Morning, and thank you for standing by. Welcome to the Associated British Foods trading update conference call, hosted by George Weston, Group Chief Executive Officer, and Joana Edwards, Group Chief Financial Officer. At this time, all participants are in a listen-only mode. After the speakers' introductory remarks, there will be a question-and-answer session. To ask a question during the session, you will need to slowly press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to George Weston. Please go ahead. Good morning, everyone, and thank you for joining this call. This morning we published a trading update for the fourth quarter of ABF's 2026 financial year. If I were to characterize it was a quarter where trading was okay, but one which we also took some important strategic steps, in both Primark and in our foods businesses. As a result, there is a lot to cover in this morning's update. I will take a few minutes now, if I may, to give you some color. While the financial year hasn't quite finished, we now have a good sense of how the results will land. Starting with Primark, sales in the fourth quarter are expected to be up 2% and up 2% for the full year in 2026. In a consumer environment that remains challenging in most of our markets, Primark's like-for-like sales are expected to be down 3% in quarter four and down 2.6% for the full year. The trends in quarter four were very similar to the previous three quarters this year. We remain encouraged by good results in both the U.K. market and the womenswear category across all markets. This, as we have said in the past, is the area we have unapologetically prioritized both our focus and our investment. We have sharpened prices, we have improved our product offer, we have increased investments in marketing, strengthened our digital capabilities. We are seeing the benefits, and there is more to come. I am particularly pleased with the recent launch of our Iconic Value campaign. This is a strategic investment. It is an important investment to introduce new lower prices across hundreds of items. It is across all markets and categories. Primark is redefining value and not just through price, but also in our continuous improvements in quality, style, and the store experience. It is early days, but the initial volume reaction has been encouraging. Our good execution of new stores contributed around 5 percentage points to sales growth in quarter four and is expected to contribute around 4% for the full year. We are very pleased with the initial success of our franchise stores in the Middle East. Our first stores in Bahrain and Qatar are due to open shortly, and we have now expanded our franchise agreement to include Saudi Arabia. We have also signed a franchise agreement with a new partner to enter the large and important Mexican market, in due course. In terms of profit, we continue to expect Primark to deliver an adjusted operating profit of approximately 10% for the 2026 financial year. Looking ahead, we are excited to announce that Primark will offer U.K. home delivery in the future. Importantly, this will be a profitable channel for growth that complements, it does not replace, it complements our store model. Let me say a bit more about why we want to move into home delivery and why now, particularly given our strong resistance to doing so in the past. We have always known that there is an incremental customer segment that Primark could reach by offering home delivery. Historically, though, there just was not a way for us to make money from providing that service. We have monitored and watched the online channel closely, and over time, we have seen the economics of the home delivery market evolve, including the introduction of returns policies and increased fees. As a result, there is now an opportunity to drive profitable incremental growth through this channel. The other thing that has changed over time is that we have built strong digital capabilities in Primark, which maybe two or three years ago really did not exist, including in digital marketing and Click & Collect. This means we are well positioned to maximize the potential of home delivery and to use it to accelerate our digital flywheel, which complements our store model. That is why now is the right time to take this step. Having made that decision, we have acquired, and you will have seen the announcement this morning, a highly automated depot in Sheffield. It gives us the capability to offer U.K. home delivery, and it gives us the capacity to continue to grow Click & Collect. It is a good deal for us. We are not setting a timetable for home delivery today, and we are not providing any financial data at this stage. But this really is an attractive growth opportunity. Moving to our food businesses, grocery sales grew in the quarter. Overall trading in Twinings, though, was below our expectations. The extended hot weather in the U.K. and Europe impacted hot tea consumption, particularly black tea. In Ovaltine, there was a phased impact from the change to a new distribution model in Thailand, which will save us money from next year but gives us an impact this year. As a result of all these short-term impacts, we now expect grocery adjusted operating profit to be slightly below our previous expectations for full year in 2026. We are very pleased that we have completed the Hovis acquisition, and that we are well underway with the integration. We expect this transaction to deliver significant synergies in both production and distribution. This will give us the ability to create a sustainably profitable bakeries business, supported by investment in marketing and innovation. You will see Hovis is already back on air. In 2027, we expect grocery adjusted operating profit to be slightly ahead of 2026. While Hovis is significantly diluted to grocery profits next year, it is expected to be accretive to profit in subsequent years. To ingredients, both our yeast and bakery ingredients businesses and our specialty ingredients portfolio delivered good growth in quarter four. Our full-year expectations for 2026 are therefore unchanged, and for 2027, overall ingredients profit is expected to be broadly in line with this year due to start-up costs in our new yeast facility in India. In agriculture, adjusted operating profit this year is expected to be in line with our previous expectations. We have taken a decision to focus on our higher growth segments and higher margin segments and to exit, I beg your pardon, our U.K. compound feed business. We've already divested two of our 10 mills during 2026, and we expect to finalize the future of the remaining mills by the end of 2027. These are now within our disclosed and closed operations. We expect agricultural profits to grow next year. In sugar, the adjusted operating profit loss in 2026 is expected to be towards the higher end of our previous guidance range of GBP -25 million to GBP -60 million. Since July, we've increased the level of onerous contract provisions taken this year for two main reasons. One, we now expect a small U.K. crop, and this has a negative impact on overhead recoveries next year. Secondly, natural gas costs, as you all know, have risen significantly, and this increases production costs. We remain cautious on the outlook for sugar for 2027. We expect the operating loss to be below this year or to be worse than this year and to be in the range of GBP -70 million to GBP -170 million. There are a number of factors that could materially influence the outcome within this range, either positively or negatively. In particular, significantly higher gas costs lasting for longer, production levels in Africa, which may well be affected by El Niño weather impacts, and currency movements, notably, in Malawian kwacha. Looking ahead, we've seen a recent turn in European sugar prices, and there are two reasons why this trend should continue. First, European sugar production, which is starting now, is estimated to be significantly lower this year than for the previous few years. Back in June, as I said, last time we were together, the European Commission estimated that European sugar consumption would drop nearly 15% in this year's harvest, partly due to lower planted acreage. Since then, the very hot and dry summer that's affected us has affected many other European sugar producers. Northern Europe, in particular, has significantly reduced yield estimates. It's too early to put a hard number on that because the harvest is only just starting. I think the German number was to be down 24%. A more significant deficit in European production this year, for all its effects our overhead recoveries, will allow the industry to work through the surplus inventories in the system much more quickly than we had previously feared. In summary, supply and demand has altered significantly in the European market, and the stock overhang will be worked through the system quicker. Secondly, and also supporting world market, world sugar prices have risen sharply in the last only six weeks, and if they remain at these levels, it's less likely that cheap imports will fill the gap in domestic supply. In 2027, though, we won't see the benefit of these high European prices in our results, especially not in the U.K., because we are already a long way through this year's customer contracting round. However, higher prices should benefit our future years. We continue to look very seriously at our cost base, both in Spain and also in the U.K. In the U.K., this includes the announced closure of Cantley, which is one of our four production sites in the U.K. This will enable us to meet existing customer demands more efficiently and will support sustainable profitability over the longer term. Finally, and sorry, I've gone on for quite a long time, but there's been a lot to say. Finally, an update on the demerger of Primark from ABF food businesses. We are making good progress towards being demerger-ready, and we expect the demerger to take place in December 2027. This gives us time to build the systems and processes necessary to operate both businesses on a standalone business. This is important. It also gives us time to explain more about our businesses, particularly in food, to the market. We're not going to rush that. As well as separate capital market days, we will run a series of smaller investor education events for the different components of our food businesses, many of which I believe are less well understood. Thank you for your patience. With that, let me hand over to questions. Thank you. To ask a question, you will need to slowly press star one and one on your telephone and wait for your name to be announced. We will now go to our first question. One moment please. Your first question today comes from the line of Clive Black from Shore Capital Markets. Please go ahead. Oh, good morning. Thank you for the run-through and the opportunity to ask a question. Just two from me, if I may. First of all, can you just give a little bit of color how the balance sheet may have looked at the year-end? Secondly, a little bit of a left field question, but just in terms of ingredients, which is quite a profitable business, what is the magnitude of the investment in India? In that respect, how is that influencing the FY 2027 outlook? Thank you. Okay. Clive, morning. Let me hand over to or ask Joana to answer the first question, and then I'll come back on the cost of the yeast factory in India. Morning, Clive. Thank you for the question. I always like those questions on balance sheet. We haven't yet closed the books. We've still got a little bit of trading to do in Primark. But as you've seen, we've done quite a lot of investment in this last few months, including the investments that we've made today on the Sheffield warehouse. What I can say at this point in time is that we will be around the leverage levels, just above the 1 times. So priority from a capital allocation has always been investment, and that's what we've been doing this last quarter. Can I just come back on that, Joana? George mentioned restructuring in agriculture, and also clearly the Cantley closure in the U.K. Should, in that respect, we be anticipating elevated impairment or exceptional items or restructuring costs in the balance sheet in November? Yes, there will be some, the same way as there will be below the line, you'll see also the start of the transaction costs. We have not got all of those into FY 2026, bearing in mind that some of the announcements on restructuring have just taken place. But yes, we will be seeing some of those reflected in the balance sheet. There's also, as we mentioned, the Mills ABN restructuring. So, there will be a few puts and takes in the below the line. Thank you very much. Clive, but just as a reminder, looking forward into 2027, there will be a fairly significant working capital unwind as we sell the feed mills. That will help. Yeah Next year's balance sheet, even if some of the restructuring charges hit this year. On to ingredients. Yeast and bakery ingredients investments in India. About 100 million between two different plants. The bigger number is the yeast plant in Pilkhuwa, in the north of India, and then also the BI factory, which is now up and running. The yeast factory is commissioning. There are commissioning costs to these plants. I think we're getting on with it in the yeast factory in particular. As we build volumes for the yeast plant, we will have some stranded overhead until we've built that new plant up. It's quite a big facility. Underlying, George, are you anticipating that the Ingredients business, excluding India, will make good profit progress then? Yes. It's early days. The specialty ingredients businesses are feeling particularly well-placed at the moment. Yeast is quite a big energy user. We worry about some of the input costs in that part of the business. Okay. Look, thanks very much for your time and the answers to the questions. Thanks, Clive. Thank you. Your next question today comes from the line of Richard Chamberlain from RBC. Please go ahead. Thank you. Morning, guys. Three from me, please, if that is all right. I just wondered if you could, in the light of this acquisition of the Sheffield D.C. from Boohoo, give an idea of Primark CapEx expectations for the coming year and whether you still need additional Click & Collect warehouse capability in addition to what is being provided on the home delivery side. Then again, on Primark, what sort of reaction are you seeing to marketing investments? Should we expect more of that impact to come through in the coming year in terms of brand halo and so on? Then finally, just on the sugar side, I wonder if you can just give an update on energy costs, what you are assuming you are going to be paying for gas and so on compared to what you have been paying in the last quarter or second half of this year. Thanks very much. Yeah. So the Sheffield D.C. will remove the need to do anything on Click & Collect warehouse investment. Part of the business case is to give Click & Collect all the growth space capability that it needs. We expect that Click & Collect will move into that Sheffield site first, and then followed on with home delivery thereafter. Marketing investment returns. Well, in the U.K. in particular, we think we have got the marketing mix about right. We are driving incremental sales. Now there is a lot more beyond simply above-the-line advertising going on. But the brand metrics, in particular, have benefited from the advertising and anything that we specifically advertise as selling well. We have seen a good reaction in Spain to the first full integrated marketing campaign that gives us confidence, and in France too, where we have started the marketing journey. Again, a good reaction to that. Sugar energy costs, we are forecasting somewhere over pound a firm into next year. Now we do have, though, some uncovered energy needs. We will not know exactly how much until we know how much crop we have got to process. But when I last looked, which was yesterday, spot gas prices were about GBP 1.90. So there is exposure there. And we will just have to see where that goes. We are taking some of that exposure into the onerous contracts this year as we flagged as well. Cool. Okay. Thanks very much for the color. The two big gas-saving projects are firstly Cantley. Closure of Cantley will save us on gas usage. Then we have, I think it's the U.K.'s largest onshore energy reduction program, carbon reduction program, which is steam drying at Wissington, which we will turn on with the new campaign. We are taking two big steps to reduce energy use, but we will remain large energy users despite that gas bridge it uses despite those two steps. The benefit of Cantley will be in FY 2028 rather than this campaign, most likely. We will see on the size of the catalog of the. Yes. Conference one. Great. Thanks very much. Thanks, Richard. Thank you. Your next question today comes from the line of Jon Cox from Kepler Cheuvreux. Please go ahead. Yeah. Good morning, guys. A couple of questions from my side. Just in terms of Primark and you are looking ahead for FY 2027, you talk about aiming for like-for-like growth. Just any initial thoughts? I think today's figures in Europe look a bit worse than people are anticipating, maybe hoping for some improvement there. Just wondering how long do you think Europe will take? You have said, obviously, clearly the focus is on the U.K., but I thought some of the practices in the U.K. were already being rolled into Europe, and clearly Q4 was worse than it was in Q3. Second question, just on the home delivery. You talk about profitable growth. But just bearing in mind what you said historically about the cost of delivery and your average ticket size, do you think the profitability of that business will be below your high street business? Then the last question, just on sugar. You seem to indicate in the last statement all options are open with regards to that sugar business. The losses seem pretty dramatic now in the next financial year. Is that really because you decided, look, the shape of the sugar business you want to maintain and it is really getting to grips with the various issues? And really just on the size of that loss you are talking about for FY 2027, you seem to allude it is the U.K. crop which is the issue, like the bad weather, well, the hot weather means that your production is low and as a result, that is the main drainer you think in FY 2027? Or is it part of the African business you mentioned, El Niño in Malawi and currency movements? If you could talk a little bit more about that, because the headline size of that loss looks pretty dramatic. Thank you. Yeah. No, thank you. Why do not I handle sugar first, and then you do Primark like-for-likes? Okay. The increase in onerous contracts into this year is a U.K. issue, and it is a combination of our current best assessment of the likely size of the U.K. crop, and therefore the likely overhead recoveries. It also has some very, well, realistic/miserable assumptions about the cost of processing that sugar. Looking into next year, within that range, we have taken some account of possible volume impacts from El Niño, but we just don't know. You learn about El Niño really after the event. I think it would be irresponsible of us not to include the likelihood of some weather effects. In the past, El Niño has often led to early and heavy rainfall in Tanzania, but dry weather in South Africa. The hot weather, sorry, Spanish beet is irrigated, so there isn't a crop risk in Spain. Obviously, I mentioned the U.K. one. I think the issues in European sugar really are limited to two, energy prices, gas prices in the U.K., and then sugar prices across all Europe. I think this end, we're feeling more optimistic about the direction of sugar prices than we have for two or three years. Europe, we think will be, well, we're fairly sure there will be a significant deficit of sugar production in Europe. Because it will be significant, I think Europe will get through the stock overhang quickly, as I said before. Looking forward into 2027, 2028, I think there are reasons for optimism both in pricing, and then you wonder how long we can all sustain well-nigh GBP 2 firm gas prices. I think at some point those will come down. Africa, lots of reasons for optimism looking through weather events. In Tanzania, the new factory is well on the way to commissioning. Malawi, good. Zambia, good. There's been a problem on pricing. Too much imported sugar coming into South Africa, which has affected pricing in South Africa and Eswatini. Those, though, remain well-placed businesses. Africa, yeah, weather threat. Europe, I think looking rather better in the medium term. Like-for-likes. Morning, Jon. For Primark, you have been saying that the focus is driving that top line growth. But as we noted in the statement, and you've picked up the 4.3% down on continental Europe for the like-for-likes for the quarter, we do note that the consumer confidence remains weak. Thinking that we go from that phase into positive like-for-likes is quite a leap. We are very wary as well that we need to manage stock and inventory. Yes, we are continuing to focus on gaining market share, but we are aware that the consumer sentiment has still not quite turned, and certainly that's impacting us in quite a few of our markets. You had asked about home delivery profitability as well and whether that was finished. Do you want to take that one or? Yeah. What we think we can do is, firstly, offset some of the cost of home delivery. The market really has come towards us in terms of pricing for delivery to people's homes. The depot will give us a good pack and dispatch base, cost base. The trick is to make sure that the bulk of the home delivery sales are incremental, not substitutional. We think that we've got the tools to help us along to achieving that. Okay. If I could just come back to the like-for-likes for FY 2027 in Primark. We shouldn't expect necessarily to go positive in Europe in the current year, but maybe the U.K. will be slightly better, so we'd get somewhere close to flat like-for-likes. Is that the plan? Yes. I think that we will hopefully see the like-for-like starting to improve, but we need to put that in the context of the consumer. It wouldn't be unwise to do so, as I've said, particularly in terms of stock management. No, but just in terms of all the initiatives you're doing and you're talking about the new range and the volumes look good and just something for us to hold onto in terms of an improvement at Primark. Yes, we should continue to see the improvement. George talked about the Iconic Value campaign, which started very well and which we have rolled out in all the markets. So we should be seeing an improvement. But it is going to take time. As I say, we do have to take a view on what the markets will do and market performance overall. All right. Thank you. Thanks, Jon. Thank you. Your next question today comes from the line of Frederick Wild from Jefferies. Please go ahead. Good morning. Thank you so much for taking my questions. My first is just about the. They are both really about the external environment, I am afraid. The first is on whether you are seeing any extra cost pressures emerge within Primark from the macro environment, whether they be from freight or COGS, and whether there are any offsets to that from, say, sourcing availability in Asia and how that has impacted your FY 2027 margin guidance for Primark. The second question is, there have obviously been a lot of changes in the last few months in terms of de minimis exemptions ending in Europe. I just want to see whether you have seen any change in the competitive landscape emerging from that. Thank you. Primark costs, lots of puts and takes really. The dollar helps us. Freight is sort of okay. We have had some material costs, so fabric cost increases, but we do not really see those until the second half. Taken all together, there is some cost inflation in the Primark supply chain, but not much. The team is continuing to work on driving efficiencies because there is also inflation in salaries, et c, but compensated by- Yeah working through the cost base. We're still, I have to say this, it's not answering your question on de minimis, but we're still grinding our teeth rather that everyone else can get steps in place on de minimis to remove the tax advantage, apart from the U.K. I haven't had any conversations with the Primark team where they've suggested that they're seeing change in consumer behavior because of the de minimis exemption. I didn't join any of you? No. I think. It hasn't come up. It comes out in the media, and I think that there's been quite a lot of talk about it, but. Yeah It's going to take a bit of time for customers to go, "Oh, I wanted to use Shein, oh, it's going to cost me a lot of money, so I'm going to go to Primark instead. Yeah. it's probably something that will filter through. Thank you. Could I just, sorry, ask a quick follow-up. Based on your comments on cost, does that imply maybe some more cost headwinds in FY 2028 emerging from this? Well, I think we just have to see where these energy costs go, because it's too early to talk about 2028 on fabric costs. Okay. Thank you so much. Okay. Thank you. Your next question today comes from the line of Adam Cochrane from Deutsche Bank. Please go ahead. Good morning. A couple of questions on Primark, if I can. When you are thinking about your flat EBIT margin for FY 2027, you mentioned briefly about the limited like-for-like maybe expectations within gross margin. You are doing some investments into pricing, but you have some benefits from FX, et c. What are the moving parts to get to a flat EBIT margin? If you do not have much in the way of like-for-like, you probably have some cost inflation just naturally coming through. You have a large cost efficiency plan. Can you just explain how you get to a flat EBIT margin? It seems quite a good performance on a flattish like-for-like. And then secondly- Yeah. Again, I mean. Sorry. Sorry, Adam. Keep going. No, yeah, sorry, you said you had two. Yeah. In terms of the volume uplifts that we're seeing from the Iconic Value ranges, are you also seeing a halo effect that customers coming in to buy those products are also buying some of your other products as well? Or if they're primarily just coming in to buy the Iconic Value ranges, is there a chance that you have to broaden that investment to more of your categories? And then final one is really quickly, on the online home delivery, I'm assuming the answer's going to be no, but does it have any change in your view of the long-term store expansion potential in Europe, given that you can access some of those customers via a different channel, potentially as you roll it out into Europe in the future? Thanks. Yeah, good question. The flat EBIT margin has several parts within it. We talked about the cost base, where as I said, there's not. The kind of commodity costs and labor costs, there's not much net news in there. Some of the cost-saving initiatives are quite large, and we'll start to see them coming through. The one that we haven't really mentioned, except tangentially, the markdown percentage this year will be higher than last year, and going into next year, we've taken steps to address that, and if we successfully do so as we think we will, that will contribute to margin maintenance as well. So offsetting, I think the cost savings there, we've got significant investment in price going on, and I suspect, I think that that leads me to the second point about halo. We're doing this because we know that our reputation for unbeatable value was fraying, and we're putting that right at pace. We are a volume retailer, and therefore the right thing to do is to invest in price wherever there's an opportunity to do that in order to drive volume. The volume uplifts and the promoted prices have been good, and we're watching the overall Brand reputation around value for money closely. But it's important to repeat what I said in my opening statement, that this repositioning or this kind of sharpening of value goes beyond simply price and also goes into range and fabric and fit. In a number of categories, starting with womenswear, the quality of what we're selling, the durability, the fashionability, the sizing accuracy, has all taken a step forward and will continue to do so. It is more than just price, it is also the other components of value. Home delivery across Europe. No. We expect, we intend that the introduction of home delivery in the U.K. will actually drive same-store sales as we attract more people into the brand. We would expect, if and when we get onto home delivery in Europe, the same thing to happen. Yeah. One of the things that we are interested in Europe is getting the brand better known outside areas where there is a store. No, I do not think it does affect long-term store expansion plans in Europe. Thank you. Okay. Thank you. Your next question today comes from the line of Sreedhar Mahamkali from UBS. Please go ahead. Hi. Good morning, team. Thanks for taking my questions. A couple of them, please, most of them are already asked. Perhaps on grocery, George, I think you're talking to an improved performance in FY 2027, including Hovis losses being consolidated. If you could tell us how you see what the drivers are of an improved performance in grocery, and also what should we be thinking in terms of that Hovis losses total, like bakery's losses expected to improve sharply with the synergies. That's the first one. Secondly, on Primark and home delivery, can you talk a little bit more about how you're preparing for it? What are the milestones? When might we potentially see the launch? Thank you. Yes. Or in Italy as well. To home delivery, I think I'll be allowed to, not so much apologize, but to explain why yesterday's conversation was incomplete. We hadn't, at the time, actually signed the agreements to buy the Sheffield distribution center, which is quite a big piece of the home delivery story because it allows us to get into home delivery significantly faster than had we had to build a greenfield distribution depot for single pick. But we couldn't tell you. As I say, Click & Collect will be in that facility in the first half of next year, and we're not saying anything about the date of starting home delivery because that's pretty sensitive commercial information. We're moving at pace. We're moving at pace. Bakery losses will be greater than they have been prior to the Hovis acquisition for a couple of reasons. The first one is that a number of costs, energy-related costs, but also wheat, have increased in price. We need to recover that still from the marketplace. Secondly, there are reorganization costs to be borne through the year, which will increase the losses as well. We don't get the benefits of the synergies until probably we start to see them in the second half of next year. The first half is going to look pretty challenging. That is the largest contributor to next year. That's the largest negative contributor to next year's grocery profitability. We expect to see good growth in Twinings, not least because the, I think I mentioned this in July, the cocoa price has come down somewhat. Secondly, within Twinings overall team, we're beginning to see some of the benefits of the investment in digital infrastructure and ERP. Australia should give us decent growth. We're worried about the Australian consumer. The U.S., I'm afraid there's still more volume to be lost in our oils business, so that's a drag. The rest of U.K. grocery, I think will be good. Thank you. Okay. Thanks, Sreedhar. Thank you. Your next question today comes from the line of Anubhav Malhotra from Panmure Liberum. Please go ahead. Hi, team. Thank you for taking my questions. I have two on sugar, really. There have been some recent news in the African press on acquisition interest in Illovo. Just in that context, maybe can you share your views on the strategic value of that business and if you would be open to any options for the asset if there's an attractive enough offer? Then secondly, there's also some recent news on sugar import tariff regime in South Africa. They've increased the prices on those imported sugar. Does that have any impact on your view on the profitability of the South African sugar business for next year, I know that has been a drag, or not yet? Thank you. Yeah, two good questions. Look, the commentary in the South African press about acquisition interest in Illovo is just gossip. We're not going to say any more than that because we just don't discuss either gossip or anything to do with corporate level activity. The tariff regime, I don't think the changes will help 2027 because there's a lot of stock in the country that's coming very cheaply. It remains, there's a market overhang there. We don't think the tariff regime goes, the changes go far enough, and we're making that point to the authorities. The situation with the new suggested prices is less bad, but it's not good. I don't think they've done the job that they need to do in order to support growers and millers in South Africa. Yeah, I wouldn't believe everything you read in the South African press. But can you just clarify if you would be open to strategic options for that asset, if not particularly with this offer, but in general, if there's any offer at all? I'm not going to speculate. Okay. Thank you. I wouldn't on any other part of the business, I'm not going to do it on this one. Thank you. We will now go to the next question. The next question today comes from the line of Georgina Johanan from JPMorgan. Please go ahead. Oh, hi. Three questions from me, please. The first two just being clarification, if that's okay. First of all, on the freight point, I am a little confused because obviously we have already seen material freight inflation. We have had retailers such as Inditex referencing the pressure on gross margin as a result. So, when you say freight is expected to be okay next year, do you mean you have offsets or are you actually not expecting to see any pressure from freight next year and therefore instead it could perhaps be a fiscal 2028 issue? That is the first one, please. The second one was just on home delivery. I understand your point around attracting more people to the brand in Europe and therefore perhaps increasing store like-for-likes in Europe. But just to be clear, in the U.K., have you factored in a portion of cannibalization or are you actually expecting it to drive higher in-store like-for-like sales in the U.K. as well, please? Then just finally, given some of the moving parts on the balance sheet and the warehouse acquisition and so on, could you just perhaps give some color on how you are thinking about share buybacks into next year, please? Thank you so much. Thanks, Georgina. Freight, we are pretty well hedged out through next year. So, on sea freight, and we use very little air freight, where I think rates have increased very significantly but really are not having an impact on us. So that is freight. So it is not a question of offsets. Home delivery in the medium term, we think will drive same store like-for-likes. So it is not an overall like-for-like figure. It is a, we think it will support stores on top of being incremental volume in its own channel. If I may just say. Yeah. We haven't decided on how we're going to report, if that was the question, if we'll report it separately or not. Yeah. Yeah. Share buybacks. Well, surplus cash firstly goes back into the business where there's a demand. Joana, you were saying before? Well, I think it's a bit what I've already said to Clive, which is our capital allocation, to your point, is about investment. Yes, we just spent significant amount of money. I think Debenhams put it out there, GBP 90 million on the distribution center. We've made some good investments. Leverage will be within what we feel is the right level. So the decision will be made by the board in October, and at that point in time, we'll communicate. But priority on investment in the business. Thank you very much. May I just follow up on the freight point, because I understand about the hedging, but my understanding, but perhaps I'm incorrect, is that there does tend to be fuel surcharges that come in over and above your hedged levels. Is that not the case for Primark, then? I think we'd probably rather stay away from our commercial arrangements. Just to be absolutely clear, you'd expect freight costs from a margin perspective to be flat year-on-year into fiscal 2027? We don't see freight as a headwind going into FY 2027. Okay, very clear. Thank you very much. Thank you. The next question comes from the line of Warwick Okines from BNP Paribas. Please go ahead. Morning, everyone. Yeah, three questions actually from me as well, all on Primark, just building on what you've said. Firstly, could you reassure us about how much tighter your Primark inventory is heading into winter, just to reassure us about the margin recovery? Maybe something around cover or inventory per store. Secondly, George, you mentioned the price investment in Iconic Value, and I think Owen, a few months ago, was talking about, for example, in kidswear, reducing a third of new lines on a like-for-like basis. What sort of overall pricing like-for-like do you see in autumn winter and maybe heading into next year? Thirdly, on home delivery, could you remind me where you are on RFID and whether you need this for home delivery or if that's a separate consideration? Thank you. Yeah. There is a lot of work going on in the supply chain which will, taken together, improve stock accuracy and reduce cost. In improving stock accuracy, it will also improve availability. Those are really important projects for us. How much tighter? I think there are a couple of things. I think we, like many others, are looking at these transition ranges. We got caught, quite frankly, last year with far too many heavyweight garments post-Christmas, and we sold them at very significant discounts. We won't be doing that again. There's a sort of tightening up on autumn winter heavyweight. At the same time, a development, again, like many others doing, of transition products. We have seen great response to workout gear. That is a very strong transition product for us already, and we'll be doing more of it. It's just an example that we're rethinking, if you like, August through September, October, and we're rethinking post-Christmas in the ranges, both in quantity and also in the offer. Just from a balance sheet perspective, if that was part of that question, we should be seeing a working capital that is not increasing going. We will have less weeks cover going into the end of this financial year. Yeah. Then, sorry, kidswear price investment. I think I am just going to take the fifth on that one. But I was really thinking about across all of Primark. I think you have said that your like-for-like prices are lower on average. Is that a fair reflection of autumn winter? That is a fair reflection of autumn winter. Yeah. Kidswear is an important part of that pricing initiative. Pricing strategy. Yep. RFID home delivery? I am also going to decline to help you out on that one. Okay. Fair enough. In which case I will ask number four, perhaps you can. I think Georgina already asked this in many ways, but I suppose I do not understand why you would expect home delivery to drive incremental store like-for-likes unless you have seen that happen in Click & Collect. Have you seen that within obviously? Yes. What have been negative like-for-likes in the last couple of years? We've seen the attachment rate in stores be significant, and we have seen footfall improvements in stores too. And we're seeing a new shopper coming because we have Click & Collect. Got it. Okay. Thank you very much. Okay. Thanks, Warwick. Thank you. Next question today comes from the line of Vandita Sood from Citi. Please go ahead. Hi. Morning. Thank you for taking my questions. Just a really quick one on sugar, if I can clarify, and then I have one on Primark CapEx. On sugar, I think you've previously spoken about the GBP 25 million adjustment from the Malawian currency, and I think previously this was in this year's guidance. Just wondering, you're closer to the GBP 60 million losses this year, even though you've not taken into account the GBP 25 million from the currency, and is that also now in your assumption for FY 2027? Then just building on a couple of other questions on Primark home delivery, just wondering what else we need to think about in terms of CapEx other than the fulfillment center that you require. Presumably you need things like CRM functionality, payment functionality, merchandising, how much more incremental CapEx do you need versus just setting up Click & Collect versus when you set up home delivery? Thank you. The numbers we're talking about for FY 2026 sugar, I think have two partially offsetting big elements to them. The first is the increase in the onerous contracts driven by overhead recoveries next year and gas prices next year. That's a significant negative. The positive is that Malawi hasn't devalued. The effects of devaluation on profitability are more complicated because we're into hyperinflation accounting. I mean, we're not through this year yet, so there remains some residual risk the Malawians decide to devalue. We know devaluation is coming. We will have to offset the price devaluation with pricing, if and when it comes. It's an assessment of it, an estimate of it, and the timing of it is in the range I've given you, the - 70 to - 170. And we're quite sure that it will come. It has to come. Home delivery, other functionality is slightly caught up in my point about our own digital journey. We have built a lot of capability that supports home delivery. There will be some extra we need, but we do have quite a lot of the infrastructure already that we will need. This is currently supporting both the digital communication but also Click & Collect. The extra CapEx is not huge. Thank you. Sorry, just a quick follow-up on the offsetting sugar with the pricing point. What is the earliest you can start to benefit from the higher sugar prices in the market, given where you are in your contracting cycle? Well, I think Spain has more spot trade than the U.K. The U.K., I think we shouldn't be estimating any pricing improvement in 2027. So, this time next year we will be through the contracting round for 2028. And we will be looking into, I think, significant higher prices. But we won't benefit from it in the U.K. until 2028. In Spain, there may be some earlier improvement. Very clear. Thank you. Thank you. That was our final question for today. I will now hand back to George for final remarks. No, I really just to thank you all for coming on this call. It has been an important one, and I think it is one where I hope you begin to understand our confidence. Well, there is a lot of good work going on, which sets us up well for the future. Home delivery obviously important. The two franchises, Saudi and Mexico, don't underestimate their importance in the medium term. The sugar production levels in Europe, don't underestimate the importance of them looking into 2028. And then that is on top of a lot of other good work that is going on, both in the digital space, but also now we are getting into sort of completion of some of the CapEx projects that have been going on for two or three years. So, it is actually, it is a very busy time. It is a very exciting time. I think the numbers don't reflect the optimism that we all have for really both sides of the business. And lots to be done on the demerger still. So, thank you very much. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.