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so the chances are that any car you would have driven would have been at suntai and tested without technology it's very clear from the start so we are a company that supplies the automotive market but another company that actually provides any machinery that goes on to a car this is all about the testing and we do what we quite what the UK's very good at doing which is advanced engineering specialist advanced engineering is what we're really good at in this country and this is a snapshot of some of the products that we sell and we'll come unto a bit more detail about what they are firstly we supply advanced testing and measurement products to the global automotive industry anything to do with vehicle dynamics how your car drives whether it's pleasing or safe more recently we're talking about advanced driver systems and about systems and safety systems on cars computer vehicle models the industry is continually driving towards the virtual sign off one day they feel they be able to produce a car without ever producing the prototype that's their that's their goal that's their vision and ultimately at the bottom the one we keep hearing about is driverless car technology whether we believe it or not it's going to be something that's going to be introduced slowly over the next few years and it has to be tested it has to be made sure it's correct and safe and does what it says it does on the tin and in fact the image you see on the right hand side is a from the proving ground at Stuttgart for Daimler Chrysler well de mer now and that is actually their first prototype driverless car using an abd robot system so it does exist and it's been around in fact abd been doing driverless for 15 years this is taking the rest of the world to find out so who are we we based down there in the little space in the West Country near bath it was founded back in nineteen eighty-two and as the name suggests Anthony best dynamics there is an Anthony best if Anthony is a 79 they saw very much part of the company and to be honest he forms a bunch part of my R&D group because his ideas are still second to none we supply the rd divisions of all of the car companies in the world so any car company you probably think of what at some time of bought use were purchased and and serviced one of our machines as i said before none of our products are found on vehicles and more importantly maybe unfashionably we actually make everything ourselves so everything that we engineer design is actually made it our factory in bradford-on-avon and i guess you know in this in this country we've forgotten maybe how we make how good without making things and this is a good testimony to the fact that everything that we design we actually make ourselves and although we can make cars followed passed within two centimeter accuracy it's not a driverless car but we do help in their development we'll come on to why that's important as i said before all the top 20 car companies routinely use our products it's worth police in the landscape and the best way to explain this is that the bigger they bigger name the more we've sold to that customer and what you're seeing now is that there are car companies names will be recognized but also to the side you've got supporting companies tier 1 suppliers like Bosch and continental and equally thus there are testing places like fashion and nitsa so these are companies that are actually buy our equipment to test people's cars as well as the car companies themselves using the tools to develop cars and more frequently now there's companies in here called fa w and Great Wall and these are the Chinese markets what's happening at the moment is that the Chinese companies are not just happy to make copies of cars but they actually want to make their own domestic cars that are pleasing to drive and if you're going to do that you're going to need the tool kit that we supply because when you got the tool kit you can seriously think about making cars that actually will compete against the Western market let's have a look at the context obviously you can see they'll health care up there has been a massive spender in R&D what surprises a lot of people it's just how much is spent annually by the automotive companies on R&D and in fact if you look at the top 20 companies in the world who spend by R&D number one at the top is Volkswagen despite what you might be hearing they still spending an awful lot of money on R&D maybe they feel they can research their way out of their problems if you actually have a look at the other six in the in the top 20 you've got Toyota Honda General Motors daimler and fought so it so it's a it's a big mixture in fact what it has been happening recently now is for the first time we're seeing companies in our computing an electronics area starting to move into the automotive we've seen it with Tesla we're hearing it with Google there are other West Coast text based companies that are looking at the whole car industry because they don't call it cars they call it sort of personal transport systems but mark my word there's going to be a massive push over the next two to three years from the from the tech industry into the car industry especially when we start looking at electric car platforms I think when the fundamental things that's happened recently is this thing that's happened in in America with the with the diesel scandal in fact I always knew that there was a disconnect between the real world and the testing I never believed that someone would actually cheat it but what actually means now is that people are now looking at the electrical platform for the first time as a serious and realistic way of such driving power we're a growing company as you can see and know a couple of landmarks here the company was originally set up in back in 82 and through the 90s as a consultancy company and they provide a consultancy to anything to do with suspension braking systems noise vibration harshness what Tony on the team realized was that development was disappearing off off the off the shores as the automotive development was disappearing and the only way to stay engaged was to actually start making machinery that they could export and in fact the company started on a fairly good ambitious R&D scheme and started moving its business up but of course 2008 is when the automotive R&D budgets were absolutely slashed in fact what caught the company by surprise was was the severity of the reduction in spending and in fact there's a bit of inertia going through because these products take about a year to make but what the company did is that it kept all its staff on board it carried on with a quite a big program of R&D and a couple of fairly fundamental programs that was working with with some of the OEMs well actually happen was when the auto start to pick up the business drove out very quickly and in fact when I joined the company we had about 10,000 square feet of manufacturing and about 42 personnel and today we just gone past the 86 mark so in fact this already this is out of date and next year we have another 30,000 square feet of manufacturing and development space coming on stream the company IP owed back in what would be three years next week and it was an important point for the company because there wasn't really an appetite for a management buyout the directors who were there with technicians though technical people there were scientists they enjoyed the design but they didn't enjoy the actual running of the business after a couple of aborted trade sales it was considered that an IPO may work and in fact we're one of the first companies to go to the market for for some time there were a couple of aborted IPOs but we went in and because we had occurred story to tell we had a historical growth we had a story to tell about where we're going to be going and and so actually the the IPO was in the event quite successful not only ever been able to grow the profit we've being upside grow the revenue would be able to get a fairly good lift in revenue and you can see the company's turned in a very small loss in 2010 but ever since then it's been growing at a fairly profitable and sustainable rate this little blip here is the consequence of doing an IPO now if the costs associated with an IPO but we're recovered and we've carried on driving fact you put it in the context of the margin you can see here effect on our actual margin for the PLC for the operating company that's been going pretty well it's actually the drag that sometimes joining the market puts on you it's very important to control those costs so our geography we're pretty well split but if you look to this picture maybe seven years ago China really wouldn't have been in the frame at all in fact China has become quite a significant spender in the whole realm of R&D when we talk about Europe I'm sad to say we talk about Germany in Germany spending money that's where most of money's coming from and Japan is a big spender about 105 billion dollars a year that's been spent by the automotive industry 50 billion has been spent by Japan Japan is still a massive massive fur user and consumer or funding but the obvious here and very disappointing three percent from the UK and in fact this year is zero so the analysis the revenue will come on to some of the products but we have what we called track testing and laboratory testing and three years ago that would have been roughly 5050 it goes to show that the real drive in terms of vehicle safety and driverless cars has been driving our business and as a result the track testing has grown at a considerable rate it's not like the big lab equipment has not been selling it's just been staying where it is because we have a capacity issue inside the factory it's very hard to develop these products because you wouldn't fit them in this room they are enormous bits a kid as I said we IP owed on this a market in in May and 86 p and of late we've done quite well in fact actually to recently come here thinking today it's about 480 but I'm a bit to my colleague here I don't watch my stock if you look after the business if you if you under promise and over deliver and usually you can do those kind of things and there we are sitting there three years ago and knowing what's going to befall us so the financial highlights from our half year which was last last month is that we continue to grow in fact we've seen our revenues grow again this is the first six months of the year we continue to increase our profit one of the benefits we've had recently as we've seen the currency come back our way as an exporting company we have have to hold Chinese renminbi yen euros dollars and although we don't have any any sophisticated hedging mechanisms one of the beauties of holding cash is that you choose when to to change your money over further expansion of the support engineer has been very important one of the things I felt we had to do is be a bit more proactive about our business so we set up operations in Japan and in Germany and we've actually embedded our own support engineering out there as well every time we sell a machine every time you sell a robot that's one more machine that has to be supported and our recurring revenues come from six percent to about eleven percent this year so we're now starting to pick up the recurring revenue one of the most exciting things has happened in the last six months has been this tie-up with Williams Formula One Williams advanced engineering it's a driving loop simulator and explain a bit about it later perhaps more significantly in the process of building a new factory for Demeter's away from a current facility which will give us a head room to grow further so we're experiencing a lot of growth from drivers well the key things here really something called aid us a balanced driver assistance systems so what used to happen is that you had what they call passive safety airbags safety belts crumple zones what's happening now is what they call active safety the car is thought to make decisions for you there are emergency braking systems in the car there are lane departure warning there are even systems actually that bring you back into the into the middle of the lane lot of this technology is the prelude to what will become full driverless in at the moment it's becoming standard on most machines if at any car you buy from now on any small car large car will have some form of emergency braking system all that has to be developed all of it has to be calibrated can't deny the fact that the R&D spending is still increasing year-on-year and this is the big thing the the continued use of simulation modeling the continued requirement to move models quickly through the organization and use the simulation models in fact all of our machines generate the data that populate the vehicle model so a lot of machines give that empirical data to the engineer that allow him to determine what a good car is what it means in numbers once you know that you can start to design the cars so we're driving growth by investing in more capacity internally we're trying to get more regional and technical support out there and personnel where we hear the people talk about a people business it genuinely is we have 80 staff 840 engineers 20 software people in the last four years we've had absolutely zero turnover of staff we've got very good at retaining we're very good at motivating because this is where the innovational idea comes from this is where the company works and we be using our funds to leverage basically development of new products twenty percent of our revenue this year came from products that weren't even on the statute 22 years ago so we're very good at turning new ideas into products and getting that product pipeline and that is key and to be honest one of the things that the car companies are asked of us is not to be just a product manufacturer but actually to be a solutions provider they'll come to us with technical issues they're trying to resolve will build them the machine or give them the technology that lets them do that work more recently now looking at what they call remote proving grounds they want 50 cars when he ran a test track 24 hours a day with no drivers in them because drivers get tired that's one of the things were working on now with the car industry and we continue to explore new technologies in our area we believe our sector is the automotive R&D we want to stick to their knitting we have looked at other sectors we don't understand them we don't know what they about but we do understand alta motive those relationships and all motive taken 20 years to build so quick snapshot of what the products are I said I broadly split it into two areas you've got the track testing and this is the total testing of cars on a track and then the laboratory testing which are big bits of kit that actually test cars suspension compliance and suspension one of the big areas first now is his driver in loop simulator what I mean by driver in loop is if you got a situation where at engineers designed a car and he's taking it to a certain point on the computer the natural second point is to build a prototype and to test the prototype but wouldn't it be nice if you can get the driver back in the loop and drive the model and up until recently the simulators didn't exist that let you do that what we're looking at here is ultra realistic 4k video with motion platforms at but incredibly responsive any delay between what you feel and what you see on the screen will make you sick and that's the that's the issue is can you make a dynamic enough machine with low enough latency fast enough responses of course what we discovered is what we've been doing it for years is what our machines do so implying a lot of this technology into this simulator we've taken the Williams formula one platform and we're turning it into an automotive platform that's going to be used for the next 10 20 years and this is where the market is going simulation virtual sign off that's where the money that's where the budgets are being spent so we were in China a couple of months ago and we saw a bizarre street scene that what turned out to be our own hometown at Bravo Nathan it was an image that we had rendered for them and the were using it to hone and to develop their cars so it goes the show operationally oops can you see the map that is a map these are not random spots on a page that I that I there we are so our model is a distributor model it's worked very well for us but as we get larger we do need to take more strategic positions in some of the key markets so that in we have opened up a dedicated office in Japan we've now recruited into Germany and we're now looking at the US but our distributors are really people who are already supply into that market already understand that market but as we grow the business we're going to have to be a bit more proactive about how we support our business but we are in most of the Reno most of the major places where the automotive development is taking place our capabilities if you've got nothing else from this meeting just get this mechanical electronics electronics software we have all that in house and you need that in spades if you want to develop some of the stuff that we're doing you cannot afford to sub out some of this development it has to be done in-house you get driverless cars wrong it's driver shaped cars at the end of the runway that's what its people dying this is really where we come into our own we have very good graphical interfaces although we're using very complicated machinery we design it in such a way that a technician can use it so the the engineer can get down to the track start the testing straightaway because it's all set up in a certain way it's it's it's Karl's doing very complicated things but actually using fairly simple procedures to get them working and again manufacturing unfashionable these days but we make everything ourselves and we produce everything ourselves and that is actually my presentation I'm happy to take some questions questions anybody all da spans let's go there first weekend and then we'll go to the gentleman over here something about the electrically powered car market in your role in it going forward yeah I think what is exciting is that the electric car market is not going to be long to the traditional car makers if you are a company a large tech company with all the cash you can start with a complete clean sheet you haven't got any legacy issues in terms of engine plants or omission issues and I think as the market starts to look towards the driverless technology I think electrical systems lend themselves to that but the thing about it is that nobody understands dynamically how electric cars work and this is why we've got to start looking at you know is why we're developing newer machines to test electric cars are they four wheel drive all the motors in the in the wheels are they in the in the front some of the architecture you can look at is completely flattered architecture with no impedance huge amounts of room but there are safety concerns and that's really what it's going to be going to the next couple years but for the first time I think we just got that tipping point where electric cars will actually be a true reality yes but on a virtual in the virtual area can you talk a little bit about cash and cash flow you've got cash equivalent to h1 revenue I just wonder what you're going to do with it right this is obviously the results from the half-year we are cash generative company at this point in time we've got about 11 million in the in the bank six and a half is allocated towards the factory in the R&D and the rest will be allocated towards a more aggressive maybe Remini or a nascent mne policy sony for the first time that currently has grown to a certain point where it has the management structures in place where has the corporate structure and it has a baby a willing supplier base so I investor base to support the next stage of the company's expansion sorry it's business as usual you spoke I really want to coach too much messrs about not knowing other sectors I just wonder whether it was business as usual lordosis okay she's ahead of you yeah I think for sure that the the automotive island is where we are at but it's a it's a big pond and no other fish in those problems should be going after there's quite a lot of adjacent technology we need to be either developing or requiring I mentioned our machines generate data that go into the models watching we should be able to take those models and that's where the simulator business comes in it's taking those models and doing more with it so you give more of a sort of unsafe holistic approach but you can give an end-to-end approach when it comes to car development is your daughter book driving the expansion in terms of premises or is it the fact that what you're making is getting bigger and what we make is getting bigger but also our forward order book goes for 18 months we have very good good visibility on our orders because all the order cycle starts with a dialogue or conversation with the car company they're usually telling us what they're going to need so they get it into the budget that's how we engage the activity if we if we feel not having those conversations then we kind of know that we need to be doing something so will you be able to drive back the four daughters to 12 months or something delivery or without a doubt we've always had a problem with capacity in terms of manufacture and the new factory will give us that headway I would caution the fact that new factory doesn't um doesn't release a whole well head of unpinned demand it just gives us the head way to grow over the next three four five years question just down here mentioned about 86 current staff which seems quite lean given the growth so if you got a massive recruitment drive and you said you need a very specialist engineers so how do you see to manage that it is specialist engineering I mean what we have done is is set up more de facto manufacturing whereas before the engineer received the order built the machine engineers aren't very good at building stuff but technicians are and so we've got set up we're much more fish it now in the manufacturing cycle we bought those lead times down as it stands today with two hundred and seventy thousand pounds per head or revenue that's high I mean the national average is 130 which means we're sweating the asset one of the things we've been doing is putting in classical admin proper proper design proper manufacturing those things will bring those that dependency down that number is about right for us in terms of technicians and for the first time we're starting to subcontract some of the development out to other parties we don't have to make our vision systems or other people that do that and the simulator has been a good example of that we've been able to contract out some of the build of the simulator other third parties and that would be something that we're going to be doing more of Christian down the front the young sorry that in this country you don't operate at all um is that because you have rivals and competitors or no I just don't think we do the R&D that we think we do there are a few companies like Ricardo and Myra were very good but you know go to Germany and there's 17 of those I was in had paint his terrible picture but i was i was at in stuttgart at daimler in there testing plays a single thing and the guy says the 10,000 development engineers here he said see that building across the way there that's a 25 million pound crash laboratory so that building over there as a 40 million pound engine poetry it's just all the magnitude different to what we used to sorry to say you just joke jagah land rover in the UK than is it really here doing it yeah they set out to Myron Ricardo all right um could ask a question of it's a potential market opportunity basically automated scanners the last year is there a market for independent testing because obviously a lot of the figures and the fortunate focusing in produced by a lot of car companies well the big cam is not employed to me what independence is is used in January see those figures and weather opportunity there is an opportunity we don't test but actually the real world testing is about consistent testing on a road surface or a test track and robots do that so in fact it is a new market but I don't see it's a massive opportunity I think the issue with that we've got here is that the car companies have only followed the rules and the relaxed European style that was put in place which I can only assume was lobbied we've known for a while that the the data coming from the car is nothing nothing to do with what happens in the real world but that's not the car company's fault that the Volkswagen situation in Germany was but of course the thing about it in there was that all the Volkswagen diesels were brought back in and all the toilet of hybrids were brought back out so Todd I've had a great time in in America this year I think Ricardo actually were here a few months ago and said that they did a lot of emission testing and they're in testing its good with the manufacturers themselves testing the problem that they're testing is quite good yeah any more questions gentleman at the back oh you're passive company are you proactively where is the business come from does a car company come to you and say can you do this for us or do you go on to a car company and say we can do more for crash testing etc etc where Zika I think historically the passive was where it came from i mean my my background is much more about gearing up engineering and moving companies through those sort of growth phases and in the last couple of years become much more non-aggressive we've now developing products for the first time that normally we always built a product with an order so the order came in we developed it and built it these days there are adjacent products were starting to make which are now started you know we wouldn't do if it wasn't a market for it but we are embarking on some development programs quite new exciting products which we don't actually have a customer for at this time so that is much more aggressive but we've got a pretty good idea about where the market is going but the trick is we sit and talk and listen to our customer they tell us where they're going and the german companies are very good at giving us a road map they'll often sit down if you trust you they'll sit down and say this weather models are going but this is how our testing is going to happen so this is what's going to be happening in the next two years I would like you to look at this sector and in the historically would be never very good at looking at that we just been focusing on the bit was right in front of us you can always tell a key account because they tolerate your mistakes and we do do they indulge some of the stuff you get up to but when I joined the company what impressed me was a relationship they had with the engineers at the customer and in fact when it came to stay with us they didn't go in the meeting rooms they sat on the offices and they still do that so it's good it's you know I said it is definitely British engineering at its best and it's what we're very good at doing but we've always been anything about a bit hiding our light under a bushel bushel and quite often we bought out products and the German said well she told us ballet earlier because we've gone down a whole new route we didn't know you're doing this well we weren't sure you know if you like it don't be disappointed but that's changed you know I said why don't say well uh no no let's be bold about what we do because what we do is really good time for one final question anybody Oh two hands gentlemen in the back again sorry can you say something about growth opportunities in Russia yeah house quick none at this time we have our agency seminar and it coming up next week and one of the guys that can be over but he's saying to forget about things for a while you know when it when it when it calms down I think we sold 12 kasmin recently but it's just not happening Iran that's happening I certainly picking up there's a lot of pent up demand there but not not for us in Russia Golan assume he said that the founder and investors turn around is he no no he hid his wife owned thirty-seven percent and reverse the shares is in public hands yes it's got quite a long tail light showed noticed it's all a retail interest but the the companies that came in at the beginning of still in Nevada to their position but more recently we've seen a few stopping around so Hargreave Hale have come in my tongue have gone out but Artemis and the other companies all staying in there was a bit of both we raised two and a half million of of new money and two and a half of old money but actually both both porters of stock were oversubscribed and your market cap 70 million i think what ATT other I'm sorry and you've been on a row chairs quite recently of you yes we have us yeah thank you very much thank you