Earnings Call: Q3 2019

Nov 7, 2019

Earnings release

Hello, and welcome to the Persimmon Trading Update Analyst Conference Call. Throughout the call, all Just to remind you, this conference call is being recorded. Today, I am pleased to present David Jenkinson, Group CEO and Mike Killeren, Group Finance Director. Gentlemen, please go ahead. Good morning, everyone. You've got me here, Dave Jenkinson and Mike. What I thought we'd do all one quick update and a quick summary of 2 or 3 key points. And then as usual, open up to some questions and answers. The first thing I'd like to point out is that in the second half, we will be continuing to put customers before volume. However, we expect the half two impact to be less than the 6% volume drop we experienced in half one. We're delighted with the progress we've made on our customer care improvement plan, especially when a number of elements are still in the process of taking effect or about to be implemented. We're delighted that for the first time since 2012 and the HBF quarterly review, we've achieved a 4 star rating And we're currently trending well above the threshold for a 4 star rating. And we're also delighted that the business has produced some fundamentally sound financial results, even though we've been able to improve our customer care performance. Now as usual, I will open up any questions that anybody may want. Hello? Thank you. Yes, I will open up for the Q and A now. There will be a brief pause while questions are being registered. Thank you very much. Questions are answered. We have a first question from Arnold Enlant from Bank of America. Please go ahead. Just a second I think Arnaud just left the call. I'm very sorry for this. We have a next caller from a question is from Greg Hulke from UBS. Please go ahead. Good morning, Greg. Hello. Good morning, Greg. Hi, good morning. I'm here. So a couple of questions, please. Just can you clarify on the volume points? I think in the statement, you actually kind of say that maybe I misread it that you expect Similar decline in H2 in terms of volumes, but I think in your statement there, you were kind of saying maybe it's a bit less. If you could just give us a little bit more comfort around how the volume delivery is shaping up in the second half. I guess you're pretty much sold now. And then secondly, if you could just confirmed to us that nothing has changed on the margins. I think the last message was a bit of a sequential decline, but maybe the average for the year kind of flat Year over year or maybe down a little bit, that kind of ballpark. And then the third question is a little bit more longer term, which is now that you've kind of cycled through the slowdown of the build release or sales release and then the with build and you're clearly scoring 80% plus, I guess, you're implying maybe quite comfortably ahead of 80%. Do you think you can set the business up to return to some volume growth next year? Or is it too early to call that? Obviously, assuming kind of similar market conditions. Well, Kjame, if you want to do the first two and I'll answer the third one. Okay. Yes, I mean the sales prognosis for this second half, I think is still influenced by the focused measures we're taking on supporting improvement in delivery dates, quality and service that we're delivering to customers. But I think the impact will be a little lighter than we saw in the first half. So I think we'll see an increase of the first half being delivered in the second half, which we say in the statement. So the usual seasonal pattern, which is influenced by the better seasonal sales period in spring, Which obviously influences the forward orders that we deliver through into the second half given that we're on A calendar period, if you will, in terms of January to December. So I think the yes, a little bit down on the comparative for the second half where we did from memory around just between 8000300,000,000 8400 in the second half of last year. So we'll be a bit down on that, but We're not expecting to be down by 6%. So maybe, I don't know, 4% or 5% perhaps Against the comparative, but obviously ahead of what we've delivered in the first half. I think on the margin prognosis, as we said at the prelims, we're expecting a bit of drift on the margins. Obviously, the cost inflation is starting to become a little less is challenging. We talked to the prelims about this we're seeing increased visibility of available trades, particularly at the front end of development process in terms of ground worker skills Perhaps bricklaying availability and we continue to see that develop a bit more. So I think we're starting today looking 12 months ahead. Perhaps our cost inflation prognosis is a little lighter than the sort of 3.5%, 4% we're talking about at the start of this year. And perhaps That would be maybe 2%, 3%, 12 months out. But obviously, there are some headwinds there in terms of Obviously, the exit from Europe, impact on sterling to a degree And other influences that could materialize in pushing that cost inflation a little bit forward. So we need to watch how the market develops from here. But indeed, The higher price points we're seeing a bit of a more challenging market, a bit more intensivization. PX utilization for ourselves is pretty modest still. Maybe in the second half of last year, it was running around 10%. We may get maybe 11%, 12% support through the second half of this year by way of a comparative. So a little bit more incentivization, which obviously nibbles away at the margin a little bit. So nothing significant, But maybe a little bit of a drift in margins as we move forward, which we'll see for the second half of this year into next year, But nothing substantial. And just a point on the later sales release to moving on to Future sales prognosis. I think obviously sales outlets are important. Part of the measures all Dave has been leading in terms of more disciplined sales release, has meant that There has been a reduction in our active outlet numbers. And you can see in the statement that we're off about 350 active outlets. In the first half of this year, we're actually up 345. So We're hoping that come the turn of the year as those comparatives roll over, we'll see A bit more strength in the outlet numbers on a like for like basis, if you will, because we'll be running against our 345 active outlet comparative come the first half of next year. So that should provide a bit more support to sales outturns, Obviously, depending on the overall market backdrop. David, I'll just think in terms of margin, obviously, We're pretty confident in our gross margin, which is underpinned by our land bank, which has been well rehearsed before. But we are making further investments in the business in terms of IT, In terms of group support facilities, 6.0, the margin, we're pretty confident gross level may tickle back a little bit. In terms of volume for full year 20 Wendy, obviously, I'm not going to give guidance, but what I would say is that the market is very resilient. We've made really good progress in restocking our shelves And if the WIP investment is there, then we would see the opportunity for volume to take a look. But this isn't something that we're going to put before customers. Our priority will be put customers before volume. However, if the market conditions are there, we believe we have the outlets in place And the whip in place to take advantage of that. Thank you very much. Very clear. Thank you. Thank you. Our next question is from John Bell from Deutsche Bank. Please go ahead. Good morning, John. Yes. Good morning, Dave. Good morning, Mike. Just one question really around that might have 2 parts, but around HBF star ratings, you'll be pleased to hear. Could you tell us and this is the first part. Could you tell us the kind of current run rates and not the trailing quarterly Right. But what you're seeing from the very latest data in front of you? And then the second part of that question is, In terms of the trends that you've seen as part of the improvement, what can you tell us Persimmon versus Charles Church, North versus South, any granularity you can give us there? I think the first thing is the story. What I can tell you is we believe we've got over 90% of our responses in now. And what I can tell you as we've alluded to is that we're currently trending well above the 80% threshold. And what I can tell you as well as the year has progressed, That performance has improved quite comfortably, markedly. So we're very confident that we'll be a 4 star builder And we're pleased with improvement we've seen specifically from January year to date. The trend, as we've always said, the area where we've had the biggest problem with our store rate has been the areas of the highest demand, Which is why we took the view to hold back sites in their areas and what we are seeing in that that's really, really worked well. So some of them are problem businesses that we've talked about before. We've seen marked improvement over the last 6, 7 months, which we're delighted with, and it gives you confidence that the strategy we've got to work in. So I hope that answers the question, John, because I think we're pretty comfortable where we are. Okay. Thank you. Thank you. Our next question is from Amy Igela from Citigroup. Please go ahead. Good morning, guys. Just a couple of questions from me. Firstly, if you could give us some regional color as to the strengths that you're seeing across your regional businesses in terms of pricing and demand? And second, you've touched upon a bit more caution on the land market And that's driven the sort of spend that we've seen so far. My question is really around as we look forward to next year, is this the sort of level that we should be expecting going forward? And lastly, on the sort of Definitely of sales releases, I mean, could you talk about the sort of units that you are with at an advanced build stage as we stand today, Which could potentially come into sales release next year. I'll deal with the first two if you want to deal with the Advanced sales. Yes. Yes. So in terms of regional color, I think it's been pretty consistent over the last 2 to 3 years. What we're seeing is Southeast has been a little bit more difficult. However, what we find is the real driving point is the product choice and the larger 4, 5 bed product is a bit more difficult. What we know is in our core market areas, even in the Southeast where we have the right product at the right price, the market has been incredibly resilient. So I don't think it's a regional issue. It's more about product issue and product choice, which is driving demand. The second point here is the land market. We've got a very, very strong land market land bank, which we're very proud about, and that gives us optionalities of when we go and buy land and when we don't. And what we've seen over the last 6, 7 months, the land market has become more difficult. And as I've said previously, I'm more than comfortable for all opportunities out there and we still are acquiring land. We're not seeing as many opportunities as what we've seen maybe 2, 3 year ago, But we are seeing enough that we're in our hurdle rates to make us comfortable with what we've got. Looking into 2020, I think a lot will depend upon what happens to the land market. As I've said, if the opportunities are there and it makes sense for the company to buy them, we'll buy them. If they're not there, then I'm happy to see the land market drift back, Land Bank just back. Do you want to do the same on the The stock position, the work in progress all I think as we said at the prelims, we are keen to support the measures with respect to improving quality, delivery dates and service with greater investment in the work in progress. All? We are reminded by the improvements we've seen over recent months that that is a key the drivers of improvement in these areas and obviously puts us in a good position in terms of availability for future sales as well. So I think that we're as Dave already touched on, we're still very keen to invest In work in progress, I think the prelims we were talking about our equivalent units Bill being 19% ahead at that point year on year and we want to continue To develop that. So I think, we would hope to be in a slightly stronger position than that come December. Can And I think that, that means that perhaps some of the cash that is released because of slightly lower land invested position that Dave just touched on will be reinvested within work in progress To the maybe tune of another, I don't know, €30,000,000 €40,000,000 €50,000,000 it's hard to predict exactly, but all That sort of level that we would expect come December. So the direction of travel is we want to continue Thank you. Thank you, Ovi. Our next question is from Aynsley Lamond from Canaccord. Please go ahead. Thanks. Good morning. Most of mine have been asked actually, but just on the land spend, obviously, you mentioned you find it a bit more challenging to find opportunities. Does any of the kind of low land spend reflect a bit more caution just ahead of the election. Obviously, sales rates are holding up, but are you just feeling a little bit more cautious as you head into next year As to how kind of resilient the market remains. And then just on given the comments you just made about WIP and cash, I mean, any guidance around net cash, I think roughly €800,000,000 I think you kind of said you were okay with it the half year. Is that still looks Yes, Angela, I think just to jump in there, I think that's about right still. I don't think we'd be pointing A significantly different number on the cash side. And I think on the land spend, I think, yes, We are being a bit more cautious. Dave, if you I think We're being more cautious, but we're still following our rules in terms of what we require from a land deal. And that the NIM rules effectively mean there's 1 or 2 less opportunities around at the moment. What we are confident about is the land deals we are actually doing are the right deals. There may not be quite as many of them, but I've got that luxury to pick and choose because of the strength of the land bank. So a lot will depend on what the market is like 2020, if it has good and compelling land deals there, obviously, we'll buy them. If it's not the deals that meet my criteria, then I'll happy to see the land bank drift back. It's as simple as that really. That's great, very clear. Thank you very much. Our next question is from Andy Murphy from Whitman Howard. Please go ahead. Good morning, Dave. Good morning, Mike. I've got a couple of questions, if I may, really around customer service. Good morning, Andy. Hi. Really around customer service. So can you just flush out the investment of £15,000,000 that you're talking about? Can you perhaps tell us how far that's going to go, what incremental investment may be required next year or do you drop away If volumes drop away, and can you perhaps talk a little bit about the milestones that you're looking for? Because I noticed in the statement you were saying that stays or whether it's more of a got more of a temporary nature. I think I'll leave it there. Yes, thank you. Those two please? Yes, Alst, I'll take that. I think the €15,000,000 is an annualized estimate of cost for are investing in the customer care side and quality assurance in terms of site additional site supervision. And just to sort of provide a bit more color on that, I think Free handover measures are critically important as we all know. And I think that we've looked at process and what we decided to do was puts an additional layer of assurance into the pre handover process in terms of construction. And that's involved establishing a new independent quality build construction quality inspection team, Whereby we're going to we have now almost fully recruited across the business, 1 skilled and experienced inspector that will be eyes and ears additional eyes and ears on-site, helping to train and manage process on-site in tandem with our existing site management teams. So part of the investment is going into that pre handover construction quality assurance process. And then similarly, as the other part is going into the post handover, Customer support, maintenance, customer care, service team, where we have invested in 4 to 5 additional heads within each of our 31 businesses to ensure that customers receive The level of service that we would want to deliver in terms of providing A better quality overall service level together with dealing with any And it's important to link this to the retention that we've introduced as well. The retention is fundamental to Changing behaviors in our business, it's going to be very visible for us. So, for example, a site manager that is trying to be helpful hand on heart dealing with customer query, book perhaps is dealing with our with vested intentions and what have you. Then the retention is going to be very visible. We're going to be able to manage that. I think the important point here is Andy, We set out quite clear in our customer care improvement plan, we have 3 moving parts. The first moving part will reduce volume. The second moving part will be an investment And the 3rd moving part of MedWhip. But that's just not it's more to it than that. We believe improving customer care is not just about the quality of the house. We've invested in other things, for example, the retention. We believe it's very important that we empower our customers and improve customer rates. We're delighted we immediately introduced that in 1st July that's empowered our customers. Another example, we believe it's very important that our customers have a right to model technology when they move into a house. We believe Internet is a 4th utility. We believe that when they move into that room, should access to FullFiber, and we're delighted we've been able to introduce that as part of our customer care improvement plan. We're in the process of introducing a portal, all For example, which means customers can go online, not just up to the point of completion, but after completion. So there's a lot of moving parts of our customer care improvement plan, And we're delighted with how that's been implemented and it's working, especially when some of these are only just bedding in now or about to take effect. Okay, Andy. Yes. Just to clarify, the $15,000,000 is that kind of a fully loaded cost because you're talking about additional investments. Is next year going to be 15 plus just inflation or plus No, 15 is our best estimate of The cost at this point for those measures. Right. Thank you. Cool. Thanks, Andy. Our next question is from Gavin Jago from Peel Hunt. Please go ahead. Good morning, champs. Good morning. Al? Just the one for me. It's on the HBF ratings again, I'm afraid. I think last month, Bellwave all We're quite candid. Obviously, they're kind of tracking the 5 star build, but said there's obviously a 9 month report, which comes out on customers and they were tracking is something like 79%, and they're obviously looking to close that gap. So it's obviously not just about how the customer feels in the 1st week, but obviously once they've been in the house for some all Where are you in terms of that gap in terms of the 9 month survey? And how comfortable are you that you can close that gap to ultimately It'd be a 4 or 5 star builder people moving into the house and obviously after a long period as well. I think it's a fair point. And one of the things I've introduced And we're in the process of looking at how we engage with our customers, not just after the HBS survey, but after that. And what our portal does is enable customers contact us in the whole 2 year period and we've actually been more positive about our points of contact with the customers. I think it's a fair point, Yourrias. Just like our peers, our rating for the 9 month period is less than what it is at the beginning period. It's something we are focusing on, which is why we're introducing these extra contact points after the through the whole 2 year period. Yes. Okay. Okay. All right. Thanks so much, gents. Yes. Thank you. We have a next ask a question from John Fraser Andrews from HSBC. Please go ahead. Thank you. Good morning, gents. And 2 from me, please. The first is clear, Mike, on the EUR 15,000,000 that that's capped as additional investment in Investment and Customer Care, I didn't quite understand on the EUR 140,000,000 WIP. Is this a sunk cost? And you mentioned it might increase. Or are you going to release some of this WIP as you get more confidence and that will feed into volume growth. That's question 1. 2nd question, in the regions, if I can just pick up on one of the previous questions. I hear what you say. You may not have had a chance to have heard about conference call this morning from a deal that was just announced in the sector, but the comment there was and this is these are Southern orientated builders, the comment was there's been a bit of price weakness in the South, not a lot, but a bit. But also there is they're now tracking at lower build costs in current trading since the half year. So if you could share a bit more granularity all on those measures in the South, please. Well, I'll deal with the second point and make them deal with the first one. We've been consistent for some day in the South. A lot depends on what product you've got. Obviously, I don't know what my peers have been seeing. What we are experiencing is if we've got the right product, which we've placed into the marketplace with where the gross demand is, the price has been incredibly resilient. If you've got larger 4, 5 bed product, which we don't have a lot of, then it's under a lot more pressure price wise. In terms of build costs, Alst? I think there's no doubt that price inflation is eased. Whether it's actually coming backwards or not, I would tend to suggest maybe the cost may be higher than the starting point. From what our starting point of our build cost, we believe that inflation price inflation is going to be a lot less than what it was last year. We would maybe think about 1.5%, 2%, maybe it's a bit more than that as a push. But there's no doubt that build costs start to ease a bit specifically around the labor element. And is that regional, Dave, or It's across the whole country. Right. It's across both countries. On the WIF point, John, I think, as we said earlier, We're not looking to release cash from WIF at this point. We would expect a bit of further absorption of cash Into work in progress come December, maybe sort of €30,000,000 to €50,000,000 around that sort of range. And does that have potential to be released into next year? Yes. We want to continue to support our customers with greater build. So I think a higher carried level of work in progress will be more of a permanent feature. If you look back at history, We've been sort of 30% to somewhere between 30%, 33% of sales on a look back of sales with respect To current work is where we would have been. I think since certainly In over the last sort of 3 or 4 years, we've been a bit thinner than that. And we have thought from time to time about Not being able to get enough work in progress invested. And obviously, that's tied to the sales release So I think it will be more of a permanent feature in terms of carried investment in work in progress moving forward. And the nice thing about that is, we believe that we've got the surplus cash on the balance sheet, Alst? We think that's the best investment to do with that to improve our customer care. But the point is if the market was to turn and obviously that cash would come available, but volumes drop. All? I think the moving part on that would be volumes rather than us wanting to reduce the WIP. I think that's a long term commitment from the company. Will want to be running 33 percentage in the future. Understood. Thank you. Thanks, John. Cheers, Joe. We have a next question from Arnaud Lehmann from Bank of America. Please go ahead, sir. Good morning. Can you hear me? We can, yes. We lost you, Arlene. Excellent. I don't know what happened there. Sorry about this. Scarlet Pimminal. Al? All right. I'm back. Good morning, gentlemen. Three questions, if I may. Firstly, I'm afraid another follow-up on the HBA rating. So you said you're trending at a solid four star. I would assume that somewhere between low 80s, mid 80s. Alst, is that the end of the road for you once you get a full year 4 star rating? Are you happy with that? Or conceptually, Would you keep investing in the business and try to and customer care to try to get toward 5 stars? I'm Saying 89 or 91 will make a big difference, but will you continue beyond 2019 to invest in customer care? That's my first question. My two other questions are more, let's say, top down. And firstly, on the combination that was announced this morning between BOVIS and Linden Homes, I'm assuming they are decent competitors for you in some regions. Do you see that as an opportunity? Maybe they're going to be focused on the integration, maybe a bit less competition on the land I mean, what's your reaction to this announcement? And lastly, very high level, but if we were to get after the election some sort of coalition government laid by labor, What would you expect would be the impact on Persimmon and the industry? Maybe a bit more housing units in the mix, maybe some changes to Help to Buy. Do you have any views on that? Thank you. Well, I'll deal with the 3. I think the HPF rate, of course, we want to continue to improve. And as we sit here at the moment, what is encouraging, we've made these strides and made these improvements already. And we have been trending very much higher than the thresholds in the last 6 months. And the good thing for us, a lot of our initiatives hasn't even taken effect at the moment. For example, the retentions only came in on the 1st July. For example, Fiber Nest is only just starting to take effect. For example, our customer portal is about to be introduced. So there's a number of initiatives that's in the process of happening. For example, our 2 year contract period, which we talked about previously hasn't taken effect, which is about to take effect. So I'm pretty confident that we've got the right infrastructure and implementation plan in players to see improvement and that we will see further improvement next year. In terms of Bravis, I don't know a lot about the business. It's not something we don't tend to operate in our core areas to that extent. I wouldn't say they were a major competitor. I tend to focus more on what we do and let them do what they do. And in terms of government policy, obviously, I think whichever party is in power, I think both are very, very supportive of new housing. I think it will be a fair comment to say that the Labour Party we've been encouraging more social housing and encouraging more housing in general. So I think it would create new opportunities forward, which we look and work with the government to try But I don't see it as a particular threat because I think both companies both political parties are supportive of Neuhausen. Okay. That's very clear. Thank you very much. Okay. Thank you. Thanks, Thomas. Thank you. We have a next question from Will Jones from Redburn. Please go ahead. Thanks. Good morning, guys. I think I've actually 4, sorry, if I can, but hopefully quite quick. 4. Apologies. The first is around the sales rate. Obviously, in the year to August, you've been down about 5% like for like per site. Your comments for the second half imply you've been slightly up, I guess, since that period. So a reasonably big change in the year on year, what do you think is behind that? Is it the comparative seizing? Is it the company getting beyond, I guess, the worst of the PR issues maybe? Or is it The market itself, but just perhaps exploring what's quite useful change for you there. The second was just, I guess, digging a bit further on the price side of things. I think you referenced somewhere around 1% to 1.5% is where you thought your kind of like for like pricing was in terms of year on year. A couple of months back, how would you see that equivalent change that I appreciate if we're talking small numbers, but perhaps a reference to a private order book selling price as well might be helpful in that context. And the last 2, just quick ones, just to confirm, I guess, on the retention program. It seems from what you're saying, but that's been fairly smoothly adopted thus far. Is that correct? And the last one was just to double check around your cavity barrier checks that you were doing, obviously, through the middle of the year. Where are you on that in terms of that process getting complete. Thanks. If you want to view the first two, I'll view the next ones. Yes. On sales, Will, Yes. I mean, for the 18 weeks from the 1st July, If you look at our overall period, our private sales rate per site per week is more or less bang in line with what we achieved Last year, so the comps were a little bit easier. And you're right, up until that point, we were tracking maybe Around about 4% behind. So what's behind that slight improvement? It's hard to tell. I think that obviously, it's positioning in the market, the product that we offer, etcetera. But it just demonstrates that the market is pretty resilient. Pricing wise, I think your 1.5% full year expectation is still Around about the right position. If you look at the forward position, For example, at November, it's telling us the same sort of story in terms of pricing progression. So I think that is a similar sort of position. All I mean retention wise Sorry, Mike. Just jump in there. Sorry, Mike. Is that the 1.5 is kind of pure, is it rather than much in there in the way of what did you say? Yes. I mean, I'm just talking about private sales there. So that doesn't include any effect on So within the private, yes. Yes, there's no real I mean, we've not been Doing any large bulk deals on PRS or investor sales or anything like that. So there's no real Major changes to the mix within that, no. Okay. Thank you. And in terms of the retention, Yes, it's been rolled out on the 1st July. We've had obviously, it takes a bit of time because there's only reservations from the 1st July, so not that many completions have come through yet. And we're pleased, yes, it's been rolled out very comfortably. So yes, we're making good progress and we're really proud to be leading the industry in what we believe is empowering customers. And in terms of the cavity barrier, the inspections are going on. We've carried out over 14,000 now, and we'll continue to carry on out to what confident that any potential people being captured that may weather may be missing. Thank you. Thank you. We have a new question from Glynis Johnson from Jefferies. Please go Good morning. Good morning. Good morning. Good morning. I think you may have already been asked that this question is normally asked right at the very beginning. Your order book, I wonder if you can break out private And affordable for us, just so we can see how things have been progressing. Do you want to get that, Mike? Yes. I mean, I think looking I I mean, obviously, what we're saying is that we've got about £950,000,000 of sales sold forward into Beyond the current year. Within that, volumes are around about 5,900 units in total and that compares with about 6,000 or so this time last year. The mix is slightly different. On the private, we've got about 2,150 within that sort of 5,009 As against just shy of 2,600 on the private this time last year. So the private sales are a bit lower, but sort of count to as a counterbalance, we do carry a bit more Affordable sales in that forward order book, obviously, that's the missing number there to get you back up to the around about 500, 900. So more strength in the social side, A little lower on the PD, the private sales side. And pricing within that PD is running sort of 2%, 2.5 ahead of this time last year, albeit obviously it's a thinner population show. So I wouldn't reiterate comments earlier around 1%, 1.5% as a guide for the future perhaps. Orest? And on the side, again, sort of 3%, maybe 3%, 3.5% stronger price year on year in the forward sales. So, bit of a mix change, but not too dramatic in terms of absolute numbers And still a bit of firmness in pricing in terms of outlook. So, yes, it's a continuation of what we've seen through Sort of the second half trading so far really. And just as a follow-up, the strength in terms of the so short An affordable element, is that about you changing how far ahead you contract on some of these sites? Or is it more about new site openings, did that affordable element tend to be reflective of when you open sites? I think it's more the second factor. It's more to do when we open sites, Because obviously, we've released a lot of there's a lot of states we're building on where we're taking the HCA sales, but we haven't actually released them for private. So I think it's more of that factor than anything else. So if I'm not releasing certain sites till they get to 50% we've contracted with the AGR, but we haven't actually leased the private. So that's probably distorting the picture as much as anything. Thank you. Great. Thank you. Thank you. We have no additional questions for the moment. We have a question from Charlie Campbell from Liberum. Please go ahead. Thank you very much. This is I'll try Campbell. Just one more question really, just on the retentions. And just wondering what you're hearing from sales teams on the ground as to whether this is something that customers are interested in or not and whether it's kind of a sales advantage that you have the scheme in place and others don't, just kind of what's been the on the ground reaction from salespeople? I don't think it's been a sales advantage. I think it's more fundamental about having the right product at the right price, but customers have been pleasantly surprised when they know it's available. I don't think it's a driver that suddenly made people reserve our houses maybe compared to our peers. But when they knew we were actually offering it, they're pleasantly surprised and I think it's a real benefit and I think they're over the moon, I suppose, that they've been empowered. Okay. It's good to hear. Yes, thank you. Thank you. Thank you. We have no other questions for the moment. Okay, just to quickly wrap it up. Thanks for all the questions. Just to be clear, the fundamentals of the business are incredibly sound, But especially the strength of our land bank and that in conjunction with our customer care improvement plan where we're getting real traction and our additional initiatives that we've introduced and are about to introduce in relation to the retention, fiber nest, our customer portal, it Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.