eEnergy Group Plc (EAAS) Earnings Call Transcript

Good morning, and welcome to the eEnergy Group Plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to the management team. John, good morning, sir.

Well, good morning, everybody, and welcome to the eEnergy H1 2026 Interim Results Investor Presentation. I'm joined today on the presentation by Akash. Akash Harnal has been in the finance function for just over 2 years. And following some of the changes, which we'll talk about shortly, Akash has joined the senior leadership team and is now the Finance Director. I have retained my CFO role as well as acting as the interim CEO role. It's obviously been a very busy period, and it's been pretty turbulent. But actually, we feel that we really are now turning the corner and things are beginning to look up for us, and I'll be going through some of the details shortly. So on the H1 results summary, we had record revenue in the first half of GBP 21.8 million. Revenue more than doubled from GBP 10.1 million the previous year. Adjusted EBITDA was GBP 1.2 million. Again, EBITDA, I think, more than doubled from the first half of '21 -- H1 '25. Gross margin was lower than we were expecting. We'll come on to the real reasons for that and explain it. Effectively, gross margin was 17% against sort of 30.6% last year and was lower mainly due to the impact of the Mace project. The Mace revenue was around circa 70% of the total first half revenue. We incurred GBP 0.5 million worth of unrecoverable Mace contract costs because there was a 6-month time lag between award and actually start on site, and it was a government contract pretty much on sort of take on EBIT terms. That's not normal for us. We're normally able to pass on increases in product prices if there is a delay between award and start on site. So we end up incurring a hit of GBP 0.5 million of unrecoverable contract costs. And also, we have to remember, we expensed GBP 600,000 of the contract asset, which we booked in the second half of last year. So effectively, those two items together reduced gross margin by around 5%. So gross margin would have been in the low 20s on a statutory accounts basis, had we not had those two items. Cash was disappointing. It was just GBP 600,000. The previous year, we're at GBP 3.1 million. The cash flow was definitely hampered by a number of factors, principally around the Solar PV paperwork compliance. This will come as a surprise to investors and it was a bit of a surprise to us. But effectively, almost all of the Solar PV work on Mace had been completed by the end of June. But unfortunately, we had not kept the paperwork compliance in good enough order. And therefore, we are waiting to invoice. And as we'll explain later, there was around GBP 4.8 million of Mace cash, which was yet to be invoiced and collected effectively at the 30th of June. So this cash will be received in the second half of 2026. Following my appointment as the interim CEO, we launched a cost-saving exercise pretty quickly. The impact of this exercise will save an annualized GBP 2 million in costs. There's an anticipated benefit of around GBP 1 million in the second half of this year. So that work commenced in June and was effectively completed by the end of June. So I've been in position now for 11 weeks. There's been a lot of change in the last 11 weeks. And we've been streamlining the SLT and streamlining the operations of the business to reduce costs, and I'll give you some more details on that shortly. As a result of the changes we made, we booked a first half one-off restructuring cost of GBP 0.5 million. But effectively, we're already seeing the cash and the profit benefit coming through as a result of the changes which we've made. One of the other major changes, which I've implemented is I've reorganized the sales and marketing team by sector because previously, the sales team was set up by [ Post Code ], which didn't seem -- which wasn't optimized. And I've also put it under new leadership and with one person managing both sales and marketing, where previously, we had different people managing both of those functions. And so they're now much, much more coordinated, which is great. The pipeline is around GBP 66 million. These are investment-grade opportunities where we have outbound and inbound comms with the customer, and we're working to try and close those opportunities into revenue in the balance of this year and into next year. The contracted revenue for the second half of this year is GBP 5.5 million. So that breaks down as follows: GBP 3 million of signed contracts at the end of June. And in July, we signed GBP 2.5 million worth of business. We signed another GBP 100,000 this week, which is great. But effectively, for the balance of the second half, GBP 5.5 million of revenue is already secured, and we anticipate that, that revenue will be delivered in the second half this year. As we sit here today, we continue to trade in line with FY '26 market guidance, which we revised on the 22nd of June of this year, which indicates revenue of around GBP 32 million and adjusted EBITDA of GBP 1.7 million. So just to talk about the cost-saving exercise, effectively, we had a management team of around 10 people often attending meetings regularly on a sort of weekly, monthly basis, but I've reduced the team to a team of 5. So the management team was effectively set up really for probably a business around twice the size that we actually are. So we had -- used to have an enormous number of people sat in meetings. Even the cleaner was in the C-suite is sort of one of the jokes we talked about internally. But effectively, we've reduced the management team down to 5 now. So we've created operational team across all technologies under one Chief Operating Officer. So Chris Poulton now runs lighting and solar, which has brought control over the CV and battery business back into head office as we had with the LED business. So Chris is getting his arms around all the paperwork involved with the Mace project. The Solar PV project managers now implement decisions made centrally. Historically, they were working more remotely and making decisions. But actually, we've brought the authority and the decision-making back into the head office, which has given us much more control around no PO, no go, which is an instruction we've given out last year around not found suppliers, not actually doing any work until they've got a signed purchase order from us. So improving discipline, strengthening controls, and it's making a big difference already. And also, we've now got one project manager effectively responsible to the customer for each of the revenue streams which you deliver. What we used to have, and we sort of saw this on the Mace, is on Monday, the solar project manager would turn up traveling across the U.K. to arrive at the customer. Then on Wednesday, the LED project manager would turn up traveling across the U.K. to meet the customer. And then on Friday, when we're talking about batteries or EV installation, another person would turn up. So effectively, we've made this -- made the delivery of the -- of our services much more customer-centric. So there's one person responsible to the customer for delivery of all of our activity, which massively reduces our cost and simplifies our delivery of the project. It's all going to 1 person, not 3. And also the customer uses it much more favorably because they've only got to communicate with one person, not several. There was quite a bit of sales and marketing activity, which was outsourced and I brought it back in-house. So this has helped reduce the cost and get us closer to the key actions and activities that we're doing to try and drive revenue. We've also moved offices in London. So literally, we've moved across the road to a slightly smaller and cheaper office, which is great. And we've just taken a much, much tougher stance across all areas of expenditure across the business where we were spending too much money in a number of areas. We've just cut that right back. So the Board has reduced from 6 to 3 directors now. So that's also a cost saving for shareholders. So overall, yes, GBP 2 million annualized cost saving with an expected benefit of around GBP 1 million in the second half of this year, and that work is now done. So I've now moved away from moving on and away from the cost-saving exercise to now making the changes stick as part of the senior leadership team and to now focus my efforts on new sales. So as I mentioned before, we've reorganized the sales and marketing team by sector. So effectively, we serve 3 sectors, education as being our principal market and of course, NHS and then what we call C&I, which is the commercial and industrial space. So historically, the sales team was organized by [ postcode ]. And so when people woke up in the [ postcode ], they were responsible for all of those customers in the post code. Restructuring and reorganizing the sales team by sector makes so much more sense to me, and sales team reacted really positively because they see themselves as education, health care or C&I. So that makes sense. We've introduced a new sales process, which looks the probability and the likely timing of converting pipeline opportunities into revenue. This has been the Achilles' heel of this business historically. I'm pleased to say that in July, for the first time in a long time, we actually achieved -- the sales team delivered the revenue forecast for July, which is really pleasing. And so one of the changes we've implemented is we reclassify a lot of the opportunities into three buckets: commit, where effectively we're really sort of 95% confident the customer will sign the contract; upside where, yes, there's a good opportunity, good chance that they will, but we're working to try and drive upside into commit; and then, of course, pipeline, which is we've sent the customer an investment-grade proposal typically, and we're then working through that and answering customer questions and trying to progress it into upside and commit. So there are now clear and unambiguous criteria to forecast revenue in each category. I look at it every single week now as the interim CEO. I see all the detail, and the sales team are now doing a great job using the information in Salesforce to slice and dice the data in such a way which makes it understandable. And we're looking at the same data in the same way each week, what is not measured is not managed. And I'm really pleased with how we've progressed really quickly the change in the sales team to try and increase the accountability of the business to achieve the commit sales. So we've got mechanisms now to track opportunities through to pipeline into upside into commit. So marketing is now much more focused on lead generation than the brand. I think historically, we did a good job trying to develop the [ eEnergy ] brand. But effectively, what I'm really interested in is lead generation. And that's where my focus has been probably around 60% of my time now is spent on lead generation and new sales. We're also introducing AI in a number of areas. We've got AI, which we are taking the data out of Salesforce using AI, which is [ clay ], effectively to validate and improve and scrub the data to make it better, make it more accurate, which will allow us to improve the targeting of our customers as we pursue sales leads, which is really good. We're also using an AI tool around solar desktop work to try and quantify what the savings to customers will be, which is a really quick way of getting to sort of an accurate starting point to have to engage with customers. We can do it live. It literally takes less than 60 seconds to enable us to be able to assess and measure very quickly and provide details to customers for their solar desktop work. I've also introduced a stronger focus on customer and vendor interactions. So one of the things which is really important is that I've insisted that customers, if they assisted to the stuff, if customers are calling or vendors are calling us, they take those -- individuals in the business take those phone calls even if they're in an internal meeting. It's our customers that pay our bills, and we have to work closely with our vendors. So I'm sort of prioritizing interactions with those two groups. Even if those people are in the meeting with me, which causes some use sometimes people, please step out, take the customer call, take the vendor call, and we'll make sure that we are as responsive as we possibly can be to our customers and our vendors. I'll now hand over to Akash, who will just quickly run through a summary of the H1 '26 financials.

H1 '26 saw us achieve our record revenue of GBP 21.8 million in comparison to H1 '25 of GBP 10.1 million. For the whole of 2025, we achieved on average GBP 1.6 million of revenue per month to get to the GBP 19 million full year number, whereas the first 6 months of this year, it was just over GBP 3.6 million, which contextualizes the improvement. 70% roughly of our revenue related to the Mace contract, which again underpins the strategic importance to the performance of this year. Adjusted EBITDA was GBP 1.2 million, which again was an improvement on the GBP 0.5 million compared to the prior year, although we would have liked that number to be higher. The gross margin was 17% compared to the restated H1 '25 margin of 30.6%. And the Mace project was a reason behind this. We had to go in a very competitive margin in order to win the work, which was one of the factors. But another factor was that there was a 6-month delay between when we were awarded the contract to start on site. And in that time, there was a surge in the panel prices, which was circa GBP 0.5 million. Usually, we have provisions in our contracts to deal with this, but because of the tender, the contractual terms were pretty rigid. Therefore, we could not reflect this in our ultimate selling price. Moreover, there was a GBP 0.6 million noncash charge for a contract asset in H1 '26. This related to costs that we had incurred in Q4 of '25 in order to mobilize the Mace project. The amalgamated impact of these two things is that gross margin reduced by circa 5%. So if you were to allow us to add the back, the gross margin actually stood at 22%. Further to this, as a result of our accounting policy change, we can now attribute staff time directly towards department. And this means that we recharge into cost of sales. And the cost in H1 was GBP 1.2 million, again, in relation to the higher levels of activity associated with the Mace award. This also reduced the statutory margin by a further 5%. The [ PRC ] costs held at the same level as last year, which was the GBP 0.9 million. And the total overheads reduced by GBP 0.1 million. So they were roughly in line with the prior year, but the cost benefits we should see will really materialize in H2. The closing cash position in H1 '26 was GBP 0.6 million. And the main reason for this is that GBP 4.8 million of the Mace cash that we had expected to receive in H1, we will now be receiving in H2. The reason for this is that the construction was very fast pace and the paperwork could not keep up with the pacing of this. But we are working with the Department of Education in order to expedite the process of us accessing this cash. And with it, we will pay down our trade creditor balance as well as the remaining GBP 0.5 million in the Harwood loan. Of the Harwood loan, we did repay GBP 0.5 million of it already, and we have extended the term so that the balancing figure will be repaid in November. The cost-saving exercise, which was undertaken in H1, which will be a GBP 2 million annualized benefit; we'll really see that impact in FY '27 fully. However, in H2, we will see GBP 1 million of that benefit. And we're already starting to see from a cash perspective, the benefit of that starting to materialize. Moreover, in H1 '26, there was a restructuring cost of GBP [ 7.5 ] million in order to progress with that cost-saving exercise. Regarding the outlook for the rest of FY '26. So there is a GBP 10.2 million revenue bridge, of which GBP 5.5 million has already been contracted. We expect to deliver these projects in H2. And therefore, that leaves a GBP 4.7 million [ cap ] remaining. We have been making positive inroads towards this, and we are looking forward to hoping to realize this.

Thank you, Akash. So the all-important summary outlook. So we can see that legislation continues to drive revenue growth. And later on in this presentation, there is in the appendices, we set out a summary of some of the key legislation that is driving activity in each of our core markets. Later this year, we are seeking to secure a share of GB Energy's 3-year partnership, which was delivered through Mace this year. So we should remember that the reason why we went in with Mace at a very competitive margin to secure it is it was the first of what we knew was likely to be some very sizable awards from the government into our sector, of which we were 1 of 3 delivery partners. So we are positioning ourselves hopefully to win a chunk of that work going forward. The government is talking about 500 schools compared to the 250 schools, which the project involved in 2026, of which we secured 65 sites for solar. So we have around GBP 15 million worth of revenue this year. And it wasn't just solar, we ended up with a very sizable LED EV charger and battery portion of installation as well, which is great. So that's exciting, and we hope to hear later on this year as to what the government's plans are exactly and who -- we will obviously tender for that work, and we will see whether we win it or not. In the NHS, we've already got a couple of trusts taking our sort of private finance EPC contract, which allows the NHS to use third-party private sector finance to fund solar and LED installations in the NHS sector. So this is a very significant development for us. [ Redaptive ] is our sort of key funding partner and are very supportive here. But I think this could be a very, very sizable sector for us going forward. This is -- it's an area where, obviously, again, structuring the sales team into individual sectors has allowed us to provide greater focus on making sure we can secure our rightful share of NHS. Longer term, I think the NHS market could actually be bigger than education for us because as we sit here today, the government has thus far not been using third-party finance. This is a very significant change in strategy for the government. And as we know, the NHS is quite strapped for cash. The third sector, which we are targeting is C&I. And specifically, we're trying to target owner-occupied buildings. And the reason why we're doing that is we then don't have to deal with the complexities around managing the tenant and the landlord. It makes life much easier. And also, there is legislation in 2029 and 2030, which the government have already published, which requires buildings to improve their EPC ratings, which they can do through the implementation of LED and solar. That will make a massive difference. As I mentioned earlier, we're also using AI to drive a number of the -- to identify the key customer needs, and that's proving quite fruitful, which is great. So sales and marketing has now been reorganized by market sectors, as we've discussed. We can see already we've got several multimillion pound sales opportunities for Solar PV. The issue is, of course, they're binary, you either get them or you don't. We're chasing those opportunities down and hopefully, a number of them will close this year. Most likely, we'll see -- we may not see so much revenue, particularly in the last couple of months of this year because it takes a minimum of sort of 2 or 3 months between contract signature and sort of working on site to be able to develop the revenue from that project. But we'll be updating the market later this year on how we're progressing, and we'll give a trading update here later this year. Towards the end of the first half, eEnergy was appointed to Everything Estates framework for Schools Trust and sort of the wider public sector. I think being on frameworks is really important to secure public sector work. We're also on 6 other major frameworks. There's quite a complex, convoluted buying process where when you want to secure work in the public sector, you have to have a framework to review your contract and ensure value for money, et cetera. But we're working with all the 6 major frameworks on a regular basis. And obviously, we've had work previously extensively approved for -- approved to progress the contract, which is -- which means that we've got good relationships with them, and we'll continue to work with them to get business across the line and so we can then deliver it as quickly as we can. But normally, typically, framework approval probably add another up to sort of 2 or 3 weeks into the timetable to -- before we're able to start work. And we're working through the GBP 66 million investment-grade pipeline. We can slice and dice it. It's sort of roughly sort of 50-50 between LED and solar. And we're working that through with the sales team to try and progress those from pipeline to upside and commit. So in summary, eEnergy is definitely going in the right direction. We've got a streamlined team of 5 now. I'm really pleased with how the team is working. Obviously, it's been through a period -- the business has been through a period of significant change, but the team has pulled together. I'm really pleased with how the staff have responded as well. It really feels like we're all pulling together and going in the right direction. We strengthened the controls now with sort of one business unit managed by Chris and supported by Akash running finance. So again, the disciplines that we've had and the efficient way in which we have run and we are running the LED business, we're now applying those disciplines to solar, which I think does need some support, as we've seen sort of evidenced by the fact that some of the paperwork around the Mace installations has not kept up to date with all the operational work. We've kind of reenergized the sales and marketing team now under Mark Dolling's leadership as Chief Sales Officer. So all activities are focused by sector. It's giving us much greater focus, much greater insight into the sector. And we're also now allocating marketing budget by sector spend, which is great to try and drive activity there. I'm currently spending around 60%, maybe slightly more of my time driving revenue and trying to link the marketing activities to drive revenue. Historically, that's always been an area where we've -- that relationship has been quite loose. I want to see a direct link between the marketing spend and the lead generation and the conversion of those leads into revenue. The GBP 2 million annualized cost saving exercise is completed. We'll just keep a very, very close eye on costs for the balance of this year. Effectively, there's no more work to do there. And we're already seeing the benefits coming through in cash flow and P&L now, which is great. Improving cash flow and gross margin are obviously key for us. The second half is really important. The margins will definitely improve in the second half because we're through all the Mace work now. There is no more Mace revenue to be recognized in the second half of this year. Where we are today, we continue to trade in line with the FY '26 guidance, which we revised on the 22nd of June of this year with revenue around GBP 32 million and adjusted EBITDA of GBP 1.7 million. And in summary, I think we're in a good position to take advantage of the opportunities to drive a sustainable growth in shareholder value. So that concludes the presentation today. I'll just hand back to Lilly for a second, and then we'll take any questions which have been submitted, which should come up my screen shortly. Thank you.

[Operator Instructions] John, I would just hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

So in no particular order, just looking at the first question here, is John Gahan expected to move into a permanent CEO role? Well, I've been doing the CEO role and the CFO role. It's been a really busy time. I've really joined the job. Obviously, the Board are considering its options, and I'm sure they'll make an announcement at the appropriate time when they decided how they want to progress. But right here right now, I've got a job to do. I'm getting on with the job. I've got a fabulous team of people to help me manage the business. And it's a pretty -- it's been -- yes, it's been a turbulent period, but it does feel like we've really turned the corner now. And the group of people we've got managing the business and a loyal workforce, it feels like we're really making progress. There's another question here. Okay. Explain why you're only able to deliver GBP 1.7 million EBITDA on GBP 32 million for '26 when you delivered GBP 2.2 million on 19 in 2025. And obviously, you've unlocked GBP 1 million of cost savings. So what's happening here? Okay. There's a couple of things going on here. Firstly, I think it's important to understand there's been a major shift in the revenue mix year-on-year. So I think shareholders know that the LED margins are typically sort of mid-30s and solar is kind of mid-20s. Historically, back in 2025, we were circa 2/3 LED, 1/3 solar. And so one of the things that's happened is that, that shift has completely gone the other way. It's now 2/3 solar, 1/3 LED in the first half of this year specifically. So that's one of the reasons why the margin is there. We obviously know with Mace as well that we incurred around sort of GBP 0.5 million of additional unbudgeted costs due to the factors Akash has explained where effectively the panel prices increased from the 1st of January due to action taken by the Chinese government, which unfortunately, we weren't able to pass on. When we were budgeting, we were expecting more of an LED split than a solar split. So that's another reason why sort of the overall profitability is lower. And I think the other point that is worth mentioning without going back -- without wishing to go back over all the old ground of the previous accounting adjustments, shareholders may remember that we originally announced that the adjusted EBITDA for FY '25 is going to be circa GBP 1.7 million, was our expectation. And the final number that we ended up with was around GBP 2.2 million. So the adjusted EBITDA actually increased by GBP 500,000. And the reason for that was there was a lot of accrued revenue, which then was shifted out of 2024 to the beginning of 2025, which then came into the 2025 numbers. So that's another reason why 2025 was boosted by the GBP 0.5 million of the accrued revenue -- profit in the accrued revenue, which was an adjustment from 2024. I think it's also worth remembering that we moved GBP 700,000 worth of cost pre-contract costs, so it's people cost effectively, internal costs mainly; out of the P&L and put it into the balance sheet because it represented a contract asset, which the auditors were very happy with. But it represented the work -- the value of the work which we've done, but where we haven't actually secured any business. So again, when I look at 2025, 2025 benefited from that GBP 700,000 shift. So you take the -- sorry, the GBP 600,000 shift, the contract asset. If you take the contract asset out and you back out the GBP 500,000 profit in the accrued revenue, that's GBP 1.1 million in total; 1.1 million off the GBP 2.2 million then kind of indicates that FY '25 was probably a lower number of circa GBP 1.1 million. So yes, there is an increase this year. And obviously, the revenue has gone up. But obviously, the Mace revenue, which will account for around 50% of the revenue in the full year and around 70% of the revenue in the half year, the Mace contract was a significantly lower margin. And as a result, with sort of 2/3 of the revenue materializing in H1 and 1/3 in H2, we will struggle to try and significantly improve the margin because of the weighting impact of the revenue H1 versus H2. So yes, we expect an increase in margins in the second half. The margins on non-Mace business are still performing well, kind of in line with expectation, in line with the guidance that I've given sort of mid-20s for solar, mid-30s for LED. But effectively, I think at current course of speed, we are on track for a second half -- to deliver second half results in line with expectation. So it's quite a long answer to that question. I hope people can follow the detail there. So in H2, the revenue forecast is currently GBP 10.8 million with GBP 5.5 million contracted. What percentage of H2 forecast is likely to be LED? So if I look at the GBP 5.5 million, it's roughly sort of 50-50 split between LED and solar, maybe slightly solar weighted. But when I look at the balance of the pipeline opportunities, which we'll have to convert to secure that revenue of GBP 10.2 million in the balance of H2, it is slightly more solar weighted again. So if we're able to swing it back towards LED, then I'd expect there to be a slightly margin accretive. But as we sit here today, it's a slightly higher weighting for the solar. Okay. Which customer verticals are growing fastest? That's a really interesting question. I think that when I look at the opportunities, I think NHS has got to be a really good opportunity for us. I think C&I is at a really low starting point. So if I look at the percentage growth, it's difficult to compare. And sort of education, I mean, they're around sort of 28,000 schools, market penetration still suggests there's loads to go at for the foreseeable future. Hopefully, we'll be able to provide investors and shareholders with an update and give you more detail on the individual channels later this year. We're still exploring all the pipeline opportunities. I think that the NHS is a great opportunity for us. And once we've got the first EPC contract and we've proven the model, and it's got government support as well; so I think that, that could be probably, as I sit here today, probably the most sizable growth area for the business. Having said that, we are making great strides with the C&I business as well, targeting owner-occupied buildings as an opportunity to try and drive revenue growth. The slide shows PLC costs in H1 at GBP 1.8 million annual run rate. What is included in that? And has that been reduced by the GBP 2 million cost reduction? So the PLC costs were about GBP 900,000 in the first half of this year. There will be a reduction on that number in the second half. Obviously, we've lost a number of people from the C-suite roles, which has made a sizable dent in the cost base. I think that probably around GBP 300,000 or GBP 400,000 is the savings at the PLC level. But there are also savings and most of the savings falling in the business unit in the arena of the business unit as well because we have consolidated a number of roles, project management. We're obviously operating now with 1 Chief Operating Officer, not 2 Chief Operating Officers. So yes, I think -- so there'll be savings -- the savings are probably split 60% to 70% in favor of business units and the balance in the PLC line. But obviously, we're just keeping a very, very close eye on costs. So yes, so that's where I do expect to realize circa GBP 1 million in the second half of this year and GBP 2 million annualized. His question, is there any risk that the GBP 4.8 million of Mace cash won't be received once the paperwork is fully provided? I don't believe there is a risk at all that it won't be received. And we're talking to the DoB today to try and secure and accelerate the timing of those payments to us. It's fair to say that the solar business was not in the state which was -- which it should have been, frankly, and it's disappointing to be in a position where we expected to collect all of that Mace cash before the end of June. And in fact, our internal trackers showed that, the trackers which we showed to the customer showed that, but the reality is we're just not. So the team have done a great job getting their arms around exactly what is outstanding. And it's a paperwork exercise to do all the relevant planning, the O&M manuals, the building control, et cetera, et cetera, there's quite a lot to get signed off and get submitted. You have to provide the as-built drawings not the original drawing, we need to know exactly what was installed and provide the technical drawings for that, and that takes time. So yes, I don't think that -- there isn't a risk around the quantum coming in. It's a risk around the timing of that cash being received. We received a big chunk of it already in July. And obviously, we're trying to secure the rest as quickly as possible. Question here. So you got GBP 500,000 profit in H2 implies a loss-making business. With the GBP 1 million cost savings delivered, why are you not able to deliver more than GBP 1 million? Good question. I think the -- our focus is obviously trying to drive up margins, particularly in the solar business, where I think margins are constrained. I think they're constrained for two reasons. I don't think we've got an ideal fix on all the purchase prices of products. But given the increase in volumes, we're trying to now go back and speak to vendors to try and secure better pricing for some of the key components, which would make a difference. I think secondly, the competitive market, particularly when we're doing tenders, for example, we're having to compete at very, very keen prices to secure the work. That's particularly the case for solar. And obviously, as we have a higher solar proportion of revenue in the second half of this year, that's obviously having a slightly dilutive impact on margins. Obviously, when we look year-on-year, as I said before, we had last year, LED was 65% and solar was 35%. This year, it flipped around the other way with sort of solar around 35% and LED at around solar at 65% and LED at 35%. I think it's also worth pointing out that we had the -- this year, as part of the Mace contract, we also have been installing EV chargers, which is about GBP 1.6 million of the total circa GBP 15 million of revenue recognized this year on Mace. And margins on EV chargers are kind of low 20s. So again, that's slightly margin dilutive versus LED. And similarly with batteries, margins on battery installations have been sort of low 20s. So there's definitely further work to do to try and drive up the revenue to help us boost the bottom line and improve our operating leverages. And the changes we've made have definitely helped there, but there's definitely more work to do to drive up and improve and increase the profitability of the business. The next question. If you win further government contracts, will you be putting in protections on costs? I'd love to be able to do that. It's a great question. I think the reality is that the government presents a lot of these contracts, GB Energy present them as a take it on EBIT. And I can -- I guess we're in -- because of the quantum of the contract and the GB Energy contract could be a very sizable contract, potentially 3 years' worth of revenue for us if we can secure it. So there's very little scope really to negotiate, unfortunately. In all of our contracts, we do have a clause which talks about if the work is not commenced within 3 months of the contract signing, then we're allowed to go back to the customer and secure and have a negotiation in good faith to secure the on cost, which we've incurred. But I think with Mace was concerned, we unfortunately couldn't do that. We did factor in a small contingency, by the way, but we kind of burned through that pretty quickly with some of the panel cost increases we saw after the Chinese government increased the duty on panel prices coming out of China from the 1st of January this year. Let me have a look at the other questions. Is there any thought of clearing out the share overhang from the holders who are no longer with the company? Look, investors make their own decisions. It's not for me to determine what investors wish to do. So I will just let the market decide how investors will decide how they want to pay that going forward. It's not for me to answer that one. So in terms of cash going forward, after paying trade debtors in the Harwood loan, are we going to pay for cash? Or could there be another need for a loan from Harwood or any other large Mace contract wins going forward? So I think, look, once we've collected the cash from Mace, we can repay the balance of the Harwood loan. GBP 0.5 million of the loan was extended from the end of July to the end of November for repayment. So that's great. We've got a very supportive shareholder. The other thing to note is with the Mace contract, we're paid on 28 days from date of invoice. This is a very significant change. And obviously, it's one of the reasons why our working capital -- if you look at the net working capital year-on-year, working capital should be in credit for this business because we should always be -- all of our projects should overall be self-funding. So we should be able to collect the cash, particularly on LED projects in advance of having to settle all of the creditors on the Harwood, et cetera. So it should be cash positive. However, on the Mace contract, the credit terms are horrible. The 28 days from date of invoice. And again, it's to sort of take it or leave it. I think we've learned a lot over the last sort of 12 months, particularly around management of net working capital. We've had really supportive creditors around [ Harwood ] and some of the contract creditors as well, which have been terrific. But once the cash comes in from Mace, we'll obviously be bringing creditors up to date and repaying the Harwood loan. And we're kind of going back to a sort of normal run rate of working capital where effectively, once we raise an invoice, we get paid within 7 days. So I'm hoping cash flow should improve going forward as well. So if we win another piece of Mace business, we'll have to assess it. It won't be -- it may not be Mace business would probably be GB Energy because they're the awarding company. We have to assess it at that point in time. So as we sit here today, there are no plans for that. Can we have an explanation of what went wrong with the NatWest facility? Well, the NatWest facility was put in place by the previous management team back in, I think it was around March, April 2024 at a cost of GBP 300,000 or GBP 400,000 on professional fees and legal fees. And on the face of it, it was a really good facility because it allowed eEnergy to secure finance from NatWest at really competitive interest rates. I'm talking sort of 6.5%. So it's a really, really low interest rate. The only problem was is that eEnergy had to leave in the deal 15% of the value of the installation revenue in the contract. And when you're short of cash, as eEnergy was historically, we haven't got the cash flow to be able to do it. So when I joined, one of the first things I observed was that NatWest facility is actually unaffordable. And therefore, it's unusable. And so one of the first things we did, we approached Redaptive to see where they would be willing to provide the funding to us. And they offered us GBP 100 million facility, which we've been using ever since, which has been great. And effectively, Redaptive purchased -- if you remember last year, they purchased the NatWest facility from us. So it's just not -- as a facility, great interest rate, but the cost is just far too high in terms of the cash flow. Obviously, eEnergy would have to leave that money and then we recover our investments plus interest over the course of the contract for 7 to 10 years. Well, I mean, we'd need an enormous balance sheet to be able to utilize the full GBP 40 million if circa 15% of the deals which we secure, we've got to leave that money in for 7 to 10 years. So it just wasn't workable. And as a result, we terminated this year, which is helpful. We save around GBP 10,000 of nonutilization fees a month. which will be offset by the interest costs broadly on the loan. So that's why we terminated the NatWest facility. And as a result, yes, we wrote off the balance of the fees is around GBP 300,000 still in the balance sheet because it was terminated. That was part of a noncash charge in the interest line in our results. Another question here. Is the streamlined team still able to be geared to deliver significant growth in future revenue? Or would there be a need for additional hiring? So excellent question. I think that we know where the bottlenecks in this business are. And we could, if we won the next contract with GB Energy, scale up much faster by outsourcing some of those key activities and managing and tightly managing those outsourced resources. We know what they are. But I think any additional costs will be justified by additional profit on those contracts. I think I'm really comfortable with the size of the team where we are today, bearing in mind, this team, I believe, as they're constructed today is sufficient to be able to deliver GBP 21.8 million of revenue, which is what we did in the first half. So that kind of implies we've got a business -- a cost base that could deliver circa GBP 40 million of annualized revenue. So a lot of the savings we've made have been in the senior leadership of the team as well. So it's not just the operations side, which we've trimmed the cost base and streamlined the number of roles. I think putting everything under one Chief Operating Officer makes complete sense. I wish we've done it previously, but we are where we are. We've done it now, and it's made a massive difference to how the team operates, which is great. Okay. I think I think we've answered all of the questions. So thank you very much, everybody, for attending today. I really appreciate it. On behalf of A and I hope we've answered all the questions that you've raised. And if you've got any other questions, then please feel free to submit them through to this website. And obviously, they'll be forwarded on to us, we'll try and answer them as best as we can. I'll hand back to Lilly. Thank you.

That's great. Thank you for updating investors today. Can I please ask investors not to close this session and should now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good morning to you all.