Flowtech Fluidpower plc (FLO.L) Earnings Call Transcript & Summary

Hello, everybody, and welcome to the Flowtech Fluidpower Half Year Results Presentation for 2025. Now just in case you're joining the Flowtech story for the first time, just by way of introduction, I'm Mike England, I'm the Group Chief Executive Officer. I joined the business in April 2023, so just a little over 2 years. And I joined because I felt this was a really exciting transformation journey of a 40-year business with a great heritage that I've known in the industry for many years and that I felt had the opportunity to be developed into a great growth engine. Prior to joining Flowtech, I was the Group Chief Operating Officer at RS Group plc. Then that was FTSE 100, now FTSE 250, which gave me great insight into digital B2B commerce as well as a global footprint and global trading within the industrial distribution space. Prior to that, I was with Brammer plc, now trading as Rubix owned by Advent. Back then, that was a FTSE 250 business and worked for them across Europe in commercial roles. And prior to that, I was 9 years at Rexel in the electrical distribution space, former to which I did a degree in civil engineering and Masters in Business Management. So I guess I'm a little under 30 years working within the industrial distribution and services space across European markets with good exposure to America and Asia Pac. In that time, learning a lot about how we work very closely with our supply partners to create value as a distributor or a service provider and then working across many vertical industry segments of the market. So here today to talk to you a bit more about the Flowtech journey. And with that, I'll just pass over to Russell to give an introduction as well.

Yes. Thanks, Mike, and hello, everybody. So yes, Russell Cash, I'm the group CFO. I joined the business in November 2018. My background prior to joining Flowtech was actually in a slightly different world, it was in the world of turnaround and restructuring. And little did I know at the time because at the back end of 2018, the world was a relatively stable, relatively predictable place, but some of those skills came in useful to steer the business through the global pandemic and everything that's come beyond that point in time. And more recently, some of those skills came in handy when we were buying a few businesses out of distressed situations.

Great. Thanks, Russ. So today, we're just going to talk through briefly our strategy and just a little bit more about Flowtech for those that are hearing our story for the first time. We'll give a summary update, which pretty much lays out the topics, the key topics and the themes we're going to talk about. But the main event really is the trading highlights, the financial update, and I'm sure everybody is very interested in current trading and the outlook from there. So I'm just going to start by playing a short video, which I'm going to talk over the top of. So you'll see that on the screen now. So Flowtech was established around 40 years ago up in the northwest of the U.K. Our facility is in Skelmersdale, but we have operations across the U.K., across the Island of Ireland and across Benelux. We're very much focused around hydraulics, pneumatics, process equipment. We're a specialist in creating engineering solutions. Our value proposition spans the ability to be a high service distributor selling products, but also we repair and service and overhaul industrial equipment in the areas of our specialism with great technical and engineering capability across the group. And we've got over 40 years of also getting involved in some fairly major engineering projects where we design, we build, we install commission hydraulic pneumatic and process equipment. Everything we do is very much underpinned by technology. But equally, this is a people business and a people industry. We operate within a very fragmented market. And we're proud here today to be talking a bit more about the journey that we're on. So hopefully, that was a very quick and short update just to bring to life a bit more about our business. Our strategy on a page. So when I joined in April 2023, I was looking down the barrel of quite a decision actually because we were operating then with 17 quite independently run businesses, which were born through acquisition through -- from when we IPO-ed the business in 2014 through until 2018. And I guess the decision then is do we operate under one brand under a branded house and start to look at federated operating model to bring together an integrated business with a much more consistent single brand, single value proposition approach to market? Or do we continue to operate the business as a house of brands with a holding company over the top? I took a decision strategically that we would operate the business under one Flowtech and that we would create a lean and scalable operating model that would allow us to take a more singular value proposition to market across our 3 geographical markets of the GB, Island of Ireland and the Benelux with a view that we could then have a scalable model that we could then plug into and expand into Europe over time. Our strategy framework is under 3 key pillars. The first is the customer first pillar. And this is very much around the creation of an omnichannel approach and experience for our customers. So moving away from having lots of quite traditional independent businesses to having more of a seamless business. We're on that journey. At the heart of that journey is actually building a much more progressive and forward-looking digital capability, which I'll come on to during the course of this presentation because we're making extremely good progress there in bringing to life that customer-first approach. The second is the Power of One, not just rebranding under One Flowtech, but equally, the operating model, that federated operating model where we want to create a degree of flexibility within the respective markets by which we serve. But equally, when we can do something once across the group and we can do it efficiently and effectively, then we certainly could do that. And then underpinning all of that, a singular value proposition to market, which again, I'll come on to, particularly as we talk about the new web platform. And then finally, a world of motion. So this is the right for us to move outside of just hydraulics, pneumatics and process equipment products and services, recognizing macro trends such as sustainability, electrification, digitization, it's bringing automation and control, it's bringing additional products into the assortment, which -- including electronics actually that we need to be thinking about. But we want to stay within our swimming lane as a specialist. But by moving into that world of motion, that opens up a GBP 30 billion European market. And over time, we do see an opportunity organically and inorganically to be adding more strength to our offering than we do today. So we see a GBP 30 billion market. We believe this business can move towards mid-teens EBITDA margins in the midterm. And we believe that certainly, as the market does recover, we can certainly be looking to be outperforming the market by 2x. And everything we're doing is underpinned by digital and data enablement and it has taken some time to make sure we're building the structure and the frameworks around that. Now the execution of our strategy is focused around 6 margin growth engines. So we've attributed margin as in EBITDA growth in 6 areas. Customer growth is very much what I talked about. It's our go-to-market approach, a singular value proposition to our customers and underpinning that, having the right digital platform, web platform in which we can build out from. Commercial excellence is about buying well. It's about selling discipline. It's about gross margin management. But it's also about working capital management and cash generation, things like inventory management, inventory optimization, where we're making some good progress. We're very much focused on number three, products and service expansion. So bringing new brands to the portfolio, bringing new products to the portfolio, expanding our services, standardizing our services across the group. And own brand is important to us. It's a little under GBP 20 million of revenue. It's at a very good margin. It's a known brand in the market now. We've rebranded under FT Pro. We brought many own brands together. And we see that as being a really important growth engine for us. And operating for less is about running an efficient, lean operating model, but also making sure that we provide great service to our customers, and we do it right first time as well as some technology enablement, which we're working through as a business. And then finally, I guess, at the heart of all of that is people, talent and capability. We've built a very, very strong, highly energized capable leadership team and in fact, a team that are used to and have experience in operating much bigger businesses. So we do have an understanding around what good looks like, which is important, particularly on the ambition that we have as a company. But within that also building capability from within. We have a core engineering capability in our business. We're not just running a distribution business. We're running an engineering business. And I'll come on to that because we're getting involved in some fairly sizable and very technically orientated major projects, and we need the right capability in order to deliver against those. And if you want to know more about our plan and our execution plan, there is a slide in the pack, which we won't cover in the appendix, which just talks to how we're breaking down the prioritization of that 1 to 6 in our execution plan from 2023 through to 2027. So in terms of the summary of the first half of the year, I'm going to be opening this up in more detail. So I'm not certainly going to go into the detail that's here on the right-hand side. But the main summary really is that the market around us has remained very challenging. It's not got any better. It certainly continues to be some big headwinds out there across industrial segments. We've been very much focused on self-help initiatives, not only to drive good growth momentum, but also to continuously drive improvement in gross margins and in managing our cost base effectively to drive improved operational gearing. We are pleased to report that performance is in line with expectations. We are always up against tougher comparatives in the first half of 2024 against the first half of 2025. But this is very much about building momentum into the second half of the year. And we'll come on to the self-help initiatives that are driving improved sales pipeline, new contract wins and a much stronger order book as we look ahead to the second half of 2025 into 2026. So let me move on now to the trading highlights for the first half of the year. Picture here is an exhibition LAMMA, which is one of the biggest agricultural exhibitions in the U.K. that took place during quarter 1. And under the new branding of Flowtech and under our singular value proposition, it's great now to bring together our collective power and strength as a company to exhibitions such as LAMMA and really start to showcase our full capabilities. And we're really proud of being able to do that, which wouldn't have been the case a number of years ago when we had multiple brands. From a market perspective, the self-help is certainly helping us to outperform the market. On the right-hand side, we can see that the PMIs have remained consistently in a contracting position with limited improvement as we've looked through 2025. And in fact, that decline through the second half of 2024, which did impact on our revenue and EBITDA has really continued a little bit of ups shoots coming out of March into the half year, but we still remain in a contracted position, particularly in the U.K. And as we can see U.K. manufacturing production data, whilst there might have been a slightly more optimistic start to the year, that's continued to fall away, only really with June starting to show a slight improvement. But I think we can say that the market is very laggard. From our side, our focus has been very much on driving growth within our existing customer base and a high level of customer retention. If we just take our top 100 customers, we've retained extremely high customer retention. And actually, we can see from the chart that we've started to see a far broader growth rate across multiple industry segments, which is the blue. And actually, the yellow, which is the declining customers or the declining segments is actually becoming much smaller, which is encouraging. And we can see that the far right-hand side, that's an industry sector called crushing and screening. And this is a number of OEMs in Northern Ireland who manufacture big rock crushing machinery and screening equipment for the aggregates in construction and quarrying sector, and that has remained under lots of downward pressure. And you can see that that's also causing a bit of a drag effect. We're seeing really the decline still around some of the larger OEMs and projects in those yellow sectors or orange sectors of the market. But we're encouraged with the progress that we're making in the blue. We do have a tail of smaller customers that do have a reduced order value. But what is encouraging is that's very much holding on to the purse because of the current market volatility and trying not to spend when they don't need to spend, perhaps burning off inventory that they've already got rather than surplus inventory. But we are seeing a consistent order frequency. So as the market recovers, we do believe that, that will also recover. But what we are encouraged about is we've just launched the new website, which I'll come on to. And that's certainly that improved e-commerce platform is going to enable us to increase our share of wallet over time with existing smaller customers. And also, it will help us to accelerate new customer acquisition, which is an engine that we've not really have fired up in the business until now. So we're quite excited about that opportunity. We talked at our full year results presentation at the end of -- in early Q2 about the 4 self-help growth initiatives that we're driving for 2025. And I thought it was good to give a bit of an update of how we're progressing against these 4. The first is around the new digital platform, which we've been working on hard in the background. The second is progress around our products and service expansion. The third is around the progress we're making around the securing of new engineering projects and building out the pipeline as we start to bring together the full power of our engineering capabilities as a business to win larger and exciting projects. And then finally, the state of the union of our 3 acquisitions that we've made within the last 12 months, 2 of which we did in the first half of 2025 and also just a few comments on the outlook there. On the green bar here, one of the things that we've done very, very aggressively is we've pivoted our sales activity and our focus to what we believe to be high-growth segments. We do a lot of business, and we're very proud to do business within the indirect channel. What I mean there is we supply to a broad range of smaller distributors and resellers as well as larger distributors and resellers as a specialist, and we sell both products and services there. And we're a critical part of the supply chain. And we believe that, that continues to be a strong area for growth for us. Outside of that, aerospace and defense infrastructure, particularly around things like bridges where you've got mobile assets or moving assets, also wet infrastructure such as switch gates, flood defenses, et cetera. That's an important growth area and where there's a lot of inbound investment going in. The investment in data centers, our product portfolio sits very well in the construction of new data centers and also right across the transportation sector, whether that's in rail, off-highway, truck or marine, we still see good opportunities there for growth. So breaking those down, a word on the new digital platform. We did an assessment at the end of 2023. We got an external partner to come in and assess our digital and technology stack. And I think we concluded that the website that we implemented, I think it was in 2022 prior to coming on board, whilst we made a good investment and we felt we've built a good website, it really was suboptimal and it didn't meet the needs of our customers. We've spent the last 18 months working with an Austrian-based developer. I believe very strongly that the e-commerce, B2B e-commerce in -- particularly in Germany and DACH and Europe is actually further ahead than industrial B2B commerce here in the U.K. And so actually tapping into that knowledge, that experience, that progression, we felt was really important and making sure that we had a very progressive web platform that we could build and grow, and we could also introduce AI and other tools to give us a really great platform, not only to sell products but also to showcase our engineering and service capability and in time, actually bring some greater tools as a specialist such as configuration of systems within that digital space. So that vision to be that leading specialist in digitally enabled products and engineering solutions is very much now a reality. We went live with the new web platform in August. We cut across from the old website from July. So we did that in a staged way to mitigate any risk in the transition. So we ran the 2 websites in parallel until we were comfortable. The new platform is very stable and is running to our plans, which we're very pleased about. We're going to be rolling that platform out into the Benelux and also into Ireland in the second half of the year. And within that platform, we also provide today a white label solution for those said distributors and resellers where we provide them with a paper-based branded catalog. And when they place orders on Flowtech, we provide a branded 3PL logistics solution to deliver the products directly to their customers. So it's a key part of the supply chain. We've now created a digitized version of that where we'll be able to provide our distributors and resellers for a charge for a monthly subscription fee, the access to a web platform, the access to a digital B2B commerce platform, access to our products and services in the background, Flowtech is the engine, and then continue to provide that 3PL logistics service, all linked into the digital platform. And so that's something that we'll be looking to be rolling out in the second half of the year. The new site has got a materially improved site speed. We're down to a second. So that's best-in-class. The search capability in terms of ability to find the right products is materially improved. Still work to do. Still AI is in the background, making that better all the time. But the overall customer experience from the search to the buy, to the checkout to the delivery experience is materially better. And we've got some great tools in there for our online account users where they can save baskets, they can have multiple baskets, they can have multiple delivery routes. They can ultimately make their journey much more seamless with us. And we think all of that, including much greater security for us and for our customers is going to give us a great platform for growth for the future. So you can go to the website, you can explore, you can learn a bit more about us as a business. But also, we've launched today a new investor hub within the new web platform. And I'm pleased to say there's some great information in there that you can find as a prospective investor or an existing investor to learn more about the business as we go forward. All of this is a start. It's about improvement now as we go forward. The second point is around products and service expansion. A key part of our growth strategy is to continuously expand our products and service offering. And that's all about increasing customer penetration and reach. On the back of the acquisition that we made with Thorite, we've been really proud to expand our relationship and actually sign a new contract with SMC, one of the world's largest pneumatics OEMs alongside the likes of Festo, Parker, IMI Norgren. And SMC have awarded Flowtech the first U.K. wholesale distributor agreement. And that's really important because it means that we're also going to be helping them to consolidate their supply chain and their tail, and we're going to be playing a critical role in helping to consolidate their supply chain, which presents a really exciting growth opportunity for us as well as introducing the SMC brand to our web platform, which will automatically drive traffic to us. And then also HPC/Kaeser, it's a very, very large global German manufactured compressed air system. So this is high quality and it's highly sought after across industry. We now have access to that brand. We're working in partnership to look to see how we can grow that in terms of capital sales, but also ongoing service and maintenance contracts over the coming years. So we're excited about that. We've continued to strengthen our existing supplier relationships rather than dealing with them through multiple businesses. We've now got a group product and procurement team. We're engaging much more at a group level to drive synergy, to drive commercial benefit, but also to look at how we can coordinate things like marketing activity and start to drive that marketing engine across the group as well Flowtech. And then finally, we're seeing really good progress in the development of our FT Pro brand, which is our own brand, as I said earlier, a little under GBP 20 million of revenue, and that continues to outperform the base business, both in terms of growth, but also in terms of gross margin strength. So we're excited about that. And the link's at the bottom, if you're interested, our recent RNS reach announcements that we put out just to talk a bit more about those partnerships or it will come on to contract wins as well. In terms of engineering projects, so this could be the building of a relatively small-sized hydraulic power unit all the way up to a major project such as this here. And the pictures here are of a narrow water bridge. It's a concept design, albeit the footings are now complete. Working in partnership with the likes of BAM Construction. And this is a narrow water bridge, which is connecting the north of Ireland into the Republic of Ireland. And you can see on the bottom picture, the bridge moves completely up vertically to allow marine traffic to go through, and then will close again to let the road traffic go through. And all of that is hydraulic powered. And we're very proud to be involved in the MEICA, which is the mechanical electrical instrumentation, control and automation, including the design of the hydraulic systems that are going to be ultimately powering that bridge. That in itself is a EUR 4.5 million project, which we've secured, and we're really proud of that achievement. We have another similar project, which is the refurbishment of the Edmund Rice Bridge in Waterford in Ireland. But equally, we have a number of other projects which we've now secured, which are going to deliver us growth into the second half of the year and into 2026. These projects are a result of real focus. It's a result of bringing together the collective capabilities across the different parts of the group under one Flowtech, and it's been able to take our scale and size to market to be able to secure these types of contracts. The sales pipeline, which is making up around 60% -- sorry, the order book, which would be representing around 60% of our revenue where we would attract an order book is up by 25% at the end of the first half of the year as it was entering 2025. And so that gives us good confidence. And equally, the sales pipeline continues to strengthen. We've got good confidence, therefore, in the second half of the year momentum. And again, you can read about some of these projects on the RNS reach announcements that we've made. And then I'll just pass over to Russ to talk about number 4, the inorganic opportunities and the progress there.

Yes. Thanks, Mike. So firstly, I'll take you back to when we came on to the AIM market in 2014, access to capital allowing the business to make 15, 1-5, 15 acquisitions over a 4-year period. And I think if you added the turnover relating to those acquisitions, it would have been in the region of GBP 60 million. The EBITDA attached to those was probably about GBP 6 million, and the business spent roughly GBP 40 million acquiring those businesses. So GBP 40 million to acquire GBP 60 million of revenue. So coming up to the present day, over the course of just over 1 year, now it's 1 year and 2 weeks since we acquired Thorite in August of last year. We've acquired GBP 18 million of inherited turnover. Clearly, we are posting -- we've got plans for that to grow. But effectively, we paid nothing for that. I'll repeat that, we paid nothing for GBP 18 million of turnover. The reason for that is that certainly in the case of Thorite, which we acquired out of administration and Allswage, which we acquired out of liquidation, obviously, distress doesn't get much deeper than insolvency processes. And equally, the acquisition of Thomas Group in May of this year wasn't out of an insolvency process, but there was an element of distress attached to that. So just building on, we didn't pay anything for these businesses. There's approximately GBP 3 million of negative goodwill attached to these acquisitions. Put another way, the value that the accountants described to what we got is GBP 3 million in excess of what we paid for it or the liabilities that we adopted when acquiring the business. So whichever way you look at it, nice add-on turnover, paid little or nothing for it. The better news still is that each of those businesses is making a positive contribution in 2025. Each of those businesses are building its own momentum as we get closer to the start of another calendar year. There's a question put to me earlier today around what returns are they all producing right here right now. Well, unsurprisingly, when you take something that's in distress, it does take a little bit of time to return to profit. And it was a little bit of time in our case. Within 3 months, we've restored Thorite and Thomas to profitability. And actually, within 3 weeks, we restored Allswage to profitability. Bear in mind that was in liquidation. So all 3 of them, positive contribution in 2025. In terms of the return on revenue, a single-digit return, but very much trending in the right direction and no reason why all of them cannot get into double-digit return on revenue at some point next year. But clearly, in terms of the return on investment, it's an incredibly powerful return because, again, without dwelling we didn't pay anything for. So yes, we -- alongside the acquisition of the businesses came some new locations. You can see them on the bottom right-hand side of that slide there, probably just give a mention to Ashford in Kent. That's a nice new geography for the broader group. So yes, we're pleased with the progress we're making in all 3 of those situations. The next slide, 3 simple charts. I would suggest that each of them in isolation are quite powerful and the 3 of them combined very powerful. And I think they demonstrate that in a really difficult set of market conditions, you could still help yourself, can't you? The self-help piece. So on the left-hand side, our gross margin, our gross profit percentage is clearly trending very positively. You can see the 39.2% in the most recent half year, 400 basis points up on periods of 2, 3 years ago. Now for us, we don't get too hung up about GP percentage in isolation. It's fairly obviously more about gross profit in pound notes terms or even more importantly, bottom line profit in pound notes terms. But there will be periods in which we have to sacrifice the GP percentage for the greater good, secure volume. And there'll be mix factors in play in any particular period. By way of example, some of the larger projects, the bridge contracts, you'll appreciate that there's design work within those. There's a lot of clever people putting in some quality hours to design those constructions. And therefore, unsurprisingly, the gross margins are very, very strong. Equally, we've made big inroads into the position we inherited with the recent acquisitions that I've just talked through. So yes, whether or not that stack goes up or down, obviously, we monitor it. We're far more focused upon our overall ambition of achieving a mid-teens EBITDA margin that Mike referred to on one of the varying slides. Turning to the middle chart, managing working capital is obviously crucial. I'll draw the view's attention to the light blue bar, which represents the position at the end of June '25 and the amber looking bar, the position 12 months prior to that. By doing so, I'm comparing an apple with an apple. I'm comparing the position at the half year end with the half year end. And after excluding the impact of acquisitions, obviously important to do so. There's a 15% reduction in working capital in pound note terms, that's in excess of GBP 5 million. So crucial to manage that, in particular in a period in which your profitability isn't quite where you want it to be, which I'll come back to. So particularly strong management of inventory under relatively fresh leadership with some professional disciplines attached to them. On the right-hand side, again, after stripping out the impact of the acquisitions, it's pleasing to see an underlying reduction of GBP 0.5 million half year on half year. And that is perhaps more impressive than you'd initially appreciate because we've got that nasty word beginning with I, the inflation word, to manage. And equally, in the period under review, as everybody is aware, all businesses have had to necessarily manage the burden of the changes to the employer national insurance. So we're pleased with that. We're pleased with all 3 of those. And I think it sets us up really, really nicely for the second half of the year we're currently in and into 2026. We are expecting to achieve much greater levels of profitability in the second half this year and hand in hand with that, a strong cash generative period and therefore, the ability to reduce our current debt position.

Thanks, Russ. So we'll move on to the financial update.

Okay. So I touched on most of the numbers on that slide actually, but let's talk about revenue. So revenue H1 '25 versus the comparative period is up by just over 2%, and it's significantly up on a difficult second half of 2024, 10.3% up. And whilst that's not like-for-like, again, coming back to the fact we didn't pay anything for that revenue, it sort of feels appropriate to focus at least a little bit on the fact that our top line has grown in extremely difficult market conditions. Having said that, if you do strip out those acquisitions, we are down like-for-like against what was a relatively strong comparator and the conditions were less difficult in the first half of last year. So 12% or thereabouts down. Similar comment in all 3 of our geographies within a side. On a more positive side, the trend as regards to second half of last year is positive at 5% up like-for-like against that period. Pleasing to see that most recently in the months of June, July and August, we have outperformed our prior year comparators. And again, that points towards the momentum, that we're gathering, all of the good stuff Mike was talking about in terms of strength of order books and pipelines and the bridge contracts set out, we feel we are well set to achieve a stronger performance in the second half of the year. I'm going to talk about debt on the very next slide. So debt over a 12-month period has increased by GBP 5 million. It's obviously not a small number. That debt bridge graph is backwards looking. I'll split it into 2 separate half year periods. The left-hand side of the chart illustrates H2 last year, the right-hand side of the chart, H1 this year. Firstly, looking at the second half of last year, we didn't have any, I'll call it, trading cash flow there, EBITDA, and that's after the costs of restructuring because we've had to juggle the final stages, I would say, of our restructuring process undertaken since Mike joined the business 2 and a bit years ago and balance that against capital investment, most obviously in all the things digital related. So we didn't have the lack of profitability in the second half of last year. And this hurt and it continues to hurt us. To offset that in the second half of last year, there was strong working capital reduction. I've already referred to that in the previous slide, the middle chart, and in any event, naturally in the second half of the year, you get some favorable working capital movements. If you just think about -- it's a fairly obvious comment, but revenue in December is never ever anywhere near as strong as revenue in the month of June. And therefore, in working capital terms, there's a nice favorable movement in working capital in the second half of each year. So in the second half, we increased our debt by GBP 1.6 million. In the first half of the current year, pleasing to see our profitability returning. Nobody should think the fact that, that working capital bar has turned red means we've taken our eye off the ball. Again, it points towards the differential between December receivable book and June receivable book. And actually, our journey to working capital efficiency has continued. You'll be pleased to hear into 2025. Most importantly, if we were to spin this into a look-forward piece, what will the second half of this year yield? Well, stronger profitability, we'll have a much bigger green bar, hopefully, a bar at least in the region of GBP 5 million. We'll have strong working capital generation because we always get working capital upside in the second half of the year. And therefore, we'll have more than enough to cover the aggregation of interest and lease costs and reducing CapEx costs. So much of the EBITDA we generate should be able to be retained and lead to some decent debt reduction by the end of the year. The expectation is that we'll end the calendar year in a not dissimilar position to how we started it with EBITDA trending in the right direction, debt trending in the right direction.

Thank you, Russ. So just moving on then to trading and outlook. So it's fair to say that the main focus for the business as we go into the second half of the year is to maintain that focus on those self-help initiatives. We have seen good momentum building in Q2, and that momentum has continued into Q3. So we're encouraged by that. Our focus is very much on capitalizing on that investment in the new web platform and getting those sites rolled out into the Ireland and Benelux market as well as taking the e-commerce solution that I talked about to our distributors and resellers by way of also expanding out further channels to market in that world. We are very, very focused on execution of that sales pipeline, but also making sure that the order book is managed really effectively, both in terms of working with our customers to make sure that we stick to the schedules, but also making sure that we're very much forward planning with our suppliers to make sure that there's nothing that's going to get in the way of us being able to get on and get those projects delivered. We're excited about that. And there's some business in there that we secured, which gives us good confidence in second half of the year performance and also a step up into 2026. Those new supply agreements I talked about are clearly opportunities for growth and expansion, and we're going to continue to look at ways that we can do similar types of agreements in the second half of the year. And then finally, those 3 acquisitions that Russ talked about are gaining in strength and momentum. We're in a really good position as a business. We've proven, I think that we, as a leadership team can spot good opportunities and we can create good value and good EPS generation from those opportunities. We will continue to look at the pipeline of opportunity that sits in front of us. And in a difficult market, that includes both stress businesses, but also businesses which are very good companies and that we think would strategically be a good fit for us. And we will continually assess that to understand what the opportunities look like as we go forward. But right here right now, focusing on those self-help growth initiatives, making sure we extract that sales pipeline and order book, which is growing nicely. And then finally, sustaining that gross margin improvement, making sure that we keep operating on a lean and lower cost base. And that combined ultimately will deliver us a period, we believe, of high levels of profitability, but equally, to Russ's point, on a leverage, stronger cash generation. So that concludes the overview for the half 1 performance for Flowtech. Just going to have a quick look to see if there's any questions that have come in into the chat. Russ, I can't see any questions from this audience. So in the appendix, there's further information, both in terms of shareholder register. But equally, there's further information there around Flowtech, our industry and also, as I mentioned before, the plan. Do please go and have a look at www.flowtech.co.uk to learn more about our company. There's an investor hub down at the bottom. So if you scroll down on the homepage, you'll find about us and you'll find the investor hub lower down. Do go and have a look there. And we typically will run every quarter an open day where we'll invite would-be investors or existing investors to come up to see us in the Northwest of the U.K., learn more about our business, talk to some of our people firsthand and hopefully bring to life a little bit more about the transformation journey that we're quite well on our way into now. We don't know where the market is going, certainly through the second half of this year and into 2026. But we certainly have got lots of self-help actions, and we have good confidence that we can continue to deliver great performance. So thank you very much, everybody, for your time in joining us today. And if there are questions that we haven't covered off here, then do feel free to reach out through the channels as per the invite. Thank you very much indeed.

Thank you.