Good afternoon, and welcome to the Alumasc Group PLC half results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. 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 the answers that is appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand you over to CEO Paul Hooper. Good afternoon to you.
Well, good afternoon, everybody, and thanks Alex for the introduction. A very big welcome to the interim results of the Alumasc Group for the year 2024, 2025. My name is Paul Hooper. I am the Chief Executive, and I am joined today by Simon Dray, the Group FD. By way of introduction, we would like to cover a couple of slides at the start of the presentation here. Simon is just going to. Sustainability drives our future growth. We have three divisions with a diverse range of products and markets. I will touch on the first, which is the Water Management, and this consists of metal building drainage, including surface water drainage, metal gutters, downpipes, and specialist access covers under the brand name of Gatic. Our second division there is in Building Envelope, and this consists of our roofing business and predominantly flat roofs, including green roofs.
Our third division are Housebuilding Products, which range really from loft doors, weeps, to tile vents, and in effect, really from the ground level to the top of the roof of a house. If we move on to the next slide, these are our growth strategy pillars. This is a summary for reference, and you will see more detail as we touch on each division. We are championing sustainable building products. We will accelerate organic growth, drive operating margin improvements to achieve the targeted 15%-20% operating margin. We are going to invest our capital and revenue to enhance future growth. If we can turn now to page seven.
These are the highlights of our first half of the FY 2025 year. We have had a record half one performance in what are challenging end-market conditions, particularly in the U.K., where Experian indicates for 2024 there has been a reduction of 5% in activity, construction activity. We grew our revenue by 20%, and we grew our underlying PBT by 19%. We have had organic growth in all three divisions. In fact, all three divisions have moved ahead of the prior year, as we did and managed to achieve in the full prior year to June 2024. We have had an excellent performance from ARP, and you may recall this is a business that we bought just over a year ago, and it has exceeded expectations. We have had strong cash flows. In fact, 127% operating cash conversion.
The balance sheet is in a very strong state with a 0.3 x leverage there, which we will come on to later on what that means for us. We took the opportunity to tick up the dividend to 3.5p. Moving on. The delivery of strategic priorities are driving market outperformance, and the successful execution of these and commercial priorities have really made a difference. Our organic revenue growth has been 8%. Overseas sales growth has been 43%, and that has been assisted by the acceleration of the Chek Lap Kok, Hong Kong Airport order. We have had resilient domestic sales. It has not just been exports, it has been the U.K. as well, and that was ahead by 3%. That is outperforming the challenging U.K. market, which I have just touched on, was down by 5%.
We managed to keep our underlying operating margin stable at 14.1%. Just to remind ourselves that 80% of our portfolio is aligned with strong environmental growth drivers, which we see as a definite advantage. We closed our facility in Dover in December and moved the manufacturing of Gatic access covers to Halstead, which is the facility that came with Wade when we bought that a few years ago. This has been very successful. We started manufacturing, and we estimate that we will save circa GBP 800,000 a year from this. You will see a little bit later on that we will have improved products from this move as well, which will give us a competitive advantage. We have significant headroom to support future growth, and you have just seen that referred to with the balance sheet gearing.
We have a clear line of sight on delivering our growth ambitions. It is pretty much more of the same. There will be a continued outperformance of the U.K. construction market. Pretty much more of the same, doing what we have been doing. In our H2, we will start to get the benefits of the GBP 800,000 saving that I just touched on. The acquisition synergies from ARP will start to come through more strongly where we estimate overall that there are benefit savings, actually purchase savings of circa half a million pounds there. Now I will hand over to Simon to cover the financial review.
Thank you, Paul. I will start with our income statement. As Paul mentioned, revenues were 20% ahead of the prior half-year. 12% of that growth was due to an incremental six months contribution from ARP, which was acquired at the end of December 2023. Organic growth, so like-for-like growth, contributed the remaining 8%. Margins, both gross and operating, were stable. Raw material prices were not significant in the period, and inflation and other costs, such as labor, were mitigated by active management of costs and prices. Our underlying profit before tax was GBP 7.5 million, 19% ahead of the prior half-year, 11% of which was organic growth, and 8% was from ARP. The tax rate on our underlying profits was slightly below the prior period due to the mix between U.K. and overseas profits, so our underlying earnings per share was 22% ahead.
The board have declared an interim dividend of 3.5p, about 1.5% increase from last year's interim. In the period, we reported GBP 700,000 of non-underlying restructuring costs related to the closure of our Dover site. As we indicated last year, we expect these costs to total GBP 800,000 by the end of the year, with a further GBP 100,000 during the second half of the year. Although any profit from the disposal of the property will offset this in due course. Our revenue and profit bridges analyze out the split between inorganic and organic growth. Excluding the contribution from ARP, very pleasingly, all three divisions contributed to organic growth, as you can see in the gray boxes. ARP itself contributed GBP 5.7 million of sales, and after interest on the acquisition consideration, GBP 500,000 of underlying profit.
Our operating margin was stable at 14.1%, consistent with the prior half and prior full-year. We will cover on a later slide our operating margin target and the opportunities to achieve that through strategic actions and through volume growth. Looking at our cash flow, we had strong cash generation in the period with operating cash conversion. Essentially, our ability to convert pre-tax, post-pension operating profit into cash was 127%. We had significant destocking during the prior year, but pleasingly, we saw a further GBP 1.1 million inflow from working capital in spite of the volume increases and some higher stock holdings to offset extended lead times caused by the Red Sea crisis. Our average trade working capital reduced from 16.7% of sales to 14.8% of sales. These strong cash flows allow us to continue to invest in our future growth.
We had GBP 2 million of capital expenditure in the period, GBP 400,000 of that related to the completion of the project to relocate and automate the manufacture of our access cover business at Halstead, following the closure of the Dover site. A further GBP 700,000 was spent at Timloc on further automation and to support its new product development efforts. ARP's strong performance meant that the final earn-out, GBP 750,000, was paid in full in January, just after the period end. Net bank debt closed at GBP 4.6 million, a 37% reduction since June 2024. A couple of key points to highlight on the balance sheet. Our debt facilities are GBP 25 million, extendable to GBP 45 million through what is called an accordion agreement, which allows us to upscale the total bank facilities without renegotiating the agreements. They are committed until August 2027.
Our net bank debt of GBP 4.6 million represented gearing. That is net debt divided by our 12-month trailing EBITDA. Essentially, a measure of how big our debt burden is relative to our earnings of a modest 0.3 x, compared to 0.5 x for the last two reporting periods. We retain substantial headroom against both our covenant level, which is less than 2.5 x gearing, and our 1.5 x internal debt ceiling. Our defined benefit pension scheme funding position improved again on strong growth asset performance and higher bond yields, which lowered the present value of the liabilities. At December, we reported a GBP 3.3 million accounting surplus, which compares to a GBP 800,000 surplus at June 2024 and a GBP 4.8 million deficit at December 2023.
While the accounting valuation doesn't reflect the basis on which we agree funding with the trustees, the scheme is now approaching a self-sufficient position where the assets can be held in low-risk investments which effectively hedge the majority of the liability risks. While the company still retains an obligation for the scheme and it remains on the company balance sheet, the company is required to meet the costs of running the scheme. There is a low risk of the company needing to pay further deficit repair contributions. Our next triennial is in March this year, where we will be seeking to agree with the trustees an affordable level of contributions, which reflects the improved valuation, while also keeping some further de-risking options on the table. My final slide in this section reflects on our performance against our financial key performance indicators. Our first target is revenue outperformance.
We have achieved a compound organic revenue growth of almost 6% in the five years to June 2024, against a flat overall U.K. construction sector. In the current period, we grew revenues by 8% organic in a sector that declined by between 3% and 5%. Our operating margins have grown over the five years to 2024 from 9.8% to 14.1%. This period, margins were in line, and although achievement of our target range of 15%-20% will depend somewhat on volume growth, there are some strategic actions which Paul will cover later which will begin to feed into the second half. Strong cash generation is an important enabler of our strategic growth. Our cash conversion this period was at 127%, well above our 93% average over the last five years and our target of at least 100%.
Finally, we continue with our carbon reduction activities with scope three emission calculations, which cover our entire valuation chain, including sourcing and logistics, performed for the majority of our businesses. Target setting and accreditation activities are underway, and we expect to publish the results of these later in 2025. I now hand back to Paul for the operating review.
Thank you very much, Simon. We have three divisions, and once again, during this half-year, all three divisions have an improved performance versus the prior year. I will start with Water Management, which is our biggest division. It had a record performance, and you can see that the revenue and underlying operating profit grew significantly, so a 30% growth there. We had six months benefit from the contribution from ARP, that was acquired just over a year ago, and we had organic growth in revenue of 9% and operating profit of 11%. We had a terrific export performance where it grew by 42%, and we had faster than expected call offs from the significant Chek Lap Kok, Hong Kong Airport project. We have a growing pipeline of opportunities from expanded overseas sales team. What does this mean?
Well, excitingly, on Friday, we received our first order for Brazil for a port there, Suape Port. Although not material, it was still very significant to us with several hundred thousand GBP value, but this is our first project in Brazil. We put somebody in there a year ago into Latin America, into Colombia, actually, and he is doing a fantastic job. It just shows what we can do with our products in other parts of the world. We are very excited. I am particularly excited about this, because there are areas like Peru where they have got military and civil airports, et cetera, Mexico, Chile, et cetera, and we really have not gone there in the past. I am very excited about this, and I feel although it is not huge, the first project, it is still a breakthrough.
Meanwhile, we have had resilient U.K. revenues, and we have invested in leadership positions.
There is a new MD for this division, which in effect replaces me, which I have been doing for five years, pretty much part-time. It will allow me to focus on other chief exec responsibilities, like acquisitions. We brought an experienced operator in, and we have also brought an experienced export sales director. This is part of our succession planning, because the incumbent will retire at the end of this financial year, having done a really good job, been with us for 40-odd years. From H2, with the automated access cover manufacturing move to Halstead, GBP 800,000 annualized saving, ARP synergies, GBP 500,000 over time. We will start to have the further improvement on the margin. Hey, this is a picture of one of the first products coming off the production line, if you like, at Halstead. Can you spot any lead filler in there?
Well, please let me know if you can, because there is not any there. Actually, this is a beautifully machined product. It is better than the competitors now, without doubt. They used to be bespoke and individually crafted at Dover, a process that has probably been carried out for 80-odd years. We are saving GBP 800,000, we got a better product, and the first shipment of this has gone into Heathrow, and the contractor is delighted with the end product. This is innovation, and this is us investing, wanting better products, wanting to save money, too. That is Water Management. Our second division is Building Envelope, which consists of our roofing company. This also grew. It grew its revenue by 8%, its operating profit by 6%. It took market share. It is by hiring really good salespeople that it has achieved this and having new products available.
It has had a metal roofing standing seam, cold applied liquid systems, et cetera, shown at the bottom of the page. Those have all helped. The margin is from the investment in our sales capability and regional coverage, strengthening that. But we have also had to invest in other links to the Building Safety Act compliance on products and on training, and that has cost us a few hundred thousand. But it is probably going to be a barrier to entry over time. We are very happy to be spending that money because it puts us in a good position. We need well-trained people as well.
I have talked about some of the new products there, but an interesting aspect where this business has been successful has been by nurturing and bringing in some large clients that might be high street shops. They might be other companies that have got a lot of buildings around the U.K. that need refurbishing over time. We get a site of the future, and these will run for several years, and that is good to have in your portfolio. We are pretty excited about that as well. Then finally, I should not call it the third division, because this division is making a 25% return. It is really well run. It also had a record H1 performance, and that is against a housebuilding market that has declined by 7%, but it has moved ahead, with its revenue ahead by 6%, its profit ahead by 8%.
It has done that from outstanding customer service, 100% OTIF, and also bringing new products in. You may recall the tile vents that we have had launched around 18 months to two years ago. We reckon we have taken about a 10% share, and all of these things have helped to offset the decline in the market. We have invested further in some equipment in H1, and this improves the efficiencies and the cost management, and it has increased that operating margin by half of 1% to 25%. We are well-positioned to support any demand recovery. In other words, the market lifting up, because we are pretty cost efficient. We reckon we are probably the lowest cost manufacturer. It is highly automated, robotics all over this plant, and we are focusing on sustainability, which supports the drive for lower carbon homes.
We have substantial manufacturing capacity. We estimate that to be in the order of 50% +. This business is very well run. It continues to grow. It has just had a record H1, as has the Water Management, but equally, our roofing business has also grown in H1. How are we going to keep this going? We want to accelerate our growth. We have various strategic priorities, and the first one I will touch on is accelerating our organic sales growth. The photo here looks as if this is our latest robot. It is not. Actually, it is a play area, and it is demonstrating in the photo the Wade Linear channel drain system. But we have grown, as you have seen, our revenue both in the U.K. and overall against a very challenging market.
We are fortunate in having long-term growth drivers assisting us in terms of 80% of the product portfolio is subject to regulations and legislation, and 80% of revenue is derived from environmental solutions.
When the markets recover, we will be in a good position to take and increase our volumes, and meanwhile, we will continue to take market share gains. Moving on, this is exciting. This is our overseas area, which we grew by 43%. We shipped into Australia, Slotdrain. We have shipped into Saudi, into Neom. We have got a guy permanently positioned now in Dubai. We are looking to move into the Philippines and Thailand, and more representation in India over time. Singapore, there is going to be increased work there, which we are excited about. We are also, as I touched on, very excited about Latin America and what can we achieve there. We are only, I think, scratching the surface. Our products are really good.
They are as good as the competitors, if not better, along with our technical support, et cetera, and our marketing, and we are going to grow this.
It is an exciting time for us actually, and I am so over the moon, as you probably gathered by that Suape Port, we are in one of the biggest ports in Brazil. It is a start. How are we going to drive our margin improvement? We have said we are going to hit 15%-20% as an operating margin. We are at 14.1%. We have touched on the GBP 800,000 saving. We have touched on also the ARP synergies of circa half a million coming through over time. We will wait, and we will be assisted by the U.K. market recovery. The overseas growth will assist us. That is more in our own hands, and that is what we will be pushing hard on, so that we can make that happen too. We can grow this operating margin.
We have grown it 435 basis points from 2019, moving, as Simon touched on, from 9.8% to 14.1%. Of course, we can move it further to 15%, and that is what 15%+, and that is what we will be doing. If I may, Simon will touch on the next slide, please.
Thank you, Paul. We believe a very important factor behind the group's performance over the last three years, last five years, and its future growth potential as well, is our successful alignment with markets that support the shift towards sustainable construction. Over 80% of the group's revenues are derived from one of our three environmental pillars there. Either reducing a building's carbon footprint, either by reducing embedded carbon at the point of manufacture. Our products are typically high content of recycled material, and they are low lifecycle carbon products. Also by reducing operating carbon, so the energy a building uses while it is in use. They do that by controlling ventilation, improving insulation, and some of our roofing products also absorb atmospheric CO2 to reduce the building's energy footprint. We also improve buildings' climate resilience by managing rainwater and attenuating stormwater.
We also provide biodiverse green spaces within the urban environment. Our market demand is supported by building and planning regulations addressing decarbonization and building quality and safety. Pass back to Paul now.
Thank you very much. Thank you very much, Simon. What are we going to do about value-enhancing investment to grow organic, to get organic growth? We are investing for the long term, and that is including the sales people and Building Envelope. We have continued to do that. We have continued to invest ahead of the game, and it has paid off. We will continue to do that. We are taking market share. That is the real litmus test with these things. We have invested in senior management, the divisional MD coming into Water Management. That will bring new energy along. The export divisional or the export sales resource as well in Water Management is a positive. Very experienced people coming into both of these positions. I touched on the access covers automation. All of that will help in terms of cost savings and better products.
We will continue to develop new products, particularly, but not exclusively, in the Housebuilding Products. That tile vent is such a fabulous example of bringing a new product in to offset a decline in the marketplace. We want it to be supported as the market recovers, and then we will be able to move even further forward. We have strong cash flows, and we have a strong balance sheet that will support further investment. Simon, would you like to cover the next slide, please? This is a really interesting one on M&A.
Thank you, Paul. Yes, M&A acquisitions have been an important accelerator of our growth strategy, and we hope that they will be going forward as well. The left-hand side of this table shows the characteristics we look for in an acquisition. Principally, we look for bolt-on opportunities, typically up to around GBP 20 million enterprise value, and businesses which operate in markets that we have a good understanding of. So our current markets or close adjacent markets. We also look for businesses that are consistent with our group's targets and strategy, particularly regarding sustainability. They need to be businesses that we believe we can grow and ideally bring synergies into the group. To illustrate that, there are some case studies set out on the right-hand side of some of our recent acquisitions.
You can see from the initial return on investment, ROI, we look to pay a fair price for good businesses with moderate initial returns on investment based on their performance at the point of acquisition. However, critical is our ability to grow these businesses through implementation of our strategy, and in many cases, the synergy they bring with the rest of the group. You can see from the ROI actual target, we look for and have achieved substantial growth in acquired businesses, current or near-term expected returns. In that way, we create value for our shareholders. We have a pretty good pipeline of opportunities. We have a long list of companies which are not being marketed at the minute, but we keep an eye on.
One or two of those we are getting some traction with, so we are hopeful that we will be able to progress with something over the next 12- 18 months. Paul?
Thanks, Simon. This is our final slide, which is the outlook. After an excellent H1, we expect a continued resilient U.K. performance despite the persistent demand headwinds. H2 export growth is likely to normalize. We will have strategic progress on margin targets from further efficiency improvements that we have touched on, including the Dover plant closure. We expect a minimum impact from the NIC and NLW increase. It is around GBP 600,000, but our record is good of recovering cost increases, which might be down to cost reductions, efficiency gains, and price adjustments. We have demonstrated our quality of our businesses and the capacity to deliver medium-term growth plans. We have a diversity of end markets. We have the export potential, which is really there, and we have the strategic alignment with a shift to sustainable construction, which helps us.
Product innovation, that is more of the self-help, and that will continue.
We have an experienced management team, best-in-class service, and we have operational excellence, where we believe we are one of the lowest, if not the lowest cost producers, depending on which division. The board remains confident in the group achieving its full-year forecast. There is a clear line of sight to deliver long-term shareholder value, and it will be more of the same. We have outlined the strategic moves that will make that happen. If we reflect over the last five years, we have consistently improved this group. As Simon touched on that 435 basis points movement to 14.1% from FY 2019 is quite significant. So we can do it, and we are going to continue to do it and to build that to the 15%-20% operating margin. We have the capability both in terms of growing our sales and improving our efficiencies.
We are constantly looking to see how we can make improvements on both of those areas, and the end result is good. So we are pleased. We are not complacent. We are quite pleased with progress so far. We want more. That will also include M&A activity, where we have had a good record. We have had good synergies coming through over the years as well. So I think that is really it, other than to thank you all so much for attending. We have got some questions, and then I will just say a few words at the end. So thank you very much.
Fantastic. Paul, Simon, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right-hand side of your screen. While the company takes a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via investor dashboard. Paul, Simon, I see we have received a number of questions throughout today's presentation. Simon, if I may now hand back to you to chair the Q and A, and I'll pick up from you at the end. Thank you.
Thank you very much, Alex. Paul, first question is for you. When will the company move itself onto the Main Market?
There are no current plans to move ourselves back onto the Main Market. I'd say never say never, but we're very conscious of, there are some investors that are invested in us because of the IHT benefit, even though that will have been changed to some extent in the budget, of course. I think it's been halved. Nevertheless, there are institutions and individuals out there who've got an IHT reason for investing in us. Actually, overall, our share price has moved up significantly, I would say, in the last year. From that point of view, it seems to be working quite well. But we will continue to keep the situation under review.
Thank you, Paul. The FT reports that U.K. businesses are set to offload GBP 70 billion of pension risk to insurers. Why can't Alumasc do the same? Would it not reduce risk and make the company more attractive?
That's one for you, Simon.
Yeah. Well, Gerard is referring here to the pension scheme, defined benefit pension scheme, and there's essentially two options for a late-stage scheme like ours. You can either hold it on the balance sheet and run on a self-sufficient basis, like plan A, if you like, or you can pay an insurance company to take it off your hands. The simple answer to the question of why don't we pass it on to insurers is that it doesn't represent good value for money for the shareholders right now. We continue to keep it under review. We will have a better idea of what ongoing cash flows look like post the triennial review with trustees.
I think the likely outcome of that, as I mentioned when we covered it, is that we will agree some level of contribution basis which keeps some further de-risking, including partial offer or insurance buyout on the table. But to do it right away, I think, would not be good value for money. To see who wants to do this one. The dividend increase of 1.44% doesn't reconcile one bit to the positive tone of your RNS. Why haven't you had the confidence to increase it more?
Do you want to handle that? I'll add to it if—
Sure. What we were doing, we weren't trying to send a message with our interim dividend increase. We look at these things on a full-year basis. We are— Once the business performs in the second half in line with the board's expectations, then we would expect to increase the dividend by more than the increase seen at the half-year. But we're not trying to set a message. We are just looking to show a little bit of progression and review it at the full-year.
Which is what we did last year, and we had somewhat of an uplift for the final dividend.
Yeah. How much do you pay into the pension fund? Looking to sell the fund to an insurer? Well, I think the latter part of that question we've covered. Current contribution level is GBP 1.2 million per year. Going forward, the discussions with the trustees are likely to revolve around how much it's going to cost to run the scheme, the expenses of the scheme itself, plus a moderate level of contribution to keep, as I mentioned, the risking options on the table. But, I don't know more about, can't give you more than that until we've sat down with the trustees.
Okay.
How is the sale of the Dover site going? Have you had some interest from prospective purchasers?
Shall I answer that? Yeah. It is going quite well. We have had some interest. We are still finalizing the clear-up of the site because it was manufacturing up until a few weeks ago. But there has been interest, but I would say we are not close to selling it, but that could change, if the two or three, four people who have been around us, et cetera, start to show further interest and want to accelerate that. But it is not without interest, let us put it that way. Okay.
Well done, Paul, Simon, and all at Alumasc. Great results and prospects.
Thank you very much.
Thank you. Scroll down. How many staffers do you have versus, say, five years ago? How many employees?
Oh, gosh. Right.
Well, I know from five years ago, we are likely to have fewer employees in because we have sold a business called Levolux, and we have just closed our site in Dover. There will be a slight downward trend in staff numbers. But I think we are about 450 employees.
Yeah, exactly. I think it will be about exactly that, yeah. It is not something that we necessarily publish, but—
Not every six months, no.
Yeah. 495.
495.
Yeah. It is not far off.
Consistent, but a bit lower than—
But that would have included some at Dover. You could take. Actually, there will be around 15 odd to come off that, maybe slightly less. Sorry, 12-ish. Yeah. And five years ago, it would have been a lot more. I have not got that number with me.
Okay. Do you contemplate international manufacturing expansion or will overseas remain an export business for the foreseeable future?
Well, again, never say never, but at the moment, our expertise, our investment in modern equipment, et cetera, is all in the U.K. But over time, then we may do it. It is a question of the cost of shipping versus the investment and the size we can build a market up to. But it would be a possibility over time. But I do not think we are near that at the moment for several years, to be honest.
Okay. How is the ERP system performing for the business now?
You can have that one.
Yes. That reference. The implementation of a new system in our two biggest businesses only happened six, eight months ago, something like that. They are now going through the system, which is a lot more stable now and gives them a lot more options in terms of understanding the business. They are implementing the changes. As we speak, they're starting the process of improving the system. What has improved a lot over the last two months is CRM, customer relationship management data. The sales and marketing teams are increasingly using that to better direct their efforts.
The next one is yours.
Okay. Well done on the strong cash flow generation. How long can working capital continue being positive, particularly as you continue growing the business? That's a good question, and as I say, I was very pleased that we had some inflow from our working capital in the six months. I think 14.8% of trade working capital as a percentage of sales is probably a reasonable place to be. I don't anticipate squeezing much more out of that until we really get into the ARP synergies and the ERP benefits, then we might see a little bit more coming out. But I think they're medium-term targets. So I'm not expecting too much more to come out of that, certainly in the next 6- 12 months.
I think you've got the number on that. Next one is—
Yeah. Innovation, what percentage of sales is from new products? I think in the last report, we don't publish it every six months, but in the last full-year, it was about 16% of sales were from products launched in the last three years. That varies from division to division. Timloc was up near, it was about 22%-23%, I recall. Paul, do you want to comment on—
Yeah, I have got a view on this, and that would be over time. I'd like it to be nearer 25%, certainly 20%-25%, but over time to get to the 25%, I think that's a healthy percentage, because it really is true that if you launch what is actually a new product and something that's innovative, you will get better margins on that until the competitors catch you up. What you need is a flow of other new products coming through that will continue to come into the businesses. That's what we will be doing. Yeah, it's always exciting launching new products, too.
Fantastic. That's great. Paul, Simon, thank you for addressing all those questions for investors today. But before redirecting investors to providing you with their feedback, which is particularly important for the company, Paul, could I please ask you for a few closing comments?
Yeah. It's just a very big thank you for your support today and for your kind comments, for the great questions as well, and really just being here attending and showing interest in our business. We feel we have come a long way in the last five years. This hasn't been an overnight wonder, and we've got a lot of plans really there for the future where we're going to grow this business even further. We feel that now is the time that we're hopefully getting credibility of being able to deliver, and against a difficult marketplace as well. When the markets return, we hope that we'll be able to move further forward. We've had a strong H1, and we expect to be able to continue growing the business. So thank you very much indeed for your attendance.
Fantastic. Paul, Simon, thank you once again for updating investors today. Could I please ask investors now 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 so much.