Earnings Call: H2 2021

Oct 21, 2021

Well, good morning, everyone. My name is Chris Pocket and I'm Head of Communications for the Runnership Group. And I would like to welcome you to this live webcast presentation of Renishall's preliminary financial results for the year ended June 2021. Present in the room today are today's main presenters, Will Lee, Chief Executive and Alan Roberts, Group Finance Director. And they will be joined for the later question and answer session by Sir David McMurtry, Renishall's Executive Chairman. Before I hand over to Will, I'd like to go through some basic housekeeping for the event. After the presentation, which will last around 25 minutes, There will be a question and answer session in which we will try to answer as many questions as possible before we close around 11 a. M. No questions will be answered during the formal presentation. However, you will be able to submit questions both during and after the presentation via the question icon that you can see on the control panel on the right of your screen. I would also like to point out that all financial information given during this Presentation will be in pound sterling. Thank you again for joining this webcast event, and I will now hand over to Will. Thanks very much, Chris. So look, this has been a really positive year of recovery for us. Revenue up 11% to 565.6 million. Strong growth in APAC throughout the year. You can see 21% growth there. What we have seen Very much second half growth in EMEA and Americas. Clearly, still challenges throughout this year with the Pandemic had absolutely fantastic effort from all of our employees all across the world to make sure that we've been supporting our customers during this time. Adjusted profit before tax up 146 percent to £119,700,000 This has clearly been driven by our Strong turnover growth and also benefits from Fit for the Future initiatives in terms of improving productivity across the group. A return on sales up 21% with H2 of 25%, and we've finished the year with a strong Cash position of £250,000,000 really coming from a strong trading performance and a year of reduced capital expenditure and dividends. Throughout the year, we also held a formal sale process. This commenced back in March and was included in July with no suitable offers found. Over the last 18 months, we've been introducing our new purpose of transforming tomorrow together. As part of this, We've been reclassifying our metrology business as manufacturing technologies and this includes industrial metrology, position measurement and additive manufacturing. We've also reclassified our Healthcare business as analytical instruments and medical devices and this includes spectroscopy, neurological and medical dental. So let's have a look at Manufacturing Technologies to start with. Here we saw an increase in revenue of 11% up to 526,200,000 An increase in profit of 124 percent up to £112,600,000 This came with a record demand for Encoders really driven by very strong markets in semicon and electronics CapEx investment. We'll talk more on that later. We also saw rising sales of our flexible gauging product line, that's the Equator product and also for our machine tool probes. These were both strong in APAC in particular with a real focus on the Consumer Electronics sector. We did see lower AM sales. This was very much in line with our strategy of focusing on a smaller number of key accounts. In the Analytical Instruments and Medical Devices area of the business, we saw revenue up by 12% to €39,400,000 and profit increased from £1,400,000 to £5,900,000 This was driven by a good recovery in spectroscopy investment and particularly pleasing, good adoption of the Versa, our new Raman instrument and also growth in our neuro product line. So I've just talked about we've seen very strong demand for our Encoder product family. This really is coming from a very strong semiconductor electronics CapEx market very much due to so much demand for semiconductor chips at the moment very well publicized and therefore significant investment going into new fabs. Great news for us because our encoders are used throughout all the different products used in the manufacturing supply chain for Semiconductors. Our current challenge is very much actually keeping up with this demand and keeping our customers supplied. Another area from a market development point of view is the rising use of automation. This is very much driven by skill shortages everywhere across the world, whether that's in more traditional, high volume manufacturing locations or in more recent onshoring initiatives. This is good news for us because actually when you automate, you have to build in metrology to the process to make sure that it works robustly and reliably. Where this leaves us, it is an increased demand for our machine tool probes and our gauging product lines which are ideal for metrology on the shop floor next to the process. What it also drives is more use of robotics, which again is good for us One of the challenges that we're facing and this is a really good challenge to have is responding to this rising demand. We have seen a steady strong order intake from our customers resulting in a record order book. To respond to this, We've recruited, so our manufacturing headcount has increased by 25% throughout the year. We, like everyone else at the moment, Are seeing supply chain challenges and that we're therefore working very closely with our suppliers to make sure we can keep our critical components coming in and our customers supplied. I'll in the supply chain. I'll now hand over to Alan who's going to go through the financials in more detail. Thank you, Will, and good morning, everybody. As well as already noted, we've experienced a year of strong recovery with significant growth in revenue, profitability and cash generation. Throughout this pandemic due to the skills and dedication of our people, the group has maintained our strong customer support, Global Supply Chains and All Other Business Operations. Revenue in the year amounted to €565,600,000 Compared to €510,200,000 last year, an increase of 11% or 13% at constant exchange rates, which has resulted in an adjusted profit before tax of €119,700,000 compared to €48,600,000 in the prior year. This gives a return on revenue of 21% compared to 10% for the previous year. Adjusted profit before tax is one of the key performance measures used by the Board to monitor the underlying trading performance of the group, And the following items are excluded from adjusted profit before tax. Gains of £22,900,000 from forward contracts, Most U. S. Dollar denominated deemed ineffective for cash flow hedging with losses of CHF21,600,000 in the previous year. These gains and losses have had no impact on our cash balances and no additional contracts have been designated as ineffective this year. Euros 23,800,000 of restructuring costs in 20 20, which have not been repeated this year. And finally, 3rd party advisory fees relating to the a formal sale process of €3,200,000 in the current year only. The result in statutory profit before tax Was €139,400,000 compared to €3,200,000 last year. The effective tax rate for the year is 20.1% compared to 91% in the previous year. Last year's tax rate was adversely impacted by an impairment of deterred tax assets on tax losses. Earnings per share on an adjusted basis is 132p up from 51p last year and on a statutory basis is 153.2p up from 0.4p last year. An interim dividend of 14p per share was paid during the year and the Board are proposing a final dividend of 52p per share in respect of the year, giving a full year dividend of 0.66p representing a 10% increase over the 2019 dividend. Moving on to the income statement. This slide shows details of our income Statement and the profit bridge shows the movements that reconcile the adjusted profit before tax of €48,600,000 for last year to the €119,700,000 this year. We have achieved a €45,900,000 improvement in gross margin Attributable to a €55,400,000 increase in revenue and a 1% improvement in gross margin as a result of both cost reductions and improved manufacturing efficiencies. We have also seen other cost savings resulting from our fit for the future restructuring and resizing activities undertaken in 2020. The average headcount This year is reduced to 4,437 from 4,797 in the previous year. With labor costs, excluding bonuses and grants, reducing to €208,200,000 compared to €225,800,000 last year. By cost category, we have seen A £15,200,000 reduction in engineering costs, which is consistent with our expectations and focus on key design projects. In addition to labor cost savings, impairments relating to capitalized development costs amounting to €1,100,000 this year compared with €9,900,000 in 2020. The net expenditure of €72,100,000 in the year includes our continuing commitment to support existing products and technologies. A €14,200,000 reduction in distribution costs, which is the result of significantly reduced travel and exhibition spend during the pandemic, reduced labor costs and favorable currency movements. A €7,400,000 increase in the administration overhead, excluding FSP related costs, which reflects labor cost reductions offset by impairments relating to an associated company and the reinstatement of performance bonuses this year. A €3,300,000 reduction in net Financial expense was a small net expense of €600,000 this year, mostly relating to revaluations of foreign currency denominated Intragroup bounces being offset by rolling forward currency contracts. Turning to cash flow, This sources and uses of cash and bank deposits bridge tracks the movements from our opening cash and bank deposit balances of £120,000,000 to our closing position of £215,000,000 Our operating profit Before non cash items and research and development costs gave a cash inflow of £206,000,000 and we have seen a net £3,000,000 cash outflow from changes in working capital, excluding currency translation effects. Significant cash outflows in the year relating to our capital allocation Strategy include £59,000,000 of research and development costs, £11,000,000 of CapEx and £10,200,000 of dividends paid. Other significant cash outflows include £10,000,000 of tax payments and £8,900,000 of pension scheme funding. Our strong cash and bank deposits balance At the end of the year, together with our future trading prospects underpin our latest going concern and viability assessments. Now moving on to capital expenditure. Of the €10,900,000 CapEx in the year, £9,900,000 related to plant and equipment. This overall lower expenditure in the year is in line with our expectations following significant infrastructure investments in recent years. We are planning to increase our capital expenditure in the current financial year, including new production equipment to support this business growth, the final stage payment of our new distribution facility in South Korea And additional investment in IT infrastructure includes our new global ERP system. I'll now hand back to Will. Thank you, Alan. So we touched on the Renishaw purpose earlier. Now we're going to have a look at the strategy. And 2 really strong themes here: Engineering, We've always and we will continue to invest strongly in our engineering to make sure that we've got the world class products to take us forward and grow the business. One of the key things we're looking at though is driving here is focus, particularly on making sure that a Small number of really strategically important key new products have all the resources assigned to them to get them out as soon as possible to the market. From a sales and marketing point of view, again, we're going to make sure that we invest to support our customers all around the world. One of our real pushers here at the moment is making sure that we are getting the design wins, winning new business, particularly with a number of our OEM new products that are coming through to make sure they are getting the push from the sales organization to generate the revenue and profit of the future. So in our Position Measurement business, we've recently launched The Fortis Enclosed Optical Encoder. So this is an encoder designed for really harsh environments. A significant market here is the machine tool Market. So we've launched now this product. We've been working closely. Our sales organization have really been collaborating with machine tool builders To prove this out, show the advantages it has over the competition and start getting it designed in onto machine tools. Objective here really is to get this such that it's either an option that when someone is specifying a machine tool to buy they specify the Renishaw Fortis Encoder All such that on higher end machines it is a standard fitment. This is a significant market. It's a large market. We have an excellent new product coming through and there are Strong opportunities for growth here. Staying with product designed to go onto the machine tool but switching to our I'm product line, We've also been really pushing our new NC4 Plus Blue non contact tool measurement system. By switching to the blue laser, We've really pushed forward the performance to the precision that you can measure particularly small cutting tools too. We've also introduced new software cycles here which add much more functionality for the end user. So we're seeing some really good performance advantages with the NC4 Plus Blue. Sales organization are very much aligned for making sure This is designed in and integrated into machine tool builders. A great example here is with DMG Mori. You can see in a picture, this is a DMU 50, which is a high end small and high volume also 5 axis milling machine. Within our Industrial Metrology business, we're also really pushing on the new sensors for our REVO platform. Firstly, you can see here one that we have launched and is in a very much commercialization phase, which is a vision sensor to go on to Revo. Here really we're saying, look, when you want to measure high speed tactile points with Rivo, we can now complement it with some vision measurements as well. Application you can see here, which we think is really important going forward, this is part of the high investment that we're seeing in EV at the moment, It's actually on measuring some of the delicate insulating materials that go on to an electric motor. We've also just launched our REVO Ultrasonic Probe. So this allows internal measurements to be taken as well. So you can measure the thickness of something. Here you can see in the picture it's measuring part of an undercarriage. What the Revo can do with its 5 axis positioning is making sure you're getting Absolutely right measurement normal to the surface of the part. Here applications also Our 4 such parts as hollow aerospace blades where clearly the non destructive ability to measure those on a CMM is gathering a lot of interest. So we've also just launched our new radio transmission system for our machine tool spindle probes. So just put this into context, this is the communication that allows the probe and the spindle of the machine tool to communicate wirelessly back to the Machine Tool Control. New system is very much a platform for the future allowing us to add in new functionality in the upcoming years, But the immediate stuff offers the customer a smaller radio interface with improved battery life. It also offers our new Opti Logic which is a much, much easier way of configuring a probe by holding a mobile phone up to the spindle probe. Now the probe can be configured, paired with the receiver, a real step forward in terms of ease of use and something our customers have been very keen on. We've also launched our Renishaw Central software. This allows remote connection to Renishall Devices such as the Quater Machine Tool Probe on the shop floor. This we've been quite open with this. We can either run it ourselves or we will collaborate with others. It will run on other people's platforms as well. Our real area of expertise and the bit we bring something really quite unique, we believe, to this is it was with process control. So how do you use metrology to keep a manufacturing process on track. So exciting developments here, still early days and lots of collaboration work ongoing here and also development with trial customers. And finally, looking at our Additive Manufacturing business, as I talked about earlier, Very much our focus here has been on supporting a number of key accounts on making sure they're developing, improving out the products of the future for them using our AM equipment, and that's very much focused on our 500Q platform. The 500Q is very much designed for mass volume manufacturing. The 500Q Flex, which is new, delivers a version of the Q where it's much easier to Change the type of powder that is in the machine. So for some early prove out builds, this allows our customers more flexibility before they move on to a production process with the 500Q itself. Clearly, sustainability is key for all of us going forward. We're going to be announcing a date for the Renishaw net 0 emissions target soon. In the meantime, I think it's worth looking at what we have done to actually reduce our greenhouse emissions over the last few years. So we have spent significant CapEx and this has allowed us with initiatives such as putting solar panels on many of our buildings to reduce our emissions by 39% since 2015. Really also worth noting, the products we have such as additive manufacturing allowing products to be made Lighter, for example, in aerospace or engines to be made more efficient through our metrology products, that actually we have a really key role to play here with our products helping our customers meet their own net zero ambitions going forward. Looking now at this financial year, we started with a strong Q1. Revenue was up 35% to £157,800,000 adjusted profit before tax, up from £18,300,000 to £41,700,000 We've also got a record order book and strong cash balances of 234,800,000 As a Board, we remain confident in the long term prospects of the group, And we think we're really well placed to take advantage of the opportunities that are coming forward with the recovery that we're seeing in the global economy. Okay. Over to you, Chris. Thanks very much, Will. And thanks also to Alan for his presentation. As Will said, we're now going to move to the question and answer session. We're now joined by Sir David McMurtry, Runnersholl's Executive Chairman, for this Q and A session. We'll aim to answer as many questions as possible by our scheduled close time of 11 So we'll kick off with a question from Tim Owen. Good morning, Tim. And he asks, can you give more information on the review that led to a 3 week delay in issuing the annual results and a significant fall in the share price. And I think that one's going to go to Alan. So over to you, Alan. Thank you, Chris, and thank you, Tim, for the question. The result delay It was not related to the formal sale process. In the final stages of our audit, An issue was highlighted which required some additional management time and audit time for them to review and also fully document their files. I'm pleased to report that Nothing of any significance arose from the review. Okay. Thanks, Alan. And we'll move now to the next question, which is another question from Tim. Will the interim dividend usually paid at the start of April be paid in the current tax year to avoid the extra 1.25 percent dividend tax? This has been done before when dividend taxes were reintroduced, and I think that's another one that's going to Alan. Yes. Thank you, Tim. This we will consider this when we discuss Our interim dividend at the, our half year results. Okay. Thanks, Alan. And a question now from Mark Davies Jones. Given supply chain and logistics issues currently, would you expect the record order book to ship over a longer period than normal, I. E, for sales growth to be constrained by these factors in the current year. I think that one's one for Will. Thanks, Chris. So yes, look, if we look at our order book, I think the first thing to say is a slight Different profile to normal, really handy for us. We are getting more forward visibility from some of our bigger encoder customers, Those semiconductor electronics CapEx customers, so we are getting more certainty from them as they have more certainty in their businesses going forward than usual. So that clearly will affect the delivery schedule there. As As I mentioned, Nick, clearly everyone is seeing there are supply chain issues. Our manufacturing group, with the support of our engineering teams, are doing an absolutely fantastic job of keeping product Going smoothly out the door, keeping our customers supplied. For sure, at the moment, if we could accelerate things, we would be shipping more. So yes, and but I have great little confidence with all the efforts with our engineering and manufacturing teams that will do a really good job Thanks very much, Will. We now have a question relating to 3 d printing, again from Tim Owen. You have significant technology in the 3 d printing area. How do you plan to exploit this more in the future? I'm thinking that's probably one for Will. Yes. So really interesting area of the business. So yes, we have some really great technology here. Really a lot of it focused around the productivity, which is key for our customers getting cost effective parts made, obviously. They understand the advantages You can get from unique features. Now it's opening up the market for more parts with that. With the technologies we've got Coming through, what we're really trying to do is open up the mass market of making it just cheaper to print everything, the machine traditionally. So yes, there's the stuff we have currently available in the market, market leading in terms of that, and then we're really looking investing of how we take that forward. And we have some neat stuff internally, which we clearly can't talk about yet, but it gives a really exciting future for this part of business. Okay. Thanks very much, Will. So another supply chain related question now. Are most Your components sourced in the U. K. Will? All over Everywhere, clearly, we've got a whole range of different parts coming in from the more raw materials to electronics All over the place, so a real mixture there. And yes, clearly supply chain challenges, but in general, we're doing a good job of coping with that. Thanks, Will. And a question here from Jonathan Hearn. Good morning, Jonathan. Can you talk about what you are seeing in Aerospace? Are you starting to see signs of a recovery coming through? Also, how are automotive production issues impacting demand for your metrology products? I think that's another one for Will. Yes. So look, as we talked about before, we have, I guess, complementary routes to market when we go into aerospace, automotive and other industries. So So a lot of our product is being sold through machine tool builders, CMM builders, going there in which we have less visibility as to exactly how some of the underlying markets are doing. What we are seeing now though is, for example, with aerospace, with additive manufacturing and with our REVO product, we are dealing more and more direct firsthand with these customers. And certainly what we see is that yes, there are challenges in aerospace at the moment, but they need to invest for the future, particularly from a net zero point of view. And our technologies can allow them to deliver significant benefits. A really exciting one here being the ultrasonic probe that we talked about earlier and the capabilities that I can give them. Automotive, again, Very interesting. So certainly, we are seeing a period really of understanding what the metrology challenges are for all these new parts They are having to manufacture for the EV. The motors are a particularly interesting area where the combination of revo with the 5 axis Revo with touch and vision is proving a successful Solution for some of their challenges with the insulation and the flat tire parts there. Okay. Thanks, Will. There's another question here for Mark Davies Jones. R and D declined as a percentage of sales in 2021. Is some of this temporary? Or do you expect a more lasting reduction In this metric, as you focus your spend, that's probably one for Will. So this is a really key area for us. We have no shortage of Really exciting projects that we want to gear up and accelerate. We have focused over the last couple of years of getting more productive with the resource that we have of trying to get More prioritization in place and getting some of the significant projects through to the market. We're now at a point where a lot of the technology, the research stuff is coming to a point It needs to be resourced more and accelerated through, and we have real confidence on these projects. So yes, we will be investing and carrying on what we've done throughout our history of making sure we push that through and do spend on R and D. Thanks, Will. Another question from Jonathan Hurn now. You talk about implementing a new ERP system this financial year. Will these costs be expensed under IAS 38? Will they be treated as exceptional? And what will the costs be? And I think this one's going to go to Alan. Thank you, Chris. Thank you, Jonathan. We will be looking at the accounting standard shortly to Determine the treatment for the current year. If significant costs are incurred in the income statement, we will consider How best to communicate the meaning of in our next announcement. We're not talking huge Sounds on this investment, but Okay, Alan. Thank you. And It's an FSP related question now. This is from Louis Vier. I understand you I've received bid offers that were not deemed appropriate. Can you please elaborate as to level of the offers received And why they did not meet stakeholders' interests. Thank you. That one, I think, going to Will. So look, there's really not too much we can talk about more here than we have already put out in public Due to confidentiality, all I can say is that we had some very good conversations as a Board with the principles that we put out in the 1st place, making sure that All stakeholders were considered and at the end decided to close the process and continue and make sure that we focus on Delivering our plan and the vision for the company. Thanks, Will. And there's a question here on this financial year. Do you expect FY 2022 to show the normal seasonality? Will that be offset by the strength of the record order book? And that one, I think, is going to Will. Yes. So we're really trying to understand at the moment quite where the market will be going over the next period. Certainly, all the indications are at the moment that we are on with a very strong position. As I said earlier, we're getting more visibility for some of the semicon customers and also the general feedback from the last Machine at all show recently, the IMO show was positive going forward at the moment. So Our real priority is to make sure that we are well placed from a manufacturing point of view to make sure we can support All our customers quickly. Okay. Thanks, Will. There's a question well, a number of questions actually from Will Turner, good morning, Will, who asks can I ask 3 questions? Yes, you can, Will. First one, you reduced capacity in additive manufacturing. Are there signs that this market is coming back? And are you continuing to invest R and D in Additive Manufacturing? The second Part of the question is how has automotive markets performed in Q1 of this year? And final part, what are you seeing on the ground in China? Any changes in market access? And I'll start this one with Will? So let's pick up the additive manufacturing part first. So look, I wouldn't rephrase it as reduced capacity. What we did was we focused on manufacturers looking at higher volume parts here rather than small volume potential customers. So from a sales point of view, we've got more focused and the R and D efforts that we're putting in Are focused around that as well. Certainly, I mean, very timely, we just had actually an R and D tech showcase on our additive manufacturing Part of the business yesterday seeing that the great technologies that are coming through, which we can't talk about yet, very much though looking at do we drive the productivity forward by improving the science and maximizing the use of the laser on the melt pool and optimizing productivity there and also on the optimization of the automation of the machines. So yes, we've got some really good Going in there into our new products coming through, so a good place there And also a growing maturity in the industry and as I've mentioned earlier also about That cost per part opening up more and more opportunities for us. Secondly, automotive markets, Hard for us to say, I'd say majority of our sales, the vast stuff that ends up in automotive is going through machine tool builders. So we don't get the first hand data there. Certainly, there is significant investment, An opportunity more for investment going forward from our gauging and our CMM systems product lines. So in terms of China market access, everything is still very positive. So we are not seeing Any issues there at the moment? Okay. Thanks for that, Will. Question here from Anthony Plom. Good morning, Anthony. I can see average headcount for 2021 financial year was 4,437 people. What was it at year end, though? And how many more staff do you think will be added in the current financial year? That one's going to go to Alan. So Thank you for the question. We At the end of June, we had 4,664 staff, and we are currently recruiting primarily in our manufacturing arena. So there are there will be certainly another 200 or 300 people by the end of this financial year. Okay. Thanks, Alan. So a question here from Neil Mackey. It's a follow-up question, Marie, to one of the earlier answers. About the suggestion for paying the next interim dividend early in the current tax year to avoid an increase in dividend tax. However, getting the dividend early will push up the income received in the current tax year, possibly causing the dividend to 4% within a higher Tax Bracket. And I'll push that one over to Yes. Thank you for the follow-up. As I said earlier, We will be considering these issues when we discuss the interim dividend at the time of announcing our half year results. Thanks, Alan. And a question here from Anthony. Interesting news on the neurological product line working with a major pharma company. How quickly do you think this could move? And what milestones should we look out for? And I think that's one for Will. So yes, this is positive news here. This is early stages. But the good news for us is that we get revenue coming in, so people are paying for working with us and using our technology At early stages, preclinical stages, what we really want and what we're working on for this year is to make sure that we have A number of pharma companies working with us on these programs, so that's really a strategic priority for the Neuro Group. That's what's going to fuel the long term growth of that business. Thanks, Will. Question here from Chelly. Good morning. Semicon is performing strongly as an and Mark here. Are you able to quantify your latest exposure in terms of share of revenues or share of the order book. And that's one for Will. Yes. I said the challenge we always have of talking about the end markets is in some areas we know, so sometimes we'll sell like with our encoders directly To people where we know what they are doing with our products, but a lot of the stuff, so we need a total order book, a lot of our stuff is going through Intermediaries like machine tool builders, system integrators and then going on to the end users. So in terms of overall percentage, we can't say. Certainly for our encoder Product line then semiconductor and electronics, capital equipment and display technology is a Large share. What we will see is a diversification there over time. So the market that we have launched into with our enclosed Encoders, of which are primary end market is the machinable end market, is a very large market. So we will See a shift over time there from our encoder product line and diversification. Okay. Thanks, Will. Okay. Sorry, just sort of sifting through questions here. So Got a question here from Brendan Burgess, who comments that Uncertainty and lack of information creates a lack of confidence. The 3 week delay was unprecedented. We need to give some more information if only to kill off speculation. The void gets filled with speculation and rumors. For example, could this issue recur? So I'm going to push that one over to Alan? Thank you, Chris. We can't disclose the specific nature of the issue, but I can assure you that it's an issue that we do not expect to reoccur. Okay, Alan. Questions on semicon. Slightly there's a slightly different angle on this one though. So it's from Nishag. What is the extent of double ordering going on? And do you see any risks of an inventory correction This current year and I'll throw that one to Will. Yes. So good question and one we are really asking ourselves. We think it's limited, but clearly, it's a natural human reaction in these times is to try and Increase safety stocks everywhere when supplies are shorter. We think we have a good relationship with a lot of our large customers And we are managing that well, so we don't end up with this, but it's a very good question to ask. Okay. Thanks, Will. Another question here from Tim, Owen. Would Sir David and John Deere Allow their shareholdings to go below 50% if an institution wanted to acquire a significant holding. I think that one's going to go to Will. Look, as I said earlier, unfortunately, we can't talk About this, we this is all confidential. It goes back to what we talked about before. The nice thing with the strong position we are in As it allows the Board to make the decision for the future of the company is what is in the best interest of all the stakeholders. And really we can't add anything more to that today. Okay, Will. There's a question here from Richard Page. It would appear that you have delivered stronger profitability in the Q1 of 'twenty two compared with the implied level of profitability in Q4 of 'twenty one financial year. PBT of 41,700,000 margin 26.4 percent in Q1 against £35,300,000 margin, 22.3 percent in Q4 of a similar level of sales, £158,000,000 Could you provide a bit more color here, please? Is this driven by mix or efficiency Improvements. And that's going to go to Alan. Thank you. We would the quarter 4, We did see additional bonus payments and the JV impairments and year end adjustments, which were not reoccurring in the Q1 of this year. So we have seen an improvement quarter on quarter. Okay. Thanks, Alan. Question here from John Thurston. This is also FSP related but with a slightly different angle. So I've been of a similar age. I do So I empathize with the founders' desire to consider retirement and the for sale process. I also concur with their conditionality. Do you consider that company performance and market conditions were more influential on the lack of a satisfactory offer Then the conditions, that one's going to Will. I Don't think so here. So company performance, we're pleased with good market conditions at the moment. But actually, the really positive thing, positive feedback was very much on the future. So what we have planned and the technology we have coming through that's going to underpin our growth over the next many years. So I guess all I would add to this is Sorry. All I would add to this one here is that what we have is really is our focus at the moment is making Sure that on the plan of bringing forward these new products, developing the markets is really successfully delivered. So We're in a good place, and we can see with the results of the Q1 that things are going well. Okay. Thanks, Will. Okay. It's a question from Mark Davies Jones. Could Sir David please comment on his ongoing role in the strategy and management of the company and how he thinks about the longer term options for his substantial shareholding post the end of the FSP. So I'm going to bring Sir David in on this one. I'm delighted to be able to support Well, I think what it tends to do, but I'm taking a specific interest in additive and spending most of my time Trying to make making sure that the next generation product is a real success. Okay. Thanks very much, David. I think that's all the questions. I think we've pretty much covered everything, didn't answer every specific question, but the themes were picked up in various questions. So thanks, everyone, for attending today's event. We will, as ever, aim to post a recording of today's webinar, including question and answer session on our Investor Relations pages by tomorrow morning. But just left me to say on behalf of the company, thank you for attending, and have a good day.