Good morning, everyone. Welcome to Breedon's interim results presentation. James and I will take about 20 minutes to guide you through our presentation, and then open things up for questions. I'm pleased to report that we've delivered another strong first half at Breedon. Our first-class team have operated with great agility to deliver this performance, for which I thank them sincerely. What's contributed to our success? I would highlight 3 factors: First, resilient end markets that continue to be supported by long-term structural growth drivers. Second, a robust performance, where our dynamic pricing and our focus on operational excellence offset expected lower volumes. Third, we continued to strategically invest for growth, completing 3 acquisitions and continuing organic investment.
I think it's fair to say that our vertically integrated and local operating model has again come to the fore, leveraging our long-term customer relationships and deep market knowledge. In parallel to delivering our numbers, I'm pleased to report that we've made progress on our three strategic priorities, and that's what I want to show you on this next slide. I'm delighted by the progress you see here. In respect of our sustained priority, we have progressed a range of initiatives. We've made progress towards setting our science-based targets. We have committed to securing a rating from CDP, formerly the Carbon Disclosure Project, this year.
We hosted the launch of the Peak Cluster initiative, a carbon capture and storage collaboration project that is expected to remove over 3 million tons of carbon dioxide emissions each year by 2030, a move that will reduce UK emissions from cement and lime manufacture by around 40%. We have continued to push the boundaries on cement alternative fuel use, reaching a fossil fuel replacement rate of 50%. We have increased the sales of Breedon Balance products with sustainable attributes.
Last but not least, we have continued to strive to make Breedon a great place to work by focusing on colleague health, safety, and wellbeing. In respect of our optimized priority, we have continued to drive efficiency and utilization.
We've done this by introducing divisional operational excellence reviews, restructuring our business in GB and Ireland to drive improvement and standardization, and by maintaining cement plant reliability. I'm pleased to report that our market-leading cement reliability performance is being recognized externally. For example, at the Irish Operational Excellence Awards, our Kinnegad team won Team of the Year. Not wanting to leave the Hope team out, I was also pleased to report that they have sustained plant mastery status into its fifth year, a rare occurrence in the industry. Lastly, in respect of our expand priority, we have extended our aggregates footprint in Ireland through the acquisition of Robinson Quarry Masters, a family-run quarrying and concrete block business. We have vertically integrated further in GB through the acquisition of Broome Bros., a leading manufacturer of concrete blocks based in Yorkshire.
We have further expanded the surfacing business in GB through the acquisition of Minster Surfacing, an award-winning regional surfacing business. All three of these transactions are fully aligned to our strategy. Over above all this, we have continued to invest in minerals, the lifeblood of our business. We currently have a mineral planning pipeline in excess of 100 million tons.
In summary, a strong first half to have pride in and to take confidence from. Before I move over to James to deliver the financial review, it would be wrong of me not to mention the AIM to Main Market move. Breedon shares now trade on the Main Market, and we expect to be eligible for inclusion in the FTSE 250 at the next index review in September. James, over to you.
Good morning, everyone. Thank you, Rob. We've had a strong first half to 2023, increasing revenue by 11%, as reported, and 7% on a like-for-like basis, excluding the 6 acquisitions that we completed over the course of the past 12 months. We've increased EBIT by 5% against what was a pretty tough comparable, and we've seen a small compression in the underlying margin to 9.5%, principally due to our energy hedges moving back in line with market pricing. We've held our return on invested capital at 10% year-over-year, and that reflects the robust business trading performance and comes despite the impact of the increased U.K. corporate tax rate.
We've seen a really strong performance on cash in the first half, with a free cash inflow of GBP 21 million, compared with a broadly equivalent outflow last year. This reflects a good deal of hard work that's gone into the management of working capital, most notably around inventories and cash collections. Net debt at the half year is nearly GBP 40 million lower than this time last year, Our Covenant Leverage is 0.3x lower than H1 2022, at 0.7x. We retain significant balance sheet flexibility as we come into the second half of the year. The strong trading performance, underpinned by excellent cash generation, means that we're in a position to increase the interim dividend significantly ahead of earnings by some 14% to 4 pence per share, and reflects our confidence in the group's prospects.
We'll announce the dividend timetable for payment in due course. In terms of how that revenue growth of 11% is made up, pricing contributes 12% of the increase, and that splits out as around 9% tailwind from 2022, and 3% from pricing in this year. Like-for-like volumes on a blended basis were down as expected by around 5%, with aggregates down 6%, asphalt and cement both around 3%, and ready mix marginally lower across the group as a whole. Acquisitions contributed around GBP 25 million, or 4% of that revenue increase. Pricing more than offset costs, and despite the drop through impact of lower volumes, led to growth in the absolute EBIT number, alongside that small compression in the underlying EBIT margin, principally due to the higher energy costs.
To put some color around that, we paid around GBP 10 million more for energy in H1 2023 than we paid in H1 2022. That number will repeat with a little bit more in the course of the second half. This next slide is quite different from the one I showed you this time last year. With cost inflation now visibly moderating across most spend categories, albeit still elevated compared with two years ago.
Spot energy costs are significantly lower than they were 12 months ago. Accordingly, our hedges are now broadly in line with market pricing. Bitumen costs are more stable than they have been as well. Carbon pricing has seen some interesting dynamics in recent weeks, with EU allowances continuing to trade in an elevated band north of EUR 80 per tonne, whereas in the UK, the cost of allowances has deflated quite rapidly.
As you'll recall, we operate a surcharge discount mechanism for carbon. That works well both for us and for our customers, who get cost certainty. Each division has played its part in the strong financial performance, with GB materials delivering a solid performance in a softening market. Ireland has performed well, with encouraging growth on both the top and bottom lines, and a small expansion in margin. Cement has performed strongly, with the margin compression seen in the division, principally due to the energy hedge impact that we discussed earlier. We've had a really encouraging first half in terms of cash flow, generating an inflow of nearly GBP 21 million.
Just picking out a few highlights from this slide, our first half working capital outflow of GBP 41 million was significantly lower than last year's GBP 77 million, and that reflects good control over receivables and inventories, in particular, and slightly different phasing in terms of the purchase of carbon emission trading credits. CapEx spend was broadly in line with the first half of last year, the net cost of acquisitions in the year to date was GBP 11 million. GBP 5 million of the cash exceptionals relates to the re-domicile of the group holding company and the costs associated with the transfer of the group's listing from the AIM to the main market, with the balance being costs associated with acquisition activity.
We have over GBP 400 million of headroom on our debt facilities. Slide 29 in the pack has further details on the costs of those facilities and the tenor. As usual, I have summarized our technical guidance to cover the balance of the year. Interest will be around GBP 12 million, with cash interest slightly lower at GBP 8 million for the year as a whole.
We are expecting a blended effective tax rate of around 20% for this year, rising to around 22% in 2024. Bear in mind that those increasing tax rates will impact our post-tax performance measures, such as return on invested capital. We plan to invest around GBP 10 million more than originally guided back in March, with CapEx of around GBP 100 million now expected for the full year.
Key projects include a new mobile asphalt plant to support our airport surfacing business and further investment in sustainability projects, such as the network of CEM II silos that we are installing across GB and the alternative raw materials project at Hope, which is now underway.
The three acquisitions completed in the year to date have an aggregate enterprise value of up to GBP 19 million, with the net cash cost over 2023 being around GBP 17 million. We will see the usual working capital unwind over the balance of the year and expect the overall year-on-year position to be a modest net working capital outflow, principally due to the inflationary impact on the balance sheet.
That should lead you to a net debt number for the full year, absent further M&A, of around GBP 180 million.
We are still expecting profitability for the year as a whole to be weighted towards the second half, but to a lesser extent than in the past few years. We're maintaining our full year expectations. In summary, we've had a strong first half, with growth on both the top and the bottom lines, which has been underpinned by an excellent cash performance. That's allowed us to increase the dividend significantly ahead of earnings towards our target payout ratio of 40%. It reflects our confidence in the Group's prospects. We've maintained our return on invested capital year-on-year. We're seeing the benefits come through of our strategic execution and the operational focus within our financial framework. We start the second half of this year with a strong balance sheet. We're well positioned for the remainder of the year.
Thank you, and I'll now pass back to Rob.
Thanks, James. I'll start the operational review by highlighting the central theme of resilient performance against the backdrop of rising interest rates to counter inflation and associated downward revisions to growth and construction forecasts in both the UK and the Republic of Ireland. This trend conflicts with the long-term structural growth drivers that remain in place in both markets and does create short-term challenges for the industry. Let's look first at the UK market, where the picture in the first half has been one of contraction. UK GDP is estimated to have been flat in the 5 months to May. Construction output over the same period is estimated to have declined by 1%, but as you can see on the chart, there are divergent trends.
The latest data available for MPA volumes, Q1, has confirmed that demand for mineral products is declining. This is reflected in the construction PMI that stood at 48.9 in June, pointing to contraction in the construction sector. Considered against this backdrop, we are pleased with the U.K. performance in the first half. We'll talk more about this in the business review shortly. Before I do that, I want to turn next to the markets in the Republic of Ireland, where the operating environment was similar but more positive. modified domestic demand is estimated to have been flat in the first quarter. Construction output is estimated to have grown by 4% over the same period, as you can see on the chart. The construction growth reported is reflected in confidence, with the construction PMI standing at 50.4 in June.
Our businesses in the Republic of Ireland benefited from this growth backdrop. However, the benefits of this were masked at the island of Ireland level by the absence of the governing assembly and, more specifically, spending in the north. Moving on to our businesses and to GB. Our GB business had a successful half year, delivering a solid performance in a softening market. Volumes generally declined with the broader markets, although concrete volumes were stable, potentially due to an acceleration of activity in advance of the new building regulations that came into effect in June. As I mentioned earlier, we implemented an operational excellence review and restructured the materials business to drive improvement and standardization.
We continued to build on our regional strategic surfacing capability with the acquisition of Minster Surfacing, and following the award of a position in the North Super Region of the National Highways Pavement Delivery Framework last year, we were able to secure a good portfolio of work in the first year of delivery.
We are also developing a successful airport runway resurfacing business. We have a strong pipeline of work and are currently active on Islay and Southampton Airport runways. As a reminder, our surfacing business delivers our own high-quality materials, pulled through our vertically integrated model.
Our Irish business also had a successful half year, but below the surface there are two competing forces: one, lack of a governing assembly and business confidence in the north; and two, more activity and confidence in the south. Volumes reflected these themes.
Aggregates and concrete were impacted by the market in the North. However, asphalt volumes held up better, reflecting increased activity levels following an encouraging tendering season in the South.
In the North, we were successful in the third round of the Department for Infrastructure framework awards, securing the Limavady term surfacing contract. We also resecured two street lighting contracts. Like GB, we implemented an operational excellence review in Ireland. We also made it a truly island-of-Ireland business under the leadership of Pat Gilroy, who joined us late last year.
Lastly, we extended our aggregates footprint through the acquisition of Robinson Quarry Masters. As you know, expanding our aggregates footprint in Ireland is a key focus of our strategy, and Robinson comes with over 40 million tons of reserves and resources. Moving on to our cement business, which had a strong first half.
Volumes generally declined in line with the broader market. However, pricing continued to be dynamic, and our forward hedging program afforded us a clear view of our input costs.
As mentioned earlier, we achieved a significant milestone toward our net zero objective with the launch of the Peak Cluster project. Our teams at Hope and Kinnegad carried out two planned kiln maintenance shutdowns, both concluding on schedule and within budget, and each plant maintained an outstanding reliability record.
We continued to reduce the clinker content of our products, supporting our customers' sustainability objectives, and we continued to push the boundaries of alternative fuel use through plant and process optimization.
Lastly, we are progressing innovation, and we are currently undertaking trials at Hope in conjunction with First Graphene, Morgan Sindall, and the University of Manchester on graphene-enhanced cement and concrete that reduce carbon emissions.
I would now like to move away from the first half and look forward to the second half. While the economic landscape in the UK and the Republic of Ireland appears uncertain, and we are experiencing short-term downward revisions to growth and construction forecasts, I want to remind you that the long-term structural dynamics driving infrastructure spending and house building have not changed, and that Breedon is well placed to benefit from these.
I have said this before, and I will say it again, whatever materializes, the Breedon model and the people who operate it have repeatedly demonstrated their resilience, delivering strong operational performances irrespective of the macroeconomic backdrop, and I remain confident in our ability to continue to deliver.
Thank you. We now welcome your questions.
Hi, Robert Chantry from Berenberg. Just three questions from me. Firstly. Well, thanks for the presentation. Firstly, could you just comment, I guess, on U.S. market sourcing, in terms of your kind of potential longer-term ambition to build a business out there? What, what have you learned in the first half? Are there any kind of interesting observations around niche markets or areas that might be of interest? Secondly, around pricing dynamics, I mean, you helpfully broke down the kind of breakdown of the 12% between last year and this year. Could you just comment on how this year's pricing round has gone in terms of the percentage that you're expecting versus what stuck, any differences between, different products?
Thirdly, just in terms of that CapEx breakdown, where you've increased it from, I think 90 to GBP 100 million, investing GBP 10 million or so, is there any kind of guidance on the medium term for 2024 or 2025 around the kind of expected level of normalized CapEx running through the business, given the opportunities you see? Thank you.
James, if I pick up the first one, would you like to pick up the other two? Thank you, Rob, for the questions. The U.S., we continue to evaluate the attractiveness as the U.S. as a third platform, and the work we've undertaken in the first half of the year, you know, confirms to support our view that it does present an attractive opportunity at the appropriate time. What's important is, and what we've consistently told shareholders is, you know, our priority is to continue to develop and build out our two existing platforms.
However, you know, it is only right for us to look at the third platform, so at some stage in the future, we don't end up having successfully built out two platforms and not having a third opportunity.
So in terms of pricing, if you remember back in March, when I talked about pricing dynamics coming into 2023, I felt that it was important that the necessary pricing didn't have to be more than mid-to-high single digits. The reason for that was that a third successive year of high teens to low 20s pricing, we felt that would lead to some potentially significant changes in the demand profile. The 3% that you saw come through in the first half, when you analyze that across the full year, you'll see something in that sort of mid-to-high single digits, which is where we wanted it to be. We don't give a pricing breakdown by category, we have successfully moved on price across all product categories.
In terms of CapEx, and the out years, I think we'll see a similar sort of profile that we've seen in the last couple of years. We've spent, you know, broadly GBP 90 million-GBP 100 million in investment back into the business, and I think that will continue. Clearly, as we engage more around some of the sustainability initiatives, particularly in Peak Cluster and things like that, there will be the need for further investment in order to achieve those sustainability goals. At the moment, we would expect that we can manage the early stages of that through our existing CapEx budgets.
Hi, it's Cedar Ekblom from Morgan Stanley. 2 questions. The gross margin in the second half, should we assume that that will be down relative to the first half? It sounds like you're being a little bit more cautious on the willingness to push more price increases from here. The second question on M&A again, 3 deals in the first half. Can you talk about the let's call it like an M&A funnel, how many businesses are sitting in DD today? How many businesses are in a phase before DD, you know, deep understanding of the business? How many targets do you have that are in an early fact-finding phase? Just to get a bit more understanding on how we can think about the cadence of M&A in your existing markets. Thank you.
I think in terms of the second half, in high-level terms, we're expecting a second half that is more akin to what we delivered back in 2021 than what we delivered in 2022. I wouldn't say that we're residing on price. I think that we will always look at pricing in the markets where it's needed and where our value-add offer merits and justifies it. I think, as I said earlier, the overall pricing picture, I think it was very important this year that we didn't need, as an industry, to look at necessary pricing in the mid to high teens again. I think that overall, pricing for the industry is where it needs to be in 2023.
In terms of the M&A pipeline in GB and Ireland, I would say it's healthy. You know, James and I would be disappointed if we couldn't do further transactions in 2023.
Thank you. 3 questions, hi, from Redburn. Firstly, just on the cost side, you put some charts on the presentation just around clearly where spot prices have gone in terms of energy. You've obviously built hedges up over sort of a few years now. Is there any color on what that looks like for 2024 and 2025? I know it's probably maybe too early. I suspect the answer is down, but any color is useful, and how pricing also reacts to maybe falling prices. Secondly, just on the Peak Cluster, a bit more color around what you're doing there, the technology, whether a technology's actually been chosen in terms of how the carbon capture works and just a bit more color.
Thirdly, just on the carbon costs that you mentioned, just any information on maybe the savings that you've had from carbon costs this year. Thanks.
I'll take one and three, if you do two. In terms of the hedges going out, we are now basically at market. If you look back historically, that is where our hedges have been. In some years, we have made a little bit on the hedge. In some years, we have lost a little bit on the hedge.
Where the benefits of the hedge really came through was last year, when we were completely insulated from that very significant spike that you can see on slide 9. I think that we will continue to see a degree of deflation over the next 18 months or so. I still do not think we will get back to the sort of energy pricing that we were seeing back in 2018 and 2019.
In terms of carbon, as you know, we essentially pass through the cost of carbon to customers on a surcharge discount basis. It means that the customer gets cost certainty. They have the visibility on what their cement will cost them for the next quarter. It's a very transparent way of passing on the carbon impact to customers. It's not something that we necessarily make a gain or a loss on, because it's a straight pass-through back to the customers.
In terms of the Peak Cluster, it's very early days. I would direct you probably to the website to get some background information and learn more about the project. What I would say is that, you know, we're currently still in the pre-FEED stage. When we come out of that, probably later this year, we're then gonna move into a FEED stage, which is probably gonna take the next 3 years. It's only really then that things will crystallize. I think there'll be some good. I mean, it's a separate subject. It could consume a long time. I think the website, you'll find useful.
It is John Fraser-Andrews, HSBC. Two for me, please. The first one on the Peak Cluster. Rob, could you elaborate on that as to what the investment requirements of that project are, feeding into the debate with your customers on cement pricing?
Secondly, please, your volumes guidance, is it right to still assume you are expecting a mid-single-digit decline for the full year? Obviously, having done 5% in H1, perhaps you could touch on how you see that varying between GB and Ireland. Thank you.
I will pick up the Peak Cluster. Are you happy on the volumes? Look, I do not want to give the same answer, but I think it is early days. I think what is clear is that there will be a significant investment from all the partners, and that will require not only pricing progression to deliver that, but it is also going to need the support of the government.
I think if we, as an industry and as a country, broadly in the cement industry, it is non-negotiable. We need to get to zero carbon.
this is the lead technical solution, and we need to make it work, but industry can't do it alone, and so it's gonna need the support of government. That's what the next few years are gonna be all about, John. You know, we've got the FEED to try and formalize and finalize costings and technologies, and post that, we then need to engage with stakeholders, including the government, so that we can make it deliverable.
I think on volumes, we'd say yes, our core assumption for the year as a whole is that we'll see mid-single digit volume declines. There will be some mix impacts in there. I think the swing factor would be if there was a functioning assembly coming back in Northern Ireland, that potentially could lead to some quite interesting dynamics in terms of volumes in the north. For the group as a whole, mid-single digit volumes for this year.
Thanks, James. Could I ask you to flag any upside or downside risks you see to that in any other markets, particularly in GB? How likely is, in your opinion, obviously it's politics, but how likely is the formation of an assembly?
That is way above my pay grade, so I am not even going to attempt that one. I think in terms of GB, as we expected, local authority budgets have come under pressure. I think that has impacted our asphalt business in GB. I do not see that dynamic necessarily changing over the balance of this year.
I think on ready mix, as Rob touched upon, we did get a bit of a benefit from house building in the first half, in terms of the house builders looking to start projects in order to get out ahead of the change in the building regulations.
There may have been a bit of a shift of demand in the year, into the first half relative to the second.
Christen Hjorth from Numis. Three from me, please. The first one, just what is needed to achieve the margin target from where we stand today? I assume the lower end is probably just volumes, but the upper end, what we would need to see there.
The second, obviously, balance sheet, very strong, leverage reduced. At what sort of leverage level do you consider other uses of capital, such as shareholder returns and buybacks, et cetera?
Then just a bit more color on why this year is likely to be less H2-weighted than normal. Is that some concern on the market, just a bit of prudence, just understanding that dynamic? Thank you.
Okay. In terms of the margin targets, yes, to get to the lower end of the range, you know, we need volumes, we need volumes to come back. I think within the range, to get towards the top of the range, it will be a mix of things. It will be, you know, further business improvement, further investment in operational efficiency, a good deal of the CapEx program that we're doing now, in years to come, we would expect would make us a more efficient and effective operation. Finally, pricing. You know, we always look at pricing, we look at the value that we add to our customers, the value that we can contribute to projects.
As we've often talked about, the way that projects are scored, now is very different to the way it was done 20 years ago. There is an increasing focus on sustainability characteristics and value add, and that's an area where, again, we think we can do things. In terms of the balance sheet, you know, I'm very happy with where the balance sheet is at the moment. I think that having flexibility, the ability to make acquisitions off balance sheet, the ability to invest back in the business, and the ability to utilize our cash generation, is a real strength and a real asset to the business.
As we've always said, if we were to get to a position where we were approaching net cash, the M&A pipeline looked difficult to execute, then at that point, we would consider other forms of use of that capital, but we're some way off that at the moment. I think that if you look at what we've done, around the dividend, you know, we've demonstrated that, you know, we are committed to progressing towards that 40% payout ratio. In terms of the half to split, I think that coming into this year, I felt this year was quite finely balanced, in terms of, where the, where the full year might end up.
I think it's less finely balanced at the half year. But we do still have, you know, those energy costs coming through in the second half, relative to 2022. I think overall, we'll be closer in absolute terms to what we did in half 2 of 2021, than what we did in half 2 of 2022.
Tobias Roeder here from Stifel Europe. Two questions, if I may. I had a discussion with an industry peer of yours, admittedly more biased to the southern parts of Europe. We talked about solar and the payback there, and it seems to be very attractive, two times, two years, basically.
Just remind me of your strategy in that context. You have a lot of quarries where you could install solar and reduce your energy bill on the back of that. Have you done that exercise? Secondly, with regard to your M&A strategy or strategy generally, have you reviewed your product focus and/or geographic focus at all?
In particular, a lot of your peers like the concrete paving space, something I also feel is quite attractive. I was wondering what your views were there.
In terms of solar, we are evaluating, we have evaluated, and we continue to evaluate opportunities across our portfolio. There are a couple of lead scenarios at the moment, the largest of which is a solar farm that we now have planning for at our Kinnegad cement works. We will be progressing it as the year goes on. We continue to evaluate opportunities, and we generally believe the paybacks are attractive.
In terms of the M&A strategy, nothing has changed for us. We have our core outputs, which are aggregates and cement. We have the ambition to build out our existing platforms, investigate a third platform, and continue to vertically integrate.
We will vertically integrate into products, for example, like Broome, and otherwise. But any products that use our core outputs is something that we would consider.
In other words, concrete paving is one of those?
Yeah, we'll get concrete products, concrete blocks. I mean, yes, it's not, it's not just paving.
Thank you.
Morning, Sam Cullen from Berenberg. I've just got one, actually. I think coming back really on Harry's question earlier. In terms of 2024, if the volume and outlook doesn't pick up from here, and it's 2024's flat on 2023, taking James' comments around a couple of years of 20% price increases and the cost backdrop, can you move prices forward again in 2024, or do you see sort of deflation across the industry, modest or not?
Well, the honest answer is, I'll tell you on the 31st of December, 2024. I think that if you look at our track record on pricing and staying the right side of the price cost dynamic, you know, we've successfully done that over a number of years. Therefore, I think that, you know, coming into 2024, I would still expect us to be able to push price, particularly around products and around projects where we have a value-add component.
Good morning, Marcus Cole, UBS. Just to be clear on price cost in H2, you're expecting that to be broadly neutral? Just taking the color away from what you've said previously. On GB, you're talking about competitive positioning enhancement. What does that actually mean on the ground? The third one is just on HS2. What's the impact, do you think, on volumes this year? Thank you.
Yeah, on price costs for the second half, yes, I think broadly neutral, Marcus. Broadly neutral for the second half.
I think in terms of the competitive positioning, I... Look, we continue to ensure that, you know, our business is customer focused and that we operate a local market, and we will continue to do that. Breedon has succeeded and demonstrated its resilience over the last decade by doing that, and we will continue to do that. Was there a third one there?
HS2.
HS2?
Yeah.
Look, for us, as we said before, we're not particularly directly exposed, to HS2. I mean, so, it, you know, for us, the delays and the, you know, the potential what happens to the next phases, you know, are unlikely to materially impact our performance in the rest of 23. I mean, I think what has happened on HS2 is that, you know, it has made parts of, the UK and GB particularly busy, the Midlands and things.
If there is a rephasing, it makes it not quite as busy for a period of time, but extends it over a longer period of time, I don't think that'd be bad for the industry, and it might well take some pressure off. We've talked about it before, but sometimes when you're chasing the volume, the marginal cost, it becomes suboptimal. You know, ultimately, I think the key thing is that there is a commitment to it still, and it will continue to underpin demand, you know, in the infrastructure space for a number of years to come.
Hi, Rob Chantry at Berenberg. Just one quick follow-up, I guess, on Sam's question. Are there any interesting observations you've got from the market around different pricing activity and different categories from competitors, principally based on the energy hedge, et cetera? Are there any who've tried to push price a lot more and haven't stuck? Are there any kind of big differentials that have caused distortions in market contracting and tender awards, et cetera?
I think part of that question is probably best directed at our competitors rather than.
I'm sure it is.
... asked us. No, I think that, you know, what we've seen over the last couple of years is that the ability of, particularly independents, to offer, rogue pricing has largely been eroded because they've had to buy all of their inputs at spot. I think although the general picture is one of deflation, I think that's deflation that plays out into 2024 and 2025, rather than in 2023.
Yeah, I think we're getting to a position where we wouldn't really want to comment more. I think the market's been rational. I think that's as far, as much as we'd really want to say.
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Oh, well, I know everyone's very busy, so it seems like the right opportunity to wrap things up. I would close by just leaving you with the message, just how resilient the Breedon business has been and the Breedon team have been. Just to say that James and I remain confident in our ability to continue to deliver. Thank you very much for coming here today, and we look forward to catching up with you in the months to come.