Earnings Call: H2 2018

Jan 15, 2019

Earnings release

Hello and welcome to the Persimmon Trading Update Analyst Conference call, all participants will be in listen only mode and afterwards there will be a question and answer session. And just to remind you, this conference call is being recorded. Today, I am pleased to present David Jenkinson, Interim CEO and Mike Killoran, SP. Please begin your meeting. Call, Thank you, Mira. Good morning, everyone, and thanks for ringing in. It's Dave here, by the way. Call, I don't intend to keep you very long, but want to pick up a few key points from our trading update for 2018. Firstly, the housing market in 2018 has proved to be very resilient and has continued to benefit from robust employment levels, low interest rates and the competitive mortgage market, this has supported confidence and sustained customer demand across all regions. This quarter, this has been reflected in our results with revenues up 4% to $3,740,000,000 legal completions increased by 3% year, we expect pretax profits for the full year to be modestly ahead of the current market consensus. This, this is a position we're really pleased with. We also expect to have a very strong cash position balance that generated about £700,000,000 worth of free cash in the year. This obviously gives us options moving forward. We have acquired over 17,000 plots in the year year, we have a strong margin of margin, which at least meet our current expectations. However, at present, we are being very cautious with any new commitments. Finally, we'll be entering the 2019 spring selling season in a strong position with an excellent range of outlets and products to meet housing demand with a strong forward sales position. However, we are not complacent. We are aware that the potential for trading to be different over the next couple of months, quarter, especially against the tough comparables of last year. However, we have plans in place to meet whatever shape the demand is in 2019. Call, I'll now pass it over to all the questions anybody may have. Thank you. And the first question is from the line of Hensley Lamont from Canaccord Genuity. Please go ahead. Your line is open. Thanks. Good morning. And just 2 for me, please. Morning and welcome to the year. Just in terms of trade in kind of last few weeks into the end of the year, did you see any noticeable signs of increased caution? Just a bit more color if you could get on that maybe regionally and What you saw on the ground? And then secondly, you haven't commented on margins, but just wondered what they looked like versus the first half? Are they kind of ahead of what you reported for the first half of operating margins. Thanks. Okay. I'll deal with the first one on trading and I'll get Mike to provide a bit more color on the margins. In terms of trading, sales did drop a little bit earlier than we've seen previously, probably around about the middle of November Compared to normal Christmas slowdown and it did our sales a little bit, nothing material as such. But there was a couple of the Q1, the first one was there was some difference in the phase of our new outlets coming online compared to our older sites. In particular, in 2017, we did release a lot of new sites into the November period, while this time, we've held quite a few back, Which is for a later stage of construction, which has the effect. Obviously, you can either take the sales rates in November or hopefully, we'll pick them up in the spring selling season. The other thing to point out was in 2018, we did have a number of our Tierland sites with a small number remaining Some of the larger 4 bed properties sticking, specifically in the Southeast area, but sometimes across the whole of the country. Quarter, however, it is important to point out our core first time buyer and first time market has proven credibly resilient. We're really pleased with that. We've seen very little dilution even in that Christmas period, and we're pleased with that. And also, our margins and revenues held up very, very well, especially on our newer developments. So we're quite pleased with what we've seen in the last end of the year because some of it was dealt with worse. On the margin point, Aynsley, obviously, we'll provide a lot more color in the prelims in February. I think the directionally, we've pointed to a further improvement Given we're saying that the PBT expectation is slightly ahead of consensus. Our consensus, Just to remind everybody is $1,070,000,000 for PBT in 2018, we expect to, as we said, be modestly ahead of that. This And that is largely there. Given that you've got now your top line, it's largely down to the margin performance. So obviously, you can run your own numbers effectively to give you a feel on that, and we'll give more color at the prelims It was normally in February. That's great. Very helpful. Thanks very much. Is that clear? Yes. That's very helpful. Thanks. Call. Thank you. Next question is from the line of Will Jones from Redburn. Please go ahead. Your line is open. 3, if I could, please. First, just touching on pricing, I guess, on a like for like basis. Perhaps you could just give us A feel of how the experience went on that front through last year and if possible, if there was any differentiation first half And the second around like for like pricing, I appreciate we're talking small numbers properly, but any color there would be great. The second just, I guess, continuing with margins, and you've talked in recent periods about still making some modest margin progress. I appreciate this year has particular uncertainties, but I guess if we were to paint a picture of stable trading, would it still be The expectation that you could make some slight margin progress in 2019. And then just to come back to the issue of capital returns, I think again in previous Update, you talked about looking to review that schedule, I guess, as you go into the full year results. Is that still the plan? Or I guess, would you maybe Put on hold given the uncertainties around Brexit. Thanks. Okay. I'll deal with question 2 on margins and Meg will Give you a bit more detail on the pricing and a bit more details on the capital return. The margins, all things being equal, We're pretty confident we'll be pretty stable, maybe moving forward a little bit. The new sites we're seeing, which we bought. We're very pleased with the margin performance we're getting on there. The current sites were wrong. We've seen them move forward a little bit, but not much. But we still see good opportunity in Monument, which is supporting our margin moving forward. We're not naive. It will depend upon what happens with the spring selling season and what happens with the market in general. We're eagerly looking forward to see what's going to happen in the spring selling season. And I think that sort of links into the pricing view as well, Will, to a degree. And I know you're sort of looking back on pricing, and I think we are pleased with the resilience on pricing through the year. For the full year, we've seen on our average private selling price, we've seen a 2% this 300, Mark. So 2% is in line with what we'd have expected to see given the current market conditions year, we've had on our housing association units Delivered for the full year an average price growth of about 1.5%, so a pretty consistent picture there. But looking forward, obviously, it is, as Dave says, it's going to be interesting to see how The market develops from here on pricing. Common sense, I guess, would seem to indicate where In uncertain times, perhaps, we're going to see a more modest pricing environment There's less opportunity, but as Dave says, we're opening up new sites. And our experience is that we've Being pleasantly surprised in terms of the pricing that we've achieved in those regions. So we're still positive. We've got positive outlook about that. And in terms of incentives, if you bundle incentives with pricing, I think, again, through 2018, once we get to the prelims, I'm sure we'll be saying that to support sales through further incentivization should we feel that, that is required. But again, as Dave said, the offering that we typically make to customers at the lower price points With the range in choice, with the emphasis on smaller product, as Dave was saying, I think we found that To be pretty resilient and robust through 2018. I mean, Dave, do you want to mention capital returns or? Obviously, we're pleased with both the amount of cash we've produced in the period, also that gives you options. At the heart of the Persimmon strategy is that we can Produce dividend through the cycle. Hopefully, not quite there yet at this stage, but we're very confident that we can continue to produce the cash We'll review that as appropriate time in February, Will. Okay, that's great. Thanks a lot. Cheers. Next question is from the line of Jon Bell from Barclays. Please go ahead. Your line is now open. Good morning, Dave, and good morning, Mike. Good morning, Joe. Good morning. I think I've got 3. Firstly, could you tell us the Private sales rate in the second half of the year, please. The second one would be Yes. Just to jump on that, John, before you ask your other 2. Yes. I mean, the sales rate in the second half was about 0.61% against around about 0.63%. So about 3%, 3.5% lower than the previous year. Yes. So Mike, just on that point before I come The other 2, is that probably towards the upper end of the range of the normal H1, H2 variation? I mean, as you say, John, there is that quite notable seasonal difference. Spring is always The best time to sell, and indeed, it tends to be the best time to achieve a bit of price growth as well this History is to go by. But when you compare and we talked about this before, when we compare autumn with spring sales rates into the private market, you'll always find a notable difference, anything between Sort of high teens, 17%, 18% and maybe 22%, 23% lower in autumn Compared with spring, I mean, that is the normal seasonality of the market. So yes, I mean, in 2018, that panned out According to those expectations, so if you will, the market was pretty robust. And as Dave has already said, we started the year last year very well for the 1st sort of 8 to 9 weeks, Which probably in the current context is going to be a challenge. But I think we're going to see probably see a different shape to trading this year, Albeit, maybe that seasonality differential might be more like I'm just looking back 2016, autumn was just 10%, 11% lower than spring in terms of private sales rate. We had a pretty strong autumn season in 'sixteen. So and as Dave said already, the if we see A bit of a relief rally after all this uncertainty around Brexit if we, as a country, reach some sort of conclusion on that, then I think that will probably influence the shape of not just housing market trading, but perhaps, Yes, well, the shape of other markets as well perhaps, but yes. Okay. My second question might be partly related actually. I wonder whether you could just update us briefly on customer satisfaction scores and how they've been trending. And then the 3rd and final question is, I think you mentioned this impacting the hurdle rates on new land, Whether you could just remind us where they're currently set. Hurdle rates, we're not going to give you our hurdle rate. We're not going to hear you, John. What I can say is that the hurdle rates we're getting, we're at least exceeding on everything we're bringing in and when we release new sites, we are exceeding them. That is the general trend. We're very pleased with what the land we bought. We're being extremely cautious at the moment what we commit to new commitments. So we're being very, very careful in that. We're very pleased with the land bank we've already got, which gives us the position to pick and choose, and that's what we're doing at the moment. In terms of customer care, as you know, we went through the Investors Day and we talked about a lot of new initiatives that we plan to do. The initiatives are starting to bed in, but it's too early to tell whether it's going to be in a place not yet from where we were previously. Okay. Thank you. Thank you, Alex. And next question is from the line of Gregor Kuklitsch from Please go ahead. Your line is now open. Hi. Good morning. I've got a A few questions. So the first one is just on the order book. I think you said it's up 3%. Looking back, I think in November, it was up High single digit, I want to understand whether you think that order book growth is a reasonable expectation for the revenue trajectory this year? Or is this something we need to consider on-site openings? I think you mentioned Some delays into or perhaps postponement rather into the spring at a later stage of build, so I want to understand that. The The second is on cash. Can you help us a little bit on some of the moving parts? Obviously, the profit you've guided, but if you could help us how much you've actually paid as regards To the LTIP tax settlement, I think you talked about EUR 220,000,000 in that neighborhood Before, I don't know if that's what actually happened. And then similarly, whether you had a I mean, my analysis suggests there's been Significant buildup in work in progress. I just want to understand if that's correct. And then the final question is just to go back on margins. So working Through the math that you've given us, we obviously can conclude margins somewhere north of 31. Is that the reference point you're talking about when you're talking about kind of holding the line or maybe growing it a bit just for the avoidance call. I think just on that margin point, Greg, if I can just jump in there. I think, as they will provide detail in February. I think that Your sort of view in terms of The continuum from the lead that the second half gives you is, I think, in the right area, as I say, we'll give more color on that at the prelims. But I think that, As Dave has already said, we are pleased with the quality of the land bank That we have, we went through this in some detail at the Capital Markets Day, as you know. And we think The margin rates that we're delivering are sustainable, everything else being equal. Life obviously tells you that everything doesn't remain equal all of the time. And that's why Dave was saying that It's always difficult to look ahead at this time of the year for the next year, and it's probably a bit more difficult In recent times at this point with the challenges that face the country, but I think that we are very confident about the quality of the land that we have to support. If We see a stable market, then we'd expect similar performance in terms of the profitability. And as Dave has already said, hopefully, a little bit of improvement Coming through as fresher land matures and comes through the legal completions. So I think we are very confident about our margin trajectory based on this The recent years work in terms of embedding the quality land in the land bank that We provided quite a lot of color at the Capital Markets Day. In terms of the stage of build, That has been as much about trying to improve our completion on dates for our customers. It's proved to be a little bit of a carry's heels for the company. We missed dates, unfortunately. So what we made the decision to do is try and then some companies are strong a little bit is to give them a bit of relief by delaying the release date, so they'll have to build on much It's rather than any trading difference in terms of why we've held the sales back there, I guess? Yes. Yes. And I think the order book growth, well, If you look at the pattern of where we are, say, midyear to end of year, because legal completions Certainly, on private sales are always higher in the second half of the year. Your forward order book is always A little bit stronger midyear because of the spring the better spring sales season. So again, that To a large degree, so I wouldn't sort of read into too much. I I mean, when you look at the forward order book of December, our PD volume is about 2% down At about 3,750 forward sold units, it's about 70, 80 units down on the same point last year. So it's yes, it's slightly down, but that really reflects the We've been tracking 2% to 3% down on private sales rate through the whole of last year really compared with the previous year. So yes, I mean, I think that we've got we've still got a very strong forward order position to take into 2019. But obviously, it's important to see how the spring season develops from here. And in terms of the cash, I guess, it is correct. Yes, we did settle the LTIP. I'll give you the exact numbers involved. Yes. The cash effect on the LTIP in 2018 because like I mean just to remind everybody that the Board Sort of separately evaluated the opportunity to net settle Altip against issuing more shares. And we've reported on this previously in some detail. So we concluded that it was the correct thing to do looking at the surplus liquidity the business had and To use some of the cash, the liquidity, the surplus excess liquidity that we had, we've got To net settle, the LTIP. So in 2018, we've actually Paid $160,000,000 with regard to net settling, the exercised options in 2018, obviously, there's still an expectation that Some outstanding there's about 3,000,000 outstanding options at the end of the year that still have to be exercised. And that is likely to give rise to another, say, $45,000,000 of cash net settling in 2019, so should All those options be excised in 2019. So there's a bit of a timing difference there, slightly lower in total from the number That you mentioned earlier, and that's because obviously the price the share price fluctuations. I mean, it's more or less in line, but slightly lower. But there's a little bit of a timing difference there between 2018 2019 with So another $40,000,000 to $45,000,000 to pay out likely in 2019. Quarter, we've also paid employers, National Insurance Contributions on this, the LTIP as well in 2018, which amounted to about £47,000,000 So that's gone to the treasury as well. So that was a cash outflow through 2018 as well. The land credit, is that it again? Land creditors, well, again, we need to cut the balance sheet, which we're on with at the moment. But the indication now is that £15,000,000 to £20,000,000 lower than where we closed last year. So yes, that is one part of the working capital movement, yes. Excellent. Thanks a lot. Thanks, Birgit. Next question is from the line of Charlie Campbell from Please go ahead, Charlie. Your line is open. Yes. Thanks a lot and good morning. 3 from me, Please, so the you've talked about 15 sites opening in the spring with sort of more advanced build programs. This I guess that's to kind of to try and offset potentially weaker markets. I mean, do you think that will widen beyond 15 outlets? So Should we be thinking our cash flow numbers for 2019 that there might be sort of quite a lot more work in progress as we go through the year? It depends on the market, but is that something we ought to think about? 2nd question on build cost inflation, just sort of what it was in 2018, what you think it might be in 2019? And then lastly, just on mortgage availability, just sort of if you've seen any changes in Q4. Firstly, I think in terms of the WIP question, I don't think we will see anything. It's more about we've identified those companies which are struggling a little bit to meet our requirements in terms completion date, so what we've done is to try and provide more certainty to customers. It's not released the plots till they're much further on because obviously, Further on with the build dates are much more reliable. You can hit the dates for the actual customers. So it's as simple as that. We have nothing More material, which will probably spread to the rest of the company to them, only then specific companies where we've identified a little bit of a problem. Yes. Okay. In terms of build cost, we're pretty pleased with what we've seen in 2018. We've been able to control it between what, roughly 3% to 3.5%, Which is pretty much in line with what we forecast. Obviously, there's a lot of things we've done in that. We've been very successful at mitigating labor costs, as you know, and various other costs, although we do see a little bit potential for a bit more costs around materials with coming into Brexit, quarter, we continue to see opportunities on that. However, as you know, we've had a bit of self help with that with things we've done ourselves. We're pleased with the way the Brick Factory is doing. The tail The tail manufacturing should be starting to do it very soon. And we've also got our own space force, so we have plans to mitigate that. And with all that plans, we're spending a lot of time on concentrating on things outside of the fabric, more to do with externals and abnormals, We've just seen some good savings following 2018. We plan to roll that out more in 2019. So what we'll probably think is it'll be similar for 2019, maybe to edge up a little bit Depending upon the materials, but in terms of build cost, I think probably similar to what we've seen in 2018. What was the third question, sorry? Is there mortgage availability? Just any changes in the 4th quarter? Just to make sure that behavior anyway. Not at all, no. Yes. Okay. Thank you very much. Thank you. Yes. Thanks, Johnny. Next question is from the line of Andy Murphy from Bank of America Merrill Lynch. Go ahead. Your line is open. Good morning, gents. Two quick ones, if I may. Just following up on the original dividend question. Your special at the moment lasts until full year 2019. When do you anticipate assuming that Brexit doesn't offset the apple cart, when do you make a decision or announce A decision about what you would pay in terms of a special for full year 2020. And then the second question was on just Average sales outlets for 2019 versus 2018, what sort of level of growth would you anticipate on average for the year? Quarter, thanks. Then the first one in terms of dividend, obviously, as we've said, the cash position gives us options. We always review this at the February Board meeting, and we'll come back and update you on at the February trading account, what we think we're going to do. But we do have options, as we've said. In terms of outlets, we probably think they're going to be quite flat, maybe it's tickling forward a little bit. I don't know if you want to add a bit more color on that, Mike? Yes, I mean, it's always difficult, isn't it Dave? I mean, we do get continually frustrated in opening new outlets To time frames that we'd like to clear enough reserve matters and the like is a continuing frustration to a degree. But we do have good visibility of outlets. We opened just over 180 new outlets through 2018, And we'd be hoping to deliver, I guess, a similar number through 2019. But again, it's always the dynamic between the rates at which you can Open outlets and voice of the sales rates from the existing in terms of when they close. So the sales rate that we achieved through 2019 will be important in determining the overall outlet position as well, but we are pleased with the Spread and quality of the outlets that we've got, and indeed, we think the Q1, We'll be opening about 55 new outlets or so, which is quite strong for that period, maybe this 5% to 10% ahead of the rate that we opened last year, but it's going to just be a little bit more back ended, perhaps late February into March to make sure that we've got good availability of the products as we've already touched on. In terms of the clarifying the capital returns, well, Dave's really already answered that in terms of We look at it continually, obviously, but we conclude on the run up to the prelims and the announcement in February. So that's the we're not planning to break from that frequency Next question is from the line of Kevin Kamek from Sync. Please go ahead. Your line is open. Thanks and happy New Year to you both. Good to you, Kevin. Hi, Kevin. I think I've got 2. Firstly, Just in terms of clarifying the later release in production terms, obviously, You've talked through how that impacts the whip you carry at the year end, etcetera. But Is there also an element of that which is reflected in your slower forward sale? I mean is that something that Structurally, would take a full year to stay in the number? Or does it actually work its way out Quicker than that or is or basically is that not a factor behind the PD sales rate? No, I think just to answer that, Cat, I think your observation is bang on. I think that, obviously, if you're not on release, you're not on release. And you can't take A reservation to add to your forward sales position if you're not on release. So I think that has been an element In terms of the forward sales position, albeit we're quite pleased with the strength that we still have there. This We took the view that to advance the build for releasing probably late February, early March On a number of those sites, it was the right thing to do to ensure that, As I say, we've got good availability and good spot sales at that time. This The spring season will then have matured and be in the right position in our judgment To support our activity at that point. So that tactic, if it continues, will that have this I think We've always won for some time now, we've wanted to get our work in progress It's more advanced, but because we've been selling quite well, it's been a fine balance. I think the Generally speaking, I think the trend, hopefully, will be to carry a little bit more work in progress. So we wouldn't want to see that particularly unwind in a steady state. If we've got stable outlets, Stable sales rates, then I think generally speaking, Dave, we'd want to be seeing a bit more whip on the ground to support sales. But I think it's about where it is in the company and the nature of the states and what the states are and how complicated they are. And we'll look at each one of its individual merits. As a company which we think would benefit from delaying the release, we have more time to build, and it's particularly complicated, and we'll do that. If it's a one which is a greenfield, pretty straightforward, and It's a business which has got a good track record of hitting its date, then we probably would release them. I think it will be too simplistic to think we're going to just carry one approach across the whole country, we look at each individual site at its own merits. Yes. Okay. The other question I had was really, I mean, in your introduction, Dave, you mentioned the word more cautious approach to land buying currently. I wonder if you could define that in practical terms, What that actually does mean for your land bank? Well, you know at the heart of Persimmon, we've got ourselves in a really good position in this quarter, it's at the heart of everything that Persimmon does, and it gives us optionality. It gives us optionality that when opportunities are there, we have the cash to grow and buy land. If compelling opportunities came across our desk, then obviously we'd buy them. If the opportunities were there and in the current market, we're being very cautious, so we don't need to go and buy. So at present, we're still taking opportunities forward, but being very careful what we commit to before the smog clears a little bit on Brexit. As for our current commitments, there would be an opportunity to take advantage of 1 or 2 of our stakeholders, landowners. That's not something we're looking to do. Where we've made a commitment to our we consider our land on us to be important stakeholders to the business. We have Good relationships with them over a long period of time. I wouldn't want to jeopardize that by maybe an extra 1% of margin volume going to be negotiated, Especially as we're happy with the deals in the 1st place, we think both of them are right, we think on the right location. So I think to summarize call, on our existing commitments and we will stand on to our existing stakeholders to important landowners, New commitments, we're being very, very cautious before we commit. That isn't the same we're not going to commit in 6 to 8 weeks' time when the smock becomes a bit clearer, but we're being very cautious what we'll commit to in the short term. Would that be Kevin? Yes. No, that's very clear. Would you I mean, if you had to place it best at the minute, would you Anticipate spending less the same or more on land in 2019 2018? I'm not a betting man, Kevin. I only like to win, you see. And sometimes when you bet, you lose. So you probably asked the wrong person. I I think it all depends on what we see. If we see great land opportunities, and we share you, Kevin, we'll take them. If the smoke doesn't become clear at At the moment, it probably could be less. It all depends what we see in the marketplace. We always play what we see at Persimmon. We're doing the right thing and the right deals on the right terms. Okay. Thank you. Thanks, Kevin. Next question is from the line of John Fraser Andrews from HSBC. Please go ahead. Your line is open. Good morning, gents. 2 for me. Hi, John. Good morning, Mike. So the first question, is there any regional patterns in that 2% to 3% sales dip that you referred to, Mike? And also in the outlet openings, so you heard that there's sites to cover. Is there any regional flavor To those, that's the first question. And the second is I know it's early days and we probably only had one full week In January, but are there any signs so far, any lead indicators or sales even the of how the year started? Thank you. I feel the easiest one first, the current trading. Obviously, it's we've only had 1 week's trading, so it's almost Possible to tell, so I can't really provide you much color on that. As for 2018 in terms of regional pattern, To be fair, I think it's been well documented that the North and the Midlands have performed a little bit better than the South, but I think that's maybe a bit simplistic. The South has performed a little bit worse. There's no doubt about that, but it's more to do with the product choice and the product range you have on the side. Evening in the South where we had to have the right product mix and product choice, the market proved incredibly resilient. What we see is there was 1 or 2 discerning buyers, Which is possibly the second and third time moves, they'll be a little bit careful before the move, but that's not where we've positioned the company. So it hasn't really manifested itself as With us at the moment, does that make sense, John? Sure. In terms of how many openings do you want to hear that one, Mike? Yes. I mean, I'll let openings know. I mean, I think As Dave says, we look at each business separately and each site separately. I think the outlet needs, the land year, the placement needs of each business are assessed on its own merits according to regional sales rates and land opportunities that are there. And indeed, the strategic That is sat behind each of the businesses and the teams that are bringing those through. So it's I think there's no systematic change in terms of the pattern of Outlets coming through and the land that we have bought coming through, I think that is in line with each Our operating businesses business plans, which obviously we continue to review, which you'd expect. And we acquire land. Dave principally allocates capital management of the business is aligned to the market opportunities that are there. So I wouldn't say that there's a specific regional pattern that is any different to what we've been because we've been selling Pretty well across the regions through 2018. And yes, there are differences across the regions, but The pace of new outlet and land replacement reflects the performance in each of those regional markets really, As it always does, John. So I wouldn't say it's any there's no standout feature there really. Great. Thanks very much. Thanks, Joel. Next question is from Chris Nillingson from Numis. Please go ahead. Your line is open. Good morning, Dave. Good morning, Mike. Good morning. Good morning, Dave. A few quick ones for me. Just firstly on the order book, I just wondered if you could give us a figure of how much of that is exchanged and maybe a quick reminder on kind of what deposits you Generally take across sites. Second one is just whether or not you've seen any increase in preponderance of down valuations towards back end of the year, if the surveyors have been a bit more cautious. And then the final one is just on a comment you made, Dave, just about the tail end size of some larger product on them. Just wondering if they flowed through into the year this year and therefore the outlet number is kind of boosted a little bit by some sites just to a little bit of products on it. I'll deal with the first two, and I'll let Meik deal with what I hope. I think your observation is perfect, Chris, to be honest, on the TLN. I think which is Pretty well, we're pretty neutral on all this because the 15 we probably missed for November were flat a little bit by the ones with the tail end which came across. So the observation is perfect on that, Chris, yes. In terms of down valuations, we haven't seen any material change at all. Exactly the same, same as cancellations, no material difference at all. And on the order book, Chris, we've got about Between 40%, 45% exchanged in there, so on PD. So and obviously, on the They are on exchange contracts with our housing association partners. So we're in a pretty strong position. Deposit wise, It tends to be around about £500 deposit for reservation that we take from private sale customers, Where again, we've not we've been pretty consistent with that over the years. Got you. And on exchange, I presume it's 5 to 10, is it, Mike? On exchange, it's, yes, 5 to 10, principally 10. That's what we typically would look for. Got you. And sorry, just one quick follow-up is the 40% to 45% exchanged on PDs, is that any different To what you saw coming into 'eighteen? Not really. That doesn't really move that much because again, it's the rhythm of the sales and the time it takes To exchange, we as a business, we've been trying to improve And short on the period from reservation to exchange. But it is difficult. We have made some improvement on that. Obviously, we're subject to search, if you like, and the performance of the legal advisors supporting the customer, this It's something we continue to work on and push hard on for earlier exchange, And we'll continue to do so. But it we have made some improvement over the last couple of years. But No, I mean, it's pretty consistent, really. Got you. Got you. That's very clear. Thank you, gents. Thanks, Chris. The next question is from Sam Cohen from Baird. Please go ahead. Your line is open. Thanks very much. Good morning, gentlemen. Just one question. If you look at the mix between private and affordable, it seems to have kind of shifted up a couple percentage points towards affordable or partnerships that kind of 19% in 2018. I guess, A, what's driving that? And B, do you expect that mix shift Continue in 'nineteen and 'twenty? I think no, this I mean, we've got a very strong housing association, the affordable housing business. And it's when the bill this And when the deals are completed, I don't think there's any particular systematic change in how we're approaching the affordable business. I think, obviously, planning policy And the development of planning policy, and Dave, you're the expert in this, but seems to be moving the industry to perhaps Deliver a bit more social housing perhaps over time. So our numbers will reflect this The general planning policy as it develops from here, but apart from that, I wouldn't expect our affordable volume In a steady market, if we get the same in 'nineteen as we've had in 'eighteen, for example, I wouldn't expect A big step up in the affordable content. And the big benefit we've got was the length of our land bank because our land bank is already secured and much lower affordable requirements. So, I'm always to be a material and affordable policy moving forward, say, 18, 24 months' time. It would take a long time before it It had a big impact on our affordable percentage. So it has moved forward a little bit. I think that's more about Timing and having the ability to get up the affordables about time as much as anything. I wouldn't I know some of our peers' affordable requirements It's a lot higher than that, but I wouldn't say I was going towards the 23%, 24% That probably reflects we've got a bit more of a Southern Bison in the mix this Under the planning agreements, the affordable perhaps is a slightly higher content Because we see that ourselves. But yes, I mean, Yes, it's not for our position in the market, I don't think it's something we'd expect. In terms of finding more than I wouldn't assume that And next question is from the line of Clyde Lewis from Peel Street. Please go ahead. Your line is open. Good morning and happy New Year to you both. I think I've still got 3, if I can. One was, can you just say a little bit about sort of what sort of website Traffic you saw over the Christmas period. I know you don't want to talk about the current year, but just maybe give us an idea as to whether Yes, you've seen up or downward trends in terms of people looking at what you've got for sale. The second one was on Changing patterns in Help to Buy, whether there's anything to report on that front? And the third one, coming back again to the land purchase, I know we talked a lot about it this morning. But Have you in your sort of slightly sort of more cautious sort of view on things, are you shifting this, the sort of the sites that you're looking forward to, maybe ones with a cheaper mix on them or even smaller sites at all as you look at the sites I'll deal with the land purchase first. No, I wouldn't say that. We tend to concentrate on States West. Population It's a big driver for where we want to be. We believe population sells houses. So our land purchase, that's at the heart of our land purchase strategy. But There's nothing materially different. We look at every single deal on its own merits. And if a deal is compelling, and obviously, we'd buy it. The deal won't come to the worst, and we'll not commit to it. It's as simple as that. There's no nothing more complicated than that really, Clive, In terms of websites and visitors to the sites, I think it would be fair to say that has tickled back a little bit. It's probably what you're surprised to see in the present circumstances, but a lot of the volumes tickled back, Actually, people were saying on-site, the call is actually improved. Although it's maybe it's coming back 10%, actually impacts a lot less than that because we're getting a better conversion rate. Okay. Great. And on the Help to Buy, in 2018, It's been about 48% of our total sales, which is Similar proportion, if you will, to total sales last year. In terms of absolute volume, it's about 7,900 units, 7,900 or so customers taking advantage Help to buy mortgages, to buy our products. So, yes, I mean, we're pleased with the Obviously, the government continues to make to first time buyers to give them better access to the market. Call, Okay, perfect. Thanks, gents. Thanks, Todd. Thanks. And currently no further questions registered. I'll hand the call back to the speakers for any closing comments. Please go ahead. Thanks, Marella. I think we had a good go at the questions there. It seems there have been quite a few, but never mind. Just thanks, everyone, for your time. I'd like to reiterate how pleased I am with the company's performance in 2018, and I'm confident that we are fully prepared call, we will continue to take opportunity and face any challenges that 2019 brings. Thanks for all your time. Thanks very much.