Pets at Home Group Plc

All right. Good morning, everyone. And welcome to our full year results presentation, where Mike and I are going to take you through how far we've progressed this year in building our growth platform for the future. You'll remember that this time last year, we shared a refreshed vision for the business. And one year on, that strategy remains clear and unchanged. We are a truly purpose led business. Creating a better world for pets and the people who love them drives everything we do every day and unites every one of our 17,000 colleagues. Now, the first part of that purpose, creating a better world, reflects our commitment to making pet care environmentally sustainable through, for example, our focus on lower carbon proteins, reducing packaging waste, lower flow anaesthesia or renewable energy. The second part of our purpose for pets and the people who love them encompasses our mission to improve the life of every pet in the UK by delivering the highest clinical service and product standards for the pets that we care for. By being a leading advocate for pet welfare and by being the biggest grant maker to pet charities across the UK, And that is why seven times more customers trust us to care for their pets than anyone else. It also reflects our commitment as the UK's largest employer of pet care talent to providing inclusive opportunities and developing rewarding careers across our sector. Now, this purpose underpins our vision to build the world's best pet care platform. Our platform will be integrated omnichannel and consumer centric. Integrated means bringing together our unique brand of products, services and advice across nutrition, accessories, preventative and curative health care, grooming and well-being. so consumers can access everything they need to care for their pet through our platform. Omnichannel means allowing consumers to seamlessly move between the physical and the digital. Our face-to-face assets, pet care centres, practices, green rooms remain the bedrock, but around that we'll wrap virtual consultations, telemedicine, digital advice and support, and seamless click and collect and e-commerce. so that customers can access the best care for their pet through whatever channel works best for them. And consumer-centric means using our data and scale to give customers an unrivaled experience, anticipating their pet care needs to serve up exactly what they require when they need it. And as we build this world-leading pet care platform, we will deliver differentiated economics over the long term. First, by being integrated, by delivering product services and advice on a single platform, we deliver significant economies of scope. We can do business better and cheaper because we do more than one. For example, by sharing category expertise, speeding up time to market for innovation or amortising our digital investment over a larger revenue base. Just give you an example of that in our green rooms. They're often located on a mezzanine in store, benefiting from shared building costs and zero incremental rent. Our customers are largely acquired at no incremental cost through our puppy and kitten club. Our colleagues in those green rooms are often drawn from our pet care centres with no incremental cost of recruitment and providing career development opportunities for our people. Having vets on site means consumers are much more comfortable leaving their pet in a green room, which no one else can match. And when the pet groom is done, the consumer will often buy a little treat for their pet on the way out, driving our retail business. So you can see why we can offer that business better and cheaper than anyone else. And that's true, of course, for our retail business, our vet business, e-commerce. By having them all together, we drive significant economies of scope. Second, being omnichannel gives us significant economies of scale. Savings from leveraging our physical estate for click and collect or the cost synergies we generate by aggregating our veterinary support services are clear. But we also have a different mix of skills and talent, which means we're able to give the right task to the right colleague at the right cost. driving productivity for example our vet nurses referring nutrition consultations to one of our highly trained retail colleagues means they can provide that service better and at lower cost and it frees up our clinical talent to do more curative and surgical procedures third Using our data, coupled with our insight into the pet owner bond, means we can provide an unrivalled experience, fuelling consumer and revenue growth, particularly through share of wallet. By making things easy and seamless, we will drive cross-sell, we will drive upsell, we will drive subscriptions and we'll drive lifetime value. Our National Pets branding gives us significant marketing efficiency and effectiveness with a halo right across our services. Our recent All for Pets campaign, which I'm sure you've all seen, encompassed grooming, vets, retail, products and services, all in a single 30-second spot. So, you can see how our integrated, omnichannel, consumer-centric platform will leverage our scale, our assets, our data, our capabilities, and our intimate understanding of the pet owner bond to deliver a service that no one else can, and in doing so, create sustainable, competitive advantage. So, let's now move to look at 2024. 2024 was a pivotal year for the business as we delivered the key projects to support our strategy. We launched our new DC in Stafford, an enterprise grade DC that will support our growth ambitions for the next decade. It is now supporting all deliveries to store with structurally improved record availability. And we'll move the final element, our online business in the coming year. We fully migrated to our new digital platform, including a new website, an app to join the colleague device. This is the culmination of a multi-year project built on best-in-class open source components, integrated in-house, which will enable us to iterate and improve in the future to meet the inevitably changing needs of the consumer and the rapid advances we're currently seeing in technology. We continue to invest in our physical assets as we committed to do. We opened five new pet care centres, three new vet practices. We refitted 41 of our locations and extended 26 of our vet practices. And we made great strides in winning clinical talent as the attractiveness of our JV model continues to gain traction. We reduced the number of clinical vacancies by over 40%. We doubled our grad scheme. We attracted new, experienced talent. And importantly, we retained and grew the highly skilled vets and nurses that we already have. We relaunched our brand, bringing together all of our services under one clear consumer brand, and we've already rebranded 55 of our locations. This has been really well received by consumers, by colleagues and by partners, and we've seen a positive trajectory on all of our brand metrics. Innovation is critical to driving premiumization, humanization, and industry growth. And as the market leader, we set the agenda. In FY24, we started to drive an exciting pipeline across food and accessories through exclusive partnerships and range expansion, and our own super brands led the way. We've responded confidently to the CMA review of the sector, taking the opportunity to highlight the uniqueness of our model and the importance of our growth strategy in bringing new sources of capacity and competition to the vet sector. And we've made significant progress on our sustainability agenda, almost doubling our diversity participation continuing to reduce our carbon intensity and remaining the biggest supporter of that related charities across the UK, donating almost £10 million this year alone. Now, strategic progress of this magnitude is not easy, but businesses that do hard things thrive because they are difficult to follow or beat. And I'm really proud of how our people came together to deliver multiple complex projects against the challenging and volatile consumer backdrop. So as we exit 2024, we have delivered the key building blocks of our strategy. We're beyond the point of peak investment, we're beyond the point of peak execution risk, and we're well positioned to deliver our growth ambitions. And we delivered a resilient financial performance. We are now a 1.9 billion consumer revenue business, having grown sales in the last year by 7%. We carefully managed our business to deliver underlying PBIT of 132 million, not quite the flat performance we originally targeted, but down just 3% against a challenging backdrop. And we made significant progress on our strategic KPIs. We grew our active Pets Club membership to 7.8 million. We increased average consumer spend to £178. That's a key share of wallet indicator for us. And we grew our subscriptions business by a third and clinical talent by 10%. So we've delivered successfully year one of our strategy, building the foundations for long-term growth. This year, FY25, we'll see a return to profit growth as we begin to benefit from the significant investments that we've made. We continue to leverage our volume and growth and scale, and we remain laser focused on managing our cost base. And in the medium term, we're positioned to deliver attractive growth through sharing the benefits of our investments and scale with consumers to continue to win share in a structurally growing market. Our medium term framework is unchanged. With the market and structural growth of 4% over the medium term, we will outperform, gaining share to deliver an expected revenue growth of 7%. And this will translate to PBIC growth of 10% with improving cash generation as our capex normalises as has already begun to do in future years. Over the past year, we've returned over 100 million to shareholders through dividends and buybacks, and our future growth will underpin continued rewards. So, as we look forward to FY25 and beyond, we're very well positioned to deliver against our ambitious strategy. With a clear market leader, with a unique business operating in a very attractive, structurally growing market. And that market growth is underpinned by three trends. Premiumisation, humanisation and higher penetration, where we've now stabilised at a significantly larger population of pets in the UK, with 23 million cats and dogs versus 18 million pre-pandemic. And we have a unique business with scale and credibility across all key verticals and plenty of headroom to grow. We have a leading position in premium food with close to half the premium market. And we're the key partner for brands in the sector as our expertise and service grow the market and support innovation. With a 30% market share in accessories, we're the leading player, but we've got plenty of headroom to grow as we bring new innovation to bear and benefit from our new digital platform, to grow online participation. And thanks to the stellar growth we've seen over the past year in vets winning significant share, we are now the clear number two in the market with consumer sales exceeding 575 million pounds. Our customers remain sticky. Their behaviour is very predictable and resilient. Pre and post pandemic cohorts demonstrate highly similar behaviour. And once we win customers, their behaviours become embedded and established, giving us important visibility of lifetime value. so we can hone and effectively tailor our investment in consumer acquisition and retention, supporting by the leading analytical data capability that we've built in recent years. Now, our success over recent years, taking advantage of the UK pet boom through successfully recruiting so many new pet owners, means we have a huge embedded potential in our customer base. In the chart on the left-hand side, you see that bulge cohort of new customers that we've run. And that will track right over time and will benefit from the lifetime value of those customers for many years to come. Now, while the replacement rate on the far left of the chart isn't right at those peak levels, it's also much higher than pre-pandemic, as those new puppy and kitten cohorts are sustaining a population of 23 million, a new stable high. This also explains why we're seeing more muted levels of market demand at the moment. In the graph on the right, you can see how the large pandemic cohorts are dropping down that smile in early years spend into that year two and three trough and being replaced by relatively smaller new cohorts at the top of that smile. Now, this market normalisation is a temporary impact. We should be through it in the coming quarters and we expect growth to then return to more historical levels with obviously, though, a significant opportunity to come as we serve those bulge cohorts later in life when vet spend increases. Growing share of wallet remains our greatest opportunity over and above the already embedded lifetime value of the consumers we have. And given our market leadership and scale across multiple areas of consumer spend, we have the best view of what consumers spend on their pets and we know how to drive engagement. We know that as customers engage with more of our products and services, we win more of their share of wallet. For example, being a vet client, buying our own brand food, using our digital channels, using the green room, buying accessories, all of these help win spend from other providers and consolidate it onto our platform. So while the average customer spends £178 a year with us, up from 162 years ago, the most engaged customers spend closer to £1,000. Every element of our integrated, omnichannel, consumer-centric platform is specifically designed to make it easier, more enjoyable, and more rewarding for customers to spend their pet care wallet with us. Now, of course, we're focused on winning new customers so they can benefit from that offer. But our opportunity is underpinned by deepening our relationship with the customers that we already have. And of course, deepening those customer relationships and the key to winning their share of wallet is our digital and data platform. Our digital and data investments touch every part of our business. We're connecting our colleagues in store through the ACE device, our customers through the app and website, and our vets through the practice management system to a single customer. digital platform and that will enable us to connect the physical, the hybrid, the virtual and the digital worlds so we can leverage our insight and personalise every single interaction with our customers and our clients. In 2024, we made a significant leap forward. with the launch of our digital platform to consumers. And today we have 100% of retail shopping transactions now through the new app and website. And we've started to leverage our data in real time. For example, our recommendations and personalized marketing are now being powered by insight from the 85% of transactions that happened in store, not just the 15% that happened digitally. We've also selected ProVet for our practice management system partner, which will represent a significant improvement in the efficiency and effectiveness of day-to-day work in practice for our clinical teams. Importantly, it also moves us to a cloud-based architecture, allowing us to connect vets into that single digital platform. We'll deliver the rest of this roadmap over the next couple of years using the internal capability we've built to launch our single booking engine, roll out our new practice management system and eventually offer a completely integrated pet care experience to our pet owners. The new consumer app that we've just launched is a major step forward. It starts to showcase the promise of what our full platform will deliver. It brings a much improved user experience, better navigation, more personalisation, enhanced subscriptions capability and tailored offers and advice. It's early days, but so far the results are encouraging. with a 25% uplift in sales via the app and higher conversion on our new website. And for those of you that haven't got pets in your homes, this is what it looks like. You can see there the relevant content offers and product recommendations, all shown to a customer right at the top. New and featured, powered by our data. and special offers and vouchers right there front and center. We've also got simplified navigation and filters and enhanced product attributes running off our new product database. So it's much easier for customers to find and buy what they want. And we've made it much easier to join the Pets Club. The club identity and the customer identity are now as one. We've linked all of our data and made it much easier. So as you can see, it's really exciting to have landed such a big building block of our strategy, delivering clear improvements for our customers today and setting us up for the future. Now onto our differentiated sector leading vet group, underpinned by our JV model, which is at the heart of our strategy. Our vets delivered an excellent performance in FY24. Our vets group consumer revenues grew 14% to 576 million, making us the clear number two in the vet sector. We attracted new customers, we grew visits and improved the mix of our business, which, when combined with industry-wide inflation, powered our practice revenue growth. The unique benefits of our JV model, driven by skilled and passionate practice owners, translated to an average practice EBITDA growth of 16%. Today, we have more successful, debt-free and profitable vets than ever before. creating increased advocacy for our model, which will help us grow in the future. And the Vet Group PBIT easily cleared the 60 million potential we outlined a few years ago, with plenty of growth still to come. The CMA market investigation into the veterinary sector is ongoing and we will of course continue to actively engage with the CMA over the coming months. We believe, however, that our unique JV model insulates us from many of the potential areas of concern. we already have a national brand. Our practices clearly display locally determined price lists in reception areas and we encourage best practice sharing in areas such as providing estimates to help customers get adequate information to make an informed choice. Our JV practices are independently owned and sometimes in fact compete with each other in local markets. We only operate in the primary care market, having sold our specialist hospital division years ago. And so our vets have complete clinical freedom to refer anywhere or retain the work in-house, whatever they think is in the best interest of the pet and the pet owner. The CMA's concern on charging for medicines and prescriptions is the only area where we think there could be some limited potential impact, but this should be manageable at a practice level. And lastly, there's a question around the way the sector is regulated, given the current regulatory framework is almost 60 years old. And so we welcome the opportunity to sit around the table and help frame the new legislative and regulatory framework for vets. Of course, the main risk with any investigation is that the business will get distracted. And I want to reassure you that we will give this all the attention it requires without losing sight of the long-term off-growth opportunity we have in front of us by supporting the growth of our practice owners. The welfare of our clinical teams and those across the industry is also a key concern. And we'll do everything we can to preserve their well-being in the face of the stress, uncertainty and unwanted public profile that a market investigation inevitably brings. So our VET strategy is pro-competitive and will introduce new capacity to the UK primary care sector and increased choice for consumers. The key pillars of our Grace VET strategy are intact and we've made great progress against the plans we set out a year ago. We plan to grow our consumer sales at 9% a year over the medium term, supported by four pillars. First, the embedded maturity of our existing practices, with our average practice now doing £1.3 million of revenue a year, but our established debt-free practices doing £1.5 million. So plenty of embedded growth there. Second, we plan to open five to 15 new greenfield practices a year. This year, we've been a bit behind that due to some timing impacts, but we have a very healthy pipeline of new practices to come. And with 120 stores still without a vet and a thriving standalone model, we can tailor our opening programme to wherever new practice owners want to be. Third, we plan to extend practices as many mature practices operate on the same footprint they opened with. And we've successfully extended 26 practices in the past year. And fourth, we'll support practices in adding advanced capabilities such as imaging, cardiology, orthopedics and laparoscopy, which provide opportunities for clinical talent to grow and the ability to retain high value work in practice. So, with a great year behind us and a clear and compelling growth plan, we and our practice owners look forward to the future with confidence. And so on to our retail division, which remains an unrivalled industry leader, well positioned, with investments behind us and opportunity ahead, despite exiting a more challenging year. Our retail business is anchored by food, driving frequency and loyalty, and that has led our growth over the last year. And where we win in food, we see a four times higher frequency from customers, and it has a halo onto non-food spend as well. We're the clear market leaders in the premium food sector which is expected to grow faster than the overall market and we remain at the forefront of innovation with our recent expansion into frozen, into freeze-dried and fresh. And our performance in food has been driven by the strength and growth of our category-leading private labels. These are now super brands and include Wainwrights and AVA, some of the biggest advanced nutrition brands in the industry, in their own right. In fact, such has been the growth of AVA that it's now overtaken the branded leader in the dog category. These brands drive frequency, they provide savings for the consumer alongside equivalent or better quality and deliver significantly improved margin to our bottom line, supported by long-term supply deals such as with Cranswick. As you know, accessories has had a much tougher time over the last couple of years, holding back our growth and margin. Pressure on discretionary spend, cost headwinds and the impact of that trough in the smile of consumer spend have provided a difficult backdrop. But we're determined to get accessories back into growth through innovation, premiumisation and online channel growth. We know that when we get the product and price right and when we merchandise it well, we win consumer spend. And in the year to come, we've got a really compelling pipeline of innovation centered on range extensions, exclusive product launches, and enhanced own brand. We'll be able to use our new digital capabilities to cross an upsell, to target consumer recommendations, and to add accessories to food and health subscriptions, driving participation in this rapidly growing channel. We will continue to invest in our stores to offering engaging and rewarding experience for consumers. Our well-located national footprint of pet care centres bringing together a unique range of products and services in one place together with our convenient standalone vet practices are the leading asset in the industry. We've opened five new locations in the past year and refitted 41. We've also rebranded 55 of our stores and vet practices with really positive consumer partner and colleague reaction. And the capital is committed in our plan to continue this level of investment in our current estate alongside expanding to another 40 or so locations in the year ahead. So I'll now hand over to our CFO, Mike Iden, to take you through a financial review.

Thank you, Lisa. Good morning, everybody. It's been a solid year. I'm going to give you an update on that and on the financial results we achieved last year. It was really a pivotal year for the business. We delivered a really resilient performance and as Lisa's just been saying, we implemented some really important parts of the strategy. The consumer revenue grew by close to 7% to £1.9 billion. Underlying profit was £132 million. That was in line with our January guidance and of course includes the impact of the transition to the distribution centre last summer. Free cash flow was robust, 69 million, and we now have 7.8 million members in our Pets Club. That's a growth year-on-year of nearly 2%. More of our revenue than ever is from subscriptions. That's up 330 basis points year-on-year to 10%. And as Lisa was saying, the average annual consumer value has grown close to 6% to £178. And we've really successfully managed to recruit more clinical professionals, been a big driver of the growth we've seen in our veterinary business. 3,300 vets and nurses now work in our business. That's up 10% year on year. Turning now to our consumer revenue growth, as I said, it was in line with our medium-term ambition. We grew 6.9%. And within that, group like-for-like growth, as you can see from the chart, was just over 5%. Retail like-for-like growth was just over 4%. And vet group like-for-like growth was 16.5%. Within that retail number, food benefited from strong growth all the way through the year. And that was underpinned by volume growth. And within accessories, that did decline, as you can see in the chart, by 4.3%. But splitting that out, Consumer accessories, so items like cat litter, they actually grew by seven. So it's those discretionary accessories, things like dog toys, dog collars and leads, dog toys, they declined by eight. And we've already taken action, as Lisa was saying. We're determined to turn that around. And the growth plan in the year ahead is a key component of that growth plan. Within other, as you can see in the chart, that's grooming sales mainly in there. They grew in the year by around 10%. And that was really helped by the successful retention of our grooming colleagues. The vet business had a terrific year. Firing on all cylinders, supported by that increased clinical capacity, growing life-like revenue by 16.5%. And within that, we got good visits growth of around 3%. In the VET group, of course, we have a number of proven growth levers. We opened three new practices, extended 26, and we converted 10 group-managed practices to what is our preferred format, which is the joint venture model. Average practice revenue lifted to £1.3 million per practice, and we have a significant amount of embedded maturity still to come. Half of our practices are still less than 10 years old. Turning now to the profit results, £132 million, in line with expectations, but held back by the headwinds we've previously flagged. And those headwinds, of course, include £9 million of additional costs and the impact to lower sales, as we suffered that short-term disruption last summer in Q2, as we transitioned all our stores to our Stafford distribution centre. That's all behind us. I mean, that peak operational risk, all behind us. Staff is now operating at ever-improving productivity, and availability in our stores is stronger than ever. Group gross margin declined by 123 basis points, mainly due to retail. And in there, there's two factors. One is the mix effect of that really strong growing food business at more than nine and the decline we saw in discretionary accessories. The other part of it is foreign exchange. We bought our dollars last year at $1.19. That compares to $1.34 the previous year. And that weighed down on the gross margin. As we look into FY25, We bought 80% of our dollars now at 125. So that will be a tailwind coming into the new financial year. We kept a really good grip on our operating costs. Those grew only 4% to 558 million. And here we've got a number of really well proven efficiency and productivity levers to pull, and that helps us offset some of the known headwinds, the biggest one of which is a 9.8% increase in the national living wage. We treated £26.3 million of costs in the year as non-underlying, mainly across two areas. One is the distribution transition we talked about, and the other was the closure of our Swindon Support Office, and that's now complete. In the year ahead, we are planning for £7 million, a further £7 million non-underlying cost, with two drivers of that. One is another restructuring we're doing, another office restructuring at Hanforth this time, taking out 120 roles. And we're going to complete the online transition, moving up our online picking from Northampton up to Stafford, and that will be a further £3 million, but significantly lower year on year. PBIP margin dropped, as you can see in the chart, to 8.9%. Within that, and as expected, VET group margin stepped up by over 100 basis points. But retail margin, that did decline, held back by the factors I've been talking about. That did drag on our retail profit, which declined to just over 87 million. But VET group profit lifted by 20% to just over 61 million pounds. Turning now to cash flow, strong free cash flow and the robust balance sheet. £69 million of cash flow in the year, that's after cash capex of £48.5 million and we closed with net cash of £9 million. The VET group produced £58 million of cash flow and that's consistent with a target of £60 million of cash flow we've been talking about for a number of years. And there's plenty more to come on the VET group cash flow. Retail cash flow was held back by those one-off costs. They are non-recurring, non-allying costs, mainly related to the staff at DC. We'll pay a final dividend in the year, 8.3p. That maintains our dividend flat, represents a payout of 61%, slightly ahead of the 50% payout in the capital allocation guidelines. We also successfully completed our share buyback programme, taking our total buyback now to £100 million over two years, £50 million last year, and we bought back in total 15.3 million shares last year. And as you can see on the slide, we finished the year with least adjusted leverage maintained at 1.5 times. We've got a robust balance sheet and we will generate surplus cash flow in the year ahead. And that's after fully funding our growth plan. So turning now to our capital investment, we invested close to £46 million in the year and we continue to have a really disciplined approach, fully aligned to strategy. As Lisa was saying, we did complete a full development programme, 41 pet care centres, 26 extensions, but we spent less than our planned budgeted investment because we focused on lighter capital refits and many of those vet extensions were actually chosen to be funded by the practice owners. We opened five stores, and that was consistent with the medium-term target to open 40. All are trading well, in line with the business plan, and we'll continue to open new stores, particularly in urban areas. And we see quite an opportunity there. And since the year end, we've opened a further two stores, one in Sutton and one in Whetstone. The balance of the investment is in digitising the business. Much of that, of course, is expense through the P&L, through the SAS charge. And last year, that was just short of £28 million. As Lisa was outlining, we've now completed the build phase of our new website and app. All customer transactions are now on the new platform. It's a significant step forward in our digital capability. And of course, we've built along the way the in-house capability and skills to continue to enhance and develop that platform for customers. Looking ahead into this year, we'll invest around £60 million of capital. That will be across three key areas. New stores, the development of existing stores, enhancing that digital platform and supporting those proven growth drivers in the vet business. And over the medium term, we'd expect that £60 million to taper down to around £50 million a year. As we look into this coming year, we have a clear plan to grow profits. We do expect a slightly weaker pet care market than the 4% medium-term growth assumption. That's driven by the normalisation of the pet population and the number of new pets sort of stabilises at a new normal level. We've planned our profit growth off this lower market growth expectation and there are a number of drivers that give us confidence. The first is that one of the factors that held retail profit back this year, mainly that £9 million of additional distribution costs, they will fall away in the year ahead. We've also been through a period over the last two years of peak investment, heightened operational risk. The costs of those investments in our digital have all been expensed and they are mostly behind us, but the benefits are still ahead of us and they'll now start to deliver. We also have a really tight grip on the cost base, really disciplined approach to capital investment. That well-established programme we've got of rent reductions, you know, 10% of our leases a year, and better procurement of goods and services, that will continue. And we've already implemented a headcount reduction in our Hanthor support office that will reshape the costs and simplify the work. We've got a strong retail trading plan that includes turning around that key core accessories performance. We've re-energized our stores on four C's of customer, colleague, cash and core. And we planned a quite significant step up in marketing investment in the year ahead. Finally, we'll continue to see and support the proven growth drivers in the vet business and deliver that embedded growth as we drive out the maturity of the practice portfolio. So when you take all that together, we've got a comprehensive, fully resourced plan to grow profits in the year ahead. So turning now to capital allocation. remains unchanged and closely aligned to our strategic priorities. First and foremost, to invest to grow the business. That's where we've got a very disciplined approach and very clear on where we're going to invest. Secondly, the commitment to the ordinary dividend, to pay a progressive dividend, around 50% of earnings. We've got a really consistent and reliable track record of doing so. Third, where it makes strategic sense, so the good example is buying the VET connection, we'll invest in Bolton M&A. And finally, where we've got surplus cash, we'll return that to shareholders via buybacks or special dividends. And if you look back over the last five years, we've returned £300 million to shareholders and at the same time maintained a robust balance sheet and not constrained the growth of the business. And today, we're announcing a further buyback of £25 million in the year ahead. And finally, last May, we did set out our medium-term financial framework that will reward shareholders with compounding growth and strong cash flow. We plan to grow our sales 7% over the medium term. That's based on the pet care market growing at 7%. That market growth, as Lisa was saying, underpinned by strong structural growth drivers. And then we've got our proven drivers, you know, omni-channel strategy, our digital capabilities, our unique model, product and services, enables us to grow faster than the market. Profits will grow ahead of sales, 10% a year. That's driven off the back of productivity gains, efficiency benefits, and operational leverage. And in turn, that drives strong, improving cash flow to 70% of PBIP. That will allow us to reward our shareholders through a progressive dividend and returns of any surplus cash, as I mentioned. So, in conclusion, a really pivotal year of strategic progress. We delivered a resilient financial performance, landed some big strategic projects, and importantly, have a clear path to improved profitability. strategy remains clear, and importantly, our capital allocation and medium-term financial framework are unchanged. Thank you for listening. I'll now hand back to Lisa.

Okay, so in summary, one year into our strategy, our vision's unchanged, and we've successfully delivered the key building blocks of our platform alongside, as Mike outlined, a really resilient financial performance. Our strategy is clear. It's underpinned by that purpose to create a better world for pets and the people who love them. And I'm more excited than ever by the future for this business as we build the world's best pet care platform. So now Mike and I are happy to take your questions.