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

Good afternoon, and welcome to The Alumasc Group plc Annual 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 questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Paul Hooper. Good afternoon.

Thank you very much, and welcome, everybody, to the annual results of The Alumasc Group to 30th of June 2025. My name is Paul Hooper, I'm the Chief Executive. I'm joined by Simon Dray, the Group Finance Director. So we'll start our presentation on Page 4, where we describe the divisions of the group. Sustainability drives our future growth. We have 3 divisions. I'll give a quick description. First of all, the Water Management division, which is involved in water and storm water management. Many of our systems are specified. We manufacture circa 70% of products, 70% are sold to merchants, 30% direct to contractors approximately. Moving into the Building Envelope division, which consists of our roofing systems company. This business gives technical advice, for instance, by taking core samples from current roofs and then advising what the solution is. So this isn't just a distributor. Occasionally, people think it is, but it does a lot more than that. It really is adding value. We supply premium roofing systems from Derbigum, Hydrotech, both global leaders and our own brand, Euroroof plus other brands. We are also involved in other niche areas such as blue roofs, green roofs and bio-solar roofs. This division does not manufacture and it imports its products from Canada and Europe from suppliers who it has had a 35- to 40-year relationship with. It supplies its systems directly to contractors, so no merchants involved in this business. Our third division is Housebuilding Products. It operates under the Timloc brand, which has recently developed by giving an outstanding next-day service and 100% record for on time in full delivery onto the trucks at the plant. If an order is received by midday, it will be delivered often in small quantities next day. And actually, as merchants have reduced their stocks in the last year under some pressure, this has worked very well for Timloc. So above GBP 100 is free of charge into merchants, above GBP 150 on to site. We bought it for just over GBP 3 million 20 years ago, and it makes more than that, as you'll see shortly. So let's go on to Page 7, if we could, please. These are the FY '25 highlights. We outperformed the market again with a record performance in challenging end-market conditions. For instance, in the U.K., the overall construction market moved up in 2024 by 0.5% according to the CPA. And actually, in terms of housebuilding starts, they went down by 29%. That's a big number. So our revenue increased by 13% to GBP 113.4 million. UPBT increased by 9% to a record GBP 14.2 million. And what I really appreciated in this year was that each of our divisions had a record performance. It wasn't just one that was outstanding. 3 of them had record performances, which I think is very healthy. We benefited from the ARP acquisition performing well, and we have further synergies we expect coming into the new financial year. Our operating cash conversion was good at 102% despite the CLK, that's Chep Lap Kok and Hong Kong project, having some payment timing issues, all insured and they're starting to come in. We expect them to be cleared by the first quarter of the new financial year. And we were delighted really that with the pension fund, the requirement reduced to GBP 0.5 million to be put in by ourselves each year to GBP 0.7 million -- GBP 700,000 per annum, big improvement, a reflection of the improvement in that pension fund situation. We have a strong balance sheet with 0.3x leverage, and that gives us opportunities, as you can imagine, including inorganic ones in terms of acquisitions. The proposed final dividend ticked up by 4% to 7.6p, and the full year dividend has increased, therefore, to 11.1p. Moving on to our next page of highlights. We continued the execution of strategic commercial priorities, which resulted in organic revenue growth of 7%. Bear in mind, the overall growth was 13% with ARP. But this was healthy, having organic growth at this level. Underlying operating margin was 13.7%, a little bit down on the prior year due to the mix on U.K. and export revenue, but we're taking actions, which we will come on to, to start to lift that up again. More than 80% to remind ourselves that the portfolio is aligned with strong environmental growth drivers. We've made further progress on net zero initiatives. Simon will cover those a bit later. We have significant capacity and investment headroom to support future growth, and we're ready. We're ready for the turn when it happens. We have a clear line of sight on delivering growth ambitions, continued outperformance of the U.K. construction market and the margin growth through demand recovery and self-help initiatives. Moving on to the final side of my first section here before Simon runs through the financial review. I think it's worth looking at the outperformance of the U.K. construction market. And actually, on the left-hand side, the inset bullet points, as I've touched on the fourth one down there, the private housing starts falling by 29% in 2024 is really not good. And the overall market there was 0.5% forecasted in 2025. Bear in mind, we straddle across 2 calendar years is anticipated to tick up a bit to around 1.5%, still quite low improvements, but at least it's not negative, whereas the Housebuilding output for 2 years has been, as you'll see below. Sustainability drivers remain strong. We expect more resilient demand through the cycle. Affordability is obviously important, mortgage rates coming through. We have had issues earlier in the -- or coming through in -- particularly in the second half year on national planning policy framework, which has been given to local authorities seems to have slowed things down. And the Building Safety Act, which we're all very positive about, but its enactment of the way it's operated has caused some delays. So as I say, the building in terms of legislation, regulations, we like those because normally, we can bring new products in around them, including building decarbonization, urban water management and greening and building safety all give us opportunities. So we like that, and it appears and we'll give examples later as to where they've helped us to bring in new products mainly. So now if I may, I'll hand over to Simon for the financial review, please.

Thank you, Paul. And as Paul mentioned, we had a robust performance against a tough backdrop with organic revenue growth of 7% and organic underlying profit growth of 5%. And that was supplemented by an incremental 6% of revenue growth and 3% of underlying profit growth from our first full year of ownership of ARP. Gross margins were 10 basis points lower than the prior year at 37.9%. Increases at Building Envelope and Housebuilding Products were offset by a reduction in Water Management, driven by mix, where lower U.K. sales were offset by a growth in exports. Their export projects tend to be larger but lower margin than regular U.K. business. And that mix impact feeds through to operating margin, which is just over 60 basis points lower than last year at 13.7%. While improving U.K. sales will sweeten that margin, as we'll discuss later, we've also taken some steps to structurally improve future margins and our medium-term target operating margin range remains at 15% to 20%. Underlying profit before tax was 9% ahead at GBP 14.2 million. Our underlying tax rate was a little lower than last year due to higher profits taxed overseas and our underlying earnings per share grew by 11% to 29.9p. After GBP 1.5 million post-tax non-underlying costs, statutory profit before tax was GBP 9.3 million, 7% ahead of FY '24. The Dover property, which was vacated by the move of covers manufacturing to Halstead was sold after the year-end and GBP 0.4 million of non-underlying profit and GBP 0.5 million of non-underlying proceeds will be realized in FY '26. And as Paul mentioned, the Board has proposed a 7.6p final dividend, which, if approved, will bring the full year distribution to 11.1p, 3% higher than last year and covered 2.7x by earnings. Our revenue bridge shows the GBP 5.7 million incremental contribution from ARP, complemented by organic growth across all 3 divisions. Building Envelope and Housebuilding Products achieved 11% and 9% organic growth, respectively. The Water Management division saw softer U.K. demand, offset by stronger exports, which grew by GBP 4.2 million, somewhere around 2/3 of which was from year-on-year growth in our large contract at Chep Lap Kok Airport in Hong Kong. Our underlying profit bridge shows that the ARP acquisition after attributable interest delivered GBP 0.5 million of incremental profit contribution. Cost inflation was a small drag on profit due to timing, and we expect cost management and other operational efficiencies, together with price increases where appropriate to mitigate this fully next year, including the GBP 600,000 impact from the increase in employers' national insurance contributions and national living wage increases. Volume growth across all 3 divisions delivered GBP 1.4 million of profit after the associated overhead investments. However, as mentioned previously, the higher proportion of overseas sales in Water Management reduced profit by around GBP 600,000 and underlying profit before tax closed at GBP 14.2 million with an operating margin 60 basis points lower at 13.7%. Our cash flow performance was reasonably strong despite receipt of around GBP 1.5 million of receivables from the CLK project falling into FY '26. Our cash conversion, which is a measure of our conversion of operating profit into cash was still above our 100% target at 106%. The Chep Lap Kok receivables, which are fully insured, are expected to be collected over the first quarter of FY '26. And we continue to invest in future growth with GBP 2.6 million of capital expenditure. Just over GBP 1 million of this was to complete the investment in the Halstead covers manufacturing facility, which totaled GBP 3 million across FY '24 and '25. And much of the remainder was to support Housebuilding Products, new product development activities and improving capacity and agility ahead of the anticipated recovery in new build housebuilding. And as I mentioned earlier, we've now sold the vacant Dover site and the GBP 0.5 million of proceeds will be recorded as a non-underlying receipt in FY '26. After payment of the final GBP 750,000 earn-out for ARP, net bank debt closed at GBP 5.8 million. And we continue to create value with strong returns on our invested capital, well in excess of our weighted average cost of capital, which we estimate to be around 12%. And we retained significant capacity for investment. Leverage at June 2025 was 0.35x compared to a covenant of less than 2.75x and our facilities are committed through to August 2027. And as Paul mentioned, we've also concluded our 2025 pension triennial valuation, which you'll see contributions reduced by GBP 0.5 million from GBP 1.2 million to GBP 0.7 million per annum from September 2025. We expect these contributions to get the scheme to the low dependency position, where the scheme has sufficient assets to meet its liabilities and fund its running costs with a low expectation of requiring further contributions from the company. And we expect the scheme to get there at or before 2030. Meanwhile, we continue to monitor further derisking opportunities and we'll take action should they be both affordable and represent value for shareholders' money. And I can pass back to Paul now for the business review.

Thank you, Simon. Yes, we'll start with Water Management, the biggest division that we have. It had a record performance, and it grew its revenue by 15% and its profit by 4%. And actually, our exports have moved to account for 25% of the overall revenue versus 20% in the prior year. We grew the exports by GBP 4.2 million, 44% within that. The majority of the Chep Lap Kok Airport project has now been shipped in. And the other areas of interest and quote activity was very exciting, Latin America. We put a fellow sales guy, very successful person into Colombia, Bogota, and he has come up with a GBP 0.5 million order in Suape Port in Brazil for our Gatic covers and Slotdrains, fantastic achievement. And he's also working in other areas like Peru. You can see a picture on this page of Lima Peru of the Jorge Chavez Airport there. He was a French Peruvian pioneer aviator, sadly killed in his Blériot biplane in 1910 and had crossed the Pennine Alps. But you can see there our Slotdrain has been put into this airport. So this has traveled from Halstead in Essex to Peru to Lima. And there it is with its white cover fully intact, running along the side of the airport. So very exciting. And we've been also doing work in Bogotá, Colombia and Mexico. And there are further opportunities in Chile and further ones in Peru. There are also some military airports that are of interest. At the same time, we have supplied Slotdrain to the big NEOM project, City project in Saudi Arabia. And also defense, we know that's going up as a percentage of GDP in Europe. Well, we've benefited from that because NATO has put an air field into Slovakia, and it's included 12 kilometers of our Slotdrain going into that. So very exciting. And I think there's more work to come through the defense increased spending. In terms of U.K. sales, they had a net increase of GBP 3 million, and this was via a GBP 5.7 million contribution from ARP, but a bit of a reduction, GBP 2.7 million there in like-for-like sales in the U.K. from the underlying business. We had soft demand, particularly coming into H2, some planning delays, which were unhelpful. Margins reduced by revenue mix, U.K. versus exports, where exports having slightly lower margins. And the actions being taken to improve our margins are that covers manufacturing has relocated to Halstead from Dover in December 2024. And we previously indicated we expect an overall GBP 800,000 benefit coming out of that, and we have the contribution from ARP synergies, which we expect mainly to come into the new financial year. Moving on to the next slide, which is Building Envelope, AKA Roofing. This is our roofing company. They did really well here. Bear in mind, it's against the background of 0.5% of growth in the market, while they grew their revenue by 11%, operating profit by 14%. They leveraged investment in technical sales. They hired very good technical salespeople, and they also grew their own as it were. We've had 2 or 3 people coming through from being apprentices and they give great customer support. Some people have said, "Oh, you're just a distributor." Well, as I mentioned earlier, we're not because we're going on to roofs, taking core samples, et cetera, and making recommendations on what products of ours to install. We have also carbon-absorbing membranes. Derbigum Olivine is the brand there, and that's an innovative interesting area. We've been involved in photovoltaics, not actually in the hardware there, but really in terms of supplying the green roofs that we're experts on that go underneath the photovoltaics and actually keep them cool, which makes them operate better. Now relationships are important in this type of business all around with specifiers, surveyors. We've been developing multisite property owners like BT, et cetera, contractors, very key and suppliers. Our suppliers have been supplying us the Derbigum #1 brand on refurb, global brand really and Hydrotech out of Canada for circa 40 years. So these are important relationships, and they will continue as far as we can see. And our focus is on high-end specification work with low-carbon systems. We would say now we can see from checking our competitor accounts as they get put into company's house, et cetera, that we are the #2 player now. The big player in this, which is probably more than double the size of our division here is Bauder, which is a German company. We offer excellent customer service and warranties and there are new areas of interest for us as data centers start to come through, and they're sometimes being put into very cold countries, and we are working with a particular contractor that's been involved in those to supply warm roof using our own brand here, which doesn't limit us to the U.K. and that's Euroroof, which was a clever bit of branding because that's the name of a company we bought around 30 years ago. U.K. contractors know the name, but we've now converted that into a brand of product of supply to the marketplace. But that's also being used for potential export sales. I don't want to overhype it, but it's the start of some interesting areas where data centers are being put in. And we have a warm roof solution that can assist in that area. So finally, our third division shouldn't really be called third division, as I always joke, it's premier league, really this one, Housebuilding Products, look at its margin there, 25.9%, and that's grown from 25.3%. But more amazing to me anyway is that against this 29% new start of houses reduction in 2024, it's grown its revenue by 9% and its operating profit by 11%. How has it done this? People ask. And actually, on Page 23, we cover one of the products that has assisted, which is a Roof Vent. And this is by going into an adjacent market where we believe we can manufacture on the lowest cost basis we can give competitive prices. And we reckon we've taken around a 10% market share in a couple of years from nothing. And this has helped to keep our sales up. We've also, without doubt, been taking market share. We know that, where we're offering this great OTIF of 100% out of the plant, delivery next day, minimum GBP 100 requirement for free delivery to the merchants, GBP 150 to site. And this resonates, particularly as I mentioned earlier, I think when merchants are having to destock a bit, they're very happy for us to be helping them on this basis. It's a very efficient operation, highly automated, a lot of robotics in the plant. And this helps us to be the lowest cost manufacturer. And yet, we still have 50% capacity in here. So we're making 25.9%, and we have 50% capacity. This makes us think, while we need more products, we were already quite good in this area, launching them, but we can bring acquisitions in. And there are some areas that we're looking in for those where we think there are opportunity. This is a well-invested company in terms of CapEx and machinery. And our reduction in greenhouse gas emissions that Simon will touch on a bit later, is in the order of 76% since -- over the last 6 years. And that's a good effort. And in the last year alone, we've been down by 20%, 2-0. So again, a good effort. And it's coming from new, more efficient equipment mainly, and this has been at the forefront of assisting. That was a group figure that I just gave. So we believe we're well positioned when the building housing -- the housebuilding market recovers. We love the legislation of documental on future homes initiative, document. So the first one is energy, second one of ventilation, and we produce new products on the basis of these sometimes with more insulation attached to them, and it gives opportunities without doubt. So I will now turn in terms of the strategic delivery, the pillars, we have 4 pillars here. Now you're probably relieved to know. I'm not going to grind through each of them, but a quick summary. These are growth strategy pillars. So it's a summary for reference. We're championing sustainable building products. We will accelerate organic growth, make very selective acquisitions and drive operating margin improvements to achieve the 15% to 20% operating margin that we're targeting. We will also invest our capital and revenue to enhance future growth. So if I may, I'll hand back to Simon for the next slide, please.

Thank you, Paul. Just taking the first pillar there, we look to championing sustainability in each of our markets. Over 80% of our product portfolio helps address our strategic focus areas around building decarbonization, managing rain and storm water and providing urban green areas, which improve biodiversity and provide occupant utility. We believe these areas to be supported by long-term growth trends that will allow them to outperform general market growth. During the year, our first tranche of environmental performance declarations, which are independently verified statements of a product's environmental impact over its life cycle from extraction to end-of-life processing were launched in the year. While these aren't mandatory for the majority of projects, they do help bolster our environmental credentials and help our customers get environmental accreditations, including LEED and BREEAM for their own projects. So they will become, I think, increasingly important over the coming years. We're also continuing to minimize our impact on the planet. Our products generally lead their market in recycled content and over 80% of the materials we use are recyclable at the end of their life. And we're underway with our net-zero pathway. Our controlled greenhouse gas emission intensity, that's Scopes 1, 2 and business travel, so it covers the energy that we consume within Alumasc Group, reduced by a further 20% in the year and are now over 70% lower than when we -- 76% lower than when we began measuring them in 2018. Our Scope 3 calculations covering our whole value chain are well underway, and we expect to publish these together with our net-zero road map later in the year. And back to Paul for the sales growth.

Yes. Thanks, Simon. And we're touching on the accelerating sales growth here. We've seen an increase in our organic sales growth of 7%, which we think is pretty healthy. And it's been partly through moving into adjacent markets, new products, -- so not being satisfied with the markets we're in. We have opportunities to go outside, and that includes export markets, but we're very focused on taking market share, and we believe that's been achieved in all areas. The U.K. sales were resilient. We had strong overseas sales growth as well. And there's no doubt the long-term housing undersupply that's there despite the government's attempts to improve that, and I'm sure there will be some benefit of that coming through over time. And the aging U.K. building stock does give opportunities. We love building regulations changing, especially decarbonization ones, climate resilience and safety, and that gives us opportunities. And as you'll have sensed, I was thrilled to see the Brazil and Peru work and Mexico and Colombia success and also enter Saudi, et cetera, and Slovakia. And we have opportunities where we haven't really spent a lot of time developing markets like Thailand and Philippines. So we need to get going. That brand Gatic, the an acronym is gas and air tight cover will be 100 years old in 3 years' time. But it's starting to get going on the export market. So it's interesting. We will have new -- further new product launches into adjacent markets. And as I touched on, we want to expand that geographical sales team to benefit the export side. So how are we going to improve our margins? It's interesting to note that we've really moved by 3.9 percentage points over the last 6 years. Volume growth has assisted on that. efficient, flexible manufacturing capacity. We've also reduced the number of facilities and investing in capability for the future. All of this is helping us. And then as we move forward, we'll get the benefits from the investment into Halstead and the efficiencies that will come out of there in the move of Dover from closing Dover to moving into Halstead. And that will all assist the future, and we'll have the ARP benefits coming through in terms of synergies. And at the same time, as the volumes start to pick up again, all of that will assist us to get to the 15% to 20% target range. So that covers that side, I feel. And then let's move into the next one, which is we've got 2 to go. This one is value-enhancing investment. So where are we going to be investing? Where have we been investing? Well, sales and marketing capability has really worked for us, so increasing the number of salespeople and the quality of them. R&D and new product development has served us very well. So we'll continue that. We have spent GBP 2.6 million, of which nearly half of that has gone into the automation of our covers manufacturing, which is giving a much better product and going into the airports that we shipped into straight out of the move to Halstead, they were delighted with the end product. It's such an improvement. And at the same time, we'll be making our cost reductions out of that. Further NPD will take place and particularly investments at Housebuilding Products on agility, flexibility ability to really ramp up when markets pick up again or we might, at the same time and/or rather be bringing potential acquisitions into that for its 50% capacity that it has. And as I say, inorganic growth, we are keen on, but we're very fussy about what we'd acquire. And the last acquisition was ARP, which is in the metal rainwater market, competitor really to our Alumasc range of products. And we're continuing to review acquisition opportunities. There are some serious opportunities out there. I'm not saying we're about to sign for any of them, but we are looking in a serious manner at them. So our final slide is covering the outlook. We've demonstrated our track record in outperforming the markets. We've been able to progress in uncertain markets. We were able to respond quickly to demand increases. There's a continuation of the support of environmental building safety regs that will help. The undersupply of new houses and age of the U.K. building stock helps as well. And we are very thrilled with the inroads into Latin America with opportunities we see coming through in areas like the Philippines and Thailand to follow. We will have further -- in terms of strategic commercial objectives, we'll have further margin improvements from the Dover closure, ARP synergies and leveraging ERP/CRM platforms. Those will help us to sell more efficiently amongst other reasons. We have strong cash flows and the balance sheet provides significant capacity for further investment in both organic and inorganic growth. We have an opportunity to really deliver on significant shareholder value as markets recover. So we're well invested. We have a strong balance sheet, and we're ready to go to grow further. And that's us. Thank you.

That's great. Paul, Simon, thank you very much indeed for your presentation. [Operator Instructions] I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via investor dashboard. And Paul, Simon, as you can see, we have received a number of questions throughout today's presentation. And Simon, if I may now hand back to you to chair the Q&A and read out the questions where appropriate to do so, and I'll pick up from you at the end. Thank you.

Thank you very much. Perhaps this one for me, Paul, first. What are you doing to improve the sustainability of your operations? Well, I covered on one of the slides about our 76% reduction in greenhouse gas emissions since 2018. And that was driven really by efficiency improvements, investing in more efficient plants, consolidating our sites, moving from smaller, less efficient facilities into larger, more efficient ones and sourcing all our electricity from renewable sources. And that's gone hand-in-hand with a 400 basis point improvement in margins. So these are financial and environmental improvements for the business. Looking forward, as well as continuing with our own efficiency and continuing to move those greenhouse gas emission intensity down. We're also looking at our supply chain through our Scope 3 emissions calculations. The 2 big elements of that are distribution and extraction and sourcing of the raw materials. Distribution will certainly be working with our partners to understand their net zero pathways and making sure that their decarbonization objectives match our own. And on the extraction and sourcing side, the single thing we can do to improve or reduce our Scope 3 emissions there is to maximize the use of recycled materials. So again, we'll be plotting a path to net zero through both of those. Well, let's see. Two related questions. Are you comfortable with consensus market forecast for the current year in the first couple of months of the current year? Are you trading ahead of 2024? Yes, we obviously have our own internal forecasts that we're required to confirm that they or at least announce if they diverge from the market forecasts that are out there. But at this stage, we are comfortable and the Board is expecting another year of growth. So the consensus market forecast is consistent with that. And in terms of current trading, as Paul mentioned in the outlook, we're likely to have an H2 weighting this year, primarily because of the timing of overseas contracts in FY '24 -- sorry, FY '25, particularly. So while we are -- our internal forecast show another year of growth, the half year-on-half year comparatives will be skewed towards the second half. Hopefully, that answers that one sufficiently. Are there contractual arguments on Hong Kong receivable? Or is it just slow payment?

Just slow payment, it's coming through. They've -- there's a lot of goodwill there, and they will pay. Those payments are insured as well. So that gives a lot of comfort. But we're seeing the payments coming in. So the fact is that they are paying them. It's just a bit slower than we would have wanted, to be honest, but we're insured.

Reported profit in H2 was down 12% on H1 or around 20% adjusting for the profit from ARP. Should we expect a similar trend going into 2016? Well, I'm not quite sure I follow the numbers. I think on an underlying profit basis, we were about 4% behind H1 adjusting for the contribution from ARP. But I think as I mentioned in the previous answer, we are expecting an H2 weighted FY '26. So the year-on-year growth will disproportionately fall in the second half should particularly overseas contracts timings go the way that we expect. The large CLK contract that we had was the bulk of that and the original order was for about GBP 7 million. The bulk of that or a large part of that at least shipped in FY '25, but we are carrying about GBP 1 million of remaining order from that contract into 2026, but we're likely to see other work from that and from other overseas opportunities as well. So it is a little tricky to be absolutely categoric on the timing. One for you, Paul. Are you seeing a good pipeline of potential acquisitions?

Yes. I think it would be fair to say that, as we've always said, we're very fussy. We're going to stick to the knitting. We want to only acquire in areas of markets that we understand and that give synergy. And there are a few out there. Let's put it that. I'm not saying 10 or 15, but 2 or 3 that we're pretty interested in. I can't guarantee that they will go to completion, but some of them can take a while. That ARP one took 2 years, to be honest, and it had to go through the CMA in the end as well. So these things are not always fast. And often, they're owned by entrepreneurs who see them are very attached to them and want to be responsible and to make sure it's important that they trust us as well on what we're going to do with the business or what they think we're going to do and what we'll talk about doing. So yes, it can be quite complicated, but we'd rather spend the time to get the right ones than go off for a tangent.

Okay. Exceptional restructuring costs jumped in FY '25. What level of ongoing exceptional restructuring costs should we expect going into FY '26 and beyond? Well, the restructuring costs in FY '25 were largely to do with the closure of the Halstead -- sorry, the Dover facility. They were a little higher than anticipated at the half year, mainly because the commissioning was -- took a bit longer than anticipated, but also because the profit on the sale of the property was originally forecast to be realized in FY '25, but that's now going to hit FY '26. So in terms of restructuring costs going forward, we are not aware and we haven't announced that there are any projects that will incur any restructuring costs in 2026. So the only thing that you expect to see would be the circa GBP 400,000 profit on disposal of the Dover facility, the Dover site. So an exceptional income in 2026 as well as, of course, the ongoing IAS 19 -- sorry, the acquired intangible asset amortization, which is around about GBP 400,000 a year, which is a noncash accounting adjustment. Housebuilding Products delivered 26% margin despite sector headwinds. How scalable is this level of profitability [indiscernible]? And finally, I mean, I think would we expect to see margin reducing as volumes go up within Housebuilding Products?

No. Well, I almost dare not say that, of course, they will go up because of the drop-through when it's running at such a respectable level, but I certainly don't see it falling. You could argue that there should be the opposite situation. But when you're getting to this sort of level, I would be hesitant to forecast really a lot on that. But I don't see any reductions. They're continuing to work hard on their pipeline of new products, and the theory is absolutely true. you get better margins on new products. Over time, they get whittled away a bit by the competition. You've got to keep the pipeline going of new products, and they've been very good at doing that.

Thank you, Paul. And one final question here. Where is the venue this year for the AGM on the 24th of October? That will go out with our annual report when it's released a bit later this month. But the AGM will be held at our Alumasc Roofing site in St. Helens in Merseyside.

Very good.

Perfect. That's great. Paul, Simon, if I may just jump back in there, and thank you for addressing those questions from investors today. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. But before I redirect investors to provide you with their feedback, which is particularly important to the company. Paul, could I please ask you for a few closing comments?

Yes. Thank you very much. I think it's fair to say that we've demonstrated our track record in outperforming the markets now over several years. I'm particularly pleased in the year under review that each of the divisions has had a record performance against some quite difficult markets. And we feel that we're in a strong position now to continue that growth. And we're in a good area in environmental -- the environmental products, et cetera, environmental markets, where regulation helps. And we've got ourselves in good shape in terms of capacity, and we're there and ready and well invested, strong balance sheet to benefit from the turn that must happen at some point in the U.K. market, and we will benefit both in organic sales, both from self-help, and we've touched on many aspects of that today, particularly NPD, particularly in hiring good salespeople, et cetera, and we've been reducing our costs by moving into fewer sites. And then we have the inorganic growth in which we have a strong basis, a strong balance sheet to make some acquisitions, but we'll be very fussy about the ones we make. So I hope that we've covered that successfully for everyone today and that we will continue to move this business further forward. So thank you very much for attending our presentation today. It is much appreciated.

Thank you.

Perfect. Paul, Simon, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will 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, and good afternoon to you all.

Thank you.

Thank you.