Autosports Group Limited (ASG) Earnings Call Transcript

Thank you for standing by, and welcome to Autosports Group Limited FY '25 Full Year Results Analyst and Media Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Nick Pagent, CEO. Please go ahead.

Thank you, everyone, and I appreciate you joining us this morning for the investor presentation of the financial results for Autosports Group for the full year of FY '25. As the moderator noted, my name is Nick Pagent. I'm the CEO of Autosports Group. Joining me today on the call is Aaron Murray, the CFO of Autosports Group. This morning, we'll start with a brief presentation on Autosports Group covering our FY '25 financial highlights, our operational highlights from FY '25, our outlook for FY '26. I'll then pass on to Aaron, who will provide a summary of the FY '25 statutory results and analysis in the shift in trading from the first half of FY '25 through to the second half of FY '25. Aaron will then present an update on our margins and operating costs, an outline of our new improved funding model, a summary of our key balance sheet and cash flow drivers for FY '25 and into FY '26. Following this, I'll give you an update on Autosports Group's progress against our consistent but accelerating growth strategy. Part of this will involve the announcement of a number of material and immediately accretive growth initiatives with some of our brand partners. As we move through the presentation lodged this morning with the ASX and also on our Autosports Group investor site, I will, where possible, note the relevant slide numbers for those who are following the pack. If we start now at Slide #3. Trading conditions throughout FY '25 improved quarter-on-quarter. The first half was challenging. The market was down 7.4% and the luxury market was retracted by 13%. The second half of the year saw month-on-month improvements. The luxury market returned to growth with a 2.8% growth rate in the second half of the year, as interest rates fell and consumer confidence increased. Within this framework, Autosports Group delivered a solid top line result dominated by the improvements in the second half. Revenue was up 8% to $2.86 billion. Net profit after tax of $32.9 million was ahead of expectations, and the Board approved a final dividend of $0.045 fully franked, bringing the full year dividend to $0.08 per share. On a normal and underlying basis, the EBITDA was $118.4 million pre the impact of AASB 16 and net profit before tax was $47.1 million. Operating cash generated in the business was solid at $116 million. If we turn to Slide 4 now to touch on our operational highlights. As I mentioned in the opening, improvements in trading conditions through the year were material. Within the $47.5 million normalized net profit -- net profit before tax, the result in H2 was 33% higher than H1. The improving market helped, but as you will see in Aaron's presentation, we were also active in improving our stock depth and our stock mix. We were active in driving our OpEx ratio improvements, and we were active in setting up businesses to make use of the improving market conditions that we think will come through in FY '26 and FY '27. We added 6 additional greenfield sites to the business with Polestar and Zeekr, all but one were within existing established sites, driving up revenue per site and impacting our operating leverage. We entered a new $350 million syndicated debt facility to improve our funding model and give us firepower to grow. We completed and successfully integrated the Stillwell Motor Group, extending our collaboration with BMW and Volvo, adding in the FY '25 financial year, an additional $241 million in revenue. Earlier this month, we announced the acquisition of the Porsche business in Canberra. This is our first Porsche dealership and it will be settling on the 1st of September. We look forward to working with the team in Canberra and look forward to working with the new brand for Autosports Group in Porsche. We worked on expanding our collaboration with our existing partner OEMs. And later in the presentation, we will outline some growth with Mercedes-Benz in Canberra and in Southport. We'll also outline further growth within the Geely Holding Group -- group of brands with new greenfield sites with Volvo and Geely. There's a lot on, and FY '26 will continue the growth theme. If we move to Slide #5, I'll give you a snapshot of the FY '26 outlook before handing over to Aaron. The new vehicle market is expected to continue to improve, particularly if interest rates continue to fall. Our used car business, service business, parts business and collision repair business are predictable and resilient. They are expected to continue growth on trend rates. Higher revenues and better site utilization is expected to improve the operating leverage through FY '26 with revenue growth also being driven by the full year cycling of the Stillwell Motor Group acquisition and the new addition of Porsche Canberra, Mercedes-Benz Canberra and the greenfield sites in Volvo and Geely. Further into FY '27, we will see the launch of our new Mercedes-Benz site in Southport. Further growth opportunity remains, and we are currently assessing further on-strategy, immediately accretive acquisition opportunities. Finally, July has started well. Revenues in July were up 13.5% on the prior corresponding period. New vehicle order write was up 20.2% on the prior corresponding period. It's a good start. I'd now like to hand over to Aaron so that he can go through the statutory result, the first half to second half normalized analysis, leverage opportunities, balance sheet and cash flows. Aaron?

Thanks, Nick, and good morning to everyone joining us on the call. If you move to Slide 7, I will talk you through the statutory result. The statutory result reflected in an 8.2% increase in overall revenue, primarily driven by the acquisition of the Stillwell Motor Group and improving new vehicle market. Interest costs were higher than the PCP, largely due to increased inventory levels and debt funding associated with the Stillwell acquisition. This acquisition also contributed to higher acquisition-related amortization and additional impacts under AASB 16 from acquired leases. Net profit after tax for the period was $32.9 million. This was impacted by $3.6 million in acquisition and restructuring costs, which related to recent acquisition opportunities and the successful completion of a new syndicated debt facility. The result also includes a $5.7 million reversal of a prior period property impairment. The chart on the lower left side provides a detailed reconciliation between statutory profit and normalized profit. If you turn to Slide 8, I will run through the improving conditions in H2 FY '25. The second half of FY '25 saw continued improvement in the underlying market conditions. Combined with ASG's targeted acquisition strategy, this resulted in a 12% increase in new vehicle revenue in H2 compared to H1. This is a strong result, and it's pleasing also to see the VFACTS data show the luxury market returned to growth of 2.8% in H2 following a 13.2% market decline in H1. Our higher-margin back-end departments of service and parts also performed well, delivering a 6% growth in H2 over H1. Notably, approximately 90% of H2's revenue growth come from lower-margin front-end revenue streams. Whilst this shift in mix led to a slight reduction in gross profit margin, down just 0.06% from H1 to H2, the increased revenue still contributed to higher absolute gross profit. This, in turn, drove improvements in operating leverage reflected in the stronger OpEx, EBITDA and PBT margins. Importantly, the growth in the front-end revenue is expected to fuel further opportunities in our high-margin back-end departments moving forward. Overall, the combination of increased revenue and disciplined cost management is driving improved operating leverage. As a result, normalized PBT for the second half was up 33% on the first half. Encouragingly, early indicators for FY '26 are positive, with July revenue up 13.5% on PCP and July order write up 20.2% on PCP. If you turn to Slide 9, I will talk you through ASG's historical operating leverage. ASG's historical acquisition-led growth has successfully diversified the group's brand portfolio and consistently enhanced operating leverage. As shown on Slide 18 later in the presentation, since listing in FY '17, ASG has significantly broadened its brand mix, supporting overall maturation of the business. This diversification has driven improvements across all margin lines and helped insulate the group from fluctuations in individual brand performance cycles. Looking ahead, operating leverage is expected to continue improving through further acquisition-led growth. In addition, ongoing optimization of site utilization is expected to drive increased revenue through existing retail outlets, while incurring minimal additional operating expenses. Our current inventory position, along with the integration of new Mercedes-Benz agency sites is expected to continue to support strong gross profit margins. Any future interest rate cuts as well as the full year benefit of FY '25 rate reductions will further support improvement in PBT margins. If you turn to Slide 10, I will talk you through ASG's new debt facility. At the end of June 2025, ASG entered into a new syndicated debt facility to the value of $350 million. The new facility is funded by our existing OEM financiers, BMW Australia Finance, Mercedes-Benz Finance and have been joined by major domestic banks, Commonwealth Bank and Westpac Bank. We're extremely pleased to have our OEM funders committed to this new facility and committed to ASG's future growth, and we look forward to building long-term relationships with the 2 major domestic banks that have joined us. This facility replaces the previous funding model, where expansion was funded primarily through operating cash flows and short-term debt facilities. The new facility is agile and ready to supercharge immediate growth with $110 million of funding available. The facility's revolving structure removes the need for the aggressive debt paydown approach previously required. It improves future cash flows by $25 million per annum. The negotiation has resulted in reduced cost of debt with savings of $1.7 million per annum on like-for-like debt. The facility has improved covenants that are more aligned to the scale and profile of ASG's business. All future acquisition-led growth will now likely be funded out of this facility and the borrowings will be reflected as non-current liabilities on the balance sheet. ASG's planned FY '26 capital management plan remains consistent with prior years targeting acquisitions, facility improvements, strategic property investments and shareholder returns. In FY '26, we have $40 million of planned capital expenditure with the acquisition of the Porsche Centre Canberra, existing showroom upgrades and the acquisition of the Southport Queensland property. This CapEx is expected to be funded -- this CapEx is expected to be funded with $10 million in cash and the balance funded through long-term debt. If you turn to Slide 11, we'll run through our balance sheet. ASG closed with cash of $43.8 million, a corporate debt balance of $240.5 million with property assets independently valued at $24.8 million. The property valuations were all completed in June 2025 and are currently sitting on the balance sheet at their written down value of $215 million, leaving property equity of $29.4 million not realized on the balance sheet. ASG's net debt moved from $170 million in FY '24 to $197 million in FY '25, largely due to the Stillwell Motor Group acquisition. As we discussed at the half year briefing, we were not overly happy with our vehicle inventory position, and we had a plan in place to rectify. The new vehicle stock holding has improved from 104 days of inventory to 84 days. And with new vehicle revenue growth of 12% in FY '25 and July order write up 20% on PCP, our new vehicle inventory is now in a great position for FY '26 and will underpin stable margins in the new vehicle department. Our used vehicle supply remains strong with fast-turning stock negating margin pressure in used vehicles. If you turn to Slide 12, we will look at the FY '25 cash flows. ASG is a capital-light business that has generated strong and consistent cash flows. In FY '26, operating cash reached $116 million with cash conversion ratios of 115%. The strength of the cash generation underpins ASG's capital management strategy. The net increase of corporate debt of $33.9 million was mainly to fund the Stillwell Motor Group acquisition and the construction of the Macgregor Volkswagen site. Dealership expansion and improvements of $23.9 million to maximize productivity and customer experience and ultimately support organic growth. Acquisitions of $59.9 million spent on acquiring the Stillwell Motor Group, the buyout of the prior minority shareholder in Alexandria Mazda and the final settlement of Auckland BMW. Dividend payments of $23.3 million were returned to shareholders. Looking ahead, ASG intends to remain consistent in its capital management approach, balancing growth with shareholder returns. Dividend payments will continue within the disclosed range of 55% to 70% of NPAT. And with that, I'll hand back to Nick.

Thanks, Aaron. If we move on now to Autosports Group strategy. It is, however, a live document, and we constantly test our strategy to check that we're heading in the right direction. All of our operational decisions in FY '25 sit within this framework, as we drive our business forward. In FY '26 and beyond, our shareholders can expect our actions to sit within this framework. Simply put, it's Autosports Group's strategy to represent the world's greatest luxury automotive brands in the best locations. If we move to Slide #15. The way we make ourselves attractive to these brands is also simple. We've become the highest market share, lowest cost, operationally excellent distribution source for our OEM partners and their customers. We do this by being the luxury OEMs partner of choice. We do it their way. We're consistent, reliable and low risk. We do it from the best locations, driving customer and OEM outcomes and improving our cost of doing business. We look after the OEMs customers with great facilities, great staff and attention to customer outcomes. Operationally, we are excellent. We run strongly on the OEM scorecards. We do what we say we will do. We're able to invest in transformation, and we run a profitable business. If we move to Slide #16. Slide #16 articulates the drivers or levers, if you like, to our success. One is relationships. Our OEM relationships are long-standing. They're committed, and they sit within the platform of being a preferred partner. Our property decisions are key as well, the right location, the right cost base and a flexible approach. On the customer CRM capability, a business now with a 1.2 million person luxury car buyer database, quality facilities, understanding the importance of the difference between the brands that we represent and how we deliver the individual brand experiences. Market knowledge -- we're the biggest luxury player in the market. We have the largest luxury management team. We're informed and confident. We have capability on a funding basis, on a management bandwidth basis, and we have a flexible template for growth. If we move to Slide #17. Slide #17 shows our track record. It shows how our strategy has worked in practice. We outperform, we grow, we do it on strategy and our runway fall. Our capacity to execute is enhanced by the growth and scale. The levers in this are very straightforward, on-strategy acquisitions, complementary greenfields and constant attention to the core business improvements. Slide #18. Since listing, Autosports Group has executed 39 acquisitions and opened 15 greenfield sites. So if you think about what I said 2 slides earlier, we do what we say we're going to do. We said that we would grow and consolidate the business. We said we'd do it with complementary acquisitions within the luxury business, and we've done that. Our brand portfolio has increased, giving us geographic and brand-based resilience, but it's remained on strategy, quality acquisitions with quality brands in quality locations. Over the last 2 years, our template has developed to include expansion within the Geely Holding Group's brands, and I'll speak to that a little bit later. We move now to Slide #18 -- #19. Improvements to the core business are part of the strategy and the constant attention to improvements is key to our strategy. Multisite and multi-brand synergies, the financing, real estate, senior management complexity, the CRM, as I spoke to earlier, with our 1.2 million database of luxury buyers. To give you an example of how this works in practice, Autosports Group has a headcount of 38 people in its marketing department. That's 1 person for every 2 dealerships, but no luxury business in Australia has the firepower to deliver 38 people in the marketing department and drive synergies. The same can be said on IT and transformation, where we have a 29-person headcount driving our systems and making efficiencies in our business realistic. Again, it drives operational efficiencies, less than 1/3 of a person per dealership, but 29 people in IT is significant. We have luxury super sites in our business, and it's a key part of our property growth strategy, which I'll touch on in a moment. We can generate synergies in inventory with pooling of stock. We can move people in businesses with a huge talent pool of luxury qualified people inside our organization. If we move now to Slide #20, our property strategy. Our growing strength has allowed us to gain the benefits from our property strategy, and we're starting to see them bear fruit at the moment. As Aaron mentioned earlier, the current market value of Autosports Group's property of just on $245 million now exceeds our total corporate debt. This is the first time that our property portfolio has exceeded the total corporate debt of the company. That gives us enormous strength within the business. Owning our key properties has allowed Autosports Group to control the critically important sites that are attractive to our OEM partners. They've allowed us to build flagship luxury precincts, driving our occupancy costs down. And over the next 18 months, we'll add another 2 properties to this strategy, and we can do this because of the support of our financiers with the syndicated debt facility that Aaron spoke of earlier. In Southport, we'll buy a site for $17.5 million, which will be anchored by our Mercedes-Benz brand. In Canberra, we'll buy a site in the Phillip Automotive Hub, again, which will be anchored with Mercedes-Benz, and it will settle in October of 2026. If I turn now to our growth -- our accelerated growth strategy and move to Slide #22. We intend to use the combination of the improving market dynamics and the strong base our consistent strategic work has given us to accelerate our growth. We reaffirm today the growth target of $250 million in revenue growth from acquisitions per annum. This growth can be accelerated because of Autosports Group's scale and our luxury brands. It can be accelerated because of the increased funding capacity, and it can be accelerated because of our strong track record with our OEM partners. The growth parameters have not changed and remain compelling in terms of return on investment, return on capital employed and EPS accretion opportunity. When we're acquiring businesses, we look to buy businesses at between 4x to 6x net profit before tax in the right locations. Greenfields growth, we look for the right brands on a low-cost base, reducing the time line to full profit productivity of those businesses. And in FY '26 and FY '27, we'll add at the minimum, Porsche Center Canberra, Canberra, Mercedes-Benz, Southport Mercedes-Benz, Geely in Leichhardt and Volvo Gold Coast. To look at the first of those on Slide #23, the Porsche acquisition that we announced about 6 weeks ago. An on-strategy acquisition of the Gulson Group in Canberra strengthens Autosport's luxury brand portfolio and signals Autosports entry into the Australian capital territories market. The new brand for us, not only a new brand, one of the great brands in the market, indeed, the highest value luxury brand in the world. The business has a high margin, and it comes within our acquisition matrixes. We believe improvements can be added with Autosports scale. We believe there is an opportunity to grow our Prestige Auto Traders used car business in the ACT. And we now have a strong profitable base established within Canberra that can help grow our luxury business in the ACT. If I move to Slide #24 and speak to some growth opportunities that we have with Mercedes-Benz. Our opportunities for collaboration with Mercedes-Benz have been accelerating. These opportunities are driven by Mercedes-Benz preference for agents that can deliver a hub-and-spoke multiple site representation, agents that can deliver strong customer outcomes, agents with the capacity to invest in Mercedes-Benz corporate identity and agents with a track record of success. Our disciplined strategy has helped us position ourselves well here. Autosports provides an unrivaled luxury platform, benchmark customer outcomes and have capacity to invest. In FY '26 and through into FY '27, Autosports Group plans to double its Mercedes-Benz sales, firstly, in Canberra and secondly, in Southport in FY '27. If I turn to Page #25 to outline the matrixes on the acquisition of Mercedes-Benz Canberra, which we're announcing for the first time today and exchanged into a binding contract last night. The transaction has Autosports Group paying approximately $3 million for the business and assets of Mercedes-Benz Canberra, and we expect the settlement of the business to be in October of 2025. The transaction is expected to be immediately EPS accretive for Autosports Group. Autosports Group will be entering a 1-year lease at the current Mercedes-Benz site at Fyshwick for a cost of $1.06 million per annum. We will also be purchasing an 8,000 square meter site within the Phillip Automotive luxury precinct at 158 Melrose Drive, Phillip for $16.25 million. We expect that settlement to occur delayed by a year in 2026 in October. The strategic rationale between -- for this acquisition, of course, is it deepens our Mercedes-Benz relationship. It expands our business in the ACT post the Porsche acquisition and gives us the great luxury brands in the Canberra region. The improved site location on an owned real estate basis provides the opportunity to grow and control costs, whilst delivering a better outcome for the OEM partners. I'll move to Slide #26. Autosports Group is to expand its collaboration with Mercedes-Benz with a new site in Southport on the Gold Coast. The new Southport site will link with other Autosports Group sites in Macgregor and Toowong to deliver Mercedes-Benz increased synergies, a consistent hub-and-spoke model and all new facilities in Southport. Initially, Autosports Group will operate its sales from a facility at 138 Ferry Road in Southport commencing in the first half of the '27 financial year. During this period, Autosports Group intends to develop a purpose-built Mercedes-Benz facility at 68 to 74 Nerang Street, Southport. The combination of the Canberra and Southport businesses as I noted earlier, is expected to double Autosports Group's Mercedes-Benz volume. If I touch quickly on the property at Nerang Street, just under 9,000 square meters in Downtown Southport. Settlement is expected in October of 2025, and it sits with holding income of just under $1.7 million. Price of the property is $17.6 million. Development approval and -- development approval and the build process is expected to take approximately 2 years for the site and the site is large enough to host other luxury brands as well as Mercedes-Benz. If I move to Slide #27 to touch on greenfields growth. In FY '26, Autosports Group announced 6 new greenfield sites with Geely Holdings Group brands, Polestar and Zeekr. Today, we announced another 2 sites for Volvo and Geely. Autosports Group now has 14 Geely Holdings Group sites across Australia. These sites have had no acquisition costs. They've been set up largely on existing footprints. They've been immediately profitable. Polestar has tracked ahead of our expectations. Zeekr has tracked on our expectations. Zeekr, however, has its main volume car commencing deliveries in quarter 2 of FY '26, and we're looking forward to that with some anticipation. For those of you that don't know much about the Geely Holding Groups, I'll refer you quickly to Slides #28 and 29 to show the brand portfolio and the scale of Geely Holdings Group. Geely Holdings Group is currently the 10th biggest manufacturer in the world with 3.34 million cars produced a year. It runs across the brands in Australia, Geely, Zeekr, Volvo, Polestar and Lotus. Those brands sit within Autosports Group's template, and we look forward to working with Geely Holding Group's over the next years as it expands into Australia. If I return to the [ FY '26 ] highlights, the outlook, and then I'll open the call up for any questions that you have. In FY '25, the business had a normalized net profit of $47.1 million. We launched the greenfield sites with Polestar and Zeekr. We entered the syndicated debt facility. We completed the acquisition of the Stillwell Motor Group, expanding our BMW, MINI and Volvo presence. We entered the agreement to buy Porsche. We continue to expand our collaboration with Mercedes-Benz in Canberra and in the future in Southport. And we've announced today a further extension of our relationship with Geely Holdings Group with the new Volvo and Geely site. On Slide 32, our outlook to recap, we expect the new car market to continue its improvements. We expect our other divisions to grow at a predictable and resilient pace. We see the higher revenues coming through from the increase in the new car market and the improvements that we're making with our facilities, particularly in relation to the greenfield sites being utilized by existing footprint to improve our operating leverage. Our growth will generate further revenue. Stillwell Motor Group, Porsche, Mercedes-Benz, Volvo and Geely will add to our growth through the year. We continue to assess even further acquisition-led growth. And as I said earlier, July started well, up in revenue and up in order write. I'd now like to take the opportunity to open up the line for any questions that anyone may have.

[Operator Instructions] The first question comes from the line of Sophia Mulligan with Macquarie.

Congratulations on the result. I just had a few. Firstly, on gross profit margins. Maybe if you could just talk to your expectations over the next year or so. Obviously, the new car market had a bit of an improvement in the last half. How that affects the gross profit margin moving from here?

Thanks, Sophia. I've got a cold and I'm coughing away here. But let me start on that one. Firstly, in the second half of last year, new car revenue grew more than we expected. And that has proven to be, I guess, the hero and the villain on gross margins. It's been the hero because for the first time in a long time, we've seen a growing new car market. It drove 85% of our growth in revenue. But new cars, as you know, is our lowest gross margin area of the business versus revenue. So it actually pulled down our gross margins a tiny bit during the period. I can confirm to you that across every individual area of our business through new cars, through used cars, through service, through parts, every individual division that we had saw increases in the gross margins that were generated and the gross margin percentages. So through the period, the new car growth actually improved. And to get to the substance of your question, which is H2 traditionally, because we see a bigger part of the volume of the year coming through in the second half of the year, we expect our profit -- our gross profit margins to tick up a little bit, but not massively during the period, and we expect them to be certainly resilient, but ticking up a little bit.

Sorry, you expect them to tick up a little bit in first half '26 or full year '26?

It will be both.

Great. And just, maybe if we could talk to quickly your expectations for the new vehicle market from here. Clearly, we can see in the data that May through July has been really strong, and you printed a great trading update today for July. Do you -- are you expecting those sorts of conditions to continue with a few rate cuts hopefully coming through from here additionally to the ones we've had? Or do you think things will start to slow?

Look, we believe the rate cuts have helped the market along the way. And if they continue, we believe that consumer confidence will increase. That's the first point I'd make. The second point I'd make is we're actually covering across pretty weak comp set numbers. The second half of last year saw the luxury market, particularly, which is the market that we operate in, 13% down, and that was a pretty tough period. So do I expect to have close to double-digit growth opportunity in new car revenue during the period? Yes, it's an opportunity for us, and I think that's a reasonable line to take through [ them ].

Great. And maybe just last one quickly on acquisitions. So you've obviously announced a few today, which is exciting to see, and you're well funded to continue from here. Maybe just in terms of the $250 million target you have had historically, are you still expecting to hit that target this year? Or do you think you might exceed it with the success you've had so far?

Look, we've had a terrific start. We've certainly got to hit it, and there's enough opportunity around there on acquisition targets, which are right on strategy, the things that you'd expect us to be doing and providing we can get to the right sort of deal levels on them. Yes, we -- there's a chance that we could be above that $250 million. We're not there yet, though, Sophia.

Sorry, just one more, if I may. And just in terms of the '26 outlook, so obviously, there will be the benefit of the rate cuts annualizing through that we've already had plus any additional ones that we get. Is that a fair way -- a very simplistic way, but is it fair to think of taking the second half PBT adjusting for some seasonality and annualizing that through? Or is that too optimistic?

No, I don't think that's too optimistic. I think the -- I think there's some operating leverage, and we signaled that in the outlook, and we signal that, that operating leverage will run down to the PBT line if we are able to go and increase the revenue through the existing template that we have. And that's what we're working towards. So we're expecting and we're working the business to go and expand our net profit before tax margins through the year. And we think that even the second half of the year, 1.8% return on sales, that margin, it's to the low end of the scale that we've had over the years, and we want to improve it from where it is.

Next question comes from the line of James Ferrier with Wilsons Advisory.

Just can I follow on from Sophia's question there, first of all, around gross margins. I'm interested to know what your thoughts are around the quantum of improvement in gross margin that exists in the order book relative to what you printed in second half '25. And obviously, I'm just talking about new vehicles here, not the group. So just within the new vehicle part of the business, what the margin improvement looks like within the order book versus what was printed in the second half and whether or not you're continuing to see further margin improvement in more recent order write versus what's in the order book?

I'll start with that. And the first thing I'll say is I won't give you an exact of the margins in the order book. I won't do that for 2 reasons. One, I don't want to be disclosing it all the time. And secondly, it's actually going to give you a misleading approach because the order book always has significantly higher grosses, and the cars that we sell off the showroom floor are generally the ones that we discount a little bit more, James. So I won't say that. But I will say that the grosses in the order book are materially higher than we printed. I will say that the gross -- the new car grosses were flat through January and February through March, April, May, June and July, every one of these months have seen improvements in the gross margins that we've delivered in new cars.

Yes. Great. Thanks, Nick. That's helpful color. Then looking into the outlook, I mean, you've given some really helpful color today on the operating leverage that exists in the business. And what struck us is more of the top line. And when you think about where the market and consensus is positioned, FY '26 consensus revenue is basically flat on the annualized second half '25 number that you've just delivered. And clearly, there's some organic growth that started the year strongly. The market can take a view on how that might continue or otherwise. But can you give us a bit of a rough estimate of what you think the revenue contribution is from the recent acquisitions in greenfield because there's been quite a bit of activity there. And I just want to get a sense of what sort of contribution that might bring on top of whatever the organic growth is going to be.

Yes. There's a little bit of work to do on this, James, over the next couple of weeks. One of the reasons is some of the growth is with Mercedes-Benz. Mercedes-Benz is an agency model, which won't carry revenue behind it. So it won't be as strong in absolute revenue terms in terms of growth than you would expect for the profit that it can generate. And for that reason, I think I've been thinking more in terms of the EPS opportunity than the revenue growth opportunity. And we think that with all of these acquisitions in, they're conservatively looking at a region of [ 10% plus ] EPS growth.