The Alumasc Group plc (ALU) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to the Alumasc Group plc Annual Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it is appropriate to do so. Before we begin, we would just like to submit the following poll. And as usual, if you'd give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to CEO, Paul Hooper. Paul, good afternoon, sir.

Good afternoon. Thank you very much. And good afternoon, everybody, and welcome to the annual results presentation of the Alumasc Group plc. I'm joined today by Simon Dray, our Group Finance Director. We have in front of us the presentation. And within there, we have 2 introduction slides. The first sets out how sustainability and strategy are driving future growth, and the second one is summarizing the environmental growth drivers behind each of our 3 divisions. These will be covered later in the presentation. So just really a summary here. So we will start the presentation on Page 7, and this is covering the highlights. And this is the delivery of the strategic priorities that are driving the market outperformance that we have. And our revenue in the year grew by 13% to just over GBP 100 million. And that was against a very challenging end market. The conditions were not that brilliant. The underlying PBT grew by 16% to a record GBP 13 million. So we're pretty pleased with that. We acquired ARP, which just came in really for the second half -- our second half year, and we benefited from that across those 6 months. We expect further synergies to come into FY '25, but the acquisition itself has been performing very well, and it sits within our Water Management division. We had a strong cash flow performance of 120% operating cash conversion, and we have a strong balance sheet that gives us firepower. Our proposed final dividend is ahead by 6% to 7.3p, and the full year dividend, plus 4% to 10.75p. How did we achieve this? It was really through the successful execution of strategic and commercial priorities. So although the U.K. construction market was down by 2.9%, the organic revenue growth within Alumasc was 6.5%. So we outperformed the market and we grew our underlying operating margin by 50 basis points to 14.1%. Now our target is in the 15% to 20% range, so we're knocking on the door. 80% of the portfolio is aligned with strong environmental growth drivers. We've had further progress, which will come on to our net zero initiatives. There's significant headroom to support future growth. And yesterday, we announced the closure of our Dover site with its movement into our Wade facility at Halstead in Essex. And this follows a very similar process to when we moved our Slotdrain business into there, saving around GBP 900,000 3 years ago. And this particular move would actually save in the order of GBP 800,000 for our covers manufacturing. So there is a constant focus on efficiencies, reducing the number of sites, which will be now down to 5, and all of this helps our performance. We've got a clean -- clear line of sight on delivering growth ambitions. And this will include the continued outperformance of the U.K. construction market. Much of our improvements have been through self-help, and this margin growth demand through demand recovery will also help. So if we stand back and summarize this, over the last 5 or 6 years, we've performed pretty well, we feel. All divisions are ahead in this year under review, and we expect a market recovery coming into 2025. And with the efforts that continue to be made in all areas to improve margins, to improve sales, et cetera, with an uplift in the marketplace, which we haven't had for a while, we expect an acceleration of this performance with an increased drop-through from it. So if we move now to Page 8. We have been outperforming the U.K. construction market. We have a couple of charts here that show that it's been a little bit grim really in '23 and '24, but particularly for the housing outputs which were in negative territory here. There's been a lot of pressure on public finances, political and macroeconomic uncertainty, and it has subdued the market. Now also, inflation, high mortgage rates, particularly for house construction, has had an influence. And those starts have fallen by 17.9% in 2023 and forecasted to fall by 11% in this year. But we all know that the latent housing demand out remains strong. The government -- the new government appears to be determined to increase the number of houses being constructed. So we see an improving outlook, and that will be through many factors, including speeding up local planning, and it's starting to happen in areas, anecdotally. Interest rates have begun to be cut, and those obviously will improve mortgage rates and that leads to further demand. Sustainability drivers remain strong. And legislation, we love legislation, that usually helps us with our launch of new products. And there are things like the Future Homes initiative and Document L, which is focused on energy, Document F on ventilation and O on overheating. And these are all areas of great interest to us. So if I may, I will hand over to Simon to cover the financial review now, please.

Thank you, Paul. As Paul mentioned in the highlights, FY '24 saw group revenue increase by 13% and underlying profit before tax by 16%. This growth came from both acquisitions and from organic growth. ARP contributed 6.5% to the growth in revenue and 5.5% of the growth in underlying profit before tax, after interest on the acquisition consideration. And we also saw a 6.5% organic revenue growth and 10.6% organic profit growth. Good cost and price discipline, so gross margins is 130 basis points ahead of FY '23 at 38%. Underlying operating margins were also ahead of the prior year by 50 bps. This was a result of both the increased volumes and also the investments in capability, which are improving our manufacturing efficiency. The operating margin of 14.1% is progressing towards our medium-term target range of 15% to 20%. Underlying profit before tax was GBP 13 million, which is a record for Alumasc. After tax, which -- the rate of which increased in line with the higher U.K. corporation tax rate, underlying earnings per share was just under 8% above the prior year. And we propose a final dividend of 7.3p to take our full year dividend to 10.75p per share, a 4% increase on the prior year. And this has covered 2.5x by earnings, in line with both our progressive policy and our desired dividend cover range of 2.5 to 3x. Moving to the profit bridges and revenue bridge. In the first 6 months of ownership, ARP sales were GBP 5.8 million and operating profits were GBP 1 million. After interest on the acquisition consideration, their net contribution to profit before tax was GBP 0.6 million. This year, price inflation was not a significant factor, most raw material prices were stable or declining. Wage inflation is also reducing and any increases in the year were largely offset by efficiency improvements. Accordingly, the remaining growth, GBP 5.8 million of sales and GBP 1.2 million of profit, was all organic. And pleasingly, all 3 divisions this year contributed. Coming to the cash flow performance this year. There was a GBP 900,000 inflow from working capital despite some pressure from our organic growth rate and also some disruption due to the Red Sea crisis in terms of both shipping costs and times, all of which were well managed. Our underlying cash conversion, underlying cash generation before nonunderlying cash flows, was 120% of operating profit compared to 105% in the prior year. And these strong cash flows allowed us to continue to make investments that underpin future growth. Capital expenditure was a little higher than usual at GBP 3.6 million. I'll cover some of the larger items later in the presentation. But despite the market headwinds, we've continued to invest in the business. And the net cash outflow to date on the ARP acquisition is GBP 8.5 million, which comprises the initial consideration plus the cash we acquired, less debt and working capital adjustments, and first earn-out payments which we made in January 2024. The final earn-out payment of GBP 750,000 is payable in January 2025, subject to ARP's performance in the year to November 2024, and we've accrued that within these numbers as we expect it to be paid. After these cash flows, net bank debt closed at GBP 7.2 million. And looking at our balance sheet, returns on capital remains strong and well above our weighted average cost of capital, which is an indication of how much it costs to borrow money both from equity and from debt, which we estimate at around 11%. And we retain significant capacity for further investment with our gearing, our leverage at 0.5x, and facilities committed through to August 2027. And the position of the group's legacy defined benefit pension scheme, calculated under IAS 19, has improved, moving from a GBP 4.3 million pretax liability at June 2023 to an GBP 800,000 surplus at June 2024. This reflects the work we've done with the trustees to both improve and to derisk the funding position. Annual contributions remain at the GBP 1.2 million, a level agreed with the trustees at the last triennial valuation. And our next formal review is due in March 2025. We're continuing to progressively reduce the scheme's volatility, particularly to fluctuations in bond yields and to plan the [ endgame ] scenario, which takes into account the needs of both pensioners and shareholders. And finally on finance, I've set out here the allocation priorities for the group surplus capital. We aim to maintain debt leverage at a prudent level, which for us means below the level of 1.5x EBITDA, and we prioritize organic growth where we get the best returns. We also seek to provide a progressive return to our shareholders, increasing dividends with profit, while looking to maintain a 2.5 to 3x earnings cover. And we'll continue to seek M&A opportunities where they meet our acquisition criteria. We look for bolt-on businesses operating in our existing markets or closely adjacent. And I'll now pass back to Paul for the business review.

Well, thank you, Simon. As Simon has touched on, we have 3 divisions. And actually, each of those, they've all been very encouraging because they've all moved ahead of the prior year. And we will start with the Water Management one, which is the biggest division, and this grew its revenue by 21% to GBP 48.3 million, and it grew its operating profit by 31% to GBP 7.6 million. Underlying operating margin percentage grew to 15.8%. And we touched on, we had the benefit of the 6 months of contribution from ARP. This has been a great acquisition. It's been very well run. It fits in well. We have an integration team that it's been finding a lot of synergies that will mainly benefit coming into the new financial year. In terms of organic growth in this division, the revenue grew by 7%, overall operating profit by 16%. We had a strong growth in export sales. We grew by GBP 5 million. We doubled the exports to GBP 10 million for the group. Most of this came out of this division. We put representation into Colombia and Latin America. We're coming into the Philippines. We put it into Dubai, and India is to follow. And we've had sales really throughout the world, improving into Peru, Colombia, Mexico, Dubai, New Zealand, Australia, other parts of the Middle East. So it is growing and we want to keep that growing further, and we'll continue to invest in sales [ performance ]. You may recall that we've had a significant airport order at Chep Lap Kok in Hong Kong. And embarrassingly, this has run across a couple of year-ends because the product hasn't been pulled through yet. But I'm very pleased to say that it's been started to be pulled through into this new financial year that we've just come into. Overall, U.K. sales in this division have been resilient, with strong access cover demand mainly from government bodies helping to offset reductions on the drainage side, and project delays of Slotdrain which are now starting to happen. We've touched on the Dover site closure, which is planned for the end of this calendar year and manufacturing will move to an automated state. We've invested in 2 significant [ CNC ] machines, which will very much assist in this, and that will be relocated to the Wade in the Halstead facility. And we anticipate GBP 800,000 of savings from it. So this is an opportunity, all of these actions, to accelerate our growth further. Moving to page -- sorry, the Building Envelope page. We're moving, and you can see that the growth in the revenue here has been 9%, GBP 37.6 million, and we grew the underlying operating profit by 12% (sic) [ 13% ]. Now you may recall me saying that we expected an uplift in the second half year, because in H1 we've grown the top line. But we're slightly down on the profit. Only slightly. And now this, as I anticipated, has come back. There have been some good activities there. 9% overall revenue growth, resulting in a 13% operating profit. So we've been taking market share here and we've been hiring some very accomplished technical salespeople and giving good customer support, and this has really benefited the business. And we've also been involved in sustainable roofing systems, such as carbon-absorbing membranes. The brand Olivine has been very helpful in that respect. And then we've launched bio-solar systems with a partner who supplies the solar side of that. We're doing the bio -- as in the green, the green area actually helps to keep the photovoltaics cooler and they function, as a result of that, much better. We have, in terms of strategic focus, long-standing relationships with specifiers, surveyors, multisite property owners, which is an evolving theme. We are now getting more of these as they customers. And that's great because you get a line of sight into 1 or 2 years further forward, where properties need to be refurbished and then we can really benefit from that. Contractors and supply initiatives are also very important. It's mainly high-end specification work with low carbon systems. And we have a reputation for excellent customer service, and we have very good warranties. So let's move into the final division, which is Housebuilding Products. And this was a remarkable performance really because we've touched on the reduction in activity of 18% more or less in '23, 11% reduction forecasted this year. And the team has managed to achieve a flat revenue. It's very slightly ahead, but that's a huge achievement in these circumstances. And then to also lift its operating profit by 9% to GBP 3.8 million is a great effort. And this was partly assisted by a product that I'll show you shortly, which is a tile vent, that took it into new distribution area. It's been very successful. And in 2 years, we were reckon it's taken around a 10% market share. It's done very well to bring its operating margin up to a record 25%. And this has been through efficiencies, cost controls, making sure that costs get passed through. And giving outstanding customer service. So if you order by midday, you can get the shipment the next day. And we've got a record of shipping out at least from the plant of 100% OTIF. There's been a continued investment and focus on sustainability. And we will continue to automate, bring in new products. And we have a good and complete external sales resource now. It's worth mentioning that Timloc is the first carbon-neutral building products manufacturer in the U.K. And several of the large merchants have invited them along to discuss on how they achieved it. So the business is well placed to benefit when housebuilding activity recovers. It's done an amazing job to bring its profit ahead against such a background. And when we have the volumes assisting and picking up again, which we anticipate into 2025, this will be a significant event for the Housebuilding division, Housebuilding Products division. And we should also remember that it's got around 50% capacity, so this means there are further opportunities within that division. So moving on into our strategic delivery. And the first slide that we're going to cover on this is championing sustainable building products on Page 21. And Simon is going to cover this, please.

Thank you again, Paul. First and probably our fundamental strategic pillar is championing sustainable building products. Over 85% of our sales derived from products which address our strategic environmental priorities, which are underpinned by long-term growth drivers around building decarbonization, urban water management and urban biodiversity and occupant wellbeing. In doing so, we also seek to minimize our own environmental impact. We use recycled materials. Our products generally have the highest recycled content in their markets, to create products they themselves recycle at the end of their life. Coupled with their durability and low maintenance requirements, creates products that are resourced and energy efficient. And we continue to invest in our net zero pathway. Our greenhouse gas intensity, measured per million of revenue, reduced by a further 4.7% in the year. This is reduced by over 70% since we began measuring it in 2018. And interestingly, this progress has tracked our operating margin improvement, which back in 2018 was mid-single digit and is now up above 14%. Our medium-term targets are being recalculated for the addition of ARP, and we'll get them accredited by the SBTi once they complete. And we now have 4 Scope 3 emission calculations covering our entire value chain from sourcing to delivery for around 75% of the group. We'll use this data not only plan on our net zero pathway, but also to inform our decisions around product design, sourcing and distribution. I'll pass back to Paul now for the sales growth.

Thanks, Simon. Another important part of the strategic delivery is accelerating sales growth, which has assisted us so far and we're going to continue to do that. And there's a photo there of the InVentive new profile roof tile vent. It's been such a success in the Housebuilding Products division with 100 SKUs, 5 colors, and this has assisted very much. A great -- an example of the great product launch. If we take the sectoral outperformance, U.K. construction market is down by 2.9%, but we've grown by 6.5%. So we have outperformed. The U.K. is being resilient in terms of sales, and we've had strong overseas sales growth. The significant long-term drivers are the building regs, et cetera, legislation, Document L and F that I touched on earlier, all play a part, as does the fact that we've got a housing undersupply, aging U.K. building stock that in cases needs to -- in some cases needs knocking down, other cases leads to refurbishment. And the legislation will really play a big part going forward as well. And we will target export opportunities into certain markets. So the growth initiatives that are targeted will be assisted by the investment that we've already made in technical sales capability. New product launches into adjacent markets, of which the profile roof tile vent is an example, and the expansion of the geographical sales team which is very important as well. Now we're running with 3 sites left. And I'll cover a further strategic delivery one, very key. Margins, we love margins. We love improving them. And actually, if we take the last 5 years, we have improved the gross margin for the group's companies by 4 percentage points. Very important that we continue to do that, and we have been successful over that period of time. And we're getting towards our target of 15% operating margin, we're at 14.1%. It will be driven further towards that by volume growth and, hopefully through it, the efficient and flexible manufacturing capacity and leveraging what we already have invested in. The future improvements will be driven by the market recovery, which we expect next calendar year. Export sales growth, increasing that. We've touched on, we've already doubled it in the year under review. ARP synergies, not to be underestimated, the value of those coming through. And it takes a while because you follow -- move from some of the contracts you may already be in to more beneficial contracts. NPD, without a shadow doubt, great key area, and we need to be doing more of it. And then new automation of the access covers manufacturing will take place. Because we planned it, we've got the equipment, it's already being tested out and that is going to be a good opportunity. Plus it will bring a higher quality product that will be better appreciated by -- more appreciated by our customers. As always, further efficiency gains will be sought, and that goes without saying. So if I may, I'll ask Simon to cover the final strategic delivery slide, please, which is value-enhancing investments.

Thank you. Our strong financial position, as mentioned, allowed us to continue to invest in future growth, as well as investing in our organizational capability, particularly sales, marketing and product development. We spent GBP 3.6 million on capital items in the year. This included around GBP 2 million of investments at our Halstead site in buildings, machinery and tooling to automate the manufacture of our access covers. This is currently a largely manual process taking place at our site in Dover. And we, today, announced that the planned closure of this site scheduled for December 2024, which will save approximately GBP 800,000 on an annual basis. Capital costs to complete the project of around GBP 1 million is scheduled to be incurred in the first quarter of the current financial year. And site closure costs of around GBP 800,000 this year are expected to be largely offset by the proceeds from the sale of the land and buildings in Dover. And we also invested around GBP 400,000 in our ERP systems. ERP, or enterprise resource planning systems, are the accounting systems that also integrate our purchasing activities, our warehousing, our manufacturing, and our selling and distribution. We've got about 80% of the group now on a common ERP platform. And as well as planning to move the remaining sites over, we're using the better data the systems provide to improve our customer service and to inform our commercial decision-making. And we also completed the acquisition of ARP in the year. Based on our extremely successful start within the group, we expect to pay the final earn-out in full in January 2025. And we expect synergies, principally around procurement, cross-selling and organizing capabilities, to bring the effective acquisition multiple below 0.5x over the next year or 2. And as I mentioned, we retained significant headroom, around GBP 18 million based on current committed facilities at June 2024, a further investment to continue to underpin our ambitions for the business. And I'll pass back to Paul for the outlook.

Thank you, Simon. And this is our final slide on Page 26, and it summarizes that the medium-term drivers remain strong. Building safety regulations, supportive environment are all assisting. The undersupply of new houses and the age of U.K. building stock, which means some of it will have to be knocked down, some refurbished. We have the capability to exploit further our export opportunities, and we'll continue to invest in that. And we have a clear line of sight on further delivery of strategic and commercial objectives. The higher-growth environmental markets and export potential, we'll be absolutely focused on. We expect further margin improvements from the Dover closure, ARP synergies and investments in ERP and CRM. We'll continue the strong cash flows, and the balance sheet provides significant capacity for other investment, both organically and inorganically. The positive momentum that we finished our financial year under review will continue and has continued into the new financial year. So I'm very pleased to report that. The Board is confident of another year of growth and an opportunity to deliver significant shareholder value as markets recover. So really to conclude, we've had 5 years of consistent growth, mostly through self-help. With the forecast for market improvements coming through in the next calendar year, we anticipate the ability to be able to accelerate our performance. So thank you very much. And we'll now move to questions, I believe.

[Operator Instructions] Simon, Paul, as you can see there in the Q&A tab, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But Simon, Paul, if I may just hand back to you just to read out those questions and get your responses where it's appropriate to do so. And then I'll pick up from you at the end. Thank you.

Thank you very much. And yes, I'll read the first question out, which is asking for an update on the buyout position of the pension liabilities and the group's thoughts on that. I mentioned earlier in the presentation, we had a GBP 0.8 million IAS 19 surplus. Just for those who don't know, that is the accounting method of calculating pensions liabilities. It's not the basis for our funding discussions with the trustees, nor is it representative of a buyout valuation, which is effectively with the cost of paying an insurance company to take the liability on. We're looking at 2 scenarios for the pension scheme. One is around self-sufficiency, which is getting the scheme to a position where it can invest in assets which hedge its liabilities. So it needs -- there's a very little likelihood of further support required from the parent, the Alumasc, and all we would need to cover then is the cost of operating the scheme itself. But that is still on balance sheet. The alternative there is to, say, buy the scheme out. The valuations that we have done, it's very difficult to give valuations at a single point in time because they depend on investor appetite as well as bond yields, interest rates. But the conclusion of the Board, the last time we looked at this, was that it wouldn't represent good shareholder value to look to buy the scheme out. It's one we keep under review. Plan a is still self-sufficiency, but it's not mutually exclusive with buyout, and we'll continue to review the position as the market develops. And we will take action either fully or partially buyout scheme if we believe it represents good shareholder value. So thank you for the question. The next one is from your anticipated synergies from the ARP acquisition, what value was reflected in this year's results? And how much more do you expect to realize in FY '25? Do you want me to cover this one, Paul?

Yes. Go ahead.

So if you recall in this presentation, we had -- we saw the principal synergies from the acquisition from 3 categories: operational, procurement and cross-selling. Cross-selling, we saw limited synergies in the year the year just gone, FY '24. There was some cross-selling activity, but obviously we only had 6 months to start realizing that, but it was starting to happen. Operationally as well, we saw some sharing of best practice. It's very difficult to quantify that, but there was some exchange of manufacturing techniques going on. I think in FY '25, we're going to start to see some of the procurement efficiencies come through. They take longer to realize because you've generally got to exit an existing contract and you've got to wind down any inventory that you hold. But I'd expect to see those start to come through in 2025. And I'd expect to see more of the cross-selling and more of the operational capability potential coming through. If I have to put a number on it, I'll be disappointed if we got less than the sort of GBP 300,000, GBP 400,000 after the synergies in addition to the ARP baseline business, which should help underpin our growth ambitions for next year. Thank you. This one's for you, Paul. How much additional capacity is available for growth in the remaining 5 sites?

It's a good question. We -- it's interesting because I was up at our Housebuilding Products company, Timloc, last Thursday. And I was talking to them about capacity, because we've always said, well, we've got about 50% capacity there if you take the shifts, et cetera. But actually, we've got more than that. Because if you look at the tooling, the tooling can significantly increase the capacity by having the ability within each tool of producing, say, I don't know, 20 rather than 10 components. So there's a lot of capacity that can be put in by adding new tooling, and it isn't all about going on to shifts and employing more people, or running over weekends, et cetera. So we think we've got at least 50%. It will be more. With the Housebuilding area, we've probably got, I would guess, within Water Management, maybe 30%, 30% to 40%. And again, we can run on to shifts. And then it's an interesting one within our roofing side of our -- the Envelope side, because we don't actually manufacture that. And there is, therefore, no capacity constraints with manufacturing, it would be limited to warehousing, being able to technically support customers and sales order entry and all the rest of it. So we believe that we've got fewer constraints there. It would require some more warehousing. But I would say we could easily manage maybe another 20% to 30% capacity there. So we feel we've got a reasonable amount, if needed. Well, it will be needed because we're expecting an uplift in the market, in particular from next year, next calendar year. So we're not -- we don't think we're capacity constrained, and there's a fair bit to run out there before we get into that position.

Thank you. A couple of related questions around M&A strategy, what the broader acquisition strategy is and are there plans for further acquisitions in the near future. And if so, in which areas of the market. So yes, we definitely do aspire to do more M&A. We have capacity to do so, both in terms of the balance sheet facilities and also management and organizational structure, both of which have got capacity to run more businesses. In terms of hard and fast rules, it's difficult to be absolutely prescriptive. We'd be looking for bolt-ons, which means less than GBP 20 million, probably, enterprise value. So consideration pre debt. They have to be operating in something that we are very familiar with. And ideally, ticking an environmental box or slotting into the long-term growth drivers that the rest of the businesses. Areas that we're looking in, within roofing division, I think there's opportunities there to add products to the range to improve their capabilities and their offerings to their customers. Water Management, I think there are definitely some scale and consolidation benefits you can realize within that market. You can also add technology to the -- or further technology to the offering there, and parts of the Water Management systems that we don't currently offer or sell into. And Timloc, I think there's opportunities there to add volumes to -- and more brands into a very successful model, and use the spare capacity, use their know-how and the customer service that Timloc has got to help another business grow as fast as they are. So we're -- I think we're fairly agnostic into which division it might go into, but we have some criteria that we have to be firm on, because we don't want to dilute the portfolio and we don't want to bring a bad one in.

Correct. [indiscernible]

Yes, thank you. Okay. Let's scroll down. A couple of questions around Dover. Freehold property to realize at Dover. Absolutely, all the property that we have in the Dover site is freehold. So there's nothing leasehold to exit there. Are there any legacy liabilities related to cladding from Levolux?

No, I'm not aware of that.

No, we don't believe there's any continuing liabilities from the Levolux business. Cost benefits from the next year with a recent acquisition, can you expand on this? I guess one thing I didn't touch on in my earlier answer, Paul, was around the operational capability side and the opportunities from having 2 sites in Burton Latimer and Leicester.

Yes, it could allow us. We're reviewing that at the moment. So I wouldn't really like to say what we might end up doing. But yes, we -- it's part of the ongoing process and we will have a sensible outcome from it in terms of some specialism. And I know we've had it 6 months, we've got some pretty firm ideas now. But we also spend a lot of time on integrating the sales and also the sourcing and making sure we're going to get some really good synergies out of that. But the manufacturing is one to not be ignored because there are possibilities left to -- but I don't want to comment any further than that.

Okay. And are there any other airport opportunities out there, such as the new Dubai Airport expansion?

Yes, quite a few. Sorry, we must be careful here. There are 1 or 2 very large ones in the Middle East, including into Saudi Arabia. And these are at an early stage, though. And so it could be several years before that they come through. But they're going to be large airports with several runways, and we would be definitely bidding on those and would hope to win at least one of them. So yes, there is -- there are opportunities out there.

Thank you. Very impressed by your hard work and success. Last time I suggested that the market will eventually recognize your performance, and I'm pleased to see it finally does. Congratulations.

Oh, that's most kind of you.

That's pretty kind, yes, sir.

Yes, we've noticed the share price has gone up 13p today. And we're 2.66p when [ we checked ] before we came on this call. So it's moving in the right direction, it appears. And we're getting a bit of recognition for it.

Yes. I mean our job is to manage the business and to make sure we're growing as fast as we can and as consistent as we can. And share prices is a sort of factor of that, it's nice to see some recognition there.

Yes. So thank you very much for that comment, too.

What's the value of the Hong Kong airport contract for FY '25? I think that's quite a tricky one to...

Yes, the overall contract start was GBP 7 million. We had a 10% deposit paid on it. We've come into this new financial year with around GBP 6 million, I think, Simon, of the contract to run. They have started pulling the product in, but we can't say whether it's going to be half of that. We just don't know. It's gone on for several years now. But at least we've made a start. We hope to have some of it come through in the year. But other than that, I can't really say. Can you comment any further, Simon?

No. And I think having sat through 2 year-ends, don't want to guess when the contractors might call off the product. I'm just relieved that they are starting to do so and now we have some volume now.

Exactly.

But it is beyond our control, so it's not one that we can manage.

No.

I think that is it. I think we covered the pension scheme.

Did you say the pension scheme?

No, I think we've covered the last one. I think it relates to the earlier one.

Okay. Fine. Okay.

Paul, Simon, if I may just jump back in there. Thank you very much indeed for addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, just for you to review to then add any additional responses, of course, and where it's appropriate to do so. And we'll publish all those responses out on the platform. But Paul, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that would be great.

Yes. Well, the main comment is to thank everybody for coming on today and for listening to our presentation, for your patience and for the great questions that have followed that. And really, to conclude that we've had 5 years of consistent growth, mostly through self-help. We've improved the margins. We've improved the sales. We've improved the exports. And we're going to continue to do that. We've moved on to fewer manufacturing sites, and we'll continue -- it's a continuous process. There isn't a silver bullet here. It's grinding it out and we'll continue to do that. But I think the difference coming into this new financial year now is that the markets are looking to be improving. And the forecasts are indicating that, from the CPA, et cetera, so we would expect really an acceleration in performance from that background. So I think that's probably all I want to say at this stage other than, again, to reemphasize with great thanks for your interest in Alumasc today.

Perfect, Paul. That's great. Thank you once again for updating investors this afternoon. Could I please ask investors not to close this session, you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Alumasc Group plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.