good morning, everyone. Welcome to The Warehouse Group's FY26 annual results presentation.

Thank you for joining us today. I'm John Journee, Chair of The Warehouse Group.

Joining me are Mark Stirton, our Group Chief Executive Officer, and Stefan Knight, our Group Chief Financial Officer. I will begin with the board's perspective on the year before handing over to Mark to take you through the group's performance and progress.

Stefan will then cover the financial results in more detail, and Mark will return to discuss the year ahead. As always, there will be an opportunity to ask questions at the end of the presentation.

Looking back at FY26, the board is encouraged by the progress made on our turnaround yet this year. Despite a challenging retail environment, the group delivered a significantly stronger result.

Reported sales were just over $3 billion, down 1.9%. That reflects the additional 53rd week included in FY25.

On a comparable 52-week same-store basis, sales increased 0.4%. Gross margin increased by 40 basis points, and the cost of doing business fell by 40 basis points, restoring operating leverage and lifting operating profit to $22.6 million, up from $1.3 million in FY25.

Strong cash generation allowed the group to reduce net debt by $79.1 million while increasing investment in our store network. Across our retail brands, Noel Leeming and The Warehouse Stationery delivered much stronger returns.

The Warehouse also improved, however, profitability remains below an acceptable level, and its recovery remains our most important priority. Overall, the FY26 result was driven by actions taken within the business rather than any meaningful recovery in market conditions, giving the board confidence that the changes underway are gaining traction and laying the foundations for further progress.

While we're encouraged, we're equally clear about the work still ahead. It is important to maintain our momentum in the turnaround, and for that reason, the board has decided not to declare a final dividend for FY26.

Our immediate priority is to rebuild earnings while retaining the financial flexibility needed to support the turnaround and the future growth of the business. The board recognizes the importance of dividends to shareholders and remains committed to returning to paying dividends in the future.

On behalf of the board, I'd like to thank Mark, the leadership team, and our team members. The progress we've made this year is a direct reflection of their hard work and commitment to our business and our customers.

I would also like to thank our shareholders for their continued support. I'll now hand over to Mark.

Thank you, John. Kia ora.

My name is Mark Stirton, Group Chief Executive Officer. I will step through the market conditions we faced, what the group achieved during the year, and the work underway to deliver further improvement.

FY26 was another difficult year for New Zealand consumers. While consumer confidence showed signs of recovery by the end of summer, the improvement proved temporary as international conflict drove higher fuel prices and added further pressure to household budgets.

Confidence recovered somewhat towards the end of the year, but not enough to drive a meaningful recovery in discretionary spending. This year, unemployment reached its highest levels since 2015, and inflation increased 4.1%.

With real incomes declining and the first OCR increase in three years adding further pressure, customers became increasingly focused on value. Our customers bought more items at lower selling prices as we protected the consumer from inflation, especially on everyday essentials.

This year reinforced the importance of not waiting for an economic recovery. Instead, we remain focused on the factors within our control, like delivering compelling value, relevant ranges, and reducing costs.

As John said, we have spent the year lifting margin and execution. For the first time since FY21, gross margin increased and cost of doing business decreased at the same time, enabling us to begin restoring operating leverage with broadly flat sales.

This year, we made substantial progress strengthening the balance sheet. Better inventory management improved cash conversion, allowing us to invest more in our stores and reduce debt.

As a result, our financial position is more resilient than it was 12 months ago. At the end of FY25, we set out a clear agenda for the year ahead.

This slide shows the progress we've made against each of those commitments. We achieved the reduction in overheads.

Gross margin improved with pleasing margin expansion in Noel Leeming and Warehouse Stationery. The Warehouse full-year gross margin was impacted by the clearance of aged inventory in the first half, but encouragingly, gross margin exited the fourth quarter ahead of the prior year.

We unlocked significant working capital and maintained discipline around investment with capital reweighted towards stores and our supply chain. With the board support, we have established our retail-led strategy with clear priorities underway.

The opportunity ahead is to translate these operational gains into sustained earnings and share growth. As we talked to at the half year, we are rebuilding the retail fundamentals that underpin performance and execution.

This includes how we buy product, move it through our network, and sell it to our customers. Starting with plan and buy.

Our aim here is to improve inventory productivity, increase sell-through, and grow our gross margins. This year, we reset our buying and planning disciplines and capability, focusing on our priority categories of home, apparel, and health and beauty, all showing good improvement.

We refined grocery around a clear purpose as a value-led top-up shop. During the second half, we simplified the grocery range to focus on the products customers buy most often, improving category performance while delivering more compelling value for our customers.

These changes helped reduce group inventory. The second area is move.

Our supply chain represents one of the biggest opportunities to reduce costs and support future growth by improving product availability for our customers. We've established a dedicated leadership role, completed a full review, and have several initiatives underway, including a new freight partner.

As a result, stock turns have begun to lift. The third area is sell.

By creating better customer experiences, we expect to grow share over time. Across our three brands, we are investing in stores and visual merchandising, from upgrading lighting, flooring through to opening our first flagship store in Noel Leeming.

We also recently launched This is Warehouse Country, our new brand platform built on what customers have loved about The Warehouse, The Warehouse you always knew. Together, these initiatives help support positive same-store sales growth in a challenging retail environment, but we know our stores represent the biggest opportunity to elevate customer experience, which is central to our new strategy.

While we've made good progress improving the fundamentals, our focus now is turning those foundations into winning back share. Our growth opportunity looks different in each of our brands.

At The Warehouse, that means driving more traffic, improving product relevance and value, investing in stores, and growing in priority categories. At The Warehouse Stationery, it's about growing business and education, expanding services, and reaching more customers through new formats and digital channels.

At Noel Leeming, the opportunity is to win share in priority categories, attract the younger customers, differentiate through expert service, and continue growing both our store network and online offer. Better performance and growth matters, and so does staying true to what we believe as a business.

Looking after our people, our communities, and environment has always been central to our DNA. Our stores play an important role in our communities they serve, supporting local fundraising.

This year, we contributed $1.9 million to charities and community groups across New Zealand. 90% of our electricity was matched by generation from solar farms, helping lower emissions and provide greater certainty over future energy costs.

We were also proud to receive a Sustainability Leadership Award for The Good Drop, our clothing reuse and recycling scheme in partnership with The Salvation Army. We also help customers recycle electrical products and soft plastics, something we see as part of our responsibility as one of New Zealand's largest retailers.

Our employee promoter score declined this year, reflecting the significant change that we've gone through as a business in this turnaround. We've asked a lot of people this year to do a lot of hard things, and I want to thank them for everything they've done to help put the business in a stronger position while continuing to care for our customers every day.

I mentioned our new brand platform. Built on real stories, it's a bold reminder that The Warehouse is woven into the fabric of New Zealand.

It's also a signal of confidence. We're back.

We're giving customers more reasons to reappraise us. This is just the start of the next chapter for The Warehouse, and we've had a great response from customers and our team members so far.

I'll now hand over to Stefan to take you through our financial performance before I return to discuss the year ahead.

Thanks, Mark, and good morning, everyone. I'll take you through the group's financial performance for FY26, including margin and costs, the performance of each brand, and how the improvement in earnings translated into stronger cash flow and a stronger balance sheet.

Let's start with the group result. Group sales were just over $3 billion.

Reported sales were down 1.9%, but that comparison includes the extra trading week in FY25. On a comparable 52-week basis, sales were broadly flat, down 0.2%, while same-store sales increased 0.4%.

The most important change was in the quality of earnings. Gross margin increased 40 basis points to 32.6%, and our cost of doing business reduced by $29.8 million, or 3%, down to 31.8% of sales, and I'll go through the main drivers shortly.

Together, these movements lifted operating profit to $22.6 million from $1.3 million last year. Adjusted net profit after tax improved to $13.5 million, and reported net profit after tax was $11.2 million, up from a reported loss of $2.8 million in FY25.

Profitability remains below where we want it to be, but FY26 shows that better margin and cost discipline can rebuild operating leverage even when the top line is broadly flat. Turning to gross margin.

The group gross margin increased 40 basis points to 32.6%. Importantly, the full-year improvement was delivered through a 90 basis points uplift in the second half.

The first half was affected by clearance of aged stock, particularly at The Warehouse. As the year progressed, that pressure reduced and underlying trading margins improved.

The Warehouse was the main driver of the fourth-quarter recovery. Its fourth-quarter margin increased to 36.9%, led by home and apparel.

Noel Leeming and Warehouse Stationery also improved through the year, the second-half uplift was broad-based across all three brands. The focus now is to sustain that progress through better ranges and better planning, stronger full-price sell-through, and continued pricing discipline.

This slide shows why the combined movement in margin and costs matters. In recent years, the gap between gross margin and the cost of doing business narrowed and placed sustained pressure on profitability.

In FY26, both levers moved in the right direction. Gross margin increased while the cost of doing business reduced as a percentage of sales.

Together, this lifted operating margin to 0.7%, a 70 basis points improvement on FY25. At our current sales base, every 10 basis points of operating margin represents approximately $3 million of operating profit.

Small changes in these two levers therefore have a meaningful earnings impact. Turning from margins to costs.

The cost reset program delivered a $29.8 million reduction in the cost of doing business. The cost ratio improved by 40 basis points to 31.8% of sales.

Support office costs reduced by $21.9 million, or 8.8%, reflecting the restructure and a more disciplined operating model. Employee expenses reduced by $6.9 million.

Support office savings and the TCS partnership were partly offset by higher wages in stores and distribution centers, mainly due to wage inflation. IT costs reduced by $12.6 million through lower support charges and tighter project activity.

Depreciation and amortization reduced by $9.1 million as earlier programs continued to amortize and capital expenditure remained disciplined. The FY25 comparison includes the additional trading week, which contributed to the year-on-year reduction.

Even allowing for that, the results reflect meaningful structural savings and tighter management of the cost base. Turning now to The Warehouse.

Sales were $1.8 billion. Comparable sales were down 0.7%, while same-store sales increased 0.6%, supported by higher unit volumes as customers continued to focus on value.

The brand reduced its operating loss by $4.7 million to $7.5 million. The result improved through the year with a stronger second half and a clear recovery in gross margin during the fourth quarter.

Home and apparel led that recovery. Lower foot traffic was offset by improved conversion and larger baskets, making each customer visit more productive.

Online sales were lower, although improved online margins more than offset the sales decline. The direction improved in FY26, however, the immediate aim is to return the brand to profitability.

Home and apparel are important to The Warehouse's profitability, and both delivered improved margins in FY26. In apparel, the improvement was supported by better sell-through and a greater proportion of sales at full price.

In home, margins improved while we continued to clear aged inventory. Home textiles led the result, supported by improvement across a number of other home categories.

This reflects better buying and planning discipline, stronger ranges, and price points. The opportunity now is to build on that progress by improving ranges, increasing full-price sell-through, and delivering more consistent margins across both categories.

Warehouse Stationery returned to sales growth and delivered a significant improvement in profit. Sales were $228 million, up 2.5% on comparable weeks, with same-store sales increasing 2%.

Foot traffic was slightly higher and conversion also improved. Operating profit increased by $7.7 million to $15.9 million, with the operating margin increasing to 7%.

This reflected stronger margins and disciplined management of costs and inventory. Growth was led by print and create, art and craft, and office furniture.

Print and create benefited from growth in digital printing, copying, and personalized products, while stronger ranges supported art and craft and office furniture. Gross margin strengthened throughout the second half and all categories delivered higher gross profit for the year.

The brand also continued to invest in its store network, opening Wellington Central during FY26, followed by Whitianga at the start of FY27. Noel Leeming delivered a significant improvement in profit despite broadly flat comparable sales.

Sales were just over $1 billion, down 0.2% on comparable weeks, while same-store sales were down 0.5%. The prior year included commercial sales that did not repeat, with the underlying retail business growing in FY26.

Operating profit increased to $21.8 million, with operating margin improving to 2.1%. This reflected disciplined pricing and improved sales mix in a highly competitive market.

Appliances and core technology performed strongly, supported by new brands, commercial wins, and the Windows 10 and 3G transitions. Online was a particular strength.

Sales increased 13.2% to $133 million, supported by improved traffic and conversion, and now account for around $1 in every $8 of the brand sales. The priority from here is to return Noel Leeming to sustainable top-line growth while maintaining market share and margin discipline.

We'll build on the brand scale and continue to make service the clear point of difference for our customers. The improvement in earnings and working capital translated into strong cash generation in FY26.

Operating cash flow was $194 million, supported by improved trading performance and disciplined management of inventory and working capital. After funding capital expenditure and lease payments, the group generated free cash flow of $79 million.

This cash generation reduced year-end net debt to $17 million. Lower borrowings also reduced bank interest costs to $2.7 million, down 60% on FY25.

The group remained compliant with its banking covenants and has sufficient committed facilities available. The balance sheet is in a much stronger position and gives the group greater flexibility to invest selectively in the business, support the turnaround, and manage future capital requirements.

A key contributor to that cash outcome was tighter inventory management. Closing inventory reduced by $37.9 million to $439 million.

The reduction was mainly across The Warehouse and Warehouse Stationery and included a $19.7 million reduction in goods in transit. Aged inventory, defined as stock over six months old, reduced to 21.8% from 23.1%, and group stock turn improved to 4.7 times from 4.6 times.

We also increased inventory provisions to $18.9 million, or 4.7% of inventory cost, to address selected aged, slow-moving, and end-of-life stock. Inventory is lower and moving faster, but further improvement remains a priority.

I'll finish with how we invested in the business. Total project expenditure was $27.8 million in FY26.

Around 3/4 of this was capital investment with spending focused on stores, property, digital capability, and the supply chain. Key investments included new and relocated stores, improvements to lighting and heating and cooling, and the rollout of digital screens across the store network.

Spending on software and project operating costs was lower. The focus has been on practical investment that improves the customer experience, supports retail execution, and strengthens the foundations of the business.

To summarize, FY26 delivered stronger earnings, improved margins, a lower cost base, and significantly better cash generation. Inventory and net debt were also reduced.

The group enters FY27 with a stronger financial position to invest selectively in growing the brands and improving returns. I'll now hand back to Mark to cover the priorities for the year ahead.

Thanks, Stefan. I'll finish with an update on current trading and our priorities for FY27.

Trading in the first eight weeks of the year has been encouraging, with group sales broadly in line with the prior year and margin performance ahead. While we're seeing signs that customer confidence is improving, we remain cautious given the upcoming election and ongoing global uncertainty.

We can't control those factors, our focus remains firmly on the areas within our control. At The Warehouse, that means continuing to improve margin performance by improving the retail fundamentals while providing great value for our customers.

The fourth-quarter result gave us some confidence that the changes underway are gaining traction. The challenge now is to deliver those improvements consistently.

Across the group, we will maintain the cost and working capital discipline that helped us rebuild a stronger financial performance in FY26. At the same time, we will invest and grow each of our brands.

We will hold an institutional investor day in November to set out our longer-term retail-led strategy and our pathway to stronger, more sustainable returns. Thank you for listening.

We look forward to providing further updates on progress we're making. We'll now take any questions.

good morning, Mark and Stefan. Thanks for the presentation.

Just first one is on the Red Sheds and that strong gross margin that bounced back in Q4. You can see it's improving, but it's still tracking well below your long-run average level for that division of about 38%.

Just a couple of questions there. Can you provide a bit more detail on what drove that sharp lift in gross margin through the fourth quarter?

I guess assuming foot traffic and sales remain broadly flat through FY27, where do you think you can get margins for that business?

Howzit, Kieran? I can take that question.

I think it's just a combination of things. Like we said, is that our home and apparel, which is our higher-margin categories obviously, as we've been dealing with quite a lot of distressed inventory for quite a long time, which suppresses your margin as you have to clear that inventory at quite distressed prices.

That obviously always pulls down your margins. I think you're referring to the 38.

I think that was in 2022, which was post-COVID. It was quite a big year.

I think also the mix of grocery within that year wasn't at the same levels as we are now, and obviously that has a combined mix issue on margin. We almost look at it at a category-by-category level.

That's why we said on the grocery side that we've made some choices to be a more of a top-up shop there, and that's helped us also just deal with some of the long-tail product that was hurting our margins there. Also customers weren't really buying into.

I think it's just a combination of things. As we get that home and apparel, which represents a huge portion of the business, that'll come up.

Also, I think we've done really well in the blue and the Nolls business to lift their margins as well. I think you would have seen that overall as a group.

It's the combination of all three businesses that we've got to work on simultaneously. In the red business, it's really trying to get those major contributing categories to acceptable margins, which is at those historic levels, which, from everything I'm seeing and that's all within our grasp.

Some of it is going to come through just from better buying. Some of it is just going to come through from selling more full-price items and not discounting as much.

All right. Thanks.

The 38% is your 10-year average level that I was referring to. I guess just to answer the second part of that question, can you just give a bit of a steer if activity levels and sales remain broadly flat for the year ahead, how much gross margin uplift do you expect to see in red?

We can't give you that.

Just through self-help measures?

Yeah. We're not

You can't give any sort of indication of whether there's further improvement to come through self-help?

No. I think nothing more than what I've said,

yeah. All right.

Sure. I guess just the next one is on opex.

Your cost of doing business was down 3%. Looking forward and thinking about the annualization of that cost-out that you've talked about previously, do you think getting cost of doing business to below 31% of sales is possible in FY27?

Or do you still see that as more of a medium-term target?

Kieran, I'll just get Stefan to pick that one up.

Hey, Kieran. Look, I think that's probably a medium-term target.

If you look at a highly inflationary environment at the moment, our goal is to see costs increase at a rate slower than the rate of inflation, lower than the rate of what we'd expect to see sales grow at, so that we're getting that continuing improvement. I think getting it below 31% is still a medium-term aspiration.

We still see plenty of opportunity, but it is quite an uncertain environment out there, and particularly with inflationary costs coming through that will have some impact.

Okay. Thank you.

Then just maybe the final question on Noel Leeming. You've sort of called out that you're looking to return that business to top-line growth.

Looking sort of back in time, I think your sales are down about 10% compared to where they were five years ago. From what I can tell, you seem to be losing market share to the likes of JB Hi-Fi and PB Tech in New Zealand.

Can you maybe just talk about some of the initiatives that you're putting in place to grow that top line and maintain market share and kind of what you're seeing there in the competitive space?

I'll take that, Kieran. Your observations are right.

JB Hi-Fi, as is a great competitor, and I think what they're doing, obviously, they're opening a lot of stores, which obviously compete with, in a flat market, if it's always going to take a level of share. I think what we've recognized is that we're going to invest more in our store environment.

I think our Queen Street store is a good example of, I don't know if you've had a gap to go down, but it's really just a more younger, sort of more contemporary look and feel for Noel Leeming, which we're hoping would also start to attract more of the under 35s, which is a key category for us and customer group for us in Nolls. I think that's one aspect to it, which we know that there's certain categories in the Noel Leemings set which we do very well on hard good, the bigger items, but the smaller sort of audio types side of the business, those are opportunities for us to go and take on that segment.

I think there's opportunity, but also we haven't really opened a lot of stores. I think what you'll see is that we're going to start opening more stores, which will also help that top line and obviously help take back market share.

Cool. Thanks.

Can you give any sort of steer on maybe the five-year runway, three- or five-year runway for for store openings there?

No. We can't because it's not public, it's only stuff that we've put in the release.

Just

basically, Kieran, it's John here. Basically, what Mark's signaling is ambition to get back into store growth.

Obviously, that's a balance between finding the right sites and managing the economics and also what our network looks like and the catchments are changing. That is a moving feast, but basically the detail is not able to be shared, but the intent is there.

Cool. Thanks, guys.

Hey, good morning, guys. Just a couple of questions.

Maybe starting with red margins again, and looking at that second half.

You had quite a strong uplift in gross margin, but at the same time, your revenue was down 5% year on year. Obviously, you've got the week difference, but you've also had your gross profit dollars down as well.

I guess the question is, how confident are you that you can hold on to that gross margin uplift in an environment where you can grow the top line as well, or do you have to give up price to get that top line moving again? Howzit, Paul?

It's Mark. I think it's a combination of things.

I think your sales are a function of the quality of sales. When I looked at the quality of the sales that we had in the base, I don't think all the quality of the sales that we had sold in the past was necessarily what the shape we wanted to be for the positioning we have as a business.

I think some of that is the third quarter was tough for every retailer. That was when the fuel crisis, if you recall in January, fuel crisis came along, the interest rates came along, and you saw, I think on my first slide was on consumer confidence, you can see the cliff it just fell off.

The sort of fourth quarter, which is where we sort of saw a resurgence, if you want to call it that, was really you start to see the cliff come back up again, and that's as consumer confidence starts to come back. People got more familiar with sort of paying more at the pump and various other aspects.

I think to answer your question, I feel, and that's why we said in the sort of trading guidance, we've sort of been able to hold sales flattish, but we really are starting to see the fruit of selling more full-price items, and so our margin expansion is a bit better than that.

John here, Paul. Just reinforcing the point that Mark made earlier, too.

It's also the shape of the business that's changing, closer to the core customer of The Warehouse and what we have historically provided their needs, and that's in our home, apparel, and beauty areas. As we move those categories up, the margin mix naturally improves along with the specific aspects around cost of doing business and pricing strategy.

Cool. Thanks.

That makes sense. Maybe just the second one.

It was a pretty strong cash flow outcome this year, and a lot of that was the work you guys did on inventory. Your stock turns are 4.7 times.

You talk about wanting to get that better, but I guess the question is, how does that improve for next year? Do you guys have a target around where you want to get inventory to?

Because it can be quite powerful cash flow generator for you guys at this point in the cycle.

Thanks, Paul. I'll get Stefan to pick that one up.

Yeah. Hi, Paul.

Look, we're really pleased with the cash flow that we did generate, and you can see the impact of that obviously with a significant reduction in debt levels. I would just point out that our average debt levels across the course of the year were significantly lower as well.

When we're looking ahead and we're thinking about cash flow, the improvements that we're seeking, first of all, come from trading continuing to improve. We said the profit we've delivered this year is an improvement on last, but it's not where we set our ambition, we want to improve that further.

I do think there is further opportunity to reduce our inventory levels. Having 21% of our inventory still over six months aged is still too high.

I can't give you specifics, but what I can tell you is there's definitely opportunity to improve that further. Paul, we've done quite a lot of work on this, and if you just take 15% off and you've quite say that it's over six months old inventory was 5%, that would turn your stock turn to 5.5.

You can release a lot of cash if you're just more optimized, but there's quite a lot of work that needs to happen. The first chunk we've got out quite quickly, and the second chunk will come out slightly slower.

We did take some of extra provisions on inventory where there's some distressed inventory we actually just need to get rid of. You would have seen that in the results as well when you analyze it.

Part of that is also just to deal with some of that really distressed stock that we can't get rid of.

Cool. Then maybe related to that, when you guys think about medium-, long-term capital structure for this business, do you want this business to be in net cash before you bring back dividends?

Or is that what this business needs to be? Or do you think there's a place for debt in this business still?

Look, I can pick that up if you like. Ultimately, capital structure is a decision for the board.

We will lay out some further detail of that later at an investor day. I think what we would say at a holistic level is we're much more comfortable with debt levels in the lower levels like they are now.

If you look at our retail peers, it's pretty common for people to sit at either very negligible levels of debt or slightly net cash and just use funding for working capital type facilities. That's some of the considerations that we'll be working through and can share more on that in due course.

Cool. Then maybe if I could just sneak one last one in.

Capex was down heaps this year, and it's sort of hard to get a read on where that'll land in '27. If there's anything you can give us there, that would be good.

Yes, Stefan.

Yeah. You can see capex has been quite low for, in fact, the last two years, and I think that's been a very deliberate decision as we've been working through the refresh of the strategy and getting the business back focused on turnaround.

What you will have seen in the current year is more of that spend going towards stores. As we look ahead, capex levels will be higher.

I think they are lower than a long-run average, but we wouldn't be looking to take them back up to where you saw them back in FY 21, 22, 23. The balance of that investment will still be heavily weighted towards investing in our stores.

That hopefully gives you a bit of a flavor for how you should think about it.

All right. Thanks, guys.

I'll leave it there.

Thanks, Paul.

The

Hi, Mark and Stefan. Just a follow-on from Kieran and Paul, I'll just change to talking about that November investor day.

Can you give us a sense of what investors should expect, particularly whether there'll be any medium-term financial targets or a clear framework, or will it just be a strategy

Yes, Stefan, do you want to outline what the broad intentions are in

there? Absolutely.

We've spent the last six months working with the board to refresh the strategy. The first part of it will be very much around what is that strategy around how we're going to win in stores and support that through a digital experience.

We'll be laying that out across the three different brands. We will have some longer-term financial aspirations and also some detail on things like capital structure, etc.

I don't want to give away all of our secrets yet. We'll keep our powder dry for that, but I think there'll be a meaningful update that investors will be able to get greater clarity on what to expect over the kind of the next three to four years.

Awesome. Thank you.

One more question on the cost of doing business. I saw that $29.8 million reduction.

Obviously, a big chunk of that is the additional week in FY25 coming out. I think there were some one-off timing benefits from the TCS.

I'm just looking at what do you think the underlying exit cost base in FY27 looks like?

Yes, Stefan, do you want to take that again?

You're right. The 53rd week has an impact.

I think in the vicinity of $15 million to $16 million. There is some impact from TCS.

As we've worked through this co-source model, there is a one-off gain within this year, which is really around some mismatch between the timing of when some of our people came out of the organization and when some of that work moved across to TCS, so that won't repeat next year. That said, I think I'd go back to the comments I made earlier, which is overall, we will expect to see CODB growing in a high-inflation environment.

I think it'll be hard to believe that that would go down, but growing more slowly than inflation. Some of the changes we have made, we don't get the full benefit of those this year, and we'll get some further benefit into next year.

Headline message there really is around cost growth, but at a rate lower than inflation.

Awesome. Thank you.

Thank you for all for being here today and for your questions. We remain confident in the opportunity ahead and look forward to updating you on the progress of our turnaround in due course.

Thank you very much.