I would now like to hand the conference over to Mr. Graeme Whickman, CEO. Please go ahead.
Well, welcome to the earnings call of GUD's results for the 12 months end of 30th June, 2023. Hey, first, apologies, we're 10 minutes behind time. The information was due to be released actually a full hour ago. We had problems with the carrier pigeon. Its obviously wings weren't strong enough to carry the weight of what is a good result. I'm Graeme Whickman, GUD's CEO and Managing Director, and I'm here with Martin Fraser, the company's Chief Financial Officer. As a matter of housekeeping, we'll have time at the end of the call for Q&A, so if you could hold your questions till then, and then there'll be a recording of this presentation on our website later on.
We'll start the call by Martin and I running through the key messages and the financial overview. I'll speak a bit about the portfolio vision, our ESG efforts, then we'll give you some commentary on Automotive, APG, and Water segments. Then I'll hand back over to Martin to cover financial results in a bit more detail, then we'll conclude at the end with a quick trading update and outlook for FY 2024. Apologies for that late filing, but I'm sure you'll enjoy the read, and hopefully we'll give some good color on the way through. Okay, well, let's turn to slide 4.
To give you a bit of context, and I may have mentioned this, at other engagements, investor conferences, you know, Martin and I, and the rest of the leadership team, have been really working on two thematics through FY 2023, two of them. Managing the macro was one thematic, and delivering the portfolio vision was the second thematic. That was the entire focus for all the leadership group throughout the year. Managing the macro has all been around delivering the key earnings, inventory objectives, while still handling that volatile macro, whether that be, you know, FX movements, or logistics, or supplier, or manufacturing operation challenges. Then the second one, the second thematic, was delivering the portfolio vision, which frankly, was code for the next evolution of our plan.
Meaning that we would drive further rationalization and divestiture as we move towards our ultimate goal of being an automotive pure play, and I'll touch on that in a few minutes. In FY 2023, all segments performed in line, or, or in fact, slightly better than our expectations, which we'd previously outlined. APG stepped forward in the H2. Our aftermarket businesses delivered solid growth and, and their margins continued to hold up. Over the course of H2, we were able to reduce our inventory ahead of our targets that were previously committed. With other associated positive impacts of, you know, earnings and managing gross cash balances, we were able to achieve the debt leverage target of 2x, which you heard from us with a fair degree of monotony through the, through the year.
Finally, our view of the future remains positive and optimistic, if you think about the right-hand part of the slide. We're well positioned with APG to capitalize when the new vehicle constraints, supply constraints, start to improve with demand backlogs and other drivers such as immigration and infrastructure spend that are good tailwinds. Our auto aftermarket business has experienced good growth, we expect the basics of the aftermarket, i.e., the car park aging, to continue to support that momentum. Finally, we've been working on the portfolio, and we'll talk about that later. It's about its simplification and focus as a pure play automotive company. I'll ask Martin to cover the next slide. Martin?
Thank, thank you very much, Graeme. On Slide 5, you can see we delivered revenue growth of 25%, underlying EBIT are growth of 27% as overall margin sales, and underlying organic EBITA growth of 6.5%, which was a pleasing result. Contributions to the underlying EBITA growth were made by all businesses, as margins were held in volatile economic and vehicle supply conditions. In that context, and given the step up in APG in the second half was in line with earlier flagging, this was a pleasing result, especially given the limited supply of new vehicles. With a full year of both Vision X and APG, as well as the new shares on issue following the mid-FY22 equity raise, underlying NPAT A grew by 33% and underlying EPSA grew by 12.7%.
We set out to achieve net debt to underlying EBITA ratio of what... At the time, we called it circa 2x. Not a hole-in-one, circa. And we pretty much achieved very close to a hole-in-one, which is a great result, even after having to overcome accelerated inventory deliveries in the first half, which I'll talk to later on. The results saw us decrease our inventory by AUD 50 million on the first half, and nearly AUD 30 million on FY22. Consistent with the AUD 20 million-AUD 30 million potential we've been calling out for some time, as being possible once supply chains normalize. In addition to a step forward in profitability, the lower net working capital levels over both FY22 and H1 2023, the resultant cash flow conversion performance and a resultant lower gearing levels remains noteworthy.
All in all, a strong financial result. Later, I'll speak to our solid debt funding position, which brings a little bit more color, too. Finally, a final dividend of AUD 0.22 per share was declared, consistent with our prior year and our stated desire to see that net debt to underlying EBITA below 2 x. Back to you, Graeme, who will start on page six.
Yes, just moving on from some of the group financials, as we talk a bit more about some of the non, non-financial efforts that we've been placing in FY 2023. So in past years, we introduced GUD's point of view on our sustainability efforts. Our early ESG journey was seen in three phases: materiality assessments, baseline analysis, and target setting. Then the third phase, where we are now, which is the ongoing measurements of those targets. Last year was the first year where we introduced KMP and senior executive compensation plans linked to select ESG targets, such as employee engagement, safety, ethical sourcing, non-ICE revenue, et cetera.
The sustainability of our, our business and the impact we have on the world around us is articulated by the six key impact areas that are on screen right now. Importantly, detail some of the outcomes achieved through FY 2023 and what's currently in progress. I'm pleased with our efforts on green power activation to head towards our carbon neutral position within our distribution businesses, the enhancement of what is already an already high safety culture with the activities like the psychosocial risk reduction efforts, our efforts on packaging, our supply base as it relates to ethical sourcing. Finally, I'm delighted with the efforts in our pursuit of serving the new energy vehicle market with the launch of our Infinitev operation, serving specifically the hybrid and EV aftermarket.
We've got more to deliver on those 2025 ESG targets, I do feel positive of the momentum we've been building. On slide 7, we detail the portfolio vision summary. This slide actually today is purposely without the typical measures of success that normally attend that slide. I wanted to concentrate on our strategic direction as the importance of the very recent announcement made in early August about the sale of Davey Max, what frankly, is a pivotable moment in GUD's history as we move to be an automotive pure play. Within that portfolio vision and after the sale of Davey, you can see the remaining 6 strategic imperatives. As I said earlier, the second thematic in FY 2023 was delivering the portfolio vision.
Meaning that we took actions such as selling CSM, moving A4A into BWI, rolling Unique into APG. This was with a view to sharpen our portfolio of brands and companies, thus ensuring our financial and human resources can be targeted to support these 6 imperatives, including, though, on how we're gonna organize for success, both at the group and segment leadership levels, and the type of reinvestment required. More of this to come in a future Investor Day. I wanna switch through now to slide 9 and start to unpack some of the performance across the segments. Taking a closer look at the Automotive ex-APG segment, the results on slide 9 show the revenue was up circa 12%, reaching just a smidgen of AUD 635 million.
Our core auto businesses' revenue grew by 8.7%, with a decent split of price and volume. Encouragingly, this came from both new and existing customers and channels. Acquired automotive revenue grew at a rate of 20%, although that represents an extra 5 months contribution from Vision X. The underlying EBIT margin of our core auto BUs was essentially held year-over-year, an ongoing, in my view, positive story in the face of macro volatility. The pricing due to be implemented in Q4 was put in place, and it stuck. We did experience some improvement in the acquired business unit margin, which was largely an improvement in the sales mix in ECB, driven by a switch from polished to powder-coated bull bars.
Sounds quite simplistically, some of the constraints we had were around labor, and that was one way of trying to improve. Our inventory reduction story was a feature of the Auto ex-APG, where we delivered inventory reductions just over AUD 32 million, half- over- half, and at FY22 versus prior year. That's kind of part of the wider inventory reduction story that Martin Fraser touched on, and we'll continue to touch on a little later on in the slides. Turning to slide 10, I just wanna remind everybody the size of the prize, and that prize continues to be strong. The car park continued to grow steadily. It sort of sits to just short of AUD 20 million, up year on year, and this type of growth is forecast to continue.
Importantly, at the same time, we've seen the average age of the car park reach beyond 11 years, naturally also positive for our wear, tear, and replacement BUs. On slide 11, we detail some other critical car park data. As the car park is growing, so does the complexity, and you've heard me say this once before, and I'll say it again, we love car park complexity, and the segment is forecast to shift in favor of SUVs and pickups again, so more complexities to follow.
That complexity in the car park, that wonderful complexity, it's not, not, not often you actually say the words "wonderful" and "complexity" in the same sentence, but it's supported by our products and services, which we estimate to be just short of 80% of that revenue coming from non-discretionary products and services in nature. Importantly, as the year finished, our combined automotive and APG revenue for FY 2023 saw us deliver approximately 75% from the non-ICE category, which was a decent step forward from the prior year. On slide 12 and 13, we highlight some snapshots of progress in two of our automotive categories: of auto electric power management and lighting, and electric vehicle aftermarket leadership.
By the way, we do have some other snapshots of the other segments and categories in the appendices, but I just wanna concentrate in on these. On slide 12, in the auto electric power management and lighting, we ended up with strong revenue growth domestically, with good performance in a variety of channels and new products. I really like the growing opportunity in the truck, RV, and bodybuilder channels. As mentioned in the half year, our international expansion is on a steady path to ensure we have the right building blocks in place. We launched Projecta, Ultima, and the Narva brands in certain jurisdictions, and we expect in FY 2024, we will start to see some modest revenue achievement as we build for the future.
Now, as part of that future opportunity, we have been working on our product complementation strategy rollout, which is frankly, all about Vision X at this stage, both in the US and a little less so, but still in Europe. In support of that, we've been investing in people in those jurisdictions and a stronger global core PD, so product development and program management backbone. Moving to slide 13, we highlight our efforts on new energy vehicles, specifically hybrid and NEVs. Like I said earlier, I'm really pleased with the efforts in FY 2023 in this area. I'm convinced we can live up to that strategic imperative to become a leader in the EV aftermarket in ANZ. Something, I think very few organizations are even beginning to talk about.
Now, we've been moving quickly and quietly in the background and launched the InfinitEV brand, started that operation in Australia, then opened that operation in New Zealand. Our hybrid battery exchange program is gaining momentum, including in New Zealand, where we actually even haven't officially launched in totality. Then from that, we're also turning my attention to EVs. We're also awarded our second grant from Sustainability Victoria, as we explore the commercialization of battery energy storage systems, so BESS systems. Now, even though the NEV car park is not significant yet, we are occupying a leadership position that I think will augur well in the future, and it's also extending potentially into the OEM world as well. Okay, let's turn our attention now to APG. That's on slide 15.
APG's result was pretty much bang in line with our expectations. Just above AUD 58 million pre-group overhead, and just shy of AUD 55 million, including overhead. The interesting half-on-half skew of 54, 46, was within one percentage point of our forecast, which was given all the way back at the beginning of FY 2023. The margin improved year-over-year and half-over-half, driven by some pricing in our retail channel, cost management actions, and some better efficiency in manufacturing. Albeit, still not at efficiency levels we'd like, which is unsurprising given the lingering supply constraints through FY 2023. Actually jumping back to the revenue, we did see that more than double, given the full year contribution.
Interestingly, the half-over-half revenue grew by just a bit under 5%, which is reassuring when you consider the APG top 20 volume was actually flat. That's, as a reminder, the top 20 vehicles by volume that report to APG. It sort of demonstrates some of the share of wallet gains and the expected, trailering new business wins coming through as the capacity increased. We still believe the supply constraints will improve over time, although some volatility still remains. Our customers tell us that they've got elevated back orders and demand from their end user customers still there. And perhaps we can move to slide 16 and 17 to unpack what has sort of transpired in the new vehicle sales market or industry in FY 2023.
Now, on that slide 16, we can see that we're still off that pre-COVID peak rate of NVS, so new vehicle sales. It's inching closer at the total level. At the total level, yeah. What we're seeing, though, is uneven growth, largely due to some brands and models getting sort of freer supply versus others at different rates and at different times and cadences. We are still living in an artificially constrained industry environment. If you take the calendar year data and then turn it into financial year data, this is best seen with the industry up 10%, pickups up at 4.6%.
If you look year-over-year, you can see actually, APG top 20 was down just a smidgen, and yet we'll still be able to deliver a better result. When you take this and you look at the same data with the FY 2023, half-over-half, and quarter-over-quarter, particularly Q4 over Q3 slices, it becomes even more insightful, and that's on slide 17. The top of this slide shows the half-on-half, and as you work through the key slices, you can see that while the total market was up 7%, pickups were only up 1.5%, and APG top 20 was flat. Well, why is that important?
Well, you know, a few slides ago, we detailed the revenue and the EBITDA, and the same period was up 4.7% and 18%, respectively. I'll tell you, it wasn't actually that long ago, in May, when I gave an update at an investor conference, and at that point, the April year-to-date, new vehicle sales volumes were actually down. Now, encouraging in the months of May and June, there were some stronger performances, and it I guess it just shows some of the volatility from month-to-month. This phenomenon is nicely laid out in the bottom half of the slide, where you can see the significant improvement in the APG top 20 Q4-over-Q3, growing at about 7.5%. Ultimately, the so what of these slides is there are signs of vehicle supply improvement.
It's uneven, and from month to month, there still can be some swings. APG has delivered a better result year-over-year and H- and the H2 exit run rate, to suggest a better FY 2024 as the constraints progressively remove. On slides 18, 19, we detail some of APG's highlights. On 18, you can see APG have won, more business. That's a tempo we give every time we update you, and that's improved again. 134 new business wins, AUD 35 million incremental, of which sorry, 24 of which is incremental to the AUD 35 million.
Within that, again, AUD 14 million of that, from wins from functional accessory business that we didn't have before, from Isuzu, Toyota, and Hyundai, you know, awarding us some really important new functional accessories, and that sort of introduces our products to them for the first time outside of towing. We've also been slowly working through which of the APG brands can work in the U.S. market, and in doing so, have taken up some resource to support the engineering effort. On Slide 19, we talked to APG's other strategic growth pillars. While we accept that new vehicle supply will improve and be a tailwind to past recent APG results, we still have been working hard to upweight the non-new vehicle volume related parts of the APG business.
Trailering, that has been a success story, as the Cruisemaster brand sales have grown very nicely and as expected. This on the back of domestic production improvements, and with still more tire capacity to come through as we start in earnest with our new customer conquest and existing customer expansion of wallet programs, remembering we still have quite low market share, so a lot of upside for us here. The last point on the page I'll speak to is the cargo management efforts, which while we've seen a double-digit growth year-on-year, it's still off a comparatively smaller base than the other APG pillars. This has got a longer gestation period, and over time, I'm confident, we'll see this become a decent portion of the APG sales.
Now, before I hand over to Martin to cover off the financials in more detail, let me advance to slide 22 to quickly cover off Davey. As mentioned earlier, Davey's underlying EBIT grew in FY 2023, notwithstanding continued weakness in the non-ANZ markets, which were impacted by, you know, distributor destocking, retailer destocking in Europe as well, due to soft sentiment and drought conditions. The uplift in underlying EBITDA margin to sales reflects change initiatives and some momentum that Val and the team have now put there. You know, the slower sales level and the normalized supply and freight conditions allowed Davey to moderate inventory significantly over there, which was witnessed by the lower segment assets compared to the prior comparable period.
Finally, on August 5th, GUD entered into an agreement to sell Davey to Waterco, an ASX-listed entity. We expect the transaction will complete on September 1st. Further details are available on the ASX announcement or in the appendices after the finance results. You'll see some pro forma information that I think you'll find helpful. Talking about financial results in a little bit more detail, let's hand over to Martin to cover off those.
Thank you, Graeme, and I'll start, ladies and gentlemen, on page 24, which walks through the profit and loss, starting with revenue. We, we can see growth of 25%, even though water sales actually reduced over the year. Automotive and APG grew both organically, but also benefited from another 5 months post-acquisition of Vision X and 6 months of APG, respectively. The second half saw a noteworthy uplift in the APG, but consistent with our flag, in which Graeme has outlined several times already. Importantly, the additional revenue pulled through to a healthy 26.6% uplift in underlying EBITDA, reflecting very conscientious margin management efforts. With a full year ownership in both APG and Vision X, the amortization of customer intangibles stepped up by approaching AUD 10 million on the prior year.
The year also saw the remaining AUD 3.5 million in non-cash APG inventory step up from the purchase price accounting, washed through in COGS. We have excluded that and significant items in arriving at underlying EBITDA, which is up 27% on the prior year. Moving down to EBIT, we can see those customer amortizations that I mentioned, the inventory step-up I mentioned, and the significant expenses, which I'll talk to in more detail shortly. Below EBIT, you can see the full year impact of financing expenses holding both of those acquisitions for 12 months. Now to considering taxation, we see underlying net profit before amortization of intangibles step up by approximately 33% on the PCP and EPSA step up 12.7%.
Now, talking to or turning to working capital on slide 25, and I'll probably take a bit of time here. As there've been significant movements over the past year, we've also included the mid-year working capital position. Given the momentum in inventory over the year, I also want to remind us of what we saw in the first half before we talk about what changed in the second half. In the first half, as freight started to normalize, especially on the corridors from Asia to North America and Europe, demand on our contract manufacturing suppliers in Asia, from their customers in continents outside GUD's footprint, slowed. Consequently, those continents trimmed their inventory levels. Our suppliers were left with idle capacity. They then redirected to fill GUD's orders earlier than we had planned for and allowed for in our standing reorder points and quantities.
In short, we got handed in the first half. This accelerated the fulfillment, as, as we saw with the inventory, but also accelerated because a lot of that happened at the beginning of the first half, it accelerated a reduction in payables. In the second half, the higher inventory level from the first half, combined with what then turned out to be improved ANZ shipping corridor reliability and port clearance times combined with a return to stable supplier conditions, allowed us to reset safety stock and reorder points. Those actions allowed us to reduce inventory by approximately AUD 50 million or 20% in the second half of the year alone. The result was circa AUD 30 million reduction on the prior year, and is consistent with the internal stretch goals we set for the wider GAT team at the start of the year.
The full year inventory reduction is towards the top end of the range of reductions of AUD 20 million-AUD 30 million, that Graeme and I have called out several times in recent reporting periods, with the conditionality that that would be achieved when supply chain conditions normalize. To achieve that in six months is especially pleasing and involved a focused action plan by all businesses to deliver the reductions without undermining our long-term working relationships with key suppliers. I'd like to acknowledge the contribution of all our management teams in delivering that outcome. We have yet to see our creditors levels return to more usual and higher levels due to the lower replenishment type cycle we've been through, although we activated some higher supply chain financing in both the half and the full year at the same level, to largely offset that impact.
We will look to moderate the level of supply chain finance through FY 2024, as creditors return to a more usual level. I'd like to take us to slide 26 to talk about pre-significant items and where we report the significant items below underlying EBITDA. You can see this largely reflects the restructuring impairments Graeme spoke to during the year, including moving Unique into APG, selling CSM, and we also incurred some external costs on acquisition and disposal activity. The costs are mapped on this slide against the relevant segment. Moving on to slide 27, which covers cash conversion, we can see inventory reductions I spoke to earlier, drive cash conversion at 113% from 79% in the last year.
This is really consistent with the performance we needed to deliver to deliver our previously stated net debt to underlying EBITDA target 2 x for the full year. Moving on to slide 28, which is balance sheet. We can see both the gross cash and debt balances full year, with the debt level reflecting the Vision X and APG acquisitions. Nonetheless, net debt is down just on AUD 65 million for the previous year, reflecting the strong cash conversion, prudent dividend payments in FY 2023, and that's all after settling approximately AUD 21 million in deferred Vision X vendor payments. There are no further deferred vendor payments due, just to be absolutely clear, although Vision X still has a 3-year earn-out in play. To the right of the slide, you can see that we've retained a healthy gearing ratio.
We reiterate our medium-term target to achieve net debt to underlying EBITDA in the range of 1.6 x-1.9 x on a pre-lease accounting basis. In the appendices, we outline the pro forma FY 2023 net debt to underlying EBITDA ratio of circa 1.8x , applying the anticipated proceeds from Davey's forthcoming sale. For those who want to understand those ratios I called out, which are consistent with our banking covenants in more details, the maths are outlined in appendices. I'm now gonna take us to slide 29, where we speak of our debt profile. Slide 29 outlines that we continue to have a well-balanced, long-dated profile with a healthy proportion of fixed interest funding. The right of the slide, we've mapped out our debt maturity profile, which has a mixture of facilities and tenors and finances.
Late in the fourth quarter, FY 2023, we renewed the debt, which was due to expire in January 2024, and some, but not all, of the debt, which is due to expire in December 2024. That's on very favorable conditions with our existing financiers, although we did take it to a broader market to ensure that that process was commercially sharp. We'll address the remaining AUD 50 million of debt facilities due to expire in December 2024, during FY 2024. During the year, a small debt facility, which matured during the year, was not renewed. Given the debt reduction during the year, with approximately AUD 220 million of unused debt facilities, well up on the previous AUD 150 million.
We've noted our all-in funding costs, including unused line fees, but before interest swaps on the right-hand side of 4.89%, and it's approximately 4.3% after interest swaps. This has risen over the past year as we have a higher level of unused debt facilities, as I noted before, higher floating rates and slightly higher margins on the renewed facilities, given current market pricing. I'll now hand back to you, Graeme, to finish with both the trading update and the outlook.
Good. Thanks, Martin. Well, we split the trading update into two segments and start with APG's performance. That was strong in July versus prior year. Although early August has started out positively as well. The industry growth does however, remain inconsistent based on some of those supply constraints. I think that they will abate, and I expect the APG top 20 sales to start to be a little bit more reflective of the wider industry growth, as I mentioned earlier on. Our trailering has started out well versus last year, which is a continuation of the capacity and new business wins. We are watching the industry for any signs of softness. However, given our low share, we still see market share gains as a really good opportunity.
Turning to Automotive ex APG, well, they've experienced a solid start across all the key automotive businesses. Although the growth has been inconsistent across some of the BUs and geographies, however, domestically, we're seeing both large and independent resellers of our products grow at similar rates, which is actually very reassuring. The end user demand feedback is encouraging, with workshops reporting sort of decent inquiry and bookings out to 2 to week, 2 weeks or so. Now let's just finish on our outlook for FY 2024. Again, starting with APG, which is on slide number 32. As mentioned earlier, we are seeing signs of improving supply constraints as we exited Q4 FY 2023, and we believe this will continue. However, not necessarily to normal levels, until perhaps late FY 2024.
We remain very positive in APG's ability to deliver their business case targets as the OEM and APG top 20 supply constraints normalize. The historic sales trough you see in that graph due to the supply constraints, still sits in the background and represents a significant delta of unmet demand. We still think as the supply constraints normalize, we'll get, and I said this once before, we'll get an unfair share of that backlog given some of the challenges we've seen with some of our competitors. We are expecting, ultimately, that we would deliver further revenue and EBITDA growth in FY 2024 as that supply improves for APG. Shifting to Automotive.
Well, in terms of Automotive ex APG, we're of the firm view that our Automotive BUs will benefit from a steadily growing, aging, and robust car pack, add in our brand strength and our product development tempo, and we're confident with our prospects. We will, however, continue to reinvest with some discipline in our offshore operations for auto elect, power and lighting category, and the ANZ sort of new energy vehicle opportunity with hybrids and BEVs with our Infinitev organization to tap into that future aftermarket. Then finally, the group level, as you would expect, will continue to focus on margin management. Part of that balancing act will be driven by the dynamics of the FX, which a large proportion is hedged for the H1 period.
This focus on margin needs to accommodate the inflationary pressures, and also the step up in corporate costs to support, yeah, the robust growth, both recently experienced and also in the future, anticipated. As you might expect, and unsurprisingly, we're not, we're not providing guidance, given there are so many moving parts at the moment, and we expect to provide further commentary to our shareholders at the October AGM. With that, I'll conclude our, our material, and pass back to the moderator.
Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the 1 on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. Your first phone question comes from Mitch Sonogan with Macquarie. Please go ahead.
Good morning, Graeme and Martin. Thanks for taking the questions. Can you hear me clearly?
Yes, Mitch.
Yep. Thanks, guys. Just the first one, just on APG. Graeme, the second half, EBITDA obviously had a good step up, AUD 30 million. How should we think about that as a full year run rate into 2024? Can you maybe just talk to any ongoing improvement you'd expect there, and are there other tailwinds such as lower input costs, freight costs, et cetera? Can you maybe just provide a little bit more color about how you're thinking about the growth in that business into 2024, if you do see volumes improve? Thank you.
Yeah, thanks for the question, Mitch. As you can tell, you know, we're energized by the improvement in the second half. We, we predicted that, so it wasn't as if it was a surprise to us. We knew that there were certain input costs rolling off, but we still had to manage some of the inflationary pressures in different parts of the business. You know, clearly, we're still not operating at the efficiency level that we'd expect, because throughput of the volume isn't, isn't where it needs to be relative to supply constraints. But you can see we're able to pick, pick our game up and just advance the ball further in the second half. That on the back of, as I said earlier on, frankly, a flat APG top twenty.
You can see there was a bit of mix coming through there, a bit of efficiency coming through, and then a little bit more trailering coming through. No surprises there. I mean, you could probably say that the exit rate at, at the 30, or the 32, depending on how you view it, compared to the investment thesis, is encouraging. I've said earlier, that we do expect to improve both the revenue and the EBIT, and you can see a strengthening in the margin rolling through in that second half as well. We're not, we're not here today to give any particular number or guidance specific on APG, but I'm, I'm feeling confident that we'll see improvement.
What I will say is it won't be to the investment case of sort of AUD 80 million, because the industry is not supporting that at this point, and we need to see that come through. I'm expecting that perhaps in the, the latter part of FY 2024, as we truly get to a, what is a, a normal sort of industry state.
Yeah. Thanks for that, Graeme. Maybe just a quick question on the Automotive ex, APG. Obviously, you've had customers reducing inventory through FY 2023, including, obviously GUD itself, but-... Does that have any further to play out in FY 2024? Maybe just provide a little bit more color on any cost pressures you're still seeing in that business. Do you have any implemented or planned price rises to offset that in FY 2024? Thank you.
Look, I, I think, and it's very hard for me to speak on behalf of customers, and, as you know, I don't. Our, our expectation is that inventory out in the total channel is probably where it needs to be now. We probably saw a little bit of that. You can see the half- on- half, Mitch, where it was relatively flat, right? That's primarily due to some destocking in that second half. Well, Matt and I, and the rest of our leadership team, are not sitting there with any expectation that that would go any dramatically lower. That's the first thing I'd say. In terms of the, the cost positions and, and how we balance the margin, 'cause at the end of the day, we're, we're managing margin, right?
We're, it's, it's revenue, margin, and cash at the end of the day in our heads, right? That margin, we expect to hold. There are some swing factors there. We, you know, we put some pricing through in Q4 that was activated, as I said earlier on, and it stuck. The swing factor here for us, Mitch, is gonna be FX. You know, in the second half, we're, we're hedged quite securely in the first half. We're stepping off of maybe a 71, 72 to maybe the late 60s, but nevertheless, we've, we've got that covered in, in our view. It's where the exchange sort of sits in the second half, and if it stays where it is today, then we will be we will be coming and pricing in the market.
Let, let's see where that goes. I mean, we've got most of it covered in terms of the inflationary expectations. The other thing, Mitch, is that, you know, through COVID, we, we didn't shortchange our employees. We kept the cadence of, you know, wage increases, and we haven't got big wage catch-ups or any of those sorts of things. We get a little bit of an offset with the, the freight rolling through for the full year. That's encouraging as well. We think we can continue to balance, balance the margins effectively, Mitch.
Thanks, guys. That's all for me.
The next question comes from James Ferrier with Wilsons. Please go ahead.
Morning, Graeme and Martin. Congratulations on the result, and thanks for your time. Can I ask about the G4 business in particular? You know, you talked before in answer to Mitch's question about APG and sort of where the trajectory looks like from here, and ultimately you've got that AUD 80 million line in the sand from the time of the acquisition. For the G4 business, can you just remind us, perhaps where it's trading now and where you think that upside ultimately sits for that business? Because it's clearly still constrained by new vehicle supply as well.
Yeah. You, you got two things rolling through there, James, and, and thank you for asking the question. Clearly, we've got new vehicle constraints that rolls through there, right? Same, same impact as it is for APG in a broader sense, so that's a constraint. Then you've got some further constraints, and, and we've spoken about this in the past, but I'll just remind the, the listeners, is that, we have some manufacturing constraints that sort of sit in the likes of, say, ECB, that are far more impactful than even APG. Meaning that, you know, we have parts of the bottlenecks and parts of the manufacturing process there, where we are sometimes only operating at 15%-20% of its capacity. I'm thinking about things like welding and polishing.
That's much, much harder to contend with with a business the size of ECB, as opposed to, say, APG, where you can have a little bit of a swing, although we are talking about skilled trades here. That's been a massive challenge for us for a period of time. Interestingly enough, James, and I think we said it before, we have seen materially different absenteeism and vacancy rates between our Queensland businesses and our Victorian businesses as well. What we were able to do in the second half was to start to force mix from a sales point of view, a higher, a higher level of product that were powder coated as opposed to polished, meaning that we weren't so reliant on the polishing part.
Sorry, sorry to be so specific here, so reliant on the polishing, so, so alleviate. That's why you saw it bounce back a bit at a margin level and the like, but we're still fundamentally constrained. We cannot, and I won't say what the bars per day number is, 'cause I don't, you know, from a commercial reason, that's, that's a bit off. You know, there are times when we're at best 50% of our, you know, jobs per day in terms of ball bars. So that, that there is really the biggest swing factor, James. We saw some improvement in the second half because of that force mix, but ultimately, we're trying to find, urgently, ways to try and remedy the bottleneck. These are not easy things to do in the short term.
Yep. Yeah, understood. I guess maybe to use that sort of circa 25% core automotive EBIT margin that, that you've achieved consistently.
Yeah.
use that as a benchmark, how far away is G4 from that?
Look, when we bought the businesses, we said that it wasn't gonna operate in the same margin profile as our core, just to be very, very clear. We felt that that was generally a 15% to 20%, and I won't put a specific number on it in terms of EBIT sales type margins. You know, in the, in the exit rate, if you look in the second half, we're sort of slap bang in the middle there. You can see where it was in the prior half, and that, it's almost a story of two halves to a degree, as we've at least been trying to pivot the powder coating approach, with a few other bits and bobs that have been sort of sitting there.
We've also got plans to, to take some of that capacity and push into Thailand to help our ECB. It's a work in progress, but, you know, I would say, James, in that sort of range to 15-20 would be the range that we would find acceptable, given what we paid for it, and the multiple we paid as well.
Yep, understood. Thank you. Maybe a couple of questions for Martin. With the water divestment, are there any costs that remain in the group and need to be reallocated?
Yes, James. You know, the water result you see there is, is after some corporate overhead, circa AUD 1 million. That's, you know, largely Graeme and I, and a few other people, and we've, we've leaned in pretty, pretty extensively last year to support the business improvements there. We're gonna redirect that resources to other growth corridors, that, that overhead is, is not gonna be pulled out of the business.
Yep. Okay. The cash conversion guidance for the year ahead, does that include the expected impact of unwinding the factoring?
To a more typical level, and we've called out a more typical level, AUD 10 million. For us, a more typical level is around financing things that are new products. We've yet to, you know, the way of building up the stock in anticipation for launch, so we don't have any profit against it. That's what we normally use it for. Yes, it would bring it down from AUD 23.5 million to AUD 10 million.
Understood. Then finally, the AUD 6 million investment in core automotive OpEx that you referred to in the outlook statement. How incremental is that to 2023? Is that a full AUD 6 million of incremental spend, or, or is that sort of similar to what you invested in 2023?
No, it's not, it's not similar, but it's not incremental, James. We probably, it'll be in the region of 3-4 incremental. If you think about, we've also got some other numbers later on in the deck where we talk about the corporate overhead as well, which is about AUD 1.5 million also. You've got to put those two numbers together if you're starting to try and think about the, the overall sort of, OpEx delta versus this year.
It's still, still best guess, because if we're seeing encouraging signs, we may choose to go harder for medium, medium growth. At the moment, it's our best 50/50 call on that, James.
Okay, got it. Thanks, James. Thanks for your time.
Thank you, James.
Your next question comes from Tim Plumbe with UBS. Please go ahead.
Hi there. Morning, Graeme and Martin. Thanks for taking the questions. Just a couple. Just want to go back to the APG question before, but more around sort of the model mix and the comment you made in the trading update around, you know, APG top 20 models have not grown at the same pace as total industry. I mean, the last couple of months, range has done over 5,000 a month. Obviously, Toyota's been a big headwind. Is that what you're kind of referring to there, is the Toyota has been such a headwind sort of last 6 months, that, you know, those numbers look a lot better the last couple of months and is expected to continue to improve? Looks like overall model mix within APG has been getting better, particularly through the progress of the half. Is that a fair comment?
Look, I think, I think in generality, Tim, that's correct. Like anything, there's always nuances, but in generality, that's correct. I mean, you know, if you went back to slide 17, that's the story, right? At the end of the day, you can look at it half-over-half and quarter-over-quarter, and you can see with a flat, half-over-half, a little bit of pickup rolling through, but then it's, it's really the APG top 20, the Q4 over Q3, and you can see that starting to roll through up 7% quarter-over-quarter. Yes, there's, there's this nuance around our customers and Toyota and Ford. It's not just them, right? We have decent volumes from Mitsubishi and a few others, which are up and down.
Later on in the appendices, you'll see that we've called out that top 20 in more granularity, so you can really get a flavor of what's up and down. It, it kind of gives you the, the story that you're, you're looking for, but just with that little bit more granularity and a little bit more accuracy.
Got it. Thanks. Just a second one on APG. You'd called out, I think it was an incremental AUD 16 million of revenue picked up by the business since the acquisition. Roughly how much of that, you know, landed in the second half of 2023? Then beyond that, AUD 16 million, what does the pipeline of new contract opportunities currently look like over the next 12 months to APG?
Well, look, you've reminded me of a very good point. When we give you those numbers, they're not necessarily landing in any particular half or quarter, right? The-- some of that revenue, incremental revenue, could be coming later this year with a launch of a vehicle, an upgrade of a vehicle. Sorry if that's misleading to you, but it's not revenue necessarily delivered in, in the next or the half just gone, as an example. This is more a broader view of how it's coming. And then, the second part of your question, in terms of some, you know, big changes in our customers, obviously, we don't talk about any specific model launches. Look, it's probably a bit more of a steady state in terms of competitive launch out there.
You know, Mitsi, as an example, have announced their Triton launch that will roll through. Look, Mitsubishi is a very good customer. It's sort of in the same category or approaching the same category as Ford in terms of the number of products we have on some of those Tritons. You know, Toyota, as an example, they've been speaking about a new Hilux, there's no details nor any timing, it's not clearly our place to talk about our customer's launch. That would be very dangerous for us. Look, there is some stuff on the horizon that looks interesting to us, I think we'll have a fair crack at that.
I think evidence, evidence of functional accessory wins in Isuzu and Toyota and Hyundai would, would suggest to you that we can win business beyond, towing and other OEMs.
Got it. Thanks. Maybe just one last one, just on the U.S. expansion in sort of the core auto business, and I sort of take your point before that you're not betting the farm on it. But any update there on progress around distributor and reseller traction in the U.S.? And then I think you'd said you'd got some headcount and costs in place. It was probably an earnings drag through the half. Does that continue to be a bit of an earnings drag into 2024? I think you called out another AUD 6 million sort of investment. How do we factor that into the prior sort of comments around U.S. expansion and investment?
Yeah, the, the, the AUD 6 million in OpEx is not all incremental, so that sort of refers to something I just mentioned before. It's probably about 4 or so incremental there in OpEx, which is targeted really around what you've just described in terms of the offshore piece and also domestically, what we're doing with Infinitev and the EV brand. Then there's another AUD 1.5 million in corporate overhead. You've probably got about, you know, AUD 5, AUD 5.5-ish incremental true between those two numbers. The point here is that we haven't, we haven't put in our projections any significant revenue in FY 2024. I think I've said earlier on modest, that we would start to see some achievement outside, I think, of Vision X.
Obviously, Vision X, with the product complementation strategy, is separate to what I've just said. We've launched Ultima, we've launched Projecta in the U.S. We also launched that in, in Europe, and we've actually just launched Narva in Thailand, where we have the rights more recently. It's a bit of a small bet in Asia, a larger bet in Europe, and a bigger bet for us in the U.S. When I say big bet, contextually, we're not betting the farm, as you pointed out. The majority of that AUD 4 million, the AUD 6 I spoke about, is primarily in support of Europe and the U.S., and then a little bit domestically, clearly for Infinitev.
Understand. Thanks for taking the questions.
Thanks, Tim.
Your next question comes from Russell Gill with JP Morgan. Please go ahead.
Hi, guys. I just wanted to... A couple of questions, just to talk through the working capital movements. You obviously made, you went into some detail about the big change this year. You made some comments, I guess, in there about slower repurchasing from customers. I was hoping you could possibly go into a bit more detail. I guess, you're a much bigger business now with a lot of different products. Just maybe what, what product ranges you're seeing there and how you're confident that it's not an underlying demand challenge, and is just a genuine you know, I guess, industry normalization of inventory?
Yeah, look, we're, we're watching the, the end user for a start. As you know, Russell, we have, we have good visibility to certain parts of what are important wear and tear end user customers, and that, that's kind of reassuring. The other thing I'd say, and it was a point we made actually, maybe I didn't make it well enough, but what was reassuring in, say, July and as we approached going to August, that we're seeing very similar growth levels between both the large resellers and the independents. We have businesses, as you know, that serve the independents, which, which are frankly, those businesses are almost like the canary in the coal mine for us before the large resellers. We're seeing no demand fatigue in that regard, which is encouraging. That's, that's the first thing I, I'd pull out.
The other thing that probably gives me a little bit of confidence is the dynamics as it pertains to July and the first part of August, and where we're seeing growth come from and from what particular customers. You can almost see kind of a behavior going in and a behavior going out, depending on the customer, and that gives me confidence as well. We're seeing obviously that growth translate into, I think, a stronger and more robust car park outcome anyway, Russell. It's kind of physics in my mind that says: We've got a larger car park this year. We've got a car park that's gone from around 10.6 to 11.13 in terms of its age.
That tells me that the fundamentals are sitting there, and we've been able to outperform system growth consistently since I've been here, and before me as well, it's nothing to do with me. I think we, we can continue with that. I'm not seeing any wild swings in any particular channel or customer that would suggest we've got suddenly some very significant demand fatigue that would be worrying me.
I just, I guess, combined on a 2-part question: If your, you know, the interest rates today are, I guess, 2x what they've ever been since GUD started making lots of acquisitions, particularly in, in probably a little bit more discretionary style automotive parts, are you seeing any movements, firstly, in, in trading down within categories across, you know, some of your upgrade-type categories? Then secondly, are you seeing any pressure, given those high interest rates from customers, you know, wanting extra financing for them, funded by you guys, and, and how you'll approach that over the next 12 months?
I'll take the, the, the last one first. No and no. Put bluntly, you know, we, we love our customers to death, but we're, we're not a bank either. You know, we're in a position where we're very comfortable with those trading terms. Don't expect them to change. Then to your first part of your question: Look, on the edges, there, there's talk of, you know, a bit of flight to value, a well-used term, not just in, in our industry, but any other industry. At the same time, I mean, so much, so much of our product is, sits in that non-discretionary space.
So it goes back to that same maxim, which you, you know well, Russell, is that as long as cars are being driven and as long as cars are being serviced, then the, the portfolio of brands we have, we are well positioned. There's, there's no escaping it. The, the, the other nuance that you brought forward was, you know, a sort of a discretionary purchase. Even the, the, 21% of the, what we consider to be discretionary, they're all about upgrades. They're, they're largely things like, you know, if you bought yourself a Land Cruiser and you want to tow something, more importantly, you need to have bigger brakes. Well, that's a DBA upgrade, so we consider that to be discretionary.
I'm not sure that it's the truest sense. I don't think, you know, we're, we're right in that discretionary s- spot that you, you talk of, but there's probably a little bit of a swing factor there. I think the last, a corollary to this, sorry, it's a very long answer, is potentially your view of how new vehicle sales might be impacted by interest rates. I've said before that one of the key drivers when I was running an OEM was that if interest rates started to get towards the 10 mark when they were writing the paper, then you might start to see some demand fatigue. I think there's a massive unmet demand anyway, I see that in your own reports, from, from JP. At, at that point, you'll find that OEMs will start subvening interest rates anyway.
There's no ex- concession spend in the market. You will notice that. If there are any demand fatigue, then what the next thing you'll see is OEMs start to spurt a little bit of variable compensation there to try make sure that the, the industry continues. That's a, a point of view that you didn't ask about, but I think probably sits in some minds of people as well. Thanks for the question, Russell.
Thanks. Great, and just a final one, while I've got you.
Yes.
Just Martin, just to understand, maybe I guess, the, I guess, the waterfall bridge into, into 2024, we're seeing container rate, you know, price normalization, a significant drop-off, I guess, in freight costs. I know you guys do bulk buying and, I guess, forward buy a lot of that. Appreciate there's movement in FXs as well, just to manage that gross margin. If FX rates do remain flat from here, and you've got that tailwind of that freight coming off, what sort of price rises would be required over the next 12 months on, I guess, on a blended basis to get you kind of in that GM flat type territory?
Yeah, great question, Russell Gill, I'm not gonna use a public forum like this to tell our customers what we're gonna come to them with price increases if nothing changes. Suffice to say, the price resets we did in the fourth quarter of last year, you know, were very, what I would consider to be responsible. We didn't, we didn't exploit our position there. They were, they were very fair to the market. They, they took into account currency, which was then around about AUD 0.69. They took into account some of these cost downs as well. That's secured. We took a lot of currency at AUD 0.685, and we had a little bit of currency still on foot in terms of forward FX instruments, so we're really well-placed in the first half.
If it stayed at this level, yes, we're gonna come back with price increases, notwithstanding the containers are down. As I said, you know, I think, A, we're not gonna call that out, but B, because we've been modest all the way through the different cycles, we're very confident that we'll have the pricing power to, to address that and hold margins through 2024. That's what we're looking to do. We're not, we're not looking to grow margins, but we're very resolute that we're not, not gonna sit here and just let the macroeconomic factors dilute our margins either.
Great. Thanks, guys. Congrats.
Thank you.
The next question comes from Sam Teeger with Citi. Please go ahead.
Good morning, Martin, morning, Graeme. Thanks for the presentation. Following the Davey sale, where does APG need to be at before you're comfortable doing another transformational acquisition?
Look, I think, great question. Thanks, Sam. We've been pretty consistent that we would like to see the performance of APG at a rate that we committed to. You know, that, that's been our very clear message. Look, we've got an exit rate probably sitting at, you know, 63, 64, 65 pre-corporate. Obviously, gonna push that down. You know, that's starting to get closer and closer to that 80. But there are a few things to, to transpire in terms of industry size, cost abatement, and, and, and obviously the, the intending efficiency. That's kind of how we're characterizing our thoughts.
If we turned to smaller or bolt-on acquisitions, you know, we continue to have been watching those and working with those, and you've heard the range we want to operate in, in terms of our leverage. You know, if we can accommodate that, then, you know, certainly that's something we would turn our attention to. The transformative, pretty clear, we'd like to see the run rate be at that space of under 80.
Got it. Sounds good. Just on the automotive updates, ex APG, when you say not consistent growth, where are you seeing the weakness? What's driving it? What's the risk that whatever you're seeing starts to spread to some of your better performing businesses and geographies?
Look, we were just being very transparent. The point here was, it's not alarming us, it's just that there was variability in the result. Frankly, it's probably more a reflection of the behavior of some of our customers as they, you know, entered into the, into the close and how they started the year. It's not, it's not uncommon. It's a little bit more volatile than norm, but, you know, you can tell in my voice and my tone, it's not something that, that worrying me. It just there was a bit of diversity in it.
Okay. Just on the recovered debt, are those covenants related to APG earnings or group earnings? Are there any kind of unusual terms or covenants in them that we should be aware of? Just conscious, maybe quite a bit out of the money for the financer.
Yeah, so our covenants work on a GUD Group basis, Sam, and they're consistent with those 3 measures that were put there. The banks would not want me to tell you exactly what they are, because we might also have better terms than other people of our profile, because they also do reflect the quality of management when they set covenants. You know, we have nothing, which is what I would say, uncustomary in any sense whatsoever.
Got it.
They're very safe, very secure. We've done a lot of work and to make those covenants as borrower-friendly as possible. We even stepped forward in the refinance we did in Q4, and again, improved them to make them even more, you know, friendly to GUD than they were before. We'll continue to do that at each refi. They're very comfortable, our financing position and the covenants. There's nothing of that I would say you need to worry about, and no allocation down to a subsidiary segment, whatever level.
Okay, excellent. Thank you, Martin. Thanks, Graeme.
Well, thanks, Sam.
The next question comes from Elijah Mayr with CLSA. Please go ahead.
Good morning, Graeme and Martin.
Uh.
Just a couple quick ones from me. Maybe just following on from the repurchasing, question we had previously. Just in terms of, I guess, the inventory levels, you noted that with your sales of GUD, it's at a level that you're more comfortable with. What are you seeing, I guess, from the customer perspective? Are you expecting further destocking and lower repurchasing from your customers, I guess, into FY 2024?
No, I think the short answer is no. you know, I think our customers, and I'll speak in general, not on any level of specificity, have expressed that they wanted to achieve, certain inventory targets. I'm assuming they've hit them. Some of those are public, some of them are not. Frankly, I don't, I don't see any significant systemic concern around future inventory positions in the channel relative to where we are now.
Excellent. Thanks, and maybe just a quick one. Just at, I guess, an industry level, do you think there would be any impact, I guess, widely on, on vehicle sales, particularly in your top vehicles, with the change in instant asset write-off for this financial year?
Look, I'll put my old hat on. You see these types of schemes come in and come out, so you'll see sort of some episodic spikes, which might pull forward a little bit, but then it returns to the norm. Generally, if you look at it on the long, long run, you'll see a far more consistent growth trajectory up until obviously supply constraint and, and bloody COVID, and more importantly, Ukraine. No, you, you'll see things be pulled forward, and then it'll drop away in the next couple of months, and then it'll, it returns. Because fundamentally, there's still a need for vehicles, right? If you think about the S-curve in this market, if you think about the, the fundamentals that drive the industry size and the shape, they don't go away just because the asset right finishes on a June 30th.
No, I'm not feeling overly concerned by any stretch about that. I've got a strong belief in the fundamentals of the drive in the industry. If that changes, I mean, if we enter the GFC or we suddenly there's no immigration or infrastructure and housing completely stops or whatever the. You know, there are four or five key drivers, Elijah, of what drives the new vehicle market industry, but I'm not seeing any of that. We're certainly not getting that from our customers, who, frankly, have a much better view than we do. I can draw on my past OEM experience, but they're right at the coalface. They're speaking to their dealers. The dealers are speaking to their customers.
They've got a bunch of economists sitting there trying to plot out what their industry planning volumes are. That's sort of the feedback we're getting from them.
I think it's also just worth adding that right throughout that period, the OEM couldn't get enough product. You know, the backlogs are record. Even if there is a part of the segment that will retreat because they accelerated or what have you, for instant asset write-off, there's still a quite an unmet demand for people that weren't driven by that. And we know that from just the difficulty in replacing our own corporate fleet. You know, I don't think, you know, if it was 3 years ago when capacity always exceeded demand, I think it would be a fair risk. At this point of the cycle, I don't see that as being a risk.
Perfect. Appreciate the color. Thanks, guys.
Thank you.
Thank you. We'll now move to webcast questions. Your first webcast question is from John Campbell with Jefferies. Can you give some more detailed context around the -250 BP margin contraction in acquired, acquired automotive? Do you see this as a semi-permanent step down?
Look, that's a good question. I think actually we probably in part already answered it, because we're talking about what was holding back some of those businesses, specifically G4, and one of the analysts asked that earlier on. You know, what you're looking there, I guess, is the comp year-over-year. You talk of the delta. What you're really comping is some pretty tough moments, including the first half. We've been able to I think the more important number to look at is what we've been able to do in FY 2023, half-over-half. You can sort of see that it lifts from the thirteens to the seventeens.
I, I kind of talked earlier on, John, about what my expectation is around where that margin profile should exist, sort of in between that 15% and 20%. That probably signals to you where, where our view of success is, as opposed to where it was in the prior prior year. We've got a lot of moving pieces rolling through here in terms of labor shortage, absenteeism, inefficiency in the plant, and this sort of more broad new vehicle supply. Those businesses have got some particular challenges that are even greater than APG because they're smaller and therefore more sensitive to the labor movement.
Your next quick question is from Shaun Weick with Wilson Asset Management. If supply is normalizing late, FY 2024 is AUD 82 million-AUD 84 million, EBITDA business case for FY 2025 for APG achievable?
Oh, look, we said this, a similar sort of sentiment, at the half and at the full year last year. If the business case fundamentals return to what we were looking at when we purchased the business, then my answer is yes. And that, that pertains to, you know, three or so really important factors. One being new vehicle sales and the industry size, and importantly, the industry segmentation. That's the first thing. The second thing is, when we bought the business, we had a point of view around the cost positions. Obviously, they've changed a little bit, but some up, some down. And then the third thing is around efficiency. If all those things, three things came to pass, Shaun, then we would expect to be delivering our commitments.
Thank you. There are no further questions at this time, and I'll hand back to Mr. Whickman for closing remarks.
Okay. Well, thank you. Look, again, apologies for the fact that we were delayed 10 minutes, and apologies that many of you received the information just as we're starting, which means that obviously that puts you in a little bit of a rear guard action, trying to assimilate the information while listening to us. We will have time with you through the course of the next few days. We promise to give you the color that you're looking for, but just please indulge us with that, the technical challenge we faced. You know, before we sort of finish, I wanna take time to call out the leadership team in GUD, who worked super, super hard on those 2 key themes of managing the macro, and delivering the portfolio vision. I mentioned that before.
Then to each of our employees across the varying geographies, and they actually do listen in and, and read the transcripts, and we wouldn't have been able to deliver such a good result without their diligence, their commitment and effort. Thank you to them, to, to you and the board, and Matt and I are very, very appreciative. Finally, I do note that there are additional slides in the appendices that address the sale of Davey. I know people will have questions there, so we tried to set hat out very carefully. Provide some additional business snapshots and some of the banking covenant math and, and other such things. At the end of the day, I wanna thank you, listening in today.
Thank you for the questions, and we look forward to expanding on the result as we traipse around and do our roadshow. Thank you.