Bapcor Limited (BAP) Earnings Call Transcript & Summary

Welcome to the Bapcor Half Year FY 2022 Financial Results Investors Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Executive Chair, Maggie Haseltine. Thank you. Please go ahead.

Thank you very much, operator, and good morning to everybody. As she said, my name is Maggie Haseltine, I'm the Executive Chair of Bapcor. And I'm delighted today to be at Tullamarine to present our half year results. We are here as a full team, and we are particularly proud of the team to deliver such solid results coming out of a challenging time. I'd like to start by personally thanking all staff, suppliers, customers, investors for your continued support. And also, in particular, I'm sitting here with the corporate leadership team today. I just want to thank them all for their passion and contribution to these results. And also to you, Marty, you're on a call, you're not sitting with us today. So I just want to start to thank everybody. I am going to take the deck as read, and it's a fulsome deck, and we've got many of the team presenting and talking to their slides today. So I'm just going to call out some of the highlights. I'm personally delighted to see the revenue growth, despite as we all know, the significant impact of lockdown, just continues to demonstrate the resilience of the Bapcor business. And as you'll see in the deck as we go through, as soon as we've come out of lockdown, sales have rebounded. Secondly, we have delivered the pro forma NPAT of $61 million, which is in line of -- as we talked through at our AGM, with our full year guidance. The other point I'd like to highlight is we continue to look after our people. And it's fabulous to have everyone move into the office in 1 location in Mount Waverley. We've also reinstated the pandemic-led policy, and we'll see some impact of that on financials as we go through, but we believe in our Bapcor values and doing the right thing by our people. We've introduced a flexible working arrangement policy. And secondly, we've also launched the workplace culture review, which I will talk to further on the next slide. And I think the other thing, of course, is that we've kept our people safe, which has been, I guess, difficult in these circumstances, but certainly top of priority for us. We've increased our interim dividend by 11.1%. And since December, we've made 2 acquisitions, which will supplement the 2022 organic growth after the easing of lockdown restrictions. I also -- because really now, which I'm -- firstly, I'm very, very delighted as we open up, for today, to congratulate Noel Meehan on his appointment as CEO of Bapcor. I've spoken to many of you over the few weeks and months. This is a continuation of our succession planning. Egon Zehnder was appointed in February last year to start out with the CEO criteria, continue to work with Egon Zehnder. And in the last couple of months, we've gone in the national and global search. We've had a range of panel of candidates, and we took them to the wire. During the process, I addressed the GLT, the leadership team, and asked and invited any of the leadership team who felt that they would like to be in the process to step forward. And also through last year, we've spoken to many of you, there was a process around development for the leadership team. So we have conducted a rigorous process, and we used weighted scoring processes with many, many data points and involved external parties. We reached a unanimous Board decision to appoint Noel. Why Noel? He more than met the criteria. He brings significant depth and breadth of experience through his roles in Orica, treasury in Toll. He brings strong international experience and Asian experience. He also brings ASX, merger and acquisition and investor experience. He also knows the business, and I congratulate him for stepping up immediately as head of the leadership team to very ably demonstrate being a leader and for Noel leader of the leaders in the acting role. I think most importantly, we're really clear about our continuity of our strategy and I've been asked that question many, many times. The strategy is as stated, and we will continue that. And also, I just want to thank the cohesion of the senior managers. We've been through some troubled times internally and externally, and what I've seen is a united team. Just want to give you an interesting step because I saw a report yesterday that sort of said it was rare for CFOs to become CEOs. In fact, currently, 1/3 of today's ASX 100 CEOs were former CFOs. So I think that talks to -- it's not a rare appointment and so, I would, again, congratulate Noel and the team. Just as a transition, I will stay on and remain as Exec Chair until March 31, which will allow Noel, as any external CEO would, to be able to do a formal business induction and actually take that time. Noel joined in June 2020 amidst the COVID, and I think we've all been hindered in our ability to not only travel across orders, but to get out and about in the business. So that formal process will be undertaken. So I'm going to move on now to just also in terms of further succession, we are obviously now full steam ahead in the process of CFO recruitment. Noel has been doing both jobs and that's been a stretch. The next one is Board renewal. We listened -- we've listened to feedback, and it was strongly suggested that the Board would need continued automotive experience. So we're delighted to also announce the appointment of Mark Bernhard, which is effective of March 2020 (sic) [ 2022 ]. And Mark's credentials are in the deck there for you. We will also go out into the market at some point for another [ year ] with strong ASX experience because in Therese succession -- Therese Ryan will be stepping down at some point over the next time. I just want to note, before I hand it over to Noel, I just want to address one other point around media speculation. And I've been asked directly this morning and yesterday by investors as why we didn't go out to the market to refute that. There was an article in The Australian on Sunday night, Monday morning. I was contacted directly by DataRoom. And I can honestly tell you, I've not had 1 phone call, 1 e-mail out or 1 -- sort of even 1 contact. So there is no need. So I just wanted to address that straight up. I also got asked about why was the announcement of CEO rushed due to that. Actually, it has no bearing whatsoever. We had a contract signed, and we were always ready to go as we've talked about. So I thank you. I'm sure we'll have questions at the Q&A, but I'm going to hand to Noel. Over to you, Noel.

Thanks, Maggie, and good morning, everyone. Thank you for joining the call for Bapcor's half year results. First of all, I'd like to say it's an absolute honor to have been appointed the CEO of Bapcor. I'm absolutely excited about the future of the business. I'm passionate about the business, and I'm really passionate about the people who are at the heart and soul of the Bapcor business. Yesterday, I was humbled by the reaction internally from numbers and numbers of people throughout the business, both in Australia and New Zealand and Thailand that reached out to me to wish me well for the future. Just on the 50 team members across all levels of the organizations were kind enough to send out best wishes yesterday. I spent yesterday doing a number of things, but one of the things I did is I spoke individually to the 50 people that were kind enough to show their appreciation of me in the role as CEO. So my thanks for that. Absolute focus for me is to continue to perform in the business, to also transform the business to greater success and to optimize the potential, not just of the people in the business, but also the business itself. So it's a really exciting future. If I now turn to Slide 4 in the pack, just to go through some high levels of numbers from a group perspective, and then we'll get into some more details, and each of the EGMs that run their individual business will then talk to their individual performance over the 6 months. As you can see from the chart, it's a very solid result in the first half of FY '22. As Maggie said, we've seen revenue growth despite all the lockdowns, demonstrating the resilience of the Bapcor business. As you see on the chart on the left, really, really interestingly, yes, we've seen revenue growth of just under 2% in the half, but that was 28% higher than 2 years ago. EBITDA was down 5.8%, but again, 28% higher than 2 years ago. We called out in October at the AGM that we expected the first half of the year to be softer than the prior year. And so as you can see, that has come through. As Maggie said, we've continued dividend growth. Cash conversion sitting at 69%. Let me just cover a couple of things on that. You'll all be very familiar with all the supply chain challenges that we're experiencing across the globe. We are carrying higher levels of inventory. When we go to the balance sheet shortly, you'll see that we've got an increase in inventory of $38 million in the half. $21 million of that is in goods in transit, so yet to land into Australia and New Zealand. If we had that stock in our warehouses and sold that stock and even if we made no margin on that stock, cash conversion would move from 69.4% to over 85%. The way we've approached inventory is to look at it from a risk mitigation perspective to set this business up for the future demand growth that we see in the business. Really pleased to see the store expansion continued. You can see there was 18 new locations added in the half. And as Maggie said, since December, we've acquired 2 businesses, 2 really powerful businesses. One will form part of our specialist wholesale channel. It was a business called Gibbs Truck And Trailer Parts. That business has been operational since 1950s. It's located in Queensland. It's got 5 locations. It's really -- got really, really strong customer relationships. We will continue with the same team, and we're delighted to add that business into the portfolio of CVG, the Commercial Vehicle Group. We think it's a perfect fit. We've also acquired Blacktown Spares (sic) [ Blacktown Auto Spares ] in New South Wales, which will fit into the Trade portfolio. Again, a strong family business, been in operation since 1969. So really, really pleased to see that continuing. If I move now to Slide 5. You have seen when we announced the -- at the AGM, we have an indication of what was happening on lockdowns compared to the prior year. As you can see there, we have, in the first half of this year, considerable lockdowns, particularly in the first quarter compared to the prior year. Interestingly, you'll see on the left-hand side, as lockdowns have eased in Australia and New Zealand, we have seen business performance improve. So you see on the left-hand side the quarterly revenue. Across each of the segments, you can see, for example, yes, trade revenue in the first quarter at 2.1% growth, 4% in the second quarter. New Zealand, which was in alert 4 lockdowns, went from negative 10% to positive 12%. Special wholesale from 6.4% to 8.5%. And retail, minus 11% to 0.8%. So you see the resilience of this business as we come out of the lockdowns. The next slide on Slide 6 gives us further clarity on sort of what's happening there. And if I draw just some attention to the like-for-like sales. You will recall, FY '21 was an outstandingly strong year in terms of comparable sales. Again, if you look at the bar chart on the right, just to sort of give you the orientation. You can see there, trade in the prior year half, 11.2% growth. In this half, we have delivered 1.1% like-for-like growth of that 11%. You see then what's happened across each of the businesses. And again, if I just call out and no data will get covered up by the EGM. But If you look at retail, yes, retail is negative sales growth like-for-like of just under 9%, but that is coming up in the next [ outstandingly ] high comparable in the prior year of 37%. On the revenue on the left-hand side, really pleased to see the strength of revenue in the second quarter, building up momentum as we go into the second half of this year. Turning to Slide 7. I will just make a few comments on the -- from a group perspective. And then each of the EGMs that run the businesses, Steve Drummy will talk through Trade; Tim Cockayne, Retail; Craig Magill, Specialty Wholesale; and Martin Storey will talk through New Zealand. But if I make some comments on this sort of page. The business, if you look at sort of our ability to sort of maintain our gross margins, has been maintained in the half. You'll then sort of say, well, what cost pressures have we seen? And can we pass them through? Yes, there's cost pressures in the business, cost pressures in the economy, we normally can pass those through. In this half, we have made a deliberate strategy to, a, look after our people. And you'll see that we have incurred additional labor costs associated -- avoiding standing people down. We've paid pandemic leave. We've done vaccination incentives. We think that is the right thing to position this business for the future. Life is an important component of running any business, and no different in the Bapcor business. And so we've done that. The DC transition is continuing to occur. And as you'll recall, as we transition from a number of warehouses into 1 central warehouse in Melbourne, we're going to have duplicate costs for a while as we sort of work through that. The other thing that I would say is we have incurred some additional freight costs as we've sort of gone through some of the supply chain issues that we have experienced. You'll be committed with the logistics challenges in terms of getting truck drivers, deliveries, all those type of things. And so in order to supply our network, if we had to incur some extra costs to move freight around, we have done that, been a deliberate strategy to do that. So overall, very, very pleased with what we've seen from an overall segment perspective. I'll now pass to Steve Drummy, who is the EGM of Trade, just to talk through his business performance in the half.

Thank you, Noel, and good morning all. The Trade business continues to set record sales despite this being the second year of COVID, with lockdowns in 2 major East Coast states in HY-FY '22 impacting the business. Rather than the uplift we saw in the first year of COVID, in H1, we saw more of a moderate increase given the impact of COVID across the Trade business. However, we did achieve plus 3.1% revenue growth on the prior comparative period. This was despite the lockdowns mainly in New South Wales and Victoria. And importantly, we were plus 15.8% on H1 F '20. We achieved $52 million of EBITDA and an EBITDA margin of 16.2%, in line with our H1 F '20. From an EBITDA dollar perspective, that is 9% down in the prior period. However, we were plus 13.3%, up on HY F '20. The first half result was impacted by key decisions of leadership in line with our values to support our team members through the first quarter of FY '22. As Noel mentioned, we made a strategic decision not to stand down any of our people during that period and to absorb this cost as an investment in our future team and staffing capacity. Because of this, we are now well placed to capitalize on our strong team in a tight labor market. We continue to develop our own brand with another increase in the percentage of private label in the first half versus the prior period. Both Burson and Precision businesses continue to work together with other Bapcor companies to make sure we learn from each other and amplify the synergies between us. Our Equipment business, Precision, has benefited from this current cooperation and has had a really strong start to FY '22. We continue to invest in systems to make it easier for our customers and teams in terms of transacting and range through our advanced planning system implementation. Our vision is to be the undisputed #1 trade supply in the market as we continue our network growth and added 4 new stores during the period in Gawler, Kelmscott, Invermay and Forster. And these, along with our other recently opened stores, are performing very strongly. Since the period end, we've opened a new store in Katherine and expect to open 7 more stores in the second half, bringing us to a total of 12 for the year. Importantly, we've also completed a number of upgrades and relocations of 7 stores, Tari, Yarrawonga, Malaga, Richmond, Griffin and Pakenham, and 1 further store in January. This is compared to 2 in the prior period. And this is important for our future because it gives us capacity as we have size, ranging and a greater ability to meet our customers' needs going forward as a business. Importantly, we have continued to focus on our team member's safety and local community support during the half, including through support a mate program to ensure our customers, our team members, supplier partners and the community are supported through the lockdowns. We are also excited and delighted to announce that this year, we are introducing our Burson automotive parts interpreter traineeship program in partnership with AFL Sportsready across 36 of our stores nationwide. This program, for us, is for school leaders and recent school leaders, young Australians, indigenous and nonindigenous Australians and people with a passion for motor sports and an iconic body business that we are, and that is at the heart of our community. Our objective as a team is to grow and develop the next generation of Burson talent, and importantly, Bapcor talent within our business. While COVID has presented many challenges, it has highlighted the strength and resilience of our team members and underlines the culture that drives Bapcor Trade's performance. I am really proud of the team and to lead them through this period and look forward to Trade's future. Thanks, Noel.

Thanks very much, Steve. We'll now move to Retail, and Tim Cockayne will sort of go through the performance of the Retail business.

Thanks, Noel. We should be on Slide 9, and I appreciate the opportunity to talk to you today about Bapcor Retail. Good morning, everyone. I'll tell you, it's quite a strong half for Bapcor Retail when you take into account the lockdowns, the COVID lockdown through New South Wales and Victoria in the first quarter and where we finished up. And it was really good to see, as you see in the numbers there, a really strong bounce back in the second quarter, which is really important and trailing against some fairly strong numbers from last year. So revenue was at $197 million. And it's important to note that, that revenue doesn't include the franchisee retail sales revenue, of course. And whilst withstanding 5.4% in the half, it's predominantly in that first quarter where it fell away. And as we come out of lockdowns, it bounced back strongly. I should point out that revenue is up 36.7% on half 1 FY '20, which shows that we've retained the majority of the gains that we achieved in the initial phase of the pandemic with the government stimulus funds. So really pleased to see that. EBITDA of $34 million, again, point out is up 33.6% on FY '20. So fantastic to see that come through. And unfortunately, we stand a little bit more than we would have liked at 15.7% on FY '21. But there are some fairly easy reasons there, lower first quarter sales; and the second one being those additional employee costs. We really committed to not standing down our team, our full-time and part-time staff through that -- those lockdowns whilst we tried to look after their health and well-being. And that's important, and we expect that, that will help us to retain a lot of our team members for a longer period. So hence, the lower EBITDA. Private label continues to be very strong. We've invested considerably into this area with additional resource, et cetera. And we're growing year-on-year. And to see that grow by 1.2 percentage points is fantastic. So very happy with that, but there's a lot of opportunity left in that area. Same-store sales, as you can see on the slide, across all brands, they reflect the strong results against stimulus-driven comparable sales, so that's important to take, but particularly call out the second quarter, where you can see that we've had very strong results. And it's worth noting the Midas business with 3.1% growth as we start to leverage off the work that's been done there to the offer and also to the branding. So really happy with where that's proceeding. In regard to store locations, as we previously advised, there's been a considerable consolidation program undergone in regard to all of the brands, and that's been meant that we've closed some Autobarns. We've moved some Autobarns to Autopros, some Autopros into Autobarn and we -- Sprint to Autopro, et cetera. We're nearly towards the end of that. At this stage, Autobarn store closures and rebranding is definitely complete. And you'll now see positive growth there in the Autobarn stores. We expect to open 8 stores in the second half in Autobarn. The Sprint stores rebranding to Autopro will be completed in this half, and the majority of them have already moved across, and we've also moved them across to the Autopro range and the Autopro marketing schedule, and we are actually seeing really strong sales growth from those performing Sprint stores, which is fantastic. You will see a negative store number there in Sprint. They are some of the smaller Sprint locations which we debranded, did not believe that they were going to fit the Autopro model moving forward, so hence, the reduction. But we're now successfully opening Autopro company stores. We have 3 that we have opened, and we have another 2 to 3 that we'll open in this half going forward. So we're looking forward to grow through both the Autopro, Autobarn brands in our retail area. In ABS, we've now rebranded a number of ABS stores across to Midas as part of that branding process, which will continue through the next 18 months, and they've been particularly successful. So the number of stores that have moved from ABS to Midas have actually got growth of greater than 40% since being rebranded. So that's really exciting as we look forward to rebranding a further 20 stores over this next period. In regard to e-commerce. As you'd expect, e-commerce has been fairly strong. We've got considerable growth year-on-year for the last number of years. And again, going through the Autobarn business at circa 80% growth, but there is a massive growth opportunity ahead of us. We are a short way down that route, and we've got a lot of growth ahead of us with a lot of plans. And also in this next -- this current half, we will actually release the new Autopro and [ AutoSock ] website platforms as well. So that's going to be exciting as we continue our investment and focus in that digital area. I'd like to call out the CRM, customer relationship management project, which is nearly being completed. And we're starting to see the benefits of the new software. We start to work it into our marketing program. And in this half, we will also launch the new loyalty club. And that's going to be really important for us as we get to gather some greater data opportunities and be able to drill down to our customer buying patterns and utilize that data to really start working towards predictive marketing in the digital space. So some exciting things coming there. And I'd like to call out the 2 pictures that you see on that slide. They have been rebranded. One is they're both franchise stores, Tamworth and Mackay. They were our first 2 franchise stores to move across the new livery, and we released that livery back on August 1, 2020, and the results have been fantastic. I'm pleased to say we now have 18 stores that have been completed, including some of the new ones in the new livery. And where we have completed a refurbishment or a rebrand and at sometimes relocation at the same time, we are actually seeing greater than 30% same-store growth in those stores. So that's exciting as we move forward, and we'll now start to really ramp that up and over this next period and roll out more stores in that livery and expect to see that growth and the expanded range and offer that they can provide. So there's a lot of things there. As I finish, the last thing I'd just like to call out is that we are seeing some cost pressures coming through in regard to freight. But on the whole, we've been able to pass the majority of those costs through. At the same time, it's worth pointing out that we are also able to see some stronger margins at the retail level. And I'll call out the mobile electronics as an example. There's high demand. There's certainly a chip issue out there. We've been able to secure good levels of stock. But what we're seeing in the market is that discounting is very much reduced. And that's been really important to balance out some of those cost pressures that you're seeing at the other end. So looking forward to this half and very confident in what we'll achieve. Thanks, Noel.

Thanks, Tim. I now hand over to Craig Magill, who runs our Specialist Wholesale group.

Thank you, Noel. Good morning, everybody. Very pleased with strong first half results. I'm going to take the numbers as read. I'm not going to focus on the numbers, but a stronger firm for the wholesale business overall. Revenue and EBIT increased, EBITDA increasing over the first half, and that's compounding on very, very solid results in the period -- the previous period prior to [indiscernible] the numbers. Our margin management is quite good. We're managing our cost changes very well, and the majority of costs are being passed through to the benefit of the business. Sales improvement across all Specialist Wholesale business has been driven by both network expansion, including some acquisitions and market share growth. Wholesale faces the common challenges as the other 2 divisions we just talked about and virtually any business in Australia is facing the COVID impact on our teams, the ability to have labor where you need it, when you need it, tough recruitment market, the supply chain delays, obviously, in wholesale, that's a factor. It is affecting us, but we're adapting and managing it, I think, overall, quite well. I'm really pleased with particularly strong results in the electrical and the commercial vehicle businesses. Truckline, which is the heavy-duty business or the heavy truck business, is traveling very well. The elements of that are absolutely flying, which is terrific. Electrical businesses are doing very, very well, which is, again, is fantastic. Light truck market, not quite as strong. That market is a little bit off. That's the little trucks that run around in the cities. And if you've been into a CBD in Melbourne or Sydney, I'm pretty sure you'll see there's a lack of movement going on. So there's a little bit of effect there, but we're coping with that. The store rollout of the truck and electrical business continues. 6 branches were opened in the first half. You've got 3 heavy, 2 light, 1 electrical. These are places like Amble, [ Moriah ], Cairns, Canberra, Hillside, which is in the southeast over to Melbourne and Traralgon and the Gippsland. We just announced the Gibbs Truck and Trailer parts acquisition on the 1st of February. Very excited by that. Great business, great team. It should be a great addition to the business. And we're not slowing down. There's 4 or 5 more sites planned for opening in the second half in the truck business, and there could be some other acquisitions as well that are being worked on in the background. So I think we're particularly well placed to continue that growth story there. In wholesale, we're obviously leveraging the group benefits and really working on making sure our channels are clearly defined, and we're trying to open our -- I don't know, if you like, open the scope of how we think about markets and the way we can attract those. I think there's really significant opportunities in how we can approach some of these businesses in the future. Our own brand programs continue to grow, both new programs. For example, new products coming to market that we haven't done with the home brand before, but also extension of current programs. So if you had a program that had, I don't know, 500 part numbers in it, we might have taken it out to 700 or 800 partners. So actually getting the extension of current programs, which is very, very exciting. Divisions, I think Steve called it a moment ago. The divisions and the business units are working well, in fact, better than I think we ever have, which is terrific. We're getting growth on growth as we work together. So overall, I'm personally very pleased with the first half. I'm quite confident about the second half, and I'm really, really excited about the opportunities of the future. I think we're in a great place.

Thanks, Craig. Now we'll click over to Martin Storey, who is based in Auckland. So hopefully, Martin can hear us. And over to you, Martin, please.

Thanks, Noel. The technology is working. So it's good. Hello to everyone from here in New Zealand. Looking at the New Zealand business, outside of national lockdowns, our revenues have been solid, albeit with some geographical impact. There's dividends in the table through the Q1 and Q2 LPLs, which have also been covered by Noel in the commercial area. It's especially pleasing as Auckland restrictions around international -- sorry, interregional travel lasted for 4.5 months. And so the bounce back was very much pleasing in the second quarter. A highlight in the 6 months has been the continued growth in our major workshop customer chains. Trade business is almost back to F '21 parity. And when we consider that for most of those groups, they have heavy Auckland contact that's been very pleasing. Specialist Wholesale, on the other hand, is up 19% in the same period last year. So really showing good growth in those areas. Currently, a wave of deferred warrant of fitness is also coming into play. And over the next 3 to 6 months, we'll see those come through as the government's deferral of warrant of fitness' start to land. And of course, that's in the sweet spot of our trade businesses in general. And right now, in terms of obviously Omicron, where obviously, it's unknown in New Zealand, we are lagging in Australia, but the effects are not being felt at this stage. Moving to, I suppose, the capture of value. Q1 saw heavy COGS pressure, and that was signaled by multitude of different suppliers. Add to that has been some strong inflationary elements driven predominantly by people, fuel and property costs, especially things like fuel reach the $3 liter mark. Margin management, however, across the board has been highly effective. We've taken price leadership positions in terms of through to market, and we've certainly lived the way there. In terms of the Q1 commencement of operations coordinators, which were new roles we put in, they're actually intrinsically involved in running branches and ensuring that our frontline behaviors are capturing value every day, and we've seen a step change in performance as a result of that. It's been a strong focus on margin delivery also coming through all of our store-based team incentives. So whilst there is a sales element to those, that is more or less a gatekeeper to get into the delivery of margin, and that's certainly something that we're seeing strongly through the business. Thinking about inventory, supply chain challenges still remain, but have become more manageable as the year has unfolded. The repression of some lines remains under pressure. But overall, [indiscernible] health is good, and it's consistently meeting customer demand. That also adds to the opportunity to be able to be strong on price. We've had significant market share gains in our HCB battery business. And that's been through planned increase in inventories that we put in place earlier in the year to protect against what are some very lumpy U.S., European and Asian manufacturing challenges. As those markets have opened up and come back out of lockdowns, we've seen heavy pressure on those suppliers to supply large OEM manufacturers. And we've been able to get in there and make sure we've got the inventory to make that work for us in the field. Looking at locations, it's been a bit of a frustrating year. We've had positive growth in the launch of our Battery Town Marine program. This is a new exclusively supplied agency customer group established around the recreational, commercial and super yacht marine industry. They exclusively supply our product and it's a new group of customers tacked on to what is already a very strong Battery Town program in the commercial and retail segments. In Trade, no new stores were opened in H1, but it's predominantly been around property availability, both existing and also new builds, which have been impacted by material supply and also some continuing issues. We will still, however, complete new trade outlets in the year within the guidance already given. And 1 associated challenge is an extremely skilled labor shortage, but we plan to overcome this through a combination of internal succession, resourcing from existing branches and also securing available new team members ahead of any planned openings where required. Moving through to, I suppose, our people and engagement element. We opened up a program called Blue Army, and it was launched in early Q1. Alongside the Our Way Forward business plan program, which gives our team members a reference point for 3 years' worth of key activities, the plan on the page has been adopted very well across the organization. And actually, through COVID, has been a real galvanizing force as the different quadrants of that being with -- sorry, deal with team member focus, customers, stakeholder value and community initiatives. The core driver of that is obviously footprint, own brand and customer share of wallet growth. And there's been great progress in terms of bringing the teams together under 1 banner with the Gumboot Friday event that is highlighted in the pack. This was something that was driven by an internal team member coming up with an idea, which was then released into the wider business. From there, it went completely viral. And from an original target of providing a full-time counselor for mental health for the I Am Hope Foundation, we were able to provide them with 4. Our team members feel good about being able to provide something back at a time when many of them are experiencing challenges in this area inside the families. Just in summary, like-for-like has been strong in Q2 and continues to be evident. We've got good behaviors and systems around margin delivery. They are embedded, and our team are enjoying winning in the market. Engagement is strong through the Blue Army program, albeit that we've had to obviously not have any face-to-face with people as we haven't been able to travel, but there's been really strong engagement through that. And H2 initiatives are in place and are set to be executed in line with plan. So all in all, we look very positively towards the next 6 months and finishing the year out strongly. Back to you, Noel.

Thanks, Martin. If I may just make a couple of comments on Bapcor Asia, which is on Slide 12. You'll be very familiar that we've got operations both in Thailand and also an investment in Tye Soon. Just touching on Thailand. Obviously, a country that has been really, really impacted by the lockdowns on COVID, but really, pleasingly, to sort of see that as that has eased again, quarter 2 sales now were 85% higher than quarter 1. The business has actually turned a profit in December, which is really, really important. 8 locations now open, including 1 outside of Bangkok in Sirachi going very well. And very, very pleased to sort update the market on the addition of both myself and Steve Drummy to the JV Board in Thailand. Both Steve and I have had considerable experience working with Thai JV partners, M&A, all those type of things and really looking forward to working with the partners in Thailand as we continue to look at expansion of the business. Tye Soon, 25% stake. Tye Soon will report their full year numbers. They have a 31 December year-end towards the end of February. So I can't say too much there. What I will say is the -- delighted with the relationship that we have with the Tye Soon Board and the Tye Soon management team. So really looking forward to continuing that into the future. A couple of other things just to sort of go through quickly. Supply chain on Slide 13. And you will have seen us talk about the consolidation in Melbourne and later on in Queensland. But if you look at Melbourne, this is a game changer in the industry. We have transitioned 3 of our largest warehouses, which are all different business models. One is a Trade business, one is a wholesale business, one is a Retail business into Tullamarine. We've got further businesses to the transition and that will occur during the calendar year 2022. As well as the global supply chain issues that you'll be very familiar with, obviously, COVID Omicron, all those type of things, labor shortages, labor availability had an impact on the operations of the business. When we are relying currently on a lot of casual labor, but we are working our way through with those type of issues. In terms of -- we're looking at -- there has been some teething issues, but let me just put those into context. This is a major, major project. It will deliver significant returns for shareholders. It's a multiyear project that will be, as I said in the opening, a game changer. As we've sort of gone through with the integration of the businesses and we've looked back, we've now sort of sat back and said, okay, what do we need to improve to take it to a further level of self-efficiency? We've already seen -- you can see there step change in productivity has already come through. So the team are doing a really, really good job. Lots and lots of opportunities, lots of challenges that we're having to sort of work our way through like everybody else in terms of labor and all those things. But we are absolutely focused on ensuring that we do get the warehouse to where we want it to be. And to give you just a couple of statistics. If I look at sort of the fill rates, which is really important for obviously the business. Despite all of the challenges that we've got on suppliers, on everything else, we target fill rates of -- in excess across Bapcor of 95%. The business and the warehouse team are currently operating at levels in excess of 90%. Supply rates, we have global supply challenges. We are working with our suppliers to get more availability that we will continue to focus on improving the performance. The targeted OpEx saving of $10 million remain unchanged. And again, I say this is a game changer, and the team has done a fantastic job to where we've got to. Not unsurprisingly, we've got some issues. We're working through those issues, and we're very, very confident that we will continue to sort of overcome those issues as we move forward. Slide 14. I mentioned in my opening the passion of the people in this business, they are the heart and soul of the business. Lots and lots of focus ensuring we do the right thing. We mentioned a couple of times that our primary focus is to make sure of the health and well-being and the safety of our team members. And as we've said a couple of times, deliberately have introduced paid pandemic leave and vaccination incentives. Maggie mentioned the workplace culture review that we're undertaking. What we want to do with the business is build on what really works in this business, the values in this business and make it a really, really, really good place to work. So we'll go through that process and we'll build on what we are good at. And if there's areas that we need to improve, well, we'll deal with those. You see there a number of initiatives that we're doing on people. You'll be very, very familiar with all the industries we cover, the talent, sort of debates and talent war and all those type of things. As we look at what we're trying to do across the organization, is to improve our talent and capability across a number of things. This list is not exhaustive. But just to call out a few things. We've got a top development program already launched, which is aimed at creating career pathways. We've launched the leadership capability framework. What then is developing the best leaders we possibly can for the future of Bapcor. We've done initiatives in Autobarn and Bapcor. One of the really exciting things that we launched and started last week was -- we've had graduates in the organization before, but we've never had a formalized graduate program. Delighted to announce that we've brought on 9 new graduates as part of the Bapcor graduate program who started last week. And they're from all different disciplines that will run through a program over a couple of years, and we're delighted to bring that. Steve mentioned what we're doing in terms of Burson trainee program. And in the second half of the year, we'll be launching the women's leadership development program. And as Maggie mentioned, we've launched a flexible working arrangement policy in December. Why are we doing all of this? We're doing this to improve the business. We're doing this to look after the people who make this business what it is. So I'm really, really excited on what we've been able to do there. I may move into just some commentary on some of the financial detail without going through sort of everything. But if I go to Slide 16, we've spoken about the numbers. So let me just call out a couple of things. And you'll see on the left-hand side, net profit after tax on a statutory basis of just under $58 million and on a pro forma just under $61 million. The only difference, and there's a reconciliation in the appendices, is the pro forma adjustments that we have taken for the Victorian DC and the other types of one-up costs that we've incurred that are in operating earnings. Just to reinforce, we have seen revenue growth of 2%, 28% higher than it was in FY '20. Yes, we've seen EBITDA decline by just under 6%. But again, compared to half 1 FY '20, up 28%. You see in terms of depreciation, we're sitting there at $42 million, probably a little bit lighter than we thought it would be because of some of the initiatives that we're working on with our technology partners who, again, are struggling with people and talent and all those type of things. But we'll continue to invest for the future and upgrade our technology as required. And if you look at finance costs, you'll see an increase there from $7.2 million to just over $9 million. That is purely in relation to the increased stockholdings year-on-year where we've increased up by $38 million. The next slide, Slide 17, just reinforces again the tale of against last year, but also against the year before. So again, you can sort of see what we've been able to bank since FY '20. Moving to cash flow on Slide 18. I talked in my opening about cash conversion being 69% being impacted by the goods in transit. Again, just to reiterate. If we had that goods in and sold it at 0 margin, cash conversion would be in excess of 85%. We have seen an increase in inventory, $38 million. $21 million of that is that stock in transit, and the balance is either new stores or new ranges. Business acquisitions, you can sort of see there as we've sort of -- got some acquisitions that we paid for in the half. And obviously, then with the Gibbs acquisition and the Blacktown acquisition, you'll see that coming through in the second half of the year. Balance sheet on the next page, just a couple of call-outs. Net debt, $203 million. Leverage 1x. We have seen a small increase in debtor days from 36 days to 39. Let me just explain what that is. As we went through quarter 1 and quarter 2 lockdowns, particularly in the Retail business, again, to support our franchisee network, we give them extended credit terms in quarter 2, building up to Christmas. So again, a deliberate thing to do the right thing. And then inventory days, 186 days compared to 172. And again, what we've been doing there is to make sure we have inventory in the system. It's not perishable inventory. It's inventory that will move through. Sometimes we've got to all the more now to get it and the supply chain is a bit lumpier, but we continue to do that as we go forward to position the business for the future. Liquidity on the next page. You'll be very familiar, we refinanced our bank debt in December. You can see now we've got a very smooth maturity profile with the next maturity not until July '24. So we have got a very strong balance sheet to capitalize on any opportunities that come forward. Dividends on the next slide, you can sort of see there what has happened since 2015. The half year dividend has continued to increase. And as Maggie said in her opening, we increased interim dividend from $0.09 to $0.10 per share, which was an 11% increase on the prior year. Touching very briefly on Slide 23. There's 4 elements to the strategy. You've seen this slide before. What I would say there is no change to our overall approach to strategy. We will drive network expansion. That is a core competency of the Bapcor team. There's lots and lots of opportunities in supplemental market-leading brands, realizing benefits and efficiencies of the Bapcor Group and invest in our team members. I think what you will see going forward is more focused on the 3, on the right-hand side of the chart, as well as we'll continue to do network expansion. So we'll look at are there any opportunities for us to accelerate private label, realizing efficiencies and generating a lot of value of our team members. ESG, on the next slide, again, very important, and you'll again see lots of work that we'll do on that as we move forward to make sure that we have a positive impact on the community. We look at the environment. We do things ethically and obviously, governance continues to be a key focus for the organization. In terms now of trading update, before I wrap up and take Q&A. You see on Slide 27, lots of words, but let me sort of highlight a couple of things. What we said at October, which, again, we reiterated in November, December, and we'll reiterate today, our aim this year is to deliver net profit after tax pro forma in line with what we did last year. So you'll recall last year, we did $130 million, which was $70 million in the first half and $60 million in the second half. Yes, this half, we've done $61 million. Our aim is to still deliver $130 million at least on a full year basis. In terms of January trading, Omicron obviously had an impact. Self-isolation for people that are in Melbourne, you see it all the time and, presumably, may also be happening in other parts of the country. Revenue, despite that, was in line with the prior year. If I locked in at the first week of trading in February across our businesses, really pleased to say that our revenue in the first week of February is ahead of plan. So again, very, very pleased to see that. Let me just wrap up then and then we'll throw it open to Q&A. In summary, I would say as you go through the slides you've heard from the EGMs, we are very, very pleased with the performance we've been able to deliver in the first half of the year despite all of the challenges. The business is very well placed for the future. We've got a very strong balance sheet. We've got a very focused team. We've got lots of opportunity ahead of ourselves. And we will continue to focus on what we can manage and add further value for our shareholders and look after our team members. So with that, thank you for taking the time to listen to the presentation. And now operator, we will throw it over to Q&A, if we can.

[Operator Instructions] Our first question comes from the line of Mitch Sonogan from Macquarie.

Noel, can you hear me?

Yes. Loud and clear, Mitch.

Just I guess the first one just on the guidance. Second half sort of implied $69 million NPAT number there. Can you maybe just talk through, I guess, your assumptions that are built into that? Any color you can give on growth and margin expectations, but maybe also just touching on some of the risks that you could see to the downside or upside?

Thanks, Mitch. And so look, if I look at it this way, Mitch, you've seen on the -- one of the charts in the pack, the amount of lockdowns we had in the first quarter, which also flowed a little bit into the second quarter. So the working assumption that we have gone into when we're looking at the second half of the year is that we won't have those lockdowns. Yes, we've had an impact of some Omicron in January. But as I said, revenue was in line with where it was last year, and particularly going to February, we are ahead of plan. In terms then, if you recall what happened in the second half of the last financial year, we did incur a number of costs in the second half of the year in relation to particularly a lot of push on sort of the backhaul branding, all those type of things, lots of initiatives. Those costs, we are assuming, will not be repeated obviously in this half. And so that's the major assumption. In terms of margin management, the way I think I look at it, Mitch, is I don't get too stressed at half year margins because times of promotions and all those type of things. I think what we'll look at for the full year and what we continue to look at for the full year is to make sure that we are focused on, a, delivering product to customers. And if we can maintain our margins on a full year basis, not too dissimilar right to where we exited last year, then I think that would be a really good outcome. So that's sort of the major assumptions that we're looking at. So it's really just to say, get a clean run in the second half with no lockdowns. And what we've demonstrated as we've come out of lockdowns, we rebound. Yes, we had some teething issues in the first half on the integration of our warehouses. And again, some of that is because of labor and those type of things, in terms of securing labor, and we'll work on that in the second half, but that's the major assumption, Mitch.

Yes. And maybe just following on from that, the trade margin was down 16.2% there. I guess just on that commentary, are you sort of expecting a bigger rebound in the second half to get back to the PCP in '21? Or are some of those costs that you talked about in terms of maintaining and supporting your employee base going to sort of keep that a little bit lower than the PCP?

Yes. Look, PCP Mitch was, I think, at 17.7%. We're sitting at the half at 16.2%. I think that, that will obviously improve in the second half as we get sales increases. Whether we get to that 17.7%, I'm not too fussed, but I don't think we'll be too far away in the second half.

Okay. Great. And just a quick one on the freight costs. So $13 million, they're pretty much flat versus the PCP. So I guess just trying to understand if -- where the additional cost is coming in? And is that pretty much flat line now? Is it going to be a bit more of an uptick in the second half?

Yes. Look, I'd like to think that, Mitch, as we are sort of dealing with some of our external issues with transport and trying to get truck drivers and couriers and those type of things, we've incurred some extra freight to sort of make sure we get product out to customers. And we've had a few issues where -- and we probably had these in the past, but we've probably got more visibility of them now. As we've moved into 1 central warehouse, occasionally, we'll get product going to the wrong location, and we'll then pick that up and move it. And so that's the type of stuff that's been happening in the first half. I think that will sort of level up in the second half. So I don't think there's going to be an uptick in that in the second half.

Yes. Great. And just a final one for me. You've given an update there on the Victorian DC consolidation, noting that you've got the 3 biggest warehouses moved in around 80% of volumes. Can you maybe just provide a bit of an update, I guess, on the -- when you expect to get the full run rate of those synergies previously sometime in FY '23, noting that you've obviously called out the duplicate costs of running multiple systems there? But yes, maybe just a bit more color around the timing of those synergies coming through.

Yes. Look, the time and the synergies were always expected to start flowing through in FY '23. And that will obviously sort of stay consistent. What we're doing at the moment, Mitch, just again just some clarity. We just want to fine-tune what we're doing in -- with the 3 big warehouses at the moment in Melbourne. And so we'll do that over sort of a concentrated sort of 12-week period. And then once we've sort of got that all running, then we'll then start bringing in the other warehouses. So we just don't want to sort of confuse things, but you'll see the benefits starting to flow through all in FY '23.

And your next question comes from the line of John Campbell from Jefferies.

Congratulations, Noel, on the new role. Just a couple of questions from me. Firstly, just on the recent acquisitions. I don't know -- I didn't see it, but maybe you did disclose it. What did you spend on that?

John, thank you for your congratulatory comments. We didn't disclose how much we paid. We just say it was -- sort of mid-single digits. In terms of revenue, just to give you the idea, $50 million roughly across the 2 of them, roughly $30 million turnover coming in with Gibbs, and the $28 million of Blacktown, but we did not disclose the actual payments.

Okay. And just in terms of Autobarn like-for-like sales versus Autopro, there was quite a minus 9% versus minus 3%. Does that just really reflect tough comps more than anything else?

Yes. Look, I think it does reflect against tough comps. But I might let Tim just to elaborate if he would like.

Yes. Look, the majority of that is just the weight of the Autobarn stores in those lockdown areas compared to Autopro. Autobarn, obviously, heavily throughout Sydney and Melbourne, whereas the Autopro, Sprinter, Adelaide and regional, and they just -- they had a greater effect, that's basically very simple.

Okay. Just last question. Noel, do you have a -- or have you ever disclosed and do you plan to what share of total sales online represents? Because you're obviously getting good growth, 80%, I think you mentioned in -- maybe that was in retail, but just overall, I guess, in trade and retail, how much online is penetrating that sales component?

Yes. Look, we've given some indications previously, John. And again, if you look at sort of particularly the Retail business, as Tim said, we're at the early stages. So in terms of the revenue, you take that core retail revenue in the half of $197 million. The e-commerce was about $15 million. So there's a big opportunity there. In terms of the conversion side of things, it's not the same sort of comparative in terms of that because lots of the sales will go through from online systems. So the real thing to look for is the e-commerce. And as Tim said, we're at the early stages of that. So $15 million in the half. Previously, we would have done -- wouldn't have done $15 million in the full year.

Okay. So we should start to expect that to grow as a share of sales going forward?

Yes, absolutely. And so the things that we're doing, and Tim mentioned, on things like CRMs and loyalty programs and all of those type of things, it's a big opportunity and a big area of focus.

Yes. Is anyone sort of more advanced would you say in the industry than you guys? I mean how do you sort of sit relative to the Supercheap, et cetera?

Yes. Look, so this is Tim. Yes, Supercheap is obviously more advanced in that area. There's no doubt. And they've expanded their range. But obviously, we're catching up fairly quickly. If you look at their numbers, I suppose the most interesting part about that is the comparison of what's click and collect versus what is click and deliver. And what we're seeing is we're seeing a huge push towards click and collect. And whilst everyone reports to the overall e-commerce sales, a lot of that is reserving the product and ensuring that your trip to the store is confirmed purchase when you get there. And what we're starting to do now is, and we really have an edge, we've just transferred all of our delivery out to individual store locations that will reduce time and also costs for our consumers, and we expect to see a lot of growth in that click and deliver part now as well.

And your next question comes from the line of Andrew Donlan from UBS.

Just a quick one to start on the guidance. So the guidance is unchanged. Are you still guiding to depreciation ramping up to sort of $95 million to $100 million, I think, it was in the past? If I understand the second half D&A.

Andrew, look, we have previously guided to that $95 million to $100 million with sort of a AASB stuff and other -- lots of technology projects that we were sort of looking to have sort of commissioned and up and ready. Given where we are at $42 million at half year, my best guess is it won't be that $95 million though. It's probably going to be high 80s, I suspect.

Okay. That's good. And then maybe just on the trade. Just interested in the like-for-like performance. First quarter, I think it was 0.5%, and then it went to 1.5% as you came out of lockdown. Can you just talk about sort of that progress as you come out of lockdown, maybe even January, if you can give it? I just want to understand the momentum in the Trade business.

Yes. Look, you see the momentum improving as you come out of lockdown. And then once we got into January, January was obviously impacted a little bit by Omicron because we've got people in isolation, not just in our business, but say, workshops. And so if you look at sort of like-for-like in January, it's not too far where it was last year.

And then maybe just a final one for me. The DC consolidation, I mean, you do talk about a couple of challenges there. What's the best way to think of it? Is it around the ability to service customers and maybe some sales there? Or is it really around sort of cost to deliver it? I'm just keen to understand that and maybe if it's more pronounced in any certain business.

No, look, I think the way I'd look at it, Andrew, is there's lots of sort of issues in terms of, say, global supply chains, in terms of getting stock into the country and all those type of things. What we've seen in the first half is the team has been able to obviously deal with those types of issues as best they can. But let me give you a practical example. We have a lot of contract labor. And then when COVID sort of -- and Omicron sort of comes through, and we're taking obviously care of our people, our level of absenteeism then really increased. And so then you're bringing in new people from labor hire companies who you have to retrain. And so you don't get the productivity that you normally would get and they're not familiar with the product. So it's those types of things. Yes, we had a few things where supply sort of issues were challenging, but some of that is because of the external sort of global challenges that everyone else is facing.

And the next question comes from the line of Sam Teeger from Citi.

Noel, congratulations on your appointment.

Sam, thank you.

The presentation, and you talked a bit about this already, but can just flesh it out in a bit more detail. Just the presentation suggests the strategy remains fairly similar to the one that Darryl was pursuing around private label rollout in international. So I was hoping you can elaborate a bit more on the key changes we should expect with you running the show now.

Thank you, Sam. Let me answer this way. You've seen the slides that we put in there. And obviously, I've worked closely with the business since I've been here. In terms of where I think the nuances, so the overall approach to strategy won't change. The business is really, really good at growing networks. Yes, we've got to grow more in Asia, and we'll put more focus into that. But COVID has been sort of the backdrop over the last sort of 18 months. Where I think the nuances, Sam, is on the other areas. But I think there is lots and lots of opportunity for us then to potentially accelerate what we do on private label, how we accelerate what we do on efficiencies across the organization and really unleash the power of the people. So that's probably the nuance I'd sort of throw to that strategy slide.

Right. And when you say unleash the power of the people, do you want to elaborate on that?

Look, again, you look and say, well, where is a lot of value created in lots of organizations? It's out in the field. And it's basically sort of enabling the people to do their job more effectively, do it quickly, give them the tools to do their jobs, do all of those type of things to make it easier. And so that's what I'm saying. And if you look at the talent that -- program that we're putting in place, we've got 5,000 people in the organization. I'm an enormous believer in giving people the opportunity to realize their potential. And that's up and down the organization. So you'll see some of that. So that's what I'm sort of meaning by unleash the potential.

All right. And then in terms of the DC transition, I guess, what have you learned from Melbourne to ensure that Brisbane runs smoothly? And maybe just updates around timing for Brisbane?

Yes. Look, I think if I step back from it and having been involved in lots of major transitions in lots of organizations, what has been achieved in Melbourne in terms of taking through the single largest business that we do in terms of complexity in different business models and putting them into the DCV, I think the guys in the DCV has done an outstanding job on getting that turn up and running. Yes, there's always teething lessons and that type of things. As a team we look back and say, what lessons could we sort of learn to make sure that when we hit the ground running in Brisbane, you don't repeat that any sort of thing that you have to then redo. So all of that is part of the exercise. The team, led by Jeff and his team, have documented every single thing that we've sort of learned. In terms of Queensland, again, it's risk mitigation, its priorities. The site is in the process of being constructive. That will take some time. But we'll make sure that we've got Melbourne up and running, humming, game changing and then we'll sort of obviously move into Brisbane.

Right. And just 2 quick financial questions. I noticed there's some sale of assets to Australia Pacific Airport. Is there any profit from that sale in the account?

No. All of that essentially is in relation to the way the deal was structured with the Melbourne DC. So you sort of pay certain rents and yes, then there was a -- it wasn't a lease incentive, but there was a structure that where we got some -- the $14 million back, but no profit on it. It was purely cash flow.

All right. And just the 2 acquisitions you made. What do you expect them to contribute in EBIT over the second half?

Yes. Look, most of them, if you take a $50 million revenue number and you work that backwards from a low EBITDA multiple, it won't be an enormous amount in the second half. So it's not going to move the dial massively. But I think longer term, they're really, really pleased to be part of the portfolio.

And your next question comes from the line of Elijah Mayr from CLSA.

Congrats on the appointment, Noel. Just a couple from me. Just firstly, in terms of the trading update, with January sales in line with last year, are you able to break that down at the segmental level and give us a bit more color around performance at that level?

Yes. Look, I think off the top of my head, Elijah, the -- each business was basically in line with where they were last year. So there was no material sort of differences across each of the businesses.

Yes. And then just if we're looking at inventory levels, granted we've sort of discussed that in the presentation, but how are you looking that for this second half? Are you looking to sort of maintain, unwind or elevate the sort of inventory levels going into the second half?

Look, you've obviously seen the dollar amount that we've got invested in inventory, which is the highest ever that Bapcor's ever had. We would have said last year that we were looking to unwind the temporary increase that we added last financial year, which was circa $45 million. We deliberately have moved away from doing that. So I would not see a big unwind in the second half. But equally so, I would not see a big increase in the second half. I think we'll maintain that type of level. And then gradually, as we've been confident that we've got global supply chain issues start freeing up and all those type of things, we'll then look at what we then do, but I think the safe assumption is to at least maintain the dollar amount that we've got today. Hello?

Sorry. I was on mute. Just one last one for me. Just with regards to the acquisitions, you mentioned the 2 that you made at the start of this year won't contribute too much at the earnings level. And it sounds like there's still a few more in the works. Were these included in the FY '22 sort of guidance? Or should we expect this to sort of contribute more positively, I guess, to that guidance of FY '22 in line with F '21?

Yes. Look, again, if you go back to the guidance that we've always looked at, even from the AGM, we keep focused on at least delivering the number last year. The contribution from these acquisitions won't move the dial either way and from now until 30 June.

And your next question comes from the line of Tom Godfrey from MST.

Can you hear me okay?

Yes. Loud and clear, Tom.

Sort of scrapping the barrel at the end here. But if I can just sort of go back to the trading update for risk of flogging a dead horse, just if you could sort of characterize the momentum you saw through January, I suppose. Did you start to see it build as mobility normalize and restrictions easing and sort of even if you could tell us what you're seeing across the broader business? In early February, does it sort of give you confidence across the rest of the half? And what are you sort of hearing on the ground in terms of your key customer groups and workshops?

Yes. Look, let me answer it sort of this way. If I look at sort of January, you take Omicron as an example. So a couple of things happened in January. And again, so workshops had a really big year last year, and so then they end up taking a bit of Christmas holiday and probably an extended break with the Australia Day weekend and all those types of things. Then you get Omicron overlays. And so we might have, let's say, we've got a Burson store with 3 people and a son or daughter or a family member gets exposed to Omicron, so then we're in self-isolation. So we had a few stores. We probably -- I think we had 10 stores at the maximum that we have to then sort of close a few days. You also had the same impact on workshops because you might have a mechanic with 2 or 3 people in there. Somebody has got Omicron so they don't open. So we saw that happen in January. Again, let me just be very clear. I look at February across every business. If I look at how that business is performing, the Trade business, the Retail business, the New Zealand business, each of those businesses in the first week of February is performing ahead of plan. So I'm not saying ahead of last year. I'm deliberately saying, okay, our plans, we obviously plan to do lots of things, we are ahead of plan. So you can see that momentum coming through. In terms of workshops, I might get Steve to sort of add some color from where he's been on workshops.

Yes. Exactly your comments, Noel. Omicron, obviously, in January impacted the workshops. Our feedback from the teams and the workshoppers, they did take an extended leave. But as Noel said, it's come back very strong, and we've got some clean air in February from a trade perspective. The workshops are busy. And there -- we've started off pretty well in February to plan.

Got it. That's helpful. And then just one quick one on file. And I suppose in the context of improving conditions over there, what should we expect, I suppose, medium term around the store rollout?

Yes. Look, we're obviously -- we look at the plan and we had the 1 store that was sort of rolled out. The big challenge to roll stores out, particularly in any region, but particularly Thailand in this business, is to secure the people to roll the stores out. So there's no real point in saying, okay, we're just going to go roll stores out if we haven't got the right people in the stores. And so that's the focus. So look, I don't think -- Steve and I will sort of spend some time with the JV partners in the next quarter as to what the plan will be. We're still very sort of positive about Thailand, and we'll continue to do that. But we won't just rush stores out just to say we've rolled stores out. So we'll assess that in the next quarter. We've probably got time for one last question because we do have a number of one-on-one meetings to get into.

And our last question comes from the line of Anna Guan from Goldman Sachs.

Just a couple of follow-ups. Apologies if some of them have been asked before. I missed the first bit of the Q&A. Just on the Omicron-related one-off costs around labor, DC, sort of challenges you guys called out earlier, are you able to quantify that, please?

Anna, look, let me quantify the one that's sort of the easiest to quantify if I can. So if I look at the deliberate strategy that we have on paid pandemic leave and those types of things, incentives, in terms of the number of people that availed themselves of that, that probably cost us in the half, from a financial perspective, about $1 million. In terms of lockdowns and those types of things, it's harder to quantify. But the one that is probably a proxy for us is if you look at what happened in New Zealand with Martin's business, when New Zealand were in lockdown, they are in pure lockdown. No trading basically. And again, if you look at what happened up until sort of, I think August 17 before Auckland went into the level 4 lockdown, we were trading very well. When we're in lockdown, in terms of how much did that cost us in potential lost sort of earnings, it was probably in the tune of $3 million, something like that.

Yes. Okay. That makes sense. And then, Tim, earlier, you talked a little [indiscernible] Sprint and also the core Autobarn business. With the newly rebranded, perhaps, stores, can you give us some color in terms of the uplift you're seeing in sales and profitability and how we should be thinking about it for the broader network, please?

Yes. Sure can, Anna. So as I mentioned, just with the Autobarn as we've moved to the new livery, we now have 18 stores, and there's approximately 8 of those 18 that are refurbishments, which may or may not include a relocation. And within those stores, we're seeing growth of greater than 80% -- sort of greater than 30%. I was kind of thinking of the e-commerce -- greater than 30%, and which has been really pleasing. So that's in those. What we're seeing with the Sprint stores, obviously, coming off small locations, but it's interesting moving the Sprint across into the Autopro network. And what we saw there, as soon as they increased the range and the promotion, the traffic increased substantially straightaway. And that was the feedback from our franchisees there. So it's only seeing close to a 10% to 15% increase in those stores as well. And hence, why the Autopro was strong across the whole year. And then as I said before, in regard to the Midas where we're rebranding from ABS, it's greater than 40%.

Got you. Okay. Just one final one for me. I'm conscious of time, Noel. Can we just hear from you in terms of your key priorities over the next 12 months? What are you planning on focusing on? Obviously, there's a bit on the strategy slide, as mentioned earlier, what are your key priorities, please?

Yes. Thanks, Anna. Look, key focus for me is to continue, obviously, to perform as we have done for many years. But if there's 3 areas that I'll focus on is: one, obviously, the strategy that we're talking on; two would be the efficiency opportunity in the organization; and three would be the cultural side of the business. Thanks, Anna. So let me call it quits there because we do have a bunch of one-on-ones. Again, let me thank people for being on the call, and thanks to the EGMs for presenting today. And we look forward to ongoing discussions as we go through a bunch of investor meetings. But thank you for taking the time to listen to us this morning. Have a good day. Thank you.

Thanks, everyone. Appreciate it.

Thank you so much. And that does conclude our conference for today. Thank you for participating. You may all now disconnect.