VLUTF (VLUTF) Q4 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to our FY '26 results presentation. I was just working out with Andy. I think it's my 25th and Andy's 15th, and we haven't got wear out. Just be clear, that doesn't -- it's just longevity, not wear out. So look, we're really pleased to be here this morning, and we'll take you through the story in a very similar format that we've done previously. So overview. I've got a relatively easy bit where I'll talk about the overview and what's been happening, hand over to Andy for a little bit more detail on the financial review. I'll come back on the business review and then summary and outlook. And we've got something a little bit different just at the end of the presentation. So I'll keep you sort of guessing for that. But look, it was another really good year for us, a strong earnings growth, margin expansion and strategic progress. We're absolutely delighted with the performance that we had in FY '26. Revenue, operating profit, EPS and cash generation, all up greater than 15%. And from our perspective, if you look at our long-term targets, it doesn't really get much better than that in terms of our long-term target to be above 15% on those metrics and continuing our long-term compounding growth performance. Organic growth, 2.8%, just slightly below the bottom end of our 3% to 5% range, but demonstrating the benefits of our diverse geographic end market exposure, and we'll cover that in a little bit more detail. Operating margin progression, 90 basis points, now 23.2%, good progress in the second half of the year, leveraging our scale, our expertise in procurement, engineering and product range. And our second largest acquisition to date, AC Industries in Australia, that was in February. So that was in the financial year '26. And then right at the beginning of the financial year, first working day, actually second working day of FY '27, getAir in Germany, a company that we've courted for many years, delighted to now have that inside our group. But look, continuing to deliver strong returns and compounding growth. A little bit about our clear growth focus. And we talk about organic growth. We believe we've got an agile decentralized approach, very close intimate focus on local markets and organic growth of 2.8% on a constant currency basis in the year. Value-adding acquisitions, I talked about AC Industries, very excited about that proposition and how it performed in the year, delivering 11% inorganic revenue growth. And that was only for half of the year. We only had that opportunity inside from the beginning of February, so at the second half of the year. And operational excellence, I think of this as about running the business well. So product cost leadership through sourcing, engineering and manufacturing, incremental efficiencies around process and operations and our people underpinning that significantly strong margin performance at 23.2% in the year. Investing in our compounding growth story. Why do we believe we're a compounding growth story? I'll come back to the chart at the bottom. But what's underpinning this? We're in growing markets supported by long-term structural tailwinds, and we could maybe cover that off in a little bit more detail. But if you look at AC Industries acquired more recently, this is ventilation mining systems in copper and gold mining. I think the copper price very recently hit its all-time highest price ever. And we see with the energy transition, that's a very strong place to be. Increasing diversified geographic and end market exposure, that's really important for us. If I look at my early years in Volution, joined in 2008, it was a U.K.-centric residential play. If you look at where we are today, we're providing ventilation systems in mines in Australia. We've had our first data center order for ventilation and cooling for Australian data centers. We've got a huge wide breadth of end markets, products and different applications. We're pure play. We focus on ventilation and air. I've said this throughout, I've had it over the time. We're not looking at anything else. We want to be providing healthy air sustainably. It's about air quality. It's about leveraging scale, intimacy and expertise and scale benefits in a specific area that we believe we can be very good at. Continues to be a capital-light model, strong margins, highly cash generative. I've talked to you about the metrics, all being well over 15% in the year and disciplined capital allocation and M&A capability. We did 2 deals since the last time we sat in front of you. There's other deals that we haven't done, and that's really to do with discipline and not doing deals just for the sake of it. So if you look at the adjusted earnings per share over time, 15.4% growth in the year. That's absolutely at the high end of our expectations. We have a long-term target to be over 10%, but we've compounded now over 10 years at 11.7%. And that goes back further. We have a debate about how far back do we go. But if you look at '14 when we listed through to now or indeed, if you go back prior as a private company, that compounding theme has been consistent throughout. We talk about our 3Ps, although there's 4 here, but we talk about 3Ps, product, planet and people, delivering our purpose around healthy air sustainably. And just a little bit about what's happening. So these are metrics that we put out. So on revenue from low carbon products, it looks as if it's come down over the last couple of years, but that's partly to do with the composition of the group and Fantech, which is our largest acquisition that we made in December 2024. So on a like-for-like basis, actually, our low carbon revenue has been increasing, but we actually acquired some propositions that have a lower proportion of low carbon revenue. And that's why we're only at 72.1% of our revenue from low-carbon products. Particularly pleased about carbon intensity. This is in line with our long-term SBTi targets, and we had a reduction in the amount of CO2 per million pounds of revenue down to GBP 10.5 million. So that's a very strong improvement in sustainability and carbon reduction in the year. And we move to people, we've actually updated our internal values around customer excellence, collaboration, continuous improvement and ownership. But a disappointing number here. I'm not particularly happy about the fact that our accident frequency rate increased in the year, and we've been redoubling our efforts internally with a view of improving that. We had a downward trend through to '25. And then regrettably, we stepped up to 0.29 frequency rate in 2026. So more that we can do there and absolutely on that journey. And then finally, recycled plastics in our products. And this is really important. You'll remember that recycled plastics for us are a huge hedge to the higher cost of virgin plastics. Quite a few organizations coming out more recently over the last 6 to 9 months talking about material cost inflation relative to virgin plastics, we try to insulate ourselves here by having a recycled content, although it dropped to 81.3% in absolute terms, the amount of recycled plastic that we were using has increased, but we are actually molding more in our facilities and the ratio dropped back to 81.3%. It's still an outstanding achievement. 80% of what we process in our facilities is from a recycled source but can go higher. We're still committed to increasing that over time. And as you can see there, the 10-year increase is quite phenomenal. And of course, it's it's the law of diminishing returns as we move forward, but still more that we can do in the future. So as I say, I had the easy bit. I think it's a really compelling set of results. I'm going to hand over to Andy now to take you through the financial review in a little bit more detail, and then I'll come back afterwards and just go through the 3 geographic areas in a little bit more detail.

Good morning all. Thank you, Ronnie. I don't think this is the hard bit, though, if that was the easy bit. So really positive set of numbers, which I'm going to spend a few minutes walking you through. So starting with this slide, and look, 2 words that Ronnie has used a few times in the introductory section were compounding and growth. And look, ultimate -- I make no apologies for using them again now. That's what we're aiming to deliver. And this is showing chart -- a track record over the last 5 years. So obviously, the 4 on the left there, revenue, operating profit, earnings per share and cash flow. And over the 5 years shown on this chart here, really, really strong double-digit growth in all 4 of those. And then if you like the 2 on the right-hand side, so the operating margin performance and the return on invested capital. So delivering that growth, but preserving or actually in the case of margin, continuing to improve on those key sort of quality of earnings and quality of returns metrics. So I think a really powerful slide, which demonstrates in-year performance, which we'll talk more about now, but also, I'd say that sort of consistency and compounding of the growth performance. So looking in a little bit more detail at year-over-year 2026 versus 2025. We'll go through the breakdown and the analysis of the revenue, the operating profit, the cash, et cetera, in later slides. So I won't dwell on that too much here. A couple of pieces to pick out. So leverage, this shows you where we were on the 31st of July, so 1.5x leverage. And I think probably important to context that in the last 2 years, we've done our 2 biggest acquisitions ever. We've invested over GBP 200 million in those 2 acquisitions. And yet we still closed the year with a leverage at 1.5x on an old money ex leases basis. Full transparency, of course, this is pre the getAir transaction. Immediately post that, we'd have been more like 1.8x. But as you know and as again, we'll sort of show later, that constant and consistent cash generation profile of the business means that we do still feel there's plenty of headroom and capacity on the M&A side of things. Finance costs, [ 4 point ] down there were higher in the year, and that is a function of that investment in acquisitions. And then dividend, we're not a dividend stock, but I think really important to show that we can continue to have this sort of slightly dividend increasing fractionally ahead of earnings year-by-year whilst continuing to, as I say, deploy our capital to acquisitions. So revenue breakdown. So clearly, on the left-hand side, how does our organic growth break down across the 3 regions. And look, if you were to glance back at the composition of that growth over the last 2 years, you'll see a very different picture. So you'd have seen perhaps U.K. in the lead and the other slightly behind. And this year, Ronnie will talk much more about the dynamics of the individual markets later, but you see a bit of a rotation. And look, would we love all of our regions to be growing phenomenally? Of course, we would. But I think what you really do see here, and I think the last few years really do demonstrate this is the benefit of that diverse portfolio, both geographically but also end market and application-wise. In terms of the breakdown of that organic growth between price and volume, it's roughly equal. So 2.8% organic growth, pretty evenly distributed between, say, price contribution and then volume. But once, actually, foreign exchange was helpful. It's -- I think that probably is the first in my 7 years, but it's been in our favor. And then the inorganic contribution there is the first 6 months of AC Industries, which will have again a further 6-month contribution in 2027, but also the 4 months of Fantech through to December 2025. Operating profit. So again, look, we talked about this in the highlights earlier, the further nudging up. Well, I suppose 90 basis points is a bit more than a nudge, but the further improvement of the group operating margin to say that 23.2% level. So 2.8% constant currency revenue growth coming through at 6.3% constant currency profit growth, if you want to think about it that way. Bottom left section of the chart there is really just to try and give this a bit of complexion and detail on a region-by-region basis. First and really, really important message is all 3 regions expanded their margins on an organic basis. The U.K., I think that 230 basis points improvement on the back of a business where revenue was flat. So I think that is absolutely testament to the delivery that Ronnie talked about earlier in terms of product cost initiatives, efficiencies, whether that's in the factories or the back office. And it's also continuing to push up the premiumization, if you like, of the product range that we're selling. Continental Europe, pretty consistent year-over-year. There's obviously quite a spread and diversity of activities that we have in Continental Europe, but good to see that, that margin nudging up slightly. And then in Australasia, we've given you this year and last year, but we've also in the slightly larger shaded blue there, given you 2026 on an organic basis. So effectively, that is essentially excluding the 6 months of AC Industries. AC Industries did come in at a premium to our group margin, which is unusual when we're at 23.2%, but this was a premium. But even if you take that out, so that moved us -- that benefited us by about 60 basis points in the year, but there's still about 100 basis points of underlying margin improvement there, which is great to see. And the biggest element of that, we've talked over the last couple of years about how when Fantech came into the group, it had a good margin, a strong margin, but it wasn't quite at our group levels. And I think this, amongst other things, is early evidence and proof points of us doing what we said we would, which is to sort of move that margin in an upward direction. Moving on to cash. So really, really strong cash generation performance again this year. So our cash conversion target of 90%. We delivered 107% this year, good, good working capital control. CapEx, probably actually GBP 1 million or GBP 2 million lighter than we expected it to be. So we would normally think of spending somewhere in sort of GBP 9 million, GBP 10 million, GBP 11 million range. And that's probably just a function of the timing of our facility investment in ERI in North Macedonia. There's a bit more of that to come in 2027. But look, still, we're going to continue spending of that magnitude on the CapEx side of things. And then over on the right-hand side, of course, the big bar there is the GBP 105 million spend in the year on acquisitions. So that is GBP 75 million, roughly speaking, on AC Industries and then GBP 30 million being the deferred element of the Fantech consideration because when we bought that in 2024, there was an obligation to pay the remaining AUD 60 million 12 months later. But let's say, the upshot of all of that is we've had one of our most exciting years on an M&A investment perspective, but we still end the year in a very, very healthy balance sheet position. Returns on invested capital, super important metric for us. And I suppose the bullets on the right probably capture the key takeaways I give you on this slide here. So overall, the ROIC improved by 20 basis points. Now we've always said, if we've got a return up in the sort of 25% and above level, if we're buying businesses at 8, 9, 10x trailing earnings, they will or should be dilutive. Actually, I think the fact that AC Industries was only a 40 basis points impact in the year, partly because it's half year, but actually, part of it is testament to the very low multiple that we paid for buying what is a high-quality asset there. So 40 basis points dilution because of AC Industries. 20 basis points improvement on Fantech itself. And I think that is, again, coming back to that margin improvement during the course of the year and then 40 basis points of other organic improvement outside of that. So look, really, really important metric to us, and I think we're very pleased to still be north of 25% after the busy couple of years that we've had M&A-wise. And I think there's probably not too much to say here because this really does just sort of wrap up what we've already covered. But this is where we were in FY '26 against those key financial metrics that we sort of prize so heavily. All of them at or above target with a slight exception of organic growth. But again, we'll talk more about that shortly, but 2.8%, very close to our sort of 3% to 5% target and all the others sort of looking very nicely ahead. So with that, I'll hand over to Ronnie.

Thanks, Andy. A little bit more detail about the business. And I was listening to Andy taking you through the financial results. And they are quite frankly, pretty outstanding results. I've been doing this for a long time, not just in Volution, but in the industrial world. And when I look at the sort of repeatability and consistency of our results over time, I thought why do we have that level of confidence? And we'll talk about some of the market difficulties in a moment. It's not easy. And I was thinking to myself, how many of the last 10 years have been easy, market being really quite punchy and supporting us and providing that additional strength. And I guess the point I'm trying to make there is that it's the way in which we run our business, the choices we make about the markets that we want to be in, the decisions we make, and I was pleased to have some of the team along today. Martin, put your hand up there, but Martin is the Group Technical Director and Lee has put up with me for 19 years, now 18 years as the Business Development Director. But look, we -- we're really confident about the outlook for our business, almost irrespective of the market. And even if the market is to be quite difficult in certain areas, it's about that agility and the choices that we make in the way in which we run our business. And one of the things that was really important to us was increasing geographic diversity. When I joined Volution in 2008, it was 2 U.K. ventilation brands. I had the great opportunity to become the Chief Executive at the beginning of 2012, and it was very much a buy-and-build story, and we've done 31 acquisitions in the last 15 years. And we've chosen these markets. We've chosen to be in Continental Europe. We've chosen to be in Australasia. First acquisition in New Zealand in 2018, I remember the feedback was what have they done? Why are you going to New Zealand? The revenue pro forma in Australia now is actually bigger in Australasian region, it's bigger than the U.K. And these are great markets. We go to the Australasian region, and we talk to our team and they say, competition is really tough here. And I sort of smile about it. Lee spent a couple of years living in New Zealand. Competition is different in New Zealand than it is in the U.K. We have a market leadership position. We're very respectful and mindful of that position. But I think we've created a huge geographic and end market diversity that gives us a high degree of confidence that the results that we provided on a trailing basis can be repeated into the future. And so a little bit more detail on the performance in the year. U.K. revenue was flat. It was up in the first half. It was down in the second half of the year. If I was to stand up now and tell you the U.K. market is quite difficult, you'd be really surprised to hear me say that. But look, we're adjusting the way in which we run our U.K. business. The operating profit margin expansion in the year was huge. It was substantial. And we think -- we're not setting a new target, but we think that there's still more that we could do. I said to the team more recently, we had a perfect year. Everything went exactly as it should do. We didn't make any mistakes, and we had every initiative delivered. Of course, not. So there's still more that we could do. And what's happening in the market, residential, RMI, public housing is still quite strong. But if I was to tell you that residential new build was more challenging, you wouldn't be surprised to hear that. Look at what the housebuilders are telling us. But nevertheless, in the year, we delivered a really compelling result, notwithstanding the fact that the revenue didn't grow. And we're positioning our U.K. business for the long term. I actually believe in the U.K. market for the long term. I think we will eventually start to build more houses. The impact of building regulations is driving a more low-carbon product portfolio. And we absolutely, in the residential space, lead on residential ventilation products. And I think there's so much more that we could do there. So that's -- Andy talked about premiumization, but it's about products that are helping our customers deal with their low carbon challenges, and we're very good at that. On the commercial side, disappointing. We talk about this internally. It's an opportunity. We should be doing a lot more. We think we can do more, and we're continuing to invest in that space, but a disappointing decline in our commercial revenue in the year, but we can do better. During the year, we took on a new facility, and we've made some expansion changes at our Dudley facility. We have a very considerable capacity headroom. We're just not utilizing it yet, but we intend to over time. Strong growth in export. The Irish market is still from a new build perspective, probably the complete opposite to what we might talk about in the U.K. at the moment, but the Irish market is still very strong from a new build perspective and very much focused on low-carbon products, including what we call mechanical ventilation with heat recovery. And then finally, OEM. I think the really important part about OEM is that we are now using a very material quantity of our own produced motors in our products. And that's, again, another initiative that helps expand our operating profit margin. So 28.3% operating profit margin, higher in the second half of the year than in the first half despite the fact that revenue declined in the second half. So good trajectory on margin. As Andy said, there's been years that we've stood up here and sort of apologized for more anemic organic growth in Continental Europe, 5.9% constant currency. We had some currency tailwinds there, both in Europe and in Australasia. But 5.9% is above our long-term 3% to 5% range. Operating profit margin, 24.3%, small expansion. Nordics performed well. We've got a strong position in the Nordic market, particularly on the residential side. We're continuing to invest in our central systems and commercial proposition. And I think that's quite exciting about what we can do in the future. Our ClimaRad activities in the Netherlands around decentralized heat recovery. There's a really important theme here. Decentralized heat recovery from my perspective, I don't think I've got enough years left in Volution to see it fully vest. But decentralized heat recovery ventilation is the only way to deal with the existing stock of buildings in Europe. It's the only way to properly ventilate an existing building when you make it airtight. And we now own ClimaRad in the Netherlands, getAir in Germany, InVENTer in Germany, I-Vent in Slovenia and Croatia. We have a fantastic product portfolio, and we're very excited about this. And we also own one of the largest producers of aluminum heat exchangers, Energy Recovery Industries based in North Macedonia, where we've made quite a bit of investment over the last couple of years, really great support from the Board in terms of the investment for a new facility and the product range and the production capability and growing very nicely. So this heat recovery theme is very important to us. We talk about Belgium and France remaining challenging, and it was interesting because I had a comment back, I think, already this morning about -- well, we're a little bit worried about France. It's de minimis for us. Whether France performs well or not this year will not change our results. But over time, there's a market in France where we believe we can have a much bigger market share. So this is only upside opportunity over time. We're talking about a small delta on its financial performance in the year, but it's more about the opportunity cost. It's about what we hope to do in France in the future. And we believe we're a challenger there, and we can do much better. So sometimes talking about these challenges, they get overemphasized. It really is insignificant from a group perspective today, but how do we make it significant in the future? And as I say, probably the only way is up from our perspective in France, as much as that might feel counterintuitive, our revenue is circa GBP 10 million out of a total revenue in Central Europe of GBP 150 million. You can get a sense of that. And we've improved the operating profit margin. We've improved the quality of the business, and we've made some really good investments. Martin and his team brought together a new mechanical extract ventilation product about 6, 7 months ago now, and that's starting to get really good traction. So we're excited about Europe, and we think that Europe may be on a slightly further ahead of the curve in terms of new build recovery than where we might be in the U.K. at the moment. And finally, Australasia, 48.7% revenue growth. You understand why that was the -- obviously, the tailwind from the acquisitions, organic revenue growth of 3.3% and adjusted operating profit margin of 22.2%. So we are consistently making north of 20% operating profit margin in all 3 geographic areas. We have a strong market position in Australasia with the acquisition of Fantech. We're now busy with trying to bring this together and create a sort of scale benefit opportunity similar, I might add, to what we've been doing in the U.K. over the last 10-plus years. So if you think about the trajectory for the U.K. business over the last 10 years from a margin perspective, that's the blueprint. We had the team together a few weeks ago in Germany, and we actually had the U.K. finance lead come and tell us about the back-office transformation that we've delivered in the U.K. over the last 7 or 8 years as a model, a playbook that we have at our disposal to drive our Australasian margin over time. A couple of real big highlights in Australasia at the moment. AC Industries, I've gone on record saying I think it's probably going to be at this moment in time, one of our best returning acquisitions yet. It's done phenomenally well since we've acquired it. It's in copper and gold mining, not just in Australia, but more globally. We're looking at further international expansion there and how we can supply more into the other continents. And we've got a really good story. This is a product that performs, helps mines reduce their cost. Think about the cost of a mine. They're running ventilation, those ventilation products are often run off of generators. Those generators are running off of diesel and other fuels. I don't know if you've noticed what's happened to the price of diesel over the last 6 months, but energy reduction by having a superefficient ducting system in a mine is a very significant advantage for us. And this is going well, and we expect it to continue to go well. We're out in Sydney in about 3 weeks' time and look forward to being with the team again. And we don't want to sort of set the hares running here, but it is an opportunity, and it will underpin our organic growth this year. And we decided it'd be remiss not to talk about the fact that we've had quite a substantial order of about $12 million first order that we're supplying now for ventilation and cooling fans that go into data centers. And look, our Fantech proposition in Australia is the leader. It is the brand that you can trust. It is a company that can deliver. And when you're looking at large infrastructure projects like this, that's why we think we can do quite well in this space. So we're happy about that. And that's probably a good segue into the outlook and why we feel, despite the fact that the U.K. market is probably at best described as soggy, why we still feel that the prospects for the group are really quite strong for the rest of this financial year. I won't repeat this. It was on the first slide, but I will just spend a little bit of time talking about the outlook. And what we're saying here is the year has started well. The group is delivering organic growth alongside a positive revenue contribution from AC. It's not organic yet, but it is growing within itself. So if we look at the comps pre our ownership, it's growing strongly, and that's really helpful. We completed the acquisition of getAir in Germany. That integration is underway now. We had another review on the 200-day plan with the team last night. Very pleased about getAir and the proposition that we've got in Germany and the fact that we've got the widest product portfolio and some really good innovation. They were very smart -- have been very smart around innovation, and Martin will be leading that opportunity and how we can sort of cross-sell, cross- percolate those -- that technology into other areas of the group. We've talked about the U.K. and no doubt there'll be some questions on it. The U.K. is challenging, but it's fully baked into our view, okay? We're baking in that the U.K. will be challenging, and we'll take whatever mitigating steps to deal with that. But there are still lots of opportunities for us to gain share, to innovate and bring new products to market and the way the building regulations are driving, this is helpful. So we are still reasonably positive about what we can do in the U.K. despite a more benign, less positive outlook. And we see really good opportunities to build on this momentum, the recent orders for data centers, the strong ACI revenue stream, and we have a really strong product portfolio and platform. So the output there is that as the Board, we're confident of delivering another year of good progress and delivering sustainable growth for all of our stakeholders. And what does that mean? I'd just ask you to have a look at the track record, look at what we've been delivering over the last 12 years, and we're standing up today saying, we don't think there's any material difference in our outlook to what we've delivered in the past. So before we go to Q&A, one of the challenges that we have just looking around the room, some of you have been to our Reading facility where we make about 3 million small plastic ventilation devices each year, 45 injection molding machines and then come away from it thinking they make small plastic fans, that's what Volution do. And you're right, we do. And then we'd like to take you through our facility in Dudley in the West Midlands over the next couple of months and show you where we make ventilation heat recovery systems. But 65% of what we do in our group isn't in the U.K. and you haven't seen all of the U.K. And that's a challenge for us. I guess if it was an all-expenses-paid trip to visit our factory in Melbourne, we probably get takers, but we need to protect our margins. So we decided that the best route to maybe give you a better insight about our group is just show you a little corporate video that we prepared. [Presentation]

No round of applause. So that's 35 minutes in and over to the floor really now for any Q&A. I think we'll start in the room first, and then we can go on online virtually afterwards. So Rob, I'm going to stand up actually for now.

It's Rob Chantry at Berenberg. Three questions from me. So firstly, the product range is clearly key. Could you just comment on what percentage of the business you'd ideally like to have from specialist industrial in 5 years' time versus residential? Do you have something in mind? Secondly, cost inflation. I guess you've not really touched on it that much. You seem to have dealt with it very well. What was the pricing strategy in the year to cover any costs? And how did that differ from the approach taken by your competitors? And then thirdly, post the AC Industries deal, I think you've spoken well about it. Has that given more optionality in the acquisition pipeline? [ Does ] more interesting things like that come into the pipeline post that deal and people see you're a relevant player in that area?

Andy, give you costs first. I'll do 1 and 3.

So I mean, cost -- we gave you the amount of price contribution to revenue growth this year, Rob, roughly 1.5%, more than 4%. And I think in the past, we've talked about it being there or thereabouts, 1% in most normal years with the exception of those couple of years where supply chains went a little bit bonkers. So actually, what does that tell you? It probably means that we've done largely the same approach that we've adopted before, which is to be forward-looking, to be proactive, to have good -- what we always try to do, of course, is to have good forward visibility of what's coming down the track so that we can then respond and react sensibly. What do I mean by that, having the right amount of safety stocks and inventory in the facilities, having forward order placement with our key suppliers that gives us maybe as much as 9, 12 months of reasonably good certainty about where those costs are at. So that if things do change, they don't change on day 1, and we've got time to adjust and adapt in terms of our pricing. So I don't know how other people approach it, but we sort of -- we don't have a global mantra of saying x percent across the board because the circumstances and the requirements are different market to market. But I think the test case is being really close to our margin performance, looking at the data all the time and going, have we done the right thing? And if we need to adjust, we adjust. So I don't think there's been any change to it in terms of approach or strategy.

I do 1 and 3 together because I think they're quite nicely related. I think it's fair to say that a lot of our M&A is opportunistic and opportunistic, not in the sense of do we want to acquire these opportunities. It's just timing. It's a conversation we have with the Board on a regular basis. It would be so much easier if we could build a time line over the next 5 years and actually put in the dates at which we'd acquire these opportunities. And you've only got to look at the last couple of them that we did. getAir, I said at the beginning, was an opportunity that we actually got close this in '23, and then it didn't happen. And then -- and of course, there is competition. There is competition for these assets, although I would say that I think we're not paying the highest price necessarily for the asset. There are other factors at play why I think that AC, it was about continuing the growth trend in an environment where they felt they could be supported and have the opportunity to keep going. So it's very difficult to say this is where we'll be, but we do like the diversity. We have entered some new markets with an air quality theme that we like, and we do think that, that opens up much more optionality in the future. So in actual fact, one of the questions that we often have is, can you -- of course, if you're going to continue to compound at 10% plus growth rates, M&A is an absolutely integral part of that story. I'm not concerned about whether or not we can continue to consummate deals at a similar rate proportionate to our size in the future. I think having a -- by definition, the residential ventilation markets globally are smaller than the commercial industrial market. So that opens up more opportunity. And indeed, with AC Industries, what we're seeing is if you think about sort of secular growth trends, we often talk about energy efficiency and carbon emissions, but there's also a really important issue about health and about filtration. The reason why ventilation in mines is really important is it's a really onerous environment. We are still putting charges at the mine face and blowing them and having to have refresh and recharge rates to get back in the mine. We recently -- we had the Board visit in May, and we went to a fire station in Melbourne, where we are providing and rolling out now a ventilation system for the fire stations because of diesel particulate and so forth. So there's lots of different secular growth trends that we'd like to tap into. So there is a degree of opportunity, if you like, or opportunistic behavior. But I suspect over time, because there are more opportunities in the residential and industrial market, it's likely that we move in that direction just simply because there'll be more opportunities to deploy capital. You look at the residential ventilation space, it gets harder for us in the U.K. now. I think it would be hard to do a big deal in the U.K. I'm not necessarily saying that we couldn't do bolt-ons just because of our share. But there's still plenty of places in Europe where we're underweight, and we think that we can add value.

It's Jamie Murray from Bank of America. So you flagged -- I mean great results, firstly, but you did flag challenges in the U.K. new build residential market. It would just be good to hear your thoughts about what do you think could be done to get that market back up and running? And if you have any thoughts about the YFH, your first home initiative.

We need to extend the meeting to [indiscernible].

And if there's anything else in the budget that we should look out for that could benefit you guys.

Look, what are we seeing? If you look at the market dynamics, are we at the low point? Probably. Maybe that low point, we've gone past. There's so many different factors here. We had -- or was it -- I forgot the name, planning over Gateway 2. Thank you, Lee. Gateway 2. I know there was a reason for Lee being here. Gateway 2. So Gateway 2 was a big issue because of planning in high-rise. And that was a big issue for us because of central systems. You typically wouldn't build an apartment now without MEV or even MVHR. So we think that from our perspective, Gateway 2 is starting to release some opportunities, and that will be helpful. So we may have gone through the worst pain point with respect to high-rise. Then from our perspective, if you look at the volumes and debate where they are, there are certain aspects of our market that aren't so acutely impacted by how many houses we build. Student accommodation is still very robust. We do well there, we lead. I think retirement homes is a little bit more difficult, and that's back to the equity release issue. Typically, back in time, it was if you've got a good, strong new build market, people are equity releasing, they're moving up. You move towards retirement, you release your equity and you go and buy a retirement home. And that's been more challenging. But I think, again, it's been challenging for the last 18 months to 2 years. Does it get any worse over the next 6 to 12 months? I'm not sure. So I think our sort of working assumption on residential new build for us is it's not going to get any worse. I do think -- and I want to be mindful of not giving too much of an advantage to anyone else. I do think there's some share gains that we can make and underway. I do think our technology and some of the innovation that we brought to market around low-carbon products will be really helpful and carving out share gains. And for us, of course, what we always say to people is, don't blame the market. The market will be what it will be. We can't make housebuilders build more houses. That's something we can't do, but we can help them choose more of our ventilation solutions. There's quite a lot around overheating in the summer. I think that would have firmly focused that in people's minds. We're not an air conditioning business, but we provide comfort cooling. We provide products that deal with part of the building regs. And I think you'll see an increasing focus on that for very obvious reasons. We've had 2 very hot summers now. Is this the new environment that we're living in, we're part of the solution. So look, as part of the sort of wider what do we think on the U.K., we told you where the first couple of months are. We don't think the U.K. for us gets any worse, and we're growing organically as a group, and we're still in go-forward mode. But I think it will be challenging. And I don't see -- I'm not forecasting in the next 3 or 4 months, it gets materially better. I suspect post budget, there might be just the fact that we've had the budget and the uncertainty goes away in itself will probably be helpful. And the other one that we're not sure of at the moment is just how much of an impact there was on RMI demand over the last 3 or 4 months because of the heat. I don't know if you've been in your office space in the middle of summer, but it's pretty hot and pretty difficult to work in. And you hear from contractors that there's work that they would come back to later. And I came in this morning a little bit chillier. We're moving into autumn and winter. So I think that summer and so forth wouldn't have been helpful. But look, just to finish on our U.K. business, big improvement in operating profit margin last year, good trajectory coming out of the year into this year, probably a little bit more benign around inflation impacts and risks. So we don't see an immediate risk around pricing or margin or a need to necessarily increase prices as we sit today. Pretty much where we are is baked into our thinking.

Clyde Lewis at Peel Hunt. I think I've got 4, apologies guys. Andy, probably the first one. The inflation, the 1.5%, 1.4% that you're talking about, is there much difference regionally in that number?

Just for Clyde [indiscernible].

Okay. Following on, on the U.K. question, I'd be interesting to hear a little bit about where do you think the public sector is around the RMI drive and obviously, all of that humidity and damp issues. The U.K. commercial, what are you going to do to actually sort of start growing that business again? Obviously, it's partly the market, but obviously sort of where are the opportunities for you, I suppose. And I've got to ask, obviously, on the data center stuff. You've dangled it out there. Are there products that you're making in Oz that you can actually start to ship into the U.K. or the European markets and maybe try and enter that this side of the globe?

I will take the first one and take and Ronnie can take [ else ]. So I think in terms of the number region to region, it is different. And why is it different? It's different because the cost impacts have been different because the margin profile of the products that they're selling are different and there's some competitive behaviors are different. So I'll give you an example. ERI selling aluminum heat cells, that is a competitive market. And of course, there's a sensitivity to the aluminum price and input cost that goes in there. We've suffered a little bit of margin deterioration over the last year or so, but that is -- we think that will come back. But there's only so much we think we can do because there's a very, very clear market price and there's competition. It's not that there's not competition elsewhere because, of course, there is. But no, I mean, I think the overall -- I suppose for us, the acid test is deliver margin. Each region has nudged its margin up. And of course, we haven't given you inside each of the European countries. But generally speaking, that's been the dynamic as well there that people have done the right things to largely hold or maintain margins. So as long as that's the case, Clyde, we're comfortable and we're happy even if it means that percent -- the right percent in country A is different from the correct percent in country B.

Just trying to get some numbers for you, Clyde. Okay. So public housing on public RMI. I think public housing is still 5 million homes, quality is still very low. I think we've said this is a multiyear issue. We did very well. I would say we've got some outstanding products, a product called Revive. I think iteratively, we developed it again over the last 18 months, made the footprint a little bit smaller. We've got some smarter connections now. We coupled that with a company called Switchee to provide data capture for the housing association. So I'm still really positive about social housing outlook. Funding is there. This is a social issue, and it absolutely needs to be dealt with. So one of our maybe stronger revenue streams and the outlook is still really, I think, quite positive. If you look at U.K. commercial, I was just trying to look at Construction Products Association, I was just trying to get my head around what happened there. So it sort of had, new build down 8%, RMI down -- sorry, 10% and 8%. So I'm not arguing that 9.6% down is the market, but the market was very weak. And there's almost some humility here. We stand up and we're really positive about our business, but it would be remiss not to say this is an area where we think we should be doing better, and we've discussed it internally, and we've positioned ourselves to do it. And I think it's one of those that once we build momentum in the space, it will run. So when we get the model right, and look, we've got some formidable competitors. I mean, Genuit bought Monodraught last year and they've owned it for about 12 months. And quite frankly, that's an area of the market that we should do better. So let's see how they integrate that opportunity over time, and let's see how we can do better against opportunities like that. So this is one that should become a growth engine for us. And just imagine we could get that growing well at a time when maybe residential new build and the U.K. market at large is doing a little bit better. So yes, so full disclosure there. This is one that we talk about a lot internally, and we'd certainly like to do better. If you talk about data centers more generally, the solution we have in Australia, I think I'm not a data center expert, but there's lots of different solutions, liquid cooling, air cooling. We have a very relatively simple solution in terms of -- it's like a big fan coil. So it's a chilling device where you blow air over the chilling device, big cassettes, very repetitive, but big volume. We've had our first order and we're in sort of a confidential discussion around future projects. And I'm not going to give you the numbers that they talk about for the next 5 years because I think we could get carried away with ourselves. But we're focusing on it. I mean it's slightly lower margin in terms of how we bring it to market. Can we transfer that technology to other areas of Europe? We did a little bit of data center business to a third party in the Nordics last year. It's just helpful. It is just really helpful. And you always worry about this because if we have a couple of 3 or 4 good years around data centers, it's what comes beyond it. And we're absolutely not trying to pivot Volution towards being exclusively focused on that area of the market. It's additive. It's helpful. But we're not hanging our hat on this is where we go in the future and some have. There are some names out there at the moment. You'll know who they are. We'd like that wider proposition. How do we -- if we're still here in 5 or 10 years' time standing up presenting to the results, say, we've just continued our 12% compounding CAGR of earnings. And so we need lots of things that are growing well rather than necessarily betting the ranch on one opportunity. I hope that helps. And you were here at the first results presentation. So you've listened to all 25 of them probably. But anyway.

Richard Farrell from Jefferies. I've got 2, if I can. And the first one, just looking at AC Industries, could you give us a bit more on how you're going to internationalize that opportunity and what you put in place so far? And then just a second part to that one. Strong first 6 months. How does that look when you consider the contingent consideration in the back of the -- in the back value?

The current -- the contingent consideration is in 2 tranches. There's the first smaller piece, which is measured in 2027 and then the larger, that's about AUD 9 million. And then the larger piece, $20 million is 2029. Just to context it, to earn 100% of both of them, they would have to get to AUD 30 million of EBITDA in 2029. When we bought the business, it was AUD 17 million. So that's the growth that we sort of target into it. So our current -- when you sort of noodle through the notes to the accounts, we've effectively assumed that we're going to hit the 2027 one because that's reasonably foreseeable. And at the moment, we've got a reasonably high proportion of the 2029 one that we're assuming is going to be hit as well. So we think that it's -- we'd love it to be max because that's the best check to [ rewrite ] because it tells you what the business has done. But yes, we're assuming it's going to do well, and that shows the growth.

If it gets there, it would be 6x trailing is the purchase price. So cracking deal and back to sort of capital discipline, that's where we want to deploy our capital. So the international growth piece is really interesting because when we were acquiring it, it was already underway. And we did a considerable piece of due diligence commercial that we don't normally do with M&A. So when we bought getAir in Germany, we did no commercial due diligence. We're now the leading proposition for decentralized heat recovery in Germany. Why do we need to do due diligence on a market we know. But we didn't know the mining customer base. We didn't understand the lifetime of mines and everything else. And we put quite a bit of color in previous presentations on AC, but it's already growing in those different areas. I think the bigger issue for us that we need to address is the sort of key man or key team risk. The earn-out is great because we think that gives us a degree of security. But what we have to do is to build the resource and the team behind them. And that's frankly why Andy and Lee and I are going out and supporting Anthony, the local Regional Managing Director. It was us that sat in front of the ex-owners and convince them that it should come inside Volution. But now we want to encourage them to actually put a bit more resource in and build a stronger, wider team. That, I think, is the bigger challenge for us, less so do I think that they're going to grow internationally? They already are. And we haven't given you any color here in terms of exactly how it's growing on the prior year, but it's above our range. And of course, we look forward to showing you that in the second half of the year as it starts to become organic.

And just the kind of second one, you kind of mentioned it there, decentralized heat recovery, Continental Europe. You called out that you had a strong fourth quarter. Could you just kind of break that down into how much was internal actions in your half market? And then obviously, with getAir as well, where do you see that going?

Yes. Interesting question, how to sort of split what we brought to it and what -- look, in ClimaRad, we had a really strong revenue growth in the Netherlands, and I think it's absolutely about the proposition and the sales process. And we often talk about sales process in our group. And we're big on sharing best practice around innovation and around procurement and so forth. But I think there's probably more to do around selling best practice. ClimaRad have got a really well-executed machine. It's a project business. I think the way that they use CRM and they track these things is really good. So I'm confident that we're growing significantly ahead of market in the Netherlands. In Germany, InVENTer, we've alluded to, we actually changed the leadership about 6 or 7 months ago. We've moved -- I haven't really talked about it at length today, but if you do get a chance in the prelims, quite a lot around our regional focus and how we've got 4 regional leaders now. And I think we've just got a stronger team in Germany in InVENTer and getAir coming in will be part of that team. Martin is already working on a more consolidated approach to innovation, and you see for us, and I'm not -- this isn't been critical of others on M&A and how they integrate, but we have a really fundamental view on acquisitions and how they come into the group. And that is -- what I don't want is 31 deals and 31 managing directors, all doing their own thing because for me, that is just a portfolio of operating companies. What we actually want is some scale benefits and some joined-up thinking. So getAir is an OEM proposition in Germany. There's lots of heating companies in Germany that are decarbonizing, moving to heat pumps. And as part of their proposition, they go and see customers and say, "Hi, you want a heat pump and you also need some decentralized heat recovery." So we've chosen to be in that market through getAir. What that means is that there's a leg of the market that we can't be in with our own brands, but we can be with the OEMs. Now you might say, but what if the OEM does it themselves? You look at these large heating groups in Germany, they're not interested in developing a few million euros of revenue of heat recovery with the widest product and best portfolio in the market. So it's a really good honest partnership. We can go to them and say, we want to be your partner in that space. It's complementary to the project business that we have elsewhere under our other brands. And we're really excited about it. So it's a great acquisition. The integration is underway. It's only a couple of months in. And I think it will be really exciting for us, notwithstanding the fact InVENTer actually started to perform, and we alluded to it very well over the last 4 or 5 months.

Ben Varrow, RBC. Two, please. First, on the targets, so margin and returns, both comfortably ahead, I suppose, how do you think about those shaping out over the next few years? It sounds like you've got a bit more to do on margin. Next one on leverage. Where do you see that shaking out to at the end of the year? And how should we think about headroom for M&A from here?

Ronnie, I'll take both of those. So we've had the targets question quite a few times and even change them. I think the returns on invested capital, as you saw there, it was 27%, 28% 3 or 4 years ago. It's now sort of 25.5%. But in those last 3 years, we've been very, very acquisitive, and we want to carry on being so. So actually, if we can keep up same or very close to pace of M&A and retain those margins there or thereabouts in the low 20s, we're delighted with that. So our target of 20% and above, I think, is absolutely valid there. It wouldn't be valid if we stopped acquiring, but then the whole business model changes. So on the premise of acquisition, we think that target is right. The margin target is something that we do keep getting asked about because our stated target remains 20% and above. And as we showed, all 3 regions are above that, and we're continuing to sort of eke out the organic opportunity. So again, boring answer, but it's one I've given before. This is not us saying it's going to come down to 20%. It's also not any lack of ambition or saying we've run out of ideas. But I think we just believe that there would be no benefit from restating a new target [ band ], I mean you guys might model something slightly differently, but you can do that anyway based on what you think is going to happen. But internally is, I guess, what I'm really talking about I think we've got it in the right spot right now in terms of margin awareness, margin attention that people know to focus on all the small things, but they also know that it's about a long-term play and doing the right things for the long term. And the danger -- if you said, I don't know, 23%, 24%, 25% target, you might drive in some sort of short-term cost saving behavior, which isn't right for the long term. So that's still our judgment. But it's not -- but absolutely, it's not about feeling it's going to drop down or taking foot off the gas in terms of the opportunities. Oh, leverage. I'm sorry, yes, yes. So we showed you where we were right now. And of course, the movement in this -- in the year just gone was in the context of spending GBP 105 million kind of on M&A. So what we say is crudely, if we had a year with 0 M&A, and we don't want to have one, but if we did, we would delever about 0.5 turn per year. So the cash generation is very, very consistent, very reliable, and that is what fuels the opportunity. So we've always said we -- if we did deals that took us up to 2x, 2.1x on acquisition for good cash-generative businesses that bring it down the other side, we're happy to do that. So getAir, we took us to 1.8. If we did nothing else this year, we probably end the year at 1.3, 1.4. So that gives you more than half a turn to play with still.

And then Toby had a question [indiscernible].

A couple of supplementaries on the U.K., please, for a slightly longer-term perspective, but apologies if there's any repetition here. So on a 5-year perspective, all the growth in the U.K. has come from residential, which I think is interesting in itself. Exports up a bit, commercial and Torin-Sifan are down. Just interested to know on that basis, where you think the market position is in the U.K. now compared to 5 years ago because that's an unusually big residential increase over that time period? That's the first question.

Yes. Okay. Do you want to ask all of them just in case [indiscernible].

Yes, sure. I guess the supplementary to that bit is what do you think the mix looks like in 5 years' time? You've sort of spoken about the commercial a little bit. Also in the U.K., gross margin increase, but that was amplified by what looks to be a reduction in OpEx over the year. Just wondering if there's anything structural in there that we should be aware of? And final question in Continental Europe. Just wondering, there's a small gross margin increase there as well. Just wondering if there's any sort of reinvestment further down the P&L in the OpEx line that stopped that dropping all the way through.

Okay. I've got it. I'm glad I asked them all at once so I can bring them together. So U.K., there's a couple of things that happened in the U.K. that have meant the residential has grown significantly. And I think regulation is a huge part in that. So Lee chairs the BEAMA Ventilation Committee. I won't ask him to come up and talk to you about it, but we could tell you we know what's happening in this space. We've innovated in advance of where the regulations moved to. There's a sort of an expectation about where we're going to go in future. And it's our job through Lee and the wider team to make sure we understand it and then to innovate ahead of it. So one of our fastest-growing products in the U.K. in the new build space, we developed in 2022. And we were talking about the other day, and we were talking about the volumes that we sold in the first couple of months, and we went, is that it? And now it's very significant. And the reason is we got there first. We had that first-mover advantage, but it was actually a very, very good solution, specific fan power, noise and cost. We're absolutely paranoid about cost. I say it with Martin in the room, and he knows it anyway, but we're absolutely paranoid about cost because this is a competitive market. There are other people out there. There are very good competitors in this residential space. So if we're going to have a bigger share as we grow, we've got to be able to bring not only a compelling solution to our customers, but one that they're prepared to pay for. And there's others that I think do elements of that, but you've got to do both of it. So I think we're predominantly from an organic perspective, going to be this sort of split. I do think there's some commercial add-ons that we could do, and we started to think about them a little bit more, but we won't rush. And all I would say is although we're talking about the complexion of the business, OEM and commercial being maybe broadly similar, the level of profitability that we deliver from those revenue streams is significantly higher. The operating profit in the year was circa GBP 50 million. And if you go back, when we listed the group was circa GBP 20 million, including some overseas activities, but it was mainly in U.K. It's been a very, very exciting journey. Gross margin, I think it's operational excellence and efficiency. I -- we had a good year in the U.K. in '25. My sense was that we weren't as efficient as we should have been. And we doubled down on those efficiencies in '26, although we also took on an additional building that we paid for and expanded the operating profit margins. The new facility at Dudley that we had a full year of lease costs in '26 that we didn't have in '25. And then just more generally about investment, our biggest investment that we make is primarily in products, in tooling and in R&D and in products. It is a relatively CapEx-light model. We don't have an ambition to necessarily own our facilities. So quite a few of our facilities are leased, and that's fine. That gives us some flexibility for the long term. So the business is actually investing quite a bit. I alluded to some of the things that are underway at the moment. We bought the facility in North Macedonia because we couldn't lease it. We're spending a lot of money on expanding it at the moment. And quite frankly, our ambition for ERI, Energy Recovery Industries over the next 5 years is to double the revenue. Now that's not a new target that we're necessarily going to guide to, but that's the ambition that we're working to internally and is driving the sort of investment decision. And it's back to Andy's point on margin. We don't set margin targets for the sake of margin targets. What we do is we look at what's the art of the possible. And it's also when it comes to pricing, and I talk about our pricing being value-based, what is the value of the proposition that we bring to the customer and how much are they prepared to pay for it? That's really important. And that's probably slightly different for our industry because it quite often ends up being cost plus and so forth. And for me, it's about -- if we do a really good job innovating, we have great service and the customer is prepared to pay x, that's what they'll pay. And if you look in the U.K., as I say, lots of formidable competitors, but we're able to eke out share gains. And that's not because we charge necessarily more than anyone else, but we create more value when we do it. We're just coming -- yes, okay. Do we have any online at all? Just...

A couple, online.

A couple. Okay. We're okay to carry on, please.

It's Rajesh Patki from Barclays. I've got just one remaining. You've talked about diversification away from the U.K. into Europe and Australia over a number of years. Can you talk about incremental thoughts on potentially expanding into the U.S.? Or are you content with the opportunities in the existing regions for now? Also, if you've taken a look at any targets, what do you see as the key constraints in the U.S. from an M&A perspective?

I mean I'll answer it more sort of holistically, I think, Rajesh. So look, we think diversification is really important, and it's about expanding access to the market. It's not just doing it for the sake of it. It's because if we just stay as a U.K.-only business, there was a limit to obviously where we could sell into and how far we could grow. So it's all about the market access, the growth opportunities. Our judgment still is that at the moment, the 3 markets, Ronnie talked about making choices earlier. The markets we've chosen were deliberate and are deliberate because we think there's a product overlap and product sharing opportunity. There's an organizational sort of efficiency opportunities. So we think that these are still good choices, and we think there's a lot more we can do in all 3, but particularly probably in Continental Europe from a market share perspective, but selective in the other 2. And when it comes to the U.S. or other markets, we also have quite openly said we are opportunistic. So we're not going to say no, never, and we must do X or we're not going to do Y. Our judgment, though, is that almost certainly at the moment, we'd have to pay more, we'd have to buy bigger, the sharing of the synergies and benefits are less certain. And so back to that importance of returns. At the moment, our judgment is it probably wouldn't offer the same return outcome as the existing markets would. But we'll keep learning, keep observing and be opportunistic in case something ever did pop up. But it's not a -- we must be there or we must be there. It's all about that returns piece.

It's a great question because I don't want to be controversial, but ratings, if you look at some of the U.S. [ CVAC players ] that may or may not be delivering a similar trajectory of performance as us and ratings versus where we are. That's probably a debate in itself. As Andy says, for us, it's the synergies and the route to delivering. If you take AC Industries, it's a step out from buildings into mining ventilation. I don't think we'd have done that deal in Australia if we weren't in Australia because we want to bring some competence around it, some governance, some management, some security. And the thing is, although the U.S. is a big market, it's not driving energy efficiency in the same way as maybe we see in Europe. But look, as I say, Volution has got a huge runway of opportunity many years into the future. And at some stage, we might be standing up here saying we've done deal #53, not 31, and we're running out of opportunities in our chosen markets, and there's a step out. But I think it's about returns. And if you look at AC and the returns that we'll make there, I'm confident we'll get there as well. They're stellar and there's a risk of dilution, I think. No more in the room. I just see if we've got any...

Just a couple online from David Farrell, Jefferies. You've touched on the growth -- international growth on AC Industries, but can you expand on what international infrastructure you might need to drive the growth? And second question from David. How do you see the interplay between ventilation and cooling solutions?

Okay. I can do both of those quickly. So I if you look at AC Industries and the proposition, the nice thing about the solution is because it's a HDPE, high-density polyethylene textile solution, it's actually flat pack. It expands in the mine when it's under pressure, it charges at 4,000 pascals, but we can actually manufacture and ship anywhere, and we're already doing that. So I think the sort of infrastructure would be if we grew significantly ahead of our expectations, there'd be a factory capacity challenge there. And then it might be appropriate to manufacture these products closer to the market. But our logistics costs are probably only about 5% to 6% of revenue and the advantage of scaling up our existing Sydney factory, which is what exactly what we're doing right now works. The rest of the infrastructure is more about selling expertise closer to the customer. So I think we'd like some more selling expertise in those local markets rather than having to fly all over the world. So I think a relatively light touch. If we did need a new factory, it would be a fantastic outcome because of the growth. And then the other question was on -- and I've forgotten, I think.

Just on interplay between ventilation and cooling.

Yes, [ interplay ]. Yes, okay. It's a really good -- it's a good question because we -- air conditioning is the only way to properly cool a hot property in the middle of summer when it's 35 degrees outside. You'll never get to the sort of cooling that we can provide, but it's expensive. I was talking to somebody the other day, said, "I run my air conditioning all night." I said, "have you calculated how much it costs?" So it's GBP 12 a night, GBP 360 a month, and they fell off the chair. It's expensive. These are products that consume a lot of energy. They're expensive to install. And so what we're seeing is sort of ambient type cooling or free cooling, and we see that. And it already happens in schools in the U.K., there's something called natural hybrid ventilation. And what happens in the summer, we have some quite sophisticated control strategies that bring in all the cool air from outside overnight, you bring the temperature of the classroom down to 17, 18 degrees in the morning and then you're less likely to overheat through the day. So ventilation and cooling are absolutely entwined. And I think that's a greater opportunity for us. And maybe we don't talk about it enough, but we have a lot of solutions at the moment that provide ambient cooling, some are bypass in mechanical ventilation heat recovery units. Part O, we have cool box products in the U.K. that we sell to developers. So yes, so the overheating risk is a tailwind opportunity for us in ventilation. Okay. So -- sorry, we went over, but great questions. And just to finish, we're really excited about our results and equally optimistic as ever about the outlook. And thanks to all of you for giving up your time this morning to come and see us. Really appreciate it. Thank you.