Matrix Composites & Engineering Ltd (MCE) Earnings Call Transcript & Summary

All right. Well, good morning, ladies and gentlemen. My name is Peter Hood, and I'm the Chairman of Matrix. And if you don't mind, I'll sit down while I deliver this instead of bending over. So it's my pleasure to welcome you to the 2022 Annual General Meeting of the shareholders of Matrix Composites & Engineering Ltd. In addition to the shareholders who have attended this AGM in person, I would also like to extend a very warm welcome to those shareholders who are attending via the webcast. I'm advised that a quorum is present in accordance with Rule 16.7 of the company's constitution. And as such, I declare the meeting open. Sitting with me today are my fellow directors, Steven Cole to my right; Craig Duncan to the left; Chris Sutherland to the further right; and Aaron Begley, CEO and Managing Director of Matrix. Also attending today are Mr. Brendan Cocks and Mr. Paul Hardie, our joint company secretaries. Mr. Matthew [indiscernible] representing the company's auditors, KPMG, are also present today together with [ Katherine Malone ] from the company's share registry, Link Market Services. I'm advised that proxies have been received from 72 shareholders representing approximately 20% of the company's issued share capital. All shareholders have been sent a Notice of the Meeting in accordance with Rule 16.3 of the constitution. And if there is no objection, I propose that the notice of meeting be taken as read. Any objection?

Excuse me, Peter, I'm sorry to interrupt you, but just a slight technical issue. I think this microphone might be on mute. Is it not? Sorry. Sorry about that. Sorry to interrupt. Just I want to make sure [ it's been put ]. Thanks.

I'm glad I don't have to shout then.

Sorry about that. There's a light flashing.

The signed minutes of the 2021 Annual General Meeting held on the 15th of December 2021 are hereby tabled and are available for inspection. I confirm that the register of shareholders is also tabled and is available for inspection either during or after the meeting. If shareholders attending via the webcast have questions, you can type them into the Questions window on your screen now. If your question relates to a specific resolution, please ensure you stipulate which resolution it relates to. I intend to briefly pause at each resolution to check for online questions. We will read out your full name when asking your question. If shareholders have questions of a general nature, these will be asked during the general question session at the end of the meeting. So before commencing the formal business of today's meeting, I would like to give you an overview of Matrix' performance and developments over the past year and our strategic direction. Our Chief Executive Officer, Aaron Begley, will then provide a more comprehensive presentation on our operations and outlook at the end of the meeting following the formal proceedings. The impacts of COVID-19 on our operations and the broader industry continue to linger during the 2022 financial year. Despite these challenges, Matrix delivered on its strategic growth initiative which I spoke to during last year's AGM. We now have strong momentum and are in this position as activity across our traditional energy products continue to rebound. Enhanced opportunities across the resources sector and the renewable energy market are emerging and as the company's revenue base evolves to be increasingly diversified and sustainable. We capitalized on our prudent decision to maintain capability across our traditional product lines as demand continues to recover. And for FY '22, we generated a 50% rise in revenue across our subsea products to reach $16.6 million. Additionally, in FY '22, we continue to grow our OpEx-focused Corrosion Technology business, which generated revenue of $10.4 million for the fiscal year compared to $5.8 million for FY '21. The business is expanding across the local energy and resources sectors and increasingly provides Matrix with exposure to a major source of stable recurring revenue. As a result, we delivered group revenue of $28.6 million for FY '22 which was an increase of over 60% on the FY '21 result. And we significantly narrowed our net loss after tax of $4.8 million and $27.9 million in the prior corresponding period. So pleasingly, this positive momentum has accelerated in FY '23, including the award of 2 significant buoyancy orders since June totaling approximately $30 million. We're on track to deliver significant growth again this year with our 4 months year-to-date revenue plus secured orders for the year -- the remainder of the year currently totaling around $43 million, substantially higher than last year's full year revenue of $28.6 million with further FY '23 orders being pursued. So as FY '23 progresses, Matrix will have a key focus on capturing further opportunities in the subsea space. And as I noted in our 2022 annual report, we are well positioned to capitalize on our numerous competitive major buoyancy tenders currently in play across the subsea and in SURF markets. Another key focus for us will be to ensure our Advanced Materials offerings continue to evolve with further traction into the resources sector and broadening into fast emerging opportunities in renewable and clean energy. We're making tangible strides in delivering on this initiative, evidenced by the announcement in September that we had entered into a joint development agreement with Rio Tinto to develop, manufacture and trial a replacement product for structural steel components at its iron ore operations in Western Australia. The trial at Rio Tinto's operations, which has the potential to lead to a mass-produced solution across numerous commodities, leverages our advanced composites technology expertise to create a product that is substantially lighter than steel and 100% recyclable. It's aimed at conveyor belt structures, and the total kilometers of conveyor belts that exist in Western Australia is very, very substantial. So that particular trial complements other eco-efficient advanced materials projects that we will progress throughout FY '23, including a services contract signed during FY '22 with Fortescue Future Industries to develop equipment and materials technologies for FFI's green hydrogen objectives. We're also actively discussing broader clean energy opportunities, including new technological developments in hydrogen and wind. And we are now better placed than ever to capture these long-term renewable energy opportunities. And that's following our award post FY '22 of the ISO 14001 certification, is a key ESG accreditation step. So on behalf of the Matrix Board, I would like to thank our senior management and employees for their commitment and hard work during the year which has underpinned what I think is a significant rebound. And finally, I would once again like to sincerely thank you, our shareholders, for your patience and loyalty during the challenging COVID impact period that we are now beginning to emerge from. We have methodically built the operational capability and diversity to continue to grow our revenue base sustainably with an increasing exposure to the renewable energy transition. We are advancing with considerable positive momentum and a robust platform to deliver long-term value for our shareholders. Once again, I thank you. Having said that, I will now continue with the formal items on the agenda for the meeting. First item of formal business is the presentation of the annual report of the company, which includes the financial report, director's report and the auditor's report. And pursuant to the Corporations Act, the company is obliged to present to this meeting the last audited financial statements and report for the year ended 30th of June 2022. These were circulated to all shareholders with the notice of meeting. Whilst there is no requirement for shareholders to approve the annual report and no resolution is required, I now invite shareholders to comment or ask questions in relation to the financial statements if they wish to do so. KPMG is also available to answer any questions in relation to the audit of the financial statements.

I think we had a question [indiscernible].

The question is about the operating segments. We break up -- we break up operations in some ways by product line and geography, by revenue. But we don't [ have ] any measure of profitability. And I understand there might be competitive reasons why that's not the best [indiscernible] that shareholders aren't sympathetic to those. I just kind of like to highlight that [indiscernible] results significantly more challenging. So if it's the right thing for shareholders not to disclose it, I'm happy about that. I just want to highlight that -- the other side, if it does make it [indiscernible] challenging.

Yes. Thanks, Richard. I think it's always a consideration, and as far as materiality of the business segments we have [indiscernible] to that recently but also certainly from a competitive point of view, there's a bit of a [indiscernible] there as well so we can say sometimes that the more we put out there you can actually see it translated into that competitive environment and [indiscernible] quarterly activity [indiscernible].

One other comment I can just contribute to that as well. I think some of the -- we've been trying to diversify our activities. A lot of that means working capital expenditure in prospective new growth areas, which probably are not profitable in the shorter term until those opportunities mature. So a little bit difficult to give a fully transparent competition, and it is fierce competition out there in the industry, agreed. And also because some of those newer areas are still evolving. And we'd have to say we are more hopeful of future profitability than we have today in those.

The subsea area, which is a major growth area at the moment. It's something we've been trying to diversify into this extent for about a decade, is a very competitive area. And if I could find out where our margins were in that area at this early stage, I'd be very happy. We don't particularly want them to.

Yes. So we've got -- we're 1 of 3 players in that sector globally. And so as a result, we get a lot of attention. And I think that's one of the balances and challenges you have running a public company is the disclosure of what is competitive confidential -- commercial [ and confidential ] information against disclosure obligations. And I appreciate the issue associated with it, but it's one of the reasons why we're probably a little bit more discreet in terms of how we report that.

We'll take your comments on board. Maybe next year we can see what we can deliver with more information, more transparency than otherwise available. Things had moved on over the last 4 months 2 years now.

I think so. I think it's a revenue base price as well. And within the subsea space, we now have 4 industry segments, which include deepwater drilling, subsea production, deepwater mining and a growing revenue base in offshore floating wind and even [ fence ] as a consolidated profit reporting segment. That's something we may be able to reveal before...

Any other questions? Any questions online? Okay. Thank you. But before I commence with reading of the individual resolutions, I advise all resolutions will be voted on via poll. And the results of the poll will be lodged on the ASX later today. All shareholders and their representatives were provided with yellow voting cards as they entered. On this voting card, there are a series of boxes. Please indicate on your card how you wish to vote by ticking or marking over the for or against box for each resolution for your vote to count. If you are a proxy holder, a summary of the votes to which you are entitled has been provided with a yellow voting card. If you only have directed votes, you need to do nothing other than submit the voting card. Votes at your discretion are open votes shown in the column titled Votes Open on your proxy summary and can be cast at your discretion by marking either the for or against box. Once you have finished marking your card, please place it in the ballot box that will be circulating the room after all resolutions are read. If there are any aspects regarding the voting on which you are uncertain, please do not hesitate to ask the share registry representatives who will be circulating the ballot box. We will now proceed to the resolutions and conduct a poll following the reading of all resolutions. Resolution 1. In the Notice of Meeting pursuant to the Corporations Act, the company is required to include as part of the director's report, a remuneration report, which includes specified information. Directors have prepared a remuneration report to 30th June 2022, which is included in the annual report on Pages 10 to 17, and has been made available to shareholders. [indiscernible] company to put to shareholders a nonbinding vote to enable shareholders to voice their opinion on matters included in the report. In accordance with the voting exclusion statement set out in the notice of meeting, I further advise the company will disregard any votes cast on resolution 1, by or on behalf of any of the following persons: a member of the key management personnel, details of whose remuneration are included in the remuneration report; or a closely related party of such a member. Are there any questions in the room relating to this resolution? Any questions online? I now move for the purpose of Section 250R(2) of the Corporations Act, shareholders adopt the remuneration report for the financial year ended 30th of June 2022. And the result of the proxies that we have received are summarized behind me so. Thank you. Resolution 2 relates to the reelection of Mr. Craig Duncan as a director. Set out in the notice of meeting, Mr. Duncan is retiring by rotation and offers himself for reelection. Are there any questions relating to this resolution? Any questions online?

No.

I now move Mr. Craig Duncan, who retires by rotation in accordance with Rule 19.3 of the company's constitution and Listing Rule 14.4 and being eligible be reelected as a director. With respect to Resolution 2, I advise that proxies had been received by the company are summarized in the slide behind. And I think I would say congratulations on your reelection. Resolution 3 is an ordinary resolution relates to the grant of options and performance rights to our Managing Director and Chief Executive Officer Mr. Aaron Begley under the company's Equity Incentive Plan. The options and performance rights are structured with appropriate vesting conditions and performance hurdles as set out in the notice of meeting. Vesting conditions and performance hurdles are put in place by the Board to ensure that long-term performance is incentivized and aligned with the company's strategic objectives. ASX Listing Rule 10.14 requires a listed company to obtain shareholder approval by ordinary resolution prior to the issue of the securities under the employee incentive scheme to a director or an associate of a director. Accordingly, the company is seeking approval for the issue of these options and performance rights for Mr. Begley under ASX Listing Rule 10.14. For the purposes of ASX Listing Rule 10.14, information about this proposed allocation is detailed in the explanatory statement accompanying the notice of meeting. A voting exclusion statement applies in relation to resolution 3 as outlined in the notice of meeting. However, the directors with Aaron Begley abstaining, unanimously recommend that shareholders vote in favor of resolution 3. Any questions relating to this resolution? No? Nothing online? I now move the issue of 1,334,533 options and 736,388 performance rights to Mr. Aaron Begley, the Managing Director and CEO of the company is approved under and for the purposes of ASX Listing Rule 10.14, 10 14 I mean. With respect to resolution 3, I advise proxies have been received as summarized in the slide behind me. Thank you. Final item on the agenda is resolution 4, which is a special resolution that relates to the approval of an additional 10% of the company's placement capacity under the listing rules. over and above the normal 15% that is available to listed entities in any 12-month period without the need to obtain shareholder approval. Any questions relating to this resolution? Any online? Unless there are any objections, I now move that resolution 4 as set out in the notice of meeting be taken as read. And with respect to resolution 4 I advise proxies have been received by the company as summarized in the slide behind me. With respect to general questions, are there any general questions in the room? And none online? I've now read through all the resolutions and answered the questions by shareholders, so we will now conduct the poll. If you haven't already submitted your voting card, please do so now with a share registry representative. [Voting]

Thanks. Have all persons who intend to vote now voted? Yes? I therefore declare the poll closed. The results of the poll will be lodged on the ASX later today. That concludes the formal business of the AGM, and I'll now close the meeting. I thank shareholders for their continued support, and I will now ask Mr. Begley to provide a presentation on the results of the company for the year ended 30th of June 2022 and the strategy and the outlook for the company going forward.

Good morning, everyone. So I'm going to walk through these slides. And just excuse me, why I have to turn occasionally to make sure that I'm on the right slide. I'm going to take you straight to Slide 3. So this is an overview for people that are maybe not familiar completely with what Matrix does. We have 3 to 4 key areas in terms of our technology and market focus. The first one, and it's where the business was really founded, is to deliver subsea buoyancy solutions to the world. We say to the world because the majority of our revenue is derived from exports. We're one of the world's largest buoyancy manufacturers. In fact, we're 1 of 3 major buoyancy manufacturers in the world. And most of our revenue is derived from export income. It comes from places like Brazil, West Africa and North America and other parts of the world, including China and Japan. We also are supporting the growth of the renewables energy sector. One of the growth markets that I'll talk to is offshore floating wind sector, which is an emerging market for us and directly related to subsea buoyancy and other technologies that we have. We also have a new division, a relatively new division within the business associated with corrosion-resistant coatings, very much advanced material as far as we're concerned. And we're supporting Australian, the Australian resources sector with that technology. And then finally, there's a range of high-technology advanced materials that we supply to the resources, defense and infrastructure space. To the next slide. Our -- one of our cornerstone technologies is syntactic foam, and we're the world's largest capacity manufacturer of syntactic foam. So syntactic foam is an advanced synthetic material made from hollow spheres. And in the picture that's on the presentation there, you can see they're made out of carbon fiber, which we manufacture here at Matrix. And one of our core strengths is the manufacturing of these -- they are manufactured from 100% recycled carbon fiber, which we then incorporate into a finished advanced material. These form structures, which are very light and very, very strong. They have a very high compressor strength to weight ratio, which is why they are used in applications like subsea buoyancy. We can make virtually any shape and size. They never corrode. They last a long time and is an alternative to traditional materials, including steel, wood and concrete. So very much this technology has been adopted across all sorts of industry sectors where traditional materials either can't be used or don't perform as well as a syntactic foam. In terms of their applications, our traditional markets have really focused on the subsea oil and gas industry. And we've delivered over $1 billion of export sales from this facility, primarily to the deepwater drilling space and increasingly, in recent times, to the deepwater production or SURF space. So we have been the world's leading manufacturer of drilling riser buoyancy for over a decade now. And we're utilizing this technology and this capability to provide buoyancy products into the subsea production market. So you can see with some of the images on the slides some of the applications that we sell the product into. It includes large structures for supporting deepwater rises, applications like installation and permanent mooring buoyancy, distributed buoyancy for production risers, umbilicals and, of course, drilling riser buoyancy. So they're some of the applications that we've sold our product into. The growth market that I'll expand on in a minute in this space is very much the production market, but we are seeing a resurgence with our traditional drilling product range. Another expanding market for us is the offshore hydrogen -- sorry, excuse me, the offshore floating wind and hydrogen market and the defense space. So we put those 3 key areas on this slide because they are areas that we haven't dealt with a lot in the past. So offshore floating wind is a relatively new but will be a very, very big part of the global energy mix in the future. And the opportunities for our product, syntactic foam and floating wind, far outstrip anything that we're seeing with our traditional markets. Also, the move to autonomous underwater vehicles for the defense space provides another very big opportunity. Matrix [ is ] quite an active [ support ] in defense in Australia, especially with the recent canceled, unfortunately, submarine program, but there's a large opportunity for the business in -- with AUVs and UUVs, where there are literally thousands of these vehicles that are going to be constructed over the next 10 years just for the Royal Australian Navy alone, and we expect to participate quite strongly in that market. And hydrogen, of course, with our association with FFI and other companies in that space, is also another application for -- or market application for our advanced materials. Right. In terms of our growth trajectory, I think really what we see from what have been some very, very difficult years, which were exacerbated by the impacts of COVID, which effectively stopped the drilling industry and its track for quite some time. We're seeing a recovery -- strong recovery in that market. And that has been reflected -- we're at the early stages of that recovery, and that's been reflected with our increase in revenue over the last 2 halves. So we're seeing that being driven by a rebound in offshore drilling spend. Our order take has increased, especially in the subsea production space, and we're getting some traction in our corrosion and advanced materials market. So this is -- this has reduced our EBITDA loss from $4.4 million in FY '21 to $2.3 million in FY '22, and we expect that to continue to improve this financial year. We're obviously focused on the financial management of the business. It has been very tough over the last few years. We finished the year with slightly more cash on hand than we did the previous year and no trade or term debt. So that's enabled us to navigate what's been a very difficult period. In terms of our operating mix of revenue streams, you can see the corrosion technology is probably the highlight in terms of that difference from prior years. And that really just demonstrates how we've been diversifying the business. So our outlook for the short to medium to long term in our traditional subsea space is very strong. We're seeing a significant amount of inquiry has come through the door. We started to book some major orders in the subsea production space that utilize the installed capacity of our Henderson plant. And we're also seeing that resurgence in those traditional spaces. Corrosion technologies is definitely getting traction, an almost 100% increase in revenue year-on-year last year. And so we expect that business to continue to build this financial year. And we're doing some very exciting things in advanced materials across a broad range of industry sectors. Just to expand on that a little bit, subsea, I think, I've reiterated the cyclical upswing in the oil price recovery that's been translated into increased inquiries and orders through the business. We actually did receive a question along these lines from Steve McNamee, and he asked, "Aaron, I appreciate there is a CapEx cycle in your traditional business line, and we're well past the low of the cycle. It appears to be a lot tougher or delayed coming in out of the downturn. Is this the case the CapEx cycle is different this time." We'll probably not Steve, to answer that question directly. From the drilling markets perspective, generally, there needs to be 7 -- historically, there needs to be 7 quarters of oil price stability before you see a significant upturn in the drilling market. And we're at that point of inflection pretty much now. And what we've seen is we have seen more drillships being activated, more contracts being won, an increase in day rates and drillships, and that will translate into quite a significant uptick in activity next year to the point where there's actually going to be -- we believe there's going to be supply constraints. So it does -- if the oil price goes up above whatever the threshold may be, $60, $65 a barrel, there's just -- there is a lag effect or delay effect until we start seeing orders flow through to us. And I think we're on that point now where we're seeing quite an uptick in activity right across our client base. So -- and with the SURF market, we are a relatively new entrant into this market, and -- but we are seeing some very positive traction in that space. And I think I've been through the other 2 slides in enough detail for corrosion technologies and advanced materials. So the business has adopted 3 strategic pillars: subsea, corrosion technologies and advanced materials. Subsea is very much our traditional business line but where we're leveraging existing technologies and capacities to grow subsea into the subsea production space and also subsea -- also the offshore and floating wind space and the defense sector. The corrosion technologies described that range of products, including paint systems, anticorrosion technologies and other specialized materials we use in that sector, primarily focused to the Australian resources market. And advanced materials is a group of other advanced material applications, which also can include syntactic foams into -- and other advanced materials into a range of sectors, including hydrogen and mining. Here's a snapshot of our subsea activity. We've seen a growing quotation pipeline. So this has grown from our last presentation. We've identified, and we're well over $600 million of opportunities. So this continues to grow and very much underpinned by that increase in activity in the subsea sector but also completely new sectors like offshore floating wind and even deepwater mining, where our products are used. So our largest product line for subsea is syntactic foam buoyancy, and we're looking for any applications for that product across that array of sectors. So there's some very interesting and exciting growth opportunities that didn't exist 12 months ago, primarily coming out of floating wind and defense and a few other niche sectors and, of course, the significant uptick in SURF or subsea investment for the oil and gas space. Recently, we were awarded our API 17L [indiscernible] accreditation as well. This is a bit of a skew, but basically in the subsea oil and gas space, the American Petroleum Institute monograms and tight approvals are very, very important for customer acceptance. And I'm pleased to report that after a year of engineering and development and testing and backwards and forwards negotiations with Bureau Veritas, we've been awarded our API 17L [indiscernible] accreditation for a range of SURF products. And that opens up approvals to a whole new range of clients. To reflect that subsea spend, this is a graph that comes out of Douglas-Westwood analysis at SubseaLogix. The forecast for subsea contract awards remains very, very strong. There is a bit of a peak there this year and next year, and what that does is that flows down to us over subsequent years with contract awards where the EPIC contractors require buoyancy to actually execute those projects. I think it was last week, the CEO of TechnipFMC told his audience at a quarterly update that they expect no slowdown in the subsea space for the rest of the decade. So it's a very, very positive indictment on the sector that we are playing in and also one of the reasons why, strategically, we focus so hard on penetrating this subsea space. So if we turn to Slide 12, floating wind offshore. But the answers -- I know some of the questions that we've been getting around where our products are used, floating wind is a very interesting space for us because of the sheer scale of the market. So there are projects in North Asia, in places like Taiwan, Japan and South Korea, that are planning to install hundreds and hundreds of very, very large floating wind turbines off the coast. And effectively, they go over the horizon where the wind conditions are very good. The wind turbines are absolutely enormous. They're much bigger than what you'd see in fixed wind turbines nearshore or onshore wind turbines. And the total forecast installation globally is nearly 30 gigawatts of installed floating wind capacity to be installed between now and 2031. We expect a lot of these major projects will reach FID beginning next year, and so then subsequently, we expect to see a requirement for buoyancy that will follow that. Where our buoyancy products are used is in 3 key places. Power cable supports, so that's where the cables are actually coming up from the seabed into the floating wind turbine. They collect power from the turbine, and those cables need to be supported by buoyancy. The bigger market is mooring buoyancy. So each individual wind turbine needs to be moored. Typically, there's 3 to 4 mooring lines per wind turbine, and they require large mooring buoys. These are very, very big. So typically, a midsized floating wind installation might include something like between 150 and 450 large mooring buoys, much, much bigger than any -- generally than any field installation that we've seen in the offshore oil and gas industry. And then finally, we make floatation for large structures. So if wind turbines need to be supported offshore, we have building block systems for flotation that can make very, very large structures to help support wind turbine subsea. So very large applications for buoyancy. We're in the business of buoyancy for the offshore floating wind sector. I'll touch briefly on corrosion technologies. So really, there are -- our focus to date has been on the LNG sector but also increasingly in iron ore and alumina. Our key clients include companies like Woodside, Inpex, Alcoa, Santos and CSBP, and we're adding to that list on a monthly basis. This has been a great business unit for us because it provides a sustainable regular income as we get involved in the maintenance cycle for brownfields development. So our key technology solutions there are Humidur coatings. We're the agents for the specialized product, and we provide service -- support services and the coating material to Australia, New Zealand, [indiscernible]. Composite repairs, equipment such as equipment hiring services and rotolining, all the thermoplastic lining of pipe work and the specialized equipment for abrasion and corrosion control. So a great market, which is continuing to grow for us. Turning to the next slide, which is Slide 14. Advanced materials, as I described, is a bucket for the other things that we do in the advanced materials space. But to date, our focus has primarily been iron ore, LNG, gold and hydrogen, which is a pretty broad brush application there. But the 2 key areas that we really see short-term growth in are iron ore and hydrogen, as Peter alluded to in his Chairman's speech. Iron ore is one of the areas we're focused on with Rio Tinto, where we're introducing fully recyclable, low-carbon footprint composites to replace steel in conveyor applications. And in the hydrogen space, we are a technology partner of FFI, and FFI is building into the hydrogen space, everything from electrolyzer production through to distribution and storage of hydrogen, and we're participating in the prototyping and in the -- and ultimately, the production of componentries for those -- to satisfy those ambitions. So that's a very rapidly growing opportunity for us. So in summary, we're heading into FY '23 with the effects of COVID-19 largely behind us. And what we're seeing is very, very strong recovery in the oil and gas space. That has -- and we feel that even though we -- we've increased our order book significantly. We expect a substantial increase in revenue this year over last year, but we're at the beginning of the cycle. So we're seeing consistent feedback from our clients across the board in the oil and gas space that industry activity is going to be very strong for the foreseeable future. And we're seeing that translated into substantial inquiries that are coming from all around the world, from the Americas, from Africa, from -- and also from this region as well and not just in the subsea production space but also in our traditional market as that gets busier and busier. I think anything that we've been able to do to leverage our capacity, which is significant, into other markets, we've been focused on for a long time. And the plant is very big. It can produce hundreds -- over $200 million of buoyancy a year. And the opportunities that we see in front of us will help pull that capacity in the future. So floating wind is definitely in our wheelhouse. It's a perfect application for the technology and the production processes that we have and something that we're focusing on very, very strongly. Corrosion technologies will continue to underpin earnings -- some earnings of the business and is very stable and growing. So we're investing in that. But advanced materials, I think, is a sizzle to the stake, if you like. And the opportunities in that market are very significant because our technologies can be used across a broad range of industry sectors. So that really is very exciting, especially in the clean energy space. And I think that concludes my presentation, except to note the last paragraph here, with our current order book. We've got secured orders of -- that will currently produce in excess of $43 million of revenue in this financial year. But we do expect further orders this financial year that we will be able to deliver in the second half. So we expect that revenue line -- top line to grow well beyond that $43 million mark. So with that, I'll conclude my presentation. Thank you for listening, and we'd invite any questions that anyone has. Thank you.

I was just wondering if you could comment on the working capital performance in the [indiscernible].

Sure. I might actually pass that to my CFO, Brendan Cocks, a little bit of a handful.

[indiscernible] working capital because we don't always [indiscernible]. But it does ramp up. How much have we invested [indiscernible]. Then you have the products, and there's different [indiscernible] milestones [indiscernible] new contracts that will mean good different options for the capital. Ideally, we'd love to ensure [indiscernible] it was simple. It was a that [indiscernible] at the moment, although we are going to talk [indiscernible] We feel like the one in the future, the [indiscernible] looking at different employed capital debt options that may move in to us process. [indiscernible] capital raising to level options [indiscernible].

Yes. I think the mix of work also determines what your working capital requirements are because each sector has a different working capital results. So in the case of operation support, which is effectively where we are in the drilling market, I mean you're designed to drilling customers, their working capital, but they tend to be a lot more working capital-light, whereas you're working with EPIC contractors in the subsea space, you're much more tied to their milestones that have a triple-down effect to contractors like us. So they tend to be more working capital-intensive.

Just to comment on that [indiscernible] when we go back a few years [indiscernible] the impact of the slowdown of the sector. And to some extent, we got past revenue coming through as you move into growth base, and at that stage, when we took some impairments a couple of years back, we looked at a full revenue as we are on target and that we're in a test of those projections we made a couple of years ago, which is good but challenging when it comes to supporting that. And so the different lines of business need different support in the coatings [indiscernible] recurrent revenue coming through on the capital goods, more milestone payments and having to support that and sometimes with some retention guarantees [ we derive ] as well. So it's received an active attention, and we're pretty comfortable where we're currently sitting, [ but we obviously should be ] stepping forward. So we're proceeding with attention. And I guess [indiscernible] we've got the growth to support. That's how we've been in [indiscernible] resources business. So better than the other end when it was not such a good [indiscernible], yes [indiscernible].

Look, I think there are labor market restrictions and channels across the board. We don't have a lot of skilled labor in the plant [indiscernible] tends to semiskilled within [indiscernible]. So to date, we haven't had too many issues associated with manning it from a production perspective. But the engineers are in short supply in West Australia. One of the things that we have been able [indiscernible] is place engineers internationally, so we can actually offshore a lot of our engineering function. So we actually have an office in Newcastle. So we, at the moment, and we have one engineer working out of that office, but it just gives you access to a bigger pool. So there are some of the things we can do is offshore, some of the back-office functions that can be done remotely, and you just -- you have access to a bigger market. But to date, we haven't had any real major issues with manning up from a production perspective.

Look, we haven't had any supply chain constraints apart from probably steel work takes a bit longer than [indiscernible] and it is a bit more expensive. But we've got no supply chain issues really at all apart from the usual constraints and extensions of shipping times.

Any other questions? [indiscernible]