Bapcor Aktie

Thank you for standing by, and welcome to the Bapcor Limited Turnaround and Trading Update. [Operator Instructions]. I would now like to hand the conference over to Mr. Chris Wilesmith Chief Executive Officer and Managing Director. Please go ahead.

Thank you, Ashley. Good morning, all, and thank you for making the time. Well, it is undoubtedly seen the update that we've released to work the market. That's really pleasing about to talk about the things that we're actually seeing in the business starting to emerge, but we thought it was absolutely appropriate to reach out and to update the market on also the impacts that are being felt from what's happening globally.

The announcement very clearly has given you a sense of the momentum change from the turnaround announcement. Notwithstanding 2 days after that, the global impact started occurring from the war in the Middle East. I wanted to really give you a sense of the actions that we talked about and have started taking in the business, having a material impact on the performance in each of the trading divisions.

You'll see that in the actual announcement that we provided very clearly, the difference in the momentum that we're seeing post starting the very early introduction of these initiatives across the business. When we first started talking back in February, I talked about the critical importance of having a team-led turnaround. I talked about focusing on the customer and actually creating an environment where we were lighting up our trading engines.

There's no question that what changed from that point, the impact on consumer, the cost of fuel at the barrels are hitting discretionary spend has had an impact. So I equally would say that the actions we've taken, and I would like to share some of the details that is actually supporting what we're seeing in terms of the very clear improvement in the post-February results, notwithstanding all of those challenges. I'm happy to report that customer measures across the business in the major trading divisions are actually improving significantly.

We talked about when we last met turnover rates of 50% and 40%, and I can say to you that we are rapidly seeing a decline in turnover in the organization. And I'm very pleased to say that many leaders that are now in place have been so highly regarded that we're seeing really high-quality team members coming back into our organization. But of course, we'll continue to build momentum, but just a tremendous start to see some of these take people coming back into our business that were part of the build of the success story of Bursons right from the Genesis.

Engagement programs have been commenced across the organization with senior executive leaders, director reports on my team, leading -- talking with these groups of people, frontline managers, senior leaders and actually middle managers. The people that touch the most of our population of team to understand what they want of us to create a better environment. These early conversations are being really well regarded, well received, and the team are actually building actions to create the culture that will create the future of our organization.

We've also reintroduced leadership and training programs. The first 2 groups of our senior leaders have now started going through a Deacon Leadership Program, again, to help to really lead our teams into the future. If I look at the activities that we talked about moving stock out of the DC networks and into our branches and stores. These activities have now been underway, and we're certainly seeing significantly improved stock available to customer at branch level, and that is also underpinning the results and the performance. Still lots more work to do.

We also introduced programs to stimulate and connect more effectively with customers that have been both declining and last customers making phone calls, visiting them. actually putting programs in place to ensure that more competitive pricing. And I talked previously about the impact on our customer of having uncompetitive pricing we have done significant work on the first phase of the price rollback.

So over 70% of our active customer accounts have now got market competitive pricing, and we're starting to see very lists that we expected coming out of those accounts with a more competitive price. We've also taken very clear actions on the price on particular segments within the business. And equally, we're seeing a very positive response, while being very careful and measured in terms of the impact of rolling the prices back has on margin.

I talked last time about our team initiatives that are underpinning the maintenance of the margin. It is clear that we need to just moderate and be careful with that as we continue to build momentum, just to ensure that it is a net positive profit impact, but work is well underway, being received very well. For me, good things are in place as much as the increased activity with very specific trade and retail marketing activations in market now and seeing really terrific consumer responses.

There's still a lot to do, but what I am confident is where we started focusing on team, customers and activating our sales teams with our customers is starting to pay dividends. Clearly, from the update, you can see there is an impact of recent events in the world that have impacted these local environment here in the countries that we operate in both Australia and New Zealand and that's why we felt it was really important to reach out.

So today, I wanted to be more about, one, just setting the scene in terms of why I'm so confident that the work that the team is doing is building the momentum. The flywheel is starting to move in the right direction, but we also had to give an update given what was occurring. So I'd like to pause at that point because I would like to hear from you and also answer questions that you may have of what we've released to the market.

So I think on that point, Karen, we had one question, and I think over to you to help with the facilitation.

We'll hand back to the operator there, actually.

[Operator Instructions] Your first question today comes from Craig Woolford with MST Marquee.

On the numbers, it looks like the EBITDA downgrade on a pre-AASB 16 basis is about $11 million. Can you just attribute how much of that is a result of slower sales versus changes to the gross margin percentage?

Kim, do you want to comment? I'm happy to give a summary level.

Yes. So there's a few things that are sitting in that change in guidance. So it's a combination of sales margin cost factors as well. So fuel and freight as well as some supplier input costs have also increased as a result of the conflict, and we've also had the FX impacts from New Zealand.

So what we're focusing here today is that within those changes, we have seen momentum building across the business units. We have seen customers returning. We have seen increase in our run rate leading into when this complex started to impact the market. We have seen our market share increase. Chris, if you want to add any more color as to what's driving those changes?

I think it's fair to say that there is a consumer that ultimately shops in many of the trade workshops that we serve and Craig I was just talking with the CEO of the AAAA, I'm actually the industry show for the next 2 days on the booth, meeting with our customers, partners -- and we're out sponsoring the event. And what is very clear talking to Stuart, who is the CEO of the AAAA, there's been a material drive in bookings in the workshops and also abandonment booked services. And quite clearly, the services are not occurring, then the parts are not coming out of the business.

So that has an impact. But I'd also say very clearly, when you think about the impact of freight and fuel costs running a fleet of delivery vehicles and obviously the carriers that are providing our longer haulage sharp movements around the country, the impact that's come from there is into the millions. In the final element that I would call out is more so the -- which goes to your question or your margin, there are very significant cost of good increases that we've seen come out of the implications as what people have had occurred to their businesses that are supplying into us.

So there's those number of elements that are impacting. However, Kim raised a very good point. When we look at our best point of reference in the trade business in terms of are we securing the market share. It is very clear in a very cost environment, we're not only showing a trend change, but we are picking up share, which will put us in a far healthier position as we continue to merge out of or into a more stable environment globally that will impact likely.

So just to clarify on the gross margin. There was something you said in your opening remarks, about having to manage the impact of the price rollback. So is growth -- I know it's hard to isolate, but is gross margin weaker than anticipated attributable to the rollback or better than I'm just trying to understand ...

It's a fair question. And so I would say it was not at the level that we would have liked to have been Craig, speaking very openly. But the -- when I first talked about this action being taken to roll back. I also talked about our team 8 activities to mitigate. One of those was very specifically in higher-margin categories, improving the mix in the business. And when you've got a more sensitive trade customer and consumer, it's fair to say that some of those elements that we thought would be more effectively offsetting the rollback haven't materialized at the pace of that.

So we're just now moderating back a little bit the levers because we try to move very quickly, and I said we would. But I equally said that, that could be 4 months, it could be 6 months, dependent on what we saw. So we're just given the conditions needing to moderate that a little bit, just to pick back up the margin cost, margin and the impact of the costing cost and there is clearly a headline revenue headwind that all those elements.

Your next question comes from Sam Teeger with Citi.

Just taking into account the slower trading and the slower inventory reduction, what are you now expecting for net leverage and fixed charge cover at FY '26?

It's a good question. I might just throw it to Kim, if you didn't mind.

Yes, for sure. So very clearly, we are within our covenants and anticipate to be the same as the -- June. So with the lower EBITDA and as you mentioned, where the inventory is at we had taken actions to ensure that we've got the inventory in the line lies at the branch and store network, we have taken actions to reduce the overall inventory.

Those actions will take some time to come through. And obviously, with the slowdown in sales will impact our inventory balances, but we are still taking those actions to reduce inventory. But the combination is that we will see leverage being higher than what we had anticipated in February, but still well within our covenants at 30th oof June and same with the SCR.

[indiscernible] on that.

Previously, I think you said 1.2% to 1.5% for leverage and you're saying it will be above that. But for the fixed charge cover ratio, which I think you have temporary relief in it, it's falling to 1.4x at FY '26, you think you'll be okay there?

Yes. So 1.4x is our covenant for 30th of June. And yes, we will be okay there is what this forecast is showing us.

I think just building on your comments, Kim, because it is a really important call out. We have worked on the early stages of more effectively looking at our ranging based on relevance to car park. There are nonperforming lines that have been removed. There's reductions of MOQs that have been put through thousands of items in our business and we're also moving on to Phase 2 of both driving the in-stock at the branch level and also continuing to pull back on nonperforming lines that just should not be in the greater organization.

If I looked at the actions taken, these are annualized reductions that are very, very significant into the double-digit millions that will be coming out but the moderated consumer sentiment is certainly affecting the sell-through of those right here and now.

Your next question comes from Wei-Weng with RBC Capital Markets.

Chris, sorry, I'm very new to this company. So apologies in advance if my question is really simplistic or missing any nuance here. But if I look at the midpoint of guidance. I think we established a kind of an impact of about $11.5 million for roughly $3 million to $4 million a month, assuming that it's still started in April. Can this be extrapolated into sort of FY '27 for as long as this kind of war is ongoing?

I think that the assessment of whatever the instability maintains. It's certainly going to create a consumer and business environment that is less positive than it would be outside. What I would say is that what we are very confident of is the actions we're taking are going to put us in a far better position as we start emerging. To be honest, so I said any further times I talk in a meeting like this, I'm going to say we're going to caveat, except for wars, macro or global pandemics that those things that are unseen sometimes are difficult.

But everything that we can see at the moment would say, yes, it's probably more moderated. But the direction is starting to build momentum. And so we're still confident of the direction as we start moving into F '27, but there will be quite clearly a little lower base to start on going into F '27.

Yes. And then maybe a bit more sort of, I guess, direct right now. As it stands right now, should the market be may be planning for a virtuality that FY '27 earnings might be below FY '26?

Your next question comes from Andrew Hodge with Canaccord Genuity.

Yes. So that's it hasn't be that what we can go back to it's been --

I think I've got a voice but maybe not a question or I didn't pick up the question, sorry.

We'll move on to the next question. This is from James Bales with Morgan Stanley.

I just wanted to clarify was the downgrade based on the trading performance that you've updated or that you've given to the end of April? Or are you factoring in trends you're seeing in May? And what are you seeing in terms of trading momentum in the last few weeks versus to the end of April where you've given the update?

There's no question in May and June, a very important as so. But yes, we've taken that into account with the updates that we're getting to today.

And so when -- has there been a material change versus in May trading versus the trajectory that you've outlined to the end of April?

Certainly, you started seeing the impacts coming into the April period, which we've considered moving forward. But the direction of an improvement over the prior year from the initiatives and actions we're taking is still directionally going in the right direction, not as quickly as we would like it to.

[Operator Instructions] Your next question comes from Angus Hewitt with Morningstar.

I just wanted to clarify what you were saying on increasing market share. So Supercheap noted market share gains in the March quarter. Genuine Parts is claiming market share gains. So what segments -- are you picking up share? And over what time period? Is it just in parts or trade segment overall? And how are you tracking in retail?

I think it's fair to say if you looked at the Supercheap number, which I think was just over 1%. I could say that the period post our turnaround are being released. We are growing in a very healthy position compared to the competitor set. If I looked at the broader trade business, I'd say that it is quite clear from the data we have.

We are picking up share broadly, not specific categories, but broadly, across the trade businesses, and we can certainly see that there are some other businesses that may not be as -- able to be seen visibly that would indicate that it's coming from them, and I suspect many customers are going back to the larger organizations that they can perhaps be more confident with at this sort of point and when the sort of challenges are in place. It's broad-based market share growth and I would suspect that it's coming from the smaller businesses, given your comment about the others. But I will say we are very well placed from what we can see with the other competitors around us.

Your next question is from Andrew Hodge with Canaccord Genuity.

Just -- you mentioned that the market share growth, but also at a slightly lower gross margin than you expected. Is there any risk you're effectively buying that share growth? And as you dial that gross margin back up, you lose some of that share growth?

Good question. No, I don't think it will to be honest. The other activities that we put in place to reestablish relationships to bring back people to more effectively serve. If you look at what the business has been known for, particularly on the trade and networks business, it's been about relationships. So if you have a team that is in a good condition, and you've got enough people to serve effectively.

Our delivery, which is still -- has always been considered to be better than the competitors, but also that we have a fair of value -- and we're winning back on a number of those dimensions. So no, I don't -- this is not about generating high low activity that's not a sustainable position, notwithstanding the other initiatives that we're putting in to actually increase margin but the right way while you're still delivering value.

But as I mentioned, that was an initiative that I always called out. We would need to pace and sequence it based on what was happening at the margin level. So we just -- we need to moderate a few of those levers and accelerate a few of the offsetting actions to have to do it. Hopefully, that answers your question.

[Operator Instructions]. There are no further questions at this time. I'll now hand back to Mr. Wilesmith for closing remarks.

Thank you very much, operator. Look very grateful for everyone's time. Hopefully, it gives you a sense of the actions we've taken are starting to deliver the momentum change that we needed in the organization. The impact of the global changes we've experienced has certainly moderated that. But it just says to -- well, to me, we need to continue to double down and really focus on those elements and they are going to put us in a very good position as we come back to a more normal environment.

It will come, and I know from previous events, such as the GSE, the investment, what we do put the seeds into the ground now are going to pay dividends. So thank you for your continued interest and support and look forward to getting together and updating you further in the future. Thanks again. Have a great day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you very much, Darcy. Welcome to everybody to this afternoon's update on the first half performance for Bapcor. So Chris Wilesmith is my name. It's a great pleasure to be with you. Certainly, my first now 4 weeks in the business to get a good understanding and to share some results today that will be certainly difficult to be in my first session and after 4 weeks.

But today, you'll also hear from Kim Kerr, our CFO, that's joining me. We'll run through the results. There will be some time for questions and answers. However, if you have joined via webcast, please note you won't be able to participate in the questions.

So I might ask the operator to move to Slide 8 for us, and I'd just like to recognize the First Nations people of the countries that we operate in and of the wonderful journey that we'll have together in the future as we build our nations together.

Moving to the next slide, Slide 9, if we could, the agenda. Firstly, we'll run through some group highlights. We'll talk to some of my early observations of the business, the performance of each segment. Kim will run through some more significant information around the financials. We'll provide an update on trading in the current half and also talk to the equity raising in the business. Thank you.

Turning to Slide 9. So a little bit about Bapcor but before I jump into some of the details of the performance, 4 weeks in the role, however, 22 years in the automotive industry. I'm very excited and privileged to have been appointed into my role. And I'm really looking forward to building the business together with the tremendous team in the organization and for the partner shareholders in our organization. Over those 22 years, I was lucky to lead Supercheap Auto for some 14 years as the Managing Director. I've worked and sat on the Boards of multiple suppliers to Bapcor Group, been a customer to Bapcor Group and also consulted widely in the industry.

There is no question that the Bapcor brand remains to be highly recognized in the market. But the business over recent years and the reason I opened with saying these are quite sobering results to be able to present to you is we've lost momentum. I'll talk as we go through the presentation a little bit more as to some of those reasons and more importantly, what are the opportunities outside of now. I can say that I am very excited now with 4 weeks being inside the business. The opportunities are so obvious and what I would call low-hanging fruit, there is lots of it. And so I can see a path back to where we all want the business to be.

I might move to Slide 11, if we could, and I'll talk to group highlights. Certainly, the first half was disappointing and a weaker overall performance than we would have liked. Revenue at $973 million is still very -- $973 million, very significant but that is a decline of 2.3%. And when we talk to the other components of the business, it will give a very clear view where that's come from. A net PAT loss at group level, $104.8 million. Very significantly contributed to that loss was the goodwill write-down of the New Zealand business. The underlying basis of net PAT was $5.5 million.

Trading conditions were certainly significantly difficult across the group. There were certainly some competitive activity that I would say that our competitors have taken advantage of some of the distraction of our business over the last few years. And so I would largely say there are economic reasons in New Zealand. There are competitive reasons in the Australian business but I'd say it's more self-inflicted, and we just need to look at that and very quickly put plans in place.

So then I'd like to just talk briefly some of the things that we've done, which are about building the business for the future. There was some significant investment in IT capabilities that will enable us to have better visibility of data to help us make better and faster decisions, also a significant investment in the centralization of the supply chain as we also closed many of the warehouses from the many discrete businesses that we integrated over the last 12 months. So that building of framework is really going to help us as we start moving forward from this point.

Happy to say in the Network business, there was some good positive momentum starting to occur. And certainly, the leadership in that area from a very credentialed long-term Bapcor leader has made a real difference and put us on a steady path. Retail in New Zealand -- Retail and New Zealand started to show some positive results at the end of the half, that we'll share more very shortly. The appointment of a new and energized Board in the last 5 months has seen some decisive actions being made. And part of that was the appointment of a number of significantly credentialed industry experienced executives on to the executive leadership team, but also the securing of a tremendous Chairman, Lachlan Edwards, that is very credentialed in this sort of turnaround opportunity. So terrific to have that Board support as we move forward.

Given where the business stands today, the unfortunate decision that had to be made to support our capital management moving forward was the pause of the interim dividend. So on that note, I'll move to Slide 12 and just talk to a little bit of why I'm so excited to be in the business. Watching this business for 22 years, I've seen it on a journey to great, and I've watched the last 5 years as it's become a little bit confused and lost momentum. But going through the door, it is a great business. The brand means a lot. It's got a very significant piece to play in connecting trade partners, suppliers to end user customers or workshop owners.

The industry wants us to be successful. And equally, when you look at our customers, many loyal customers, they've given us some very clear views of what we need to do in the future, but they need us and want to have healthy competition in the market that gives them choice. The opportunity really moving forward, they're right in front of us. We just need to be very, very selective of what we do, what we stop and what we accelerate, and I'll talk to that a little bit during this presentation.

So what are some of the things that I'm seeing in the business 4 weeks in. What I've spent time doing is actually listening and talking to many people, about 800 people across our organization. And it's been very clear to me, they are team that just want the support of the senior leadership. They want clarity and they want support to really be clear about what we're doing to be successful in the future. Bapcor does remain fundamentally a tremendous foundational business but we've got to make some changes across the organization.

I've seen a genuine commitment from many long-term team members that want to be a part of that. And certainly, the way forward, we need to take a team-first approach to really engage and be a part of the journey back to where we want to be. We are a complex business. We've made a lot of headroom in actually reducing complexity, 34 ERP systems, now 16 but we need to continue work on actually removing complexity from our business. It's certainly in publicly open, we've lost a lot of people. And that earlier statement about team first, we need to stop losing good people, retain and build moving into the future.

We've lost some control of our pricing management and also discounts across the organization. And as we've brought many parts of the business together, the heavy lifting has been done but it's come with cost, and we've not been able to realize reduced costs. We do have the infrastructure. We have the reporting capability now. Now we need to focus on how do we use that to fractionalize costs in our business. The customer is saying very clearly to us, we're uncompetitive, and we need to address that very quickly. We needed to have a strong and energized executive leadership team. They're now in place and ready to start taking action and in many cases, already taking action.

So on that point, I might then just move to Slide 17. I'm going to skip across Slides 14 and 15. They are provided in the pack, and they give you quite a bit of detail around our 6 strategic imperatives and the progress we've made. But I'll leave that for any questions you might have later in the session.

So Page 17, the segment overview and how we've been performing. There's certainly been some good signs of outcomes that are occurring from the realignment that's been undertaken, but there are equally some areas that are very clear that we need to continue to focus on in the path forward. Our largest 2 business areas are Trade and Network specialty wholesale. They actually contribute some 39% and 32% of the total group revenue or 75% of the group EBITDA. We are coming into a more constrained economic environment. But what I would say is the principle of as you come into these sorts of more constrained economic environments that was given to me by a great mentor in my early career, he said, it doesn't matter how many dollars or how few there are in market, there's just how many you get. And certainly, our focus will be about growing share as we move into the future. We are lucky to be in a nondiscretionary spend segments. And so we can be confident that even in a more constrained economic environment, the business is there to be had. We just need to do the right thing by our team and customers to ensure that we are securing more than our fair share.

I'll move on to Slide 18 and talk in a little bit more detail about the performance of the individual areas. The biggest trading engine is our Trade business. I'm very happy to say that although the results at minus 1.7% were certainly not pleasing, we've been able to move Craig Magill as one of our executive GMs back into the Trade business. He's been helping in networking, and I'll talk to networking in a minute, the last few years. He was instrumental in growing the Burson's business back in the day and has only more recent years moved away. He's very keen to get back into the business. He's already identifying a lot of opportunities for growth. And although only starting in December back in the Trade business, he's already got actions underway to really drive the recovery.

In the trade business, we had very significant pullback in our tool and equipment business, and that's serious commercial-grade tools and equipment. We've certainly lost a number of senior people and understanding of the business we're in. We're able to secure a new general manager that is now in the business and working on the turnaround program in that business. Some good green shoots occurring, some very clear areas of focus in the coming 6 months. That new executive comes to us from Caterpillar, where it's not just the product you sell but the service that's critical in being successful. He's got his fingers on the key areas and he's starting to drive the business forward. The EBITDA was also under pressure, both from the point of view of the impact of currency because this is significantly imported products and the fact that we've not kept pace with the right pricing on those products in the market.

I'll move to Slide 19 and talk to our Networks business. The Network performance for the half year was certainly impacted by the significant restructure across the group. The undertaking that activity is the right longer term, but it was very disruptive during the period. So sales decline of some 2.4%, although it's really pleasing to now see that some of the business units within networking with Craig's leadership before coming back to the trade business are starting to show good momentum.

JAS, one of those businesses now 5 consecutive months of growth. CVG, truckline business certainly has been impacted by some loss of some very key accounts as the transport industry goes through some consolidation but we also had some shortfall in quality team, which we're now getting to the point of having filled those vacancies and those relationships are so critical in that business that, that also impacted us significantly. EBITDA broadly declined in line with the decline in revenue. But as I said, and you'll see later on that we're starting to see recovery signs.

Slide 20, the Retail landscape. We've been lucky to secure a new leader, Dean Austin, 30 years in Retail. He's been in for about 2 months, and he's identified a 100-day recovery plan that he's put into place. The revenue for the first half, however, was a decline of 1.9%. EBITDA was equally impacted and significantly by some cost escalation and actually driven by our pricing being uncompetitive to market. It's very -- it was a terrific celebration just yesterday, the strongest growth seen in Autobarn in the last 12 months. So some of the actions is taking are starting to build momentum into the half leading up to the end of June. So we'll continue to watch and execute quickly to build momentum in our Retail businesses.

Moving to Slide 21, New Zealand. The New Zealand economy continues to be challenged at a macro level. But what we have seen was quite a significant decline in that business during the year, 3.9% down year-on-year in New Zealand dollars. That unfortunately increases with the currency transfer back into the consolidated numbers at a 5.9% decline. Happy to report, however, the stable management team, a reinvigorated sales team across there in the business in November, December started seeing positive signs of recovery. EBITDA declined as well in line with the revenue decline.

What I started with, it's a fairly sobering set of numbers to present but I can say that there are some green shoots that are starting to be seen. And equally, the areas of opportunities that I talked to briefly have got actions in place to really ensure that we've got a better set of numbers to start talking about the next time we're together.

On that note, I'll hand over to Kim, and we're moving to Slide 22. Thank you very much.

Thanks for that, Chris. So I might just move from 22 straight into Slide 23. And so our statutory NPAT for the first half of '26 was a loss of $104.8 million, as Chris mentioned, which included $110.3 million post-tax of significant items. And this is largely due to the impairment of goodwill in our New Zealand segment. And this impairment was flagged at our 20th of October 2025 trading update. In the appendix of our results pack, we have outlined the significant items, and we've provided commentary on each one of those, so I won't go through them here today.

Underlying NPAT was $5.5 million for the half, which was 87.2% lower versus the prior corresponding period. Group revenue declined by 2.3% versus the prior period, and our gross margin of $437.3 million was down 5.5% on the first half of last year. All of our segments were negatively impacted during the period with softer revenue across the board. Our cost of doing business increased by $26.7 million, which reflected higher employee costs, supply chain investment and strategic investment in our IT systems. These were compounded by the impacts of inflationary cost pressures and negative FX movements.

Depreciation for the half year increased by $0.5 million, reflecting our ongoing investments and financing costs increased by $300,000. We have undertaken a change in our operating model to refocus our business on the external customer. This realignment was previously announced at our April 2025 Strategy Day and was effective from 1 July 2025. Our segment report has been updated to reflect this change as has the prior period. Our ASX released today contains the updated segment note for the first half of '25 and also for the full year '25. It is important to note that these changes have no impact on the overall consolidated financial results for Bapcor.

Now turning to the cash flow on Slide 24. Operating cash flow decreased to $71.8 million, a reduction of $71.9 million compared to the first half of last year. This reflected our lower EBITDA performance. Cash conversion was 93.4%. Other notable items to call out is a reduction in capital expenditure to $15.7 million from $28.1 million in the prior period. Investment in new distribution centers and stores declined from $12.3 million in the prior period to $1.2 million this period, which reflected the completion of the warehouse consolidation program into our state-based distribution centers in the period last year.

Other capital expenditure relates to plant, property and equipment in our existing stores and distribution centers, investment in motor vehicles and IT software and was largely in line with the prior period. Free cash flow was down $52 million on the prior period, which meant we had a negative free cash flow of $5.3 million. The FY '25 final dividend of $18.7 million was paid during the half.

Now turning to the balance sheet on Slide 25. The key items to highlight in relation to the balance sheet are the decline in intangibles due to the $99.9 million impairment of goodwill in the New Zealand business. Also the reduction in right-of-use assets and lease liabilities due to exiting smaller warehouses in FY '25. Prior period assets and liabilities held for sale have been reclassified into existing assets and liabilities in this period as these are now to be retained by the company. The current borrowings relate to the reclassification of the MetLife facility due to mature in July 2026. We have facilities in place to refinance this facility when it falls due.

Following an externally supported review across all of our balance sheet during this period, we have restated our FY '25 comparatives for accounting issues that were identified in the Trade segment. The impact of this was an $8.9 million reduction in opening retained earnings for FY '26. In addition, we've identified a payroll issue relating to the period from February 2020 to now, which required the creation of a $4.6 million pretax provision to be recorded. This issue was identified as we prepare for our HR information system to be deployed in the next few months. As most of this issue relates to the prior period, it has been largely recorded as a reduction in opening retained earnings rather than in the current period. Further details of this matter are contained in the ASX release.

Now turning to Slide 26. Our net debt increased by $22.5 million during the period to $387.3 million as at 31 December 2025. Net leverage was 3.39x adjusted EBITDA, which is within the temporarily increased covenant of 3.5x as announced in December 2025. I will cover some further changes agreed with our lending syndicate to our covenants in the equity presentation shortly.

And with that, I'll hand back to Chris for an update on our January trading.

Thanks, Kim. And if we could move to Slide 28, if we can. So as you can see from the slide that's just come up, the Network business is starting to show and continuing positive ground. Retail is starting to build momentum as is the New Zealand business. The clear area of continuing challenge is the Trade business. And as I mentioned, the appointment of Craig as the EGM of that business unit, a credential Bapcor executive, he's built it. He's identified the problems, and we're working very hard to actually change that but it still needs significant focus.

What is very clear that the Network business, the underlying JAS continues to go in a positive direction. The Wholesale business is starting to show very consistent growth as well. We've got really the next 6 months is a stabilization as the -- some of the initiatives that we're deploying at the moment mature, we'll certainly see that build momentum as we move into the new financial year but that should give you a little bit of a sense of directionally where we're heading.

On that note, we're going to now move to Page 7, Kim, and handing back to Kim.

Thanks, Chris. So we're now moving over to the equity presentation that was also released today, and I'm going to start on Slide 7. So today, we are announcing that we are undertaking an equity raising of $200 million, which is structured as a 1 for 1.36 pro rata accelerated nonrenounceable entitlement offer of $150 million as well as a pro rata placement to raise a further $50 million. The entitlement offer consists of an offer to eligible institutional shareholders and an offer to eligible retail shareholders. Further details of this structure can be found in our presentation issued this morning.

These shares will be issued at an offer price of $0.60 per new share, which represents a 65% discount to Bapcor's last closing price of $1.72 on Wednesday, 18th of February 2026 and is a 48.4% discount to the theoretical ex-rights pricing of the raising. Approximately 333 million new shares will be issued under the offer, which represents approximately 98% of Bapcor's existing shares on issue. The proceeds from the raising will be strictly used to enhance Bapcor's balance sheet flexibility by repaying debt. This reduction in net debt will provide the business with sufficient headroom to focus on getting the engine running to improve operating performance and execution. As a result of this raising, Bapcor's pro forma net leverage ratio would be 1.7x at 31 December 2025, which was down from the 3.39x before the raising.

We've also received approval from our lender syndicate to temporarily lower our fixed cover charge ratio covenant for the next coming testing points. We have been engaging with our lending certificate during this period, and we continue to receive support for our business and the operational turnaround being pursued. These temporary changes provides Bapcor with further flexibility to execute the turnover strategy -- turnaround strategy.

With that, I'm going to hand back to Chris, who will continue.

Thanks very much, Kim. So what we're looking in terms of full year guidance, we expect to be delivering an underlying EBITDA of around $150 million to $160 million post AASB 16 or $74 million to $79 million on a pre-AASB 16 basis. Pro forma net leverage ratio of around about 1.7, and it's expected to reduce to between 1.2 and 1.5 by the end of June, with the net debt expected to benefit from the release of around $60 million to $75 million of cash flow through activities around the focus on reducing inventory and also receivables in the business. Going forward, we'll be targeting a net leverage ratio of no greater than 2 as part of our capital management initiatives.

So I think, Kim, I'm handing back to you for a moment or is that page -- now next Page 11.

Yes, you've got Page 11 as well, Chris.

Thank you. Page 11 is now up on the screen. So you heard Kim mention get the engines running. This is what's exciting me about this business. There is so much opportunity for the last few years, the focus on the re-scaffolding, the improvement of data and how we use it, the consolidation of ERPs and DCs that it's really distracted us from what now is the opportunity ahead. We've got great opportunities to improve revenue and profit through stock availability. It's a very key call out of our customers at the moment. We've got lots of stock in the network. It's just not in the right location.

We've become uncompetitive in the market. We've done the analysis. We know where that's occurred, and we're now starting to take action to get back to competitive pricing over the coming months. Craig moving into Trade has also identified that we lost some of the management controls around our discounting and the application of putting in management controls again is already starting to show an ability to improve margins. Some of that margin as we start pulling back on discounts will also be put into accelerating getting our whole offer back to being competitive with market. So key areas to drive revenue and profit.

Cost of doing business. We've done a lot of the hard lifting over the few years. The DC is ready to run. We just need to use it in a way that we can optimize and fractionalize the costs in the business. Our systems are ready to give us insights to take to action. And only 2 weeks ago, the report was able to be built to actually start helping us to improve in-stock across the network. Without that investment in the last few years, although it hasn't fractionalized or delivered growth at this point it has put us in a great place to deliver growth quickly in the future.

If I look at the next slide, moving to 12, if I could, capital efficiency. There is no doubt that we've identified some $100 million worth of excess stock in the business, moving, holding, financing stock costs a lot of money. It costs a lot of money to move it through the business and network. So we've introduced programs to actually reduce significantly over the coming half year excess stock by putting it into the right location and stop us from ordering more stock back into the network. We've looked at the range and the quality of the products, and we'll be looking at making certain the width is right and in the right locations.

At the moment, we've got a very, very wide product range offering, and there is certainly opportunity to actually refine that. So it's more customer-centered but reduces overall capital in the business. We also talked about the release of actual overdue debtors back into our cash. And right at the moment, we're working very hard on receivables, again, a capability that was built over the last 12 months that now gives us absolutely visibility of what accounts are overdue and why, and we're actively pulling those back into the business. We reduced our overdue receivables by over 10% in the last few weeks.

Returning growth to core. It is a great engine. We just need to focus on the team, reduce the turnover actions are already in place to actually address some of the significant issues leading to that. We've got a significant build with an executive team that is energized and ready to actually focus and drive the initiatives that can make a real difference. Team, customer and looking at every element of how we drive profit is what we're focusing on as we move forward.

So I'd now actually ask if you could move to Slide 19. Why is it coming into this business is so exciting to me. I go back 20 years, the first moment I walked into the door of Supercheap Auto. It reminds me in so many ways, the similarities. Bapcor is a great business. It's got strong brands. It's got trade partners and customers that need us. We just need to refocus like a laser on delivering what our team and what our customers want. Our customers said in stock, the right price. We're working on it. We've got a supply chain that can enable us to put the right stock in the right location and fractionalize our costs going forward. We closed many DCs as we centralized. It's now centralized, efficient. Now it's for us to really fine-tune the levers to take cost out.

I truly believe that our position today is a significant opportunity. We have scale. We've got a tremendous team. We just need to focus and with your support, move forward to the next phase of taking us not just back to where we were, but beyond. I'm excited by the strength of the network that we have right across all of the countries we operate in.

Bapcor's service and customer proposition is there. We just need to focus back again on the things that make a difference, difference for our customers. Our team are knowledgeable. We've got a renewed energy in the business just by doing simple things, celebrating the great things we're doing, recognizing as we build culture across our business.

I'd like to turn to Slide 20 now. So what are the things that we're going to focus on to get our engine running? Improving discounting controls, improved branch level ranging, category mix management to optimize and ensure we've got both the products that customers want but also the high-margin categories in our business are given absolutely the opportunity to grow and be more significant, the mix of the total revenue. Optimizing the cost, the removal of non-added activities, we've been looking. We're taking action as it speaks. Group-wide reviews of all major costs to see what else we can do to remove cost out of the business, reviewing of COGS escalation in key categories and to work with our partners to make certain that we've got the right price on the purchase of goods into the business.

Capital efficiency, you've heard me talk to a number of those initiatives. And the real drive to get the engines really going fast moving forward is stabilizing the team, rectifying the price position and having the right stock in the right locations.

So on that, I'd like to then move to question time, I believe.

[Operator Instructions] Your first question today comes from Sam Teeger from Citi.

Look, I've covered Bapcor for over 6 years, and I haven't seen many companies kick so many own goals like this. I guess given this is now the third management team trying to turn around the company, what's going to be different this time?

Good question. Thank you. Look, I think the first thing is actually involving the team, not just the executive. The exec clearly are here to stimulate to help refine and be clear about what we're focusing on. The last few years, there's been so many significant initiatives that have caused the team to lose the ability to focus on customer. It's actually meant that the team have been discombobulated and become disengaged. So the first thing is we've got the right team in place. We're now starting to rebuild the team confidence and actually to rebuild the culture. We've done an engagement survey. We know what to do. We're starting to move some of those things into action.

Coming into the business after being a supplier to over the business over the last 6 years, it was loud and clear in market, fix the price and getting in stock. Those initiatives have been stood up in the last few weeks, and we're rapidly moving to a target of improving our in-stock at site by 8%. Historically, in the business that I've run, I've seen the conversion of improved in-stock at about a 50% ratio. So if you improve in-stock by 8% across the network, you can only imagine there's a significant improvement of revenue and profit.

Getting competitive in market. We've given market share to our competitors as we became uncompetitive. We understand now how we got uncompetitive. We've developed a plan to get back in very short order, the next 5 to 7 months to having a competitive position in Retail and Trade. We've got 18 initiatives to make certain that, that doesn't negatively impact the profit result but it actually helps us to enhance the profit result over those periods, slowly in the coming half, building momentum quarter 4 and then certainly putting us in a good position for '27.

And when you grow your stockpile by 67% over 5 years, that's a significant cost burden that's come into the business. It's consumed a lot of cash, and we've got a very clear view of how we can optimize and remove excess without negatively impacting the customer. The only other thing that I would add in terms of all of those elements are going to drive growth. It's actually making certain we're not trying to focus on 268 initiatives, and that's how many I found when I joined the business but on the few that are going to make a real difference, and I've talked to some of those that we'll be focusing like a laser on the coming months.

Final point, what has occurred previously, I can't control but I can contribute and help the team to be successful in the future. I've got a 14-year history of driving team engagement, profit and revenue growth in the automotive sector but I'm known for disciplined execution and helping team to be clear but then execute with speed. And that's what will be different in these coming quarters and years beyond.

All right. Great. And I wish you all the best with it. I just have 2 questions on the equity raise. And I wouldn't normally ask questions like this but given the combination of just what's happened at Bapcor over the last couple of years, combined with the fact that the raise is at a 65% discount to last close and the existing shares on issue are almost being doubled. I think anything you can share might be helpful to investors around just giving them a bit more incremental confidence in the outlook. So the questions are, one, are all the top 5 major shareholders participating in the equity raise? And two, will management be participating in the placement?

So I can answer some of those questions, and I might defer to Kim to build on it. Yes, that there will be participation at a current Board level. We've had very strong commitments from our existing shareholders. And it's fair to say that we're actually in a very good position at this point as we move to officially launching the capital raises we did today.

Kim, would you like to add any additional flavor to that?

Yes. So strong support from existing shareholders and also strong interest coming in from new investors as well. So yes, thanks for the question on that.

Your next question comes from Craig Woolford from MST Marquee.

Plenty of questions. I'll try and keep it brief but hopefully, we can follow up down track as well. So the message here is about improving profitability. There is an emphasis on improving profit margins. But then on the same -- but you talk about the competitiveness or the lack of competitiveness that Bapcor's had. Should we expect gross margins to be structurally lower? You talked about the gross margins in the first half were down 150 basis points. It was cited as Trade. It looks like you're resetting your gross margins lower to be competitive and to stem losses of share. Is that a fair interpretation?

Craig, look, I think history would probably be the best determinant. You can actually do both. And if I look at the previous organization I led very low margins. We went through the higher margins. We maintained our value proposition, and we're very competitive in market. It's a lot to do with a number of elements. Profits only made, as you know, when you sell a good. So if you've got a high-margin item that's uncompetitively priced, you actually don't sell much of it. And we've seen significant degradation of the sales of high-margin products because they were more affected by our price increases over the last 3-year period.

So you put them back to being competitive, you increase the mix actively promoting it, driving it, getting -- sorry, your customers back on board because you've got a competitive price, that can have a positive impact. We actually built a tool called an elasticity modeling capability and system post the McKinsey review but we haven't used it. Two weeks ago, we've got a now expert in this area working with our team to make certain that the optimal price points are being applied to items that are not so impacted by being uncompetitive. Some prices will go down, some will go up but using elasticity modeling gives you a balance between optimal profit units and customer satisfaction. So that capability will be introduced into the business.

The other significant thing, and it's the same point that I made, one of the early findings of Craig in moving back into trade is some of those high-margin categories we're actually significantly out of stock in the store network, lots of stock in the DC. And so we started moving that back out into the network. That's just 3 of 18 initiatives that we've got running that are actually both about growing your total margin profitability while also reinvesting back into price. So hopefully, that gives you a sense of what we're doing.

Yes, it does. It's something to keep on I guess I get the point of focusing on gross profit dollar. Something I've raised with the company over a few years is just a lack of disclosure around D&A by division. It will be, I think, quite important given where profitability now sits to get that information. And what I'm really referring to is the rental component, which has to be surely allocated at segment or business level, there's rents paid on your retail stores, there's rents on your Burson's trade outlets, for example. Just to get a better understanding of true profitability, particularly, I'm sure Bapcor, like any business, you have a bell curve of stores, some are profitable, some are loss-making. I do wonder whether there's a need to shut more stores, particularly on the retail side of the business.

So Kim, do you want to answer part of that, and I'll answer to the retail closures.

Yes. Thanks for that. We are looking into that, and we'll come back to you on that one in the future.

And Craig, to stores, yes, you are right. You've always got to do pruning of networks, and there's a fair bit of work already underway looking at underperforming. We did close some underperforming sites in the last 6 months. Undoubtedly, there will be more as we do network reviews as we go forward, not significant because before we really get into the pruning mode, we've got to do what we do well, i.e., make certain that the business is optimizing the actual network that we've got. Autobarn is already showing positive momentum. We've got to get the revenue moving back through there, take the actions to be competitive and look at using the data we now have, labor management planning to ensure that we're running them at optimal levels. So there's plenty of things that we can do before we'd consider more significant closures in the business.

I'm also aware there's only about 10 minutes left for questions. So back to you, operator.

The next question comes from John Campbell from Jefferies.

Chris, just your comments, I think, around complexity at Bapcor would resonate with everyone. And you sort of indicated that you've had some success in reducing complexity across IT and collapsing ERP systems down to 16. I guess the question would be, when you look at that complexity of the totality, what needs to happen? I mean you've sort of talked a bit about this but what are the big things that need to happen to shrink it to a manageable, not necessarily the business footprint but just to shrink that complexity down to what you might consider a manageable level? And would that involve divestment of certain business units that just don't fit in with really the totality of what Bapcor is all about. I'm specifically thinking about truck parts as being seemingly somewhat outside the core. But yes, that's the general tenor of the question.

Look, I think the first thing that we need to do is get the engines running and just maximize revenue and profit firstly, before we start getting to a view of divesting. And I think it's too early in my tenure after 4 weeks to really give you a definitive on that. What I can say is the Board and certainly, I and the leadership team firstly need to look at more strategically what is the right ecosystem and actually how do the pieces fit together. So that will be more medium term, and I mean months, not weeks. So it's not that we're going to take a long time to get to that point.

The fractionalization of the cost that you referred to, I'll just give you one example because what it says is the business has done a lot of hard heavy lifting, absorbed a lot of cost. This rationalization of the DC saw many DCs closed but it saw a lot of stock moving into one central location. So if I looked at the current supply chain cost and looked at best practice across the industry, you'd say that we're running probably 2% to revenue higher than we need to be.

Now as we move stock away from the branches, we've introduced more high-cost freight movement from that central location, long miles to stores and branches. We can change the settings on that to actually move more stock less frequently on road freight standard rather than Express. So you can take cost out of doing that. You can take operational cost out of the DC by doing that. So you can actually become more efficient. Now if we hadn't done that consolidation work, you wouldn't have got that benefit.

There's other areas. I said we've got a bit discombobulated and lost focus on our team member. Our team members' turnover has been very high. We spent $17 million on recruiting new people. Do the right thing by your team, create the right culture and don't spend $17 million on recruiting people. So there are lots of elements in the reducing of the cost of doing business. We've identified significant ones. We're starting to take action. That will start occurring in the coming weeks and months. But if you sat at the highest level and looked at our cost of doing business relative to what I'd call best practice locally, Supercheap or GPC or globally, O'Reilly's, Halfords, I'd say there's a delta of about 10% to revenue.

So there's 2% in the supply chain. We need to keep delaminating that and removing those or fractionizing costs where we can. Hopefully, that gives you a sense of we're on a path. It's early days but there's no question it's there, and we've got infrastructure capability to deliver it.

Yes, that's very helpful. Could I just sort of follow on, on that? Just looking at, say, procurement, I mean, you've been talking about how you're going to move or manage inventory more efficiently. In actual procurement, if we went back 3 years or 4 years, it was identified that procurement was happening at a very sort of granular business unit level. And by consolidating or centralizing procurement, the opportunity to get significantly better terms from bigger volume orders was very real. And in fact, it was one of the big sort of buckets that was held out in the better than before transformation strategy. How do you see procurement being managed at the moment? And do you see significant opportunities from here?

Look, I think the last 4 or 5 years, there's been both good cost and bad cost removed out of the business. One of the areas that I think is significantly underinvested in has been our category and product and also planning teams in terms of resourcing effectively, the modernization of the tools to really optimize inventory. We ordered 130,000 items last year, less than 10,000 represent 50 -- sorry, to get the number right, 95% of our total volume. There's some 20,000 active lines that have got very suboptimal performance, and they're distributed right through the network. Those sort of lines, you need to hold less of them centrally. They're generally lines that people will wait a bit longer to get to it as much as the really critical lines, we need to put more of it out in the network.

So look, I think we've made steps forward. The centralization gives us now the capability to move pretty fast but there's equally a long way to go. What's the size of the prize? In the half year, we're targeting about $30 million just by doing some sanitizing and removing excess from the wrong location, putting it into the right, put it at a mature state, a customer-centered range, I think there's somewhere in the order of well over the $100 million mark that could come out of the stockpile while still improving the outcome for the customer. Hope that answers your question.

Yes, that sure does. Look, one last quick one, if I may. Looking at what you're sort of guiding to in terms of like-for-like growth in the second half and just with how you're talking about pickup in sales, do you feel that you're at a point now where maybe you're starting to not see share to GPC and to Supercheap? Or do you feel that arguably, you're still losing share?

Look, I think you could look at the results that were released from SRG this -- just in the last 24 hours and say that at a Retail level, we've lost share. I think the same would be of GPC. We're just starting to turn away from being in negative numbers, Trade still some heavy lifting. We know what the plan is. We're now executing it. But it is -- it doesn't just happen overnight. So there's a slow build. We've got momentum in most business units, but we're going to need to continue to really look after that and nurture it and actually put the foot on the gas where we see the opportunities to drive it harder. And that's why we've been moderate in our, call it, half year forecasting and what we have signaled to market.

But as it matures going into first half of F '27 a build and then in that sort of 12 to 24 months, I think it's going to take that order of time to really get up to the momentum that we know we can and have delivered before and actually start really pulling back share from those other players.

Thank you. Unfortunately, that concludes our time for questions today. I'll now hand back to Mr. Wilesmith for any closing remarks.

Look, I think just a final thank you to the shareholders. Thank you for your openness of question. But most importantly, for continuing to support us as a business. You can't change the past and the thing that I've been talking about with the exec team is so what, now what. We have made some mistakes. We've clearly identified some very clear areas of priority that can make a real difference, and we are focusing on that. We're moving fast to actually make a difference to actually improve the performance in the future.

So thank you for continuing to be shareholders, and I really look forward to continuing the journey and talking about more success and delivery of the numbers in the future. Thank you again for your time today.

Good afternoon, everyone, and welcome to Bapcor Limited's 2025 Annual General Meeting. My name is Angus McKay, and I'm Bapcor's Executive Chair and Chief Executive Officer. On behalf of the Board, I'd like to thank you for joining us today, both in person and in line.

I'd like to start by acknowledging the traditional custodians of the land on which we meet today. For those of us present in the room today, we are on Wurundjeri country, home of the Kulin Nation, and I pay my respect to elders past and present. We recognize the continued connection of all First Nations people with country across Australia and on all the land where Bapcor operates.

I would like to also introduce my fellow directors. To my immediate right, Mark Powell, who is our Lead Independent Director. And then in alphabetical order, Lachlan Edwards, Jackie Korhonen, Patria Mann and Kate Spargo. For the sake of completeness, I should note that I'm an Executive Director and not considered to be independent. Also in the room today are Kim Kerr, Bapcor's Chief Financial Officer; and George Sakoufakis, Bapcor's Company Secretary as well as other members of the executive team from Bapcor.

I'd also like to welcome the company's auditors, PwC, represented by [ Alison Miller ] as well as the representative of the company's share registry, Computershare Investor Services. It is now time to start and the Company Secretary advises me that we have a quorum present, so I will now declare the meeting open.

The notice of this Annual General Meeting was circulated to shareholders within the required period. Accordingly, if there are no objections, I'd like to move that, that notice is taken as read. Today's meeting is being physically held at Bapcor's registered office located at Melbourne and online via Computershare Meetings platform. This format allows shareholders, proxy holders and guests to attend the meeting physically and virtually and to ask questions and submit votes online.

All attendees can watch the live webcast of the meeting, which will also be recorded and available to you after the AGM on Bapcor's website. Before we move to the formal business of the meeting, I'd like to run through a few procedural and housekeeping matters so we can ensure that the meeting proceeds smoothly. I will then turn to the agenda.

Before each resolution is put to shareholders, shareholders will be given the opportunity to ask questions on a specific resolution. To ensure an orderly meeting, the chair will only be taking questions that relate directly to that resolution at hand. Prior to the conclusion of the meeting, I will open the meeting to general and relevant questions.

Online attendees can submit questions at any time. To ask your question, please select the Q&A icon, type your question into the text box. Once you have finished typing, please hit the send button. Although you can submit questions from now on, the Chair will not address them until the relevant time of the meeting.

Please also note that your questions may be moderated or if we receive multiple questions on the same topic, we will consolidate them into a single question or query. To ask a verbal question, please follow the instructions written below the broadcast. For those attending the meeting in person, when questions are invited, you can ask it by approaching the microphone, showing your blue or yellow card and providing your name.

If you're eligible to vote, once voting opens, the icon and all solutions will be activated. To cast your vote, simply select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You will receive a vote confirmation notification on your screen.

If you'd like to change your vote, you can do so until the time when the Chair declares the voting is closed. If you're attending the meeting in person and are eligible to vote, you may complete the voting items on the reverse side of your blue voting card. These cards will then be collected at the end of the meeting by a Computershare representative.

I now declare the voting is open on all items of business. Please submit your votes at any time and the Chair will give you a warning before moving to closing of votes. As well as those shareholders online today, the holders of approximately 251 million ordinary shares or 74.13% of the company's issued capital -- share capital have already sent in valid proxies.

As each item of business is read out to today's meeting, the total number of valid proxies will receive for that item, and by way of those proxies that have been directed will be shown on the screen. These figures will be as at the closing time of the receipt of proxies, which was 1:30 p.m. Tuesday, the 21st of October.

In Mark Powell and my capacities as Chair during the meeting, we will be voting all available undirected proxies in favor of each item of business. Before we move to the formal address of the meeting, I'd like to address shareholders in relation to the company's progress during 2025 and our objectives going forward. A copy of my address to shareholders and the presentation will be delivered and has been lodged to the exchange and will be published on Bapcor's website.

As Executive Chair and CEO, I'll give you an overview of our progress during the fiscal '25 year and into fiscal year '26 before the formal items of business are considered. I will chair the meeting for the first 6 items of business, consideration of the company's financial audit accounts and related reports for the year ended 30 June 2025 and for resolutions 1A, B, C, D and E, the reelection of directors. I'll then pass over to Mark Powell, our Lead Independent Director, for the remuneration-related resolutions being Resolution 2 the adoption of the FY '25 remuneration report, and Resolution 3, approval of the grant of the FY '26 performance rights to the Executive Chair and CEO under the long-term incentive plan.

Once these resolutions are complete, I'll resume the role of Chair and put Resolution 4 to the meeting, the renewal of the proportional takeover bid provisions in Bapcor's constitution. I will then address general questions at the end of the meeting.

I started with Bapcor in late August 2024. When I began, I said I've been drawn to the company's strong position in the resilient automotive aftermarket industry, its healthy balance sheet and robust operating cash flows, its position amongst the top 3 in the markets where it competes and team members who are passionate about delivering for their customers.

After 14 months in the role, I remain of the belief I started with. There is clearly a positive future for Bapcor. It is a strong business with the committed team, loyal customers and very robust suppliers. But there is significant work to be done. The company is over-complex, too internally focused, too reactive and has not adjusted its operating model and rhythms.

This internal focus means the company has lost elements of the connection to its customers. It is that connection to its customers that made the company great. Our routes have been built on acquiring businesses, not integrating them. Some of the practices that have been accepted in the wider organization do not meet acceptable operational standards nor the required financial or commercial level of expectation.

In a trading update released last Monday on the 20th of October, we said that this work to methodically address these issues is progressing slightly and the complexity involved in turning around the business means it's taking longer than expected, but it will result in a stronger and more sustainable company.

We remain committed to delivering on this turnaround and achieving the 5-year indicative scorecard contained in our strategy. I'll speak more about Monday's trading update shortly. But before that, of detailed Bapcor's fiscal '25 performance and business results.

As I said, the company has been progressing its structure and its capability. restoring customer confidence and building its performance over the past 14 months. I acknowledge that the continued discovery of historical poor operating practices is frustrating. However, we're committed to facing into these issues and corrected them as and when required. Work undertaken at pace to begin the simplification of the business started in fiscal '25. These changes were necessary to drive simplification, create more customer-focused operations, eliminate waste, provide greater visibility to inventory and to strengthen the company's core business for its future growth.

I acknowledge that, that speed of change has impacted our operations, but drawing out such urgent actions over multiple time horizons would have been even more damaging. The actions taken include the final unwinding of the better than before headcount, consolidating small warehouse sites, reigniting store or branch openings and closures, technology upgrades and consolidations, integrating Bapcor's wholesale truck and electrical businesses under a single executive leader and the sale of the surplus business.

It has also been challenging on our team members who have not experienced this level of change before. I'd like to commend them for what is not only what they have achieved, but the way they've gone about doing it. In parallel to this work, we've set about delivering a clear strategy and communicating that to both team members, shareholders and our stakeholders. From my earliest days in the business, the company's shareholders and team members have asked for clear direction.

The 5-year strategy was announced in April of '25, articulating where and how the company will focus on building the business for long-term sustainable profitability. It leverages commonality across the group through strict strategic imperatives. Firstly, optimizing our network. Secondly, one supply chain; thirdly, customer focus; Fourth, the digitization of our business; fifth, making our stores fit and finally, simplifying the business.

In the 6 months since announcing the strategy, we've been busy bringing these plans to life. While there is certainly complexity to this execution, the articulation is deliberately designed to be clear and simple. To align with this strategy, we have also defined our cultural aspiration underpinned by a reset of our code of conduct. This might seem trivial but ensuring all Bapcor employees have a common understanding of what is acceptable behavior and what behaviors are critical to the longevity of our business is fundamentally sensible.

The executive team was reshaped to support the new plan with 3 key appointments. Simon Bromell was appointed as the Executive General Manager of Trade on the 28th of April. Simon brings a background in delivering results in complex chain and supply chain environments, including Orora, Fonterra and Mars. Kim Kerr was appointed as Chief Financial Officer on 12th May, Kim is an experienced CFO with 25 years working in ASX 100 listed companies in the mining, manufacturing, chemicals and digital solutions area, and most recently, CFO at Orica. Craig Magill was appointed to the expanded role of Executive General Manager of Networks, which combined is the CVG business, Jazz and our wholesale business units. This was effective on the 1st of June, bringing his 13 years of Bapcor experience into that role. Abdul Jaafar, George Sakoufakis, Martin Storey, Megan Foster, Morris Lieberman and Merryl Dooley remained in their existing executive roles.

As announced in both Bapcor's fiscal '24 annual report and the fiscal '24 Annual General Meeting, Margie Haseltine stepped down as the company Chair on the 22nd of August and left the Board on the 16th of October 2024. I was appointed as Executive Chair and CEO on the 22nd of August 2024. With this, Mark Powell was appointed as our Lead Independent Director on the 22nd of August 2024. Mark's role ensures Bapcor continues to have clear separation between Board and management, open communication in relation to the governance requirements and that my performance in my dual role is overseen and managed directly by the Board.

Kate Spargo remains on the Board and hope benefit from the experience and insight Kate provides. Jackie Korhonen was appointed to the Board as a Nonexecutive Director on the 1st of February 2025, bringing extensive executive and nonexecutive experience in strategy development, risk management, governance, data and technology. On the 23rd of July 2025, Mark Bernhard, Brad Soller and James Todd resigned from their positions as nonexecutive directors on the Board. The timing and the immediacy of those resignation was disappointing to all of us. but has presented us with the opportunity to accelerate the refresh of the Board that was already underway.

On October 1, 2026, 3 new nonexecutive directors joined the Board providing a wealth of experience and highly complementary skill sets. These individuals will be invaluable to the Bapcor business. Annette Carey brings 35 years and more of experience of legal and operational experience in logistics, supply chain and the security sector in Australia and internationally.

Lachlan Edwards brings 35-plus years of hands-on experience in capital management, corporate and debt advisory. Lachlan has an extensive turnaround background, including driving operational recovery, capital efficiency and sustainable value for shareholders. These are, of course, crucial to Bapcor's strategy and to restore growth and returns.

And finally, Patria Mann joins with 20-plus years of nonexecutive experience across ASX listed and financial services organizations and has deep experience in audit, risk and governance. Patria has served as the Audit and Risk Chair -- Committee chairs with multiple organizations and will lead Bapcor's Audit and Risk Committee. Annette, Lachlan and Patria were recruited through an independent process managed by an external consultant. You'll have the opportunity to hear from them, plus also Mark and Jackie later in the meeting.

To the financial results. I've been clear that these were not an acceptable level. Yes, the headline numbers reflect the disruption associated with simplifying the business, particularly in that Specialist Wholesale segment, the necessary cleanup of the balance sheet and the change in our inventory valuation policy, but the underlying trading performance was not at an acceptable level.

Statutory net profit after tax for the fiscal year '25 was $28.1 million. Group revenue of $1.9 billion declined by 1.5% on the prior year. Importantly, revenue in that Trade segment continued to grow. The New Zealand and Retail segments continue to trade in ongoing challenging conditions and the conditions in the Australian retail environment in the wider New Zealand economy. We delivered on the forecast cost saving measures. And the company's final quarter was poor, particularly in trade with both parts and equipment sales falling below our expected levels of delivery.

The significant work undertaken to simplify the business also disrupted trading. That work included consolidating operations in 23 warehouses across Australia and relocating them to the existing distribution centers, closing or consolidating a further 34 branches or stores across our network, relocating 13 stores or branches and opening 21 stores and branches.

Consolidating 3 auto electrical businesses into a specialist wholesale segment, previously known as AEG into a single business unit called Jazz, bringing together branch locations and ERP systems, restructuring the Specialist Wholesale segment, including the centralization of product functions and establishing a single selling entity, rebuilding the Autobarn business, including significant changes to both regional and store manager personnel, adjusting promotional cycles, enhancing our B2C capabilities and the new investment in the Autobarn brand, and investing in IT systems that included fiber to stores, a pricing engine in the Trade segment, commencing the implementation of a company-wide HR system and enhancing our cybersecurity tools and processes, and finally, introducing a common e-mail platform across the entire Bapcor Group.

Given the large volume change introduced during that period of time, an extensive review of the balance sheet was undertaken announced in the July trading update. This review resulted in the recognition of significant items of $52.3 million after tax, including the statutory net profit of the fiscal '25 year, of which 82% represented noncash items. I am disappointed at the quantum and the nature of those significant items announced by but the business needed to deal with the issues in a transparent manner.

It is inevitable that as a company, reviews like this in its current state will confront issues that do relate to our past. Our commitment is to deal with these as and when they arise and to do so quite transparently. The required business turnaround was always going to be challenging. However, I'm clear that the review as completed places us in a superior position to deal with the required business and importantly, operational change.

Central to our strategy is safety. Fiscal '25 saw a 43.5% reduction in our total recordable injury frequency rate. The reduction was driven by an increased focus on the safety program and embedding the early intervention initiatives inside of our business. utilizing and improving the available data from right across the organization. We also revised the definition of total recordable injuries in November of 2024 to better align with both the industry and our internal practices. We are a safer business today than we were 12 months ago. but it cannot afford to be complacent. Absolute TRIFR will reduce year-over-year when excluding that definitional change, but we are continually improving the way we use Donesafe, our safety management system, lifting the accuracy of incident data and reporting it as and when it occurs and focusing on health and safety as a reduction opportunity.

We continue to build a diverse workforce representing the communities in which we operate. It remains focused on creating an inclusive environment, particularly trying to improve our gender balance. The company has, however, made limited progress on a gender balance change with the total number of females employed at Bapcor increasing from 28% to 29% over the last 12 months. The expectation for us to make greater progress will be through a diverse cohort of managers setting the culture and making the right hiring decisions.

A voluntary engagement survey was offered to all team members in March of 2025 with 85% of the organization participating. This participation demonstrates an engaged workforce who want to be part of the solution and importantly, the turnaround. Our engagement rating was 52% and the company has been giving a significant amount of feedback on how it can improve its culture and build on opportunities to create flexibility, inclusivity and a sense of belonging for all our team members.

We have responded to this feedback with actions that include the strategy road shows that targeted our Australia and New Zealand personnel, career development conversations with every Bapcor employee and direct engagement by the leadership team right across the 2 big countries we operate in. Our responses continue as we look to change the culture of the organization.

In fiscal '25, we launched a refreshed ESG strategy and strategic framework to ensure that our sustainability efforts remain focused, measurable and aligned with stakeholder expectations, operational priorities and regulatory change. This strategy is shaped across 4 single pillars: environment, team members, supply chain and communities. It was informed by the insights from Bapcor's fiscal '24 double materiality assessment and consider the impact Bapcor has on the environment and society as well as the influence of ESG factors on the company's long-term performance.

Fiscal '25 also saw the development of a comprehensive decarbonization strategy and commenced preparation for the mandatory climate-related disclosure requirements under the Australian sustainability reporting standards. This is due to commence in fiscal year '26.

Earlier this week, we provided an update to the stock exchange of our Q1 performance and provided financial guidance for the first and second halves of the fiscal '26 year. Details can be found on our website. Management has continued its execution of the strategy. Operational reviews have been a feature of the first quarter of fiscal '26 and with the following key actions already undertaken.

Pricing reviews on key person categories to increase our competitiveness in the market, ranging reviews in Trade and Jazz to ensure the right stock is in the right location, utilizing key promotions to engage with new and lapsed customers with a particular focus on our key accounts, implementing a retail-specific demand and merchandising planning team, training for sales teams members particularly our new staff, utilizing NPS, Net Promoter Score feedback to drive our focus on customers, the recruitment of staff to key positions with the focus on filling open customer-facing role as a priority, optimizing our store network, including opening new stores, closures as required and refurbishments, and finally, an in-depth review of the Tools & Equipment business within the Trade segment is underway, and that has unfortunately identified unsatisfactory operational practices that have required our immediate attention.

In half 1 of fiscal '26, additional investment of some $16 million will be made, brand and product marketing activities to improve brand awareness in the sales and retail segments and in our business. technology of some $6 million and in our supply chain to support security of supply as we now finalize the embedding of the warehouse rationalization that was completed at the end of last fiscal year.

Cost savings initiatives have also been launched in quarter 1 of '26. These include the optimization of our supply chain structures and associated costs. simplification of some of our support office structures in line with our new operating model, the reprioritizing of people and technology spend to prioritize customer-facing activities and changes to the New Zealand distribution footprint to optimize site and distribution costs.

We expect statutory net profit after tax for half 1 of '26 to be in the range of $3 million to $7 million. excluding any potential impairments associated with the New Zealand segment. Underlying NPAT for half 1 of '26 before one-offs and nonrecurring items is expected to be in the range of $14 million to $18 million. Statutory NPAT for the full year '26 is expected to be in the range of $40 million to $50 million, again, excluding any potential half 1 impairment associated with the New Zealand segment. NPAT for the fiscal year '26 before any anticipated one-off or nonrecurring items recognized in half 1 is expected to be in the range of $51 million to $61 million.

NPAT in that second half of fiscal '26 is expected to significantly improve from the first half due to operational improvements where we're focusing our attention on sales growth, the benefits of the pricing realignment measures already underway, realization of the benefits from cost-saving initiatives that are built into that half 1, which are expected to generate $20 million in pretax savings in the half, and the nonrecurrence of $16 million worth of pretax first half items. Our NPAT and our cash flow forecast remain and demonstrate Bapcor will remain within our debt covenants and we have access to sufficient debt facilities to fund our ongoing operations.

We are privileged to have excellent lenders who support the turnaround that is underway. We're now firmly focused on delivering the strategy over the next 4 to 5 years. Growth in leadership in the Australian trade sector, expanding our store network, becoming a market leader in New Zealand, investing strategically in digital and e-commerce solutions, stabilizing and growing our retail organization and maximizing shareholder value. This will be undertaken with a ruthless focus on operationalizing the 6 imperatives that I spoke to before, and we'll invest further in technology and people capabilities as we are required by discrete segment earnings growth.

With the refreshed Board and leadership in place, the investment underway to implement the business strategy, the Board is confident the company is addressing its deficiencies, closing the performance gap and is positioning itself to return to sustainable growth. My first year at Bapcor has provided with numerous insights into the huge contribution of the team around me makes and with great pride that, that team members take on wearing the colors of our company. It is clear the team members are genuinely passionate about this business and the company, and they are here for customers and the communities in which the company serves.

As leaders, our job is to provide direction and stability. It's a privilege to lead Bapcor and I sincerely thank all our team members for what they do every single day. There is a great deal to accomplish. So on behalf of the Board and the group leadership team, thank you to our customers, suppliers, shareholders for supporting the company as we drive these required changes. I look forward to delivering the strategy and beyond in the 12 months and plus to come.

We'll now move to the formal part of the meeting. Shareholders and proxy holders can vote on each item of the business to be conducted at today's meeting in person or via the Computershare online platform. Instructions on how to vote and how to ask questions were provided at the start of the meeting. For those attending online, please refer to the Computershare online meeting guide for any further information.

The phone lines are now open for verbal questions. The first item of business is the consideration of the company's audited financial statements and the related report for the fiscal year ended 30 June 2025. The Corporations Act requires that the audited financial statements and related reports for the fiscal '25 year -- financial year be laid before the meeting. I now declare that these reports, which were made available to shareholders on the 29th of August 2025 via both the ASX and Bapcor's website have been laid before this meeting.

Although shareholders are not required to formally vote on the company's financial and related reports, I would welcome any discussion or questions on the reports. As I previously mentioned, the company's auditors, PricewaterhouseCoopers. and Alison Miller in participation in this meeting and present. And I'd ask you if you have any questions for the audit, we can direct those directly to them. So I will start by asking if there are any questions.

Yes. Thank you, Angus. This is [indiscernible]. Yes. I'm Stephen van Emmerik, I'm the representative of the Australian Shareholders Association. So a couple of quick comments, then I'll get into questions. I've got a couple of quick questions for the auditors.

Firstly, well, thanks to Angus and Mark and Kate get together with the pre-AGM meeting with us and I think give honest and useful responses, sometimes we agree to disagree, sometimes you have listened to us, and we do appreciate you've taken actions based on those concerns.

I guess, to the new Board of Directors, good luck. I don't think it's going to be a cushy job. We wish you all the best. We hope you align yourself with shareholders and get out there and buy a few shares. I will have questions for you when it comes to the votes. I guess, all the write-offs that have come to light this year, you've said you're cleaning up the balance sheet. You don't have to clean something up unless it's dirty to begin with.

I guess my question is related to previous year's financial statements. what was the problem really. I mean, is it incompetence? Is it fraud? Is it unreasonable optimism? That's the first question. What was going on?

The second question is why didn't the auditors find anything. I mean there's been multiple times that you reviewed and found extra problems. Why didn't the auditors find into those problems? And will they go back and review their past audits and see what they could do better, so there's not a repeat of this problem in the future? So really 3 questions for you, auditors.

So I might take the first one, if I could, and then I'll...

Feel free.

I think -- so the balance sheet review is designed to look at after having consolidated such a significant amount of the organization, what we needed to be aware of. Yes, we did find things that we, as a new management team, took a different judgment on, and we did take a different judgment on those and that represents the bulk of what is net -- was raised as an expense in the $52 million.

We, as a management team, also made a call and was backed by the Board to change our accounting policy on the way in which we value stock. So those are 2 things that we distinctly took a proactive approach to, Steve. I appreciate that the former had a very unpleasant consequence to the P&L. The final one around what we did note was a mistake around the intercompany balances. That has been something that has clearly been present for a while. We had to stare into that and recognize that and deal with it.

Why did it occur? The complexity of this business, the systems environment, and all those things contribute. But finally, I'm going to say, from a management perspective, that's on us to have got right before. I'm not going to look at the auditors and say it was their job to find that. We should have been on that first. But Alison, I might hand to you.

Thank you for the question. Before addressing the specific question, if I can just highlight our role as auditors. Management prepare the financial report, which the Board approve. Our role is to give an independent audit opinion on the financial report as a whole, providing reasonable, not absolute, assurance that it's free from misstatement. We plan those procedures based on areas where we believe there's a higher likelihood of misstatement.

We do acknowledge there was a prior year error. The prior year audit was performed in line with applicable accounting standards using the information available at the time. The issue later identified was not evident at the time we prepared -- performed our prior period audit. Once identified, we did work with management to assess the impact of those errors and ensured it was corrected and disclosed appropriately as you can see in Note 3 of the financial statements.

We updated our risk assessment and our audit approach accordingly in the current year. We also outlined in terms of the question in respect to the significant items in relation to our audit, we don't comment on specific matters. We do note, though, in respect to the audit work performed in those areas, we assessed those in line with Australian accounting standards, ensuring that they are appropriately treated and disclosed in respect to the financial report as a whole.

Did that answer those questions?

I think I've got as much answer as I'm going to get. I guess I have got a follow-up question, maybe that's more to the CFO or to Angus is like, has the review of the balance sheet been completed? And if so, does that mean you take ownership -- fair enough, mistakes we made in the past. Do you take ownership from this point forward as far as write-downs, et cetera? Or is it something that's still ongoing? I know there's -- you may be looking at the New Zealand business to some extent?

So the starting point is make sure I take account in ownership for what we've just done. So I'm not looking to blame the past. That's my responsibility now. And clearly, anything that happens to the future is without a doubt my responsibility. The balance sheet review that we conducted in July, that is complete. We continue to look through this business as we look to simplify it.

I think the simple stat is prior to me joining, lots of good work. We went from 43 ERPs to 19 over my single year tenure, 19 became 17, and our plan is for 17 to become 15 by the end of this year. That level of complexity probably tells you a story in its own right. I'm not looking to find issues nor is Kim, but when we do, we'll deal with them as and when they arise.

But our job is to make this business simpler to the comments I made earlier.

Okay. And will you be putting the audit out for tender or not?

Not this year, no.

We'll see if there's any other questions in the room? At the very end, there will be a general questions, please. Okay We'll come back to you then certainly, sir. So can I just check, are there any questions online?

There is one question from Stephen Mayne in relation to when was the external audit last competitively tendered and when will it next be competitively tendered.

So Stephen, I don't know the answer to the first part of your question. But as I said, for this year, we're not going to be changing away from PwC. With a newly constructed Board and newly constructed audit committee, we'll now look to what our plans are for the future. At this stage, for this fiscal year, there will be continuity. No other questions online?

No further question.

Fantastic. Thank you. So I would now ask the Company Secretary to record that the audited financial statements and the related reports for the year ended 30 June 2025 have been received and they've been considered by shareholders.

Moving to our next resolution. The next item of business, Resolution 1A, relates to the reelection of Jackie Korhonen as a Director. Jackie was appointed to the Board on the 1st of February 2025 as an independent Nonexecutive Director and her qualifications, background and experience are summarized in the Notice of Meeting. I'd now like to invite Jackie to briefly address the meeting.

Thanks, Angus. And good afternoon, fellow shareholders. As Angus mentioned, I joined the Bapcor Board as a nonexecutive Director in February this year and I have over 35 years' experience in the technology sector with a track record of leading large-scale transformation programs. I welcome this opportunity to continue to support Bapcor as we invest in technology to improve customer experience and to simplify our business.

If reelected, I'll bring practical hands-on experience in digital transformation, data and technology governance and risk management to the Board. My focus will be on helping to ensure Bapcor's technology investments deliver tangible improvements for customers and team members while strengthening our operational resilience and data-driven decision-making, all the while keeping our business and our customers safe.

As a member of Bapcor's Remuneration and ESG Committee, I will support remuneration and talent frameworks to attract and retain high-quality people while aligning risk and governance to drive sustainable performance and shareholder returns. In addition to my role at Bapcor, I sit on other boards in other industries.

I feel this exposure assists me bring different perspectives and insights to our Board decisions. If elected today, I'll work diligently with my fellow directors and management to drive growth and create shareholder value. Thank you for your consideration.

Thank you, Jackie. The resolution appears on the screen, and I'll take it as having been read. Also appearing on the screen are the details of the valid proxy votes on this resolution. I'll now turn to questions. Are there any questions in the room in relation to this resolution?

Steve, why don't you jump first? You go first and I'll then come to this gentleman.

Two questions. Same questions for all the directors up for -- I'll just ask them once, so I don't take up your time. First question is related to corporate governance. Given having an Executive Chairman is completely contrary to the ASX and ASA governance guidelines, what will you do beyond your usual director duties to ensure that high corporate governance standards are upheld? That's the first question.

Second question is, we represent retail shareholders. And really, you can't expect retail shareholders to put their money into Bapcor if directors aren't willing to. I know there's minimum standards. No one really achieve much in life aiming for the minimum. Will you commit to buying a significant number of shares compared to your own wealth given that Bapcor's share price is where it is, and hopefully, it gets to somewhere a lot better? That's my 2 questions.

Thanks, Steve, for the question. As part of taking on the role at Bapcor in February, I did some due diligence, particularly with Mark, our Lead Independent Director, on the Executive Chair and CEO role and how it worked. Mark explained to me how the role worked, particularly whenever there's decisions to be made or any conflict how that's handled. He gave me confidence that the Board and the understand the clear separation and appropriate governance when it comes to the performance of the CEO and that we provide opportunities for shareholders to talk to the nonexecutive directors.

And I got myself very comfortable that at this point in Bapcor's journey that this is the right thing to do for the company. Yes. And I think all of us have gone through the same process. There are times in meetings where Angus excuses himself, Mark takes the lead, and we have discussions that are appropriate without him being there. So I became quite confident, and I think it's the right governance at this point in time.

On the shareholding, we have a policy that I will adhere to. I've already commenced buying some shares to align with that policy. And yes, I'll absolutely comply.

Thanks, Jackie. Please pass the mic James. around to this gentleman, please.

Michael Barrett is my name. I'm just an ordinary shareholder. I was in the very early in the float. I think I paid $2 of the shares when they came on market. The question I have for the directors putting themselves up today, is have you done a formal training course in corporate governance either through the Institute of Directors as part of a degree program or something like that because I served on the Board at one stage, and I found that it was a real hassle having fellow directors who hadn't done that sort of formal training and contemporary as well because legislation is changing quite frequently?

Thanks, I appreciate it.

You want each of us to go along.

Yes, that might be the simple thing to do, please.

So yes, I did the AICD course as well. I also did the New Zealand Institute of Directors course. I also commit to keeping continuous learning. 3 years ago, I did an ESG course through London Business School as well. The past year, I've done a program through INSEAD on executive coaching as well. So I believe in continuous learning. And yes, so that would be my answer.

Thanks, Mark, and thank you for the question. Yes, I've also participated in the AICD course. I attend a lot of -- there are a lot of free seminars that you can attend through law firms and other professional services firms on matters that are particularly relevant and up-to-date and relevant for nonexecutive directors and for company Boards in general and I'm a lawyer by background, and I was the Company Secretary and General Counsel of and Lendlease subsidiary. So I'm very familiar with corporate governance requirements.

My name is Lachlan Edwards. I'm one of the new directors. Thank you for the question. I guess part of my executive role is that I advise companies and Boards. So I am keeping up to data on these matters every day as part of that. In addition, I chair a number of Boards or a nonexec director on them. So in those capacities, I have to keep up with all of the requirements, and I do so. And in my last public company Board, I also was Chair of the Responsible Entity Compliance Committee for that company, which kind of takes you to a higher level of governance again. So yes, I'd like to think that I keep up to date. And I think your question is very pertinent something we should do. Thank you.

Yes. Thanks for the question again. Yes, I did the AICD Company Directors course quite a few years ago. And as part of being a member of the AICD, I commit to annual training. The AICD actually has a target for its members to attend courses throughout the year. So I make sure I keep up to date.

I sit on a number of different Boards, 2 other listed Boards, 1 government Board and on nonlisted Board, 2 of them in the financial services sector. So as part of my Board responsibilities there, I get annual training from each of those Boards. and particularly on regulatory issues that are, as you mentioned, constantly changing.

And yes, I think part of the great thing about being a Board Director is that it is a job that gives you continuous learning, and that's part of the reason that I like being a director is because it is a role that I can continuously learn and developing.

As you'll hear when I give my presentation later, I've been a nonexecutive director for over 20 years. So obviously, so I have, obviously, quite a lot of non-executive experience, which I can draw upon. I'm also a fellow of the Australian Institute of Company Directors. I'm a former partner of KPMG and obviously, all those roles and memberships, et cetera, require and which I undertake regular professional development, which is very, very regular, very -- and there's lots of opportunities to do that.

Currently, the big one is obviously around AI, et cetera, but we certainly try to keep ourselves contemporary and up-to-date with what's going on. But the experience, I think, also accounts for an awful lot.

Yes, I agree also that it's a really important question. And similarly to some of my colleagues or all of my colleagues, I attend a variety of programs every year around governance as well as other topics relevant to non-exec directors. Sort of hesitate to say I've been a nonexecutive director for around 25 years that you learn and you keep learning during that time.

I was made a life fellow of the AICD 2 or 3 years ago. in recognition, I think, of the governance areas that I cover. I've attended various AICD programs, but I took the 5-day program for around 8 years back along. So I think it is important that we keep up because you're right, the rules do keep changing. But as Jackie said, it makes it interesting. It keeps us motivated and interested in what we're doing, it will be a shame if it was static. So it's a really great part of the role to actually keep that learning.

Can I ask both Kate and Karen at the back are there any questions online?

No questions on this item of business.

Great. Thank you. As such, I'd like to then formally put this resolution to the meeting. The next item of business is Resolution 1B and this relates to the reelection of Annette Carey as a director. Annette was appointed to the Board on the 1st of October 2025 as an independent Non-Executive Director and her qualifications, background and experience are summarized in the Notice of Meeting. I'd now like to invite Annette to briefly address the meeting.

Thank you, Angus, and good afternoon, everybody. So this month, I joined the Bapcor Board as a Nonexecutive Director bringing more than 35 years of executive, legal, operational experience in logistics, supply chain and security sectors. Before commencing my nonexecutive career, I held CEO roles at Linfox Logistics and Linfox Armaguard and was also the Executive General Manager International at Australia Post.

I'll bring practical expertise and operational leadership, supply chain and risk management to the Board with a focus on supporting Bapcor's extensive distribution network, strengthening supply chain resilience and helping deliver improved outcomes for our customers, our team and our shareholders. Some of you may know or may not know that Linfox has a very large network of mechanical workshops, so I also bring customer lens to my role as a director here.

I welcome the opportunity to support Bapcor as it continues to implement a robust supply chain strategy to safeguard Bapcor's competitive supply chain and ensure products are in the right place at the right time for our customers. In addition to my role at Bapcor, I sit on the Boards of Sigma Healthcare and Kinetic Group. And next month, I'll be joining down at ADI. These roles, along with my experience as an executive, allow me to support the Board and my Board colleagues and management team to deliver and implement Bapcor's strategy and to drive shareholder value. Thank you for your consideration.

Thank you, Annette. The resolution appears on the screen, and I'll take it as read. Also appearing on the screen are the details of the valid proxy votes on this resolution. I'll now turn to questions, and I'll see if there are any questions inside of the room.

Steve, I know that you've asked us all the same 2 questions. So just following up on Jackie's comments, I went through a very similar process, obviously, spoke to Mark, in particular, the Lead Independent Director about how the process of an Executive Chair and CEO worked. And I also spoke to the other nonexecutive directors on the Board.

And I also indeed spoke to Angus about the role and how it was working. And I was satisfied that there was sufficient framework around governance and separation when it needed to be separation and avoidance of any potential conflicts of interest. In terms of holding shares, yes, I plan to do that this month because of what has happened with the trading hold, et cetera. and the information that came to light was obviously cautious about buying shares until we got past the AGM, but it's certainly my intention to do so.

Just checking any other questions from inside the room. Karen, can I ask if any questions online?

Yes, I've got a question from Stephen Mayne. This situation at Bapcor is unusual. We had the mass resignation of 3 independent directors on July 23, and then their mass replacement with 3 new appointments effective October 1. As 1 of the new directors, could Annette Carey detail her experience with the recruitment process and whether she knew any of the existing directors before joining the Board? And could the Chair detail whether any of our major shareholders, such as Australian Super with 16% were consulted before the public announcement on the personnel being canvased to repopulate the Board in these trying circumstances? It's fine for this to happen, and I'll be voting in favor of all new directors today.

Okay. Thanks, Stephen. So the process was I was approached by the executive recruitment firm that was engaged by the Board to do the search. I had a discussion with them. I had a look at Bapcor obviously, I had been following Bapcor in the financial press, so I was aware of some of the issues.

I went through a series of interviews, both with the executive recruitment firm, and I was able to ask questions, get answers to any concerns that I had. I spoke to each of the nonexecutive directors. I spent time with Angus. I then went through another round of interviews and a process of due diligence, were provided with quite extensive information, which took some time to go through. I came back with follow-up questions.

And at the end of that process, I believe there are a number of people who were shortlisted, and I was offered the job and I took it knowing that it was going to be a real challenge, but I actually like a challenge. I led a cash business during COVID, so I'm not afraid of tricky times.

So yes, in terms of my relationship with other directors, I have known Angus professionally as a customer and service provider in my role, primarily at Linfox. We never met outside our professional relationship, but we would attend meetings to negotiate the rates, particularly for Pacific National as we're 1 of their biggest customers. So that was always fun.

And Kate Spargo, I met several years ago at Sigma. Kate and I served on the Board of Sigma Healthcare together for about 2 years, but I had never met Kate prior to that. So they are the only relationships that I have with members of the Board.

Thanks, Annette. Stephen, to your second -- to the second part of the question, and maybe I'll come back. The second part of the question in regard to the way the directors were selected if you like, so we did use an executive recruitment firm who went to the market and looked for people.

There were clearly a lot of names we've got thrown our way. They were all put into that executive recruiter for them to do the initial passing over that. And I can absolutely say no shareholders were consulted. We did not go to our shareholder base, asking for them to make nominations.

So Karen, any other questions?

I have another question from Stephen Mayne. Many thanks for embracing best practice transparency and releasing the proxy of votes to the ASX along with the formal addresses before trading commenced this morning. The 90-plus percent support for all resolutions, including Annette's 93% support is relevant given the media campaign activist investor, John Wiley has been running against the Board leading into the AGM.

It was great to also guess the head count data showing that only 365 of our 14,521 shareholders engaged with the Computershare proxy voting system. We know now that only 2.5% of the shareholders voted, but those who did collectively own 74.1% of issued capital. showing how corporate voting in Australia is a big investor game with retail shareholders barely participating.

What sort of engagement leading into the AGM did the Board have with the 7 substantial shareholders disclosed in the annual report, including Mr. Wiley? And the second part, I think Angus, you've answered, did one of them suggest a net carry to Board?

So Mark, I want to leave the -- between you and Kate, you led the pre-AGM engagement.

Look, going right back to 2020 when we had a strike against the rem report, we've realized we have to engage pre-AGM actively with our shareholders. That hadn't happened by the chair previously. So the chair and the Chair of Rem has always engage you with major shareholders and proxies. Obviously, now as we moved into a situation with an Executive Chair, what we've done last year and this year, is we've met with major shareholders and all the proxies, including the ASA, the Australian Shareholder Association.

Angus has joined on the first 10 minutes or so to answer any questions. He's dropped off the call. and then it's been left to us as myself and independents to cover governance matters to cover rem report, to cover ESG. And so that's what we did this year. And we think that's a good practice. And we answered the questions they had leading into this AGM.

I think just for completeness, those major shareholder engagement included.

Yes, it did include, sorry, I should have said that.

Karen, anything else online?

No further questions.

Thank you. As there are no further questions, I'm going to put this resolution formally to the meeting. Might need to offer a toilet stop along the way here. Although I will jinx myself and say that no planes have landed, that's a good start from noise.

So the next item of business is Resolution 1C. This relates to the reelection of Patria Mann as a Director. Patria was appointed to the Board on the 1st of October 2025 as an independent Non-Executive Director and her qualifications, background and experience are summarized in the Notice of Meeting. I'll now pass over to Patria and invite her to briefly address the meeting.

Thank you, Angus, and good afternoon, shareholders. I also joined the Bapcor Board as a Nonexecutive Director this month. I have more than 20 years of nonexecutive experience across ASX listed and financial services organizations. And I will draw on that experience to support the implementation of Bapcor's strategy aimed at improving shareholder value. As an experienced audit committee chair across multiple organizations, I have been appointed as the Chair of Bapcor's Audit and Risk Committee.

I will apply my deep expertise in audit, risk and governance to focus on the strengthening of financial discipline, controls, oversight and governance alongside Bapcor's CFO, Kim Kerr. In addition to my role at Bapcor, I sit on the Boards of Bega Cheese, GWA Limited, GDI Property Group. And from these, there are a number of relevant and overlapping experiences that I can bring to the Board.

I've considered my workload and confirm that I have the capacity to commit the time required to the Bapcor Board. I also believe my past and current roles provide me with relevant perspectives and insights to support well-rounded Board discussions and decision-making. If elected today, I look forward to being part of Bapcor's journey through its next chapter. Thank you.

And while I'm here, I'll answer, Steve, your 2 questions. On the executive chair role, I actually have that on another Board. So despite knowing it's not considered best governance, I know it can work if done properly. So -- and I also did my same due diligence because that was one of my first questions when approached about the Board. And I do believe after my diligence and discussing with all and now being attending the Board meeting and having exposure to the more that it is the right thing to do and the right place for this company right now just to lead us through this period, particularly with the focus that Angus has got on turning every rock and sorting this place out for shareholders.

On the shares, absolutely. I always invest in the companies I'm on the Board of. But with the timing of when we were appointed, it was all very last minute and the trading window has been closed. I believe it opens sometime after this meeting. So then we'll have the first opportunity to actually invest. Thank you.

Let me turn to the room again and see if there are any other questions from the floor. No. Karen?

No questions on this item. .

Fantastic. Thank you. With that, there are no other questions, I now formally put this resolution to the meeting. Behind me is the screen indicates the position. I'll take that as read. also appearing on the screen are the details of the valid proxy votes on this specific resolution.

Thank you. The next item of business is Resolution 1D and this relates to the reelection of Lachlan Edwards as a director. Together with Patria and Annette, Lachlan was appointed on the 1st of October 2025 as an independent nonexecutive director, and his qualifications, background and experience are summarized in the Notice of Meeting. I'd now invite Lachlan to briefly address the meeting.

Thank you, Angus. Good afternoon, fellow shareholders, and I say that partly to answer 1 of the 2 questions that I know I have to answer in that I am already a shareholder of Bapcor. I think I own about 14,000 shares. Let's take that as an approximate number. And it is my intention to acquire more shares.

I came off the Board of HPI in February, I think it was of this year when we completed a hostile takeover from Charter Hall. And if you go back and look at the shareholding I had in that, you'll see, yes, I do more than the minimum. So I intend to do so here. And once the window opens in the next day or so, then as long as Angus gives me permission or Mark, whatever the process is, then I will make sure that I might start doing so.

I bring extensive corporate advisory, capital markets and turnaround experience to complement the skills of my Board colleagues. I will apply that hands-on experience in capital management, corporate and debt advisory and turnaround to support our management team and perhaps particularly Kim, as they ensure that Bapcor is in the best possible position to restore growth, defend value and improve returns for all of us who are shareholders and stakeholders in this business.

Over 35 years, I have held a number of senior roles in major corporate advisory firms including Lazard Australia, Goldman Sachs, both in Asia and Europe, and then in Rothschild & Sons, again, in Asia and in London. In those roles, I've provided advice to the Boards of many public companies in some of the world's most complex situations across a range of industries.

Turnarounds are difficult and they require all stakeholders to come together to get through difficult times and create value on the other side. At the center of that is the Board and the management team, and I have had extensive experience in these particular situations.

And while I'm at that point, I will answer the other of Steve's questions. the ASA's questions, which is the question about the Executive Chair. It was my second question. My first question as a Board Director was always about health and safety. But the second question was, what is the reasoning behind this. I heard the reasoning behind it and the ability to judge how that works I think, will come with the fullness of time.

But what I would say is this, when you're in a restructuring and turnaround of the business and particularly one that's as large and complex as this, communication and understanding between Board and management is incredibly important. And I actually think there's great value in this situation for shareholders and stakeholders to actually combine the two roles. So in that way, I would say, while the general corporate governance principles are right, you do have to look at their applicability in each situation.

And my judgment is that this is a situation where it is warranted. And I look forward to seeing it play out, and I look forward to hopefully seeing that turn into benefit for shareholders over time. In addition to my role at Bapcor, I'm the Managing Director of Associates, which is an independent corporate advisory boutique, which I founded, and I serve as the Chair of a private hospital, Matilda Nepean Private Hospital in Sydney and I'm Deputy Chair of the company. Until recently, I was on the Board of HPI -- have I run out of that. Maybe that's a sign that I'm talking too long.

If reelected today, and I ask your vote, I will partner with my fellow directors to provide the governance appropriate to support the management team as they drive operational recovery, capital efficiency and sustained value for all of us as shareholders and uphold the Bapcor brand as great places for our staff and our customers to come together. Thank you very much.

Thank you, Lachlan. So the resolution appears on the screen, and I'll take that as read. Also appearing on the screen of the details of the valid proxy votes on this specific resolution.

With that, I'll turn to see whether there are questions in the room. And Steve, if you want to go again, you're more than welcome. But yes, are there anyone else inside of the room? No. Karen can I turn it to you?

No online questions have been received on this resolution.

Thank you. So I'll now formally put this resolution to the meeting. The next item of business is Resolution 1E and that relates to the reelection of Mark Powell as a Director. Mark was appointed to the Board on the 1st of September 2020 as an independent Nonexecutive Director and was appointed as Bapcor's Lead Independent Director on the 22nd of August 2024.

Mark's qualifications, background and experience are summarized in the Notice of Meeting, and I'll now invite Mark to briefly address the meeting.

Thank you, Angus, and good afternoon, everyone, both here and online. As outlined in the Notice of Meeting, I was originally appointed to the Board on the 1st of September 2020. And following Angus' appointment last year, I was also appointed as the Lead Independent Director. I've got over 30 years, it's probably 35 years now of CEO and executive experience, started out in mining but most of our experience in the last 30 years has been in retail, wholesale and logistics in Australia, New Zealand and internationally.

In my executive career, I was a Divisional Director for Booker Wholesale, in the U.K., Logistics Operations Director for the U.K. retailer, Tesco; Managing Director of a third-party logistics provider in Spain. I ran Walmart's logistics operations in Canada before immigrating to this side of the world.

Since being in this side of the world, I've been CEO of the retail operation warehouse Australia. I've been CEO of Warehouse Stationery in New Zealand, which is like office works. And my last executive role between 2011 and 2016 was Group CEO of the Warehouse Group, the retail group in New Zealand before transitioning into a nonexecutive director roles.

In addition to my role at Bapcor, I serve on the Board of JB Hi-Fi, NZX listed My Food Bag and still famous for making chainsaws, et cetera. I was for me on the Boards of 7-Eleven and Kiwi Property Group. These roles have given me a broad commercial viewpoint to contribute to Boardroom debate. And I can assure you that there is debate in the Boardroom and help management team focus on simplification and driving evidence-based decision-making.

The last 5 years on the Bapcor Board, have, without doubt, been a challenging journey, that's perhaps an understatement. If reelected today, my focus will be to help ensure a smooth Board transition with the recent significant Board refresh. and as Lead Independent Director to continue to support and provide appropriate challenge to Angus and the executive team to help deliver operational improvement value for our shareholders.

If reelected today, I will continue to work closely with the Board and management to drive the turnaround of this business. Probably, I'd like to comment on the Executive Chair and CEO role, obviously, my perspective is slightly different to some of the newer directors. I was here when it was put in place.

There was a context to why we put in place. It was shared very clearly at the time and with all our shareholders, and they supported that. It was put in place because we were in a difficult situation without a chair, without a CEO and subject to outside bid as well. I think it was the right thing to do then, and I think it's the right thing to do now without wanting to embarrass Angus. I think we've got Executive Chair and CEO, I think 3Ts and 3Cs. We've got -- not just CEO, CFO as well. I think I mentioned Kim. We've got a CEO and CFO, Executive Chair, who is completely committed to the truth, completely committed to transparency on that truth, and I trust them that they'll keep on turning over stones to get to that.

And the 3 Cs are I think they've got a character, competence and courage to drive that for the long-term sustainable benefits of shareholders, not just short term as well. And so I completely support that. I think they're doing that. It's hard, it's painful. I get that. but we've had to face into these things, and I think it's important as well.

So I think you can tell I support the role, the combined role to present time, and we've talked about it, Stephen. I know the questions, as others have said, but yes, I think it is appropriate for this time for this turnaround.

Thank you, Mark, and I will say -- so the resolution appears on the screen. And again, I'll take that as read. Also appearing on the screen of the details of the valid proxy votes for this specific resolution. And I'll now turn to the room to see if there are any questions. Steve?

Thank you. Thanks, Mark. Yes, I think we understand each other. Yes, I understand ASA has general guidelines. And then we have to have guidelines across all companies. We're volunteers. So if you had everyone just making their own choices, it will be chaos. So we understand that every business is different. I think those guidelines still make good sense overall. You've got to make your own judgment.

Just as a preamble to this question, I'd say I voted against every resolution at this company for the previous 2 years and I think with good reason. I think the share price would tend to bear out that there's been a lot of red flags. I'm voting for everything today for the reason I think you deserve the change to turn things around. Most of you are new. The same with a lot of key management people, I think there's a lot of new people. Good luck.

My question is about the past, I guess. Why did the 3 directors resign? And yes.

Yes. And I'm probably the only person who can speak to the past. And that question has been asked. They gave no reason. That is the official answer, that's the true answer. And I recognize that leaves people go in, that leaves it to inference. And I think people have made inference. They're probably not far off on some. It would be my guess. They line up with my inferences. But we don't know.

So anything beyond that goes to speculation. I recognize that for us was unsatisfactory, it was unsatisfactory to me and the whole way that happened is unsatisfactory.

Thanks, Mike. We check if there any other questions in the room? Karen, anything online?

Yes, Mr. Stephen Mayne has a question. It is not good practice for an Executive Chair to use the CEO voting exemption available under Australian law and not putting yourself up for election to the Board. Why didn't Angus McKay put himself up for election this year after I requested this last year? And will he commit to do it next year? Can Angus site any other ASX 300 company which has had an Executive Chair who has never been elected by shareholders? Given all the tumult and Board turnover at the company, it is reasonable for shareholders to be given an opportunity to reflect on the highly unusual situation of Bapcor opting for an Executive Chair.

As Chair of the Nomination Committee and Lead Independent Director, will Mark Powell, who is facing reelection today ensure this happens at next year's Annual General Meeting or are we intending to make it 3 straight AGMs where our new Executive Chairman is continuing to hold down the most powerful position at the company without receiving a mandate from shareholders?

We're not going to make that commitment. We'll take it on note. We've got a number of new members on the Board. We'll discuss that, but I'll take it on note, but I'm not going to make that commitment.

Karen, any other questions?

No further questions. .

Thank you. As there are no more questions, I'll now formally put this resolution to the meeting. So now as previously advised, I intend to hand over to Mark Powell for Resolutions #2 and 3.

Okay. Thank you, Angus. So we've got the slide up there on Resolution 2, which is the adoption of the remuneration report, and good afternoon again to everyone in the room and online. Resolution 2 is a nonbinding resolution to adopt Bapcor's remuneration report, which was set out in the company's 2025 annual report. The resolution appears on the screen, and I will take it as read.

Also appearing on the screen are the details of the valid proxy votes received on this resolution. So are there any questions in the room related to this resolution?

No questions in the room. Any online?

No questions online.

So as there's no questions received, so I'll now formally put this resolution to the meeting.

Now moving to Resolution 3. This is the approval of the grant of the FY '26 performance rights to the Executive Chair and CEO under the LTIP. Resolution 3 seeks shareholder approval for the grant of the FY '26 performance rights to Angus McKay, the company's Executive Chair and CEO, under the long-term incentive plan. The resolution again appears on the screen, and I will take it as being read.

Also appearing on the screen again are the details of the valid proxy votes received on the resolution. So again, are there any questions in the room regarding this resolution? There's no questions in the room, Karen, are there any questions online?

No questions online. .

Okay. There's no questions online. So I now formally put this resolution to the meeting. And I'll now hand back to Angus.

Again, thank you, Mark. I'll now turn to Resolution 4. Resolution 4 seeks shareholder approval to renew the proportional takeover bid provisions in the constitution for a further 3 years from the date of the meeting. which will ensure that in the event of a proportional takeover bid being made, a general meeting of the company will be convened in order for shareholders to vote on the proportional takeover bid.

The resolution appears on the screen, and I'll take it as having been read. Also appearing on the screen are the details of the valid proxy votes received on this specific resolution. I'll now turn to the room to see if there are any questions within the room.

We did have an approach going back about 9 months ago? Is it...

Longer.

How long ago was it?

15 months ago. 15, 16 months.

What was the process that the Board went through in evaluating that takeover bid because it's one of those things that we might be looking after our own little pile, but it might be better to give the shareholders their money back or do something different and open up the company for joint ventures or other types of strategies of ownership? But I'm really throwing it as an open question really.

I appreciate it. Mark, can I ask you to address it because I think between yourself and Kate, you were there.

Look, Firstly, I don't think the job of a Board is just reject any bid. We're here to do the best thing for shareholders. And if a bid is of a sufficient value that it exceeds the value that's seen in the company by that Board, they should look to recommend that pit. You're not here to just defend for the sake of it.

Back then, we attempted to engage with Bain at the time. It was painful. We had disagreements on the standstill process and some of the process. They were very slow, actually. We found that. And at the same time, we were proceeding to search for a CEO and Chair that's at that time. And it just was very slow progress.

We also had comments from shareholders, who expressed the view that they felt the bid wasn't sufficient either, and they expressed that quite loudly in the media as well. And when we appointed Angus to the role of Executive Chair and CEO, we closed that and moved on. They didn't come back and we moved on since then.

Any other questions inside the room? Steve?

Yes. It was a good question. Just following on for that, I guess, I think it was $5.40 they were offering. Given where the share price is, with the benefit of hindsight, what do you think about the decision that was made at that time? And secondly, has there been any other further approaches, whispers, et cetera, since then?

I'll refer to the time and then I'll hand to Angus perhaps. Look, it was a nonbinding indicative offer. It wasn't a firm offer, and we didn't get into any due diligence, et cetera, either. And I think we made the right decision at that time.

This business is a good, strong core business and with the information at the time, I think we made the right decision because we didn't actually reject it, we just didn't even really get into a process, to be honest. And so there wasn't something to really reject in that sense.

It wasn't like they went through due diligence, and we were recommending to shareholders to not accept a bid that was binding. It didn't get beyond a headline nonbinding indicative offer. It didn't get into anything further.

There have been no other approaches. And I just would reiterate, I mean as much as it perhaps is difficult to believe with people that are vested in the business and dare I say, with an appropriate offer, we will consider that and what is in the best interest of our owners. So that's the only commitment I can make to you and to you, Michael.

There's no other questions in the room. Karen, can I jump to online?

No online questions.

Great. So no further questions, then I will now formally put that resolution to the meeting. So I now confirm that all resolutions at this meeting have been put to shareholders.

But before I close the polling, I'd like to now address any questions in relation to Bapcor generally, and I'll start with questions that may be in the room.

Now I'm looking forward, okay, and I've been with this little company that's got bigger for a long time, okay? So my background is in marketing, okay? And I've been an academic for a period of time and in product management, in most multinational corporations, and have an MBA, graduate diploma in marketing and an economics degree. So that's my space, okay?

And for the last 20 years, I've been [ 708 ] investor. Now I raised it last time about where the company was going and whether you had a clear strategy. Now I actually wrote to Angus when I got home, and thank you very much because you actually replied about 2 days later. And I really appreciate that.

And it's also a test of -- it's my due diligence of whether you've got the right stuff and you do with shareholders. So thanks very much for that. The thing is that I still see a lot of change taking place in this auto space. And I do hold a lot of investment in the auto space. I have Bapcor, and I've got a couple of others related to it. And in addition to that, I invest in the mining industry.

And I've been at -- so in the mining industry, there's huge change taking place with lithium, cobalt, manganese, also graphite. I've got a big holding in graphite and one that I came up across yesterday was scandium. Scandium was used to strengthen aluminum and used in the bodies of motor vehicles in the future to replace high tensile steel because the weight of an EV.

Now I can't see in what I've read in the last couple of days. is that you're really not -- you're not looking into this change as seriously as I would like you to do that. So that's -- it is of concern. Because the other thing that I noticed is that there's a lot of proprietary technology in all of this. And therefore, a lot of mechanics will lose their little practices. And a lot of business will be taken back to the dealers.

Now in addition to that, there's change taking place with the dealers because they're going to become agents of the motor vehicle producers where they don't have to carry stock of cars because the best time to get a car is 3 days from the end of the month. okay? So that's one thing. And I got -- from my wife's little Hyundai, she got an absolutely screamer of a price because of that.

So that's an area that I believe that you need to be looking at a lot closer and I'm not thinking next year or the year after, but what all this building is going to be holding because you might not have the same sort of spare parts sitting in this building. So that's my first little point.

The other thing too is that you probably do realize that BWD, what do they call themselves...

BYD.

Started as a battery company, not as a motor vehicle producer. And they've got proprietary technology. And they're going to change the world quite rapidly. And now the cost of development is being recovered or has been recovered, same with Tesla, the car battery cars are going to become a lot cheaper.

So the thing that I'm starting to see is that I get a bulletin every day out of Germany and battery charging stations are starting to appear all over Europe. And the Americans are doing exactly the same thing. So what are we doing about that?

So if you allow me, I'll take a pass through some of those.

So that's -- yes, so charging stations. So there are fewer spare parts, right? There's 1,100 parts in approximately an ICE, internal combustion engine. Well, all you've got is just a layer of batteries, even the drivetrains are different. So a Tesla is driven through the wheels, not through a transfer of power. So that was -- now the other thing too, is that we're looking at a new divide in the world.

There's the Russian Chinese side, and there's the old-fashioned Western alliance.

I don't know whether we can go into geopolitical tensions in this room but...

So the thing is that's changing the game because of all Trump's tariffs is changing where products are going to be made. And in fact, Hyundai have got factories -- both Kia and Hyundai in Czech only to leave the walls of around the EU. So that's another thing.

If I may...

So I'm really just throwing a few propositions at you. I've got no answers here, but I felt that your strategic plan didn't far enough, okay?

So if I could, maybe I can address some of the questions you put to us.

Now the next point.

Certainly.

You talk about customer service here. My son is an electrician. He's an industrial electrician and he's working on a data center in at the moment, is running on 24-hour basis. They've not -- haven't finished it yet, but they're eager to get it up. And I actually paid for it, I -- paying me back at $500 a month, but we bought a Subaru outback, and the battery has gone flat. And it's a Panasonic battery, which has got a good quality battery. And he shopped around.

The dealers charge outrageous prices and so he rang out Autobarn and the guy said, I can do 1 in 3 weeks. Now that's not what I call customer service. right? So anyway, so -- and he lives in, that was And I think there's one. So I ended up on a 2-hour round trip driving him out in the northern suburbs of Melbourne. The battery he got was a model where the terminals around the wrong way. So we had to go -- we could have gone back to but he being an electrician just changed the terminals in the car, which is really not smart, but he needed to get to work that night.

So Angus, the customer service is still not there. It really needs to be looked after. The other thing is the observation I have from Autobarn because I do shop at Autobarn for a bit of soaps for washing my car is that there's not much traffic in those stores. And I just -- I don't think they're being properly utilized and foot traffic is the main thing of stores. So that's really my soapbox questions. And I'll be happy if you just respond as a gentleman.

I think you've asked -- you've made a number of very valid observations. So let me start with that. But maybe if I start with the bigger picture. So we do spend all the time trying to observe what is going on with, call it, the automobile industry globally and then specifically how that's being applied here in Australia.

I will not profess that we know enough about that yet. That's -- there's more work to be done there. If I go to the world of just the car park that we play in, so we are blessed with the car park in this country that is in excess of 12 years of age. It's one of the oldest car parks in the planet. New Zealand is one further. Yes.

So we are conscious of that. We don't play in the world of cars that are inside of warranty. We wait for them to move out, and we're very conscious of what I describe is from an OEM perspective, the extension of warranties that go on there. So we observe and make sure we're playing appropriately.

To your question around EVs and just the dynamic change in effectively the propulsion portion of the motor vehicle. We watch overhaul because here in Australia, it is progressing at a much slower rate than other markets, and you named Europe, I would agree with you. The second thing is the actual form of propulsion is also changing, the form of energy is changing.

If I go back 8 years, and I'd be happy to talk a little more one-on-one rather than taking the time, 8 years ago, the Australian car park was forecast by some highly paid consultants that we would be by now 2025 with over 35% of the car park being EVs. That's what they said. And that changed dialogues, lots of people started to invest behind charging points and all those kind of things.

Today, we're not even yet at the mid-single-digit point. And the driver I would argue for you is EVs work perfectly well, and we'll come back to where we play in an EV. The single biggest issue is it's range anxiety, yes. the battery. The bigger issue is where can I charge the vehicle. And there just are not enough charging points in Australia. And with a prior life at my disposal, the cost of investing in charging facilities is just exorbitant. You can't make money. So that's why it is not occurring.

The other thing that's occurring is you're now seeing a move from EVs, hybrids are now the dominant form of alternative engine vehicles being imported in the market. There's even again, talk around hydrogen. That's probably a lot longer out there.

So the marketplace we watch like a hawk because it is changing. So the vehicle itself, you're quite right. The motor of an electric vehicle is not something that our warehousing suppliers cater for. We're very focused on the things that go under the car and that I include all the sensor technology, where it be breaking, steering, suspension. Those things we do play in today. Where EVs are at, there's still Tesla beginning to come out of their warranties. So we're focused on where we can future proof the business that we have today, responsibly, and that's what we want to do.

So we do look at that. I won't get into the geopolitical, but yes, I mean the European versus American versus Chinese is going on. My understanding is that's been going on in this industry for quite a while. and we've got to watch that like a hawk, Equally, you have to watch the manufacturers as they bring new vehicles to the country. So again, we are trying to make sure we're abreast of what's going on in that space.

I've talked about charging. Tariffs I think we're all experiencing in the world of dynamic news. If I go back to the end of December, President Trump about to become elected, we all were looking at what that meant for our supply chain, how that would impact us. We did a piece of work that we got comfortable it wouldn't hurt us every week, though with the rattle of the new tariff, financial markets move, but we are very conscious of the production points of the parts that we ultimately sell to our customer base.

To your customer service piece. I wish I had a better answer than that sounds awful, What you just described, that is not customer service. and I will after that just make sure I get a few details. I won't. There will be no sort of -- no, no, there won't be, but I will make sure that I understand what has occurred there, but that is just simply not good enough. I can't say any...

I have another question for you, a supplementary question.

If I could maybe just 1 more and I'll then open it up. 1 more and then I'll open it up to the rest of the room.

Now I noticed that you've got New Zealand up and running, okay. and you've got Thailand. I've spent a little bit of time in Thailand. And the thing is that, for me, that seems like an international division, not one that is a part of the domestic business and one that is a part of an international operation.

And yet you're treating them as two different. One is -- Taiwan is treated as a domestic operation. And the other -- the New Zealand one that's much closer to Australia, the buyer behavior, the industry dynamics, all those sorts of things. Now I realize it's a joint venture in Thailand. But I can't understand the rationale for that.

So obviously, Simon has just recently joined our business and those businesses, the Asian-based business is pointing to our Trade segment. Simon and I are beginning the conversation now that he's got his feet under desk around how we think about those businesses. In all honesty, they are so small. Our priority is what's going on here in Australia, which I think you completely get that obviously, with Martin in New Zealand. So we will get to what we want to do in Asia, but the focus for us has to be Australia.

Other questions?

Michael Millard is my name. I'm representing Tinari Capital, who's CEO is currently overseas traveling. We're the second largest shareholder in Bapcor with 11.1% of shareholding. We have a question for the Lead Independent Director, it's Mark Powell. It is whether and why he and the Board believe it is appropriate and in the best interest of the company to continue to combine the roles of the Chairman and the CEO in the individual of Executive Chair, contrary to established good corporate governance practices and ASX listing rule guidelines. In posting this question, we note that we believe Mr. McKay is a competent executive in what is to believe has a successful track record in his prior role of CEO of 7-Eleven. We believe he is doing his best to improve the good fortunes of Bapcor. However, we believe he should not be both the Chair and the CEO of Bapcor at this time given the deterioration in trading performance of the business on many fronts. The company now needs to separate the roles of Chairman and CEO by appointing a new independent nonexecutive chair, who has the relevant experience and skills.

Mr. McKay's role would become solely as CEO. We believe this because the company faces a very substantial turnaround challenge evidenced by the halving of the share price. The continued run of fresh bad news and the lack of clarity from the Executive Chair as to whether a bottom has been found. To turn around this business, Mr. McKay needs to focus 100% of his time as CEO without having the responsibilities of the Board Chair as well.

The lack of separation of roles of Chair and CEO makes it more difficult for directors to hold the CEO accountable, especially when all of the proposed new directors, the majority of the Board have been invited to join the Board with Mr. McKay holding both roles blurring the accountability. There is no obvious reason why Bapcor should deviate from the accepted good corporate governance practices and ASX listing rules principle 2.4 which recommends separation of the Chairman and CEO roles, a recommendation which is almost universally adopted by corporate Australia.

If the answer is that the company does not propose to comply with the established good governance practices, can you please explain why not? And under what circumstances, it would change that position?

Questions are for me. The simple answer is execution. The simple answer is, and we communicated this when we put the role in place at the start, which was supported by the shareholders. We were very clear. We saw it as a 2- to 3-year time horizon as well. but it's about execution, speed of execution.

The clear question then people rightly ask, which was in your question, is the checks and balances for governance. We're comfortable that's in place. We have extensive processes, which I've shared with John directly as well. All the processes you would normally see in a listed company. We have a nonexecutive director a long time before meeting without Angus, we had it again this morning before the start. We just completed his 360 review. I spoke with every single one of his direct reports who are all here today, plus the Board.

And that's been shared with Angus, will be discussed as well. The question of independence and challenge is there. And as I shared with John as well, to be honest, and frank, I think we have more check in balance than I saw when we had the last 2 previous MDs in this business, and we have more robust debate and more challenge. And as I said at the beginning, I think we have -- for my first time on this Board, and this will sound quite strong. For the first time on this Board, which has been an interesting journey, , shall I say, in the sense of the word interesting. I feel we have a CEO and CFO, who is committed to finding the truth, is committed to the transparency of that, and I totally trust in that, has the character, the competence and the courage to address that.

That isn't about whether he's an MD, CEO, a Chair. That's about the person, and it's about the Board and working together. we need speedy execution and speedy decision-making. And whilst I get checks and bounce to the power and why I appreciate that asking questions today is asking truth to power, and that's good. we need it. And we actually believe it's working well.

Nothing would have been any different with a 2-tier structure other than we might not have gone as fast as we've gone overall. So that's where we're at. We do agree to disagree on the governance question. If there's other things that are of concern, we're happy to listen and engage as we'd always engage with major shareholders. We respect you as a major shareholder, and we'd be happy to engage post AGM, again, to understand evidence-based issues around the role, but rather not just general statements on governance because we addressed those last year when we made the appointment, and there wasn't any issue then in that context at the time.

And we were very clear of the time line on it. So -- but we're happy to discuss. We respect the role of as 1 of our major shareholders. We will listen and want to understand each other. Sometimes we'll agree to disagree because we've -- our duty is to represent all our shareholders. and the company and the good of the company. So sometimes we may agree to disagree with individual shareholders.

But we're always willing to listen and talk and we'll want to do that again post the AGM. Yes.

Other questions, Steve?

I think I've got a shorter question. It's about basically inventory control and distribution systems that I understand you're looking at everything. I guess, by way of background, I used to work for Caterpillar in that area. So I know it's maybe not a straight board as people might think, valuing moving around, et cetera, et cetera.

So the process you're going through. Are you just looking to find out what's actually in the inventory and what it's worth? Or are you looking at an inventory reduction program and looking, I guess, beyond that?

Fair question. Thanks, Steve. So I think the short answer, beyond that. I said in my opening address that the consolidation of those warehousing facilities actually achieved 1 fundamental thing, which sometimes gets lost. We actually regained visibility to all the stock dynamically that was out in those remote locations, incredibly important.

It gave us visibility to where there's duplicated stock, gave us then the opportunity now to slow down what's coming into the country or coming from domestic suppliers. So that allows you to control the supply chain. We still have disparate processing system. So the 1 supply chain notion under our strategy is around that commonality of approach that doesn't necessarily mean you need the same system, but it means you need a common approach to it.

We have a view, which I have shared quite publicly, we have too much inventory. Make sure that, that product is moved to the places where it might stand a chance of being sold, but we can do that quite dynamically and where we can actually have inventory that is relevant to the cars that it serves. So I'm happy to go in a lot more detail around what that might look like. But the reality is we have too much inventory by value, too much inventory by volume. So that is we think our ranges are too wide, and in some cases, too deep.

We need parts that are relevant to the cars that we provide for today and where those cars are much older that we need to have those available, but they don't need to be replicated over hundreds of sites around the country. My final comment is, I'm glad you said it is complex. It is very complex. Little changes can mean some big issues.

This literally is the big syndrome, one tweak here that slows down x and before you know it will be out of stock, and that costs to sales. So we're trying to do this in a very methodical way, but looking at the inventory from a life cycle perspective.

Other questions in the room? Karen, I'll dive to anything online.

Yes, I have a question from Mr. Stephen Mayne. Thanks for running a near perfect AGM from a process and disclosure point of view. Very few companies do this. You offered a full hybrid with both voting and online questions. The ASX didn't offer online voting at its hybrid AGM today.

You revealed the proxies early, allowing for a fully informed debate, something net will no Sigma didn't do yesterday. You followed the agenda, inviting questions on all resolutions something the likes of Macquarie and Cleanaway don't do, instead going for the single job lot approach to questions, which dilutes the focus on individual items and shortens the overall debate.

You even gave us head count voting data, meaning we can see retail shareholder sentiment and better understand the chronic lack of voting participation by retail shareholders at AGMs. Wouldn't you include the head count data in the poll results announced later today and continue your good practice of publishing the full AGM webcast on your website? Apart from all that praise you just need to put the Executive Chair up for election next year and get the share price up. Good luck and see you in 12 months.

Thank you, Steven. I was almost to give you a complete thank you, except for the but. But I would agree, particularly on the performance of the organization, and we get that right, and I'm very optimistic all things follow from there.

In terms of polling numbers unit shareholders, yes, that will come out once we've actually done the final tally. So that's clear. But Stephen, I will just simply take -- I'll take that as a yes. And maybe for the team, let's put this together. So thank you for that.

One last, if there's any other questions? So with that, there are no other questions, that concludes the discussion on general business. In 1 minute, and I will just make it to 1 minute. I won't shorten it or lengthen it. I'd ask that we close the voting system down and please ensure that you cast your votes to all resolutions. I'll now pause to allow you the time to do that. And if you're in the room, your polling cards can be collected. There we go. Thank you so much, but we'll wait 1 more minute before I close the meeting down.

[Voting]

20 seconds before we close the online process down. I think we're done on the minute. So with that, I'm now going to declare that our voting is closed. Rather than waiting to keep you for the result, I propose that we'll close the meeting at this point.

The results of the poll will be notified to the ASX and will be published on our website following the meeting. As this concludes the meeting, I'd like to thank everybody for their attendance, both online and in the room. and I now will declare the meeting is closed.

Good day, everyone, and welcome to the Bapcor Full Year Results Announcement Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Angus McKay, Executive Chair and CEO. Please go ahead, sir.

Thank you, Lynette and welcome to everyone who has dialed in to today's call. As Lynette said, my name is Angus McKay, and I'm joined today by our CFO, Kim Kerr. And together, we'll be presenting the Bapcor fiscal year '25 results. I'd like to remind everybody that you'll only be able to participate in the Q&A session if you've joined us via the dial-in and not by the webcast. Also, please note today's call is being recorded.

I'd like to start today by acknowledging the Traditional Custodians of the country throughout Australia and pay our respects to Elders past and present. We recognize the continuing connection of First Nations people with country across Australia and beyond and in particular, the Wurundjeri people of the Kulin Nation, which is the land where we meet today.

Today, I will talk to the results at a group level. I'll then touch on our strategic priorities and then address each of the segments. I'll then hand over to Kim to talk to the financials in a more detailed manner before closing with a summary. I'll then open for questions.

Before getting into the results, let me remind you that today's presentation of financial results will be consistent with our prior period reporting. Specifically, our view of segments will be consistent with that of the first half of fiscal '25. We will prepare a restated view in line with our outlined strategy and operating model, including the removal of intercompany trading and make that available to you in quarter 2 of the current fiscal year.

I started in the business in late August '24. Since then, the journey has been intense and fast paced. I've continued to spend time with employees, customers, suppliers, franchisees and shareholders, and I continue to clearly see a positive future for Bapcor. My focus has been on understanding the business, what worked and what doesn't, its customers and our people and importantly, our ability to execute.

At the core, it is a strong, good business with committed team members, loyal customers and strong suppliers, but it is overly complex, lacks focus and is too reactive and too short term. Upon joining, I inherited a specific set of actions that flowed from the full year '24 result that were urgently commenced addressing both our cost base and simplifying our distribution structure. These made sense and they needed to be completed.

We have then set about delivering a clear strategy and communicating that to our people, shareholders and stakeholders. This provides clear priorities and allows us to focus on building the business for long-term sustainable profitability. The executive team was reshaped in light of the new plan and with key appointments being Simon Bromell as the EGM of Trade and Kim Kerr as our CFO.

They both joined the balance of the executive team who own and drive our strategy, whilst at the same time focusing the business back on customer, sales and trading and executing that through a motivated and engaged team. Later this morning, Kim will address in detail the significant items announced in our July '24 market release, but allow me to make the following observations.

You'll note that we have modestly increased the quantum of those significant items by some $2.3 million as a result of the final audit and the full year processes. The full year balance sheet review was a necessary and logical step in ensuring the business moves into fiscal '26 with financial clarity following the significant changes across the year. I am disappointed at both the quantum and the nature of the significant items announced, but the business needs to deal with the issues in a transparent manner.

The required business turnaround was always going to be challenging, but I am clear that the review as completed places in a far superior position to deal with the required business and operational change.

Now turning to Slide 6 and the fiscal ' 25 full year results. Pro forma NPAT was down by 8.4% on the prior period. Whilst pleasingly, trade grew over the full year, its performance was offset by both retail and New Zealand, which were hampered by the prevailing macroeconomic environments.

Specialist Wholesale revenue has also been impacted and disrupted by the ongoing consolidations and required restructuring, but I'm pleased to say EBITDA benefited by growing 5.2% compared to the prior period. Despite the challenging macro environment, trade grew revenue by 1.3% and EBITDA by 5.4% compared to the prior period. As previously stated, May and June were below expectation and impacted on our full year result.

The simplification of the business has been a priority over the year. Key actions included the final unwinding of the better than before headcount, consolidation of warehouse sites, reigniting store and branch openings and closures, technology upgrades and consolidations and the integration of our truck and our electrical businesses.

The warehouse consolidation activity was centered on Specialist Wholesale and has impacted short-term performance. We have been focused on driving the change rather than spreading it across multiple reporting periods. New Zealand was impacted by the continuing subdued economy.

That said, we've taken steps to increase our sales competitiveness, accelerate the impact and importantly, the coverage of our call center operations and close underperforming stores. All of this has resulted in a negative year-over-year revenue performance for the group.

We have delivered at the top end of the range provided for our cost savings at circa $27.5 million with a gross exit rate of $40 million into FY '26. We've been disciplined in our capital management, generating good cash flows with conversion sitting at 81.8%. We have declared a final dividend of $0.055 per share, representing a full year payout ratio of 57%.

The strategic reset of the business is underway and importantly, the cultural changes required for us to be at our best are also well underway. We have closed or relocated 70 sites, including the considerable efforts of shutting 23 smaller DC locations and centralizing the associated stock. 21 new branches or stores were opened, reigniting this core growth lever and our investment in strategic technology solutions has continued.

Now turning to Slide 7. We've included this slide to accurately convey the amount of site-based change we have undergone in 2025. These exits or moves simplify our business, allow for greater visibility to our operations and inventory and improve our safety posture. In short, we believe they set us up for the future.

There can be no doubt that the extent of these closures has impacted our operations, especially in Specialist Wholesale, but they are what was required to reposition the business. The new sites and DCs, I believe, are exciting. The new stores and branches represent a return to growing our network, one that is overdue. The new DCs are smaller warehouses that support the whole of business growth in New South Wales, South Australia and Western Australia.

Now moving to Slide 8. A reminder that on the 28th of April '25, we outlined 6 strategic imperatives that will guide the wider business in its reset. They are optimizing our network, one supply chain, customer focus, digitalizing the business, store fitness and simplifying the business. Whilst the imperatives are very new, we have already made progress. On the next 6 slides, let me quickly walk you through that picture.

Optimizing the network. As a reminder, we have over 900 sites across Bapcor. Those require active management, including closures and consolidations, something has been lacking over the past years. Fiscal year '25 was busy as we significantly changed our legacy network to make it more efficient and fit for purpose. These changes enable us to leverage our investments in the wider scalable supply chain and to commence a more nuanced approach to our expansion.

The work in this space has clearly begun with EBITDA benefits already materializing. But what is to come will materially shift our customer-facing capabilities. We are already offering different delivery models from our major DCs, specifically catering for different businesses and different customer needs. In most cases, the customer actually decides the dispatch location. Optimizing stock locations presents an opportunity, one that will be pursued in New Zealand first and then into Australia.

One supply chain. Activities under this imperative have also commenced and they align to the work outlined on the previous imperative. With 5 state-based facilities now up and running, the next 12 months is about honing their operations and leveraging their scale. It is only in the last few months that we have commenced direct shipments into our DC locations with prior practice being to redistribute from DC Victoria.

This capability, combined with increased levels of offshore consolidation presents an opportunity, noting that offshore consolidation has also only just commenced in the past 2 months. We'll shortly be going live with an extensive freight tender here in Australia, simplifying our carrier structures and, of course, looking to optimize both cost and service to our network and our customer base.

Customer focus. Understanding our customer is firstly, the most critical and important thing ahead of developing and growing our customer-focused solutions. Launching a standardized NPS measure across the businesses, which only commenced 3 weeks ago, plus undertaking a review of our customer experience across our digital channels is only the beginning.

Whilst other actions are critically important, we've chosen to sequence these imperatives to commence later in the fiscal year post the work on understanding our customer experience and our NPS position. New Zealand's contact center platform is now live, one that the Australian business will learn from before examining that path. Our retail customer experience has materially changed in fiscal '25 with new staff, new promotional rotations and new brand communication.

Digitizing the business. The work undertaken in fiscal ' 25 will continue as we enhance our B2B and our B2C platforms in Burson, Autobarn and Autopro. The pricing engine in Burson went live in fiscal '25 and was closely followed by New Zealand in early fiscal '26. We expect to optimize and utilize both over the years to come.

New Zealand has commenced its work establishing the right range by location and Australia will follow suit during the current fiscal year. Listening to the feedback from our customers on how to be easier to deal with is a critical element of what we need to do, and the functionality behind that needs to be built to accommodate speed, service and accuracy.

Store fitness. Retail saw extreme levels of staff change as we went about increasing our customer-facing capability. This was coupled with minor store upgrades that will be accelerated in fiscal '26. Early indications highlight the positive customer reaction to the enhancements that we've already made.

We retain our confidence in the truck and electrical businesses and we intend to back this perspective with increased customer-facing locations in the fiscal year we now are in. We are finalizing the development of the store staff training program and we'll roll that out with effect in quarter 2, reaching more than 500 store leaders over the fiscal year.

Simplifying the business. This is the easiest of our imperatives to say, but without doubt, the hardest to do. We've begun the process of deconstructing our internal selling and as mentioned above, our pricing tool rollout has commenced. We'll continue to further consolidate our ERPs over the next year with 2 more planned for elimination.

We have already been clear on the Bapcor priorities, a single approach to safety, a common view of our employees and a single unified set of values. Our approach is to stop doing those things that do not add value and to eliminate things that detract from our mission. As you might appreciate, given our siloed past, this is a significant change management exercise.

Let me now turn to the individual segments. So moving to 16. I now turn to the segment performance. Our largest businesses, Trade and Specialist Wholesale contributed 38% and 35% of our group revenue, respectively, and together make up more than 75% of group EBITDA. Nondiscretionary spend continues to be the lion's share of revenue split between trade, wholesale and retail.

We continue to see a shift away from discretionary retail spend and the changes to government support for accelerated depreciation have impacted equipment sales over the past few years, both in Australia and New Zealand. During the full year, our Trade business grew total revenue by 1.3% and pleasingly, EBITDA grew by 5.4%.

Specialist Wholesale increased EBITDA by 5.2% year-over-year despite the increase -- the decrease in revenue and the main attribution to the significant network reconfiguration during that period. Let me now deal with each segment one-on-one in more detail.

Trade. Trade has maintained market share in both the parts, tool and equipment categories. Looking more closely at the revenue splits for Trade. Parts was resilient and grew by 1.4% over the comparative period. We are making solid gains in sales to our key accounts and see further opportunity in fiscal '26, leveraging the strength of our relationship at a store level with these customers. May and June were disappointing with the team now very focused on recovery and sustainable performance.

Tools and Equipment sales were up by 0.7% versus the prior comparative. Equipment specifically is a real opportunity for us, but it requires focus and specialization. As I mentioned earlier, our network expansion continued with 12 new Burson stores across all states. In addition, we acquired the ACT-based independent parts distribution business, Motor Spares in October of '24. These businesses were consolidated into 2 existing Burson stores in the ACT. This is a model for further small-scale acquisitive growth.

Importantly, we also closed 6 stores that were underperforming. EBITDA was up 5.4%. EBITDA margin also grew over the full year by 66 basis points. We managed our cost base effectively, but we must concentrate on growing our top line.

Investments in technology upgrades continued with the key focus being on Ezyparts, our parts catalog. With a growing share of orders now being placed online, improving this platform is driving operational efficiency within Burson. Whilst a small contribution, we've stabilized our Thailand-based businesses that are now both EBIT positive and free cash generative.

Specialist Wholesale. This business undertook significant change over the period, including business consolidation, site closures and amalgamations. This has been a complex change program in the short term and no doubt has disrupted the normal business cycle. But these are foundational steps in building a simpler and more robust platform for the future.

The changes have enabled new capabilities, they have released costs and have improved both EBITDA and EBITDA margins. They've also changed our operational characteristics, including our culture and our safety posture. Specialist Wholesale declined in revenue by 3.2% compared to the prior period. Specialist Networks and Wholesale were down by 2.1% and 5.3%, respectively. EBITDA and EBITDA margins improved over the prior period as those financial benefits from the changes flow through the P&L.

Specialist Networks revenue was also impacted by our JAS Electrical business. JAS, formerly known as AEG has continued to benefit from the changes we've made. This business unit was materially impacted by the change program, site closures and consolidations, the separation of the MTQ business from that base. We also consolidated these businesses into a single ERP.

The CVG business steadied its performance in H2 with the new management team now on board and operating that business. The Wholesale set of business was materially impacted not only by site consolidations and closures, but also a complete management restructure to better operate the different range of businesses under a single EGM.

Retail. We saw declines of 3.5% in revenue, which was impacted by the difficult retail environment and the lower sale of discretionary categories. The business also undertook a focused effort to clear obsolete stock, which is now concluded and the remaining obsolete stock is in the process of being disposed of.

We have shifted between $4 million and $5 million in slow-moving and obsolete stock from within our network. We have changed our promotional cycle away from fully funded Bapcor all store sales to pulse promotions that are supported by our key suppliers. These have clearly impacted our total sales performance, but there are clear benefits in our gross margin.

The 16% EBITDA decline was driven by lower revenues and consequent gross margin dollars, higher operating costs that include occupancy costs and stocktake losses. EBITDA margins were down 166 basis points. We invested in our retail e-commerce platform in half 1 of '25. The launch of the new Autobarn website has resulted in improved customer experiences, higher conversion rates and an increase in the proportion of online sales. This is a pleasing validation of the work that was done.

We also continued to grow our membership in our Accelerate loyalty program, which is now over 1.7 million members compared to 1.2 million to 1.4 million as at the 30th of June 2024. Growing and activating this base continues to be a key focus for the team and aligns with the work that we've stated in our strategy.

We're improving systems, store processes and our people to enhance our fundamental retail capability. The most significant element of this has been the very deliberate turnover of retail staff at a store and regional level as we increase the pure retail capability.

Slide 20 just highlights that after an absence of many years, we've commenced promoting the Autobarn brand. The left-hand side highlights the current big consumer promotion and the right-hand side, the newly launched brand campaign. Very early days, but the consumer, our franchisees and our store staff feedback is encouraging.

The New Zealand economy continues to experience challenging conditions and these have impacted trading. Revenue declines of 3.2% in Australian dollar terms relative to a 1.8% decline in local currency terms. Our most challenged regions are north of TaupÅ. We're actively managing our network, closing 4 stores and opening 2 new BNT locations in November, one in South Waikato and the other in Central Auckland.

We continue to experiment successfully with differing selling and customer service models. This allows us to flex our cost structures and not only -- and not impact adversely our customer service. The commissioning of the contact center is a prime example and the vehicle on road implementation, establishing the right range by location, whilst at a very early stage, is certainly showing promise.

I'll now hand over to Kim to talk through the detailed financial results.

Thanks, Angus, and good morning, everyone. I'm pleased today to present my first set of results as CFO of Bapcor.

As Angus mentioned, FY '25 was a year of significant change. While the headline numbers reflect disruption as we progressed our strategic reset, the actions we are taking are necessary to turn this business around and return to profitable growth. Let's look at the income statement in more detail on the next slide.

Statutory NPAT for FY '25 was $28.1 million, including $52.3 million post-tax significant items, which we flagged at the July trading update following our comprehensive review of the balance sheet. More on this shortly. Pro forma NPAT was $80.4 million, which was 8.4% lower than last year. Group revenue declined 1.5% and our gross margin of $904 million was down 1.6% on the prior year.

Our Trade business continued to see revenue growth. However, revenues in Retail, Specialist Wholesale and New Zealand were softer. Our cost of doing business decreased by $3.7 million, reflecting achievement of the cost savings mentioned by Angus, which reduced employee and occupancy costs, largely offset by the impact of inflation as well as increased investment in our IT systems and applications.

Depreciation increased by $1.5 million due to investments made across the year. We lowered our financing costs by $2.8 million through reduced liabilities following warehouse and branch consolidation. Our pro forma NPAT was slightly below the unaudited range outlined in the July trading update following closeout of our year-end activities.

On to Slide 24. As I mentioned, we recognized $52.3 million in post-tax significant items in FY '25, of which about 82% represents noncash items. The final amount was $2.3 million above the range we guided to in the July trading update, again, as a result of closeout of our year-end activities.

The balance sheet review was undertaken at year-end -- that was undertaken at year-end considered the significant changes that occurred across the business during the year. We have taken a prudent view of the balance sheet in light of these business changes, identifying several adjustments that needed to be made to the accounts. And you can see the amount and the nature of these items on this slide. These adjustments were necessary and they ensure we have a clear and accurate foundation for future growth.

Moving on to Slide 25 now. Operating cash flow increased to $201.7 million, up from $197.9 million in FY '24. And our cash conversion rate lifted to 81.8% versus 76.9% in the prior year. Importantly, our year-end working capital position reflects our normal operating conditions with no DC closures in the lead up to the end of the year and with regular accounts payable flows. We have programs in place across FY '26 to now optimize our working capital balances.

Capital expenditure rose 3.9% to $61.6 million, primarily attributed to investment in foundational technology projects that will support future efficiency and growth. The CapEx also includes $9.7 million invested into the 3 state-based distribution centers and 21 new branches and stores. Pleasingly, we generated positive free cash flow of $20.9 million, an increase of $31 million on the prior year. Dividends paid during the year were $45.8 million.

Turning to the balance sheet. As mentioned, we undertook a detailed review of the balance sheet after the year-end to ensure our financial position accurately reflects our operating model going forward. I've already talked to the significant items reported on the income statement. The review also resulted in the FY '25 opening retained earnings reducing by $25.5 million.

This relates to correcting the recording of prior year intercompany loan transactions as well as to reflect the change in our accounting policy for inventory costing now that we have centralized a significant proportion of our distribution network. We are required under accounting standards to restate our prior period results for both of these changes, which were announced in our July trading update.

Our net working capital balance reduced year-on-year, driven by better accounts payable trading returns, particularly with international vendors. Inventory increased to $546.3 million, up from $529.1 million at the end of the prior year.

This reflects the rebuild of the low closing inventory balance from last year, which, as you may recall, that domestic deliveries were paused in the final weeks of June last year. And it also reflects inventory for the opening of 21 new branches and stores across the business. Assets and liabilities held for sale reduced significantly following the completion of the MTQ divestment in November 2024.

On Slide 27, you can see that we successfully refinanced $170 million of debt that was due in July 2026. This includes temporarily upsizing our committed debt facilities by $100 million to $820 million, which we will use to repay the remaining $100 million facility that's maturing in July 2026. Our next debt maturity beyond that is nearly 2 years away.

Our net debt increased 8.2% to $364.8 million with a leverage ratio of 2.13x EBITDA, which is well within our covenant limits. We have over $340 million in undrawn committed facilities and an average remaining tenor of 3.3 years. Our fixed charge cover ratio and our interest cover ratio remains strong. Our funding profile provides us with the flexibility and headroom to support our strategic reset and our growth initiatives, and we're confident in our ability to fund future investments through disciplined capital management.

And with that, I will hand back to Angus for the summary.

Thank you, Kim. Before closing and moving us to questions, let me take -- touch on our indicative scorecard and a picture of activity in 2026.

On the 28th of April, I outlined an indicative scorecard for the business. The base fiscal '25 year is now complete, save for the customer NPS measure. We will determine that baseline over the next 4 to 5 months with our NPS tool having only recently gone live across our organization.

The indicative fiscal '30 measures remain unchanged, save for safety, where the original target of less than 14 is no longer relevant given the fiscal '25 outcome. Fiscal '30 indicative target has therefore been modified to less than 7.

I remain of the view that we have an unrivaled business platform and brand portfolio that serves multiple segments in large addressable and growing markets. Our strategy is only 3 months old. So our focus on delivering the strategy must be ruthless. The 6 imperatives are what matters. Performance and outcomes will come, but given the task in hand, we're going to pace our actions to deliver sustainable growth.

There are multiple levers to drive organic growth, sales and GP dollars. These will be our focus. There may be inorganic options and we will pursue those as appropriate. Operating efficiency from supply chain improvements and digitization will help balance our cost of doing business and the steps already taken stand us in good stead.

Cost benefits from business simplification from network rationalization are clear. Our job is to maintain those taken and extract more as required. We have a good balance sheet with positive cash generation capacity, both of which are critical to disciplined capital allocation. And following the resignation of the 3 nonexecutive directors in July, we have accelerated the existing Board renewal process and are well progressed with a high-quality pool of candidates.

I will not be providing formal or informal guidance for the current fiscal year. The degree of change that we have initiated and the things we are doing makes that simply too challenging. I will, however, state that we expect fiscal '26 NPAT to skew towards the second half.

With that, I'll now hand back to Lynette to facilitate questions.

[Operator Instructions] We'll take your first question from Jack Lynch with RBC.

First one, just on the Trade segment. I appreciate you're not giving guidance for FY '26. Just on my numbers, it looks like the second half implied like-for-likes are improving. Just trying to marry that up with the challenging May, June that you've had and your comments around a recovery as a key focus for the business, just how it sort of tracked since that May, June period.

Jack, thank you for the question. I appreciate that. Look, so yes, the team within, I'll say, Burson, but Trade is very focused on making sure they recover from May and June. Our focus for H1 is Simon getting it across what he needs to around that business and making sure that the strategy within Burson particularly links to the group strategy.

And primarily, as I think I said in my -- think I know I said in my words, it's driving that sales performance and the GP dollar delivery in that business. So big business, it's the heartbeat of what is Bapcor and that's the focus that they've got today.

Very clear. And maybe just on the costs in the second half, a little bit more allocated or put into the Trade segment relative to Specialist Wholesale, which was a bit better than where the market was thinking. Just the moving parts there as we head into FY '26 and how we should be thinking about the cost base there?

I'll probably say to you, as we head into FY '26, a piece of work we've got to do is around the restructure of the organization. What I said in my opening comments around giving you a restated FY '25 and '24, obviously, that has to be delivered. So I wouldn't get too hung up on the way the second half costs have played out just yet. We've reorganized the business relatively significantly. So we'll make that clear in quarter 2.

We'll hear next from Craig Woolford from MST Marquee.

So just wanted to understand the, I guess, the outlook that you're presenting, obviously, a bit cautious. Like when should we expect that you can get to a cadence that shows the CAGR that you're aiming for in your 5-year scorecard with 5% sales CAGR and 10% EBITDA CAGR.

Craig, thanks for the question. So firstly, I mean, I suppose as you said, we're not providing guidance for '26. I've committed that we will, as our results conversations come back to that scorecard and give people a view on our trajectory towards what are those 5-year goals. I stand by that position.

So you'll start to hear us talk more and more at increasing levels of detail as we go through what will be '26, '27, '28, that all things being equine going correctly will show that we are heading towards those indicative targets, but not going to do anything today.

Okay. And just with regards to that reallocation that's coming, I know you're going to -- we have to wait to see it. But in layman's terms, what can we expect? Like what does it say about the margin performance of each of the divisions?

Look, directionally, there are 2 things that we need to get right as part of that restatement. So firstly, it will be allocating margin based upon where the sale actually gets made. So I'd indicate that would see our Trade segment increasing its margin in our financial statements. That will clearly be at the cost of our Specialist Wholesale division as described today.

The second component that we need to get right is the overhead that goes with that because there's clearly activity that occurs within that segment as in the Specialist Wholesale segment today that needs to be reshuffled predominantly between Trade and Retail. But the 2 pieces are a margin move into Trade offset marginally the double up there around some cost movements.

Okay. And if I could just -- the last thing -- the company is always focused on EBITDA. There is some parts of the business that have quite a big lease payment and therefore, right-of-use asset and amortization, like is it possible to get EBIT across the divisions? Or is that something that we could explore because I would expect that the EBIT results, in other words, after leases or EBT results even better could look quite different.

Yes. Craig, let me take it on notice. My preference, I appreciate the wonderful world of lease accounting standards. But my preference is always to show as close as I can to a cash position coming out through EBITDA, but let's take that on board.

[Operator Instructions] We'll hear next from John Campbell from Jefferies.

Just a couple. I couldn't see in the presentation that you had any update on trading conditions in the first 8 weeks or so of the new financial year. Did you -- would you be able to provide us with how sales are going in the first 8 weeks?

So you're right, it's not contained in any of our material. And I think I know I said this when we were chatting at the April strategy release. We're going to move away from providing those sort of 6-, 7-week glimpses because it's only 6, 7 weeks of whether it be a full year or half year, and I just think it's misleading. So we're not intending to provide that.

Yes. Okay. Fair enough. And your loyalty program has started, within Autobarn started relatively recently. And obviously, you're showing good growth in that now. And I note that Supercheap, I think their group loyalty program provides something like, I don't know, 60% to 70% of their total group sales. Could you share with us exactly how impactful that sort of Autobarn loyalty program is in terms of the share of sales that it's providing? I obviously understand that it's early days at this stage.

Yes. So 2 comments. Yes, very, very early days -- 3 comments. very early days. I'm actually delighted in the list. It's fantastic. I actually don't have the number. So I can't give that to you. I just don't have it at hand. It's an important part of that mix, because customers today, frankly, across Retail and also Trade, they need to determine how they want to transact with us.

What's the easiest for them in the moment they need to make that acquisition. An important part of that, that is then understanding how they shift between those 2 mediums. I don't want to get too carried away, call it, we just purely growing only digital sales, but it needs to, particularly here in 2025, become a substantial proportion of that business. And you can see that we feel that way given it's a measure within our indicative scorecard.

Yes. Okay. But I guess a follow-up question would be you're pretty happy with the design of the loyalty program as is like it doesn't -- you've got all the parameters right and you're just sort of effectively now just outgrowing members. Would that be fair?

I'm probably going to go 60%, 70%, particularly Megan and I were chatting around what that mechanism is. I'm happy with where we are today, but I think there's stuff that we just need to open our minds up to make it more differentiated compared to other loyalty schemes. That would be an area that you can expect us to keep challenging.

Okay. And just one last question, sorry, and then I'll give up. Just within your Commercial Vehicles Group and Truck Parts, could you comment on -- those businesses were acquired in the last 5 years. But are you, I guess, happy and that might be a bad word to choose, but where those -- that Truck Parts business, in particular, is positioned and whether your market share is stable, declining or growing? Any comments around that would be helpful.

So I will grab your word happy. And I'll probably just go no, I'm not happy because I genuinely believe the CVG business, our truck business and now what we call JAS, our electrical businesses, I do believe they are growth levers. What I'm not happy about is they're not growing fast enough.

To your share question, I actually don't know. I don't think we really know the answer to share such a fragmented world, there's no measure I can readily grab at. But I suppose I'll just simply go, I expect them to grow faster than they have currently shown. That's the intent.

Yes. Okay. So you sort of see a pretty good pathway of -- within those businesses, like you see them as core, I guess, is what I'm asking.

Yes. So CVG, a brand-new management team over the course of the last fiscal year, the JAS business, we've just appointed a new leader to that business. She only started with us maybe 2 months ago. These are opportunities for our organization that we need to get after.

We'll move next to Stewart Oldfield from Field Research.

Perhaps just on that CVG business. I hear you say you'd like to grow its footprint. It's great to hear that you want to grow the Trade footprint, but past ambitions with Truck Parts footprint, I think past management wanted to grow out to 100 stores proved considered and the leading player in the sector has actually got less stores than you do now. So why would you be keen to grow the footprint from here?

So short answer is yes, I would like to grow the customer-facing elements of truck and electrical. That doesn't necessarily mean the Warehouse footprint. But I think it's fair to say that being -- for those businesses to be closer to the customers that they serve, and they are different customer bases to our Trade business, we believe that's important. So as I've signaled in my words, we are looking to expand the customer-facing presence over the current fiscal year, but just not necessarily the stock-based locations.

Got it. And for a customer-facing presence, you'd like to have 40 stores, 50 stores?

I'm leading the team, as I said, just previously, they are pretty new. They'll come back and determine what that looks like. And a fair question to ask us that in 6, 12 months' time. But right now, I'll let that team determine what that looks like.

Sounds good. And whilst you're targeting growing businesses, you've got a 4x4 off-road presence with opposite lock. It's been sitting there for many years. How do you view that business, its prospects and its place in the portfolio?

So it's serving a purpose now in our portfolio. Really just given what we've seen happening with 4-wheel drive generically across the market, we are looking at how it plays it. But when I look at what it's delivering today, performance has certainly stabilized over the last 12 months.

But like any part of our portfolio, the question that we're going to continue to ask is, is it actually serving the base business appropriately? And I said that goes for any part of the portfolio within Retail, Wholesale, Specialist, et cetera.

We'll move next to James Bales from Morgan Stanley.

So I wanted to come back to a comment that you made on market share in Trade. I think you were sort of calling that, that had been stable. But on my calculations, GPC outperformed you guys on sales in the fourth quarter by at least 15% at a group level. Can you maybe unpack the divergence there and how we should think about where market shares trended across Trade and Retail?

Yes. No, thanks for the question. So when I refer to market share, the only measure I've got is what Capricorn would give us. That's the only, call it, base. When I look at where we compete in Capricorn relative to our competitor, my comment is relative to where we have a common competitive ground and hence, my -- over a 12-month period view of share.

I said at the July update on significant items, I said that we clearly had lost share in the May and June months. That remains factual. But over the 12 months that our share was stable. I would not walk away, though, from just the simple observation of the Australasian numbers I've seen our competitor publish. They are at a revenue level higher in growth terms than our Trade business. And by definition, across all the things they do relative to what we do, our business did not grow at the same rate.

There are elements though to our competitors' business where we just don't play. We just don't have a presence, don't trade with that clientele, smash repairs mining, et cetera. So they've got a far broader revenue base than we do.

Okay. Got it. And then maybe just you've gone through a whole bunch of reviews. You're sitting in the #3 position in Retail against 2 very competent competitors. What does success look like for the Retail business in terms of some of those goals you set for 2030?

So I suppose the hallmark of success is in a retail business is on comp store sales growth. I want -- ideally, I would love a growing footprint, but we're not ready to grow our footprint today. I want overall sales and margin improvement. And margin, I'm talking gross margin, EBITDA and for the earlier question, EBIT margin improvement.

But fundamentally, it's on 2 scales. It's comp stores and I want comp stores to be growing, I would ideally like as we eventually hope get to a place where we'll grow the absolute footprint. I want overall sales to grow faster than our comp rate. But those are the hallmarks that I'm looking for.

I can then dive down in terms of market share to the degree we measure that basket size within store transactions at a store level and I can get quite granular there. But right now, we've got a business that is not growing across any of the lines in the P&L. It needs to grow. And because we're not adding to the network, it ultimately has to be -- it's a comp store measure. That's the ultimate picture that we present today.

Yes. So I guess...

Probably the last thing I would just say, I don't -- you mentioned that we've done multiple reviews on retail. I'm only across the one that we did as we came into the April strategy announcement. So that's the reset that we've been doing in retail. I don't know about the other retail reviews. My conversation is very firmly focused on the review that was concluded as we came into April.

Mr. Bales, do you have anything further?

No, that's fine.

[Operator Instructions] We'll move next to Mitch Sonogan from Macquarie.

Maybe just following on, I guess, staying on the Retail business. And Angus, just apologies if you've gone through this, so I was jumping in from a different call. But just on the site reconfiguration slide, obviously, there's a lot of different things happening in the Specialist Wholesale business. But on Retail, there's only 1 site closed and 3 relocations.

In terms of like the differential in profitability across, I guess, the worst quarter of the stores versus the top, like is there a big differential there and you could actually look to shut down some stores to more quickly drive that profitability? And I guess I'm just wondering like what are the key factors as to the biggest underperforming stores in the retail network?

Well, fair bit that one question. Look, yes, in the year, we only closed down 1. We did say that we would -- as an outcome of our retail review that we would be looking to close stores in the current year. We will continue to do that. So I can actually say we have closed, looking at, certainly 1, it may even be 2 that we have done. We've closed 2 stores since the 1st of July. So we actively will do that.

Closing a store from our perspective is -- we're going to be clear on how we do that. Much of this network obviously is corporate, but there are franchise stores in there, which we will address as required and as they play on. Look, to the rest of your question in terms of the differential between these stores, we've never provided that kind of information. I'm probably not of the mind to do it right now given the competitive sensitivity to that. But I think I've been very clear in my words today and others.

Well, I'll say my words today, an active part of managing a network, whether it be retail, trade or other is not just adding to it, but is actually closing sites down. And I think you can see as we've announced these results, we have closed stores across our wider network in fiscal '25. That will continue in '26, not just as '25 did in our Trade businesses, but equally in our Retail business. So we actively need to manage the network, not passively allow it to occur.

Yes. And you probably did cover this, but just in terms of the cost savings, it was good to deliver those within the range at $27.5 million. Can you just remind me of any expectations we should have going into '26 that either both gross and any net benefits?

So Mitch, we've been clear, which we said that our exit rate was at [ 40% ] gross. We haven't given you a net because we said back in April that we would be choosing to reinvest some of that back into our bottom line. Clearly, just inflation and other things will take care of an element of that cost delivery. But our exit rate gross from the '25 year was at 40%, which is what we said it would be.

Yes. Okay. Very clear. And just final one on the Trade segment. So EBITDA margins is pretty resilient and up a little bit pushing towards 17%. In terms of just looking out for the next couple of years, if you maintain your market share and the market grows at low to mid-single digits, should we be expecting those margins around that level about right? Or do you see upside? Just trying to understand how you're thinking about the opportunities internally versus where the margins are currently.

Look, if I had to see this out the way I think, I mean, I think they're very healthy margins. I'm frankly not looking to grow them in that sense. You should not expect all of a sudden to be adding basis points to that number. I certainly want to maintain margin. Don't get me wrong on that.

But my focus and what I'd ask Simon to focus on is growing the top line as in revenue and growing our gross margin dollar delivery. If we can do that holding margins, that would be a spectacular outcome. I'm not looking to grow percentage. Frankly, that just might look good in the slide, but it actually is counterproductive to growing that top line.

We'll move next to Elijah Mayr from Goldman Sachs.

Just a couple of follow-ups, I guess. Maybe just on the FY '26 NPAT to be skewed, you're not giving specifics, but can you give us, I guess, a little bit of color of the assumptions that goes into that in terms of that second half skew, can you get there without sort of sales growth improvement? Or is there -- is that kind of driven by the cost improvements and operational improvements that are going to come through in that first half and into that second half? Just any comments around thinking of that skew would be helpful.

Elijah, just make sure I heard there's a bit of background noise there. I think you're saying without giving further guidance, which I won't, just sort of can we get to -- that skew that we've described in second half, can we get there without sales growth? Or are we relying, I think, on cost benefits. I think that was the nature of your question. Is that right?

Yes, correct. Just some of the assumptions, I guess, that goes into that second half skew, if that's going to be cost driven? Or are you expecting sales growth to return after kind of slowing down in that May, June period?

Yes. So probably 2 parts to it. So when we gave the range of the cost savings, we always have said that circa 50% of those cost savings came from just a pure headcount reduction. We obviously did a lot of that at the very end of the fiscal '24 year. So those cost savings have been delivered and that we just have to maintain the right base.

Our focus around the consolidation work that we've done that drives the balance of our cost savings is now bedding that down. So sites that closed in July of fiscal '25, we're already lapping the benefit. Others that have closed in the last quarter -- last month, we'll continue to get that. So those cost savings, if you like, will taper through the current year.

The focus for driving the skew that we've described is coming from reigniting the sales growth in the organization through one, organic sales, but two, equally as we've opened sites in the back half of '25, we have an expectation that we'll see that flow through the P&L positively in the current fiscal year.

And maybe just one more on Retail. Just on the strategic imperative slides, 13, you're sort of calling out that the Autobarn stores had around 45% new store managers coming through in FY '25. Was that large turnover driven by Bapcor? Is that people leaving? And do you have any broad comments on the background of the incoming store managers kind of where they come from within the auto space or in other retail areas, just broadly?

No. So I will be really clear. I'm sad to say that most of that turnover was at our initiation, where we have moved store team members on. And we've done that for multiple reasons, but fundamentally, it's around a lack of capability. The people that we're bringing into the network do come with retail capability. And therefore, that's what we've been looking for and hiring.

We'll move next to Sam Teeger from Citi.

Just wanted to explore the market share losses that you mentioned at the end of the financial year. What do you attribute them to? And have you talked about if you've been able to address that in July and August this financial year?

Sam, good to speak to you. So May and June were poor months for Trade. I said when we spoke -- when we spoke to you around about July to the market, a couple of big promotions in our trade world over those 2 months just did not perform. But the market share losses in those 2 months pretty much land fairly on that lack of performance in those primes.

The focus for quarter 1, quarter 2 is around addressing that and that's what the team are and have been focused on. But that's -- I wish I had a better reason other than we failed to perform in those 2 months.

Got it. And just to help me understand in the Trade business, which is mainly selling to mechanics when cars are coming in for service, what products typically would go well on promotion? I would have thought that most mechanics just buy the products when the cars come in.

So Sam, we had a number of 1-day sales in that period of time. So it's a point of view, a 1-day sale in my mind is perhaps not the ideal trade-based promotion, but that's what we had in place. So it's everything in there from people pulling purchases, if you like, forward and backward. It is tool sales and to some degree, equipment sales in there.

And when you look at our -- particularly our equipment sales number for the full year, you can see that it is adverse to where we were in terms of growth over the prior year. So I would probably support your point of view that this business should be a relatively steady depletion business rather than one that is promotionally orientated. We've changed our -- well, Simon is in the process of changing that point of view inside of the Burson business.

Got it. And last question. I came from the other call that Mitch did. So we missed the start of it. But just on the guidance, have you said if you're expecting profit growth in '26 on '25? Or is all that you've said there's going to be a skew in terms of the profit dollars second half to first half?

No. So it's literally the latter. We've talked to the skew, nothing more.

And at this time, there are no additional callers in the queue. I'd like to turn the conference back over to Angus McKay for any additional or closing comments.

Lynette, thank you. So look to everybody on the call, thank you very much for listening in. We appreciate the questions. For those we catch up with over the next sort of 3 to 4 days, we look forward to seeing you then. But thank you for dialing in and participating.

That does conclude today's teleconference. We thank you all for your participation. You may now disconnect.

Thank you for standing by and welcome to the Bapcor briefing to discuss the FY '25 trading update and review of balance sheet carries announced in this morning's ASX. This is a briefing for analysts and investors. We will not be taking questions from the media.

For media, please direct your questions to the contact details on our ASX release. [Operator Instructions] There will be an opening comments from Executive Chair and CEO, Angus McKay, followed by a question-and-answer session. [Operator Instructions]

I'd now like to hand the conference over to Mr. McKay. Please go ahead.

Thank you very much. Good morning, everybody. Let me just make some opening comments before we pretty quickly move straight into questions and obviously, answers from ourselves. So we've announced this morning a trading update, the outcomes of a review that we have carried out on our balance sheet as part of our closing processes and also announced some Board changes.

Let me just quickly deal with each of those in turn. So we've announced a perspective on the second half trading and in particular, perspective on what was the May and June trading months. We've made the overall comments that the May and June trading months were harder and disappointing relative to our expectations. That particularly impacted our Trade segment. We've talked to disruptions across our wholesale network. Those disruptions, I suppose not unexpected given the quantum of change that we have deliberately pushed through those businesses over the course of the year.

There have been in excess of 45 site closures and changes as we have eliminated sites that make no sense and look to consolidate the way those sites work through, particularly the big distribution centers. We've also commented on the integration of the Wheel Electrical Group and the disruption that, that has happened -- has caused at the customer level. Whilst we believe that is temporary, it has no doubt impacted our second half trading. Retail remains as challenging as it has been for a while.

We are pleased ultimately with the promotional rotation changes we've made, but that environment does remain competitive. And New Zealand remains as complicated as it has been around the economic conditions in that marketplace as we deal with effectively good verbal news, but no action, I suppose, at the consumer trading level.

We've also talked to the fact that as part of our half 2 results, there are a number of items around some supply disputes and receivables, where we've taken a view that the balance sheet values that we're carrying on those need to be dealt with in the current and what I describe as a pro forma year. We also just updated the market that consistent with what we have said through H1 and in part through H2, that the consolidation work that we're doing and thereby the savings that we're expecting to gain that range of $20 million to $30 million, we believe is secure and that we will deliver those and that the exit rates remain as discussed in prior conversations.

The changes that we're making across the group are all around not just our technology systems or technology changes, it is around supply chain and that consolidation process. It is also around the implementation of the strategy that was announced in April of the current calendar year. At a gross level, if you like, our pro forma NPAT is expected to be between $81 million and $82 million.

The second thing that we then have announced is that as part of that balance sheet review, we have done a piece of work looking at other adjustments that we need to make to our ultimate statutory profit and that we are recognizing those. We're taking the opportunity to recognize those in the second half and ultimately what will be our full year results. To be clear, the numbers that we're talking about here are all unaudited at this point in time. Obviously, diligence has gone into them, but they do remain unaudited and those processes will continue over the, I suppose, the 4 weeks to come ahead of our schedule announcement on the 28th.

But in bottom line terms, we're announcing material items or significant items in the second half of between $43.3 million and $45.3 million at an NPAT level. For a full year, that will go up to $48 million to $50 million with the difference having already been recognized in the first half. There is a categorization contained in the release we've made. I won't go through that now. I'm certain I'll be getting questions on that, but I will -- those questions to -- I suppose, help bring that to light. But net, I suppose, an adjustment to our NPAT on a full year basis of $48 million to $50 million.

The final thing we've announced is that we, again, based upon our review of the balance sheet, typically our review post all the consolidation work we're doing, that there are going to be 2 changes that we expect will impact the fiscal '24 outcome, i.e., that will change our comparatives. They, therefore, will not go through our FY '25 impact, but they will be a restatement to the prior year. In total, they are expected to be $24 million on a post-tax basis. They split between 2 items.

One is restating some intercompany transactions, and that relates to trade and other payables across those 2 dimensions. And the second is an accounting policy change that we're instituting that go to the -- that effectively goes to the conclusions of the consolidation process we've made around our disparate networks and wholesale businesses into the major distribution centers, whereby we are aligning to a consistent inventory valuation process across both businesses. Both are obviously a material change. We don't walk away from that, but we both -- we believe they are necessary in terms of the simplification of this business.

The third element of our announcement is we're announcing that 3 directors have tendered their resignations. So Mark Bernhard, Brad Soller and James Todd. They tendered those resignations yesterday. And just my announcement to you is that we already had a broad refresh process in place. That will now be accelerated in light of those 3 directors leaving the business.

So I won't go on. I will pause. I'll hand back to the moderator to see what questions we can answer on behalf of analysts out there.

[Operator Instructions] Your first question today comes from Craig Woolford from MST Marquee.

I've got a couple of questions, quite a big announcement. Can you just clarify why the 3 Board members resigned? It reads -- I assume it's with immediate effect?

So Craig, yes, the short answer is it was immediate effect effective yesterday. They've come to their own conclusion around the tenure of Bapcor and decided that now is the appropriate time to step down. That's really all I can say.

Okay. And can you explain the restatement of earnings of $25 million post -- $24 million post tax. The thing that's running through my mind is that, that looks like a fundamental step down in the earnings power of the business. It says it's over a number of financial years. How many years was there the buildup of this overstatement of circa $24 million?

Yes. So I think we've described the nature of the 2 changes. So one is a restatement of accounting on intercompany transactions. The other is a policy change. You are right. It's $24 million at a net level, net after-tax level. It goes back many years. So when I say many, it spans '24, '23, '22, and I'll say there's elements of '21. But prior to that, frankly, the team have not booked. So it is at a gross level -- sorry, get my language right. At the $24 million level, it is a big number, but it does spread over 3 to 4 to 5 years.

And then on the operating side of the business, just on retail, my math would suggest that second half sales -- total sales for Bapcor retail was down 11%. Interested in understanding the components of that, if that figure is right, like how much of that would be attributed to store closures or other factors versus the same-store sales performance in that second half?

Look, so I don't have and we will clearly get the full year results go into a lot more detail by segment. So within retail, we've closed a number of stores, but equally, some of those closures have been just where we are moving a store. So net of 0. The core element of change within the sales revenue line in retail will be attributed to, one, a category shift that we've talked about for a while. So from discretionary to nondiscretionary and the other component will be the promotional rotation as we've moved away from these all store sales. That's probably all I can go into right now. We will obviously cover that in detail when we get to our full year announcement concept in 5 weeks' time.

Your next question comes from Elijah Mayr from Goldman Sachs.

Maybe just on the Trade segment and sort of noting how you were disappointed in May and June. Is that at a company-specific level or at an industry level? And can you maybe sort of detail, I guess, what specifically caused those disappointments through the May and June trading period?

At an overall company level, if I did say I was overall disappointed, I'd be not telling the truth. Probably the core element in May and June hurt us most was in Trade. May and June are the 2 biggest trading months of the year for that business. And whilst the performance wasn't staggeringly negative, it just wasn't at the expectation the business has set for itself. So that's our primary measure there. There are a number of key promotions in those 2 months that just did not fire for the trade business.

The changes in the second half around Specialist Wholesale, we clearly hope we'd start to see greater traction. But given the number of changes in that business segment and specifically, that is around the warehouse and depot consolidation that we've been doing. I'm not surprised that we impacted ourselves that much, and we did. From an AEG perspective, the -- so that's the electrical group with the business. The other impact there was where we consolidated ERPs over that time, and that just made it more difficult for us to trade effectively.

On the forward view, I would say, we have an expectation that those issues are self-inflicted, necessarily self-inflicted as we go through that consolidation process. And therefore, our prospects into the future look better, but they were necessary in order for us to effectively shift our way through what we've described in the releases of the 45 sites.

It seems a lot of the issues were kind of Bapcor specific rather than industry specific.

Sorry, could you say that last part again, please?

Yes. Sorry, it just sounded like that a lot of the issues through May and June were Bapcor specific rather than industry-wide specific.

So I would say that is absolutely the case for the Specialist Wholesale segment. I'd say for Trade -- sorry, as in they were Bapcor specific. For Trade, I would say it was -- it's market, it's competition. I would say that it's Bapcor problems. I think that would be an untrue characterization. New Zealand, it's market rather than ourselves and retail, our activity was very much by design. We knew it would have a, call it a sales impact as we changed our promotional approach and look to improve our margin structure in that business. So probably more -- probably a combination there of our own activity deliver to expectation, but a bit of a tough environment.

And maybe just secondly on the cost obviously noting that you're getting to the top end of that $20 million to $30 million range in terms of savings. I mean that's a gross number and then sort of immediately noting that there's obviously strategic investments in IT and other sort of supply chain and marketing costs. Can you just give us a sense of like is this the cost base in the second half that we should expect going forward into FY '26? Are there more costs to be going back into the business? Or can you give us maybe a sense of the magnitude or maybe even net cost impact, taking into consideration some of those savings, but also the investments that have been made during the half?

Yes. So let me just reiterate what we have said. So again, we expect to be that sort of top end of the $20 million to $30 million. We said at the half year and a couple of times in between that we expected our exit rate to be around 40%. We're not changing our point of view on that gross. We will be reinvesting in '26 around core processes, systems, et cetera. We have not disclosed what that will be. As we start to do those projects, we'll be quite transparent around them. But in terms of the activity to gain the benefits, that is well complete with the benefits are there where we now go to is investing that to drive the future performance of the organization.

And maybe if I can just squeeze one more in on retail. Just can you detail, I guess, what the change in promotional cycle means and sort of what the promotional environment is now within the retail segment?

Yes. So historically, we had favored all store sales. So discounting all store product by 20%, 25%. We changed that philosophy just prior to the December trading period, whereby we wanted to limit the number of all store sales and move to category-specific promoting. We said at the time that we knew that, that would have a sales impact on the business, but that we believe by moving to category-specific promoting that we would be supported by our suppliers that we would make -- that, that would be a more profitable way to promote.

We said at the time that what we were doing was not a unique retail promotional strategy. That's what most retailers do. So we have done that. We'll go into the detail. But when we show you the full year results, you'll clearly see that whilst that change from all store promoting to category-specific has impacted sales, it has equally positively impacted our gross margin.

Your next question comes from Mitch Sonogan from Macquarie.

Just following on from Elijah there. Just -- I guess, just in the Trade segment, you've talked to May, June being below your expectations. Obviously, the first trading update you gave at the start of second half at the first half result, Trade was up 3.7%. So yes, just trying to understand, was it sort of tracking along at broadly those levels through until May and June. Is that when you saw the material underperformance or have been declining a bit through the half as well?

Make sure -- declining through -- just make sure I understand the full question.

Yes, sorry, yes, you started the half at 3.7% up in Trade. Just trying to understand the cadence through the rest of the period. Or was it really just an underperformance in May and June that dragged the second half result down?

Yes. So the answer, we're pretty happy with the Trade performance and then May and June came out and they were the 2 disappointing months.

Yes. And then maybe just on -- you've talked about the closing or moving of 45 sites. Can you maybe just talk or give a bit more color about the changes you've made there, what impact that might have into '26? And I guess, what other changes could be coming, particularly in the retail business there as well?

Yes. So the 45 sites predominantly relate to that Wholesale segment. So breaking that down in the main, that is within our Wholesale business. There have been site changes and consolidations within both electrical and trucking as well, but they're not the main game, excuse me. The changes represent us closing down distribution centers right across the country and consolidating those distribution centers in the main into our big capital city-based distribution center structure. So that would be the main.

There have been other changes where we have consolidated smaller sites into, call it an intermediary site. Those consolidations have been driven, firstly, by economics, by moving the business to be more profitable and hence generate a large proportion of that $20 million to $30 million that we've talked about. The second component has been around safety factors and operational standards where we need to make changes there. But that is sort of the, I suppose, the headline of it. The logistics of that, though, therefore, mean we relocate stock from one place to another place. The disruption that occurs to that is obviously that in its own right is a fair bit of work. But equally from a customer perspective, we end up moving sometimes away from a localized area to being even 10 kilometers away from that area, and that can impact the customers' transactions with ourselves.

But that's the nature of what we're doing. We look back at what we've done, and we firmly believe we've done all the right things there to do that quickly. It had to be done quickly, one, to the savings that we have profit. But to drag this out just means that we slow down progress around managing inventory and managing a more seamless logistics process to our customers. But I do acknowledge that in the immediate short term that, that does impact the trading relationships customers have had with us over many, many years. And as you appreciate, Mitch, some of these business cases, these are small or relatively small distribution centers that have been there for a long, long time.

So without a doubt that change hurts. It is the right thing to do. It has set us up to allow us to play with the scale that we should be playing with rather than that fragmented base that we have. It's changed our profitability in that particular world, which is exactly what we intended to do. But importantly, from a group perspective, it has also changed our operations to move them closer to what is the required level of operation in a publicly traded company. So hopefully, that gives you a bit of a flavor.

Yes. That does. And just another couple of quick ones. Just on -- I guess, I know you haven't given color on segment margins, but clearly, the market focuses on the core trade business here as well and EBITDA margins in the first half were actually very robust and had some pretty material expansion. Are you able to give any sort of color about how we should be thinking about the margins in the trade business looking into '26?

So Mitch, I'm not going to -- either we'll get there when we get to the 28th announcement, we will go into that detail. All I'll say is we -- the market remains pretty competitive. We've been very disciplined in the way in which we want to operate right now. I'm not therefore foreshadowing change on what you would expect, but we'll go into that detail when we speak to you at the end of August.

Yes. And just the final one. I guess just in terms of the reviews on the balance sheet, is there anything else further? Or do the reviews extend beyond the announcements that you've put out today?

The magic question. So long or short, the review has been really extensive. I mean, obviously, Tim being new to the organization, all the change that we've gone through, we wanted to make sure we looked at this balance sheet properly. I'll be transparent. We're disappointed we found some of the stuff we have, but we've just got to deal with that. But it has been extensive. And I've got -- all I can say is we've got real confidence that we've done this job properly.

Your next question comes from James Bales from Morgan Stanley.

I guess I'd like to first understand a bit about the -- some industry feedback I've had on Burson and JAS stores. Can you talk to management churn rates in those businesses over the last 12 months and how that's compared to history?

So I can't give you the specifics. I just don't have those in front of me. So I think turnover.

Has that changed materially?

Not that I'm aware of materially year-over-year, no. Other than probably I would say JAS may well be a material movement. That's me probably more guessing than anything else, and that's just given the quantum of change that we've gone through in that electrical business. But first, I wouldn't say it's materially different year-over-year, not, but JAS may well be. We'll take that on notice and make sure we address that at the results of the 28th.

And what about NPS for customers in that business? Have you seen any movement there?

Make sure -- NPS, Net Promoter Score.

Yes.

Yes. So as of now, we do not and have not collected an NPS across any part of our business. By the first week of August of this year, we will have put a program in place to start collecting that data. But as of now, we have never collected NPS across any one of our businesses.

Your next question comes from Andrew Hodge from Canaccord Genuity.

I just want to start just in terms of your tenure, both when you first started and through to now, whether the idea of the turnaround is bigger or longer than you first thought when you entered the business, whether that -- whether your view on the turnaround has changed?

Bigger or longer. I'm probably going to go on the bigger, yes, but not materially bigger. Longer, no. I mean I've always talked around, I thought this is a job. That's why when we gave, I suppose, a strategic view of financials, we put a 5-year horizon on that. So that hasn't changed. I mean this announcement in the context of that, yes, probably the way I would look at this is a lot of -- there was a trading issue that we've just highlighted May and June. I would say it's false to say that trading position of 2 months is an indication of the next 5 years performance. I think that it's a vast overstatement.

A lot of the material item that we are dealing with or the significant item we're dealing with here is us cleaning our balance sheet up and setting ourselves up for where we want to go. So that goes to initiating the change around that turnaround rather than being an indication of the turnaround being harder or longer. I would say that without what we've done here, but the turnaround becomes harder because you're trying to cycle things that we should have been dealing with as we have now done.

Got you. And then just a second question around the approach that you had a little while ago, which the Board knocked back, just the idea that the bulk of those Board members that rejected that $5.40 approach have moved. Does that effectively reset the Board's position around what a valuation to get access to the books might look like?

I can give you one short answer, no. So Andrew, perhaps maybe let me just expand a little bit on your first question. So maybe I'm reading too much into it. But do I sit here and go, I'm doubtful that we can turn this business around. Again, short answer is no.

Your next question comes from Jared Gelsomino from Morgans.

Just one really on the store rollout, I guess, I mean, the Investor Day was only a couple of months ago, but things obviously fallen off quite a bit then. So I'm just interested in how you're thinking about the 12 trade stores going forward in terms of new store openings and specifically as well on retail. I mean, what further has to be done operationally to improve that business from here? I guess, has sort of all the hurt through and just a macro bounce back? Or just interested in your thoughts on what else has to be done to optimize that before we can return to network growth?

So Jared, thank you. Just I suppose I can confirm. We said we'd opened 12 stores in the trade world, Australia. We have. So that's done. I said we had a target of another 12 in the fiscal '26 year. That target remains firm, and we're making our way through the ones that will start opening immediately and the ones that go through the way at the end of the year. So from a trade rollout perspective, no change at all.

From a retail perspective, we were pretty clear we were not looking to open new stores. And that right now remains our point of view. The operational turnover in retail, while probably not -- certainly not as visible as I would like you to have it be, we've changed our operational regional state management, store management very significantly, and I'm really pleased with the progress there. The disciplines that have been brought into that business are stunning compared to history, and that's exactly what you need. Very clearly, based upon the revenue numbers we put here, you're not seeing that benefit yet, but the foundational levels aren't being put in place as they should be.

So from a retail perspective, no change. This was going to be a longer -- I'll use the word turnaround process, but the fundamentals have been put in place that we now just need to gain the benefit from that work.

Okay. Perfect. And maybe just one final one. I mean, you mentioned at the Investor Day as well, a number of underperforming stores. Obviously, the market still remains relatively tough in that sector. I mean, are you seeing further underperforming stores start to emerge? Or have you confident you've identified all the laggards and are sort of optimizing them now?

Look, so obviously, we recognize an impairment charge or a preliminary impairment charge in what we've announced. That just goes to the mathematics on some of those stores. Where we need to close a store, whether it be trade, retail or anywhere else, we will do so. But that's just the commercial decision we'll take there. So we're not ignoring individual store performance. If it needs to close, it will close.

Your next question comes from Jack Lynch from RBC.

Most might have been asked already. But just in relation to those store impairment charges, testing continuing. Is there a certain amount of stores that you have tested across the network for that impairment? Or is there a way to think about sort of the ongoing impacts of that going forward?

So I might get Kim to jump in here, but let me give you the 10,000-foot view. You start off with a network of 900-odd stores. You then look for indicators of impairment and profitability of an individual store is clearly an indicator of impairment. And then you form a judgment based upon the pure math as to whether the profitability can lift to a point where it can cover its carrying costs. So we go from 900 to a vastly smaller universe, I mean vastly smaller universe. The testing that we'll continue will focus on that smaller universe. Kim, is there anything you'd add to that?

No, that's exactly. All we're doing now is verifying, validating the testing that we've done on that smaller universe and just testing whether we're being too conservative on any of those numbers. I wouldn't expect the number to change materially or we've provided a range there, but we're just flagging that that's a piece of work that does just take a bit more longer time.

As there are no further questions at this time, I'll now hand back to Mr. McKay for any closing remarks.

Thank you. Look, folks appreciate you jumping on short notice. Clearly, not the way we wanted to open up the Thursday morning for any of us. But we would characterize this as, one, obviously necessary in terms of information, but two, particularly as I think about the significant NPAT and/or prior year changes we are foreshadowing here necessary to set this business up from where it needs to go. So we don't -- we and I particularly don't walk away from that need to get that done now and get it done right.

We'll be coming back to you, obviously, 28, no change to that with our full results and we'll go through that process so there will be much more color to get into those outcomes. Clearly, if you do have any further questions sort of from an analytic perspective, please pick the conversation up with Karen directly, and we'll make sure we answer those as speedily as we can. So moderator, that's it for us. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.