Zigup Stock

Good afternoon, and welcome to the ZIGUP plc Full Year Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll.

And I would now like to hand you over to Ross Hawley, Head of Investor Relations. Good afternoon to you.

Thank you very much. Good afternoon, everybody, and welcome to another of ZIGUP's post-results fireside chat. Today, we're in the Investor Meet studio in London, which is where we recorded our full year results video, which we published last week. And I do hope that actually everybody has the chance to watch that video, which we put on to our website. It's got a number of new features, if I can put it that way. We had some B-roll and some films in there about our facilities and also an interview with one of our larger rental customers in the U.K.

As I said, this is structured as a sort of informal fireside chat where I look to raise a number of the topics which investors have had when we've been going around on roadshow, which has happened last week. And then also we've got a full week this week as well. And I'll try and blend in any questions which people are asking. If you see me peering around the place, that's usual, but it's really me going to be looking at the Q&A. So do please put any there, and we'll endeavor to answer those at the appropriate points in the discussion.

So I think with that, let's start off. Martin, should we start -- maybe you'd like to give an overview of our performance for the year, maybe using just a couple of slides at the start of the full year deck.

Okay, Ross. You said informal, but this is formal as well, okay.

This is the most formal part of the year.

Absolutely. Welcome, everybody. Thank you for tuning in. Just first of all, standing back, looking at this year's delivery, I mean it's a strong set of results. We've delivered on an operational basis and the financial basis. We've seen -- on an underlying basis, we've seen revenue up over 5%. And also, we've grown our fleet now to nearly 140,000 vehicles. So that's phenomenal growth. Underlying results in terms of EBIT, up nearly 10%. So again, when you strip back the disposal revenue, disposal profits, that underlying growth is very strong, something we called out the last time we spoke.

This year, Spain has been a standout performer for us. We know the markets are growing strong there. We've got a very commanding position in terms of what we do. So seeing the metrics there with over 16% revenue growth, it's a clear, as I say, standout performer. We've also had good momentum to the UK&I business as well. We'll come on to talk about our simplification program because it's delivering benefits on a number of fronts. But we're seeing that momentum now in the business as well. So we're seeing growth coming through the UK&I in the way that we planned previously.

And very importantly, investors have talked to us about cash. Rachel will give some more detail on that shortly, but our steady state cash is now up to nearly GBP 96 million, GBP 97 million. So clearly, that's better than I think the market had expected. So we're very pleased to be reporting on that basis. And we're on track to deliver, I guess, all the things that we talked about not only at the half year, the full year, but we're on track to deliver that and some more. So very good set of results, very pleased with, sort of, what's been delivered and the clarity around what's been delivered as well. We're very clear about what we're executing.

Right. And before we kind of move on to the next slide, almost, it's sort of what we said we were doing on the tin, isn't it? That kind of phrase? It may not be the most exciting, I mean there's some great results there, but it is what people have been looking for and what we've said we would do.

It is. I feel like, are we boring? Because we do what's on the tin and a little bit more, I would say, and a little bit more. Every time we touch the market, we've made progress. We've made strong progress. So there's nothing wrong with delivering, saying, delivering, saying, delivering. I think that's very, very key. So I think for investors that have followed the story, been with us for a while, they'll see from the management team, that's what we're about. We try and tell it as clear as it is as people understand the investment proposition, understand what the business is doing and then deliver on that, and some.

In IR terms, I'm going to call that exciting and reassuring. I think that's the...

I'll take that.

Yes. Great. Maybe if we come on to the next slide, just about what's been achieved in 2026. And really, it's a really good platform, isn't it? There's been some great progress across the business. Do you want to just pick out a few thoughts?

Yes. Just, I won't, sort of, cover all the slide. People can see the material. I mean the fleet growth I've called out. We've seen that fleet now, as I say, nearly 140,000 vehicles. So as we're investing in the fleet and replacing the fleet, that's the other good thing is that we've brought the fleet now to where we want it to be age-wise. It's a modern fleet. So that sort of inflection, if you like, of our replacement cycle in the fleet has now sort of moved on. So size is important because that scale gives us benefits in the market in terms of how we're operating.

We've also built our capacity in terms of -- we've broadened our footprint in terms of what we can do. And Spain was a good example. I talked about that, but we've opened up delivery hubs in Spain. So that's freed capacity from our branch network to be able to do more of what we do. So we're thinking smart about how do we create that additional capacity without increasing operational leverage too much. So we're actually getting some good wins in terms of the customers that -- from the markets that we're facing into, and we're able to support that by growing our footprint, both in Spain and the UK&I.

We also talk about our customer service. It's important. There's no lip service here. These results from Trustpilot and our NPS and our customer stats feedback are very, very strong. Any investor wants to go on to Northgate Mobility now on Trustpilot, they'll see a 4.9 rating of thousands of reviews, rated excellent. And that's because we do put the customer at the heart of what we do. So we don't force it. This comes natural into the business but getting it right for the customer and that customer service feedback is very, very important for us. So I think across all the things that we're doing, we're making very strong progress at delivering all the points that we've touched on previously.

Yes. I think that customer service really matters. I'm quite close to my local branch. When I go in there, they actually have a board there with all their Trustpilot scores. And it really does come down to naming the people on the front desk or the guys who've helped them out and how much that really matters for our customers.

Yes. I mean we're not a faceless organization. We are entrusted by a lot of our partners to be the face of their organization when there's touch points at the branches, when we're handing over vehicles and dealing with lots of people. So it's important that we get it right. And our people want to get it right. That's the key thing. They want to get it right. Yes, they are motivated to do that. And as you say, that feedback is continuous. Something goes wrong, and inevitably it will, you've got to put it right very quickly. As I said, if you get it right for the customer, you'll get it right for the rest of the organization.

Absolutely. Just before I came to Rachel, just, fleet investment, I think it's one of the things which we talked about on this slide, that capacity growth. So there's -- over the past few years, there's been the issue about the replacement cycle, et cetera. And now we're starting to see clearly Spain growth over the past couple of years, the UK&I also coming back into that growth side. That must be very exciting and also real underpinning the business.

Yes, absolutely. I mean look, we know that sort of post the pandemic, there was a supply shortage. We've talked about that a lot. But as we've gone through the period now, supply has completely normalized. So we can get hold of vehicles in Spain, U.K. and Ireland, no problem at all. And as I said, we've gone to that point of inflection where we've replaced the fleet now to a point that we're comfortable with.

And as you say, growth on top of that, we had GBP 130 million of growth capital that we invested in the period that we're reporting. GBP 90 million of that went into Spain. That market is growing quicker. But across the board, we are seeing growth. Last year, in the UK&I, we did consolidate that. We said it wasn't at all about, sort of, headline numbers of VOH. It was about sort of profitability, strong margins, strong returns.

So we've done the work that we wanted to do to shape that. We're investing in the markets and the sectors that we want to be invested in, and we're working with customers who are in growth mode. And what we're seeing and what we'll see coming through is that reflected now in that sort of the go-forward position. So yes, the eager-eyed people who sort of saw the closing VOH will see for the UK&I that that's gone up as well as in Spain. But it is positioning us very well for that further progress.

Fantastic. So doing what we said we would do on the tin, great platform. But do you want to just put this year, FY '26, in the financial context? We've probably got a couple of slides, which if you want to use them, but just give us some thoughts.

So I think the slides demonstrate what Martin's shared both in terms of -- we've got revenue growth. We've got profit, excluding disposals, that have been growing 9.7%. And then you can see what's happening in terms of the net book value of our fleet and that investment, not just in terms of growing the fleet, but replacing our fleet assets.

So you can actually see that how that's gone up by a significant amount year-on-year, all whilst we're keeping within our leverage guidance of 1 to 2x. The one thing I would call out also on this slide is what we disclosed around dividend. So continuing our sustainable progressive dividend. So we've increased the dividend by 2.3% to 27p. So as Martin said, that continuous doing what we said and continuing to progress, I think, is reflected in the financials.

Yes, fantastic. And then just in terms of -- you've come into something where there's this business model, which is working well, isn't it? And that debt and that leverage dynamic, we understand how to use that. It makes business work. Do you want to just give a little bit of color around some of that as well?

Yes. So as I said, we've guided 1x to 2x. We're keen to stay within that guidance range. We do have headroom within that guidance range. So we certainly have a very supportive banking group, and we've got facilities that are beyond that level. And our average rate is 3.3%. We don't have any urgent need for refinancing.

So our first tranche of refinancing is not until the next full financial year. That's a smaller piece. And actually, our average maturities are out to 2030. So we've got a really good set of financing arrangements at a good rate to support the investments that we're wanting to make in the fleet to drive growth going forward.

Perfect. I'll come back to things like the steady state cash, I think, a little later, but just maybe bouncing back. Should we just sort of run through some of the markets, some of the growth prospects? So let's go back to Spain. Clearly, strong delivery this year. There's more to come.

Yes, there's more to come, Ross. So this year, I mean, we pulled out a couple of examples this year. ADIF, the national Spanish rail operator. We've delivered more than 800 vehicles into that contract. They started only in February this year, so it's yet to mature through the book. But that's a, sort of, an important, if you like, customer in a municipal win, if you like, to have. It demonstrates our capability. It demonstrates our scale and our national presence. So being able to support a customer like ADIF was a standout for us in Spain.

And I talked about the hub network, just to be clear in terms of what I'm talking about here. Across all of our branches, 26 branches across Spain. Customized new vehicles are delivered to those branches. Customers come and collect them. There's a lot of activity. And equally, we're doing all our daily stuff as well. What we've done is we've pulled that sort of aspect of new vehicle delivery out into centralized hubs.

So in Madrid, for example, we've got a huge footprint where we have our new vehicles delivered. This last year alone, I think it was 19,000 vehicles. In Spain alone, we did a delivery and collection format. So that frees up capacity to continue to grow. So yes, we're making the space to grow. We're seeing the market being ripe to continue to grow in terms of flexible rental. So all the elements are strong for us.

The 2 drivers, one being the market itself, the second one being the economy. The economy is a smaller part of the driver because the economy doesn't sort of -- it's not the key element of why we are growing. It is because the market itself for flexible rental is growing, and we're well positioned to service that.

Yes. And I think when I hear those statistics like 19,000 vehicles, you then go per month, that is 1,500 vehicles. And so actually, the scale of turning through, and that is us replacing older vehicles and putting new ones onto the fleet. That's now a very slick operation there. They always think about that operational efficiency, don't they, within the business.

Yes, absolutely. I mean the management team have done a great job in Spain. As you say, they're looking at that operational leverage all the time. They're looking for ways of creating that capacity. We know we're going to grow. As I said, we've put our sort of investment into that growth, and we expect that to continue.

Yes. So really fruits of strong efficiency there, top market position, really nice secular growth, et cetera. And as you say, the economy is still doing well, but that's really just a supporting factor to it. And then in the UK&I, when we're sitting here -- not here, but when we're sitting, talking about those, we were talking about 8 large customers, significant orders in the U.K. and that was reflecting how the U.K. was actually starting to really focus on the core elements and growth there. That's come through really, hasn't it?

It has. I mean our proposition is about being integrated, having a platform of mobility and services that are integrated. So our strength is in owning what we do and being able to deliver on that. And where we see to great effect that comes to life is when a customer -- an existing customer takes more product off that platform, and we join up the services. So effectively, they're not having to engage with multiple companies providing services in silo.

So the more that we can do where it's joined up because the way that we view life is that if you're providing a service that is interlinked, why not have the same provider that provides that service. It takes away frictional costs. It adds efficiency to what you're doing. Commercially, it's better and just a better outcome for the customer, the end user. So those things are coming to fruition. And we're gaining some market share as well.

So another standout for me was the National Highways contract. It felt like a new contract win. They've been a customer of ours for a long time. So 10-year plus on a government-procured scheme, well competed for. So our ability to retain and extend that now for another 10 years is an excellent outcome for us. And it demonstrates our capability from our sort of secure contact center up in the north through deploying all the sorts of roadside recovery and the network of operators that we work with that provide that fantastic service for us and for National Highways. And that also leads into other things that we can do where that scale and that capability attracts other customers and partners to our platform.

Yes. And this is probably the last time we're going to use the word claims and services because as we move through, et cetera, those words are kind of that statement on that division. But absolutely, as you say, the National Highways, which can tap into all the gantries and do the core recovery, statutory recovery, police force on the back of that is actually having the infrastructure on which we can then grow a range of services from that.

Indeed.

I think we can talk a lot about all the great things. We also have to make difficult decisions as well, don't we, and about businesses which may not have actually delivered all. In truth, the market has changed a little bit. I'm just...

Yes. So I think you're referring to the 2 businesses, so NewLaw and ChargedEV. So you're right. I mean the Board took a very disciplined decision around sort of what we should do with the business. I think we called out NewLaw last year and said it wasn't core to what we do. Great set of people that sort of have operated in that business, but dealing with personal injury claims, medical claims. And we've moved away from that as our sort of it's not part of our core purpose.

So the view was that we're going to run that off over a series of years. But in truth, I think being able to achieve that and give great service to the clients at the end of that, we decided we needed to accelerate our position and put that into a good place working with a third party to achieve that. So drawn a line under our activities in that space and took the charge this year, and that's sort of out of our system, so to speak.

ChargedEV, yes, some investors have said, okay, that's an interesting one. ChargedEV, where we're installing charging points for customers. We worked with some big customers on the third-party basis as well as supporting our own internal requirements. But as you said, one reason or another, we acquired that business, it's a small amount of money. I don't think we pushed at that time, but it's under a GBP 1 million.

But we made that a national operation because we needed national scale. We needed fitters, installers and to be able to do that on, as I say, on a national basis. But with all the sorts of the changes in terms of attitude towards taking EV, not taking EV, dates and times, everything sort of changed or moved around, we couldn't get to an optimal level of service there. And it was dragging on results in terms of margins, in terms of absolute profitability.

On the day of the results, Rachel called out that when we stand back from those 2 businesses now, there was an add-back of GBP 7 million of value from FY '28 onwards. So it's bringing that discipline to say, what are we going to stop doing that's not adding value to the equation.

And I think that's a perfect sort of -- I was asking you about that in part because it leads into about the simplification and actually decision-making and what the business has done and how you've led that to think about how to actually take the UK&I businesses on a bit. We announced it at the interims and said, watch this space. And I think space has actually really achieved a lot. Do you want to just talk maybe in the first instance about the simplifying of the brands and the customer journey? And then Rachel, I'll probably come to you to think about some of the financial side of that.

Yes. So look, how we face off to the market is important to us. Since the main merger in 2020, as I said, we did 6 acquisitions. So we bought 6 different brands, additional brands into the equation. And that's all well and good. But when you're talking to the market about the products and services that you have, we want to be joined up. So whilst we've absorbed the experience and the knowledge of all the brands that we operate with, we've now simply put that into 2 divisions.

So in the UK&I, we now operate under 2 brands. So you've got Northgate Mobility and FMG. So we've simplified how we face off into the market and make it easier for customers to interact back. We have one account manager that can go in and have a conversation about the products and services that we offer as opposed to having lots of account managers go in and do that. And that simplification has added clarity about what we can do and how we can do it. Feedback from customers are early stages, but the feedback is very positive. And we can see where customers do take multiple products across the different brands, but it's all joined up.

And it's also good for our colleagues. This makes it simple for them to be able to say, you know what, I can sell these products and services. I can see how it all works, and I can sell the vision, and this is a simplified sort of process. Yes, and it comes with benefits. It wasn't the primary driver for doing the simplification. It comes with financial benefits. But that's over and above what we the -- primary driver for the simplification is.

Great. And I'm going to do a quick shout out for the videos which are coming out with our annual report, but we're starting to use them within our social media as well. So we've done one on National Highways, but also one on how the -- as was Blakedale, but has moved through to our Highways and how that simplification has really helped them drive their business. So I hope people enjoy looking at those when they come out, but I think it really sort of highlights that.

Matt H., thank you. We have a question, very grateful. You continue to win major contracts such as Highways, Tesco Insurance, et cetera. What do you think differentiates ZIGUP from competitors when bidding for these long-term contracts?

Yes, it's a good question. It's the integrated proposition of being able to join up those services and just make it easy for a customer to go through that journey. And that adds value to the equation. So when you're not working with multiple brands, multiple handoffs, multiple services, but you can deliver best-in-class and join that up, you're creating value because you're removing some of the frictional costs, you're removing some of the delay by bringing it all together. And that's a standout position in terms of being able to offer that into the market and fairly unique.

Other businesses can put these pieces of the jigsaw together and use third parties to supply it all. But when you're doing that and you're controlling that delivery of that service as well, it gets back to us with the feedback that we get in terms of customer satisfaction. But as I said, it also brings commerciality to the table. So that gives us some leverage as well.

Brilliant. I'm going to let you take a break or whatever. My eye turns to Rachel. Some of the key themes which investors have asked us to cover. Let's stick with the simplification, the slide, which I think people have got to get some interesting cost saving figures. We've talked a bit about what we thought we would be able to achieve, do you want to say where we are and confidence going forward.

Yes. Thanks, Ross. So we shared at the interims a view around where we thought the cost savings would be in terms of GBP 10 million savings for this financial year coming and then into GBP 20 million for FY '28. And that would be annualized going forward. And that's very much the focus around what Martin shared around how we're thinking about these savings is that they are sustainable savings. We are doing things to ensure that we achieve those savings going forward.

So -- we've done a lot of work. We've got much more confidence now in those numbers, and so, we've been able to reconfirm those. They are -- it's an ambitious plan, but we are well on the way to achieving that. And I think one of the things that Martin said last week was about where we are in the supplier savings and over 1/3 of those savings are now in the bag. Of course, we want to do better. We'll always look to over deliver where we can, but we're focused right now on delivering that number of GBP 20 million.

And I think when we talked about this together, you sort of emphasized to me it's having conversations at the slightly higher level. We've done the simplification and now there is that strategic partner relationship, which we do with our own customers. Clearly, we're doing that ourselves as well, and those benefits will come through.

Yes. And of course, having that conversation once in the way that Martin talked about how we're trying to talk to our customers once we're wanting to talk to our suppliers once as one entity and making sure that then we get the benefits of our scale in those conversations and that they get the benefits of having a bigger share of the pie. But we can also make sure that we're influencing their road maps and their processes that best suit us. And we've got a pipeline of conversations ongoing, but we're really pleased with how that's progressing.

Yes, it's fantastic. And then a natural consequence has been re-segmentation. The analysts actually were quite pleased that it was a relatively simple thing. We're still working through with them. But that re-segmentation simplifies things down, requires a little bit of change to medium-term guidance, but I think that's all bedding in. Do you want to just talk about that...

Yes. I mean it's never easy changing reporting segments, but we've tried to aid that transition as much as we can. There's some information on our investor website that Ross, thank you very much for helping to deliver that to show how people should be thinking about old to new. And as we've given our go-forward guidance, we've given them in the new segment. So obviously, UK&I as a whole doesn't change, as to how we are talking about the 2 pieces, and we've done our best to try and help to teach in, in terms of how people should think about old to new.

Yes. And within that guidance, there's a bit of an incremental lift to Spain, where we're seeing it still doing well and then some real positives in the U.K. as well, isn't that?

Yes. So -- I mean, I think our medium-term guidance, there's lots to be positive about. We've said people should expect revenue growth, so mid-single digit. They should expect EBIT margin growth, so both in Northgate Mobility and FMG, the margin ranges that we've set out for medium term are above where they are today.

And with Spain, we improved the margin guidance there as we're seeing margin coming through and the basis of operational efficiencies that the teams are running and some of the things that we talked about how they're thinking about delivering on their service to customers. So we've delivered a higher margin range than we had previously. And we're saying that we are confident around the GBP 200 million in FY '28 on steady state cash.

Right. Let's talk cash on that. I said I've got a whole load of themes here on the financial side. This is one which actually investors really do care about. We indicated a couple of years ago, you've come in, you said, let's just see how it goes at the interims. But now actually, I think you're -- we're sounding very positive on this.

Yes, I think we've seen a really clear inflection point in the year. That's a very clear signal about how steady state cash has evolved. That's partly due to net replacement CapEx in that cycle that we had talked about, but also the EBITDA growth coming through. And that's given us confidence now around GBP 200 million for FY '28. Again, those 2 factors will play a part as we move through to that, probably more on EBITDA as we move forward than on net replacement CapEx. But absolutely, we see now a clear path and clear line of sight to the GBP 200 million.

And steady state cash as a concept matters to help people understand something quite simple. It's not trying to show free cash flow. It's not trying to show things; we're not trying to do anything other than kind of going in simple terms.

In simple terms, it's the cash that the business generates after replacing the fleet at the same level. It's not trying to do anything more difficult than that. Holding the fleet flat and the cash that then it generates that enables us to invest further in fleet growth and the GBP 130 million that Martin talked about to drive growth in the fleet after that point in time.

Yes. And with fleet growth, just because you did have a ROCE slide and people do ask about ROCE, when you're in a growth state, ROCE does impact because of the nature of it.

That's right. So we're buying assets at a point in time, but we're getting returns for those assets over a period of years and particularly in growth and accelerated growth, which is where we were in FY '26. If you think about where we are with the fleet that Martin talked about and particularly with Spain, then we will see that will have a short-term impact on ROCE, but we're looking at the returns of those assets over the period that we actually own those assets. So we're very focused on return on investment at the point that we're buying those assets.

Yes. Okay. Very clear, and it makes a lot of sense. Martin, still slightly financial, but actually about the quality of earnings. Underlying growth in terms of what we've thought about for next year, we've indicated on that. And the quality of earnings, its disposal profits are coming down. And in many ways, you've said many times, actually, that's a good thing because it's taking away some of the noise. But actually, this year, the offset is growth within the underlying business.

Indeed, yes. I mean, investors picked up the sort of mix of profits over the sort of last 2 years as disposal profits had a sort of a bigger impact in terms of the overall results. Nothing we can do about that. We had assets that were of higher value. And when we came to dispose of them, we appreciated the value return from that. But you're right, it's -- that's why we point to the underlying performance of the business, the underlying EBIT performance because that's a true measure of the sort of the operating parts of the business in terms of what they're driving in terms of that progress. And double-digit growth is very strong.

Disposal profits will be what they are. It's our job to get depreciation right. So that when we come to sell the asset, it's supposed to be 0 loss, 0 profit. But as you know, there's always some change the way it works. So -- but that element of our financials is moderating, and it will sort of go -- we expect it to go in the direction of being sort of a non-conversation. But you're right, the quality of the underlying earnings is what is important.

And then talking about those earnings, those are on -- a lot of those earnings are on long-term contracts. It's repeatable. When we sign up with -- whether it's a new insurer or a new partner, it's a 3- and 5-year contract. National Highways, I would say, was 10 years. But they're long term, sustainable quality earnings. It's not just a flexible rent -- daily rental or something like that. This is a point that we like to make sure that our investors understand this element. When we do our budgets, when we do our forecast, a lot of what we can put in is very sustainable because of the length of contracts and because of the things that we do over a long time.

Yes. I'm going to pause for just one moment and do the usual, which is do please ask questions. Matt has asked another one, which I will come to in a moment. I was going to spend the last 10 minutes talking about some of this, the sort of theme about why we win. But please do send some questions through, and we'll carry on with that.

But in our results and actually in the annual report this year, the thing about why we win is something when we've looked at what investors, it was quite interesting, people saying, companies don't talk about this quite so much as they might do. And actually, when we've all talked about customer service, et cetera, lots of companies talk about that. But it was so interesting having investors and analysts come around on a site visit and the feedback which you got, and we got from that about saying, actually, I'm going to just go and say, what was their takeaways, which you...

I think that they could have written your script, Ross, because it was, I mean, genuinely seeing the feedback from analysts, shareholders and other investors. And they said when they came out on site and they actually interacted with our people and they saw the scale of what we do and then got into the detail around everything that involves and then multiply that by all the things that we do on a national and international basis, they suddenly realized the quality and the scale of this business.

And as you say, that right to win, when you're doing all the services that I've talked about that we've discussed, when you're doing that in the real world, it's meaningful. And that's important, as I said, because I think the old world, it was very fragmented, very disjointed, lots of opportunity for things to fall over when multiple companies are involved. And I think that's the bit that we see as being very important to our delivery. And likewise, we get that feedback from customers.

But yes, to bring it to life, to go out on site to see these things in action, to see all the things that we do and how we do it, I think people realize, actually, I think you call it the economic moat, but people realize actually there's a high barrier to entry to be able to replicate what we do.

Yes. And so when we think about ADIF, they were taking it from 24 or 25 of our Spanish branches, they couldn't have done it with anybody else with that kind of a service. If we just go to the customer slide, on the video, we had one of our larger U.K. rental companies actually have a video. It's another one, Jamie, talking there about why actually coming to us. So that customer service, we sort of started off with that. I'm not necessarily going to pitch, but it does matter and it's part of DNA, doesn't it? So the right to win comes from actually delivering.

Yes, absolutely. I mean, strangely enough, I was with the owner of that business that we case studied on Friday. And this business has grown exponentially through acquisition. The fleet size is over 2,000 vehicles. And Peter was able to talk to me firsthand about why it's important to get that fleet right and what we're doing and how that's supporting their position in the market. This presentation of their vehicles, the consistency of that approach, they're winning national contracts on a sort of a landscape basis to do all the housing developments and so on and so on.

So it's important to them that they present as a joined up unified business, even though they've done a number of acquisitions. And the flexibility that we can offer them by being able to bring fleet on rapidly and support sort of that scaled up growth. But equally, if there's times when it's quieter, that you have that flexibility on the rental program to bring fleet on and off. But that's a great story of how a business is putting its capital to work to develop its business and leaving the OpEx with companies like ourselves to provide the mobility to keep them working 24/7.

Yes. And so Matt, thank you for your other question, which is how much opportunity do you see the Northgate Mobility brand create for cross-selling? Well, actually, that company is a good example because of our arborist vehicles and other stuff there. Does that cross-sell side?

Yes. Look, there's different parts of the model that cross-sell well. But if you strip it down in terms of activities, vehicles need to be recovered from the roadside following an accident. Vehicles need to be serviced, maintenance, and repaired. You need replacement vehicles. You need to have contact center capability to deal with things. You need fleet management and accident management assistance.

So across the platform, we're providing these services, and we are consolidating our own footprint. So we get scale economies from our contact center, from our branches and from our specialist capabilities. Probably a better example is to talk about the business that was known as Blakedale. Now that's Northgate Highways. Blakedale was a family-owned business based up in Lancashire in Chorley, single-site operation, trying to service as many of their customers as they could from that site.

We've now scaled that across more of the Northgate Mobility branches. So therefore, they can touch customers in the Southeast, West, Midlands and provide that service a little bit more effortlessly. That will create opportunities, cross-sell opportunities not only for Northgate itself in its own brand, but also for Northgate Highways. So those are examples where you're using that scale, that consolidated scale to provide services, as I say, in a joined-up way.

Yes. And the interesting thing with -- exactly with this was how when you talk to the guys in the business, they say, the strength of relationship which Blakedale had and which they've carried on actually has meant that a number of big names, which you would have thought would be natural customers of the other parts of Northgate, but for whatever reasons, haven't really. Suddenly it is going, these are guys we trust, we know these and that single account manager, that relationship can then actually travel across. So it's really -- it's both ways, isn't it?

Yes, absolutely. And to Matt's question about sort of Northgate Mobility, we talk about our insurance replacement vehicles. They are cited with the Northgate Mobility fleet. So it's all -- it's one fleet that we present in the UK&I. So our ability to deliver to customers, we think about it, there's a lot of doorstep delivery that we do. So therefore, you've got maybe 2 cars out, 2 drivers out doing lots of things, but the proximity of our branch network to support that means we can do it much more efficiently.

Pre-merger, that was sort of a little bit more fragmented. And in its worst case, I talk about having 2 drivers take 2 cars, 2 hours to deliver a car. Now we're sort of touching customers if you take away the Outer Hebrides, et cetera. We're touching customers a lot more frequently in quicker time. And that sort of adds efficiencies back into what we can deliver, and we can share that with our partners.

Fantastic. So it's a broader question, which I get asked is about capital allocation or on that. And I know both of you have answered this, so I'm going to kind of throw it into the middle and whichever one. But it's just thinking about that capital allocation over the medium term, how that works and what the potential for as that as we go through that GBP 200 million, how you feel about that? I don't know who wants to take the...

So one of the things that we talked about last week is as we start to see that GBP 200 million coming through in line with our medium-term guidance is that I said that alongside that, we should see leverage reduce. However, it gives us optionality now to apply our capital allocation priorities and to think about where are the opportunities to deliver additional value for our shareholders over and above what we've set out for medium-term guidance.

And our priorities are the same as they've been in terms of thinking about organic investment, the dividend, M&A and then returning sort of share buybacks to our investors. But now we'll be in a space where we can make some of those decisions at that point in time. But what I've tried to guide people towards is that if you think about the guidance that we've set out, the leverage should reduce and then we'll decide what we can do in terms of optionality to see at that point in time.

Yes. Martin, do you have anything to add?

No, I think Rachel set out where we are. I mean, our priority is to invest in our business. If you look at our cost of our debt, average cost of debt is 3.3%. And that's a great place to be, and we're getting returns obviously well above that. So we should be investing capital to support that growth. But of course, as the sort of cash evolves and builds, that does give us that optionality. And of course, the Board is always sort of mindful. We've got the policy, very clear on that, and Rachel set that out, but it does give us optionality in terms of what we do.

Yes. Fantastic. I've got one more theme to talk about. I'm also conscious of time as well. So -- but thank you, both Matt and Eric. Hopefully, we've actually answered the questions which you put through. I think we did. Technology transformation. No company should go through something without mentioning AI. But actually, we have a real reason for talking about that at the moment, don't we? Rachel, do you want to just talk a bit about the Microsoft collaboration and where the potential is?

Yes, sure. So a couple of things I would call out is that we have been deploying a new platform into our contact centers that has AI within that and functionality that has been making a difference to our customers and to our employees in terms of how they can be productive, but also how it can help to smooth the journey for our customers. And so we're continuing that journey of deploying different parts of technology into that space.

But we also announced a collaboration and being a frontier firm with Microsoft around Copilot. So deploying over 3,000 licenses across the group. That is not us just saying we're deploying licenses, and everybody sees what you can do with it. We have a really clear program and looking at specific use cases about how we drive, again, process efficiency, but also value for our customers in terms of how we think about using those licenses. And that is being done in conjunction with Microsoft and a joint partner so that we can make sure that as we move through the next few months as we're really now into the deployment and execution space, we can drive value from that.

And Martin, I've heard it'd be a pain to kind of go certainly within the insurance journey of a claim. There are times where technology shouldn't play a part or rather voice and having somebody talking to you really absolutely matters, and we'll never move away from that.

No, you're right. It's important. I mean we see that that's a core capability that's of great value. I talked about the instances where you might be at the side of the road, you've had an accident. Hopefully, nobody is injured. But you're in a state of distress. And yes, you might have contacted your insurance company, but you need to speak to somebody. You need to be able to -- you don't want to speak to a chatbot that's going to take you around in a bit of a circle. You speak to somebody with that empathy that's required but reassuring that you're going to -- things are going to be put back right and practical things.

So I think that sort of voice connection absolutely helps deliver the service, and that's why we get such good feedback as well from customers. Not everything is at the side of the road. There are things that come into contact center that are post the first notification, if you like, and then a bit more administrative. And that's where technology absolutely can benefit you because you can self-administer elements of that. But the front end of needing to speak to somebody when something's happened, that's not part of your daily occurrence that you weren't expecting, didn't want it to happen, but now you need that support. And as I say, we've got that capability as one of our core strengths.

Yes. I think it's a fascinating business whereby in some parts, whether it's in the body shop or workshop, technology matters, but actually so does experience and the apprenticeship program to actually teach people real human skills and technical skills. It will take a long time before those ever get supplanted even with slightly more complex vehicles.

Yes. I might be misquoting somebody. I don't know if it was Larry Fink of BlackRock. Or is it BlackRock or Blackstone? Anyway. But talked about -- and I heard a podcast where he talked about sort of, don't send your son or daughters to university to get sort of legal degrees and everything else. Think about electricians, think about plumbing. And it is very much that. I mean we won the King's Award for our sort of people innovation in terms of promoting opportunity.

We have over 520 apprentices in the group. These are people that are paired off with trained mentors to give them a formal program of apprenticeship. And that's worked wonders because a lot of those skills that have come through our body shops over and the industry, more generally over many decades, that were starting to get lost. So by bringing in the apprenticeships and running the program that we do, it's been fantastic seeing people on site, getting trained, formal qualifications and then getting a job at the end of it. That's the key thing.

And I was going to say when I spoke to the King, but I'm not going to. I'm good. Yes. But that was the key thing about how do you retain those people afterwards when you train them. And over 90% of our apprentices stay within the group. So they're actually applying their skills and getting paid a decent wage for doing that.

Yes. And we took around some other people being shareholders and analysts, and we gave them a go to have a go at plastic welding and some of the things on a site visit. It's not easy to do. And actually, there's a real skill to that and to actually to do that consistently at the kind of productivity levels as well.

Yes. I mean it's not sort of talking technology for technology's sake, but it demonstrates actually that when you're running a scaled body shop facility, you need to deploy the latest techniques. We've all been on site. We've all had a little go with these things, and I think everyone's fallen apart that I did. But you need to have the latest techniques. It plays to how efficiently you are repairing vehicles, how it affects your ESG, your credentials in terms of being able to repair rather than replace and also getting good outcomes commercially as well in terms of doing the right thing.

So quality is at the essence of what we do and using the latest techniques from the accredited organizations that we link into to make sure that we are up to date with that and putting all the modern technology into our body shops and our workshops to support our technicians do that job. And that's very credible when you come on site and you see that in action. And I think that's the feedback we were getting when we did that.

Okay. Well, look, I would just say, again, economic moat clearly and the productivity and productive growth on that actually comes. But I sort of feel we're there. We've done all the questions. I found a really interesting conversation on that. So thank you very much, Martin. Thank you, Rachel. I hope everybody found that interesting. Always welcome to fire in some questions offline, et cetera. But I think with that, I'm going to hand back to the Investor Meet team to close the call.

Great. Martin, Rachel, Ross, thank you for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.

Good morning, ladies and gentlemen. Welcome to the Zigup Plc Financial Results for 2026. We've got something different for you this morning. Normally, you would be used to me and Rachel with the first set of full results presenting to you live. We've actually prepared something earlier, and we're going to show you the presentation of the results so we can get all the message across very clearer. This is to enable a wider audience to actually see the management present the results for this year.

Presentation will be about 17, 18 minutes. After that, we'll then go into Q&A, and we'll take questions from the floor. We're also on the webcast. So, we'll be taking questions as well from any analysts that are online today. So, with that, I will leave you with the presentation. Thank you.

Rachel and I are pleased to welcome you to our 2026 full year results presentation. This was a year of strong operational and financial progress. Revenue and closing fleet on rent both grew by over 5% and EBIT before disposal profits increased by just under 10%, reflecting both operational gearing and mix. Across the business, the progress was broad-based. Spain was again the standout performer with our differentiated service-led offer, supported by a growing rental market and a strong economy.

Rental revenue was up 16% with further fleet growth to support customer demand. In the U.K. and Ireland, both divisions built good momentum with new and existing customers. Rental expanded its product range and specialist vehicle network with growth in the second half of the year of over 600 vehicles. Claims & Services won new clients, including Howden Insurance and expanded or extended relationships with partners, including QBE, Admiral and Direct Line.

Cash generation was better than expected, giving us confidence to invest further in our growth opportunities, and we expect steady-state cash to continue to grow from here. We also made significant progress on the U.K. and Ireland simplification, announced at the interims. The program is on track, and benefits are already coming through.

With automotive supply markets normalizing, '26 gives us a stronger baseline for sustainable financial and operational growth. This is the foundation of our performance. Alongside fleet growth, we invested in our infrastructure in Spain to increase capacity and opened a new body shop in Cardiff to expand our repair output. Technology is also enhanced in how we serve customers with upgraded contact center capability and deeper digital integration into customer systems.

Our simplification program is the next step in our operating model evolution. It gives customers a clearer route into our products and services while allowing us to put our infrastructure to use more effectively across the businesses. A major part of this is consolidating our supply chain and building strategic partnerships that deliver greater value and service. This is already creating economies of scale, cost savings and a simpler way of working. Our engagement is centered around using a range of levers from simplifying processes and consolidating our supply chain to competitive tenders for some larger long-term contracts.

Together, these have already locked in 1/3 of our targeted savings from our supply chain alone. We are on track to deliver the GBP 20 million run rate target, we set for FY '28 with GBP 10 million of savings expected this year.

Simplification also means disciplined decisions, particularly where market outlooks change. And to this end, we exited 2 noncore markets where we do not see sustainable or profitable growth. And this reflects our capital allocation discipline, only investing where we see strong margins and attractive returns.

I will now hand over to Rachel for the financial review.

Thank you, Martin. Hello, everyone. As Martin said, this has been a year of good momentum across the business, and I'll share how that comes through in the numbers and why we see this as an important step forward in terms of delivery.

Starting with the headline numbers. Overall, I would describe this as a strong set of results, underpinned by good trading across the group. Revenue rose to GBP 1.86 billion and underlying revenue, excluding vehicle sales, was up 5.2%. Underlying EBIT, excluding disposal profits, grew 9.7% to GBP 164 million, reflecting strength in the core rental businesses and continued progress in Claims & Services.

One of the key points is steady-state cash, which increased by GBP 79 million to GBP 96 million, reflecting both earnings growth and continuing normalization of fleet replacement. We have proposed a full-year dividend of 27 pence per share, representing growth of 2.3% year-on-year. This is consistent with the increase delivered in the prior year and reflects our progressive approach to shareholder returns.

Turning to revenue performance. What I think is important to note here is the growth in the underlying business and across all 3 segments. UK&I rental revenue increased by 5.2%, driven by pricing and mix and a disciplined focus on higher-margin channels. Spain delivered outstanding growth of over 16%, supported by both the strength of the proposition and market conditions. Claims & Services grew modestly as expected, supported by new contract wins, renewals and organic growth. Vehicle sales declined as expected as the replacement cycle normalizes.

Growth has been driven by our core activity scaling and from this, laying the next foundation level for continued and consistent growth to come. Having looked at revenue, let's take a moment to look at margin. Excluding disposals, we continue to see margin expansion, reflecting strong operational discipline and cost control. Rental profit increased by GBP 14 million, with UK&I margin improvement to 16%, while Spain remained strong at 19.3%. Claims & Services overall margin of 4.6%, accelerated through H2 as expected. This reflects the hard work undertaken to drive efficiency in the cost base and focus earnings on the right quality of business.

Furthermore, we've also made good operational progress on the UK&I simplification program. And as previously guided, we expect to see the benefits of our actions in the financials from the start of the current year. Underlying PBT at GBP 160 million was at the top of expectations. While lower than the prior year, this was due to the continuing normalization of disposal profits, along with financing costs linked to fleet growth.

Statutory profit before tax reflects GBP 26 million of impairments related to our noncore businesses in NewLaw and Charged EV, as we accelerate our exit. We also took GBP 1 million of restructuring costs below the line. The benefit from these exits, I would estimate at circa GBP 7 million per annum in profit improvement from FY '28, and that's already reflected in our guidance on UK&I margins.

I'm pleased that our full year figures firmly evidence that we have passed the inflection point in steady-state cash, which is clearly now on an upward trajectory. It's worth emphasizing that EBITDA rose to GBP 503 million and combined with lower net replacement CapEx delivered steady-state cash of GBP 96 million. Growth CapEx increased to GBP 132 million, supporting expansion, particularly in Spain. We're leaning into a great market position and attractive conditions.

The key takeaway is the business is now generating increasing cash while continuing to invest for growth, a strong combination. Our balance sheet and financing arrangements remain well positioned, helping to deliver both performance and increasing scale. We continue to invest to drive sustainable growth by expanding and refreshing the fleet. Fleet assets increased to GBP 1.76 billion, up over GBP 250 million. These assets are income-generating, liquid and accessible, if required.

Net debt was just under GBP 1 billion, with the increase also reflecting investment in the fleet. We've maintained our disciplined approach to leverage and at 1.9x, kept within the range previously outlined. We also retained substantial headroom, and the high proportion of fixed rate debt means our borrowing costs are stable at 3.3%. The maturity profile of our facilities remains long dated with an average maturity in the 2030s and with no principal facilities due in the next financial year.

Our return on capital employed this year reflects a combination of deliberate actions and known factors. Underlying performance drove an improvement by around 0.5 percentage point, demonstrating continued operational discipline and better returns from the core business. This was offset by the normalization of disposal profits and increased fleet investment. But the fleet investments made are to support future growth and with the confidence of that growth generating attractive returns.

Taken together, this positions the business well with a stronger underlying return profile as those investments mature. Importantly, we remain focused on ensuring returns are sustainably well above our cost of capital, with a disciplined approach to capital allocation and a rigorous assessment of returns on each investment.

Turning to guidance for FY '27 and beyond. This is provided reflecting the new reporting segments for the UK&I. In the medium term, you can expect underlying sales growth of mid-single digit, focused margin improvement and increasing steady-state cash. Our view on Spanish rental margin of 18.5% to 20.5% has improved from previous guidance, reflecting current delivery and further opportunities for operating leverage whilst continuing to invest to support growth. We expect Northgate Mobility to grow its EBIT margin in the range of 11% to 13%, and we expect the FMG businesses to grow EBIT margin to more than 5%.

These ranges reflect the benefit of the GBP 20 million savings from the simplification program and from the planned accelerated exit from NewLaw and Charged EV. Given the performance on steady-state cash, I remain confident in the delivery of GBP 200 million in FY '28. And from this, we would expect in the medium term to have greater optionality on how to deploy capital. Alongside current guidance, leverage should fall in the medium term. However, we'll continue to evaluate opportunities to allocate capital to deliver further attractive returns.

For FY '27, we expect disposal profits will continue to moderate, which should be more than offset by underlying trading and cost control. And as a result, we are positive on our outlook, which is consistent with market expectations for profit growth for the year. Zigup has been a fabulous business to join and at an important moment in its strategic journey. I'm looking forward to my first full financial year here, continuing to support sustainable growth and the progress I know we will make as the simplification program continues at pace.

Thank you, Rachel. I want to turn now to why customers choose us or simply put, why we win and how that strengthens our competitive position.

Our strategy is to use our scale, network and integrated service platform to deliver a differentiated customer experience. This year, that strategy became even clearer through our simplified operating model. Larger customers want partners who can support them seamlessly across their own footprint with scale and expertise to meet their ambitions.

In rental, that means nationwide coverage facilities in the right locations and dependable expert support that keeps customers moving as well as doing more of what works well. This includes our mobile service capability, which adds responsiveness, convenience and reduce downtime. Another good example is the contract for over 800 vehicles with ADIF, the national rail maintenance operator in Spain. We delivered most of these vehicles this year, supported through our 25 Northgate depots nationwide.

In accident management, our national U.K. reach enables us to deliver an integrated service for insurers, brokers, lease and automotive companies to be delivered consistently and to the same high standards. In March, we were delighted to secure an extension to our national highways contract for up to a further 10 years. We have supported their statutory recovery on the strategic road network since 2008 and managing the response to over 22,000 recoveries a year. This contract reflects the strength of our capability, and our secure roadside control center also provides the scale to support police forces, insurers and out-of-hours roadside recovery.

Scale is one reason we win. Market positioning is another. We operate in large markets with solid growth foundations, focus on opportunities that are sustainable and profitable and lean into structural trends, such as greater outsourcing. Flexible rental penetration is growing, particularly in Spain, as more companies move from ownership to usership, which allows them to focus capital investing in their business, not in purchasing fleet. We are also building insight-led services, as vehicles become more connected and fleet operations become more complex.

And we continue to invest in our people, so we have the skills and expertise to support the future. With an award-winning apprenticeship program and over 520 apprentices across the group, we are building our future skills base and technical leadership. Built on service and product breadth and skilled delivery, we are well positioned for sustainable future growth. And customers choose us because we deliver consistent quality and at scale. They value our expertise, our trusted advice and the relationships we build at every level from account management to branch operations.

In this year, our NPS increased by a further 2 points, maintaining an excellent rating. Trustpilot gives us immediate feedback from customers across workshops, delivery and service interactions. And our UK&I rental Trustpilot score is 4.9 out of 5 with 96% of thousands of reviews rated at 5 stars. For us, customer service delivery means responsiveness when issues arise, proactive advice to maximize fleet uptime and sensitive handling of insurance claims. All these attributes are central to why we win, retain and grow customer relationships. So, let's hear from one of our larger fleet customers who has doubled their rental fleet with us from 400 vehicles over 2 years to over 800 today.

We've been a customer with Northgate since 2018, we really developed our relationship with the stakeholders within our business as well as Northgate. I mean what we really enjoy is the confidence, the support that's available nationwide. We're a national company. So you guys having the locations, the right locations where our drivers can get in and out of for servicing is critical as well as your mobile clinics now, which Northgate introduced in. And obviously, your capability as having the highways -- Northgate highways having that to cover like our vehicles and new trucks from you. And also that we've been -- Northgate have been open to listen to us what we want and implement that. So there's been a lot of work that's gone in the background to make things work how they are today.

Our annual report includes more examples of this customer focus in action. We have also invested to increase capacity and productivity. In Spain, our new purpose-designed central delivery hubs at East Branch Logistics and managing the delivery of over 19,000 new vehicles to customers this year.

Across the group, we also invested in the latest workshop and body shop equipment to further improve repair productivity and capture more of the repair value chain. New technologies are helping us become more efficient and more responsive. Data volumes are growing rapidly, as vehicles become more connected and claims processing becomes more automated. Used well and in combination with this data, AI can improve our contact center operations and support functions. That is one reason why we have launched a collaboration with Microsoft, as one of their frontier firms applying AI where we can make a meaningful difference.

In conclusion, we are confident in our strategy, our business model and our market positioning. We are well placed in attractive markets and segments and our diversified, but integrated approach to delivery means we are more resilient to economic volatility. There is strong momentum in our rental business and the simplification of the customer journey, which will open up more growth opportunities. We can also see an excellent pipeline across repair and recovery as well as growing organically with insurance partners who have been with us for many years. This is because our right to win is earned by delivering consistently for customers, and that delivery is central to our customer proposition and our growth plans. All this gives us confidence both in being able to achieve good levels of revenue growth this year and to deliver profit and steady-state cash expectations. Thank you.

Bad news is it can't be for a while longer because Hollywood is not wrong, sign up. So, we're back in the room now. So we're live. We're just checking that the webcast can hear us. I did have a summary from now, we finished with the summary. I think you've got a clear message here about sort of strong financial and operational growth in the business, solid platform for continued delivery. I think the cash was a standout point for us in terms of steady-state cash.

We're investing in the growth of the business and generating steady-state cash, which is fantastic. Spain, another standout performance, as I said at the half year, the business is growing demonstrably, and we see that continuing as that sort of market for where usership continues to expand. So overall, it's a very strong set of results that we should be pleased with, and we are pleased with them.

Okay. So on that note, I'm going to open the floor to questions from people in the room to begin with -- analysts in the room and any questions that comes through the e-mail forum as well.

I thought David's hand go up first, so go with David.

Two question areas, please. The first one on Spain, it's clearly very encouraging that the guidance on. I am just keen to understand what's changed there? Because previously, we sort of expected some moderation from the later days. And what could take the business towards the upper end of that guidance range, what you need to see happening in that market to look at?

And then the second one, just in terms of the closures of Charged EV and NewLaw. Firstly, I'm just keen to understand a bit more context around Charged EV, because that has been a more recent area for the business. Sort of what's -- why your position on that has changed? And secondly, in terms of NewLaw, are you still expecting -- does this sort of derisk residual collections from that business or residual case load? Or could there be sort of deferred from that?

Okay. So if I pick up the question on NewLaw and Charged EV and you pick up the margins in Spain. So I'll start with NewLaw. So I mean, we indicated that the NewLaw wasn't sort of core to our sort of go forward, and this is an accelerated closure of the business rather than sort of longer-term runoff. And it does derisk the collection element of the residual. Clearly, when you're sort of running off a business, there's a lot of factors to take into account in terms of retention, best client interest, getting all of that sort of right with the regulators as well. So the accelerated runoff just derisks that for us. It brings sort of a closure to what we're doing, and we could draw a line under it. So that's the first one on NewLaw.

Charged EV is slightly different. Look, we -- the legislation or the sort of the regulation around sort of charging vehicles and electric vehicles and the mandates has been changing. It's been flip-flop in the market. We geared up that business to be a national installer of charging points, and that volume hasn't really come through in the way that we'd like to see.

So it's been up and down. We can't make sustainable, profitable returns in the medium term from this business. And I think we're very disciplined in our capital allocation. So we took the view that we don't want to -- we don't need to own that business to get what we want, so we can partner and get that sort of charging infrastructure. It doesn't change our core offering. So, we'll still be helping our customers transition into electric vehicles where that's appropriate. And we can partner, and we will partner with some to do that, but we don't need to own that asset and carry the capital losses that go with that. So we took a disciplined decision there to close that.

Thanks. So on Spain, you're right. The margins have improved since previous guidance. So we're really pleased with how that business has performed. That is primarily around the fantastic efforts from the Spanish team in terms of balancing the investments that we've been making there with operational efficiency and ensuring that we continue to service our customers in the right way, but obviously have the right focus on the cost base.

As we look forward, there is an opportunity for us in terms of thinking about operating leverage, as the business grows. But again, bearing in mind the right balance and thinking about the investments that we need to make to ensure that we're supporting our customers in the way that they would expect. But we do see that if the business continues to grow, there is an opportunity there around operating leverage.

Okay. Again, 2 questions from me, please. First of all, just following up on David's point on Charged EV. I mean adjusting items seem large. Did you look to sell to avoid those costs? And if I caught your presentation correctly, Rachel, if we take NewLaw and Charged EV, it's effectively a GBP 7 million profit benefit in FY '28 versus FY '26?

And the third question on return on capital. Can you give us a feel under the new reporting structure, what capital is going to sit in FMG? Clearly, it's a lower-margin business. The aspiration is to move to sort of above 5%. But what level of returns are sitting return on capital? Should we be thinking there? And is there an overall target for group return on capital?

Okay, Andrew. So I'll take that question one and the other 2 are directed for Rachel. So look, we looked at all options for Charged EV in terms of how we could sort of maximize the asset, the returns to us, the continuity of our colleagues, et cetera. And if you stand back and look at the whole market for charging, the quite a few businesses actually went into administration in that space. So it's been a very mixed sort of environment. The ecosystem out there has not been supporting infrastructure -- charging infrastructure at scale. So yes, we look at the options. We've come up with the best option that sort of suits our returns. Okay.

And then yes, you're right. So what I said in my comments on the video is that from FY '28 as included in the guidance that we've given is a GBP 7 million profit benefit, as a result of the exits from NewLaw and Charged EV. In terms of the return on capital employed questions, yes, FMG in terms of its new reporting segment is a very capital-light segment. It's a services segment primarily. And so it does have a better return on capital employed than the rest of the group. But as you said, our focus primarily for that segment is on margin and profit improvement in line with the guidance that we've given today. We do have internal thresholds in terms of the returns that we would expect from the investments that we make, and we're very diligent in terms of how we apply those. But I'm not going to share sort of a target on that today.

Okay. Andy?

Yes. Just probably a wider question in that an LCV market share, you have -- no, you have it LCVs in Spain, I think it is about 12% of the market per vehicle on the road. U.K. is about 5%. What would you say is your market share? And how can it grow and how fast can that grow? I know you're taking advantage of this shift from, say, ownership to rental. What is the size of the market base? Same question.

I think we give some detail in sort of the -- in the presentations around sort of size of the market, total market opportunity, Andy. And in terms of what our guidance is on that, we talk about sort of single-digit growth in revenue. Spain is growing at a much faster pace than the UK&I, but we are focused on profitable growth. We've said before, when you look back just at the -- what was the Northgate business where you talk about LCVs, VOH is not a pure indicator of value because you can grow, but it might not be profitable.

So we're combining the return on investments, good levels of growth in sustainable markets that we see as being something that we want to be involved in. So we've given some indications there in terms of what our outlook is for the medium term. And we're leaning into that growth, say, on a very profitable basis. So I think your answer is wrapped up in terms of where our guidance is. And we see that continuing -- we see that continuing because of that move to that usership from ownership. That's the structural trend that is supported and saw one reference in the video there for the Nurture Group, a company that is acquiring doing M&A in the market, but as a company that sort of moved from an ownership model into a sort of usership model, saw the testimony there about why that was important about having availability to use our branches and our hubs and workshops to keep their fleet mobile. So fleets do understand that there's a difference with a rental proposition to an ownership proposition and the benefits that are sort of coming through for those customers is pretty evident.

Okay. And then the dividend about 2% seems to be a bit more?

Yes. I can't win on this one. If you could pay more, we're over distributing. We don't pay enough, it's not enough. It's about a sustainable progressive dividend. I mean we are looking through where our sort of cash generation is, how the business is performing. It's an increase, so it's progressive. It's a strong dividend. It's a good yield in terms of where we're at. The Board is very comfortable with it. We've got a mix of shareholders on the register, some income funds, some growth funds, some hybrid funds. So I think the dividend is in the right place. And we've been very clear on our dividend position. So I think that what we declared today is a good step-up.

I've got James have a 3, please. Is the same question just for different divisions. In the video, you talked to integration into custom systems. Could you expand on that a little bit more? The second part is, what does technology rollout look like within the rental business? Or what do you have plans there? And then thirdly, in your call center or fleet management operations, what stage are you at with regards to AI piloting or AI deployment?

Okay. So when we talk about deeper digital integration, I mean, where we're booking in with our customer systems where we're providing either portals or interactions with our customers. So we're sharing data. We're sharing the same sort of input platforms. So therefore, there's a seamless transaction that enables us to work, particularly with insurers and our brokers, for example. So we cut out a lot of sort of manual input and sort of resharing data. It's all on one platform.

So you see live, you can see live and where the customer status is, for example, on the repair. And the more we get to share that data with our partners and they share with us, then it makes it easier for us to use AI to be able to, if 60% of the calls coming into contact center is an example, say if 60% of the calls coming to the contact center could be asking about an existing claim in a process, that's in a repair where somebody's got a replacement hire vehicle. And all they want to know is when do we expect the vehicle to complete on the repair.

Now when you put all that data in your system and you are digitized, that can be automated. So you don't need to wait once you validated yourself through the contact center, [indiscernible].

Your second question. So we're using contact center technology to be able to do self-validation as well. So you're not having to wait to speak to an operator to go through all of that. Then you've got your own ability to self-serve and get some of those answers. So that takes away something where you just want a very quick answer without having to wait to speak to somebody if there indeed is a wait. So that's where we see ourselves developing further with that sort of data piece and that integration. And we can see that sort of falling out across a wider customer base.

On the technology rollout in rental and ...

Yes. So we've got a program of activities that were underway in rental, both in terms of supporting the operations in terms of how our customers interact with us, but also some of our staff who are more mobile and how they can then interact with branch and with central operations. So that program is underway in a number of phases.

As Martin said, on the call center piece, we rolled out a new telephony platform that's been fully rolled out in insurance services and is being rolled out to the rest of the group. And we're seeing benefits from that, both in terms of the productivity of our call center agents, but also what it means for our customers. And of course, we're looking at other things that we can do that, particularly as we think about Copilot and our work with Microsoft and some of the use cases and how that can bring additional benefits into that environment. And we'll certainly to share a bit more about how some of that's going up the metrics.

I just -- I've got a couple of questions. The first one, just looking at the steady-state cash flow for the year. Obviously, a good year-on-year improvement. If you look first half to second half, it actually touch. Just in terms of your kind of profile of that going forward, is there anything -- in the year was there anything in there kind of seasonality or anything that you're expecting to come back in the first half a bit stronger or just that profile to get to that GBP 200 million?

Yes, we'll lean into that.

Yes. So there's nothing that I would call out materially in terms of the profile of that how we would expect to roll through to the GBP 200 million.

Okay. So it's more of a kind of a linear increase really. Yes. And kind of the second question you really touched on in terms of a GBP 7 million profit improvement in the savings. But looking at it from a cash cost or exceptional basis, are you expecting a similar level to last year? Or how do you kind of see that over the next year or 2 to achieve those savings?

So I'm not expecting anything from the current year and on a go-forward basis, I'm not expecting anything significant. So we've taken a very critical by in terms of those businesses in terms of how we've evaluated that for financial year '26. And I wouldn't expect anything it is difficult.

And then final one, if I may. Just looking at the UK&I in particular, and you already touched on that maybe vehicle hire isn't the best kind of metric for capturing everything. But your average was for the year was down slightly 1.5%, but then closing was up 3.5%. I know you've talked a little bit about, I think it was local brokers. But could you go a little bit more detail about how that kind of has worked through the year and what you expect going forward?

So yes, I mean, we've a stronger second half in terms of, as you said, the closing was up against the average. What we said at the interims and before that is that we are focused on profitable vehicle hire. So making sure that we're leaning into the right segments where there's higher margin, sustainable growth. So we're very well organized with facing into the market in terms of where we want to penetrate. We've had success in that. So we have seen that sort of growth coming through, and that gives us the confidence that we said about sort of underpinning for the next financial year.

I think in Spain, it's been a continuation story in terms of that sort of growth of the fleet. So overall, we are at the trajectory is up. You're right. And I keep pointing out VOH in itself should not be the indicator, it should be underlying profitability and the returns of those investments. But we're in a strong position, and we're seeing the market be particularly strong to support that.

One more question. There is a GBP 20 million saving under simplification that, have you been able to allocate that or give guidance how is that allocated between the divisions going forward? Or is that still just a number in the voices?

So in the margin guidance that we've given, Andy, that saving has been allocated between FMG and Mobility. Obviously, we're still partway through the program to where things finally land might change differently. But based on the plans that we have in place and how we've executed those, then the margin guidance includes those in both the places where we'd expect the savings to land.

Okay. I'm told that we've covered all the sort of questions that are out there. So unless there's anything more from the floor, we will close.

Okay. Just to say thank you for your time this morning and have the presentation and go through this. I reiterate the solid sort of performance. We're very confident about the business. I think it's been strong delivery. So more of the same.

Yes. Thank you.

Good morning, ladies and gentlemen, and welcome to the Zigup Plc investor presentation. [Operator Instructions] Before we begin, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful.

And I would now like to hand you over to Ross Hawley, Head of Investor Relations. Ross, good morning, sir.

Good morning, Jake. Thank you very much for that, and good morning to everybody online. This we do as a fireside chat format. So I'm very pleased to be here with Martin Ward our CEO; and Rachel, our new CFO, [indiscernible] newest CFO. This is for our half year results, which we published on Wednesday morning. I think I would expect a number of people have actually seen those results. But I think just to kick off, really, if I just say, Martin, you described early this week as a great start to the year. Do you want to just talk to some of the highlights that you see on the results?

Okay. Thank you, Ross, and good morning, everyone. Yes, look, I think the 4 key takeaways for me in the performance that we're talking about for the half year, really, first one is the standout performance that we've seen in Spain. I mean that's been a phenomenal sort of result increasing VOH, average VOH over 6,000 vehicles in the period. So the economy is doing well in Spain. The market is still growing in terms of rental. And I think the team have done a fantastic job being able to grow our position and there's still a lot of opportunity to grow there. So performance from Spain, first point.

Second one, I would say, is the PBT upgrade. So clearly, I said in the announcement, this has exceeded our expectations. The business is performing really well. And we were able to land these results with saying that our full year is expected to be at least at the top end of the then formed consensus. So in plain speak, that was at GBP 155 million PBT, and this has since obviously changed the numbers. I think that was a great sort of way of showing that momentum.

The third thing is the change to the UK&I operating model. So we've been on a journey. This is an evolution. We've been on a journey since our merger in 2020 about providing mobility services in the platform. And last year in March '24, we brought the management team together, and we talked about that, having a senior management team across the UK&I business. So that evolution in terms of how we're now going to operate going forward and collapse our brands into 2 very distinct divisions in the UK&I and the Northgate Mobility and FMG will provide our services from those banners. That's another standout. That will deliver some benefits. Rachel will talk to those benefits in more detail. But clearly, that's given us some further momentum.

And I think the last point I would make, there's many more, but the last point I would make is the inflection in the steady-state cash flow. So investors and shareholders have been saying to us, great, like the momentum that we're seeing. We want to see the cash flow. We generate a lot of cash in the business. So in the period, we've grown that steady-state cash. We add another GBP 20 million on top of what we had, it's GBP 43 million. And bearing in mind, after steady-state cash, we still invested GBP 73 million into growth CapEx. But we're on a trajectory of building steady-state cash simply because the net replacement CapEx, the fleet is in a place that we're comfortable with a little bit further to go. And clearly, there will be less net replacement CapEx going forward. So that steady state cash generation, I think it's proven itself out very nicely.

Fantastic. Thank you. Just for people who haven't been with us before on this, we very definitely welcome questions online. The reason my laptop is here is I get to see the questions here. And I'll try and ask as many of those which are posted as possible, but try and group those into themes just to make it a more sort of coherent conversation on that. So please do ask questions into the chat.

And I think while people start to think about that, maybe if I turn to Rachel and this is your first set of results here, it's your first investor meet your first set of results here. I think you gave some thoughts on Wednesday about the first few months and what you found. Do you want to just elaborate on those a bit?

Thanks, Ross. And I'm really pleased to be here. And I shared that since I joined since August, I've had the opportunity to go and visit lots of different parts of the business and meet with different stakeholders. I've been really impressed by what I've seen both in terms of the level of expertise and the commitment and the commerciality of the team that we've got, but also the assets that Zigup holds and how we leverage those assets. And I can see the opportunity for growth, we are growing much more opportunity for us to grow and to grow efficiently.

And I think we are doing that with the right level of pace and energy and the operating model change and the pace at which we're moving forward with that. I think that's evidence of that.

Yes, absolutely. And I'm sure we'll come on to each of those in due course. Is it worth just going through some of the financial headlines just as a starter?

Yes, sure. So strong set of results. As I said, [indiscernible] growth, 4.5% revenue growth and the EBIT, excluding our disposal profits grew by 11.5% in H1. And Spain standout performance over 16% revenue growth, maintaining really impressive margins of 19% margins. And then in the UK&I rental business, I think that's a great example of how we're leveraging the assets that we have. So driving over 6% revenue growth using pricing mix and the growth in our value-added services.

For our claims and services business, volumes were down and so revenue was flat. So still a good performance based on sort of volumes, but we see a great path for H2 in terms of the opportunity in that business across H2 and also in raising our EBIT margin in that part of the business.

Fantastic. I think, yes, clearly, a strong start to the year. And that's, as you said, about great progress across the business. So maybe -- and thank you. I can start to see some questions coming through. And we will touch on each of these inflection in cash, the operating model, et cetera. But I think it would be remiss not to actually talk about the first half and margins in terms of some of the operational side, people still think about it in those 3 different geographic and disciplines. Where would you like to start? Should we do the UK&I first? Or should we just talk about Spain because that has been the standout performer?

Then we'll talk about it more, Ross. So here. Look, I'll start with Spain because I think that's a very strange story really in the sense of -- we've talked about the rental market size in Spain. So Spain has got a commanding position in terms of what it does. It's a differentiated proposition in terms of rental or sort of leasing where we see that sort of competitiveness. And the rental market is growing. And that's the key thing here is that it's only 5% penetrated in terms of rental over all the mobility in the Spanish market. And in the U.K., that's more like 12%, 13%. So there's a long way to go. And that sort of structural change still, we've talked about it before about companies no longer want to own a ship, they want to use a ship. We're seeing evidence of that in terms of where that growth is coming from.

But over 6,000 vehicles on, and that's where we've directed our capital is coming back with good discipline and strong margins to see that level of growth. It's really pleasing. And the economy is doing well, we know economies can change in the worst of it, but let's take the wins when the wins are there. And I've said before to investors as well, you got to think about this business in a slightly different way as well. When we're growing, we consume capital because we're sweating capital. We're putting it to work. We're buying assets. We're going out on rent. We're growing our asset side of things and we're growing our services side of the business.

But even in a potential downturn, what -- if we're not buying any fleet, if we're not investing capital, we just throw off a lot of cash. That's the converse of when you're growing in investing capital if you're not doing that, you throw off cash. It's got some good qualities about this business in a growth cycle where you're growing EBITDA. But in any sort of future downturn, the characteristics are throwing up a lot of cash in the business as well.

So Spain is a great story. We expect that to continue from what we can see from the short to medium term, we expect that to continue and plenty of opportunity to go for.

Let's just stay on Spain a little bit longer because obviously, managing growth is a challenge if you've got this based on growth and demand. So maybe doing some great things in terms of operationally and thinking about that to cope with that scale of growth to actually allow that to continue. That's right, isn't it?

Indeed, yes. I mean there's a few things. We've been opening up some service points in Spain. Customers polarize around our branch network. So it's important when we take on a new account and we have taken out some good sized accounts. Then we just picked up the large Spanish rail operator. We'll be commencing rollout of vehicles for them in February 2026. So, not even in the numbers yet. But it is important that we have that locality to be able to service the customers.

That's the way the model works. So we've been opening up service points. We had the new delivery hub in Madrid in Getafe, which enables us to take in delivery of vehicles very quickly, which we can get them out to customers very quickly. We've seen that sort of operational improvements come through in terms of how quickly we can get vehicles on the profits. We're going to repeat that in Barcelona as well. We've got a big sort of network in Barcelona. So we're going to consolidate into a delivery hub there as well.

So -- and Spain needs that capacity. We need that additional capacity to be able to support what it has. At some point, we will get some leverage -- operational leverage out of that capacity in terms of what we invest in.

And then besides physical footprint. We've been using technology as well to sort of support progress in Spain. We have showcased the stuff Rachel went over and we saw firsthand the e-auction platform for selling our vehicles in Spain. That's a new rollout of technology and actually what it can do with analytics, profiling and how we actually market our product just means we're maximizing the value of the sales that we can get from our disposals, another good sort of evidence point of just how we keep refining and improving our model there.

Yes. And there's more to go in Spain. I think it is one of the message that -- there's been a question here just are there other markets to expand such as Portugal, et cetera, clearly something which makes logical sense. How do you see about kind of the how much opportunity there is in the Spanish market?

Yes. Look, we talk about it all the time. The Spanish team will tell you that there's so much opportunity on their doorstep. So we can sort of drill the land that we're standing on to find more gold. So there's plenty of opportunity. There isn't a shortage of prospect pipeline is strong. There isn't a shortage of opportunities for us to explore. And it makes sense for us when we're looking at capital allocation and the discipline around that. We have a look at sort of competing projects and what the returns are. And whilst we can sort of continue to grow very strongly organically, I think that's where the capital goes.

We're always open-minded to what opportunities can bring on a longer-term strategic basis. But I think the focus for Spain is to be able to maximize their organic opportunities.

And just for people, we -- on our website, we did a capital markets event in Spain in September last year, and there's some very good information and slides there. I think one thing we really drew out is the concept of the service proposition is actually quite unique for the Spanish market or it's one where absolutely people are coming to us for that. Just before we move off Spain, I think you'd reiterate that.

Absolutely. As I say, it is a differentiator. We own our own workshops and body shops. So we can do all the service and provide all the services from inside the business as an integrated model. That isn't replicated in the sort of the more wider competitive market. So it is a differentiator. And it is important. If you're running a fleet and you require your vehicles to be out on the road every day, to be able to turn those vehicles around very quickly on service maintenance repair, tires, all of that stuff is important and Spain does that really, really well.

And I've kind of carried on Spain because when I look at the questions coming through, obviously, there's a lot of news flow in terms of the U.K. and what we're planning to do. But I think a lot of people said, Spain is the unsung hero at the moment, it's no longer unsung because just the strength in terms of margins, the strength in terms of the growth, et cetera.

So yes, we were at the meeting yesterday with an investor and I was sort of -- slightly stopped in my tracks when one of them pointed out was, I realized Spain was now as big as the U.K. rental. And it has sort of crept up over the 5 years. And if you look at the sort of trajectory in Spain in terms of EBIT now, it's sort of on the course for EUR 100 million EBIT. Some of the forecast, that's just the sort of the run rate and the trends. And if you look at the size of the fleet, it's a record size in terms of what we're operating with, utilization is very strong.

So I think credit to the team in Spain as well. I mean they've done a fantastic job that focus and that ability to support them and do what they need to do. It's a great position. And I don't know if you had questions on, I'm going to preempt and say this now, Ross, but people say, well, why don't you sell Spain then and just get the sort of the...

Not yet, surprisingly not yet.

Well, I'm going to answer it anyway to [indiscernible].

That's unscripted [indiscernible].

People do ask that question, by the way. So look, let's lean into that one. 5 years ago when these businesses merged, we had an activist shareholder on the Northgate register, I say activist, a nice activist, [ Crystal Lambart Richard. ] And Richard pointed us to sell Spain. I wasn't on the board then, by the way. But if we had done that and if Richard is listening, it would have been half the value it would have been 2 years ago, 3 years ago. The business has got a lot further to go, a lot of value still to build for us. And we do run the business. It is separate, it's not integrated with the U.K., but it's got a lot further to go in terms of what we can do. So I'm preempting that question now, Ross.

Okay. Fantastic. And I think we will come back to listeners in terms of capital allocation and where one places growth CapEx, et cetera. But let's move to the U.K. and let's stay on rental for a bit. I think clearly, a lot of large fleet orders coming through, really good demand.

There is good demand. I mean Rachel covered it. What we've seen in the UK&I, we brought the size of the fleet down modestly. But what we've done is we've increased the revenues by over 6%. We've increased the EBIT profit by 14%. So we've done more with less. And that's the discipline around saying how do we put our fleet to work, how do we get the right sustainable returns and moving away from some of the older model where we would put almost end-of-life vehicles out on this last bit of rent at a lower margin rather than dispose of them, taking the capital and reinvesting [indiscernible].

There is a discipline in the UK&I around getting good sustainable returns. But you're right, we've got some good orders, and I profiled some of them at the analyst presentation. We've had some good wins that will be coming through as well, and we can support that with the capital as well. And that's coming from large -- mainly large customers in the infrastructure side. So we've seen a rail sport company taking a large order, a water company taking in excess of GBP 10. We have a short-term excess contract with Royal Mail on 300 vans, circa 300 vans. So there's lots of things coming through, but we're doing this on the right margins and with the package of services as well. It's not just about renting the van. It's all the other things that we do for our customers as well.

Yes. And I think that's absolutely what has come through. And I remember when we took this conversation 6 months ago, the comments about infrastructure side, lots of those large orders are really from places which we see, we think about the right place to place vans and what the opportunity is for sustainable rentals.

Indeed, I mean, we profile, as you know, in the appendices of the presentation, we do give the pie chart and the sort of split of the industries. And it's fairly consistent. It hasn't changed very much over the last couple of years. And we focus, complete focus on quality, and that's the piece.

So look, I think I mentioned last time on the government spending reviews, a lot of them have been allocated to the highway hills, infrastructure products -- projects. And we support a lot of customers that are sort of in that space. So yes, it is about quality. It is about sustainability. I've talked previously about some of the areas that we do less in, and that's where we're focused, say, just making sure that we bring the fleet to work in the right places.

So very broad, very diverse but an ability to make decisions, which I know you both do on the CapEx calls, et cetera, to make sure they go in the right place. Let's just finish off in terms of the claims and services side before we move, which, I will start asking some questions about CapEx, et cetera, and inflection of cash. That's clearly what a number of people are asking about. But claims and services, some renewals, some wins, Howden Insurance is in there, which is a big global broker. Lots of positives there.

A lot of positives. Rachel said sort of the revenues were flat and the margin did improve from 4% to 4.2%. But I think that for me, it's a fairly quiet summer in terms of what's coming in. I mean I'll never ask the team to do something that if the work isn't coming through in terms of accidents, obviously, you can't skin as much claims that you need to work with. But what I would say is that the business has seen some good renewals on some big contracts. We talked about the Tesco renewal, again, multiple years. Yes, Howden, you've mentioned. Howden, the insurance broker, international player, good presence in the U.K. We only onboarded them in October, by the way, so the sort of their numbers haven't come out.

But we've given an indication we expect margins to track towards sort of more towards 5%. But yes, it's a strong business. And we're still only penetrated in the market around 22%, 23%. So there's further to go. And when you win contracts in that space, new contracts, they're typically 3 to 5 years. So again, it just plays to that quality of earnings and we're working with big names. When you look at the U.K. motor market, if you think of the big insurance names, these are the names we're working with. So we sit behind them providing services to policyholders. And we provide a lot of capacity on our repair front. So we've got our own network of body shops.

So there's lots of things that we provide into the insurance market. And we are agnostic how you call the mobility, whether it's credit tire, direct tire replacement, courtesy cars or whatever. We provide mobility. And under the new model going forward, that will be under our Northgate Mobility banner.

Indeed. And just before we jump on to that side, we're also investing in the U.K. in terms of body shops and greater capabilities, et cetera, productivity. So there's still lots of growth there and actually, we're doing better within ourselves.

Indeed, yes. I mean, look, when people think of body shops, they think of under the arches. The world has moved on demonstrably from them. This is about sort of providing good quality, modern body shop space. We've been transforming out of sort of some of our older premises that we bought the old Nationwide business into good high-quality sort of 20,000 to 25,000 square foot of premises. And with that investment in technology in terms of the latest things that we can do, the car park and the modern fleet is moving forward. There are different techniques for repairing now. And we provide that capacity, as I said, to the sort of the insurance market and beyond.

So skilled technicians, we won Apprenticeship of the Year for our body shop apprenticeship scheme. Over 90%, closer to 95% of our apprenticeships stay with us after they've been through the training. I talked previously about bringing the average age of our technicians down by 14 years with people coming into the industry. So we've got a good position in that space. The market needs to secure capacity to do these repairs. We have that capacity, not only in our own body shops, but we run a network as well. So we're able to sort of flex that capacity with what we're doing.

And also, Ross as you know, we've been building our mobile technician repair capability as well. And that offers great flexibility for customers where there's a sort of a quick fix that's needed. It supports the body shops in terms of being able to increase capacity at times of need. And it's a brilliant offering to our partners, and we're delighted with that sort of flexibility that we can provide.

Yes, I was actually talking to one of the managing that and saying the ability to go to a fleet customer and say, we can actually set up in a tent in a very clean zone within there and plan and manage a lot of smaller repairs, et cetera. It's great for that customer because the bans are just quickly in and out. It's great for us because we can carry on servicing and providing that sort of support. So a real good opportunity there as well.

I just wanted to touch on the residual values. And we have written markets normalizing quite a few times over the past year or so. And I think -- and you called that absolutely right. Just before I want to turn to Rachel just in terms of kind of the view on the outlook. Normalizing markets, normalized markets, disposal profits coming into range. I think you called it right.

Thank you. Yes, indeed. I say you the royal you of the team. But you're right. I mean, look, residual values in the U.K. have stabilized and they have been stable for some time. So we said it was on that sort of trajectory where it would sort of normalize and it has.

I would say in Spain, slightly they've been elevated still slightly in Spain. Now we are forecasting that they will fall in time, but they have been elevated. So one thing I would leave our listeners here is just to think about it in this way. In '22 and '23, there was a shortage of supply of vehicles into the UK&I market. So people remember you couldn't get supply post COVID and so forth. So those vehicles that you would have had in those years would be the vehicles that would now be coming to market on a used basis.

So there will be a global shortage -- I think not global, national shortage in terms of those vehicles coming to market in the next year and the year after. That could give rise to a view that prices actually could increase on used vehicles. We're not calling that now. We're just saying that's a better -- that will be a surprise to the upside. We're saying it's stable, but I know there will be that shortage coming into that space, and therefore, there will be demand for used vehicles.

We won't have as many vehicles to dispose of in those periods because obviously, as we've said, we've pretty much got to the point of inflection in our fleet. So by the end of this financial year, we'd expect our fleet is in exactly where it is. The age of the fleet has come down quite significantly. We'd expect the fleet to be now just very normalized in terms of replacement. So there's some things to watch out for there, which, as I say, are positive, but I'm just saying that now it's on record, we might see a benefit from that.

Okay. Great. And just turning to Rachel on this. I think I want to round all the sort of section off just in terms of the building blocks before we talk about the reorganization. David, you've been very patiently waiting for this as -- to answer your question. But in terms of laying out what we see for the second half and the confidence for the outlook, Martin touched on that GBP 155 million, just give us a little bit of context before we move on.

Yes, sure. So obviously, based on what we see for the first half performance, we're really pleased with the strong set of results and what we can see in front of us. That's why we've guided to at least the top end of what consensus was around the underlying profit before tax. And we've been clear about the margin ranges within that and also specifically where we would expect claims and service margin to be in terms of the second half. So a high level of confidence in that.

Great. So Martin, should we just jump into the simplification? And I say that the camera's focus is on you at the moment because you've been talking a lot, we will move that around a little bit.

What are you saying?

I'm seeing you. Oh, talking a lot. I'm sorry. You've been going [indiscernible]. Let's jump into the UK&I simplification announced on Wednesday. And I think you called this a natural evolution and continuation strategy almost merger and there's some good building blocks. So just want to give kind of that background and then Rachel, I'll talk to you a little bit about the program.

It's very much around how do we provide our services into our markets. Now look, when we -- I'll give you a good example. When we bought the Blakedale business, which is a very well-run family business, the view at the time when we purchased it and we wanted to protect that was that very good relationships in the market. Blakedale traffic highway specialist vehicle business, very good relationships in the market with the name Blakedale, et cetera, and it was important to preserve that. And I understood that and then replicate that again with FridgeXpress, our temperature control business that we bought as well.

And we did preserve that, and it was important to understand and gain the knowledge and the IP and all the things that you need to do when you acquire businesses. But guess what, people buy people, not the name above the door, they buy relationships with the people that go through the door. So we've had that time now to evolve. We've seen Blakedale customers purchasing services from Northgate and Northgate customers purchasing services from Blakedale and so on. So you get the picture. So we're in a position now where we can simplify this. We get feedback sometimes it's very noisy. You do lots of things, lots of brands. We just want to simplify that. So that's what we're doing.

So from an account management perspective and a business development perspective, you can have one conversation with us, and we can just bring the service and products to one touch point, and that's important. And all of our team have built up that experience now. It's been building and building and building. I said the single management team that we put in place in March '24. So we are now ready to do that. And this is the rollout. We've been planning this for months. This is the rollout that we will continue with.

We will report on -- for the full year, we are going to report on the same basis just to give investors, shareholders a chance to catch up. But they will have that new structure -- reporting structure beyond the end of this financial year when we get to that. So this will make it very simple for our customers, for our partners to work with us and make it very simple for our own team to maximize the resources and the scale that we have to deliver the products and services.

And when I go to my local branch, there is the Northgate Rental there and there's the Auxillis. They're all doing vehicle rental, vehicle replacement. So on the ground, a lot of this is absolutely there already, isn't it?

Indeed, look, if you think about it, I mean, the Auxillis business, for example, that provides replacement vehicles into [indiscernible] customers in the insurance world, more than 70% of those hires are done under a protocol agreement there. So it's process. It's process about getting mobility out there, booking and repairs and so forth. And you're absolutely right, Northgate Mobility, all of our sort of contact centers that are providing that service is about process to deliver that. So we can combine that, we can get the scale and get the efficiencies and we can get the benefits that derive from having that single entity.

Fantastic. Rachel, there was a part of a slide you had just in terms of the sort of talk about the program, its cost, its plan. Do you want to just sort of lay that out again some of your experience and certain sides of that as well.

Yes, sure. So I'm really excited about what we announced this week on that. And it is an 18-month program. But as Martin said, we've been planning that for a few months. And in terms of what we're expecting around savings, what we've said is based on what we see before us on our execution plans that we should expect GBP 20 million worth of savings in financial year 2028. And then we'll give some clearer guidance at year-end. But what I said is that what I would work with now is around sort of GBP 6 million to GBP 8 million for next financial year in terms of net savings.

Now the biggest part of that -- and we shared that is that there is a large part that is linked to our supply chain. And through the work that we're doing on the operating model, that allows us to unlock some of those conversations. And this is not around our main fleet. This is around the supply chain that sits around that and how we deal with our other third-party suppliers. That's right. Exactly.

And we have at the moment a very high number of transactional suppliers. And what we want to move to is a much smaller number of strategic suppliers. So that means for our suppliers, they get a bigger share of wallet and closer alignment with us. Obviously, it means for us, we get better terms, better pricing and that ability to work much more closely with the suppliers as they think about their road maps in terms of products and services that will clearly address our needs. And we'll keep that process competitive through competitive RFPs, but we've had some really good early benefits. I've run something similar in the past. The head of procurement run something similar sort of same scale and size. And so we're absolutely on the ground running that program now.

And I think what you just sort of indicated, this is tried and tested. I mean we've experienced supplier consolidation. We've been a beneficiary of that in the outsourcing from insurance companies is something which actually I think everybody understands and it's something which we're quite confident about.

Yes. I mean we've got the work to do, but we've been -- we've mobilized quickly. We've got some early results, and we've tried and tested and based on our experience and reaching out to get some also external input to make sure that the direction of travel is the right one, we're confident about what we have.

And then just going back in terms of what you were talking about, the financial implications on that. And we gave some guidance. You've sort of given some numbers around that because quite a lot of the supply chain. This takes time to come through. So therefore, it will build. And therefore, it is annualized GBP 20 million from our FY '28 in that year and will build through up to that, which is why you sort of said there was about people. I think the analysts are modeling kind of mid-single-digit benefit, GBP 6 million, GBP 7 million for next year.

Yes. And I think that that's true of most transformation and change programs that need to get the work in, but actually the benefits will come. And so the activity now is a very high level of activity and mobilization the benefits will come through...

I think clearly, we've sort of seen the share price is one element of that, but in terms of investors and analysts, very pleased the implications of that. But Martin, in terms of -- obviously, we've had conversations with some of the major customers just talking through this. They've been positive and can see the simplicity of this and the implications on the operational side are also very positive.

Yes, absolutely. I think for the customers, they can see that this provides more scale, more resources, more depth, more ability to have those single conversations as well because we talked before about customers that have taken multi-products, multi-services products from our platform. Now that we're joining it up and you can have a single conversation that makes it much more simpler and all the documentation that goes with that as well to simplify it. So they're very pleased. We haven't had just positive conversations, Ross, I guess, in terms of feedback.

So now is the time is right to do it now. simply because, as I said, you have to have that experience to understand. I always say what we do is simple, how we do it isn't. And it's important that you have that experience and the depth in your management team and your leadership structure to be able to deliver this. But now that we're in that position to do it, we can see the sort of benefits that Rachel talked about that are going to be released on that. And that's creating velocity in the business as well about how we change and how we make progress.

Fantastic. So I'm going to change gears. Brian and others have been asking questions really and David, inflection in cash flow, the CapEx, et cetera. So let's move into that. But Martin, again, we talked about this before about the business model. And actually, this is a very time-tested business model through a number of cycles. Leverage is an essential -- is a natural part of our business model and start this off by reiterating that.

It is, Ross, of course. Look, we've said we'll work within a 1 to 2x leverage, and we're working at the top end of that leverage at 1.9x. But we've got those opportunities. So why wouldn't we put capital to work? Why wouldn't we expect it, as I said earlier, and get those sort of good returns that we're seeing. We're going to continue to work with inside our 1 to 2x. So let's be very clear about that.

The steady-state cash that we're generating through this inflection point and as that sort of builds out, we can put that to work. As I said, it opens up options in terms of what we do. And our well-established sort of capital allocation model says we will put that to work to grow the business where we can. So -- but it is a feature. And I've said before on these calls as well, if you look at our sort of peer group and we've had some work done, the average leverage, EBITDA leverage is 3.5, 3.5x leverage. That's a mixture of private companies and public companies.

We're comfortable with where we're at. We're a Plc, we understand the parameters we're comfortable where we're at, and we can fund the opportunities. We've got plenty of capital headroom in terms of facilities available to us. We've done all our refinancing for -- out to 2030. And we're in a good place in cost of our financing, I'm quoting on Rachel, 3.2% we've said before, we've got a really good position on that.

So look, absolutely put capital to work, very comfortable working on the ranges that we've talked to, and we're going to generate the cash that's going to give us options going forward.

Fantastic. So Rachel, I'm going to just turn to you. You come in, CapEx meetings happen weekly. You're signing off some big numbers. There's a strong discipline around this, isn't there?

Very strong discipline. And we're making significant investments in our fleet. And so if that's appropriate. But it's not just in terms of the CapEx meeting, it's about how all of the teams who are involved in that process and across the business are really thinking about the return on the investments that we make.

We've put GBP 70 million into growth CapEx in the first half. And I think that's evidence of that process working because the majority of that has gone into stay. And we can see the evidence of the benefits of that coming through the results. So we'll continue to make those decisions and look at those different factors as we decide where capital going forward.

Okay. Fantastic. Just to address one question. So Jack was just asking about in terms of the kind of ranges of finance which we have. We've got very strong in terms of our support group, different kinds of financing in there as well and kind of what I was going to say. We've got good financing.

We haven't as part of my onboarding, I met with all of our banking group, very supportive group, as Martin said, had a very successful refinancing exercise. Most of our financing right now is on private placement. I've got no concerns at all about where we are in terms of our financing.

And this is actually at the corporate level. There's very minimal asset financing related and none really related to actual vehicles but just a small pool of vehicles as well.

That's right. That's right.

And I'm kind of asking that because Jack was just asking in terms of are we starting to do asset financing. We did some as part of that to just grow and identify different pools, but it's a very small part, which we don't draw down too much on. So actually, all of it still remains within very much our kind of core lending group very committed to us.

That's right.

Fantastic. Right, inflection in steady-state cash and we're reaching an inflection point. So just tease out the reaching an inflection point, how you were thinking about that? It's something which we talked about in the full year, but you're seeing the numbers absolutely evidenced in that.

We are, and I'm pleased that we've been able to share that message as part of the results. And we have been clear about reaching, and I want to come back at the full year and give an update on that. But obviously, if you look at our doubling of steady state cash in the half year to GBP 48 million I think the trajectory is clear. And as Martin said, we're seeing stabilization in residual values also in terms of the cost of new vehicles. And our EBITDA is growing as we expected. So 7.6% growth in EBITDA. And we're moving through the replacement cycle as we had expected. And if I've done some work looking through the detailed models as we think about going forward and as those factors start to play out. And I can see the path to the GBP 200 million that was shared previously in terms of 2028.

Yes. Martin, does it feel too early to talk about what we might do in terms of cash flow? I mean in terms of -- it opens up more opportunities, I think, is probably the right way to think about it.

Yes. I mean, look, we've got a long-standing allocation policy. We've said that. And we want to support growth. Our purpose for being here is to grow the business, to grow our earnings, quality, sustainable earnings, not just sort of growth on the top line. And I think we've demonstrated to a track record that we've improved the margins on the business quite significantly over time.

So it does open up options, Ross, you're right, and we have discussed this. But as I said, we do want to support growth in the business to grow EBITDA, grow the quality, and that's really what our mantra is.

Okay. And really to tie back, I was going to ask about the market opportunities a bit earlier. But I think one of the things which you're saying is there's a lot to go for in our own markets. We can see that visibly before us. We will use the CapEx for those purposes as the call.

For sure, look, I mean, I think if you've read the presentation, people will see that there's a lot of momentum in the business. And that momentum is growing. We are very busy in the business. We just came off before this call. We had nearly 200 of our leadership on. We've given feedback from these results and picking up all the points and the feedback that we get from investors and stakeholders. And the team are very, very focused, but we are very, very busy. And that's good busy. So we -- this is what's given us confidence about this. I mean we've -- I guess we've been saying this for some time about sort of the quality of that -- of this business. And I think these are just sort of good landing points to keep demonstrating sort of what the quality is here. And for me, that's important because it is about sustainable growth in terms of what we achieve, and we're just very well positioned in our markets to benefit from that.

Absolutely. I'm just looking at the question. Brendan, I will write back in terms of self-driving vehicles or the threat and opportunity. I think short answer is we don't view them as being a threat to our business. I don't think we should discuss that. And if any others come through, then clearly, I will try and respond to those. But I think really, we're just about at the end.

So Martin kind of hand over to you to say, have you got any closing remarks, which you just like to say before we wrap up.

Yes. Look, I think for these results, clearly, I mean, we're pleased at least that they've resonated with the market as well. So let's take that win, first of all, because I think I sat here quite a few times on these calls and maybe be a little bit frustrated that maybe the message isn't landing or people are seeing the opportunity in the same way as we do. It's only one version of the truth, I'd say. And I think this business is a quality business.

If you look, I keep pointing to those sort of multiple contracts we have with big companies, some of the big wins with large companies in the infrastructure side that support in the rental, the characteristics of this business, if there's a market downturn because we've lived with this overhang of the U.K. economy being pessimistic about the U.K. economy for the last couple of years. And we've just -- we've just plowed through all of this.

So I'd just say, look at the quality of this business, look at the multitude of services that we're offering, look at the markets that we're addressing and the partners that we're working with, look at the cash build profile. I mean Rachel mentioned the route to 200. My eyes even went 5 years beyond that on that spreadsheet on the business plan. And I use the expression, my eye is watering.

Which is not an Investor Relations term. Unfortunately, the market doesn't understand that in terms of guidance.

Eyes wing in terms of sort of where this business can go. But that's the opportunity, I would say. That's the opportunity. A solid business, solid assets, great prospects, well positioned. And as I said, a good set of results to top that off.

Fantastic. Just before I hand back, I hope that was interesting and helpful to people. I'll respond back to any questions. We are just coming to the end of our first. We've done 2 days of road show. We're going -- got quite a busy week next week. We're going to the U.S. for the first time in January. So if anybody on the call is actually listening from there or whatever, we very much hope to see you in January where we'll be going around there as well.

And I think really with that, I'm going to say thank you, Rachel.

Thank you.

Thank you, Martin.

Thank you, Ross.

Thank you, everybody, and I will hand back now.

Perfect, guys. That's great. And thank you very much indeed for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company.

On behalf of the management team of Zigup Plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.

Good morning, everyone, and welcome to the Zigup Half Year Results for 2026. Let me start by saying that I'm really pleased to be reporting on a great start to the year with performance exceeding even our own expectations. It's a very busy time in the business with lots of positive things happening, and we expect to see this continuing in the second half. So let's cover today's agenda more fully if we can turn to Slide 2.

So just to mix it up a bit, we've changed the format slightly from previous results so that I can give some thoughts on the first half performance and cover our operational and strategic shaping. This includes talking about the evolution of the U.K. and Ireland operating model we'll be putting in place going forward and the benefits that will bring.

I will then hand over to Rachel Coulson, our new CFO, who recently joined us from Pearson in August to talk about the financial review and the full year look through. Rachel has hit the ground running and has brought genuine curiosity, energy and pace to the table. She is particularly good at holding people to account and for getting things done. Rachel will hopefully give some insights and first impressions on the business as well as covering in more detail, the financial performance. And then to finish, I will give a brief roundup, and then we move to questions and answers.

So turning to Slide 4 in the deck now. So great performance. So what are the key takeaways for these results? Firstly, the first half has delivered a great result, both operationally and financially. Revenues were up 4.5%, and the total fleet has grown to over 135,000 vehicles, which is a new high. Spain particularly had a standout performance, growing its rental revenues in double digits and reaching a record level of fleet volume and vehicles on rent. And given the strong economy in Spain, we have been focusing much of our growth CapEx in this territory, which in return is delivering sustainable margins and quality earnings. And this comes alongside robust performance in the rest of the group with customer and partner demand healthy across the business, notwithstanding the challenges in the U.K. economy.

With the current visibility we have on trading, we are confident to signal our full year expectations being at least at the top end of the current consensus range. And that means at or above GBP 155 million in adjusted PBT for the full year. We are also embarking on the next phase of evolving our U.K. and Ireland operating model, which enables us to deliver our product and services in a simpler and more consolidated way, supporting customers with their growth needs from a single point of contact.

We have already seen the benefits of growing our platform of services. And now operationally, we will make it simpler to deliver these. The focus of this change in the U.K. and Ireland operating model is efficiency, enhanced customer delivery and further consolidation across our supply chain, which reduces the number of suppliers we deal with. We expect that the simplification will deliver at least GBP 20 million of annualized savings once fully implemented by FY '28, and Rachel will cover the high-level cost to achieve this and the phasing of the benefits.

It's also worth noting, and we have discussed this before, that we are reaching an inflection point in our steady-state cash. So with continued EBITDA progression, normalized fleet replacement CapEx, lower disposal volumes and expected stability in both new vehicle costs and residual values, we will see steady-state cash flow building out as planned.

So if we turn to Slide 5, I can showcase some of the operational progress in the first half. So starting with the fleet, we are at our highest ever total fleet with over 135,000 vehicles. And the change in this period has been driven by Spain growing its average VOH, or vehicles on hire by 11%. And if you look back 3 years, Spain has grown its fleet by 30% while keeping its utilization and margins consistently strong.

And the rental market in Spain is growing. More broadly across the group rental -- group rental demand has been growing in areas such as infrastructure with significant fleet orders received and yet to be fulfilled. For example, we secured a sizable order from the largest Spanish rail maintenance operator due for delivery from February '26. We also had a large order from the Irish rail equivalent, which will support our growth in Ireland. And in the U.K., a large utility company has added over 1,500 of its owned and rented vehicles onto our fleet management solution as well as placing orders for new vehicles, demonstrating the benefits of our platform.

In all, of scale, 8 different fleet operators have signed contracts on an aggregate of 1,250 new vehicles, reflecting the strength of our offering. And in the U.K., to give you a flavor of these industries, we've had an additional 300 vehicles supporting fiber rollout to a customer who we have worked with for over 18 years to over 100 vehicles each for a water utility, a housing association and a rail engineering contractor. That's just to give you a sense of where we're seeing that demand.

And what we see as being a disciplined use of capital is that in the U.K. and Ireland, rental revenue and profit grew against a modest decline in vehicles on hire, principally due to the selective focus on customer channels and margin. And to be specific, historically, Northgate found incremental income from older vehicles coming to the end of their rental life through shorter-term final rental via third-party broker channels.

Given we have now de-fleeted many of our older vehicles, there's less stock available for these channels, and we have focused available short-term fleet into higher-margin opportunities. And a good example of this is a recent contract with a fleet partner to provide Royal Mail with nearly 300 vehicles on a short-term basis over their busy period but at the right margin. In Spain, the double-digit fleet growth we are seeing comes with the need for capacity growth. And we opened up 2 new service points in the first half. There are plans for more to come matched to growth. And also, we are planning a second delivery hub in Barcelona to replicate the success we saw from the Madrid hub.

In the U.K. and Ireland, we have continued to refresh and relocate locations for both Northgate branches and FMG RS body shops, expanding capacity in each instance into better, modern, well-equipped sites that can support future growth. This is also part of our program to increase productivity from our physical estate using new equipment and increasing use of technology, which supports capacity.

So to round up on this slide, we were pleased to secure and now onboard Howden Insurance, who are a well-respected and international insurance broker. We look forward to working alongside them as they continue to grow their presence. And examples of other extensions to mention include Tesco Insurance, where we renewed our multiservice contract over a long-term period. And we have secured a recovery service contract with an insurer who has significant presence in the U.K., but this is against the backdrop of only having a limited historical relationship. So we hope to see this develop over time. So across our mobility solutions, there's a lot of activity and a great deal to be confident about.

If we look at Slide 6, I want to touch briefly on some of the more strategic initiatives we have been progressing. So we're doing a stack of work to support our strategic plans. And here are some examples of some projects we are currently working on, just to add a bit of color. So in Spain, I briefly mentioned Barcelona is due to get its own delivery hub in the next 12 months as we look to repeat the success and learnings from the Madrid launch this spring. Having this capability has greatly sped up the delivery and distribution of new vehicles to customers, which in turn supports a faster rental growth.

In the U.K., both Blakedale and FridgeXpress have expanded from a single site locations to providing national coverage by leveraging the Northgate branch network. This has enabled a more compelling proposition to national customers who have local requirements. Blakedale, which you know is our highways traffic specialists, has also brought on its 1,000th vehicle onto the fleet, more than doubling in size, which has been a success story from the moment we acquired the business.

And FridgeXpress, our temperature-controlled vehicle specialist, is a similar sized business and on the same path. And having this specialist capability has allowed us to expand our range of vehicles to include arborist vehicles and cherry pickers to help satisfy a broader need from customers looking for us to be the one-touch solution for their fleet.

In the U.K. and within our body shops, we have been growing flexible capacity by expanding our network of mobile repair technicians and also aligning them directly with a local body shop, which flexes capacity. This provides another layer of customer options, which adds to the speed and efficiency of getting vehicles repaired smarter and is a real winner with our partners who like the benefits this brings. We're also developing a number of specialist centers, which can undertake full structural aluminum work, which will be a growing requirement of a modernizing car park. And this investment allows us to internalize this work, which was previously outsourced.

And just to complete this slide, touching on our technology progress, which to date has been supported by an expanded capacity recovery operations center in Huddersfield and the commencement of our new contact center system, which is being rolled out across the centers in the U.K. In Spain, the new e-auction site for selling used vehicles has maximized the sales values being achieved through increased functionality and analytics. In all, we are making good progress in this area.

If we turn to Slide 7. Here, we are looking at the reasons for making the changes to the U.K. and Ireland operator model, which is shaped to see -- to how we see our markets evolving. So firstly, to step through the journey. In early 2024, we brought the UK&I businesses under a single management structure, which aligned our approach and vision to delivering our platform services from a single source.

Secondly, we have continuously worked on creating the cross-sell of services to all our customers and partners, which was made easier under the single management team. We have seen good evidence of this working, and there is much more to go for. And thirdly, we are delivering on a full refresh of the technology infrastructure that now enables all our businesses to communicate and connect with each other, which has facilitated a joined-up approach. So these 3 things taken collectively provides a simpler trading environment, slicker customer engagement and pooling of skilled resources, which leads to efficiency gains and the ability to consolidate supply chains further.

The primary focus of the changes is simplification and efficiency. The financial benefits of these changes are [ estimated ] to be around GBP 20 million. And as I said, Rachel will cover the high-level financial phasing on this.

So turning to the last slide in this section and continuing with the changes to the UK&I model. So this is Slide 8. This is what it looks like in terms of operating in the UK&I. So in essence, it's bringing together our core rental offerings into one entity, which will be our Northgate Mobility brand. And similarly, for our repair, direct claims and recovery businesses, these will consolidate into FMG.

So 2 very distinct operating businesses in the UK&I and the Northgate Mobility and FMG, and Spain stays exactly as it is. So as we roll out the changes, Northgate Mobility, just to be clear, will be the brand for our rental activities. So this means LCVs, the vans, yes, our specialist vehicles and the replacement cars we provide as part of the not at fault insurance-related services. These will all be provided through Northgate Mobility.

The businesses under the FMG brand are the services contracted directly with insurance companies and the wider automotive market in terms of managing their at fault or direct claims and incident management services, including the roadside recovery businesses and our RS body shops, which provide the repair facilities. We will simplify the number of sub-brands we operate under, which is a natural evolution of our One Road program of providing a single point of contact for our customers. These changes deliver a clear path to simplifying and maximizing our resources and assets for best returns. And I'm pleased to see that the strategic pillars of enable, deliver and grow are providing the right framework to evolve our plans to achieve the full potential of the business.

So thank you for listening and hopefully absorbing most of that, and I'll hand you over to Rachel.

Thanks, Martin. Good morning, everyone. I'm really pleased to be here presenting my first set of Zigup results alongside Martin, especially as there are many positive updates to share with you today. Before we get into the financials, I thought I'd offer some initial impressions now that I've been in role since August. Since joining Zigup, I've had the opportunity to visit many parts of the business and speak with customer-facing colleagues. I've been impressed by the depth of expertise, commitment and commerciality across the business.

I can also see how the unique combination of assets across Zigup are focused on delivering outstanding customer service. And it's clear there's an opportunity for technology to be an increasingly valuable tool as we evolve to address customer needs in an efficient and responsive way. From my previous experiences, I know transformation comes in many forms, but pace and energy are critical for success, and I think we're showing evidence of that at Zigup today.

I've kept many of the familiar slides in case for these interim results, but I would expect as we evolve the business, there will be changes over time. Overall, I view these as being a strong set of results, which will set us up well for the full year. Underlying revenue increased 4.5%. Underlying EBIT, excluding disposal profits, grew by 11.5% to just over GBP 81 million, supported by growth in each of our major business units. Disposal profits normalized as expected.

We continue to invest to drive sustainable growth in the business by expanding and refreshing the fleet. This is demonstrated in the growth of fleet assets on the balance sheet to GBP 1.68 billion. This was delivered whilst keeping leverage within the range previously outlined of 1x to 2x. Underlying EBITDA, a key component of steady-state cash and something we'll come back to you later, grew by 7.6% to GBP 246 million. And today, we're proposing an interim dividend of 8.8p, following our policy of paying 50% of the prior year final dividend.

Let's move to the key elements of sales performance. UK&I rental revenue increased in the half year by 6.5%, driven by carefully managed pricing actions, vehicle mix and a near 20% growth in value-added services such as telematics and fleet management. This was a strong result given average vehicle on hire in the half year was slightly down through our changing approach to the broker channel, targeting higher-margin opportunities. There continues to be underlying incremental demand for the fleet with significant new orders, as Martin said, across our larger fleet customers.

The Spanish team delivered an excellent revenue performance of over 16% growth. This was partly due to the positive ongoing market conditions in Spain, both at a macroeconomic level and in the continuing shift from ownership to rental, but was also due to healthy demand for our unique market offering. Claims and Services revenue was broadly flat year-on-year due to lower claims volumes. We continue to grow and renew our long-term contracts and expect these to contribute in the busier second half of the year.

So how has that translated into profit? Rental profit has grown GBP 9 million, driven by trading performance and margin improvement. The latter focused on continued cost control whilst covering investment in the fleet and our network to service our customer needs. Spain is in line with our 17.5% to 19.5% view on margins and typically has a slightly stronger first half. Phasing into the first half associated with one customer contract benefited UK&I margin by approximately 1%, but I would expect this will normalize for the full year, in line with our 15% to 16% medium-term guidance.

Overall, disposal profits, which, as you know, are difficult to forecast, reduced year-on-year as expected. Claims and Services saw a modest profit improvement of around GBP 1 million due to continued efficiencies across the cost base. These were partially offset by the impact of New Law as it manages through its claims runoff program. Given trading expectations and the actions underway on New Law, I expect H2 margins will be much closer to our medium-term guidance of 5%. Our net finance charges increased due to higher debt funding levels than in the prior period.

Coming in as CFO, I've been impressed by the financial discipline across the business and clear decision-making processes underpinned by the long-standing capital allocation policy.

Next, you'll see our familiar cash flow slide reordered into our priorities. EBITDA is growing and net replacement CapEx was broadly as we expected. The outcome of these together was a more than doubling of our steady-state cash flow to over GBP 48 million. Growth CapEx in the period increased and was focused on capitalizing on the strong Spanish market environment, including supporting some large minimum term contract wins. And as you can see, fleet age is now at a comfortable level in both geographies, offering greater flexibility and a less pressing need to exit aging vehicles than over the past 18 months.

As an example, in the U.K., average disposal age in the period was 53 months, down from 56 months a year ago. Our usual table shows a robust balance sheet with substantial fleet assets, which grew by GBP 170 million since year-end. We have significant headroom at GBP 340 million. And given the high proportion of fixed rate debt, our borrowing costs are also stable at 3.2%. And with the refinancing completed last year, we are very well set up with an average maturity profile in the 2030s and no principal facilities due over the next 18 months.

Alongside this table is the CapEx chart used at the full year, but looking at the past 4 years in 6-month periods. It helps to visually demonstrate one of the key takeaways from today being our view that we believe we are reaching the inflection point in steady-state cash that both Philip and Richard have talked about before.

Now as promised, building on the exciting news on the UK&I operating model that we announced this morning but have been working on over the past few months. Martin outlined the evolution and its rationale purpose and core structural elements. I'm therefore going to confine myself to talking about the overall program in terms of timetable and our initial view of the financial impact. This program is now moving at pace with clear execution plans and a timetable expected to be largely complete within the next 18 months. In the statement this morning, we indicated that our current view is that these changes would deliver around GBP 20 million of incremental savings in financial year 2028.

We're at the early stages of execution, but to give you some sense of scale, I'd expect the supply chain actions to be the largest portion of the expected savings. And to note, both myself and our Head of Procurement have experience in this area and at this sort of scale, including building more strategic supplier relationships. I'm sure there's interest in the onetime costs associated with this program, and I wouldn't expect them to be much more than GBP 5 million in total and to not have an impact on the profit guidance for this financial year shared today.

And as a rough guide for financial year 2027, I could see us achieving around half the savings run rate in the year and a little more than half of the program costs as some of these will be more front-end loaded. I'll set out more clearly at our full year results, how the savings should be phased and reflected alongside our go-forward guidance.

Finally, this exercise will no doubt have some impact on the corporate reporting of the businesses, but that's not something that we'll implement this year. And I promise Ross and I will give you clarity in the coming months about what might change and at the appropriate point, some historic analysis.

And to finish off, I'd like to cover current year expectations. Based on the factors we laid out earlier on first half performance and what we see in the second half, we are confident that full year underlying profit before tax will be at least at the top end of the current range of expectations of GBP 150 million to GBP 155 million. And whilst we're still working through the U.K. budget news, there should be no impact on this year's financials or medium-term guidance, including the incremental savings shared today.

And with that, I'll hand back to Martin.

Thank you, Rachel, and thanks for sharing your insights as well in terms of what you've seen in the business. We clearly have a great opportunity ahead of us. I think that was very clear, by the way, that presentation, so I appreciate that. And to finish then on the last slide and before we move to questions and answers. As I said earlier, it has been a great start to the year with some notable highlights. Demand from customers and partners in our markets is healthy, and there are good reasons to be confident in the continued success of our strategy and to delivering our full year results, as Rachel said, and I said earlier, at the top end of the current consensus.

We're also doing -- the work that we're doing in the UK&I will deliver significant benefits, not only to our bottom line, but it will also offer greater agility in how we approach both suppliers and customers and create further velocity in our business. And as I said, Spain is continuing to grow its market position very well with excellent execution of its plans.

And finally, Rachel has outlined how we see our steady-state cash flow building from here. And I know many of our investors and potential investors will welcome that confidence. For me, the growth in steady-state cash generation will bring into play a range of options as we think about capital allocation and how we can make good use of that capital to grow.

It is an exciting time to be part of Zigup, and we are working at pace to create some velocity in the business and to deliver meaningful and sustainable outcomes for our stakeholders.

My thanks to all our colleagues who make this possible. Thank you.

So on that note, if we can move to Q&A, that would be great.

The microphone is going to David. If you could just say your name before for the online.

It's David Brockton from Deutsche Numis. Can i ask 2, please. The first one in respect of the UK&I fleet growth from here and the second one in respect of, I guess, replacement CapEx and the average age of the fleet. You sort of gave clearly the reasons for why VOH was down through the first half and that focus on higher-margin customers. Going forward, can you maybe just touch on the supply dynamic in the U.K. now and your expectations around fleet growth from here? That's the first question.

And then the second question, the average age of the fleet has continued to trend down through the first half. I know you're not managing the business to an average age, but should we now view that as a sort of a sort of stable level going forward and therefore, that replacement CapEx having stabilized?

Thanks, David. So look, on the first question on the UK&I sort of fleet growth, I mean, you're right to say we have focused very much on the quality of earnings. That's been the key. In these results, you've seen revenue growth, profit growth, 14% of the EBIT without disposals, but the fleet modestly come off. And that's a deliberate sort of position for us. I talked about in my presentation, I talked about the channels that we previously supported where we are less supportive sort of going forward.

We will -- our aim is to grow, but grow profitably. That's the key thing I want to emphasize. It's not about pure volume. I think I've said before in our conversations in the past and presentations, Northgate as a rental company for fleet can put a lot of volume on, but it's got to be at the right margin for the right returns with quality, sustainable outcomes. So that's how we're strategically focused in the U.K. to do that. We're seeing that in Spain.

You could see that sort of demonstrable growth with the margins have been improving. If you look back over the years, you can see the strength of that coming through. And that's the plan for the UK&I as well. So as I say, we'll allocate the capital where we see good sustainable returns.

On the second part of the question in terms of the age. So yes, the age is coming down nicely. We don't target age in the way that we run the business. We don't say there's a landing point and therefore, build the model to that age. It is where we are operating now with the fleet is in a good place. Customers don't want to change vehicles every 2 years because every time you change a vehicle, it comes with a new price point, of course, for the customer as well.

So we're comfortable operating with the fleet where it's at. I mean it will change a little bit. So the age might get a little bit lower, but we're not targeting it. The key thing is that we've got a fleet now which is in a good steady-state position. And we'll know by the end of this financial year, whether that's now fully inflected and represents sort of where we are.

It's James Rose from Barclays. 2, please. First is to Rachel. When you sort of came in and scrutinize the business, did you see any areas for reinvestment opportunities which you want to prioritize? And in that case, is that GBP 20 million, is that already a net figure? Or is it purely a sort of efficiency cost out figure?

And then secondly, could we touch on ancillary services? I mean you've mentioned a few times in the statement, telematics and fleet management uptake going pretty well. Do you have a percentage of customers which take you up on this? And is that a meaningful sort of upside opportunity to -- for us to think about?

Okay. Do you want to take the first question?

Yes, I will. Thanks, James. So I think we're demonstrating today that we are investing in the business. We've talked about the investments that we're making in growth CapEx, particularly in Spain, given the opportunity that is there. And also Martin mentioned some of the investments that we're making in technology in terms of how we think about rolling efficiency and the opportunities around that area. So I think we are making those investments and the savings that we've talked about today are on top of those investments. So you should think about it in that way.

And yes, so look, the ancillary products are growing at double digit. For us, you've got to view ancillary as being sort of the package of services because when you're tying in the ancillary products with your rental and everything else, that's the platform of services. That's a stickier proposition with the customer. So we are building. So it's double-digit growth, let's say, in the ancillary sort of side of things, but we're building a position where we become that one-stop solution for our customers. So that's why the ancillary products are important about supporting something that's just more than renting a piece of metal.

Andy Smith, [indiscernible]. Two questions. One is on claims and services in that the revenues have gone down and the margin has gone down. Now I would have thought given you had to say, the cyber claim last year at GBP 4.2 million, you would have had a bit more of a kicker this year. So is it possible to explain a bit more dynamics to claims and services, that's what's going on in the revenue and the EBIT. And I do note that the full year guidance is a 5% margin. And then secondly, on growth CapEx, I see at the first half, you spent, say, GBP 74 million on growth CapEx. And I know you don't give guidance on it, but is it possible just to give a little more color on the direction of growth CapEx?

Okay, Andy. Let me just check, make sure we got the right numbers because the Claims and Services margin, EBIT margin has gone up.

It's gone up.

Yes. So it hasn't gone down. It's gone up from 4% to 4.2%. And as we've said and Rachel covered, the direction of travel is we're heading towards the sort of 5%. So as we -- that is our direction of travel. So we expect it to improve.

And in terms of the revenues as well...

Yes. So we've seen flattish revenues, I would say, in Claims and Services. And that's just -- we've had a quite -- we have had a quieter summer in terms of incoming. So it's only what's incoming into the business. So we would expect, as we've seen over the last couple of weeks, unless you've been somewhere very sunny, it has been raining a lot. And so as you go into the winter, these are seasonal. So Claims and Services is about an income -- incoming volume of work.

What I would say in that Claims and Services section is that we've got new partners coming on board as well. We've renewed some of our sort of long-term big contracts, some of them. And as I said, it's only seasonality in terms of what's in the first half. So the summer was fairly quiet. So we're confident about that building, and we can see what's coming through and how that's going to play out for the full year.

And on the second question, Rachel, do you want to answer on the CapEx and the color of the CapEx and what you expect to see?

Yes. So Andy, as you said, I'm not going to give sort of specific guidance, but we will continue to look for opportunities, particularly in supporting the Spanish market and Spanish growth around deploying CapEx to drive growth for the business. I would expect at year-end in terms of if we think about from an overall sort of debt profile that we'd still be around the top end of our range, and we'll ensure that that's the case. But we want to continue to invest in the business where we have the opportunity in Spain.

Yes. Just to add to what Rachel is saying, we're going to work within our leverage range of 1x to 2x. That is very clear. So we're not changing that policy. As Rachel has said, the build of the steady-state cash flow that will release cash in terms of what we can do with that. And therefore, that can support growth both in Spain and the UK&I, if it's the right investment to make. So that's sort of how the model sort of plays out and how we continue to grow from here.

David Farrell from Jefferies. Two questions. Can we just dig into Spain a bit more? I think in the release, you talked about it being 5% penetration of rental. Kind of where do you think that number could go? Because it seems like it's growing well beyond kind of what your expectations were. And is there, I guess, any threat that new competitors might come in given the growth being achieved? And then just going back to steady-state cash generation. If I remember correctly, we talked about GBP 200 million in 2027. Is that still the ambition? Or I've got that number wrong.

Yes. I'll deal with point one and then Rachel can pick up on the trajectory for the steady state cash. So look, on Spain, you're right, absolutely, there's strong growth there, market penetration. If you remember at the last results, our Spanish CEO came over and presented and talked about the Spanish market in terms of rental. The rental market is growing, and we're growing in that space as well. So we expect to see that to continue to grow. Where could it go? Well, how much capital do we want to put in there to support it.

So we can see double-digit growth as we've seen this year, and we will continue to support Spain with that growth. There's always competitors. I think what Spain has is a very good model for deploying services. So the service points that we've talked about, the Madrid distribution center and the new Barcelona one that we're going to open, it's about having presence on the ground in Spain because customers need that local service to support their fleets.

We've got that local service with our workshops, our body shops repairs, all the maintenance, and that is very, very important in that model. So it's quite difficult to replicate because it's quite a lot of infrastructure, quite a lot of sort of technology that we use as well to maximize the benefits to customers. So we see short to medium term, we see strong continued growth in Spain.

And the second question, Rachel?

David. So for the GBP 200 million, we shared that it was financial year 2028. As we've talked about earlier, we see that that's evolving as we had expected. We're reaching that inflection point. All of the drivers behind that around EBITDA and the net replacement cycle are playing out as we would expect. And so we're confident in that.

Okay. Do we have any -- no questions from the room. Anything?

[indiscernible] question.

Do you want to take the microphone and just introduce.

Dan Thornton at Shore Capital. Just a quick one. So on the steady state cash flow generation, nearly GBP 50 million for the first half. What factors should we think about for the second half cash generation? So in other words, crudely doubling it probably isn't the right answer. So just a bit of color on the moving parts.

Okay. Dan. Did you pick that question, Rachel?

Yes. So again, I'm not going to give specific guidance around what people should be thinking about in terms of that. But we would -- we expect EBITDA to continue to grow and we'll manage the net replacement cycle as expected. But we -- as Martin said, we'll reiterate the full year where we've got to around the inflection point.

Okay. I think we're done with questions. There's nothing more. So it just leaves me to -- well, thank you, Rachel, as well. This is your inaugural set of results. I appreciate that. Thanks to my team for all the work and everybody else that supported this. And thanks to you for coming today and everybody online for listening. We look forward to updating you at the full year. Thank you.