Autosports Group Limited (ASG) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to Autosports Group Limited FY '26 Half Year Results Analyst and Media Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Nick Pagent, CEO. Please go ahead.

Thank you, everyone, and thank you for joining us this morning. Welcome to the investor presentation for the financial results for Autosports Group for the period H1 '26 financial year. As the operator noted, my name is Nick Pagent. I'm the CEO of Autosports Group. Joining me today on the call is Aaron Murray, the CFO of Autosports Group. This morning we'll commence with a short presentation on Autosports Group covering our first half FY '26 financial highlights, our operational highlights and outlook for the balance of FY '26. I'll then summarize our trading result for the first half of the '26 financial year before handing over to Aaron for a deeper look into some of the important financial metrics driving Autosports Group's success, including our balanced revenue growth, our high gross margin model, the improvements to our net margins as our luxury business develops, our balance sheet and cash flows. Following that, I'll give you an update on our progress against our consistent, successful and accelerating luxury brand growth strategy. I'll focus on how Autosports Group has and will continue to outperform in growth terms in the most stable and lucrative part of the market. We are clear with what -- where we want to grow, and we're clear with how we're going to unlock that growth. I'll also show how we've developed in the last 10 years since we listed on the ASX and how our improved business has established a strong platform for high margin growth. As we move through the presentation lodged this morning with the ASX and also with our own Autosports Group investor site, I will, where possible, note the relevant slide numbers for those following the pack. Starting with Slide #3, the H1 '26 financial highlights. I'm pleased to report that Autosports Group has delivered a strong financial result for the first half of FY '26. Revenues have grown another 11% to $1.519 billion versus the PCP. Gross margins have improved in the business to 19.1%. Our normalized profit before tax grew 75% to $35.3 million. The statutory net profit after tax was up 107.6% to $21.7 million, allowing the directors to approve a 43% increase in our fully franked dividend to $0.05 per share on the interim dividend. Whilst our profit before tax was guided in our December AGM, it will be a mistake to underestimate the quality of this result. In terms of revenue growth, margin development and the high-quality acquisitions that we've done during this period, the result was exceptional. To have achieved this in a marketplace that's in flux with new brands entering the market, new taxes4 being implemented and high levels of inter-brand competition, the result is even stronger. It's a testament not just to our disciplined strategy, but an indication that we're on the right path. If I move to Slide #4 to look at the Autosports Group strategy and how that has focused in the last couple of months. Our dominance in the Luxury segment is unique, and that dominance is driving us scalable growth. We have now grown to 87 new and -- new vehicle and motorcycle outlets, 75 of which sit within our core premium segment brands. Our luxury-focused customer database is a huge advantage with over 1.2 million customers inside the database. It helps us -- it has helped us generate in excess of 127,000 new vehicle leads in the calendar year '25. This advantage keeps growing as we develop our scale and size. The number, of course, up 12%, is in line with our revenue growth. Our scale and investments in customers over the years keeps improving our business. Our business is not just a new car sales business. Our used car business, servicing parts and collision repair units, all contribute to our revenues. And every revenue stream has improved in the first half of the '26 financial year. Our core business is stronger and more resilient. We take on more businesses and make them better. Since listing, the business has grown at a compound annual growth rate of 10%. The Parts and Service divisions, the highest margin revenue streams of the business, have grown faster than that at 16% compound annual growth rate as our business has matured. Our core luxury businesses performed better than the balance of our business and guide where we should be growing in the future. Slide #5. Our growth momentum is driven by consolidating what is a fragmented marketplace. But quite simply, we do not acquire everything we're offered. We're focused on our strategic template and disciplined in what we acquire. Our acquisition strategy delivers high returns and a low-risk acquisition profile, luxury brands in major markets, a portfolio with low risk of disruption, high gross margin potential and the potential for synergies within our group. In the first half of the '26 financial year, we added businesses that represent the brands of Porsche, Mercedes-Benz, Audi, Land Rover, Volvo, Polestar and Geely. Focused businesses, focused brands and on strategy for Autosports brand. If we move now to Slide #6 to look at our -- to -- the second half of '26 financial year outlook. We retain a positive outlook as we enter the second half of the year. The new vehicle market is forecast to grow modestly during the period. The Autosports Group brand portfolio remains well positioned to navigate the new vehicle efficiency standards, and more importantly, well positioned in terms of customer preferences. Our used vehicle service, parts and collision repair divisions are expected to continue their growth. Last year's vehicle sales growth will, of course, support higher servicing demand this year. Our revenues will be supported further with the impact of our 3 first half '26 financial year acquisitions. Porsche Centre Canberra, Mercedes-Benz Canberra and of course, the Barry Bourke dealerships, which include Audi, Jaguar Land Rover, Volvo and Geely, which settled on the 29th of December. We expect the development of our Mercedes-Benz business in Southport is on track and will contribute to FY '27 earnings, and we expect to deliver further on-strategy acquisitions during the period. If I move now to Slide #8 to give a summary of the first half '26 financial year results before passing on to Aaron. As I noted in the opening, revenues were up 11% to $1.519 billion, but it was our disciplined trading that pleased me most. Revenue increases were balanced between organic growth of $44 million and acquisition and greenfields growth of $105 million. Gross profit growth outpaced revenue growth at plus 15.6% on an improved revenue mix and inventory profile. Our operating expenses were well controlled, especially in the core business, with expense growth driven by variable expenses tied to gross profit generation. Indeed, those expenses were good expenses to go up because they were evidence of growing profits inside the business. Interest costs were stable, even though the business continued to grow with the acquisitions that we saw. Earnings per share grew at 107.4% versus the prior corresponding period, even though we issued some shares as part consideration for the purchase of the 10 Barry Bourke dealerships that settled on December 29th. The dividend, as I mentioned, fully franked, $0.05 per share as an interim dividend, and that was 42% up on the prior corresponding period. If I move to Slide #9 and look through how this result was constructed. I'm pleased to say that each revenue division is on track. Every revenue stream is up. New Vehicles was up 11% -- 9%, Used Vehicles up 11%, Service revenues up 12%, Parts revenues up 16%. The high margin service and parts were strongly up, driving our margins. Gross margin at 19.1% evidenced strong trading disciplines during the period and the profit before tax margins continued their development back towards our long-term averages. The core business continues to outperform in the luxury brands. Pleasingly, for the business, January has also continued on track. New vehicle order rate continued to be solid in January, up 13% on the prior corresponding period. Service and parts continued their trend up, 11% up on the prior corresponding period in revenue terms. I'd now like to take the opportunity to hand over to Aaron so that he can go through the detail of our balanced revenue growth, gross margin development and sustainable luxury margins, our improvements in net margin, balance sheet and cash flows. Aaron?

Thank you, Nick, and good morning to everybody who has joined us on the call. If you turn to Slide 11, I will talk you through our FY '26 revenue. Historically, ASG has delivered consistent revenue growth through a balanced mix of organic expansion and acquisitions. In the first half of FY '26, ASG achieved revenue growth of $149 million compared to PCP. This growth was driven by $105 million of acquired revenue following the settlement of Gulson Canberra, Mercedes-Benz Canberra and the Barry Bourke businesses. This was supported by $44 million of like-for-like growth. ASG delivered organic like-for-like revenue growth across all income streams. New vehicle like-for-like revenue increased by 1.3%. Used vehicles grew by 5.4% and the higher-margin Service and Parts segments increased by 5% compared to PCP. Looking ahead, ASG's second half FY '26 revenue performance is expected to be supported by a full 6 months of trading from the 3 recent acquisitions. If you turn to Slide 12, we'll look at our margin performance and cost discipline. ASG's luxury heavy platform continues to deliver consistently strong gross profit margins. This reflects the strength of our dominant market position and continued improvements in inventory depth and mix. Importantly, we are seeing sustained growth in our high margin aftersales departments. The aftersales department has seen a combined annual growth rate since listing of 16%. That mix shift remains a key driver of margin resilience across the group. From June 2024 to December 2025, ASG's overall gross profit margin has averaged 21% above the Deloitte dealership benchmarks, reinforcing the structural strength of the business and the quality of our earnings profile. Turning to expenses. We remain highly disciplined in managing the cost base. Our semi-fixed and occupancy costs are stable to improving. On a like-for-like basis, occupancy costs decreased by $868,000 or 13.6%. In other expenses, we reduced by $673,000 or 1.3%. Like-for-like employee costs increased by $7.7 million or 7%. However, this increase is mainly due to higher commissions attached to the strong like-for-like gross profit increase of $18.9 million, up 7.5% on PCP. Finally, we continue to focus on improving site utilization across the network, which presents further opportunities to optimize our footprint and to drive additional occupancy cost efficiencies. Overall, the combination of the structurally strong gross margins and disciplined cost management positions ASG to deliver sustainable earnings growth through the cycle. Turning now to our net margins on Slide 13. We are seeing a clear improvement with margins on track to return to our long-term averages. PBT margins over the period have been influenced by movements in gross profit margins and finance costs. Total interest expense increased by $345,000. However, on a like-for-like basis, interest costs were down $1.9 million. This reflects active debt management with the introduction of the syndicated debt facility, improving our funding conditions. Looking ahead, we see meaningful operating leverage across the business. New vehicle margins continue to improve as the market stabilizes and pricing discipline returns. We also continue to see strong growth in our aftersales revenue, which provides structural margin resilience and underpins our earnings through the next cycle. Importantly, finance costs have stabilized in the period following 3 years of growth. Our core luxury franchises are currently operating at 3.6% profit before tax margin, and we see further margin uplift opportunity from the H1 FY '26 acquisitions as synergies are realized and performance is optimized. Overall, we see a clear pathway for PBT margins to normalize, supported by improving gross profit margins, stabilizing finance costs and embedded operating leverage across the portfolio. If you turn now to the balance sheet on Slide 14. We finished the period with corporate debt of $298 million, supported by property assets on balance sheet at a written down value of $232 million. Importantly, the most recent independent valuations of the property have resulted in a further $31.8 million of property equity that is not recognized on the balance sheet. The movement in net debt from FY '25 to H1 FY '26 reflects acquisition activity. This included the purchase of Gulson Canberra, Mercedes-Benz Canberra, Barry Bourke Motors and the property at Nerang Street on the Gold Coast. These investments are on strategy and they're aligned with our long-term growth objectives. Importantly, our balance sheet is well positioned for future growth. The group has an undrawn syndicated debt facility of $27 million, providing capacity to support future growth opportunities. Overall, our balance sheet remains well supported by tangible property assets with flexibility to continue executing on our disciplined acquisition strategy. We turn now to Slide 15, we'll look at our H1 cash flow. ASG delivered operating cash flows of $22.4 million for the period, representing a cash conversion of 67%. While this is a solid outcome, cash conversion was impacted by the timing in working capital movements. Our debtors increased by $21.4 million and our creditors decreased by $35.2 million, resulting in a total working capital impact of $55.6 million. These movements are purely timing related and do not reflect the future cash flow conversion of the company. Looking ahead, the syndicated debt facility will continue to provide cash flow benefits of approximately $25 million per annum, further strengthening liquidity and funding flexibility. Our approach to ASG's capital management remains disciplined and consistent. ASG prioritizes growth. This includes acquisitions, greenfields and strategic property investments. We remain committed to shareholder returns. We've declared an interim dividend of $0.05 per share, fully franked, up 42.9% on PCP. In the second half of FY '26, we expect capital expenditure of $8 million to $10 million focused on improving retail and service facilities. These investments are targeted, return-focused and support both margin expansion and customer experience. And with that, I will now hand back to Nick.

Thank you, Aaron. If I move along now to Slide #17 and just to give you an update on Autosports Group strategy. Our clear, deliberate and consistent strategy has been a strength of Autosports Group since it was founded 20 years ago. This strength will continue as we grow the business further into the future. Our strategy has delivered outperformance in terms of growth, resilience, in terms of brand and market presence and the unique position that is now difficult to disrupt. It is -- in the most simple terms, Autosports Group's strategy is to represent the world's greatest luxury automotive brands in the best metropolitan markets. The way we make ourselves attractive to these brands is simple, but difficult to replicate. We make ourselves the highest market share, the lowest cost, the most reliable distribution source for both our OEM partners, but also the best place for our customers to buy from. We understand the luxury brands. We do it their way. We're consistent, reliable and low risk. We look after the customers. And as I've noted earlier, we have a unique offering in terms of scale in database, customer management, staff development, luxury know-how and financial capability. If we move to Slide #18, this shows how this strategy has worked for us. Since listing, the automotive market has been relatively stable, but Autosports Group has grown at a compound average growth rate of 10%. As we grow, so do our opportunities, so does our capacity to grow, but also so does the value that we provide to our OEM partners and to our customers. Slide 19 shows where we intend to grow and where we have grown. This slide shows our premium brand focus. Of our 87 dealerships, 75 of them sit within this template. We look here for premium brands with strong product lines, brands which have the right mix for the new vehicle energy scheme, brands which appeal to premium customers. We earn the right with these brands to represent them in multiple sites, that gives us a deep understanding of each of the brands, and we make sure that we take time to understand each brand's separate DNA. We ensure that we deliver quality representation in metropolitan markets, markets that will have long-term distribution outlets for these brands, and we deliver quality outcomes for them. Slide #20 shows the outcome of the unique luxury platform that we have set up over the last 10 years, a platform that is set well for future growth. On the left-hand side of the slide, we can see the brand development since we listed in 2016. What we have is a brand portfolio that is stronger, a brand portfolio that is deeper, a brand portfolio that is more resilient, but a brand portfolio that is firmly focused in luxury brands. It's more diverse. It's more concentrated in the high margin segments of the market. It's exactly where we want to be, and the brand portfolio is stronger over the last 10 years. This year, we entered the brand of Porsche for the first time, expanding our luxury template. We entered the brand of Zeekr for the first time, expanding our luxury template, but again, in the right areas. Our geographic footprint, too, in the middle of the page, has expanded, but we've maintained our strategic objective to be in the major cities in major long-term markets. Again, this strategy has been about getting higher resilience, a deeper opportunity, but it's maintained our focus on being in the right long-term markets for luxury customers. Finally, as our business has matured, our gross profit orientation has also matured. From 2016 to 2025 calendar year, the mix between our gross profit generation, between the front end of our business, the new and used car sales areas and the back end of our business, the service and parts areas, has moved. We now sit with 45% of our gross profit coming from service and parts. This is -- These areas are more predictable. They're more maintainable. They're a higher margin. As you'll hear over the next couple of days, service absorption is the guide to long-term resilience and long-term profit. These developments have made the platform for our growth stronger. They've made our profit more resilient and they've made our growth path more diverse. If I move to Slide #21 and look at one of the other areas that we have developed very well over the last 5 years. Our property strategy continues to be focused. It continues to drive strength for the business and flexibility, as Aaron noted earlier in his presentation. The market value of the Autosports Group property portfolio now sits at just on $264 million. During the period, we've acquired the site in Nerang Street at Southport for $17 million, which will be a incredibly strong Mercedes-Benz business when we complete it over the next 18 months. We've also entered an agreement to take on a purchase in Canberra at Melrose Drive, where we will consolidate our Mercedes-Benz and Porsche businesses in Canberra. If I move to now through to Slide #23 to reconfirm the growth pipeline that we have. Over the last 2 to 3 years, we've confirmed -- we've kept confirming a growth target by acquisition of $250 million. It is likely in the '26 financial year that we will exceed that. It is likely that we will add further acquisitions through the course of this year. However, we reaffirm the long-term commitment to go and look to $250 million a year in acquisitions. We acquire, obviously, by consolidating the market. Through -- since listing, we've added 53 different dealership sites across and opened 17 greenfield sites. This has given us huge scale. And through the '26 and '27 financial years, we've added the Porsche Centre Canberra business, the Canberra Mercedes-Benz business. We're developing the greenfield site, Southport Mercedes-Benz. We've taken on Geely at Leichhardt. We've taken on Volvo on the Gold Coast. We've taken on Polestar as well on the Gold Coast, and we've taken on the 10 businesses at the Barry Bourke Motor Group. As I turn to Slide #24, just to reconfirm the details of the Barry Bourke Motors acquisition. The business is a meaningful growth in key metropolitan Melbourne locations with key Autosports Group partners. The deal was $29 million in goodwill. It was 50-50 with script issued at $4.50 per share, which utilized our strength as a listed company in providing us further funding options. The business is anticipated to have revenues around $200 million per annum and is expected to be immediately accretive. The key underlying strengths for us in this acquisition were the acquisition of an eighth Volvo site, which allows us to line up in the Melbourne market area, Berwick, next to Brighton, next to Doncaster, next to South Yarra, in the spine of Melbourne Volvo dealerships. It's given us an extra Geely site. It's given us our fourth Jaguar Land Rover dealership, which allows us to line up Berwick, Brighton and Doncaster, through the center of Melbourne. It gives us our first Audi dealership in Melbourne so that we have Audi representation down the whole East Coast of Australia. It allows us for further optimization, and there continues to be a full brand review underway inside that business to make sure that we get the right profit margins through that business as we develop it over the next year. If I move now to Slide 23, just -- 26 to reconfirm the enhanced platform that Autosports Group has set up for the future. We have luxury brands, which deliver high gross margin potential with fewer competitors. The luxury focus drives superior database depth, customer acquisition costs and staff development. The prime locations secure Autosports Group access to growth corridors and a resilient cost base. Our track record of excellence drives M&A opportunities. It drives brand approval and supercharges the growth outcomes. Our platform is uniquely positioned to deliver high growth, high margin. a dominant market position and scalable growth. If I reaffirm the FY '26 second half outlook, before I open the call up to questions, we expect the new car market to be stable through the second half of the year. We expect Autosports Group's brand portfolio to remain well positioned in terms of the new vehicle energy scheme and consumer preferences. Service, parts, used cars, we expect to continue to be strong. Full year cycling of our acquisitions will boost our revenues through the period. In '27, we'll add the Southport Mercedes-Benz business. And as I've said a few times, we anticipate further on strategy accretive acquisitions through the period. I'll now open the call up to any questions that anyone might have.

[Operator Instructions] The first question comes from the line of Tim Piper with Jarden.

Just the first one, obviously, a very strong gross margin outcome, and apologies if you covered a bit of this detail on the call. But can we just talk about the moving parts there? It looks like you've probably written better quality revenue on the new car side of the business, hence, that uplift, but also what's contributed from the back-end side of the business to driving that gross margin outcome? And how do we think about that through the second half now?

Yes. So firstly, your rough summary of it is very accurate. We've been sensible in the new car business that we've written during the period. Our inventory mix has improved during the period, which has allowed our gross profit in new cars to improve. We haven't stretched our revenue to go and write subpar business in new vehicles. I'm pleased with that on the way it means the revenue that we've got is sustainable and in good shape. But you're right, the back end of the business grew well during the period. That supported margins and will continue to support margins through the next year to 2. Normally, seasonally, Tim, there's a slight drop in gross margin in the second half of the year because there's more new car sales in the second half of the year, and that seasonality normally works about 47% first half of the year, 53% second half of the year. So there's generally, in our history, a slight drop in gross margins in the second half of the year, but that's just a mix change during the period, too.

Understood. And if we look at sort of the first half period from -- again, from a new vehicles sales point of view and the luxury market has been doing quite well relative to the broader market in recent months. If we kind of look at that organic growth rate you did in the first half, what are you kind of hearing from key European OEMs around demand and also supply in the second half when we think about luxury potentially continuing to outperform the underlying new vehicle market?

Yes. I've been a little bit cautious in my outlook statement there. The luxury OEMs would like to have slightly higher growth than I've indicated on the way through there. I'm not concerned about that or worried about that. I actually think that that's upside opportunity for us, is the first point that I'd make. The second point that I'd make about the Luxury segment and why I really like it at the moment is I actually think that the Luxury segment is less involved in the disruption coming in from new brands on the way through. And I think the Luxury segment is likely to grow. I think there are some new brands coming into the market from the Chinese side, brands like Zeekr, which we've got and is doing well for us. I think there are other brands coming into the marketplace, which will also do well, but I don't think they're going to take away from the core luxury brands that we have. So I'm pretty happy about the position that luxury market is going to have in the next 6 months and beyond, Tim. The second half of this calendar year, the 3 big German brands which are big contributors to our business, all have very strong product portfolios coming out. And the first half of '27 looks very positive for the business.

So I might just squeeze one more quick one in. I think going back to the August result last year, looking at what you'd completed in M&A and then the greenfield growth opportunity within the business. I think you kind of framed it as a conservative 10-plus percent EPS growth from that side of the business through FY '26. Zeekr volumes look like they've been pretty good, as have Polestar, et cetera. Maybe can you give us a rough idea of how that's kind of tracking versus those initial expectations of 10-plus percent EPS growth?

Tim, it's -- the acquisitions are tracking well. They're all tracking on expectations. We're moving -- if I look at them individually, Porsche started well for us. We have transitioned through a couple of the volume brands on that site. We've pruned the portfolio in those businesses to make it correct in the margin profile on the way through. The Mercedes Canberra business has probably started ahead of expectations for us. The Barry Bourke business settled maybe 2 to 3 weeks later than I initially anticipated on the 27th -- on the 29th of December, but we've been happy with the order right through the month of -- from the month of January through there. So I think the initial guidance that we've given you on that EPS accretion is solid and good, and we're confident that we'll get it.

Next question comes from the line of Tim Plumbe with UBS.

Just speaking about your comments in terms of the outlook, maybe can you talk a little bit about how the luxury brands tend to perform relative to the volume segment against the backdrop of potentially increasing interest rates in the next 12 months ahead, please?

Yes. There's no doubt that interest rates, if they rise at an elevated level, impacts the luxury market, it impacts the whole market in terms of affordability of cars in terms of repayments. One or 2 interest rate changes are unlikely to go and change that. The one -- the things that the luxury brands have in terms of flexibility, in terms of ability to combat interest rate rises on affordability include the fact that the 3 luxury main brands, particularly German ones, have their own OEM-based finance companies, which allow them to be flexible on the rates they provide the marketplace and provides some capacity to absorb interest rate increases. So over the course of the last 4 to 5 cycles, the luxury market has moved up and down with the overall marketplace. What I think, though, rather than an interest rate story, when I look forward at the 12 months coming up, I'm looking at the flux within the marketplace, the huge entrants coming in from volume Chinese brands, the impact that's making on volume brands within the traditional marketplace. What you're looking at a market which is flat, but there's huge flux going on. And within that, Tim, I'm really happy to be in the Luxury segment where I think the brands are more resilient, and I think they'll be more consistent over the next period. I think that's played out already in the first 6 months of the year. And I think it's going to play out certainly in the second half and through '27 as well.

Next question comes from the line of James Ferrier with Canaccord Genuity.

Can I start by asking you about the order book and the -- sort of the trajectory on your new vehicle revenue? I mean you touched on it earlier, Nick, around sort of taking a pretty disciplined approach to the mix of new vehicle sales, and that's reflected in that like-for-like revenue growth of 1% for the period. But just some extra color from you around where the order book is sitting? And in that second half '25 period, you probably had to start to cycle some stronger order right as that period progressed. So how you're feeling around order right, the order book today and converting that to revenue as this full second half period evolves?

Yes. There's a couple of things in that, James, and thank you for the question. The first thing is, you're right, we're starting to cycle better comp data. We started to cycle that probably from about November last year. And that's why I'm actually quite pleased with the January outcome at 13% up in order right. We were cycling better numbers this time last year and for us to be up has really made me feel quite confident about the order right outcomes. For me, what I'm looking for in the second half of the year is small growth in organic order right. But what I continue to go and look for within that order right is an improved mix of the sales and an improved new car growth opportunity coming from that. What we're seeing as we enter this year is a stock profile that is better than this time last year. And as a consequence, the revenue that we're going to generate, has an opportunity to be done at a more sensible trading outcome. That is one of the things that I'm really happy about, and that's one of the reasons that in my summary at the start, I talked about each revenue stream being on track. And that's what I mean by being on track where we enter the year with a very clean business.

Yes. That makes sense. It's been helpful sort of listening to yours and Aaron's comments around where the PBT margin is now, also within the mix of some of the dealerships you represent the core luxury and how it sort of -- how it's positioned relative to historical norm. When you apply the same lens to the gross profit margin, there's obviously been some pretty significant structural changes in the way that presents in terms of the influence of agency and the impressive growth that ASG has achieved on back-end operations and the mix difference that creates. So when you look at the gross margin in aggregate, for Autosports Group today at that 19.1%, where do you see it relative to a sort of a target level through the same lens that you've got a PBT at 2.3% versus 3%? If you could sort of give some comments on the gross margin equivalent of that?

Yes. James, I'm actually -- I'm pretty happy with the gross margin that we generated in the first half of the year. I think 19.1% is quite strong. I think I indicated to Tim Piper earlier that I expect the second half of the year with the revenue mix drifting a little bit to new cars. We could even dip a little bit in the second half of the year, not very much, but just a little bit, and that will be on revenue mix through the period. As we move forward the next couple of years, that range, somewhere between that 19.5% and 18.5% is a zone that we think that we can go and maintain the business at. As we get more agency volume in with Mercedes in '27, that might pick up just a little bit, James, but I've got to go and do some work on it before I can give you a stronger indication.

No, that's very helpful. And then last one from me. Given you had those acquisitions settled pre December 31, when you look at the inventory position for the group as at 31 December, how are you feeling about that? Is it a bit heavy? Or is it just right?

It's pretty good, James. The like-for-like inventory was up about 1% during the period, and we were up 11% in revenue or 9% in new car revenue. So stock depth in the business actually reduced during the period. So the actual depth of stock is in a pretty good position. But as I said earlier, I'm more happy with the mix of stock than I am the depth of stock. I think the second half of the year, we're going to continue to look at the depth of the stock, but the mix is the key issue and the mix is what's generating the improved gross profits.

Next question comes from the line of Sarah Mann with MA Moelis Australia.

So very strong new order right of 13% in January. Just curious how much of that was driven by the acquisitions in the period, just so we can get an idea of, I guess, the like-for-like base versus the market?

My sense, Sarah, is -- and I don't have the exact number in front of me, but 9% out of acquisition-led order right growth and 4% out of like-for-like growth.

Got you. Okay. And is it fair to assume that, that trend has kind of continued in February to date from an order right perspective?

Yes, we've got -- I've got 2 weeks of data through February. The trend is continuing in the same manner. And again, to make the point, at that level, I'm very, very comfortable.

Awesome. Okay. And then on GP margins, I know we've kind of discussed it a little bit, but kind of the mix and how that changes over the second half. But just curious, based on your comment before about how some of the luxury OEMs are expecting a little bit stronger growth. Just curious, based on the level of demand that you're seeing, like how comfortable are you with the amount of stock coming in and the mix as well?

Yes. Comfortable with the stock coming in. Where they're looking for growth is in new models coming through. Those new models easier for us to sell and are able to be sold at a higher margin on the way through. The risk for us is when they push through old models at higher volume. And that's not what I'm seeing. What I'm seeing is ambitious plans with really well spec cars. I'm seeing some of these brands' pricing strategy look very, very strong in the next period. So there's opportunity actually, I think, Sarah, for the luxury market to increase in the share of its total market. I know there are some other brands coming into the market. I think they'll be successful. And I think the luxury market could be gaining share over the next 1.5 years.

Awesome. And look, one last question from me. Just in terms of the greenfields, how do you think about further opportunities there based on kind of your existing footprint?

I continue to look -- particularly in our business, I can continue to be interested in expanding within the Geely Holdings Group, particularly if I can use our existing template. I think that's nice adjacent growth with us. It's one of our key partners. I'd like to continue doing more of that. When I'm looking at greenfields growth, Sarah, what I'm looking for is businesses that can generate gross margins, which are in line with the rest of Autosports Group. So I'm not looking to move outside my hitting zone. I'm not looking to go and find new entrants into the market in the volume segments, which will have gross compression for the business. That's not my goal, and I won't be stepping outside my line.

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

Thank you. Thank you, everyone, for the time to come and listen to us today. I know that today is a very busy time in the market. I thank the shareholders that are on the line for their continued trust and their investment in the company. I'd also like to, just before I leave, take the opportunity to thank my team across the business for delivering such a tremendous result, to deliver a result that's 75% up on the prior corresponding period, is outstanding. I thank them all for their contribution and the way that they've looked after their brands and customers during the time. I also would like to thank our OEM brand partners for their support over the last 12 months and look forward to delivering more for them in the next 12 months. Thank you very much.

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