Good morning, everyone, and welcome to Vistry Group's full year results for 2021. Delighted to be joined today by Earl Sibley, our Chief Financial Officer, and Graham Prothero, the Chief Operating Officer. The agenda, I'll run through, our performance through the year and the strategy going forward. Earl will then step in, as you would expect, with a financial review, hand over to Graham with an operational review, and then I'll finish things off with an outlook. At 10:00 A.M. this morning, we will take your questions, and that will be after, of course, Persimmon have had a good grilling by you all, hopefully at 8:30 A.M. We had an excellent performance during 2021, with great progress across all areas of the business.
The private sales rate increased by an incredible 43% to 0.76, reflecting a sustainable sales rate driven by our land strategy, which was put in place four or five years ago. House building completions had a great year. Completions up to 6,551, well up on last year, with gross margin increasing to 22.3%, again, well up on last year. Partnerships continues to deliver rapid growth from their mixed tenure business, with revenues up 66% and their operating margin increasing to 9.2%, all as we said at the time of the acquisition.
We've been very successful in the land market and ended the year with a greater land bank than we started, having bought 11,798 plots, at least at our hurdle rate of 25% and our 25% return on capital rate. Our strategic land team continues to impress, and they also acquired 7,721 plots during the year. Net cash was at GBP 234 million, and that's way up on initial expectations, and that's after taking into account an increase in the land bank. Return on capital increased to 25.5%, well up on 2020, with the Partnerships return on capital remaining well in excess of their 40% medium-term target.
Taking all of that into consideration, it wasn't a difficult decision for the group to accelerate our dividend to two times cover for this year, reflecting the board's confidence in our future prospects. Moving on to some of the softer issues which underpin those great financial results. From an NHBC perspective, our reportable items are under the benchmark of our peer group. We won just under 10% of the Pride in the Job seals awards last year, with 12 from just under 150 awarded around the country. We won the equivalent of another two seals from Premier Guarantee.
Really, really pleased, you know, I don't think this should be underestimated with a company that's gone through a huge integration over the last couple of years, that our Peakon score, which is an independent company which surveys our staff, gave an overall satisfaction rate of 8.5, which is in the top 10% of all manufacturing companies that they survey. Also great to see that our company charity, Mind, got the benefit of GBP 215,000 raised in the main by our great employees. From an HBF customer satisfaction perspective, I'll eat my hat if we don't get announced in the next few weeks as retaining our five-star status for the year 2020/2021.
Behind that, it's even better than just being five star because all 13 of our housing business units were five -star, as well as Partnerships. Not one offsets the other, which is really pleasing. We started the 2021/2022 year in great fashion with the score up again at 93.6%. Great stuff. Graham will update you all later on our Science Based Targets, which we've made great progress as well. One Vistry, we're uniquely positioned for sector-leading returns. Let's be clear, when we bought the Galliford Try housing businesses, I think we got it right. We didn't underestimate what the combined housing business would do or the Partnerships business would do, and they're both performing at least in line with what we expected.
What we did underestimate was the power of partnerships and the enlarged housing business working together and working together well. That was being underestimated and it's starting to show some real serious dividends, whether it be on land acquisitions, which I'll talk about in a minute, as well as generating quicker returns from our huge strategic land bank. All in all, bringing the two together, we are targeting sector-leading return on capital employed in the medium term, and I think the 25.5% that I've just stated is nearly there already. Making Vistry, I talked about working together, partnerships and housing working together. Let's talk about a case study called Kenilworth. It's a development of 620 new homes, which we're doing in a joint venture with a subsidiary of Warwick District Council called Milverton Homes.
It was a rare opportunity to acquire such a site. Kenilworth is a great area to sell houses, and this site is a prime site within Kenilworth. Every single house builder in the country was looking to buy the site, but we bought it. Our existing relationship came from a partnerships relationship with Warwick District Council on their great scheme, zero-carbon homes at Europa Way in the Midlands. Milverton Homes is fully funding the scheme to the tune of in excess of GBP 60 million, which gives us an infinite return on capital. That's an infinity and beyond return on capital. There's my impersonation there of Buzz Lightyear for those who follow that sort of thing. Both Bovis and Linden will be on site.
Vistry Homes will sell all the Bovis units, and our Partnerships business will do all of the PRS affordable and the Linden Homes sales. It's a 50/50 split. Open market is 50%, pre-sold is 50%. It's a great opportunity there, and you can see the margin. Adjusted margin is 24%, infinite return on capital, a great example of partnerships and house building working together. Looking at our strategy going forward. On house building, it slips off the tongue very straightforward. 25% gross margin, 25% return on capital by 2025, with 8,000 completions expected. On Partnerships, we call it Project Pace, and we're looking for revenues to grow to GBP 1.6 billion, operating margin of +12%, and a return on capital of +40%.
That's medium term targets, which you could interpret to be 2025. The outlook, we started the year in incredible fashion. We've still got the pandemic, and over the last four or five weeks, of course, we've got talk of an invasion and then the actual invasion of Ukraine by Russia. We've seen the sales rate so far this year up 20% to 0.79, and that's risen to an incredible 0.92 over the last five weeks when Ukraine has been very much in the headlines. We continue to see price increases. We are increasing our prices every time pretty much we release units on any particular scheme. About four weeks ago, we increased our prices across the board by at least 2.5%, in some places more.
I'm pleased to say that after all the trials and tribulations of last year, our sites are operating well in a much calmer environment, with materials being much less of an issue than they were during the course of 2021. Although we still see labor inflation this year, and we expect to see, as I'll talk about later, a 6% inflation on build costs. That will be labor as opposed to materials. Housebuilding and Partnerships mixed tenure forward sales are up 23% to GBP 2.2 billion, and we've already secured 64% of this year's sales. Partner delivery forward order book in Partnerships totals GBP 860 million. That's a very healthy number, and that's 85% of this year's revenue already secured.
Housebuilding is well on track to deliver at least 23% gross margin for the year, which is what we said at the time of the acquisition. Vistry Partnerships are on track to deliver at least GBP 1 billion of revenues with a margin of at least 10% for this year, again, as we said at the time of the acquisition. The group is in absolutely great shape to deliver significant step-up in profits for the year. We absolutely, finishing before we move on, support the comprehensive solution to cladding, fire safety. What I would say is Graham and Earl will talk about it in more detail, but from where I'm sat and at a chief exec's level, this is not the end of the world from a Vistry perspective.
The monies that we're talking about here, after taking tax, will not impact in any way our dividend policy going forward, nor our growth strategy in house building, nor our aggressive growth strategy in partnerships. All very, very controllable. With that, I'll pass over to Earl.
Thank you, Greg. I can now take you through those great results Greg highlighted. As normal, the results are presented on both an adjusted and reported basis. The adjusted basis means we're including our share of the results of our joint ventures down to the operating profit level on a proportional basis. The group result was driven by our strong operating performance across both House building and Partnerships, supported by a good housing market, while at the same time proactively managing materials constraints in our supply chain. It is good to see the results reflect the real potential of the Vistry Group. You can see all metrics moving strongly ahead, and we've given a lot of guidance throughout 2021 in terms of profit margins in both House building and Partnerships, as well as on cash.
You will see as we go through that we've delivered ahead of this guidance on all those measures. In terms of overall scale of the business, the revenue at GBP 2.694 billion is 32% up on 2020, and importantly, 7% up on the pro forma turnover from 2019, showing just how well the enlarged group has come together and how well it has been dealing with the pandemic. Gross profit delivered was GBP 543 million, and this translated to an operating profit of GBP 368 million. Profit before tax, excluding the exceptional costs and amortization, was GBP 346 million, up 140% and slightly ahead of the previous guidance we set, having moved expectations forward a few times during 2021. The exceptional items were GBP 12.2 million.
This includes GBP 6.5 million, as expected, for the final cost of integration, taking the total integration costs to around GBP 30 million, which is GBP 5 million lower than the 35% expectation at the time of the deal, and there will be no further exceptional costs relating to integration. In addition, we have recognized a further GBP 5.7 million of costs in respect of legacy fire safety, meaning we hold a provision of GBP 25.2 million at the end of December, and Graham will comment more on this in a moment. Amortization in the period was GBP 14 million, and we expect a similar level in 2023. Therefore, overall, the adjusted earnings per share for the period was 125.5 p, well ahead of 2020 and 20% ahead of 2019 when we were just Bovis.
The slide also shows the strong position of net cash at the end of December, GBP 234 million, ahead of guidance, and I'll come back to this in a few slides' time. The combination of strong profit delivery and capital management means our return on capital has moved forward 11 percentage points to 25.5% for the year. Turning to the housebuilding financials, and these show the first true combination of Bovis and Linden. Gross profit, and notably the gross profit margin, have moved forward significantly, with the housebuilding gross margin at 22.3%, ahead of our target of 22%.
If you look at the pattern of six months on six months, our gross margin has been moving forward for a number of periods, with the second half of 2021 showing a housing gross margin of 22.7%, giving us confidence on the guidance we have provided of being over 23% for the current year. While the focus will continue to be on that margin growth, with controlled volume growth. Factors impacting margin include the strength of the margin embedded in the land bank now at the targeted 25%, a continued contribution from higher margin strategic land, the quality of delivery and operations on site, as well as house price improvements alongside dealing with increasing costs in our materials.
The TNAV, while lower than 2020, reflects a good position, although our work in progress level was a little lower than planned following supply constraints during the year. We expect a reversal of that investment during this year and an increase in TNAV. The return on capital for the business was 22.2%, and we can see this progressing along with the margin to 25% in the medium term. Key metrics for house building, just pick out a few. While we continue to follow a strategy reducing the average size of our completions, the private ASP has moved forward 4%, reflecting the strong demand across all geographies and all product mix. PX at 4%, very low and not really a selling tool that we're using. The affordable at 25% is as expected and a good guide still going forward.
While Help to Buy at 21%, remains an important tool for us, it is significantly lower than in previous periods following the changes to the scheme and much lower usage than others in the sector. Average outlets were as expected in 2021, with a nice problem to have occasionally of selling out slightly earlier than we expected. The FY 2020 number actually was slightly high, with a number of sites remaining open for longer than expected due to the pandemic, and therefore 2022 will see a similar level to 2021 growing towards the end of the year. Our Partnerships business also ahead of the target set. The focus on mixed tenure coming through with volume up 41% and reflecting 46% now of total Partnerships revenue.
This increase in proportion has really driven that revenue up to GBP 864 million, up 19% as we continue to look for 12% compound growth each year. Operating profit up 64% year-on-year. As with house building, a focus on margin coming through with the second half operating margin being 9.3%, a period where we also recognize a higher proportion of incentive costs for the year. The margin improvement was supported by our higher margin land-led contracting, making up a higher proportion of partner delivery than in 2021. In fact, it was nearly twice as much as it was in the previous year. We expect a bigger proportion of land-led in 2022 to help those margins. However, of course, the biggest impact on margin comes from the increasing level of mixed tenure.
Overall operating margin up 2.5 percentage points in the year. Again, meaning we are confident of achieving the 10% margin for 2022 as we continue to grow that mixed tenure business. With the investment in that mixed tenure, the TNAV has moved around GBP 100 million from investment as planned, and we are planning a similar level of investment in the current year. While the return on capital might come down a little bit in the next couple of years as we invest in mixed tenure, it will remain well ahead of the targeted 40%. We continue to approve mixed tenure schemes at a hurdle rate of 40% and still have that ongoing benefit from partner delivery of somewhere between GBP 50 million-GBP 70 million of cash in the business at any point in time.
Partnership metrics, each of these shown with its share of JV, really does show the growth in mixed tenure, and also the growth in outlets during the year. As we move into 2022, we expect to see that go up to around 40 outlets per year for 2022. As planned, partners delivery remains an important part of the Partnerships business, delivering a stable contribution in 2021 and similar expected for 2022. A specific mention for our procurement and supply chain. Most importantly, a big thank you to all our supply chain partners for their contribution last year in the face of numerous challenges in the market following the step up in demand. We managed this really effectively with 90% of our materials procured centrally, complemented by our local teams ducking and diving to make things happen.
We're currently operating in a much calmer environment with teams that are even better equipped and ready to deal with any challenge that arises. Many of the agreements we put in place at the beginning of 2020 that gave us some protection from cost increases in 2021 were renegotiated at the beginning of this year. These increases will impact at various dates during the first half, but they're all accounted for in our forecasts and guidance. We've also taken the opportunity from that renegotiation to bring in additional suppliers for certain materials to give a greater surety over the supply and ensure that negotiation was truly competitive. Overall, last year, we saw build cost inflation around 5%, and while the material supply has improved, there will be some further cost increases driven by energy prices.
However, we see the cost of living, wage inflation being the key driver of cost increases and overall expect to see build inflation for 2022 around 6%. Okay, the map here shows another active year in the land market. Dots on the map show all the acquisitions during the year. The purple being the Housebuilding, the green, the Partnerships, and the new red ones are strategic land options. It really does show our nationwide coverage. As Greg said, with over 11,700 plots secured, which has ensured we've added to our controlled land bank in the period. We are still seeing good opportunities to buy land, and we have a real competitive advantage on those larger sites.
We have seen the land market get a bit more competitive in recent months, which is impacting the level of deferred terms we can achieve in the open market. Importantly, we continue to buy those housebuilding plots at an average gross margin and return on capital in excess of 25% on average. A little bit more on our land bank. As at the end of December here, the controlled land bank housebuilding, including joint ventures, over 31,000 plots for housebuilding, where we are trying to maintain a 3.5 to 4-year land bank.
Aligned with strategy, you can see the number of plots per site going up, reflecting that competitive advantage on larger sites with dual branding or even three brands, as well as the ability for house building and partnerships to work together, as Greg described. Land cost per plot and as a proportion of ASP remaining consistent, indicating we are still buying land very well, and the average future gross margin now at that target level of 25%. In terms of Partnerships, including joint ventures, we have over 11,700 plots, which will support the aggressive growth plans for mixed tenure development towards 300 homes per annum. Again, the embedded land bank margin has moved forward as expected and will support the future margins for Partnerships to beyond 10%.
Our strategic land has grown again with exactly 40,000 potential plots, and I have challenged that number a few times, but apparently it really is exactly 40,000 potential plots. I'm pleased to confirm in this area we further strengthened our excellent strategic land team, both recruiting externally, but also promoting from within the team. We are able to deliver a comprehensive planning strategy for local authorities, which is helping pull this land portfolio through in a difficult period for planning. Our strategic land is now feeding all parts of the business on a multi-brand basis, and we can see how we can get 4,000 plots per year to come from our strategic land and in turn, deliver 30% of our total completions each year.
Which is good news when I can confirm that the vast majority of our highest margin sites in house building have come historically from that strategic land bank. This summary of the balance sheet reflects a really strong position, in fact, stronger than any of the scenarios we ran at the time of the acquisition. As a reminder, that investment in joint ventures and amounts due from joint ventures really reflects further work in progress and land, which has increased over the year, although we would have liked it slightly more at the end of 2021. It represents a really good position for the current year. As I mentioned earlier, land bank in total is growing and as expected, land creditors represent a higher proportion of land, so at 36% this year, and we're happy at this level.
Not least around GBP 70 million of those land creditors are not due any time in the next two years. Given the overall balance sheet strength, we're happy at that level. Other assets and liabilities in there really reflect the increased activity in the business during the year, as well as an increase in our pension surplus on our three defined benefit schemes. Overall, GBP 1.7 billion of tangible net assets, GBP 2.4 billion of total assets. Cash closed better than expected, ahead of our already improved expectations in the year. Overall net gearing was, including our land creditors, 10.5%, driven by that great operating performance, good cash conversion and good management of working capital, and if anything, a little less work in progress. Finally, just a reminder of our capital allocation strategy.
Strong balance sheet and we are targeting slightly improved month-end net debt this year, around GBP 100 million. We expect to invest during the year GBP 100 million in Partnerships, as I mentioned earlier, as we drive the mixed tenure element of the business as we did in 2021. In addition, we expect to invest in Housebuilding to ensure we have the right level of work in progress and land to deliver growth into 2023 and onwards. We continue to see that compound growth of around 12% per annum for Partnerships and the investment will be required to support this. In Housebuilding, while 2022 will be focused again on driving the margin up with controlled growth, we will be looking for more growth beyond that. We accelerated our dividend strategy during 2021, and we'll maintain a 2x cover going forwards.
We have achieved the total gearing close to 10% at the end of 2021 a little earlier than expected, so we do expect a modest cash outflow during 2022, and I would expect that gearing to go up a little as a result. As I noted, all that investment is to deliver the 25% and 40% targeted returns in Housebuilding and Partnerships respectively. In the longer term, it does remain our clear intention to return surplus capital in the future, and we will update you further on this later in the year. With that, I will hand you over to Graham.
Many thanks, Earl, and good morning, everybody. As Greg said, we're really pleased, not only with some excellent results in a good market, but with the strength of the business and operations. In Vistry Housebuilding, the sales rate of 0.69 is a stepped increase from where both Bovis and Linden used to be, which reflects the deliberate shift to a higher proportion of mid-range housing, successful deployment of the two brands, the quality of both of those ranges, a rigorous focus on brand promotion and discipline, and the excellent progress on digital selling and on our hub approach. We regard five-star quality as a prerequisite and are pleased to be at this level in every one of our housebuilding businesses, and we're now focusing hard on improving the important nine-month score.
We were delighted with our Peakon score in February, which I'll come onto in a moment. We have an excellent land bank in strong locations and are focusing on increasing the contribution from strategic land and improving the regional coverage of that team. Partnerships continues to make excellent progress against this strategy. We're really pleased that we've covered Stuart Munro's retirement as a divisional managing director with internal promotions, with Sean Egan, who very successfully led our North East business, now stepping into a DMD role. The three nascent businesses are thriving, with Thames Valley and South East being relatively new areas of operation for Partnerships, and North Midlands, an expansion of our existing West and East Midlands businesses just to keep control as we respond to that burgeoning demand in that region.
We're focusing hard on procuring the land we need to support this growth and expect to operate an average of 40 mixed tenure sites during 2022. Greg's talked about the excellent project at Kenilworth, and we have a number of these large sites in the pipeline where our integrated model really flies, optimizing our competitiveness, profitability, and returns. The Partnerships model continues to grow a rich portfolio of strong partners with huge appetite for product across multiple tenures. We have regular programs with some 25 registered providers and individual projects with many more, and we're working with more than 20 local authorities. Now turning to the current issue of fire safety, it goes without saying that we believe that leaseholders should not bear the cost of making buildings safe and shouldn't be faced with the anxiety of that uncertainty.
Hence, we're fully supportive of the government's attempt to find a better solution than the previous proposals for buildings between 11 m and 18 m. In order to achieve that, we do need government to deliver on its commitments to a proportional solution. We can't be in a situation where necessary fire safety works are extended to include building refurbishments. We also need other market participants to align their requirements so that people can readily secure mortgages on buildings which are demonstrably safe in accordance with agreed standards. We've actively engaged with the department on the issue and of course with the HBF, which has done a great job of leading and articulating a highly constructive industry response to the aggressive demands from the Secretary of State. As Earl said, we've increased our provision in the period in line with our known obligations as they stand today.
That includes engaging with our partners in Partnerships, where we were the contractor. The recommendations from the HBF would increase that liability, but hopefully also start to bring some clarity to the commitments that we're making. Hence, we've also given an indication of our estimate of the additional costs which might arise depending on the uncertain outcome of these negotiations with government. We assess that to be in a range of GBP 35 million-GBP 50 million. Now those of you who joined our Capital Markets Day in the autumn hopefully got some excellent insight into the way we're structuring and measuring our approach to sustainability in our operations, which we group in these three areas, our people, our operations, and our homes and communities. We've been really proactive in addressing the perennial challenge of attracting and retaining the bright people that we need.
We have a wide range of ideas and initiatives to differentiate Vistry as a great employer. I'd pick out in particular our agile working policy, which is working brilliantly for our people and the business, and several key actions around coaching and training our people for their personal development and for the enrichment of the group's talent and succession. I'm also really proud of the expansion of our Skills Academies program, which offers the opportunity of training and qualification to local unemployed people on our larger sites, and the group-wide commitment to foster and support this fantastic initiative. Reflecting our progress on all of this, as I said earlier, we're delighted with our group Peakon score of 8.5, which puts us in the top 10% of our industry grouping. Our framework of communications and feedback with our people seems to be working really well.
Health and safety, of course, is a critical priority, and we were pleased with an improvement in our accident incident rate, remaining below the industry benchmark. Of course, even one accident is one too many, and we continue to focus on improving our culture and our process, including deployment of new technology in respect of safety around moving plant. We're rolling out a new data platform to improve our data around waste and carbon so that we can better calibrate our performance and measure improvements. We're pleased to sign up to the Business Ambition for 1.5 degrees, and we're in the process of verifying our carbon reduction targets through the Science Based Targets initiative. Importantly, we've introduced some targets around sustainability measures into the group's bonus system.
As you know, the supply of affordable housing is a key focus for Vistry and a core metric, in particular, for our Partnerships business. We're committing to deliver year-on-year increases in affordable home delivery over and above our Section 106 requirements. Our social value proposition is increasingly a key element of major land bids and regeneration opportunities, and we're enhancing the way we can capture and demonstrate this by subscribing to independent verification through the Social Value Portal. We're also well on with understanding and addressing the challenge of biodiversity net gain, which is another significant planning and development hurdle to be negotiated, and in some local authorities already and nationally from next year.
During the year, we finalized and rolled out our new standard customer journey, which is a key element of enhancing our customer experience and our readiness for the demands of the New Homes Quality Board and the Ombudsman Service. We registered to join the board with our first business units commencing participation in the next couple of months. We're continuing to enhance our digital sales capabilities, all aimed at making the decision to buy a Vistry home easier and more compelling for today's customer. We're making great progress towards the future home standards and the interim changes on Part L, electric vehicle charging, space standards, and accessibility. We're redesigning our Linden and Bovis ranges and bringing forward the new third brand to accommodate these and ensure we remain as efficient as we can in that complex transition.
All of this work is greatly assisted, of course, by our learnings from several partner delivery projects in Partnerships where the forward-looking mindset of some registered provider and local authority partners requires us to test new technology and designs as they seek to future-proof their stock. With that, I'll hand you back to Greg for the outlook.
Moving on to the market review. We continue to see strong consumer demand across all areas of our business, whether it be prospect levels, pricing, or in actual fact, sales rates. We're selling now well into quarter three, quarter four of this year. As Earl said earlier, we expect to see build inflation of around 6% this year, and that will predominantly come from labor. The material situation is much better than it was in 2021, and our building sites are performing much better than in 2021 because the availability of materials is much better. On the bigger picture, planning remains good on a historical basis, but at a local level, we continue to see delays because of two things, the political climate on planning and labor resource within planning departments, within local authorities is just not good enough.
Interest rate rises will continue, but we haven't seen that impact on sales as yet, and we of course are fully expecting more interest rises as we go through the year. Help to Buy levels, 17% in the last quarter of 2021, remain at sensible levels, and I really do feel we, and for that matter, the rest of the industry, are pretty well equipped now when Help to Buy finishes during the early part of 2021. The market for affordable housing and PRS continues unabated, and we continue to see, as we did at the time of the acquisition, very, very strong growth opportunities for our Partnerships business. Finally, the solution to fire safety really does need to be sorted sooner rather than later.
In outlook then, as I said earlier, excellent start to the year with the sales rate up 20% to 0.79 and in actual fact, 0.92 in the last five weeks. Who'd have thought Bovis, let alone Linden, would have been saying having a sales rate of 0.92? That's completely new territory for us. That's against the background of a month ago, where we put up prices across the board of about 2.5% minimum, but we continue to nudge up prices every time we release houses at the present moment in time. Sites are running very, very well, although we do expect to see some build inflation.
Housebuilding and Partnerships mixed-tenure forward sales are up 23% to a very healthy GBP 2.2 billion, and that's 64% of this year's forecast already in the bag. Our partnered delivery forward order book is around GBP 860 million. That's a solid number, and that again represents 85% of this year's revenue already secured. Housebuilding well on track to deliver in excess of a 23% gross margin. Partnerships well on track to deliver at least GBP 1 billion of revenue and a 10%+ operating margin for the year. As Graham and Earl have both touched on, we fully support the comprehensive solution to fire safety that the HBF have just put forward.
Again, I would reiterate the cost of that will in no way impact our dividend and in fact our growth aspirations for both housing and the aggressive growth aspirations for Partnerships. All in all, the group is in fantastic shape and is in a great place to deliver another step up in profits for this year. It would be wrong of me not to finish, of course, on the Housebuilder Awards last year. Less than two years after the formation of Vistry, delighted there to pick up the award for Large Housebuilder of the Year. Very, very proud night for all of us, and great for me to get a picture of a guy wearing a skirt.
Today I'm joined by Greg Fitzgerald, Graham Prothero, and Earl Sibley. I'd like to pass over to Greg for opening remarks. Greg, over to you.
Good morning, everyone. Hope you're all well. Hopefully you all had a chance to see the announcement presentation, which was released just after 7:00 this morning, along with our statement. On that basis, we are delighted to take any questions that you have.
Thank you, Greg. As most of you are aware, we'll be inviting people to ask questions over video today. To ask a question, use the Raise Hand button, which can be found in the Zoom control bar below. We're going to take our first question from Will Jones. Will, I'm promoting you to panelist. Will, if you could please unmute yourself and also turn on your video.
Morning. Kick off with three, if I could, please. The first is just around, I guess, just generally reflecting on sales rates, the 0.76 you did for last year. Perhaps some indication of how that's split between House building and Partnerships. Clearly, you've hit 0.9 recently. Just wondering to what extent you think that higher level versus the history of the group is the new normal or not, and the extent to which you can build to match that going forward. Second one was just around the order book, actually, and I think I'm right in saying the mixed tenure value is something like 80% higher year-over-year, and the increase continues to advance compared to what we'd seen before. How much of that is long-dated?
How much of that can we infer for the year ahead or not? Just to have some help around what looks like a big number there. Sorry, the last one was slightly technical, but just trying to understand the landbank slide. If I look back at half year, I think your housebuilding land cost was GBP51,000. It's now GBP 47,000, which seems like a big change in six months for the whole landbank. By contrast, the Partnerships business, I think was 23 and is now 40. I don't know if there's any definitional changes there, particularly in the partnerships side of it, but just any help around understanding the landbank. That's obviously changed the land cost to sales as well. But it might just be a technical thing. Thanks.
Okay, Will. If we start with the sales rate, as you say, it was 0.76 last year. That definitely reflects the land buying strategy of both Bovis and Linden and Partnerships that was put in place four or five years ago. Which in the case of Bovis was to buy less sites on the outskirts of a village, which was very pretty, and building less five- and six-bedroom houses. Bringing it back to the mainstream. That is certainly working exceptionally well. Something we said at the start as part of our strategic rationale of the acquisition of the Galliford Try housing businesses was dual branding and how well Bovis and Linden sell against each other. The dual branding has been. We underestimated how well that was gonna go.
It's gone incredibly well. The strategy that both Linden and Partnerships and Bovis put in place four or five years ago is going well. The 0.76 is most definitely the norm. If you then move on to the in excess of 0.9 that we've achieved in the last five weeks, the market all the way from January 1st has been incredibly strong. That's against the continuing background, particularly in January, of a pandemic, potential lockdowns. Over the last five weeks, it's been against a background of a potential invasion of Ukraine, followed up by the invasion of Ukraine itself.
What's not in those figures is over the weekend, we took 70 reservations, which is one of the best weekends we've had while the bombs are flying all over the place over in Ukraine, which is obviously tragic. It doesn't seem to be impacting the market. Everybody knows interest rates are gonna go up. Will they go up as much as we thought a month ago with the invasion of Ukraine? Who knows? People are buying houses against pandemic Ukraine war and interest rate rises and inflation running at +5%. My own view on that is, particularly from the pandemic, and you could say too early to say on an invasion, I honestly think there has been a sea change in people's attitudes, lives for living.
One of the things about life is getting on with things and maybe a new house is one of the things at the top of that list. We are definitely noticing a huge sales rate. We're selling now into the third, fourth quarter. The last five weeks of sales at 0.92 is on the back of a minimum of a 2.5% increase across the board on sales. In some places it's more. The West Division in Housebuilding, for instance, was 3% minimum across the board. In some places on particular sites, we've increased prices by 4% or 5%. Every sales release now is smaller than it used to be. Rather than being 10 units, it might be five.
Pretty much every time we release houses, we are nudging up prices. We don't anticipate having another 2.5%, 3%, 4% increase across the board. We just told all of our sales teams and managing directors that we have to nudge up prices every time. To give you some further comfort, over the last since Christmas, our prices over and above forecast, which now include a 2.5% minimum increase, are over GBP 2 million, well over GBP 2 million up against forecast, showing that there's still more to come on the pricing. That is more than dwarfing any labor and material price increases, which we were up to date on as of the 1st of January that we are seeing.
Now sales our product Phoenix Collection for Bovis, Linden Collection is they're good products, good specifications, sell well against each other, and we are to coin a phrase, we are flying at this precise moment in time. The sites are. We've had a very good January and February from a weather perspective. It's a far calmer outlook on the sites than it was for the majority of 2021, where, you know, every day, "Oh, what am I gonna do now? I didn't get those blocks. I didn't get those doors." That's happening, but it's happening as an exception now, most of our sites are getting what they've ordered when they've ordered it. We particularly think that the
We think that the inflation we will see this year, which there's gonna be inflation without any shadow of a doubt. I would remind everyone, you know, particularly if you've been around as long as me, inflation's never done a house builder any harm, 'cause of course we put the inflation on the sales figure, and the cost figure is dramatically less. We would expect to see 6% build inflation, cost inflation this year. As last year, most of it was materials not on labor. This year we think the majority of that will be on labor. Hopefully that gives you some background or some comfort on them. Do I think 0.92 is there to stay?
I think somewhere between 0.7 and 0.85 is gonna be the new norm, which is, you know, if you like from a Bovis perspective, kind of 50%-60% up on where Bovis were back in the day. We've definitely moved on from that. The second question was?
Second question was on forward sales, Will. We've given a bit of an indication of where we are for the current year in terms of-
Did I say for you to answer it?
I was going to anyway, Greg. On housebuilding mixed tenure, looking at 64% sold, which is actually, you know, a very strong number in terms of the growth we've got coming through this year. On that mixed tenure in particular, we expect to see it become, you know, more than 50% of partnerships this year for the first time. You know, well forward sold in that respect. There is one large London scheme that is contributing to the number, which has got some more long dated in there. That is in the number in terms of the presale. Obviously on partner delivery, 85% sold for the year, which again is a good number. We'd expect to come into the year about 80%.
We're already at 85% for the year in terms of this year's contribution from those forward sales.
Since being a CEO since 2003, I've never been in a stronger position as with the set of results we've just had, plus the first two and a bit months of the year. I mean, you know, we're not a million miles off. You know, we're selling now into the third and fourth quarter. So to be honest with you, we could actually, you know, look at pricing again if we wanted to, and if we didn't sell any houses for the next month, I'm not sure it would cause too many issues for our year end. Incredibly strong position. We'll see where we go with that when we come out with our AGM statement in May.
The, the-
Carry forward strong.
Yep. Then your third question, Will, was on the land bank. I think actually, you know, looking at the full year on full year that was in the presentation is the right way to do it. I think that is how we've done it.
Okay.
... in terms of the aggregate, including all the joint ventures rather than trying to do a share. There is a difference between the two. You'll see a fair consistency year -on -year and in terms of the percentage of, you know, plot cost per ASP as well.
Which is less than 20%.
Yeah. Fairly sensible as well. You know, indicating we're still buying land on a very sensible basis.
The land bank is gonna increase more in partnerships as per our strategy and growth aspirations in partnerships for the mixed tenure growth, which is coming through than in house building where we're very happy with the land bank. In fact, the land bank could go back a little bit. That won't really matter. There's much more modest growth in House building than there is in Partnerships.
Great. Thank you.
Thanks, Will.
Thanks, Will.
Well, thank you very much for your question. We're going to go now to Clyde Lewis from Peel Hunt. Clyde, we're promoting you to panelist. Clyde, when you arrive, please unmute yourself, and please also turn on your video. Clyde, please go ahead.
Okay. Morning, all.
Morning, Clyde.
I think I've got three, if I may, maybe four. Very good to see that you put up that sort of nine-month customer satisfaction sort of number. I suppose what I'm intrigued to learn a little bit more about, I suppose, is why isn't it higher? You know, everybody wants to move it higher, but what are the reasons for sort of customers not to be satisfied after nine months? How do you go about correcting that? Obviously, you've got the immediate one sort of pretty much nailed down now. How do you sort of go about improving the nine-month survey?
I'll just answer that.
Yeah. Okay
Clyde, 'cause we won't remember or I won't remember all the questions. The biggest single thing is it's part of my and everybody else through the organization's bonus criteria this year to get that to a number of 80%. So at 75.9%, which we were yesterday, it's already moved up a fair bit in the last couple of months, so we're happy with the projection, and we wanna get it to 80%. The benchmark across the top 20 largest house builders is within 2% of that number. So we're there or thereabouts. We were further behind than that. The way we're gonna get it up is complete and utter total focus on it.
As of pretty much now, every day, the customer satisfaction scores come out on a business unit by business unit basis. We have led up till now on the eight-week. That's you know got us in a position where we're now at in excess of 93%, and we're ahead of benchmark for the first time ever. Our results for last year let alone this year are the best for the last 14 years, you know, including when Bovis was a five-star House builder back in 2008, 2009, 2010, as it were. The scores are great. As of now, we're moving.
The first thing that managing directors will see, which basically dictates whether they're gonna have a good day or not, is gonna be the nine-month scores on an individual basis. Also, it is not acceptable, that's the language I'm using, for us not to be a five-star house builder on a business unit basis, let alone on a group basis, and less than 75%, which will move slowly to 80% over the next month on an individual business unit basis. Each MD has to attend the ALT meeting to explain why they're not, which is a monthly meeting going forward. The first one of those meetings was last month, and hopefully it was a very uncomfortable meeting for one or two managing directors around the group.
Okay, perfect. Thank you. The second one I had really was around, I suppose, product mix and the third brand, and I suppose how your thoughts are evolving on that. You know, can you, I suppose, update us with the-
Sure.
You know, your plans for that third brand? Within that, you know, probably the best part of the market over the last 6-12 months have been the bigger family units. You know, you, like the rest of the industry, obviously sort of focused probably a bit more into the smaller units. Is it time to shift back a bit more into bigger units right now?
Do you want to take that, Graham?
Yeah, happy to do that. Yeah. I mean, Clyde, as Greg said, we're absolutely delighted with the strategy we took on the dual branding. Kind of rigorous focus on brand discipline and dual branding on sites. Wherever we could, wherever we can do that, we're finding that it's holding, it's working for us, and that's indeed significant parts of that improved sales rate, as Greg said. We've looked at that. We've made a success of it. Not everyone's made a success of it in the past. We think it's working really well for us. What we've identified in a sort of stepping back a moment from the trend post-COVID, which you're alluding to, is that we've actually got an opportunity in a more entry-level brand. Still the same quality.
All of that customer proposition is there, but there's a more entry-level brand for us, and so we're working hard on that. Now, your point's a good one. You know, we've seen great benefit from our shift towards more mid-range housing. The COVID effect, if I can call it that, has certainly increased that demand for the larger units. Now, we, of course, do build four- and five-bed homes, and we're taking note of that trend. But overall, we're very happy with that underlying strategy, which we're still continuing with towards the mid-range housing. We still see that opportunity for that entry-level brand, and we will quite confidently deploy all three brands plus the Partnerships brand for registered providers and for other investors and what have you.
You could see on the larger sites, and Greg talked about Kenilworth in the presentation, where we'll happily deploy four brands on the site and make that work.
I think also, Clyde, you know, whereas we would have been rigid on land acquisitions, a couple of years ago, that we don't, you know, with regards to the numbers of two, and three, four and five bedroom houses making up or constituting the makeup of the site, we're being less rigorous. If there's a few more four and five bedrooms, which there are, we're letting that go. We still have our strategy, but maybe not quite as rigid as we were.
Okay. Thank you very much. The last one I had really was around geography and looking at the land acquisition map in particular on sort of page 16. You know, obviously it shows that you're pretty active up to the Wash, but you know, north of there's obviously not a huge amount coming in. Obviously more the Partnerships business. But given how well things are going at the moment, are you tempted to start pushing a bit further north, given the current market backdrop?
Yeah. We have our business in the Northwest, our Partnerships business. Also we have our Mercia business. Yeah, I'm looking at some large acquisitions actually at the moment in Mercia. Absolutely. We have Newcastle as well as our Yorkshire businesses. We are funding and pushing those business units to maybe catch up a little bit with the South and start buying more land. As a principal, probably more than happy to spend it there than in the South if it comes down to that. As with all things on land is opportunity-led and you do try and you go where you can get the land. The land market has become.
Historically, it's still, you know, a good land market, but it is definitely more competitive than it was a couple of years ago. That's why we're looking to buy larger sites, which we couldn't as Bovis or Linden. We are absolutely looking to leverage Housebuilding and Partnerships working together to buy bigger sites again, because we could always make it work on a margin, but we struggled with regards to return on capital on large payments of land. But that's working well. At Kenilworth, Great Haddon, there's a number of those sites where we've bought.
I think we have a real USP with Partnerships and House building working together. It only is a USP if they actually, and it's easier said than done sometimes, work together openly and properly, which we've still got a little bit of work to do, but definitely big progress in the last 12 months.
Perfect. Thank you very much.
Thanks, Clyde. That was only three, by the way, Clyde, so just to help you out there.
Thanks very much for that, Clyde. Our next question is from Aynsley Lammin from Investec. Aynsley, we're promoting you to panelist. Just a reminder to the attendees, if you'd like to ask a question, please raise your hand. Aynsley, if you could please unmute yourself, and please turn on your video. Aynsley, if you could please unmute yourself and turn on your video. That's great. Go ahead.
Great. Thanks. Morning, all.
Hi, Aynsley.
Just two questions.
Morning.
Two questions from me. Just first of all, you've helpfully given the GBP 35 million-GBP 50 million number that you see you may have to pay the HBF proposals. To my understanding, obviously, that they've been rejected by the government. Just wondered if you'd looked at or calculated a kind of worst case number where you think that could get to, a bit more color around that, you know, the range of possibilities.
Just on that, I'll take 'em one at a time and Graham, chip in here. But yeah, the GBP 35 million-GBP 50 million is going back to 2000. So that's kind of 20 years that the government stipulated they were looking to go back 30. From our perspective, you know, we don't think we have looked at there, that there are that many units or buildings that would come in between.
From an industry perspective.
From 20 to 30. From an industry perspective, that might be different, but from our perspective, we don't think that would be would make a huge difference from our individual perspective. As I say, I'm sure it is clear, but GBP 35 million-GBP 50 million pounds exceptional. I'm sure the majority of that, no matter what happens, wouldn't get spent until 2023. You would be taking off from a cash perspective, 29%, which would be the tax that house builders would be paying. Even at GBP 50 million pounds, you're looking at a GBP 36 million-GBP 37 million-pound cash outlay over a couple of year period. I can assure everyone listening that that will not in any way impact our growth ambitions for partnerships or indeed our 2x dividend cover.
It's something that we're looking at. You know, the government are flexing their muscles. We're trying to be as helpful as we can through the HBF, who we think are doing a very good job. At the end of the day, you know, GBP 35 million-GBP 50 million, we have looked at it in some detail. We think that's accurate, take the tax off, and it certainly doesn't impact on where we are going forward. Do you wanna add anything, Graham?
Yeah, I was just gonna say, Aynsley, I think the focus of it. It's been rejected, but I don't believe there's been a formal response on that. The focus there, of course, is because the other leg of what the Secretary of State had requested was some form of additional contribution to a fund over and above going back 30 years and everything you've been a developer on to provide for any remediation. The other piece of the ask was a contribution, or I suppose a form of tax or however they framed it. That's the piece that has not been volunteered in the HBF proposal.
I won't bore you with all the reasoning around that, but I think that was the focus of the, it's not gone far enough, rather than something else on the buildings themselves, Aynsley.
At the end of the day, the government have an offer there. The government need to think about that. I'm sure the government are also thinking about wouldn't it be terrible if what they put on the housebuilding industry constrained the production of new build housing for private sale, where there is a huge shortage in this country, hence the market we're seeing at the present moment in time. Even more important than that, the chronic shortage of affordable housing in this country. At some point, they will have to think and have a balance and go, you know, "Is this right or will this impact on the production of much needed housing in this country?" I'm sure they're absolutely thinking about that. Sorry, Ainsley, next one.
All very clear. Thanks. Just very briefly on the next one. You mentioned in the statement, I think about, you know, surplus capital in the future potentially being returned, the share buybacks or special dividends. Just wonder if you could remind us how you kind of define surplus capital, and given where the share price is at the moment, are you getting increasingly tempted a share buyback could be a good idea?
Yeah. I'm obviously, like probably all the listeners at the moment, tempted to buy the shares at this kind of price anyway, 'cause it's obviously incredibly low, and we are flying as an organization. For once in my lifetime, normally the share price constitutes how the business is performing, and this is completely 180 degrees separate from what I can see. Do you wanna take the actual-
Yeah.
That's just an outburst from me. The formal answer. Earl?
Ainsley, in terms of looking at surplus capital, we said previously, you know, we would be looking at a 10% total gearing in the medium term. Now, reality is we got to 10.5% total gearing at the end of last year, but we've actually got there a lot faster than we expected. The balance sheet at the end of last year is very strong. It's stronger than any scenario we had at the acquisition, which shows the performance from last year, et cetera. Looking really at cash in over the next year, we invested GBP 100 million in Partnerships last year, as we said we would. We're looking to do the same again this year. We're actually looking to invest in the House building business as well.
You'll see our TNAV in house building went down a little last year. We probably would have liked a little bit more work in progress at the end of last year. We're looking to reverse that this year. You may see a similar number invested in house building this year, and therefore, you know, simple numbers, if you take a consensus of about GBP 400 million profit, take the tax off, and then have that kind of level of investment across the businesses, we will have a modest cash outflow this year. Therefore, I'd expect that total gearing to go up a little, during the course of this year as we invest in 25%, 40% returns. You know, still absolutely the medium-term ambition is to return surplus capital in due course, and we'll look at how we do that.
I think also within your question is, you know, are we considering how we make our returns generally based on, you know, where the share price is going? Well then, of course, is the answer. Look, we're definitely, in our view, you know, promised the 2x dividend cover this year. But depending on where our share price goes, it would be absolutely right and proper to review that in due course. That's where we're at the minute.
At these levels, it is coming more and more to the top of the list.
Yeah.
Thank you very much.
Thanks, Aynsley.
Thank you, Aynsley. We now have our next question from Gregor Kuglitsch from UBS. Gregor, we are promoting you to panelist. It will take just one moment, and then please unmute yourself, and then please turn on your camera, Gregor. Please go ahead.
Morning, Gregor.
Hi, there. Hi.
Morning.
Hi. Maybe the first question is sort of around your volume and gross margin outlook, and obviously, as far as I can judge, it hasn't really changed from what you were sort of saying previously. I think you're obviously flagging super strong market pricing, you know, demand, et cetera. I guess the question is what's holding you back from kind of upping your expectations, I guess, particularly in growth margins and perhaps also on volumes?
On volumes, I think what's holding us back is the ability to build quicker. We are flat out. On margin and actual profit, we're still just over two months into the year. I am feeling very bullish. I think I kind of touched a minute ago. Maybe when we get to May, we will look at those numbers. At the moment, you should take it from this call that we're not. I am extremely comfortable with the current consensus and yeah. We're in a very, very strong position in every single aspect of the business.
Thank you. Back to cladding. I think all of us basically just came off a call with one of your competitors, basically said, "Well, it's likely you'll just get a sort of building safety levy that would apply to, you know, basically all future build. Either it's unclear whether it be on future or existing planning consent to essentially fund the sort of orphan building." I guess, is that also your view that that's what ultimately will happen? The form of tax will not be a voluntary contribution of some sort, but rather just a sort of building safety sort of basically a planning tax or roof tax, whatever you wanna call it, to fund the residual.
I'm not sure that's overly helpful. We have made an offer through the HBF to the government. The government have already imposed a tax levy on the larger house builders, meaning our tax from next year will go from 25% as per all other companies to 29%, which will claw some money back. If there is a levy, roof tax, stamp duty, whatever there is going forward, we will see, and we will comment on it, but I would have thought in any case, if there was the windfall tax that the landowner receives would certainly come into play with that, i.e., it would probably end up being a cost that we would look into within our land appraisals.
Okay. Thank you. That's helpful. Thank you.
That's exactly right, Greg.
Okay. Thank you.
Thank you very much. We have our next question from John Fraser-Andrews, who's from HSBC. Just a reminder, if anybody would like to ask a question, please use the Raise Hand button in the lower panel. John, you're being promoted to panelist. If you'd please turn on your video and unmute yourself. John, if you'd just turn on your video, and then please go ahead.
Good morning, gents.
Morning, John.
Three for me, please. First one on Partnerships. Are you seeing the competitive landscape opportunities increase with your leading competitor analyzing its own sites rather than pushing on with growth plans? And also in that area, your customers, the housing associations, are you seeing their ability to undertake their own developments recede as a result of what's going on in cladding? That's the first one.
From a competition perspective on Partnerships, it's neutral, no different, I would say, than it was 12 months ago. The opportunity levels that are coming through from Homes England, and I was actually on a call with our London business yesterday and from housing association providers, having seen a bit of a lull maybe over the last 12 months, have come rushing back in. We are dealing with as many opportunities, and it's a huge market, a huge untapped market 'cause of the shortage in this country are really, really starting to come through on all avenues. Competition, no different, I would suggest, than it was 12 months ago, two years ago.
Very good space to be in, and the opportunity levels that are coming through as we speak are getting towards too much to actually deal with, which must mean that housing associations have analyzed and looked at and are now putting their head above the parapet on where they were with the cladding issues that they faced as well as we faced.
Thanks, Greg. Yes. Second question is on the embedded gross margin in the land bank. It's almost at your hurdle rate. I'm assuming therefore there's a bit more to come on land to come through, particularly as you push the strategic land pull through towards your target.
Yeah.
Any gains there to come, and also cost efficiencies. Are you done now on the merger synergy? Are there any ongoing efficiencies over and above that land buying that can come through into the P&L?
No, I think the synergies we've now over a two-year period done well, and we've embedded them into all of our forecasts. The land bank in housing is 25%, which is right on our hurdle rate. In the strategic land, where we have 40,000 plots, we have a brilliant strategic land team and a strategic land bank. There's over about 8,400 odd plots, I think there is, where we have some form of planning which will come through, and undoubtedly that will have a greater margin than 25%. You know, somewhere between 27%-30% would be the norm that will come through. That will help.
As I said earlier, the land market is a little bit more tighter than it was two years ago. Maybe that'll be needed to offset that. We are confident that on average we will be able to at least deliver on the 25% hurdle rate across the board that we have stated on numerous occasions. I'm delighted now to see the land bank margin, embedded land bank moved again last year, and is now actually at the 25%. Included in that, there are still some legacy sites which are obviously less than 25%, offset by some of the strategic land that was put through during the course of last year. It's all moving in the right direction, John.
Okay.
The only thing I'll add to that, so, you know, continued focus on that gross margin in house building. In due course, we've obviously got a house building business with 13 business units that can increase its volume within existing structure. There'll be, you know, some betterment in terms of the spread of overhead in due course. Still the focus on the gross margin first and then, you know, growth, coming after. There is that efficiency to come.
Modest growth in housing, aggressive growth in Partnerships.
The cost efficiencies, are you done there in terms of initiatives? I appreciate on the merger you are, but now you've bedded in the businesses, any more juice to squeeze there?
I don't think there's too much to go, but where we are looking for efficiencies and looking to ways of saving money will be on the new regulations that are coming through. You've got Part L and Part F during the course of next year, and then sustainable homes or homes for the future from 2025, where we've got numbers that we're working to at the present moment in time. We would hope, and my experience is as you get closer to actual implementation, they come back. We've got a lot of clever people within the organization working at different ways to actually reduce the costs that we've included within land acquisitions and forecasts for the forthcoming building regulations. Yeah.
Thanks. Finally, on cladding, the GBP 4 billion, have you sort of got any sense out of government, where that number comes from and where it's heading?
Do you wanna take that?
You can take that, Graham.
Short answer, John, is no. I mean, the HBF is trying to rationalize that number and is discussing the number with the department. Beyond that, I would say at the moment. I mean, let's be clear, it's a difficult number with the records available for anybody to get at. But I would say the industry has quite serious doubts that that is the right number. We think it's too high.
Let's be clear, you know, like everything else, if we put something right, it'll be put right to actually comply with the regulations so that the leaseholder, who we are in total agreement with the government, shouldn't have to pay for this, can get an EWS1 form and sell the house and the person can move, you know, can get a mortgage, as it were. That's what we're looking to do. It's the bells and whistles that the government might be looking at behind that. You know, gold-plated taps, no. We will put back what it is to actually make sure you can sell or buy that flat in that building over 11 m high. No more, no less.
Clearly the house builders are cracking on with their own buildings, which seems they don't have a legal liability to do that, but they are doing that yet anyway, in terms of legal liability. How do you see the timing of this cladding playing out, in terms of mopping up the other buildings and the issue being resolved?
I think it's a hugely complex issue, and we've not even made any agreement with the government yet. I see this playing out over a two to three-year period. I mean, obviously the more serious ones we'll get done as quick as we can but.
At least two to three years, John. The point you touch on there, I mean, it is vital that we get clarity on, you know, what does remediation constitute? What does it look like? That we achieve a standard that is agreed as acceptable, not only by government and by house builders and other developers, but by banks and insurers and indeed the RICS and so on and so forth. There's some complexity to resolve. We're just keen to crack on and get it resolved as quickly as we can. Mainly so the leaseholders are freed up from that burden.
Current share prices with us and with other house builders would, you know. What we've done, and tried to put a number out there, and as I've said a couple of times now, by the time you take the tax off, and this will be spent over a two- or three-year period of time, you know, at GBP 50 million, it's GBP 36 million- GBP 37 million over a two- or three-year period. That in no way, if I was being brutally honest, we're not that clever enough to be accurate enough with our cash forecasts to those kind of numbers. That is no way gonna affect impact on anything we are gonna do with Partnerships, House building or dividend or share buybacks going forward.
We're just trying to put some sort of scale to bring some sort of, you know, order to the panic that seems to be in housebuilder share prices over this issue.
No, thanks for that. Thanks, gents.
Thanks, John.
That's great. We've no further questions at the moment, so I'd like to pass back to you, Greg, for any closing remarks.
Very good questions. Thank you very much, guys. Lots of questions there around cladding. Just reassure you all that it's pretty much top of our agenda. We think we've been open and transparent with the numbers that we've put out. Please take off the tax. Please bear in mind what I've said, it will not impact on anything we're doing going forward. One other thing I would say is the number being where the number is, you know, there's only two buildings out of the 64 that we're looking at that are Bovis, and they're clear.
The reason why the number might be relatively low is this is an issue that is a Linden Homes issue, not Bovis, and maybe a little bit in partnership. We're confident with where we're at, but we'll see where we go. The other thing I would say is that finish off with the integration two years has gone incredibly well. Those results last year are fantastic. A big thank you to all of our people, which is what this business is based on. We have started the year incredibly well and are in a great position wherever I look across the organization, which is a great place to be. Incredibly proud to be Chief Exec of this group, which is absolutely flying at the moment.
On that, thank you very much.