For Wednesday?
Yeah.
Welcome everybody to the up-year results for 2023. Apologies, first of all, for being a little bit tardy in our start time. That's squarely with me, so apologies for that. Obviously, there's a few slides to get through here. The release that you're about to see will be put up on the ASX shortly after this broadcast. With me today is John Boland, Chief Financial Officer and also Company Secretary. John will cover off on the financial aspects of the presentation deck. There will be a number of slides that we won't go through for obvious reasons, but that will sit as informative information at the end of the session once the deck is actually put on the ASX. We're actually quite happy with the way that we performed this year.
One of the things that we've been really solid in from a community point of view is support around raising breast cancer awareness. Through the course of this slide deck, you'll see the color pink quite a bit. There have been a number of people through our organization that have either had direct issues or been impacted by breast cancer or their families or their friends. This presentation obviously goes in with the support to those people. Today we'll go through the group highlights. We'll also take you through the strategy, the financial operations, obviously, and then the go-forward position over the course of the next six months to the end of FY 2023, and then also to our target of FY 2025. I guess our reasons to invest sort of evolved over the course of time.
Today we have a large addressable market that's very fragmented, and it's also very resilient, which we're finding. It is AUD 52 billion in total. We previously had that at AUD 40 billion. There are some other sectors due to our acquisitions that we now form part of, which provides opportunity for us. In that, obviously, we have a number of diverse exposures to end markets, which also gives us the ability for ongoing revenue streams and repeat business, as well as tailwinds, we believe, over the course of the coming 12 months to two years. We've proven over time that our organic growth, as well as our acquisition growth, has been solid. In fact, we've grown much faster than, obviously, the market has and our peers, which is demonstrating through market share and also invitations to contracts that we've never been invited to previously.
The advantages of our scale, as well as our buying power and our network now that sits with about 68 stores throughout Australia, is something that obviously is new, and we're at the very beginning of making the most of that opportunity there. Technology is something that we continue to invest in, and it's very important. Obviously, it's evolving every day, so to speak. The way that visibility, the demand from our customers, real live or real-time data that is live and available becomes really important to us as an organisation. It's also equally as important to our suppliers as well as our customers. That's an area that we will continue to invest in to ensure that we keep ahead of the pack, but also making sure that we bring efficiency in our operations.
I'll talk about where I think margin creek can come from later on in the presentation. One of the solid aspects of our business is the long-term relationships that we have with not only blue-chip companies, but a whole raft of customers across all sectors, as well as DIY at home. In doing that, obviously, we have a sales model that is aligned to customer types, and that is large, medium, and also small. The team that actually works online and the team that actually looks after the major accounts obviously have two different groups, and we align our operations accordingly to ensure that those demands are met. Over the course of the last six months, John and his team have done an excellent job in ensuring that we've maintained really strong disciplines around our capital management.
We do operate in a low CapEx model, and obviously, as we will talk about, we have quite strong cash flow, operating cash flow, as well as free cash flow. Importantly, one of the things that we continue to do with our acquisitions and emergence of that, but also in the markets that we operate, there are numerous opportunities, and we've spoken about this for a period of time. We'll take you through a brief that really sort of recaps what happened in 2022, but also the opportunities that are sitting there today. We've recently won three new contracts in addition to AUD 1 million in value on an annual basis, and we continue to be at the forefront of that. That's not because of price.
It's also because of our new buying power and our ability through our network to be able to serve the customer on a national scale. We have an excellent team, not only the senior leadership team throughout the organization of Stealth, but also in our subsidiaries who lead those businesses day by day. Also through our sales teams, our operational teams, and our finance teams, they all work in sync with each other, which really, from a cultural point of view, is something that we really pride ourselves on. From an investment point of view, we believe from a financial aspect, we're undervalued. We have been very deliberate in our strategy. We make no apologies whatsoever in what's occurred over the last four years. We've built a business that has come from AUD 20 million in revenue on one store and about 40 odd people to today, 230 people.
We've got 300,000 products in our warehouses. We have 68 different store locations. We have 8,000 customers. That's quite a significant growth process. Obviously, how we execute takes time. We're also happy to pause and reflect and make sure that during that process, we're getting the most out of our execution and our synergies. We won't be forced by sort of anybody to continue down a path just because we've made a statement or a commitment around that. We will always put our hand up and make an apology and give reasons why we've made new decisions the way that we have. All those factors are obviously driving growth, and that leads us into the 2023 year. We're now one of Australia's largest industrial distributors across the range of industrial safety, workplace supplies, as well as truck and automotive.
As I said, there are 300,000 products within our warehouses as well as our stores. 95% of what we sell is non-discretionary items. From an economic point of view, as there are obviously some challenges that we are facing ahead, being in a business that has non-discretionary items is of benefit. When we talk about tailwinds, it gives us the opportunity to price and reset and pass on inflationary costs within the products and the services that we sell. We are also obviously expanding our services and solutions, and that continues to evolve. Upstream and downstream in the supply chain to maximize every revenue opportunity that we can. To allow us to have 10 different touchpoints, 10 different revenue types is much better than obviously just selling a product. We have evolved that significantly and will continue to evolve that over the course of the coming years.
Okay, so talking about the performance, just like. First of all, what we achieved in FY 2022. The importance of this is to really demonstrate the magnitude of those events. A number of those events obviously occurred in the latter period of FY 2022. We continue to merge and implement and consolidate and rationalize our operations from the acquisitions that were undertaken in the second half of FY 2022, but obviously the Skipper Transport Parts business, which we acquired in the first half of 2022. All that is still an evolving beast that provides significant upside both from maximizing margin opportunities and merger opportunities, as well as consolidation. We have consolidated the back end and will continue to rationalize that business as it continues to evolve. Covering that, we completed three acquisitions. We added 41 new trade stores to our network across Australia. We have onboarded those.
It's obviously significant in its own right. The staffing that we onboarded as well was 70-odd people, which is a significant amount of people to onboard and culturally ensure that they feel a part of our organization. Equally, we understand what they face every day to help and improve and grow the business that we've acquired, but obviously maximize that as well. The inventory that we acquired that goes with Skipper Transport Parts, some 70-odd thousand lines, as well as AUD 3.4 million worth of product, was consolidated into the Heatleys Safety & Industrial Distribution Centres. We're obviously getting leverage by putting that in one location, but that required quite a bit of refit and adjustment to accommodate that on both sides of those businesses. The room wasn't available. We made it available, and we changed our stocking profile to accommodate that.
One of the big things, obviously, which people sometimes underestimate, but we migrated the Skipper business onto the same ERP platform as what Heatleys operates under. There are some nuances and modifications in regards to the types of parts and products and accessories that are sold through Skipper that are not sold through the Heatleys business. It is quite a significant amount of work that was involved to bring the five trade stores on board, as well as all the metropolitan sites. The purpose of that, as I said, just to reiterate, is really just to allow everybody to understand the quantum of work and effort that was involved getting it to that point. I guess we started again on the 1st of July, and that work continued, and there is still work to do with those acquisitions and onboarding.
As we talk about the financials, clearly our investment around PPE, as well as e-commerce, was significantly less, and our CapEx requirements were half of what it was last year. In doing that, clearly we are focused on reducing and consolidating as much as we can. Just key highlights in terms of the last six months. Good performance in challenging conditions. Obviously, cost inflation hit everybody, and that was freight and fuel, and the cost of shipping was significant. The supply chain challenges meant that we needed to act quickly and act fast at the very beginning of the process, which we did, and we ensured that we had enough stock in place to meet the demand of our customers. Clearly, our costs went up across most of our suppliers. It did on the freight distribution.
I think our fuel surge openings were moved from something like 5%- 41% in one particular case. Whilst we can pass on a reasonable amount of that to non-contracted customers, our contracted customers, we decided strategically to ensure that we kept our head down and we maintained that business. We worked with our customers from a contract point of view to ensure that their impact was minimised as well as ours. Positively, we were able to sustain our gross margin percentage. Obviously, our gross profit dollars increased by around about 15% or AUD 2 million. The upside of that is we are establishing the pricing reset, which those prices will go through in the coming through our four-month period, and that will bring benefit to the future period coming forth. The supply and demand for our products is really robust.
As I said, 95% of what we sell is non-discretionary items. The encouraging part about that is we're getting more invitations to tenders from larger customers. As I said, we've won recently some large tenders. Importantly, we're finding our mid-tier customers have a high demand as well. That sits today. We're unsure, like everybody else, about what the coming period comes as interest rates increase and other economic issues come into play. We still feel really, really confident. Why we feel confident is the fact that we're at the beginning of our journey. We're taking market share. Anything that we take is an uplift for us as a business. It won't stop us with our strategy of growth. Our mandate to get to AUD 200 million, that 9% need to die.
There's obviously a number of factors that need to roll out to achieve that, but we still remain really confident. We've also ensured that from a transformational point of view, one of the key projects or initiatives that are underway is we're consolidating or we've established a new operating division that's focused on procurement and also leveraging tier one suppliers into one consolidated group. We've moved large tier one suppliers out of all our subsidiary brands, and we've brought them into this new operating division.
The purpose of the new operating division is to leave the buying groups, the independents of United Tools and also Industrial Supply Group as channels to market, and then a dedicated professional team that is focused on leveraging our buying power, making sure that we're getting the best price, the best product, the cheapest method of supply chain to give us more competitive advantage, but obviously improve our margin. In doing that, there is AUD 260 million of spend combined with the company and in the independents. There's only AUD 10 million of that that goes through the Stealth business.
Clearly, there's an opportunity for the Stealth organization through a revised business model to leverage revenue, but also provide benefit back to the independent vendors, which are looking for us to help not only strengthen their own little business, but to compete better and stronger and happier, probably in some way, against the larger profile companies that have really rolled significantly in the last couple of years. My belief is that they will struggle as there's a downturn in the market when they have fixed costs associated with their business. The second half of trading is, or has been for the last four years, stronger than the first half of trading. There are 123 workdays in the first six months of 2023. There's another five working days on top of that that sit through in the period of the second half.
Also, traditionally, we find that there are a number of months or key months that progress themselves. After the first two months of trading, being January and February, we are on target for about AUD 19 million in revenue. If you analyze that out, we are probably sitting around AUD 110 million-AUD 112 million. There are a number of initiatives underway, and we still feel really confident that those initiatives will progress into revenue this period. From a performance point of view, all operating divisions perform strongly. The merger and the synergy benefits from acquisitions are starting to deliver. We have consolidated the back office of United Tools as well as Industrial Supply Group into one. We have also consolidated the back office procurement, finance, sales, customer service of Skipper Transport Parts with Heatleys Safety & Industrial.
That's allowed us to reduce headcount by 7%, and that's by natural attrition, not by any other means. In doing that, we are now set for the next phase of our merger, and that will be around facilities and consolidation of freight runs as well as the warehousing operations. With Skipper , we closed six unprofitable operating stores that were at customer premises, and that has reduced annual revenue by about AUD 2.4 million. There will be another store that we will close shortly. Our revenue would have been obviously AUD 1.2 million higher. We would have expected in the first six months, but we are very strong on not having unprofitable operations. If we can't do that, then we're prepared to walk away. In doing that, we're clearly working through rationalisation and looking at every element now of every cost line to improve our profitability.
There are some comments around inflation and cost pressures, which I've already mentioned there. We're undertaking a pricing reset for those who don't understand exactly what that is. We're working through every contracted customer, every line item, and all those charges or fee structures will be adjusted, and there'll be new pricing passed on to the customers. We're still in an environment where that's acceptable. Clearly, we work closely with customers. We've held our prices as long as we can, but we feel that now is the time to continue to push that through. I think our supply chain will increase by AUD 1 million in our stock in the period, but as a percentage of sales, it's actually lower. It's 29% inventory value versus our sales versus 32% previously.
Clearly, that in itself is part of the reason why we've improved our cash position operating as well as free cash. It's also allowed us to improve our supply chain number of days that we deliver or receive goods. Another key comment to make is 16% of our workforce in November caught COVID. I think it was about 37 odd people at some point went down during that period. Whilst everybody sort of pulled in and did an excellent job, this was in multiple sites. Clearly, it does have some sort of disruptive impact. Whilst our service levels are probably maintained, there's no doubt that we lost a little bit of momentum through that period, but everybody returned to work and seemed pretty good at the end of the process.
What I'll do now is I'll pass the financial aspect on to John Boland, our CFO. It's good for John to be a part of, obviously, the presentations now rather than just hearing from me. Obviously, you'll see more of John, and we've just continued to be in front of a number of key stakeholders and potential investors, etc. John's obviously part of that process.
Thank you, Mike. Good morning to everybody attending. In terms of the half-year financial performance of the period of the 31st of December, good achieved revenue, AUD 52.4 million. This is up 18% or AUD 8 million compared to the prior comparative period. This was a combination with organic growth in there. It does get mid-four-year contributions from the acquisitions we can in FY 2022. As Mike alluded to, we reduced scale backs on the Skipper revenue and non-profit stores in the period.
The organic growth would have been the bigger contributor of the two. The group did achieve gross profit of AUD 15 million, which is up AUD 2 million on the previous financial year or previous half-year. As Mike said, at 29%, it was a solid margin. Like other businesses, yes, we have those inflationary and cost pressures that have been there, which are challenging on the margins. Also, from our cost structure base, we managed to decrease our expenses as a percentage of sales by about 1.5%. When we got down to the underlying EBITDA, we saw AUD 2.4 million was achieved for the current half-year period. This is up 41% and AUD 1.7 million in the financial year 2022. This translated into an EBITDA margin of 4.6%. That was up on the 3.9% of last year.
Again, in light of our 2025 target, we're paying up towards an 8% EBITDA. Again, we're showing that sort of growth period on period. As Mike said, the second half of the year is typically stronger than the first half of the year. Between EBITDA and net profit, our depreciation amortization did rise in the period. That was of the investments in technology and the acquisitions in FY 2022. I'll start finance costs from AUD 0.3 up to AUD 0.5, again, half-year and half-year. The prior period would have gone into a portion of cost for the acquisitions. Yes, for an interest rate sort of environment, every focus on the debt and how we're managing that. We still continue to pay down our acquisition debt. Probably 20% of the interest-led costs are actually to WSBC 16 leasing standards.
I'm not subject to the interest rate increase by the RBA. Procurement impact of all that, we've achieved a AUD 0.3 million profit for the half-year, which compared to a AUD 0.4 million loss in the previous financial year. As the scale and activities are increasing, as we're holding our margins and keeping our cost incidents there, we're seeing those benefits drop to the bottom line. For shareholders, this translates into an earnings per share of AUD 0.31 for the half, six months. On a simple annualized basis, that's a 60% for the full financial year, obviously helping for the stronger sort of second half. In terms of where it sits at the moment on a AUD 0.12 sort of share price, it's a 20 x PE ratio, again, with another line for future growth.
Our enterprise value EBITDA ratio sits at a very modest 5x at the moment. Focusing still on the cash flows and onto the balance sheet sort of aspects, with the two key focuses for us are working capital management and net debt. In terms of working capital management, I see inventories that reduces the pecent of sales. Our working capital was lower as a percent of sales as well in the period. This has contributed to, with the operating cash flows, being strong for the period. December is a short working day month at 16, which means our receivables and payables are lower at December than they would be at sort of June. That is a natural sort of timing sort of issue.
Again, as Mike said, with the inventory, million dollars up, yes, we've got a cost base in terms of the underlying cost of inventory is rising, but ultimately it's a reducing potential to set. Again, managing it hard, managing it well, and using it to support the growth of the business. From a net debt perspective, December, it's over the timing of our range with CBA , our growth stat was 0.2 higher, but our cash was 0.5 higher, so 0.4 higher. Again, a net reduction of 0.2 in the net debt. That's what we sort of focus on from the business perspective. Within that, we did repay AUD 0.8 million on our acquisitions in the six months.
We continue to do so in the next period with a view that by the end of this coming year, 2023, we're seeing our acquisition should be fully settled and paid off. This leads to our net debt to EBITDA ratio, we're at 2.1 x, same as sort of June. That's based on the internal metric that we sort of were working to. Obviously, continuing to continue to lower that. Finally, from the balance sheet sort of strength at AUD 15.4 million net assets. The profitability, the group continues to increase and accumulate that strength within sort of balance sheet. Diving into the divisional performance bit within sort of the P&L, again, we look at across the three areas of the distribution sort of solution. Very much sort of B2B.
We have the retail sort of component through [Prince Richard], our sort of C&L, Skipper, United Tools sort of businesses. We have the specialized wholesale, procurement initiatives and restructures that Mike has sort of talked about. Obviously, the distribution B2B is the heart and sort of of the business. Through the tenure, that is definitely where we are seeing some of the operations, seeing more opportunities there, seeing a growing portfolio and quality of sort of clients, particularly here in Western Australia within the Western Australia top 100 index sort of mining and the strength and the opportunities that are sitting in there. Year-on-year growth, it is our 10% within the B2B. We have seen 6% on retail. Again, we know that is a tough environment sort of out there with demands. The competitors are sort of chasing sort of pricing.
Again, working hard with the products that we have, with some of the teams we have, and again, with the online solutions and other offerings to sort of the customers. In terms of specialised wholesale, the United Tools acquisition last year was just sort of keying that sort of growth. Like I said, procurement strategies, that's really an area where we see a lot of opportunity and a lot of upside sort of for the business that are going forward. Final one around the financials also are common one, I suppose, getting away from P&L and sort of getting into the operational metrics that sit underneath that and drive the business on a daily, weekly, monthly basis.
Through the technology investments and obviously restructuring our level of insights and understanding and able to make faster and quicker decisions, that's a lot stronger than sort of 12 months-24 months ago. Across the board, we're seeing a daily transactional volume increase of 21% at the same time last year. We've seen this predominantly convert into GP with an 18% sort of growth. Importantly, we're increasing the average sales value. The customers are spending a bit more, yes, with an element of inflation sort of in there. Again, it's selling additional products to them. Our data and our evidence and our trends sort of show that the more people need consistently with selling to customers, sales impetus or mining, the better margin we're getting sort of on that. It's the win-win for all of ourselves and customers. Productivity measures, obviously are important as well.
Again, looking at sales value and GP value per full-time sort of employee. Again, sort of seeing double-digit growth in there and continue to target that as we use and make sort of technology initiatives growing scale and just being smarter and better at sort of what we sort of do. From here, I'll pass you back to Mike.
Thanks, John. John. Before I go into this slide, clearly, profitability at 0.3 is not the level that we're satisfied with at any stretch. Our focus has always been to get revenue and scale and give us that ability to become relevant. We obviously have achieved that at the end of FY 2022.
We've really had our head down in the last six months or eight months now of onboarding some of those acquisitions and really making sure that the inflationary pressures through the organisation were well captured and we didn't have any leakage. To impact on us, there was no doubt there was some impact, but we did that strategically for the customers, I said. The other thing that occurred during that time was obviously wages increased quite considerably in the applied labor market. The base wage increased by 4.6% on the 1st of July for a significant amount of our staff. Obviously, to keep good employees, we need to make sure that they're locked away as well in a hot market. We've managed to do that. We've been really strong in the last four or five months of stability.
Even prior to that, it's probably a 30-day period like everybody, that things went a bit chaotic. What you'll see is an absolute drive for profit improvement. We still feel very confident about our ability to be able to deliver the 2025 strategy. In support of that, clearly, the resources and infrastructure, manufacturing, engineering, which is clearly a robust sector for us in Western Australia and Queensland, particularly, is very strong and obviously our biggest end market that we cater for. Obviously, it falls off into a bit of a tail. This is the period of the first half of 2023. Obviously, this does go through different cycles at a point in time. We have for a long, long time been very, very strong in that resources and infrastructure sector, as well as the construction element. We ensure our debt report.
From a construction point of view, we had one potential issue, which was weird clutch, but that was settled. That was about AUD 160,000. We are really, really tired of making sure that there is no bad debt risk for our organisation. Clearly, underneath that, there's opportunity to grow in the retail and trade. Construction is an element still that we believe is an element of growth for us, particularly in, I guess, the commercial space. One of the other areas is the government services that we have new opportunities to provide. Getting into government office gives us some certainty as well and just expands our portfolio. If I can just cover the objectives now for short-term, medium-term, long-term. Clearly, optimising pricing is all about profitability improvement, as is gaining market share, as is leveraging technology to deliver operational efficiencies or excellence.
One of the terms that we are starting to use in our organisation is about the word excellence. That is not perfection. That is absolutely everything that we do, we want to be excellent at. Standards across the organisation in terms of raising the bar on how we service our customers, how we engage with our suppliers, how we go to market, how we present our buildings, how we present ourselves is all coming up through a bit of a phase of dynamics. In doing that, there is not a significant capital cost to that. It is more about making sure that we spend the time and the effort in the areas that we need to. We have a group human resources manager now that joined us six months ago, who is an exceptional individual who has brought a number of key new initiatives into our business.
We have 29 people today that are involved in formal training with certificate accreditation at the end of that. That will be expanded over the course of the new period. Spending time with our people, investing in our people, giving them opportunity to educate themselves, but also become more skilled in their role. Also, 360-degree feedback by ensuring that we're listening to them and giving them the right work environment and everything that they need in terms of the tools to do the job. Supply chain efficiency is always one that requires a lot of work. Because it's an end-to-end with multiple touchpoints, it's an area that we're very comfortable in. It's also an area that we believe that we can pull cost out of. We've already spoken about the procurement model and customer value.
I guess from a short-term perspective, really, it's the first three bullet points: optimizing our pricing, gaining market share, and the delivery of operational excellence. Moving into medium-term, clearly, it's got the same principles that sit behind that. The drivers to our profit are a whole host of things we'll set on the next page. We'll continue to expand our capability. We will bring in our own proprietary product. We do have a small range of our own product where there is high margin in that and alternatives, excuse me. We see great uplift in that area as well. At the moment, if we're looking at a 29-odd % GP, we would be expecting north of 40% with our own product range. That is something that we will advance over the course of the next 12 months. I've already spoken about the branding exercise.
I think consolidation of brands will be something that we will do in the very near future. The investment in multiple brands, multiple websites, and everything else, obviously, at a point in time becomes expensive. That is absolutely being considered right now. As is our ability in our distribution, our main distribution centre, anyway, to have state-of-the-art, just-in-time facilities. The Heatleys facility and, of course, Skipper. Heatleys, Skipper, they have been for something like 20 years. Whilst it performs and functions very, very well, it's something that we need to consider if we want to be the market leader, about how we present ourselves and can showcase those types of facilities. Whilst the size would be bigger, the actual cost of rent, as well as the on-cost of that, is not much different.
The other thing that we're really looking for in the medium term is this new business model from a procurement point of view, linked with the independence, linked with our major T1 suppliers. We see significant uplift, particularly if there's AUD 250 million-odd of buying spend that goes through there, then there should be no reason why we as a business couldn't pick up at least sort of AUD 50 million of that. That would then give us the ability to not only improve our margins, but the independents that are part of our network, they will be able to improve their margins as well because it's about negotiating not only a better commercial arrangement, but also volume-based discounts obviously drive better margins for us. Longer term, we want to be the market leader. We want 150 stores as our target with an 8% EBITDA.
We are looking for our product range or our proprietary range to be at least 15% of our revenue at the three- to four-year mark. That is part of the contributing factor to how we will improve our margins. The growth plan really forms, I guess, in more detail. I am not going to go through this in more detail, but it just sort of forms part of what I have just explained to you. Operational excellence, gain market share, optimizing pricing, you can see within each box there. Obviously, when it comes up and is made available to you, you will be able to look at it in more detail. Clearly, there are elements that the business works on every single day. These are not new, but we are ramping up with particular focus in those areas. Price and reset is clearly one.
Capitalizing on our merger and our synergies is two. Driving efficiencies through technology and transformational change is really the third element of where we're sort of focused our efforts. From an outlook point of view, whilst from a macro point of view, it is softening, we are not seeing that. The demand for our products is continuing to be strong and robust. I guess from our side, we're really encouraged by the fact that there's resilience in the markets that we play. We expect the second half to be stronger than the first half of not only revenue, profitability, etc. That is underpinned by the resources sector in Western Australia and Queensland. The cost inflation, we've already covered that in terms of price and resets. We'll be passing those on to customers.
There are significant revenue and cost synergies still available through Skipper , United Tools, which we've already sort of mentioned. In doing that, we're ready to sort of kick the next phase of that program off. We also have, for the first time, flagged an inaugural dividend. There have been some interesting comments that I've seen and read about this. Simply, we are paying AUD 410,000 a quarter off our fixed debt facility with Commonwealth Bank for acquisition debt. That's one part. The finalisation is 30th of June 2024. Not only is the AUD 410,000 per quarter obviously going out, but we are cash flow positive, and we intend on working our inventory harder. It is time for us to consider to put a dividend forward of between 30%-40% of free cash flow.
That free cash flow will be determined on a year-on-year basis based on the demand of the company. At this point in time, obviously, we're not prepared to give any guidance. You can see that we're starting to transition ourselves into a cash-generating organisation, which there was always going to be a point in time when that comes. Will that fund future activities? There are numerous examples of companies that blend both. If they have debt, they manage their growth and capital accordingly. They obviously still pay dividends, but they're very prudent. I think we've demonstrated as a business and as a leadership group that we manage our working capital as well as all the other financial instruments around that very strongly. Our target is something that we've maintained for a number of years now.
We have not balked at that, and nor have we changed that. The consistency in our messaging remains strong. The confidence in the way that we operate our business remains strong. The opportunity that presents itself is something that we are really, really comfortable with. In doing that, we feel that the time is near to attract a number of other investor types as well into a company that does provide dividends. We constantly come up with the issue of liquidity because the stock is held pretty tight, I guess. We are trying to create ways of stimulating more interest in our organisation, the IG, as John obviously mentioned earlier. To do that, we have to be innovative, but also very comfortable in the way that we go about our capital management.
I sit here today very comfortable after leading the business since the [CIPO] and before, obviously, as the founder, that the time is right. In doing that, we will ensure that we maintain strong disciplines around our capital management. The future is obviously well in our sights, but the time is now to put that forward. A few takeaways, which I'll leave there for you. Good performance. 95% of our products are non-discretionary. That's going to put us in good stead for the coming economic period. We still operate a conservative balance sheet, I guess. There's AUD 15 million worth of inventories. There was AUD 9 million worth of available cash and underlying bank debt. That keeps us reasonably healthy. With the way that our organization evolves, we are a growth company. We remain a growth company.
Opportunities to reduce our interest expense, which, as John mentioned, has gone up by a couple hundred thousand. The way I look at it is that's AUD 200,000 that we could make available back to shareholders and improve our profitability. We've got to be able to make the most of that when it comes available. The largest customer that we operate is 4% of total revenue. In doing that, we're in pretty good space. I think that's it, Steve.
Great. Thanks, Mike. We have a few minutes for questions. If anyone would like to lodge any, you can just type them into the question on your screens. While we're waiting for that, we have received a couple of questions, but I'll start with one that we received via email before. This one is, "Mike, acquisitions have formed part of your growth to date, and you had some growth targets in the medium and long term. Can you please tell us how acquisitions might be part of your future growth plans?
I think we've been consistent, or I've been consistent in saying that organic growth and acquisition growth, they absolutely go hand in hand with the way that we build our business. The type of acquisition has changed. What we might have looked at two years ago is definitely the characteristics of that acquisition are very different today. The size and the scale of that would have to make or have to mature that obviously is value accretive. I believe that we'll go through a period of consolidation. There will be opportunities that will be out there. We have always considered acquisitions. We've walked away from a lot more than we've secured. We have secured seven acquisitions in four years, three in the last sort of eight, eight, nine months.
Probably where I sit today, we still have at least the next six months of bedding down and making the most of those acquisitions. If there was something, it would have to be very meaningful and valuable for shareholders. It is important for us to consider that. At the moment, we have lots of organic opportunity as well that we're progressing.
Great. Thanks, Mike. We've got a question from William. "Hi, Mike and John. Well done on the half and outlook. Is the profitability in January and February running at a higher rate than the first half profit?
I feel that's a bit of a leading question. We're very comfortable with the way that the first two months have gone. Yes.
Great. Thanks, Mike. We do not have any more questions in the queue. We might just pause for a minute. We still have a couple of minutes in our time slot. Just to give you time, if you did have any questions, just to type them through. Okay. Looks like we do not have any further questions. I will just hand back to Mike to wrap up. Thank you.
Okay. Thanks, Steve. I appreciate the questions that have been put forward. If there's any more questions that people think I've opened up to us after that, to John and myself, look, probably from our point of view, there's three key areas that we see improvement in our profitability that it takes us through to our 8%. In fact, we've got a range of 8%-14% that we've identified through not only the efficiencies that I've mentioned earlier, the mergers that have come through, and the better buying power. There's a number of initiatives that sort of tail into that at a point in time. We sit really comfortable. Clearly, we want to earn more profit. That is a key driver. Everybody wants to see us do that. People are asking us how we're going to create more liquidity. The results will do itself.
We're obviously in a situation where there's people interested in opportunities and companies like us that are real and have a real operation with real people, real infrastructure, seems to be of interest. That is something that we want to take in mind, as well as obviously generating and stimulating the brand itself and pushing it forward to improvements for shareholder value. Thank you. Anything from you? Nothing else? All good? Okay. Thank you, everybody. We appreciate your attendance. If you do have any more questions, as I said earlier, please send that through. Thank you.
Thank you.