Thank you, Mark. VEEM had a revenue of AUD 33.6 million for the half year and total activity of AUD 34.5 million. Revenue was down 10% on the prior corresponding period, but pleasingly still up 23% on FY 2023, showing the step change in the business. Activity of AUD 35.5 million includes a change in WIP of AUD 900,000, and that is due to the increased activity we had at the end as a result of delayed orders, which will be kicking in in the second half. Our EBITDA of AUD 3.9 million was within the upper end of our guidance, which we released in December. Likewise, our net profit after tax of AUD 1 million was also at the upper end of our guidance. Operating cash flow of AUD 1.8 million was solid and is expected to improve in the second half.
Our interim dividend is AUD 0.30 and is at the same 30% net profit after tax rate as we historically have had. I'll now go back to Mark to give you an overview of the half.
Thanks, Tino. As Tino was saying, our half-year results, we gave a guidance around in December. We came in at the upper part of that. We found that the EBITDA was AUD 3.9 million on our guidance that we gave of AUD 3.4-4 million, and the impact of AUD 1 million versus what we said was AUD 0.4-1.2 million. All that's okay, but we need to look back on this as being the first half being slower than the corresponding period last year. Of course, last year we did have a backlog of propeller orders as new capacity came on, but we were certainly well above the previous year. We have seen last year was particularly busy. The first part of this financial year, the first half of this financial year, was lower than that, and we did hit a pothole.
We were in between contracts in the marine space and in the defense space. The cash flow remained fine. It was down a little, but certainly not a problem. Gyro sales were AUD 3.3 million, and we've got orders in hand of 2.4, but you recall that last financial year was exceptionally busy because Strategic Marine brought forward orders for gyros, which meant we were particularly busy. We are down quite a bit, but we still have good sales coming through this year, and we expect it to be stronger in the back half and the front half as we normally are. There is something coming up where we've altered our Sharrow Engineering agreement to accelerate the rollout of Sharrow, which is, I think, very exciting.
The propeller revenue whilst was down a little, we were also caught with some major contract discussions, and we did not realize until they were concluded that the customers were actually holding orders back. That contributed a little bit to the slow second quarter, but of course, they have rolled in now. We are exceptionally busy in the third and the fourth quarter. Just really the earnings shifted from one quarter to the other. We awarded a defense grant for AUD 1 million, which we have put towards a new multi-axis CNC machine and scanner, which we have ordered. We ordered that just before Christmas. That will arrive around December 25, and that will go into a new facility, which we have committed to have built on this site during this year. The landlord will, of course, build that, but that gives us a significant increase in propeller production capability, which is good.
We ended up suffering from some delayed revenues and some compressed margins on some specialist jobs, which are repeating, and we've learned from those and they'll be back to normal margins. We've got some sort of cost reductions implemented already, and we expect that to improve the second half. That's kind of it in a nutshell. It was a bit of a pothole, but we're back to our normal business for the second half. I'd like to pass across, if I can, back to Tino for the financial results.
Thank you, Mark. As Mark has spoken of, the first half was temporarily challenging, but we're gearing up for a busy second half. Importantly, even though we had a challenging first half, the resilience of the business shows we still generated a profit. Our increase in work in progress towards the end has highlighted the increase in activity, which will flow through to revenue in the second half. ASC revenue was down due to low orders, but this was expected as the nature of this work is cyclical, and FY2024 was very high at AUD 16 million. Engineering products and services lifted up some of, took up some of the space left by defense and ASC. This was up 22%. Unfortunately, the margins were not what we were expecting, but the lessons from that will be used in repeat work, which we've already won going into the second half.
Propeller revenue remained solid, as discussed by Mark. Last half, we benefited from a backlog, which we worked through once all our capacity was installed, and we also had delayed orders, which are going to be fulfilled in the second half, and this was during contract negotiations. Gyro sales of AUD 3.3 million were down, but this was due to the completion of the Strategic Marine contract, which was brought forward. FY2024 was really robust. In saying that, we had orders of AUD 2.4 million at the end of the year. We've already won AUD 1.5 million. All these are for delivery this financial year. Our order book or for work to be delivered is AUD 3.9 million, which is more than the first half, and we're still only in February. In addition, we spent AUD 1.9 million on R&D, so the business has continued to invest.
Moving on to the balance sheet, our cash was AUD 0.3 million with a drawn overdraft of AUD 1.9 million and an undrawn overdraft of AUD 2.1 million. Cash generation was still robust at AUD 1.8 million, and we expect this to improve in the second half based on increased margins as well as increased revenue, which has been discussed. Our bank facilities were renewed on existing terms, with the overdraft increased to AUD 4 million. The increase on existing terms showed the bank's confidence in our forecasts and where we are as a business. As highlighted, the cash position is expected to improve in the second half. Although we had a slower half than we'd expected, the business has continued to invest. There was $1 million of equipment for tooling in our propeller side of the business, as well as AUD 1.1 million in tangibles related predominantly to gyro development.
During the half year, we released the Mark II, which Mark Trevor will talk about later on when we get to operations. From a balance sheet perspective, we're comfortable. Our modeling suggests we don't need any additional cash, and on that, I'll move to the cash flow statement. AUD 1.8 million, as I said, robust cash flow. Even in a slow half, we have continued to, one, generate profit and, two, generate positive operations from cash flows. We awarded a AUD 1 million grant at the end of the half, and we received AUD 400,000 in relation to that. Our financing outflows were predominantly related to HPs, so AUD 1 million of repayment in HPs. We have an undrawn overdraft facility of AUD 2.1 million. Our modeling suggests we don't need any additional cash, and we're comfortable with where we are at with sufficient liquidity. Thank you.
This waterfall now shows essentially where our cash went during the half. Our adjusted EBITDA, where you see there the AASB 16 leases, that represents rent. We then had our government grant and a small tax refund. In terms of payments, as I've discussed, we continue to invest in the business. There is AUD 1.1 million there and also AUD 1.1 million in working capital. This was a drag on cash, but this really represents us gearing up in the latter part of the period for revenue that will be delivered in this half. As discussed, we had repayments of HPs of AUD 1 million as well as leases. That is the accounting of the principal portion of the lease, which is our rent, ending with a net overdraft position. A slow half, but we still contributed positive operating cash flow, and our needs are sufficient going forward.
I'll now throw to Trevor, who will go through the performance of the business.
Thanks, Tino. I'll start with gyro stabilizers. From a revenue perspective, as Tino and Mark have both highlighted, we finished off on AUD 3.3 million for the half. A big contributor to that was the fact that we delivered all but one of the Strategic Marine units in the prior financial year, which was on an accelerated schedule. The good news on the back of that is that we finished off with a AUD 2.4 million backlog at the end of the calendar year, and order intake in January was AUD 1.5 million. If you combine where we finished off with last year and where we are now, we've actually got backlog that's higher than the sales we've done in the prior half. The upside for us for that is that that is not Strategic Marine orders, so those are orders from other customers.
We have multiple boats, multiple customers in the mix, which is good for us. That being said, Strategic Marine still have a fair bit of quotes and tenders out in the market, and we are still the gyro of choice, and they are pushing the technology quite hard in the market. From a sales and marketing point of view, we have been in all of the major boat shows in both the US and Europe. We had teams attend IBEX, FLIBS, METS, Cannes, and Monaco, and really good feedback from the market as to where we are with gyros and how the technology is being accepted in the market. Part of those shows was that we released the Mark II gyros and offered an enhanced warranty period. The Mark II upgrades were targeted to address some of the issues we found that were caused from operation of the gyros.
We had found due to constraints on boats that gyros were not, one of the big issues that we addressed was gyros were not being provided with the adequate amount of cooling water to cool them. In the Mark II upgrades, we sought to try engineering out some of those operational issues, which we found. One of the big upgrades that was done on Mark II was enhancing the cooling system, which has really helped the reliability of gyros that were starved of cooling water. To help with all of that, we also have appointed five technicians around the world. They've been in the mix for about two years now, so they've got a good bit of experience under their belt.
Geographically, they are peppered around the world, so it gives us a good ability to react to customers' needs where they are, when we need to service or help in the installation of gyros. One of the other big advancements we did during the year was that we have installed an active gyro test rig, so we can now simulate conditions that are experienced in the field and are able to engineer out any of the issues that we find that would have ordinarily only been found in field applications. That, again, just helps us with getting gyros out there that are more reliable and customers are able to turn them on and run them as soon as they get them. All in all, we're really upbeat about where we are with gyro stabilizers and where we're going to be going into the future.
From a propulsion point of view, we finished off the half at AUD 14 million, which was down on the first half of FY 2024, but 28% up on where we were in the first half of FY 2023. From a growth trajectory point of view, we're quite happy that propulsion is showing quite good growth overall. Like Mark said, part of the pothole that we hit in the first half of the year was due to some customers holding back orders during contract negotiations, which hurt us for the half, but is good going forward. We managed to sign off contracts with three of the large Italian boat manufacturers and get that finalized in the later half of last year, and we've already seen order intake up in those areas.
From the team point of view, we've had to add some additional people in the area to help with the extra volume, and we've also signed on a new dealer in the Asian market, and he's covering Southeast Asia, and we've already seen good traction in that area. From an OEM perspective, Volvo has enhanced and increased the range of propellers, which we do for them. We've historically done one product line, and we've now, during the last year, expanded that to two additional lines, and we've seen increased volume in those areas. From a propulsion point of view, we're quite comfortable that there's substantial growth in that area. As Mark has said, we're that confident that we have approached the landlord to increase our footprint for manufacturing, and we've ordered new machines to cater for that in the upcoming period.
Of course, this will also help us to address the volume created by the rollout of the Sharrow plan, which Dave will touch on in a minute.
Thanks, Trevor. Lots of questions around Sharrow. Just remember, this is true innovation for us and for Sharrow in particular. This is not just taking an outboard and making a bigger and signaling inboard. There are a lot more variables that have to be dealt with. The past 15 months has shown significant improvement in the Sharrow designs through a lot of testing and analysis, both on boats and modeling. The Sharrow designers are very confident that the data confirms that these designs are on track to deliver the consistent fuel efficiency and performance gains compared to the outboards, which have been outstanding, but are obviously at least five or six years ahead of the inboards.
We sort of sat down with Sharrow a couple of months ago and said, "Well, how can we accelerate this?" One of the issues is that Veem is set up to be a B2B sales and marketing team. We don't sell to end users at high volume. We don't have call centers and that kind of thing. We sell to dealers and distributors, and we sell to OEMs. Sharrow is set up as a B2C seller. They have online selling. They have call centers. They have people on the ground. Theirs is all about marketing to the individual end user. What we sort of realized is that Veem is actually in the way of that a little bit by trying to be the seller during this development phase. What we want is the designer, which is Sharrow, to be in direct contact with the customer.
We have arrived at this plan, which we have all agreed the terms on for the next 12 months, where Sharrow will directly manage all of the sales and communication, the data gathering with the end user directly, and Veem will take the design that Sharrow has and make it and sell it back to Sharrow, who will then manage all the sales, after sales, and, in particular, the testing, which will then feed back into their design methodology. They are very confident if they can get the volumes up, then these designs will evolve quite rapidly, and they can see themselves doing at least 75 vessels in the next 12 months, which is obviously a big acceleration compared to what we have done in the last 15 months. We are all on board with that. Both parties really think it is a great idea.
We're very keen to get on with it, and that's what we'll be going after. It is for a 12-month period. It might be a little bit longer, but once we get propellers where they can be produced at volume and they have the performance benefits that are required to sell to OEMs and fleet users, then it comes back into Veem under the original agreement terms. We start paying a license fee, and we go to the OEMs like Viking and Princess and start rolling it out. That is the plan, and we're very excited to get on with it. We only signed it last night, so we're really keen to start moving on that, and we've already had calls this morning about it. I'll hand back to Trevor for the next item.
The next bit I'd like to talk about is defense. In the defense area, we keep talking about how cyclic it is with regards to when sustainment's done on the Collins-class submarines. We're unfortunately in the cycle where we're in between docks at the minute, and that's resulted in revenue in that area being significantly down from the previous year at AUD 4.7 million against what was the prior period of AUD 7.3 million. The next dock is only expected to have revenue in FY2025. Whilst we expect that we'll get orders in this year, we only expect revenue for that in the following financial year. That said, we are in the middle of a renegotiation of the contract in that area as well. That has to happen every six years, and we're busy with that at the minute.
In other areas in defense, we're at the final stages of doing the sign-off for accreditation to be a supplier on the Hunter-class frigate program, and that should happen or will happen in this half. On the back end of that, we anticipate getting a bit more work out of BAE Systems for that style of propeller. In doing that qualification, that will automatically qualify us for the Type 26 program as well, and we will be one of only two companies in the world then that is qualified to supply into that program. Based on that, we expect to get some work on the back of that. Mark has touched on the fact that we've got the grant of the federal government, so that will fund a new five-axis CNC machine as well as an advanced 3D scanner, which both are required to do this type of work.
We see the fact that we have been awarded that grant as a good sign that the government's committed to backing us and being a supplier in that space. Also related to that is the work we've been doing to get ourselves accredited and in line for the AUKUS program. As a spur off of that, we found that there is a possibility of getting into the supply chain for both the Columbia and the Virginia-class submarines. We continue to work on with that. The picture that you see on your screen at the minute was actually something that was published in newspapers recently where Veem were part of a pilot program where five companies in West Australia were all visited and audited to be qualified for supply into the current Virginia-class program. We've gone through that audit, and we're awaiting the findings.
Once that happens, we'll have to assess what needs to be done to get onto those supply chains. Can you move on to the next slide, Dave? Engineering products and services has helped somewhat fill the gap that was created by the lack of work in defense, so we have seen a slight uptick in the work in that area. We did report back that in the latter part of last year, calendar year, we had some drop-off in GP due to some complex jobs that we had going through. We've now got the repeat orders for those jobs, so we expect that to be delivered in the upcoming half, and we expect margins in that area to be a lot better because we have found ways to be able to cast those specialized alloys now to a much better standard.
We anticipate the GPs will come around in that area. Hollow Bar remains strong with AUD 3.5 million in the half, and we see that demand there is fairly constant, and that should continue in the next half of the year. Overall, we're seeing a really good demand for high-precision engineering castings, and that seems to be going on in this half of the year, and we expect that to be maintained to the extent that we have had to focus a little bit harder on getting more resources into that area. We have a few things on the go. We have a constant apprenticeship program going, and we're also looking at recruiting via various different avenues. All in all, in all of the areas of the business, we see that this half is going to be a lot better than the last half.
In most of the areas, we've already got good backlog to substantiate that. Thanks, Dave. I'll hand back over to Mark to give us the outlook for where we're at going forward.
Thanks, Trevor. Look, it's probably fairly important to look at where we're going with all this. It's important not to dwell on a pothole too much, but to look at the overall direction of where we're going. With the gyro stabilizers, just looking ahead, we've seen the support from Strategic Marine. They've told us they'll be back ordering later this calendar year, so the first half of next financial year. They have great support of the product. Virtually every boat they're quoting has got our gyros in it. We're seeing that general buildup of and continuing demand for gyros. The Mk II release was terrific. The Mk II product addresses everything we've learned over the last eight years, and it has lifted our gyros to a new level, even to the point, as Trevor mentioned, of compensating for lousy installation in vessels.
We found that was a significant issue. To help all our clients, we've just made the capacity of the gyros in the cooling area just greater and greater, just to help them. Really pleased with how gyros is going. It's still a huge market. The product's getting better. The market reception, in other words, the market is understanding globally that gyros are the way forward. We're still the only player in this space, in the big space, so we're really excited to be where we are. Propulsion is really interesting. As we expand our facilities, put a couple of machines in by around Christmas time, it gives us that room for growth we've been looking for, and there is a quarter of growth. We can't say too much, but the three largest superyacht builders in Italy are now on board.
When we signed these contracts, the reason we wanted to get the contract sorted was they were giving us additional lines in their fleet, which means the volumes from them have all grown. That is really great for us. The Southeast Asian one that Trevor mentioned, it is another significant small superyacht builder, and we are now starting to see more and more orders come from them. That is, again, more growth in a new area. We have been very careful because Volvo do not like us to talk too much about what we do, but the increase in scope will end up in our propeller output more than doubling in that area. We were sort of looking at propellers doing the 4,000-4,500 propellers a year. Now we are looking at sort of around the 5,500, perhaps plus, in a full financial year.
There is significant growth going forward in propellers, and expanding into the shaft line supporting propellers, that's now just kicking off. Our first big tenders are going out. That's looking really exciting. We mentioned this before. It's worth three times what a propeller's worth in sale value, and it's pretty easy to win because we're selling them a propeller already. We really expect that the outlook in that space is very, very bright. It's possible we can turn a AUD 35 million a year propeller business into an AUD 80-90 million a year shaft line business. That's really important. The Sharrow by Veem, this is really, really exciting. It makes sense. If you're interested in the Sharrow product, being a super user group member puts you in a special category. You work intimately with the designer. Everything happens faster. The customer is always happier with the results.
Even the early design results perhaps might not be as great as Sharrow would have liked or the customer would have liked, but they've been part of the process, so they always come out happy. The speed at which they can develop the designs is what's really important to us. As Dave said, it's quite right. We're probably getting in the way a little bit. We have to be a bit cautious because we're B2B. We can't really push this out to our boat builders until they're ready. Sharrow are in a much better position to develop this process quickly, and we just supply them for a period of time. I think it's a winner. There's one more page, Dave. On defense, there is always a cycle of nature with refits. Yes, we're happy to live with that.
This is a period where we're a bit slow. That's normal. If you look at our trends over the last eight years, nothing to be concerned about there. The HII stuff is more significant. That will come way before AUKUS, and it's not just HII. There's also the missile programs. These are all happening before AUKUS happens. There's a lot of activity in that space that I think will certainly appear in the not-too-distant future. Also the Hunter-class one, the discussions with the Hunter-class people at Kongsberg, they have significant other demand for propellers in our space, and they were concerned that we might not have the capacity. Now that we've got this extra capacity coming in, they're over the moon. The volumes in there could be higher than what we think. It's a very strong part of defense for us going forward.
On the engineering side, business as usual. We've overcome the learnings of these contracts, which gave us a bit lower GPs. This time around, they're coming around again. Have to be delivered before June. We know all those. The margins will go back to normal on those. That's really exciting. Generally speaking, we looked through our costs straight after we realized we hit a pothole, went through in December, did a number of redundancies, mostly in the overhead area, big savings around AUD 1.5 million a year, which we wanted to carry forward into the back half. It helps us get our margins better, and we might be able to compensate a little bit for the first part of the year. That's our quest, but we're certainly managing our costs very, very closely during this period, make sure we're doing the right thing.
It is looking very strong. Same as last year, all sections of the business have got a really good look ahead. Obviously, this is just simply a pothole on the way, but what we are looking at is still a lot of continued growth in each area going forward. It is a terrific position for Veem to be in with such a strong look ahead in each area of the business. Thank you all for listening in. Very happy to take questions and see what we can answer.
Thank you to all the presenters. Now time for the Q&A segment. All those on the line, if you'd like to ask a question, please do so via the Q&A function at the bottom of the screen. We've got a few questions regarding Sharrow to start with. Firstly, from James Tracy of Blue Ocean Equities. He's got a couple of questions here. Firstly, can you provide more color around the plans to accelerate Sharrow? In particular, can you comment on the aspiration for similar performance of Veem inboard to outboard? What is required to achieve this?
I think the key thing here is Sharrow is the designer, so we can't really tell you what is required to achieve, apart from obviously the numerical targets. In terms of designing it to achieve that, that's the IP that Sharrow is contributing to this whole arrangement, is their coding and their process to get to that point, which has been successful on outboards, but it did take five or six, maybe even more years to get there. We're only 15 months into our process. From what they've tested to date, they're confident they're going to get there on the design, and we're giving them all the engineering input that we can. Obviously, there's a bit of feedback we can give them about how easy these things are to make and what we've learned over the years.
In terms of the toroidal designs, that's really their IP and their magic, and we need to rely on them to deliver that to us.
I think, Dave, if I could just mention there that one of the things we've given Sharrow is the ability to tune their propellers by using the patented Veem interceptor strip, which you can see in the propeller behind Trevor there. That will really help them because you'd imagine when you're doing this sort of research and development on the designs, the ability to tune them in just makes it so much more successful. That's our kind of contribution to the program, but that's about all we can contribute other than great manufacturing capability.
Thank you, David and Mark. Also from James, does the new agreement with Sharrow change the unit economics for Veem? Is there any change to revenue per propeller?
Interesting question, James. I think the key thing is that this is a temporary plan. It's a temporary arrangement. In the broader context of the agreement we have, once the propellers can be made at volume to the performance required, they'll come back under the original agreement, and we'll start selling them to the OEMs, the boat manufacturers, the fleet operators, where we can make them at volume. The designs will be generated automatically out of software. You put in the parameters and you get the design, which is what happens now for the Veem prop. When we get to that position, the economics will be as we've always thought. We think we'll be making better than a 50% GP, assuming the pricing is at least two times the sort of Veem standard price. That's where we think we'll be.
No reason to change that at the moment. During this phase, for these 75 vessels, for example, these are developments. The designs will be changing potentially, small amount, large amount. We do not know yet. We will be quoting Sharrow who will buy these props from us made to their design. We will quote them with a margin, not our normal sort of 50% type margin, but we will quote them with a margin on it just to allow that we do not lose money on these things and to make sure that we can economically justify the opportunity cost of putting them through our factory. Over the next 12 months, we will book revenue, but not necessarily a lot of GP. It will be positive, but not a lot because they are all one-offs effectively, as far as we know at the moment.
Thank you, David. Another question on Sharrow at this time from Brendan Agius of Curran & Co. Sharrow has published a number of case studies on the effect their propellers have on outboard boats. Will Sharrow likely publish similar case studies for some of the 75 inboard boats they aim to install propellers on over the next 12 months?
Yep. Thanks, Brendan. Yes, Sharrow have produced a lot of case studies on their outboards, but they didn't do that with their super user group process. They originally had, I think, a couple of hundred super users in their original group, similar to what we're doing now over the next 12 months. They all signed the NDA, which allows the designer and the end user to work very closely together. It might go on the boat, it doesn't do as expected, but maybe they find out why and they rework it a bit. It just allows an ongoing interaction that both parties can act on the basis that it's not going to become public.
Once the pre-order thing is done and we get to the point where we can make the volumes, that's when I think you'll start to see published test data on where it's all at. Until then, you've got to be careful not to mislead people. You might have one barn burner, and all of a sudden you release that, but you've still got a bunch of other people getting their tests done, and they're not seeing that. You end up in a position where it gets a bit out of control too early. We are very mindful of that, and we're going to follow the outboard process to make sure that this next lot is done carefully and under the designer's control before we start putting anything out public. It will all be done in conjunction with each other.
We would not expect Sharrow to release anything without coming to Veem first and us talking about that.
Thank you, David. Another question here. Is there any further revenue/sales visibility that you can provide to the market? Are all orders effectively a handshake agreement, i.e., customers can walk away, edit, amend as and where appropriate?
Not clear. Is that referring to Sharrow, or is that a general question on sales?
It's referring to Sharrow, yes.
The way that it will work and the way that it has worked to date, we've already done this with a couple of users where we've actually sold them the test propeller. They know they're in the test. They've got the NDA, but we've sold them the propeller. They put up a 50% deposit. Everything is quoted in advance. They know what they're going to pay. They know the test procedure, and they're on board with that because they want to be part of this early stage. They want to be part of the exclusive super user group. If the question is, are we going to get left with a prop that we do not get any money for? No, we will not. We get 50% upfront, and then we get the other 50% before we dispatch it from our factory.
We're not going to get left with a propeller where the customer changes their mind. I think that's what the question was. Hope that answers it.
Thank you, David. Another question here is, you refer to price increases. Could you give us an idea of the scope of these price increases and how whether this is above or below the increase in cost inflation?
I'm happy to answer that.
Yes.
If you want to know.
We're going to say the same thing. Ours is based all upon the LME price of metals as well. Of course, we take into account all of the factors within Australia. There are normal labor indexes, inflation. Material, especially with coppers and nickels, they vary quite a bit. We've got a dual factor, but I can tell you that the finance team work with the propulsion team every quarter to review everything. The prices change quarterly unless otherwise contracted, where we generally have escalation clauses in them. We ride on board with it, but it's a bit more complex than just the local labor index or CPI.
If I just.
Sorry, Gayton.
I'll just come in there to echo what Mark's talking about, LME prices and other items. We also have a hedging program in place so that we have an idea of what our costs will be in AUD to allow that pricing mechanism to work. That ensures that we can protect our margin as prices go up and down into the future.
Thank you, Tino. Another question from James Tracy here. Can you provide more detail on the Virginia-class submarine opportunity? How big could it be and milestones along the way?
I'll grab that one. The Virginia-class submarine opportunity could be huge. However, it is one of those that is as difficult as it is big. There are a lot of constraints around sharing government-sensitive US Department of Defense data. Being a part of the AUKUS umbrella helps us get through some of that. However, we don't even have definition on what some of that might be. From a scope point of view, we have been told that machined nickel-aluminum-bronze castings are a large constraint for the program currently due to factors that they have in the US. And nickel-aluminum-bronze machined castings just so happens to be our wheelhouse. From a scope point of view, we think it's large.
However, from a complexity point of view, it's difficult to get into, and it's difficult to understand with the constraints we have around US Department of Defense secrecy, how complex that process is. Without being able to understand exactly how complex that process is, it's difficult to quantify when we'll be able to achieve that.
Thank you, Trevor. That concludes the Q&A segment of the webinar. I'll now hand it back to Mark for some closing comments.
Yeah, thank you for listening in, everybody, and for the questions. It's always a bit tough when you've got to deliver slower financial news than we'd like. I wanted to just make sure everyone's aware that nothing's really changed on our radar. It's all looking very exciting in every part of the business. These are just potholes that occur every now and again in a business which has multiple contracts in multiple areas running simultaneously. We move on and continue to grow and prosper. Thank you for your support.