Hello, and welcome to the Pepco Group Full Year 2023 preliminary results. Please note, this call is being recorded. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. I will now hand you over to Executive Chair Andy Bond to begin today's conference. Please go ahead, sir. Okay, thank you, and welcome, everyone. It's Andy Bond speaking. Thanks for your time today. You will hear this morning from myself and Neil Galloway, our Chief Financial Officer. So I'll kick off and give you a few headlines. So I'm on slide 3 of the pack right now. Look, I think first of all, to remind us of the sort of framework we're looking at backwards at FY 2023. I'll also refer to some of the points we made at the Capital Markets Day, and the change of direction we intend to take in the business. My overall thoughts on that would be, first of all, that we still have a great business with a great opportunity to achieve its aspiration of being Europe's biggest and best discount variety business. You know, and we have significant opportunities to grow and equally become more profitable. We're already seeing some good progress in the work we've done to improve the business, and I see that momentum only growing as the course of this year goes on. As I said, we'll largely talk about last year, but we will make some reference to how we see the shape of this year. So to slide 4, the highlights of FY 23, I think it's fair to say it was a mixed performance in what was a challenging market environment. It's worthwhile recognizing just how our core markets of clothing and homewares in Central and Eastern Europe were in significant decline during the year, and that must be set as context. Against that, we recorded record group sales levels, both at a total level and also a good level of like-for-like growth. However, that sales momentum was significantly tailing off towards the end of the last financial year. We had the largest ever store opening program we've ever achieved with 668 net new stores. Our gross margins were depressed year-on-year, and our EBITDA was slightly up at EUR 753 million on an IFRS 16 basis. If you turn to the next slide, I'm not gonna go through the P&L in any detail, slide 5, because Neil will do that. So I've just put that in there as reference, and I'll now hand over to Neil, who'll give you a more detailed financial review, and then I'll come back with some thoughts on strategy and direction for the company. Thank you, Andy. Just picking up the some details on the summary P&L on that slide five. As you said, record revenues up EUR 823 million, 17% versus prior year's EUR 5.6 billion, with a like-for-like performance of 6% for the group. The gross margin you mentioned was impacted by a couple of cost headwinds, principally freight and FX, going against us, although freight was improving during the year. That relates to the longer buying cycle where we had some of those costs embedded from buying earlier in the year, resulting in a 70 basis points deterioration versus prior year to around 40% gross margin. Operating costs clearly were a significant challenge during the year, up 22% or 120 basis points at EUR 1.5 billion. That was largely driven by record store growth and the impact of inflation, particularly in Central and Eastern Europe, running across the business. That resulted in an underlying IFRS 16 EBITDA of 3% up on prior year at EUR 753 million, well behind the revenue growth, and really impacted by a combination of the weaker gross margin and the cost inflation I've just mentioned. The knock-on effect of that and the growth delivered a decline in pre-IFRS 16 EBITDA, down 10% at EUR 396 million. Principally, the difference due to really being a high level of rent coming through the business, both from inflation in the existing estate and the new stores that we opened during the year. With a significant increase in depreciation that was driven by store growth that we've talked about, plus the significant New Look program, which was investments in our core estate across Central and Eastern Europe, where we remodeled 715 stores during the year. And that resulted in PBT down 33% on prior year. And the after-tax profit outcome 40% lower year on year. That was further impacted by a combination of slightly higher borrowings, growth borrowings during the year, and an increase in interest rates and then interest costs up about EUR 60 million year-on-year as a result of those factors. If we move on to the following slide to look at the strong, we look at really strong sales growth, but it was deteriorating in the second half. So as I mentioned, group like-for-like up 6%, total revenues up 17, just over 17%.... If we look by banner, Pepco delivered a 6.3% like-for-like performance with a strong first half, but deteriorating in the second half, with four of the six months during that second half period, negative like-for-like months. With the position worsening during August and into September, particularly affected in September and late August by warm weather, impacting sales of our autumn winter range, alongside the sort of continuing challenge on consumer spend. Poundland delivered sort of 5.5% like-for-like for the year, supported principally by strong performance in FMCG, but again, it was a weaker performance in the last quarter of the year. While Dealz up 11.3% like-for-like with growing brand recognition in Poland, as it sort of essentially doubled its network during the year. And also, it also benefited on the back of its FMCG category performance. That results in total sales for the year of 17%, principally driven by Pepco store growth. We had, I think, net 2 store growth in Poundland, principally driven by Pepco store growth. One thing just to remind people, full-year financial year 2024 will benefit from the full-year annualization of the new stores we opened during 2023, so we shouldn't lose sight of that opportunity for us going into this current year. If we turn to slide on the segmental performance, slide 8, it's marked. The overall performance was driven by Pepco, approximately 60% of group revenues, versus 56% in prior years. So it's gaining a share of group revenues through that accelerated growth. While we had a slight increase in the IFRS 16 EBITDA, as I mentioned, obviously declining post-rent, reflecting the impact of that higher inflation and store growth. Poundland Group, although on this slide, it's showing a deterioration of pre-IFRS 16 performance, it actually improved on the prior year if you adjust for the release of certain provisions, which were sitting in the FY 2022 numbers. So, absent those provision releases in FY 2022, we'd have seen an improvement in performance from Poundland year-on-year. Moving to slide 9, just to touch on like-for-like performance over a longer period, and also to give a little bit of color that Andy referred to in terms of performance in recent trading. While both Pepco and Poundland had a challenging fourth quarter in terms of like-for-like, especially in August, September, the recent trend has been improving sequentially as we moved into October and November of the current year. On a two-year view, I think as you can see from the chart on the left on the slide, for Pepco in particular, over the period since August through end of November, we've seen a good performance. Looking back over two-year, reminding people we had a very strong period we were comping against from last year, which essentially was the first real Christmas period post the pandemic, that people had had to go out and spend for that Christmas holiday period. And again, just as a reminder, August and September were significantly impacted by warm weather across the business. Moving on to slide 10, we talk about gross margin. That is recovering as cost headwinds abate. We talked. We shared a more historical evolution of our gross margin at our Capital Markets Day in October, so I won't go back into that. But the key factors in FY 2023, focusing specifically on Pepco, we had an improving buying margin and improving freight rates relative to what we had seen. But we had a significant FX headwind, driven really by our base currency being in Polish zloty, buying against, particularly, the Chinese yuan and the US dollar, which impacted us during the year. However, if you look at the chart on the right, we've shown for the group, quarter-on-quarter gross margin trend through from for FY 2022 and FY 2023. You can see we reached sort of a low point during the FY 2023, as expected in the first half, and we have seen recovery at this point. Essentially, if you look at the trading performance of the business since the exit of Q4, we've added about 100 basis points in gross margin through to the end of November trading. We are seeing an improvement in gross margin as we have outlined we expected to do at previous communications. Moving on to operating costs. As I mentioned, that's been impacted from both inflation and new store acceleration. We did make significant progress on reducing costs from 2019 through the pandemic, but lost some discipline on that in 2023, particularly in Pepco and on the back of accelerated store growth. And as Andy's referred to before, and a range of other projects which distracted from the core business and are now being reviewed. The business will be reviewing costs during the year, with significant activity ongoing to manage these down, taking account of more challenging sales environment that we've been experiencing over the last couple of months. And just moving on to talk about the cash flow. Net cash from operations improved by around about EUR 200 million year-on-year. Benefits, obviously, as the business is getting bigger. But we also didn't suffer the impact of a large working capital outflow at the end of FY 2022, on the back of significant stock purchases that landed at the end of the year. Having said that, we've obviously seen a record CapEx spend in 2023 of EUR 390 million, largely on the back of both the store growth and New Look, and I'll talk about that in the next slide. So we had a net cash outflow of EUR 22 million for the year. Also recognizing, there was an additional inflow from the debt refinancing we did, which I'll talk about shortly. We do remain well within our financial covenants, so the net debt for the full year, EUR 411 million, is approximately 1x the EBITDA on an LTM basis. So well within our banking covenants. Look at CapEx for the year. Chart on slide 13 depicts how we spent the money. Over half of the spend, not surprisingly, went on new store expansion. 826 gross new stores opened, net 668 during the year. Another element was in relation to the New Look program, which we've talked about, and we have put under review as it's not delivering the expected returns in the current environment. And the other two elements relate to maintenance CapEx, largely for store upgrade, which is not significant, and the core infrastructure as we invest towards, you know, building a single business and IT platform to support the business. So, that relates to principally IT, but also some supply chain investments. You may recall, we opened a new distribution center in Romania in the second half of the year. If I move on to slide 14, just touching on the balance sheet key items. The key movements in the balance sheet year-on-year, driven by really 3 elements. Firstly, store growth is impacting the increase in leases and the PP&E movement in relation to fixtures and fittings as part of that store fit-out program and the New Look program. Obviously stock, and apart from just the expansion in the business, we have added an additional DC in Romania, as I mentioned. And as again, as mentioned, we have significant inefficiencies in our transport and distribution environment, as we do not have a DC in region supporting Spain and Italy. So we've got significant incremental stock in transit at any one time from our DCs in Eastern Europe to Spain, Iberia, generally, and Italy. So there's an opportunity and room for improvement, and as we've mentioned in the past, we are planning to open a DC in Spain during the course of FY 2024. And lastly, obviously, an increase in debt as we refinanced our Term Loan A with a bond issue over the summer. And that was a EUR 300 million Term Loan A refinance with a EUR 375 million bond issue. So slightly higher, taking account, taking opportunity from the strong demand we have for that issue. If we look on slide 15, just picking up a position on stock, it is higher than expected. We talked about some of the challenge in stock given the weaker sales environment. So, you know, that is an opportunity for us in FY 2024 to reduce the stock in the business, and that is something that is very much part of the focus activity this year. If you recall back at the Capital Markets Day, we indicated historical stock levels have been around about 105, 110 stock days, and we're clearly significantly above that. So there does remain an opportunity for us to attack that during the course of the year. Clearly, a large part of the problem at the latter part of the year was the warm weather in August, September, meant we had a lot of stock coming to the business and weaker sales. So that is something we are managing through. As mentioned, we have taken some provisions to help clear stock as we go, alongside deferring and canceling some of the orders as part of our normal planning process. Lastly, just to touch on the funding and financing position of the group. I mentioned the new bond issue in mid-2023, so 5-year senior secured note, 7.25% maturing in July 2028. So that extended our debt maturity as we refinanced the Term Loan A, which was due in 2024. We also increased the size of our revolving credit facility from EUR 190 million to EUR 390 million, providing additional working capital that was supported by all of our existing bank group, who increased their commitments. And through the bond process, we obviously achieved ratings from all three of the international rating agencies, BB, Ba3, and BB-, respectively, from Fitch, Moody's, and S&P. And as at the year-end, we had approximately EUR 400 million of liquidity in terms of cash and available funding through the RCF. So we're in a very strong position from a balance sheet perspective, and no debt maturing until 2026. So with that, I'll conclude there on the numbers review and pass that back across to Andy. Thank you, Neil. Thanks for that. So if we move to slide 18, I think I'll review the business performance in 2023 against four key metrics. And while it was clearly, as we keep emphasizing, a mixed year, it was a year with some substantial degree of progress as well. And so if we move quickly to slide 19, I think perhaps the most significant amount of progress is in our store network. You know, we exited the year with 668 more new stores, and just think about that in this simple way, that's roughly 15% more selling space and 15% more revenue opportunities as we enter this year, which as we improve our gross margins, clearly is an exciting sales to margin and EBITDA opportunity. Those stores were substantially within the Pepco portfolio. And so, you know, a very strong opportunity as we move forward. And we've also opened more stores in the U.K. for the first time in a while, and the Wilko stores are now all converted. And while there's still work to do on those, the early sales are good. So yeah, the store network, a real highlight of FY 2023. To slide 20, we also saw some significant strategic progress in a number of customer-facing parts of our business. So the Pepco Plus format, which we still feel will be our format of choice in Western Europe going forward. We opened a number of those in Spain and continue to make progress in understanding that format, which, as I say, could well be our format of choice where location allows us to in Western Europe. And the store refits, we've said a number of times that the actual execution's not been good, but the idea of renewing our stores in our core markets for our customer remain something we're very desiring of doing. And so, over this year, we'll review what went wrong with those conversions and look at revitalizing that program. And finally, the Poundland conversion effectively into a Pepco business by putting Pepco clothing and homewares into those stores is now well underway. And that will give us some very significant margin and cost-saving opportunities moving forward. Slide 21. You know, like any good discounter, we're focused on our cost and operational efficiencies, a virtuous circle of gaining productivity. Some headlines of 2023 would be the conversion of the Spanish business from Dealz to Pepco, the incorporation of our sourcing office, more integrated into the core retail business. And finally, some significant focus on labor and supply chain efficiencies, which are critical. And some headlines on those on slide 22. So, we're progressively moving towards the Oracle ERP system, both in stores and in supply chain, which will have some major benefits to us in simplicity and cost savings. And from a people point of view, investing in technology and also the capability and caliber of our team. One headline I'd draw out there is, you know, it's a brilliant metric to know that 81% of our store managers are promoted from within. It's both great from a cost point of view, but also from a corporate DNA perspective. Moving on then to slide 23 and 24. You know, a strategic sort of set of thoughts in terms of where we're moving. So, slide 24 gives you some of the headlines we've already given you on the highs and lows. And the lows really, I think, would be, first of all, the market has been very tough during FY 2023, but I think we know we've scored some own goals. I think we've tried to grow way too quickly, which has led us to ill-discipline from a project management and transformation point of view, and just fundamentally overstretched our colleagues and systems. We've highlighted at the Capital Markets Day that we need to make further improvement in our core store for EBITDA. You can only grow successfully and be rewarded for it if your core business is improving its profitability, and it hasn't done over the last three years, and we've been too slow to move towards our one business model. So with that in mind, slide 25, again, this is a reiteration of what I said at the Capital Markets Day, but for consistency, I'll remind you what I see as the things we need to do in this financial year. First and foremost, we must rebuild the profitability of our core business, and that really is on all lines. We must have a sustainable like-for-like growth, but most notably, we must recover the very significant margin dilution we saw during and post-COVID, and keep our costs under control. So delivering gross margin is very important, but also is a disciplined approach to growth, CapEx and risk. So you will, as we've said, see us open less stores this year, and those stores will be in markets we're more confident in. So you know, our new store program will deliver a better return on invested capital. Our CapEx program overall will be substantially smaller and will deliver overall a better return on invested capital. We will do very little renewal this year, which again, will reduce our CapEx. As a consequence of all that, as our margins expand, we'll still have good sales growth this year. We should see some good progress from a profit point of view. Spending less on CapEx, obviously therefore means as we move through this year, for the first time in a number of years, we'll see proper generation of free cash flow. We've said, and again, to reiterate, that we have made our position clear that we're committed to the UK market. It is the group's biggest market. It's also Europe's second or third biggest consumer market, so why wouldn't we want to be in the U.K.? We have a business that's got a very good sales line, and with the conversion program that we're delivering, we should start to see a gross margin, EBITDA margin expansion in the U.K. business... We've been too slow to act to move towards a single customer offer, and you'll see us progressively move more quickly towards that through this year. And we will also do a review of all the markets, and business channels we're in, and review any underperforming businesses. And we will continue to work to understand where Dealz is positioned within our business. So look, just to summarise, and then I'll talk a little bit about current trading. I still feel very confident we have a winning position in the market and a sustainable competitive advantage. And the slide 26 highlights the key points there. I mean, we have a-- despite the fact that we've seen little progress in our profitability in our core business, we still have an extraordinarily profitable 4-store model with a, you know, very privileged return on invested capital. And our stores are conveniently located and convenient in size to make our offer a very, you know, attractive to our customers, but also allow us to penetrate markets very deeply. The fact we have nearly 1,400 stores in Poland says the size of market opportunity in all the markets we enter. Our brand is super strong in Eastern Europe, and we're starting to see that brand recognition grow in Italy and Spain as well, so that's great news. And from a product point of view, we design and source every one of our products uniquely. So that gives us an opportunity to have privileged margins, but also to have unique product, and that's all sourced through our wholly owned sourcing office. So I think we do have very clear, sustainable competitive advantages. I'll just end by giving you my own thoughts on current trading. We've already hit some of the headlines, so I'm on slide 28. You know, it's fair to say that the sales environment remains challenging, but I think both our own sales and the market dynamics are improving. You know, the markets that we sell into, clothing and homewares, are starting to see green shoots of recovery, and also our own business, I mean, Neil's mentioned this, you know, we exited last financial year with really quite poor like-for-like sales, and every week they are improving. They're still in the they have been in negative territory on a one-year basis, but on a two-year basis, they're extraordinarily strong. So I think we feel reasonably confident about sales, but it's still an area where we see the market being somewhat challenging, but improving as we go through the year. Our margins are recovering well. We have clear line of sight, and so we are very confident about delivering the expected gross margin recovery. And that will be balanced against a desire and need to invest in our price position to regain our price leadership. But as I said again at the Capital Markets Day, I see our ability to invest in a selective, targeted way and still deliver very good improvement in our gross margins. So in all, I feel while it's still early days for this year and also early days for our renewed focus as a business, I feel cautiously optimistic for this year from a sales, from a gross margin, and a cost point of view. So, you know, this year should be a year of increasing, you know, confidence and progress as we go through the year. So just to the last slide, where we started, I'm very confident that this business has got a good future in the medium and long term. We remain focused on our ambition to be Europe's biggest and best discount variety business, and there are lots and lots of opportunity for growth for us, both in our core markets of Eastern Europe and increasingly in Western Europe, in Italy and Spain. And as we see our core business profitability come back to growth, which it will do this year, then you'll see us growing well into these new markets as well. So with that, I'll close and open it up to questions. I think at the start of the presentation, you were told how to ask a question, so I'll open it up to the floor. Thank you, sir. As a reminder, if you would like to ask a question on today's call, please signal by pressing star one on your telephone keypad. Our first question today comes from James Anstead from Barclays. Please go ahead. Morning, Andy. Morning, Neil. Just one question to kick off with. You basically said that October, November gross margins have been about 42%. And I think if I read it rightly, you had that very useful slide giving us gross margins by quarter for the last couple of years. And that seemed to show that the first quarter in both the last two financial years was the lowest gross margin of those, you know, by quarter for each of the years. So is there any reason why 42% would be effectively the base gross margin we should expect for the year ahead? I know you're not giving gross margin guidance, you're talking optimistically, but anything we need to be wary about and why this year might be different? Yeah. Look, I mean... Thanks, James, and, thanks for your question. Look, I think I'd answer it this way. I mean, first of all, as we've said, we do see our gross margins continue to progress. I mean, we do feel it's too early to give specific guidance, but in general terms, I would have the same observation as you, that we should see that gross margin continue to expand during this year. You know, the only caution I provide is that we are equally committed to reopening our price gap, as well as being committed to gross margin expansion. But again, as I've said, I see our ability to do both. So yes, I see that gross margin continue to expand, and yes, I see our ability equally to open up a price gap. So yeah, and as we said previously, we now have pretty much 100% visibility of our gross margins for this year. What we don't know is what our sales will be, and we also don't know exactly what amount of money we'll want to invest in pricing, but in general, directional terms, we should see that continuing to expand. That's very helpful. Just perhaps a quick follow-up would be. I think you obviously did some inventory markdowns for the fourth quarter, and I think back in October at the CMD, you know, were open that there was a possibility you might need to do more, perhaps at the end of the first quarter. It sounds like you're, you know, generally pleased with how sales are going. Are you any more, you know, confident either way about whether another markdown will be necessary for the first quarter? Good question. I think, like any good retailer, we have a budget that has markdown factored in, and we don't see... Right now, we're not concerned that we will need to make any markdowns above and beyond what we're budgeting. What I would say, though, James, is that what we're also doing is, and Neil had a good slide where he articulated the fact we've entered this year with significantly more stock than we need, and we will just progressively improve the quality of our stock through this year. So what I'm trying to say is, on one hand, right now, we're not anticipating the need to, you know, over-markdown. But what I'm also seeing as a sense of opportunity and excitement, we should see our quality of stock improve as we slowly and progressively work through old stock during the year. Does that make sense? I think that's really helpful. Thank you. Yeah. Yeah, it does. Thank you. Our next question now comes from Henry Kirk from Morgan Stanley. Please go ahead. Yeah, thanks very much. I had a couple of questions, please. First, in terms of store openings for the year, I mean, it sounds like one of the things you're doing is tightening up the sort of selection of locations to improve lease costs, et cetera. How many of the more than 400 stores you plan to open this year are sort of coming into that new regime, if you put it that way? And, the other one is your comps on like-for-like, I guess, do improve throughout the year or get easier. I was just wondering whether that's it doesn't seem like that sort of. Yeah, to presumably, that should mean your like-for-like growth should also continue to improve and presumably be positive for the full year. Is there any reason why we shouldn't expect that? Thanks. Well, look, I'll let Neil answer the first question then about new stores. On the second one, look, I mean, it, we're at a bit of a difficult point to sort of forecast sales. You know, I mean, the market, the markets we trade in are still in negative territory, and this is something we need to keep emphasizing because people, I think, generally don't understand just how tough the market environment's been over the last 12-18 months. You know, in CEE, in clothing and homewares, the markets were in double-digit decline during calendar year 2023 and the latter half of calendar year 2022, so, and they remain negative even now, but progressively improving. If that continues during 2024, which we hope it will, then the markets will start to become into growth. At the same time, you know, we feel we're making our business better, and as a consequence, I think that we feel our business will improve. Add that all up and, you know, we should be cautiously optimistic for next year, but it's still too early to sort of give any really detailed sense of direction on sales because, you know, our business is in negative like-for-like territory in the last two months, and the markets are negative. So, look, Adding that all up, I am optimistic for next year, but I'm not gonna get drawn into specific sales forecasts at the moment because it's still too early. But yes, I can see how you could draw a conclusion that through next year, our sales should progressively improve. I think that's a fair assumption. Yeah, I mean, just trying to... If I understand the store question, I think in terms of what we're doing, I think overall, we're obviously, as Andy said, more focused on, you know, quality of growth than sort of volume of growth in terms of store openings. So there is a bit more, you know, focus on what it is we're opening. I think as we mentioned, the capital markets day we were missing in terms of the target sales for new stores for a large part of last year. So we've, obviously, in the context of looking forward, we've taken down target store sales, which obviously puts some pressure on having to achieve better rent in terms of any new stores, just to make the unit economics work. So, you know, that, that's part of a qualitative way of improving the nature of the stores we're opening. I think we also said there was a bias to focusing on opening in markets where we already had a presence rather than expanding into new countries, so we create a stronger sort of network densities in those markets. So Spain and Italy are good examples of those in Western Europe as our biggest Western Europe markets. And as we mentioned, we're obviously planning to put a distribution center into Spain during the year, which in itself will support more stores in that market. I'd say those are quality. I think one thing to call out, we've opened quite a lot of new stores within the Poundland format, probably more than we've opened in recent history. A combination of two things. One, as Andy said, recommitting to the UK. I think secondly, we obviously had an opportunity through the unfortunate demise of Wilko to pick up a number of their stores, and we've opened, I think, 64. So we've opened about 86 stores in the Poundland business since mid-September through to date. Obviously, some were opened quite rapidly in terms of the Wilko stores to get them trading through Christmas. They will need some more material investment during the course of the year, but they are at least trading and open for business to those markets where they had closed. So I think there's just more. I I think we feel there's more discipline around the store expansion program than the past. I mean, we're, we're still planning to open, I think, as we've said, a net at least 400. So it's not a, you know, it's, it's not, not growth, it's just a, a more measured pace of growth with more, discipline around it. I agree, Neil. The only other thing I'd add is, look, you know, to some degree, the numbers this year are controlled somewhat by the pipeline that we inherited. So, you know, in the perfect world, it might be even slightly lower numbers than we've said here. But, you know, in general terms, it will certainly be a lot lower than last year, and it will be much more focused on areas, territories, which we're confident in. So, you know, by definition, it's a higher quality of store opening program this year. All right, thanks. Thanks so much. Thank you, and up next, we have Simon Bowler from Numis. Please go ahead. Good morning. Two for myself, if that's okay. Firstly, just with regards to the inventory, days target that you spoke to. Just how, how far through towards that kind of 105, 110 target do you expect to get this year and, particularly for the first half of the year? Have you, have you bought for negative like-for-like, or does inventory worsen from here before it improves? And then the second question was, I just given the step up in, in CapEx, and particularly the cadence of recent store openings, EBITDA is not the easiest thing to forecast, for, for your business. And I was just wondering if you could give any more specific guidance on that line item for fiscal 2024. I'll let—Hello, Simon. I'll let Neil take the second question. That sounds quite difficult to answer that. On the inventory. Look, I think, directionally, we've set ourselves the challenge of being much cleaner of inventory by the end of the year. We entered this year with low sales momentum, significantly higher inventory, both in stores and in the whole pipeline. So, you know, we are going to find the right considered balance between, you know, using our markdown budget to remove old inventory and equally just working through it, because as you know, a lot of inventory doesn't go, you know, old overnight. You can work your way through it. So I think our target for the year end will be to get that entry number down by, you know, a specific number, but progressively through this year, improve our inventory, both in terms of days and quality. And, you know, maybe, Neil, I'll be willing to give you a number. I'm not, but I think this year is a year of just improving that as we enter with, you know, a very significant challenge on our hands. But we're seeing it improve every day and every week, and I'm confident we can do that through this year. Yeah, and then on the DNA, over to you, Neil. Yeah, yeah. I mean, I haven't got the numbers right off the top of my head, Simon, but just to give a bit of direction, obviously, if you know, obviously, if you look at a couple of things in this year, we obviously, and we call that the capital markets, the impact of depreciation on, so from the New Look program, I mean, we spent about EUR 100 million round numbers. You know, that's obviously running over a sort of five-year period. As you know, we've kind of paused that New Look program. I think if, if and when we come back to that and the, the shape of the CapEx around that, which we would expect to spend less on the New Look program on a per store basis going forward, I think we, you know, I think reflecting on both the nature of it and B, what we spent. So, but, but for now, I think we'd come back and communicate at the point we picked it up. For now, we're kind of reviewing that. So, you know, that wouldn't be, you know, wouldn't expect to see the sort of incremental, you know, a reduction in, in spend around the New Look. In terms of the new store growth, obviously, we opened over 800 stores growth. So if you look at year-on-year, what we did last year to this year, I mean, the leases are typically 5, 5 plus 5 leases in the business, so you can probably work it out. I could probably come back to you offline if you want to clarify that, but I don't have the number right in front of me right now. I mean, we clearly expect to see a significantly lower CapEx spend during FY 2024 than FY 2023, which is a record number. So we'd expect to be significantly lower in this current financial year. Okay, cool. Thank you. ... Thank you. Thank you. And as a reminder, to ask a question, please signal by pressing star one. We will pause for a brief moment. Now, the question from Michal Potyra from UBS. Please go ahead. Hi. Morning, everyone. Thank you for taking my questions. I have two questions. One, if you could just maybe provide a broad estimate of your FY 2024 CapEx expectations, given the reduction in the number of new stores and lack of refurbishments. That's the first question. And the second question is, I have noticed you provided like-for-likes for Dealz as well. So perhaps you could give a little bit more color about the profitability of that part of the Poundland business, please. Thank you. Yeah, I mean, I mean, in terms of CapEx, I think we'd expect to be about EUR 100 million lower in FY 2024. So around about EUR 300 million versus the EUR 390 million last year, as a sort of indication. Obviously, just to pick up on Andy's point, we obviously have some CapEx from last year running into this year, just in terms of obviously we opened quite a lot of stores in the last quarter of the year, just to give some context around that, but that sort of magnitude of reduction. I'll maybe let Andy comment on Dealz. Yeah. Look, I think we have not given segmental profitability, and I'm not about to start it here, but it's certainly net net, not a significant drag weight on the overall group. It's still a relatively small business, so at a group, sorry, at a store contribution level, it makes, you know, some money. It's then got its own central overheads to cover and, you know, at that level, I'm not gonna give you the number, but it's certainly not a significant drag weight on the business. The most important thing for Dealz, as we said at the Capital Markets Day, is this year is about explaining where it fits into our strategic direction. In that context, as Marcin presented at the Capital Markets Day, he's got this nice little phrase of 35, 25, 10. You know, the business, by the end of this year, needs to be making good progress towards a gross margin of 35%, a cost of business of 25%, and therefore, an EBITDA margin of 10% against a strong sales. You know, and if we get towards that, we can then decide how we progress from there. So it's not... In summary, the business is not a particular drag on profitability, and this year's focus is on really understanding to ourselves and then explaining to you how we see Dealz growing in the future. Okay, thank you. Just maybe following up on the, on the CapEx question. So it's actually just EUR 90 million reduction from this year, but your number of stores will be significantly less, right? You had more than 800 gross this year versus 400, and you don't have refurbishment. So what's going to be the remainder of the CapEx? Yeah, but as I explained, in terms of the CapEx, obviously quite a lot of the stores where they, there's a rollover from the end of last year into this year, given the timing of a lot of the store openings. That will be the main point, right? Also, to give some context, if you look at the Poundland stores, for example, they're about double the size of a standard Pepco store. So a typical Poundland store is about 1,000 square meters versus about 500 for Pepco. We've opened 86. Well, so there's an impact from that as well. So it's not just about the store numbers, it's about the space. And we haven't given that information out, but it's a combination of those reasons. Yeah, I mean, the store, I think Neil is exactly right. There's some rollover from last year. The average store size and territory means the CapEx per store will be somewhat higher this year. And the third thing to say is, remember, there's quite a lot of IT and maintenance CapEx, but so that's just a sort of almost a fixed element to CapEx. Yeah. And I think, I think just in terms of where the stores go, again, as we call that, the Capital Markets Day, there's a higher CapEx spend per store in Western Europe than Central and Eastern Europe, and the Pepco Plus stores are slightly larger. So a combination of all those things is where we expect to be this year. Now, we're obviously still looking at the opportunity for improving on the CapEx spend per store, again, which we mentioned the Capital Markets Day, but as we sit at the moment, that's the sort of broad expectation for the CapEx outturn for this year. Thank you. You now. Thank you. And from JP Morgan, we have Elena Jouronova with our next question. Please go ahead. Hi. Good day, everyone. Couple of questions, please. First and foremost, on the payables, I think the days' payable ended up being longer than expected, so it generated positive contribution to cash flow last year. Why was that? And was there any change in the way in your payment terms with suppliers, maybe something related to reverse factoring? That's gonna be the first question. Well, I think as we've said before, we put in place a supply chain finance facility last year. And we've obviously sitting about EUR 400 million. It's managed through Citibank. We have a large number of our Asian suppliers sitting on that. The year-end utilization of that was about 200, and just slightly over 200 million EUR, with a working capital benefit of about half of that, so about EUR 120 million, which extends payment terms for us from about 60 to 120 days. The payables are shown on the balance sheet, as trade payables. So there's nothing. I I think we've mentioned this before, and that was something we've been trying to do to improve the working capital profile of the business. Something that we didn't have in place for the full year, FY 2022, at the same size. So that is a initiative we expect to continue to grow to support our supplier base and improve and manage our working capital. Okay, that's clear. Thank you for reminding. Then, moving on to Poundland. I noted a comment in your press release about some disruption to sales in Poundland from the change of assortment and change of range of clothing, in particular to the Pep&Co range. And that was a bit surprising. I was just trying to figure out what's going on there, why it would have caused the disruption. Usually, these things should be well prepared. And also, maybe just a reminder, over time, what sort of improvement in gross margin do you expect in Poundland after you've changed the range of clothing and general merchandise to suppliers of Pepco? Yeah, look, I mean, first of all, I'm not quite sure what benchmarks you're using to suggest that disruption's unusual when you're changing every single element of your clothing supply chain from one supply chain to another. I would say in my experience, some degree of disruption is unfortunately usual. You know, every single item that we're selling in apparel has moved from one vendor to another vendor, often to a different country of origin. And therefore, while disappointing, there is some degree of disruption through the supply chain, but also the disruption at the shelf edge. You know, the balance of kids' wear versus adult wear is different between the Pep&Co and Pepco. So, you know, there is some degree of disruption, and as I say, I wouldn't beat myself or management up too much on that. It's sort of an inevitability. In terms of where this ends up longer term, Elena, in terms of gross margins, I'm not gonna give a specific forecast. But in terms of gross margin percent, it's a substantial improvement in gross margin percent between the Pep&Co range and Pepco range. So, you know, and that should be seen to be flowing through, certainly, in FY 2025. I mean, I think this year, the overall principle we're operating to is disruption balances off against the underlying improvements. And so we ourselves did think we would have some degree of disruption and have, in our own thinking, balanced disruption versus improvement, and then those should flow through much more freely as upsides in FY 2025. I think the only thing I'd add to Andy's comments is just worth remembering that the Poundland business, approximately two-thirds of that business of the revenue and business is in FMCG. So, you know, as long as we continue with that category mix with FMCG being the driver in that business, there's inevitably a drag on the margin we achieve in Pepco, just due to the category mix, given the structural lower margin of the FMCG category that we trade. So just as a reminder on that. Thank you. And also as a reminder, the range of general merchandise, I think you were supposed to start changing that end of calendar Q2, start of calen-- No, no, sorry, end of calendar Q1, start of calendar Q2, 2024. So is that still going to happen, and do you think there's also a risk of some disruption to- Yeah ... I don't know, either or profitability? Yeah, again, absolutely, that's the timetable still, and to reiterate what I said just now, Eleanor, yeah, absolutely. I think that we are thinking of FY 2024 for Poundland as being a balance of the upsides that we're seeing in gross margins and sales may have some balance against some degree of disruption. But net-net, I think those two balance off, and the benefits will come through in FY 2025. Again, as Neil says, let's be balanced in two ways about this. The vast majority of Poundland sales will not be disrupted because of its FMCG goods. And the second thing is, I keep pushing back. I've never seen a scale program like this done without any disruption, and I'd love you to give me some benchmarks where I could go and learn if you've seen things happen perfectly every day. I will. And then the final question is gonna be about Wilko stores. So first results after opening, how do sales densities look like versus your regular Poundland stores? I think the stores in general are a bit larger, so just wondering if the range of products you're able to offer is adequate for the size of the store, or you would need to think of some expansion of assortment. Yeah, look, I think it's worthwhile explaining the practicality of what we've done. We haven't really converted... I mean, I'll contradict what I said earlier in the headline. You know, we haven't actually converted any Wilkos into proper Poundlands yet. You know, we've changed the fascia, but actually, what we've done so far is, in effect, merely put our goods into a Wilko store. We haven't done any internal revamps of any, you know, quantity yet. We'll be doing those post-Christmas. We were just desperately keen to get the stores reopened pre-Christmas to allow shoppers to enjoy our products. The actual CapEx program and the refit program, where relevant, will happen in the early part of next calendar year. I'm not going to give you any details on what's happened inasmuch as, you know, it's not really even started, to be honest with you yet, Elena, the proper revamp program. Okay. Thank you. Thank you. Due to time, I'd like now to hand the call back over to Andy Bond for any additional or closing remarks. Yeah, look, I mean, all I'll say is just a reminder of what we've talked about. I mean, I think FY 2023 was a mixed year. We stated a subtle but important change in direction at the Capital Markets Day. I I feel that we're getting to grips with the activities we need to deliver well. I feel we're starting to see good progress against the things we want to achieve, and I look forward to a progressively better FY 2024 as we go through the year. And I appreciate everyone's time this morning. Thank you.