Earnings Call: H1 2020

Sep 8, 2020

Good morning, everyone, and welcome to, Vistry Group's, half year results presentation. Bits are real during this, on a screen. So hopefully it will come over pretty well. We had a huge debate. I'm joined by GrandPro operating officer on my left and ill Sibley, the group finance director on my right as to whether to do this, live or do it prerecorded? Obviously, Both Earl and Graham are worried about how they would come over and how they look. So, but I've overruled them and said they'll be fine. So we're doing this live warts and all. And the other thing is we can't rely on any, on any props to make you all, laughter in the presentation. And, some of you will remember a very young Rob Johnson turning up late to the March presentation, boulders brash rather than just filtering into the, into the audience walk straight. Into the auditorium straight up the middle stairs and, of course, promptly fell out of a tick, which caused a tremendous, tremendous giggling, but none of that's, none of that now. So welcome. Right. So the the agenda, key highlights are run through along with the group strategy. Over to Will for the financial review, Graeme will take up the operational update and then I'll finish things off with an outlook and then give the analyst on the call, the chance to answer a Q And A. 4 great photographs there showing what we at Vistre do, with Bovis' problems, which were well documented from 3 or 4 years ago, our build quality has now reached the stage where we are confident enough, as you can see on the photograph there on the bottom left, black, and more metals in Solbridge, to now actually be building a number of properties with thatched roofs. And an interesting story there, obviously, you use a thatched roof. You're using a local traysman, a local thatcher, And that property there was only finished, in the last week or so, and we had a last minute hitch that the fact he under ordered and, had to reorder. Now you would think, as I did that, the thatch was a local product, but in actual fact, the thatch comes from Portugal, So we had to fly in on a cargo plane, the last bit of the FATCH. The first available flight was to Cardiff RAS Airport, but of course, if it landed there, that that would have had to gone into quarantine, from Portugal. The second available flight was, at Edinburgh Airport in Scotland, and of course, it had gone there, it would have also had to have been, quarantined. So we ended up on the 3rd available flight flying it into Bristol in England where there was no quarantine and we move on and the that is now finished. So on to the key highlights. So transformational acquisition of Linden Homes and Victory Partnerships completed in January. It's been a successful integration with synergies ahead of initial target So we're looking at annualized savings of GBP 44,000,000 against GBP 35,000,000 at the time of the acquisition. And the cost of achieving those savings where we originally said GBP 35,000,000 will now be GBP 30,000,000 at maximum. So that's great and aren't honestly look at the screen now and say 9 months into the acquisition, I've not been as happy with the acquisition as I am today at any time over the last 9 months We've had no major surprises from the acquisition 9 months on, and that includes, as we'll talk about during the presentation, the transfer of 87 different sites to different business units and to different, divisions and in actual fact, to different businesses altogether. So it's all very well. I'm saying it's going well, but there are 1 or 2 external KPIs out there that we can point to. So at the time of the acquisition, Bovers had just become a 5 star house builder great, move by Bogas. And thank you very much again to all the people that were involved in that huge, transformational customer focus orientated work over the 3 or 4 years. So in March, Bovis became a Firehouse builder, but at the time of the acquisition, Linden were a 4 star house builder. You added the 2 together and we were probably just about a very, very high 4 star house builder delighted to say in this inaugural year of Vistri, we're currently trending at 91.3%, which is about in line where Bovis were a year ago, and we will end the year and be staggered if we don't as a 5 star house builder brilliant when you take into account all the reorganization, all the office closures, and in fact COVID-nineteen and the lockdown from the end of March. The next external KPI is we haven't carried out any staff surveys through Pecom, which are an external organization, since the acquisition until the beginning of August. And even on the night before, we actually sent out, the Circular II or staff, I thought, do we really want to do a staff engagement survey at the point, when we've closed 4 offices, we've made numerous redundancies, we've had pay cuts, we've had furlough, we've had sites being transferred equivalent of me inviting every member of staff into my office, starting the meeting off by giving me a good clip around the head, then giving them a bollocking and then saying given another clip around the head and saying on your way, I can just fill in survey, tell me how you found that meeting. So we were staggered with our engagement score coming in at 7.6. Those of you who follow Pecon servers, surveys, anything over 7 is, thought of as good. The benchmark, national benchmark is 7.2. So we were absolutely delighted, with that score. And one of the reasons that score was so high is on the question, how do you think the company have dealt with the corona, pandemic crisis? We scored a massive 8.6 percent, which is unheard of. So we had a rapid and coordinated response to COVID-nineteen. We closed our sites in a very orderly fashion at the end of March and that impacted massively house buildings first half, output and performance. Partnerships demonstrated very much its market resilience and led the group's return to site. And we were the first and acknowledged as the 1st house builder to start back on-site by a number of RMR subcontractors. Our half year net debt was significantly lower than we thought at the time of the lockdown. Production capacity has returned to near normal levels. And is it 85%, is it 90%, is it 95%. I think we should all move on from that debate. We are now successfully building in partnerships to the contract program, and we are easily being able to build to the sales rate, which we'll come on to later on. So we've moved on from what the coronavirus is impacting on building efficiencies. And we're that confident with our position at the present moment in time we've agreed and we will be paying back the furlough monies to the, to the government, which totaled about 1,000,000. So outlook, strong pickup in customer interest and sales, prospects are at the highest level for many years. The sales rate since the 1st July is 20% up on the prior year and is currently at 0.73. Now if you look at that, 0.73, those of you who followed Bogus for a long time, in my just under three and a half years at Bogus, we've never achieved a sales rep anywhere near 0.73, let alone during the summer period, which is notoriously slow, but we've gone back over 10 years, at Bovis and Bovis are still never had a sales rate of 0.73. That's how strong the market is. Pricing remains firm against that sales rate. We're probably about half a percent on forecast. We've got a record order book with total sales, around 1,000,000,000. We're expecting a stronger 2nd half performance, obviously, and we're expecting to deliver a profit before tax in the range of 1,000,000 to 1,000,000 excluding exceptionals. The group also has the ability to deliver at least GBP 310,000,000 profit before tax in 2021, based on the current sales rate and productivity levels. We've got a clear approach on capital allocation. Our primary focus is deleveraging and we're targeting gearing, including land creditors, of 35% at the 31st December 2021. And our debt levels at the end of 2020 should give us a gearing of about 16% with scope to improve on that. Investment, to support land sorry, investment in land to support growth. That's relatively aggressive growth in partnerships and much more modest and controlled in house building, and we're targeting a dividend payment in respect of 2021 with a progressive dividend, thereafter. So moving on to the Vistry Group strategy. So we are a top 5 house builder and we think we're uniquely placed on the house building side, we are a 5 star house builder. We've got 2 leading house building brands, National Scale And Coverage a valuable land bank, which, Earl will pick up on, a very, very strong Strategic Land Bank with a very, very strong team there and controlled growth and margin opportunities in House Building. Our partnerships we are a leading provider of partnerships housing in the country. We have an excellent reputation of firmly established relationships, and I underestimated partnerships at the time of the acquisition. I knew the reputation was strong and I knew they had some great relationships. I underestimated that. It's better than that. National Scale And Coverage, High Growth Asset Light, countercyclical, revenue model, and I was just saying to the press, on a few calls a minute ago, I think the timing of the acquisition of partnerships because of the coronavirus will actually be seen to be spot on, supported by of course the 2 leading house building brands, you know, so partnerships also use the brands, Bogus and Linden, and there is significant revenue growth and margin expansion over the next few years. I won't focus too much on this other than to say The important words there are one industry group, Linden And Partnerships at the time of the acquisition were 2 separate companies. So we didn't buy one company, the Gallifer Tri Housing Business we bought 2 companies, Linden, and partnerships. More and more, we're just trying to have one victory group. So it's one business with a house building and partnerships brand. So house building led by Keith Carnegie, partnerships led by Stephen Tiegel, and what's helping that one visture approach is the joint services that, group offer. So sales and marketing is joint, strategic land is joint, health and safety is joint, HR Learning And Development, all joint. The revenue drivers within, house building, so we've got 13 business units. They've all got the capacity to build 550 625 units, which when you do the maths comes to 8000 units, which gives us growth, for quite a few years to come. Working just from those 13 business units. It's always a big risk when you open a new business unit in a new area, so that's great. We are and it's really helped us again during the, this pandemic. We do very little in the town centers We're out of town, in the, if you like the suburbs. We have, as did Linden prior to the acquisition, dramatically looked at our land bank and wanted to de risk it. So I'm delighted to say today, if you look at our land bank, about just under 70% of our land bank is for two and three bedroom houses, Another 20 odd percent is for small four bedroom houses, with only 7% of the land bank being made up of, 5 bedroom houses, which very much is a much less risky market, but it also plays to where Help to Buy is going from next March for first time buyers, of course, We've done a lot of work and incredible amount of work in the 1st 9 months on brand differentiation. Bervous homes will, going forward, the larger distinctive homes with more design features. And Linden Homes are well designed homes, of course, but competitively priced. We have a very low against our sector, our reliance on Help to Buy. Only 30% of total sales come from this area and about 75% of those sales are to first time buyers. So we don't actually, we're not soon at all about the change of 1st, of Help to Buy to 1st time buyers from April next year. And we do have further opportunities in part exchange with only 10% of our sales, coming from part exchange, and we do have a bigger facility to enable that to grow. House building gross margin. So our house building margin, which, we'll talk about, is, embedded at 24.2% as of the 30th June. Which is better. And I have to say we've done more than kick the tires, with 87 sites being transferred. We've carried out full diagnostics if you were in the car industry, that is a very, very well worked out embedded land margin. We've got a fantastic strategic land bank with a fantastic team, as I said before, 32,000 strategic plots where we would expect to get up to 3% higher margin than buying on the open market. High quality processes, standards and outputs. So as said earlier, we're a 5 star house builder with continue to be a 5 Starhouse builder this year and going forward. And our reportable items, which the NHBC issue, are at 0.28, which are lower than the industry standard, which is great. Specification and procurement based specification has been aligned across both brands the Phoenix range and Linden Connection have both been tweaked to optimize, each range, and they've both learned from each other as it were on that. And through our procurement team, we've renegotiated 200 supplier contracts to take into account the size of the organization now, which next year will be building around about 11,500 homes. Jewel branding. So we've got clear brand propositions, as I've said, we have 36 active or pipeline dual branded sites, which will help the group return on capital and sales rate, and we've invested heavily, which Graeme will talk about later on in a digital sales platform. Moving on to partnerships, which differentiates us from our peer group, integrated, contracted, developed skill set, end to end solutions, extensive track record, national footprint, and 2 leading house building brands. So if you go to the right hand side of slide that all of that adds to long term contracting projects, high percentage of pre sold mixed tender development and very cash generative. High market demand, which I think is going to get higher as we come out of this pandemic, we're going to increase the demand, out there for mixed tenure product and the growth of residential as an asset class is increasing our range of partners, and I'm confident over the next few weeks, we'll announce another couple of big contracts through an RNS of about 1,000,000 in the PRS sector with 2 blue chip customers. Strong growth potential indefinitely the higher margin mixed tenure development, which should be supported by, the balance sheet of Vistry, which Gallipa try, of course, didn't have. And supported by the valuable land bank, including our strategic land bank portfolio, which is operating between partnerships and, house building. Delta dependent on risk retained. So on the contracting side, we're looking at operating margins of 3% to 5% low risk, cash generative, very cash generative. In fact, predominantly that's carried out in London, then you've got land led contracting. This is where one reason or another, we control the land and can get better margins of 7% to 11% by offering an overall package to, particularly housing associations And the growth is going to come from mixed tenure developments where we typically have margin, operating margins of between 11 and 18%. So how are we going to get to our 10% margin target, in 2022? We will continue to do the amount of contract that we do, but we will increase the amount of land led contracting and particularly mixed tenure development with increased investment to get to that 10% all important margin by 2022. Great example here, Lee Castle Kidster, too much to go into, but I'm sure we'll take questions, but it's, in due course. But this was a Holmes England site. We bid and won it through the development partner panel, we increased the affordable housing provision from 15% to 40% so we've got more money up front. We entered into a joint venture with citizen housing association, and basically all of that means with the increased an affordable and having a partner with regards to doing the mixed tenure development that the extensive, works to get the site to happen, the, is now probably costing us between 30:35 p in the pound to get that initial infrastructure works to sign. We are being very aggressive with the growth in the Partnership's business. So we're targeting, by 2022 6000 plus units, revenue of in excess of 1,000,000,000, but all importantly, we're expecting a margin of plus 10% from the 5.4% that was achieved in partnerships in 2019. And that will come from additional investment, which is already happening within the business, which Graham and Earl will talk about. So the overall investment proposition that Vistry offers, high quality land bank, valuable strategic land portfolio, broad geographic coverage, leading partnerships business, high quality branded product, 5 star customer service. So in house building, at the revenue growth, we can get to 8000 units from our existing 13 business units. We're targeting very quickly partnerships revenue of GBP 1,000,000,000, and we're going to increase the percentage of our market resilient revenue, which will come from mixed tenure in partnerships and more and more 2 and 3 bedroom houses from house building, significant margin improvement will come from, obviously, the land bank embedded margin in housebuilding at 24.2% And as I've said, a couple of times now, we're targeting a 10% operating margin in history by 2022, and cash generation will come from primary focus on deleveraging, we're targeting a 35% gearing, including line creditors as at December 2021, with debt levels at the end of this year at with scope to improve on this number giving us a 16% gearing investment in the land bank in house building, but particularly in mixed tenure development within, partnerships and the resumption of the dividend a progressive dividend policy, going forward from 2021. Thank you, Greg. Good morning, everyone. I will briefly take you through the results for the 6 months. Our first segmental analysis touch on debt and liquidity, and then also our land bank and balance sheet. So in terms of the summary results, presented on the slide are both on an adjusted and a reported basis. And when I talk about adjusted, that is pre the exceptional costs of restructuring and the amortization of the acquired intangibles, but it does include our proportional share of our joint ventures through to the operating profit level. So Greg alluded to, obviously, the results significantly impacted by the impact of COVID 19, but also show through in terms of the acquisition at the beginning of the year and the integration going on within the business, particularly the 1st 2 or 3 months with our house building business. So overall, revenue actually up 40% year on year to 661 1,000,000, and that is comparing, obviously, to the Bovis Homes equivalent period last year. Gross profit of 84,700,000 an operating profit of 21.2, delivering a profit before tax, before the exceptionals and amortization of 10 point 3,000,000. Within those numbers, we have identified and recognized directly to the P and L of GBP 10,200,000 worth of costs relating to the impacts of COVID 19 and also recognized a credit of 6,300,000 of furlough income the government's job retention scheme, our intention is to pay that back in the second half, but we were not committed to do that as at the 30th of June. Hence we have recognized it in the first half, and it will reverse in the full year. Also on the screen is, our net debt at the end of June to the SEK 357,000,000, much lower than we expected in the early weeks of lockdown reflecting the early return to site from partnerships and the contracting cash flows that came from that as well as higher completion volumes from the housing business. We've also provided some pro form a results which is the aggregation of Bovis plus the published numbers for Linden And Partnerships, from June last year. So here, giving completions and revenue numbers and obviously in part, the, 2019 numbers are more indicative of what the enlarged group will be able to deliver in future. And, I would say following presentation, there's no more pro form a information as beyond revenue, the data is not a true comparable. So in terms of segmental, the house building financials clearly significant impact on completions from the lockdown period, and that shows through in terms of the gross profit and the gross profit margin at 14.1%, a number of impacts going on there, and I will just mention 3 of them. House Building did identify 8.6 £1,000,000 of direct costs relating to COVID, and that had a 2.5% impact on that housing gross margin. There are further costs relating to COVID, so from elongated programs, longer working hours, and some of the health and safety measures that we've taken, and we estimate a 0.9% impact of the margin from that. And then as a group, we recognize a full 6 month sales and marketing cost in the period. And based on the lower volumes, that has had a detrimental impact on the housing gross margin of around 2.8%. Hence, looking forwards, we expect that gross margin to bounce back in the second half and be over percent and continue to progress during 2021. And then on beyond that, to the embedded gross margin on our land bank, as Greg mentioned, of just over 24%. In terms of the tangible net assets within house building, just under 1,700,000,000 reflecting the acquisition of Linden Homes at the beginning of the year. So just a few house building metrics on this slide, in terms of completions and ASP, I'll pull out just a couple. Private ASP is down year on year, And that does reflect the strategy of, on average, having smaller houses and a lower ASP in our land bank, and that will continue Greg's already mentioned, PX at 10%, still a relatively low level to which we could do more, but still being done very robustly. So as of now, we've got less than 10 homes that we have owned for over 3 months, so well controlled. The affordable 21% is a little low, and that will be a little bit higher by the end of the year and a bit higher through 2021. So probably in the mid-20s percent for 2021 and at 30% help to buy, still an important sales tool, but relatively low compared to some others in the sector, and we are well positioned for when that scheme changes next year. Partnerships, no comparables, as you would expect, but the numbers do show a very strong performance in the 6 months and reflecting that early return to site with the operating profit of 12,400,000. And we do expect a strong performance to continue through the second half based on that early return to site and the level of presold contracted work that they are delivering. Cash and debt. You can see the big impact in the period was the acquisition at the beginning of the year. So $400,000,000 of cash going out and also the, novation of the £100,000,000 of US private placements coming in the development receipts of 763,000,000 is a good performance given the activity levels, in the period. In terms of that cash inflow. The construction and overhead expenditure was in excess of those receipts. We're, very actively investing at the beginning of the of the 6 months, clearly shut down due to lockdown and then early return to site and activity levels increasing to the end of June. And we currently have, just over $400,000,000 of net debt Looking across the year, I expect to have average month end debt of around SEK 360,000,000 And then at the end of the year, as Greg alluded to, we are targeting a net debt of between $230,000,000 $250,000,000 with some opportunities within that in terms of some further contracting revenue, and also possibly a little extra volume And that would be, we estimate circa 16 percent gearing. And if you include the land creditors within the gearing measure, that will be a little over 40% at the end of the year. So in terms of liquidity, we still retained GBP 770,000,000 of banking facilities with maturity spread out to 2027 as detailed on the slide, and we are also eligible for the CCFF, although have no intention to draw on this at the moment. Also given there is the land creditor profile. So we continue to buy land on very good deferred terms, and we'll continue to do so. And we did look to defer certain payments in the first half of the year during lockdown. Overall, those land creditors represent 34% of our gross land, and that's actually a little bit lower than the bogus position at the end of December, which was around 36%. So again, to be clear, in terms of capital allocation, absolute number one priority is the deleveraging, of the balance sheet, and we are targeting a gearing that includes land creditors by the end December 21 of 35%. And you'll remember, I just said we expect to be at just over 40% by the end of this year. And then a commitment to continue that deleveraging through 2022 and beyond. Next priority, the investments are maintained housing land bank to support that controlled growth and investment in partnerships mixed tenure in order to grow that business And then third, as appropriate looking to resume dividends, in respect to 2021 and beyond. So put that, sorry, just in round numbers in terms of the cash and debt, if you take the the circa GBP 300,000,000 of profit, we've guided to the next year. Circa GBP 100,000,000, we will be looking to bring the debt down by investment in the business possibly to the same sort of number, and therefore, we can review the appropriateness of the dividend at that point. In terms of land, we were very active in the land market at the beginning of the year, and the dots on the map show the activity in the year to date, much of which was done prior to lockdown, but we have been back in the market on a discipline basis more recently. So you can see the purple dots on the screen are, for the house building sites that we have acquired, there are 3 additional partnerships mixed tenure sites have come in, and we've also continued to invest in the strategic land with 6 new options. So overall, 3400 and 6 plots acquired across 13 developments. So we've more than replenished the house building plots in the first half. Strong investment into that partnership's mixed tenure as well. And more recently, we've added, 13.46 plots conditionally contracted. So we have been more disciplined, been able to get some more conditionality and some contracts subject to detailed planning, post lockdown. Strategic land continues to be a strong source of land, including a thousand plots from our development in culling Tree, we have put that into a joint venture with Clarion Housing Association and recognized just over a £1,000,000 of profits through that transaction. Overall, we continue within house building to buy sites, delivering at least an average gross margin and rocky of 25%. So just a couple of slides on that land bank. Firstly, the consented land bank, so in house building, over 30,000 plots, representing, 4 years' worth of land. We do intend to maintain a 3.5 to 4 year land bank. And again, within that land bank, you can see the average sales price is dropping slightly in line with the strategy of buying on average slightly smaller homes. Terms of partnerships, 7700 plots, including the joint ventures, looks like 6 years based on current production levels, but that really indicates the growth that we intend to put through that business still very strong to nearly 33,000 plots, and it will continue to be, a short term supply of land. So you can see on the the bottom right of the table, still twenty sites coming through with either planning agreed or a planning application running and they will be the next sites to contribute to our consented land bank, giving us an opportunity to feed the Partnership's Mixed 10 year business, Jewel branded opportunities and, our strategic land bank does cover our increased geographic footprint. In terms of balance sheet, really does reflect the impact of the acquisition at the beginning of the year. So on the acquisition, we've recognized goodwill of around $550,000,000 and intangible assets of around $150,000,000, predominantly the brands of Linden Homes and Drew Smith, as well as the value of secure contracts and customer relationships You will see a significant increase in the investment in joint ventures and the amounts due from joint ventures that in reality reflect the land and work in progress on the joint ventures we've acquired with Linden Homes And Partnership. So effectively, part of our infantry is and land coming in. Overall, net assets of just over $2,100,000,000. And finally for me, as Greg mentioned earlier, the synergies we now expect and are targeting $44,000,000, so a $9,000,000 increase from the expectations at acquisition. They are coming from both overhead savings. So the closure of 4 house building offices at the beginning of the year, headcount reductions and the related costs to those as well as getting economies of scale from our central services functions. In addition, direct procurement, delivering in excess of our expectations, having reviewed all our contracts with our supply chain and reviewed our technical specification. So we are well on with all of that, and we expect to deliver 20,000,000 of synergies in 2020. And then be the full run rate by the end of 2021. Again, as Greg mentioned, total exceptional costs we expect of $30,000,000. We recognized $15,000,000 in the first half and a little bit of that may go into 2021, but that's below our initial expectation of $35,000,000. And with that, I'll pass you on to Graham. Morning, everybody. I think it's, absolutely fair to say it's been it's been a busy 8 months, Phil, we've achieved an awful lot. We moved very fast initially to implement the restructure, which meant happily we were through the major reorganize before, before lockdown. Greg's touched on the structure. We also made a full review of both our ranges in order to optimize the product and, and refine the distinct, the distinctive brands, we also very quickly rebranded Vistry partnerships. And we looked harder at our specifications, both the the technical specification and the finishing specs. We wanted to optimize the product and of course, as Als alluded to, they maximized the economies of our new scale. We refocused, our central services And, that's all gone very well. Obviously, we're well, we're ahead of where we expect it to be. IT, of course, takes time, but the plan's clear and we are ahead of where we expected. We've we've already got a, a single consistent coin system across house building, We're well on with a new, coin system for partnerships, which means that we'll be able to break free of the support services from Gallagher Troy earlier than we originally planned, and we are making, improvements to our digital marketing sales and customer relationship, capabilities which I'll touch on in a couple of moments. As I say, we, having implemented the initial, restructure very quickly. That meant that we were very happily, well- in a good place to respond when, when Locke down hit us in March. House building was, off-site for, on average, 7 weeks, but, but the high, the significant proportion of, contracting and presold development work in partnerships meant that that that business had, a good proportion of of certain revenue and was therefore able to return to site, very quickly, which was very helpful, obviously, to the group's cash flow. I was impressed with the very swift deployment and the effectiveness of our new operating protocol which importantly gave confidence to our teams, to our subcontractors, and in due course, to our customers as well. We continue to sell houses throughout, throughout lockdown, and, really importantly, we're now making very good progress in, catching up that inevitable backlog of snagging, etcetera, which is really important in maintaining, the, our excellent customer service scores so we're very conscious as a as a leadership team that, I mean, with the integration, the redundancies that that employed, that implied, and then the obviously lockdown that our people have been through a hell of a period of significant change and real uncertainty We've worked really hard to look after our people through this period. We've tried to be as fair as we possibly can in all the changes that we've made and we've worked very hard to keep up, keep up a good level of communication. And it was really, really pleasing, therefore, as Greg's already already touched on that in our recent independent survey, that came, that came through, and achieving that score of 7.6, was, was really heartening. We concluded our efforts on, harmonizing, terms and conditions. We've also done a lot of work in the period on, supporting a mental health awareness. We recognize the importance of that, and that I have to say has been very well received, by our teams throughout the organization. And also, we're looking hard at enhancing our learning and development, facilitating, development and training in all disciplines and at all levels. And that's building on the strong proposition that Bovis already had, but enhancing that to, to exploit the real diversity and opportunity in, in the enlarged history group. During the height of the pandemic, we, we encouraged our people to support the the huge national volunteering effort, and I have to say it's been inspiring and humbling to see the, the fantastic and the diverse contributions that they made up and down the country. Again, against the backdrop of, integration and lockdown, just move on. We we obviously recognize the the real, the risk to to maintaining our high, customer service scores. And we focused across the organization very hard on, on, on, catching that risk. At the outset, we knew that, Linden's rating was, was reasonable across the organization, but had, was held back by 2 poorly performing business units. We divided those sites carefully and focused very hard on turning around the quality of product on those sites, and it's is really pleasing that, as a result of of, those efforts, throughout the business, that against this tough backdrop, our customer satisfaction scores have not only been maintained, but have actually improved during that period. Which is we're obviously really pleased with. The strength of sales demand as as, Greg and Earl have said has continued to surprise us on on on the positive side with both prospects and reservations at record levels. We haven't seen the, the feared spike in, in cancellations. The only cloud we would say is there's we can see that it's taking longer, to get to move from reservation to exchange. That period has elongated. Seems to be a combination of slower mortgage approvals, solicitors generally taking longer. And in some parts of the country, there seems to be administrative issues, with Help to Buy. But as I say, importantly, we're not seeing that potential spike in the cancellation rates partly led by the, the positive experience of selling houses during lockdown, we challenged our hard on the on our sales model. We're working hard now to modernize our marketing and sales. And trying to exploit the, the huge opportunities that are available to us, in digital. Basically, what we're looking to do is make it easier for our customers to do business with us deploying multiple channels, even to the, even to the convenience of allowing them to, to visit and view their, their home and place their reservation and pay for it all from their sofa on their mobile phone. We think this has got significant potential to reach and retain, a much wider potential customer base to communicate more frequently and more reliably and to enhance that customer experience. We're really pleased with our Key's customer relationship software, which we've enhanced with some of the functionality, from Linden's excellent system, and so that we now have, a single, powerful tool blending the best of both across our product offerings. It's all aimed to create a modern and user friendly experience for our, for our customers. And we're really pleased with the early signs of the response that we're seeing Another interesting area, or opportunity in the enlarged group is to review the way that we deal with, large strategic projects. We already have, 8 of, 8 such projects, in, in the, in the group and, and several more in the pipeline. And to date, I would say we've developed, tended to develop those on the traditional house building model, which, as you can see, currently those 8 projects trans translate to 8 outlets. And and that's that's fine, but it does tend to mean that those those site suffer from a lower return on capital, particularly in the earlier years. So what we're looking to do is challenge and perhaps revise that approach obviously deploying both the brands, but also leveraging some of the Vistri Partnership's development model, looking at broader tenure mixes and the potential to deploy partner funding or indeed forward sales. We focus basically on working those assets harder and maximizing the returns that we can generate. And obviously, we have more tools now, in, in our, in our kit bag, which is which is much better than simply, selling chunks of land to, to a rival flag. And lastly from me, we are taking the opportunity of the merger to reinvigorate our approach to operating sustainably. We're developing a new, a new ESG strategy for the Vistry group reviewing our performance and setting new specific and challenging targets We're consulting widely with stakeholders, including our employees and our investors and to to help us identify fire our and and sort of determine our priorities in this, we're standardizing our data collection and we've appointed champions in each of our business units to to invigorate and and oversee the collection of that data. I have to say I'm I've been really inspired actually by the the real enthusiasm for this agenda throughout the organization. It's exciting to see where we can take it and we'll tell you a lot more about that at the full year. That point, I'll hand back to, to Graeme. Thanks very much. Graham. So, I suppose to have the hedgehog, by the way. But moving on to, and finishing off with market review. So, there is clearly a wider market uncertainty and increasing unemployment with the end of the Furlough scheme could impact on consumer confidence. All I would say is the last 2 weeks of sales, over the last 10 weeks have been the strongest. So it doesn't seem to be coming through if it's going to come through. For us. So the housing fundamentals remain positive. Supply demand imbalance persists. Housing remains very high on the government's agenda, and I absolutely believe that this government absolutely gets the importance of not just house building, but the wider house building market to the general recovery coming out of, the pandemic. There's a growing importance of mixed use and development demands undoubtedly being strengthened by stamp duty exemption, but we were selling pretty well before that came in, I have to say, and helped to buy. The planning environment I'm pleased to say is set to improve and depending on how the government consultations go, and the market for affordable and PRS continues unabated with strong demand and funding. Sector, we believe our sector and the housing sector can support nationwide, economy throughout the COVID-nineteen pandemic, The photograph, if you can go back 1, please. The photograph there on the bottom right hand side, is the biggest scheme that partnerships have got, you know, nearly a a £1,000,000,000, nearly a 1000, flats, 26, 27 storeys high. And just given you an idea of where we've to with regards to efficiency levels because clearly it's a lot harder to deal with, social distancing on a block of flats with lifts, etcetera, etcetera than it is on a two story house. For that scheme there in March had over 900 people, working on it. And as of last week, there were over 800 people working on it. So it just goes to show how the how partnerships, Houseburn, and the sector in on the whole is coping very, very well with social distancing rules. So finishing things off, you'll have seen this slide before current trading and outlook, but our advisors were not sure how many of you would still be listening in having listened to Earl and Graham for 10 minutes, so we've decided to pick it up, at the start and bring it up again now. So I'll finish with very strong pickup in customer interest and sales, prospects at the highest levels for many years. Sales rates since the 1st July, 20% up on the prior year at an unheard of from a bogus 0.73, pricing, 0.5 percent up on our forecast, record forward order book at 2,700,000,000 stronger half, second half performance expected with full year profitably full tax before exceptionals and amortization are between 1,000,000 £140,000,000 and we're pretty much sold out to get there. The group has the ability to deliver at least GBP 310,000,000 worth of profit before tax in 2021 based on current sales and bill rates, and we have a clear approach to capital allocation as ill eloquently went through. So the primary focus is on de leveraging, and when we're targeting gearing, including land creditors by December, 2021, up 35%, with scope to bring that down. But in coming to those numbers, we are going to continue to invest modestly allow some growth in house building more aggressively, of course, in house building to meet our targets there and that market is definitely growing. And we are targeting, a dividend payment in respect 2021 with a progressive policy thereafter. So on that, we will take any questions from the analysts? And I'm not sure how this, how this works now, sir. Just Bowers. We will now take our first question from Will Jones from Redburn. Please go ahead. Thanks. Good morning, everyone. 3 from me, if I could please. The first is just exploring that point 73 recent sales rate, please. Could you give us any help with, the split between house building and partnership within that and whether there's been any bulk fields or anything just to be aware of in that 2 month period. And I guess linked to that, just when we think about the remaining 4 months or so of the year, are you happy that the sufficient availability in the business to carry on selling at a good sales rate? Obviously, just trying to work out whether there's any issues from the production all over the last 36 months that might hinder sales availability or maybe not at all for the next few months? Secondary was just around the land bank gross margin. I think 24.2% was the number in house building you gave, with the presentation. And I think if I look back at the stand alone bogus business 6 months ago, it's 20 point 8. So it's dipped a little bit, not a lot in fairness, but just to understand, does that capture the build cost synergies you expect to get from the deal? And if so, I guess, why the why the dip, is it maybe just that Linden's come in a bit lower average perhaps than the bonus stand alone? And then the final question was just around the balance sheet and lots of helpful numbers, thanks around 2020 2021, gearing, land credits, etcetera. But I just wondered, to what extent you have or you might consider additional equity at some point just to support your medium term growth ambitions? Thanks. Okay. Well, on the, the first point then, the, sales rate, the partnership sales rate is, because, they're obviously selling, smaller, more affordable homes is slightly, slightly better, than the house building, sales rate. But because they're selling less, it doesn't have that much of a difference. So that's pretty much, doesn't, doesn't, impact the numbers. We have sold some, bulk, during the last 8 or 9 weeks, but not a great deal. The sales rate would still be, point 6 ish if we didn't have those bulk, but last year, we did some bulk as well. So the 0.73 or in any period that, we've had in the past, would include a similar percentage of bulk included in that. So again, it's a true, the point I'm trying to get over will, is it's a true, number 0.73 isn't, impacted by, you know, a 1 off spectacular 1000 unit sale to, anyone individual. That takes care of that. The 2nd point, the embedded land bank margin, which was 24.9, now 24.2, I think we're being prudent. Number 1, I don't think all of the, I'm looking at my colleagues here, all the synergy savings, and procurement gains have been, have been fed through. So, I would expect that to get better, but you also heard, the Linden 1 was a bit less you know, we have looked at, 87 sites in a huge amount of detail because they've been transferred, from one business unit to another. So whereas before, are you happy with this site, you know, Mercier Cotswold and our rest were now saying, are you happy with, your land bank as part of the overall group land bank and you've had 4 or 5 sites transferred to you, which you're going to be bonus on going forward, there, of course, are looked at, dramatically in more detail than it would be before. And of course, we've had at least 0.5% impact of COVID into those numbers. So, we were, 1, very, very pleased that the land bank margin has moved, such a small amount the final one on the balance sheet? So I'll just add, well, on the, in the land bank margin, the other thing I would draw too is the JVs coming in from Linden are slightly lower, but we do actually get additional management fees for managing those, joint ventures, which will also flow through the profits. Not in the that's not in the 24.2. And the balance here? Well, well, I mean, in terms of the balance sheet, obviously, as you said, gave you a lot of detail. I think your question was, in terms of equity, which you know, on the basis of, you know, the plans we've got and the numbers I've set out that that know we have no intention of going to the equity market. Great. Thanks a lot. And sorry, just coming back on the the first one coming by the way. Sorry, Will. No. No. And so it was just on that point, sorry, around availability and stop, I guess, in the last 4 months of the year. Yes, so on? No. I'm No. The bill, we're basically building. If you spoke to some people in partnerships, we're building at 100%. If you speak to your average person in house building, we're somewhere between 85% 95%. So we have no issues. From a build perspective, and if I'm brutally honest, we're nearly sold, for the year end as we, as we sit here today. So and it's, it's all quite prudent, Will. We will now take our next question from Kevin Jago from Barclays. Please go ahead. Good morning, everyone. Yes, if you ever could, please. The first one is just around kind of the seasonality kind of expectations, your assumptions for FY 'twenty one, just looking at that sales rate and obviously just coming on from Will's question whether there's any bulk sales plan for next year in those, I guess prediction for 'twenty one. Through on being great. Sorry Gavin, just on that because otherwise we'll struggle to do it. So on the, seasonality, Usually, you would see a kick up, in September, October from sales in July, and August. Last year, for instance, was the 1st year where we didn't witness that. We had reasonable sales in the summer and we continued with, that level through September October. So, the norm would be that sales would would kick on. But last year, it didn't. So we are, we are assuming we're not assuming a kick on, from the, from the summer. That's the first thing. The second point is, the numbers that I've read out, the 130 to 140 pbt before exceptional amortization for this year, and the 310 at least for 2021 on the same basis, pre exceptionals and amortization do not assume for any you know, land sales or putting any schemes into joint ventures, which is the first time I've been able to say that ever. So generally sitting somewhere, sitting here in September, I would be expecting to sell, and still have, 1 or 2 nerves about selling a piece of land, or 2, or putting a big deal into a joint venture. And next year's numbers would be predicated around 1 or 2, decent sized deals. There is no there's deals available, and we may very well look at that, particularly as we go into next year, but we have our forecast of 3.10 at least between $130,000,000 $140,000,000, do not assume any, large deals whatsoever. It's just selling individual houses to Mr. And Mrs. Smith. And then, your other point then is going back to, bulk. If you were to work on, the underlying sales rate during the summer has been over 0.6, and, taking it to 0.73 has been some deals with halo, and various housing associations, but nothing, nothing too dramatic. But, in fact, if you were comparing the 0.73 with, with last year, we had more volume, coming in from bulk deals than we've had, during this summer. So it's a very, very prudent number. So that's your first question, Gavin? Yes, that's very clear. Thank you. Yes, the second one is just around build costs. Obviously, you've got the synergies coming through, but you give us a feel, so I think you had pretty early said that you were seeing bill cost deflation some months ago, but what's the kind of current spot rate and maybe a bit of granularity on kind of labor versus materials there, please. So I would say that, for the year, we're going to be able say, I'm pretty confident now that we've seen 0 build inflation on the whole for the year, and we've seen 0 to very small sales inflation for the year. If you go back to the start of the year, there was a bit of inflation, on the, on the, build side, in January, February, March, as we continue to cope with, having enough subcontractors to deal with a number of houses we were building. That all obviously stopped as we went into lockdown. We, as an organization, took advantage in, May, June, early part of July, I've gone out to our subcontractors, I'm saying, basically, for the first time in 5 or 6 years, the boots on the other foot now, there isn't, you know, work all in the shots not you are our valued, supply chain, and we did make some relatively, decent gains in those 3 or 4 months. Satiya today, we're all surprised at the strength of the market, including the subcontractors. We have done well to hold on to some of those gains that we've made. So where we might have made a 10% gain on a subcontract package to bricklayersgrandworkers, 5 or 6 weeks ago, I suspect we're now holding on to, 3% of that because we've had to give 7% back. So, I think we'll end the, on a level playing field. With regards to, materials, we've not seen any real increases, in materials, but we have, made because, you know, we were an organization at BOVUS building 4000 units a year, and you heard me say earlier, we're going to be building 11,500 units a year, that the procurement gains we've made, through John Bowen and our commercial team, are higher than we thought at the time of the acquisition. I would again say that the procurement gains that we've, made and are still making because of not because of, where we, you know, the current market, but because of the size of Vistry as an organization now probably haven't been fed through in their entirety through to our embedded land bank margin of 24.2%. Brilliant. Very clear. Thanks. And just a final one, if you could please, just around, government support and Help to Buy. Just looking at Slide 10 and I guess the mix of pricing in your land bank. Have you got kind of any real areas of concern, I guess, regionally just as we look towards those price caps coming in next year? As I've said before, we think it's quite generous in some places like like the Southwest. The only area I would have a concern with price cap but we're working with it, but the only slight concern would be the West Midlands. Other than that, we we're very happy Thank you. Thank you. We'll take our next question from John Fraser Andrews from HSBC. Please go ahead. Thank you, and good morning gents. I'll have 3, please. The first one is, in contracting. The revenue reduction was was was very small. And I wonder if that was, you were advancing work and what the outlook is in contracting. I know that the thrust of the expansion in, in, partnerships is on the the mixed tenure side, but perhaps you could just set out, what's happening contracting and what the future lies. The second one, in the land markets, please see that you had a strong replacement ratio. You're back in the land markets. Could you indicate how much land is in place, for your target for 21, and what you're seeing, on pricing? And then finally, your build rate, that that, your, your selling rates, rather than 0.73. Just so, you can sort of gauge your, the volume growth that's planned next year. Could you give an indication as to where your production rate is versus that, selling rate? Thank you. Okay. So Graeme, do you want to take the first one to contract him? Yes. I mean, I think the key to that, sorry, morning, John, the key to that is, the point I was making about, we were never, as an industry prevented, at no point was was construction stopped from operating actually during lockdown. We were in fact being encouraged to continue. So the challenge that you had, particularly for the for, for house builders was, would there be a market? And obviously, if you're building on risk, you're not going to rush out and carry on building So that's where the joy of the dive, the model came in because partnerships, as I said, has a significant proportion of contracting and also presold and development revenues. So we had confidence, that once we sort of dusted ourselves off after the initial shock of lockdown, we were very quickly, back to site. In fact, 1 or 2 of partnership sites never actually stopped working. And that meant that was that meant that the contracting revenue has pretty much stayed in line with where we would have, where we would have budgeted it to be short of probably on average, I'd say 3 to 4 weeks across the piece, but, but we were really very quick, back to site, and that's, that's why that's held up. Okay. On the, morning, John. On the the land market, first thing I'd say is the, I don't think the market has has really moved. I think it's, as soft, as it was as in January, February. So it's, it's still a good market to operate in it was and it continues to be. I don't think it's got any better or worse. With regards to, where we are with land and planning for 2021, the numbers we put out there because we are, cautious, cautiously optimistic, but, by the time you take into account, the contingents we've sees we've got. We own all the land, for for next year, and there's only 1 or 2, planning permissions outstanding for next year. So I feel very comfortable that, generally, when we are guiding the market for the following year, we would need to buy land September, and we would have more planning outstanding than we've got now. So we're in, that's a pretty prudent, set of assumptions that we put out there. And with regards to what we have assumed, with regards to sales rates going into next year, we've assumed a sales rate of 0.55to0.6 underlying without any bulk, and we haven't allowed for any bulk going into next year. As you heard, me or Graham or I'll talk earlier, there is certainly, in next year's numbers, nothing in there. Other than selling individual houses to, individual people. So there's no bulk deals, no, putting land in JVs and making a bullet payment or selling land, you might do that, but that's not included in any of the numbers. And then from a build perspective, as I've said of times now, I think we can, we can move on. We can, if we were pricing a job, today in partnerships in competition, and we looked at the prelims, for, let's say, for a 2 year contract, today in the COVID arena, the amount of money we would add to our prelims to get to that, program and we would still be programming to be built in the same period of time would be negligible. So partnerships are very happy, building up the speed, they're currently building at, which has got it's leveled off now, but week on week, it was getting better as we went through May, June, July particularly as we learn new techniques. And in house building, similar picture may be slightly behind, but we can easily build to the sales rates that are currently being achieved and we believe will continue into next year. What I would say, from a strategy perspective of history, and the build side, and I'm sure other house builders are looking at it, but I've challenged each of the MDs in all of our business units and particularly the construction directors where you've got, build completions in April May next year, I want them brought forward to March so that we absolutely, capitalize on any houses that can be sold within the stamp duty holiday. That's how confident I feel we'll build. I'll be bringing forward build from April May into, into March. Okay, John? Understood, Greg. Perhaps just a quick follow-up, if I may. Does that imply then that the number of sites is going to tick up next year, the 160 that you're currently building on in house building, is that going to increase to, to increase the volume So our numbers next year, we're going to go to about 155 in house building, so it's going to come back a little bit and we're going to sweat those assets, a bit more particularly with your branding. The partnership side will go up slightly. So if you like, overall, the outlets this year, about 185, the outlets next year will be about 185 and in very broad figures, housing will be down by 5 partnerships will be up by just over 5. Great. Thanks Greg. Thank you. Our next question comes from Chris Millington from Numis Please go ahead. Good morning, everyone. A few from me, please. Craig, you mentioned earlier about PRS deals I just wonder if you could kind of talk about what you're doing in that space, how we should think about the margins and kind of what your ultimate ambition is within the that the Partnership business. Second one for me is just about the dividend. When should we be thinking about a return? I do understand you cut to location is about reducing debt in the first instance. And then just a checking query about what percentage of the order book is exchanged at the moment. Thanks very much. Thanks, Chris. Graham, do you want to take the PRS? Yeah. I mean, I suppose you should, Look at PRS, Chris, as as as one of a number of, areas that natural, which is a natural, customer slash partner for for the the the partnerships business. I mean, undoubtedly, it has been growing and continues to grow as an asset class. There's a huge demand, both from people to, to rent those properties and then from investors, to, therefore, to, to develop and, develop and lease those, those properties. So, what we find, is that they are a natural, partner for us, and the number of people entering that space, and we're talk we're talking to to many of them. So, but just to be absolutely clear, our role would be as as developer and in, in many cases, contractor, quite clearly, to be clear, I mean, we wouldn't be looking at the at holding the investment product, but it is a great, They are a great customer for us. Greg touched on the, the large scheme at, Brunell Street Works. And, and for instance, that scheme will 9 175 units, of which 1 third are affordable, going to a registered provider, 1 third, we will sell to the private market, but 1 third of that scheme is going to, going to the private rented sector. So an important customer for the partnerships business. But overall, we would be looking for revenues of 10% to 15% of the overall partnership revenue coming from PRS? Yeah. I would say. Yeah. Sorry, Chris. And would they be at the better margin end of the spectrum within partnerships? The margin, Chris, really depends on the, as, as we showed on the slide earlier. It depends on the risk that we take. So the margin will be if, depending on sorry? It'd be in the land led. It? Yes, it depends. So it depends on the on the risk that we retain as a developer. We can actually, so we might put the development together, and parcel it up and not even take a land interest, and that we would refer to as land led. So we would pass the entire project to the investor and act as their contractor, obviously, at a higher margin because we've, we've put the development together. Or, as at, Brunnell Brunell Street works, we, it was an actual forward sale. So, we, we, controlled the site But what we did as we put it together, at the moment that we actually took the interest in the land, we then unsold the private, the private rented, element to that investor. So that, that, we took our development margin at that point, and it was, what I'm referring to as presold development. That's the way we engage with that market. Got you. Got you. All right. So that was going to answer the dividend in the order book 1. Yeah. Okay, Chris, just picking up on the dividend. So I mean, going back to those numbers for 2021, so, profit guidance of 310. And we said, you know, first priority, the deleverage to the $100,000,000, possibly, as much again in terms of investing in the business. That does give the ability to look at a dividend. If I was modeling, I would pencil that in as first payment, actually early 2022, but we'll look at the appropriateness and availability to actually bring that forward, if possible. In terms of the order book, I mean, the key thing is probably that we are near enough fully salt for the year and we're early September. So, you know, there is quite a lot of time, in order to get everything through exchange, we are seeing the delays on exchange as was described earlier, but we are around 70% exchanged already at this point, and working through that, as we go. And I think the important thing there, Chris, is, the individual business units are, are forecasting, a great deal number of completions more than we are assuming in this year. Hence, we keep mentioning, the 16% debt gearing at the end of the year has some scope to, to get better. You know, it has some scope to get better that buy, buy as much as 6%, but let's see how we go. The risk is the time taken, not for sales, the risk is all build, the risk is, I I can I can be clear? I mean, we were as an organization, BOVUS and Linden taking between 70 90 days to exchange contracts. Before the pandemic, that has moved to between 100 1 120 days. So it's quite a move out. Lots and lots of reasons for it, no one single one, some of which to do with, ourselves with the reorganization we've had, but the majority of external And, so that's the risk for the year, not build, not, not sales, just, getting these exchanges, over the line with a cancellation rate that has come right back over the last 8 weeks to normalized levels. It's just taking that little bit, that were not little bit, it's taking a significant longer time to, to come through. That's why we'd be prudent with 130,000,000 to 140,000,000 PBT for this year. Thank you. And our next question comes from Clyde Lewis from Peel Hunt. Please go ahead. Morning, gents. 2, if I may. I suppose the first one is very much around how your typical sort of buyer has evolved in terms of sort of whether they are putting more cash into the sale, whether they're also coming to looking for units. Obviously, there's been a lot about sort of up to the lockdown, the demand for housing around lockdown, and the people want home offices and different sort of housing layouts compared to what they were looking for before. So it'd be interesting to to hear your take on that. And the other one is probably for Earl. You've given, I think, T now, about 64,000,000 And obviously, you're focusing very much on growing that business, particularly in terms of mix tenure. How quickly should we expect that $64,000,000 of TNAV to increase as you bring that change of mix through in the partnerships business? Want to take that first. Yeah. Yeah. Happening Clyde. So, look, we've we've we've said from the acquisition and repeated now that we are growing that mixed tenure business, that will take some investment. That may be new land investment. It may also be as we've flagged before the potential of transferring, some sites into the partnerships business, making most, for example, of the strategic projects that Graham described earlier, clearly, in terms of the target of delivering, 10% margin in 2022, that investment will go in over the next 2 years. And look, it could be as much as, you know, $140,000,000 to $200,000,000 over that kind of period. And then on your involvement bank? Yes. So, yeah, Clyde, you asked about the, the typical buyer, and whether they got more cash and a couple of so, I would say, difficult to be too specific, but undoubtedly, the, with the I think that they're requiring, slightly, slightly stronger on average, stronger level of deposit, and that's really driven by as as as you're aware, the the mortgage market, which, has held up a hell of a lot better than than we thought, and there was there was an initial, rush away from high, high, LTV loans by, by the banks, but they, they sorted themselves out and got, got, got that back pretty, pretty quickly, not up to 95%, but, most of them doing 90s and certainly plenty doing the 85s. So but I think as a consequence of that, undoubtedly, buyers have been forced on average, to, to have slightly higher deposits, and I- that will probably continue for a while. I think in terms of the types of, units that they're after and the layout. Certainly, people are talking are looking more for outside space. All the obvious stuff that you're reading And we are seeing it, in our, in our, from our, sales agents up and down the country. So outside space and, and, yeah, bigger units definitely are in vogue as people, respond to, to the conditions of the last 4 or 5 months. Those trends will clearly involve. We're looking at it and thinking very hard, you know, about how, about whether we need to change anything, or just point up the flexibility in our layouts, when we're addressing show homes and things to, to show our customers how that space can be, best used. I'll just add to that advice. That's, you know, we we've been pleasantly surprised with regards to, the sales rate, but Graeme and I were taking a couple of press calls earlier on, we've been equally surprised at how, well we've been selling some of our larger units over the last, 2 months, which had been sticking a little bit. So, you know, the larger units seem to be selling, pretty well at a moment in time. That isn't going to change our strategy, of course, of, not doing those, anymore going forward, but, it definitely, has a assisted our sales rate, over the last 2 months having some larger properties, there and ready where people will obviously be using a bedroom or 2 for, office space. Our next question comes from Anastasia from UBS. Please go ahead. Hello. Good morning. I've got two questions, please. Firstly, can you please give us a little bit more color on target house building conditions since the next year? So when you say in your report that Land is fully secured for, next year forecasted units, what level of conditions do you have in this case and also if you can give us, like, more color maybe on volume margin assumptions for next year for both partnerships and house building. And the second question is a small one. What are the acquisition costs in the second half of this year? And if any integration costs remaining into 20 2021. Thank you. Okay. On your second point, which I think I did, I struggled to hear a little bit, was the, costs of the, integration. As we said, we think that's going to be overall 30, which is down from 35, which we said at the time of the acquisition, of which I think we've booked GBP 15,000,000 in the first half of the year, and, our guess would be it'll be about GBP 13,000,000 in the second half. Meaning GBP 28,000,000, meaning there may be GBP 2,000,000 to go into, next year. With regards to, house building unit numbers including 100% of JVs. I think we're looking at about 6350 units next year. I'm looking at studies, you can get that. Obviously, we're talking about the outlet numbers of around 155 next year and a sales rate of around 0.6 so you can, you can get there through that. And, and the margin in housing and Cartier? The margin, so the margin that housing gross margins I described earlier, we're looking through bouncing back in the second half of this year to over 20%. It will progress next year, from there and then beyond moving towards the 24.2 in the, in the land bank. So you can, you know, look to bridge most of the gap between the 20 24 next year in terms of that housing gross margin. In terms of partnerships, obviously looking to move that margin forwards with the mixed tenure aiming towards the 10% in 2022. You know, so you'll see progress in that margin as well next year. So, I would have thought, you know, we were, the thought 150 basis points forward from where we are at the minute with 5.6% last year, ignoring some of the sort of one off bits this year, we're moving forward to, you know, kind of 6%, 7% another 150% on that. Needs to have a 7 in front of it. Yeah. So 7 next year on Astellia. Okay. Okay, that's helpful. Thank you. There are currently no further questions in the Brilliant. So I'm what I'll do now is just wrap it up. Yeah. So on that basis, thank you for listening, and, we'll see you all again soon. All the very best. Thank you.