Michael Hill International Limited (MHJ) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Michael Hill analyst briefing for end of year results webcast and conference call. [Operator Instructions] I must advise you that this conference is being recorded today, August 19, 2020. I would now like to hand the conference over to Mr. Daniel Bracken. Thank you. Please go ahead.

Good morning, and thank you for joining us for the Michael Hill International Limited Full Year Results Call for FY '20. It's a pleasure to be speaking to you today. I am here this morning with Chief Financial Officer, Andrew Lowe. So starting on Slide 3, we will be taking you through a review of the 2020 financial year. We will also provide you with an update on the company's strategic initiatives for the year ahead. And as usual, we will end the session with a Q&A session. Turning to Slide 4. Over the year, the company has made great progress in its journey of evolving from a traditional retailer to a modern differentiated omnichannel jewelry brand. We have continued to leverage the brand's deep heritage as we celebrated our 40th birthday in August last year. And with significant investments in digital capabilities throughout the year, we are well positioned for our omnichannel journey ahead. The retail fundamentals of the business have now been truly cemented into the company's culture and were underpinned by a number of new strategic initiatives, which gathered pace over the course of the year. Following on from the positive sales momentum achieved across FY '19, I'm proud that the company achieved strong sales performance across the first 3 quarters of FY '20 as the company delivered same-store sales growth of plus 11.9% for Q1, plus 4% for Q2 and plus 3.1% for the first 9 weeks of Q3. Having said this, the 2020 financial year has certainly been a year of 2 halves. The first half focused on sales growth as we achieved plus 6.3% comparative sales. And as we entered the second half, we started to see the benefits of our strategies gaining traction as the business shifted its focus to a balance of both sales and margin. Prior to the COVID-19 store closures at the end of March, the business was successfully delivering both sales and margin growth and was tracking to achieve increased year-on-year EBIT. Towards the end of March, due to the nature of the product we sell and the intimate close quarter sales process we operate, there was no choice but to temporarily close all of our stores as the global pandemic took hold. And the company shifted its focus to implementing strategies to navigate through the store closure period, which lasted between 5 and 13 weeks depending on the region and country. As evidenced in our Q4 sales, the temporary closure of all stores globally had a significant impact on the business with an estimated revenue loss of at least $80 million for the quarter. Over the course of the following months, we reassembled the global retail team, restocked our stores and shifted our focus to supporting the business with best-in-class health and safety protocols for both our staff and customers. I am particularly proud of the resilience, determination and agility of our team members across this period, and our safety standards were a standout, which I believe strongly supports our return to trade. Throughout the year, the company has maintained a laser-sharp focus on delivering new initiatives to modernize Michael Hill. Embedding the new retail operating model, the launch of our new loyalty program, trialing laboratory-grown diamonds and a raft of digital developments, just to name a few. We have continued to improve the strategic foundations of the business. Moving on to Slide 5 and to provide a little more detail around key areas of focus and achievements across the year. I'm proud of the key strategic initiatives the business has delivered. Our continued focus on costs was more important than ever this year with the overlay of the COVID-19 pandemic, and this focus resonated across the business. We reinvigorated our teams in both stores and the global support office and worked with our suppliers to improve commercial terms and service levels. We've continued to consolidate our repair network in all countries, delivering lower costs and increased customer experience, and we have made good progress with our credit providers with similar outcomes. In addition, to navigate through the COVID-19 store closure period and beyond, we implemented a number of measures to preserve cash. We negotiated deferred vendor payment terms, tax payment deferrals and rental abatements, and we canceled all discretionary spend while pausing most of our planned capital expenditure. Moving to loyalty. Pleasingly, our long-awaited loyalty program was soft launched digitally late last year. And only 8 months later, we have already signed up more than 200,000 members. Not only are we capturing customer data for future engagement, we're also seeing higher transaction values and improved gross margins. The member pricing aspect of the program is also proving to be a great success with both customers and team members. And there's more to come. FY '20 has proven to be a huge year for our digital business and most notably during the COVID closure period, and Andrew will provide more insights on this topic later in the presentation. Not only did we significantly improve the look and feel of our websites and the associated customer experience, we also reset the navigation and introduced direct selling through social media and digital catalogs. We also launched a number of virtual applications into our ecosystem, including a virtual selling platform, allowing customers to book appointments with a top Michael Hill sales professional and enjoy all the benefits of an in-store experience remotely from the comfort and safety of their own home. This will prove particularly important in the new world of retail we now find ourselves in. And finally, the great progress we have made in how we organize and operate our retail business. Some of you may recall the initial trials of our new store incentive scheme last year. In those trials, it demonstrated increased performance across many aspects of the business, but most notably, higher margins. I'm pleased to say that the new scheme has now been rolled out across all stores in the network, and it's delivering very strong results. The new retail operating model is firmly embedded in the business, and we have significantly ramped up our focus on in-store execution and visual merchandising standards. And off the back of our cloud-based ERP implementation in June, we are excited by the opportunities to optimize inventory and improve store profiling. As we complete what can only be described as an extraordinary year, we have emerged as a stronger, leaner and more professional business. I'm incredibly proud of the strategic progress we have made across costs, loyalty, digital, retail fundamentals and company culture, which I believe have Michael Hill well positioned to navigate both the opportunities and the potential market disruptions ahead. Prior to me speaking to you about the FY '21 key initiatives, which do have an emphasis on growth, I will pass to Andrew to speak to our financial results for FY '20.

Thank you, Daniel. Turning now to Slide 6, FY '20 financial snapshot. As Daniel has described, this was a year of 2 halves as we saw positive same-store sales growth momentum continue for half 1 and also through to the end of February 2020. This followed an underlying EBIT of -- for FY '20 Half 1 of $31.6 million as we started to see the benefits of our initiatives gaining traction, along with the continued focus on costs and retail disciplines. Headline sales and profits were directly impacted by the COVID-19 pandemic, which resulted in all stores across all 3 markets closing for varying periods from late March. More detail on store closure periods in each market is provided later in the presentation. As a result of the temporary store closures, the company reported revenue of $492.1 million compared to $569.4 million in FY '19 and an underlying trading EBIT of $25.7 million compared to $34.6 million in FY '19. Even with the loss of quarter 4 trading days, active inventory management saw inventory levels finish the year in line with the prior year-end. Disciplined cash management also saw a net cash position at year-end, though, with additional rental accruals owing of circa $13 million. It should be noted that AASB 16 Leases was adopted on July 1, 2019. As was the case for the half year, in Appendix H of the presentation, we have again provided a breakdown of the full year profit and loss impacts of the new leasing standard. The details in the appendix set out the new leasing standard impacts across the various P&L expense items, on EBIT and on net profit before and after tax. In respect of dividends, the company has determined it will not declare a final dividend for FY '20. Furthermore, given the impact of COVID-19 and the uncertain economic environment and in order to protect the company's balance sheet and liquidity, the decision has been made to defer payment of the previously declared interim dividend of AUD 0.015. The company's objective is to restore our regular pattern of dividend payments as performance improves and earnings stabilize. Decisions on future dividends will continue to be made in line with the company's financial framework and dividend policy. Turning now to FY '20 key performance results on Slide 7. Other aspects to call out for FY '20 performance include: on an adjusted same-store sales basis, the group achieved positive 2.7% growth in sales. Australian adjusted same-store sales were flat for the year. The New Zealand and Canadian adjusted same-store sales, both up over 2%. We delivered record digital sales for the year of $24.7 million, up 54.7% against prior year and representing a milestone 5% of total sales. Our focus on reimagining branded collections saw them represent a record 37.3% of total sales. Gross margin declined for the year from 62% to 60.6%, predominantly impacted by FX. Turning now to the impact of COVID-19 on store trading days in each market. From late March 2020, the COVID-19 pandemic saw stores closed in Australia for a period of 5 to 10 weeks; in New Zealand for 8 to 9 weeks; and in Canada for periods of 10 to 13 weeks, meaning some Canadian stores were effectively closed for a quarter of the year. In accordance with government regulations and with robust safety protocols embedded, Australian stores reopened progressively from mid-May, New Zealand stores opened in 2 tranches later in May, and Canadian stores opened progressively from Western to Eastern provinces commencing in June through to the final stores opening in early July. In aggregate, the global store closures saw an estimated $80 million of lost revenue for the financial year. By way of comparison, set out in Appendix B are the earnings for calendar year '19 and financial year '19, these being the most recent periods with earnings run rates not impacted by COVID-19. Turning now to Slide 9 with the group results. Group revenue decreased by 13.6% to $492.1 million, largely due to the COVID-19 store closures. As part of our decisive store portfolio management, 1 Michael Hill store was opened and 17 underperforming stores were closed, leaving 290 stores in the global network at year-end. Moving on to our segment results. And first off, looking at the Australian market on Slide 10. This slide and the following slides set out the key performance results for each market. Adjusted same-store sales were flat in Australia. Pleasingly, digital sales increased from $11 million in the prior year to a record $14.5 million. 13 underperforming stores were permanently closed, leaving 155 stores in the Australian network at year-end. We'll continue to consider further targeted Australian store closures in the coming year as part of the group's active management of its store portfolio. Turning now to Michael Hill New Zealand on Slide 11. This segment remains our most profitable, with the highest EBIT as a percentage of revenue at nearly 20%. While 3 stores closed upon the resumption of trade post-COVID, we're broadly comfortable with the performance of the remaining 49 stores in the New Zealand portfolio. And finally, Canada on Slide 12. Pleasingly, Canadian digital sales more than doubled, lifting an incredible 125% to $6 million for the year. With one store opening and one store closing, the Canadian store count held flat overall for the year at 86. Canada remains a frontier for further growth, which Daniel will touch on later in the presentation. And now to provide a bit more color on our digital performance. With positive sales growth in all quarters, the company delivered a surge in fourth quarter digital sales as customers embraced online shopping channels. Fourth quarter digital sales were up over 200% against prior year. Record digital sales of $24.7 million represented a milestone 5% of total sales, up from 2.8% of total sales in the prior year. Key to the company's digital success was a number of digital initiatives delivered to meet our customer needs, as outlined on the slide, from virtual selling and virtual appointments to shoppable digital catalogs and Instagram feeds. In conjunction with the initial online launch of our loyalty program, Brilliance, which has now grown to over 200,000 members, our digital platform has seen a 50% lift in conversion rate during the year. I will now hand back to Daniel to provide an update on the company's strategic initiatives for the year ahead.

Thank you, Andrew, for your commentary on the FY '20 financial results and in particular, your insights on our digital progress. As mentioned earlier, across slides 15 to 16, I'm going to take you through some of the main strategic initiatives for the year ahead, which will be the key drivers of growth in sales and margin for the business. Starting with omnichannel. We will be leveraging the deployment of our cloud-based ERP platform, and we now have the opportunity to embark on multiple digital and physical initiatives to meet the demands of a modern-day customer. We will roll out click and collect, click and reserve and ship from store capabilities. Bespoke customizable product will be enabled through our digital platforms. We will develop drop ship capabilities, linking key vendors directly to our customers. And we are already underway with testing new marketplace opportunities. Moving on to digital. Building on the successes of FY '20, further enhancements to our website will be delivered to improve customer engagement, conversion and transactions. We will embark on the next phase of the Brilliance loyalty program. Our marketing investments will continue to pivot towards more efficient digital channels. And I'm excited to reveal that last week, we launched a new business, a new pure-play digital brand called Medley, an aspirational and attainable on-trend jewelry offer. You can do your own research and shopping, if you'd like, at medleyjewellery.com.au. Medley offers us a real opportunity to expand into the high-margin demifying category, attracting a new customer demographic in an agile and capital-light manner. And next, retail fundamentals. We will further leverage our loyalty program to drive segmentation and personalization with a focus on growing repeat purchasing customers and lifting margins. The new retail incentive scheme will continue to be a key driver for increasing profitable sales and reinvigorating retail store culture with further enhancements planned for the scheme. Additionally, an increased focus on space planning to optimize store productivity and efficiencies. Moving on to Slide 16 and the opportunities in our Canadian business. With a new leadership structure now in place and focused on delivering retail fundamentals, we are confident that the team can continue to increase productivity levels, as demonstrated in the first half. The management of our in-house credit program has been identified as an opportunity to increase margins and sales, along with the potential divestment of the existing credit book. While the evolution of our Canadian supply chain was previously identified as a sizable commercial opportunity, this has been placed on hold due to the pandemic. Reengagement around this initiative is now well underway. And additionally, we are exploring new capital-light growth channels in the Canadian market. And now to touch on product. We have implemented a new structure, a new operating model and calendar and new leadership into now -- are now in place within the merchandise function, and this will deliver positive impacts across FY '21. Range and assortment optimization continue to present huge opportunities across stock turns, purchasing and margins. And with the new ERP platform now in place, we will begin to deliver positive commercial outcomes. Our branded collection strategy continues to gain share at higher margins, and the broader rollout of lab-created diamonds will deliver increased margin and conversion. And finally, an absolute focus on cost disciplines and capital management are forming part of the Michael Hill culture. Optimizing our inventory, improving stock turns and leveraging our vendor relationships are a priority. As highlighted by Andrew earlier, our store network will continue to be a major focus for management. And with an increased focus on store data capabilities and the implementation of dynamic rostering, we believe that a sizable prize exists within our largest operating expense. While Michael Hill navigates the impacts of the global pandemic and the ongoing potential of store closures as currently mandated in both Victoria and Auckland, the business has started FY '21 positively. Pleasingly, gross margin improvement has continued as our investments in strategic initiatives gather momentum. Additionally, the company has identified a number of growth and margin opportunities to strengthen our business across product, digital and true omnichannel offering. I am also excited about the launch of our new pure-play digital brand, Medley. And that brings us to the end of our presentation. I would like to thank you again for your continued interest in Michael Hill, and we are now happy to take questions. Thank you.

[Operator Instructions] Your first question comes from Lily Zhuang from Jarden.

So my first question is just regarding gross margins for -- in particular, the second half. So I note that there's been a noncash inventory impairment of $6.4 million. Can I first confirm if that's included in the COGS reported for the period?

Andrew, do you want to take that question?

Yes. Lily, confirming it has been. So there's $6.4 million this year. I think the impairment of the prior year $6 million also to COGS. So broadly like-for-like impairments across the 2 years to COGS.

Great. And so in addition to that, in the first half of FY '20, I didn't notice any inventory impairment. So am I correct to understand that the $6.4 million is wholly against second half COGS?

Effectively, yes. That's right. Just recognized at full year-end.

Great. So obviously, if I back out that impairment from the second half and doing something similar for the first half of FY '19, so I can compare it on a like-for-like basis. It does look like there's a pretty decent step-up in gross margin from just under $0.62 for last year versus -- sorry, I mean, second half gross margin. So just under $0.62 for second half '19 versus just under 54% for the second half of this year. So that step-up is obviously quite encouraging. Is that the right understanding?

I think we're encouraged by how margin has performed. But I think just to be clear, for both years, the $6 million and the $6.4 million impairment were both just recognized at June year-end for the full year. So I think you need to look at the full years in total, if you like.

Okay. Yes. But then if I -- there still appears to be a gross margin uplift, which I think is quite pleasing.

Yes.

Yes. I mean, Lily, on that, we commented at, I think, our third quarter trading update that we had seen the green shoots in the first 9 weeks of the quarter, a margin improvement. And certainly, when we gave our quarter 4 update, as we reopened our stores around the world, we were definitely experiencing an increase in margin. And of course, online delivering not only increased sales, but online also increased margins as well through the fourth quarter.

Right. Understood. And then probably something you're expecting, that these impairments, do you think that these will be now phased out going forward? Or will there still be a little bit in FY '21? And then…

Well, specifically talking to stock impairments, we believe that we've, over the last 2 years, identified and cleared out problematic inventory and aged inventory within the business. We, as part of our new merchandise operating calendar, have a much more, if you like, in-season activity to work through slow selling lines. So we're certainly confident that we won't be repeating at that scale on an ongoing basis. Will there be a small amount? I -- certainly, we're not planning to have. So it's unlikely, but it is still possible. But certainly not at the levels we've seen for the last 2 years because we've really clear -- if you like, cleared out the errors of the past.

Right. Understood. And then just a second topic I'd like to touch on is regards to working capital. Obviously, you've mentioned in the presentation that you've -- you're improving terms with your suppliers, and I can see that the payable days have increased for this year. So I'm wondering if the increase in, I guess, payables turnover, how much of that would be just a temporary thing like COVID-related. Or would the higher payable days be like something normal going forward?

So it's a really, really well-informed question, Lily and well-constructed. I've actually got a really well-constructed answer for you, which is we started a program in sort of the first half of calendar year '19 to work with our top sort of 20 to 30 product vendors on moving them away from very short legacy payment terms generally with no cash discount applied to a program to lift them on average, Andrew, to sort of 60 to 70 days payment terms. And we already had that in place with 95% of our top vendors by the end of last calendar year, so by the end of the first half. And for sure, that was -- that stood us in good stead for the first half of the year. Yes, there's no doubt, we also added a further layer to that once COVID hit. But I would argue the majority of our extended payables is the result of the strategy that we embarked on about 18 months ago. Andrew, would you agree?

Yes. I think that's right.

I mean there's a modest amount of extra extensions due to COVID but generally, it was already in play.

Yes. Certainly. So yes, extenuating circumstances meant we could agree some additional deferrals, but I think it'd be fair to say, as Daniel outlined, structurally, we moved to improve payment terms, and those payment terms will continue going forward.

And it should be noted, Lily, that we didn't actually bring a lot of inventory into our business in the second half. So the majority of the inventory that we brought in, and therefore, the payables associated with that, were well before the COVID period hit because so much of our business relies around the all-important second quarter. And once COVID hit, we effectively froze our supply chain temporarily. So there was a limited amount of stock coming into the business during the second half.

Your next question comes from Guy Hooper from Forsyth Barr.

Just a couple of questions from me. Firstly, around the comments made in terms of, I suppose, current trading and trading coming out of lockdowns just around margin improvement. Could you just perhaps provide some color around quantum and also just -- is that versus the most recent quarters or just against the same period last year?

The comments around current trade really relate to, obviously, the first 7 weeks of this financial year. We've -- from a monthly closure perspective, we've only closed July. But I can confirm that our July results had sales growth against prior year in all 3 markets, and we had margin improvement in all 3 markets against the prior year -- same period prior year, probably somewhere between 150 and 200 basis points depending on the market of improved margin.

Great. And then you've clearly made a few steps forward in terms of the cost control across the business. Can you provide just a bit more detail around, again, quantum? And then also, how much of this is enduring costs out versus a function of COVID?

I mean I think the majority of our costs that we've managed in our business are enduring. We have made restructuring decisions in our corporate head office. We've made back-of-house changes within our store network. Those changes are permanent changes to our business. We've certainly improved payment terms with all of our vendors across the portfolio, whether that be product vendors or services vendors. And they, again, are improved payment terms on an ongoing basis. The work that we identified previously, Guy, around further costs to come out of our business, I think we identified a $5 million bucket a year ago that would come in, in -- across FY '20 and FY '21, was principally coming from 3 main areas. That was improved terms with our credit suppliers, a rationalization and an efficiency play within our repairer network and improvements in our supply chain and logistics area. It's fair to say -- I think we originally said probably half of that $5 million would come in FY '20 and the balance in FY '21. Some of that was stifled by the COVID impact, probably mainly in the logistics and supply chain area. We have made good inroads and improved credit relationships across the year. They're, again, going to be a permanent feature. The changes to our repair network are a permanent feature. And in fact, further consolidation opportunities apply. And really, the big logistics opportunity that we previously identified was the Canadian supply chain reinvention, if you like. And that is definitely something that's penciled in to start getting focused on in the new calendar year. So in the back half of FY '21, but really won't start delivering benefits until FY '22. So that Canadian supply chain benefit really has been pushed out a year, I think it's fair to say, because of COVID. Andrew, do you want to add anything on costs?

No. I think that's right. I think, Guy, you did touch on during COVID itself, where there are cost savings that arose, yes, absolutely. So standing down teams and then Board and executive sort of impacts in terms of remuneration and the like all contributed. But I think really more focused on those structural pieces going forward that we believe will endure.

Okay. And I mean, you -- the launch of a new brand and rollout, how should we be thinking about group marketing spend going forward?

So it's very much in a test and trial phase. It's a little start-up business at this point. We really wanted to prove to ourselves, I guess, first and foremost, that this was a category that we could play well in. We're confident of that now, now that the website is live and the interest we're getting on it. It's been live for a week, Guy. But it's certainly an area of focus that we've had, I guess, simmering away on the back burner and an area that we've been interested in getting into. And probably most importantly, without it being a big capital exposure for the business, which is why we've deliberately launched it as a pure play-only brand. There's other reasons behind that, of course, as well because it does have a play predominantly to the millennial and the younger consumer that are very comfortable operating in a digital world. The -- in terms of the marketing spend that we've allocated to it, at this point, it will earn -- it will be funded on an earn as it goes basis, if you like. So there are marketing dollars that we've put around it, but nothing significant. But as the brand grows and as the business develops, we will continue to feed the beast, if you like. It'll get what it deserves effectively.

[Operator Instructions] Your next question comes from [ Andrew ] from [ OTT ].

And just a comment on -- I'm sort of impressed on the cash position and the balance sheet you've managed to have the company on at the year-end. Just a couple of questions. I'm just curious if you could expand a bit more on the retail investment scheme -- sorry, incentive scheme. And also just following up on Medley, the website looks good. And I'm just curious, how do you go about sort of publicizing and letting people know that it actually exists?

Okay. Two really good questions, Andrew. In terms of the retail incentive scheme, Michael Hill, I guess, from a historical perspective, has built much of its success on the people within our stores and the selling capability of the people in our stores, and much of that has led to a historical focus on reward and recognition, if you like. And so a lucrative incentive scheme has always been paramount to the successes of our retail performance. However, we formed a view about 18 months ago that it was very narrow in its scope and it was really narrowing what it rewarded the sales professionals for. And we embarked on, if you like, a more balanced scorecard approach, where we could set different KPIs and different performance metrics that we wanted our sales teams focused on and have the ability to vary and flex them up and down depending on business needs. Most importantly, it moves the sales team's priority -- #1 priority from purely a sales focus to a balance between sales and margin. And when we trialed this across an increasing number of stores in the first half of the year, we started with 20 stores, and we -- effectively, we're running sort of A/B test old scheme, new scheme. And we got comfort that the first 20 stores are delivering, I guess, both the cultural and balanced view of priorities. We extended it to 40 and then to 50. And I think we got to October, and we were somewhere sort of 80 to 100 stores in the trial. And as every good retailer does, it sort of takes a pause at the end of October because all-important Christmas trading period, you don't kind of play around with the business. And we said we'd come back in March and roll it out across all of our stores globally. Along came COVID, and that, if you like, postponed that rollout. But we have now -- as of sort of the end of June, we've now rolled that program out across all of our 300-odd stores. And we are seeing both the behavioral changes and the financial performance changes that we saw in the early days of trials now rippling across the whole store portfolio. So we're really excited by the impact it's having. Our teams love it. It's incredibly visible. It's digitally enabled from a dashboard perspective so that they can see real time what they need to do to deliver their own personal financial outcomes, and it's proving a very successful tool that we're excited to continue to test and trial and add further features to in time. So that's the incentive scheme. In terms of Medley, as I said, we -- this has been, I guess, a concept that myself and Vanessa, who runs brand and product and marketing within our business. And, I have talked about and, I guess, had our collective brain power on for probably ever since I joined the business, because we did have a bit of a failed foray, if you like, into the demifying market. And we've -- but we've always known there's an opportunity there for us for our brand. And so we've been, I guess, tinkering away in the background figuring out where we wanted to play and how we wanted to play and how do we learn lessons from the past. And probably most importantly, making sure that any test and trial in this space is very much capital-light and hence, why it's a pure play online-only venture. This product will be -- is not and will not be available to purchase in a Michael Hill store, and that's a very deliberate brand positioning as well as execution positioning that we've made about the brand. It's only been live for a week. So very much we're using the first 4 to 6 weeks to just make sure that the back end and the front end are functioning properly, and we're getting a lot of interaction with customers and our own team that are testing it. Before we really want to push out any marketing around it, we want to make sure it's a fabulous experience and the people enjoy the experience and the navigation and iron out all of those opportunities, if you like, in a start-up. But it will be a social-led brand. Many of the -- when you look at the site, many of the images of product on-body are using a suite of social influencers that we've engaged with, and that will be a key area of focus for us to drive the brand. And it will be very much a digitally only marketing messaging platform that sits behind it. So early days. We wanted to get it up, prove the model works, make sure the back end is efficient and successful. I guess it should be important to note, we are not running this brand on the core Michael Hill back-end systems because we didn't want it distracted and caught up in, if you like, the overall Michael Hill infrastructure. And it's a small, if you like, stand-alone pure-play business, but supported very much by the Michael Hill experience and values, et cetera, as we move forward with it. I hope that answers your 2 questions. I might have been a bit lengthy in my response. So apologies, if that's the case, Andrew. Now Lindon, if we don't have any others, why don't we do one more ask if any others want to ask a question. And if we don't hear from them, we'll look to end the call. But let's just ask one more time, Lindon.

[Operator Instructions] There are no further questions at this time. Please continue, presenters.

I think, Lindon, if we've got no more questions, many of the participants will be looking forward to their one-on-one calls with us over the course of the next 24, 48 hours. So I think we'll end the call at that point. So thank you, everyone, for dialing in. It's been a pleasure updating you on an interesting but, in many ways, a foundational year for Michael Hill. And we're excited about what's coming down the track, and we look forward to talking to you all in the near future. So thank you on behalf of Michael Hill.

Ladies and gentlemen, that concludes your conference for today. Thank you for participating. You may now all disconnect.