Ondo InsurTech Plc (ONDO.L) Earnings Call Transcript & Summary

Good morning, and welcome to the Ondo InsurTech plc Interim Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Craig Foster, CEO. Good morning, sir.

Good morning. Thanks, Paul. So good morning, everyone. It's great to see such a strong attendance. It's obviously a very exciting time to be an Ondo shareholder. So the last 6 months have really represented a very important chapter in our journey to build what I hope one day really does have the potential to be a $1 billion company. Back in May, you will remember we came to you through an open offer and a placing. We raised GBP 4.2 million, and that was to support our strategy to expand into the United States. So I'm pleased to report to you today that we did exactly what we said we would do, and it has gone better than we planned and as well as I hoped. And what we'll do as part of the presentation today is we'll give you a real deep dive as to what is going on, on the ground in the United States, which will help give you more of a flavor why myself and the team are so excited and so confident at this point that the United States is clearly going to be the key market for us for the foreseeable future for our patented LeakBot solution, which we now aim to establish as the industry standard solution for the U.S. market. We think this is the first step to build what has the potential to become a very significant and very large business with high margins, recurring revenues and something that I hope one day will really stand up as a success story on the London Stock Exchange. So I'm joined by our CFO, Kevin Withington, today. So the agenda is -- I'm conscious that some of you on the call may be more recent shareholders, so we'll do a real quick, very quick recap of our vision, our mission and our strategy. And then we'll get into the results. We'll cover the financial and operational results for the 6-months period to the end of September. And then we'll go into some of the regional-specific results and tell you what's going on in each of our geographic regions. Then we'll go and do a proper focus on the United States, what did we set out to do, what we achieved and what does the future look like in that market, and then the overall outlook for the company. And then, at the end, we'll do a very important section, led by Kevin, on some of the work that we've done to optimize our working capital model, a couple of really important changes and wins that we've delivered that are really important and very relevant to all of you as existing shareholders. So I won't talk to the exec summary. We'll go straight into the presentation. But to recap, if you're new to the story, at Ondo, our mission is to become a world leader in claim prevention technology, specifically for home insurers. And our vision is to have our LeakBot solution in every home reducing waste and helping the planet. We listed -- Ondo was created in March 2022, where we entered the stock -- London Stock Exchange through a reverse takeover transaction. And this is a quick snapshot of the progress that we've made since that date. The share price is up nearly 3x. Our registered customer number is up by 3x. Our revenue is up by 5.5x, recurring revenue by 9.4x and the addressable households under contract that we can market to is now a 12x increase versus when we hit that point back in March 2022. And the reason why this business has got big potential is because we're focused on a very big problem. And that's the problem of water leaks and the damage that they cause to homes and ultimately the cost of that to home insurance companies. This is a snapshot of the problem in the United States. There's 1.7 million claims every year that cost U.S. insurers over $20 billion every year to put houses back how they were before as a result of damage caused by water leaks. It's 20% to 30% of all the claims on home insurance policies, and the average claim is about $14,000. So you think where the pipework is in your own house, it's hidden in ceilings, hidden in cavity walls. And those leaks start very small, and you have no idea that they're leaking, so they cause damage over time. And before you actually -- they've been leaking for weeks before you actually realize there's a problem, and that can easily be, in the United States, a $14,000 claim. Now here are some stats from the U.K. So the average claim value in the U.K. is less than in the U.S., but what is impacting insurers around the world is rampant claims inflation. So there are some stats from the Association of British Insurers here that shows the trend of the average claim value over time. And you can see that, in the space of 4 years, there's been an 84% increase in the average cost of a water damage claim. Now, this is really relevant for our business because, as that claim value goes up, the return on investment of our solution also goes up. And this is why I think we're having renewed interest from some U.K. insurers because of this -- the impact on loss ratios that this increase is having. So our solution is a water damage prevention system that can predict and prevent exactly these types of water damage claims. We partner with 21 insurers, as of yesterday, around the world to prevent these types of claims. And we're present in the United States now, in the U.K., in Denmark and Sweden. Paul, if you'd just run the video. So just to bring this to life, it's a small unit. We send it in the post, and it's offered to policyholders for free. And it takes just a couple of minutes to install the solution. So you just clip this to the mains water pipe, as you can see in the video here. It takes a couple of seconds. And that unit connects to your home WiFi, and that single unit can detect a leak anywhere on a mains water system, and it's sensitive down to about 5 milliliters per minute, so it can detect a very, very small drip anywhere in the house. So that connects to an app on your phone. If we detect a leak, we let the homeowner know. And importantly, we have an integrated plumbing service, so a homeowner can then also call out a plumber at no charge to them and a trained plumber will come and they're trained how to find and fix a hidden leak in the property. Now, we report all of this back to the insurance company, so they have a huge amount of visibility as to what we fixed in the home. And what we'll do shortly is I'll show you some of the actual rap reports from the United States recently of exactly the types of things that we're repairing. But the insurer has a good visibility across all of their installed base. And importantly, this enables them to accurately measure the return on investment and see, in real time, the installed base of units that they've got around the world. So I'd like to say we do this now with 21 insurance companies. We've been doing this for a number of years, and we've proven time and again that this is an effective way of managing this, what is in the United States a $20 billion problem. Thank you, Paul. So our strategy has remained very consistent, our primary customer, B2B customers, being home insurance companies. So all of that's provided for free to their policyholder, but they pay us mostly on a recurring basis to provide that solution. We're focused today on 4 core markets, the U.S., the U.K., Denmark and Sweden. And we offer this as an end-to-end solution for our insurance partners to drive those recurring revenues. And the reason why we're going to be successful and continue to be successful is because we have a unique and differentiated sensor technology. We own the patents on that sensor technology around the world. There's nothing else like it being offered to -- at this price point that works for the insurance industry. Also what's unique is that integrated plumbing service. So we actually find and fix the root cause of the problem, so we can demonstrate the return on investment, and we have high homeowner customer satisfaction. And I'll show you the latest results on that in a second. And our immediate priorities, and these have not changed, is focus on top line growth, a focus on the U.S. and a focus on getting to cash flow breakeven. And we've made some important headways since the last results update on each of these elements. So to get into the results, so this is for the 6 months to the end of September. The registered customer number is up 36% to 114,000 in-period. The revenue is up on an annualized basis to GBP 3.4 million. So that's a 42% increase year-on-year. Now, what's interesting is the source of the growth. So in that period, 60% of the customer growth was from the Nordics. But what's interesting since the full year results is the U.S. is starting to have an impact. So already 27% of the growth in the period was from the U.S., but the U.S. contracts are much more lucrative than our other markets because the problem on a per-household basis is a bigger problem in the U.S. So we have an ability to charge more in the U.S. market. So if you look, the 5% of customers that are the recently acquired U.S. customers are actually contributing 16% of our recurring revenues already, and this is when we're just getting started in the U.S. We deliver consistently high customer satisfaction scores. So these are the results to the end of September, [ 5.93 ] out of 5 satisfaction with the in-home visit and a plus 82 Net Promoter Score. And the key here has been able to prove that we can do this in the United States the same as we've achieved in Europe. On these results, you see a plus 77 Net Promoter Score. Anything above 30 is world-class, but the U.S. is slightly behind the U.K. and Denmark here. I'm pleased to report that, post-period, we've actually entirely closed that gap now. And on the latest results, the U.S. is exactly in line with the U.K. and Denmark. So let's take a look by region. So the U.K. is -- obviously, we're a British company. We started in the U.K. first. It's our most mature market. Now, in the U.K., people pay a lot less for home insurance than they do, for example, in the United States. So we first set out and targeted high-net-worth insurance books, which tend to be smaller, but the business case is much easier to get this proposition where everything is free to pay out and deliver return on investment for the insurer. So what's interesting is the U.K. partners only have 92,000 insured households between them, but we penetrated almost half of that opportunity in the U.K. with 45,000 registered customers. Also noteworthy is, in the U.K., the gross margin is almost 50% because this is a more mature business. Our gross margins on new business in the first year tend to be lower and then are bigger on the out years. So that's reflected in the high gross margin in the U.K. Now, what's interesting is, post-period, we've announced some new deals, one of which was NFU Mutual. They're a mid- to high-net-worth insurer, but with a large book of business. So we think, because of this recent progress in the U.K., we've probably had about a 400% increase in the number of households we can now target. The marketing's started. It's going very well, and we think this is a really important development in the U.K., which is going to fuel some new growth in this market and more to come. If we turn our attention to the Nordics, taking Denmark first, our existing partners in Denmark have about just over 400,000 insured households in the Danish market. We're in 35,000 today, so that's a 7% penetration. Again, what's interesting is, just yesterday, when we announced the results, we also announced a new partnership with the Alm. Brand Group, who are one of the largest non-life insurers in Denmark. So we estimate that's probably doubled the number of addressable households available to us in Denmark, so good, good progress there, too. We're also in Sweden. We work with the largest non-life insurer in Sweden, the Lansforsakringar Group. And I think, of everything in the results, this is probably the one that's been a bit of a frustration for us as we thought this would go faster than it has done. The reason is we did a pilot in one particular region, and we penetrated 40% of that region during the pilot period. And then we signed a rollout agreement to expand this across the LF group. What the central group have been doing recently is they've created a bundled proposition that's sold to the customer, including a LeakBot along with some of the smart home devices. We have seen other insurers try to make this work, and it's quite a difficult proposition to get insurance customers to buy kind of smart home kits from an insurance company. So we haven't seen examples of anyone managing to make this work. That said, some of the regions in LF are still emulating the original proposition that we believe in, which is where the device is free and the repairs are free. So we do think we will roll out as planned with LF. There's just been a bit of a delay while they experiment with different propositions. So the overall results from an insurance perspective, in the last 6 months -- in that 6-month period, we've been in almost 3,000 customer homes fixing leaks. Nearly 700 of them are damage-causing leaks that could cause claims with an estimated claims value of GBP 5.5 million. That's a 145% return on investment for our insurance partners. The results we deliver are good for the environment, too. So those same 3,000 in-home visits have saved 132 megaliters of water. If you extrapolate that over a year, that's enough water to fill 50 Olympic-sized swimming pools. So this is the reason why we've got the Green Economy Mark on the London Stock Exchange. And this is becoming an increasing importance as we also slowly made inroads also with the water utility industry. More news on that to come, but I think it's this benefit that really is the thing that's interesting to the water industry specifically. So let's now talk about the United States. Like I said, we came to the market and we raised GBP 4.2 million back in May with a goal of expanding in the U.S. This is exactly what we said we would do at the time and what we said we would use the money for. We said we would hire some new roles in customer success, customer-facing roles to enable our U.S. General Manager to focus really on new business growth. We said we would invest some money in marketing. We would hire some customer support staff, some field engineers. And we indicated, without putting any time line on this, that our aspiration was to expand from the existing 4 states into 8, then 18 and then 32. So as soon as the fundraise was done, we set about executing exactly this plan. This is why it's exciting. There are actually over 300 insurance companies in the U.S., but the top 100 cover 100 million homes that are spending $20 billion a year putting homes back how they were. So the plan -- the 4-point plan is really simple. Number one was prove that it works in the U.S., and we can deliver the same results as what we've delivered in Europe. The second was can we get ideally a market leader to expand across multiple states? And then three, can we get other partners to follow into the same footprint? And finally, number four, can we then use that to really establish our solution as a market-leading industry standard solution for the U.S. market? So this is the start point in the reporting period. So we have 5 partners in 4 states. They, in those specific locations, ensure 270,000 people. And we have already penetrated 5% of that opportunity in the U.S. by period end. And importantly, we went to -- in 539 customer homes on the back of 7,500 new installs to find and fix leaks. Now, I've mentioned in previous results calls about something called rap reports. And then I've seen comments afterwards saying, what the hell is Craig talking about? What are these rap reports? So hopefully, this will bring it to life. When we fix something in the home that's causing damage, we provide a lot of information back to the insurer. And I'm going to just give you a flavor for some of the things that we fix in the home. So here's an example. This is in a house in Washington. And you can see here water coming out of the pipe here. If you take -- if you zoom out, hopefully, you can see that here, you can see a puddle of water kind of gathering here. So this is in a crawl space. In a lot of U.S. homes, this is a typical construction where there's wooden beams holding up the ground floor, and there's this crawl space gap underneath the floor and a lot of the pipe work flows under here. So this is a 1-inch kind of mains feed and it's kind of spraying a small volume of water at the moment. The homeowner has absolutely no idea that this is leaking. Our device picked this up, and here's a picture of the repair that our engineer made while he was on-site. So you can imagine, if this was left over time, that pipe is eventually going to fully fail. That entire crawl space is going to fill with water. The first time the homeowner is going to know is when water starts to come through this floor. So this is the floor immediately above. Now, our engineers carry thermal imaging cameras, and we use these as a way to show -- although you can't see the damage, you can see in this section here, the darker color shows where the moisture is coming through the floor and causing damage to the property. So the average claim value at this insurer is about $25,000 per claim. A claim like this could be much more expensive, as you can imagine, if it's -- the water comes all the way up through the ground floor of the property. Here's another example. This is -- these are water feeds going into a water heater. So the engineer tracked down this leak. The corner of this room was full of stuff, as most people's houses are. Once we removed the items, you can see here, there's actually mold through the corner of the room here where this is dripping down. But again, we caught this when it was a small leak, no serious damage has been done to the property. Once everything is out of the way, look, you can see some of the staining on the floor here. But what we see time and time again is leaks start small. So these things start off as a small drip. They get worse over time until the pipe fully fails. And it's normally at that point that the homeowner is aware, and it's at that point that it turns into an insurance claim. I think there's 2 more quick examples. So I think this is a feed to a kitchen sink. So I don't know what it looks like under your kitchen sink, but under mine, there's loads of stuff crammed in there. And what we typically find is this is a common place that pipework will leak and the homeowner has got no idea because the cupboard is full of stuff. And eventually, that leak will get worse. Eventually, the pipe will fail. And then you know about it when water comes from -- under the kitchen unit. At that point, the kitchen units are buckled. The floor is buckled. That can easily be tens of thousands of dollars of insurance claim. We catch these things when they're just a small drip. And I think one more thing, this is another crawl space example. So again, you can actually see, in this example, the water coming from the pipe here, again, another crawl space underneath the property. So these are typical examples of the types of things that we fix. In this case, in that period, we fixed 500 of these for those partners in the U.S. So one of our partners actually made a customer testimonial video that I'm just going to take a minute of the meeting just to show you. So this is not something that we had made. This is something that one of our U.S. customers decided, off their own back, to create a video to kind of bring to life what it is that LeakBot can do to protect customers' homes. [Presentation]

Thank you, Paul. So when you take a look at what that means, I showed you a couple -- just 4 examples of these types of things that we were fixing in customers' homes. In that 6-month period, we were in 539 U.S. homes, and 106 of the things that we fixed were those damage-causing leaks. So on U.S. average claims values, or the average claims values of those particular partners, that adds up to GBP 2 million of claims prevented. In that same period, we charged those same U.S. insurers $150,000 for providing that service. If you combine that with the plus 77 Net Promoter Score, so 94% of nationwide customers, as an example, would highly recommend LeakBot to their friends and family, and a 4.8 out of 5 customer satisfaction score with the in-home visit, you can see why the U.S. insurers are enamored by those results. So the key then was what happens next on the back of the first part of the plan on proving that it works in the U.S.A.? So the next step was can we get a market leader to expand? So we absolutely did achieve that with Nationwide Mutual expanding LeakBot to all new and existing customers across 16 states, which means we're now active in a total of 18 states in the U.S. [ Mark T. ] from Nationwide in our press release said that they've now fully integrated LeakBot into their smart home platform to -- so they can use this to prevent water damage claims in their members' homes. The results, in his own words, have been remarkable. And their ambition is for Nationwide -- is for all customers to benefit from this type of predict-and-prevent technology. So at the time when we did the fundraise, I anticipated that we would be able to get Nationwide to expand into some states. I didn't think they would go into 16 states as quickly as they did, which was really a remarkable and great result. What's also interesting is, can we get others to follow? It happened almost straightaway. So we signed a new deal with Indiana Farm Bureau, who followed alongside Nationwide in the state of Indiana. They're a really interesting partner because there's loads of farm bureaus and they're all states-specific. So they're noncompetitive and they all talk to each other. So I think Indiana will also lead to a lot of other deals, but they're of a significant size in that one state. But then our existing partners also followed. So Mutual of Enumclaw followed into Oregon. Selective have followed into the 4 states where they've got decent numbers of customers that overlap with the Nationwide footprint. And the other partner, the one -- the partner that's so shy about having their name mentioned have also expanded into another 4 states that have followed Nationwide's footprint. So when a market leader follows, absolutely -- when a market leader takes the lead, others absolutely do follow. So our existing partners have got -- they ensure 1 million households in that footprint of states, so immediately getting to work to roll out the device and penetrate those households. So can we take the next step in the journey to really establish LeakBot as an industry standard solution for the U.S. market? So one thing that we did on the back of the money that we raised is we made a small investment in getting some extra help with our PR and social media. And that was something I used to do at the side of my desk, and it's been good to get a bit of professional support with that. And really, the goal of that has been to use that to get the message out and drive brand awareness with our insurance partners. There are some interesting stats here on this slide that show, of the posts that we put on LinkedIn, who's been watching them in the U.S. and who do they work for? And you pretty much got all of the top 10 U.S. insurers on that list. So we're well on our way. There's definitely eyes on us in the United States. And many of these insurers, obviously, we're in active conversations with and are in our pipeline, and we're looking forward to providing updates in due course. And to give you a sense for how big the opportunity is, each of those houses represents 10,000 homes, by the way. So if you look at that 1 million homes that are in the partners that we've signed in those active states, the green dots there represent a zoomed-out view. That's how many households the top 10 insurers insure in the 18 states that we're already active, 27 million homes. And if you take the rest of the other 32 states, there's another 39 million homes there to go at. So you can see signing any combination of those top 10, top 20 insurers, we've got the potential to be a very significantly sized business. So all of that is well and good. Do we have the right business model and working capital engine to grow this business in a way that's efficient? This has been something that myself and the Board have been really focused on. And credit to our Chairman as well for kind of spotting this well in advance. We're all significant shareholders. And what we didn't want to do as a recurring revenue business is have a very working capital hungry model that meant we constantly needed to fund raise and we were limited to how fast we could grow the business because of working capital concerns. So we made a couple of important changes that, to all existing shareholders, you should be pleased about because it really increases our ability to grow this business. So I'll hand over to the CFO, Kevin Withington, who will explain a couple of these elements.

Good morning, everybody. Yes. So as Craig has indicated, for the last 12 months, we've been looking at optimizing our working capital across the business, bread and butter to me, and it's certainly something that we've focused on, driven by Craig and the Board, to make sure that we don't constrain growth. As you shareholders are probably also aware, in any contract, a lot of our costs are upfront in terms of device manufacture, device deployment costs and engineer setup. So what we've done is look to optimize each contract to do that. And here's roughly how it works. So each U.S. partner and other partners sign a master services agreement that enables them to execute multiple orders on -- under that original contract. And we tend to run about 30-day payment terms for the first 12 months of fees paid upfront. So for example, an order of 10,000 units, we would invoice $600,000. It would normally be paid before any devices start to be shipped. And the key benefit is that the order and the contract remains cash flow positive and doesn't create any additional working capital strain. So when you look at the 2 charts on the screen, as we install devices, we draw down monthly fees against that prepayment. And in this -- in a normal example, this will be fully utilized by about Month 14 in -- say, in the example shown. But in the end, what we've achieved with our partners is that the second order is triggered. So the second order for, say, another 10,000 is triggered once the first 10,000 are dispatched and installed, not when the advance is fully utilized, which, again, on a steady rollout, is around about Month 4. So at Month 4, you're in a position where you've received $600,000. You've basically earned against that about $110,000, so you're 18% in, and you've already got another prepayment coming in. And the reason the partners accept this is because they do accept that our costs are front-end loaded and that we have -- and they appreciate that the P&L charge to them goes through -- goes steadily through to their P&L. But from our point of view, it's crucial because what we're doing is we're pulling cash into the earlier periods against the manufacturing and other costs that we have to incur. And it basically means that the growth actually helps to fund the business, and there's no need for any further debt, any further debt finance or any sort of fundraising to do that. And as we continue to deploy, we're building a cash-generative base from our -- cash-generative base and recurring revenues from the installed devices. So it's a very unique way of doing this, but it also means that your growth is nowhere near constrained and we don't need to raise further equity from any source. And it's really a positive thing, and I expect the deferred revenue to grow over time as we get more and more devices deployed using this method. And this contract -- this template is in place for all of our U.S. contracts, so very, very positive. The second thing is the HomeServe vendor loan note. So this loan note, GBP 6.4 million came from the original purchase of -- when Ondo bought LeakBot from HomeServe in March '22. It was part of the overall consideration. It came alongside HomeServe's shareholding in the business, which is currently 12%. And there was a cash payment, which is all documented in previous accounts. And what we've done -- what we've basically done is renegotiated the deal with HomeServe. We've extended the facility by an extra year. That's enabled that the first principal repayment could be pushed out another year. And so the first repayment is due in March '27. It's about GBP 1.8 million in the sort of medium term in the period to March '27. And we've also agreed an additional roll-up of interest for the year to March '26. So that's another point, about GBP 900,000, GBP 800,000 to GBP 900,000. So why have we done this? Well, a, it's a good thing for the business to do, just, again, coming back to the general principle of optimizing working capital. But we've previously been told by investors that the loan note repayment terms were a concern because the first repayment was March -- 31st of March '26. They said it was a concern. By doing this, we've completely removed that concern, and it's an overall benefit of, say, of about GBP 2.7 million to the 31st of March. And it also means that we further moved the obligations under the loan note into where we expect to be heavily cash-generative. That means that we can fund that loan note out of our future obligations -- meet our future obligations from our traded revenues, again, without any need for any further financing from shareholders or anywhere else really. So those 2 things. So we now think we've got a solid base with the loan note. The loan terms, completely happy with those, and the ongoing business model doesn't constrain growth at all. And if anything, it's a cash positive. So we're pleased to get that -- very pleased to get all that done, and yes, alongside all the business development. And yes, so I think, rather than explain it to you anymore, I'll hand back to Craig.

Thanks, Kevin. And I'd like to -- in front of all our guests on the call, just to say well done to you, because that was a really good job that you did on that renegotiation. And yes, just -- so to -- underlying the point, those 2 things are just super important because it means, with that repeat prepayment structure, it means our growth is funded by our customers. And with the great work that Kevin has done there on the loan note, it means that we can meet those obligations from our future trading revenues. So in summary then, we're really at an inflection point driven by the United States. We've proven out the products. We've expanded now into 18 states on the back of that initial success. And we've proven that other partners will immediately follow as a market leader expands. The results are largely driven by Scandinavia, our revenue up 42%, the customer base up 36%. But as the Chairman said in the interim statement, we do expect, quite quickly, that the business -- the axis will shift towards the U.S., where they will become the majority of revenues, the majority of registered customers, and are very nearly already the majority of the addressable households under contract. So addressable households under contracts grew by 128%, and that really was already driven by the U.S. And those changes in the working capital profile really set us up well for success. We see EBITDA-positive trading in sight in the second half of 2025 with no further funding required for us to get there. So that's the end of the formal presentation. I think we'll go now to the Q&A. So thank you for some of the questions that have already been pre-submitted. I believe it's open. So if anyone wants to submit a question or they thought of something as we've been talking, by all means, please submit a question. Paul, can I just ask, for some reason, I can't see the question [indiscernible].

I was going to say, you're stealing my job. [Operator Instructions] If you don't mind just reading out the question where appropriate to do so and either taking it or pass to Kevin, I'll pick it up from you at the end. Thank you.

Very good. Okay. So in no particular order then, we'll just go through some of the questions that have been submitted. I can see loads of new ones have come in, so we'll try and give answers so that we can get through as many as possible. So one of the questions is, a while ago, we announced a fully funded 12-month pilot with the venture and innovation arm of IAG in Australia to develop a solution for the Australian market. Can you advise the current status of the initiative? Will this lead to new markets? So that kind of R&D project has been going well. We've run over a year, but it's still fully funded, so we're carrying on with the project in Australia at the moment. We think we've figured out the technology. So this is -- the difference in Australia is that the stop tap of the supply line outside of the property on the exterior wall. So we tested a few different versions. We found something that works. We've actually filed patents on that technology because it works in a slightly different way to the existing product. And we are excited about it because not only is it relevant for the Australian market, but any kind of hot climates where you have the same construct where the stop tap is outside, we think it will work. And it might possibly have other applications as well where there isn't a current solution, for example, in apartment buildings. So more news on that to come. It's very exciting. But on the flip side, as we've already done this before, we also know it takes a lot of time and effort to turn something like that into a mass-manufacturable product. So it's one for kind of later down the road, but it is nevertheless a really interesting product. As we move towards the patents getting published, we'll reveal more and tell you a bit more about how it works. But at the moment, that's confidential. Another question. You said that -- in the announcement about factory capacity, you said that there were multiple reasons why you're increasing manufacturing capacity. Have all the reasons now been revealed with the recent announcements? No is the answer to that question without saying anything else as to why. So no, it's definitely not. You haven't seen all the reasons why we decided to do that. Can you advise if consideration has been made to list within the U.S. at some point in the near future? Kevin, do you want to answer that one?

Yes, we have started to look at it, but it's not -- there are obviously other requirements, but it is something that we looked at, but no plans in the immediate term at the moment.

Thanks, Kevin. One question, I think we've answered it. It was about how are the deals structured? And do you get a prepayment on the second deal? Or is that just on a $5 per month basis? So I think we've answered that, but just to underline, each order under a master services agreement follows the same construct. There's a prepayment on the first 12 months' fees, and then it goes to $5 a month and they pay cash on that basis. But our next order is triggered as soon as the devices are installed and we get another prepayment. So hopefully, that's now clear. What progress has been made with dual billing across insurers and water utilities? So there's definitely something in this. I think the thing that I've learned is sometimes myself and the management team are impatient for things to happen quickly. And then when they don't happen quickly, sometimes we think -- we kind of assume it's not going to work and then things have a habit of coming back around and surprising us. So I think water utilities might be in that category where I think there's a lot of promise in that sector where the leak has been proven and a couple of water utilities have tested it to reduce a lot of leaks. Things seem to be progressing very slowly, a lot slower than we would like, because we thought, well, obviously, we should just stick to our core market with insurers. But things are progressing quietly in the background. And I think there is interest from the water industry, and I think you'll see more in due course. And I do think there's something in this model where the same house only needs one LeakBot and only needs one plumber to come, but delivers 2 different benefits for a water company on the water-saving and for the claim-saving for the insurer, whoever the home insurer is. So yes, we still think there's something in that model. More news to come on that in due course. One second, I'm getting confused on where we are. At what point does production get switched to the U.S. for contract fulfillment? Kevin, do you want to answer that one?

Yes. I mean in terms of the -- so obviously, we have looked at U.S. and A [indiscernible] have facilities in the U.S. But at the moment, we're quite happy. We've got -- we have enough capacity in the U.K. Actually, in terms of the product, a lot of the actual component parts are actually U.K. manufactured, so it doesn't necessarily mean that you would move to the U.S. immediately, but it is something that's heavily on the radar. We have a plan that we could set up a U.S. facility. But it's a U.S. facility as it's required.

Okay. Do you think there might be any mileage in offering a lower-cost service without the plumber or repair element to enable deeper market penetration? The short answer to that is no, I don't think there is. And the reason for that is the reason why insurers buy our solution is because it reduces the claims. And the reason why we reduce the claims is because we actually send a plumber to go and fix the root cause of the problem. Offering the sensor without the plumbing service, the reason why we don't think that works is because homeowners, if they can't see a leak, they tend to be skeptical as to whether there's any -- whether a leak exists, because if you can't see it, you just assume, oh, maybe the sensor is just -- it's a false alarm or something like that. So that's why we really think it's important to offer the plumbing service as part of the proposition. Now, do we always have to provide that ourselves through our own employees? Not necessarily. We could do that through different models as we scale. But what we found works right now is that we employ the plumbers. They turn up in a LeakBot uniform. They're trained by us how to fix exactly this type of thing. They gather the right information in the home. And the key insight really is that we don't need that many plumbers to service the units. At the moment, the ratio is about 1 plumber for every 7,000 devices installed, and that will only get more efficient over time. So we think that's the model that works for now. Selective have expanded into 4 of the 16 states where Nationwide are rolling out. What stops Selective expanding into more? I think they've just gone into the overlapping states where they've got kind of a half-decent number of customers. So I think that is just the degree of the overlap basically is the answer to that question. There was some indication of the size of the second Nationwide order in the [ downgrade ] note. Does the upfront payment for each rollout limit the size of each order due to the amount a customer is willing to pay upfront? Or is there just a slow and steady ramp? Yes. I think the assumption in your question is correct, that there is -- the MSAs are set up so that you can execute multiple orders. So they'll execute an order. It may well be that the order is fully used up in a few months and then it triggers the next order. And that's -- if you take a similar solution like Ting that prevents household fires in the U.S., that's in 2 million homes, that's exactly how their order flow has gone with partners like State Farm, where there's just been repeated orders of 25,000, 50,000 at a time. So I think that's just how it will go. I don't think the cash prepayment, honestly, is a limitation with the insurers. They seem like -- a 7-figure number seems like a big order to us, but that's not a big-ticket to procurement payment to these absolutely giant American corporations. So I don't think it is a limitation. How long do the batteries last? Kevin, do you want to answer that one? And is it easy to replace them?

Yes, I'm not going to do a demo live on a webinar, but you click the front off and you just click the batteries in and click the batteries out. It's very easy, 2 AA batteries. But yes, the -- I think the battery lasts on a deployed LeakBot 3 to 4 years. It does -- it slightly depends on the distance from the router, but there's -- we have continual ongoing work to basically optimize how the device talks to the platform and to extend the battery life. But yes, it's a solid 3 years, if not a bit more. But they're very easy to -- the batteries are easy to replace. You just click the front off, replace it and it's done. And if I can do it, anybody can do it.

Yes. And the statistics are very good as -- customers replacing the batteries when they do run out. And also, our software guys are always making clever changes in the background to elongate the battery life on the service side as well. I think we might have answered this question, but it made me smile anyway. You would be pleased to know that, as the share price reached 30p, I am now out of hiding. And my share club would like to know more detail about the plumbers, who pays for them? Are they self-employed? So hi, [ Alastair ], I think I know who answered this question because I do remember one of our shareholders being particularly aggrieved at recommending an entry point and then the share club all have been cross with him when the share price went lower. So I'm very pleased that your share club are now happy with you, Alastair. I think we might have answered your question already a few moments ago as well. Okay. So let's have a look at some of the ones that have come in while we've been talking. Are there plans to monetize the vast amount of data that's being harvested, for example commercializing APIs? A question from Rob. So that's an excellent question, Rob. So we do have a huge amount of data that we are collecting. And you'll notice that our business case, the way that we talk about it to insurers is all about the immediate return on investment that we can deliver by preventing claims. However, as our partners get more mature and they have more data, it's clear that you can start to use that data in other ways that could drive value for insurers. One of our U.S. partners has integrated the APIs on our products directly into their own system. And you can see, over time, how that data can be very relevant in terms of gauging and pricing risk. So I think there is more to come on that. I think it's in early stage. We haven't -- it's not something we charge extra for at the moment, but that could be the way that things evolve over time.

Probably just to add to that, we do have the commercial gateways to be able to do that. So the investment -- the tech investment has already gone in.

Yes. [ Carl ], do you have other products in the pipeline? Are you looking at deploying LeakBot in other regions? So other products, I think we're always evolving the product, improving the product from a software point of view. There are other software products that we're working on all the time, especially ones aimed at the insurer, some of the APIs that we're talking about, some of the dashboards and the reporting tools that we use. In terms of other regions, the product has a global relevance. The reason why we stick to those 4 markets at the moment is really just a strategic choice to do with resources and management bandwidth. It's not a kind of pure -- a tech pure play insofar as you could just launch an app on an app store anywhere around the world. What we find is, to go into a new market, we need to really understand the local -- the nuances in the local plumbing, and we need to be able to set up that plumbing service. So that's why we don't lightly go into a new market. But over time, absolutely, lots of the European markets would make sense. Canada would make sense. Our Chairman is excited about Japan at some point. So we will get to it. And the platform that we've created now and the success, especially driven by what's happening now in the United States, will absolutely create a platform for us to expand internationally. How does your product compare to the Grohe Sense Guard, and not just from a price point? So the Hansgrohe product is a kind of big plumbed-in system where you cut the pipe. There's lots of these variants -- variations of the same thing. So it plumbs in and then it will detect a leak on the system. So I don't -- I haven't got the exact stats on the Grohe one to-hand. But when we compare the LeakBot system to systems similar to that, they're normally a similar kind of efficacy of detecting the leak. So the difference is all around. Is it part of a scalable solution that fits with what an insurance company needs? So the Hansgrohe solution in the question -- that was mentioned by [ Lindsay ] in the question, the last time I checked, it's about EUR 500 for one of those systems, and they require a professional plumber to come and cut the pipe. So it's very difficult, certainly, to give one of those away for free with a free install. And then, if it detects a leak, they still haven't figured out anyone to go to the property to actually find and fix the root cause of the problem. So it becomes a very niche thing that a homeowner -- you would have to have a very big house for that to make sense, to go spend EUR 500 or EUR 600 on a system like that to hopefully get some kind of discount on your home insurance. So the thing that makes LeakBot unique is the fact that it's a small, low-cost sensor, clips onto the pipe, doesn't need a professional installation, but is as sensitive as those types of systems at detecting a leak. But it's low-cost to the point where it can be bundled in a full end-to-end service that we provide that includes a plumber actually going out and fixing the root cause of the problem for much less of a fully loaded cost than what a system like that would cost. So that's really the point of difference. How do you foresee the pace of monthly rollout accelerating over the next 12 months? So I can't answer that, [ Christoph ], directly because it would be a forward-looking statement.

How about the capacity?

Yes. Well, let me think. Yes. So I think you can probably read that from multiple angles. You can read it in the number of deals that we've signed recently. You can see it in anyone who's got access to the market broker forecasts. We'll see what the market expectation is from an analyst point of view. You can see the fact that we've increased our factory capacity recently. And the other way that I can answer that question is day-to-day in the team on the inside of Ondo, everything that we're talking about is how do we execute well through this period, making sure we've got enough stock in the right place at the right time, making sure we've got the right partner inserts that go in the box, making sure we've got enough people to answer customer queries, plumbers in the right place, that we can handle all the interactions with all the various partners to report on? So I think there's a huge amount of excitement in the team. We feel like we've been working for years to get to this point. But the thing that keeps us all awake at night at the moment is making sure that we can execute well through this period of growth. So hopefully that gives you a kind of flavor without giving you an exact number. How are addressable households targeted by insurers in order to drive registered customer growth? Okay. I've noticed a couple of questions that are similar to this. So basically there's a few different ways. So I'll try and give you -- we haven't got a lot of time, so I'll try and give you the quick answer. Historically, what partners have done is an opt-in e-mail. So they e-mail all their customers, or a cohort of customers, and say, would you like this? Is it now included as part of the policy? They click the e-mail and then we send you a device and then you download the app and then you can access the plumbing service. We typically get 10 -- depending on the partner, depending on the geography, 5%, 10%, sometimes 20% take-up rates on those types of opt-in e-mails. So the degree of penetration is often down to the partners, how programmatic that is and how often they repeat the campaigns to drive take-up. We've had partners get to a 20% penetration, 40% penetration quite quickly. We've had other partners where the penetration has been a lot lower because they've sent out one e-mail a year. So it kind of depends on the insurer's kind of marketing plan in that degree. The things that we've seen recently is that we can accelerate this is something that we call autoship, which is where we send an e-mail saying, this is about to arrive in the post, click here if you don't want one. And then we just send them in the post. And that's exciting because we can distribute a lot more devices a lot quicker. But we always test it, and we're quite cautious with it because we've had really varying degrees of success with the installation rates. Sometimes, it doesn't work at all. We've had other examples where the installation rate can be higher than an opt-in campaign. So we're always experimenting to -- and that's a key focus, is how do we drive that penetration within a partner quicker? Ondo is in the early -- I think we're on the hour, aren't we? I'm sorry, because there are so many more questions that have come through as we've been talking.

Do you want to keep going if we're allowed to?

I don't know. What does the...

You can. If you want to carry on, you can. Though, of course, you can review all the questions post the event and type responses back as well, so entirely up to you guys.

Well, I want to be respectful of people's time. But why don't we do -- we'll do a couple more questions, and then we'll try and answer everything. We'll try and come back and answer on all the things, and we'll give written answers after the call. So Ondo is at the early stages of fulfilling its promise, must surely be a tempting target for private equity. How will the Board prevent a takeover over the next 2 to 3 years? Kevin, have you got any bright ideas on that?

I think we just keep -- we keep going as we are. I mean, there's quite a reasonably strong investor base in terms of the management -- and the management, a few institutions and some other -- and obviously, a lot of very positive retail shareholders. So we would have to review everything. Everything has its merits. But I think, as long as we keep going, we just keep driving the price up. There's another one in there that says -- that I just saw that [indiscernible]. What would you do differently if you weren't cash-constrained? Well, I'm not cash constrained. So I'll just keep doing more of the same. I think that was the key point of the working capital optimization discussion, is that we don't feel that we are cash-constrained.

So one very quick one, I would like to answer this one. Do you have any update on the G4S trial? It says in Sweden. It was actually in Denmark. So this was a trial where we -- it was a security company, and we did a trial to see if they wanted to basically use insurance companies as a way to drive leads. So I can indirectly answer that by saying there was a recent announcement, within the last couple of days, of a new Danish insurance partner. That was the outcome basically of that trial. So it didn't quite go in the direction that we initially thought, but it led to us eventually signing the second-largest home insurer in Denmark.

Another one there, [ for you it was ]. Is there a provision for inflation in subscription prices incorporated into the contracts? Yes, to keep it simple.

All right. So I think -- well, let's end it there. Unfortunately, there's -- thank you for everyone's interest. There's an absolute ton of questions on here. Let's do one more. That's a good one. You're only now 1 month on from the ITC conference in Vegas. What has follow-up been like? Has anything happened that you wouldn't have been able to predict before attending? I think just the -- I mean, obviously, the prediction and the goal of going to things like that is because we're trying to drive the momentum with the U.S. market, but that absolutely is the thing that's happening. So yes, it's going as planned. We've got a really interesting pipeline in the U.S., multiple insurers, some of whom are in the top 10, the top 20. And some of these deals are -- we're not talking about months and years away from hopefully coming to fruition. So we look forward to being able to disclose some more details in due course, but the U.S. pipeline looks good.

Do you want to look at 52 or not? Yes, probably can't. Yes.

We'll talk about that soon, but let's talk about it when we can properly talk about it.

Yes.

I guess, on that note, guys, thanks so much for addressing so many questions from the investors, and thank you to everyone who submitted those. As Craig said, the team will be able to review those questions, and we'll get responses back to you on the Investor Meet Company platform once the guys have had a moment to review them. But just before redirecting the investors to providing their feedback, which I know is particularly important to you and the team, Craig, if I could just ask you just for a couple of closing comments, please?

Well, I think we've covered it all in the presentation, but I just wanted to thank all of our existing shareholders for their level of engagement, their level of support. Thank you for backing us on the open offer back in May. And I hope you've been pleased with the progress that we've made so far and are excited about the future. Certainly, the sense of excitement among the team is palpable because we really do feel like we've cracked this, and we've got a really exciting opportunity in the coming months to create a really valuable and really interesting success story of a U.K.-based tech business. And we look forward to being able to continue to execute that and update you on the next set of results in due course.

Fantastic. Craig, Kevin, thanks again for updating investors today. Can I please ask investors not to close their session. You should be automatically redirected to provide your feedback in order that the team can better understand your views and expectations. It will only take a few moments to complete, and they're greatly valued by the company. On behalf of the management team of Ondo InsurTech plc, we'd like to thank you for attending today's presentation. That concludes today's session, and good morning to you all.