Ladies and gentlemen, welcome to Shaver Shop's results presentation and investor conference call for the half year ended 31st December 2022. Please note that today's call is being recorded. There'll be a presentation followed by a question- and- answer session. Presenting today will be Cameron Fox, Shaver Shop's CEO and Managing Director, and Larry Hamson, Shaver Shop's CFO and Company Secretary. If you wish to follow along with the slides, Shaver Shop's presentation has been launched with the ASX, and it's also available from Shaver Shop's Investor Center website. I'll now hand you over to Cameron Fox. Please go ahead. Good morning, ladies and gentlemen, thanks for joining us today. It's a pleasure to once again be here to update you on our financial results, this time for the first half of the 2023 financial year. Our agenda is very consistent with previous presentations. I'll hit the highlights from the first half before handing over to Larry, who will take you through the financial results in more detail. We'll then move on to our trading update and outlook before opening up for a Q&A session at the end. As always, please note the disclaimer around forward-looking statements in the appendix to the presentation. Okay, let's move on to our financial highlights on Slide four. Total sales were up 3.8% to AUD 131.9 million. This is a new record high for the business, was driven largely by customers switching back to in-store shopping habits with our store sales up 33.5% to AUD 100.8 million. In-store sales represented roughly three-quarters of total sales for the first half, with online now representing approximately one quarter of total sales. This percentage was relatively consistent throughout the first half, giving us confidence that some of the unusual shopping patterns we saw through the pandemic have now normalized. Importantly, though, online sales stayed well above pre-pandemic levels and was a key contributor to total sales being up almost 23% versus the first half of 2020. One of the key highlights of the first half was our gross profit margin, which was up 50 basis points to 44.3%, one of the highest levels ever recorded by the business. We were able to maintain the gross profit margin strength that we highlighted at the time of our AGM throughout the remainder of the first half. This ended up mitigating a significant proportion of the sales softness that we experienced in both November and December. This is an exceptional result because our performance in these two months has such a material impact on our half yearly and full year profitability. Operating expenses were also well controlled, leading to net profit after tax of AUD 13.7 million, which is up 4.5% on last year's result. This translates to basic earnings per share or EPS of AUD 0.108 and cash EPS of AUD 0.111. If you're not familiar with our definition of cash EPS, Larry will take you through this a little bit later. Our balance sheet remains very strong, with AUD 34.1 million of net cash at 31st in December, after having generated AUD 39.0 million in operating cash flow for the first half. As many of you know, this is a seasonal result, with the cash balance reducing significantly in January and February, when we pay our suppliers for Christmas stock purchases. Overall, a really solid set of numbers once again with our average return on capital employed standing at 31.2% over the calendar year. The strong financial position, performance and future prospects of Shaver Shop have also justified the board in announcing an increase in the interim dividend to AUD 0.047 per share, fully franked, up 4.4% on last year's AUD 0.045 interim dividend. Moving on to operational highlights. Customer service excellence is our most important metrics, and I'm pleased to say we have held our NPS score consistent with last financial year at 88.4 out of 100. This strong service score was helped by our ability to return to in-person training in the first half of 2023, where we held two sessions in each state to ensure our teams were prepared for our peak sales events over both November and December. We believe this in-person training was at least part of the reason we're able to partially offset declines in shopping center footfall across the last two months of the half with increased sales conversion. Our sales conversion is being the proportion of people who purchase something in our store compared to the total number of people that entered our stores over that period of time. As stores became the preferred channel for customers, we adapted our marketing approach by taking steps to reduce the level of digital spend in some of the areas where we didn't think they were delivering adequate returns. At the same time, we ramped up our social media activity on Instagram and Facebook with a 79% increase in posts over the first half versus the prior comparative period. We also continued to significantly increase our reach on these platforms with our posts targeting 1.5 million Instagram accounts in the last six months. As previously mentioned, we increased the online shipping alternatives for customers in February 2022, and I'm pleased to see these new shipping options have been readily taken up. Probably most pleasing is the fact that our click and collect sales represented 14% of total online fulfillments in the half. Now, this is an important metric because the click and collect option enables our store teams to connect with and delight these customers when they come in to pick up the purchases. We are still working on translating our amazing in-store experience into the online channel, something that is challenging to do, but we remain very focused on. Lastly, our teams. Our store teams continue to exemplify our customer focus ethos. There is always room to improve further, and that's what we challenge ourselves to do day in and day out with each and every single customer. Let's now move on to Slide six. This provides a bit more context about what we saw in each quarter from a trading perspective. We've shown our quarterly growth rates compared to both the last two COVID-impacted years as well as to pre-COVID, being FY 2020. As expected, quarter one was very strong this year, given we were cycling the store closures during the COVID lockdowns of the prior year. Online sales declined sharply, this was more than made up by customers once again shopping in our stores. Total sales were up 17.5% on quarter one FY 2022 and up 33.5% versus the pre-COVID levels of FY 2020. Quarter two started similar to quarter one, coming to the end of October, sales growth rates slowed and then declined as we began to cycle the elevated lockdown reopen sales from the prior year. What was surprising to us is that center footfall actually declined in November and December, of course, was even further down compared to pre-COVID levels. This was unexpected. However, we were able to largely offset the foot traffic decline with higher sales conversion. Ultimately, this led to sales being down 4.1% in the second quarter versus the same quarter in FY 2020. Importantly, we're still up 16.1% versus quarter two FY 2020. When combined, that led to first-half sales growing 3.8% to AUD 131.9 million. As you can see in the bottom right of the slide, it continues the pleasing run of consecutive years of first-half growth. Compared to the first half of FY 2020, our sales were up 22.7%. Slide seven shows the split between online and in-store sales contribution. As you can see, in-store is once again our dominant channel. This time last year, due to lockdowns in quarter one and early quarter two, online sales were highly elevated, representing 41.6% of total sales. We believe our most recent half is much closer to the norm and what we'll likely see moving forward. We still expect online sales share of revenue to increase to between 20% and 30% over the next two to three years. Given the nature of the categories we sell and customers wanting to look and feel and ask questions about these products before they buy, we do expect this may be the ceiling for online sales under the current business model. As I've mentioned in previous presentations, this doesn't disappoint us because of several reasons. Our stores are where the magic happens with Shaver Shop and where our differentiation as a business is most evident. We are able to create a stronger connection with customers in store that will help drive increased loyalty and repeat purchase. From a pure operating contribution perspective, incremental in-store sales tend to generate higher contribution margins as we don't incur postage and other incidental fees for completing the sale. To be clear, this certainly doesn't mean that we'll stop investing in our digital offering, far from it. We will continue to look to optimize our investments in this area to maximize returns and meet customer needs. As I mentioned earlier, one of the standout features of this result was our gross profit margin of 44.3%. This strong result was no fluke. Throughout the half, we maintained our pricing discipline and applied the learnings that we gained throughout the pandemic. We focused on driving profitable sales and not just top-line results. Category mix was a minor factor impacting gross margin, but what's really pleasing is that our overall approach led to improved margins across almost all product categories. What this means in practice is that our strategy is working. We continue to train our store teams to be product experts. We've curated a differentiated and highly exclusive product range, our offer is compelling and offers value for money to our customers across all price segments and all product categories. With this result is less focus on focusing on price discounting and heavy promotional activity. In doing so, our gross profit margins are increasing. In the categories where our range isn't as differentiated, such as hairstyling and female beauty, we also chose not to chase top-line sales if it wasn't going to increase our bottom line profits. Now, this was a distinct change in approach compared to prior years. Part of the reason our sales declined in the second quarter was because we deliberately chose to not be as aggressive on hyper-competitive trade-wide models over the Black Friday, Christmas, and Boxing Day promotional periods. This new approach was a key contributor to Shaver Shop delivering a strong net profit result for the first half and delivering an improvement in operating margins. As you can see from the chart in the bottom left of the slide, gross profit margins have remained significantly above pre-COVID levels over the last three halves. Lastly, from a share perspective, haircutting remains our largest contributor in sales, only down marginally from first half FY 2023. The men's shaver category has rebounded to represent 20% of total revenue, up 3% of total sales, reflecting the propensity for men to revert to a clean shave and look as they go back to the office. Power oral care has also been very strong with the broadening of Oral-B's iO range. DIY massage has always been a category that's been driven to a large extent by new product innovation. This category softened this year after having experienced a massive growth in handheld massage guns over the pandemic period. Lastly, before I hand over to Larry, our range of exclusive or only at Shaver Shop products continues to deliver an exceptional contribution to both sales and gross profit for our business. Many of these exclusive lines tend to be in our core hair removal categories, such as men's shavers, trimmers, clippers, and body groomers. We have also expanded the range of private label products that we source from third-party distributors in Australia. We pride ourselves on having the deepest and broadest range of personal care appliances for men and women. With our exclusive lines, we continue to be the destination of choice for many consumers across our core categories. It also puts Shaver Shop in a highly defensible and differentiated market position, another factor that makes Shaver Shop's business model so attractive and so resilient. With that, I'll now hand over to Larry to review our financial results in more detail. Thanks, Cameron, appreciate everyone for joining the call today. As Cameron mentioned at the start, we've posted another really solid set of financial results for the first half of 2023. Sales growth delivered across almost all Australian states and territories, breaching the AUD 130 million sales level, representing another new milestone for the business. Also pleasing was that sales contribution remains very broad, with no single product generating more than 2.3% of total sales. Further to Cameron's points on the last slide, 23 of the top-selling 30 lines were exclusive to Shaver Shop. This ratio has stayed relatively consistent since our IPO in 2016, and is another key reason why we've been able to deliver a very strong gross profit margin result, this time at 44.3%. As Cameron mentioned, this is up 50 basis points on the first half of 2022, and is well above our long-term historical average of between 42% and 43%, leading to gross profit dollars being up 4.9% to AUD 58.5 million. Also a new Shaver Shop record. With cost of doing business well controlled once again, our EBIT margins increased 30 basis points to 15.7%, and we delivered a 4.5% increase in net profit to AUD 13.7 million, our second-highest first half net profit result in the company's history. Slide 12 speaks to our cost of doing business and how we have continuously adapted our cost base to suit our changing business needs and environmental conditions. Employment costs as a percentage of sales increased materially in the first half of 2023 versus the prior comparative period. In contrast to last year, the store network was fully operational for all of the first half. As you may recall, last year during the lockdowns, we took the difficult decision to stand down some of our store teams, and in some cases, we closed our stores entirely during the lockdown period. This reduced our employment expenses, but as our sales transitioned online, our postage costs soared. While employment costs have increased 210 basis points as a percentage of sales in the first half of 2023 compared to the prior comparative period, operational cost savings have almost offset this entire amount, decreasing 160 basis points from 5.0% of sales in the first half of last year to 3.7% of sales this half. As Cameron mentioned earlier, we also reduced our digital marketing expenditure when sales were clearly transitioning back to store to ensure we maximized our return on this investment. Marketing investment is never an exact science, we'll continue to test, monitor, and adapt different techniques to drive sales, brand awareness, and brand loyalty. Marketing investment as a percentage of sales decreased 40 basis points to 3.3% in the first half. At the end of the day, despite the inflationary environment we currently live in, we've been able to navigate through this quite successfully so far with no impact to the operating margins of the business. Slide 13 illustrates the historical trend in net profit after tax and earnings per share over the last five first halves. As you can see, after the significant growth experienced at the start of the pandemic in the first half of 2021, we've been able to sustain these profitability levels since that time. This has been really pleasing as there were understandable concerns about sales and profits being pulled forward at the start of the pandemic that has ultimately not materialized. We delivered NPAT of AUD 13.7 million in the first half of 2023 and cash NPAT of AUD 14.1 million. Cash NPAT is our reported NPAT, which is then adjusted for the tax benefit that we receive on the franchise license termination portion of the franchise buybacks that we've done to date. While this value is treated as goodwill for accounting purposes, we have a private ruling from the ATO that allows us to deduct the value of the franchise license termination from our taxable earnings on a straight line basis over five years. In 2023, this will lead to around an AUD 1 million reduction in income tax payable that we would otherwise have to pay to the tax office. Details of the remaining available deductions from our franchise buybacks that were completed is also available in the appendix to the presentation. From an EPS perspective, basic EPS was up AUD 0.002 to AUD 0.108 per share, with cash EPS coming in at AUD 0.111, consistent with the prior corresponding result. Having regard to the softer sales result that we experienced in Q2 and particularly in November and December, this being Q2 being our most important quarter for the business, given the significant operating leverage we generate from a relatively fixed cost base. Delivering growth in net profit as well as earnings per share for the half is a really pleasing result and is evidence that our value-focused pricing and promotional strategies are delivering. Moving on to our balance sheet on Slide 14. Our financial position remains rock solid. We had AUD 34.1 million in net cash and no debt at the end of the half. For those of you that have tracked our story over the last few years, you'd appreciate that our cash balance rises significantly coming into Christmas because our suppliers give us extended payment terms for those Christmas stock purchases. This is a fantastic aspect to the business because it generally means we sell through the stock before we need to pay for it in January and February, thereby significantly reducing our business risk. It also means our cash balance is quite seasonal, though, with significant cash inflows coming in across November and December, leading to significant cash outflows in the first few months of the second half. Stock was AUD 24.4 million at the NF. Our stock position remains very clean in November. In November and December, we chose to align our stock purchases to the slower sales trajectory we were experiencing. This has allowed us to maintain very sharp inventory levels and strong stock turns, but we probably ended the half around AUD 1 million-AUD 2 million below optimal inventory levels. Stock levels have been a bit of a hot topic for retailers of late. Pleasingly, since the start of COVID three years ago, we've reduced our half-year stock balance by around $8.7 million from $33.1 million at the 31st of December, 2019. That's going from $33.1 million down to $24.4 million this year, which is an $8.7 million reduction. This is despite having six more stores in our corporate store network and obviously increasing our sales as well. All up, it's roughly a $10 million release of working capital, which has significantly strengthened our balance sheet. Even so, when you think about the nature of the products that we sell, they don't really have a shelf life and are not really prone to rapid technical obsolescence to any great degree. Overall, the stock we have is good quality stock that we expect to turn into cash relatively quickly. PP&E has remained relatively flat over the last couple of years as the number of store rollouts has reduced and the major investments in our technology transformation program were completed. We continue to focus on refitting and relocating some of our stores as part of our ongoing network optimization program to ensure we are maximizing their potential. Lastly, on this slide, net assets closed the half at AUD 86.7 million, up approximately AUD 8 million in the last six months. However, this is before our half-year dividend that was announced today, so that will lead to a AUD 6 million-AUD 7 million distribution to shareholders in March and a reduction in that balance. Moving on to our cash flow statement on Slide 15. Operating cash flow under AASB 16 remained very strong at AUD 39 million. While this is down AUD 3.7 million on the result from last year, last year's result was a bit anomalous. The primary reason for this is just the timing of stock purchase being earlier this year and more in line with our normal operating rhythm. Last year, to mitigate the risk of holding excess stock, we waited until the lockdowns ended before placing our large Christmas orders. This meant that last year we had a higher proportion of purchases end up with extended terms into January and February. You'll see this reflected in a higher trade payables balance last year as well. This year's purchasing patterns were more typical and placed less stress on our store network in the lead of the critical Black Friday sales event. Strong cash flow conversion has always been an asset of the business and something management continues to focus on. In financing activities, you'll note that AUD 6.8 million was returned to shareholders by way of the AUD 0.055 fully frank final dividend for FY 2022, as well as AUD 800,000 was received in proceeds from the sale of compulsorily divested LTI shares that did not meet the required performance or tenure conditions for executives. Overall, our net cash position increased AUD 24.7 million in the half, but as previously mentioned, a significant portion of this balance will be paid to suppliers across January and February. Finally, before I hand back to Cameron, Slide 16 shows the continued increase in our dividend payment, up 4.4% to AUD 0.047 per share. The board believes it prudent to preserve the strength of our balance sheet at present, provided there is no better use of the capital and intends to continue to increase the dividend. Our dividend policy remains to pay out approximately 60%-80% of cash net profit after tax, with roughly a 50/50 split between the interim and final dividends. Our return on capital employed over the last 12 months also remains very strong at 3.2% and reflects the board's commitment to bring attractive returns to shareholders. That concludes my part of the presentation. I'll now hand you back to Cameron to discuss our trading update and outlook. Thank you, Larry. The trends that we experienced over November and December have largely continued into January and February. While sales are softer than the prior year, they're still well above pre-COVID levels, having increased 16.7% versus FY 2020. We have been able to offset the recent sales softness and grow our gross profit, that is gross profit dollars, over the first seven weeks of the second half. We have achieved this through continuing to apply a disciplined promotional and sales strategy focused around our differentiated product range and giving customers compelling value for money. Ultimately, this is leading to higher gross profit margins. This is a continuation of the strategy that has worked so well for us over the last 12 to 24 months. Shaver Shop is one of, if not the market leader in our core hair removal categories, with a highly differentiated range, strong brand awareness, and very strong customer loyalty. This means we are a destination store for shoppers who wanna come to Shaver Shop because they know we'll have the widest and best range of products and provide value for money offers regardless of price point. While we've seen sales moderating since late October, we've been able to offset this with gross profit margin and operating expense improvements. We are of course conscious the consumer sentiment may soften further, and we'll continue to adapt our offer to suit the changing retail environment over the coming months. The products we sell offer budget-conscious alternatives to going to the barber or beauty salon, which is particularly relevant as consumers deal with higher cost of living. This is a message we intend to continue articulating to both existing and new customers in the coming months. In summary, the business remains extremely well-positioned in the market. We have an enviable financial position with net cash and no debt. We have a unique business model generating strong cash flows, and we are increasing our dividend payments to shareholders. Lastly, our focus on playing to our strengths has driven profitable sales and successfully increased our bottom line profitability despite a softer top-line sales result. While the remainder of the financial year is difficult to predict, Shaver Shop is an exceptionally strong business that's executing well in an attractive segment. We are cautiously confident that we'll end the year with another pleasing profit result. Having regard to the continuing uncertain macroeconomic environment and the potential impact on demand from cost of living and interest rate rises, it is not appropriate for Shaver Shop to provide FY 2023 sales or profit guidance at this point in time. That concludes the formal part of the presentation. Larry and I would be pleased to answer any questions that you may have. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Danny Younis from Shaw and Partners. Please go ahead. Hi, Cameron. Hi, Larry. I've got three questions, if I can. The first one is around the trading in the first six, seven, the weeks of January, February. Can you maybe just give us a week-by-week analysis? Are you seeing consumer sentiment softening on a consecutive week basis, or are you seeing any sort of trends in those first seven weeks? There's nothing really to pull out. I think the first couple of weeks in January were a bit softer than what we've seen of late, but, you know, not materially so. You know, this is comparing to the prior years is the number. You know, it's not enough to say there's a trend one way or the other, Danny. It's been around the same level fairly consistent. Okay. The second quarter sales, they were down 4%. I think, Cameron, you touched on the hyperactivity around the promo activity in November, December. Can you maybe just provide a little bit more granularity around how October, November looked in that -4%? I mean, particularly with regards to the November month and how it compared to December. I think we sort of called out that October was pretty strong, in terms of, you know, the in-store sales growth we were getting was significant, and that was making us feel pretty confident going into the big events, you know, associated with Black Friday, Cyber Week, Click Frenzy, Christmas, Boxing Day. As we called out, foot traffic really started to slow over the big events leading into Black Friday. That was a trend that continued really through it up to Boxing Day. Fortunately, what the guys did in store I think was very impressive, and we managed to convert a higher ratio of people than what we've had historically. I think that offset some of the real softness we saw, Danny, in overall customer foot traffic within the shopping centers. Just to be clear, that's outside foot traffic and inside foot traffic across, you know, the average or typical shopping center in Australia and New Zealand. Okay. No, that's great. Thanks. Cost of doing business. This has been one of the high points over the last few years. I think, you know, if you go back a few years ago, it was running at about 30% of revenues. You've got it down now to low 20s%, 23%. Tw o parts to this. Is this as good as it gets? Can you actually eke out some more gains on the cost of doing business? Can you maybe just talk to the marketing and advertising portion of that? Because that decreased, I'm presuming that decreased in the second quarter in line with the sales coming off. Yeah, that's right. I think, you know, in terms of overall, the first part of your question, Danny, overall cost of business, yeah, very pleased with the way the result came out this year. The 30% level that you're referring to previously, I think that might have been under pre-AASB 16 numbers. Just double check the numbers there. Yeah, we're very pleased. Obviously, we've been able to keep our costs relatively flat and grow our sales level, which has driven a really good cost of doing business result again this year. In terms of the marketing side of things, where we really started to switch the marketing activity was coming into Q2, particularly on the digital side, where in prior years we've done a bit more affiliated marketing and other digital marketing spend that we felt was not gonna give us the same returns as some of our more traditional digital marketing. We actually increased some of our digital traditional digital marketing spend, you know, say around Google Ads and Facebook advertising and those types of things, but took it away from some of the other areas that were not delivering us as good returns. Ultimately that led to a net reduction in digital spend. Across the other parts of our advertising spend, you know, the catalogs as well as TV, that was pretty constant year-over-year. Right. The digital spend, that net reduction, has that continued in the first six, seven weeks? Or are you still at a similar level? Yeah. I mean, the bulk of our marketing and advertising spend gets done in the first six months of the year anyways. We're still looking at optimizing it, and we're not doing as much activity in some of those areas that I highlighted in the second half. It's come down a bit, but it's not material, if you like, compared to what we spend in the first half, Danny. Okay. Just a final one, if I can. Gross margins, again, you know, you've done a great job on that. You know, you're well above your historical averages again. How long can you sustain 44% + GMs? I think that's ultimately what we're looking at in terms of the different. The pricing strategy and the overall sales strategy that we have of actually, you know, training our store teams, trusting them to sell models that are at the right price points, driving the right margins, and really supporting that with a promotional campaign to drive those sales. That's what we've been focused on over the last two or three years, and really trusting with our exclusive ranges that we don't have to discount as much to drive the volumes. You know, we're obviously very pleased with the 44.3%. We're gonna try and retain, you know, as high a margin as possible going forward, while still retaining market share. I think that's the key thing, particularly in our core categories, you know, where we have high proportions of exclusive product ranges. If we start seeing market share erode for whatever reason in some of those core categories, we may choose to be a bit more aggressive on pricing because, you know, we do not want to lose share in any of those core categories. Unless there's a significant change in product mix or supplier mix that might result in a change in gross margins, you know, we're gonna try and keep maintaining them around the same levels. Certainly, you know, we feel with our new process that we've been working through over the last two or three years that, you know, we should be staying above that long-term average of 42%-43%. That's certainly our objective going forward. Great. Thanks, Larry. Thanks, Cameron. Thanks, Danny. Thank you. Your next question comes from James Casey from Ord Minnett. Please go ahead. Good morning, gentlemen. Just one question from me, just with regards to online sales. How are you thinking about that over the next six months to 12 months? Where do you see that kind of stabilizing? How should we think about, you know, consumers going back to store and how that impacts the online sales piece? Thank you. Yeah, James. Look, I think we called out in the presentation, we probably think the level it stabilizes at is around 25%-30% of total revenue. A little bit more indicative of what we saw over the quarter, you know, the quarter two financial period. I think the real advantage for Shaver Shop and not being flippant about it is we really are ambivalent about where the consumer spends their money, whether it's in-store or online. Obviously, our margins are a little bit better in-store. The trend we're seeing over the last three to four months has suited us from an earnings point of view. I still feel strongly and passionately that there's a real importance to get our online offering right. We have mentioned previously opportunity to, you know, leverage some of our in-store talent, our expert product advice, and make that a little bit more front and center from an online communication strategy. You know, opportunities to really drive Instagram, Facebook and TikTok as well. They're part of our online strategy over the next six to 12 months. If nothing else, I think that drives also organic traffic to the website as well, and creates a bit of a halo impact across the brand, across both channels. Just reinforcing 25%-30% broadly, we sort of see as the sweet spot online sales, and we're really just continuing to execute what we've hopefully done over the last 12-18 months. Right. Okay. Given online sales are currently, what were they? 25% or 24.9% in the second quarter, they probably should stabilize now in the back half? Yeah, we think so, James. Yeah, correct. Yeah. Okay. Thank you. Thank you. Your next question comes from Tony Mitchell from Shaw and Partners. Please go ahead. Well done, Cameron. Very good result. What I'd like to ask you is how many new products are coming through, major products, particularly exclusives? Yeah. Look, I'd probably say excuse me, I've got a bit of bug in my throat. Probably say the last 12 months, innovation has been relatively modest, and I think you probably see that in our spread of sales. I'm not sure it's necessarily a bad thing because sometimes the downside of, you know, really big innovation is it creates a bit of a one hit wonder, so it can be, you know, creates a massive spike in sales on one product or category. Then you've got obviously comp that the following year. What we are starting to see though now come through is a solid amount of product innovation across both hair removal and non-hair removal products, particularly at the premium end. You would have seen potentially ghd have just launched the Duet. That's been in our store for about the last nine to 10 days. Obviously, that's a trade wide model. A great example, I think, where suppliers are trying to really drive a higher ATV or category spend. Case in point, ghd Duet's an AUD 595 product. We are seeing a lot of innovation by suppliers starting to come through more at the higher end of the category. Right. Okay. What about, number of new store openings? What are you planning to do there? I think very similar to probably past communication. You know, maybe one to two greenfield sites each, you know, each year, or probably one to two net gains. We'll have potentially two to three greenfields, let's say. Obviously, New Zealand is somewhere we're still focused upon, but we also can't rule out, you know, where it makes sense, we also look at store closures. You know, for example, the Melbourne CBD, I think structurally that area has changed since the pandemic. We have four stores in the Melbourne CBD area. You know, there is the option potentially of closing stores where we feel, obviously our online sales will still be held. You know, we potentially can increase earnings from actually closing, you know, a store that may not necessarily be needed in the CBD corridor. Tell me, well, that's very smart. What about the Auckland floods? I mean, what impact do you think those floods will have on demand for your products in how many stores have you got in Auckland? Well, I think we've got seven stores in New Zealand. Yeah, four I'd sort of classify as, you know, Auckland Zone. Look, I think what you would expect to see is some softness in the shopping center traffic, but that's probably temporary. Obviously, a bit of an opportunity to potentially switch to online. I do think that's a short-term sort of impact. You know, obviously in terms of online customer experience, I think there has been a two to three day delay in processing online orders. Again, that's obviously not Shaver Shop related. That's across the industry. Bottom line is. Right. I think it will be a short-term, you know, a pretty short-term impact, and then hopefully things normalize pretty quickly. Just while you're there, is it unlikely that you'd ever make an acquisition, into a product related thing to it, into another company, or you don't need to do that? Look, I think we remain open. I mean, obviously, if it's gonna deliver a strategic benefit and give us a good return, you'd have to look at it. If you're talking about something like an exclusive product distribution agreement. You know, we do remain open to those type of things. The biggest challenge is always getting it for the right price, and making sure it's brand adjacent and, you know, it's gonna deliver you incremental returns because not so much a problem, but we're obviously so dominant in our core categories that we're already making pretty good returns on these products as it is. Would you ever consider going into any Asian country? Well, we actually looked at that last year, Tony. We looked at the Singapore market, as the first potential way up into Asia. Unfortunately, with that market in particular, it was just too small to make the economics work. We'd have to launch three or four stores right away, and that sort of investment, and the returns that we get out of the market size were not justifying the risk that we'd have to take. We chose not to proceed that. It's not on the table at the moment. It's something we may look at going forward in terms of another market internationally, but it's certainly not something we're looking at currently. Okay. What's your level of franking credits at the moment after the time you distributed? Yeah. We basically have, I think, at 33. I can't remember what it is right now, unfortunately, Tony, we had, I think, about AUD 1 million- AUD 1.5 million in franking credits, and that's stayed relatively constant over the last few years as we come through June 30. Effectively, the amount of tax that we're paying at the moment is allowing us to pay fully franked dividends of around or slightly above this level. Right. Just getting back to Danny's question in the first place, do you expect this downturn, well, it's a small reduction. Do you see that turning around, or do you think it's going to hang around for a while? Sorry, can you repeat that? You just cut off. Oh, sorry. With the reduction in demand you've experienced in the first couple of months of the year, do you think that's a temporary trend, or do you think it's just a manifestation of just cost of living pressures, et cetera? I think the long-term, you know, tailwinds that we've got in the segments that we operate in and in the business itself, you know, my view is it's a temporary trend. How long that temporary trend ends up being, I'm not sure. You know, when you look at the long-term historical growth rates of men's and women's personal care and grooming, it's certainly in an uptrend. With men's grooming, in particular, where we dominate. You know, men are choosing to be more like women and using more tools, and that supports, you know, more rapid growth in the overall industry averages in those segments. While it's temporary, you know, and down, and we believe it's interest rate rises and cost of living pressures impacted, you know, we still think the long-term and medium to long-term tailwinds behind this industry, and I think they're very strong. Just while you're there, is one state showing a greater sales reduction in recent times, or in other words are pretty constant across? It varies a bit state to state. You know, one of the pleasing things is we're seeing still really good growth, say, in the likes of WA, which was not impacted by COVID like New South Wales and Victoria were. It really varies state to state. There's not a trend that I can point to at all in terms of the sales growth rates across the states. Okay. Thanks very lot. Keep up the good work. All right. Thank you, Johnny. Thank you. Your next question comes from Andrew Johnston from MST. Please go ahead. Morning, Cameron. Morning, Larry. Congratulations on a great gross margin. A couple of questions. Maybe I'm trying to extract too much information from some of the data, but if we have a look at what was implied by November, December growth numbers, that it looks like your growth numbers now are higher to level. I'm comparing, I'm doing, you know, the three-year CAGR numbers, and that was for November, December, that was at 2.7%, and that compares to about 5% now. It sort of implies like implies that your growth has recovered a bit. Growth rates have recovered a bit from November, December, or am I just trying to extract too much information from that data? You're correct. Your calculations are correct. I think we highlighted in one of the releases that, you know, the declines have improved from what we saw in November and December. It was more than 2% down in November and December. Yeah. Yeah. Yeah. What are you putting that down to? You mentioned foot traffic. Are you able to compare what you think foot traffic's doing versus what your sales are doing? Does that explain what's going on between November, December and now? Yeah, I think to some degree. What we saw in November and December, particularly leading into those big events of Black Friday, which I mentioned, was the actual customer traffic within the shopping centers was significantly down. That's, you know, obviously what we didn't anticipate. Yeah. In-store traffic and outside footfall was consistently down in November and December. As we pointed to, fortunately, it was just our conversion share was higher, which obviously helped us out from a total revenue point of view, and our gross profit margins were very healthy. Right. Okay. Again, I mean, in your discussion, you outlined your strategy around controlling gross margins, and that looks like that's coming through really well. Just try to move across to your comments about optimizing online investment and, you know, impressive improvement in a couple of levels there. I think the Instagram numbers were outstanding. What do you mean by optimizing your online investment and just in the context of some of your other comments about where you're putting that money, that advertising money? Yeah, I think let's take a simple part of marketing spend, which is paid search. You know, there's a sweet spot with paid search. I mean, your ROAS, everyone can talk ROAS, but you may be a ROAS of 600%, you know, 600%, but it's actually what's your return on investment, you know, after you take out postage costs, if you're giving coupon codes away, you know, what's your true net profit margin? I think Larry articulated it really well, is we wanna hold market share. You know, we don't wanna lose share in our core hair removal business under any circumstances. What we're trying to do is protect our market share, particularly in our core hair removal business, but make sure we're driving profitable incremental sales. One of the examples Larry called out was our affiliate marketing spend, which typically, and our affiliate market spend is where you give away an additional discount. You know, a AUD 10 coupon code or a AUD 15 coupon code. You know, in the past that's been, you know, a key area that we've invested in over the Black Friday events, Boxing Day, et cetera. We pulled back heavily on that area. Again, logically, we had to test it and trial it, you know, if we own so many exclusive product lines and categories, particularly within the hair removal business, there is a question as, well, why are we giving away another coupon code to actually generate a conversion on an exclusively ranged product line? Mm-hmm. Yeah. These are the type of things that, you know, we're just constantly trialing and trying to get the sweet spot, whether it's postage free, affiliate spend, paid search, investing more in terms of trying to drive organic growth through TikTok, you know, blog content and also then TikTok as well, 'cause obviously TikTok is a pretty much a new area for us. We know it's increasingly costly, but the reach across TikTok is phenomenal, and that's largely an untapped area for us. Right. Hopefully. Bit of a long, long-winded question, but hopefully I answered in terms of, you know, we still wanna invest in the areas that are driving, you know, a lot of eyes on our brand and also driving conversion, but we just wanna make absolutely certain that we're doing it in a fiscally responsible manner. Oh, no, I think it's pretty clear. You've got a very clear strategy around You know, measuring your return on your investment in that space. I'm guessing that's actually not that simple to measure, to do a really quantitative analysis of what returns you're getting on that. You know, clearly that's the right sort of strategy and part of the reason why your gross margins are starting to, you know, are holding up so well. Just a final question around private label. You sort of mentioned private label without talking too much about it. Can you talk about where you see private label going over the next couple of years? I think that, you know, our first priority is just doing what we do really well, which is working with the big brands, making sure they're exclusive where we can, particularly in our, you know, core hair removal business. You know, where we have the best-selling products is making sure that we get that price point right. Still offer the customer value for money, but make absolutely certain that we're driving gross profit margin as well. That's still the primary focus of our business. That hasn't changed. Separate to that is if there's an own brand opportunity within a segment or area where the suppliers are actually, for whatever reason, not driving or not focused upon or just don't wanna beat it, absolutely that's where we can leverage our brand equity, our customer loyalty, and growing that business. We know that it's still a pretty immaterial part of our business. You know, we're at 2% or 3% of total revenue. Obviously, it delivers very high gross profit margins. We more see that area as something that we will continue to drive, but only really where it's basically a gap in the market that our suppliers aren't currently fulfilling. Right. More opportunistic rather than a strategy to increase your level of privates by, you know, to a certain level over the next few years. Yeah, correct. The real KPI goal is focusing on that exclusive product lines and the ratio that accounts for in terms of sales and our total gross profit. Whether it's through Philips, Braun, Panasonic, is making sure that we're focused on leveraging and increasing exclusive product lines and making absolutely certain that's where we put our inventory behind, our promotional activity behind, our staff training behind, because that's what's gonna give us the opportunity to drive gross profit margins even further. Excellent. Okay. Gentlemen, thanks very much. Thanks, Andrew. Thank you. Thank you. Your next question comes from Rodney Van Broiden from Private Investor. Please go ahead. Hi. Thank you very much to you both again and to your teams. Thanks, Rodney. Thanks, Rod. Just, I think everyone else has covered a lot of this and you've discussed it, but perhaps, if you'd be so kind to elaborate on the inside traffic versus the outside footfall. I'm assuming that's into the retail centers versus into the stores. Your sales conversions are increasing, have you noticed a guess a distinction between who's coming to Shaver Shop stores versus who's coming to the retail centers, or is it very similar? Yeah. Not really, Rodney. What we have seen is in terms of the outside traffic, and the inside traffic is they're relatively the declines, you know, are relatively similar. The only thing I would call out, Rodney, is what we have seen in January and February is our conversion ratios seem to be normalizing to some degree or coming up a little bit what was experienced in November and December, where the foot traffic was significantly down. What we're seeing in January and February is actually the foot traffic has largely stabilized versus prior year, and in fact is slightly up over the last seven weeks from what we can see, and our conversion ratio has come off a little bit. Still well and truly within a, you know, the higher industry standard, but, you know, it has come off versus what we saw prior year to some degree. Great. Could that be delayed in terms of... I know your results are usually heavily geared toward or the financial side's geared to the first half. Could it simply be that people have delayed, do you think? Do you think there's a fundamental shift? Yeah. It's a very good question, and we sort of have debated this ourselves. There's an element in me, Rodney, where I think perhaps with the higher cost of living, and all the speculation over interest rate rises which we're seeing and the continuation that that may occur into the short to medium term for future, is perhaps the customer is becoming a little bit, their propensity to spend has just tightened a little bit. Again, that's based on what was observed over the last six to seven weeks. You know, we really probably need to observe that, you know, over the remainder of the financial year. I do think that's obviously having some impact, and that seems broadly consistent with what I'm seeing across other industries as well. Great. Last question, just as a final point, if you wanna call out any other positives, because obviously the you've got the staff back, you've got more in-store sales, have you found there's any good news stories you wanna share or anything you'd prefer to call out? I think it's in terms of trying to think it through, hopefully it's broadly covered. I mean, I think our store teams just continue to be the DNA of the business. I think we've been really honest and transparent. Our online is a work in progress. I think we've made vast improvements in that area, but we still have a long way to go in my humble opinion. The store teams have just been, you know, exceptional. Really over the last two years, regardless of the conditions, they've continued to shine. You know, we really need to be grateful for their performance, and we are. You know, we thank them for all their efforts. They've been terrific. Great. Thank you, Cameron, and to you, Larry. Thanks, Rodney. Thank you. Your next question comes from Stella Wang from Private Investor. Please go ahead. Thanks, guys, for taking my question. Firstly, following up on the cost of doing business as a% of sales, it sounds like Q2 is lower than Q1 in your very sensible management. Can we expect that Q2% going for H2 as the guideline? I think H2 cost of doing business as a percentage should be lower than H1. There, there's a couple of things that. Thanks for your question. It's a good question. There's a couple of things that influence cost of doing business. One is the actual dollar spend that we have, and the first half tends to be higher 'cause we have more marketing spend. We employ more people in our stores, so we have a large casual staff base that comes in to work in our stores over November and December. Those increase the dollar spend, but we have a disproportionate increase in sales from those key sales events of Black Friday, Christmas, Boxing Day in November and December. What that ultimately means is our cost of doing business tend to be lower as a percentage of sales in the first half than they are in the second half, 'cause we have quite, outside of those two areas that I mentioned, we have quite a high fixed cost base. That's why you see in the second half of the financial year, generally our profitability is quite a bit lower than the first half. As a result, we're a seasonal business. Cost of doing business as a percentage of sales is always higher, sorry, is always lower in the first half and is always higher in the second half. I hope that answers your question. Yes, it does, and, really good insight. Can we expect this percentage to be at least lower than, last financial year's second half? I don't think we've given any... It's difficult to call that one out. It really depends on the sales result for the second half to a large degree. We're not expecting any material changes in operating expenses, but obviously it's the top line that will heavily influence that cost of doing business percentage. Okay. Second, I've got another two questions quickly. As cost of living bites consumers even more later this calendar year, do you expect any of your subcategories to benefit from people doing more self-maintenance than going to salons and stuff? If so, have you seen any such trend so far? I think that's a really good question you've raised. I think one of the resilience, you know, what demonstrates the resilience of this business is regardless of the economic climate, you know, we've tended to adapt very well. I think that goes down to consumer behavior. Let's take the current example. Things become a little bit tighter. There may be some switching of customers from one category to another subcategory, as you call them. You know, it's possible, for example, let's take IPL treatments for ladies. You know, you go to a salon or a laser clinic, you're probably looking at around, what, AUD 1,500-AUD 2,000 for a six-week treatment cycle. The Shaver Shop sells a DIY home device that basically does the same technology or same thing. That's about, let's say, AUD 400-AUD 500. I think there's gonna be significant opportunity for Shaver Shop to really focus on that value for money proposition if things do continue to get tighter. Absolutely, we can benefit from 'cause there will be some switching, hopefully from, you know, professional salons and channels to DIY products, which we obviously also saw through the pandemic with the lockdowns. Have you seen any clear trends on along those lines, like, any categories you think were benefiting already from people trying to save money, or is it too hard to pin down? No, not really. We haven't seen anything material. At this point in time, you know, product mix, spread of products is pretty consistent, and no anomalies that we've been able to see at this point in time. Okay. Just lastly, a broader question. Do you see any key brands investing more in the direct, for example, Amazon corporate store direct sales channel? Do you see that as a hidden risk to your exclusivity arrangement? Not really. I mean, obviously Amazon's been around now for a number of years in Australia, Catch, Kogan. We've been operating for 30-odd years. There's always been a, you know, a new emerging threat. I think we've done a pretty good job of adapting and holding our ground. That's not to say we don't view Amazon as a, you know, obviously a very strong retailer, and we respect what they do. We also do sell through a lot of these marketplaces. We sell to them a product range, a curated product range that we put forward. That's no different to Amazon, if you look at it. We have a curated range for Amazon, which we sell through Amazon Marketplace. We're happy how that's ticking along, but our primary focus will always be on driving customers and web traffic to, you know, Shaver Shop stores and our website. Great. Thanks again. Thank you. Thanks. Thank you. Your next question is a follow-up question from Tony Mitchell from Shaw and Partners. Please go ahead. I know I'm pushing my luck. Last year had a retail award increase of 4.6% from the 1st of July. Yeah. Is that a one-year deal or is it longer than that? No, it's just one year. We're expecting Fair Work to come out again in May or June, with their view again, on what the rate increases will be for the coming year. Right. The way it's going at the moment, it's gonna be similar, isn't it? Yeah. I mean, it's hard to tell, but you obviously hear about the necessity of not having wage growth, you know, spiraling that then causes inflation growth. Mm-hmm. continue longer. Ultimately, that's gonna be a government call on Fair Work call on what ultimately happens. I guess that's the risk is, you know, wage inflation continues to rise significantly than inflation and higher interest rates are probably gonna stay higher for longer. Okay. The trend that you've mentioned over the years about women buying products for their men, is that continuing? Yeah, absolutely. Yeah, absolutely. Based on the latest data we have, it's still around 50% of the customers that shop in our stores are women. Wow. Usually buying for men. Obviously, we're trying to expand the range of female products that we have with female beauty, adding CLOUD NINE, FOREO, again, into our product mix, so that there is increasing relevance for women as well in our stores. We continue to try and create, you know, general neutral approaches to marketing and promotions and that sort of thing, so that we're attracting women as well as men into our stores. Okay. Thanks very much for running it. Thanks. Thank you. Thank you. Your next question comes from Divik Nigam, from Private Investor. Please go ahead. Hey, Cameron and Larry. Great result, once again for the half year. I'm mindful of time, so I'll try and keep it short as possible. I've got two questions. The first one is just around new stores and store opening. I know that in the past couple of years, you guys have really monitored the amount of stores that you have open. I think this result in particular highlights the resilience of Shaver Shop's sales in respect to in-store sales. I was just wondering, how do you guys go about finding where to open new stores, what to close down? I'm just also looking towards the current economic climate. If interest rates do keep going, wouldn't that mean that there would be potential new areas that you could expand to, perhaps that they're on sale as just distressed assets? Yeah. I mean, look, hopefully I answer your question here. I mean, in terms of how broadly we stay across it is, you know, property manager's extremely strong. Been with the business 14 to 15 years. You know, I wouldn't have thought there's a center or movement in property that's occurring that she's not across. Absolutely, there are opportune always coming up in terms of greenfield sites, which we do look closely at. You know, I guess it's, you know, BAU type exercise. The part we just challenge ourselves as a business is, does your brand really need to be there? You know, at the end of the day, resources aren't unlimited. You know, my personal belief is if you're gonna do a greenfield site, make it count. You know, you don't wanna be doing a greenfield site if it delivers a AUD 40,000-AUD 50,000 EBITDA incrementally. Yeah. By the time you're resourcing people, training people, particularly in today's market too, where talented people is actually, you know, tough to find. The last thing you wanna be doing is creating an opportunity cost by resourcing a greenfield site that's gonna make very little incremental EBITDA, and creating an opportunity case in one of your cash cow stores. We absolutely look at it. You know, if you look at the top 50 centers in Australia, for example, we are in every single one of them. There's only a couple of centers where we're really not located that are, I'd call, you know, A grade. DFO Homebush in the inner city would be one of them. Absolutely they're on our radar still. I would have to say you just have to be very conscious about greenfield stores, making sure that, you know, your investment is gonna deliver a genuine incremental earnings and a material one to make it all worthwhile. Right. Yep. No, spot on. I agree with that as well, Cameron. On that note, I think this might go hand in glove with my second question. You mentioned top 50 regions are A grade and you guys are all there. The type of consumer that shops at Shaver Shop, I was having to think about this quite deeply recently, but I want your thoughts on it. The customer that shops at Shaver Shop, you know, given that coming into recessionary types of environment where, as you mentioned, propensity to spend might be trimming, would you consider the products as a bit less of a discretion product, a bit more of a must need? Because I was thinking, you know, haircuts these days are fairly expensive as well. Given that cost of living is going up, people might opt for Shaver Shop products. I was thinking along those lines. Do you see a similar trend to, I guess, the 50 regions that you mentioned earlier in terms of the type of consumer that shops at Shaver Shop? Yeah, I think you've raised a good point. I think it is an opportunity for Shaver Shop in terms of when you think about our demographic. I've always described Shaver Shop as, we're not business class. We don't wanna be business class. It's too niche. You know, you don't walk in our stores and get intimidated because we only got 10 products on show or, you know, it's a intimidating store to walk into. I view it as with premium economy, and that's a sweet spot. You know, we appeal to the masses, which is what you wanna do, but we offer great service. If you do want the absolute best product in any category or price point, we have it. We're not intimidating to shop at, whether you're a woman or a man, you know, very accessible. I think that's really important. Particularly when things get tougher. Because obviously the propensity to spend may tighten a little bit, and I think that accessibility will become hopefully more and more relevant. Right. Yep. Okay. Yeah. In line with what I was thinking as well. Thanks a lot, gentlemen, for your answers and your thoughts and presentations. Great results. Pleasure. Thank you. Thanks, Divik. There are no further questions at this time. Now I hand back to Mr. Fox for closing remarks. Thank you. I'll just wrap up now very quickly, everyone. Just to close with a few key bullet points on Shaver Shop. We are a segment leader, both online and offline. We do operate in a large and growing market driven by changing consumer preferences and new product innovation. Our product range is applicable to almost all demographics, which is what we just touched upon just then through the Q&A. COVID-19 has accelerated DIY personal care adoption and introduced new customers to Shaver Shop. Most importantly, we are a differentiated and resilient specialty retail business model. We offer service excellence and unparalleled product knowledge, as evidenced through our NPS scores. We have a significant range of product exclusives, which we're looking to leverage more and more, and we offer a competitive value-based pricing across all segments and all products. We have significant potential to further increase market share. We have very strong brand awareness in Australia, albeit New Zealand is still very low. We have proven and highly profitable omni-retail model. Importantly, we have a very clean balance sheet with no debt and very strong cash conversion. We have an experienced management and board team, strong focus on investing for growth and improving total shareholder returns. Hopefully everyone agrees, a strong dividend payout. With that, I'd like to thank everybody for joining us on today's call. We look forward to seeing you in the future. That does conclude our conference call today. Thank you for participating. You may now disconnect.