Articore Group Limited (ATG) Earnings Call Transcript & Summary

Good morning, everyone here in Australia, and good afternoon for our U.S. investors. This is Paul Gordon, Company Secretary for Redbubble Group. Welcome to this investor call in relation to Redbubble Group's business update. With me on the line, I have Redbubble Group's CEO, Martin Hosking; and CFO, Emma Clark. The key information for today's update is in the ASX announcement released to the market this morning. Please note that the financial information in the release and in the upcoming call are from internal management reports and have not been subject to audit. Martin and Emma will now speak, and then we will open up the floor for questions. This session is also being recorded. Before we start, I would like to call your attention to the safe harbor statement regarding forward-looking information in our ASX release. That safe harbor statement also applies to this investor call and the Q&A. Now I will pass on to Martin Hosking.

Thank you, Paul, and hello, everyone. This morning, we provided the market with a business update outlining Redbubble Group's performance for the current quarter and year-to-date. We also announced the independent -- intended reorganization that is necessary to align teams with our strategy going forward. First, let me talk about what we saw in the group's business performance during this quarter. At our last third quarter results update at the end of April, we stated that the group experienced significantly stronger sales growth due to increased online activity. With lockdown and isolation measures in place across the world, consumers were increasingly driven to shop online. In the U.S. and other markets, online retail grew as much in 8 weeks as it had in the previous 8 years. Redbubble Group, along with most other established online platforms, saw the benefits of this acceleration. These macro trends continued into May and June, and we continue to see strong sales growth of over 100% across Redbubble Group in the current quarter to date. Emma will talk in more detail about how this has flowed through the rest of the fourth quarter P&L and the year-to-date numbers. This increase in demand is broad-based and accelerated the flywheel overall. Growth was experienced by both Redbubble and TeePublic brand and marketplaces. It has been reflected in an increase in the number of customers and artists and in sales across the group's geographies and product categories. We will cover these in more detail, the trends, in our year-end announcement in August, although Emma will touch on it a little bit more in her comments. This systemic uplift positions us well as we go into financial year 2021. We have more customers and artists and more engaged customers and artists. The surge in demand, in combination with generally higher volumes across many parts of the global shipping networks, means that we were -- we are experiencing lengthier delivery times at both Redbubble and TeePublic. We are not unique in this regard, and the group's operations and supply chain have been able to adapt to the growth and customer orders are being fulfilled within expectations. As I consider financial year 2021, I have grounds for confidence that at least part of the changes driven by COVID will be sustained and become more structural. That being said, we remain mindful of the external uncertainties that still lie ahead and the importance of being well prepared for whatever eventuates. With this in mind, today we announced moving to realign the organizational structure to the more focused strategy I have flagged with investors. The restructure does involve reductions in head count and related operating costs. This provides the foundation for profitable growth going forward. Emma will discuss the OpEx implications in more detail. In relation to the strategic direction, there are 3 clear areas of focus. Firstly, artists are core to our strategy and mission and create a differentiated experience and products that sustain our brands and growth. In the coming quarters, we'll be investing in efforts across artist acquisition, activation and retention. This will be leveraging tools and learnings out of TeePublic. There will be new artist sales and success teams whom we task with acquiring, retaining and developing artists as measured by revenue and retention. Secondly, we will continue to work -- our work in user acquisition and transaction optimization. This includes ongoing improvement in search engine optimization and other aspects of the on-site experience such as landing pages and checkout. Historically, Redbubble Group has [ have ] had very low customer acquisition costs. This has been further enhanced during the current crisis. Both the marketing and the SEO teams are being invested in to ensure this continues. Lastly, we are progressing work to better understand our audience data, drive repeat customer purchases and increase loyalty. We have acquired millions more customers over the last few months. They are being -- they are our most fertile ground for future sales, and we are increasingly leveraging the assets we have and can develop to ensure they return. Obviously, the Android and iOS apps are a key part of this. Again, more details on this will follow at the end-of-year update. In addition to these primary initiatives, we'll be rolling out new products at a consistent rate and continuing to optimize the logistics space back end, both the cost and effectiveness. This back end has been essential to our group's success, and we need to continue to invest in it. Like other established online platforms, Redbubble Group, over the last few months, has experienced the benefits of an accelerating structural shift to online eCommerce. The group is well positioned for future growth. Redbubble Group is committed to aggressively pursuing a global opportunity through effective, focused execution, delivering profitable growth. I will now pass over to Emma.

Thank you, Martin. Good morning or afternoon to everyone on the line. Redbubble Group has continued to see the positive impact of macro tailwinds on overall business performance. When we last updated the market in late April, we said that sales in April were significantly stronger than Q3 as a result from increased online activity. This remained the case as we went through May and June, and Redbubble Group has recorded a fourth quarter, quarter-to-date Marketplace revenue growth of 107% on a floating basis and 96% on a constant-currency basis. This brings the group's current year-to-date Marketplace revenue growth to 42% on a floating basis and 34% on a constant-currency basis. We have seen FX tailwinds in these top line growth rates, hence the difference between the 2 numbers, though they have lessened materially over the month of June. It has been an exciting quarter so far at the group with average daily sales in absolute terms being the highest in the company's history outside of the Christmas peak in 2019. The increased level of sales have come from both new users to the site as well as purchases from repeat customers who have shopped with us before. As Martin mentioned earlier, we have been particularly busy managing our supply chain and ensuring that we are able to continue to fulfill and deliver the increased level of customer purchases. One thing that is important to note is that the Marketplace revenue growth rates quoted in the release and on this call are calculated using financial information from our internal reports, which are on a paid basis. Delivery date adjustments will need to be made according to Australian accounting standards regarding revenue recognition in our full year statutory accounts. This will reduce the amount of revenue recognized in this financial year due to timing differences. The quantum of the adjustment will be notably large at the end of this year because of the high growth rates that we have experienced as well as the lengthier delivery times due to the COVID-19 impacts on the supply chain. Further details on this will be provided at the full year results release in August. As Martin had previously mentioned, the strong performance was seen across geographies and products. From a geography perspective, all are participating in the uplift, with particular strength in Australia, Canada and the United Kingdom. Interestingly, sales in the United States have also performed well with a year-on-year uplift of more than 100% across the group. Across product categories, home decor and wall art have continued to outperform, with year-on-year growth rates of more than 200%. Given the current work-from-home dynamic, it appears there is a broader market trend in these particular product categories, which the Redbubble Marketplace is particularly well placed to participate in. T-shirts have continued to generate strong revenue growth in the TeePublic Marketplace. We are also particularly pleased about face masks, which were launched across both marketplaces in late April and almost instantly became a notable contributor, with more than 600,000 units sold to date, generating gross sales of $9.4 million since launch. Across a number of major cities and countries, we continue to see recommendations from government and health authorities to wear face coverings in public spaces. Looking down the P&L, the group's top line performance has been generated without degrading gross margins and paid acquisition efficiency. In the current quarter, operating expenses for the 2 months of April and May are tracking slightly above the first 2 months of the third quarter. This is partly driven by some variable components, such as Google crawl costs. These are associated with the incremental site visits that we have seen. For the current financial year, up until the 31st of May, Redbubble Group has generated an operating EBITDA profit of $11.9 million, up 101% year-on-year. Please be reminded that we now provide this number on a leasing accounting standard adjusted basis and comparative figures, i.e. the prior year figures, have also been adjusted so that the growth rates are a like-for-like. Due to the group's negative working capital cycle, the significantly increased level of sales in the current quarter to date have flowed through to boost cash flows, and the group had a cash balance of $56 million as at the end of May. A complete and audited set of financial statements, including detailed P&L numbers, will be provided at the scheduled full year results release in August. We are acutely aware that the external environment remains volatile and its effect on group performance could change at any time over the coming months, so I think it is prudent to reiterate that we will not be providing any forward-looking guidance Next, I wanted to speak in a little bit more detail about the intended reorganization that we are undertaking. As Martin has already said, the main impetus for the reorganization is strategic alignment. We have carefully mapped our teams to our strategic focus, identifying capabilities needed to effectively deliver in our key priority areas as well as maintain our systems and business as usual. The renewed strategic focus entails us undertaking a smaller number of core initiatives. Partly due to this, we are making reductions across most departments supporting the Redbubble Marketplace. Thereafter, teams and functions will be accountable for more commercially-oriented goals to drive greater measurable impact more efficiently and effectively. The reorganization is expected to generate annualized gross savings of over $5.6 million in operating expenses with a one-off cost of $2.1 million, which will be recognized in the current financial year. And to be clear, this is not included yet in the May year-to-date operating EBITDA number that I quoted before. A portion of the gross savings will be reinvested in core growth initiatives supporting, in particular, artist sales and success and product marketing capabilities. As a business, we are pursuing a strategy of profitable growth. We are committed to maintaining a sustainable cost base and ensuring that cost growth remains below revenue growth. The group is focused on both short-term execution consistency and its medium- to long-term potential amidst a broader acceleration in the eCommerce activity. Thank you. We will now open the line for questions.

[Operator Instructions] Your first question comes from Tim Piper with Royal Bank of Canada.

Congrats on the update. Just firstly, around the revenue recognition. I know this is going to be finalized towards year-end. But I mean the actual size of the quantum of what's going to be pushed into first quarter '21, are we sort of just talking like a week's worth of revenue? Or can you give a bit more detail around that?

Yes. Look, it's actually a pretty -- thanks for the question, Tim. It's a pretty rapidly shifting landscape at the moment because we're currently clearing delivery backlog. So depending on where we land closer to the end of the month will actually dictate that number. It will be likely to be about a week's worth of revenue.

Okay. Great. And just secondly, around your gross margins. If we kind of look at where you're tracking towards FY '20 and the comments around OpEx, is it fair to say that your GPAPA margin's down a little bit in fourth quarter compared to third quarter?

Not necessarily, Tim. So we -- as I said just before, we've been able to hold our GPAPA pretty consistent because we've been able to get the result without degrading the gross profit margin and the paid marketing efficiency. So GPAPA is good at the moment.

Okay. And just your comments around the OpEx there, keeping the OpEx growth rate below the revenue growth rate going forward, how are we thinking about that in the context of the $5.5 million savings? Are we kind of assuming the underlying base is going to grow below revenue and then take the $5.5 million out? Or is that the right way to think about it?

That is the right way to think about it, yes.

Okay. Great. And just finally, on the cash position, really strong cash flow. Can I just confirm that the TeePublic deferred consideration has been paid out and that's the $56 million post that?

That is 100% correct. You have no idea how happy I am that I no longer have to keep making the note that we still have to make a TeePublic deferred payment.

Your next question comes from Grace Fulton with Goldman Sachs.

I've just got one follow-up to Tim's question on the revenue recognition. So how you're saying it's probably likely to be about a week's worth of revenue, would you expect there not to be an impact on the operating EBITDA number you reported to the 31st of May just given those timing differences?

So we only do delivery date adjustments for stat purposes, Grace. So we only actually post the delivery date adjustment on the 30th [Audio Gap] and the 31st of December. So we don't actually have the delivery date in the May number, and we don't have it in any month outside those 2 months.

Okay. So that operating EBITDA number still needs to be adjusted for the delivery date then?

For whatever we post in -- so it's accurate as at the 31st of May, but when we post a delivery date adjustment into June, it will defer a portion of revenue and a portion of the fulfillment cost associated to that revenue into the next year. Obviously, both of those have an impact on operating EBITDA for the full year.

Okay. Understood. And just with those having some delivery delays, so I've been seeing on the website that the customer service is like pushed out to 72-hour response, or a week for TeePublic. Have you -- can you comment at all about how your customer experience measures have been tracking? Am I seeing that for TeePublic you're hiring some extra people to deal with the backlog?

Yes. Look, I mean, our NPS scores across both marketplaces are still holding up particularly well. I think the -- during the period, so if we think about this April and May period, as Martin said in his speaking notes, delivery delays are not solely, obviously, due to us. It's not something that's unique to us. Generally speaking, when you're buying products from most places, there's delays in both the shipping carrier as well as in the fulfillment of the product itself. So we actually have found that people have been pretty understanding about it. We've also been very clear with our communications. When you go to the checkout page on both marketplaces, it's super clear in terms of when you're going to get your product so people know what the delivery is going to be before they choose to buy. That being said, yes, we are getting -- we are obviously having people contact us, more to do with the increased volumes of sales than necessarily a higher ratio of people contacting us from the existing sales, and we are making sure that we're staffing up to be able to bring those times down.

Okay. And you made some broad comments in your speaking notes about new versus returning customers. Is there any more detail you can provide? Like have you seen any of the new customers that came on through the period start to return? Can you just talk about those sort of metrics?

Yes. Look, the reason I haven't mentioned them, and we'll probably talk about this more when we come out at the end of August, is it's a little too soon to talk about the repeat of the customers who've only come in the last month and made their first purchase. So we obviously have different cohorts running internally. We're doing different things with those cohorts to prompt repeat. I'm going to be in a much better position in a couple of months' time to be able to update the market on how we're going with that.

Okay. And can you just comment, did the 2 marketplaces exhibit the [ unusual ] pattern of TeePublic growing at a higher rate than Redbubble?

Yes, they both grew and acknowledging the starting point differences. That being said, Redbubble being highly diversified and particularly into products like home decor. So as you know, I said that wall art and home decor's up 200%. That has meant that actually, the gap between the 2 marketplaces has closed, not totally, but in part.

Okay. And then just with the T-shirt, is that sort of in line with the growth in the rest of the market with people focusing on home decor? Or are there any sort of more market share issues going on there?

No more market share issues. I mean, as I said, in my -- home decor has grown at 100%, T-shirt is growing at about just under 100% if I factor in Redbubble as well TeePublic. So it's close to the mean of our total growth rate.

Your next question comes from Owen Humphries with CGS.

Just on the cash, what is the normalized cash balance when you adjust for your -- the working capital tailwinds that you've got in the business at the moment?

Well, that's actually -- thanks, Owen. That's actually quite a difficult question to answer. It depends on what the fixed level of daily sales will be moving forward and what it's going to [ settle at ]. So at the moment, the cash balance, after the initial pickup in sales, has held well and been steady. The sales coming in are pretty much at the equal level of all of the payments going out for the prior period, so it's holding relatively stable at the moment.

Good one. Okay. And then in terms of the revenue that's been derived from some of the products that have been released in the last couple of months, just call it face masks and the others, what's the percentage of revenue that's been derived from new products through these quarters that wasn't there, call it, 12 months ago?

We won't calculate that number until we actually hit the end of the quarter, Owen. So we won't have that [ number until full year results ] release.

Okay. No worries. And then just on the gross profit margin, so I'm just trying to work out -- you said basically it's increasing on previous periods, which was record in the third quarter. Are you seeing volume benefits? Are you seeing less discounting? And in some of your new products that you launched like face masks as an example, is that a higher margin than the rest of the other products or revenue that you generate?

Okay. So just to clarify, I didn't say that margin had improved. I said it hasn't degraded in my speaking notes. In terms of -- and behavior that we actually talked about in our April call has continued, which is fundamentally that we've been running relatively low level of [ promotions ] across the marketplaces, and obviously, that's [ tailwind on ] margins. In terms of your question on face masks specifically, we obviously have a donation component to those face masks, which does impact margin slightly, but not enough to materially [ impact ] group margin number.

Okay. And then just on the cost side. So you take -- it looks like you're taking about $6 million that you're recycling to new growth initiatives. Is that -- we're talking about new geographies and new products? Or is it more on platform? Just maybe you can give an insight into where you're planning to recycle your free cash flow now.

Yes. So as we said -- as both Martin and I said, we're going to recycle a portion of that back into new initiatives, so not the full amount by any means. The first things we're going to focus on are artist sales and marketing and increased product marketing capability.

Your next question comes from Anthony Porto with Morgans Financial.

Can you hear me?

Yes, we can. Nice to talk to you, Anthony.

Yes, yes. I look forward to rekindling the relationship there, Martin. But just -- congratulations first off. But just can we -- you obviously benefited from reasonable tailwinds in this period. Can we just get a sense of how you're going to utilize these to drive growth going forward and some stats around maybe new members that have signed up in the period? And I know Grace asked about repeat usage of new customers, but I'm talking about repeat usage of old customers and how that's tracked and improved.

Yes. I'll take it in a general sense. We're not going to be giving the -- well, not only aren't we going to be, we can't give you the detailed breakdown between repeat and new customers now. That is for the August update. This update is sort of a point-in-time update around growth level performance. That said, we -- as Emma said and I said, the growth has come from both new and repeat customers. So both have been performing strongly at both brands. And we, like other marketplaces, have both an expectation of putting work into ensuring that customers who are new come back. And so that's part of our established way of doing it. We'd like to do that at a higher rate than has been in the past and have some expectations that will be the case because of the shift in consumer behavior. So our relatively degree of confidence over the future comes from the fact there have been a significant increase in the total number of customers and then also good loyalty from existing customers and a reasonable expectation that new customers will also be loyal. So that's the confidence going forward. And I will as well reiterate that the artists are showing a similar pattern. So they also have engaged at a higher level. So it's not just one side of the marketplaces but both sides, and that's where the confidence, cautious confidence comes through for the future growth.

Okay. Great. Just another quick question. Just how long it took you to source and start selling face masks? I assume that it wasn't a product that was on the website prior to this.

It was exceptionally quick. It was just a little bit over 2 weeks at both marketplaces. And that was a reflection of our good relationships with the fulfillers and our ability to engage. So we went into it -- we were aware of the opportunity, and we went into it with significant vigor. So that was -- it takes, in general, a lot longer than that for a product, but that was one which we gave a strategic priority to and responded to flexibly to bring the product online.

Your next question comes from Ashwini Chandra with GS.

Just a couple of quick ones. Is there anything you can say about the channels through which you were sort of seemingly getting the most leverage at the moment between mobile, desktop or apps?

There's no fundamental change in that, Ash. The mobile is strong, desktop is strong, apps is strong. So they've all -- the characteristic of the -- of what we've seen is all channels -- or in this case, all platforms have been strong.

Okay. And then maybe the other question I'll just ask is, during this period, have you seen -- I know you've indicated broad-based strength, but anything in particular that you could call out about acceleration in demand for some of your branded license partnership-linked product? Is there anything that you've observably noticed that is particularly accelerated here or...

No, no specific comment on the product [ lists ] which we have with rights holders. Certainly, the growth has been across content types as well. So it's a good one to pick out. So it's been across content types. And in particular, as different memes have occurred, those have always been a big part of the sales of Redbubble. So -- and that's -- as we enter into a meme-intensive environment around U.S. presidential elections, we could expect that to be a factor as well.

Your next question comes from John Lewis with Osmium.

I guess most of the questions I had was... [Technical Difficulty]

We can't hear you, John.

You've cut out, John.

I believe we've lost John's audio. [Operator Instructions] We have John Lewis with Osmium.

Sorry, guys.

Second time lucky, John?

Okay. Sorry about that. I guess I was just going to get to the point that it looks like face masks, without going out on a limb, is a pretty obvious good-sized category up there with stickers and stationery and not that far behind T-shirts. So I think in February, you guys mentioned that you hope to launch 15 to 20 new products this year in 2020. So I guess when you look at the categories that are out there from what you've launched to what you hope to launch, can you give any color about other categories you think that could be needle-movers kind of in the same vein as face masks?

Yes. Thanks, John. And I think that you're completely right. I think it's worthwhile, people, just bearing in mind, particularly the Australian viewers, that face masks are a much more common thing in the United States and Europe. And you clearly need more than one face mask. You may have 5 or 10 or 20. People are buying them in volume because they need many more than one. So that's worth noting. In terms of the -- one of the things which I've come -- as I've come back, is I've really looked at the product release strategy and tried to make clear that they need -- and I mentioned this in my notes and Emma mentioned it as well, is that we need to get better at picking products which really are likely to move the dial most effectively. And so that's been one of the things which we've looked at. And that can include not only new -- whole new product category types but also changes within product categories because we're aware, just for example, changing the sizes and adding smaller and larger sizes, while you may not see it, can actually have a pretty significant impact on sales within product categories. So our focus -- when I talk about focusing on commercial outcomes, it's moving away from just a raw number of products to actually getting more money out of the products which we have. So that's a change in thinking. And in regard to particular product types, certainly with face masks, it's one of the areas which we need to continue to actually evolve on. One face mask does not a summer make. And so we need to think about kids' masks and youth masks, for example. They've got different considerations with those. So that's an example where we are looking at product types which can move the needle for us quite significantly. It is worth noting, and I think you know this better than anybody, we're only in a fraction of the possible product types which we could be in. We know companies which are doing furniture, for example. We are not doing any furniture at all, and clearly, that's a category which is worth exploring. So it is something which is very intensely on my mind to make sure we do the smallest number of products with the most impact rather than the previous sort of looking at doing a lot of products with no potential view of what the impact may be.

Got it. I guess my other quick question was on the supply chain. I mean obviously, given your growth rate, it doesn't look like you've hit any constraints. But how do you feel about meeting demand, order flow and being able to keep your Net Promoter Scores up given the high...

Yes. We're confident around it. Again, during the depths of the -- I don't know if you -- if anybody still remembers what mid-March looked like, it was -- it looked like the world was coming to an end. And I was -- at that point, I was certainly concerned about what it would look like overall. Very heavily engaged with our team, and they were then engaging with the independent fulfillers. And even as things were unfolding, I got confidence that there was a genuine robustness in that supply chain, both from our end and also in the independent fulfillers. So we -- it has held up. We've had to reset expectations with customers. But clearly, as we're also getting more time, we're able to bring on more independent fulfillers into the network as well. So those things are setting us up for back-to-school in the Northern Hemisphere and then Christmas.

Yes. We're well diversified, John, with our fulfillment network now, which is excellent.

Okay. I guess my final question is, I noticed that Goldman Sachs today came out with a $120 price target on Etsy, about 12x revenue. And I know that the Goldman analyst on Redbubble values the company at about 50% of revenue. So I guess given this enormous disparity inside of Goldman Sachs, what are you doing to bring on more sell-side analysts to discover Redbubble? And what are you doing on the IR and PR front to get the story out, as we believe the stock is wildly undervalued?

Yes. We -- if we could on this call, we would actually directly connect you to Grace, and then the rest of us would drop off and you guys could have a talk about that. Obviously, we can't do that. So we are talking to all the analysts today. We obviously do communicate with them relatively closely. And we will continue to try and get the message out from a PR perspective about just the wonderful company that Redbubble is. I don't know, Martin, if you wanted to add anything more.

I will say as well that the -- there is a significantly increased interest in Redbubble. I think your appreciation of the gap between where we are and peers has been more widely shared. And as a consequence of that and the interest in what's happening with the online retail, both in general and specific to Redbubble, we are seeing an increased inbound interest from potential analysts wanting to cover us, as well as, of course, from major institutional investors. So that is what you would expect given the environment and given our performance.

Your next question comes from Armina Rosenberg with Grok Ventures.

Just a few questions from me. Firstly, is there any change in thinking about the opportunities to leverage fulfillers? Or have you sort of gone as far as you can from the sort of scale advantage you get with them, like from an economics point of view?

So no, would be my short answer to that, Armina. I think we still continue -- I mean, as we continue to increase volumes, the ability to further diversify by bringing competition in for the same product type or localizing the same product type and having it fulfilled closer to customers, those opportunities still remain for us, and we will continue to effectively do that and apply that recipe as we continue to grow our sales volume. So that helps us continue to be able to increase our margins. I think as I've said previously a few times, we probably wouldn't increase our margins into infinity but at some point, we would want to reinvest back into the quality of our products and back into the customer experience. But at the moment, I don't think we've necessarily taken fulfillers as far as we can go. I think also -- and we spoke about it in the April 1 and April 28 call. During April, we did some co-promotions with fulfillers. So when we did run promotions, which were far less frequent, the fulfillers actually funded part of that promotion, and it was a use of the network that was more designed to get a win-win for all the participants in the network rather than Redbubble being the only one that made the decisions within it. And that worked quite well for us. So I think that's something that longer term, we'll explore doing more of.

Okay. Great. And then just last question for me. Are there any sort of big changes you need to make from a sort of management or strategy team perspective in terms of hires?

Yes. Thank you. I'll take that one. So as part of the restructure, we have unfortunately had to separate from some senior executives. That will -- that information will become public in time. That is as a consequence of the realignment to strategy. There is also, though, one clear gap in the organization, and that's for a senior product lead and that is something which we're actively -- we'll be recruiting for. So it's a change in the way in which we think about what we do. And by product I mean the website product, I don't mean the physical product, so the Marketplace and how we actually do that. And making -- again, this is about -- I think it's fair to say we've been in a reasonable amount of experimentation here that's gone on in Redbubble, but not necessarily with a strong view about its commercial impact. And the alternative structure which we're moving to is being much clearer about what we want to develop, and that should be led by a very senior executive who has that experience before -- has had experience. So that's the role which we'll be bringing into the organization.

Your next question is from Gordon Sims with Castle Point.

Perhaps you could just touch on where the fan art or content partnership business is going and how that falls into the 3 core initiatives that you outlined. Is it artists? Is it users? Or -- [ I take it, it's not loyalty ]?

Yes. It -- what I will say, and again, this is as I've come back into the organization, it is important but it's not as important as the 3 things which we have specifically identified. It's a facilitator -- and I think you're quite correct. It's a facilitator around the relationship with the artist. But I don't want people to get hung up on it, which is why I haven't put it as the highest level thing. The simple reality is we get millions of customers. We have hundreds of thousands of artists. And we have millions of new customers and loyal customers. The company needs to be devoting its resources and attention on that core aspects of what we do. The fan art marketplace is an enabler of some of that, but it's a relative -- it is a relatively small part of our total business and is likely to remain so going to the future. So we will up -- keep people updated, but I think we also -- again, as I came back into the business, let's be focused on the main game. Let's put resources into the main game and make sure that, that is well funded and make sure that we don't get distracted. Even though it's important, it's not as fundamentally important as those big things.

There are no further questions at this time. I'll now hand back to Mr. Hosking for closing remarks.

Thank you, everybody. And I look forward to updating you in August with the end-of-year results with Emma, and that will -- at that point, we'll give you more detail and more color into how the year has unfolded. So I look forward to that. And I look forward to catching up with you all then. Thank you very much.