Half Year 2026 Genuit Group PLC Earnings Call

August 11, 2026

Speaker #1: What's to come? more on that in a minute. So, delighted to be here. I'm Joe Vorih, CEO of Genuit. I've got Tim Pullen, with me here, our CFO, as well as a few different members of our management team.

Joe Vorih: what's to come. More on that in a minute. Delighted to be here. I'm Joe Vorih, CEO of Genuit. I've got Tim Pullen with me here, our CFO, as well as a few different members of our management team. We'll all be around afterwards. Feel free to ask questions either during the session or afterwards. Let's hop into it. We're here to present our H1 results for Genuit Group for 2026. I'll give you just a quick scene-setting introduction, pass it over to Tim for the financial highlights, and then come back and definitely wanted to give you an update on the important and really good strategic progress we've made in the last six months. Of course, plenty of time for Q&A. Getting right into it. It won't surprise you that we have seen a challenging trading environment in the H1.

Speaker #1: we'll all be around afterwards, so feel free to ask questions either during the session or afterwards. So, let's, let's hop into it. So we're here to present our half-year results for Genuit Group for 2026.

Speaker #1: I'll give you just a quick, sort of, scene-setting introduction, pass it over to Tim for the financial highlights, and then come back and definitely wanted to give you an update on the important and, really good strategic progress we've made in the last 6 months.

Speaker #1: And of course, plenty of time for Q&A. So, getting right into it. it won't surprise you that we have seen a challenging trading environment in the first half; I'm really proud the actions that our team has taken in order to navigate that quite successfully.

Joe Vorih: I'm really proud of the actions that our team has taken in order to navigate that quite successfully. We have seen subdued market demand, and those lower volumes are really on account of several different factors, of course. Top of mind for a lot of people is the conflict in the Middle East and the impact that's had directly, which we'll talk a little bit about, but indirectly, which I think is true for just about everybody in our industry in terms of material prices and transport costs. Tim will talk about that as well as the work we've done to mitigate that. The other thing, too, is we're sitting here in a time where I think there's a bit of a lower UK growth so far. Remember entering the year, of course, we were all expecting a couple of rate cuts.

Speaker #1: we have seen subdued market demand, and those lower volumes are really on the count of, several different factors, of course. we've, most, you know, top-of-mind for a lot of people is the conflict in the Middle East and the impact that's had directly, which we'll, we'll talk a little bit about, but indirectly, which I think is true for just about everybody, in our industry.

Speaker #1: in terms of material prices and transport costs, and Tim will talk about that, as well as the, the work we've done to mitigate that.

Speaker #1: The other thing, too, is we're sitting here in a time where I think there's, a bit of a lower UK growth, sort of, so far.

Speaker #1: remember at the entering the year, of course, we were all expecting a couple of, rate point, rate cuts; clearly that hasn't happened. So we are in this kind of higher-for-longer environment.

Speaker #1: you tell me when?

Speaker #2: Yes.

Joe Vorih: Clearly, that hasn't happened, so we are in this kind of higher for longer environment. When you have a challenging trade environment, Genuit does what we always do, and we take decisive actions. We've done that yet again. Really proud again, as I said, of the work the team has done. Importantly, we've taken what I would characterize as balanced cost and price action. Weighing the interests of both our investors and our customers to make sure that we really offset the impact of inflation on our business model. We also have continued to simplify the business. This has been a longstanding journey, and we've been able to identify a few more options that we've taken that in the H2 will help accelerate some of the work that we actually thought was out there, but will begin to take impact and certainly improve our outlook entering 2027.

Speaker #1: But when you have a challenging trade environment, Genuit does what, what we always do, and we take decisive actions. we've done that yet again, really proud again, as I said, of what the work the team has done.

Speaker #1: Welcome, everybody. Good morning. Great to be here on what promises to be a fairly warm day, but not as warm as what's to come.

Joe Vorih: Welcome, everybody. Good morning. Great to be here on what promises to be a fairly warm day, but not as warm as what's to come. More on that in a minute. Delighted to be here. I am Joe Vorih, CEO of Genuit. I have got Tim Pullen with me here, our CFO, as well as a few different members of our management team. We will all be around afterwards. Feel free to ask questions either during the session or afterwards.

Speaker #1: More on that in a minute. So, delighted to be here. I'm Joe Vorih, CEO of Genuit. I've got Tim Pullen with me here, our CFO, as well as a few different members of our management team.

Speaker #1: Importantly, we've taken, what I would characterize as balanced cost and price action. So, weighing the interests of both our, our, our investors and our customers to make sure that we, really offset, the impact of inflation on our, on our business model.

Speaker #1: We'll all be around afterwards. Feel free to ask questions either during the session or afterwards. So, let's hop into it. We're here to present our half-year results for Genuit Group for 2026.

Joe Vorih: Let's hop into it. We are here to present our H1 results for Genuit Group for 2026. I will give you just a quick sort of scene-setting introduction, pass it over to Tim for the financial highlights, and then come back, and definitely wanted to give you an update on the important and really good strategic progress we have made in the last six months. Of course, plenty of time for Q&A.

Speaker #1: we also have continued to simplify the business. This has been a, a longstanding journey, and we've been able to identify a few more options that we've taken that in the second half will help, accelerate some of the work that we'd actually thought was out there, but will begin to take impact and, and certainly improve our outlook entering '27.

Speaker #1: I'll give you just a quick sort of scene-setting introduction, pass it over to Tim for the financial highlights, and then come back. I definitely wanted to give you an update on the important and really good strategic progress we've made in the last six months.

Speaker #1: And, of course, plenty of time for Q&A. So, getting right into it—it won't surprise you that we have seen a challenging trading environment in the first half. I'm really proud of the actions that our team has taken in order to navigate that quite successfully.

Speaker #1: And of course, we've made excellent progress integrating our two acquisitions we made last year in the second half. both are going really well, and we'll give you more fulsome updates on those.

Joe Vorih: Of course, we've made excellent progress integrating our two acquisitions we made last year in the H2. Both are going really well, and we'll give you more fulsome updates on those. Of course, underpinning all of this is the Genuit Business System, which we deploy across the business increasingly, and I'll share some examples of how that's impacting actually one of our acquisitions, too. In terms of outlook, our full-year expectations are unchanged. Of course, that means that we'll see a good step up in margin sequentially in the H2. We'll give you a few insights as to where that's coming from. Importantly, the simplification work I talked about is expected to deliver over GBP 4 million of annualized savings that will most primarily just impact 2027 and beyond.

Joe Vorih: Getting right into it. It will not surprise you that we have seen a challenging trading environment in H1. I am really proud of the actions that our team has taken in order to navigate that quite successfully. We have seen subdued market demand, and those lower volumes are really on account of several different factors, of course. Most top of mind for a lot of people is the conflict in the Middle East and the impact that has had directly, which we will talk a little bit about, but indirectly, which I think is true for just about everybody in our industry in terms of material prices and transport costs, and Tim will talk about that as well as the work we have done to mitigate that.

Speaker #1: of course, underpinning all of this is the Genuit Business System, which we deploy across the business increasingly, and I'll share some examples of how that's impacting actually one of our acquisitions, too.

Speaker #1: we have seen subdued market demand, and those lower volumes are really on the count of, several different factors, of course. we've most, you know, top of mind for a lot of people is the conflict in the Middle East and the impact that's had directly.

Speaker #1: In terms of outlook, our, full-year expectations are unchanged. Of course, that means that we'll see a good step up in margins sequentially in the second half.

Speaker #1: which we'll, we'll talk a little bit about, but indirectly, which I think is true for just about everybody, in our industry. in terms of material prices and transport costs, and Tim will talk about that, as well as the, the work we've done to mitigate that.

Speaker #1: We'll give you a few insights as to, as to where that's coming from. And, importantly, the simplification work I talked about is expected to deliver over $4 million of annualized savings.

Speaker #1: The other thing, too, is we're sitting here in a time where I think there's a bit of lower UK growth so far.

Joe Vorih: The other thing, too, is we are sitting here in a time where I think there is a bit of a lower UK growth so far. Remember, entering the year, of course, we were all expecting a couple of rate cuts. Clearly, that has not happened. We are in this kind of higher for longer environment. But when you have a challenging trade environment, Genuit does what we always do, and we take decisive actions. We have done that yet again, really proud, again, as I said, of the work the team has done. Importantly, we have taken what I would characterize as balanced cost and price action. So weighing the interests of both our investors and our customers to make sure that we really offset the impact of inflation on our business model. We also have continued to simplify the business.

Speaker #1: That will t that will, most primarily just impact 2027 and beyond. But again, it's the type of work that we do really making sure the business is fit for the future.

Joe Vorih: But again, it is the type of work that we do, really making sure the business is fit for the future. Importantly, and we will spend some good time on this, the regulatory and sustainability tailwinds, which are so important to our future growth and business model, are continuing to strengthen, and they are much closer. We have done a lot to invest to be ready for those, and I will give you some more on that in just a bit. In the meantime, let me turn it over to Tim to walk you through the numbers. Tim, over to you.

Speaker #1: Remember, at the beginning of the year, of course, we were all expecting a couple of rate cuts. Clearly, that hasn't happened. So we are in this kind of higher-for-longer environment.

Speaker #1: Importantly, and we'll spend some good time on this, the regulatory and sustainability tailwinds, which, which are so important to our future growth and business model, are continuing to strengthen and they're much closer.

Speaker #1: But when you have a challenging trade environment, Genuit does what we always do, and we take decisive actions. We've done that yet again. I'm really proud, again, as I said, of the work the team has done.

Speaker #1: We've done a lot to invest and be ready for those, and, I'll give you some more on that in just a bit. But in the meantime, let me turn it over to Tim to walk you through the numbers.

Speaker #1: Importantly, we've taken what I would characterize as balanced cost and price action. So, weighing the interests of both our investors and our customers to make sure that we really offset the impact of inflation on our business model.

Speaker #1: Tim, over to you.

Speaker #2: Great. Thank you, Joe. Good morning, everyone. Delighted to present our results for the first half of 2026 to you this morning. Thank you for coming.

Tim Pullen: Great. Thank you, Joe. Good morning, everyone. Delighted to present our results for the H1 2026 to you this morning. Thank you for coming. If we start with the financial highlights, you can see that we have actually got good revenue growth for the half at 3% on a reported basis, including the acquisitions that we bought last year offsetting a like-for-like decline of about 5%. If I remind you of our 4 months trading update to April, that was down about 8% at that point. So you can see that trading for May and June has been solid and obviously buoyed by the double-digit price increase that we put through in response to the cost inflation. So they are a very challenging market, as Joe sets out.

Speaker #2: If we start with the financial highlights, you can see that we've actually got good revenue growth for the half, at 3%, on a reported basis.

Speaker #1: We also have continued to simplify the business. This has been a longstanding journey, and we've been able to identify a few more options that we've taken that, in the second half, will help accelerate some of the work that we'd actually thought was out there, but will begin to take impact and certainly improve our outlook entering '27.

Joe Vorih: This has been a longstanding journey, and we've been able to identify a few more options that we've taken that in the H2 will help accelerate some of the work that we actually thought was out there, but will begin to take impact and certainly improve our outlook entering 2027. Of course, we've made excellent progress integrating our two acquisitions we made last year in the H2. Both are going really well, and we'll give you more fulsome updates on those. Of course, underpinning all of this is the Genuit Business System, which we deploy across the business increasingly, and I'll share some examples of how that's impacting actually one of our acquisitions, too. In terms of outlook, our full-year expectations are unchanged. Of course, that means that we'll see a good step up in margin sequentially in the H2.

Speaker #2: including the acquisitions that we, we bought last year, offsetting a like-for-like decline of about 5%. But I'll remind you of our four-month trading update to April.

Speaker #2: That was down about 8% at that point, so you can see that trading for, for May and June has been solid. And obviously, buoyed by the double-digit price increase, that we put through in response to the cost inflation.

Speaker #1: And of course, we've made excellent progress integrating our two acquisitions we made last year in the second half. Both are going really well, and we'll give you more fulsome updates on those.

Speaker #2: So although a very challenging market, as Joe sets out, but actually our profit just slightly down 1.6% at $43.9 million, and our EBIT margin down about 70 basis points, as a result.

Speaker #1: Of course, underpinning all of this is the Genuit Business System, which we deploy across the business increasingly. I'll share some examples of how that's impacting, actually, one of our acquisitions too.

Tim Pullen: But actually, our profit just slightly down 1.6% to GBP 43.9 million, and our EBIT margin down about 70 basis points as a result. Cash conversion remains very strong. We have the usual phasing where H1 is slightly lower than the full year, so over 70% cash conversion at the half, still on track for over 90% for the full year. Because we have a lot of confidence in our strategy execution over the medium term, we have held our dividend at 4.2 pence, despite those challenging market conditions. Leverage at 1.6x is well within the 1x to 2x range that we target, and that will de-lever further as we go through the H2 as well. Looking at the summary P&L. You can see there the revenue increase of 3% on a reported basis.

Speaker #1: In terms of outlook, our full-year expectations are unchanged. Of course, that means we'll see a good step up in margin sequentially in the second half.

Speaker #2: Cash conversion remains very strong. we have the unusual phasing where H1 is slightly lower than the full year, so over 70% cash conversion at the half, still on track for over 90% for the full year.

Speaker #1: We'll give you a few insights as to where that's coming from. And, importantly, the simplification work I talked about is expected to deliver over $4 million of annualized savings.

Joe Vorih: We'll give you a few insights as to where that's coming from. Importantly, the simplification work I talked about is expected to deliver over GBP 4 million of annualized savings. That will most primarily just impact 2027 and beyond. But again, it's the type of work that we do, really making sure the business is fit for the future. Importantly, and we'll spend some good time on this, the regulatory and sustainability tailwinds, which are so important to our future growth and business model, are continuing to strengthen, and they're much closer. We've done a lot to invest to be ready for those, and I'll give you some more on that in just a bit. But in the meantime, let me turn it over to Tim to walk you through the numbers. Tim, over to you.

Speaker #2: And because we have a lot of confidence in our strategy, execution over the medium term, we've held our dividend at 4.2 pence, despite those challenging, market conditions.

Speaker #1: That will, that will most primarily just impact 2027 and beyond. But again, it's the type of work that we do—really making sure the business is fit for the future.

Speaker #2: Leverage at 1.6 times is well within the 1 to 2 times range that we target. and that will delever further as we go through the second half as well.

Speaker #1: Importantly—and we'll spend some good time on this—the regulatory and sustainability tailwinds, which are so important to our future growth and business model, are continuing to strengthen, and they're much closer.

Speaker #2: So looking at the summary P&L, you can see there the revenue increase of 3% on a reported basis. it's important here, I think, to point out the, the gross margins, which have remained strong, which I think shows, the, the cost control and the price management that Joe was referring to coming through the P&L there.

Speaker #1: We've done a lot to invest and be ready for those, and I'll give you some more on that in just a bit. But in the meantime, let me turn it over to Tim to walk you through the numbers.

Tim Pullen: It is important here, I think, to point out the gross margins, which have remained strong, which I think shows the cost control and the price management that Joe was referring to coming through the P&L there. Obviously, we did have a bit of a lag there where we had inflation in March and April before price increases kicked in in May. So the H2 dynamic will be slightly different. Overall, though, that margin being affected by the cost and price lag, also by a couple of issues at Adey, which I will come on to talk about in the segmented results. But really offset to an extent by those accretive acquisitions coming through the P&L as well. So this is how our revenue breakdown looks. Water division representing about 70% of the business, our Climate division representing just under 30%.

Speaker #1: Tim, over to you.

Speaker #3: Great, thank you, Joe. Good morning, everyone. I'm delighted to present our results for the first half of 2026 to you this morning. Thank you for coming.

Tim Pullen: Great. Thank you, Joe. Good morning, everyone. Delighted to present our results for the H1 of 2026 to you this morning. Thank you for coming. If we start with the financial highlights, you can see that we've actually got good revenue growth for the half at 3% on a reported basis, including the acquisitions that we bought last year offsetting a like-for-like decline of about 5%. If I remind you of our four months trading update to April, that was down about 8% at that point. So you can see that trading for May and June has been solid and obviously buoyed by the double-digit price increase that we put through in response to the cost inflation.

Speaker #2: obviously, we did have a bit of a lag there where we had inflation in March and April before price increases kicked in in May, so the second half dynamic will be slightly different.

Speaker #3: If we start with the financial highlights, you can see that we've actually got good revenue growth for the half, at 3% on a reported basis.

Speaker #2: overall, though, that margin being affected by, the cost and price lag, also by a couple of, issues at AD, which I'll come on to talk about in the segmented results, but really offset to an extent by those accretive acquisitions coming through the P&L as well.

Speaker #3: Including the acquisitions that we bought last year, offsetting a like-for-like decline of about 5%. But I'll remind you of our four-month trading update to April.

Speaker #3: That was down about 8% at that point, so you can see that trading for May and June has been solid, and obviously buoyed by the double-digit price increase that we put through in response to the cost inflation.

Speaker #2: So this is how our revenue breakdown looks. water division representing about 70% of the business. Our climate division representing just under 30. and looking at it by sector, house building is about a third of our business.

Speaker #3: So, although a very challenging market, as Joe sets out, actually our profit was just slightly down—1.6%—at $43.9 million, and our EBIT margin was down about 70 basis points as a result.

Tim Pullen: So they're a very challenging market as Joe sets out, but actually our profit just slightly down 1.6% to GBP 34.9 million, and our EBIT margin down about 70 basis points as a result. Cash conversion remains very strong. We have the usual phasing where H1 is slightly lower than the full year, so over 70% cash conversion at the half, still on track for over 90% for the full year. Because we have a lot of confidence in our strategy execution over the medium term, we've held our dividend at 4.2 pence, despite those challenging market conditions. Leverage at 1.6x is well within the 1x to 2x range that we target, and that will delever further as we go through the H2 as well. Looking at the summary P&L, you can see there the revenue increase of 3% on a reported basis.

Tim Pullen: Looking at it by sector, house building is about a third of our business. Obviously, we have seen some, I think, resilience there in H1, but with an outlook that looks like it could be a bit weaker. Really, the strength of the Genuit portfolio is in that breadth across different areas. Almost a third of the business coming from RMI, 27% almost from non-housing, including commercial and civils and infrastructure type work, and about 10% internationally. It is worth pointing out that the Middle East, whilst we did see some direct revenue loss when the conflict erupted in March, April, that is now pretty much back to normal, and June was a good month for the Middle East operation. If we look at our profits, GBP 43.9 million underlying operating profit.

Speaker #2: Obviously, we've seen some, I think resilience there in the first half, but with an outlook that looks like it could be a bit weaker.

Speaker #3: Cash conversion remains very strong. We have the usual phasing where H1 is slightly lower than the full year, so over 70% cash conversion at the half, still on track for over 90% for the full year.

Speaker #2: But really, the strength of the Genuit portfolio is in that breadth across different areas. So, almost a third of the business coming from RMI, 27% almost from non-housing, including commercial and civils and infrastructure-type work.

Speaker #3: And because we have a lot of confidence in our strategy and execution over the medium term, we've held our dividend at 4.2 pence, despite those challenging market conditions.

Speaker #2: and about 10% internationally. It's worth pointing out that the Middle East, whilst we did see some direct revenue loss when the conflict, erupted in, in kind of March, April, that is now pretty much back to normal and July was a very, sorry, June was a good month for the Middle East operation.

Speaker #3: Leverage at 1.6 times is well within the 1 to 2 times range that we target, and that will delever further as we go through the second half as well.

Speaker #2: So if we look at our profits, 43.9 million underlying operating profit. It's just slightly down on a reported basis. as a result of those lower volumes, which obviously do affect our gearing, the cost inflation that we saw before price increases kicked in, and those operational issues.

Speaker #3: So, looking at the summary P&L, you can see there the revenue increase of 3% on a reported basis. It's important here, I think, to point out the gross margins, which have remained strong, which I think shows the cost control and the price management that Joe was referring to coming through the P&L there.

Tim Pullen: It is just slightly down on a reported basis, as a result of those lower volumes, which obviously do affect our gearing, the cost inflation that we saw before price increases kicked in, and those operational issues. We do have GBP 5 million contributed by the acquisitions, which are accretive on a margin basis. We have also been working on the cost base in this environment to bring forward or accelerate our simplification initiatives, which particularly affects the Davidson businesses. I will talk a bit more on those when we look at Water in particular. If you break it down then into the segmentation, you can see both divisions growing on a reported basis. That climate reduction in profitability, really the majority of that is those two issues. Looking at Climate in particular, revenue there is up 2.4% on a reported basis. It is down 8% on a like-for-like basis.

Tim Pullen: It is important here, I think, to point out the gross margins, which have remained strong, which I think shows the cost control and the price management that Joe was referring to coming through the P&L there. Obviously, we did have a bit of a lag there where we had inflation in March and April before price increases kicked in in May. The H2 dynamic will be slightly different. Overall, though, that margin being affected by the cost and price lag, also by a couple of issues at ADEY, which I will come on to talk about in the segmented results, but really offset to an extent by those accretive acquisitions coming through the P&L as well. This is how our revenue breakdown looks. Water division representing about 70% of the business, our Climate division representing just under 30.

Speaker #2: We do have 5 million contributed by the acquisitions, which are accretive on a margin basis. And we've also been working on the cost base in this environment to bring forward or accelerate, our simplification initiatives, which particularly affects the Davison businesses.

Speaker #3: Obviously, we did have a bit of a lag there, where we had inflation in March and April before price increases kicked in in May, so the second half dynamic will be slightly different.

Speaker #3: Overall though, that margin is being affected by the cost and price lag, also by a couple of issues at AD, which I’ll come on to talk about in the segmented results. But really, these were offset to an extent by those accretive acquisitions coming through the P&L as well.

Speaker #2: I'll talk a bit more on those when we look at water in particular. If you break it down then into the segmentation, you can see both divisions growing on a reported basis.

Speaker #2: that climate, reduction in profitability really the majority of that is those two, issues. So looking at climate in particular, you know, revenue there is up 2.4% on a reported like-for-like basis.

Speaker #3: So this is how our revenue breakdown looks: Water division representing about 70% of the business, our Climate division representing just under 30%. And looking at it by sector, house building is about a third of our business.

Speaker #2: But there's two different dynamics going on there, which are important to unpack. So ventilation is actually one of our relatively strong sectors, in the first half of the year.

Tim Pullen: Looking at it by sector, house building is about a third of our business. Obviously, we have seen some, I think, resilience there in H1, but with an outlook that looks like it could be a bit weaker. But really the strength of the Genuit portfolio is in that breadth across different areas. Almost a third of the business coming from RMI, 27% almost from non-housing, including commercial and civils and infrastructure type work, and about 10% internationally. It is worth pointing out that the Middle East, whilst we did see some direct revenue loss when the conflict erupted in March, April, that is now pretty much back to normal, and June was a good month for the Middle East operation. If we look at our profits, GBP 43.9 million underlying operating profit.

Tim Pullen: There are two different dynamics going on there, which are important to unpack. Ventilation is actually one of our relatively strong sectors in H1. Actually, if you look at Ventilation on a trailing 12-month basis, we are about flat, which in this market is pretty good. Both on the commercial side, in particular, the schools sector, which Joe will talk a bit more about in our strategic update section, but also in residential as well, and the continuing theme of the addressing of damp and mold problems in social housing. Ventilation remains strong, and really that is offset to an extent by our heating business, which is weaker. There, we are more exposed to the RMI market in our Adey business, associated with boilers, and in our new heat business in underfloor heating.

Speaker #3: Obviously, we've seen some, I think, resilience there in the first half, but with an outlook that looks like it could be a bit weaker.

Speaker #2: And actually, if you look at ventilation on a trailing 12-month basis, we're about flat, which in this market is, is pretty good. Both on the commercial side, in particular the schools sector, which Joe will talk a bit more about in our strategic, update section, but also in residential as well.

Speaker #3: But really, the strength of the Genuit portfolio is in that breadth across different areas. So, almost a third of the business comes from RMI, and almost 27% from non-housing, including commercial, civils, and infrastructure, time work.

Speaker #3: And about 10% internationally. It's worth pointing out that the Middle East—whilst we did see some direct revenue loss when the conflict erupted in, in kind of March, April—that is now pretty much back to normal, and July was a very—sorry, June was a good month for the Middle East operation.

Speaker #2: And the continuing theme of the addressing of damper mole problems in, in social housing. So ventilation remains strong. And really, that's offset to an extent by our heating business, which is weaker.

Speaker #2: there, you know, we're more exposed to the RMI market in our AD business, associated with boilers and then our new heat business in underfloor heating.

Speaker #3: So, if we look at our profits, £43.9 million underlying operating profit—just slightly down on a reported basis—as a result of those lower volumes, which obviously do affect our gearing, the cost inflation that we saw before price increases kicked in, and those operational issues.

Tim Pullen: It is just slightly down on a reported basis as a result of those lower volumes, which obviously do affect our gearing. The cost inflation that we saw before price increases kicked in, those operational issues. We do have GBP 5 million contributed by the acquisitions, which are accretive on a margin basis. We have also been working on the cost base in this environment to bring forward or accelerate our simplification initiatives, which particularly affects the Davidson businesses. I will talk a bit more on those when we look at Water in particular. If you break it down then into the segmentation, you can see both divisions growing on a reported basis. That Climate reduction in profitability, really the majority of that is those two issues. Looking at Climate in particular, revenue there is up 2.4% on a reported basis. It is down 8% on a like-for-like basis.

Speaker #2: There we are seeing lower levels of renovations extensions and refurbishments, etc., and li therefore lower levels of business. Two specific i-issues in AD that haven't in the first half that won't recur in the second are one of slow-moving stock provision of one and a half million, related to, some particular products, and also a supplier issue, with an impact of about 0.8 million and that's the loss of sales plus the cost of addressing, that, that issue.

Tim Pullen: There we are seeing lower levels of renovations, extensions, and refurbishments, et cetera, and therefore lower levels of business. Two specific issues in Adey that happened in H1 that will not recur in H2 are, one, a slow-moving stock provision of GBP 1.5 million, related to some particular products, and also a supplier issue with an impact of about GBP 0.8 million, and that is the loss of sales plus the cost of addressing that issue. We are confident that both items have been root caused and will not recur in H2. On the positive news front, we have seen really good progress in integrating Monodraught into our climate business. Actually, the technical integration of the controls capability is a fantastic news story.

Speaker #3: We do have £5 million contributed by the acquisitions, which are accretive on a margin basis. And we've also been working on the cost base in this environment to bring forward, or accelerate, our simplification initiatives, which particularly affect the Davison businesses.

Speaker #3: I'll talk a bit more on those when we look at water in particular. If you break it down, then, into the segmentation, you can see both divisions growing on a reported basis. That climate reduction in profitability, really the majority of that is those two issues.

Speaker #2: We're confident that both items have been root caused and won't recur in the second half. On the positive news front, we've seen really good progress in integrating monodraft into our climate business, and actually the technical integration of the controls capability is a fantastic news story.

Speaker #3: So, looking at Climate in particular, revenue there is up 2.4% on a reported basis and down 8% on a like-for-like basis. But there are two different dynamics going on there, which are important to unpack.

Speaker #2: So we can now go to market with a combined school solution with new air mechanical ventilation and monodraft hybrid ventilation, we think a unique offering in the marketplace, and we've already received our first orders in July.

Tim Pullen: We can now go to market with a combined school solution with Nuaire mechanical ventilation and Monodraught hybrid ventilation, we think a unique offering in the marketplace, and we have already received our first orders in July. Great momentum there. The Water division revenue is about 4% higher on a reported basis, about 3% lower on a like-for-like basis. Residential markets have been subdued, I think both in new house building and in the RMI sector. We have seen some project delays in civils and infrastructure markets, really a reflection of lower business confidence in the current macro environment. But there are some positive areas as well. Our Manthorpe business actually grew year on year in the H1, as did our Italian business and also our operations in Ireland as well.

Tim Pullen: There are two different dynamics going on there which are important to unpack. Ventilation is actually one of our relatively strong sectors in H1. Actually, if you look at ventilation on a trailing 12-month basis, we are about flat, which in this market is pretty good, both on the commercial side, in particular the schools sector, which Joe will talk a bit more about in our strategic update section, but also in residential as well, and the continuing theme of the addressing of damp and mold problems in social housing. Ventilation remains strong, and really that is offset to an extent by our heating business, which is weaker. There, we are more exposed to the RMI market in our ADEY business associated with boilers, and in our new heat business in underfloor heating.

Speaker #3: So, ventilation is actually one of our relatively strong sectors in the first half of the year. Actually, if you look at ventilation on a trailing 12-month basis, we're about flat—which, in this market, is pretty good.

Speaker #2: So great momentum there. The water division, revenue is about 4% higher on a reported basis, about 3% lower on a like-for-like basis. residential markets have been subdued.

Speaker #3: Both on the commercial side, in particular the schools sector—which Joe will talk a bit more about in our strategic update section—but also in residential as well, and the continuing theme of addressing damp or mold problems in social housing.

Speaker #2: I think both in new house building and in the RMI sector. And we have seen some project delays in civils and infrastructure markets, really a reflection of lower business confidence in the current macro environment.

Speaker #3: So, ventilation remains strong, and really that's offset to an extent by our heating business, which is weaker. There, you know, we're more exposed to the RMI market in our AD business, associated with boilers, and then our new Heat business in underfloor heating.

Speaker #2: But there are some positive areas as well. Our MANTHORP business, actually grew year on year in the first half of the year, as did our Italian business and also our operations in Ireland as well.

Speaker #2: So whilst that international sector is smaller for us at the moment, it does show we have some strength in diversification there. underlying operating profit, is broadly flat, on a like-for-like level.

Tim Pullen: Whilst that international sector is smaller for us at the moment, it does show we have some strength in diversification there. Underlying operating profit is broadly flat on a like-for-like level, really demonstrating strong price and cost management, as Joe says. This is the sector that is most affected by the cost inflation. Obviously, we saw rapid inflation in March. We have seen that whilst the situation remains volatile, we have not seen the worst case scenario, so we have not seen supply shortages, but we do still see elevated levels of polymer costs, and hence our price increases have been important to stabilize things, and you can see the business has covered that well with this result. Again, the acquisition side of things has gone really well. Davidson has been integrated well, and we have accelerated that simplification.

Speaker #3: We are seeing lower levels of renovations, extensions, and refurbishments, etc., and therefore lower levels of business. Two specific issues in AD that happened in the first half, that won't recur in the second, are: one, a slow-moving stock provision of £1.5 million, related to some particular products.

Tim Pullen: There, we are seeing lower levels of renovations, extensions, and refurbishments, et cetera, and therefore lower levels of business. Two specific issues in ADEY that happened in the H1 that won't recur in the second are, one, a slow-moving stock provision of GBP 1.5 million related to some particular products, and also a supplier issue with an impact of about GBP 0.8 million, and that's the loss of sales plus the cost of addressing that issue. We're confident that both items have been root caused and won't recur in the H2. On the positive news front, we've seen really good progress in integrating Monodraught into our climate business, and actually the technical integration of the controls capability is a fantastic news story.

Speaker #2: Really demonstrating strong price and cost management, as Joe says. This is the sector that's most affected by the cost inflation. obviously, we saw rapid inflation in, in March, and we've seen that whilst the situation remains volatile, we haven't seen the worst-case scenario.

Speaker #3: And also a supplier issue, with an impact of about £0.8 million, and that's the loss of sales plus the cost of addressing that issue.

Speaker #2: So we haven't seen supply shortages, but we do still see elevated levels of polymer costs, and hence our price increases have been important to stabilize things.

Speaker #3: We're confident that both items have been root-caused and won't recur in the second half. On the positive news front, we've seen really good progress in integrating Monodraft into our climate business, and actually, the technical integration of the controls capability is a fantastic news story.

Speaker #2: And you can see the business has covered that well with this result. Again, the acquisition, side of things has gone really well. So Davidson has been integrated well, and we've accelerated that simplification.

Speaker #3: So, we can now go to market with a combined school solution with new air mechanical ventilation and Monodraft hybrid ventilation, which we think is a unique offering in the marketplace, and we've already received our first orders in July.

Speaker #2: So two of the three sites will be closed for Davidson and integrated into our larger strategic sites. That means there'll be no loss of capacity.

Tim Pullen: Two of the 3 sites will be closed for Davidson and integrated into our larger strategic sites. That means there will be no loss of capacity. It is underpinning a big chunk of the GBP 4 million savings that we are talking about for next year. Also it gives us the scope for more sales and operational synergies by co-locating those operations. That will be completed by the end of the year. As I say, those cost savings will be generated next year, which brings us into the non-underlying items. We have about GBP 17 million or so. About GBP 9 million of that is non-cash impacting. That includes GBP 4 million investment in a multi-year IT systems transformation. This is a really important pairing with GBS.

Tim Pullen: We can now go to market with a combined school solution with Nuaire mechanical ventilation and Monodraught hybrid ventilation, we think a unique offering in the marketplace, and we've already received our first orders in July. Great momentum there. The Water division revenue is about 4% higher on a reported basis, about 3% lower on a like-for-like basis. Residential markets have been subdued, I think both in new house building and in the RMI sector. We have seen some project delays in civils and infrastructure markets, really a reflection of lower business confidence in the current macro environment. But there are some positive areas as well. Our Manthorpe business actually grew year on year in the H1 of the year, as did our Italian business and also our operations in Ireland as well.

Speaker #2: it's underpinning a big chunk of the 4 million savings that we're talking about for next year. and also, it gives us the scope for more sales and operational synergies by co-locating those operations.

Speaker #3: So, great momentum there. The Water division's revenue is about 4% higher on a reported basis, and about 3% lower on a like-for-like basis. Residential markets have been subdued.

Speaker #2: That will be completed by the end of the year, as I say, those cost savings will be generated next year. Which brings us into the, the non-underlying items.

Speaker #3: I think both in new house building and in the RMI sector. And we have seen some project delays in civils and infrastructure markets, really a reflection of lower business confidence in the current macro environment.

Speaker #2: we've got about 17 million or so, about 9 million of that is non-cash impacting. that includes 4 million investment in a multi-year IT systems transformation.

Speaker #3: But there are some positive areas as well. Our Manthorpe business actually grew year on year in the first half of the year, as did our Italian business, and also our operations in Ireland as well.

Speaker #2: And this is a really important pairing with GBS. So deploying modern software as a service software platforms to complement the lean operational, input that we're putting in with GBS.

Tim Pullen: Deploying modern software as a service, software platforms to complement the lean operational input that we are putting in with GBS. As is normal practice for cloud-based systems, this is accounted for through exceptional items as opposed to previously on-premise systems that would have been capitalized and depreciated over time. Expect to see a run rate at about this level going forward, and as we get more into the program and drive the consistency, efficiency, and productivity through that combination of modern software platforms with lean thinking, we will start reporting the benefits alongside that in the future as well. Our restructuring costs associated with the simplification work that we have done in the half are GBP 3.9 million. That is underpinning over GBP 4 million of savings from next year.

Speaker #3: So, whilst that international sector is smaller for us at the moment, it does show we have some strength in diversification there. Underlying operating profit is broadly flat on a like-for-like level.

Tim Pullen: Whilst that international sector is smaller for us at the moment, it does show we have some strength in diversification there. Underlying operating profit is broadly flat on a like-for-like level, really demonstrating strong price and cost management, as Joe says. This is the sector that's most affected by the cost inflation. Obviously, we saw rapid inflation in March. We've seen that whilst the situation remains volatile, we haven't seen the worst case scenario, so we haven't seen supply shortages, but we do still see elevated levels of polymer costs, and hence our price increases have been important to stabilize things, and you can see the business has covered that well with this result. Again, the acquisition side of things has gone really well. Davidson has been integrated well, and we've accelerated that simplification.

Speaker #2: and there's this normal practice for cloud-based systems. This is accounted for through exceptional items as opposed to previously on-premise systems that would have been capitalized and, and depreciated over time.

Speaker #3: Really demonstrating strong price and cost management, as Joe says. This is the sector that's most affected by the cost inflation. Obviously, we saw rapid inflation in March, and we've seen that whilst the situation remains volatile, we haven't seen the worst-case scenario. So we haven't seen supply shortages, but we do still see elevated levels of polymer costs, and hence our price increases have been important to stabilize things. You can see the business has covered that well with this result.

Speaker #2: So expect to see, a run rate at about this level going forward. And as we get more into the program and drive the consistency, efficiency, and productivity through that combination of modern software platforms with lean thinking, we'll start reporting the benefits alongside that in the future as well.

Speaker #2: Our restructuring costs associated with the simplification work that we've done in the half, our 3.9 million say that's underpinning over 4 million of savings from next year.

Speaker #3: Again, the acquisition side of things has gone really well. Davidson has been integrated well, and we've accelerated that simplification. So, two of the three sites will be closed for Davidson and integrated into our larger strategic sites.

Speaker #2: we've also got a loss on the polydeck disposal that we completed in the first half of the year of, about a million to tidy up the accounting there.

Tim Pullen: We have also got a loss on the Polypipe disposal that we completed in the H1 of the year of about GBP 1 million to tidy up the accounting there. In terms of cash flow, really positive result here. You can see the strong cash conversion of 70% in line with our phasing expectations. In particular, I would highlight the working capital here where we continue to focus and drive real benefit. A lot of that is coming from inventory management. Remember, Genuit Business System is not just about efficiency in the science, it is also about that working capital management to really help with our cash flow. So net debt about GBP 190 million, and our leverage about 1.6 times. Just a final word then on capital allocation to round things off. I think we continue to invest in the business. We are confident in the strategy, despite the challenging environment.

Tim Pullen: Two of the three sites will be closed for Davidson and integrated into our larger strategic sites. That means there'll be no loss of capacity. It's underpinning a big chunk of the GBP 4 million savings that we're talking about for next year. Also it gives us the scope for more sales and operational synergies by co-locating those operations. That will be completed by the end of the year. As I say, those cost savings will be generated next year, which brings us into the non-underlying items. We've got about GBP 17 million or so. About GBP 9 million of that is non-cash impacting. That includes GBP 4 million investment in a multi-year IT systems transformation. This is a really important pairing with GBS. So deploying modern software-as-a-service software platforms to complement the lean operational input that we're putting in with GBS.

Speaker #2: In terms of cash flow, really positive result here. You can see the, the strong cash conversion of 70% in line with our phasing expectations.

Speaker #3: That means there'll be no loss of capacity; it's underpinning a big chunk of the £4 million savings that we're talking about for next year, and also it gives us the scope for more sales and operational synergies by co-locating those operations.

Speaker #2: and in particular, I'd highlight the working capital here, where we continue to focus and drive real benefit a lot of that is coming from inventory management.

Speaker #2: Remember, GBS is not just about efficiency, in the sites. It's also about that working capital management to, to really help with our cash flow.

Speaker #3: That will be completed by the end of the year. As I say, those cost savings will be generated next year, which brings us into the non-underlying items.

Speaker #2: So net debt about 190 million, and our leverage about 1.6 times. So just to final word then on capital allocation to round things off, I think, you know, we continue to invest in the business.

Speaker #3: We've got about £17 million or so; about £9 million of that is non-cash impacting. That includes a £4 million investment in a multi-year IT systems transformation, and this is a really important pairing with GBS.

Speaker #2: We're confident in the strategy, despite the challenging environment. So investing in capacity, innovation, and sustainability for our capital spends. We've got that optionality for additional bolt-on acquisitions, given the strength of our balance sheets.

Tim Pullen: Investing in capacity, innovation, and sustainability for our capital spends. We have got that optionality for additional bolt-on acquisitions, given the strength of our balance sheets. We are maintaining our dividends, and we also have optionality for buybacks if conditions are right in the future. Okay, so that is the financial results. Happy to take questions at the end, but for now, I will invite Joe back onto the stage for our strategy.

Speaker #3: So, deploying modern Software as a Service software platforms to complement the lean operational input that we're putting in with GBS. And there's this normal practice for cloud-based systems: this is accounted for through exceptional items, as opposed to previously on-premise systems that would have been capitalized and depreciated over time.

Speaker #2: We're maintaining our dividends, and we also have optionality for buybacks if conditions are right in the future. Okay, so that's the financial results. Happy to take questions at the end, but for now, I'll invite Joe back onto the stage.

Tim Pullen: As is normal practice for cloud-based systems, this is accounted for through exceptional items as opposed to previously on-premise systems that would have been capitalized and depreciated over time. Expect to see a run rate at about this level going forward. As we get more into the program and drive the consistency, efficiency, and productivity through that combination of modern software platforms with lean thinking, we will start reporting the benefits alongside that in the future as well. Our restructuring costs associated with the simplification work that we have done in the H1 are GBP 3.9 million. That is underpinning over GBP 4 million of savings from next year. We have also got a loss on the Polydak disposal that we completed in the H1 of the year of about GBP 1 million to tidy up the accounting there. In terms of cash flow, really positive result here.

Speaker #3: So, expect to see a run rate at about this level going forward, and as we get more into the program and drive consistency, efficiency, and productivity through that combination of modern software platforms with lean thinking, we'll start reporting the benefits alongside that in the future as well.

Speaker #1: Thank you. Thank you, Tim.

Speaker #2: For our strategy.

Joe Vorih: Thank you, Tim. Let me just set this over here. Do not anyone look at that yet. All right. I want to give you a quick update on the progress we have made in implementing our strategy. Remember our purpose, that together we create sustainable living, and that actually drives everything we do, tying back to our strategy, which had the four same tenets that we have been working on for four years now. First is investing in growth, organic growth in areas where there are clear, sustainable, climate-driven tailwinds, where we believe billions and billions need to be spent over the coming decades to deal with the impact and the mitigation of climate change. At the same time, those sustainable solutions can be augmented by great M&A, as we did last year, where we can both get into higher growth segments, even cyclical segments, but also improve our solutions.

Speaker #2: Let me just set this over here. If anyone look at that yet, all right. So, wanted to give you a quick update on, the progress we've made, in implementing our strategy.

Speaker #2: So remember, our purpose that together we create sustainable living. And that actually drives everything we do, tying back to our strategy, which had the four same tenets that we've been working on for four years now.

Speaker #3: Our restructuring costs associated with the simplification work that we've done in the half are £3.9 million. That's underpinning over £4 million of savings from next year.

Speaker #2: First is investing in growth, organic growth in areas where there are clear sustainable climate-driven tailwinds, where we believe, you know, billions and billions need to be spent.

Speaker #3: We've also got a loss on the Polydeck disposal that we completed in the first half of the year, of about £1 million, to tidy up the accounting there.

Speaker #2: Over the coming decades, to deal with the impact and the mitigation of climate change. at the same time, those sustainable solutions can be augmented by great M&A, as we did last year, where we can both get into higher growth segments, even for cyclical segments, segments, but also improve our solutions.

Speaker #3: In terms of cash flow, really positive result here. You can see the strong cash conversion of 70%, in line with our phasing expectations, and in particular, I'd highlight the working capital here, where we continue to focus and drive real benefit. A lot of that is coming from inventory management.

Tim Pullen: You can see the strong cash conversion of 70% in line with our phasing expectations. In particular, I would highlight the working capital here where we continue to focus and drive real benefit. A lot of that is coming from inventory management. Remember, GBS is not just about efficiency in the science, it is also about that working capital management to really help with our cash flow. Net debt about GBP 190 million, and our leverage about 1.6 times. Just a final word then on capital allocation to round things off. I think we continue to invest in the business. We are confident in the strategy despite the challenging environment, so investing in capacity, innovation, and sustainability for our capital spends. We have got that optionality for additional bolt-on acquisitions, given the strength of our balance sheets.

Speaker #2: We'll talk a bit about, some of those. So focusing on growth first, absolutely number one on our agenda. At the same time, while what we do is fundamentally green, as you see from our green mark, we're 70% of our revenue is plus our climate-friendly solutions.

Joe Vorih: We will talk a bit about some of those. Focusing on growth first, absolutely number one on our agenda. At the same time, while what we do is fundamentally green, as you see from our Green Mark, where 70% of our revenues plus are climate friendly solutions, how we operate the company is equally important. So continuing to push the envelope on recycled material, lowering the carbon content of our supply chains, using renewable energy throughout the business. Increasingly, as I will share in a few minutes, being able to show customers how that can actually benefit them remains very important. The Genuit Business System is heart to everything we do. It is how we run the business, right? Founded in lean thinking, in the Kaizen methodology. We have continued to share some good examples of that, and I have got another example for you today.

Speaker #3: Remember, GBS is not just about efficiency in the sites; it's also about that working capital management to really help with our cash flow.

Speaker #3: So net debt is about £190 million, and our leverage is about 1.6 times. So, just a final word then on capital allocation to round things off—I think we continue to invest in the business.

Speaker #2: How we operate the company is equally important. So continuing to push the envelope on recycled material, lowering the carbon content of our supply chains, using renewable energy throughout the business, and increasingly, as I'll share in a few minutes, being able to show customers how that can actually benefit them.

Speaker #3: We're confident in the strategy, despite the challenging environment. So, we're investing in capacity, innovation, and sustainability for our capital spends. We've got that optionality for additional bolt-on acquisitions, given the strength of our balance sheet.

Speaker #2: Remains very important. The genuine business system is heart to everything we do. It's how we run the business, right? Founded in lean thinking, and the Kaizen methodology, we've continually shared some good examples of that, and I've got another example for you today.

Speaker #3: We're maintaining our dividends, and we also have optionality for buybacks if conditions are right in the future. Okay, so that's the financial results. Happy to take questions at the end, but for now, I'll invite Joe back onto the stage.

Tim Pullen: We are maintaining our dividends, and we also have optionality for buybacks if conditions are right in the future. Okay, so that is the financial results. Happy to take questions at the end, but for now, I will invite Joe back onto the stage for our strategy.

Speaker #2: but increasingly, as Tim alluded to earlier, we see the ability to really make this a more inclusive set of tools. So paring partnering with the best technology so that we can take advantage of everything that's out there eventually even, some of the AI tools as well.

Joe Vorih: But increasingly, as Tim alluded to earlier, we see the ability to really make this a more inclusive set of tools. Partnering with the best technology so that we can take advantage of everything that's out there eventually, even some of the AI tools as well. On the people side, investing in people has been the fourth key part of our strategy, and it underpins everything because the best team wins. So investing in our people is key. So this is our strategy remains true. But I did say at the outset, look, the warm weather today is indicative of some of the things we're dealing with. A lot of people complain about the weather, but actually, we see some real opportunity despite the difficulties.

Speaker #2: Thank you. Thank you, Tim.

Joe Vorih: Thank you, Tim. Let me just set this over here. Do not anyone look at that yet. All right, so I wanted to give you a quick update on the progress we have made in implementing our strategy. Remember our purpose, that together we create sustainable living, and that actually drives everything we do, tying back to our strategy, which had the four same tenets that we have been working on for four years now. First is investing in growth, organic growth in areas where there are clear, sustainable, climate-driven tailwinds, where we believe billions and billions need to be spent over the coming decades to deal with the impact and the mitigation of climate change. At the same time, those sustainable solutions can be augmented by great M&A, as we did last year, where we can both get into higher growth segments, even less cyclical segments, but also improve our solutions.

Speaker #1: Let me just set this over here. Has anyone looked at that yet?

Speaker #2: All right, so I wanted to give you a quick update on the progress we've made in implementing our strategy. Remember, our purpose is that together we create sustainable living, and that actually drives everything we do, tying back to our strategy, which has the same four tenets that we've been working on for four years now.

Speaker #2: On the people side, investing in people has been the fourth key part of our strategy. And it underpins everything 'cause the best team wins.

Speaker #2: So investing in our people is key. So this is our strategy remains true. But I did say at the outset, look, the warm weather today is kind of indicative of some of the things we're dealing with.

Speaker #2: First is investing in growth—organic growth in areas where there are clear, sustainable, climate-driven tailwinds; where we believe that billions and billions need to be spent.

Joe Vorih: First is investing in growth, organic growth in areas where there are clear, sustainable, climate-driven tailwinds, where we believe billions and billions need to be spent over the coming decades to deal with the impact and the mitigation of climate change. At the same time, those sustainable solutions can be augmented by great M&A, as we did last year, where we can both get into higher growth segments, even less cyclical segments, but also improve our solutions.

Speaker #2: And a lot of people complain about the weather, but actually, we see some real opportunity despite the, the difficulties. First, it won't surprise anybody that, we are, actually looking like we're extending what was the hottest July on record in many parts of the UK.

Joe Vorih: First, it won't surprise anybody that we are actually looking like we're extending what was the hottest July on record in many parts of the UK, with some of the longest drought conditions we've ever experienced in this country. Lots of opportunities, lots of discussion about cooling and ventilation and how we're going to deal with or essentially adapt to this climate change. At the same time, standing here, it's very difficult to cast your mind 6 months ago in this room where we were just talking about the wettest January on record in the UK, certainly in most of it. It's quite a duality. We're seeing extremes of drought and flooding, and this is becoming more common. I don't think there's much debate about that anymore.

Speaker #2: Over the coming decades, to deal with the impact and the mitigation of climate change. At the same time, those sustainable solutions can be augmented by great M&A, as we did last year, where we can both get into higher growth segments, even for cyclical segments, but also improve our solutions.

Speaker #2: some of the longest drought conditions we've ever experienced in this country, right? lots of opportunities, lots of discussion about cooling and ventilation and, and how we're gonna deal with or essentially adapt to this climate change.

Speaker #2: At the same time, standing here, it's very difficult to catch your mind six months ago in this room where we were just talking about the wettest January on record in the UK, certainly in most of it.

Speaker #2: We'll talk a bit about some of those. So, focusing on growth first—absolutely number one on our agenda. At the same time, while what we do is fundamentally green—as you see from our green mark—we're at 70% of our revenues plus from our climate-friendly solutions. How we operate the company is equally important.

Joe Vorih: We will talk a bit about some of those. Focusing on growth first, absolutely number one on our agenda. At the same time, while what we do is fundamentally green, as you see from our Green Mark, where 70% of our revenues plus our climate-friendly solutions, how we operate the company is equally important. So continuing to push the envelope on recycled material, lowering the carbon content of our supply chains, using renewable energy throughout the business. Increasingly, as I will share in a few minutes, being able to show customers how that can actually benefit them remains very important. The Genuit Business System is heart to everything we do. It is how we run the business, right? Founded in lean thinking and the Kaizen methodology. We have continued to share some good examples of that, and I have got another example for you today.

Speaker #2: It, it's quite a duality, right? We're seeing extremes of drought and flooding, and this is becoming more common. I don't think there's much debate about that anymore.

Speaker #2: So, continuing to push the envelope on recycled material, lowering the carbon content of our supply chains, using renewable energy throughout the business, and increasingly—as I'll share in a few minutes—being able to show customers how that can actually benefit them.

Speaker #2: So while some companies are faced with, kind of some ESG pressure, we actually see, really, the need to respond, innovate, and release new solutions is more important than ever.

Joe Vorih: So while some companies are faced with some ESG pressure, we actually see really the need to respond, innovate, and release new solutions is more important than ever. At the same time, while the inevitable climate change issues are driving fundamental end demand, I get a lot of questions from investors about what the regulatory framework looks like. So our team prepared this incredibly complicated slide that's very busy, and that's really the point. This is a very busy sector. There are over 10 different regulatory and framework drivers here on this slide, and this isn't all of them. This is just probably the 10 most impactful ones for us. The way to think about this, broad terms, is on the left essentially is what's driving innovation and new regulations in new homes.

Speaker #2: Now, at the same time, while the inevitable climate change issues are driving fundamental end demand, you know, I get a lot of questions from investors about what the regulatory framework looks like.

Speaker #2: It remains very important. The Genuit Business System is at the heart of everything we do—it's how we run the business, right? Founded in lean thinking and the Kaizen methodology, we've continued to share some good examples of that, and I've got another example for you today.

Speaker #2: So, our team prepared this incredibly complicated slide that's very busy. And that's really the point. This is a very busy sector. There are over 10 different, regulatory and framework drivers here on this slide, and this isn't all of them.

Speaker #2: But increasingly, as Tim alluded to earlier, we see the ability to really make this a more inclusive set of tools—so partnering with the best technologies, so that we can take advantage of everything that's out there; eventually even some of the AI tools as well.

Joe Vorih: But increasingly, as Tim alluded to earlier, we see the ability to really make this a more inclusive set of tools. So partnering with the best technology so that we can take advantage of everything that is out there, eventually even some of the AI tools as well. On the people side, investing in people has been the fourth key part of our strategy, and it underpins everything because the best team wins. So investing in our people is key. So this is our strategy, it remains true. But I did say at the outset, look, the warm weather today is kind of indicative of some of the things we are dealing with. A lot of people complain about the weather, but actually, we see some real opportunity despite the difficulties.

Speaker #2: This is just probably the 10 most impactful ones for us. The way to think about this, broad terms, is on the left, essentially is what's driving, innovation and, new regulations and new homes.

Speaker #2: On the people side, investing in people has been the fourth key part of our strategy, and it underpins everything, because the best team wins.

Speaker #2: So, investing in our people is key. So, this is our strategy and it remains true. But I did say at the outset, look, the warm weather today is kind of indicative of some of the things we're dealing with. And a lot of people complain about the weather, but actually, we see some real opportunity despite the difficulties.

Speaker #2: The center is essentially getting after the 25 million homes in the UK that need to be upgraded. So it's really about RMI work, to upgrade existing homes.

Joe Vorih: The center is essentially getting after the 25 million homes in the UK that need to be upgraded. So it's really about RMI work to upgrade existing homes. Of course, the ever-growing, approaching 40%, non-housing sector for us now. We're going to highlight two specific areas of infrastructure and education, but there's more. A few of the things on here. The way it looks, basically, the stuff that's in green is already in effect now. The stuff that's in yellow will largely have already taken effect by the time we're back together for the full year results. Of course, the other stuff is actually already planned and coming, but just a year or 2 further out. All of these will stimulate more solution opportunity, more end market demand for us. A couple of highlights. You know that the Future Homes Standard was finally released in March.

Speaker #2: And of course, the ever-growing, approaching 40% non-housing sector for us now. We're gonna highlight two specific areas of infrastructure and education, but there's more.

Speaker #2: First, it won't surprise anybody that we are actually looking like we're extending what was the hottest July on record in many parts of the UK, with some of the longest drought conditions we've ever experienced in this country, right?

Joe Vorih: First, it will not surprise anybody that we are actually looking like we are extending what was the hottest July on record in many parts of the UK, with some of the longest drought conditions we have ever experienced in this country. Right? Lots of opportunities, lots of discussion about cooling and ventilation and how we are going to deal with or essentially adapt to this climate change. At the same time, standing here, it is very difficult to cast your mind six months ago in this room where we were just talking about the wettest January on record in the UK, certainly in most of it. It is quite a duality, right? We are seeing extremes of drought and flooding, and this is becoming more common. I do not think there is much debate about that anymore.

Speaker #2: a few of the things on here, the way, the way it looks basically, the stuff that's in green is already in effect now. The stuff that's in yellow will largely have already taken effect by the time we're back together.

Speaker #2: For the full year results, and of course, the other stuff is actually already planned and coming, but just a year or two further out.

Speaker #2: Lots of opportunities, lots of discussion about cooling and ventilation, and how we're going to deal with or essentially adapt to this climate change. At the same time, standing here, it's very difficult to cast your mind back six months ago, in this room, where we were just talking about the wettest January on record in the UK—certainly in most of it.

Speaker #2: All of these will stimulate, more solution opportunity, more end market demand for us. A couple of highlights, you know, that the future home standard was finally released.

Speaker #2: In March, by next year, this, by March, all new, housing permits will now need to be compliant with the future home standard. And a year from that, the, the grace period expires; there's a separate grace period for, high-risk buildings.

Joe Vorih: By next year, by March, all new housing permits will now need to be compliant with the Future Homes Standard, and a year from that, the grace period expires. There is a separate grace period for high-risk buildings, but just six months after that. The timeline for the Future Homes Standard is now active, and the clock is ticking. Obviously, there is Awaab's Law that we have talked about. If I turn to AMP8, we are now a year and a half into AMP8, and the momentum is seriously picking up. As well as the consensus that AMP9 and 10 are probably going to be similar or larger in scope, focused on a lot of the same issues, including a heavy emphasis on stormwater and flood mitigation. Construction Framework 2025 is the current four-year school rebuilding program framework.

Speaker #2: It's quite a duality, right? We're seeing extremes of drought and flooding, and this is becoming more common. I don't think there's much debate about that anymore.

Speaker #2: So, while some companies are faced with, kind of, some ESG pressure, we actually see, really, the need to respond, innovate, and release new solutions as more important than ever.

Joe Vorih: While some companies are faced with kind of some ESG pressure, we actually see really the need to respond, innovate, and release new solutions as more important than ever. Now, at the same time, while the inevitable climate change issues are driving fundamental end demand, I get a lot of questions from investors about what the regulatory framework looks like. So our team prepared this incredibly complicated slide that is very busy, and that is really the point. This is a very busy sector. There are over 10 different regulatory and framework drivers here on this slide, and this is not all of them. This is just probably the 10 most impactful ones for us. The way to think about this, broad terms, is on the left essentially is what is driving innovation and new regulations in new homes.

Speaker #2: But, you know, it's just six months after that. So the timeline for the future home standard is now active, and the clock is ticking.

Speaker #2: obviously, there's AWEBS that we've talked about. If I turn to AMP 8, I mean, we are now a year and a half into AMP 8, and the momentum is seriously picking up, as well as the consensus that AMP 9 and 10 are probably gonna be similar or larger in scope focused on a lot of the same issues including a heavy emphasis on stormwater and flood mitigation.

Speaker #2: So, our team prepared this incredibly complicated slide that's very busy. And that's really the point—this is a very busy sector. There are over 10 different regulatory and framework drivers here on this slide, and this isn't all of them.

Speaker #2: And of course, construction framework 25 is the current four-year school rebuilding program framework. Okay, it is a serious upgrade to the ventilation and indoor air quality standards in schools, and that is what's behind a lot of the growth that we're seeing at Monadraft and the solutions we'll talk about, coming up.

Joe Vorih: It is a serious upgrade to the ventilation and indoor air quality standards in schools, and that is what is behind a lot of the growth we are seeing in Monodraught and the solutions we will talk about coming up. What are we doing about it? This is a case study in our water business. As Tim said, while parts of the overall traditional civils business are still a bit slow, it feeds housing and other sectors. This part is actually growing very well. At this time last year, we had GBP 2 million of quotes in our quote bank, meaning quotes issued, active projects that we are going after winning. That is GBP 9 million today. We have already been taking orders. This is actually a real live order for Yorkshire Water that has been delivered recently.

Speaker #2: These are just probably the 10 most impactful ones for us. The way to think about this, in broad terms, is: on the left, essentially, is what's driving innovation and new regulations and new homes.

Speaker #2: So what are we doing about it? This is a, this is a case study in our water business, as Tim said, while parts of the overall traditional civils business are still a bit slow.

Speaker #2: The Center is essentially focusing on the 25 million homes in the UK that need to be upgraded, so it's really about RMI work to upgrade existing homes.

Joe Vorih: The center is essentially getting after the 25 million homes in the UK that need to be upgraded, so it is really about RMI work to upgrade existing homes. Of course, the ever-growing, approaching 40% non-housing sector for us now. We are going to highlight two specific areas of infrastructure and education, but there is more. A few of the things on here. The way it looks, basically, the stuff that is in green is already in effect now. The stuff that is in yellow will largely have already taken effect by the time we are back together for the full year results. Of course, the other stuff is actually already planned and coming, but just a year or two further out. All of these will stimulate more solution opportunity and more end market demand for us. A couple of highlights. You know that the Future Homes Standard was finally released in March.

Speaker #2: And, of course, the ever-growing, approaching 40% non-housing sector for us now. We're going to highlight two specific areas—Infrastructure and Education—but there's more.

Speaker #2: It feeds housing and other sectors. This part is actually growing very well. at this time last year, we had 2 million, of quotes in our quote bank, meaning quotes issued, active projects, that were going after winning.

Speaker #2: A few of the things on here, the way it looks, basically, the stuff that's in green is already in effect now. The stuff that's in yellow will largely have already taken effect by the time we're back together for the full year results.

Speaker #2: That's 9 million today. Okay? We've already been taking orders. This is actually a real live order for Yorkshire Water that's been delivered recently. and you can see from the top left, these are more complex assembled solutions made from our large best-in-class, nearly fully recycled, polymer products that we make in our Loughborough plant.

Joe Vorih: The stuff that is in yellow will largely have already taken effect by the time we are back together for the full year results. Of course, the other stuff is actually already planned and coming, but just a year or two further out. All of these will stimulate more solution opportunity and more end market demand for us. A couple of highlights. You know that the Future Homes Standard was finally released in March.

Speaker #2: And of course, the other stuff is actually already planned and coming, but just a year or two further out. All of these will stimulate more solution opportunity, more end market demand for us.

Joe Vorih: You can see from the top left, these are more complex assembled solutions made from our large, best-in-class, nearly fully recycled polymer products that we make at our Loughborough plant. This is the installation going in. You will note also in the background, it is a really challenging environment. It is right in the middle of a housing estate, some traditional homes, petrol station. We are essentially retrofitting the country with much better stormwater mitigation to protect our sewers and our waterways. This is challenging, and what is really exciting about this is that these integrated plastic solutions are lighter, easier, faster, and lower carbon to install than any of the alternatives, including concrete. We do think that the opportunity here will continue to grow. While the projects are growing and we are starting to ship this year, it will be much more material impact in 2027.

Speaker #2: A couple of highlights, you know, that the Future Home Standard was finally released in March. By next year, by March, all new housing permits will now need to be compliant with the Future Home Standard, and a year from that, the grace period expires. There's a separate grace period for high-risk buildings.

Speaker #2: And this is the installation going in. You'll note also in the background, it's a really challenging environment. It's right in the middle of a housing estate, some traditional homes, petrol station.

Joe Vorih: By next year, by March, all new housing permits will now need to be compliant with the Future Homes Standard. A year from that, the grace period expires. There is a separate grace period for high-risk buildings, but just six months after that. So the timeline for the Future Homes Standard is now active, and the clock is ticking. Obviously, there is Awaab's Law that we have talked about. If I turn to AMP8, we are now a year and a half into AMP8, and the momentum is seriously picking up, as well as the consensus that AMP9 and 10 are probably going to be similar or larger in scope, focused on a lot of the same issues, including a heavy emphasis on stormwater and flood mitigation. Of course, Construction Framework 25 is the current four-year school rebuilding program framework. Okay?

Speaker #2: So we're essentially retrofitting the country with much better stormwater mitigation to protect our sewers and our waterways. This is challenging. And what's really exciting about this is that these integrated plastic solutions are lighter, easier, faster, and lower carbon to install than any of the alternatives, including concrete.

Speaker #2: But, you know, it's just six months after that. So the timeline for the future home standard is now active, and the clock is ticking.

Speaker #2: Obviously, there's AWEBs that we've talked about. If I turn to AMP8, I mean, we are now a year and a half into AMP8, and the momentum is seriously picking up, as well as the consensus that AMP9 and 10 are probably going to be similar or larger in scope, focused on a lot of the same issues, including a heavy emphasis on stormwater and flood mitigation.

Speaker #2: So we do think that the opportunity here will continue to grow. while the, while the projects are growing and we're starting to ship this year, it'll be much more material impact in 2027.

Speaker #2: And so we've actually we've done some Kaizen work in the Loughborough plant, and we've authorized some additional investments. We have enough capacity now, but looking two and three years down the road, we wanna make sure that we are ahead of the game because we believe this could be quite a fast-growing market for us.

Joe Vorih: We have actually done some Kaizen work on the Loughborough plant, and we have authorized some additional investments. We have enough capacity now, but looking two and three years down the road, we want to make sure that we are ahead of the game because we believe this is going to be quite a fast-growing market for us. That is water. On the climate side, as Tim said earlier, first I would like to say, look, our acquisition last year of Monodraught was underpinned on the commercial strength of that business. That has continued and just gone from strength to strength. In the 11 months to date of the acquisition compared to the 11 months before the acquisition, same period, their orders are up 24%. This is really exciting. This is before the synergy potential of the new solution.

Speaker #2: And of course, Construction Framework 25 is the current four-year school rebuilding program framework. Okay, it is a serious upgrade to the ventilation and indoor air quality standards in schools, and that is what's behind a lot of the growth that we're seeing at Mod and Draft, and the solutions we'll talk about, coming up.

Joe Vorih: It is a serious upgrade to the ventilation and indoor air quality standards in schools, and that is what is behind a lot of the growth we are seeing in Monodraught and the solutions we will talk about coming up. What are we doing about it? This is a case study in our water business, as Tim Pullen said. While parts of the overall traditional civils business are still a bit slow, it feeds housing and other sectors, this part is actually growing very well. At this time last year, we had 2 million of quotes in our quote bank, meaning quotes issued, active projects that we are going after winning. That is 9 million today. Okay? We have already been taking orders. This is actually a real live order for Yorkshire Water that has been delivered recently.

Speaker #2: That's water. On the climate side is, Tim said earlier, first, I'd like to say, look, our acquisition last year at Monadraft was underpinned on the commercial strength of that business.

Speaker #2: So what are we doing about it? This is a, this is a case study in our water business, as Tim said, while parts of the overall traditional civils business are still a bit slow, it feeds housing and other sectors, this part is actually growing very well.

Speaker #2: that has continued and just gone from strength to strength. In the 11 months to date, of the acquisition, compared to the 11 months before the acquisition, same period, their orders are up 24%.

Speaker #2: this is really saying this is before the synergy potential of the new solution. That new solution is, Tim said earlier, is essentially the release of this product right here.

Speaker #2: At this time last year, we had 2 million quotes in our quote bank, meaning quotes issued for active projects that we were going after and trying to win.

Joe Vorih: That new solution, as Tim said earlier, is essentially the release of this product right here. This is the very last rapid prototype version. The production tools are in place, and we will be shipping this in production in September, okay? What this is, very exciting product. I am sure you are thinking the same. It is actually an interface box. It was designed in just 6 months, fully tested, released to market, and has now been for sale since June. What does this do? Essentially, as it shows there, and as Tim said earlier, if you take a complete school system, although this could be many other applications, an office building, a doctor's surgery, a community center. Any building that has essentially a multi-mode ventilation system and higher air quality standards will benefit from this.

Speaker #2: That's £9 million today, okay? We've already been taking orders. This is actually a real, live order for Yorkshire Water that's been delivered recently. And you can see from the top left, these are more complex, assembled solutions made from our large, best-in-class, nearly fully recycled polymer products that we make in our Loughborough plant.

Speaker #2: This is, the very last, rapid prototype version. The production tools are in place, and the and will be shipping this in production in September.

Joe Vorih: You can see from the top left, these are more complex assembled solutions made from our large, best-in-class, nearly fully recycled polymer products that we make at our Loughborough plant. This is the installation going in. You will note also in the background, it is a really challenging environment. It is right in the middle of a housing estate, some traditional homes, petrol station. So we are essentially retrofitting the country with much better stormwater mitigation to protect our sewers and our waterways. This is challenging, and what is really exciting about this is that these integrated plastic solutions are lighter, easier, faster, and lower carbon to install than any of the alternatives, including concrete. So we do think that the opportunity here will continue to grow. While the projects are growing and we are starting to ship this year, it will be much more material impact in 2027.

Speaker #2: Okay? What this is, very exciting product. I'm sure you're thinking the same. It's actually an interface box that was designed in just six months, fully tested, released to market, and has now been for sale since June.

Speaker #2: And this is the installation going in. You'll note also in the background, it's a really challenging environment. It's right in the middle of a housing estate, with some traditional homes and a petrol station.

Speaker #2: what does this do? Essentially, as it shows there, and as Tim said earlier, if you take a complete school system, although this could be many other applications, an office building, a doctor's surgery, a community center, any building that has essentially a multi-mode ventilation system, and higher air quality standards will benefit from this.

Speaker #2: So we're essentially retrofitting the country with much better stormwater mitigation to protect our sewers and our waterways. This is challenging, and what's really exciting about this is that these integrated plastic solutions are lighter, easier, faster, and lower carbon to install than any of the alternatives, including concrete.

Speaker #2: It allows the hybrid systems of new of, Monadraft, which essentially directly outside a-access outside air and allow natural ventilation, which often is, is very good and a lot of fresh air, to be linked directly to, the new air units, which are the powered units, often found in, say, the hallways, the canteens, the gymnasiums, the kitchens, so when you think about all of those different applications, all this interface box allows all the new air products needed to now interface into the Monadraft ecosystem.

Joe Vorih: It allows the hybrid systems of Monodraught, which essentially directly access outside air and allow natural ventilation, which often is very good and a lot of fresh air, to be linked directly to the Nuaire units, which are the powered units often found in, say, the hallways, the canteens, the gymnasiums, the kitchens. So when you think about all of those different applications, this interface box allows all the Nuaire products needed to now interface into the Monodraught ecosystem. That is the Medina wall controllers, which are state-of-the-art, easy-to-use, configurable wall controllers, which can do the whole ventilation system and control heating. Acuity, which is the brains of the whole operation, one per building, which also allows us to remote monitor and diagnose and troubleshoot systems, which has been a great update.

Speaker #2: So we do think that the opportunity here will continue to grow. While the projects are growing and we're starting to ship this year, it'll be a much more material impact in 2027.

Speaker #2: And so we've actually done some Kaizen work in the Loughborough plant, and we've authorized some additional investments. We have enough capacity now, but looking two and three years down the road, we want to make sure that we are ahead of the game, because we believe this will continue to be quite a fast-growing market for us.

Joe Vorih: We have done some Kaizen work on the Loughborough plant, and we have authorized some additional investments. We have enough capacity now, but looking 2 and 3 years down the road, we want to make sure that we are ahead of the game because we believe this could continue to be quite a fast-growing market for us. That is water. On the climate side, as Tim said earlier, first I would like to say, look, our acquisition last year of Monodraught was underpinned on the commercial strength of that business. That has continued and just gone from strength to strength. In the 11 months to date of the acquisition compared to the 11 months before the acquisition, same period, their orders are up 24%. This is really exciting. This is before the synergy potential of the new solution.

Speaker #2: That's water. On the climate side, as Tim said earlier—first, I'd like to say, look, our acquisition last year at Mod and Draft was underpinned by the commercial strength of that business.

Speaker #2: That is the Medina wall controllers, which are state-of-the-art, easy to use, configurable wall controllers, which can do the whole ventilation system and control heating.

Speaker #2: And Acuity, which is the brains of the whole operation, one per building, which also allows us to remote monitor and diagnose and troubleshoot systems, which has been a great opportunity.

Speaker #2: That has continued and just gone from strength to strength. In the 11 months to date of the acquisition, compared to the 11 months before the acquisition—the same period—their orders are up 24%.

Speaker #2: If you ever get a chance to visit Monadraft, you'll see there, you can actually see every installed system in the UK they've ever done.

Joe Vorih: If you ever get a chance to visit Monodraught, you will see there, you can actually see every installed system in the UK they have ever done. Right? Which is really fantastic. So, as of now, all the Nuaire products that are needed can interface through this box into the whole system. This is first to market in this case, and we have already received our first orders in July, totaling over GBP 1 million just for the first two projects. So quite exciting. So despite already being up 24%, strength to strength. So the question I often get is, well, do you have the capacity for all this growth? Well, glad you asked. Or anticipating your question, I guess I should say, right? Our GBS case study we wanted to share today actually is exactly that.

Speaker #2: And this is really exciting. This is before the synergy potential of the new solution. That new solution, as Tim said earlier, is essentially the release of this product right here.

Speaker #2: Right? Which is really fantastic. So, as of now, all the new air products that are needed can interface through this box into the whole system.

Joe Vorih: That new solution, as Tim said earlier, is essentially the release of this product right here. This is the very last rapid prototype version. The production tools are in place, and we will be shipping this in production in September. What this is, a very exciting product. I am sure you are thinking the same. It is actually an interface box. It was designed in just 6 months, fully tested, released to market, and has now been for sale since June. What does this do? Essentially, as it shows there, and as Tim said earlier, if you take a complete school system, although this could be many other applications, an office building, a doctor's surgery, a community center, any building that has essentially a multi-mode ventilation system and higher air quality standards will benefit from this.

Speaker #2: This is the very last rapid prototype version. The production tools are in place and we will be shipping this in production in September, okay?

Speaker #2: This is, first to market in this case. And we've already received our first orders in July, totaling over a million pounds just for the first two projects.

Speaker #2: This is a very exciting product. I'm sure you're thinking the same. It's actually an interface box that was designed in just six months, fully tested, released to market, and has now been for sale since June.

Speaker #2: So quite exciting. So despite already being up 24% strength to strength, so question I often get is, well, do you have the capacity for all this growth?

Speaker #2: What does this do? Essentially, as it shows there, and as Tim said earlier, if you take a complete school system—although this could be many other applications: an office building, a doctor's surgery, a community center—any building that essentially has a multi-mode ventilation system and higher air quality standards will benefit from this.

Speaker #2: Well, glad you asked. our anticipating your question, I guess I should say, right? our GBS case study we wanted to share today, actually, is exactly that.

Speaker #2: It's a really good example of the business, in this case, Monadraft, our newly acquired business, saying, "We need some help. We see big orders coming.

Joe Vorih: It is a really good example of the business, in this case, Monodraught, our newly acquired business, saying, "We need some help. We see big orders coming. We need to increase our output." So we had a Kaizen team together of Monodraught people, plus people from ventilation and across the patch in Genuit, work for a week on how to improve the assembly cell there. As a result of this work, by the end of the week, they had demonstrated a new cell, which is now in full operation if you go there, which it takes up half the floor space, has demonstrated 40% more output capacity, so they are ahead of the 24% increase, and I am confident they will be able to do more than that, and gets a nearly 30% productivity benefit. Pretty impressive, and typical of the kind of results we can get in clearly addressing core business needs.

Speaker #2: We need to increase our output." So we had a Kaizen team together of Monadraft people plus people from ventilation and across the patch in Genuit.

Speaker #2: It allows the hybrid systems of new, of Mod and Draft, which essentially directly access outside air and allow natural ventilation—which often is very good and a lot of fresh air—to be linked directly to the new air units, which are the powered units often found in, say, the hallways, the canteens, the gymnasiums, the kitchens. So, when you think about all of those different applications, all this interface box allows all the new air products needed to now interface into the Mod and Draft ecosystem.

Joe Vorih: It allows the hybrid systems of Monodraught, which essentially directly access outside air and allow natural ventilation, which often is very good and a lot of fresh air, to be linked directly to the Nuaire units, which are the powered units often found in, say, the hallways, the canteens, the gymnasiums, the kitchens. So when you think about all of those different applications, this interface box allows all the Nuaire products needed to now interface into the Monodraught ecosystem. That is the Medina wall controllers, which are state-of-the-art, easy-to-use configurable wall controllers, which can do the whole ventilation system and control heating, and Acuity, which is the brains of the whole operation, one per building, which also allows us to remote monitor and diagnose and troubleshoot systems, which has been a great update.

Speaker #2: Worked for a week on how to improve the assembly cell at, at there. As a result of this work, by the end of the week, they had demonstrated a new cell, which is now in full operation if you go there, which it takes up half the floor space, has demonstrated 40% more output capacity, so they're, they're ahead of the 24% increase, and I'm confident they'll be able to do more than that.

Speaker #2: And gets, a nearly 30% productivity benefit. Pretty impressive. And typical of the kind of results we can get. And clearly addressing core business needs.

Speaker #2: That is the Medina wall controllers, which are state-of-the-art, easy to use, configurable wall controllers that can manage the entire ventilation system and control heating.

Speaker #2: Now, on the sustainability side, as I mentioned earlier, we lead with, you know, lowest carbon products with, high content of recycling, we continue to be the industry leader here.

Joe Vorih: Now, on the sustainability side, as I mentioned earlier, we lead with lowest carbon products with a high content of recycling. We continue to be the industry leader here. The question then comes, how do you actually document this? EPDs, or Environmental Product Declarations, are the carbon passports for products. It has become pretty much the industry standard approach to do this. Our customers are asking for these increasingly. We joined a clearing house for this called One Click LCA last year. In the first 6 months of this year, we saw over 3,000 views of these EPDs from about 350 end users. These are people around the industry, architects, specifiers, engineers, project managers, sustainability experts. They have been attached then, being used and put into the documentation for nearly 700 active projects.

Speaker #2: And Acuity, which is the brains of the whole operation—one per building—which also allows us to remotely monitor, diagnose, and troubleshoot systems, has been a great opportunity.

Speaker #2: So the question then comes, how do you actually document this? So EPDs, or Environmental Product Declarations, are effect the carbon passports for products. Right?

Speaker #2: If you ever get a chance to visit Mod and Draft, you'll see there—you can actually see every installed system in the UK they've ever done.

Joe Vorih: If you ever get a chance to visit Monodraught, you will see there, you can actually see every installed system in the UK they have ever done, which is really fantastic. So, as of now, all the Nuaire products that are needed can interface through this box into the whole system. This is first to market in this case, and we have already received our first orders in July, totaling over GBP 1 million just for the first 2 projects, so quite exciting. So despite already being up 24%, strength to strength. The question I often get is: Well, do you have the capacity for all this growth? Well, glad you asked. Or anticipating your question, I guess I should say. Our GBS case study we wanted to share today actually is exactly that.

Speaker #2: Right? Which is really fantastic. So, as of now, all the new air products that are needed can interface through this box into the whole system.

Speaker #2: It's become pretty much the industry standard approach to do this. Our customers are asking for these increasingly. We joined an org a sort of a clearinghouse for this called One Click LCA last year.

Speaker #2: This is first to market in this case, and we've already received our first orders in July, totaling over £1 million, just for the first two projects.

Speaker #2: And in the first six months of this year, we saw over 3,000 views of these EPDs from, almost 300 well, about 350 end users.

Speaker #2: So, quite exciting. So, despite already being up 24%—strength to strength—the question I often get is: well, do you have the capacity for all this growth?

Speaker #2: These are people around the industry: architects, specifiers, you know, engineers, project managers. sustainability experts, and they've been attached then being used in sort of put into the documentation for nearly 700 active projects.

Speaker #2: Well, glad you asked—or I was anticipating your question, I guess I should say, right? Our GBS case study we wanted to share today actually is exactly that.

Speaker #2: So this is proof, and this has grown very, very rapidly. So the adaptation of this is important. Why this matters is because we continue to push, right?

Joe Vorih: This is proof, and this has grown very rapidly. The adaptation of this is important. Why this matters is because we continue to push. At the end of last year, we were at 57% of our revenue coverage had these EPDs in place. That is definitely over 60% now, and it takes a bit of work to calculate, so we will update you as we go forward. The goal is to get more than 80% of our product line covered. The second thing that is important is that two-thirds of the time when people compare our products, we are the lowest carbon alternative, and that is really important as well. This is gaining momentum. Again, something we have worked on for years, but there are tangible examples of where this is really starting to matter.

Speaker #2: It's a really good example of the business—in this case, Mod and Draft, our newly acquired business—saying, "We need some help. We see big orders coming."

Joe Vorih: It is a really good example of the business, in this case, Monodraught, our newly acquired business, saying, "We need some help. We see big orders coming. We need to increase our output." We had a Kaizen team together of Monodraught people, plus people from ventilation and across the patch in Genuit, work for a week on how to improve the assembly cell there. As a result of this work, by the end of the week, they had demonstrated a new cell, which is now in full operation if you go there, which it takes up half the floor space, has demonstrated 40% more output capacity. They are ahead of the 24% increase, and I am confident they will be able to do more than that, and gets a nearly 30% productivity benefit. Pretty impressive and typical of the kind of results we can get in clearly addressing core business needs.

Speaker #2: At the end of last year, we were at 57% of our revenue coverage, had these EPDs in place. That's definitely over 60% now, and we it, it takes a bit of work to calculate, so we'll update you as we go forward.

Speaker #2: We need to increase our output. So, we had a Kaizen team together of MOD and DRAFT people, plus people from Ventilation, and across the patch in Genuit.

Speaker #2: Worked for a week on how to improve the assembly cell at, at there. As a result of this work, by the end of the week, they had demonstrated a new cell, which is now in full operation if you go there. It takes up half the floor space, has demonstrated 40% more output capacity, so they're ahead of the 24% increase, and I'm confident they'll be able to do more than that.

Speaker #2: But the goal is to get more than 80% of our product line covered. Right? The second thing that's important is that two-thirds of the time, right, when people compare our products, we are the lowest carbon alternative.

Joe Vorih: As a result of this work, by the end of the week, they had demonstrated a new cell, which is now in full operation if you go there, which it takes up half the floor space, has demonstrated 40% more output capacity. They are ahead of the 24% increase, and I am confident they will be able to do more than that, and gets a nearly 30% productivity benefit. Pretty impressive and typical of the kind of results we can get in clearly addressing core business needs.

Speaker #2: And that is really important as well. So this is gaining momentum. Again, something we've worked on for years, but there's tangible examples of where this is really starting to matter.

Speaker #2: And gets nearly a 30% productivity benefit. Pretty impressive, and typical of the kind of results we can get—clearly addressing core business needs.

Speaker #2: On the people side, this was just a, a fantastic, article in one of the trade magazines with some of our graduates and apprentices. and it's just kind of it's characteristic of the investment that we've made in our people.

Joe Vorih: On the people side, this was just a fantastic article in one of the trade magazines with some of our graduates and apprentices. It just kind of is characteristic of the investment that we have made in our people. When I came here 4 years, a little more than 4 years ago, 3.5% of our people were in what we call earn-and-learn programs, apprenticeships, graduate programs, and continuous education. It is really important not to forget about the colleagues who are already here, perhaps early leavers who have not had that kind of attention investment. They are learning math skills, lean work in accredited learning environments. I am pleased to say that as of now, about 20% of our people are in this wide range of earn-and-learn programs, reflecting our commitment to actually putting the best team in the field and making this the kind of place where people can grow an incredible career.

Speaker #2: Now, on the sustainability side, as I mentioned earlier, we lead with lowest-carbon products, with a high content of recycling. We continue to be the industry leader here.

Joe Vorih: On the sustainability side, as I mentioned earlier, we lead with lowest carbon products with a high content of recycling. We continue to be the industry leader here. The question then comes: How do you actually document this? EPDs or Environmental Product Declarations are effect the carbon passports for products. It has become pretty much the industry standard approach to do this. Our customers are asking for these increasingly. We joined a sort of a clearing house for this called One Click LCA last year. In the first six months of this year, we saw over 3,000 views of these EPDs from about 350 end users. These are people around the industry, architects, specifiers, engineers, project managers, sustainability experts. They have been attached then, being used and sort of put into the documentation for nearly 700 active projects.

Speaker #2: When I came here, four years over four years ago, three and a half percent of our people were in what we call earn and learn programs.

Speaker #2: Apprenticeships, graduate programs, and continuing said continuous education. It's really important not to forget about the colleagues who are already here. Perhaps early leavers who haven't had that kind of attention investment, they're learning math skills, lean work in accredited learning, environments.

Speaker #2: So the question then comes, how do you actually document this? So EPDs, or Environmental Product Declarations, are in effect the carbon passports for products, right?

Speaker #2: It's become pretty much the industry standard approach to do this. Our customers are asking for these increasingly. We joined an organization—a sort of clearinghouse for this—called One Click LCA, last year.

Speaker #2: I'm pleased to say that as of now, about 20% of our people are in this wide range of earn and learn programs. Reflecting our commitment to actually putting the best team in the field and making this the kind of place where people can grow an incredible career.

Speaker #2: And in the first six months of this year, we saw over 3,000 views of these EPDs from almost 350 end users. These are people around the industry: architects, specifiers, engineers, project managers.

Speaker #2: Very important investment there as well. On the M&A front, we've made great progress here. on the climate division, we acquired Monadraft last year. as I said, you know, the revenue synergy opportunity which really is underpinned by that solution that we walked through is better than we initially anticipated.

Joe Vorih: Very important investment there as well. On the M&A front, we have made great progress here. On the Climate Division, we acquired Monodraught last year. As I said, the revenue synergy opportunity, which really is underpinned by that solution that we walked through, is better than we initially anticipated. When we did the business case, and we decided to do the acquisition, we thought there was a double-digit million piece of revenue to go after that actually was on top of what Nuaire or Monodraught could do separately. Without giving specific numbers, that is even higher still as we have really gotten in and learned the market better. Really pleased about that. That was the primary driver here. The technology transfer we have talked about, and we are really collaborating together. Six-month new product release that is already driving additional revenue.

Speaker #2: sustainability experts, and they've been attached and are being used—sort of put into the documentation for nearly 700 active projects. So this is proof, and this has grown very, very rapidly.

Joe Vorih: This is proof, and this has grown very, very rapidly. The adaptation of this is important. Why this matters is because we continue to push, right? At the end of last year, we were at 57% of our revenue coverage had these EPDs in place. That is definitely over 60% now, and it takes a bit of work to calculate, so we will update you as we go forward. But the goal is to get more than 80% of our product line covered. The second thing that is important is that two-thirds of the time, when people compare our products, we are the lowest carbon alternative, and that is really important as well. This is gaining momentum. Again, something we have worked on for years, but there is tangible examples of where this is really starting to matter.

Speaker #2: So, the adaptation of this is important. Why this matters is because we continue to push, right? At the end of last year, we were at 57% of our revenue coverage and had these EPDs in place.

Speaker #2: And we did the business case, and we decided to do the acquisition. We thought there was a double-digit, millions piece of revenue to go after that actually was on top of, what new air or Monadraft could do separately.

Speaker #2: That's definitely over 60% now, and it takes a bit of work to calculate, so we'll update you as we go forward. But the goal is to get more than 80% of our product line covered.

Speaker #2: without giving specific numbers, that's even higher still as we've really gotten in and learned the market better. Really pleased about that. That was the primary driver here.

Speaker #2: Right? The second thing that's important is that two-thirds of the time, when people compare our products, we are the lowest carbon alternative. And that is really important as well.

Speaker #2: the technology transfer we've talked about, I mean, really collaborating together, six-month new product release that's already driving additional revenue. And importantly, we'd said at the beginning that these acquisitions need a clear pathway to get to the growth margin target.

Joe Vorih: And importantly, we had said at the beginning that these acquisitions need a clear pathway to get to the group margin target. Monodraught has that, and they are on track. On the Water Division side, we bought a collection of brands. You remember the Davidson acquisition. What is important is the brands inside there. Salamander Pumps and Cistermiser are water conservation brands that are really well-positioned for some of the innovation needed, as we do expect water conservation to make it into subsequent generations of housing regulations as that becomes a scarcity, becomes a problem. So that was really helpful. Talon is actually a bit like Manthorpe. They are complementary products to what we have. They go through the same channel, and have done really well.

Speaker #2: So, this is gaining momentum—again, something we've worked on for years—but there are tangible examples of where this is really starting to matter. On the people side, there was just a fantastic article in one of the trade magazines with some of our graduates and apprentices.

Speaker #2: Monadraft has that, and they're on track. On the water division side, we bought a collection of brands. You remember the David's acquisition. What's important is the brands inside there.

Joe Vorih: On the people side, this was just a fantastic article in one of the trade magazines with some of our graduates and apprentices. It just kind of is characteristic of the investment that we have made in our people. When I came here four years, well, more four years ago, 3.5% of our people were in what we call earn-and-learn programs, apprenticeships, graduate programs, and continuous education. It is really important not to forget about the colleagues who are already here, perhaps early leavers who have not had that kind of attention and investment. They are learning math skills, lean work in accredited learning environments. I am pleased to say that as of now, about 20% of our people are in this wide range of earn-and-learn programs, reflecting our commitment to actually putting the best team in the field and making this the kind of place where people can grow an incredible career.

Speaker #2: Salamander Pumps and Sister Mizer are water conservation brands that are really well-positioned for some of the innovation needed as we do expect water conservation to make it into subsequent generations of housing regulations.

Speaker #2: And it's just kind of characteristic of the investment that we've made in our people. When I came here, over four years ago, three and a half percent of our people were in what we call earn and learn programs.

Speaker #2: Apprenticeships, graduate programs, and continuing as a continuous education—it's really important not to forget about the colleagues who are already here, perhaps early leavers, who haven't had that kind of attention or investment.

Speaker #2: As that becomes a scarcity, becomes a problem. So that was really, really helpful. Talon is actually a bit like Mantrope. They're complementary products to what we have.

Joe Vorih: It is really important not to forget about the colleagues who are already here, perhaps early leavers who have not had that kind of attention and investment. They are learning math skills, lean work in accredited learning environments. I am pleased to say that as of now, about 20% of our people are in this wide range of earn-and-learn programs, reflecting our commitment to actually putting the best team in the field and making this the kind of place where people can grow an incredible career.

Speaker #2: They go through the same channel. and have done really well. Really pleased with the businesses. But perhaps even more so, we accessed the first synergies essentially of reduction in corporate overhead and they are on track, as we'd expected, this year.

Speaker #2: They're learning math skills, lean work, in accredited learning environments. I'm pleased to say that, as of now, about 20% of our people are in this wide range of earn and learn programs.

Joe Vorih: Really pleased with the businesses, but perhaps even more so, we accessed the first synergies, essentially a reduction in corporate overhead, and they are on track as we had expected this year. More importantly, they had some small under-invested facilities that we are going to be consolidating into two really good scaled Genuit facilities during the H2 of this year. This is the main driver for the over GBP 4 million step-up in operating cost reduction that we will see heading into 2027. But that means that they will continue to be ahead of plan. Already, however, they are in line with our group margin target of 20%, which is fantastic. Really pleased with both acquisitions, and of course, we remain active in the space, as Tim said, with the de-leveraging continuing, so we will be in a good position to continue to make more good acquisitions like this, increasingly beyond the UK.

Speaker #2: Reflecting our commitment to actually putting the best team in the field and making this the kind of place where people can grow an incredible career.

Speaker #2: More importantly, they had some small underinvested facilities that we are going to be consolidating into two really good scaled Genuit facilities during the second half of this year.

Speaker #2: Very important investment there as well. On the M&A front, we've made great progress here. On the climate division, we acquired Mod and Draft last year.

Joe Vorih: Very important investment there as well. On the M&A front, we have made great progress here. On the Climate Division, we acquired Monodraught last year. As I said, the revenue synergy opportunity, which really is underpinned by that solution that we walked through, is better than we initially anticipated. When we did the business case, and we decided to do the acquisition, we thought there was a double-digit millions piece of revenue to go after that actually was on top of what Nuaire or Monodraught could do separately. Without giving specific numbers, that is even higher still as we have really gotten in and learned the market better. Really pleased about that. That was the primary driver here. The technology transfer we have talked about, and we are really collaborating together. Six-month new product release that is already driving additional revenue.

Speaker #2: This is the main driver for the, over 4 million step-up in, in, operating, cost reduction that we'll see heading into 2027. but, that means that they'll continue to be ahead of plan.

Speaker #2: As I said, you know, the revenue synergy opportunity, which really is underpinned by that solution we walked through, is better than we initially anticipated.

Speaker #2: And we did the business case, and we decided to do the acquisition. We thought there was a double-digit million piece of revenue to go after that actually was on top of what Nuaire or Mod and Draft could do separately.

Speaker #2: Already, however, they are in line with our group margin target of 20%, which is fantastic. So really pleased with both acquisitions. And of course, we are we remain active in the space.

Speaker #2: Without giving specific numbers, that's even higher still, as we've really gotten in and learned the market better. Really pleased about that. That was the primary driver here.

Speaker #2: As Tim said, with, the deleveraging continuing, so we'll be in a good position to continue to make more good acquisitions like this. Increasingly beyond the UK.

Speaker #2: The technology transfer we've talked about—I mean, really collaborating together—has led to a six-month new product release that's already driving additional revenue. And importantly, we'd said at the beginning that these acquisitions need a clear pathway to get to the growth margin target.

Speaker #2: So if I turn to Outlook, it's no surprise. Like, we do we are counting well, not counting. We're, we're prepared for the challenging market conditions to continue for the remainder of the year.

Joe Vorih: If I turn to outlook, it is no surprise. We are prepared for the challenging market conditions to continue for the remainder of the year. The Middle East conflict has proven difficult to predict exactly how that is going to play out. Obviously, we are entering an autumn of continued political and economic circumstance and uncertainty in the UK. Another budget coming, thankfully not in November. Underlying operating margins, however, will benefit in the second term from a few different things. One is the impact of that balanced cost-price approach. That really started to help in May and June, but actually will have a full impact for the H2. The non-recurrence of the isolated operational issues at Adey. We root caused those, no issue there. And the productivity gains we continue to make across the piece.

Joe Vorih: And importantly, we had said at the beginning that these acquisitions need a clear pathway to get to the group margin target. Monodraught has that, and they are on track. On the Water Division side, we bought a collection of brands. You remember the Davidson acquisition. What is important is the brands inside there. Salamander Pumps and Cistermiser are water conservation brands that are really well-positioned for some of the innovation needed, as we do expect water conservation to make it into subsequent generations of housing regulations as that becomes a scarcity, becomes a problem. So that was really, really helpful. Talon is actually a bit like Manthorpe. They are complementary products to what we have that go through the same channel, and have done really well.

Speaker #2: the Middle East conflict, as proven, difficult to predict. exactly how that's gonna play out. Obviously, we're entering an autumn of continued political and economic circumstance and uncertainty in the UK.

Speaker #2: Mod and Draft has that, and they're on track. On the Water Division side, we bought a collection of brands. You remember the Davidson acquisition.

Speaker #2: What's important is the brands inside there. Salamander Pumps and Sistermiser are water conservation brands that are really well positioned for some of the innovation needed.

Speaker #2: Another budget coming, thankfully not in November. and underlying operating margins, however, will benefit in the second term from a few different things. One is the impact of that balanced cost price approach that, really started to help in May and June, but actually will have a full impact for the second half.

Speaker #2: As we do expect, water conservation will make it into subsequent generations of housing regulations, as that becomes a scarcity—becomes a problem. So that was really, really helpful.

Speaker #2: Talon is actually a bit like Mantorp. They're complementary products to what we have. They go through the same channel and have done really well.

Speaker #2: The non-recurrence of the isolated operational issues at 80. we root cause those. no issue there. and the productivity gains we continue to make across the piece.

Speaker #2: Really pleased with the businesses, but perhaps even more so, we accessed the first synergies—essentially, a reduction in corporate overhead—and they are on track, as we'd expected, this year.

Joe Vorih: Really pleased with the businesses, but perhaps even more so, we accessed the first synergies, essentially a reduction in corporate overhead, and they are on track, as we had expected, this year. More importantly, they had some small under-invested facilities that we are going to be consolidating into two really good scaled Genuit facilities during the H2 of this year. This is the main driver for the over GBP 4 million step-up in operating cost reduction that we will see heading into 2027. But that means that they will continue to be ahead of plan. Already, however, they are in line with our group margin target of 20%, which is fantastic. So really pleased with both acquisitions. And of course, we remain active in the space, as Tim said, with the deleveraging continuing, so we will be in a good position to continue to make more good acquisitions like this, increasingly beyond the UK.

Speaker #2: I'd emphasize as I said, most of the simplification work will actually take effect from 27 onward, but we continue to make the kinds of improvements like the case study I shared with you, GBS, across the business.

Joe Vorih: I would emphasize, as I said, most of the simplification work will actually take effect from 2027 onward, but we continue to make the kinds of improvements, like the case study I shared with you, GBS, across the business. As a result, we would like to confirm that our full-year expectations remain unchanged, and that, as I said, the profitability will benefit heading into 2027 by that over GBP 4 million of annualized operating cost reduction. Most importantly, the structural growth drivers that we have anchored our strategy on for the last four years are getting closer every day. We are now in some of the key regimes, Future Homes Standard, AMP8, CF25, and we see a lot more coming. So the future actually looks brighter than ever. And we are well-positioned to address those climate change challenges.

Speaker #2: More importantly, they had some small, under-invested facilities that we are going to be consolidating into two really good, scaled Genuit facilities during the second half of this year.

Speaker #2: As a result, we'd like to confirm that our full year expectations remain unchanged. and that, as I said, the profitability will benefit heading into 27 by that over 4 million of annualized operating cost reduction.

Speaker #2: This is the main driver for the over £4 million step-up in operating cost reduction that we'll see heading into 2027. But that means that they'll continue to be ahead of plan.

Joe Vorih: This is the main driver for the over GBP 4 million step-up in operating cost reduction that we will see heading into 2027. But that means that they will continue to be ahead of plan. Already, however, they are in line with our group margin target of 20%, which is fantastic. So really pleased with both acquisitions. And of course, we remain active in the space, as Tim said, with the deleveraging continuing, so we will be in a good position to continue to make more good acquisitions like this, increasingly beyond the UK.

Speaker #2: Most importantly, the structural growth drivers that we've anchored our strategy on for the last four years are getting closer every day. We are now in some of the key regimes, future home standard, AMP 8, CF 25, and we see a lot more coming.

Speaker #2: Already, however, they are in line with our group margin target of 20%, which is fantastic. So, really pleased with both acquisitions, and of course, we remain active in the space.

Speaker #2: So the future actually looks brighter than ever. and we are well-positioned to, address those climate change challenges. And I think that puts us well on path to deliver our long-term investment case where he said that we would certainly deliver, outperform the market, which we believe we have done, but increasingly we want that just to become much more consistent organic growth, period, right, by investing in those markets that are actually growing and less cyclical.

Speaker #2: As Tim said, with the deleveraging continuing, we'll be in a good position to continue to make more good acquisitions like this, increasingly beyond the UK.

Joe Vorih: I think that puts us well on path to deliver our long-term investment case, where we said that we would certainly deliver, outperform the market, which we believe we have done. But increasingly, we want that just to become much more consistent organic growth period. By investing in those markets that are actually growing and less cyclical. Of course, we will augment that with really good acquisitions as well, as you have done. You saw that impact this year, certainly in H1. We continue to be committed to taking that really large market we have, that GBP 3 billion kind of market opportunity and growing in the UK, and make sure that it is addressing and that we are addressing those key climate change drivers so that essentially, not only are we reducing the scope of our carbon, but we are delivering more and more climate friendly solutions.

Joe Vorih: So if I turn to outlook, it is no surprise. If we do, we are counting, well, not counting. We are prepared for the challenging market conditions to continue for the remainder of the year. The Middle East conflict has proven difficult to predict exactly how that is going to play out. Obviously, we are entering an autumn of continued political and economic circumstance and uncertainty in the UK. Another budget coming, thankfully not in November. And underlying operating margins, however, will benefit in the second term from a few different things. One is the impact of that balanced cost price approach that really started to help in May and June, but actually will have a full impact for the H2. The non-recurrence of the isolated operational issues at ADEY. We root caused those, no issue there. And the productivity gains we continue to make across the piece.

Joe Vorih: If I turn to outlook, it is no surprise. If we do, we are counting, well, not counting. We are prepared for the challenging market conditions to continue for the remainder of the year. The Middle East conflict has proven difficult to predict exactly how that is going to play out. Obviously, we are entering an autumn of continued political and economic circumstance and uncertainty in the UK. Another budget coming, thankfully not in November. And underlying operating margins, however, will benefit in the second term from a few different things. One is the impact of that balanced cost price approach that really started to help in May and June, but actually will have a full impact for the H2. The non-recurrence of the isolated operational issues at ADEY. We root caused those, no issue there. And the productivity gains we continue to make across the piece.

Speaker #2: The Middle East conflict has proven difficult to predict—exactly how that's going to play out. Obviously, we're entering an autumn of continued political and economic circumstance and uncertainty in the UK.

Speaker #2: and of course, we'll augment that with really good acquisitions as well as you've done. So you saw that impact this year, certainly in the first half.

Speaker #2: continue to be committed to, taking that really large market we have, that 3 billion kind of market opportunity and growing in the UK. And make sure that it's addressing that we are addressing those key climate change drivers so that essentially, not only are we reducing the scope of our carbon, but we're delivering more and more climate-friendly solutions.

Speaker #2: Another budget coming—thankfully, not in November. Underlying operating margins, however, will benefit in the second term from a few different things. One is the impact of that balanced cost-price approach that really started to help in May and June, but actually will have a full impact for the second half.

Speaker #2: All of this then matters as a sustainable investment case where we're committed to our, over 20% margin target for the business and the over 20% return on invested capital.

Joe Vorih: All of this then matters as a sustainable investment case where we are committed to our over 20% margin target for the business and the over 20% return on invested capital. We think that the work we have done, the growth we are seeing starting to come through in the future years, and the acquisitions have us well on track for that. Finally, that strong cash conversion is really important so that we can continue to delever, make more good acquisitions, improve those through the application of the Genuit Business System, and continue that cycle. With that, I would like to open up to questions. Tim, if you would like to join me. That is the end of the presentation, so all right. Sure. Let us get started. Yes, you are first. Sorry.

Speaker #2: The non-recurrence of the isolated operational issues at 80—we root cause those, no issue there. And the productivity gains, we continue to make across the piece.

Speaker #2: We think that the work we've done, the growth we're seeing starting to come through in the future years and the acquisitions have us well on track for that.

Speaker #2: I'd emphasize, as I said, most of the simplification work will actually take effect from '27 onward, but we continue to make the kinds of improvements—like the case study I shared with you, GBS—across the business.

Joe Vorih: I'd emphasize, as I said, most of the simplification work will actually take effect from 2027 onward, but we continue to make the kinds of improvements, like the case study I shared with you at GBS across the business. As a result, we'd like to confirm that our full-year expectations remain unchanged, and that, as I said, the profitability will benefit heading into 2027 by that over GBP 4 million of annualized operating cost reduction. Most importantly, the structural growth drivers that we've anchored our strategy on for the last four years are getting closer every day. We are now in some of the key regimes, Future Homes Standard, AMP8, CF25, and we see a lot more coming. The future actually looks brighter than ever. And we are well-positioned to address those climate change challenges.

Speaker #2: And finally, that strong cash conversion is really important so that we can continue to deliver make good more acquisitions, improve those through the application of the Genuit business system, and continue that cycle.

Speaker #2: As a result, we'd like to confirm that our full-year expectations remain unchanged, and that, as I said, profitability will benefit heading into '27 by that over £4 million of annualized operating cost reduction.

Speaker #2: So with that, I'd like to open up to questions. Tim, if you'd like to join me. That's the end of the presentation. So all right.

Speaker #2: Most importantly, the structural growth drivers that we've anchored our strategy on for the last four years are getting closer every day. We are now in some of the key regimes: Future Home Standard, AMP8, CF25, and we see a lot more coming.

Speaker #2: Sure. Let's get started. Yes, you're first. Sorry. Oh, we're good.

Tim Pullen: We are good.

Speaker #1: Yeah.

Rob Chantry: Hi, it is Rob Chantry from Bloomberg. Thanks for the presentation, guys. Just three questions. Firstly, can you talk about some of the, I guess, political dynamics of the timing lag on cost recovery? You mentioned price increases, sorry, cost increases, May and April, but it was May when you started putting the prices up. Is there any kind of conversation around increasing indexation or the kind of puts and takes of trying to get price increases in would be interesting. Secondly, could you just kind of give a bit more of a structural update on Adey in terms of the state of the boiler market, the proposition that it has, the headwind that it could face on a multi-year view separate from the near-term issues?

Rob Chantry: Hi, it is Rob Chantry from Berenberg. Thanks for the presentation, guys. Just three questions. Firstly, can you talk about some of the, I guess, political dynamics of the timing lag on cost recovery? You mentioned price increases, sorry, cost increases, May and April, but it was May when you started putting the prices up. Is there any kind of conversation around increasing indexation or the kind of puts and takes of trying to get price increases in would be interesting. Secondly, could you just kind of give a bit more of a structural update on Adey in terms of the state of the boiler market, the proposition that it has, the headwind that it could face on a multi-year view separate from the near-term issues?

Speaker #2: hi. it's, Rob Chantry from Bernberg. Thanks for the presentation, guys. just three questions. So firstly, could you talk about some of the, I guess, political dynamics of the timing lag on cost recovery?

Speaker #2: So the future actually looks brighter than ever, and we are well positioned to address those climate change challenges. I think that puts us well on the path to deliver our long-term investment case, where we said that we would certainly deliver and outperform the market, which we believe we have done. But increasingly, we want that to become much more consistent organic growth, period, right?

Speaker #2: So you mentioned price increases. sorry, cost increases. May and April, but it was May when you started putting the prices up. Is there any kind of conversation around increasing indexation or that the kind of puts and takes of trying to get price increases in?

Joe Vorih: And I think that puts us well on path to deliver our long-term investment case, where we said that we would certainly deliver, outperform the market, which we believe we have done. But increasingly, we want that just to become much more consistent organic growth period, right? By investing in those markets that are actually growing and less cyclical. Of course, we'll augment that with really good acquisitions as well as you've done. So you saw that impact this year, certainly in H1. Continue to be committed to taking that really large market we have, that GBP 3 billion kind of market opportunity and growing in the UK, and make sure that it's addressing, and that we are addressing those key climate change drivers, so that essentially, not only are we reducing the scope of our carbon, but we're delivering more and more climate-friendly solutions.

Joe Vorih: I think that puts us well on path to deliver our long-term investment case, where we said that we would certainly deliver, outperform the market, which we believe we have done. But increasingly, we want that just to become much more consistent organic growth period, right? By investing in those markets that are actually growing and less cyclical. Of course, we'll augment that with really good acquisitions as well as you've done. So you saw that impact this year, certainly in H1. Continue to be committed to taking that really large market we have, that GBP 3 billion kind of market opportunity and growing in the UK, and make sure that it's addressing, and that we are addressing those key climate change drivers, so that essentially, not only are we reducing the scope of our carbon, but we're delivering more and more climate-friendly solutions.

Speaker #2: It'd be interesting. secondly, could you just kind of give a bit more of a structural update on AD in terms of the state of the boiler market, the proposition that it has, the headwinds that it could face on a, a multi-year view separate from the, the near-term issues?

Speaker #2: By investing in those markets that are actually growing and less cyclical, and of course, we'll augment that with really good acquisitions as well, as you've done.

Speaker #2: So you saw that impact this year, certainly in the first half. We continue to be committed to taking that really large market we have—that £3 billion kind of market opportunity—and growing in the UK.

Speaker #2: and then thirdly, could you just kind of give us an update on the, potential pipeline of international acquisitions and expansion, like two really good deals last year, but both in the UK?

Rob Chantry: And then thirdly, could you just give us an update on the potential pipeline of international acquisitions and expansion, like two really good deals last year, but both in the UK. Is that something you are still prospecting in the, I guess, the wider climate and water space in Continental Europe? Thanks.

Speaker #2: And make sure that we're addressing those key climate change drivers, so that essentially, not only are we reducing the scope of our carbon, but we're delivering more and more climate-friendly solutions.

Speaker #2: Is that something you're still prospecting in the, I guess, the wider climate and water space in contents of Europe? Thanks.

Speaker #1: I think the first two on pricing and AD, and then I'll take the acquisitions piece.

Joe Vorih: I will take the first two on pricing and Adey, and then I will take the acquisitions piece.

Speaker #2: Sure.

Tim Pullen: Sure. Okay. So yeah, on the cost dynamics, I think we have seen the inflation come through. It is a complex landscape. You cannot just look at the oil indices, and you cannot just look at the naphtha indices or things like that. The polymer pricing is really specific to the grade of polymer, so quite a complex landscape. We have put through double-digit price increases to cover that. We have seen, I guess, on average, things stabilize at the cost level. The picture remains volatile, obviously, in the Middle East. We are not seeing polymer costs come down dramatically. That may change in the H2, and we will manage that accordingly. If we see deflation, then clearly we will be having conversations with customers if that comes through. It has not yet. It could be that it stays where it is.

Speaker #1: Okay.

Speaker #2: All of this then matters as a sustainable investment case, where we're committed to our over 20% margin target for the business, and the over 20% return on invested capital.

Speaker #2: So, yeah, I mean, on the cost dynamics, I think, you know, we've seen the, the inflation come through. It's a complex landscape. You can't just look at the oil indices and you can't just look at, the, the kind of, NAPTHA indices or things like that.

Joe Vorih: All of this then matters as a sustainable investment case, where we're committed to our over 20% margin target for the business and the over 20% return on invested capital. We think that the work we've done, the growth we're seeing starting to come through in the future years, and the acquisitions have us well on track for that. And finally, that strong cash conversion is really important so that we can continue to delever, make good more acquisitions, improve those through the application of the Genuit Business System, and continue that cycle. So with that, I'd like to open up to questions. Tim, if you'd like to join me. That's the end of the presentation, so all right. Sure. Let's get started. Yes, you're first. Sorry.

Speaker #2: We think that the work we've done, the growth we're seeing starting to come through in the future years, and the acquisitions have us well on track for that.

Speaker #2: The polymer pricing is really specific to the grade of polymer. So quite a complex landscape. We've put through double-digit price increases to cover that.

Speaker #2: And finally, that strong cash conversion is really important, so that we can continue to delever, make more acquisitions, improve those through the application of the Genuit Business System, and continue that cycle.

Speaker #2: we've seen, I guess, on average things stabilize at, at the cost level. the picture remains volatile, obviously, in the Middle East. We're not seeing polymer costs come down dramatically.

Speaker #2: So with that, I'd like to open it up to questions. Tim, if you'd like to join me, that's the end of the presentation. So, all right.

Speaker #2: that may change in the second half, and we'll manage that accordingly if we see deflation, then clearly we'll be having conversations with customers if that comes through.

Speaker #2: Sure, let's get started. Yes, you're first. Sorry. Oh, okay.

Speaker #2: It hasn't yet. it could be that it stays where it is. We can't rule out further increases if we saw further inflation, right, if there was a re-escalation.

Speaker #1: Yeah.

Tim Pullen: Okay.

Speaker #2: Hi, it's Rob Chanty from Berenberg. Thanks for the presentation, guys. There's three questions. So firstly, could you talk about some of the, I guess, political dynamics of the timing lag on cost recovery?

Tim Pullen: We cannot rule out further increases if we saw further inflation, if there was a re-escalation. So it is a dynamic picture. We have managed it well. Our procurement teams are liaising across the supply chain to get as best value as possible and maintain supply, which they have been successful at doing. We just need to continue to actively manage that, and see how we go. In terms of Adey, actually, there is a quality business in there. We have had two issues in the half, which are non-recurring. But they have been root caused, and we have made improvements there as to how we manage our inventory, so that we do not get those and how we manage our suppliers so that does not repeat. They are a strong gross margin business. It is a high market share product for a reason. It is the highest quality product in the market.

Rob Chantry: Hi, it's Rob Chantry from Berenberg. Thanks for the presentation, guys. Just three questions. Firstly, can you talk about some of the, I guess, political dynamics of the timing lag on cost recovery? So you mentioned price increases, sorry, cost increases, May and April, but it was May when you started putting the prices up. Is there any kind of conversation around increasing indexation or the kind of puts and takes of trying to get price increases in would be interesting. Secondly, could you just give a bit more of a structure update on ADEY in terms of the state of the boiler market, the proposition that it has, the headwind that it could face on a multi-year view separate from the near-term issues?

Speaker #2: So it's a dynamic picture. We've managed it well. Our procurement teams are liaising across the supply chain to get as best value as possible and maintain supply, which they've been successful at doing.

Speaker #2: So you mentioned price increases—sorry, cost increases—in May and April, but it was May when you started putting the prices up. Is there any kind of conversation around increasing indexation, or the puts and takes of trying to get price increases in?

Speaker #2: We just need to continue to actively manage that. and see how we go. in terms of AD, actually, you know, there's a quality business in there.

Speaker #2: It'd be interesting. Secondly, could you just kind of give a bit more of a structural update on AD, in terms of the state of the boiler market, the proposition that it has, and the headwinds that it could face on a multiyear view, separate from the near-term issues?

Speaker #2: We've had two issues in the, the half. which are non-recurring. but they have been root caused and, and we've made improvements there as to how we manage our inventory and so that we don't get those and how we manage our suppliers.

Speaker #2: And then, thirdly, could you just give us an update on the potential pipeline of international acquisitions and expansion? There were two really good deals last year, but both were in the UK.

Rob Chantry: Could you just give an update on the potential pipeline of international acquisitions and expansion, like two really good deals last year, but both in the UK. Is that something you are still prospecting in the, I guess, the wider climate and water space in Continental Europe? Thanks.

Speaker #2: So that doesn't repeat. they are a strong gross margin business. It's a high, market share product for a reason. It's the highest quality product in the market.

Speaker #2: Is that something you're still prospecting in the, I guess, the wider climate and water space in the context of Europe? Thanks.

Speaker #2: really, the, the first to market back in the day in terms of magnetic filtration and continuing to innovate. so it's a move from boilers to heat pumps.

Tim Pullen: Really the first to market back in the day in terms of magnetic filtration and continuing to innovate. As you move from boilers to heat pumps, they have products for those as well because whatever your system, a hydronic water system, it needs to be kept clean to run efficiently, to protect the heat source, whether that is a boiler or a heat pump, and also to maintain the life of that system and the efficiency. That will continue. Clearly, the more RMI work that is out there, the more people are moving house, doing renovations, extensions, all those kind of things, that will drive volume. We are still at a low point in the cycle, but we do still see that that is a really important part of our overall portfolio.

Speaker #1: I think the first two, on pricing and AD, and then I'll take the acquisitions piece. Okay.

Joe Vorih: I will take the first two on pricing and ADEY, then I will take the acquisitions piece.

Tim Pullen: Sure.

Speaker #2: So yeah, I mean, on the cost dynamics, I think, you know, we've seen the inflation come through. It's a complex landscape. You can't just look at the oil indices, and you can't just look at the, the kind of NAPTHA indices or things like that.

Joe Vorih: Okay.

Tim Pullen: Well, on the cost dynamics, I think, we have seen the inflation come through. It is a complex landscape. You cannot just look at the oil indices, and you cannot just look at the naphtha indices or things like that. The polymer pricing is really specific to the grade of polymer. So quite a complex landscape. We have put through double-digit price increases to cover that. We have seen, I guess, on average, things stabilize at the cost level. The picture remains volatile, obviously, in the Middle East. We are not seeing polymer costs come down dramatically. That may change in the H2, and we will manage that accordingly. If we see deflation, then clearly we will be having conversations with customers if that comes through. It has not yet. It could be that it stays where it is.

Speaker #2: They have products for those as well because whatever your system, a hydronic water system, it needs to be kept clean, to run efficiently, to protect the heat source, whether that's a boiler or a heat pump.

Speaker #2: The polymer pricing is really specific to the grade of polymer, so quite a complex landscape. We've put through double-digit price increases to cover that.

Speaker #2: and also to maintain the, the life of that system. And the efficiency. So that will continue. Clearly, the more RMI work that's out there, the more people are moving house, doing renovations, extensions, all those kind of things, that will drive volume, right?

Speaker #2: We've seen, I guess, on average, things stabilize at the cost level. The picture remains volatile, obviously, in the Middle East. We're not seeing polymer costs come down dramatically.

Speaker #2: So we are still at a low point in the cycle. but we do still see that that's a really important part of our, our overall portfolio.

Speaker #2: That may change in the second half, and we'll manage that accordingly. If we see deflation, then clearly we'll be having conversations with customers if that comes through.

Joe Vorih: Sure. On the M&A, great question. As I have said, we have been quite active. These two deals, one was a process, one was actually a bilateral piece of effort on our part. The ones that closed, they are representative of many of the things we would like to see going forward. Good, easy bolt on size, good strategic fit. The one thing that they did not do is bring us a bit more geographic diversification. Obviously, the solution infill was really pleasant on both of them, especially Monodraught. Our funnel is quite active. We remain, as I have always said, we would like to be cultivating between five and 10 active discussions at a given time.

Speaker #2: So on the M&A, great question. So as I've said, we've, we've been quite active. these two, deals, you know, one was a process, one was actually a bilateral, piece of effort on our part.

Speaker #2: It hasn't yet. It could be that it stays where it is. We can't rule out further increases if we saw further inflation, right? If there was a re-escalation.

Tim Pullen: We cannot rule out further increases if we saw further inflation, if there was a re-escalation. So it is a dynamic picture. We have managed it well. Our procurement teams are liaising across the supply chain to get as best value as possible and maintain supply, which they have been successful at doing. We just need to continue to actively manage that, and see how we go. In terms of ADEY, actually, there is a quality business in there. We have had two issues in the half, which are non-recurring. But they have been root caused, and we have made improvements there as to how we manage our inventory, so that we do not get those, and how we manage our suppliers so that does not repeat. They are a strong gross margin business. It is a high market share product for a reason. It is the highest quality product in the market.

Speaker #2: the ones that, that, that closed, they're representative of many of the things we'd like to see going forward. you know, good, easy bolt-on size, good strategic fit, right?

Speaker #2: The one thing that they didn't do is bring us a bit more geographic, diversification. O-obviously, the solution, infill was really pleasant, on both of them, especially Monodraft.

Speaker #2: We just need to continue to actively manage that and see how we go. In terms of AD, actually, you know, there's a quality business in there.

Speaker #2: Our funnel is quite active. we remain as I've always said, we'd like to be cultivating between 5 and 10, you know, active discussions day given time.

Speaker #2: We've had two issues in the half, which are non-recurring, but they have been root-caused, and we've made improvements there as to how we manage our inventory so that we don't get those, and how we manage our suppliers so that doesn't repeat.

Tim Pullen: We have had two issues in the half, which are non-recurring. But they have been root caused, and we have made improvements there as to how we manage our inventory, so that we do not get those, and how we manage our suppliers so that does not repeat. They are a strong gross margin business. It is a high market share product for a reason. It is the highest quality product in the market.

Speaker #2: it's always difficult to know when things will happen, of course, but I can tell you right now that we're at the upper end of that range and, most of those deals that we're actively discussing with people, hoping to make something happen, cultivating relationships are outside the UK.

Joe Vorih: It is always difficult to know when things will happen, of course, but I can tell you right now that we are at the upper end of that range, and most of those deals that we are actively discussing with people, hoping to make something happen, cultivating relationships, are outside the UK. Our main focus is on ventilation first and then stormwater management, because we see those are the two end markets, which by the way, not just in the UK, have those same sorts of macroeconomic drivers everywhere. These are issues, those slides I showed earlier, those are true across all of Europe as well. The climate issues, the mitigations there, and the need for better ventilation is actually a universal issue today, too. Hope that answers your question.

Speaker #2: They are a strong gross margin business. It's a high market share product for a reason—it's the highest quality product in the market; really, the first to market back in the day in terms of magnetic filtration and continuing to innovate. So, it's a move from boilers to heat pumps.

Speaker #2: our main focus is on, ventilation first and then stormwater management. 'cause we see those are the two, end markets, which by the way, not just in the UK, have the same sorts of macroeconomic drivers everywhere.

Speaker #2: I mean, these are issues you know, those, those slides I showed earlier, I mean, those are true across all of Europe as well. So the climate issues, the mitigations there, and the need for better ventilation is actually a universal issue today too.

Speaker #2: They have products for those as well, because whatever your system—a hydronic water system—it needs to be kept clean to run efficiently, to protect the heat source, whether that's a boiler or a heat pump.

Speaker #2: So hope that answers your question. All right. Let's see. Ainsley, sure. I'll try to get we've got time to get to everyone, so. Yeah.

Speaker #2: And also to maintain the life of that system and the efficiency, so that will continue. Clearly, the more RMI work that's out there—the more people are moving house, doing renovations, extensions, all those kinds of things—that will drive volume, right?

Aynsley Lammin: Thank you.

Rob Chantry: Thank you.

Joe Vorih: All right. Let's see. Aynsley. We'll try to get. We've got time to get to everyone.

Speaker #3: Thanks. Ainsley Lamer from Everset. Just two for me, please. Just wondering, obviously, like for like, declining revenue for May and June was better than the first four months.

Aynsley Lammin: Thanks. Aynsley Lammin from Investec. Just two from me, please. Just wondering, obviously like for like, decline in revenue for May and June was better than the first four months. Just wondering how much of that was kind of better pricing versus the volumes actually trend a bit better as well on what you've seen in July. Then the second question, just on the fact that PVC price, the polymer price has gone up. Is there a kind of risk in the H2 you get more substitution for copper? I'm not sure how that dynamic works, what the price differential is. Any color on that would be interesting. Thanks.

Speaker #2: So, we are still at a low point in the cycle, but we do still see that that's a really important part of our overall portfolio.

Speaker #3: Just wondering how much of that was kind of better pricing versus the volumes actually, you know, trend, trend a bit better as well. And what you've seen in July.

Speaker #1: Sure.

Joe Vorih: Sure. On the M&A, great question. As I have said, we have been quite active. These two deals, one was a process, one was actually a bilateral piece of effort on our part. The ones that closed, they are representative of many of the things we would like to see going forward. Good, easy bolt-on size, good strategic fit. The one thing that they did not do is bring us a bit more geographic diversification. Obviously, the solution infill was really pleasant on both of them, especially Monodraught. Our funnel is quite active. We remain, as I have always said, we would like to be cultivating between five and 10 active discussions at a given time.

Joe Vorih: Sure. On the M&A, great question. As I have said, we have been quite active. These two deals, one was a process, one was actually a bilateral piece of effort on our part. The ones that closed, they are representative of many of the things we would like to see going forward. Good, easy bolt-on size, good strategic fit. The one thing that they did not do is bring us a bit more geographic diversification. Obviously, the solution infill was really pleasant on both of them, especially Monodraught. Our funnel is quite active. We remain, as I have always said, we would like to be cultivating between 5 and 10 active discussions at a given time.

Speaker #3: And then the second question, just on the fact that PVC price and polymer price has gone up, i-is there a kind of risk in the second half, you get more substitution for copper?

Speaker #3: I mean, I'm not sure how that dynamic works, what the price differentiator is, any color on that would be interesting. Thanks.

Speaker #2: the ones that, that, that closed, they're representative of many of the things we'd like to see going forward. you know, good, easy bolt-on size, good strategic fit, right?

Speaker #1: I'll take the first one. I'll take the second. Yeah.

Joe Vorih: Want to take the first one? I'll take the second.

Speaker #2: Yeah. So, sorry, what your first one was on the.

Tim Pullen: Yeah. Sorry, what your first one was on the-

Speaker #2: The one thing that they didn't do is bring us a bit more geographic diversification. Obviously, the solution infill was really pleasant on both of them, especially Monodraft.

Speaker #3: You May, June, the improvement like.

Aynsley Lammin: May, June, the improvement like-

Speaker #2: Oh, the improvement May, June. Yeah. So yeah. So obviously, there's a big price impact there. We've put through double-digit price impacts on the batch 60% of our business.

Tim Pullen: Oh, the improvement May, June. Yeah.

Aynsley Lammin: Volume

Tim Pullen: Yeah. So obviously, there is a big price impact there. We have put through a double-digit price impact on about 60% of our business, so that has had a big effect. But we did also see a seasonal uptick. So you normally expect May, June, to be higher on a seasonal basis, given the activity levels in the construction industry as a whole, and that did come through. So that is a solid sign. So I would see the market volumes really as still being slightly negative year-on-year overall, but stabilized and not getting worse. And that has really come through in July as well. So July was in line with our expectations and is consistent with the kind of seasonal phasing of May and June.

Speaker #2: Our funnel is quite active. We remain, as I've always said, that we'd like to be cultivating between five and ten active discussions at any given time.

Speaker #2: So that's, that's had a big effect. But we did also see a seasonal uptick. So you'd normally expect May, June, to be higher on a seasonal basis, given the, the activity levels in the construction industry as a whole.

Speaker #2: It's always difficult to know when things will happen, of course, but I can tell you right now that we're at the upper end of that range. Most of those deals that we're actively discussing with people—hoping to make something happen, cultivating relationships—are outside the UK.

Speaker #2: And that did come through. So that's a solid sign. So I would see the market volumes really as still being, you know, slightly negative year on year overall, but stabilized and not, and not getting worse.

Speaker #2: Our main focus is on ventilation first, and then stormwater management, because we see those are the two end markets—which, by the way, not just in the UK.

Speaker #2: and that's really come through in July as well. So July was in line with our expectations and is, is consistent with the, the kind of seasonal phasing of, of May and June.

Speaker #2: We have those same sorts of macroeconomic drivers everywhere. I mean, these are issues—you know, those slides I showed earlier—those are true across all of Europe as well.

Speaker #1: So on your second question, Ainsley, on, on so could we see some sort of reverse substitution with the pricing increases? I really don't think so.

Joe Vorih: On your second question, Aynsley, on could we see some sort of reverse substitution with the pricing increases? I really do not think so. Two different sides. One is if you think about plumbing, the switch from copper to plastic has been going on steadily for decades now, and one of the things that come- It is a completely different way of working. Push fit ease, much faster assembly work, much more assurance of not having leaks. I think going back to soldering is something I do not think you will see a lot of plumbers who have not already made the switch, or have made the switch, won't be going back. The other thing that I remind people that as much as a double-digit price increase in plumbing may is significant for us in the product line, plumbing is still less than 1% of the cost of a house.

Speaker #1: two different sides. One is if you think about plumbing, the switch from copper to plastic has been going on steadily for decades now. And, one of the things that comes is a completely different way of working.

Speaker #2: So the climate issues, the mitigations there, and the need for better ventilation is actually a universal issue today, too. So, I hope that answers your question.

Speaker #1: Thank you.

Speaker #2: All right. Let's see. Ainsley, sure. I'll try to get—we've got time to get to everyone, so.

Speaker #1: You know, a push-fit is much faster assembly work, much more assurance of, of not having leaks. I think going back to soldering is something I don't think you'll see a lot of plumbers who haven't already made the switch or have made the switch won't be going back.

Rob Chantry: Thank you.

Joe Vorih: All right. Let's see. Ainslie. Sure. We'll try to get. We've got time to get to everyone, so yeah.

Joe Vorih: All right. Let's see. Aynsley. Sure. We'll try to get. We've got time to get to everyone, so yeah.

Speaker #3: Thanks. Ainsley Lamar from Investa. Just two from me, please. Just wondering—obviously, like-for-like declining revenue for May and June was better than the first four months.

Aynsley Lammin: Thanks. Aynsley Lammin from Investec. Just two from me, please. Wondering, obviously, like for like, decline in revenue for May and June was better than the first four months. Just wonder how much of that was kind of better pricing versus

Speaker #1: The other thing to, to I remind people that as much as a double-digit price price increase in plumbing may significant for us in the product line, plumbing is still, like, less than 1% of the cost of a house.

Speaker #3: Just wondering, how much of that was better pricing versus the volumes actually, you know, trending a bit better as well, and what you've seen in July?

Aynsley Lammin: the volumes actually trend a bit better as well on what you've seen in July. Then the second question, just on the fact that PVC price, the polymer price, has gone up. Is there a kind of risk in the H2 you get more substitution for copper? I'm not sure how that dynamic works, what the price differential is. Any color on that would be interesting. Thanks.

Speaker #3: And then the second question, just on the fact that PVC price and polymer price has gone up—is there a kind of risk in the second half that you get more substitution for copper?

Speaker #1: So the overall pressure to shift is probably bigger on other issues. and I think you'll see higher up the bill of materials, perhaps a bit more substitution pressure over time.

Joe Vorih: The overall pressure to shift is probably bigger on other issues. I think you will see higher up the bill of materials, perhaps a bit more substitution pressure over time. We are not worried about that. On the drainage side, the substitution has been largely from concrete to plastic over the years. Similar situation. We think that the total installed cost of the solution is still far superior, so we are not anticipating or modeling for a reverse substitution to happen. Sure. I will go there, and then we will come back over to this side. How is that?

Speaker #3: I mean, I'm not sure how that dynamic works—what the price differentiator is. Any color on that would be interesting. Thanks.

Speaker #1: We're not worried about that. On the drainage side, the substitution's been largely from concrete to plastic over the years. Similar, similar situation. We think that the total installed cost of the solution is still far superior.

Speaker #1: I'll take the first one. I'll take the second.

Joe Vorih: I'll take the first one. I'll take the second.

Speaker #2: Yeah, so sorry. Well, the first one was on the...

Tim Pullen: Yeah. Sorry, your first one was on the

Speaker #3: You saw improvement in May and June, like.

Joe Vorih: May, June, the improvement

Speaker #2: Oh, the improvement in May and June, yeah. So obviously, there's a big price impact there. We've put through double-digit price impacts on the batch—60% of our business.

Tim Pullen: The improvement May, June. Yeah. There is a big price impact there. We have put through a double-digit price impact on about 60% of our business. That has had a big effect. But we did also see a seasonal uptick. You normally expect May, June to be higher on a seasonal basis, given the activity levels in the construction industry as a whole, and that did come through. That is a solid sign. I would say the market volumes really are still being slightly negative year on year overall, but stabilized and not getting worse. That has really come through in July as well. July was in line with our expectations and is consistent with the kind of seasonal phasing of May and June.

Speaker #1: So we're not anticipating or modeling for a reverse substitution to happen. Sure. go over there and then we'll come back over to this side.

Speaker #2: So that's had a big effect. But we did also see a seasonal uptick. So you normally expect May and June to be higher on a seasonal basis.

Speaker #1: How's that?

Speaker #3: Yeah. This is Charlie Campbell at C4. couple from me as well, please, if I can. So, first of all, just as we get very close to future homes, sort of finally, I suppose, just wonder if you've got a feel now for kind of pounds per house under a house and for a house now versus pounds per house in a in a future home standard sort of fully compliant unit with selling everything that you could into it.

Charlie Campbell: Yeah. It is Charlie Campbell at Stifel. Couple from me as well, please, if I can. First of all, just as we get very close to Future Homes finally, I suppose. Just wonder if you have got a feel now for kind of GBP per house under a house, for a house now versus GBP per house in a Future Homes Standard, sort of fully compliant unit with selling everything that you could into it. The second question was just on, again, that plastic concrete point. Just wondering if that is coming through as you expect under AMP8.

Speaker #2: given the, the activity levels in the construction industry as a whole, and that did come through. So that's a solid sign. So I would see the market volumes really as still being, you know, slightly negative year on year overall, but stabilized and not, and not getting worse.

Speaker #2: And that's really come through in July as well. So July was in line with our expectations and is consistent with the kind of seasonal phasing of May and June.

Speaker #3: and then the second question was just on g-getting that plastic, concrete point, and just wondering if that's coming through as you expect under Ampate.

Speaker #3: So, on your second question, Ainsley, on—on, so, could we see some sort of reverse substitution with the pricing increases? I really don't think so.

Joe Vorih: On your second question, on could we see some sort of reverse substitution with the pricing increases? I really do not think so. Two different sides. One is, if you think about plumbing, the switch from copper to plastic has been going on steadily for decades now. One of the things that come. It is a completely different way of working. Push-fit ease, much faster assembly work, much more assurance of not having leaks. I think going back to soldering is something I do not think you will see a lot of plumbers who have not already made the switch, or have made the switch, will not be going back. The other thing that I remind people that as much as a double-digit price increase in plumbing may be significant for us in the product line, plumbing is still less than 1% of the cost of a house.

Speaker #3: There are two different sides. One is, if you think about plumbing, the switch from copper to plastic has been going on steadily for decades now. And one of the things that comes with that is a completely different way of working.

Speaker #1: sure. I'll take both of those. on the future home standard, what we said, we'd, we'd, we did modeling, early on in this and really it hasn't changed much.

Joe Vorih: Sure. I will take both of those. On the Future Homes Standard, well, we did modeling early on in this, and really it has not changed much. If you think about a house today, they could have GBP 800 to GBP 1,200 worth of plastic plumbing. If you think about, and of course, each individual house design in the Future Homes may be a bit different and have different combination of heat pumps, underfloor heating, different ventilation solutions, filtration, wastewater heat recovery, right? So if I think about all the things that we can deliver to a house, it is still somewhere in that sort of two or three times more revenue to up to five times more revenue. The five times would be two floors of underfloor heating, mechanical ventilation heat recovery, the best filtration and heat recovery options. Of course, there is hybrids all the way in.

Speaker #1: If you think about a house today, they could have you know, 800 to 1,200 pounds worth of, plastic plumbing. If you think about, it, it of course, each individual house design in the future homes may be a bit different and have different combination of heat pumps, underfloor heating, different ventilation solutions, filtration, wastewater heat recovery, right?

Speaker #3: You know, push-fit is much faster for assembly work, and there's much more assurance of not having leaks. I think going back to soldering is something I don't think you'll see a lot of plumbers who have already made the switch, or haven't made the switch, going back to.

Speaker #3: The other thing, too, I remind people is that as much as a double-digit price increase in plumbing may be significant for us in the product line, plumbing is still, like, less than 1% of the cost of a house.

Speaker #1: So if I think about all of the things that we can deliver to a house, it's still somewhere in that sort of, two or three times more revenue to up to five times more revenue.

Speaker #3: So the overall pressure to shift is probably bigger on other issues. And I think you'll see, higher up the bill of materials, perhaps a bit more substitution pressure over time.

Joe Vorih: So the overall pressure to shift is probably bigger on other issues. I think you will see higher up the build materials, perhaps a bit more substitution pressure over time. We are not worried about that. On the drainage side, the substitution has been largely from concrete to plastic over the years. Similar situation. We think that the total installed cost of the solution is still far superior, so we are not anticipating or modeling for a reverse substitution to happen. Sure. I will go over there and then we will come back over to this side. How is that?

Joe Vorih: The overall pressure to shift is probably bigger on other issues. I think you will see higher up the build materials, perhaps a bit more substitution pressure over time. We are not worried about that. On the drainage side, the substitution has been largely from concrete to plastic over the years. Similar situation. We think that the total installed cost of the solution is still far superior, so we are not anticipating or modeling for a reverse substitution to happen. Sure. I will go over there and then we will come back over to this side. How is that?

Speaker #1: That would be the five times would be, you know, two floors of underfloor heating, mechanical ventilation heat recovery, the best, filtration and, and, heat recovery options.

Speaker #3: We're not worried about that. On the drainage side, the substitution's been largely from concrete to plastic over the years—similar, similar situation. We think that the total installed cost of the solution is still far superior.

Speaker #1: and of course, there's hybrids all the way in. In any case, it is clearly a net revenue gain for us. And we expect the penetration of these solutions to be quite high as it's pretty much consensus that everything is pretty much going to air source heat pumps.

Joe Vorih: In any case, it is clearly a net revenue gain for us, and we expect the penetration of these solutions to be quite high, as it is pretty much consensus that everything is pretty much going to air source heat pumps. That really changes the dynamic of both the heating and how you heat the house, because you need much larger emitters, more efficient systems. Actually, the impact of ventilation with heat recovery, because if you do not have heat recovery on the ventilation, you are going to be increasing the operating cost of the house over time. Some of this may take a few years to play out, but it is quite positive, and we still think that is about the right range. Okay.

Speaker #3: So we're not anticipating or modeling for a reverse substitution to happen.

Speaker #1: Sure.

Speaker #1: And that really changes the dynamic of both the heating and how you heat the house 'cause you need much larger emitters, more efficient systems.

Speaker #3: Go over there, and then we'll come back over to this side. How's that?

Speaker #2: Yeah, just Charlie Campbell at C4. A couple from me as well, please, if I can. So, first of all, just as we get very close to Future Homes, sort of finally, I suppose, I just wonder if you've got a feel now for kind of pounds per house under a house now versus pounds per house in a Future Home Standard, sort of fully compliant unit with selling everything that you could into it.

Charlie Campbell: Yeah. This is Charlie Campbell at Stifel. Couple from me as well, please, if I can. First of all, just as we get very close to Future Homes, finally, I suppose. Just wonder if you have got a feel now for kind of GBP per house under a house, for a house now, versus GBP per house in a Future Homes Standard, sort of fully compliant unit with selling everything that you could into it. Then the second question was just on getting that plastic concrete point, and just wondering if that is coming through as you expect under AMP8.

Speaker #1: And actually, the impact of ventilation, have with heat recovery 'cause if you don't have heat recovery in the ventilation, you're gonna be increasing the operating cost of house over time.

Speaker #1: Some of this may take a few years to play out, but it's quite positive and we s we still think that's about the right range.

Speaker #1: Okay? on the concrete, substitution, so when we did the Ampate modeling in particular, we assumed the traditional sort of, you know, one-third, two-thirds, you know, one-third being plastic, two-thirds being concrete, right?

Joe Vorih: On the concrete substitution, when we did the AMP8 modeling in particular, we assumed the traditional sort of one third, two thirds, one third being plastic, two thirds being concrete, right? This is very broad strokes. What we do believe, and we see some indications, that we are going to be able to apply plastic solutions in this retrofit. Retrofit is not the right term. You are essentially going into developed areas, subdivisions, areas in sometimes urban environments where you have to go in and essentially put in drainage where it was not originally anticipated. The ability to get more products in on each lorry, fewer lorries, faster time install, much easier, less heavy equipment, all of that is really significantly advantaged by using a plastic solution. We do expect that conversion actually to be better with AMP8 going forward for us. Let's see.

Speaker #3: And then the second question was just on getting that plastic concrete point, and just wondering if that's coming through as you expect under Ampate.

Speaker #1: Very I mean, this is this is very broad strokes. What we what we do believe and we see some indications that we're gonna be able to apply plastic solutions in this retrofit, you know, retrofit sort of not the right term, right?

Speaker #1: Sure, I'll take both of those. On the Future Home Standard, well, we said we'd—we did modeling early on in this, and really, it hasn't changed much.

Joe Vorih: Sure. I will take both of those. On the Future Homes Standard, what we said, we did modeling early on in this, and really it has not changed much. If you think about a house today that could have GBP 800 to GBP 1,200 worth of plastic plumbing. If you think about, and of course, each individual house design in the future homes may be a bit different, have different combination of heat pumps, underfloor heating, different ventilation solutions, filtration, wastewater heat recovery, right? So if I think about all the things that we can deliver to a house, it is still somewhere in that sort of 2 or 3 times more revenue to up to 5 times more revenue. The 5 times would be 2 floors of underfloor heating, mechanical ventilation heat recovery, the best filtration and heat recovery options. Of course, there is hybrids all the way in.

Speaker #1: If you think about a house today, that could have, you know, 800 to 1,200 pounds' worth of plastic plumbing. If you think about it, of course, each individual house design in the future homes may be a bit different and have a different combination of heat pumps, underfloor heating, different ventilation solutions, filtration, and wastewater heat recovery, right?

Speaker #1: But I mean, you're essentially going to developed areas, subdivisions, right? areas in i sometimes urban environments where you have to go in and essentially put in drainage where it wasn't originally anticipated.

Speaker #1: So the ability to get more products in on each lorry, right? Fewer lorries, faster time install, much easier, less heavy equipment, all of that is really significantly advantaged by using a plastic solution.

Speaker #1: So if I think about all of the things that we can deliver to a house, it's still somewhere in that sort of two or three times more revenue to up to five times more revenue.

Speaker #1: So we do expect that conversion actually to be better i with Ampate going forward for us. Let's see. Let's come up maybe I guess Christian and then we'll just kinda work our way back on this side maybe.

Speaker #1: That would be the five times, would be, you know, two floors of underfloor heating, mechanical ventilation heat recovery, the best filtration and heat recovery options.

Joe Vorih: Let's come up, maybe I guess Christian, and then we will just kind of work our way back on this side maybe. Okay.

Speaker #1: And of course, there are hybrids all the way in. In any case, it is clearly a net revenue gain for us, and we expect the penetration of these solutions to be quite high, as it's pretty much consensus that everything is going to air source heat pumps. That really changes the dynamic of both the heating and how you heat the house, because you need much larger emitters—more efficient systems.

Speaker #1: Okay.

Speaker #2: Thank you.

Speaker #1: Oh, okay. We'll just go there first. That's fine. We won't Christian, we'll get to you eventually. Don't worry. No, no. Priya, go ahead.

Priyal Woolf: Thank you.

Charlie Campbell: Thank you.

Joe Vorih: Oh, okay. Let's go there first. That is fine. Christian, we will get to you eventually, don't worry. No, Priyal, go ahead.

Joe Vorih: In any case, it is clearly a net revenue gain for us, and we expect the penetration of these solutions to be quite high, as it is pretty much consensus that everything is pretty much going to air source heat pumps. That really changes the dynamic of both the heating and how you heat the house, because you need much larger emitters, more efficient systems. Actually, the impact of ventilation with heat recovery. Because if you do not have heat recovery on the ventilation, you are going to be increasing the operating cost of the house over time. Some of this may take a few years to play out, but it is quite positive, and we still think that is about the right range. Okay.

Speaker #2: Okay. Cool. Thank you. It's Priya Wolf here from Jeffrey's. I've just got two questions. The first is a follow-up on the future home standards.

Priyal Woolf: Okay, cool. Thank you. It is Priyal Woolf here from Jefferies. I have just got two questions. The first is a follow-up on the Future Homes Standard. You have obviously talked about this two to three times to five times uplift. Does that kick in mainly from March 2027, or are there some particularly volume house builders who might already be building to the Future Homes Standard already? Just trying to work out the curve of that uplift that might come through. The second question is just on the GBP 4 million of cost savings that you have been talking about. Should we think about that as incremental to profit next year or potentially just offsetting weakness that you might see in the market, or more cost inflation that might come through?

Speaker #2: So you've obviously talked about this two to three times to five times. I'll uplift. Does that kick in mainly from March 2027, or are there some particularly volume house builders who might already be building to the future home standard already?

Speaker #1: And actually, the impact of ventilation—if you have it with heat recovery—because if you don't have heat recovery in the ventilation, you're going to be increasing the operating cost of the house over time.

Speaker #2: Just trying to work out the sort of curve of that uplift that might come through. And then the second question is just on the, 4 million of cost savings that you've been talking about.

Speaker #1: Some of this may take a few years to play out, but it's quite positive. And we still think that's about the right range.

Speaker #1: Okay, on the concrete substitution—so when we did the Ampate modeling in particular, we assumed the traditional sort of, you know, one-third/two-thirds; you know, one-third being plastic, two-thirds being concrete, right?

Joe Vorih: On the concrete substitution, when we did the AMP8 modeling in particular, we assumed the traditional sort of one third, two thirds, one third being plastic, two thirds being concrete, right? This is very broad strokes. What we do believe, and we see some indications that we are going to be able to apply plastic solutions in this retrofit. Retrofit is sort of not the right term, right? But you are essentially going into developed areas, subdivisions, areas in sometimes urban environments where you have to go in and essentially put in drainage where it was not originally anticipated. The ability to get more products in on each lorry, fewer lorries, faster time install, much easier, less heavy equipment, all of that is really significantly advantaged by using a plastic solution. We do expect that conversion actually to be better with AMP8 going forward for us. Let us see.

Speaker #2: Should we talk should we think about that as incremental to profit next year or potentially just offsetting weakness that you might see in the market or more cost inflation that might come through?

Speaker #1: Very I mean, this is this is very broad strokes. What we what we do believe, and we see some indications, that we're gonna be able to apply plastic solutions in this retrofit, you know, retrofit sort of not the right term, right?

Speaker #1: Of your future home standard, you'll do the cost? Yep. So on the future home standard, so, so some of the some of the large house builders have already started implementing some of these so that they make sure they're ready.

Joe Vorih: I will do the Future Homes Standard, you will do the cost?

Tim Pullen: Yeah.

Joe Vorih: Okay. On the Future Homes Standard, some of the large house builders have already started implementing some of these so that they make sure they are ready. Nobody is expecting to all of a sudden flip a switch on March of next year and go from zero to 100%, for a few reasons. First of all, from March of next year, new projects cannot be permitted unless they have all the plans in place will be Future Home compliant. Things that are already in flight will be completed as they are. A year and a half from now, you will not be able to complete anything that is not compliant. We are talking about standalone houses and picture of house building right now. There is a slight lag for high-risk buildings, about another roughly six months.

Speaker #1: Y nobody is expecting to all of a sudden flip a switch on March, March of next year and go from 0 to 100% for a few reasons, right?

Speaker #1: But I mean, you're essentially going to developed areas, subdivisions, right, areas in sometimes urban environments where you have to go in and essentially put in drainage where it wasn't originally anticipated.

Speaker #1: First of all, from March of next year, new projects can't be can't be, permitted unless they have, all the plans in place will be future home compliant.

Speaker #1: So, the ability to get more products in on each lorry—right? Fewer lorries, faster time to install, much easier, less heavy equipment—all of that is really significantly advantaged by using a plastic solution.

Joe Vorih: The ability to get more products in on each lorry, fewer lorries, faster time install, much easier, less heavy equipment, all of that is really significantly advantaged by using a plastic solution. We do expect that conversion actually to be better with AMP8 going forward for us. Let us see. Let us come up maybe, I guess, Christian, and then we will just kind of work our way back on this side, maybe. Okay.

Speaker #1: Things that are already in flight will be completed as they are. To I you know, a year and a half from now, you won't be able to complete anything that isn't compliant.

Speaker #1: We're talking about, you know, standalone houses and pitched roof house building right now. there is a there's a slight lag for high-risk buildings, right?

Speaker #1: So, we do expect that conversion actually to be better with Ampate going forward for us.

Speaker #1: About another roughly six months. But the so you can think that between now and essentially two years from now, w everything will need to be compliant that, gets a, buildings certificate.

Speaker #3: Let's see. Let's come up—maybe, I guess, Christian, and then we'll just kind of work our way back on this side, maybe. Okay. Oh, okay.

Joe Vorih: You can think that between now and essentially two years from now, everything will need to be compliant that gets a building certificate. Okay? That is sort of the phase-in period. There are two other factors. One is some builders are already building already, and we have done about 3,000 plots, either completed or are doing about 3,000 plots of underfloor heating for mid-size and large house builders already. So they are essentially ramping up ahead to debug the system. Okay? That is underfloor heating. The other thing that we will see is, there is work to do by different housing designs to see what ventilation solutions will be needed. In the beginning, we expect we will see more one floor underfloor heating. That could become two at some point in the future.

Joe Vorih: Let us come up maybe, I guess, Christian, and then we will just kind of work our way back on this side, maybe. Okay.

Speaker #3: Let's go there first. That's fine. We won't, Christian, we'll get to you eventually. Don't worry. No, no. Priya, go ahead.

Speaker #1: Okay? So that's sort of the phase in period. Now, this there's, there's two other factors. One is some builders are already building already, and we've done about 3,000 plots or are doing either completed or are doing about 3,000 plots of underfloor heating for small for, midsize and large house builders already.

Priyal Woolf: Thank you.

Joe Vorih: Well, let us go there first. That is fine. Christian, we will get to you eventually. Do not worry. Priyal, go ahead.

Speaker #4: Okay, cool. Thank you. It's Priya Wolf here from Jefferies. I've just got two questions. The first is a follow-up on the future home standards.

Priyal Woolf: Okay, cool. Thank you. It's Priyal Woolf here from Jefferies. I've just got 2 questions. The first is a follow-up on the Future Homes Standard. So you've obviously talked about this 2 to 3 times to 5 times uplift. Does that kick in mainly from March 2027, or are there some particularly volume house builders who might already be building to the Future Homes Standard already? Just trying to work out the curve of that uplift that might come through. The second question is just on the GBP 4 million of cost savings that you've been talking about. Should we think about that as incremental to profit next year, or potentially just offsetting weakness that you might see in the market, or more cost inflation that might come through?

Speaker #4: So, you've obviously talked about this two to three times, or five times. I'll pivot. Does that kick in mainly from March 2027, or are there some particular volume house builders who might already be building to the Future Home Standard already?

Speaker #1: So they're essentially ramping up ahead to debug the system. Okay? So that's underfloor heating. the other thing that we'll see is, there's work to do by different housing designs to see what ventilation solutions will be needed.

Speaker #4: Just trying to work out the sort of curve of that uplift that might come through. And then the second question is just on the £4 million of cost savings that you've been talking about.

Speaker #1: And so in the beginning, we expect we'll see more one-floor underfloor heating. That could become two. At some point in the future. And, the mix between distributed ventilation and mechanical ventilation heat recovery, we think will shift over time toward more MBHR.

Speaker #4: Should we think about that as incremental to profit next year, or potentially just offsetting weakness that you might see in the market, or more cost inflation that might come through?

Joe Vorih: The mix between distributed ventilation and mechanical ventilation and recovery, we think will shift over time toward more MVHR. It is a bit of a phase, starting small now. Will certainly pick up between March of next year and March of 2028, at which point all new houses will need to be compliant. Then the question is, how do we actually continue to improve? The point I have made many times before is it is not like one and done. This is the beginning of an innovation cycle, I believe. I think we will see quite a lot more coming out. There are other parts of the regulations, including wastewater heat recovery, that still needs to be worked out. Well, it is there. Now we have to figure out how we are going to meet it.

Speaker #1: So it is a bit of a phase starting small now. We'll certainly pick up between March of next year and March of '28, at which point all new houses will need to be compliant.

Speaker #1: I'll do the Future Home Standard. You'll do the cost?

Joe Vorih: I'll do the Future Homes Standard, you'll do the cost?

Speaker #3: Okay. So on the future home standard, so, so some of the some of the large house builders have already started implementing some of these so that they make sure they're ready.

Tim Pullen: Yep.

Joe Vorih: Okay. On the Future Homes Standard, some of the large house builders have already started implementing some of these so that they make sure they're ready. Nobody's expecting to all of a sudden flip a switch on March of next year and go from 0% to 100%, for a few reasons, right? First of all, from March of next year, new projects can't be permitted unless they have all the plans in place will be Future Home compliant. Things that are already in flight will be completed as they are. A year and a half from now, you won't be able to complete anything that isn't compliant. We're talking about standalone houses and picture of house building right now. There is a slight lag for high-risk buildings, right? About another roughly 6 months.

Speaker #1: And then the question is, you know, how do we actually continue to improve? Because the point I've made many times before is it's not like you know, one and done.

Speaker #3: Nobody is expecting to all of a sudden flip a switch in March—March of next year—and go from 0 to 100% for a few reasons, right?

Speaker #1: This is the beginning of an innovation cycle, I believe. So I think we'll see quite a lot more coming out. There are other parts of the regulations, including wastewater heat recovery, that still needs to be worked out.

Speaker #3: First of all, from March of next year, new projects can't be permitted unless they have all the plans in place and will be Future Home compliant.

Speaker #1: Well, it's there. Now we have to figure out how we're gonna meet it. And, the government did say they'll come back and take a look at part O at a future date.

Speaker #3: Things that are already in flight will be completed as they are. To you know, a year and a half from now, you won't be able to complete anything that isn't compliant.

Joe Vorih: The government did say they will come back and take a look at Part O at a future date. That is overheating. I suspect there is going to be pressure to do that sooner rather than later. I think that what we will see is this little bit of activity now, starting to ramp up over the next 24 months, and then continuing to find more ways to add value.

Speaker #1: That's overheating. I suspect they're gonna be pressured to do that sooner rather than later. So I think that what we'll see is this, you know, little bit of activity now starting to ramp up over the next, 24 months.

Speaker #3: We're talking about, you know, standalone houses and pitched-roof house building right now. There is a slight lag for high-risk buildings, right, of about another roughly six months.

Speaker #3: So you can think that between now and essentially two years from now, everything will need to be compliant that gets a building certificate.

Joe Vorih: So you can think that between now and essentially 2 years from now, everything will need to be compliant that gets a building certificate. Okay? So that's sort of the phase-in period. There's 2 other factors. One is some builders are already building already, and we've done about 3,000 plots, or are doing, either completed or are doing about 3,000 plots of underfloor heating for mid-size and large house builders already. So they're essentially ramping up ahead to debug the system. Okay? So that's underfloor heating. The other thing that we'll see is there's work to do by different housing designs to see what ventilation solutions will be needed. In the beginning, we expect we'll see more one floor underfloor heating. That could become 2 at some point in the future.

Joe Vorih: You can think that between now and essentially two years from now, everything will need to be compliant that gets a building certificate. Okay? So that's sort of the phase-in period. There's two other factors. One is some builders are already building already, and we've done about 3,000 plots, or are doing, either completed or are doing about 3,000 plots of underfloor heating for mid-size and large house builders already. So they're essentially ramping up ahead to debug the system. Okay? So that's underfloor heating. The other thing that we'll see is there's work to do by different housing designs to see what ventilation solutions will be needed. In the beginning, we expect we'll see more one floor underfloor heating. That could become two at some point in the future.

Speaker #1: And then continuing to find more ways to add value.

Speaker #3: On the 4 million yeah. I mean, today's a reiteration of the number that we obviously talked about in May with our trading update. So I think at that point, most of our analysts, many of whom are in the room today, updated next year's numbers and included that in there.

Tim Pullen: On the GBP 4 million, yeah. Today is a reiteration of the number that we obviously talked about in May with our trading update. I think at that point, most of our analysts, many of whom are in the room today, updated next year's numbers and included that in there. I am expecting GBP 4 million to be incremental to this year's result when you look on a year-on-year build, but not necessarily incremental to what is currently in consensus for next year.

Speaker #3: Okay? So that's sort of the phase-in period. Now, this there's, there's two other factors. One is some builders are already building already, and we've done about 3,000 plots, or are doing either completed or are doing, about 3,000 plots of underfloor heating for small for, midsize and large house builders already.

Speaker #3: So I am expecting 4 million to be incremental to this year's result when you look on a year-on-year build, but not necessarily incremental to what's currently in consensus for next year.

Speaker #3: So they're essentially ramping up ahead to debug the system. Okay? So that's underfloor heating. The other thing that we'll see is there's work to do by different housing designs to see what ventilation solutions will be needed.

Speaker #1: Okay. We got two here. Sure. Go ahead. You're in back. Then Christian. Yeah.

Joe Vorih: Okay. We have two here. Sure, go ahead. You are in back, and then Christian, yeah.

Speaker #4: Hey, guys. Jamie Murray from Bank of America. two questions, please. First is following the news over the weekend about Vistry, left an insurer is cutting supplier credit insurance by 70%.

Jamie Murray: Hey, guys. Jamie Murray from Bank of America. Two questions, please. First is following the news over the weekend about Vistry, that is an insurer, is cutting supplier credit insurance by 70%. Can I just ask what sort of exposure you have to Vistry and what sort of impact this might have for you, and how will you manage this development going forwards? Then the second, if you could just provide some color on the like-for-like growth of Monodraught and Davidson, please.

Speaker #3: And so, in the beginning, we expect we'll see more one-floor underfloor heating. That could become two at some point in the future. And the mix between distributed ventilation and mechanical ventilation heat recovery, we think, will shift over time toward more MVHR.

Speaker #4: Can I just ask what sort of exposure you have to Vistry and what sort of impact this might have for you, and how will you manage this development going forwards?

Joe Vorih: The mix between distributed ventilation and mechanical ventilation and recovery, we think will shift over time toward more MVHR. It is a bit of a phase starting small now. We will certainly pick up between March of next year and March of 2028, at which point all new houses will need to be compliant. Then the question is, how do we actually continue to improve? Because the point I have made many times before is it is not like one and done. This is the beginning of an innovation cycle, I believe. So I think we will see quite a lot more coming out. There are other parts of the regulations, including wastewater heat recovery, that still needs to be worked out. Well, it is there. Now we have to figure out how we are going to meet it.

Speaker #4: And then the second, if you could just provide some color on the like-for-like growth of mono draw and Davidson, please.

Speaker #3: So it is a bit of a phase, starting small now. We'll certainly pick up between March of next year and March of '28, at which point all new houses will need to be compliant.

Speaker #1: I'll take the first and then.

Tim Pullen: I will take the first, and then-

Speaker #3: Yeah. You take. Take it both if you want.

Joe Vorih: Yeah. You take them both if you want.

Speaker #1: So, yeah. I mean, we've never commented on any specific customers. But if I perhaps explain you know, the way our, our chain works, we sell our product into the merchant network, and that's for reasons of getting nationwide distribution coverage.

Tim Pullen: So, yeah, we would never comment on any specific customers, but if I perhaps explain the way our chain works. We sell our product into the merchant network, and that is for reasons of getting nationwide distribution coverage. Our end house builders, we may have an agreement with that they will be using contractors, obviously, to purchase our products from the merchant network. So we would never see that we have a direct credit exposure to any of the house builders directly. Although of course, we have an interest, as everyone does, in the overall health of the industry, overall. I am sorry, the second question was on?

Speaker #3: And then the question is, you know, how do we actually continue to improve? Because the point I’ve made many times before is, it’s not like, you know, one and done.

Speaker #3: This is the beginning of an innovation cycle, I believe. So, I think we'll see quite a lot more coming out. There are other parts of the regulations, including wastewater heat recovery, that still need to be worked out.

Speaker #1: Our end house builders, we may have an agreement with, but they will be using contractors, obviously, to purchase our products from the merchant network.

Speaker #3: Well, it's there. Now we have to figure out how we're going to meet it. And the government did say they'll come back and take a look at Part O at a future date.

Joe Vorih: Well, it is there. Now we have to figure out how we are going to meet it. The government did say they will come back and take a look at Part O at a future date. That is overheating. I suspect there is going to be pressure to do that sooner rather than later. So I think what we will see is this little bit of activity now starting to ramp up over the next 24 months, and then continuing to find more ways to add value.

Speaker #1: So we would never see that we have a direct credit exposure to, you know, any of the any of the house builders directly. although, of course, we have an interest as everyone does in the overall health of the industry, overall.

Joe Vorih: The government did say they will come back and take a look at Part O at a future date. That is overheating. I suspect there is going to be pressure to do that sooner rather than later. So I think what we will see is this little bit of activity now starting to ramp up over the next 24 months, and then continuing to find more ways to add value.

Speaker #3: That's overheating. I suspect they're going to be pressured to do that sooner rather than later. So I think what we'll see is this little bit of activity now, starting to ramp up over the next 24 months.

Speaker #1: sorry, the second question was on.

Speaker #4: The acquisitions, mono draw and Davidson, the like-for-like growth, please.

Jamie Murray: The acquisitions, Monodraught and Davidson, the like-for-like growth.

Speaker #3: And then continuing to find more ways to add value.

Speaker #1: Yeah. So I think, you know, the we, we won't go down to the full detail of the segmentation of those, but mono draft is growing well.

Tim Pullen: Well, I think we won't go down to the full detail of the segmentation of those, but Monodraught is growing well. Actually, order growth is even higher than the revenue intake. We think that is to do with the dynamics of how the school's funding flows. At some point, that will start to unwind. We see good revenue growth, but also getting stronger off the back of that order intake. Davidson is down slightly in line with the rest of the market, to be honest, which you would expect from that product set. No weaker than anything else, but performing in line with expectations.

Speaker #1: On the £4 million, yeah. I mean, today is a reiteration of the number that we obviously talked about in May with our trading update.

Tim Pullen: On the GBP 4 million, yeah, today is a reiteration of the number that we obviously talked about in May with our trading update. So I think at that point, most of our analysts, many of whom are in the room today, updated next year's numbers and included that in there. So I am expecting GBP 4 million to be incremental to this year's result when you look on a year-on-year build, but not necessarily incremental to what is currently in consensus for next year.

Speaker #1: Actually, order growth is even higher than, the, the revenue intake. and we think that that's to do with the dynamics of how the school's funding flows.

Speaker #1: So, I think at that point most of our analysts, many of whom are in the room today, updated next year's numbers and included that in there.

Speaker #1: So I am expecting £4 million to be incremental to this year's result when you look at a year-on-year build, but not necessarily incremental to what's currently in consensus for next year.

Speaker #1: So at some point, that will start to unwind. So we see good revenue growth, but also getting stronger off the back of that, that order intake.

Speaker #1: Davidson is, is down slightly in line with the rest of the market, to be honest, which you'd expect from, from that product set. So, no weaker than anything else, but performing in line with expectations.

Speaker #3: Okay, we got two here. Sure, go ahead. You're back, then Christian. Yeah.

Joe Vorih: Okay. We have two here. Sure, go ahead. You are in back, then Christian Yorck. Yeah.

Speaker #5: Hey guys, Jamie Murray from Bank of America. Two questions, please. First is, following the news over the weekend about Vistry—lesson insurers cutting supplier credit insurance by 70%—can I just ask what sort of exposure you have to Vistry, and what sort of impact this might have for you? And how will you manage this development going forwards?

Jamie Murray: Hey, guys. Jamie Murray from Bank of America. Two questions, please. First is following the news over the weekend about Vistry Group, that is an insurer, is cutting supplier credit insurance by 70%. Can I just ask what sort of exposure you have to Vistry Group, and what sort of impact this might have for you, and how will you manage this development going forwards? Then the second, if you could just provide some color on the like-for-like growth of Monodraught and Davidson, please.

Jamie Murray: Guys. Jamie Murray from Bank of America. Two questions, please. First is following the news over the weekend about Vistry Group, that is an insurer, is cutting supplier credit insurance by 70%. Can I just ask what sort of exposure you have to Vistry Group, and what sort of impact this might have for you, and how will you manage this development going forwards? Then the second, if you could just provide some color on the like-for-like growth of Monodraught and Davidson, please.

Speaker #4: Cool. Thank you.

Toby Thorrington: Cool. Thank you.

Jamie Murray: Cool. Thank you.

Speaker #1: Thanks, Timothy. Definitely. Thanks for being patient.

Tim Pullen: Thanks, Jamie. Christian. Definitely. Thanks for being patient.

Joe Vorih: Thanks, Jamie. Christian. Definitely. Thanks for being patient.

Speaker #4: No problem. Christian, you're up from Deutsche Bank. Two questions. the first one, you know, obviously, with all the heating, I can imagine air conditioning is becoming more prevalent, particularly probably in the RMI market.

Christian Yorck: Not at all. Christian Yorck from Deutsche Bank. Two questions. The first one, obviously with all the heating, I can imagine air conditioning is becoming more prevalent, particularly probably in the RMI market. How does air con and ventilation work? Are they sort of substitutes? Do they work together? Just sort of how we understand how that fits. The second one, just to touch on the AMP8 win rate to date. I understand you are sort of one of three key competitors in that area, and just how we should think about success in terms of AMP8 as well.

Christen Hjorth: Not at all. Christen Hjorth from Deutsche Bank. Two questions. The first one, obviously with all the heating, I can imagine air conditioning is becoming more prevalent, particularly probably in the RMI market. How does air con and ventilation work? Are they sort of substitutes? Do they work together? Just sort of how we understand how that fits. The second one, just to touch on the AMP8 win rate to date. I understand you are sort of one of three key competitors in that area, and just how we should think about success in terms of AMP8 as well.

Speaker #5: And then the second—if you could just provide some color on the like-for-like growth of Manthorpe and Davison, please.

Speaker #4: H-how does aircon and ventilation work? Are they sort of substitutes? Do they work together? Just sort of how we understand how that fits. And the second one, just to touch on the Ampaces win rate to date, I understand you sort of one of three key competitors in, in that area.

Speaker #3: I'll take the first one, and then—

Speaker #1: Yeah. You take—take it, both if you want.

Tim Pullen: I will take the first, and then-

Joe Vorih: Yeah, you take it. You can take them both if you want.

Speaker #3: So, yeah, I mean, we've never commented on any specific customers. But if I perhaps explain, you know, the way our chain works: we sell our product into the merchant network, and that's for reasons of getting nationwide distribution coverage.

Tim Pullen: Well, yeah, we would never comment on any specific customers, but if I perhaps explain the way our chain works. We sell our product into the merchant network, and that is for reasons of getting nationwide distribution coverage. Our end house builders, we may have an agreement with that they will be using contractors, obviously, to purchase our products from the merchant network. So we would never see that we have a direct credit exposure to any of the house builders directly. Although, of course, we have an interest, as everyone does, in the overall health of the industry overall. I am sorry, the second question was on?

Speaker #4: And, and just how we should think about success in terms of Ampaces as well.

Speaker #3: Our end house builders—we may have an agreement with them, but they will be using contractors, obviously, to purchase our products from the merchant network.

Speaker #1: Sure. I, I could take both of those. So in terms of I, I think really the core is around air conditioning and ventilation, right, o-on your first question.

Joe Vorih: Sure. I can take both of those. So in terms of, I think really the core is around air conditioning and ventilation, right, on your first question. It is an interesting one, and I think we have got to look at that because the demand for cooling of some kind is increasing in the UK and a lot of places, right? However, I think everybody realizes that actually, the number of days we actually need cooling, it is not that many here because it cools down at night quite a few times. Really, there are few times where you do not get that cooling effect in the evenings. So the problem with retrofitting just sort of RMI air conditioning is it is highly energy efficient, and it tends to essentially overcommit to a carbon footprint that. Well, and just a cost in your electric bills that most people do not want.

Speaker #1: It's an interesting one, and I think we've, we've gotta look at that because you know, the demand for cooling of some kind is increasing in the UK.

Speaker #3: So we would never see that we have a direct credit exposure to, you know, any of the house builders directly. Although, of course, we have an interest, as everyone does, in the overall health of the industry overall.

Speaker #1: And a lot of places, right? However, I think everybody realizes that actually, the number of days we actually need cooling, it's not that many here because it cools down at night quite a few times.

Speaker #3: Sorry, the second question was on...

Speaker #5: The acquisitions, Monotrot and Davidson—the like-for-like growth, please.

Speaker #1: Really, there's, there's few times where you don't get that cooling effect in the evenings. So the problem with retrofitting, just, you know, sort of RMI air conditioning is it's highly energy efficient.

Jamie Murray: The acquisitions Monodraught and Davidson, the like-for-like growth, please.

Speaker #3: Yeah, so I think, you know, we won't go down to the full detail of the segmentation of those, but Monotrot is growing well.

Tim Pullen: Well, I think we won't go down to the full detail of the segmentation of those, but Monodraught is growing well. Actually, order growth is even higher than the revenue intake. We think that's to do with the dynamics of how the school's funding flows. So at some point that will start to unwind. So we see good revenue growth, but also getting stronger off the back of that order intake. Davidson is down slightly in line with the rest of the market, to be honest, which you'd expect from that product set. So, no weaker than anything else, but performing in line with their expectations.

Speaker #1: And it tends to essentially, you know, overcommit to a, a carbon footprint that well, and, and just a cost in your electric bills that most people don't want.

Speaker #3: Actually, order growth is even higher than the revenue intake, and we think that's to do with the dynamics of how the schools' funding flows.

Speaker #1: So what we do think is gonna be a real opportunity is use incremental cooling solutions much like we released with the MBHR with cooling.

Joe Vorih: What we do think is going to be a real opportunity is use incremental cooling solutions, much like we released with the MVHR with cooling. Some of you saw that when we released it about three years ago. That has been a fantastic solution for apartments. It is essentially mild cooling. It lowers the temperature on the hottest days to make it much more comfortable and livable, but actually also brings the benefits of heat recovery. So a much better solution than augmenting air conditioning. Certainly for anybody who is operating buildings with somebody else as a tenant, they are going to be mindful of the fact that they do not want to pay for the bills for somebody setting it to 18 and leaving it, right? So I think it will be really interesting to see. And in other markets, we have seen some solutions that I think will continue to play.

Speaker #3: So, at some point, that will start to unwind. So, we see good revenue growth, but also getting stronger off the back of that order intake.

Speaker #1: Some of you saw that, when we released it about three years ago. That has been a fantastic solution for apartments. It's essentially mild cooling.

Speaker #3: Davidson is down slightly, in line with the rest of the market, to be honest, which you'd expect from that product set. So, no weaker than anything else, but performing in line with expectations.

Speaker #1: It lowers the temperature on the hottest days to make it much more comfortable and livable. But actually, also brings the benefits of heat recovery.

Speaker #3: Thanks, Jamie.

Speaker #1: Christian, definitely. Thanks for being patient.

Speaker #1: So a much better solution than augmenting air conditioning certainly for anybody who's operating buildings with somebody else as a tenant. They're gonna be mindful of the fact that, you know, they don't wanna pay for the bills for somebody setting it to 18 and leaving it, right?

Jamie Murray: Cool. Thank you.

Joe Vorih: Thanks, Jamie. Christian. Definitely. Thanks for being patient.

Speaker #5: No problem. Christian, you're up from Deutsche Bank. Two questions. The first one: you know, obviously, with all the heating, I can imagine air conditioning is becoming more prevalent, particularly probably in the RMI market.

Christian Yorck: Not at all. Christian Yorck from Deutsche Bank. Two questions. The first one, obviously with all the heating, I can imagine air conditioning is becoming more prevalent, particularly probably in the RMI market. How does air con and ventilation work? Are they substitutes? Do they work together? Just how we understand how that fits. The second one, just to touch on the AMP8 win rate to date. I understand you are one of three key competitors in that area, and just how we should think about success in terms of AMP8 as well.

Christian Hjorth: Not at all. Christian Yorck from Deutsche Bank. Two questions. The first one, obviously with all the heating, I can imagine air conditioning is becoming more prevalent, particularly probably in the RMI market. How does air con and ventilation work? Are they substitutes? Do they work together? Just how we understand how that fits. The second one, just to touch on the AMP8 win rate to date. I understand you are one of three key competitors in that area, and just how we should think about success in terms of AMP8 as well.

Speaker #1: So I think it'll be really interesting to see. And there in other markets, we've seen some solutions that I think will continue to play.

Speaker #5: How does air con and ventilation work? Are they sort of substitutes? Do they work together? Just so we understand how that fits. And the second one, just to touch on the Ampace's win rate to date. I understand you're sort of one of three key competitors in that area.

Speaker #1: So my view, it's too early to tell. It's gonna play out, but it is clearly an opportunity for us because we do ventilation. And we have cooling capability in, both mono draft and newer already.

Joe Vorih: My view, it is too early to tell it is going to play out, but it is clearly an opportunity for us because we do ventilation and we have cooling capability in both Monodraught and Nuaire already. So, stay tuned. We will watch that space. Let us see. Second question again was?

Speaker #1: So stay tuned. You know, I mean, we'll watch that space. let's see. Second question again was.

Speaker #5: And just how we should think about success in terms of Ampace as well.

Speaker #4: Just on the Ampaces win rates and. And how we should judge success.

Christian Yorck: Just on the AMP8 win rates.

Christen Hjorth: Just on the AMP8 win rates.

Speaker #1: Sure.

Speaker #1: Right. I'm not gonna give you a specific win rate. For two reasons. One is it is relatively early. But yes, we're one of three people who can provide the full plastic solutions here.

Joe Vorih: Right

Speaker #3: I could take both of those. So, in terms of—I think really the core is around air conditioning and ventilation, right, on your first question.

Christian Yorck: how we should judge success.

Christen Hjorth: how we should judge success.

Joe Vorih: I am not going to give a specific win rate for two reasons. One is it is relatively early. We are one of three people who can provide the full plastic solutions here. All I will say is we are definitely winning much. Our win rate so far is definitely more than a third of the projects out there. So we are really pleased with the initial performance, and we think it shows the overall engineering capability of our business, which we actually believe is the best in the market.

Joe Vorih: I can take both of those. I think really the core is around air conditioning and ventilation, right, on your first question. It is an interesting one, and I think we have got to look at that because the demand for cooling of some kind is increasing in the UK and a lot of places, right. However, I think everybody realizes that actually, the number of days we actually need cooling, it is not that many here because it cools down at night quite a few times. Really, there are few times where you do not get that cooling effect in the evenings. So the problem with retrofitting just RMI air conditioning is it is highly energy inefficient, and it tends to essentially over-commit to a carbon footprint that, well, and just a cost in your electric bills that most people do not want.

Speaker #3: It's an interesting one, and I think we've got to look at that because, you know, the demand for cooling of some kind is increasing in the UK.

Speaker #1: And all I will say is we are definitely winning much we our win rate so far is definitely more than a third of the projects out there.

Speaker #3: And a lot of places, right? However, I think everybody realizes that actually, the number of days we actually need cooling, it's not that many here, because it cools down at night quite a few times.

Speaker #1: So we're, we're really pleased with, the initial performance. And we think it shows the overall engineering capability of our business, which we actually believe is the best in the market.

Speaker #3: Really, there are few times where you don't get that cooling effect in the evenings. So, the problem with retrofitting just, you know, sort of RMI air conditioning is it's highly energy efficient.

Christian Yorck: Great. Thank you.

Christen Hjorth: Great. Thank you.

Speaker #1: Thank you. Toby, back to you.

Joe Vorih: Thank you. Toby, back to you.

Speaker #3: Thanks.

Speaker #3: And it tends to essentially, you know, overcommit to a carbon footprint that, well, and just a cost in your electric bills that most people don't want.

Speaker #2: thank you. I just have two as well, both for Tim. I think, good gross margin performance, in the half, just unpick for us the, the impacts of the acquisitions from the back end of last year.

Toby Thorrington: Thank you. I just have two as well, both for Tim Pullen. I think good gross margin performance in the H1. Could you just unpick for us the impacts of the acquisitions from the back end of last year within that, whether accretive or otherwise? And also, I am assuming there was some impact of higher input costs negative in the H1. Perhaps you should quantify that if you could as well, please. That is the first question.

[Analyst]: Thank you. I just have two as well, both for Tim Pullen. I think good gross margin performance in the H1. Could you just unpick for us the impacts of the acquisitions from the back end of last year within that, whether accretive or otherwise? And also, I am assuming there was some impact of higher input costs negative in the H1. Perhaps you should quantify that if you could as well, please. That is the first question.

Speaker #3: So, what we do think is going to be a real opportunity is to use incremental cooling solutions, much like we released with the MVHR with cooling.

Joe Vorih: What we do think is going to be a real opportunity is use incremental cooling solutions, much like we released with the MVHR with cooling. Some of you saw that when we released it about 3 years ago. That has been a fantastic solution for apartments. It is essentially mild cooling. It lowers the temperature on the hottest days to make it much more comfortable and livable, but actually also brings the benefits of heat recovery. So a much better solution than augmenting air conditioning. Certainly for anybody who is operating buildings with somebody else as a tenant, they are going to be mindful of the fact that they do not want to pay for the bills for somebody setting it to 18 and leaving it, right. So I think it will be really interesting to see. In other markets, we have seen some solutions that I think will continue to play.

Speaker #2: Within that, where there are accretive or, or otherwise, and also, I'm assuming there was some impacts of higher, input costs, negative, in the first half.

Speaker #3: Some of you saw that when we released it about three years ago. That has been a fantastic solution for apartments. It's essentially mild cooling.

Speaker #3: It lowers the temperature on the hottest days to make it much more comfortable and livable, but actually, it also brings the benefits of heat recovery.

Speaker #2: perhaps you could quantify that if you could as well, please. That's the first question.

Speaker #1: Yeah. So the, the acquisitions, are both accretive. as we've said today, the Davidson acquisitions are over 20% EBIT in the first half, so in line with our, medium-term targets.

Speaker #3: So a much better solution than augmenting air conditioning, certainly for anybody who's operating buildings with somebody else as a tenant—they're going to be mindful of the fact that, you know, they don't want to pay the bills for somebody setting it to 18 and leaving it, right?

Tim Pullen: Yeah. So the acquisitions are both accretive. As we have said today, the Davidson acquisitions are over 20% EBIT in the H1, so in line with our medium-term targets.

Joe Vorih: Certainly for anybody who is operating buildings with somebody else as a tenant, they are going to be mindful of the fact that they do not want to pay for the bills for somebody setting it to 18 and leaving it, right. So I think it will be really interesting to see. In other markets, we have seen some solutions that I think will continue to play.

Toby Thorrington: At the gross level?

[Analyst]: At the gross level?

Speaker #2: at the gross level?

Speaker #1: And at the gross level as well, yeah. So we won't we won't disclose specific figures, but. Yeah, strong gross margins. and mono draft, as I said, is on, on track.

Speaker #3: So I think it will be really interesting to see. And in other markets, we've seen some solutions that I think will continue to play.

Tim Pullen: At the gross level as well. We will not disclose specific figures, but strong gross margins. Monodraught, as I said, is on track. Again, very strong at the gross margin level, and accretive at the EBIT level as well. You can consider that high teens in terms of performance.

Speaker #3: So my view is it's too early to tell how it's going to play out, but it is clearly an opportunity for us because we do ventilation, and we have cooling capability in both Monotrot and Neur already.

Speaker #1: So again, very strong at the gross margin level, and accretive at the EBIT level as well. You can consider that high teens in terms of, in terms of performance.

Joe Vorih: My view, it is too early to tell it is going to play out, but it is clearly an opportunity for us because we do ventilation, and we have cooling capability in both Monodraught and Nuaire already. So stay tuned. We will watch that space. Let us see, the second question again was?

Speaker #3: So, stay tuned. You know, I mean, we'll watch that space. Let's see. The second question again was...

Speaker #2: Okay. thank you. And polymer costs in the first half?

Toby Thorrington: Okay. Thank you. Polymer costs in the H1?

[Analyst]: Okay. Thank you. Polymer costs in the H1?

Speaker #1: Yeah. So it really does vary quite widely by polymer grade. So you can see some quite substantial increases in, in cost there. as we've said previously, we've got about last year, we spent about 80 million on polymers, about 50 million of that on virgin polymer, 30 million on recycled.

Tim Pullen: Well, it really does vary quite widely by polymer grade. You can see some quite substantial increases in cost there. As we have said previously, we have got about, last year, we spent about GBP 80 million on polymers, about GBP 50 million of that on virgin polymer, GBP 30 million on recyclate. Recyclate cost increases have been much lower than virgin. Actually, that high use of recyclate that we have does give us a natural hedge, which is important in keeping overall cost down. Across the virgin polymers, we have seen grades at 10%, 20%, 30% plus inflation, across the board. Hence why we have done a double-digit price increase to make that sustainable.

Speaker #5: Just on the Ampace's win rates and how we should judge success.

Christian Yorck: Just on the AMP8 win rates and how we should judge success.

Christian Hjorth: Just on the AMP8 win rates and how we should judge success.

Speaker #3: I'm not going to give you a specific win rate for two reasons. One is, it is relatively early. But yes, we're one of three people who can provide the full plastic solutions here.

Joe Vorih: I am not going to give a specific win rate for two reasons. One is it is relatively early. Yes, we are one of three people who can provide the full plastic solutions here, and all I will say is we are definitely winning much. Our win rate so far is definitely more than a third of the projects out there. So we are really pleased with the initial performance, and we think it shows the overall engineering capability of our business, which we actually believe is the best in the market.

Speaker #3: And all I will say is we are definitely winning much; our win rate so far is definitely more than a third of the projects out there.

Speaker #1: Recycled, cost increases have been much lower than virgin. So actually, that, that high use of recycled that we have does give us a natural hedge, which is important in keeping overall costs down.

Speaker #3: So, we're really pleased with the initial performance, and we think it shows the overall engineering capability of our business, which we actually believe is the best in the market.

Speaker #1: but across the virgin polymers, we've seen you know, grades at 10, 20, 30 percent plus inflation, you know, across the board. and hence why we've done a double-digit price increase to, you know, to, to make that sustainable.

Speaker #3: Thank you. Toby, back to you.

Christian Yorck: Great. Thank you.

Christian Hjorth: Great. Thank you.

Joe Vorih: Thank you. Toby, back to you.

Speaker #2: Thank you. I just have two as well, both for Tim. I think, good gross margin performance in the half—just unpick for us the impacts of the acquisitions from the back end of last year within that, whether accretive or otherwise.

Toby Thorrington: Thank you. I just have two as well, both for Tim. I think good gross margin performance in the H1. Can you just unpick for us the impacts of the acquisitions from the back end of last year within that, whether accretive or otherwise? Also, I am assuming some impact of higher input costs, negative in the H1. Perhaps you should quantify that if you could as well, please. That was the first question.

[Analyst]: Thank you. I just have two as well, both for Tim. I think good gross margin performance in the H1. Can you just unpick for us the impacts of the acquisitions from the back end of last year within that, whether accretive or otherwise? Also, I am assuming some impact of higher input costs, negative in the H1. Perhaps you should quantify that if you could as well, please. That was the first question.

Speaker #2: Okay. Thank you. and secondly, on cash flow, could you quantify what you think the non-underlying cash outflows will be second half and perhaps in FY 27 as well, based on the consolidation of the two acquisition sites?

Toby Thorrington: Okay. Thank you. Secondly, on cash flow. Could you quantify what you think the non-underlying cash outflows will be H2 and perhaps in FY27 as well based on the consolidation of the two acquisition sites?

[Analyst]: Okay. Thank you. Secondly, on cash flow. Could you quantify what you think the non-underlying cash outflows will be H2 and perhaps in FY27 as well based on the consolidation of the two acquisition sites?

Speaker #2: And also, let me see—some impact of higher input costs, negative in the first half. Perhaps you could quantify that, if you could, please. That was the first question.

Speaker #1: Well, not giving specific guidance on that, but you can always assume that we'll have a 90% plus cash conversion. So if you if you model our profit and, and apply that cash conversion, you'll get pretty close.

Tim Pullen: We are not giving specific guidance on that, but you can always assume that we will have a 90% plus cash conversion. So if you model our profit and apply that cash conversion, you will get pretty close.

Speaker #2: thank you.

Toby Thorrington: Thank you.

[Analyst]: Thank you.

Speaker #3: The acquisitions are both accretive. As we've said today, the Davidson acquisitions are over 20% EBIT in the first half, so in line with our medium-term targets.

Speaker #1: Any other questions? No?

Joe Vorih: Any other questions? No?

Tim Pullen: The acquisitions are both accretive. As we have said today, the Davidson acquisitions are over 20% EBIT in the H1. So in line with our medium-term targets.

Speaker #3: we've then just got a couple of questions from the webcast. There's no more in the room. so firstly, was, can you quantify the annual cost of the surplus capacity you're carrying and, would anything cause you to trim these overheads?

Toby Thorrington: We have then just got a couple of questions from the webcast.

[Company Representative] (Genuit Group): We have then just got a couple of questions from the webcast.

Joe Vorih: Okay, great.

Toby Thorrington: There is no more in the room.

[Company Representative] (Genuit Group): There is no more in the room.

Joe Vorih: Okay.

Speaker #2: At the gross level?

Toby Thorrington: Firstly, can you quantify the annual cost of the surplus capacity you are carrying, and would anything cause you to trim these overheads?

[Company Representative] (Genuit Group): Firstly, can you quantify the annual cost of the surplus capacity you are carrying, and would anything cause you to trim these overheads?

Speaker #3: And at the gross level as well, yes. So we won't—we won't disclose specific figures, but, yeah, strong gross margins. And Monotrot, as I said, is on track.

Toby Thorrington: At the gross level?

[Analyst]: At the gross level?

Tim Pullen: At the gross level as well, yeah. We will not disclose specific figures. But yeah, strong gross margins. Monodraught, as I said, is on track. So again, very strong at the gross margin level, and accretive at the EBIT level as well. You can continue to type themes in terms of performance.

Speaker #3: So again, very strong at a gross margin level, and accretive at the EBIT level as well. You can. Hygiene in terms of performance.

Speaker #1: well, sure. I could I could take a stab at that. But I think the is essentially in optimized plants. And the equipment that can be run more.

Joe Vorih: Well, sure. I could take a stab at that. I think the important piece is actually most of it is essentially in optimized plants and equipment that can be run more. There really is not an impactful carrying cost per se. We are able to flex the workforce accordingly, and we have been quite clear that being able to run more shifts or essentially change tools out on machines, think about extrusion and molding machines, I do not really think that there is an important carrying cost of that extra capacity right now. More importantly, as you see us investing in the revenue and the growth stories here, it is really important to have that ready. What we will need to do is obviously add some people where we have been able to hire people and add people, so we do not see that as a constraint.

Speaker #2: Okay. Thank you. Polymer costs in the first half?

Speaker #1: So there really isn't an impactful carrying cost per se. And we're able to flex the workforce accordingly. And so we've been quite clear that, you know, being able to run more shifts or essentially change tools out on machines, think about extrusion, and molding machines, I don't really think that there's a, there's an important carrying cost of that extra capacity right now.

Toby Thorrington: Okay. Thanks. Polymer costs in the H1?

[Analyst]: Okay. Thanks. Polymer costs in the H1?

Speaker #3: No.

Speaker #2: Yeah.

Speaker #3: Just very quite widely by polymer grade. So you can see some quite substantial increases in, in costs there. as we've said previously, we've got about last year, we spent about on polymers, about 50 million of that on virgin.

Tim Pullen: Yeah. It does vary quite widely by polymer grade. You can see some quite substantial increases in costs there. As we have said previously, last year we spent about on polymers, about GBP 50 million of that on virgin. We have strong market

Speaker #1: And more importantly, as you see us investing in, the revenue and the growth stories here, it's really important to have that ready. Well, we'll need to do is, obviously, add some people where we, you know, been able to hire people and add people so we don't see that as a constraint.

Speaker #1: And importantly, with the productivity focus and GBS, we keep improving, and essentially lowering the cost of doing business by improving productivity and, better utilizing our overhead.

Joe Vorih: And importantly, with the productivity focus in Genuit Business System, we keep improving and essentially lowering the cost of doing business by improving productivity and better utilizing our overhead. That is a continual journey, and I think that is really the right approach.

Speaker #1: So, that's a continual journey. And I think that's really the right approach.

Speaker #3: Thank you. And then the second one was, given the length of subdued market, do you see leverage becoming an issue for, participants in the sector?

Toby Thorrington: Thank you. The second one was, given the length of subdued market, do you see leverage becoming an issue for participants in the sector? Is this likely to lead to more consolidation or capacity exit, in your view?

[Company Representative] (Genuit Group): Thank you. The second one was, given the length of subdued market, do you see leverage becoming an issue for participants in the sector? Is this likely to lead to more consolidation or capacity exit, in your view?

Speaker #3: And is this likely to lead to more consolidation or capacity exits in your view?

Speaker #1: So, yeah, I mean, we, we don't necessarily see ourselves as similar to many in the sector because of firstly, the breadth of what we do across things as diverse as, you know, ventilation as well as piping markets, for example.

Tim Pullen: Well, we do not necessarily see ourselves as similar to many in the sector because of, firstly, the breadth of what we do across things as diverse as ventilation as well as piping markets, for example. Ours is a very cash-generative business. So we tend to play at the higher quality end. We have strong brands, strong, sticky customer relationships, and because of that, we have strong, profitable businesses with healthy cash flow. So we delever quite quickly. We have obviously gone up to 1.6 times leverage in this half, but that is because of the two acquisitions that we did last year, not really because of weak trading conditions. So as we continue along the trough in the market, actually, we are still a very profitable and cash-generative business, which is probably going to contrast with some of the pure cyclical players that are out there.

Speaker #1: ours is a very cash-generative business. So we tend to play at the higher quality end. We have strong brands, strong sticky customer relationships, and because of that, we have strong profitable businesses with, with healthy cash flow.

Speaker #1: So we delever quite quickly. we've obviously gone up to 1.6 times leverage, in this half, but that's because of the two acquisitions that we did last year, not really because of, of weak trading conditions.

Speaker #1: So, as we continue along the kind of trough in the market, actually, we're still a very profitable and cash-generative business, which is probably gonna contrast with some of the pure cyclical, players that are out there.

Speaker #1: and with, you know, the, the leverage that Joe describes when we think about that capacity and how we can come outside the other sides, then, you know, there's even more potential in the business.

Tim Pullen: And with the leverage that Joe describes, when we think about that capacity and how we can come outside the other side, then there is even more potential in the business. So we obviously monitor this very carefully, but we do have still optionality on our balance sheet for further acquisitions when we think about that dynamic.

Speaker #1: So, we, we obviously monitor this very carefully, but, you know, we do have still optionality on our on our balance sheet for further acquisitions.

Speaker #1: When we when we think about that dynamic.

Speaker #4: It's the only thing I would add is, if you think about the last time we had a significant competitor open the ex-exit the market with Aliaxis, that was actually more of a kind of a strategic, you know, decision.

Joe Vorih: I guess the only thing I would add is if you think about the last time we had a significant competitor open the exit to market with Aliaxis, that was actually more of a strategic decision as we understand, but we responded by commercially taking share. I think that's probably the best way to think about this. You never know. Something else could come up, but it's nice to be in a good position and a relative strength. Anything else on the webcast?

Speaker #4: As we understand what we responded by commercially taking share. And I think that's that's probably the best way to think about this. You never know.

Speaker #4: I mean, something else could come up, but, it's, it's nice to be in a good position and a relative, strength. Anything else on the webcast?

Speaker #3: That's everything from the webcast.

Tim Pullen: That's everything from the webcast.

[Company Representative] (Genuit Group): That's everything from the webcast.

Speaker #4: Great. Anything else in the room?

Joe Vorih: Great. Anything else in the room? Thank you all for coming. We really appreciate the time and effort. It's good to see a lot of people here, probably the best-attended half-year results we've had yet. I know it's getting a bit warm in here, so we can investigate more cooling solutions. There's breakfast upstairs if you haven't had anything. We'll be around. Extended team is here. We've got chairman, some of the member of our executive team, so feel free to ask us more. Thank you very much, and we'll see you back for the full year results. All right. Thank you.

Speaker #1: Okay. Thank you all for coming. We really appreciate the time and effort. It's, good to see a lot of people here, probably the best attended half-year results we've had yet.

Speaker #1: I know it's getting a bit warm in here, so we can investigate more cooling solutions. but, there's breakfast upstairs. If you haven't had anything, we'll be around, extended team is here.

Speaker #1: we've got chairman, some of the member of our executive team. So, feel free to, ask us more. Thank you very much. And, we'll see you back for the full-year results.