Good morning, and welcome to the Lovisa Holdings Limited full year FY22 results briefing conference. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star one again. For operator assistance throughout the call, please press star zero. Finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Mr. Victor Herrero, Chief Executive Officer, to begin the conference. Mr. Herrero, over to you.
Good morning, everyone, and thanks for taking the time to dial in. On the call today, we have our CFO, Chris Lauder, and myself, Victor Herrero. As you are aware, we published our full year results to the ASX this morning, so we would like to talk to you through them. I will now do a page turn through the presentation, and we are happy to take any questions at the end. Before we get to the discussion on the results, I would like to start with a recap of the business strategy included on slide four, which set out the keys of our success to date and our focus for the future.
Our strategy continues to be focused on the continued global expansion of our physical and digital store network, and ensuring that we are investing ahead of the curve to be able to execute on our growth objective in both existing as well as new markets. It has been amazing to get to know this business and the people that make it what it is, and the financial results achieved for fiscal year 2022 are evidence of the strength of the team and the amazing potential of the business. If we turn to page 5, we will talk through some of the details of FY 2022. Our sales performance was a highlight, with the strong sales momentum from our first half able to be maintained throughout the year, delivering full year comparable store sales of +19.9% after +21.5% in the first half.
This combined with the benefit of net 85 new stores open for the year resulted in total sales for the year being 59.3% up on FY 2021. Just to remind all of you, fiscal year 2022 is a 53-week year for us, so the growth percentage I refer to will be our 53 weeks fiscal year 2022 versus 52 weeks on FY 2021, unless otherwise noted. We saw a strong improvement on our gross margin in the second half to take it to 78.9% for the year. Combined with tight cost of doing business management, this helped to deliver EBIT of AUD 79.7 million, up 87% on prior year, and up 81% on a 52-week basis.
We have included a breakdown of 53 weeks versus 52 weeks performance of the business at appendix 3 for information purposes. Also note that all of the profit numbers we will talk about today and included in our presentation are removing the effect of the new lease accounting standards so that they are more easily comparable with prior years. Our global rollout remains a key focus with a net 85 stores open for the period, driven primarily by continued U.S. store rollout, with the U.S. market trading 118 stores at year-end. Pleasingly, we were also able to open two new markets in June 2022, with our first stores in Poland and Canada now open and trading. Cash flow from operations was AUD 96.7 million and cash conversion at 99%, reflecting solid working capital management.
At the end of the period, we held AUD 21.2 million of cash and no debt. As a result, the board have announced a final dividend of AUD 0.37 to be paid in October. If we now turn to the financial overview on page 6, as I note earlier, revenue for the year was up 59.3%, with comparable store sales are up 19.9%. Gross margin were higher, benefit from favorable currency movement and price increases. Our cost of doing business well managed despite a trading disruption early in the financial year and continued investment in team structures, which resulted of our EBIT being up 86.6% to AUD 79.7 million.
The strong performance for the year meant that we are able to finish the year once again in a very strong balance sheet position. If we turn to page 7, you can see the outstanding sales performance for the year that shows a return to the sales growth trajectory that we had been on pre-COVID, with the benefit of a store network expansion combined with the strong comparable stores sales, driving the overall sales growth of 59.3% on prior year. On page 8, you will see our sales by region. The first quarter of the year was heavily impacted by temporary store closures in Australia, New Zealand, and Malaysia.
Pleasingly, the Australia and New Zealand markets were able to recover well after the store reopened and deliver a strong comparable store sales growth to offset the impact of the sales disruptions. This was also the case in South Africa, with the market recovering well from disruptions early in the year to deliver growth of 35% on prior year. Sales of our Asia market continue to be slower to recover as a result of low tourism and low mall foot traffic. However, despite this, we were able to deliver sales 36% up on last year and a strong turnaround from -11.6% in the first half.
Our European business grew substantially compared to prior year, with the annualization of 87 stores acquired in FY21 as part of the beeline acquisition and further store openings across a number of markets in the region, including our first store in Poland, opened in June. The increased store network in the US and good comparable store sales growth helped to deliver a 91% increase in sales in that market as trading conditions improved.
Turning to page nine, gross profit was AUD 362 million at a 79% gross margin, up on last year by 220 basis points with the impact of continued high freight costs offset by the benefit of favorable rates, hedge rates and in the half comparing to prior year, and more importantly, the benefit of price increases up through the second half of the financial year. Recently, the price adjustment has been well received by our customers and as a result, have contributed to both sales growth and growth margin expansion. I will now hand over to Chris Lauder, our CFO, to talk through the cost of doing business, cash flow, and the balance sheet.
Thanks, Victor. If we turn to page 10, we'll talk about our cost of doing business. Cost of doing business for the year was higher than prior year at 58% of sales, impacted by continued higher logistics costs and general cost inflation, as well as the impact of the increase in executive remuneration costs with the CEO long-term incentives cost and sign-on bonus, resulting in total executive remuneration costs being AUD 16 million higher than prior year. Excluding this increase, cost of doing business would have been 55% of sales below FY22 and more in line with pre-COVID levels. This outcome also includes further investing in team structures to help drive future growth opportunities and the cost of setting up a number of new markets in the second half of the financial year.
Just to discuss the CEO LTI cost a little further, the accounting treatment of Victor's LTI plans requires the amount of each tranche of the LTI to be expensed over its vesting period based on current expectations of how much will vest. As a result of the annual vesting profile of the LTI plan, this results in a higher expense being recognized in the first year of the three-year plan, with the final amount recognized for each tranche determined at its vesting date and trued up at that point. Going to page 11, you will see that the cash generated by the business has again been strong, with cash from operations before interest and tax of AUD 96.7 million for the year, reflecting cash conversion of 99%.
Capital expenditure for the period was AUD 34.5 million, predominantly from new store fit outs, which represents a significant increase on the spend in the prior year as the store rollout regained momentum with 104 new company-owned stores built for the year. Cash tax payments were again low, with installment rates lower due to the lower taxable profits in prior year and final Australian tax installments for FY22 due to be paid in the second half of FY23. Cash taxes are also lower relative to profit as a result of the increased share of profits being generated by newer markets with historical tax losses and therefore no cash tax payable.
These factors combine to deliver closing net cash of AUD 24.2 million, down on prior year as a result of higher dividend payments in the financial year. Turning to the balance sheet on page 12, you can see that it remains strong, which has allowed the board to announce a final dividend of AUD 0.37 per share payable in October, franked at 30% as a result of the lower Australian taxes being paid at present. As we have said previously, the board will continue to assess dividend levels each half year and determine the appropriate level of dividend based on profitability, cash flows, and future growth CapEx requirements in the context of prevailing economic conditions. The board do not currently have a specific dividend payout ratio, and we'll continue to base dividends on the cash flow needs of the company and the structure of the balance sheet.
I'll now hand back to Victor.
Thanks, Chris. If we turn to page 13, a quick update on store numbers. The key driver of our future growth for Lovisa continues to be our global store rollout. We finished the period with 629 stores trading with a net 85 new stores open for the year, including 55 in the US, as well as our first store in Poland and Canada that were opened in June. Acceleration of our global store rollout remains our priority, and we are investing in the right team to deliver this. Turning to page 14, I will talk to the progress we have made in recent times in relation to digital. Our focus on our digital capabilities accelerate over the past two years. While we have made good progress here, our online business is still in its infancy.
We continue to invest in our digital platform, team, and fulfilling capability to deliver in this space, remaining focused on maintaining the profitability levels of our online sales. On page 15, I will talk to the trading update and outlook for the coming financial year. Trading for the first seven weeks of FY23 has seen a continuation of our strong performance of FY22, with comparable stores for the period of +21% on FY22. Total sales for this period are 66.1% up on the same period of FY22, with prior year impacted by lockdowns in parts of Australia and Malaysia. Since the end of the financial year, we have also opened our first 2 stores in Hong Kong and our first store in Namibia that opened on the weekend.
The store network currently at 651 with 22 stores opened year to date. We continue to focus on opportunity for expanding both our physical and our digital store network, with structures in place to drive this growth in existing and new market and expect rollout momentum to increase going forward. Our balances remain strong with available cash and debt facility supporting continued investment in growth. In summary on page 16, our sales momentum has been strong across most markets, which helped to offset the impact of temporary closure, store closures earlier in the year, with comparable store sales up 19.9% for the year and total sales up 59.3%. Progress continued to be made in digital, with increasing contribution from online sales and opportunity for further improvement to be made.
Cost of doing business remained under control despite cost headwinds from inflationary pressures on wages and logistic and the impact on temporary store closures, allowing for continuing, continued investment in team structure to support building the platform for future growth. Our global expansion accelerated on prior year with 85 net new stores opened during the year and a total network of 629 stores at the financial year end. All these combined to deliver EBIT of AUD 79.7 million, up 87% on prior year, with our strong cash flow and balance sheet position allowing the board to announce a final dividend of AUD 0.37 per share to be paid in October, an increase of AUD 0.19 per share on prior year.
I'm thrilled with the acceleration in the performance of the business over this financial year and would like to thank the team for helping to deliver a seamless transition for me into the business and remain laser focused on continuing success of Lovisa globally. The financial results the team has been able to achieve this year is very pleasing, with the business continuing to go from strength to strength and well-placed to take advantage of future opportunities as they arise. With that, I want to thank you for your time today, and we are happy to take any questions.
At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Marnie LaSotte of Mercury Capital. Your line is now open.
Good morning, Victor. Good morning, Chris. Well done on a great result. Just a few for me. To kick it off, just on the balance sheet. As you called out back in February, you're gonna start to take on some debt to support the growth, and there's AUD 10 million of current borrowings drawn. Can you give us any insight into how we think about ongoing use of your debt facility moving forward, in light of the extent of what you did this half?
Yeah. I guess, hi, Marnie. Chris here.
Hi.
The AUD 10 million on the balance sheet at the end of the financial year, I mean, we've still got net cash of over AUD 20 million, more just a factor of where the cash sits around the world at any point in time. We're still in a net cash position. The strategy around the balance sheet hasn't really changed from what we've talked to previously, which is that, you know, we're looking. We pay dividends based on cash flow and the available facilities with a view that, you know, we target around that 0.5x EBITDA level of debt as being a reasonable level to hold. Obviously with AUD 0.37 final dividend being paid, that's a continuation of that strategy.
We're very confident that, you know, with the CapEx requirements for the store rollout in the coming half and payment of that dividend that, you know, we'll be utilizing our facilities, but it won't likely go anywhere so over that 0.5x EBITDA.
Okay. That's all clear. Just with the inventories up, obviously versus December, when we're thinking about getting to the next half balance date, do we anticipate your inventories to remain elevated? Like, sure you'll have some unwind over this half of the buildup? Or do you think that just given the ongoing uncertainty, you'd probably wanna have a couple extra weeks cover?
Yeah. I think there's a few factors in there, Marnie. One of them is just the store rollout. Obviously we've rolled out, you know, 20-odd stores in the first 8 weeks of the new financial year. We'll be holding stock to be able to that store rollout requirement, particularly with the, you know, some of the challenges around logistics and getting stock into markets, in particular new markets, where we haven't actually managed to get stuff through customs before, so the lead time's a bit longer. We've obviously got a much bigger European business now, so we've got the warehouse in Poland, which means another stock holding locally there.
Yeah, we're very happy with the cleanliness of our stock and where we're sitting and the buffers that we've got in there to cover the, you know, potential risks in supply chain that are, you know, ongoing for everyone at the moment. Yeah, we're not necessarily planning on seeing that unwind at all in the first half. I think we're. We wanna make sure that we've got plenty of stock to meet the comp sales that we're doing.
Okay. It's fair to say that or fair to ask for us to be thinking that December 2022 inventory, obviously ahead of December 2021 and potentially flat versus June?
Yeah.
Okay. Just one final one for me before I'll jump back in the queue. Just managing the rollout, given the disruptions. I remember when you updated us in May that the monthly run rate up until the end of April was a bit weaker. So kind of what changed in the balance of the second half for you to eventually hit a rollout in line with what you did in the first half? Like, what was there improvement in logistics, or was it just being able to really put more resources into ensuring that you hit those that store rollout outlook?
Hi, this is Victor. I mean, I think that we try to tend to have a policy of no excuses, you know, and trying to roll out with the current challenging situation. Basically we've got really good results on the rollout, no? We opened several stores and we are pleased with the results, no, having an opening on fiscal year 2022, 85 net stores, you know. In a way it's trying to execute or trying to find efficiencies on execution.
All right. Your next question comes from the line of Shaun Cousins of UBS. Your line is open.
Great. No, thanks. Good morning, Victor. Good morning, Chris. Maybe we could just talk a little bit about sales growth. Your sales growth on a total and like-for-like were very strong in the second half 2022 and then also to start first half 2023. Could you talk a little bit about some of the contributing factors, but particularly I guess the strength in like-for-like sales growth around, be it the resilience of the customer, reopening leverage, quality of the offers or just some of the broader drivers of sales growth that you're seeing given that the consumer in the global markets in which you operate is not necessarily strong. You're doing something right. Can you just talk a little about some of the drivers you think that are contributing to that, please?
I think we have a comprehensive product offering. I think at this moment, we are very happy with the product offering that we are having on a global basis, you know. We are in more than 20 markets, you know. It's something that I believe is capturing the attention of existing markets and also new markets, you know. This is something that we are very pleased, and I believe that's. I think we have a strong product, and I believe we will continue. We will try to continue having strong product.
Great. Maybe, looking to store growth and potentially some of the phrasing that we used in the first half 2022, would it be fair to say that Lovisa management would be disappointed if you couldn't grow stores in fiscal 2023 at the same rate as fiscal 2022, please?
What I can say is that we are very happy at this moment with these 85 net stores that we opened. Clearly, I mean, if you do the math, we opened 22 stores, you know, over the last 8 weeks, you know. You can do the math, and you will see where we will think we will maybe find ourselves by the end of fiscal year 2023.`
Okay. Worth a try. Finally, just in terms of the new markets of Hong Kong, Namibia, can you just discuss what's appealing about those markets? I guess particularly Hong Kong, where we've seen retailers like Smiggle exit, and considerations of broader growth in Asia, including China, on a potentially company operated basis. Maybe just sort of what's appealing around Namibia and especially Hong Kong for you and what that could, you know, parlay in terms of future store markets in which you open stores, please.
Well, we consider that Hong Kong still has a lot of potential in terms of retail. I mean, 8 million people with a high disposable income. We believe that it's an opportunity as well to test a gateway to China, you know. Regarding Namibia, it's a natural evolution from our substantial presence in the South Africa market.
All right. As a reminder, if you would like to ask a question, please press star one on your phone keypad. In the interest of time, we ask that a maximum of one question per person is asked. Your next question comes from the line of Wilson Wong of Jarden. Your line is open.
Hi, Victor and Chris. Can you just provide some details around the store economics you've observed in Poland and Canada so far? I guess any indication of the extent of the continued store rollouts in these markets going forward?
Yeah. Hi, Wilson. We don't talk to store economics on markets that have just opened. You know, we've got one store trading in each of those markets, and they've only been up and running for a couple of months now. Yeah, I mean, other than saying, you know, we're happy with the way they've started. You know, the product seems to be resonating with the customers and, you know, we're obviously looking at other opportunities in those markets. But until we get a decent read on trading there, you know, over a period of time, we won't be discussing the specifics.
Okay. Just one quick one.
All right. Your next question comes from the line of Alexander Mees of Morgans. Your line is open.
Thank you. Morning, Victor. Morning, Chris. Well done on a really good result. My one question is, Chris, would you mind stepping me through the reconciliation of the EBIT before share based payments, which I believe was AUD 101.3 million, to the reported EBIT number? I just want to make sure that I understand how you bridge one to the other. Thank you.
Before I answer the question, just so the operator, if you can let the people asking questions finish their questions and not cut them off. I think you cut the last person off before they were finished. Thank you. Yes. The reconciliation is the statutory EBIT number and then adding back the cost of Victor's LTI. If you look at the statutory EBIT number on the face of the P&L, which I'm just trying to find the page, but then add back the total cost of Victor's LTI. If you look on page 25 of the remuneration report, that would be the performance-based payment of AUD 4.9 million and the options and rights under the share-based payment column of AUD 13.7 million.
Basically, that's the AUD 18 million adding back to the statutory EBIT number. That adds up.
Yeah, it does. When I'm thinking about the year-on-year development of EBIT, it's to 101.3%, leaving aside the LTIs.
Sorry, I didn't quite catch that last bit. Can you repeat it?
When I'm thinking about the year-on-year progression of EBIT from 21 to 22, I should be thinking about comparing apples to apples, going to 101.3 as the EBIT number before accounting for share-based payments.
That's one way of looking at it. If you're looking at it pre share-based payment. I mean, the way we look at it's sort of it's an expense of the business now. That's why we haven't called it out specifically in any of the documentation as an underlying result. Yeah, you can see on page 25, the increase in executive REM year-on-year is a reasonable number.
Sure. Understood. Thank you.
Your next question comes from the line of Mr. Mark Quade of CLSA. Your line is open.
Hi, guys. Thanks for taking the question. Just one that's puzzled me for some time is, you know, Lovisa is known for its really fast introductions of products into store, and I understand you've got a lot more warehouses in place now, but how come the stock turns are just so low at only 2.3 times?
Yeah. It's a good question. I mean, I guess the way our business operates is we obviously have a lot of SKUs in store. Part of the way, you know, the excitement of our offering for the customer is the broad range of SKUs. That means that in each store we have, you know, a long tail of product. We you know have best stores turn at an extremely high rate and some of the lesser stores at a lower rate. You know, we're very comfortable that overall our stock turns are where they need to be. We'd like them to be better.
The other thing that impacts on stock turn, it's a historical looking calculation. When you're growing, you've got a heavy investment in stock for new stores as they come. As COGS is increasing from new stores opening, you know, there's a mismatch between the amount of stock on hand versus the historical COGS that we've recognized. You just gotta keep that in mind. We tend to look at, you know, four weeks cover of those sort of metrics when we're managing our inventory level.
All right. Your next question comes from the line of, Ms. Aryan Norozi of Barrenjoey. Your line is open.
Hey guys, can I please squeeze in two very quick ones? First one, just around the EBITDA margins. I mean, pre-COVID, your business was sort of running at 25% EBITDA margins. Given your store growth aspirations, and you wanna build on the momentum, is that how we think about the profitability levels and obviously reinvesting operating leverage back into the business? I mean, your margins at the moment are tracking in the second half much higher than what it was pre-COVID. Just trying to think about how do we sort of normalize your margin profile moving forward, please.
Yeah. It's not easy, because the best way to answer that, but there's so much noise in the numbers over the last few years, and obviously there's been a lot of change in the business in that period with new markets and significantly more stores and more support structures to drive that growth. Yeah, you're absolutely right. The EBITDA margin, you know, is significantly improving in the second half compared to where it has been over the last few years. We hope that can continue. You know, the fact remains that we continue to invest in the structures of the business and, you know, the team structures we need to be able to drive the ongoing store rollouts, the new markets and all that sort of thing.
Yeah, I mean, as we generally say every six months when we talk to you guys that we're always trying to get CODB as a percentage of sales down and increase those EBIT margins. We just tend to look at EBIT margin more than EBITDA so that we're factoring in the cost of our new store builds as well. Yeah, we hope to see some operating leverage come through, and we did see that in the second half. We're not gonna give you a clear steer on what we think that is for the next year.
On that point around store build costs, I mean, if you look at the second half store CapEx costs over how many stores you opened, it's running at sort of AUD 240,000 a store, in terms of CapEx, despite sort of new markets being materially higher, I think double the costs in, for example, the U.S. Have you managed to drive down your store CapEx costs, through scale, or what's happened there, please?
Yeah. If Victor answered this question, he'll probably say, "No, and we're not doing a good enough job," because he's always beating up the construction team on exactly this topic. We've definitely been able to deliver some efficiencies in our store builds, which have pretty much offset some of the inflationary pressures in that space. But we haven't really seen a lot of improvement in most markets on that front. There's obviously a lot of work going on there, but it's proving a bit more challenging at the moment with, you know, some of the logistics costs and just the, you know, lack of available trades and that sort of thing to actually get the stores built.
Great. Thanks.
All right. Your next question comes from the line of Charles Forsyth of Private. Your line is open.
Hi. Thanks very much, Victor, for the result, and the team obviously. Is it possible for you to share your expectation for store numbers 5 years out to 2027? If possible, 10 years out to 2032? Thank you.
It's not possible, but what I can tell you is that we opened 85 store net this year. We are planning to open a significantly higher number over the next fiscal year, you know? This is what I can tell you, but I mean, definitely there is plenty of white space around the world. The good news is that we opened over the last two months four markets, and they were markets that I believe are adding a lot of potential to the company. We are pleased with the opening of those markets. I think there is a lot of white space as well in the U.S. where we opened 55 stores during the FY22.
We will continue doing. This is one of our strategies, you know, continuing doing a global rollout of the stores. We opened 85 stores, and we are seeing good numbers. We will try to concentrate, and it will be one of our priorities on the store rollout over the next year at least and hopefully over the next five years.
Okay. Thanks very much, and good luck with that then. Thank you.
Thank you.
Your next question comes from the line of Sam Teeger of Citi. Your line is open.
Morning, all. Hi, Victor. Hi, Chris. Congratulations on this result. The team has achieved a lot in a short space of time, opening in so many new countries. Victor, based on your experience of opening stores globally, how much time is enough time for Lovisa to assess the performance of these new countries before deciding they do warrant a step up in the speed of the rollout? On the topic of rollout more generally, now that beeline is largely integrated and your balance sheet is pretty strong, are you reviewing any other acquisition opportunities that can lead to faster scale in certain markets?
Thank you, and thank you for your questions. The first question, it's difficult to say or to judge the potential of the market. You know, I think with previous experiences and all these things, we know which is the market that we have to target, what is going to be the next market. We believe that it will take a while. Always there is kind of an exponential growth in each market, and I believe this is something that will be an important thing to take into consideration. Having said that, you cannot generalize in terms of markets, no? We open markets in two continents, no? In Europe, in America and in Asia, or, sorry, in three continents.
I think that, I mean, those markets will evolve significantly and also in Africa. We open in four continents, you know? I mean, it's an interesting position where we are at this moment. We feel comfortable with those markets and hopefully they will be a huge success for us, you know? Regarding your second question, we cannot, we don't disclose any of this. I mean, I cannot tell you.
Okay. Your next question comes from the line of Wilson Wong of Jarden. Your line is open.
Sure. Thanks, guys. Just a couple quick ones. First of all, are the LTI EBIT hurdles on a pre or post AASB 16 basis?
Apologies for you getting cut off before.
Yes, that's fine. The other quick one, in terms of the size of the price rises, can you sort of disclose that, and have you seen any impact on volumes?
No, not at all. We are very pleased on the price increases that we did over the second half of the year. There is no price resistance from our customers or from our new customers. I think it was a good decision, and I think we will consider maybe in the future in case we believe we need to increase prices again, we will consider in the future.
Okay. Thanks, guys.
Right. Your next question comes from the line of Raymond Zhang, Private Investor. Your line is open.
Hi, guys. Thanks for taking my question. Just had a question about the Canadian opportunity. Who do you see as the biggest threat or competitor?
Well, you know, we opened the store, and we believe that we have plenty of potential in the Canadian market. We don't disclose specifics on markets, but I can tell you that it was an opportunity. It's kind of an evolution from the US market. We opened in West Edmonton, and we are pleased with that. We don't disclose competitors as well, no? I think that at the end of the day, we have several local competitors. I think, for example, Claire's is doing an aggressive rollout of stores in Canada. I think maybe that one will be one of our competitors in the Canadian market.
Thanks for that.
Operator, do we have another question?
Your next question comes from the line of Joseph Michael of Morgan Stanley. Please ask your question.
Morning, Victor. Morning, Chris. Thanks for taking my questions. Just the first question around new country launches. I think the previous target was for one new pilot per annum. You're obviously tracking well ahead of that in the last few months. Has there been a change in that strategy? Should we expect more frequent new country launches going forward?
I think right now the million-dollar question is not anymore what, which is the new market, no? It's more about whenever we see an opportunity in a market, we will try to open, and we will try to make a test, no? Trying to go carefully in terms of rollout on that particular market. But clearly, I think there are, or we believe that there is plenty of opportunities, not only in our plus 20 markets where we are present. I think it's not anymore about, we open one market or we will open the market that we believe we have great opportunities over there, and the customer is resonating with our product range.
Okay, great. Is it fair to say that you're trying to build a sort of truly global business? I mean, you're opening up a lot more new countries. It sounds like, you know, every country is gonna be up for consideration at some point. Is that a fair comment?
What is a fair comment is that we are trying to build a global brand, no? You need to have a global presence.
Okay. Got it. Just one other question from me, just around sort of the inflationary pressures in the business. What are the key areas of inflation? And can you just comment, are they sort of accelerating, decelerating, stabilizing?
Yeah. I mean, obviously, been pretty well publicized some of the pressures on, you know, freight costs and wages. You know, most of the markets that we operate in are, of course, you know, inflation running at, you know, high single digits, so it's pretty much, you know, cost base wide. You know, obviously, that's our job to manage that and try and mitigate that as best we can. You know, we obviously saw some of that come through in the second half result, and we were able to offset that with strong top-line growth. Yeah, obviously that pressure on cost of doing business in FY23 as a result of all those factors.
You know, remains to be seen how much of an impact that is and how well we can mitigate that with you know, negotiating better deals or you know, best way to do it is grow the top line or both.
You know, we are trying to take this as a strategy, you know, taking this inflationary pressure as an opportunity, you know, in order to maybe negotiate better deals, in order to also try to make this like an opportunity.
Perfect. Thank you.
Are there any more questions up for her?
Okay. If there is no further questions, thank you, thank you very much and looking forward to meet with you either in person or on a call on the next coming days. Thank you.