Good day, and thank you for standing by. Welcome to the Persimmon PLC Trading Update conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a questions-and-answers session. To ask a question during the session, you will need to press star one-one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dean Finch. Please go ahead.
Thank you. Good morning, and thank you all for joining Andrew and I on the call today. So far this morning, I've listened to a lot of hyperbole, and I'm trusting Andrew, as I sensed we're in a new era of hyperbole, to kick me if I'm not doing enough of it or kick me if I'm doing too much of it. During the course of the year, we've seen sentiment improve with business over the summer and into the autumn, well ahead of last year. Affordability, of course, remains the key challenge for our customers, but this is being helped by higher wages, lower interest rates, and greater mortgage availability, which is all clearly helping customer confidence. Whilst the Southeast of England remains the most challenged in terms of affordability, even there, we're seeing sales rates well up on last year, which is good news.
As a result, our forward order bulk is up 17% on last year, with our private order bulk up 40%. If you exclude bulk deals from this, our private order bulk is up 24%. Pricing has held firm with incentives running at between 4% and 5%. Since June, our private ASP in the forward order bulk has continued to move up, and over the course of the year, it is up 10%. Compared to this time last year, it is up 5%. We remain active in the land market, securing a number of very attractive opportunities, particularly in recent weeks, that will support growth in volumes and profits in the years to come. In terms of outlook for this year, we are on track to grow to 10,500 completions.
Looking into next year, we should continue to control what we can control and continue to drive self-help, which should see us grow volumes and outlets again during the course of 2025. The broader picture, of course, remains uncertain. We continue to assess the implications of last week's budgets. All eyes are focused on the Bank of England's decision and comments on Thursday, and of course, we are today waking up to the results of the U.S. election. Nevertheless, I remain optimistic about the future as I look ahead.
As a result of our many self-help initiatives, including our focus on growing our land holdings at excellent margins, our improvements in service and quality, our improvements in sales and marketing, the improvements we are making to the homes we sell across our multiple brands, our drive to deeper vertical integration, and our tight control of costs alongside our relentless focus on efficiency. Our goal is to provide good quality homes at affordable prices, and this remains exactly the right place for us to be. This goal, coupled with the investments we've made in the business in recent years, is driving our expectation that we are well positioned both in 2024 and beyond to return rapidly to growth in volumes and profits following last year's downturn. Thanks for listening. We'll now take any questions you might have.
Thank you. As a reminder, to ask a question, you will need to press star one-one on your telephone and wait for your name to be announced. Please stand by while we compile a Q&A roster. Our first question comes from the line of Aynsley Lammin of Investec. Please go ahead. Your line is open.
Thanks. Morning, everybody. Just two from me, please. First of all, it seems from this statement you're being a little bit more cautious on the outlook for 2025. Obviously, still expecting growth, but just trying to gauge kind of how much more cautious you are post the budget, maybe on interest rate expectations. You're flagging up some cost issues, just seeing what's the kind of degree and seriousness of your change for looking into 2025. First question. And then secondly, just you flag up more land opportunities, just a bit more color around that. Is that kind of more land coming onto the market? Is the pricing easier? Is it to do with the kind of planning changes expected? Easier supply? So I just wonder what's driving that and what you're seeing in the land market generally. Thanks very much.
Okay. Thank you very much. I'll have a go, and then I'll pass on to Andrew to cover off in detail on the budget. Maybe if I start, though, first with land, and then I'll move back to outlook to 2025. So we've seen a really busy last three months in land. I think the commentary concerns about budget, and in particular, CGT, may have driven some of that. I mean, we saw close to GBP 500 million of land opportunities. We didn't do all of those deals, but close to GBP 500 million come to us over the course of the three months leading up to the end of October. So that was a high level of activity for us. As I say, we didn't do all of those deals, but there were some really excellent opportunities there, which I think we moved quite nimbly to seize.
So we're very pleased with that. Turning to the outlook to 2025, we continue to expect to see strong profit growth next year, and we also expect to see growth in margins. But I guess what we're doing is just really what we did in August as well is just cautioning you to remind you that we're dealing with a number of things which may dampen the speed of recovery in margin compared to some people's expectations. So obviously, we've had two years of strong build cost inflation and up until recently, little to no ASP growth. So that will continue to act as a drag. I think, actually, I'm delighted with the performance of the business in the last year. In particular, my reference point is the 5% improvement in private ASPs in the forward order book compared to last year.
But even with that, I reckon there's still maybe a £2 sq ft drag on costs that we're still dealing with, which is just a historical issue in terms of timing of land purchases and what happened to build cost inflation in that period. So there's going to be an impact of that. There's obviously some regulatory changes, some structural changes we're working through. So, for instance, Natural England and nutrients, which we talked about before, but we're now getting visibility of what that will cost. And in order to unblock planning, you just have to incur the cost to get the credits to move on. And that can be anywhere between £3,000 a plot and £9,000 a plot to satisfy the requirements for nitrates and phosphates. And, for example, about 600 plots will be affected by that in 2025, which will impact the margin in 2025.
Likewise, in order to get the planning ticket, some councils are insisting that we already go electric. So where that involves a heat pump, that could be GBP 4,000-GBP 5,000 a plot. We maybe have got, again, 600 to 700 plots in 2025 that are impacted by that. So there will be some headwinds to dampen margin. It's good news that ASP, we're seeing some recovery and strength there again, but we've still got to overcome these issues. And they are very much, I think, temporary issues because land was purchased before we knew these things were happening, so there's nowhere to go. But now we're buying land on the assumption that these costs are baked in, so we will see margin recovery as that land gets consent, and we start building and we start selling.
So there's a period of squeeze, some of which we will see in 2025. But longer term, we will see margin recover as we adjust land values for it. And then, of course, there's National Insurance and the other implications of the budget. So I don't know whether you want to say a bit more about that, Andrew, for next year, please.
Yeah. Well, I'll just pick that up. Morning, Aynsley. So I suppose there are a couple of things from the budget. I mean, as Dean says, we will grow outlets and volumes next year, but I think the budget, the OBR is suggesting mortgage rates will stay a bit higher for a bit longer. So we have to see how that plays through.
There's also some changes to Stamp Duty, which again, we just have to see how that plays through on the demand side. And then the National Insurance, I mean, the National Insurance increases, of course, is new news. We'd expect probably the direct cost of that to us will be around GBP 5 million, but then the bigger impact is what comes through the supply chain. And that could be another GBP 10 million on top, depending, of course. I mean, we don't know all their tax circumstances.
We don't know how much of that will get passed through and how much won't. But there is significant cost coming through because of National Insurance, and we have to see how that works its way through the system. So I think the budget creates some questions that we're still seeing how they'll come through in due course.
That's very helpful. Thanks very much.
Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Christopher Millington of Deutsche Bank. Please go ahead. Your line is open.
Hi. Thanks for taking my questions. Just wanted to explore a little bit about that 5% price increase you're looking in the order book. Have we been seeing you move up headline prices? Perhaps you can just talk around the mix relating to that. That's the first one I wanted to ask about. Second one I just wanted to ask is where outlet numbers are now and kind of how you see them progressing. Maybe I missed them in the statement, but I didn't see any reference to the number there, and the final one I wanted to ask about really is just the Q4 weighting to completions. It looks like you've got probably the best part of what, 43%, 44% of units landing in the final quarter. While I appreciate this is something we often see from house builders, it does look quite stark at the moment.
Are there any plans to address that and maybe what would be the implications if you did so? Thank you.
So, okay. Let me have a bash at that. In terms of what are we doing about pricing? Yeah. I mean, in general, we are beginning to feel a bit more bullish. There's more confidence about it. You can see that with strength of demand. And so that is giving us the confidence to begin to move pricing. So pricing is moving forward. You've still got to deal. The picture is by no means universal across the country. I would say pricing is still quite weak in the Southeast region in our Eastern counties business in general, particularly the donut around London. Pricing is still quite weak. But the further out you go, particularly further north you go, then pricing is much more robust. So that's the picture. Obviously, mix does impact it. There is an element of mix.
But I think overall, you can take the time from us that we are feeling much more confident about pricing than we were a year ago, and that will begin to feed into margins over the coming years, which is good news. In terms of outlets, I think the Q3 average number was 264. In terms of outlook, outlets ebb and flow. As you sell more than you expect to sell, then you consume more outlets than you expect to consume. But if we look ahead, since we last spoke to you, we've opened around about 23 outlets, and we have in the pipeline another 30 to open by the end of the year. Nine of those have some planning risk, but we're working through those. And of course, where we get to at the year-end, now we're getting into the slow period in the run-up to Christmas.
We'll really be taking a view about exactly when we want to open them. In other words, do we want to open them before Christmas, or are we better off to open them with more of a sizzle in the spring? If we get that all through, though, this year, we will be on course to have opened nearly 100 new outlets, which I think is a very strong result for us. Then I guess the key number is you want to know what we're doing next year. And we are currently working on, for the first four months of next year, a pipeline of 47 new outlets. But 30 of those have land and planning risk, so there will be some slippage there. But overall, we are driving up our outlet numbers, and we're on track in terms of where we said we would be.
In terms of Q3 delivery and the focus on Q4, I've learned that house builders love to have the adrenaline rush of delivering in Q4, and so we're beginning to move back into that zone, but don't be alarmed. Service and quality is strongly under control, and build is in as good a position as it ever has been as we are in the run-up to Christmas. The explanation really is a whole bunch of things. Private's up, HH down in the quarter, but actually, the timing of outlets opening during the course of the year has had some impact on Q3 delivery, which means there's more delivery in Q4. I think all in, don't get hung up by that. From my view, there's really nothing to see there.
Thanks for that, Dean. I mean, would you hope to kind of address the phasing of completions in future years, or is it going to be difficult to move it materially?
Well, yes. Yes. I like a quiet life. So I absolutely want us to deliver earlier in the course of the year. I have a bunch of regional chairs and managing directors who are trenchantly hung up on the adrenaline rush as far as they get out of delivering Q4. But I think the most important thing actually we've done in the business is bring in the two-week CML. So that is what's really changed service and quality. So yes, trust me, we really do want to bring forward. Though I think, unfortunately, again, I think that we will face this delivery issue next year because, again, outlets are closing, outlets are opening, and that will skew delivery again to the second half of next year. But I would hope we deliver more in Q3 and put less dependence on Q4. That is my earnest hope and desire.
Hear you loud and clear. Manny, thanks for the answers.
Thank you. We're going to take our next question. Please stand by. Our next question comes from the line of Charlie Campbell of Stifel. Please go ahead. Your line is open.
Morning. Thanks for taking the question. There's a couple from me, really. First one, I suppose, just sort of housekeeping, really. You didn't make a comment on margin in the same way that you did in August. I presume your guidance that margins are sort of the same this year as last year still stands. And the second question was you've talked about sort of first signs of cost inflation in 2025. I'm guessing that there's more to that than just the points you've made on build regs, and this is just sort of standard negotiations. Is that sort of more on the labor side than the materials side? And I guess sort of maybe very early in the day to sort of call building material cost inflation for 2025, but maybe if you have some ideas on that, that would be very helpful to hear. Thanks very much.
Thanks, Charlie. Well, maybe if I have a bash at inflation, and we'll talk about margin if we can do it in that order. I'm not trying to scare the horses with inflation. I mean, inflation this year has been very much under control. I think, though, we're beginning to see we're back to a more normal environment with pressure on build returning. So our expectation is we will see in the new year requests for increases of low- to mid-single-digit increases. I think labor costs will drive that. And of course, as Andrew had touched on earlier, the thing we don't know at this point in time is how our subcontractors will deal with the NI increase. And it will really, really depend case by case on how that works. How many self-employed have they got? How are they exactly employing their labor, etc.?
So we don't have a clear picture of that, and that will only emerge during the course of next year. But we're just putting it on your radar screen because it's obviously on ours. But clearly, we have a loyal supply chain base of subcontractors who've worked with us forever. We've got good relationships with them by and large. And I'm confident we'll get to a very sensible outcome. Do you want to cover margins?
Yeah. Morning, Charlie. So just on margin for 2024, yeah, I mean, no real change in our guidance there. So we still expect our margin to be similar to last year, Charlie. So that's as we were, basically.
Thank you very much. Thank you. It's very clear. Thank you.
Thank you. We will take our next question. Please stand by. Our next question comes from the line of Ami Galla from Citi. Please go ahead. Your line is open.
Thanks. Just two from me. One was just a follow-up on build cost inflation. Can you give us some color as we kind of think about next year, how much of this build cost inflation that you're experiencing is coming from, say, historic costs in the WIP? And how much of that increase is on the back of the 2025 negotiations that you're undergoing? And at this stage, the '25 negotiations, is that all material cost inflation that you're seeing, or is that also labor? And the second one was on trading. In terms of trading in recent weeks, do you see any signs of urgency from first-time buyers as you kind of think about stamp duties becoming a lot more difficult for them next year? Thank you.
Yeah. So when I cover those off for you, so in terms of build cost inflation, there's both sides, as you mentioned. So you've got the embedded build cost inflation. We saw build cost inflation through 2022 and 2023, which was significant. And clearly, because of the duration of our sites, that will stay through the margin at least through 2025. So that's a part of the inflationary piece. I suppose the piece we're talking about today is what we're seeing now in terms of new inflation coming through potentially into the new year. As Dean said, it's normal to have some inflation. We're talking low single digits. We're not talking going back to the kind of 2022 or 2023 levels of inflation. But both of those two things will be in the margin in 2025.
And that's why it will just temper the growth of the margin as we go forward into next year. Do you want me to pick up on the trading piece as well, Dean? I mean, the reality is the sales rate has been good and has been steady through the summer and into the autumn. It's too early to see the Stamp Duty announcement was on Wednesday last week. So we've not had a full week's sales yet since that's been on people's radar. So I think it's too early to say whether that's or how that will impact sales, whether people will try to accelerate. I'm sure you could speculate if somebody was going to buy a house in April, they might try and buy a house in March. If somebody was going to buy a house in December 2025, then they maybe can't accelerate nine months.
But we'll have to see how that plays in. It's just too early to see that in the sales numbers yet. We've not had a full week's of sales since the budget yet. But we'll obviously keep an eye on that. And it may, while at the margins, put a little bit of pressure into selling more into Q1 next year.
Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Clyde Lewis of Peel Hunt. Please go ahead. Your line is open.
Good morning, Dean. Morning, Andrew. A couple of questions around land, if I may. And I'd just be intrigued to hear whether you've had any sort of news around appeals and post the sort of change in the government, what sort of path that's been on, really. And then when you've been buying the new pieces of land, have you sort of changed what you've been buying? Are you looking for bigger sites, more sort of geographical sort of differences? And have you been changing the sort of usage of land creditors within that sort of profile? And the second sort of question really was around sort of customers. And I suppose sort of, again, the visit patterns.
It'd be interesting to hear a little bit around, again, different sort of geographical patterns, whether a bit like your pricing comments, Dean, whether, again, the sort of London Southeast or Southeast bubble is sort of quite different to the Midlands and the Northern markets in terms of sort of demand profile and interest levels.
Okay. Morning, Clyde. Let me have a bash at that, so I mean, ideally, we don't have to go to appeal because everybody's got the memo from Whitehall, and planning's got a bit easier. But that memo does appear to have got slightly stuck in the post. But I'm sure it will. I'm sure we can rely on the Post Office to deliver for us. But seriously, on planning, the answer to the question is we are primarily still very much focused on self-help, and we're pleased with the progress we've made this year. We've so far got detailed consent or RM on 8,800 plots, so that's very pleasing progress. The NPPF is still being consulted on, so we don't know where that's going to end up.
But if delivered as proposed, then that will be a very positive outcome, I think, on the supply side. But clearly, it will take some time for that to come through. There will not be an overnight effect there. I mean, generally, I think there's an understanding that there is a pro-development policy. But even with some Labour councils, we are still seeing resistance down to local issues. So it does come back to my opening point, which is we are very much focused on self-help, working council by council, almost councilor by councilor to understand what the issues are, being very forensic in the approach, knocking down the issues, and getting the ticket. And as I said, we're really pleased with the progress we've made so far this year.
In terms of buying land, I mean, in recent weeks, I do feel that we've had a bit of a breakthrough because we've got one piece of land we've been working on for 37 years that we've finally got the ticket. We finally purchased. So happy days. And thank you, Rachel Reeves, for helping us get that one across the line. But no overall change to where we're buying. The strategy is not really changed at all. And visit patterns, we've seen very strong increase in visits and website visits and inquiries. It's hard to disentangle whether that's self-help or whether that's market. We have done a lot of work in building our digital platform and building our marketing expertise. And that really has come through. We've seen interest up by over 50%. And we are seeing it across the country.
It is slightly stronger in the north than in the south, but there remains very strong interest in the south. It's all about getting the mortgage, getting your mortgages and being able to transact. That's improved, but it's still challenging in the southeast in particular.
Perfect. Thank you.
Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Will Jones of Redburn Atlantic. Please go ahead. Your line is open.
Thank you. Morning. I'll try three if I can, please. The first, just coming back on the 5% increase in the private ASP, would you be drawn on how much of that you think is mix versus underlying? The second was around the bulk sale components of the sales rate, which I think continues to run at around the 0.1 mark. Do you think that's the new norm now, or would you expect that maybe to tail slightly lower over the next year or so? And then the last one was if we put together the cost comments you're making today around heat pumps or planning or embedded build cost inflation, does any of that change your view of the embedded land bank gross margin as we saw it at June, or was that kind of factored in correctly at that point? Thank you.
Morning, Will. In terms of mix, look, mix is always going to play a part. But as I indicated earlier, we are consciously moving price forward where we can. We're very focused on that. So there is, I think, clearly more skewed to the north than the south, but there is clearly an underlying improvement there, which will help us. And I think we'll build to offset the historic build cost inflation we've been talking about, and therefore we'll feed through to margin. In terms of book, I think PRS in particular is going to now be a feature of the business. There's a lot of demand out there. And we're building relationships with people that we can't turn on and off quite as much as we might think suits us in the short term because I do think they're a long-term part of the business.
But the level at which they're now at is probably a good indicator of where they will be going forward. Our focus is on building both the quality of the relationships we have with these people and tailoring that demand to what suits us best in terms of house types, sites, mix, and driving the best margin we can. So I think it will be running about the level we're now at is a good yardstick, and we've got to improve the efficacy and value we get through that. And no, the land bank we spoke about in August, the embedded margin reflects the stuff we're talking about here.
Thank you.
Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Zane Bikawa of J.P. Morgan. Please go ahead. Your line is open.
Morning. Thanks for taking my questions. Just two on my side. On the fire safety remediation, you mentioned the bulk of the work's completed over the next two years. Could you maybe attach a percentage to that? And then to come back on land, do you have a view on how much you're expecting to spend in the coming years? Thank you.
In terms of the,
I think we'll be spending about GBP 100 million a year for the next couple of years on fire safety.
Yeah. That's right. Morning, . So we'll be spending at the end of June. You remember our provision was GBP 238 million. So if you put GBP 100 million a year for the next couple of years, there will be a tail, of course, there will. But the bulk of that will be through. And that's important. It's the right thing for us to do. And it's important that we have been trying to be as leading on that as we can be and we continue to be. So we will look to get the bulk of that work done over the next couple of years. But yeah, if you do the math, it's kind of GBP 100 million a year there or thereabouts, something like that. And then, sorry, yeah.
So in terms of land spend, so we will give more guidance on next year's land spend when we come in January. We've obviously had increased spend, as you can see in the statement, in the third quarter. I would expect our land creditors to be up at the end of the year compared to where we were previously because of the volume of land that we've been looking at. But actually, that's a good news story because that shows the agility of Persimmon in responding to the land markets that we see to make sure that we're positioning ourselves for growth in the coming years. So I think the way we've responded to the land market over the last six months has been good. But it does mean our land creditors will be higher at December than they probably were at June.
And we'll continue to spend, obviously, on land as we go forward as well.
Great. Thanks.
Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Glynis Johnson of Jefferies. Please go ahead. Your line is open.
Morning. Just a couple for me, actually. I'm really going to drill down in terms of what you said earlier on in the call. You talked about the drag of previous bill cost inflation impacting by, I think you said, £2 per sq ft. But when I look at what that is relative to your price per sq ft, that's still a really small number. It's smaller than the decline in your embedded margin. And it's much, much smaller than what you've seen in terms of how your margin has progressed. So can I just double-check that £2 per sq ft number? Because that would suggest the underlying profitability is actually much better. Second of all, just in terms of the electric heat pumps on 600, 700 plots, I assume that's just, or can you confirm? That's just a 2025 issue.
Future Homes Standard means you would have been handing over homes from 2026 that you would have had to assume would be fully electrified anyway, so this is just a slight pull forward of costs, and then lastly, I'm going to push you, and you're probably going to turn me down and say no, but the margin increase for next year that you're guiding to, and I appreciate you're not guiding to a number, but what proportion of that is coming from the better volumes and the operational leverage getting you back towards that embedded margin, and what is coming from price over cost?
Go on, Andrew.
Okay. Sorry. Well, I mean, let me start at the end.
Morning, Glynis.
I'm going to start at the end. In terms of next year, I'm not going to put a number out there today on the call, Glynis. We will see volume growth, and that will drive some margin. As we've said, there are some headwinds into the speed of margin recovery. I think trying to put a straight line margin recovery back to the margins from the last cycle is not. This will be a different cycle. They have different features, and we just need to respect that and reflect that, I suppose. I'm saying them in reverse order. Heat pumps and others, so you're right. To the extent that there is Future Homes Standard, and we can see that coming, then we're pricing that into our land purchases now.
There is clearly a period of time where there are some of these costs, either because we have, I can think of a site we're working on at the moment where the council planners required heat pumps, not because of Future Homes Standard. They decided that they would try and get ahead of the curve. So that is an additional cost on that particular site. So where councils, local authorities are trying to accelerate delivery of heat pumps in this example, then clearly that's something which is a cost of delivery and a cost of building those houses. So you're right. In the fullness of time, this will come through into the way that we're purchasing land. But there is a period where there's clearly land that was bought in advance of these regulations or regulations have been kind of early adopted.
And then in terms of the inflation, so look, the embedded inflation clearly we saw in Persimmon at the time. But the inflation in 2022, I'm guessing, was up in high teens, maybe a 20% inflation. 2023, I suspect, would have been double-digit inflation experienced by the company. And because of the length of the sites, that inflationary impact clearly is still impacting units that we're delivering through 2025. If we bought a four-year site at the start of 2022, we'll still be on the ground there till December 2025. So I mean, that's just so that will continue to work through and be, again, a drag on that margin recovery over the next kind of 12-18 months, something like that.
Sorry. Just in terms of the margin guidance, can I just, I'm not asking for a number, but directionally, is the margin guidance, which is for up next year, purely volume? Is it volume less, the difference between price over cost, dragging it down, or both elements moving you up?
Yeah. So it's a combination. So it's partly volume, and you get some of the operational leverage from that. It's partly. Okay. So I just talked about the sites with the embedded build cost still in. And clearly, there are some sites which have had that come out of. So you're always going to have a mix in terms of the mix of build cost and house price inflation as well. So it will be a combination of all of those things.
Thank you.
Thank you. We will take our next question. Please stand by. Our next question comes from the line of Harry Goad of Berenberg. Please go ahead. Your line is open.
Yeah. Hi. Good morning. Thanks for the question. So I've got two, please. So firstly, you made the comment on incentives, still running at around 4%-5% of ASP. Can you give us a little bit more detail here? I mean, do you see that at pretty much every site, or does that average reflect quite a big variance? I mean, are there any sites, for example, where you've been able to reduce incentives to closer to zero? And then the second one was around the partnership strategy. Can you just remind us what you think on a sort of annualized basis, what you think the normalized sort of contribution from partnership sales will be if you think about annual volumes? And will that be a number you'd expect to see across most sites on average, or will it be disproportionately focused on some sites? Thanks.
Morning. Since I've been told off so badly for leaving Andrew to answer Glynis's question, I'll have a go at answering this question. So incentives, look, there is a range. But probably the range is 2-7%, something like that, from one end to the other there. There will be very few sites at the moment where we are giving no incentives away. There will be some. I mean, some sites are selling incredibly well. But by and large, almost every customer that walks in the door is looking at 5%, white goods and carpets. So we're still not moving away from that. That mentality of dealing is out there. And if you don't offer it, then they're going to go up the road and get it from somebody else. Or they'll walk into your site and say, "Well, this is what somebody else has offered.
What are you going to offer me?" And understandably so. So yes, there is a range. There's not a vast range. There's still a dealing mentality. But as I've said, we are trying to move forward on pricing where we can across the business. And where you've got orders 20%, 30% up on last year, then that gives you some confidence to begin to do that. And in terms of partnership, the range is 18%-20%. Obviously, it varies from council to council in terms of what their strategy and policy is. But that's roughly where we are at the moment.
Thanks very much.
Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Mark Howson of Dowgate Capital. Please go ahead. Your line is open.
Thank you, gentlemen. Thank you for the note on National Insurance. I think, obviously, you're not alone in facing that. It's something we need to think about for all the companies. Just in terms of things that are in your own hands, is there anything you can do to perhaps accelerate some of your initiatives? You've got your own brick production. You've got Space4. Is there anything you can do? These are much more controllable costs for you yourself.
Morning, Mark. Yeah. Thank you. And yeah, exactly. That's why we are cracking on with building our new factory. And we hope that will be coming into production towards the end of 2026 to start 2027. I think that's absolutely key for a number of reasons, both in order to help us to control costs, but also to deal with, I think, an inevitable challenge in terms of labor shortage, which I'm sure we will begin to talk about increasingly over these calls over the coming years. So I think it's absolutely vital. It's a core part of our strategy. And that's why we're investing in the factory, as well as the brick slips we've been talking about, working alongside TopHat. So absolutely all of that is key.
And we'll put us in where we need to be looking forward in terms of continuing to speed up, build, and drive efficiency. And as we alluded to back in August, it can be quite material. If you can take two or three weeks out of build, that's a material saving and really speed up and reduce your overhead and get through the sites quicker. That self-help is what we're really, really focused on.
Thank you.
Thank you. There are no further questions. Speakers, please continue.
Thank you very much for all your questions and listening to us today. We talked a lot about margin. And we've not tried to prick your bubbles. But I mean, I must say I'm delighted with the progress of the business this year and notwithstanding the challenges. I'm delighted we will be back to profit growth this year and volume growth and likewise next year. And I think that we will begin to see the margin moving on. We do have headwinds. But I think the business is in great shape. It's doing the right things. And I think we're both really excited about the future. So with that, thank you very much. And we'll speak again in January, I believe.
This concludes today's conference call. Thank you for participating. You may now just.