Big River Industries Limited (BRI) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Big River Industries Limited Fiscal Year 2022 Full Year Results. [Operator Instructions] I would now like to hand the conference over to Mr. Jim Bindon, CEO. Please go ahead, sir.

Okay. Thank you, and good morning, everyone. I'm pleased to have John O'Connor joining us here today. You're going to mostly hear from me today given John only just started on Monday. He's our new CFO and Company Secretary. So I won't go through John's background. We put some details up on the ASX site in weeks gone past. But certainly great to have John join us here, and he's certainly available for any questions when we get to the end. But in the main, you'll be hearing from myself today. So thanks for joining guys. We'll try and skip through pretty quickly, as we do. It's always a very busy reporting day. So I'll try and focus on the main points. So just -- I'm working through the investor presentation that was uploaded this morning. So I'm just going to skip, guys, to Page 4. There's a bit of background on the business, particularly on Page 3. So I'll just let you read through that at your leisure. That's not greatly different from some of the summary or the business overview we've presented in times gone past. But just perhaps the focus there is on the geography. Again, there's not a lot of change here. It's just worth noting some subtle differences. First thing is the strategy that we put in place during the year where we created 2 divisions: the Construction Products division and the Panels division. And then within Construction Products, there's 2 core groups there: one being the trade centers -- Building Trade Centers, heavily exposed to detached housing and the renovation market; and our Formwork & Commercial sites. You'll see there larger sites more akin to a DC, trading, particularly in the formwork, large commercial and civil markets. So that just gives you a little bit of a spread about where our dots are. The message is pretty consistent, which is what I've said for some time: huge growth potential in all 3 segments given that you can see that's a pretty vast coverage on the map of Australia and New Zealand, a very, very large addressable market in the broad construction industry. So just scooting on to the ESG side. So I realize I've split this over 3 slides just to try and make it a bit less cluttered. Perhaps my starting point is, obviously, the great message with respect to ESG in our organization is that timber is being well recognized now about its great carbon sequestration quality. So we've presented some graphs on that in years gone past. It's the absolute A-grade story with respect to timber being the most sustainable building product. That's obviously being well recognized now when you start hearing stories like the Atlassian tower that's just about to start in Sydney, which will be the largest hybrid timber tower in the world, and those credentials are well recognized now. But perhaps just on Page 5. One thing that I've tried to focus on in this year's presentation is Scope 1 and 2 emissions from our large plywood manufacturing plants. So clearly, the closure of our site at Wagga, which we've spoken about in times gone past, and the consolidation and investments we're doing at Grafton creates a really good story with respect to carbon because -- so at Wagga, we used gas to generate our heat. So large uses of gas and electricity, of course. Whereas the consolidation onto the Grafton site where we use all of our wood residues and manufacturing waste to generate heat and fuel the boiler is obviously a really good story in terms of market reduction in our requirements on fossil fuels, in this case, particularly gas and indeed, electricity. So you'll see there this year just gone, a large reduction in both our Scope 1 and Scope 2 emissions now that we're consolidated onto the Grafton site with respect to the manufacturing side of our business. Just quickly on the social side, guys. I have touched on this in the past. Really proud of the program that we do with the indigenous inmates in the correctional center at Grafton. The Toys Saves Lives program is a really great one, and we're particularly proud to be a partner of that 1,000 toys. [ I'd call them out myself ], but 1,000 have been produced now to help out underprivileged communities there within the indigenous network. So pleased about that. And certainly, substantial work we do with the Men's Shed organization in multiple sites as well as our 40-year support of the Westpac rescue helicopter through payroll deductions, which has been a long time focus of the business. So I think, yes, some great things we're doing at a social level as well. Just finally on the ESG side, the governance side. Obviously, modern slavery has been in the press a little bit lately, a really important part of our business when we're dealing with international suppliers. So 75% of all of our suppliers were audited during the year, and certainly, full compliance was achieved in all those cases. Look, in an industry where it's male-dominated, we've got a lot of blue-collar workers. We've got manual labor roles in 6 of our key manufacturing plants. It's pleasing to see the ratio of women in our workforce gradually edging up, 4 percentage points over the last 2 years. Certainly lower than some industry still, but that's a good step. That 4 percentage points represents a 20% increase. So obviously, we think that's important for us to become a more rounded and modern organization. So good steps in that front there, guys. And then just on the board level, a couple of new NEDs were brought in during the year to ensure that independence was maintained. So I think for a small business like ours, I think you'd now have some comfort that we're extremely well governed, particularly from a Board perspective. Okay. So just quickly into the meat of the call, guys, on Page 8. Certainly, it's pleasing to be talking to you today after a really good year. There's no doubt. I've been in the organization 22 years, and this is certainly the strongest overall and probably the most rounded result I've ever seen in my time here. So growth of 45% up to around $410 million of revenue now. Pleasingly, 20% of that growth was organic store-on-store like-for-like growth, depending on what language you prefer. Our view is that's well ahead of the growth in the addressable market. So obviously, that translates to some solid market share gains in our view. The underlying EBITDA of the business at $48 million was up over 100% on last year. So that's obviously pleasing that, that growth on the top line is transferred to the bottom line. From a net PAT perspective, just excluding significant items, that's the first measure which were quite minor this year, about $22.7 million. That was also up 190% from a statutory level. For those who were on the call last year, we did write down the assets at Wagga, obviously, with the closure that occurred during FY '22, during last financial year. So that, obviously, meant the statutory net PAT was quite low last year. So yes, more than a tenfold increase there. So I think the high-level metrics from a financial perspective were certainly very strong. Working capital management, always really critical and certainly very topical at the moment particularly with respect to inventories. I think a lot of organizations have been under pressure with large increases in their inventory. For us to maintain our [ trade ] working capital to sales ratio at 18.1%, 17.9% last year, so perhaps we can call that unchanged. But I think that's a really good result during a period where there's been considerable pressure around inventories. Return on funds employed, I think a good measure to make sure that, obviously, the funds we've got in the business are generating good return, 26.6% just using EBIT over net debt plus equity. I think that's a solid result for our business, well ahead of our own internal strategic targets. From a dividend perspective, obviously, the shareholders deserve and should be rewarded in a year like this when the business has done well. So overall dividends for the year, interim and final, of $0.155 a share, that represents 176% increase on last year's $0.056. So that really strong cash conversion, which we'll touch on in the financial slides of 88% during the year, well, I think is pretty tough. I think a lot of organizations have found cash conversion challenging this year. I think that's a really pleasing result and actually is in front of last year's result, which came in about 82%. So that represents a 60% payout ratio, by the way, which is right in the middle of the Board's range, between 50% and 70% of net profit after tax. And then just from a balance sheet point of view, I can put some more color on this as we get through the call, but our net debt position of $21 million, unchanged on last year, even though we acquired 2 good businesses that have contributed well and obviously invested in capital, too, to maintain our net debt. Obviously, that resulted in our gearing falling to 15.9% versus over 18% last year. So that gives us good headroom for growth in the business. I just might move on to Slide 9, guys, just a little bit of color on the operating results. Just so focusing, first, on the second half versus the first half. We've spoken now and in some of the other press release that we've done over the time, we've highlighted now that we had 8 quarters of accelerating growth. So not just growth, but 8 where the growth has accelerated. That certainly occurred again in the second half. Our first half growth, which you might recall from our first half results, was up 14% like-for-like growth, but over 23% in the second half. Obviously, that combined will give us a 20% organic growth for the full year. We grew our business in every category and in every geography. So some of the organic growth figures by state: so 59% like-for-like growth in South Australia, a really great result from the teams there; Western Australia, up 26%; Queensland, up 21%; New Zealand, up 20%; Victoria, up 15%; New South Wales and the ACT, up 7%. So it's probably been the quieter of the markets for the last 2 years. But the flip side to that is we see major growth potential that's just starting to come through now as the commercial multi-res markets, in particular in Sydney, start to recover. So certainly, growth's shown, but weaker than some of the other states. And across our 3 categories we've talked about there: Building Trade Centers, up 27%; the Formwork & Commercial side of the business, up 14%; and Panels, up 15%. So really consistent strong growth right through the business from a segment and a geography point of view. Gross margin, I think, was a good news story again, up 190 points to 26.9%. Again, that's been a long-term improvement the business has made since we listed in 2017. Certainly, my view is we're well below par in prior years, and I think we're starting to get up to where we need to be. So we certainly don't see that as a one-off or a spike. We think that's absolutely sustainable, and we've made good incremental improvements over some time. Now the product mix is changing. So obviously, a suite -- a mix of products weights up the gross margin, and our purchasing power is certainly improving as we get larger. And our own internal disciplines as we've rolled out a new ERP system has certainly helped with pricing controls. A couple of other operating highlights. 2 acquisitions during the year, which we made announcements on, contributed really strongly. Revenue of around $27 million and over $4 million in EBITDA from those 2 particular acquisitions. A new one, which was settled post the reporting date, FA Mitchell panels business in Sydney. Been around a long time, 80 years. So a really long legacy in that business, and that gives us a really good platform to grow our New South Wales business where we've been very -- we've got a very, very small presence in panels. So a small business, sure, and not kind of material from a financial point of view. But from a strategic point of view, a really good base for us to target the biggest city in Australia in that panels market where we've got a very good story to tell. Just with respect to receivables, been spoken about a lot in the press, obviously, some of the challenges of builders in the construction sector. We had a particularly strong year there. Both our debtor days and our aged debt ratios fell during the year, and the business is at the best level in the 22 years I've been here. So I think our disciplines are strong. We've got a credit insurance as well, which we've mentioned before. So it's a nice safety net to help you sleep at night. But certainly, we didn't specifically require that this year, and [ fuel ] results were particularly strong. So I think our team did very well on managing that particular area of risk. And on the supply chain side, I've touched on that. I think our inventory growth was contained well in an environment where we are obviously strategically sourcing product when there was major shortages out there made sense, and I think we've managed that balance quite well. So just moving on to Page 10, ladies and gentlemen. So this is just a new slide just quickly to split the 2 divisions. I guess from an audit point of view, there are 2 segments; the Construction Products and the Panels division. So a little bit more color on both revenue and EBITDA. Perhaps you'll see on the next slide that simplifies our P&L, I guess, given we've given you the color here. So I guess the big message is, is that strategy change to create those 2 divisions. We think we're getting excellent management focus and certainly a much better potential to extract all the synergies we should particularly out of acquisition. So the revenue split for FY '22, $117 million from the Panels division and $292 million from the Construction Products. You can see there good, strong EBITDA contribution from both divisions: $21 million out of Panels and $32 million also in the Construction Products division. So the EBITDA margin, obviously, higher in Panels. So it's the nature of the product. There's a lot of specialty, high-end, niche, differentiated products, whatever terms you'd like to use there. Whereas the Construction Products that typically have multi-building products, more commoditized. So the EBITDA margin, a touch lower in the Construction division. But when you look at it from a return on assets perspective, the 2 divisions are almost identical at about 25% return on gross assets employed in each division. So I think they both add substantial value to the business. And balancing those larger, high-volume commodity products with the specialty products within the Panels segment, I think, is a really good part of the business mix now. Yes, I won't focus on the rest of the table there. It just gives you a little bit of color of the breakup there, which we've been asked about, certainly, in years gone past. And then just a couple of points. Obviously, it's not an exhaustive list. But just a few initiatives in each section. The Panels side, some really good alignment on the supplier side. I guess that was one of the main aims of bringing our 8 Panels division under the 1 management team. So some really good consolidated product development where there was a couple of different streams of product development happening separately. They're making sure we're well aligned across Australia and New Zealand, their product alignment I talked about with respect to supply partnerships. Good strong acquisition contribution from the new business within the Panels team. We've touched about the little acquisition at Lidcombe, which is going to give us a great opportunity to expand in the Sydney, and the new eco Panels range that was launched in New Zealand and will be launched in Australia next year, and that's using a fully organic resin, which, obviously, is particularly pleasing. And certainly, a lot of the architects are chasing products like that. Just on the construction side, again, purchasing side as we get larger and as we've got more SKUs across more sites. We've got some great outcomes from our -- from focusing a procurement analyst assessing all the fine print of our business. So some good synergies being extracted there. The acquisition of the business in Wollongong, United Building Products has been an excellent business, and that certainly adds to the expansion of our trade centers, which has gone very well. Strong market share growth, certainly into what everyone knows has been a strong detached housing market, but our view strongly is that we've grown above par there. So that's been a pleasing outcome within the construction division and a good, strong new partnership with CSR on several products that they've got a particular application in medium density, which has been a segment that Big River has historically been strong into. And yes, nice to partner with a major player like CSR to continue to expand our range and our capabilities in that segment. Just moving on, ladies and gentlemen. Just quickly on Page 11. Now the financial results or the P&L in layman's terms. Again, you might just see we've just removed a couple of line items there, given that we've got the color on the divisional side now. But I won't go through that hole, just to grab a couple of points on the gross margin expansion, I spoke about, has certainly been a good story. The strong revenue growth, which I've touched on paying from both acquisitions and organically. So of that 45%, 20% was organic, and 25 percentage points came from the acquisition. So I think a good mix of internally and externally generated growth. Yes, the gross margin improvement I've talked about corporate overheads, which has been pulled out in the past, which is -- it's not there in the P&L, but I'll put it over to side. Certainly grew during the year, $4.2 million to $5.3 million. A lot of those are variable in nature, particularly safe provision for bonuses in, obviously, a better performing year. And I think all those things you put that together and that drove really strong operating leverage where, obviously, we had a blend of volume. And so scale improvements, gross margin and costs well contained. I just got -- I think that's probably best shown on the next slide, which is the waterfall. Just pulling out the significant table, which we put in there, I guess, in detail last year is the share-based remuneration below the line and the acquisition costs as they've always been in the case of the Wagga impairment, which was all taken into account in the FY '21 financial year. Now that, that project is finished, there's an unconditional contract on the land and buildings, which will settle in the next couple of months. The net result of all the provisions that were put in place last year was just a small gain of $0.5 million or $500,000, and that was in the provision for restoration, stock write-downs and indeed the value of the land and buildings. So a really good clean exit. The team managed a substantial process of winding down a site that had 100 staff. They've done that particularly well. And there's certainly been no variation or any concerns as part of that exit. So just maybe moving on to the waterfall that just puts a little more color on Page 12. So obviously, starting with our underlying EBITDA from last year of $22 million. $14 million of the EBITDA growth came from revenue growth. So that's -- obviously, we're getting operating leverage where we're going up to the curve and the construction cycle is improving. Given the construction cycle as a whole, troughed out in FY '20, I think a lot of people thought that there's been boom times in construction right through. That's actually not the case. And cumulatively, when you look at all 6 construction segments, the trough was actually FY 2020. So we've had a couple of years going up the curve, and that's clearly flowing through in terms of that revenue growth contribution. Gross margin improvement, I touched on, obviously adds to the bottom line, in this case, about $6 million additional EBITDA. The acquisition contribution. So just to clarify that, that's the 2 new businesses in Revolution and United, plus 9 additional months from Timberwood, which in the previous period only contributed 3 months, where obviously, in FY '22, they contributed the full 12 months. So with strong contribution from our new businesses as well. Costs, I touched on, up about 14% like-for-like, which translates to $6 million. Just worth saying 50% of those cost increases are variable in nature. So the things obviously linked to revenue and linked to the strong market. The other 50% are more fixed in nature. So I think, say, 7% cost increase as we've expanded our business and we continue to invest in new resources as we grow, I think we've contained that issue. Obviously, I know it's a measure closely watched these days in terms of the inflationary impact on the fixed cost base. We're very conscious of that. And I think we've managed that particularly well, albeit in a rising environment. Obviously, that translates to the $48 million of underlying EBITDA that we touched on in the P&L. So look, a really pleasing result. As I touched on at the beginning, a really rounded result where there was a strong contribution. We still have some underperforming divisions, no doubt about that. 3 or 4 of our sites were well below par in my view. So there's lots of self-help measures and business improvement that we can achieve internally regardless of the cycle and regardless of the market. So I guess what I'm saying here is we certainly haven't capped out far from it. Just on the balance sheet. Again, I won't go through it line by line, but I think it's in pretty strong shape. Now you'll see there it to grow receivables by only 17%, where our headline revenue grew 45%. Obviously, those receivables include the new acquisitions. I think that shows the strong way we've managed that ledger. Our inventory has been contained to 23% growth on a like-for-like basis. Obviously, revenue grew 20% like-for-like. Clearly, the value of inventory is a lot high now because of price increases. And then obviously, the initial investments in volume. Certainly, that, I think, that was one of the key themes of the year. The smaller players in our industry, in my view, clearly struggled to get supply. Various larger players like ourselves with really strong partnerships, and we've certainly got great partnerships with our major suppliers allowed us to secure that volume, and I'm sure that was a key driver in the market share growth that we achieved. But, yes, comfortable with the extra investment in inventory that certainly didn't [indiscernible] or stay in the balance sheet in any way, shape or form. Obviously, intangibles change is purely the acquisitions during the year. I won't go through the details of that. That's all specified in the statutory accounts. The fixed assets, $6 million is higher than our typical CapEx. That's obviously as part of the consolidation project. As we put all of our manufacturing capacity into the Grafton site with the exit of Wagga, so there's about $2 million to spend still at the Grafton site during FY '23, and that project will be complete. And then, obviously, $1 million of the new fixed assets came with the acquisitions as we acquired fixed assets as part of those deals. Our payables look higher, obviously, but the 2 record months the company achieved was in May and June. So obviously, that translates when you have record revenue to, obviously, record purchases, too. So that's -- obviously, that was still sitting on the ledger or on the balance sheet at the end of June, so obviously pushed up that payables number. There's no change in our average creditor days there. And just the assets held for sale, the land and building at Wagga, as I've touched on, there's an unconditional contract on, and the final $1 million from the government with respect to the consolidation project funding we achieved is -- will come in FY '23 as well. Otherwise, I hope you'll agree it's certainly a clean balance sheet, which puts us in really good shape. Just on Page 14, just a new slide we haven't had in prior years, just sort of summarizing some of the issues on the capital management side. Total -- our total bank facility as it stands now there with the NAV is about $68 million. Obviously, we have a long strong partnership with NAV. We've been with them for over 50 years of the company. They know our business very well. So we are certainly pleased about our relationship with the bank there. Obviously, that's $10 million higher than last year. So we did get an additional acquisition tranche during the year that is undrawn at this stage. With respect to our term debt, which you can see totals $46 million, we've split that -- we split the timing of that or all the expiry date for one of a better terms. So $30 million of the $46 million run through to FY '25, the other $16 million in FY '27. So I think that's good risk management as well. So from a working capital performance, I touched on that 18% working capital sales ratio. That's obviously helped with respect to our overall balance sheet performance, and gearing dropping to the 15.9% versus 18.7% last year. Dividends we touched on -- obviously, record dividends, fully franked. The business still got $20 million franking credit. So it's important we distribute those to shareholders. That's exactly what we're doing. Yes, so I think just -- and then just a final few key dates for the dividend down the bottom right, I won't go through those, but that's for everyone the information for the final $0.10 dividend that's payable in October. Just moving on to the cash flow slide, guys. That's [indiscernible] as I touched on the operating cash flow before interest and tax or cash conversion, particularly strong at 88%. That was 82% last year. Just calling out the funding we got during the year from the government as a separate line item rather than leaving it [ bloated ] up in receivables. $4 million last year, $5 million received this year, as I touched on earlier, $1 million still to come. Yes, so, obviously, that generated strong operating cash flow of $40-odd million or $37 million after tax and interest versus $14 million a year before. So really strong cash generation from the year. And as I touched on earlier, despite several -- sorry, several debt-funded acquisitions, net debt was largely in line with last year. So I think that puts our balance sheet in strong shape. The only other points over the right-hand side and the notes here I might touch on. I mentioned on the CapEx there, $6 million, a little bit unusually high, 65% of that was related to the big consolidation project. And then otherwise, just stay-in-business CapEx in the other parts of the business. And then on the contingent consideration from a cash perspective, was year 2 of the earnout deal in New Zealand, obviously pleasing that hit all their targets. The Pine Design or the Dry Creek business we have in Adelaide, again, year 2, the targets were achieved as were year 2 of the Townsville business. So as I've always said on probably the second half year's guide when we're paying earnouts because it means the business is going well. The vendors are usually reasonably pleased about it as well. And then just from a dividend point of view, fairly from a cash perspective, obviously, that's what's been paid during the 12 months, whereas, obviously, I've touched on the $0.155 that's actually declared for the year. So I'll just move on from cash flow there. And just with respect to the outlook, guys, there's a few uncertainties. Clearly, the Board are juggling a whole range of economic issues, as all businesses are, to be honest. But we see that the addressable market across all 5 or 6 construction sites, which we have an exposure to, which are made on Page 3, what our various ratios are into each construction segment. When you put that in the pot and then we look at the forecasts for each of those key segments, we still see that our addressable market will grow quite modestly, low single-digit percentages for FY '23. Clearly, that's -- the ratio will change, which I think the strong improvement on the multi-res and commercial markets, which aren't -- sorry, which have actually already started. So yes, the pipeline looks solid, but that change is already starting. I think a moderation is expected in detached housing and the alterations market. The pipeline is very full, so we don't expect that to happen anytime soon. But the lag in our assessment in terms of construction starts versus approvals in the residential space over the last 2 years is a cumulative 30,000 start lag. So that starts lagging approval. So we think that's the catch-up that's still going to happen. Hence, why we're confident about the pipeline. But I think looking forward, some moderation is expected in those 2 segments, offset by really strong growth in civil, commercial, multi-res and every remanufacturing sector, which continues to be strong whilst ever the economy is strong. Price growth, we still expect, obviously, as we went through FY '22, there was a range of price increases. Obviously, we're now at -- towards the peak of the cycle. We're certainly seeing that slowing. So my own personal opinion is the price rise cycle is just about out of puff now. We've actually seen a couple of price reductions from some suppliers. So I think that strong inflationary impact on building products is certainly starting to slow, albeit that we'll have a full 12 months now at these more elevated levels. So that certainly all goes well for revenue. The pipeline I've talked about, I think, it's certainly been stretched that's been well publicized, in civil, in commercial and indeed in housing as well, where trade and materials have been hard to get, and there certainly COVID-related and weather-related disruptions in the larger commercial and civil markets. Our view is the supply chain pressures will certainly ease further during FY '23, which we've already started to see. So then just on Page 16, guys, just a little bit on the -- so the market conditions just moving to Page 17, just on a couple of dot points on strategy with respect to the outlook, the consolidation project, not yet delivering the benefits that it can, whilst we've exited Wagga absolutely as planned and on time. The full investment of the new assets at Grafton is a little behind. We're about 3 months behind that project where there's been delays in shipping of the new equipment. And then certainly, our ability to access, particularly mechanical trades for the full installation of that has slowed us up a little bit. So that hasn't yet contributed to the bottom line of the business, but we absolutely believe it will in FY '23. So some good upside there in our view. I've chatted about our new little business in Lidcombe. Again, we think that gives us good strategic impetus to grow our position in Sydney. And look, the history of successful acquisitions, in my view, history is the best guide. We've -- from the day we've listed and before, we've acquired between 2 and 3 businesses per year. There's strong interest from vendors, [indiscernible] plenty, and obviously, we're very disciplined around the multiple. We always use an average of earnings, through the cycle, not just 1 year. And as long as vendors are reasonable and rational about that, we believe we'll continue to execute consistent with that history we've achieved for several years. So expanding the business is still an absolutely elementary part of our strategy, and we still see huge upside in the medium to long term to expand our network substantially. And then just on the financial side, guys, just an update 8 trading weeks or thereabouts up till now. Like-for-like revenue growth is up 23%. Now you might see a little aspects on that slide. I guess the comparable period this time last year, July and August, there were some COVID-related construction site restrictions during that period, that did vary by state. South Australia, different shutdown rules to Victoria to ACT and so forth. But a few were somewhat affected, let's say. So obviously, that strong growth, which we're pleased about, by the way, but just needs to be put in context a touch there. Certainly, on inventory where we have made investments, we see that moderating during the year as supply chains improve. So I think from a cash conversion perspective, which is the final point on that slide, we believe we can continue to maintain those mid-80% cash conversion that we've achieved right through the cycle long term. So we believe the business will continue to generate good cash in the year ahead. It's a final slide, the Appendix. I won't go through lots of history there. For those who like to review each line item, I won't go through that. So ladies and gentlemen, that's it from me. So we're just maybe open for questions. I'd like to hand back to the facilitator.

[Operator Instructions] And our first question will come from Raju Ahmed with CCZ Equities.

Can you hear me well?

Yes, that is clear, Raju Ahmed.

Okay. Fantastic. Look, excellent results. So congratulations on that. I've got a couple of questions, if you allow me. The first one is, Jim, I think a couple of slides back. You mentioned you saw gross margin improvement from the implementation of the ERP. Is there more to come on that front?

Yes. Look, I think there's always more to come because we don't profess to get that right every time. We've certainly got a great team of young business analysts that are really doing excellent things in our business by crunching a lot of data. Obviously, in the past, we would have left that up to site managers just to manage day-to-day pricing and margins, but having some really sharp guys and girls analyzing that on a daily basis to see where we believe we've left money on the table and have mismanaged pricing or cost. So yes, I think there's still improvement there. Raju Ahmed, I think we won't get the same growth I've mentioned at the half year, as you go up, the price rise cycle and you've got some inventory at a whole lot of lower costs as the prices have gone. That obviously aids gross margin. So we probably won't get the same kicker in terms of that weighted average inventory cost being -- let's say, in addition to gross margin. But we've looked at a lot of acquisition rates across every segment. And we don't believe we're above par in gross margin at all. So we believe there's still good fine-tuning to do within our business. And of course, the product mix that I touched on has also been changing as we've grown some of the higher-margin products that's obviously weighting up our margin regardless of what's happening in the market rate. So now it's not capped out in our view. We've grown every half year in the 10.5 years since we've been a listed company. And we don't see that that's going to all of a sudden reverse. But as I've touched on, I think we want to get that same kind of 190-point growth in FY '23, but we don't see contraction occurring, Raju.

Okay. No, that's good. The second question I had was if we go to Slide 12, this is more of an academic question. You talked about margin -- sorry, I should say, EBITDA uplift from revenue growth has been EBITDA uplift from GM improvement. Just to be very clear, when you talk about revenue growth, does it fill volume? Or is it volume plus price?

Yes, it's volume plus price. Yes. Yes. Because the volume is very difficult in our business to measure, we have so many different SKUs, 8,000 to 10,000, and some are units and some are lineal meters and some are cubic meters and some are square meters and summer pieces and some are packets and some of boxes. So volume is very difficult measure, so, obviously, that's just purely revenue, which is always during a year like this, a blend of extra volume. And certainly, the price rise or the inflationary impact is part of that number, Raju.

Okay, clear. So what I was trying to get at is, I think in the first half, the increase still impact. You had quite a substantive EBITDA uplift from price increases. So if I look at half-on-half, has there been any further sort of price contribution? Or has this been mostly driven by revenue?

No, I think...

Sorry, mostly driven by volume. My apologies.

Yes. No, I think as you've gone through, through the year, more is price. I think it's fair to say, Raju, because obviously, there's been further price increases happening. So there's been obviously textbook inflationary impacts there. which is also part of my thesis why I don't believe the construction sector is booming anything like perhaps public might think because the volumes actually, I think, are very, very modestly up on prior years and certainly nowhere near peak volumes. It's just that the price factor has certainly skewed the revenue numbers a little bit there. But mostly in the second half, we would have seen that inflationary impact higher than the first half, Raju.

Okay. Now that actually leads me quite well to my next question. On your second last slide, you talked about the trading for the first 8 weeks up only 3% like-for-like on pcp. Now you did put in the caveat that the pcp has been an easy comp. Fair enough. I'm just trying to understand the relevance of this number or usability, I should say, of this number going forward because July 2022 has been quite wet, particularly in the East Coast. So could this number have been materially better? Can you just give us some sensibility as to how we think about this flowing into the balance of the year?

Yes. So I think the easy answer is that the wet weather has had a very immaterial impact on Big River. I know some of the companies who are heavily exposed to civil construction, particularly if you're a contractor, then obviously, that wet weather has a large impact on your business. For us, it's quite minor and particularly because of our geographic spread. I think really, we look at our daily sales, and there's barely a blip from our long-term averages or from the sort of current run rate averages due to the wet weather. So that's not a factor, I can say. About 23%, as you touch on, not only is it a period where there was some impacts in the prior comparison period. But obviously, there's inflationary impact as well, Raju. So obviously, 12 months ago, pricing of those units certainly wasn't the same as it is now. So look, I probably can't break it down into exact numbers for you, but there's a blend there of weaker comparable period, and there's a blend there of the inflationary impact. But certainly, from a volume perspective, there's growth there as well, and the market certainly remains strong.

Okay. So this leads to the very last question, Jim. I mean, you've been around for a long, long time, and you've seen -- gone through the cycle. So how should we think about the detached cycle at this point in time? June approvals were down on the macro at around 20%. Now it changes month-on-month. I get that, but that would have captured just probably start of the interest rate up cycle. How should we think about, I suppose, the detached housing market over the next sort of 12 to 18 months, which sort of hits about half of FY '23, and then go forward from there?

Yes. Look, so the first thing is, I think, you need to look at residential, not just detached. So at the moment, obviously, detached got a big run on relative to multi-res, a couple of reasons. Firstly, obviously, the stimulus package from late 2020 calendar year was sort of more advantageous towards detached housing. So that certainly saw the spike in approvals and -- in that sector. And then flip side is multi-res effectively [indiscernible] 5 -- maybe even 10-year lows in terms of the number of starts. Combine that, and the total residential picture is not -- hasn't spiked way outside what might have otherwise been expected. And clearly, that is why is housing shortages, that's why rents are -- rental vacancies are at record low. So I think we've got to look at all residential together. Clearly, what will happen is detached housing will moderate down because the same things that drove people the houses, including COVID, by the way, where people wanted to get out of high-density living and move to houses. That will pass. And our view is medium density and multi-res will grow. Obviously, immigration comes back, students come back and that trend back towards city living. So we think that, that's part of the reason why the multi-res market looks so solid, but detached housing will moderate down. Put the 2 together, and we don't see any fundamental decline in residential, right? One drops and one increases. Detached housing will stay strong for the next 6 to 9 months minimum just purely because of that lag in the pipeline in our view, Raju. But I'm not sure if I totally answered your question. I think there's lots of factors, both social, stimulus-related and economic that have changed that balance between detached and multi-res over the last few years. But the raw total of housing starts is up a bit, but not [indiscernible] up, and there's still a fundamental undersupply and I think most players in property would bounce to that. And, that's part of the reason why the build-to-rent market is a new sector emerging, particularly, which is our multi-res or our -- it's both our formwork commercial exposure into those projects as well as the fit-out side. That's a whole new segment that's emerging to try and address this housing shortage. So the mix will change, but we don't see any fundamental downside.