Hello, and welcome to the Persimmon first half trading update. Throughout the call, all participants will be in listen-only mode, so there's no need to mute your individual lines. Afterwards, there'll be a question and answer session. Just to remind you, this conference call is being recorded. I'll now hand the floor to Dave Jenkinson, Chief Executive of Persimmon. Please begin your meeting.
Good morning, everyone. We'll follow the normal format we've historically done. I'll give a quick opening, pick up one or two items, we'll then go straight into question and answers, and then I'll jump onto the final summary. Just a nice opening is, in these difficult times, we believe it's never been more important to be guided by our clear purpose of delivering long-term sustainable returns in the best interest of all stakeholders while managing the risks to the housing cycle. I am delighted how the company has responded to the challenge of balancing the needs of all stakeholders while ensuring the safety of our colleagues, customers, and suppliers. In particular, I would like to draw your attention to the fact, one, the role we've been able to play our part in wider society.
This has been primarily led by not making any use of any form of government support, either the government Coronavirus Job Retention Scheme, not accessing any money under the government COVID finance proposals, and importantly, and sometimes forgetting, we've paid all our taxes promptly and on time. Secondly, during this period, we support all our staff through a challenging time by not only paying them full salary, but also paying bonus and pay increases recently. We've also continued to support our local communities, and in the first six months, we supported a number of charities and donated over GBP 370,000 and support the NHS through the donation of PPE equipment. I'm delighted this has been recognized by the C19 Business Pledge. Operationally, we have benefited from this approach. Not furloughing our staff enabled us to be much more responsive and agile to the COVID issues.
We've been able to get back on site much earlier. We were able to continue to sell houses during lockdown. We were able to plan for new sites opening and provide all the technical information to support the sites. We've been able to assess the land bank and progress appropriate opportunities. We believe this has produced a dynamic response to the situation which places in a good position for half two. We believe this has manifested itself into a strong half one performance in the context of the COVID challenges. We produced 4,900 completions, revenues of GBP 1.19 billion, strong cash generation, and over the last six weeks, private reservations have been 30% ahead of this time last year. During the nine-week lockdown period, we were able to produce 900 gross reservations. This gives us a great platform for the future.
We have an excellent forward sales position and a very strong book position with 14% more EUs than this time last year. That was from a position of strength. We have strong outlet numbers firmly established. We have good product availability to meet the anticipated increased demand as Help to Buy comes to an end. As we enter half two, the business is in robust health, which gives me confidence to deal with any future economic scenarios which may come along and produce a strong performance in half two. As normal, I'll open up for questions.
Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find it answered before it's your turn to speak, you can dial zero two to cancel. So once again, that's zero one to ask the question or zero two if you need to cancel. There will be a brief pause now while we register your questions. Our first question comes from the line of Gregor Kuglitsch of UBS. Please go ahead. Your line is open.
Good morning, Gregor. How are you?
Hi, Gregor.
Thanks for taking my questions. Maybe three, if I may. The first one is just on sort of the volume outlook. Obviously, you're up, I think in the statement you say your productivity is almost back to normal. Sales are up 30, your order book's pretty good. Can you give us some feel as to the directionality of volumes in the second half? Do you think it could stabilize, or is that too aggressive, kind of too aggressively positive, I guess? Second question is on the margin. I think we've had a lot of people talk about sort of some loss of margin in the first half.
I'm sure you suffered some of that yourself, but I'm more interested is, going forward, is there any reason to think to sort of chip off the last gross margin that you said I think was 33%-34% in your land bank? Anything we need to think about to kind of deduct from that, obviously, assuming prices are stable, of course. Finally, can you just maybe give us a view on what you're doing in the land market? You bought almost no land, I think 800-odd plots in the first half. What's the strategy going forward? Thank you.
Okay. I'll deal with questions one and three, and then I'll pass question two over to Mike. Volume outlook, obviously you've seen the moving parts. We enter half two with a very strong forward sales position.
We've got WIP in the ground, which we're really pleased with because that was part of our strategy entering into the year. We anticipated there'd be increased demand as Help to Buy come to the end. We speculated more build. We have 14% more EUs in the ground than what we did this time last year, which is a relative position of strength, which gives us confidence that we can produce a decent number for half two. Obviously, this will still be in the context of what economic scenarios come along. We plan for all economic scenarios. We plan for the upside, stability, and on the downside. All things being equal, and we don't see another lockdown, we will be disappointed if we didn't see a number similar to what we did in half two 2019.
Now all things being equal, I think that's probably reasonable guidance to take for now, although obviously that's heavily caveated by what may happen in the future. In terms of the land market, hasn't really changed. We've had all our land people fully employed. None of them were furloughed, so we've been out in the marketplace. We've been actively engaging in opportunities and looking at opportunities. This isn't the right time to call the bottom of the land market. There isn't the deals out there which would be compelling enough in any scale to suddenly go out and speculate in a big way. However, as always, we continue to be agile. Every deal is looked at in its own merits. Every deal comes across my desk personally.
There is one or two deals we may be able to pick off, when we take the risk versus reward into context, but we have a highly strict and disciplined control on the criteria we apply to, and we'll continue to use that criteria. At the moment, the number of opportunities meeting that criteria aren't that large, but we'll obviously keep our fingers and our ear to the ground, and we'll respond to very quickly if that was to change. Mike, do you want to pick up on margins?
I think, Gregor, as you say, given the lower volume delivery in the first half, we mention in the statement that therefore we'd expect some margin depletion because our costs are our costs. As Dave has already said, we've continued to invest in our HR capability. We've not taken any self-help measures in terms of cutting staff or salaries, et cetera. In the view, again, it was part of the strategy that we thought that, after careful thought, that activity would bounce back. That obviously all our teams have been employed through lockdown, as Dave's already outlined, and have continued to support the increased activity that we've seen and indicated today.
I think that the cost are the costs, and therefore the fact that the necessary reduction in volume delivery in the first half because of the COVID constraints and readjust working practices, et cetera, in terms of build for a short period, that will lead to some margin depletion, if you will, sort of lower overhead recovery efficiency. As Dave's already indicated, if we get a similar volume outturn to the second half of last year, then we'd expect that to achieve some normalization as we go through the second half. When you put those pieces of the jigsaw together, I think, we will see some depletion for the full year. That will be more accentuated in the first half, but in the second half, I think our judgment at the moment will be approaching a more normal level of overhead efficiency.
In terms of margin, gross margin, there is an interesting dynamic there in terms of obviously the site shutdown has lengthened development period. I think there's two aspects to that. There's one which is an impairment issue. Does that additional cost burden on each and every site raise the issue of impairment? With our margins, we were very positive that that is not the case. Then secondly, there's a sort of a loss of productivity issue for the first half, and that's more of a presentational issue. I'm aware that one or two are thinking of perhaps presenting it in an exceptional way on the face of the income statement. We'll continue to assess that moving forward, and we'll provide a bit more detail on that in August. At this point in time, as I've already said, the costs were the costs.
There's no exceptional costs on costs, additional costs, if you will, particularly, that are material. I guess in August, we'll be talking a bit more about the efficiency and loss of productivity and impact on the margin in a bit more detail. I think we'll put meat on the bones in August on that one.
The great thing for us, Gregor, is if we look at our headline gross margin, sales revenues have been incredibly robust. In fact, take a look, a little bit, if anything. Our headline gross margin has held strong. It's obviously the inefficiencies from not producing the volume means the overhead's not quite as efficient.
We've lost volume and revenue, the cost base is the cost base. I've said that three times now. What Dave said, we've lost the volume and the revenue. That's the issue for the first half. We'll see, as Dave said, see what we can do in the second half to get back to a normal volume run rate. Is that all right, Gregor?
That makes sense. Thanks a lot. It's helpful. Good luck. Thank you.
Cheers.
Thanks, Gregor.
Thank you. Our next question comes from the line of Arnaud Lehmann of Bank of America. Please go ahead. Your line is open.
Thank you very much. Good morning, Dave. Good morning, Mike. Three questions on my side as well, please. Maybe starting with a follow-up on your comments. The surge in private reservations in June, that's quite encouraging. I understand that you're taking market share to competitors, and I also assume there was some pent-up demand that is coming back. To which extent do you see that as a short-term bounce? Could we see the surge in demand and reservation stay in the coming months? That's my first question. My second question is, any comment on the stamp duty reduction? I mean, first-time buyers on your side probably wouldn't have paid anything anyway. Do you think that's an incremental support from the demand side for the next six, nine months? Lastly, on the dividend, you're hinting that you could declare something in the second half.
Is it still technically possible to declare a dividend for 2019? Would it be part of a kind of interim H1 dividend? Thank you.
Okay. Yeah, just to pick up on the three points. The first one in terms of private reservations, what we've seen has been extremely encouraging. To be fair, still we've been a little bit surprised on the upside, both the number of reservations we were able to take during the nine-week period and during the six-week period. Personally, I think there's two moving parts to this. There's the market share element, there's also our quantifiable numbers. I think it's inevitable that our market share will get eroded a little bit, I think there's opportunity for a bit more demand to come back into the market and sustain these numbers. The truth is, we don't really know. As always, we have options, we plan for three scenarios.
We have a business model that plans for one, an upside, two, that stays the same, and three, in a downside. Whichever one plays out, we have a business model prepared for it. What I will say is there's a couple of push factors that do make a difference for half two. The first one is which you touched on with stamp duty, which I'll come back to, and the second one's Help to Buy coming to an end. As I said previously, we anticipated back as early as probably the beginning and middle of 2019 that there would be a push for demand as Help to Buy came to an end.
That's why we wanted to get so much WIP in the ground, and we continued to build, and we've continued to build very aggressively even now, and to get the numbers up so customers who want to take advantage of Help to Buy are able to reserve our houses before it comes to an end in March, but more importantly, having practical completion by December. We believe we're in a great position to take advantage of that. We know what number of stock properties we can still offer, and we believe none of our customers have been put in a vulnerable position where they may lose it as we sit at the moment. We believe that could make a difference to demand. The truth is, though, we'll have to wait and see what happens with unemployment because that would make another argument to say why demand wouldn't increase.
Yes, we are pleased with what we've seen, but we wait and see and keep an eye on it, and we'll respond to whatever comes along. In terms of stamp duty, your observation is quite right. 50% of our purchases are first-time buyers, so in some respects, it may not have quite the same impact, but anything that gives confidence to the market and gives short-term impetus. I think what it will do, it'll help carry on the momentum of the marketplace, specifically people who are sitting on the fence who are thinking, "Well, I'm not sure whether to buy or not." It'll give them the encouragement to buy. What I don't think it will do is encourage people who are sitting in their house who don't want to move to suddenly buy.
I think it's a positive, and I think it will provide a bit of momentum, and I think it will support the activity which is taking place in the market at the moment. In terms of the divvy, I'll pass on to Mike.
Arnaud, yeah, in terms of divvy, obviously, we canceled the surplus capital return that was scheduled for the 2nd of April on reassessing business need, effectively. That was obviously necessary. As you can see, the cash position of the business is very strong on the back of the incremental sales that we've taken through these challenging times and managing the cost base as we've indicated. I think that, as we've already said, the decision and judgment that the board takes around distributions will be based on the continued performance of the business, looking at the market in terms of indications of overall activity, together with obviously a judgment around the macro. That's particularly foggy with obviously the pandemic issues and Brexit, et cetera.
There's quite a complex and challenging assessment to do there on a continual basis. But I think that, as Dave's already said, the strategy that we've had over 10 years now puts the business in a really strong position with a clear focus on the risks of the cycle. As we said before, that really the pandemic has accelerated probably, it's the start of the end of the current cycle, the ensuing recession, because technically we're already in recession, I think. Everybody would probably agree with that. The recession will see the end of the current cycle, and then the new cycle will emerge. What we need to make sure is that the business is in a very strong position to take advantage of the reinvestment opportunities that emerge over the next 12 to 24 months, probably, if not a little bit further out.
As always, we're going to assess this continually and make sure the business is on the front foot in terms of its ability to reinvest at the right time in the cycle to set up the next period of outperformance with a view on the sustainable returns that Dave pointed to at the top of the meeting.
I think the great thing about that is we've got options. If there was a lot of compelling land opportunities suddenly became available, although I don't expect it, then obviously we'll look to take advantage of that. Obviously, if we've got a lot of cash on the balance sheet and continue to perform and the market looks robust, then obviously that would be more favorable for a dividend. What we'd want to try and do is get a bit more trading under our belt and see where we are in the middle of the year, then it's discussed in a bit more detail when we have a bit more information and it becomes a bit clearer.
That's very clear. Thank you very much.
Thank you.
Thank you. Our next question comes from the line of Rajesh Patki of JP Morgan. Please go ahead, your line is open.
Hi, Rajesh.
Good morning. Good morning, Dave. Good morning, Mike. I've got two questions, please. First one is on the lease for H1 seem to be driven in large part by a change in mix between private and affordable. Can you help us understand the completion mix for the first half, and would you expect that to normalize in the second half? The second question is, in terms of the delivery profile of the forward order book, can you help us better understand how that differs on private and affordable as well? Thank you.
Well, you've done well there. I think they are both for me, so I'm relieved. Thank you.
Dave's taking a rest now. On half 1 sales, we've seen and looking at price, the headline movement year-over-year is flattered, if you will, or accentuated by the fact that we've got a lower content of affordable homes being completed in the first half at just under 18% of the mix. In the 4,900, we've got about 4,000 PD, the rest being HA. When you split that out, when you look at the PD, the private sales, the price is around 1.3%, 1.4% up on the previous year. There's a bit of mix in there, as Dave said, a little bit of underlying improvement, the usual sort of drivers there. That relates to the completions. In terms of the forward orders, it's a pretty similar picture.
We give the detail in the statement where ASP on private sales is about 1.7% ahead of the previous year. It's a pretty similar picture in our forward order book. The mix, which was your second question, moving forward, we would expect that in the second half, we'd see a greater or more normalized HA mix. That may increase. If you look back at last year, that probably provides a reasonable guide to the mix that we'd expect for the second half of this year, on the basis that Dave's already painted in terms of our ability to deliver that sort of overall volume. The delivery of the HA in the first half has been held back because of the build slowdown, whereas obviously we're now back up and running, so we'd expect a normalization of that delivery, if you will, in the mix.
Is that all right, Rajesh?
Yep. That's it. Thank you very much.
Thank you.
Thank you. Our next question comes from the line of Emily Bédoyère of Credit Suisse. Please go ahead. Your line is open.
Emily.
Morning, guys. Morning. Hope you're well. I've got two questions, please. The first one, just an update on build cost would be great. Are you sort of seeing those soften into the second half and sort of what's your expectation there? Secondly, I appreciate the WIP position is obviously considerably better than it was sort of this time last year. At the same time, if you look at the sort of strength of sales rate and think kind of we need to see it sort of come off at some point, because otherwise we kind of risk getting into the same situation again, where potentially we're selling sort of too far ahead and maybe we face customer service issues again. Is that potentially a limitation on sales rates at some point? Thanks very much.
That's two questions there. I'll take the first one, and Mike can do the build position one, or maybe just put your bit on it as well. The first one in terms of build costs, as we've said before, most of our materials are fixed for this year. We have done one or two good deals to give our suppliers certainty in a longer period, which we're pleased with, which are producing a quality improvement where up in spec more than cost. We've took that advantage to get a better product for our customers. In terms of labor, what we're really pleased is there's been more labor available. What we haven't done is taken that as opportunity to try and reduce our labor cost base at this stage, by introducing unilateral labor reduction prices.
It's really good that we're getting the extra labor because it means we can get to the build to meet the demand what we're seeing at the moment. However, what we are seeing on new sites where we are tendering, that the build cost element of it is coming in very competitive. If this was to continue at these sort of numbers, then we would see some cost reduction as we move into 2021. A lot will depend upon what the market looks like. If a strong demand out there and everyone's after all the subcontractors, then I would imagine as normal, if it carries on at the moment that we are selling relatively better than other people, I suppose we'd probably get a bit more advantage of that. In real terms, there's no real change to build costs at the moment. Mike on
On the work in progress, I think it's that dynamic in terms of the interplay between our ability to sell and our ability to build, Emily. I think that the sales rates are positive at this point. As Dave says, there's a lot of uncertainty out there. I think other things could happen to change that rate of sale. As always, what we do is we review this in each of our business, 31 house building businesses every week. We're reviewing our rate of build. We're reviewing our progress on site and new releases, our sales rates, our pricing. We do it plot by plot, as you know, every week on every site in every business. We'll continue to do that, and that will allow us to manage our build programs in tune with the sales activity that we're seeing.
Given that we've got ourselves in such a strong position, I think as we've always said, we'll continue to build through this period. As Dave's already said, that's put us in a super strong position to meet demand as Help to Buy runs off, without any complications to support our customers in the right way. It also provides us with a great platform to continue to deliver those build programs. Again, going back to the lockdown period, the fact that our procurement teams and our technical commercial teams were still beavering away and securing materials and lining up subcontractors for the restart and beyond. The fact that we've got great continuity and strong activity, is very attractive for the supply chain. We've got great support, and I think we'll benefit from that moving forward.
I think it's important, and I think it's a point well made, to be fair, Emily, but as a business, customer care is really important to us.
Yeah.
The key moving part in customer care is making sure the product's available to give reliable move-in dates and to give us time to finish it to the quality the customer expects. For me, that's been a big moving part in our customer care improvement plan. What that may mean is that we do carry a bit more whip in the ground, but I personally think that's a cost well worth paying. It unwinds very, very quickly. We have a really strong balance sheet. Personally, carrying a bit more whip to ensure our customers get a product on time and to the quality to what they want is a cost worth paying. If you take a step back, it's not really whip that causes a problem for your balance sheet.
It's land acquisitions at the wrong time and making too big a land acquisitions at the wrong time because they're with you for a long time and they take a long time to unwind, which is why we're not calling the bottom of the land market at the moment. I'm more than happy to continue to produce the whip to support our customers. If that makes sense.
Absolutely. Thanks, guys. It's really useful.
Thank you. Our next question comes from the line of Chris Millington of Numis. Please go ahead. Your line is open.
Morning, Dave. Morning, Mike.
Morning, Chris. Hi, Chris.
Hi. A few quick ones from me, please, if I could. Can you just comment on what your outlook is for the site number profile? Just in light of that slightly more cautious land spend over the last 18 months or so. Second one is just really if there's been any regional variance. I presume Scotland's probably lagged in the numbers because of the later opening, but perhaps more on a run rate, I'm interested in. The final one is just around mortgage availability and down valuations and whether or not you're seeing any change there.
I'll pick up the first two and touch on the first one as well, then I'll let Mike pick it up. In terms of mortgage availability, down valuations, no, we've not seen a material problem. We've not experienced any real issues with getting mortgages for our customers. We're very aware of what's happening in the market with high loan-to-value mortgages. It hasn't really manifested itself as a problem for the company yet, and we're not really seeing any down valuations. In terms of regional variances, no, the whole market's been pretty uniform. Even Scotland, where we've been able to [sell more mortgage], we're doing well. Obviously, we haven't been able to build the same there because they're only just getting back. In terms of regional variance, the market's very, very strong.
In terms of outlook, I think we've benefited in terms of what our people beaver away, as Mike said earlier. Our site profile, we believe we're in a decent position for outlets, and we are being careful what we've bought and what we are buying. Our criteria is aimed at ensuring that we do have a decent site profile for half two this year, which is already secured, and for half one 2021. Obviously, we've done the work and looked at that, and we feel in a comfortable position. Mike, you want to provide a bit more color?
Yeah, I think that's a decent summary. I think that, Chris, as you know, it's a dynamic situation insofar as how long do your sites last? It's subject to the rate of sale. We've got a very strong pipeline of sites coming towards us that are conditional, subject to contract, outstanding conditions of various sorts. We manage those very carefully, as you know, and construct our contracts to purchase in a way that we do maximize our flexibility to manage changing conditions. As Dave's indicated, we've got a very strong base at the moment. We've got a lot of flexibility and choices in terms of managing the cycle and our commitments, future commitments to buy. I think Dave's already said, we don't need to do a bad deal because we've got a very strong network at the moment.
We've got an excellent high-quality land bank that puts us in a great position as a product of the work that's been done over the last 10 years or so. We're fortunate in that regard. It's about managing the cycle and making sure that we've got this flexibility to make sure that when we do press the button to acquire a site, we've got the proper risk-adjusted returns, as Dave's already said. At this point, as you'd expect us to say, we'd want a higher level of return for commitment because obviously there's a lot of uncertainty, particularly on price. That's the elephant in the room, I guess, in that pricing, yes, continues to be firm in our experience, but who knows? As Dave's already said, we don't know what's around the corner.
We do need to be quite cautious, but we'll stick to our playbook, if you like.
Yeah. Our criteria obviously looks to mitigate that risk you described, Chris, because the point well made.
However, without causing us a long-term problem. It's not hard to work out what that solution is, but that's in our criteria, and that's what some of the sites we're looking at. We're very aware of that issue that we need to protect our outlet numbers, and we have a strategy and a criteria that deals with that.
Is that all right, Chris?
Yeah. Just to push you a little bit further.
Go on then.
to see the sales rate normalize back to previous levels.
Yeah
Are your outlets likely to stay flat over the foreseeable future?
Yeah, I think so. Through the first half of this year, we had average outlets of around 340 as a number. I think that, as Dave's already said, we've got good visibility in terms of the next 12, 18 months, which gives us a lot of flexibility. We ended that period about 335, so it may tickle back a little bit. Again, it's dependent on sales rates.
It's in our gift, in effect. It depends which contracts we want to buy.
Yeah.
We've given ourselves that optionality. It is important to point out as well, in the event that the market was much stronger, that our company network is the largest in the industry. We have 31 operating companies across the whole of the country. That gives us the opportunity in a scenario where there is an upside to take more advantage of it than anybody else and increase our volume on the upside. Obviously, if the market remains stable, then we'll pick and choose which bits of land we want to buy according to our criteria. If the market drops, then we'll be a lot more selective again which contracts we want to buy. It's really in our gift, and that's where we've positioned the business to give ourselves the options. We're not going to press the button until it becomes clearer where we look come the autumn.
It may not be till January it becomes clearer. The key is to give yourself options and never back yourself in a corner where you have to do something that you don't want to do.
Absolutely clear. Thanks so much for that.
Cheers, Chris.
Thank you. Our next question comes from the line of Will Jones at Redburn. Please go ahead. Your line is open.
Morning, guys.
Morning, Will.
Three from me, please, if I could. The first was just on around Help to Buy. You've mentioned it a few times on the call. In that last six-week period, has the percentage of your reservations from Help to Buy changed dramatically given the impending changes at the end of the year? With that in mind, obviously, we heard about stamp duty yesterday, but we didn't hear anything specifically on Help to Buy. Is there any message kind of circulating around the industry from government around any adjustment or not for that suggested change next year, in terms of homebuilders being able to use the scheme? You sound quite categoric in your thinking and planning that it will definitely change at the start of next year. Any additional thoughts there would be great. Second one was around net cash.
I guess pretty similar half-year position to the full-year position when we look back. No dividend in the first half, so free cash, basically pretty neutral for the six-month period, which is a good outcome, clearly in the circumstances. I guess when we think in the second half, higher volume coming through, doesn't sound like you're going to be out there spending a huge amount on land. Would it be fair to say all else equal on the dividends, that actually that cash balance should rise fairly sharply between here and December? The last one maybe was just since we obviously last spoke to you formally, we have had the announcement of Dave's successor, the next Chief Executive coming in from the end of the year.
Is there anything additional you can help us with on learning about that sort of process, the handover, any engagement that may have happened between yourselves and Dean, I guess, beyond what I assume is the chairman-led process? Any flavor there would be fantastic. Thanks.
Well, I'll deal with the first two. I'll deal with the elephant in the room one very quickly. In terms of my successor, we haven't got a firm date for when Dean is going to start yet. I've made myself available to the business consistently, which is why I gave early notice back in February. I've made myself available to the business as long as they need. The announcement was quite clear, that's potentially to the end of the year. If something changes on that, we'll keep you informed if Dean becomes available earlier. I haven't probably got anything else to add on that. In terms of Help to Buy, I think maybe I haven't been clear because I've never categorically said that I think that the government will change Help to Buy.
I've been slightly more reticent. We've never advocated at all, ever, that Help to Buy should be extended because we believe we have a bit of self-help in this. As I said, we anticipated that this was going to happen as we came to the end with customers, which is why we put so much whip in the ground at the start of the year, even earlier than that, to make sure we had the whip ready for this anticipated increase in demand. We are not aware of any customers who have got a material problem who will not be able to move in and hit the CML date for December and with a completion by March. I'm not advocating at all Help to Buy extension.
I think the government is doing exactly the right thing, waiting and see what happens in the momentum in the market, wait and see what happens come the autumn period. If it needs a bit of stimulus, they still got that in the armory to use moving forward. In the meantime, we'll continue to build, we'll continue to make sure our customers are not put in a vulnerable position. We'll make sure as many houses are complete as possible to make sure that Help to Buy can be used by our customers. In the six-week period, it's tickled up a little bit, but not materially. There's a bit more there, but the market has been strong across the board, as you can see in the numbers. A 30% increase in sales is really pleasantly surprising on the upside. In terms of Help to Buy, I think that's clear.
In terms of net cash, I think it's a really good observation. I think that's a point well made, and a good summary of the situation. All right, Mike, add a bit of color.
Yeah, I think, Will, your expectation is correct in that if we do get a similar position to the second half of last year, well, you can see the numbers because they're being reported to the second half of last year. That gives you a good template to think about with the additional dynamic around the land side. We're not completely out of the market as Dave has already mentioned, in terms of the land potential to do one or two deals. I don't think you should assume no land spend. I think that would be wrong. I think it's going to be highly selective on a proper risk-adjusted return basis according to our criteria. I think your observation is right in that you would see a strengthening cash hold position to the end of the year.
Indeed, Dave and I think that July and August nearer term is going to be quite strong as well because obviously, we have suffered delay in terms of legally completing a certain amount of volume, which out of necessity has been tipped into July and August. I think that we're going to see a different cash profile. If you are to map it week by week, you're going to see a bit more of a bulge in summer, in terms of cash return back into the business because of that delayed completion. Given that we've got a strong base at GBP 830 million at June, the cash book is going to be, if you will, in a stronger position earlier through the second half because of that slight change to the normal profile. Am I answering your question there, Will?
Absolutely. Yeah. No, that's great. Thank you.
Yeah.
Thanks, Will.
Cheers.
Thank you. Our next question comes from the line of Aynsley Lammin of Canaccord. Please go ahead. Your line is open.
Great. Thanks.
Morning.
Morning. Just a couple of questions. First of all, on the reservations, up 30% last six weeks. Wondering if you could give a bit more color. Has that been progressively increasing, improving week by week though? Obviously, if it has last week, would that be significantly higher than the 30%? Have you been doing anything in terms of change of incentives, more Part Exchange or anything to boost that number? Second question, just on the cancellation rates, you say been in line with historical trends. Just interested in a bit of color there again, what's the pattern been like over, I guess, since the end of March? Has it been consistently in line or has it improved recently, having spiked a bit post the lockdown? Thanks.
That's great, Aynsley, because I think that blew up for Mike then, so thanks for that. Do you want to get that, Mike?
Yeah. No problem. I think, in terms of the last six weeks' reservations and that outperformance, well, last year's week-by-week performance, it goes up and down, as you know. I would say that it's consistently outperformed, albeit, from the lockdown period, which for us from week 12 to week 20. COVID first hit the market week 12, and you can see that in the HBF stats that we get. We reopened our sales offices on Friday the 15th of May, which was the back end of week 20. That sort of marked the end of the closure of site sales presence. The six weeks from week 21 to week 26, we've seen a progressively increasing and improving trend in terms of sales performance. I think we covered that earlier on another question in terms of, well, pent-up demand.
We've already just touched on Help to Buy content, customers using Help to Buy, et cetera. I think there is a market share gain in there as well. I think we've been a bit more agile, perhaps, than some. Our sales teams have been very active in following up leads that have been generated through our HomeFinder websites, through lockdown and beyond. We've been really pleased with the level of engagement with customer through our sales teams and customer care teams, for that matter, which has generated this bit of outperformance. We'd expect our market share to get competed away as the whole industry starts gearing up again. I guess, every sale that we attract around the edges makes us a bit stronger. We are really pleased with that. In terms of counts, we've not had to use PX particularly or incentives particularly harder.
Pricing remains firm, if not, as already Dave's mentioned, tickle up a little bit. That landscape still seems pretty resilient. In terms of cancellations, obviously in lockdown where we did the 1,600 gross, the net number was around about 1,000 net. I think cans there would be averaging somewhere between sort of 35% to 38%, 39%. A lot higher than normal.
On lower numbers.
On lower numbers, yeah. More recently, through that six-week period, you're nearer the 20% mark, and the same six weeks last year, you'd have been at probably 17%-ish. Very similar to where we were last year, really. That's encouraging as well, in terms of attrition, if you will, in terms of customers maybe changing mind. The level of gross reservations means that. That's the important thing, in that the level of gross interest that we're gaining in the market, as Dave says, is really pleasing. That continues. Last week again, not within this period, was again very encouraging, a continuation of these sorts of figures. As you know, we play what we see in front of us, and we continue to be encouraged by it.
Just to be clear on that cancellation point during the lockdown period, the quantum was in line with historic trends.
Yeah.
It was just because there was less reservations that the percentage went up.
That's right.
We didn't see any real uptake in numbers, just there was less growth, which increased the percentage.
Because you know that, Aynsley, the cancellations come from, it's not that week's reservations. Obviously, it's previous week's reservations. I mean, you get a trend on it. It's an indicator, but it's not. I mean, that's why we mentioned gross reservations in the lockdown period because that's what matters, really. The amount of gross interest that you're attracting by offering new homes for sale into the private market. Which we're pleased with, and we continue. The website traffic is very elevated. Appointment requests and brochure requests and email contact and telephone contact, et cetera. We're really pleased with it, and that's testament to not only the positioning of the business in terms of product and the sites that we have on offer, but also the hard work of the sales teams in communicating properly with customers and chasing down the leads, if you will.
That's great. [Over at TM Thompson]. Thanks very much.
Thank you. Thanks.
Thank you. Our next question comes from the line of Charlie Campbell at Liberum. Please go ahead. Your line is open.
Yeah.
Charlie.
Morning, guys. Yeah, just one from me really. Just on the sort of build efficiency. You're saying you're back to kind of normal levels. Clearly, that's kind of better than, I think, anyone else is doing at the moment. Just wondering how you're achieving that. Is that just by using kind of longer site opening times or weekends or just you started earlier? Just wondering if I can understand how you're achieving that when others are struggling to get there.
I think there's two main moving parts. The first one is if you look at the shape of sites and where we build and how we build. Unlike our peers, we haven't got a lot of city center developments. We don't build high density schemes where there's large amounts of people on top of each other, where it's much more difficult to respect social distancing. I think the shape and format of our developments, which are much more traditional, it's much easier to get people to work using their own transport, et cetera. It's much easier. The second moving part is labor has become much more available. All our build programs effectively had time built in from labor. What's happened is labor has become more available, so the time we had in our build programs hasn't been as necessary.
The void period is what we allowed compared to what we needed. The two main factors, one, labor has become more available. We can have two people working on two plots rather than having them working on one plot and having to drop from plot to plot. Secondly, the nature and form of our developments is much easier to respect the social distancing. In fact, I go further than that. We're not pleased with our method statements and what we've done and all the work we've done during the lockdown period to prepare for it, that we don't believe there's any need to relax the two-meter rule. We will continue to abide by that two-meter rule for the foreseeable future. I think that probably answers the question, unless you want any more on that, Charlie.
No, that sounds very clear. Yeah, congratulations. That's a great effort. Thank you.
Great. Thanks, Charlie.
Thanks, Charlie.
Thank you. Our next question comes from the line of Glynis Johnson at Jefferies. Please go ahead. Your line is open.
Good morning, Glynis.
Morning. Given it the tail end, I'm going to take four questions, if I may. The first one, just in terms of mix. You talked about the mix-
She's limited to only four. All right, Glynis?
All for me.
Just want to take this into the next era. In terms of the mix, you talked about the mix in terms of HA versus private, but if we are seeing this push to get Help to Buy deals over the line ahead of the change in regional caps, is there also going to be a mixed impact in terms of the private, i.e., should we expect a higher private selling price second half? The second one, just in terms of the five-star rating that you've been at since the beginning of the year, I just wonder if you can give us a bit of color on that. Are you well into that five-star? Is there still upwards momentum? Anything that can provide comfort and sustainability given all the issues that COVID will bring with that.
Thirdly, just in terms of the guidance, just so I'm clear, you're talking that H2 completions will be similar to H2 last year, but are you also saying that the EBITs will be similar given you're at very similar build rates as to where you were before? Then lastly, in terms of dividend, previously you've shown us that scenario where you can still continue to pay a final dividend even in the event of a situation similar to the GFC. I was going to say, without trying to pin you into a corner, but that's exactly what I'm trying to do. Is the scenario which you don't pay a final dividend, that you anticipate downward pricing similar to the last financial crisis?
I think I'll deal with two and four, and I'll let Mike deal with one and three. Four, the one on dividend, you are trying to pin us in a corner, and I think Mike answered it very, very well. Just to be clear, we're in a strong position, we know that. The business has got a good cash position. We've got strong forward sales. We've got an excellent land position. We've got strong build position, and we're broadly back to COVID production levels, and that gives us options. What I'm not going to do is commit at this stage to what that option is, and we'll come back to you later in the year after review and see how trading goes, and we'll get a bit more color on that.
As Mike says, we're looking at a really strong July and August and September. If that manifests itself in the cash we hope it'll produce, then that'll give us even more comfort to consider positively. I'm not going to give any more detail than that, Glynis, as you would expect. In terms of the five-star rating, yes, we're really pleased what we've seen since January. Importantly, for the three months before January, we trended very high. We're very close to five star for the full year. Very close. Decimal points away. The performance has been excellent. For me, it's never just been about the star rating. That's only one metric. It's much more important our Customer Care Improvement Plan, which is starting to get embedded in the business.
We're starting to see benefits in that improved communication. The retention is now firmly getting established in the business. FibreNest is now offering, which is a much better service than anyone out there. Our customers are really benefiting through this lockdown period from having access to full fibre. It's interesting, the speeds that people are taking are now taking a much faster package and starting to value that offer. It's a lot of moving parts in terms of improving our customer experience, not just the star rating. That is an important metric and we're pleased with what we've seen. However, I'm not going to get hung up about it. I want to improve every part of the business, and we'll continue to try and improve that as we go forward. Do you want to pick up on one.
In terms of selling price in the second half, I think, it's very difficult for us to predict what the second half is going to look like. I think that given the expectation of a greater proportion of affordable housing in the mix, you may see some overall dilution because of that mix effect through the second half. Perhaps the headline ASP will come back a bit compared with the first half because of that mix effect. In turn, if you're looking at PD pricing, I think the reasonable expectation at this point based on the information that we have, is to expect maybe a flat sort of number compared with where the first half is. I don't think we should be speculating on the actual mix of private sales that we take off 330 sites through the second half.
It's very, very difficult, as you'd expect, to be able to predict that with any precision. It's a bit of a false precision, if you will, because of that. On the EBIT, well, again, this is a trading update. We need to pull the numbers together in full, which we'll be doing and put meat on the bones in August for the first half. I think we've talked about earlier on, I think it was Gregor's question, that we do expect some depletion in the first half with a return to, and if we can achieve a more normalized run rate in terms of delivery in the second half, then we'd expect an improvement on that. As Dave's already said, gross margin is proving resilient.
I think, overall, there'll be some depletion for the full year because of the impact on the first half, which we'll give a bit more detail in August, and we can perhaps talk about the full year on the back of that further detail. I do think if we can achieve the sort of volumes we're indicating for the second half, then our overall operating margin rate will improve because of the improved overhead recovery, because that's the flip side of the coin that we've seen, the same coin that we've seen in the first half of the year. Is that all right, Glynis?
Lovely. Thank you.
Thanks, Glynis.
Thank you. Our next question comes from the line of Clyde Lewis at Peel Hunt. Please go ahead. Your line is open.
Morning, gents.
Morning, Clyde.
Hi, Clyde.
I think I've still got three, unbelievably.
Great.
One, I think, for you, Mike, on land creditors. I sort of heard all the comments about land spend and appreciate that. Do you think you'll see a sort of an increase in the use of land creditors now in this sort of market? Do you think it's, again, something you'll continue to sort of look at site by site and see how it plays out? That was the first one. The second one or the second and third, I think, are probably more for you, Dave. One was sort of on, I suppose, the changes you might have seen since lockdown on the demand patterns from customers, whether they're coming to you and asking for more bedrooms or offices or more outside space.
What's been your experience in terms of the appetite for different types of product, I suppose, and how you're thinking about evolving your product going forward? The third one was on the government's comments about trying to improve the planning further. It's still early days, but from what you've seen, how positive do you think that could be?
Okay. I'll deal with two and three. In terms of land creditors, Mike can pick up on that. In terms of land credit, it will depend what we see and if opportunities are there. We'll use them appropriately. We'll come to that in a second. In terms of lockdown, we haven't really seen a change in demand patterns, because what we try and do, Persimmon, our product is placed at every price point. Just like a car dealership, we try and have a mix and range of choice of product on each individual site. We have the ability to maximize opportunity and capture as many sales as what we want. People, at the end of the day, can only buy what they can afford. Even if someone wants a four-bed house, they can only afford a two-bed house, they'll still buy a two-bed house.
We've seen no real change in product or demand in what people want. What we've seen is an uptake across the board about people wanting to move. There's no real change in product in any that will materially change what product we offer in the future. In terms of planning, you're quite right, it's early days. The general thrust sounds to be encouraging, but like all these things, the devil's in the detail, and I look forward to reading that in some detail when it actually comes out and see what it means and see if that creates opportunities for the company or create some threats and deal with them appropriately as what we envisage is going to happen.
I think on the land credits point, Clyde, Dave's already said we'll look at each deal on its own merits. We always do that. The deal that we cut with the landowner will reflect those particular circumstances, and I think that's the way we approach it.
I think the important thing is by pinning your land creditors down at the appropriate time in the cycle, which we've clearly done with a really long tail. What it means is, if the market does get a little bit better and we do see opportunities in the land market. We can then start to use our land credit as gain because we've got the headroom, which means we don't need to employ quite as much cash to take advantage of the land position, and that was our strategy. If you look back in the day when we bought a lot of land, we used land credits very effectively. That's something in our armor moving forward, if there's opportunities there that we need to use again.
If the opportunities were there and it was the right time to go back into the market in a big way, then we'd look to use land credits because we have the flexibility because they're getting paid down.
Okay. Thanks, guys.
Thank you. Our next question comes from the line of Ami Galla of Citi. Please go ahead. Your line is open.
Thank you. Morning, guys. Just two questions.
Morning.
Just two questions from me. One is, as build programs in the industry come back to normal levels, do you anticipate any shortages in material supply in the industry? The second one, really on construction capacity. It's quite encouraging to see that your build capacity is back to normal. I'm wondering, is there any scope for that to flex up further? If the strength in the order book sustains in the second half, what are your options in terms of delivery in that sense?
I think I'll take both of them. In terms of materials, we've worked very hard with our supply chain during the lockdown period. We supported them. We secured supply for ourselves. We went into the deals to give them confidence to produce the product. Obviously, we've got our own brick and tile, which supports that as well. In materials, I don't see that being a material issue in terms of what's going forward. In terms of construction capacity, if the demand's there, the big restraint will be the same restraint as it been for a long time, is labor. We do have the infrastructure of 31 companies, which gives us more flexibility to grow the business than any other company. Labor is the constraint. As we sit today, there's good labor available.
We're able to get quality labor at a price which is attractive, and that does give us the opportunity. A lot will depend on what their commitment is, because I imagine one or two of our peers out there will not want to start a new site, I understand, are not putting the infrastructure in the ground to capture this demand, while we are. If there's a bit of an opportunity where their actual supply drops a little bit, which means we've got less demand for labor, that potentially means that if the market was to remain strong, that we could take advantage of it. I think that probably answers the question. Does it, Ami?
Yeah. Thank you.
Thank you. Our next question comes from the line of John Fraser-Andrews of HSBC. Please go ahead. Your line is open.
Thank you. Good morning, gents. Two for me, please. The first one on the WIP, the 14% year-on-year build. That was the same as the December level. I hear that the completions are guided flat for second half. Does that mean that that 14% year-on-year increase is what you've sunk into the business to support the better quality, the five-star rating? Is there any possibility that you could use that WIP actually to push completions up a tad in the second half and into 2021? The second question is, we've got two government stimulus measures, both with an end March 2021 window. Clearly, there'll be a lot of customer demand to get completed by the end of March.
Are there any levers you can pull in the short term to actually get your build rate up, your completions rate up to gain even more market share than you have?
I think that both points are really well made, John. It's actually the thought processes which has been running through our business mind for so long time. The answer is, in the short term, it's not that easy to increase supply, which is why we've planned for it 12 months ago. Obviously, it's been extended a little bit by stamp duty. We carry that WIP primarily for the two reasons you pointed. One, we want to improve the quality, and also we wanted to have the capacity to take more market share if it became available. You're quite right. If the demand remains constant, we do have the WIP and to take advantage of that demand if it's appropriate.
I'm not going to start forecasting any more than what we've got at the moment, other than what I would say, if the market was very robust through the autumn period and was to be sustained, we do have the WIP in the ground to take advantage of it. Does that make sense, John?
Thanks, Dave. Just to follow up then, in terms of what you've invested for your build quality and the improvement you've seen in your customer satisfaction ratings. Perhaps this is one for Mike. That sort of GBP 140 million WIP increase that we saw last year, or was reported last year, is that it now in terms of the investment in build quality? Could you just update on any investments, I think it was GBP 15 million that were going through the P&L on customer care. Is there any update on those, please?
Do you want that, Mike?
Yeah. I think the additional investment in customer care resource, obviously we're well on the way in crafting and pulling together the consolidated build regime in terms of what we're naming the Persimmon Way. We give a bit more of an update in the statement, as you can see. I think what we've said in terms of that GBP 15 million still stands. We're not particularly seeing any real need to add to that cost base, if you will, or that investment to support further improvement. Indeed, still a number of important initiatives that are underway have yet to be introduced or gain proper traction in the market. As Dave said, we view customer support and service in a more broader fashion. I think the Persimmon Way is going to help quality assurance. The investment in WIP assists that itself.
The retention scheme is gaining traction now. The customer portal is about to be released, and that's going through final proof, which actually Dave and I are looking at shortly and going through that. That's not even in the market yet. There's a number of issues that are going to continue to add momentum behind the service provision, if you will, on a broader footing to our customers, as Dave's already mentioned. Which I think we need to just see the consequences of that. We're very positive that we'll see further continued improvement on the back of those investments. There's nothing really new that we would add on top of the issues that we've already highlighted over the last 12 months or so.
Without a doubt, as you say, John, I think the WIP investment that we've made on a number of fronts for a number of reasons, has paid dividends in terms of availability, as Dave's already said, and quality. I think behind that question, you think, "Well, what's the cash effect for the rest of the year and into next?" I think that's probably where you're coming from as well. I think that we'll continue. We've already said we'll continue to build into the market. I could see a bit more WIP being put into the ground. You've already heard Dave talk positively about that. It does unwind quite quickly if we need to, if sales change. We can be more circumspect on future build if we need to be. That's not a massive cash drain for a long period. We can turn that around.
As Dave says, the big issue that you don't want to get saddled with is large land investments that are not done at the right time, at the right risk-adjusted return. Whereas WIP moves quite quickly. I think we're still positive. I think you should assume some cash absorption into WIP moving forward, for the reasons we've already touched on.
Great. Thanks, gents.
Thanks, John.
Thank you. Our next question comes from the line of Gavin Jacob at Barclays. Please go ahead. Your line is open.
Morning, Gavin. Hi, Gavin. You're on mute, Gavin.
There we go. I'm in now.
Yeah. No problem, mate.
Yeah. The first couple of topics, gents. First one's on Part Ex. You touched on that earlier, Mike, but just in terms of the usage through the first half, I'm guessing if you look at it through last year at 6% of revenue, so you haven't used it that much in the first half. Is that because you haven't needed to? Is there, I guess, a little bit of fear about the secondhand market? Just talk us through how that's been working. The second one's just really around, I guess, the mortgage market, Help to Buy, and I guess the strength of your balance sheet.
I guess if you're looking medium term, maybe you could call this a bank side scenario, but if Help to Buy comes to an end, the government don't accelerate it, what's your kind of appetite to be using the balance sheet, I guess, for shared equity if the mortgage market is also still got a lack of high LTV mortgages?
Well, Mike can pick both of them up, and I'll pick anything up that comes out of what Mike says. If you want to pick-
On the last question, our appetite to do shared eq is zero, I would suggest, because firstly, we would become regulated if we start originating financial product, and that's why we use a third party to manage our back book. Yes, they act as our agent on the properties and fees, et cetera. We're not a bank. We don't want to use our balance sheet to provide credit to customers particularly. I think our appetite is, as I say, very low in that regard for the obvious reason. I think the government really wants us to put money in the ground in terms of opening up new sites and building homes.
Really, that was one of the prime movers why the government introduced Help to Buy and its predecessors because they wanted the builders to build rather than to act as banks. That's a pretty sort of clear answer on that point. With respect to Part Exchange, as Dave already said, we do offer product around across the range on each and every site at the different price points. We do offer larger, higher priced product relative to your typical first-time buyer product on sites. Obviously we've got the Charles Church business offering a more aspirational product. We look at Part Exchange on a case-by-case basis for existing homeowners. It's been a slower market. As you know, the secondhand market's been quite slow.
I suppose our lower use of PX has reflected that to a degree, together with our positioning towards the first-time buyer/first-time mover end of the market. The great thing, it's similar to the land credits point that Dave mentioned earlier. The great thing for us is that our PX, our ability to use PX, is a lot higher than we're currently using. In terms of dealing with perhaps tougher market conditions if they emerge moving forward, we've got another club in our bag that we can play to get out of the bunker, if you will, to assist customers who would like to move who are currently owner-occupiers. I think that again, we've got the ability to use PX more. We've got the balance sheet to do that. Indeed, we continue to target the use of that on a proper basis.
Strict criteria, again, in terms of use of that PX facility that all the teams are adhering to. PX is moving. We haven't got a lot of stock. The aged stock is low. We're managing to clear value in terms of bought-in value on the PX that we're doing. That's a reflection of current pricing. Yeah, it's an attractive opportunity for us in the market to use a bit more of.
The only other thing I would add, Gavin, is, and it's a point well-made on the mortgage market, but we shouldn't forget Help to Buy is still around for 2023 for first-time buyers.
Yeah.
50% of our purchases are first-time buyers. For us, the impact's a lot less, the Help to Buy coming to an end and mortgage availability than other builders. However, I still think the banks will respond and come up with some form of product or other products available in the market to showcase the gap to ensure there is mortgage availability in the wider market. For us, where we are in the market and where we've positioned the business means we're less exposed to any change in Help to Buy than most builders.
Great. Thanks very much. I'll put it back on mute now.
Okay. Thanks, Gavin.
Cheers, Gavin.
Thank you. We have one further question. That's from the line of Sam Cullen at Peel Hunt. Please go ahead. Your line is open.
Yeah. Morning, Mike. Morning, Dave. Just one question from me, if I may. Can you just give some comments coming back to those growth reservation or market share points, the way you do it. Can you just give some comments on whether you think that's you taking share from peers, given in the new build market, given you feel a bit more agile reopening? Is it more a factor of, do you think the new build market taking share of the whole of the housing market, perhaps you kind of have a multiplier on that given your agility, given the Help to Buy is bridging that mortgage gap that some of the previous questions allude to?
I think there's little doubt during the lockdown period that we were taking market share because we were out there, we were more agile. We still employed all our sales staff who are all working from home, where most of our peers furloughed their sales staff. Looking at the numbers coming out from some of our peers, you can see that during that period, we took a lot more reservations. Also as we've come out the six-week period, the fact that we were already trading, all our staff were fully employed and up and growing, meant we were also probably did take a bit of market share as well by being a bit more agile.
What we've taken from the secondhand market, it's a bit more debatable because you look at all the information coming from Zoopla, you look at the information coming from estate agents, and our own evidence on Part Exchange property, the secondhand market's moving pretty well as well. I think in the short term, we did probably take a bit of market share. As our peers become a bit more developed and back up to speed, then that market share will be traded away, although we'd like to try and think we can keep some of it because of the WIP investment we've got in the ground. I think it's more to do with the markets generally bounce back pretty strongly. How long that lasts for, we don't know.
I think it's more to do with the market confidence coming back rather than just taking market share as we move forward.
I think, Sam, just on the overall picture, the whole market, I think, given the overall transactions will be a lot lower than first expected for this year. I think new build will continue to take more market share of overall housing transactions because of that. I think if you went back 15, 20 years, new build would probably have 10%, 11% share of the overall housing transactions in a year. More recently, the new build sector's probably up at 14%-15%. We believe that we will continue to take a bit more market share of the overall market as an industry because we've got better availability.
As I've already said, we've seen over recent years the secondhand market become slower, whereas the new build contribution has grown back from the GFC, obviously taking a hit this year, and we need to see how that develops with the ensuing recession thereafter. I think that new build industry will continue to take a bit more market share of the overall available demand.
Understood. Thanks very much.
Thanks very much.
Thanks, Sam.
Thank you. As there are no further questions in the queue, I'll hand back to our speakers for the closing comments.
Thanks for that, Mark. Persimmon is in robust health. We've a very strong balance sheet with cash in the bank, which gives us options. We have an industry-leading land bank with limited land creditors with an excellent payment profile, which gives us options. The benefits of the customer care improvement plan are now starting to manifest itself in the business. We have a good outlet shape and product availability, and WIP is in a very strong position, which gives us the ability to meet any demand which is out there and gives us options. Finally, and most importantly, I believe we have the best employees in the industry. Their reaction has been incredibly resilient, flexible, and most importantly, very supportive of the actions the company has taken in our aim to produce long-term sustainable returns for all. Thank you, and I think we'll finish now, Mark.
Thank you. This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.