Judges Scientific plc ($JDG)

Good afternoon, and welcome to the Judges Scientific Investor Presentation. Today, we are joined by Tim Prestidge, Chief Executive Officer; Brad Ormsby, Chief Financial Officer; and Ian Wilcock, Group Commercial Director. [Operator Instructions] I will now hand over to Tim to begin the presentation.

Thank you, Ivvy. And Welcome, everyone. Thank you for joining and delighted to be leading this my first retail webinar as CEO. I'm going to start just by saying how the agenda overall will work here and the points that we're going to cover. So I'm going to give some introductory remarks and talk a little about the highlights from our financial year 2025, the investments that we've made and the key takeaways, talk a little bit about the executive team and our business model. . I'm then going to hand over to Brad, who will talk in more detail about the specifics of our performance through 2025, perhaps I can then hand back to myself and my colleague, Ian to talk through our buy and build -- the fundamentals of our buy-and-build strategy. acquisitions and the organic growth model, after which we'll talk about some of the fundamentals and finally, some time for Q&A. So one of the key takeaways that we'll talk about is undoubtedly the financial year '25. 2025 has been a disappointing year, but the fundamentals are intact. So in that context, it probably makes sense to have a chat about what are the fundamentals. So what is Judges Scientific and what is our business model? So Ivvy, if you can move us to the first slide, please. So Judges Scientific is a buy-and-build group in scientific instrument markets. Sorry if we can go back to Slide 2. If we can go back to Slide 2, please. Thank you. Judges Scientific is a buy and build group in scientific consumer markets. And the important aspects to realize here are that we were founded on 3 pillars of shareholder value, okay? So the markets in which we play, and the businesses that we seek to acquire, all benefit from long-term drivers. So long-term secular drivers are underlying growth drivers This particularly relates to long-term demand for scientific instrumentation and scientific techniques for academic research and how those techniques in academic research inevitably find their way into commercial applications and industrial applications, both in terms of research and processes. We also benefit from a large deal pool -- large potential pool or pool of potential companies available for our acquisition. Typically, we might deal with companies that are founder owned. A founder has led the company for a period of time, perhaps they've reached a stage where they want to retire. And at that point, they're looking for opportunities for how they can divest the business. The other pillar of our shareholder value is low capital use. So we specialize and target businesses that are -- that have a foundation of low capital use. So we absolutely want to focus on businesses that are very high return on capital, high cash conversion. And together, that then allows us to generate cash and repay debt. And together, those things have compounded shareholder value. Moving down the left-hand side, another key aspect of our strategy is we are an extensive and well-diversified customer base globally. So customers in university, in industry and in other research and compliance tools. But our diversification is broader than that. So we're geographically diverse. Our companies are -- more than 85% of our revenue is exported. And we're also diversified in the context of the scientific techniques that we've invested. So we are agnostic in our choice of scientific techniques. We have a broad base of capabilities within the group. Our strategy is a buy-and-build strategy. People might think of it as serial compounding. So it's based on acquisitions and organic growth. We seek to acquire businesses into the group that meet the criteria. We'll talk a little bit more about that later on then to invest in those businesses to amplify their strengths and to help them grow and help them grow in the long term. So we always acquire businesses in the context of holding on to that business forever. We never acquire a business in the context of exiting that business, but we intend to invest in that business and have it become part of our organic growth portfolio. Through the execution of that strategy over the last 12 years, we've achieved 25 acquisitions. Our total dividend distribution of 9.8x the 2005 admission price, 19% CAGR on total revenue, 7% CAGR on organic revenue, 23% CAGR on total EBIT and 8% CAGR on organic EBIT. Next slide, please. We have an experienced management team, and there's also been some recent additions and investments in our management team. If I go down the right-hand side first, we were joined recently by Rik Armitage as our group acquisitions executive, bolstering and expanding our acquisitions team. I should also say here with the planned succession, David moved to a nonexecutive chair role, but he also continues to assist us on acquisitions. It was always David super power, and it's something that absolutely he wanted to remain involved in, and we wanted him to remain involved in that aspect of what we do. So he remains as part of our acquisitions process, and Rik has further bolstered that. We also welcome John Dunne as a portfolio Chief Executive. John joined us from [ Halma ], and he chairs a portfolio of our companies, as does Ian Wilcock, our Group Commercial Director. Mark Lavelle, who stepped down from the PLC Board after our AGM last year, remains with the company and is working centrally, particularly focused on operational excellence. And I'm here with my colleague, Brad as Chief Financial Officer. Okay. Next slide, please. So what I'll highlight here the key aspects and key takeaway messages for our presentation today. We've had a disappointing financial '25 despite a strong start. As mentioned, the fundamentals remain intact. So we had a strong start in Q1. We delivered a Geotek coring contract as expected. That contract was delivered and executed well that happened in Q1. We also, in Q1, benefited from strong order intake. However, the situation changed slightly around March, where restrictions in U.S. federal funding started to be introduced. There were really 2 layers to this. The first context was around uncertainty. So they started to be conversations about specific universities and beyond that specific areas of funding and which projects might be funded or not. And that had an almost immediate impact on us in terms of previously budgeted projects and projects for some discretionary spend being held. Subsequent to that, we then saw the real impact of funding cuts. And the funding cuts started to be seen in terms of longer-term projects being put on hold or canceled. And really, the restrictions in U.S. federal funding is the key and material impact for our 2025. We saw a significant downturn in orders in Q2 and Q3. Beyond this, though, we did see some geographic and market diversification that partly mitigated the U.S. impact. We saw some growth in Asia. We saw some growth in parts of Europe. And we also saw where there was resilience across the group. I was with those companies that had some exposure to industrial applications. We'll talk a little bit more about that later on. And also those companies that have delivered new products recently. That really focuses us on where we can make a difference. We are very mindful that there are certain things like the U.S.'s approach to federal funding or the geopolitical climate that we cannot influence. But we can focus on controlling the controllables. And by controlling what with best what we can control, we better navigate those things that we can't control. So the things that we want to highlight are investing for growth in talent, investing in innovation, operational capacity and operational improvements and working directly with those companies who are experiencing some product-specific and product line challenges. We also, as I mentioned in our previous slide, invested in management team and the planned succession, Rik joining us with John joining us and with David moved to nonexecChair and my appointment. The key takeaway is that despite it being a challenging year, a disappointing year. And despite this being the second successive year of disappointing results, the underlying fundamentals remain intact. We have a portfolio of strong, exporting companies in global niches that maintain solid margins. Our overall margin just below 20% was perhaps a little disappointing by our own measures, but it's still a solid result. We have robust cash conversion, enabling a rapid repayment of debt and a 10% increase in dividend. I'd also reconfirm that our strategy remains unchanged. We have confidence in our long-term demand drivers the long-term requirement for scientific instrumentation and scientific techniques in academic research, shifting into commercial and industrial applications, we believe, remain solid. We are committed to our disciplined acquisition process, and we are committed to our structured and decentralized organic growth methodology, one of which we'll talk about more later. Next slide, please. I'm now going to hand over to Brad, who will take us through our performance review

Thank you, Tim, and hello, everyone. If you can move to the next slide, please. Let me take you through the results for the past year. And as Tim's already touched on, disappointing for us, again, that we've had challenging and difficult trading results. We started the year quite well, Geotek coring expedition, we've had a solid order book, gave us confidence for the year. And then unfortunately, the effect of the U.S. academic research funding cuts progressively degraded our performance throughout the rest of the year. So let's look at the results and total revenues up 9% to GBP 146 million. This is a combination of total organic revenue growth of 6%, plus a full year contribution of our 2024 acquisitions. Going back into the organic revenue growth for a moment, on a like-for-like basis, and that's if you strip out the coring expedition, we did -- which we had in '25 that didn't have in '24, the like-for-like organic revenue growth was only 2%. And behind that was a drop in order intake, which was disappointing for us. We started -- as we said, we started the year quite well and Q1 was quite a good quarter for us, but then ongoing decline afterwards. So overall, adjusted operating profits were flat at GBP 28 million, an effect positive supportive -- positive support from that from the Geotek coring expedition and in fairness to Geotek as a whole, a good recovery from the whole business. But if you strip Geotek out from these results, the rest of our organic businesses [ went back ] by 1/3 which is a overall disappointment, and we'll see this illustrated a bit better in my bridge later. We move from profits, the cash generation and the group has a strong track record of generating good profits and turning those profits into cash. We generated GBP 33 million of cash from operations, cash conversion of 118%. So we've kept our discipline in this area for more than the past 2 years, and we've also been able to reduce overall levels of working capital. This cash generation serves to support our policy of providing shareholders with progressively increasing dividend returns. And this year, we're proposing a final dividend of 82.3p per share, an increase of 10% on the prior year, which if approved at the AGM, will provide a full year dividend of 115p per share, but it is our second year running of minimum dividend increase as a consequence of the disappointing trading. And the cash generation has served to enable us to invest GBP 7 million in CapEx this year, [ about GBP 0.3 million ] in corporate taxes, distribute GBP 7 million to our shareholders and in line with our buy and build strategy also enabled us to acquire the remaining stake in our subsidiary, Geotek Brazilian business and still reduce our net debt and adjusted net debt at the end of the year was down GBP 8 million to GBP [ 43.6 ] million. And we had gearing of 1.5x at year-end, significant headroom on our covenants and still a strong balance sheet position. So looking out to '26, and we still have a tricky trading environment. We start this year with a lower-than-preferred order book and with order intake, which is not buoyant, with global geopolitics as they are weighing heavily on the economic outlook. And whilst we have -- the first positive signs out of the U.S. the first step to restore the hiatus in the research funding, we are yet to see the funds flow and consequently, any formal green shoots of recovery. And therefore, the guidance that we provided shareholders within our January trading update still stands. Moving on to the next slide, please. I'm just going to pick up 2 things on here. One Tim touched on just before, our margins, which have declined and it's disappointing whilst we managed to grow revenue, costs have grown at the same way. And that's really an effect of a certain amount of investment in head office costs in line with the succession planning that Tim talked about before, but also a number of our businesses investing for growth, which unfortunately didn't come -- and consequently, we took some actions late through the year to adjust that, but the effect of those adjustments have not had a material effect on the '25 results. Now we also have material adjusting items just want to talk about those for a moment. The largest component, GBP 10 million of that is noncash amortization of the intangible assets we recognize when we acquire businesses. And but there are 2 other material items to talk about this year. The first relates to our 2024 acquisition of Rockwash. And that came with significant earn-out, which when you acquire a business after the acquisition accounting rules, you have to make your best estimate of how much you think you're going to have to pay for that announcement. So we did that. And at the end of 2024, we had an acquisition payable of GBP 2 million. And at the same time, when you do that, you also have to increase your goodwill and intangible assets. And so we had a further GBP 2 million that was in line with that GBP 2 million of payable. Now during 2025, it became apparent, and we've seen the first signs of that in the half year that Rockwash's performance may not get them an earn out, and it turned out that actually no earnout was payable. So consequently, we've reversed an acquisition payable of GBP 2 million with a credit into adjusted items of GBP 2 million. And at the same time, we've also impaired those assets, the goodwill and intangible assets that were created as a result of creating the payable. And so we've also had a GBP 2 million debit. So overall, no net effect in the P&L and no cash effect either. But at the same time, we have also recognized a GBP 2.3 million impairment to the group's goodwill for its investment in Armfield as a consequence of the prolonged period of underperformance. So moving on to the next slide. And just to take everyone through the graph. And there's 3 lines on it, as I always explain, red line, black line and a green line, the red line are sales budget, which we set once a year as part of our budgeting process. The black line is our trailing 12 months of orders and the green line is the last 4 months of orders annualized. The end of the graph is the middle of March this year. So what are we looking for? We were looking for ideally for the black line to be at least touching the red line by the end of the year, such that we've had sufficient orders in which to satisfy our sales budget and ideally for the green line to be tracking the red line, so we have optimal operational capacity. Now if you look at the graph and take you back to the middle of '24, you can see that we started building momentum in orders. if you look at the green line and to a degree of the black line, that kept rising up. And actually, the first quarter was good, and we were still going. When you got to the end of Q1, it turned and then it tumbled. And it only started to improve during Q4 although if you compare the size of the Q4 on the green line to what it was at the end of '24, there was a big difference. And this is why when we've explained it in our results, that organic intake was up 4% at the end of the first half. By the end of August, it was flat. And by the end of the year, it was minus 6%. Whilst we've had areas of decent performance, both in China and in Europe, they certainly did not be -- not able to offset the significant effect of [ near 25% ] drop in North America. If you go back and look at the graph for the last couple of years and you compare the black line with our sales budget, you may be forgiven for thinking we've been a bit optimistic with our budgeting. And in fairness, the consequence of that is that for 2026, we've had a reset. And consequently, why at the start of this year, our budget was aligned with the trailing 12 months of orders. So as we go into 2026, we have a lower than preferred order book and orders year-to-date are behind the same period in '25. However, it's fair to say that the '25 comparative had no effect in relation to the U.S. academic research funding cuts. Moving to the next slide, please. Moving on to the bridge. And this reconciles between 2024 and 2025 profit contribution of our businesses before certain costs. They are the 2 big blocks at either end of the graph. And reconciling between these, you have a big block of organic growth. A large part of that is the Geotek recovery, which included coring expedition but also growth at 6 other companies, including 5 that achieved a record. But at the same time, there was a sizable drop from decline of 12 of our companies, and this included a couple of our businesses with end market-specific challenges and a couple of our businesses with challenges in relation to products. And Ian will talk a little bit about what we're doing to address those in a short while. The effect of the U.S. federal cuts cut across both the growth and the decline with the exacerbating decline and reducing the growth. And then the final block is the full year effect of our [indiscernible] acquisitions. So moving on to the next slide. And just going back to cash flows for a moment. Now with good cash generation this year. Cash conversion was 118%, which on the face of it was a little bit down on the prior year, but the prior year was inflated by the fact that we had advanced payment for the coring contract. And if we regularize this, cash conversion this year was actually 136% compared with 104% last year. So it's clear discipline on both cash conversion and also helping look at how we can reduce the higher than [indiscernible] levels of working capital is working. And we've gone down to 16% this year. But the goal for us is to reach 10% and that's 10% of annual revenue. And if we do that, we can release up to GBP 8 million of cash, which is a significant opportunity for us. And lots of focus will continue on that. And Ian [indiscernible] also will talk a little bit about some of the things we're doing to help release some of that over the coming couple of years. Net debt continued to drop. And we finished the year with a leverage of 1.5x compared with 1.7x. The prior year with significant headroom in our covenants, significant borrowing capacity and the continued strong support of our group of banks, Lloyd's, Santander and HSBC who this year have replaced Bank of Ireland in the banking group, and we're delighted to have them on board. So moving on to the next slide. I won't draw too long on return on total invested capital or ROTIC, other than that's a key measure for us. We start on the left-hand side, when we have acquired FTT and we paid nearly 5x. So we start around 20% in growing ROTIC thereafter, requires improved financial performance and/or acquire own businesses at lower multiples. And you can see as you go across the graph, when we acquired the bigger businesses, GDS, Scientifica in early teens, we've had 6 times when there are big deals for us back then when we also acquired geotek in May '22 and paid 7x. The smaller deal was minimally affect ROTIC now. And whilst we managed to increase ROTIC for the year end by 1.3% to 17.8% at year-end, we still have a long way to go and big improvements in our financial performance for us to be able to achieve our long-term target, which is 30%. So moving on to the next slide, please. And I won't dwell on this slide other than to say diversification works for us. And what I mean by that is in a year where we suffered significantly in the U.S., the group has still managed to deliver earnings that are more than 2/3 of its previous record. But at the same time, it's clear to us that we could and should be better diversified, particularly in our exposure to industry. And again, I keep giving Ian something to do, he'll be talking a little bit about what we're doing to address this. So moving on to my last slide. And this slide summarizes some key financial statistics about the long-term success of this group, revenue, profits and earnings per share will grow strongly over our history, and we continue to have long-term high-quality organic revenue of 7% with associated EBIT growth of 8% over 19 years. Dividends have grown strongly over the life of the group, and we're proposing an increase of 10% to the full year dividend, and the compound growth of the dividend remains above 20%, and the group continued to focus on cash generation itself to protect it in times of challenging market conditions enables us to rapidly pay down acquisition debt and supports that progressive dividend policy. And on that note, I'll pass back to Tim talk to the growth strategy.

Thank you, Brad Pat. . So yes, Ian and I, principally Ian, we'll talk through the growth strategy, I'll talk us through the acquisition side and then hand over to Ian to talk about some of the organic initiatives. So next slide, please. So yes, buy-and-build strategy, as I mentioned before, split across acquisitions on organic growth. So if we move straight to acquisitions on the next slide. The headline here is strict discipline. If I talk through some of the attributes of our target businesses and emphasize what that means for us. So what makes target business for Judges, in the judge's model. We are looking for strong exporters in global niche markets for scientific instruments and techniques. But I think important to emphasize that we are somewhat agnostic about what the exact scientific techniques are. So we have a broad diversification of techniques within the group. We're also looking for cultural alignment. So a focus on innovation, our focus on entrepreneurialism, openness and frugality in how the business is managed. We ask and expect the MDs of our businesses to lead those businesses as if they are the owners. So we are looking for the owners of businesses from whom we are acquiring to also leading those businesses figuratively and literally as if they are the owners. We also look for robust margins. That demonstrates differentiation and pricing power. And we look for businesses that generate sustainable EBIT and cash flows at high return on sales. A key takeaway from there is that we are focused on high-quality businesses. We are not focused on the turnarounds, for example. Deal parameters, we paid 3x to 7x EBIT. More typically, we pay 4x to 6x according to size. We have flexibility in our deal structure. What we mean from that is we include things like earn-outs where that's required. There have been some occasions where former owners have also bought back into the business in some context. So where it's important that we allow some flexibility in the deal structure to make sure that we can unlock deals. And we're funded with cash and debt, borrowing up to 3x EBITDA, 3% to 8%. In 2025, we finalized the acquisition of a minority holding in Geotek to Brazil. Geotek to Brazil is the Brazilian-based services part of the Geotek business, an 18% minority share that was not acquired at the time that we acquired, Geotek was acquired last year for GBP 1.9 million plus excess cash and an earn-out up to GBP 0.7 million, and perhaps low risk for us. It was a business that we knew and understood and has been immediately earnings enhancing. Let's talk through the key attributes of the deals through those -- the green dots at the bottom. So we buy high-quality businesses, so we don't focus on turnarounds. We look for high quality in the attributes that I mentioned above. And also, we buy businesses that are for sale, the owners have come to a conclusion that it's time for a transaction. That is the deal pool within which we look. Deals can be characterized by long incubation. So although a lot of the deal flow that we look at is inbound, we also do develop relationships with potential companies and potential sellers, but some of those could be a decade or more in terms of incubation before a seller comes to the conclusion that now is the right time for them to sell. Crystallization is notoriously erratic. And what we mean by that is that we can't always be certain around when the seller is going to decide that it's the right time for them when the process is going to work out or exactly the timing of this. We absolutely do not look to target ourselves with 1 deal a year or achieving a particular deal. That's an important attribute to the context of this next circle. We aim to do deals. It's a fundamental part of what we are and who we are. We need to do deals, but not any specific deal. So we must always have the opportunity to walk away. We don't tend to focus very on very specific areas of technology that means, for example, there's only 3 companies, and we have to acquire all of them. We don't put ourselves in a situation where we can't walk away from a deal. Okay. So we aim to do deals but we -- but not any specific deal. And David, over the last 20 years, built Judges a reputation as an honorable acquirer. We are very conscious that we do lots of deals. But generally speaking, the people from whom we acquire are going to go through 1 deal, maybe 2, but typically 1 deal in their lifetime. This is a process which is stressful. This is a process to which they're not used to. And we see it as vital that we have a honorable approach in that process. And we don't [ chip ]. So whatever we agree in the heads subject to not finding anything materially different through our diligence process that's the deal to be honored to provide that certainty to the seller. The model there is to generate cash, reduce debt and repeat. I'll now pass to Ian on the next slide to talk about our organic growth strategy.

Okay. Thanks very much, Tim, and hello, everybody. Okay. So this slide really covers our model. And I'm not -- I'm sure everyone on this slide -- on the call is not familiar necessarily with our model. But the key word is decentralized and I'll explain what that means in a minute. The left-hand side is -- talks to our kind of framework and structure of the business. The right-hand side is more about our culture and our growth ambitions. So we're a decentralized group, which puts considerable autonomy and responsibility and trust on the individual businesses, 20-plus businesses that we have across the group. And really starting on the top left-hand side, strong leadership teams. That model only works if we do indeed have that a strong leadership team. So we spend a considerable degree of time focusing our leadership skill set. 2025 has actually been a bit of a year of change for us. We actually changed out 7 of our MDs for different reasons. And please don't take away the impression that we're a hire and fire Group. That's absolutely not culture at all. But for different reasons, MDs changed. We changed 7. And whenever this happens, it's an opportunity to bring in additional capabilities and so on. And not just MD, all of our businesses will have strong leadership teams covering finance, sales and marketing operations, engineering and so on all the disciplines you'd expect. So 2025 has been a year of considerable talent recruitment. I think we all believe that we now have the strongest leadership team we've ever had in our businesses. Focusing on the middle circle, the robust governance and financial controls. Of course, the decentralized group only really works if you do have some control. So of course, you've got your usual financial controls, as you would expect in any business. but we also make sure we have a rigorous set of controls, particularly around export control, for example, and the training there. cyber security is obviously a big theme for us and making sure we're up to speed on that, doing that correctly. And more recently, for example, we've implemented an AI best use policy. I mean cartwheeling to, if you like, set a floor in terms of our minimum standards expected, so we've got responsible use, but also, frankly, more focus on best case examples of where you can get growth using AI. I should also stress though that the whole -- whilst there is robust governance and financial controls, we do aim for it to be as light touch as possible. We do not want to encumber our businesses with overarching processes and systems. And indeed, in the center, we do not have the resources for that anyway. We are deliberately an asset-light business and have a small center, all of our resources as much as possible are out in our businesses. So the left-hand side is working correctly. There's good autonomy and accountability to the center. You can now focus on the right-hand side, which is really about our growth culture and how do we aim to do that. So the top right one is leveraging group wide experience. We have incredible people across our businesses in all of the disciplines I've mentioned. And 1 thing we've made good progress on in '25 is creating communities and leadership groups in all these disciplines. So we have a really maturing sales leadership group, taking our top sales directors looking at best practice there. It could be, for example, looking at training, could be looking at CRM, pipeline management and so on. We do the same in operations, particularly looking at things like working capital, which we'll talk about a little bit later. It could be an engineering, around recruitment best practices, patenting best practices. And these communities have been tremendously successful in sharing best practice, creating almost like a self-starting community amongst themselves. Our businesses are all small businesses. It can be a little bit lonely, I guess in time, so it's creating these wider communities and that they're really self-starting. Through that, then -- in the middle point, we can also promote excellence. So of course, in our roles, we see some tremendously interesting strategies and projects that we do. And then we really try to promote some excellence across the group. One of the things we've done quite recently is looking at application of AI for growth, and we've had a number of projects across the group, for example, AI service engines in one of our businesses to hugely improved customer service and knowledge management within the business. Another one focused on business development to enable us to rapidly move into a new vertical market using technology, an area we're less familiar with. So that was very exciting. And the bottom right is encouraging ambition. I'm going to talk a little bit later about that, but that really talks to our strategy process we aim -- we task the businesses to come forward with ambitious strategies, which will double EBIT in usually 3- to 5-year kind of time frame, but I will talk about that a little bit later. Next slide, please. So we listened to requests over the years for a little bit more detail of individual businesses. We have talked about Geotek in the past, but we thought we lift a little bit and pick up some themes to explore. Now the first one of these is identifying certain long-term growth drivers. And my colleagues have already mentioned that we've had good success in '25 in selling to industry. I think that's been one of the the bright spots of the year in otherwise what's been quite a difficult year. And here's 3 businesses, which have done really well in taking core scientific techniques after which have been developed in an academic environment and applying them to business. We all know the industrial market is much larger than the academic market, so there's huge potential. CoolLED would be a kind of poster child for that for us. Taking a core technique, in this case, LED illumination, traditionally [ fluorescence ] microscopy, which is a core technique in specialty biology and life science, firstly, applying it to automated fluorescence in the diagnostics world in industry, but then taking it to a completely new area, which is semiconductor inspection. And then that's an exciting growing theme for us. The other 2 businesses, Dia-Stron and scientifica also have very very strong industrial sales as well. All 3 businesses are trading at a record. So that was a real bright spot for us. The next slide, please, where it talks about specific challenges we've had. Now we've alluded in the past in communications to specific product-related issues we've had in some businesses. So we thought we'd lift the lid on that a little bit. And the 3 businesses, in this case, we're talking about are listed here on the left. Our first one is for Firetesting Technology. which is a kind of fire science business. It looks at as enabled implied testing materials to certain standards for use in -- often in buildings. Market leaders for many years. business run into certain product obsolescence, product problems, increased competition that's caused us to actually need to accelerate some investment in that space to recover what is otherwise a very strong business and a strong brand. It's a multiyear project, right in the middle of it, but it it has caused financial performance issues and so on that it's something we're absolutely focused on at the moment. The second one would be Armfield. It's a slightly different product-related challenge, but nevertheless equally serious Armfield has many products. It sells equipment for education in academic -- university environments largely and also food science, food technology. Coming out of COVID and the period after that, traditionally, Armfield has outsourced a lot of its manufacturing, run into numerous supply chain issues and supply is exiting the market. So it caused us to find a lot of new suppliers, caused us a lot to require to in-source a lot of stuff and across because it's so many products. It's actually been a multiyear projects, which we are still in the thick of, have made some good progress in '25 and continues to do so. but it has been an area of big focus for us. And the final one is is Scientifica, which is a slightly a different example, again, it's a product-related example. Our ideal Judges product, if you like, is a product which sells in a niche. It has a strong market share and technological advantage in the niche and enables us, therefore, to get pricing power and so on, where we do not have that, and we recognize it came to recognizing in one of the scientific products what was not -- didn't have those characteristics. We looked at a number of options. And in the end, we decided to exit that particular market and obviously had to take some costs and run through that in 2025 as well. And we did it, of course, respectfully with a view to looking after existing customers for a certain period as well. It's also worth pointing out actually that both Armfield and Scientifica are our businesses with some of the most exposure to the U.S. and U.S. academic markets. So that hasn't helped the whole picture for these 2 businesses? Okay, next slide, please. So this slide looks at the disciplined ambition and how do we set the right culture so that we get the business to really focus on growth, obviously stems from having the right leadership in the first place that I've talked about. But once we've got that, we then absolutely encourage a focus on where the growth markets are where the growth opportunities are. We do that in a number of ways. We have an annual strategy process, it's about to kick off actually in -- towards the end of Q2. And here we look at, as I alluded to, we wanted to put together plans which will double EBIT in 3 to 5 years. They need to take a very market intimate view. Obviously, that comes from a knowledge of where the opportunities lie in the market. It also comes with a discipline focusing on the right areas and not too many areas. So we -- in the process, we have what's called key strategic initiatives, no more than preferably fewer. And these are the key things the business is going to do over multi-years, which is going to deliver that growth, then monitor these on a monthly basis with the management team. The other thing we're doing this year, which we'll talk about, I think, in future communications is really focusing on innovation and how we measure innovation. Innovation is obviously the life blood for future growth. And there is indeed a strong correlation between those businesses which have done well in '24, '25 and their ability to consistently deliver products to market, which will take market share and indeed the reverse. So we're going to become familiar with a vitality index, which will be a measure of the potential of revenue coming from new products or margin from new products and that's something we will communicate in future communications. Okay. And then final slide for me. I think I've saved the best for last, which is the improved working capital performance, everyone's favorite topic. Brad already alluded to the fact we made some progress in '25, but not as much as we would have liked. So we are targeting another GBP 8 million improvement in working capital. And a lot of that will come from better inventory management. And once you Pareto it out, it's really about half a dozen of our businesses. which still got the biggest challenge, complex set of reasons. If it was that easy, we would have already fixed it, I guess. Some of it is around procuring maturity and procurement teams, some of it is around ERP, MRP systems and the correct use of them were indeed having them in the first place. Some of them are around sort of work in progress processes and so on. So it's a complex set of challenges in half a dozen or so businesses. Here, we are leaning on our operations network, which I talked about earlier and actually. But also this is something that Mark's working on. We're taking our top operations and leaders in the group and helping it with task force basically to help these half-a-dozen businesses to really focus on best practice to help them drive their working capital to where they want it to be. So I expect to report on some progress on that throughout the year. Okay. Well, I think we appreciate a bit of a deep dive into some of our businesses, some of our challenges and opportunities. I shall hand back over to Tim.

Thank you, Ian. Great. Okay. If we can move to the next slide, please. So I'm going to bring the presentation from then just by talking about the outlook and investment case and then we'll move into Q&A. So firstly, the outlook, if we can move to the next slide, please. So the summary point here for 2026 -- Sorry, it's just -- yes, that's right. Slide 23. I think it's fair to state the obvious geopolitical turbulence continuing into 2026 and acknowledging that things -- those are clearly things that we can't control. And in many cases, things that -- it's unclear yet what the full outcome of those would be, but significant levels of turbulence continuing into this year. We'd also highlight that uncertainties remain around U.S. federal funding. So since our January update, a trading update, the U.S. Congress has approved the next round of -- or the 2026 budget for U.S. funding of scientific academic research and that funding was restored to prior levels they or thereabouts. We see that as really positive news insofar as the opposite would obviously have been very negative news. But at the moment, there remains uncertainty, okay, around how that -- how the funding will actually flow. so the positive is that it's been signed. It's been signed into law and particularly that there was very strong bipartisan support for that bill, which is something that isn't heard of particularly often at the moment in the U.S. So we do see that as a long-term positive indicator that the U.S. does want to return to some sense of normality in terms of funding fundamental scientific research as a core driver of societal growth and improvement. But what remains uncertain at the moment is the timing of how those funds would actually be disbursed through the various funded granting bodies, like the National Science Foundation, the National Institute of Health. And in turn, how that funding will find its way into grant applications. So there remain uncertainties around that funding situation for us. You will have seen from the order book chart earlier, after a strong Q1 last year, we had a much weaker Q2 and Q3, a little bit of recovery in Q4, but still lower than ideal. And the result of which was that we brought forward into 2026, a lower-than-desired order book at 15.7 weeks. Our year-to-date order intake is 17% behind the same period last year. As Brad mentioned earlier, it's worth reminding that, that is relative to our strongest period last year. And it's also worth mentioning that it's still early during the year. So at 17%, it could be a couple of instrument orders or a stocking order from an OEM or a distributor that could shift that percentage by a few points either way, but it's still behind where we would like it to be. All of this reinforcing for us that the key thing that we need to do is control our controllables. There are various things that we just don't have control of like geopolitical turbulence. But if we control the controllables as best we can, then we stand a much better chance of navigating those things that we can't control. And for us, restoring performance is key. we Reiterate we are confident in the long-term drivers and the business model is intact. We think in the long term, that underlying demand for the types of products and services that we provide will continue to grow. There will continue to be demand for scientific instrumentation servicing academic research and growing into commercial and industrial applications. And our business model, our disciplined acquisition, disciplined acquisitions and our organic growth model remains intact, and we remain committed to it. Our 2026 guidance is for earnings per share between 200p and 250p. So that remains unchanged to our update in January. We'd also like to remind that at the moment, we believe the next Geotek coring expedition is expected in early 2027. In other words, the 2026 guidance does not include the Geotek coring expedition. Okay. I'll move on to the next slide now, please, which is the final slide, a reminder of our investment case. I think the key things to remind here, the business model 3 pillars of our shareholder value, the long-term drivers, the large deal pool and the low capital use. Those remain the same and remain intact. We have a robust business model, but we pursue discipline. Earnings-enhancing acquisitions, we are diversified by geography and diversified by application with our diagnostic approach to the businesses that we acquire. And we delivered dividend growth a 10% plus for 19 years, a CAGR of 21% since 2005. With that, I'll bring the presentation to an end and we'll move to our Q&A. Thank you very much.

Thank you for the presentation. We have had a number of questions presubmitted and submitted live. [Operator Instructions], Our first first question is could you please address why your capital allocation strategy does not include a more substantial share repurchase program, especially since your shares currently seem to trade significantly below their intrinsic value. Wouldn't the share repurchase program be a more tax-efficient way to reward shareholders than a cash dividend.

Thanks, Ivvy. So yes, it is something that we have been discussing and discuss on a regular basis, but I will hand over to Brad for that question.

Thanks, Tim. It's quite clear that we understand that the share price is lower than it has been for some time. But when you actually do the math, and you look at the return you get for a share buyback at the moment, the consequence, especially in a year where we expect our performance to go backwards given the circumstances that we've already communicated to the market. What doing a share buyback program would do for us would be to increase our leverage take us much more highly levered and therefore, add quite a significant cost to our interest such that for any reduction or improvement you get in context of the savings you get by reducing dilution. And the impact on earnings per share is actually less than that that you get the dilution. So at the moment, unless our share price was substantially lower than where it is at the moment, it actually is a very good value for shareholders, particularly if you're comparing the use of that capital compared with completing an acquisition, which gives you a much better return on your money, particularly on average that we get 20% return on our money when we acquire a business. So I appreciate it's a very reasonable question to ask. If we were in a period where we really didn't foresee the ability to complete acquisitions, then I think share buybacks may become a more pressing question for us. But as it stands at the moment, we feel it's not the best use of shareholders' funds.

If I layer something on there as well. I see a point around tax efficiency is regarding potentially a choice between dividends or share buyback. And we're also -- we're very cognizant that our shareholder base will include many different people and institutions with different demands and different requirements. But we wish to continue to provide our shareholders with a means to generate income without having to sell down their shareholding.

Next, we have, are you still finding good businesses to buy? Or is it getting harder?

So the context of that question, if it's intended in a long-term view, I think, yes, we are still finding good businesses to buy. So we don't see it as something which is getting -- which is getting harder in a sort of systemically. I think what we would highlight is the current environment is challenging. There are -- we are looking to acquire high-quality businesses, high-quality businesses with owners who wish to sell but they may not wish to sell off the back of a poor year, if there's been a poor year or they may have a particular number in mind and that number in mind may imply a higher multiple or a higher valuation if they're not performing at their best at the moment. So what we're tending to find is that sellers are patient and we need to be patient as well, while there may be opportunities to acquire lower-quality businesses, that's not our strategy.

And where do you think the biggest business risks are right now?

I think -- I mean clearly, there are the very geopolitical risks that we've mentioned. -- which -- the main risk there, I guess, is the unknown, we should highlight, and I wonder whether it might be a question, but our direct exposure to the Middle East is not very much, around 2% of revenue. So in that sense, there's not a huge risk to the group as a whole in that respect. But it does rather depend upon the extent to which that conflict grows or escalates or what the knock-on effects are. So for sure, that is a major concern for us. The other major concern is obviously the timing associated with the return of U.S. federal funding and our exposure to that. I guess I'd also highlight the requirement we talked about focusing on controlling the controllables, helping those businesses who are experiencing some challenges to get those fixed. So the longer that takes us or the longer that goes on for is some degree of risk as well. Anything else you'd want to highlight in there?

I think it's pretty comprehensive. I think I maybe just add the -- with governments around the world potentially under the financial stress. There might be a question on academic funding more generally, not just in the U.S. Obviously, we hope that's not the case, but we don't know. I mean, and that we still sell obviously more than half of our end user customers are in academic institutions.

Yes, that's a very good point. And of course, we know that the U.K. government is also talking about funding associated with some fundamental research, okay, if that's a theoretical research, perhaps were less directly impacted by it, but it's clearly an example of a government making a choice of where it wants to deploy it at a limited set of funds to. And so that is a wider risk for us as well.

Our next question is if the U.S. doesn't recover and there's no big project, what does normal look like now?

Brad, do you want to take that?

Yes. I mean I think that it's it's a stretch to think that the U.S. will not recover. The question is about the timing of it. So I would challenge that theory to say that the U.S. understands consequence of signing the bill and with cross-party support that investment in R&D in the U.S. is what has made that economy great for the best part of the last 100 years. And I don't believe that anyone across government as a whole, and that's a strong statement for me to be making in fairness, really believes that we shouldn't do proper research. So I don't believe that, that is a long-term event, maybe not even the [indiscernible], but the question is in the next few months to year or so, whether it's us coming back to the rate that we hope should come back to, so I'm not sure I could call it a new normal. And I think we have an expectation that how businesses produce high-quality equipment for markets that need their equipment and that we shouldn't be expecting the the expected performance of '26 to be our norm. And I don't think we should strive for it either.

I think it's also worth adding, just reemphasizing, Brad, that we the guidance we have put out for '26 does not assume a recovery in the U.S. I know we said that was to reemphasize that point.

Absolutely clear. and we are -- so that's why my expectation is that this is not the new normal, but it's a base we build from.

Thanks, both of you. Agreed. Our guidance GBP 200 million to GBP 250 million was based on no recovery in the U.S. and no coring contract, but we absolutely wouldn't regard that as the new norm.

Thank you. Next, we have Organic growth, excluding geotek, Will there be a recovery by 2026? And how is diversification progressing with regard to client dependent on government budgets.

I was going to say I think the second part of that question is, I think, Ian, covered that earlier in the presentation. And the first part, will, if you compare our results or our predictive results for this year coming to last year, the flat answer to that is that we shouldn't expect '26 to be a year of a return to organic growth. Unfortunately. However, what we do believe, and I've said this earlier, is that fundamentally, the conditions over the medium and long term exists for us to be able to continue to grow at least the long-term CAGR of 7% that we've done over the last 19 years. And there's no one across our team that believes any differently, but we do know that every [indiscernible] can there can be moments when we have a hiatus, but we need to look for very hard to try and avoid that.

Even though acquiring companies or target multiples might be harder in Continental Europe, Asia or the U.S., assuming you don't find a perfect fit, is your pipeline actively looking at international M&A at all right now? And if so, would you be open to new stand-alone platforms? Or are you strictly focused on synergy-driven bolt-ons like [indiscernible]?

Great question. So the way I'd add to that is coming in from a couple of points of view. The majority of companies that we've acquired are clearly U.K.-based companies with the exception of an acquisition in the U.S. and an acquisition in Switzerland. But it will be incorrect to think of us as a solely U.K.-focused acquirer. We are -- we recognize that we need to raise our profile. And so it's something we absolutely want to do is to raise our profile through acquisitions, certainly in the U.S., certainly in Europe, possibly wider than that as well. And yes, we absolutely would consider acquiring businesses outside of the U.K. the fact that the businesses that we have acquired thinking about Luciol and [ Bostonova ] have been synergistic bolt-ons, I'd say, is actually rather coincidence than anything else. It's not that -- that's our focus for acquisitions outside the U.K. where I might say that there might be an area for us to consider is would we -- if we were looking to acquire somewhere outside the U.K. as a stand-alone entity, would that be a completely new market or would the [indiscernible] which is at least some sets of synergy with a market that we already have some involvement in. So that might be a consideration, but probably not a limitation. So yes, we're absolutely interested in acquiring overseas.

Our next question is, have you seen increased competition from Chinese firms acquiring U.K. scientific companies for IP?

I think the simple answer to that is, yes, we generally see a higher level of competition from Chinese companies. Ian, do you want to lay a bit more on that?

Yes. I think I'd answer that in 2 ways. One is certainly within China itself. There is a lot of innovation going on. There's some very competent competitors. Not that we fear that in many ways, competition is good. And they're increasing the best of the are increasing coming and approaching the world market. Whilst we should be cognizant of that and appreciative of that, I actually am confident that with the relentless focus on innovation that I talked about and the agility that our businesses have and that model we are understanding, I think we can come through that. So we see that actually is something we need to do with obviously, and in fact, I alluded to with the Firetesting technology business. This is, in fact, one of the reasons why product update and that investment we need to do is in direct response of the Chinese situation. But it's something -- it doesn't overly worry me, but it's certainly something we're cognizant of that.

Our next question is Rik Armitage joined the team almost a year ago, but we've yet to see acquisitions come through. While I acknowledge that the M&A environment might not be the best, can you share any qualitative insights on the M&A front since Rik joined the team? Has the pipeline gotten larger, have things progressed through the pipeline.

so I think the simple answer to that is, yes, there is activity. There is outreach and response to -- as well to inbound inquiries we are ongoing conversations with the number of opportunities. But I'd highlight the points that I raised on my slide earlier, this is notorious theoretic in how it progresses. So we are pleased that we have that additional bandwidth and it is allowing us to move through and sit through opportunities quicker. Rik is providing an excellent level of outreach of investigation and our triage in some description, which is proving very effective for us. But yes, I acknowledge that the -- other than the Geotek result, there was not an acquisition closed last year.

Next, we have Brad. There was a GBP 1.9 million acquisition of Geotek to Brazil. but I cannot see any corresponding cash outlay in the investing or financing activities of the cash flow statement, motivated by wanting to understand free cash flow.

That's okay. You may have missed the short summary in the acquisition that explains that what we're doing with the that acquisitions, we're actually paying it out of the 60 monthly installments. So it is a long-term payable that we have. So that's why you won't have seen the amount going out we owe it, and we're quite happy to have to acknowledge that we are and it's an acquisition payable on the balance sheet. But we haven't yet settled it all because we're paying it over 5 years. Additionally, there is a potential earn-out of up to GBP 0.7 million and that will be payable based on next year's performance. And if they achieve the maximum then we'd be paying that in 2027. That would be a lump sum. I hope that answers your question.

Our next question is the rules for vesting management options have been weakened, and I believe the new threshold is 5% per annum growth. Given the recent performance of the company, wouldn't it be more aligned with interest of all of the shareholders, if the company went back to the old minimum 10% per annum growth vesting threshold even if the awards were scaled up somewhat, i.e., more lucrative upside, but awarded only when the performance -- sorry, only when the performance really is exceptional rather than just barely inflation matching.

Noted. I have to say I'd have to take guidance on what the historical was because my understanding was the historical was closer to 5% and it moved to 10% for a period of time. So it's moving 5% back down to where it was historically. But I mean, the question is certainly noted and that's a conversation that we would be having with our remuneration committee.

Thank you. Our next question is knowing this organic revenue was not increasing. Why were steps not taken in advance during the year to cut costs to match the adjusted revenue, leading to a fall in profit.

I think I'll -- if I may, I'll take that one initially, but then also Brad, please come in -- so I think the point I'd make there is that there were several examples during the year of actions that were taken on cost. So for example, right at the beginning of the year, there was some restructuring in Scientifica after we exited the product line. So yes, some costs associated with that, but also costs coming out of the business. And then throughout the year, there were actions taken on cost -- on head count, I should say, that resulted in some restructuring costs, but reduced head count. I'd also mention that corresponding there were some investments. And we mentioned already some of the investments in R&D and engineering effort required at companies, including FTT and management capability management bandwidth, generally investing in talent across the group and particularly where there were growth opportunities. So we did take action. But we acknowledge though that there was an increase in the overhead that closely matched the revenue increase.

I would add a little bit to this, which is firstly, that the issue in relation to the U.S. came out at the end of Q1, where we had a pretty good first quarter. it becomes an emerging issue, which we originally thought wouldn't be as significant. And maybe that sound [indiscernible] but when we were at the year-end results last year, we did explain that we thought it wouldn't be that significant. So it took time before we realized it was bigger than perhaps we thought it would be and for the fact that it was prolonged. The second thing I would say is, which is an easy thing for us to do, which is to say, well, if your revenue is not going to be as high than you should cut requisite amount of costs. And I think an important thing for us to say is we're not a sort of slash and burn type organization, and we certainly don't have the aggressive mindset about short-term cost cutting that you would find in the U.S. corporate. And we think that's important and for good reason because we're trying to build for the long term. And if every time you have a what you believe might be a short-term hiccup and you slash your costs, you damage your culture and you damage your long-term outlook. So I think the other side of this is also that we've taken and challenged our business about taking the right steps as a consequence of not having a successful year as we hope we had last year and on the back of the fact that we had a tougher year for us in '24 as well. And I think we took prudent decisions as a consequence. Now I would note one other thing, which is that if you read our accounts carefully, you will note that we haven't ever, certainly during my 11 years of tenure ever recorded exceptional items for restructuring costs. And we haven't done so this year either. And so we treat those costs as a cost of doing business and such that those costs go through our trading P&L. So part of the reason we also have slightly higher cost is the effect of the cost of making those changes is also having our trading payout, not separated out like a one-off item.

Yes. And I think just to add to that, Brad, I think to some extent, that hides the fact that several businesses did go through some difficult restructuring with all the cost for that. A lot of that was midyear, but the reasons you've just said has go through the P&L, and we will only see the benefit -- we are only seeing the benefit of that this year from an overhead standpoint.

Our next question is what makes you confident that the Geotek coring expedition will take place in 3 out of 4 typical years given that the last 4 years suggests more of a 2 out of 4 MAX is more likely. What -- sorry, the next part is, what impact do you think the environment sorry? What impact do you think the environment of longer-term higher oil prices would have on the likelihood of expeditions to take place and their profitability.

Great questions. So I'll address the order. The customer base for these coring acquisitions is relatively small. Historically, this has been related to country-sponsored expeditions and the sponsoring countries have been Japan, China, India and the U.S. What I mean by that is that the overall landscape here is relatively small in terms of the people and the organizations involved in this, and we are well-known in the landscape and well-established and know and understand what's happening and the people involved in there. So there are conversations ongoing all the time. we hesitate to call it a pipeline because what always remains unclear is the exact timing of these things. And Geotek really doesn't have a say in the timing, it tends to be dictated more around seasonal issues depending on -- for which country and which location this is and these are major projects, major undertakings involving multiple activities, multiple projects the hiring of the vessel and so forth. So they tend to be a long lead time and with some significant uncertainty in the timing but our knowledge of and conversations with the people involved in this sort of ecosystem gives us a good degree of confidence in that sort of regularity of those expeditions. The second point I'll respond to, but I'll say very openly, but it's rather speculative. Our sense of high oil prices, our correlation with the oil price or a correlation of the realization of how sensitive the world is to certain restrictions, for example, the straits of Hormuz and who has control over that. it would beg the question whether is that going to accelerate countries who are currently rely on that to take a look at alternative arrangements, alternative, whether that means a faster transition to wind power, for example, or grid or green energy, green energy technologies or whether that means investigating alternative hydrocarbons. And yes, it is the case that the methane hydrates that are part of these coring that form the basis of these coring expeditions are vast resources of alternative hydrocarbons. And so it's rather speculative. We just don't know, and these things would take many, many years to develop. But it could be that if the oil price stays at a sustained high and if the volatility in that particular region remains the case, then that could be a long-term driver for that.

Next, we have -- you mentioned in your report that this is the final year of increased capital expenditure. How should we view the situation from now on?

To extend the words for all of the other viewers the comment is in relation to capital products within the group. And this is -- we're coming to the end of what think has been almost a sort of fully -- what feels a bit like a full year of project. But a number of our businesses moving and either us funding a new building acquisition and its subsequent refurbishment or something similar to that. And the last one of our businesses are in the middle of the final steps of their move, they're building will be ready, I think, at the -- within the next few weeks. And so as it stands at the moment, we have no large capital projects that I can see on the horizon such that that should mean that a couple of million less a year will be spent on CapEx for the foreseeable future. I hope that helps answer.

Next question is, after the Armfield pension buyout, is there any material DB pension scheme exposure across the rest of the portfolio?

I'm glad to say that this was the only scheme we had. It should be within the next month or 2, no longer on the group's books. And I'm glad to say that we've been able to secure and guarantee the future of all of the pensions within the Armfield pension scheme, and there are no other defined benefit pensions scheme within the the group.

Our next question is what percentage of group revenues come from replacement parts, maintenance, consumables spending on existing instruments versus new equipment sales.

Brad, do you have that number to hand?

I don't have that number to hand, it's a very good question. Around 85% of our group's revenue is instrument spares, et cetera, and around 15% of services, of which a large chunk of that relates to services that are outside what you just mentioned, so some of the maintenance revenue would be quite low, maybe 1% -- 1% to 2%, something like that, a few percent for spares. What I can't really give you much of a clarity on is the sort of replacement instrument cost because that's -- I just don't have the detail for that, unfortunately, at the moment.

I would say we are cognizant that's an area that we can probably improve on. We are conscious across our group. Businesses that have been selling instrumentation to their end users for decades, so a significant installed base. so an opportunity to increase the level of service and service-related revenue through value-added services is absolutely something that we want to look at improving across the group.

Next, do subsidiary businesses ever make their own acquisitions or are they all done by HQ.

So the simple answer is they're all done by HQ. There might be examples and situations where a subsidiary suggests or brings an acquisition to us. That's happened on a number of occasions. But the actual implementation and development of the app, the running of the acquisition process is something which is done at a group level. But there are also in some cases where the acquired company is from a structural perspective, is acquired by one of our other group companies. But essentially, the acquisition process is run by group.

Thank you. Our next question is does the ambition for businesses to double EBIT over the next -- sorry, over 3 to 5 years, imply Judges ambition is for organic EBIT growth, well above historic levels of 8%.

If I may, I'll respond initially for this and then Ian, can I get your views as well. I think the context I'd like to frame this in is by saying why it is that we challenge the companies in that way. So the strategy plan process asked the companies to respond to the challenge, how would you be or become a business that doubles in size every 3 to 5 years. And as the question says, that implies 15% to 25% growth a year, which is higher than our historic normal. And I think in that context, what we're implying there is that continuing to do as you are as you were, delivers high single-digit growth. if you're planning an attempting and trying and investing in growing significantly higher than that 15% to 25% than you are, by definition, doing something very deliberate about it. And it's not deliberateness that we're seeking to capture there in the planning process, asking the companies to work iteratively in a sense to try and identify what are our few and Ian mentioned earlier, 4 to 6 and potentially must impact all initiatives that they could work on to deliver a higher level of growth above the underlying growth? And then what do they need to do to turn those initiatives into actions.

I'm not sure [indiscernible] other than just to emphasize that, yes, it gets them to think big and not sort of incrementally. And I think it's really the key message to get across the ambition that they should be looking to drive.

We are now moving on to our final question for today. If you have any further questions, please e-mail the team who will respond to any questions that weren't covered today. Our final question is, what is the likely impact of the conflict in the Middle East given the number of universities in the UAE and other countries in the region.

So we mentioned earlier, our revenue exposure to the Middle East, excluding Israel, is maybe a couple of percent at the moment. So in that sense, the direct material impact for us is not great, [indiscernible] What I think -- weather is uncertainty is how long this goes on for, and what it might mutate into, and whether it turns into a much larger issue in terms of energy and energy challenge, supply chain challenge. And I'd say how long that goes on for. And in that sense, I'm not sure we're in a position to give a definitive response on that about how big that could be.

Thank you. That's all the questions that we have time for today. So I'll hand back over to the management team for any closing remarks.

Thanks, Ivvy. Thank you. So a final closing remark is to thank everyone for attending. I hope this was useful. And thank you to Ian and Brad for your contributions as well.

Thank you to the management team for joining us today. That concludes the Judges Scientific investor presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.