Greggs plc (GRG) Earnings Call Transcript & Summary

Good morning, and thank you for taking the time to join us today for the Greggs' 2022 Preliminary Results Presentation. I have met a number of you here today. So for me, it's nice to see some familiar faces. But for those I haven't yet, I am Roisin Currie. So I took over the baton from Roger Whiteside as Chief Executive of Greggs in May last year at the AGM. And it's great to be here today presenting my first full set of results. I continue to be supported by a capable high-performing team driving forward at pace, including Mr. Hutton here. The agenda today will be in the usual format. So I will outline the results and I say the RNS. And I will then hand over to Richard to take us through the financial performance. I will then provide an operational and strategic review and finish with our current trading and outlook for the year. So in terms of the overview and the results we've announced today, really pleased to announce our strong financial performance in 2022 and good progress on our strategic priorities. As you can see on the slide, total sales are up 23%, and that is 17.8% on a like-for-like growth basis. That is a whopping GBP 1.5 billion of sales for Greggs. Pretax profits are slightly ahead of 2021, and that's a great result given all the support that's still in place in 2021. And Richard will talk about that more in terms of those moving dynamics within his section. And then I'm pleased to announce a final dividend of 44p for '22, bringing the total ordinary dividend per share to 59p. We also really delighted to announce that we will be sharing GBP 16.6 million of profit with our colleagues at the end of March. So our colleagues will be finding out today what that means for each of them, and then it will be in the pay packet at the end of March. In terms of the update on our strategic progress, we remain very positive with regards to our shop estate. We opened a record number of shops for Greggs last year, that was 147 net new shops, and that gave us 2,328 shops trading at the end of the year, continuing to progress towards the potential that we see for significantly more than 3,000 shops in the U.K. We're also making good progress in developing new channels and the evening daypart, and we remain confident in extending our trading areas. We delivered our target to have more than 500 shops trading to 8 p.m. or beyond last year. In addition, we now have 1,270 shops that offer delivery to our customers. And it's also great to be able to share that our brand health and our market share is an all-time high, and we've had strong growth in the use of the Greggs App, with more customers than ever scanning to get their loyalty benefits. And very importantly, it's great to be able to update that our ESG agenda is progressing well in line with our pledge commitments. So on that note, I will hand over to Richard for an overview of our financial performance.

Thank you, Roisin. So first off, on Slide 5, you see the overview of income and expenditure. There's quite a lot going on below the surface here, as Roisin hinted. So I will dig into this in a few slides time and show you the moving parts. So I'll also put it in the context of 2019 as well because I think it's helpful to look back to that sort of pre-pandemic level and see how the ratios have moved. But yes, top line profit before tax -- top line result is GBP 148.3 million of PBT. And you can see that, that translates through to earnings per share, slightly more strongly due to the tax allowances that were available in the year. And I'll come on to that in a moment. So that's the headline results. If we just have a look at first the sales, this is the 1-year like-for-like, having gone through the cycle of 3-year, 2-year, all sorts of numbers over the last few years to try and unpick it. We're back to a standard 1-year comp again now. You can see it was still very affected this time last year by the comparison with the lockdown period, but really normalized from April onwards as we got past that point. We had a pretty good run through June, July, and then actually that continued in an underlying basis through August and September. But in August, we're comparing with the famous staycation effect of the year before. And then in September, of course, we had to close for a day for -- out of respect for the funeral of Her Majesty The Queen. So that took about 3% out of the September number. If you sort of added those factors back in, you'd have seen a very consistent performance through that period. It steps up in October, partly because we put through a further price increase at that point. And then through November onwards, you start to get into the period that compared with the sort of Omicron-affected comp, which we feel we still felt going into the start of this year as well. December reflects the Christmas comparative. It was a particularly good Christmas trading pattern for retailers this year the way Christmas day fell, so we shouldn't read too much into that little spike. But altogether, I think if you'd offered me that at the start of the year, I've been very happy. And we've started this year well as well. So a good track record through in terms of like-for-likes. Of course, everything I've mentioned there is being sort of external factors, and we are trying to drive the like-for-like ourselves as well. So we've been trying to work out how to kind of tell that story really in terms of the growth drivers we've been describing to you. So we think this chart helps. So I'm now on Slide 7. There are two different axis here, so let me treat this with care. So first off, I'm going to talk about the bars, which relates to the left-hand axis. And they describe the proportion of our daily sales, which are now coming through either the evening daypart or through the delivery channel. And there's an overlap between the two, which is the green bit in the middle, which is relatively modest at the moment. So if you start with the blue bars, you can see that the proportion of sales coming in the evening, which is defined as post 4:00 p.m., has been steadily increasing quarter-by-quarter throughout the year. Now partly, that's a post-pandemic behavior. So people returning to the walk-in market, particularly at that time of day, but progressively through the year as we've extended shop trading hours have started to market more heavily the availability of Greggs App. That sort of time of day, you can see that, that's also been a contributor. The delivery market has gone through a big reset and normalized as people have come back to be an out-of-home again. So we've seen that absolutely in common with the rest of the market. And we know from talking with Just Eat that that's consistent with what other food-to-go brands have seen. So by the end of the year, we think it's sort of steadied out in Q4 to be about 5% of sales are now through the delivery channel. So I think that's the base we now build from. And as Roisin will talk later, that we still see there's plenty of opportunity ahead. And particularly that interface between delivery and the evening, which is the little green bit in the middle, it's very, very modest at the moment, but we do think that's a big opportunity if we can persuade people that Greggs is a business that they would shop through delivery in that early evening daypart. So I think some positive signs there, particularly in the evening. The red line is really interesting. So the red line reads to gets the right axis. It's the proportion of transactions in Greggs shops that involve a customer scanning the app. Now they would scan the app either to clock their loyalty points or because they've used click and collect to preorder and guarantee availability. And you can see how that was progressing through the year as we got more people downloading the app, and then becoming active customers, but with a real step up in Q4 when we really upped the marketing support for that. That's now just over 8% of customers scanning the app as they transact with us. And that's really important in two ways. Firstly, by doing so, they're engaging in the loyalty program, which effectively gives them a free product for every time they buy. And the evidence is that if they do that, they will come more often. So it's driving frequency of visit. And then the second, more long-term benefit of that, then if they're doing so, then they're recording their behavior with us. And we're able to tailor our offers to them in the future and spot the gaps in their buying, which is the CRM aspect of the digital loyalty program. So I think a really encouraging trend in terms of Greggs App. And we put on a different access because, of course, it overlaps with the other things. Those transactions could well be coming through in our evening sales already. So some positive signs on the growth drivers. If we bring it back to profit now on Slide 8. We get into some of the moving parts now. So on this slide, although I've skipped 2020 being the pandemic year, I've given you 2019 as a comparative as well so that you can see how the ratios progressed over time. Inflation is a big factor here. So if we start with gross margin, that's where you've seen the majority of the cost inflation in 2022 because that's where food inflation lands. And food inflation has been in the mid-teens at a time when our own price recovery has been around 8% in 2022. So there's an under-recovery of food cost inflation in gross margin, but then you see the opposite of that when you get to distribution and selling costs where the key components there are wage costs and occupancy cost of shops. Now rents have been reducing as a proportion of our overall sales. And wage costs in the -- certainly in 2022, were inflating less than the level of price recovery. So you see this sort of reversing of that factor in 2022. And then if you look at 2021, you see the benefit that Roisin referred to earlier, which is the business rates relief. So business rates in 2021 were some GBP 50 million lighter than they've been in the past year when they've been back to full level. So you can see the impact that's had. On the admin expenses line, it's very much a case of operational leverage as we grow the business faster than the support costs. And then in finance expenses, there's the overall sort of benefit there of reducing finance costs as we get more interest on the cash deposits that we've been carrying into the investment program. So overall, the margin happens to be back where it was in 2019. But I think under -- that sort of belies actually quite a strong performance when you consider how much inflation has had to go through the top line over that period. And you can see that in the return on capital employed, which is the more meaningful metric, actually. And it's the thing that we target over time, and we are incentivized to drive under the long-term incentive program. So a return on capital employed of 21% is a very healthy number and compares favorably with where we were pre-pandemic. Moving on to cost inflation then on Slide 9. This is where all the action has been. I'll walk you around it. If we start with top left with energy, we had a great forward contract that we entered 2 years ago, which gave us a lot of comfort and cover over our gas and electricity needs right through to the end of March 2023, which gives us a lot of protection last year. I'm pleased to say that we've managed to extend our cover now through to the end of September. So we have a fixed price for electricity through Q2 and Q3. It's still going to be inflationary because it's obviously at a higher level than the great rates we were enjoying last year. And hot off the press, we've managed to extend a fair bit of that period into our gas buying as well. Electricity is the bigger commodity though. All of our shops depend on electricity, and that's where the most of our consumption is. But our bakeries do have some sort of processes that use gas as well. So it's good to have a bit more visibility on that as we stand here today. Then the green segment of the pie chart is food and packaging, which is 1/3 of our cost base, and that was the area that took off midyear last year following the invasion of Ukraine and all the consequences of that. So we'll continue to see food price inflation annualizing through the first part of this year. So it continues to be a big driver in the first half. But most of our pricing response to that is already in place. So we're in a much stronger position coming into this year in terms of price recovery. And we've got greater visibility going forward as well. So we've got about 4 or 5 months' worth of food and packaging price cover in place, which is better than we were. The tail end of last year, we had about 3 months. So as those commodity markets have softened, we've been able to take firmer forward positions, which is very helpful. On the right-hand side, you've got our people cost. We saw 4.9% overall inflation in wages and salaries last year. That will step up this year with the minimum wage going up by 10% in April. We've moved our wages from January, and we think, overall, across all staff members in Greggs, it will be about 8% wage and salary inflation that you'll see in the year as a whole. So that will be a bigger factor this year. And then at the bottom there, you've got shop occupancy costs. That's mainly rental rates on our shops, and that's been an improving ratio as we've been able to get better terms on our leases. You can see that the lease accounting charge is now 4.3% of turnover, benefiting, of course, from inflation on the top line as well as better terms in terms of rents. So if we put it all together, we saw 9% overall sort of like-for-like cost inflation last year. On top of that, you have to add the kind of the non-like-for-like inflation we saw in terms of business rates, VAT rates resetting, that sort of thing. In the current year, all that's pretty much behind us, and we expect the like-for-like inflation to be in a similar place, 9% to 10%. I think we felt like it was kind of closer to 10% coming into the year. We feel like it's closer to 9% as we stand here today. But that's the sort of area we imagine that you'll see. But more driven by people costs this year than it had been last year. So moving on from OpEx to CapEx. Slide 10 gives you an overview of the CapEx we spent last year, which was GBP 110.8 million. You can see the step-up from 2021 was primarily driven in the retail side by increasing the pace at which we're opening new shops and the rate at which we were refurbishing them as we've slowed all that down through the pandemic. Looking forward, we'll have a similar step-up in the number of refits that we do in the year ahead. But you can see that the big change comes in supply chain, where we expect to start now laying down more capacity to pave the way for the growth that we have planned for the next few years. And the next slide talks to that in more detail. So I will click on to that. So Page 11 gives you the latest view that we have on the multiyear CapEx program to create more capacity to support the growth plan. And to put this into some context, we have capacity standing here today to open a couple of hundred more shops before we would literally be maxed out in terms of particularly on distribution network. So we do need to start work this year to create more capacity for growth. And you can see that that's the big change on this chart. So the retail expenditure, which is the green bit, is relatively stable in the forward position at about GBP 100 million. And that supports the pace of growth that we've been seeing in recent years. The blue part, which is the supply chain, is the step-up. And the call outs at the top of the bars describe the key investments that we expect to make. And we'll make these decisions in stages as we go, and we'll be sensible about it. If we decide we got the wrong pace, we can change that pace. But what we think will happen at the moment is while we know we've got to complete the work on our latest sausage roll and bake manufacturing line at Balliol Park, which is half built at the moment and should be on stream by the end of this year. So that will be completed this year. And then we'll start work on two distribution centers, which are already in the network, but can be extended in terms of capacity. One is a relatively modern one at Amesbury in Wiltshire, where we have a piece of land on the site that's ready to add circa 200 shops capacity. And the other one is our Birmingham distribution center, which is an older building that's been refurbished to increase its throughput. And we think that will add 50 to 100 shops capacity there as well. So that's taking another 300 shops worth of capacity over those two relatively modest investments over the next 2 years. So if you sort of follow where we are, we've got 2,300 shops now. I said we had another couple of hundred capacity. It takes you to 2,500. That -- investment in those DCs would take the capacity up to about 2,800 shops. So you'll see in the statement that we talked about the next stage of the investment program supports the ambition that the business could have significantly more than 3,000 shops. Now to take that step, you've got to be confident, and that's the case. And so we will do that in stages. But that's why you see the reference in this statement to significantly more than 3,000 shops because the next phase of this would be a national distribution center somewhere in the Midlands. We expect to try and source the land for that this year and start building that out over '24 and '25. And what it would do is increase the throughput of all of our regional distribution centers around the south of England. So it can potentially be quite a significant step-up in capacity when we make that move, but we'll do it sensibly in stages. And then the final piece you see on this is that, if all goes the way we expect, then we will start to need more manufacturing capacity as well. So we -- through the last phase of supply chain development, we put in place some fantastic new kit in terms of donut manufacturing and savories, which some of you will have seen on site visits. Some of that will start to get full, and we'll have to sort of invest in the next phase of that, which, again, we think will be in the Midlands of the country. And just to give people an idea about where does this go because GBP 200 million a year is a lot of money, we know that. We think the kind of like the run rate coming out of this is that to maintain Greggs in that sort of 2026 state, will probably require maintenance CapEx at about 5% of turnover, just to give you some context, plus any further growth as we see it at the time. So moving on then to a bit more housekeeping in terms of tax earnings dividend. The tax rate for the year was 18.9%. It benefited from super deductions on our plant and machinery purchases in 2022, although there's some offset because some of the tax that was deferred as a result of those allowances will now get taxed at a higher rate of 25% in future rather than 19%. So that was a clever little clawback by the then Chancellor, now Prime Minister. The forward guidance we've given you there, no change there. So we expect this year's effective tax rate to be about 24%, following that increase in April, and for it to annualize out at 26% going forward. So basically, the effective tax rate in Greggs is normally about 1% above the headline tax rate. Our earnings per share, we've already called out, up 2.8%. And that's given us the confidence to increase the final dividend by 2p year-on-year. So 44p final dividend, which makes 59p for the year as a whole compared with 57p ordinary dividend last year. Although we did have the special dividend in the prior year, just to note. And that ordinary dividend is twice covered by earnings. Finally, on Slide 13, cash and balance sheet. We finished the year with a net cash inflow from operating activities of GBP 198 million, slightly less than the year before, but the year before benefited from the recovery of working capital post-pandemic. So that was a slightly inflated number. Working capital itself has been relatively stable this year, and we finished the year with cash of GBP 191.6 million, which we're carrying into this investment program that I described. Should we need it? If there's another bump in the road, we do have a revolving credit facility, which effectively adds another GBP 70 million of liquidity above that level. And in terms of allocating capital, as we said, we'll prioritize that growth opportunity that we see, deploy the cash to support those CapEx plans. But in doing so, we'll maintain the progressive dividend policy. We would normally plan to have about GBP 50 million in the bank at the end of the year to fund working capital. Obviously, we've got a lot more on that at the moment, which will be deployed over the next couple of years in line with that plan. And if we find ourselves in a position where there is surplus cash, we've said the special dividend is the preferred mechanic for returning that. But I say that without raising any expectations over the next few years because we've got plenty of opportunity and plans ahead of us. And with that, I will hand over to Roisin to give you a bit more color on those plans.

Thanks, Richard. So it's great to be able to update you now on the progress that we're making on the ambitious plans to address the many growth opportunities available to us and as we progress to become the multichannel food-on-the-go brand. Just before I go on to the strategic opportunities available to us on the update. I'm just going to spend -- I'm going to actually talk about brand strength and market share. So on this slide, you will see a number of metrics. And It's from the 2022 YouGov BrandIndex. And that's within the QSR, coffee and delivery service sector. And pleasingly, you can see that we have achieved the highest-ever brand score, and we are #1 overall. So you can see that in the orange box that is highlighted. It's also worthy of note that when value is so important to customers out there, we have retained our #1 value position. And the other piece, just to pull out on this slide, is we have also grown our market share of visits in 2022 and the food-to-go market to 7.7%. That's the highest share of visits we've had. So in 2019, we're at 6.5%, 2021, 6.9%, and we are now at 7.7%. So one piece for us as a team is that in a year of complexity and uncertainty, we have stayed very focused on delivering our strategic growth plan. So I'll now just talk about the strategic growth plan, the progress we've made and also have it supported by the investments and our supply chain, in our technology and also very importantly, our focus on sustainability. So the Greggs estate. Growing and developing the Greggs estate is the biggest part of our growth plan, and we've got a great track record on this. We exited the year at 2,328 shops. And as I said earlier, 147 net new openings last year was a record for the business. And we continue to target that level of opening for this year and beyond, but always with the caveat of ensuring that we deliver the return on investment from those opportunities. We've previously shown you the opportunities available to us and the catchments where we have low representation. And as we open in these catchments, we remain very confident in those locations and those ambitions. And it's great that we have made significant progress in areas such as retail parks, Central London and key transport hubs, including airports. As some of you may remember, for the interims in August, we had a jazzy slide up there on Leicester Square. So we had our pantries, our blue carpet. We had our social media star, Pasty Kween, and that was really to bring some Greggs fans to Leicester Square opening. But it really does then attract customers to go to that shop in London, and it gets the brand known further a few from our customers. We also now have 441 franchise shops, and our partnerships continue to extend. And that helps us get into places such as petrol forecourt retailing. And we continue to ensure that as we relocate and refit our shops, we provide them the space that we need to realize the future ambitions in terms of the different channels. So that's our first big preparation capability as well as a digital channels. So let me talk to you about expanding our evening daypart. As Richard said, we continue to be very excited by that. We have a great, talented cross-functional team working on this ambition. We know that more than 35% of visits are post-4:00 p.m. for food-to-go. And we have our lowest penetration in that daypart. We currently sit at 1.2%. By opening later, improving our menu options in the evening, particularly in hot food, and as Richard said, offering delivery in those shops, we are very confident that we can significantly grow that daypart and utilizing the current shop base. In 2022, we delivered the target, which was to open 500 shops at 8:00 p.m. and beyond. And it's now our strongest growing daypart. And for those of you that have been on the journey for a while, that's akin to the breakfast market when we first went into breakfast. Now on the menu, our existing favorites, such as the goujons, potato wedges and the pizza slices and the pizza boxes are proving popular, and we continue to try out new options. A number of which went viral recently on TikTok. I'm sure there's a lot of TikTokers in the room, so you've probably seen them. But we know that delivery is capturing that evening customer, and 80% of our late opening shops now offer deliveries to our customers. This year, we will provide further marketing support for that, and we aim to have 300 of our shops open until 9:00 p.m. And in our delivery channels, we talked a little bit about delivery in Richard's presentation. We accelerated our digital journey during the pandemic, and we're in a good place to really enable us to move this forward. The overall delivery market is still growing. So in 2019, it was at 7.7%, ex-2022 at 10.8%. Yes, there was a COVID spike in the middle. That was driven by a lockdown behavior. Delivery offers customers another channel to be able to access our offer in a way that is most convenient for them. So it's great that we now have 1,270 shops that offer that, accounting for around 5% of our sales currently. Our focus now is extending the geographical reach and improving the operational standards and delivering that service, and we are really excited about it. As Richard said, though, within the app, when customers use the app, we also offer click and collect. And that allows customers to scan any code, guarantee availability, but they can also get made-to-order options. So we also do -- we do made-to-order breakfast. We now do it at pizzas, and we will be trialing the baguette option. Now we talked previously about our journey to broaden our appeal, understand our customers' behavior better and tailor what we offer to them and as a result, drive loyalty and drive frequency of visits to our shops. And we're really pleased with our progress. We're driving much more messaging through the digital screens. So you see them in our shop windows. You may have heard the adverse that we had on radio, and we're also trialing video-on-demand. So if you have gone to cinema recently, you may well have seen VOD at the cinema. But it's a great way to really reach that younger consumer. Within our marketing investment, we are converting the food-on-the-go customers. So you can see on the slide, acceleration level, we've got 36.3% of customers would consider us. We are now converting our highest-ever level of 42% down to purchase intend. So that goes from 36.3% down to the 15.3%. We know our Greggs App offers a more engaging customer experience and it rewards the loyalty. When we talk about it, we talk about it like it's a 10% discount mechanic because for every 9 products you buy, you get the 10.3. And we're delighted that we now have 1.1 million individual active customers in the club. That was 400,000 at the same period last year. And we now, as Richard said, we have just over 8% of our customers actually scan their app when they're in our shops and increasing the visit frequency, providing us with more insight and letting us tailor the communication we offer to them. The great news is the increased visits that we're seeing of those customers that are using the app is actually higher than we had in our trials. So it gives us even more confidence. Now the strategic priorities are extremely important for us. But fundamentally, we are a foods business, and that's what gets us excited. So key to our success in ensuring we have a great menu of tasty, great value food and drink and our focus continues in this area of menu development. The menu development needs to both deliver through our growth objectives and also our ESG commitments through the Greggs Pledge. Chicken goujons, wedges, hot sweet treats and pizza slices continue to prove particularly popular in the evening. And we now have the pizza boxes that are available for customers to shop in the evening in store or to get delivered to their home. Customers are loving the hots -- which is the Hot Yum Yums, the milk chocolate cookies and then you can get the chocolate dipping sauces and the salted caramel. And again, that was a TikTok favorite. And we've also extended our range with our rice-salad meal boxes. And we introduced the vegan Sweet Potato Bhaji option. We're trying to keep trialing new options, though, because we do know to get into that evening daypart, we need to keep exciting our customers. So we've got other trials going on just now. In the Northeast, we have hot chicken wraps. We have loaded wedges, and we have a chicken burger that we're currently trialing. When Richard talked about our investment, which is extremely important for us as a vertically integrated business, we need to grow the capacity of our supply chain and our systems. But it's great to be able to update you that the pizza line that we talked about in Enfield previously is now commissioned, and that will allow us to triple our pizza production capacity. We have made significant progress at our Balliol Park campus in Newcastle, and that will enable us to bring the fourth savory line, as Richard said, that's for the iconic sausage rolls and bakes. And we're also migrating our logistics fleet to double-deck trailers. That will provide us with lower distribution cost, but very importantly, it will also reduce carbon emissions. SAP is complete for now, but we continue to invest in technology. So that's business information tools, and we are constantly improving our digital capabilities. And worth mentioning as well, it's not in the slide, we have now implemented our upgraded recruitment tool that we talked about last year. That reduces our take to hire, and it gives a much better candidate experience. And it's really important in a tight labor market and one where we have significant growth ambitions. On this slide, you will see the new supply chain priorities for '23, some of which Richard has already referenced. So we have plans to redevelop Birmingham distribution center and extend our Amesbury distribution center. And this year, as Richard said, we will aim to acquire a site for the national distribution center. All of this is critical to be able to support the capacity needed for our growth. So there will be further investment between '24 and '26 to enable us to increase the supply chain capacity to significantly more than 3,000 shops. But as Richard said, really importantly, those decisions will be made on a phase basis. And we plan to maintain a track record of strong return on capital, which remains a key management metric. As a business, we always prided ourselves in doing the right thing. We are delighted with the focus and progress that we continue to make against our commitments made in the Greggs Pledge. So that's our approach to ESG. Clearly, this is getting ever more important. And as of this year, you've seen the annual report, that also will be part of our long-term incentive plan. So there are lots of highlights on this slide. I am absolutely delighted, there's a real credit for the whole team for the hard work and effort that goes in to delivering against these commitments. Just some to pull out, we now feed 49,000 school children every single day with a free breakfast. We opened our 30th outlet shop, which is a key part of our strategy to get unsold foods to those most in need and also fund local charities who are targeting food and security. We owned our first eco-shop in Northampton, a shop where we can test innovative solutions and initiatives aimed at reducing the environmental impact of an entire estate. And we achieved the National Equality Standard, which is a prestigious award for diversity and inclusion. 32% of the products on our shelves are healthier choices for our customers to be able to make the right choice for them. And then very importantly, as part of our carbon agenda, we have set our science-based targets in line with a 1.5-degree centigrade ambition, supporting our ambition to be net zero in scope 1 and 2 by 2035 and in scope 3 by 2040. And it's pleasing to see that the -- just last week, these were approved by the science-based targets initiative. So our pledge progress is an area that we are very proud of. There is much more to do, and we will continue to focus on it. And we will publish our next full report in April with further details. So just looking forward, we have started '23 well. And we are trading in line with our plan. Most recently, we have delivered like-for-like in the first 9 weeks of this year of 18.8%, and this is in line with our expectations. And it's reflective of the softer comps from Omicron last year. Cost inflation thus continue to be a challenge, and we know that consumer disposable incomes are under pressure. However, we also know that we offer exceptional value. And this will remain compelling for customers looking to make their money go further. It's pleasing to be standing here in such a complex environment with market-wide inflationary pressures and able to state that we continue to perform well and remain confident in our plan for 2023 and the exciting ambitious plan for the years ahead. We are extremely well placed to realize the opportunity to become a significantly larger multichannel business. So in summary, this is an excellent business. But despite the headwinds and the macroeconomic factors is trading very well. We are delighted that we have grown our market share to a level of 7.7% of the food-to-go market. And as a team, we have high confidence in the significant opportunities that lie ahead. And very importantly, we have a clear plan to deliver against those ambitious targets.