Earnings Call: H1 2021

Mar 22, 2021

Thank you for standing by, and welcome to the Kathmandu Holdings Limited H1 FY 'twenty one Kathmandu Results Investor Call. All participants are in a listen only mode. I would now like to hand the conference over to Mr. Xavier Simone, Group CEO. Please go ahead. Thank you, Benedet. Good morning, everyone, and thank you for joining us on today's presentation of the Catman Holdings results for the first half of the 2021 financial year. My name is David Simonay, and I'm the Group CEO of the company. I'm joined on the call by Chris Keigh, our Chief Financial Officer and by our Chairman, David Kirk, will participate in the Q and A session. We'll be talking to the presentation, both on the NZX and AFX this morning. Unless otherwise specified, all financial numbers are in New Zealand dollars. We will begin on Slide 2, which briefly covers our first half group results. Regarding ongoing COVID-nineteen impacts in key global markets, the group has achieved strong first half results. Rip Curl delivered an outstanding first half result, validating the group's diversification strategy. Benefiting from increased participation in surfing in Australia, Europe and the U. S, Rip Curl achieved strong sales and profits despite key store closures underpinned by the brand's technical product focus and strong consumer engagement. Pleasingly, Rip Curl's wholesale order book is above pre COVID-nineteen levels. Camp Mountain was particularly impacted by COVID-nineteen related store closures and travel restrictions with less international travel to the northern hemisphere winter resulting in reduced demand for insulation and rainwear products. However, we did see renewed interest in local travel and adventure, which led to strong demand for camp, beach and footwear products. Urbose achieved sales growth as a result of the successful product innovation strategy and diversification of its customer base. And we also saw increased participation in hiking. The group continues to benefit from our cautious operational and capital management following COVID-nineteen and the strong cash generating ability of our brand. Turning on to Slide 3, I'd like to discuss in more detail the group's first half financial year highlights. As I mentioned previously, our half year results were underpinned by the strong performance of VIBEKEL. Total group sales were up 12.9% on prior year, which includes a full 6 months contribution from VIBEKEL. This result values our diversification strategy, which we will continue to leverage going forward. We continue to be cautious around our operating costs in response to the current uncertain trading conditions. As such, there were some significant restructuring and synergy savings and length abatement supplemented by government wage assistance. Taken together, this has allowed us 1st half trading profit, achieving an underlying EBITDA of $48,200,000 Pleasingly, we saw step challenge in our group online sales penetration increasing to 12.7 percent of direct to consumer sales, a sizable increase over the previous corresponding figure of 8.8%. We finished the half with a strong balance sheet with net debt of $10,100,000 following careful management of our working capital. Moving to Slide 4. I want to expand on the increase in group online penetration that we saw over the half. As a result of changing consumer preferences brought about by the COVID-nineteen lockdown period, we saw an acceleration in online sales. The investments we made into our omni channel capabilities allowed our brands to capture this growth in online sales, which saw good online sales grow 18.5 percent to a record $36,000,000 Online penetration remained significantly above pre COVID levels above Rip Curl and Kathmandu. Rip Curl Online Sales growth was significantly higher across key markets, registering 107% growth in USA, 47% growth in Australia and 78% in Europe. Sap Manzu online sales of 18,600,000 in the half, representing 14.4% of total direct to consumer sales. This was up from 10.5% in the prior year. We're excited to build on our online success with Woodcull and Kathmandu by launching an Urbose online store imminently. Moving on to Slide 5 now. Sustainability is at the core of our brand. We certainly believe that actions are inextricably linked to our values. So I'm proud to announce that the Katmandi brand has reached its carbon neutral milestone 4 years ahead of schedule. Once we're excited to have achieved such a milestone, our ambition doesn't stop there, and the group will set a science based carbon reduction target moving forward. I'd like to highlight some other notable sustainability achievements. The Catmabu brand meets a high standard of environmental and social performance as certified by its B Corp status. CAPMAD is also a member of the Fair Labor Association, which is 100% sustainable cotton and obtained the Rainbow TIC certification in New Zealand for embracing diversity and inclusion. For Ripka, last year marked the 20th anniversary of Ripka Planet Day, where our crew worked with local councils to rejuvenate the post. Ripka also scored a D plus in the ethical fashion reports for the 2nd year running and collaborated with Kathmando on its 1st sustainable equity report. As for about over 3,300,000 trees have been planted since the company's inception, and gender diversity of the team has improved with female representation reaching 41%. Turning to Slide 6, I now want to discuss the impact we saw from the COVID-nineteen pandemic and how we responded. Clearly, COVID-nineteen had a major impact on our business in the first half. Over 60 Greater Melbourne stores were closed for over 11 weeks, 14 stores in Auckland were closed for 2 weeks and several CBD and airport stores as well as stores in Hawaii, Bali and Europe are still impacted by other COVID related travel restrictions or government mandated lockdowns and closures. In addition, wholesale sales for the half were impacted by the missed selling season during the initial lockdown in April May 2020 or delivery in October to December 2020. I'm very proud of the rapid response our team implemented to react to changes in consumer preference. With participation in surf increasing, Woodcurl responded quickly to demand for wet suits and related surfing products. Sap Man Group uprated its focus on summer camping and footwear to respond to increased interest in local travel and adventure. And our omni channel capability allowed our brands to capture record demand online. I will now hand over to Chris to cover the remainder of the presentation. Thank you, Xavier. Moving on to the group results overview on Slide 8. Our statutory results include the adoption of IFRS 16. For comparability, the impact of IFRS 16 has been excluded from our underlying results. The first half of FY twenty twenty one includes a full 6 months of RIPEUR compared to the first half of FY 'twenty, which included 3 months of Rip Curl post acquisition. As you can see, we have recorded positive financial metrics. Total sales in the first half of the year increased to $410,700,000 and underlying EBITDA increased by 19 percent to $48,200,000 As previously mentioned by Xavier, we continue to act cautiously around the management of operating expenses. The approach is now helping our underlying results as we received the benefits of re abatement as well as the $15,000,000 in annualized cost reduction from restructuring and CNG savings. Government wage assistance across geographies contributed to a net benefit to operating expenses of $15,200,000 Depreciation also included a $2,500,000 notional amortization of Whitfield customer relationships. Interest cost in the first half includes the non cash but then over $2,100,000 one off facility underwriting costs relating to the Ripco acquisition. These have been excluded from the underlying results. Moving to operating cash flow on slide 9. We again delivered strong cash flow of $10,700,000 despite the challenging conditions. We have an outflow in working capital of $17,900,000 driven primarily by a reduction in payables as a result of final agreements with landlords on rent abatements that we signaled at our year end release last year. CapEx for the full year is expected to be circa 30,000,000 dollars with continued investment in systems and capabilities. Moving to our balance sheet on slide 10. We are in a very strong position. We've managed our inventory very carefully and our current inventory position is well placed in the COVID demand environment with low clearance stock levels. These liabilities have reduced due to leases progressing through their fixed lease terms. On to slide 11, you can see a breakdown of the net debt over the past 3 years. Net debt has decreased $10,100,000 following the capital raise in April 2020. This has given us significant headroom in our current facility of circa $380,000,000 It should be noted that historically the second half of the financial year for the Cat and Zoo brand generates very strong cash and flows. Currently, the group compiles with all debt facility covenants and we're currently in the process of reviewing our debt facility which is expected to increase flexibility, reduce drawn funds and introduce sustainability on ethane. Subject to normal trading conditions, we expect to be in a positive cash position by the end of the year. To slide 12, interim dividend. In light of the improved trading conditions, the group has resumed paying dividends with our directors declaring a New Zealand $0.02 per share interim dividend. The dividend will not be imputed for New Zealand shareholders, but will be fully franked for Australian shareholders. I'll now move to the segment results and performance of each of our brands. Looking at I'll go in more detail on slide 14, we can see the underlying P and L for the 6 months the first half in the first half compared to 3 months in 2020. On a comparable 6 month basis, total sales were $4.3 below last year, sales growth achieved in 2 markets. Direct to consumer same store sales grew strongly in 27 weeks ended 31 January with 21% growth adjusted for store closures and 7.4% growth overall. Sales in our online channel grew significantly on the comparable 2nd month period last year, up 79% and comprised 11.2% of DTC sales. Furthermore, as a result of higher mix of direct to consumer sales, our gross margin was 40 basis points above the 6 month period last year. Top down disrupted the wholesale selling period for deliveries in October to December 2020. However, order book for subsequent seasons are now above pre COVID-nineteen levels, reflecting customers restocking and strong field category performance. Moving on to slide 15, this showcases a few of our flagship Rip Curl product innovations. A key tenant of Rip Curl and all our brands is technical excellence and innovation, which allows us to provide the best possible product for our customers. Continuing with market leading film collection, the Paradise Cawing film collection joins the sustainable saltwater culture family, providing customers an eco friendly range of quality to their products. Ancillary Pucker collection and Ancillary Peak Seeker jacket embodies the synergy shared across our brands, the performer utilizing Kathmandu expertise to develop new technical insulation styles, and the latter leveraging technology from the successful Heatseeker, the suit program. Slide 16 covers the group commitment to the global brand leadership of Rip Curl. We have recently signed a 3 year partnership for the new Rip Curl World Surf League final, season ending one day competition alongside the men's and women's world surfing champions. Rip Curl also holds sponsors for naming rights to 3 new events in the WSL World Tour, Rip Girl Cup in Newcastle, Rip Girl Classic Narrabeen and the Rip Girl Church on New South Island. Rip Girl also secured online sponsorship of the Rip Girl Pro Old Beach when it returns in 2022. Lastly, Rip Curl is launching a brand new global campaign including 50 of our international team riders to highlight diversity, inclusivity and sizes for all. Moving to the Kathmandu brand on slide 18, we show Kathmandu's underlying P and L for the first half pre IFRS 16. COVID-nineteen lockdowns and travel restrictions and store closures impacted on Kathmandu Financials. Total sales 34.1% below the first half of last year. In Australia, sales were 40.5% below last year, with 27 Greater Melbourne stores closed for 11 weeks. In New Zealand, total sales were 23.4% below last year, also in Auckland store closed for 2 weeks. Same store sales were 30% below last year when adjusted for lockdown closures to 35.4% below last year overall. Group performance in shopping centers, CBD stores and tourist locations active in tandem with reduced demand for insulation and rainwear resulting from a lack of international travelers to the Northern Hemisphere, paying on total sales. Online penetration increased from 10.5% of sales in the first half FY twenty twenty to 14.4% of sales in the first half of FY twenty twenty one. Also, leading to the strong demand for camp, beach and footwear and the renewed interest in local travel and adventure. Sapmundu sales have historically weighted to the second half of the year and winter in Australasia drives natural demand for insulation and rainwear. Sapindu operating expenses included the benefits from restructuring, interbankments and mixed government wage assistance. On the slide 19, we continue to lead innovation and sustainable technology. Slide 19 shows how we have developed products focused on sustainability. For example, a 100% recycled biodegradable fleet, the world first. We're in partnership with PringleLoft, where H down for highly accelerated landfills and oceans and returns to its natural elements. Turning to slide 20, we have an active and engaged customer base with a net promoter score of 76, 3% above the second half of last year. We continue to leverage the Summer Club loyalty program, driving personalization of the customer relationship, building brand loyalty. And we have 2,200,000 active Summer Club members, representing over 70% of total Canada retail. We're continuing to invest in personalization capability. We've seen loyalty performance by using data analytics and invites to drive stronger relevancy and in turn higher conversion. Moving on to OBO, slide 22, shows OBO's profit and loss in its local U. S. Dollar currency. OBO sales grew 3.8%, reaching $22,100,000 per half, driven by a successful product innovation strategy and increased participation in hiking. Gross margin was impacted significantly by a one off DSA cost of $1,100,000 to support key customer delivery of winter seasonal styles. Post 'nineteen will normalize the historical levels for the second half. Seasonally, our forward order book is well above pre COVID-nineteen levels, enabling business to support future growth. This includes the development of a new online store, which is set from imminent launch. Moving to slide 43, Caboz has been broadening the appeal of its product range since acquisition to target a younger, more diverse and active consumer segment. This is evidenced by the successful selling of the new Sykes and Bozeman collections, achieved while maintaining the strength of core Bridger and Sawtooth hugging focus styles. Versy has always been a focus of the group. Accordingly, OBO has launched its 1st ever diversity, equity and inclusion report. OBO is currently the highly reputable brand with the number one selling outdoor footwear brand in the U. S, the Outside Business Journal Annual Survey of American Independent Retailers. This comes off the back of our successful truest influencer program implemented last year in conjunction with the launch of the Truth of the Trial podcast. This contributed to a 37% growth in OBO's social media audience. Now move to slide 25, our group strategy. Our group strategy has not changed throughout the challenging period. We are a global outdoor and excellent store company, underpinned by iconic brands and technical products that focus on sustainability. We've been building a portfolio of brands that provides diversification across geography, channels, products and seasonality. Starting with the global year round needs of customers in the outdoor sport and lifestyle categories. We leverage our portfolio delivering operational excellence in sourcing, supply chain and systems, accelerating digital transformation and driving margin expansion through synergies, complementary expertise and core capabilities of our brands. We're maintaining a relentless focus on core customers, delivering solutions to their needs. We'll be able to grow these brands to a global scale, enhance customer loyalty. In particular, we'll continue the development of technical, differentiated and sustainable products, accelerate the expansion of the direct to consumer business. Throughout this whole journey, we will remain true to our values. Sustainability is part of our DNA and is ingrained in everything we do. We also embrace diversity and inclusion in the workplace and build strong ties with local communities. Turning to slide 26, key strategic priorities for FY 'twenty one remain unchanged. We remain committed to delivering on our strategic imperatives. As noted previously, the strong rig count performance achieved in the first half of FY 'twenty one highlights our diversification strategy. In the second half, Kathmandu is very well positioned to perform in its traditional strong winter season. Group continues to leverage the portfolio of the brand at its disposal. Line penetration increased to 12 point 7% in the first half, up from 8.8% last year. In the second half, we will continue to invest in our digital program, including loyalty management, digital planning, customization using data algorithms, other driven insights into consumer preferences, as well as ERP and point of sale upgrades. We'll be implementing a loyalty program at Rip Curl with the end goal of improving analytics, customer loyalty and ultimately conversion the sales. Launch of the Oboz online store and increasing its personalization of data analytics for Kathmandu also be a priority in the second half. Lastly, following on from the carbon neutral certification of the Kathmandu brand, we'll be setting a science based carbon reduction target for the group. We're also working towards a group wide B Corp certification, engaging with key stakeholders and the group ESG materiality assessment. And on the outlook on slide 27, our catenary ended traditionally strong winter season very well prepared. Although investment in new products see that into the second half, we can order book well above pre COVID-nineteen levels. Brookfield continues to trade in line with strong first half trends and wholesale order books are above pre COVID-nineteen levels. Long term growth fundamentals remain in place. We're strong iconic brands. We create technical and innovative products. We have a loyal customer base with growing global reach. Secondly, the lockdown conditions appear to have increased participation in outdoor hiking, beach surfing activity. Our brands are well positioned to capitalize on this trend. The rollout of COVID-nineteen vaccines is to benefit international travel in the long term to in turn provide strong growth opportunities. The strong cash generating business with low debt provides us with the flexibility to come to potential growth opportunities and growing returns for our shareholders. This now concludes the formal part of today's presentation. I'd like to thank all our shareholders for their support and for taking the time to join us on the call. I'd like to now open the call to Kristin, where myself and David Kirk, our Chairman may be available for questions. Thank Your first question comes from Andrew Steele of Jardan. Please go ahead. Andrew? Good morning, guys. The first one for me is on Rip Curl. Could you just call out the level of rent abatements and wage assistance that you received in the first half? And then I guess related to that, looking forward, what would you say you think is sort of a sustainable EBITDA margin is in that business? In terms of the rebatements, it's about 2,000,000 for each brand. And the wage assistance, when I look at the wage assistance, it's totally neutral against the impact of store closures for the Brookfield brand in the first half. So the net impact was very little. Our long term target for Brookfield has always been a 15% EBITDA margin. So we'll achieve that in the first half. We expect some moderation in the second half, but we remain committed to that long term goal. Okay. And so would just to be clear, were you saying that you had the 15% on a full year basis for this year? Or is that sort of starting to think in future years it will moderate back towards that the FY 'twenty two year? Yes. I mean, we had a very strong first half of book curve. So there's a lot of freight to come in COVID impacts to consider for the second half, but I'm really confident on our target. Great. Thank you. And just on the Kathmandu brand, you've called out the negative impact of weakness in specific categories. Could you actually call out how much was winter down and travel categories down? And then what does that look like as the relativity to the all other categories? Is it just that those were down significantly and all others were flat or modestly up? What does that picture look like? Yes. Without going into the books, individual categories, I mean, for that category, that significant impact on trading for that half and first half, as well as, I think, real travel related in terms of some travel accessories. So that outweighs the upside of the store and can footwear and pure high permitted gear. So that impacts largely you've seen through the numbers in terms of trading a lot. And just again, sorry to clarify on that, Chris, so you're saying that outside of those categories that you specifically called out, which were impacted, all others, were they broadly up on average or flat or on average? I mean, some there's something things like a flat for example and winter products which can it can broad other credit be also impacted. So across that mix, the rating of insulation, rainwear and winter products which we traditionally sell quite strongly in the first half. Overseas travel. That took them out, but outweigh the impact of the hemp and inflammatory performance. Thank you. I'd also like to announce, due to the limited time we have today, could you please limit questions to 2 per person to allow everyone to have the Your next question comes from Guy Hooper of Forsyth Bar. I guess just before Andrew is off around the segment G brand sales. I mean, how do you characterize, I guess, any movements in market share or market position for that brand over the last year? I mean, overall the market segment I mean, different brands have different characteristics. And the outdoor segment outdoor and travel segment is quite a broad segment. So the pure like for like is really hard to measure. To remain pretty confident in terms of those key installation rainwear styles that got impacted in the first half of our overall positioning in the market. You can't just compare I'm not going to be talking about dry, but you can't just compare to like because of the difference in product categories and expanded brands, which some of our competitors sell and have a higher summer product maybe as well. So we can't really compare to that. Overall, I think in terms of our winter weighted products, a handful of winter, we were pretty confident in terms of our market share in those KDDs. Okay. Thank you. And just I guess around inventory levels. I mean, how are you feeling about those? Do you expect these to return to prior year levels at year end? And I guess maybe some comments just around, I guess, a return to normal promotional calendar or a level of discounting in the ticket? Yes. Thinking on inventory levels, So I mean, we're in a pretty clean inventory position. There may be some slight restocking of some area of inventory. So there'll be some movement, but not a material movement in inventory position. Biggest challenge is inventory. The full areas are just supply chains in the middle on time for shipping out. So we're reasonably confident for the inventory position to deliver the second half. Is that so? Thanks. Thank you. Your next question comes from Marni Leisart of Macquarie. Please go ahead. Good morning, Chris. Good morning, Javier. How are we? David's in the Q and A position, Manny, as well. This is David Macquarie. Oh, sorry, David. David and Chris, just wanted to clarify, can you give us run through like maybe the sell through rate that you're seeing in the channels that OBOS and wood coal are exposed to. How much of it would be demand? And how much of it would be maybe, I mean, is it just pure speculation that maybe inventory balances are a little weaker in those retail partners because of COVID and planning not really corresponding with demand. Yes. I mean, there's definitely an element of inventory restocking that we believe and some of the forward orders. Particularly, we've seen in the Brookfield channel, we saw Sulphur in our own retail stores. So and we see that surf shops generally. So, we're confident that there's elements of both in there in terms of category performance as well as inventory restocking. Same with logos in the U. S, we definitely there's some inventory stocking as part of that, but we're really pleased with the performance of logos for its key customers, customer base, as we talked about in the presentation. So I think the next principle is restocking and category performance. My second question just relates to the spread off there. Just trying to understand, in your trade and other receivables, the allowance for expected credit losses, this is in Note 8, it is above remains above pre pandemic levels. Can you perhaps run us through how we think about receivables moving forward? I just I note that obviously, the receivables are down too and kind of how is the how are the inventory sales talking to that? I mean Sorry, sales. Yes. We're in a sort of I think a reasonably conservative position there. We've actually seen the collection be very strong, especially in the U. S. Market and European market. So overall, we're very comfortable with our current collection of receivables that's been operating very clean. That's clear. I'll let others ask their questions. Thanks. Thanks, Bonnie. Thank you. Your next question comes from Mark Waid of CLSA. Please go ahead. Good morning, guys. I appreciate the comments you made earlier that you're saying the Camadu brands will prepare for the second half. Can you expand on some of the plans that over the next couple of years to really reinvigorate that brand in Australia and New Zealand and to improve the awareness of some of the newer markets in North America? Certainly, reinvigoration. I mean, it's last winter was a weaker winter over the cost of Canada brand. So and we're pretty confident with good stock levels of pre sales and a strong brand positioning and promotional calendar set up. So I think we're well positioned for that ones are coming up. We're always reviewing product mix and categories, Catmando, and there's some things on the horizon just to support your brand activity. I mean, we're continuing to invest in that space and our website. So, we're always looking at going forward and I'm pretty confident that as we go through markets opening up because that's been the biggest impact on Cabin and Do is to secure like a travel and traffic that as we start seeing that even domestic tourism open up further and the confidence that we'll see some improvement there. Okay. And maybe David, if I can ask you for an update on the search for a replacement group CEO, the specific qualities being sought in that candidate and perhaps what aspects of the group strategy are set in stone versus what's open to change? Good morning, everyone. Thanks for the question. We're well along the way with our new CEO search, we have appointed Evan Vinda to support us on the process. We have passed along that phase and we're moving into interviews of shortlisted candidates. So we're relying on in terms of start date, we're relying on the arrangements that the changing candidate has in their current agenda as they come from outside the organization. But we have progressed well and we are advancing some of the candidates. So that's good. The Chief Executive will bring their own lens to the organization, but we feel that this is a clear strategy being put forward by management and engaged with by the Board and committed to by Broad and Management. And that strategy we've seen unveiled over the last couple of years, and we think it's been a successful strategy. If you look at the contribution that Lifto has made in this period in particular, I think it would be difficult to disagree that it's been a good strategy to to differentiate and diversify by season, by hemisphere, by product. But I mean it's a very solid and acquiring and investing in brands that are consistent with the portfolio and Catman Goose roots and the Rip Hills roots, which are technical brands, which have a strong element of emotional connection in the brand and omni channel approach to going to market. I think you can expect that type of thinking to continue, as I said, which is indicative and of course, bringing his or her angle on that. Thanks for that insight, David. Thank you. Your next question comes from Paige Chenesee of ACC. Please go ahead. Hi, guys. Thank you for your time today. My first question is just around the $15,000,000 in cost savings and really whether or not you expect to see them in dual continuing on through the year and whether there are any additional cost savings to come? Yes. I mean, largely that $15,000,000 is ongoing. So we expect that to continue. So we're pretty confident of that. We've already gone pretty hard on some of that with the other cost structure. So there's no, in terms of same at the moment, significant other cost out in Hetman. But we will always review our cost structure to be as efficient as possible in light of what we need to do at least in the group. So that's kind of where we set. Okay. Thank you. And obviously, a lot of interest in Kathmandu and how it's going to perform through the winter. Do you guys are you able to provide a trading update on how it's tracking in the last couple of weeks? I mean, it's on which is pretty hard to compare it against a slightly timing difference on promotional calendar. Your comp increased COVID impacts right now last year. That's on we are an improved pickup on those key winter solids, but that's here we go. Thank you, guys. Thank you. Your next question comes from Chris Byrne of Craig's IP. Please go ahead. Good morning to both of you. I guess one for you, David. Just your balance sheet is obviously very strong. You've talked about being able to use that for opportunities. Is that sort of more within your current assets? Are you sort of talking about looking at further acquisitions? And I guess in that lens, you have diversified now by geography and by season. If you were going to acquire further, I mean, what traits would you be looking at that would fit the ball as to why you would acquire? Hi, Chris. Yes, the balance sheet is in a strong position now. We're mindful that we're not the world is not completely out of the woods with COVID. And we think it's unpredictable in the next 6 months to a year. So that gives us some positive thought in terms of maintaining a strong balance sheet. I don't think anything has changed with regard to the fundamental strategy and therefore the fundamental attractiveness of potential acquisition opportunity. It's worth stressing that we are not acquiring sort of sake of getting bigger or for the sake of delivering on a strategy only. We put scale aside, we want to deliver on the strategy, but only if the financial returns from the investment, whether it be by acquisition or further investment in the current business, need to be very strong and then you have a particularly current demand that you have real margin heroin. So we don't see anything in particular that we would be rushing to make a major investment in either internally or externally. Good opportunity for New Zealand investment to grow the capability and profitability over time of the current business. But we will remain measured, keep our antenna up for opportunity, but we're not rushing out to allocate a whole lot of capital at the moment. Great. And just one final quick one. Any thoughts on rebranding the group? Yes. There are thoughts on rebranding the group. We haven't landed on that, but that's been a subject of discussion at the Board a couple of times. We've had some rather more pressing things just recently to deal with, so that we will come back to that and we will continue to consider that. What do you think? Right. Okay. Yes, I mean, it's probably reasonable to be out there. It's a good idea, yes. And then in particular, maybe just to separate the frame of the group from the band of each operating company. Yes, thanks. To separate Kathmandu, the fact that you diversified now is not really reflected in the name. So look, it doesn't mean you have to change it. I just wondered whether something you're considering, which I personally I think would make sense, but I think it's dropping a bit. Your next question comes from Julien Mulcahy of EMP. Please go ahead. Thanks, guys. Chris, I'm just drilling into the Kathmandu numbers. I mean, the $68,000,000 full in revenue is quite sharp, particularly when you look at Natpak, I know they're a lot smaller, but they had only sort of modest reduction. So do you think you could put a figure around how much you actually lost in rainwear and insulation trials in relation to international people and whether it's more about a market share issue than anything? Yes, I mean Sorry, Chris, to jump in. I mean, you can correct me or add that, Arthur. It's really worth understanding that MAC pack now, other than current MAC pack and Kitna and they are not really comparable in terms of product mix and therefore product use focus. You know that Macpac is the rebranding of all of Super Retail Group, and Way Outdoor and it. Just Rays, sorry. And Rays is very much focused on larger formats, campaign and outdoor, a lot of focusing, a lot of stuff that is quite domestically focused. Of course, Canton do in the period has suffered largely because of the lack of international travel. And I think one thing that's not particularly comparable amongst the 2 is where the stores actually are. And CBD areas have been quite significantly, I think, I think, I think, I think, I think, I think, I think, I think, I think, I think, I think, it's a bit of a retail park. So I think those 2 things, channel mix and product mix are pretty relevant when it comes to overall sales comparisons between Mackpack and Kathmandu in the period. I'm sorry, question, if you will. Yes, no, that's fine. David, I've got nothing more to add to that. I would just like to can you continue to split out the $60,000,000 where the $68,000,000 drop in revenue was in relation to railway insulation. Yes. I mean, as I said, another market is obviously a better market for Canada as well. So, there's a period of closure and that Q3 as well, significant impacts, about 20 April, new stores in that market alone, getting to do. So, I mean, it's I agree that it's largely kind of 3 quarters of the impact. Right. Okay. So I mean like online sales are stronger, but clearly with online purchase, you don't get those add ons. You may have got a few in store. Is that a fair assessment? I mean, we've always got As always, customers in store as well, you can engage customer service point of view to engage the customer. So it's always a good preference to have that customer interaction. And that's healthy, very important for all retail going forward. So for the Cabin Do brand, it's something that's especially in that summer period and that shifting period, it's quite important. Okay. Thanks, guys. Thanks, Chris. Thanks, John. Thank you. There are no further questions at this time. That does conclude our conference for today. Thank you for participating. You may now disconnect.