Super Group Limited (SPG) Earnings Call Transcript & Summary

Good morning all, and welcome to the Super Group December 2022 Interim Results webcast. [Operator Instructions] I would now like to hand you over to our Group CEO, Peter Mountford, who will take you through the presentation.

Good morning, ladies and gentlemen. Thank you for the introduction, [ John ]. This morning's interim presentation will commence with a brief overview of the group businesses and the macroeconomic environment prior to providing a detailed analysis of divisional performance and the financial results for the half year to December 2022. The webcast will thereafter conclude with a summary of important business issues as well as prospects for the forthcoming financial year ending June 2023. Despite the ongoing negative impact of the Ukraine invasion, load shedding in South Africa and ongoing product supply challenges Super Group delivered an excellent trading performance for the half year to December 2022. The group's financial position is robust and cash generation has been good in challenging circumstances. Revenue increased by 34.6% to ZAR 29.12 billion, reflecting strong sales performances in the three core operating divisions and the impact of the LeasePlan acquisition. Operating profit before capital items of ZAR 2 billion was 26.1% up on the prior comparable period due to significantly improved performances from the supply chain operations SG Fleet inclusive of LeasePlan and dealerships. Earnings per share of 250.3 cents were 31.6% up on the prior period, whilst headline earnings per share increased by 30.1% to 248.3 cents. Operating cash flow increased by 22.1% to ZAR 4.06 billion following an excellent cash generation performance in the previous comparable half year period. Net asset value per share increased by 8% to ZAR 41.49 per share. Many analysts have requested a comparison of current performance levels to those that existed prior to the COVID pandemic. The benefits of diversification, market share gains and cost rationalization are reflected on the slide shown on screen. Comparing to the prepandemic period to 31 December 2019, revenue has grown by 54.4% to ZAR 29.12 billion. Profit before taxation has increased by 76.7% to ZAR 1.58 billion. And earnings per share have increased by 76.3% and 62.8% to 250.3 cents and 248.3 cents, respectively. This performance has been achieved despite the economic challenges, including a 71.2% increase in diesel costs since December 2019 to ZAR 24.11 per liter. Escalating electricity costs with tariffs having increased by 19.3% over the past 3 years. Significantly disruptive and costly load shedding in South Africa with load shedding levels up 866.7% compared to 2019. Super Group has grown exponentially over the past decade, and the businesses have excelled in weathering product supply chain problems and cost escalation as highlighted on the previous slide. The group's scale, technological expertise and diversification remain significant elements within a robust sales growth strategy that resulted in an excellent financial performance across all divisions. Rigorous cost management and operational innovations have assisted in the mitigation of escalating inflation rates, cost increases and currency volatility. The challenging economic environment continues to present opportunities to improve sales volumes and market share. We proceed now to the divisional reviews commencing with an overview of geographic and segmental contributions as well as return on net operating assets. Super Group's international and other African operations contributed 51% of the sales revenue and 55% of operating profit for the half year to December 2022. The SG Fleet businesses and United Kingdom dealerships now account for 42% of revenue and 50% of consolidated operating profit, whilst the German and Iberian supply chain businesses contributed 8% of revenue and 4% of operating profit after amortization of intangibles in Europe of ZAR 7.8 million. An analysis of divisional revenue and operating profit contribution is provided on Slide. Revenue contributions for the year from the supply chain, Fleet Solutions and Dealerships divisions were 37.8%, 22.4% and 39.8%, respectively. Operating profit contribution for the Supply Chain division was 36.5% compared to 28.8% in the prior period. But the Fleet Solutions and Dealership divisions generating 48.4% and 15.1%, respectively. The most significant change in revenue and operating profit contribution compared to the prior year is in the supply chain businesses, and this reflects strong performances in Southern Africa and a steady recovery in Europe. The group's minimum strategic target for the post taxation return on net operating assets is weighted average cost of capital plus a 30% premium. This calculates to a return target of 7.9%. Group's annualized return on net operating assets for the half year to December 2022 was 10.6% compared to 10.3% in the prior period. The South African supply chain businesses reported a 3% increase in operating asset returns to the 12.9% level indicated, mainly as a result of improved performances in the consumer and convenience business operations. European supply chain returns increased by 2.8% to 4.1%, despite the continuing semiconductor crisis and low German automotive manufacturing volumes. Fleet Africa continues to experience an industry environment with very low levels of new business activity. Nevertheless, the return on net assets in this operation improved to 12.4% compared to 9.6% in the prior period. SG Fleet and the Dealerships in Southern Africa reported satisfactory returns on net operating assets, although in SG Fleet the introduction of the lease plan balance sheet for the full period under review has moderated returns. The U.K. dealerships performed reasonably in generating a return on net assets of 8.1% and an environment experiencing high-cost escalations and increased capital funding costs. Significantly, all divisions generated returns exceeding their respective weighted average cost of capital. We progressed to the divisional analysis. Supply Chain divisional analysis is provided separately across the African and thereafter European supply chain operations. The Supply Chain Africa revenue increased by 48.8% to ZAR 8.81 billion, mainly as a result of sales volume increases and new client wins in the consumer businesses including Lieben Logistics and GLS. Improved commodity prices and export volumes contributed to good performances in the commodity businesses. The increase in operating profit by 66.4% to an amount of ZAR 664 million is reflective of the increased consumer sales volumes and buoyant commodity exports on the Maputo Corridor in particular. The 6-month period under review also saw satisfactory revenue and profit growth from the South African industrial-facing businesses. Overall, operating margins increased from 6.7% to 7.5%. The supply chain Europe revenue increased by 28.1% in euros, reflecting the ongoing evolution of the business model towards longer distance freight and air cargoes. New vehicle production volumes in Germany remained low, reflecting the impact of the global semiconductor crisis and the Ukraine war. Operational enhancements, including the consolidation of shipments on to larger vehicles and higher average distance travels have been key to the revenue growth. Operating profit margins increased to 3.6% compared to 1% in the prior period, driving a 379.5% increase in operating profit to ZAR 80 million. The [indiscernible] operations in Spain performed well on the back of a modest revenue increase for the half year. German TLT supply chain businesses [also grew] revenues on a number of new customer assignments. The semiconductor shortage represents a continuing significant setback to the European automotive manufacturing sector, and it is expected to extend into the latter part of calendar 2023. The German businesses remain well positioned for growth should automated production volumes start to improve, and the business continues to gain volumes outside of this core sector. At this point, we progressed to the Fleet Solutions businesses, commencing with the Fleet Africa operations. The Fleet Africa performance was good, with revenue increasing by 8% to ZAR 580 million. The increase in revenue reflects increased activity on a number of full and managed maintenance contracts and good growth in ad hoc rental volumes. Operating profit increased by 12.4% to ZAR 129 million, with operating margins increasing from 21.4% to 22.2%. Fleet Africa remains focused on growing its private sector customer base and managed service offering. A number of tender opportunities suspended in 2020 and 2021 has still not been revised with fleets moving beyond optimum life in many parastatal and corporate environments. The Fleet Africa joint venture with the Co-Op Bank of Kenya continues to deliver excellent growth in both this country and the broader Eastern African region are important growth markets to Fleet Africa. SG Fleet revenue has increased by 26.6% mainly due to the inclusion of LeasePlan for the full 6-month period and strong realizations on the disposal of end-of-life vehicles. Operating profits increased by 31%. Increase in profitability was driven by excellent demand for used vehicles and a related improvement in residual values. The shortage in new vehicle availability does, however, have a negative impact on new funding revenues and end-of-life sales volumes. United Kingdom and New Zealand businesses contributed strongly to the SG Fleet results. United Kingdom operations performed well despite new vehicle stock shortages. The New Zealand operations benefited from the continuing rollout of new contracts. Amortization of intangible assets for the half year amounted to ZAR 80 million compared to ZAR 62.1 million in the prior period. The weakening of the average Rand to Australian dollar exchange rate positively impacted profitability by an amount of ZAR 24.6 million. Moving now to the dealerships division and commencing initially with the South African operations comprising 50 dealerships and representing most brands in South Africa. The South African dealerships revenues increased by 18.3% compared to the prior period. Increase in revenues is mainly as a result of stronger new vehicle sales from a very low base and increased aftermarket or service activities. Dealership new vehicle sales increased by 24.4% which was well above the norms of industry growth of 15.6%. The 8.1% decline in used vehicle volumes reflects a growing shortage in quality stock. Dealership South Africa operating profit for the year of ZAR 188 million was 21.2% above the prior period despite moderating used vehicle prices. Dealership operating margins remained constant at 3.5%. This reflects the benefit of steadily improving parts and ancillary service volumes and excellent cost management. The U.K. dealerships revenue increased by 46.1% in rand terms as a result of improved new vehicle stock availability in particular. New vehicle volumes increased by 67.2% and used vehicle sales activity levels were 31.3% up on the prior period despite ongoing forward Ford supply problems in the passenger vehicle sector. Ford commercial vehicle sales were excellent. Operating profit increased by 14.2% to ZAR 119 million. The decrease in operating margin from a prior level of 2.4% to 1.9% reflects moderating used vehicle prices and a higher level of commercial vehicle and fleet sales. Dealerships U.K. purchased a 100% interest in Delgarth Limited on the 23 August 2022, for a purchase price of GBP 13.7 million. This acquisition adds a further 2 Kia, 2 Hyundai and 1 Suzuki dealership to the portfolio. Strengthening of the average Rand exchange rate to the Pound negatively impacted operating results by ZAR 0.6 million for the period under review. At this point, I'd like to hand over to Colin Brown, who will take you through the detailed financial information.

Thank you, Peter. Good morning to everyone on the webcast. Beginning with the statement of comprehensive income. Total revenue increased by 34.6% to ZAR 29.1 billion, and EBITDA was up 24.2% to ZAR 4.1 billion. Operating profit was up 26.1%, with operating margin decreasing from 7.3% to 6.9% due to one-off items in the Services segment. These included business interruption insurance claims in the prior period, and closure dividends for our [indiscernible] in the current period. If these one-off items are excluded, operating margin would have increased from 6.8% in the prior period to 6.9% in the current period. Net finance costs rose by 19.3% to ZAR 440.7 million due to higher interest rates and borrowing level across the group. The tax rate decreased from 29.1% to 27.9%, mainly due to the lower South African corporate tax rate and nondeductible acquisition costs in the prior period. HEPS increased by 30.1% to 248.3 cents per share and if we adjust for lease plan and the one-off items in the services segment, the normalized growth in HEPS was 38.3%. Moving to the statement of financial position. Increases in PP&E mainly relate to vehicle fleets in supply chain and property additions in dealerships. The majority of the increase in goodwill and intangible assets relate to the four acquisitions that were completed during the period and exchange rate movements. Dealership inventories increased by ZAR 1.1 billion as a result of improved availability of stock and the U.K. acquisitions. The tax receivable of ZAR 615 million is due to a tax benefit in Australia, where SG Fleet is eligible to claim an immediate deduction of the full cost of assets in the first year of use. This is a federal government initiative to encourage business investment in the country. The cash balance of ZAR 5.9 billion includes an amount of ZAR 1.66 billion that is held in securitized warehouses in SG Fleet. The next slide provides some detail on the equity and liabilities of the group. The increase in trade payables funded the combined increase in receivables and inventories. Net gearing, excluding securitized warehouse debt and ROU borrowings was 28.9%, which remains well below the group's established ceiling of 40%. Return on equity has increased from 11% to 12.4%. The number of issued shares reduced by 4.5% due to share repurchases. The net asset value has increased by 8% to ZAR 41.49 per share. Moving to net borrowings. The increase in Africa's net debt of ZAR 711 million was due in part to the repurchase of shares. Super Group also raised a net amount of ZAR 250 million in corporate bonds during the period. The increase in the United Kingdom's net debt was largely due to the two U.K. acquisitions. ZAR 13.55 billion of the net borrowings in Australia and New Zealand are held in securitized warehouses owned by SG Fleet. The financiers of these warehouses only have recourse to the lease portfolio of vehicles and receivable balances and no holding company guarantees from either SG Fleet or Super Group. The group remained well within its debt covenants throughout the period at both Super Group and SG Fleet levels. The total net borrowings balance was ZAR 18.6 billion at the end of December. Turning to the cash flow statement. Operating cash flow increased by 22.1% to ZAR 4.05 billion. The net investment in noncurrent lease portfolio assets increased by 130.7% to ZAR 1.9 billion. The group's effective working capital management resulted in a net cash outflow of only ZAR 16 million. Cash outflow from acquisitions and other investing activities amounted to ZAR 437.2 million. For further details on the acquisitions, please refer to Page 18 of the booklet. Moving to the rest of the cash flow statement. The group repurchased 17.4 million shares for a total value of ZAR 524 million during the period. Net interest borrowings of ZAR 822 million and net lease portfolio borrowings of ZAR 340 million were raised. The group ended the period with ZAR 5.9 billion in cash and cash equivalents. Thank you. I'll now hand back to Peter to go through the prospects of the group.

Thanks very much, Colin. I would like to conclude this presentation with an overview of prospects for the remainder of this financial year to June 2023. Super group's scale, technological expertise and diversification remain the cornerstones of its ability to successfully navigate volatile operating conditions and the group expects to deliver good earnings growth and strong cash generation for the year to June 2023. New business opportunities, rigorous cost management and operational excellence initiatives will contribute significantly to the increase in earnings. Emphasis across both the South African supply chain and dealerships businesses will remain on reduced operational costs increased asset utilization and network optimization. One-stop commercial funding, maintenance and insurance platforms are a key focus in the Fleet Africa business. The further expansion of the growing fleet lease presence in East Africa is also a priority. Group's solid financial position will continue to support the pursuit of strategic growth opportunities, including the acquisition of businesses that complement and expand the group's existing service offerings. At a divisional level, improving volumes and technology-driven efficiencies will position the supply chain businesses in both South Africa and Europe for good growth and improved profitability. Major new consumer contracts will contribute strongly to the second half year performance. Fleet Africa will continue to benefit from increased activity levels on existing contracts and the growth of ad hoc rental volumes, whilst lease plan synergies and strong used vehicle residual values will support good revenue growth in SG Fleet. SG Fleet has an excellent pipeline of new contracts moving into calendar 2023, although new vehicle availabilities remain challenging. The availability of new and used vehicles will remain erratic, but sales volume increases are anticipated from the dealership divisions in both South Africa and the United Kingdom. Dealerships should perform strongly on the back of increasing service activities and the expanded U.K. network. Despite the COVID-19 pandemic and the inflationary cost impacts of the Ukraine war and load shedding in South Africa, Super Group headline earnings per share of 248.3 cents as of December 2022 has grown by a compound growth rate of 17.6% per annum over the past 3 years. Strong partnerships and a highly entrepreneurial and responsive mindset have enabled the group to address these challenges, and we thank all stakeholders for their contributions and support through these challenging economic and political times. Thank you for your attendance at this webcast, and we invite you to put forward any questions arising from the presentation or related financial reports.

It looks like we've only got one question or two questions at this point in time. I will read the questions quickly. The first one is from [indiscernible] at Anchor Capital. What does the residual values of vehicles in Australia look like compared to South Africa? The dynamics are very much the same between Australia, South Africa and the United Kingdom. So you're seeing the same proportionate values over time in both those two territories. The next question, [indiscernible] Please go through the increased commodity volumes and supply chain and what is short term versus long term in nature? The supply chain commodity volumes have been good. We don't see any of those volumes as short term. There's been quite a dramatic movement towards exports. Obviously, we are seeing a hugely negative impact of load shedding in South Africa and poor demand levels coming out of Eskom, irregular supply into Eskom. So a lot of our focus has been with many of the mining groups we serve, including emerging mining groups to the export corridor through to Maputo. You're also seeing a steady improvement in copper and other commodities coming out of the DRC and Northern Zambia. We don't see that as short term in nature. There's large demand, and many of the mining groups have long-term contracts in place and that performance continues strongly into the second half year. And we've got [indiscernible] -- can't read that. I have a few questions on the dealership businesses. What was the organic growth for dealerships in the U.K.? By far, the majority of the group -- of the growth that was reported there a 90%-plus is organic growth for dealership to U.K. Delgarth is -- only came in during this period. So that has a very small impact. Do you see continued opportunities to, I assume that says, buy dealerships in the U.K. and South Africa? The -- certainly, in the U.K., we have always said that we would like to complement our strength in the forward brand with two possible other mainstream brands. And certainly right at the top of that is high on care so to grow and have the opportunity to grow with higher down care and Suzuki for that matter, is very appealing in the U.K. But those opportunities are a few and far between. And we're very focused on brands that we would like to serve, which is the brands I've just listed and maybe one other mainstream brand such as Volkswagen. So probably not a significant -- not significant opportunities in the U.K. at the moment. In South Africa, there's been a huge number of dealerships in the market, many of which we had concerns with. Super Group already has quite an exposure in the premium segments. So there were some opportunities there. We didn't go with in South Africa. And there's a large amount moving, but the pricing is also somewhat unrealistic at the moment. So I don't see a significant advancement at all in South Africa. In South Africa, in the premium brand for us or premier brand in the affordable sector for us, there has been an open point that has been identified in Pretoria, Pretoria North. And we absolutely throw them are going to announce what brand now, but we're absolutely thrilled that we were awarded that which is a huge feather and to get in at a ground level without goodwill is very appealing there. The SA margin was maintained. Is this now sustainable -- that's dealership, is this now sustainable, even with crisis moderating? Yes, we believe the SA margin is sustainable and that's largely driven by improved ancillary service performance and rigorous cost restructuring across the division, and that continues into the second half year. U.K. margin has eroded and is below FY '19 margins, should we expect further margin pressure for the balance of the year? I don't think the U.K. margin will erode further. Part of the problem there was we still haven't had really good forward passenger vehicle supply. So a lot of the margin erosion largely reflects a higher commercial vehicle sales percentage and quite a lot of feed sales. We don't expect the margin to erode further, and it should be approximately at these levels for this financial year to June 2023. Andrew [indiscernible] Can you comment on the effective load shedding on your business, please? Thank you, Andrew. That's a very important question. Thank you. So Andrew, the direct cost in unrecovered diesel costs on our businesses was ZAR 16.7 million in this half year. And that is a very significant number for us. And that number is despite the fact that we invested hugely in solar and inverter backup and battery systems over the last 4 to 5 years. So without that solar impact, that number could have been 3x that level in this half year. We continue to invest in solar. We'll invest nearly ZAR 100 million into logistics, which is a rather high proportion of that ZAR 16.7 million over the next 6 to 8 months. So that is a real issue. There's another indirect cost, and we estimate that to be at somewhere around 14 to 12 -- sorry, ZAR 12 million to ZAR 14 million in the 6-month period and that's the inefficiency that we are seeing in traffic movements, traffic jams, city disruption with robots being failing and also being destroyed. And of course, the inefficiency of backdoor is driven by low thinning. So that is a huge issue for us, and we continue to focus very vigorously on solar. And certainly, all our major warehouses, such as Super Park are totally covered in Sun at this stage. [indiscernible] Capital. Supply Chain Europe margins of 3.6% seem higher than previous guidance, is there's still some more upside on these? Yes, Mark, there is more upside on these guidances. You're steadily seeing an improvement -- improving production environment out of the automotive industry in Germany. We're certainly seeing the benefit of cost cutting, and we've got a whole lot of other strategic initiatives that we're literally looking at the moment, which should see an improving margin. We'd like to see that improve very markedly into the next year. [indiscernible] Well done on the great results. Thanks very much. Please, could you expand on some of your capital structure initiatives? Will you be continuing with share buybacks? absolutely. We certainly bought a significant number of shares back in this half year period as we've highlighted. But at these sort of share prices, share buybacks are just infinitely appealing. [Keith][indiscernible] What effect increased maintenance and insurance does the deterioration in domestic roads have on your supply chain businesses in South Africa? Does [Transnet] push volumes into your network? [ Keith ], there is a very significant impact of deteriorating roads. The road freight association puts out an estimate of the value that is destroyed in terms of tires, wheels, accidents that derive from these sort of process, et cetera, and that runs to over ZAR 1.5 billion. The numbers are significant. We've managed our insurance very, very well. We've, over the last 10 years, built a significant first layer of insurance risk across our motor vehicle fleets, which has served us incredibly well at the moment. So we haven't seen a significant insurance increase but the deterioration of the roads is a real issue. [Transnet] [indiscernible] there hasn't been a significant increase in our product moving of towards our group. Remember, a big chunk of our supply chain is fast moving consumer goods, convenience goods, small industrial goods and the like, which are like natural cargoes and transit. So the only thing that one then thinks about is largely commodity driven. Our transport corridor is not down to Richards Bay. Sadly, you're seeing the disruption that is taking place in the Richards Bay line, which is a critical negative impact in terms of South Africa. And so we would not call on that sort of level of long distance. We're also not subject to our vehicles to that sort of sociopolitical risk, either at the moment. So we're highly supportive of the Transnet rail network and its resurrection or improvement or control of damage to that network, if you like, and access to that network, such as Richards Bay line would only suit us. It is really ideal for us in markets such as coal to be hauling from mine to rail head at best. The Maputo Corridor is obviously manageable for us. It's a far lower distance. [indiscernible] at SG Fleet, what do you see as drivers of growth and operating profits now that lease plan has been fully annualized? There's three things that are really largely going to drive growth in SG Fleet. The first is they've got a very good and strong pipeline of new business opportunities and new contracts as the motor vehicle shortage mitigates and it is a significant problem for SG fleet to access the number of vehicles needed, you'll see significant replacement in existing contracts and new contracts and that will drive financial and operating profit growth there as well. And then lastly, but not least, the synergies that we expect out of lease plan. have not been realized fully at this stage. We are on track and ahead of our schedule and synergy realization, but the big realizations come through in the next year to 18 months. [indiscernible] Please comment on the availability of bolt-on acquisitions for group divisions. What are the pricing metrics and how does it compare to buying back your own share? [Asif], I mean the absolute reality is our own share is clearly very significantly undervalued that all the supply chain businesses and there are a huge number of supply chain businesses, dealership and other businesses available in South Africa. The price expectation is way above where our own share is trading at the moment. And certainly, when you start to move to Europe, there's some really quality opportunities there that are highly complementary and bolt-on to our existing business, and strengthen our existing German business quite significantly in synergies and the like. But the pricing is way beyond anything you see in Super Group at the moment. So of course, as I said earlier, the buyback of our own shares is attractive, and we have to be very selective, very sure and have absolutely certainty to the strategic value of acquisitions at the moment, given our own pricing. [indiscernible] How do you see the recessionary environment in the U.K. affecting dealerships, U.K. as well as SG Fleet U.K. operations? Yes. The U.K., as you see, has seen some moderating growth and you've certainly seeing quite significant cost escalations in the U.K. and Australia for that matter as well. You still have significant order books in the dealerships U.K., a significant shortage of vehicles, significant backlog of demand. Fortunately, those books are not falling off the radar screen and remain there. So we would see more upside in the U.K. dealerships and SG Fleet U.K. most definitely as vehicle supply improves into the future. [indiscernible] again. At Supply Chain Africa, in which segments are we seeing the revenue growth was it across the board are these growth figures to be sustained in the second half? The revenue growth is strongest in consumer and convenience of relatively lower basis. It's strong in commodities, and it's less strong in industrials. So when you look at the revenue growth, the two former divisions revenue growth is similar to the overall division number that you have seen in the slides and the industrial is about 6% of that. So the answer is all three sectors, if you like, have performed well in supply chain. [indiscernible] Two questions. Can you give us a sense of growth in SG Coal? And two, excluding the impact of lease plan, it seems like SG Fleet experienced an increase in costs, could you shed some light on the outlook for the business to cover these costs? So the growth rates in coal have been very similar to what you have experienced in the division. So again, as I covered in the previous question, growth rates have been good in SG Coal and Legend Logistics and other -- those growth rates have all been around exports as opposed to local consumption. And we've seen a very significant movement of our fleet into the export corridor in [Putin] particular. SG Fleet is experiencing an increase in costs. You've seen quite significant salary and wage escalation in Australia. You're seeing quite significant other cost escalation in that environment. We will manage that. We will make sure that we optimize our structures and our costs and that we look to drive costs out of the business with technology. And we believe that SG Fleet will perform strongly this year at similar levels to that you've seen in the half year and will then be obviously, there will be a huge impact of the synergies and lease plan coming through in the next financial year. Good. I think that is all of the questions. Thank you very much. Thanks for the -- sorry, there's one there from Richard, Richard Simpson, [Obsidian]. Do you see any commercial opportunity threats in the privatization initiatives of Transnet? No, we don't. We -- as I said in my earlier answer, even when you look across border, a successor rail system could only be to our benefit. We could deploy many of the vehicles, all of the vehicles that we run the corridors from the DRC and Northern Zambia to Durban, literally from mines to rail head. So -- and that would be almost a more efficient deployment of that fleet. So we don't see rail and the development of rail as a negative. And we don't see the privatization of Transnet, and we hope that's successful in corridors, such as Durban and Johannesburg as a major threat. We are not a big mover of shipping containers at all. So that's not a core aspect of our business. Most of our long-distance transport is consumer and convenience products from within our own stable, where we've got integrated supply chain distribution initiatives. Industrial products are largely locally manufactured such as paper, pulp, timber and products of that sort of nature and a lot of locally many metal products, [tires] and other things of that sort of nature. So again, your most effective deployment in relation to products that are suitable to rail and those products are largely commodities and container-type cargoes is a positive in our mind as opposed to a negative. If there are no other questions, I'd like to thank you on behalf of Colin, John and myself and Michelle for attending the session this morning for your ongoing interest in Super Group, and hope you have a good day. All the best.