00:02 Good morning, ladies and gentlemen. My name is Will, and I will be your conference operator today. At this time, I would like to welcome you to the Ferguson PLC Full Year Results Earning Conference Call. All the lines have been placed on mute to prevent any interference with the presentation. At the end of the prepared remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. 00:32 I would now like to turn this call over to Brian Lantz, Ferguson's VP of Investor Relations and Communications. You may now begin your conference call.

00:43 Good morning, everyone, and welcome to Ferguson's full year earnings conference call and webcast. Hopefully, you've had a chance to review the earnings announcement we issued this morning. This is available in the Investor and Media section of our corporate website and on our SEC filings webpage. A recording of this call will be made available later today. 01:04 I want to remind everyone that some of our statements today may be forward-looking, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Additional information is included under the legal disclaimer in our earnings announcement this morning. 01:22 With me on the call today are Kevin Murphy, our CEO; and Bill Brundage, our CFO. I will now turn the call over to Kevin.

01:31 Thank you, Brian, and thank you to everyone joining us on the call today. Let me begin by saying we could not be more proud of what our thirty one thousand associates have achieved through the challenges of fiscal year twenty twenty one. 01:44 We continue to serve our customers, while protecting the health and well-being of our associates. We generated strong growth, particularly in the second half amid industry-wide supply shortages and inflation. We continue to invest in talented associates in our global supply chain, product breadth and depth, and digital solutions, while growing our dividend, investing in high-quality acquisitions and returning capital to shareholders. 02:12 Now, turning to today's agenda, I'll kick things off with the high-level results and some key accomplishments. Bill will provide you with an overview of the numbers, then I'll come back and give you a quick overview of how we're leveraging our strengths in the market. And finally, Bill and I'll be happy to answer all of your questions. 02:32 Ferguson is successful because of our associates and our baseline commitment is to create a safe and healthy work environment for all. We will continue to embed safety as a core value driver in everything that we do. We're pleased that our recordable injuries continue to improve with our Group total injury rate and our lost time rate showing strong improvements. Our teams delivered exceptional sales and profit growth in fiscal twenty twenty one. 02:59 Revenue of twenty two point eight billion dollars was fourteen percent ahead of last year and thirteen percent ahead on an organic basis. This accelerated market outperformance was driven by our ability to deliver on our customers' projects amid unprecedented industry-wide supply chain pressure. We remain very focused on continuing to ensure high levels of availability for…

07:49 Thank you, Kevin, and good morning or afternoon, everyone. I'm pleased to present the Group's full year results, which demonstrate strong progress achieved during the year. The numbers on the accompanying slides are for the continuing operations of the Group, comprised of the U.S., Canada and central costs. 08:07 Total revenues in the year were up fourteen point three percent and we expanded gross margins by sixty basis points with further expansion in the second half, driven by our ability to service our customers, while managing price inflation. Costs were well controlled while we continue to invest in the business, resulting in good operating leverage for the year of sixty basis points. 08:29 Underlying trading profit of nearly two point one billion dollars increased thirty one point eight percent, just over five hundred million dollars with underlying trading margins progressing one hundred and twenty basis points to nine point two percent, which is a record for our business. Headline earnings per share increased by thirty five point five percent, principally due to the strength of trading profit growth during the year. 08:53 Taking into account the Group's prospects and financial position, we are pleased to propose a final dividend of one hundred and six point five dollars. This brings the total full year dividend to two thirty nine point four dollars, an increase of fifteen percent, reflecting our confidence in the business. 09:12 The balance sheet remains strong with leverage of zero point six times, and we have announced today our intention to commence a new one billion dollars share buyback over the next twelve months. 09:23 The U.S. business mirrors the Group results with a strong performance. Total revenues grew thirteen point nine percent with organic growth of twelve point eight percent. Price inflation averaged approximately three percent…

20:11 Thanks, Bill. Before we close, I'll touch briefly on our core areas of investment that allow us to make our customers and their projects more successful. I left off a moment ago speaking about our end markets. At Ferguson, our purpose is to take our customers' complex construction projects and make them more simple and successful. And over the past decade, we have very intentionally positioned our business to serve an attractive balance of residential and non-residential end markets. Just as important, across those end markets, we're approximately sixty percent RMI and forty percent new construction. We really like this mix for the favorable demand balance that it brings. 20:59 I'd like to focus the next few minutes highlighting the strengths that enable us to consistently outperform in these end markets. There are four distinct competitive advantages that cut across our company, and together enable us to serve our customer groups better than anyone else. They ultimately make our business truly unique and differentiated in the minds of our customers, our suppliers, and our associates. 21:25 Our objective is always to make our customers and their projects more successful, while expanding our role in the value chain. Everything starts with our associates, who are truly the intellectual capital of the business. For over sixty five years, we've invested in recruiting, training and developing the best associates to drive above-market growth that in turn fuels future opportunities for them. 21:49 In a service business like ours, everything starts with training and development within an inclusive environment for all of our associates. And while personal relationships are critical, going forward this will not be enough. And as a result, we're also building the best digitally enabled customer relationships. We are already using technology to make both our customers and our business…

29:56 [Operator Instructions] Our first question comes from Elodie Rall from JP Morgan. Your line is open. Please go ahead.

30:15 Hi. Thanks for taking my questions. Good morning to you. So, my first question would be on the evolution of your shareholding base. I know I have asked that question in the past, but given you confirm the listing in spring, I was wondering if you've seen some evolution in the geographic peak of your investor base more recently? 30:40 And my second question would be on the working capital variation that we've seen. So we've seen a large outflow on investment in inventory and supply chain constraints, I guess. So how should we think about it? Do you expect the trend to continue in twenty twenty two or to normalize to previous year's levels? Thanks.

31:06 Yes. Good morning, Elodie. This is Bill. Thanks for the questions. First off on the shareholding base, we have not seen a significant move in the geographic split of the shareholding base since the additional listing was live in March. So that's been relatively consistent to this point. 31:25 And then from a working capital perspective, as noted, yes, we have invested about an incremental eight twenty five million dollars year-over-year in inventory to offset those supply chain constraints and limited product availability that we're seeing. 31:41 As we look forward, we don't see anything in the very short term, i.e., for the rest of this calendar year, that would indicate that those supply chain pressures are going to alleviate. So, I would anticipate us running with additional investment in inventory through at least the end of the calendar year, likely into next calendar year. And we'll just continue to take a very disciplined approach around working capital as we always have. And I would expect that to alleviate and us to bring that working capital down once we see those supply chain constraints start to ease.

32:16 Yes, Elodie, this is Kevin. To build on what Bill was saying, when we think about the inventory levels that we're keeping in our branch network most specifically, it really is taking up for those supply chain challenges. So I think at the third quarter we talked a bit about what our inbound vendor fill rate was for our top twenty DC vendors, and it still sits below thirty percent on time and in full. And our branch in-stock rates are still hovering in the mid ninety. So providing good day-to-day availability for our customers. But maybe as importantly as we take our role in the supply chain really seriously, the sporadic nature or the inconsistent nature of inbound fill rate we have to keep the right product for the project as a whole until such time as the project is ready for full delivery. 33:11 I mean, if you think about a typical residential construction project, just in our residential trade business, it can have upwards of two hundred different line items on a single-family home. And so making sure that we have the right product at the right time and are storing it for our customer is a huge part of our value proposition in the supply chain.

33:34 Great. Thanks very much.

33:36 Thank you, Elodie.

33:42 Our next question comes from Keith Hughes from Truist. Your line is open. Please go ahead.

33:49 Thank you. A question on the statement in the outlook portion of the release. You talk about the headwinds from inflation in the cost base moving forward, offsetting operational improvements. You seem to have done incredibly well so far in terms of passing through inflation to customers based on the results. Do you think that's going to get more difficult? Or what exactly are you referring to there?

34:14 Yes, Keith, good morning. This is Bill. I'll start and then Kevin can jump in. To your point, we've been very pleased with our ability to manage price inflation, particularly over the last couple of quarters in the second half of the fiscal year. And you've seen that reflected in the step-up in gross margins. Just thinking about it from a year-over-year perspective, we grew gross margins by one hundred and ten basis points in Q3 over the prior year. And then that stepped up to one hundred and sixty basis points in Q4. So really pleased with the work of our teams in the field. And I think that demonstrates again the product availability that we have and the strength of our supply chain. 34:54 We see those -- as we've seen inflation increase, as we mentioned, growing to eight percent in Q4, we see those characteristics holding true as we enter into this fiscal year. And so, I think there is a pretty supportive pricing environment, particularly in the first half of this fiscal year. As we turn to the second half of the fiscal year, the comparables get tougher, both from a revenue perspective, inclusive of inflation, and those gross margin comparables get tougher. 35:21 So I do think you'll see a bit of a difference kind of half one to half two, but again, we think from an overarching perspective pleased with gross margins and how they've stepped up, really pleased with how that dropped through to the bottom line with one hundred and twenty basis point expansion in trading margin. Again, which is a record for our business at nine point two percent. And we're going to work diligently to maintain that trading margin from a full-year perspective as we move forward. 35:53 And Keith, when you think about the operational cost side of the business, just like many of our competitors and even our customers are feeling the pinch from a labor perspective, and what rising wages look like. There certainly will be some pressures that will largely be offset as we think about productivity, but also in the rising price that Bill referenced from an inflation perspective. 36:17 Typically and predominantly what we're seeing is, pressure on, call it, the less than one year driver and warehouse associate. The culture of Ferguson is extremely strong and so when an associate comes on board and is with us for more than a year, there is a great likelihood that that is a career orientation as we look forward, but that less than one year and the competitive environment for that type of associates out there and it will have some degree of cost pressure as we think about wage growth in our business.

36:48 Okay. So this is not about the ability to pass through prices, this is about some of the operational issues, labor and everyone is -- in this industry is dealing with right now. Sounds like [Multiple Speakers]

36:58 Yes. I think, we think about it in two different areas, Keith, the operational cost base as it relates to labor and productivity savings that we will have as we move forward, offsetting that. And then as we think about commodity inflation easing, what that can mean to gross margin overall. But our ability to pass through price in the near term on inflation still remains very much intact. As we talked in the Q3, it's not easy, it has a lot of hard work, it has a productivity drain on our associates as we look to renegotiate and work through with our customers and our customer's customer, but we have no doubt in our ability to continue to do that.

37:43 Okay. And then a final question, the -- you talked about some of the fill rates in the nine something percent, right? This is pretty high considering some of the shortages we're seeing across building products. Do you feel like you missed any meaningful revenue in the quarter from shortages or were you able to get at least most of what the demand was?

38:04 We have seen some project delay in terms of shipment waiting on some inventory to come into the system. We do not feel like we missed out on revenue due to supply chain shortages and our relative ability to get product for the customer. In fact, quite the opposite, we've seen enhanced share gains because of that product availability in our associate base and our supply chain. As we look into the near term though, what we're seeing is, customers and our customers' customer placing orders and getting after product ordering cycles earlier to make sure that they have access to product when their project is ready to go.

38:50 Okay. Thank you very much.

38:52 Yes. Thank you, Keith.

38:56 Our next question comes from James Rose from Barclays. Your line is open, please go ahead.

39:02 All right, good morning. I've got two please. The first is on the supply chain. When do you think the manufacturer fill rates and general availability levels could get back to normal? And second question is on, when you look at branches on a like-for-like basis, I mean, just in the second half, they are seeing round about fifteen percent volume growth year-on-year and they've already run pretty efficiently. Are you still confident that you've got headroom for further like-for-like growth in the branches without having to add incremental investments?

39:36 Yes. So, James, thank you for the questions. On the supply chain normalization, we keep, as you might imagine, a very, very close eye to when we are seeing that fill rate improve, when we're seeing completion of POs coming into our distribution network more fully. And we haven't seen any easing of that supply chain pressure right now. We believe that continues likely through the calendar year and perhaps into the first calendar quarter of next year, but we keep a pretty close eye on it. And, again, making sure that we have that inventory closest to the customer inside that branch network for fill rates has served us incredibly well in the past several quarters.

40:24 And then James, maybe to address your question on headroom and volume growth in the branch network. Yes, to your point, if you exclude inflation, volumes were up roughly fifteen percent in Q4. I think what that's demonstrating is the strength of our overarching supply chain and our distribution center, as well as our MDC, Market Distribution Center and ship hub supply chain environment. So, as you know, we are investing and trying to put product closer to the customers and we are opening MDCs. As Kevin noted, we just opened our Denver MDC. So you'll see us continue to invest in those types of facilities, but overall, we expect to have plenty of capacity to take care of market driven volume growth in the marketplace.

41:16 Okay. Thanks very much.

41:22 Our next question comes from Will Jones from Redburn. Your line is open, please go ahead.

41:30 Thank you. Three if I could, please. The first, just going back to gross margins, when you think about that step-up from the first half to the second, would you be willing to put any numbers around how much of that was -- what you might call inflation gain, I suppose versus underlying improvement or mix? And then on the issue of mix, when we think through to FY twenty twenty two channel mix, business mix, is there anything you'd point us to think around in terms of positive or negative, so how that might shape up in the year ahead? 42:00 The second was just going back to overheads and admin costs. And like all businesses, you’ve had some COVID-related savings in the last kind of eighteen months around travel utilities, health care, which you flagged before. I suspect not, but is there any quantification around that bucket and what you're thinking will come back in July twenty twenty two if indeed you are thinking that? 42:23 And then the last one was just revisiting the point you made on private label. Could you give us a latest update on the share of own brand within the business? And I think in the past, you talked about potentially growing that twice the rate of the underlying market. Is that still feasible? And just big picture, are the manufacturers okay with you as you make the transition? Thank you.

42:45 Yes. Thanks, Will. On gross margins, to your point, yes, a good step-up both in Q3, as I said, one hundred and ten basis points over the prior year, and in Q4 expanding one hundred and sixty basis points. I'd say the majority of that driven by inflation in our ability to manage that inflation, and we saw that as inflation stepped up from Q3 to Q4, gross margin stepped up further from Q3 to Q4. 43:10 Channel mix did come into play, particularly in Q4. If you think about what was happening last year during Q4 when we were going through the COVID lockdown periods, we had our counters closed to walk-in traffic for a period of time, as well as our showrooms. As those channels are now fully opened to both buy online, pickup in-store, but also to in-store traffic we've seen that channel mix improvement as those are higher margin channels improved year-over-year. 43:41 I see that continuing as we step into this fiscal year, but we absolutely recognized a thirty one point four percent gross margin in Q4. It does have the benefit of inflation there. Again, I think that continues, there's good pricing dynamics. We see supply chain constraints continuing as we go into the first half of this fiscal year, but as we get to the second half, there could be a tempering of that given the comparables next year. 44:11 And then from an overhead perspective, yes, we have flagged in the past we had some savings on health care and areas like travel and entertainment. As those come back, we do believe that we have efficiency and productivity gains to largely offset those, in addition to the wage inflation headwinds that Kevin talked about. So there will be some step-back in those costs, but we feel that we're well positioned to manage that as we go into fiscal twenty twenty two.

44:40 Yes, maybe to build a little bit, Will, on what Bill was saying. From an inflation perspective, not only were we able to pass through inflation, but as we think about the availability of product, we look at gross margin as the best reflection of the value that we provide in the marketplace. And because of that we were not only able to gain share in excess of what we historically have, but also able to grow gross margins as we were picking up work from customers who perhaps normally didn't look at us as their first source of supply, because of what that capability was. That's hugely important to us, because it also starts to cement further relationships for a more long-term relationship with our company. 45:26 In terms of the channel side, we continue to see showrooms and counters growing faster than the core of our business, which is also beneficial to gross margin as we go forward. But we believe getting back to that, call it, ten basis points a year is important for us. 45:43 If we shift gears to the private label side of the question, we remain roughly flat at about nine percent of our overall revenue base. We continue to look at growth in that area via two means. One is product development and where are those opportunities for us to grow inside of brands that we have or the development of new brands inside of our customer groups. We highlighted Durastar today, that was one. 46:06 But we also grow by acquisition, and we acquired a fantastic company called Amerock in the cabinet hardware business this past year, which also allows us, not just to grow that business more generally, but also, specifically, through our counter and through our showrooms, as well as through our different customer groups and channels. So that's a dual-track growth strategy for us on the private label side. 46:33 On the supplier relationship, we still feel very good. I mean, obviously, still ninety one percent plus of our revenue is driven with those branded relationships. And even as we look at private label development, oftentimes that's done in conjunction with our OEM suppliers who are making the product for us and allowing us to take it to market under our own brand so that relationship remains solid.

46:59 Great. Thanks a lot.

47:05 Our next question comes from Kathryn Thompson from Thompson's Research Group. Your line is open. Please go ahead.

47:14 Hi, thank you for taking my questions today. Tagging on to the really manufacture product or private label initiatives, and I'm glad you brought up about the cabinet side, but that was something I wanted to dig a little bit more in terms of -- I totally get you're expanding the offering, understand the value-add, but what are the major drivers in choosing which categories to focus? When I look at other distributors like a PoolCorp for instance that have gone a little bit more into the private label side, it's a very specific type strategy, but if you could tighten and help us better understand really the core fundamentals for the categories to focus it will be helpful. Thank you.

48:03 Yes. Kathryn, I mean if you take it -- thank you for the question, first of all. If you take it at the essence of what Ferguson is, we really live to make a complex new construction, an RMI project more simple and successful for the customer and for our customer's customer, and we do it from the very beginning of the project to the very end, and the design work all the way through to the first shovel, turning dirt and installing pipe, to the last appliance install as were closing up a project. 48:34 And so, as we think about what categories to get into, it is what product categories are going to make us more relevant for the share of wallet for the particular customer group that we're focusing on. And cabinet is one of the larger areas inside of a kitchen remodel, which is a core part of what we do inside of our customer base. And then we also look at what makes us more relevant on the project as a whole. And that's how we decide around expansion in customer groups. What is that next most relevant thing on a project for an owner or a general contractor that also has margin attributes that allow us to add value in the supply chain and get paid for that value. And so, that's how we think about both expansion in product categories, but also in what customer groups we need to go after in the overall project.

49:31 And for these -- using the Colorado acquisition as an example, for products such as cabinets, are you -- given the changes in the supply chain, given the changes in the post-COVID world, is there a propensity to focus on more domestic manufacturers, are you thinking beyond the U.S.?

49:53 Yes. So the Colorado actually acquisition you're talking about is Kitchen Showcase and that was not an own brand acquisition, it was a cabinet acquisition principally in the residential new construction sector. The private label acquisition that I was talking about was Amerock, which is in the cabinet hardware side of the business that does a tremendous amount through online activity and our showrooms. So that Kitchen Showcase acquisition as well as the acquisition we made in Florida in the cabinet business is not an own brand acquisition.

50:32 Okay. As far as private label, is your bogey still in kind of the mid-teens to upper teens in terms of mix?

50:41 Yes. So we don't put it and target on it, we work to grow it at about two times the rate of Ferguson's core growth rate. Again, going back to an earlier question, needing to make sure that those branded supplier relationships that we hold so very dear and have for over sixty five years that it's done in a methodical way. And so that still remains our focus. We didn't accomplish that this year, but over the long haul, we think about two times the Ferguson growth rate is the right place for us to be.

51:15 Okay. And as we look at the ongoing debate for a U.S. infrastructure bill on the traditional side, what if any changes do you have in terms of what the potential impact could be for you, be it your Waterworks division or elsewhere? And for -- any other color, any other update in terms of what that may mean for Ferguson.

51:46 Yes. If we take a step back and look at what we see right now in terms of demand, the market is still pretty healthy. The indicators from a residential and a non-residential perspective look good. We're very confident in the medium term in terms of what these end markets represent, not the least of which is residential when you think about the under building of housing units as well as what RMI might mean, given a post-COVID world on residential. There is pressure out there clearly from a supply chain perspective, but also from a labor perspective. 52:18 If I take that against an infrastructure bill, assuming that everything goes well and gets passed, we will look to see what is in there and what the details are around the plan. It will benefit us from our Waterworks business, which is growing quite solidly right now at thirty nine percent in the fourth quarter across public works through residential and commercial. We think there's good opportunities for us inside of that. There is indications there will be about one hundred and eleven billion on the water side with good focus on what lead service lines look like. That's a great place for us, there will also be good roadwork, presumably, which will have erosion control, soil stabilization, storm water management attached to it. But it could also be in the areas of school work, airports, good commercial projects that take the whole of Ferguson and provide us with good tailwinds. So we're looking forward to it, but we also need to see what the detail is and what the timelines look like.

53:24 Okay. Great. Thank you so much.

53:26 Thank you.

53:29 Our next question comes from Yves Bromehead from BNP Paribas. Your line is open. Please go ahead.

53:37 Good morning. Thank you for taking my questions. The first one was just on the incremental margin. Obviously, it's been a much better underlying environment here, but I think the last time you spoke about sort of your expectations into twenty twenty two, you were obviously already sort of insinuating that the incremental margin will start to come back down from sort of the double digit that you have achieved in twenty twenty one. As we are looking to H2 probably of next year, I know it's quite far away, how should we think about sort of the ongoing level of incremental margin for the Group? Do you expect some normalization, or can you still continue to hit sort of the ten percent plus range? 54:20 And then my second question is, I understand you need more time and details and granularity into the infra plan, but equally it seems that you are quite aware of these sort of amounts that will go in certain categories. When you think about the overall project, what is the total size of the market that directly concerns you? You mentioned the one hundred and eleven million in water, but is there any other thing in there that we can think as this will be incremental demand flows for Ferguson in the next few years? Thank you very much.

54:57 Hi, Yves. Good morning, good afternoon, and thanks for the question. I'll start on question one. In terms of incremental margin, and if I just take a step back, to your point, in a typical year, what we try to achieve is growing our gross margin by ten basis points year in, year out, and getting more productivity out of the cost base to drive trading profits faster than sales and to generate incremental trading margin. 55:22 As we've said in the past also, in periods of higher sales growth we're able to leverage that a bit more and drop more to the bottom line and you've seen that this year, both from a labor and cost productivity side, in addition to the expanded gross margins which we've talked about. 55:40 So really pleased with one hundred and twenty basis point step-up in trading margins for the year. As we go into next year, I think, again, fiscal twenty twenty one was a bit of a story of two halves. I think you'll see fiscal twenty twenty two being very similar in terms of strong momentum heading into half one. And then there is tougher comparables coming into play in half two. We expect for the full year, as we've said, that our operational improvements can broadly offset any impact of cost inflation and certainly, for the full year, after stepping trading margins up by hundred and twenty basis points it will be a great result for us to hold on to that one hundred and twenty basis point improvement for next year, and we're going to work very diligently to maintain that. But I wouldn't expect large incremental flow through for the full year on sales growth next year, given the step-up this past year.

56:37 And, Yves, on the infrastructure side, I can't effectively give you a translation of what one trillion dollar bill if passed would flow through in terms of tailwinds to our business. What I will say is, generally speaking, we feel good about the markets, both residential and non-residential, and what their growth characteristics are. Our customers and our business will move to where those green shoots are. 57:02 And so, as this plays out and hopefully gets passed, it will provide a tailwind for us. What -- even a water project might represent in terms of product revenue growth, really depends on what type of project it is, a water treatment plant versus a pipeline, an airport versus school retrofit. So it really does depend. So apologies, I can't give you a more succinct answer on that.

57:33 No worries. Thank you very much and have a nice week. Bye-bye.

57:36 Thank you.

57:37 Thank you.

57:41 Our next question comes from Gregor Kuglitsch from UBS. Your line is open, please go ahead.

57:49 Hi, good morning to you, thanks for taking my questions. So I've got a few, please. So the first one is on the warehouse efficiency. I was quite interested in your comments around Denver, so I missed -- you were sort of implying you're going to change a lot of your warehouses over -- distribution centers over to that sort of new modus operandi with the robots and stuff. So could you just tell us perhaps, sort of high level what's the efficiency, say, with a ten year old warehouse to this and kind of what's the efficiency and how quickly will you renew the fleet basically to get to sort of newest technology? 58:26 Sort of related to that, so you kind of flagged your margins this year will be nine point two -- well, nine point two last year, you are expect them to sort of be stable. Is this sort of overall picture that you think that is the right margin level for the Group? I appreciate last year was like a massive step-up and now you're kind of saying, well, you hold it, or do you think that medium-term perhaps, there is more room to improve? I mean, I guess the example would be, for instance, warehouse efficiency measures in other regions -- that would be the case or not. 58:56 And then finally, just quickly, sorry, just to be clear on the U.S. GAAP and the sort of KPIs that you're talking to. I'm looking at the presentation, it looks a little bit different to what you reported. Am I right in understanding you're essentially moving back to a pre-amortization number on both the earnings and operating profit also under U.S. GAAP, sort of as your KPI that you're going to talk to? 59:20 And I'm sorry, one final question. Regarding the relisting, I appreciate your intention is -- the way this actually works, will you sort of do a soft call with your shareholders and see if you've got the numbers and then go for it, because I guess the risk is if you don't have the numbers it's perhaps a problem to then come back to it later. So I want to understand what you're thinking in terms of actually pressing the go button. Thank you.

59:48 Gregor I'll take the -- this is Kevin, I'll take the first question around the MDC overview. If I take it at the highest level, what we're trying to do is, we're trying to get the best breadth and depth of the product closer to the customer in market. What we do there from an operational efficiency perspective is, we save double touches from our regional distribution center, we save transportation costs in terms of replenishment to the local market and we give best breadth and depth fill rate for our customers. 60:20 Denver is a good example of it, they're averaging, call it, between three fifty thousand and seven fifty thousand square feet, we're going to roll out likely two to three a year, it's inside of our existing CapEx budget, and we're going to go to the major MSAs across the U.S. for local delivery, local pickup and branch replenishment. It's a very strong productivity savings for us. We'll also implement some of the robotic picking technology that we talked about that not only saves labor, but also is very environmentally friendly and efficient. So that's the plan overall, and why we're going about it. I'll let Bill take the second two.

61:02 Yes, Gregor. Thanks for the question. From an overarching margin perspective, I think the thing that we're most pleased about with this business it's a long-term sustainable growth in trading margin, and we don't put a ceiling on that. So while we've had a significant step-up and truly an exceptional year, rising to nine point two percent, we don't believe that's the ceiling longer term. We do believe over time we can continue to grow that and get more efficient. And again, we won't put a cap on what that is. But recognizing that we've stepped up a significant portion in a single year, I think we are mindful that holding on to that and diligently working to deliver that in fiscal twenty twenty two would be a great result. 61:45 In terms of your interpretation on U.S. GAAP, yes, you're exactly correct, we are planning on continuing to use a profit metric, both on the profit side and the EPS side that's very similar to our past practice. Just felt that after taking on some shareholder feedback remaining consistent, provided an easier transition for us and our shareholders as we migrate to the U.S.

62:10 Last question on [Multiple Speakers]

62:12 Yes. Sure. On re-listing and shareholder feedback, one of the things that we're really proud of is the methodical way that we have gone about this process as a company. And shareholders across the Board during the initial phases of consultation said, they wanted to hear from the Board what was in the best interest of the company. Thought that was fantastic, because the Board was then able to look at us focusing on our North American markets and what's the most appropriate thing for the organization. And we did do extensive consultation with shareholders prior to that initial vote, which passed with strong confidence at over ninety nine percent. 62:49 We continue to have good dialog on a consistent basis with our shareholders and understand where they are in the process. We hope that the methodical way we've gone about this would: number one, allow shareholders and have shareholders continue to hold us as an investment, but certainly offer time for those who can't to appropriately address that situation. We're going to retain the standard listing in London. And so, again, we will talk with shareholders all the way through as we move towards the spring of twenty twenty two for vote number two.

63:29 Okay. Great, thank you. Sorry, one follow-up. On the MDCs, is this -- can you guys tell us maybe a quick -- so maybe you'll touch on this in the CMD how many you've got to give us some context, and whether is this a sort of a new thing or whether you're converting some? I am a little bit confused in terms of the different numbers of DCs you've got at the various -- MDCs, RDCs, and then I think you've got shipyards or pipe yards, so if you could just summarize what's the position it will be great. Thank you.

63:57 Yes, Gregor. I'll give a little color on that and then, yes, you can expect us to give some more details as we get into the CMD. But if you think about it overall, we've got ten national, regional distribution centers. The MDCs that we're opening, the first one was Denver, we're opening Phoenix later this year and Houston is underway. So you should expect us to get up to a rolling pace of about two to three per year. 64:21And then as Kevin mentioned, we are retrofitting some of our existing larger facilities with better warehouse layout and design and robotics. So all of that is embedded in our ongoing CapEx cost and CapEx guidance, but that will be continued investment over the next several years.

64:40 Okay. Brilliant. Thank you.

64:46 Thank you all for your questions. I will now hand back to Kevin for the closing remarks.

64:52 Thank you, operator. And thank you all for your time today on the call. I guess, just in closing, we'll close with where we began. We are incredibly thankful for our associates in what they delivered in fiscal twenty twenty one during a really challenging year. And our top priority will always be maintaining their health and well-being and that of our customers and our communities. We're really proud of what the Group was able to do from a revenue growth perspective at fourteen point three percent ahead of last year, and that ramp-up during stronger demand in the second half. 65:28 As importantly, from a gross margin perspective, sixty basis points ahead of prior year, and the ability through hard work and product availability to pass through that price inflation and have a good gross margin result. Maintaining strong cost control, so that leverage, both on the cost base as well as from a gross margin perspective led to that trading profit outperformance. 65:51 So we're really pleased, we're focused on what the near term can bring us, we're optimistic about what that near term is with our Q1 entry at about the same growth rate as our Q4 exit rate. We'll maintain a strong and keen focus on what is happening with supply chain pressures, but most importantly, our ability to take a complex construction project and make it more simple and successful for our customer and our customer's customer. 66:20 So thank you for your time today. I look forward to talking again very soon.

66:26 Ladies and gentlemen, that concludes today's call. Thank you very much for joining. You may now disconnect your lines.