Flowtech Fluidpower plc (FLO) Earnings Call Transcript & Summary

Good morning, and welcome to the Flowtech Fluidpower 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 publish responses where it's appropriate to do so. Before we begin, I'd like to make the following poll. I'd now like to hand you over to Mike England, CEO. Good morning, sir.

Thank you, Lily. Good morning, everybody. Thank you for joining us today. Really appreciate you taking time out of your busy schedules right at the start of September. I hope everybody's had a good summer. We're looking forward to giving you an update on our first half trading today. For those of you that are new to the Flowtech story, I'm Mike England, I'm the CEO, joined in April 2023. Prior to joining Flowtech, I was with RS Group plc for just under 8 years, which is a global distribution business. And prior to that, I was with Brammer plc, a maintenance repair and operations European distribution and service business. And prior to that was with Rexel, electrical distribution company for about 9 years. So I've had about 30 years of experience in industrial distribution and services and excited to report on our progress today now that we're certainly driving the platform for growth that we've been working hard to create over the last 3 years. Russ, just a quick introduction, please.

Yes, very quickly, it's amazing how time flies. I'm closing in 8 years at Flowtech Fluidpower as the Chief Financial Officer. This next bit makes me feel really old prior to Flowtech, I have a 30-year career in professional services and the significant majority of that was in the world of turnaround and restructuring and that came in and continues becoming useful when we come across distressed acquisition opportunities. We've spoken about that in the past. I will speak a little bit about that in this presentation. So all in all, close to 8 years in the last 3.5 years of which we've been working alongside Mike and a relatively refreshed leadership team in that period.

Thanks, Russ. So just our agenda today. We're not reinventing the wheel. We should look fairly familiar if you've been on other Flowtech investor calls. We're going to just give a brief reminder of our strategy. I always appreciative that people might be joining us for the first time. So it's useful just to quickly talk about the journey that we've been on so that you can understand the journey that we're going on now. The financial update for the first half and clearly, the thoughts that we've got on current trading towards the outlook. And within that, then the business highlights, which is important. We're going to bring to life some really good examples, I think, of progress and try and create some tangibility around that as well. There is an appendix at the end. This just details our top shareholders, which is a question that's often asked. And then just a little bit more information about Flowtech and the market that we operate within for those that are interested. So just moving on to our strategy. As an organization, we've got a broad reaching capability from being able to supply a single component through a high-service distribution model all the way through to delivering integrated engineering systems and some complex turnkey projects. And we do that across Power Motion and Control solutions. We're always looking at driving our business in the most cost-effective way for our customers. And we work very, very strongly with some of the largest and most strategic global brands in the world as it relates to Power Motion and Control. And we're also very, very particular about making sure that we have the very best people and particularly in what we do, making sure that people with high technical skills and highly skilled engineers because we're a specialist in our market rather than a generalist. Just a picture on the right-hand side here has a project that we completed like last year, this is a hydraulic cylinder and this helps the Ferris to unload in a port. This was a very large-scale project in replacing a linkspan hydraulic cylinder, which we worked on as a team. So just give you an idea of some of the size and scale of some of the projects. Equally, there's many, many parts of that picture, whether it be on the boat, whether it be on the port side, where there's hydraulic components or flow power components that we can supply just to be able to keep maintenance operations running. And those are the types of opportunities that we look for. When I sort of reflect back to joining in April, I guess the vision was to get the business to where we got to at the start of this year, which was having a very much an integrated platform. The world of motion underpins very much our brand. We've consolidated around 17 brands over the last over the last 3 years, 3 in a bit years, all under 1 Flowtech, and we've also added in 5 other businesses that we've acquired during that period, which we're going to come on to. But in reality, what we wanted to do, and we're very passionate about was creating a very strong brand identity in a world of motion. A motion control really just sits across all industry sectors. It's very much across infrastructure. And the core of our business is in 3 areas of technology. One is hydraulic systems, which typically helps our heavy lifting in construction equipment and infrastructure, anything that's moving heavy loads, pneumatic systems, which is about compress their which is typically driving high-speed automation and precision control. So you see a lot of that in highly automated factory environments, for example, in robotics and process control systems where we're looking at regulated pressure temperature and flow, and that's very much around safety, efficiency and consistency. And wrapped around those technologies increasingly with the drive for electrification sustainability is the introduction of electronic technology, electrical technology within fluid power. And so that water motion is expanding. And I'll come on to that in terms of market size because that does give us a great opportunity and a runway for future growth. Through the integration plan that we've been running, which I'll come on to, we've now built an integrated platform. We go to market through 3 very clear value streams. The first is products. We have high-service distribution supported by our A brand partners. And we hold significant stock in our 3 markets: the U.K., Ireland and the Benelux. And we also export to over 80 countries around the world. And that very much is if you need it quickly, we can get it to you quickly, high stock availability, high service. From a services point of view, the second value stream, this is very much where we're looking at diagnostics repair. We will manufacture in subassemble systems on behalf of original equipment manufacturers or systems builders all companies that are looking to maintain their operations and we have on-site services teams as well who are driving systems optimization. And then finally, the third value stream is projects. And we'll give you some good examples of this today. It's a very strong growth area for our business, where we're designing, building and integrating complex systems in some large scale projects. We worked across a very fragmented and complex supply chain. We want customers that have a real special supply requirement. And we combine that distribution capability with our engineering expertise. So we work with global component manufacturers. We supply into the trade who are then supplying into the end markets. We also support directly systems builders either with components, but also by building systems for them, that could be subassembled systems that are going into a finished product. We support maintenance providers and ultimately, end users that are operating critical assets. And everything that we do as a business is very much inside the heart of industry and infrastructure where there is movement. Anything that you see that is moving, typically, it will have some sort of hydraulic pneumatical process equipment within it. We are at the dirty end of the market. I would say that this is something which is a very sustainable space. And when I say dirty end, what I mean here is that this is very much helping companies to get their machinery running or to building machinery. And also, we're working with some high-end market segments where quality and high standards such as oil and gas, nuclear, aerospace really matters. And certainly, in our build environment and our production environments, those are critical sectors for us as well. Our strategic plan was introduced at the start of 2023. This was laying out a very, very clear and solid foundation for growth. We're focusing in 3 areas: customer first, really driving a customer-first culture. But ultimately, how do we increase our customer base how do we diversify, but also how do we create an omnichannel approach. And we'll come on to this, but we have been in the background building a new digital platform so that we can ultimately start to give customers a greater experience in the omnichannel world. We believe with the platform that we've built and that focus on customers, we can outgrow the market by 2x. And certainly, the growth rate in the first half of this year, we feel is a journey towards that. The Power of One is very much been around consolidating our businesses all under 1 brand. But importantly, how do we take our complete offering to market through a consolidated and differentiated value proposition and also building an operating model in the organization that's fit to scale. This is a large market. I'll come on to that in a second. And we do want to build the business for growth. So we have a regional operating model, but we've built some very, very core group functional capability that as we scale will certainly help us to grow faster and become more efficient. And that's why we believe that, over time, we can take this business to mid-teen EBITDA margin. A World of Motion, as I explained, is how we expand our product offering into that wider world of motion. That market within Europe alone is GBP 30 billion. It's a GBP 30 billion market opportunity. So there's plenty of headroom for growth, and it's a very fragmented market. And our goal here is to expand our products, our services and our geographical reach, both organically but also inorganically over time. And then finally, we've detailed out 6 very clear growth engines. And everything that we do as a leadership team is very much focused around these 6 areas. I'm not going to labor on that today, but this is very much driving our [indiscernible] plan. And clearly, we've got some key initiatives under each of these areas. Some of those are bring to life today. And then just in summary, that road map since 2023 and where we are today was a period of initially diagnostics putting in controls and putting in place an immediate performance improvement plan. There was quite a lot of areas that needed improvement at the beginning, both operationally in terms of our service and our stock management our commercial discipline, our selling effectiveness, marketing effectiveness, but also our IT and digital infrastructure. '24 to '25 has been very much done around restructuring the business model, as I described, getting the right organizational design in place, powering up our leadership and our core capabilities within the business, integrating the business under 1 Flowtech, driving simplification into the model. And then in '25, we were very pleased to launch in August last year, the new digital platform in the U.K., and we'll be able to give you some updates on that today. And also really restoring some disciplined growth focus across the 3 regions. And then here we are in 2026 and beyond. And we're very much now through that transformation phase, and we're looking at leveraging our growth platform and embedding that culture and ultimately building on those foundations and driving some disciplined growth over time. Within that, we've also acquired some businesses. And so we've been integrating those businesses. And again, we'll give you some updates on that as we go through the presentation today. So it's been a tough journey, transforming businesses is not easy. It requires a lot of change. Not everybody likes change. And so we've been working on that journey. We've had to make investments. Our capital expenditure envelope has been high over the last couple of years. That's now coming down, but we needed to invest in the business in a number of key areas to give us that platform for growth. And most importantly as well, underpinning all of that, in my mind, has been getting the culture shift right in the business so that we can really bring everybody under that 1 Flowtech philosophy in how we go forward. Our 2026 strategic focus then that leads nicely into where we are at the half year, breaking that down into 3 areas. That scalable integrated platform that was in place at the start of the year. We saw good momentum coming out of 2025. We've continued that strong momentum. Now it's about optimizing that operating leverage, and we'll talk about that a little bit more as we go forward in the presentation. But we're delighted with the revenue growth in what is continue to be some tough market conditions over the last number of years, and that has continued certainly into 2026 as well. And so we do believe we're outperforming the market with a platform that's now in place. Also a critical focus for us is deleveraging the business. We do expect through 2026, that deleveraging to continue to improve, and Russ will talk openly in terms of how we see that will be driven through improved EBITDA and improving the cash flow through the second half of the year. And then finally, the earnings accretive inorganic growth. We acquired 2 businesses in 2026, which we'll come on to. But also, we acquired 3 businesses in the previous 18 months. And so we've been working very hard to integrate those businesses whilst we build a pipeline for future opportunity for inorganic growth to '27, '28 and beyond. So that's the plan. It hasn't really changed. We're very focused around it. And that leads me nicely into Russ to give you an update as it relates to our financial performance in the first half of the year. Russ?

Yes. Thanks, Mark. Just wait for the slide to appear. There we go. I'm going to come back to comments on the top line. I'm going to start with a more important line of the profit and loss account. I'm going to pick underlying EBITDA. And everything I'm talking to on this slide really points towards our profit improvement story. 2024, the underlying EBITDA was 5.9. 2025, it improved to 7.7 and the market expectation in the current year is 10.2. So I'm going to achieve 4.5 million in the first half. That obviously points towards incremental EBITDA in second half, which we believe is eminently achievable. So what was 5.9 in '24 should become at least 10.2. It's probably 1 of the key headlines to set out. So coming back to the top of the account there, the turnover which the way you look at it, we've grown if you want to say, in absolute terms, it's a 24% increase first half this year versus first half last year. I personally don't think that's the best headline because, of course, that takes account for the benefit of some of our inorganic activity. So on a like-for-like basis, the growth was 13.3%, H1 versus H1, maybe a better stat is the 10% H1 this year relative to the second half of last year. And within that last start, it's pleasing to see all of our geographies growing quite nicely. I'm rounding that those growth H1 versus H2 2 were 9% in Great Britain, 15% in Ireland, and 13% in Benelux. So the top line story is, I would argue, nicely positive. Gross margins, I can remember presenting -- so I've been closing in on 8 years, but I can remember the gross profit percentage being as low as 33.8%. I'd rather [indiscernible] to remember that. I didn't even check my notes. 33.8%, I think that's probably back in 2019 there or thereabouts. And as high as 39%. It's actually 37% is towards the top end of that range. And we've always said it's all about gross profit or more to the point, bottom line PAM notes, not any 1 metric. The reason for the 220 basis point reduction in gross margin, can I think we explained in 3 broad reasons. Firstly, and I'll say a little bit more about Q Plus like in the presentation, but that was a great acquisition. It performed particularly strongly, but its gross profit percentage is quite materially lower than the rest of the group combined. So obviously, when you get about 8% of your revenue with a newly acquired business at lower gross profit margins, the mathematics of that as an impact, probably about 60, 70 basis points of that 220 is explained by the Q Plus impact. Secondly, we've chosen to be sensibly aggressive with our pricing in certain targeted growth situations, whether or not that be with strategic relationships with key suppliers or big new OEM customers or clawing back maybe some business that we lost in the past in sectors such as crushing and screening. So deliberately targeting the volume at the expense of the GP percentage, that's probably another 500 or 600 basis points. And then the third reason is just pretty tough out there. The pricing inflation regularly from our key suppliers, and we feel we've dealt with that in a Northern term in quite a savvy manner. We've been careful as to how we increased our own prices and when. So all those things combined point toward a reduction from the 39.2% we saw last year, but still, I would suggest a very healthy 7%. In terms of overheads, yes, again, it's tough. I mean, in particular, when you think about national minimum wage, which impacts either directly or indirectly about half of our people. So 50% of our people are impacted every time a Chancellor announces an increase. Pick what the period you want, but if you go back over a 5-year period, national minimum wage has increased by 43%. And if you did the same calculation over a 3-year period, I think it's more like 25%, but very significant when 2/3 roughly of our OpEx base is people costs, and 50% of those people, as I say, the demographics of our workforce is such that they are affected by national minimum wage. So it's tough. I mean, could we have managed a position whereby the underlying increase was less than 7%, probably. Would that been in the best interest of the business, in our opinion, definitely not. So all in all, it's pointing towards a profit improvement piece, as I said, 5.9% becoming 7.7%, market expectation of 10.2. I'm going to talk about that on the next slide, Mike, if you could move it on it. So as it relates to debt, I'm going to do a little bit on a look-back basis. And I think more important, we all do a little bit on a look-forward basis. So quite a busy color-coded chart there, but a couple or 3 things to draw out. Firstly, whilst our EBITDA performance is improving and should continue to improve. It's not quite sufficient to cover the aggregation of capital investment of lease payments and interest payments. The deficit is as low as it has been in recent years with our restructuring and CapEx numbers, pleasingly reducing, but not quite colored that. The imbalance is about GBP 1.5 million. We did raise more equity than we needed for the Q Plus acquisition earlier in the year, and that's obviously pretty helpful GBP 2.9 million is a differential between the 2 blocks towards the right-hand side of the chart there. But probably the 1 I want to draw your attention to most is the working capital piece there over the full 12-month period. We've actually generated GBP 0.6 million of our working capital. And given we've done that in a period when like-for-like growth has been in excess of 13%. I think that just point to continued strong disciplines in that very important self-help area, all aspects of working capital management. In fact, our turnover in May and June this year was approximately GBP 5 million more than in May and June 2025. So in that set of circumstances, obviously, the data book is materially higher or should be. But with a tariff a couple of improvements in data days, manage the inventory and the payables efficiently. So that management of working capital has been over recent years and will remain absolutely fundamental going forward. So on a go-forward basis, I think the market expectation is we end the year with circa GBP 11 million of bank debt. Our facilities, by the way, are aggregate GBP 25 million with Barclays Bank. So we're targeting GBP 11 million there or thereabouts. How are we going to achieve that? Well, I'll probably point towards 3 key areas. And firstly, the improved profitability. Obviously, at some point, profit equals cash. So we should have in excess of GBP 1 million more EBITDA in the second half than the first half. Next 2 points are probably more important as it relates to cash flow. As it relates to our major projects, which at the moment is dominated by the 2 bridge contracts in Ireland, we're expecting the second half of the year to generate GBP 2.5 million of positive cash flow. At the half year end, we were starting a modest cash negative position in the second half, we confident should be strongly cash generative. And of course, we'll have the benefit of the natural unwind of working capital. There is no way that our debt book is going to be anything like as high at the end of the year as it was at the end of June as much as we would like to be, turning over as much in December of June, it simply isn't going to happen. So for all of those reasons, we are confident of some significant debt reduction in the second half of the year. And wouldn't it be great if we could end the year with our debt and our underlying EBITDA not dissimilar numbers.

Thanks, Russ. So just on some business updates. I know there are some questions coming in, which was asking some questions actually around some specifics, which I think we're going to be covering some of those off here, which is helpful. So let's move on to some business updates. We've been very consistent over the last number of investor presentations around our self-help growth levers, recognizing that the external market really since the is well documented has been some heavy headwinds, notwithstanding that's continued this year with the conflicts and some of the challenges that that's creating. So for us, our belief is that we have to deal in the world that we operate within. It's the same for everybody. And so we always are very, very clear with the team. This is very much around control and controllables, but also let's go out there and make our own success irrespective of what's happening in the market. These 4 areas we've been very consistent in talking around. And so what we want to do was just to bring this to life with some good examples. Underpinning this has also been a focus around targeting some higher growth in issue sectors. And again, I'll just touch on that as it relates to 1 example. We are very, very focused and remain very focused on maintaining our service levels. I'm really pleased to report that certainly over the course of '25 and this year, since we've completed the performance improvement plan, the service continues to be maintained. The on-time to promise has been very robust at around 99.8% around our distribution business and we've had 97% stock availability across our core ranges. And that's really important for us because the ability to be able to react and certainly, from a maintenance and operational point of view, the customer needs a product and then it tomorrow, having the ability to be able to ship that up to 10:00 at night, get to a customer tomorrow is a key underpin of our business. And so whilst we're focusing very much on the growth levers here, underpinning that is still a ruthless focus in the company around customer experience customer service and continuously improving that. And that's been part of the culture because that's not always been the case in the past. From an update around the key areas, the new digital platform, we launched the U.K. website in August last year. It's quite undertaking, building a completely new platform relatively from scratch. The good news now is that we've got 12 months of measurement. We've got 12 months of reporting. We've got 12 months of data, which we're now able to look at on a like-for-like basis, which is great. Delighted to report that we're now sort of seeing double-digit revenue growth coming through the new web platform. We've got active customers, those customers that have purchased with us in the last 12 months are up by 7%. And the data points within that also in terms of average order value and average order frequency are all stepping up in the right direction, underpinning that revenue growth number. most importantly is attracting more new customers to Flowtech. I think historically, our website was operating a bit more of it as an order portal. So we have new accounts that are opened in 2026, 41% up against the prior year. And pleasingly, 90% of those are placed in order. And that does give us an opportunity did then look at how we can drive more lead generation and we can start to upsell and cross-sell product ranges into those customers. And we've got some great success stories within that some customers that have come to us who we didn't know. And they've turned out to be fantastic growth opportunities for the group, which is great. We've also got some other stats, the new order customers through the website, 4.5x higher than in the prior year. And we're also generating a lot of new product distribution accounts or trade customers, they're ultimately growing and coming to the new website. So for us, this is a really good indication of progress. Still early days. Our website is not complete, continuously learning, improving. We constantly listen to customer feedback. We're having a weekly trading update where we're making improvements all of the time based on customer sentiment, customer feedback. So our goal here is to continue to build what we believe to be highly technical and supportive of interactive website for the grower market. Pleased to report that the website went live in the Republic of Ireland in August this year. We didn't have a website in Ireland. So this is a big step forward for us. It's very early days, so I'm not going to start giving you any statistics on that. We're just pleased to have the website launched in the public of Ireland. And we've got the Benelux rollout planned this month. So that's coming on stream. So we'll have all 3 of our geographies on the new platform by the end of the month, which we think is a really important milestone for us. And then finally, in the background Flowtech as a company, as always for 40 years, provided a fantastic service to trade customers to other distributors. In fact, the business up until 2014 was operating very much as a master distributor. And with that, the business has always operated with a paper-based catalog. And there has been a demand over many years for us to be able to provide a digitized version of that catalog. And I think we've had different attempts at that. We're pleased to report that we've now created a new white label platform. We've rebranded this at digital. And this is all about inspiring industry towards a digital future. There are hundreds, if not thousands of distributors and resellers in the world of fluid power and providing them with a digitized approach provided them with a fantastic web platform backed up by a white label 3PL logistics service also access to over GBP 30 million of inventory and all of that availability and service that we talked about, we think is a fantastic opportunity for us to support the market, but also to enhance growth. It's early days. We wanted to make sure that we've launched this in the right way in a steady and careful way, bringing our existing customers on the journey first, migrating them. We've now got an ongoing pipeline month-on-month. We've got 8 new customer adoptions going live as we speak, and we've got a long pipeline of opportunity as we look forward. And this is a program that would not just look to roll out within the U.K. market. But over time, we look to adopt this approach into the European market. helping other distributors who perhaps struggle to go on that digital journey. And we feel that that's a key part of our growth strategy as we go forward as well. So lots of progress in this area. But as I said, it's a key focus for us. And we see this as being a big growth -- a part of our growth levers as we go forward. The other area I just wanted to touch on was products and service expansion, enhancing our capabilities and partnerships and accelerating our growth. Just a reminder, we have a very important product offering, which is FT Pro. This is our own brand, our own range of products that's been in the market now for over 30 years. It's a key growth and margin contributor for the business. We now have annual revenues of circa GBP 20 million in FT Pro. And the range is now more than 17,500 top lines, and we've got an overall part of a range of over 63,000. So this is quite an extensive range of products. We did rebrand 2 years ago, 11 different brands all under the FT Pro brand. And our goal now is look to see, a, how do we improve the marketing of the FT Pro range through our web platform and making that more readily available to the wider market. How do we roll the FT Pro range out into our other markets outside of the U.K. How do we also increase through product range expansion over '26 and into '27 and beyond. And we've now got some new ranges which are coming on stream, which we believe will give us some positive upside as well. So this is a really important focus area. We're making progress. For me, I think what's been lacking has been the ability to really push the brand through the web platform, and we've now got that capability in earnest. And so that's something that we're going to be putting more focus around as we go forward. We've also, as we discussed previously, we've developed some very strong strategic supply partnerships, 1 of those, which actually was strengthened through the acquisition of Fort at the end of 2024 was an appointment by SMC, a global leading pneumatics and automation company. And they awarded us their first U.K. wholesale distributor agreement in the middle of 2025. So that's been a program where we've been consolidating their customers through the Flowtech trade partner platform, helping them to consolidate their long tail of direct customers and their goal being to move more of their direct business through distribution. We've got now over 230 customers that have migrated to the Flowtech platform, and that's on a run rate of around GBP 1.5 million of incremental annualized revenue, and there's plenty more opportunity there that we're working on with SMC. And we've got a new program with another global flow of power and motion control seller, which we're commencing in half 2 this year. And that's very much a similar program to consolidate and develop a program into our distribution network. And we believe that, that opportunity similar to SMC is worth in excess of GBP 2 million of growth to the group. So these are the examples of opportunities, working with some of the brands that you can see at the bottom here, these are global multibillion businesses utilizing Flowtech and seeing the opportunity for our platform to help them to grow and to help us to grow together. Another area that I called out was that focus on targeted high-growth industry verticals. We mentioned areas such as defense. We mentioned infrastructure, which I'll touch on in a minute. We talked about data centers. We've talked about transportation. And actually, when we get on and talk a bit more around areas such as Helipebs which is the acquisition that we did in June. This is also giving us access into some new and developing sectors, such as oil and gas, subsea, marine and nuclear, which are exciting segments for us. But just on data centers. We embarked on a program of work about 24 months ago. And the starting point was looking to see what do we have across the group in terms of our product offering. Bear in mind, I imagine that we're operating as lots of different fragmented businesses. How do we bring all that together to provide a value proposition and a value stream for data centers as the new data centers are being built. The diagram at the bottom here, I won't go through it in any detail, just talk around the different areas where our products and service assortment very much support and adds value to the building of data centers and also the maintenance and operation of data centers as well. We've been building very strong relationships across the Irish market and also across the U.K. market specifically, developing our understanding, developing our reputation but also developing our capabilities. We've exhibited a data center world in Ireland and at XL in London earlier in the year, raising the awareness and the profile of our product offering and our service offering in this space. I'm delighted to say that on the back of that, the revenue is growing at about 128% year-on-year. And more importantly, actually, because this is a longer-term play as we know in terms of the ongoing planning and building of these particular facilities. The order book and the pending orders is now in excess of GBP 2 million. So we're quite excited about this opportunity. But it's just 1 example of many where by putting a focus on a specific vertical segment, we're starting to see some early signs of success. And the case study on the right-hand side here is an actual project that we've completed at a new data center in South Wales, something we're very proud of. So just gives you an idea of the size and scale of some of the work that we're doing in this particular space. Then as I mentioned, infrastructure, engineering projects is an area where we're gaining very good momentum, and I think we're building a good reputation. We announced previously that we won 2 large infrastructure projects in Ireland. One, which is the Narrow Water Bridge connecting Northern Ireland to Southern Ireland, and the other, the Edmund Rice rehabilitation project in Waterford in the Republic of Ireland. These 2 bridge projects combined about EUR 9 million of revenue, and that being spanning across '25, '26 and the narrow water bridge also into 2027. And I'm pleased to report that those projects are progressing very, very well. The Edmund Rice bridge is expected to be completed in Q4 2026. The Narrow Water Bridge project is on track the expected contribution for half 2026 is certainly in line with expectation, and that project is set to continue into 2027. There was a little bit of shift in the project time schedules from the first half into the second half. So there's a bit more half 2 weighting than originally expected, but we do believe in the full year that the bridge projects will deliver what we had effectively planned for during the course of 2026. And just a word on these projects. The group continues to develop its infrastructure and its capabilities in supporting these types of projects. We've been building out the pipeline of larger turnkey MEICA projects. MEICA is the phrase for mechanical, electrical instrumentation control and automation projects. And we're seeing an increase in the number of opportunities and the number of tenders. And typically, these are in areas such as flood defenses, bridges, locks, ports, harbors and other large-scale infrastructure where there is movement. We've got 5 live opportunities, which we're currently in bid processes for. They represent more than GBP 20 million of potential contract value over a 3-year period, I would say. And I guess it's just worth noting that these major projects have a long the bid cycle, they do typically span over multiyear contracts. There is an opportunity in a number of instances for longer-term maintenance contracts post completion. So they do create reoccurring revenue streams going forward. We believe that the revenue profit and cash related to these projects is very forecast all, but it's variable based on the project milestones by contract, and that's something that we just need to be mindful of as we go forward. But it's certainly an area of focus, and it's an area where we're gaining experience and expertise as we go forward. And Russ, do you want to just then pick up on inorganic opportunities?

Yes. Just before I do so, maybe just to build a little bit on the engineering project side, and I just noticed a question that's coming around not only our profit improvement journey, but how do we get to our double-digit and ideally mid-teens EBITDA position. And engineering projects is a fundamental part of the organic growth clearly, to get to where we want to get to will be a blend of organic and inorganic, but is it related to organic. There is so much opportunity in this space. I'd be amazed if the turnover doesn't increase year-on-year-on-year in this part of our business. It does think there's a risk that we enjoy the benefits of the Irish bridge contracts and then get a fallow period. And we expect the work to be plentiful, and we expect to do it well. And therefore, we expect the bottom line margins that fall offer it to be particularly strong. So the growth today, it's about GBP 7 million revenue stream. But tomorrow, whenever tomorrow is, it's not that far away, we're targeting materially more revenue, materially more profit from this really, really important area. By the way, it might look on occasions quite complicated. But when it boils down to there's a lot of what I would call as a Northerner, a lot of bread and butter stuff that goes on in these things. It's not overly complicated. We're not stretching capabilities, and we've also invested quite significantly in the quality of our team to perform this work in recent [ year ]. So yes, Mike, if you can...

If I may, just whilst we are on the question, I just noticed that the question around what differentiates us in this area. I'd say scale differentiates us. We don't just have the ability to provide the design consultancy on these projects or the project management of these projects. And we also have in-house manufacturing capability, either in-house ourselves or working in conjunction with our strategic supply partners. So our ability to provide a complete turnkey solution actually allows the projects to catch down the complexity of the number of partners that they need to work with and it puts us in a very, very strong position. And I think that's a unique differentiator for us as much as we can build in-house, we will. So these types of projects do feed our engineering services and solutions centers, which is important. And all of that helps with the operational gearing as we go forward. That's important for us. And also just a question about the Belfast Harbor project, which I guess would sit on underneath an engineering project for sure. And this was just linked to what's happening as it relates to the Netherlands. We're excited to be in the battle ourselves out there just the other week, meeting with the team and going and meeting with a number of customers out there. I think what's exciting is that clearly, the same is true. There's a significant amount of opportunity within the ports, but also the majority of the Benelux markets are below sea level. And there is a significant amount of infrastructure upgrading as needed, and that's the market for us, which is very interesting. And so building our capabilities there to be able to do similar scale projects is a key objective for us as well. Just to pick that question of.

So this slide here is becoming quite familiar one. It's got an extra column on it [indiscernible] with Helipebs now. But just to remind you that in the last 2 years, we have done 5 acquisitions. Thorite for was out of the administration. Allswage's out liquidation. Thomas was in distress and Helipebs have announced a wind down of activities. So suffice to say we've paid very little for those 4 individually and collectively. And that is proven by the fact that Thorite have GBP 2.2 million of negative goodwill attached to it, i.e., we got a lot more than we paid for. Helipebs as, as those of you who have read this morning's announcement, GBP 1.6 million of negative goodwill. Consideration was only GBP 400,000 for Helipebs, and we got quite a lot in return. Q Plus was a beautifully profitable business that we acquired earlier this year. Delighted to say that, that is performing particularly well. And in its 40-year history, it had its best ever month in the month of March and lo and behold, we beat it in the month of June. So we're delighted with its performance, its contribution in the first 4.5 months of ownership, and we look forward to a strong contribution from it in a full 6-month period in the second half. But if you add up all the turnover we acquired there, it's in the region of GBP 30 million. And aside from Q Plus, those businesses were either loss-making or certainly not profitable. We did pay GBP 6 million for us. That will become 7, once some deferred consideration gets paid. But all in all, we acquired GBP 30 million of turnover and only Q Plus was profitable. So we're obviously pretty pleased that we can make that statement at the bottom of this page. But as we ended this year or into next year, we should be delivering GBP 35 million to GBP 40 million of top line and in excess of GBP 3 million of EBITDA. So we think that will be a nice build on the profit improvement story, and then I'll segue into a good 2027 year. So I said a little bit there about Q Plus, not only delight with the numbers that it's producing. We're delighted with the manner in which the people within that business is really, really embraced being part of the Flowtech family. There's a real happy feeling a bit of a real buzz about the place, I was with Mike a couple of weeks ago and went out to the Benelux, great to see. As it relates to Helipebs, similarly, I mean, that was -- it made Thorite look young. Thorite when we bought, it was 174 years old, Helipebs was 188 years old. As I said, it had announced its wind down of activities, most of the disappointment of some of its customers. And fairly, obviously, it's taken a few months to get it back up and properly running. But it's received in the region of GBP 2.5 million new orders, which stepped it up beautifully for the second half of this year, in particular the last 4 months of this year and into 2027, and the business has brought opportunities, which we didn't previously have into new sectors such as subsea and areas of defense and oil and gas. So there's lots of sort of cross group synergy play attached to it as well. So yes, having not paid a lot for that with all that negative goodwill. There's a feel good factor about that one, and it should be nicely profitable in the balance of this year and I would hope beautifully profitable into '27 and beyond.