Good afternoon, ladies and gentlemen, and welcome to the Lookers plc half year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab just situated on the right-hand corner of your screen. Please simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself, however, the company review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we would like to submit the following poll, and your participation, I'm sure, will be greatly valued by the company. I'd now like to hand over to CEO Mark Raban. Good afternoon, sir. Good afternoon, everyone. Thank you very much indeed for the introduction. I'm Mark Raban, Chief Executive. I'm joined by Oliver Laird, our Group Chief Financial Officer, and Duncan McPhee, our Chief Operating Officer. We have a presentation to wander through this afternoon with you. It should take us about half an hour or so, and then we'll be happy to take your questions. You can submit questions throughout the broadcast through the Q&A. If I can have the first slide, please. This is our agenda. I'm going to give a quick overview of key highlights, and then I'll give an update on our strategic priorities. Oliver will take us through the financial overview. Duncan will give us his operational insights. We'll take a summary and a quick look at the outlook and then we'll have a Q&A, as I've already said. If we move on to the overview then please, Oliver. Overall, a very good first half performance. Underlying PBT, you can see, came in broadly in line with last year. Keep in mind, last year was against an exceptionally strong post-COVID period, during which we saw the really strong pent-up demand and also that included GBP 12.7 million of various government support. Underlying probably about a 27% underlying earnings increase, which is an excellent result. The backdrop really to the period has been one of vehicle supply disruption across both new and used vehicles. As a consequence of that, both the new car market and the used car market have contracted during the period. Aftersales, a very, very important part of our business, it's a very stable and profitable earnings stream. I'm very pleased to say that has grown at nearly 9% during the period. We've seen as well an overall continuing strengthening of margin across the group. That's largely, as you'll see in a second, being driven by new vehicles both in the context of some strong market tailwinds, but also some very strong and decisive self-help measures. Cost inflation has, like all companies, hit us. We've seen our underlying operating costs up by 8.6%. That's a significant increase on our cost base. I'm very pleased to say that we've declared an interim dividend in line with our capital allocation policy of GBP 1, the first interim dividend in a couple of years. The next slide. I think all of that positions us very well, I think for the future in what is set to remain a challenging market. As you'll hear from me in a minute, we've made exceptional progress on our strategic priorities, with the focus very much on self-help operational optimizations, doing what we do but doing it better, quicker, more efficiently. We've got a very strong order bank, a record order bank, 22,000 new retail cars ready to go. To set that in context, we sold 21,000 new retail units in the first half. A very strong order bank, but we are anticipating this supply disruption to continue. The availability of those cars is not certain at this point. Our relationships with all our OEMs have improved over the last year or so. We're working very constructively with those OEM partners that want to pursue agency. In pursuing that, we think it's a big opportunity and an exciting growth potential for us in the future. The balance sheet, which I know will be of great interest to you all, is very well underpinned. Good cash and property equivalent to GBP 0.95 per share, which against the current share price, shows you what embedded value there is in the group. We're expecting inflationary cost pressures to continue, but Oliver will touch on, very importantly, what we're doing about containing those moving forward. At this stage, our outlook for the full year, 2022, is in line with the market consensus. Obviously, September is a big month for us. It's the registration plate change in the U.K., and we'll be providing an update to all shareholders and the market in October once that's dealt with. To the next slide, please. This really is just this very simple profit track year on year, and it demonstrates the very strong underlying performance that I mentioned earlier. You can see that adjusted PBT in 2021, after you take out government support, was GBP 37.3 million. We added an incremental GBP 26.3 million through the gross profit line, coming largely through new and then those costs coming back the other way, which I mentioned earlier, which are largely around staff costs and around utilities. So that overall gave a GBP 47.2 million versus GBP 37.3 million growth of 25-26%. Very strong overall. If I now go to our update on the strategy. Back in January this year, we laid out the results of a very comprehensive review of the group strategy of the opportunities that are available to us, and we reset our vision and purpose and strategic priorities. As you can see from this slide, we defined six very clear strategic priorities for us to go at. What I'd like to do really is step through those individually in a bit of detail, if I can. Next slide please, Oliver. The first one was really operational optimization. That's the cornerstone of our group strategy. As I've already said, it's about doing everything we do just more efficiently and quicker and better and more cost effectively. We set ourselves five goals really, as you can see down the left-hand side, and I'm really pleased that we've made good progress on all of them. Looking at order conversion first, we're an order rich, an inquiry rich business. We have no shortage of inquiries within our business, and our focus is on converting those to sales. We've increased our conversion by 1% during the first half, only a small amount relatively, but every 1% has a big impact in a business our size. It's a good start and you'll be expecting to see us move that forward over coming months. We said that we wanted to improve after-sales penetration of older vehicles. It's very important to us, and we're doing that through increased sale of loyalty-based products, 'cause that's the way to retain customers in our business. We've currently got 146,000 live service plans out there, those are typically three-year service plans. We sold 16,000 used warranties in the first half. That's a threefold increase on what we did in 2021. Really important that, because it keeps customers coming back into our workshops and into our showrooms and enables us to get into those older cars. We've also introduced a number of easy payment options for customers with older cars facing larger repair bills, so that they can undertake those with us rather than leaking that business into the non-franchised arena. We wanna improve our penetration and renewal of finance products. We've done very well on our used finance penetration, that now stands at 48%. That's driven us a whopping GBP 7 million of additional profit year-over-year. We're focusing very hard on increasing our working capital efficiency. We're bringing cars to the web quicker. We're preparing them faster. We're making sure they're priced to sell first time without you know reducing the price. Of course, all our customers have the benefit of our 14-day money-back guarantee. All of that has driven a very pleasing GBP 63 million of free cash flow during the period. I talked about leveraging our scale and containing those costs and all this inflationary pressure. Oliver's now centralized a procurement team. They're making great progress on leveraging our scale. Everything from procuring paint centrally through to balloting contracts. All of that, everyone, you know, I think gives us a benefit, a very realistic benefit of GBP 15 million plus in the medium term. That's the cornerstone of the strategy. I'll get through the other elements quicker. In terms of technology and digitization, we will have by the end of next year all our dealers on a single unified DMS system. That's very important because that will provide a robust platform to support future growth. That's on track, on budget, and it's a key milestone, and will be the first time ever Lookers has been on a single platform. If I take the next slide. Thank you, Oliver. Expanding OEM relationships. We've got, I think, 32 OEM relationships. I'm very proud of all of them. Our latest one, which has been a great learning experience for us, has been the winning of the Polestar relationship. We are one of two distributors for Polestar in the UK. It's a pure EV brand for those of you that don't know Polestar. I'm delighted to say that we've expanded that relationship more recently and we'll be going into Scotland with Polestar to represent them there. And as I say, we've learned a huge amount because that's important because we are seeing a lot of new entrants, you know, eyeing up the UK market, for want of a better expression. It's a good market for new entrants, particularly with the opportunities that EV enables. So overall, we think there's a benefit there, very realistic again, of GBP 5 million in the medium term. We're focusing on increasing our used penetration of used vehicles. We've developed a new concept, the Lookers Cube, which is a very attractive proposition which derives revenues from multiple revenue streams including multi-franchised used vehicle sales, multi-franchise repairs and refurbishment, independent commercialized charging facilities, and also leisure facilities including, you know, cafes and experiential spaces for customers to explore new franchises and new products. We've identified now an existing property to develop that from. Very excited about that. We'll be bringing that to market next year with a view to learning what we can, and again, we see a significant potential benefit. This is a trial, and it's something we wish to you know to learn from. Next slide. We're developing aftersales revenue streams, particularly smart repairs. For those of you that don't know, smart repairs are smaller, cosmetic in nature, things like, you know, small dents, bumper scuffs, windscreen chips, and of course, those dreaded, alloy wheel curbing incidents. It's a great market. It's dominated by independents at the moment. It's profitable. It's a great customer proposition. We're rolling this out at pace, and with scale. It's a captive market for us. We spend about GBP 5-6 million with third parties anyway, refurbishing our own used cars. We'll be transferring that in-house, developing the proposition on to sale, to our existing and new customers. By the end of next year, we're gonna have 56 sites. They'll be based on our existing properties. As you can see from the graphics, we're gonna have 20 mobile vans out. Very excited about this. Brand new incremental revenue stream for us. Conservatively, that's gonna be GBP 5 million plus in the medium term. Just the last thing, we've got a lot of corporate leasing and fleet expertise and capability in the business. We've got three individual brands. We've got Fleet Financial, Lookers Leasing and Vehicle Rental Solutions, VRS. We're bringing those businesses together under the Lookers Vehicle Solutions umbrella with a view to presenting one solution to our corporate clients. So far, that's been very successful. I have to say, the market conditions for fleet and corporate are not great at the moment with the supply constraints that we're seeing. Nevertheless, this is an opportunity which has great longevity to us. The fleet and corporate markets are very important in the UK. That really concludes the overview of our sort of strategic priorities. I hope that's given you a good flavor. I think all very achievable, and those numbers that we've shared with you, I think are very good underpins to any future headwinds or return to normalization post-COVID that might be out there. I'm gonna pass you to Oliver Laird now to just have a quick whiz through the numbers. Thank you. Thanks very much, Mark. Good afternoon, everyone. Mark has covered off the key profit movements year-over-year. In this, the financial review section, I'll just give a bit more color around a few other areas. To start with, I'm pleased to see the revenue growth that has come through in our used vehicle performance, and especially in our hidden gem of aftersales. Not only that, but aftersales margins have remained strong at around circa 43% for the period. However, I note that we are seeing some cost increases in materials in aftersales, such as parts, in sprays, et cetera. I expect that these increases will continue into the next year. Mark spoke earlier on in the profit bridge about utilities and salaries and the cost increases that we are seeing there. We are seeing rises in other areas of our overheads, areas such as insurance, marketing, valeting, et cetera. However, I'm pleased to say that we are offsetting these rises where we can, and this is via efficiency initiatives such as our Big Switch Off. That's a campaign to save on electricity usage. By investments as well, capital investments in things such as energy building management systems, and driving reduced prices through our procurement team, as Mark mentioned earlier, which is a new team working in partnership with new and existing suppliers. In the same way it is for many others and many other organizations, this will remain a significant challenge for Lookers throughout the rest of this year. Finally, I'd like to point out that net funds continue to strengthen. However, I'll talk a bit more about our cash position in the next couple of slides. Moving on to our balance sheet. In terms of our balance sheet, what we can see is, we can see the trading performance and the impact of that and our strategic priorities coming through. Where you can see that by a nearly 29% growth in shareholder equity. Property, which we've also touched upon earlier, is a bedrock of our balance sheet. While we did undertake a sale and leaseback of our Battersea Volkswagen site, such moves are not a core part of our group strategy, property strategy. Our property strategy will see the group sites develop to have a greater number of mixed use and multi-franchise facilities within the portfolio. The Cube concept that Mark mentioned is a great example of this, where we'll have other non-motor retailers such as cafes on our sites, and indeed in our Chalfont site, we already have this. Our rental fleet is continuing to grow, and we've increased our asset finance facilities with a number of banks in order to facilitate delivery of our strategic priorities around Lookers Vehicle Solutions. Finally, I'm pleased that in the first half of the year, we've been able to secure a new long-term lender facility of GBP 100 million, and I'm delighted to welcome ABN AMRO to our banking club. Looking at cash, we've had excellent operating cash generation in the period. This is especially so when we take into account that there was no government support in the period and the impact of volume, of the volume on used gross profit margins. Central management target setting in areas such as used stock, retail stock, and in debt management has helped deliver working capital improvements. Our cash from the sale and leaseback of the Battersea property will be used to invest in the strategic priorities. How should we look at the second half of the year from this? In terms of the second half of the year, there are probably two key impacts on cash that I would note. The first set is our VAT payments tend to be higher in the second half of the year than they do in half one. That's historically the way things have come through, and that's largely due to our plate changes and the timing of that and the timing of which we therefore have our quarterly VAT reclaimings or payments. The second is uncertainty of supply, which may drive lower cash generation. As in the first half, our self-help measures will seek to limit this. Before I close out, I think it's worthwhile having a look back and talk about our capital allocation policy and how we're progressing it against that. Looking at the top left of this slide, first of all, we can talk about CapEx. CapEx at GBP 9 million has been in line with expectations. We expect the capital expenditure to accelerate in the second half as we bring on new partners and invest in other areas of the strategic priorities. In terms of leverage, we are in line with our policy in our range of ±0.5 times EBITDA, and we continue to expect this to be the case. Our stocking funding levels, a very important part of our balance sheet, have also maintained in line with policy during the period of between 85% and 95% of eligible vehicles. In terms of dividend, we are committed to ensuring we have a progressive dividend, and it's a central objective of ours. We expect from a full year perspective, that we will have dividend coverage in the region of 3.5x-4.5x earnings per share. As we've mentioned earlier in the year, we will consider further shareholder returns after we have a look at our capital allocation policy and in line with that capital allocation policy. That's the end of the financial review section. I'd like to hand over to Duncan for his operational review. Hi, everybody. I'm Duncan McPhee, Chief Operating Officer here at Lookers. I'll give you a kinda summary of the market trends that we're seeing. From a new vehicle perspective, the new car market was down 11.9% for H1, and Lookers were down 10.2. Really pleasing to see the group continue to outperform the new vehicle market, new car market. Although supply chain issues continue with extended lead times, our new vehicle order intake remains very strong, which is having a really positive impact on the order bank. Electric vehicles continue their growth streak with a market share of 16.1% in June, which is up quite a bit from the prior year at 10.7%. If we're talking about used vehicles, the used vehicle market was down 8.3%, with the group performing broadly in line with that. New vehicle supply situation clearly having a knock-on effect to used supply, but margins remain very, very strong for the industry. You know, keeping a firm grip in stock management moving forward is gonna be key. In an after-sales world, we've seen very healthy growth in revenue, with consumers continuing to spend more in general maintenance, but increasing employment costs continue to put pressure on the cost base, as Mark mentioned earlier. Lastly on this slide for EV trends, as I said earlier, EV growth is accelerating at pace. I guess that the current supply constraints could be seen as a blessing in disguise as the public EV infrastructure maybe quite isn't where it needs to be. The war in Ukraine is clearly exacerbating these issues for EV in particular due to the shortages in raw materials. The adoption of EV in the fleet market is being driven by the kind of benefit and kind advantages. As and when supply returns to normal, this is a real great opportunity for the group. We're starting to see some new Chinese brands coming into the UK. Again, we see this as a massive opportunity. Talks are progressing very well with the kind of various new entrants. If I click onto the next slide and talk about new vehicles specifically. 2022 continues to be affected by the OEM chip shortages, leading to extended lead times for most models. It's fair to say that certain OEMs are faring better than others. Notably, some of the Asian manufacturers and those with a vertical supply chain integration with China are doing a little bit better. Added to this is the war in Ukraine, which adds further supply issues. The group continued to outperform the new car market, which was really pleasing, being 1.7% ahead. Our underperformance in the van market was mainly driven by severe supply shortages in some key accounts and the withdrawal of support in the rental channels and our choice to target some of the more profitable channels. New vehicle margin was particularly strong and well ahead of the prior year. Whilst a lot of this is driven by the market, our focus on retail mix, the most profitable channel, has played a big part in this. You know, we are 7% ahead of the market in terms of mix. We're focused on minimizing discounting, driving performance through our finance and insurance, and that's why we strengthened the new car margin overall. The group's EV sales mix was really pleasing. You know, we're 5.3% ahead of the prior year and 3.4% ahead of the market. Important to note going into H2, our order bank is at record levels in both the retail and the fleet channels, both at around kinda 22,000 units. If I talk about used vehicles and jump onto the next slide. The used vehicle market, as I said earlier, impacted by supply and clearly a knock-on effect from new. You know, we've had a lack of OEM wholesale vehicles, and that's limited our opportunity. We're having a great success in generating more stock, since the launch of Click & Sell. That's our direct-to-consumer car buying platform. We've significantly improved retention of our self-generated stock in all of the retail fleet and leasing channels. We continue to have a relentless focus on stock management, and I don't use that word lightly, specifically driving up stock turn and keeping a vice-like grip on the age profile of our stock. With a great success through our focus on operational optimization, as Mark mentioned earlier. You know, we've seen finance penetration as one component part of that, improve to 48%, and that's up 12% in the prior year and worth a remarkable GBP 7 million in gross profit to the group. This has meant that we continue to enjoy some very strong margins in used vehicle sales. Jumping on to aftersales. We told you before about the kinda aftersales growth, and we've achieved growth in both labor and part sales, which was great to see. Labor sales were up 7%, part sales up just over 9%. Like the rest of the industry, we are facing those headwinds with regards to cost. The cost of labor is rapidly increasing in what can only be described as a pretty hot employment market. We're working really, really hard to mitigate the midterm risk through significant investment in our apprenticeship program and the work we have done in digitizing the aftersales journey. This has driven a lot of greater business efficiency, but equally a much improved customer experience. We're continuing this work with the introduction of digital job cards, and again, that will drive further business efficiency. Lastly, as Mark referenced earlier, our rollout of cosmetic repair businesses is well underway. We're on track to have 36 fixed and 10 mobile cosmetic repair solutions by the end of this year. This really is an exciting project for the group and one that will provide long-term sustainable income. Just moving on to the next slide and just talk to you about the omni-channel advantage. Look, we've spoken before about this. You know, Lookers offers our customers fantastic choice. You know, we sell new cars, used cars, we sell vans, we offer leasing, we offer a suite of aftersales services. We represent 32 of the biggest and best brands in the world, and we're a nationwide company. You know, we go from Scotland to Ireland and all over England. Our customers have choice in how they engage with us, so customers can deal with us in store, over the phone or purely online. We've got additional new services such as home delivery. We've got a huge and loyal customer base, but clearly we want more customers to come to Lookers. Why wouldn't we? With all of the noise out there, we thought it was important to remind people about you know what we're good at and why. I wanted to tell you about how we're just reminding customers with a very simple but very targeted brand campaign, which gets those points across. The competitive landscape is only increasing, and we have got a lot to shout about in our opinion. We want to promote that customers will receive a great experience. We want to promote trust, transparency, provide reassurance. We want to drive the message that none of this is new to us. You know, we've got a talented and knowledgeable team here at Lookers, and we've been here for over a hundred years. The message in choice is a key one because we have everything our competitors have and more. The concept of a good deal better, it's all about instilling confidence and reassurance in our customers. The new proposition has been launched through a brand awareness campaign on TV, video-on-demand, radio, outdoor, and social. I'm pleased to say that we've seen a real increase in activity across all inquiry channels and in our brand awareness metrics since the launch of the new campaign. You may have seen it already, on the telly and/or heard it on radio or whatever. If not, and if the technology will allow us, I'll just play you a couple of those adverts now. What do you fancy? Ooh, should we try something different? Kids. What do you reckon? That one. Yeah, let's get a big one. Yeah, and some extras. Ooh, can we get it delivered this time? Done. At Lookers, you choose to buy online or in person. To make it better, we've introduced our home delivery service. Collect your car in store or have it delivered to your door. We deliver too. Hiya. What would you like? Can I have a grande soy cinnamon, no foam, half caf, extra shot, extra hot, three pump vanilla caramel macchiato with coconut foam and beetroot shot. Double sleeved to go, please. No problem. At Lookers, you choose from over 30 manufacturers and over 6,000 vehicles online. To make it better, we've introduced our Click & Drive and home delivery services. New or used, small or grand, we've got something for every taste. Lookers, a good deal better. I hope you like the brand campaign. I think it's fair to say that I love it, and Mark and Oliver are sick to death of hearing me going on about it. Anyway, on to ESG and my final part of my presentation, and just to update you on the progress in this. Since my last update, we have developed the results of our materiality assessment into an ESG strategy, working with our external advisor, CEN-ESG. We've created our ESG strategy document, which details our ESG ambition over the next three-five-year period. We have goals for each of our 11 material topics that cover environmental, social, and corporate governance areas. We intend to publish this along with the ESG-related policies rather that we have in development. We are creating a dashboard that will help us track our progress against our goals, and we've also launched a pilot to introduce building management systems within our sites and a switch to LED bulbs and various other energy saving initiatives. The initial results have been very positive. Next, we'll be planning our road to net zero with our energy specialists Inspired. They'll be supporting us with the preparation for submission to industry bodies, science-based target initiatives and CDP in 2023. We're also gonna define the future change initiatives required to achieve our ESG goals and plan timescales around that. I'm pleased to inform you that our work continues on the carbon literacy project training and our Big Switch Off campaign to reduce energy usage. Both of these initiatives are there to improve colleague awareness and embed positive behaviors within the organization. The battery electric vehicle transition is progressing as planned, and we have internal schemes launched, such as Fusebox, which is our staff portal for all things EV. Our [0%] charger for staff charger purchase scheme is partnered with Rightcharge and our unique battery electric vehicle-only salary sacrifice scheme. As more and more of our colleagues now want to get into an electric vehicle, the only restraining factor is clearly the current supply issues. We've also partnered with Egg, part of Liberty Global, to manage charger demand across the estate and to develop meaningful building solarization solutions. Listen, we understand, we've got a lot to do in this area, but we are committed to play our part to improve long-term global outcomes for society and the environment. That's it from me, and thanks very much for your time. Thanks, Duncan. Last slide, you'll be pleased to know. Just a very quick summary and conclusion from me. Listen, I hope you'll agree that our first-half performance has been pretty strong in the face of what has been some challenging supply disruption and inflationary pressure. We've managed to achieve that focus and delivery really through self-help initiatives and the strategic progress that I outlined at the start. We've got good progress on those strategic priorities. Much more to come on that. I think those numbers that I've shared with you are very realistic and deliverable over the medium term. Oliver's touched on the investment and dividends all in line with our capital allocation framework. Of course, in terms of the strategic priorities, everything we do there will be benchmarked against that capital allocation policy. I think just to summarize, I think very well positioned, given all the things that we've talked about today, to continue to grow further, despite some of the the headwinds that we face. As I said right at the start, at this stage, 2022 guidance is unchanged, and we'll look forward to updating you all, in October this year after September's registration plate change. Listen, thank you so much for bearing with us through that presentation. I think now the plan is that we will open up to questions. That's great. Mark, Duncan, Oliver, thank you very much indeed for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the right-hand corner of your screen. Just while the company take a few moments to review those questions submitted already, I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your Investor Meet Company dashboard. Oliver, if I may, obviously, you can see you've had a number of questions from investors submitted throughout today's meeting, and thank you to all of those that have done so this afternoon. Maybe if I could, Oliver, just hand back to you to ask you to read out the questions and give a response wherever it's appropriate to do so, and I'll pick up from you at the end. Absolutely. Thank you. Thank you much. Again, thank you for everyone who's provided questions already. I'll act as an adjudicator on this and pass the questions out to my colleagues and myself. The first question I'll read out is actually one probably that I'm best placed to answer. Question is, "The distribution policy appears to be very conservative. When will this be reviewed, and will consideration be given to purchasing the shares for cancellation?" Thanks for the question. As I mentioned, in our capital allocation policy, we do look at this on a regular basis. We do look at potentially additional shareholder returns. I think it's important to note a couple of things, which is we are early in the journey of our strategic priorities and delivery of those, and investment in those is a focus for us. That's important. We also bear in mind also that this is a cyclical business and there's a lot of uncertainty out there, you know, with the cost of living situation. We're a non-essential retail goods business, so we've got to be careful, and therefore ensuring that we've got enough capital to run through those cycles is important. As I said earlier on, you know, we do give consideration all the time for additional shareholder return should it be in line with the capital allocation policy. We're pretty much bang on in terms of market expectations at three and half to four and half times EPS at this moment in time. That does not mean that we wouldn't continue to consider other potential returns. Thank you for that question. Hopefully that gives you sufficient detail there. The next one I think is for yourself, Mark, to start with. It is, "How important is investment in technology and a digital presence to the group moving forward?" Yeah. Great question from another Mark A. Thank you for that, Mark A. Yeah, it's very important. I mean, I think it's very clear that, you know, the market and propositions are coalescing really around omni-channel. I mean, if you think about what's going on in the U.K. market, we've seen quite a number of pure online disruptors come into the market. That's been good. I think it's given the market impetus to change, which I think is, you know, very positive. You know, everyone's been looking at that. Our model is to be omni-channel. You know, you saw that very clearly from the sort of brand campaign that Duncan outlined. It's about your choice. It's about the customer deciding how they want to interact with us. You know, digital and digitization are gonna be very important, right at the forefront of creating that omni-channel, flexible process for the consumer to use as they see fit. I think above and beyond that, you know, we're looking at, you know, many areas where we can introduce more digitization in terms of the back of house as well, because the back of house and the way we run the business is very important. I think the most important thing for me is we allow customers the real choice to be able to deal with us in the way that you saw through those adverts. Thanks, Mark. Just before we go on to questions, thank you to Andrew G. for posting great ads, cheered me up no end. That will certainly big up Duncan's ego even further. On to a question from Michael D. I think this one's for you, Duncan, in terms of the question is, how are you mitigating the issues around supply chains, et cetera, to ensure you can meet customer needs? Yeah. No, great question, Michael, and thanks for it. I think there's a couple of things. With regards to new cars, I guess the supply situation is the supply situation, you know, we take the order, we push it into the system, and the customer order then obviously is then being built. There are some pockets of free release, so that's where OEMs have some additional vehicles, and they throw them into the network, and they're very much taken on a first come, first serve basis. We've got colleagues in various divisions for the brands that they represent, working at all strange hours, whether that be early in the morning, late at night, during the day, just to pick off those additional units as and when they come. Equally, we're very much focused on our used vehicle supply because that is impacted by the new car supply. You know, we've launched Click & Sell, which is our direct to consumer online buying platform, and that's working very well for us. We're generating a load of stock from that. We have got a kind of, I was gonna say a zero tolerance policy, but that's a bit severe. We don't allow any retail grade part exchanges to leak outside of the group now, whereas previously that wasn't quite the case. All self-generated stock, whether that be part exchange from our fleet and leasing channels, are retained and retailed within the group. We're also selling older vehicles now than what we did previously. I think this is the supply situation has taught us not to be quite so picky, and so we're retailing older vehicles as well, but to retail retail standards. There's a number of actions that we can take, but as I say, we're very much dictated to by the brands that make the vehicles in the first place. These various actions are helping, no doubt. Thanks. Thanks very much, Duncan. I think the next couple are for you, Mark. In terms of, Simon C. asks, "What investment is required to scale up the cosmetic repair business, given I'm sure this will be welcomed by customers? Yeah, that's a great question. I mean, it is a fantastic consumer proposition. You know, I described phase I of the rollout, which is really all about you know, internalizing the costs that we currently leak out of the group. You know, we refurbish about 100,000 cars a year for our own forecourts. There's a captive market there. You know, we think this is gonna play very, very well. We have thousands of cars coming in and out of our business each day that sit on our work you know, on our ramps and in our workshops. Great opportunity for us to take a look at them and offer customers this great service. It's a relatively modest CapEx rollout factored into our plans, somewhere between GBP 8 million and GBP 10 million, which will go out over the next couple of years to take us up to those 50 EV sites that I mentioned. This is a high-margin business, and I think it will go well for us. Thanks, Mark. Again, from Simon C. for yourself, what part does M&A play in your thoughts moving forward? Yeah. Well, we spent really the last couple of years really consolidating and reorganizing our business. We've done 27 closures over the last couple of years. The portfolio as it stands is pretty much where we want it. I mean, there's one or two nips and tucks, I think, really for the portfolio, but nothing on that scale. We are now turning our attention, you know, to how we might supplement the growth that's gonna be driven out of our operational optimization agenda. Acquisitions are on our mind. They are on our agenda. I think we see them as, you know, relatively small in nature, maybe, you know, three, four dealerships at a time, small groups, where the geography and brand makes sense. Listen, I think it's important to say that we're not gonna rush this. That, you know, we are getting a lot of opportunities, but some of the price expectations from vendors, given the fact that it's been a good couple of years, are a little bit unrealistic. You know, we won't be rushing it, but we'll be doing these as and when brand, location, and price all makes sense. Thanks. Thanks, Mark. Then two more questions from Andrew B, which I think Duncan probably for yourself in the first instance, and perhaps the second question yourself and Mark. The first question for you, Duncan, is: If you're currently making GBP 2,100 per used car in GP, what is the long-term average? Does this revert to the mean as the supply side constraint eases? Yeah, I mean, I think, you know, what we've seen in used vehicle values over the past, you know, kind of 12, 18 months has been kind of unprecedented really. Where we've seen used vehicle values appreciate. You know, since the start of that, which I think was in April 2021, you know, values have gone up just over 30%, which is huge, really. I think what we've seen fundamentally is a rebasing of used vehicle values. We don't expect values to go back to where they were certainly pre-pandemic. You know, moving forward, you know, what is gonna happen to used vehicle values? Well, I guess what goes up must come down, and there's been a little bit of softening over the past couple of months, where vehicle values have dropped off very slightly. I think the pace of change will be very much dictated to by how quickly the new vehicle supply situation returns to normal. You know, ultimately, used values will continue to soften. I certainly don't think we'll see any cliff edges. The other thing to note on this is that we've had a huge focus on finance and insurance. From where we were previously, you know, if you look at H1 2021, our finance penetration was 36%, and our insurance product penetration was about 75%. A kind of 0.75 of a product for every car that we sold. Moving forward to now, at the half year, we were up 48%. In H2, we're starting to see that go into the 50s%. 50% finance penetration, and our insurance product penetration is at 100%, so one product per new or used vehicle sold. That's brought in probably another GBP 250-GBP 350 per unit at a GP level. Other things like tightening up on disciplines like the used vehicle part exchange appraisal process, where we're properly appraising vehicles and bringing the vehicles in at the right margin. Things like a kind of obsessive and relentless focus on stock management. Our stock previously, we would be focusing on overage over 90 days, whereas we now focus on overage vehicles over 60 days. We don't let our stock go. We have a target that says no more than 10% of our total stocks will be over 60 days. Keeping the stock profile younger, the age profile young ensures that we enjoy the higher margin that you would naturally get through stock that hasn't depreciated month after month after month after month. There's a number of things that we can do. To get to the point and answer the question probably more specifically, we're making GBP 2,100 today. I would expect to see that above GBP 1,800 moving forward. As I say, if you look at where we were as a group pre-pandemic levels, it was probably GBP 1,200. We're certainly not gonna go back to those days, but maybe not quite what we're enjoying just now. Bit of a long answer, but hopefully hits the point. Thanks. Yes, I don't think we'll stop you there. Thanks, Duncan. Mark, next one for you. As interest rates rise rapidly, how will this impact the affordability of PCP? If PCP defaults rise, how would this kick back on Lookers, or is the risk with the finance houses? Thanks, Oliver. Thanks for the question, Andrew B. The risk is with the finance houses. We carry no balance sheet exposure at all to defaults. We are an intermediary, a broker. I think in terms of the affordability on PCP, the affordability of a PCP is driven by a number of dimensions. One is interest rates, that's sure, for sure, but so is residual values. Residual values and firmness of residual values are the biggest single thing that feed into the pricing of a PCP. Rates, you know, do make a difference, and we can all do the math. When you spread that out over on a monthly basis, it doesn't mean a great deal to a PCP each month. But what is by far the biggest deal is what is the outlook for residual values. At the moment, I think the residual value outlook looks fairly firm. I think we're back to normal in one sense on the used car market in that we are seeing depreciation, but we're seeing depreciation from a you know a very high valuation level. Customers have got quite a lot of equity in their vehicles. Actually now on that basis is actually a really good time to buy a car. Okay. Thanks, Mark. Final two questions that we had, although there's one piece of Mitch's question that isn't there around after sales. I'll bring back. Our two questions are from Greg M, which I think will probably for me. Is return on invested capital part of management remuneration? The short answer to that is yes. You'll see in our annual report and accounts. Director's remuneration is published. You can see in there that there is measures on shareholder returns, earnings per share, et cetera, that are noted. Therefore, obviously, invested capital is part of that remuneration. That's the first one. Then the second one from Greg M again is, why aren't you buying back shares? I'll probably start to go back to some of the earlier responses, Greg M, in terms of at the moment, as I say, we are fully committed to our strategic priorities, investing in those, having sustainable business and ensuring that we can deliver on the medium and long-term growth opportunities that are out there. You know, that is not to say, as we say, our capital allocation policy, that we will continue to look at additional shareholder returns or which buying back shares is maybe a potential option alongside things such as special dividends, et cetera. We're happy to continue to look at those, but at the moment, the reason why we aren't currently doing that is we're looking at our strategic priorities, ensuring that we can invest in the medium to long-term growth opportunities for the business. The final question I think is for you, Mark. It was a pre-submitted question which was around the shift from ICE vehicles to EV. What do you view the impact of that for aftersales on our aftersales business will be? Sure. That's another great question. I mean, I think, you know, taken at its most simplistic, you know, an electric vehicle has a lower three years after sales content. You know, it has no oil, very few moving parts, and so on and so forth. I think on the one hand, there is a very real risk there. On the other hand, it does have a load of technology, and it does have a load of battery maintenance and service requirements, and they will go, you know, some way, if not all the way to offsetting that. The nature of the servicing and maintenance requirement has changed. That's the first thing to say. Second thing to say is, you know, the ICE vehicles aren't suddenly gonna go extinct. You know, they have a multi-decade run out to them. I've explained what we're doing to make sure that we can keep penetrating into those older vehicles. A lot of success coming through there. Also, the other thing with EVs is that they do pick up repairs, and that's exactly why we're going into cosmetic repairs. Shopping trolleys still get wheeled into them. The dog still scuffs the boot lining. Of course, if you're anything like me, you still do hit your alloy wheels and cause some damage. I think, you know, I think it's something that's on our mind, but I don't think it's anywhere near the deal that people think it is. With 146,000 live service plans out there, we feel reasonably well insulated. We've got a lot of loyalty building with our customers. Thanks, Mark. There are no other questions at this point in time, so I'd like to hand back to the Investor Meet Company team to close out the call. That's great. Thanks ever so much, Oliver, and thank you to both Mark and Duncan. Mark, I know investor feedback is important to you and to the rest of the board, and I'll shortly redirect investors on the call to provide you with their thoughts and expectations. I wondered if I may before doing so, just ask you for a few closing comments to wrap up with, and then I will redirect investors to give you their feedback. Sure. Well, listen, the first thing to say is thank you to everyone for joining us. It's been a great pleasure to showcase our business. We think there is just a ton load of opportunity in this business. We think that represents deep embedded value, latent value, which we're extracting from the business, and we continue to do so. I think we're delivering tangible results. I think when you look at things like our order bank and some of the exciting developments around electrification and technology, which are coming down the line, I think all of that leaves us incredibly well positioned. I would say that, you know, anyone that's interested in an electric vehicle or wants to talk at all about a car, it would be a missed opportunity not to try and engage with you on them. If anyone wants to talk about a car, please do email. We'd love to look after you. We really would. That's it from me. I'll pass back to the team. That's great. Thank you, Mark, Duncan, and Oliver for updating investors this afternoon. Could I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Lookers plc, we'd like to thank you for attending today's presentation, and we wish you all a very pleasant afternoon. Thanks, everybody.