Earnings Call: H2 2020

Nov 16, 2020

Good day, and welcome to the Diploma Full Year Results Webcast And Conference Call. At this time, I would like to turn the conference over to Johnny Thompson, CEO. Please go ahead, sir. Thank you. Good morning, everyone. Thanks for joining our call. I hope you're all well. I welcome you to diploma's full year strategy and results update. I'm joined by our CFO, Barbara Gibbs. Shortly, I'll give an overview of the year. Barbara will then take you through the financial performance. And I'll return to update you on our progress with the strategy and review of the businesses and our outlook. There'll be plenty of time for questions and answers at the end. So a year ago, I set out a diploma's strategy. So much has happened since then, obviously, but despite the environment, it's been an excellent year of progress with our objectives. We continue to focus our growth in key markets and products looking to build high quality, scalable businesses for organic growth. 2 standout achievements from this year. Firstly, the transition to a new state of the art facility in our North American aftermarket business in Louisville is nearly complete and will deliver exciting market share gains. And secondly, the acquisition of Windy City Wire provides us with access to the US in our control sector and to a high quality scalable platform that will be accretive to the group's growth and margin in the future Our performance has been strong in the conditions of the last year. Throughout margin and cash have been excellent, and our underlying revenues have progressed steadily from April closer towards pre COVID levels. This demonstrates the fundamental resilience of our group, born out of the essential nature of our products and services as well as the diverse range of end segments and markets. We continue to focus as our priority on executing the significant organic revenue growth potential we have in each of our sectors I'm very proud of our people. They have done a tremendous job this year. We are managing through the COVID-nineteen crisis well, making a difference to our colleagues, our customers and to our communities. We've established a strong and cohesive senior management team in 2020, I have taken the opportunity in these circumstances to develop and align the diploma culture. So I feel we're well placed to manage our agenda On to slide 4, a few words on our strong performance in 2020. Reported revenue fell by 1% in the year with underlying revenues falling by 7% and an excellent contribution from our acquisitions. Particularly VSP. Margins remained robust at 16.2%, a little lower than normal due to of operational leverage as well as some restructuring costs this year as we reposition some of our businesses for growth. The margin is, however, better than expected due to very tight cost management. Cash flow was incredibly strong with year on year growth of 28% due to improved working capital management. As a result of the strong formats and our confidence in the future. The board recommends another year of progressive dividends with a proposed interim plus final dividend of 30p. I'll hand over to Barbara. Thank you, Johnny. Here's the summary of our financial performance during 2020. We've produced a strong financial performance in the context of a challenging year. Let me take you through the main points. Revenues were $538,000,000, up at a consistent level this last year and only down 1%. This was driven by acquisition performance of about 7%, offset by underlying growth of minus 7% and a small currency headwind of minus 1%. Adjusted operating profit came in slightly ahead of expectations at $87,100,000. I'm pleased that we were able to maintain a robust operating margin for the full year of 16.2 percent. There was obviously some negative operating leverage as revenues reduced and we incurred some restructuring costs. But we really worked hard to manage expenses and preserve profitability. Arauasi, the return of our adjusted trading capital employed held up at 19%. Finally, our cash performance was very strong. We generated free cash flow of 72,500,000 with 113% conversion rate. Our leverage is conservative and so we have ample liquidity. Over the page, some more detail on the full P and L. We delivered an operating profit of $87,000,000 at a robust margin of 16.2%. As you know, revenue was impacted by COVID from Q3 onwards and throughout the second half of the year, worked very hard to mitigate the negative operating leverage, being really tight on costs, and so we continue to convert revenues to profit at good rates. We also incurred some GBP 3,900,000 in restructuring costs, which we have taken in adjusted operating profits. This will help us realign the cost base for the revenue profile we now face with the majority of headcount reductions falling in controls. And supplementing that by taking the right kind of steps to position our businesses for growth. In both controls and international sales, we are rationalizing our locations by clustering existing businesses in the UK as well as in Australia. We expect to see good payback from these restructuring actions in the future. Looking below operating profit, you can see the interest chart has gone up. $5,000,000 is due to the VSC acquisition loan. The remaining increase is due to IFRS 16, a quick word on IFRS 16. This is immaterial in our accounts, so there's no prior year restatement. In 2020, the effects is limited to interest being up £1,400,000 and depreciation down £4,300,000, meaning a £1,000,000 profit impact overall. Our effective tax rate has remained at 24%. And as a result, adjusted EPS is down 12% 56.4p. Over the page. Moving on to the cash flow, where Johnny has already said that we've had a very strong performance. We have a GBP 9,500,000 inflow from working capital compared with an outflow the same size the previous year. This is driven by a significant reduction in debtors by really focusing on cash collection. An element of the inflow is careful inventory management. The positive impact was also boosted by operational improvements in stock management in our U. S. OEM business. But of our elevated stock balances last year following the cut over from a new ERP system in the previous year. And we made great progress in 2020 to take the stock balances down. We also benefited from £6,000,000 worth of property receipts following 2 sale and leaseback transactions in Europe. As a result, we have exceptional cash conversion of 113 percent, and we have also reduced working capital as a percentage of sales down to 16% However, I expect these will revert to historic diploma benchmark levels as we go into 2021. Over the page, let me take you through our funding and capital structure. In connection with the Winde City acquisition, We placed 10% of equity in September in order to retain an appropriate degree of conservatism in our balance sheet as well as give us flexibility. As a result of significant investor appetite, we issued the shares at no discount and raised just short of GBP 190,000,000. Meaning that we had cash funds of over GBP 200,000,000 at the year end. Our organically generated cash balances allowed us to repay the term loan we have taken out for the acquisition of BSP, meaning we have no debt at September. After the Winde City acquisition, our leverage is conservative with set of 180,000,000 Over the page, some words on capital structure and liquidity. A strong balance sheet is fundamental to our strategy. We have now deployed the equity proceeds for the Windy City acquisition and we put in a new financing package for the remainder, which looks like this. We have a $170,000,000 term loan, £135,000,000 fully revolving multicurrency bank facility. This is for 3 years and we can extend for a further 2 years to December 25, as well as increase the amounts available to borrow by 50,000,000. Our starting interest cost is circa 2.3% And our net debt to EBITDA covenant is set at 3 times. We have ample liquidity of over GBP 135,000,000 after the Windy City acquisition. This is important as we have an encouraging pipeline for Baliad bolt on acquisitions, which remain a core element of our strategy. It's also worth pointing out that we will have some 1st year end 1 off cash outflows, $7,000,000 earn up payment to BSP in return for a great post acquisition performance and £5,000,000 towards the defined benefit pension scheme. Over the page, I'm really pleased with the trends we are seeing in our revenue performance. As you can see here, the business is recovering well and across all three sectors, rates are improving. As of September, Life Sciences is almost back to where you'd expect it to be in growth mode, up 2%. Sales is showing a really strong performance and is now down just 4%. And controls, which was most heavily impacted back in Q3, is halfway back to where it was at 18% down. Trading in the 1st 5 weeks of 2021 is in line with these exit rates. And we would expect the first half to be consistent with these rates. Having said that, the implications of a full lockdown are yet to become clear so there is some uncertainty. And over the page? What I'm trying to do here is give you our current view on how we are feeling about the shape ahead for 2021, and that is in order to be helpful in these unusual and on that time. Before the year as a whole, we expect to be in line with current market expectations with underlying growth for the existing business returning to historic diploma levels at mid single digit. Our performance would clearly be second half weighted. With the first half consistent with the exit rates we are seeing and the balance in the second half from underlying improvements as well as the benefit of the Q3 2020 comparative. Windy City will increase group revenue by circa 25% in 2021. In terms of margins, we would expect them to recover to historic levels of 17% to 18% for the year as a whole, as a result of operating leverage, the benefit of our restructuring actions and the accretive impact of Winde City. Again, this will be weighted towards the second half of the year. With the first half showing a modest improvement on the H2 2020 margin. What I have just said is obviously subject to uncertain macro events But given our strong performance against the 2020 backdrop, I wanted to give some help as to what 2021 might look like. And as we stand here today, I feel confident about next year. Thank you, Johnny. Okay. Thank you, Barbara. And I'm on Slide 14. I'll take you through an update on progress with the group strategy and our performance and an outlook for the future. Firstly, a quick reminder of the strategy. We're building on diplomas' strong foundations as a value add distributor. In doing so, we focus our growth on core developed markets and current adjacent product ranges. We're looking to create and build high quality, scalable businesses with organic growth potential. And we will focus on the core competencies and capability that allow us to execute our value add business model at scale. We will continue to use our cash to acquire attractive bolt on businesses that complement the strategy, to fund a progressive dividend to reward our shareholders, and to retain a conservative balance sheet. Next slide. The group is well diversified by sector and geography. This has been a key element of our resilience and growth. After the acquisition of Windley City Wire, our control sector now represents 45% of the group As the US represents 40% of the group, we continue to see opportunities for growth, organic, and through acquisition across all of our sectors. Slide 16 seals. Seals have performed very well through the crisis with reported revenue growth of 10% underpinned by the acquisition of VSP. Underlying revenues declined by only 5% a robust performance. Our Hercules aftermarket business in the US has been very strong. This is a reflection of low transaction values, a diverse range of end customers, and business concentration in the south Eastern States, which remained largely open throughout the pandemic. After a few years of challenging conditions in Hercules OEM, including the impact of the 2018 systems implementation, US China trade tariffs, and more laterally COVID, the new management team has started to see the rewards for their efforts. And encouragingly, the performance has been improving steadily through the quarter 4 and into the new year. BFP had a fantastic start in the group, growing at double digits with 400 basis points of margin improvement in the 9 by until the crisis. Although that naturally slowed somewhat, their contribution has still been significant, and we remain excited about the future of VSP in the group. International Seals performed very well, supported by the diversity of end segments. Business into medical, pharma, renewable and has offset the impact of business into more industrial and petroleum based segments. Margins in the sector declined as expected due to the one off costs in the transition to our new aftermarket facility as well as some restructuring costs to integrate our Australian and UK acquisitions. The contribution from the new facility as well as progress across all of our sales businesses gives us great confidence in the year ahead in the sector. Slide 17. I feel really positive about our new facility for North American aftermarket in Louisville, Kentucky. We have completed most of cut across now from our existing facility in Clearwater, Florida, and this will finalize in December, after which the latter will be closed and sold. The Louisville facility takes us to the highest level of technology in distribution. A huge cube or matrix stores are sealed, and the seals are picked from the store by robots, which are managed by algorithmic technology. This makes the operation more effective and efficient. And importantly, truly scalable as more volume can be managed by simply adding more cubes to the storage matrix. Given its location in the heart of the US near the UPS hub, we now have access across more of industrial America on a later day cutoff next day delivery basis. This makes us more accessible and cost effective to customers on the West Coast, the Midwest, and the Northeast. And so this gives us excellent scope for market share gains in the business in the future. And on now to controls. Controls for the tougher year due to its exposure to the more sluggish UK market and to end segments most affected by COVID 19 such as Civil Aerospace. As a result, revenues declined by 12% on a reported basis and 14% on an underlying basis. We completed restructuring in some of the more effective effective businesses in the sector to ensure that they have the right platform for growth. We also integrated our cabling and wiring businesses to become the Shoal Group, which is now a bigger business with a great team, compatible products and customers and scope to invest in growth across Europe. The costs associated with the restructurings have impacted margins in the year, but will, of course, deliver returns for the sector in the years ahead. We have also focused on diversifying revenue streams to ensure that these businesses can grow out of and beyond end segment exposures. For example, Civil Aerospace now around 18% of sector revenues and around 5% of group revenues has been doing reasonably well in the circumstances as we continue to trade strongly in geographies such as the U S and Asia and as we have taken market share in the more challenging European environment. Controls is also exposed to a diverse range of end segments. As a result of all of this, underlying revenues in the sector have been recovering well, and we expect the sector to continue back into growth during 2021. We are excited to be further diversifying our controls revenues with the acquisition of Windy City Wire in the U. S. Slide 19. We completed the acquisition on 16th October this year. Windy City Wire is a value add distributor of premium, low wire and cable based in Chicago and servicing across all of the US with revenues of around $200,000,000 and margins of around 20%. This is a significant step for the group and that it builds a US position for our controlled sector in a product net range that we know well. It's also exciting because Windy City Wire has built a truly scalable platform through 19 distribution warehouses across the country. Excellent technology, and some supply chain control. This has allowed the business to deliver double digit annual revenue growth over the last 10 years and uninterrupted profit growth over the last 25 years. Looking forward, the exposure to high growth technology enabled end segments will allow Windy City Wire to continue its growth story. And Windy City Wire will be accretive to both our growth and our margins in the future. I am really pleased to welcome Rich Galgano and all of our Windy City Wire colleagues to the group. It's been a very good year for life sciences. Revenues declined by only 4% on a reported basis and an underlying basis. After a sharp fall in the early months of the pandemic as hospitals and labs focus their attention on COVID-nineteen, revenues have recovered relatively quickly. We've seen a return generally to pre COVID levels of surgery and diagnostics in both of our main markets of Australia and Canada. For the moment, encouragingly, healthcare systems in those markets remain open. It will naturally take some time to work through the backlog in elective procedures and laboratory testing. With supply side constraints, including enhanced hygiene procedures affecting productivity, and initially the inevitable cooler demand too. However, should the health care systems in Australia and Canada remain open as they are, We do expect to see Furthermore, in the longer term, we're well positioned in the diagnostics space to take advantage of structural increases in research and demand for testing as a result of the experience of this pandemic. Margins were very strong in the sector improving by 140 basis points in the year, on the back of favorable business mix and a very good cost management throughout the crisis. We feel very positive about the opportunities for growth and the benefits of this backlog for life sciences growth in the year ahead. Next slide. The key strategic imperative for our healthcare businesses is product pipeline management. We have historically built a successful businesses in key growth areas for health care spend, specialty surgery and diagnostics, for example. This allows us a good base rate of growth. However, in order to sustain and outperform that, we must be continually bringing new suppliers and product to market to replace and I'm really pleased that we have developed a broader range of suppliers and products news and providing opportunity for some of these to develop into significant revenue contributors in the future. As well as doing this in healthcare categories that we already operate, we also expand our horizons into new categories, too, as we have done in urology and gynecology in Canada. This is a continuous area of management focus that will sustain strong levels of growth in life sciences in the future. Next slide. As we seek to scale each of our businesses, in order to continue to deliver our customer proposition we must evolve and continuously improve A small distribution business tends to depend on the manual and tactical approach, while a large business requires more on process structure, and strategy. The 5 core competencies have been defined and each of our businesses are developing those aspects most relevant to their moment. As a group, we are focused today on route to market as we naturally look to diversify revenue streams and return to growth from the crisis. We are providing structure and training to accompany this. We're also focused on developing more strategic supply chain management in our larger businesses, at a time when buyer's decisions are based on changing criteria, such as proximity and optionality in the aftermath of the crisis. This is a journey for the long term developed on a business by business basis according to their needs and will therefore be pragmatically implemented. Slide 23. In order to deliver to deliver these competencies at scale, we need to continuously develop our capability to support execution. That means talent, technology, and facility. There have been great examples of our progress and tech on technology we've implemented a number of ERP and e commerce platforms and businesses around the group. The Louisville facility is only one example progress we're making in bringing more automation and machining to our facilities. I'm really pleased with our progress on talent It's been important for us in the last 2 years to focus on embedding the executive team and on replenishing the gaps at business managing director level. We have now done both of those, and I feel that the crisis has allowed us to develop the individuals and build a cohesive and aligned team. So we're well placed to manage our agenda in the future. There's always more to do on talent. We we are focused on building better succession options around the group. We continue to embed general talent management processes into the businesses And while we've made good progress with diversity in our senior team, there's still much more for us to do there too. I feel we're in much better shape than we were 2 years ago. There's always more to do on capability, and it must be done pragmatically. Incrementally as we support the individual businesses development. Slide 24. It's been the right year for us to prioritize our ESG activity. We continue to do many great things within our individual businesses, particularly with regard social responsibility and sustainability. During the crisis, we've done far more as a group 2 are making a difference approach providing our colleagues with fantastic support in terms of physical and financial well-being. It also allowed us to contribute with support activity and fundraising to the local communities that we operate in. As part of the supply chain management core competency, we've been developing the criteria for strategic sourcing and part of that is ensuring that our suppliers have appropriate employment and sustainability practices. This will become a greater part of how we source in the future. We have brought all of our ESG and our broader delivering value responsibly activity under 1 structured plan managed from the group. We're on a journey, and I feel we have the right approach, the right focus areas, and are already seeing the outputs of our efforts. Final slide. In summary, it's been an exceptionally good year for diploma. Our financial performance through the crisis has been strong. We've made significant strategic progress. We continue to build businesses of quality that can grow and scale, and we continue to develop them operationally to deliver their model at scale. We've made some exciting acquisitions that will deliver for us in the coming years and have a positive pipeline for the future. And our management teams are established and performing well. Even though as early in the year, I feel very confident that we can deliver a strong performance in 2021. And now nearly 2 years after joining the group, I am more excited than ever about the group's prospects for the future. We'll now hand over you. Take our first question from Henry Carver from Peel Hunt. Please go ahead. Thanks. Good morning guys. Just one for me on the margins. I just wonder if you could give us a bit of help with the bridge to next year. Obviously, you're talking about sort of operating leverage, restructuring and the at the Winnie City acquisition, but I'm just wondering if you'd give any more color about some which would contribute most. And also anything sort of by division would be really helpful as well. Thanks. Thank you, Henry. So on the margin, obviously, margins held up well in 2020, only down to 16.2%. And as we said, we had restructuring costs in there of 3.9%. Going into next year, we expect that we'll back to will be back to normal historic diploma style margins of between 17% to 18% for the year as a whole. That will be 2nd half weighted. And what we are expecting to see in the first half of twenty twenty one is a modest improvement from the second half margin in 2020. As you know, sales and controls margins would have been a bit more impacted by the COVID impact during 20, and that's where the restructuring activity is directed. And so we'll expect the second half to pick up quite a bit because we'll be benefiting from operating leverage, we'll be benefiting from the restructuring costs, and we'll benefit from the accretive impact of Winde City. That's great. Thanks, Barbara. We will now take our next question from David Brockton from Numis. Please go ahead. Oh, hello. I've got 2 question areas, please. First one just relates to life sciences. That's clearly, traded very well recently, and the margins have been strong there. I I'm just wondering, firstly, if you just touch on sort of current conditions. I know Australia's been, remarkably strong through the pandemic, But, as cases sort of pick up broadly, are you seeing sort of any signs of deferrals of elective surgery again? And also as you look into next year's sort of views on the sustainability of that strong margin, that's the first question area, sorry, one more as well, if I can. Which is just on bolt on acquisitions. I appreciate you always want to buy good quality businesses, and so valuations are are never likely to be low. But just any sort of insight into, vendor conversations, their willingness to engage with the plover right now. Thanks. Yep. Okay. On Life Sciences, look, as I said in the in the presentation, Australia and Canada at the moment are largely open for elective surgery and for laboratory testing. And as you can see from the numbers, life sciences, as a result, is getting back towards what we'd expect from historic, historic growth rates, There's still a little bit of they're still very early, right? So the the hospital systems, particularly, are still getting used to performing the surgical procedures in new hygienic environments. And that does affect productivity. On top of that, you know, perhaps for the kind of lower category elective surgeries, people are still somewhat reluctant, I would say, particularly in Canada to come back through the hospital door. But having said all of that, I think with the health care systems remaining open as they are, we're getting back towards almost normal levels And we should start to see the backlog working through in Australia and and Canada. I've always not an expert on the pandemic, and I wouldn't make any comments on that. But given the situation that both of those health care systems are in at the moment, I'm very positive that we'll start to see a benefit from that backlog over the coming months. And that should, that should accelerate Life Sciences' growth in the New Year. Just on bolt ons, we've got a very good pipeline at the moment. I feel good about it. You know, I should I should just stress. It's in the kind of historic traditional diploma, size, you know, between 5 and a £100,000,000, let's say, of of of deal size roughly. And, across all three sectors as well, which is which is healthy and good in what we like. Are we seeing any difference in vendor conversations? I don't really think so. And I've said this a few times, you know, people ask if we expect see a fall in multiples or multiples adjusting or anything. For the kind of quality businesses that we are buying, that isn't really, the conversation that we have because people selling good businesses, shoots and will expect it to command food multiples. So I don't see the current scenario material the, affecting multiples in any way. Having said that, you know, given the scenario that we're in at the moment, as we come through the crisis, there are a few more, I feel, sellers and the industrial type businesses who, who feel now now is a good time, and that's just helping our our pipeline. Thank you. We will now take our next question from Sam Glenn from JP Morgan. Please go ahead. Good morning. I have 2 related questions, please. The first one was you mentioned these, this sort of clustering activity of different subsidiaries in various regions. Just wondering if there's been any sort of resistance or pushback on that, I guess, these businesses have historically had quite a high level of autonomy. And the second question is you mentioned this sort of replenished MD pool. I mean, can you give a little bit more color on this? Is this sort of founders of some of the subsidiary businesses moving on and new people coming in to replace them? And are those new people from outside the group or sort of coming up through the subsidiaries? Thank you. Yes. Okay, thanks. First one on clustering, we we, are, you know, it's very, very important that we retain the decentralized model very, very important that our management directors and our business leaders and teams are responsible, accountable with businesses because we are a local market customer orientated, group. And so that does not change. However, what I've said in the past is as we look to try to build scalable businesses, there are opportunities for us rather than operating in isolation, for us to take some light, back office decisions to cluster some of our businesses there geographically and business located close together. And we started to do that somewhat. So we bought business and seals in the UK. We bought a business in Seals in Australia, and we're able to put some of the back office some of the facility together. What that allows allows us to build scale and the objective is not necessarily cost savings, the objective is that by building scale, we unlock investment, investment that we can then make in growth, investments that we can then make in our customer proposition. So it's light touch. It's all about growth as we maintain decentralized local management autonomy. On your second point on the NZ pool, I think let me have mentioned this a year or 18 months ago when I when I arrived. There was probably a period of a bit of an interregnum maybe before I arrived. Where perhaps talent hadn't been, you know, hadn't been, foremost in, in people's minds. And there was a number of different managing director, business leader, positions that needed to be replenished. Some of that has been done from the outside. Some of that has been done from the inside. And, we're very, very pleased about the fact that we've got a really strong, senior management cohorts across the group. We've been able to, in the circumstances that we're all in, we've been able to really unite that senior leadership group. And all of us, of course, have developed individually and collectively throughout the group as a result of that. So as a result, I feel very, very positive about position that we're in as a management team. We will now take our next question from James Burrow from Barclays. Please go ahead. Good morning. Just one question on the sales business. Where obviously you've made a lot of investment in the last couple of years. Now presumably it's not a sort of build it and they will come type investments. So I just wonder now on, you know, is it on marketing spend to deliver the additional customers? Is it expanding the product range, to widen the customer base so in short, I suppose you you've got a scalable platform, but what is it that you now need to do to actually scale that platform? Yeah. Thanks, Jane. I think we did quite a lot of work on this. And, you know, I talk a lot about Louisville and the new facility as being, I guess, the kind of linchpin of it, but there's a lot of activity that we've been doing around about that, to make sure that we can accelerate our aftermarket growth and really build on the scale opportunity that we have there. So outside of the facility itself, we've been expanding the product range. And we bring in some new categories which go into repair shops alongside seals, which has been exciting for us. We also have added some further sales resource, particularly into those regions of the US that now become economically accessible to us that I mentioned in the presentation. And finally, we've been building on our e commerce capability So we launched a new version of our web store for the aftermarket in August, which has been a massive success and as part of building a scalable platform for the aftermarket. So I feel really, really excited about it. I should also say though that it's not all about the to market. We've done very well in our industrial OEM business. We've done very well in international seals. And as I've said before, VSP has been brilliant for us too. All of those businesses, including aftermarket, make me feel really excited about seals in the future. We will now take our next question from Daniel Cowen from HSBC. PC, I've got a couple of questions. What's on the, the restructuring charge? I wonder if you'd give us a split on that, the 3,900,000 between controls and and sales, please. And, is it possible also to to to quantify the the impact of the opening for for Kentucky? Within sales, in, in 2020. And the the second question is is on, on aftermarket sales. Currently, how much of your of of revenues there, I appreciate that you you you don't use to get this set up just interested in the opportunity for growth in coming years with with the Kentucky facility. How much of revenues is is currently southwest, sorry, Southeast and and Southeast and States, or Southern States and and and, versus, I guess, the the other parts of the country. I'd be interested to know that, please. Yeah. Let me answer on the aftermarket and then I'll let Barbara pick up on the on the restructure in charge. So about about, let's say, about 65% to 70% of the aftermarket business is in the south Eastern States. A lot of the floors are about some of the states around about there too. And so, you know, we really think the Midwest, the West Coast and the Northeast some of those industrial belts around there represent massive, massive opportunities for us. The growth in aftermarket has been very strong in the in the buildup over the last 2 or 3 years before the crisis, but even very robust through as well. So I'm expecting the growth in that business to accelerate, and it will be, of course, accretive to to the group, over the next 2 or 3 years. And it's very exciting. Barbara? On the restructuring charge, the total is 3,900,000 twothree, 2,300,000 is within the both division and one side of our home relationships in the in the sales sector. And in terms of the, investments in the, aftermarket facility, that's a couple of 1,000,000 for the full year, was GBP 500,000 in the first half of the year. It appears there are no further questions at this time. Mr. Thompson, I'd like to turn the conference back to you for any additional or closing remarks. Well, thank you very much, everyone, for joining. I just want to say a few words, which are we've had an exceptional year. The results have been strong. We're very pleased with the progress we've made with strategic execution. And I feel very, very confident about our future. Looking forward to a very strong financial performance again in the new year. I generally feel optimistic about our prospects for the future. Thank you very much for joining us, and we'll speak to you soon. This concludes today's call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.