Dis-Chem Pharmacies Limited ($DCP)

Good morning, everyone, and welcome to the results presentation for the year ended 28th of February 2026. I will quickly go through some group highlights before we dive into each of them as Julie and I and Chris talk you through the presentation. Importantly, we launched Better Rewards, and we are returning significant instant value to consumers. Better Rewards is delivering strong revenue growth, excellent market share gains and ultimately not compromising on total income margin. When we think about property, our pipeline is at now 163,000 square meters and we have launched the Health Hub, our Store of the Future format as well as rearchitecturing the operational model to ensure that the real estate vertical in the organization is well positioned to service our property ambitions. . Our total income growth of 9.6% is ahead of revenue growth of 9.3%, and our incremental total income margin is at 30.8% improved from 30.7% Importantly, over the Better Rewards period up until the year-end and into the 19th of May, which are aligned in our post year-end reporting, total income margin is at 31.6%. Cost control, staffing framework too has been initiated and has supported a well-controlled like-for-like payroll cost at 3.5%. Together with strong total income performance and strong revenue growth, core retail profitability up at 27.1%. Working capital continues to be a focus and inventory days have reduced from 91 to 86 as it been in the financial year-end. Our wholesale market share expansion continues, external wholesale market revenue growth of 11.3 driven fundamentally by our growing TLC franchise base, which has increased revenue by 16.4%, and the independent customers increased by 7.2%. The conversion of independent customers into TLC remains the biggest growth opportunity on our external wholesale market. As we move into the integrated healthcare ecosystem, policy growth and continued improvement in bidirectional metrics of the health and life funded products, Importantly, these products are designed for ecosystem integration and the more invested individuals and policyholders on our ecosystem, the more return they're enhancing their our retail stores. Our Store of the Future, the Health Hub has also elevated the clinic experience and the new process design is delivering lower cost and higher quality care, which creates optionality into how we think about benefit design of our health and life funded products. Digital has been highly invested in, and we are soon to release our new app and broader e-comm offering. The digital environment has also introduced digital experiences into our physical spaces, no more visible than in our Store of the Future format where the digital journeys in our store are replicating our app and e-com journeys. I'm now going to hand over to Julie, who's going to take us through the financial results.

Thank you, Rui. Good morning, everyone. This financial year has been 1 of investing in our ecosystem for the future growth of delivering integrated healthcare as well as delivering strong results from our core retail business. You will see that in the presentation, we have, therefore, shown the group results for the financial year end as well as the performance of core retail. Important to note is the one-off property gain of ZAR 103 million in the prior period in the wholesale segment with regards to the IFRS-16 release from acquisition of Midrand Warehouse. . The main aspects from the statement of comprehensive income perspective, a revenue growth of 9.3% and total income growth of 8.7%, 9.5%, excluding the property gain in the prior period. After excluding the profit gain and investment in the ecosystem and nonrecurring expenses in the current period, which we will unpack in the subsequent slides, expenditure increased by 8.5% and operating profit by 14.8%. Other points to note in the statement of comprehensive income is finance costs, profit from associates and joint ventures, tax and noncontrolling interest. Net finance costs increased by 3.3% from the prior comparable period. Excluding finance costs from IFRS 16, net financing costs increased by 7.1%. This increase is mainly due to the additional overdraft facility being used in the current period. The increase in the profit from associates and joint ventures is due to the performance of Kala, Genio and Kena, that has offset the loss in Dis-Chem Life of ZAR 50 million. The effective tax rate has remained fairly consistent from the prior comparable period. Noncontrolling interest increased due to the strong performance of minority interest stores and oncology. In the statement of financial position, there is an increase in property, plant and equipment due to the net 31 new retail stores opened during the period and investment in computer hardware. Intangible assets increased due to additional software build, including enhancements on the app and broader e-commerce offerings. The inventory holding remained consistent from the prior period despite the opening of a net 31 new stores to achieve the medium-term target and the stock cover. Trade and other receivables have increased with the growth in the wholesale debtors book on the back of external sales growth of 11.3% as well as additional service income earned. Other assets have increased due to the preference shares acquired in Dis-Chem Life of ZAR 189 million. Bank loans have reduced to the quarterly capital repayments that have been made. Other liabilities have reduced due to the redemption of Benefit Point with the launch of Better Rewards and reduction in the foreign supply chain financing. At year-end, the Benefit point liability was only ZAR 3 million. Revenue has been broken down between the wholesale and retail segments. Retail revenue has grown by 9% to ZAR 36.6 billion with like-for-like revenue pleasingly growing by 5.3%. This growth was influenced by the opening of a net 31 new retail pharmacy stores, strong growth in both the pharmacy and health categories as well as the launch of Better Rewards. For the 17 weeks under the Better Rewards program, which launched on the 21st of October, retail revenue increased by 9.6%, with participating Better Rewards brands increasing by 12%. compared to the corresponding period and volume growth of 18.7%. External wholesale revenue growth has been well supported by the growing TLC franchise model at 16.4% and the continuing support of independence at 7.2%. The TLC franchises have grown from 240 at February 2025 to 280. Total income for the group has increased by 9.6%, excluding the property gain in the prior period with total income margin moving from 30.7% to 30.8%. Retail total income grew by 12.2% with total income margin increasing from 30.3% to 31.1%. The increase in margin is attributable to the increase in trade terms of 18.4% against purchases growth of 7.4% as well as transactional gross margin growth ahead of sales growth in healthcare and medical category. Wholesale margin declined from 8.2% to 7.2% due to the mix of products sold, promotions into the external customers as well as the impact of certain procurement costs and rebate impact of lower inventory levels in the current period. Moving on to retail operating expenditure. Retail expenditure has increased by 15.7% from the prior period. Excluding the investment in the ecosystem and eliminating nonrecurring expenses, retail expenditure increased by 9.8%. There has been a 14.9% increase in depreciation, mainly as a result of the IFRS 16 depreciation additions to computer software and hardware as well as fixtures and fittings for new stores and renovations. Occupancy costs have increased by 9.9%, predominantly due to the increase in electricity charges. Employee costs still the largest expense within the retail segment increased by 11.5% and when excluding the investment in expertly by 10.3%. Like-for-like employment costs continued to be well maintained at 3.5%, which is lower than like-for-like revenue of 5.3%. Other operating costs increased by 26.2% and 9.8% when excluding the investment in expected and nonrecurring expenditure. This increase is mainly due to the increase in IT-related costs, courier costs and advertising. Rui will elaborate further on the investment and nonrecurring expenditure that has been incurred in the period versus the expenditure in the core retail business. Wholesale has done well in the current period with the increased warehouse space to keep expenditure growth at 2.6%. Depreciation has decreased by 24.3% due to the reassessment of the residual values of buildings in the current period. Employment cost growth is predominantly due to the additional staff in the Long Meta warehouse as well as the annual increases. Operating profit for the group declined by 11.9% from the prior period due to the investment in the ecosystem and nonrecurring expenses. Excluding these costs, the operating margin improved to 5.4%. EPS and for the period is 104.2 and 102.7 cents per share, which is a decrease of 17.1% and 17.3%, respectively, for the period. When excluding the investment and nonrecurring items, EPS and HEPS increased by 18% and 17.7%, respectively. We now move to working capital in the statement of financial position. Debtor days is being well managed and has increased by 2 days due to the increase in the wholesale debtors book and additional income earned in the period. Inventory days have reduced from February 2025 with the sell-through of the SCP buy-in in the prior period and the strategic plan to reduce inventory days. That has been partly offset by the additional inventory held for Better Rewards products. Overall, net working capital days improved by 1 day when compared to February 2025. When looking over the 12-month period, the rolling stock days have improved from 79 days to 77 days. The store inventory has increased by 1 day due to the additional stock held for Better Rewards products. The waterfall graph depicts our cash movement in the current period with a decrease of 429 million since February 2025. Cash inflows have come from normal trading and working capital movements. Cash payments have been made for taxation, finance costs, dividends declared as well as for lease payments, CapEx and loan repayments. Included in investing activities is also ZAR 189 million relating to preference shares acquired in Dis-Chem Life. Expansion CapEx is mainly driven through the opening of our new stores and investment information technology enhancements across both retail and wholesale. Maintenance CapEx has increased with additional warehouse space and renovations of existing stores and head office premises. I'll now hand over to Rui to take you through the retail trading performance.

Thank you, Julia. If we describe our retail trading performance, we start with core category market shares. So across our core categories, we've gained market shares predominantly a function of the introduction of the Better Rewards program that launched on the 21st of March. The design of the program, which I referenced to later on in the presentation, talk to call to actions that encourage the consumers integration of the ecosystem. And as a function of that, when we think about the penetration of the basket across our core categories in terms of what belongs in the Better Rewards space, and the way that we use elements like the pharmacy boost to drive dispensary traffic. We have gained market shares across dispensary, personal can, Beauty, Healthcare and Medical and Baby Care. Our specific relevance is the market share gains in dispensary and Healthcare and Medical, the way that we've positioned ourselves as a group and what we chase down is security of Foot Africa around healthcare services and certainly a destination healthcare retailer. If we look at core category performance off the back of those market share gains, you would have seen revenue increase strongly across this pantry, personal care, healthcare and medical and other. Baby Care down at 5.3%. That really is a story of 2 halves, significantly down, considering a decline in the market in the first half of the year or prior to the Better Rewards launch. And subsequent to the Better Rewards launch, we started to see value gains and volume gains in Baby Care for the first time in the last 36 months. It really talks to the commoditized nature of the baby basket and how price-sensitive consumers are on the majority of baby. A big contributor to baby is obviously paper, so nappies and wipes as well as food areas where Better Rewards are very prominent, and we've started to see a shift in baby care. Again, pleasingly, strong revenue growth in dispensary and Healthcare and Medical. Point to note, the dispensary revenue growth has been influenced by the introduction of GLP-1s. We start -- we see and continue to see high penetration of GLP-1s. That will come off a bit as a function of that GLP-1 revenue in the base, but we continue to see growth in the GLP-1s driving dispensary revenue growth. Change in total income margin. And again, across the entirety of the year, there's been an improvement across all categories. Important to note, considering that we launched Better Rewards on the 21st of October, and we specifically talk about the margin profiles of the period prior to Better Rewards and a period post Better Rewards. But I think considering the disruptive nature of Better Rewards, very, very positive results, a strong change in revenue growth, indicative of market share gains and then certainly increased and protection of total income margin, which talks to the manner and sustainability of the funding of the program. If we move on to the slide where we break down the ecosystem. Again, I think it's important just as a function of how the investment in the ecosystem through X big labs and the investment on Dis-Chem Life has been made. It's important to break them down into the contributing factors. So when you look at our group and Julia described in the way that she presented the financials, and I'll talk to the numbers and reiterate the principle. When you look at our group core retail, that includes our health-funded products. which are growing ahead of core retail. I think when you look at core retail, you also have to exclude the nonrecurring expenses, which I'll touch on more in the next slide. Then we've got the investment in the ecosystem. I think if you think about how bigly has come to life. Obviously, you have to upfront that investment. And by investment, typically because it's resource focused, it's through the income statement. We also use consultants to build out work parcels or parcels of work that became important in our ambitions to move from retail pharmacy to integrated healthcare provider. So it's important to split those 2 to demonstrate the performance of the core retail machine, which is ultimately how the stores are trading. And then we have our wholesale segment, which we report on traditionally. So if we look at the trading performance of core retail and we break down those numbers, what you start to see is when you combine all of the elements that I described previously, operating profits down 6.9% as a function of the investment that we've made in the ecosystem. If you had to split the investment in the ecosystem and the nonrecurring expenses, there are really 2 buckets. So ZAR 330 million has been invested across the ecosystem and to fund the continued improvement of Dis-Chem Life, ZAR 27 million of the ZAR 330 million has gone into Dis-Chem life. So just over ZAR 300 million has been invested in expertly labs. As I said previously, that investment was made over the full financial year. And importantly, the realization of the efforts that have come from the investment are starting to play into the back end or played into the back end of FY '26. Some of the initiatives that landed that were in the control of ex bigly labs, Better Rewards, the design and the implementation of Better Rewards as a reagent reward program. And certainly, the mechanism that we see as a group to reduce the cost of care and open up value in the South African consumer wallet. Store of the Future. Store of the future, very much a project that was run out of Xb labs, the conceptualization of the physical space that did justice to the purpose of the brand and coordination of that to not only deliver a reimagine space but to change the ways of working to disrupt how we think about clinic and pharmacy, which I talked to separately, and the establishment of every other vertical of expiry labs, which I talked to in the next slides. The way that we think about that investment into FY '27 is that it will return a net positive return just purely as a function of expertly labs having the opportunity over 12 months -- over the 12 months to generate a return, which is quite different -- was the benefit points that we used as tender that lay in the system -- it still existed, but a significant portion of the 105 million, which are nonrecurring was in the retirement of the program and in conjunction, we were already discounting the Better Rewards brands -- of the core retail machine. If you take all of the core retail traded really well. Profit before tax, up 27.2%. And that shows or driven predominantly by 2 metrics: our like-for-like number which was north of 5% from a revenue perspective. And then our retail payroll number, which is our biggest contributor to the cost line, just north of 3.5%. So the establishment of operating leverage driven by the continued deployment of framework 2. And obviously, the benefits of the implementation of Framework One and the relationship between retail revenue growth and total income, as we've described previously, has generated positive operating leverage in the core retail trading performance. If we then move to x bigly Labs, maybe just a reminder of the innovation unit and what it controls. Again, bringing to life expect labs was really a manifestation of areas of the business that we're underinvested in and an acknowledgment that not only to change the business from a pharmacy retailer to integrated healthcare provider, but also to change the ways of working that would be suited to the market that we operate in. The market that we operate in remains highly competitive and servicing what becomes more and more of a value-conscious consumer. I think the tubs do just as to how we think about the investment in big labs and the return associated with the investment we're making along each of those trials or verticals or areas of control. So the first 1 is integrated digital engagement. Integrated digital engagement basically is the investment that we're making on controlling how we shape up as a brand in the world of e-com. And so we are close to launching our remanagement application. The way that we think about that reimagined application, already the infrastructure that sits behind it has found its way from an omnichannel perspective into store of the future. It's modernized, it's integrated. It's a big lift on what existed previously. And certainly, we believe it will be as competitive as any retailer happen in the market. Integrated health enablement. This is really the investment that we make on the extension of our health funding solutions to build out and to control benefit design of health funding solutions, customer life cycle value, customer life cycle value holds and controls not only the way that we communicate in a personalized way with customers, but also the way that we shape up and evolve the Better Rewards program, as I said, important and certainly, the tool that integrates into how we think about unlocking value for customers and reducing the cost of care. Commercial Decision Intelligence, which is basically aligned with how we think and how we use data to inform the way that we retail, commercial decision intelligence has been very active in the way that we've reimagined our promotions, the way we've integrated the Better Rewards program into our promotional mechanisms. And then wholesale innovation, which Chris will talk to separately, the TLC brand and the way the TLC brand ultimately plays out into the network. So basically Dis-Chem and TLC brand servicing ultimately what would be the solution of our health fund products and then enterprise acceleration, which really creates efficiencies across the organization, both internally and externally. The biggest piece of work being chased down by that trial, really reducing the cost of dispense and that has been brought to life, and I'll touch on it a bit later in the way that we've designed and implemented store of the future. If we move on to expect labs for an update perspective. So from an integrated digital engagement, as I said, we relaunched our app. We're also making significant progress into other e-com channels. Our app will mirror certainly from a digital perspective, the presence that we have in our physical space, simply the foundation and the way that we think about digital spacing is anything that is enabled in the physical space. We enable digitally and we ensure the consistency of any omnichannel experience that we have in our physical space consistent with that of the digital space. Integrated health enablement. This continues to be focused on using our customer base for lead generation purposes and driving the return improvement in both our health and life businesses, customer life cycle value. As I said, we continue to personalize consumers' experiences, certainly linked to Better Rewards and then really focused at the evolution of Better Rewards. We are adding to the Better Rewards basket. And again, I'll talk a little bit to a little bit about when we look at the metrics of Better Rewards, but the basket of Better Rewards continues to evolve. And certainly, the way that we think about post encouraging interconnectedness of our ecosystem and driving ecosystem utilization, you will see play out into the fourth quarter of this calendar year. Commercial decision intelligence continues to track the way that we unlock promotional effectiveness. In addition, it controls and improve the way that we think about ringing for working capital and margin purposes. It was very active in the ranging exercise that we went into store of the future. wholesale innovation is really around supporting the TLC proposition and strengthening this as we chase more and more independent penetration with the TLC brand. And then enterprise acceleration, as I said, really focused at reducing the cost of dispense and also extensions of how we reimagine the way that we offer our clinic solutions. Moving on to Better Rewards. I think it's important just to remind everyone of the mechanics of the program. So the mechanics of the program were built off the learnings of extra rewards which was an instant discount program at point of sale, that was centered at our policyholder base. And obviously, the consequences from a retailing perspective that we saw in that program. So a base reward program that is collectively funded by participating vendors as well as the use of what is inefficient or inefficient benefit points and partnership funding from ourselves. So just repurposing some of the funding that was assigned to benefit points and paid out to partner associations directly into the Better Rewards basket to arrive at a base 10%. It's stackable in principle as a program. So it allows the principles of an additional 5% in the way that we stacked up the pharmacy boost and the Capitec Boost that encourages simple call to actions from consumers to increase their average level of discount. And those boosts open up other areas of funding in our ecosystem that drives specific commercial objectives. The Better Rewards program is designed to generate value immediately at point of sale, so not delayed gratification. And it's also built and centered around what is the most relevant healthcare basket in South Africa. The brands that were selected to be part of the Better Rewards program were selected as a function of their commoditized nature, the value of the brand participating and the importance of that brand and that product in the health basket of the South African consumer. If we look at the Better Rewards metrics, this to me is probably the most interesting slide. So if I try and do justice to explaining it. And on the left-hand side, we have total sales growth in value, total sales growth in volume and then total income margin. We then divide the pre-Better Rewards period, so the 1st of March, which is the beginning of our financial year to the 20th of October 2025. So that would have been an environment where we would have traded with the old Benefit point program. And then we show the 21st of October to the 19th of May, which is the period we reported to post year end, so across our financial year-end, effectively 6 months' worth of Better Rewards data and we showed the periods in comparison to 1 another. So I think the important thing firstly is from a total sales growth perspective and 8.3% in the prior Better Rewards period compared to 9.2% in the period post Better Rewards. Of course, the 9.2% is highly discounted. If you think about the contribution of Better Rewards brands to total front shop trade, it's significant. So in real terms, that number is much higher and in actual fact, better reflected in volume. Pharmacy at 11.9%, moving up to 12.9%, driven not only by GLP-1 mix, but also by the call to action, which is the pharmacy boost and the Better Rewards program attracting pharmacy volume and value, which isn't discounted because of the way that the program is stacked up, but improving the pharmacy revenue growth and in turn, driving share gains for ourselves. If we then break the front shop, the front shop going from 6.4% to 7.2%. Importantly, Better Rewards brands going from 6.1% in value growth to 11.8% in value growth. Obviously, the 11.8% is highly discounted. And if you look at that -- same line in volume. You see Better Rewards brands going from 5.7% in volume to 18.7% in volume under the program. So those are significant share gains for participating brands, which anchors the investment in the Better Rewards program. Non Better Rewards brands dropped from 3.9% in volume to 0.1%. Interesting, that is a relatively good performance and really driven by the frequency gains in shopping traffic that we're seeing, which I talked to in subsequent slides. And then most importantly is the total income margin. So 30.8% from the 1st of March to 20th of October, shifting up to 31.6% from the 21st of October to the 19th of May. Again, this talks to the sustainability of the mechanism of funding. If you think about what I described in how the Better Rewards program is stacked up in the overview, what you have in this environment is you have what is effectively a fully funded program as a function of vendor participation in the way that we reimagine use of what was being paid out under the BenefitPoint program and to participating partners. If we look at the next slide, that shows market share gains across Better Rewards. What this slide shows, as read by Nielsen is our market share gains in the months of June, July, August, September and October compared to the prior months, the same prior months, and you would typically see a trend of 0.3, 0.1, 0.2, 0.1, 0.2 -- that is what we traditionally see in market share gains as a function of us just growing slightly ahead of the market from a new space perspective. And this is across the total market, and this is across all franchise core categories. We then launched Better Rewards and you see the incremental percentage point gains go from 0.2 on average to 0.81, 0.91, 0.1 and 1.5. Effectively, what we are seeing is we are getting more shoppers coming to our environment, and we are taking more share of the markets that we play in. So when you think about that the 3 most important metrics of a disruptive launch such as Better Rewards, strong value growth, sales value growth, market share gains and value and volume and total income margin protected. So that talks to the sustainability of the design principles of the program and super encouraging, considering the evolution of the program that's held within bigly and what it potentially does to the retail machine across FY '27 and onwards. If we move on to the next slide. The next slide really demonstrates the relationship between frequency and average discount. As I've said previously, the most important metric or track is the average level of discount on the program that consumers are experiencing. The average level of discount does a few things for me. One is it talks around the penetration of boost that we build and the relevance of the boost to every single South African that engages with our program. So as you can see, when we started, so month 1, as denoted by the legend when we started, the average level of discount was 11.1%, it makes sense as a function of the base reward being 10% and low penetration into things like the pharmacy boost, the Capitec Boost and the cover boost. If you track that average level of discount across the months of the program up until the end of May, you see it gradually tick up from 11.1% to 11.4%, 11.6%, 12%, 12.2% and 12.3%. By implication, what that is meaning considering the basket has stayed relatively static is that you are seeing higher penetrations of the boosts and you're seeing higher average level of discounts. That means people are more engaging and they're certainly understanding the principles of stackability of the program. If you look at the 2 lines below, this really describes the halo effect of the Better Rewards program. What that talks about is the trips per shopper in a cumulative way across each of the months. So if you had to take the comparable base, which is the lighter green line, month 1, 2, 3, 4, 5 and 6, you would have seen the cumulative number of trips of an identified shopper, so in month 1, starting at 2.76 and by the end of month 6, almost 8 shops over the 6 months on average. What you're seeing on the Better Rewards program is that 7.94 shops moving up to 9.63, effectively almost 1.7 additional shops for everyone on our program, and we continue to see the jaws open between historically how people shop in the number of trips that people shopped versus what we're seeing are. I mean if you had to multiply that delta, extended, extrapolated over a full 12 months. and then multiply it by the number of benefit cardholders that we have or Better Rewards card holders that we have. We're potentially looking at anything north of 20 million additional trips from shoppers as a function of the Better Rewards program. And the reason for that relatively clear in the next slide, when we look at the value pass back to customers by boost type. This is effectively up until the 19th of May from the inception of the program. It is broken down by boost. But I think what is relevant is the total. So 761 million being passed back to give context to that of the Benefit Points program that was previously in existence over a 12-month period passed back 350 million. We anticipate certainly from a modeling perspective, we anticipate that number to be 1.45 billion and it looks like it's going to be slightly higher than that as a function of higher penetration of Better Rewards brands in the basket. One of the other elements that we've landed effectively through the retail machine and Bigley was the exciting launch of the Store of the Future concept. If you look at the Store of the Future concept and overview, I mean initially, what we wanted to do was we wanted to reimagine a store format to do justice to the purpose of the brand. I think we had changed the purpose of the brand. We felt the brand could extend from retail pharmacy into integrated healthcare provider. But certainly, our biggest asset, which was space was not reflective of that change. So it was a fundamental shift, and it is a fundamental shift in how healthcare is delivered across all dimensions of retail, from store design to product assortment to tech and process flow. And it did influence the ways of working. So I think underneath or behind the format change really lies the difference in operating in the ways of working. I think -- when you think about the process that we ran, we essentially described to a multifunctional team that existed in terms of consultants, designers, internal SMEs and we created a space that a justice to the purpose of the brand centered in healthcare service delivery. The way that we think about the brand and certainly what we believe our defensive mode to be is around healthcare services traffic and we needed an integrated and seamless way to manage and create efficiencies in health care services traffic, knowing that the rest of our retail front shop would be sold to the traffic that engaged in how we delivered healthcare. So the design principles, if we talk about this concept of a tea, the design principles are very clear. The tea really demonstrates the focus of the store of the future design. Across the top bar of the tea our integrated health care services, and that will consistently remain across all of our store spaces, dispensary clinic and cover. I think importantly -- and we talk a little bit about the metrics. But as we thought about integrated healthcare services, we actually reimagined the way that we did clinic cover and our dispensary. I think each of those elements would have done -- would have been done in silos traditionally very different across the industry and across the market. But when integrated lifting and giving opportunity for interdependencies and driving script traffic from clinic to dispensary and driving kind of data points from dispensary into a financial adviser space to allow cover to be sold becomes an interesting concept to try and unpack and that's exactly how we thought about the top cross bar of the tea and the way that we reimagine the ability to do clinic to do dispensary and to do cover, down the dryer or the center piece of the tea, we imagine the hub. And I think it's important to explain the principles of the hub. What the hub is intended to do is it's intended to -- using intelligent Qube management system, it's intended to reduce the time of care delivery of anyone who engages in healthcare services and allow the practitioners, be it clinic sisters, phlebotomists, pharmacists, post basic qualified resources or financial advisers to operate at the top of their scope and simply take the administrative burden, which comes at a significant cost away from the clinicians and the expensive resources in store. So the hub does that. It takes the admin away. It manages the routine using intelligent queue management into the healthcare services part of the business, and it integrates Better Rewards into the workflow of each of their customers and the patients. And then front shop retail gets slightly lifted and it gets -- and the categories get premiumized, the categories that we want to champion or play strongly in, potentially get experience-led retailing. So the concept of hubs that allow consultants to use experiences to retail on the floor, depending on store sizes, they get popped into retail spaces to increase the average revenue per square meter. So interestingly enough, because of the focus on the healthcare element of the Store of the Future design and metrically, we've been measuring the Merus Arch Health Hub closely. One of the things that has always been important is effectively the time to dispense. So as a baseline and the time motion of study that was done by Big. On average, it takes 17 minutes to service a pharmacy customer from when they enter the back of the queue to when the dispensing process is concluded. What this slide demonstrates is this slide demonstrates that across each of the elements of engagement using the health hub and using a differentiated operating model in pharmacy, that 17-minute time has been reduced to just over 5 minutes. If you think about the cost of dispense in our business, we spent just over ZAR 2 billion servicing pharmacy, and that cost is directionally or in a very linear way linked to time. So if you think about the principle of eliminating the admin, allowing the pharmacist to practice at the top of their scope, what you're seeing metrically is the achievement of that. So moving the 17 minutes down to 5 minutes. The same is true if you think about the workflow in clinic. So if we look at the clinic metrics and the clinic metrics, the average consultation time is at 16 minutes. Generally, across the store environment, our average consultation time is at 27 minutes. So not only do we have a lifted, more dignified clinic experience with better health outcomes. We're also doing it in a short term amount of time that indirectly increases the capacity of the clinic, which is delivered using slotted based -- which is delivered using site-based bookings. If we think about how that rolls into property strategy and our expansion from the 1st of August from a beneficial occupation date from the 1st of August, all stores get the store of the future design format. As we've said previously, this isn't a flagship store. This isn't a concept store. This is a reimagined way of delivering healthcare services. And because of that, it rolls out into any store with a BO date post the 1st of August. So if you think about the property expansion strategy as a function of how that bleeds into it, this is how we've delivered property across the FY '26 year. So 33 stores added with just over 34,000 square meters of space. I think more importantly is the trajectory of that into FY '27, FY '28 and then the pipeline. I do talk about the operating model post the property expansion strategy. But I think what's important is the interdependencies between store of the future format and the property expansion strategy, what the store of the future format does as we track the incremental economics of that format against a base case of store. I think it potentially opens up the opportunity to fast forward how we revamp the estate to bring to life the store in the future format, especially with the opportunities in pharmacy and clinic. And that needs to be resourced in a specific way and the real estate to achieve that over a shorter period than the normal revamp cycle. So in addition to the stores that we are to open, there's going to be a significant amount of stores that need to be revamped as we think about store of the future format. Be it as it may, if we look at FY '27, we have 8 stores already training. We have 19 stores committed to and that are planned to open, and we have a further 7 under negotiation. In total, 34 stores that -- that are effectively certain for FY 2027, with many more in the pipeline. FY '28, we've already got 16 stores committed. And then ultimately 18 in the pipeline as a function of us assessing markets in South Africa, which we are underrepresented in or under invested in and now unlocking opportunities in that pipeline to -- importance of property in the way that we think about being as close to the consumer as we can be. If we move into the operating model change, and I spoke about it briefly. The operating model change is something that I feel is very important to deliver on our ambitions that we've described. It really is a redefinition of the operating model of the business. I think what was inherited was a founder-led cross-functional leadership structure. Obviously, from a succession perspective, that doesn't allow clear lines of accountability. And what the opco model does is it ensures appropriate and sustainable structure to realize our strategy, but more importantly, to drive those clear lines of accountability. It also adapts and establishes new ways of working with Exbigly labs. One of the most interesting things that we've seen, lifting or certainly allowing expect labs to control the elements that I described previously is the pace at which an innovation unit like that moves and how it forces the rest of the business to adapt. So part of the reorganization specifically is the way that we think about the traditional IT or CIO structure. That is the best example of ways of working needed to change. because ultimately, IT needs to empower how we think about the tech developments in Expedilabs. As a function of this reorganization, it's classified as a large-scale restructuring and as such, it is a deemed a Section 189A process. We anticipate -- after initial engagements, we anticipate that it will be concluded by the first half of FY '27. Currently, 545 employees affected across the verticals, which I'll show shortly. But they really are reorganized central verticals to ensure clear lines of accountability and importantly, an additional 200 jobs will be created in areas of under investments, specifically in marketing and in IT. If we look at the diagram to illustrate this change best, what it does do is it narrows the span of control, like the current span of control that is reporting into me is far too wide for it to be affected, narrows the span of control. It creates clear lines of accountability, specifically in areas that lacked it, so in commercial and how that stacks up with the commercial intelligence abilities in Bigley, also in the CMO space, in marketing and how we think about positioning the brand and evolving the brand into a brand that allows us to do justice to our purpose and build out a health care ecosystem. Certainly investing in real estate under real estate Director and building out 2 verticals, which is new and revamps, considering we've landed on store of the future. And then as I said, the importance of the CRO and the way that we shape up that IT vertical to enable and empower and move at the pace of Xbigly labs as a function of how that was restructured. I'm now going to hand over to Chris to talk about our wholesale trading performance.

Thanks, Rui. Good morning, everyone. Thanks for the opportunity to present. Firstly, I want to thank God for his grace and his hand of blessing on our business. Without him, none of this would be possible. I want to thank and congratulate my whole team on their dedication and continued focus on driving sales, exceeding customer expectations on service and controlling costs. Results like these are only possible through a team that is passionate about excellence consistency and continual improvement. Our customer-centric approach forms the basis of everything we do, and we see these efforts being reflected in the numbers that will be shared. . This morning, I will take you through some of the details surrounding the top line revenue numbers achieved by CJ distribution during the 12 months of the 2026 financial year. I will be focusing on the main business customer channels driving the revenue growth that we are seeing. As mentioned by Julia earlier, wholesale revenue has increased by 13.1% to ZAR 34.04 billion. Our total income has declined from 8.2% to 7.2%. This is due to a few factors, of which the biggest 1 is a 15% decline in stockholding with obviously the accompanying loss in terms. If we turn to Slide 37, the wholesale revenue slide. The table illustrates wholesale customer growth by channel with corresponding revenue growth. If we turn our focus to the left-hand side of the table, we can see Dis-Chem pharmacies, store growth from 285 to 316 stores. Revenue growth from ZAR 23.9 billion to ZAR 27.8 billion, which equates to a 16% growth in revenue from Dis-Chem pharmacies. Support from Dis-Chem stores grew from 86.9% to 89.1%. Growth in support can be attributed to additional vendors, a warehouse in the new longer facility and the increase in Better Rewards products. We look at the middle, TLC franchisee growth from 240 to 280 stores, which equates to a 16.7% growth in franchisee numbers. Revenue from TLC franchisees grew from ZAR 2.5 billion to ZAR 2.9 billion, which equates to a 16.4% growth in revenue. Support from TLC franchisees declined slightly from 81% to 80% due to the new franchisees that take time to mature to improve purchase compliance. We look at the right, independent stores grew from 1,264 to 1,325 stores, which equates to a 4.8% growth in independent customers. Revenue growth from independent customers grew from ZAR 3.1 billion to ZAR 3.3 billion. which equates to a 7.2% growth in revenue from independent customers. Support from independent customers grew from 30% to 31.1%. We are pleased with the 11.3% growth in revenue from our external customers. Our independent customers grew by 4.8%. However, our revenue growth in this customer group increased by 7.2%. This gives evidence to our sales initiatives and high service delivery levels are bearing fruit as existing customers continue to move more of their spend to CJ. We are also incredibly proud to see the support from TLC customers maintaining around the 80%. Support numbers this high are comparable to the Dis-Chem support numbers despite the fact that the -- stores are independently owned franchise stores. We turn to Slide 38 shows the Local Choice retail performance. As can be seen, the group's retail revenue has increased to ZAR 5.03 billion for the 12 months of the 2026 financial year. This is a 16.7% growth in the group's retail revenue. The TLC customer revenue growth is partly driven by front shop support and ranging that we, as a supply chain offers them. We currently have 284 TLC franchise stores. Turn to Slide 39. The ex big labs involvement, ExpiglyLabs, has established the wholesale division or Trip as they refer to it, which supports us in driving a new set of capabilities. with specific focus on the local choice pharmacy franchise group. Outcomes we were working on together includes increasing the loyalty base of customers and improving their reward value, improved profitability of the franchisees and consistent growth of a strong TLC network through deep and consistent support levels, resulting in an ever-increasing defendable and scalable network. We intend doing this collectively with x bigly Labs by building a life cycle engine using analytics-driven office to reward loyal customer behavior, equipping the owners with operating playbooks and leveraging our corporate scale to support purchasing and data-led ranging, pricing and promotions, catalyzing the network growth with data-led site selections and co-created road maps. This supports the franchisees in executing the entrepreneurial spirit by being able to open up and own more stores. We now turn to Slide 40. XBegley Labs is enabling the team with the capabilities to create analytics-driven offers, increased clinic use and script capture functionality through virtual doctors' consultations and thereby offering a holistic health management system and retaining the patient within the ecosystem, providing bespoke growth insights to improve specific areas in the business and create the ability to manage more stores. enhance the loyalty integration with the goal of improving access to better health outcomes. We also facilitate network scale procurement, they provide an operating toolkit for HR, finance and operations to create efficiencies and optimize manual processes to free up time for the owner of pharmacists to spend more time with the patient and thereby becoming the trusted neighborhood pharmacy. They also assist with digital and point-of-sale infrastructure to optimize the current digital and marketing infrastructure to improve sales growth. The benefits from these enablers will drive higher margin per script and basket, provide better access to care, reduce the cost to serve and improve store economics. Other benefits will include creating a trusted local health partner for Dis-Chem in the market, a sense of belonging with the freedom of being an independent pharmacy owner, improving confidence in the local. I'll now hand back to Rui for the outlook.

Thank you, Chris. If we just look at the outlook, I think the important thing is the trading post year-end from the 1st of March to the 19th of May. strong group revenue performance of 19%, retail revenue growth of 8.8%, slightly softer pharmacy number as a function of the GLP-1 mix normalizing, continued performance of Franco brands and the continued relationship between Better Rewards and non-Better Rewards brands. 8 new stores opened, as I described in the property slide, posed to end and wholesale revenue to external customers, up 10.4%. . Most importantly, the group's total income margin increased to 32.0%. So that's north of what we disclosed across the Better Rewards period over 6 months in the Better Rewards, just showing the improvement of the total income margin as we have more and more Better Rewards traction. And really, that's the relationship of a fully funded Better Rewards program considering the increased penetration of Better Rewards brands. The revenue growth, market share gains and improved total income margin really do highlight the sustainability of the Better Rewards programs. and really the importance of this program in driving positive operating leverage and strong future earnings growth that we anticipate for FY '27. We do expect the consumer to remain constrained due to the current economic environment and the increasing fuel prices, and we do anticipate high competition from competitors. Following the establishment of expect labs, there is a shift and continues to be a shift to data-led commercial decision-making that places the customer at the center of our ecosystem experience. linked to our strategic areas of focus, the following will be prioritized into FY '27. The launch of the Store of the Future design, which integrates our healthcare services into a single cohesive customer and patient experience will be expanded. The new format already proving to reduce the cost to serve, maximize flow efficiency and generate a higher return per square meter and shifting integrated healthcare delivery from secondary service to the very core of our store intrinsic with the legacy of the brand. Continued acceleration in identification of space with new store openings. We've been very purposeful about how we think about the real estate structure and vertical and the importance of revamps, Store of the Future and space in our strategy. 34 retail pharmacy stores are planned for the year, and as I said, 8 already trading and all stores that are beneficial occupation from the 1st of August will be executed under the new store of the future design principles. We have a restructured operating model focused on realizing -- structure that really allows for a more cohesive working relationship between what is the traditional business and expect labs, a tight espanontrol for myself and an important shift from a found less cross-functional leadership to a structure that creates very clear lines of accountability. We continue to focus on staffing framework 2.0 into the retail business, the relationship between like-for-like retail payroll cost growth and like-for-like revenue growth with improving total income really is what drives enhanced -- the enhanced return profile and strong profitability for FY '27, we continue to reimagine online retailing and healthcare access, starting with the revamp of our digital channels and the launch of our new app in the month of June. And then always in continued focus on people and culture. Employees will and are our priority -- will remain an higher priority customer, and we have a commitment to improve their health, enabling them to access differentiated rewards really creating 20,000 -- north of 20,000 purpose aligned ambassadors to insist in educating the consumers on the stackability of the reward program. Before I hand over to questions, I would like to thank the team. I would like to thank every green heart the employee who works in the organization. This has been what we do notice is a very successful year. And not only because we've launched market disrupting initiatives, but we have also implemented a significant amount of change, and we do realize and acknowledge that, that is difficult, but we appreciate how the group has received this everyone has embraced the change and the renewed energy, the improved culture and the focus on delivering the ambitions of the group and the purpose of the brand. I'll now take questions in relation to the presentation.

Good morning to everyone online, and thank you for all your questions. we have grouped them under different topics, and we'll start with Better Rewards. Our first question, can you comment on the regulatory risks associated with the pharmacy boost? Are you considering any changes to the program as a result?

So in the design of Better Rewards, the regulatory risk associated with the pharmacy boost was considered fundamentally, and there's lots of literature on it, but fundamentally what the regulation precludes you from doing is discounting medicine as a function of it being SAP-driven, what the program does is it encourages the participation on Front shop Better Rewards basket as a function of engaging in the pharmacy. So it achieves 2 things. . One, it improves the health outcomes as a function of driving primary care foot traffic; and two, it reduces the cost of -- or opens up value in the consumer wallet, ultimately for them to invest in the cost of care. The way that we have designed the Better Rewards program, it is entrenched in stackability. We believe that the program does not contribute any regulations. It does only 1 thing, which is to increase value in the South African consumer wallet. And we studied it intensely as prior to launching the program. I think importantly, principally, the program has got also a lot of flexibility in the way that it's been designed because of the stackability elements and what the ecosystem has is it's got many funding pockets to facilitate the stackability and the nature of the Better Rewards program. As I said in the presentation, the important thing for me is the increase -- or the average level of discount being passed back to consumers and the way that we think about many different boosts and increasing that to drive market share gains for participating vendors and foot traffic from a customer, policyholder and patient spectrum.

How sustainable is the Better Rewards level of discounting?

So we believe it's sustainable. I mean, fundamentally, we are a big funder of that in the way that we've opened up pockets of funding from ecosystem opportunities. If you think about cover penetrating into the average level of discount, if you think about pharmacy penetrating into average level of discount. Those are all in our control, and part of the big funding piece of the base reward is actually just looking and repurposing what was our old benefit point spend and some of the rebates that we paid to partners that have been, I suppose, centered in a Better Rewards basket. So from a funding perspective, we think it's sustainable. Importantly, the vendors that are participating, also seeing differentiated shares. One of the principles that is important to acknowledge is that a small level of the just over 12% that currently is being experienced by consumers is being funded by vendors, but they are seeing the value upside. Again, I spoke about an 18% increase in volume for vendors. They are seeing the upside associated with an always on variable promotional deal that is Better Rewards that ties into that 12.5% discount level. So from a vendor perspective, it is very sustainable, and we believe in the way that it's designed and the principles of stackability and the funding options and pockets of funding that we have in the ecosystem, it's sustainable and it continue to evolve, and that average level of discount will continue to tick up.

Can you explain the margin dynamics of Better Rewards?

I can. I mean we discussed it extensively in the presentation. I mean, ultimately, if you think about the recoveris, so what you have is you have -- and maybe I'll do it in an example. Under our old program, if you sold something at ZAR 100 that thing today would have been sold at, let's call it, ZAR 88, representing the 12% level of discount. If you think about what happens at a total income level, that ZAR 100 would have generated ZAR 30. In our world, that ZAR 100 is generating ZAR 29 and that ZAR 1 being the pharmacy boost that we are funding. From a Capitec perspective, it's being recovered. And the base reward is either being funded from how we reprioritize spend that would have gone to the benefit reward program or the recovery that we have from vendors. So effectively, what you have is you have a relationship from a total income margin perspective of ZAR 30 on a ZAR 100. And in the scenario post Better Rewards 1 that is a ZAR 29 on ZAR 88. That's why you see the improvement in total income margin. Fundamentally, what you're also starting to see is very strong volume share gains and market share wins, but also as a function of the additional foot traffic, you're starting to see strong value -- revenue value as well.

How many items are there in Better Rewards now from when you started? And how many more items are planned or expected for the next 12 months?

So I mean that to some degree, commercially is sensitive. I mean I can tell you what we started on. We started on 140 brands. We had 180 brands. The store in its entirety will not be on better rewards, there's an appropriate tension that requires us or that is required to ensure that vendors get share gains in our space. We will add to the basket where it makes sense in nuanced categories, and you will see that play out during the course of this financial year or certainly due during the course of the calendar year in addition to some of the boots that we bring to market. But the basket is in a good place. And currently, there are just north of 180 brands in the basket from the 140 that we started. .

Where does the supplier funding benefit come through? Is it other income or reflected in the lower cost of sales figure?

It will be a recovery on cost of sales, but I mean, ultimately, it affects the total income margin.

As your data show that Capitec users are more likely to use Dis-Chem now due to the partnership.

So Capitec have a bigger market share in houses than they did previously. So simply speaking, more people are taking out Capitec cards as and when they are paying at our point of sale. And likewise, we have a bigger market share base of the Capitec pharmacy spend than we used to previously. So the partnership is working well for both partners. .

And then the last question on Better Rewards, how sustainable is the program? Apparently, the competitors are asking vendors for similar terms, which they can't afford. Do you see a risk of vendors exiting the program once the contractual term ends.

So I mean, as I described, we think it's very sustainable. I think 1 of the important things, and I say this again is that the vendor funding that we are requesting is co-funded with many of the items on our side, and if the average level of discount increases, which is the intention of the program, specifically as we think about the additional boosts, vendors are getting volume growth associated with a bridge level of discount north of 12%, and that will continue to grow with an investment into the program of something that is far, far lower. So that sustainability or that delta between what a -- what a shareholder Investor Shield. What a vendor's funding versus what the program is unlocking for discounts for consumers in a very value-conscious environment means that I think the sustainability of the program is intact. Many of the vendors have already specifically some of the bigger vendors were already renewed for another 15 months from today. And so we do believe it's sustainable. We also have many vendors asking to join the program, which we will consider selectively depending on the composition of the basket.

Moving over to some number questions. What was the selling price inflation?

So the selling price inflation, it's an interesting question because obviously, it changes significantly on the back of the launch of Better Rewards. So I mean, considering that we have Better Rewards entrenched in our numbers into FY '27. I think it's important to distinguish the selling pricing to pre Better Rewards. Selling price inflation in relation to front shop items was just shy of 1%, what you see there is a significant contribution of Better Rewards brands with negative price inflation as a function of the level of discount in relation to volume. So almost 40% of total for shop sales are now going through Better Rewards. And then you see the non-Better Rewards price inflation at around 5%. So that gives you the blended front shop sell price inflation of 1, you have much higher price inflation in pharmacy, and that's really a function of the GLP-1 mix, which is growing strongly, but obviously maturing as a function of the GLP-1 numbers being in our base. that price inflation is around 8%.

What will drive further expansion in the total income margin?

So 1 will be scale. I think 1 of the other elements that we've spoken about that has been successfully deployed in the last quarter of the year is the promotional efficiency out of commercial excellence that is coming from bigly, we've become a lot better at executing promotions in terms of how we think about return. So loss-leading promotions, understanding, buying forward patterns A lot of the data-led type of retailing that is coming out of commercial intelligence in Begley. So if you think about the 3 areas, scale, promotional effectiveness in terms of return on funding. And then the last is really tied to store of the future and the way that we think about categorization. As we start to use data to categorize stock better in stores, we generate higher margins and better working capital metrics.

Why did gross profit margin and other income margin within wholesale reduce in the year?

I think both Julie and Chris described that. It's a very competitive market. And we also had the dynamic of high sales growth and lower stock holding in wholesale. I mean so that will naturally correct. We had appropriate stock levels in wholesale, again, that dynamic was a facilitation of the Better Rewards program. When you launch a program as disruptive is that the last thing you can afford to do is be out of stock, so there was a huge buy forward in for the Better Rewards program that unlocked towards the back end of the year. And then you get that relationship between sales and stock purchases. Obviously, a big part of the total income margin in wholesale is linked to rebates associated with purchases. And as that normalizes and as you settle that, there's going to be an impact on margin with the benefit being cash flow, I anticipate that, that incrementally increases into FY '27.

Given the nonrecurring framing throughout the presentation is the correct earnings base for FY '2027 the 151.6 cents per share, meaning does management intend to grow off that base.

So to me, the better way to explain it is to break down the 2 buckets. So the ZAR 115 million that we speak about as nonrecurring and is legitimately nonrecurring. I mean, a big portion of that was benefit point being used as we retired the BenefitPoint program. So if you think about that, that would have compromised margin directly. We also had the launch marketing costs of Better Rewards, which obviously, from a budgeting perspective, no longer exist. So that element plus the property gain, which was north of ZAR 105 million, ZAR 103 million, so ZAR 218 million or ZAR 220 million retimately nonrecurring expenses. And then you've got the ZAR 330 million, which is an investment in ecosystem. The way we think about that is that, that investment would generate positive returns into FY '27. Of course, we've called it investment in ecosystem in this financial year because that investment happened across the entirety of the year with the benefits only really unlocking in the last quarter. What I will say principally is that it's very difficult to track internal disruption and what bigly is effectively internal disruption. I guess we find ourselves in a very, very competitive retail market. And you either stay safe. and you're become irrelevant or you disrupt internally to stay relevant. And I think what the year represents is exactly that as a function of what we've invested in bigly.

Moving to expiry labs questions. Why do you say the ZAR 330 million and the ZAR 115 million investment in bigly or Better Rewards is nonrecurring as without better rewards, retail volumes are unlikely to have been achieved.

I mean I'll just explain that. The ZAR 115 million was effectively benefit points that were part of the old program cycling through our income statement. So they legitimately don't recur because they don't exist to recur. That program has been retired. So they are legitimately nonrecurring expenses. And the way that we frame bigly as I said, is we expect net positive incremental returns off that base. That invested base of ZAR 330 million did not have the opportunity to generate returns as a function of those returns only coming towards the final quarter of the calendar year -- of the financial year. .

Could you provide more detail on the key areas of investment and how we should think about the split between operating expenditure and capitalized development costs.

So the way that the innovation unit works, the majority of that expenditure is in people. We have ingested resources and capabilities across the trials that I described, to bring to life some of the return-enhancing work parcels that sits across those 5 clubs. So the majority of that probably 70% of the total investment will be through the income statement, which is indicative of what happened this year.

Well, the e-commerce launch come with additional costs, i.e., last mile costs.

So e-commerce doesn't come with additional costs when you look at the last mile costs. Obviously, last mile costs are variable, and there's a recovery from customer on last mile. I think the ambitions that we have around e-com over a 5-year period need to be significant. I think in South African retail today, if you don't believe that the penetration of digital into your total sales number is not anything north of 30% over a 5-year period, you would be wrong. And the investment that needs to be made to establish yourself as someone who can cater to that level of penetration in a way that doesn't compromise the economics that you see from your physical space is essentially what we're going through at the moment. .

And we have 1 question on baby. Can you explain the softness in the baby market?

Yes. I think -- I mean I think it's quite evident considering what is happening in the baby market. I put it down to a few things. I think if you look at the average birth rates in South Africa, there has been a consistent decline over the last 4 years. In addition, the higher margin, call it, subcategories of baby have effectively been disrupted in physical retail. I mean many of those items are bought in the digital space today. So you end up with a very commoditized baby market in physical retail. Now when you dedicate space to commoditized items in South Africa retail, it's unlikely to work. And that's the pressure that you're seeing in the bobemarket. I think that is supported by some of the volume growth we're seeing in baby off the back of Better Rewards. We're seeing 30% volume growth in baby off the back of Better Rewards, which is indicative of how commoditized that category really is when you think about paper and food.

Working capital and CapEx question, are you able to provide guidance on the CapEx required to revamp the stores to the store of the future and the amount needed for the expansion. And with this expansion, does CJ have enough capacity to service this.

I mean so there are probably 11 questions in that one. So I mean let me try and describe it this way. I think one of the pieces of work that we are intimately involved in is understanding the incremental return profile of the store of the future format. We obviously have an expectation of what that is. Once that is tested, that gives us an opportunity to ensure that we deploy capital appropriately. The way that we think about that capital deployment is really around how do we bring forward what would typically be a revamp cycle. So when you think about a revamped cycle, it's not to say that you wouldn't have revamped in any event, it's the cost of bringing forward that revamp. And those 2 metrics need to align and they need to be, in theory, greater than your weighted average cost of capital for it to make sense to shareholders. So that is the piece of work that we are doing today. When we are comfortable with that, we will come to market with our view on how quickly we intend revamp -- being the state. A big portion of that is also the way that we stack up the real estate vertical in the opco model change that I spoke about and the consideration of what would be a shortened revamp cycle requires a huge amount of resources focused on revamps. In terms of CJ having the capacity, I think -- they definitely have the capacity. I mean, we've invested for longer-term growth in the way that we think about our facilities and the geographical spread of our facility. So I feel quite comfortable with that.

Then a couple of questions on the change in the operating model. What are the expected costs to be incurred as a result of the change in the operating model?

So not incrementally huge. I think we do talk about an additional 200 roles. Obviously, those 200 roles won't be fulfilled at once. That will come in time as those teams get established. I mean we were looking at future state. So I mean, that will be well controlled, well managed. I think the group has proven the discipline of cost management in the way that we think about our retail segment and the way we've implemented staffing framework 1.0 and now 2.0, I think the same disciplines will be handled in the way that we think about the operating model change.

What is the strategy to empower and repurpose employees affected by the Section 189 to retain the intellectual property they may be holding.

I mean so whether -- I think about the 189, unfortunately, the 189 is quite a blunt instrument to facilitate what is -- what is very much a growth story. I mean, the IP that we have in the organization is actually in the way that the organization is structured is actually relatively inefficient. So the organizational structures don't allow that IP to come to market. and what the reorganization intends to do is ensure that the verticals that exist and the way that people are moved between the verticals, allow those people to be the best versions of themselves. the best version of the skill set that they have and ultimately deliver the best value for the company. If you think about what the outcome of the reorganization is, and as I said, we are looking to add an additional 20 -- I think it's 203 roles to the 545 affected. So there's 700 roles. So if you think about the nature of what we intend to do, I mean it would be to relocate those 545 individuals into the verticals that makes sense. So I mean, that, in theory, and practically will solve any sort of risk around IP leakage.

And then our final question. How do you see Xbigly in the next 3 to 5 years?

I think -- I mean, conceptually, I think I described it, I think if you have to ask yourself the honest question around what is happening in South African retail and you look at the grocers and specifically the largest grocer. You have to ask yourself whether you stay safe. And I mean if -- but we would have underinvested in the risk associated with the future. So as I said, you either stay safe and you become irrelevant over time, and there's lots of examples of South African retail that's happened or you go through a process of internal disruption to stay relevant and to ultimately benefit from that. Why I say that is because the lift and shift on exiglylabs was exactly that has forced an internal disruption. So bigly as a function of the things that it controls and the way that I've described it, has controlled things that have over time been underinvested in, but it's forced us as an organization to change the ways of working, and it's effectively led internal disruption which is tough, as I said, but importantly, for the sustainability of the business and the relevance of the business in the way that retail stacks up over the next 3 to 5 years.

Thank you for dialing in. This brings us to the end of the results presentation.