H1 19/20

Sep 18, 2019

Thanks very much. Good morning, everyone. Thanks very much for joining us today for the Kingfisher's Half Year Results. For those of you who don't know me, I'm my name is Andy Kosford. I'm the chairman of Kingfisher Group and joined today by John Wharton. Who joined the company as our interim CFO back in April. And in addition to his CFO responsibilities, The board also asked John to take over the running of our transformation office, including a very specific and detailed focus on Castorama France as part of that. John's got deep operational experience of change management and his insights, some of which you'll hear in some detail today have been very valuable. To both the board and to Kingfisher to Kingfisher team generally since he joined. We're also joined this morning by our incoming chief executive Mrier Thierry Garnier, and you'll be hearing a few words from Thierry shortly. Thierry, welcome. We will follow the usual format this morning. I'll start with an overall summary of up performance before handing over to John, who'll run through the financials in more detail. And then, of course, we'll return with a look at the priorities and then take your questions. So let me start with Slide 4 and the overall picture for the year for the half year. Well, the transformation of the Kingfisher business continued, during the half. Further progress was made in Unifying our products. We launched a number of innovative new ranges and we introduced further capabilities to our unified IT platform. The financial performance in the half, however, was mixed. Screwfix, Poland and Romania all delivered like for like sales growth in the period. At B and Q, LFL sales were 3.2% lower, which included a 2% impact related to the discontinuation of our installation services last year. And of course, the business continues to be exposed to the UK's weak consumer backdrop. John will cover the performance drivers in more detail shortly. I should have said that we also have Graham Bell here, who's the CEO of BNQ. So any particularly nasty questions will be going straight. Welcome, Greg. So the sales performance of Castorama France was impacted in rough a equal measure by the price repositioning that began in the latter half of last year and by issues related to our change program, that are impacting supply chain and logistics operations. The performance of Castorama France has been a major source of disappointment and concern to both our shareholders and our board and rightly so. Now later on, John will go through in detail the actions that we have underway to get on top of these issues. At the Brico Depot format in France, gross margin rates and gross profit pounds were both higher year on year. On lower sales, and that reflects the proactive decision we took to reduce the level of low margin promotional activity there. On the digital front, the investments that we've been making are starting to gain some traction, with good sales growth across the group from that channel. In the half, the group's overall gross margin rate grew by 60 basis points after clearance. The improvement largely coming as a result of our unified sourcing. Both the sales and gross margin rates of our unified products were up increasing by 0.4% and 150 basis points, respectively. We would also note Our balance sheet remains strong. And in his section, John will take you through the detail of how IFRS 16 has impacted us. Overall then, a mixed picture for the half with some positive developments, but also clearly some key areas that we need to address. Now Thierry joins us next Wednesday and will take over the reins from Veronique. Who steps down next week too? Well, not 2 steps down next week. Now given the closeness of this meeting to Vero's departure and the forward looking nature of this presentation, in many respects, we felt it was more appropriate for me to take comments in and make comments in this area rather than Vero and hence our absence today. But let that not detract from the tremendous contribution that Vero has made to this business over many years. Over the last few months, Vero has remained fully committed to Kingfisher and has worked really hard to ensure that the transition with Terry was an orderly one. She leaves with our best wishes for the future. Now turning briefly to Slide 5 and the key highlights before I pass on. 59% of group sales in the half were unified. That's up from 42% in half 1 last year. While it inevitably takes time for new private label brands to establish themselves, sales of these ranges are growing. And the benefits of unified sourcing are delivering a higher gross margin. And as we showcased at our Innovation Day in May, We've also started to increase the focus on the amount of product that is unique to Kingfisher with the number of key new ranges launched during the period. As I said, digital performance in the half was encouraging with digital now representing 7% of the overall sales volume for the group. Sales value. And that's up from 6% last year and looking back 3% in 2016. Group digital sales were up 18% overall with Click and Collect growing by 24%. Each of our operating companies delivered growth in this area, with all achieving higher website conversion and penetration rates. We are encouraged scores show an increase for each of our markets, which is also reassuring. Now of course, the success of all the activity we're doing In the end, we'll be measured by revenues and profits. But these leading indicators are important signpost for us because they tell us that we're moving in the right direction. And last but by no means least, our colleague engagement scores remain very strong. These continue to sit above retail averages, which is very encouraging given all the change and disruption that's taking place across the business and which, as you might imagine, can cause a negative impact on team and individual morale occasions. So let me now introduce Tiri. Thiri is a highly experienced international retailer who has spent over 20 years leading large scale operations and successful change management journeys for Carrefour in France, South America, and Asia. Most recently, he's been based in China, where the pace of change in retail is quite extraordinary, driven by the digital savvy cuss customer. I'm absolutely delighted that Thierry's joining the company, and I know he will make a big difference for us. Thierry, perhaps I could ask you to come and say a quick few words. Well, thank you, Andy. Good morning, everyone. It's a real really great pleasure for me to be here and to meet you all. As you know, I will formally start in the business in a week from now in a few days, but I think it's a great opportunity for me to introduce myself. So I don't want to let it pass. 1st, to tell you how excited I am to be joining Kingfisher and all the colleagues at Kingfisher in a few days time. I am a retailer. I have a deep passion for retail. I like spending time in stores with customers, with colleagues. I like building teams, and mobilizing organization around addressing the changing needs of the customers. That's very important for me. A big part of it as well is around digital. As you know, I spent several years in China, so digital is very important for me. I would say the passion as well. And I think we have a lot of opportunities ahead of us. Maybe let me tell you a few things about my experience. As Andy just mentioned, I spent the most recent years in Asia. I was based in Shanghai, leading Carrefour Asia operation, as many of you knows, you follow retail. China is now a real retail laboratory for the world. And we led we led Carrefour, we led in Asia and in China big transformation plan. First, this is about new format, new convenience store format, new big box format. We as well establish a very large new supply chain, many different cities in China to improve fulfillment and availability This was around digital. So we built a very big food online operation in China. We did many partnership with a Chinese digital ecosystem like Alibaba, Afghanistan, etcetera. You know those companies. And at last, at the same time, we had to take tough decision on costs. It's stock closures, downsizing of stores, reduction of cost overall. And all this plan drove much better, I would say, much better results of the Asian zone for Carrefour in the past 2 to 3 years. Maybe last example I would like to give you is relaunch in 2015. Car food online operation. And by this summer, it represents the largest car food online operation by the number of order per day or by the party patient. Previously had worked extensively as well in France, in many different formats. And I led the transformation, you know, you had the champion banner. So I led the transformation from champion to car for market. Years ago. That was successful transformation for over 1000 Supermarket. Maybe last thing to say is in China, as in France, I've been working in Matrix organization where getting the balance right between center and the operating companies, Central And Markets is obviously a key success factor. I think clearly today, I'm in a position to listen, not in a position to take questions. It's too early for me. But just to let you know, in the past couple of weeks, I've had the opportunity to listen to many of the largest shareholder of Kingfisher. And I wish to continue to have this conversation. I'm sitting down in London. I will leave in London. So now it would be much easier for me to meet with all of you. I'm looking forward to meeting you properly face to face in the coming few months. So Thank you all and now I hand you over back to Andy. Thank you. Let's see. So well, let's see. He said he's, he's not starting for a few days. So, probably a bit early to for him to be answering questions today. But, I know he wants to engage over the next few months as many as needed as possible. Now despite not being in a chair, Thierry has already been very engaged with me, over the last few months. On the important task of filling gaps and adding new talent to our leadership team. We've had a lot of change at the top of this organization, over the past few years, and we now need to fill out this the executive team, settle it down and move forward together under Tierra's leadership. We do need to attract more talent to this business. And while, of course, we will always have deep sector knowledge, in the team. The balance of the team would benefit from more class leading functional skills, some more experience of change management, and from best practice from the wider world of retail. We've been working hard on this throughout the summer, and we expect to have a steady flow of news on senior appointments over the next few months. Now with that, let me just hand over to John, who's going to come up now and take you through the financial performance in More detail. John? Thanks, Andy, and good morning, everyone. In terms of structure, I'm going to start by giving you an overview the group's performance in the half before taking you through the detail and the drivers. And as Andy mentioned, part of my role involves steering the group's transformation office. And so I'm going to give you some insights and actions on this and Castorama France specifically. I'll then update you on the outlook for the full year. Before I start, just to remind you that from 1st February this year, we have adopted IFRS 16, the new account accounting standard for leases. All the numbers presented are therefore under the new standard, and the restated comparative are in line with what we published to the market in our IFRS update last month. Turning to Slide 7 and an overview of the income statement. Total group sales were $6,000,000,000 and down 0.9% and like for like down 1.8%. Based on a constant currency basis. Gross margin for the group was up 60 basis points at both reported and constant rate. This was a solid margin performance with the sourcing and price repositioning benefits partly offset by logistics and stock inefficiencies. Largely in Castorama France as well as incremental clearance. As a result of the margin improvement, Gross profit was slightly ahead of half 1 last year, with operating costs up just over 2% on last year. Retail profit was down 4.4% on a constant currency basis to £466,000,000. Adjusted profit before tax which is after central costs, interest and transformation costs was up 3.7% in the period to $337,000,000. Reflecting the expected reduction in transformation costs year on year. And I'm pleased to say in the next financial year, will simplify our reporting by removing the underlying profit measure, given that the vast majority of the transformation P and L costs will have been incurred by the end of the current year. Our adjusted effective tax rate was down slightly at 26%. Adjusted basic earnings per share were up 7.3%, reflecting the lower tax rate and the impact of last year's buyback. Statutory EPS, which is after exceptional items, was down 15.6%. Finally, the board has maintained the interim dividend of 3.33p. So now let me take you through the exceptional charges of $93,000,000 for the first half of the year. These largely relates to the ways we are dealing with the underperforming parts of our business. The first component, a charge of $68,000,000, relates to the redundancy provisions associated with the 11 planned store closures in France. Over the next 18 months. And the previously announced door closes in Germany, which completed during the period, Sales of Freehold stores subject to closure expected to cover these cash costs of exit. The Russia and Iberia charge of £26,000,000 largely reflects store impairments in Russia. Given the challenging conditions in that market, we announced last year that we're focusing on markets where we are leading or can become the market leader and therefore made the decision to exit Russia and Iberia, both processes are ongoing. Moving on to Slide 9. Let me now cover the performance of our major geographies, which as you can see from this overview, is mixed with weaker sales performance in the UK and France, offset by higher gross margins. There was a modest decline in profit in UK of 1.7% a 12.2% decline in France. Harlem was broadly flat, and the losses from the other remaining geographies were flat year on year. On to page 10 and performance in the UK and Ireland. Against the backdrop of a weaker consumer and a softer housing market, B and Q delivered a negative 3.2% pallet valve for the half. Which, as Andy mentioned, earlier includes negative 2% from the discontinuation of installation services at the end of Q3 last year. There were several other factors that impacted the top line as follows. The ongoing implementation of new ranges, including surface and decor and kitchens, caused disruption, while weather related categories were down nearly 3% against a strong comparative, driven by very hot weather in Q2 last year. And as a reminder, our Q2 finished at the end of July. Digital sales, however, continue to grow. Up 10% now representing 5% of total B and Q sales. And we also saw a modest benefit from home based store closures. Screwfix continues to gain market share to its convenience model and strengthening digital. Life sales grew by more than 5% while digital sales grew by 18%, now representing 32% of Screwfix sales. We also opened another 16 stores in Half 1, taking the total number of stores to 643. We look forward to the business opening first during the Republic of Ireland later this year. And our store opening targets for the full year remains unchanged. Gross margin for the UK and Ireland increased by 60 basis points, benefiting from unified sourcing and B and Q's discontinuation of installation services. The margin in the second half of the year will be impacted by incremental clearance from B and Q's old kitchen range and ongoing investments in price in Screwfix. Overall, constant currency retail profit in UK was lower by 1.7%. Continuing on to Slide 11, LSL sales in France were down 4.4% This compares unfavorably with Bunker France data for the French DIY market for the same period, which was up nearly 2%. Looking at each business in turn, Brico Depot's 4.6% like for like decline was driven by the proactive reduction in lower margin promotional activity, which had a negative 5% impact on Brico's like for like. As a result of these actions, Gross profit pounds increased year on year. At Castorama, we saw a decline of 4.3%, largely reflecting price repositioning and transformation related activity, which I'll talk more about on the next slide. Total France gross margin increased 60 basis points, with an increase at Brico Depot partly offset by logistics and stock inefficiencies at castorama. Overall, the increase in France gross margin rate was not enough to offset the like for like decline. And retail profit in France ended up lower by 12.2% at constant rates. Turning to Slide 12 and an update on Castorama. 1st, I'll recap on where we are today, give some insight on some of the operational issues we are working through and then highlight the area of focus. During the period, we launched a number of new major ranges, including outdoor, surface and decor, bathroom storage, and tools and hardware. And around 60% of the offer is now new unified product. Surface and decor is an important category for Castorama, and there was disruption as the new Rangers landed. Adversely impacting like for like sales. On a more positive note, the leading customer indicators are moving in the right direction. For example, price perception is on an improving trend and customer Net Promoter Scores have improved by 5 points over the year. The price indexes also come down, and now only slightly above our closest competitor. Digital sales, click and collect and website conversion rates also up at Castorama, albeit off a small base. The key for the business will be improve the effectiveness of enabling technologies. And operational processes, and that's pinned by a unified IT platform, along with a split of responsibilities across local markets and our group offer and sourcing organization. Applying this model to pastorama France, which comes from a legacy of a decentralized model, has been highly challenging. The implementation of the change program at Castorama France has therefore caused issues and continues to cause issues. In our stock planning, stock management and logistics processes, which in turn is leading to lower than expected stock availability and fulfillment rates. These issues have arisen due to ongoing challenges with vendor management, product data and changes to store operations. Which are all being aligned to the new IT platform, operational processes and unified ranges within the business. Let me illustrate this with a simple example. Castorama is currently working with over 1000 vendors, who are each required to comply with the fine processes around ordering, receiving and invoicing. If a vendor fails to comply with the ordering process, This can mean stock is received, but booked into the stock system manually requiring significant time and effort through workarounds to be completed. This in turn can lead to temporary inaccurate stock records, additional costs and delays. To amplify this, we're incurring additional costs due to running legacy systems in parallel, during the transitional phase. These operating issues are typically manifesting themselves in which ultimately has an impact Therefore, correcting the underlying operational issues is a key area of focus for us. Outside the implementation of new differentiated ranges, we will continue our work to improve the effectiveness of Castorama's IT platform. Along with the efficiency of its operational processes and fulfillment function. Part of getting this right is to review and adjust where necessary. The balance of responsibilities between group and Castorama. We believe we have identified the pain points have a series of ongoing detailed work streams to both eliminate the underlying issues and take corrective action to drive through the benefits of the change program. Over time, this should improve the overall performance of our supply chain and logistics operations, which is essential for Castorama to be in a position to grow again. We'll also launch the next stage of our e commerce growth platform in the second half to support continued digital growth. Turning to costs and store performance. Cost benefits are being delivered from the 5% FTE reduction that took place in the second half of last year. Following the transition to our financial shared services center in Poland. And following consultation processes, we'll be closing 9 underperforming Castorama stores over the next 18 months. In summary, The performance of Castorama continues to disappoint. However, the business has taken important steps to improve its customer proposition, its offer, its price competitiveness, and its e commerce capabilities. The primary courses of the operational issues have been to fight, and we're taking the necessary actions to address them. This will take time, but we have a focused workplace work plan in place to deliver tangible and sustainable improvements in these areas. Turning to Poland and Romania. Poland delivered good LFL sales growth of 3.3%, benefiting from weather related categories, particularly in Q1. We estimate that Sunday trading restrictions, which removed 1 further day of trading per month, impacted like for like sales growth by one percentage point in Half 1. Poland's gross margin was down 20 basis points, largely due to higher clearance and higher outdoor sales, which are lower margin. Cost increases related to wage inflation, higher digital costs and preopening costs as we opened 2 new stores during the half also impacted margin. As a result, retail profit was broadly flat. In Romania, like for like sales increased by 10.5%. Contributing to this was the good performance from the unified ranges. Practica stores have now been rebranded as Brico Depos with the final store to complete the second half of this year. In addition, the quality of ranges has both improved and is expanding in terms of SKUs. This is how, however, a period of transition for Romania and the overall business made a retail loss of 8,000,000 driven by losses in the form of practicable Stores. Towards the end of H2, we will start the back office integration process for the businesses. Should be noted, we are currently running both businesses separately. Let's now turn to Slide 14 and the remaining geographies. Combined like flight sales in Iberia, Russia and Screwfix Germany, declined by 4.9% with a reported retail loss of GBP 5,000,000, including equity accounting profits from our JV in Turkey. Our exit processes for Russia and Iberia are progressing. We are currently reviewing a number of options for both businesses, or an update you as soon as we can. Spain continues to generate a small profit, whilst the trading environment in Russia remains challenging. Resulting in impairment in the impairment that I mentioned earlier. In Germany, for Screwfix, we have now closed all 19 stores and that we no further Germany related losses in the second half. Moving on to Slide 15. We can see that unified and unique ranges continue to outperform our non unified ranges in both sales and gross margin. 59% of sales were from unified and unique ranges, which grew by 0.4% against a 0.9% decline in the non unified ranges. We achieved we achieved growth in 4 of our 7 categories. Of the 2 negative categories, One experienced significant rain changes during the period, and the other faced tough weather related comparatives. Before logistics and stock inefficiencies, all categories delivered growth profit growth. Demonstrating the ongoing benefits of unified sourcing. On Slide 16, we set out the bridge of the gross group gross margin movement of 60 basis points for half 1. We can see that 150 basis points point gross margin improvement in unified product has driven an 80 basis point benefit across the group. Whilst the margin on non unified offer was flat year on year. Other positive margin drivers for the group included price repositioning, mainly driven by Brico Depot, which led to a 30 basis points improvement and the discontinuation of installations at B and Q which had a 20 basis point positive impact. Partly offsetting factors included incremental clearance, ahead of the new ranges launching half 1, which had a 40 basis points impact during the period. And as highlighted earlier, logistics and stocking efficiencies mainly in Castorama France had a 30 basis point impact on margin. Slide 17. This provides an overview of our cash flows and a summary of our net debt position under IFRS 16. Firstly, on cash flow, we generated $695,000,000 of EBITDA in Half 1 and paid $236,000,000 of net rent. Moving through the bridge, there was a GBP 45,000,000 outflow working capital and this reflected an increase of stock of GBP 111,000,000 which was driven by store expansion, changes in operating model and higher stock levels, primarily in France. This was partly offset by a net increase in creditors of £66,000,000. Bear in mind, we're looking here at the movement in working capital over the 6 month period so seasonality plays a part. However, as mentioned earlier, improving stock management and planning processes is a key area of focus for Castorama France. After capital expenditure of 163,000,000 and tax and interest payments, Free cash flow in the period was GBP 204,000,000. Income from property disposals is largely driven by a small number of sale and leaseback transaction in B and Q. After dividends, the movement in cash was positive $131,000,000, helping to improve our cash balance, to $385,000,000 at the end of the half. Under IFRS 16, which I'll cover in a moment, You'll be aware our lease liabilities of $2,600,000,000 are now included on our balance sheet. Our lease liability to a largely unchanged since year end but the improved cash position helped reduce our net debt by $158,000,000 during the period. As a result, our restated net debt to dollar ratio fell from two times to 1.8 times, which remains consistent with our objective of maintaining our solid investment grade credit rating. Turning now to Slide 18 and our full full year 1920 outlook and technical guidance. Full technical guidance is outlined on this slide, so I'll just pick out a few items. As we enter the second half, the outlook for our main markets remains mixed. UK marketing particularly remains uncertain in the short term in B And Q. The discontinuation of installations will annualized at the end of Q3. In France, we expect Castorama to underperform. And the reduction in promotional activity analyzes in Rigo Depot at the end of Q3. Excluding Russia and Iberia, we continue to expect gross margin after clearance to be flat year on year. Some of the positive margin drivers in half 1, such as price repositioning at Brico Depot and discontinuation of installations at B and Q will not fully repeat in half 2. In addition, we have also slightly upped our incremental clearance guidance for the full year to $30,000,000 to $35,000,000, from 25 to 30, which includes clearance for B and Q Kitchens in Half 2. Screwfix will also ramp up its investments in price in the second half. We now expect central costs to increase to around $55,000,000. It's a $5,000,000 higher than previously guided. Largely reflecting additional activity at the center as we strengthen our resources and leadership team. For this year, P and L transformation P and L costs are now expected to be around $50,000,000 to $60,000,000. Our guidance on CapEx remains unchanged. We expect total CapEx to be up to $375,000,000, which includes investments to support the unified range implementations, new store openings in Poland as well as investment in fulfillment capabilities. And finally, in respect of store closures, we continue to expect any future cash cost of exit to be covered by sale proceeds from the owned stores Slide 19. On this slide, we summarize the impact of implementing IFRS 16, the new accounting standard for leases. We adopted a full retrospective transition approach from the 1st February, 2019. The first thing to say is that the new standard has no impact on cash flows or the underlying economics of the business. The table on the slide shows the respective impacts on retail profit and the balance sheet for last year's full and half year. In FY 'eighteen'nineteen, retail profit increased by 170,000,000 dollars, $71,000,000 as the pre IFRS 16 rental charge is replaced by a lower depreciation charge. By geography, the main impact is in the UK due to the hyper portion of leased stores. However, after IFRS 16 impacts on interest costs of $169,000,000, the net benefit to underlying profit before tax is negligible. In terms of the balance sheet, net assets at 31st January 2019 have reduced as expected This reflects the new right of use asset of $2,000,000,000 and the new lease liability of $2,600,000,000. Which is lower compared to the liability, which is arises under IAS17 from our previous assumption of 8 times property operating lease rentals. As a result, the net debt to EBITDA multiple at the end of last year is restated to 2 times under IFRS 16 versus 2.6 times under IAS 17. Moving to Slide 20. Where we've set out the steps taken to manage Brexit and foreign exchange risks. We do not anticipate any significant change stock levels in the 31st October, no deal Brexit scenario and have sufficient stock in place to cover near term demand. We'll continue to monitor this position take action if needed. With regards to tariffs and customs, if the government's current proposal for no deal tariffs are confirmed, would have neutral impact as most of our products would carry a 0% tariff. We've also updated our importation process to prepare for a hard border between the UK and the EU, including access to simplified customs procedures and alternative cross channel and deep sea ports of entry. We also remain engaged with our key vendors in this area. On talent? As you would expect, we are keeping a close eye on retention and hiring, haven't seen a noticeable impact to date. We've also been helping some existing employees to gain settled status. Now looking at foreign exchange exposure of our total annual COGS balance of GBP 7,000,000,000, around 20% is purchased in U. S. Dollars. Of which half relates to the UK. We have in place an 18 month rolling hedging program to hedge all committed orders. Against changes in FX rates for the U. S. Dollar and the euro, along with a significant percentage of our forecast net exposure above and beyond what is committed. There is also some protection from cost price inflation from our existing stock levels and some of our existing supply agreements. Finally, to summarize, the first half sales performance was mixed, but frankly disappointing. The positive performance of Screwfix and in Poland were offset by France and B and Q. For Castorama France, the primary courses of the operational issues have been identified, and we have a work, a focused work plan in place to deliver tangible and sustainable benefits over time. Encouragingly, group margin was ahead by 60 basis points benefiting from unified sourcing and price repositioning. The business remains cash generative and we retain the strong balance sheet. These results were delivered against a challenging backdrop and the outlook for our main markets remains mixed. This is particularly the case in the UK, where Brexit uncertainty remains high. Finally, we have reiterated our guidance of a flat gross margin percentage after clearance for the full year. And with that, I'll now hand back to Andy. Thank you. So just moving, onto the final section, I think it's generally acknowledged by most people that what it takes to win in mainstream retailing these days is is quite different to where it was a few years ago perhaps. And while the core disciplines of retailing remain as necessary as ever, they are no longer sufficient. Mainstream retailers today certainly need to be recognizably competitive on price, offer great value. They need to deliver ultimate convenience through a seamless of their physical stores and digital platforms, and they need to present a range of products and services, which differentiate them from their competition. Our Kingfisher in its old form ticked few of these boxes. So both to survive and prosper, into the future, the group really had to make some fundamental changes as to how he went to market and to its internal ways of working. It needed to become much more efficient to generate the sorts of funds it needed to reinvest in the customer proposition. In better prices, in digital capability and in the quality of his products. Kingfisher's strategic approach is pretty simple. You can see it in this slide at the top of the, top of the house, on this slide. So using our scale more intelligently for the benefits of our customers, seems a fairly obvious thing to want to do. Scale is one of Kingfisher's greatest assets, and it would do it does seem odd not to want to deploy that as a competitive advantage. To make it pay, on our scale pay, we need to get 2 discrete blocks of activity, right. First, we need to have the right customer proposition. The right balance of local, international, and private label brands, prices, leading edge digital experience, active management and developments of our stores, brilliant customer service, for Screwfix, in particular, a well resourced expansion plan to maximize its tremendous growth potential. And at the heart of all this sit our teams, It's absolutely vital that they are working in sync with real clarity of understanding about what's best done in the center, and what's best done staying local. This is a critical part of making our revised operating model work, and it's an area that we're keeping under close review. Certainly an area of tear is going to be spending a lot of time. Now, underpinning that superstructure, we have what we call our enablers These are the services and infrastructure platforms that connect our business and that once fully installed will allow it function much more efficiently. These enablers include our sourcing capability, IT, supply chain, and shared services. Now most of these enablers have either been completely rebuilt or built from scratch over the last three and a half years. We've centralized what was a completely disparate sourcing model in which each operating company was fully responsible for its own ranging. We've implemented a common IT platform capable of delivering significant operational efficiencies and clear customer benefits. We've launched a scalable e commerce capability across the business, and we've leveraged our scale to establish group wide GNFR and shared service capabilities These are fundamental changes to our DNA and to our ways of working that will allow our scale advantage to be fully realized Now much of this work has worked, and it's worked well. As I mentioned earlier, sales and margin from our unified offer continue to grow. We're seeing quality output now really coming through in the area of product design, and digital sales, as you've seen, are on the rise. But it's equally clear that some of our enabling technology and operational processes are not working as well as they need to. As you've heard, the performance of Castorama France being the key area where the enablers are not yet working well enough, and it's been highly disappointing. We know the benefits of what we've built are there, but we do not yet see them flowing through to the customer or into our financial results. The fact is I believe that we underestimated the operational and financial disruption that IT supply chain and product range transformation at this scale would cause And as a result, we're incurring too much duplication in remediation costs and our trading performance is being hampered. Now while these enablers are largely now in place, we need to make them work more effectively, and we are 100% clear that execution in this regard is our first priority. On Slide 24, this has been a busy year as we said it would be for new range launches. And the first half of the year was particularly busy. And many of these new products, as we've said, are unique to Kingfisher, which is a trend which we shared with you at our Innovation Day in May. Extensions to our highly successful bathrooms range landed in Half 1 as did new outdoor ranges and a revamped tools and hardware offer. Unified ranges for services and decor, which is the group's largest category by sales, are now being rolled out. And the much anticipated new kitchens ranges will arrive in B and Q during the second half of this year with introductions into France planned for next year. As we've heard, activity does cause disruption in store and sometimes in our system. But we are nearly through the heavy lifting and the changes are key to turning up the dial with our customers over time. So it's Slide 25 and our priorities for this year. It's essential then, and I hope we've made this clear that we are going to tune up the key enablers of our transformation program. IT Digital Supply Chain. These underpin the long term growth of our business. It's also essential a real priority that we get on top of the underperforming elements of our business, particularly at Castorama France, and the two issues clearly are linked. And in addition, we need to see through other pieces of work, which remain outstanding. Following relevant consultations, we are committed to closing 15 stores across the business, including Lebanon in France over the next 18 months, and most of these will take place in the full year up to the end of 2021. Until the end of our year 21. And we are reviewing, as you've heard, a number of options with regards to our planned exits from Russia and Iberia. And just a word on Screwfix, as planned, we're looking to expand this business faster by taking action in our core UK market, including continued investments in price. At the same time, we're going to be pushing ahead faster with our international rollout plans. We're on track with our UK store openings program. We're on track for our 1st store opening in the Republic of Ireland, and we're continuing to validate urgently the potential of this brand in the French and Polish markets. Now the success of all the above will also ultimately be measured by a return to group sales growth, which we are confident about in the medium to long term. We believe our margins and our cash generation can grow as the inefficiencies related to stock management and logistics clearance and dual running costs are driven out of the system and the benefits of scale are finally allowed to flow down to the bottom And to summarize then and close on Slide 26. Kingfisher remains financially strong and is well placed with leading positions first or second in the markets in which it operates, all of which have long term growth potential. The transformation that started nearly 4 years ago now has continued across the group in the first half of this year. Most of the building blocks to support future growth are now in place, and the focus very much now is on improving the effectiveness of our enabling technology and processes. In terms of guidance, the outlook for our main markets remains mixed with the UK in particular facing continued uncertainty that is affecting the consumer and the housing market. Kingfisher continues to expect a flat gross margin percentage for the full year after clearance. And to close, we're very much looking forward to Thierry joining us as new CEO next week and to him, bringing a completely fresh perspective to everything we do. His experience will be invaluable in taking advantages of the considerable opportunities we know this business still has in front of it He has engaged in the plan to bring new talent into our executive team urgently, and I'm very confident he's going to hit the ground running. So thank you very much for, listening in your attentiveness. Joan and I would be very happy now to, take any questions you might have. And please do apologize for not knowing all your names at this point, but if you could raise your hand, I'll take you in order and we will, please, if you could say your name, that would be great as well. I think the gentleman in the blue shirt was first, and then we're going to the gentleman in front. It's James Grzinic from Jefferies. I appreciate the added transparency on Castorama France and and and the spirits of that. I'm wondering whether you can give us more details in terms of when were you able to exactly articulate what was going on? At what point did you start putting remedial action to I think, I think we we started to become aware that the early signs started about this time last year in terms of, starting to believe that there were tensions in the team, which is usually the leading indicated that there are deep problems. I think the actual supply chain issues didn't really manifest themselves until the spring. And since the spring in John's arrival, we've been able to increase the line of sight that we've had on those issues rapidly. And in that discovery process, we found a lot more going on. So we've been Making our fixes since then and John's been highly engaged in that. We're working with, obviously, our teams in France. And because it's a combination of IT and supply chain working together, it's a complex, but highly important sort of seems we've got in place now in SASwords streams. So that's been really been the issue. I think that was the first signs back at the end of last year, but really in terms of the manifestation probably in the spring. Thank you. It's Andy Hughes from UBS. I've got a few, related questions here. I'm just kicking off, with the 68,000,000 exceptional charge. I mean, it seems a pretty hefty sum. I mean, there's, what, 11 big stores, I guess, 19 Siddlers in Screwfix. It seems quite a big charge. Is is there any stock clearance within that? So is the stock within the stores being cleared. Okay. So nothing on stock. Yes. And just moving on to stock, obviously you've got $2,800,000,000 of has stopped, has been going up whilst your sales have been going down. Can you give us any sort of feel for what the right level is? I mean, presumably you're carrying new products or not new products. It's often an old style. Can you give us a split? I mean, if 59% of sales are in new categories. Is that mirrored in your stock or is there more or less in terms of price? Well, you've alluded to, it's a combination of that. We have got this how the buildup has been as we're bringing in the new ranges, we need to actually have a peak in actually building your inventory for the sell through that should graduate over time. But also we've got a sort of a growing amount, particularly in France, we've actually stock that's actually now ready for clearance. So that's got to work through as well. So I think there's been a buildup in both. New ranges coming through and then we've also had the the deleted items, it's like that we've got to work through as well. In terms of a number where that should get to, I'd hesitate to give a number at the moment, but I think we do need to actually reduce this in both areas. One will happen naturally as the new ranges come in but the other actually, the non unified ranges are those that have been deleted. They'll have to reduce over the next 6 to 12 months. Op, which is going to be discontinued. What sort of rough percentage of inventory is that? To give you a number, it'd be sort of 5%. Right. Okay. So that's quite low. So I mean, what I'm doing, what I'm trying to get at is when's the magic here going to be when you get your supply chain gains coming through and you don't have the clearance to offset it. Is that Yes, I can tell you where you're coming from. Yes, I'm going in terms of why don't you say it once our baseline clearance or anything goes through, I think we're going to need another year and a half at a minimum, which definitely won't happen this year. We still have new ranges coming in, particularly in kitchens in France next year. And then there will be some range extensions of the existing ranges we'll put through. But I think it's probably another year, year and a half before we get down to a normalized level, but we don't have a total fixed on that at the moment. Great. Thank you. Thanks. Anne Critchlow from SG. Two questions from me, please. When do you think you'll be able to drop the legacy supply chain systems in France? And then secondly, what percentage of product is now relating to the product unique to Kingfisher? It's a good question on the on the legacy. I'm on it. No, definitely. I think that's that's been an issue. As we've been transitioning, we're now actually launching completing the IT platform rollout in Vico Depot during the course of this year. Working it through with the team, we're really looking through the course of next year, second half of next year, I would see dropping the core legacy systems, and that'll actually release the duplication and some of the costs we've got, you know, it's the area. Part of that's obviously going to be dependent on how quickly we can move through these ways of working in the process engineering that's required. Because as Andy said, as well, and I said that both of these both of these models have been decentralized models that we actually have to centralize and actually get the processes and ways of working. But I'm aiming for the second half of next year. On a unique number, I believe I'll be correct if it's wrong. 6, 7%. So it's it's still relatively low. But as you saw, if you were there in May, it's an area where we think there is a lot of mileage, and the opportunity to be more innovative And we have invested quite heavily in last few years in product design capability that we never had before. So we do actually have, now teams of people coming up with our own customer focus innovative products, which we're now getting on new supply based needs to make for us. So again, it's a journey, but we are confident that that's going to rise. But again, one of the to the series, exactly how far does that go, what's the reseller investment of that, and how does that stack up against international brands and local brands, which is all part of that customer proposition piece that we were talking about. Good morning, Kate Carver from Investec. Can you explain why Brico Depot didn't have the same supply chain issues as Casto and what's been different in implementation? 2 things. First of all, Puerto Depot isn't fully on the template. It hasn't been fully transitioned. That'll happen in the second half of this year. And secondly, I think a major component there is actually has significantly less SKUs. And if you take Castorama, it has close to 60,000 SKUs, but currently Brico Depot only has 13,000. And also it had less unification. So the complexity there has been less, but also I'd like to think that we've learned some of the lessons in actually transpired just recently with Castorama. So it's one of the same people that are working on that. And I think the last point to add not a small point. The master data, which is critical to this, was actually in much better shape in Brico Depot because of its legacy of how it ran its business. I think that's really important. Sorry, if I may. Just to add to it, here's a really important point. All our different opcos started in a different place. We were never in a rollout situation as some companies have. We were in a situation where we had legacy businesses that all were running differently. We've had to migrate them all to this new future. And what that's meant is the ones that have had the longest journey to travel, of the centralized curve, which is Castorama, a fairly the most challenging. Rico Depot has always had a fair amount to centralize within their culture and their management structures and frameworks. It's always been much more of a central model. So I think that really helps psychologically. And in the stores, people are prepared to follow and understand central, instructions much more rapidly. So it's the combination of all those things, I think, together, which answers the question. So did you have a follow-up? We've got one on the front here. It's actually first, if we can make. JB? Sorry. I'm okay. I'm keeping you fit. Here you go. And then where are we now? Thanks. Sorry. It's come blinded by the light. Sorry. Simon Owen from Credit Suisse. A few random questions. Can you talk a bit about footfall cash from, I'm intrigued by your kind of comments around, NPS going up. I mean, what's happening? Are people just not coming to the store and finding poor availability which case, it's quite surprising that the Net Promoter Score is improving. Can you just talk a bit more about that dynamic? Second is how has Good Home gone down as a brand, within the business, it's clearly a very important, initiative for the group. And can you just talk a bit about clearance and guidance? My impression was that clearance this year was going to be a bit more first half weighted and now you're talking about it in the second half weighted. Thanks, Aaron. I'll take the first 2, if I may. And then John maybe talk a little bit clearance. So, football is down, obviously. We don't know I don't know by how much, but it said probably by a quarter, in the last, thereabouts. And as you're saying, thereabouts, But we've left a loss shortfall over the last 2, 3 years. Part of that has been the reaction to the EDLP strategy, which we've implemented We've brought the overall price index of Castorama down substantially by about 5, 6 points over the last couple of years or two and a half years. But in doing that, we've also taken away the price point spike so that you get in promotional activity and we know that a fair portion of people who came into the store were coming in on promotion deals only, which is the same Cricket Epper. So the strategy was around trying to make sure that we had a more widely understood universal message with everyday low price, which people would respond to. So I don't think they're in conflict think the fact that we've got lower footfall is a reality, which we are trying to address through all the things we talked about. But the fact that the NPS scores, because you do NPS scores with the people who shop with you. So I think we're actually providing a better service and product and experience for the people who actually use store in the way we would like them to use it, which is as a place to come as their first choice, home improvement center. The promotional people have gone for now, and it's our job to convert them into loyal customers, not just deal seekers. So I think that's what's happened. Good home is, very new. We've spent a lot of time building that brand and, just, just putting it together, it's our first multi regional, multi category entry. And, I think it is important, as you say, not just because it is our first one that's like that. And is therefore a really interesting brand departure for us. But also because it ticks some boxes, which some of our other brands aren't quite as forceful on such as the sustainability platform and the profile of the brand, which we know are going to be really important customs for customs going forward. It's landing well, but it's just rolling out. It's just beginning. We've got flooring in stores, maybe Graeme, you'd like to make a comment. Very early days, customers have to get used to new brands, but do you have a comment about ups and downs of the introductions grant? I think as ever with the new brand, there is timing issue. And I think if I could say the earliest ones we've had in has been the good home paint. And of course, paint is one of those brands where some customers have a lot of loyalty and getting the changeover. But what we have found, especially from our staff and customers that are using the new Good Home Paint. They're delighted with the quality and the price of the product. So that's landed really well with a good home flooring which is kind of in the next one, probably better. And we're getting a lot of great feedback and starting to see the sales lift, with that And I think the next big one for us probably is going to be good home kitchens, which we're obviously just kicking off at the moment. So I think it is a timing issue, but some great feedback from the customers and the staff, which I always think is a great measurement. And listening to our customers, It's about the quality of the brand as well as some of that sustainable issues that really are coming to the fore. And predominantly, we've been asked a lot from customers about not just the sustainability of that paint, but also is it suitable for children, which is questions that are older generation that we used to ask. Clearance guidance? Yes, Simon. And we always said that we thought that Clearance be half one weighted, primarily associated implementation of surface and decor. We have increased, as I said earlier, from 25 30 to 30 to 35, but we also expect incremental clearance now in half 2 associated new B and Q kitchen range. And just to note, the half on clearance was about 40 bps on sales of GBP 6,000,000,000. So that calculates to around GBP 20,000,000. So we're just building in the incremental from E And Q. Thank you. Sorry, finally at the back. Sorry. So Jeff Rubble here from Morgan Stanley. Can I just take you back to Slide 16 of the presentation, which is the gross margin bridge, where you have a 30 basis points improvement from a price positioning mainly at Brico Depot France? Could you just explain to us exactly what you've done in terms of price repositioning at Brico Depot France? I'll take it. I'll try. You'll know that Karim if I get this one. The main one of the main features of Brico Deppa Francis that we used to run 16% to 17% of our sales were, when I arrived, which is imported product, which is sold at a deal, is one off lock. That has gone down significantly. We're probably at the 4 or 5 level, Now, again, that whole strategy, how much is where is it? We're just testing the market, see where the right point is, but it's that. It's the reduction because that was typically, if we made anything from it, it wasn't much. So it was about taking that away from our sales line and converting that into more affordable sales even though we've got an impact on the top line. Great. Thank you. And if I could just have one more. Obviously, we don't know where we're going with Brexit at the moment, but if we do end up with the UK having different trade policy to the rest of the EU. Are you still going to be able to get the group scale buying benefits you think going forwards? Because obviously, if the UK has different tariff import, relative to the EU tariff imports from, I don't know, China or wherever else you may be sourcing product from. Could that sort of obviate the whole sort of strategy of buying jointly? Well, we don't. Well, I mean, we, we gotta think so because we'd still be better off than we otherwise would be. Unless we were buying most of our things locally, which I don't think we have a it's roughly a third, a third, a third, a third, a third in terms of sourcing, because part of the strategy has been to on the unified product, particularly as to source in the Far East. So we actually have hedging there and also then they're sourcing locally. But to your point, in terms of the tariffs, particularly from Europe, if the government guidelines that they put out, which they're still to reaffirm, come through, because we're not actually selling food or pharmaceuticals, etcetera. The the products on that list are the ones that we sell actually have zero tariffs that that falls into place. Halifax. Yes. Yes. So I don't think so. Sorry, gentlemen in front of the fellow, gentlemen, just spoke. Yes. Hi, Jeff Larrow at Redburn. Can you talk a bit screwfix. I think price and screwfix were sort of cojoined 4 or 5 times through the presentation. Should we take out of this that you've been a bit greedy on price in recent years. How far do you need to go? Can you help sort of quantify in that group gross margin bridge, what this Screwfix price component is in half 1, half 2. Do you want to say that, Jim? Yes, sure. I think what we have been, we have been a debt. We are centered into the competition. We have actually been addressing. We have put some price realignment in the first half. We do have some up weighted in the second half. But it's, I wouldn't use the term greedy. I think it's just recognizing the competitive situation. Our price index now is actually in some categories quite close. That's sort of 102%, but we're continuing to assess that. And can we talk about transformation costs obviously taking away one of your 3 PBT definitions, which is totally fine and logical. Should we be adding back this 1,000,000 next year is the adjusted number for the non recurrence of transformation costs. So given all that you've got to do, is this just going to be a permanent feature now? I think part of the logic there is that the transformation costs within P and L transformation, we'll try and expect those costs that were actually a part of the initial establishment of, for example, unified offering. As that's now coming into play and it continues to work, that is actually generating profitability for the business. So it would be incorrect for us to actually extract that and show as a separate P and L item. So any associated costs with any ongoing is actually absorbed within the margin generation look up, but I wouldn't be adding $60,000,000 to the underlying costs. As a consequence. Oh, sorry. I was going there first. I beg your pardon. It's not it's my signaling to fall in. Sorry. Jenna? Joe in the right hand side. We've got a good question, sir. Yes, hi. This is Tashap from Goldman Sachs. Just on B and Q, it seems the like for like has been underperforming some of the listed deals. Is there anything apart from rain changes and installation issues going in the B and Q that might be impacting the performance there? B and Q in particular? Well, that's Graham. And I think those are the 2 those are the 2 we've sort of 3 we've called out. Brexit, the installation, disruption, and kitchens, but any other things you'd like to add? Do we have JV you have a And kind of just sat on the BNQ, the digital part as well. It just only grew 10%? Yes, I think, I mean, obviously, the best bit of the economy is something that we're aware of, but I think what we have been doing is really getting house in order and really getting fit. The installations, was a decision we took. I think it was the right decision at, at the time we were not technically set up. We didn't have a product range. We were not giving our customers a good service, and we weren't making money out of it. So I think it was the right decision for B and Q. And I think what we've got to do is get our new kitchen range in, get our supply and logistics properly set up and then maybe look at where we go in installations in the future but I'd rather get the base elements in fast to get ourselves really fit and ready, be famous for doing a great service, great product, and then building that. I think on digital, as you probably know, having come from Screwfix, I've got a great passion and I think the work that I'm doing with John Muett that Screwfix where we really have a great opportunity to push forward there. As you know, it's all about getting the base elements in the the technical fulfillment, and we've got a great opportunity there, I think, in the future, and we're making great strides forward on that. And, we have had a lot of disruption this year. We have changed probably over a third of our store, which has led to a lot of disruption We're just coming through that apart from kitchens. We've worked hard at keeping clear in the stock as well as getting a new range in and really trying to minimize the impact in the customers. And I think we're looking forward to now is really been able to, sweat that new product and drive forward a better performance in the future. Just one question on unique unified ranges. Basically, it does look like the growth has slowed down in unique, unified ranges. It was going close to 2% last year. Broadly flat this in the first half of this year. Is it all linked to the Castorama issues or how these ranges are being accepted in rest of that. Sorry, I missed the question. So unique and unified ranges growth was close to 2% last year, and it's close to broadly flat forty basis points up this year. Is there something specific happening in the growth in the unique unified ranges? There's no issues. I think if anything, the growth is sort of, as we've seen across both unified and non unified, some of the disruption that was had in France been turned to the supply chain. Some of the competitive issues and some of the disruption we've had across the business. But it's not something specific to unified ranges that's changed. At the end of that unified, it's still growing versus non unified. Thank you. Thank you. Good morning. Richard Chamber in RBC. Can we just touch on Eastern Europe? I think it looks like growth in Poland has slowed in, in the second quarter. I don't know if you can just, look at the reasons for that and also how much the in Romania, how much the practical integration contributed to the losses we saw there? Okay. I think in the second quarter, there was more some some comparatives and also some, it was more of the comparatives quarter on quarter. And there was, I wouldn't say, we're not seeing it as a slowing. Actually had new store openings and a couple of events taking place in the quarter, which are more standalone, but it's not a slowing of the overall business. In terms of practica, it has proved challenging. The businesses aren't integrated. They've got a lot that, as I said in my presentation, there's a lot of transitional work all taking place, and that'll go into next year as well. It's taking longer and taking more time. Once they've integrated the two businesses, and they can actually manage their inventory and everything better I think they're executionally improved, but it's still, as I said, in transition over the next 6 to 12 but it has been the drag on earnings in the short term as we said. Can I just ask a follow-up on Castau, Castorama France, the digital offer, where you think you are on that journey to improve the customer experience, things like functionality and search optimization and so on and when we can expect to sales uplift from that? So our digital upgrades have come out in a series of releases. So Graham has just been in the latest one, which actually did give us, give us some, clunky moments when that was going in, in the spring. So there was a bit of impact from that. But that's now working a lot better. And, we're guessing, if you look at the MPS, because we also measure the MPS via digital, customer reaction, and that's rising, but I'd say it's rising from a low start, in both B and Q and cash So I think, yes, it's better. The sales have been rising in all our business units, including Castorama, but it starts from a long way back. And still a lot we can do. And I think the next release that we've put into the B and Q release that we've done this spring, I think is scheduled for, I'm going to get this wrong. Next spring, in Casa. So it'll be coming for probably 6 months now. We have to line everything up with all the other questions we've asked today about. How do we sequence the change program? Because there's no doubt that the compound effect of the changes in France have been what's really hurting. So each, if you just track the individual activities, you don't actually see the compounding effect till it's late in the in the game. So I think what we need to do is to go back as we said and look at how we're sequencing these change programs so that we're not submerging our people continuing with with more change. So it's just how we do it. I think the current forecast is for that, but we'll review that. But hopefully it will be there because it's fairly discreet work. So it should improve from there, but a long way to improve big opportunity. Okay. 3 more. 3 more quick ones, 1, 2, 3. Alan Cochrane City. You explain the moving parts of the, of the gross margin guidance of flat for the full year versus up for the 1st half, if you can? And secondly, I'm trying to wrack my brains as to you've talked about dual running costs clearance. What is the source of underlying profitability of the business, how much do you're running costs are sitting in there? How much of your gross margin is being negatively impacted can't quite get to feel what it should look like at the end. Yes. I think first, on the margin there, I think it's, we still have, I think the primary drivers there is the ongoing clearance as we've said, we've actually up, up weighted out our guidance in terms of clearance. And the second part is just the ongoing disruption, particularly around Castorama France. We don't expect that to change materially over the short to medium term as we're sort of working through a number of the issues we're talking about. And then there's sort of a third element to that too is that we don't expect to get the same level of before clearance and disruption costs because we've got the annualization of both the installation and removaling fee in Q and also the Euro Vage or the price repositioning in France that annualizes the end of Q3. So there's less positives coming through. Let's positives and 2 main pay negatives coming through. Okay. And underlying profitability we don't have a calculation on that at this point. It's large. Does that help? Think what I think it'd be fair to say that there's significant unlock potential and value once we remove a number of these impediments clearance being normalized, removing the supply chain and logistics issues, getting our fulfillment in place and getting digital in place. We're currently working through a 3 3 year plan analysis at the moment, which will be going to with Terry. And I'm sure that Terry will actually have a number of inputs into that. So the business going forward, it's something we'll be working to over the next 3 to 6 months. But we agree we'd be having the customer's visibility of that. Point taken. Is that a general answer? Thank you. Alastair Mackinnon, Scottish Investment Trust. Thanks for today's presentation. Look, I get in several years of pain, unifying everything. What I wondered though was with Thierry's arrival, whether there's an opportunity to step back a level the board level and say, is this the right way forward? Is this what the customer wants? Or is there a way to look at the portfolio of assets and say perhaps different countries want different things, perhaps it's a different way of doing? I know that one won't be popular because of the journal we've been on, but I just wonder what your thoughts on, why you think a unified offering across different geographies will work, but what can you point you to say it works? Well, I think, look, and it's a great question. As I said at the start of the presentation, Terry has no hand customer. He can come and he can look. We're operating to a business that is common sense in any business that you make the best of your assets. However, you don't have to define that to be. We definitely want to try and get a return from the investments we've made and we think that some of the things we've done are certainly, you know, obvious ways to improve the efficiency of of the business as it's composed. I think, Thierry will come in and take a full view and a good look at everything. And we need to have some priorities of resource allocation. We need to think through that. That's going to be part of the process that we're going to be going through with the board, which Terry is input over the next few months. You know, there are there are I think there are evidence points that it's always a balance. This is not an act of faith. This is about finding the right pragmatic balance between what you know you can unify and get benefit from. Where customers are happy with the innovation you bring, and the fact that it's unified is another area there, it can be unified and it's the advantage you've seen in better pricing and unique attributes of the product. So you improve the product, you drop the price and it's a price category and it's a product category that is insensitive in terms of customer loyalty. Those exist, we have large amounts of our range that exist like that, finding the balance between those products and how much local product we have in international again. So it's back to this question, and we need to continually test and make sure that we are serving our customers, and I'd sure Theo would agree with this, with what they want and finding the places where we can get the efficiencies out with no detriment if not an improvement in the customer office. So it's a balance and, we'll see where we go. But I think Terry's arrival is an opportune. I think it's a good opportunity to get a completely fresh perspective, and we'll be back to talk to you about that. Thank you. Last question, if you may. Yeah. Thanks so much. Tuncure at Wittenhouse, back to the business as it is. You mentioned, availability of Castorama. And I wonder if you could sort of give us some sort of quantification of how bad presumably the availability is and where you think you can get it to, and what you measure with availability. And second point, on the unique offer where you've got 150 basis points of gross margin benefit, is that a net figure. I mean, have you, sort of retained all of the benefit? Or, I presume there's some pass through in price as well as retention in the gross margin. Can you give us some sort of sense of that? Honestly, 150 basis points, it is gross, it is gross. And I think searching it out, anything you see in our margin, we haven't been able to retain all of that. There is some CPI and inflation coming through there. We're trying to actually offset but not all, not all of us gets retained. It's going to get anticipated some of it through supply chain. As we've said too, the ways of working now is that under the new operating model, we are we are earning more of the supply chain, particularly from the Far East. So we're not just sourcing from around the corner. So there are some there are some additional costs directly offsetting that. So the 150 is before those costs? Correct. Okay. And the availability question? The availability, I mean, giving you broad terms. I mean, if you're looking at what good look like we can look around the group that will sort of see it's more like 98% to 99% in terms of fulfilment. That's what we should be going to look. In some cases. And some of it's because things have just fallen over in some of the the DCs that were being sort of sub-ninety five. Okay. And that's the heart of the issue that we're addressing. And in some case, it is actually it's a disconnecting process is the way we've actually had inventory in location the way we've entered into the system. You very much. Well, thank you very much for your time this morning, ladies and gentlemen, and before seeing you again soon. Thank you.