KMD Brands Limited (KMD) Earnings Call Transcript & Summary

Good morning, everyone. My name is David Kirk, and I am pleased to welcome you as Chairman of Kathmandu Holdings Limited to our 2020 Annual Shareholders Meeting. The Board decided to convene this year's annual meeting as a virtual only meeting given the ongoing uncertainties caused by COVID-19 and the restrictions on travel and gatherings that we have all experienced during 2020. I extend a warm welcome to all shareholders joining us online today through our virtual meeting platform provided by our share register -- registrar, Link Market Services. I declare that a quorum of shareholders is present, and the meeting has been duly convened. I'm also pleased to officially open online voting. Before we start the formal business, I would like to introduce my fellow directors to you. Present with me here in Auckland are Philip Bowman and John Harvey. Joining us by video link from Australia are Brent Scrimshaw and Andrea Martens, and Xavier Simonet, our group CEO and Managing Director. I also welcome Leo Foliaki from PricewaterhouseCoopers, our lead audit partner, who is here in-person today. Present also in the room here today is Chris Kinraid, our Group Chief Financial Officer; and Frances Blundell, Company Secretary. In terms of the format for today's meeting, I will start by making some brief comments about the 2020 financial year for Kathmandu Holdings. I'll then hand over to Xavier, who will provide more details on the achievement and challenges that we've experienced over the past year, including a summary of the group's financial performance and future strategy. We will then move to the formal business of the meeting. There are 4 resolutions to be considered by shareholders today, and these are set out in the notice of the meeting. An opportunity will be given to shareholders to ask questions about or make comments on the items of business on the agenda for today's meeting. All voting on the resolutions to be put to today's meeting will be conducted by way of a poll. To vote, you will need to click, Get Voting Card within the online meeting platform. You would be asked to validate your registration by entering your shareholder or proxy number, which can be found on your proxy form. Once your registration is validated, you'll receive an electronic voting card, which will enable you to cast your votes on each of the resolutions that we will consider today. You can cast your votes on the resolutions at any time during the meeting today. Please mark your voting card and the way you wish to vote by clicking for, against or abstain on the voting card. Once you've made your selection, please click Submit Vote on the bottom of the card to lodge your vote. If you have any issues with registration or voting, please refer to the Link Market Services virtual meeting online portal guide that can be accessed through the virtual meeting web link or call the helpline 0-800-200-220. There will also be an opportunity after resolutions set out notes of the meeting have been considered for shareholders to ask any questions of a more general nature. To ask a question online, you will need to validate your registration. Please use the question function, and your question will be conveyed to the meeting. If you need further information about how to ask a question, please refer to the virtual meeting online portal guide or call the helpline on 0-800-200-220. I would encourage you to send through your questions as soon as you can. Questions may be moderated or combined with other questions where they relate to the same topic. Valid proxies have been received from 350 of shareholders holding approximately 57% on this issued shares. More than 89% of the proxies directed are in favor of all resolutions. The minutes of the 2019 annual meeting held last year have been reviewed and approved by the Board and signed by me as a true and correct record of that meeting. I also note that the company's annual report is available to all shareholders through the company's investor website. Any shareholder who has not received a copy of the annual report in the post and would like to request a physical copy, can do so by contacting the company secretary or our share registrar, Link Market Services. We will address any questions from shareholders in the annual report, financial statements and the general business later in this meeting. The first item on today's agenda as me as Chairman, to make some comments on the 2020 financial year. The 2020 financial year has been transformative for Kathmandu Holdings. The 31st of October marked 1 year since the company completed the successful acquisition of the Rip Curl brand. Kathmandu Holdings Group now consist of 3 iconic inspirational brands, each for the loyal customer base. The acquisition of Rip Curl diversified the group's geographic footprint, channels to market and seasonality profile. So 3 brands Oboz, Rip Curl and Kathmandu are culturally aligned with a shared focus on brand differentiation, technical innovation, quality, customer engagement, and sustainability. Our portfolio of brands provides us with leverage opportunities in sourcing, supply chain and systems and work is well underway to deliver operational experience in these areas -- excellent, I should say, in these areas. The group responded quickly and decisively to the COVID-19 pandemic. Company raised $207 million in additional equity in April 2020 to fortify the group's balance sheet. Operational costs were reduced and synergy opportunities accelerated where possible to minimize expenditure across the group's business operations. As a result, the company ended its financial year on the 31st of July, 2020 well positioned for future opportunities with significant debt facility headroom. Our brands have the capability and capacity to rapidly scale up to meet the increase in demand for online orders during the lockdowns which began back in March, which further confirms the group's strategy to deliver an omnichannel experience for the customers. As restrictions in various countries eased throughout May and June, we saw a strong rebound in sales across each of our 3 brands, reducing the inventory on hand and generating strong cash flow. The company ended its 2020 financial year, well positioned for the future with a strong balance sheet. On behalf of my fellow directors, I would like to thank management and the wider team across our brands for their outstanding resilience, flexibility and ongoing commitment throughout the challenge of the COVID-19 pandemic. I would also like to thank all our shareholders for their continued support over the past 12 months and into the future. I'll now ask our group CEO, Xavier Simonet, to address you.

Thank you, David. Good morning, everyone, and thank you for joining us at today's annual meeting. If we look at the current slides, well, the 2020 financial year was certainly a unique year, whereby we have had to navigate very challenging conditions. However, it was also a transformational year for the Kathmandu Group with the acquisition of Rip Curl being completed in October last year, positioning our group as a truly global outdoor lifestyle and sports company that is underpinned by 3 iconic inspirational brands with loyal customers. Rip Curl has certainly brought to the Kathmandu Group key diversification benefits across geography, sales channels and seasonality. Our global reach has been extended across key markets in Europe, North America, South America, Asia and Australasia. The addition of Rip Curl has not only expanded the group's global footprint, it has also diversified the group's sales channels, adding significant wholesale and licensing revenue streams. The group now has 325 own retail stores, 10 own online sites, 233 licensed and joint venture stores and over 7,500 doors globally. Rip Curl summer product focus also has helped to diversify Kathmandu's history equating towards winter product categories. Following a successful winter season for Katmandu, Rip Curl has made a strong start to the current summer season, which I will come to shortly in the trading update. Our expanded portfolio of brands provides us with opportunities to leverage common sourcing, supply chain and systems, and work is well underway to deliver operational excellence in these areas. Rip Curl and Katmandu are now working together to enhance the customer loyalty approach for each brand. There's a good opportunity for Rip Curl to leverage Kathmandu's existing expertise in this area. On the other hand, there remains a significant opportunity for Kathmandu to leverage Rip Curl's proven wholesale expertise, relationships and global network to extend into new core markets when the time is right. We are very pleased with the successful acquisition and integration of Rip Curl into the group. Rip Curl's commitment to brand differentiation, technical excellence, innovation and sustainability is very aligned with Kathmandu's culture and goals. Finally, Rip Curl is a strong cash-generating brand, consistent with Kathmandu and Oboz. Turning to Slide 6, which briefly covers our response to COVID-19. The second half of the 2020 financial year presented many challenges given the COVID-19 pandemic. Our response was swift and strong in order to manage the impacts of COVID-19 on our business. First and foremost, we acted to protect the safety of our customers, team members and suppliers. We undertook a $207 million equity rising to preemptively fortify our balance sheet, reduce net debt and provide liquidity. We also suspended the payment of dividends. In conjunction with this, we enacted structural cost reduction initiatives that accelerated synergies across the group and underpinned around $15 million in annualized cost savings. Our prudent operational and capital management and the strong cash-generating ability of our brands means that we are well positioned to respond to current trading conditions and pursue attractive growth opportunities that may arise. Slide 7 shows the sales and profit results from the 2020 financial year. This result reflects the impact of COVID-19, which we estimate to be a reduction in revenue of about $135 million. Total sales increased to $801 million, reflecting a 9-month contribution from Rip Curl since being acquired. Retail sales -- sorry, retail same-store sales growth was stronger post-lockdown than pre-lockdown for Rip Curl and Kathmandu when adjusted for COVID-19-related store closures. Rip Curl benefited from an increased opportunity to surfing, while consumers work from home and demand for technical surf products was particularly started. Kathmandu had a successful winter season as demand for core warmth and leisure products, post-lockdown was strong and offset reduced travel-related purchases. Pleasingly, group online sales increased by 63% to $106 million, which reflected the online capabilities we have built, and this allowed us to rapidly scale up to meet high levels of online demand as consumer preferences changed. Other financial metrics were lower with underlying EBITDA of $83.4 million, reflecting the impact of COVID-19 on trading. Underlying NPAT was $31.5 million, which excludes $22.6 million in nonrecurring costs. Looking at Slide 8. This provides an overview of the strengths of each brands. Each brand is distinctive and iconic and has strong financial fundamentals, highly credible and technical products and a loyal customer base. We believe that now more than ever, strong brand identity is critical. We certainly have this for our 3 brands with category-leading products, and we believe that each brand is well positioned for continued growth. Slide 9 highlights our priority to provide industry leadership in sustainability, particularly on circular economy principles across all aspects of our business. An ongoing goal for the Kathmandu brand is to achieve net 0 environmental impact by 2025. In addition, we aim for all direct suppliers to meet our minimum expectations on social and environmental impacts. Rip Curl has scored a B+ in the ethical fashion report for the second year running and will continue to strive towards improvement along with Kathmandu and Oboz. We are focused on using recycled materials across our brands. Kathmandu uses 100% sustainable cotton, recycled plastic bottles through the REPREVE product ranges, and has moved to solution-dyed fabrics to save water. Rip Curl uses 30% recycled plastic in packaging and uses Forest Stewardship Council certified recycled paper in swing tags. Oboz launched the Sypes and Bozeman collections, containing recycled materials and algae bloom insoles. Diversity has also been a focus of our group. Kathmandu has obtained the Rainbow Tick certification in New Zealand. And the Oboz team's gender diversity has improved with 41% female representation amongst staff. Moving on to Slide 10. Our strategy has not changed throughout this challenging period. And in fact, it has been further reinforced. We are a global outdoor lifestyle and sports company, underpinned by iconic brands and technical products with a focus on sustainability and customer engagement. We have been building a portfolio of brands that provides diversification across geography, channel, product and seasonality, which will allow us to meet global year round demand of customers in the outdoor sports and lifestyle categories. We're now starting to leverage this portfolio of brands with plans to deliver operational excellence in sourcing, supply chain and systems. We will continue accelerating digital transformation and driving margin expansion through synergies and leveraging the complementary expertise and core capabilities of our brands. We plan to grow each brand by maintaining a relentless focus on core customers, delivering solutions to their needs and enhancing customer loyalty. Each brand will continue to bring to market technical, differentiating and sustainable products and accelerate expansion of the direct-to-consumer business. Throughout this journey, we will remain true to our values. Sustainability is part of our DNA and is ingrained in everything we do. We also embrace diversity and inclusion in the workplace, and we build strong ties with local communities. Slide 11 shows the 6 key pillars that anchor our operating model. We adopt a decentralized model. Our structure and operating principles, ensuring that our brands, Rip Curl, Kathmandu and Oboz, have a high level of autonomy, accountability and agility within the group requirements. This decentralization doesn't mean that our 3 brands operate exclusively from each other. Rather, the brands collaborate to leverage their respective strengths and built on each other's competitive advantages over time. Organic growth is a priority for our group, and we will commit significant resources to develop each of our brands. We aim to provide a seamless customer journey and experience through relevant commercial channels, and we will accelerate the implementation of digital technology into all areas of the business to fundamentally improve how we operate and deliver. This will all be done with the goal of engaging core customers and driving long-term loyalty to our brands. Turning to Slide 12. I will now provide an update on FY '21 trading and the outlook. Group total sales for the first quarter were up 72% on prior, benefiting from the transformational acquisition of Rip Curl. On a pro forma basis, compared to the same period last year, including 3 months of Rip Curl -- its acquisition, the trading results have been achieved. Group direct-to-consumer same-store sales, including online, for the 16 full weeks ended the 15th of November 2020, were down 7.6% adjusted for lockdown closures. Rip Curl was up 26.8%, with retail stores trading strongly in all key global markets were open. Katmandu was down 26.8% adjusted for lockdown closures due to impacts from low footfall in CBD and tourist store locations and lower demand for travel-related purchases. Including store closures, group direct-to-consumer same-store sales were down 24.1% with Rip Curl down 1.7% and Katmandu down 37.7%. Group online sales for the 16 full weeks were up 37% above last year. Group wholesale sales for the first quarter were down 14.4% below last year. Group EBITDA for the first quarter was in line with last year's pro forma results, including government subsidies and the realization of cost synergies. COVID-19 has continued to impact trading in key markets at the start of FY '21. We've had 60 Greater Melbourne stores closed for most of the first quarter and 14 Auckland stores closed further 2 weeks. Airport stores in Australia as well as Rip Curl stores in Hawaii and Europe are still heavily impacted by either COVID-19-related travel restrictions or government mandated lockdowns and closures. We are very pleased with the performance of Rip Curl in its key markets of Australia, Europe and North America, which highlights the strengths of Rip Curl's global brand and innovative products as more people take to surfing. Encouragingly, wholesale selling for Rip Curl for the second half year is broadly at pre-COVID-19 levels. As for Kathmandu, camping and footwear categories have overperformed, but have not compensated for the impact of COVID-19 with low footfall in CBD and tourist locations as well as lower travel-related purchases. Oboz performance has been robust with strong sales to key accounts and the forward order book tracking above pre-COVID-19 levels. All in all, we are realizing the benefit of a diversified group, with strong performance in summer weighted product categories for Rip Curl in all key geographies following successful winter training for Kathmandu. The group's half year results will be dependent on the key Christmas trading period to come, and the impact of COVID-19 on consumer sentiment remains a risk. The group continues to maintain a strong balance sheet and liquidity position, which means we have the flexibility to respond to trading conditions and pursue attractive growth opportunities that may arise. Also, the group intends to resume dividend payments, subject to market conditions and trading performance following the first half results. That's now the end of my presentation. Thank you for your attention. I want also to thank all our teams globally for their resilience and passion for their brands. They've done an outstanding job. I will hand back to David to run through the formal part of the meeting. Thanks, David.

Turning now to the third item on today's agenda, the reelection of directors. The NZX listing rules require that a Director must not hold office without reelection, past the third annual meeting following the director's appointment or 3 years, whichever is the longer. Pursuant to the NZX listing rules, John Harvey, Philip Bowman and Brent Scrimshaw all retire at today's meeting and offer themselves for reelection by shareholders. The Board unanimously supports the reelection of John, Philip and Brent. Information about each of John, Philip and Brent is contained in the explanatory notes to the notice of today's meeting. I will ask each of John, Philip and Brent to briefly address you as we move through each of the resolutions. To comply with the listing rules, it is necessary for each Director to be appointed by a separate resolution. I now move the following as an ordinary resolution that Mr. John Harvey, who retires at the annual meeting and is eligible for reelection, be reelected as a Director of the company. And I now invite John to this meeting.

Thank you, David, and good morning, everyone. It's a privilege to put myself forward to you for your support to continue as a Director of the Kathmandu Group. You have a strong board representing your interest at Katmandu, and I am committed to remaining part of that. I was delighted to have the opportunity to become a Director and also Chair the Audit Risk Committee of Kathmandu prior to our initial listing on the stock exchange back in 2009. At that occasion, enthusiasm for the brand then and believe there was so much we could achieve. We've come a long way and delivered on a lot of opportunities since 2009. We've also faced a lot of significant challenges, mostly not of our making, I might add, which have not only -- which we've not only overcome, but have come through bigger, stronger and better equipped in all respects to take on the growing and exciting opportunities ahead of us now. I can assure you that the same passion and enthusiasm that I had at the start, still exists today and obviously extends to Oboz and Rip Curl in addition to Kathmandu. In the interest of transparency, I can confirm that this will be the last time I seek reelection and that I will step aside as a Director as soon as we have a successor as Chair of Audit Risk Committee. I look forward to and appreciate your continued support. Thank you.

Thanks, John. Have we received any questions or discussion on this motion?

Yes. We have received a question from Bruce Parkes. Mr. Harvey's remuneration is published in the annual report was slightly lesser than other directors. Is there some reason?

Yes, there is -- I can talk very briefly to that. Some directors took a pay cut effectively during the depths of COVID, and that's reflected in the remuneration for the year. Thank you for the question. There are no questions on this matter from shareholders joining online, understand. Are there any further questions on the matter? No. There being no further discussion, I will now put the motion. Please cast your votes now for resolution 1, if you have not already done so. Please now reflect either for, against or abstain for resolution 1 on the voting card. [Voting]

Thank you. Now I move the following as an ordering -- we're going on to resolution 2 now. And I now move the following as an ordinary resolution that Mr. Philip Bowman, who retires at the annual meeting and is eligible for reelection, be reelected as a Director of the company. And I now invite Philip to address the meeting.

Chairman, thank you. Fellow shareholders, good morning. I'm Philip Bowman. And it's been my privilege to be a Director of this company since being appointed to the Board 3 years ago at the Annual General Meeting. As David Kirk said in his opening address, it has been an interesting journey over that time. And I'm sure the next 3 years will be equally interesting, but hopefully, without the added burden we had of the COVID pandemic. In terms of experience that I bring to the Board, I was on the Board of Burberry, the luxury brand, based in the U.K. for some 15 years. I was also Chairman of Liberty London. Perhaps more importantly today, I do Chair the Board of what is the largest private owner of shopping malls in the Middle East and Africa. Not only that, but we also have developed a number of our own brands, which are household names in that part of the world. I work with an international Board who have a great experience, both in the real estate and the retail and the data aspects of business that Kathmandu and other retailers are involved with. So it gives me a window on the world as to how the industry is developing, how tenant mixes are changing and the use of big data in terms of targeting customers and actually building brands. In addition, I bringing the knowledge of mergers and acquisition and company financing. I very much seek your support to reelect me for a further term of 3 years so that I can continue to contribute to what I think has been an enormously interesting period for a great Kiwi company. Thank you.

Thanks, Philip. Have you received any questions for discussion on the motion? No, there are no questions. There being no further discussion, I'll now put the motion. Please cast your votes now for resolution 2, if you've not already done so. [Voting]

Thank you. I'll now move the following as an ordinary resolution. We move on to resolution 3, that Mr. Brent Scrimshaw, who retires at the annual meeting and is eligible for reelection, be reelected as a Director of the company. I now invite Brent to address the meeting.

Thanks, David. Well, first of all, let me -- good morning, ladies and gentlemen. First of all, let me apologize for not being at the meeting in-person, for obvious reasons here in Sydney. It's most definitely an honor to be standing and seeking your support for reelection today. Upon reflection, I think the same qualities that first attracted me to the Board of Kathmandu and the business of Katmandu are still evident today. Those things, given the last 12 months, continue to be at the heart and the ethos of the success of the business that you've witnessed. That notwithstanding, that is a commitment to innovation, and I think Xavier touched on the role of innovation, particularly within product and with channel diversification around the world. A spirit of adventure and a connection to consumers that really differentiate this portfolio of brands that we are building around the world. Thirdly, the opportunity to bring my experience of over 25 years in retail, primarily in North America and in Europe with an IT corporation to bear through a global perspective and the continued development of a portfolio of brands that truly diversify both seasonality and also geographically the global perspective that we bring through the marketplace. And lastly, to be part of the Board, and an operating executive group that has ambition. I think through the last 3 years of my participation, hopefully, contribution, strong contribution to the strategy and the operating performance of the business. Those criteria for me are incredibly important into the future. And it's been evident through the transformation of this business in the last 3 years through the acquisition of Oboz and of course, Rip Curl that we are on a pathway that provides me with a continued sense of optimism about the future. And if reelected, I very much look forward to continuing to work with my colleagues on the Board. And of course, serving shareholders and the opportunity to continue to work with the management team of Kathmandu and its associated brands. Thank you.

Thank you. Brent. Have we received any questions for discussion on the motion? No. There are no other questions. And there being no further discussion, I will now put a motion. Please cast your votes now, this is resolution 3. [Voting]

Thank you. The fourth item on the agenda is to authorize the directors to fix fees and expenses of PricewaterhouseCoopers as the company's auditor. Therefore I move to record that to continue in office as there's a company's auditors in to authorize the directors to fix the remuneration of PricewaterhouseCoopers for the ensuing year. Have we received any questions or discussion on this motion?

Whilst Kathmandu has an audit rotation and independent policy, it does not appear to have one on [ tenure ]. How long have PwC been the auditors? And has the Board given thought to tendering the audit work? This was the question from [ Jennie Miller ].

Okay. Thanks, [ Jennie ]. I can certainly answer the second part of that question. I'll pass the first part to Chris Kinraid, our CFO. Yes. The Board has given thought to tendering the audit work and doesn't tend at the right time to go through that process. Chris, how long PwC be our...

PwC have been the auditor since the listing in 2009.

Right. Thank you. There being no further discussion, no further questions on this motion, I will now put the motion. Please cast your votes now for resolution 4, if you have not already done so. [Voting]

Shareholders should ensure they have now submitted their votes, for all 4 of the resolutions set out in the notice of today's meeting. The voting will remain open until the conclusion of the meeting. Once voting is closed, Link Market Services will tally the votes. The votes will be announced to the NZX and ASX once accounting has been completed. Thank you.

I would now like to give shareholders an opportunity to ask questions concerning any matters addressed at this meeting or of a more general nature concerning the company. Anybody who now wishes to ask any further questions, please ask your questions using the Ask a Question button. If we run short of time and are unable to answer your question online today, we'll certainly respond to you after the meeting. Do we have any questions?

The first question is from Bruce Parkes. Through the summer club scheme, Kathmandu holds a lot of personal information on customers. Are you comfortable that staff has been sufficiently trained with in checks place to avoid breaching the new Privacy Act 2020.

Yes. We are comfortable that, that training has gone on, but we do think that's a very good question. And we take the privacy of the information we gather very seriously indeed. And there was no doubt benefit for us and the necessity for us to continue to train and upgrade our staff and also our systems and processes to ensure the privacy of information. Thank you for that question.

A further question from Bruce Parkes. At balance date, you had $27 million in receivables past due date. Has there been an improvement post-COVID lockdowns? And what are you doing to increase collections?

Thank you, Bruce. I'll turn that one over to Chris Kinraid, CFO of the company as well.

Thank you, David. [indiscernible] We're currently very pleased with the performance of the receivables book and all our territories. So we are seeing an improvement in net collections as the market progresses.

Thank you.

A further question from Bruce Parkes. Has the current shipping holdups had a material impact on inventory levels and giving goods to customers after online sales.

Thank you, Bruce. Again, Chris, would you like to answer that one?

Thank you, David. There's been some on holdups and product getting into New Zealand to 4 weeks, but not of a material nature that we are experiencing at this stage.

A question from [ Sivaswamy Mohan Ratna ]. When does the Board expect to pay a dividend?

You will have seen -- I won't try and pronounce your name, I'm sorry, I could be wrong. But you would have seen that we released a trading update today and in that trading update we made clear reference to the resumption of the intention to resume dividend payments after the first year's results subject to trading conditions, of course. And that remains the most up-to-date information we can give you.

A question from [ Jennie Miller ]. Inventory has increased from $122.8 million in 2019 to $228.8 million into 2020. Why the increase? And what is the strategy to reduce?

Again, we'll turn to Chris. But obviously, the size of the group has increased materially with the acquisition of Rip Curl, which will be part of the answer.

Yes. Thank you, David. That's correct. And that's primarily as a result of the Rip Curl acquisition. Just want to note that actually, we've seen quite a strong improvement in the inventory position in Kathmandu brand at year-end. So inventory levels on an individual brand basis are actually down year-on-year.

As a further question from [ Jennie Miller ]. Your governance code this year-to-date, the remuneration committee carried out an annual assessment of its diversity objectives and measured its progress towards achieving these objectives. This year, the Board believes they are well reflected in the variety of cultures unique experiences in the represented by its teams. How can this be true given 59% of workforce are women, many ethnicities, but only 1 female is on the Board and 1 in the executive team.

[ Jennie ], we believe that's absolutely true because the comment represents the whole organization, not small subsectors of the organization. That said, we do recognize that our Board in particular, and the senior executive team, does have a -- we're at the low end of female gender representation. We understand that. We feel as if the skill and mix and capability on the Board today is absolutely fit for purpose. But we understand that more diversity on the Board and indeed, the senior management team will be good for the company. And we will work diligently towards that in the time ahead.

A question from [ Patricia Richardson ]. Will Kathmandu commit to holding next year's AGM, both in-person and via a webcast for those who cannot attend in-person.

We would have to have a view and understanding of the future to be definitive about that, that we don't have today. I perish the thought but it may be possible that the pandemic hasn't gone away. Indeed, we're in a worst position in a year's time than we are today. Very unlikely, but we can't be definitive about that. We would like -- we can't say we would to hold our AGM with people in-person as well as online. We very much enjoy the interaction with shareholders at this meeting, and we hope we're able to do that again next year.

A further question from [ Jennie Miller ]. At last year's AGM, we were advised that we were no planned acquisitions. The latest trading update mentions attractive growth opportunities. Given COVID and its impact, are there any attractive growth opportunities? And in other words, is Kathmandu looking to acquire another business?

As a general strategy, we would never -- not be able to open to acquiring the right business at the right price. But there is no -- there's nothing on our radar. We continue to scan of course, but we haven't found any business that is available that would be suitable to us at this stage. And we do note that any acquisition we have to fulfill a number of criteria, one of those would be a strong bent towards online sales and capability in online sales. And those businesses have become very expensive during the COVID time shutdowns because they've all done very well, of course, in being able to deliver without people going into stores. Okay. I think that's the last one. Thank you very much for those questions the shareholders have submitted them. I think they're very enlightening for other shareholders to hear the answers to those questions. Ladies and gentlemen, that concludes today's meeting. And I thank you for your continued support and attendance today. And I now declare this meeting close. Thank you.