Shaver Shop Group Limited (SSG) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Shaver Shop's Results Presentation and Investor Conference Call for the Half Year ended 31 December 2024. Please note that today's call is being recorded. There will be a presentation followed by a Q&A session. Presenting today will be Cameron Fox, Shaver Shop's CEO and Managing Director; and Larry Hamson, Shaver Shop's CFO and Company Secretary. If you wish to follow along with the slides, Shaver Shop's presentation has been lodged with the ASX and is also available from Shaver Shop's Investor Center website. I will now hand you over to Cameron Fox. Please go ahead.

[Technical Difficulty] I look forward to updating you on Shaver Shop's performance for the first half, a challenging as well as exciting period for our business. In terms of the agenda today, I'll first take you through an overview of our business and strategy. We'll then discuss the highlights from our first half. I'll then hand over to Larry, who will take you through the financial results in more detail. We'll then close with an update on our progress towards our FY '25 priorities, as well as a quick trading update. Finally, in terms of housekeeping, you'll know we have a disclaimer around forward-looking statements in the appendices to this presentation. With that, let's move to Slide 4 and our business overview. We have presented the next couple of slides previously. But given we have a very unique business model, both here in Australia and around the world, it's worth revisiting. Shaver Shop was founded back in 1986 as a men's shaver repair shop. So we started as a service business with little to no retailing activity. Over time, we've established one of the leading specialist personal care and grooming retailers across both Australia and New Zealand with 124 stores in the network. That said, we've never lost a service-orientated mindset and approach. We take pride in being the product matter experts, and we consider ourselves the leading specialty retail experts in personal care and grooming appliances in this market. We have a very passionate team, and we invest heavily in staff training imperatives. Our core business is men's grooming, where we have the broadest and deepest range of any business in Australia and New Zealand. Many of these lines are exclusive to Shaver Shop, which means we have a unique proposition for our customers. This is a core pillar to our strategy, which we'll discuss more on the next slide. We are a well-positioned financially company with net cash and no debt. We also have a $30 million debt facility at our disposable, which is currently obviously unused. Our business generates strong cash flows. And given some of our categories are less discretionary, our financial performance has proven to be very stable over time. We return a significant proportion of our net profit back to shareholders by way of fully franked dividends, and we have a highly experienced management team with an average tenure at Shaver Shop of more than 10 years. So in summary, we're a very sound business with a differentiated business model in a growing market with an experienced team that continues to push for the growth and development of our business. While growth has been more challenging in the recent macroeconomic environment, we believe there are robust medium- to long-term growth drivers that will lead to top line growth again in the future that I'll discuss on Slide 5. First, we are in a robust and growing market, particularly in men's grooming, where there is less competition and an increasing acceptance in society for men to adopt a beauty regime. Second, we drive brand loyalty and repeat purchase by investing heavily in training so that our teams are product matter experts and deliver exceptional customer service. Third, we have built a very strong and proven omnichannel capability, so that means customers can easily shop with us however they choose. Fourth, our well-established store network comprising 124 stores across Australia and New Zealand has been consistently profitable, which means we have rarely closed stores. And where we have done so, it has been to optimize profitability across the network. Fifth, our customers often share the same passion for our products we sell as we do. So we leverage our scale, 38-year experience, data and consumer insights about the sector to drive profitability. Finally, in terms of business fundamentals, we have a strong balance sheet. We generate robust operating cash flow and a proven profitability, which allows us to support ongoing investment in the business, as well as paying a strong dividend to shareholders. On top of these strong business fundamentals, we have strategic priorities to drive incremental growth. The first is strategic category management, which is designed to extend our category leadership through range differentiation like exclusive access to products and brands, ensuring we have the broadest and deepest offering in our core categories and ensuring we minimize any gaps in our range. We'll speak to this in more detail across this presentation, as our new Transform-U private brand is proving to be a core part of this initiative. The second key growth pillar is range expansion, which means we are looking at opportunities to expand into adjacent categories or innovative products and brands that have strong growth opportunities for Shaver Shop. Third, with the amount of activity in sourcing new and differentiated products, we continue to evolve our store design so that we can merchandise products adequately and continue delivering our customers an engaging and enjoyable shopping experience. This is likely to lead to an increase in our average store size over time. As you'll see in subsequent slides, we have been very active in driving these strategic initiatives forward over the last 6 months, which is really exciting for the business. So that now takes us to our first half highlights on Slide 7. I should just draw out a slight typo on this slide. The slide actually references our gross profit margin for the first half at 44.5%. It is, of course, 45.5% as per the ASX announcement that we issued supporting this presentation document. So on to this slide. Total sales were approximately $126 million in the first half, down 1.0% on the prior comparative period. In-store sales were relatively flat. And pleasingly, we were able to offset the lower shopping center customer foot traffic with higher sales conversion in our stores and increased transaction values. Online sales proved more challenging with sales down 5.1%. Similar to in-store, we saw lower traffic to our websites, but we were not able to offset this like we did in store. One of the true highlights of our financial results is once again our gross profit margin, which I alluded to at the start of this slide, which was up 110 basis points versus last year. Despite the ongoing inflationary pressures, costs were well controlled, up 2.1%, leading to NPAT dropping 3.5% to $12 million. Net cash of $24.5 million reflects the normal seasonal high for the business and was supported by operating cash flow of $28.1 million for the first half. All of these factors have given the Board the confidence to increase our interim dividend payout to $0.048 per share, fully franked, up $0.01. Now moving on to our operational highlights on Slide 8, our service metrics continue to be very strong. Our average NPS for the first half was almost 89. Sales conversion averaged 46.0%, which was up on last year. And as I mentioned earlier, our average transaction values increased overall, which was entirely driven by our in-store activity. Outside foot traffic was down approximately 8% on average across the shopping centers that we operate in, continuing the decline that we saw last year. In terms of online, we saw 23.4% of our sales come from this channel. Pleasingly, we were able to increase the percentage of customers choosing Click and Collect to more than 15.5% of all online orders in the first half. This is strategically important for us given it provides us with another opportunity to delight our customers and educate them on the products that they have purchased or offer them new products when they come into the store. So let's move on to Slide 9 now and discuss what we believe is one of the most exciting developments for Shaver Shop in a number of years. As announced in August, we launched our first private brand, Transform-U in the first half. We ranged some accessories in our stores in July and August and received the first shipment of our clipper, trimmer and grooming appliances in late October and early November. As mentioned before, these have gone through extensive sourcing, quality analysis and testing by our internal team before we decided to import the initial range. Now we were quietly confident that the launch would prove successful, and I'm very pleased to advise that sell-through well and truly exceeded our expectations on almost all models that we promoted over the Black Friday, Christmas and Boxing Day trading periods. The Transform-U brand represented more than 10% of category share in our hair cutting category. Now this is our largest category in terms of dollar value. Over the November and December period, it represented more than 4% of total company sales over the same period. Within this, our trimmer range had 80% sell-through by the end of the half, requiring us to place top-up orders with suppliers well before Christmas to minimize potential out-of-stock risk in the second half. Now as you'll see in Larry's section of the presentation, as we continue to execute our strategic category management initiatives, either through securing exclusive distribution relationships like Skull Shaver, Epilady and Silk'n or by expanding Transform-U, this will have an impact on our working capital requirements given our terms of trade are very different with these lines. In contrast to local distributors, where we often receive extended trading terms of 60 and up to 90 days for the distributor relationships, we need to pay for all the stock before it hits our shelves for sale. So as we continue to evolve and build this aspect of our business, it will require additional working capital, as you will see in our first half financial results. Now back to Transform-U. All of the sell-through across November and December effectively came from our stores as we did not actively promote the launch online through social or other channels. So we believe there is further upside for growth, as we develop our digital branding strategy. In summary, we are extremely encouraged by the potential of Transform-U, and we look forward to extending the range, where there are gaps that are not being filled by our global supplier partners. As mentioned in our FY '24 results presentation, our global supplier partners will always represent the vast majority of our sales and focus. However, we are very pleased to be able to develop and bring to market products that offer great value to our customers that are not currently being offered through our current supplier relationships. So moving on to Slide 10 and our sales and gross margin trends over the past 6 years or so. While sales have been relatively flat over the past 3 to 4 years, you can see that our sales remain well above pre-COVID levels. In addition, over the same period, we have been able to significantly increase our gross profit margins, now up 420 basis points from the first half of 2020, meaning that while our top line has been flat, we have been able to drive significant gross profit dollar growth and in turn, after increased costs, retain a significant proportion of this increase, as net profit for the business. While sales have increased 17% compared to the first half of FY '20, gross profit dollars over the same period have increased almost 30%. The 110 basis point increase in margin compared to this time last year was due to 3 primary factors. First, and consistent with recent years, we have been focusing on balancing sales growth with maximizing gross profit dollar contribution. In some cases, this meant we didn't seek to price match competitors on trade-wide models in highly competitive categories like hair styling over Black Friday and Boxing Day promotional periods. This meant the gross profit margins were higher across most of our categories in the first half. Secondly, we saw category mix change towards higher-margin categories like hair cutting and away from power oral care and long-term hair removal solutions, which tend to have lower gross profit margins. And finally, we saw strong performances across our Skull Shaver and Transform-U exclusive brands in the first half. So despite the slight drop in sales in the first half, the higher margin led to gross profit dollars growing 1.4%. Let's now review our operational metrics for the first half on Slide 11. Our customer service metrics remain at or near all-time highs, reflecting our team's passion in servicing our customers. NPS has remained consistently around 88 or 99 out of 100 over the last 5 years. In terms of in-store sales conversion, which is the number of people that purchase from Shaver Shop compared to the number of shoppers that enter our store, 46% of the shoppers that came into our stores ultimately made a purchase during that visit. Other than the COVID-19 impacted period in the first half of FY '21 and FY '23, this is the highest level recorded for the business since we started monitoring this very important metric. So in terms of what we control, our first half performance was one of the strongest in many, many years. Our promotional calendar was very well planned with many compelling value-orientated offers for customers that we work closely with suppliers to secure. Now we had good stock distribution across the network with minimal out of stocks and our store teams executed well on the shop floor, evidenced by the operational metrics we just discussed. And lastly, we launched Transform-U, which well and truly exceeded expectations across both November and December. Unfortunately, and a bit frustratingly, this did not translate to top line sales growth, but we did well to mitigate this through increased gross profit margin and controlled expenditure. I'll now hand you to -- across to Larry for a more in-depth discussion on our financial results.

Thanks, Cameron. I'm now on Slide 13, which summarizes our profit and loss statement for the first half. As Cameron mentioned earlier, total sales were down 1.0% or $1.2 million to $125.8 million. In-store sales were relatively flat despite shopping center foot traffic dropping around 8% or so. Online sales were down 5.1% and represented around 23.4% of total sales. Same-store sales or like-for-like sales were down 1.4%, which is slightly lower than total sales and reflects the fact that we opened 3 new stores in the first half of the year, which contributed to total sales and not like-for-like sales. Cameron has already gone into detail around our gross profit margin performance and the reason for the significant increase in the first half of FY '25. It goes without saying that this is one of the real bright spots in our results and reflects the ongoing efforts we've had to maximize gross profit dollars, which were up 1.4%. The increase in gross profit dollars was able to be largely offset -- was able to largely offset the increase in our cost of doing business, which were up 2.4%. Upward pressure on employment costs, largely driven by the minimum wage award increase of 3.75% was the biggest driver of this increase with operational costs and corporate overheads also increasing marginally versus last year. We remain focused on minimizing the inflationary cost impacts across the business that we're feeling and are pleased that our operating expenses have once again grown proportionally less than CPI. In terms of depreciation and interest, you'll see these have both increased compared to last year. The primary driver of this is the effect of lease renewals. This time last year, we had a significant number of leases in holdover, particularly with the major national landlords. We have now renewed the vast majority of those leases, which has resulted in lease interest, in particular, being higher than it was last year. The other factor impacting interest expense is the lower levels of cash held within the business, as we become the distributor for brands like Skull Shaver, Silk'n, Epilady and now distributing Transform-U. These suppliers, together with our Transform-U manufacturers require upfront payment for stock before it hits our stores. So our working capital investment has also increased accordingly. This should normalize over time because there is a bit of a one-off impact as we fill the pipeline for the first time. But as we look to continue to grow the brands, it may continue to impact working capital somewhat. Net profit after tax was $12 million, down 3.5% or around $400,000 in total, leading to basic earnings per share of $0.093 and cash EPS of $0.096. Our balance sheet on Slide 14 remains robust. We had net cash of $24.5 million at the 31st of December '24, which reflects the seasonal high for the business given we get extended trading terms leading into Christmas from our local distributors. Stock levels increased $6.7 million compared to the prior comparative period, which largely reflects the increased investment to support our distributor and private brands, and I'll speak to more of the increase in stock on the next slide. While stock value increased $6.7 million, this has not been reflected in trade payables. This points to what Cameron and I mentioned earlier in terms of how our new distributor relationship and private brand will impact our cash, inventory and payables balances going forward. The impact of a high number of lease renewals in the first half is also clearly evident in our balance sheet, where right-of-use assets have almost doubled to $27.3 million and lease liabilities are up $12.5 million versus the prior comparative period to $30.8 million. We still have around 10 to 15 leases in holdover currently, less than half the level though that we had this time last year. Finally, on this slide, net assets have increased $2.1 million to $92.5 million. Slide 15 highlights the key drivers of our stock increase. The increase in stock is largely as we expected and primarily driven by 4 core factors. The first is our investment in Transform-U stock and our exclusive distribution brands. This represents approximately 1/3 of the increase and is more of a one-off, as I said before, as we fill the pipeline of stock required for these brands across our network. The second is due to both category creep and broadening our range in complementary categories like fragrance and female beauty, as well as broadening the brands that we offer in core categories. Third, we had 2 more stores in the network compared to the 31st of December last year. And finally, the last component is due to slightly lower sales than what we expected across November and December, and that's reflected on the last bar in the graph. We have no concerns around our ability to sell the stock across the second half and expect the investment in stock across Transform-U, Skull Shaver and our exclusive distribution brands, as well as bolstering stock across the rest of the business will drive gross profit dollar growth in the second half of FY '25 and into next financial year. We'd also like to be clear that we do expect stock levels to end fiscal year 2025 higher than 30 June last year. We had already flagged this in our FY '24 results presentation in August, but it warrants repeating. We expect our stock levels at 30 June '25 to be around $3 million to $5 million higher than the same time last year, primarily due to 2 factors. The first being an additional $2 million to $3 million in stock related to Transform-U and the other distributor relationships that I've spoken about previously. And then the second component is an additional $1 million to $2 million that's required to get inventory back to targeted levels, given we experienced strong end of financial year sales last year, leading to lower than ideal stock levels at 30 June. Now on to our cash flow on Slide 16, which shows that our operating cash flow was $28.1 million for the first half. You may recall from our FY '24 results presentation, our 30 June '24 cash balance benefited from the fact that one of our major suppliers had trading terms that extended into the first week in July, which effectively meant our 30 June '24 cash balance was about $3.8 million higher than what it normally would have been. So if we adjust for this anomaly, our normalized operating cash flow would actually be $31.9 million or $3.8 million higher than our actual result and more in line with last year. The other reason for operating cash flow being lower than last year is due to the higher stock levels previously mentioned. Moving on to investing cash flows. During the first half, we are very active with 3 new store builds as well as store refits and relocations. This led to $2.3 million in CapEx over the first half. Financing outflows were consistent in H1 FY '25 compared to the prior corresponding period, with both dividends and principal amounts of lease payments being $6.9 million and $7.7 million, respectively, leading to net cash flow of $11.2 million. Moving to Slide 17. As Cameron mentioned, the Board declared a $0.048 fully franked interim dividend earlier today, which reflects the ongoing confidence that they have in the business. Our dividend policy reflects -- remains to pay out 60% to 80% of cash net profit each year. Our balance sheet remains conservatively geared, and we see very good opportunities to create incremental returns and value for shareholders through investments in building the Transform-U private brand, as well as seeking further accretive opportunities like the Skull Shaver exclusive license agreement that we signed back in June of 2024. And that now concludes my section of the presentation, so I'll hand you back to Cameron.

Thank you, Larry. Let's move to Slide 19 and a review of the progress we've made since August in executing against our 2025 priorities. Firstly, the Transform-U you launch has gone as well as we could have hoped with strong sell-through, positive customer feedback, high margins and low customer returns. This has given us the confidence to further invest in this area. Skull Shaver sales continue to resonate with customers and was our top-selling hair clipper brand in the first half. In terms of category and range expansion, we launched the Epilady, Silk'n and KENZZI long-term hair removal brands, the Meridian range of body groomers and also range Jericho men's wet shaving lines. This took significant resource and effort to train our teams, and I'm pleased to say that our internal learning and education program has gone from strength to strength with the most content that we've ever created in a 6-month period. It is also of outstanding quality, which is also useful when we explain to new and existing suppliers how Shaver Shop is differentiated to that of our competitors. Moving to Slide 20. Larry spoke to the activity in optimizing our store portfolio with a significant number of relocations, fit-outs and new stores. This is an ongoing process that we expect will optimize store network profitability over time. We are also progressing our thoughts around the larger store format, coupled with a step change in category creep. One of the areas we still need to improve is our social media presence and penetration. We are continuing to invest in and develop in this area as we understand how crucial it is for connecting with customers and building our brand equity in today's environment, particularly with the younger generations. Finally, we realized that customers would be very value-driven and price conscious given the cost of living remains very high priority for households. We executed very well over Black Friday, Christmas and Boxing Day to maximize returns from these events. We're seeing a structural shift with Black Friday being [Technical Difficulty]

[Technical Difficulty]

Apologies for everyone for that. We're just -- we think we dropped out just on the trading update slide. So Cameron is just going to take you back through the trading update slide now.

Yes. Look, we'll go through that again. It is a pretty solid trading update. So yes, let's do it again. The trends that we saw across the first half have not materially changed. Foot traffic at shopping centers is still lower than last year, but has been more in the low single digits rather than the 8% average drop we saw in the first half. We continue to execute well in store with sales conversion and basket size offsetting the decline in foot traffic. Gross profit margins also continue to be well above last year. Total sales between 1st of January and 20th of February are up 0.3% compared to the same period last year, with in-store sales up 0.2% and online up 0.5%. Like-for-like sales were up 0.7%. In the second half, we will continue progressing the key initiatives and priorities that I mentioned earlier with a focus on expanding the Transform-U range, looking for new global brands that we can exclusively distribute in Australia, as well as optimizing our store portfolio through refits, relocations and selected store closures. I'm also pleased that the Chadstone redevelopment is on track to be completed in late March, as operating 2 stores in this center has not been optimal for our business, neither operationally nor financially. So overall, a very solid first half for the business. We remain focused on returning the business to top line sales growth and have a number of initiatives underway that we're quite excited about and believe will underpin the business performance over the next 6 months and well into the future beyond that. So that concludes the formal part of the presentation. I'd now like to hand it over to the moderator to take questions and apologies given for the earlier dropout.

[Operator Instructions] Your first question comes from Andrew Johnston from MST Access.

A couple of questions. So first of all, congratulations on the awesome launch of Transform-U. You sound pretty excited about it and clearly well above -- well, at least above expectations from your perspective. So that's great to see. So if I can -- I've got 3 questions, but if I can start first with the Transform-U rollout. I mean, if you -- and I'm guessing that you've picked the low-hanging fruit. In other words, you picked the products, where you think the biggest opportunity is. But if you were to look at where the potential for Transform-U could go over the next couple of years, what percentage are you through the rollout of possible Transform-U products?

Well, it's probably a bit early to go into the detail because we're really only 2 or 3 months into the launch so far, Andrew. But clearly, given we've had this initial success, we think there's good opportunity to bring additional products in hopefully, before the end of the first half of the calendar year, but definitely into the second half of the calendar year, we'd be looking to expand the range with some additional product lines. But yes, it's probably a bit too early to go into any of the specifics in terms of targets for sales or targets for a number of products, what share this could be of the overall business. It's just -- it's really early days for us, and we're really excited. It's good news for the business, but we're still planning it out basically.

Okay. Moving on to Skull Shaver, and there were some numbers that were released around the time you did the Skull Shaver deal. It sounds like things are going pretty well, but are you on track with meeting those numbers for the Skull Shaver deal?

Yes, absolutely. I mean we've highlighted in the presentation that Skull Shaver sales continue to grow and have driven good profit. One of the reasons why our gross profit margins are up so significantly is due to that increment that we got on the Skull Shaver margins. And so, if you look at the increase in the first half across the gross profit margins, up 110 basis points versus last year, it's basically split evenly around 1/3, 1/3, 1/3. 1/3 is Transform-U and the launch of Transform-U in November and December. 1/3 is Skull Shaver and the contribution of that over the first half with the incremental benefit we got on the increased gross profit margin after signing the deal. And the last 1/3 is the ongoing continuing contribution from effectively trying to maximize gross profit dollars and drive gross margin growth, which has, as Cameron mentioned, resulted in most categories in the first half increasing margin over the same period last year.

And have you got any other trends -- sorry, have you got any other Skull Shaver type deals in the pipeline?

We're looking at a number of things, but there's nothing that's near completion at this point, Andrew. They tend to take a little while to execute.

Yes. Well, I'm sure they do. It was a pretty good deal and it's delivering the results. And sorry, just lastly on the trading update, if I can just squeeze in one more question. In this trading update, online sales appear to be performing much better than where they've been with growth of plus 0.5% against a drop of -- so I can't remember the number, but I think it dropped in the sales were down, were they in online?

Yes, down 5.1% in the first half, yes.

Yes. So that looks like a pretty good recovery, right?

Yes. I think it's pretty solid, Andrew. We've done a couple of initiatives in early January. So we've basically launched a lot more YouTube content, which is driving some organic growth, which is good to see. And then I also think, obviously, November and December, it's a real balance because it's very competitive and you need to watch your paid search in terms of your cost of acquisition. And sometimes that's one of those challenges that we spoke about is you can drive top line revenue growth. But if your ROAS is very poor and you're really not making incremental profit, sometimes you have to lose that war in the short term.

[Operator Instructions] Your next question comes from James Casey from Ord Minnett.

Just a question on the outlook and the trading update. Some of the other retailers have reported some improvement in sales, particularly for the month of February with January not so strong. How have you seen it in terms of foot traffic outside of your stores year-to-date in the second half?

Yes. So in the second half year-to-date, it's low single-digit declines, which compares to the minus sort of 8% decline on average that we saw in the first half. So there definitely does seem to be an improvement in terms of traffic in the centers from what our centers are telling us that are in our stores.

And with the interest rate cut and improved consumer sentiment, would you expect to see some improvement as the half progresses and your new initiatives, of course?

Yes, we'd be hopeful. I think we're probably banking more on the controllables, things within our control, the Transform-U strategy, the Skull Shaver, the category creep opportunities and some NPD, which is coming through. But yes, obviously, if the macro environment improves, hopefully, that transcends into improved customer foot traffic and higher in-store sales.

Your next question comes from Bruce McLeary from Burrell Stockbroking.

Just a couple of questions. I understand that the hesitation in telling us what other products might come from the Transform-U line. But taking it a different way, the initial launch, was that across all of your stores? Or have you cherry picked the stores to roll that out initially? And so there might be growth once you roll it out across your store network?

No. The products we did launch, Bruce, were across all of our stores. But I think the key thing to stress is there was a very limited number of products that we did launch. And on top of that, we really did nothing from a digital e-commerce point of view. So that's why we feel really confident or positive about the future of Transform-U because there's still a significant amount of low-hanging fruit opportunities that we see that we can execute over the next 12 months and beyond as well as getting that digital piece right as well.

Okay. And just a second call -- second question. Your marketing and advertising expenditure basically has stayed flat over the last couple of periods compared to previous periods. We've heard from other retailers during this reporting season that promotion has been elevated and aggressive in some businesses, but others haven't had to promote as heavily. What's your view on the promotional activity in the market at the moment?

Yes. I think, well, I sort of see it 2 different levels personally. On the one hand, when you've got exclusive products like Skull Shaver and now Transform-U and we've got Epilady, where you've got a point of difference and exclusivity, I think you've really got to communicate them because it obviously alleviates some of the risk on price. But where they're trade-wide models and particularly some categories like hair styling and beauty, certainly from what I saw, it was as aggressive as ever I've seen it. And that's sometimes where I referenced previously that paid search equation, you have to be very careful because your cost of clicks is increasing in some categories and therefore, your returns through paid activity through online conversion is actually diminishing. So you have to get that balance right. I think the key for us is leveraging our exclusive lines, still fighting the fight of trade-wide models, but where it becomes a bidding war and it's clearly not driving incremental profit, you've got to have the acumen and comfort to pull out of that race.

There are no further questions at this time. I'll now hand back to Mr. Fox for closing remarks.

Thank you. So just to conclude today, a couple of key points on Shaver Shop. We are a segment leader, both online and offline. We're in a large and growing market driven by changing consumer preferences and new product innovation. Product range is applicable to almost all demographics. We're a differentiated and resilient specialty retail business. We pride ourselves on service excellence and unparalleled product knowledge, product exclusivity remains critical, and we're competitive value-based pricing on those trade-wide models that we've referenced throughout today's presentation. We have potential to further increase market share. We have high brand awareness in Australia and New Zealand is growing off a lower base. We have a proven and highly profitable omnichannel retail model. We've got a clean balance sheet with no debt, with high cash conversion, experienced management team. We're focused on investing for growth and improving total shareholder returns and of course, an attractive dividend payout, which is fully franked as well. So thank you for everyone's support and attention today, and we wish you all the best.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.