Good morning, ladies and gentlemen, and welcome to the Marston's PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press Send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all of the questions submitted today and publish responses where it is appropriate to do so. These will be available via your Investor Meet Company dashboard, and we will notify you by email when these are ready for your review. Before we begin, I would like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand you over to CEO Andrew Andrea. Good morning, sir. Good morning. Thank you very much. Thank you all for attending the presentation today of our interim results that we presented to the markets last week. By way of introduction, Marston's is a pub operator, principally in England and Wales, but we've also got 20 pubs in Scotland, around 1,500 pubs overall. We also have a 40% minority stake in the Carlsberg Marston's Brewing Company, having disposed of Marston's Beer Company into that venture during the pandemic. First of all, I'd like to start with a sort of overview of how we've seen the last six months and the things we've been up to. The first thing I would say is that trading has been pretty resilient throughout the six-month period, despite the clear disruption of Omicron impacting the very profitable and critical December trading period. Coming out of the other side of the half- year, we are seeing trends continuing to improve from both a footfall and like-for-like perspective. From a cash perspective, excluding some one-offs that we previously guided the market on, underlying cash flows were an inflow. Typically, our business is a cash outflow in H1. Most of our profit is earned in the second half year. From an output perspective, we made encouraging progress on guest standards, engagement scores, which I'll touch on a little bit later. During this six-month period, despite the impact of Omicron and that disruption, we've undertaken some significant change activity in the period underpinning the new strategy, which I will set out to you a little bit later on. Our key focus is on simplifying our business from a segmental perspective. What segments do our pubs sit in? From a category management perspective, menus, drinks ranging, and so on and so forth. Very importantly, it's worth noting that pubs historically have been incredibly resilient and are well placed to meet those macro challenges going forwards. Looking at the market dynamics as we see them, there are three key elements. First of all, there is clearly some concern about the resilience and stability of the consumer in the current macro backdrop. Overall footfall is still in decline in the sector. We're down around 15% or so, but those trends are slowly improving. Importantly, our older customers, who understandably were most reticent to return to pub, are starting to come back, whether that be the groups of elderly customers who come and have the midweek lunch or the old chaps that come and have five pints of cask ale a day, 11 o 'clock, seven days a week. The sales trends overall are pretty stable, and the monthly sales cycle is also starting to become more predictable. What I mean by that is the payday-to-payday dynamic of spending most when you've just been paid, and that easing off ahead of being paid, the next payday is coming back with more certainty. We are seeing some discounting by some in the marketplace. We're seeing a return of the 50% offer. It's not something we necessarily accord with. That doesn't mean discounting is not relevant, but 50% is a pretty high level of discount. We believe the relationship with the guest is simply the deal rather than bringing them in to come in and experience our pubs. Overall, the insight tells us one very clear thing, do not shortchange your customers. Don't compromise the experience from a service, product, and standard perspective. From a cost and labor dynamic perspective, every company is talking about a very challenging inflationary position, and that has been putting pressure on our food supply chain. We have long-standing relationships with our food suppliers. We got through a pandemic, and we will get through this together, and we'll touch on that a little bit later. From a labor market perspective, it's fiercely competitive. Supermarkets are paying 16-year-olds outside London GBP 10 an hour to stack shelves, and that's putting pressure on overall supply and indeed cost pressures. I'll touch on how we've addressed that a little bit later on. From our perspective, you need three things in your back pocket to address and meet these challenges. The first of those is you need pricing and the ability to take price, the ability to innovate and demonstrate agility and nimbleness. Finally, just reinforcing this point about the historical resilience of pubs. While it's clear that consumer confidence is falling, our insight is similarly showing that people still want to socialize. That demand to socialize is staying incredibly steady, understandably, post coming out of the pandemic. From our perspective, pubs are an affordable place to socialize. Importantly, from a Marston's perspective, only 3% of our business is in city centers with majority community pubs. From that perspective, community pubs are far more resilient than city centers. As city centers start to grapple with the unwinding of the work- from- home dynamic. It does appear that the three-day week is increasingly becoming the norm. Overall, pubs are very well placed to weather these economic challenges ahead. Looking at the financials in the first instance, overall revenues were up on 2021. That simply reflects the fact that in 2021 we had much more COVID impact, less so in 2022, although we did lose December. Importantly, at a pub operating level, we have returned to pub profitability at an operating level. I've mentioned our 40% stake in Carlsberg Marston's. They've had a challenging half- year. They are exposed to the on-trade. Marston's Beer Company had around 20-odd% of the Cask Ale market, which has been a poorer performing category. As a consequence, we guided the market last week that the cash dividend that we were expecting from CMBC is not likely to be made this year, and we expect a gradual rebuild back to a normalized level of around GBP 20 million per annum over the next 2-3 or so. At pub level, the key point to note is we're back in the black with an improvement in 2022 despite the impact of Omicron. Looking at trading over the last six months, in the first few weeks of the year, as you can see, like-for-like sales were up about 1%. That Christmas trading period significantly hit the eight weeks after that. Omicron driving a 9% decline, as we reported in our January trading update. Subsequent to that period up to the half year, we were down 1%. It's worth noting that in the two weeks of the February storms, which coincided with the critical half-term weeks, we were down 8% in those two weeks. Since the half year, despite the fact that the VAT on food and soft drinks has reverted back to 20% from 12.5, we are in positive like-for-like territory. It's worth noting that VAT was about a 4% contributor to like-for-like sales. Importantly, what we're seeing is slowly but surely those trends improving. Turning now to cash flow. Our operating cash flow was up in the half- year. Importantly, before one-offs, as I mentioned earlier, we achieved an underlying cash flow of GBP 13 million in the period versus a significant outflow last year, albeit that was Omicron- driven. We previously advised the market that there were two one-offs due to be paid. Deferral of duty and VAT from the pandemic was paid during the period of GBP 50 million, and we received some deferred consideration for the brewing disposal of GBP 28 million. A net outflow of GBP 22 million. It's worth noting that we have no residual hangovers now of payables as a consequence of the pandemic. We're fully up to date with the VAT and tax man. Underlying cash flows were positive in the period, and it's worth noting that typically we earn about 2/3 of our profit in the second half year, and as such, one should expect an improvement in cash flow during H2. With regards to our debt structure, the majority of our debt is long- term. As you can see on this chart, we have bank facilities out to 2024. There's no immediate refinancing facility. One would expect that to be refinanced perhaps Q1 calendar of next year. With GBP 50 million of headroom on that facility. On a long-term perspective, we have a securitization in about 2/3 of our estate. It has a very smooth amortization profile out to 2035, and it's fully hedged, so not sensitive to any changes in interest rates. Importantly, that securitization, we didn't require any concessions from bond holders in the six-month period, despite Omicron. We also have 35- to 40-year property leases. In essence, these are sale and leaseback transactions, where the freehold reverts back to us at the end of the term. Because of that reversion, it is classified as borrowings on the balance sheet. That is linked to inflation, but importantly, we have an RPI cap and collar of 1% and 4% on those leases. As such, this high inflationary environment we're pretty well protected against. Overall, our borrowings are GBP 1.25 billion. We have a very clear plan to reduce borrowings to below GBP 1 billion by financial year 2025. Turning now to property, pensions, and NAV. From a property perspective, it's worth noting that we impaired our property portfolio by around GBP 380 million as a consequence of the pandemic. We are moving to a new valuation methodology whereby rather than having a three-yearly external valuation, we are having an annual valuation of about a third of the estate on a rotational basis, and that first tranche will be valued in the second half year, and we are cautiously optimistic that that will drive an NAV upside overall. It's worth noting, disposals were 35% higher than book value in H1. Recently, C&C exited their stakeholding in Admiral Taverns at an 11x multiple. That gives us confidence that there is still underlying strong value in pub assets as we come out of the pandemic. From a pension perspective, we've currently got an accounting surplus. We contribute GBP 6 million a year of cash flow into the pension. The next triennial valuation is in 2023. Clearly, we have, again, cautious optimism. We're on track to clear the technical provision deficit in the pension scheme, and as such, that GBP 6 million call on our cash flow would fall away from 2024 onwards. During the period, we saw a 0.07 Increase in net asset value per share. Now, not surprisingly, a lot of the noise and a lot of the talk on my roadshow over the last week or so has been about inflation and input cost inflation. I box these into three tranches, product, labor, and utilities. On food and drink, I'm pleased to say that we now have a handle and a degree of stability in our food inflation at around 7%, that was certainly far more volatile in February and March as Ukraine emerged. On our drinks contracts, we've got contracts out to 2024, which are CPI -linked with that increase due in October. What we have done to mitigate that is we've taken food and drink price increases in March. On menus, I'll come back to it. On drink, we recognized we were slightly behind our competition, so customers have accepted that drink price increase. It was, to some extent, expected. We've also simplified our menus significantly, driving an overall lower cost of our food. As you can see, a fair proportion of our contracts are still fixed into the medium and longer term overall. From a labor perspective, we took the bold decision to increase the hourly wage rates of our younger workers to well ahead of the minimum wage. For example, 16-year-olds, rather than GBP 4.63 minimum wage, we're paying GBP 5.50. Now that in aggregate cost, annualized cost is GBP 3.5 million, 1.8 million additional costs in H2 versus our previous guidance. Overall, while one may look on this as a cost, I do see it as an investment. This should drive reduced level of staff turnover, lower recruitment fees, lower training fees, and instinctively, if we are more competitive in the marketplace, we should attract better people, which should feed through to the sales line. Finally, on energy, we are hedged on gas until April of next year, but we came out of our electricity hedge in March of this year. The energy markets, as you are all probably aware, are incredibly volatile. As a consequence, we've issued guidance that we expect an incremental cost on energy versus our previous expectation of around GBP 5 million for the second half year, GBP 10 million annualized, and gas, we will make a call next year. Notwithstanding that, although we've made great strides in becoming more energy efficient in recent years, we've introduced an energy saving initiative, Going Green, into our pub estate, and we know what good lights in a pub and we can see like- for- like diversity in energy usage in our pubs. We've an incentive scheme in place, which as one would imagine, is very high returning. Overall, we've got a grip on our food inflation. We're taking a very conscious decision on labor cost increases, and we are mitigating that through price. On energy, we're guiding that at this stage, we're not using price to mitigate that, and that will flow through to the bottom line. One thing we just set out for the analysts, and I won't go into this in much detail, is that since 2019, there have been quite a few moving parts with Marston's. Most notably on the right-hand side, we disposed of Marston's Beer Company into CMBC in 2019. That drove quite significant earnings and cash flows. As I guided earlier, we're not expecting a cash dividend from CMBC in financial year 2022. Just worth noting, the original business plan had a cash dividend equivalent to our net cash flows overall. From a Marston's pubs perspective, we made disposals in 2019 to the tune of around GBP 8 million of EBITDA. In December of 2020, we acquired the operations of the Brains pub estate in Wales on a CapEx light basis, equivalent to a GBP 10 million EBITDA uplift. Our IT strategy has changed. We're moving to a cloud-based strategy, and as a consequence, we're redirecting GBP 6 million of cash that was sitting in CapEx across to the OpEx line, and we've given that H2 energy cost guidance. At the bottom there on the left-hand side, the nemesis to, I think, accountants and analysts alike, the impact of IFRS 16. What we are now is very much a focused pub business with that minority stake in CMBC. Moving on now to the strategy, and we launched this to the market. We have a very clear and quite simple vision, pubs to be proud of. The two key elements of that are pub. That means we are not restaurants, we are not casual dining, and you should feel comfortable coming into any of our establishments to have a drink. To be proud of, whilst underpinned by some objective goals at an emotional level, is this a place where you would recommend to eat or recommend to work? If the answer to no is that it is no in any of our pubs, we need to do something about that. Underpinning that vision are some core pub goals. Everything starts at pub level. Are we loved by guests? I'll touch on our Reputation Insight platform in a moment, but Reputation basically says the gold standard is a score of 800 or more. Are we trusted? Are our standards right? Defined as a five-star EHO. Are we seen as a great place to work? We have an engagement tool, Peakon, that is used globally in many organizations. Again, their benchmark of good is a score of eight or more. Underpinning that is driving a harder sales culture in our business, defined as maximizing footfall and sales per guest visit. Importantly, it's worth noting that managers are bonused on those first three, and that rolls up to my own personal bonus. Those core pub goals, therefore, are relevant top to bottom in the organization in a consistent manner. I think that one voice, one focus approach is incredibly important. As you can see underneath that, we've made good progress in H1. Our Reputation score, EHO scores have improved. Although Peakon retention might not look like progress, Omicron significantly reduced our employee engagement and the Peakon universe where generally speaking. I'm really pleased to have got back to those pre-Omicron levels of engagement as we came out of the half- year. At corporate level, there are three quite simple goals. The first of those is better than the rest, and that's a consistent market outperformance in both our food- led and wet- led businesses. Just to be clear, I am focused on driving long-term like-for-like sales growth. I'm not bothered about chasing the last five weeks. There's got to be a consistent level of growth year in, year out. Back to a billion is a dual-faceted target of getting our borrowings down below GBP 1 billion by 2025 and improving the sales of the organization to back above GBP 1 billion. The reason for that is having disposed of the beer company on a run- rate pro forma basis, sales ran at around GBP 800 million. There's a GBP 200 million sales growth challenge there. Finally, we are committed to doing business the right way, committed to being a responsible, sustainable business underpinned by a strong ESG agenda. There are three core pillars underpinning that strategy: guest obsession, raise the bar, and we will grow. I'll touch on some elements of that in a moment. In achieving these goals, what we're doing is creating a business that is growing earnings, reducing debt, improving returns, improving cash flow that enables us to consider the reintroduction of dividends. By reducing debt, increasing returns, we're clearly creating shareholder value into the future. Quite a simple strategy. Some of the key pillars underpinning that guest obsession is all about asking the question, does it matter to guests? Everything we do has to start with a customer relevance. If it's not relevant to customer, why are we doing it? I'm gonna touch on the segmentation of the estate. Shortly, it's a key element of our strategy and similarly, the category overhaul. Finally, from a guest perspective, we've introduced a new booking system in the six-month period, and we're trialing various call handling tools to find an efficient and cost-effective way of capturing customers that are trying to contact us by phone at a time when the pub is busy and unable to capture that call. If I start with category management and the menu overhaul, it won't surprise you that food quality is the number one driver of guest satisfaction, conversely, dissatisfaction, however you want to cut that cookie. We had quite simply too many menus, too many dishes, too many ingredients, no real alignment to our formats and segments. Internal advocacy was low. Our chefs were saying these menus are quite difficult to cook. Now we brought in as one of several new recruits, and I'll touch on this in a moment, a new director of category management, and he oversaw a menu relaunch project. Before I get into the results, the behavioral facets of this were absolutely critical. The first of those is that from meeting one to launch was a three-month turnaround. We launched these menus at the end of March. Importantly, commercial operations and finance had equal voice in coming to the conclusions on what dishes went on which menus and so on and so forth. Underpinning all of that project, though, was no compromise on quality. I mentioned earlier, if you shortchange customers, they will notice. The team had permission to remove things on our menus that weren't important to guests. An example would be we had tomato salsa on our curry dishes. Funnily enough, we had a lot of returned tomato salsa. It had no place on the dish. It wasn't important. We just whipped it off. That was worth several pence per dish. Similarly, reinvest where appropriate. That chicken burger in the top right-hand corner, the hash browns were an addition to that burger. It is going gangbusters at the moment. Underpinning all of that is a comprehensive training and digital spec book program. We closed for half a day, with the chefs could all cook off, all teams were in to taste the menu, and that enabled us to launch the menus in a more positive manner than I've seen probably in my time at Marston's. The outcome of that, as you can see, was a very focused and efficient category outcome, halving the number of menus, significantly reducing the number of dishes and SKUs. Because we were serving better quality food to a better specification, that enabled us to take price over and above the VAT reversion. In net, like, net cost terms, we saved GBP 1 million, but at gross level, that number was GBP 2.5 million. We reinvested GBP 1.5 million back into enhancing the dishes and indeed the crockery. The feedback has been pretty positive. Guest scores are improving. Importantly, very minimal comment on price, and internally, our chefs love it, our front of house teams love the menu, and our support teams are shouting about our menus from the rooftops. A really successful exercise, and the great news is there's more to go at. I think we've only achieved perhaps 70% of what we initially intended. With regards to the Raise the Bar platform, this is all about people. We employ over 12,000 people. Our team members ultimately drive our success. In this challenging labor market, there are three facets to our HR agenda: recruit, reward, and retain. From a recruitment perspective, during the period we have recruited five external hires, directors of recruitment and resourcing from Greene King, Director of Category Management, ex-Whitbread Pizza Hut, Director of Digital, she's joining us in July from a national competitor, and we brought two Senior Directors of Operations into our food-led business, both with ex-Whitbread and M&B experience. Underpinning my executive committee, there is a leadership group that is 30 strong. We've changed a third of that group. Five of those were external hires, five promoting some of the bright young things within our organization. At pub level, there are two key drivers in addition to all of the other app-based work we're doing to recruit team members that are starting to pay dividends. Our apprenticeship program is key to our future talent pipeline. We're just under 300 apprenticeships. We're extending it to a broader chef program. Importantly, we retain about 80% of those that come through our program. Great pipeline to future talent. Secondly, we've launched something that we internally call Latitude. We're working alongside Novus and Only A Pavement Away, whereby Novus are training offenders about to come back into society. They've got quite a big pipeline of trained kitchen staff. We're dealing with that with kid gloves, and we expect to appoint our first person into pub in the course of the next month or so. From a reward perspective, I've mentioned the hourly rate investment, but we've addressed reward right through the organization. The 800 Club, and I mentioned the Reputation platform earlier, is an incentive whereby on a quarterly basis, if you have a Reputation score of 800 and an EHO score of five-star, the licensee gets a bonus of GBP 500. It's gone down incredibly well. People can see it. They are motivated by money. Importantly, it is a use it or lose it incentive, though. If you fall below either of those two measures, you lose the incentive. It ensures sustainability of that top-level performance that we're after. I do believe more work on that variable pay element for our licensees is the way forward to ensure we are getting great success from great managers. From an equity perspective, we've reintroduced the share save scheme. We removed it in 2019. Any employee can save from GBP 10 up to 500 GBP a month at a discounted share value based on the share price at the end of this week. We've extended the LTIP to that 30-strong leadership group, so they've now got equity skin in the game. From a retention perspective, I mentioned the Peakon engagement platform. This ensures we have monthly communications with our teams. We're constantly listening. It enables us to respond quickly. We've simplified the online monthly and quarterly review system into an online system. Gone are the days of the big showpiece and set- piece annual review. We want continuous conversations on performance and development. We've introduced two online training platforms. Attensi is a gamified sales platform. I play it myself occasionally, and Campus is very much intended for those more governance and solid static training programs overall. Well-being is incredibly important to us. It isn't just a word, it is incredibly important. We've signed up to the Burnt Chef Project, the Menopause Pledge. We have a very comprehensive well-being program to ensure that our teams have access to support in the event that they require it. A very clear agenda on the people front. From a growth perspective, I mentioned segmentation of our pub estates a little bit earlier. What we did last, at the back end of our last financial year, was concluded on a much simpler segmentation of the business into three tranches. Community, good value pubs at the heart of the community, and I'll touch on these with pictures in a moment. Signature, an elevated experience, what I would call premium mainstream, a timeless country pub atmosphere. Revere, our most aspirational offer, many, in many cases for a special occasion. What does the clear blue water look like? Typically, a food dish will be GBP 2 more expensive from Community to Signature and ditto up to Revere. Drink will be between 50 and GBP 1 a pint, for example, as a gap between the three segments. We completed a food-led review in September. We presented that in our preliminary results, the headline of which was to shift from 80% value food to about a third into those Signature and Revere formats, but also into Community Wet, which I will touch on in a moment. We're targeting conversion returns of around 30% on a blended basis. We completed 10 in H1, eight in the second half year. We're ramping that up to 50 per annum as of next year. In addition, we have a two-for-one format in around 75 of our pubs. Interestingly, that, despite being our deepest value format, was our weakest performer coming out of the pandemic. Back in the autumn, we trialed six pubs, three with single price point menus and just removing the two-for-one signage, three with a bit of very low-level CapEx overall. In all six, we've seen an uplift. Two-for-one continues to lag our food-led estate by around 10% in LFL sales terms. As a consequence, in spite of the strategic shift over the next few years, we are exiting two-for-one by the end of September of this year. We simply can't sit on our hands and watch that lag continue for another year or two. We've extended that segmentation to our wet- led pubs, managed and franchised pubs, and around 10% of those will convert to Signature. At the moment, we really only directly retail to the value part of the market. We've some beautiful pubs in affluent villages. The right thing to do is elevate the overall experience. We're targeting 1-2 by the end of this year, ramping that up to 5-10 next year and even further the year after that. These require slightly less CapEx than our food led because we're using the building. The building is effectively something that just needs enhancing at a similar level of return. We're in the process of extending that review to our 300-strong tenant and leased pub estate. A very clear segmental plan to evolve the pub estate in a much simpler manner overall. What does that look like? This is community wet. This is the King's Arms at Killingworth, a pub previously that was a carvery called The Shire Horse. As you can see, pre-CapEx, it was taking GBP 17,000 a week. We spent just under GBP 300,000. Even despite it being H1 and the impact of the pandemic, the average weekly take of this pub has significantly increased. What is important to note here, that of that GBP 7,000 increase, about GBP 5,000 is drink. The reason we are seeing this in our conversions is in many of our pub restaurants, I think we lost the drinker. They didn't feel comfortable coming in to drink, hence the focus on pub in our vision and our strategy. As you can see, the returns are quite significant. Important point to note on our CapEx program, and returns, and driving out performance. Number one, our managers have uncapped bonuses, so this manager will be rewarded very well for achieving this level of performance. Secondly, in appraising our CapEx, although there is a hurdle rate for the money we are spending, in that CapEx appraisal, we are also setting out what we expect that pub to do from a fair, maintainable trade perspective. What should this pub be capable of, capable of getting to? The example of the King's Arm, this should be a GBP 30,000 a week pub. What we're trying to drive is a desire and passion to exceed the appraisal, take the pub to a level well over and above that CapEx return, and that in turn will ensure that we don't drift back to the original GBP 17,000 and then reinvest and start that cycle all over again. The next pub is a Signature pub. This used to be the Poppy Fields, a rotisserie pub on the outskirts of Maidstone. It's now been converted, called The Fields at Aylesford, to Signature, and as you can see, a far more enhanced spend. You can see that there's a very clear place to drink. There are bar stools. There's a wood burner at one end. Go and drink there. You can eat to the right. The garden and the outside area has been enhanced, and we've seen a change of customer. It's increasing number of drinkers, increasing number of females, both drinking and eating. This pub at the moment actually is throwing out over GBP 35,000 a week, and importantly, on a warm day, we'll do 50/50 food and drink. The drinkers are coming back to this pub. Finally, from a Revere perspective, as our director of proposition and formats calls it, these are more wacky. These pubs are more blingy, attracting a more affluent customer. This is the Curious Cow in Harrogate. Used to be a rotisserie called The Old Spring Well. We're very pleased with the initial performance of this pub overall. In addition to that, another key element of our growth plan is franchising. It's a model we introduced back in 2009. For those of you not familiar with the franchise model, in essence, what we do is we supply all the products, pay all the bills, do all of the marketing for a pub, and the franchisee simply needs to sell. In return, they get a percentage of the turnover to pay for themselves and their staff. That model operates in over 600 of our pubs now. You get that owner-driver mentality driving sales and earnings growth with very, very minimal failures in that regard. We introduced an evolution of that model called the Pillar Agreement, which enabled a franchisee to own their own food agenda but put that onto our EPOS system. We're going to take that to 60 sites by the end of this year and then evaluate how we can improve that further. Importantly, we are now trialing franchise in four of our new build pubs that are due to become Community wet over time. We put the Community wet menu in there with a franchisee, and the early signs are encouraging with double-digit sales growth. The continued evolution of franchise, in our view, is a core driver of future growth. From an inorganic perspective, I mentioned the Brains transaction. To set out what we did there, Brains operated 150 or so pubs. We did a desktop exercise. Wells was shut at that time, and we said we would run 100 or so of those pubs on a long-term lease, and a proportion of those pubs we would run for Brains on their behalf for a couple of years. So a CapEx-light acquisition, and it's performing well. Brains has outperformed the Marston's well. The Marston's core Welsh estate, we're converting to franchise and seeing growth. One of the big challenges was kitchens. They had different kitchen equipment. We're in the process of rolling out the Marston's menu, which represents further margin opportunity. We've converted a couple of the sites in the first half of this year, four for next year, and we've identified further opportunities looking forward. A couple of the sites that were going to be, which we were going to stop managing in a couple of years' time, we've actually decided to take them on board. They will come across to Marston's in the course of the next couple of months or so. As a framework for future M&A, therefore, we've got a platform whereby we've got property partners who want to own the freeholds, and we'll simply be the pub operator driving EBITDA growth in that regard. We were challenged at the last results about the roadmap to getting to GBP 200 million sales growth, and rightly so. What this chart sets out is, in essence, about a half of that growth will come from the repositioning of the pub estate. About a quarter will come from opportunities within franchise expansion and Brains. Now, with those direct interventions, what's left is a sales task which requires around 2% like-for-like sales growth. While I accept the consumer environment is challenging, as we came out of the financial crisis, pubs typically grew like-for-like sales by 3%-5%. I don't think it's an overly demanding LFL target over and above that GBP 140 million. From an ESG perspective, in the preliminary results, we set out our net zero plans in some detail. In the appendices to this presentation, that roadmap is clearly set out. I mentioned, though, that the Going Green campaign has been introduced. I think there is an immediate, quicker win to drive further reductions in energy usage. A second environmental consideration, which we are evaluating and finalizing at the moment, is a reduction in food wastage. It is important to me that in any environmental challenge, we're clear about the targets we want to achieve and when by, and we will set those out at the preliminary results at the end of November. From a social perspective, we are all about being local. Pubs, the affinity with the pub and relationship with the pub is the Dog and Duck down the road. It's not necessarily with national brands. We're in the process of fulfilling local and national charity commitments. I mentioned well-being programs earlier. More importantly, we are a very important local employer, and I mentioned apprenticeships and ex-offenders earlier. From a governance perspective, we have a strong governance framework embedded throughout the organization. From a gender perspective, over half of our board and exec is female, and around 40% of the leadership group. This is a very strong, clear ESG focus. ESG are not simply three letters. We live, eat, and breathe this day in, day out. To summarize, from an outlook perspective, trading has been positive. The guest standard and engagement scores are encouraging. We have been able to use price to mitigate the majority of inflation without compromising our guest experience. Just to remind you, we are confident that pubs remain the resilient, affordable place to socialize overall. Our strategy is focused on creating a simpler, more efficient business, and we are focused on creating a high quality business that is sustainable for the long term. Don't just chase the sales for the next 4-5 weeks. In achieving that, delivering that strategy, we have some very clear financial targets underpinned by a strong ESG agenda. A very resilient business with very clear plan to create sustainable growth and shareholder value going forward. That is the end of the presentation, so I will now open this up to questions. Andrew, thank you very much indeed for your presentation this morning. If I may, I will just bring back up your camera. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that's situated in the right-hand corner of your screen. Just while Andrew takes a few moments to review those questions submitted already, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Andrew, as you can see, we've received a number of questions throughout today's presentation. May I take the opportunity to thank all the investors for submitting their questions. If I could please just hand back to you to run through that Q&A tab and where appropriate to do so, if you could just read out the questions and give your response, and then I'll pick up from the end. Thank you. Sure. Okay, there are a couple of questions loosely linked. One is, "Can you give a clear idea of the plan on how the company maintains margins in the face of high inflation of raw materials, labor, and transport?" Then one is, "How are you managing inflationary pressure, and what trends are you seeing from discretionary spend?" If I start with the plan to maintain margins in the face of high inflation, this has to be about sales generation. I think the important thing is in driving that GBP 200 million sales growth, that will start reinstating and ensuring we get margins back to those pre-pandemic levels. In the short term, however, while we have taken price, I still believe there is further price we can take. If I give an example. In many of our pubs, we moved from a GBP 2.80 entry point pint up to GBP 3. The insight tells us the psyche of the customer is, "I want to buy 3 pints for GBP 10." What that tells us, therefore, is we probably got the ability to move up to GBP 3.30. You certainly wouldn't do that in one go, but you wouldn't be breaching that psychological KVI point. We adopt similar mindsets to things like fish and chips and burger and chips, for example. I think we've got scope to continue to mitigate in the next couple of years, but ultimately the margin builds will be borne out of the fact that we've got conversions that are high- returning, driving sales, feeding through to a higher EBITDA percentage overall. With regards to the managing of inflationary pressure, I think the food is stabilizing at around 7%. The drink, we've got visibility out to 2024. I can't really talk about beyond 2024. On food, we're working with suppliers. As I said, it looks to have stabilized, and from energy at the moment in the short term, it's about using less energy overall. With regards to trends, unlike the financial crisis, we have much more visibility to customer data than we've ever had. Back then, all we did was look at the like-for-like sales, and we got a little bit of customer feedback. Now we have a database, we have social media platforms. We are able to listen to our customers from many, many angles, and that's what Reputation does for us. As it stands at the moment, the trends are that footfall is slowly improving, sales are stable. There isn't a step change up, but similarly, there isn't a step change down. That. Where will that be in three months' time? Clearly, I've not got a crystal ball. The bears would say the consumer's gonna fall off a cliff. The bulls would say, "Well, actually, it's holding up okay because the saving ratio is high." We'll adopt, you know, the modus operandi back in the financial crisis. Every three months, we'll report on the market and tell you as we see it. As things stand from what customers are saying, we're not seeing any significant easing off of spend. Another question was, would we consider the sale and leasebacks? Would we consider sale and leasebacks from the freehold estate? I think it's a really good question. Clearly, one of the questions is, does the equity market value us being a freeholder or not? If the answer is no, then sale and leaseback from a cost of capital expenditure perspective might be an option. It's certainly not a door slammed shut and something that we keep on the table. Clearly, at 83% freehold, our desire would be to be predominantly freehold in any regard. Why do you think the market has not responded to the developments of the business? The share price doesn't reflect the operational improvements. I think if I look at the market generally, consumer stocks are being hit pretty hard. Although I'm really pleased with the internal progress we've made, if we're gonna be honest with ourselves, the half year did have Omicron. I think the market needs to see normalized, uninterrupted trading. In that regard, I think H2 is absolutely critical. If we're delivering that like-for-like sales momentum, even if it's only slightly ahead, given the concerns about the consumer, in my view, that will start coming through in the price. At the moment, my observation from my roadshow so far is that there's a lot of concern about what is going to happen to the consumer, especially in the autumn, given the news of the increase in the energy cap to GBP 2,800. What have you learned about the business over the last couple of years, which must have been very testing? First of all, we have a brilliant team. We lost very few. We quickly acted. We hunkered down where we needed to. Importantly, we were self-help. We sold the beer company, which means we didn't have to tap the equity market. The one thing that we've learned is that there are two things we've learned. One is simplifying your business and making it more efficient is the right way to go. I think we, you know, we're demonstrating that through our strategy. Secondly, I think there's been a lot of talk about the emergence of tech, so order and pay apps. We are looking at tech very closely, but we will only use tech where it's very relevant to customer and improves the customer journey. If I use order and pay as an example, we actually removed it from inside our community pubs in the winter because we had a scenario where a customer would come in on a busy Friday night, sit down, order at the table, the bar's queuing up, people ordering drinks. The person who's ordered at the table wants to drink now, who do you serve first? Actually, that proved quite challenging. However, we do see big opportunity for order and pay in outside spaces, and virtually all of our pubs have got outside spaces. In the last couple of weeks where we've had sunny days, we've seen sales and garden sales improve quite materially. The next one is, how does increasing prices combat the fact that the customers have less money due to inflation? Is discouraging customers a good plan? I think this is about balance. I think the insight tells us customers want to go out. They want to socialize. That's what we saw in the last financial crisis. At the same time, I'm not prepared to compromise quality. We could sell a cheap plate of food, but I don't think customers will come back. Encouraging customers to come and have a good experience means that price falls down the ladder. Just to be clear, when we're taking price, we're taking GBP 0.50-GBP 1. We're not taking GBP 2-3 a dish. Our fish and chips in our Community pubs is still around GBP 9. It goes up to GBP 12 or so in Signature, up to GBP 14 in Revere. Similar sort of price points for burgers. I think keeping an eye on the KVIs is how you ensure that you're generating value overall. I've got a final question: Where is the shareholder value? A very poor share price, no dividend expected, privilege card removed, no discount for accommodation. The privilege card has been replaced by vouchers, which is similar to most of our competitors. The share price, we have a plan to drive shareholder value. With regards to dividends, we have made it clear that it's our intention to reintroduce the dividend at some point in future when we've got normalized trading and more predictable cash flows. What I have made clear to the market, though, is that the connection between the GBP 1 billion borrowings target and the dividends are separate. If we've got predictable cash flows, we will reintroduce the dividends, and we recognize that is important to many of our shareholders. That concludes the Q&A overall. Andrew, thank you very much indeed for taking the time to address all of those questions that came in from investors this morning. Of course, if there are any further questions submitted today, we'll make these available to you immediately after the presentation has ended for your review. Ladies and gentlemen, we'll publish all those responses where it's appropriate to do so on the Investor Meet Company platform. Andrew, perhaps before redirecting the investors on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great. Yeah, thank you. Look, I hope we've set out here that we have a very clear plan, a very clear strategy. We are cognizant of the challenges to the consumer, but we are back in the black. We're making profits again despite Omicron. We expect to make profits in H2. As long as we stick to that plan and pursue that conversion overall, I'm very confident we will create long-term shareholder value overall. That's great. Andrew, thank you very much indeed for taking the time to update investors today. Could I please ask investors not to close this session, as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team 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 Marston's PLC, we would like to thank you for attending today's presentation. That now concludes today's session, so good morning to you all. Thank you.