Dipula Properties Limited (DIB) Earnings Call Transcript & Summary

We really apologize about the technical issue that we experienced this morning. Without wasting more of your time. Just generally in the business, I mean, we're just giving you the picture as it looks to the end of January. We've had a solid 5 months to the end of January. Kindly note that we won't be pronouncing on any figures, but basically just giving you a picture of how we're looking operationally. We did not give the market guidance last year. So we won't be giving any figures at this stage, especially given the higher volatility around load chatting and all these other things, but we'll get into that as we go through the presentation. Regard our very good operational performance to the end of January is obviously countered by concerns around service delivery and the potential of more interest rate hikes. I mean, these things are all very difficult to make prediction on in terms of what exactly the impact on our business will be for the next 7 months from these items. We are still going through weak economic fundamentals, although [indiscernible] actually quite a good trading month for our retail analysts, and we'll get into that just now. We also were starting to see decent reshoots on the office letting side of things. Our average monthly collections over the past in 11 months, we're about 98 -- sorry, over the past 12 months were on average 98%, but the spread to now. We're roughly 98%. So we're looking very good on the collection side. We have disposed of ZAR 100 million worth of properties of which ZAR 17 million are transferred by the end of Jan, we expect other transfers to come through imminently. So that's just for the period September to January 2023. There's a few more properties that we take in to auction in March and April. I think in aggregate amount of about ZAR 300 million of properties that will be taken through to auction. They generally smaller properties, isolated properties and basically tops at just from a size point of view, no longer with our profile. We've been receiving offers mainly from owner operators in some of the properties that have been disposed of and/or operators that anchor the properties and then lease out some of the space to basically their own group of people. The sense is that the buyer going to actually sell some more property to that type of buyer. There's no institutional buying really or selling that we're observing in the market at the moment. So these are generally sort of smaller eyes looking to add to their property portfolios. So far, to the end of Jan, we have spent about ZAR 52 million in CapEx, a little bit behind, but we nonetheless committed to a fair bit of CapEx as indicated last year for this coming year. Obviously, the disposals are being in part used to fund the CapEx. Our vacancies just overall to the end of Jan were at similar levels to the end of August last year. And we -- this is despite the fact that [ a game ] that vacated our mall in East London, Gillwell. And I'll speak a bit about what we're doing with that. But you can see, I mean, that is obviously just one big chunky vehicles to about 4,300 square meters of [indiscernible] there. They do write us a check and we're utilizing some of that obviously to deal with the space, as I'll explain later on. Good news also on the [ BE ] front is that our level improved from 8% to Level 6 on the latest rating. And we're working quite hard to bring that level even further down. We know exactly where we need to make the tricks. And we're very confident that, that level will come down go for even possibly a 3 for the coming year. Just looking at our balance sheet, we have refinanced all facilities that came up in the past few months. So we did about ZAR 711 million of debt refinancing at a floating rate of 7.84%. That's a margin of about 2.1%. And the average length of those facilities was 3.6 years. We're still working fairly hard in trying to see where we can -- how we can find ways of actually contracting that margin even further. We'll talk about that a bit later. And we also raised new debt facilities to the tune of ZAR 100 million, and this is utilized for CapEx, and that was at the rate of 9.31%. That's a gross margin of 0.3%. When that new facility doesn't really move the needle in terms of our gearing, so we're still within a very healthy gearing levels. Maturing debt of about ZAR 420 million is coming up by July this year. So in absence, I think of any interest rate increases, you could take the average cost of debt that we're reporting to you now. That's the number for the entire year. And obviously, you can make your adjustments subject to the hedging level, one way or the other in terms of the increases that might come through from the reserve bank in the next few months. So currently, averaging 9% blended cost of debt. That's a whole 60 basis points higher than August 2022. The average debt maturity period is 2 years, and the hedges are running for another 2.2 years. So almost perfectly matched at that 73% level. We've appointed one of the major banks to assist in a debt syndication exercise. We're quite far down the line with a particular exercise. So we're hoping for 2 outcomes with that entire process or 2 main outcomes. I mean one is achieving some sort of diversification of funders and basically a worthy concentrations that we've had in the past in terms of maybe just big exposed to major banks. So hopefully, out of the exercise will be at least 4 banks, hopefully more, but not only banks, we will also be going to the asset management fertility there's no appetite by some of the debt funds there. This exercise, we expect to be completed around May, June this year. So we have worked with that particular excise. The second objective of this exercise would be to try and see if we couldn't reduce the margin somewhat. We think that we'll -- we should be able to actually create enough competitive [ bidding there ] was to bring down that margin a bit. Banks have been kind to us, very different attitude from what we had during COVID and maybe perhaps before that. So there's no issues with refinancing as such. It's more a question of achieving the objectives that I've already stated. We've only repaid about ZAR 14 million between September and January this year of debt. And we'll obviously try and hold on to as much money as possible from the sales, so we can recycle back into the portfolio. As you know, I mean, we've been focused on improving what we consider core within the portfolio from an asset point of view. And we've been doing fairly aggressive leasing on the back of all of that. So I mean, this money will go towards that, and it will go towards potentially funding some of the solar projects, the money coming from disposals and so on. Our swap margin at the moment, if we had to go to the market on new facilities to swap them out. We're seeing anything between 30 and about 80 basis points on a spectrum of 1 to 5 years. So the highest we will be over the swap rate would be about 80 basis points -- sorry, the highest will be about the margin that we're achieving over JIBAR will be about 80 basis points. Our debt covenants are intact. We think about 38.7% now our TV at the end of Jan. Now ICR is a think about 2.8x strictest LTV from the banks 50%. And basically, the ICR is about 2%. So we're fairly comfortable. And just to touch a bit on load shedding. I mean a complete nightmare. I mean part of the reason why we were late this morning is load shedding. And we're starting to think that -- and we're starting to see that it's affecting tenant businesses relatively. And we just can't quantify the negative knock-on effects of that phenomenon. We'll give you a number on what it cost us in direct costs so far. But the indirect effect of this thing is a big unknown. Our centers, I mean we've only got 1 enclosed mall -- 2 enclosed malls to be exact. The rest of the centers are open centers, which means that guys can actually just get along with their own backup power to some extent. And as you may know, most of our anchor tenants have their own generators. So the centers are -- the retail centers are substantially functional even during low [indiscernible]. We have sold very few PDV systems, but they're all got tight. And obviously, I mean, the intention here is to actually intensify the rollout of TV going forward and looking at a combination of obviously having the PV for generation purposes, but also looking at creative ways of storing and having backup. Generator are very expensive, as you may know. So going forward, we need to be really innovative on how we store in a cost-effective way and how we back up in a cost-effective way. So that's a focus area for this year. We've got about 86 installed generators across the portfolio between ourselves and our key tenants. So that's a total generator count on the portfolio. 62 of those are in the retail portfolio and about 17 in our office portfolio and about 7 on the industrial side. Our diesel expenditure for the 5 months was about ZAR 3.5 million that this is not just for generators that we own and so on. That doesn't include the tenant spend, which as I think some of the retailers have made numbers public and [ are staggering ]. And basically, if you look at the 3.5% relative to what we had spent for our whole year financial year last year, we have spent about ZAR 3 million in diesel last year for the entire financial year. And already in 5 months, you've done about 3.5%. No [ ceding ] is getting more intense on an ongoing basis. So far, we recovered about 65% of what we spend. And that's basically the diesel component of it. We also recover some sort of surcharge for maintenance and so on for these generators. I suppose there's a limit to how much tenants can afford because we are already seeing a little bit of pressure from especially some of the office tenants. It adds quite a bit to the numbers, especially where you have not meeting and you're in charge on a [ pro rata ] basis. So we obviously need to change things there to be a bit more realistic about how much you can pass on. We expect to spend between ZAR 8 million and ZAR 11 million to the end of financial year in diesel. And we think that, that will probably lead to an under-recovery of anywhere between ZAR 4 million and ZAR 6 million. So that's obviously a negative that's quite a bit higher than what we would have cat at the end of last year at the start of the financial year will be the top budgets. So just looking at our retail portfolio quickly. Last year, December, very good trading. We'll provide a bit more color on these numbers when we report for interims. But just in summary, we did about 12% across the portfolio year-on-year. So we add November and December together because of Black Friday. So if we take November '21 and December '21 versus November and December 2022, we had an average down about 12% in increase in trading density or turnover. So we're a bit concerned about inflation and the impact there, although we see very healthy increases in both turnovers from a retail perspective, the margins are not anything to write home about. So at some stage, there will probably lead to some difficult negotiations around rentals and [indiscernible]. And I mean, we generally, as a sector of property industry, use turnover as a measure to determine how well retailers are doing an also affordability of rentals, but that may not be a very accurate measure to use if margins are under threat. But we're still seeing -- I have to admit, a very healthy appetite for space and expansion from blue chip tenants on the retail side. And I think that support will be there for some time to come because there is almost no development activity to really speak about. So the space will have to come from existing centers. So through [ clever ] re-tenanting and accommodations, we should continue to actually improve the quality of income on the portfolio by signing up these very creditworthy tenants that are looking for space expansion. And as far as game that Dupla is concerned, as mentioned earlier, they moved out in November last year. We are placing them with a second anchor. We've got a shop -- with a shop right in the center. And in the level that game was we're going to put the Boxer, -- we're already building out that store. They want to trade by and mid April. And we're also leading the rest of the space to some line tenants. Between the -- there's a reconfiguration and basically, the new entrants that we punched into the shopping center there late last year, we've lost about 500 square meters of GLA. But we're hoping that we'll make that up with higher rentals for the line tenants that we put in next to gain -- sorry, net to Boxer on those re-tenanting type. But I mean the flow in the centers already improved quite nicely. We are seeing a few more -- a lot more people actually walking through the center now. So that should be good for us going forward. We've had a little bit of a delay in at 45% from Atrium, which is a old [indiscernible] property in signing up an anchor. We've gone back, redesigned basically put the anchor -- we wanted to put it in a semi patient in there. No one really wanted to go there. We've got a list of tenants we tend to go in, but obviously subject to the anchor being signed up. We now flipped the thing in accommodating the anchor on ground. And we think that, that should actually accelerate. The project has started. It's just that, obviously, from a leasing perspective, we were not quite where we wanted to be. So that -- I think we're probably looking at anywhere between 3 and 4 months in delay of cash flows coming through for that particular project. We assume that April was going to be the start of some leasing about at least 50% of 39,000 square meters. But we're probably now looking closer to suppose July thereabout for further rentals to come in. From a leasing perspective, as I said, really has been decent 5 months. We had 14,000 of 40,600 of new leases on the retail portfolio. That was for an average period of 3.5 years. So that's quite pleasing and the rentals were about 8% below asking rentals, but that's because we have assumed a different tenant in those spaces. As I said, we are moving towards the quality. And our escalations were at about 7.3%. So very nice escalation locked in there. But the impact of the high inflation now in a positive way to us. And on the renewal side, mainly national tenants being renewed. We did 32,000 square meters, 500 the weighted average lease period of 4 years. And there, we experienced a positive renewal rate of 3.5%, and we were about 7.5% above what we had anticipated to renew it. The weighted [indiscernible] escalations achieved there was 6%, 6.1%. If you look at the office portfolio, the vacancy has stalled. I mean, our vacancy is not increasing. In fact, we are moving space there. We've got close to 1,000 square meters of very strong inquiry at Avanti that we should be able to move fairly rapidly. And then we've moved space at [indiscernible], that's another about 5,600 square meters of space. And then we've had a few small uptakes in the portfolio. So those lettings are not reflecting in the numbers that we're reporting on now. But I mean, those are all things that I have been now at the moment as we speak. So there should be a reduction of vacancy there going forward. And then obviously, we're advancing on some alternative space users in the portfolio ranging anything from residential conversions to other users like storage, et cetera. We are fairly confident that 2023 is from an office portfolio point of view, by the end of August will be a much better year than what we had in 2022. Obviously, all things being equal. I mean, we're really not sure whether people's mood and the same level of suppose positivity to some extent that we're experiencing so far will continue with the low changing, which is really putting a damper on most things at the moment. And obviously, service delivery in Johannesburg, [indiscernible] as almost country stands. I mean, the place as a dip. I mean it is just all over the place. There's a shortage of water, probably related to load shedding. That's just -- yes, it's not a great space to be in at the moment. So we're just hoping that these political issues that are going on between the parties in the coalition government will probably come to a point where we start doing the work. But I mean, it's we're battling quite a bit with these guys at the moment. We're still negotiating on government leases. We've got a 5-year proposal on a 1 property, which looks decent and is above budget. That number was shared at [ Intrum ]. And we're still waiting for feedback from them on 3 other bigger leases that we're negotiating on with them, that's the [indiscernible]. It doesn't look like they're going anywhere. So we should close out from those leases. So just from a leasing point of view here, obviously, very few transactions happening on the office side, but we've done between September and basically, generally, we have done 3,500 square meters of new leases. It was for a period of 2 years, 2.5 years on average and rental escalations, we were 7% above our asking rentals, basically, when I say asking, I mean, budgeted rentals and at the weighted average escalation of 7.7%. So good escalation achieved there. And the renewals, we have renewed almost 10,000 square meters, but these were just leases been rolled basically. So we need to increase that as we discussed with them, so that's 0.8 years or less than a year is basically just government rolling their leases. So yes, we are hoping that by the end of the year, those month-to-month or 1-year shorter views by government will turn into longer PC profile. The renewals have been flat -- and we'd obviously assumed negative divergence in this area. So we were about 22% above where we thought we've closed out the leases. So that is probably a temporary situation, but that's nonetheless a positive figure coming through on our numbers so far as a result of that phenomenon. The escalations there were about 7% for the end for more than a year. But obviously, those were very few leases given that weighted average lease period there, sort of a small in comparison with [ DIA ]. Industrial, a very low vacancy, still very good demand for space. We moved another 2,300 square meters year. We don't really have much space to move on a new lease aside. But I mean the activity is around the many units that we own. So we never signed long leases there. So the only time you'll see a long lease is when we move in bigger boxes, but these are many units and basically for risk purposes, we do anything between 6 months to 1.5 years to maybe 2 years, but never really longer than that. The rentals here were 4% below asking rentals. And I think the electricity is probably weigh in a little bit on these smaller tenants. So you've kind of seen them push back a bit on those rentals, something to monitor quite closely. And we're countering that by adding value towards the tenants receiving in these units now. So we've got some facilities that we previously didn't have that we're launching just account any sort of negative movement there. Again, that is an oversupply of the sort of product. So I think our teams can do a lot better in moving some of these many units still averaging below 40 in many of them. With [indiscernible] on the high end. So I mean, those rentals can definitely still -- there's still upside there in most rentals. We had renewed almost 12,000 square meters on average period of almost 2 years. Again, one unit phenomenon, we had a positive renewal rate of 0.4%, which was -- and it was about 1.2% above what we had budgeted. The weighted average escalations were about 6%. Just looking at our residential portfolio. The vacancy at the end of January is 4% compared to 6% in August 2022. And just looking at that picture a little bit closer. We -- turning at Norwood that's only just on flat and are turning at Palm Springs was 270 units and 61%, respectively, for Midrand and Bruma. And if you look at all those figures actually represent in terms of where our rentals are going, we were on average up 4.5%. So we still increase in those rentals now being the best performer with 7% rental growth. And basically, Bruma and Midrand respectively, 4% and 7%. Still obviously playing very defensive, but plans to keep the property full. But we should start [Technical Difficulty] property 2. [indiscernible] awake at the moment. That's basically the Eskom on a municipal services risk really at heightened levels, even more so than before other [indiscernible]. We're worried about the political environment and socioeconomic issues and the impact of [ velociting ] on things like crime and the low economic growth and what impact that will have on again, things like crime and perhaps sort of medium and longer term, what it means in terms of the performance of our underlying tenants. We've got concerned about insurance in light of all of this. We have reviewed all of our insurance for this year. But I mean, one car, how bad to wonder if insurance going to keep going up as aggressively as it did last year. So it's definitely something to keep our eye on. And now if you're on the back of all of this is you have to secure more -- that might have an impact on operating costs, et cetera. We -- but worried, especially up in the [indiscernible]. I mean, there's a lot of movement of people now down to the coast. Some people even further abroad. So we just need to [ box ] smartly there attract the right people, keep the right people and try and not let that actually lead to a gap in our business. And obviously, I mean, for some of the CapEx that we wanting to spend on the properties and maybe the energy rollout that we're planning, we're going to have to box market in terms of where we raised the equity component of that from and obviously be very careful that we don't overburden our balance sheet with additional debt in rising interest rate environment that hopefully was stabilized. So opportunities are definitely on the renewables side of things. And we've been engaging extension with the banks. I mean there are some really competitive funding available for these renewables at the moment in the form of green loans or green-linked loans. We're very confident that we'll unlock some of that. And then obviously, our game has to be first off of finance is recycle assets get into improve the portfolio and also get into a more secure position in terms of our energy needs. I mean these energy projects are not there from a return perspective. So there are definitely some sensible ways to recycle your money into. As I said earlier, we pursue debt restructuring, which we expect to shave off anywhere between 20 and 30 basis points on our total margins achieved so far. So hopefully get below that 2% margin after the restructure. And continue the [Technical Difficulty] leasing initiatives. I mean projects like Gecina and Victoria North and all of other projects have gone well. We are almost down there. And I think we'll take you around on the tour soon to just go show you what we've done with your money. Also, we have been automating our business quite a bit. We've rolled out one module in DocuWare, which is a process management system paperless. And we've got some [ alfreporting ] tools in the form of Power BI that literally allows us to monitor the portfolio from anywhere and everywhere. And manipulate and play with [indiscernible] of our portfolio. So I mean, that work is top of mind, and we continue to actually just get better and better debt. From a solar perspective, I mean we started by saying how efficient are we in the buildings? I mean, obviously picked up quite a lot of inefficiencies. We're addressing some of those. Drop consumption is the objective. Once you've dropped the consumption, both for our site in terms of common areas that we typically pay for and in terms of encouraging our tenants to do similarly then they basically size up the plants that we put up. And as I said, this will be funded through asset recycling. I mean, typically, we think that just changing from the plants that we have now, you can supply in the case of a shopping center up to 30% of your power needs. So 50 [indiscernible] maybe can try and subject to, obviously, security and all that do car parks and things like that, your parking base that we wouldn't do in the power because I mean the often security is a bit of a problem there. But where we can, we can actually max that. But on just the roof, roughly 30%. Our Phase I is going to consist of our 30 properties. And these were selected on the basis of best yield, it was selected on the basis of best secured. There are properties that were deal phenomenally, but we don't think that they are securing enough to actually put total panels on. So there, we're going to have to look at other solutions, including the willing, if possible. And the total capacity of this phase is about 15 megawatts, total cost of anywhere between ZAR 150 million and ZAR 160 million. And top of mind is obviously can we store in a cost-effective way? And can we buy power from others that are producing it to make us less dependent on Eskom. So these are all options that are being looked at as part of this rollout. And basically, most of this would relate to the retail assets because that's where the model works best. But there are scenarios where smaller rollouts have been done in the office side, but that is also a lot more feasible on the office side than on the retail side. So I mean, we're looking at back key options. And obviously, I mean, the diesel is the biggest mandate moment. We're seeing solutions around gas generators as well to put that in a mix as well. So just in conclusion, I mean our focus is radio and just controlling the controllable. Our business is still in good shape at the moment. I think it helps to be in that defensive retail that we're in. But I think that it's positive that we are moving off the space now at the moment and that that's actually stabilized. So I think, yes, value proposition to tenants, upping that service levels and sorting that our teams are into the past, close out the deals quicker and that our systems report accurately and things like that. I mean, that's very important. So that's really a lot of these controllables. I mean, looking at our consumption, how much we actually consume going out there and becoming even more efficient on the cost side by squeezing the last cent out of suppliers and things like it always subject to not dropping the service levels. I mean that's what we will continue doing going forward. The debt restructure is a big one for us that has some financial benefit as disclosed earlier. Digitization, we think will, over time, lead to a situation where we become even more efficient on the cost side. So that's basically a 2 to 5-year project to actually get to the very -- not the end of it, but I mean to get to a point where it becomes impactful in our lives. We will optimize the portfolio through primarily noncore disposals and revamps and leasing. And that solar has to get offered ground. So that's what our focus is for the next 6 months. And as discussed earlier, we will not be giving you a number for distributions. But so far this year, things are looking good. Thank you very much. I'll open up the floor for questions.

Yes, Izak, I think we've got a few questions here. I'll just read them out to you, then you can respond. So first question that's on Lwando, 65% recovery of diesel costs from tenants. Any chance that [indiscernible] can improve or increase in this recovery ratio.

I think there's a few things we're doing in that regard. The one is we've discovered that some of our generators, especially on the office portfolio are a little bit oversized. So if you went to recover that diesel, like we're doing now devote pro rata basis because it's not necessarily meet it, we are looking at metering solutions there. You're probably going to end up over burdening tenants. So we're going to move around general going to remove that those generators from those properties, go put them in properties where they correctly sized. And I think by doing that, we should actually be able to recover better. The other thing is to make this in affordable for tenants. We believe that these gas generators are cheaper than the electric one, so we need to get a mix of gas generators in the portfolio as well. And there of course, it's a question of looking at for office buildings, perhaps battery solutions as well. So I think there's scope to improve that number over time. But I think in the short term, it's not something that you can achieve in a month or 2. But I think I don't know in the next 6 months or so, making a few ticks, we should be able to actually improve on that number, but that's a cost. I mean we must rather keep the tenant and believe that the diesel then lose the tenants at the moment.

Okay. Second question from [indiscernible]. Please explain the jump in LTV and lower ICR versus FY 2022. I think I can take that question. So the LTV, the main reason for that was we effectively contracted for a new ZAR 100 million facility. That was the only reason why we help increased. And then on the ICR side, it's purely because of the increase in interest rates between August to January. And we do have 74% of debt-to-debt 25% of it's floating. And that's the main reason for the ICR increase there.

Just to add to Ridwaan's point there, it's also the amount of money that we keep in access on our excess bonds. So I mean that's a buildup sort of closer to or the later in the year, the lower debt will drop, but for obviously for a temporary period and just -- but there's a bit of a play there also. But I mean, the main reason most definitely that additional debt.

And another question Lwando. Appreciate the polars progress on previously communicated plans to improve the liquidity in the stock.

Yes, I think the liquidity has already improved quite significantly. I mean, we've seen some good volume go through on a share, but obviously nowhere close to where we'd like it to be. We are engaged with the JSE quite extensively just figuring out how we get into the index. And we basically ticked all the requirements, except for market cap. They indicated that as things stand now, we'd have to get to about ZAR 6 billion of market cap to kick any of the companies that are in there. So you can drop to below 6 once you are in the index, but actually kick someone out, you need to actually be at 6% at the moment as [indiscernible] indicated. They look at that index twice a year in March and September. But if we were to be involved in any sort of transaction that led to that market cap increasing to those levels, then they do the trick immediately. So I suppose we -- in a sensible way, I do believe that Dipula needs to scale up for many reasons that we've indicated to the market, not in a desperate way. But I mean I think scaling up would give us -- we see more -- give us the right size even from a retail point of view, which is a scale thing. Retailers definitely scale. I mean the bigger you are, the more your negotiation power without a doubt. And then basically, hopefully with that scaling could come trigger to get into that index, which would significantly increase the credibility of the stock. But volumes are generally down on the JSE as you know. But yes, I mean, management is on highlight in terms of just making sure that if something sensible is just out there in the market, we take advantage of it.

So we got 2 questions from [indiscernible]. The first one is, do I understand correctly on the retail portfolio and the renewals that your lease renewals currently set at a positive 3.5% on renewals and the budget was 7.5%, which effectively means that the budget was minus 4% of the current [indiscernible] is 4.5%, but we obviously grew by 3.5%. So there's a 7.5% movement between those 2.

That's right. At the end of Jan, that's where we renewed. That's correct.

Okay. Then second question from LV. We are total cost per megawatt of solar panels of around 10 or 10 million or megawatt being similar but high. Could the [indiscernible] is due to bad battery usage being included.

There's some ongoing maintenance in there, a little bit of bad battery. But the last project we did, we did at [ Adrand ] and that was 2 years ago, 3 -- almost 3 years ago. So our sense, obviously now with the rand dollar exchange is that, that number has moved out a bit. So we might have heard but sort caution there. So -- but I think that number is anywhere between 9 and 1050 at the moment. So that's what that number is. We don't think it's excessive. I mean given a ZAR 10 the feeder store makes a lot of sense. But yes, number might actually go up a bit if we up the storage component, which is the one thing that we're dealing with the engineers now at a moment.

Another question from Lwando. Please give the direction of net rental income for the period under review.

On net rental income. Yes, as I said, I think fundamentally and basically, from a business perspective, we've actually we've done well to the end of January.

Okay. There's another question from Nick. I assume that it will not benefit from the 125% tax allowance on solar. If this is correct, does it not make more sense to renters or operators who want to generate their own electricity.

You're giving away margin. And we've obviously looked at as a roof rental model. We think that you leak a lot more money through that. We need to find a way of optimizing that tax and maybe it's in a structure that sort of us back some of that tax benefit that might sit in the. But the pure roof rental model is something that we're not really keen on at the moment.

Yes, I think that's [indiscernible].

Right, there's no further questions. We'd like to thank you very much for your time. And once again, apologies for the late start. I think we still made up some time because we're only sitting at that 12:05. Give us a shout. If you need anything else, send us messages. As you know, we're going into a close period from Wednesday, but we obviously able to answer general questions and strategic questions around our business. Thank you very much.