Autosports Group Limited (ASG) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Autosports Group Limited 2023 FY results. [Operator Instructions]. I would now like to hand the conference over to Mr. Nick Pagent, CEO.

Thanks, Amy. Thank you, and good morning for dialing in this morning, and welcome to the investor presentation for the financial results of Autosports Group for the full financial year of 2023. My name is Nick Pagent, I'm the CEO of Autosports Group, and joining me today on the call is Aaron Murray, the CFO of Autosports Group. This morning, we'll start with a brief presentation on Autosports covering our FY '23 financial highlights, our FY '23 strategic highlights and our outlook for the financial year 2024. I'll then summarize the FY '23 financial results before handing over to Aaron, who'll provide a deeper analysis of the Autosports Group Financial Year 2023 financial metrics, including our revenue drivers, operating leverage, margins and cash flows. I'll then give an update on Autosports Group's growth strategy. And following the presentation, we'll open up the call for any questions that you may have. As we move through the presentation, uploaded this morning on the ASX and Autosports on investor side. I will provide there possible the relevant slide number to the accompanying investor presentation. So starting with Slide #3, the financial highlights slide. I'm pleased to report that Autosports Group has delivered another record financial results as the group's growth strategy continues to drive balanced revenue growth, stable margins have improved shareholder returns. In the financial year of 2023, revenues grew by 26% to $2.371 billion. Gross profit grew 27% to $475.6 million. Our normalized net profit before tax grew 33% to $115.7 million and our EBITDA grew 30.7% to $198 million. The statutory net profit before tax was up 22% to $66.6 million and the combination of our strong operating profits, enhanced cash flows and good outlook has allowed Autosports Group to further improve its dividend to shareholders. The dividend has increased on PCP 19%, and we're declaring today a fully franked final dividend of $0.10 per share. I'll move to Slide #4 to look at our strategic highlights for the year. The consistent delivery of Autosports Group strategy continues to pay dividends. As we grow, our consistent focus has strengthened the business, broadened our platform and enhanced our resilience. FY '23 was no different in this regard. Autosports Group continues to grow by our acquisition in fragmented automotive market. We continue to pursue organic growth through our existing dealership network. Where possible, we strengthen our position by controlling crucial retail properties. We stick to our core business of delivering high cash conversion, strong capacity to reinvest in growth and to deliver shareholder returns by dividends. In FY '23, we delivered quality acquisitions. Two large-scale strategically aligned acquisitions delivered immediately accretive growth for us. Auckland City BMW Group added up $167 million in revenue from settlement in August in 2022. Motorline and Gold Coast BMW contributed an extra $105 million in revenue from its settlement in just February of 2023. Organic growth was also strong. Organic growth saw us grow $223 million in FY '23 as vehicle supply started to normalize. But it wasn't just vehicle supply, Autosports Group grew its revenues organically in every one of its revenue streams. Our organic growth prospects are also well set up for the future with new vehicle order banks continuing to grow in FY '23, not just in pure volume terms, but also in revenue terms, in gross profit terms, and also the security of our underlying contract terms. Our high-margin Service and Parts divisions continued above-trend growth, growing at 20.6% on a like-for-like basis. FY '23 also saw us add to our strategic property portfolio with the purchase of the important Fortitude Valley site in Brisbane for $98 million. The total property portfolio now stands at $194 million at a written down value and shareholders will note that as a result of the timing of that settlement on June 16 (sic) [ 15. ] We took the prudent approach impairing the stamp duty and acquisition costs associated with that Fortitude Valley property. All of this growth is supported by strong operating cash flows -- our board expense rate. The business generated $166 million in operating cash. We spent this cash to grow and on improving our shareholders' returns. $116 million was spent on dealership acquisitions, which as we have seen, we're immediately accretive and on track to deliver a $400 million annualized revenue growth for the business. Dividends were improved to 19%, and it closed with a healthy cash balance of $42 million, which brings us to a summary of our outlook for 2024. Our revenue growth will come from the full year cycling of the FY '23 acquisitions in Auckland and in Brisbane. Our improved new vehicle supply and deepwater banks support organic growth prospects in the year. Service and Parts are expected to continue to grow above trend in organic growth. We expect our margins to remain stable through the period. And Autosports Group is well-placed to continue its growth by well-priced and on strategy dealership acquisitions. If we move now to Slide #7 to have a look at the normalized financial results. The first thing to note in the financial results is that it is well balanced between acquired growth and organic growth. New vehicle revenue was up 25.9% well ahead of the market, with like-for-like growth, again, ahead of the market at 16.2%. Used vehicles were up 22% with like-for-like growth at 8.5%. Service and Parts were up 34.8% (sic) [ 34.6%] with like-for-like growth, as I mentioned earlier, at 20.6%. Secondly, we held our margins. Gross profit grew 27.3% and gross margins held at 20.1%, even though the mix drifted a little bit towards new cars with those high growth numbers in the second half of the year. We were hit by increased finance costs as interest rates rose. Floorplan costs in the business rose by $10.1 million on the prior corresponding period, but we offset that by controlling our expenses with expense rises coming predominantly in personnel-related costs, which were in line with the improvements of throughputs and gross profit generation. Thirdly, the combination of making gross margins and increasing throughputs more than offset the inflationary pressures and interest rate costs, and we were able to increase our margins at net profit before tax to 4.9% and to increase our EBITDA margins to 8.4% as our operating leverage increased in the business. On Slide 8, on a statutory basis, our net profit after tax grew at 22.1%. Earnings per share grew at 22.6% and has a compound average growth rate of 16.2% growth in EPS, since we listed in late 2016. Our dividend per share was up 19%, with our compound growth rate and dividend growth running at 27% since we listed in 2016. The normalization in the accounts related to our acquisitions, primarily the stamp duty on the very -- on the 2 large acquisitions in Auckland and in Queensland. The property stamp-duty impairment that I referred to earlier and the reducing impact of acquisition amortization. I'd like now to pass over to Aaron so that he can share some of the details on our revenue growth, operating leverage and cash flows. Aaron?

Thanks, Nick, and good morning to everybody joining us on the call. If you move to Slide 10 and 11, I will talk you through our revenue drivers. Historically, ASG has achieved consistent revenue growth through a mix of organic and acquired revenue. In FY '23, ASG achieved revenue growth of $495 million on PCP with $223 million coming from organic growth and $272 million coming from acquired revenue. The slow return of new vehicle supply has seen organic growth in new vehicles of $184 million. This has also supported organic revenue growth in used vehicles through increased trading opportunities. The gradual return to business as usual after COVID, so now that we are returning to work, and as a result, driving the vehicles on a more regular basis. This supported our organic revenue growth of $51 million in our high-margin Parts and Service departments, up 20.6% like-for-like on PCP. Pleasingly, the significant increase in new vehicle revenue will continue to assess revenue flow through to the high-margin Service and Parts departments in the years to come as our clients return to service their vehicles. ASG's FY 2024 revenue guidance will be supported by the strong underlying new vehicle order bank cycling the Auckland City and Motorline BMW acquisitions. We move to Slide 12, unlocking improved operating leverage. ASG's gross margin continues to improve. Gross margin has been supported by historical and continued acquisitions of assets that presented high-margin opportunities, increased revenue through high-margin Service and Parts departments and favorable new and used market conditions. Margins improved from FY '19 of 16.3% to 20.1% in FY 2023. The depth and quality of our new vehicle order bank will prolong current margin conditions. Total operating expenses for FY 2023 are up $278 million against the PCP of $222 million. Acquired expenses make up $26 million of this increase. Like-for-like operating expenses increased by $29 million over PCB with most of the increase coming from employee costs. Employee costs have been impacted by an increased head count to deliver the increased revenue achieved. Higher commissions have been paid as a result of the increase in gross profit and to a lesser extent, increase in minimum wages, superannuation guarantee and inflationary pressures have also contributed to higher employee costs. The changes we've seen for the Mercedes-Benz Agency model results in both higher gross profit and operating expense margin percentages, but has had a limited impact on our overall operating leverage. Historically, ASG has implemented a disciplined expense reduction strategies through focused site rationalization by property acquisitions and dealership consolidation to reduce our occupancy costs. This discipline will continue across our recent acquisitions and where possible, any additional property acquisitions that can be made. If you move to Slide 13, our margin overview. Historical EBITDA and PBT margins have been impacted by acquisitions that were running with higher OpEx margins than the wider groups. The OpEx improvement in acquired sites and the strategy implemented improving our OpEx has driven improvements in the group's EBITDA and PBT margins. In FY '23, EBITDA margin has improved to 8.4%. And despite rising interest rates and inflationary pressures PBT margin has also improved to 4.9%. Margins have been impacted positively by favorable market conditions, particularly in the luxury area, improved site utilization, improved property portfolio, lowering of occupancy costs and strong capital management, minimizing the impact of recent interest rate rises. As a result of ASG strategy, we've seen an increase of EBITDA from $86 million in FY '19 to $198 million in FY '23, resulting in a combined annual growth rate of 23% over the period. If you move to Slide 14, I'll talk you through our cash flows. ASG, the Capital Life business has generated strong operating cash of $166 million, with a normalized cash conversion of 121%. The strength of the cash generation of the business allows ASG to follow its capital management plan by growing through focused dealership acquisitions, investing in facility improvements to capitalize on organic growth and strategic property investments and ultimately, strong shareholder returns. In FY '23, ASG, prior to this investment plan, has spent $116.8 million acquiring on-strategy luxury dealership in dominant locations. ASG has also acquired the Fortitude Valley property that houses our Audi, Lamborghini, Bentley and Maserati franchise in Brisbane, effectively removing the most expensive lease in our lease property portfolio. ASG continues to invest in dealership expansion and improvements to maximize productivity and customer experience and ultimately to support organic growth. And lastly, ASG has declared a fully franked final dividend of $0.10 per share, bringing the full year dividend to a total of $0.19 per share, which is up 19% on PCP. Moving forward, ASG investors can expect to see ASG apply the same capital management strategy. And with that, I'll hand back to Nick.

Thanks, Aaron. And following that update on the capital strategy, I'd just like to take a few minutes on outlining Autosports Group's strategic advantage as we look to continue to deliver high levels of scalable, repeatable growth coupled with those shareholder returns that Aaron talked about. Autosports Group's strategic advantage is that we're a brand-focused business. We've targeted the high-margin brands with good future prospects and meaningful consolidation opportunities with multiple sites and high market share. That gives us an unrivaled position. We're dominant in the best markets. Our cost base and synergy advantages are clear and come through in our OpEx. Importantly, we have people, skills and relationship advantages that come from being focused in one sector of the market and deep with the individual brands that we are with. We're not just the sales organization, however, but all of our income streams have been improving. The front end of the business, the retail side of the business improves in its sales and service side but our service -- we are service providers at the back. The more maintainable, high gross service centers that we have, have been outgrowing the rest of the business and will protect the business and make our margins more resilient as we move forward. The scope for consolidation in our business is significant. We are currently just on 12% of the luxury market. The bigger the Autosports Group gets, the more scale drives faster consolidation opportunities. And indeed, faster consolidation capacity. We also have a proven track record that makes us attractive for the OEMs and for the vendors quite simply because we deliver. If I move to Slide #18, just to talk a little bit more about the luxury focus of our business. Autosports Group continues to be a luxury focused business and a capital city focused business. Why are we that? We are that because our customers are more resilient. Well that because there is a higher cost of sale. And with the higher cost of sales per car, there is an opportunity for higher gross margins per car. The luxury brand also had more price elasticity, so inflation doesn't hurt those brands as much as it hurts other brands. It's a tight market. And in a tight market, it means a couple of things. It's more difficult to disrupt the market and also is capable of consolidation becoming meaningful in the share of each of the brands. To give you a little market update on how the luxury market is going. Luxury market continues to outperform the rest of the market over the last 12 months. It grew at 15%. And when I say grew at 15%, it's 15% growth, excluding the Tesla brand. If I include Tesla, Luxury growth is 27% up. What that shows is the Luxury brands are not being disrupted by new brands. Indeed, they are growing their share on an independent basis. As I said earlier, our order bank continues to grow here and growth in volume in revenue terms, profit terms and importantly, it's more secure based on stronger contracts with higher deposits. Our orderwrite continues to grow prior to our corresponding period. And as I said earlier, our production from the luxury OEMs is now normalized, although logistics and transport continues to be patchy. Another example on Slide 19 of the Autosports Group strategy being fit for purpose is the development of the EV market. Quite simply, we don't need to pivot here, because we're in the right place, with the right brands and the right cost base to succeed. If I look across the shape of the market and look at the volume market, where cars are more price sensitive, there is fierce competition, there is a raft of new entrants entering the market, particularly in EV. There are uncertain outcomes here, uncertain volumes and the winners are undecided. Our focus, luxury brands, see the traditional brands well prepared. Brand conscious buyers buying luxury and brand over price. The high cost of sales in these brands preserves high gross margin opportunities. The service plan offerings within luxury brands and authorized panel allows back-end revenue streams to be protected. An indication of how strong this is, is the extraordinarily strong percentage of our business -- our business is Autobanks, which sits in electric vehicles. I'll move to Slide #20, the growth opportunity for the business. I mentioned earlier that our Autosports Group has 12% of luxury market. As we cycle the acquisitions through the next 12 months, that should rise to around 13% of the market. Our runway of opportunities to grow is secure and Autosports Group currently evaluated multiples on the strategy acquisition opportunities. The cash flows and the opportunity have us targeting $250 million per annum in acquired revenue growth from purchasing new dealerships. In 2023 financial year, we delivered $271 million (sic) [ $272 million ] in growth from the 2 acquisitions that we made, which, of course, as we've mentioned earlier, have a full year cycling effect of $400 million in additional revenue. If I move to Slide 21. Why are these opportunities coming to us or they're coming to us because we've got a proven track record of acquiring and integrating luxury diligence? Now we have the trust of the OEMs and we deliver for vendors. We deliver and we're capable of approval. We have the capital to make the acquisitions and our improved scale means that our capability has increased. Since we listed in 2016, we made 12 on strategy acquisitions that have delivered us just under $1.2 billion in revenue growth from acquisitions. Our track record here is extraordinarily good. If I go to recap and look at the outlook before taking questions. The business delivered last year, 26.4% growth in revenue to $2.371 million, 33% growth in normalized net profit before tax to $115.7 million. Net cash generated was $166 million. Dividend was up 19% with a final fully franked dividend of $0.10 per share. This concludes our presentation. And I would like now to open up the line for any questions that you may have.

[Operator Instructions] Your first question comes from James Ferrier at Wilsons.

First question I wanted to ask about was just on your recent comments there at the end, Nick, around OEM production normalizing. I think it was the reference. So just -- is that essentially a message that supply is now equal to orderwrites?

Not quite. We're still exceeding our deliveries by a little bit, James, but we've got good supply coming through. You'll see that our stock rose by about 27% during the year. We're still running on a really, really tight stock turn of just on 52 to 54 days on stock turn. And stock turns are still quite tight, but we're getting enough production through -- enough production allocation through. The only thing that's been consistent for us at the moment is getting things on and off the docks. So there's a bit of up and down on a monthly basis, but we're happy with supply coming through.

That makes sense. And you touched on the inventory. So there's an uplift year-on-year in terms of inventory and the bailment debt that's partly associated with it. Is that sort of -- is that back to normal and maybe not so much in absolute dollar terms, but maybe as a percentage of sales as a reference point. Are you back to normal there? Or do you still have some more to go?

Now I'd like it to sit at around that, about 55 days worth of stock. And I think that's a reasonable area. That gives us about 40 to 45 days worth of trading stock and then our demonstrated stock on top of that, James. And that's a comfortable level for us to be at. Of course, we're going to look through each individual brand. There are areas where I'm way under stock and the R&D and brands, which have had plenty of stock coming through. And I actually need to reduce a little bit of stock in some of them.

That makes sense. And the final question is around gross margins. So half-on-half gross margins declined, perhaps just mix, but interested in the comment from you there. And then your comment around stable margins going forward. Is that a reference to growth? Or is that a reference to PBT?

I'll let Aaron take this one, James.

James, our second half margin was at 1.5%, and that was impacted by just a shift to the new vehicles coming through at the end of the year. As you saw, June is always a big month of sale and so is May in terms of vehicle delivery. These are the biggest 2 months of the year. So that sort of shifts the gross profit margin a little bit, because it's at lower margin than the back end of the business. Moving forward, we expect it to -- we've got a strong order bank of high gross margin vehicles to come through in the first half and into the second half of this financial year. We expect it should hover around the 19.5% or the 19% to 21%, depending on mix of revenue streams between New, Used and Service and Parts and that actually comes through the system.

Yes. And sorry, just to clarify on the PBT margin, we should be cognizant of the uplift in interest expense rather than just sort of extrapolating stable margins with that volume?

Yes. PBT has risked from interest rate depending on the volume that get through. We get decent organic growth, which we're planning to deliver. James, the organic growth through the existing sites should offset the interest rates, and we should be able to maintain a PBT number like we did through the second half of this year. But they are the 2 competing factors. Interest rates on one side and additional [ 3 ] books per site on the other side.

The next question comes from Tim Piper at UBS.

Just a couple questions. Just following on some of the margin questions, just to clarify on the outlook commentary there in terms of margins remain stable in '24. Are you sort of referring to the 4.9% PBT margin remaining stable in '24?

I'm referring to all 3 margin levels on the way through with the net profit before tax margin being the most volatile to any on throughputs.

Got it. And from now, we're calling normalized post AASB 16, are we?

Yes, we'll be doing that from now on. So you can expect the next results, it will take some time.

I just have a question on the OpEx. Just looking at the OpEx outcome looks quite good compared to obviously growth across the business. I think you called out in this call there around obviously some labor and things like that. Where are you seeing cost pressures? And then, you've clearly done a good job in containing those costs. How have you managed to keep a lid on them over the FY '23 period?

Look, most of our costs have been driven up by the employee costs. Revenue is up 26%, gross profit is up 27%. So naturally, when you look for headcount to deliver that revenue, and we also have that commissions that were higher attached to the high gross margin that's flowing through the business. So whilst it's controllable, it's attached to a good performance.

And then we viewed the orderwrite in July plus 7% year-on-year, is that a like-for-like organic growth figure?

Not a like-for-like number. Sorry there Tim. What we did see in July, first of all, is a record outcome for us in terms of orderwrite. The second what we did see was the first time in quite some -- in full years, but the seasonalization of July was a pre-COVID type seasonalization. We saw slow activity in the first 2 weeks and strong activity in the second 2 weeks as people for the first time in 3 years took some holidays. And so what we saw, we actually encouraged us, and we've got a post-COVID seasonalization again, but strong underlying demand continuing.

Just one last one. Just around your targeted $250 million revenue M&A from here and sort of you provided some detail obviously on how fragmented the deal remains [indiscernible] I guess, a number of deals you're all talking about acquisitions. Can you provide a bit more context around -- I think, you've said you've been talked with a number of opportunities, so they had attractive multiples, $250 in terms of balance sheet funding. I think on the back on numbers you said it's 1.3x net debt-to-EBITDA [indiscernible] financing? What sort of your gearing number on the balance sheet in terms of funding these acquisitions as well?

I'll just touch on the gearing count, but we've obviously got strong cash generation. When you couple that with our internal gearing policies and our balance sheet position at the moment, we're in a position where we continue to purchase similar to what we have over the last 2 or 3 years if the right opportunity comes up. And I'll just add to that, Tim, that level of growth that we're targeting in terms of acquisition, the growth should not change the gearing levels of the company.

The next question comes from Elizabeth Miliatis at Jarden.

The first one is just on sort of scale benefits from these more recent acquisitions. And there's a particular comment in the slide pack on Page 23 referring to for the scale based synergies to drive operating leverage. I mean, you've already made comments around '24 margins, staying broadly similar to '23. But and then just beyond that, is there any sort of benefit that we can pursue more dollar synergies that we can assume from these acquisitions?

There's a couple of points that I'd make Elizabeth firstly. First, the acquisitions that we've taken on in the last year, are still trading slightly behind the core group in gross profit margin. So we have some small improvements that we can make there, and we hope to make them through the year. The second thing that we know is that as we grow in individual brands like we had last year with BMW, what we find is management synergies, skill synergies, stock management synergies through the business and also loading of our service workshop synergies. For example, if you've got a dealership next to another dealership and you're full and booked out and servicing one you can transfer work to another, to unlock better utilization of your sites. So they are the sorts of things that we're looking at on a preliminary basis. The second thing that we're able to do is partner with our OEMs to bring in more technology. And the partnering with our major OEMs on bringing through technology principally in our digital space, also in the CRM space, and thirdly, in the area of delivering better service bookings and better service outcomes with our bottlenecks in our business at the moment. So they are the areas, I'm not probably prepared today to put a number on the synergies that we're looking for, but we do know that as we grow the overall percentage of OpEx stops inside the business.

And just my second question is just around consumer sentiment and particularly the resilience of your customer base. It does seem that it's fairly resilient. And I imagine it would be despite sort of the broader inflationary pressures we're seeing in the market across the whole economy plus also the higher interest rates. But can you just confirm those comments? And are you seeing any sort of headwinds from the volume side just because of the current macro environment?

So far, we're not seeing any headwinds in terms of volume. The higher the price item that we're seeing, the less resistance we are seeing to the purchase of it and those things are good. We are seeing a little bit improvements in our business, in our finance and insurance penetration, which is good and probably goes to the fact that the OEM financiers that we look at are delivering better product at the moment. So those things are positive for us. So overall, we're pretty solid with our customers being highly resilient, and our order bank being very strong and demand continuing to grow.

Next question comes from Brendan Carrig at Macquarie.

Just a few follow-ups from me. I think it was Tim's question just on the orderwrites, Nick. So -- did you say that it wasn't like-for-like, so that 7% up is partly due to the benefits of acquisitions?

It's not like-for-like. So it is partly because of the benefit of the acquisitions, yes.

But as you said, there was more seasonality with more people potentially on holidays, anyway.

Firstly, what we saw during the month was first 2 weeks been quite weak. The second 2 weeks been very strong. We saw very, very good levels of customer inquiry. In fact, our inquiry rate was substantially higher than that 7% through the period. I think we're inquiring with that products, we are engaged with what we were doing. We're interested in their brands, we're just having a holiday for the first time in 3 years and we've see the closing ratio improved dramatically in the second half of July and through the month of August.

And then just following on from those comments in your answer to the previous question. It sounds like cancellation rates, there's no suggestion that they're trending higher. Are you able to just provide a bit more color on where those sit? Last update, I think you were sort of talking about a normal levels of sort of mid-single digits, 4%, 5% range. Is that still where we're sitting?

That's exactly it. There's no upswing. And as I said during the presentation on a couple of times, the good thing about our order bank now is we've spent a lot of time working on it over the last 12 months, and we've made sure that the order bank has substantially increased in the deposits and the quality of the contracts that we've got behind the cars. So we feel more secure than we've ever been with the value and the solidity with the order bank.

And then on the OEM rebate side of things that sort of been trending higher as supply has normalized and sitting just below 6% of new car sales. Is that the level that we should be sort of expecting going forward given we've sort of seen the reset in the supply normalization? And then maybe just a follow-on from that. What should we be thinking about in terms of the OpEx that goes concurrently with that? I mean, I think you had mentioned on the call earlier about commission rates being higher. So there's obviously a linkage there. So interested in any further comments you've got on that.

So just on the OpEx, naturally, if the gross profit margin and the volumes remain and the commissions will continue to trend on the same pattern, but if it maintains level, then the commissions are going to be maintainable level as to what they were this year. And then just back to the first part of the question in relation to the OEM rebates. It's partly return of supply, in particular, the models that come with OEM rebates. We're at 5.8% this year. We're up 5% last financial year. But we've also ticked in extra BMW dealership City, which also come with significant OEM support in terms of target achievement bonuses and other associated bonuses.

And so that would mean if you've got -- sort of part of the mix of the BMWs help this year and so then that would suggest that we should be staying around these levels going forward?

I think that's a fair assumption, Brendan, and also just to reiterate, we think our commissions will track gross margin in presence and if gross margin reduces, go for bid, commissions will reduce.

And then one very quick final question. Do you have any EVs across your brands that are below the luxury car tax threshold that would be benefiting from demand through novated given recent tax changes or you don't have any sort of fit within that price point?

Firstly, we've got quite a bit in New Zealand. And we're running at nearly 50% of our orderwrite in EV in that jurisdiction. We've got quite a bit of supply running through below that limit in our Volvo business, and that is -- and that has very strong EV order banks behind it as well. And early next year or actually probably towards the end of this financial year, we will have some more products coming through with Audi, which will be sitting around that limit time and under that limit. So there'll be more and more coming at that crucial [indiscernible]

[Operator Instructions] Our next question is from Sarah Mann at Moelis Australia.

First question for me, which it's kind of been asked but I will ask more directly. So the implication is that demand or orderwrite is kind of broadly consistent on a like-for-like basis and supply looks like it's improving and probably will improve going into the rest of this calendar year, next year. Is it fair to say that you're now starting -- you've had some monthly or like delivering into your order bank? Or is it fair to say that you think you're going to still have orders exceeding deliveries?

Let's try and be super specific for you, Sarah. In the last 4 months, our order bank has gone down by 40 cars. So we have had a couple of months where we've delivered into it. But our revenue on orders has gone up by more than double digits. Our gross profit in our orders has gone up more than that. And our deposits in our orders has gone up more than that. And as we look forward at our order bank, we're just on 21% of our order bank at EV.

And the other question I had was just on, I guess, F&I and how the financiers are responding? I mean, are you seeing any impact from, I guess, tighter lending criteria or people not being able to like service their loans or anything like that?

Aaron, I might let you to take that one.

I'll talk about where we're sitting in terms of last year and have you talk about what the lenders are doing. Sarah, our like-for-like finance result has been very, very stronger. We're at 24% like-for-like on last year. So our OEM financiers are supporting the business as we expect they would, they've got great product out in the market.

And from the other side of it, on offer basis, we're not seeing any tightening of lending criteria. In fact, what we're starting to see is the OEM financiers support our business by starting to bring some good rate base campaigns into the market, and you will see those out in the marketplace right at the minute. So what we anticipate is further improvements to our finance penetration as we go through this financial year, Sarah.

And then lastly, just a question on agency. Do you have any updates in terms of when the court case is going to have an outcome for Mercedes. And then more broadly, what's the other OEMs are thinking or saying to you around the transition to the agency more given lots of infill in Europe, particularly the European automakers are all shifting over to agency.

So firstly, on the Mercedes Benz, we're not parting to the case, there's no information flow that comes our way. So there's nothing I can update you on that front, unfortunately. I am waiting to look at that the same way that everybody else is. The second part of it is the only change that we've seen in Australian terms in terms of agencies, actually, Volvo moving away from effectively having an agency model in the electric vehicles to transferring back to a dealership style model. And that's occurred in the last month. So we're actually seeing a shift back towards the dealership model, and we've got no other indications from any of our OEMs that they are planning to move to agency in the Australian marketplace, Sarah.

I'm sorry, if I can squeeze in one more question on the M&A and vendor expectations. And I guess just recent pricing in the market, like what do you define as kind of well-priced acquisitions. And do you think the vendors are being reasonable given that clearly, market conditions are really good and margins are clearly well ahead of historic levels?

That's a difficult question because some vendors are reasonable and they will sell their businesses, and some are unreasonable and they won't sell them. The way that we see it is -- and I've said this to you before, Sarah, as we look at what we think the future maintainable earnings are, and we'll go through a 4- or 5-year cycle. And we think if we can pay, depending on the asset between 4x and 6x depending on how maintainable, how exclusive the asset, what it does for the rest of our business in terms of share. We think we've done a really good job for our shareholders if we can buy it in that range as a multiple of profit before tax.

And there's acquisitions out there that are transacting, it's kind of multiple?

Yes. Yes. Certainly it is.

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

Thanks, Amy, and thank you all for taking the time to listen in to the 2023 full year financial year presentation for Autosports Group. I'd just like to take in closing way to thank the Autosports Group staff for the tremendous results for last year. I'd like to thank our OEM partners for their partnership during the year and our customers are buying the cars and enforce our investors for trusting us with your money over the course of the last 12 years -- to 12 months. So thank you very much and look forward to the further call -- any questions that you may have over the next week or so.

That does conclude our conference for today. Thank you for participating. You may now disconnect.