M.P. Evans Group PLC (MPE.L) Earnings Call Transcript & Summary

Good afternoon, and welcome to the M.P. Evans Group PLC Final Results Investor Presentation. [Operator Instructions]. Before we begin, I'd like to take the following poll, and I'd now like to hand you over to Peter Hadsley-Chaplin, Chairman. Good afternoon to you, sir.

Good afternoon, ladies and gentlemen. Thank you very much, Alessandro, and thank you all very much for joining us for this presentation following the results of our 2022 results that we announced yesterday to the stock market. A number of you will be familiar with us, and with us personally. I'm Peter Hadsley-Chaplin, Chairman; Matthew Coulson, who is Chief Executive; then we have Chandra Sekaran, who is currently in Malaysia, but runs our Indonesian operations; and Luke Shaw, some of you may not have met Luke who joined us in July, who is our Chief Financial Officer. So thank you for joining us. This is rather a special year, which we are -- where we're celebrating 150 years of our history going back to the early 1870s when Matthew Pennefather Evans started trading in tea. And as I say, the rest is history. We've been involved in tropical agriculture ever since then, in tea, in rubber and more recently, the focus has been on palm oil and sustainable Indonesian palm oil. We've also, over that period, been involved in Australian agriculture of various source. But today's focus within recent years is on Indonesian sustainable palm oil. And for those shareholders amongst you, we look forward to welcoming you to our AGM, which is on the 9th of June. And this year, we're choosing to hold it at Mansion House. We'll have the usual meeting an hour earlier than usual at 11 a.m., followed by the usual drinks and canapés. And then shareholders may still register to attend the lunch, which will then follow at 1:00. Places are limited in number, but please do register if you'd like to attend the lunch. So let us take you through our results. I will start off with a brief overview, and then I'll hand over to my colleagues to take us through the rest of the presentation. So we're, as I mentioned, 150-year old company. Following the decision taken in 2005 to sell our small but valuable Malaysian estates and to concentrate on expansion into sustainable Indonesian palm oil, we've grown substantially, not least in the number of our employees. We now employ over 11,000 people in Indonesia. We accommodate, I think, some 16,000 on our estate. So that all feeds into the theme of responsibility that we'll come to shortly. We've invested over $0.5 billion into -- in the last 15 to 20 years into our expansionary program into Indonesia. We now either own ourselves as a group or manage on behalf of our smallholders, our scheme smallholders 56,200, of which some 42,000 is our own. That follows the 2,000 hectare recent purchase of land near Simpang Kiri -- adjoining Simpang Kiri. Simpang Kiri, as you can see, is in the northern part of the -- the most northerly of our Sumatran estates on the top left part of the map. This increases the size of Simpang Kiri's, it almost doubles it to close to 5,000 hectares, which makes it a more economic size unit, and it's likely that we will build a mill there in due course. it's the only estate at the moment where we don't have our own mill. The other red dots are where we have our other operations throughout Indonesia and the blue dots are where our associated ventures are, a small joint venture with SIPEF is the dot on the island of Sumatra below Simpang Kiri, and the dots in Malaysia is our joint venture property development project, Bertam Properties, in which we have a 40% share, which has a value of some USD 40 million to USD 50 million, which has been developed from a plantation into a new township over the last almost 30 years, actually, so in the more mature stages with another 200 or 300 acres still to be developed. We'll talk about our commitment to excellence and RSPO over the next slide, so perhaps we can move forward. These are our 4, if you like, values or 4 strategic pillars, responsibility, excellence, growth and yield. And they all link in, flow on from one to the other. We've been members of the RSPO, strange enough since the time when we went through a big new strategic initiative to sell the Malaysian estates and to expand to sustainable Indonesian palm oil in a bigger way, and that was around the time that the RSPO was formed around 2005. I mean it's absolutely one of our core tenets that we do not deforest, there's no burning and we adhere to all environmental guidelines and considerations and principles of the RSPO. And also beyond our environmental responsibilities, we're responsible owners of the plantations in terms of the social responsibilities. We provide housing, medical centers, schools, which I think Matthew will talk a little bit more about in a moment. But we have increasing responsibility as the employer of more and more people. The responsibility theme comes out excellence by being responsible by building best quality houses, best high quality schools, proper health care, et cetera. We attract the best people, people who want to stay with us. And that, in turn, leads to better and higher standards because we're employing the best people, the best managers, the best harvesters, the best workers in our fields, which impacts on our yields, on our crops, on our production. That's one source of growth. Another is purely the fact that because our plantations as an average are in young age, the crops are growing, the volumes are increasing and will continue to grow from what is actually already in the ground and continuing to grow and produce. But in addition, we do plan further acquisitions. We're in a very -- as you will hear later, a very strong position financially, a very strong balance sheet, and we do plan further acquisitions over and above that which we've recently announced of the land near Simpang Kiri Estate. And the increase in growth in turn feeds into yield where -- and by yield here, we principally mean shareholder returns and indeed dividends to shareholders. And again, you'll see more of that and of our track record and our plans for the future on a later slide. In terms of the results themselves, you can see once again, it's been about increases, increased crop processed. We actually, rather pleasingly in the year when we're celebrating 150 years of our history, we have processed in excess of 1.5 million tonnes of fresh fruit bunches, which is a target we've been aiming for some time. But we will, of course, continue to grow beyond this for the foreseeable future. Both the crop and the production that the crude palm oil produced from it has also grown. There's only a decrease in terms of the operating profit because we're not comparing like-with-like in terms of the 2 years. Last year included a one-off gain of some $13 million from the sale of our final piece of land, but we still owned 100% on Bertam Estate, to Bertam Properties, the joint venture property project I was referring to earlier. But an 18% increase in revenue to well over $300 million, a 5% increase in the average crude palm oil at the mill-gate, the ex mill-gate price, which is actually the critical thing. That's what we receive in our pockets. Decrease in the basic earnings per share, but it would have been at an increase had it not been for last year's one-off sale. We've chosen, given that we've now turned around as for the final point from net cash -- from a net debt position to a net cash surplus. And because of the increases in gross profit, and the fact that we're in such a strong position, we've chosen to increase our dividend once again, 21% increase from last year's normal dividend of 35p per share to this year's total dividend of 42.5p, of which the final dividend, that the dividends are still to be paid in June will be 30p per share. So let me now pass over to Matthew who is going to talk initially about the market.

Great. Thank you, Peter. So I think it's important, as Peter says to spend a little bit of time talking about the palm oil market itself before we get into some more detail on our own operations. So the graph really tells the story here of the palm oil market in 2022. We came into the year already in a higher price environment for palm oil, so prices were in excess of $1,000 per tonne. And here, I'm talking about pricing in cif Rotterdam terms, so not on mill-gate pricing to us, but the quoted Rotterdam price for palm oil. So a very higher priced environment. But then you can see what happened early in 2022. Prices really shot up. And why did they go up so much? Well, really that was a response to the outbreak of the Ukraine war and concerns, not about palm oil but concerns about wider vegetable oil supplies, particularly concerns about what would happen to the availability of sunflower oil, Ukraine being a very big producer of sunflower oil. So looking at the wider vegetable oil market, prices went up across the board. And you can see there on the graph what happened to palm oil prices, they very nearly hit $2,000 per tonne, unprecedented levels. Now with those changes taking place, the Indonesian government decided it was necessary to update the export tax and levy environment associated with palm oil in that country. Indonesia is, of course, the largest producer of palm oil in the world. It produces almost 60% of the world's palm oil. So they increased the levels of export taxes and levies that applied at those higher prices. The other thing that they did, which slightly took everybody by surprise, was in the last part of April and moving into May, they actually introduced an export ban on palm oil. It was something of a surprise given that, as I say, Indonesia produces 60% of the world's palm oil. It's a very large consumer palm oil, but it only consumes by comparison 20% of the world's palm oil, so a big imbalance, which clearly, therefore, an export ban couldn't survive for very long or else Indonesia was going to end up with all of its storage capacity absolutely overflowing. So the export ban only lasted for between 3 or 4 weeks before they realized that, that wasn't something that was sustainable. It did mean, however, that once the export ban was lifted, prices came down as people released a lot of stock into the market. And you can see, therefore, again, on the graph, what happened as a result of that. The good news is that we've then seen a lot of stability in the market since those changes took place. And over the second half of 2022 moving into the early part of 2023, we've seen a lot of settled and stable positions in the market overall. Overall, across 2022, we received to us our mill-gate price, the amount of revenue that we received for selling our oil. We received a mill-gate price of $854 per tonne, and [ our haul ] is already a higher price of $810 on average in 2021. And as we move into 2023, we're seeing mill-gate pricing initially around $750 per tonne, but recent increases of above $800 per tonne, so an encouraging sign as we move into the current year. A word on sustainable palm oil, extremely important for us, something we're absolutely committed to. As it says on the slide, we believe absolutely that palm oil when produced sustainably provides both high-yield and low-cost supply of vegetable oil to what is absolutely a growing global market. All of our areas are developed and managed sustainably. And to be clear, that includes as Peter has already mentioned, no deforestation and no burning. We've worked very hard this year to do an assessment of our carbon footprint, our carbon [ balance ], the first step for us to making sure that as we measure exactly where we stand on carbon, we can then take steps to reducing our carbon footprint. We have a sustainability team based across all of our estates in Indonesia. One of their key priorities is establishing and maintaining conservation areas across all of those estates. Our output could qualify as certified sustainable output, our certified sustainable sales went up again this year. So now almost 2/3 of our output qualifies as certified sustainable output. The certification itself, which is given by the RSPO, the Roundtable on Sustainable Palm Oil, attaches 2 mills rather than 2 estate areas, it's just the way the RSPO works. So as we continue to increase our milling capacity, so that output percentage continues to increase. And you can see one of the benefits on the final pointer on the slide, is we get sustainability premium income from selling our certified sustainable oil and indeed our certified sustainable palm kernels, the other product that we sell. And our income went up to $7.4 million just through selling -- and the extra piece we get for selling certified and sustainable output was $7.4 million of additional income in 2022. Coming back to the first of our strategic pillars that Peter was talking about, our focus on responsibility and what that looks like in practice. When you think about our estates, they're not just for us units of production, they're not just crop milling production. They are communities, a really large number of people live by our estates with their families. So we have more than 16,000 people who live by our estate, so it is important for us to make sure that there are community facilities available for those people living on our estates. And the pictures do a better job of illustrating that than the words, frankly, on this slide. So you get a sense of the fact that we're committed to make sure there's good quality housing available. And then there are other facilities that you would expect to have amongst a concise community. So there are schools, there are sporting facilities, there are medical facilities, there are places of worship available, there are medical facilities, and then there are community halls and community clubhouses, good places where people can gather together. As a community, it is extremely important that these are all part of a rounded estate development. So at that stage, I'm going to pass across to Chandra and ask Chandra to talk through in a little bit more detail on the operations in 2022.

Yes. Good afternoon. Thank you, Matthew. I will take you through the next 3 slides, and my focus will be on group operations. Basically, this slide is on crop growth or crop development. The slide shows the total crop that has been processed in our 5 mills over 2022. The green bar chart shows of the total crop produced in the year 2022, and the orange one indicates total crop processed in the year 2021. When you talk about total crop processed, it's made out of 3 categories. One is our own crops. That is crops that are housed within our own estates, then the scheme-smallholder crops, these are schemes, smallholder schemes that we develop, we manage and the crop comes to our mills. And lastly, is the independent crops purchased from outside vendors to improve our milling utilization. For total crop processed, there was 11% increase. We processed in our 5 mills, 1.5 million tonnes, a little bit in excess of 1.5 million tonnes in 2022 in comparison to 1.36 million tonnes in 2021. Where own crops are concerned, there was a very significant increase of 12%. This is because of palms reaching their prime, young palms coming into ours, et cetera, et cetera. We managed to process 905,000 tonnes of our own crop in comparison to 809,000 tonnes in 2021. It was a 12% increase. Scheme-smallholder crops, too, showed an increase of 16%. For independent crops, we managed to buy 340,000 tonnes in comparison to 327,000 in 2021. So overall, there has been an improvement in the total amount of crop processed in the year 2022. Next slide, please. This slide is about increasing milling capacity. If you look at the slide on the right-hand side, this slide has also been presented last year. It basically shows M.P. Evans' growth in the last 12 years from 2010 to 2023. The dark green bar charts show our own crop being processed. The lighter green shows scheme-smallholder crop that's been processed in our mills. And the orange bars reflect on the outside crop that has been purchased to improve our mill utilization. The linear graph shows our increase in milling capacity. In 2010, we had only 1 mill. Last year, when I presented to you, we were very proud to say in 2022, we had 5 mills. Well today, I'm more proud to say that in 2023, we have commissioned our sixth mill in February in Musi Rawas, and altogether, we have already got 6 mills functioning in M.P. Evans. CPO production was 341,700 tonnes in 2022. 2021, we produced -- we processed 312,900 tonnes. Production cost is, of course, lowest when milling our own crop in our group mills. Production cost from own crop comes up to USD $402 per tonne. The total production costs, which include schemes, smallholder-scheme crop as well as outside crop will cost us -- or [ costed ] us USD 527 per tonne. There was some inflationary pressure in 2022 because of the Ukraine war, notably on fertilizer inputs. And 2022 also saw the benefits of having 5 group mills functioning throughout the year. In 2021, the [ Bulong ] mill was only commissioned in August. So in 2022, we had 5 full mills operating. The group's sixth mill at Musi Rawas was commissioned early in February, and it's in full operation. Margin of cost increases as more of own crop is milled in our own mills. Simpang Kiri now is the only remaining location without our own mill. This will be reviewed, hopefully in the latest or recent purchase of additional acreage around Simpang Kiri. Next slide, please. Continuing our investment, planting is continuing at Musi Rawas. We're just 200 hectares short of 10,000 hectares. We hope to achieve a little bit higher than the 10,000 hectares. We look for suitable land that qualifies in a sustainable manner. Sixth mill, as I said earlier, was commissioned in February, it's up and running. Further, 2,100 hectares was acquired next to Simpang Kiri, increasing the total hectarage in the Simpang Kiri region to 4,800 hectares. Of course, we will review the potential for the seventh mill at Simpang Kiri. We have to calculate the volume of crop available in the surrounding areas and also for extra land that may come in to add on to this hectarage. The group continues to review other potential acquisition opportunities also. With that, I end my operations presentation. I hand over to Luke for the financials.

Thanks, Chandra. So let me take a look at the 2022 results in a little bit more detail. So our revenue grew by 18% in 2022, up approximately $50 million from 2021, really driven by a higher price environment that Matthew discussed earlier, but also due to the increase in production from the group. We also saw a rise in our sustainability premium in 2022. And that was predominantly driven by an increase in palm kernels. And that was really as a result of some strong end market demand in the unit products that palm kernel go into. That higher revenue number and dropped through to the gross profit, and we had our record gross profit in absolute terms of $109.2 million in 2022. However, we did see a slight squeeze on our margins compared to 2021, where we dropped from 37% to 33%. It is pretty much all to do with an increase in fertilizer costs. So the same factors around the war in the Ukraine drove the CPO price higher. Those factors also put pressure on the fertilizer market. A lot of fertilizer is produced out of Russia and Belarus, so most people diverted their purchasing to other suppliers that put pressure on those markets, and in turn increased the price. So we did see an increase, a substantial increase in some of the fertilizer costs that we purchase. We actually purchase our fertilizer in advance. So we were a little bit protected from those higher prices at the start of 2022, but we did see that fertilizer costs hit the P&L significantly in the second half. As a result, though, we still ended up with a gross margin of 33%, which compared to historical levels is still fantastic results. The other area of cost increase, which has driven the total cost of production up from $465 to $527 per tonne is linked to the purchase of the fresh fruit bunches that we purchase into our mills. And there's a formulaic price for the FFB that is linked to the CPO price. So as CPO price increases, so do the purchases of the FFB. Subsequently if it were to go down, CPO price, so too with the FFB purchases as well. So they were the 2 main contributors to that total cost of production increasing from $465 to $527. Nonetheless, that was still a fantastic year from a profit perspective and dropping down to ultimately our earnings per share that was 108p for 2022. That's slightly down on last year, but if you do exclude the one-time benefit from the Bertam land sale, there was a 1.6p increase on earnings per share. As a result of the strong profitability in the year and also as a lot of cash generation, which I'll come on to shortly, we're delighted to announce that we'll be putting the dividend up for the year by 21% to 42.5p from 30p in 2021. And I think that really is a further demonstration of management's commitment to our progressive dividend policy of either increasing dividends or maintaining it. That is something that the group is very proud of. Next side, please, Matthew. So just if we turn that P&L performance into cash. There was really strong cash generation through 2022, over 130% cash conversion, which led us to an operating cash before interest and tax of $132 million. We then used some of that cash to continue with our capital investment program, most notably in constructing the Musi Rawas mill. And we then also used that cash to give back to shareholders through dividends, and we did embark halfway through the year on a share buyback program as well. So as a result of that strong cash generation, we've moved from a net debt position of just over $5 million to a net cash surplus of $33.5 million at the end of the year. We're continuing to pay down our borrowings. So our borrowings at the end of 2022 were $49 million. We continue to pay that down, and we'll continue to do that through 2023. But we are significantly increasing our cash balances through that operational performance at the moment. That leaves us with a particularly strong balance sheet, so an increase in our net assets to $488 million. And that really strong balance sheet gives us the optionality to move forward with looking at potential acquisitions, which we're very keen to do to enable the growth of the business, but also look at how we can return money back to investors as well. We touched on the fact that we purchased some additional hectarage, adjacent or near Simpang Kiri estate in March earlier this month. And that was all funded through the cash that was on the balance sheet. And finally, every year, the group does have an independent valuation of its equity and in particular, its land. So that sort of increase in the year to GBP 14.98 from GBP 12.65 at the end of 2021. And most of that was really linked to some beneficial foreign exchange movement. And we have dollar assets that converted into pounds are now worth more with a stronger dollar versus the pound. But there also was a reflection in that equity value as we moved from a net debt position to a net cash position. So that was also the main contributing factor to that increase in the valuation. So I'll hand over to Matthew now who will take you through a little bit of the outlook for the rest of the year.

Fantastic. Thank you, Luke. So very briefly on outlook. I think we've covered a lot of this in what we've discussed already as we've moved into the first couple of months of 2023, total crop processed is up on the same period last year by 8%. A lot of that increase is supported by being able to secure further... [Audio Gap]

Ladies and gentlemen, I believe we've just lost Peter, Matthew and Luke, we'll get them to reconnect momentarily. And please do bear with us.

So we've seen an increase of 8% on our processed crop in 2023 in the first 2 months. As I was saying, a significant part of that increase is securing more independent crop for processing in the first 2 months of the year. And we've already talked about pricing. So current pricing above $800 per tonne, which is great to see. And I think we discussed both the new mill and indeed further planted hectarage. We're continuing to plant at Musi Rawas, our project in South Sumatra where we've opened our new mill, so that bodes well for further supply of crop to that mill. So we expect to exceed our targeted 10,000 hectares planted at Musi Rawas during the course of this year. And of course, as we continue to plant there, we're not going to stop when we get to 10,000 planted hectares. If we can continue beyond the 10,000 plant hectares, that will, of course, be fantastic. And then as we move further into this year, we very much hope that CPO prices remain strong. By historic standards, there's no reason to say that they won't. We continue to expect further growth in total crop processed. And as we've already discussed, further acquisition opportunities are being reviewed by management. Luke has mentioned our dividend for this year already, so normal dividend for 2022 up to 42.5p. And again, this is a chart you've seen before as well, but it's one we're not ashamed to show it again. We're very proud of our long-term track record of increasing dividends, and you get a sense of that over that long time series in the chart at the bottom of this slide. So really just to summarize, to remind you of our strategy pillars how we're delivering in operations. And you've seen the outstanding results, revenue up, a very healthy gross margin, cash-generative earnings per share, 108p, and we consider it to be exciting prospect for the future. Now I know as we've been talking a number of questions have been coming in, so I'll stop at that stage. So we've got sufficient time to respond to the questions that have been coming in. But what I will do at this stage is just hand back over for a moment to Alessandro at IMC.

[Operator Instructions] As you can see, we received a number of questions at today's presentation and Peter, if I may, if I could just ask you to read out those questions and delegate into team where it's appropriate to do so. I'll pick up from you at the end.

Yes. Thank you very much, Alessandro. Thank you so much, there have been quite a few questions that we've received. Thank you so much for your interest and some good stimulating questions there. We'll do our best to answer them. I think we will have a sort of a clean cut-off time at 1:00. I think an hour is probably long enough for all of you, but we'll do our best to get through the questions in the remaining 20 minutes plus or so. I don't think I need to read the question specifically, but there is one on the long-term impact of -- potential impact of climate change, which I'll let Matthew consider whilst I answer one which is regarding the potential risk or riskiness of being involved in one single country and arguably, in one single commodity in one single country. And as a number of you may know, we have been involved historically in 2 or 3 different countries in 2 or 3 different commodities over the years. But we did increasingly form the judgment to reach the decision that sustainable Indonesian palm oil was the way to go. I mean there are really only 2 countries where palm oil is produced on a significant commercial scale, that's Indonesia and Malaysia. And Indonesia has a significant competitive comparative advantage over Malaysia in terms of the extent of labor that's available, very often, the quality of the soils, which tend to be richer are volcanic soils. The fact that not only is there a greater abundance of labor, generally the costs are lower in operating in Indonesia than in Malaysia. And for us, as a foreign owner, we are allowed, actually, as of recently, up to 100% ownership of our plantations, albeit on a long-term lease basis, not on a freehold basis. But really, over the years, palm oil year after year and year after year has knocked the socks off all the other commodities that we've been invested in, in terms of the consistent yield, the consistent profitability that has afforded us. So although there is arguably a risk, we -- it's a calculated risk and one we're very comfortable with. So I might pass over to Matthew. Every time the debate is on that, and try not to do something terrible with the mouse again and lose everything. I'll pass over to Matthew for this -- for the climate related one.

Absolutely, clearly an extremely important topic. I mean -- it's an area where we have been paying extremely close attention to. I mean, I think what I would say on it at this stage is at the current time, whilst we monitor it very carefully, we've not observed any significant long-term climate [ assessed ] changes on the group's estates. However, this is something I'd say that we're far from complacent about, we continue to monitor extremely closely and perhaps there is evidence of our lack of complacency. Perhaps I can offer a little trail levered for the fact that we will be producing a separate report in addition to the disclosures that you can already find in this year's annual report, a separate stand-alone sustainability report coming up later this year, and that will deal with, amongst other things, climate risks in a lot more detail. So some more reading material to look forward to you coming up soon.

Thank you, Matthew. Perhaps we'll -- given that fertilizer is a significant cost, perhaps Luke can answer this question. What proportion of operating cost is represented by fertilizer costs?

Sure. So I think on first our fertilizer costs, firstly, I'll say is that -- the good news is that we're starting to see a decline in fertilizer costs from a peak in sort of Q2, Q3 last year. So we're now seeing fertilizer costs come back down, which is encouraging because -- and hopefully, that should provide some impact and benefit to our P&L later on in 2023. In terms of proportion, fertilizer cost was about 10% of the operating cost in 2021, and that jumped up to 17% in 2022. So that gives you some indication of just the significant increase that we saw in those prices. But as I say, we're tracking it very carefully, but delighted to say that it is starting to come back down now, which is kind of more in line with the reduction in the CPO price, and we're going to start to see that kind of matching starting to happen.

Thank you, Luke. Chandra, Don't know whether you would like to answer this one. Could you elaborate on the group's ownership tenure, the period of ownership for the leases of its estate? And whether that differs across the estate portfolio? Generally, our leases are for a 30-year term. Is that consistent across our portfolio of estates? And of course, perhaps comment on the fact that we have leases coming up at different times.

Yes, it is consistent. It is consistent because the BPN, the land authority is controlled by the central government. And unless there is something -- sorry -- yes, unless there is some development or some government project going on in our area. So far, we had no problems continuing a lease on our properties to be -- we just renewed the Sumatra [ with our ] leases. And the rest of the leases coming late into 2030 and 2040.

And then generally, they are 30 years, aren't they, Chandra?

Yes, yes.

30-year term, yes. They come up at different times, so that's consistent. And they're always renewed with no difficulty.

Eventually the problems will be the old certificates are measured by compasses and the new ones measuring tools. There will be slight differences in accuracy, that's all.

Right. Thank you, Chandra. There's quite a long question, which incorporates a few questions, but I'll perhaps ask Luke to answer one part of it, which is, can you add any information about the long-term palm oil price used and the discount rate used to compute the DCS, the discounted cash flow valuation of GBP 14.98 per share, which incidentally compares with GBP 12.65 last year. How do you account for the difference between the market price of the shares and this value. Do you want to have a crack at that?

Well, certainly it explains the prices [ on tonnes ] and the discount rates. So -- the discounting cash flows that are used to generate those valuations are long-term cash and projection. So there is a historical considerations taken into those cash flows, and we're not just looking at kind of today's prices. So for the projections that provided the valuation at the end of '22, a future price of CPO was around $650, which is the mill-gate price for CPO. And there was a discount rate used of about 16%. So they were the 2 factors that went into that discounted cash flow calculation. In terms of the gap from the current share price to the GBP 14.98, I'm not sure I have time to fully go into that in this session, but I think it's clearly the underlying -- management is very happy with the underlying value of the assets that we have in the group. And we supply the valuation that we've put into the accounts. And we would like to see that gap close at some point in the future, most certainly.