Travis Perkins plc

Hi, good morning, everybody. Nice to see so many people here in the room. And a very warm welcome to everyone who's following us on the webcast as well. I believe we have several hundred people out there watching us on the webcast this morning. For those of you who don't know me, I'm Gavin Slark. I'm the CEO, or more correctly, the CEO of 10 Weeks. And I'm joined today by Duncan Cooper, who obviously most of you will know as our CFO. And we also have quite a few members of our group leadership team in the room today as well. So, very happy for you to badger them with questions at the end. Obviously, they've been well briefed not to answer any of them. But I'm very happy for you to have a go anyway. I think most of you will know, although 10 weeks in the role here at TP, very well versed with the sector, having been in the sector for kind of well over 25 years, but really delighted to be here as the CEO of Travis Perkins and really looking forward with a lot of excitement to what happens going forward. I think it's fair to say that the business has been through quite a lot of flux and quite a lot of change over the last couple of years. I think as many of you will know, Duncan has been here for two years, and during that period, he's technically worked with three different chairs and four CEOs, and also three managing directors of our Travis Perkins Green and Gold business. So a huge amount of change. And what I would just say at this point is just thank you to everybody who was involved in the group last year, particularly the leadership team who got us to the point in where we are today. My aspiration in terms of the business is very simple. It's to build a group of world-class businesses, and for all of our stakeholders, whether they be colleagues, whether they be suppliers, whether they be customers, but just to build a great experience for everybody involved in the business. And it doesn't really matter what we do. One thing we need to be sure of is that everything that we do is driven by the needs and the wants of our customer base. We do have an all-new leadership team in place. And what I would say there is we've got a leadership team in place now that I think is really committed in terms of delivering value in the business going forward in the medium to long term. I'll talk a little bit more about the leadership team later on. And as I said, you'll have an opportunity to talk to them one-on-one when we finish. We are, and we should be, a branch-based, sales-led organization. But I think that kind of organization can work absolutely in harmony with a mindset of a disciplined approach to margin, to cost, and to capital allocation. And I think particularly with where the macro is now and the construction market in particular, having that disciplined approach to the balance sheet management is a really important factor that Duncan will talk more about later on. I know many of you will be aware that we have the Oracle transition in the group last year. And I don't want to underestimate or understate in any way the pain that the business suffered during the Oracle transition. But that Oracle transition is now principally behind us. And we're now starting to see the positive benefits of Oracle in the business starting to come through. I really believe that our success will be defined by what we do. It won't be defined by what happens in the market. Some market growth would be great, and we'll talk more about that later on. But I think what we can focus on is what we have control over, what we can do in the day job, and be really disciplined about the way that we run the business. But I firmly believe that our success is driven by us and not by external factors. The focus right now is to improve what we have. It's to remove distractions. It's to remove background noise and to really give the leadership team the opportunity to focus on the business that we have today and the necessary improvements that we need to make. I'm not going to go into sort of detail around numbers because obviously we have a CFO for that, but I've really got sort of three numbers that I think I just want to focus on for one moment. If you look at the revenue number there, you'll see that the revenue in total was down by 0.9%. If you look at that on a like-for-like basis, it was positive by 0.3%. So for the sake of sensible conversations, we'll basically say revenue was broadly flat. If you look at the adjusted operating profit at 133 million, I believe that's absolutely right in line with where consensus was for the business. But I do think that the most important number on that page there is the balance sheet number. And even though it's a relatively small number of 1 million, but on a pre-leases basis, being net cash positive, I think is a really important place for us to be and gives us an underlying financial strength. And it's the best cash position that Travis Perkins as a group has had in over 25 years. We don't have any significant refinancing to do probably until 2028. And we also have a really substantial level of liquidity headroom in the business. So the financial underpinnings of the group remain really, really strong. What I will do at that point is pass you over to Duncan, who will take you through the more interesting parts of the numbers. And then I will come back after Duncan's finished and just give you some of my early observations on the group and what I think we can do going forward. So with that, Duncan.

Thanks, Gavin. Good morning, everyone. So I will... Start with the usual financial overview slide. Group revenue for the year was 4.6 billion, down 0.9% on prior year. And as I normally do, I'll provide some colour on the moving parts within that shortly. Adjusted operating profit for the year was 133 million, down 12.5% on prior year, and in line with company compiled consensus of the same number. That delivers an adjusted earnings per share of 30.8 pence per share, down 15.8% on prior year, reflecting the reduction in earnings on prior year and the fixed nature of interest expense between years as well. Net cash of 1 million before leases puts the group, as Gavin has said, in the strongest cash position for nearly 30 years. And accordingly, despite the reduction in earnings, leverage adjusts down another 40 basis points to 2.1 times, and I'll talk more about the good work we've been doing here later. Finally, the board is pleased to announce a final dividend of 7.5 pence per share to make 12 pence for the full year, in line with the group's policy to pay a dividend of 30 to 40% of adjusted earnings. Over to the next slide and our revenue walk then for the year. I'm not going to dwell on this too long as I think Jeff and I covered in some detail at the half year the challenges we faced in the first half with key vacancies and trying to grapple with the implementation of Oracle. As we move through those challenges into the second half, we were able to be far more front-footed with some key promotions which drove an improvement in our sales performance. This saw the general merchant start to reverse market share losses and retake share. a trend we are seeing continue into early 2026. And you see that reflected in the cadence of the like-for-like sales performance in merchanting that we have reported today as well. Minus 3.2% in Q1, like-for-like, improving to plus 2.1% in Q4 as we exited the year. We saw one fewer trading day, 2025 versus 2024, And finally, the impact of disposing of staircraft is also presented, which was not material enough to the group performance to be reported as a discontinued operation. On the next slide is the usual operating profit walk we provide. The first four blocks relate to merchanting segment only. The first block represents the reduction in gross margin for the year, and this reflects the ongoing competitive intensity in a market starved of volume growth. Manufacturers price increases have been hard to pass through in full or in some cases at all. And as we ourselves have demonstrated in the second half, some price investment has been necessary to kickstart a volume recovery. One fewer trading day is the next block and then we come to overheads. We saw about 40 million pounds of total overhead inflation in the year, about half of which is represented in the next block. and the other half is netted off within the Toolstation bar for consistency of reporting. I'll go into more detail on this in the next slide, including the actions we've taken to reduce overheads whilst facing into these headwinds. Toolstation UK continues its strong earnings growth and remains on track with our longer-term expectations and aspirations for that business. And finally, property profits were in line with prior year. So let me come on to talk about cost inflation and mitigation in a little more detail. So firstly, you will remember at last year's prelims and half year, Jeff and I both talked about the need to reinvest in some frontline, predominantly branch-based roles, which were removed at the end of 2023. Most of the 350 colleagues I refer to on this slide were onboarded early in the first half of 2025. A small amount of that increase relates to the opening of three new general merchant branches. At the same time, I think we've also been consistently open with the market that the group had become too centralized in its decision-making and was carrying too much resource in central and regional management roles. Across several ways of activity during 2025, we removed roles from functions such as finance, cosec, sustainability, HR, corporate communications, group procurement and marketing, and IT, to ensure that we start 2026 with over 300 fewer heads in these areas than at the start of 2025. Our total overhead inflation across 2025 was around 40 million, which comes from a part-year effect of the national insurance increase, national living wage, property rates, and rental inflation. Through our focus on headcount and other discretionary costs, we did a good job of offsetting as much of this as possible during the year. But we cannot offset it in full. It's a similar story for 2026, where cost inflation will be of a similar magnitude. And our ability to offset as much of that as possible will depend on identifying further operational efficiencies across the group. I would also add at this point that sometimes people ask me why we need to hold over £800 million of property on the group balance sheet. There are lots of reasons I could share around why the flexibility and long-term location security that gives us is important, but I'm not going to go into those now. However, a positive consequence of our tenure mix is how it helps shelter us from some of that index-linked rental inflation. whilst also ensuring we don't shackle the group with long-term lease debt and leverage. And I'll close on this slide by offering an example of what I mean by tighter controls on discretionary spend and headcount. Gavin now has to personally sign off all roles coming into the group above a certain salary threshold. On the next slide, I want to cover the adjusting items we've recorded this year. The first thing I will say is all of these are covered extensively in the notes to the accounts with detailed disclosure. The first charge of 111 million can be split into branch level impairments, covering 196 branches in the Merchanting segment, where the carrying value of the branch's assets was above the value of our forecast discounted cash flows generated from those assets. The total non-cash impairment recognised in relation to these branches is 67 million. In the majority of cases, The branches are expected to deliver a positive contribution in 2026, with the vast majority delivering a positive contribution in the future based on our forecasts. A non-cash goodwill impairment of £44 million has also been recognised following the annual impairment review of the CCF business as an entity, taking into account the structural challenges in its end markets and future forecasts of CCF's profitability. The Toolstation Europe impairment charge relates to the non-cash write-down of goodwill, property and right-of-use assets in the Toolstation Benelux business under IFRS accounting rules. The Toolstation Europe restructuring charge relates to restructuring costs in Toolstation Benelux and adjustments in respect of redundancy provisions and lease liabilities related to Toolstation France recognised in previous years. Again, this impairment is principally driven by our recent trading performance in Benelux and our future forecasts of its profitability. The restructuring charge of £12 million relates to severance payments made as a result of the headcount reductions I referred to earlier on that were made during the year. The majority of these roles were in central functions or regional support teams. The staircraft business was sold during the year for a consideration of 21 million and resulted in a loss on disposal of 3 million. It had already been impaired in our 2024 accounts. And finally, the adjustments to prior year items relates to the release of property and stock provisions recognised as adjusting in prior periods. So I want to come on to now talk about cash and the balance sheet. We reported a strong cash inflow of £196 million for the year, and that is set against the backdrop of lower year-on-year EBITDA reflected in the first line of the table. You can see we have a similar level of access costs associated with restructuring year-on-year, similar levels of interest expense and dividend commitments. The sale of Staircraft has broadly offset the lower cash receipts from property transactions, principally sale and leasebacks. The two big controllables here remain capital expenditure and working capital. We've had another year of disciplined capital investment into the group. Our priority over the past two years has been to invest in our fleet and bring down its average age. We had allowed that to drift up in recent years, and whilst the useful and operable life of our trucks is around 10 years, Based on the heavy usage they get, you see repairs and maintenance costs increase and utilization rates fall past about seven years. So we want to ensure our branches and drivers can operate efficiently with minimal vehicle downtime. We're also starting the job of fixing some of the uninvested parts of our estate. And the strength of our balance sheet means we can do this in a sensible and staggered way over the coming years. Our big focus, though, has clearly been in working capital. Stock has increased in line with inflation, but we know we have more work to do here across the group. Trade debtors have reduced by 130 million as we have successfully managed to invoice much of the Oracle-related backlog of debt I referred to last year, but also sharpened our disciplines on debt collection generally. Trade creditors have increased by 26 million as we have harmonized payment terms across the group following the introduction of Oracle. These changes combine to deliver the significant working capital inflow number. In addition, we are targeting further self-help in terms of cash generation during 2026. I'm not going to put a target on that or provide formal guidance, but I would reiterate what I've said about TP since I joined. This group is capable of generating very healthy levels of cash when it's focused in the right way. I'm happy to bring the obsession, and I'm really pleased to see how others are responding to that. But to affect a real cultural shift throughout the whole organisation will take time, but we've made a good start. The last point I would make to give confidence in our cash generative capabilities is to remind you that we have managed to absorb some significant one-offs in recent years, including the closure costs of Torsation France, some significant restructuring and severance costs, and the multi-year cost of implementing and launching Oracle, and still demonstrated some excellent forward momentum. So that brings us on to the balance sheet impact of this cash generation. Net debt has fallen by $224 million to $621 million, and that leaves us just outside our desired long-run leverage range of 1.5 to 2 times. It also puts us at net cash at the end of the year of $1 million. It's only slight, I accept, but we'll take it. And that, as I said at the outset, is the strongest cash position we've had since 1998. If you're looking for cultural reference points, Michael Owen scoring one of the goals against Argentina was the first one that came into my mind. That cash profile has compounded steadily and consistently throughout the year, as the benefit of the actions I referred to earlier on have taken effect. It gives us, when combined with our undrawn revolving credit facility at year end, over £800 million of available liquidity, which provides significant resilience in what remains a challenging market backdrop, but also the necessary firepower to underpin our competitive position if market conditions demand it. Being more optimistic and forward-looking, it also gives us the necessary headroom to invest in areas like inventory when market conditions do improve. The renewed cash discipline we've put in place over the last two years has also enabled us to refinance on competitive terms during the year. Across two tranches, we fully refinanced the £250 million corporate bond due to mature in 2026 with US private placement funding for both tranches. and did so on an investment grade basis with a blended coupon across both tranches of 6.27%. We've also managed to smooth the timeline of future tranche maturities, which now run out to 2035. This gives us excellent near-term as well as long-term financial security, as we have no immediate significant refinancing events until 2028. And as I touched on earlier, we are targeting further cash generation opportunities and therefore further deleveraging in 2026. So let me conclude with outlook and guidance. There is likely to be ongoing uncertainty attached to the economic and geopolitical environment, and therefore we will remain focused on what we can control. We've started the task of right-sizing the overhead base of the group. and implementing a more rigorous approach to expenditure generally, and we'll continue to identify and deliver further efficiencies. On the balance sheet and cash generation, we go again. From a guidance perspective, we expect the group effective tax rate to be around 30%. Capital expenditure is expected to be around 80 million for the year, and property profits will be around 5 million. On a like-for-like basis, our interest expense is expected to be around £6 million higher per annum from switching out the 3.75% corporate bond for the PPE financing arrangements I outlined earlier. However, holding the healthy cash position that we currently do provides an offset to this through higher interest income. And finally, we expect a similar level of loss in Toolstation Benelux this year. And Gavin will talk to you more about this when he returns. And with that, I will hand over to him now.

Thanks, Duncan. What I'd like to move on to now is just to really give you some kind of early views of what I've seen within the group. As I said earlier, it has only been 10 weeks. I think we've crammed quite a lot into 10 weeks, but really trying to give you some sort of early observations of what I've seen. And working with the leadership team, we've tried to look at this very much from the point of view of all of the stakeholders. So whether that's customers, colleagues, suppliers or shareholders, but really trying to take a rounded view of what we've got and where we go with what we've got. A dead clicker. So trying to come up with a simplistic way of looking at the group. And what I've done is I've broken the group into three tiers. So different businesses in each of those tiers. And we'll talk about the individual businesses more. I've got some more slides after this one. But if you look at Tier 1, what we're really saying in Tier 1, with Travis Perkins, General Merchanting, or Green and Gold, however you want to refer to it, BSS, Toolstation UK, and Keyline, these businesses are already delivering what I think is a sustainable financial return. That's not to say that they are at the end point and they're performing absolutely at their zenith, but these are businesses that within the group are already giving us a decent financial return. The priority here is to improve the businesses and to really exploit some of the synergies that exist there. It's really important, though, not to confuse exploiting synergies with some grand centralization plan. I think as most of you know, I'm an absolute disciple of the sort of decentralized federated structure within distribution businesses, and that is absolutely core. But utilizing the businesses and really recognizing the synergies is about having a leadership team that understand the power of collaboration and what we can do with these tier one businesses. The Tier 2 businesses, being CCF and TF Solutions, are in a slightly different position. To put some context around it, these two businesses together have revenues of around about £600 million. But in broad terms, these businesses are trading at either side of break-even. So we do need to make sure as we go forward, we recognise the different challenges within these businesses and how we move these businesses from being a roundabout break even to getting into what we would comfortably refer to being tier one businesses. But it's a different set of challenges that we have to the tier one businesses. And also, as I'll just explain in a moment, both CCF and TF solutions have different challenges of their own as well. And then in tier three, we have Benelux tool station. It's fair to say that I think Benelux has been a perennial loss maker within the group for quite some time, and it's also been a cash burn for quite some time. So what I am going to commit to you today is, although I've only been here for 10 weeks, I've been across to Benelux, I've spent time with the leadership team, got a really much better understanding of the challenges that they face, but by the time we stand here and deliver the half-year results in the summer, I will give you absolute clarity at that point of what the plan for the Benelux business is. So just moving on to some of the individual businesses, and forgive me if some of you really know this very, very well, but obviously Travis Perkins Green and Gold, number one in the UK builder's merchant market, 579 branches trading today. Within Green and Gold, we have the sub-brands as well of Benchmarks, we have Hire, and we have Managed Services, all coming under the remit of the new MD, Rich Lavin. Rich was formally appointed as MD, I think, in my second week in the business. So that was great to be able to do that. Rich had been running the business as the interim MD since the middle of last year. He's actually been in the business for over a decade and held a lot of sort of senior finance and operations roles. So although brand new to the managing director role of Green and Gold, a huge amount of experience coming into that particular role. We do believe we've got opportunities that we've already identified in ranging, in sourcing, logistics, and the way that we take the product to market. And I think when we're looking at how we can utilize the facilities that we already have in the group, we'll talk later on about how we can make some of the assets that we've got, like the tool station distribution center, just sweat a little bit harder and bring value into the other parts of the group. One of the areas that we've identified that we think there's a greater degree of collaboration between Toolstation and Green and Gold is in what we would call either the shop or the self-select area, where there is a real margin opportunity if we can be a little bit slicker at how we bring that product to market. Green and Gold is the largest turnover business within the group. In broad terms, it's around 50% of our turnover. So it's a really high potential business for us and a significant platform for growth as we go forward, recognizing that Rich is brand new into the MD's role. But what we've also done is strengthen the spine of the team around Rich. We've got a really experienced commercial director in Paul in there now. And some of you will know Matt Wooster, who was our group IR director. Matt is now the finance director in Green and Gold, which I think speaks volumes about, A, what we think about Matt, and B, the significance of getting a really high-class management team within Green and Gold. Just moving on to Toolstation in the UK. Toolstation in the UK, number two market position, 590 stores. There's a regular theme coming here that you're going to recognize. So, Lakvir was appointed managing director of this business in around about September of last year. But Lakvir has been with the group, I think I'm right in saying, for about 14 years. She's held very senior commercial roles. She's been a pricing director. She's been a commercial director. She's been a finance director. So, brings a huge amount of experience there. to the role of managing director of Toolstation. And I think one of the things that you'll see from the leadership team that we're putting in place, we're bringing through here the next generation of leaders within the group to give us real longevity and a long-term view of how the group should be operated. Within the seven operating businesses within the Travis Perkins Group, last year, Toolstation UK was the number one profit earner within the group. So it's a really very significant business within the group and should be viewed absolutely as part of our core offering. As I mentioned earlier, we do believe there's opportunities to work better between Green and Gold and between Toolstation in utilising the Pynum distribution centre that we have in Northampton. To give you some context around that, Pynum is a half a million square feet high bay distribution centre that we believe can actually work harder and give us better value across the group in distributing for more than just the one business. We have got a new demand planning and forecasting software coming into this business, I believe, around August, September time of this year. One of the areas I think we've been less efficient at in Toolstation UK is inventory management. And this new demand planning and forecasting software will enable us to manage that inventory with a greater degree of diligence and really make sure that we're sweating the assets that we have. And as I said earlier, it's another growth platform along with green and gold, very significant turnover, largest profit maker that we have within the group and should be seen as really important as we go forward. Also in a tier one business is BSS. I think some of you who've been around a long time will recognize this is a business that I used to know very well, having been the CEO there from 2005 through to 2010 and actually selling the business to Travis Perkins in 2010. It's number one in its market. We've got 54 branches. Josie has been appointed as the MD in the middle of last year. I think it's fair to say when I was the CEO there in 2010, I think I'm right in saying that Josie was in her first year of branch management in BSS Peterborough. So, again, although a new managing director has got huge experience, not only within BSS, but also across the whole of the Travis Perkins group. We have got quite a unique distribution model within BSS. We have a superb central distribution center in Magna Park in Leicestershire, but we also have quite a unique big pipe national tube distribution center in Coventry, which is a facility that we have that none of our competitors really do have. So we have got some real unique characteristics within BSS that I think enable us to drive that business forward with quite a lot of vigor. We've also developed over quite a number of years through the national accounts team a real skill in what I would call significant projects. So when you look at airports, when you look at stadiums, when you look at prisons, when you look at these kind of secure environments in which we operate, We've now got a great deal of experience operating on-site facilities that, again, I think is a differentiator for BSS going forward. And just to be clear, while we're in the spirit of openness, in the group last year, BSS was the third largest profit maker that we had behind the top two. And lastly, but by no means least within Tier 1, Keyline, our specialist Sybil's distribution business. Again, number one in the Sybil's distribution market in the UK, 41 branches. A new managing director in Hugh Jenkins. Hugh joined the business. We could do this as audience participation, but in September of last year. I think it's also fair to say Hugh's background is in logistics and distribution. That is wholly appropriate for this business because well over 90% of the business through Keyline is delivered either X yard or from our suppliers. So having someone whose expertise is in moving product from point A to point B in the most effective and the most efficient way is absolutely appropriate in this particular business. Hugh and I have been working on this for a little while now in terms of growth opportunities for this business. We do see particularly in infrastructure. If you look at the areas like power and like water, we think we have got real growth opportunities here. And that also opens up new markets and new product opportunities. So it gives us really a very positive outlook for Keyline going forward as being one of our tier one businesses, again, with that new leadership team. Just moving into Tier 2, so these are the businesses that predominantly have been trading at a roundabout break-even. CCF, which is our dry lining and insulation business, is a structurally challenged business, but more importantly, operating in a structurally challenged market. Dry lining, which is over 65% of the revenue in this business... is very much about high volume, low margin, commoditized, high cost to serve. And we really are going to have to look at how we operate this business and make sure that we can find a more efficient route to market utilizing the assets that we have right the way across the group. I mean, it's fair to say in terms of leveraging margin in this particular business, over 50% of the business is with one manufacturer. So our opportunities even to leverage margin on X yard sales are still a little bit challenged. 37 branches across the UK, new managing director in the summer of last year in Chris. Fair to say Chris has got over 20 years' experience in CCF and has basically done every single job in CCF from working in a branch, getting through to be the managing director. And it shows how much we think of Chris as the MD of this business. For those of you who know me well, he is a Newcastle supporter. That would ordinarily be a challenge in my book, but I think Chris is bang on the right guy to be running this business going forward. We do believe we've got synergy opportunities again with green and gold, looking at that from a distribution point of view, just reiterating, don't look upon that as some kind of like centralization move, but in the categories of plaster, plasterboard and insulation, Green and gold also have volumes in that particular category that run into hundreds of millions of pounds. So I think there's just some opportunities there for us to do what we do a little bit better so that we can find the most efficient and effective route to market for CCF and, again, get that to a point where we believe it can be a tier one business. TF Solutions, which is a business some of you may not know very well, is our specialist distributor in air conditioning and refrigeration. Refrigeration being a relatively new sector that we've gone into, but one that we see with a real opportunity for growth and for development. James is the MD of TF Solutions. He is the longest serving MD that we have in the team, having been in place for 14 months. So in terms of like getting on a bit, you know, he's the one that's been there, seen it and done it during the whole of 2025. To enable us to get the maximum benefit out of this business, we do believe we need to give it greater support in terms of logistics and distribution. We've identified what we need to do to make that happen. But to get to that point, we have to make some systems and processes upgrades first. Those systems and processes upgrades are already in train. They will take place later this year. That will then enable us to move into a more efficient distribution model for TF Solutions. And I think for the first time, it'll give us the ability to react to customers as opposed to just having what I would see as a more inefficient stockholding within the business. intuitively, it's a business that ought to make money. I think the plans that we have in place will enable us to move that business forward as we go through 2026. And finally, in terms of Tier 3, the Benelux business, as I said, my commitment to you is to stand here at the half-year results and give you absolute clarity over the plan for that business. We don't actually have a permanent managing director in that business as we stand here today. It's still an interim. But I have been over and spent time with the management team getting to understand the magnitude of the challenges over there. And I think all I would ask for is, look, Having only been in for 10 weeks, if you can give me that little bit of forbearance through to the half year, but we'll then give you some absolute clarity on where we stand on Benelux. So in summary, we've got a new leadership team. We've got a simplified structure. All of the managing directors now report directly into me. We don't have any intermediary levels there, which I think just gives us a more efficient and more effective communication chain across the whole group. We've identified business improvement opportunities in every business. Don't get me wrong. Some market growth would be great, and we would absolutely welcome it with open arms. But we absolutely can improve the business without that reliance on market growth. And I think making those improvements now will put us in a great position for when the market does turn. The leadership team is very focused on doing the day job, removing distractions, removing the noise around. Let's just focus on what we do within the business today. There's a lot of noise outside in terms of the economy, in terms of the market, in terms of even the global macro situation now. But we will absolutely stay focused on what we can do, which is running the business the best that we possibly can. As we mentioned earlier, we're in the best financial position in terms of balance sheet that the group has been in for over 25 years. And I think in any kind of uncertain market, that is a great place to be. And I think a lot of our suppliers, a lot of our customers, and a lot of our shareholders will take a lot of faith in the business that we're starting here with a very, very strong financial structure. As I mentioned at the very beginning, culturally, we absolutely see ourselves as a branch-based, sales-led organization that can work in harmony with a disciplined approach to cost, to margin, and also to capital allocation. And very, very simply, and primarily around our customers who are the main drivers in us being in business, it's about, can we just be brilliant at what we do? And if we're brilliant at what we do and focus on the simple tasks... then I believe that everything else will follow through. And financially, we're in a great position to support all of the businesses in the group to develop and to recognize their potential. That's the end of the formal part. We're going to move on to Q&A. What I would say in terms of the logistics of Q&A, particularly because we've got so many people on the webcast, if you've got a question, if you could raise your hand, we'll bring a microphone to you. When you get the microphone, if you could give us your name and the organization that you represent, then if you could ask your difficult questions first so that Duncan can answer those and leave your easy ones for the end and I can bowl in there, that would be a great way to run it. I think what we'll do, Sarah, if we start at the very front down here, and then we'll work our way backwards.