Good morning, everyone, and welcome to the Victoria PLC FY 2022 half year bond investor update call. My name is Robin, and I'll be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. If you have joined us online, you can press the flag icon on your web browser to ask a question. I will now hand you over to your host, Michael Scott, Group Finance Director from Victoria PLC. Michael, please go ahead. Morning, everyone. It's just me today. As you said, it's Mike, the CFO. So I'll be taking you through the presentation. Hopefully, everyone has that in front of them. So, you know, very pleased to present these results to you. It's been, you know, and continues to be, you know, a fantastic year. I think that's hopefully the results to some extent speak for themselves in that regard. I'll start on obviously slide two, the highlights, just to take you through those. You know, revenue of almost GBP 490 million. Of course, there are acquisition effects within that. But importantly, and we split it out, you know, of the 60% growth year-on-year, in that number, 30% of that is organic, like for like, you know, constant currency growth. Genuine organic growth, which is just absolutely unprecedented. Just to sort of remind everyone that, you know, last year in the half year, yes, we had a half year that was impacted by the lockdowns back in April, May 2020, in the comparator. The one that, coming out of those lockdowns through to the half year, the comparator was actually a strong and solid comparator. It is very, very meaningful. We're very proud and happy with that result. We are confident that we are, you know, performing better than, you know, the market and the competition. You know, the great. There's a bit of a story, as always, with us around margin because of acquisitions, that sort of, I try and cut through that for you so you can see what is acquisition mix. I'll come back to that in more detail. The headline there is that, you know, EBITDA GBP 84.5 million, which represents a 130 basis point like-for-like year-on-year increase in margin. In terms of cash flow, again, I'll come back, you know, consistent conversion from EBITDA to operating cash flow. Obviously, as everyone knows with our business and our strategy, that we reinvest all of our cash flow into delivering growth, whether that's acquisition related or organic. The operating cash flow remains very strong. Net debt, GBP 519 million, obviously, following the additional EUR 250 million euro notes that we issued, as everyone on this call will be well aware, back in March this year. Of course, some of which, not quite all of which, we still have cash left on the balance sheet, excess cash left on the balance sheet, but a decent proportion of which we have invested into acquisitions since that time, and I'll talk through those. That brings the net debt to 519. Then importantly, because we've got more debt but more, bigger business, more revenue, more EBITDA, the leverage has remained absolutely stable at 3.3 over the last year. In line with our stated financial policy. That leverage, by the way, is, you know, that's just to be clear, pre-IFRS 16. That is, you know, at notes and any bank debt, you know, or bank facilities, over pre-IFRS 16 EBITDA. Just on the next slide three, this shows a breakdown in the same format that we always show, of some of the key income statement KPIs by division. We've got a fourth division now because we acquired a business in June in the U.S. Our first acquisition in the U.S., albeit we already had existing business in the U.S. via export. We have carved that out into its own separate division. It's a business called Cali. It's based in San Diego, in California, but it distributes across the whole of the U.S. I'm not gonna dwell on the rest of this slide. I think the numbers sort of speak for themselves, but there are other slides that get into the analysis in a better way. Flipping over to slide four. This slide is really just concentrating on revenue. You know, it shows the 60% absolute growth in revenue by segment, and then shows the like-for-like performance by segment, which obviously averages out at 30%. Obviously, not relevant in North America, given that that is new. Clearly incredibly strong performance, in particular in the U.K. and European softline division. I think as most people will know on this call for us, that is primarily a U.K. business. It also includes our Dutch artificial grass business, which following the acquisition of Edel Group earlier this year, has become a more substantial part of that division. Albeit it's still predominantly. It's still majority of which is still a U.K. business. The grass part sells all over Europe. This 48% that you can see here is organic growth. It doesn't include the impact of the acquisition of Edel. Really strong performance. Not to overshadow a bit but not to take away from the fact that the growth in the other two divisions was still very strong. We had a unique and still, you know, I think the market, the demand environment in the UK remains and today remains, and our outlook is also very positive, very strong. Importantly, this is the key thing I wanna point out, these numbers here don't reflect the market. You know, these numbers here reflect the performance of the group in a market that, yes, is doing well, absolutely, but. There are no market reports out there, but by our estimates, is growing still at a single digit rate. We are absolutely outperforming the market, and that comes back to the synergies and operational improvements that we've driven, which give us both margin benefit, but also importantly, competitive benefit driving the top line. A lot of that is through not just manufacturing, but service proposition. That's just really come, you know, delivered for us. I mean, it was the same story, I'm sure, in the last call we had, but you can see here that story has continued. It's really delivered for us in the U.K. The service proposition has been fantastic to drive that number. The key thing I just wanna mention also in Australia is Australia has spent quite a big proportion of the period in question here in COVID-related lockdown. I think, don't hold me to this, but I believe Melbourne has the unfortunate statistic of being the city with the longest lockdown in the world. The business there and the operational team there have done a fantastic job of planning the sales where they can. They've also found parts of the construction industry that remained open and were flexible with their business to sell where they can. To deliver like-for-like growth over these levels at a time when lockdowns were having an impact as well was just fantastic. By the way, Australia is now largely out of lockdown. We have a lot of optimism in that market as well going forward. Moving on to slide five. This focuses on the margin. I mean, the margins in terms of the percentage by segment. Margins in terms of the percentages are what they are in terms of the 18%, the 20.5%, the 13.3% and the 6.6%. I say that in the sense that they move up because of organic improvements, and in this case, you'll see they quite often, and you'll have heard this from me in the past, move down because generally, we buy businesses that are making a lower margin than our incumbent business. There's an effect going on. What the like-for-like margin variance that you can see there in each case, it represents is the organic movement in... The way we activate that is by adding it, looking at the businesses that we have acquired, 'cause quite often a lot of the margin improvement also comes from, you know, it will manifest itself into the businesses that we acquire 'cause we deliver synergies and then, obviously, that goes into certain income statements. Some of it also manifests itself in our incumbent businesses, but some of it in the acquisition business. What we do is we normalize that by looking at what, you know, what we bought. We back what we bought into the prior year number, and then we look at the overall uplift, and that gives us these numbers here that you can see. We delivered almost 200 basis points increase organically through synergies in both the U.K. and Europe Soft Floor Division and the U.K. and Europe Ceramic Tile Division. Through some projects which I'll come back to. In North America, just to point out, and obviously that's a recent acquisition, and 6.6%, we definitely expect to uplift that. It is a distribution-only business. That's the business that we bought. It's a very good business. It has a very strong revenue growth. It is omni-channel. Has a lot of interesting opportunities to grow across these channels, and we are also looking at a lot of synergy opportunities to deliver new product categories from elsewhere in the group into that business and to distribute into the U.S.. We're very excited about that. If people are wondering about the margin, it is because it is a pure distribution business and not a manufacturing business. Just flipping over to slide six. It's not the most interesting bridge in the world, but it's bridging the margin from last equivalent prior year period, equivalent period to this year. Just to again visually reinforce the point that the acquisition mix effect overall across the group was 1.2% down, and the organic improvement overall was 1.3% up, which is the 130 basis points at the bottom of the previous page. And further on in the presentation there are this same bridge reproduced by segment. On to the next slide. Slide seven. This is a slide I've put in for quite a few reports now, for presentations now. There's a lot of numbers here. This is to show all of the non-underlying items that aren't results because clearly investors want to know what a lot of these things are. A lot of these things are exact, you know, the same items that you've seen in the past. I mean, things like, for example, the amortization of acquired intangibles. We see that as non-underlying. These acquired intangibles are the things that we have to fair value on the opening balance sheets of our acquisitions, such as brands, customer relationships, and then we have to amortize them if we have the cash to replace that. We strip that out and show that separately. Just to talk through the three categories. Exceptional items are one-offs. Other non-underlying operating items are, by definition, other things that are not exceptional but sit in non-underlying. We strip out separately, the big one being intangibles I just mentioned, and then non-underlying finance items. The exceptional items are generally cash items because these are the one-off costs, and you can see there, they are, you know, costs relating to acquisition activities, so legal fees, due diligence, costs in relation to acquisitions that we've either made or prospected in. Obviously, if we stop making any acquisitions, that number will fall to zero. It's a lot higher than last year, because last year, with COVID, we weren't making any acquisitions. This year, as people can see, we've been fairly proactive because there's a lot of opportunity around. There are some reorg related costs. Last year, that number was bigger because there were some COVID-related reorg costs last year in relation to changing some of our processes to become, you know, to improve the health and safety around COVID, obviously, protections. This year, that did not repeat. There were no further COVID-related exceptional costs, but there were other costs, much smaller numbers. You can see them relating to some projects. We finished the closure of our Westex. We had one of our U.K. carpet factories in the process of closing, again, to consolidate into, in this case, our factory in Dewsbury in Yorkshire, which is completely done. We've invested in our factory in Dewsbury in Yorkshire to grow that and consolidate the production from that factory into the second one to drive, you know, synergies. That's done. There's also some projects. We've made a number of acquisitions in Italy. These small acquisitions in Italy this year, as was announced, and there's a lot of activity going on to integrate those acquisitions in terms of we've now got four factories in Italy, tile factories of the different acquisitions we made over the years and bringing that together in an optimal operational way across all the different brands and, you know, products that we produce in Italy in the same way that we've done in the U.K. and Spain in the past. There's a lot of activity there, mainly in Italy. You can see it's not a big number and it's GBP 4.7 million, which is equal. Then in finance costs, these are just the. This doesn't include the cost of the notes, for example, which is very much underlying. In the non-underlying side, the one material item here is in relation to the preferred equity. We have issued last year GBP 75 million of preferred equity to Koch Equity Development. I think as everyone well knows, by now, that's about a year ago. Under IFRS, it's recognized as financial instrument. There are, notwithstanding the cost of the preferred dividends themselves, which are accrued and will ultimately convert into ordinary equity, along with the principal. There are some embedded derivatives that we have to recognize, and equity warrants also that recognize as financial instruments, and then there's fair value adjustments to those, and that's what that GBP 10.4 million represents, the combination of the income statement impact of the fair value adjustments to all of those things. Clearly not therefore going to cash. I will leave it there, and if anyone has any questions, please ask at the end. Just going on to cash flow on page eight. You know, as I mentioned earlier, the operating cash flow generation is constant. It's not a complicated. Well, of course, in the end, of course, everything is complicated, but overall, the concepts are simple. We're a manufacturing business. We buy more materials. We manufacture and put value add, and then we have those in stock and we sell them. You know, what are the key consumers of cash in our business? It's working capital, and it's CapEx to maintain our factories and our logistics operations. The working capital, you'll see historically is very stable. We manage it very efficiently. It doesn't consume a lot of cash into the group as we continue to grow organically, and we've been very successful at keeping that. If you look back over several years, it is a very stable number. This year and post-COVID, it is a bit different. It was a bit different last year because of COVID and the lockdowns. This year, the impact there of the GBP 14 million, which comes through in, you know, in inventory and a little bit in debtors as well as we've grown the revenues clearly substantially, is an investment in stock to help mitigate some of the global and very well-known in general global sort of supply chain challenges. We don't see huge challenges. We are not worried at all about our continuity of supply. But certainly in some areas, we've taken precautions, for example, in stocking up in certain raw materials, and that's reflected there. We have invested a bit more than normal in working capital. Below that line, below that GBP 61.2, obviously, the interest predominantly there on the notes, we did have to pay some taxes in this period, unlike the equivalent period last year, which was very much due to lockdowns, and the replacement CapEx, which is around about the new enlarged business now with the acquisitions, around about GBP 40 million a year, a little bit higher than normal because some of it was deferred from last year again because of COVID lockdowns. Yeah, it's about GBP 40 million a year. GBP 18 million free cash flow, and then what I do on the next slide is I bridge that. This is slide 9. I bridge that into the net debt. You can see there, GBP 18 million after interest, tax and everything. Of course, we invested best part of GBP 180 million in acquisitions, but that also includes the, you know, the fees and costs of those acquisitions as well. That's the big movement in net debt, as I mentioned earlier. There are some other items there you can see in terms of exceptional cash items and expansionary CapEx relating to the projects that I mentioned in Italy in terms of integration and a little bit in the U.K. around the closure of Westex and the integration into different technologies for that. Finally, on the next slide, just to reiterate that, you know, this is slide 10. The financial policy is key. We follow that. We will not deviate from that. The leverage at the half year was 3.3. This is, as I mentioned, you know, net leverage of, you know, the notes and any bank facilities, and I guess traditional finance leases. This is pre IFRS 16 over pre IFRS 16 EBITDA was 3.3. That's what I've seen there at that sort of maximum low threes, as we've done in the past, as you can see there on those numbers. We still have a lot of liquidity. You can see the cash figure. We have a broad RCF on top of that. We also have a further commitment of GBP 100 million of prefs that we can issue to Koch that we have not issued in addition to the 75 that we issued a year ago. That commitment remains, so we have that available to us as well. The liquidity. The next few slides, and I won't spend a long time, but just talk through some of the specific operational matters and commercial matters in some of the divisions, and also show the margin bridge for each of those divisions, the same bridge as I showed earlier. Just very briefly, if you look at sort of slides 12 and 13, this reflects the U.K. and Europe soft flooring. I mentioned the Westex plant relocation. There's also been a lot of development in terms of product, in terms of ensuring, you know, as you can see there, ISO accreditations, but also investing in our testing labs, again, to go to, you know, ongoing quality control and so on. Logistics, as I mentioned earlier, the service proposition is key because in soft flooring in particular, you're not just talking about delivering something. You're talking about huge rolls of carpet that you cannot put on pallets that we retain in a distribution center on behalf of our customers and cut to order. It is not straightforward, and it is not palletized, so you can't put anything on a pallet network. It's vital. It's really played into our hands in terms of driving our growth because we are a reliable supplier, as seen by all of our customers, through, and in particular through these turbulent times. We've really gained from that. We continue to invest in that area, and we've committed to a new DC just off the M5 near Worcester, to replace our current Kidderminster warehouse, which will be operational about a year from now. We continue to invest and ensure that we are at the forefront of that. In terms of the margin bridge, actually, rarely it happens, but the acquisition mix effect in this division was positive. That's because the acquisition was Edel Group, which is an artificial grass business we bought in May. Artificial grass businesses generate very good margins. We also had organic improvement on top of that. The next few pages are on ceramic tiles. Again, you know, ongoing operational excellence projects in Spain. The biggest story here at the moment is we bought a couple of businesses in Italy. We now have four factories in Italy. We are optimizing our production footprint across those four factories. There are different parts of the production process, obviously, but we've got a couple of new lines going in as part of that optimization. In particular, a new replacement kiln in Serra, which is the original business that we bought back in 2017. You know, it is going in currently. It will be in by January. So investment going on there, as you can see within the CapEx numbers. You know, absolutely driving the margin improvement and, you know, we are selling out our production. Which is fantastic because we keep adding more production and then selling it out because the demand is very strong for our ceramic tile products. On the margin bridge below here, we did have a negative acquisition mix. These are the two businesses that we bought initially in April. They were effectively bought pretty much as 10% EBITDA margin businesses with about, I think, combined in total about GBP 50 million of revenue. That's brought the margins down. We are very confident. You know, we have already stated when we bought those businesses, we're confident we can pretty much double that quite quickly within the first year, and that's what we're working towards through the projects that I just described. That is just pure, you know, mix effect of what we bought. The organic improvement of 100 basis points alongside that. Finally, Australia, I've mentioned. I mean, the key thing there is it was in lockdown for a lot of the period, and the team did a great job of growing, in fact, growing that business. It's now out of lockdown. North America, finally, you know, as I said, this is, it's new. We're really excited about some of the synergies we can deliver there in terms of channel, you know, revenue channel synergies. I think that's, you know. The rest of the slides, there's a lot of slides in the back that are the same as slides you will have seen in the past, just talking about the group in general. They are lists from previous presentations. There's a bit here on acquisitions. Well, it shows there's four, but the Italian one was actually two acquisitions. We've made these acquisitions so far this year. We announced this acquisition in Turkey, which is another ceramic tile, a mid-sized ceramic tile producer in Turkey. A low-cost manufacturer. It will fit brilliantly into the portfolio. Again, we'll optimize production across that, albeit it has its own good brands, which we obviously keep independent. We're excited about that when that acquisition completes, which is expected to be January. There are more opportunities, absolutely. We tread very carefully. We look for things that are that will be sustainable in the long run, that have defendable positions in their markets and all of that stuff that I've said every time and we've done in the past and we will continue to do. We are in no rush. We will only look for good things, and we will invest fund in ways that where our financial policy is absolutely adhered to. I think, you know, just to round off before Q&A, you know, I think the highlights are, I mean, you know, incredible set of results. I mean, we are very, very happy with them. To deliver 30% organic growth while also growing margins on a like-for-like basis, I think has just been fantastic. Deliver five acquisitions and retain our level. We're very proud of it. I hope everyone's pleased with the results, and I'll pass over for Q&A. Thank you. If you would like to ask a question, please press star one on your telephone line. If you change or withdraw your question, please press star one. Those of us who have joined online, press the hand icon. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question comes from Jason Lake from Ares Management. Jason, please go ahead. Your line is now open. Hi. Congratulations. A couple of questions, if I could. The first one is if you can talk a little bit more about, I guess the end market demand that you're seeing. Obviously it seems strong. I mean, we see that through a lot of the building materials sector, et cetera. Can you talk about any variations in demand by geography or by product, where it seems to be quite strong all around, but can you talk about any differences where you're seeing maybe a little bit of flattening out of demand or perhaps a surge in demand? Do you wanna ask me to go for that first, Jason, or do you wanna ask your second one and then I'll ask you? I'll do that first. Sure. Yeah. Yeah. Yeah. Look, yes, look, of course, like it is, it varies by product, it varies and it's not even by product category. Even within, let's say, one product category, there are always differences in the demand profile that we see, you know, at, across different segments of that product category, and I'll give you some examples. Right now, the strongest demand that we see and look, I can't, you know, I can only talk to our experience and what we see in the market more broadly. You know, I don't have a market report that tells me definitively what's happened in the last three months, what's gonna happen in the next three months. The strongest demand is definitively for us in artificial grass. There's a very, very strong demand profile there. It is seasonal in artificial grass. The strongest demand comes in the spring and summer. That's offset in the second half of the year with stronger demand in other areas. Overall, our group seasonality is relatively flat. Sorry, ignoring the seasonality, I go off on the side tangent, apologies. That has seen some very strong demand. Incumbent businesses we bought in that area in 2017 have grown fantastically in the last four years, and that's why we invested in Edel Group in May to both get a couple of new brands in that area, but also to deliver a very high quality manufacturing capability in that area. I would say that's the strongest area. It is what it is, obviously not the biggest part of our business, but it is actually relatively big now that we bought Edel Group. In terms of, I mean, it shows in the numbers, right? Soft flooring in the U.K. has just seen phenomenal growth. I really wanna stress that is not reflective of the market. You know, we are in a market that I think compared perhaps to other building materials is, you know, it's the cheaper end of renovation. You know, our products are mainly going to renovation and residential renovation. It's a cheap way to improve your home, and so the cycle does move. I'm not gonna hit but it's steadier than most. What that means is we don't see huge downturns, but we also don't see huge upturns. Of course, we have seen some since COVID. We saw that last year, post-lockdowns. In our European markets, we haven't seen a lockdown effect this year, but we've seen continued strong demand. You know, and again, I don't have a market report, but you know, our view is we're talking about decent single-digit growth. Clearly we've, you know, outperformed that. Okay, there are some price increases built into that number, but again, that's single digits. A big chunk of that like-for-like growth is volume. I just think we've done a really good job in outperforming the market. Sorry, to your question, yes, I think it's definitely clearly been strong in soft flooring. In ceramics, less so. Here is where I'd say there's a sort of also an important shift with internally. We really now, you know, we have a fantastic business in some of the higher end brands, higher end products. We've invested, continue to invest in those, and they're very stable. The business growing for us at the moment is at the slightly cheaper end in the value chain, in that, in sort of the value spread, if you like, of different products. We have a big business specializing in supply to the DIY sector. That is definitely a growing segment channel for ceramic tiles in Europe, and, you know, we've invested in that. That's been a really good growth area for us through our Italian business. You know, obviously, we look to things like this Turkish acquisition. It's signed, hasn't completed. Again, in sort of looking at that because the Turkish manufacturer is a very low cost manufacturing base. Yeah, it varies. Does that answer it, Jason? Yeah. Yeah, that's very helpful. I mean, just curious, if I can add one on the. You know, you sell to DIY. Some of the DIY that, you know, that we're aware of, have had amazing growth. You know, the kind of question the sustainability of that, and maybe we're looking over the next 12 months, it softens a bit. Are you seeing any softening in the order book from that channel? No, not at all. Okay. Look, we're not. DIY is the fastest growing part of ours, but we are just to stress in every category, including ceramic tile, we service all the channels. Yeah. We like to go direct to retail when we can. Yeah. more so in retail than we are in DIY. In fact, DIY is actually still significantly smaller than direct to independent retail. Yeah. I mean, it is taking more shelf space in and certainly has done over the last 12 months in DIY ceramic tiles. I think, you know, that's a trend that we've benefited from. Yeah. Okay. Got it. Second one, if I could, the cost inflation outlook, you know, everyone talks about it. You've managed it, you know, proactively very well. No one has a glass, a crystal ball. How are you thinking about the second half or, if you can, even into early fiscal 2023, what expectations do you have? I guess another way to say it is, are you continuing to perhaps pre-buy or keep some elevated inventory because of expected disruption? I think on the disruption side, we actually haven't seen much, you know. I mean, where we see the most disruption, as I think you probably can, you know, as you'll imagine, is we manufacture most of the products that we sell, but not all. For example, we have LVT products, you know, vinyl tiles, or wood products that we work with. We design, and we have our own brands, but we work with manufacturing partners in the Far East. For container reasons and so on, you can imagine that's where one area where we've seen a bit of a pinch. That pinch has manifested itself not in terms of any decline in business, but just not being able to grow as fast as we'd like. That, just to stress, that's the only area where I would say we've seen an actual constraint in supply. But we've managed that, and we've made some changes and broadened our supplier agents as well to manage that. In terms of price and inflation, it doesn't affect all of our raw materials and all of our business. The key areas that have been affected so far this year are, number one, synthetic yarns on the carpet side. We make wool carpets, we make synthetic carpets, but these days, synthetic carpets are more popular with consumers. There are different types of yarn, and I don't wanna bore you with the different types that are used in the industry, but the key one that we use at Okay. Great. Thank you. If I can just, maybe just for my last one, just to throw in here. The M&A that you do is obviously in different countries. Is that a specific decision to expand the geographic footprint versus perhaps buying more interesting and valuable targets within your existing countries? Or is it purely agnostic, and you just, wherever the best opportunity is, at least in terms of the numbers, you just go for that? I'm just wondering how much geography is part of that strategy or not. No, it's very relevant. I mean, look, we're not buying opportunistically in the sense that we find the cheapest thing we can wherever it is in the world, or, you know, the lowest EBITDA multiple. No, that's not what we're doing. We, of course, wanna buy at sensible prices, but importantly, we wanna buy things that are gonna be meaningfully added to our existing business. One of the reasons why it took us until now within this strategy, which has been going on for many years, to buy something in the U.S., is because it's clearly not a focus when you're trying to consolidate a business predominantly in Europe. We look at, yes, operational location because, you know, if something's on the other side of the world, it is of course that much harder to manage and then question of what synergies you can deliver operationally. Also, end markets. Everything we've bought in Europe, including, frankly, the Turkish business that we've now announced, you know, they're selling across Europe, and so we look at how we can sort of are balanced across the channels and selling geographies. You know, we also, you know, Turkey is good. We can work with that in terms of operational synergy with what we've already got in Spain and Italy. You know, it would be different if it was something much further away. It is very relevant. There's a lot of history in these industries, right? There are a lot of ceramic tile producers in Spain and Italy. If we're growing in ceramic tiles, that's where a lot of opportunity lies. You know, whereas, you know, soft flooring, you can imagine there's more producers in northern, you know, U.K. and Northern Europe. Yeah, we look at that carefully, and we scrutinize every acquisition carefully, not just based on price, but based on all of those sorts of criteria. Okay. Yeah. The takeaway is, obviously in your existing markets is where you're looking at targets. Now the U.S. is more of your focus now that you've got Cali, but perhaps buying something in South America I should consider as less likely because of what you've just said. I mean, that's kind of my takeaway. Is that fair? We are interested in ceramic, more growth in ceramic tiles in Europe. Mm-hmm. We are interested in selective growth in soft flooring and U.S. distribution and things that will give us synergies into that U.S. distribution. Great. Thanks so much for the time. Pass it on. Thanks, Jason. Thank you, Jason. Our next question comes from Karan Santani from Citi. Karan, please go ahead. Your line is now open. Hi. Thanks for the presentation. I just have one question. In terms of acquisitions, I think we've previously discussed the questions about entering the commercial space. I assume that there's no change on that. You don't want to enter the commercial market. I guess, in general, yes. It depends. Commercial depends on what you mean. I think for me, there is residential, and then there's different elements of non-residential, if you like. There's also separately the distinction between renovation and more construction-related, which could also be in residential, right? The vast majority of our business is focused on residential end markets, i.e., we're selling to retailers who are ultimately selling to consumers, and by definition, renovation, you know, 'cause we're not selling to house builders. We do sell, by the way, to house builders, but it's a tiny part of our business. What are we interested in going forward? I think we're underweight in commercial, but I think that suits us for now. I think, you know, are we interested and do we already do business in, for example, some, you know, hotel refurbishment or some, you know, other types of commercial refurbishment? Yes. Do we wanna do, are we interested in getting into, you know, carpet tiles and office type refurbishment? Not really. It really depends what you mean. I think there are interesting areas of commercial that have synergies with what we're doing that we're always gonna be interested in. Yeah, by far, Karan, the, you know, things we look at are, yeah, perhaps residential refurbishment related. Right. Okay. I'm talking more of the sort of high-end stock, the likes of your Apple, your Amazon, the higher end of the spectrum of companies like that. You mean in what way? You mean to refurbish offices? Yeah, exactly. Of said high-end companies? Carpet tiles in those various larger corporations. Look, our focus is not on. You know, we will look at everything, yeah. As for starters, we have a very open mind when it comes to looking at stuff. We very quickly narrow down what is meaningful to us, what we can manage, what we think is sustainable, where we think that, you know, there is a position that can be defended, right, in the market. Generally speaking, in commercial, we have less interest. You know, we keep an open mind as well, right? Yeah, it is a fact, and it's been a factor today, and it continues that, you know, we're not really interested in products that go into office spaces. It's not really a focus for us. Okay. That's very clear. Thank you very much. Thank you. As a reminder, to ask a question, please press star followed by one on your telephone keypad now or the flag icon on your web browser. Our next question comes from Jonathon Smith from HPS Investment Partners. Jonathon please go ahead. Your line is now open. Hi. Good morning. Thanks for the presentation. Could you help me with what would your run rate revenues and EBITDA be, including the impact of all closed acquisitions? If you could provide that, please, Michael. Well, it depends how you look at it, because when we bought some of these businesses, some of the ones we buy for more operational reasons, they come with brands, we continue those brands, but actually we're happy to drop and what's the word? You need to cut some lower margin business. Sometimes we buy businesses, and we've done this in Italy in particular, where we were happy to actually reduce the revenue, but to improve the bottom line, right? And there's an element of that. The run rate overall is broadly, and no surprise when you look at our half year number around about GBP 1 billion in sterling equivalent. It does depend on translation, obviously, of FX. Understood. Thanks. In terms of H2, is there any guidance you can provide? It looks like it would be a tough comp both in terms of revenues and EBITDA, but margins in particular. Can you give us any guidance there as to what to expect in H2? I think we will. You know, I think overall, yes. It depends on the, you know, any acquisitions, of course. If we didn't make any other acquisitions then the low margin this mix effect will have more of will continue to some extent because those businesses are coming in a full year effect, yeah. There's an element of some further dilution there because they weren't bought at the very beginning of the year. That, you know, equally, we do believe that there will be some operational improvement, some further synergy improvements because some of those projects continue, as I said, in particular in Italy. Do we expect there to be some short term impact from, for example, gaps in particular? Maybe, as I mentioned already. Look, I think overall it's hard to predict in the short term. It is harder actually longer term. I would say we do expect there to be a bit more improvement on where we are today. I would say soft flooring is pretty much where it is. I think we can continue to grow, but I think the margins we've delivered and we actually think are sustainable. You know, maybe we can take a few more tens of basis points, but it's not gonna be, you know, whole percentage points. I think ceramic tiles, it's very variable. You know, with the original business we bought, we bought making 30%+ EBITDA margins. They're still, you know, and we've actually improved those. They're still up there. Then we buy businesses making 5%, we bring them up to 15%. The ones that make 5%, you bring to 15%, you're never gonna get them to 30%. It's just, you know, in the nature of their products or whatever. I think there's more to do in ceramic tiles and depending on where we are in that, you know, the mix of the value chain, I think it's good to assume that ceramic tiles will sustain low 20s% overall. I think we could do a bit more there. Like, yes, clearly there's a huge dilution effect of the distribution business in North America coming in. That was at 6%-7%. We can definitely improve on that to high single digits%. Just to give you a feeling. Great. Thanks. Lastly, now the business is larger, how should we think of CapEx going forward? You mentioned it was elevated in H1 for some of those one-off projects. I think you said GBP 40 million per annum replacement. How much growth, and are there any more material projects you have on the horizon? The 40 million is the right number in terms of replacement. That is to keep everything well invested in continuing in the future. We have our CapEx program and cycle for all of that across the different divisions. That just to be clear, this is not including our IFRS 16 CapEx, as it were, on leases. In terms of products, look and it is what it is. We endeavor to split those things out accurately. I fully appreciate everyone will look at numbers in companies and go, "Well, you know, what is maintenance, what is and what is growth CapEx or specific project CapEx, particularly if you always have projects." I fully appreciate that. Everyone will be looking at our numbers asking the same question. GBP 40 million is genuinely what I believe the number is. If we were not growing and investing in any more projects. Do we have more projects? Yes, there are some projects ongoing in Italy. I think it's actually a choice. Potentially we could invest, you know, a fair amount, you know, quite a few GBP million in Italy to create some real organic opportunity as well. There's a choice there. There are things that we can do definitely going into next year. I would expect to see a few, you know, I'd expect to see another year of high single-digit CapEx projects to deliver more synergies. You know, if assuming it's Turkey completes, there'll be a project there to make sure that we optimize the production across between Italy and Turkey as well. Understood. Very helpful. Thank you. Thank you, Jonathan. This now concludes our Q&A session. I will hand back to Michael for any closing comments. Well, no, thanks very much everyone, and thank you for, you know, ongoing support of the group. I hope everyone's pleased with the numbers. As I said, for me the highlights are, you know, I think the like-for-like growth has been outstanding and especially in the context of, you know, increasing the underlying like-for-like margins, notwithstanding the acquisition mix. It's profitable growth and you know, we've continued to deliver on some interesting acquisitions I believe, where there is more opportunity with those and there are more acquisitions potentially. We will continue to be very cautious and we will continue to do that in line with our financial policy as you've seen. Thank you very much for your ongoing support. Thank you everyone for joining. You may now disconnect your lines. Thank you. Cheers.