PZ Cussons plc (PZC) Earnings Call Transcript & Summary

So good morning, everyone, and welcome. Thank you to those who have joined us in person and to those who are on the line. Today, Sarah and I will update you on our results for the financial year ending May 31, 2024, and provide some color on the strategic steps we are taking. Let's take a look then at what we'll cover this morning. I'll start with some overall comments before Sarah takes us through the financials in more detail. I'll then provide an update on our strategic progress and the key priorities for FY '25 before handing over to you in the room and on the line for Q&A. So let me start with some overall comments on our journey to transform PZ Cussons into a business with stronger brands and a more focused portfolio. First of all, we have executed against the strategic priorities we set out last year to make continued operational progress, strengthening business fundamentals and driving in-market performance. I'll go through this in more detail later, but it is important to note upfront that we have had to deal with the challenges of operating in Nigeria. While our reported numbers are obviously heavily impacted by the 70% devaluation in the Nigerian Naira, we have delivered operating profit in line with our guidance. We have clearly flagged this before, and Sarah will take you through the details of the impact on our numbers. Later, I will cover the comprehensive actions we have taken and continue to take to mitigate the risk involved while sustaining competitive operations on the ground. Secondly, alongside the operational progress and following a detailed strategic review, we announced plans in April to reduce the complexity of our operations and to mitigate risk, thereby enabling us to maximize shareholder value in the years to come. As we announced this morning, we are progressing with our plans to sell St. Tropez and have received a number of expressions of interest in our Africa business, recognizing the potential of our brands and our people there. And these expressions could possibly lead to a partial or full sale of our African business. Finally, the momentum of our business last financial year, both in terms of revenue and market share performance has continued into the start of our new financial year. Today, we're reporting 4.7% like-for-like revenue growth for our first quarter, including 2% revenue growth outside Africa, underpinned by 3% volume growth. And I'll touch on our priorities for the rest of FY '25 later as we look to maintain this growth momentum for the full year. In summary, then, we've made operational progress while dealing with the significant challenges of operating in Nigeria. We're getting on with evolving our portfolio to focus where we have more confidence to win in the future, and we're off to a solid start in the first quarter of FY '25. With that, I'll hand over to Sarah.

Thanks, Jonathan, and good morning, everyone. I'm going to share a summary of the FY '24 full-year results, walk you through the key movements year-on-year at a group level, and then by regional reporting segments before moving to guidance for FY '25 and finishing with current trading. As you'll all be aware, and as Jonathan has already briefly touched on, our financial performance this year has been defined by the material impact of the devaluation of the Nigerian Naira, which declined 70% during the year. This has clearly posed operational challenges for our Nigerian business, materially impacted our Sterling reported financial results, and put pressure on the group's balance sheet. And mitigating this impact has been a key focus for us this year, and we have made good progress repatriating cash and reducing the reliance of the Nigerian business on the wider group so that it is now overall self-funding. We've also continued to make targeted investments and have reprioritized spend across the business and have, as a result, seen continued strategic progress. So turning to the key lines. Revenue declined by GBP 128.4 million, of which GBP 130.6 million is attributable to the devaluation of the Naira. More encouragingly, underlying revenue trends improved across each geographic region throughout the year with growth in both overall group like-for-like revenue and volume in Q4. Like-for-like revenue growth for the full year was 4.4%. Excluding Africa, like-for-like revenue declined 2.6% but saw good sequential improvements to end the year in growth. And as Jonathan mentioned, those favorable trends have continued into Q1. Adjusted operating profit declined by GBP 15 million at reported exchange rates to GBP 58.3 million, in line with the guidance given at the Q3 trading update in April. Were it not for the depreciation of the Naira at the very end of the financial year, we would, in fact, have been at the top end of the guidance range. Adjusted earnings per share declined by 28.6% versus the 39.7% decline in profit before tax due to a reduction in the effective tax rate and a lower noncontrolling interest in Nigeria. In light of the devaluation of the naira and in line with the interim dividend reduction, the Board has today proposed that the dividend payable in December be reduced to 2.1p per share. This equates to 3.6p for the year and is in line with our target of an earnings cover of approximately 2x. Free cash flow was GBP 41.6 million, and our net debt was GBP 115.3 million as compared with a net cash position at the end of FY '23 due to the GBP 141 million reduction in the Sterling value of cash held in Nigeria. Adjusted profit figures exclude the impact of material and one-off largely noncash items to provide a clearer view of the business's underlying operations. The statutory loss of GBP 84 million was driven primarily by the GBP 108 million ForEx revaluation loss in our Nigerian subsidies and the impairment of the Sanctuary Spa brand in half 1. Details of this and a more detailed description of what makes up the GBP 108 million ForEx figure are in the appendix. Turning then to group revenue. The first bar on the chart rebases the FY '23 revenue to FY '24 ForEx rates with a movement of GBP 149.9 million, and we've provided a breakdown of those impacts in the appendix. Like-for-like revenue growth in the year was 4.4%, as I said, driven primarily by a continued strong performance in Africa. Europe and the Americas overall declined as underperformance in the Beauty division more than offset the encouraging return to growth for U.K. Personal Care, which was a key focus for us last year. APAC declined with continued growth in ANZ, offset by a decline in Indonesia. Finally, the central revenue shown here, which is not included within our like-for-like branded sales calculation is due to the closure of our 7 Scent fragrance house as we transition to a lower cost and higher quality outsourcing arrangement. Turning now to profitability. Overall, adjusted operating profit was down due to the significant impact of the Naira devaluation on our Africa business. Europe and Americas and Asia PAC reported higher levels of operating profit, and I'll come to the regional details shortly. Central costs increased by GBP 3 million on an underlying basis, with some savings allowing us to continue to invest in key capabilities. The FY '24 reported figure includes a charge of GBP 9 million attributable to debt forgiveness in our Nigerian business in order to strengthen the local balance sheet. This had no net impact on earnings for the group overall, and we expect FY '24 central costs to be broadly flat. Let me now give a little more detail on each of our 3 regional segments. Firstly, Europe and the Americas, which has again been a tale of 2 divisions. Our U.K. Personal Care business, consisting primarily of Carex, Original Source, and Imperial Leather has delivered double-digit revenue growth and a significant improvement in profitability. Carex returned to growth for the year as a whole, the first year of growth since the pandemic, and delivered improving trends throughout the year. Original Source and Imperial Leather both saw double-digit revenue growth, and Childs Farm also continues to perform well. We're pleased with the performance of Childs Farm, reporting a second full year of double-digit revenue growth under our ownership, driven by continued strong commercial execution. Our Beauty business unit declined double digits, driven primarily by St. Tropez, where we experienced destocking from a major customer, and we had a difficult year in Sanctuary Spa. We've taken actions already in the year to reorganize the previously separate Personal Care and Beauty divisions into one business unit, both to bolster our commercial capabilities, but also reduce operating costs. So despite the reduction in revenue, adjusted operating profit and margin improved by 200 basis points, driven by revenue growth management and cost-saving initiatives throughout the year. In APAC, performance has differed markedly within the region, very much reflecting the trading environment in the different markets in which we operate. ANZ delivered another strong revenue performance with good volume-led growth in Morning Fresh and with Radiant now the third largest brand in the laundry market, up from sixth previously. In Indonesia, revenue declined as a result of overall economic softness and a reduction in consumer spending across the baby toilet category. Cussons Baby returned to revenue growth, however, in Q4 and has grown again in Q1 of this current financial year. Adjusted operating margin grew by 160 basis points, principally due to a further significant improvement in profitability in ANZ plus cost savings across our wider operations in Asia. In Africa, performance should, of course, be seen in light of the naira devaluation, with reported revenue lower by 41% despite nearly 30 rounds of price increases in the year. We saw only a 5% decline in volumes with trends improving through the year and into growth in Q4. Increasing prices to the point of fully recovering the 70% drop in the value of the naira in FY '24 would see any multinational brands uncompetitive versus local players. And indeed, the withdrawal of a number of those multinationals has created market share opportunities for PZ Cussons. Our focus continues to be on mitigating the immediate impact of the significant ForEx-related inflationary pressures, whilst also maximizing the future profitable revenue growth prospects of the business. And with this in mind, the continued progress to expand the appeal and the distribution of our brands is helping, as Jonathan will come on to explain. Our joint ventures continue to perform well with revenue in our electricals business up over 20% as we continue to focus on profitability and the PZ Wilmar cooking oil joint venture contributing GBP 10.7 million to operating profit. The overall margin for Africa was marginally lower than the previous year, including the debt forgiveness charge. Turning now to cash flow and the balance sheet. So this chart bridges from last year's reported cash and debt position to today, illustrating the impact of the ForEx movements. We've reduced gross debt by GBP 85 million down to GBP 167 million, in line with the guidance range of GBP 160 million to GBP 180 million that we provided in June, meaning the headroom on our borrowing facility is significantly higher than it was a year ago. Net debt has increased by around GBP 120 million, almost entirely due to the reduction in the sterling value of the naira cash balance, and sees us with the 1.5x leverage that we had previously indicated would be the case. As at the end of May, we had a normal level of local naira cash for operational needs and can now use that naira, not only scarcer U.S. dollars to purchase raw materials. So turning to guidance. The chart shows the operating profit movement into this financial year, essentially rebasing the FY '24 profit to exchange rates prevailing during quarter 1 of this financial year. Impacts from both the translation of earnings into sterling and from the revaluation of balance sheet liabilities have been included. In FY '24, in the year of devaluation, ForEx losses on the trading liabilities of our Nigerian subsidiary were treated as an adjusting item in the P&L. and as has always been the case, any ForEx gains or losses on intercompany loans considered to be permanent in nature were charged directly to reserves. However, in FY '25, we are now recording all ForEx impacts in our headline operating profit as a result of the increased likelihood that these intercompany loans and liabilities would be repaid in the event of a full or partial sale of our Africa business and so cannot be considered equity-like in nature. Had that accounting treatment been appropriate in FY '24 and at today's exchange rates, adjusted operating profit would have been GBP 40 million. Then if we assume these Q1 rates hold for the balance of FY '25, we expect to deliver underlying profit growth of between GBP 7 million and GBP 13 million, led by the continued momentum in our U.K. businesses. So on this basis, our adjusted operating profit guidance is between GBP 47 million and GBP 53 million. Naira rates will highly likely move, however, and we have provided here the sensitivity to them doing so. Firstly, a translational impact of around GBP 1 million per every 100 naira move against sterling, which I would consider to be a cash number as a given naira profit is translated at a different exchange rate. There is then also a further impact of around GBP 7 million per 100 naira move to the U.S. dollar as we revalue the loans and liabilities at the balance sheet date. This is a sensitivity that has always been present for PZ Cussons, but following the changes in accounting treatment that I mentioned, those movements are now charged to headline operating profit. I would not consider this to be a cash charge insofar as the ForEx revaluations do not change the cash flow of the business nor does the accounting change to how the ForEx impacts are shown change the underlying net asset position of the group. And as we go through this year, we'll look to reconcile between these movements so you can understand the figures on the various basis. Additionally, the GBP 7 million volatility is a gross figure and is shown before any potential mitigating actions we might elect to take, such as accelerating the repayments of any loans. And so we do expect this sensitivity to reduce throughout the year. That said, we see this level of P&L volatility and complexity as well as the overall economic exposure to the naira as being too high for a company of our size. And this is a contributor to our decision announced in April to evaluate our strategic options with regard to our African business. In the event that the business is sold in full or in part, then this volatility and complexity will be removed or significantly reduced. We experienced this volatility as a U.K. plc with a sterling reporting currency. And it doesn't directly impact the underlying economics of our Nigerian business nor the prospects of any potential transaction. Or put another way, the decision to account differently for these intercompany loans and liabilities has no bearing on the Nigerian consumer nor our teams there. So in summary, and to the extent one can put naira volatility aside, we're forecasting good underlying profit improvement elsewhere in the PZ Cussons Group. Finally, then a word on current trading, where we've continued the FY '24 exit momentum with a like-for-like revenue growth of 4.7% in Q1, that is the 3 months to the end of August, with Europe and Americas remaining strong with continued both volume and price growth in our U.K. brands, including Sanctuary Spa as well as a more encouraging St. Tropez trend in the U.S. We saw a slight decline in APAC with Indonesia recording a second successive quarter of growth, offset by the timing of some shipments in our wider Asia export business. And Africa continues to deliver strong pricing-led revenue growth. So with that, I'll hand back to Jonathan.

Thank you, Sarah. Now let's move on to a broader assessment of strategic progress. You should all be familiar with this slide. It summarizes our strategy that has guided us for the past 3 years in its simplest terms, 10 words, build brands so that we serve consumers, we reduce complexity, we develop people and we grow sustainably. Then we distill this overarching strategy into specific priorities for each financial year as we did going into FY '24. And as a reminder, we let you know this time, last year, in fact using this very slide, that we would be focused on continued simplification and strengthening of our Nigerian business in the face of the macroeconomic challenges, getting our overall U.K. business back to sustainable profit growth. And then as we strengthen our core, exploring and driving expansion beyond that core. And finally, continuing efforts to build the capabilities the group needs to win with our brands. Let's take a look at progress against each of these in turn before moving on to our subsequent actions on portfolio transformation. Starting with Nigeria. Our primary focus has been addressing U.S. dollar sourcing challenges while strengthening the fundamentals of the business. Thanks to sustained efforts from the teams involved in Nigeria and the U.K., good progress has been made. Firstly, through improvements in cash generation and funding. Historically, we, like other multinationals, have had significant challenges repatriating cash from Nigeria, in large part due to the difficulty of obtaining U.S. dollars. Over the past year, not only have we reduced our requirements for U.S. dollars, thanks to a focus on cash, unit profitability, and increasing local sourcing of raw materials, but we have also expanded and diversified how we source U.S. dollars. And these actions have enabled us to repatriate GBP 50 million, contributing to the overall reduction in gross debt of GBP 85 million. At the same time, though, we've continued to strengthen the competitiveness of our operations in Nigeria, for example, increasing retail coverage. We now cover more than 150,000 stores directly, improving the quality of our in-store execution versus the previous reliance on wholesaler coverage and driving the productivity of our distributor network. As a result, we have largely maintained our market shares despite nearly 30 rounds of inflation-driven price increases that we needed to put through in the year. As Sarah mentioned, this has involved us balancing our cash and unit profitability targets with maintaining competitiveness in the market and the ability to invest in our brands. Moving a little closer to home. Our #2 priority was returning the U.K. to sustainable, profitable growth. And I'm really pleased that the turnaround that we reported at our interim results has continued, not least demonstrated by the significant improvement in profitability of the U.K. Personal Care business. This is as a result of strengthened leadership and our determined focus to build back core commercial executional capabilities to focus on the right brands in the right sizes in the right retailers and channels at the right prices. And looking at some of our brands in turn, Original Source grew revenue by over 20% due to strong marketing campaign activity and increased listings with distribution points up 12%. Carex returned to growth for the full year for the first time since the pandemic, supported by effective revenue growth management, the launch of 1 liter refill packs, and the successful activation of partnerships such as the Gruffalo Deep Dark Forest Fruits for any of you with young children or grandchildren in the family, right? And it was really good to see that for the first quarter of getting Carex back to growth in the last 2, 3 years, we were able to say something, and now it's even better to report a full 12 months of growth. And finally, we've had continued success with Imperial Leather alongside the launch of Customs Creations. Revenue for the combined brands grew double digits in FY '24, with Customs Creations becoming one of the fastest-growing brands in the washing and bathing category. Imperial Leather maintained its market share with new packaging and new bottles laying the foundation for the return to share and revenue growth that we have now seen during our first quarter of this financial year. In summary, the renewed momentum and in-market performance underlines why we see the U.K. as a key market for us today and in the future. Turning to our third priority, expansion beyond the core. And I want to call out Childs Farm, which has seen its second year of double-digit revenue growth alongside continued business integration. The team has delivered another year of market share growth in the U.K. as well as opening up new international distribution, just as we set out at the Capital Markets event dedicated to Childs Farm last year. Growth was driven by strong commercial execution, including a 5% increase in distribution points, and we're delighted that awareness also continues to grow, up 4 percentage points based on our tracking, along with a near doubling of social media followers over the past 2 years. Notably, this summer [indiscernible] broaden our U.K. distribution footprint with the launch of 5 SKUs into M&S, displacing other brands and their private label offering, as well as the brand's introduction into Holland & Barrett stores, extending their online success into bricks and mortar. And that's a blueprint we've used to launch the brand in other markets, too. In fact, as we look beyond the U.K., we have now successfully moved Childs Farm in the U.S. from online to in-store with the introduction into Premium Grocery Chain Wegmans targeting mid- to high-income shoppers in the East Coast states of the U.S. That move followed the earlier launch in Germany into the retailer DM in late 2023. We're delighted with the positive reception in DM, where the Childs Farm Sleep Mist innovation became the #1 SKU in their online baby category. More recently, August 2024 was also a significant milestone, marking the beginning of in-house production of Childs Farm at our U.K. Agecroft manufacturing site, which I know a number of you have visited. Clearly, the integration of Childs Farm into the broader PZ setup will only continue over time, helping us accelerate growth while also delivering improved efficiencies and cost savings. Finally, I want to touch on our fourth priority, transforming capabilities. This is an effort that involves all of our markets, but let me focus here on the U.K. to highlight the actions we've been taking. During the year, we combined the Resurgent U.K. Personal Care business unit and the U.K. Beauty business unit as we look to address the underperformance of some of our beauty brands. Previously, operating as 2 separate business units with 2 leadership teams, 2 commercial teams, sometimes even calling on the same buyers at our customers and 2 sets of supporting functions. We now have one combined leadership team overseeing one integrated organization. We're already seeing benefits emerge, and we anticipate more to come. They include scale. The combined business is 30% in Personal Care alone. It improves our access to buying teams and the retailers and enables a more integrated approach to growing a wider range of brands with our retail partners. Simplification, we're harmonizing ways of working, integrating systems and reducing duplication. Last but not least, capabilities. Teams are learning from each other. For example, leveraging Personal Care's commercial in-store executional focus or Beauty's influencer and digital media expertise. Not only are these actions addressing some of the top line underperformance seen previously in Beauty, but we also expect to generate material cost savings as part of the integration. Let's turn now to look at the actions we set out in our April trading update, which are all about crystallizing value for shareholders. As we said then, our portfolio has been too complex for the overall size of our business. This complexity has meant that historically, resources have been spread too thinly. At the same time, our significant exposure to Nigeria, given the size of the business there as a proportion of the total group has represented risk as well as opportunity, especially as the naira has devalued and access to U.S. dollars has been constrained in the past. Following a strategic review, we set out to focus on where we can be most competitive and create value for our shareholders as we also seek to reduce that complexity and mitigate risk. Accordingly, we have initiated plans to dispose of St. Tropez. St. Tropez is a fantastic brand, but it's also our only material presence in the U.S. and in the premium beauty category. We see enormous potential for the brand, but under new ownership, and the process to divest the brand is underway. Meanwhile, as you know, we have been evaluating our strategic options for Africa. With the portfolio including noncore categories such as cooking oils and electricals and the significant volatility the group has faced as a result of its exposure to Nigeria, we are exploring a range of potential outcomes. The update today on our review of those strategic options for Africa is that we've received a number of expressions of interest, underlining the potential of our brands. Remember, brands such as Premier, Stella, Devon King's, Thermal are highly priced and have strong market positions with long histories in Nigeria. As such, these expressions of interest could possibly lead to the partial or full sale of the African business. While we do not have anything further to say at this time, we will, of course, keep you updated on both processes. Now looking ahead, I want to cover our priorities for FY '25, which is going to be a year of significant change. As noted by Sarah, we have already seen good growth in Q1, and our focus for the remainder of the financial year is to maintain and build that momentum in our U.K., ANZ and Indonesian businesses, to continue to strengthen our brand building and innovation capabilities as we develop a multiyear glide path of profitable revenue building blocks and to get on with transforming our portfolio to maximize shareholder value. Before turning to Q&A, a quick reminder then of the key messages from today. First of all, we are intervening on our portfolio with actions underway to maximize shareholder value following a strategic review. Secondly, we have continued to deliver underlying progress and strengthen the business fundamentals in FY '24 while driving in-market performance. Finally, we're working hard to transform PZ Cussons into a more focused business in attractive geographies and categories in which we can win as well as generate superior returns. We have clear priorities for the year ahead and remain optimistic about the future. With that, we will be delighted to take your questions, and I'll pass over to the operator.

Matthew Webb from Investec. 2 questions from me, please. The first is on the guidance for FY '25, where I think you, if one rebases the prior year number, you're guiding to between GBP 7 million and GBP 13 million of underlying growth. I think, Sarah, you mentioned that the U.K. was a key driver of that. Obviously, you've talked a lot about all the good things that are happening in the U.K. I just wonder whether you could just sort of in terms of, without necessarily putting exact numbers on it, in pound shillings and pence, what are the big drivers of that profit improvement? Is it washing and bathing top line growth? Is it the cost savings? Is it Beauty recovering? That's the first question. The second question actually is a bit of a subset of that, which is would it also be fair to say that Nigeria is probably going to be quite a big driver of that as well in that you're effectively taking the currency effect out, but are including the rollover effect of previous price increases and also the resilience of that business as a result of the various changes that you've made and indeed the amazing resilience of the Nigerian consumer. That's the second question. Sorry, I've actually got a third, which is the PZ Wilmar results look to me to be surprisingly good given the challenges in that market. I just wonder whether a, that's correct and b, if so, why?

Shall I talk about the drivers without the pound shillings and pence on the improved profitability in the U.K. and then maybe Sarah can pick up on 2 and the extra one you got for free on Nigerian PZ Wilmar. Obviously, what we have is a resurgence, as I used in my comments just now, U.K. Personal Care business. I am glad to say that is broadening to a resurgent U.K. Personal Care and Beauty business. In the first quarter of this year, not only did we see growth on St. Tropez, but actually, we saw double-digit growth on Sanctuary Spa, alongside continued growth on some of our washing and bathing brands, most notably Carex, which grew 7% in the first quarter. There are reasons for confidence that our brand positions are strong and/or improving. Now there is absolutely no reason for complacency, though, and we have to stay healthily paranoid because we've got some big competitors that always like to try and poke at us. At the same time, though, we are also attacking and addressing where we have opportunities for cost efficiencies. 2 examples would be, one would be in the overhead, obviously, where we've been able to combine Beauty and U.K., and we'll have the first full year effect of that for this year. At the same time, that Childs Farm move that I mentioned coming into our Hcrop facility has a material improvement on the Childs Farm cost of goods and therefore, P&L. It equally benefits other people drawing off that factory, most notably U.K. washing and bathing. It's a double win in that respect. We have a number of levers that we are working hard to pull to give us the confidence in the improved profitability of the U.K. business overall this year. All right? Sarah.

Matthew, maybe if I then try and take those words into some numbers. So that GBP 7 million to GBP 13 million improvement is driven by a few factors. One, the return to very broad-based revenue growth across our U.K. and other markets and actually -- primarily in some of the higher-margin brands for us that, that is a bit of an anchor on our mix. So we see some green shoots there of more broad-based profitable growth. In terms of Nigeria, we're planning for FY '25 on flat local currency margin, i.e., as we've exhibited in FY '24, an ability to take price to cover those local input cost increases. You see in the guidance, Matthew, we're making no determination of how those results will then translate into us in sterling, but we derisked our reliance on Nigeria, both in terms of our top-line growth and our underlying profit improvement next year, which actually beyond good revenue and margin improvement in each of our business units gives us a macro mix effect as a group, where historically, we've seen Nigeria growing ahead, structurally lower margin and it acts as an anchor on our overall group margin, and we see that headwind falling away in FY '25. And then on Wilmar, so Wilmar, we have a joint venture and it's a cooking oils business. It's a good business. It's not necessarily our business or our core business. It's not a brand-building business in the way that we would think about it. It's a very well-run operation, both up and downstream. We have a good team on the ground there. They actually managed to very well manage input cost variability, the cost of palm oil going up, they're able to price. If it comes down, they're able to manage volume through the factory. So they're a pretty resilient and agile business model, strong brands, good distribution, a good local management team. So we see that continuing to make a good contribution to our overall profitability, but perhaps a little bit less than in FY '24.

Okay. Who's next? Damian has put his hand up.

It's Damian McNeela from Deutsche Numis. So yes, let's start with if you look at the U.K. and just talk a little bit more about the resurgence in the performance that you've seen there. Is it sort of consumer-led? Or is it any particular channel or customer where you're seeing particularly good response? And then within that, the sort of Carex competition backdrop, please? And then just on the sort of the beauty brands and the integration, obviously, you've talked about the cost saving opportunity. But I think brands like Fudge, Charles Worthington, we haven't talked about really for any length of time. Is there a chance that they could contribute to revenue growth going forward? And then just finally, one on portfolio transformation. You've indicated that this year is going to be a significant year. And you've indicated that you've had expressions of interest. Can you sort of give any sort of timings around that when we might be able to expect some news or anything that you can help there, please?

All right. Why don't I have a go on the U.K. resurgence and then practice the 20 different ways of saying we will update you when we have more on the processes that are in play, but I'll come back to that with one of the 20 in a moment, right? So let's deal with the U.K. first, right? So I said we're pleased. We are genuinely pleased, but in total humility, also paranoid about the improvement in our U.K. Personal Care business and how that's driving Washing & Bathing and beginning to spill into our Beauty brands, too. I would say, based on the data rather than just confidence, it is broad-based momentum. We are seeing progress across retailers and across channels. Some of that is to do with us, frankly, building stronger relationships with our retailers, the primary grocery retailers, if you think about how we're doing a better job of building mid- to long-term plans with them. A really good example would be actually where we've learned a little bit from Beauty and reapply to Washing and Bathing is as we move into Christmas this year, you're going to see Christmas gift sets, not just on Sanctuary Spa, where you would have seen them in the past, but also on our Washing and Bathing brands. I don't know how well you know Christmas planning in retailers. That's all done 12, 15 months ago, right? So a lot of the heavy lifting actually on designing all of that was done then. But now we've got stronger plans to bring us into our second quarter and then into our third quarter, which obviously starts in December. So actually, we've got rock solid reasons in terms of brand activation, along with some of the broader distribution footprint that we talked about that give us confidence that it's not just a 1-week high versus a low week last year or something. We're seeing that kind of improvement in our core channels. We're also looking to win wherever the shopper shops. And the reality is that shoppers have made choices, either in some places to down trade, hence, why Customs Creations has done very well because it's a really good fighter versus private label in the top retailers, but also to make sure we turn up in discounters and other channels such as pharmacy, where potentially in the past, we have underrealized our potential. And so we're seeing broad-based growth. And actually, that's some of the work that's also, therefore, enabling the progress we're making on particularly Sanctuary Spa, where, as I mentioned, is in double-digit growth in our first quarter. And actually, as we then look towards Charles Worthington and Fudge, these are valuable brands within our total portfolio. They operate at higher prices, higher gross margins, and as you'll have seen on Charles Worthington, it's also a place where we can experiment play with agility in terms of our innovation, hence, the launch of [ Menaplex ] range last year, something relatively distinctive in the market. Fudge, there's a bit of work to do to simplify that lineup. It had a mind-boggling number of SKUs just 18 months ago. So actually, it's a little bit more about simplify and then grow from that revised base. But we have reasons for confidence that the resurgence will continue through the year, but we are not taking it for granted. So we are fighting hard for every display, every listing, every purchase. In terms of expressions of interest, in terms of when do we think we can say more, what else can we say? We can't give a running commentary, right? What we can say is, particularly with reference to the expressions of interest in Nigeria, they reflect the recognition of the potential of the business that we've got on the ground in Nigeria. Great brands, great people, resilient, agile operations, right? And if you were to take off a U.K. plc lens potentially and put on what are the fundamentals of that business, they are really strong. So actually, without being able to give you any sense of time line, we will actively be working those processes. And as soon as we've got more to say, we will let you know.

Sorry, just one more from me. It occurs to me we haven't talked much about Australia and New Zealand today, which given that it's arguably been your best performer over the last few years. It seems a shame. So I just wondered if you could expand on your comments about the margin expansion that's been seen there, what's been driving that? And also whether -- obviously, Radiant has been a great success. I think there's been quite a lot of innovation in that business as well. Just what we might have to look forward to this coming year.

Okay. So why don't I pick that up right? Australia, New Zealand, it used to be a little bit of a yo-yo business for us 5 to 10 years ago. And I think for the last 3 to 5 years, we have seen a real return to more reliable growth. Again, we've got to be healthfully paranoid, right? So no one is taking anything for granted. But if you look at some of the fundamentals that drive that, one would be the strength of our relationships, not just with the 2 top retailers, so Coles and Woolworths have a very significant market share. But actually, also as we've seen in the U.K., shoppers going beyond their traditional grocery outlets to other opportunities to find value. So we also need to win where the shopper shops in Australia. So we're also playing with the discounters. And even -- I don't know how familiar you are with the retailer like Bunnings, I think B&Q, but we're turning up in Bunnings and being able to make sure we offer value whether you're in your local Coles or in your local Bunnings. And the combination of the strength of the retail relationships with the market positions of our top 3 brands. So Morning Fresh reported a 50% market share in the last quarter, right? We're seeing some challenges on the overall value of the category size as consumers trade down, but actually, we're growing share in that contracting category. The real standout that would be worth mentioning would be Radiant, which was the #6 brand in laundry. It is now #3. It's primarily a liquid business. And the 2 things that have really worked for Radiant. One is making sure that we can hit some fantastic price points when on promotion. So we will often be promoting at $10 and $20 on display when some of our other competitors are filling around at $21 or $22, right? So real clear telegraphic pricing on promotion. And then as you mentioned, the role of innovation. So we've introduced capsules innovation on to laundry, our laundry liquids. For those of you in the room, you'll see the highly-priced samples outside. They've come all the way from Australia, which are the big radium bottles, bright red. We have also introduced capsules, and those are enabling us to really sweeten our mix, right? So actually, innovation is playing a role, not just in interesting the consumer, providing news for the retailer, but also giving us very solid and robust gross margin improvement. That will continue this year without showing all of our hand, right? So we are confident into the underlying performance of Australia. I would flag the Australian consumer is feeling some pressure, right? It's less to do with cost of living in terms of inflation, more to do with more of them coming off fixed-term mortgages and seeing their interest rates go up. So there's a bit of pressure on the shopper, which is why we need to make sure we win wherever the shopper shops. Any other questions in the room here? No. Okay. All right. So with that, I'd like to thank you for your interest. We'd like to thank you for those who joined on the line. We'll say goodbye for those in the room. Not only is there tea and coffee, but there's also lots of samples and packs, and I will happily sell the benefits to you, ad infinitum outside. So I'll see you outside for a cup of coffee. Thank you very much.