Hello, welcome to the Persimmon Trading Update Analyst Conference Call. Throughout the call, all participants will be in a listen-only mode. Afterwards there will be a questions and answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present David Jenkinson, Group CEO, and Mike Killoran, 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 is we'll open with a quick update and a quick summary of two or three 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. 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, in the HBF quarterly review, we've achieved a four-star rating. We're currently trending well above the threshold for a four-star rating.
We're also delighted that the business is producing fundamentally sound financial results, even though we're being able to improve our customer care performance. Now, as usual, I'll open up for any questions that anybody may want. Hello?
Thank you. Yes, I will open up for the Q&A now.
Thank you.
Ladies and gentlemen, if you wish to ask a question, please dial zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Thank you very much. We have a first question from Arnaud Demart from Bank of America. Please go ahead.
Morning, Arnaud.
Just a second. I think Arnaud just left the call. I'm very sorry for this. We have a question from Greg Halki from UBS. Please go ahead.
Morning, Greg.
Hello.
Morning, Greg.
Hi. Good morning. I'm here, so all right.
Hi, Greg. Are you okay?
I'm all right. You?
Yeah, fine thanks.
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 a kind of similar decline in H2 in terms of volumes. 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. Secondly, if you could just confirm 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.
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 WIP 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, Killoran, maybe if you want to do the first two, and I'll answer the third one.
Okay. Yeah, 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. I think the impact will be a little lighter than we saw in the first half. I think we'll see an increase of the first half being delivered in the second half, which we say in the statement. 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.
I think the Yes, a little bit down on the comparative for the second half, where we did, from memory, around just between 8,300-8,400 in the second half of last year. We'll be a bit down on that, but we're not expecting to be down by 6%. Maybe, I don't know, 4% or 5% perhaps, against the comparative, but obviously ahead of what we 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 challenging. We talked at the prelims about we're seeing increased visibility of available trades, particularly at the front end of development process in terms of ground worker skills and perhaps bricklaying availability.
We continue to see that develop a bit more. I think, if 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 were talking about at the start of this year. Perhaps that would be maybe 2%, 3%, 12 months out. Obviously, there are some headwinds there in terms of 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. We need to watch how the market develops from here. Indeed, at the higher price points, we're seeing a bit of a more challenging market, a bit more incentivization. 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. A little bit more incentivization, which obviously nibbles away at the margin a little bit. 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. Nothing substantial. Just to point on the later sales release to moving on to future sales prognosis. I think obviously sales outlets are important. Part of the measures that Dave has been leading in terms of more disciplined sales release has meant that there has been a reduction in our active outlet numbers. You can see in the statement that we're up about 350 active outlets. In the first half of this year, we were actually off 345.
We're hoping that come the turn of the year, as those comparatives roll out, we'll see a bit more strength in the outlet numbers on a like basis, if you will, because we'll be running against that 345 active outlet comparative come the first half of next year. That should provide a bit more support to sales outturns, obviously depending on the overall market backdrop. David.
I just think in terms of margin, obviously, we're pretty confident our gross margin, which is underpinned by our land bank, which has been well rehearsed before, we are making further investments in the business in terms of IT, in terms of group support facilities. The margin, we're pretty confident gross that may tickle back a little bit. In terms of volume for full year 2020, obviously, I won't going to give guidance, what I would say is that the market's very resilient. We've made really good progress in restocking our shelves, if the WIP investment's there, we would see the opportunity for volume to tickle up. 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 WIP in place to take advantage of that.
Thank you very much. Very clear.
Thank you.
Thank you. Our next question is from Jon Bell from Deutsche Bank. Please go ahead.
Morning, Jon.
Yeah, morning, Dave. Morning, Mike. Just one question really around HBF star ratings, you'll be pleased to hear. Could you tell us, and this is the first part, the kind of current run rates, so not the trailing quarterly rates, but what you're seeing from the very latest data in front of you? 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 and what I can tell you, we believe we've got over 90% of our responses in now. What I can tell you, as we've alluded to, is that we're currently trending well above the 80% threshold. What I can tell you as well, as the year's progressed, that performance has improved quite comfortably, markedly. We're very confident that we'll be a four-star builder in this reporting year. We're pleased with improvement that's been specifically from January to yesterday. The trend, as we've always said, the area where we've had the biggest problem with our star rating has been the areas of the highest demand, which is why we took the view to hold back sites in them areas. What we are seeing is that's really, really worked well.
Some of them are problem businesses that we've talked about before. We've seen marked improvement over the last six, seven months, which we're delighted with. It gives me confidence that the strategy we've got is working. 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 Ami Galla from Citigroup. Please go ahead.
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. 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? Lastly, on the sort of deferral of sales releases, 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.
Yeah.
Yeah. In terms of regional color, I think it's been pretty consistent over the last two to three years. What we're seeing is the South East 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 South East, where we have the right product at the right price, the market's been incredibly resilient. 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 you raised is the land market. We've got a very, very strong 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.
What we've seen over the last six, seven months, the land market has become more difficult. As I've said previously, I'm more than comfortable for, say, our land bank drift back to a more normal period, normal size. We are still seeing opportunities out there, and we still are acquiring land. We're not seeing as many opportunities as what we've seen maybe two, three year ago, but we are seeing enough that we're at our hurdle rates to make us comfortable 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 they make 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 drift back.
Do you want to do the third one, mate?
On the stock position, the work in progress position, Ami, 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. We are reminded by the improvements we've seen over recent months that that is a key driver of improvement in these areas, and obviously puts us in a good position in terms of availability to support future sales as well. I think that we're, as Dave's already touched on, we're still very keen to invest in work in progress. I think at the prelims, we were talking about our equivalent units of build being 19% ahead at that point, year-on-year, and we wanted to continue to develop that.
I think we would hope to be in a slightly stronger position than that come December.
I think that means that perhaps some of the cash that is released because of a 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, GBP 30 million, GBP 40 million, GBP 50 million. It's hard to predict exactly, but that sort of level that we would expect come December. The direction of travel is we want to continue to strengthen the platform moving into the spring season next year.
Thank you.
Thank you, Ami.
Our next question is from Aynsley Lammin from Canaccord. Please go ahead.
Thanks. Morning.
Morning.
Morning. Most might have been asked, actually, but just on the land spend, obviously, you mentioned you're finding 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? Just on, given the comments you just made about WIP and cash, any extra guidance around net cash? I think roughly GBP 800 million, I think you'd kind of said you were okay with at the half year. Is that still looks like
Yeah. I think just to jump in there, I think that's about right still.
Yeah.
I don't think we'd be pointing to a significantly different number on the cash side. 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. Them rules effectively mean there's one or two less opportunities around at the moment. What we are confident about is the land deals we have actually done are the right deals. There may not be quite as many of them, but I've got that luxury to pick and choose because I've got the strength of my land bank.
A lot will depend on what the market's like in 2020. If there's good and compelling land deals there, obviously we'll buy them. If it's not the deals that meet my criteria, then I'm happy to see the land bank drift back. It's as simple as that, really.
That's great. Very clear. Thank you for that.
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. Can you just flesh out the investment of GBP 15 million 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? Does it drop away if volumes drop away? Could you perhaps talk a little bit about the milestones that you're looking for? I noticed in the statement you're saying that there perhaps may be some incremental investment, so perhaps a little bit of color around the magnitude of that and whether that's going to be sort of just incremental cost that stays or whether it's got more of a temporary nature. I think I'll leave it there. Yeah, thank you. Those two questions, please.
Yeah, Andy, I'll take that. I think the GBP 15 million is an annualized estimate of cost for investing in the customer care side and quality assurance in terms of additional site supervision. Just to sort of provide a bit more color on that, I think pre-handover measures are critically important as we all know. I think that we looked at process, and what we decided to do was put an additional layer of assurance into the pre-handover process in terms of construction. That's involved establishing a new independent construction quality inspection team, whereby we have now almost fully recruited across the business one skilled and experienced inspector that will be additional eyes and ears on site, helping to train and manage process on site in tandem with our existing site management teams.
Part of the investment is going into that pre-handover construction quality assurance process, and then similarly, 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 snagging issues. 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. For example, a site manager that is trying to be helpful, hand on heart, dealing with customer query, but perhaps is dealing with that with vested intentions and what have you. The retention is going to be very visible, and we're going to be able to manage that.
I think the important point here is, Andy, we've set out quite clear in our customer care improvement plan. We have three moving parts. The first moving part, we've reduced volume. The second moving part, we made an investment, and the third moving part, we made WIP. There'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 vitally important that we empower our customers and improve customer rates. We're delighted we were able to introduce that on the first of July, and it's empowered our customers. Another example, we believe it's vitally important that our customers have a right to modern technology when they move into a house. We believe internet is a fourth utility.
We believe that when they move into that home, they should have access to full-fibre, and we're delighted that we've been able to introduce that as part of our customer care improvement plan. We're in the process of introducing a portal, for example, which means customers can go online, not just up to the point of completion, but after completion. 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.
Is that okay, Andy?
Yes. Just to clarify, the GBP 15 million, is that kind of a fully loaded cost?
Yep
additional investments. Is next year going to be 15 plus just inflation or plus?
No. 15 is our best estimate of 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.
Morning, chaps.
Morning.
Morning.
Just the one from me. It's on the HBF ratings again, I'm afraid. I think last month, Bellway were quite candid. They're kind of tracking as a 5-star builder, but said there's obviously a 9-month report which comes out on customers, and they were tracking at something like 79%, and they're obviously looking to close that gap. It's obviously not just about how the customer feels in the first week, but obviously once they've been in the house for some time. 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 have, be a 4 or 5-star builder at 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 are in the process is looking at how we engage with our customers, not just after the HBF survey, but after that. What our portal does is enable customers to contact us in the whole two-year period, and we've actually been more positive about our points of contact with the customers. I think it's a fair point you raise. Just like our peers, our rating for the nine-month period is less than what it is at the yearly period. It's something we are focusing on, which is why we're introducing these extra contact points through the whole two-year period.
Yeah. Okay. All right. Thanks so much, gents.
Cheers.
Thank you. We have a next question from John Fraser-Andrews from HSBC. Please go ahead.
Thank you. Good morning, gents, and two from me, please. The first is Kieran, Mike, on the GBP 15 million that's capped as additional investment in customer care. I didn't quite understand on the GBP 140 million WIP. Is this a sunk cost? You mentioned it might increase, or are you going to release some of this WIP, as you get more confident and that will feed into volume growth? That's question one. Second 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 a conference call this morning from a deal that was just announced in the sector. The comment there was These are southern-oriented builders. The comment was there's been a bit of price weakness in the south.
Not a lot, but a bit. Also, they're now tracking at lower build costs, in current trading since the half year. If you could share a bit more granularity on those measures in the south, please.
I'll deal with the second point and Mike can deal with the first one. We've been consistent for some time 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 most demand is, the price has been incredibly resilient. If you've got larger four or five-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, I think there's no doubt that price inflation's eased.
Whether it's actually coming backwards or not, I would tend to suggest maybe the cost may be higher at the starting point, but 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 a bit more than that at a push. There's no doubt that build costs are starting to ease a bit, specifically around the labor element.
Is that regional, Dave, or I'm assuming?
It's across the whole company.
Right.
It's across the whole company, yeah.
On the WIP point, John, I think as we said earlier, we are not looking to release cash from WIP at this point. We would expect a bit of further absorption of cash into work in progress come December. Maybe sort of GBP 30 million, GBP 40 million, GBP 50 million around that sort of range.
Does that have potential to be released into next year?
We want to continue to support our customers with greater build. 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 somewhere between 30, 33% of sales on a look-back of sales, with respect to current WIP is where we would have been. I think, since certainly, over the last sort of 3 or 4 years, we've been a bit thinner than that. We have talked from time to time about not being able to get enough work in progress invested. Obviously that's tied to the sales release approach that we've already touched on. I think it will be more of a permanent feature, in terms of carried investment in work in progress moving forward.
The nice thing about that is we believe that we've got the surplus cash on the balance sheet, and we think that's the best investment to do. We like to improve our customer care. The point is, if the market was to turn, then obviously that cash would come available.
Yeah
if the volumes drop. 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. We want to be running 33% in the future.
Understood. Thank you.
Thanks, John.
Cheers, John.
We have a next question from Arnaud Lehmann of Bank of America. Please go ahead, sir.
Good morning. Can you hear me?
We can, yes. We lost you earlier.
Excellent. I don't know what happened there. Sorry about this.
It's called a piminal.
All right. I'm back. Good morning, gentlemen. Three questions if I may. Firstly, I'm afraid another follow-up on the HBF rating. You said you're trending at a solid 4-star. I would assume that's somewhere between low 80s, mid-80s. Is that the end of the road for you once you get a full year 4-star rating? Are you happy with that? Conceptually, would you keep investing in the business and customer care to try to get towards five stars? I'm not saying that 89 or 91 will make a big difference, 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. 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 market. What's your reaction to this announcement? Lastly, very high level, if we were to get, after the election, some sort of coalition government led by Labour, what would you expect would be the impact on Persimmon and the industry? Maybe a bit more social 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 three. I think the HBF rating, of course, we want to continue to improve. 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 six months. The good thing for us, a lot of our initiatives hasn't even taken effect at the moment. For example, the retention has only came in on the 1st of July. For example, FibreNest has only just started to take effect. For example, our customer portal is about to be introduced. There's a number of initiatives that's in the process of happening. For example, our two-year contact period, which we talked about previously, hasn't taken effect yet, which is about to take effect.
I'm pretty confident that we've got the right infrastructure and implementation plan in place to see improvement, and that we will see further improvement next year. In terms of Bovis, I don't know a lot about the business. They don't 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. 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 would be a fair comment to say that the Labour Party would be encouraging more social housing and encouraging more housing in general. I think it would create new opportunities for us, which we look to work with the government to try and implement.
I don't see it as a particular threat because I think both companies, both political parties are supportive of new housing.
Okay. That's very clear. Thank you very much.
Okay. Thank you.
Thanks, Arnaud.
Thank you. We have a next question from Will Jones from Redburn. Please go ahead.
Thanks. Morning, guys. I think I've got actually four. Sorry if I can't, but hopefully quite quick.
Four.
Apology. First around the sales rate. Obviously back in the year to August, you'd been down around 5% like-for-like per site. Your comments for the second half imply you've been slightly up, I guess, since that period. Reasonably big change in the year-on-year. What do you think is behind that? Is it the comparatives easing? Is it the company getting beyond, I guess, the worst of the PR issues maybe? Or is it the market itself? Just perhaps exploring what's quite a 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%-1.5% is where you thought your like-for-like pricing was in terms of year-on-year a couple of months back. How would you see that equivalent change today?
I appreciate we're talking small numbers, but perhaps a reference to the private order book selling price as well might be helpful in that context. Then the last two, 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? 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 deal with the first two, I'll deal with the next ones.
On sales rate, Will. For the 18 weeks from the 1st of July, if you look at that overall period, our private sales rate site per week is more or less bang in line with what we achieved last year. The comps were a little bit easier. You're right. Up until that point, we were tracking maybe around about 4% behind. 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, et cetera. 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.
I think, that is a similar sort of position. I mean, retention-wise.
Sorry, Mike. Just to jump in there. Sorry, Mike.
Yeah.
Is that one-and-a-half is kind of pure, is it? Rather than much in there in the way of mix, would you say?
Yeah. I'm just talking about private sales there.
Yeah.
That doesn't include any effect on the HA.
No. Within the private. Yeah.
Yeah. We've not been doing any large bulk deals on PRS or investor sales or anything like that. There's no real major changes to the mix within that, no.
Okay. Thank you.
In terms of the retention, yes, it's been rolled out on the 1st of July. Obviously, it takes a bit of time because there's only reservations from the 1st of July, so not that many completions have come through yet. We're pleased. Yeah. It's been rolled out very comfortably. Yeah, we're making good progress, and we're really proud to be leading the industry in what we believe is empowering customers. In terms of the cavity barriers, the inspections are going on. We've carried out over 14,000 now, and we'll continue to carry out until we're confident that any potential people have been captured that may, where they may be missing.
Thank you.
Thank you. We have a new question from Glynis Johnson from Jefferies. Please go ahead.
Morning.
Welcome, Glynis.
Thank you for the opportunity to be asked that this question is normally asked right at the very beginning. Your order book. 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, mate?
Yeah. Obviously, what we are saying is that we have got about GBP 950 million of sales sold forward into beyond the current year. Within that, our 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 have got about 2,150 within that sort of 5,009, as against just shy of 2,600 on the private this time last year. The private sales are a bit lower, but as a counterbalance, we do carry a bit more affordable sales in that forward order book. Obviously, that is the missing number there to get you back up to around about 500.
More strength in the social side, a little lower on the PD, the private sales side. Pricing within that PD is running sort of 2.5% ahead of this time last year, albeit obviously it's a thinner population show, I wouldn't reiterate comments earlier around 1.5% as a guide for the future perhaps. On the HA side, again, maybe 3.5% stronger price year-over-year in the forward sales. Bit of a mixed change, but not too dramatic in terms of absolute numbers, and still a bit of firmness in pricing in terms of outlook. Yeah, it's a continuation of what we've seen through the second half trading so far, really.
Just as a follow-up, the strength in terms of the social and the 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? Does 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've opened sites. Obviously, we've released a lot of sites we're building on where we've taken the HA sales, but we haven't actually released them for private. I think it's more of that factor than anything else. If I'm not releasing certain sites till they get to 50%, we've contracted with the HA, but we haven't actually released the private. 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. Ladies and gentlemen, if you wish to ask a question, please dial zero one on your telephone keypads. Thank you. We have a question from Charlie Campbell from Liberum. Please go ahead.
Thank you very much. This is Charlie Campbell. Just one more question, really. Just on the retentions. 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 this scheme in place and others don't. Just 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. 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 as compared to our peers. When they know we're actually offering it, they're pleasantly surprised, and they think it's a real benefit, and I think they're over the moon, I suppose, that they're being empowered.
Okay. That's good to hear. Yeah, 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. Especially the strength of our land bank, and that in conjunction with our customer care improvement plan, where we're getting real traction and with our additional initiatives that we've introduced are about introducing relations under retention, FibreNest , our customer portal. It gives me great confidence for the future of the business, not just in terms of our financial performance, but making more further improvement in customer care. Thank you.
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.