Motus Holdings Limited ($MTH)

Good morning, everyone, and thank you for joining us today on our pre-close call. I'm [ Claudia Perera ], a member of the Investor Relations team. Today, presenting we have Ockert Jacobus Van Rensburg, Motus' CEO; and Brenda Baijnath, Motus' CFO. The session is an opportunity to share insights to how the group has performed overall over the last reporting period as we head towards finalizing our year-end results. I would like to remind you that the information shared today is directional and unaudited. Ockert and Brenda will take you through the presentation followed by a question-and-answer session at the end. [Operator Instructions] Ockert, over to you.

Thank you very much, Claudia, and welcome to all our investors and shareholders on the call. Think it's a long time since we've last spoken. I know we've had some ones-ones on the road shows. But what has happened in the last week or so, I think we've had quite a few reach-outs from our investor base, and we thought it's just appropriate to just give you a bit of an update as we'll probably not be able to speak to you during our close period, which only ends, sort of, towards the end of August. So it's a short update. And I think as Claudia said, it's more directional. But I think if we then stand back and we say where are we currently in the world? I think we obviously very mindful of what's happening on the global side. And our business is really centered around 3 geographies. So South Africa, United Kingdom and Australia, with South Africa being the largest. It's about 2/3 of our profitability still comes from South Africa and then about 1/3 from the other two. And interesting enough, South Africa, sometimes is a good place. Sometimes it's a tough place. But we do seem to be able to be quite adaptable. I think what we have seen is that there has been 1 or 2 sort of positive economic data that's come through in the SA space. Despite the high inflation that still seems to be with us. And it feels as if the South African consumer are a little bit under pressure. But however, if you look at the automotive part of the business and of the whole market, you would see that there's been actually good growth. So it's almost countercyclical to some of the other industries and the growth of about -- just over 16% on the passenger vehicle side is obviously quite pleasing for us since we operate in this market. I think the United Kingdom, a slightly more difficult place to do business at the moment. You would also probably have seen that through the other listed entities who've given you feedback. And here, we do see that the inflation is still stubbornly high there. We've also seen that business confidence remain a little bit subdued and probably a bit more of a tougher place to do business at the moment, and we hope that over time, a large economy like that will bounce back. I think Australia has always been very resilient and remains like that. It's also got its inflation target range of 2% to 3%. But I think what has been pleasing there is that the growth rates have remained, sort of, above 2% still and that's the forecast for this calendar year for Australia. And we have seen that you'll see later on the slides, there's been some new entrants there on the vehicle side. But overall, there has been growth. So not the worst place to be in it right now. Now obviously, when you stand back and you say now, how do you navigate a wall that is with so much volatility? And I think the benefit you see within our business is the fact that we are so diverse. We obviously run a diverse business model. It provides resilient against all these fluctuating market conditions. And it's diverse on different fronts. So the one is obviously the geographies I just spoke to, but also the different revenue streams. And you'll see there on the left of your screen. You just -- how integrated and how we play across this whole value chain in the automotive sector. I think if you still you look at vehicles, it's obviously a nice starting platform where you initially could put something into the market and then unlock the opportunities on multiple revenue streams across this full automotive vehicle value chain later on. We remain the distributor of 5 importer brands. Obviously, we added Tata this last year, where we can participate a lot longer during the cycle. But also for the other OEMs, we remain at critical link between the OEM and that route to market in all the places where we operate. I think another benefit we've got is that we've got a very established pre-owned channel that provides us with additional customer base, which I think, over time, you go through these cycles, but at the moment, even though the market tells us is quite tough, you'll see later on, we have been able to also really get good growth there in this last year. And then I think the other parts are around more of your annuity income stream. So you've got a nice annuity base through your mobility solutions. It helps to remove that volatility due to the cyclical nature of the vehicle sales. And I think it's also one that stood us a good stead of time for the last few years. Moving over to the parts, also nice growth opportunities there. Particularly where the customers are holding vehicles for longer. And despite all the new sales, we do see that our vehicle part is still continue to grow. And of course, not to forget our vehicle rental side. I think it's a nice alternative mobility demand that is there, and it gives us a strong source of supply also into the rest of our business and specifically into the pre-owned. So if I then move over just to a few of the more sort of revenue drivers that we've got. And I'll start off with the SA new vehicle side. Now in this particular area, you've got two big market forces at play. The one is that there's been this recovery and growth phase in totality, where I think we haven't seen reaching these volumes for the last decade. I think when I started in 2015 in the automotive world, that was the last time we've been over 600,000 units. And now we're back there again. So you can see how buoyant the market is at the moment. And it's almost talks to the second market force, and that was this emergence of new brands. That's quite difficult to move quickly sometimes in these particular areas, but I think what we've done is, I think we have been able to demonstrate. And you would see that in the area that we've shown you there. How we've been able to deliberately pivot to expand our representation to also adapt to what is happening in the market, and to where the customers are. Your customer preference is in the end what grows this market, and we need to be where the customers are. We always say we are a little bit like comedian. So tell me what the customer wants, and I've got an OEM, it can produce, and then we will deliver. And I think it is quite pleasing for us, looking back now, where we were, let's call it, 2 years ago. I think in that period, we've been able to grow. As you would see, we're now representing all 12 of these growing and emerging brands that you see on the screen there. And in fact, we are representing 40 brands, and all of the top 20 in the South African market. And that's -- I think that is the agility that you will see within this team is how quickly we could also pivot and start backing the brands that we believe would give you good growth going forward. Of course, we're not forgetting about the brands that's still with us and I think specifically those mature volume brands are still giving us a nice delivery and a strong performance. And we have been able to, through our multi-franchising, also assist with those brands under pressure and start turning those around, which is I suppose the most pleasing in our space. I think we remain a strong route to market. I think there's quite a few things in our favor. And I think why we -- the preferred choice is, of course, you've got that whole logistics channel also sold up. You would have seen when we launched Tata, for instance, that we were able to immediately get traction. And in fact, Tata sells more than 500 units per month currently. And that's a brand that's only started probably now about 8 or 9 months ago. So you immediately can see that if you can control that whole route to market, you've got the bar stores, you can bring in the vehicles, you -- you know most of the logistics challenges that you can navigate, and then of course, we got the nice dealer footprint that we can leverage off. So I think all in all, this is a part of the business that's really been performing well. As a market leader, our new vehicle brands provide extensive entry points across our dealer network to access this full automotive value chain. So a good side of the business to be in. And talking to another pleasing but is the pre-owned. Now preowned, currently, if you look at the market on the left, there is actually this growing choice of affordable new vehicles, and that will always put a lot of pressure on pre-owned. We have seen in the past that if new performs that strongly, the pre-owned normally goes backwards. I think currently in the market, we see it probably on a bit of a flat line. So that's what the market looks like. But counter to that is that we've actually been a bit of countercyclical in this particular space because we've been growing our volumes ahead of the pre-owned vehicle market. So I think we are using our existing infrastructure and capabilities, and that has resulted in us really getting a volume growth of just over 5% year-on-year. Now what has changed in this space, I think, and helping us is, of course, we have told you before that we have tried to really improve our data and our processes in this space. We acquired the getWorth business a couple of years ago. We're using that valuation. And I think we have been getting better at it. And yes, it's always still a journey that you're on. But you can certainly see at the moment how the business has been able to fight back on this one is through that process of buying pricing right, then selling and then the learning process you improve on and it's really a full circle. You put it back into the same space and making this valuation tool smarter, making your processes more linear. And I think that is all culminated in a very strong and consistent business at the moment. I think we're well positioned to still take advantage of the buoyancy that may be in the pre-owned market in future because we do believe that we are going through the cycles. Of course, new vehicles is doing very well now. But I think for us, it's all around positioning ourselves also for the future. I think we're quite deliberate in how we play in those different elements of this market as well. It's definitely that is a very specific segment on 0 to 2 years, and then we've probably always been the market leader. But I think in the 2 to 5 and the 5 to 10 years need different strategies, and that's certainly part of how we position ourselves to take advantage of this market even going forward. But where we sit today, I think we're quite pleased. It feels as if we've been able to win more than we lose in this particular space. And I think 5% volume growth is certainly going to go a long way. [indiscernible] vehicle rental. Obviously, one of those businesses, it's a nice continued strong performance, even though there's very strong competition in this market. We always say the industry is highly competitive you have the volatility around daily rates that you need to navigate all along. But I think we've been able to really do this well. We always praise our management team in this particular space because it is very difficult. And we believe that through that management interventions, we've been able to get our fair share of the market itself. I think we always have our own way of looking at our utilization levels. And between 65% and 75% is really where we sort of play. And if you can max out of that 75% level, then you can really well. And in fact, we've been able to hit 74% in March, which was an interesting month. You don't always see March as being the highest. You normally see February. So very pleasing that the March was still strong. And I think it is also a testament to all the innovation that's taking place in this particular space. We've been quite pleased that our teams even won a global award in terms of innovation within the vehicle rental space in this last quarter. So well done to the team there. So a good business, keeping our focus there. Now our focus is still, yes, we're doing vehicle rental, but it is also still a nice source for our preowned vehicle supply, and that preowned vehicle supply is obviously how we participate longer into the cycle. Moving over to international. And yes, I suppose part of being a diversified business, as you have some businesses performing exceptionally well and others require a bit more attention. While at the moment, international retail do require a bit of attention. I think the markets are not necessarily helping us much there. As I said earlier, the U.K. economy, particularly weak at the moment. So we have to work much harder to get even the same effect. And I think what we have here is also the emergence of the new brands, whether it's in the U.K. and also in Australia. So we definitely had to change our brand representation there. And there, we've been quite agile in it. You can see that we are also making 6 out of the top 10 brands in the U.K., even though there's only a limited number of passenger dealerships that we've got. And of course, the ones we're not baking there are limited to really the premium segment, which would be Mercedes and BMW and Audi. In Australia, there, we've actually been able to pivot nicely. We do represent all of the top 10 brands in that space. Pretty much multi-franchise there for a long time, all 54 of our dealerships some form of it. I see on the slide, we say 85% are really there. But it would be only a few that's really still stand-alone maybe in Toyota, et cetera, like that. But it is a tough market. I think volumes and margins are both under pressure in the space. I think in the U.K. new vehicle volumes, the passenger side has maybe been not too much impacted. But on the heavy commercial vehicles, that you will have seen that there was a bit of a pullback. Luckily for us, the U.K. business is situated around that commercial DAF business. And there, we certainly can see that we are still having a very strong annuity income because of the servicing side. The servicing side still contribute about 80% of the profitability of that piece. So that's actually where we eventually make the money. But yes, we would have loved for business to also have larger fleet deals. It was as if it is still being delayed, although it is slowly coming back. On Australia, yes, it's definitely also pressure there on as new entrants enter the market has pressure on the margins. The volumes have sort of been okay, but the margins has been under pressure a bit. So listen, our international operations provide us access to those other markets and economies. And yes, we're just going to have to work quite hard at this. But for the time being, it's probably lagging a little bit against what the SA business is doing but the SA business is really performing well. Moving over to Mobility Solutions. Obviously, this only plays in the SA space. And I think here, you see this very nice predictable annuity income streams just underpinned by profitability. And it is -- its profits are really mirroring GDP plus inflation on a continuous basis. We have been able to grow our funds as the higher vehicle sales have obviously positively impacted that. We're still very positive about the relationships we've got and the partners within the banking world. And then, of course, we have introduced a few new products and services. It's pivoting towards providing solutions for some of these new emerging vehicle brands entering South Africa. So it also gives you a new opportunity to form new relationships as the new entrants have entered the market. So good things in the pipeline, but a business that's giving us that annuity income through a tough cyclical time sometimes. So a nice business to be in. A little bit around aftermarket parts. I think here you would have seen also that the overall macros do play its part. So tough economic conditions in SA and in the U.K. But despite that, I think what has happened is in -- specifically in South Africa, we've been driving growth in a few different areas. We were not always necessarily involved in. So I think it's currently supported by high activity and improved margins in SA. We have seen this growth in the informal market channel, which we've introduced, I think through this project, which we call Klutch. And it started off slowly. It's already got nice traction there. You can see on the screen, it's already close to over 2,500 mechanics, and that's gaining traction. I think every quarter when we report this number, it's been going up. And it's not one-off transactions, it's annuity income as well. And that has certainly helped our SA business to get the extra volume growth while maintaining its margins and increasing it then as a result of not having to increase your overall fixed cost base. So I think good news for us on the SA side. International side, I think it's a bit tougher there. We have seen that there's been a challenging economic conditions in the U.K. and the U.K. retail business, probably the one that we need to really work hard at to get the same result. The wholesale is benefiting from the expansions we've had into Scotland into Europe. So wholesale doing very well, retail, the one that we need to work hard at. And then obviously, SA has outperformed where it was in the previous year. I'm telling you all the good news, but as I always say, and I've got Brenda to me, I always say it is nice talking about all these profits and everything else, but it doesn't mean anything if there's not cash that comes through to the bottom line. But I think what you have seen is that there's been strong cash generation since unbundling up to now. I think the shareholders, you can see as we're benefiting the most from this cash generation as we continuously to pay our dividends. Our dividend guidance previously was sitting at about 35%. We've been talking 35% to 40%, it feels as if the Board is certainly ready to move closer to that 40% mark. So that's probably what you can expect going forward. And then, of course, in this period, we have seen that we had the ability to repurchase some shares. So we have continued with that repurchasing program, and we've repurchased about 4 million shares in this year, and that's excluding that will come up this year. Obviously, that means that your balance sheet will keep on deleveraging. As you can see on the screen there, we expect this deleveraging to still continue to the end of our financial year. We were sitting at over 2x, in fact, 2.1x about 18 months ago. I think a few of the investors certainly were concerned about that. We were kept on saying, don't worry, we are very cash generative business, and there's no acquisition activities, it's going to deleverage fairly quickly. And that is what you're seeing on the screen. We expect this to improve and will be at this 1.3x by the end of our financial year. So well done to all our finance teams and operations, also making sure that we could do that. Then I'm probably getting to the most important slide, and that's why most of you joined. That is where are we going to land because that was the calls we were getting. Where are you going to land them striving to complete my spreadsheet. So can't complete your spreadsheet in its totality, but at least we can give you a few bullets here. So I think, firstly, I think we have to look ahead and say that we are actually going to have an improved overall operating and financial performance compared to the previous year. If you zoom in a little bit deeper, you would see that our SA operations are expected to perform ahead of the prior year, with our international operation's operating profit being marginally lower due to those challenging economic conditions in those geographies I spoke about. But overall, it would mean that our attributable profit is expected to deliver high-teens growth for the full year supported by the stronger trading performance and also anticipated 20% reduction in net financing costs. No, we always have to be a bit of a disclaimer because in this market, never know what happens in the last month, but hopefully not too much. But despite these positive indicators, the group remains exposed to external factors and that may still impact this. And you never know about geopolitical tensions or inflationary stuff. I think the currency is obviously the one that we can't call and it sometimes moves a little bit in this last month still. But I think all in all, you can see that the group is well positioned for growth and a consistent delivery of attractive returns to the shareholders. I think all in all, if you sit back and you think about where are you as-- from an investor base. I do believe that this group's diversification has been able to transition ourselves into a bit more of that sleep easy investor base that we've been asking for. So I think this is where we now position ourselves. And hopefully, you can see that also sort of on track for our 30 June results. So I'll hand over back to Claudia.

Thank you, Ockert. I see we do have some verbal questions ready. There is one verbal question so far. So I think Olwethu if you want to ask your questions, [indiscernible]

So we've got a couple of raised hands online.

So Olwethu You can proceed.

Can you hear me?

Yes, we can.

A couple of questions from my side and it's not necessarily easy to give this type of guidance, but I'll ask it anyways. From an FY '27 point of view, what's your vehicle sales guidance for the total vehicle sales? Even though it might not be finalized yet, do you have some of the model releases that you guys are planning on making in FY '27? Last two questions from my side. Are you in discussion with any OEMs with regards to sole distribution agreements? And lastly, from an aftermarket parts U.K. point of view, is there a price war of some sort that takes place because in South Africa, what you found is that there's oversupply because of a weaker economy, which is currently happening now, in the U.K., which led to a price war for an extended period of time. Are we seeing any signs of that currently?

Okay. Quite a few can't answer all of them, but let's try. So I think the first one is around where do we see vehicle sales going. I think it would be foolish of me trying to predict in a full year ahead without seeing where we land now. I think the best we can give you is probably this calendar year. I think this calendar year, we're probably still seeing quite a lot of buoyancy. So we believe the market is somewhere between 610 to 640 and 1,000 vehicles, and that would be for the South African space only. I think that was probably the number you were looking for. I think within our importer brands, obviously, there's continuous releases of new products. There's a host of them still coming. So it's certainly going to be an inflow of those. I think you would have seen in the last sort of quarter, specifically in the Kia space, there's been quite a few -- Tata has been making noises and have already allocated a few units. Then of course, Hyundai is due to have the entrance of the venue and a revised credit are going up. So I think quite a bit is happening, but every brand has its own. I think everyone needs to be on their own growth path. But in our space, I think we've been quite pleased with how the importer brands we've been representing has been bringing new product to the market, and that would still continue. I think talks to other distributors. We always have these talks. So there's nothing I can unfortunately discuss with you on this call. If I move over to the aftermarket parts, it is interesting when you say there's this price war going on, that's not exactly what we're seeing. What we have seen is that the market and the volumes has been under pressure, but I think it's been more from a consumer side. I think the one business that's tried to enter the market that put pressure on the pricing initially. So if that's maybe part of what you could potentially say it could be a price war. But I don't think there's an outright price war on a complete oversupply. I think we're quite comfortable with the products we've got and the footprint we've got. We also still believe that we can increase the footprint, so I think if there was a complete drop-off in volumes, that's not what we would be doing. I think we're still gradually growing into places like Wales. So I think all in hand on that particular front. Thanks Olwethu.

Can I ask one more, if possible?

One more, but then I need to give someone else a chance. Okay, go forward.

Okay. Just a quick one from a Tata point of view, Tiago has been doing well, and I think the Punch has been doing well. The Curvv and Harrier not as much. There are other models that Tata has exposure to. Are we seeing new releases there, perhaps, which can obviously also aid you guys market share going forward?

Yes. I think when we launched Tata, it was deliberate strategy to try and enter through the entry-level models. So Tiago has been the focus. And as you would have seen, that has been very successful. I think that's been part of the reason why they can demand the market share of over 500. And in fact, in May, it was over 600 units for a month. So very pleased on how that has been taking off. I think, a little bit tougher in the rest of the market. So the model is further up in that range. Obviously, there's no pressure in particularly the SUV categories. And we haven't seen the volumes being at the levels that we would hope for. We hope that we can even do better. I think, obviously, we have homologated some other units as well. I think when we launched, we said let's do it with 4, which was already, I think, quite a bit. They didn't want to flood the market with all these new models. So I think a gradual additional release will take place. And like I said, there's currently 2 models that's been homologated, probably one release coming in this next quarter or 6 months. That's what you should be expecting.

Thank you. Next, we have a question from [ Niala ]. You can proceed.

Can you guys hear me?

Yes.

Just a couple of questions from my side. [ Naila ] Ibrahim here from New [indiscernible] business. I just wanted to ask about, obviously, within the past year Motus has shared that it is trying to not scale down a little bit, but there has been some retrenchments within the past year. I know that there was ongoing negotiations with a few unions with Misa in particular. Could you give any update on those and where you guys are in those process? I know that the labor court would have cleared you to have those situations, but are there any -- going to be more in the future? Just what are your plans, sort of, on that side with regards to staff? And then secondly, you spoke about strong unit sales in Africa, what we have been seeing in the past couple of months, but obviously what's happening in Iran is the growth of the NEV in particular circa, EVs and plug-in hybrids, there's been a huge growth there. What has Motus sort of experienced? And do you guys plan to expand within the EV or hybrid space going forward with certain brands? And then sort of lastly, could you maybe perhaps -- I didn't catch it right, but you spoke about the 610,000 to 640,000 unit sales within the past calendar year what do you think is driving? Because like you said, we're seeing this countercyclical growth within the vehicle sales space where it's sort of up -- I mean it's a decade sort of monthly performance. What do you think is sort of driving it? Is the emerging brands? What are traditional brands sort of cutting their prices, to sort of help hopefully compete with newer imports? Just maybe your thoughts on that.

Thanks, [ Naila ], and thanks for asking those questions, actually all very good questions because they're all interlinked. So the first one is around the staff. And what you would have seen about 6 months ago is there was some pressure around 67 retrenchments that we had. It was quite specific. It was around all those brands who were under pressure. And no, we haven't had any further retrenchments. We're also not planning anything at the moment. In fact, on that, we will have a net increase in staff, so not a net decrease purely because we've opened more dealerships and it was just in other places than where that particular pressure was in. I think we have seen the emergence of these new brands and where we have acquired additional dealerships specifically in how things are around the Pretoria region where we've increased our footprint there with adding Suzuki, Cherry [indiscernible], JAECOO and OMODA, for instance, in Mainland. We've also GWM that we've introduced into the George area, and that's obviously not where the retrenchments were taking place, that was in other areas of the business. But I think as you would have seen also there, we had to rightsize for where those businesses were not performing. So those businesses where the brands were under pressure, so it was really in that space. And no, I don't think we have anything further on that. I think the growth in NEVs and almost the pure change in how the market sees things, South Africa certainly has -- we've had more interest in NEVs and EV space as well. So you would have seen that likes are , for instance, BYD, which we also now represent I think, has been good, and they obviously just started with initially only electric, and then moved over to other hybrids as well. But we've seen it all, deliberate change was actually in Australia. And it is purely because they had more of a price shock in their fuel prices. And there, we have actually seen a marked shift in sort of 1 month there. Luckily for us, we also have changed and pivoted towards some of those brands that's now performing well in that market. So you have to continuously stay with what the market wants. I don't think we're quite ready yet for that big shift in SA, although there are elements of it. And obviously, in our own world, we're spending a lot of innovation work around the electric vehicle market, how it could potentially play out. Our fleet solutions could be playing out in that space. And that is all sitting in our innovation center, and that is where we're doing some, call it, early adoptions of work around it. So maybe in future, it will be a bigger portion of our business. And now it is still fairly small. But has there been a change in the market condition. I think slightly so in SA, more deliberate in Australia. And in the U.K., they already had some. So there wasn't that much of a change there. So the 3 markets slightly different when you look at it. But I think we have to also position ourselves if market conditions change in SA that we can take advantage of those and I think we are well positioned for that. I think if you talk about growth, the total vehicles and the sales as you can hear, we're talking -- now talking it up to maybe it's going to be 610,000 to 640,000 unit sales for the year. Like you say, it hasn't been at those levels for more than a decade now. But reality is we probably ask consumers in a really fortunate position. So a few things have helped us in the space. And the first one is probably around vehicle price inflation. You have not really seen the selling prices of vehicles increasing now for 2 years. And as soon as that happens, you obviously are selling to the end consumer who's got a job, which probably had increases in their own salaries. So you've actually closed the affordability gap. And that has probably been the biggest driver around the higher unit sales. But it's only one element. The second element has to do with a lot of new entrants coming into the market. Yes, on the one hand, they also were one of the key drivers in the selling price is not increasing. But they've also created new excitement and new marketing into the space. So we have seen maybe in the past, there were, call it, 20 OEMs advertising. Now you have closed on 50 OEMs advertising in the space you probably can't even turn your computer, or your digital devices on without seeing a lot of advertising taken up by vehicle advertising. So it certainly created excitement and stimulus into the segment by itself. And then the last one was probably to do with the interest rates as well. So interest rates certainly, it's still coming down, call it maybe 18 months ago. Yes, we're going to go through a bit of a cycle now where it's increasing, but it is still much lower than it was, call it, 2 years ago. But that by itself has also been one of the other factors have helped you to sell these extra vehicles. And that's been partly the reason why the new vehicle sales has been so buoyant for the time being. We still believe it will continue in this calendar year, but obviously, time will tell with the economic conditions, what will happen later down the track. Hopefully, that answers your questions.

Perfect. And there's no more questions online, unless [ Naila ], do you have anything else?

Sorry, no, I just wanted to follow up about the retrenchment question, sorry. I note earlier this year the 271 workers were set to be affected by changes in remuneration and benefits, was that still happening? I know it has nothing to do with retrenchments, but obviously, that has to do with changes in the operational environment. Are those sort of going ahead? And maybe could you perhaps comment on that? Sorry, just my last question on that.

Perfect. No. So what we did in that particular space is, yes, we obviously had the right to do it, which we did not implement yet. We've only implemented as part of the salary increases to net it up against that during the July salary increase period. So we have actually not done that. In fact, you always look at this market and that turns slightly the other way. What we did do when we saw the big spike in the fuel prices is we, in fact, gave an additional ZAR 250 as a field levy towards all our employees, excluding top management. So we in fact gave additional benefits to staff in this period, actually not less. And that benefit structure we were looking at will be netted off included in the salary increases that cycle we're going into on 1 July. So no, we haven't done anything further on that, even though we had the right.

Perfect. Now we're going to move on to the questions that have been submitted via the webcast. The first question talks about Tata. And just some feedback in terms of Tata's gained some good traction since inception. In your opinion, how are we finding the balance between achieving the margins and gaining enough marketing?

Yes. I think your initial strategy when you launch a new brand is obviously to get volume into the market. So I think we have been fortunate, but through our OEM, there is at least some margin in this product. But obviously, volume was more important than margin on day 1. So it probably puts a slight drag on the rest of the business when you launch a new product. But I think we're still pleased with what we have achieved. Obviously, if we get further volume increases there, it also helps you downstream because in our integrated model, it's not around just the importer business. It's also around making sure that your dealer network is obviously looked after, your mobility solutions and then part sales taking care of as well. So it is feeding that larger ecosystem. Are we pleased where we are at the moment? The answer is yes. Is it making bucket loads of sort of products at the moment? The answer no. But that is what you'd expect with a new entrant into the market.

Okay. So the next question is surrounding U.K. commercials. At the half year, we mentioned that there is a focus on reducing costs if the fleet deals didn't materialize. So maybe just an update on that whether we've achieved any savings there and whether there are still wage pressures in the U.K?

Yes. I think the U.K., as we said, remains a tough place to do business. I think we have reduced costs, but not so much around the staff side of things. I think it was in other areas of the business. We have at least seen some of those fleet deals now starting to come through. So you probably were lagging and it will only start catching up over a time. So you don't want to necessarily have massive cost cuts there and then you can't perform some of your orders later. So I think it's a fine balance, but we do still see the pressure there. And then, of course, yes, there was additional sort of increase in minimum wages during April. That affects more our aftermarket part side of the business, not so much our retail vehicle side because of your entry-level staff working on that side.

One -- a couple more. With regard to prospectus. Is the earnings -- high earnings team's attributable profit growth on earnings or earnings per share basis?

Yes. I think this is specific on earnings. I think the per share, obviously, there's a weighted balance that needs to still be taken into account. So I think we were quite deliberate in pointing to -- just trying to point in the right direction. So a attributable profit is what we referenced.

I think this will be our last question for the session. I think it's just regarding forward cover. Regarding the insights in our forward cover, how far out to date and what's the average rates?

Yes. So as we sit today, is that we have taken advantage of the stronger rand. So effectively, we have now covered fully into January of 2027, and the average rate on the dollar is sitting at about ZAR 16.80, and on the euro, it is sitting at about ZAR 19. So we feel quite confident that from today until the end of January of next year, we've actually secured our gross margin from an FX perspective.

I think that's all the time we have for questions. As mentioned earlier, if you have any further questions, please e-mail our e-mail addresses [email protected] I'll hand over now to Brenda to close.

Thank you so much, colleagues for joining. And hopefully, this presentation has given you some insights into our results, and you can see we believe it will be a pleasing result that we can share with you at our year-end results. So we do look forward to seeing you on the 2nd of September with our results presentation. It will be held at the Johannesburg Stock Exchange in Sensing at 9 a.m. And please, as Claudia said is, if there are any further questions, please feel free to reach out via e-mail. We are going to enter our close period in a few weeks. And hopefully, we'll see you soon. Thank you so much.