Accent Group Limited (AX1) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is David Gordon. And on behalf of the Board, it's my pleasure to -- as Chairman, to welcome you to the 2025 Annual General Meeting of Accent Group Limited. I'm advised that a quorum is present, and I now declare the meeting open. I begin today by acknowledging the traditional custodians and owners of country throughout Australia and their connections to land, sea and community. I pay my respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today. As we have done previously, today, we are holding a hybrid meeting where we can welcome shareholders in person as well as online via the Computershare platform. Those attendees joining us virtually can hear a live webcast of the meeting. In addition, shareholders and proxies attending virtually also have the ability to ask questions and submit their votes via the online platform. To ask a question, virtual attendees can submit questions at any time by selecting the Q&A icon at the top of the screen. Select the topic your question relates to from the drop-down list and then type your question into the text box. Once finished, please press the send button. Please note that while you can submit questions from now on, I'll only address them at the time when the relevant item of business is discussed. Please also note that your questions may be moderated or if we receive multiple questions on the same topic, amalgamated together. For those shareholders who wish to ask a question via the telephone, please follow the instructions below the broadcast. For our shareholders attending in person today, those in possession of either an orange voting card or a blue nonvoting card are welcome to ask questions, while those with a white site card are kindly requested to only observe during the meeting. If you believe you have not received the correct card, please go to the registration desk, where a Computershare representative will assist you. I'll give all shareholders who wish to speak a reasonable opportunity to do so, but please keep your questions to the matter at hand and as succinct as possible. Voting today will be conducted by way of poll on all items of business. In order to provide you with enough time to vote, I'll shortly open the voting for the resolutions on items 2 and 3. The resolution in item 1 carries no vote. As we announced to the stock exchange today, we've withdrawn items 4, 5 and 6 from the agenda, following engagement with proxy advisers and shareholders. For our shareholders attending virtually, if you are eligible to vote, once voting opens, select the vote icon and all resolutions will be activated with voting options. To cast your vote, simply select 1 of those options. There's no need to hit a submit or enter button as the vote is automatically recorded. You'll receive a vote confirmation notification on your screen. You have the ability to change your vote up until the time I declare voting closed. For those attending the meeting in person, if you are eligible to vote, you will have received an orange voting card at registration. If you believe you're entitled to vote and have not received the correct voting card, please see the Computershare staff at the registration table. To cast your vote simply complete and sign the back of the card. A Computershare representative will collect your orange voting card at the end of the meeting. I now declare voting open on resolutions in items 2 and 3. For online shareholders, the voting options will soon be activated, so please submit your votes at any time. I'll give you time and a warning at the end of all items of business before I move to close voting. Our CEO, Daniel Agostinelli, is unable to be here today as he's unwell and sends his apologies. We currently anticipate that Daniel will be away from the business for a number of weeks, and we have a strong senior executive team who will take on additional responsibilities during this time. Joining me here today are our Nonexecutive Directors, Lawrence Myers, Michael Hapgood, Donna Player, Dave Force and Anne Loveridge AM. We are also joined by our group Chief Financial Officer and Joint Company Secretary, Matthew Durbin, and Group General Counsel and Joint Company Secretary, Nikki Nuttall. We're also accompanied by the company's auditor, PricewaterhouseCoopers, represented by partner, Alison Milner, and a number of our executive leadership team and other Accent team members are also in the room. At today's meeting, we'll be considering a number of matters set out in the Notice of Meeting dated the 20th of October 2025. Before we address the resolutions set out in that notice, I'll make some introductory remarks and provide an overview of our FY '25 results and how we are continuing to create value for our shareholders. Our group CFO, Matthew Durbin, will then give the CEO address. I would like to begin by saying that in the context of a more challenging consumer environment, despite not delivering the results that we had hoped for, Accent Group delivered total company-owned sales of $1.46 billion in financial year '25 with a net profit after tax of $57.7 million. Over the past financial year, the company opened 54 new stores and its contactable customer base now sits above $10 million. The company remains focused on growth and return on investment for shareholders with banners such as Nude Lucy, Stylerunner, Hoka and UGG performing well alongside continued growth in the athletes food Hike DC and others. The company continues to invest in key areas as it maintains a focus on its growth strategy. the ongoing renewal and expansion of the store network, development of digital capability, growing our distributed brands and improving on our vertical brands are all investments that have made that have been targeted towards continuing the company's long-term growth trajectory. We also announced our strategic partnership with Frasers Group plc and are securing the rights to launch and operate the Sports Direct business in Australia and New Zealand. We are very excited about this opportunity, and I'm pleased to announce that our first store opened in Fountain Gate here in Victoria last Saturday on 15th November. I take this opportunity to acknowledge and commend the entire Accent team for their work, dedication, focus and energy. These achievements build and reinforce the company's strong and defendable market position as well as increasing our relevance in target markets across Australia and New Zealand. The Accent business today is scalable with future growth opportunities through online and new store growth, our large and diverse brand portfolio and our new businesses. Our business is flexible with proven capability to leverage digital and online reach and to quickly respond to trends through our diversified portfolio of brands across footwear, accessories and youth and lifestyle apparel. The market position of the business is also defensible. Our distribution relationships provide access to global product innovation and exclusive access to product. Our vertical owned brands add to product differentiation and support underlying gross margin growth. Turning now to the results. Total sales for FY '25, including The Athlete's Foot franchisees was $1.62 billion, up 0.8% on the prior year. EBIT of $10.2 million was down 0.2% on the prior year, with net profit after tax of $57.7 million, down 3.1% on the prior year. Gross margin percentage was 54.9%, down 85 basis points to the prior year. In financial year '25, gross margins were impacted by a challenging consumer environment and heightened promotional activity. While the company maintained disciplined inventory management, this focus placed additional downward pressure on margins. Over the last 10 years, Accent Group has delivered a total shareholder return of 9.7% per annum compounding. While we are proud that we've been able to deliver long-term growth to our shareholders, we continue to strive to improve. The Accent Group sustainability framework gives our commitment to ESG through 3 core pillars: our people, our responsibilities and our environmental stewardship. At Accent Group, we prioritized our people because they are the greatest asset, and their dedication is the foundation of our business. In financial year '25, our team completed over 600 safety audits in our stores. We also rolled out emergency response and respected work training for the team members, and we're committed to providing a safe working environment. And as such, we have strengthened our internal safety training program. Our responsibilities pillar centers on integrity and ethical practices. We are dedicated to supporting the communities we serve and protecting the information we manage. In ethical sourcing and modern slavery, we've continued to share with our partners and suppliers, our modern slavery statement and our ethical sourcing policies, which set the standards of what we expect from our partners and suppliers. We've continued our local community partnerships and events, which have been led by various of our brands. With data security top of mind, we have enhanced our antifishing measures and improved our critical incident response programs. Our environment pillar is a priority, and we're committed to initiatives that minimize our environmental impact. Through our recycling program with the Australian Sporting Goods Association, we have 370 consumer collection points in our stores and have successfully collected over 105,000 pairs of shoes for recycling. Finally, we've calculated our Scope 1 and Scope 2 emissions and are prepared to meet the new carbon reporting standards by FY '26. We also remain an Apco member for packaging compliance. Together, we're working towards a more sustainable future. I'll now hand over to Matt Durbin, our Group Chief Financial and Operating Officer, to tell you more about our results in financial year '25.

Thanks, David, and good morning, everyone. Total group sales, including The Athlete's Foot are now over $1.62 billion. In FY '25, we opened 54 new stores across all formats in Australia and New Zealand and maintained our total number of retail and online stores at 892 stores. Nude Lucy was the reception of several new stores with 44 stores now open, representing a fast-growing, world-class lifestyle apparel brand. We continue to see strong retail performance across Hype, TAF, Nude Lucy and others, a contactable database is now over 10 million customers. Pleasingly, our vertical brands and product sales continue to grow. Sales are now around $130 million, representing 9% of total loan sales. Wholesale sales were around $155 million, down 5.4% on the prior year. As already mentioned in April, the company entered into a long-term strategic partnership with Frasers Group plc to launch and operate sports direct in Australia and New Zealand. We will open at least 50 stores over the next 6 years. I'm happy to report that we successfully opened our first store in Fountain Gate last weekend, massive thanks to the team who opened that store, it was a huge effort to get it open and trading on time. As part of our growth strategy, we will also continue to roll out new stores with a focus on growth brands, including performance lifestyle footwear and apparel, including Nude Lucy Stylerunner, Hoka. And finally, we are also continuing with our franchise reacquisition program, TAF franchise reacquisition program, which is going very well. I hope this gives our shareholders a clear idea of activity and growth the company has planned in the upcoming future. We continue to build a defensible business in Australia and New Zealand. Our portfolio of global distributed brands, own vertical brands integrated digital capability and large store network at core assets for the group position the company well for growth into the future. I look forward to working with our team to continue to deliver the strong results. I'll now hand back over to David.

Along with our AGM presentation, we released a trading update to the ASX this morning. For the first 20 weeks of FY '26, based on trade to date, the total group owned sales year-to-date are up 3.7% compared to the prior year, with like-for-like sales down 0.4%. FY '26 gross margin percentage is down 1.6% to the comparable period last year. The sports category, including The Athletes Foot, Hooker, Saucony and Merrell continued to perform well. Lifestyle footwear sales have been soft and below expectations. Our cost of doing business and inventory continue to be managed well and in line with plan. On the basis that like-for-like sales have been below expectations of low single-digit growth and gross margin has been below prior year, EBIT for the first half of the year is expected to be in the range of $55 million to $60 million, inclusive of nonrecurring losses associated with the closure of the my sale operations. For the full year, EBIT is expected to be in the range of $85 million to $95 million. The full year guidance assumes the range provided above for the first half and for the second half, EBIT in the range of $30 million to $35 million. As mentioned earlier, we successfully opened the first Sports Direct store in Fountain Gate and launched the online store with a further 3 physical stores planned for the remainder of this financial year. That concludes the business update, and we will now progress to the formal business of the meeting. As I mentioned at the start of the meeting, voting is being conducted today by way of a poll, and voting is currently open for the resolutions in items 2 and 3. At the end of the discussion on these items of business, I'll give you a warning before I close the voting. The first item of business is to receive and consider the financial report, the directors' report and the independent auditor's report for the year ending 29 June 2025. These documents are contained in the 2025 annual report, which was sent to shareholders on the 20th of October. There is no formal resolution required for this item, but I invite any questions you may have about the financial statements or about any aspects of the company or the business generally. This is the time for any general questions as I will restrict questions about the specific resolutions to matters pertaining to those resolutions. I'll now take questions from the floor as well as through the Computershare virtual platform and telephone. I'll take questions from the floor before moving to the questions from shareholders attending virtually. For shareholders holding an orange or blue card attending in person. If you wish to ask a question, please raise your hand. Once you're acknowledged, a microphone attendant will pass you the microphone. Please state your name clearly and show your shareholder registration card. Are there any questions or comments on the financial report or any aspects of the reports of the auditors and the report of the directors or any other questions about the business generally? Excellent.

Yes. Ray [indiscernible]. just made it in time. Regarding the glue store thing, it seems to have been a bit of a problem child ever since it was acquired. -- delivered a couple of good brands, but finding the right store format appears to have been elusive if the announcement in April to move glue to a high-end retail experience selling denim and premium street where it doesn't bear fruit, how much more management time will be put into trying to what to do with Glue before just -- it's not worth management time and use the stores for another brand?

Sure. Good question. Thanks, Ray. We've certainly been glued up by it. Look, the truth is that we are constantly trying new formats, new banners -- sometimes we find something a bit of a gem inside of a business, and we might spin that out and do something with it like we have, for instance, like as we did with the Stylerunner stores, out of an online business, and as we did with Nude Lucy and more recently, we've owed out of the Glu business. So it's not always clear that the thing we start with is going to be the thing that we grow with -- we've had a challenging time with Glue, and we continue to look at ways in which we can improve those operations. But like all things, there will come a time if we can't, that we will, as you say, either convert those stores into other banners in our portfolio or do other things with that business. And we've done that before. It's part of the ordinary cores business of the group. Rest assured that the Board and the management team are hugely focused on making sure that every hour of energy goes into creating value and doing something productive. And where we find things are less productive, we move them on one way or another. So I can assure you that your interest is magnified in terms of the interest by the Board in relation to Glue and other things in the portfolio, and we will do what we can to either improve it or find the gems inside it to grow, as we've already done or deal with it appropriately. Any other questions? Excellent One moment, bring over a microphone.

Chairman, Board, ladies and gentlemen...

Are you going to state your name?

Sorry. Yes. My name is Chris Li. I'm representing the Australian Shareholders Association back again. That's a regular annual visit. Firstly, a couple of things I'd like to acknowledge. First, the holding a hybrid meeting, very much appreciate that. Obviously, not everyone can physically get here. So our association very much supports the holding of such a meeting when they lay as everyone to participate -- the second 1 would be remiss for us not to recognize you -- you saw the announcement, you'll be stepping down as Chairman at the conclusion of this meeting. And again, we'd like to recognize your cooperation and assistance with our association over long period of time. Thank you -- having said those couple of things. all the good stuff out of our ways to encourage us lots great. Trading update. So sales are flat pretty much 1 for like. Margins continue to be under pressure, entering a critical trading period now moving up to Christmas -- perhaps could you add a little bit more color to the current trading environment, what you foresee? -- new competition or I guess could shareholders a bit better understanding of the environment in which we're operating currently.

We'll be happy to do so. Yes. Despite your glowing commentary about me, I don't have a crystal ball. So like everyone, we look at the past to try and work out what might happen in the future. The reality is, as you know, there's a soft consumer environment at the moment with the pressures of higher costs on everybody. And that invariably has its impact on discretionary consumer spending. And so it has an impact on our business. What's interesting is that -- and we were speaking about this just yesterday at our Board meeting, is that we are seeing signs that the difficulty is becoming less difficult and that consumers are back to spending to a greater extent than they were -- it's still very much a value-driven market. So there's a huge focus on value. And so we respond accordingly. And so we -- the balance between creating value reducing prices and increasing sales versus maintaining margin is a balance that we pay our management team heartily to prove. I think that in terms of the sales that are taking place in the November period, the cyber period, which we're in, obviously, Christmas coming, January sales is a huge part of the year in terms of our sales. And the planning for that goes in months in advance, and that's all been intricately planned out by the team. And then they act with speed, depending on what's going on in the market in the time. So all I can say to you is that we've included in the announcement to the ASX, our best estimate of what we think is going to happen for the balance of the year. And it's clearly not a story that I'd like to see more. But we do believe that the figures that I read out earlier are likely to be the earnings for the business based on our best estimates at the moment. Now consumer sentiment can go down, and it can also go up. It's affected by many things, as you know. We feel that we have in our existing portfolio, a spread of businesses, which give us access to areas that are growing when there may be other areas that are not. So for instance, as I mentioned earlier, the sports part of the market seems to be growing strong, maintaining its position, whereas the lifestyle part of the market is having greater difficulties. Well, that's a good thing for us because we've got a great exposure to the sports part of the market in The Athlete's Foot in particular. And now, of course, with our strategic initiative in the opening of Sports Direct stores. which are front and center in relation to that part of the market. So our job is to ensure that we've got a spread of businesses that can get access to those parts of the market that are going up, we're doing well. and that we can manage those other parts of the business effectively so that we can profitably and efficiently provide value to customers. And I think that there have been challenges in the last 12 months, and there are certainly challenges going on at the moment. But history tells us that the strategy of this business over a long period of time and more importantly, the quality and dedication of the team that are there executing, planning and working through has ultimately proved to be the single greatest asset of this business, and I believe it will be into the future. So I can't say too much more about what we expect other than what we've already said. But I'm confident that the strategy of having a diversified portfolio and the passion, enthusiasm and hard work of our team will see the delivery of results for shareholders as we have for many years. Any other questions? I really do enjoy the question. So when I have a go at him and say it's going to whack me you should go ahead. Please, thank you.

I have a question for Nikki.

If you could mention your name.

Yes. My name is Andres Lopez. I'm a shareholder ordinary -- so Crimes rising in Victoria. So what measures does the company have in order to protect customers and the team members when it comes to assault, -- that's the first part of the question. And the second 1 will be, why there are no security cameras in all stores.

Andres, I think I might answer those questions. It's usually for my role to do that. Save Nikki. And it's something that I, as Chairman and every member of the Board is acutely aware of. So I said earlier that our team is the single greatest asset of our business. And in particular, the front of our team that are in all of our stores. Now that's thousands and thousands of young Australians who are in stores all over the country, 850-something stores. And the average age of those staff members is around 23. So that means we've got people from the ages of 18 through to more than that. And we are particularly concerned about their health and well-being. So you asked about safety and what's being done, and you asked about cameras in the stores. So both of those get very significant attention from the Board. Each and every Board meeting, Health and safety is a priority item and in particular, the health and safety of our team workers who are in the front line. There has been an increase in incidence of customer aggression over the last few years. It has -- it does seem to have greater levels of impact in Victoria than it does in other states. But having said that, it's not just restricted to this state. And it is an area that we are very concerned about. We tell our team members that the customer is always right up to a point. And there comes a point when they cease to be a customer and they start to be a problem. And we are in the fortunate position, by the way, that unlike many other stores, stealing is not so much of an issue for us because you'll find that if you go into any of our stores, you need to have 2 left feet in order to be able to make anything work if you're going to take our shoes because you only see 1 shoe on display. So we don't have the same problems that others do. But we do have problems with increasing abuse of our staff. And we train people at initiation when they first join us and throughout their time with us about what sort of behavior is acceptable and what sort of behavior is not acceptable. And we have cameras in our stores. You may not see them, but they are there. And there's a reason for that. Now at the same time, we also have to respect the privacy of our customers and the privacy of our staff, but our view is that their safety comes first. And so we have measures in place and very clear rules about what happens if someone becomes aggressive. And whilst we cannot guarantee that nothing is -- there isn't going to be a problem in stores, there has been. And unfortunately, I suspect there will continue to be. What we can do is arm our store members with the knowledge and training necessary to be able to respond appropriately to diffuse situations or to call authorities where that can't be the case. So I think we actually have a pretty good track record. We monitor those statistics daily, weekly, monthly. The Board gets reports on that information every single time we sit down, and it is a priority item. As I said before, our team is our single most important asset, and we will fight fiercely to protect them. Go ahead.

It's necessary to reintroduce myself again?

No, you don't need to.

Just a follow-up question. I was fortunate enough to go out of Fountain Gate yesterday. -- and look at your new store, congratulations to all involved a much bigger store, of course, to a much bigger concept A couple of observations were that the only pain point that I could see seem to be at the very rare of the store. So in light of your comments around concern about shop lifting and the like, it's a personal dislike of mine that I have to go right to the back of the store to pay for my goods. So I just wondered whether that's a format that is going to be adopted across the board. And the other observation I made was that there was a security guard, of course, at the front of the store. And is that going to have to be rolled out as a result of the much larger concept stores that you're going to roll out under the banner.

So we are fortunate and it's not a matter of luck, it's a matter of good planning that we are the recipients of decades of experience that Frasers Group have in opening and operating sports direct stores all around the world. And so formats, inventory, visual merchandise and in particular, security, are all things that we have the opportunity to draw on the expertise of that organization. And so it's no accident that the store is laid out in a particular way. And I won't apologize for the fact that the cashier is at the back, that's -- we want you to walk through the store. So that's part of the exercise. As far as security is concerned, it is common practice, indeed, every sports direct store that I'm aware of overseas, employee security guards because they're large format stores, there's lots of stock out and that's been something that has been present in the sports direct model, not just recently, but for many, many years. In keeping with -- if they thought about it and it makes some sense, we'd like to do the same thing, we will have security guards at the front of our sports direct stores, yes. And that has a number of benefits. It has the benefit that you referred to in relation to stealing but it also means that there is additional elements of security around to answer Andre's question about the potential for customers getting out of hand. Look, it's a sad thing that we have to do that, but it just simply reflects what's going on in this country and around the world in relation to these issues. So yes, there will be security guards outside the front of our sports direct stores. Any other questions? If not, no more questions from shareholders on the floor. Let me turn to the online and telephone. Nikki, are there any questions online or from the phone.

There are, in fact, quite a number actually, David. I'll start bottom and work my way up. -- the first question comes from Stephen Maine. He's asked how many full-time equivalent staff do we currently have? And is this likely to fall over the coming 12 months with the rapid rollout of which parts of our business and operations are most prospective for AI productivity gains? And how energetically are we embracing those opportunities?

Okay. Stephen, I always enjoy your questions. I enjoy them more when you're here face to face. And there's a Melbourne, I'm surprised you're not here, but any annulment. Let me answer your questions. Look, I don't need to tell people about the importance of AI. You read about it every day. And it has a clear application in many parts of business, and we'll continue to do so. and we remain vigilant and very keenly looking at ways in which we can incorporate AI to improve customer experience and to improve our position in the market and profitability. We're not yet at the stage where you'll go into 1 of our stores, whether it's 1 of our footwear stores or a sports direct store and get served by a robot. So we have lots of people in our stores, and I suspect we will do so for many, many years to come. I mentioned before, there's a young Australians who are working. And there's about, I'm going to say, 7,000 of them or thereabouts. It depends on the time of the year. There are more towards this time of the year, 7,000 of them that we employ at this time of year in those roles. And I don't see the impact of AI having any -- I don't see any impact of AI on our store people. And in relation to our support center, I see AI not as a means of reducing headcount as much as arming people and providing greater tools for them to be able to do their job faster, better, more efficiently and to do things that they don't currently have the time or the capacity to do. So I think it's a great enabler like many technologies can be. And so in terms of the impact on our people, I don't see that there's going to be a huge impact from AI other than in the ways that I've mentioned. And I think from a productivity point of view, we are already using AI in many areas. We'll continue to expand that. We do so carefully because we value our customers and want to make sure that we're maximizing the value of our customer experience. But it's a hot topic here as it is throughout boardrooms and companies around the country and the world, and I'm sure it will continue to be so.

It comes from Peter Richardson, who asks total store numbers have reduced this year for the first time. What plans do you have for FY '26 for store opening and closing?

Peter, thanks for your question. So store numbers move subject to which elements of our business are engaging best with consumers. And so whilst you might say that total store numbers have reduced, you might also have seen that our online store sales have increased. And so we respond to where customers want to deal with us. We're an omnichannel retailer. You can deal with us by walking into a store, you can deal with us online, you can order online, you can pick up your goods in a store, you can go into a store. And if the product isn't there, you can purchase from endless aisle and have it delivered to your home, sometimes before you even get home. So our responsibility is to be present for customers wherever they choose to be. In terms of the store openings and closings, some of our banners reduce their footprint at times and then expand it into other areas that may be a function of consumer demand, it might be a function of terms that landlords are either prepared to accept or not. And we very much vote with our feet if we can't get the right terms for the business, then we'll find a store somewhere else. Equally, we've got stores in different sizes. So sometimes a small store or 2 small stores might close and a larger store might open. In the case of Sports Direct, as Chris mentioned, we've got much larger footprints and some of our other banners are also slowly increasing the size of their store footprint. So store numbers themselves are not necessarily indicative of growth or otherwise. They're more a response to the issues that I mentioned.

[indiscernible] who ask, we've seen the company's gross profit margins decline over the last 18 months. another listed footwear retailer has also reported falling margins. Does management consider that the industry structure for sports and lifestyle footwear has materially changed to an extent that lower margins will continue for the foreseeable future?

Look, as I said before, I don't have a crystal ball, but let me try and address what underlies your question. Margins are -- and prices our response to consumer demand and also the quality and variety and newness of product that we have. And so we're constantly moving those factors around. I'm confident that we will be able to pick parts of the market where there's growth and opportunity, as I mentioned before, sports happens to be 1 of those. And then we've got very strong growth both in sales and profitability going on in that sector at the same time as lifestyle might be a bit softer. So this really is a question of the strength of having a portfolio, such as we do across so many different banners and so many different parts of the market and our strategic initiatives to expand into the Sports Direct business is a direct example of us seeking to do quite that. Sports Direct is a business that has not any footwear sales, but very significant apparel sales. So it gives us a chance to expand our offering to consumers. It has a large online side as well. And as I mentioned, the various ways in which we engage with our customers that will extend into the sports direct business, too. So I think that these are -- there are constantly trends that are moving up and moving down in Australia and across the world in relation to different parts of our business. Our job, the job of the management team, in particular, is to be a droid to be able to pivot where necessary, take advantage of opportunities, seek to maximize gross margin, but at the same time, ensure that we're providing a good customer experience and that we're growing our sales. It's easy for me to say that. It absorbs at the time of lots and lots of people in this building, looking at ways in which we can do it. Our strength is that we have the footprint to be able to pivot and to be able to capture demand across a wide variety of different customer types.

Stephen Mayne. When did we last tender the external audit contract? And when will we likely tender the next audit?

We changed our auditor here several years ago, and we are currently with PricewaterhouseCoopers, whom I might say, do a fantastic job for us. We are blessed to have professionals of the talent and skill of people like Allison as our auditor and the entire team that we have servicing our account. I can't recall exactly, Stephen, the last time that we reviewed our audit arrangement. We look at all of our third-party arrangements on a regular basis, as you imagine that we would and frankly, I think that if we've got a capable and competent auditing firm working with us as we do, I favor the benefits that come from the long-term knowledge and experience that they provide for us by knowing our business backwards over many years, and as I've indicated before, our business moves. It's not the same thing year after year. So we need an expert and a quick moving business that can move with us and PwC have proven to be that year after year here. So I don't think there's any need for us to look elsewhere, just for the sake of it. I'm very, very pleased with the arrangements that we have in place. Having said that, we're always keen to ensure that we're getting value for money for the business and for our shareholders. And that's a discussion we have with Aliison every once in a while, and we reach an appropriate agreement.

David, I can confirm it was 3 years ago that we tendered it. And you said Bearitos for the last 2 years.

Yes, Nikki next.

One final question from Peter Richardson, which I think you probably answered but I'll read it out anyway. David, you mentioned growth a number of times in your introduction compared to 2019, your sales have grown and nearly doubled, but profit has not increased at all. Can you please provide details on why sales are growing, but profit is not? And following that and given the trading update, can you explain how you will grow earnings, EPS, which is the matter that matters most to shareholders?