Vertu Motors plc (VTU) Earnings Call Transcript & Summary

Welcome to our results of Vertu Motors PLC for the year ending 28th, February 2022. My name's Robert Forrester, Chief Executive, and I've got with me, Karen Anderson, our CFO; I'll cover the highlights pass to Karen for the financial results. And then I'll close with strategic update and outlook. So, if we turn to the first slide, at a glance, clearly this was a highly successful period, for the group in terms of trading and in terms of general development, we hit 160 outlets in 15 years of growth, which is very pleasing. We do have scale, and we delivered a record profit of over GBP 80 million with strong margins of 12%. We continue to successfully develop, bricks and clicks on the channel strategy, which is so, important today in both sales and service. And overall, we have very, very strong foundations with which to grow further scale. We've got a stable management team that's been in place over 15 years. We've got an owner mentality throughout the business, an asset backed balance sheet with no debt and 66.8 pens of tangible net assets per share, strong colleague engagement, a survey in April 88% declared the Vertu Motors is a great place to work and we are delivering sector leading levels of customer experience. Our latest used carnet promoter scores, 86.5% are significantly higher than our, even our history and our competition. If we turn to FY '22 highlights, there are a number of areas here I'd like to go through. The first is respective digitalization and technical innovation, which is clearly gathering pace. We successfully launched media campaigns focusing on our click to drive sales technology, which really gives the customers the choice about being online, offline, and to the extent to which they want to be on the channel. We launched concierge personal shopping, which has been launched to a conversion of sales vehicles from the web and successfully launched, Sell My Car to buy cars directly from the public via the internet and made a big amount of progress and more to come. Secondly, on portfolio management, this incorporates the bedrock of the business and in terms of brand management, we're delighted that in April, the You Go surveys that we do of customers across the country, Bristol Street Motors was ranked number one in terms of automotive retail brand in England and Wales, including the new disruptors. Over 50% of England and Wales population, have heard of Bristol Street Motors, which is the highest level we've achieved and we are delighted to be number one in that period. We've successively grown out the number of outlets; we've got major developments on the way with Toyota, which we see as, going to be if not #1 or #2 volume franchise in the United Kingdom in the next 4 or 5 years. And with the development of our Western Stockland market areas going to give us big scale, with Toyota on the back of further acquisitions, we did in the last 3 months of 2021, we have GBP 90 million of fire power. So, we certainly have the financial ability to build further scale, which brings us neatly on to capital allocation, this is a major focus of the board. The group is highly cash generative. We've got the net cash position after used our stocking loans, which is highly unusual in the industry, and we've commenced dividends. And we aim to continue our share buyback program as well to generate value for shareholders. Fourthly, but certainly not last in priority, we have a real focus on our colleagues. It is the colleagues that actually execute the strategy of the group and deliver our mission statement of an outstanding customer motoring experience through honesty and trust and while we've got still in line with many companies in United Kingdom, still far too many vacancies. We have made big efforts to drive retention, recruitment and engagement, and indeed with an 88% great place to work to go in April. I think that underlines that. So, I'd now like to pass on to Karen, our longstanding CFO to go through the financial results.

Thank you, Robert. We grew our revenues by 32.2% compared to FY '21, which was of course impacted by lockdowns to total revenues of GBP 3.6 billion. We've grown our gross margin to 12% aided by supply constraints and strong pricing disciplines, which generated the profit before tax of GBP 78.8 million. Free cash flows are GBP 42.2 million, resulting in net cash at the year-end of GBP 16.2 million and that includes the stocking, utilization of our stocking loans. We've grown basic EPS as a result of the strong profitability to 16.64p per share and tangible net assets per share have again moved forward this year to 66.8p. We turn to Slide 7 to the income statement. We've again, presented our results both against FY '21 and FY '20, given the significant impact of lockdowns on the FY '21 result, the percentage changes shown on this slide are against the pre pandemic FY '20 period. Revenue growth against FY '20 of 18% was achieved, with acquired dealerships accounting for much of this increase. Core revenues grew as well by 3.9% or GBP 190 million, largely as a result of rising vehicle prices. The supply constrained environment caused, and strong pricing disciplines increased our gross profit to 12% as was I included on the KPI slide. Operating expenses also grew by GBP 52.4 million with GBP 11 million of this increase arising in the core dealerships and the balance in acquired rates, I'll give you further dealing, the core increase in operating shortly. Reduced finance costs we're seeing related to lower levels of new vehicle funded [indiscernible] supply of new cars, and we've achieved an adjusted profit before tax of GBP 80.7 million, which is a record for the group. As a result of that strong profitability, our tax bill was significant and the underlying tax rate of 19.9% actually excluded the revaluation of the third tax liabilities to the higher future rate of 25%. A year-end dividend of GBP 1.05 to share is recommended bringing the total annual dividend to 1.7p per share. Turning over to the profits bridge, which again is shown against the pre pandemic FY '20 period. Clearly the big news is vehicle gross profit generation, where we saw the core group delivering GBP 38 million more gross profit from the sale of used vehicles than it did in FY '20. All of this uplift is driven by increased margins, and Robert will talk more about the market dynamics behind this shortly. New vehicle, gross profit, in the core group grew by 7.2%. Despite declining sales volumes in this channel driven by supply. Gross profit per unit rising over 30% was the reason for this growth in profitability, as reduced supply led to much reduced discounting in this channel. Supply constraints also, drove forward gross profits from the sale of feet and commercial vehicles as manufacturers concentrated their available supply onto higher margin channels within this sector, this grows significant margin improvement with gross profit per unit almost GBP 1,000 a unit, a 50% rise compared to FY ’20. Service grows profits in the core group declined slightly, as a consequence of both the technician resource constraints we've highlighted in particular in H2, along with the pay actions taken by the group to aid recruitment and retention. Parts gross profit delayed growth with the group taking share, particularly in the premium sector together with benefits derived from a central parts hub, which drove additional parts revenues at good margins. Accident and repair gross profit also, saw an improvement, with margins slightly reduced as a result of the mix of activities within this channel. Government support, which nearly all represent business rates relief has been shown separately on the profit bridge and as promised the GBP 11 million increase in core operating expenses is broken down on this slide. The biggest increase in cost is in effect of salaries with GBP 6.4 million growth coming from performance-related pay such as bonuses and commissions driven by the strong performance of the group. The balance of GBP 1.8 million relates to investments in our head count for example, in the central sales customer experience center and in our digital development teams, finally, there's been an increase in the amount spent on marketing in order to drive the increased awareness of the group's brands. Acquired dealerships con contributed a GBP 4.5 million increase in profitability with the favorable market conditions, helping these fully integrated businesses deliver above expected levels of profitability in the year. If we turn over to Slide 9, the group generated a positive free cash flow of GBP 44.2 million in the period, despite an absorption of cash into working capital of GBP 28 million. Supply constraints were what were behind perversely this increase in working capital. With significantly reduced new vehicle inventory holdings seen the vast majority of which are funded with our manufacturers and reducing this level of stock held actually led to a cash outflow linked to the unwind of the VAT advantage we enjoy on these funded vehicles. Rising prices of used vehicles also, saw an absorption of working capital as stock values increased, partially offsetting these outflows was a reduction in new fully paid inventory, driven by supply constraints and increased customer deposits on longer lead times for new cars. The group paid a substantial amount of corporation tax in the year with an underlying tax charge of GBP 16 million, representing an GBP 11 million uplift on FY '21. And that's all cash outflows in the period of 40 in relation to tax of GBP 14.3 million of the year. Finally, our M&A activity was we invested GBP 15.7 million through acquisition and multi franchising activity in the period. If we move over to the next slide, Slide 10, there's a little more detail on our capital allocation disciplines. The groups almost always maintained its capital allocation focus to prioritize investment in both growth and to return value to shareholders, tangible net assets per share has again grown this year to 66.80 pens per share. As you saw on the cash flow chart, we've continued to invest in growth spending GBP 9.5 million in the year on acquisitions plus a further GBP 6.2 million of our capital expenditure, which was invested in multi franchising activity. All investment decisions involve strict Ed EBIDA hurdle rates ratio hurdle rates to ensure we do not overpay. Similar return metrics are applied in decisions such as the one to purchase freehold and long leasehold property in Darby for GBP 7 million post year-end. This represented 6 outlooks of the group in previously lease premises and is an important strategic location for the group. Dividends were reestablished in FY '22 after a break as a consequence of the lockdown and are an important element of shareholder return. Cover for the financial year exceeds our stated EPS cover policy as a result of the record results we've achieved this year. We've continued with our share buyback program, which is the final pillar of our capital allocation discipline having purchased 9.8 million shares through the financial year at a cost of GBP 6 million. And we've purchased the further 1.8 million shares in FY '22 to date. Turning over to my final slide, which is the balance sheet, the group is proud of its strong balance sheet, which is underpinned by the strong freehold and leasehold property portfolio valued at over GBP 230 million as at February '22 at network value. Current assets declined significantly as a result of lower levels of new vehicle inventory due to the well-publicized supply constraints as you can see, in the table on the right hand side of this slide. And the impact of these new vehicle inventory reductions were partially offset by the higher values of these cars. As you can see in the bottom table on the right, the group holds over 7,100 vehicles in stock. And this is actually as a decline of 12.8% in terms of units compared to FY '21. However, the price of the stock has gone up 43%, which has generated the rise in used vehicle stock holdings overall. Average stock days for used cars are currently 35 days showing the type control and fast turn that we have within our used vehicle inventory. Finally demonstrate inventory return to normal levels following the end of lockdowns during which demonstrated requirements were relaxed by our manufacturer partners. I'll now hand back to Robert for his strategic update.

Thank you, Karen. The group has had a consistent strategy or albeit we do revise and update it and did so, last September, but all the way from 2007 onwards, you can see a very, familiar ring. The first element is growth, we believe scale is vital and further consolidation in the sector is no doubt on the way. We certainly believe we have the management, the tech and the finances, to be a very big part of that consolidation process. Second element is digitalization; we have a 50 strong tech development team we've appointed, from internally a new chief technology officer and all the work that our development team do ties into our 3 short-term focus areas, management of cost, driving conversion and improving customer experience. All these developments, attack these areas. And we're very focused on making sure that our projects are delivered on time and to hit the right strategic buttons. Thirdly, the colleague and customer focus the recruitment and retention of both colleagues and customers to our, [indiscernible] critical to deliver the customer experiences and operational excellence. And making sure that we got the right colleagues is of absolute paramount importance as we'll discuss in a few moments. The ancillary businesses, which is the fourth leg is often overlooked in terms of the group, but the development of complementary businesses has been, proactively undertaken with dedicated management. Just give 3 highlights in the period, hands direct, have a high successful year making over GBP 2.5 million profit before tax. And we're now integrating our car leasing platform into that business. Secondly, ACE parts our online parts retailer undertook the acquisition of a global online parts retailer using the web as opposed to marketplaces in terms of power boards and that is now integrated. Thirdly, our smart repair business is seeing continued expansion and we're well on track to have over a hundred bands in operation through our smart repair business in fairly short order. We believe there is more value to come from this space. We turn over to Slide 14 and look at the market trends in vehicle sales. At the half year, we explained that the impact of reduced new car production had had a significant impact, both on the new and the used market and had impacted our business, very positively as it happens. Many of those trends have actually continued and we look at new car production that is still very much under pressure, and exhibited by the fact the SMT last week reduced its 2022 forecast down to GBP 1.72 million. We've had a lot of publicity for over 12 months about semiconductor issues, but global supply chains are clearly on dramatic pressure. The lockdowns in China are not going to help in terms of parts reduction. And I think we're all under a measure of shock when we realized just how many wiring wounds were made in the Ukraine and the disconnect dislocation that that has actually caused. So, we would expect to see, further dislocation in new car production out for the rest of this calendar year at least. Secondly, the decline due to the pandemic and supply shortage of new cars is leading to a 30% fall in the 0 to 3 year car park. And that has a big impact on used car supply actually for many years to come, but also, on after sales demand because this car park is where franchise dealers are historically played heavy. And it's probably fair to say that the used car supply shortages, which will remain, when combined with the robust demands coming out of lockdowns led to significant price inflation, 30% in many, product lines. Now I think also, we're now seeing that tempering, the last couple of months used car prices, months and months is declined by about 2% of them so, we think we're through the pinch. And I think part of the reason for that is that the used car volumes of sales in the market are indeed coming down. And we've seen this as a trend since about October and there are a number of reasons really why used cars have been comparatively weaker compared to new, one is as the price inflation took off, used cars became comparatively expensive compared to new products. So part of the reason why we got such large order banks on new cars is the switch from used into new is why would you buy used cars if it's more expensive or even the same price than a new car, even if you have to wait. I think the second reason why there's a switch from used to new is if you want an electric vehicle and more and more people do want an electric vehicle, you're really into the new car market, because the supply into used cars is minuscule. And then thirdly, more recently, the cost of living pressures are clearly having an impact in terms of demand. And I think you, you'll see that in the market numbers that I think that's part of the reason why we're starting to see used car values moderately come off. Talking about electric vehicles, demand is growing that's partly due to better supply actually, is manufacturers prioritize electric vehicle production to make sure they hit, climate change targets. But it's also, because a lot of, the traditional petrol and diesel models are actually being discontinued. We've seen pretty well the end of the A class we've got Fiesta very much in short supply in the Ford franchise. So people are actually having to switch into electric vehicles and actually a lot of people want to switch that is changing the landscape, we've seen the MG franchise, which has some excellent Chinese made electric vehicles, very economical they're growing significant market share. We've now got 3 outlets and we'd look to gain more exposure to the MG franchise over the months and years ahead. We return to Slide 15, we can see our trends regards to vehicle sales, which very much mirror really what's been happening in the marketplace. You can see reduced sales volumes in every channel, reflecting the supply constraints. The good news is that we have beaten the SMT registration data in the 12 month period in all vehicle channels. We now have growing market share 4% of the new retail market, 5% of the new van market. And that's really what we need to keep going. Can we keep growing our market share, becoming more efficient and taking a larger slice, both organically and through acquisitions actually of the vehicle markets? We have certainly seen OEMs acting rationally. If semiconductors, for example are short supply, then they're prioritizing the luxury high end margin products as opposed to low end margin products they're prioritizing bands rather than cars to maximize profit and that is seen in our retail numbers came back far less than fleet. For example, the drive of supply and demand inflating used car prices can clearly actually be seen in our selling prices in H1, our average used car for 16,000 in H2, our average used car for 20,000. I think that tells you a lot and our margins peaked, we believe in H2 at GBP 1,740 per unit after preparation costs, an absolute stellar margin performance. And, I think compares very well with the competition. It's also, good to see that yes, the market grew in terms of battery electric vehicles, but the group outperformed and gained more market share. We grew significantly ahead of the market, the SMT private market on Bev's group 122% on FY ’21 whereas the group actually grew [ Slide 5 ] sales, 169%. So, we're very, very happy with that and we have put a lot of effort into electric vehicles quite quietly. There is a government scheme, a government back scheme called the Electric Vehicle Brew scheme where you get audited in sales and service about how good you are at delivering customer knowledge and customer experience on electric vehicles. And the Vertu Motors Group has more accredited dealerships under that scheme than any other group in the UK. And we aim to keep that. If we also, look at the wider landscape, in relation to new retail cars, there has been much talk about the move to agency for new retail vehicles. And I think it's worthwhile just dwelling on that subject for a moment. We shouldn't get too excited, I don't think about the agency model. We are very used to the agency model in the fleet channels and in the parts channels. So, it's not new taxes to the sector, but it's certainly new in terms of new retail cars. It is actually a complex area where there are different proposed proposals by different manufacturers. Some are true agencies, some are called non-genuine agency with different legal frameworks. And interestingly, this CMA of issue consultation around this area of block exemption, et cetera. And clearly it's an area where the CMA have an interest is merely consultation at this stage, but it would have an impact in terms of the structures that manufacturers can point in place and could actually, have a major impact in terms of whether agency impacts are put in place in our sector but that's an interesting thought. Clearly not all manufacturers are saying, they're going to go down this route, but we have some that are setting up early, the Cooper Franchise, which is a Volkswagen group, Bev brand is going, later this year into the agency model and a big one is clearly Mercedes passenger cars, which aims go agency on the 1st of January next year. The impact on the right hand side is quite clear. Clearly, we get reduced revenues, but we do get higher margins cause clearly the handling fee becomes the profit. We have lower costs of operation and we have lower working capital. So we should have better capital employed and actually reduce commercial risks, so, it's something we're working very closely with the manufacturers on and looking at positively. Return to all important after sales market, there's quite actually quite a lot of moving parts in after sales at the moment, there are some headwinds, in terms of the size of the 0 to 3 at park. This is where a lot of manufacturer servicing and warranty work takes place. And clearly with the reduced new car sales that is coming down, we've also, got the very long term trend in terms of growth of BV. And I think that's exceedingly mooted in terms of impact at the moment. The 3 year part is more of an issue, but it's not that we can't do things about it, there are lots of action that can be taken to grow revenues. And we've been on this for a long time. The first is clearly to retain your sales customers into your service department to overcome any headwinds. And we have 160,000 people tied in to use the group for their service work, that includes manufacture plans. We have had for a couple of years now, a digital conquest strategy on service. So we will go out into the market on the web and get customers. We expect 27,000 customers this year, new customers to come to us for their service. And this is particularly useful to get owners of older cars, quite price competitive, but owners of older cars back into our service departments. And indeed, that's reflected in the fact that the average car we are servicing is now up to 4.61 years. And the peak spend on servicing and maintaining a vehicle is actually at 5 years. So the more older cars we bring in, the more we move to that 5 year, number of average car, age of car service, the higher than our average invoice values and revenues, it's also, worth pointing out the manufacturers are cognizant of gaining, more share in the after sales market for franchise dealers. And they're doing some very good work around service plans and warranty provision. For example, in Toyota franchise, the relaxed product means if you come in to have your car service and as a clean bill health, you get given a 1 year manufacturer warranty, which is a very valuable product for free, which means you're more likely to come back and we should see the retention going up the consequence. If we compare, the performance to the pre-pandemic period, it's good to see our retail service volumes up 4.8% on a light flight basis. Warranty revenues are significantly down though, probably due to that con that lack of cars in the 0 to 3 year park, as much as anything probably due to reduced mileage, as you can see on the bottom left, however, we've been very successful in augmenting our service revenues with additional add on products, especially tires, and you can see a 3.7% change there, which is good to see and certainly helps profitability. Overall levels of revenues in the service department were level. We go into more detail into after sales performance because of course after sales performance is more than just service, there's some very, useful data on this slide. As I've said, service revenues were flat like for like, but margins were as expected, slightly eroded due to the higher technician costs, which arose in H2 we'd expect, further slight erosion of those margins going forward, we think it's important that we get that resource in place and that is just the cost of doing business. If we turn to parts and, Karen's gone through some of the headlines revenues were flat as gained by gaining market share were actually offset by a number of franchises in the last 2 years, going into the agency model where we get handling fees and actually margins were up 1%, 22.5%, which is very, very important to us. Why are margins up? Well, the move to agency inherently improves margins. There's no doubt about that. We've also, been successful in generating more sales for retail customers, and that is inherently higher margin than trade. And now the vast majority of retail customers ringing up for a part actually get answered in gate are conversion of those calls has been much improved and we're seeing increased, revenues and profits as a result. The third element of this is we've been successful in growing some of our premium trade operations, in fact, Mercedes-Benz and Jaguar Land Rover and that’s aiding margin as well. We actually noted, I think last time we did our results that we had centralized our accident, repair operations under a single separate management. And that is certainly paid off for us, we've had strong much better control, we're going to see our, I lead continued revenue growth in accident repair centers. And there's a number of other market wide things which are impacting accident repair, one is there has been reduced capacity over a number of years and that's certainly helping to bolster pricing, though I would say that the cost of paint is going up and on some, that's quite hard to pass on in the short term in terms of insurance companies. Another trend we're seeing is because new cars are so, short in supply, more and more insurance companies are having to repair more cars, which in the past might have, gone off to the write offs. And that's boosting both accident repair revenues and indeed parts as Karen noted, the overall margin in accident pair smart were down and that's mixed issue as we've grown this smart repair quite considerably. If we turn to Slide 19 and digitalization progress, our tech platform and in-house developers, are a real competitive advantage we think in terms of driving improvements across the business. To give you some headlines, 4,300 customers bought a car via leaving a GBP 99, reservation fee online, massive improvement efficiency in the sales process by doing that. Secondly, the concierge service sells 400 extra cars since October and a significantly enhanced conversion, particularly people online, our pure online, used car sales have, significantly increase for the sales channel doubling year on year, but let's put this into context. We sold 900 cars from pure online no human intervention sales, against selling a total of 8,000 to 9,000. So, it is still a low percentage of overall sales and conversion ratios in pure online are still very low, which might explain some of the market dynamics that we're seeing. In terms of after sales, we're delighted to have achieved 73,000 online service booking and a lot of work being done to further digitalize the after sales process to reduce customer pain points increase retention. I mentioned previously that Bristol Street Motors was the #1 in April in England and Wales prompted brand awareness, including consideration of [Shenzhen Kazu]. And clearly there's a lot of effort gone in to try and take the budget that we've got, which is clearly much less than some of the disruptors and to make the most of it. And I think we have a clear focus on investing in our 3 brands, both through media, if the TV and sports sponsorships, indeed the price inflation in TV costs is very, very significant. So, we believe we're getting a better ROI in our marketing spend by going into sponsorships and doing a lot of work with our sponsorship partners to gain social media presence and to activate those partnerships rather than just putting a name on a football shirt. So, we're very pleased actually, that this is a real benefit to the group. You can see virtual mode itself is now 6.9% despite the fact it's only really in 3 regions, Macklin our brand in Scotland at 40% and Bristol Street Motors at 51.9%. So, we've mentioned colleagues a few times on page 21. You know, the key to our business is having the right people and make sure they're motivated. There are challenges in this area around vacancy levels, which remain persistently high as labor markets remain tight in the United Kingdom. And we have done a number of things there to try and improve both recruitment and retention of colleagues. We've spent a lot of time formalizing colleague engagement. We've always done colleague satisfaction surveys, but we're now into regular forums at leadership level. And the PLC boards are indeed getting involved in those. And I think we we're doing well given the fact we've got an 88% great place to work score. So, I think we can say that that area is strong. We've also, enhanced packages around increased holidays based on length of service, extended maternity pay, and we're increasingly focused on making sure we've got work life balance available to colleagues. So, an example would be we're increasingly moving in the direct sales role in dealerships from traditional sales executives to sales advisors. Sales advisors have a much higher basic for about GBP 28,000, but reduced overall earning capacity, but they have fixed hours and shifts. So, it means that at a 5 o'clock, even if you're with a customer you're leaving the dealership, which is very much not the case in traditional sales executives. And that is seeing, far more people applying and a much better gender mix as well in terms of our sales teams. So, we think that is something that will continue to introduce to dealerships over the next 12 months. We clearly have always invested heavily in training development and continue to do so. We’ve got 30 managers in the Northeast this week for induction. And I would say 2/3 of those managers have been promoted, have been promoted internally having been on group training and development programs. Finally, clearly, we need to grow our own talent we're taking on over 200 apprentices in 2022 in a variety of different roles. So, finally, if we look at current trading and outlook, the main priorities of the business, this has been the case since January, could be summarized on this slide as focused on cost conversion and customer experience that it's probably worth just going to each because it does reflect, I think that the trends we're going to see over the next few months. The cost, item is clearly due to the fact we're in an inflationary environment. Everybody knows that and getting good cost control and not letting managers particularly get carried away that, you know, well, it's inflation, I can't do anything about it, I'm not going to control my costs so, much cause every cost is going up. It's absolutely eradicating that view. When we started early, you know, we need to stick to business plans. We need to make sure our resource is flexed volume moves up or down, and we need to have an absolute owner mentality on strict cost control, particularly in the energy area of course, which we will see increases over the rest of this year. We've got to focus on the behaviors and we've launched war on wasting energy to make sure that people turn lights off and we don't have heating blasting in workshops at 2 o'clock in the morning. So, we have some very, very early morning visits to dealerships. The second category is conversion, this is about squeezing every last sale from every opportunity we have in both sales and after sales channels. So, we're looking at how many phone calls inbound go unanswered, how many inquiries got a video or didn't get a video within 1 hour of landing in the business, how much service red work, which is safety related work identified on a car in for service actually got sold to ensure that when customer vehicles leave our dealership, they're going out safe. So, it's minutiae but it's very, very important and making percentage differences in, in the area of conversion makes the massive difference. We are absolutely fixated as well to make sure that we are trying to keep the customers we got as opposed to constantly have to go and find new ones. And there's a balance there between retention and conquest in marketing and the balance we're increasingly getting right with some interesting initiatives going to be launched. Of course, if you look at retention, the best place to start with retention is customer experience. And that's the third element here, we are well above average on customer experience, but we can always do better. So, if we've got a bedrock of them, a good experience, if we can then do some clever things with regards to retention products and communication and use of our new customer data platform, we think we can grow the loyalty of our customer base going forward. These of course are items we can control. We've got to focus on things we can control. There are some elements of the external environment we can't control, but there's not a lot of point getting fixated with those. We've got to fixate on things we can control. So, if we turn over to Slide 24, the current trading slide in terms of the metrics, March and April saw very similar profitability year-on-year, just over GBP 19 million, actually a different dynamic in terms of the performance, last year we had lockdowns Jan, February, March. So, the new car quarterly bonuses were very muted because of volume constraints. Actually, this year we saw a much bigger March bonus drop in, for the full quarter, but that was upset by the fact that this year we didn't have business rates support, and clearly we've had a bigger cost base due to inflation amongst other things year on year. So, overall, the same result. It's good to see that revenues were up despite lower volumes and this is due to increased sales prices, if I give you an example in terms of, new cars in H1 financial year '19, our average sales price in new cars are 17,000 in H2 of the financial year being discussed here 22,500. So, you can see the inflation that's actually taken place. I'm pleased to say in the 2 months, the lifelike increase is not in each of our new vehicle channels was ahead of the SMT. So, we're continuing to grow market share. And I think the real focus on conversion is actually helping us to beat the market. But we did see used cars continue to show reduced volumes against the prior year period. And there's clearly some pressure there and a switch into new vehicles. Margins, however, remain very robust and that is underpinning our profitability, no doubt at all. So, finally, Slide 25, what of the future? Well, I think you'll have got the message, new vehicles, supply constraints going to be with us quite a while. The global supply chain is clearly in a mess, post pandemic, and we think that's going to have a number of impacts. Clearly, we're not going to see big volume expansion, certainly not, I don't think the rest of this calendar year, but it will underpin used car pricing, because there'll still be a tightness in the used car market from a supply side. The big question is obviously the cost of living question, which is real for many people and consumer demands will be key really for the rest of this year in terms of how sales go and really where used car prices go. So, while there's tightness in supply, the demand side will need watching and then finally, we've obviously got to have careful management of our own cost base given the inflation which is at levels that I've not seen my business career. If we turn to where's the board mind in terms of strategy, I think we're very well placed. And I think that view is certainly shared by the board. We've got a stable and experienced management team and myself and Karen have been working in this company together for over 15 years, our Chief Operations Officer David Crane, similarly, and the same goes for bulk of our team. We have a motivated and aspiring workforce who want to take advantage of opportunities. And certainly, we believe scale growth will give us all and our colleagues' opportunities. We've got excellent and developing tech, which I think is a real competitive advantages. We've got an outperformance intellectual vehicles, which we clearly are focused on continuing, and we believe we've got strong relationships with partnerships with key OEMs, which is going to be vital in terms of facilitating our future growth that we maintain those relationships. And the best way of maintaining those relationships is to overdeliver in terms of volumes and to work very closely in partnership, making sure that we are doing exactly what they want us to do in terms of applying their franchise and representing their brands. If you take all that combined with our very strong balance sheet and the financial capacity that we have got, we are in a great place for 2 things, one provide resilience, we've got a very resilient business and business model, which has been shown through various crises to stand up to the test of time. But secondly, also, the ability and scope to scale up, we believe the business still needs to be larger and scale up. And I think the industry trends will be there for all to see in the coming months. So, hopefully that is a very useful summary for you to give you an idea of what's gone on in the last few months and in the year to the end of February 2020. Thank you very much.