Premier Foods plc

Morning everybody and welcome to Premier Foods half year results that's for the 26 weeks that ended on the 30th of September this year. As always I'm joined by our CFO Duncan Leggett and once I've given a bit of an introduction Duncan will take us through the numbers and then I'll come back and give us an update on how we're doing against our five pillar growth strategy. And so just to kick off with the highlights and you'll be pleased to say that that strong momentum we had in quarter one flowed through into quarter two and we ended the half with revenue up 19.2% of 484 million, as we saw an improving volume trend through quarter two. Grocery market share, once again, really strong with a further 113 points basis growth versus prior year, and trading profit at 68 million was also up 19%, so in line with revenue growth leading to a trading profit margin which was held versus prior year. Adjusted profit before tax at 57 million was up 21.2%, and importantly, net debt was 65 million pounds lower than at the same point a year ago. So a nice set of financials. And if I move on to a quick look at how we're doing against those strategic growth pillars, and there's good progress on all of these as well. If we look at the first ones, that's growing our UK core. So our UK brands grew by 15.5% in the half. we continued to invest in our manufacturing infrastructure. Our new category expansion experiments, they expanded by 21%, so revenue up 21%, so again ahead of that UK branded growth rate. And international as well also up 19%, so faster than our core UK business as well. And then in terms of inorganic opportunities, and we'll talk about this in a little bit more detail later, but good performance on the Spice Taylor, but also obviously we announced a couple of weeks ago that we'd bought Fuel 10K. So that's a quick skip through there. I'll come back in more detail in a little while, and I'll just hand over now to Duncan to take us through the numbers.

Thank you very much, Alex, and good morning, everyone. I'm going to spend the next few slides talking through the half one performance. As Alex has mentioned, it has been another good six months for us. In terms of how that looks for the total group picture, we've got revenue up 19.2%, and that's a good contribution from the branded part of the business, really spearheaded by grocery. That's up 15.8%. Non-branded, clearly a lot smaller part of our portfolio, but that's up strongly, nearly 45%. And that is good contribution from both the grocery and the sweet treats business. You can really see the benefit of the strong grocery performance flowing through to divisional contribution. That is the most profitable part of our business. So divisional contribution is up 21.7% to 102 million. Group and corporate costs are higher, as you'd expect. We've got salary inflation in there. We're also investing behind efficiency projects, including those including systems, and also behind our broader strategy. So where does that leave trading profit? So trading profit's up 19% to 68 million. Once again, we've kept our trading profit margins in line year on year, something we've been really keen to do, particularly with the recent inflationary cycle. Interest is a touch up. I mean, clearly interest rates have gone up significantly over the last 12 months. We've managed to mitigate most of that by virtue of our fixed cost of borrowing. A reminder, our fixed note rates are at 3.5% and we've largely been undrawn on our RCF. So interest is up 8.5% and that all leaves adjusted profit before tax of 57 million up 21.2%. Adjusted earnings per share, now that's after a much higher tax charge this year versus last year. The rate of corporation tax, of course, has increased from 19% to 25%. So our adjusted EPS for the half is 5p, which is up 12% year on year. So how does this look for our two divisions? I'll start with grocery, and as I mentioned, that's really leading the charge in terms of performance in the half. This does include the international business, which Alex will talk about shortly, but that has had a really strong first half with revenues up 19%. In terms of the division as a whole, total revenue is up 24.6%. And as I mentioned before, really good branded performance, good strong growth across all of our grocery brands. So branded revenue is 317 million, and that's up 23%. If I had to pick out a couple of examples, OXO, particularly with stockpots, is performing really well. So that's up about 40% in the half. And Nishin continues to go from strength to strength, and that's up 50%. Non-branded revenue, again, a bit of a smaller part of our portfolio, but that's up strongly, up 36%. There is price in there. There's also increased run rates on some of our contracts, particularly flour. And you can see the benefits of the branded performance supplemented by our strong focus on supply chain efficiencies and of course the benefits from our capital investment program they're all flowing through strongly to divisional contribution so that's 90 million up 27.5 percent and that is after investing more in consumer marketing half year and a half year which is of course what we're aiming to do with our branded growth model Now Sweet Shoots is a slightly different picture. We've talked about price elasticity before and we know overall as a group we are better off than we expected and we're less elastic. That's largely because the grocery business is much less elastic than we expected and Sweet Shoots is a little bit more elastic and we can see that playing through in the first half results. We also talked at year-end results in May about improving performance through the year in terms of sweet treats, particularly during H2. That's very much what we're seeing. In fact, we've started the quarter three really strongly. We're seeing market share gains. So that's all playing out in terms of expectations. So in terms of the half itself, so total revenue was up 5.4%. Within that, Mr Kipling was in growth, which is fantastic because that's our largest brand. Cadbury's was a bit softer, half year on half year. And again, non-branded revenue, a smaller proportion, so smaller numbers, but that's up 66%. That's a combination of contract wins and prices in there as well. We'd expect to see that moderate a bit as we progress through the second half of the year. Divisional contribution, now that is back 9% half year on half year. That's partly due to the revenue shape in terms of performance. We've also continued to invest behind Mr Kipling in the half, and there is more H1 weighting in terms of marketing half year on half year. Were that to be flat in terms of marketing investment, we'd have about flat divisional contribution as well. It's been another good performance in terms of net debt and cash generation in the half. So we're 65 million lower than at this point last year, and we're about flat in terms of where we were at year end. Just as a reminder, we spend the first half of the year building our stock for our peak season, and we generate most, if not all, of our free cash in the second half of the year. In fact, we've got more than 40 million pounds of stock, more on balance sheet at half year versus year end. We've managed to offset that through strong working capital management elsewhere. CapEx is more than double this time last year. So that's at 14 million. That's consistent with what we're saying about stepping up our investment behind what are frankly really attractive opportunities in the business. And this underpins our full year guidance, which is around 35 million. Pensions, we're seeing the benefits of the cash reduction we agreed earlier this year following the 22 valuation. They're all flowing through in the half and will continue to do so for the full year. And we've got restructuring costs of 10 million. Now this includes some of the cash costs relating to the night enclosure. We're expecting more in the second half and our full year guidance for this has gone up slightly to 20 million, but this does also include the M&A costs relating to the fuel 10K acquisition. which Alex will talk about later. Now it wouldn't be a presentation for me without at least one slide on pensions and I thought I'd spend a bit of time just recapping where we are and how we see things playing out from here. So we're about three and a half years on from the merger that we put in place of the three UK schemes and frankly the trustees have done a fantastic job both generating returns from the assets but also managing risk at the same time. There's great evidence of this through the March 22 valuation, the results of which we announced earlier this year, where we're starting to see a surplus on the RHM scheme. The net present value of pensions is now 125 million. That's nearly 200 million lower than it was before we put the merger in place. And it was really good that these all came together to lead a reduction in the cash we pay into the schemes of about 6 million this year. So very much things working according to plan, probably slightly ahead. I think we're 18 months on from the last valuation now. And all else being equal, we'd expect things to be in a bit of a better position than they were then. And we just need the time for the assets to return, to generate the returns and effectively the surplus in the RHM scheme to build high enough to fund the deficit in the Premier Food Scheme. We see this to occur within three years, and clearly when it does, we're going to have roughly 40 million of cash that we currently pay into the schemes, significantly increase our free cash flow and open up options in how we deploy that cash. That leads me nicely on to broader capital allocation. I mean, this is something you've heard from me before. I talked about pensions. We're still paying about 40 million into the schemes. We expect that to reduce in the not too distant future. CapEx, we're doing exactly what we said we're doing. We want to step it up as a continual great set of projects that give us great returns in this area. We're guiding to about £35 million for this year and expecting it to be probably £35 to £40 over the coming years. M&A, again, Alex will talk about the Fuel 10K acquisition shortly. Again, we're doing exactly what we said. We've made a second acquisition in just over a year, targeted strong brands we believe we can create value with. And again, on dividend, we knew we started from a small base. We progressed it by 20% or so over the last couple of years. We continue to intend to progress this on a full year basis, whilst being mindful of our net debt to be with our target of one and a half times. Clearly with M&A, this might bump around a bit in the short term, but we'll clearly be focused on getting it back to one and a half times. And that's all for me, and I'll now pass back to Alex.

Thank you very much, Duncan. So I just want to start off by taking us through the five pillar growth strategy. Now, you might remember that this is based on the fact that if we believe that our core skill set is about building brands and making brands grow in a profitable way, then this really looks at how we can expand that across a broader base. So if we start on the left-hand side, pillar one is about continuing to grow our UK brands in their core markets in the UK, because that obviously gives us the foundations for further growth elsewhere and at the moment it's where the majority of the business is. And the second pillar is about investing back into our supply chain with two objectives there really. One is buying the equipment needed to manufacture some of the new products that we bring to market because you'll be aware that our model is very heavily dependent on new product development. But it's also about investing in efficiency and making ourselves more productive and consequently improving margins. The third pillar is about taking our well-known brands and extending them into new categories where historically we won't have delivered any revenues. So a great example of that, which we'll come back to, is the extension of Angel Delight and Mr Kipling into ice cream, but it's also Ambrosia going into breakfast porridge pots. The fourth pillar is about applying, again, our same brand building techniques, but overseas. So we've got a handful of focused markets and a handful of focused brands where we're looking to build in overseas markets, which, of course, is all white space growth. And then the fifth pillar is inorganic opportunities. And so what we're doing there is we're looking for brands which we believe that when we apply our branded growth model to them, will deliver disproportionate growth and value. And so we believe that by applying this growth strategy over time, we'll be able to make Premier Foods a much bigger business than it is today. And this, of course, is all guided by our purpose, which is enriching life through food together with our ESG strategy. And so what I'd like to do now is walk through what we've been doing in the first half of the year on each of those five pillars. But before I do that, let's just touch on progress against that ESG strategy. And there's three key areas to this product, planet and people you might remember. And obviously, because we're a food manufacturer, we see our responsibility to help people to eat more healthily. So consequently, we've got a big focus within our new product development pipeline on healthier products. And you can see at the top left there that our sales from high nutritional products increased by 23% in the first half of the year. So then again, it's ahead of our core branded growth rate. And we've now got 43% of our portfolio having an additional health benefit of some sorts. That might be high in fiber, one of your five a day, or low fat, for example. And then down bottom left there, our packaging, our commitment is to get to 100% of all our packaging being recyclable. We're now at 96%, so 4% left to go. Clearly that's going to be the most difficult 4%, but a lot of work currently in play to make that happen. On the planet pillar, continuing to work on reducing our Scope 1 and Scope 2 emissions, and you can see there we expect our Scope 1s to be approximately 4% lower this year than last, so that's in line with our journey to get to net zero. We've now kicked off a new supplier engagement programme, working with our key suppliers to help drive down their emissions, which of course are our Scope 3s. And then just briefly to touch on people and just a reminder of where we've got to on the top right-hand side there with now at a point where 47% of our management colleagues are female. So I'll move on now to talk about the pillars. And what I said before was that what underpins the pillars of our grade strategy is how we go about building our brands. And this is what we call our branded growth model. And you can see that laid out on this chart here. So we start in the top left in, frankly, a very fortunate position where most of the brands that we've got are leaders in their core categories. And we've got high household penetration, if you were to knock on the door of pretty much any UK house, you'll probably find that there's several Premier Foods products in the cupboard. But that on its own, as I've said before, is not going to give you growth. It's a great start point, but then you've got to do something with the brands. And really, that's what the rest of the model explains. So we're very heavily dependent on new product development. We work very hard to understand how our consumers are shopping, how they're eating, and how they're cooking at home. And we develop new products which fit with those trends. And that's one of the reasons why our new product development programme is so successful and our new products tend to work very well. Then number three there is that we continue to invest behind our brand. So as Duncan said, we've put more investment behind our brands again this year. So that's behind marketing and advertising campaigns that build the brands, maintain brand awareness, and keep the brands contemporary and relevant for our consumers. And then we also work really hard in creating emotional connections between the brand and the consumer, because we know that that leads to long-term value creation. And then bottom right there, but very importantly, is our relationship with our key retailers. And given that we're in that position where our brands are the leaders in their categories, building strategic partnerships with our retailers that drive mutual growth for both the retailer and for our brands delivers disproportionate benefit to us because, as I say, we start from that position of being the leader in most categories. And if we look at how that's played out over the last few years, the chart on the left-hand side there is our revenue generated from our UK brands over the last six first half years. And you can see there's just consistent growth year after year after year. There's a peak there in the middle, of course. That's when we were all locked down and we're all eating at home. And obviously, that meant that people were buying more food. for the sorts of products that we make in order to cook those meals at home. And then if you look in the middle there, that 8.6%, that's the five-year CAGR growth rate of our trading profit in those same half-one periods. So what we've been able to do effectively there is continually grow the top line, but actually growing our trading profit consistently at the same time. And also over that period, you'll be aware that our market share has also continued to grow over that time as well. And the number we've just shared today is that 113 basis points improvement in this half year in our grocery market share. And that's actually even ahead of what we said at the end of quarter one. And as I said, part of the model and a cornerstone of the model is actually the new product development work that we do. And we work on a number of key trends, health and nutrition on the left hand side, really important. We've brought many health and nutrition based products to market, not just over this half year, but actually over recent years. I've pulled out a few examples here, and it includes things like lower-fat Charlotte's curry pastes. And at the top there, you've got a deliciously good version of our cherry bakewell. So that's a cherry bakewell that's low in sugar, low in fat, high in fiber, and contains real fruit. So it is actually on the government nutritional profiling model, has a score of less than three, and is consequently not classified as high-fat, salt, and sugar. On the convenience trend, there's a number of new products we brought to market there. Incidentally, there's Nissin cup noodles at the top there, and Nissin continues to grow very strongly for us and is, again, this half year being our fastest-growing brand. And then there's the indulgence trend, so slightly counterintuitive. We know people are trying to eat more healthily, but we do see this slight countertrend on indulgence, and we believe that that is a case of people, when you're not eating healthy and you are going to be a little bit more indulgent then it's got to be worth it and so we brought a number of new products again to market that fit into that trend now i've said another important part of the model is investing and behind our brands and actually seven of our major brands benefited from increased levels of tv digital and outdoor media during the first half of the year and we also had a significant increase in investment in our best restaurant in town campaign Now, you might remember me telling you about the Best Restaurant in Town campaign, and that came about from us listening to our consumers who were saying, well, look, we know the cheapest way for me to eat and feed my family is to actually cook at home for ourselves, but I need some ideas, I need some inspiration. So we created a series of short films which help people come up with ideas for low-cost nutritional meals that they can cook at home and obviously includes our brand's in those little ads. And we've extended that campaign this year across more of our brands with more ideas and actually across a lot more TV and digital media slots. And then the other part of the model, of course, is that working with retailers in gaining great in-store execution. A couple of really nice stats actually relating to the grocery business so far this year is that we've managed to get more products into more stores. So 2.6% more products in more stores actually than at the same period a year ago. So our overall level of distribution is increasing. And we've also increased the number of products that we've got on off-shelf displays has actually increased by a pretty staggering 56%. And there's a couple of examples in some of the images there. So the Bachelors team sort of teamed up with the Batman movie franchise. And if you bought Bachelors, you could win Batman merchandise, cinema tickets, and things like that. And that we were able to get these pretty big dramatic displays in store. And similarly there on the right hand side you can see a similar arrangement where Mr Kipling teamed up with the Minions franchise and consumers could win movie tickets and Minions merchandise and in store we have these fantastic big displays. So that's some just great examples of the model in action actually. Now, of course, I've got to mention inflation, and it's great news that we saw in yesterday's ONS stats that inflation is falling, including food inflation. Now, of course, we've still got inflation, but at least it's on the way down. Now, what we've noticed in our input costs is that over the last few months, we've started to see some of those costs starting to fall off their peak. And that's really good news because what we've been able to do there is we've been able to sharpen some of our promotional price points in the market which ultimately will lead to greater volume delivery so a couple of our biggest brands if we take bachelors bachelor's super noodles in 2021 you would probably find those on promotion for around 70p by the time we're in january this year That was more like a pound, but what you should start seeing now is promotional pricing around 80 to 90p. Of course, it depends on the retailer because pricing is obviously at the discretion of the retailer, but it depends on the week and it depends on the retailer, but broadly that's what you should see. Similarly, Mr Kipling, a six-pack of slices, in 2021 would have been about £1.25. In January this year, that had gone up to £1.75, and we've now been able to help lower those down to about £1.50. Incidentally, actually, the Mr Kipling example on the page there is the first one we did, so we've been in market for a month or so with that, and we're actually able to read some of the results, and I can tell you that it's led to some pretty significant increases in volumes as a result. And you'll see more of that as we go through the second half of the year across a number of our key brands. I'm going to move on to the second pillar, which is infrastructure investment. And on the left hand side there, you can see This lovely virtuous circle we get whereby we generate cash. We invest some of that cash back into making our manufacturing sites more efficient. That obviously improves our gross margins. That allows us to invest more back into our brands, which delivers more growth and generates more cash. So a lovely little virtuous circle. And we've got plenty of projects with payback periods in that three to four year sort of zone. And therefore, to Duncan's point, we're putting a significant increase back into capital this year behind those three- to four-year payback projects. A good example of that is the one we've got immediately on the right there, which is efficiency and energy reduction. The beauty here is, of course, that when we invest in reducing energy consumption, we're saving money and we're also reducing our Scope 1 and Scope 2 emissions. And the example I've got here is actually some work we've done replacing our air compressors. Probably not the most exciting topic, but we do use a lot of compressed air across some of our sites. And by moving to newer technology and better and more efficient compressors, we've been able to make a reasonably significant decrease in our scope two emissions and save electricity, which is giving us payback that's actually less than that three to four year window period that we've got on the left there. Now you'll have heard me talk in the past about further automation in our cake business, and in this particular case, automatic case packers on autopalletizers. So these are basically robotic arms that are either picking up boxes of cakes and stacking them into the cases, or it's picking up the cases and stacking them on a pallet to a computer-generated configuration ready for those pallets to be picked up and shipped off to a warehouse. We implemented four of those over the last few months and we've got four more on order for the second half of the year. As a reminder, these things are generally costing a few hundred thousand pounds each and they pay back in pretty much spot on three years actually. And then finally, on the right-hand side there, you've got the closure of our Knighton site. Now, you might remember that this is a site that was producing non-branded low-value powders and actually was a loss-making site. So the closure now of the Knighton site has the following effects. It will increase the group's branded sales mix. And because it was loss-making, it obviously, therefore, increases our absolute and percentage margins and it was actually quite an energy intense site so it has a reasonably significant impact on our overall greenhouse gas scope one and scope two emissions. What we're in the process of doing right now is we're transferring some of those remaining production lines into our Ashford and Carlton sites and those were production lines that made some of our branded products which obviously we want to retain and we'll just make those in different sites. So I'm now going to move on to pillar three. So pillar three, if you remember, is expanding into new categories using our brand building techniques and extending our brands into new territories. On the left-hand side there, this is probably the one that I would argue is no longer an experiment. This is actually full rollout, and this is the extension of Ambrosia into porridge pots. So we've now got a 6.2% share of breakfast pots, and that's in actually a highly growing subcategory in the first place. So consequently, the revenue growth that comes from that is pretty significant. In the first customer that we launched in, we've already got to a 14.7% market share. So you can imagine now where that blue line is going to continue to over on the right-hand side. And we've got more flavours coming within the range in the second half of the year, and we're also launching into Ireland in the second half of the year as well. In the middle there, you've got ice cream. And you may recall that we did a test in Iceland stores with this a year or so ago. That worked really very well indeed. And so we've now decided to roll this out. And I think very, very recent, but I think you can now buy these products in both Morrisons and in Asda. And we're working hard now with those retailers to make sure we're generating trial and getting people to pick those up and take them home. Cape Herbs and Spice over on the top right, this is one that's just continued to build. And in fact, actually, revenue from Cape Herbs and Spice more than doubled in the first half of the year as we gained more distribution and expanded the range. And this is one where the product is just of such fantastic high quality that once consumers find it, they'll tend to stick with it and not go back to what they were buying before. And as that sort of generators more volume, we've seen the distribution expand out into additional retailers. And I fully expect we'll pick up another retailer on that in the second half of the year. And then finally, on the bottom right-hand side there, Oxo rubs and Oxo marinades. And we really like these because if you think about Oxo, it tends to skew towards the winter season. So Oxo, you'll tend to use it, not exclusively, but it tends to skew towards the sorts of dishes you'd make when the weather's a bit chilly. And the thing we like about these is they're obviously focused on the summer season and they're focused on barbecues. So what that does is it helps to de-seasonalize the profile of the brand a little bit. So moving on to the fourth pillar, our international expansion continues to gather pace. And if we look at the left-hand side there, this is our increase in distribution of Mr. Kipling cakes in the United States. And you might remember that we had a test in 200 Target stores last year. That was really successful. In fact, all of our flavors sold in the top 50% if you were to rank all the all the cakes sold in Target at that time. And so armed with that success, we've now been rolling the brand out into more and more stores. And you can see those bars represent the store count over the last few months to the point now where we're almost in 2,000 stores. So we'll expect to add further stores as we go through the rest of the year. And we're supporting the brand with social media and also in-store activation in order to drive consumer trial. And actually, that increase in distribution has helped drive our overall U.S. growth to 53%. Now, obviously from a fairly small base at this point, but nevertheless, really encouraging. And we move over to Australia. Australia, we obviously have a much more developed business. We're already the leader in cake and we're the leader in Indian cooking sources as well, so essentially becoming a fully-fledged business unit in Australia. So cake retail sales growth was 22% in the first half, yet another record market share at 16%, and a 19% household penetration, so that's almost 20% of Australian households now buying Mr Kipling Gold Cadbury cakes. and also now we've reached that level of critical mass in australia we're starting to apply the full branded growth model that we know from the uk and so that means we've been able to start investing behind building the mr kipling brand so this is no longer just a case of selling really great quality cakes it's also about building brand equity and building the brand so we've been investing in in tv media using the UK Little Thief copy, although obviously with an Australian accent. And we've also been sponsoring the Great Australian Bake Off. And if you look down the bottom there, we've also got new products coming into Australia. So we're running a full new product development stream with new cakes going into Australia, just like we would do in the UK. And then the fifth pillar, the final pillar, remember this is finding brands that we can bring into the business through acquisition, which we believe we can apply our branded growth model and deliver disproportionate performance. So obviously the Spice Tailor just over a year ago now, and we always said the first phase of growth from the Spice Tailor would come from increasing distribution and in-store execution. And that's exactly what's played out. In fact, if anything, it's played out better than we expected. Because the simple fact was that Spicetailer's performance was better than its distribution that it had got. Or in other words, it deserved better distribution than it had actually got. So what we've been able to do over the last 12 months is more than double our weighted distribution in Asner and Morrisons. And we've also been able to get more and more impactful displays like the one you can see in the image there. Now the next phase of growth starts to come as the MPD pipeline kicks in and you can see there we've got a couple of the first examples which are flavour extensions of the Indian range and they're coming to market around now. But what you will see over the next 12 months is some pretty significant new product development that will come to market and I'm going to sit on that one until we're a little bit closer for competitive reasons. And then over on the right you've got overseas expansion. We've been able to more than double our distribution in Ireland, actually, by getting distribution in Dunn stores and in Movesgrave. So that's essentially doubled the size of our Spicetailer business in Ireland. And whilst the brand was strong in Australia, it wasn't present in New Zealand. And we've now rolled out into 540 countdown stores. with four skus in new zealand so all in all in really good shape and we're well on track actually to deliver returns which are quite notably ahead of our internal acquisition plan for this year so so very much on track if not ahead of expectations for us there And then two weeks ago, of course, we announced that we bought Fuel 10K. What is Fuel 10K? Well, it's a vibrant breakfast-oriented brand with granola and oats and drinks and with a differentiated protein-boosted brand proposition and a modern and young consumer demographic. Now, why did we like this so much? Well, first and foremost, because it provides us with a much larger platform in breakfast. If you think about our entire portfolio, we've got over a billion pounds worth of sales, and almost all of it's coming from lunchtime onwards, with almost no presence at all in the morning, until, of course, we launched Ambrosia Porridge Pots. So what Fuel 10K gives us is it gives us a much bigger presence and a bigger platform with which we can build breakfast. And the thing we really liked about Fuel 10K was it had a differentiated positioning because there's lots of great granolas out there. But the thing about Fuel 10K is it has this protein boosted proposition, which makes it different from a lot of the other brands. Just like the Spice Tailor, it's got a track record of high growth. And again, we very strongly believe that when we apply our branded growth model, we'll deliver significant incremental value. So if we just look for a moment how we think that will play out. On the left-hand side there, just like with the Spice Tailor, we believe this brand is performing better than its current distribution would suggest. So again, it deserves more distribution than it's got. And of course, what we'll have access to now, what the brand will have access to, is a much bigger sales organization with a lot deeper analytical capabilities as well. We also think there's a great opportunity in terms of new product development. There's a lot of that, I can tell you, already well underway with access to much greater resources than the brand had before. And also, just like the Spice Tailor, as the brand grows, we'll be able to upweight brand investment and start investing significantly in brand equity development, which I think you'll probably realise is core to our model. Now, not within our acquisition model, but would be, if you like, icing on top, would be expansion into overseas geographies. So we will be looking at where we can expand fuel 10K overseas. But as I say, that's not in our model. And so anything that comes there would be would be on top. And similarly, and whilst we bought the brand because of its strong position in breakfast, we can see some opportunities actually for the brand beyond breakfast, and that's something else we're going to be pursuing. And then finally, you've got supply chain opportunities. So the obvious thing will be that Fuel 10K will get delivered on the same trucks as part of the same order to customers as all the rest of Premier Foods products. But at the moment, all of the products are made by third parties, external manufacturing. But obviously, as certain parts of the brand grow, then we'll obviously be able to ask the question on whether or not we actually buy the kit and manufacture it. some of the products ourselves in-house. So I think a great plan there of how we'll apply our growth model and drive the brand. So that's really a quick whiz through all the five pillars. If we look forward, though, what can we expect to see in the second half of this year? So as you'd expect from us, a lot of new products coming to market. And there's just a few examples there. The ones I'm going to pick out are Ambrosia plant-based custard. This has been many years in the works, but we have actually now cracked industrial scale a plant-based ambrosia custard which which tastes really delicious and then the other one in the middle was my personal favorite is mr kipling's best ever mince pie and it really is it's best ever and definitely worth definitely worth a taste over christmas i think that one The second one is our infrastructure investment. We've touched on that. We expect to spend around $35 million in capital over the year. And the example I've pulled out here I like a lot because it's an example of Premier Foods being innovative, but this time not in product development, but in process development, because the team have developed a new process for making icing that goes on our ice-topped cakes. It's a process we don't believe anybody else is using. It significantly improves our efficiency. It loses a lot less energy. It's quicker. And because of that reduction in energy, of course, it saves us quite a lot of money and it reduces our scope one and scope two emissions. I think when we do the maths and apply it to our Stoke factory, for example, when we implement this, we expect around a 14% reduction in our scope one and two emissions from that site. And so looking at the new categories, as I've said, we'll continue to put more flavours behind the Ambrosia porridge range. We've got two new flavours coming in the second half. We'll also be working on driving trial behind the new expanded distribution of the ice creams. Looking at the international businesses, we'll continue to build additional distribution of Mr Kipling in the US, building on that almost 2,000 stores that we're at now. And we've also put some increased sales resource behind going out and selling that. In terms of the Spice Tailor, we'll be launching the Spice Tailor into Northern Europe. And I'm pleased to say we've already landed our first couple of customers on that. And we're starting to kick off a dialogue with customers in the US about bringing the Spice Tailor into the United States. And then finally on Ireland, Ireland running a very similar model to the UK. So we'll be investing behind the brands as we go through the key winter season. So look, in summary for me, I think we've had a strong first half of the year. And actually we're standing here, aren't we, halfway through quarter three. That's our key quarter. And whilst there's still an awful lot to play for as we go towards Christmas, I'm pleased to say we've made a really good start to quarter three as well. The second half will benefit from all that comprehensive programme of NPD we just talked about, further brand investment and further of that great in-store execution. And as you've probably realised, fuel 10K integration is well underway and down the track. So bearing all that in mind, that's why today we're now saying that we expect full year trading profit to be in the region of 10% higher. than the prior year. And then just a reminder of what Duncan said earlier, we're also saying that our pensions, we expect full resolution of that now within three years, and obviously that will unlock significant future value for the business. So look, thank you very much for listening, and Duncan and I now will be very happy to take any questions. Thank you.