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Edited Transcript of ATL.AX earnings conference call or presentation 23-Feb-21 4:00am GMT

·28 min read

Half Year 2021 Apollo Tourism & Leisure Ltd Earnings Call Feb 23, 2021 (Thomson StreetEvents) -- Edited Transcript of Apollo Tourism & Leisure Ltd earnings conference call or presentation Tuesday, February 23, 2021 at 4:00:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Kelly Shier Apollo Tourism & Leisure Ltd - Group CFO * Luke Trouchet Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director ================================================================================ Conference Call Participants ================================================================================ * John O'Shea Ord Minnett Limited, Research Division - Senior Research Analyst * Josephine Little Morgans Financial Limited, Research Division - Senior Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by, and welcome to Half Year Results 2021 Conference Call. (Operator Instructions) Please note that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ms. Luke Trouchet. Thank you. Please go ahead. -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [2] -------------------------------------------------------------------------------- Thanks very much, and good afternoon, everyone. My name is Luke Trouchet, and I'm the CEO and Managing Director of Apollo. I would like to thank you all for joining us today as we review Apollo's first half results for FY '21. I will begin the presentation by providing a high-level summary of the results and then hand over the floor to our CFO, Kelly Shier, who will run through our financial performance in more detail. I will then return to give an overview of our progress in each segment and also outline the outlook we have for the second half of FY '21. We will then end the call with a Q&A session. But before I get into the presentation, I wanted to thank our people, suppliers, financiers, partners and investors for their continued support of Apollo. COVID-19 has been very challenging for our tourism business, but we have demonstrated our resilience in the face of this diversity. We have sufficient liquidity to see us through a prolonged period of uncertainty, but I now sit here with renewed optimism that the global rollout of vaccines is underway. The relaxation of travel restrictions is around the corner, and Apollo is well placed to benefit as tourism returns. Okay. On to the presentation. Let's begin on Slide 6. As you all know, COVID-19 has continued to devastate global tourism throughout the period, and this is reflected in our results. We recorded a net loss after tax of $7.5 million for the period compared to a profit of $11.3 million for the prior corresponding period. We've pivoted our business to a domestic-only focus and pleasingly noted a marked increase in domestic revenues over pcp in all of our regions. In fact, we believe that in the absence of border restrictions and local lockdowns, domestic revenue could largely be replaced by international revenue. However, there have been lockdowns in all of our regions across the globe. So whilst domestic revenue increases, to date, are positive, they have been unable to cover the loss of our international guest revenue. The downturn in activity has allowed us to continue to concentrate on a number of projects that will improve our business and position us to capitalize on the expected rebound in tourism when and where borders reopen. We have introduced a contactless rental transactions and continue to enhance our digital guest service offerings, placing guest safety and satisfaction at the forefront of everything we do. We will continue to focus our efforts on targeted domestic marketing campaigns, and we expect domestic travels to continue leading the tourism industry's recovery. Fleet sales have been accelerated in all regions to assist with liquidity management and to satisfy record levels of global demand for RVs. We expect these levels of demand to be sustained in the short to medium term. Liquidity management remains critical throughout these challenging times, and we will be taking conservative approach to replenishing fleet numbers relative to rising demand. Group debt has reduced by $40.6 million from 30th of June, materially reducing our repayment commitments. Given the ongoing impact of COVID-19 and the uncertainty that remains in all markets, no interim dividend has been declared, and we will not be able to provide earnings guidance for FY '21. Moving to Slide 7. Cash at the end of the half was $37.8 million, plus we had $23.6 million of undrawn COVID-19 government support loans. We set out the various governance support loans we have obtained globally, providing a significant boost for the company to ensure we can keep people in jobs and create a platform for future growth once the uncertainty and impact of COVID-19 subsides. We acknowledge and thank the government for their assistance during this challenging time for our business. In October 2020, the group recommenced principal repayments on its fleet finance facilities. A number of rent relief periods ended and a large portion of the Australian JobKeeper subsidy was lost. Since this time, cash burn has averaged $3.8 million per month. Future cash burn is dependent on rental revenue, fleet disposals and acquisitions as well as working capital to meet the strong retail demand. Jumping to Slide 8. On Slide 8, we set out a high-level overview of the COVID-19 time line and the key events that have impacted our rental business and its recovery trajectory towards the pre-COVID-19 revenue levels. As can be seen, we experienced a gradual increase in activity in the middle of 2020 as restrictions began to ease. But in the lead up to winter in the Northern Hemisphere, cases began to grow, and strict lockdowns were once again enforced in the U.K. and Canada. With U.K. and South African strains of the virus in beginning to appear in Australia and New Zealand, snap 3- to 5-day lockdowns began to take place in a number of our locations during the Southern Hemisphere's peak summer holiday period. These restrictions and the uncertainty that they create have seen our recovery paths trend downwards in recent months. Pleasingly, however, the hard lockdowns appear to be working with a noticeable decrease in daily cases in recent weeks. With the vaccine now being rolled out in all of our operating markets, we are confident that an upturn in the recovery is imminent and sustainable. With that, I'll now hand over the call to Kelly to review our financial results in more detail. I will then return to discuss our segment results and strategic initiatives. -------------------------------------------------------------------------------- Kelly Shier, Apollo Tourism & Leisure Ltd - Group CFO [3] -------------------------------------------------------------------------------- Thank you, Luke, and good afternoon, everyone. My name is Kelly Shier, and I'm Apollo's global CFO. I would like to give you an update on the financial performance of ATL for the first half of FY '21. So referring to Slide 10, you can clearly see the impact that COVID-19 continues to have on the business. Total revenue has declined significantly over pcp, primarily due to 58% reduction in rental revenue flowing from the ongoing border closures. A domestic-only focus has been positive. However, with international guest accounting for approximately 80% of our historical rental revenues, the uplift in domestic bookings has been unable to bridge the gap completely. The reduction in rental revenue was partially offset by strong growth in vehicle sales globally with record demand for RVs in all regions. The growth in Australia of new RV sales revenue was constrained by stock supply shortages with a large number of RV manufacturers being based in Victoria, which was subject to strict lockdown requirements during the half year. Despite this, the strong RV sales revenues resulted in a number of our Australian entities, including the rental business, failing to qualify for the Australian government's JobKeeper subsidy from October 2020 onwards. This will equate to approximately $1.5 million in lost government support for FY '21. Luke will give a detailed rundown of the performance of each region later on in the presentation. Slide 11 sets out our historical and forecast rental fleet sales proceeds and CapEx numbers. The spike in fleet sales proceeds in the second half of FY '20 is attributable to the sale of the entire USA fleet and ex-fleet sales in other regions in response to COVID-19. We continue to accelerate ex-fleet sales during the period as part of our liquidity management initiatives, but we expect sales levels to return to levels that are in line with historical average in the second half of FY '21 and beyond. Fleet CapEx has been limited since the onset of COVID '19 relative to decline in rental activity. Forecast spend for H2 FY '21 relates to the acquisition of 350 new vehicles in Canada, that will be required to meet projected domestic demand over the 2021 summer season. This represents a net decrease in the Canadian fleet numbers as compared to the 2020 summer season. We have maintained a core number of vehicles in all our regions sufficient to satisfy forecasted domestic rental demand in the short term. On Slide 12, we have provided a detailed outline of the key types of funding lines that we utilize in the business. These include fleet financing for our rental fleet vehicles, floor plan finance for our retail sales inventory and mortgages over a number of our properties owned in Canada, on which our rental branches are located. We have also obtained COVID-19 support funding in Australia, Canada and the U.K. Additional support of $10 million from the Queensland government and $12.5 million from the Business Development Bank of Canada and Export Development Canada was also approved during the period, none of which has been drawn down. You will note that our balance sheet shows a net current liability position of $54.8 million. This arises due to the requirement of Australian Accounting Standards caused by all floor fund debts and the portion of fleet financing due within 12 months as current liability, whereas the majority of the underlying vehicles are treated as noncurrent assets under accounting standards. This is the inherent nature of our business, and the group has sufficient cash flows to be able to satisfy all of its short-term obligations. Apollo is subject to lending covenants in New Zealand and Canada and due to the impact of COVID-19 on group's rental activity, some of these covenants are currently forecasted to be at risk of breach during the 2021 financial year. The group has obtained waivers from the New Zealand and Canadian lender in respect to the covenants at risk. The New Zealand lender has waived their covenants up to and including 30th of June 2022, while the Canadian lenders have changed their debt service covenants and the date of measurement. One lender has a first measurement date of September 30, 2021, and the other Canadian lenders have a first measurement date of the 30th of June 2022. And because of this, I am pleased to advise that the emphasis of matters that apply to our full year results is no longer applicable. We would like to thank our lenders for their ongoing support during this difficult period. On Slide 13, we have detailed the intrinsic equity values that we currently hold in our assets. And also referring to Slide 34 in the appendices, provides an illustration of the relationship between fleet finance debt and the equity generated in the underlying vehicles. While life cycles and depreciation rates may vary amongst our different regions, the underlying principle remains the same for our global rental fleet. And the results of this relationship is such that the company currently has approximately $35 million of unrealized equity in our fleet globally. In reality, we have historically achieved sales values more than written down value, which, in turn, significantly increases the inherent intrinsic value of the fleet. And to note that the average cash burn of $3.8 million mentioned earlier by Luke includes principal payments on fleet debt. We also have intrinsic equity of $19 million in the mortgage Canadian properties, based on a recent sale offer that we received that was not preceded with. And moving on to Slide 14. It sets out the summary of the group's cash flow movements in comparison with the prior period. When we exclude the receipt of approximately $17 million of COVID support funding across Australia and Canada during the period, net cash flows for the period resulted in a net outflow of approximately $2 million. The significant reduction in rental earnings were attributed to the net outflow, but this was largely offset by the acceleration of ex-fleet sales, strong retail vehicle sales and reduction in our permanent cost base. Liquidity management continues to be an important focus as we work to recover from the impact of COVID-19. And I will now pass the call back to Luke to continue his comments. -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [4] -------------------------------------------------------------------------------- Thank you, Kelly. So we'll jump ahead to Slide 16, where you can see a snapshot of our global footprint and the changes in our fleet size as we are today. So in the second half of FY '20, we made the difficult but sensible decision to sell off our entire USA fleet and hibernate our USA rental operations in response to COVID-19. We also closed our Paris branch and transferred its fleet to our Hamburg location. Since then, our global rental fleet has continued to reduce as we've accelerated fleet sales to preserve liquidity and to meet the current demand profile. Going forward, we will take a conservative approach to increasing our fleet sizes commensurate with demand. Moving to Slide 17. Here, we set out the revenue and EBIT position of each of our segments, and I will now give you a detailed rundown of how each region has performed. So jumping to the Australian segment on Slide 18. Australian rental performance continues to be affected by international travel restrictions and snap domestic lockdowns, particularly those over recent summer -- the recent summer holiday period in Brisbane, Perth, Melbourne and Sydney. Our domestic-only focus and the Easy As Apollo marketing campaign that was running in Australia and New Zealand has helped to generate a 28% increase in domestic revenues over pcp, which demonstrates the desire for locals to explore their own backyard. We will continue to drive our domestic marketing campaigns, whilst the international borders remain closed, and we remain confident that we will be able to continue capturing increased domestic market share. Demand for new retail RVs has been at record highs in recent months, a trend we continue to see -- expect to see for short to medium term. Despite this increased demand, revenue generation was constrained by stock supply limitations drawing from the strict lockdowns imposed in Victoria, where a large portion of RV manufacturers are located as well as a temporary shutdown and scale back of production at our own manufacturing facility in response to COVID-19. Forward retail orders not delivered as at January 31 totaled $49.4 million, an increase of 192% on pcp. So we've got a very strong pipeline in the books. The strong RV sales resulted in a number of our Australian entities, including the rental business failing to qualify for the Australian government's JobKeeper subsidy from October 2020 onwards. This will equate to approximately $1.5 million in lost government support for FY '21. Moving to Slide 19, New Zealand segment. So despite a 356% increase in domestic rental revenue achieved over the pcp, the small New Zealand population is unable to sustain ongoing increased activity levels. Lockdowns in Auckland have also dampened traveler confidence. The establishment of a trans-Tasman travel bubble will be critical to the success of the region, while broader international restrictions remain in place. RV sales demand was high for the region with a flagship retail store at the Yorkland rental branch contributing to the strong revenue growth over pcp. The impact of COVID-19 on rental demand resulted in the closure of the New Zealand manufacturing facility permanently in July 2020. The Australian manufacturing facility will supply all future fleet requirements for the region. So moving to Slide 20. Canadian domestic rental revenues experienced strong growth in response to international border closures with a 161% increase over pcp. However, similar to Australia and New Zealand, this increase was not sufficient to fully mitigate the loss of international guests and the reintroduction of strict lockdowns in recent months will continue to hinder performance. Canadian ex-fleet sales have been accelerated during the period, in line with the reduced rental activity and to take advantage of strong pricing with 535 units sold. The 2021 season planned fleet size, which reflects acquisitions to refresh the fleet and continued sales is considered sufficient to meet expected rental demand. The company is confident that the current rollout of the vaccine in Canada and concerted domestic marketing campaigns will drive performance over the 2021 summer season and strengthen the region's recovery profile. We are also exploring our options for a future reentry into the USA once international travel resumes. Moving on to the European segment on Slide 21. This region's guest profile is primarily in-market rather than long-haul international guests traveling to the destination. During the peak 2020 summer period, the region was largely opened for local business with only limited travel restrictions and lockdowns. As a result, while rental revenues were down $1 million on the pcp, overall earnings for the region were impacted less than our other segments. However, the region has been under significant lockdown since October, which will impact performance into the second half of FY '21. Recent case numbers indicate that the hard lockdowns currently imposed are working, and the rollout of the vaccine in the region gives some optimism for the spring season. On Slide 22, we have some information on our investment in Camplify, the Airbnb of RVs. I'm happy to report that the company experienced strong growth in Australia, following the lifting of initial restrictions. Total transactions before expenses was $11.9 million for the period, up 111% from $5.6 million for the pcp. We are very pleased with the current performance of Camplify and the strong trajectory it is presenting. So jumping to Slide 24, looking at our strategy on outlook. You'll see some of the key digital initiatives we have in the works to improve guest and customer experience and the overall operational performance of the business. We're adapting our systems and digital offerings to operate in the new COVID-safe world, and this has been a primary focus for the business over the last 12 months. We have implemented contactless rental transactions and the digitization of quality inspections and handover processes to not only improve efficiencies but to also ensure the safety of our guests and our team remain the utmost priority. We continue to enhance our retail service offerings, providing our customers with end-to-end solutions that will keep them coming back to Apollo over the years to come. With the shift to focus -- with the shift in focus to domestic markets, we've continued to invest in our B2C platforms on websites to support the growing volume of direct traffic and bookings that come with domestic guests. Moving forward to Slide 27. Looking at the outlook for tourism in the industry, we are confident that the worst of COVID is behind us. RV holidays represent the perfect COVID-safe holiday option, and we are beginning to see an upward trend in our forward domestic bookings. The likely establishment of a trans-Tasman travel bubble in advance of broader border reopenings will help the market traction, particularly in New Zealand. And with the noticeable decrease in active cases in the Northern Hemisphere, in response to the hard lockdowns and the rollout of the vaccine, we are confident consumer sentiment and activity will begin to build in the lead up to the 2021 summer season. We expect retail RV demand to remain at record levels for the short to medium term, and we been skewing all avenues to ensure we capitalize on this buoyancy. Over to Slides 26 and 27, you get an overview of our recent domestic marketing campaigns that we're doing in Australia, New Zealand and Canada. The Easy As Apollo campaign was launched in November 2020 in Australia and New Zealand, and it's designed to raise the awareness of the ease, fun and freedom that comes with an RV adventure. Today, it has generated positive market sentiment that has helped drive the increase in domestic bookings over the period. CanaDream's Find Your campaign will launch in March 2021 in readiness for the summer season, and we'll look deploying key themes that resonate with Canadians who endured a difficult winter lockdown, such as fun, adventure, space and well. So moving forward to our outlook. Obviously, this has been a very challenging period in Apollo's 36-year history, but we are confident that there is light at the end of the tunnel. We will continue to focus on increasing domestic market share and capitalize on record levels of RV demand. With significant government support being secured, increasing forward rental bookings, approximately $54 million of intrinsic equity in our rental fleet and properties and a lower permanent cost base, we are confident that the company has sufficient liquidity and capacity to trade through the prolonged impact of COVID-19. Due to the ongoing uncertainty of the current trading environment, Apollo is not in a position to provide earnings guidance for FY '21, noting that historically, Apollo has had a marked earnings skew to H1 that is expected to continue. Trading and traveler confidence in H2 FY '21 continues to be impacted by COVID-19-related restrictions, including over the recent Australian and New Zealand summer. A domestic-only 2021 spring in the Northern Hemisphere and loss of the Australian JobKeeper subsidy will further impact the second half. The actual FY '21 results will obviously be dependent on the level of travel activity that becomes available during the period. Despite this, we remain very positive that with the global rollout of vaccines that are currently underway, a strong tourism recovery is in the not-too-distant future. Apollo is well positioned to return to profitability when borders reopen. So with that, I'll wrap up my comments for today. Thanks very much for your time this afternoon. I'll now turn the line back to the operator for any questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question is coming from the line of John O'Shea from Ord Minnett. -------------------------------------------------------------------------------- John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [2] -------------------------------------------------------------------------------- Can you hear me? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [3] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [4] -------------------------------------------------------------------------------- Just a quick question on the intrinsic value you mentioned. Can you just talk me through what that relates to? So you're talking about in addition to the current net asset value of the company or net tangible assets? Are you talking about in addition to or as part of? So in other words... -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [5] -------------------------------------------------------------------------------- That's as part of. So what we're trying to point out here is that we have real assets in our business. And with our aggressive debt amortization that we have with our lenders, we're always building up cash equity in the fleet. And when you compare that against the written down value, the difference between the two is what we're calling the intrinsic value. So we've been able to demonstrate during this COVID period that when we need to accelerate our fleet sales to realize cash that we've been readily able to achieve the delta between the two, if not higher than that amount. -------------------------------------------------------------------------------- John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [6] -------------------------------------------------------------------------------- Yes. So you're saying that obviously, the Canadian properties, kind of add, I would just say, $19 million? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [7] -------------------------------------------------------------------------------- That's right. -------------------------------------------------------------------------------- John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [8] -------------------------------------------------------------------------------- And the vehicles are worth -- if you were to sell the vehicles, your argument theoretically is that in addition to that, you would realize another $35 million on those -- on that fleet? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [9] -------------------------------------------------------------------------------- At least. Yes. -------------------------------------------------------------------------------- John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [10] -------------------------------------------------------------------------------- Yes. Okay. Then the current book value? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [11] -------------------------------------------------------------------------------- No, against the debt. -------------------------------------------------------------------------------- John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [12] -------------------------------------------------------------------------------- Against the debt. Okay. Okay. Now given what you said about the net impact of, obviously, your vehicle acquisitions in Canada compared to your forecast proceeds from sale and what you said about the current run rate, should we assume then that -- would it be reasonable to assume then that if we talk about $3.8 million run rate, perhaps maybe, obviously, you've made assumptions about where that goes in the second half. But certainly, the net debt -- let's assume that the CapEx and the proceeds from the sale of the fleet cancel out. Therefore, your net debt position at the end of June should be higher than where it is right now. Is that a fair expectation given you've got at the moment, a $4 million circa, call it, month-to-month, negative run rate on the cash, so 6x4, 24, say, it might be worse than that, obviously, let's say, 24. And the other 2 cancel each other out on the CapEx side. Is that a fair expectation? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [13] -------------------------------------------------------------------------------- Yes, that's correct. Just noting that in that $3.8 million, that includes amortization. So we're paying that back to the financiers as well. So when we go to sell the asset, where we've got more of an edge gain. -------------------------------------------------------------------------------- John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [14] -------------------------------------------------------------------------------- Yes, that's right. But in terms of your net debt position, it's probably going to be circa more like, I don't know, I'm just using the borrowing numbers as opposed to the borrowing numbers in there, it's going to be closer to $250 million or higher than it is $220 million. -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [15] -------------------------------------------------------------------------------- Yes, that's correct with our CapEx. -------------------------------------------------------------------------------- Operator [16] -------------------------------------------------------------------------------- We have our next question coming from the line of Jo Little from Morgans. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [17] -------------------------------------------------------------------------------- Just on Slide 8, the COVID-19 timetable. To get back to those pre-COVID rental revenue levels, have you rebased that pre-COVID level to exclude the U.S.? Or is that still inclusive of that? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [18] -------------------------------------------------------------------------------- That line includes the USA. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [19] -------------------------------------------------------------------------------- Okay. And just, I guess, moving on from the previous question from John, would you expect to draw down those government facilities in the second half assuming? And just the reasoning around why you wouldn't draw down on them to repay some of the others? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [20] -------------------------------------------------------------------------------- So we are planning on utilizing them. Obviously, we start paying interest on them as soon as we do. And at the moment, we haven't needed to. So we do expect to. Kelly just mentioned that I've got that line wrong, it doesn't include the USA. So my apologies on that. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [21] -------------------------------------------------------------------------------- Okay. Yes. Great. And just on, you mentioned the JobKeeper would detract $1.5 million, I think, from FY '21. Just trying to correlate that. So it looks like you've got $4 million government grants globally. Was it in the first half? So is that telling us that $1.5 million of that was in the first quarter from JobKeeper? I'm just trying to understand that, please. -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [22] -------------------------------------------------------------------------------- No, not quite. So that includes the government support measures in Canada and in the U.K. What -- and we did get some JobKeeper on some divisions in the Australian entity. What that is is the ones what we've missed out on in the second quarter, the first quarter and what we'll miss out on going forward. So that's not what we achieved in Australia. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [23] -------------------------------------------------------------------------------- Okay. So you got all -- globally, you've got about $4 million grants in the first half. But what do you think -- so, I'm just trying to correlate like that to the $1.5 million, sorry. Can you just repeat what you said then? Maybe -- $1.5 million -- so you're saying $1.5 million lost over the balance -- from the second quarter to the fourth quarter from losing JobKeeper in some parts of business is it or holistic? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [24] -------------------------------------------------------------------------------- That's right. So I said, July 1, we were no longer eligible in our main rental business for JobKeeper. And then from the second quarter, we -- none our dealerships were eligible for JobKeeper as well. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [25] -------------------------------------------------------------------------------- Okay. Understood. -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [26] -------------------------------------------------------------------------------- On the ongoing basis, it's $1.5 million, but we missed out in the Australian entity to receive. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [27] -------------------------------------------------------------------------------- Okay. Got it. And just looking at the costs, the divisional costs. So they've gone up in New Zealand, North America and Europe, basically everywhere aside from Australia. Can you just talk to us about that? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [28] -------------------------------------------------------------------------------- So that's the COGS relating to the sale of the fleet. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [29] -------------------------------------------------------------------------------- Yes. Got it. And just around the stock availability you called out for the new RVs in that last half, and that $49 million. Will that all hit in the second half, do you think? And is there any improvement to the stock availability? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [30] -------------------------------------------------------------------------------- No, it won't all hit in the second half. The stock availability has been very frustrating for us. We've had this unprecedented demand that we haven't been able to fulfill. And this is across the whole RV industry in Australia. So we're working very hard to sensibly ramp up our own manufacturing facility to be able to meet that demand. And then also working with our partner suppliers down in Victoria or Adria out of Europe, where we buy stock to get more in. But the reality is that, that upside is going to kick more into FY '22. Because it's not only us being able to build the product, we need the platforms to build on. So that's the Mercedes, the IVECOs, the Renaults, the Fiats, and they're out months as well due to some COVID issues in Europe, which has slowed down production. -------------------------------------------------------------------------------- Josephine Little, Morgans Financial Limited, Research Division - Senior Analyst [31] -------------------------------------------------------------------------------- And just last one, just looking at the U.S., I imagine it's off the agenda for now. Is that a fair assumption? And when you look at reentering at some stage via a different model? -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [32] -------------------------------------------------------------------------------- Yes. So I guess all things are open to us there. In the short term, it's more likely that we'll be opening there for summer '22. And we're looking at different models as well for that market. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- (Operator Instructions) -------------------------------------------------------------------------------- Luke Trouchet, Apollo Tourism & Leisure Ltd - MD, CEO & Executive Director [34] -------------------------------------------------------------------------------- All right. Well, that looks as though that's all the questions. So I think we'll wrap up. So thanks, everyone, for joining the call today. We certainly look forward to speaking with many of you during our upcoming virtual roadshows. We thank everyone for their time, and enjoy the rest of the day. -------------------------------------------------------------------------------- Operator [35] -------------------------------------------------------------------------------- Thank you. This concludes our conference for today. Thank you for your participation. You may all disconnect your lines now.