Good day, welcome to the Peter Warren Automotive Holdings first half FY23 results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the one on your telephone keypad. If you would like to withdraw your question, press the star one again. For operator assistance throughout the call, please press star zero. Finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome CEO Mark Weaver to begin the conference. Mark, over to you. Thank you. Good morning, everyone, and thank you for joining us to discuss Peter Warren Automotive Holdings' half year financial results for the six months ending 31 December 2022. My name is Mark Weaver, your Chief Executive Officer. Joining me today is our Chief Financial Officer, Victor Cuthell, who will be assisting me in presenting our results. I'd like to welcome Victor to his first investor presentation following his appointment in November. This presentation, along with the financial statements, have been lodged with the ASX for your information and can be found on our website at www.pwah.com.au. On slide two of today's pack, you will find our agenda. Victor and I will shortly provide you with an overview of our H1 FY23 results, together with a summary of our financial position before closing with an overview of progress against our strategy and an outlook for the period ahead. We will be delighted to take any questions you may have at the conclusion of our presentation today. Let's move to the result overview. On slide four is a summary overview of our H1 FY23 financial highlights, which could best be summarized as a period of positive momentum delivering a strong result. Our total revenue fell a fraction short of the AUD 1 billion mark, coming in at AUD 999 million for the six months. This number shows growth on the prior period of around 28% and incorporates the added performance of the Penfold acquisition, which was acquired late in the comparative period. I'm delighted with our EBITDA performance, which reached an underlying figure of 70.6% Sorry, AUD 70.6 million. Most importantly, its growth of 31% ahead of the prior comparable period exceeded the revenue growth and is a good indicator of both an improved gross margin and our focus on effective management of rising costs. Victor will jump into that a little deeper further in the presentation. Our profit before tax or PBT was AUD 43.2 million, up AUD 6.9 million or 19% on the prior comparative period, and represents a return on sales of 4.3% for the half. This figure included the impact of the debt funding related to the Penfold acquisition as well as interest rate changes during the period. Once applying tax to our results, the net profit after tax resulted in AUD 30.2 million, up the same 19%, and pleasingly enabled us to increase our earnings per share to AUD 0.1761, up 24% on the same period last year. As a result of this, I'm delighted to share that our board have approved the payment of an AUD 0.11 per share fully franked dividend for the period. A testament to our focus on delivering strong returns for our shareholders. Victor will again cover the details of that dividend later in the presentation. Finally, on this page, our net debt property value remains a key measure of our ability to acquire businesses. At 21%, this indicates the debt capacity available to execute on our consolidator strategy. I'll turn now to slide five, which lays out the work we have done to execute on our strategic objectives during the six-month period. There are six key topics shown here, and I'll take a few minutes to highlight some points from this page. Starting at the top left, we have focused heavily in recent periods on the sustainability of income by expanding our activities connected with the vehicle ownership lifecycle. Unlike many retail businesses, the initiation of a vehicle purchase is just the beginning of a partnership with consumers as they pass through their ownership lifecycle. This is important in managing the variability of market dynamics to improve the sustainability of all income streams in both upward and downturn retail market cycles. In this most recent period, we expanded our parts distribution operations across all three states, embracing the smash repair market with our one delivery multi-brand approach. We now deliver to a geographic area right along the eastern seaboard from North Brisbane down to Geelong. In service, our focus on the future came in the form of enhancing digital offerings to make vehicle servicing easier for consumers. We also undertook workshop capacity reviews to ensure we can maximize retail opportunities and reduce wait times. I'll come back to that point again shortly. Moving clockwise, our work on revenue stream diversity focused heavily on the used car pipeline. In a market of continued supply challenges, we refocused our efforts on supply activities from multiple sources to give us a bigger retail funnel for the ensuing period. Importantly here, we continue to focus on the whole of growth concept, ensuring we embrace every sales opportunity as either the beginning or a continuation of a consumer's period of ownership. This focuses our teams on providing the full suite of offerings to consumers at every transaction point. In a period of rapidly changing macroeconomic conditions, this is of great benefit as factors impacting one element of our business serve as triggers for others. The digital environment will keep evolving, our exercise in mapping the customer journey and understanding potential leakage has been a big focus for us during this period. Moving to the top right, I want to highlight again our focus on health and safety. In the last few years, we have made significant steps at raising awareness and consistency in OH&S matters at all levels. I will pause for a moment here, as we were starkly reminded in the period that our work here is never done. On the day of our most recent AGM, a young man was caught up in an extraordinary incident at one of our facilities, resulting in the tragic loss of his life a few days later. Our deepest sympathies continue with the family and friends of Kaya. I would like to offer my sincerest gratitude to the bravery and quick thinking of the members of his team who gave that young man the best possible chance of survival. We have long said as a business that people are our greatest asset. We remain committed to protecting our teams and consumers above all else. As I referred before, our industry, like many, continues to operate in a skill shortage. Our work on recruiting school-based leavers and apprentices over the last two years continues to work well for us. As a result, we again won the New South Wales Vocational and Education Training Award for Large Employer of the Year, a wonderful accolade for our business being at the forefront of youthful employment and looking to the future. Now, I mentioned earlier our efforts to maximize service retail space and undertaking that exercise highlighted the growth opportunity for us. We have initiated the recruitment of 58 qualified technicians from overseas, the first of whom commenced with us in early twenty twenty-three. Moving to the bottom left, we used the customer journey mapping exercise I referred to earlier to drive a number of subtle but critical changes in our business to improve efficiency and enhance digital consumer touchpoints. Moving right, we embrace the shift to EVs with facility capacity reviews, not only in terms of EV requirements, but also training and development of our teams, power supply considerations and sustainability measures. Our OEM relationships are critical, and we continue to embrace the EV journey as products change. We are well positioned for this and a wide range of EV products available and in pipeline as this market continues to grow. Finally, bottom right, we executed a disciplined cost management approach with procurement activities on some key supplier arrangements. We undertook a reassessment of a number of CapEx projects, and we undertook a series of cost recovery measures to combat the rising cost of doing business. The outcomes of these projects can be seen in our numbers, and we are confident we have the right disciplines in place to gain further traction moving forward. Overall, as you can see, our organic activities have been considerable in the period, and these six strategic objectives will continue with targets set in a strategic plan that we call Towards 2025, recognizing the changing digital products and supply environments. Turning back to the numbers, Slide six shows a bridge of our profit before tax with the comparative period. The Penfold acquisition is performing ahead of expectations and reflects our disciplined approach to finding the right opportunities in the market. The additional trading from our Victorian operations added AUD 5.9 million in the first half of FY23. I'm also delighted to share that we have already added to our stable of brands in Victoria with the addition of Isuzu UTE at Burwood. This greenfield opportunity adds further value to our Victorian operations in 2023. Our existing performance improved our PBT by 6.3% as a result of the organic activities undertaken and the cycling of COVID impacts in the prior period. The last bar here represents the addition of the capital loan secured against our property portfolio, which was used to partly fund Penfold acquisition. I am delighted with this outcome and the 19% growth we achieved since the prior period. Before handing to Victor, on slide seven, I wanted to lay out the changing nature of the automotive industry in the form of three significant factors. Firstly, the one in 100 year change to the product lineup has us very focused on the education of consumers. Much of the EV journey is not well understood, and we think it's a key part of our role to assist consumers with their education and prepare them for the transition, whether that be for the next vehicle purchase or at some later date. There are both new and changing revenue streams emerging as this transition of both product and the wider ecosystem occurs, and we are well-placed to capitalize on those with carefully considered business partners. The second factor is the tail of the COVID impact, which continues to influence the supply chain. Today, our order bank is a substantial asset, and whilst we see pockets of supply returning, its consistency remains a challenge. The COVID window of time has allowed OEMs, in some instances, to rethink their models. We will keep working with OEMs to find ways to flex and provide positive impacts on consumer experience, while of course maintaining our expectations of a desired return on investment. Lastly, process digitization remains dynamic. At Peter Warren, our scale capability means we can continue to invest heavily in technology compared to some smaller retailers who may not have the capability to do so. This only aids our journey of consolidation and improves the efficiency of both our current operations and the integration of new businesses, as recently demonstrated with the Penfold acquisition. Okay. It's time now to hear from Victor, who will take us through some more detail in relation to our financial outcomes. Thanks, Victor. Thanks, Mark, and thanks for your introduction earlier. I'm very pleased to be here presenting my first result as CFO of Peter Warren, and I'm looking forward to meeting some of you over the next few days. Turning to page nine, which shows our key metrics. You can see that we have achieved growth in all metrics during the half year. Our revenue is up AUD 221 million to AUD 999 million, and it would have been up a further AUD 80 million if our Mercedes-Benz deliveries had full revenue recognition. Following the introduction of the Mercedes agency model, we now record the commission earned on vehicle sales, the equivalent of gross profit, and we no longer record the revenue for the vehicle sale itself. Our figures also include the benefit of our Penfold acquisition on 1 December 2021. The step up from including six months of Penfold's was AUD 151 million in revenue and 2,064 new vehicles sold. The supply of new vehicles from OEMs has improved from a low base, but it hasn't yet returned to normal levels. Our order bank grew during the period, as Mark discussed. This puts us in a strong position for the period ahead. On EBITDA and PBT, we were pleased to see strong results for the first half of the year. Turning to page 10, we have our P&L. All of these figures in the table are statutory figures other than the acquisition cost of AUD 2.2 million shown as an adjustment in last year's numbers. Our revenue grew by 28.4%. That would have been 38.7% of growth if you made the figures fully comparable by adjusting for the Mercedes-Benz factor. One of the largest drivers of our revenue increase was the growth in new car volumes mentioned earlier. Our gross profit went up 32.1% and our gross margin percentage increased by 0.5%, as shown by the chart on the right of the page. I would call out a few items in that gross margin percentage movement. Firstly, the accounting for the Mercedes change caused our gross margin to increase by 1.4% points. This is an accounting matter only. We had a negative gross margin impact of 1.1% points relating to the relative mix of revenues from our departments, including new cars, used cars, service, and parts. Our new car department has much lower margins than other departments such as service, where it's a lot higher. Our new car area grew by so much during the year, it has diluted the group's overall margin by 1.1% points. Underlying these factors, however, we've achieved a small increase in gross margin of 0.2% points in our various departmental gross margins. Our EBITDA grew by 30.7%, this reflected the acquisition, the growth in our diverse revenue streams, and the small increase in our underlying borrowing for our Penfolds acquisition, and an increase in interest rates and an increase in inventory. This is an area of continued focus for us as we manage our finance costs very carefully. Moving to slide 11. This shows our overheads and the leveraging of our cost base. Our operating costs increased during the year, as you can see, and there were a few components involved. Firstly, we had AUD 16.9 million more overheads as the period contained six months of the Penfolds business that we acquired on 1 December 2021. We also had an increase as the prior period encouraged lower overheads when there was a COVID lockdown in Sydney in the July to September 2021 period. Inflationary costs have had an impact, and we implemented pay rises of 5%-6% in our business. Together with the superannuation increase, this increased our costs by AUD 2.5 million. We also incurred more costs as a result of the revenue growth in a number of areas and the additional employment opportunities that that revenue growth created. This was apparent across service, parts, and new car sales. By limiting the volume-based cost increases, we managed to leverage our overall cost base and we achieved a reduction in overheads as a percentage of sales from 12.1%- 1.6%. We'll continue to be very disciplined in our approach to managing these costs. Page 12 shows our operating cash flows. Our operating cash flow before floor plan interest was AUD 8 million below last year. This was affected by an AUD 16.5 million outflow caused by customer vehicle prepayments at June 30, 2022. We believe those customers wanted to obtain the benefit of the government's immediate tax write-off in the FY22 tax year. This behavior was much higher than the prior period, in part due to the COVID restrictions during that prior period. This spike in activity saw an unusually high number of customer vehicle prepayments. This was especially true in our trucks division. If you exclude this factor, our operating cash flow before floor plan interest would have been AUD 8.5 million higher than last year. Our cash flow conversion would have been 75%. Our cash flows also reflect a disciplined approach to our CapEx and our first full-year dividend payment of AUD 22.4 million. On the back of these cash flows, I'm pleased to say that our directors have declared an increase in our fully franked interim dividend to AUD 0.11 per share. The payment date for this will be 31 March 2023. On slide 13, we show our cash and debt position. Our floor plan finance grew during the period as our vehicle inventory grew. We have a net debt property ratio of 21%, which is very low and provides us with a lot of capacity for future growth. I'll now hand back to Mark for him to talk about our future. Thanks, Victor. Let's move on now then to our strategy and outlook segment of our presentation. On slide 15, you will recall our long-term strategic focus remains anchored to our three primary pillars, which prioritize organic growth, evaluation of suitable acquisition opportunities, and leveraging our property portfolio. Our group is well positioned with diversity and scale to keep growing in this market, and our network of infrastructure puts us in a strong position. Through the localized delivery of our suite of offerings and leveraging our GIFT values of growth, integrity, focus, and teamwork, we will continue to deliver through our workplace culture and core values. Moving to slide 16, which illustrates our growth journey in recent years. Having added nearly AUD 300 million in half-year revenue in just three years, we continue to demonstrate our ability to deliver sustainable growth through a combination of organic and inorganic means. Since listing, our dealership count has increased, most recently with the inclusion of Isuzu UTE in Burwood, in Victoria, and adding our fifth Hyundai dealership via a greenfield opportunity at Coomera in Queensland. Both businesses are showing early positive signals in their respective local markets. Supported by a substantial property portfolio, we consider our locally delivered business is well balanced and poised for further growth. To our outlook slide on page 17. Through the period, our market saw again a pattern of demand exceeding supply. We have experienced some improvements in supply, but the latest challenges of shipping delays and biosecurity hurdles means this remains inconsistent and patchy across the various brands we represent. Product mix remains an issue, and getting the right cars into Australia and into consumers' hands to meet those demands will be an ongoing challenge. From a trading outlook perspective, we recognize the macroeconomic environment we operate in today. Consumer sentiment shifts as a result of that environment and variability in vehicle supply and the inflationary pressures on operating costs. We have, though, demonstrated a proactive and disciplined approach to deliver a strong result for the half, and we are confident that this approach will enable us to achieve a robust full-year result underpinned by the strength of our order bank and the diversification of revenues across not only new cars, but those important lifecycle revenue streams of parts, service operations, finance insurance, and used cars. With our strategic priorities now well established, we will continue to execute those plans with a focus on diversity of revenue streams, technology-based solutions, consumer-focused initiatives, and cost recovery measures. Our group is well-placed to take advantage of this market and continue to act as a consolidator. We have the debt capacity to execute when required. Okay, that concludes our presentation for today. As a reminder, there is more material in the appendices to this presentation deck, including our balance sheet, a number of P&L reconciliations, and a summary of our franchises by location. I would like to take this opportunity to thank our team for their resilience and determination to deliver this outcome. Congratulations, all. I consider this period one of great success. I offer much gratitude to our continuing business partners for their support during the period. Finally, to our investors, thank you for your continued support throughout this period and ongoing. We really appreciate your time today. That concludes our presentation. Victor and I would be delighted now to take any questions you may have, and I will pass back to the operator. Thank you. Thank you to Mark and Victor for the presentation. At this time, I would like to remind everyone in order to ask a question, please press star one on your telephone keypad. Your first question comes from the line of Scott Murdoch of Morgans. Your line is open. Thank you. Morning, Mark and Victor. Just kick off with a few, if that's all right. If we can just maybe flesh out the order book. Just interested in any fallover rate change that you're seeing, what month the order book peaked through the half, if it did peak through the half and not at December, and just lastly on the order book, what sort of run rate, or runoff rate that you expect, from here or that you're seeing at the moment? Yeah. Okay. Good morning, Scott. How are you? Pretty well, thanks. Okay. There's a couple of questions in there. I'll do my best to answer all of them. Our, our order bank, our order book, as you saw, grew by 4% period- on- period. There was certainly a slowdown in the growth. That's evidence from the charts that we put up. And to some extent, as you might recall, back in August of last year, we were calling out a plateauing of that order book as we expected in the first quarter of 2023. To some extent that's played out. We are not seeing any genuine evidence of any increase in cancellations. The, you know, there are cancellations period on period. There are people that change their mind, but there's been no obvious increase in that as far as we're concerned. That isn't played through as anything even worthy of comment, let alone a material adjustment. I probably won't go into the details of what our order bank numbers were and when it might have peaked. But it's fair to say I'll gladly share with you some data from the last couple of weeks, and particularly around the month of January, which is now fully closed, obviously. Just to give you an example, Scott, we experienced an order write in January that was 32 units down on the prior period. That is a marginal contraction. It equates to about 1.2% or 1.3%. It was minor in its overall position. What we did see was an increase in our deliveries in the month of January. That went up by 49 units, so that grew by about 2.4%. As you would have already worked out, those two factors have a contractual impact on our order bank. It dropped by about 2.9% in the month of January. I haven't seen anything like the consistency of a pattern to suggest that that will carry on. In fact, you might recall my comments at May and June last year that we also had contraction in our order bank at that time as well. Interestingly, it rebounded in the period that immediately followed. I'd say this, at 2.9%, if that's the level of unwind that we are to experience over the next period, that is about, by my approximation, about a three-year unwind, which is a very useful asset to have off balance sheet to assist us through the next periods. Okay, thanks. Thanks, Mark. That's great detail. Just second question around that GP margin outcome. I understand what you've called out there in terms of the mix. Just noting that on the disclosure you gave us, it just looks like that revenue mix was actually really consistent half on half in terms of the SKU of all the products sold. If we just look half on half, first piece, you know, not the PCP, it obviously dropped about 120 BPS. Just a bit more color on that GP margin and what's under the bonnet there. Is the actual GP margin on the new cars like to like lower? Yeah. Okay. I'll certainly answer part of that, and then I might pass to Victor to comment as well. We're not seeing any, we're not seeing any contraction at all in gross margin. We're confident that our order bank. The gross margin built into our order bank, which of course is made up of some orders we would have taken nine months ago, some orders we would have taken yesterday. We're confident that we're not seeing a gross margin contraction built into our order bank, and therefore, our new car margins have remained consistent. In fact, they've grown marginally in this period, as you're probably seeing from Victor's slide. I might pass to Victor just to break down some of those other elements, which include the impact of the Mercedes-Benz impact, et cetera, and how they play out. Would you mind, Victor? Sure. The Mercedes-Benz impact on revenue was AUD 80 million. That had a positive 1.4% impact on GP percentage. That is because we're looking at H1 FY23, where we were under Benz agency model for the whole period, and we had no vehicles sold under that model under the prior corresponding period. Does that answer your question on half- on- half? That's okay for now. We'll leave it there. We might take it a little bit more offline in the interest of time. I'll just ask one more because I know there'll be plenty of questions on this line. Just Mark around, I guess, the easy one around the acquisition pipeline, what you're seeing in terms of deal flow, price expectations, and any of those consolidation options now include the potential with Toyota, how are discussions going there? Yeah, glad to talk to that one. The acquisition pipeline is always interesting. It takes something of a slump during the December-January period, typically because the advisors enjoy a nice long break. We saw a fair bit of activity coming through just before the Christmas break in the last couple of months of the half. We've seen a ramp-up in activity in the last few weeks as well, and it's fair to say, there is a fair bit out there for consideration, which is exciting, and I think, I suspect that pattern will continue through 2023. I would call out, though, there is probably larger than ever, a huge differential between vendor expectations and the expectations of potential purchasers like ourselves. I think that needs to be managed very carefully. you know, we're obviously working with advisors and brokers to assist us in that process because, you know, we're of the view that, you know, paying very high margins on current profitability may not be the best sustainable outcome. We're okay on the sustainability of the income in some instances, but it's got to be matched with a more appropriate margin. There is a big expectation between the two. In answer to the question around Toyota, I mean, that's a very well-publicized view from our perspective. We obviously have an intent to bring Toyota into our stable of brands. There is a family-owned business out there, as you know, Scott, which is ripe for the first acquisition in that Toyota journey. Whilst I can't commit to any confirmation today, what I can provide is, you know, some confidence that pathway is progressing and progressing well, and we will keep pursuing the aim of having Toyota in our stable at some stage in the future. Okay. Thank you, Mark. plenty of other people on the line. I'll jump off. Thank you. Thanks, Scott. Before proceeding to the next question, if you would like to ask a question, please press star, then the number one on your telephone keypad. In the interest of time, we do request to please keep questions concise. Your next question comes from the line of Phil Chippindale from Ord Minnett. Your line is open. Hi, Mark and Victor. Thanks for your time. Firstly, I just wanna unpack that demand comment you made earlier referencing January. You said, I think the order right number was down around 1.2%, 1.3% versus the PCP. Can you give us a sense of what that looked like perhaps over the December quarter? Just trying to see if that's a continuation or perhaps, you know, a little tail off in demand there? Is that just sort of a bit of a one-month figure and hard to sort of draw too much out of it? Yeah. Good question. I, you know, again, I'd pull on the comment I just made to Scott. We absolutely had an expectation that at some stage our order bank growth at whatever it was last year, 61%, would not continue. That was made predominantly, Phil, with the view that, you know, supply would return and that would be one of the levers that would reduce that order bank down. We saw that. As you can see from our numbers, we've had growth in new vehicle deliveries. We've had a, you know, something of a continuation of our order bank. Sorry, continuation of our order rights. By its virtue, the order bank has slowed and the rate of growth has slowed to around 4% by the end of the year. That pattern was emerging through the period. I don't really think there were any obvious triggers to that. I mean, it changes and fluctuates month to month. I suspect we're in a period now where we're gonna continue to see that plateauing effect, and that is again, in part of something of a continuation of order right, and an increased supply of vehicles to the market, which are coming through in pockets. Unfortunately, I'd love to give you some more detail, but I probably don't wanna get into the details of how big our order bank is. It certainly appears to have arrived at the doorstep where it's plateauing out and, you know, potentially will begin its unwind very steadily over the next few years, which is what we were expecting. Understood. Thanks. second question, just on the wage comment. you said that there was sort of a 5%-6% impact, in the period. Just a couple of, sort of, aspects to this. Firstly, was that across your entire business? secondly, that 5%-6% impact, was that over the full six months? If not, how should we think about that going forward in terms of, you know, trying to annualize that impact? Then also the follow on is, are there any sort of, anticipated, further increases that you've got, coming up? Yeah. Okay. I'll certainly answer that one first, and I'll ask Victor to jump in if he needs to. The bulk of our wages, interestingly, Phil, are obviously in our biggest physical employment department, which is in service. The vast majority of people that we employ are at least linked to award rates, connected to the automotive industry. Those award rates change annually, as you're probably aware. On the 1st of July, they changed by about 5.2% or thereabout. We also had an increase in superannuation, and obviously, as a result of both those things, we have an increase in the related on-cost as well. That got us roughly to about 6%, and that was a number that we called out very early in the piece in August to say that we knew this was coming. To answer your question, it is, it is award-linked in many instances. Even where even though we're a business that want to pay our people above award, I'm not saying we're paying minimum wage here, there's been an historical buffer that we built up above those award levels, and we wanna maintain that buffer. We want to be an employer of choice. To maintain that buffer, we've had to move with the award rates, and those award rates are set from 1 July to 30 June. In answer to your question, what we've got built in there is what you will see for the remainder of this year. We are gonna be tracking that again as we roll into the 1st July for the FY24 year, I wouldn't anticipate any significant changes in the next period. Victor, anything you wanna add to that? nothing further to add, Mark. Your next question comes from the line of Chenny Wang from Morgan Stanley. Your line is open. Yeah. Hi. Morning, guys. Just a couple of questions from me. Just on that Mercedes-Benz impact. I guess, you know, adding back the revenue and kind of backing out the gross margins, like, the impact at gross profit dollars looks to be less than AUD 1 million. I guess, you know, firstly, is that right? Is that kind of impact sustainable? Okay. That's a very detailed question,Chenny. I'll, I'm gonna go first, and then I'm sure Mark will go on. The impact from the change in accounting at gross profit dollar level is zero because it is simply a change in accounting. Historically, we've not gone into the performance of individual brands and gross profits in our business. We are we have many brands in our business, but you suspect that's our ongoing position. Chenny, I think, I think that's right. I mean, We've got a lot of strong OEM relationships, and I don't, I don't wanna call out any one brand, and we haven't done that before. I'll reserve comment on the gross margin performance of Mercedes-Benz. The things I have shared with you before, which have naturally played out is under an agency model, there is absolutely an expectation that the gross margin will contract, and that's because to arrive at what was intended to be a similar bottom line result, there were cost savings through the period. For example, if you're not stocking the cars, you're no longer holding the floor plan cost, and therefore the gross margin was reduced proportionately to allow for that. Moving from a franchise model to an agency model, there is an expectation of gross margin. I'm not gonna get into individual dollars and what we receive under our contractual terms, but hopefully that will help you resolve your issue. Yeah. I guess, like, I was kind of surprised to just kind of do that math and see the impact that gross profit dollar is being pretty minimal, right? 'Cause I guess the way I did understand it was you guys would see that gross profit dollar impact, but then at PBT, that kind of, you know, normalizes or becomes net neutral as some of the cost savings, you know, I guess below gross profit, as you mentioned, comes through. Yeah, I guess I kind of want to dig into that a bit more and just kind of see, you know... Maybe also, if there's anything else that you guys did on your end to kind of drive that, you know, gross profit dollar outcome or even a PBT outcome. The gross profit outcome under an agency model is fixed. We are paid a return for activity, if you like. It's a commission base. What is not fixed is our cost base. As you could probably appreciate, as with all of our business, we've had inflationary impacts in agency model environments as well as we have in franchise model environments. You know, we've had to adjust our business accordingly. I'd be very open in saying that, you know, we have not experienced the outcomes in agency that we had intended, and that's partly because it's a much more challenging environment to manage when you first learn how to run your business and what costs you need to keep, what people you need to keep, et cetera, and still keep that balance of consumer experience and getting a reasonable return. Add to that the inflationary impacts, it is certainly contracts from where we thought it was gonna go. Again, Chenny, apologies, but I'm, I don't wanna get into details about any one brand. Your next question comes from the line of Sarah Mann from Moelis Australia. Your line is open. Morning, guys. Just a question on inventory. I see it stepped up in the period. Can you give us, I guess, any color around where that was going in terms of new versus used, please? Yeah. I'll again, I'll start that, and I'll invite Victor to jump in if he wishes. There was part of that was certainly a planned position. As I mentioned, we've had an increase, and you'll see that through our revenue breakdowns in our financials. We've had an increase in our parts business. That has certainly added to our imagery carry on purpose. We've certainly had an increase in our sentiment around the pipeline on used cars, and so that has also been a planned adjustment to our imagery balances in used cars. In new cars, as we mentioned briefly through our presentation, we are seeing some sporadic supply returns. That's enabled us, but I'll give you a very practical example. You go back four years, if you were in a service loan car, you probably wouldn't be driving a car that had any more than 3,000 Ks on. In the last 12-18 months, those cars have had 15,000, 20,000 Ks on because we simply couldn't get the supply of vehicles to turn them over. What we've got now is we've had a supply in the last couple of weeks, months of the year. We turn those vehicles over, and we've moved those older ones into used cars. That counts as a double whammy for us. I do think we've had an unusual spike in our inventory levels at 31 December. Our position is that we're comfortable with that. It's certainly well below where we were in any kind of, you know, pre-COVID or even post-COVID period. We're comfortable with our current inventory positions to deliver on what we need to next year. Victor, I don't know if I'm missing anything from that? Yeah. Just, and just one further aspect of the question is the relativity between new and used is almost all of the increase was in new vehicles. We had a very small increase in our used vehicle inventory. Got it. Okay. The other question is just on finance and insurance. It looks like the growth there lagged kind of new and used sales. Just wondering, like, you know, are you getting any impact from, I guess, higher interest rates and inflationary pressures impacting customers' ability to get finance at all? Look, that's a very competitive environment, as you could imagine. I think we've spoken previously, Sarah, about the longer the lead time on a new car, the more opportunity a consumer has to shop their way around and find a good outcome for themselves. It has become more competitive. We have seen some marginal contraction in our penetration rates as a result of that. I'm not sure that's absolutely around the effect of interest rates, though. If you think about it this way, the average person that's coming in to buy a vehicle today last bought a car three years ago when interest rates were very different than they were six months ago. I'm not sure consumers are actually being exposed to the same outcome. Part of the rationale I would add as well as to why you're not seeing a growth in F&I to the same extent that we're seeing in new vehicles is, we've certainly got some work to do in the penetration impacts of the Penfold's business. I think that's a good opportunity for us. Their penetration levels historically have been lower than that of the group, and we're working very hard on ensuring that they get up to the group's standards and expectations around the process around F&I. That would have had a dilutory impact when you compare new vehicle sales to F&I in this period. Your next question comes from the line of John Campbell from Jefferies. Your line is open. Hi, guys. Excuse me. Hi, guys. Just a couple of questions from me. Just, do you mind adding just on that F&I performance Mark, roughly what the penetration rate is and, you know, where it's gone over the past six months? Yeah. John, I don't, I don't think we've ever spoken about our specific penetration rate, but I know there's plenty of data out there. What I can share with you is I see the same sort of data, and we still remain at the good end of the industry spectrum. But I think you'll find if you're looking through, you know, the sort of data that Deloitte and Pitcher Partners or whoever else are out there producing industry data, you'll see a contraction from the prior period. Again, I think that's down to the competitive nature of that industry. There's a lot of new players coming into that space. Unfortunately, what's good in terms of an auto bank delivering for us on the future has a negative side, which is finance insurance becomes a little bit harder, given the length of that lead time. Yeah. Yeah. That makes sense. You, you touched on Penfold, you know, sort of, I guess, having a slightly lower sell-through rate than the group. Can you just give us an update on how Penfold is performing overall, beyond F&I? Yeah, sure. This is a very pleasing story actually. We're delighted with how that business is operating. You know, one of those key factors that we looked for in such a major beachhead acquisition was the strength of the management team, and they have delivered above the expectations of our performance and certainly above the values on which we calculated our purchase price. That's good news. They're a strong new car retailer. They've got strong service and parts performance. They've got some areas that I think they could certainly improve on and some of those periphery things such as aftermarket and F&I are two areas we're working on and have been for the last six, seven months. We're seeing some good improvements in that process. I'd say this, they had a different process than the way that we operate our group. We have watched, observed, made a few tweaks and changes, and we should start to see some improvements in there as we go forward. I'm feeling very positive about the overall performance of that business and where it can go in the period to come. Your next question comes from the line of Jack Dunn from Citi. Your line is open. Hi, Mark and Victor. Thank you. Just a couple of quick questions from me. I just wanna ask on the new hires, are these in the sales area? How are you assessing the current headcount level, and where do you expect to go with your forecast for used car sales over the next 12-18 months? Yeah, good question, Jack. Morning. Look, the vast majority of our new hires are in our service area. I made the comment earlier that, yeah, a large proportion of the people we employ actually work in the back end of our business, the parts and service operations. Our new vehicle sales teams have been relatively stable over the period. Whilst we, you know, we rotate through, our turnover is reasonably low. You know, the incremental increases in new cars, you typically can flex, you know, five or 10 units per person and still manage your headcount pretty well. You've gotta have quite a dramatic increase in new cars to have the rationale to want to go out and increase the headcount in that space. Not so much on the new side. Certainly in the parts side where we've had growth and predominantly in the service side, we've also had some growth there. Trying to reduce, you know, lead times. We still see plenty of opportunities in those, in those two areas that we can continue to grow into. All right. Perfect. Thank you. Then just on used cars, are you able to give us a sense of how the margin may have changed in the second half? Did you find any impact on margins when used car prices started to come off? I've gotta say, we're not seeing a huge pattern emerge there. Our used car margins have retained. In fact, they went up marginally during the period. Probably stabilized towards the end. We've certainly got some consistency in used car margins. I'm still very conscious of a very tight supply market. Getting vehicles is a real challenge at the moment. Prices are still high. I know there's plenty of commentary out there about used vehicle prices returning and looking across the waters to the U.S. and seeing what's happening in that market. I've gotta say from the experience that I have and, you know, commentary with my used retail teams, we're not seeing a lot of evidence of that, Jack. This concludes today's Q&A session. I'll turn the call back over to Mark for closing remarks. Okay. Thank you, Paul, and thank you everyone for your time today. We really appreciate your questions and of course your continued support. On behalf of Victor and I, we wish you a very pleasant rest of your day. Thank you. This concludes today's conference call. You may now disconnect.