Welcome everybody. Joe Vorih, CEO of Genuit.

I think most of you know me by now, but I'm pleased to be here to present our fiscal year '25 results, as well as a really interesting update on our strategy, and we're going to give you a bit of a divisional overview as well. As soon as I get the clicker here, importantly.

Anyway, let's get started. Just a couple of notes, we're going to head through the agenda here.

I'm going to give you a bit of an introduction, turn it over to Tim, who will take you through the financial update and a few words on the outlook. I'll come back for a bit of the strategic progress we did last year.

Then I'm being joined also, in addition to Tim, our CFO, by Lee Mellor, who will talk to you about our Climate division, and Steve Currier, who will talk to you about our Water division. In addition, we've got the rest of our leadership team here, we've got Martin, our Head of Strategy and Sustainability; Adele, Adele Conway, our Chief People Officer; and Emma, our General Counsel and Company Secretary here.

Great team. Feel free to see any of us, we'll be around after as well.

Importantly, as soon as we're done, we will have some Q&A after the whole session, and then upstairs, as you might have noticed on the way in, there's some really interesting demonstrations, if you've got a few minutes, I'd definitely encourage you to ask the team up there, they're delighted to tell you about some of the things we're doing, including some systems and solutions from our newest acquisitions, a lot to get through. First off, pleased to say that despite what once again was another challenging year, I seem to be really good at talking about challenging environments 4 years on, but revenue increased last year 7.4% 7.3% as we managed to outperform through a mix of both organic growth and share gains, as well as integrating two really good acquisitions.

Our underlying operating profit increased to £94.4 million, and this is of course despite the market conditions we had and, of course, the headwinds from National Insurance and the National Living Wage increases. We were able to deliver the sequential margin improvement from H1 to H2 that we had told you we would, and that's really important as we think about going forward as we've absorbed those costs and continue to improve the business.

Importantly, our strong operating cash flow generation, 102% this year, means that we continue to have the wherewithal to be able to reinvest in the business both organically and, of course, inorganically, as you saw. As a result, the board had confidence to declare a 12.9p increase in our dividend, which is in line with our progressive dividend policy, but also reflects both our strong balance sheet and our confidence in our strategic execution going forward.

As resilient as our performance was, it was a year of great strategic progress. As we've been focusing on higher-growth markets where sustainability leads and where we can actually drive better growth than our peers and the rest of the market.

Some of these are, for example, the higher growth rates we saw in ventilation and in the blue-green roof sectors, among others. Of course, we continue to benefit from regulatory and other tailwinds, such as the AMP8 framework, where some of our AMP8, where some of the initial framework wins have started to come through, which is great, so that sets the tone for mid-term growth, and continued increased demand in things like ventilation, including mechanical ventilation heat recovery, as our customers prepare for the Future Homes Standard, start to build to Passivhaus in some parts of the country.

Again, these are just really good markets and businesses to be operating. We did deliver some targeted market share gains last year.

We talked about the exit of one of our drainage competitors, we successfully captured that share. Importantly, we were able to leverage our relationship with Barratt following the Redrow acquisition and tender to use our strategic partnership with them and our more sustainable offering to really drive a much better value proposition and win that expanded business as well.

It wouldn't be a presentation if I didn't point out that the Genuit Business System is at the heart of everything we do. It continues to allow people to drive productivity and efficiency in the business, and as we'll talk about in a bit when I come back, it's starting to now impact the growth rates of the business as we launch our growth tools as well.

Finally, in terms of strategic progress, really pleased with the acquisitions of Monodraught and the Davidson Group of Companies, both of whom are represented upstairs. We spent over £100 million in these acquisitions.

These are fantastic, they're integrating really well, and both of them are both on track to be accretive this year as well as hit our mid-term operating targets of 20% plus in the mid-term. They're on track for that, and we're really pleased and, of course, as we'll keep cultivating that strong pipeline, we'll have more exciting news in the future, I'm sure.

The other thing, and I'll come back and tell you a little bit more about this, is we announced the divisional simplification. Just to say, this is continued evolution on our strategic plan.

We'll address later, Lee and Steve will talk to you about the Climate and Water divisions, and I'll give you a little more of the rationale right before. For the meantime, we're going to go through with the results, and Tim will come and give you those financial results, but we will do that in the three divisions that we have been operating for the last few years.

Tim, with that, over to you.

Thank you, Joe. Morning, everyone.

Thank you for coming this morning, and it's a pleasure for me to present the financial results for 2025 to you this morning. The financial highlights first of all: as Joe said, our revenue was up around 7% last year at £602 million, and that represents organic growth of about 3%, a great performance by the Genuit companies to generate growth despite the continued subdued market environment that we saw.

We also increased our profitability, profits up by 2.4% to £94.4 million, or broadly flat on a like-for-like basis. Our margin was down slightly during the year, about 70 basis point reduction in margin to 15.7%.

However, we did consume additional employment costs in the form of National Insurance and National Living Wage, and that actually equated for about 70 basis points, there are some ups and downs in the segmentation that I'll talk you through, but largely that's about the same value. Importantly, our margin in the second half, as Joe mentioned, was larger than the first, actually about 16.4%, which is back to the run rate of 2024 as we continue to improve the business, the efficiency, the productivity, and therefore our operating margin.

Cash conversion was really strong, we aim to always be above 90% cash conversion, and you can see we've had a strong performance here at over 100%, and that's because we continue to focus on improving working capital within the group. Because of that strong cash generation and because of the strength of our balance sheet, we've continued our progressive dividend policy, 12.9 pence, up 0.4p for the dividend, continuing to drive shareholder value there.

Our leverage, about 1.5 times, is bang in the range of the 1 to 2 times that we aim to keep our leverage. Actually we delever pretty quickly, about a third of a turn a year, you will see that our firepower to do further acquisitions will come fairly quickly as well through the year.

Let's unpack the results a little bit more. If we look at our revenue, you can see that our proportion of revenue amongst the three business units was fairly stable year-on-year, about 40% of our revenue comes from SBS, and about 30% each from Climate Management and Water Management in our old 3BU structure.

The proportion of that to split slightly differently across the sectors shows that about 35% is from new house building, just under 30% from the RMI market, and just over 25% from what we call non-housing, so that's commercial, infrastructure, multi-storey residential, and about 11%, which is consistent, of international revenues as well. In terms of profits, as I say, profits are up year-on-year whilst margin is slightly down.

We did see that the contribution from the additional revenue that we've had has flown through and helped to offset those additional employment costs that we've consumed during the year. We obviously got some profit contribution at the end of the year as well from those acquisitions that we completed in August and in September.

The Genuit Business System continues to drive at profitability improvement, and so that also helps us as well as balanced price management offset those additional employment costs, and our margin was bigger in half two, as I say, than half one, a good run rate and trajectory coming into 2026. If we look at the bridge of our business units, you can see that all three of our business units grew during the year, a strong, healthy performance from them all.

In general, our profitability increased most notably in SBS, apart from in WMS, where we did have some challenges. Let's just dig into the detail of our segmented results and go through our business units one by one.

Starting with Climate Management Solutions, here we saw a really strong revenue performance, revenue up over 10% year-on-year, or about 6% on a like-for-like basis, and actually within there, our ventilation business grew at over 10%, and we saw really strong performance there, particularly with MVHR, mechanical ventilation heat recovery with a cooling module in multi-storey residential. When Lee Mellor stands up in a moment to talk about our climate business, this is a really exciting area of continued growth for us, as you'll see.

We had a resilient performance within our ADEY business, concentrating on water filtration despite kind of subdued boiler market still, but we did see some softness in our underfloor heating business, which is particularly exposed to the RMI market, but is a business that we certainly see growth potential in. Whilst that did drive some underperformance in terms of margin during the year, we see a route to improve that as we scale that underfloor heating business associated with Future Homes Standard, Warm Homes, and so on.

As we integrate our Monodraught business, which is accretive to our margin overall, we do see the opportunity to grow those margins. The Water Management segment: revenue growth was about 5% year-on-year, or about flat on a like-for-like basis.

Here we had a resilient performance within our civils business, and the stormwater attenuation piece grew, as well as blue-green roofs, which is really on a different growth trajectory, small, but rapidly growing for the future. Our profit here was down.

We talked at the half year around an inventory provision that we made, and we've also had the effect of National Insurance and National Living Wage, which is slightly harder to pass on within this market at lower volumes, but again, looking forward, we see the opportunity to improve margin. Steve Currier has done a great job improving this business in the second half of the year, and that's from a price, cost, and Genuit Business System point of view.

We do see that as we scale our business, particularly the blue-green roof business, there are opportunities to grow our margin here, too. Sustainable Building Solutions is our largest business unit.

Revenue here grew again, 6.5% for the year, or about 3% on a like-for-like basis. We did get some targeted market share gains here, drainage, we saw the exit of a competitor from the UK market, and we were successful in winning about £20 million annually of business there.

We also saw good growth in commercial markets in particular within this segment during 2025, and that helped to offset some softness in the new build and the RMI markets, particularly in the second half of the year in that run-up to the UK government budget. Overall here, we did see a strong improvement in profitability, really driven by that commercial performance, about an 80 bps improvement in our margin.

Really well done to the team here. We continue to drive at that both with the continuous improvement of the Genuit Business System and integrating the Davidson Group of Companies, which will be delivering an EBIT of over 20% in line with our medium-term target in 2026.

That's the run-through of the old business unit structure. I wanted to give you as well a flavor of what the new two divisions will look like in the component parts.

We've got a number of our analysts within the room. This slide really is a one-off to help you reset your models and explain what goes where and what kind of trajectory are we on in terms of growth and profitability.

Here you can see our Climate and Water divisions and where the various logos, our businesses end up, and the proportion of those businesses and the growth and profitability rates. If we take Climate first of all, that's a over £170 million a year business, had a return on sales of over 13% in 2025.

Here you can see that our ventilation business, which is about 55% of that division, is really growing very well, so that's our fastest growing element of the business at the moment, whereas in heating, slightly slower growth, and that's really related to the fact that the RMI market hasn't picked up yet, but also technologies like underfloor heating are on a growth trajectory for the future, but are currently not at the scale that we would want them. That means that in both of these divisions or elements of this division, we've got opportunity to improve the margin as we look forward as we grow the business, but also as we offer interoperable solutions across this division.

The opportunity to be able to sell heating with ventilation systems is really a very strong point for Genuit as a group. Our Water division, that's an over £400 million business and nearly 17% return on sales.

Here you can see our civils and infrastructure business is one of the lower-margin areas of the group and lower growth, but we do see very strong growth as we look forward, particularly with the AMP8 water cycle that Steve Currier will talk a bit more about when he's presenting. That means that the volume increase and the economies of scale and operating leverage we can get from that will drive our margin profile as we do.

That will complement our existing residential and commercial business, which, as you can see, is our highest profitability component of the business right now, but also growing at a decent rate as well. A little bit more detail on some of the results.

Non-underlying items first of all: here you can see that the amount of exceptionals reduced year-on-year to £25 million. A big chunk of that, about £14 million, relates to the usual amortization of intangibles.

We did have some restructuring in the year, we've invested around £5 million in restructuring, which is partly to create those two divisions and really set them up for the future, but also tackle some of the improvement in the Water Management sector and improve profitability there, half two versus half one and into 2026. We spent about £3 million on our acquisitions.

As Joe mentioned, over £100 million worth of spend on those acquisitions, we're really pleased with them. These are the costs that are associated with buying those.

We've also continued to invest in our systems as well, really investing in the future of the group here, creating really efficient processes complementing the Genuit Business System and setting ourselves up to be able to use future technologies like artificial intelligence to really create manufacturing operations that are fit for the future, and you'll see this is a continuing theme that we'll continue to invest in. Then some costs associated with some impairments associated with holding the Polypipe decking business for sale.

This is a business that we've concluded in the year is not strategic to us, relatively small, but we'll look to divest that business in half one. Onto cash flow: as I say, a really strong cash flow performance by the team, over 100% cash conversion.

We've really focused on improving that working capital, which is as much about Genuit Business System as it is in the operations and productivity. That allows us to fund the acquisitions of over £100 million, that dividend payment of over £30 million as well.

It means that our balance sheet remains really strong and puts us on a great footing to be able to invest for the future. We'll continue to invest in the capital of the group.

We spent just under £30 million of capex in 2025. We'll spend a similar number, we think, £30 to £35 million in 2026.

We'll continue to prosecute that acquisition pipeline, and as we delever, we'll certainly have opportunity to look at similar strategic bolt-on-sized acquisitions. We'll continue to provide shareholder value in the form of our progressive dividend policy as well.

Those are the results for 2025. Just a word then on the outlook for 2026 before we go back to the strategy and our divisional deep dive.

We have seen the continued subdued environment that we saw in Q4 come into January and February. That was expected given the soft end to the year, and we have seen that compounded by wet weather in the UK in January and February.

Hopefully as we go into the spring, we'll see some sunnier weather and construction site activity will improve. Certainly we have seen some positive signs in our order intake that would suggest that sites are gearing up for more activity in the spring, we'll see how that goes.

Obviously at the moment we've got the evolving situation in the Middle East to think about as well. Our primary concern there is for the people we have there, we've got about 30 people in the Middle East.

Keeping them safe is the utmost priority, and we do hope that things will settle down there quickly. It's probably too early to really predict what's going to happen from a business point of view at this stage, but we'll continue to monitor that situation and see how things evolve.

Despite whatever market conditions we'll see, our focus is really on outperforming the market, and there are certain parts of our market that are not necessarily linked to GDP or the housing market, particularly in the commercial sectors, the schools rebuilding program, which Lee will talk a bit more about, the AMP8 water cycle, the drive towards urban re-greening and blue-green roofs. We've got lots of things in the group that we can focus on to drive market outperformance, whatever the economic conditions.

We'll continue to improve the business as well through the Genuit Business Systems, you'll see continual focus on working capital improvement, productivity and efficiency of the group. All of that means that we remain very confident in achieving our medium-term targets, outperforming the market by 2% to 4% and growing our profitability to over 20% operating margin over the medium term.

That's the outlook, and now I'll invite Joe back to the stage to talk around our strategy.

Thank you, Tim. All right.

Just a few words on the progress we made last year, and then we'll get into the divisional overviews. First, recall that we're all here, 3,500 or so of us, because we believe in the purpose that together we create sustainable living.

Unlike so many companies, one of the great things we don't have to worry about going forward with the questions around ESG is actually sustainability's so ingrained in the core of everything we do. It's actually, we believe, a long-term competitive advantage.

I got to tell you, when you're leading a team of people and your purpose and what you're trying to do as a business are so closely aligned, it's a great luxury. As such, we've actually been on the same strategic journey since November of '22 when we launched this, and some of you were in the room then, and that is our Sustainable Solutions for Growth strategy, still very much the strategy that we're working toward and have been for some time.

It's underpinned by a focus on the higher-growth, sustainability-driven markets where we believe that actually helping our customers deal with climate change and mitigation is actually really important and can be a competitive advantage. We invest in organic growth in those segments as well as, as we did last year, finding great strategic bolt-on acquisitions that can help us enhance our position there.

Sustainability is not just what we sell, it's also how we run the business, and I'll share with you some results as how we continue to improve that and make sure that we are a leader in operating sustainably and in being the lowest-carbon supplier of choice. The Genuit Business System continues to gain momentum, and it is fundamentally lean thought processes at the heart of everything that we do.

It's how we run the business front to back, from sales all the way through to how we install products, manufacture them all the way, how we run our back office, and that continues to gain momentum. Importantly, it's now starting to inform how we drive growth, a set of growth tools that are part of the Genuit Business System going forward.

Of course, last and definitely not least, perhaps most importantly, it's about investing in the very best people, the best leadership, the career development for everyone, and the fundamental belief that an inclusive and diverse environment actually is a competitive advantage. Just a couple of words on some of those bits.

If you think about growth for a minute, a couple examples here. Ventilation going into long-term structurally-driven markets like the need for more housing, the need to reinvest in education in our schools, are the types of markets that we like to play in, right?

We have a supportive regulatory environment. We're preparing for the Future Homes Standard when it eventually comes, it's the right thing to do.

We know we're going in that direction anyway, and as I said earlier, some of our customers are already building there in anticipation of that. The recently announced Warm Homes Plan, which is a really welcome sign from the UK government to get on with trying to accelerate the upgrading of the 20 million-plus homes that are already out there.

These are definitely good tailwinds for us, of course. As you see, or you can see upstairs, some of the high-quality bolt-on companies and brands that came last year, where Monodraught strengthened our ventilation presence and the Systemair, Careflow, Salamander, and Talon brands fit really well into our Water business.

In terms of sustainability, what's really interesting to me is that this is on a growing trend to be something that really matters to our customers, will help drive demand, and differentiate us as a leading supplier of choice, okay? We actually continue to make improvements on our journey to net zero, and perhaps one of the harder things is actually to reduce not just your absolute emissions, but also your carbon intensity.

It's another form of productivity, if you will, on the path to net zero. We made a 15.7% decrease in our carbon intensity last year, great accomplishment, and we continue to work on that journey and build it in as part of how we run the business and really being more efficient in everything we do.

We continue to be a leader in the use of recycled polymers and in the use of low-carbon materials in all of our businesses. Our recycled polymer content remains around 50%, but importantly, we have invested in some substantial projects that will keep advancing that long-term.

This is one of those areas where we retain our leadership position, and we do believe that long-term it will be a competitive advantage and continue to be. In terms of the Genuit Business System, this is something we've been sort of tracking the permeation of it through the business.

Last year we delivered 75 Kaizen events, nearly four times as many as we did in '24. That's a huge step up, and part of it is because our leaders all committed to being part of this process, and the seven of us and the 70 or so other of the senior leaders across the business all participate themselves hands-on in Kaizens, because we believe leading from the front is the right thing to do.

As such, over 23% of our employees across the whole business so far have been part of a Kaizen event or lean training. Then, as I said, we launched the Lean GBS Tools for Growth.

These are tools that we can deploy across the organization to help our sales, marketing, and innovation colleagues advance the progress that we actually deliver new products to market that are truly what our customers desire. I thought it'd be helpful, since we're not at one of our sites right now, to take you there.

Last fall, let me just set the stage here, one of our new acquisitions, Sky Garden, right, delivers complete blue-green solutions to site that are then installed. It's a very complex process, and several lorries need to leave with everything exactly the way it's needed.

Going forward, they need to be able to really increase their output, and this is the site that they actually stage everything from. Let's have a look.

This is our production site. 90% of all the projects that Sky Garden do have product that comes from this site.

The opportunity to be spotted was we got lots of stock around us, returns from previous project, it was very disorganized. We were trying to organize that site better and become much more efficient.

It's important to our customers to ensure that they receive the right product at the right time in the right quality, and that our guys could pick the right stock from the locations and identify that product accurately to better meet customer demands. It's important to the team to ensure we've got a well-organized working environment so the guys feel safe and supported so they can undertake their task in an efficient manner.

It's important to the business to ensure that we've got a profitable production unit that can support our growth aspirations. The blue audit that happened before the Kaizen created an opportunity for us to make the space safer and to create space and organize material.

We were only a small team, only three full-time members of staff. We needed to have an all-hands-on-deck approach, with expertise and numbers of staff being brought in from other parts of the group.

Group provided around 20 people to help us with the whole Kaizen event. This Kaizen was a great example of the trademark behaviors in action.

Vehicle movements were a real challenge for this site. It was quite a large space, but there was no real organization around how a vehicle would report, we did a lot of try-storming.

We had our partner haulier come to site with a driver and a trailer. We had parking bays, one-way systems in place, pedestrian access, and parking for cars to ensure that any vehicle movements were efficient and were safe.

Although we planned these things out on paper, it really meant that we could see some of that theory in action to ensure that we were making the right decisions. Fully improved efficiency on our site.

Everybody knows where everything is, everything has a place and there's a place for everything. I'm really proud when I turn up to site and see the amount of work that's been done and what we've achieved, but there is always more to do.

I always see the little things, the bar's always being raised, and always looking for that next level of improvement. Key part of the Kaizen is sustainment.

We don't want to backslide into the situation that we were in before. This site needs to remain organized, remain clear from old stock to make sure the guys can continue to be as efficient and productive as they currently are.

We really achieved a huge amount in a very short space of time. I couldn't have imagined when I joined Sky Garden that we would have done something on this scale.

I am very excited about the future, yes indeed. Our goal was always to serve the customer as quick as possible.

With Kaizen, we can do it literally now like a skyrocket. I hope I'm going to see this site doing great stuff.

Makes me proud,

yeah. Pav is a bit modest actually because he's the site supervisor there and I spent a week there with him and with the team, and the transformation that site went through in the space of 1 week is really remarkable.

You might associate lean methods and thinking with shop floors, but you can do it here, you can do it anywhere, right? What we're going to look for Sky Garden to do is actually they're in such a growing market in blue-green that their aim is to be able to double the output of that site, and so we'll be tracking that metric going forward.

Hopefully that helps you kind of see how this all comes to life. Of course, the last and most important piece really is investing in our people.

I've alluded to the strength of our leadership team and importantly, the succession and talent development that we drive throughout the whole organization to create more opportunities for people. It starts right at the very beginning of somebody's journey.

We've been committed members of the 5% Club for some time, which means that we invest in accredited earn and learn programs for people either early in their careers or retraining or perhaps getting some of the training and education they never got. Last year I'm proud to say we had 18.9% of our employees were involved in earn and learn programs, which is really remarkable, and it's a great investment and very well received.

We promoted internally 94 colleagues last year, of whom 40% were female leaders, and a third of our senior leadership team are female now. Of course, we invest in all the forms of diversity and continue to make this an absolute part of what we do.

It's something that personally matters to me and to all of us. In the end, the best team wins, and we think that is truly key.

Let me just say a few words about the division announcement that we just made and then I'll turn it over. Those of you who have been on this journey with us for a bit recall that we used to operate the business, 5 and 10 years ago very, very decentralized, right?

In fact, there was no collaboration really across any of the different companies. We were reporting in four different segments, and then in '22, late '22, we went to three segments, three business units, right: Climate Management Solutions, Water Management Solutions, Sustainable Building Solutions.

Last year we had the opportunity to actually operate Sustainable Building Solutions and Water Management Solutions, both involved in different aspects of water, and together, and Steve Currier actually led those two businesses. He led Water on an interim basis, and as a part, we were able to really uncover some great opportunities to further collaboration with those businesses.

We think there are both efficiencies to gain, but also importantly, ways that we can leverage that collaboration to really focus on driving growth and to accelerate our investment in customer-led innovation. That's really the rationale.

Going forward, we will be reporting as the way we manage this business: as a Climate business and a Water business. You can see some of the brands that are in there, but rather than hearing me talk about it, I'd like to invite Lee and Steve up, starting with Lee, to take you through the Climate division.

There you go, Lee, over to you.

Good morning. I'm excited to be here to tell you this story, but before I do, I'll introduce myself.

You've heard I'm Lee. I joined this company from a background of very growth-centered, large P&Ls operating across Europe, the Middle East, and Africa, where actually tailwinds were not the thing that grew you, it was about how you drove your company.

I'm really happy to be here and I'm going to share with you why. Climate Solutions: we are a group of problem solvers and solution makers for a world that's warming and where you need to mitigate and adapt.

On the right-hand side, you'll see our heating solutions business. We start off with ADEY.

We filter things so the system works better, extends its life, heat, and keeps you warm. We've then got Surestop.

Surestop is a stopcock, it's very innovative, and if you've got ADEY, it's a cross-sell. Your installer is installing the filter at the same time as stopcock.

In Nu-Heat, and I'll go into this some more later, we design and commission underfloor heating systems and more and more renewable technologies, when you put in a heating system, you're putting alongside that things like storage batteries. We have Alpha.

Alpha is a testing business. Now this offers the opportunity, such as hospitality, where we are today, to make sure that the water in the building is safe, and another cross-sell.

We then go into our ventilation divisions and we have Nuaire, Domus, which are in the residential and commercial building spaces. This is where we're seeing very, very fast growth.

Our newly acquired Monodraught business. You've seen some of this in operation on the boards upstairs.

This is hybrid technology with software, and actually the software is a huge part of the mix, and I'll explain that further. Where are we focused and how are we helping in mitigation and adaptation?

Three stories to pull out. One is the transition to low-carbon heating.

It's fair to say the UK is somewhat behind the rest of Europe in adopting, for example, lower-temperature heating systems, we're very much at the early stages of this, but actually we've got interoperable solutions to deliver. In a world that is warming and where people live, you actually have to help ventilate, and ventilate in a different way, I'll give you an example of that.

In a need to provide clean and healthy air, how do you deliver that particularly where there's heavy regulation? A hospital, a school, as two key examples.

Let's talk about our homes. First and foremost, we have a suite of products, solutions, and design and commissioning services, which means only Genuit can package together a heating system which is operated from a heat source, which we will design and commission however complex the building actually is.

With interoperable controls, you've actually seen some of them upstairs today and you're more than happy to play with those later. Then putting in more and more ventilation systems as our homes, because they are heavily sealed, require a lot of mechanical and hybrid ventilation.

We have a package of goods and a solutions to deliver that. I want to introduce you to Jeremy to show you our solution and services.

Radlow Manor has been here 1,000 years, being built in 1080. It has a medieval hall here.

In more recent times, it was taken over by the MOD, the military and the RAF, and it became Group 10 headquarters for more or less 90 years. It was then empty for 25 years until my wife and I bought it and started work in 2021.

Sustainability was always a big thing for us. We've kind of chimed with the new approach from local authorities and bodies like Historic England, who are all moving in that progressive manner.

That releases heat pumps. Heat pumps keep constant temperature, which old buildings love, less humidity.

All these new technologies now they're being embraced I think can only be good for listed buildings. There's always a place where you can fit the units, and not particularly unsightly and not particularly big.

Internally, the underfloor heating system is much less invasive into the building because you don't have the physical appearance of the radiators in the room, and most of your pipework is all at floor level and is also non-invasive, you're not drilling through vast portions of the fabric of the building to lay new pipework. Working with Nu-Heat was a new way of working for us.

Doing it this way with Nu-Heat as a package, we had our room calculations, we had our lengths of pipe and our types of tank, and we had all the kit, and they basically arrived all at the same time, all pre-designed. Things like the MCS certification we didn't have to deal with because that's in-house.

For us, it was a lot less complicated, certainly less time-consuming, and I think we probably ended up with a better, more efficient system doing it that way. When this project at Radlow Manor is completed, we hope we'll have future-proofed the building and all the surroundings for 100 years or more.

In embracing low-carbon heating, modern technology, and new systems, we hope that will help it to be preserved for another 100 years beyond that. After all, in the 1,000-year history of Radlow Manor, we're only guardians for a very short amount of time.

About 10%, 15% of our projects every year look like that where they're highly complex buildings, but it doesn't matter if they're complex or simple, we can provide you with both the service and the products to make sure that you transition into low-carbon heating as a way of adapting to a new way of working through the Future Homes Standard. Let's talk to you about ventilation.

Apartment buildings, simple example of how we need to mitigate. In this example, about one in five of us live in apartment buildings, particularly prevalent in cities like this, central London, and in an apartment that is well sealed, ventilating that room or those rooms from heat or, on the other extreme, being cool is very difficult to do.

You can't open the window because of noise, you can't open the window because of safety regulations. As problem solvers, we developed a product for housebuilders to put into the building to make sure that you're recycling warm air and bringing in cool air, and as a result of that, the person living in the apartment is living well.

This has been a multimillion-pound product for us and is still rapidly growing, with projects out through 2026 and 2027 already. In acquiring Monodraught, the power of actually creating something that at present time only we can bring to the market, which is a benefit for the end user living in the building, but also the installer.

We are able now to combine mechanical ventilation with hybrid ventilation using fresh air, control it from one source, and we've all been there where the controls in rooms do not control single source. We can talk to the heat source, the heat pump in this example, and we can monitor every single room with the use of AccuRate upstairs.

It really is a very unique proposition and something that is going to pay great dividends for us when it comes to growth. In this transition, I wanted to show you what the companies look like apart, and then bringing them together the sum of the parts of our greater.

In yellow, Monodraught were able to sell hybrid ventilation units predominantly into classrooms, that's where they live. Mechanical ventilation was Nuaire specialty, actually a lot bigger in a school, and in mechanical ventilations you're doing this in high-work areas, gymnasiums, kitchens, to mention a few.

Now we're able to ventilate all of the property, we can control it from one source, and that means in a funded area of growth, it creates us an opportunity which is very, very significant on an annual basis of around about £150 million. In fact, it's the deployment speed, i.e., the installations, that are our current challenge, not the acquired order book, where we are growing quite rapidly.

I want to introduce you to Everard, who again will show you what living with one of these systems looks like.

My name is Everard Cowell. I'm the caretaker of Little Reddings Primary School.

My role at the school is that to ensure that all the building stuff within the school are working 100%, which includes the total environment within the school and that the staff and the pupils are safe and comfortable within the building. It's a new school, purpose-built, with modern classrooms and learning spaces.

I was there from the start to the final solution of the new build, and it's been a complete overhaul from what we had before. The ventilation need for the school was to provide fresh air for all the classrooms.

The solution that was introduced to us by the Department of Education was the Monodraught system. The new systems within the building provide fresh air, it makes sure that the kids within the school have clean air throughout the day without the necessary need to open up any windows and to make sure the environment is safe for them.

It's a hybrid ventilation system that monitors temperature and CO2 within the classroom to ensure that the internal environment is right for the children and for the staff. Now within the hall, it's a natural ventilation system that is for activities and also at lunchtime, which keeps the hall nice and fresh.

The way the system works is that any prevailing wind is captured and brought within the hall, where hot air rises to ensure there's a continuous flow of natural air within the hall, that works very easily and maintenance-free. Working with Monodraught has been really good.

They have supported the school, given us really good data. A lot of the information is captured remotely, it's easy, if I have a situation, a problem, I can contact them directly.

They can easily provide a report and help with any solutions and maintenance needs that may arise within the system. My experience with them have been very beneficial, and it'll be great for us working in partnership with them for many years to come.

Listening to Everard there, a slight segue before my final slide I wanted to give to you is the international opportunity that also presents itself for Genuit. Many of the things that I've showed you today in ventilation are actually attributable to European markets where the climate is broadly similar, but also standards, what is driving that school, are also very prevalent in markets such as France, Belgium, etc.

As part of our future mid to long-term pathway, it's about how we commercialize this also outside of the UK. We're standing here today in the middle of a world that's pretty chaotic, but it always has been, and hopefully what you've seen today is we have a great opportunity to grow this business and take control of growing it above the marketplace.

We have a group of very uniquely positioned ventilation and heating services that we believe are at market-leading edges with future product development pathways that we can expand where you live, work, and play. That's enough for me today.

I wanted to hand you over to Steve to talk to you about our Water division.

Thanks, Lee. Good morning, everybody.

I'm Steve Currier. I've been with the business 3.5 years.

Prior to that, I was with Eaton Electrical, and for 15 years. Prior to that, I was in the automotive industry for another 15 years.

I really want to talk you through how we're handling one of life's most precious substances, which is water. This slide really sort of covers the scope of our activity and it really encompasses the path of water through the built environment.

We start with water supply with Polypipe Terrain into the buildings. Slight issue there, we'll just attend to that.

Right, we'll go again. Polypipe Terrain supplying water into the buildings through the point-of-use applications with Systemair and Salamander, two of our new acquisitions.

Then we bring in rainwater with Permavoid and Sky Garden, also Manthorpe, and then finally back to Polypipe again for drainage from the buildings, attenuation tanks, and then our work to support sort of civils. That's the way the business looks, and we've structured the businesses into three segments and they're focused around route to market.

They're civils and infrastructure, residential, and commercial buildings. We've done this fairly recently and we've done it very deliberately so that we bring our businesses closer together so that we can prompt and promote the ability to sell full solutions for common customers.

There's a reasonable amount of international presence here as well. We have facilities in France, Italy, and the Netherlands, and also, as we mentioned, the Middle East.

One of the aspects of the new structure is that we are transforming some of those to be country organizations to sell the full portfolio across those various territories. Now in terms of the problems we're trying to address, there are really three key challenges.

The first on the left, which I'm sure everybody's more than familiar with, is sort of excess rainfall and flooding. If you're a keen gardener, a golfer, or you've recently holidayed in Spain, you'll be sort of more than familiar with this, and it's really caused by warm air giving more intense periods of rainfall.

I'll cover off some of the sort of solutions how we're tackling that, but the real thing is, yeah, okay, we might have a sort of a little pause sort of winter break, but the real issue here is the overwhelming of aging sewage systems leading to the well-publicized instances of brown rivers and the associated health and environmental impacts. Paradoxically, the second problem is not having enough water, and this is due to higher temperatures and more frequent instances of drought in the summer, and this is a growing area of concern for the customers.

There's a couple of issues here really. The first is that in some areas of high-stressed water, we can't get planning permission to build the homes we need, but also the customers, as we do, see the impact of approaching legislation reducing water consumption to 110 liters per person per day, and actually less in some water-stressed areas.

A key area of focus moving forward. Actually the recent acquisition of Davidson Holdings has brought some new products and solutions in this sphere, and we see water conservation in buildings as an area that will only grow with opportunity for us.

The third challenge that we're trying to address is to continue to support construction, and a lot of our customers have got ambitious, but more importantly, committed carbon targets there, and they have to sort of achieve this combined with the ongoing problems of scarcity of labor in the construction segment and also the impacts of inflation, which have to be sort of mitigated through that. Those are the issues we're trying to address, and I'd like to really sort of talk through a couple of the solutions here.

The project you see on there is a deep attenuation tank and that's designed to intercept flood water, hold it, and release it in a controlled manner after the event. The alternative being an overload of flood water and sewage in the system, which then breaches the capacity at water treatment works, and that leads to the aforementioned sewage overfills.

Now the good news here is that we're entering a cycle of funding with AMP8 and there's £104 billion committed with focus on flood mitigation and sewage segregation. Of that, the addressable market is around about £100 million for Genuit, part of which actually funded the project you see on the screen.

If I can plug my colleague, Jason, there's actually some drone videos of this project being installed, which is in Leeds, that you can look at. There is bad news, though, is that inevitably these projects are down a country lane or in a crowded urban environment, usually next to a very flashy listed building, you name it, there is always problems, and they always have time constraints to deliver.

Actually this is where we feel the Genuit solution can support, and we use a sort of a modular approach, it's multifaceted, we have a combination of assembly in the factory and then final configuration on site, and this, when you combine it with the lightweight of a polymer system, gives really good advantages to the contractors and the consultants on site. Actually the fact that we use a lot of recycled polymer here helps the utility businesses supporting their carbon aspirations.

One of the other facets of the water offering from Genuit is nature-based solutions, and these can range from green roofs, including biosolar, which you might have seen in the previous video of the school, through to green walls, planters, rain gardens, etc. These, together with our traditional solutions and more increasingly controls, can give us a real range of opportunities to tackle very complex built environments.

Now we've been present here for a while, but where we're starting to gain traction is designing these systems holistically at the start of projects on a roof-to-river basis, as they say. One of the things we've recently done to test and look at our value proposition is go back over a number of projects and in effect redesign them as we would now.

One of the notable ones is on the slide here, which is Stockport Interchange. We had most of the data for the project, using that, we went and redesigned it with the full range of control solutions now available to us, and we found that that would have saved the main contractor £600,000 in the total cost of installation of the system.

In addition to that, they would have gained additional sustainability credentials and a £20,000 cost reduction in water supply annually for them as a business. All this at the same time as giving Genuit increased scope of supply and revenue to the project, we think is a real compelling value proposition and actually a genuine win-win customer-Genuit situation.

I'm convinced, but don't take my word for it, let's hear from one of our customers.

I'm Christopher Cater. I'm a development project manager for Caredig Group.

Caredig Group are one of the largest developing housing associations in Wales following a recent merger with Linc Cymru and Pobl Group. As a developing housing association, we aim to provide high-quality homes with added elements of green space, wellbeing, and fundamentally provide a good quality of life for our customers.

Caswell Towers is the latest development recently handed over to us at Caredig Group via Langstone Construction. It consists of 48 one-bed apartments and two commercial units on the ground floor.

The development simply wouldn't have been possible without the involvement of Welsh Government, who provided the funding towards this unique innovative build, Langstone Construction to deliver the project as a whole, and Sky Garden managing the water strategy from start to finish, including all the landscaped areas. With there being so many green infrastructure elements to this build, having Sky Garden on board to integrate all those elements into a single working solution was perfect and exactly what the development needed to succeed.

Caswell Towers is a great job for Sky Garden because it's one of the most ambitious and complete projects we've ever undertaken. It demonstrates and showcases all of our product lines, from biosolar on the roof, a bespoke green wall, podium landscaping, SuDS planters, and the full package in the courtyard.

It really demonstrates how all of our systems work together. Biosolar roof is a fantastic example of how renewable energy and green infrastructure work hand in hand.

Not only are we generating clean electricity for the building, but we're also helping improve biodiversity. The green wall was completely unique.

It's not something you can buy off the shelf and it's been specifically engineered for that building. The name Caswell Towers is completely tied to the building's water strategy, from the green roofs at the top working through all of our different systems down to the water attenuation tanks in the courtyard.

Sky Garden helped and shaped the way that the water moves through this building, and it demonstrates how it can integrate green infrastructure and water management.

It is impressive to see and know that Sky Garden can deliver such various elements of the water strategy for the building. Hopefully in future, we can design something together and work together again in the future.

The feedback we've received from Langstone Construction as the main contractor of this build, Sky Garden's involvement and expertise has been fundamental to the delivery of this project. Sky Garden are certainly a contractor they would use again and recommend going forward to others who wish to use them.

Personally, I'm really excited to see this project in 6 to 9 months' time. With practical completion taking place during winter, the planting hasn't established fully as yet, say another 6 to 9 months, I'm hoping to go back to the properties and be able to see that green wall and that vertical garden really taking effect, adding various colors to the scheme and really bringing those aesthetics of what the design concept was to life.

I love this project because it involved pretty much everything that we do. It's like a live showcase of what Sky Garden's capabilities are.

Each system strengthens the next, and it's a building with green infrastructure that isn't just an add-on, it's part of the backbone of the design and it's exactly the kind of project that we want to be involved in.

We will come back to that in 6 months because unfortunately we present the results in March, which isn't the greatest time to see the abundance of greenery float up, but I guess, as my hairdresser always says, some you win, some you lose. Changing tacks slightly, the last thing I'd like to talk through is how we're supporting construction.

The first thing just to really pick up is shortage of labor in the construction world. This is a well-trailed problem with around about 250,000 less people in the sector pre-COVID, and has led to a lot of focus on modern methods of construction, but I'm sure you're aware there's been many, many missteps here and many business failures.

When you look at those, they're generally high-fixed-cost businesses that haven't been able to cope with the fluctuations of volume, particularly in the period of sort of fairly sustained low activity that we've had. What we found at Genuit is that really having adjacent systems with our traditional product and channel supply next to our design and prefabrication service has allowed us to flex to meet that fluctuating demand.

Actually having both solutions to offer the customer means we tend to offer the customer the right solution for them rather than just the one that we have to offer. Actually, in a similar manner to the Stockport Interchange, we can often find with that prefabrication, in addition to supporting them in terms of labor availability, we can reduce the total cost of installation for them, another win-win situation.

We've actually seen over the last 3 years a doubling of our MMC and prefabrication offering, and last year was 20% growth as well, and that through a period of downturn, we think we're really well set for the long-publicized and trailed, but not yet here, recovery in the housing market. We're really excited with that.

The last point to cover is actually the embedded carbon in the products themselves. We've made good progress here on a couple of points.

Firstly from a data perspective, we've now got 70% of our revenue covered by environmental product declarations. That allows the customer to make informed, but also accredited choices in terms of the product that they want to sort of design into their system.

The other element of progress has been on the embedded carbon itself, and last year over 50% of the products had recycled polymer in, which is one of the ways that we help to reduce the embedded carbon. The others are designing the product for mass out and efficiency, and then responsible sourcing there.

We know this is really important for the customers because we can track the search of EPD databases, and actually the two most searched product sets are piping systems and HVAC, we think it's really important. Actually, as was mentioned earlier, last year we've run the combined Barratt Redrow tender, and in addition to our system capabilities and obviously sort of value that we provided as part of that, the sustainable and carbon credentials of the offer were really fundamental in winning that.

The summary: we think we're set up to leverage sustainability and regulatory growth drivers in that world of water. Three points of how we do this really: firstly, broad, holistic solutions for the water problems of today and tomorrow; secondly, design optimized for the lowest cost of installation to maximize customer value; and third, at all times maintaining the lowest embedded carbon we can.

That's Water, and I'll hand back to Joe to finish off.

Great, thanks, Steve. Hopefully that helps give a bit of a view into this.

Again, like I said, there's some great demonstrations with some colleagues upstairs, feel free to stick around after the Q&A. Let me just kind of wrap up here.

In the end, as I said, look, we will continue to focus on being a well-run, high-performing, and resilient business, at the same time positioning ourselves really well for the long term. We think our Sustainable Solutions for Growth strategy is very much aimed at that and we're making good progress.

I hope you can see by now that we are, in fact, very well positioned to benefit from the regulatory tailwinds by serving higher-growth markets. We've demonstrated the ability and will continue to be able to grow organically as well as inorganically with strategic bolt-on acquisitions funded from the good cash flow that we get from this well-run business, and that we are and remain well positioned to hit the mid-term targets.

I'll just leave you with the investment case. This is quite the same direction investment case has been working, and we're very confident in achieving these mid-term targets.

That's all we brought. Tim, Steve, Lee come up and we'll just take a bit of Q&A, and then we'll all be available upstairs afterwards, and we'll go from there.

Tim, why don't you coordinate questions and farm out as you see fit?

Will do. Okay.

Just put your hand up if you'd like to ask a question in the room, perhaps. Rob, you were first.

Sorry, thank you. Thanks the presentation, guys, really interesting across all the different points.

Just a couple from me. I'm probably supposed firstly on full year '26.

Clearly, evolving situation, etc., but is there any indication on the H1/H2 split of margins, given the quite significant step-up in H2, I think 140 bps higher, any H1/H2 thoughts for '26 on margin? Then secondly, when I think Lee was running through I guess the Climate division, you mentioned one of the businesses called Alpha, which seems to have I guess testing capability.

Could you just kind of set briefly I guess the opportunity for Genuit to do a lot more on the kind of the testing front here, cuz clearly a lot of what you do is kind of install products? Are there different economics, more recurring revenues, different opportunities to consolidate in the testing market related to water and climate?

Thanks.

Okay. Our run rate going into 2026 is more akin to the margins we achieved in 2024, around that 16.4% achieved in H2.

The market remains subdued, similar to the end of last year, really I would see, Rob, our margin kind of continuing at that level. Then we'll see for the second half whether things pick up.

In terms of comp, first half is harder this year than second half because we actually started off with some bright spots, if you remember, first half last year, whereas it then weakened in the second half of the year towards the government budget in November. The comp will get easier in the second half, but obviously there's risks and opportunities abound, I think, as we look forward to the year.

Do you want

to tackle

the testing question,

Lee? Yes, taking that capability, I want to bring you back to the transition to low-carbon homes.

In a heating system that's running at around 50 degrees, essentially the problem is that you're going to get a different form of sludges, we call it, in the system. This year Nu-Heat will actually launch a warranty-based system where, for the homeowner, we will test the system every year for system efficiency.

The logic of that is we can tell you preemptively before the actual heat source starts to break down of challenges to come. That gives you an example that's tied to today's presentation, but testing is definitely something that we see both in residential and commercial buildings, we can extend into different uses.

Just to add to that, that's one of the things we love about the Alpha business is that, as Lee said, since that is something that you'll do every year in a home or a commercial setting, that the ability to build a recurring revenue stream is very attractive there and a good differentiator, so. Great.

Thank you, Lee. Clyde?

Thank you. Clyde Long from Peel Hunt.

Obviously an awful lot of volatility around oil prices at the moment, it'd be useful to get an update as to maybe the group's energy costs, total fuel, diesel costs within the business. Then also attached to that is sort of what sort of coverage have you got around PVC bought forward and how quickly would that higher oil price lead into higher costs for you?

That was the first one. The second one was really around the wet weather start for this year.

Would you like to sort of help us a bit as to how wet and how much of a negative impact it's been, because I'm...

Really, really wet.

I know. I'm a golfer, I know how wet it's been.

Anything on that side would help. Clearly, we would expect to sort of see better conditions, but it'd be helpful to get an idea for the first couple of months of the year.

Yeah. Okay.

If we take the Middle East situation, from an energy cost perspective, we're actually pretty well covered, we're 90% hedged for the summer and 80% hedged for the winter of this year. From 2026 perspective, I'm not expecting energy costs to hit us hard.

From a direct revenue point of view, 3.5% of our revenues come from the Middle East, small within the group, but still there's some revenue there. As I say, the priority at the moment is keeping people safe, activities are lower, but it's early days and we'll see how that pans out.

Then, of course, you've got the indirect effects, which could affect things like inflation, interest rates at home, and so on. It's really too early to see what's going on there.

In terms of magnitude, we buy about 80 million of polymers each year, 50 million of virgin, 30 million of recycled. Clearly virgin will correlate more closely to the cost of things like oil and gas, but recycled can as well depending on substitution effects and supply and demand as well.

We buy at a very good discount from the market price given the scale that we have, but it will move with a short lag to that. We'll see how we go.

We do have a history of being able to pass on price in this industry. It is rational in that sense.

There may be a bit of a short lag, but if this is more structural than temporary, and it's too early to say whether it is, then obviously we would look to work with our customers in the right way to manage the right commercial outcome. Okay.

In terms of wet weather, well, it is the UK, yes, I think the subdued market conditions in January and February are expected in the sense that Q4 was subdued, and it's also expected that January and February might be quite damp. It's hard to say exactly how much of what you see in the market is down to this, but there's no doubt that when it rains, site activity is lower in terms of the construction industry.

Many of you who walked here this morning, as I did, will have enjoyed the very dry, pleasant morning this morning. Hopefully that's the shape of things to come.

There's no doubt, as I say, there's a slight uptick in some order flow, which suggests some gearing up for the spring, and over the next couple of months, hopefully we'll see that improve. Christian?

Brilliant, thanks. Two from me.

Christian Hinderaker from Deutsche Bank. First, just looking at the addressable market for education, I think that was more than £150 million.

Now, just to give us a bit of a sense of where Genuit is currently there in terms of market share, and so the sense of the opportunity in terms of market share gains as well. Then one for Steve.

Obviously SBS margins have moved up really nicely over the last few years. How similar is the opportunity in WMS?

Is it the same playbook in essence to put there or are there differences that we need to be aware of?

All right. Lee, do you want to take the first one?

I'll go first. Very large market, ventilation, lots of different systems.

We hold somewhere between 10%, 15% share, and actually our industry, there isn't anybody that holds anymore, and it gives you the runway of growth. There is a huge growth opportunity if you can simplify this, and that's why you see upstairs the interoperable controls.

As soon as somebody starts to do that, your share gain becomes more relevant because the system is easier to install and talks to each other.

To answer that, it's a similar playbook, but with some nuances. I think the first thing, one of the things we've found when looking at the businesses together is they're quite connected.

There's a lot of intercompany supply and sales. Actually sort of it's not as stark as SBS was at this level and WMS was that level when you look at it from an end-to-end sort of perspective.

It's not as stark anyway. However, the things that are similar are some of the consolidation and structural elements that we previously did in SBS that we are now working through in WMS.

Tim mentioned some of those changes that we've made and there are more to make there. There's then the process efficiency, the lean work, the Genuit Business System, and we are, in effect, slightly less mature in the WMS businesses than we are in the SBS businesses, and we deliberately started the SBS businesses because they are more mature markets with less potential sort of growth drivers.

The bit that's different is that in those key areas of WMS with the blue-green space, the AMP8 funding, there are some growth drivers there and they will really help cover economies of scale and fixed cost in what is generally a more capital-intensive part of our business. Very similar, but with some nuances.

Yeah. The volume point from AMP8 is really important because when we look at the civils business, we actually see very good gross profit levels, but we haven't seen the kind of constant throughput that you need in a business like this.

The operating gearing is there with that additional volume from AMP8, and particularly because these are engineered solutions, it's not just about buying cheap pipe, we do see the potential to grow our margins significantly in Water.

Hi. Morning.

It's Jeremy from JPMorgan. Thanks for taking my question.

I've got two, please. The first one is just on the order intake, where you mentioned some positive signs there.

Can you maybe elaborate on what exactly you are seeing on the ground? Then the second one is just around M&A.

What's your current thinking there, and how's the pipeline looking, any particular areas where you're focusing at the moment?

Okay. We'll start at the order point and then Joe'll talk about M&A.

I think, particularly in the commercial spaces that are not so linked to GDP or perhaps the housing sector where there's perhaps more question mark at the moment, we're seeing pockets of good order intake. Lee's talked about the schools rebuilding program, that's one area.

We're seeing increasing activity around AMP8. We've got Jason Shingleton with us today, who some of you can talk to afterwards if you'd like to learn more about that, but really the contractors and the water utilities are ramping up their activities there.

Things like blue-green roofs, that you've seen some examples of today, that's on a different growth trajectory because of the need for greater urban re-greening. Even though perhaps there's some softness in multi-storey construction with holdups with the Building Safety Regulator, where people are getting planning permission, they're having to do that urban re-greening.

There are these exciting pockets of commercial areas where we are seeing the order flow there. We do need that site activity to pick up, as I say, so that weather improvement will help that, but certainly some pockets of opportunity that we see.

Joe, do you want to talk about M&A?

On the M&A front, really two sides. One is sort of the process and the other is the targeting, if you will.

As you can see this year, obviously with last year's acquisitions, we're quite pleased with those and they're the types of companies that we're looking for, right? Ones that expand our portfolio, that allow us to bring more solution and growth capability in the group, that some may bring access or strengthen access in a particular market as with the education sector.

The one thing that they didn't do is actually increase our international exposure in the short term, which has been a key part of our M&A strategy, and we continue to cultivate that. We've got a really good corporate team that Martin leads, he'll be here afterwards, you can ask him as well.

We continue to increase our targeting and so we've expanded our pipeline intake, if you will, the universe of companies that we're running the rule over. You'd have heard us say in the past it's sort of an 80-plus funnel, it'll be a three-digit funnel, clearly, of things going in.

In our experience, that's what you need to do. You have to actually be cultivating quite a bit in order to find the right targets and always have a pipeline.

You will see us continue to obviously look at UK opportunities, but our focus increasingly on Europe, on Central and Northern Europe, and to feed both Water and Climate, he's working very closely with both teams there. Look, I can't obviously tell you much about exactly what's going to come down the pipeline or the timing, that is a hard thing to predict, as are a lot of things lately, but we are very active in the space.

The only other thing I would say is that we've demonstrated a disciplined process to integration with both of these acquisitions last year. We have a playbook that we run and we've been refining that, and I'm really pleased to say that the Water and Climate teams did a brilliant job of integrating these two acquisitions and they are on or ahead of our initial expectations, so that's been really pleasing.

Sorry, Charlie Campbell at Stifel. Maybe a couple of kind of medium-term questions really, largely around ventilation, I think.

Just wondering when the Future Homes Standard might start to bring through some extra volumes if you had any more thoughts on timing around that. Also kind of a similar idea really around Awaab's Law, obviously public sector now, but there is a thought that might be expanded into the private rented sector.

Any thoughts and developments around that? Thank you.

Joe, do you want to start us off, and then we'll come to

Lee

on Awaab's Law? Sure.

Yeah. Future Homes Standard: as we've been talking about this for quite a while, it is obviously the legislation's been delayed, I think there have been other priorities.

We're very heartened by the Warm Homes Plan because it does show the government hasn't abandoned the green agenda and this is a key piece. What I would say, interestingly, is what we've seen actually on both businesses is the housebuilders are continuing to put in place the work they need to do to be ready for it, and in many cases, they're actually, some aspects, building ahead.

We've sold in the thousands of sites with underfloor heating to some of the larger and mid-sized developers, some of those are being installed as we speak. I mentioned Passivhaus earlier, it's quite interesting.

You see it more prevalent in Scotland, but also some of the developments that are either premium or with more proactive sort of local areas where that's quite attractive, and that drives you in the same direction. Look, we're doing the work, we are ready to scale up, but some of the activity is happening in advance of that.

You want to say a few things about Awaab's Law?

I'd once jump off from where Joe just left you. Many of the people that I meet are trying to predict a regulatory environment that's not in place, but they already have inflation.

Actually adopting these ways of working is more prevalent. People are moving to the Future Homes Standard because the no man's land in the middle is very expensive, very expensive.

We're seeing adoption because people are trying to predict. Now adoption has good signs and bad signs.

If you take Awaab's Law, it's actually the loss of somebody's life. At the end of the day, local authorities grabbed that and through 2024 and 2025, council-driven homes started to adopt more ventilation.

The challenge was the ventilation systems that were being adopted, the variability in their performance probably wouldn't stop the mold spores that killed that young child. It's up to suppliers like us in a bit of a no man's land to actually take people to make better decisions about what type of ventilation units there are, where sometimes there is a law in place, but how you execute it is a little bit gray.

That's what we're busy doing, creating the ventilation units that would stop the mold spores in the first place, and then educate the authorities and the installers, and if this did go to private landlords, on what good looks like, which is currently a gap.

It's an interesting point. It's something I've said before to some of you on the Future Homes Standard, too.

A lot of these cycles are actually the beginning of innovation cycles, not the end. What we're installing in houses 5 years from now will be better than what we're installing next year, and I think that's really the point.

We can continue to innovate and improve and bring better solutions for the developers and, importantly, the homeowners.

Great. What other questions do we have?

Anything online?

Any online questions? Nothing from the webcast?

Okay.

Last chance then in the room for anyone who's got a question, otherwise we'll finish up.

Look, thank you all for—

Oh, we—oh, just as

I can—go on.

Max from Aubrey Capital Management. If you could just help us, I know the outlook's quite good for Water, what sort of drop-through percentages could we expect if we do see, let's say, 5% volume improvement this year, this coming year?

Yeah. As a group generally, we talk about a 30% to 35% contribution drop-through from incremental business.

That does vary then, you can adjust that up or down probably based on the chart I showed earlier on, right, with the different margin profiles, although we won't talk specific margins for each of our businesses. It's a really strong operating gearing that we have, and the group maintains at least 25% capacity to manufacture more if we see a recovery in the markets.

As volumes increase, we can see a clear path towards that over 20% margin target. Okay?

Which actually is a great kind of wrap-up. If I go back to the investment case, we're committed to driving above-market organic growth, augmenting that with fantastic acquisitions that expand our ability to bring solutions and to serve additional markets.

That sustainability is at the heart of everything we do. We serve a large market here in the UK and one that stands to be significantly expanded as we expand our global presence.

We remain committed to hitting our 20% plus operating margin. Simple mass tells you both of our divisions need that target as well, and we're confident both of them have the ability to get there.

Making sure that we deliver really good returns on invested capital and that we redeploy that cash flow, that excellent cash conversion that we have and will continue to strive for into both good organic growth investments and the type of acquisitions that you can go hear from upstairs. On that, thank you all very much for coming.

Appreciate this was slightly more than our normal presentation, but I hope it was really useful. We've got four different demonstrations and some of our own people here just to tell you a bit about it.

Any of you can stay, feel free to have a coffee and Danish on us, and we'll see you upstairs and we'll be around for questions. Thank you very, very much.