Earnings Call: Q3 2018

Mar 6, 2018

Hello, and welcome to today's Ashteq Group Plc Results for the Third Quarter. And throughout this, all participants will be in listen only mode. And after this, there will be a question and answer session. And just to remind you, this call is being recorded. So today, I'm very pleased to present Jeff Drabble, Chief Executive and Suzanne Wood, Finance Director. Jeff, please begin. Good morning, and welcome to Ashtead's Q3 results call. On the call this morning are Suzanne, Michael, Will and myself, and we'll be following the usual format. Typically, these are shorter updates, and that will be the case again today as we are aware that it's a busy morning for Los Gatlin. So let's start with the highlights on Page 3 where we've had another very good quarter with continued growth in revenue and profitability. We've seen momentum building throughout the year and this carried into Q3 where the underlying demand in North America again exceeded our expectations. A notable highlight remains our strong margins and cash generation, which enables us to allocate our capital in line with the priorities that we've communicated. In particular, fleet investment has been strong, reflecting the improving demand. Our end markets are good, and we continue to execute effectively on our 2021 plans. And as a consequence, we continue to look to the medium term with confidence. And with that, I'll hand over to Suzanne to cover the financial detail. Thanks, Jeff, and good morning. 3rd quarter results for the group are shown on slide number 5. We were pleased to report another strong performance led by a 24% increase in the group's rental revenue at constant rates of exchange. Our 45% EBITDA margin and 25% EBITDA margin continued to be strong. And as a result, the group's underlying pre tax profit increased by 26% to £205,000,000 Adjusted earnings per share grew by 52 percent to 32.2p benefiting principally from a lower effective tax rate, which I'll touch on later. And in the Q3, currency was a headwind of £19,000,000 due to stronger sterling. On the next slide, we've shown the group's results for the 9 months. Rental revenue increased by 21% and despite having opened 51 Greenfields and completed 10 acquisitions, margins remain strong due to a continuing focus on drop through. EBITDA margin was 48% in the 9 month period and our operating profit margin was 29%. Underlying pre tax profit increased by 24% to £742,000,000 and earnings per share grew by 30% to 102.4p. Turning over now to Slide 7, we'll review the divisional numbers. And just as a reminder, following the acquisition of CRS in Canada, we're now reporting the results for Sunbelt U. S. And Canada separately. Jeff will cover Canada's performance in his section. So let's take a look at the results for Sunbelt U. S. Rental revenue in the U. S. Grew by 20% in the 9 months as Sunbelt continued to benefit from generally strong markets and of course to a lesser degree the hurricanes, which we discussed with the Q2 results. Both EBITDA and EBITA margins remained robust in the U. S. At 50% and 32%, respectively. On Slide 8, we've shown A Plant's 9 months results. Rental revenue increased by 14% as compared to last year. This was a slightly lower pace of growth and at the half year as we passed the anniversary date of certain prior year acquisitions in the quarter. And while margins were slightly lower, a 36% EBITDA margin and a 16% operating profit margin represented a good performance in a competitive market. Turning to Slide 9. Here we've shown the group's cash flow for the trailing 12 months through January. The strong margins we discussed earlier is cash flow from operations of £1,700,000,000 giving us substantial flexibility to operate within our capital allocation framework and enhance shareholder value. More importantly, however, our free cash for the trailing 12 month period was £430,000,000 On Slide 10, we show the strength of our balance sheet. Leverage at 1.6 times remains within our target range and the second hand value of our fleet exceeds our net debt by £1,500,000,000 The weighted average maturity of our debt is 6 years and our weighted average interest rate is 4%. So as we highlighted last quarter, we have a high degree of financial flexibility and we anticipate a number of years of earnings growth and significant free cash flow. This allows us to continue to invest in long term growth while enhancing cash returns to shareholders. And finally, on the next slide, a few comments on U. S. Tax reform. We gave our best guidance on this in December and I can now fine tune that guidance based on the passage of the final bill. Because the new corporate statutory rate of 21% was effective from January 1, there will be a partial benefit in the current fiscal year. We now expect our fiscal 2018 effective tax rate to be 31%. In 2019 and thereafter, we expect an effective rate of between 23% 25%. The lower statutory rate combined with the full cash tax rate. We anticipate a cash tax rate of around 8% for the current year and 10% for next year. Thereafter, it should move to the mid teens and then ultimately trend upwards towards the new effective rate of 23% to 25%. However, as you're aware, these figures are a bit subjective as they will be sensitive to the level of capital expenditure in any given year. Additionally, the group has also benefited from the U. S. Element of its deferred tax liabilities being remeasured at the new rate of 21% rather than at 35%. This resulted in an estimated reduction of £397,000,000 in our deferred tax liabilities with a resulting one off non cash exceptional tax credit to the income statement. Please bear in mind that this is an estimate and we'll refine it further to reflect our final year end results. That concludes my comments. And so I'll hand it back over to Jeff. Thanks, Suzanne. So let's start our review of the operational performance on Page 13 by looking at Sunbelt's revenue growth, which as I said during the highlights, continue to exceed our expectations. What stands out for me is the momentum that has built throughout the year in organic growth, which you can see increased to 18% in the quarter. Bolt on growth at 5% remains consistently strong and therefore all elements of our 2021 strategy continue to deliver as we gain market share. Turning to Page 14. And we continue to benefit from hurricane activity in Q3. Year to date, this accounts for $75,000,000 to $85,000,000 of revenue. The benefits will continue to moderate in the 4th quarter with the final contribution likely to be around $100,000,000 This demonstrates both our responsiveness and the growing impact of our specialty businesses. It's been a particularly strong performance by Power Generation, which continues to deliver strong revenues in areas such as Puerto Rico. What's also been notable as we move through the year is the general market improvement, and our underlying growth is now around 18% to 19%, not the 15% we reported earlier. Turning to Page 15, and let's look at the impact on yields. We faced some tougher weather conditions in December January and therefore saw less transactional business. Our monthly mix of business hit a record 73% and was a negative headwind to yields. Despite this, our strong rate environment and a good product mix where we had the 1st good heating season for a while resulted in an encouraging plus 3% yield in quarter 3. As always in winter, there's lots of moving parts. But the real summary is that the rate environment remains positive as we head into the important spring season, and this combined with strong volume results in a positive outlook on revenue growth. Turning to Page 16, and you can see the impact of all of this on the profitability. Dollar utilization in our same stores in Greenfields remained strong at 55% and drop through is a very healthy 54 percent. There is inflationary pressure in today's markets, particularly when you are supporting such strong growth. However, whilst there may be some timing differences, I am confident that the rate environment will allow us to pass on any pressures. And we therefore anticipate that our margins will remain strong as we continue to execute well. Moving to Canada on Page 17 and continued progress in this exciting new market. Obviously, the headline data is distorted by the acquisition of CRS. However, as you can see, pro form a growth in both Western Canada, our legacy business, and Ontario is very strong. It's 16% and 23%, respectively. We recently had an incredible conference in Washington, D. C. Where we had together 2,500 colleagues from both the U. S. And Canada. The scale and quality of the newly combined Canadian team whose meeting kicks off the whole event has reinforced our confidence in the potential for Canada, and we will continue to invest accordingly. Turning over to Page 18. As Suzanne highlighted, A Plant mapped a number of acquisitions in the quarter and hence the changes in volume growth and yields relative to the 1st two quarters. Airtland continues to see good year on year growth, but the outlook in the U. K. Is likely to be a slower pace of growth than we have been enjoying. Turning Page 19. We continue to support our market share gains with improved fleet investments. You will recall that we increased our capital guidance in December and we now expect to spend at the upper end or just above this range. These later fleet purchases will position us well for the new financial year and the start of the busy season, irrespective of whether they land later this year or the very beginning of next. And as a preliminary guide, we expect to spend similar levels of CapEx again next year. This is based on supporting growth in line with our 2021 plan. As always, however, we will utilize the fact that our spend is in small increments and on relatively short lead times, reflects to the needs of the market as we go through the year. And moving on to Page 20. In addition to our fleet investments, our strong cash generation allowed us to spend £315,000,000 on bolt on acquisitions and a further £100,000,000 to date on share buybacks. As Suzanne highlighted, this was all achieved while staying well within our leverage guidance. So we continue to grow responsibly. You'll see from the press release that we completed a number of small bolt ons just after the quarter and we continue to have a good pipeline and anticipate further transactions in the coming months. As a consequence, we will give further guidance on the buyback program at the year end when we have a better idea of the scale of these M and A opportunities and the fleet requirement for organic growth. So to wrap it all up, as I said at the beginning, I think the message is a pretty simple one. We're performing well in support of markets. Our strong margins are generating significant cash and we are allocating this cash in line with our capital allocation priorities. This in turn continues to drive enhanced shareholder value. We've carried on with momentum into Q4, so we expect a strong finish to the year despite some currency headwinds. Most significantly, all elements of our 2021 growth strategy continue to perform well. And as a consequence, the Board continues to look to the medium term with confidence. Before we move on to Q and A, I'm sure you'll have seen our release today that Suzanne is stepping down as Finance Director. Of course, everyone on this call will know Suzanne and just how she has contributed during the period of unprecedented growth and success for the Astead Group. On a personal level, I'd like to thank her for all of the support over the years. Suzanne, it's been a blast and we all wish you the very best for the future. We also announced this morning that Michael Pratts who you all know well is succeeding Suzanne. Michael has worked alongside us all for many years and therefore, it will be very much business as usual as we execute on a well established succession plans. So congratulations, Michael. I wish you all your best in your new role, although you do have a tough act to follow. And with that, Hugh, let's move on to Q and A. Thank Our first question is over the line of Peter Tester. Hello? Hello, Peter. Okay. Hi, there you are. Yes, now I just wanted to And also when looking at the EBITDA margin sort of 48% against the low 50% s before, whether that you mentioned earlier cost timing, also didn't know whether there's been a different timing of profit on sale of assets? Thank you. Yes. Okay. Well, the rate environment is positive across both general tool and specialty. The rates have held up well through a difficult winter. So as we head into the spring season, we are feeling good about the ability to maintain and improve rates during the season. There is some cost inflation. There's no getting away from the fact that there is some cost inflation, and therefore, there will be some timing differences. Typically, we get the majority of our rate improvements in sort of the April, May, June time horizon. It will be important that we pass those pressures on for the start of the new financial year. And we'd expect that to be the case given how well they have held up during what has been a fairly difficult season. So the yield environment, the plus 3% is driven by basically rates were up 3%, which is why yields were up 3%, and there was a compensating balance on the 2 other drivers of yields. So there was a negative headwind in terms of the proportion of transactional business. But when the weather is terrible, nobody is doing daily or weekly transactions. So it's always the case that you get less transactional work when there's snow on the ground. Having said that, what we did do is we had a very good heating season, not having had a good heating season for a long period of time. And given those are particularly high dollar utilization of products in the season in which they rented, that compensated for the volume mix. So the 2 structural changes meant yield, to all intents and purposes, reflected rate. That's great. And I thank you very much. And also thanks to Suzanne for a great experience. Thank you, and best of luck. Thank you. Okay. We now go to the line of Andy Murphy at Bank of America Merrill Lynch. Please go ahead. Your line is now open. Open. Good morning, Jeff. Good morning, Susan and Michael. Just one sort of general question really. I mean, you touched on it in the last answer. But can you just talk us through labor costs in particular as to for what characters that labor costs are going out, how important or what impact that has on the business? And whether there's any other aspects outside of labor, whether it's fuel or other issues that are applying a little bit of pressure at the moment? Yes. No, I mean, there's no look, let's be clear about this. And I think it's something that we should reflect positively over the medium term rather than negatively in the short term. And the positive thing is the U. S. Economy is incredibly strong, as referenced by our ever improving demand through the year. And the outlook, particularly with the encouragement from the tax breaks, remains very, very strong. Now within that environment, resources can become stretched. And one particular area of that is in skilled labor. It's something I think we've been highlighting for quite some time. I think it's caught up with others over recent quarters. So yes, there is significant wage inflation around scaled laters. And by significant, I'm talking 5%, 6%, 7%. Now that is creating an inflationary environment. We have a strong rate environment. Our margins are high. Therefore, we ought to be able to pass that on as we go through the spring summer. But there is there are there will be timing differences, some of which we've seen in Q3, some of which you will see in Q4, and I would expect them to start to mitigate as we go through the summer. But yes, there's issues relative to where we've been historically in the most recent years on fuel. But also, when you have a shortage of labor, you also increasingly have to outsource certain activities. So for example, our outside haulage costs more than using our own drivers and our own trucks. If we can't get drivers and if demand is above expectation, we're using outside haulage, too. So there's clearly an inflationary environment out there. Everybody is recognizing that. And it just needs to find its level as everybody passes it on. It's a strange but not surprising consequence, which I've seen over the years. It's easier to get rate improvements in an inflationary environment. And that's what we have. But remember, it's inflationary because there's tons of volume out there and the economy is very good. Great. Thank you very much. We now go to the line of Justin Jordan of Jefferies. Please go ahead. Justin, your line is now open. Thank you. Good morning, everyone. I just want to focus on Slide 15 for a second. I think, Jeff, you talk about the underlying rental revenue growth now being sort of whatever 18%, 19%. Yes. Is it that essentially that confidence in end markets that's driving the sequential improvement in yields, so yields gone from minus 3, 2 quarters ago to plus 3%. And I guess obviously, pull through in Q3 is what it is, but it's only your lowest profitability quarter for the year. I guess, can I give some sense for you of where we are in February in terms of rental revenues and just your confidence otherwise in terms of the rate environment, the calendar rating overall as we get into more impactful quarters going forward? Yes. Look, you're absolutely right, Justin. Q3 is always a messy quarter. You've got the cost of dealing with weather when we've had locations that have been closed due to the weather over a period of time. And then you've got the extra benefit of things like good heating. So Q3 is an unusual quarter. 48 percent EBITDA margin for the quarter. 3, if you were to look back historically, overall results is not an uncommon EBITDA margin for us. So it's typically a quarter where drop through can be a little more difficult. If you turn to Page 14, you can see that February continued on very well. Our revenue growth in February year on year was around 21%. So we continue to see strong free ton rents. And those levels of demand have held up as we got into the early part of March, too. A characteristic of this year has been we get these stats every single day. The consistency of the year on year improvement in terms of volume has been started. We keep expecting it to go down as hurricane activities mitigated as we lap M and A and tougher comps, and it's been remarkably consistent. Rates have held up well through, as I said, through January February. We so we go into the spring season with ourselves performing well from what we can see from our listed peers performing well, from what we can hear from feedback in ARA a week or 2 ago, the industry generally performing well, but everybody equally recognizing there's inflation in the system. And therefore, we anticipate a good rate environment going into the start of the New Year. So we expect a good start of the year from a volume perspective. And in no circumstance could there be a pause in the growth of our margins? Yes. Do we think we've peaked from a margin perspective? No. Okay. Thank you. And just in terms of M and A outlook, obviously, you've been quietly doing a number of bolt on transactions. You've done, I suppose, some mid sized transactions in things like CRS and Pride in the past. What's your sense of the M and A outlook? Are valuations realistic or are vendor expectations moving up with an improving economy? I would have said multiple expectations remain broadly where they are. Have it ticked up a smidgen? Yes, but we're talking about a smidgen. But I believe there's a better population out there because I think that as time has gone on, if you look at the performance of both ourselves and our better peers, we have significantly outperformed the market. I believe the consolidation between the 1 or 2 larger players has become inevitable. And therefore, the midsized players, you mentioned people like Pride and CRS, have many of them have come to the conclusion that there is an inevitability of this, and therefore, they are more willing to have a discussion. We continue to have lots of discussions. The ones you see that we do are a very small proportion of those who we have discussions with. And it seems to always be the way that they come in little clusters of activity. So there was nothing in Q3. Then there's a little cluster just after this quarter. I think towards the end of this quarter or the very beginning of next quarter, there appears to be a little cluster coming along, too. So we think that our long term strategy of focusing on organic growth in greenfields but supplementing with bolt on acquisitions is a strategy which still has multiple legs left in it. And it wants to be one of the it will be one of the key topics when we have our Capital Markets Day in April. Great. Thank you very much. Okay. We now go to Steve Wolf at Numis. Please go ahead. Your line is now open. Good morning all. Could you just touch on Canada for me please, just opening plans and sort of level of CapEx you'd like to deploy into that market over the next 12 months if possible please? Yes, Steve. I think you've seen that with the underlying growth being 16% and 23% in Canada, we've got very good momentum. As I said, we were all together in D. C. With the sort of the new combined team, our legacy team and some of the guys from CRS 2, 3 weeks ago. And the enthusiasm and the energy and the opportunities which that team relayed to us was very, very clear. So I think we wanted to finish off this year clean with how we had laid out CapEx previously. By the time we get to June, we will have a new CapEx schedule, which will lay out the plans for Canada. However, a bit like in the U. S, we would expect somewhere between double digit and low teen growth from an organic perspective, and we are proactively looking at further bolt on acquisitions in Canada, too. We believe it's a very good opportunity for us. It's a market where some of our competitors have had a disproportionate market share over the years, and we see a market that is very accepting of a strong new participant. And therefore, I think it will be an area where we will see significant growth. I said in December, I'll repeat it now, I think we're going to be on an accelerated curve to make the Canada at least the size of the UK business. I'm just trying to count the dots there. We're looking at the $50,000,000 level on that on Slide 17. Yes, that would be about right, dollars 30,000,000 which we added with CRS. So look, you can see we're still in a relatively narrow geography. There is filling out to do there, but there's a real shortage of specialty businesses. So you'll see us doing some specialty locations. And whilst we're strong in Ontario, we're weak in the Greater Toronto area and you will see us targeting there also. So the businesses we bought were fantastic businesses, but typically, they had a narrower range of fleets than we have. So you're going to see a combination, Steve, of us filling out the volume in the dots that we've got because we've never bought CRX with 13 locations and it has slightly less seats than Pride had in one location, which gives you the idea of the leverage of organic growth in the existing locations, but we've also got to add in a lot of specialty too, and we've got to target downtown Toronto also. That's great. Thank you. So you will continue to see significant investment in Canada. The key to going into a new geography is that we started off with a great acquisition on the West Coast where we built the team. I'm delighted with the quality of the people we have acquired in the market position. We've got CRS. The integration between the two has gone well. They've moved under our IT system now, which gives them a lot more visibility. So now we have that foundation in place. There's no point just spending dollars on fleets unless you have that platform and infrastructure. And I'm very, very confident at the ability of that infrastructure now to take further investment. We're now at the line of Andrew Nussey of Peel Hunt. Please go ahead, Andrew. Your line is now open. Yes. Good morning, everyone. Remaining question from me is actually on the UK. Just picking up your comment, Jeff, on the slower pace of growth, was that relative to the previous quarters given the M and A impact? Or is that a changing view on the U. K. Market as a whole, please? No. No, it's predominantly was a one to say, look, we've had M and A fueled growth. We are now going to be delivering organic growth. We believe we can continue to grow in the U. S. For the end sorry, in the U. K. But the pace of growth will be slower than either the U. S. Or Canada given the relative state of and strength of the economy. So we continue to anticipate growth in the U. K. As we leverage our market leadership position, but it will be both lower than previous M and A fueled quarters in the U. K. And lower than Canada or in the U. S. S. Perfect. Okay. Thank you. I'll now open the line of Raul. Please go ahead, Rory. Your line is now open. Good morning all. Thanks for taking my questions. The volume growth is really very impressive. I wanted to ask about any structural penetration changes you've seen following the hurricane and that kind of thing. Is there any change in the types of customer or inquiry you're getting and how you talk about that structural revenue growth at the moment rather than just the cyclical recovery? Yes. It's a good question. It's a terrible thing to say about such a terrible natural disaster as a hurricane. But what a hurricane allows us to do is fully demonstrate the range of our capabilities and be that our technical capabilities, our logistical capabilities or the range of fleet that we have. So you see the hurricane activity typically goes to nonconstruction customers. So it's retail stores, it's restoration remediation, it's convention centers, old people's homes, hospitals. So from a broader facilities management and backup contingency planning perspective, it does we do find after every major event in a geography, our market share increases, and it increases outside of our normal construction customers. And you can see that again now. So if you look at this power in Puerto Rico, we are dealing with major logistical events managers who are then performing in Puerto Rico. What an event like this does is to show them the breadth of our capability. So yes, I think you're right. I think it does change the complexion of our demand because historically, we sort of tracked what's happened to the market share post hurricanes in other geographies. And that level of business with people who perhaps haven't contemplated rental to quite the same degree definitely changes when they have to rely on us in extremes. In terms of that growing complexity and breadth of your customer base, obviously, you've got excellent systems in place already. But do you think there's does that start at kind of a lower drop through rates or anything like that? Because obviously, it's you haven't quite got the density maybe in this rate in terms of customers? Yes. No, I think in the early days, there's no question that is true. So for order for us to do something like the Puerto Rico, even some of the things we did in Texas and in Florida in order to perform the first time around where shipping is, I think we showed in the last slide, trucks from halfway around the country in order to make it happen. Now what we will do is reinvest in that area fleet and we will have greater local capability. And as a consequence, yes, there is no question. The first experiences in that work, whilst profitable, are not as highly profitable as where we have a well established infrastructure, of course, that's true. Okay, great. And Jean, on this side of that equation, has the demand for fleet sparked any new entrants or any competitors pushing to get more fleet in? You talked about inflation obviously being the result of healthy demand and limited supply. Will broader supply start increasing or is it just not kind of just not getting to the customers that you're getting into? Well, I think it's a case of not getting into the customers. I mean, there's always going to be demand. I would fully we've been talking about this a lot recently. If you look at the 5, 6 and 7, there was a huge wrap of new businesses turned up in America, almost all, only doing aerial work platforms, all being subsidized by the manufacturers. The manufacturers got killed during the last downturn because they were putting these things out on leases where the only recourse was to hand back the keys, and they suddenly got stuck with all these feet that they thought they'd sold, but they haven't really sold. And they were just getting the keys back for used equipment. So we've seen very little of that. I can't think of anybody mentioning it to me in the U. S. At all. As it happens, 1 guy has come into the market in the U. K, which is a bit of a surprise. But the fact I know about it is it's just 1. So no, there hasn't been the same level of new entrants. Now will the smaller guys start to invest more given the strength of the U. S. Economy? Of course, they will. But if you look at the platform and scale that we've got now in a growing market, do I think they will grow disproportionately? And do I think it will massively change the supply and demand dynamic? I don't believe so. We think about it. Okay. I know we've had false dawns about what's been happening in the market for about since about 2010 now. Between 2010 2018, it's all kind of worked pretty well with the exception of a small bit for a year because of oil and gas. So the discipline in the marketplace is has gone well. And I think how the people like ourselves in United have differentiated ourselves with a big range of customers, Even if the small guys buy fleet, they're really not going to you're not going to win a lot of the customers who we now have won, given the scale and breadth of our fleet and our technical offering. But of course, people yes, Rory, does everybody spend more in a good times here and is there always a bit of inflation in good times? Yes, of course, there is. But does it get out of hand? Not that we have seen to date. Okay, great. Thanks for the answers. Okay. Before going to the next question, which is Edward Statham at Redburn. If anyone has any further questions at this stage, please do press 0 and then 1. Sir, Edward, please go ahead. Yes. Morning, guys. 2, please. In terms of the could you give us an update on your technology and the rollout there? And are you seeing better uptake from customers depending on the duration of rental or the product mix in terms of specialty and general equipment? And the second question is, can you let us know if that data is available, what percentage of branches are now in clusters per your sort of company way of describing that? I have no idea. I think we can get back to you in terms of the number of stores that are in clusters. I'm sure we've got it in the previous slide somewhere and I call I just have no idea. We can get that data for you pretty easily. In terms of technology, yes, look, there is a continued uptick in the technology, and the technology continues to evolve. In my opinion, it's one of the great differentiators. There's this big debate going on in the U. K. About productivity. And where I think people miss the point around productivity is the fact that in today's world, what you have to do is make your customers more productive. You have to make yourselves easy to do business with. We have been investing in a significant physical platform, be it locations or fleet. And now what we have to do is make it easy for people for whatever their needs, wherever they are to transact with us, and that's through technology. Again, it's going to be a significant part of the Capital Markets Day in April. And whilst I'm sorry, I don't know the number, it is undoubtedly true that what has become clearer over the last 2 years as we've rolled out our 2021 plan is the fact that the advantages of clusters either in terms of the breadth of customers we have, the pace of revenue growth or the margins we deliver are very, very apparent. Like I said, we will Susanne or Mike will get you the cluster data as soon as possible. But yes, technology and clusters are an integral part of our model going forward. The final question in today's call, can I please pass it back to you for any closing comments? No, if that's everybody done, as I say, I know you have a busy morning. Thank you for your continued interest in Astrid. And once again, for Suzanne's last call, I'll leave the final words with Suzanne. Yes. Thank you for that, Jeff. I appreciate the kind words earlier and I just want everyone on the call and Jeff to know that it's been my great pleasure and honor to serve the company for a number of years now and I appreciate all the support I've been given and hope that I get to speak to a number of you on the call over the next few weeks. Thank you very much. Okay. This now concludes today's call. So thank you all very much for attending. And you can now disconnect your lines.