we are. So we always look at future proofing. We look at the advanced network that we have. We continue to look at reducing reliability on public cellular. That's why we've got long-range radio. We look at that other parts of, for instance, more reliability, more security, maybe have it in meter gateway. So instead of having them on a lamp post, you put them inside a meter. In actual fact, they are not meter, is cellular, as well as RF and because that's what a gateway is. A gateway that's on lamp post has cellular and RF in it. Now, we're looking for meter manufacturers and put them in the meter to have better security and have more cellular and RF in much more locations as we roll out the networks. We always look at the ongoing operational costs, of course. Field visits and deploying technology to help reduce those field visits and making sure we have the steps to ensure that we're overall very efficient and effective in what we do. So I just talked a bit, I talked a little bit, as you can see, previously on India. So here, we are global. We do operate in the U.K., as you know, for where mobile doesn't work. And as part of the expansion, we have been just come in to open up a new office, new location in Dubai, UAE. Why would you say we're doing that? Well, because of expansion within the Middle East and the orders we get, it would just out with some of the country transfer cost pricing. We'll make sure that we cut out a layer of tax by U.K. and then going to Dubai with it. So we're opening our office up there for expansion. So watch this space. I mean we only do this -- we don't give for any other good reason, except we expect a lot more business coming out of the Middle East and other areas. And what we thought we're doing, you can see and I've talked before about where we are today. Obviously, India, U.K., Sweden, Finland, now Abu Dhabi, now Dubai, and you know we're in Thailand. Well, just look below on this slide. And it surprised me the other day when I put this together. That actually -- the addressable market for just these countries that's listed here is 243 million. We're already talking about India, 250 million to 330 million as an addressable market. So you can see these countries, we're not just reliant for our future growth on India, which -- see all of these countries here, Malaysia, Indonesia, Thailand, well, we mentioned Thailand, but this is now a bigger opportunity there than MAA looking at PEA. Bangladesh, [indiscernible], Nepal, Oman, Vietnam, even Germany is coming up now with the next generation. And there are some various African countries like Kenya, South Africa, that's looking at all of this. So all these countries that I've mentioned, we are talking with them through partners today. And a lot of partners have come to us for our product, for our expertise for them to sell this on as we become a vendor to a consortium, selling into these countries. And obviously, within these countries, there are multiple utilities, DISCOMs that we speak with all of the time, and we continue to do that as we go forward. So it's really -- this is good news for us as shareholders and investors. And I say that because you have to remember the Board has put in an invested work, somewhere in the region, GBP 5.5 million to GBP 6 million. That's the Board, your Board. I mean I've got something like GBP 1.2 million, GBP 1.3 million invested, and we've actually, a lot of us invested where the share price was higher. We all liked the share price back to that and even more. That's our goal, that's our aim. And that's what we're hoping for by enhancing our communication like this to ensure that everybody gets the best information that we can give all of the time. So we're conscious of giving news out, and that's what we intend to do going forward as much as possible. And I talk about news because people will say, well, when is the next order? We've got to be careful what we say about next orders because we have to tell everybody the same time, we can't tell individuals or just a few people. It's going to be open for everybody. And of course, when we put other news out, we try to think, well, let's put this out, that in, where's the order? Why you put that out? And then we've got a complaint thing, so we'll actually put out much news lately. And I go, well, yes, because people are just listening, just wait for orders to come. So there's a lot of information and data that we've got from this Q&A that we, as I say, put together. A lot going on in the company, believe you and me, across all areas. We're not sat down twitching our thumbs far from it. We're full on and everybody is pretty focused for you, our shareholders and our customers to deliver value to shareholders and actually the service level agreement to customers. Over to you, Heather.

Last couple of slides to just really to talk about the ESG and CSR initiatives that we're undertaking. Many of you know, we've talked about this a few times that we are accredited and being awarded the London Stock Exchange Green Economy mark. The reason for that is because there's more than 50% of our revenues. I mean, at the moment, it's pretty much 100% of our revenues that are from green technologies. And this slide really depicts the savings that are made and the reason for that award and the environmental benefits on our technology is the fact that we automate the entire system. So whereas in the past, you would have had meter read, driving around, and you can imagine 250 million meters in India and driving around to do meter readings, people having to go out physically to pay their bills. So this just shows the savings based on our current order book. The savings -- annual savings to utilities are nearly INR 1.2 billion. And you can see here the fuel saves and various other savings that are made as a result of our technology. Other initiatives, we are committed to doing good for the local communities as well in India in the past year, some examples of initiatives. They've been focusing on empowering girls, advancing equity and sustaining the planet. The recent partnership with -- is sort of a foundation to support the -- what was called the digital quality program for 700 girls in Gurugram. That's another way of -- another sort of, I think, more the Indian way of calling Gurgaon, which is where our office is. And that is -- the aim of that is to bridge the digital divide and provide these girls with necessary tools and resources to succeed in a digital world. We've also extended support to 2 local government schools providing educational toys and course books. So this has touched the lives of 300 to 400 students. And it's just an example of some of the things that we do, and we'll continue to do these sort of things as we go forward. So I think -- yes.

John, if I may just jump back in there or if have you got any closing remarks before we move to questions.

Well, I think with the time we should move to questions, really, but I think we've tried to answer some of the questions already within the slide, but I know there's others as well, which we're happy to go through and speak to.

Perfect. John, Heather, thank you very much indeed for your presentation this morning. [Operator Instructions] But just while the company take a few moments just to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with the copy of the slides and the published Q&A can be accessed via your investor dashboard. Heather, John, as you have already mentioned, we did receive a number of pre-submitted questions ahead of today's event. And so perhaps, if we look to take these first before then moving to the live questions, that would be great. And there are quite a variety of questions here. The first question that we have here reads as follows. The end market is news flow driven. What measures is the company taking to improve the very poor levels of communication and engagement with shareholders?

Okay. On that, I think as John mentioned earlier in the presentation, it's just all getting that right balance of what we can and can't always announce. But we recognize that especially over the recent months, perhaps we have been quiet. So the -- one of the main things we're doing is obviously this Q&A session to have a full interaction with investors to ensure that we can answer all the questions that people have. So answering this question, it will be via a combination of more investor presentations like this and events, direct investor meetings, one-on-one with shareholders. social media. And where appropriate, we'll use the required RNS releases. So another thing that we're doing is we've got a really good experienced VP of PR and Market Communications in India. He actually -- his background, he worked for EESL, [indiscernible] prior to coming to us. So he's been involved in the industry for a very long time. And he does a lot of the social media for India, for example, and we're going to get them more involved to ensure that, obviously, shareholders are getting a lot of this information about what is going on in the company and what is going on in the market in India, in particular, other than orders because orders will always be -- we'll have RNS releases. So that's just some of the things that we're doing.

Perfect, thank you, Heather. Just turning to the next question that we've got here which asks, congratulations on materially exceeding market expectation results. When will the actual revenue for the year-end 2023 be released?

I think I mentioned this on my slide earlier, just the full year results are expected to be released at the end of July.

Perfect. The next question here is, what is the reason for the full year 2024 first half gross profit dropping to 31% from full year 2023, it's 35.9%. Is it product mix or competitive pressure?

Well, I think it's a combination of both. The product mix, we talked about this previously, and I covered it in the working capital slide. The initial part of the deployment first couple of years is all the hardware. And obviously, hardware is at a lower margin than the software and the services. And also where we've got -- we've been selling on third-party hardware in the Middle East, that's at lower margins as well. So the product mix in the initial years, you'll have a lower margin. And then as we start moving to the recurring revenues, then we would see that improving.

Perfect. Of the total revenues for full year 2024, what percentage was generated by India, Thailand, Middle East/North Africa, the servicing and maintenance contracts?

Well, this week -- because we haven't given the exact revenue, we can't provide that at the moment, but it will be in our full year results.

Perfect. The next question that we've got here asks, with the big increase in staff in India, plus 60 approximately, what are the monthly operating costs currently?

I think that's another one that -- and I think the next question was about the current cash position. So these are things that are not currently in the market. So we can't sort of -- we've got to give information to everybody at the same time. So I can't cover these questions.

Absolutely. Will there need to be a further share placing to manage the anticipated business expansion?

It's not in our current plans. I mean we're always looking at alternative funding in India. Obviously, we do things, the more day-to-day things like the invoice discounting, and we're looking at working capital facilities in India, which is where a lot of the growth is. So at the moment, there's nothing in our plans for further share placing.

Perfect. The next question here relates to the full year 2025 forecast. It says, consensus for forecast for full year 2025 indicate a pretax profit of GBP 3.9 million. Is that still a realistic forecast?

Well, I think, if we don't believe that the forecast is still realistic, then we are required to announce it, and to announce that, we don't believe that we'll meet market expectation. We haven't done so, and we do fully expect to meet the market expectation for the current year.

Perfect. Genus appeared to have stopped placing orders with Cyan. The last order I recall was in January 2020 worth GBP 3.3 million. Are you expecting further orders from them?

Well, actually, from there, there was -- actually, the last order from them was in August 2022. So there has been a follow-on from there. And we continue to work with Genus. We're deploying in [indiscernible] with them right now and continue to do so. And yes, I mean, we work with Genus and continue to do so. And where appropriate, we're hoping to get more orders from them and from others. I mean we are actively expanding across more states in India by all of us participating in new tenders and deploying smart meters in additional regions, whether that's through Genus, IntelliSmart, Monte Carlo, [ whomever], GMR, et cetera. So we continue to look at enhancing our strategic partnerships across India, across the globe. Also, we also look at seamless supply chain and the improvements on there as well to with key contract new equipment manufacturers to ensure that we have a reliable and seamless supply chain that help us maintain a steady flow of orders going through and optimizing production and delivery, which is really important as well. So yes, we continue to do so.

That's great. The next question asks, is the Cyan win ratio in volume terms still 25%?

So in terms of numbers of bids, it's actually 29%. In terms of volume, that equates to about 16%, just to clarify those numbers.

Perfect. The next question that we have here relates to the announcement made on the 22nd of May, which asks, with the 22nd May announcement, can we have more detail about how this changes the Cyan business model and its advantages? Also we appear to be competing with some of our own customers. What reaction do you anticipate from existing customers?

Yes. Well, hopefully, I answered some of that by putting some of the slides, and this is why we did that. And actually, the next question that I notice is about wanting to know about AMISP accreditation. And about capital [ intensity ] and would it be funded? So hopefully, I've answered those 2 questions. Now in addition to that, so if you think today, when we bid today with our traditional way through being a vendor through the AMISP partners, we are -- we may have been 3 times with -- in 1 tender, with 3 different AMISPs today. We may bid through Genus, IntelliSmart, Monte Carlo, all at the same time. So we're doing that anyway, have done in the past, and we'll continue to do so. So as I mentioned, on a case-by-case basis, we will bid appropriately whether it's -- as an AMISP, which we can do, as well as vendor or just as vendors. So we have that choice, and we're taking what existing customers anticipate as well.

Perfect. Just a couple of questions now on India. The first one being, given the senior team in India has been expanded dramatically, are there any plans to float the Indian subsidiary on the Indian stock market?

I mean we continue to look at all areas to where can we create shareholder value. I mean, if you look at the U.K. market at the moment, I mean, in the last 12 months, I mean, I speak to a lot of people in the market, it's been pretty dire. There hasn't been many IPOs, et cetera. There's been a lot of redemptions of funds, cost of living has affected people invest in. And a lot of companies have moved off from [indiscernible] company in the U.K., gone up to the states. A number of companies have been bought and taken private, et cetera, off AIM. So we continue to look and say, well, where is the value, et cetera. And yes, I mean, it is a consideration. I mean the Indian stock market, if you look at it, is going like this. It's like our graph of growth of revenue over the last number of years. It certainly has accelerated, and there's a lot of companies in the last 8 months that had some great values. And as a wholly owned subsidiary and well known in India, yes, this is something that the Board takes into consideration and always constantly looking what's best for the company.

Perfect. Perhaps just sticking with India. Moving forward in India, what's our current working relationship with the Genus Power Company?