Currys Plc U/Adr

Good morning, everybody. We'll be quick. Bruce is going to take you through the numbers of a solid first half performance, and I'll say a few words on what's behind those numbers, and then we'll get straight into your questions.

Bruce. Thank you, Alex. Good morning, everyone. So in a tough economic period and a soft market, we believe our first half results have been robust. Revenue at 4.2 billion is down 7% on a year-on-year basis, minus 4% on like-for-like. But despite the sales miss, our adjusted EBIT at 31 million is up by 7% year on year, and our adjusted EPS has improved by 15%. Our free cash flow in the first half, which is generally an outflow, is an outflow of 10 million, which is 76 million better year on year. Our movement in net debt is minus 32. That's 117 million better. And our total indebtedness, 1482, has improved by 135 million year on year. So stepping through each market, starting with the UK, revenue in the UK was 2.2 billion. That's minus 3% on a like for like basis to reflect a soft market. Our online share of business is flat. And our adjusted EBIT is down by 10 million from 25 to 15, partly as a result of lower sales, but most noticeably because of a loss of mobile settlement that went into our numbers in half one last year. Operating cash flow is back 5 million at 28, and segmental free cash flow after working capital is an outflow of 16 million due to working capital movements. Stepping through the UK EBIT bridge, our gross margin continues to improve in the UK for our third consecutive year. As you can see, a step forward of 10 basis points. And that's despite the fact that we had 11 million pounds of mobile settlement last year, which is part of the 35 million that we described to you at year end. Excluding that, our margin would have been up by 50 basis points. In terms of where's that coming from? Well, it's the same factors we've talked about before, driving service adoption through care and repair and credit, continuing to monetize our customer experience by charging for delivery, for example, not chasing less profitable sales and continue great progress in reducing our supply chain costs. Our operating expense to sales ratio has moved adverse by 50 basis points. However, our total costs are down in absolute terms. We've made cost savings of 32 million in the period from an operating cost perspective, but those costs aren't enough to match the drop off in sales. Moving on to the Nordics, Nordic revenue has fallen more steeply, down 6% on a like for like basis. We have seen an improvement within our online share, and that's through some of the improvements our Nordic business have made to the online website. Pleasingly, we've seen a big step forward in our EBIT, notwithstanding the drop off in sales, increasing from 3 million to 12 million. We've seen operating cash flow improved by four. And very pleasingly, we've seen a healthy step forward in segmental free cash flow as we've seen an inflow from working capital despite the drop off in sales. In terms of our Nordic EBIT bridge, probably the most important development in our first half results is seeing Nordic gross margin recover up 190 basis points and pretty much offsetting all of the 200 basis points drop that we saw last year. that's come through a better balance of trading a more orderly market and obviously we don't have the excess stocks that we had in the first half last year offsetting the margin recovery is a operating expense to sales ratio adverse movement of 140 basis points within the nordics our costs are broadly flat in absolute turn that it's been offset by the fall in sales. That's due to inflationary headwinds that we're seeing and some new store openings offset by substantial cost savings across the Nordic business. Finally, in terms of Greece, which we're treating as a continuing operation in our first half results, We've seen revenue step back after a couple of periods with revenue stepping forward aggressively. It was partly impacted by some wildfires during the summer, but also we're anniversary in some rich government incentives during the course of last year. In terms of adjusted EBIT, a big step forward up to four million in the first half, as we've seen gross margins improved by over 100 basis points. Operating cash flow has stepped forward from four to seven. And segmental free cash flow is an outflow of 13 impacted by adverse working capital movements. Moving on to cash generation, we've seen some significant improvements as we planned. Not only is operating cash flow improving as a result of our higher profits, we've also halved the level of capex in the first half down to 28 million as we talked about tight cost control and lower transformation spend. Our adjusting items at £23 million are down two. All of our restructuring, all of our adjusting items relate to restructuring and property items. We've seen a substantial drop off in cash tax paid. You might remember that in half one last year, there was a substantial amount that related to the preceding year. This year, with lower profit, our cash outflow is £4 million. And cash interest paid has stepped up by one because of higher interest rates. Finally, in terms of working capital, we've worked really hard in this space. Obviously, with dropping sales and our general positive net day stock, we would expect to see working capital move adverse in the first half and with sales declining. The fact that we're only at minus three, I think, reflects a really good performance. And that's after an impact from the growth of our ID business, which is cash negative. After distributions, our closing net debt moves from minus 97 to minus 129. Our balance sheet remains robust via both strong cash management and a reduction within our pension deficit. I've already described the drop off within our total indebtedness, and we've seen our pension deficits improved by circa 60 million to below 200 million, helped by an increase in discount rates, but also an improvement within demographic assumptions. So to conclude, In terms of our current year outlook, our full year view is unchanged, with trading since the end of the period being consistent with board expectations, but recognising we've still got three really important weeks to go, and obviously we'll be talking about outlook more in January. in terms of our cash guidance broadly remains the same capital expenditure of around 80 million net exceptional cash costs on a full year basis of 50 million we're obviously now contracted with a lower pension contribution at 36 and we expect to finish the year with net debt better than the 97 million that we started the year In terms of the Greek disposal, we expect to receive clearance for the disposal in the first quarter of 2024. And following the disposal, we expect to finish the year in a net cash position if that happens during our final quarter four. Let me now hand back to Alex.

Thanks, Bruce. Just to pull out a few highlights. I mean, we said we'd do three things. And the first of them is to get the Nordics back on track. And we're on with that. And we are now on the road to recovery. Now, we don't want to get too excited about a quadrupling of profits of such a low base. But the gross margin improvements behind it, we are pleased with. The 190 basis point improvement that you heard about from Bruce, that's important self-help in a market that's got no better yet. And that's self-help in gross margins from the better adoption rates of marginal creative services in particular, but also accessories in the discipline not to chase less profitable sales and taking some supply chain service operations costs out. And other cost reduction has been successful as well. And the highlight there I draw out is making more of group synergies in areas like IT and outsourcing and GNFR procurement are big contributors towards that £25 million a year of permanent cost out that we've seen. in the nordics and it's worth saying that this self-help from the nordics management team has extended to the longer term drivers of valuable business like colleague engagement and customer satisfaction both of which showed sharp improvements over the half we're a long way from healthy nordics performance there's a long way back to go but we are on the way there and that is pleasing The second thing we said we'd do is keep up the encouraging momentum in the UK and in a still tough market, we're doing so. You've heard that profits steady year on year after the mobile one off and gross margins again stepping forward even in the face of that one off headwind is pleasing. 280 basis points up year on three. And we owe that in particular to growing services, the services that are good for gross margin now, but also for customer lifetime value later. And the highlights there, credit now over 20% of sales, care and repair, customer numbers up to over 9 million now, and mobile subscriptions in ID up 24%. All of these, good for margins, good for customer lifetime value. Bruce mentioned some other margin drivers you've heard about before, monetizing the customer experience, not chasing less profitable sales. But there's one that we haven't talked so much about, which is sold with solution selling. basically selling everything the customer needs rather than just the hardware. And we've worked hard on this and we've been rewarded with a six point improvement in customer adoption rates over online and stores. A long way to go there, but plenty more upside to come from selling the customers the complete solution of products, accessories and services. The UK has seen no less up on costs either. As you've heard, we're on track towards that 300 million of cost out. And the UK has continued to have more engaged colleagues and more satisfied customers as well. More engaged colleagues, up three to 82, top 5% of global companies. Glint now say that we are. And that's no small contributor to more satisfied customers. NPS up fully 500 basis points year on year with all of the customer touch points improving. Third, we said we'd keep the balance sheet strong and liquidity strong and especially important in a turbulent environment. And we are. And as you've heard, if Kotsovlos goes through to expect to be in a net cash position at the year end with a half a billion pounds of undrawn facilities leaves us well set. And it's that strong balance sheet and liquidity that's one reason. uh why we're overall quite pleased with our progress these are solid results where we we are doing what we said we'd do nordics is off the bottom and on the road back the uk and i's solid performance shows uh our momentum continuing there with services growing especially well and that leaves us we believe in a curries that's resilient today and well set to prosper longer term and with that we'll pause and go to your questions

If you would like to ask a question, please press star 1 on your telephone keypad. Please ensure your line is unmuted locally, as you will be advised when to ask your question. So once again, that's star 1 if you would like to ask a question. The first question comes from the line of Matthew Abraham from Berenberg. Please go ahead.

Morning, Matthew.

Thanks for taking my question and congrats on a strong result. So first query is just in reference to the cost savings targets you've got for the full year. Are the announced and implemented measures in H1 sufficient to meet that target or is there going to be the need to introduce and implement new initiatives? The second query is in reference to that step forward in the UK and Ireland's gross margin that expanded in H1. Can you just talk to the materiality of these services as part of that gross margin expansion? And given that that is in growth, as you called out, how material might the year-on-year gross margin expansion be as services continues to grow? Thank you.

Yeah, thanks for the questions, Matthew. So in terms of our costs, as we call out in the statement, over the cumulative three years where we set ourselves a target of 300 million, as of the half year, we're at 240. Our expectation is to get to or to get incredibly close to that 300 million. And if we don't quite get there, the delta would be in relation to the full year effect of the initiatives. We continue to add new initiatives all the time, new opportunities. Alex talked about some of them, for example, outsourcing, procurement, the work that we're doing across our store network and our supply chain network as well. So we are making good progress. In terms of the gross margin improvement, we don't break out the individual components of the bridge that causes that. But services is a very important lever that we pull. Care and repair and the progression that we've made in terms of adoption rates is key. The step forward that we've enjoyed in credit is important. And charging, for example, for delivery and installation are all key parts of our service offer and all playing an important part in that step forward.

The only thing I'd add to that, Matthew, is you want to look forward on gross margins and reasons to believe in continuing improvement. You can find them. I mean, care and repair was certainly not calling a ceiling on adoption rates, particularly online, which accounts for over 40% of our sales, as you know, and where adoption rates currently are much lower. But the significant year on year improvements show that we're on track to continue to narrow the gap between stores and online adoption levels. We're certainly not calling a ceiling on ID either healthy, though it's 24% year on year subscriber growth has been and There's particular upside to come from solutions selling, the sold with solution selling I touched on before. We're very encouraged by how that's going. We've worked hard and we've seen particular success in stores on solution selling and early promising results online, which we're going to continue to build on.

Okay, great. That's really helpful. Thank you. I'll pass it on.

The next question, it comes from the line of Richard Chamberlain from RBC. Please go ahead.

morning richard morning alex uh morning bruce um read from me please that's okay um just a couple um quick ones on the nordics um i just wondered um alex if you just give us an update on sort of net promoter scores there or how um you're thinking about sort of customer service and uh satisfaction um and it sounds like um sort of mirroring the UK, you know, priority insurance or good growth online. How does that sort of penetration rate now compare with in store and where it was a few years ago? Presumably it's going up. And then on the pension, Bruce, I just wondered, have you had any sort of conversations with the trustees recently? I just wonder whether they're sort of sympathetic to the idea of lower contributions now. assuming Greece goes through early next year and when those lower contributions could potentially start to come through. Thanks.

Thanks, Richard. Let me take the Nordics questions first. I mean, in common with the UK, what we've seen is more engaged colleagues and more satisfied customers in the Nordics. We measure it slightly differently. It's happy or not, not NPS, but that's up 40 basis points year on year and 210 basis points year on three. So we're confident that the already very high levels of customer satisfaction are continuing to nudge upwards. And colleague engagement, we're particularly pleased with, which is obviously a big driver of customer satisfaction. That's up five points, 72 to 77. And in the year just past, and you can imagine the rollercoaster of emotions that our Nordics colleagues have felt over the past 12 months uh we're quite satisfied that that shows a leadership team that's not just got the right grip clarity and energy and dealing with dealing with the issues there but also is doing it in a pretty engaging way so we're quite pleased with the colleague engagement and customer satisfaction picture in the nordics that bodes well for the future they're good lead indicators as you know You asked about services growth online in the Nordics and insurance is the one where we've focused on and made the most progress. There's been some systemic improvements online in the Nordics that have allowed a significant jump in insurance adoption. We don't break it out yet anyway, but again, we're quietly quite pleased by the way that increased services adoption, including online, has contributed towards this big jump in Nordics gross margin that you've seen.

Good morning, Richard. Yes, so on the pensions point, as you know, we received great support from the pension trustees when we were looking at ways to protect the balance sheet and improve our liquidity. And we've agreed over the next three years to reduce contributions, £36 million this year, £50 million next year and £78 million. So quite a substantial reduction from where the contributions sat previously. Obviously those three years lead us through to the next tri-annual review 2025 and as part of the normal process we will look at the level of deficit at that point and obviously have a discussion with the trustees about what an appropriate level of contribution will be going forward. Now, the Greek proceeds, I guess, is a separate point. And as we discussed when we did the announcement a month or so ago, we're not going to rush. Assuming that the transaction goes through to our expectations, it will allow us to put the money on our balance sheet and we will then bide our time. We will look at peak trading and make a decision what the most appropriate use of those funds are.

The next question, it comes from the line of Adam Tomlinson from Liberum. Please go ahead.

Hi, Adam. Morning. Morning, everyone. Three questions from me, please. The first one, just delving into the Nordics a bit more with that gross margin improvement. Obviously, a lot of self-help going on there, but can you maybe just talk a little bit about competitive behavior and how much confidence you have that rationalities return to the market there and ultimately, the confidence you have and the scope that gives you to return as the market recovers towards historic levels of profitability. That's the first question on the Nordics. Second question, just on the UK, noting the detail you've given there around ID Mobile and the subscription base up 24% year-on-year, just interested in your thoughts on what's driving that and whether that changes at all your your view in terms of the relative value of mobile operations within the group and then finally just the third question on stock a little bit of color um if that's okay please on the 200 million stock reduction year on year and how you're thinking about stock planning um for the year ahead that's the three questions thank you

Thanks, Adam. I'll take the first two and pass over to Bruce for the third. On Nordic's gross margin and competitive behaviour, we're not assuming the market gets any easier on any of the dimensions that we talked about before. Demand is still quite soft and very soft by historical standards. The inflationary pressures are persistent and the competition remains intense. and uh so the the improvement that we've seen in nordic's gross margins and profit have not come from a more benign competitive environment they've come from self-help now looking forward what do we expect i mean there are two of the big competitors in the nordics feca cowper and net on net complet who've publicly said they're listed companies publicly available information they've said that they're going to solve for more profit and cash and less for growth in the future We'll see. But we're not counting on it. And we intend to continue the self-help actions that are no regrets. And as and when economic rationality and gravity reasserts itself, which it has to in time, we'll be happy to benefit from that. But we're not sitting here waiting for it. We're going to continue with the gross margin and the cost self-help that's seen us well so far and get on a better trajectory. You asked about ID. Yeah, we're pleased. We're pleased with the whole of the mobile category, which is, as you know, has historically been quite a troubled one for us. We said this would be a significantly smaller but integrated and profitable and cash generative category for Curries. We've done all the hard work to make that so. We've got good partnerships with Three and with Vodafone to offer connectivity. um id via uh via three is growing nicely and that gives us strategically it gives us guaranteed connectivity it gives us a nice um negotiating leverage with with other networks but it also it's also a very value additive over the long term yes as bruce said it's you take a bit of a a year one hit on on profit and cash as you grow ID but we're happy to do it because it's a valuable asset that we're building now um your area of expertise rather than mine Adam but people tell us that uh what the asset that we're building here with over one and a half million subscribers by any market valuation uh probably isn't fully reflected within the current market capitalization of the group you know that's for others to That's for others to worry about. What we're concerned with is continuing to profitably grow a really attractive asset here.

Good morning, Adam. Yes, so you're right. Our stock is down almost 200 million year on year. That's down 11%. And I guess underpinning that, there's two factors. The first was an anticipation that volumes were going to be lower. And as we've seen, that was absolutely the case. But at the same time, we've done it in a careful way to make sure that we've got strong availability on the categories that really matter. And therefore, our focus has been to look at working capital in the same way we have cost and capex, which is to really focus on running this business for cash make more rational decisions, chase and clear age stock and excess stock in the business. And I have to say the teams across all of our markets are absolutely doing that. And you said regarding the future, there is much more of that to come. So there are a whole pile of work taking place uh across the entire group we're not ready to talk about it yet because we will talk about it when we've got some some clear results to share but lots and lots of work to continue to improve our working capital position great that's that's very helpful thanks a lot next question it comes from the line of ben hunt from investec please go ahead hi ben hi there um

I just wanted to focus a bit more on the UK gross margin. You've mentioned many tailwinds there from getting out of unprofitable sales, the care and repair services elements, and it seems to be a much more rational market as we've seen from other players. Is there anything that's been restrained in the gross margin improvement there? It's up, obviously, but it's not up a huge amount in this period. I think one of the things you alluded to in the statement is loss of sharing online and you reference higher paid clicks costs within that do you see a way of potentially getting some cost savings through the online channel to make it to make unit economics more sustainable um and then i have another question on cost savings after that i'll take the online question but bruce can go first on gross margin

yeah so um in in terms of uh online gross margin specifically obviously we've taken a number of actions over the last um the last six months in fact that the last 12 months uh to to improve our margins um the most obvious example of that is is charging for delivery um and that that has improved the relative profitability of our online and indeed our store business when the customer wants the product delivering to their home. Part of the focus on making more rational choices has been, for example, to reduce or not chase PPC advertising where it's around products that don't matter. And that's clearly a direct impact on our online business. And we continue through our supply chain and our service business to look to take costs out wherever we can. There's then service adoption, credit adoption, both of them improving within our online channels specifically. So pretty much the full list of things that we talked about, which are improving the UK margin, you can take a read across and say those are improving our online margins as well.

Ben, was your question also about what's holding back total UK gross margins, the headwinds to that?

Well, yeah, I mean, you mentioned all the tailwinds there, but it's sort of not giving you, I mean, it's a modest improvement, I guess, in the gross margin. So has there been any sort of anything holding it back?

Yeah, I mean, well, there were two factors and both of them are in the mobile space. So one I've already described, we had an 11 million. So of the 35 million year on year headwind caused by mobile revaluations, so RPI, mobile settlements with the networks, etc. We anticipated 35 million impact or headwind into this year. 11 million of that was in the first half. So that, as I described, is why On the face of it, it's a 10 basis points improvement, but actually somewhere between 50 and 60 basis points improvement on an underlying basis. The other factor is ID mobile. So as Alex has said, we've dramatically increased our base of ID customers. and as you're probably aware we own those customers and therefore based on the accounting it means that we take quite a substantial loss in the month that we sell the mobile phone and it takes us between 16 and 18 months to get that to be break even over the life of the contracts now of course over 24 months we we do make a profit on all of those id sales they're really important to us and therefore as that part of the business is growing that creates a headwind within our gross margin.

And I think... Sorry, just on that, sorry, Bruce, what's the attachment on subscribers? How many of them are actually getting a mobile phone on top of their connectivity?

It's roughly half.

So, Ben, I think the second part of your question was also touching on UK online market share. Did I understand that right?

Yes, I mean, given that you are, that seems to be where the market share losses are most high. And you've alluded to the fact that it's the higher cost per clicks that's making it less economic. Are there any ways you can improve the unit economics there?

Well, okay, it's an interesting question. I'll probably approach the answer in a slightly different way. So the first thing to say is online as in store, we're not solving for market share. We're solving for sustainable cash flows and profits. That's the first thing to say, and that's true online just as it is in store. So you rightly observed that more than 100% of our market share decline has been online. We've gained share in stores. But when you look at the market share online, most of the decline has been the result of deliberate actions. You talk about PPC, and we're much more efficient now on our digital marketing, but there's also the impact of delivery charging, the decision we stand by, and pricing and promotional discipline, which is, again, we would do given our time again. And then finally, there's a mix effect. If you look at the market, the market has generally mixed towards lower ticket and smaller box, which play against our category mix ourselves. So that's what's going on. Now, even though we're not solving for market share we don't like losing market share we enjoy the benefits of being number one and um so what we're working hard not so much to on the unit economics but we're working hard to make the customer experience easier online to take friction out of the conversion funnel and all of the good work that we've done on site speed on checkout on helping the customers find and buy the right product for them better recommendations but also on sold with solutions which i touched on earlier they're good for margin of course but they're also good for sales and our early uh progress in online at doing a better job of selling the complete solution to customers um is quite promising for the future and we're going to build on it so uh again we're not solving for market share but there are actions underway that um give us some confidence that these trends don't need to be permanent ones okay great thank you

The next question comes from the line of Nicolas from Barclays. Please go ahead.

Good morning. Thanks for taking my questions. I have to follow up on the market share erosion in the UK. I mean, do you expect this trend will continue over the coming months? And do you see any potential negative impact on your buying conditions from suppliers at some point? And the second one is about your working cap improvement in H1. I mean, I appreciate visibility is limited, but could you help us a bit on maybe what we could expect for the year end? I mean, is it sensible to forecast a working cap in flow this year, given, again, the improvement you achieve in H1? Thank you.

So I'll take the first part of that, Nicola. I mean, it's a good question on the impact of UK market share. The short answer is no, we're not seeing and nor do we expect it to reduce our importance to suppliers. And there's a couple of reasons for that. But first, as I just touched on, The market share loss is in online versus in stores and our stores are very important reasons for all the obvious brand showcasing reasons for suppliers to give us concrete support. The second is that the market share loss is skewed towards the smaller ticket and smaller box electricals products where we're less strong. um and again that's that those are those are not our core strength categories the core strength categories in encourages you know our laptops mobile phones fridge freezers washing machines um large screen tvs and the like um where our position has um has remained strong now and and finally as i mentioned before we're not so we're not solving for market share um we we would be happy to see market share declines if we believe that was the route towards maximizing sustainable free cash flows. But we're attentive to market share as well, partly for the reason that you give. So no, we're not flagging these as permanent trends.

um good morning nicholas so so yeah from a working capital perspective as i've already reflected we will continue to make efforts to improve our working capital position um and we expect to continue to make progress in the second half we're not in a position that we want to guide to that um but predominantly because there are two factors that go the other way. As you know, when volumes fall, there is an impact on our working capital. So that's an outstanding question. And as we've already reflected, there's quite a substantial negative cash impact from ID Mobile. So we expect to continue to make progress. We face into a couple of headwinds and I guess we will be able to provide your guidance as we get towards year end. Thank you. Thank you.

The next question comes from the line of Warwick O'Keenes from BNP Paribas. Please go ahead. Morning, Warwick.

Morning, everybody. Morning, Alex. Two quick questions. Firstly, I know you've answered a lot of questions about the Nordic gross margin already, but just help us for the second half. Is there any real reason why you shouldn't see a similar increase in the second half as you've seen in the first half? I think the sort of base of comparison is quite similar. And then secondly, you've not said much about products, really. So maybe you could say a bit more about the replacement cycle and innovation cycle you're seeing at the moment.

Good morning, Warwick. So on the first question, our anticipation is that the progress that we've made on gross margin on an underlying basis will continue. I think the only point to be wary of is that some of the self-help that we're seeing helping us in the first half really did start to land in quarter four of last year. So on that basis, perhaps the comparatives are going to be a little bit tougher in terms of the improvement, but the activities will remain the same.

And to give you a bit of color on products, Warwick, I mean, some of the things that and as you know, we're going to give a proper trading update in January. So all we'll say overall is that since the end of the half year, we've traded in line with expectations. But you asked about some color in gaming. We've seen both consoles and AAA console games go well, whether it's PS5 or Xbox Fives or Call of Duty games. as an increasing proportion of the customer's entertainment budget continues to be spent at home. Likewise, it appears that a larger proportion of the customer's hair care budget was spent at home over the Black Friday period, and we saw a good performance in hair care tech to show for that. um plenty of customers seem to be redirecting coffee spend from the 375 latte that you get on the high street to having their own machines at home and bean to cup coffee machines again had a good black friday period and surveys show that 60 fewer customers will be eating out this christmas and that's been uh reflected in a still strong air fryer trend I don't know, Warwick, whether you've got the bigger and better dual zone product, but if you haven't, I suggest you get to Curry's immediately after this call, because they're selling out fast, and that market's in good shape. Excuse me. But also, you know, in our more conventional markets, Windows, computing's going well, over-ear headphones going well, and A-rated kitchen appliances are going well as customers who care about lower total cost of ownership, as well as sustainability, see the benefits of spending a bit more upfront. So those are some highlights. I mean, you asked about the replacement cycle, and if you wind back to COVID, we saw a big boost in sales of technology as customers um saw technology matter more to them in their lives we still see technology playing a bigger role in people's lives that obviously hasn't been reflected in the market staying strong the market's still down um year on year uh this year longer term we will see because there is a lot there is a larger installed base of product in customers homes and carries having 80% of UK households as customers should be well-placed to benefit from that. But clearly the market is not in a strong place right now.

Got it. Thanks very much, Alex.

Thank you.

Before we move on to the next question, as a reminder, please press star one if you would like to ask a question. And the next question, it comes from the line of Simon Bowler from Numis. Please go ahead.

Morning, Simon. Good morning. Two for myself, if okay. One, obviously assuming the Greek cash comes in at the start of next calendar year at some point, and that's just used to kind of improve the strength of the balance sheet. Can you tell us how we should be thinking about the impact that will have on your net finance charges for fiscal year 25? And then secondly, can you just remind us where you are on kind of employee pay versus the national living wage and sensitive subjects? Any thoughts you may have around how you plan to manage that as you come through to that impacting in April?

Hi, good morning, Simon. So on your first question in terms of the impact of the excess cash at current interest rates, we estimate around £10 million on a full year basis.

And you asked about the employee pay. As we've said before, we are paying our frontline colleagues 37% more than we did five years ago. And that's one of the reasons that we've got the world class engagement scores that we've got with frontline colleagues. That said, we didn't sign up to the National Living Wage Foundation because this is an important part of our costs and we think it's our job to keep control uh of those costs we'll see what um what we do in response to the uh the big spike in the minimum wage that the government's just announced um and but we have the flexibility to respond and clearly we'll pay above national minimum wage but whether or not we go the whole hog towards the national living wage we will see and that will be a balance of controlling our costs with the maintaining the colleague engagement and retention that matters a lot to us

Okay, great. Thank you. And then sorry, one final really geeky one. We don't necessarily have to go into full detail of it now. Can you just kind of touch on the ID mobile accounting? I just want to fully understand why that's the gross margin headwind for an attached phone. I presume your COGS effectively is the cost of that phone. And what are you recognising in terms of revenue on day one? Is that some sort of estimate of future bill spend or how does that part work on an ID contract?

Yeah, that's right. So basically, we take an element of the revenue upfront to reflect the balance between the cost of the handset and the total cost of provision. So it's not as if we simply take 1 24th of the revenue each month, but there is nevertheless an upfront loss that we make from a P&L perspective. We then recognize the remainder of the revenue over the life of the contract. Does that make sense? Cool, thank you. Yeah, cool. Thanks, Simon.

The next question comes from the line of Nick Coulter from Citi. Please go ahead.

Hi, good morning. Hi, two very quick questions, please. I'm not sure that the granularity is available, but are you able to share your relative market share performance in the categories that matter to Curry's, please? It does sound like you're winning where you choose to play. Now, I guess following on from that, And more generally, how do you see the UK consumer at this point? I guess as Simon touched on it, there seems to be some degree of wage inflation that will inevitably continue to play through. Thank you.

Yeah, as you may know, we don't break out the market share at that level of detail. But what we can say is that if you look at it through a channel lens, we've gained market share in stores at the same time as we've lost share online. And online, both in the market and for us, is disproportionately weighted towards the smaller box and smaller ticket categories uh where we are less strong and which matter less to us economically so if you wanted to infer from that that our market share has held up better uh in our core categories than it has overall then you'd be right um the broadening out to your broadening out to your question on the the uk consumer it's clearly very hard to read um and you could take two different points of view on it one one the more prudent point of view which is the basis of our planning by the way uh is that consumer confidence remains fragile the housing market is in the doldrums disposable income is still under pressure the only about 50 percent of the impact of increased interest rates has hit the consumer so far um so we'd be well advised to plan prudently for the year ahead which is what we've done and you know basis of our of our budgeting and our three year planning does not assume a recovery in the UK consumer or in our market. So that's the sensible basis for planning. There is a slightly more cheerful point of view that shows that disposable income has risen the latest ASDA tracker is in better shape, the overall trend with some bumps in consumer confidence is up over the past six months, that employment remains high, which is important, and retained savings for this stage of the cycle are pretty strong. So you could, if you wanted to, construct a more encouraging scenario looking forward for the UK consumer. That would be great. We'll benefit from it as conditions improve, but we're not depending on that. We're focused on the self-help that seniors get this far.

Brilliant. That's very helpful. Thank you. Thank you.

There are no further questions in the queue, so I'll now turn the call back over to your host for some closing remarks.

Well, thank you very much. My first closing remark will be to remind this group of high net worth individuals that there's plenty of time left for Christmas shopping. And Curry's has some fantastic deals, which themselves have acknowledged to be by far the best deals in the market, beating all of our competitors into a cocked hat on the deals that we've been offering. And we're not done yet. So for those of you who are a bit late thinking about your loved one's Christmas presents, you know where to go. As for the results, we're not getting carried away. This is a solid performance, and it's another step towards the curries that we know is our full potential. But we're doing what we said we'd do. We're getting the Nordics back on track. We're continuing the UK's momentum. The business balance sheet liquidity remains strong, and we intend to build from there. So thank you all, and have a good day and a great Christmas.