Q2 2026 Stelrad Group PLC Earnings Call
Speaker #1: The agenda is as shown on the slide. After a brief overview of our results, we'll have a detailed review of STELRAD's financial performance from May, followed by a business review where I'll go into more detail about our progress, priorities, and positioning in the current market environment.
Speaker #1: Following the summary and outlook, I'll then move on to a Q&A section. Next slide. I'd like to begin with a brief overview of STELRAD and our performance in the first half.
Speaker #1: Slide 4. For those who— for those of you who are new to STELRAD, and those of you who need reminding, we are Europe's leading rate and manufacturer operating through our market-leading brands of STELRAD, HENRAD, HUDAVAD, TERMOTECHNIK, and DL Raiders.
Speaker #1: These brands are all united by our highly agile operating platform, which facilitates cost leadership. Our industry-leading customer service underpins our market leadership, with a 24% market share of steel panel raiders across the territories we operate in.
Speaker #1: As you'll see, the majority of our revenues are derived from the UK and Ireland, along with mainland Europe and a smaller segment in Turkey.
Speaker #1: We have now been listed for 5 years, and sit in the climate-controlled subsector of the FTSE All Share Index. Our listing aligns with the long-term thinking and strategic positioning of STELRAD to our shareholders' interests, positioning us to build sustainable value throughout market cycles.
Speaker #1: It has obviously been a challenging period in our end markets, however I remain immensely proud of the work of the team has done and continues to do in continuously improving STELRAD.
Speaker #1: As its presentation will show you, we are more competitive, more efficient, and more agile than ever. Now, turn to the matter at hand. I'll quickly run through the overview of the half-year.
Speaker #1: Next slide. As I said, despite challenging market conditions, we've delivered further progress in the half. At our full-year results, I outlined a number of actions that we had taken to further optimize our cost base and embed commercial excellence throughout our business.
Speaker #1: Namely, the exit of a loss-making contract with a European customer. These actions are beginning to bear fruit. Driving an adjusted operating profit growth of 4.9% and a 1.8% points increase in our operating profit margin to 13.5%.
Speaker #1: And taking off KPI of contribution per raider to over 24 pounds. I think it is important to emphasize from the start that this is not a sustainable level of contribution per raider, and primarily reflects the reduced volumes in lower-margin territories and sectors in the period.
Speaker #1: We need to carefully balance product-mix at STELRAD, these lower-margin areas of our business drive throughput and the operational leverage at our sites, facilitating our cost leadership, therefore we expect this to begin to move towards our sustainable medium-term target of over 21 pounds as we drive further volume growth through our sites.
Speaker #1: Our cost leadership, hand in hand with our leading customer service and product availability, underpins and drives our market leadership. Which we reinforced further in the period.
Speaker #1: With the latest PRG data published in May for 2025 showing that we continue to be either the market leader or one of the top 3 in the majority of our top 10 territories.
Speaker #1: Next slide. Financial review. And with that, I'd now like to hand you over to Lee for a more detailed review of the group's financial performance.
Speaker #2: Thanks, Trevor. Good morning, all. And now we'll move through the group's financial performance for the period. We start with the financial review with our highlights page, with the headline message being that we continue to demonstrate strong margin management and balance sheet control.
Speaker #2: We covered the specific detail of the various measures later in the presentation, but we can see from the colors displayed on this slide that we have made good progress despite an ongoing subdued market backdrop.
Speaker #2: We now look through some of the group-level KPIs before moving later on to segmental-level performance. Revenue is reduced by 9.1%, or 12.5 million year-on-year.
Speaker #2: Revenue has been impacted by a continued reduction in market demand during the period, but it has also reduced due to commercial initiatives. Namely, the exit from a loss-making contract at the end of 2025, and the decision to reduce the lower-margin sales in Turkey.
Speaker #2: The combined impact of the commercial initiatives accounts for circa 9 million of revenue drop, but these have had a beneficial impact on profitability and margins.
Speaker #2: Overall, sales volumes were down by 14.6% in the period. Group revenues have, however, benefited from a positive sales mix, underpinned by the commercial initiatives undertaken, but also from reduced volumes and lower-margin countries and market sectors.
Speaker #2: We will examine the market trends in more detail in the segmental section. Supported by successful delivery of our commercial and operational initiatives, including our 2025 Turkey restructuring, the group has delivered adjusted operating profit growth of 0.8 million or 4.9%, with adjusted operating profit margin and profit increasing to 16.7 million, with a 1.8% points increase in margin.
Speaker #2: The absence of loss-making volume, strong overall country mix, and efficiency improvements in our low-cost manufacturing facility have all combined to enhance profitability and offset market weakness.
Speaker #2: Adjusted operating profit is stated before a sectional item of 1 million pounds, with a redundancy cost incurred in the period to right-side operations in response to subdued demand.
Speaker #2: Adjusted redundancy share has increased by 16% in the period, supported by the increase in operating profit and also lower interest rates, interest costs, which have been part fallen due to lower debt levels, but also due to rate reduction secured during our 2025 refinancing.
Speaker #2: And the final chart shows proposed 2026 dividend interim dividend of 3.19 penned per share, representing a 5% increase. We previously increased 2025 final dividend by a 5%, and the continuation of this increase reflects a broad confidence in our cash generation potential and balance sheet strength.
Speaker #2: A detailed income statement, which highlights the movement in interest and tax, is included in the appendices. We continue now with our KPIs on this slide to examine the volume and premium economic trends in more detail.
Speaker #2: In respect to volumes, we can see the 14.6% reduction of which 9.3% is directly related to the loss-making contract and the decision to reduce Turkey's volumes.
Speaker #2: The remaining volume reduction, which is due to ongoing challenges in the UK, where RMI and new build activity are still weak, and also lower levels of activity in France.
Speaker #2: There has been more stability in other markets, with volume in the Netherlands, Poland, Denmark, and Sweden all up year on year, and volumes for Belgium and Germany excluding the exit of contract, stable year on year.
Speaker #2: The group's premium panel mix has a percentage of steel panel radiators increased by 0.1% points in the period to 6.2%, despite a subdued market environment.
Speaker #2: The group continues to promote the sale of the premium panel products into all of its markets, recognizing the additional margin these products generate. And we expect further progress in premium panel volumes as markets recover.
Speaker #2: Supported by mix, price management, and proactive cost initiatives, contribution by radiator grew by 19.6% to 24.32 pounds in the period, our contribution margin has benefits from commercial and cost initiatives undertaken in '25, but also due to subdued volumes and some lower margin territories and market sectors.
Speaker #2: We expect contribution per radiator to move toward our sustainable medium-term target 21 pounds in the future, reflecting our intention to grow volume in select territories.
Speaker #2: Now we turn to revenue by operating segment. Despite a 6.6% decline in sales volumes, UK and Ireland revenue only fell by 4%. With inflationary selling price increases and sector mix, helped under partially offset the volume decline.
Speaker #2: Within Europe, sales volume declined by 14.4%. With the exited loss-making contract responsible for 70% of the volume reduction. European revenues have benefited from a weaker euro, and sales mix benefits.
Speaker #2: With the average selling prices increasing due to reduced sales and lower margin French market, and to the loss-making contract, additionally, high margin territories such as Netherlands, Poland, Denmark, and Sweden are all up year on year in addition to Belgium and Germany being broadly flat year on year.
Speaker #2: Sales volumes in Turkey were down by 62%, with the reduction down to the commercial decision to reduce sales to Turkey in the period. Now we examine segmental adjusted operating profit in detail.
Speaker #2: In UK and Ireland, profit reduced by 0.9 million or 6.3%, driven largely by the revenue reduction of 4%. Contribution per radiator has improved year on year, benefits from good margin management.
Speaker #2: But the impact of adverse volumes on a stable fixed cost base has reduced the operating profit comparatively. Adjusted operating profit in Europe has increased by 2.7 million in the period, with the margins in the sector improving by 5.1 percentage point to 10.8%.
Speaker #2: The results in Europe have been significantly impacted by the exit from the loss-making contract at the end of 2025 and subdued volumes in the lower margin French market, which was in part due to overstocking by customers at the end of 2025.
Speaker #2: Additionally, positive volume trends have seen some profitable markets such as Netherlands and Poland being beneficial. We are pleased with the progress in Europe in the period, with the profitability of this segment remaining an ongoing focus.
Speaker #2: Turkey international operating profit decreased by 0.5 million, with a decrease driven by volume reduction linked to commercial strategy. Now we turn to the group's cash flow statement and leverage position.
Speaker #2: Cash flows and leverage at the half-year were in line with expectations, consistent with previous years we have seen a seasonal investment of working capital which will unwind in the second half.
Speaker #2: On an LTM basis, cash flows are strong, with operating cash flow conversion at 102%. We have made an underlying investment in inventories with local stocks being added in Turkey to further enhance the flexibility of our business model.
Speaker #2: And although capex is in line with 2025 at the half-year, we do expect a modest increase in the full-year capex year on year, due to the one-off IT costs we outlined at the full-year results.
Speaker #2: The increase in tax payments is linked to profitability and an increase in dividend receiving in Turkey. And interest payments have benefited from interest rate reductions and a lower debt position.
Speaker #2: 80% strong free cash flow on an LTM basis leveraged based on net debt 40 liabilities has fallen to 1.29 pounds EBITDA, which is a strong improvement from prior year, and we expect a further reduction in the second half.
Speaker #2: Now we turn to some other key financial areas, the taxation, the effective tax rate may consist in year on year, the dividends, as mentioned in the overview, we reiterate our intentions to increase the interim dividend by 5% in line with our progressive dividend policy, return on capital employed has increased by 2.1 percentage points to 29%, with a year-end measure expected to exceed 30% due to the time remaining to work capital movements.
Speaker #2: This measure has benefits from increased operating profit and lower fixed asset values year on year. And finally, for group credit facilities, the new loan is operating effectively and providing the group with a margin benefit.
Speaker #2: And at the end of the period, we had generous headroom on both facility and cash. And now provide some technical guidance for use in analyst modeling.
Speaker #2: Steel prices are expected to rise slightly in half two, albeit from an historically low level, recurrently expect other key infra prices to remain stable.
Speaker #2: We are mindful of current global events and their potential impact on pricing. Capital expenditure and working capital investment are expected to continue to be in line with previous guidance.
Speaker #2: And finally, leverage based on net debt 40 liabilities is expected to fall further in half two, as the working capital reduces. Thank you. I will now hand you back to Trevor for the business review.
Speaker #1: Thanks, Lee. I'll now run through our progress and priorities for the second half. You will have seen this slide before what is an important one for us and sums up our positioning prospects and opportunities.
Speaker #1: STELRAD has clear, consistent strategic objectives of growing our market share, improving our product mix, optimizing our route to market, and positioning effectively for decarbonization.
Speaker #1: As I alluded to earlier, our objectives are interconnected, and in combination with our competitive advantages, underpin the group's sustainable future growth. Progress against each must be carefully balanced to ensure we maintain our competitive cost advantage and market leadership, which is underpinned by the operating leverage within our manufacturing sites and positions us to maximize on the opportunities presented by a market recovery.
Speaker #1: This market leadership point is critical. It not only positions us for that recovery, but also positions us to drive the adoption of higher margin value-added products, both through increasing premiumization and through higher heat output and hybrid rates.
Speaker #1: As the drive to decarbonize home heating systems continues. Taken together, the group's market opportunity structural growth drivers and competitive advantages translate into a set of ambitious and sustainable medium-term targets.
Speaker #1: Which balance the position of the business for a market recovery with the ability to deliver clear, stakeholder value in the meantime. The latest PRG data shows that we have reinforced our position as the clear leader of the steel panel rate and market with a combined 2025 share of 24%, retaining a 3.9% points lead over our nearest competitor.
Speaker #1: As I said, our market leadership is key to unlocking our future growth. It positions us to both take advantage of a market recovery and replacement cycle and to drive adoption of premium and higher heat output raters.
Speaker #1: Our operational excellence underpins this, with a low-cost manufacturing base significant production capacity and critically the best on-time and full delivery rate in the industry.
Speaker #1: All of these factors carefully balanced alongside each other give us an incredibly agile and resilient operating platform. Which has allowed us to navigate the market landscape over the last few years.
Speaker #1: That may not share reduction in 2025 you saw on the last slide, was driven by the specific market mix across the countries that we serve.
Speaker #1: And I would note our position in the UK and Ireland as a contributor here. What I would say is that we see specific opportunities in Europe in particular to target market share growth underpinned by the highly agile platform that we built.
Speaker #1: If you look at the chart here, it shows that there is a significant portion of the market that we can grow our exposure to.
Speaker #1: The European opportunity is something that we've actively been addressing for some time. As is shown on this slide. The latest PRG data shows us consistently growing market share in select European geographies as we reinforce and grow our market leadership positions.
Speaker #1: It also shows several markets, some of which are large, where we feel there is an opportunity to grow our market share further. This is important for one key reason.
Speaker #1: Market leadership underpinned by a competitive advantages makes us the supplier of choice for our customers regardless of the volume environment. But particularly in the market recovery scenario.
Speaker #1: This will be the key volume driver for STELRAD. We have made significant progress in both protecting and improving our product mix over the last few years.
Speaker #1: Reflecting both the progress that we have made in our premiumization and decarbonization strategic initiatives. In terms of premiumization, while we continue to see designer rate of volumes being impacted by reduced RMI spend, the penetration of premium panel volumes remains solid during the period, with a further increase in total proportion of premium panel sales increasing by 0.1% to 6.2%.
Speaker #1: For us, this is very encouraging. We have worked hard to protect our premium panel mix and drive volumes against the backdrop of further volume declines.
Speaker #1: And our strategic actions here have helped to protect this category throughout the current market cycle. We continue to see long-term structural tailwinds from the decarbonization of commercial and residential property stock.
Speaker #1: Which will serve both as both a demand and margin driver for us as we further expand our sales of higher heat output, hybrid, and electric rate of sales.
Speaker #1: In our key markets. This trend has continued and in the Netherlands and Belgium, the UK and Germany, we've seen volumes grow by 58% over the last two years.
Speaker #1: As you saw earlier, with a market leader in three of these countries, with our market leadership again helping us to drive the adoption of these systems.
Speaker #1: We set out ambitious medium-term targets and goals for sustainable growth a little under two years ago. And we continue to make pleasing progress against them.
Speaker #1: For it is equally important to be clear that the strategic actions and progress we have made have been accentuated by the volume environment, where suppressed volumes in low margin territories have had a significant skew on our product mix and contribution.
Speaker #1: The real test of these targets which will be a nice problem to have will be our ability to maintain them sustainably at a higher volume environment as lower margin market segments recover and we drive operational leverage through our manufacturing sites which will naturally result in a change in market mix.
Speaker #1: I'll now talk through the outlook for the second half and beyond. As you've seen and heard throughout this presentation, we're happy with the progress that we've made in the last six months.
Speaker #1: With several of the long-term conscious strategic actions that we took in 2025, beginning to bear fruit. We've reinforced our market leadership while strengthening all of those critical competitive advantages that underpin it.
Speaker #1: Providing a strong platform for targeted market share gains and positional swell to deliver long-term growth. Building sustainable shareholder value throughout the cycle. While we are mindful of continued cost inflation and end market weakness, we are positioned well to continue to deliver in the current environment and continue to trade in line with expectations with our confidence reflected in the 5% increase in the interim dividend.
Speaker #1: Many thanks. Any questions?
Speaker #2: Thank you much, sir. Ladies and gentlemen, if you like the task and audio question, please press star one on your top of keypad. And just make sure it's your line is not muted to allow you to reach equipment.
Speaker #2: So that is star one for questions. Our first question this morning is here from Ainsley Lammon, Confirm Investic. Please go ahead. Your line is open.
Speaker #3: Thanks very much. Morning, Trevor. Morning, Lee. I think I've got three questions actually just the first question on the market share gains and obviously Germany and Poland look to be good opportunities there and just wondered is it kind of you know price cost leadership is it service and how do you expect to kind of gain market share in those countries and secondly on steel prices just interested what's driving that how big an issue that is for kind of the second half and how confident you are passing those prices on into the market and then I guess just thirdly you know if volumes were to stay weak and for the next 6 to 12 months is there more you know confident there's a bit more you could do on the cost front kind of commercial initiatives taking shares to offset some of that thanks.
Speaker #1: Shall I answer that, Lee?
Speaker #4: You want to go for the first one? I can pick up a second.
Speaker #1: I mean in terms of our geographic diversity, we clearly see Germany and Poland as significant commercial opportunities where we are currently underrepresented. We have a very strong balance sheet.
Speaker #1: We have cost leadership. And we believe that it's a right and appropriate it's the right time for us to look at increasing our market share in those markets.
Speaker #1: It will be a combination of leverage in our cost advantages in those markets. But I mean these are markets which are not only attractive and large but also have a significant premium panel element which we find very attractive as well.
Speaker #1: So I mean we will be investing in commercial initiatives. We will be looking to increase our market share presence in both Germany and Poland in the coming 12 months.
Speaker #1: On the steel front, Lee?
Speaker #4: Steel prices I think I mean as we call that a marginal increase in the second half. I think steel prices are still a very low levels across the geography especially in the steel prices we get into our Turkish factory and it's probably some of the lowest levels we've ever seen.
Speaker #4: I think we probably expect maybe a 5% increase in the second half. So nothing significant. And as we've talked about before and the industry and the sector is very used to steel price increase in the past and those on we have mechanism in place to do that without a key contracts.
Speaker #4: But yeah the market's very kind of adept in dealing with those price increases. In terms of volume weakness it's something we're very much alive to as a management team of the ongoing potential for this to be a more sustained subdued market environment.
Speaker #4: Obviously we're keeping an eye on that. We've not run out of ideas and we're continuously assess what we do. For us it's very much a case of the tightrope between having the operational capability and the flexibility and making sure we're fit for purpose for the future recovery.
Speaker #3: All very clear. Thank you very much.
Speaker #4: Thanks Ainsley.
Speaker #2: Thank you much. Thanks sir. Our next question will be coming from Sam Cullen from Peel Hunt. Please go ahead.
Speaker #4: Hi morning both. I've got a couple also just first one is coming back on the on the European piece. What's your view of what you think the competitive reactions might need to be in these markets and just trying to get coming on from Ainsley's question really whether this is a how much of this is going to be price led versus just investing more in the distribution base and the sales force in those markets.
Speaker #4: And then the second one is really just a wider thing on should we read anything into your kind of initial comments Trevor about that we're being in the climate control subsector and obviously you clearly focus on heating and whether there are other areas of the climate we should be looking at the business over the medium term.
Speaker #1: Yeah in terms of the competitive reaction I think you're right to highlight the point Sam. But I think at some stage we need to take advantage of the agile and low cost platform that we have built.
Speaker #1: If you've got if you have a genuine European market leader and you believe that you have you know a strategic competitive advantage that then it's inevitable that you're going to have to use that at some stage to continue growing a bit growing your business and share.
Speaker #1: Particularly in challenging times I mean I am expecting competitive reactions but I mean it's it's the realities of business these days that you you know you've got to you've got to flex your muscles occasionally and that's what we would like to do.
Speaker #1: In the coming 12 months. And in terms of the categorization of us in the climate control subsector I think that's a reflection of how differentiated we are to a lot of our a lot of our peer group.
Speaker #1: We do see benefits and opportunities by being differentiated in this way. I mean our geographic presence is differentiate from our from what our peer group and being included in the climate control subsector we see as a specific advantage.
Speaker #2: Great. Thank you. Thank you sir. Next question will be coming from Edward Prest of Berenberg. Please go ahead. Your line is open sir.
Speaker #5: Hi. Morning Trevor. Morning Lee. I have a couple on premiumization please. Firstly obviously it's premiumization improved from 6.1 to 6.2%. How much of that relates to exiting Turkey not exiting Turkey reducing sales in Turkey and the loss making contract in Germany?
Speaker #5: And secondly I know you called out at the capital markets day a couple of years ago that the key would be increasing premiumization in the UK given that penetration is low.
Speaker #5: How is how is that progressed in H1? Has there been an increasing premiumization as sort of new builders dropped off or is it struggling in challenging markets?
Speaker #5: Thanks.
Speaker #4: I'll go for that one Trevor if that's okay. I think in terms of there has not really been a significant mix shift of premiumization as a result of the commercial action.
Speaker #4: Turkey is lower. The loss making contract probably had a reasonable percentage of premium partner products. So on balance of two probably mess out and not really give any impact.
Speaker #4: Albeit I would call out that the premium element of the loss making contract would have probably been lower than premium prices. So there probably had to be a mix shift benefit there.
Speaker #4: UK is still an area of progress. We think we've made some good ground on putting in place the right initiatives in terms of product availability lead time 48 hour delivery color coordination process which will benefit the future of that premiumization strategy in the UK.
Speaker #4: But a lot of premium panel products will be dependent on discretionary spend and consumer confidence. So it all goes hand in hand with you know what's suppressed in market demand.
Speaker #4: It's suppressing premium panel products. So to maintain the same percentage in the UK we think is a good result having the right strategy for the future.
Speaker #5: So thanks Lee.
Speaker #4: Okay. Did I miss the second question there? I probably got carried away with the first one.
Speaker #5: Oh no. So no you've got no you've got both. It was both it was a couple in relation to premiumization.
Speaker #4: Okay. Fab. Thank you.
Speaker #5: Cool. Thank you.
Speaker #2: And we have a question over the phone. Toby Torrington from Equity Development. Please go ahead.
Speaker #1: Yeah thanks. Morning all. A few questions from me please. Well done on the margin performance pretty exceptional that I think that's the record gross margin since listing actually.
Speaker #1: I can't mark obviously on it's settling back at some point. In the near term you know rest of the year it looks as though the fund contributing factors for that gross margin contribution per radiator performance are still going to be around.
Speaker #1: I the loss making contracts dropped out. France is still subdued. Not too sure what you're going to be doing in Turkey in the second half but should we expect sort of similar gross margin contribution for RAD for the full year?
Speaker #1: Is that fair?
Speaker #4: I think you've you're right to note that there is some natural underlying progress and contribution per radiator in what we've done. So that's not to be kind of dismissed.
Speaker #4: And I think that's correct. And the note of caution in contribution per radiator coming back to our targets is there's probably one where we look through a the time period is more difficult to call.
Speaker #4: We look through that probably in a more of a medium term so I do think there will be some ongoing benefit in the second half from ongoing margins but Trevor and I just very keen to call out that we do have the ambition to progress opportunities elsewhere and we do expect markets to come back.
Speaker #4: And with that there will be normalization at some point in the future.
Speaker #1: Yeah understood. Okay. European markets excellent loss making contract. Reasonably good for you relative with volumes flat there and a bit of price inflation. Ex France I'm talking about.
Speaker #1: I think you've called out four markets in particular being a bit sort of firmer relative are they sort of flat volume markets and a bit of price inflation?
Speaker #4: I think there's a significant volume benefit in some of those key markets. We call it our Netherlands Poland and there will double digit growth year on year for us.
Speaker #4: Obviously that's probably part market stability and part of our you know strategy of growing volume in those markets and you now sustainable advantages. So that's good progress in those two and then we've highlighted Denmark and Sweden has given ongoing benefits in terms of volume.
Speaker #4: But yeah I think in terms of Europe more broadly on a lifelike basis it's shown a higher degree of stability. With the exception obviously you mentioned on France being a bit of an outlier.
Speaker #1: Yeah okay. Interesting. Just while we're on on Europe could you just remind us what the loss making turnover that's going to be dropping out from last year in the second half please?
Speaker #1: You've called out five in the first half I think.
Speaker #4: Yeah I think it's probably going to be boarded consistent we run that contract through the end of 2025 so it's going to be a full year impact.
Speaker #4: There may be a slight tail afterwards the end of the year but I'd imagine doubling five million not going to take you too far off.
Speaker #1: Okay. All right. And finally from me on working capital noting that you're saying that net debt's going to be lower the year end fairly chunky inventory investment for well understood reasons I think in the first half.
Speaker #1: Do you think you'll get back to working capital neutral? For the year or is that a bit too ambitious do you think?
Speaker #4: I think there may be a small investment. I think the end of last year finished very strong. December is always a short sales month so December is abnormally low.
Speaker #4: So that does kind of there is a natural skew in terms of at the half year versus the final year. So I think we'll get much closer to the prior year.
Speaker #4: If not all the way.
Speaker #1: Okay. Great. Very clear. Thanks very much. Well done.
Speaker #2: Thank you very much for your questions Toby. As we have no further audio questions this time then I'd like to turn the call over to you for webcast questions.
Speaker #2: Thank you.
Speaker #3: Thank you George. So we have one question from James Tetley from Equity Development. Contribution per radiator is very strong in the period. Is this a short term spike or could this be expected to remain above the 21 pound target until volumes meaningfully recover?
Speaker #4: I think we probably covered that one last year to the question from Toby. So I think there is probably some embedded benefits in there that may last for a shorter period.
Speaker #4: But without growth initiatives and market recovery that would be what brings that down over the time.
Speaker #3: Thank you Lee. And as there appears to be no further questions Trevor I'd like to hand back to you for closing remarks.
Speaker #1: Can I just thank everyone for their time today. It's greatly appreciated by Lene myself and we look forward to seeing you again in the near future.
