Howden Joinery Group Plc (HWDN) Earnings Call Transcript & Summary

Welcome to the Howdens 2024 Interim Results Presentation. I'll begin by introducing our performance for the first half. Paul Hayes will then review our financial results for the period. And then share my perspectives on our 2024 performance to date and our plans for the remainder of the year, and then we'll take your questions. The group delivered an encouraging first half performance in, as we anticipated, a challenging marketplace. The results met our expectations for the period, and we are on track for 2024. We continued with our investment program, which is focused on our key capabilities and which gives us end-to-end a stronger business. Group sales in the first half, which included an extra week's trading in January, were 4.3% ahead of those in 2023, and we're 48% up on 2019, being the year prior to the onset of the pandemic. In the U.K., we believe we gained kitchen market share, which helped us mitigate a decline in the overall size of the kitchen market. Entry-level kitchens represented a higher proportion of the kitchens we sold, with sales of product in our kitchen categories increasing at a higher rate than in our joinery categories. We maintained an industry-leading gross margin with gross profit ahead of last year, as we balanced recovery of cost rises with our commitment to providing competitive pricing across the board for our customers. Reported first half profit was in line with last year's and 44% up on 2019. Excluding net spend on strategic investments above last year's level, first half profit increased at a similar rate to sales. Our builders remain busy, and we made good progress in our strategic initiatives in the U.K. and total sales of our international operations increased. The business delivered strong operating cash flow and we maintained a robust balance sheet. This gives us the flexibility to continue to invest in our growth plans for the business and to provide shareholders with an increased interim dividend for this year. The interim results demonstrate the strength of our local trade-only in-stock model, a strong product lineup, high stock availability, industry-leading service levels and a very engaged team have all contributed to our performance, which benefits from the ongoing investment in our customer-focused strategic initiatives. We had a record number of customer accounts at the half year, with a similar proportion of trading as last year. As well as maintaining an industry-leading gross margin, the business continued to deliver KPI volumes, which in aggregate were well ahead of pre-COVID times. So far in the second half, our performance has been in line with our expectations. And whilst we have peak trading ahead of us, we're encouraged by our sales performance in the year-to-date. In 2024, we expect market conditions and trends to be broadly unchanged from those seen in 2023, and this has proved to be the case so far this year. We are well prepared for this. And our customers, mainly self-employed people, are adept at managing their businesses in such times. Delivered by our highly entrepreneurial and well-incentivized teams across the business, I believe that our service-orientated trade-only in-stock local model is the right one to deliver sustainable market share gains. Our model is hard to replicate, difficult to compete with and we have initiatives in place to make it more so. The addressable value of the U.K. markets in which we have an established presence is some GBP 12 billion, and there are significant long-term growth opportunities for us. We continue to prioritize investment in the business on this basis. I will update you on our strategic initiatives, which are key to the long-term development of the business after Paul Hayes has taken you through our financial results for the first half. Paul?

Thank you, Andrew, and good morning, everyone. I'm pleased to be presenting Howdens' financial results for the period ended 15th of June 2024. Howdens performed well in the first half in a challenging market. Group sales increased by 4.3% to GBP 966 million as we supported our trade customers with a strong product lineup, high stock availability and outstanding customer service. We also made further market share gains. Gross profit was ahead of last year at GBP 587 million, and we have continued to recover increases in commodity and energy costs through price increases and productivity improvements. The gross margin percentage is sector-leading and includes the dilutive impact of growing sales of our solid worksurface category. Operating costs were GBP 22 million higher at GBP 470 million, predominantly due to GBP 16 million of investments in our strategic initiatives. During the period, we took further productivity and efficiency actions to broadly offset around GBP 12 million of higher inflationary costs, and I'm going to cover that in more detail shortly. As a result, we generated an operating profit of GBP 117 million. And after net interest charges, profit before tax was GBP 112 million. So let's look at revenue growth in a bit more detail. We continue to face challenging macroeconomic conditions in the first half, but we have maintained a disciplined approach to balancing price and volume to support our trade customers. As a result, U.K. revenue increased by 4.3% to GBP 934 million and was 2.8% ahead on a same depot basis. As I've mentioned, the major driver of our strong performance has been the ongoing investment in our strategic initiatives. We prioritized opening new depots, and we also revamped 26 older depots into the new format, which drives incremental revenue growth. At the half year, we had 850 depots in the U.K., 480 of those were in the new format. In 2024, new products have been a key focus, with infills to our existing kitchen ranges and new joinery categories. We have also refreshed our paint-to-order colors and introduced new decors in our solid worksurface ranges at all price points. All these new products will be available ahead of our peak trading period. We're also continuing to prioritize digital investments to make it easier for our customers to trade with us. In the international depots, where we operate from 76 sites, we generated revenue of GBP 38 million, which was 4.7% ahead of 2023, after a period of significant depot rollout in France, where you're building out the existing depot team's capabilities. We're also expanding our joinery ranges in France and Ireland to drive depot footfall, including higher-quality doors, new skirting and Architrave lines to supplement our kitchen ranges. Our Irish depots have continued to trade well since we set up there around 2 years ago, and we will continue to expand our depot footprint there this year. Now Andrew is going to take you through these initiatives in more detail shortly. So now let me move to profit before tax. Bridging from 2023 PBT of GBP 112 million on the left, gross profit was 12 -- GBP 22 million higher versus last year. We were effective in implementing price increases early in 2024 that benefited the business by GBP 10 million. The positive impact of volumes and mix was GBP 14 million, which was encouraging as this was net of the dilutive effect from stronger sales of solid work surfaces. To remind you, these products have a lower gross margin percentage, but an attractive cash margin. Kitchen sales were encouraging in the first half. And while we remained -- we remain focused on expanding our leadership positions in entry-level and mid-priced kitchens, we continue to develop our offering in the higher-priced kitchen segment where we are underrepresented. Across these kitchen segments, the margin percentage is broadly consistent, and this remains an excellent opportunity for future growth. We have delivered further productivity improvements in our manufacturing operations, which almost offset the increases in freights, commodities, wage inflation and energy costs. These costs are still inflating, although not at the levels of the past 2 years, and there was the lag in the P&L account as the impact is only realized as these items are sold. We keep under review what we believe is best to make or buy, balancing costs and overall supply chain availability, resilience and flexibility. Recent investments have included new panel and lamination lines at our Howden factory. We've expanded capacity of our 2 solid worksurface factories in the north of England, and 2 new lines to facilitate our paint to order initiative. All these investments are providing good returns. Operating costs increased by GBP 22 million as a net result of managing our costs tightly, while continuing to invest in our strategic initiatives. This discipline supported us in delivering PBT of GBP 112 million in the period. Now this slide here shows how we've managed our operating costs. Bridging from left to right, the incremental cost of the new U.K. depots totaled GBP 7 million. We invested in our international businesses with a continued focus on the city-based strategy. The GBP 2 million increase includes the incremental costs of the 10 depots that we opened in 2023. Other strategic initiatives included our investments in depot revamps, worksurfaces, paint to order and digital. The existing depot increases of GBP 4 million related to higher inflationary costs principally in property and labor. Other cost increases were tightly controlled, with the majority of inflationary cost increases being offset by productivity and efficiency actions taken in the first half. So now let's move on to the cash flow. From an opening cash position of GBP 283 million, we ended the period with GBP 166 million of cash, a net outflow of GBP 117 million. Now you can see from the slide that this was after paying dividends of GBP 89 million. Overall, working capital increased by GBP 107 million, in line with our normal seasonal phasing. Stock increased by GBP 27 million due to the usual stock build ahead of our peak trading period and ongoing inflation, and we are carefully managing stock levels given the number of new product introductions and the continued geopolitical uncertainty. Debt has increased by GBP 62 million since the year-end, with ageing in good shape and creditors were GBP 17 million lower. Both these balances were impacted by the late finish to the prior year due to the 53rd week. Capital expenditure totaled GBP 40 million as we continue to focus on the execution of our strategic initiatives. Just under half of the investment was in depot expansion and revamps. Other initiatives included investments in our supply chain and manufacturing sites, as well as expanding our digital capabilities. Now turning to earnings per share and dividends. EPS in the first half was 15.4p, which was level with the prior year. And our progressive dividend policy remains unchanged. And I'm pleased to announce that the Board has declared an interim dividend of 4.9p, an increase of 2.1%. So let's turn to technical guidance for the rest of 2024. Now first, looking at P&L guidance. As I've mentioned already, there was an early start to trading this year with our depots opened in the first week of our financial year, when they were closed in 2023, and this reverses in the second half of the year. There was also a benefit in the second half from the non-repeat of the additional 53rd week in 2023, which was worth around GBP 17 million. We expect a continuation of higher container costs, which have risen in the first half. And at current pricing, we expect around GBP 5 million of additional costs in the second half as the inventory procured and shipped in the first half is sold. With respect to foreign exchange sensitivity within cost of goods sold, we've set out the impact on a full year of a $0.01 movement in both the euro and U.S. dollar, as shown on the slide. Now in terms of cash flow items, we'd expect capital expenditure to be broadly in line with last year at GBP 125 million as we continue to invest for growth. Working capital is expected to increase this year impacted by the higher debtors as a result of the timing of our peak trading period, period 21. This year, the last 2 days of period 21 fall into November, which means that a significant proportion of customer payments won't be due until after the year-end. Now we expect that overall impact of the year-end date will be around GBP 50 million. But I just want to be clear that, that's simply a timing issue. The cash will come through early next year. And overall, our working capital remains in great shape. So in summary, we have performed well in the first half in a more challenging marketplace. We have been proactive in delivering productivity and efficiency savings to protect the P&L account. Our balance sheet and cash flow remain very strong and support our continued investment in the business, and we expect to maintain this at the current pace in the second half. Since the start of the second half, our performance has been in line with our expectations. And despite the ongoing macroeconomic headwinds, we are on track with our guidance for the full year. We remain confident of delivering growth ahead of our markets, while generating strong cash flow and attractive returns for our shareholders. Thank you, and I'll now pass it back to Andrew.

Thank you, Paul. In reviewing our first half performance and plans for this year, I will use our strategic initiatives for the business as a framework. Fully aligned with our trade customer-only focus and entrepreneurial culture, and based around our core building blocks of service and convenience, trade value and product leadership, these are: to evolve our depot network, to improve our range and supply management, to develop our digital capabilities and services, and to expand our international operations. So first, depot evolution. High service levels, including local proximity and immediate availability, are very important to our customers. And we continue to see profitable opportunities to open depots. We are using our updated format for all depot openings. Deployed in several forms, the format enables us to provide the best depot environment in which to work and conduct business, and to make space utilization and productivity gains in a cost-effective way. Overall, we continue to believe there is scope for around 1,000 depots in the U.K. versus 840 trading at the end of 2023. We plan to open around a further 30 depots in 2024, of which 10 were opened in the first half. We have progressed our rebound program for existing depots. This continues to receive very positive feedback from depot staff and customers alike, and providing such a trading and working environment is important to our competitive position. By the end of 2023, including relocations, we had revamped 274 depots. In 2024, including relocations, we plan to revamp around a further 85 depots and completed 26 of these in the first half. And by the end of 2024, we expect to have revamped around 54% of the 670 depots, which were opened in the old format, and have around 64% of all U.K. depots trading in the updated one. Next, range and supply management. Sales of new products make a significant contribution to our performance, and we have upgraded our NPI program in recent years. Total sales of new products introduced in the last 18 months or so represent around 17% of total U.K. product sales, with new products introduced so far in 2024, and the 2 prior years representing 28% of U.K. product sales. Sales of new products introduced in the first half of last year alone increased by some 52% this year. As in 2022 and 2023, our higher-priced kitchens continue to contribute more to the kitchen mix by volume than previously, which is a positive impact on our average kitchen invoice value. Managing our portfolio of kitchen ranges efficiently is crucial for both best availability, which is highly valued by our customers and for profitability. In recent years, we reorganized our range architecture, removing duplications and improving the balance between new kitchen introductions and timely discontinuations. The more efficient ways of testing new kitchen colors and finishes is enabling us to bring more proven kitchen styles to market more quickly. And our new paint-to-order service is also informing our from stock ranging decisions. At the end of 2023, around 60% of the kitchens available from stock comprised ranges brought to market between 2021 and 2023. And we have a further 11 new ranges confirmed for 2024, with our entire kitchen offering organized into 10 families, the same number as 2023. We are committed to providing market-leading and competitively priced products for our customers to sell to theirs, and value for money is a constant feature of purchasers' buying decisions. Given pressures and high sell budgets, price featured predominantly in 2023 and, as we expected, is going to do so again this year. Our offering as enhanced by our 2024 NPI program is well positioned to take advantage of this. With an emphasis on value for money and choice at all price points, our NPI for 2024 includes 10 new kitchen ranges aimed at the entry and mid-priced segments. We have also introduced clearer and more delineated pricing within ranges and across families, and we are innovating in other product categories and have added bedrooms through our overall depot offering. In 2023, we brought to market 7 new kitchen -- entry kitchen ranges, adding new frontal options. And this year, we have added 2 more, Greenwich in Marine Blue and Witney in Reed Green. Last year, we also refreshed the look of our best-selling Shaker family, and we renamed Halesworth and launched a new mid-priced shaker family called Bridgemere. For these families, we have 6 new colors for 2024, including Halesworth in 2 of the best-selling paint to order colors, which are Antique Rose and Seafoam, and Bridgemere in Linen and also in Sage Green. Our best-selling mid-priced family, Clerkenwell, we're adding 2 new colors, Super Matt Black and Glass Reed Green. We also continue to develop our high-priced kitchen portfolio, which is a large segment of the market in which we are underrepresented. The pain-to-order service for customers buying our top end Chilcomb and Elmbridge ranges, which we introduced in the second half of 2023, continues to be very favorably received by customers and depot teams alike. Price of the premium to the 9 range colors and available -- which are available from stock for 2024, we are offering 15 paint-to-order color choices from which customers can opt to have either or all as part of their kitchen furniture. And we are about to refresh the paint-to-order pallet with 5 new colors. For customers looking for a bespoke look, we believe the paint-to-order service is very competitively priced, with by market standards a short lead time between order being placed and the kitchen being ready for delivery. A strategic priority for us is the development of the market-leading supply and fit capability for premium worksurfaces. Solid surface worktops are often, but not exclusively associated with the sale of higher-priced kitchens. And this product category is one with significant opportunity for us. Following the acquisition of the Sheridan's worktop business and other investments in our in-house solid surface manufacturing capability, we're now amongst the largest in the U.K. The number of solid surface worked up orders taken by depots increased significantly in 2023, and we continue to improve our offering in order to increase it again this year. In the second half of 2023, we reduced the time between template to fit at national scale, an industry-leading 5 days. And this year, we've also reduced the time between order and template 5 days. So far in 2024, we've added 14 more decors to our solid surface template and fit service, with 8 more to come in the early part of the second half. In total, we have a comprehensive offering of 58 decors to suit all budgets in place well ahead of peak autumn trading, during which kitchen sales represent an above-average proportion of our sales mix. In 2023, we've also reinvigorated our offering in other categories and are innovating again in 2024. In doors, we've added more color and bolder styles at all price points. Our new own label flooring brand, Oake & Gray, is performing very well. And new flooring product for 2024 includes a market-leading third-party premium price brand called Karndean. In appliances, we've added further additions to our Lamona brand, which is the leading integrated appliance brand in the U.K. alongside extensions to our range of third-party branded product. And in sinks and taps, we've added more styles, colors and finishes. In the latter part of 2023, we tested demand for new fitted bedroom ranges supplied by us -- by the end of the year, all depots were able to sell them. Installing fitted bedroom suite suits the skills of customers who fit kitchens, and they have a high cabinetry content which matches our manufacturing capabilities. The ranges were developed in-house, utilizing our existing manufacturing supply infrastructure. The first half are offering comprised of 16 new bedroom ranges in 4 leading family designs from -- drawn from our kitchen range portfolio. Matched with new internal accessories, including pull down rails, mirrors and internal storage solutions. For the second half, we are adding 3 more comprising of our entry-level Greenwich range, in Glass White and in Natural Oak and in Hockley in textured oak. We are committed to providing competitively priced product for our customers and we have reinforced our focus on price and promotions, which demonstrate the value we offer to promote footfall across the year. Howdens is an in-stock business and the trade tell us that the high level of stock availability is one of the key reasons that they buy from us. In the first half of 2024, our service level from primary to depots was 99.97%, a world-class performance by any standard. In 2023, facilitated by our new stock management system, which we call TED, we rolled out our Daily Traders initiative to all U.K. depots, which has benefited for us in a number of areas. Daily Traders is a means to improving customer service levels and promoting footfall and increasing sales by optimizing in-depot stock holding of best-selling SKUs and associated range completers. We are also using the insights from the Daily Traders to help optimize new depot opening stock, and to provide stock guidance for depot revamps and relocation so that these are configured to hold the right stock in the right depth. This year, we have maintained improvements in key metrics, including at a higher proportion of stock being replenished by via a depot's core weekly delivery order than previously. And this gives us efficiencies as it helps optimize the utilization of our XDC service, which I'm going to talk about next. In recent times, we've improved stock replenishment by supplementing a depot's core weekly delivery order with investments in next-day service by a network of 12 regional cross-docking centers, or XDCs, combined with a rebalancing of where we hold stock. XDCs are a key enabler to deliver the levels of high service and availability, which differentiate our offer. And with mainland coverage for in place, our focus is now on using these assets more efficiently. The improved depot stock mix following the introduction of the new reordering system and the Daily Traders initiatives have enabled us to reduce annualized XDC capacity, leading to lower operating costs. We can also utilize XDC to bring new products such as bedroom to market quickly and more efficiently, and we can build stock as demand increases rather than being fully stocked for a full rollout at launch. We make all of our kitchen cabinets and some of our other products as well, which is a source of competitive advantage for us in several ways. We keep under review what we believe is best to make or buy, balancing cost and overall supply chain availability, resilience and flexibility. In 2023, several major investments came to fruition. Production of the new furniture lines at our Howden's site, which are amongst the most advanced of their type in Europe, totaled around 600,000 pieces in 2023, with a full year capacity of around 2 million pieces for 2024 subsequent years. These give us the ability to make a variety of kitchen furniture, principally frontals and panels and more of our ranges, at the same time as we can source externally -- at the same quality as we can source externally, but at a lower cost and at a reduced lead time to delivery. Our second Architrave and skirting lines also commenced manufacturing in 2023, and the performance levels of the new line are now ahead of those with the original one. The line increases our full year capacity to some 10 million pieces and also broadens the range of such product we can manufacture, enabling us to continue to service in-house substantially all of the growing demand that we see for these products. Separately, we have also invested in 2 lines to facilitate our paint to order initiative. Located in a purpose-built facility near our Howden site, these lines give us an industry-leading production capability in this area. We are achieving the order turnaround times that we set ourselves and we have capacity to supply some 5,000 kitchens a year. So turning to our digital platform. We use digital as -- to reinforce our model of strong local relationships between customers, depots and their customers by raising brand awareness, to support the business model with new services and ways to trade with us, and to deliver productivity benefits and more leads for our depot teams and for our customers. Usage of our online account facilities, which provide efficiencies and benefits to depots and customers like has continued to increase. New registrations totaling some 44,000 and around 50% of our customers had an online account by the half year. Total users viewed our platform -- certain users during our trade platform increased by 17%, with around 80% of users regularly looking at their individual confidential pricing. Customers that have online account have, on average, continue to trade more with us more frequently and spend more significantly than nonusers, and proportionally more of them bought across product categories. We saw high levels of engagement with our web platform and growth of our social media presence, which also stimulates interest in viewing our products and services on howdens.com. Site visits totaled 11.6 million in the period. Amongst kitchen specialists, we continue to have the highest number of fitted kitchen site visits in the U.K. And the time spent viewing pages and the number of pages viewed per visit were consistently at high levels. Across social media sites, our follower base is now 669,000, that's up some 21%, with around 5.5 million monthly engagements. In 2023, amongst other initiatives, we tested a digitized in depot stock management system, or Live Stock as we call it, to record and pick deliveries, check allocations and determine depot stock levels. Amongst other benefits, the system frees up time for depots to use productively, and the system now operates in all U.K. depots. It also enables us to have complete visibility of our locations of stock by SKU holding across our factories, primary warehouses and depots. The Stock Surety, Live Stock and other initiatives such as Daily Traders provide have enabled us to offer an upgraded click-and-collect service to our trade customers. Rollout of the service was completed during the first half, which enables online account customers for all our U.K. depots to check real time availability of stock on a depot-by-depot basis, review their individual confidential prices at their selected depot, place orders for collection at a time of their choosing. Click and Collect is available for all of our products, except those for which a survey or a card planning is generally required prior to placing an order, such as kitchen range. Our initiatives are contributing to an increase in digitally sourced leads for depots. Digitally sourced depot lead contacts on the metrics that we used more than doubled in the first half, albeit from a low base. These represent high-quality leads for depots and customers, including for kitchens, a significant proportion converts to kitchen sales with above average order values, and we are looking to promote higher levels of lead generation online. And finally, international. Versus the first half of 2023, the first half performance of our operations based in France progressed significantly in a market at least as challenged as the one in the U.K. The business is on track to deliver a material increase in sales in the year. The kitchen market in France is estimated to be worth around EUR 4 billion, excluding appliances with most kitchens purchased through kitchen specialists and DIY stores. As long-term followers of Howdens will know, we tested our ability to access this sizable market in several ways before adopting a city-based approach, serving solely trade customers to be led and staffed by people who embrace the Howdens way of doing business. By the end of '22, we had doubled our depots in France and Belgium to 60 in a 2-year period, and opened a further 5 at the end of 2023. Consequently, when compared with their U.K. counterparts, many of our depot managers in France are less experienced in nurturing trusted trade relationships. For 2024, we're focusing on team development to foster these, and we may open a few more depots towards the end of the year. We are investing elsewhere in the business through enhanced offerings of footfall promoting products and we have introduced a regular schedule of trade days at all depots with aligned promotional activity and more supplier support. Sales in the Republic of Ireland continue to be encouraging, and we are opening more depos there in 2024. We identified the Republic of Ireland as a market which suits our differentiated model and one which sets us apart from the incumbents. We commenced trading in the Republic in 2022 using a similar depot strategy to that in France, with the depot teams supported by our U.K. infrastructure and our digital platform. During 2022, we opened 5 depot clusters around Dublin and our arrival in the Irish market has attracted much attention. We opened 5 depots in 2023, 3 more around Dublin, 2 serving Cork and we are taking the total trade to 10 year-end. In the first half of this year, we added one more depot serving Waterford. And the total, we could open up to around 5 in 2024, and we'd increase the total trading to around about 50 by the year -- 15 by the year-end. So for 2024, we are as well planned as we've ever been, including on our strategic initiatives. These are aimed at increasing our market share profitably as we deliver value to our customers across all price points. High stock availability is a major contributor to our performance. And in 2024, we are maintaining our safety stock policies for the most part at the levels by volume we deployed in 2023. We will have all of our new kitchen ranges for 2024 in stock well ahead of our peak autumn trading, with an emphasis on entry and mid price ranges, together with our very competitively priced premium kitchen offering. We have a program of Rooster promotions in place to keep Howdens at the front of the traders mind together with other price initiatives. And we will continue to make improvements to service and availability, for example, by utilizing XDCs efficiently through our Daily Traders, Live Stock and Click and Collect initiatives. We are increasing the range of services and functionality we offer online to the benefit of our depot teams customers and to end users alike. And we'll be making more in the U.K. as our new lines at Howdens move up towards full production capacity and solid surface business continues to grow and bedroom volumes increased. During 2024, we plan to open around 30 depots in the U.K. and refurbish around 85 existing depots to the updated format. And by the end of 2024, we expect to have around 65 depots trading in France and Belgium and up to 15 trading in the Republic of Ireland. Lastly, outlook. Whilst we have peak trading ahead of us, we have made an encouraging start to the year. Our plans for the business are on track and our expectations for the full year remain unchanged. We expect market conditions and trends to continue to be broadly unchanged from those in 2023, and we are well prepared for the challenges and opportunities that such market conditions may present. We aim to retain a profitable balance between margin and volume as we continue to maintain competitive price -- competitive pricing, whilst aligning operating costs and working with our suppliers to keep product and input cost controlled. We are that confident in our business model being the right one to address opportunities in our markets. And in summary, we are well placed to outperform our competitors in 2024 as we continue to invest in our capabilities and grow opportunities, which are pivotal to the long-term development of the business. And finally, I would like to take this opportunity to thank everyone who works for Howdens, many listening in now, whether in depots, our factories, our commercial operations, our support functions, for their extraordinary commitment to providing exceptional service for our customers, which is a key component that sets us apart from so many others. So thank you for listening, and we'll now take your questions.

Rob Chantry, Berenberg. 3 questions all on market structure, I guess. And I'm aware you may not give precise numbers, so some color would be useful. Firstly, could you just comment on where you see the market share on a volume and value basis given all the moving parts and your strategic focus at the moment? And secondly, some commentary on where you see kitchen market volumes versus 2019 in 2024? And then thirdly, early days for bedroom furniture. I know it's roughly GBP 1.2 billion market and there's probably 1/3 you're not interested in, but what do you see as a realistic market share target maybe 3 to 5 years out? And who are you just displacing in that mix?

Yes, yes. So we started off the year by putting around about 3% price increase across the piece. It looks like we've retained about [ 1% ] of that. And we've maintained a healthy balance between volume and value, I would say, across the start of the year. Look, I think it's not a tremendously well-tracked markets in terms of share. But given what we've seen from competitors and some of our key competitors backing off, either slowing down on some of their freestanding units, we would see that we've taken a considerable amount of share at the start of this year. We don't think the market is in particularly good shape this year. We think it couldn't be down as much as 6% or 7% so far this year. So we're pleased with our positioning and our gains in that period. We can see it in appliances, where we've made good share gains versus the market, and that's one that's reported pretty well. But we also look into the supply base and see how they're getting on in the U.K. We get anecdotal feedback from some of the independents in it feels. It feels like we are really making quite a significant dent in the independent market. And we're also working very effectively at the opening a mid price, particularly the opening price in the market, where we've got a real stronghold. So yes, I think we've made substantial progress this year. Bedroom furniture, you're right, and that's about the size that we see the market about GBP 1.2 billion. It's a freestanding element that we don't want to play in. So we've got on with our program. We're pleased with what's happened so far because it has come in exactly where we thought it would be, and that's pre us taking our second move, which is opening up into opening price, which we are about to start in the next month. And we keep bedrooms rightly and it's the right place for us. We're a kitchen business primarily. That's our absolute focus. And we don't want our teams getting distracted in the bedrooms. But we like it is the type of work, our customers do. We had 200 depots selling kitchen -- selling bedrooms in our peak trading period last year and everybody's got it now. There was some interesting anecdotal feedback around depots selling bedrooms, bedrooms with kitchens during peak trading last year. So we look with interest as we go through the second half of this year. But we're pleased with the margins, we're pleased with what's happening so far. And it's been enabled by the initiatives like XDC that has enabled us not to distract our depots from holding stock in the right areas, which should really be peak traders, daily traders.

Aynsley Lammin from Investec. Just 2 from me, please. Just one on the kind of pricing. Just wondered if you could give a bit more color on the trends you've seen on the price. Have you lost a bit more price as the kind of half year progressed? Essentially just trying to gauge how much pressure there might be on gross margins in the second half, and what were your expectations there. And then secondly, just obviously, net cash was higher, you ticked up the dividend this year. Just wonder what your thoughts are on share buybacks at this point. Yes.

Yes. Look, I think we're pretty happy with where we're at on price. And I think what we're seeing from the competitors and pretty random stuff, and I think the people are under pressure. The teams will get presented with quotes from competitors and our instruction to them is you take those kind of -- you take that business. We're interested in profitable volume growth through the year. I don't know that I'd point to anything particularly on the gross margin, but we shouldn't be particularly concerned about the second half. The teams are working very hard in driving customers into the business. So when we're very active on joinery, flooring, doors, that kind of business we drive footfall in. That gives us the opportunity to build conversations with our builder customers around kitchens. You can see those 2 things work very well together, good footfall drivers. That's why the teams get very behind doing trade days, the national trade day this year, and we keep activity going in the business once we see the customers got the opportunity to work very hard on kitchen. So we're very focused on keeping the kitchen margin in the right place, taking the bits of business that we need to take and then we trade very hard. In joinery, that has been a consistent strategy and one that we've been focused on very clearly through this year. Yes, I wouldn't add an awful lot more color on that.

And if I take a question on the share buybacks. Our capital allocation policy, we've always been very clear on that. This year, the priority is really investing in the business and delivering growth. And I think you've seen that in sort of the level of capital investment of around about GBP 125 million, so -- which helps us to that. We're excited about the business. And in the longer term, we will look and we're investing in increasing our capabilities and capacity. So as we look forward, there will be some other investments in terms of things like increasing our capacity and manufacturing cabinets and things like that, where there will be sort of larger investments in equipment products, processes that we know and really understand well and pay back. So we will see that, but we will advise as and when we get to those sorts of investments. So that's one thing we're aware of in terms of managing the cash appropriately. We've really picked up on the progressive dividend. And then we're very clear around the policy of cash in excess of GBP 250 million, then we look to make share buybacks. What we will be aware of is the timing issue around this. I talked about that GBP 50 million of the timing due to the way the calendar falls. When we look at our capital allocation policy and where we stand at the year-end, we'll take that into account. But we understand the share buybacks is an important part of our approach as a business. Just to remind you, we bought back GBP 300 million over the last couple of years, and we continue to remain committed in terms of sort of managing a strong balance sheet, the share buybacks, where it makes sense.

Ben Varrow from RBC. I'll take 2, please. Just in terms of heading into P21, what are your thoughts there in terms of volume and price? I mean did you change anything that you've seen so far in the first half with regard to price? And then the second is on the international business. Could you give a bit of an update there? And then is there any color on the path to breakeven?

Yes. Thanks for those 2. Look, there's always a -- we would -- we've been on a pretty steady rhythm about how we play H1 versus H2 in the business. We come out in January, we do a price increase separate. The past couple of years, we've gone to do a bit more than that. But a good rhythm for us is to come in with the January price increase and get it settled in well, and that the teams know exactly where we're at from the sort of landing the price increase and we get that settled in the first couple of months. I think we're in the right sort of place as we position ourselves forward for period 21. And our -- we're very ambitious about what we want to achieve in the second half as always. And we are in a place now, where our depots will be building the lead banks looking forward in the period 21. Given where we're positioned on margin, they'll be building the lead banks, and we'll be very focused on where the lead banks are at, where the target lead banks need to get to [indiscernible] the right place for period 21. Also the conversion rate is a -- we run a very high conversion rate with our builder customers. So I think it's really hard to call how H2 is going to happen. We think we will do very well. I think we're incredibly well set up. And what I mean set up, we bought sensibly for volume growth. We've got the right incentives in place for the teams that are planned. They don't know exactly what they're getting yet, but it's all planned and set up. Our availability, as I mentioned in my speech is perfect. Almost perfect, 99.97%. And we've sprinkled on some new product as we go in. So I would say morale in the business is good, which is a key feature of our performance in the second half. I think everybody's eyes are on the prize and I've been going out and spending time with -- we do regional boards, where we get 90 managers together, 9 regions, 7 meetings a year, and we spend a lot of our time at front of the depot managers. And I've been overlaying this year with smaller meetings with 10 managers and really getting down into some deep issues with them. And I think we're in as good a place as we could be. We'd like a bit of help from the market, we're expecting none. This is about self-help in the second half, and I think we'll make a good fist of it. So I think so the price/volume mix, similar to the first half. In balance, I would hope. The international businesses has been interesting because we came out of COVID in France -- and I'll come back to Ireland a little bit later, but we came out of COVID in France very confident about our French business. And we moved too fast, I would say. We put down 20-odd depots in 1 year on quite a small base. And we learnt from it, and we absolutely tackled into fixing it. We appointed Andy Witts to oversee the operations. And Andy's brought that sort of steady chairmanship to it. We put in Zoran Zailac, who's our operations director. And then part of his development has gone out to the operations director in France. And I was doing an internal conference call with the teams, and we were talking about post their peak trading last year, it was like some flowers and there were sort of heads were down a little bit. And you go back into that business that all the sunflowers are pointed in the right direction. It's actually quite encouraging. And they've had a good first half. I expect them to have a good sales growth in the second half. And it's encouraging to hear some of the stories about how the brand is getting out there and how we're affecting like-for-like performance. We've -- and it's encouraging. Not everything goes perfectly in a business. We saw -- we identified the issue, we sorted out. On top of that, we have [ Captain ] Sebastian Krysiak joining our international business. Sebastian was Commercial Director at Kingfisher. He joins in September. It's a big appointment for us. Sebastian's a [ chap ] who loves people and he loves product. And he's Polish and he's French, and he's very excited about joining the team to develop out that business. Ireland. I think the Howdens brand is falling on very fertile soil. The economy looks good. There's an awful lot of building going on out there. We're up to 11 depots. We do a few more this year. We keep them around cities. There's -- it's an interesting market for us. And there is nobody doing what we do in Ireland or in France. When you go into the depot and you see teams customer-facing, fantastic product quality, amazing value and then stock in depth, there's nobody reasonbly doing that, that there in either of those 2 countries that we're operating in. So we're pretty excited about it.

Ami Galla from Citi. Just a few questions from me. First one was a follow-up in France. One, in terms of the sort of price points that you typically get more interest in France, can you give us some more color there? Do you think there's now a big appreciation for a fitted kitchens model was, which is primarily a flat packaging market? And in terms of breakeven point in France, from a line of sight, do we have that more visible milestone insight as to when do we get there? And the second one was really in terms of U.K. and current trading. Post election, have you seen any discernable sentiment boost of coming -- as a feedback coming from your depot managers? And the last one was on cost trends in the sort of input cost line. I mean, is there anything to call out on what you're seeing in your input cost side?

Yes. Okay. Look, I -- people can keep on asking me about France and what the differences are, sort of spends around, there's many more similarities between the France and the U.K. when we look at the markets. So the more we lean into what we do as a business, serving trade customers, doing the right thing for the trade customers, the better we seek to do. So whilst the market has got a predominantly flat-pack feel to it, our rigid cabinets are a very important thing for us to be given the trade, because it means the fit is so much faster, the cost that they can make on the project with the customer, they can make more money. I sort of had always felt that we were probably more contemporary in styling than traditional in France, and that may be because of our dominance around Paris, we've got a big number of depos. But actually we're discovering that that's not quite the case. And the balance may not be the same as it is in the U.K., it's sort of 50-50. It could be 70-30 in France. So that's an interesting opportunity for us. The point I made earlier about driving footfall into the depots in the U.K. and keeping our depots active and busy, whether it's trade days or selling joinery or flooring or skirting and Architrave, these kind of things in supermarket terms are milk and butter for us. Those types of products we are getting really good at selling in France and they're growing well. So I think that feels good. Around breakeven, but we reduced the losses significantly in France this year with all the good work that the team are doing. It's largely a sales job. There are some -- it's about driving volume through the business. But as we've been adding on more depots through the year, it takes time for those depots to mature. I don't see us breaking even next year. The following year. I think we were -- depending on how it goes, I think we would have a chance, and certainly trading profitably in the year after that, in '26. So that I would see that quite sensibly. But there's always that balance between rolling out depos and you're incurring losses in new depots you're trying to mature the estate. But I think this is the right sort of proportion of investment the business that this size should be doing to try and make the brand work in a different country. And I think the team will do a fantastic job on it. And regarding sort of input costs, there's not a lot to talk about it, and Paul picked up the point about freight. There's 2 dynamics going on. There's less pressure on raw materials, I would say. There's probably still pressure from a labor point of view in our supply base, but the sort of labor inflation. But then you've got a competitive dynamic going on where we are a big purchaser of kitchen product in Europe. That's everything that we don't make. So there are deals to be done, and people want volume with us, particularly when we're sort of making more ourselves is always those tough conversations between we're going to make it or do you want to keep it. So we always keep that strong intension. And we understand the cost profile incredibly well in our supply base because we're involved in many of those activities ourselves. So that's what I would sort of say on the input costs. Look, regarding U.K. the election, I would say, and what we have sort of said as a team, it's great that it's done and it's out of the way. I don't know that we would say we're seeing anything different than we've seen. I think probably far too early to tell. I would have thought an interest rate reduction to make us all feel good. But I think if we look at our 0.5 million customer base, it's the strong continued to be very strong, and we continue to work very hard to support the tail of our customer base. But I'd say our customers are in reasonably good condition, actually, going into the second half.

[indiscernible] from Numis. 2 from me, please. So first of all, just on higher-priced kitchens, just a bit more detail on how things are going there. What's gone right? What's maybe not gone quite so well? And then secondly, historically, a lot of Howdens' market share gains has been through new depots. But if we look through maybe since 2019, where you've clearly taken a lot of share, how should we think about the mix between new depots gaining that share, and actually matured driving market share gains? And I think as a sort of supplement to that, looking forward, should we think about mature depots continuing to outperform the market and being a bigger driver of that market up for...

Yes, it's good question, Christian. Thank you for that. Look, we -- I think one of the things that we have done well is because a lot of businesses getting excited about an increased higher value of kitchens and moving up market. And I think there's probably a history of businesses that have done that and got excited about the high value end of the market and ignore the opening of mid-priced we have absolutely not done that. Kitchen cabinet volume is critical for us. And our mantra in the business is about [ 0 to 2k ] kitchen driving volume, be that with cancels, be that with buy-to-let, wherever those kitchens get those, that is vitally important for us. And that has been a very healthy part of our business, sort of our first segment, [ 0 to 4,000 ] pound kitchen, very healthy segment. The mid-price as well competed around, and you'll have seen some of the innovation that we're bringing in to make sure that we've got a strong second half in the mid-price kitchens, but that's where most people can compete with us at opening. It's a -- it's a [indiscernible] area in the mid space. The top end is very exciting because it's our -- we bring our ability on our common [indiscernible] platform to bring a really high-quality door with a solid surface worktop, light it well, and you really are challenging the independents at a price point that is really surprising. Leaving money for the builder, great experience for the end customer. So we continue to do that. We are not stopping innovating there. So you'll see a brochure at the back of the room and a range [indiscernible] testing it a minute. It's a complete in-frame solution, makes it easier for the builder and it will shock some of the independence when it hits the market in volume. And we think we have a lot to do. You add that with paint-to-order service at pace and our fitted solid surface offering at pace, and it's very, very hard to compete with. So it's going to be a slow, low burn and we will continue to grow in that space very effectively. But we're making a massive difference. And of course, it all ties into how we position the brand online, what the depots look like in the reformatted offering, which is just substantially different from how it's before. It still feels like a trade environment, but it's a brilliant place for our trade customers to do business with their customers, and we've got good at that. So we're encouraged for what's happening in that end of the kitchens. Lots of room for growth. I mean it's our smallest market share, and we still think we're around single digits on the better end of the market with lots to go after, but not forgetting opening price and mid-price. Look, I think one of the things I identified when I joined the business with a mature depot estate is it is where the gold is in this business. We've got an opportunity to get up to 1,000 depots. And we always talk about depos maturing at around 7 or 8 years. But I'm taking you up to our Glasgow depot, where our manager, Davy run it, and he has consistently grown that depot despite us opening, I think, 4 depots within his catchment. And he is going to hit a significant numbers this year. He's going to hit a number that we've not seen yet, is what he tells me. We've now broken through that barrier. So the reason why it's going -- the opportunity for us to go to mature depots is all the other activities that I've described. So it's the refit program. It's the rebranding. It's the innovation that we're bringing through in product. It's the Click and Collect service, which just makes it so easy for our customers to interact with our depots. It's amazing stock availability. It's XDC supporting extra range as you go into the tail. So I would always take my read by some of our best mature depot managers, and they're in pretty good place.

And just adding a bit more color on that. If you bridge back to 2019, for instance, and you look at the sales that's been about -- that's grown by 48%, it's very clearly half of that is price and then half of that is volume. Then when you dig into the volume, you see within that the benefit of some of the new U.K. depots, but you're also seeing quite a benefit from volume and mix and a lot of these initiatives starting to sort of contribute into the business thing by HWS would be a part as well. So that shows that we are -- that those initiatives are adding long-term value and supports our sort of continuation of the investment and, therefore, the opportunity as we continue to grow.

And this is happening in the market that's under pressure. So if something changes, it improves. We are incredibly well placed.

It's Charlie Campbell with Stifel. Just a couple of questions, please. Could you just remind us where we are on the percentage of product manufactured in-house? And then also just remind me kind of what's euros and dollars within that? So apologies, I should know. And just your aspirations, whether that's changed, just where that percentage might get to. And then the second question was on XDCs, I think when you first talked about that you said that these would reduce the amount of cross-depot shipments coming in, I just wondered if there's any KPIs you could share with us on that to show the progress you've made on that front?

Yes. I'll start with the XDC one because it is very interesting. And when I was taking over the business from Matthew, one of my early observations was our split between A, B, C and D SKUs in the estate. You'd expect far more emphasis and A and B fast sellers, we were actually pretty even across the estate and we've completely reshaped that with most of our cash being in As and Bs, and then the XDCs. But it was also observing the amount of [indiscernible] that transfers that were going on that was at least 10 million pieces being moved in between depots, and we're well below 1 million pieces now. And there's a lot of benefit from that, in that you'd be in a depot with particular responsibility around arranging stock for a customer and you'd be spending a big portion of your time finding out stock, sending vans to go and pick it up. It's not a factory fresh product when the customer gets it. But it's a distraction from what some of those teams in the depots should have been doing and it gives them more time to do little things we're going to do, especially is sell kitchens and joinery and take care of our customers. So that has been a brilliant game-changer for us in terms of availability and customer experience, but it also gives the opportunity to bring more product to market, given the box doesn't change any size -- it doesn't change its size. But it also means further on down the line, it's supportive to margin. Because the best way of not encouraging exit stock or a red bucket, as we call it in our business where the managers got accountability ex stock, it's not going to stop there in the first place. And if you're focusing on As and B SKUs -- and we've not reduced stock levels in the depots at all, we've just invested heavier and faster sellers, you're not creating trapped stock, which can be a problem. We can remove trap stack and bring back, [indiscernible], but use a lot of value -- we use a lot of value in it. So I think XDC has helped us and probably our depot managers, who were all sat here would say it's one of the biggest things that has been a huge use to them, and it's driven customer experience. On manufacturing, we manufacture around about 1/3 of our volume and a bit more by value towards 3%. We would have an aspiration over the coming years to make that 30 more like 40. I think that sort of feels about right. And then on might be half of the value, somewhere around that to give you a guide. And the stuff that we are incredibly strong at is cabinets and panels and some of the detailed high-margin, low-change type product that we can get ourselves very busy on. But the fact you're also curious about what else they can work on or if there's any joinery products and so on that might get involved. So we've been thinking through how we increase our cabinet volume capacity to hit our 5-year plan, because we have growth in France, growth to 1,000 depots, we have investments to make over the coming years in those. But that's probably the best guide we'll give you at the minute. Euros and dollars...

Yes. If you look at this in terms of, as Andrew sort of explained, we manufacture a fair amount of our product in the U.K. The products that we then intend to look and source that more sort of around Europe would be things like kitchen front tools, appliances, those sorts of items that are more defined in euros. And you're looking at a spend in euros of about EUR 190 million, something like that, in the mix of things from that. And then other currencies would pick up, things like product that's shipped further, so doors and things like that, that are more so the dollar driven.

Shane Carberry from Goodbody, two from me. Just with regards to France, first of all, you gave good color around kind of the rollout in 2024. I'm just thinking beyond that in the medium term, you mentioned that maybe 20 was too fast a couple of years ago. But do we get back to that sort of level on a 2, 3, 4-year sort of view? Just how should I think about the kind of pace of rollout there. And then the second was just regards to Ireland. You mentioned how kind of, I suppose, differentiated your product is or the offering is in Ireland versus peers. How have competitors reacted? And 2 years in now, does it make a think any differently about just how big proportion of Ireland could be to you?

Yes. Yes. Thanks. The French question around how many we roll out, we will build back up to that sort of figure again, but we'll do it more steadily. So we will open depos next year, and we'll grow our confidence again in doing that. We will not jump back to 20 in one go, even though we know there are opportunities and markets and so on, because it's about building the capability, building managers. You've got the capability to run an entrepreneurial depot in their way. And the work that Zoran has been doing on acquiring managers to our standard area managers to the standard operating and hirings in depot is working very well. So we will continue to build capability within depots, grow the scale, and then those people will go off and run depots. So we're making good progress in that. And then of course, having a French national running it, who will know people in the market also helps a lot as well. And I think the systems work that we've been doing, like the system tab that we talked about, it supports managers. It Doesn't Take control away from them, but support managers in knowing what reorder points they should have. We put it into the business. It systemizes a bit more. It doesn't take power away, but just empowers them a bit more and get some more opportunity to serve customers and sell. But what Zoran is doing so brilliantly in France is really bringing that drive, that real strong selling culture that we have as well as operational excellence. So 2 things brought together and heightened. You have to go at work and by -- to work to sell kitchens. People just don't walk in, like they do for a pint to milk. You have to go at it, hunt it down, build account basis and work it out, and we're effectively doing that. Ireland, I mentioned earlier, it's great. There's, what, 5.1 million people or so in Ireland. We recently compared it to Scotland before where they're about 5.4 million. And in Scotland, we've got 86 depots. We would look at some of the population densities and it's quite dramatically different between Ireland and France. And we would keep our eye on what Screwfix were doing in Ireland, and they've got -- approaching 40 depots and we like being next to us -- and I think they like being next to us. And so we -- I think we'd have our eyes on something like 40 depots serving that population. If I would do a guess, 40, maybe 45, something like that. As the competitors reacted, it's not -- it's very fragmented, but I think the market is very fragmented. I mean we've probably become the #3 player overnight since being there and only operating for a couple of years. The team keep on reminding me, we're only just trading here for 2 years. The business is running twice the size it was last year. But yes, all to plan. I think we're a tough competitor to compete with, I think, because it's ridging cabinets, where our design service is incredible, the product offerings rise, we're in stock. And we'll do what it takes to take the market.

Sam Cullen from Peel Hunt. I've got 3, if possible, sort of follow-ups. First is going back to bedrooms and probably bathrooms as well. Is there any investment you need to make in the factories that expand the range of products there? Both as we're all -- pretty rectangular in terms of the products and offer at the moment. Is that just repurposed kitchen design? Or is there more stuff you need to invest in as you grow that? The second one is more sort of conceptual one, on the take up of what I might call the higher price, I guess, ancillaries whether it's kind of Quooker Taps, [indiscernible], flooring, paint to order. Are you selling a great deal of those products? Or do you view them more as a ticket into the customer to put more cabinets through the factories? And then the third one is, I guess, back at in both France and Ireland and the relative kind of differing levels of success over the last 12 months. And do you -- the French market is sufficiently sort of service based in terms of -- you kind of alluded to the fact that these improved the management skills a little bit. Is that in some sense that the reciprocal of the market's desire for that level of service?

Yes. The bedrooms were -- we were not doing much bathrooms at all. Some kitchens are repurposed and used in bathrooms, and there's a small business there that we're very happy to take. But we've tried bathrooms, I think you need to do the [indiscernible] if you want to get really involved in that category. So the focus would be on bedrooms. From a manufacturing point of view, it couldn't suit us any better. Actually, it's similar stuff. We back the range into what we sell in kitchens. We smartly thought about cabinet sizes. So our builders are used to the cabinet shapes and sizes that we're using in the bedrooms. It's really very little to do on bedrooms. Some items that we're buying in, like the drawer box, is slightly different from a kitchen drawer box. It tends to be wood drawer and a metal one. We're buying those in at the minute. The factory may decide to do something different on that later on. But from a manufacturing point of view, we're good. We are highly commercial and when we take it from a product point of view. We've built a relationship with Quooker Taps. We're doing it for all the right reasons. And we're also keeping Quooker on their toes by having an opening price and a mid-price underneath it to ensure that we've got a fair offering. But these are -- I have a very strong view that people want better things over time. And one of the reasons why we're doing so well in solid worksurfaces. People understand performance and longevity of it. And many of our customers will be prepared to trade off a top end or go to the mid-end of the range and use the 2 or 3 that's depends, it's available there to invest in a solid surface from than doing chipboard-based, laminate-based worksurface. And there are conveniences like a hot water boiling tap. If you don't own one, you need to get down to your local Howdens store and buy one because they are unbelievably convenient, you'll throw your kettle away. So our fitters like to fit high-quality trade product. Our cabinet is one of the best cabinet in the industry. It happens to be the most sold cabinet in the U.K., but we are obsessive about the quality of it. And when our fitters are fitting Karndean flooring, they love it. And many of our fitters are saying they've tried it, they don't want to try anything else because they find it so easy to fit. But our trades always want no call back quality, but you've got an end consumer that also who is becoming more demanding, well informed, well informed on colors, well informed on styles. Spend half an hour on Pinterest and your possibilities become amazing. We've got some amazing technology today that's [indiscernible] going to bring into the business later on to help customers and customers visualize what vacations might look like. And state-of-the-art stuff where you can pick a range and a style and then drop different colors on it, we'll have that to market quite soon. And we think that will help with lead bank generation, help with lead bank conversion, because we understand the customers want more. But very comfortable where we're taking the product. Because I made the point earlier about we are not losing the up in price, we're also not designed -- we're not denying ourselves the opportunity of selling better product as long as it's done at the right price and the builders can make some money out of it. Selling Quooker taps is a good example. It's a big business for us now with Quooker. And we don't deploy the stock into the depots. In the old model pre-Howdens, the Quooker tap range is actually quite big. It's quite wide. And if you add on sparkling water functions with hot water boiling functions and different tap options, you can find yourself in such a mess from a stock point of view. So we hold one stockholding location in our Raunds facility and we can access the depots, it works brilliantly. No discontinued stock and issues that stock is not tied into the depots. I think that was the question. France and Ireland. I think I'd probably go back to the same point I made earlier. These -- the way we do business and what we sell French customers no different from U.K. customers and builders appreciating the quality of product that we sell. We've just done a kitchen in a French property my wife's mother owns. And the only piece we sort of couldn't help was taking this wall down between the kitchen and the living space. And as my wife is signing up different builders, the first builder came on the phone and said, come Tuesday and we'll give you a quote. And said -- and this is in [indiscernible], about 1.5 hours from our nearest depot. And said, "You're obviously doing a kitchen, where are you getting a kitchen from?" My wife smartly said, "We haven't decided yet." And he said, "I'm working with this fantastic British business called Howdens joinery." And kind of encouraging when you know word of mouth is spreading like that.

We've probably got -- start bringing it to a close, I think, and this is my final question, it looks like. Okay. Thank you, everyone.

Thanks very much, everybody.