Earnings Call: H1 2021

Aug 4, 2021

Good morning, and welcome to the Taylor Wimpey plc half year results presentation. Today's presentation will be hosted by Chief Executive, Pete Redfern, Group Finance Director, Chris Carney, and Divisional Chair for London and the South East, Ingrid Osborne, followed by Q&A session. I will now turn the call over to Pete Redfern. Pete, please go ahead when you're ready. Thank you. Thank you, everybody, for joining us. If I sort of just give you a quick overview of what we're going to cover today. My section will probably be a little shorter than usual to give time to hear from Ingrid Osborne, who runs our London and South East division. Ingrid Osborne will also cover an update on our environmental strategy, which she has been working on, and also an update on some of our employee measures. Chris Carney will then go on to his normal financial review, and I'll sum up with some priorities and outlook at the end. Moving on to my first slide proper, with a half one overview. I'll probably spend a fraction longer on this slide than usual and touch on more of the statistics. We think it's a great first half performance. You can see us prioritizing margin growth and you will see us talk about, and I will specifically focus on towards the end, our focus on outlook led growth from 2023 onwards. You can see the margin performance. We'll talk through the presentation about what we've seen on selling price and cost a little. I don't think the underlying dynamics will surprise you, but obviously our company's specific position on that is important. We are seeing selling price inflation fully offsetting upward pressure on build costs. I would say if you look at it today, there's probably net upside there, but I think it's important just to sort of be cautious as we look ahead about the balance that we expect it to continue to at least offset. Obviously the two dynamics aren't always exactly in line quarter by quarter, even if they are quite closely linked. Picking up some of the stats, sort of an updating on land approvals. In the year to the 4th of July, we approved 32,000 plots. That's roughly twice our sort of normal completion run rate at the moment or a bit more. If I went back to the sort of period post equity raise and included the last few weeks of the previous period, which obviously was a period of peak approvals, we're at about 36,000, 37,000 plots approved since we reentered the land market ahead of our peers. The operating profit margin in the first half of 19.3%, as I say, we're particularly pleased with, but also some of the underlying measures. At 92%, we're solidly in the five star category on customer service. A measure that we believe continues to be underreported and discussed, our construction quality review score has again shown a step forward with 4 years of improvement. We think that is a good way of measuring our underlying construction quality, which will impact both on future customer service, sort of performance in our customer's own satisfaction with that home, and also our own sort of cost base and control going forward. We think it's particularly important. Moving on to the first half market backdrop slide. I won't pick up every point on this particular slide, but looking at the customer and the market together, overall, we've seen continued strong demand across all regions. We've seen some normalization in what were pretty extreme conditions in the first half over the last few weeks. We continue to see a pretty good performance and we will sort of talk through the stats. I think what would be unusual at the moment, if you talk to any 1 of our regional heads, they would say the market today in July, August 2021, is materially better still than it was in 2018 and 2019. Although we're not quite in the extreme conditions of the first half in terms of forward interest, it remains at an elevated level and we remain very positive about the market conditions. As we've said many times, we sort of connect that more with low interest rates, decent mortgage availability, and a strong level of real demand from people who want to change their life and move on to a new home, sort of rather than just the shorter term measures. We say on a couple of the slides, sort of in our prime only repeat it once, we're continuing to see very good reservation rates and customer interest for a period that is beyond any of the stamp duty windows. We have not seen through any of the changes in stamp duty any material down or shift. We do not see that as a particularly meaningful risk. On the regulatory side, clearly still a lot going on. Again, I won't comment on all of these elements. I think on the Building Safety Bill, sort of we don't see it affecting our cost base going forward materially. Things like that real focus on the construction quality review, for instance, we think puts us in a strong place and things around our focus on a Taylor Wimpey standard makes it easier for us to sort of adapt to a world with a new home on them particularly. On the cladding provision, I would just reiterate that we are very confident that the provision we have made is enough for us to do the work that we believe is right for our customers. We're the only major developer that's told our customers that we will do any necessary capital work to bring sort of historic blocks of apartments up to current EWS1 standards. I would say more recent announcements since we sized that provision in February have been positive and are more likely to reduce that scope slightly rather than to grow it. We remain very confident that we're in the right place, both financially on that provision and more importantly, in terms of doing the right thing for our customers. On the CMA leasehold process, difficult to comment. There's not a new conversation there. It's issues that we've talked about in the past, but difficult to comment on an ongoing process. On land, I think, and I will come back to this in my second section, we do see increased competition in the land market the first half of this year, and are very pleased with the number of sites we've acquired over the last 12 to 15 months. Moving on to the market performance slide. I think almost inevitably everybody's eyes will go straight to the left-hand side. We've continued to see a strong sales rate, a very normal cancellation rate, sort of normalized really from early on this year and remained very stable. I think it's worth picking up a couple of the sort of bullet points in particular. That shift in Help to Buy, sort of level in the first half, only 27% of completions, roughly half what it was sort of in the first half of last year. First half of last year elevated, so 45% perhaps might be a more normal number, but still running well below what we've seen in any year with Help to Buy. We've obviously navigated that with a long order book without any impact on completion performance. I do think there is also an element of it which is to do with the strength of the secondhand market, which I do believe is likely to continue into the medium term, meaning that we're slightly less dependent on Help to Buy going forward than we have been. 27%, I'm sure, will be a low point. It gives me a little bit more confidence as we look ahead to 2023 and beyond. I think also worth highlighting, as of today, we're about 99% forward sold for completions for this year. That obviously gives us a high degree of confidence in this year's performance, sort of as we look forward. We would normally expect to get to that point late September. Moving on to just some forward-looking indicators on sales. You can see, and it's not a sort of a huge shift, if you look at the red line on appointments. You can see strong first quarter and then normalizing. If you compare sort of the last few weeks to the early period of 2020 before the pandemic hit, you can see that we're still running above that sort of more normal level. That first sort of eight or nine weeks of 2020 would be a reasonable reflection of the level through 2017, 2018, 2019. From a customer point of view, we've been doing a lot of work on our digital sales processes. We've learned a lot over the last year. We felt we had the IT system support and the staff who were quick to adapt to selling remotely and selling digitally. We've been very focused on not losing that benefit, both in terms of flexibility for our teams, flexibility for our customers, efficiency for the business. We've just launched over the last few weeks a new customer facing website with significantly improved development facings and plot listings, a totally re-energized search function, very different user experience. It also ties in, which Chris may touch on, to the internal systems that we have on the CRM side. Gives us significantly better data segment to understand our customer base and enables us to make the sales process far more scientific and far more efficient at the same time. I will pause there and hand over to Ingrid, and then at the very end, I will come back and cover sort of our priorities and the outlook. Ingrid? Thanks, Pete. Good morning, everyone. My name's Ingrid Osborne. I'm a Divisional Chair for London and the South East. I've held that post for a little over 3 years now. Previous to which I was the Divisional Managing Director for Central and East London, and before that, the Managing Director of Central London for almost 7 years. In total, I've been with the company for just shy of 20 years, having originally joined George Wimpey's graduate trainee scheme. During my section of the presentation today, I'm going to provide you some detail on the London and South East division and also give you a brief update on our environment and social strategy with a particular insight into our recent employee survey. Moving on to the first slide. The map on the left there gives you a sense of the operating area and how it's divided. We operate from 5 business units covering inner London, Greater London, and the wider South East. They are a mixture of growing businesses and well-established mature businesses. Just putting out a few points for context for you, our product is roughly 70% housing and 30% apartments across the patch. The proportion of completion from Greater London is between 15%-25% across the medium-term outlook. To split that down a bit further into outer and inner London, we currently have only 1 large active outlet in Zone 1, being our Postmark scheme, which is the old post office site located between King's Cross and Farringdon. In Q4 last year, we undertook an overhead review across the division, which is now complete and embedded. We rationalized our structure as a result of that review and created TW London from the operations which were previously based in East London and Central London. This is working well, and we're definitely seeing the benefit of combined skill sets across our teams alongside greater efficiencies. If I move on to the next slide. Again, I'll highlight a few key notable areas from this slide for you. We've had a strong first half, assisted to some extent by the Q4 2020 hangover, but also from a real focus from our teams on smoothing. We are currently operating from 43 outlets, and all the teams are extremely focused on driving the engine room processes to get new outlets open on time and on budget. It's been a busy year for us in that respect, and we've already opened 14 outlets in the first half, and we're on track to open another 19 outlets in the second half. Our operating margin is, of course, another key focus, now starting to normalize from last year with all the teams working hard with a key focus on cost management and price optimization to drive this higher. You can see from the slides that our sales rate shows the market has been very strong at one a week year to date as per our budget, with a comparatively low cancellation rate this year at 13%. As you would expect, we have very live discussions across all our outlets regularly to focus on the balance between price and rate. Our order book is strong at GBP 588 million, we are 94% sold for the year and continue to see strong momentum going into next year. We have not seen any material change in the market as a result of either the change in Help to Buy caps, nor the end of the SDLT holiday, with inquiry levels remaining high and appointment levels actually the highest this week since week 19. 65% of the value of our order book is post the final removal of the stamp duty holiday at the end of September, demonstrating resilience of the market. Pleasingly, both our 8-week and 9-month customer satisfaction scores are trending upwards, and both the teams and I have been especially pleased with the improvement in our construction quality review score, which you can see by the green line on the graph currently standing at 4.5. If I continue onto the following slide, I thought it would be useful to provide a bit more insight for you into the London and the South East sales market. It's certainly something which I often get asked about, and as you would imagine, we've been keeping a very close eye on what's happening and whether or not we see any shift in buyer behavior moving out of London. On the ground, we are not seeing that fundamental shift. I think that the idea of de-urbanization is somewhat oversimplified. In fact, buyer considerations on space, on life stage, on lifestyle, and so on, are not particularly different to what they have always been. In fact, sales rates year to date from our 3 largest Greater London schemes are higher than our overall divisional sales rate. For example, our Chobham Manor scheme in Stratford stands at over 2 year to date. Our Greenwich Millennium Village scheme is just shy of 2 year to date, and our Wick Lane scheme in Hackney is at 1.25 year to date, but is trending to 2 in the last 4 weeks. The notable attraction of these schemes is proximity to open space. Chobham Manor sits directly next to the Olympic Park, and having visited only a couple of weeks ago, I've really noticed how much the park is maturing. With great examples of well executed wildflower planting alongside lots of play areas and amenities. Greenwich is the same. The ecology park in the middle of the most recent phase is often quoted as a big attraction. Speaking to customers who live there, they really enjoy the walk along the river to the O2 Center and the transport facilities. Speaking to some of our sales executives, they told me that, in fact, a number of customers have relayed their appreciation for being so close to essential facilities during lockdown. Likewise, at Wick Lane, our London teams tell me that the buyers priced out of Chobham are prepared to walk that bit further to get to the Olympic Park and the Westfield Centre. It's around a 10-15 minute walk for a lower price point, while still being close to what they see as a more emerging neighborhood with price growth and proximity to the station and some funky pubs alongside the river there. For me, I do think our customers are more interested than they have ever been in open space and also amenities, but I don't think that this means a decision between urban areas and non-urban areas because the two are not mutually exclusive. Our customers are showing us with their ongoing purchasing behavior that the popularity of London living is enduring. We are, of course, though conscious of other buyer priorities that we hear. Our customers regularly ask about home working options and especially connectivity. This is, of course, very high on our agenda. I should also note that the inner London market is different again, being much more investor focused. Here we have seen slower rates, but certainly not stopped. Our London scheme at Postmark on release is over 50% sold and in fact, over the last few weeks, we have really started to see increased interest and secured a number of deals. Anecdotally, the return of the universities to something more like normal is driving this renewed interest and rentals at Postmark are extremely popular for overseas students. This, coupled with the current undersupply in inner London, suggests positive prospects going forward for well located quality schemes like Postmark. If I turn now to the land market on the next slide. The divisional teams have been very active in the past 12 to 15 months, and I've been extremely pleased with the performance, which sets us up strongly for the medium term across a broad range of really excellent sites. We have approved 7,700 plots in the division, 94% of which are under contract already, investing over GBP 500 million, and we have visibility of a strong pipeline of deals still coming through the system, around 2,000 plots, close to GBP 2 million. I've been involved in land throughout my career at TW. I can honestly say that the number and caliber of sites that we've been able to acquire before the current competitive tightening of the market is really very significant. We were able to stay active in the market when our competitors were either absent or not performing. That was a big advantage to us at the time. Just as importantly, I think, it enabled us to build a reputation for professionalism and reliability, which has stayed with us and given us a stronger position in a more competitive market. We are very selective about where we spend our time. Our current position means we can afford to continue this approach into the future and retain attractive KPIs. At the same time, the teams work extremely hard with local authorities and communities, getting planning through the system and getting ready to start on site and get our outlets open. The next slide gives you just 2 examples of the sites we have secured. The first one at the top is Gilston Village at Harlow. That's a very large site that we will share between 2 of our businesses. We secured that above standard benchmark rates, and our activity in that respect enabled us to secure this off-market and provides us with an excellent backbone site that we intend to open by the end of 2023. The second scheme at the bottom there is in Hassocks. Again, lovely scheme, 500 units about 7 miles north of Brighton. Has planning, so relatively low-risk site. We secured that as a result of one of our competitors failing to perform, and we're currently on track to get that outlet open early in 2023 as planned. I'd like to turn now to our environment strategy. A key part of the sustainability of the business, of course, and I've really enjoyed working with the team on this topic over the past 18 months. We are very proud of what we've already been doing in this space, having recently been included in the "Financial Times" inaugural list of Europe's climate leaders. That said, with our drive to continuously improve, earlier in the year, we launched our new strategy, which focuses on the 3 key pillars you can see here, carbon reduction, nature, and waste and resources. We wanted the strategy to be clear and easy to understand, but at the same time, have challenging and clear targets with which to measure ourselves. The rollout across the business has progressed well, with internal training having been provided and ongoing master class sessions happening across the business now. We have also launched a business unit innovation grant initiative to encourage good ideas and sharing of best practice. On carbon reduction, we have now committed to science-based targets. These are an externally calculated and assessed measure of what we should be doing in order to play our part in achieving the ambitious aims of the Paris Agreement, which is to keep global warming at less than 1.5 degrees. We have a number of plans afoot, as you would imagine, to achieve these targets. On nature, we are committed to increasing natural habitats, and we are working with Buglife and Hedgehog Street, for example, to make our properties more wildlife friendly. We are implementing bug hotels, bee bricks, and hedgehog highways across appropriate sites already this year. Buglife are championing the Bee Line, which they describe as a transport infrastructure across the UK for insects, which is a great phrase, and we're working with them to identify the sites that we control which sit on the Bee Line in order to join in with this fantastic initiative. On waste and resources, we continue our focus on protecting the environment and improving efficiency with a number of trials underway and a commitment to working closely with partners and supply chain to do more. We're really proud of what we are doing, and teams continue to embrace the challenge. To bring some of this to life for you, I have some examples on the following slide. The first one, this is our site at Bordon in Hampshire, which is a joint venture with Dorchester Group. As you can see, this is an extremely large piece of land, and we've sought to make the most of this opportunity. The slide here gives just a couple of bullets of the types of things we've achieved. To note, really, I think it's been such a great opportunity to create new green spaces and encourage active lifestyles. Having visited myself recently, I have to say it was lovely to see the area being well used and enjoyed by families, by residents, and other members of the community. In addition, as you'll see on one of the bullet points there, it's been great that the new types of bird sightings have been noted in the area than have been seen previously. On the next slide, there's a couple of images there just to show you what a bug hotel looks like, in case you didn't know. The top slide there shows you the smaller version of the bug hotels. There are actually larger versions which can be used on areas of public open space, these smaller ones can be used in gardens and much smaller areas. The pollinators use the cavities and the tubes you can see in the picture there to nest and lay their eggs. The bottom image there is just an example of wildflower planting, which we are seeking to use a lot more readily across a number of our developments. On the next slide, a couple of examples on carbon reduction. The top scheme there is our development at Coronation Square in Leyton, which we've actually just got started on. This will turn into a district heating network, which will incorporate neighboring developments as well, something that was really important to the local council, Waltham Forest, who are our joint venture partner on that scheme. The image at the bottom is our Chobham Manor scheme at Stratford. This was a development where we have constructed townhouses that achieve 0-rated regulated CO2 emissions. In doing that, we've used only on-plot measures, which is pretty unusual. Those images are real. Those houses are there in use and being well used at present. Turning finally to our social focus. We have been committed to engaging and supporting our employees over a number of years now to build a sustainable culture and an inspiring working environment, and we're really proud of the results of this recent employee survey, which we conducted in March. We had a 91% engagement level across the business, which we thought was excellent given the backdrop of the previous 12 to 18 months, and demonstrates the resilience of our workforce. That said, we're committed to keep improving, and I'll highlight some of the areas on the slide here, which are of particular importance as we focus on the new post-lockdown normal. We are unwavering on our commitment to health and safety practices, which is reflected in the responses here. 96% of our employees believe we take health and safety in the workplace seriously. As a business, we understand the importance of creating diverse and inclusive teams, but most importantly, it's about how our employees feel whilst they're at work. We're making steady progress here, which is reflected in 96% of our employees seeing employees from all cultures and backgrounds being respected and valued. In addition, we were particularly pleased with the 96% saying they can be their authentic self at work without a need to cover identity. This is something we feel really strongly about that really matters. We also know we have further to go, and this year we have launched new policies such as the menopause policy. We've introduced three employee networks, the menopause affinity group, LGBTQ+, and working parents to add to our BAME network. We're in the process of rolling out respectful workplace training to continue to build awareness across the business of inclusive behaviors. Finally, with the challenges of the last 18 months as we get used to a new normal, we remain committed to building the resilience of our employees and particularly focusing on well-being and mental health. We have set out guidance on our continued commitment to agile and flexible working. We continue to offer awareness training for all employees and mental health first aiders, all of which is reflected in our survey, with 93% of employees knowing how to access support for mental health and well-being at work if wanted. I have to say, I've seen some fantastic ideas and participation in my businesses, and I'm really proud of the commitment that our senior teams have to our people so that we ensure we attract and retain the very best. On that important note, I will hand over to Chris. Thanks, Ingrid, good morning, everyone. In keeping with the Olympic vibe, these results are a record performance for half on revenue and operating profit, reflecting the hard work and dedication of our team, as Ingrid has just touched on. The operating margin at 19.3% is better than expected, better than the first half of 2019, it demonstrates both our ability to control costs and the underlying quality of our land bank. We're very pleased with the margin performance, and I'll provide more detail on that in a minute. After deducting the dividend paid in May, the profit generated over the last 12 months has increased the tangible net asset value per share to £1.13, which is a very healthy 10% increase on this time last year. The return on net operating assets shown at the bottom of the slide is calculated on a 12-month rolling basis. It's great to see that recover to 23%. Bear in mind, that return is after taking into account the drag impact of the continued investment in land to drive growth in 2023 and beyond. Looking at the detail of the U.K. performance, it is no surprise that the record revenues have been driven by record completion volumes. You will recall this time last year, Pete and I were very clear about the site closures pushing completions originally intended for Q4 of 2020 into Q1 of this year. That is exactly what you are seeing in these numbers. Affordable completions are running at 16% in the first half, and our guidance for the full year is unchanged at 17%, so a slightly higher mix of affordable in the second half. Close to half of the 11% increase in average selling price is driven by the lower affordable mix in the period compared to the first half of last year, when affordable completions made up 23% of the total. Private average selling prices increased by 6.5% since the same period last year. 3% of that is price inflation and the balance is mix, including a larger share of completions from Grid A quality locations. Affordable average selling prices also increased due to improved site quality and a slightly larger average unit size. This slide shows the main components of the recovery in operating margin compared to the first half of 2020 and demonstrates why we think this is a sustainable performance and sets us up for further growth in margin in the future. The biggest improvements come from the areas I flagged back in March, which you can see in the two boxes. The first box includes the reversal of the GBP 39 million of COVID related costs booked in the first half of last year, and the cost savings captured this year from the restructuring we undertook at the end of last year. The second box shows the impact from the return to more normal levels of fixed cost recovery as volumes have improved. In addition, the margin delivered by completions in the first half benefited on average from a net market impact of 1% compared to the first half of 2020. Since the start of this year, pressure on build costs has increased due to the strength of the market and supply constraints, but that pressure is being fully offset by house price inflation, as Pete mentioned earlier. Back in March, I set out a bridge to achieving our medium-term 21%-22% margin target, and I am pleased to confirm that we remain on track with those plans. The restructuring is complete, and the savings are being realized as planned. Our excellent order book position at 99% sold for the year is helping underpin selling prices. The land bank continues to evolve, you can see 50 basis points of improvement from that in this reconciliation. Our strong land investment over the last 12 months puts us in a position to deliver a step-up in volume in 2023. At the prelims, Jenny and I gave you some color on our new house type range and CRM system. The roll-outs of both are progressing in line with our expectations, and our procurement strategy and engagement with suppliers to understand their product roadmap is ensuring we set ourselves up to procure products that are available and whose costs remain as low as possible. Hopefully, that gives you a sense of what's underpinning our confidence in achieving our medium-term operating margin target of 21%-22%. Turning to the balance sheet, I think it really shows how we are setting the business up to deliver growth over the coming years. Unsurprisingly, the biggest change to the balance sheet compared to 12 months ago, and something I am very pleased to report, is the increase in land cost of £455 million following the deployment of the proceeds of the equity raise. Work in progress was artificially high this time last year as a result of the site closures. The reduction comes as no surprise, especially given the strength of the first half delivery and the reduction in output. WIP per outlet is actually pretty much flat year on year. Bearing in mind those output numbers and the well-publicized constraints on materials and resources, our expectations for 2022 volumes are unchanged. We are expecting modest volume growth in 2022. On top of that, as you know, we are expecting the land investment I mentioned a minute ago, to deliver output growth from late 2022, which will in turn deliver significant volume growth in 2023. Net cash at the half year was GBP 907 million, which is higher than we'd reported in the past. I think it's important to avoid looking at cash in isolation. For me, it should always be considered together with land creditors, which you will note are also higher due to the increased land investment. Our philosophy on land creditors is that we don't believe it's appropriate for them to finance land assets because they have fixed maturities in the short to medium term. We aim to keep adjusted gearing at low levels to ensure we maintain resilience and financial strength throughout the cycle. It's also worth remembering that we're still at the relatively early stages of the growth phase, and the pipeline of land approvals is still to be fully reflected on the balance sheet. Lastly, there is some detail in the appendices on the latest funding agreement with the pension scheme trustees, which was agreed in March. Worth noting that the scheme had a surplus of GBP 51 million at the end of June on a technical provisions basis, and GBP 59 million on an IAS 19 basis. This slide shows another period of strong cash generation for the group. The largest outflow on the slide is land, which is your net of land recoveries on completions. The total land spend in the period amounted to GBP 588 million. You can also see there the 2020 final ordinary dividend of GBP 151 million, which was paid in May. Today, consistent with our ordinary dividend policy, we are declaring an interim dividend for this year to be paid in November of a further GBP 151 million or GBP 0.0414 per share. This means we will return GBP 301 million to shareholders in 2021. Turning to guidance, we have previously guided U.K. completions in 2021 to being in a range from 13,200 to 14,000. Given the performance in H1, the strength of our order book and ongoing build, we are now in a position to guide completions to be towards the top end of that range, with H2 slightly lower than H1 and with 17% of the full year total being affordable homes. As I noted earlier, assuming stable market conditions and no additional disruption to the supply chain, we're expecting U.K. completions to show modest growth in 2022. Strong profit performance in H1. We've upgraded our guidance for full-year group operating profit, including joint ventures, to be around GBP 820 million, which is above the top end of consensus. As a result of the increase in volume guidance and strong cash generation to date, we've updated our guidance for the year-end net cash to be similar to the end of 2020 at around GBP 700 million. As ever, that is subject to the timing of land spend. Given the pipeline of land that we're processing, it is possible net cash could end up a couple of hundred million GBP less than that, but we will update on that in November. There are no changes to the interest and JV guidance. The last thing for me to do is remind you, just in case you missed it, that our priority is getting the operating margin to 21%-22% and positioning the business for accelerated output-driven volume growth from 2023. We have a plan to do that. The components of that plan are on track. The early results are evident in the numbers we are presenting today. I think I'll hand over to Pete. Thank you, Chris. If I move straight on to my first slide, which highlights four key priorities, and Chris has mentioned the first two and touched on them, and I will spend a bit longer on them and give you a slightly different perspective, that on the margin focus, the balancing selling price and costs, and our focus on growth, particularly from 2023 onwards. The other two priorities relate to broader measures within the business. Our desire to deliver strong and consistent customer service, a very consistent, reliable, right first time build quality, and a great employee experience, and our broader social and governance focus, particularly the environmental strategy. I won't spend very long on the last two because Ingrid has covered them in some detail. Then I will talk at the end about how we see the outlook. Moving on to my first full slide on margin delivery. This obviously has been a big area of focus for the group, both internally and externally. We have said several times that we feel we got the balance of this slightly wrong in 2019. It's not a big shift, but we were probably 3%-4% too high on volume and 1.5%-2% too low on margin. Although the two are not entirely directly related, there is obviously a relationship. That changed in May 2019, and although it's obscured by the pandemic, our focus through the last 18 months has very much returned to margin-led, and as Chris put it, and I would reinforce, output-led volume growth. We believe volume growth creates value and is the right thing for us to do from a broader social point of view, but actually, it has to be balanced in the right way. Our cost control focus and systems improvements are in place. We can really see the fruits of them in the H1. We were confident as we went through last year that we could make those changes. We could see the benefits. I think the restructuring we completed in late 2020 made a difference to our cost base. Most importantly, it just streamlined and simplified our management routes. Ownership of costs is much clearer within the business. We believe a long order book and obviously the positive selling environment helps us. That long order book lets us focus on price optimization but maintain a very solid sales rate. The balance of that sales rate will depend on trading conditions, but we believe that although 2019 is a peak, that it's still appropriate to run at a sales rate that tends to be slightly ahead of the sector, given the quality of our outlook, the fact that we don't double head outputs. When we're talking about an outlook, there is just one Taylor Wimpey location on that, and that should, with large sites, drive higher numbers. Just to give you a sense of the balance that we've seen on cost and sales. We've said that the cost inflation has been fully offset by sales price, and I touched earlier that I would say as of today, slightly more than. I think that's quite important to understand. I think it's appropriate to be cautious as we look at the balance over the next six months. That slightly more than builds in some contingency against that. We continue to believe that we can achieve our margins within this environment and are highly confident, and I would say more confident than 6 months ago, given the performance that we have seen. If I move on to land. We said at the point of the equity raise that we believed that our land bank would grow by around 10,000 units as a result of the equity raise and our investments in land. That was from a level at that point in time of about 77,000 units. We continue to be very confident that that will happen as deals that we have already done flow through into the land bank. You've seen 5,000 plots of that growth happen in the first half of the year. You will see a substantial further addition in the second half of the year. At the moment, we believe that the land bank in total will probably grow by more than the 10,000 units that we flagged at that point in time. We have continued to be active to date. Although, as Ingrid said, Ingrid's comments on land about the quality and quantity of deals that we have done over the course of the last 12 months will be reflected by all of our divisional chairman. As we see a more competitive market at the moment, we continue to be active from much more of a replacement basis. We're very pleased with the quality of those sites. We have managed to rebalance the average site size, so it gives us more flex. We're also very pleased with the geographic spread with all of our businesses making land additions over the last 12 months and putting us in a position where all of our businesses are in a strong position as they look at the next 2 to 3 years of delivery. I think the key focus today, though, should be on outlook progression. You know over the last 10 years I've been very wary of giving outlook forecasts. The fact that I am giving one today should give you confidence that we have the sites and the capacity to at least achieve this number. We expect our outlook to grow by around 60 over the next 2 months, which sort of adds something around 22%, 23% to our current outlook numbers. A very significant growth number. That is not assuming that we hit every 1 outlook and get it through the planning process at the level that we expect to at an individual outlook level. That builds in some sort of contingency. Our outlook numbers should grow a little during this year, and we continue to believe we will end this year at more or less the same level as we began it. They will grow a little in the first half of next year, but they will really start to accelerate in the second half of 2022, which is very much in line with the guidance that we gave at the time of the equity raise. We enter 2023 with a significantly elevated number of outlooks, and actually with those outlooks already up and running and with building completions in place, which is why we expect there to be material volume growth in 2023. Some in 2022, but the material growth we're expecting in 2023, it'll be, as I say, outlook driven. We continue to believe that that level will let us deliver consistent underlying volumes of 17,000-18,000, at least 2,000 ahead of the level that we were running at before the equity raise and before the pandemic. Moving on to the third bullet point, which I'm not going to spend a long time on because Ingrid has spent some time on the broader softer issues. I do think, as I touched on right at the beginning, the focus across the business on underlying build quality is particularly important and I believe stands out in the sector. You can see customer service performance and the whole industry is focusing much more effectively on customer service than it was. I think we are unique in the level of focus and the investments that we've made over the course of the last three to four years in build quality. Across the board, our investments in systems and processes, in training our people, and in modernizing the business in many ways, I think are now starting to pay off. They don't always deliver immediately, but we're really starting to see the benefit. I will touch very briefly on employees. Ingrid touched on some of our employee survey results. Also we do see a real opportunity, particularly for our employees, but particularly for the business, to use some of the lessons learned around flexibility and remote working to make the business more efficient and to give a better overall experience for our employees. Moving on finally to our summary slide. Our sense is that market conditions remain good. We believe that the resilience we've seen over the course of the last 12 months demonstrates the underlying demand in the U.K. and the long-term low level of interest rates and good mortgage availability more than it illustrates the impacts of shorter term measures. That gives us continued confidence that the market will continue to perform well over the course of the next few years. Our strong H1 performance really does show the underlying quality of our landbank, and that although we acknowledge that 2019 didn't quite go to plan, but actually the business is in good shape and our assets are in good shape, and that we are perfectly capable of managing price and cost balance and showing improvements in the business. We have upgraded 2021 expectations today with a very de-risked H2. I do want to be clear that you should not expect material volume growth in 2022. We expect to deliver the guidance that we have given you, but we are very focused on our volume growth being driven by outlook growth, and so not returning to 2019 very high sales rates. Significant potential to build in 2022 on 2021 performance with some volume growth and margin improvement, then real potential in 2023 to show material growth and beyond that as well. We believe that our land investment gives us very significant potential ahead of the sector to outperform in terms of volume, but also to underpin that margin improvement. Lastly, just bringing together all of the other points, we believe our sustained investment in customer service, build quality, and our people places the business in a strong and sustainable position. We can move to questions, please. Our first question comes from Rajesh Sia from HSBC. Your line is now open. Thank you very much. Good morning, gents and Ingrid. I have 2 questions, if I may. The first one is on the house price inflation. First half was close to 3%. Considering how the market is right now, do you expect that house price inflation to nudge up further in H2? Just putting into context the 99% you have already forward sold for this year. How the order book you think could shape up in second half on house price inflation? The second question is on the build cost part. You helpfully pointed out that the first half, you kind of offset that with house price inflation as well as cost saving. Looking at how much pressure on the material side, could you please give any kind of guidance for the full year? What kind of build cost inflation you expect? Rajesh, on selling prices, it obviously depends massively on both questions, what time period you take, and the 2%-3% effect is that coming through completions rather than that point-to-point movement in house price inflation. I would say that the point-to-point movement from mid to late last year through to today is more like 5%-6% on house price inflation. We see that sort of length in our order book. Given the length of the order book, it averages out at a slightly lower number than that, but it's certainly above the 2%-3%. I think on cost price inflation, similar sort of pace. You've got to be very careful of the timescale. Cost inflation, we would say, over the last 12 months has been in the range of 4%-4.5%, but that's been weighted towards the last six months more than the house price inflation. We are seeing some softening of those cost price movements, but it's early days for that yet. It's been particularly driven as, I don't think will surprise you, by materials. There is inflation in sub-contract costs, but it's nothing like as significant. We're seeing that soften. I think as we look at the second half of the year, I expect to see positive house price inflation. I don't expect it to be as much house price inflation as over the last six to nine months. I expect to see some cost price inflation, but at a level by the end of the year. Probably won't have got to a fully normal level, but we'll have come back more into a normal band. I think it's hard for us to give a forecast on them, but we can give you a pretty clear view of what is running at the moment. Okay. Thank you. Can I just ask one more question on London? It's very helpful that the market is kind of booming and going back to a normal level. Can you just give a little more color about how that market is stepping up in terms of apartments and these larger single family homes? Whether the space is a new norm and people are kind of moving from apartment to these larger homes. I'm just trying to understand whether there is any kind of pressure points in the apartment segment which hasn't yet picked up compared to your business, which is kind of returning back to normal. I think if you are asking if we think there is a particular future price pressure to come on apartments in the London market, I don't think that's the case. I think two main reasons. One, as Ingrid said, we don't really believe that there is this sort of massive exodus from either urban areas or from apartments into non-urban areas. Very difficult actually for somebody who is choosing to be based in London to make a switch from apartment to a house. Finances just don't allow that to be a large scale movement. I think it's also important to have in mind that the level of construction of new apartments in London is running at a much lower level and for reasons around planning and relative weakness in that market before the pandemic. Actually, if you look forward at the next five years, I'd say probably there's an argument for some recovery in relative prices. I'm not sure that's going to happen in the next 12 months, but I certainly don't see a big relative risk on apartment prices. I mean, Ingrid, anything you would add to that or would you broadly agree? Completely agree. Yeah. The supply point is well made. I think that's very pertinent. Equally, yeah, as I said, I just don't think it's as simple as everybody wanting to move out of apartments into houses. That's just not what we see happening at the moment, and there's no reason to suggest that that will be a fundamental shift in the near term. Understood. Thank you very much. No problem. Our next question comes from Will Jones from Redburn Partners. Thanks. Morning. 3, if I could please as well. Maybe you could talk please just a bit more around speed of build rates. Obviously, we've seen lots of talk of material shortages, more recently the pandemic issues. Just any anecdotes around that would be great, and just how you think about measuring that. Some of your peers talk to us about equivalent units in build or build rate per week, but is there a particular metric that you like to keep on top of there? The second maybe is just if you could update us more generally about your availability per site in terms of product to sell and just how you're managing the issue of such a long order book. I think you said 99% sold for the year. I would imagine getting customers in August that pretty much everything for January onwards is fairly uncharted territory for the business. How they're, I guess, reacting to that proposition. The last one, just a clarification around, I think it was the approvals you've made. I noticed that the plot cost, the approvals was about 14% of sales versus 20% last year, which obviously quite a big drop down. I expect you'll answer with reference to net margin, but just in terms of how that should differ so much, I guess, on a yearly basis would be just interesting to learn around. Thank you. If you start answering the questions for us before you have even asked them, Will, we won't give you any information. Just on that last one, I think if you look at a long term trend, plot cost is an interesting trend. If you look at any period, obviously we could argue that this year's is better than last year's. I think that's a spurious argument. The reality is the volatility depending on the mix of sites, its significance, both by geography and particular balance between large sites with infrastructure and small sites that are ready to run. The 20% reflected the most uncompetitive sort of land buying that we've done in the last sort of 15 years as nobody else was in the market, and we were. Yeah, very much. Very openly targeting small sites that were quick to market at a point when others were out the market completely. You end up with a higher plot cost to sales, but actually stronger performance on those. The mix you've got in the first half of this year is more normalized. It includes a normal mix of strategic lands, lower plot cost to sales, but on average, larger sites. You really see there the early post-capital raise, sort of accelerated return to market with Taylor Wimpey. Sort of changing the plot cost, but also changing the speed and the mix of the sites that we were able to buy. Taking all the others together, because they're all kind of related to construction, I think we are very pleased with the way our teams are delivering in what is a challenging environment for them on the build side. We are getting the products that we need. We have little bottlenecks, but they are little, so it causes a lot more work for our site managers. They have to be on it all the time. You will remember that we are fairly unique in having a central distribution function that secures materials to the group and then distributes them as build packs. We have found that has been hugely helpful because it gives us good group-level information and a good dialogue. We've got a team that can back up our local sourcing with suppliers if we have any constraints. That is working for us, and we are pleased with where our build and our construction is. It does mean that if you wanted to step up construction by 15% to match sales demand, it will be next to impossible to do it, and your risk to cost quality and the pressure on the team would be quite high. It is a limiting factor, there is no doubt. It is being delivered well. I would say we're at least normal build rates per site. We don't tend to use build rates and equivalent unit measures because they can hide a lot of ills. We look at it site by site, and we look at outliers. We look at construction stages relative to where we are with the sales completion. We look at overall construction stages per site. If you focus your teams purely on, are they making a certain number of ticks in boxes, you can find you've got a large number of houses, all of which are 30% complete and none that you can actually sell. Yeah, we don't use one overall metric. We occasionally use it from an external point of view. I would say, this time last year, we were showing you some of those statistics on build rates. I would say today we are running per site above what we would consider a normal level of construction per site. Not massively, but 5%-10% above, matching the long order book and the high sales rates. It's hard for the team. We're pleased with the performance, but I don't want to take away from the fact that everybody in the team is having to work harder, and we're using the systems and the skills that we've got. In terms of the impact of that on availability, we are going on to largely on most of our sites since January and February last year. It's territory we've been charting for a little while now. I think we have responded far clearer at managing the communication and the dialogue with our customers. If you look at the customer service performance, we've seen historically, long lead times can impact on customer service scores. Those customer service scores at 92% for the first half are obviously people, many of whom reserved at different stages of the lockdown, and so have had an extended period of time from reservation to completion and have faced delays. I think that's good evidence that we're managing communication and the information with our customers well, and we are much better than we were 4 or 5 years ago. If we're selling 6 or 7 months ahead to know that the build program can deliver. The number of sites where the build program gets delayed at that point is significantly less than the delays are left. I think that the management and the control and the systems that we've got to make sure that our forecast dates are reasonable, are much more reliable. If I go to the sales rate, I think it is interesting that the sales rate we have today for this year is exactly our targeted, budgeted sales rate. We are managing to price and selling into the market that's there. We are where we want to be. Great. Thank you. Sorry, just tying back up on the original land cost point. I don't think the bubble chart is in the way it has been before, and perhaps it's in the release, so apologies. Those approvals in the first half of this year, are they still, in theory, creating a similar level of return to those you made in the past? They are. Yeah. Cool. They are. I think I said a couple of times we were going to remove the bubble chart over the course of the last couple of years. We finally have done it. Yes, they are very much at those same level of returns and at the upper end of that 21%-22% margin range. Great. Thank you. Our next question comes from Gregor Kuglitsch from UBS. Your line is now open. Hi. Good morning. Couple of questions, please, or maybe three, actually. Just coming back on the volume ramp up. You've kind of given some indication clearly for this year, next year, I think you're saying modest, I don't know, maybe 5%, and then you kind of reiterate the 17,000, 18,000. If you just give us a line of sight how meaningful the step-up is, I guess, in 2023 before we kind of reach that ambition, which I guess is beyond 2023, but correct me if I'm wrong. The second question is on land. You kind of called it out, I think numerous times, which is increased competition. Can you give us a sense compared to maybe six months ago, how the intake margin is evolving and what the degree of pressure is there. Finally, maybe it's just a generic question, but you obviously decided to make London an emphasis of today, and I just wondered why that is specifically. Was it just because you thought it was interesting, or are you specifically trying to call out that London is coming back? No, let me deal with the last one first, Gregor. I don't think we were particularly aiming to make London an emphasis from a strategic point of view. We think it's important for you to see a broad base of the team. Jenny has presented a number of times, but Jenny is on holiday this week. Ingrid is a key part of our team, and it felt like a good opportunity for you to hear from her. I'm conscious we haven't done a capital market day in a while and probably want to wait until we can do one properly face-to-face. So it's more driven by wanting you to hear from the broader team and to give Ingrid a chance to talk to you than it is that we're making a strategic stake on London. We have reduced the scale of our central London business, we still continue to believe that London and the South East is a good market and a market we want to be in and that we're continuing to invest in. That shouldn't be new news. It's more about people than it is about London. Chris, I'll go back to you at the end to pick up Gregor's volume question, and if I then pick up the land question and then hand it over to you on volume. You're right, we have called out the increased competition. I doubt that will surprise you, and it certainly doesn't surprise us. I think what we believe is we saw competitors return to the land market much more gradually. 1 or 2 actually, including 1 larger private business, came into the market actively at the same time as we did 12 or more months ago. Others were slower until getting into late 2020, very early 2021 and then are trying to catch up. As house prices have risen, you have seen an increase in land prices. Answering your specific question, I wouldn't flag a decrease in intake margin, but I would flag that the land prices that we were paying 12 months ago, which are still coming through onto our balance sheet now, are materially lower than land prices today, with land prices today reflecting a meaningful movement in house prices as they normally would. I think it does obviously make us particularly pleased with those acquisitions. Chris, I can go back to you on the volume and the volumes in the 2023 question. Yeah, of course. Just to be clear about the trajectory. In 2021, we said we previously guided completions in the range from 13,200 to 14,000, and we are now guiding completions to be towards the top end of that range. What we are saying is for 2022, there will be modest growth on those 2021 upgraded volumes. It is still too early, obviously, to be providing any sort of formal guidance for 2023. You can see from what we are saying in terms of the outlook and the fact that we are giving you an indication on outlook growth over the next 24 months. I think that underpins an indication of what that number in 2023 would be. I think consensus currently sits at something like 15,972, so I would be very comfortable with that number. Thank you. All I would add is we're flagging 4% or 5% completion growth in 2022, and the fact that we're saying the bigger growth comes in 2023. Chris is right. It's early for formal guidance on a number. Of course, it would depend a bit on the market, but the potential and scale. Again, it's one reason we've given you the net outlook growth number, not just the number of new openings we might have, but a net additions number is to give you some sense of the potential there for 2023. It is early to make a specific number. Thank you. That's helpful. Thank you. Our next question comes from Ami Galla from Citigroup. Your line is now open. Yeah. Morning, guys. Just a few questions from me. The first one was on the Future Homes Standard. Considering the direction of travel and energy efficiency regulation in the industry, do you think you would need a greater usage of timber frame in the future? Is that one of the investment plans in the business going forward? The second one, if you could give us some further color on the ongoing discussions on developer tax levy, where is that heading? The third one is really just a follow-up on your comments around what's happening in the land market and while intake margins are holding up, how sustainable do you think is the medium-term margin guidance beyond this 2024 timeline? Yeah. Just on Future Homes Standard. I think the standards come in, but very much what we have been talking to you about since very early last year. There is no surprise for us in those, our teams have been working out as the regulation has become more clear, they've been working out the exact sort of methodology. We do expect more timber frame, and we've been building more timber frame over the course of the last three or four years. Albeit, I think that will change, and it does depend on the particular house type, the location, depending on weather and availability. We don't see it as going down a wholly timber frame route or even a massively timber frame route. Having the flex to be able to use it where it's relevant is important. I've said a couple of times, I would not rule out us investing in timber frame construction as in a timber frame factory. It's one of the few areas of vertical integration that I think we would look at. It still remains pretty uncertain about what the right answer is. We're doing a lot of work at the moment about different build methods, but what we have seen is a lot of people both inside the industry and suppliers to the industry making big statements about the next methodology, but then it quickly changing and a different methodology being more effective. I've got to be honest, we're consciously watching, researching, testing, and our technical guys are all over it, but actually not quite convinced yet that we've found the best long-term answer. That knowing what the regulation is now sort of helps, but I think it's where the regulation changes again in 2023, that we really need to see that shift. On land margins and going to your specific question, does the land environment make us question the sustainability of the 21%-22% sort of margin target? The short answer is no. We have said before that if we put all the maths together on the land we've got at the moment, the land we've bought over the last 12 or 18 months, then mathematically, our operating margin should be above that level. I think it is imprudent for us to assume that's the case, but effectively lets us absorb lots of moving parts, if you see what I mean. I think we continue to believe it's the right movement and that actually we can absorb the ups and downs that we would expect in the market, including things like regulatory changes and shifts in the land market and still maintain that guidance. You would never say there is one perfect 1% range that you would never be able to be above. We size that guidance as being something we believe was a reasonable medium-term sustainable level rather than a Hail Mary, we could get there and then not stay there. That's the aim of it. On the developer pack, I'm afraid there's nothing new to add. Chris, I don't know if there's anything you want to say, but I'm not sure we've got any particularly new news. No, I think you'd have to ask the Treasury. Thanks. That's very helpful. Our next question comes from Marcus Cole from Liberum. Your line is now open. Yeah, morning all. Hope you're well. Just a couple of questions from me. I was just thinking with a special in mind, really. Could you remind me of what your view is on surplus capital? Then just to clarify, should we expect land investments to return to replacement rate from 2023? Thanks. I think again, in reverse order, picking up the land investment 1. In terms of new approvals, we expect to be at more or less replacement level from here on in. There will be elevated additions to the land bank over at least the next 6 months and probably the next 12 months, just as the land that we've already sourced flows through. Sat here today, looking at 2023, I'd expect us to be operating at more or less replacement level in the land market. Obviously, that's a slightly tactical question in any 1 year that we'll be a bit better placed to answer as we get closer. Sorry, could you just repeat the first question? I was just thinking in terms of surplus capital. What's your view on where you would start returning a special, really? We still continue, and it's sort of what we probably said a year ago and have repeated since. Our expectation is that we will make some sort of capital distribution in 12 months' time, and sort of basically back to where we were pre-pandemic in terms of timing of cash returns. That we will announce that on a more normal timeline than we have done historically. Likely to be with our prelims in February next year in terms of quantum. Okay. Thank you, Rob. Our next question comes from Christopher Fremantle from Morgan Stanley. Your line is now open. Hi. Good morning. Just 2 questions. First, just to be clear on what you're saying on the margin side. You talk about the 21%, 22% margin guidance. Are you suggesting you can get there in 2022 already, or do we need to wait until the volume ramp-up comes through for us to get to that sort of margin target? Any color you can give on the sort of 2022 margin progression would be helpful, please. Just on the developer levy. Is it your expectation that we're going to hear more on that in the U.K. government's Autumn Budget Statement? Again, are we going to need to wait a bit longer for that? Any color you can provide on that would be. I'm going to combine those, Chris. Thanks. On the developer levy, unfortunately, fairly similar to the last answer in that obviously it's under consultation at the moment. Will it appear in the autumn budget? Perhaps. I don't know. We'll just have to wait and see on that. I think on the margin side, for 2022, what we're saying is unchanged from what we've said previously. We expect to get back to a normal-ish margin in 2022, similar to 2019 levels, so somewhere in the range 19.5%-20%. Clearly we'll be targeting the top end of that range and push to get something starting with a 2. Clearly as we move into 2023 and the volumes step up, then the improved recovery from those increased volumes will help the margin further. Okay. I think if I can add one thing, which is not about sort of where our guidance is, but it's about where our focus is. I think we've said it, but I do think it's important to sort of stress it in relation to 2022. I would really counsel you not to go above the top end of our sort of volume range for 2022. Where we will be focusing is delivering that volume properly, but also focusing on the margin delivery. If there's upside, it's in the margin more than it's in the volume. That will, of course, depend on the balance of costs and selling price we've talked about. That's where we will be focusing so that we're in a strong position to not to reduce outlet numbers sort of and burn through them too quickly, but be in a strong position for that 2023 growth. Thank you. As a final reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad now. Our next question comes from Gavin Jago from Barclays. Your line is now open. Morning, everyone. Hope you're well. Just a couple from me if I could, please. The first one is just around, well, the medium-term volume targets. Just wondering if you could put some color around where your average site size has moved, I guess, over the last five or six years, and I guess how much of a driver that is for meeting these new targets and how much is maybe in the maturity of regions, certainly that Ingrid touched on earlier. Then the second question is just around the nine-month score. Again, in Ingrid's part of the presentation showed what that nine-month score was with some progression. Is that broadly reflective of where the score is for the wider group? If not, can you give some color on that, please? On the 9-month score, there's been a meaningful improvement over the 6 months at group level as well as in Ingrid's patch. I think I'm right in saying, I don't have the 2 data points in front of me, I think I'm right in saying that if I look back at last year, for instance, the group was slightly ahead of the London and the South East patch and still is today, both have moved forward materially. A bit like the build quality measures, we continue to believe that it's important to be at a 5-star level on the shorter term survey. Actually from our customer's point of view, it's just as important, if not more so, to deliver a good 9-month satisfaction score and a good underlying build quality because otherwise you risk just sort of window dressing on the shorter term perceptions. I think, yeah, if you get all three of them in a good place, then I think you're delivering overall a good customer service. That's always been our focus rather than just focusing on any one measure. I think on outlet numbers and site size, as I said, the sort of acquisitions immediately after the EXUAs were at a smaller average site size. That will have brought down the average a bit. It's not made a massive difference, and it doesn't need to. I've said before, and I would repeat it, we have no problem with large sites. We think, yeah, large sites, once you have them open as an outlet, give a very good level of consistency. Level of competition is less. We do believe you can sustain higher build rates and sales rates on them, and we're proving that sort of at the moment and higher margins. We just think we let that go a bit too far in 2019. It doesn't mean that the underlying sort of desire to make those sites work for us is in any sense wrong. Our average site size is probably around 290 at the moment. We tend to look at it on acquisitions rather than where it sits in the land bank, so that's why the probably, otherwise a slightly cautious number. The key bit which we have to focus on is the right balance between outlets and sales rates, hence the strong focus on outlet-driven volume growth. Why ever so slightly grudgingly, I'm giving you an outlet growth forecast because it's really important to understand that that's a key part of what's going on in the business. We have a lot of outlet growth potential and that 50 outlet growth over the next two years isn't the end of it. As I say, I've put an element of contingency against that. What we didn't find is we will get those outlets, but some of them might be later. That 50 reflects already a degree of caution, but continued growth in outlets in later 2023 and 2024. Gavin. Brilliant. Thanks. The 9-month score for the group is on page 8 of the prelims. It's 80% compared to 76% for the first half last year, so 4% increase. Excellent. Okay. Thanks very much, gents. That concludes our Q&A session for today. I will now hand it back over to Pete Redfern for his closing remarks. Thank you. Thank you, everybody, for your time this morning and for the questions. Thank you, Ingrid, for your presentation and the extra depth that hopefully you've given people, and look forward to our next update and catching up with you then, and hopefully before too long in person. Thank you for joining the Taylor Wimpey PLC half year results presentation. This call has been recorded and will be available to listen on demand on Taylor Wimpey's website later today. You may now disconnect your line. Thank you.