Invinity Energy Systems plc (IES) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Invinity Energy Systems plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received 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 submit the following poll. I'd now like to hand you over to Jonathan Marren, CEO. Good afternoon, sir.

Thank you very much. Indeed, good afternoon, everybody. We're also joined, of course, by my 2 colleagues, Matt Harper and Adam Howard. We're all here in London. Delighted to be talking to you together. We've got about an hour session here. Aim is to go through the presentation in about half an hour and leave enough time for Q&A. We've already had some really interesting questions come through. I just want to leave as much time as possible to go through those and answer all of your questions. So recognizing that on this call, we have a number of people who have been with us for many, many years, but also some who are new to the story. So there's a few slides to go through just introducing the business and where we're up to, and then we'll get into the interim results themselves. But one thing I'd like to do for whether you are new to the story or whether you have been here for some time is just to talk about how we are describing the business at the moment. And the reason being is that we thought long and carefully about how we tell people who we are and how we differentiate ourselves from the competition. And that's not just to investors, but that's also to the commercial space. And what's reassuring is I think as you sort of hopefully hear the message now, we're getting very good traction as we talk about this, particularly with the commercial customers. And the reason being is that we're able to say what we offer is a flexible energy storage solution. And the reason flexibility is important is that markets are changing rapidly. And by that, with electrification, the requirements from the grid are changing rapidly. And there's a real risk that if you do buy an asset that doesn't have flexibility that it could quite quickly become a stranded asset. And that obviously is quite a big danger. There are examples of that across markets. A particular one is in the U.K. where 5 or 6 years ago, a lot of 0.5-hour, 1-hour batteries were put on to the grid, chasing a particular revenue stream. And quite quickly, when that became saturated, they became stranded. We have a flexible battery solution. It's flexible because there is no restrictions on cycles and it will last for 30 years. And particularly, as you start to talk about things such as the power requirements for AI data centers, that is a really difficult and changing market. And when you -- we offer a solution that really can change with the requirement from such an AI data center, that's really attractive. So when we talk to industrial businesses who are designing these solutions in, that is really, really exciting. So we do that across the globe, across all markets, but we do do it on a localized basis. And that is really quite attractive as well because you're seeing across international markets, a drive for localization, which is being valued. And that's particularly true across the U.S. It's true across Europe. It's true across Japan and other markets. We'll come to the U.K. a little bit, and there is obviously some good questions on Cap and Floor, and I'll sort of comment on that and we cover that in more detail. So if you look about our technology as well, we really are a proven mechanical technology. And mechanical, I say that because if you look at the assets that are typically put on to the grid over the last 100, 150 years, those are all mechanical assets. They're a gas asset. They're a coal-fired power station, they're a nuclear asset. What they're not necessarily is something that was really designed to go in a mobile phone or an EV and then has been sort of pushed forward and put on to the grid. And therefore, just like a car, if something goes wrong with that car, you can get in there and you can change that component part. You can change the wheels, you can change the oil. With us, it might be a valve that isn't working. It might be a pump or a pipe. That's quite easy to go in and resolve. If you have something such as a mobile phone here, typically, when that goes wrong, you're throwing the entire cell away. And typically, that can come with some quite complicated ramifications when you look to replace that across a wider field. And so therefore, we are more akin to perhaps a pumped hydro in a box. A pumped hydro separates your power and your energy storage in terms of your water that's produced with gravity and push downhill through a turbine that generates the power. For us, we do that by a chemical reaction. But ultimately, it's the same. And so for a user looking at this, it's not a new technology at all. And then well, flow batteries were first patented in the 1880s. NASA did some good work accelerating that forward in the 1970s, and we've been working on commercializing this since the merger in 2020. And so when you talk to a commercial business, this isn't a new step forward per se. This is technology that's been established. It just hasn't had the investment to date to accelerate as fast as other technologies. And then when we talk to what we are doing in some of the other areas, they get much more comfortable in that. And of course, we offer that in 2 separate areas. We offer that in a containerized solution ENDURIUM, but also we're able to talk about the FlexBase solution at the bottom. Now what you'll note is I haven't talked about LDES, and I haven't talked about non-lithium and that's deliberate because actually that flexibility means we can offer different types of duration storage, not just LDES that forms part of it. And of course, we're very good at doing that, and we are competitive in that area. But that FlexBase project is a 2.5-hour system. That's not long duration, but actually, that's a use case that works very well for us. And then in terms of non-lithium, I've never liked saying we are a non-lithium business. You don't go and buy or you don't try and sell someone an SUV by telling them you're not a performance sports car. Tell them exactly what you are. And I think that's really important. So that flexible energy storage really resonates. And then when I talk to customers, we move on and talk about the track record because actually having those 2,000 batteries installed in the field and working for our customers is a real differentiator. We very recently announced that we have 10 gigawatt hours of power dispatch from our batteries that we are very proud of. And you'll see in the interims yesterday, that's notched on to 11 already and growing rapidly. And that's important because all of the projects we talk to now, they typically send in technical consultants to review where we are. They need the track record, they need the data. These assets are looking to go on the field for 30 years plus. They have to work and they have to work in a robust way. And then the other point is that demonstrable cost reduction because ultimately, we can have characteristics of the battery that are attractive. But if it's not at the right cost at some point, you won't get through the financial gateway. And the work we've been doing to bring cost down is really opening up that market. And then finally, we talk about where we are indicatively from a price point, we are having some really interesting and accelerated conversations that we haven't had before. So just on this slide, we have 180 or so employees. To some people, that sounds quite a lot to others, not very many at all. A lot of those are working on that cost-down approach. It is a product that ultimately is steel, it is plastics, it is liquid and its component parts. But actually, as you iterate those together, there is about 60 or 70 work streams that the team is working on to take cost out. And we are putting the resource and the investment into that to make sure that we can step ahead of all of our competition, and that really is important. So a reminder of why we win, it really is that unlimited cycling. That's where we focus on the unlimited cycling, the lack of degradation, the fact it will last for 30 years. And those are characteristics which are really, really valued by customers. We do talk about the fact that there is no thermal runaway risk. That is one of the reasons, but not the only reason why we're involved in the FlexBase project. But increasingly, as you look across the world, that lack of thermal runaway really does make a difference from a permitting perspective. Anecdotally, you'll see the Moss Landing lithium battery fire that closed the highway in California a number of years ago is back on fire over the weekend. These are really -- and can be really unstable assets. And for us to be able to talk about the fact there's no thermal runaway risk makes a real difference from that planning perspective. In terms of manufacturing, what we're able to do is localize that so that we can take advantage of those local programs as well. So domestic content is really important. And I think there's a question coming up on that as to whether we can take advantage of that, particularly in the U.S., and I will not prejudge the answer to that matter and come on to that in a minute. What is really, really important to me is how our customers think about us. And the 11 gigawatt hours is ultimately the result that you can't hide away from, and that will be a growing number. But what's really important to me is that customer journey from order through to predelivery through to delivery and then commissioning and then looking after customers afterwards. Dr. Craig Reiter there, who is from Viejas, that is the site just outside of San Diego, where there is our battery connected to solar outside the casino, powering that casino. That asset has been worked extremely hard that was recently commissioned and Indian Energy are really relying on our battery to be providing the work at that site. And look at the testimonial on the site, we have no stronger fan of the business than Indian Energy, and that's really, really positive. So one of the reasons why the funder of that project, the California Energy Commission, the CEC is again looking to push projects our way. And you saw that from the announcement quite recently of Pacific Steel Group. They were a funder of that. And as you can see, the results of the track record on that battery have been really positive towards us. So we pushed the team very hard. We do go the extra mile to look after our customers. It is a small industry, and they do talk and having that word-of-mouth referral is really, really important to us. From an international perspective, it's interesting how this slide has developed over the last couple of years. We do have a version of this that shows where we were 2 years ago. And this looks like quite an empty map 2 years ago. Now you can see we have a significant number of projects in the U.S., particularly on the West Coast. Again, reference to the California Energy Commission that supported us. These are projects that are either working in the field at the moment or where we have signed contracts and are delivering. So that sits across both the East and West Coast in the U.S., but also across Europe as well. You'll see we have the FlexBase project, which we'll talk about in a little -- in a few moments' time. The Copwood Energy System, which will be commissioned very soon. We just -- the connection to the grid is just being finalized at the moment. We're ready to go. We're just waiting for others to do their work. And then, of course, on the far right, Spencer Energy. That's a site that's been in the desert in Australia for a number of years now, and it's probably our -- almost our longest and best performing asset in some really harsh environments. So again, when someone says, well, how do you operate in the heat? We can show them the data there, that's really important. From a global manufacturing base, we continue to support the U.K. through Bathgate and Motherwell. And FlexBase project will continue to support those 2 factories. We'll come on to Cap and Floor in a moment and how that potentially could change that or otherwise. The U.S., as you've seen from where those projects are, do require U.S. content. And that's one of the reasons why we will have the factory up and running by the end of this year, and that will be really important in servicing those markets. So well spread across making sure that we use China from a low-cost perspective to deliver the sort of the heavy industry inputs, that's the steel container, that's the tanks. And then sort of elsewhere, we can put the balance of system, we can put the electrolyte and of course, stacks manufactured locally. And then finally, I briefly mentioned about cost before, and this isn't the first time I've mentioned it. We recently went back and just had a look actually about how much cost we took out of that VS3 product during its journey from when we first deployed a system to site, which is really around the Scottish Water days to the last system that we sent out, which was December 2024. And actually, we took about 60% of the product cost out on that VS3 journey. Now remember that was with some effort on cost down, but not a significant effort in cost down because a lot of the R&D work is going towards Mistral or now ENDURIUM. But that came from development of supply chain and from scale that went through that. But in a product, which really was tough to iterate the cost because you did have that 6 batteries within the container and everything that went with that. And to be able to do that 60% with quite a hard product to try and take cost out. You can see how ENDURIUM, which is designed specifically to take cost out of that we can go much faster and much further. So that sharp line there where you see that 66% cost reduction, we are going to be in that position for all the product we are shipping in early 2027. And that's -- it looks like that cost reduction curve levels off, and that's only because of the steepness of that graph. We are still potentially looking at taking out a further 50% from that point through to 2030. And the trajectory to get there opens up a very significant number of opportunities. When we talk about those price points, we get a really interesting reaction because they are -- most customers are very unaware that the vanadium flow battery industry is heading in this way. A couple of anecdotes for you and particularly one with Equans. Equans is our delivery partner on the FlexBase project, we have hired them to do the EPC work, but they were very keen to make sure that what they were getting involved with was robust in terms of the technology and the partner. And they actually have some exposure to one of our projects in Europe already. And the Head of Business Development said to me, look, we did the due diligence and the feedback we got back was that yours is the Rolls-Royce of vanadium flow batteries. And by that, he meant 2 things. He meant the quality of the product and also he meant the price in terms of where we were, i.e., too expensive. And that for me was fantastic feedback because he was talking about the quality of where we were with that VS3 product. But also the cost point, which he wasn't aware we've taken that significant cost out of. And then talking through where we are actually going to, his comment was, look, we need to have a much wider and deeper conversation with you. And then also maybe 6 months before that, someone who was in charge of Power Solutions for data center business said about vanadium flow batteries in general, the best storage technology there is, the most expensive. And again, at that point in time, he wasn't wrong that a lot of market commentators will say the same thing. They are not aware of where our price points are heading from the work that's particularly Matthew leading. And I think when we get there and we start delivering that product and people are able to order that in size, I think we will have a very different position commercially than we're heading into at the moment. So a really, really exciting place to be because of that work we're doing on cost and on performance. And with that, I will hand over to Adam to talk through the numbers.

Good afternoon. So starting off with the key financial highlights for the first half period. Customer orders that we've signed there are up 3x year-on-year to just over 30 megawatt hours, really important in terms of scale and what you'll start to see flowing through some of the financials that we go through later on. Order book as it stands today looking forward is just under 80 megawatt hours in size. Obviously, that's excluding the FlexBase contract, we're in the process of working through the final design and prototyping for '28, '29 deliveries. Gross loss down 60% year-on-year, and I'll go through a bit of detail in a second as to what's driving that. We ended the first half period with GBP 10 million cash plus GBP 40 million inventory to deliver on those increased orders for the second half. So profit and loss statement, a little bit more detail here. So we increased our project and grant income to GBP 1.7 million compared to GBP 0.8 million in the first half period last year. So clearly, it's a second half weighted set of numbers, but delivering against signed orders there that we've taken in the first half. Within that, you'll see the commissioning of 4 projects, a small delivery and then the final completion of Copwood, our project in the U.K., which will be the largest flow battery project in Europe. And what you're seeing is the last GBP 0.5 million recognized against that grant income there. In terms of the net loss, so we are another GBP 1.5 million reduction year-on-year to GBP 12 million. And really within that 2 factors, it's the increased R&D headcount spend that we've announced there to drive our product cost down. And Jonathan has run through where we are against plan on that, and that's a result of that investment. And then second, we've now completed the joint development agreement with Gamesa. So there's less recoveries year-on-year netted off against that R&D number. So those are the 2 factors there driving the bottom line and supporting our product cost journey. Next slide, please. So a bit more detail here on the margins. So 2 concepts to explain. First, the product costs refer to our direct costs, so it's excluding overhead and warranty. And second is the trailing 12 months. So looking over the last 12 months we've announced for each of those periods. And what you're seeing there is a pickup in that gross margin over time and also delivering on increasing product margins. And really, that's because as we've got more volume going through the factory, we're absorbing more of those factory overheads, and we're seeing that pattern pick up. The other factor is then our first ENDURIUM shipments as a composition of our sale moves from VS3 into ENDURIUM, we've really delivered on our last VS3 sale now, we're seeing a pickup in those margins. So those are 2 key points. And then the last one just to mention there is we've got a fairly significant reduction in our warranty costs year-on-year, down from GBP 0.9 million to GBP 0.2 million. And that's really driven by 2 things: first improvement component performance and then also reduced product costs, which is feeding through to the lower provision there. They're the key drivers of what's happening on the gross margin line. Next slide, please. So going into the balance sheet here, obviously 2 factors that impact cash from the cash reported on the balance sheet. And then second, the inventory, which is unwinding the delivery against those second half orders. And as I say, finishing the year there with a cash position of inventory of GBP 40 million and then the cash in addition to that of GBP 10 million to get us in a solid cash position to support our going concern. Two of the key points within here. So we talked about inventory. You're seeing there a capitalization of some of our product costs for -- and with the completion of the joint development agreement with Gamesa, we're then capitalizing some of that work that's going into [ Mistral ]. You're seeing that there within -- on the balance sheet. Next slide, please. And I'll hand across to Matt on the core customer segments.

Great. Thanks so much, and great to be here with you this afternoon. So look, now that we've got cost to the right place, and we're getting increasingly proof from our customers that we're delivering against their expectations. We're sharpening our focus on what -- where exactly our products deliver the greatest value. One of the biggest initiatives that we've gone through over the last 3 months has been a deep dive, combining work by our internal team with some external consultants to understand unequivocally where we are the best storage solution so that we can focus our commercial efforts in that area. The 3 questions that we've gone out and asked ourselves and asked our customers and asked the market is, what operational problems are our customers working to solve? What financial benefit do they derive from applying storage to those problems? And where do -- where does Invinity's solutions solve those problems better than anything else that's available in the market? And the clear answer comes back that there are 3 segments where we dramatically outperform other solutions, stand-alone co-located LDES projects, commercial and industrial sites, especially where there's already cogeneration involved and in more emerging markets, the need for buffering and bolstering AI infrastructure. We'll go to the next slide. The AI one is particularly exciting to us. In front-of-meter LDES case and the C&I case, we've been working on those extensively over the last couple of years. AI is new. And one of the things that we had to spend a lot of time understanding is what exactly the load profile looks like for these data centers and how we would fit into those. And I think what we've been learning is that there's kind of these 2 different sets of AI infrastructure facilities and therefore, electrical loads onto the facilities. One is where you've got inference AI data centers. These are the data centers that are doing relatively repeatable tasks, things like people are asking what are the football scores from yesterday and the AI is pulling those together and presenting them to very understandable, easily understood format. Separate from that are training workloads. And these are the sort of much more complex questions like, for example, if you were to ask an AI agent to develop a model to predict tomorrow's football scores, which is something that involves learning, that involves iteration, that involves the coordination of every one of the processor units that are built on each one of these individual sites. Those training sites have a far more stochastic electric load going into them. And the graph you see on this slide is showing 15 minutes worth of electricity flow onto one of those sites, and you see those electric loads fluctuating from near 0 to near 100% over and over. That's a load profile that is extremely difficult to integrate onto the electric grid. It's something that utilities around the world are struggling with to integrate effectively onto their existing systems. But in both cases, because of -- going back to Jonathan's point around flexibility, because we have the ability to discharge our battery over and over again on limited cycles without shortening their life, it means that we can address those training workloads very, very capably. Even going back to those inference workloads, whereas a lot of those sites are being built out with on-site generation, whether that's solar or wind. On average, you're looking at very, very high cycle counts to be able to support those loads most effectively with batteries. That means as you compare our batteries with what a lithium-ion cell would be able to do by comparison, the fact that we have very, very long lifetime without the kind of augmentation you would see through lithium array means that we have some significant advantages. What do those advantages mean in terms of the numbers? Well, look, this is a massive opportunity, $45 billion TAM around the world. And when we look at the benefit that we have over incumbents on the inference side, we've got about a 15% advantage on the total cost of delivering electricity to these sites, about a 12% advantage on the training side. So in both cases, something -- clear evidence where we are materially better than the incumbents in a market segment that is experiencing massive and sustained growth. Fortunately, we've got -- within our product portfolio, one of the most exciting projects is exactly related to that AI data center development. Many of you have heard us talk extensively over the last few months about our project with FlexBase. It's really hard to underscore the scale of this project. I mean 1.5 gigawatt hours is a big number. But when you get on site and you see the magnitude of this facility is being built, it is staggering to understand really the depth and impact that this battery is going to have. Worth because it's -- these numbers are just numbers, worth putting some reference point around them. The average electricity load into the city of Zurich is about 0.4 gigawatts. So this is 1.5x that load. This is a massive piece of infrastructure that will be a critical asset on the Swissgrid. And there is the degree to which we are able to deliver this battery, deliver that energy into the data center reliably and make sure that this can be an asset that the Swissgrid uses to continually optimize its operation rather than having a challenge to integrate that data center load is really the reason that our technology has been proven to be that buffer between the data centers needs and what the grid can provide over the course of many decades. We're going through the engineering phase of this project right now. We're really happy that we've continued to meet a lot of the milestones, the stage gates that are part of that development process and looking forward to the final steps towards the fulfillment phase, which we understand is going to begin through the middle of next year. Adam, back to you on the commercial pipeline.

Yes, a little bit more detail here on the pipeline to inform the numbers. We split the pipeline into 3 sections. First being our order book. So those are signed and conditional orders. Second being framework. So essentially, this is master service agreements or MoUs signed with customers that are going through final financing and contracting milestones and the development pipeline. This is really projects that have bid into a scheme with Invinity's technology or submitted for a license with Invinity's technology. Just to give a sense of that essentially on an unrisked basis, that's just under 13 gigawatt hours across our pipeline at the moment. We're not including the qualified pipeline that hasn't gone through some of those milestones. And then, how does that sit in terms of an outlook basis? Well, over the next 3 years of '26 to '28, you can see the bulk of that is sitting across North America. That's really driven by the incentives in that market at the moment. So the 30% investment tax credit, the 10% production tax credit, the $45 per kilowatt a lot of incentives that boil up to about 50% tax incentive for local manufacturing in that market, and you've seen us talk to setting up our local plant next year to deliver on that. So -- and then by sector on the right-hand side there, it's really split across 2 main areas of focus, one being renewable developers and utilities. So predominantly, there's larger schemes like the Cap and Floor that are being pushed out in North America at the moment and then data center space, and we talked a little bit earlier on to the use case there. So what does that translate to in terms of numbers? We've given a bit more color there. This is now on a risk basis for sales. So essentially, we are risking our order book there at 90%, the framework at P50 and then everything within development pipeline there at P10. And this gives you a sense of how the pipeline looks on an outlook basis broken across those 3 factors. That all boils down into a 5x increase in share there to just under 5% of the flow battery market. We based that on an independent analysis by Benchmark there, who are the industry-leading forecaster in this market. So to give you a sense of what that actually means in terms of the whole flow battery market today on the numbers we're putting out there, which are relatively heavily risk in order for us to give some confidence behind what we're putting out there.

At the risk of going into Q&A early, P50, P10?

Yes. So essentially P50 50% risk weighting, P10 10% risk weighting. So we just -- within the order book there, we get some slippage there given timing of revenue recognition within the frameworks, that's ultimately a function of when these customers are delivering the financing on their projects. And with the final bucket there, you've got some development risk as they close out the last milestones on the project. So a little bit more visibility there in terms of how we put it into the pipeline.

Thank you. Okay. So last slide, and then we'll jump into Q&A. We can justifiably say that we are a leader as a technology business in this space from the track record we've got and the commercial validation. What is important is that we scale this, we scale it rapidly to become commercially very successful. And the whole team here is focused on that. We are a technology business, but actually, we really want to be a high-value commercially scaled business, and that's where we're all driving to, but with extremely strong foundations of good technology with the product at the right cost. And that cost competitiveness is really what is driving those bigger opportunities. If you look across that map of projects deployed or being deployed, if you exclude that FlexBase project, almost all of the projects that within our pipeline are at bigger scale than you see across that entire map. And that's just evidence of the ability for us to move into those bigger projects. But it comes from the work we've done on cost and we'll continue to do on cost and continue to iterate on that to make sure that we do remain competitive in that area. The market is also moving hugely in our favor. That requirement for flexibility isn't something that we necessarily talked about a couple of years ago or if we did, it wasn't nearly spoken to as regularly to us. Now when we talk to those who are commissioning systems, flexibility is really valued by them. And there are a limited number of assets that can operate -- that can offer that. And so that commercial momentum we're beginning to see, I think, does validate our strategy, recognizing there is a lot more to do to transition that pipeline into firm orders and make sure that as we look at our revenue forecast in the year to come, we start the year as we're beginning to see now with a significant amount of that future revenue already backed into commercial orders. Thank you.

[Operator Instructions] I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And Joe, if I could just hand back to you to chair the Q&A with the team, and I'll pick up from you at the end.

Brilliant. Thanks, Lily. So delighted to see a lot of questions coming through. I'm going to start. There's a few here, I think, relating to the financials, which Adam probably start with you on. There's -- I think it's sort of between inventory, cash and sort of customer receipts. Can you give a bit more detail on how we're going to manage cash over the next 12 months?

Yes. So as we mentioned earlier on, we're looking at cash runway as a function of both cash on the balance sheet and then the inventory, which is work we've completed in the first half for delivery against our order book. So approximately half of that unwinding in the second half for our deliveries there and then the remainder in early next year for our deliveries into '27. And that's really what's sitting behind there for the 12-month going concern there within the interim statements in order to manage our cash runway.

And -- there's a couple of questions here on pipeline. I'm just seeing there. Can you give a little bit more -- I mean, Matt, I might come to you. When we talked about the 11 gigawatt-hour frameworks, I mean what sort of customers are we talking about? Are we talking about people at the sort of which end of the spectrum of buying batteries are we talking about here? So within our 11 -- the question here is within the 11 gigawatt-hours of the pipeline, can you give a bit more insight to what actually sits within that? So what are those frameworks that people have signed?

Yes. Look, it's -- we've still got a healthy part of the business that's related to the frontier developments that we've always -- that has always been the core of our business. I think the big change over the most recent period is on the data center side. Obviously, getting the second phase of FlexBase into that part of our pipeline has been a big uptick. But I think you can appreciate. Given the amount of interest in the data center segment globally, we've now got a lot of inbound interest in what we can do for those data center operators, builders, constructors. And so there are a large and growing number of other data center opportunities that are also part of that 12 gigawatt-hour or 11 gigawatt-hour.

Great. And that's actually another question here asking about FlexBase. Do we see it as a one-off? Or is it a...

No, look, we're laser-focused on getting that project right for that customer. And we're going through the development details to make sure that -- as we enter this new market that we're doing the right things for what those data center operators are going to need. Our intention is that we will be able to turn that, or at least portions of that, into more of a repeated offering that we're able to offer to further sites down the road, really duplicate what we've learned and make sure that we can replicate it for other customers in other regions.

But I think just to follow on to that, the #1 focus is that project in itself is extremely valuable to us. And the focus is entirely on getting that delivered. That is a delivery cycle to '29, 2030. The installation phase certainly starts in about a year or so time of the design and finalization of the integration work is the work being done now. At some point in time, we can look to replicate that elsewhere. But for the moment, we are absolutely focusing on that. That just opens up opportunities elsewhere as well. So back on that pipeline question as well, if you look at what sits within this, I was -- we had a review relatively recently of some of the sort of the parts of the pipeline that don't necessarily percolate up. And I was really reassured by just the number and breadth of deals that sit across that AI data center space. It's enormous, particularly in the U.S. front. It's quite staggering to see what comes from it.

Okay. And it's actually we've got basically the same question asked twice in the same way from 2 people that wouldn't admit it were each other. Can you just talk about -- we've talked about the rest of world element in the geography. What does that actually mean? Where are we seeing the demand outside of North America and Europe and the U.K.? Where is that? Is it China? Is it India? Where is that?

Well, look, this is a global marketplace, and we are -- whilst 180 may seem like a lot when you strip out those working on product development as well, it is a large market to cover with a relatively small commercial team that needs to cover not just front-end sales, but the sales engineering that sits beneath that. So we need to focus on core markets where we've got the expertise and the bandwidth. What's really interesting about China, particularly is, China has deployed more vanadium flow batteries than anywhere else in the world. And the price points that we are at or will be shortly next year, we think are probably below where the Chinese are selling their vanadium flow batteries. And we also know from the tenders we've been involved in such as FlexBase and other anecdotal evidence that we think our batteries perform better than a lot of that Chinese technology, if not all of it. So there is a potential for some really interesting opportunities within China. However, we need to make sure that we do approach that in a sensible way for all the reasons that I'm sure I don't need to go into to make sure that corporately, we're positioned correctly there. India is an interesting market. India is very, very, very cost conscious. And rightly so, we are pushed on margins. This is a business where we have to make returns for our shareholders. And typically, within India, a lot of businesses do chase very low, if not negative margin business to build market share and then hope they'll be able to generate a profit in years to come. That is not a business model that we have really ever adopted or intend to adopt and don't need to adopt. So within India, we will look to cherry pick opportunities where we don't have to do that. And I'm sure shareholders would support us in that. There are European projects which sit alongside the FlexBase in terms of sort of scale and breadth of opportunities. There's a lot of opportunities there that we are only scratching the surface on as well. And at some point in time, we will look a little bit broader towards Africa and elsewhere. But I think for the moment, we're concentrating on those core markets.

And there's a few questions on FlexBase. I think we've answered most of them, but there's one here about asking for a bit more specificity around the engineering. So you said the engineering process is on track. Can you give any more detail on what that really means in terms of progress towards [ a signed award ]?

Yes, sure. I mean what I would say is that we were awarded that project on the basis of our track record and on the basis of the concept that we were able to deliver against the requirements that the customer put forward in their RFP. Within the next year, what we're going to be going through is a series of stage gates where we will have to deliver a sequentially more evolved version of what that engineering side looks like, not only proving the concept works, not only proving that the commercial model works, but building out the actual set of orders, the actual set of components that are going to be installed into the basement of this data center. It's worth noting that, that is materially different from how we've delivered a lot of our products in the past rather than a container that ships out of our factory, we're going to be shipping individual components out of our factory so they can be fully integrated at site. Getting that done in a way that is supportive of the project itself while maintaining the performance, not only technical but also commercial that we intend to achieve is something that we need and our customer needs to make sure that we're doing properly.

Okay. Thank you. The next point, and we had a lot of questions on this. I think people came armed to the call with around Cap and Floor. There's a number of questions here saying that they've seen articles in the press, in The Sunday Times, essentially saying that the market has some high expectations of a number of awards. I'm really asking what's our view on what happened and our view on the chance of anything changing or not.

Thank you, Joe. I was hoping to come on to this soon. There's awful lot we can talk about here. And there are different views I've seen on how to approach this. What is really interesting, and you've seen some of The Sunday Times articles both this Sunday and a couple of Sundays ago. To note, we don't write the headlines. I think if you get past the headline a couple of weeks ago and actually look at the bulk of the -- all of what was in the article 2 weeks ago and last week, we've had some extremely positive feedback from, frankly, all stakeholders. And I think everybody who's looked at this has said a number of things. And it's interesting, I'll come into this a bit, why doesn't the government sort this out, but also strong support that we are actually making this an issue that people need to be aware of and need to look at. Now I said government like this because actually, when you look within it, we are speaking to a significant number of stakeholders within the wider organization that is government. And what you realize within that is that it's just not one body. There's many different bodies trying to work together. And I think what we have seen is an incredible amount of support for our case that Invinity technology and more broadly, U.K. technology should have had a better run at that program. And that's one of the reasons why I think The Sunday Times journalist picked it up. She is running with this because she thinks it's a really interesting story. We can create a significant number of jobs, and we can create a significant amount of investment that simply won't come here. And when you look across what the U.S. does, the U.S. offers a 30% refund on CapEx expenditure and the refund to the U.S. manufacturers for putting manufacturing there. That's why we're moving there. The EU is looking to do something similar in the next couple of years. Japan does the same thing. And the U.K. is unique in almost not doing that. There was a 5% benefit for U.K. content. When actually, they've had up to 20% in other cases. So we're asking the question, why was that done in this scenario? And then when you look across the projects that were consented, if you look at the pumped hydro projects, very specifically, one of the developers there has announced that they have some significant challenges in relation to costs and that project will only go ahead if it beats IRR threshold. So certainly a warning that won't happen. And then some of the other developers have got some rather unique lithium projects, which again have never been done before. And there is a strong argument that a broad breadth of technologies across just those 2 narrow verticals would make sense for all the other reasons we can talk about. And so my view is I would prefer -- this has -- our share price was doing very well up until that announcement. And it is highly disappointing, and we were very disappointed with the result. And I think it's only right that we pushed that scenario through. Should we do that in private? Yes, we are significantly. I think us highlighting to others to gather support has been really well received. And we are hearing some very positive vibes that come back. Will that ultimately result in a change? I do not know and I can't forecast that. But I'd tell you what, I would far prefer to fly the flag of Invinity and do our best to get some change and hide away and not do that and just say it would have been nice if it changed. I think we have done everything we can do, and we are definitely being listened to at very, very high levels. Will the machines of the wider government enable something to change at this stage? As I say, I don't know. What's really interesting is if you look at what this means for our technology versus others, typically, our technology is scored at the same price point, same financials as other technologies. So this wasn't anything to do with quality of either quality of technology or quality of price. I think our projects were marked quite harshly. There was a -- they were inundated with a number of projects that went into Cap and Floor. And I think they took some pretty generic assumptions and again, looked at reports on other technologies, which are a couple of years old and drew some very unfair -- sort of unhelpful, should we say, comparisons on those. So that's why our customers have gone back and said, look, that's not right. You've used incorrect data. So I think there are a whole bunch of reasons as to why what came out wasn't fair. And also a lot of the projects have said, look, the scoring system wasn't made clear that it was only really announced and even then quite opaque at the end of it. So a lot has been done in this process that not just us, but others think should and could have been done better. And therefore, it's only right that we push this. There is talk of there being another round shortly to follow. For us, we are very much concentrated on this round. This is an issue that needs to be dealt with sooner rather than later. I want to create those 1,000 jobs up in Scotland. I want to bring investment here. As I think the article says, proud, British, I want it to work here. And there's no reason why it can't with a little bit of movement and sense that comes with it.

I think this follows naturally on. There's a question here around U.K. manufacturing and do we have the scale to deliver projects like FlexBase but also other large-scale projects, presumably refer to, I think...

So it takes about a 6-month lead time for us to scale, and that's typically the lead time on the stack manufacturing. And so we've got that stack in order for the U.S. that will be delivered shortly and will be capable of being commissioned and brought up to speed quite quickly. So we don't at the moment, but that's the whole point. If we did at the moment, we will be putting a lot more unabsorbed overheads through the P&L, which would be impacting profitability, but we can scale quickly. We are able to bring in and repurpose people from the oil and gas industry, people who are midway through their careers, but also graduates and apprenticeships. We really can tap into the labor market that is available now. These are not highly, highly skilled people. These are people with training who can be retrained in other areas. So that's the lead time that we can move to. Otherwise, whenever we bring people up to Motherwell and Bathgate, those who've been up before on any of the open days, we'll see that what we really need is a dry enclosed area. Yes, it's useful to have a crane that carry 30 tonnes, but actually, we can do that with a forklift. Ultimately, we need a stable floor. It doesn't need to be temperature controlled. It is in Scotland. It does need a little bit of heat of course. But ultimately, we can find space pretty quickly. And with substantial Cap and Floor orders, we can quite quickly sort of move to bring that investment in and get it up and running.

Okay. And speaking of the questions around U.S. manufacturing. I mean, Jonathan promised we're going to talk about, and we've duly been asked a couple of questions around it in terms of when are we going to hear more? What's the -- what are the plans?

Yes. Look, I mean, as Jonathan touched on, there are tremendous advantages to manufacturing in the U.S. for the U.S. market, both in terms of tax credits on the production side and tax refunds on the customer side. We are, I would say, most of the way through selecting a site we're in negotiation on contracts for leasing the space that we're going to build this facility out in. We've validated that we've got an initial team that's going to be able to go and help us get that set up. So we're not starting fresh with new personnel. We've got a team ready to step in. And I think we'll be announcing that final location once those contractual details are locked in.

Okay. And briefly go back to the numbers. There's a question here asking around sort of the uplift in admin overheads. Adam, perhaps you could just cover that off and give a bit more color.