Mr Price Group Limited (MRP) Earnings Call Transcript & Summary

Just thanks for joining once again, everybody. And just to reiterate, there was a SENS delay this morning. It was some technical glitch on the JSE side, not ours. So I apologize on their behalf to everybody. Just in terms of what we're going to be talking about then. I'm going to be spending a bit of time on the macro side of things, just hitting up the detailed presentation in terms of some of the highlights. Mark Stirton, the CFO, will go through the detailed performance, and then we'll come back to the growth side of things. There's a section 4, which is included in your pack. That's really just for additional information purposes only, and we won't be talking to that. Okay. Looking at the macroeconomic challenges, I don't think I have to talk too much about this. It's been a -- yes, I think to say it's been a challenging period and a devastating period for economies around the world is probably the understatement of the year. But there you can see the -- on the top left-hand graph, you can see the impact that it's had on the GDP of South Africa, and I'm talking specifically about COVID-19. And the South African GDP contracted in Q2 by 17%. On the right-hand side, you can then see how South Africa fared to economies around it in terms of percentages decline, and that ranges from Peru at minus 30% on this chart to Slovakia at minus 12%, but all firmly in double-digit retractions. What many of those economies won't have, and we have -- and we've been enduring for some time, is the whole impact that load shedding has caused in the country. And as you see the red line there in 2020, load shedding up until September has been higher than prior years. So we hope -- we're obviously very hopeful that new leadership in the Eskom will short this out -- sort this out in the medium term. On the bottom right, you can see what's happened with the business confidence index to 26 points this time last year. It obviously took a huge dip through COVID and through lockdown and, subsequent to lockdown, had bounced back to 24 points. And that's just because we really merged into level 1 of lockdown from 5 earlier. As I said, the consumers are under pressure. It's probably likely to endure for some time, but the graph on the left talks to Mr Price's performance relative to the rest of the market. And if you look at total retail sales, which is the black line, Mr Price Group actually was -- and retail in general was behind them for some time. But when we went into lockdown in April and emerged thereafter, we emerged stronger than our competition and stronger than total retail sales in South Africa. Consumer confidence has understandably also taken a significant knock. You can see there minus 23%. Unemployment, we've probably spoken about this every results presentation in recent years. And I guess 30% unemployment is a massive rate on its own, but our feeling at present is that we also haven't felt the total impact of job losses in the country. And the impact is obviously on -- then on consumer spending. For the reasons such as there's been private sector retrenchment packages, that's meant that money's flowed into the system on the short-term basis. There's been the TERS scheme, the relief schemes that government's funded. There's been credit holidays provided by retailers and others and financial institutions, and there's been repo rate cuts that's helped the consumer. And of course, in the interim period, household discretionary income has flowed into food, drugs, apparel and homewares at the expense of some other sectors that I guess were even more affected through the lockdown scenario, such as travel and liquor. And then the final point on this table talks to the TERS relief that has been granted. And one of those grants is kicking on and has been extended until January. But obviously, there's going to be a time when that comes to a stop. And I think that will then cause another impact on retail sales. In terms of our own group performance, yes, I guess I'm standing here not liking any brackets around our numbers. But I think in hindsight and relative to the carnage that's being created in the global markets, I've got to stand back and say, I'm, in fact, very happy with the end result. When we went into lockdown and started budgeting for the year and, of course, we were looking at different scenarios and different potential outcomes, but one of the scenarios was actually that we could incur an operating loss for this half. So I think not only did we avoid it, but relative to competition, I think we've come out pretty strong. And that's a real testament to our people, which I'm going to thank a little bit later as well. So revenue and post lockdown is we could start trading again in May. I think it was the 2nd of May, was the commencement. All South African stores were closed up until that point during the month of April. So we've actually then split. You can see revenue down 14.4% at ZAR 9.2 billion, that is for the full trading half. And in post lockdown from May, we were actually up 3.2% to ZAR 8.9 billion. I think the significant thing on this page is our HEPS at minus 24.8%, but post lockdown was actually 5.9% at ZAR 3.679. And diluted HEPS was in a similar kind of range. And we'll talk -- Mark will go through our cash generation and our cash balance, but delighted to resume dividends at a 63% payout ratio. And we've declared a dividend of ZAR 2.10. Talking of unprecedented challenges, and I'm not going to go into too much detail around this because I think you're all fully aware of what had to be done. But obviously, there were huge health and safety concerns. And we had to make sure that all necessary protocols were adhered to strictly, non-negotiably, and I think we've done a good job on that. Cash preservation became everything, and Mark will take you through what happened to our cash in -- as we traded through the first half and what guided some of our decisions. But that cash preservation was obviously a key thing, and we are obviously very fortunate that we have got a strong balance sheet and didn't have to worry about distractions of debt. We managed our way through the various lockdown levels and what that meant for the business, that they responded very well. And I think one of the highlights for me certainly was the responsiveness of our supply chain and the agility in which we could actually trade and manage stock levels and I guess postpone some product, but at the same time, actually speed up items that are just hitting the wall and get back into stock on that front. But certainly, in terms of consumer behavior, there's been quite a few trends there. One of the key things is shoppers initially avoiding regionals and superregional centers and finding it much, I guess, much safer, exposing themselves to less potential harm by shopping more convenient locations. Certainly, what we've experienced is fewer transactions across the board in most of our chains. But when -- when shoppers do come in, there's actually much bigger basket sizes. We'll go through some of our online statistics, but there's obviously been increased adoption of the e-commerce channel. And I think what you've also seen is that there's been quite a strong emphasis on value purchasing in the marketplace, and we've been a recipient of that. Credit sales has declined substantially. That's nothing that we're experiencing that's anything different to the market, and it's what -- exactly what you would expect in this period. I'm not going to go through all the right hand -- items on the right-hand side of the page, except to say I've spoken about the supply chain and evidence of our agility. And I guess it's partly informing our decision that we don't seek to go vertical in terms of acquiring entities into our supply chain. But we are delighted that in some instances, we could actually -- in terms of agility, actually, from order date to in-store, we could turn that around in about 6 weeks. So I think comparatively speaking, that's a really good outcome without requiring the investment and ownership of our supply chain. I think some of the other differentiators were -- we're known as a fashion-value retailer. But obviously, in that mix, we've got a high proportion of core. So we could offer differentiated fashion merchandise and core merchandise, which is attractive to different segment of the markets. And the other plus was that we don't have a concentrated store location strategy. It's very diversified, as I said, from super regionals right down to country towns. Certainly, one of the big things for us, and it was a distraction that we've managed to avoid, is that by being heavily focused on the South African market, we obviously just had to manage our key operations here with only about 7.5% of our sales in foreign markets and that Southern Africa, I guess, that aided the efforts that we had to put in to manage the whole COVID pandemic. Looking at some of the highlights, and cash generation is certainly top of them. Despite our sales for the month of lockdown, the sales in the base period was ZAR 1.8 billion. But despite that, we actually managed to increase our cash and generate cash strongly. And that's obviously what is going -- has informed our decision on dividends. And as I said a little bit earlier, great to have -- I think our distractions were trade-related. They weren't balance sheet-related. In fact, balance sheet-related, I think, our only distraction was our potential equity raise, which I'll talk about later. But it obviously didn't talk to the strength of our balance sheet. I spoke a little bit earlier about quick in-season response, and we've put a stat there that I think is quite key to enabling that. We actually sourced 40.3% at cost from South Africa, which is, I think, a phenomenal achievement. And yes, I think it talks to our investment in the country and our willingness to partner with suppliers and source locally where it makes commercial sense to do so. Mark will talk about overhead management. I think that has been a strength of ours for a number of years now. You'll also talk at stock, and stock on the water was down by almost 17% -- stock on hand, that is. There was some stock on the water. When you take that into account, I think our stocks were down close to 10%. But that was a great outcome for us. And it was obviously managed through the agility of our supply chain, but also overperforming in some categories as we traded through. The Home segment and Cellular both reported double-digit growth post lockdown, great achievement. And we increased our GP percentage by 200 basis points. And that was driven primarily through an improved markdown performance compared to last year. Post lockdown, online sales were up 71%. And although still pretty small in the overall mix, they now account for 2.5% of sales. But we certainly think that's an ongoing growth channel that will rise much faster than the bricks environment. And lastly, I think the comment that I made about partnership and stakeholder engagement and the way the greater community came together with our associates, our partners, our suppliers, I think it really talks about the strength of the Mr Price ecosystem and the way that we actually do engage with all parties. And just on our behalf, a great thank you to all our partners and suppliers and our associates. I'm constantly amazed by how this Mr Price machine actually constructs outcomes continuously. Just looking at our overall performance here relative to the market, and I'm talking particularly the South African market share. South African sales were up 3.7% post lockdown, and that enabled us to gain 100 basis points increase in market share. And there, you can see what happened to the rest of the market. The RLC for the same period was down 4.7%. The RLC, as you know, is a much smaller group than that reported under Stats SA. And the larger group Stats SA was down 6.8%. So comparatively speaking, a very strong performance from Mr Price in the South African operations. And that then sort of leads into the graph on the right-hand side at the bottom that you can see the market share gains in each of the segments, Apparel and Home. And obviously, we haven't included the Home segment in May because we were still restricted in terms of the product that we could sell during that month. We could only sell full range Home product from June. Great. So I'm going to take a bit of a rest. I'm going to hand over to Mark to take you through the detailed results.

Good morning, everyone. So you would have seen our detailed SENS that came out this morning. I'm going to take you through the income statement as at -- on a high level, and then I'll drill down into each of the elements. Retail sales and other income were down 14.8%. I think Mark picked it up in the highlights. Gross profit was down -- declined at a slower rate of 10.6% with expenses at 2.2%, which gave us operating profit from operating activities of minus 32%. And I'll take you through the expense line and the gross profit in greater detail. If you'd like more information on retail sales and other income, we put a detailed divisional breakdown as well as a revenue breakdown in the back of the slides. We just want to give some space to Mark to talk around really the future strategy and the way forward. I think many of us going into COVID had many scenarios in our heads about what it could play out, and managing a business under those circumstances is extremely difficult. And we obviously started out with very strong austerity on many subjects, capital, cash preservation, expenses. And I'll take you through some of that. We've had to obviously give and take in many times as we've traded up, and that has flowed through into some of the results. But we're very pleased with -- albeit the shape of this income statement is not where we would have liked it, and particularly on our 2019 results, which weren't our best results at that time, we felt that the things that we said we were putting in place have come to fruition and, in particular, the results around -- our Mr Price Apparel division, which has really found its groove again and its mojo. And we're quite pleased with where that's -- it's gone, and I'll take you through that. Yes, our tax rate was slightly up at 28.7%. And just as a reminder, in the expense growth, which I'll take you a little bit later, there was an exceptional item on the impairment of our IT assets, which I'll take you through as well later, and as well as right-of-use asset impairments. So just where did we make our money? Or how do we make our money? From a geography perspective, we continue to be almost 93% in South Africa. It's very much in line with what the strategy we said we would focus on. After that, we've -- I'll take you through some of the store closures. Majority of them are in our African operations and up north, and that was deliberate and strategic moves to consolidate into South Africa in a more -- denser way. And Mark will take you through more of the reasons why a little bit later. But we've also tried to do pro forma information for you here so that you can see the post lockdown effects. And you'll see that in South Africa, we were minus 14.9% for the half. And excluding April, we were up 3.7%. The cash, it's a significant drop in credit sales versus the prior period. But when you see the post lockdown, you'll see how the cash came back strongly over lockdown, and credit still remained in a negative position. So you can see our cash generation, our cash business model has really allowed us to spin off a lot more cash than we anticipated. And I'll take you through the balance sheet and the cash flow a little bit later. From a channel perspective, bricks were up 2.2% post lockdown, obviously down minus 16%. And online was strong both for the full period as well as post lockdown at 71.5%, with online now being almost 2.5% to 2.6% of our sales, accelerating from about 1.5% last year. Merchandise sales and unit growth was down minus 18% for the period and obviously minus 1% post lockdown. And RSPs, we're very proud at how we've been able to manage that RSP. Actually, in the RSPs, from an input price inflation, was under 2%, which goes to -- the prices that we actually gave our customers versus last year was really in line with our value model. And what's actually pushed that up is our improved markdowns as we sold more on full price. I'll take you through a little bit of the [ baskets ]. As Mark said, the transactions have been down on last year. And that's obviously a subject of people not frequenting stores as often. Obviously, our online traffic has grown exponentially. But -- and what we have found in the bricks environment is that our units per basket are up by double digits as well as the actual transaction sizes, which goes to show that when people are shopping, they're shopping in greater depth. From a divisional performance perspective, I'll just take you through it line by line. Our biggest division, Mr Price, which makes up nearly 54% of the business, was down 16.5% for the half. But post lockdown, it was up 1.4%. And this is a business that gained market share every month since March. And in August, it had its biggest market share gain, which -- in the last 2 years, which is very pleasing for that business. And yes, we're excited about the new noncomp product and everything that's been put into that business, and Mark will take you through that a little bit later. And most of that noncomp product will flow through in the second half. Mr Price Sport makes up 6.7% of our business. It was down 22.3% and 5.2% for the post lockdown period. Unfortunately, this business was affected by team sports, gym and the school sporting curriculum. This business, obviously, the weighting in those categories did drag down the performance of this business. But if you recall from last year, this business was really finding its stride. And it's very unfortunate that this business as well as Miladys, who were both on a really strong growth trajectory, were affected in this way. But we feel that the merchandise that we're still holding on that in that regard on those sport business obviously -- it doesn't age. And so that's -- we feel that, that business is in a good place for the medium term. Miladys. Unfortunately, this business was down 32.1%. As you will recall, last year, this business performed really well in this half. And then post lockdown, 17.5%. We found that this customer also was a strong credit customer. It is a strong credit customer. Over 50% of this business' traders is through credit, but they also have a more mature customer base. And we found through our research on the CRM that a lot of these customers were avoiding high-density shopping malls. From a Home perspective and Sheet Street, a global trend was around people obviously working from home as a result of COVID and doing their homes up and doing home offices. And we were a great benefactor of that. And together with -- we found a lot of people in this environment were shopping down into value. And we had a lot more people trialing us, which we're very pleased about. And you can see the results post lockdown both into double digits with our Sheet Street business, and these categories are discretionary categories. So we're very, very pleased with these results, and we did some very deliberate efforts last year to restock the businesses and really show dominant assortment and offer and particularly in our Mr Price Home division. And we had some strategic initiatives in the Sheet Street division on stock buys, which really have resonated well with the customer. Mr Price Money is our business that deals with financial services, as well as our cellular and mobile component fall under the money division. And this business was up 1.4%, mainly driven by the strong performance in cellular for the half and 8.9% post lockdown. And I'll speak a little bit more in depth on their business a little bit later, but it's really that insurance portfolio and our credit portfolio that affected that business. And obviously, credit sales was dropping in the way it did in the previous slide. That business was impacted. Moving on to space growth. Total group, we now trade from 1,386 stores around Africa and South Africa. And our annualized new space growth were 3.1% and 2.2% net space growth. We actually had strong store lay-down in the second half of last year, which flowed into the first half of this year. And obviously, that impacts things like expenses when you're not trading on that store's growth to the same degree. And I'll take you through that a little bit on the expense growth. For the half, we were up 1.7% in new space growth. A lot of our -- and obviously, in capital allocation, we're very cautious going into the lockdown period and the COVID. And we stated in our last presentation that we'd be cautious around store capital allocation. We're very pleased to say that many of the locations that we had targeted, we still want and that many of them have been pushed through to the second half. And that bodes well for that. We opened 17 new stores, and we had -- and with 10 less, as I said, 10 less than the CapEx plan. Part of our strategy, as Mark spoke to at the last presentation, was really a South Africa focus and taking out countries that we didn't feel that we could scale at this point. And that's as a result -- and that's actually mainly the reason why our space growth was tempered. We renewed 125 leases, and we're very pleased -- and we've had some robust discussions with our landlords. And we're really pleased with how our partnership with them has gone. And we've actually got some good rental reversions, which I know is topical for many of you. What is pleasing, and you can see at the back of the slides and the supplementary information in the back, is that our trading density is still over 30,000. You'll see that all our stores formats' trading density improved from a growth perspective, was much better than our overall sales growth. And that also shows that all the hard work that we put into the science of -- what we call the science of retail, which is really maximizing space and really what we're good at, that flowed through nicely. From a strategic approach, as I said, we -- COVID -- these opportunities do, and they come around, do test your bias and then test your levels where you think you're performing well. And what we did do in the COVID time is that we were able to stress test a lot of our store metrics. And I'm pleased to say that we've been able to work a lot of our stores off of slightly less labor. And we are without impacting on store performance, for an example. And that has been a positive metric out of there -- out of that space as well as a much improved stock turn as a result of our trade. And as said, talked about our strong relationship with the landlord. And we're hoping that with our new growth vehicles, which Mark will speak to a little bit later, that will be a further discussion point or talking point with them about our growth and partnering with us for the long term. Mark spoke about our diversified portfolio of stores across the country and small, medium and large. And that convenience has really resonated with our customer, and it's given us a great strategic advantage. From an online perspective, we've invested for a long time in our omni-channel growth. And the click and collect model is really working for us. And we're really leveraging our store footprint, and that has been working well. For the net space for the second half, we anticipate between 1% and 2%. The real highlight has been our -- how we've -- our GP growth recovery on September last year. You'll see that we're at for gross -- our merchandise GP was 40.8%. You remember that we took significant markdowns or material markdowns in our biggest division, Apparel, last year as a result of assortment vagrancies, which we had to sort out. And that was our promise to you, and I think you can see that the merchandise GP jumping back to 43.2%. We've had some of the lowest markdown levels for many years come through. So we're very pleased at the level of assortment. The pitch of the product is really resonating with our customers, and this is where our business model should really shine. So we're very pleased about that. You can see that post lockdown, GP rands grew 8.7% in the positive, which we're very pleased about. This is despite the 19.6% on average exchange rate increase on last year, which is really tough in a value space to manage that. And our markdowns did help us in that regard as well as better cost/price negotiation. And our fashion-led assortment really resonated with the customer, which is great. And we left the winter period, which is -- obviously, in any retailer's books, to leave winter clean is your goal because it's a merchandise that has a very short window. And we're very pleased to say that our stock -- winter stock levels were very low, which also helped us not have to mark down as steep. Our Telecoms business is a really exciting part of our business and growing at an amazing rate. You can see the post lockdown GP rands, up 49%, and margin was at 20.3%, up almost 3 -- over -- just over 300 basis points -- or almost 300 basis points on September last year. We've had a strategic shift on our mobile virtual network that we own, and we've done a shift away from postpaid into SIM-only. And that's proven very lucrative or more lucrative for us. And we were worried about those GP margins. And the team there have done really well, and there's high acceptance for our mobile product in the market. And we've got some exciting opportunities around that into the future. Our Cellular, which we call Cellular and Mobile, is more the contracting side of it, Cellular being what we sell in stores, has really -- the GPs on handsets and accessories have been very strong. And that's also helped that GP growth. Overall, the GP rose to 42.0%, and gross profit rands, up 9.4%, we -- with those gains across the Apparel, Home and Telecoms segment, which is very pleasing for us. So we are cautious going into the second half with the rand. There's about a forecast up to 12% additional inflation that's going to be anticipated from the rand there. And -- but we've got a very disciplined hedging strategy, and we feel that, that part of it is covered. From an overhead expense perspective, this has been a really tricky area, as I explained a little bit earlier. But total expenses were up 2.2%. We've tried to take out some ones-offs, and we're not trying to do fancy accounting here. But we're just really -- just trying to give you some level of normalization, and that's the impairment that sits there on right-of-use assets and the IT assets and additional -- and I emphasize the additional debtors' provision that we put over and above our IFRS 9 model on the economic overlays. And that together gave us a minus 4.5%, which is probably a truer reflection of what its -- our expense growth was. Like all businesses, we took -- on the selling side, we took expenses as a result of getting our health and safety at our stores right and PP&E., and that cost us over ZAR 20 million. Our employment costs were down 18.3%. Obviously, the TERS, part of it, we received several questions around TERS and particularly on rental concessions that we got from our landlords. And both of those, you can see there from the rental concession perspective, was -- were material. But I must emphasize that over this period, our provision versus the September of the prior period, our debtors' provisioning and write-offs were significant, which marginalized a lot of those gains. So I think that is a good performance at minus 6.6%, bearing in mind that we grew 2.2% weighted average space growth. So that is -- we were up against that cost base with a new cost base. We obviously took a right-of-use asset we had to assess in terms of IFRS 16, our lease assets. And we're pleased to say that we've had very few loss-making stores. And we also -- our future forecast for the 5 years only required us to take a 10.6% right-of-use asset impairment at this point. If you exclude -- and again, if you exclude the impairment and the debtors' provision, the additional debtors' provision that I spoke about above, selling expenses were down 8.8%. Administrative expenses do look high at 30.5% up, but bearing in mind that we have got that impairment in there of ZAR 142 million. We've also had -- we had a strategic shift in the way we wanted to flow our -- some of our employment costs. And that -- if you strip some of those timings out versus the prior period, the employment costs were actually down 3.8%. From a balance sheet perspective, like Mark said, when we went into COVID, our balance sheet was the thing we wanted to preserve and protect, particularly going into all the strategic initiatives that we had leading up into COVID. Our balance sheet protection in order to actualize those was very important. Inventory, as we said that -- I think in June, we said that one of our key objectives was fiscal discipline. And fiscal discipline was really around how do we maximize the utilization of our inventory without compromising sales, and how do we make sure that our credit environment, and then that will obviously be our trade receivables, was responsibly managed in this way and not create long-term problems for us. And I'll take you through a little bit more of that. So -- and then obviously, our cash, which you can see, is up at nearly ZAR 6.4 billion. So from an inventory perspective, we -- stock on hand, which is basically stock in trade, and then our warehouse was down 16.7%. And if you -- this obviously was enabled by an agile supply chain, which we're very -- which Mark spoke to a little bit earlier, particularly how we had to reflow stock. And we're very pleased with how our business responded and our suppliers partnered with us through that time. Goods in transit, which is obviously based on the timing of how we flow stock into the summer -- spring/summer period, was up 44%. But that's obviously stock that's on the water, on ships. What is most pleasing, and I suppose most comforting to us and should be comforting to you, is our markdown units were almost 40% lower than the prior year and as a number of our -- as a percentage of our stock, also significantly down. From a cash perspective, obviously, we -- higher-than-expected free cash generation. We had still -- we've got ZAR 531 million in non-South African territories. Obviously, that's -- part of that is working capital management as well as just timing as a result of dividends that we would have to declare. Working capital improved almost ZAR 1 billion, which we were very pleased. And that's obviously, when I take you through the cash flow, supported that cash number. Cash generation. Just to reflect back on that slide that we gave you in June. You see we opened in March with about ZAR 4.7 billion. As a result of that April period, we dropped nearly ZAR 2 billion in cash, obviously as a result of not trading. Just a reminder that April is almost our second biggest trading month in the year, calendar year, behind November and December. So when you lose April, it was unfortunate. And so we obviously had to recover trade, as Mark said, recover it nicely. Our high cash generation as well as our strict working capital management and the reduction in our debtors' balance enabled us to generate cash -- operating cash flows. And also obviously, we restricted some of our CapEx together with not declaring a dividend -- second half dividend last year. So we landed on ZAR 6.4 billion, which enabled us over the time, as we got more confident, and we felt that although erratic, some of the sales performances at times, we did feel that our cash generation was strong. And that put us in a position to declare ZAR 2.10 at our stated 63% payout ratio, which is what we target. We obviously didn't need our debt facilities. The equity raise, which Mark spoke about -- or will speak about more, was not needed. And you've also noted in the SENS that we obviously have signed a sale agreement on an acquisition, which Mark will speak about later. And that's also going to go into this -- against the ZAR 6.5 billion. And we also did the share buyback. Some of it is not obviously in this period. It flowed into November, but we're very pleased to do a share buyback. And that was as a result of -- which Mark will take you through also a little bit later. We do -- however, I must stress that we do feel that the second or the threat of a second wave of COVID is on -- it's still a real and imminent threat. And we've seen how those type of things can have an impact on your cash. Cash movement, which is very pleasing. Our cash from operation was only down 8.2% (sic) [ 18.2% ], which I think in our press ad, we showed that our cash conversion ratio was over 200%, which is very strong. And we're very pleased about our working capital. Obviously, as a result of just managing our stocks exceptionally well, I believe, our debtors' balance being down as a result of managing our debtors' book and as well as some timing on some creditor payments, nearly enabled us to generate over -- nearly ZAR 1 billion with the cash, which is great. Interest received was up 12.1%, obviously on the higher cash balances. It was the timing in the tax which reduced our operating cash flows by ZAR 525 million. That was as a result of -- versus the prior year. Our store fixtures and fittings and our intangible assets as a result of our platform or IT modernization, we continue to invest in that regard. And obviously, the dividend from last -- that we didn't declare last year didn't flow into this cash flow as it would normally. And we did a share buyback of ZAR 85 million. Obviously, the total share buyback was about ZAR 165 million. We had a much bigger program on the go. But the levels we had set, which you aren't allowed to tamper within a closed period, we couldn't reset. So as you know, the repayments of lease liabilities now falls within financing activities. From a credit perspective, it's no secret that credits -- the credit market has been highly constrained. And you can see there from the top left-hand graph that the consumer health continues to be below the 50% line, which is very, very -- it's obviously a deteriorating credit health. You can see that, which is also reflected in the number of accounts in arrears, has grown significantly. If you look at the global financial crisis, which is on the far left-hand side, versus the -- where we are right now. And more worrying, the percentage of total rands that are in arrears, which is that small little black line rising at that acceleration, is really worrying for us, and I suppose, from a credit perspective. And we're starting to see the distress in the book, and then I'll sort of move over to the right-hand side of the slide and more our response and -- because many of you will know that we're very prudent when it comes to credit granting, and that has served us well, albeit that sometimes you can leave sales on the table. We just felt that we weren't willing to take retail rands at the expense of having to write it off later. So our credit sales for the period were down 27.3%. I mentioned that a little bit earlier. And that's as a result -- and there's obviously applications. We're down 27.4%, and our approval rate was down 33.9% as we tightened the scorecards. We also -- I'll say we tightened the scorecard, but what is surprising with the latter, I suppose, in so many regards is that we are finding and as some of our competitors, particularly the Edcon Group, we're finding that a lot of those customers are coming across our threshold and we're starting to see some of their credit scores, which were actually much better credit scores coming to us. So that was a positive. So we are seeing some changes there. But you'll see the applications in the market were down 45%, and the rejection rate of the market was 67%, which is very similar to us. So I think everyone's in a similar -- taking a similar stance to this. And you'll see many of the banks have raised quite significant provisions, which I'll now speak to now. So our total debtor's book was down 7.7% on September last year and 11.7% on March. Our net bad debt as a percentage of the book, was 8.1%. And our impairment provision has risen from 7.5% last year to 15.2% and 10.4% in March. We obviously, as I spoke about a little bit earlier, there's been a bit of -- obviously, as we result -- as a result of us freezing the book for some -- for many of our clients during March and April, some of those customers and the roll rates that we're experiencing will only flow into the second half. And so therefore, we believe that this impairment provision is prudent. It's actually mainly driven by the IFRS 9 model. And that's why that movement is there. This -- from a collections perspective, which is the bottom of the graph, we're starting -- obviously, you can see in April and May those collections were below -- obviously, the red line is the '21 year and the black line is last year. You can see we were significantly down. And that's as a result of 80% of our collections happen in-store, and 20% of our collections happen through alternate channels like EFT and Zapper and the like. And I think we spoke, too, about our agility in terms of those things earlier and how we introduced new payment channels. But you'll see the main point is that how collections as a percentage of the book have restored, and they're back at around the 18% mark, which we're very pleased about. And that's over to Mark on value creation and growth.

Great. Thanks, Mark. And so let's -- I think let's just take a step back and reconsider what we've been saying at the last half year or even at the year-end. And in May when we last spoke to you, we said that we had undertaken a detailed review of the merchandise processes and structures in our largest division and identified areas for improvement. And by far, the most significant opportunity was to make sure that we had gained market share in Mr Price Apparel. So I look back on that. And I think some of the words that I used was that we couldn't yet see the results in the numbers, but I could say it in our people's eyes. And hopefully, when you gauge what we've been up to in this last 6 months, it's hardly the sign of a business or a signal of a business that is constrained by a global pandemic, and we've achieved many other things. So during this whole process, we expected -- sorry, we were actually going to go through a detailed research phase, and that entailed, obviously, looking at the whole market, identifying opportunities and then also considering whether we wanted to chase those opportunities organically or via acquisition, and that's really filled a lot of our head space over the last 6 to 8 months. And whatever we did, we were satisfied that we had the balance sheet that was going to fund our growth plans, and we're relieved to have the strength of the balance sheet that we had. Obviously, it just didn't happen. It was by design and was years in the making. So if you start looking at the things on the bottom left, they are the kind of things that we are speaking about is frontline investments, so that was investing back into our store environment and back into our brands. I've covered that just now. We are considering new categories. We are looking for growth, as I said, via -- organically or via acquisition. And we are considering a lot in terms of the geographies that we were trading in. And I've spoken about almost 93% of our trade being in South Africa's borders. And then there's been a lot of question about share buybacks and how we think about dividend policies. And we said at that time, and I'm going back to even last November, that we would consider share buybacks but in the greater capital allocation discussion. We then go into the period April to June. Of course, that was a big sort of react phase for us, had to deal with lockdown. Cash preservation was the priority. And at that point, Mark just explained that our own cash dipped by ZAR 2 billion to around ZAR 2 billion. Obviously, there's a concern about our own cash flow, not knowing where COVID could go. And we also knew that -- we had a feeling that there would be potentially businesses that would come up that we might find very attractive and so we thought it was prudent at the time to actually get the permission to do an equity raise if one of those opportunities came along. It was never a plan to go and raise equity via -- cash via equity raise, sit in the cash and then look for an acquisition. And I'm delighted to say that despite the acquisition that we have made, that will be funded in cash totally, and we will not be doing the equity raise before December, which is the time frame that we have permission for. There's obviously a lot of pent-up demand, and we felt that particularly in May and thereafter in the Home divisions. And our own sales exceeded that initial scenario planning that I mentioned earlier, and that obviously led to increased cash generation as well. So there was this constant buildup of cash throughout the cycle, which I guess was great for our balance sheet, but also great to fund the acquisition that we're talking about. Just talking about capital allocation, this is -- the source of this information is JPMorgan. But I guess, what does is talk about how we've invested capital and how we've treated investment decisions. And you can see there, whether it's return on invested capital, EBITDA margins, our sales to invested capital ratio or ROIC minus our weighted average cost of capital, we stand up very strongly. I had mentioned also when I spoke about investing in the front line, one of the key things for me was actually investing back into the Mr Price brand. And many of you would have seen and heard about our move back to Mr Price, so effectively dropping the MRP or MRP Home or MRP Sport and firmly reinstalling the words, Mr Price, which has been very well received internally. MRP will still exist as a sub-brand on some of our merchandise, but we'll now go through the process of as we build the budgets and the strategy for the new year, deciding how to, in fact, what to fund in terms of store signage, et cetera. Store enhancements and navigation. I did mention that I don't think we were putting -- or have been putting our best foot forward in this regard. It hasn't been an absolute priority in the last couple of months, but it obviously is important and top of mind, and we hope then to complete that review, build it into our strat process and talk to you next time we meet about what that means in terms of future capital requirements. But generally, I'm feeling that we're waiting too long for store revamps. And in that process, I guess, the customer feels a bit disrespected in terms of the overall experience. Great advancements that we've made in product quality, fabric, fit and sizing. And in fact, just talking about quality what we did, I'll get on to just now, but we actually sent out, I wouldn't call them gift packs, but call them sample boxes of some of our products to some of you so that you could actually feel the merchandise in your hand and look at the quality relative to the price that we were actually selling it for. So it's a great value equation at the end of the day. Talk about going back to our roots. We've also -- relooking at brand sponsorship as of one of the potential channels, but obviously, not taking it to the levels that we were many years ago. But one of the key things that we are doing, we've been appointed the technical sponsor to The Sharks rugby team. And you'll see the Maxed logo on the Sharks' shirt from about March next year. And as you know, we've had an ongoing relationship with other events like the Midmar Mile, the Comrades Marathon, et cetera. And in fact, if you just looked at that running shoe there, we've got 22 gold medals in the last 7 years. So that's top 10 finishes in one of the most grueling races in the world at a shoe that costs a quarter of the price of an international brand. So that's something we're very proud of and aim to certainly push the value of our private label and in particular, I think there's a massive opportunity in our Maxed Elite One Up private label as well. Carrying on about brands. We're very proud of this, but obviously, I've put plans afoot to make sure that we increase the value of our brand. Mr Price places 21st overall in terms of brand value rankings. And we need to get that up the ladder, but very proud that we've been recognized as being the fifth most innovative brand in South Africa and the fourth most loved brand. Other areas of capital allocation, stuff that we have spoken about over the years, so -- over the more recent meetings, so I won't go into in great detail. Resourcing is obviously a key area for us. So all the tools that we actually implement there and bring to life to improve process and use across our supply chain are obviously there to unlock value in it. And many of you would have heard about the so-called agreement to procure 65% locally, local product. We've actually, in meetings with the DTIC, we all committed -- all NCRF members have committed to buy more locally. Obviously, the commercials have to work out. But we've been through a pretty thorough exercise, and in doing so, have identified opportunities to move our local production significantly from 80 million units a year to over 100 million units a year in the next 5 years. We've spoken previously about the ERP and planning systems. Those continued to go ahead, although there was an impairment of some of our IT real estate, as Mark spoke about, I think we're making really good progress there now. As I guess, many organizations, we're investing in predictive analytics and machine intelligence capabilities and have started to land some of those. So very happy about that. And I guess the whole e-commerce landscape is one that is gaining a lot more attention these days. We're actually replatforming ours to Magento 2. It's cloud-based, and it increases speed and capacity to meet the levels of demand that we think are now permanently there. We've also gone live in opening up collection -- more collection sites. As you know, we've got to click & collect in our stores. But there's an additional 900 collection points that we've teamed up with Pargo and opened up to that. So once again, it's really aimed at just making our products more accessible and it talks to customer convenience at the end of the day. Just carrying on about our e commerce performance. The 5-year compound growth that we've had before -- before the onset of this financial year was 23.5%, contributing 1.5% of our total sales. And post lockdown, our growth has been almost 72%, and the contribution has grown to 2.6%. I think the key thing is, and when you look at the performance of online on the graph on the right-hand side, while for some time it was tracking the performance of that of our larger stores, our flagship stores, since lockdown, it's actually kicked on very nicely and I think permanently outstripping our flagship stores. The key for us, and I think everyone knows Mr Price very well, we'll continue to invest in channels that are going to be important for us in the future, but always do keep an eye on profitability and the bottom line. Looking at our traffic to our mobile traffic and our web traffic, there's total traffic increase by 78.6% in this period. And in fact, our mobile traffic on its own increased by 97.5%. So a great push on there and almost 66% of our total online traffic is coming from a mobile device. Mark spoke about the share buyback a little bit earlier. And I think the key thing here is that as we sort of traded through the lockdown period, the share price was obviously depressed, and we ended up acquiring 1.3 million shares at ZAR 126. But unfortunately, the share price started moving and we had to set trigger points in place, and we couldn't adjust that during the close period. Looking forward, I think you're going to get a good idea of the growth channels that we're looking for. And any further share buyback decision will be relative to those growth decisions. When I spoke about the activities that we've been focusing on. And I think this really talks to them that over the last 12 months, we've delivered over ZAR 400 million of non-comp merchandise sales growth. And I'll go into some of them in a little bit more detail, but just to run through them, Scarlet Hill Beauty was launched. We went into Extended sizes, active-wear and furniture was important and will be future important growth areas for us. We opened up Miladys to online, likewise a Cellular and then had many other smaller contributing items there, too. If you then look forward in the current trading period that we're in, we've launched mrpBaby, that's a sub-brand. The baby market is a ZAR 3.8 billion market, and it's heavily dominated by 1 player. So we think we've got a good opportunity to gain market share there. And that offer is in the Mr Price Apparel store. Likewise, we launched Schoolgear, that's a ZAR 4.5 billion market, and we're obviously seeking to get double-digit market share in that market, too. And then mrp&co is really fun stuff. I'll take you through that in a second. And then Mark was talking a little bit earlier about tender types, we've introduced Lay-by in our stores. That's working very well for us. We accepted Zapper and likewise, RCS card acceptance went live this week. So those are all these different channels for us to contribute. And then, of course, the big question is the acquisition, which I'll go through in a second. So going back to the non-comp launches, Scarlet Hill Beauty, and you can see some of the product there. You might have it in-store as well. That's now, obviously, different parts of the merchandise assortment, but it's now represented in 180 stores around the country and just relatively in terms of its sales is performing ahead of plan, and its GP is actually ahead of our divisional average as well. So very pleasing. Extended sizes is the same kind of story, performing well, GP, because of the categories that was introduced is also higher than the divisional average. So these are just some visuals on mrpBaby. As I said, there's a very scant potential market. We've launched it in 188 stores and online. And the early results we've had is excellent. And I think it's -- this is real differentiated product, and it gets back to what does Mr Price stand for, exciting and delighting, as I mentioned, there's actually baby product that we had distributed in those boxes. And if you feel that quality relative to the price, we think there's real differentiation. And of course, I think the one thing that you're always guaranteed to get on Mr Price is that really different handwriting that you don't get at other competitors. So really excited about this opportunity, and there's just some visuals on our marketing materials. And in that, you can also -- you can see exactly what I mean by the handwriting. And you can also see some of the price pointing as well. mrpSchoolgear. That's actually just started launching. So we're a bit ahead of plan there. Look, I guess, at the end of the day, not a great opportunity for product differentiation. I think the differentiation comes in our marketing and also just gives shoppers an excuse to come into a Mr price store again, that they can get differentiated product with all our other revenue streams and our other product categories. And then once again, there's some of the key price pointing and which compares very favorably to the market as well. And the great headline for this is that this is all produced locally in South Africa. mrp&co is the fun stuff. So as you can see there, it includes tech items, pool and beach, lunch club, stationery and those kind of items. And this is part of the strategy to also increase basket size, which is working very nicely for us. And you can see some of the individual items there and price points as well. Okay. So I'm going to focus the rest of the discussion on then looking to the future. First of all, in terms of geography, we've made the decision. We've communicated to the market already that we plan to remain in South Africa. I'm going to substantiate that one and go through the thinking in a minute. We're going to talk through new concepts, new sectors or the potential for new sectors and the acquisition itself. So when you look at the pie chart in the middle, that is the 2019 total retail sales in South Africa, and that's per StatsSA. But as you can see, it's a ZAR 1.1 trillion market. We've got revenues of approximately ZAR 21 billion a year across those 3 sectors that you can see highlighted or outlined in black. So it's that pale blue, it's the red and it's the gray. And so we actually represent 6.8% of those categories. So by inference, it leaves about ZAR 287 billion in market share that is available there, and we aim to increase our allocation on that side. I think the further decision, which is only highlighted by the potential market share that we don't presently have is that I think Mr Price is known for its ability to differentiate and disrupt. And of course, this is all underpinned by the fact that it's a marketplace we know very well. We know all the significant players very well, but most importantly, we believe we've got the skills, and we believe that we understand consumers in this market. So I don't really have to take those risks looking at foreign markets. And many of those things that I've just mentioned would be big learning curves for us all. So in fact, I'm more than comfortable staying locally. And I think if we execute well, I think we can do the company proud. This is just a bit of a lighthearted humor, but it's a social media feedback that we do get. And what we find with our customer set, they never shy to give us advice of the kind of things that we should get into. Quite like the mrpairways on the left, but I don't think we're going to get into airlines anytime soon. mrpbuild, so building materials. We've got no plans to go there. But my personal favorite is on the right. And it's that says, it's now time to start a political party because we've proved that we won't rob view. So thanks for the input on that, but we're not going to invest in any of those categories. In fact, if you look at our -- the markets or the businesses or the chains that we do presently have, we've just laid it out in terms of those positioning. So what you can see there is that we're obviously very heavily focused on fashion value, as you know, aspirational value or niche product. We operate in that space with Miladys. And what we mean by aspirational value is that either we could sell items at the same quality at a better price or the flip side of that. And I must say, setting the same quality for a lower price seems like a great idea to me rather than the other way around. Just some information that's recently been released by maps is that Mr Price was the most shopped apparel retailer in the last 3 months in men's and ladies' apparel, as you can see in the graph here. When we then look at where we think the opportunities are. And so that the present operations have been shaded back to gray. One of the things that worked to us very well over the years is when you look at the homewares column there is that we've had Mr Price Home. And as you know, it's a differentiated value product. But we are protecting what we had called the undervalue of Mr Price Home by a Sheet Street offer. And those 2 businesses have been able to coexist and perform very nicely in the same stable. We've then, part of the strategic thinking that we had been applying ourselves in the last 6 or 8 months to was then applying the same principle to Apparel, and I'm going to talk about that. But where we see further opportunities is in that aspirational value/niche category that in the case of homeware, maybe that would extend slightly into premium, but it certainly wouldn't be the lion's share and aspirational value and more private label product would really be the space that we would feel comfortable in. So I think opportunities within apparel and homeware. e-Comm, we're actually opening up Sheet Street in the new year. And mrpricecellular as well. They do currently sell through the Mr Price site. But obviously, we're aiming for a fully integrated site on their own behalf. And then a new sector, which we're not going to go into a lot of detail now. We do have some representation in this sector, and we think, in fact, there's more than 1 opportunity in it. And yes, it's firmly in that aspirational value category, although there'll be elements or could be elements of fashion value in that, too, and maybe even some premium, but a completely new opportunity for us. So what we're doing now? We've done that early market research. We've discussed the concepts internally. We've discussed them with the Board. We've got a clear sense of direction, and we're now going and building the detailed business cases to then get final sign-off. And within that, we'll be obviously modeling what kind of returns we can get, what investments that are required and what our returns -- our return threshold, whether that's met or not. I think if you had to then think further down the line, there's more than enough to keep my hands busy there. We're also considering as an -- not as an urgent or not as a priority at all is I think we certainly have the Red-Cap halo effect with our brand. And if you ask anyone what Mr Price stands for, it's what I said a little bit earlier, is differentiation, disruption, good price, excellent value. And I think we can potentially even take that to other markets. But nothing on the horizon, certainly, in the next couple of years. So long-term potential. Anything that we do do on the investment front, it's very key that we don't overextend ourselves. So in the acquisition that we're looking for, they have to have strong leadership skill teams, and that applies internally as well. We're not going to go and have start-ups and then soften or weaken our existing trading divisions. So I'm delighted to announce that, as Mark was saying, we've concluded terms with a local value retailer Power Fashion, maybe known to many of you, may be completely unknown. One of those names that have probably gone under the radar, but nevertheless have been an extremely impressive performer over an extended period of time. A business that was started in the 1950s, but -- I just wanted to take you back and look at the criteria that we had set down, and we've consistently communicated this over many years, in fact. And I guess we'll give you a sense of the type of business that we were after and therefore, the type of businesses that we weren't after, I think this will now paint that picture very, very clearly. First of all, it's a value-focused fashion business. Those revenues are entirely cash-based and obviously, aligned to our core capabilities. The transaction size wasn't significant, so we didn't want to make big all-in bets. 4% of market cap is a decent size. So it is aligned to our capital allocation strategy. And as I said, it allows us to be settled fully in cash by ourselves. Quite key in the whole decision was this is a high-performing business even through COVID. It's not a COVID casualty and is not a Fixer Upper, in fact, certainly, the businesses that I put line of sight to. I think this has got to be certainly at the top end of the scale in terms of its performance over a long period. One of the key things, it is an existing business with attractive scale, and it is available at a recent -- at a reasonable valuation. If we are to drop that into our earnings, it is accretive from day 1. And we said there that there are significant growth opportunities within this business. I could even go on to say, perhaps with did consider even exceptional possibilities. It's based in Southern Africa. So it's South Africa, Swaziland and Lesotho, presently, 170 stores. But obviously, the capacity to go way, way beyond that. So it really meant acquiring a business with -- in a territory that we know, with operations that we know and we weren't exposing ourselves to any additional risk. And lastly, but probably one of the key things could have been near the top of that list was that we are taking over a very strong competent management team, which prevents distracting any of our existing executive. And I think at the end of the day, this is -- it fits like a glove. There's an excellent cultural fit, and that was not only important for us, but the seller as well. Just in terms of the customer that is -- that it does aim to attract. It's low to mid-income households. And if there's a slant there, it's probably to the low end. And it's more price focused than fashion focused. So price does come first. And it offers product to the whole family. As I said, it's -- it has got fashion product. It's not fashion forward. And there's a much better balance between curated assortments and stock buyers with a much higher proportion of the latter than we do have in our stable. And as you can see, it sells other items other than clothing, cellular products, electricity, some basic household items, some basic cosmetic items and some other product. In terms of its location strategy, it's typically a high street and community-type outlets where stores exist and really not in the regional or super regional centers that, certainly, within our own stable, are struggling more than the average store. So for us, it's a great differentiated business model. It's a very simplistic one, and they don't introduce a lot of complexity to a process that works very well. And what it does for Mr Price is it allows us access into a wider customer base. In fact, there was a survey done quite recently that looked at spending patterns, pre and post COVID. So it took 2017 and 2020. And it just showed the shift into lower income households and how that's translated. And I think this really positions this opportunity very strongly to further capitalize on that. I think I've been through most of this. I'll let you read it in your own time. The performance metrics in terms of overall bottom line are the margins are double digits, but they are slightly less than the Mr Price Group's, but we're more than happy to take that and to sacrifice a bit of our overall metric ourselves because of the exceptional growth opportunities that do exist. So the process from here is that we've obviously got to go through regulatory approvals and that hurdle. And if all goes according to plan, effective date is potentially April next year. So looking at the outlook for the rest of the year, so it's a bit of a mixed bag, I'm afraid. I think there's a tremendous amount of internal confidence and certainty -- confidence around the new things that we are introducing to the business. There's a lot of energy in the business through the various growth channels that we are after. But I think you've got to be realistic. As Mark was saying, the threat of a potential second COVID-19 wave is still real. So that does put a damp on things. But of course, we are thinking and planning for the long term, not for the short term. And although we've had a really strong performance post the end of September, for the first 6 weeks, our sales were up in double digits, we did have a slowdown last week. And in fact, this week, we're calling backwards just because of the whole dynamic around crowds and social distancing in a Black Friday week. So we've been a lot more cautious. So we're not too sure how long this will prevail for. If we had to follow European markets and western markets, there is a likelihood of a second lockdown phase and would have to obviously lean on the deep learnings that we had during the last 6 months. But I think the last 6 months have proved the resilience of our business model. And really, as I said earlier, the resilience of our people. To have managed to do all these things while dealing with COVID and everything else in their lives has been nothing short of exceptional, and I think we've got an exceptional group of people. Lastly, we had been through this -- the creation of a new vision in the company and the strategy to achieve that vision. In fact, it was only discussed with the Board in the Board meeting earlier this week. So we obviously didn't have time to package that. We'll do that, and we'll speak to you in the new year about exactly what that vision and strategy is. And I look forward to engaging at that time. Next time we will speak in the trading updates will be mid to latest January. We haven't set a date to it yet, but we look forward to that. Thanks, everybody. Matt, happy to take questions, and we'll go forward on that basis.

Good morning, everyone. We do have a number of questions. I will try and group them together. And just apologies on the issues that we have had this morning. The presentation slides will be made available on the group website. So you can't get those after the presentation as well as a follow-up SENS announcement has just been released with regard to the acquisition. So just quite a number of questions just around gross margin and expectations into the second half, particularly with recent exchange rates improvements, what is the outlook for second half gross margin and long-term sustainability?

Yes. I mean I think why Mark went to some lengths of describing what the GP performance was in the first half is that was the rebound, a lot of hard work that we had put into improving performances that eventually would enable us to put on our ingoing margin that we needed to, but also limit our markdowns that really bore fruit, and credit to the teams that were focused on that. So what it did mean is that there was obviously a soft base in one of our divisions last year in terms of its margin performance. And by getting things right this year meant that we could really get back to GP margins that we think are sustainable. So that -- if you had to look into the second half, Mark was talking about inflation in double digits if you just had to purely look at the exchange rate. If we had to then look -- take that and drop it into what input price that we want to put on, what we're forecasting for margins, we'd probably estimate inflation of around mid-single digits. And obviously, within that, you are protecting some key price points in a market that is, at present, as it is. So I think in terms of -- maybe the question is, are the margins that we've delivered in the first half sustainable? And is at what we're aiming for? And the short answer is yes.

Great. Thanks. Next question is relating to the launch of the new categories with Baby and Schoolgear, just in terms of where they sit from a pricing perspective in the market and the margin relative to the existing business?

Yes. Very competitively priced, and that's not out of my mouth. There was a, I think there's a news article on News 24 years they about Schoolgear in particular. So up against the heavyweights in terms of who dominates market share, we compete very well on price there, and on both fronts, baby and uniforms. It's slightly less than our overall GP margin, but, in fact, very, very good margins at the same time. So very happy that we're not diluting our overall group GP significantly at all.

Okay. Just a question with regard to CapEx. So what is the normalized run rate for annual CapEx? And can we expect a ramp up in the current June CapEx to make up for the reduced CapEx during the first half?

Yes. We had to look at where we're calling annualized CapEx, and this is CapEx that's all-in, so it includes IT. We're probably looking at ZAR 450 million to ZAR 500 million this year, probably closer to the ZAR 500 million. But as I said, that has included some IT spend that we've recently approved. And I would then, if you sort of roll that forward, and we'd have to then go through the process of including the acquisition from April, I would say that you can probably bank on that range as well. But one of the things that I did speak to was not only store development and store growth. I spoke about the replatforming of Magento to Magento 2, and I also spoke about looking at brand refresh and the store environment. So that will all add into it. But hopefully, we do those things because we generate sales in return. So that's what I expect to be able to talk at the year-end about in a lot more clarity, with a lot more guidance.