Truworths International Limited (TRU) Earnings Call Transcript & Summary

Good day, everybody, and welcome to our 2023 results presentation. With me in the Zoom Room is Sarah Proudfoot and Manny Cristaudo, most of you know them, our joint deputy CEOs. And then Reon Smit is our Financial Director. So we are going to do this, but I'll do the first part presentation, which I'm hoping will be for -- I'm hoping 30, 35 minutes. And then we'll deal with questions, and I'll refer some of them to my colleagues. And the presentation, therefore, has got much -- many more slides that I'm going to talk to. And in many of the slides, I'm just going to be very brief and only refer to one or two notes on them. Obviously, that's for you to look through in your own time if you want to. So I'll start off with the presentation. And when we say that the Truworths shareholder vision, and we're going to talk a bit about that, our vision for our shareholders is to execute innovative strategies which delivers significant value over time. We are wanting shareholders to think that about us. And therefore, we measure our success through long-term wealth creation. Now I do, do this each time, and I talk you through our business philosophy. I'm going to do slightly differently this time to try and explain how we use this philosophy, which drives everything in our business as you -- as many of you know, we guided by and we use it through good and bad times. We start with our purpose, which really says why does Truworths Africa exist. And we define that very specifically. And we also say the same thing about Office, why does it exist. And it's really output-focused. What do we do in the marketplace? What's our role in the marketplace? And then how do we go about doing that? We define that and put it in every [indiscernible] for years. Then once we've done our purpose and saying, what is our values, how are we going to live? And the values, we call it sequenced in a conditional way, meaning the one in the middle there that says in our values, innovation and passion. It means we primarily focused on that test when we're hiring someone, when we're assessing someone, when we're looking at short-term and long-term incentives, primarily, we start with innovation and passion. And why we call it sequence conditionalities is because after that, once you have, for example, [indiscernible] through process and tried to recruit some or setting up a short-term incentive. We'll say, firstly, the condition is, have they satisfied the condition of innovation and passion? If yes, the next thing is, are they contribution focused? They want to contribute. Then if that condition is satisfied, are they willing to invest in future potential of themselves and of others around them? And then are they -- and do we encourage them to learn and share? That is all about receptivity. So these are all sequential. The one has to happen before the other. And then a new one which we've put in recently a few months ago, because we do this with our Board and they have to approve it, is we embrace the power of inclusivity of inclusive teams. We realize more and more in the modern world that if our people are not diverse and yet inclusive, meaning we accept all types of people, irrespective of what their beliefs are, who they are, what they are. It's really about whether they live and behave according to our values that counts. And that's all in sequence. And finally, with all that in mind, we -- if all of those conditions are satisfied, we celebrate and reward excellence in their contribution. Why this is so important is if the Board had to, for example, decide they want to change the sequence, and you could take an example, they wanted to embrace the power of inclusive diversity teams as the primary issue, then that would have to change. They have to [ reset ]. We'd have to change it in the middle and say, the first thing we look for is not innovation and passion. The first thing is, are we getting enough diverse and inclusive teams? If the answer to that is yes, now we hired a diverse and inclusive team. Then the second thing is innovation and passion, if that's what we agreed. So we [indiscernible]. It's a sort of a live document that we live by in all of our behaviors. So what I've defined for you now is our purpose. While we feel we exist to the outside world, our value is why we -- how we feel we should behave. And then we say, if we were doing our purpose and fulfilling it, and if we were behaving according to our values, what do we think our stakeholders would say about us? Will we say, well, our customers would say what it says in it, in the document on the right and our Office customers would say something similar. And then at the bottom in orange, we say, our employees would say something and then our shareholders would say. And I'll focus on the shareholder one because right now, I'm talking not so much to shareholders, I'm talking to analysts and fundholders and this financial reporters, who advise and feed information to shareholders and who the shareholders trust and depend on. So we also do. And we say we would like them to say, we are long-term investors in Truworths, because we're trusted management's capacity to execute innovative strategies, which deliver and then I've said, significant value. But over time, it's a long-term issue. Now then what we do is we periodically, and it's at least every 3 months, we go and look at this. And then at least once a year, we have a scratch session. And we don't look at what our stakeholders do actually say about us. And of course, the interesting thing is they never say what we want them to. They always say something different. Shareholders might say what you know they're saying. They've got the wrong credit model, the CEO has been here too long and all the other stuff. And customers might say, I don't know if the fashion is great, they're supposed to have a better fashion or whatever it might be. We do the surveys. You can ask people. And it's not hard to do it, because shareholders tell you what they think, vision customers tell you what they think because they shop or not and you can hear and so do you stop. So when you bottle that clear, then we'd create strategies on how to put that back on track. And interestingly enough, if I talk about the shareholder one, I'll give you that as an example all the way through because our strategy is how do we fix what we think they are saying or here, they're saying differently from what we wished they would say. And our business philosophy and our values are based on some really important principles, and they are these that I'm showing you now. Firstly, we really believe you must contribute in our business more than you consume. It is [indiscernible] than you take out. And we believe and we try to practice that. Very similar messages you give children or your family, and we try and practice that. It doesn't mean you can't take out and I think people are ambitious and they want to. But the principle is you must contribute more than you take out and before you. It's a [indiscernible] entitlement culture or not. Secondly, we always say in our business, it's again that long-term thing. It's a marathon, not a sprint. Then we always say, focus on what you can do, not what others should do. Be the best you can. In other words, if shareholders or customers or [indiscernible] are not saying what we want them and expect them to say, if we're delivering on our purpose and our value, then what are we doing wrong? What can we do to fix it? You can't blame them. Therefore, they've got good reason for what they've decided to do. What are we doing wrong and how do we fix it? That's all about the strategy. And then we always say, it's not that people say, it's what they do. Our value are not about aligning everybody's values to be the same. That can never be the case. Our values are all about how people behave in our business. So it doesn't matter what their beliefs are and their core values. And so really, is the behavior consistent with what we think is important in our business? We always say and I've said it to you many times, don't buy growth in market share at the expense of profit. We never do that. Be frugal in good times, but also be frugal in bad times. Don't, when it's good, suddenly go celebrating and spend the money. You always need to be frugal because you, as you guys well know, you can't tell what the future is going to bring. You can think it's good because you're doing well and then it turns a corner instantly. So we always have to be frugal, but never at the expense of our business philosophy. Our Emporium always comes first. We've got a choice between one store and another. Emporium takes precedence. We don't mind people making mistakes. They're encouraged to make mistakes, but don't repeat them, learn from the mistake. And probably one area we'll always say probably broader, to fix the broader problem, not the one area only. And our business is called Golden Goose. We talk about that to our stock. We do in the U.K. and in South Africa. We say the favor of the Golden Goose is what we believe in. It's all about contributing to the business and expecting something in return, but not more than you contribute. And so you've got a [ merchant ] protect the Golden Goose. So that is our sort of way we behave according to our values. So we can't practice that. We think in the last few years, we've done pretty well. We think our ratios and metrics has been very good. For example, if you look at the medium-term targets that we established in the integrated report, we're within the range or above all of them. And the three wings there are the ones will be either at the cusp of the top level or we're well above. So return on equity, 48%. And return on assets, 30%. Return on assets, EBIT divided by total assets is our primary productive measure of management's ability to use the assets in the business at the operating level, towards an Office. Obviously, the way we financed the business above return on assets, up to return on equity and all the way through to share price. The way we do that is a corporate responsibility Truworths International. So we sort of separate it that way. But other way, our metrics are well above the local benchmark. We measure that really carefully. I'm not going to disclose to you who to use on the benchmark up, one would like to think it's obvious. And similarly on the international benchmark, we look at what we think are appropriate benchmarks, and we use them. And you can see that, for example, when it comes to gross margin, we are slightly lower than the international benchmark of the ones we've nominated, but we're way above the others -- all the other metrics. Surprisingly, we're even better in our asset turn and remembering we finance are own book. So in our assets, there is also debtors, which some of the international competitors do not have. And just to give you a little bit more of a flavor of how we see our business philosophy and use it. This is we keep a record of consensus versus actual in arrears. So we will say, for example, in 2023, watch where analysts consensus in August last year, when they just had the results like now and what was it? And then when August is finished and say, how far behind were they? And you can see in this year, the endless trend forecast was 26% below what it turned out to be. But in '22, it was 40% and in '21 it was 46%, average 40%. That average is wrong, by the way. But anyway, it is 26%, 40% and 46%, excuse the average. And then when we say so in November, what did they say when they were looking at it in February after half year results and then in June, just before the results come out? And you can see basically this year, 25% a year ago, underestimate our results. And in February or half year 15% and in June 40%. So now we can see now, this is not analysts' fault, we also are conservative. We also don't know. And we also make mistakes. So what are we getting wrong here? Is it that we ourselves are being too conservative in our strategic discussion, and we are not giving our message properly? Or is it because we are doing something wrong? So we have a strategy. And part of the strategy conclusion is, if I look at this one, well, it's gone from 46% to 40% to 26%. That's not bad. That means something is working better. We wouldn't like analysts to forecast higher then we end up being because [ underperformance ] [indiscernible] deliver is part of our value. So it's improving. Now that means we are improving in the way perhaps that we're communicating because we were probably not spinning the message out properly before. And also, we are performing. So analysts are awarding us by saying, okay, you're getting a bit better. We will trust you a little bit more, and we will be a little bit more optimistic. And then we ourselves have been conservative. We don't know what the numbers are going to be. And I would guess our own numbers ourselves on our own forecasts are also lower, certainly the conservative one then it turns out to be. The point I'm trying to make is, when we do strategy and we decide on things, we look internally first and we say, what can we do better in terms of what we're supposed to do? And as an example, the reason I'm doing this now, and I'm going through this presentation in this way is because what we concluded last time is we're not presenting our message to shareholders properly. And we're not explaining ourselves well enough. And so I'm trying to do that better now. I realize, of course, shareholders will always make their own decisions, and who knows what the future brings? And our role is really to be transparent as much as I'm trying to be now. So over the last couple of years, we repurchased 52 million shares. You all know about that. That does also, if you think about it, at the time, we were probably nowhere near what we thought our own forecast of what we did. We're probably lower than we actually achieved ourselves. Nevermind analysts, we ourselves were lower like we still saw there was opportunity. So we were aggressive in share buybacks, and that turned out well as it turned out. We maintained our dividend cover, as you know, right through October. And since then, we have acquired -- we looked at lots of different opportunities, but we just don't want to overpay. So hopefully, we're not being mean about it. We really use professionals to value it clearly, and we are not very flexible about how much more we pay for our business and probably we miss out that way, but we are really aware of the intermittent investment. We acquired however, in cost design capability by buying two businesses, and they are now fully functional operating in a head office. The design centers, which are [indiscernible] and sample sets. And all the things you'd expect in manufacturing, we have spent a lot of effort and time in protecting our local manufacturing sector, we haven't solved the power problem. You can't solve the load shedding problem in South Africa. But we've protected ourselves to the current extent of load shedding, meaning 87% of our stores are protected with alternative power, and others don't need to be, because they don't have problems. But that doesn't mean we can solve a problem if there's a power out for 3 days. So we are aware of that risk, and we are trying in our own minds to find mitigating strategies in that awful event if it ever happens. Not that that's easy, and I'm not saying we found it. We have invested in a new distribution capability. We're halfway there. It's still going to only come of age operating fully in January '25. But we will by then have spent ZAR 1 billion, and it's been spread over 3 years. And [indiscernible] offers superb team in Office, highly experienced, competent people and they are -- have become over the last couple of years fully aligned with what we consider to be best-in-class retail practice. So you've got a combination of best-in-class retail practice with extraordinary competence in their field and competent, committed people. I can only describe them as excellent, and that's all why that business is doing so well. As I say all the time, we sell aspiration. So we focus on quality, aspirational fashion, better end. So if our Board wanted us to change our purpose and say, listen a whole lot of people are saying you couldn't go -- isn't going to the value space. Your model is not right, and we must stop sending on credit into the value space. We'd have to change our whole purpose and why we exist. And as you all know, to change a DNA or business is like changing the DNA of a human being. It's very difficult. So that's why our Board never has asked us and wanted us do that. We spent a lot of time, and we're very busy with that at the moment, focused on opportunities of merchandise where we know we're underrepresented in the marketplace. I'm not going to say what they are, but they're categories of product. And I'm not talking about price. Price could be the reason, but we're not talking about price. We look at product categories where we know we are massively underrepresented, and there's an opportunity there internally to improve. And if we get it right, there's a lot of money in that. And that's a big part of our future endeavor in Truworths specifically. We have expanded our brand portfolio with Fuel and Sync. And they're both doing nicely at early stages. We refined and grew our Identity Kids business. We've already got a fantastic Truworths, LTD, Naartjie, Earthchild. But now I think the Kids has become a lovely business since 2019. We've developed and we've actually started to roll out our new store formats. Truworths Reimagined, we call it. The first one is being launched in the waterfront in Cape Town and a whole lot of others are -- can be seen. Identity mega store trying to make Identity go the journey. Truworths is a small store, getting better separate entrances for men's and ladies, departmental kits, departmental lingerie. So it's becoming a bigger store, tends to have higher sales per square meter as it gets bigger, which, of course, is wonderful. And ID mega store is proving to be just the same as Truworths was in that stage. We've launched our Kids and Podiums to all of our brands in one other than Identity. Context is, I think, 6 or 7 stores came really nicely now. That's [indiscernible] and LTD and glamour product in a really upmarket aspirational format, which is some stand-alone but mainly in an Emporium store to elevate it. And then you know about Sync, which is the discount value but still aspirational fashion business. Fuel, which is a bit street young guy. And Office London in South Africa, which is different from the office in the U.K. Those are all going according to plan and nicely. There's significant expansion came in the Office U.K. retail with a few new formats that have been successfully tested in the U.K. There's quite a few that have been tested, and there's plenty of lowering in fruit care going forward. It's all been identified. And we are on a mission to take advantage of the low-hanging fruit with our new successful formats in the U.K. Online, of course, we work on U.K. is about 14%. South Africa is only 3.5%. But South Africa nowadays, the online experience is probably much bigger, I think, than our biggest three stores added together. So it's growing 13%, 14% a year. So it's a nice steady growth from a small biz. And credit is an enabler. That is our lives. That's what we think. If you look at the shareholder return and creation of wealth, if you look at it between 2020 to 2023 current share price [indiscernible] but anyway, the growth -- the compounded growth in shareholder journey is 36.2% compounded if we include dividends. The share price has gone from ZAR 34.28 to ZAR 72.46. That's the current price, I think, on the 31st of August. And there's the change in share price and then there's the dividends, which is how you move to the ZAR 86. So we believe in the last 3 years anyway, we have generated group returns. And now for 3 consecutive years, the return on invested capital has been at least double the weighted average cost of capital. We hope to continue that. There were many years before that we always did that, and then we had a few bad years 2018, '19 and '20 when we were below that. But for the last 3 years, we've more than doubled the way. If we look at the group financial results on this, I know you guys know and you don't need me to go through it. Many [indiscernible] are experts, and they can help you with questions afterwards or subsequent to this presentation, but we delivered 12% growth in [indiscernible] and 11% in merchandise from a good point of view. Sorry, I'm just getting my pictures out of the way there. And if you look at the very right-hand column, the change in prior period, 52 weeks, but excluding the tax matter and on a 52-week pro forma. So it's the most comparable, 13% in sales and 9% in headline earnings. We have shown you the progression before that. You can see the dividend and headline earnings per share growth on the very left and how the dividends -- the headline earnings per share and dividends per share have gone up consistently since 2020. And return on equity, return on capital is also excellent. The return on capital is the same as it was 2 years ago in June '22. You're going to leave out the gray one, which is not comparable, because it's got 53 weeks. What's also pleasing is our asset turnover and return on assets is also doing, as you saw earlier on, above the benchmark. So our results have been pretty acceptable the last couple of years. And there it is again, post office acquisition on the right. And since 2019 and then the COVID period and then the last 3 years have been much better. There is a statement of our balance sheet. I suppose the notable points are inventories up by 23%. That's Office in Truworths, partially, it's because Office is doing so well. There's a lot of stock in the system. The cash can get offset a lot by the interest borrowings, it's about a net of about ZAR 900 million debt, and that's including the ZAR 350 million or ZAR 400 million we've paid so far for the warehouse distribution center. So the balance sheet is very strong. And share buybacks, I have mentioned it already, talking to -- really talking to our capital structure and our facilities of ZAR 3.5 billion of which we used ZAR 2.3 billion. And we've got a GBP 20 million of [indiscernible] in the U.K. that we got notification in the U.K. and then the dividend you know about. Looking at cash flow, the business -- the group generated ZAR 1.4 billion, paid dividends of ZAR 1.9 billion. And there was some share OpEx, very small because we now the DC to worry about the distribution center. And we did increase borrowings mainly as a result of working capital expansion. Truworths pretty good performance, slowing in H2, load shedding is a problem, not because we can cope it but because load shedding affects consumers' behavior. There's been a large growth in the book. The significant growth in credit losses. But the provision seems to be stabilizing, and we think that's a very good sign. It's not dramatically improving, it's stabilizing. But we are a little bit -- getting a little bit more optimistic than we were, although I don't want to overstate that, that might still take time. Stock control is good. And about 45%, 50% is made in South Africa for the South African business, and that's really good because we have the quick response capability that way. Income statement, you're familiar with that. On the right, it shows that the change sales was 9%, but the profit before finance costs actually climbed by 1%. And you can see it stands at a mile with 49% growth in trade receivable costs. And if you look at our whole group structure, actually, that single number, the trade receivable cost is what's containing Truworths and even the group. So that is our target for this year. And that's why you can imagine, it's a massive focus for us. This is -- this includes the impact of this indirect tax matter. I don't want to talk much about that. That really is self explanatory, but it doesn't matter. I mean that's a one-off. And once it's done, it's done. What was particularly pleasing about this last year was that ladies division, which has tended to struggle because ladieswear in the marketplace is more difficult and much more competitive. And we had -- this was the star of the show really besides the other. So we were very happy with the ladieswear. Men's has got some challenges, but we think we're on top of that now. And kids has been a nice, steady, lovely business become ZAR 1.5 billion and that's at the Identity kids, by the way. The identity, we started it ourselves from scratch, ZAR 2.4 billion business guidance. Store space, the last year, we shrunk by 0.2% in this previous year. We've just been through, we grew by 1.4%, with the highest ever trading density, sales per square meter of the trading space. So H2 level things are doing pretty well. The bad debt is our big figure on the [ betas ] book. It was about 12.6% inflation for the year for the financial period. Or the questions that are going to get asked, I think it's going to be less than that, hopefully, just below 10% for the next period. Gross margin slightly lower. In fact, when you look at it over the long term, it's pretty consistent, lower than last year, but last year was higher than normal. So if you look at it, it's kind of average. The gross margin, [indiscernible] is up again. I don't have to keep on repeating it. It's all about the trade receivable costs. I'm going to go through these. You can look at them later in time. We put a bit more effort into defining the trade receivable costs. I think the big thing here is that the bad debt increased by 31% due to the higher bad debt up to 26%. And there were lower recoveries, our debt recoveries. That all speaks to the tough economic climate in South Africa. The ECL allowance at 20.6% compared to 20.9% last year is very similar. But in actual book is going, which is what causes the loans to grown up in rands. And profitability, as we said right upfront, Truworths and the group, the profit before finance costs, EBITDA, operating margin, all way above anything else in time. This shows you our CapEx, ZAR 310 million spent. I was wrong early on, I said it was more than that. ZAR 310 million has been spent so far. It will end up being ZAR 1 billion. So this current year, we probably will be another ZAR 400 million, I'm thinking or guessing, and then another ZAR 300 million in the final year. So that's how the money is made. The rest is pretty normal, although we did spend more in store innovations that we normally do, but not much more than ZAR 300 million. And that's obviously due for keeping us up to date and improving our stores. Cash flow in Truworths, and we're pretty good. We generated ZAR 1.4 billion. All the dividends were actually paid from Truworths as it turned out. We never know what's going to happen in Office. This expansion and perhaps opportunities in the U.K. for us to take advantage of. And so the [indiscernible] has been paid under the Truworths cash flow. Looking at Office quickly. Very strong performance in Office. We're very excited. We closed all the German stores that were not doing well, but we opened our first new store in the U.K. in 3 years, which is really exciting, and it's doing well. We remodeled two stores in key locations. And there are further four renovations or extensions and five new stores planned for this financial year, all with really attractive payback periods, great new store concept, which is working well. So that all goes really well for the future. And the positioning I've spoken about before, you understand it, but the net result of all of that is 18% growth in sales and 31% in profit, which is we think an outstanding performance of an amazingly competent team with our support in the U.K. They've done a great job, and we think there's more to come. Geography-wise, they had 92 stores. Now, they've got 81, which includes 11 concessions. That's mainly because of the close of the German stores. Office trading expenses. I'm not going to spend a lot of time on that. And depreciation is explained there, the right of use of asset -- right-of-use asset probably has changed, and Reon can explain that more if anyone wants to know. Occupancy costs have gone up because a lot of the rent relief. And rate relief is all normalized, so all the benefits have gone now. Now this was a real year where there's no more rent relief and rate relief and all those things that come. And despite that, our results as good as -- better than we could have hoped. And as a result, now our EBITDA margin, operating margin from a loan, 7%, 8%, 9% giving a curved right up to as good as you get. CapEx is store innovation, you see there, but you really see ZAR 3.8 million committed for the coming year. In my opinion, it will be quite a lot more than that. I'm guessing it will be more double that figure because of what I've said already. Cash flow, Office generated great cash GBP 16 million. We repaid borrowings of GBP 7 million. So it was a really great cash [ churn ] for the year. Managing credit, I'm not going to speak about this first slide. You know what it is. It's fundamental to our DNA. We operate with the opportunity to use whatever medium you want, your own credit card cash they buy, they know the layaway and pay for it later. We offer every alternative you can imagine to pay. But one of which is we finance credit and loan book because it empowers us properly. The credit market is under pressure. I think you all know that in South Africa, it's a tough market. But there's a strong demand for our accounts. I mean, you'll see in a slide later that over 5 million applications to see the highest ever and about 840,000 actually were approved, because they qualified. So most gets [ most ] we then call them loyalty customers, and we start the relationship. But still a 5 million applying to have an account is an all-time record, has been growing and growing and that a new account was also a record, but collections have been difficult. I mean, it's a tough market out there. People are struggling. And then the TransUnion Index, which we use as a guideline when it gets below 50, it means it's declining the health. And when it's above 50, it means it's improving. Look, it's gone 49? Okay, neutral. 43, declining. 39, worst it's been for a long time. So state of the economy when it comes to credit, as measured by the TransUnion index is not good when you look at that. On the other hand, they do say in the highlighted orange in the middle, the effect will gradually work out of the CCI over H2, suggesting this might be the low tide [ mall ], okay? So I don't know. We hope and it's a possibility. Certainly, our own predictive scorecard into the future has stabilized. So I don't know if it's going to improve, but they are forecasting that. And then Reon and his team have built a nice model to show you the bridge between trade receivable costs last year to trade receivable costs this year. So you can see all the components nicely laid out there. The gross bad debt went up by ZAR 260 million. There was a decrease in recoveries. Then we released provision, both periods and the impact of that. And the increase in income of interest, which, of course, is a benefit, but that's -- you'd expect it. We give credit because we charge interest. So those do meant to offset each other. And the growth bad debt actually went up by 26%. Slightly lower recoveries, but I think the book has gotten bigger. This also talks a bit to the health of our book. The number of active accounts has grown, then the book has grown, but it used to be 82% of the book were active, now only 80%. It means some of them are not shopping, or they're not allowed to because they were worse. Overdue accounts has gone from 14% to 16%, and you see the bad debts going 6.8% to 9.3% of accounts sales. So that definitely is showing that this is our biggest challenge at the moment. We hope it can stabilized. Of course, you can imagine we've got tons of strategies, and we work with consultants. And we never just accept these things, we are very busy on trying to use innovative strategies to manage this. It doesn't change our [indiscernible] because as I keep on saying, this is our DNA and interest free [indiscernible]. Market share of accounts is the highest it's been in 5 years. Some of you might not like that we are proud of that. That is what we're happy with. But -- and I can tell you, we are being more conservative than we ever have been in issuing new credit. The late-stage portfolio, this is the 4+ cycles. They badly [indiscernible] but seeing a similar pattern for May and June, slightly higher levels, you see. So it is deteriorating the late stage, it's not great. They have a long period of time, it looks like this, but the last since February '23, it's declining. But the actual net book, the new ones is surprisingly good. Actually that book is actually improving at the moment. And that is unusual. So you've got -- there's two things happening in [indiscernible]. That book is deteriorating the new book or the old barges, deteriorating the new book is actually looking like it's improving, which is, as I say, hopefully, we added turning point. This refers to our risk improved. But as you can see, there has been improvement in the volumes. 5 million last year. Applied this year, 5.3 million. And the number of approved and then the number ended up opening has also improved over the year, which is great. Just for interest, some of you worry about how the customer is. 46%, I think it's saying customers are under 29 years old. And 18 to 24 is 20% and another 26%, 18 to 24, 1 in 4 people who are plus open account is 18 to 24. And then 1 in 5 is 25 to 29. So half of the customers are underpinning, that apply. Our strategy aspirational fashion, we've already mentioned this. This is group now because it includes our made-to-order in Office U.K. It hasn't been doing well. It's been battling. It still is a key part of our strategy. We've taken new steps, and very early signs are that it's looking better. Of course, we like that for a number of reasons. But Office is doing very well. Supply chain, you know about our new DC. So it will be operational in January '25. And we're also obviously reengineering our warehouse in Kilmarnock, which is in Scotland, which takes us for the U.K. This is our new DC near the airport. It's a complex near the airport sort of looks like, it's been booked. This is what you will see, and that's the current state of it. So it's actually taken -- it's sort of a life base at the moment. When it comes to customers, omnichannel, we're very busy in the U.K. and South Africa with omnichannel. We're working on e-commerce, royalty, retention, new technology. Office is doing really well with e-commerce, particularly shop in the store or at home, using e-commerce, if you want to, using the technology delivered to your home or collect at store. Truworths and Office, both doing nicely. Truworths, as I said, small base but growing well. And that shows the contribution. And Truworths and Office in 2019 to '23, it's gone from 9% to 12% of our total group. We're always working on our customer predictive scorecards as part of our lives. But there's a lot of work going on at the moment, all about managing and trying to get better at managing the risk from a profitability point of view. So giving enough credit to drive additional profit instead of not. These are some of the new stores. This is this reimagined brand new one in the order front [indiscernible]. That was launched about a week ago -- two weeks ago, it's been great. That's what it looks like. It's got two entrances, one in the front, one in the back side. This is the back side. It's got LDT, Kids and Men's on the side, and Ladies on the other side. And there's some pictures of the inside, beautiful store, it really looks fantastic with great, wide entrances and fantastic merchandise. This is our first new store in the U.K. in 3 years and a new -- better see power station in London. It's the same better see more, if you want to call it that, which it is, it's more the head office of Apple is in that shopping center. So small [indiscernible]. We're the only sneaker business in the center, and this store is doing really well. It's been better than we expected quite a long way, beautiful store. And these are some slides. This is our [ Caribe ] Street store. We also finished remodeling this, been around a long time. It is our biggest office stores. These offspring stores that are larger, especially in [indiscernible] but this is our biggest office store. And even though, it was always our biggest and still is our biggest. It's performed remarkably well since the transformation, and this is what it looks like. The entrance upstairs, you go downstairs. By the way, the back part there that used to be [indiscernible]. So we're able to expand it in existing space value. That's because our stock management is better. ESG, there's a lot of work going on there. And I'm actually not going to go through that because we're short of time. And our ESG is all encompassing. We've tried to show some slides here that tell you about a flavor of what we do. But I mean, it's best you read through it yourself. And I can assure you, it's just a flavor. I mean, there's an enormous amount of thinking going on ESG in our business. And in this coming year, it's actually going to be included in our strategic targets for our short-term and long-term incentives, both in Office and in Truworths, it was becoming so critical the world. We remind ourselves to the United Nations Sustainable Development Goals, those 12 of them. We've identified 7 that are charitable and internal work should focus on. And these are they. And you can look at them in time, but we have got now assignments of projects to how we are going to intervene in our own small way in each of these. This is some more information of the work we're busy doing. And we support our own people. Of course, you can't only look externally, you have to go to our own people, many of whom have a tough life and a tough time. Our job is to support our own people very much in alignment with the society in which we live. Our charitable trusts, which are no longer owned by Truworths, but we [ enforce ] them significantly and now have ZAR 260 million in assets. So we distribute adequate amounts to support our endeavors, and we want to make sure that, that ZAR 260 million keeps on growing. So it's long-term sustainable. And we focus on all these things we've mentioned below there, health education, social development and the empowerment of women. We are a woman-focused business. So the empowerment of women and the protection of all that is critical to our lives, and we are very active there. And as you saw in the previous slides, that's all covered in our thinking in our program. And we're so proud of this. We say it because we really are proud. We are now the only company on the Johannesburg Stock Exchange that has been in the top 10 of the EY Excellence in Integrated Reporting Awards for 16 consecutive years, actually since the awards were developed at first, I used to talk about excellent category, and then we get to top 10. Since 2003, we've only been excellent every year when that's all we could be and in the top 10. And we are -- I think for a few years now, the only company that has been there every single year. And Deloitte is now a new auditor in terms of audit rotation. Group sales so far of 5.3% up in Truworths, 19.5% in Office going well at the moment. I know Truworths, it's a little constrained, but right now, it's looking quite promising. Trading space, you can see there our plans. That's projected to increase 2% for the year at Truworths and 10% in Office. Macro environment you know better than me, it's tough in South Africa. It's challenging in the U.K. Our job is to not accept that, but to say how do we live within the context of that, and that again is -- also, we live according to our business for us, which has stood us in good state to help us through this tough and good times. And we're positive about Office, who wouldn't be? I mean it's going so nice, and it's doing so well, and its positioning is more firm than it ever has been. So with that, I'm going to stop the presentation now, and I'm going to ask you for questions, and I'm going to refer these to my colleagues. I don't know -- while I do that Manny or Sarah, would you like to say a few words?

Yes. I think, Michael , thank your for the presentation. I just think it's been an exciting year in terms of the performance obviously in Office, but we are encouraged by the performance in Truworths. And from the merchandise side, sees a lot of opportunities that we can take forward into the new year. So that's exciting. Manny?

Yes, I agree with you, Sarah. And you can see from the presentation that we -- the focus in our business is fundamentally on the business philosophy, and we don't waver from that. And over the long term, it's proved to be good for our business. And although the times are not as good, I suppose, as we'd like because of the macro issues that we have, we somehow managed to navigate through these. And we deliver, I think, good performance relative to the macro conditions. If you look at this last year, our Office was a little slow in the first half, although very good and much stronger in the second. Although they were fighting some quite tough sort of performance in the previous this year. And then Truworths was opposite, had a good first half and then a slightly tougher second half. And so they sort of balanced each other out in a way. But we are feeling quite optimistic or, let's say, cautiously optimistic about this next year coming. I think it could be a decent year for us.

We don't know, but we pray. And we won't depend on prayer, we do the best we can.

So I'm going to go through some of the questions. The first one, please talk to the revenue growth in Truworths Africa, the first 8 weeks, was this relatively low growth rate driven by higher than normal promotional activity or not? No, I would say it's normal. And that time of year, of course, in July and August, you're hearing actually to January to June excess stock. We always have terminal stock targets. We can pretty much take it is given that we will always make them. And as our stockware will be clean, and it was normalish. Activity was pretty normal, as I said, in Office and in Truworths. And I think you should -- therefore, the way to judge it is from our gross margin, because if you think about it, we make sure stops clean always to the target. And to get there, you either have to somehow cancel the stock or head from markdowns. So the fact that our gross margin is what it is slightly down on last year, but pretty normal. That's why I'm saying it's normal. What is your view for provisions for bad debt the debt book for next year? Is the debt bad for next year? Do I think and there's many things that [indiscernible]? Well, I have to say to you, I think I tried to explained as best we could. Our view and our view of our risk department is that we are hoping that it has now stabilized. And over the next 18 months, will start to decline. But I genuinely don't know. We're not assuming that. We are working on it as if it's tough, and it's going to continue to be. Another question is congratulations on the result. What is your anticipated product inflation? This one, I'll give you Sarah. Please could you further expand on promotional activity in the [indiscernible]. This is quite a long one. It's all about promotional activity side, bad debts. It's also the same question on bad debt. Yes. This question is slightly different. So I'm going to ask one to Sarah, inflation and the second one to Manny. This question is sort of saying Manny, how can your provision seems to have stabilized, but your bad debt's still bad? So it's kind of like is that consistent wise, your provision sort of static or slightly better when your bad debt is so bad. So first Sarah on inflation. And Manny, you might want to talk to the get story and provision.

Thanks, Michael. Yes. So on the inflation number, obviously, this is always slightly difficult to predict because a lot of it depends on fluctuation in the currency. I think the point is in South Africa, we're used to dealing with that, and we have various mitigating strategies that we have in our toolbox to hopefully deal with that. So I would say we're looking at probably the upper single digits inflation going forward, which is slightly down from where we've been in the last half, but that's where it's looking at the moment. And yes, past the next 6 months is harder to predict.

Manny?

Okay. Thanks, Michael. They're really two different numbers. I mean the one is backward looking on what's happened, and other one is forward looking of what we think might happen. So we can't really compare them. I mean, we -- I can't say our methodology for calculating provision has not changed. So we look at historical performance, we look at the macro indicators. So we have models that predict those. And we look at the loss given defaults to see what our recovery rates will be on the gross bad debt. Those have been consistent with the past, and this is what the number is coming out at. So it's really a forward looking -- it's a forward-looking item as opposed to backward looking, which is what you see in terms of the net bad debt.

Next one is one of our competitors is rolling out stand-alone Kid stores. Do we see this as a threat for Identity Kids? Or is the target market is different? Look, every competitor is a competitor. So if you are a value-based business, it might be in a different target market in the sense that you're cheap. And we are aspirational, but you're still a competitor. So it's part of our community of life. Every single competitor that enters the market is still a competitor. The way we deal with it, whether it's ladies, men's or kids is always the same. According to our business for us to sell explorational products with red fashion and the best quality and with the best brands, and we own them all. So that's how we deal with the competition side. This is another question about -- I think I'm able to say the name, [ Shane. ] Is it having effect on us because they're in a different space, but are they affecting us? I don't really know to answer for that. I mean there's a lot of talk in the press about [ Shane ] and about our GTs are changed and so. It's the same as the former question. If it's [ Shane ] or if it's a local new entrant or it's a foreigner that comes and trades in retail stores, it happens all the time, and it always has happened. Our role is to deal with that. And except that, that is our enterprise role. Yes, this question is an interesting one, it says, if Office is doing so well and you're saying this lower hanging fruit, do we think at some point that it contributes the earnings of Office [indiscernible] Truworths Africa? So I don't know how to answer that because in a way, I would say if Truworths Africa does really fantastically in the next couple of years. Then I hope the answer is yes. So it sort of depends on how each does. I would hate it if it happens that way because Truworths was doing back in Office world. So my real answer is our plan is to deal with whatever we need to deal with, with Truworths Africa, which there is lower hanging fruit we've identified, and there are opportunities. But admittedly, it's a tough environment. If the credit comes right in the next 2 years, you will see quite a big change in my opinion. Office on the other hand tons of lower hanging fruit. Will that continue forever? I don't know, I hope so. So I can't really answer that properly. I don't actually have a direct answer to that. Let me see the next one. The next one is the same thing about Truworths. It's all about this thing of [ Shane], well your profit didn't really do well in Truworths. It is only neutral, 1% or whatever. So what do you see? And all I can say is what I've been saying all along. The bad debt is the big issue and the state of the credit economy is the issue. South Africa has shown over so many years and so many decade that these things are cyclical. The economy tends not to go at 6%, 7%, 8%. It also tends not to be in serious recession for a while. It comes to between 1% growth or 0.5% or 3%. And that's the space we operate in. Right now, it's constrained. It's likely, over time, in my personal opinion on what to expect, but that's my opinion to change, and then the credit side of the economy will improve as things do improve, which they do. South Africa is resilient. The population is resilient. And I do believe, therefore, this is cyclical, and Truworths will recover over the next 2, 3 years. And please, I hope to surprise you again. This next question is you're generating the best EBIT margins of a shoe company that this person is aware of in the U.K. Why do you think that is? Are you worried that the margins will go towards [indiscernible] and medium term? Well, you've seen with Truworths, this practice since we adopt seem to work well in South Africa. And then now we are applying them in the U.K., and the metrics are looking good. Well we ask ourselves, we live to our business for us. Why would we accept the norm as being what we must target? It doesn't make sense to us. We must target what we think we can achieve. So yes, my answer to is if we carry a running Office well, frugal in good and bad towns and yet adherence and never been frugal when it comes to application of our business for us, which is great product computer for stores with great people and pay them and reward them for it according to our values. If we carry on living to that mantra in the U.K., I cannot see why the margins should be average. To me, we should be better than average as we have been in South Africa. So that's the best I can do to that. [indiscernible] is now about kids wear growth, what's helping womenswear other than higher credit sales. [indiscernible] it just because of credit or is this something else?

Okay. So I think the credit sales apply obviously across the board. So I think we've seen some nice initiatives that we started in the women's wear space in terms of some risk opportunities. paying off and some of the focus areas that we've had on elevating our product and differentiating it, we believe, that in a way that is unique to the Truworths brands, I think, has helped that area to perform better this year, which we're very pleased about.

Unfortunately, I can't ask if the person happy with that answer. But in all these answers, I'm interjecting a little bit here, please feel free if you don't get your questions answered or you've got others or you want more clarification. Just write to our Truworths Investor Relations e-mail at risk. The panel of the people sitting here and 3 or 4 others look at that instantly, we debate it and then we respond with great [indiscernible] and as accurately as we can. So please don't hesitate to ask us any questions you want. What happened in menswear, this is quite a good questions and what are you going to do about it? Sarah, it didn't do so well.

Yes. Thanks for that. The main space, yes, we did have some challenges in the main space. And I think the strategy that I mentioned in terms of the approach to womenswear, we will be taking a similar approach now in a more intensified way with menswear. So in other words, the differentiation and elevation of our brands is an opportunity and continuing to look at spaces as Michael mentioned, where we feel we've got opportunity to grow into certain product types where we maybe have strength, but are still relatively small in the market. So we'll be focusing on that. And really, the utilization of our brands because we really believe we've got fantastic men's brands, the Daniel Hechter, Fuel and our Truworths Men brands. And so we're actually feeling quite positive about the opportunities in the men's wear space.

Thank you, Sarah. Reon, on this one, I'm giving you, it's a really good question because I ask that myself. It says if we did so well -- on to find a question again now excuse me. We had a, I think turn on equity. One of the returns was 48% and the target turning 30-something percent. So why is it so different?

Yes. Thank you, Michael. Good afternoon, everyone. Good question. I mean, we've had a very good year, Michael, obviously. Look, these targets are set once a year. We do revisit them and then are forward-looking. So we look 3 years into the future, most of the information that we have available at hand. We don't know what the future holds, so we take a stab at it. But one thing to also keep in mind is that over time, equity in the business grows. So there will be -- as equity grows, there will be a reduction in return on equity. But we had a very good year. So that's part of the exponential.

Okay. Thanks for that. So the next question here, I'm sort of trying to go through and every time I update, they get a bit mixed up, so I hope I'm not missing too many. How should we think about branded players in the U.K. being direct to consumer? And is it accurate to believe that brand apparels like Nike are reverting to push stock back through the remaining key distributors? So it's a very good question. I mean -- so if you get to understand the market in the U.K. when it comes to sneakers, but it's the world market, essentially, a lot of the famous brands are going direct to consumer with their own websites and the stores, definitely. [indiscernible] they see this an opportunity to enhance the brand. That means they're cutting back significantly on the intermediary distribution. So we are fortunate -- but on the line, we have to deliver. Our fortune is that Office is seen to be a female fashion business that attracts female fashion customers, that they do not normally attract in their own website and their own stores and in fact, in many of our competitors. So our attraction is the uniqueness of our profile. And they, therefore, almost spoil us because we are the target they are trying to build. And because of the diversity of product wherever in our store, no one can really emulate that, they've brands, and we have sneakers, they're different. And we have our own NPL. So our mix is what appeals to them. So this trend is accurate that you are asking about, but it plays to our favor as long as we can carry on delivery. And that's why we do with new stores and all those other stuff. They then spoil us. When it comes to -- your second part of the question is, do you think it's going to continue to be like that? Well Offspring is a different business to say because that's the other one. Offspring is not -- because that's massive as well in our assets. And we estimated ambiguities that's separate from Office. Offspring is sneaker fest. In other words, that is female/male sneaker obsessed with sneakers as a culture. And there, we really are permanent. We are the sort of lead player. And in fact, some showed that it's very big in soft ridges, but we also have a couple of other smaller stores that nicely. But we're opening up a real great big store. And I don't mind saying it's going to be in King's Cross in London called an Offspring Neighborhood store. And that's going to be happening in the next 6 to 9 months. So it's two niches that are not mainstream and somehow they protect us in that market. Truworths appetite for acquisitions in the next 12 to 24 months, what funding capacity is available for the past? Our appetite's there, last 12 months, next 12 months, U.K. and in South Africa, we look at 20 businesses, we get quite far advanced offshore and locally, even recently in negotiation to -- on price after we've decided on alignment business philosophy in the U.K. and South Africa. It seems to come and stock often on the price side and the value, and we're comfortable with it. We get quite clear on -- it's not our capacity because we -- the banks and our shareholders are sort of encouraging that we've got a lot of cash attention. It's more to do with whether or not we should take shareholder funds and invest in a way that we think, in our opinion anyway, is unwise, if we look at the prospects of the business and the value that they're asking for, and that's why it hasn't happened. But yes, appetite for sure, and some will get quite less. Bearing in mind at the same time, in office, we're looking for internal opportunities. So Office, [indiscernible], a lot of lowering fruit to these new stores. And a cost a lot of money, very high generated returns from that one. And in Truworths, I won't say much more than saying, in Truworths, there's a lot of work at the moment. I'm investing in stock and creativity, in product categories that we perhaps signed, we're not doing what we should. Manny, this one, you can look. Do you -- because Manny loves this subject. Do Truworths have initiatives to use AI in operations, call centers, collections?

Okay. That's an interesting question, and I think quite pertinent. So we are looking at AI. We haven't actually launched anything AI wise at the moment, but we're looking at it across the number of areas, including the call center collections and a couple of other areas of the business. So it's something we're investigating and hopefully, we can do something fairly soon on it.

Then, Sarah, this one for you, it's about beauty. This person knows the RLC numbers. They say it's growing, the beauty in South Africa. They say, gross is about 15%. That's why I know that I can give this to Sarah, she runs an internal project in our business to identify these sort of opportunities. More than a normal job, this is a strategy, how do we find these opportunity areas, and we have always do that. And therefore, beauty, this is how we do on beauty.

Yes. So thanks, Michael. So yes, we've been happy with the performance of the beauty area in the last year. We have seen some growth, which has been exciting. I think in our business, we always have priority for our brands, but we vary the cosmetics. And beauty component is obviously a critical part of fashion. And so a very important part of our total Emporium offering. So it has been very nice to see that growth. And obviously, we'll look to capitalize on improving that growth and that market share in the year ahead.

The next one is quite interesting. This is addressed to me personally, and it's really polite, so I'm going to do the best to answer it. Because it's a very president and valid question, this is well done on the consistency of the Truworths message. Could you please elaborate on your own, I assume it's buying, day-to-day functions in the business indicating where you -- I think I'm being addressed personally have no direct impact and where you have a great impact, focusing on the buying and selling of merchandise? Thank you. I think the question, if I'm going to you understand it properly, you say to what extent do I personally influence the merchandise on the buying. And I would say that, I mean, it's an interesting thing how we work. Sarah is -- that's her baby. She is responsible for it. She manages all of it. And my role is supportive of Sarah in the sense that I'm involved in the strategic decisions. Operationally, we interact a fortune. Sarah is quite capable of continuing to do what she does without my involvement. Hopefully, I make a contribution by my activity with this. But in the end, Sarah and the team run the buying and make the decisions. I do attend a lot of merchandise sessions, and I have a say and I contribute. But that's because that's my role, I contribute. But I'm not the decision maker, Sarah and the team are. And it's an interesting thing because under Sarah, there are a couple of directors who've been with us for 15, 20 years. We had dinner last night with the non-execs. And I think there were 25 execs there of ours, all in their 40s, some low 50s, excluding me, [indiscernible] others, of course. And it's interesting because I think the lowest serving full year had been 12 years. We got a kind of a thing, most are 18 and 19. They all had have experience in merchandise and merchandise planning. And Sarah runs that team. They can operate independently. Sarah is off, they'll also carry on. If I am not around, they carry on. But yes, we, for sure, contribute, of course. If I wasn't here, they carry on without me. This is the best I can answer. Thank you for the question. What happened with the taxi strike? Sarah, you tell us. Taxi strike, what about -- how do we deal with it? Because -- give us some color on what impact was in that time and how you approach the compensation of employees in events like this?

So yes, the taxi strike, I think, fortunately, in some ways, obviously, it was Cape Town -- limited to the Cape Town area. And ended up not being a particularly long period of time. But obviously, it did cause disruption during that period with the factories and the DC and obviously, people getting to and from work. From a logistics perspective, I think we were able to recover very quickly. So our suppliers and our DC were quickly able to work over time, and we were back to normal within a matter of days. So there was no significant impact. And I think in the same way, whilst there were challenges for the staff getting to work. Because the period was shortened, we did whatever we could to it's easier for where we could make it easy for them to get to, but we did so. But the reality is, in some instances, there was an inability for people to get to work over that period. And I think that's unfortunate. But it's not really much we can do to control that part of it.

I'm going to try and wrap up because we are way past 2 o' clock. So I've got two more questions, I'm going to try and answer. I don't think I've missed any, but please, as I said before, I feel I have, just send us a note on Investor Relations. But this, the one is share repurchase reduced. Is this a function of the high CapEx of the DC only? Or was the view that the share is now becoming less attractive for buybacks? So just to answer you with that, we always have a very conservative approach to cash flow. We -- I don't like that, and our Board is understanding of the fact that in the retail business, you get into debt. It might be good for balance sheet ratios, but it's got risks that you don't want to have in a retail -- we don't want to have. So the fact is where we get and we're going to be a bit because of the DC and the credit. The collections have been come in the way we want it. So I think we're ZAR 800 million in debt. But I mean, that will get wiped in next year or 2. But -- so we don't buy batches because we haven't got excess cash. But I can assure you if we got excess cash, we will still buy back shares even if the share price is ZAR 100, because our role is not to sit and nurture cash, it's to do something with it or give it back to shareholders. Yes, when the share price is ZAR 30 because everyone is negative about it and we think it's an opportunity. And we've got spare cash, then we will be more aggressive. But we don't stop because the share prices, we don't play the market. And then the last question that I'm going to put you is, Manny and Sarah, both have the ability to answer this. This -- what do we think about Office? There's a lot of questions about Office trade, the first 8 weeks are so good at 19%, why? It doesn't make sense in the marketplace. What's so unique about office? Well, I've sort of answered that before, they seem to want flavor of why Office is doing so well in a market that it shouldn't be doing so well. So I think both, Manny and Sarah, you might want to comment because you both -- they've been so involved in office. The Office team and the IT work so well together. We have a great relationship. So Manny and Sarah and Reon for that matter and many of us worked very closely with Office equivalent execs. They help us, we help them, and we don't call it them and us anyway. So Manny, we might have with you and Sarah.

Should I go Sarah?

Yes.

I mean I think what we've seen over time and time again is that the sneaker market is actually very resilient to macro headwinds, if I can call it that. And people tend to want to complement, they look for the sneaker. And for some reason, it stays resilient, and we tend to get the right product in our stores. We're well supported by the major brands, and that makes a massive difference to our business there. Sarah, I don't know if you want to add anything.

Yes. I think from my side, just to say, in the latter half or the latter second half of last year, we came up against a strong base in Office. But -- and so we were imagining there might be slightly tougher time this year, the '23 year. But the nature of the product, as Manny has said, has shown resilience, so that the strong sales that we saw in the second half of the year continued into the weeks of the new financial year. And I really think it's as the store base has been reduced, but in the reduction, quality of the base has become much better. And so we are -- the strength of the relationship with the brands is getting better and better. And that's assisting us in putting together a really nice range of sneakers.

Thank you. So I said that was the end of it. But I see there 3 new question -- 4 new questions. They have all come back to the same thing. So I'm going to answer that, then I'm going to end. It's all about stock and our stock levels and whether we're happy with the stock levels in Office and Truworths assumed together. And what portion of stock sourced locally and the government, the comment is to what extent is the [indiscernible] considered lack of support by government again duties on imports from Madagascar to [indiscernible] for example. . So what I'm going to say is about 40% to 50% of our stock is sourced locally. We are very invested in the local market. Of course, it's a good thing to be invested in the local market, because the country needs employment, right? And we put a lot of effort into that. As I said before, we've got basically a factory now in ahead of us, but we also own a factory. But besides that, it's all about quick response and the ability to be fast fashion and turn on stock weakening speedily, which you can do with local. So this is not about government duties and subsidies and as government that has to support us. I think they were trying. I mean, it's a difficult situation. They've got loads of money and how do they do it. So they do collaborate with us, they do have a master plan, we do talk to them frequently as through the NCF, national clothing retail federation. And we try best and I think they do. But our reason primarily for having a local manufacturing base is because it's suits us for quick response of prospection, and we spend more and more time and momentum in ensuring that won't change. Yes, our stock level is a little high if I'm honest with you, our Truworths is fine. I still think we can do better in Office. We've improved it a lot over the years, and it's quite hard to manage when they're doing so well. They want to buy more stock, and how do you manage it? It's not easy with the brands because I can't turn on stock, if it's not your own stock in the same way as you do with MTO and our own brands. But I do think we can and we will, over the next 3 years, probably improve the stock turn in Office even a little bit more. But generally, I'm pretty happy with that I would say. So that's some -- the best I can do, and we haven't got a lot of time, and we've already gone way over the time. So I'm going to thank everyone and my colleagues for participating. And finally, invite you once again to send us any notes you want, and we'll respond quickly. And if necessary, see you if you have any queries. So thank you very much for taking the time to join us.