Stealth Group Holdings Ltd (SGI) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to the 2024 full year results and briefing presentation for Stealth Group Holdings. Today is 5th of September, 2024. As an Australian distribution company we're obviously quite excited to explain and uncover our business during the course of today. Organizing a couple of technical things, I think we're right to go, yes, very good, okay. Work my way through this. There we go. So as a Stealth Group we are celebrating our 10 years since our foundation. So we've achieved a lot from the startup company and today with an underlying revenue of $159 million of sales as an Australian public listed company. We're a large company. We distribute a whole host of leading brands that are known not only for quality, but we've evolved our business today for products that are really made for everybody and that they're used every day. And the beauty about that is 90% of the products that we do sell are nondiscretionary items, and because of that obviously we have resilience in markets that we sell to. So we're many things to many customers. We operate as a distributor, as a wholesaler, and also as a retailer. Our main, I guess, 5 categories of products that we sell are industrial, safety, automotive, workplace consumables, as well as a new product mix of consumer technology brands. And all those products are sold pretty much to the same customer segments in businesses or commercial space, some call that enterprise, from trade professionals as well as retail consumers. So our vision is to be Australia's market-leading alternative to the majors. And I guess our strategy is pretty simple in that if we can deliver on price range and also with the experience that we have with excellent service that supports it, what's being tried and tested is improving market share or grabbing market share. So the taglines that have evolved to our business today really about we provide products and solutions, they're made for everyone and they're used every day. As we go through today's sort of presentation, let me just give you an opening or reintroduction in terms of the items that we'll cover. So firstly, we'll cover the FY '24 results and the highlights, the evolution of the organization, our progress on strategy. I guess it would be remiss of us not to cover the current market challenges and how we're combating that, but also our operational and financial achievements, but also, most importantly, what's on the horizon as we head into 2025 and beyond. So if I can just reflect in terms of comments about FY '24. So importantly, a couple of things. The results reflect really good execution from what I would call a high quality business today, and not only our master group, but also the supporting brands that operate within there. We've been really consistent with our strategic agenda for the last 5 years. We've continued to grow market share, and we've differentiated ourselves in the market. And I guess we can further confirm that through the recent acquisition that we made of Force Technology International in June 2024. The resilience of our offer has really been successful behind our performance. And as I mentioned earlier, 90% of the products that we sell are nondiscretionary, and that allows us to maintain fairly consistent margins. We've evolved ourselves really with what I would call market-leading credentials today. It's resonating with customers. We are continuing to drive growth. But I guess most importantly, like any good business, after making 8 acquisitions, which we have over the last 5 or 6 years, is making sure that we integrate those well, our productivity, our reduced operating cost, in ensuring that we're maintaining those synergies that we identified. And all that obviously drops to the bottom line. Data and digital and also automation has been a key initiative of ours over the course of the last or particularly last 4 years, but in the last 12 months has been really critical, and that's definitely receiving benefits not only in '24 but also and beyond. So the efficiency and the productivity and those elements are definitely from those investments improving. And the performance of Force Technology, which was recently acquired, as I mentioned, is performing well after the first 9 weeks of the year. So as we look forward in terms of 2025 and beyond, we are looking to grow our addressable markets. We're looking to win in product, but also new services. We're looking to win in the customer experience, as well as growing in commercial business with trade professionals and also into the retail sector. Data, digital and automation is still really important to ensuring that we bring efficiency, productivity, lower our operating costs as a percentage of sales. So that's something that we'll continue to invest in and renew our portfolio, in terms of ensuring that those things that I just mentioned, but also the depth and breadth of the products that we have and the channels that we deliver in, obviously maintained quite strong. The industrial divisions continues to benefit from the diversity of the product range and the breadth of customers and the channels in which it sells in resilient end-markets. We expect above market sales growth, but also profit growth in the consumer goods division of our business, short to medium term. Our approach to this is really positive. And we're confident about our outlook. In the first 8 weeks of FY '25 the demand continued to be reasonably strong, and we got a really good, strong growth pipeline, which we will cover shortly. But we expect significant earnings growth in FY '25 and beyond, with an increase in our revenue base underlying to $159 million, up from $114 million in FY '24. So our focus on the range of products that we have, the price points is really critical, obviously, to the end consumer, based on the current inflationary environment, as well as interest rates and then the economic data that's coming out. So we're making sure that our products are still driving that demand, and obviously sitting in front of customers as the company of choice. So our share price, which has moved very nicely, is pleasing, I'm sure, for all shareholders, it's $0.30, not that I've looked this morning, but hopefully sitting at the level it was yesterday with the market cap of $34.6 million. So we have 115 million shares on offer within our business. And as I said earlier, we've got $114 million of FY '24 revenue, $159 million in FY '25 with the target of $300 million within the next 3 years and an 8% EBITDA. And that 8% EBITDA is easily achieved based on the strategies that we have moving forward. So pleasingly, obviously when we get recognized with a higher market cap, not only in the market with all our financial institutions that support us, but also in the broader market, the opportunity to be seen as an investment of choice is progressing. And we have an increase of almost 80% of shareholders on the number of shareholders over the course of the last 12 months, which is also pleasing in terms of we evolving, being known not only for our customers, but also in general stakeholder base. So if I can cover FY '24. We talk about the 10 years as a proud history, but also we have a really positive future. We've grown in one from the -- one of the largest distributors now of the products that I've mentioned earlier in industrial safety, workplace, and also in the consumer tech products and other related services. So our strategy is really in twofold. We have an industrials division, we also have a consumer goods division, and they serve customers that are relevant within not only their sectors but there's the ability to sell on both sides of the ledger by taking that proposition to different customer types. At glance, we have 254 employees today, 53 industrial branch and store locations across Australia, 3,300-odd retail outlets that sell our consumer brands within their stores, and we have approximately 200,000 products that are seen within our distributions and as with our own stores today. We've really looked to rationalize the number of products that we have, not only in our inventory, but also improving our supply chain and keeping our cost of inventory down and our working capital working more efficiently for us, which you'll see within the numbers that we'll present shortly. Our business today has really evolved, I guess, in its most simplistic forms. We're a house of brands in the 5 key product groups or categories I mentioned earlier, 1 business with 2 divisions, with industrials and consumer tech. We have multiple channels to market. And that's supported by quite a large infrastructure that we have across our portfolio, which I've just shown you, with a footprint of stores, also our sales team online, as well as fulfillment capability that is across Australia. We cater for all customer types, businesses, trade professionals, retail consumers. We also have independent operators that have their own stores that we support as part of our portfolio to bring buying power and leverage for them and also scale an opportunity for our network to take more products to market. In FY '24, our achievements. It was the most profitable year in the company history with $0.68 increase in share price. That's obviously significantly more today. 10 years of revenue growth in terms of year-on-year revenue growth. We've really differentiated ourselves and strengthened our business through not only diversification but also the product mix, the customer mix, and also the channels in which we're now distributing through. We have announced a maiden fully franked dividend payment, which the dividend reinvestment plan, which is supporting that is getting released to market today, that is at a 4% yield, 0.0084 of a $0.01 dividend. It's something that we're really proud of doing after listing in late 2018 and a history of our business. So we believe that not only that is an opportunity payback to shareholders for their support over that period of time, but also from an investment perspective we're obviously seen as a business that does provide dividends and an attractive investment in comparison to a number of our peers. Our yield payment is significantly more than a number of our peers, and we've deliberately done that on twofold. One, we've improved our cash position and our working capital position. Two, we want to make sure that we're a investment of choice. So that dividend yield is very strategic and deliberate, and we expect that we'll continue with that. From a inflationary perspective, clearly everybody is being impacted by rising interest rates and also as well as the movement in market demand. We're resilient, and we're getting a number of opportunities in the mining, infrastructure, transportation sector that's maintaining really strong retail in itself, is obviously people are looking to spend more wisely, and we're still maintaining our share of wallet in that space predominantly only because of growth, and I see that that's our biggest opportunity, but we're also managing that really, really closely. So what's coming into 2025? We will outperform our 2024 year. Therefore you can expect higher revenue, higher profits within our business. And clearly that's a key driver for us, is our profitability. Our business has really grown on revenue, getting our infrastructure in place, ensuring that we have capability and scale to compete with the larger players in the market. We've now done that. And our house of brands strategy moving forward is something significant. So we will represent brands that are leading, that are trustworthy, that are known to market, and will continue in that approach. We do, with the acquisition of Force Technology now have our own private label range that is called EFM, which you will see in company, in stores like JB Hi-Fi and Officeworks. We sell across 7-Eleven, BIG W, a whole range of different telco as well as independent operators. And in that convenience sector. We're coming out with the new product range with the brand is Delco that is price positioned well, it's for the convenience market, and we expect quite a large uptake in market share for that. So there's a number of exciting new private label products, clearly that will expand into our industrials area and give us the opportunity to be able to have our private label range where it makes sense. So a good, better, best product offering is how we're moving forward. We see that our gross margins that are sitting at 29.6% for the last 12 months and hovering between 29% and 30% for the last 3 years will now moving to a bracket of 30% to 36% of gross profit contribution, and that is a mix of our own private label product which generates a higher margin. Our bespoke brands, which we will provide for certain customers, as well as getting leverage from a number of our leading brands that we're looking to evolve from a strategic growth perspective. We are launching our new rewards program whilst a number of loyalty rewards programs sit out in the market. We are targeting first our independent members that sit with us to help not only reward them, but support them in terms of how they feed that through to their customers. It will follow very quickly on the back of that to all our business and trade professionals. It will be absolutely a leading loyalty reward system that will be able to provide real, tangible benefits for a number of different stakeholders, and we're doing that to be able to grow not only our customer base but obviously repeat business at that small end of town. Hire services is something that we are moving into, which I've mentioned previously, and the technology piece of that is almost built and ready to go. In simple terms, if you look at the products that Coates and Kennards offer in the tools and the equipment space at the low end of the scale with a product price of less than $5,000, that's our market penetration. So similar business model there. With our private label product. If I can also just go back and mention that, if you've looked at the success that Kmart has had with this Anko business unit, that is the product business model similar that we're going to be following in that private label space. So to give you examples of what is tried and tested in the market, we've analyzed who does it best, and we've followed similar business model, but obviously tailored accordingly for our business and our size. We are investing in our stores. There's a number of programs that are currently underway by improving the customer experience and also attracting more people to those stores. And we've got a number of organic and inorganic growth strategies. So organic growth is obviously very key part of our ongoing process, but strategic opportunities in terms of the acquisition space is something that we always consider. We've made sure that we've maintained our valuation EV over EBITDA of about 3 to 4x multiple. We've done that recently with the most completed transaction with Force Technology. And in doing that obviously that creates value for not only our existing shareholders, but also for the exiting shareholders, and in that case, all shareholders that have sold their business to them, are shareholders of our company today. So we've been able to have some very good, meaningful transactions that have sat within our business and ongoing support. So we're really well positioned as the alternative going forward to the majors. So if I can just cover the numbers quickly for FY '24 and everybody would have obviously read this -- excuse me -- on our announcement last week. So if I can just go to a couple of areas here. First of all, our growth at 2.4% of revenue. We have always grown double digits. We expect to obviously maintain that going forward. We closed a number of operations, stores and also customer stores, which reduced our revenue by just short of $11 million on an annual basis. If you did it like-for-like, we would be ahead in double digits. The reason why we closed those stores, we've acquired those operations during the course of certain acquisitions based on whether it would be economic factors or whether we felt that the customer profile had changed, those stores don't fit in our longer-term strategy. So we've consolidated a number of those operations in different locations, or we'd simply close those operations because it's not providing us with a reasonable return on our investment satisfactory. So we're not shy to grow. We're also not shy to renew our portfolio to ensure that we're getting the best return for our investment. Our EBITDA growth was up 15.5%, and net profit is up 48% before tax and 50% to members from a net profit perspective. So that's a really pleasing result. And whilst the actual dollar amount isn't significant in the scheme of things, if I look at where we're heading next year, it'll continue to grow, and we've continued to grow now for -- from a profitability perspective from last 5 years. So every year we've continued to grow, EVERY year we've continued to invest, and every year we've delivered on the results that we said. If we look at our peers without naming them, there's some companies that are getting significantly less than us, so they doubled the revenue and tripled the revenue, yet their profitability in terms of dollar for dollar is about the same number. Those businesses are valued in excess of $1.30 per share, and our business is valued at $0.30 a share. So if you're generating $350 million and you're making less than $2 million, if you're generating $553 million and you're generating less than $1.8 million, and in another case $0.7 million on $274 million worth of revenue, those companies in itself, obviously we're holding well, and we should be a far better choice from an investment perspective, but also from our company market share perspective we're obviously growing well. Our cash holding is up to a record level. Our fixed debt facility reduced by half. And we've just recently paid that off. So our fixed debt facility we took on in FY '21 when we acquired our C&L tools business. We've completed 3 acquisitions since then. And our facility has been a combination of working capital, excuse me, as well as a fixed debt. So importantly, we paid off our fixed debt facility. That's a significant milestone. So all our debt that sits within our facilities today is working capital related, backed by $23 million worth of inventory. So our overall net debt, if I just remove the Force Technology business and its acquisition that we completed in June, we reduced by 33% down to $4.9 million from $7.2 million. And prior to that, it was around about $10 million. So we've continued year-on-year to reduce our debt. And that's obviously important as we move forward. Key things for 2025 and beyond, we have won a number of tenders recently, and recently being in the last 3 months that contracts will start in the FY '25 period for over a 2-year term to the value of $29 million over that 2-year period. So that's really again another key milestone for our business. And it's something that we continue to, as our capability expands, we continue to obviously be invited to different tenders, and we're winning those. The opportunity through the retailer stores, reseller retail stores of 3,300-odd is something that we're going to penetrate a lot more. So we're putting new products within those stores. We're expanding our ranges in that store -- within those stores. And there's a number of new stores we're looking to put our products in over the course of the next 12 months, around about 1,000. So we expect to be north of 4,200, 4,300 stores within 12 months' time. And our growth pipeline through FY '28, which is where our strategy is being updated to is $140-odd million worth of new business. And that will come out of the work that I've already mentioned with contracts, but will also be driven by organic growth as well as inorganic growth. And that's what we know today. So that may change over the course of the next 3 years as opportunities present itself, as the economic climate obviously evolves, as our own business produces opportunity and capability in different areas that could alter itself more positively than anything else. So I won't go through this in detail, but this is ultimately a checklist that we provided within the investor update FY '24 results. But if I can just cover a couple of areas. So from an operational execution perspective, the way that we've been able to digitally transform ourselves from a customer experience is significantly better. So one of those platforms that we put in place allows us to provide automatic responses to our customers once they provide an ordering to our system. The ability to be able to manage order flow within our customer service team to allow them to be more effective in terms of order management, but also responding to customer types of all different types and sizes but making sure that our promises are kept and we're delivering on time and in full. So really, it's about the support and the management of the supply chain. One of the key things that we've also done over the last 12 months, driven by our HR team is through talent management and also healthy people, healthy workplace. So we've introduced wellness programs by providing all our employees support externally through professional advisers, should they need it, to navigate their way through not only the work environment and their own -- but also from a personal perspective, particularly that can provide financial support, legal support, as well as general guidance, personal health and putting programs in place for wellness, not only for the individual but their extended family. And we found that a number of our employees have taken up those programs. So we're going to continue to focus in that area. Financially, obviously we've covered a really strong year, and we've delivered shareholder value, and we're producing dividends. But one of the things that we're obviously making sure that we are focused on is our cost management and delivering lower cost to serve that not only can we pass on to our customers, but we can also, from a company point of view, be more efficient to deliver higher profits. Our progress on strategy has really been not only about growth but rightsizing, managing and merging in the acquisitions that we've made in the past, and we've obviously just completed a new one in June 24. So we will follow the same pathway that we have always done with acquisitions, and that is understanding the business before we make any major changes, but investing in that business to take it forward with growth. So there's a lot of innovation and opportunities within the tech accessories space. It's one of the largest growing markets in the world and continues to grow over the course of the next 2 weeks. There is an iPhone 16 Apple launch. We have a significant program behind that with the accessories we sell. We've already got 3 quarters of our orders presold. So we're expecting a super cycle as they go through in October and November. From a sustainability point of view, if I can talk about Investor Relations, we have continued to maintain transparent and consistent communication. We're going to do more of that. And there's some programs that we'll be announcing shortly that will underpin that. We've updated our corporate governance statement. And from an ESG perspective, we are now in a space with modern slavery regulatory compliance and also the risk management profiles obviously continues to increase, and we're getting right behind that with different initiatives that are supporting that. Our gender balance is about 39%. It was at June. It's actually more than that now. It would be sitting in the low 40s with the acquisition of Force Technology. So if I can cover again some small elements of this, we now have an office in Hong Kong that -- which has come forth with Force Technology. That's allowed us to manage our manufacturing capabilities within China. There's 14 factories that we acquire accessories from that will increase through the evolution of our private label range. So we will be investing within the development of that. Our operating model is bigger. It's significant in terms of its cross-sell opportunity. So the same type of customers that our consumer tech is selling to today, the industrial products will be taken and introduced to those customers. On the alternative side is the products that are sold today through the consumer tech and predominantly in the retail space. Clearly our industrials market has a significant portfolio of about 8,000 customer accounts spread across a whole host of industries, and we'll be taking the tech products in to those customers. We've already just recently started launching the tech products across all our stores, and they're rolling out actually this week to 12 different stores in Western Australia and also in Queensland, and that will follow across all states. So there's a bespoke product range that's being put together for businesses and trade professionals, that is just basically on convenience. So our inventory is really key. We're looking to improve our inventory as a percentage of sales. And that has reduced again and we'll continue to evolve that. So our supply chain demand planning will work really heavily with our facilities, obviously, out of China and also with our brands within Australia. And the demands of customer expectations obviously mean that we want to get our products quicker or faster to our customers, and in doing that obviously a better turn on our stock. So we continue investing and enhanced our websites, how we integrate with customers. There's a number of customers that now order online rather than sending us e-mails or purchase orders, and that obviously reduces the manual element of that. So the experience of the customer is better and also for ourselves. And we have continued to upgrade or revitalize our stores. But also most importantly, from a risk protection perspective, we've upgraded and continue to manage cybersecurity, and that's something that we're well protected against. And I guess everybody is at risk, and that's something that we'll have to and need to continue to evolve into. And lastly, before I move on, would be that the employee entitlements. So clearly there was a number of movers 12 months ago with the employment market and also with rising inflation and employees' entitlements. We looked at those both from a cost of business perspective but also maintaining stability within our employees and our staff. Across the board, that increased by about 3%. But at some levels, that was high as 9%. In doing that, our head count has come down, if I look at like-for-like, we've reduced our head count by 14% over the course of the last 12 months. So that was through natural attrition, not through any major redundancy moves. So in doing that obviously we'll become more efficient and still dealing with the same revenue base. So financial performance, in a nutshell, which I've already covered this, our EPS increased by $1.3 to $1.34, and that's up from $0.91. Our return on capital employed has increased from 9.9% to 13.8%. That excludes Force Technology purely because of the balance sheet, the metrics obviously distorted because of that. So our EBITDA has increased to $6 million. So if you look at that 8x, that's $48-odd million at 115 million shares, which suggests that our share price is undervalued clearly at a $0.30 range. And net profit has obviously increased, as I said, to $1.9 million, and our net profit to members is $1.4 million. So clearly, there's still some work to do there, but we're heading in the right direction, and it's all about growth and improvement within that profitability line equally supported by our cash flow. So our cash flow does include Force Technology. Our capital expenditures, we are a capital-light business of $1.5 million. That's quite a low percentage. And the reasoning why is that because it's a blend of not only our own company stores, but independent operators. So our operating cash flow and our free cash flow is obviously still maintaining a pretty strong level with a $10 million cash in bank. And sometimes that, depending on the date of June 30 or December 31, that obviously can fluctuate on timing of receipts and also with payments. Our net assets have been increased by 27%. That's obviously helped through profitability improvement as well as the Force Technology acquisition. Our debt was $4.9 million, it's now $10.8 million, by taking on the working capital facility from Force Technology at about $5.9 million. So our debt ratio was down from 1.4 to 0.8. It's now going to be with Force 1.8. Our longer-term target is between 1 and 1.5. And I think that's quite prudent based on not only our history but also looking forward in terms of other peers. Historically, across those metrics, you can see the numbers that I've just gone through. We've obviously had some reasonably good growth in all areas from our revenue, our profitability, our cash holding and also reduced our debt. And as I have shown $10.2 million down to $4.9 million. Paying off a bit over $5 million of debt has been a really good outcome. And now paying dividends on top of that proves through trial -- through our, I guess, trial and error in some ways that our profitability and the way that we manage our working capital obviously is really prudent around capital management. From a debt perspective, there's no other comments to make here apart from the fact that we wanted to break this down in terms of the Force working capital acquisition. The acquisition working capital is really just demonstrating that, that has grown since we've made certain purchases and our normal working capital facility, which commenced with us from the beginning. So next year you'll see that consolidated. And as I mentioned earlier, we have paid off our fixed debt facilities. We've got a good working capital in terms of cash availabilities and our drawdown facilities to be able to continue to grow our business and at $160 million and taking that next $200 million target. From a dividend perspective, there is a DRP being released today to market. That will all explain the details behind that, so I'm not going to cover it in more detail, but roughly $970,000 is the amount that we pay out in dividends. We are looking at the DRP with a 5% discount based on a 10-day VWAP that will be in the first 2 weeks of October. The yield, as I mentioned, is 4%. And 70-odd percent is the payout ratio. Clearly, that's a higher payout ratio than normal. And moving forward, I would see between 40% and 50% payout ratio. So the course of those payments will occur as well as an election notice availability from the 27 -- or to the 27th September. And the shareholders have an opportunity to either reinvest in the company or take their dividends. And what we wanted to make sure that we've done is, a, reduced our debt; b, we've provided increased profitability and c, obviously, now become an investment of choice by paying a dividend that gives a better return than other investments, particularly of our size. So our business today, our vision is to be the market-leading alternative to the majors. So industrial, consumer tech is really a big push in that. We're building a thriving business. It's got long-term growth. We look -- we've created shareholder value since we've listed in 2018. We continue to demonstrate that. We are looking to distribute leading brands, none for quality. They're made for everybody and they're used every day. So we are continuing to live behind the principles of satisfactory return to shareholders, looking after our people, focusing on responsible management to ensure that we've got long-term sustainability as well as profitability, good dealings with our suppliers and the relationships that we formed there. Supporting in communities is something that we're really proud of doing. And there's a number of Cancer Council as well as related programs that we have continued to invest and support over a number of years now because of employees who have gone through that journey, and we've supported them through that, but not only we want to be seen as a good corporate citizen. I guess, most importantly, building a strong business is really about ensuring that we meet the needs of customers and we meet the needs of stakeholders and we continue to evolve and renew our business. So things like loyalty programs, bringing solutions, expanding our team, having a great expanded network really underpins our value proposition and puts us in a -- puts us in a place where we have an excellent organization to be able to continue to take market share moving forward. Our businesses in 2 divisions, so the strength of industrials and consumer really sits behind the brands, the best prices, the best experience and the range that we offer. The channels that we're pushing through and the markets that we operate are very diverse. That gives sustainability to our business. If one is up, one is down, if all are firing, we reap the rewards of that. And our store network is really critical as well as our distribution channels to underpinning how we take our products to market. We are putting a lot of effort into not only our team today and how well they perform, but also making sure that any new employees that are bought into our organization that they adopt the work within the culture that we have, which is really strong across all businesses. So scaling around lower cost as well as operating efficiency is something that not only works really well today, but it's something that we're going to continue investing. So we cover a whole host of divisions, and this is really -- sorry, a whole host of businesses within the industrial division. So clearly the intention of this slide is really just to show all the different touch points in the trade professional space, all the products that we can sell to. So that is an area that we are going to be pushing really heavily on all our products within our industrial division. 77% of our sales today are generated through what you would classify, I guess, in mining resources or mining services, infrastructure, construction, manufacturing, transportation and the trade sectors. So there is -- the products are made for all those different sectors, and we will continue to grow in those. Equally, within our consumer goods division. So there's a whole host of channels and sectors of which we operate in, but the stores in which we sell our products through, as I mentioned, are really across those consumer electronics, online marketplaces. Commercial and trade is a new growth area as well as convenience. We have major leading brands that we're selling to, Coles, 7-Eleven, Officeworks, JB Hi-Fi, and they're the brands at the bottom that we sell. So Belkin is well known within the market, Automox, PopSockets, Ringo is a new product that we've just won and we are bringing to market, as well as Rolling Square, which is what they would call the Swiss knife equivalent for tech products, and we've just picked that up, and we're rolling that out over the course of the coming weeks into our existing customers. So on both those situations, whether it be our industrial division or consumer division, taking our products to customers through multiple channels allows us to be very strong in terms of our offer, but also our ability to be able to execute and have repeat business is important that underpins these diversities. From distribution centers, we have and also our sales force across Australia, 96 salespeople that are inside and outside in the industrial side and 27 within our consumer tech side. Our stores are 53 not 57 and also 3,300. So you can see that we're online or offline, we have services and delivery feet -- fleet, not feet, fleet. Our infrastructure and assets are really strong to support all those markets that we obviously have shown you in the previous slide. So outlook, strategic agenda, brands, channels and customers, household brand strategy, private label, ranging and pricing is key. On top of that, the supply chain that fits behind that is about efficiency and also with lower cost. From a channels point of view, we have new services coming to market, both around the higher range as well as manufacturing of products, and we're looking to build the best store network. So that's a combination of not only our own stores, but independents and also the experiences of the customer when they're in that area. From a customer perspective, more value, best experience as well as winning in the trade, commercial and retail element really is our finish of our 6 blocks of what our strategic initiatives are. Underneath that is obviously value-creating strategy of how we support our focus on winning. And I earlier covered most of that in the previous slides. We see our outlook in terms of guidance. Our underlying revenue is $159 million. That is a combination of the $114 million that we produced in 2024 as well as a full year of the Force Technology business. We see our gross profit continue to grow. And net profit will be up to between the range of 1.5% to 3% and our capital expenditure will be about $1.8 million to $2.2 million, which is obviously still as a percentage of revenue quite low. So our long-term growth strategy remains on track. The first 8 weeks of our business had high demand, and that's continuing a target of $300 million at 8% EBITDA for 2028 is still our targeted number. We see our growth coming through the 2 operating divisions with clearly a differentiated customer proposition, though the ability to be able to sell products across each forum is available. We've got a whole host of new initiatives that are coming out from a customer loyalty program, new services, new products, expanded ranges, expanded number of stores that we're in. So all that supports growth. And from an inflationary point of view, clearly this upward pressure continues to be that way. But we're investing in a whole host of different initiatives to protect our margins and support that. In the industrials area, the breadth and diversity of the business in resilient markets, particularly in mining resources infrastructure is going to hold that in good stead. We still have high demand for our products and services there. And as I've mentioned before, 90% of our products that we sell are nondiscretionary items. New product capability is going to increase from a private label as well as developing with leading brands is going to be able to improve our gross profit and drive higher margins. And lastly, obviously, growing the addressable market and expanding in new categories and new extended services is really the key drivers that sit behind the industrials business. Similarly, in the consumer goods space, we expect above-market sales growth and profit growth for this division. The customer types in terms of their segments gets us really good firepower to grow for the consumer technology. So they sell very minimal products into that industrial space, and that's huge leverage there. New product development will continue, and that will evolve. And I guess the support behind things like iPhone 16 launch, Samsung S25 launch coming up in January, a lot of these, what you would call super cycles obviously benefit the sales program, the profit program that we have. And again, expanding that business and growing the addressable market is clearly one that we're looking to do. So our near-term priorities really sort of summarizing, spit that out, summarizing all that, cross-selling, which I've mentioned, content is something that we're getting big or investing big in terms of how do we inspire more people, how do we inform more people, how do we connect with more people and how do we do that efficiently. So our marketing team and how they run their social media channels and how we look for ambassadors for our business as well as investment in community will -- programs will support that initiative. Our private label development exclusive brands are fundamentally key. The upgrades of our businesses and our store, in-store experience is something that absolutely is key to our future programs. So we're upgrading Karratha in the northwest of Western Australia. It commences next week. We're doing the same in our Brisbane facility. And there's 2 other facilities within Perth metropolitan area that we'll be upgrading over the next 6 months. The hire business launch will be put into a number of stores. I'll show you that in a moment. And that really is about expanding our network and pushing that more and more. We see that, that is, particularly in an economic environment where people don't have the luxury of being able to spend on areas of tools or other pieces of equipment, then our hire business absolutely makes sense. It's tried and tested offshore. We've followed similar models in terms of putting that together. So we're really excited about what they can do to our business, but also it's got a 13-week payback period on average with the product. So it's actually a high profit margin business that we are excited about getting into. So from a store perspective, how does that all fit in. In Heatleys, if you can see in the shaded blue at the bottom, in Heatleys we'll be growing by 6 stores. We expect to be out a bit over 1,000 across the Force Technology business and the consumer tech space. If I take you across to the right-hand side in the hire one, which is new hire business, we will roughly be in 20 stores by the course of the end of July 2025, sorry, June 2025. And we'll also be growing our independent operators in our United Supply business as well as closing some stores that doesn't make sense. So the Skipper Transport brands in that column will go, and that brand is now being consolidated into Heatleys Safety, Industrial & Automotive. We'll continue to consolidate the number of our brands to bring more brand awareness and brand penetration to market. And clearly, in doing that, our store network, our coverage when we talk about being the alternative to market, this obviously underpins everything that we say that we do. And final, disclaimer, which, well, I'll let everybody read. So look, there's a lot there. There's a lot of information that we've been really successful and had a really successful '24. So if I can first of all thank all our employees who have been critically involved in all our programs and driving our business day in, day out to me, not only in the needs of the business, but also customers that have done an exceptional job. So thank you to all our employees, to our staff -- sorry, to our suppliers who have been really supportive. They've been excellent in terms of working with us on a journey of change, and they also see us as an alternative choice to market, and that's been an exceptional engagement where we've now integrated 84 of our top suppliers into one group that supports all of our businesses, and that is driving a whole host of efficiency both for the supplier and also ourselves. And also from a stakeholder point of view, we've been well supported by our advisers. We've been well supported by our shareholders over the course of the last 12 months. So I appreciate that ongoing support. We've got an exciting business. We've got a long way to go still, both from a profit productivity market share perspective, it's an exciting journey. I see us as a business that absolutely will be the #1 alternative over the course of the next 3 years in the market. Our brand is getting more well-known. Our profitability is increasing. That will drive stakeholder engagement and also obviously share price which we're all interested in. And there's a number of new initiatives for our business as we're going forward that are exciting to launch. Too many to obviously go through today in detail, but that will be released at different times. So thank you. And what I'm going to do is just pause for a minute, and there'll be questions that will come through, and we'll access those questions, and then we'll respond accordingly.

Okay. I shouldn't touch technology, I should just leave it to the experts. Okay. There's a number of questions that have come through during the course of the presentation. I feel that the opportunity to read through this separately, we've been put up at the ASX today, probably answers a lot of those or I've covered those, I guess, broad spectrum. There's quite a bit of content in terms of FY '24 and FY '24 for -- FY '25 to continue to drill down on those is we've been here for a long, long time. So I have had some questions put to us. I guess from the anonymous ones, I don't know who's asking those, we'll deal with that separately. But we've grabbed 3 questions that we can probably answer today. If I can go through the first one. So the first one is mentioned items such as the hire services, demonstrating looking for new services of existing capabilities that will benefit new customers and existing customers. Do you have any financial guidance on these new services? And what new customer segments do you expect to tap into. Well, I think I've covered the customer segments previously. If I can -- it's all industries. We'll be tapping into our existing customers clearly in all those industries that we operate in as well as trade professionals. So there'll be an extensive push into that space. We're not giving any guidance down on individual operating areas at the moment. But clearly what we demonstrated is we're growing by almost 40% just on underlying revenue from FY '24 into FY '25. We've also said that we're looking to outperform, so outperform means in every area of our business apart from those we're obviously closing, we'll continue to grow significantly. And our caution, obviously, is it's a new launch model, but you just need to look at the profitability and success of companies like Kennards and like Coates to know that there's quite a significant addressable market there. It's got 2 dominant players. We have an existing customer base that has a need. And therefore we see significant upside. That's not dodging the question. That's just being reasonable in terms of expectations and where we're at today. Second question, "How will the Force acquisition likely impact margins in FY '25? Is it reasonable to judge effectiveness? Or is there a short-term negative impact of the acquisition?" There's absolutely no impact whatsoever from the acquisition of Force. It is all upside profitability. It's a business that turns over just under $45 million or it did in FY '24. It's been under private ownership for the last couple of years. I've been looking at making sure they're rightsizing. My mandate is to grow that business, invest in that business, bring new products, new services, new channels and expand accordingly. So there's already 2 new brands that we've taken on, being the Ringo brand and Rolling Square [indiscernible] Rolling Square. So those 2 are new products that we're bringing to market. Therefore, my comment earlier was we expect that business in consumer to outperform, outperforming sales and outperforming margin. So I think there is no -- I think my comment there was no negative impact, it's all upside. Any other questions, was there, that need to be answered? Just what level of payment for the intangible assets of $1.2 million in FY '24 and $0.8 million in FY '23, what are the level of payments expected in the future. Are we going to continue to repay our debt, but also from an intangible asset perspective, it's all technology-based. So technology is investment in automation, in been digitalizing our business and ensuring that the experience and the efficiency of the productivity is all obviously maintained. That investment within the $1.8 million to $2.2 million CapEx expenditure that we've identified in our future forecast. No other questions? Okay. So no other questions. If there are, those questions have come through that we don't have time for now, what we will do is we'll answer those accordingly back online. Equally you can send any further questions to our investors at Stealth e-mail address, which is available online today. Our DRP will be listed up on the ASX, that will be very shortly. In addition to that, on Tuesday you will receive an e-mail from Computershare, our registry office, with the -- or the details for opportunity to register if you want to be involved in the DRP. We are, as a maiden dividend, we're providing a 5% discount to shareholders. That doesn't mean that, that will sit there every year. We've looked at a number of peer groups who do nothing or give 1% or 2% because it's a maiden dividend. And we've done it on this occasion. But we've got an exciting business. We're looking forward to FY '25. We're looking to continue to update the market in terms of our progress. And there's a number of new initiatives that we're looking to put forward that shareholders should get excited with. So thank you. Appreciate your time. And we look forward to talking again soon. Thank you.