Welcome everybody to Bitcorp 2021 results. It has clearly been quite an up and down year. I think that we're very proud as to how Bitcorp and its management team and all its employees navigated again what was a very volatile year with lockdowns opening countries opening and closing. And I think the diversification of the group really held up exceptionally well. I think the liquidity was exceptionally well managed and that we can see that as soon as the country opens up, profitability comes back very, very quickly.
There are a lot of people that I need to thank for their efforts in the past year, the executives, Bernard, Dave and the management teams all over the world, the Board members, particular thanks go to Henan Wiseman, the Chairman of the Audit Committee Nigel Payne, the Senior Independent Director Founder, Brian Joffe and all the other directors for the kind of effort that they put into ensuring that BitCorp continues to deliver for all its stakeholders. So I really also have to acknowledge and I did acknowledge her at the previous half year presentation. Dolly Mccatlu unfortunately passed away in January this year and he did pay a great contribution towards his Board. We also welcome Kneelwe Molokov, who has joined our Board recently. And I'm sure that Kneelwe will have a long career as a Non Executive Director with Bitcorp, and so we welcome her.
So I'm going to now hand over to Bernard, and Bernard will take us through the results. And he will then hand over to Dave, who will take us through the numbers. So thank you, Bernard. Please take over.
Thank you very much, Stephen. And without spending too much time on the thank yous, 1st and foremost, I have to thank my fantastic management team around the world and our 24,000 odd employees around the world who've managed to navigate us through exceptionally choppy, difficult waters. And there's no doubt our customer base and therefore our business has been at the really at the pointy end of this pandemic. Our industry has been particularly hard hit and has had to adapt to particularly severe challenges. And I couldn't be prouder of the way our team has rallied to the pause and have performed absolutely phenomenally.
And most importantly, have ensured that the business remains exceptionally agile and strong and was and is in a great position to take advantage of the actual and the anticipated resumption in demand and the continued growth in our industry. So a huge thank you to them. And secondly, a huge thank you to specific to our finance teams who have been through a pretty rough year end in some jurisdictions more than others. That's been a very long and tedious process, but thanks to them for getting us to where we are right now. I don't want to spend too much time dwelling on the past because the year we went through, end of June 2021, is actually a year that we're never going to see again.
It was a very dramatic year, had lots of different components in different geographies at different times of the year. But generally, it wasn't fantastic. Generally, COVID was raging through most geographies. Government restrictions were in place in most geographies for a significant portion of time. And the challenges that we had to face were unprecedented, and we were making up solutions on supply as was everybody.
But I think when you look at the results that our people did manage to deliver, I think it's a testament to the business and the people within the business that we believe we have a great business model that's fit for purpose, highly diversified, exposed to multiple geographies, spread across lots of different currencies, lots of different experiences within the market, different phases of development, lots of collective learnings across the world, lots of synergy across the world. And it's a I think it's a model that has served us well in the past and will continue to serve us pretty well in the future.
You all know who we are.
You know what our strategy is. We haven't really changed a whole lot. And I think the most important feature of these results, When you look through them and you sit back and say, what's the most notable outcome? It has to be the strong cash generation and the fantastically strong position that business is in from a balance sheet point of view to face the future with absolute confidence and the ability to take advantage of the opportunities that can and will arise. We reduced debt down to almost nothing.
I think it's sitting at about ZAR500 1,000,000,000 at the 30th June, which were a group of our size is almost nothing. And that cash generation happened across the world and I think puts us in a fantastic position. Next slide, Ashley. Oops, lost the slides. There we go.
Okay. So before we get into the detail of the numbers, yes, I think it's important that we do understand that our most important asset for our people, I've said that before, anybody can have warehouses and trucks and and product on shelves. But we are made up of 24,000 very, very talented, dedicated people. And unfortunately, in the year, we lost 7 of them to COVID, very valuable, low prospective team members, 5 of them in South Africa, 2 of them in the UK. And our deepest sympathies and thoughts go out to their families, friends, colleagues.
It's been an exceptionally prime time. And our business is poorer for the loss of these people. And our like our sales force are with their families at this very, very difficult time. So let's just put that into perspective. This is about people at the end of the day.
The pandemic does affect people. And unfortunately, we wouldn't we shouldn't escape unscathed. And it is no, I think we do need to bear in mind, and I've said it before, that our people didn't get the luxury of working from home, most of them. We were on the front line delivering food to hospitals, nursing homes, vulnerable people, whoever else. So that's a full credit to the team and very sad tragedy that we did lose 17 members this year to COVID.
Okay. We can move on. There's some technical problem here. I'll run through the numbers exceptionally quickly because you've got them also 3 months ago. And quite honestly, the year that we went through doesn't really bear any relevance to it, what a normalized deal would look like.
There were cases in some geographies what it might look like, but generally everybody was impacted. I guess to start the corner out of all of the geographies was the Australasian business, Australia, New Zealand. And that's probably to do with the fact that from a government point of view, their zero COVID, their elimination strategy generally worked. And we didn't have the severe lockdowns generally that the rest of the world experienced. And I'm talking to June, to the end of June.
New Zealand only had limited a very limited number of lockdowns for the year under review. Australia had Victoria that was locked down for about I think it was about 6 months, 5 or 6 months in the first half of the year. And after that, there were rolling lockdowns in all the states and territories for weeks, 2 weeks at a time. That does impact the results and made it a little spot spot. But notwithstanding that, the businesses performed exceptionally well.
Under the circumstances, they bounced back very, very strongly once things started opening up and normality set in again. And they put in a very, very good performance. I guess going forward and I'll focus more on the future than the past. The Australian New Zealand business is more of a challenge in this current year. Sydney has been in lockdown since the end of June, and we're due to come out of that in a phased manner in the next 2 weeks or so.
Victoria has been in lockdown. Victoria, Melbourne, I think, is actually the most lockdown city in the world through the pandemic. They've been in lockdown since July. Some of the other states have had week and 2 week lockdowns, but the ACT has been locked down since August. So at the moment, we have 60% of the Australian population is subject to a lockdown order.
And it's pretty severe. There's only takeaway and home delivery allowed. There's significant curves on the movement of people. In New Zealand, they've been in a very severe lockdown since, I believe, it was about the middle of August. That got wound back slightly in Auckland now that's in the severe lockdown.
But bear in mind, in the New Zealand context, Auckland accounts for about 40% of the population of New Zealand. So that's a pretty severe lockdown. Having said that, the Australasian business is still profitable. Obviously, we're not operating at these levels and delivering these top margins at the moment. But we're very confident that when things do resume, the Australian Brazilian business will bounce back very, very strongly, very, very quickly and take their place on the leaderboard once again.
So excellent performance in the previous year will be a little bit of a downward trend in the 1st 6 months. And then hopefully, going forward, they'll start reopening and get back to some type of normality. And I suppose just to highlight the challenge of government's approach to how they handle the pandemic between elimination, eradication versus living with lives. And I'm no expert, so I won't really talk about it other than it does have ramifications of what happened in the business. Okay, let's move on.
The U. K. Was probably the hardest hit out of all our businesses because it is just the U. K. And we have no geographic diversification there.
And the lockdown went on very long. I think that started in about October. So July, August, September were reasonable trading months. From September onwards, it was downhill very quickly. And they only started coming out of their slumber, I think, because in about May.
And Freedom Day was in July. So they went through 9 months of lockdown and it was very, very severe and the implication of that was very significant and that's reflected in our results. But as I keep on saying, we're still profitable. The business was left in good shape and handled the upturn as it started coming at us and it started coming at us at a rapid rate. Now we did take the time to streamline the fresh business, to take cost out of the business, to integrate some of the back end into the Pitts Foods back end to get some cost synergy and cost savings, and we're definitely benefiting from that as we go forward.
So we've seen volumes in the UK rebound very, very dramatically in addition to business wins that we have. Sales are strong. They're strong across fresh. They're strong across the good food broad range business. And that business is really in a very strong position other than, and we'll talk about it I'll talk about it generally at the end, the issues that are facing many economies at the moment, the supply type issues that we're facing in all our businesses, which are giving us a little bit of headwind, but notwithstanding that the business is strong, demand is very strong and the performance that we're getting out of both our businesses in the U.
K. Now are very, very strong. But that covers up the UK. Europe is also into a very tough time, but the results are a little bit more stable than maybe the UK because of that diversification. So we do have the Czech business, which has a component that manufactures and sells into retail.
The Baltic operation sells a little bit into retail. And we also have the benefit of both our Spanish and German businesses, weirdly, not really, it's by design, but they did a whole lot better in the year under review than they did in the previous year. So a whole lot of the hard work that we did is actually reflected in the results of them contributing way less losses than they did in the prior year. So we're very comfortable with that and absolutely bodes well for the future in those businesses. Once again, as we look forward in Europe, they had a very, very, very strong summer across all our geographies.
We're profitable in every geography in Europe. Sales are very strong. And most sectors have bounced back. There are a few that haven't got full traction yet. Office return to office hasn't really happened fully yet.
We estimate that at around about 7% as a generalization. Travel is bouncing back, but it's certainly not at the same level that, of course, are. We're talking about air travel and probably international air travel. So there's a lot of localized travel and tourism, but there's certainly a very limited amount of international tourism. And maybe we're a beneficiary of that in terms of staycation to local tourism strength.
So that's Europe, if we move on to emerging markets. And emerging markets is once again, it's a very diverse portfolio of businesses ranging from Asia to Middle East to Africa to South America. The performance overall was very particular as well. The Asian business has performed well. And once again, that's because of the government eradication strategy, which has left them basically cut off from the rest of the world, but performing very well domestically.
And we're certainly seeing the benefit of that in both Chinese and the Hong Kong businesses. And our view is that both Hong Kong and China are going to stay coupled from the rest of the world for a reasonably long period of time. Singapore is slightly more complicated. They were cut off. They have been in lockdown for a significant amount of time.
They decided that living with the virus was a way to go. But now it seems like there's a little bit of a hybrid going on with sort of a change in heart and some restrictions being put back in again. Notwithstanding that our business is doing relatively well. Bearing in mind, Singapore is a travel hub as is Hong Kong. So you're missing all that international traffic.
The Middle East went through a rough time but came back very, very strongly. I think their vaccination rates certainly were up there with leading rates in the world and they'll reopen very soon and the business has been very, very strong. South America went through a very, very difficult time of COVID. But it's fair to say our businesses in South America are in much, much, much stronger position than we were going into this pandemic. And just as an example, our volumes in Chile of 3x what they were, They now are currently 3x what they were before the pandemic, pre pandemic.
Our Brazilian volumes are ahead of where they were before the pandemic. So there's no doubt we picked up market share, and we've also picked up share of baskets and our guys have done a fantastic job of moving into new markets and new product ranges. So we are very pleased about the future prospects that will come out of South America. In South Africa, you guys most of you probably know the conditions there that in Nardu has been a little bit challenging. But 2 out of our 3 businesses reported record results, being the Crown business and the Chickens business.
They performed beyond the expectation and did phenomenally well. The good food business, which sells to restaurants and hotels, etcetera, obviously had a tougher time with restrictions in alcohol, bans, etcetera. But we're still profitable at a very healthy level. And we've certainly seen a very rapid pickup in customer demand now that things seem to be easing up a little bit. So there's a lot of information in the pack.
There's a lot of detail, a lot of it's historical. I'll just roll for a few minutes as to where we are at the moment. I have touched on most of it. But generally, around the world, we are seeing very, very strong growth. So we have released our sales data to the end of August.
The trend absolutely has continued in September. Our sales are tracking basically at or above 2019 levels other than Australia and New Zealand, in particular, which are partly contributors, but they're trading that's absolutely attributable to COVID and lockdown issues. So we are seeing demand come back exceptionally strongly across almost all segments. We're very happy with where our customer proposition is positioned at across the world. We've done a lot of work over many, many years in terms of getting the right customer mix.
We've spoken about it for many, many years, and we're very happy with where we're at with that. And I think that's the reason we were able to perform relatively well through the pandemic and while we've been able to adapt and react to the market opening up again as well as our guidance. There are some clouds on the horizon, and I don't want to be too negative about it, but we do need to be pragmatic. I'm sure you read about it and you see it on the TV at all times. There's a shortage of labor across almost all our geographies, with probably the exception of South Africa and South America.
We just can't get sufficient numbers of workers, particularly in warehouse and distribution part roles, which is being which creates a lot of challenge and have a lot of demand. Not only are we having staffing problems, but our customers are having the same problem. So they can't get people to staff their hotels, their restaurants, their partners, whatever else. So they can't operate at the full capacity that the demand is almost taking that they should be operating at. So that's a major problem that the world has to overcome.
And I'm sure that, that equilibrium will be restored at some stage once people can start moving around again. And people will go where the opportunities are and that equilibrium will be restored. But that certainly will take some time and it absolutely is causing us some pressure. There are cost pressures In the Northern Hemisphere, fuel, electricity, gas prices are skyrocketing, and that obviously has a significant implication. There's food price inflation on the way, some of it's here, some of it's on the way.
We believe that, that will be able to be passed on. We're still confident about that, that it will still be manageable and we still will be able to pass it on, particularly because the demand side of the equation from our customers is very, very strong. And I guess, there is also dislocation in terms of availability of things that you need to operate your business. So it's very difficult getting motor vehicles, trucks, forklifts and all those other simplifications that you need to operate your business. Fortunately, we well invested and we never uninvested in the last year or 2.
So we are in a strong position, but we do understand that there's a year to 2 year delay in getting much additional capacity on stream. So those are the challenges that we face. I think we'd rather face those challenges than challenges we faced in the previous year. I see them as positive challenges. I see them that they will create opportunity for us and our business is very agile and able to take advantage of those circumstances in their lives.
The other thing I should have mentioned is our commitment to ESG. Going back to 2018, we committed to reduce our emissions by 25% by 2025, and we're well on track to achieve that. Obviously, we'll be looking at future targets, 2030s 2050s. We don't just want to commit to something without having a plan as to how we can actually achieve. I won't be here in 2,050.
I can't give you the guarantee on that. So it will be very easy to meet this level, we commit to being this year over 2,050. But we need to understand how that will work, bearing in mind that we have 2 components that contribute the majority of our emissions. There's the electricity consumed in running our warehouses, and that we've done a very, very good job of and continue to in terms of going to renewables, in terms of solar, wind and whatever other new technologies will happen. That has been very, very successful and has driven down our consumption quite dramatically.
The other major component, which we are struggling with as we've seen the world generally, is we're a distribution business. And we run thousands of vehicles around the world every day. And I'm told there's a credible alternative, we just don't see the path forward as to how we can reduce that. Now obviously, we will buy the most efficient vehicles we could buy. We are trialing some electric vehicles, but they have great shortcomings in terms of range and payload.
But who knows where the next leap is going to come. But we will we are eyes wide open and we will invest where necessary to help us along that journey. So yes, we'll watch that space with great detail and we do understand we have to invest in it, but there will be a return on the buyback. So we're very committed to that. The outlook, as I said, we're very positive.
We're already 3 months into the year, so it's a 1 quarter down. We are very happy with where we are at the moment. And yes, we're positive. We don't know what the future is going to hold in terms of COVID. So there is always this caution of is COVID going to come back, are restrictions going to come back?
We don't know. We hope not, and we're planning that they aren't. So we're going down the positive path of business is going to continue and life is going to get back to normal. And we're all going to transition from a pandemic to an endemic and life will get back to normal. So we're in a very happy position in our business.
There are some acquisition opportunities we made up here last year. There are more opportunities that are arising. We have said that they're primarily in the emerging market segment. A few things have changed over the past few weeks. There are a couple of opportunities in some emerging markets as well that we're looking at.
We certainly got the balance sheet to make these acquisitions. So we remain very committed to not only giving delivering organic growth, but also some acquisitive growth as we go forward. So thank you very much. Thanks for your patience. Thanks for listening to me.
And I'm going to hand over to David to talk you through the financial segments and then we'll have a Q and A session. So if you could please send your questions to Ashley. I noticed that one of them did pop up on messaging in Zoom. But if you could rather just use the Q and A capability in the I'm not sure exactly where it sits, but there is a Q and A capability. So over to you, David.
Thanks, Stuart, and good morning to everyone. Just as we normally say, the numbers we are showing are obviously in terms of IFRS. And our current policies are consistent with what you did previously and applied accordingly. And And the figure, as mentioned, of the Hong Kong filings team, which has had a pretty tough time over the last 3 months. We obviously had a disappointment, and it's coming in 3 forms, I guess.
Firstly, the discovery of the fraud related in June and the work that's gone around that. It's a disappointment because I guess it's been primarily driven by collusion of our management team. And when you get that typically, that's why we're internal control is going to take, they get over and these things are typically very difficult to detect. And it's all a setting number from our perspective, but it has been perpetrated over 5 to 6 years. And I think we take each number in context per year.
It is not that material, but certainly from our perspective, it's having absolutely prudent view and written off the full amount. But we are obviously very positive or confident that we're going to get some recovery from the perpetrators, some insurance and from the other parties that have been involved in this. And we are obviously pursuing the criminal side of it as aggressively as we can. We're seeing disappointed by the delay in the results, but the reality was because of the timing, we needed to make sure that the forensic investigators and the auditors have enough time to look at 3 credible issues. 1 was just making sure there was any complaints to this particular segment of the AGRIS Greater China Business.
The second was really quantifying the losses. And the third was really trying to allocate those over the current period. And accordingly, we needed to state our accounts as I said, not particularly material. But if you take that more than 1 year, they were material. It resulted in modified opinions about oysters.
The oysters could be comfortable in containment, but we're not able as a result of the forensic investigation, still not being complete, able to get sufficient evidence around the loss, the cost of action of the loss and the allocation. So we were up against the reporting deadline in terms of our JAC obligations, and therefore, we ended up where we have ended up. I'd like to thank the Whittleson for all the efforts that have gone in over the past few months in terms of getting us to where we are today. And other than that, it's been a rather uneventful year. So if I go into the numbers, just really some highlights.
I think overall, it's an excellent financial performance considering the conditions that you've heard from Burnet. We had 12 months of COVID in 2021 as opposed to 3 of us in 2020. So one is to consider leases in that context. And certainly, from our perspective, we're very happy with the results. Revenue is down 5% in rand terms, about 9% in constant Forex.
The gross margin is very largely maintained, so that's obviously a pleasing achievement. EBITDA margin was 5.1%. And we put there just to compare it back to 2019, which obviously was the last pre COVID period that we had, the fall period that we had 6.1%, so we were far off or the result wasn't far off when we were in the end of 2019. Trading margin of 4.2%. Obviously, well, through all the months in 2021, we were profitable despite the severity and the different lockdowns that we got in all the different jurisdictions.
Headline earnings was up 21% or 22% and HEPs likewise up £0.68.04 As Bill has mentioned, working capital better by 7 days, dollars and we generated $600,000,000 That's on top of the 2020 generation of $1,300,000,000 So generated cash flow from operations was very strong and a real highlight in the period. What we call our pandemic era free cash flow, that's basically from the end of February to the end of June, nearly GBP 300,000,000 of free cash flow, and that excludes the benefits we got, one off, I guess, of the same leaseback transactions and the dividends we issued with those. We declared a final dividend of ZAR 4 per share, which is 2.1000000x covered, largely in line with our improved policy. In terms of the P and L, revenue in constant currency was 8.9.2%. I think one of these factors in context of the harsh Q2 and Q3 and a bit of Q1 and maybe a bit of Q4, particularly in the U.
K. And what they went through. But as those are related to the sales that we're covered to basically where they were in 2019 through July 1st September. And that's not withstanding where we what you've heard in terms of the restrictions that Australia may have made in Northern New Zealand as well. As I said, the growth profile has held up well, and I think particularly strong considering the trading environment.
There was some price discussions again market share in a number of jurisdictions. And the businesses have been subject to, often as we've seen in major sections, suddenly there's lockdown. They come quickly and money needs to be able to deal with short dated inventory, and that does have some impact. So I think in the context of those initiatives, the GP is not as protecting well. Our operating expenses have been very well managed.
I think just to put it in context, our constant currency revenues were down 9%, and our care and our operating expenses were down 13%. There was obviously, and as we've alluded to a number of payers, government protection assistance or government employment assistance, which has helped cash flow, but doesn't impact the P and L. So those numbers have benefited the cash flow temporarily. I think this is really just a time issue. Our interest is down.
We've secured in the sales of previous interest and FX by 23%, and that's really been driven by the better asset management and generally cash stronger cash flows. We have some capital profits net of EUR 243,000,000 positive Israeli profit on the side of lease back of transactions we did. There have been some impairment to PPE. The fire we had in November of 'twenty was a contributor, And we've written off a lot for these IT or intangible assets, which related to IT, where we've seen change in technologies. The tax rate is up a little bit from the effective rate from where we've been.
They're going to just really about a contribution issue, Australasia being a big contributor in the result and then they're having a higher tax rate. And what we mainly see we do here is anticipate as mortality returns, whatever the normality is that our tax rate should track down a little bit further. As we say, cash as the cash flow is very, very positive. I mean, I think one thing to just bear in mind that the objective over the last 18 months has obviously been survival, making sure that we have liquidity. Our businesses have liquidity and they're in a position to be able to deal with the varying operating conditions that
have played out in the different parts of
the world. So I think just to acknowledge the group has done a fantastic job in that space. The working capital, as I said, we generated €600,000,000 Our working capital on average days was 7 days as opposed to 14 previously. Another metric which we look at is net working capital percentage versus the annualized revenue. We have given guidance that we expect that under normal sales business to be extremely 4% in the past year, it was 0.5%.
So we're doing a great job there. But we do, as Bernard indicated, because of supply chain disruptions and some cases of product availability, we don't have that the business where they can get product will be stocking up to make sure that they have sufficient products to supply their customers. I'm seeing both provisioning has been largely maintained. From our perspective, I don't think we will done with the work yet. What you are seeing is obviously reductions in support programs, government support programs in terms of for businesses, in terms of rates, debt, all those kinds of things, those things are going to come back.
And obviously, in terms of people, in terms of government support, see those are
one way down as the
world emerges from the pending accident. I think some of the economic consequences are still going to trade out in some parts, and therefore, we've maintained our incentives to provisioning. In terms of investing activities, we did include a number of some leaseback transactions, which really are principally designed to maximize our, what we call, introduced for life properties. We did realize about $1,600,000,000 We were affected by particularly favorable deals in many markets because of industrial property. The way it's opportunistic is obviously the strategy behind them.
And that was a good achievement from our group property manager. He does a sensitive job. Net debt is €500,000,000 a consequence of basically all the cash flow benefits and the good job that we've done, largely end year from our perspective and gives us fantastic opportunity and headroom to be able to take on organic and competitive opportunities as we go forward. Next slide, please. I think really just to reiterate what we've seen in terms of the cash flow under the pandemic era and something that we as a group are particularly proud about.
Next slide? Just in terms of our balance sheet, financial position, very strong. Nothing really said. There's no change to our mismanagement policies in the way we've approached the Board. On terms of our liquidity, we've got ample headroom in Q1 to year end or end of June.
We have raised an additional €200,000,000 in terms of the last year. That will be used to take advantage of opportunities and also to try to make sure that we more efficiently manage the cash flows around the group. So that's been done at firstly good rates, and we're happy with that. We saw the steady equity very, very low and I think the generalized EBITDA, excluding IFRS 16 measurements, basically at 0.1x and well within now covering 15.5x. So we're very comfortable with that.
In terms of financial guidance, obviously, as you've heard, we've got sales of that quickly, and we've had a particularly good Q1. The impact of the Northern Hemisphere winter, I guess, is uncertain, but I think that's not compared to where we had previously. The world up there is vaccinated, and I think you'll see a further less restrictive environment as we go forward. We are cash strengthened, and we do anticipate that to continue. As per the early cases, there will
be we anticipate there
will be some inflation coming back, both through product pricing as well as the cost push of the staff shortages and the energy prices. The absorption of getting capital is we'll expect that as normal trading cycle returns. I mean, as we're aware or all of that are aware, we generally absorb moving capital in the first half and absorb it in the second half. We haven't seen this through that for the last 18 months. But as the world normalizes, we do anticipate that to happen.
And as I indicated, there is some deliberate stocking up due to supply chain issues that are being experienced in part of the course. We do have some maturities debt maturities in the second half of the next financial year, and we don't need to deal with those. Nothing in particular. We are seeing a step up in CapEx for those jurisdictions where activity has returned and the investment is for obviously anticipated growth. And it needs to be evolved upon well ahead of time because of lead times and developing principally what our lead time is this competition.
Our financial position remains strong, and we do believe that's going to be a competitive advantage. You've heard about opportunities starting to rise from the acquisitions perspective.
What we
say is very volatile yet, that's still unpredictable COVID world. There will be introspection than what we've stressed in terms of our business that are being renewed forward. But once again, we need to find the correct balance between Lake Shore as the business remain entrepreneurial and operate within a decentralized group model versus
what we try and restrict from
a sense of. So that obviously is in balance that we will continue to make sure it's balanced properly. And in that case, our philosophy is hedging at the liabilities and that will remain. But this will remain conservative, as I said, because of economic conditions that are likely to materialize. But then the forecast remains difficult.
And therefore, we're not really giving any guidance going forward. And 2, the Q1, as we said, it started off particularly well. So we are optimistic, and we are just spending growth. But difficult to now we think down and predict anything as we sit here today. So on that, I'll hand back to Beau to take questions.
Okay. Thanks, David. The one thing we didn't mention was a dividend of ZAR4 being declared, which is the largest dividend we've ever declared. Bearing in mind though that we didn't declare a dividend in February, So it's in respect to the full year. Our intention is absolutely to go back to pay an interim and a final dividend in the year ahead.
And we certainly see that as being the reality unless something very, very, very unfortunately untoward happened in terms of COVID, which we don't anticipate. So that's a feature that we should have mentioned. I think it's about $1,400,000,000 of cash will be paid out in dividends. What I want to do is go through the questions. So a whole lot of questions have been sent to Ashley.
I'm going to read the question out and then I'll try to answer the best I can or David. So from Warren Riley, Australia reported a strong second half. I calculate trading margins of 8.4% in the second half. Quickly disclosed the absolute contribution from government support in the half? Where do you see normalized Australian trading margins going forward?
And monthly net working capital base, half to 7 days or 14 days, Should we expect it to return 14 days in the year ahead as markets reopen? What is absolute expected working capital outflow? So let me try and answer that as best I can. The segments in Australasian segments are the blend of Australia and New Zealand And there's differences between the 2. In terms of government support, there's A9 1,000,000 effectively, it's about A9 $1,000,000, call it ZAR90 1,000,000 of government support in the second half.
But once again, and we keep on saying that the 10th of an academic argument is that's offset by the fact that you've got the payroll costs. So you're carrying on taking people on during lockdowns, which did happen, but you're recognizing some income from the government as well. But it's $9,000,000 And do we anticipate the margins to continue at that rate? I think that was part of the question. They are very high.
And they're very high for a number of reasons, and conditions were very, very good. We'd be disappointed if in a normal year, we didn't see margins pretty similar to that. In the current year we're in, we won't see margins at that level because there isn't government support and there is obviously a downturn in trading because of COVID restrictions. In terms of net working capital, look up, I don't know what these days mean because it's a statistic. And you've got a denominator and a numerator and your sales number is a collection over a few periods of months.
You've got sales increasing relatively rapidly and it does all types of things with ratios. So I wouldn't get too hung up with whether it's 7 days or 9 days. I think you need to look at the absolute numbers and what has happened subsequent to year end and the absorption of working capital subsequent to year end. And we haven't seen any great absorption of working capital subsequent to year end, notwithstanding that we've seen strong turnover growth. So our working capital has continued to be very strongly managed.
Obviously, we do need more working capital as your base grows, but it certainly hasn't been a major issue that's gone to a level that was maybe 2 or 3 years ago. Ago. I think at this stage, there seems a permanent change in the nature of our working capital makeup. Next question is what loss U. K.
Fresh made its financial year, what percentage of U. K. Turnover is fresh and where do you see normalized margins for fresh? What loss did Germany and Spain contribute this financial year within the European division? Now under normal circumstances, I actually wouldn't give you those numbers because we don't want to split it up by country.
We've got these divisions for a reason. There's competitive reasons as to why we don't disclose certain issues in certain markets. But I'm happy to tell you the numbers because I think that paints a very positive picture for what lies ahead. In the UK, bit fresh was about 8% of total sales in the year that we just finished. They were more likely from a revenue point of view than the print food business because they didn't have the hospitals, etcetera.
We reckon it's somewhere between 14% to 20% 15% to 20% contributor to revenue of the UK segment. We also lost within the profit that we made in the UK, there's a loss of 23,000,000 for fresh. And we're very proud to say that the first 2 months and we anticipate the 3rd month of the current year, fresh Australia's profit. Germany lost $5,000,000 last year and Spain lost $11,000,000 last year. Once again, we're very happy to say that those businesses have operated at Spain and Germany have operated at breakeven the profit making levels in the Q1.
So there's quite a big swing there if we can continue that momentum and that trajectory on those 3 problem businesses, which we've always identified as our problem children, which we think are absolutely out of intensive care now and are absolutely on the road to recovery and we're very confident about the future prospects. They're not going to kick the full goals necessary in the 1st year, but they're absolutely on the path to recovery in our team. What is your outlook for CapEx and working capital trends in FY 2022? Do you think net debt will reduce further? We did benefit from a cash flow in terms of we didn't pay dividends for the year.
And we also have the proceeds of the of side of leaseback transactions. The counter to that is we are generating a lot of money out of regular trade. So we believe that with our dividend policy of between 2.2x, 2.5x covered, with our normal CapEx spend of about 2% of revenue. And with working capital being managed, we will be cash generative, which means we should see an improvement in the debt levels other than we do not need to now account for the fact that there are dividends going up. So I think I hopefully can have answered that one.
Please, could you give more detail on your own brand growth and prospects and what percentage of the business is owned brand now? We estimate as a blended average across the business, owned brand is about 20% and it's growing strongly. And there's no doubt that supply chain disruptions give us good opportunity to grow that even When you just don't have the availability of inventory and you do have a house brand, it makes it a lot easier to convert your customers. And generally, once you've got the customer into a house brand product, there's a high degree of stickiness. So we see that as a positive for our house brand.
Could you perhaps give some comments as to whether you believe the Australian business damaged, traded techno up margins at quarter portion volumes to return? I think I have answered that question. Please also bear in mind though that go back in history, you'll always see that the Australasian business performs much stronger in the second half than the first half and that's to do with the recognition of some rebates and growth rebates from suppliers and the freeing up provisioning, etcetera. So the second half margin doesn't protect the full year's margin and it's normal for the second half to be higher than the first half. Does the qualified August opinion issue have any practical impact on the business, covenants, listing rules, etcetera?
I actually can't answer that question. I'll maybe get David to. The only thing I will say on that is we have spoken to our bankers. We spoke to them a while ago. None of them are overly concerned about it.
They all see it as a pretty minor isolated contained issue and they expressed my concern whatsoever and are very comfortable to lend us money based on our financial position and our performance in us from cash generation. So I don't think David put anything else to add in terms of practical impact.
Not really. I mean, I think, obviously, what you should misunderstand, as you said, it's a nice little small marginally small impact. And I think that's the basis of the qualification. There are some practical issues from the what's needed to remove that qualification like a review what is that will have to be done on the half year numbers. But other than a cost issue, I don't believe it's a big practical issue.
Okay. Thank you. Certain sectors are not trading at normal levels yet, hotels, catering and office, etcetera. Historically, what percentage of sales are delivering to these sectors? I can't even answer on that.
It depends on the business and the geography. In the UK, for example, the most recent feedback we've had is that basically all sectors are trading above 2019 levels except for the office, the work environment, which is operating at about 70%, international cable, which is operating at lower levels, quite a lot lower levels and the cruise industry. But besides that, everything else is operating at normal levels. When you move to Australasia, obviously, it's a very different issue. And then I think the Europe levels would be very similar to what we've seen in the UK.
On Australia and New Zealand, how
is revenue statistics with the potential of 2019 2020 levels panned out in September? Have these continued to track down significantly. Now that's actually improved. So September in both Australia and New Zealand was better than August. The differential between they basically I think they were about 10% down on 20.20 levels a year ago, which was operating almost weekly across both of them.
And it's about 15% down on 2019. So I think the businesses are holding up remarkably well, bearing in mind that 60% of Australia, 40% of New Zealand is under severe lockdown. Reversal and Uspac transactions, which is obviously largely profitable, more expected in coming years. Look, I think we took advantage of market conditions where yields are very, very compressed, and we sold a property in Hong Kong and 3 in Australia, which one was pretty large. They will continue.
It's part of what we do in our property portfolio is that's the way you maximize your end of life use out of the assets. The complicated issue there is the replacement now of assets of real estate is becoming quite difficult, both from a cost point of view and a timing point of view. So we might just have to stick with what we've got for a little bit longer. But absolutely, as part of our real estate portfolio proposition is to do these transactions in order to maximize the end value of end of life properties. Could you please comment on the trading levels in Australasia?
I commented on that one. Gross margin management has been in the stable for the group. What would it take to get back to 2019 cost income plus operating margins? I think we're there. So our cost our gross margins are very similar to where they were in 2019.
Our costs are probably a little bit better than where they were in 2019 with severe pressure. I'm not sure we're going to be able to maintain that cost benefit that we picked up through the pandemic. We've got very strong wage pressure, we've got very strong inflation cost pressure. So yes, I'm just not so sure that we'll be able to hold on to that full cost reduction for too long. The cut cost during the pandemic here we go, but are facing inflationary pressures.
Others are equaling to cost base compared to FY 'nineteen. Like I said, at this stage, it's probably a little bit lower, but I'm not sure how long that goes on. Please, can you comment on e commerce platform sales with fixed revenue and what you're seeing in terms of competition from food delivery businesses? I'll answer the second part first. Food delivery businesses are not competition to us.
They're delivering the end product from a restaurant or a dark kitchen. And those restaurants and dark kitchens are our customers. So whether they service the end user away of takeaway, by dine in or by home delivery, it's still a potential customer for us. So we don't compete against the Uber Eats, etcetera. That's not our competitor.
Possibly our competitors retail home delivery, but that's just the split between retail and out of home. In terms of e commerce, and I guess it was remissing me not to say, the businesses have made remarkable strides forward from a very, very, very strong position anyway in terms of technological advancement. Now one thing we don't do is talk like a tech company, like a startup and maybe we should and throw in fancy slides and fancy words and fancy percentages. But a large proportion of our business is done electronically. The smart that we have in the business are phenomenal.
The back end is incredible. The data analytics that go into it are very good and that helps you maximize that margin and maintain that margin and grow the customer and grow the basket and ensure customer retention and loyalty and all those other good things. So we do a fantastic job of it. I don't really talk too much about it. But technology is a very, very important part of our DNA.
We think it's a very, very strong competitive advantage and it's something that gets is getting increased investment and management attention. Now the investment bank isn't huge, huge, huge numbers, but it's enough 1,000,000 of dollars or pounds to make sure that we're actually ahead of the path and that it works. We're very fortunate that our technology is servicing a base that already exists. We're not trying to create something new. We're not trying to invent a market and talk about a market that we're going to create.
We already have the market, have the customers, we have the product, and it's for us to maximize that relationship. And our team does a fantastic job of that. We've got an incredible team of developers and the output from them is absolutely amazing and the technology is amazing. And if any of you know anybody who owns a restaurant or is a customer about, I think you need to talk to them and see if they are using that technology and what they think of it. But our view is it's not leading on a country by country basis.
We're getting huge uptake, and it's a very, very exciting part of the business. But please bear in mind, we're B2B. We're not B2C, and we don't intend to go down B2C part. We played around with a little bit during the pandemic and we did a little bit of it. And as I said before, that was to keep our people busy and motivated as opposed to trying to be profitable.
We don't want to go to the B2C market. We are very, very happy with what we do in B2B, and I think we do a relatively well. With sales of 2019 levels of Airbus, cost cutting from last year, confidence of passing cost, that's the cost of earnings returning 2019 levels, is that the benchmark for the year? That's a very good question. And yes, it probably is bearing in mind this year into normal year because we still have COVID, we still have lockdowns, we still have uncertainty.
And if all things were equal and things carried on the way they are and you can see the incremental improvement in Australia in the years over the next few months, let's say absolutely that 2019 is the first quarter call. And it's very much within reach, but we're not fortune sellers. We unfortunately don't know what's going to happen. Are you experiencing any supply chain issues in the UK in terms of lack of truck drivers? Is the lack of fuel equipment in the UK an issue for your fleet?
Please elaborate on supply chain challenges in general that you talked to in your outlook. Okay. So in terms of truck drivers, I asked Andrew this question specifically. In April, we were 200 truck drivers short for the reopening, when we saw the reopening happening. We're talking about HGV products, heavy goods vehicles.
We recruited 300 drivers. We lost 150, and so we're a little bit short of the month. We're about 50 drivers short. So out of 1200, that's not all that significant. And our service levels, although not where we want them to be, are acceptable in the U.
K. Context compared to what others are going through. If the lack of and sorry, if the driver issue is less of an issue in the fresh business because generally, they're small vehicles that can be driven on a regular car license. Is the lack of fuel an issue? No, it isn't.
It is something we plan for. We do have contingencies. We do have on-site storage at most of our depots. And I guess, we do get priority because we are dealing with institutions like prisons, hospitals, defense forces, etcetera. So no, it hasn't brought us any major issues.
There's been a very limited amount of disruption. And the supply chain challenges, look, it's very difficult to there's a dislocation in shipping containers. They're all in the wrong place, particularly reefers, refrigerated containers. They're in the wrong place. Shipping is very expensive.
It's unpredictable. Shipping times have blown out. You order containers, you get none of them, then they all appear at the same time and there's no one at the walls to move them because they don't have truck drivers. So those supply chain challenges have a knock on effect. And it's not only an important product for us, it applies to our suppliers.
So our suppliers are having the same issues in their supply chain. And they might be missing the screw cap on a bottle or one ingredient that goes into a sieves and a cyst that's right through the whole chain. And I think it's going to get worse, not better. What scope do you have to further automatic operations, robotic picking, etcetera, to mitigate labor cost inflation in the short term variable because you have to invest a huge amount of money in real estate. So if you want to go down that robotic park, you actually have purpose building facilities to handle it.
So unfortunately, in the short term, we don't see that as being a quick way for us being able to do. But in the longer term, it is something we're looking at. We've seen some of the automation that is happening in retail, and it looks very, very, very impressive. But it's not actually cost effective yet. It might become at some point in time, but at this point in time, it's not cost effective.
But I suppose that's going to go at some point in time, it's going to not going to be a cost effective issue. It's going to be a necessity in terms of label We have seen restaurants simplify and convincing the menu since the pandemic. It was something that has continued until now and what has been the impact on the business? Do you expect menus to return to normal as normal as I said? I think there's no doubt that in a year or 2 or 3, things will go back to me.
But right now, operators have simplified their lives. They have moved to more standard type ingredients. They have moved to simpler menus. And it's going to stay like that for a while, particularly when you've got supply shortages, when you've got new disruptions we talked about. They're not going to want to go for too much of a novel experience.
That will change, but we're not seeing a change just yet. And we're quite happy with the way they have done it because like I say, we've got more opportunity to sell house brands and we've also got more opportunity to simplify the range. With your balance sheet basically and yet do you see enough acquisition opportunities to utilize this capacity, could we expect increased dividends? David, I'm going to let you answer that.
Yes, I think the policy has been may say the conservative position. I don't see that changing as we go forward. So there will be balance between CapEx, acquisition opportunities and dividends. And I don't see we've got a policy, restructured and short term aberrations can change. Again, conditions can materialize and make a change position of the group.
So I guess we will stick with where we are from a dividend perspective and acquisitions, we will take advantage as they come along.
Okay. We have no more questions. Thank you, everybody, for your attendance. I really do appreciate your continued interest. We will give the market an update in it's probably about 6, 7 weeks' time towards the middle end of November, I believe we're scheduled for.
Once again, just a great shout out to the team around the world. They really are an amazing bunch of people. I haven't seen most of them for 18 months at least, and I did miss them. But they have done us proud. They've done shareholders proud, and I think the business is in a very, very strong position.
Thanks to them. And we remain very optimistic about the future and look forward to sharing some more good news with you in a few weeks' time. So thank you, everybody, and good night or good day. Thank you.