Victoria (LSE:VCP) — Half-year Report for the six months ended 30 September 2023

0:01 Good afternoon, ladies and gentlemen, and welcome to the VICTORIA PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so, and these will be available via your investor meet company dashboard.

0:32 Before we begin, I would like to submit the following poll, which will appear on your screens now. And I would now like to hand you over to executive chairman, Jeff Wilding. Good afternoon, sir. Good afternoon, and thank you very much to everybody for join joining the call. I think the to before I hand over to Brian to take you through the numbers, there's just a quick introduction I'd like to give about the macroeconomic environment. Clearly, there's very little we can do about that, and that's driving consumer demand for product, obviously, not just ours, but more generally. However, the thing that gives us confidence in the future is demand always recovers, and it recovers sharply. And the reason for that is when a consumers are feeling less confident about the future, have less disposable income, or housing transactions are lower.

1:29 That doesn't mean that as I've said in the statement to the shareholders yesterday, that doesn't mean that the stain on the carpet goes away and the ceramic tile that's cracked in the bathroom magically repairs. And so the moment consumers start to feel confident about the future, they start investing again in their own homes. And the result of that, of course, is that the top line rose very, very quickly. So, therefore, I think the focus should be on the improvement in the underlying in the EBITDA margin, which has gone up from h one last year of 13% to 14.9. The two interesting things about that is firstly on lower revenue. Normally, there's a operational gearing effect that should see EBITDA margins go down.

2:16 The fact that they have gone up and gone up by nearly 200 basis points is an indication of the amount of cost that has been taken out of the business and also the production and productivity improvements that we've achieved on the factories. What this means, of course, is that when revenue recovers and it will or demand recovers, then that EBITDA margin will go up even higher and a lot more of the profit drops through to earnings. Sorry. The a lot more of the revenue drops through to the bottom line. The second thing about that is the EBITDA margin hit 14.9% while we were still undertaking the restructuring projects, which really in only completed in any substantial form at the end of September.

3:02 So we're expecting over the months and years ahead for that EBITDA margin to continue to grow as the full effects of the reorganization of the business goes becomes realized. So with that, I'll just hand over to Brian and he can take you through the numbers. Thanks, Jeff. While there's some executive summary slides on this presentation, I will skip through to the detail.

3:29 So I'll quickly run through the financial highlights and then hand over to Philip who will go through more detail on the on each of the divisions. As Jeff has said, this has been a challenging period for the industry in Victoria, but despite declines in revenue and volumes across all of the businesses despite declines in revenue and volumes, all of the businesses have increased or maintained their gross and EBITDA margins. On a constant currency basis, underlying revenue at EUR $643,000,000 is 14% behind H1 last year and 4% ahead of H2 last year. This is driven by volume declines of 14% versus half one last year and 7% versus H2. Demand in the ceramics business has continued to be particularly hard hit with a knock on impact on absolute gross profit and EBITDA, and Philip will talk more about the market and the actions being taken by management in that division.

4:19 On a constant currency basis, underlying EBITDA of $95,800,000,000 is 0.5% behind H1 last year, but 0.7% ahead of H2 last year. And EBITDA margins were up 190 basis points year on year. The focus of the first half of the year has been to complete the reorganization of BALTA into VICTORIA and to manage the cost base of the business in line with the continuing softer demand for our products. We are particularly pleased with the EBITDA performance in the sulphurian division, which has delivered an absolute improvement in gross profit and EBITDA as well as improved margins, mainly as a result of the restructuring the group undertook in FY 2023. Moving on to the next slide. This is a list of our exceptional and non underlying items. It's probably worth spending a few minutes here just going through them. And just to remind you, these items are either irregular and therefore, including them in the assessment of the business' performance would lead to a distortion of trends or a technical adjustments, which ensure the group's financial statements are in compliance with IFRS, but do not reflect the underlying performance of business in the period or therefore both of those items.

5:30 There are only two of these which relate to cash, the top two, which are highlighted in orange, and that comes to $8,000,000 which we've expended in the year. The rest are noncash items. The cash items are the acquisition and disposal related costs, and this is a small amount that we pay fees to advisers where we have been monitoring the market for potential transactions. The reorganization costs, this is in relation to the integration of acquisitions into our business. The cost this year mainly relates to reorganization of Balsa, and there have also been some of the costs in Turkey where we've gone where we've rationalized the operations there in line with the continuing lower demand. On the noncash items, the acquisition related performance plans, these are the earn out payments that we make on businesses, which we require using that mechanism.

6:19 IFRS requires us to charge these to the income statement when the payments are earned rather than adjusting goodwill. And as these payments are irregular, we believe that they should not be included in underlying performance. Amortization of acquired intangibles, again, will require IFRS to value such items at acquisition and we're excluding them for underlying performance to avoid any potential double counting. And adjusted to the prior year for the unwind of the fair value uplift to acquisition opening inventory. And this is where under IFRS, we have the fair value inventory to close the value, which we sell at the post acquisition. This results in some of the profit, which we realized in the sale of that inventory post completion not being recognized. And clearly, distorts the trends in relation to the acquisition as margin growth in the following year could come about purely as a result of an accounting adjustment.

7:11 We therefore exclude the accounting adjustment from underlying performance. Depreciation and fair value uplift to acquisition property. Property, again, is required to be fair value in an acquisition. And we treat the depreciation of this fair value uplift as non underlying as it does not represent the underlying performance of the business. And the higher amount this year is as a result of the value upwards of the Delta properties, which we acquired last year. The next item to discuss is hyperinflation. We had to start to account for hyperinflation last year for our Turkish operations as a result of the Turkish economy being in a hyperinflationary mode, and that's defined as where inflation over the course of three years is in excess of 100%.

7:58 The accounting requires us to reindex all of the income statement and balance sheet items to a more up to date rate for to generate a notional purchasing power. The reindexation results

8:16 in a net gain to EBITDA of 18,500,000 this year, which we believe does not reflect the underlying performance of those businesses. You will also see that we've excluded the monitoring loss of $4,100,000,000 for finance costs. The remaining items in the table relate to the preferred shares that we have, and these, are all noncash items. Moving on to cash generation on the next slide. We generated from operating cash flow before interest tax and exceptional items just under $50,000,000 for the period compared with just under GBP 40,000,000 in the prior period. We've seen an outflow of working capital driven by the poor demand in the first half, and the businesses are taking actions to release cash and inventory in the second half of the year when we expect to see an improvement in working capital.

9:05 Other items to note on the slide are in interest paid, where the date in which our period end fell this year meant that a portion of the bond interest was not paid until the second half of the year compared to the first half of FY 2023. We expect interest payments for the full year to be in line with FY 2023. We also received a tax refund from the Spanish tax authorities, which resulted in the small net inflow of the income tax line. As we discussed at the year end, capital expenditure will fall in FY 2024 to more normal levels now that the restructuring of the Baltic business is substantially complete. The expansionary and synergy CapEx this year predominantly relates to the movement of Baltic equipment from Belgium to the lower cost manufacturing facilities in Turkey. Exceptional cash items is mainly the payments made from the provisions that we took in FY 2023 for the restructuring of Baltic, and these costs are mainly redundancy costs.

9:56 This slide is a graphical representation of the movements in net debt in the period. We ended the period with net debt of just under $671,000,000 up from $658,000,000 with a marginal increase coming as a result of cash outflows from restructuring of the business, partly offset by free cash flow before exceptional items and the positive FX impact of $12,100,000 on our euro borrowings. All of our debts are long tenured with the earliest tranche for a low coupon compared to current pricing bonds not due until 2026. Finally, for me, moving on to the next slide, we can see that the net debt of $671,000,000 results in leverage of 3.8 times. Management is committed to reducing this leverage ahead of the next round of refinancing by generating cash from operations and sale of noncore assets.

10:45 This includes the sale of surface real estate acquired with Valsa. We completed one such disposal this week with net proceeds of 32,000,000 You will also see on this slide that we had over EUR 91,000,000 of cash, which is in line with the position at the year end. This combined with undrawn facilities at the end of the period means we have significant liquidity of over EUR $250,000,000 serving. I'll now hand you over to Philip to talk more about the divisions. Thank you, Brian, and good afternoon. So in the division, the first division and for the largest division is UK and Europe soft flooring division with a very solid performance with an operating margin of 360 basis points versus the first half year of last year.

11:32 So in the soft flooring, the full focus was on the Baltic integration. So in the meantime, all broadloom activity in Belgium has been stopped. We were still making there about 14,000,000 square meters, and all the production has been integrated in the Wales and the Yorkshire plants in The UK with little to no CapEx. There has been a couple of machine moves, but nothing else. So excess production capacity is sourced in Turkey when needed, and we are fully

12:01 lost about in the in the production plants in in both of the factories which we're having in The UK. We've also ditched some nonprofitable business, and the bulk of product architecture is now redesigned towards more cut linked program service programs. Relocation activity is also showing its first signs of improvement, and we are performing above target as we had in budget. And the much enhanced productivity, the lower production cost, the lower logistics cost, and the improved customer service has contributed to the recovery of the Baltan members. An important observation that I want to make at this, at this stage is that the the medium, and high end UK service driven brands are both selling the cheaper volume and price driven brands.

12:53 The second leg of the soft flooring is then the Baltic production. So we've done quite a bit of rightsizing there as well. The Baltic production footprint continues to be refocused toward the two existing Turkish plants where we're making the rucks and where we're making the yarn. The other hand plant is one of the Belgian plants, has been closed and has been sold in the meantime, and the production capacity has been completely dismantled and has been added in in the Turkish setup. Most of the production activity has also been stopped in Belgium because we used to make that or or we have made that decision because the price of the energy was far too high, and then we've decided to move the production to the Turkish plant.

13:44 Balta now employs 700 FTEs less than in April 2022. Maybe one short word about logistics activity, which is the third leg of of the soft flooring. So this is Alliance. This is over soft flooring and LVT distribution hub. So we have four DCs in UK. We have one in Hemelhamsted, in Hartlepool, in Wales, and in Worcester. Actually, I am in Worcester now, in the warehouse in Worcester. What you see behind me here is some of the 24,000 tolls which we're holding on stock. And from this distribution warehouse, we are sending about 22,000 order lines per week. And this is the service. So we've we've improved the service. We are at about 85% service level now on next day delivery and 95% within three days.

14:40 Then the second largest division is The UK and Europe ceramic tiles. We've seen a much softer demand after last year's massive cost inflation due to the energy and the labor. The absolute EBITDA fell about 12,000,000 versus the half year '21, but relative EBITDA increased with a 110 basis points. The revenue was down from $2.54 to £185,000,000. If you look at the market, then the the year to date market volume is down about 30% in Spain and 19% in Italy. The full focus on margin, and so we've been giving up some market share because the full focus remained on the the margin.

15:27 The exercises which we conducted in that division were focused on trying to reduce the box to some of the value engineering we've done in reformulating the tiles in terms of clay and thickness of the tiles. There was also some continued fine tuning in the hedging policy, which we've done. We've continued to leverage The US distribution and try to take advantage of competitors on competitors by selling more in The US DIY because we have this service outlets in The US, and we've continued the rightsizing operation and reduce the cost mainly in Spain and Turkey. So the current demand softness is being used to refocus the quality and size allocation across the geographical plant network to optimize the cost of manufacturing.

16:17 So we have manufacturing outlets in Spain, in Italy, and in Turkey. And rather than looking at cylinders, so we're taking more of a horizontal look in our approach and try to allocate sizes to kilns across geographies. The Italian plants have been more focused on volume through sales in The US and in the European DIY, whereas the focus in Spain has always been more led towards margin protection with an impact, of course, on demand. Across all brands, exercises have been conducted to focus on working capital through stringent product development and related SKU product architecture. Across the plants, but mainly in Turkey, so some of the older lines have been modballed as part of the restructuring process which we have conduct.

17:11 Third geography is Australia. We can be extremely short about Australia. Very steady business. We've had there with the same almost the same revenue and with the continuous, good solid EBITDA of 12.8%, so which has not changed versus last year. Then last but not least, as a division, we have North America where we have operational excellence projects driven driving the margin expansion. So soft flooring alike, the demand in H One and US has been soft because lots of retailers were destocking at that moment, and overall footfall in the shops was down as well as the consumer appetite online. The EBITDA percentage was good in the first half. FY twenty four was up 500 basis points from six to 11%, albeit it's fair to say that in October last year, we have acquired an extra distributor in Florida called IWP.

18:12 So and then in despite of the the continued West Coast shipping disruption, Cali has succeeded in balancing the inventory levels to meet the demand and maintain the service level. Cali is the Californian distributor, which we're having, which is an online an an online and an omnichannel distributor. Orders have been slow in half year one, but margin have improved due to the product mix which we've conducted. We've also trying to add more product through the pipeline. In the meantime, we have four distribution warehouses in the East Coast if we include the Balta warehouses, and we are realizing a revenue of about $400,000,000 in The US. Brian, this is the overview of the divisions.

18:57 I will hand back over to you now. Thanks, Philip. So excuse me. There are a number of questions which have started to appear on the screen. So I'll we'll try and group them rather than not because there's quite a number of common themes that we're seeing. So in terms of redeeming the preference shares or buying back bonds, in other words, what are we going to do with the capital and the free cash flow that we've got coming into the business? What the the the ask needs to be because we we cannot disclose in advance exactly what the company intends to do, but the the board is alive to the various opportunities we have to deploy capital, and we will allocate the free cash flow in a manner that benefits the shareholders the most. And, clearly, there are a number of options. We could buy back shares. We could buy back bonds.

19:56 We can buy buy back the preference shares. And the decision as to which one of those options or combination of options that we pursue will be taken in the best interest of the shareholders. And the one thing that you need to bear in mind at all times is our clear statement that we intend to reduce the leverage in the business. I've there's a number of questions also about the resignation of Zach Sternberg from the board of VICTORIA. What I can say is there is nothing and we can state this categorically. There is nothing more to it than exactly what was put in the statement yesterday. Zach runs a very large investment fund in New York, and the amount time that he needs to devote to that as the fund has gotten larger is

20:48 he just doesn't have time for outside board activities. However, he's a personal friend of mine, and our family's holiday together, there's been no falling out. There are and he remains a strong supporter of VICTORIA, and he's continues I mean, we'll continue to talk to him regularly as you would expect.

21:12 Do you want to talk about the real quick question on the the the debt figure? Yes. As I mentioned earlier on, we've we've got liquidity of over 250,000,000, and that's pretty much in line with the year end. I think there's a number of questions about the draw on the RCF, and we drew 20,000,000 during the first half, which has been repaid since since the end of the half. We we use that facility for different currencies if we need to to pay euros, we borrow to the RCF because it's an easier thing to do. The other thing that we have, we do have all the facilities around the group. We have overdraft facilities and working capital facilities. There was no significant increase in any of drawings in those over the period. There's a question about when we expect the demand to recover.

22:01 If I if I could predict that precisely, I it it would make my life a lot easier. The key drivers for spending on flooring is three things that we we track. Firstly is housing transactions. When somebody buys a home, one of the first things they do is replace the flooring in the house, and there's a number of reasons for that. But there's a very strong correlation between flooring sales and housing transactions, albeit with a six to twelve month delay. So somebody buys a house, moves, and six to twelve months later replace the flooring. There's a very strong correlation between those two actions.

22:47 So we track housing transactions. The second two factors are discretionary spending. So where the consumers have adequate surplus earnings to be able to spend on flooring. That's the second thing that we track, discretionary spending. And the third characteristic that is useful is good is consumer confidence. As consumers become more confident in their financial situation and the outlook for the world, then they are more inclined to invest in their own property. So, clearly, interest rates are a key factor in all those three items that we look for. And I think you will have all seen in in literally the last few days, the change in center or tone coming out of the central banks about the outlook for interest rates next year.

23:42 So it's my expectation that as the interest rates come down, housing transactions increase, consumer discretionary spending increases, and, of course, consumer confidence goes up. So I think that's those are the characteristics that you should be looking for as well to judge when demand will recover. There's also a question about the leverage ratio that we're aiming to achieve for the refinancing. And I think we've in fact, I don't think I know. We've stated publicly that we're aiming to for two and a quarter times plus or minus quarter return. So quick sorry. To be clear, that's two and a quarter times EBITDA plus or minus quarter of a turn. There's a question there on the the souls of the property. So just to clarify, we we disposed of a surplus property that we have in Belgium.

24:33 This property became surplus as a result of the reorganization when we closed the transaction this week, and it was €32,000,000 that we've we've received as a result. I think there are other properties in the Belgium portfolio that we would look to manage as well. This was all foreseen as part of the acquisition, and I think we've we've already stated to to the market that the the cost of the reorganization of Belgium will be dealt with through the rationalization of the the real estate in Belgium. There's been a couple of requests for me to say what we expect the cash balance to be at the end of the year and also we expect free cash flow. We're not putting a forecast into the market for that. Again, I'll reiterate what we've said in the past.

25:18 We expect our capital expenditure to revert back to a normal level. FY 2023 was abnormal in terms of the amount of growth projects that we undertook there and also the significant spend that we had on synergy projects with moving the belt of part of the belt operations out of Belgium and into and into Turkey. So we're looking at probably 60 to 65,000,000, that kind of range for CapEx this year. The interest expense will be pretty much in line with last year. You can work the tax rate, the tax cash out from the rate that's in the p and l. We expect to see improvement in working capital in the second half. So that's the only kind of guidance that we're giving people at the moment in relation to what we expect to see at the end of the year.

26:14 There's a couple of questions asking about a potential margin loan that I may have secured against VICTORIA shares. So for the avoidance of doubt, the facility well, that was put in place six years ago. It was a two year facility, so it's long since expired, and I have not renewed it. And during the period that the facility was in place with JPMorgan, I never drew the the a single pound, euro, whatever. I never I never borrowed against the shares whatsoever, which is why I allowed the facility to lapse after the initial three year period because I never used it. So to be clear, there is absolutely no borrowings secured against my shares. Okay. The good news is I think we have announced it.

27:06 There was a question on there around the the the volatility of our our statutory number, which I I will provide a more detailed explanation on on the response rather than go through that now. There are a couple of big items, particularly around the fact that we had negative goodwill loss for Palo Alto, which is a quite a large credit, which makes the the fluctuation year on year quite pronounced. But that is one of the reasons why we take these items out of our income statement is because it causes such fluctuations. It is actually then becomes very meaningless to explain the true underlying performance of the business. Somebody's asked whether or not we would consider doing a capital raise to pay down debt. The short answer is I don't don't believe that's necessary, certainly, at anything like the current share price.

27:57 Where we have very we have very strong expectations of strong cash flow and improved earnings in the near term. And the result of that will be that leverage will come down naturally and and both in terms of the leverage ratio and also the absolute number of debt and sorry, the absolute total of debt. So as a result of that, I don't see any reason at this point to do a a capital raise. There are a couple of questions in relation to the f y 24 audits. So we are working with Grant Thornton through the audit planning and also through some work already with CEO in relation to the 24 audits. We continue to work with them. And if there's anything that comes out of any any any work in relation to the audit, then we will clearly update the market on that. But as of the moment, there's nothing we expect to to to work through the whole process with them.

28:50 Someone's asked again about the replacement directive for Zach Sternberg. So we have been in discussions for two or three months looking at potential candidates for not as a replacement, but just to address some of the governance concerns that people have because there are a large number of sorry. As a percentage of our of our board, there are some very significant shareholders. And I know that it would reassure some people that we had an increased number of independent directors on the board. So we are looking at and conducting a search to find some suitable people with both industry experience and also capital market experience that they can bring to bear to help guide the company in the years ahead, and we'll expect to make some announcements on that in due course.

29:56 So, there is a question about have we seen an improvement or worsening of general demand over the last, few months? It's an interesting question. Firstly, because different markets are exhibiting different characteristics as you can see from what Philip took you through with the operations earlier. The US, we are our revenues are up. Our margins are up. The European market where which is primarily ceramic tile business, we see revenues and demand down. The UK, we are seeing recovery in demand. But the interesting thing, if you look at the revenue numbers or the demand for the last eighteen months, so you look at h one last year, h two last year, h one this year, there was a big drop off between h one last year and h two oh, sorry. H one last year and h one this year, but the drop off between h two last year and h one of this year is negligible.

31:01 And what that suggests to me is the demand fell off significantly as you would expect with much higher interest rates and higher energy prices for people to have to cope with, But demand seems to have stabilized at current levels, and there are signs of recovery in some markets. I don't want to get too excited about it too soon. As I said in the letter to the shareholders yesterday, you know, one one swallow doesn't make a summer, but there are some encouraging signs. And, inevitably, as I said, unless people wanna get back to walking around on mud or bare concrete, they they they will inevitably, always, the demand will return. And it's just a case of when. And I've sorry.

31:49 Okay. Yeah. So there's a question on on working capital. The slowdown in demand in the first half, we saw an increase in our inventory. Are, as Philip said, there were actions in place for us to look to release the inventory that we have in the balance sheet and realize cash for that. So that is in all of our objectives for the second half of this year to do that and to make sure that the inventory that we have is now more in line with what we're seeing in the current demand in the market. Sorry. What's that last? There's a question about why we think the share price has fallen. I can be facetious and say because there was more sellers than buyers.

32:41 But the look. There there's been two events that I think haven't been helpful. Firstly, the delay in the accounts and the order qualification has clearly not been helpful. It'll neither of those things have anything have any underlying impact on the on the actual business, but it certainly impacts investor confidence. And we we have done everything that we possibly can to ensure that that never happens again. As you'll appreciate, the board and over 50% of the company, and we are very, very focused on ensuring that the share price recovers. But having said that, I think that was the first factor was the and then secondly, there has been, you know, the macro environment's challenging out there, and I think interest rates have stayed higher for longer than most people anticipated.

33:38 And I think that's damaged investor confidence. That's not particularly a VICTORIA thing that is more a anything to do with home improvements or discretionary consumer spending. There's an there's a question around why do we not give EBITDA guidance? Well, in actual fact, the market consensus numbers for the year is a 187,000,000. This is and when I refer to market consensus guidance, that is the average of the forecast by the three analysts that cover VICTORIA.

34:24 The company itself doesn't make a habit of putting out specific numbers in the market, but there is a regulatory obligation that if we think that number's materially too high or too low, we we need to inform the market. The fact that we haven't seen anything about it means that we are comfortable with them with the number plus or minus a reasonable margin. So as I say, I'll just repeat. The average number the average consensus forecast is 187,000,000 EBITDA for the FY '24. Okay. So I think the the rest of the questions on here are around specifics, which happy to respond things like the movements in leases, which I'm happy to respond to, but in writing rather than take up time in this call.

35:13 So I think, Jake, I think we're done with questions. Perfect. Brian, Jeff, Philip, thank you very much indeed for addressing all of those questions that came in from investors this afternoon. And of course, we will be able to give you back all of the questions that were submitted today just for you to review to then add any additional responses, of course, where it's appropriate to do so. But, Jeff, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great. Yeah. Again, I'll just come back to the fact that the company cannot clearly control the macroeconomic environment, although we're clearly closer to an improvement every day that goes by. So I think the focus needs to be on the fact that the company has materially increased operating margins in h one, and we expect to further see further increases because as Philip described earlier, some of these restructuring projects were still underway during h one.

36:15 So the full effect wasn't seen, so we can expect to see further improvements in margin going forward. And then the second comment is that it's circa 40% of our revenue is gross profit. So as revenue recovers, and I think the analysts have got us at that 187,000,000 of operating profit that they're forecasting for this year. This the average revenue number is 1,300,000,000 a a quarter, give or take. And for every extra 100,000,000 of revenue, 40,000,000 rough figures drops to the bottom line, assuming it's a 40% drop through on GP. And the impact of that, you know, 100,000,000 sounds like a big big number, but in actual fact, it's only a a 8% improvement on on we're we're currently, a little bit less than 8% improvement on where we are.

37:13 And last year, people might remember we turned over 1,500,000,000. So the improvement could be very significant when the demand returns, and return it most definitely will as the macro environment improves. Philip hasn't suddenly forgotten how to make or sell carpet. It's just difficult macro conditions at the present time, causing pressure on the top line. So with that, we'll bring the call to an end. Perfect, Jeff. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of VICTORIA PLC, we would like to thank you for attending today's presentation, and good afternoon to you all.