Full Year 2026 Peter Warren Automotive Holdings Ltd Earnings Call

August 20, 2026

Speaker #2: Thank you for standing by, and welcome to the Peter Warren Automotive Holdings Limited Fiscal Year 2026 Results Conference Call. All participants are on listen-only mode.

Operator: Thank you for standing by, and welcome to the Peter Warren Automotive Holdings Limited Fiscal Year 2026 results conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Andrew Doyle, chief executive officer. Please go ahead, sir.

Speaker #2: There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad.

Speaker #2: I would now like to hand the conference over to Mr. Andrew Doyle, Chief Executive Officer. Please go ahead, sir.

Speaker #3: Thank you, Chuck. Good morning, everyone, and thank you for joining Peter Warren Automotive Holdings for our FY26 full-year results presentation. I am Andrew Doyle, Chief Executive Officer, and I'm joined by our Chief Financial Officer, Anna Bale.

Andrew Doyle: Thank you, Chuck. Good morning, everyone, and thank you for joining Peter Warren Automotive Holdings for our FY26 full-year results presentation. I am Andrew Doyle, chief executive officer, and I am joined by our chief financial officer, Anna Bale. Today is about more than reporting a set of numbers. It is about explaining how Peter Warren has responded to a changing automotive market, the decisions we have made to strengthen the business, and why we believe the company enters FY27 with a stronger portfolio, an improved position to support future earnings quality, and clear operating priorities. FY26 tested the sector. New vehicle margins remained under pressure, particularly in H2, as customers became more value-conscious, cost pressures persisted, and new entrants continued to change the competitive landscape. We responded with discipline, improving business mix, repositioning the brand portfolio, investing in capability where it supports our growth, and maintaining balance sheet flexibility.

Speaker #3: Today is about more than reporting a set of numbers. It is about explaining how Peter Warren has responded to a changing automotive market—the decisions we have made to strengthen the business, and why we believe the company enters FY27 with a stronger portfolio and improved position to support future earnings quality and clear operating priorities.

Speaker #3: FY26 tested the sector. New vehicle margins remained under pressure, particularly in H2, as customers became more value-conscious, cost pressures persisted, and new entrants continued to change the competitive landscape.

Speaker #3: We responded with discipline, improving business mix, repositioning the brand portfolio, investing in capability where it supports our growth, and maintaining balance sheet flexibility. The key message for investors is simple: the market is changing, and that creates pressure, but it also creates opportunity.

Andrew Doyle: The key message for investors is simple. The market is changing, and that creates pressure, but it also creates opportunity. Peter Warren has the scale, relationships, property base, operating capability, and leverage to participate selectively and convert that opportunity into more resilient earnings over time. Turning to the agenda, I will start with the executive summary and the key themes from FY26. I will then move through the results overview, the market dynamics that are reshaping the industry, and how we are executing the Peter Warren strategy in that environment to our benefit. Anna will then take you through the FY26 financial summary, including the profit and loss, gross profit, the operating cost bridge, cash flow, and dividends. I will return to close out with the outlook for FY26 and our key earnings recovery drivers before we open to questions.

Speaker #3: Peter Warren has scale, relationships, a property base, operating capability, and leverage to participate selectively and convert that opportunity into more resilient earnings over time.

Speaker #3: Turning to the agenda, I will start with the executive summary and the key themes from FY26. I will then move through the results overview, the market dynamics that are reshaping the industry, and how we are executing the Peter Warren strategy in that environment to our benefit.

Speaker #3: Anna will then take you through the FY26 financial summary, including the profit and loss, gross profit, the operating cost bridge, cash flow, and dividends.

Speaker #3: I will return to close out with the outlook for FY27 and our key earnings recovery drivers before we open for questions. The appendices contain the supporting reconciliation definitions and additional financial detail.

Andrew Doyle: The appendices contain the supporting reconciliations, definitions, and additional financial detail. The presentation and financial statements have been lodged with the ASX and are also available on our website. Let me begin with the executive summary. This section steps back from the individual numbers and focuses on what FY26 tells us strategically. The automotive market is going through a significant reset. Customers are making different choices, brands are competing more intensely, and dealer groups are being tested on discipline, agility, and execution. FY26 made those realities very clear. For Peter Warren, the response has been deliberate. We focused on the levers within our control, improving our position to support future quality of earnings, strengthening the brand portfolio towards where customer demand is moving, managing inventory and interest costs, investing in future capability, and protecting the balance sheet.

Speaker #3: The presentation and financial statements have been lodged with the ASX and are also available on our website. Let me begin with the executive summary. This section steps back from the individual numbers and focuses on what FY26 tells us strategically.

Speaker #3: The automotive market is going through a significant reset. Customers are making different choices, brands are competing more intensely, and dealer groups are being tested on discipline, agility, and execution.

Speaker #3: FY26 made those realities very clear. For Peter Warren, the response has been deliberate. We focused on the levers within our control—improving our position to support future quality of earnings, strengthening the brand portfolio towards where customer demand is moving, managing inventory and interest costs, investing in future capability, and protecting the balance sheet.

Speaker #3: So, while FY26 was challenging, it was also a year in which we strengthened the foundations of the business and positioned Peter Warren to benefit as the market continues to evolve.

Andrew Doyle: While FY26 was challenging, it was also a year in which we strengthened the foundations of the business and positioned Peter Warren to benefit as the market continues to evolve. Slide 4 captures the center of today's presentation. FY26 tested the business through new vehicle margin pressure, particularly across H2, changing customer demand and inflationary cost pressure and market disruption. Our response was not reactive. It was strategic, disciplined, and focused on positioning the company for future growth. First, new vehicle margins were under pressure, particularly in the second half. We responded through inventory management, an improved mix of business towards higher margin segments, and brand execution focused on demand-led opportunities and a keen review of underperforming businesses. That is how we protect margin quality in a tougher market. Second, consumers are shifting towards value technology and new energy vehicles.

Speaker #3: Slide 4 captures a center of today's presentation. FY26 tested the business through new vehicle margin pressure, particularly across H2, changing customer demand, inflationary cost pressure, and market disruption.

Speaker #3: Our response was not reactive. It was strategic, disciplined, and focused on positioning the company for future growth. First, new vehicle margins were under pressure, particularly in the second half.

Speaker #3: We responded through inventory management and improved our mix of business towards higher-margin segments, with brand execution focused on demand-led opportunities and a keen review of underperforming businesses.

Speaker #3: That is how we protect margin quality in a tougher market. Second, consumers are shifting towards value, technology, and new energy vehicles. We have significantly repositioned the brand portfolio and expanded exposure to growth brands and customer segments, particularly where demand is moving fastest.

Andrew Doyle: We have significantly repositioned the brand portfolio and expanded exposure to growth brands and customer segments, particularly where demand is moving fastest. Third, the macroeconomic inflationary environment presented challenges across our industry. We invested in key capability leadership roles, business modernization, and strategic dealership expansion, and will benefit in FY27 from cost optimization opportunities as those teams and programs become fully operational. Finally, market disruption is creating consolidation opportunities. We have preserved low net debt and balance sheet flexibility and continue opportunistic acquisition review and portfolio optimization. The outcome is important. Peter Warren enters FY27 with a stronger portfolio, higher quality earnings, and a balance sheet capacity to act on market opportunities, all of which positions ourselves for improved future earnings quality. I will now move on to the FY26 results overview. The next two slides summarize the key financial and operating outcomes for the year.

Speaker #3: Third, the macroeconomic inflationary environment presented challenges across our industry. We invested in key capability leadership roles, business modernization, and strategic dealership expansion. We'll benefit in FY27 from cost optimization opportunities as those teams and programs become fully operational.

Speaker #3: Finally, market disruption is creating consolidation opportunities. We've preserved low net debt and balance sheet flexibility, and continue our opportunistic acquisition review and portfolio optimization. The outcome is important.

Speaker #3: Peter Warren enters FY27 with a stronger portfolio, higher quality earnings, and balance sheet capacity to act on market opportunities, all of which positions us for improved future earnings quality.

Speaker #3: I will now move on to the FY26 results overview. The next two slides summarize the key financial and operating outcomes for the year.

Speaker #3: The headline is that revenue and overall gross margin held firm in a difficult market, while profit before tax was impacted by new vehicle GPU pressure and operating cost inflation.

Andrew Doyle: The headline is that revenue and overall gross margins held firm in a difficult market, while profit before tax was impacted by new vehicle GPU pressure and operating cost inflation. At the same time, the operating indicators that matter for future earnings improved meaningfully. Record used vehicle volumes, record service and parts revenue, improved inventory aging, a stronger order bank, continued portfolio repositioning, and a disciplined balance sheet. That combination is central to the FY27 entry point. The reported profit result reflects a tougher market, but the underlying operating base has been strengthened. Turning to slide 6, revenue was AUD 2.489 billion, broadly stable on FY26, up AUD 6.7 million. In the context of a weaker and more competitive new vehicle market, that stability matters. It reflects the breadth of our revenue base and the contribution from used cars, service, parts, finance, and insurance.

Speaker #3: At the same time, the operating indicators that matter for future earnings improved meaningfully: record used vehicle volumes, record service and parts revenue, improved inventory aging, a stronger order bank, continued portfolio repositioning, and a disciplined balance sheet.

Speaker #3: That combination is central to the FY27 entry point. The reported profit result reflects a tougher market, but the underlying operating base has been strengthened.

Speaker #3: Turning to slide 6, revenue was $2.489 billion, broadly stable on FY26, up $6.7 million. In the context of a weaker and more competitive new vehicle market, that stability matters.

Speaker #3: It reflects the breadth of our revenue base and the contribution from used cars, service, parts, finance, and insurance. Gross profit margin improved to 16.3%, up 0.2 percentage points.

Andrew Doyle: Gross profit margin improved to 16.3%, up 0.2 percentage points. That is a key indicator of improved business mix and earnings quality. New vehicle margins were under pressure, but higher margin and more resilient revenue streams more than offset that pressure. Underlying profit before tax was at the higher end of our guidance at AUD 14.5 million, yet down on prior year. That decline mainly reflects new vehicle GPU pressure in the H2 and operating cost inflation. The board has declared a final dividend of AUD 0.6 cents per share, fully franked, bringing the total dividend for the year to AUD 3.6 cents per share, which is at the higher end of our typical dividend payout ratio of 60% to 70% of underlying net profit after tax.

Speaker #3: That is a key indicator of improved business mix and earnings quality. New vehicle margins were under pressure, but higher-margin and more resilient revenue streams more than offset that pressure.

Speaker #3: Underlying profit before tax was at the higher end of our guidance at $14.5 million, yet down on the prior year. That decline mainly reflects new vehicle GPU pressure in the second half and operating cost inflation.

Speaker #3: The board has declared a final dividend of 0.6 cents per share, fully franked, bringing the total dividend for the year to 3.6 cents per share, which is at the higher end of our typical dividend payout ratio of 60 to 70 percent of underlying net profit after tax.

Speaker #3: Importantly, as you can see on the second line, despite new brands and higher volumes associated with those new brands, interest costs funding our average stock level of $371 million was $43.8 million—$5.3 million lower than the prior year.

Andrew Doyle: Importantly, as you can see on the second line, despite new brands and higher volumes associated with those new brands, interest costs funding our average stock level of AUD 371 million was AUD 43.8 million, AUD 5.3 million lower than the prior year. The balance sheet remains a major strength. Leverage is low at 0.83 times net debt to EBITDA on a pre-AASB 16 basis. Our own property base is strong at AUD 243.7 million. This is an LTV of just 19.5% and an NTA of AUD 1.48. The message is discipline. We have protected the balance sheet and maintained flexibility to pursue growth while continuing to reposition the portfolio in this transformational market. Slide seven shows where the quality in the FY26 outcome becomes clearer.

Speaker #3: The balance sheet remains a major strength. Leverage is low at 0.83 times net debt to EBITDA, on a pre-AASB 16 basis. And our owned property base is strong at $243.7 million.

Speaker #3: This is an LTV of just 19.5% and an NTA of $1.48. The message is discipline. We protected the balance sheet and maintained flexibility to pursue growth, while continuing to reposition the portfolio in this transformational market.

Speaker #3: Slide 7 shows where the quality in the FY26 outcome becomes clearer. New units were 31,390, up 148 units in a competitive market, which delivered for our OEM partners, delivered our KPI bonuses, and continued to build the Peter Warren car park of customers into our ecosystem to allow further maximization of finance and insurance, service, and parts opportunities.

Andrew Doyle: New units were 31,390, up 148 units in a competitive market, which delivered for our OEM partners, delivered our KPI bonuses, and continued to build the Peter Warren car park of customers into our ecosystem to allow further maximization of finance and insurance, service, and parts opportunities. Most importantly, the order bank increased to 6,349 units, up 1,319 units or almost 30% year-on-year, giving us a solid revenue base for our FY27. Used vehicle performance was a standout with a record result of 10,578 units, up 876 units or almost 10% year-on-year. Service and parts revenue also reached a record AUD 442 million, up AUD 19.9 million, or a solid 5% growth. These are important earnings trends because they are higher margin and more resilient than new vehicle gross profit alone. Inventory aged over 120 days improved to 26.1%, down 3.4 percentage points, demonstrating solid stock management.

Speaker #3: Most importantly, the order bank increased to 6,349 units, up 1,319 units, or almost 30% year-on-year, giving us a solid revenue base for our FY27.

Speaker #3: Used vehicle performance was a standout, with a record result of 10,578 units, up 876 units, or almost 10% year on year. Service and parts revenue also reached a record $442 million, up $19.9 million, or a solid 5% growth.

Speaker #3: These are important earnings trends because they are higher margin and more resilient than new vehicle gross profit alone. Inventory aged over 120 days improved to 26.1%, down 3.4 percentage points, demonstrating solid stock management.

Speaker #3: The mixed business ratio improved also to 60.4%. This measure is a balance of our business, and it shows how reliant we are on new car growth.

Andrew Doyle: The mixed business ratio improved also to 60.4%. This measure is a balance of our business, and it is how reliant we are on the new car growth. A healthy business has a strong back end, meaning we are utilizing our customer base for recurring revenues of service and parts. It builds a more resilient business, less reliance on new car gross fluctuations. So increasing this to 60.4% reflects an increase in gross profit contribution from those higher margin parts, service, finance and insurance, and other back end margins. We also added nine new dealerships during the year, all within an overall reduced leasehold footprint, but more on that later. Our people productivity was stable at AUD 1.1 million revenue per employee, which is pleasing in a lower growth period. This will be continued to be a focus for management across FY27.

Speaker #3: Our gross—a healthy business—has a strong back end, meaning we are utilizing our customer base for recurring revenues from service and parts. This builds a more resilient business, less reliant on new car gross fluctuations.

Speaker #3: So, increasing this to 60.4% reflects an increase in gross profit contribution from those higher margin parts, service, finance and insurance, and other back-end margins.

Speaker #3: We also added nine new dealerships during the year. All within an overall reduced leasehold footprint, but more on that later. Our people productivity was stable at 1.1 million revenue, 1.1 million dollars revenue per employee, which is pleasing in a lower growth period.

Speaker #3: And this will continue to be a focus for management across FY27. I will now turn to the market dynamics and how Peter Warren's strategy positions us to deliver in this context.

Andrew Doyle: I will now turn to the market dynamics and how Peter Warren's strategy positions us to deliver in this context. This section explains both the pressure that we have seen and the opportunity that we are positioning for. The Australian automotive market is changing rapidly. Customers are more value conscious, brand loyalty is shifting, technology expectations are rising, and new entrants are changing the economics of competition. Our Peter Warren strategy is built around responding to those changes earlier and more decisively than the market. The objective is not simply to withstand disruption. It is to use it to strengthen our portfolio, improve our mix, and position the business for more resilient growth. In this context, consistency across delivery of the Peter Warren strategy is critical. Slide 9 shows how the macroeconomic pressure is accelerating a structural shift in vehicle demand.

Speaker #3: This section explains both the pressure that we have seen and the opportunity that we are positioning for. The Australian automotive market is changing rapidly.

Speaker #3: Customers are more value-conscious, brand loyalty is shifting, technology expectations are rising, and new entrants are changing the economics of competition. Our Peter Warren strategy is built around responding to those changes earlier and more decisively than the market.

Speaker #3: The objective is not simply to withstand disruption; it is to use it to strengthen our portfolio, improve our mix, and position the business for more resilient growth.

Speaker #3: In this context, consistency across the delivery of the Peter Warren strategy is critical. Slide 9 shows how the macroeconomic pressure is accelerating a structural shift in vehicle demand.

Speaker #3: Australian consumers are facing higher interest rates and inflation, fuel price pressure, global instability, and sudden cost of living pressures. These forces have reduced confidence and made customers more savvy and value-conscious.

Andrew Doyle: Australian consumers are facing higher interest rates and inflation, fuel price pressure, global instability, and sudden cost of living pressures. These forces have reduced confidence and made customers more savvy and value conscious. The customer response is clear. A greater focus on affordability, increased value-seeking behavior, high demand for fuel efficiency, and an expectation of quality and technology at more competitive price points for certain models. At the same time, customers are demonstrating lower loyalty and greater acceptance of new brands. The market outcome is clear. Australia now has 67 brands competing, up from 59 in 2025, and industry forecasts suggest at least 75 brands by 2031. Indeed, there is no more competitive market in this measure across the globe than Australia. Chinese brands now represent a materially large share of the market and are intensifying competition.

Speaker #3: The customer response is clear: a greater focus on affordability, increased value-seeking behavior, high demand for fuel efficiency, and an expectation of quality and technology at more competitive price points for certain models.

Speaker #3: At the same time, customers are demonstrating lower loyalty and greater acceptance of new brands. The market outcome is clear. Australia now has 67 brands competing, up from 59 in 2025. An industry forecast suggests at least 75 brands by 2031.

Speaker #3: Indeed, there is no more competitive market in this measure across the globe than Australia. Chinese brands now represent a materially large share of the market and are intensifying competition.

Speaker #3: Our view is that this is not simply a short-term fluctuation. It is a structural change in demand. It favors value-oriented, technology-led, and new energy vehicle brands, and it rewards dealer groups that can move quickly, represent the right OEM partners, and execute consistently at the local level.

Andrew Doyle: Our view is that this is not simply a short-term fluctuation, it is a structural change in demand. It favors value-orientated, technology-led, and new energy vehicle brands, and it rewards dealer groups that can move quickly, represent the right OEM partners, and execute consistently at the local level. In times of structural change, agility is important, but so too is a disciplined execution of strategy. Slide 14 sets out the Peter Warren strategy. Our vision is to be the most valued automotive group, exceeding the expectations of our customers, employees, brand partners, and investors. The strategy is built around four key pillars. Acquisition is about opportunistic acquisitions and portfolio optimization, delivering scale and EPS accretive growth. Customer is about fostering a customer-centric culture that delivers increased retention, service revenue, and lifetime customer value. Organic is about best-in-class performance, delivering improved mix and margin resilience through used vehicle service and parts.

Speaker #3: In times of structural change, agility is important, but so too is a disciplined execution of strategy. Slide 14 sets out the Peter Warren strategy.

Speaker #3: Our vision is to be the most valued automotive group, exceeding the expectations of our customers, employees, brand partners, and investors. The strategy is built around four key pillars.

Speaker #3: Acquisition is about opportunistic acquisitions and portfolio optimization, delivering scale and EPS-accretive growth. Customer is about fostering a customer-centric culture that delivers increased retention, service revenue, and lifetime customer value.

Speaker #3: Organic is about best-in-class performance, delivering improved mix and margin resilience through used vehicle service and parts. And finally, innovation is about driving productivity and efficiency, which delivers higher conversion and scalable growth through more and more sophisticated use of our clean data, automation benefits, and AI scalability.

Andrew Doyle: Finally, innovation is about driving productivity and efficiency, which delivers higher conversion and scalable growth through more and more sophisticated use of our clean data, automation benefits, and AI scalability. Underpinning all of this are, of course, the Peter Warren values of growth, integrity, focus, and teamwork. This is not an abstract framework. It's operating system that we measure monthly to ensure we are using strategic direction to build a more resilient, a higher quality, and a more valuable business going forward. Turning to acquisition, the Australian market remains primed for consolidation. The Wakeling acquisition remains pending ACCC clearance. More broadly, we are continuing to assess opportunities through a disciplined capital allocation lens. In a fragmented market with disruption increasing, stronger groups have the opportunity to consolidate. Peter Warren has the balance sheet, the property base, the OEM relationships, and operating capability to participate selectively and opportunistically.

Speaker #3: Underpinning all of this are, of course, the Peter Warren values of growth, integrity, focus, and teamwork. This is not an abstract framework—it's our operating system that we measure monthly to ensure we are using the strategic direction to build a more resilient, higher quality, and more valuable business going forward.

Speaker #3: Turning to acquisitions, the Australian market remains primed for consolidation. The weighting of acquisition remains pending ACCC clearance, and more broadly, we are continuing to assess opportunities through a disciplined capital allocation lens.

Speaker #3: In a fragmented market with disruption increasing, stronger groups have the opportunity to consolidate. Peter Warren has the balance sheet, the property base, the OEM relationships, and the operating capability to participate selectively and opportunistically.

Speaker #3: We remain selective and opportunistic in reviewing potential targets. Chinese brands have increased materially as a share of the Australian market. Various motoring industry experts view Chinese brands growing to around 50% of the Australian marketplace before too long.

Andrew Doyle: We remain selective and opportunistic in reviewing potential targets. Chinese brands have increased materially the share of the Australian market. Various motoring industry experts view Chinese brands growing to around 50% of the Australian marketplace before too long. For the full year financial year of 2026, as the chart shows, Chinese brands control 22.5% of the market. In the first 6 months of this calendar year, they controlled 27%. In the last 3 months to July, they have controlled 30%. It is moving fast. The speed of acceptance by Australian consumers is impressive. Peter Warren's number of Chinese brand dealerships has grown from zero in June 2023 to 17 in June 2026, with the portfolio expected to grow further across FY27 to represent more than 30% of our total brand portfolio. Importantly, overall, we are adding 9 dealerships within the existing footprint.

Speaker #3: For the full financial year of 2026, there's a chart that shows Chinese brands control 22.5% of the market. In the first six months of this calendar year, they control 27%.

Speaker #3: And in the last three months to July, they've controlled 30%. It is moving fast. The speed of acceptance by Australian consumers is impressive. Peter Warren's number of Chinese brand dealerships has grown from zero in June 2023 to 17 in June 2026, with a portfolio expected to grow further across FY27 to represent more than 30% of our total brand portfolio.

Speaker #3: Importantly, overall, we're adding nine dealerships within the existing footprint. In fact, we actually reduced our leaseholds, which demonstrates the ability to expand the property portfolio while sweating the existing property base and maintaining discipline on our fixed commitments.

Andrew Doyle: In fact, we actually reduced our leaseholds, which demonstrates the ability to expand the portfolio while sweating the existing property base and maintaining discipline on our fixed commitments. Slide 12 shows the breadth of our Peter Warren Chinese brand strategy. Peter Warren is partnering with a diversified range of major Chinese automotive groups, including Geely Holding Group, SAIC Motor, Chery Group, GWM Group, GAC Group, and other partners. Since January 2025, we have added, on average, one new Chinese brand dealership to the portfolio almost every 6 weeks. We also have approximately 10 additional Chinese brand dealerships approved and in the pipeline. This is not growth for growth's sake. This is demand-led portfolio repositioning ready for the near term. Customers are increasingly accepting value, technology, and new energy brands, and we are aligning the portfolio with that movement.

Speaker #3: Slide 12 shows the breadth of our Peter Warren Chinese brand strategy. Peter Warren is partnering with a diversified range of major Chinese automotive groups, including Geely Holding Group, Safe Motor Group, Chery Group, GWM Group, GAC Group, and other partners.

Speaker #3: Since January 2025, we have added on average one new Chinese brand dealership to the portfolio almost every six weeks. We also have approximately ten additional Chinese brand dealerships approved and in the pipeline.

Speaker #3: And this is not growth for growth's sake. This is demand-led portfolio repositioning, ready for the near term. Customers are increasingly accepting value technology and new energy brands, and we are aligning the portfolio with that movement.

Speaker #3: Crucially, the strategy is being executed within an overall reduced leased property portfolio. That combination of growth exposure and footprint discipline is central to the Peter Warren strategy.

Andrew Doyle: Crucially, the strategy is being executed within an overall reduced leased property portfolio. That combination of growth exposure and footprint discipline is central to the Peter Warren strategy. Slide 13 highlights the Geely brand, which is one of the clearest examples of why the portfolio shift matters. Geely is home to the EX2, identified on the slide as the best-selling car model across all brands in the segments in China in 2025, with more than 460,000 units sold of that one model. It is also the best-selling small EV on our planet. Geely Group has sold more than 3 million vehicles in China in 2025 and has clear ambitions to grow further. The brand is still early in its Australian journey.

Speaker #3: Slide 13 highlights the Geely brand, which is one of the clearest examples of why the portfolio shift matters. Geely is home to the EX2, identified on the slide as the best-selling car model across all brands in the segment in China in 2025, with more than 460,000 units sold of that one model.

Speaker #3: It is also the best-selling small EV on our planet. Geely Group has sold more than 3 million vehicles in China in 2025, and it has clear ambitions to grow further.

Speaker #3: The brand is still early in its Australian journey. It has operated with only two models to date, and the recent launch of the EX2 precedes a significant model pipeline.

Andrew Doyle: It has operated with only 2 models to date, and the recent launch of the EX2 precedes a significant model pipeline, with at least 8 new models expected over the next 12 months. For Peter Warren, the important point is our exposure. We are Geely's largest partner nationally, with the highest sales and largest footprint of any dealer group in Australia. That creates both near-term volume opportunity and medium-term strategic upside for Peter Warren as consumer acceptance of Chinese brands increases and the market rewards value technology and new energy vehicle capability across multiple new model launches. Slide 14 turns to Zeekr, Geely's premium luxury mobility brand. Zeekr brings together technology, sleek design, and innovation and gives Peter Warren exposure to the premium end of the growth brand opportunity. Zeekr is the fastest-growing premium brand in Australia.

Speaker #3: With at least eight new models expected over the next 12 months, the important point for Peter Warren is our exposure. We are Geely's largest partner nationally, with the highest sales and the largest footprint of any dealer group in Australia.

Speaker #3: That creates both near-term volume opportunity and medium-term strategic upside for Peter Warren. As consumer acceptance of Chinese brands increases and the market rewards value, technology, and new energy vehicle capability across multiple new model launches.

Speaker #3: Slide 14 turns to Zeekr, Geely's premium luxury mobility brand. Zeekr brings together technology, sleek design, and innovation, and gives Peter Warren exposure to the premium end of the growth brand opportunity.

Speaker #3: Zeekr is the fastest-growing premium brand in Australia. The brand has already overtaken multiple established premium brands year to date, despite operating in Australia for less than two years.

Andrew Doyle: The brand has already overtaken multiple established premium brands year to date, despite operating in Australia for less than two years. Importantly, more than 90% of Zeekr's year-to-date volume has come from one model, the 7X. With the 7GT, 8X, and 9X expected in early 2027, the brand remains early in its product life cycles. For Peter Warren, the Zeekr partnership strengthens the portfolio, expands our premium market exposure, and provides a platform for future growth and value creation. The Peter Warren Zeekr Gold Coast grand opening is a strong example of our ability to bring a new growth brand to market quickly and professionally within our existing property footprint, and we are excited to further expand our partnership with Zeekr in the near future. Slide 15 focuses on the customer pillar of the Peter Warren strategy.

Speaker #3: Importantly, more than 90% of Zeekr's year-to-date volume has come from one model, the 7X. With the 7GT, 8X, and 9X expected in early 2027, the brand remains early in its product lifecycle.

Speaker #3: For Peter Warren, the Zeekr partnership strengthens the portfolio, expands our premium market exposure, and provides a platform for future growth and value creation. The Peter Warren Zeekr Gold Coast grand opening is a strong example of our ability to bring a new growth brand to market quickly and professionally within our existing property footprint.

Speaker #3: And we're excited to further expand our partnership with Zeekr in the near future. Slide 15 focuses on the customer pillar of the Peter Warren strategy.

Speaker #3: The objective is simple: to turn customer insight into care, and care into loyalty, retention, recurring revenue, and lifetime value. We measure this through our internal customer review platform, CX360, but also through OEM scorecards and meaningful service level agreements with our customer care team.

Andrew Doyle: The objective is simple, to turn customer insight into care and care into loyalty, retention, recurring revenue, and lifetime value. We measure through our internal customer review platform, CX360, but also through OEM scorecards and meaningful service level agreements with our customer care team. These tools provide clear data visibility on customer feedback and customer satisfaction performance, allowing us then to turn insights into clear actions and consistent standards across the network. We improve ourselves through training, such as our Peter Warren Apprentice program and our DRIVE framework. We recognize great performance through OEM awards and Peter Warren awards and staff Gift Garage. Finally, we scale capability through national development education and leadership summits. The proof points on the right-hand of the slide are important. More than 220 young apprentices are developed in our company.

Speaker #3: And these tools provide clear data visibility on customer feedback and customer satisfaction performance, allowing us then to turn insights into clear actions and consistent standards across the network.

Speaker #3: We improve ourselves through training such as our Peter Warren Apprentice Program and our DRIVE framework. We recognize great performance through OEM awards, Peter Warren Awards, and the staff Gift Garage.

Speaker #3: And finally, we scale capability through national development, education, and leadership summits. The proof points on the right-hand side of the slide are important.

Speaker #3: More than 220 young apprentices are developed in our company. We’ve achieved a 7 percentage point improvement in the OEM customer satisfaction index measure and an 8 percentage point increase in service retention.

Andrew Doyle: We have achieved a 7 percentage point improvement in OEM customer satisfaction index measure, and an 8 percentage point increase in service retention. The financial relevance here is clear. In a market where customers have more choice than ever, service consistency, responsiveness, and trust become real differentiators. Customer retention is not just a service metric, it is a recurring revenue and lifetime value driver. Slide 16 shows the organic performance that supports the margin resilience I talked of earlier. New vehicle units were broadly stable at 31,390 units, up 150 odd units year on year. Used vehicle units reached a record 10,578 units or up almost 10%. Service and parts revenue also reached a record AUD 442 million, up AUD 20 million or 5%. We are building strength in our used vehicle service and parts, which are important contributors to margin stability, recurring revenue, and customer lifetime value.

Speaker #3: And the financial relevance here is clear. In a market where customers have more choice than ever, service consistency, responsiveness, and trust become real differentiators.

Speaker #3: Customer attention is not just a service metric; it is a recurring revenue and lifetime value driver. Slide 16 shows the organic performance that supports the margin resilience.

Speaker #3: As I mentioned earlier, new vehicle units were broadly stable at 31,390 units, up about 150 units year on year. Used vehicle units reached a record 10,578 units, up almost 10%.

Speaker #3: Service and parts revenue also reached a record $442 million, up $20 million, or 5%. We're building strength in our used vehicle service and parts, which are important contributors to margin stability.

Speaker #3: Recurring revenue and customer lifetime value. The internal and OEM brand combined balanced scorecards help drive transparency and consistent execution across our network, while our property strategy remains disciplined with a focus on maximising returns from our owned property and reducing our lease exposure.

Andrew Doyle: The internal and OEM brand combined balanced scorecards help drive transparency and consistent execution across our network. Our property strategy remains disciplined, with a focus on sweating our owned property and reducing our lease exposure. The organic message is therefore one of disciplined and balanced operating performance, stable new vehicle volume, record used volume, record service and parts revenue, improved retention, and a more resilient earnings mix that helps stabilize that overall gross margin, which as you can see was up 0.2 percentage points in the year to 16.3%. Finally, in my section, turning to slide 17. This is actually one of the most important slides in our results update because it really demonstrates that our innovation pillar is already delivering measurable outcomes.

Speaker #3: The organic message is, therefore, one of disciplined and balanced operating performance, stable new vehicle volume, record used volume, record service and parts revenue, improved retention, and a more resilient earnings mix that helps stabilize the overall gross margin, which, as you can see, was up 0.2 percentage points in the year to 16.3%.

Speaker #3: And finally, in my section, turning to slide 17. This is actually one of the most important slides in our results update because it really demonstrates that our innovation pillar is already delivering measurable outcomes.

Speaker #3: We are leveraging enterprise-wide data and insights, process automation, digital journeys, and disciplined investment in AI-powered engagement to enhance customer experience, drive productivity, and generate scalable revenue growth.

Andrew Doyle: We are leveraging enterprise-wide data and insights, process automation, digital journeys, and disciplined investment in AI-powered engagement to enhance customer experience, to drive productivity, and generate scalable revenue growth. This is not just theoretical. In FY26, our piloted sites that we utilized, 44% of online leads appointment capture occurred after hours through AI. When customers were ready, maybe they were parents on the couch at home at night, yet dealerships were closed and appointments otherwise might have been lost. We generated approximately AUD 44 million of revenue from converted service opportunities, up 56% year on year. We also achieved a 2.9 times improvement in service customer win-back conversion rates. The power of this capability is then the breadth of scope and then scaling and scalability across our business. Once the data foundation and process automation are in place, the incremental benefit can be deployed across more dealerships with greater consistency.

Speaker #3: This is not just theoretical. In FY26, at our piloted sites, we utilized—44% of online leads' appointment capture occurred after hours through AI, when customers were ready.

Speaker #3: Maybe they were parents on the couch at home at night, yet dealerships were closed, and appointments otherwise might have been lost. We generated approximately $44 million of revenue from converted service opportunities, up 56% year on year.

Speaker #3: And we also achieved a 2.9-times improvement in service customer win-back conversion rates. The power of this capability is then the breadth of scope, and then scaling and scalability across our business.

Speaker #3: Once the data foundation and process automation are in place, the incremental benefit can be deployed across more dealerships with greater consistency. This is how innovation supports operating leverage: higher conversion, stronger customer engagement, better retention, improved productivity, and ultimately earnings growth.

Andrew Doyle: This is how innovation supports operating leverage, higher conversion, stronger customer engagement, better retention, improved productivity, and ultimately earnings growth. I will now hand over to Anna, who will take you through our FY26 financial summary in more detail. Anna will cover the profit and loss, gross profit and operating cost bridge, cash flow, and dividends. These slides explain the movements behind the headline results and the actions we are taking as we move into FY27. Anna.

Speaker #3: I'll now hand over to Anna, who will take you through our FY26 financial summary in more detail. Anna will cover the profit and loss, gross profit and operating cost bridge, cash flow, and dividends.

Speaker #3: These slides explain the movements behind the headline results and the actions we're taking as we move into FY27. Anna.

Speaker #1: Thank you, Andrew, and good morning, everyone. Turning to the FY26 profit and loss, revenue increased by 0.3% to $2.489 billion. This reflected a lower new vehicle average selling price, influenced by cost-of-living pressures and the emergence of a wider range of high-quality, lower-priced Chinese brands.

Anna Bail: Thank you, Andrew, and good morning, everyone. Turning to the FY26 profit and loss. Revenue increased by 0.3% to AUD 2.489 billion. This reflected a lower new vehicle average selling price influenced by cost of living pressures and the emergence of a wider range of high quality, lower priced Chinese brands. This was more than offset by higher year-on-year volumes and record used service and parts revenues as the business executed several strategic initiatives focused on driving performance across the back end of the business. Gross profit increased by 1.6% to AUD 406 million, with gross margin improving to 16.3%, up from 16.1% in FY25. I will unpack the gross profit movement in more detail on the next slide. Underlying operating expenses increased by AUD 18.7 million or 6.5% to AUD 308.4 million.

Speaker #1: This was more than offset by higher year-on-year volumes and record used service and parts revenues, as the business executed several strategic initiatives focused on driving performance across the back end of the business.

Speaker #1: Gross profit increased by 1.6% to $406 million, with gross margin improving to 16.3%, up from 16.1% in FY25. I will unpack the gross profit movement in more detail on the next slide.

Speaker #1: Underlying operating expenses increased by $18.7 million, or 6.5%, to $308.4 million. This reflected an uplift in costs associated with the business transition through adding new brands and dealerships, increased organic performance, as well as inflationary pressures.

Anna Bail: This reflected an uplifting cost associated with the business transition through adding new brands and dealerships, increased organic performance, as well as inflationary pressures. Interest costs reduced by AUD 5.3 million or 10.8%, reflecting lower average inventory and an improved aging profile, despite several cash rate increases during the year and the additional stock holding due to new brands and dealerships. Underlying PBT was AUD 14.5 million, down AUD 7.8 million or 35% on FY25. Statutory PBT was AUD 11.5 million after one-off acquisition and restructure costs of AUD 3 million. Slide 20 provides more detail on gross profit. Gross profit margin increased to 16.3%, up 0.2 percentage points from 16.1% in FY25. The increase reflects two key drivers. Lower new vehicle margins in the second half reduced margin by 0.3 percentage points, while favorable used service and parts mix added 0.5 percentage points.

Speaker #1: Interest costs reduced by $5.3 million, or 10.8%, reflecting lower average inventory and an improved aging profile, despite several cash rate increases during the year and the additional stock holding due to new brands and dealerships.

Speaker #1: Underlying PBT was $14.5 million, down $7.8 million, or 35%, on FY25. Statutory PBT was $11.5 million, after one-off acquisition and restructure costs of $3 million.

Speaker #1: Slide 20 provides more detail on gross profit. Gross profit margin increased to 16.3%, up 0.2 percentage points from 16.1% in FY25. The increase reflects two key drivers.

Speaker #1: Lower new vehicle margins in the second half reduced margin by 0.3 percentage points, while a favorable used service and parts mix added 0.5 percentage points.

Speaker #1: The decline in new car margins reflects external market challenges and legacy brand discounting against new entrants. This is the market pressure that Andrew referred to earlier, and it remains a feature of the broader environment.

Anna Bail: The decline in new car margins reflects external market challenges and legacy brand discounting against new entrants. This is a market pressure that Andrew referred to earlier, and it remains a feature of the broader environment. Importantly, margins remain favorable in other service lines that are growing in contribution. Service optimization, productivity efficiencies, parts efficiencies, and the benefits of scale all supported the margin outcome, and these will continue to be a focus for management across FY27. This highlights that back-end performance is helping support the business through new vehicle margin pressure. Management remains focused on rationalizing underperforming dealerships, broadening service and parts optimization, and maximizing finance and insurance and car care opportunities into FY27. Turning to the operating cost bridge, FY26 underlying operating costs increased by AUD 18.7 million, taking our operating cost as a percentage of revenue to 12.4%, up from 11.7% in FY25.

Speaker #1: Importantly, margins remain favorable in other service lines that are growing in contribution. Service optimization, productivity efficiencies, parts efficiencies, and the benefits of scale all supported the margin outcome, and these will continue to be a focus for management across FY27.

Speaker #1: This highlights that back-end performance is helping to support the business amid new vehicle margin pressure. Management remains focused on rationalizing underperforming dealerships, broadening service and parts optimization, and maximizing finance and insurance, as well as car care opportunities, into FY27.

Speaker #1: Turning to the operating cost bridge, FY26 underlying operating costs increased by $18.7 million, taking our operating cost as a percentage of revenue to 12.4%, up from 11.7% in FY25.

Speaker #1: The bridge separates the increase into two distinct categories. The first is intentional spend focused on transitioning the business to support future growth, which contributed $12.3 million.

Anna Bail: The bridge separates the increase into two distinct categories. The first is intentional spend focused on transitioning the business to support future growth, which contributed AUD 12.3 million. This includes cost uplift associated with new brands and dealerships, such as headcount, advertising, and other variable operating expenses, increased activity to drive organic performance in used service and parts, targeted key appointments to uplift our capabilities, and remuneration increases to drive retention and performance, as well as statutory award and superannuation guarantee increases. While these have been incurred in FY26 to drive growth, management is focused on improving the operating leverage of these costs across FY27. The second category is associated with the inflationary macroeconomic environment, which contributed AUD 6.4 million.

Speaker #1: This includes cost uplift associated with new brands and dealerships, such as headcount, advertising, and other variable operating expenses. Increased activity to drive organic performance in new, used, service, and parts, targeted key appointments to uplift our capabilities, and remuneration increases to drive retention and performance.

Speaker #1: As well as statutory award and superannuation guarantee increases. While these have been incurred in FY26 to drive growth, management is focused on improving the operating leverage of these costs across FY27.

Speaker #1: The second category is associated with the inflationary macroeconomic environment, which contributed $6.4 million. Management is responding through cost optimization initiatives, including the use of technology to drive productivity; realignment of support functions; leveraging our scale with suppliers; further optimization of our property footprint and lease portfolio; and rationalization of underperforming dealerships.

Anna Bail: Management is responding through cost optimization initiatives, including the use of technology to drive productivity, realignment of support functions, leveraging our scale with suppliers, further optimization of our property footprint and lease portfolio, and the rationalization of underperforming dealerships in order to neutralize this impact across FY27. The cost message is therefore balanced. We have invested to support new brands, drive organic growth, and enhance capability, all of which position Peter Warren for future growth, while also identifying clear areas of focus where management action will deliver benefits through FY27. Slide 22 covers cash flow and dividends. The business remains cash generative, with operating cash flow after floor plan interest of AUD 67.3 million. This represented a 71.1% cash conversion, reflecting solid underlying cash generation despite ongoing investment in working capital to support the business operations and growth initiatives.

Speaker #1: In order to neutralize this impact across FY27, the cost message is therefore balanced. We've invested to support new brands, drive organic growth, and enhance capability.

Speaker #1: All of which position Peter Warren for future growth, while also identifying clear areas of focus where management action will deliver benefits through FY27. Slide 22 covers cash flow and dividends.

Speaker #1: The business remains cash generative, with operating cash flow after foreclaimed interest of $67.3 million. This represented a 71.1% cash conversion, reflecting solid underlying cash generation, despite ongoing investment in working capital to support the business operation and growth initiatives.

Speaker #1: Net cash generated was $17.7 million after lease payments, interest on loans, and tax. Cash was used across three main areas: investment in dealership capital expenditure, returns to shareholders through regular dividends, and repayment of loans. Net debt ended at $47.4 million, impacted by a lower cash balance at 30 June 2026 versus 30 June 2025.

Anna Bail: Net cash generated was AUD 17.7 million after lease payments, interest on loans, and tax. Cash was used across three main areas: investment in dealership capital expenditure, returns to shareholders through regular dividends, and repayment of loans. Net debt ended at AUD 47.4 million, impacted by a lower cash balance at 30 June 2026 versus 30 June 2025. Net debt to EBITDA after floor plan interest was 0.7 times. This reinforces the balance sheet discipline that Andrew referred to earlier. The board has declared a final dividend of AUD 0.6 cents per share, fully franked, with total dividends for the year of AUD 3.6 cents per share, at the upper end of our typical dividend payout ratio of 60% to 70% of underlying net profit after tax. Our balance sheet remains disciplined and flexible.

Speaker #1: And net debt to EBITDA after floor plan interest was 0.7 times. This reinforces the balance sheet discipline that Andrew referred to earlier. The Board has declared a final dividend of 0.6 cents per share, fully franked, with total dividends for the year of 3.6 cents per share, at the upper end of our typical dividend payout ratio of 60% to 70% of underlying net profit after tax.

Speaker #1: Our balance sheet remains disciplined and flexible. Low net debt and a strong tangible property base provide optionality as the business considers growth, capital allocation, and maximizing shareholder returns.

Andrew Doyle: Low net debt and a strong tangible property base provide optionality as the business considers growth, capital allocation, and maximizing shareholder returns. I will now hand over to Anna.

Anna Bail: Low net debt and a strong tangible property base provide optionality as the business considers growth, capital allocation, and maximizing shareholder returns. I will now hand over to Anna.

Speaker #1: All right, hand over to Andrew.

Speaker #2: Thank you, Anna. I will now close with the outlook for Peter Warren. And this is where the FY26 narrative comes together. The year was challenging, but it was also a year of strategic repositioning.

Andrew Doyle: Thank you, Anna. I will now close with the outlook for Peter Warren, and this is where the FY26 narrative comes together. The year was challenging, but it was also a year of strategic repositioning. We strengthened earning mix, expanded exposure to growth brands, invested in future operating capability, and preserved balance sheet flexibility. As FY27 begins, our focus is on converting the strategic repositioning into improved earnings performance. The key drivers are higher quality earnings, portfolio-led growth, operating optimization, and disciplined capital deployment. Finally, slide 24 summarizes our FY27 focus. FY26 delivered important foundations, record results in service parts of used vehicles, a firm review and rebalance of the brand portfolio towards customer demand growth brands, and a disciplined transition phase focusing on maximizing scale, improving property utilization, and optimizing costs. FY27 is about positioning for earnings recovery.

Speaker #2: We strengthened our earnings mix, expanded exposure to growth brands, invested in future operating capability, and preserved balance sheet flexibility. As FY27 begins, our focus is on converting the strategic repositioning into improved earnings performance.

Speaker #2: The key drivers are higher-quality earnings, portfolio-led growth, operating optimization, and disciplined capital deployment. Finally, slide 24 summarizes our FY27 focus. FY26 delivered important foundations: record results in service, parts, and used vehicles; a firm review and rebalance of the brand portfolio towards customer demand and growth brands; and a disciplined transition phase focusing on maximizing scale, improving property utilization, and optimizing costs.

Speaker #2: FY27 is about positioning for earnings recovery. The first driver is higher quality earnings—moving the mix further towards the higher-margin service, parts, and used vehicle performance. We're maintaining margin resilience through improved mix and continuing inventory and cost optimization.

Andrew Doyle: The first driver is higher quality earnings, moving mix further towards the higher margin service parts and used vehicle performance, maintaining margin resilience through improved mix and continuing inventory and cost optimization. The second driver is brand portfolio-led growth. We will continue selective expansion with high-growth brand partners, supported by increased penetration in growth segments and a portfolio increasingly aligned to customer demand. The third driver is disciplined capital deployment. We have maintained a balance sheet flexibility and capacity to pursue EPS accretive opportunities as the market continues to consolidate. Our firm view is that Peter Warren is building a stronger business today to support higher quality earnings growth tomorrow. Thank you for your time and your continued interest in Peter Warren Automotive Holdings. In summary, FY26 was a challenging year, but it was also a year in which Peter Warren strengthened its strategic position.

Speaker #2: The second driver is brand portfolio-led growth. We will continue selective expansion with high-growth brand partners, supported by increased penetration in growth segments and a portfolio increasingly aligned to customer demand.

Speaker #2: And the third driver is disciplined capital deployment. We have maintained balance sheet flexibility and capacity to pursue EPS-accretive opportunities as the market continues to consolidate.

Speaker #2: Our firm view is that Peter Warren is building a stronger business today to support higher-quality earnings growth tomorrow. Thank you for your time and your continued interest in Peter Warren Automotive Holdings. In summary, FY26 was a challenging year, but it was also a year in which Peter Warren strengthened its strategic position.

Speaker #2: We improved the quality of our earnings, accelerated exposure to growth brands, delivered record outcomes, invested in future capability, and maintained balance sheet flexibility.

Andrew Doyle: We improved the quality of our earnings, accelerated exposure to growth brands, delivered record outcomes, and invested in future capability and maintained balance sheet flexibility. Our focus for FY27 is clear, to convert this strategic positioning into earnings recovery through high-quality earnings portfolio-led growth, optimizing our operating base and disciplined capital deployment. Anna and I would now be very happy to take your questions. Thank you.

Speaker #2: And our focus for FY27 is clear: to convert this strategic positioning into earnings recovery through high-quality earnings, portfolio-led growth, optimizing our operating base, and disciplined capital deployment.

Speaker #2: So, Anna and I would now be very happy to take your questions. Thank you.

Speaker #3: Thank you. If you wish to ask a question, please press star then one on your telephone, and wait for your name to be announced.

Andrew Doyle: Thank you. If you wish to ask a question, please press star then 1 on your telephone, and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you are on a speakerphone, please pick up the handset to ask your question. Today's first question will come from Phil Chippendale with Ord Minnett. Please go ahead.

Operator: Thank you. If you wish to ask a question, please press star then 1 on your telephone, and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you are on a speakerphone, please pick up the handset to ask your question. Today's first question will come from Phil Chippendale with Ord Minnett. Please go ahead.

Speaker #3: If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question.

Speaker #3: Today's first question will come from Phil Chippendale with Ord Minnett. Please go ahead.

Speaker #4: Oh, hi Andrew and Anna, thanks for your time. First question: I just wanted to talk to slide 21, because that was a larger increase in the opex space than I had expected.

Phil Chippendale: Oh, hi, Andrew and Anna. Thanks for your time. First question, just wanted to talk to slide 21, because that was a larger increase in the OpEx base than I had expected. Can you just explain the difference? I do not quite understand this second category of the AUD 6 million versus the AUD 12 million. You are talking about navigating inflationary macro environment. Is this sort of strategic decisions that you made? Is that what is going on there?

Speaker #4: Can you explain the difference? Sorry, I don't quite understand this second category of the $6 million versus the $12 million. You're talking about navigating an inflationary macro environment.

Speaker #4: Is this the sort of strategic decision that you made? Is that what's going on there?

Speaker #1: Hi, Phil. Yeah, thanks for the question. So, just to set up and give everybody a little bit of an indication: the $12.3 million there reflects what we've invested in the business and used to drive both the organic performance that we saw in FY26, but also set ourselves up for that transition of new brands and new dealerships into FY27.

Anna Bail: Hi, Phil. Yeah, thanks for the question. We have set up five different features and give a little bit of an indication of how FY27. The 12.3 there, that reflects what we have invested in the business and used to drive both the organic performance that we saw in FY26, but also set ourselves up for, with that transition of new brands and new dealerships into FY27. We do expect some benefits from that category. We will get some efficiencies as those chains, and new dealerships get fully up and for the full 12 months. Second bucket there, more focused on what we would call pure inflationary pressures. That is where we said there that management is really focused on neutralizing that effect into FY27, through the various cost optimization initiatives that we have put there.

Speaker #1: We do expect some benefits from that category. We will get some efficiencies as those teams and new dealerships get fully up, but for the full 12 months.

Speaker #1: The second bucket there is more focused on what we would call pure inflationary pressures. So that's where we've said that management is really focused on neutralizing that effect into FY27 through the various cost optimization initiatives that we've put there.

Speaker #2: I think we'd summarize it, Phil, by saying yeah, we think there's some optimization in the $12.3 million and significant optimization in the $6.4 million.

Andrew Doyle: I think we would summarize it, Phil, by saying, we think there is some optimization in the 12.3 and significant optimization in the 6.4.

Speaker #4: I can't understand. So, the $6.4—did you not necessarily see much benefit in that in the FY26 result then?

Phil Chippendale: Okay, I understand. The 6.4, did you not necessarily see much benefit in the FY26 result then?

Speaker #1: Look, I think that was really those cost pressures coming through in H2 in particular, after the sort of war in Iran and the inflationary impact that that had through fuel prices and things like that. And so, I think that's really where we're focusing on neutralizing that through FY27 and utilizing the impact going forward to the operating cost base.

Anna Bail: Well, I think that was really those cost pressures coming through in H2 in particular, after the war in Iran and the inflationary impact that that had through fuel prices and things like that. I think that's really where we're focusing on neutralizing that through FY27 and minimizing the impact going forward to the operating cost base.

Speaker #4: Okay. So my follow-on question, then, is: how do you intend to neutralize that impact in '27?

Phil Chippendale: Okay. My follow-on question then is how do you intend to neutralize that impact in 2027?

Speaker #1: Yeah, so that's through some of those initiatives that we've put through there. We understand that inflation is stubborn at the moment, and it's not going to go down immediately.

Anna Bail: Yeah. That's through some of those initiatives that we put through there. We understand that inflation is stubborn at the moment, and it's not going to go down immediately. We're trying to be proactive around taking the or releasing that pressure through other areas of the business, through those initiatives that we've listed there. Driving productivity through our actions, optimizing the support function and those other items.

Speaker #1: And so we're trying to be proactive around taking or releasing that pressure through other areas of the business, through those initiatives that we've listed there—driving productivity through optimizing the support function.

Speaker #1: And those other items.

Speaker #4: Okay. And we can chat about that a little bit further offline. Just shifting to slide 17—Andrew, you mentioned the pilot sites that you've set up over the year in terms of some automation and operations outside of hours, etc.

Phil Chippendale: Okay. I might take that little bit further offline. Shifting to slide 17, Andrew, you mentioned the piloted sites that you have set up over the year in terms of some automation and operations outside of hours, et cetera. Can you talk to what proportion of your sites have had that enabled? What are the intentions to try and roll that out over FY27, perhaps to drive a little bit more revenue generation?

Speaker #4: Can you speak to what proportion of your sites have had that enabled? And then, what are the intentions to try and roll that out over FY27, perhaps to drive a little bit more revenue generation?

Speaker #2: We've rolled out sites overall across a small number, around about 20 sites. So, where we've improved a couple of those partners—automation partners or AI partners—we're still selecting.

Andrew Doyle: We have looked at sites overall, rolled out over a quarter of around 20 sites. We are at recruitment stage for FY27. A couple of those partners, automation partners or AI partners we are selecting still. We might have piloted one or two to test which one works better. We have made those decisions now, which way we will go for both sales AI and/or service AI and roll that out over the course of FY27. We expect to have that rolled out through the course of this year.

Speaker #2: So we're buying a pilot of one or two to test which one works better. We've made those decisions now, which way we'll go for both sales AI and/or service AI.

Speaker #2: And roll that out over the course of FY27. So we expect to have that rolled out through the course of this year.

Speaker #4: Okay, thanks, guys. I'll jump back in. Thank you.

Phil Chippendale: Okay. Thanks, guys. I will jump back in the queue.

Speaker #2: Thanks.

Speaker #3: The next question will come from John Campbell with Jefferies. Please go ahead.

Phil Chippendale: The next question will come from John Campbell with Jefferies. Please go ahead.

Operator: The next question will come from John Campbell with Jefferies. Please go ahead.

Speaker #5: Hi, guys. Thanks for this. A couple of questions. Firstly, I presume the biggest driver, or potential driver, of getting PBT margins back to where you want them to be is effectively reorienting the brand mix and getting the right mix of high-growth brands, as you talk about in the preso.

John Campbell: Hi, guys. Thanks for this. A couple of questions. Firstly, I presume the biggest potential driver of getting PBT margins back to where you want them to be is effectively reorientating the brand mix and getting the right mix of high-growth brands as you talk about in the preso. How far down that journey would you say you are? You have obviously reorientated a lot in the last two years towards Chinese brands, for instance, if you ever complete it, but how far to get near that sort of completed phase where you are happy with what you have got?

Speaker #5: How far along that journey would you say you are? You've obviously reoriented a lot in the last two years towards Chinese brands, for instance.

Speaker #5: But how far do you sort of—if you ever complete it—but how far do you get near that sort of completed phase where you're happy with what you've got?

Speaker #2: Thanks, John. Look, it has been a busy period over the last—well, two years, but especially the last 12 months. And the market is changing, as I mentioned, very, very progressively.

Andrew Doyle: Thanks, John. Well, it is a busy activity we have had over the last, well, two years, but especially the last 12 months. The market is changing, as I mentioned, very progressively. So, we are seeing these brands that would have represented 10% to 15% of the mix before now up into the mid-20s, as I showed in that chart before. The order intake is well over or getting over the 30% mark now. Therefore, it is about maximizing portfolio to fit that in and to go with the brands that we believe are right. I think it is important to state there, as I think I said in my words, we have not picked any brands. We have picked what we think are solid, strong groups that will be attractive to the consumer.

Speaker #2: So we're seeing these brands that would have represented sort of 10 to 15 percent of the mix before now up into the mid-20s, as I showed in that chart before.

Speaker #2: And also, the order intake is well over, or getting over, the 30% mark now. So, therefore, it's about maximizing the portfolio to fit that in.

Speaker #2: And to go with the brands that we believe are right. I think it's important to state there, as I think I said in my words, we haven't picked any brands.

Speaker #2: We've picked what we think are solid, strong groups, so that's the back, and we're progressively rolling across each of our sites.

Andrew Doyle: So that is the background, and we are progressively rolling across each of our sites and importantly to existing property portfolio. So we have not added any leases at all. We have usually maximized the property we have got. To answer your question more directly, we have at least, as I say, another 10 Chinese dealerships in the pipeline that will be delivered, I would say, in the course of FY27.

Speaker #2: And importantly, to existing properties portfolio. So we haven't added any leases at all. We've usually maximized the property we've got. But to answer your question more directly, we have at least, as I say, another 10 Chinese dealerships in the pipeline.

Speaker #2: That will be delivered in the, yeah, I would say, in the course of FY27.

Speaker #5: Okay. Okay. Thanks for that. Just on that subject of adding leases, with a partner like Geely, and looking at what EGUS has achieved with BYD, is there an opportunity for you to go beyond your current footprint and really get aggressive with rolling out greenfield sites, potentially even in states where Peter Warren isn't represented?

John Campbell: Okay. Thanks for that. Just on that subject of adding leases. With a partner like Geely and looking at what Eagers has achieved with BYD, is there an opportunity for you to go beyond your current footprint and really get aggressive with rolling out greenfield sites, potentially even in states where Peter Warren is not represented?

Speaker #2: I think that potential is always there, John. We're not linked just to the sites we're in. If the business case makes sense, we are certainly willing to look at any opportunity for expansion.

Andrew Doyle: I think that potential is always there, John. We are not linked just to the sites we are in. If the business case makes sense, we are certainly willing to look at any opportunity for expansion.

Speaker #5: Okay. And Geely, I presume you would say, would be potentially up there with BYD as a brand that could really grab a large share in Australia?

John Campbell: Okay. Geely, I presume you would say would be potentially up there with BYD as a brand that could really grab large share in Australia?

Speaker #2: Absolutely. It's the second best-selling car group in China. It's probably right up there—well, it is right up there—with the BYD group, selling more than 3 million vehicles in China.

Andrew Doyle: Absolutely. It is the second best-selling car group in China. It is probably right up there, or it is right up there with the BYD group, selling more than 3 million vehicles in China. It is a very strong group, and it has a big, broad portfolio. As I showed in that chart, there is at least eight models coming in the next 12 months. I have seen those models, and they are extremely impressive. So I think it has got a great future, the Geely group.

Speaker #2: It's a very strong group, and it has a big, broad portfolio, as I showed in that chart. There are at least eight models coming in the next 12 months.

Speaker #2: I've seen those models, and they are extremely impressive. So I think it's got a great future, that Geely Group.

Speaker #5: Yeah. Sorry, just one last question from me, Andrew. So, reorienting towards, say, EV-heavy Chinese brands, who won't have much in the way of parts and service and used revenue, how are you ensuring you get sufficient GPU to compensate for the sort of lack of back-end revenue from these new brands?

John Campbell: Yeah. Sorry, just last question from me, Andrew. Reorientating towards, say, EV-heavy China brands who will not have much in the way of parts and service and used revenue, how are you ensuring you get sufficient GPU to compensate for the lack of back-end revenue from these new brands?

Speaker #2: Right. Well, it's a good question. There's quite a bit to that question. The first level is improving what we already have. We have a huge car park already, and it's about penetrating that car park with the right customer care.

Andrew Doyle: Well, it's a good question. There's quite a bit to that question. The first level is improving what we already have. We have a huge car park already, and it's about penetrating that car park with the right customer care. As I mentioned, our service retention is up 8 percentage points, so we're penetrating more into the existing car park, and we can do a lot better there. There is a long tail of service opportunity in our existing car park. The second thing is with the future of, let's say, NEV vehicles, new energy vehicles. Yes, there are potentially less moving parts and less opportunity in the traditional business, but there's also opportunity in the new business.

Speaker #2: As I mentioned, our service retention is up 8 percentage points, so we're penetrating more into the existing car park. And we can do a lot better there.

Speaker #2: There is a long tail of service opportunity in our existing car park. The second thing is, with the future of, let's say, NEV vehicles—new energy vehicles—yes, there are potentially fewer moving parts and less opportunity in the traditional business.

Speaker #2: But there's also opportunity in the new business. Battery electric technology means that we can be standalone and actually have a USP when it comes to our opportunity to have high-voltage technicians, that I talked about through our apprentice program, and actually capture more of that market going forward—which I think is an opportunity for us.

Andrew Doyle: Battery electric technology means that we can be standalone and actually have a USP when it comes to our opportunity to have high-voltage technicians that I talked about through our Peter Warren Apprentice program and actually capture more of that market going forward, which I think is an opportunity for us. But the bigger opportunity in the short term, certainly, is penetration of our existing car park of service customers.

Speaker #2: But the bigger opportunity in the short term, certainly, is penetration of our existing car park of service customers.

Speaker #3: Okay, that's great. We won't see—I might be thinking that there will be—we won't see, sort of...

John Campbell: Okay. But we won't see, or I might be thinking that there will be, we won't see

Andrew Doyle: Is that right, John?

Speaker #2: Right, John?

Speaker #3: We won't see gross profit degradation from this reorientation—gross profit margin.

John Campbell: We won't see gross profit degradation from this reorientation?

Andrew Doyle: Oh, sorry, John.

John Campbell: Gross profit margin.

Speaker #2: Sorry, John. Gross profit.

Andrew Doyle: Sorry, John. Gross profit?

Speaker #5: Gross profit margin—we won't see that being degraded with this reorientation.

John Campbell: Gross profit margin, we won't see that being degradated with this reorientation?

Speaker #2: John, our focus has to be on improving the balance of our business. As I mentioned earlier, I talked earlier on the slides about how we are moving to what I would define as a better balanced business, a better absorbed business.

Andrew Doyle: John, our focus has to be on improving the balance of our business, as I mentioned earlier. I talked earlier on in the slides about how we are moving to what I would define as a more better balanced business, a better absorbed business. We have a mixed business ratio that's grown above 60% now. So whilst the new vehicle themselves might have an average lower price point, the margin percent model is similar, but the price point is lower. That's for sure. Our mix of business is moving more and more to what we see as even more in our control, being used cars, parts and service, and finance and insurance. So we can balance the business a lot stronger towards the back end as well, which is more in our control.

Speaker #2: We have a mixed business ratio that's grown above 60% now. So, whilst the new vehicles themselves might have an average lower price point, the margin percent model is similar, but the price point is lower.

Speaker #2: That's for sure. Our mix of business is moving more and more to what we see as even more in our control—being used cars, parts and service, and finance and insurance.

Speaker #2: So we can balance the business a lot stronger towards the back end as well, which is more in our control.

Speaker #5: Okay. Thanks for that, guys.

John Campbell: Okay. Thanks for that, guys.

Speaker #2: Thank you.

Andrew Doyle: Thank you.

Speaker #1: The next question will come from Chinni Wang with Morgan Stanley. Please go ahead.

Andrew Doyle: Your next question will come from Chenni Wang with Morgan Stanley. Please go ahead.

Operator: Your next question will come from Chenni Wang with Morgan Stanley. Please go ahead.

Speaker #5: Yeah. Good morning, guys. Thanks for taking my question. Can I just have another stab at the cost question? So, when you say "neutralize" and "mitigate" costs, particularly in that $6.4 million bucket, when you use the word "neutralize" in FY27, are we effectively talking about 0% growth from that, or more around decreasing as a percentage of sales?

Chenni Wang: Yeah. Good morning, guys. Thanks for taking my question. Can I just have another stab at the cost question? So, when you say neutralize and mitigate costs, particularly in that AUD 6.4 million bucket, when you use the word neutralize in FY27, are we effectively talking about 0% growth from that or more around decreasing as a percentage of sales?

Chenny Wang: Yeah. Good morning, guys. Thanks for taking my question. Can I just have another stab at the cost question? So, when you say neutralize and mitigate costs, particularly in that AUD 6.4 million bucket, when you use the word neutralize in FY27, are we effectively talking about 0% growth from that or more around decreasing as a percentage of sales?

Speaker #6: Yeah, more around decreasing as a percentage of sales, Chinni. So I did state we've gone from an 11.7% OPEX percentage to revenue to 12.4%. We won't stay at 12.4%.

Anna Bail: Yeah. More around decreasing as a percentage of sales, Chenni. So, I did state we have gone from 11.7% OpEx percentage of revenue to 12.4%. We will not stay at 12.4%. We will come back down towards that 11.7%, but yeah, that is going to be progressive across the year.

Speaker #6: We will come back down towards that 11.7%, but yes, that's going to be progressive across the year.

Speaker #5: Got it. Cool. And then maybe just in terms of that order bank, I just want to touch on that. I presume it's a little elevated, given your new units actually sold were pretty flat year on year.

Chenni Wang: Got it. Cool. And then maybe just in terms of that order bank, just want to touch on that. I presume it is a little elevated given your new units actually sold were pretty flat year-on-year, I guess, on both the FY and H2 basis. So just wondering how that supply picture is now, and does that 13,000, give or take, incremental get realized in the H1 of FY27?

Chenny Wang: Got it. Cool. And then maybe just in terms of that order bank, just want to touch on that. I presume it is a little elevated given your new units actually sold were pretty flat year-on-year, I guess, on both the FY and H2 basis. So just wondering how that supply picture is now, and does that 13,000, give or take, incremental get realized in the H1 of FY27?

Speaker #5: I guess on both the FY and second half basis, so just wondering how that supply picture is now, and does that 13,000 give or take incremental get realized in the first half of FY27?

Speaker #2: Thanks, Chinni. Yeah, the new car deliveries were relatively flat. The order intake was up more than 16%, and our order bank is up more than 26%.

Andrew Doyle: Thanks, Chenni. The new car deliveries were relatively flat. The order intake was up more than 16%, and our order bank is up more than 26%, so quite a strong order bank. At least 20% of that order bank is of the Chinese brands, which will be deliverable in the shorter term. 80% of that bank is of other brands, which are more deliverable as it comes into the H2. So progressively, I would say more of that is deliverable in the H2, but depending on which brand it is and the bank and demand behind that. We can certainly get more availability and quicker delivery, if you like, from the Chinese brands. But it is a solid order bank to go into the year with, which will be progressively rolled out over the late part of this calendar year and into the early new year.

Speaker #2: So, quite a strong order bank. At least 20% of that order bank is from the Chinese brands, which will be deliverable in the shorter term.

Speaker #2: Eighty percent of that bank is of other brands, which are more deliverable as it comes into the second half. So progressively, I would say more of that is deliverable in the second half. But depending on which brand it is, and the bank and demand behind that, we can certainly get more availability and quicker delivery, if you like, from the Chinese brands.

Speaker #2: But it is a solid order bank to go into the year with, which will be progressively rolled out over the latter part of this calendar year and into the early new year.

Speaker #5: Got it. Can I actually just focus specifically on that incremental 1,300? I guess there have been supply challenges over the course of this year.

Chenni Wang: Got it. Can I actually just focus specifically on that incremental 1,300? I guess there have been supply challenges over the course of this year. So to me, that incremental 1,300 looks like basically orders you guys were supposed to get in the H2 of FY26 that were effectively deferred. I mean, is that the right way to kind of think about that 1,300 increase, firstly? And then secondly, just remind us when the commissions to staff actually get paid here. Is it on delivery or is it on order?

Chenny Wang: Got it. Can I actually just focus specifically on that incremental 1,300? I guess there have been supply challenges over the course of this year. So to me, that incremental 1,300 looks like basically orders you guys were supposed to get in the H2 of FY26 that were effectively deferred. I mean, is that the right way to kind of think about that 1,300 increase, firstly? And then secondly, just remind us when the commissions to staff actually get paid here. Is it on delivery or is it on order?

Speaker #5: So to me, that incremental $1,300 looks like basically orders you guys were supposed to get in the second half of FY26 that were, effectively, deferred.

Speaker #5: I mean, is that the right way to think about that 1,300 increase, firstly? And then secondly, could you just remind us when the commissions to staff actually get paid here?

Speaker #5: Is it on delivery, or is it on order?

Speaker #2: Yeah, so they would be orders that we took especially in the last—yeah, last quarter, effectively, of last year. Although, as I said, the new car business was under pressure with new car margins.

Andrew Doyle: Yeah. So they would be orders that we took, especially in the last quarter effectively of last year. Although as I said, the new car business was under pressure with new car margins. The order intake was relatively strong, as I said, with the 16% growth overall. And that is being delivered over the period I mentioned earlier. The second question, I think, was on commissions, which are deliverable or payable at the point of delivery.

Speaker #2: The order intake was relatively strong, as I said, with 16% growth overall. And that is being delivered over the period I mentioned earlier.

Speaker #2: And the second question, I think, was on commissions, which are deliverable or payable at the point of delivery.

Speaker #5: Okay. Got it. And then maybe just a question just on gross margins. And I know that second half probably benefited a little bit of mix, a little bit from mix.

Chenni Wang: Okay. Got it. Then maybe just a question just on gross margins. I know that H2 probably benefited a little bit from mix. You mentioned, obviously, back end as well. But I guess gross margins have been stable at around that 16.1%, 16.2% range, H2 16.5%. Just maybe some thoughts on where steady state now and whether we can use that 16.5% to extrapolate going forward.

Chenny Wang: Okay. Got it. Then maybe just a question just on gross margins. I know that H2 probably benefited a little bit from mix. You mentioned, obviously, back end as well. But I guess gross margins have been stable at around that 16.1%, 16.2% range, H2 16.5%. Just maybe some thoughts on where steady state now and whether we can use that 16.5% to extrapolate going forward.

Speaker #5: You mentioned, obviously, backend as well. But I guess gross margins have been stable at around that 16.1%, 16.2% range; second half, 16.5%. Just maybe some thoughts on where steady state is now, and whether we can use that 16.5% to extrapolate going forward?

Speaker #6: Yeah, sure. Thanks, Chinni. Yeah, look, I think we have said for a while now that we expected that the GP percentage margins would start to stabilize.

Anna Bail: Yeah, sure. Thanks, Chenni. I think we have said for a while now that we expected that the GP percentage margins would start to stabilize, and I think that's what we're starting to see come through now, as Andrew said, as we focus on kind of balancing the pressure on the front end with the increased contribution on the back end. I think there was a little bit of an added benefit, I think, in H2 above what we probably would have expected. But I think it's definitely moved in the right direction.

Speaker #6: And I think that's what we're starting to see come through now, as Andrew said, as we focus on kind of balancing the pressure on the front end with the increased contribution from the back end.

Speaker #6: So, I think there was a little bit of an added benefit. I think in H2, above what we probably would have expected, but I think it's definitely moved in the right direction.

Speaker #5: And what was that added benefit? Was that just mix? Because you did call out, I guess, lower new car margins in the second half.

Chenni Wang: And what was that added benefit? Or was that just mix? Because you did call out, I guess, lower new car margins in the second half.

Chenny Wang: And what was that added benefit? Or was that just mix? Because you did call out, I guess, lower new car margins in the second half.

Speaker #6: Yeah, correct. I meant more as a contribution. So obviously, the second half was tougher in terms of the new vehicles, and so that added backend benefit was really extrapolated, if that makes sense.

Anna Bail: Yeah, correct. I meant more as a contribution. So obviously the second half was tougher in terms of new vehicles, and so that added back-end benefit was really extrapolated, if that makes sense. I think that-

Speaker #6: So I think.

Chenni Wang: Okay. Got it.

Chenny Wang: Okay. Got it.

Speaker #5: Okay. Got it.

Anna Bail: a little bit, yeah. Yep.

Speaker #6: Yeah. Yeah.

Speaker #5: Yeah, got it. Thanks, guys. I'll leave it there.

Chenni Wang: Yep. Got it. Thanks, guys. I will leave it there.

Chenny Wang: Yep. Got it. Thanks, guys. I will leave it there.

Speaker #2: Thanks, Chinni.

Andrew Doyle: Thanks, Chenni.

Speaker #1: The next question will come from Sarah Mann with MA Moelis, Australia. Please go ahead.

Andrew Doyle: The next question will come from Sarah Mann with MA Moelis Australia. Please go ahead.

Operator: The next question will come from Sarah Mann with MA Moelis Australia. Please go ahead.

Speaker #7: Morning, Andrew. Morning, Anna. Thanks for taking my questions. The first question I wanted to ask was just on inventory. So your inventory level has been stable, but I'm just curious, are you comfortable that the mix is appropriate in terms of being aligned to customer demand?

Sarah Mann: Morning, Andrew. Morning, Anna. Thanks for taking my questions. The first question I just wanted to ask was just on inventory. Your inventory levels have been stable, but just curious, are you comfortable that the mix is appropriate in terms of being aligned to customer demand? If not, are you getting any support from the OEMs to kind of get that mix right?

Speaker #7: And if not, are you getting any support from the OEMs to kind of get that mix right?

Speaker #2: Good morning, Sarah. Look, we have never been satisfied with our stock levels, so they can always be optimized, for sure. And it's been lumpy deliveries over a period of time.

Andrew Doyle: Good morning, Sarah. Look, we're never satisfied with our stock levels. They can always be optimized, for sure. It's been lumpy deliveries over a period of time. When it comes to supply and demand, I guess, or demand in particular for that stock, I think the OEMs are responding favorably to where there is slower moving stock, be that through floor plan support or reduced supply and production and reduced requirements for order quotas, if you like. As I say, never satisfied that it's at the right level. We want to optimize it a lot more, and we are doing that progressively. It takes time to work through some of those, especially that stock that is coming from a further distance, that it might have been ordered some months ago and is in transit.

Speaker #2: When it comes to supply and demand, or demand in particular for that stock, I think the OEMs are responding favorably to areas where there is slower-moving stock—be that through floor plan support, reduced supply and production, or reduced requirements for order quotas, if you like.

Speaker #2: So, as I say, never satisfied that it's at the right level. We want to optimize it a lot more, and we are doing that progressively.

Speaker #2: It takes time to work through some of those, especially those stocks that are coming from a further distance, that might have been ordered some months ago and are in transit.

Speaker #2: But it's a focus of the operating team here every day, effectively, to make sure that we are working through. And I think our OEM partners are well aligned to making sure that we can optimize that stock as best we possibly can.

Andrew Doyle: But it's a focus of the operating team here on every day effectively to make sure that we are working through, and I think our OEM partners are well-aligned to making sure that we can optimize that stock as best we possibly can.

Speaker #7: Great. So by the end of this financial year, in the second half, it should be at a much better level, and that should clearly assist new car margins.

Sarah Mann: Great. By the end of this financial year, in the H2, we should be in a much better level and that should clearly assist new car margins.

Speaker #2: Yeah, I think it would be fair to say that we can work through that stock, and in the second half, we'll start to see the benefit of cleaning up that where it needs cleaning.

Andrew Doyle: Yeah. I think it would be fair to say that we can work through that stock, and in the H2 we will start to see the benefit of cleaning up that, where it needs cleaning. But it does take time, as I just explained. Yes.

Speaker #2: But it does take time, as I just explained, yes.

Speaker #7: Great, thank you. And then just on your brand portfolio—clearly, you've added significant grain fields with Chinese brands. When you look at the market over there, there's a huge number of brands in China.

Sarah Mann: Great. Thank you. On your brand portfolio, clearly, you have added significant greenfields with Chinese brands. When you look at the market over there is a huge number of brands in China, so it is clearly really difficult to know who is going to succeed. Even, the big guys have been losing market share recently. When you consider new greenfield opportunities, can you just run us through the key things you consider when you are thinking about partnerships?

Speaker #7: And so it's clearly really difficult to know who's going to succeed, and even the big guys have been losing market share recently. When you consider new greenfield opportunities, can you just run us through the key things you consider when you're thinking about partnerships?

Speaker #2: Sure. Look, I think it's important to look at a couple of things. Obviously, the backing, the structure, if you like, of the group, the size of the group, the product portfolio of the group, and how that fits with the Australian marketplace.

Andrew Doyle: Sure. Look, I think it is important to look at a couple of things. Obviously, the backing of the structure, if you like, of the group, the size of the group, the product portfolio of the group, and how that fits with the Australian marketplace. The attitude, if you like, and the support and partnership with us as operators, as dealers. All of that gets taken into account. As I showed on slide 12, I believe we have selectively gone with the right groups that have scale, have strength, and have the product portfolio coming through. The other thing we look at closely is the performance of these brands in other markets across the world that we think can be replicated in Australia.

Speaker #2: The attitude, if you like, and the support and partnership with us as operators, as dealers—all of that gets taken into account. As I showed on slide 12, I believe we've selectively gone with the right groups that have scale, have strength, and have the product portfolio coming through.

Speaker #2: The other thing we look at closely is the performance of these brands in other markets across the world that we think can be replicated in Australia.

Speaker #2: So, we know that a number of these brands are performing significantly well in other markets, such as the UK or South Africa, where we can see an alignment to what will happen in Australia.

Andrew Doyle: We know that a number of these brands are performing significantly well in other markets, such as the UK or South Africa, where we can see an alignment to what will happen in Australia. So we forward plan in terms of where we see the opportunity based on some incredible success when it comes to some brands, especially in the UK market.

Speaker #2: So, we forward plan in terms of where we see the opportunity, based on some incredible success when it comes to some brands, especially in the UK market.

Speaker #7: Great, thank you. And then the last question from me is just on M&A. Clearly, there's the new ACCC process that seems to have made M&A a lot more difficult.

Sarah Mann: Great, thank you. Last question from me is just on M&A. Clearly, there is the new ACCC process that seems to have made M&A a lot more difficult. Has this impacted vendor expectations around pricing? Longer term, does the more onerous process impact your acquisitive growth strategy, and should we anticipate, I guess, more of a pivot towards greenfields?

Speaker #7: Has this impacted vendor expectations around pricing and longer-term? Does the more onerous process impact your acquisitive growth strategy, and should we anticipate, I guess, more of a pivot towards greenfields?

Speaker #2: Yeah. Look, let me go first. I think I probably can add to this as well. But look, I think it doesn’t close our mind to opportunities across the country.

Andrew Doyle: Yeah. Let me go first and then Anna probably can add to this as well. Look, I think it does not close our mind to opportunities across the country. As I say, the market is quite fragmented, so we still see opportunity there and there is a lot of discussions that are happening. We are obviously in a process now with the ACCC, which we believe is moving in the right direction. We understand the process very well through that experience. I think going forward, we can manage that really successfully. It is a new process that everyone is getting used to, I guess, is the best way to put it. It does not, in our mind, change any fundamentals of pricing or multiples. A value is a value that we would negotiate still accordingly.

Speaker #2: As I say, the market is quite fragmented, so we still see opportunity there, and there's a lot of discussions that are happening. We are obviously in a process now with the ACCC, which we believe is moving in the right direction.

Speaker #2: And we understand the process very well through that experience. So I think, going forward, we can manage that really, really successfully. It is a new process, and everyone's getting used to it, I guess, is the best way to put it.

Speaker #2: It doesn't, in our mind, change any fundamentals of pricing or multiples. Value is a value that we would negotiate still accordingly. But of course, yes, we are, and that's purposely why, under our sort of expansion pillar of our strategy, we do put both greenfields and acquisition opportunities.

Andrew Doyle: But of course, yes, we are, and that is purposely why under our sort of expansion pillar of our strategy, we do put both greenfields and acquisition opportunities. We see greenfields as a big opportunity and I think the success we have had in FY26 and into this year is proven by what we have been able to pivot our portfolio to, without an official sort of acquisition of an additional company.

Speaker #2: We see greenfields as a big opportunity, and I think the success we've had in FY26 and into this year is proven by what we've been able to pivot our portfolio to, without an official sort of acquisition of an additional company.

Speaker #3: Yeah, I think I wouldn't add too much to that. I think, obviously, the multiple piece there is going to play out probably more so in the dynamics of what's going on in the broader industry at the moment.

Anna Bail: Yeah. I think I would not add too much to that. I think, obviously the multiple piece there is going to play out probably more so in the dynamics of what is going in the broader industry at the moment, I think, rather than anything to do with the ACCC. I think that is just a learning experience and I think we will obviously be much smarter for the process that we have been through, and a little bit is them just getting a greater understanding of the industry. So I do not think it changes our approach. I think the multiple question, as I said, will be more a factor of what is broadly playing out in the industry with the brands and bits and pieces.

Speaker #3: I think, rather than anything to do with the ACCC, that's just a learning experience. I think we'll obviously be much smarter for the process we've been through, and a little bit of it is them just getting a greater understanding of the industry.

Speaker #3: So I don't think it changes our approach. And I think the multiple question, as I said, will be more a factor of what's broadly playing out in the industry with the brands, and bits and pieces.

Speaker #7: Great. Thanks very much.

Sarah Mann: Great. Thanks very much.

Speaker #2: Thanks, Sarah.

Andrew Doyle: Thanks, Sarah.

Speaker #1: The next question will come from Abraham Akra with Evans & Partners. Please go ahead.

Andrew Doyle: The next question will come from Abraham Akra with Evans & Partners. Please go ahead.

Operator: The next question will come from Abraham Akra with Evans & Partners. Please go ahead.

Speaker #4: Good morning, Andrew. Good morning, Anna. Just got a quick question. I noted in your outlook comments that there was one missing compared to last year.

Abraham Akra: Good morning, Andrew. Good morning, Anna. Just got a quick question. I noted in your outlook comments that there was one missing compared to last year, and the comment was, do you expect earnings to grow in FY27 versus FY26? Do you mind, yeah, giving us some guidance there?

Speaker #4: And the comment was, "Do you expect earnings to grow in FY27 versus FY26? Do you mind giving us some guidance there?"

Speaker #2: Yes, sorry. Thanks for the question. In that slide there, we talk about improved earnings quality. We do expect earnings to grow, financial year on financial year, for sure.

Andrew Doyle: Yes. Abe, sorry. Thanks for the question. Yeah, in that slide there, we talk about improved earnings quality. We do expect earnings to grow financial year on financial year for sure.

Speaker #4: Yeah, yeah, yeah. Thanks for the clarity there. The next segment—next question, rather—is just, Bruce, how does the gross margin structure for new vehicles differ between a Chinese OEM and your legacy car brands?

Abraham Akra: Yep. Thanks for the clarity there. Next question rather, is just curious, how does the gross margin structure for new vehicles differ between a Chinese OEM and your legacy car brands? Are volume rebates set at a higher target? Yeah, looking for some, I suppose detail as to how the two camps differ.

Speaker #4: Our volume rebates are set at a higher target. Just, yeah, looking for some detail, I suppose, as to how the two camps differ.

Speaker #3: Yeah. Hey, Evans, Anna. Thanks for the question. Look, they don't actually change fundamentally, right? So the structure of the gross margin across the brands and the different players is broadly the same.

Anna Bail: Yeah. Hey, Abe. It's Anna. Thanks for the question. Look, they don't actually change. Fundamentally, right? So the structure of the gross margin across the brands, and the different players is broadly the same. I think we did point to the macroeconomic environment driving some of consumers', I guess, price point decisions, and obviously, that would fundamentally drive the ending gross profit number. But broadly speaking, the makeup of those margin structures are the same.

Speaker #3: I think we did point to the sort of macroeconomic environment driving some of the consumers', I guess, price point decisions. And obviously, that would fundamentally drive the ending gross profit number.

Speaker #3: But broadly speaking, the makeup of those margin structures is the same.

Speaker #4: Yeah, understood. And just in line with that, I guess, that thinking—the challenge consumer, the more value-conscious buyer—channel checks suggest used car resale values are decreasing at a quicker rate.

Abraham Akra: Yep. Understood. In line with that thinking, the challenged consumer, the more value-conscious buyer. Channel check suggests used car resale values are decreasing at a quick rate. Are you seeing, I guess, looking out next six months, a more challenging used sale market and GPU per unit in the used segment?

Speaker #4: So are you seeing, I guess, looking at the next six months, a more challenging used sales market and GTU per unit in the used segment?

Speaker #2: Yeah, hey, thanks. It's an interesting dynamic, and there's some potential there, in that some of the price points and attractiveness of the new car market are impacting the used car market.

Andrew Doyle: Yeah. Abe, thanks. It is an interesting dynamic, and there is some potential there that some of the price points and attractiveness of the new car market is impacting the used car market. It comes back to the fundamentals of used cars and buying right, and that is about our sourcing techniques, which we use a lot more technology around now to make sure we are sourcing the right product at the right price for the future market, which is quite a complex thing to do. Whilst there might be some movements or irregularities in that balance, so long as we are buying right and stocking right, we believe we can continue to grow our used car business. We grew our used car business successfully last year, almost 10%. We have plans to grow significantly again in this financial year 2027.

Speaker #2: It comes back to the fundamentals of used cars and buying right. And that's about our sourcing techniques, which we use a lot more technology around now to make sure we are sourcing the right product at the right price for the future market, which is quite a complex thing to do.

Speaker #2: So, whilst there might be some movements or irregularities in that balance, so long as we're buying right and stocking right, we believe we can continue to grow our used car business.

Speaker #2: We grew our used car business successfully last year, almost 10%. We have plans to grow significantly again in this financial year, FY27. But the key, as I mentioned, is buying right.

Andrew Doyle: But the key, as I mentioned, is buying right and making sure we do not have those stock issues that can result as a movement of the market. That is probably the best answer I can give for that one.

Speaker #2: And making sure we don't have those stock issues that can result from movements in the market. So that's probably the best answer I can give to that one.

Abraham Akra: And just on the follow-up to that, is there more competition in sourcing vehicles, given the different platforms now available that are looking to scale as well, the used car business? Is there more competition on the bid price in sourcing these used cars?

Speaker #4: And just on the follow-up to that, is there more competition in sourcing vehicles given the two different platforms now available that are looking to scale as well, in the used car business?

Speaker #4: Is there more competition on the bid price in sourcing these used cars?

Speaker #2: Competition? I don't think so. No. I mean, I think at the end of the day, the market is a free market, and it's about the right buying strategy that we have.

Andrew Doyle: Competition? I do not think so, no. I think at the end of the day, the market is a free market, and it is about the right buying strategy that we have. There is always competition. I would not say there is necessarily more competition. There are more tools to be smarter about the way we purchase and source. But there is competition we are not concerned about as long as we are buying at the right price.

Speaker #2: So there's always competition. I wouldn't say there's necessarily more competition. There are more tools to be smarter about the way we purchase and source. But there's competition, and we're not concerned about it as long as we're buying at the right price.

Speaker #4: Yeah, very helpful. And in regards to your commentary around, I guess, legacy brands discounting vehicles to move stock, what are you looking for, market-wise, to suggest that this is turning around and to give us confidence that the gross margin profile improves?

Abraham Akra: Yeah. Very helpful. In regards to your commentary around, I guess, legacy brands discounting vehicles to move stock, what are you looking for, I guess, market-wise, to suggest that this is turning around, gives us confidence that its gross margin profile improves?

Speaker #2: So if I got the question right, you're asking about the aggressiveness, or the competition, if you like, of legacy brands. That's an interesting dynamic in the current market environment, but it's not unusual compared to what happens in a normal market.

Andrew Doyle: If I got the question right, you are asking about the aggressiveness or the competition, if you like, of legacy brands. That is an interesting dynamic in the current market environment, but it is not unusual to what happens in the normal market. Yes, the legacy brands and the new brands are all fighting for market share, and they are all using their tactical budgets above the line and below the line, to fight for that market. The balance, I guess, as a result. It is a little bit back to Sarah's question on stock. It is always about making sure we have the right profile of stock. As I said, we work with our long-term OEM partners, be they legacy or new partners, to make sure that we can have the optimum levels going forward.

Speaker #2: So yes, the legacy brands and the new brands are all fighting for market share, and they're all using their tactical budgets above the line.

Speaker #2: And below the line, to fight for that market. And then the balance, I guess, is the result. We did a little bit—back to Sarah's question—on stock.

Speaker #2: It's always about making sure we have the right profile of stock. And as I said, we work with our long-term OEM partners, be they legacy or new partners, to make sure that we can have the optimum levels going forward.

Speaker #4: Understood. Thanks, Andrew. Thanks, Anna.

Abraham Akra: Understood. Thanks, Andrew. Thanks, Anna.

Speaker #2: Thanks, Evans.

Andrew Doyle: Thanks, Abe.

Speaker #1: There are no further questions at this time. I would like to hand the conference back over to Mr. Andrew Doyle, CEO, for any closing remarks.

Andrew Doyle: There are no further questions at this time. I would like to hand the conference back over to Mr. Andrew Doyle, CEO, for any closing remarks. Please go ahead, sir.

Operator: There are no further questions at this time. I would like to hand the conference back over to Mr. Andrew Doyle, CEO, for any closing remarks. Please go ahead, sir.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you, Chuck.

Speaker #4: Well, thank you, everyone, for your time today. We really appreciate your continued interest in Peter Warren Holdings. For us, these are very exciting times for Peter Warren.

Andrew Doyle: Well, thank you, everyone, for your time today. We really appreciate your continued interest in Peter Warren Holdings. For us, very exciting times for Peter Warren. We are highly motivated as a team by the coming months and years ahead. Can I just say a big thank you to all the amazing Peter Warren staff for their support, for their hard work, for our loyal customers, our wonderful OEM partners and financiers that support us, and of course, our investors for your support. Thank you all very much, and we look forward to seeing you all soon. Thank you.

Speaker #4: We're highly motivated as a team by the coming months and years ahead. And can I just say a big thank you to all the amazing Peter Warren staff for their support, for their hard work, to our loyal customers, our wonderful OEM partners, and the financiers that support us.

Speaker #4: And of course, to our investors, thank you for your support. Thank you all very much, and we look forward to seeing you all soon. Thank you.

Andrew Doyle: That does conclude our conference for today. Thank you for your participation. You may now disconnect.

Operator: That does conclude our conference for today. Thank you for your participation. You may now disconnect.