Turners Automotive Group Limited (TRA) Earnings Call Transcript & Summary

Okay. Good morning, everyone. Welcome to the Turners Auto Group Half Year '22 Results Presentation. If I could just get someone to raise your hand just to give us an indication you can hear us all okay. Great. Thank you very much. Appreciate that. Joining me here today is Aaron Saunders, our Group CFO; and got Greg Hedgepeth along as well, who's the CEO of the Auto Retail division. And today, we'll just take you through the half year results, and then we'll open the call for Q&A at the end. Two options around the Q&A. You can either use the raise your hand function when we get to that point and we can open up the audio or just use the actual Q&A to type in a question, and we'll answer it anyway. There is always a slight technicality around these things. Let me -- so in terms of today, we'll just give you an overview of the first half through the results, we'll drill down into the segments, and then I just want to put our business into a bit of context as well. And then give you some color around how we're seeing the outlook over the next few months. So, yes, let's start with the overview. And as the slide title says, we've been able to achieve significant growth in the first half despite the obvious challenges that we've had around lockdowns. Yes, we felt we've seen another step change in the business performance, even up further from the very solid second half set of results that we had in FY '21. Our first quarter was outstanding before the breaks, executed the plan really well and truly applied in mid-August. We ended up with net profit before tax 24% ahead of last year as a reflection of the quality of the winning business model, the quality of the people that we have in this business and the improvements that we are continuing to make. Whilst there is still uncertainty around the level and breadth of COVID restrictions, based on our experience over the last 2 years, we do know that as these restrictions ease, our results should improve in line. We also feel our competitive advantages are continuing to build, and this gives us good confidence about the medium-term outlook. We're pleased to say that we are on track to exceed our 45 million medium-term NPBT target by FY '24. A few comments around the New Zealand car market to start with. I mean, the impact of the lockdowns is sort of very obvious on this graph. And we're pleased to say that Auckland transaction levels are now starting to recover. However, at the end of October, if you looked at the total New Zealand market, used car transactions are still sitting well below that of 2020 and 2019. And I think it's important to remember those numbers in the context of our results. And in contrast over the last month, Turners has managed to exceed October 2020 sales, and I'll discuss that in a couple of slides. Our supply remains constrained and that is definitely impacting fringe operators and we're seeing that with the registered dealer numbers be at the lowest level in the last 5 years. I won't go into too much detail on the slide, which is obviously available on the presentation and on our website. But the key points, reported net profit before tax, which was basis for our full-year guidance, has increased 24% to 23.2 million. And normalized earnings are up 55% to 24.5 million. Probably, more importantly, I was keen to share some insight into how we're going in the early part of Q3 as shown in the far right column and also just moving on to the next slide. So this is just a view into our monthly operating profit by calendar year. And in auto retail in October, vehicle unit sales, as I mentioned before, we're sitting well ahead of the same month last year, so October '20. In finance, we've seen new lending materially ahead of October '20 levels with arrears continuing to track at historic lows. And insurance, new policy sales, again, well ahead of October '20 levels and claims levels below our expectations. And in credit, we've seen debt load recovering, but collections actions still quite significantly restricted, particularly in those impacted lockdown regions. As you can see from the graph, despite the Level 3 lockdowns that we've had in Auckland, Waikato and some restrictions in Northland, we've seen much stronger-than-expected trading from these regions, but also very strong market kind of activity outside of those locked down regions, which has certainly helped support the results and reminded us and I hope you about the great geographic diversification that we have in this business. But I mean, the short summary is that the recovery -- the early recovery is very promising and to end up with an October profit result substantially ahead of last year is a super outcome. Just moving on to the '22 results, so H '22 results. So we've covered these results previously so I'll sort of move on to the detail. From a revenue perspective, you had good growth, solid at sort of 13% year-on-year, and largely that's driven by the market share gains we've made in Auto Retail in the first 4 months of the year. Finance revenues have grown off the back of the loan book growing and good market share gains, particularly in the premium lending segment. And as you'll see in the next slide, there's certainly a strong margin component to the story as well. So yes, this is very much about solid margin improvements in all our 3 auto-related businesses. And on average, we're seeing a more than 30% increase in net profit before tax across those 3 businesses. Auto Retail has benefited from our focus on sourcing and sourcing smarter, and that's being reflected in our market share and margin gains. Finance growth has come from writing high-quality new business and the resulting improvement in arrears, and insurance reflects the improvement in the claims and cost base. Credit management contribution has been directly impacted by our inability to collect in those locked down areas. There has been a significant improvement in our underlying profits, which is due to margin improvements, market share gains and the efficiencies combined with the improved group resilience in lockdown trading conditions. We did sell the lump of our MTF shares back in Q1. So we sold those shares back to MTF, and we think, yes, that's been a really good outcome for MTF and for ourselves. And we do expect to see a very clean set of earnings in H2 and not anticipating any material one-off transactions to impact those results. This is absolutely the sort of graph that you want to be able to show, and I think it demonstrates very well a strong track record of dividend growth that we've been able to deliver over the last 8 years or so. We've declared our first 2 dividends for the year, both at NZD0.05 per share, so to NZD0.10 for the year-to-date, and we're projecting full year dividends to be at least NZD0.22 per share based on our guidance. And there is a return of just under 7% based on a NZD4.40 share price, so it really is an exciting year for shareholders. There has been a huge amount of change in our balance sheet from last year. Inventory levels have remained pretty stable at around that sort of low 30s and has been for some period of time. And we've been very focused around our sort of processing times in our stock too, which is enabling us to keep those inventory levels at that level. Receivables have increased off the back of our loan book growth in Oxford, and there has been that corresponding increase in our borrowings to reflect their growth. Probably, the other thing to point out is just that property has increased with the acquisition of Rotorua in Nelson in the first half and the completion of the Otahuhu site. Things to note in funding is that we have repaid the corporate bond that we had with a new lower-cost term loan facility from the ASB. So we're getting great support from our bankers, BNZ and ASB. And we've also commenced the process now to term out our securitization warehouse to third-party funders. And that process is underway, and we're just sort of targeting Q1 for a transaction next year for that to be completed. We always like to take this opportunity just to remind shareholders about our funding, and just that nearly 80% of our funding now is dedicated to the finance business. So moving on to the segment results, starting with Auto Retail. Revenue was 20% higher at 115.1 million, and really, this does reflect the very strong sales that we had prior to lockdown. The Tina brand campaign is working really well for us, and we're seeing very tangible improvements in both buying and selling leads coming from that investment. One of the things that we're really pleased about is our market share growth, and we've seen that market share of retail sales continue to improve and margins have remained elevated as we continue on our quest to really source smarter. And on Sourcing Smarter, we've talked a lot about our -- what we think is a very strong competitive advantage that we have in the sourcing area, particularly compared to others in the used car space. And I think there is 2 great examples of this. Firstly, that we've ramped up our local buy, and that is 30% higher than it was this time last year. And secondly, we've had a significant sourcing when with the fleet partners awarding us an additional approximately 3,500 units of high-quality stock to sell per annum for the amount of consignment. So that is a big win for the Auto Retail business. And the team, the team here have been working really hard around our sales process and sales training and resource dedicated to the finance add-on sales. And those are going very, very well. We've been able to lift our cash rate up significantly from sort of high 20s up to well over 36% in the first half, which is great to see. We talked quite a lot about the branch expansion and I just wanted to give you a little update on Rotorua. So you can see here, that's a shot of the branch that's open now and operating. The big white building you can see here will be remodeled effectively and redeveloped over the next sort of 6 to 9 months. But we're up and running, and we're really pleased with the early results from the Phase 1 opening. I mean, the site is still sort of partly operational, but really have sold just around 70 units in October and on track for another significant lift up from here in November. So early signs are very, very good. This is a repeat from our Annual Meeting slide on property, but I did want to remind shareholders just about the significant property asset base that we're building and the unrealized gains that are associated with this property asset base. We've made a further acquisition since we last updated you, which is at Napier. And that acquisition will allow us to double the size of the operation -- the current operation in Napier. So that property settles at the end of 2022 and we do have another -- a number of other opportunities in play, and we'll update you on those when we are able to. Okay. Moving on to finance, here really, really good momentum, another strong 6 months of trading performance from the finance business. Excellent growth in the loan book with new lending up 57% over H1 last year. And the quality of our loan book just continues to improve and correlates strongly to the improvement that we see in the arrears metrics. As you can see from the little table down on the bottom right, unsurprisingly, we have been dealing with more hardship applications through the COVID lockdown period. But I'd like to just point out that these have peaked at less than 1/3 of the hardship customers that we've had during 2020. And already of those sort of 511 that were at the end of September, we're down to kind of less than half of that in terms of the current number that we have under hardship. So half of those 500 have rehabilitated already, which is great to see. Insurance revenue decreased slightly over the period, and that's due to the impact of reduced sales in those lockdown periods. The market share of Autosure insurance in the auto space is significant sort of around that 50%, so they are impacted more significantly with fewer cars being sold. However, segment profit was up 28% to 5.8 million on the higher margins. And this is due to our reduced overheads and lower claims than expected. Our operating cost ratio has seen further improvement over the half. And one thing to point out is that looking forward, we do expect to see some claims cost inflation, both in labor rates and parts pricing. And we expect our policy pricing to increase as a response to that. In the credit management business, pleasingly, we saw our debt load improve around 9% over the same period last year, so that is giving us some confidence about the run rate going forward. And this was largely due to more debt load from the New Zealand corporate customers that we have. The extended lockdowns in Australia definitely had a significant impact for this business in H1, and we expect that to improve as those restrictions have eased in H2. Credit management remains an important part of the diversification strategy in the business and offering huge, if we did experience an economic downturn ahead. And I just want to congratulate Matt Gannaway and the team down there, they've done a great job of managing the cost base in a reduced debt load environment, so that's a really fantastic job. Just a couple of slides now around sort of putting our business in context. And I wanted to start with sort of explaining something that we call the Turners flywheel. Really, kind of our business starts with sourcing smarter that unique combination of consigned in own stock, but like any retail business, the money is made when we buy. So using data and tools to make better buying decisions is kind of the platform for success in this business. The more cars that we can sign like the Fleet Partners deal we just talked about, the more cars that we're able to buy locally, in particular, the more attractive cars that we have advertised. And the more cars that we have advertised, the larger the digital audience we can reach, and the better the rationale for more branches, particularly with our omnichannel approach. And that scale gives us more reach and more market share. And more retail sales provides greater opportunity for add-on sales for Oxford Finance and Autosure Insurance, which in turn leads to that higher transaction margin. Greater transaction margin makes us more competitive at the sourcing end and it enables us to pay fair prices for cars, and so the flywheel starts again. Over the last few years, we had deliberately built this flywheel and it is very much now in motion. Over the last couple of years and particularly up to July this year, we've really started to see the combined and coordinated fit of this flywheel, and we feel that we can regain that momentum as the lockdowns ease. Another key part of our strategy that we've talked quite a lot about in the past and I just wanted to kind of put that in a broader context for you is about our omnichannel approach. There is a lot going on in the global used car segment and represented by the left box, traditional used car selling is highly fragmented and quite slow to adopt the digital kind of customer experiences, which we are able to deliver now. And more recently and represented by the right box, we've seen new disruptive operators emerge. Some of them come and go, particularly those in the digital peer-to-peer marketplace. And then here, we've seen pure-play digital-only used car operators getting traction. However, our digital market shares remain only a small fraction of the large omnichannel operators, like CarMax, who are placed at the intersection of these 2 models, and continue to perform well with both profit growth and share price performance. At Turners, we are also very much deliberately at this intersection. We strongly believe that the winning strategy has to be completely customer-centric. We give the choice to the customers of how they want to shop for their cars. We do this by providing an omnichannel platform with a mix of both physical and digital. The customer then chooses along the spectrum from one -- at one end, whether it might be an in-person, at-branch experience with lots of help from our people or completely remote and online and independent from Turners' people. Ultimately, we have many types of customers, and they can choose the mix of experience, which suits them best. We've kept [indiscernible] or they are being unable to. This is particularly true in the digital space. Many of the fringe operators are unable to hang in there and then with the industry. Registered dealers are at the lowest level in the last 5 years. Despite the COVID lockdowns, we've continued to develop our competitive moat, which is positioning us for an even stronger performance in a more normal operating environment. COVID has absolutely been a stress test for this business. The Turners' team have responded brilliantly, and we are optimistic about the future, which is a segue into the outlook. You will remember we took the time to lay out a plan for getting the business to 45 million in net profit before tax by FY '24, sort of medium-term target that we communicated to shareholders. And in the first quarter of the year, as you could see from that operating, monthly operating profit side, we had genuine momentum. The Turners' flywheel was spinning very well, and despite the lockdown, we are even now more convinced about our ability to overachieve on that FY '24 target. We do plan on updating shareholders at the Annual Results Announcement, so May next year on that 3-year plan, we'll give a sense of kind of where we sit then. Results in October and trading so far in November are certainly above where we thought they would be when we were forecasting back in August and September. And assuming the current restrictions do continue to ease over the coming months, we expect full year net profit before tax for FY '22 to be in the range of 40 million to 42 million. Based on the current dividend policy, that would translate into a full-year fully imputed dividend of at least NZD0.22 per share. I just want to take a moment to thank the wider Turners' team for their efforts in the first half that has been challenging, but they've all proven to be resourceful and adaptable and engaged in this business, and particularly those teams based in Auckland and Waikato and Northland have been dealing with extended lockdowns. And before we sort of open up for questions, I just wanted to show the side. So this is a photo of Malua Tipi and his 2 girls. They were one of the first lucky winners of one of the 3 cars that we gave away to help with the COVID vaccination drive. We've had very successful partnerships with TV3's project and the Wheel of Immunity and also NZME with their 90% Project. And I'm really proud of what we were able to do to help people getting behind their vaccination effort.

Okay. With that, we'll open up for questions. So if anyone wants to ask a question, you can either ask it in the Q&A function or if you'd like to answer it in person, we can unmute you if you just raise your hand. So there's a quick first question from Richard. As we move to a large adoption to EVs in the mid- to long-term future, are you monitoring the public uptake question? Is there a danger, given a sudden change in legislation or reducing prices of EVs that you might be stuck with a large inventory of older petrol cars that might be difficult to sell? Greg, would you like to take that question?

Yes, sure. Yes, we absolutely are monitoring EV registrations. And they are obviously starting to lift up with the change in legislation. I think the key challenge there is actually around the availability of EV stock, whether it's new or used from overseas. So I don't think we're going to see a sudden flood of EVs in the market. If anything, it's going to be a slow gradual incline over the years. So I think for the foreseeable future, we are comfortable that gas vehicles will still be the predominant share of the market and that we don't have any risk there of effectively getting caught with that stock holding of those vehicles.

Yes. If I could just add to that, we're a high-volume state of sale type model, and we would turn over all of our stock within about 2 months. So a down to be a short period of time here.

Yes, so the risk is negligible I would say that we are certainly monitoring that space very closely.

Yes, we do have quite a significant number of EVs in our vehicle subscription fleet as well. So it makes up around sort of 40% to 50% of our vehicle fleet in subscription. So we're getting some quite good experience through that subscription fleet. The next question is I'm still not sure that I see Turners' competitive advantage in funding the finance sector, which uses a lot of balance sheet and requires significant funding line capacity. I thought you'd be looking at selling this. Aaron, do you want to take that?

Yes, that's correct. We went through a strategic review a couple of years ago, which essentially gotten us to the point where the integrated model we feel adds a lot of value. So our feeling in terms of our funding is that we are as competitive as the bulk of the kind of specialist vehicle finances in the market, more competitive than some. And we're very close in terms of funding cost and the like, so now we can really see that we have an advantage at the origination in that 20% to 25% of our business is captive and comes out of the Turners' Auto Retail channel. So we feel that, that gives us quite a significant competitive advantage.

I think the other competitive advantage that we have is around our risk pricing strategy, which just has more layers to it than typically our competitors do. And we've got some further kind of innovations to that pricing strategy coming up. And it just enables us to be much more targeted around the pricing that we can see, particularly for the risk segments of borrowers that we're looking to target. And what underpins that is that we've been a very early adopter and have great understanding of comprehensive credit reporting and the scores that are associated with it. So I think we are one of the leaders in the market around our use of that data. Okay. Next question from Grant Lowe. Grant, thank you for your -- thank you for that, great result. Finance receivables are up 40 million in the first half versus 40 million target for the full year. What is the key driver of this lift, attach rates, new dealers on board and where you take from here? Yes, well, the key driver of that lift, Grant, is one is the attach rates and the Turners Auto Retail business has certainly helped drive that loan book growth along. And the other aspect of that is the third-party originators, we are getting a bigger share of those third-party originators. And I'd go back to my comments that I was just making around our risk pricing strategy of what's helped that. Plus, we've put a huge amount of effort and focus into the turnaround times around credit decisioning. So some quite smart things that we've been able to do from a technology and system point of view to give those third-party originators and the guys in the Turners' Auto Retail business much, much quicker decisions. And fundamentally, that makes a big difference to those originators and that's the big reason why we're getting a bigger share of the market. Next question from Grant is how do you see net interest margins tracking going forward in light of rising interest rates? And what are you doing to manage that? That sounds like an excellent question for the CFO.

So we hedged around about just over 50% of our exposure, so we've got a reasonable amount of protection there on the book. But essentially, I would expect NIM to come off slightly as interest rates rise and we raise our pricing, but there's always a bit of a catch-up effect, as you raise prices in a rising interest rate environment. So I would expect NIM to come off a little bit. And the flip side of that is that the quality of the book has improved significantly. So our impairment and credit provisioning costs have come down significantly as well. So we feel confident that our net interest margin after credit losses and impairments will remain relatively stable, perhaps slight tail off with some offset from the growth in the receivables ledger. Part of our strategy to introduce third-party investors into our warehouse securitization funding is that they will free up some more capital which will enable us to grow that book further without deploying additional capital of our own. And therefore, we'll get some scale benefits in terms of funding from that respect.

Okay. Next question from Grant. Any new store locations in the pipeline? Yes. So, I mean talk about the Napier acquisition, so part of the extension plan is not just about being in new locations, but expanding some of the existing locations. And others kind of in the pipeline, Grant, and not that we can quite share exactly with you the details of that right now. But when we can, we certainly will. And obviously, we have Rotorua to come on stream in a kind of full mode or full operating mode, still, I mean, Nelson to come as well. So there's a reasonable pipeline of development work for us to do. Next part of your question, things have been going very well. When the things start to normalize in terms of supply, claims, economy, where do you see the biggest risk? Aaron, do you want to take that?

Yes. I mean, in the near term, I think the biggest risk is still COVID related and that as hospital systems get overwhelmed, there's a chance we'd be back into quite strict lockdown conditions. And a slightly lesser risk, but I think there's some uncertainty as to how the country will adapt to a COVID-endemic situation. So business has been very, very robust outside of Auckland and Waikato. But I guess, just what happens when COVID is a part of the everyday life of people in the South Island and the lower North Island, for instance, is still quite uncertain. Aside from that, it's the usual sort of suspects. A big surge in unemployment would create pressure in the finance company. It doesn't look like that's the biggest risk we're facing at the moment though, given where unemployment numbers have been trending even through this lockdown. So yes, I think that there are some headwinds for this business, how the country adopts to a COVID-endemic environment. Interest rates going much further than perhaps people think they might with inflation getting away from people. So -- but other than that, I'm not sure that we're really -- it's just kind of a business-as-usual situation.

And the last part of Grant's question was guidance of 40 million to 42 million implies 18.8 in the second half versus 21.2 in the first half, excluding MTF. How did you come to this range and it appears cautious and conservative? So there's kind of a couple of things going on in here?

Yes. I think we've probably been a little bit conservative. The big uncertainty for us over the next few months is really, as I said, how the rest of the country adapts to our COVID-endemic environment, and whether that does impact consumer confidence and the regions that haven't been dealing with COVID on a day-to-day basis. And that's the reason for a little bit of conservatism in that forecast. But you're quite right, last 12 months profit is around about 42 million.

And there is a first half, second half fee as well...

Yes, that's right. There's a seasonal impact in the business, particularly in the Auto business, because in December and January, you had 4 weeks of overheads, but really only 2.5 to 3 fully trading weeks. So this was a slight sort of seasonal deterioration for second half compared to first half.

Question from Kieran at Craigs. Could you please add some color as to what you're seeing with Auto Retail margins and how you expect this to track in the second half of the year and into FY '23? Aaron, do you want to take that?

Yes. I wouldn't say that we've really enjoyed a massive jump in margins. Certainly, used car prices have risen, but our objective is, as always, supply and sell in the same market. So as I said earlier, we turn over our stock every 2 months. So in a rising environment, we get a little bit of a gain through that 2-month period. And if car prices were to come off, we'd see a little bit of a drag over that 2-month period, but we can adapt fairly quickly to the market. But because we are pretty much buying today and selling tomorrow in our local purchases, we're buying in the market that we're selling in. So whilst margins have firmed a little, it's not like that really jumped out of the park. So I see for us a fairly stable margin environment going out for the next sort of 12 to 18 months.

And Greg, maybe just to cut some comments from you, so Kieran just asked around can you update us on how long you expect semiconductor shortages and supply chain issues to last?

Yes, from what I understand, it's going to be at least another year or 2 of the similar situation. So for us, that's not necessarily a bad thing. But the stock situation that we're seeing in this country is helping keep used car prices high and our supply lines are pretty strong. So we don't have any fears around the semiconductor shortage situation. In fact, it probably works in our favor. So as Aaron's point around the next 12 to 18 months, we certainly see it being in a similar situation of what we're seeing today.

It's fair to say, Greg, and I think we have a view that used car pricing is going to remain at elevated levels, whilst these supply chain kind of disruptions are on, plus the sort of overlay of some of the government regulation that's coming into play around cleaner cars coming into the country and things are just kind of helping keep those prices up.

Yes, absolutely. I mean, the stock shortage is one thing which has got to turn the prices to a certain level. The legislation changes have the potential to push them up even further to be honest, the cheaper stuff that's coming into the country fresh, so all of that is, I guess, positive in regards to the pricing levels of the cars that are in the country maintaining or even lifting them on further.

Great. Thanks, Greg. Next question from Roger. We've seen how The Briscoes Lady has been incredibly valuable at building the Briscoes brand over time. And it's clear that Tina personality is working well. Have you got a long-term contract with the lady of a personality tender? This is a question for you, Greg.

Yes. It's something that we've just been there talking about and in discussions. And obviously, I'm not at liberty to kind of share those the details in this forum, but yes, but that is something that is currently been worked on at the moment. And yes, she is working very well for us and brand metrics, lead volumes are significantly up, and that campaign is exceeding our expectations. So it's something we're looking to continue for the foreseeable future.

Okay. Another question from Kieran. Can you see credit management getting back to pre-COVID levels of pre-tax profit in the next couple of years with lockdown restrictions easing across Australasia? Well, I think the short answer is yes, Kieran. It may take some time, and it is going to really depend on kind of what the economic cycle looks like. But yes, you have to think that, that business is heading towards a more supportive environment for that type of business. And the next question from Kieran again, do you expect that first half '22 earnings run rate of circa 4 million per month is sustainable in the medium to long term. Do you want to take that?

Yes. I think, as Todd indicated earlier, we'll be recutting our medium-term forecast at the end of this year. So I guess, I'd prefer to keep our power to short-drive when we actually go through that exercise. But we've got confidence that a lot of the initiatives we've put in place over the last 12 to 18 months are delivering higher margin and higher market share. So looking at the underlying metrics of the business, I would have to say, yes, we've got a lot of confidence in our growth runway.

Okay. I think it's -- that is the end of our questions. Oh, no, we've got one more current. Oh, [Mo], strong finance attach rates in the half, where do you think they settle? What's the stable rate? Any movement in the competitive environment in terms of originators using competitors? Yes, I think we can do better. Greg and his team sort of targeting that next kind of milestone at 40%. And I think that's going well in the realms of being achieved sort of over the next sort of 6 to 12 months. And yes, I think that feels like a stable rate to me. And I'm not quite sure about your question, but any movement in the competitive environment, I mean, what we've seen, yes, is probably over the last, call it, 8 to 10 weeks as pricings start to move up. competitors, I think you did see there 3 price rises now with 2 in our sort of underlying rates. Others sort of 1 to 2 price increases, so things are definitely kind of on the up in terms of pricing. But yes, that would be the kind of biggest change. Everyone is getting prepared and ready for -- there's quite a big regulatory change coming up on December 1, and there are some changes to the CCCFA. So I think that change is going to provide some more opportunity for the auction business in terms of how we are dealing with that. So kind of looking forward to the next 6 months and the finance business to see some of the things that we've got in play, delivering what we're delivering some further growth. Okay. Let me just check here again. Another question from Mo. Brand is getting well known, it's strong. You mentioned trying to leverage that into other opportunities, servicing repairs, et cetera, any further thoughts on that. We've had some thoughts on deliverables or actions out of that yet. I think we feel like we've got enough opportunity sitting in front of us at the moment in the core parts of the business without sort of delving into that right up in the short term. But yes, we remain sort of open to those ideas and are certainly giving it some thinking time. But at this stage, we're very much focused on the core and inorganic growth. Another question from Mo. Any appetite for M&A with other dealers feeling the pain? Is that your last question? Not in the used car space. I think we've been there, done that. Well, listen, probably just a quick -- sorry, no is the short answer. I think we're likely just to see players leave the market, not consolidation. It's a reduction in dealerships, which fundamentally is going to be good for our business. And just one sort of comment. Those of you who will know we were tied up with a bit of a court case with the former owner of Buy Right Cars, and that's all been wrapped up now. We -- well, they lost the court case, and we've now put that behind us. So it's good to finalize that and be clear of that court action. Okay. we seem to have got to the end of our questions. I'll keep it open just for a couple more moments just to see if anyone else wants to throw one in. Okay. It looks like we're done. So yes, thanks very much for your time, everyone. Obviously, if you have other questions, feel free to get hold of Aaron or myself via e-mail or phone, happy to take anything from here. But otherwise, enjoy your day, and we'll catch you again soon. So thanks, everyone.

Thanks, everyone.

Thank you.