1. AGM

2. Agenda:
Top level overview of performance 2017/18
2018/19 YTD Performance
Update on Sales

3. 2017/18 Performance Revenue achieved £2.89M Loss after tax £100.7k
A Difficult Year
Predominantly created by retardation of order award July – Dec 2017 c£1.1M
Software and manufacturing teams under utilised however staff retention key due to anticipated order intake
Order intake returned to normal Jan-June 2018 however too late to impact 2017/18 result
Resource restructured early 2018 to align to future projects, caused temporary lack low in mechanical
resource

4. 2018/19 YTD Performance Strong order intake Jul 1st - Dec 1st 2018
Quotation level higher than ever at c£16M quoted YTD 5 months
Current open Opportunities c£22M
Significant increase in hourly bookable resource – key to profitability
Addition of 6 mechanical engineers (5 to 11)
Addition of 5 Software engineers (2 to 7)
Addition of 2 Manufacturing engineers (7 to 9)
Use of external mechanical design team to support current work volume (6 People)
Overtime being worked most weekends (providing 10-15% extended hours)
Resource utilisation at highest level for a number of years (average 90%+)
Resource and skill mix optimised for today’s project makeup
Overhead largely unchanged during 2018
Will look to add additional project engineering resource early 2019

5. 2018/19 YTD Performance TED…
Integration of Thomson Engineering Design into QM Systems Companies
TED now strengthens Rail Systems Facet of QM Systems
Development of International Sales Channel’s key and underway
Recruitment of International Sales Manager
Expect upturn in UK Rail infrastructure market from April 2018 onwards
‘In house’ provider of fabricated and machined parts to group and associated companies
Requirement to increase manpower to meet increased demand
Need to grow output to drive contribution and establish long term profitability

6. Sales Update 2018 Number of orders YTD 45 Highlights
Increased repeat business as our market share has grown within existing accounts
Acquisition of significant new clients (WHA, Penso, Cox)
More profitable channels of business (lower risk projects resulting in higher margins Cox, Penso)
Increase in business across a variety of industry sectors (Automotive, Rail, Aerospace, Retail, Building services, Off road vehicles, Oil & Gas and more)
Established key partnerships that provide an additional sales channel (ABB, Kuka, Keyence)
Quotation numbers 2018 = 17 x quotes per month average
2018 Number of orders YTD 45

7. Business split from exisiting and new business
The retention of customers has proved key to an increase in profitability as we have established working systems with our customers considering their business constraints and needs. This has lead to an increase in QM System’s efficiency and therefore an increase in profitability.
This has allowed the sales resource to focus on new business. A balance of retention and new sales is critical to both the growth and profitability of QM systems.
Not all our customers have a year on year enquiry. The larger production lines tend to be one off projects whereas the production cells (£200k-£500k) tend to have more frequent need for our services. That is why a balance of new and existing clients is key to our success.

8. Sales update Addition of Internal Sales Engineer
Sales Manager support for quotation preparation
Production of 2D and 3D conceptualisation
Supplier liaison
New website released in early 2018
Significant increase in traffic to sales through website
Increased use of social media to ‘sell’ our capability to the world
The pipeline contains enquiries due for award in next 6 months of in excess of £18 million, including a number of large projects
Plan to recruit an additional Sales Manager early in 2019
Sales team currently saturated
Need to maintain opportunities to facilitate growth and stability
Targeted Clients
Focused on partnering approach
New sectors as well as expansion into new technologies like automated Carbon Fibre manufacturing
Recent award of grant from Innovate UK for a consortium automating factory based housing manufacture

9. Customers: Frequently working with major blue chip companies.
Including
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10. AGM