Zigup Plc (ZIG.L) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Zigup Plc interim results investor presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. Either the company can review all questions submitted today, and we'll publish our responses where it's appropriate to do so. Before we begin, as usual, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to Head of Investor Relations, Ross Hawley. Ross, good afternoon, sir.

Thank you very much for that and welcome to everybody online today. This is our fourth IC session, which we run. And this one comes after our half year results, which we announced last Wednesday. So we're coming on road show, talking to various institutional investors. The format for these, which has worked well, there's really a fire side chat format. Well, I'll look to leave in questions, which hopefully [indiscernible] to the Q&A tab throughout. So, house, if you please for those in and I'll mind people [indiscernible]. Well, I think before that, probably best if I ask Martin and then Philip to give some overviews of our first half performance from an operational and a financial perspective. So with that, let me hand over to Martin, CEO, to do some introductory.

Thank you, Ross, and good afternoon, everybody. I'm just going to come out the first 3 slides before handing over to Philip. So if we just look at Slide 1 first, just take a look at the H1 performance during the period. So good performance across the board. We're delivering on the strategy. These results are in line with expectations, the market expectations. So what we've seen in the period is good operational momentum in terms of what we're doing across of our business lines. And that's sort of combined with healthy demand and the improving supply as well, in terms of sort of coming back to what I would see as more normalization post the pandemic. As we anticipated and signaled to the market, we saw disposal profits normalize it. It's a story of 2 parts with Spain and the U.K. and I will come and do a bit more on that shortly. We are investing in the business for further growth and strong returns. And we've got positive momentum as we exited this period into the second half, which [indiscernible] come on talking about as well. I just look at the financial performance, let's say, Philip's going to give a deep dive but, just to call out what I think is the summary here. As I said, good set of results are a strong underlying business. We saw revenues up 5% with the group on course to deliver the underlying PBT in line with the market expectations for the full year. And for those that haven't got access to that, market expectations at around GBP 161 million PBT or GBP 82 million for the half year. As I said on [indiscernible], we see continued benefits of the integrated platform. Revenue growth came across all of our sectors in the U.K. and I, Spain and our claims and services. In this period, I'd call out Spain has been a standalone performer. It's got a very strong economy. It is supporting the demand, and we're seeing a growing demand from a variety of customers across the pace. And if I look at [indiscernible] particularly, we've had our highest new business wins since 2019. So a very strong position in this period. And as I say, we continue to invest in our platform. By that investment, I'm talking about not just investing in the fleet, I'm talking about investing in our tech stack and investing in our people. We saw strong cash generation as well, which has enabled us to continue that investment. Since point-to-point, we've grown the fleet to 4,000 vehicles and fleet now stands at 132,500 vehicles. And of course, when we're buying fleets, you got CapEx outlay, but don't forget the value of that fleet goes on the balance sheet as well, which now stands at GBP 1.4 billion in assets just on the fleet alone. Until that investment we've seen in the [indiscernible] well, down 2 months versus the prior period. So all of that sort of be leading to some excellent shareholder returns. So obviously, we closed off the share buyback, the third probable share buy back in the period, that's [indiscernible]. We've supported dividends full year and now another dividend at the half year of [indiscernible] 8.8. And we see that as a sustainable continued progressive dividend based on the visibility we have of the cash returns. So summarize on this page, I'd say strong balance sheet, growth in our underlying EBITDA [indiscernible] all of that, whilst also maintaining leverage at 1.6x. To be clear, levarage has been 1.6x for the last 5 years. So though we've added to the value, value to the earnings, the leverage has been consistent. Please look at the next slide, just to sort of have a little deeper dive with some of the businesses are turning to rental. We talked about a fleet growth momentum. Simply, we have seen that continued demand as suppliers come back online, particularly in U.K. and I. So we got customers. Now taking on that new supply, some of that is growth, but it will cover the sort of growth aspects of that. And in Spain, that the economy is very, very strong. We have seen continual growth in our DOH on the fleet. New wins. I talked about having our highest new wins since 2019 on the rental side. That's reflected not just that demand in the market, but also the integrated sort of services we're offering on our platform. It's not just about a commoditized piece of metal. There are [indiscernible] that grows with the products that we have, and that's what customers and prospects are attracted to, to get good momentum on continuing to grow that. [indiscernible] about cross-sell as well. People ask us what opportunities that we generated by having this sort of platform and the different businesses linked together. Just in this period, we talk about an additional 750 vehicle rentals that have come across from different businesses as a result of having that cross-sell. We've been investing in our charge EV business. This is the business that is installed in electrical vehicle charging points. We announced in the set of results, 2 significant contracts with ScottishPower and British Gas, and we expect to continue to invest in that business because clearly that does supports in the transition to electric vehicles as we go forward. And that's both our domestic and commercial customers. If I look at claims and services, yes, we grew our revenue. Margin outcomes are different. We've talked about some different mix of business in our claims and services. So where we're growing, for example, in our repair body shops. So there's a plenty of opportunity to take on repair work. We have the capacity to do that within our network after extended independent network. So that will grow the top line that does have a different revenue mix. So that's why you will see in our results, the margin mix has changed. We've got broaden support in terms of what we're doing across that platform. So it's not just about nonfolded accidents, which is where the genesis of the business is, it is about providing more product and service from roadside accident recovery through [indiscernible], through the Body Shop work, through the legal recovery, incidents and fleet accident management as well. And we've been building on our digital services as well, adding in tech where we can take some of the strain from a lot of heavy lifting work. So using digital to help with more self-service on our portals. And also, for those of you that recall, we talked about protocols, a protocol for insurers is where we have an agreement bilateral effectively, each insurer, where we have certain roles that enable us to pay a claim very quickly without any fictional -- without any fiction. And it's an agreed negotiated upfront settlement so that you don't have to go through a lengthy process to make a recovery. That aims our cash recovery and lowers our operational costs in collecting cash. We're up by at least 70% now in the business, which is near a record high. And if I look at the third quarter and the focus on customer delivery. In March this year, we brought our U.K. and I Management team together as one. So we had what was the claims and services side, the ready slide and the Northgate management team. They came together as one team. So we have sort of one joined up management structure to deliver a simplified customer service across the business. We focused on the customer first. We think that's extremely important because it's the customer feedback that drives business to our door. So when you look at Trustpilot scores across our businesses, we are rated as excellent, and that compares to some of our competitors who are rated us poor. I wouldn't normally bring that [indiscernible] it is an important point that we invest in customer outcomes, and we're very focused on that delivery. I said our Spanish business has been growing demonstrably, a good set of results you just see when we go for the deepen and dive. But we have been broadening our services in Spain as well, slightly different to what we provide in the U.K., but it's a broader set of services in Spain is traditionally offered. So that's also extending the growth trajectory for Spain. And then finally there, just on the sort of the ongoing investment. We talked about both new sites and locations. So in the U.K., it's a further site that we opened in Dundee, that's a Body Shop site. Why is that important? Well, as we sort of transition from some of the locations that we operate on, we're able to find our sweet spot in terms of site size, capability in terms of workflow, productivity. It delivers efficiencies the way that they can move vehicles through. It's a modern well equipped site, and this is typical of what we are setting up. We have in the past and we're setting have as we move forward. It just makes us more efficient in terms of being able to deal with with repair capacity and productivity. And in Spain, we opened 2 sites previously and we've talked about this new site in Cadiz in this period. Again, it just opens up more service points, which customers polarized towards. We've talked about tooling, ADAS sort of advanced driver system services. We rolled that out across our body shops. It's just using the latest tools, repair technology to make us as efficient as we can. So we're at the sort of leading edge of what is possible out in the market. And that attracts customers to what we do as well. We're investing in our people. So over 400 apprenticeships now in the business across the U.K. and Spain. So we've got the next generation of technicians to support what we do. So overall, quite a lot of things going on to business. As I said, delivering on the strategy, and we're seeing that through the momentums we exited the H1 period. Ross?

Fantastic, thank you. I think can you just put out the results in that financial context, and then we'll start to tease out some of the [indiscernible] issues.

Yes, sure. Good afternoon, everyone. So at the top line, our revenue grew across all of our businesses, they're up 5.6%. And then the EBIT and the profit before tax are really reflecting predominantly the normalization of disposal profits which we spoke about at the year-end and over the last 18 months or so. So the results are exactly in line with what we expected. And as Martin said, if you look at our results half year on half year, we're generally around 50-50. So we're exactly in line with what the market is expecting for the full year. Now importantly, our fleet net book value increased by GBP 200 million. And our debt, we went up by GBP 27 million. As Martin also mentioned, our leverage is unmoved at 1.6x. And then our dividend per share of 6%, that's reflecting the -- our dividend policy, which is to pay out as an interim dividend 50% of what full year dividend. Now if we go on and just have a look at the revenue. You can see this chart here bridges the revenue from last year to the current half year. The first block there represents the U.K. and I rental revenue. Now U.K. and I has been slightly against a tough comparator from vehicles on hire perspective, and we'll come and talk about that a little bit later on. So vehicle on hire actually went backwards 4.6%, but despite that, revenue grew 1.7%. And we're able to grow that revenue well through sensible pricing through to the market, but also had the growth in ancillary products and services for an additional revenue. In Spain, a different picture. So we've had good supply for a long time in Spain now on new vehicles and DOH has been 7.4% and rental revenue went up 8.6%. So alongside that DOH growth, we've had pricing as well as some additional products and services as well. Products and services, as martin mentioned, we had good revenue growth there, contributing GBP 25.8 million. And that's a different mix from which we see in the past with a greater mix of absent incident management rather than credit hire and credit repair and that does impact [indiscernible], which we'will kind of look to here in a minute or two. And then the vehicle sales, a reduction of GBP 48.8 million is just reflecting the normalization of disposal profits and the ongoing normalization of residual values in the marketplace. So if we go on to the next slide, we can just look, okay, what does that look like from a profit point of view. So you can see we're bridging from the prior year to the current year, and you can see that's disposal profits there in the lighter purple color there. Now if you go to the middle of the chart, first of all, what you can see there's an GBP 8.9 million reduction in disposal profits half-on-half, and that's split across both Spain and the U.K., just representing a normalization of those residual values. If you go to the left-hand side of the chart, you can see that the growth in Spain offset the reduction of BOS in the U.K. So we had a rental volume growth of GBP 2.7 million. The rental volume movement, which is still very strong in both the U.K. and I, so U.K. is at 15.7% and Spain rental margin very strong at 19.3%. But then they came down a little bit year-on-year, and that reduced profits by GBP 3.2 million. But also within that, you've got a GBP 1 million headwind on foreign currency translation at the [indiscernible] well. And we did have a cyber incident at the beginning of the year, and we had a one-off trading impact there on our profits of GBP 4.2 million, which is equivalent to about 70 basis points impact on claims and services margin. Then, in terms of the additional volume, that delivered us GBP 1 million of additional profit. And again, as I mentioned, that's reflecting mix effects, a higher mix on slightly lower margin [indiscernible] management versus credit hire, as we saw a quieter summer on the volume of incidents and assets referred to us for credit hire. And you can see that in the mix effect there of GBP 5.5 million on margin. And then we had an additional GBP 1 million from interest charges reflecting the higher debt throughout the year. But when you set back, directly in line with what we expected and predominantly reflecting the normalization of disposal [indiscernible].

Fantastic. Thank you. So look, that I think has been very helpful to just kind of set the scene. [indiscernible] thank you, [indiscernible] Julie and rest of couple of others [indiscernible] lots of questions, I'll try and read the main. But I thought we're going to start off and probably back Martin to you. So I think on the roadshow when we've been came out, people -- if I think about the U.K. and I. Actually, some of the commentary said about U.K. rental demand being the strongest in 5 years. Obviously, we just had a budget and perspectives on that. But really, where is this demand coming from? Is it structural trends from ownership to rentals actually, is it just as people starting to look for more supply, which they've not been able to get in the past few years?

I think it's both of those, Ross, to be fair. So if you look, first of all, at that sort of structural piece, our evidence still points to that sort of used ship of ownership. So that's the structural trend that we talked about. And then if you sort of categorize that and sort of bring it to life with what we see on the ground, so I think I might have mentioned at the full year, businesses that have run fleets under ownership. Post the pandemic, they were unable to get supply to be able to replenish the fleet. And therefore, they've held that fleet over for longer than they'd anticipated. Now let's come to us at a point where you have to sort of replenish all of the fleet. So if you imagine your own an FD in a small medium sort of size business with a fleet, 50-60 vehicles, that's a very large check to right to buy your own fleet. So there has been that sort of support as well in terms of what we're seeing, where those customers want to come into an operational model? Don't forget, it's not just about buying a piece of metal. When we do what we do, it's all services that go to support that to keep the customers more about -- from having their workshops to be able to fix things very quickly, keep the vehicle legal and roadworthy, have a replacement vehicle when there's something that has gone wrong and you need to be back out on the road. And as I say, to provide all the services that support that in terms of accident and incident, so until we've seen that sort of growth coming from that structural side. And also, we've been successful with the new business. So if I look down back to recognize that since 2019, a new business wins coming from market share as well. So we're seeing what we need from some of our competitors that don't have that full service wrap. I talked about Trustpilot and that we're invested [indiscernible]. And if you go to one of our rental launches, for example, you go in, there's a [indiscernible] in branch, and we get real lifetime feedback from the people business in [indiscernible] to tell us about the services. We're very [indiscernible] you should have [indiscernible] so that's where we're seeing that demand. And of course, our supplies come back. That's why I talk about momentum and that momentum for growth.

Yes. And in some ways, if I switch geographies -- we've sort of seen this kind of demand and supply dynamic working well together in Spain. [indiscernible] down there in September, we took some investors and some analysts there. It's been an amazing growth story and when those 2 things work together on that. It's been a great story, more to come?

I think so. I mean I open the KPI sheet every day and I say about 4 or 5 visits to Spain in different locations to see that sort of on-the-ground activity, which does fill you with energy in terms of when you see how much is going on [indiscernible]. But I think more to come. As I said I open the KPI sheet every day on Spain and its just continually more on rent, more on rent. We put the handbrake on, don't forget. We've put the handbrake [indiscernible] this is the full year because the market is sort of very worried about that leverage in the listing I think is 1.6x. Our competitors trade at 3x and 3.5x leverage in a private setting, and some even more. So look, we put the handbrake on just to sort of say, we work within the confines of our leverage ratios, et cetera. We have put more facilities on to provide more headroom as well to trade, and we've seen that demand is being filled. So as we look forward, if we're going to meet that demand, we've already indicated, we signaled that we would have further CapEx throughout 2025, '26, as we expect to fill that. And let's not forget that this is a correlation as you spend your CapEx, you put value on the balance sheet, and you get all the future earnings and cash flows that come into that. So it's a business that when you're investing up, all that future visibility on what you're generating that supporting the dividend and supporting that sort of continued growth.

Yes. I saw Gary talking about Spain, just in terms of sort of some of the new facilities. So when we have a new facility, how do they -- are they day 1 firing up? I mean, especially in Spain, there's been a design, when you've been looking at investments and [indiscernible] would like to open up somewhere. How do you think about that? What are they actually demonstrating in terms of the growth?

So what they show is that when we look at all of our footprints in Spain, we've got very good coverage. So what we look at is the concentration about the customer mix and where we're underrepresented as well. The model works really, really well. It's a bit like when I would say Northgate U.K. was sort of 15 years ago. You open up a new site, new branch or service point, customers polarize around that sort of service point. So before we hit the ground and running, our account development teams are aware of which companies and organizations we're nunderrepresented in would be quality profile for credit ratings, et cetera. And we're able to start those discussions. So we do hit the ground quite quickly. So -- and those on rents for that branch obviously grow. But we hit the ground and running, [indiscernible] readymade [indiscernible] service. And it's the same offering. It's just basically rolling out that capacity. It's the same offering that's been very, very well in Spain. As I said, it's a good service track in terms of what we do. We see that the same when we go out [indiscernible] see that customers in our branches and get that sort of feedback. So exactly that. And it's something that is in demand.

So on the rental side, demand side we kind of touching [indiscernible] clearly strong and a lot more to come. And when [indiscernible] supply side, you sort of be messaging saying, it's back to normal. There's obviously a couple of caveats around them. But just in terms of the vehicle availability and what we're seeing there, do you want to [indiscernible]?

Yes, back to normal. We only talked about availability. And going forward, [indiscernible] really be a conversation, I guess, in the sense of you'd expect to be able to acquire your productive fleet, et cetera. So as I said, there's only been a talking point. Perhaps the pandemic [indiscernible] constraints, particularly in the U.K. I think we were asked the question as well, so when supply all comes back and it's all normal, does that means sort of pricing comes down, certainly demand comes up. If you look at payments, because Spain has had normal supply now for the last couple of years, we talked about that. Pricing has not come down, demand has continued to go up. So it is about what we are doing specifically in the market. And in the U.K., yes, supply is normal. We'd expect to be having conversations now with manufacturers as we are around that sort of volume and volume discounts that we would expect to be able to achieve from that. And also remember we talk about margins. So we've said margin 15% on the rental side, sustainable midterm. We said that when we get to the full year this year, we're going to look at that to see whether we need to revise it upwards because we're seeing Spain staying higher for longer. And obviously, U.K. is [indiscernible] as well. So we expect to see good returns. And we maintain that -- we can maintain that margin where the input price goes up or the price goes down. We've demonstrated that we're able to maintain that margin that we've been talking about.

And then Christoph, I think you asked a question about margins. I think you asked U.K. and I. Will we touch on claims and services margins a bit later. But Philip, just to bring you in. I think one of the slides which we had at which -- which we looked at a number of times, really on this point which was saying about how supply constraint has been [indiscernible] there's quite a good visual to see the difference between U.K. and I and Spain. Can you talk through that?

Yes. I mean, so this slide here really showing our vehicles on hire for this year, year-to-date versus last last year. It's different story both in U.K. and I and Spain, that's really reflecting the evolution of vehicles which Martin was talking about. I'll talk about U.K. first of all on the next step. So last year, we explained that actually VOH was shrinking point to point, and that was reflecting the availability vehicles, which is more restricted in the U.K. last year, which meant as we were defleeting our office vehicles, we weren't able to replace as quickly as we wanted to, and therefore, the average vehicles in line inevitably decreasing. We use that to our advantage, making sure we were servicing the customers that are highest quality and the highest margin for us as well at the same time. So in this year, we started the year 3,000 vehicles behind where last year open. So on H1 -- to H1 point of view, you can see actually we've been tracking below. But you can see the trend now is that access to vehicles has improved almost back to normal from a volume perspective in the U.K. now. We're now catching up. And actually, by the end of November, we crossed where we were last year. So what does that mean for the whole year? Broadly, I would expect us to be exiting the year at a similar point where we started the entrance of prior year. So net-net, average vehicles are probably about the same as we were last year. But importantly, we'll be on that upward trajectory, as we go into the following fiscal year. And then in Spain -- the Spain is really representing the fact there on the lines, which are all going upwards. We've had really good supply for the last few years. So last year, we're able to grow average VOH and point-to-point vehicles on hire. And this year, again, demand is really strong, vehicles supply is really good, and we're taking that opportunity to continue to grow.

So fleet CapEx, and I'm just going to ask it in a couple of different ways or maybe you can answer. So the fleet replacement that's part of that, and that's probably what we're seeing, and we talk a bit about aging and then how it's kind of returned to growth. So when we think about CapEx, your comments about this year, FY '25?

Yes. So it's playing out as we expected, is the first thing that I would say. And we went back to the year-end in July. I said that as vehicle supply is improving, I would expect our replacement CapEx, that's what we spend just to keep the fleet at a constant level, would increase by about 1/3 this year. And that's reflecting the fact that vehicle supply is coming back. We're taking the oldest fleet off, which don't forget is not as operational efficient. It costs us more to service and maintain those, et cetera, taking those off and replacing with new vehicles. As we're doing that, we are reducing the average age of the fleet. So you can see in the presentation, we've got the average age of the fleet in the U.K. to come down about 4.5 months to just over 31 months now. And in Spain, we're down about just over 2 months to almost 29 months now. So that's coming down as we expected. What I also said at the year-end is that exactly how much we spend this year will depend on what the demand is and what supply we're going to box ourselves in. What we've seen is really strong demand and really good supply now. So I'm expecting we'll spend a little bit more in that second half. So we'll end up with a little bit more than 1/3 for this year. But don't forget, we're managing that within a leverage range of 1 to 2x.

And then just looking out further, I'm kind of doing this sort of CapEx profile. Yes, just without necessarily being full numbers, but just in terms of how you see that kind of profile over the next couple of years.

Yes. Look, I mean I think -- yes, let's reflect back. It's playing out as we expected, as I said. And look, we're investing in the fleet, which is a tangible asset going on to our balance sheet, which has got a good market value as well. That investment in that fleet generates us a good return. And we can see that we're delivering, which are above our weighted average cost of capital significantly and it will generate significant cash going forward. And what we said is that net cash that we generate just from replacing that fleet will increase and increase year-on-year. So the time we get to FY '27, we would expect everything else being equal, sort of generating over GBP 200 million of cash flow, which we can then choose how we want to invest. And that's assuming we bring the age down to around about 28 months. We're not aiming for 28 months. We'll just go to what the market [indiscernible].

Fantastic. I'm going to come back to Martin. On CapEx, and then we'll probably get a little bit faster. But CapEx is good.

CapEx means you generally -- you're growing or doing something good on the fleet. So if you look back in this business many years ago before the merger, CapEx in the Northgate business, low margins, low returns, not very much about the weighted average cost of capital. You look at where our returns now, as Philip said. So if you're disciplined in terms of where you're making investments and when you get new returns, of course, CapEx is good. And I say about this business, you look at the way that this business is valued, tangible net asset value at GBP 1.4 billion of assets on the balance sheet through the fleet. So there are 2 ways to look at it. When you're growing, you're growing and you're growing your CapEx, you're growing your fleet, you're growing your earnings, you're growing your cash flows, okay? So good on a growth cycle. If the economy and the markets are on a downturn, you've got a business here that's very, very strong and defensive because when you're not growing your fleet, you're throwing off excess cash. So in -- I think from 2 aspects, you've got a sort of a very strong position. But the valuation for this business, in my view, is completely wrong. We've got nearly GBP 1 billion of revenue coming through on Claims and Services, which is multiyear contracts with blue chip insurers, body shops and dealerships and so forth, which is a multiple effect. So when I look at CapEx, as CapEx supports the fleet and the fleet is core to all the things that we do, but we've got this things. We've got this sort of service revenue that's coming through. So this fundamentally changed and shifted the shape and output characteristics of this business. So I think there's a lot to look through here beyond just sort of the CapEx and part of the conversation. But yes, good CapEx means generally good growth.

Okay. And I think that's an important message. So let's move away from kind of the CapEx and the matter on to what we've been doing elsewhere. I think one of your requests from IR is to make sure that the message is simplified and understood for people to really get to that. We've been simplifying within the business and be the customer first and the One Road programs in terms of streamlining that engagement with customers. Do you want to -- because it's been a great success in the first 6 months of that. Can you...

It is. I mean we want to make the point that if you've got a happy customer, everything sort of follows. And what we do is not complicated, integrated mobility. So when we break that down, what do we mean? We're providing core services of replacement vehicle whether that's[indiscernible] car, a like-for-like replacement car, an insurer pay car. We're providing repair services to our body shops. So we're fixing people's cars after they've had an accident or an incident. We've got peripheral services like ground site recovery after the accident and fleet management. So these things are all things in an individual vertical, easy to explain. What we've done is combine them together and how was that -- is that different? Well, no, it's actually -- it's a good outcome for customers because if you think you go into a journey where you have an accident at the side of the road, you got one company that comes to makes recovery for you. They take your vehicle to a storage yard, you have to return to another company. We've joined this up and said, you deal with us, you get your service through from start to finish, make it simplified. So for our partners, there's no data leakage, there's no conversion issues. The customer journey is nice and smooth. So that's what we're investing in to make that a very solid story in terms of what we're delivering. And yes, the feedback from the customers is very, very strong based on that. So we're invested in getting those good outcomes, particularly in claims services. Consumer duty regulations came in, beginning of this year. Insurers very focused on getting that right in terms of getting good outcomes for consumers. We're very much about leaning into that and investing in that position. And if you've got no complaints, excellent ratings or satisfaction, then everybody is sort of happy in that process, and that's what we aim for.

So you touched in that. We're now moving over to the Claims and Services side. Sort of in terms of headwinds, tailwinds and actually things have broadly come through, as you said, in terms of that environment. Do you sort of feel that we're now at a place where those headwinds and tailwinds within Claims and Services broadly through from our expectations?

Yes. I mean we signaled in our AGM statement. We talk about sort of lower hire lengths and sort of faster cycle times and repairs. So post-pandemic, there were supply constraints, which parts getting through for body shops across not just for us, for everybody. It just takes longer to repair vehicles and obviously, you have higher hire lengths. So that makes it a slightly elongated process. What we're seeing now as we sort of exit through this period, we're seeing normalization. Yes, we're going into winter, but typically, there is seasonality in Claims and Services because during the winter, more incidents tend to happen, things take a little bit longer again. But what we would expect to see, so it's correlating to what we would expect historic trends and historic norms in terms of hire lengths and repair cycle times. There will always be things to do to become efficient and make sure that we sort of stay on top of our game in that. But yes, I would say close to normalization.