Balfour Beatty plc (BBY) Earnings Call Transcript & Summary

Good morning, everyone. I'm Philip Hoare, Group Chief Executive of Balfour Beatty, and it gives me great pleasure to welcome you to our half year results announcement for 2026. I'm joined today by Myles Westcott, our new CFO, who's been with us just a few months, but is already having an incredible impact on our business. And I know we'll all look forward to hearing from Myles a little bit later as he gives us the detail of the results announcement. But before we start, what a fantastic video. I just love watching images like that of Balfour Beatty because it really typifies the fantastic people that we have within our organization, the depth and breadth of quality that we possess. It goes to the complex projects that we're delivering around the world. And of course, it goes to the pride that we have in terms of delivering for our customers. So I wanted to start with a huge thank you to all of our Balfour Beatty colleagues. And so for those of you that are listening now or in the future, thank you so much for your hard work and your commitment because it's down to you that I'm able to stand here today and talk about our company and the future. So thank you. So now let's get into the first half year results. And I am really pleased with our first half performance. We've delivered profitable growth and strong cash performance across the business. And as I talked about last March, we anticipated the conclusion of the U.S. monitorship, and that happened as planned on the 6th of June. So a really important milestone for our company that allows us now to really get on and focus on delivery for the service men and women of the U.S. What that means overall, when you look at it from a margin perspective is that our profit from operations in our earnings-based businesses increased to 2.9%, up from 2.2% in the previous half year. So when you carry forward that strong first half performance and look to our outlook for the full year 2026, we've slightly upgraded our guidance on PFO, which you'll have seen within our numbers. Now of course, our GBP 200 million share buyback that I announced in March is well on track. And so overall, we look to return GBP 267 million to our shareholders over the course of this year. Now turning to the future and thinking about momentum in the organization. Our order book remains substantial at GBP 23 billion, and I'll talk some more about the details of that in a moment. But this gives us really strong visibility into the future and confidence about where we're heading as a business. And then finally, we're well positioned in the growth markets that we've selected. And again, I'll give you some more color on that. So I'm really pleased with the first half performance. It's been strong. It's allowed us to slightly upgrade our guidance for the full year. And of course, I'm really positive about the momentum that we carry into the future. So let me talk about those markets for a moment. Now of course, we operate across a number of geographies and different market areas, but we've specifically selected these markets for the future growth of our business because either we can see significant scale-up opportunity or they're large resilient markets like U.K. transport. But we're focused around U.K. energy, both on power transmission and on energy generation in U.K. defense, U.K. transport and in U.S. buildings. And we've seen some really good positive momentum in those markets in the first half of the year. So I just wanted to share some of the highlights of that with you. So firstly, within U.K. Power Transmission, momentum continues to build. And we've shared this graph with you on the right-hand or left-hand side of the screen before, and it's one I really like because not only does it show where that growth is going to happen between now and 2030, but it also indicates that we have 25% market share. And what we see is and what we aspire to do is to maintain that market share as that market continues to grow. And the first half has been really positive from that perspective. So 24% growth in revenue year-on-year. Our order book now stands at GBP 2.1 billion. That's up from GBP 1.6 billion at the end of last year. And that pipeline of opportunities where work has been awarded, but we're not yet in the construction phase remains at GBP 6 billion to GBP 8 billion. So if you remember before, I've described the Part A and the Part B of that works where Part A is all about design development and getting to the right cost profile for those works. Part B is when it goes into construction and enters our order book. And so when I talk about momentum, we've seen that now begin to move. So in the first half of the year, we were awarded Netherherton Hub with SSEN. That's a GBP 325 million scheme, which was in Part A and has now transitioned into Part B. We've also been awarded a new substation on top of the work we are already doing at Bramford to Twinstead for National Grid. So we're doing the overhead lines. We've now been awarded the substation work that goes alongside that. And we've secured further routes to market through a new framework with National Grid that will take us into the future. So that I think really positive momentum underpinned by the further wins that we've had in this growth market. Turning now to U.K. Defense that we are really well differentiated in this space, and I'll outline some of that in a moment. But the key thing that's happened in the first half of this year is the publication of something called the Defense Investment plan. And the defense investment plan does a few things. Firstly, it sets out with greater certainty, the level of investment in U.K. defense infrastructure over the course of the period from now to 2030. So you can see the percentage of increase in spending there that happens. And really, what that does is drives greater certainty for us in terms of the opportunities that are there in the market. But it went beyond that and also then set some guidance around what it looks like through to 2035 and an increase in U.K. defense spending to 3.5% of GDP. So again, this is positive from our perspective because it gives a longer-term view of an already important investment market. And then additionally, on top of that, I think it pointed to a number of things. So the first one of those is that having defense as a U.K. growth engine. So using that investment to create new jobs to think about not just defense as a national security point, but also as something that's going to drive economic growth across the U.K. U.K. capability is being prioritized. And again, this is good news for Balfour Beatty because as a U.K. domiciled business, I think that allows us to really think about the Team GB approach to delivering defense in the U.K. And clearly, we'll be working closely with our clients in this space to really build out those deep and trusted relationships. And then finally, speed of delivery is important, isn't it? It's about being able to build on the program as it stands and deliver that into the future. And so procurement reform that supports that, I think, is incredibly important. Now alongside that, I think we are incredibly well differentiated in this market. Our strong track record, our extensive capability that we have, our ability to transfer skills from the complex nuclear environment into defense, I think, sets us apart. And then when you take into fact into account the recent investments that we've made, both in security cleared staff and in a ring-fenced IT system that allows us to operate in that defense space, I think we're incredibly well positioned. And then finally, having a robust balance sheet, a strong relationship with the U.K. government and the fact that we're a U.K. domiciled company, I think, puts us in a great position to really capitalize on the growth that we see in the defense space. So larger market, improved policy environment that should speed up delivery and momentum building across the programs of work in the defense space. Turning now to the U.S. I just wanted to touch on a few factors, and I might cast your minds back to March when we talked about some new growth areas that we saw within the U.S. overall. But look, it's been a great start to the year for U.S. construction. Our revenue is up 19% on the half year 2025. And we've really begun to do something that I think is critically important in that market, which is about leveraging the great capability we have in one area or with one customer and taking that and spreading it across the U.S. So as an example, we've been targeting Wells Fargo, the banking group in the U.S., where we've had a 20-year relationship working with them. And we're now on a national framework with Wells Fargo, which has meant that we've now started delivering work for them in each of the geographic areas that we operate in. So really simple, a customer we know well, doing work across the U.S., we're now working with them across the U.S. In particular, I wanted to highlight the aviation and data center market. So I spoke to you last time about those being important market verticals for us, important because we've got great capability, but also because we see significant growth in the medium to long term. So the aviation market, $140 billion worth of construction between now and 2029. We have a great track record delivering across 7 airports in the U.S. And in the first half of the year, we won another significant mandate with Raleigh-Durham Airport for $361 million. And so we're now focused on that as a vertical within the U.S. market. Data centers, I mean, you can't pick up anything these days and not read about data centers and what's happening. Data centers are not new for us. We've been working with key clients for over 20 years delivering data centers. But actually, we're putting increasing focus on, again, taking a relationship and a customer that we know well and working with them across the breadth of the U.S. So we made great progress in the first half of the year, a $350 million set of wins, taking and expanding our capability beyond the Northwest into Virginia, and we've secured a further $1 billion worth of work that's been awarded but not yet contracted that we're in the process of moving through into our order book. So I see significant momentum occurring in that market overall. So what I wanted to do there is just give you a snapshot of some of the great momentum that we're seeing in the organization in the first half of the year. But what I'm going to do now is hand over to Myles and let him take you through the details of the financials.

Thanks very much, Philip. Good morning, everyone. I'm delighted to be here at such an exciting time for Balfour Beatty. Since joining in May, I've spent much of my time getting to know the business, meeting colleagues from across the group. Even in the short time I've been in role, it's been clear to see the depth of expertise we have, delivering such an impressive portfolio of complex projects together with an embedded culture of disciplined governance and risk management. Whilst I will, of course, bring a fresh perspective, I've joined the business with strong foundations and real momentum. I'm very much looking forward to getting to know Balfour Beatty even more in the coming months and working closely with Philip and the wider team to deliver our next chapter of profitable growth, which leads me nicely on to the financials and the strong first half results, which I'll now take you through. So headline numbers. Revenue grew by 8% to GBP 5.6 billion, which was a 10% increase if you exclude foreign exchange movements. This is largely due to increased volumes in U.S. Buildings and U.K. Power Transmission. Profit from the earnings-based businesses increased by 42% to GBP 153 million, the Support Services grew strongly, driven by Power and U.S. Construction returned to profit compared to the loss we reported a year ago. Group profit for the period increased by 44%, which when combined with the effect of the ongoing share buyback program, resulted in earnings per share increasing by 51% to 21.7p per share. As usual, our interim dividend is 1/3 of last year's full dividend, which equates to 4.7p, 12% increase. The order book increased slightly in the period to GBP 22.9 billion, and the directors' valuation of the infrastructure portfolio remained around GBP 1.1 billion. Cash performance was once again very strong and included significant working capital increases in the U.S. and in Power. As a result, net cash stands at GBP 1.7 billion and average net cash for the period was GBP 1.6 billion. So overall, positive first half, and I'll take you through each of the elements in a bit more detail now. So starting with Construction Services, which is much improved compared to the first half of last year. Operational performance in U.K. Construction was strong in the first half, delivering PFO margin of 3.4%. This represents an improvement of 50 basis points after you exclude the one-off insurance recovery booked in the first half of last year. In the U.S., Buildings continued to deliver profitable growth, driving a 19% increase in U.S. construction revenues. And in Civils, the business delivered a much reduced loss with the Texas Highway project, which has been a drag on profitability, expected to achieve final closeout shortly. As a result, U.S. Construction delivered GBP 22 million of PFO compared to a first half loss in the prior year. At Gammon, revenue dropped by 6% on a constant currency basis due to the reduced activity at Hong Kong International Airport, where Terminal 2 has recently opened. Margin percentage was lower than prior year, which is largely due to timing as we progress commercial closeouts on a small number of projects. Okay. Moving to Support Services, which has once again shown healthy revenue growth and achieved strong margins. Power Transmission volumes have continued to grow, driving 10% increase in Support Services revenue in the period. And moving to PFO, the divisions delivered a very strong first half performance, growing profit to GBP 66 million with a 9.1% margin. This includes margin improvement across both Power and Transportation and also a change in mix with Power now contributing a higher proportion of the division's volumes. It's also worth noting we're seeing less seasonality in Support Services than in recent years, which is likely to lead to a more even split between the first and second half profit this year. Okay. To the order book, which we've maintained at around GBP 23 billion. This gives us really strong visibility over the next few years, allows us to plan ahead and invest confidently. As Philip mentioned, we've secured the Netherton Hub contract with SSEN, which will be delivered by the U.K. Construction division. The ability to provide earthworks and civil infrastructure capabilities is a great example of the group's differentiated end-to-end offering, which sets us apart in the sector. The U.S. is slightly down, mainly due to Civils, where we're commencing delivery of the 3 highway projects announced in recent periods. And in U.S. buildings, new secured orders include the data centers and aviation contracts, which Philip mentioned earlier. Gammon order book increased by 15%, including the contract award for a railway station in Hong Kong's Northern Metropolis development area. We expect this to be a strong demand channel for Gammon in the medium term with related projects already making up 30% of the order book at half year. Finally, within Support Services, we secured a GBP 315 million highways maintenance contract in Mauritia. In addition to the order book, we continue to have a significant pipeline of further work for which we've been selected, including the GBP 6 billion to GBP 8 billion of power projects, which we're currently in the design phases of. We expect to convert the majority of these schemes to order book in the next 18 months as we move into the construction phase. Moving now to our Infrastructure Investments business, where the important news in the first half was the conclusion of the monitorship. The predisposal loss, which was in line with the prior year, was once again primarily due to costs incurred in relation to that monitorship. We also disposed of 2 U.S. assets in the first half, both of which were completed at or above the director's valuation. And now moving to that directors' valuation of the investments portfolio and taking the bridge from left to right, we invested GBP 15 million in the period in new and existing projects. Sales proceeds from the 2 disposals totaled GBP 12 million, and we received GBP 15 million in distributions from the portfolio. The unwind of the discount increased the valuation by GBP 36 million and the foreign exchange movement was a GBP 12 million benefit as the U.S. dollar strengthened. After those movements, the directors' valuation of the portfolio is maintained at around GBP 1.1 billion. Okay. Looking at cash now, another area where performance has been strong throughout the first half, with average cash in the period of GBP 1.6 billion and a closing balance of GBP 1.7 billion. And let me touch on 4 of the items here to add a bit more color. Firstly, operating cash flow of GBP 151 million represents strong underlying cash conversion across the group and is an important focus for all of our businesses. And moving to working capital. As you know, for most of the work we do, we tend to be paid in advance. And as a result, we have a strong negative working capital position. This grew in the first half, largely due to new project starts in the U.S. together with the rising demand in power. For pensions, as we set out back in March and as agreed with the trustees of our largest pension fund, we've made a GBP 30 million contribution with no further contributions expected. And finally, the share buyback program is progressing well. We're on track to complete the full GBP 200 million by the year-end. Okay. Finally, turning to outlook for the full year, where we've updated our guidance in 3 areas. For the earnings-based businesses, given the strong start to the year, we're now expecting to deliver low double-digit PFO growth, which is slightly ahead of our previous guidance. No change in our guidance for infrastructure investments. And for net finance income, given the strong cash position, we're increasing our guidance to a range of GBP 35 million to GBP 40 million. No change to the expected P&L charge, which will be close to statutory rates. And finally, cash. Following the very strong first half, we're upgrading the guidance for average net cash to a range of GBP 1.5 billion to GBP 1.7 billion. In summary, we've had an encouraging first half of the year in terms of both profit and cash, which when combined with our strong order book and momentum in our growth markets gives me confidence in the group achieving the guidance set out today. With that, I'll hand you back to Philip.

Thank you, Myles. So obviously, we're pleased with our first half performance. But what I wanted to do now is just spend a few moments talking about future momentum and how we see the development of Balfour Beatty and the unlocking of that next chapter of growth. So firstly, I guess, to start, just to remind you of our strong and diversified portfolio as a group. So our focus on our core geographies in the U.K., the U.S. and in Asia, the real sense of driving growth across those focused growth markets that we're operating in, U.K. energy, U.K. defense, U.K. transport and U.S. buildings. And then the new profitable growth framework that we put in place under Evolve, Energize and Explore. But I guess what I wanted to particularly pick out through here is the end-to-end capability, which I think is a real differentiator for us as an organization. The ability to bring design and engineering through project management into construction management on into construction and then on to O&M, underpinned by our ability to bring project finance to those key projects I think, is something that really sets us apart from the competition. And as we grow and develop, we look to strengthen those connections across that part of our organization to enable us to get really close to our customers and help them deliver their demands as they move forward. And then, of course, the whole thing is underpinned then, isn't it by the strength of our order book at GBP 23 billion and our investments portfolio at GBP 1.1 billion. So I think overall, this really positions us to grow well into the future with lots of momentum to come in terms of the value of our business. But let me just talk to you a little bit more detail about the profitable growth framework and what this means in terms of long-term value creation for our stakeholders. So firstly, as a reminder, Evolve, Energize and Explore. Evolve is all about strengthening the core of our business. It's about making sure that we're driving margin improvement across every aspect of our organization. It's about making sure that the robust governance processes that we have in place help us drive operational excellence from the selection, the winning and then the delivery of the projects that are in our care. And of course, it's about advancing our people strategy, making sure that we can attract and retain the best talent that this industry has to offer. Turning to Energize. This is all about accelerating profitable growth. And we've picked a number of key areas there. So firstly, for me, this is about really being close to our customers, understanding their demands, making sure that we're agile enough to be able to respond to that. The deeper those relationships are, I think the better our business will be. It's absolutely about driving growth in the U.S., and I'll come on to that in a moment, and then accelerating growth in those U.K. growth markets that we've indicated. And then finally, Explore is about shaping what's next. It's about scanning that horizon is thinking about technology and adjacencies that will enable us to grow faster and stronger as an organization. But of course, you've got to measure all this than you. And so in terms of how we're looking at that from a long-term value creation perspective, at the forefront will always be safety. It's about returning everyone home safe at the end of every day. We have a big responsibility around sustainability and where our clients demand that, bringing the best sustainable solutions that we can to the projects that we are operating. It's absolutely about being focused on our customers and recognizing that their feedback to us is important in terms of how we shape our business into the future. And of course, being an employer of choice. And as I said, our ability to attract and retain talent is the future of our company and therefore, incredibly important that we get this right so we can bring the best people to the best projects to support our customers. And finally, I think if we get all of that right, then actually the outcome will be that we will drive and continue to drive profitable growth across the organization. So we've made real momentum on this program in the first half of the year. And I just wanted to highlight some of the areas that we are focused on. So the first one is under Evolve, strengthening the core is all about driving margin improvement. And we have plans progressing in every aspect of our business and each of our functions in terms of unlocking that future margin potential in our business. You would have seen that earlier this year, I reshaped our U.K. operations to be really focused on those growth markets and, of course, the customers that we serve in each of those growth markets. So it's about getting that focus in terms of how we'll drive the business forward into the future. I've also invested significantly in leadership capability. Not only is this promoting people from within the organization, it's about new hires into our company, and it's fundamentally thinking about how we support the training and development of our key leaders. So I've launched a new executive leadership development program in conjunction with London Business School and MIT, which is all about upskilling and upgrading our leaders to be able to best support the markets that we're operating in. And then finally, and something that's really close to my heart is the development of our One Balfour Beatty culture. And this is all about taking and evolving our culture to the next level where we're collaborating super effectively across the company. We're able to bring the best of Balfour Beatty to our customers wherever they are in the world. And I think this will have important ramifications for how we grow the business into the future. On Energize, it really is about getting close to our customers and putting customer first in terms of how we deliver. And we have a new program, a global program going on across our business that's really thinking about how we get laser-focused on our customers. And then finally, over the first part of the year, we've been working on an accelerated U.S. growth plan, which will enable us to grow in those areas we're already operating in as well as focusing on a number of market verticals, which we've already described. And then finally, on Explore, the shaping what's next. We've made an investment of GBP 10 million in PI Labs. So this is all about connecting new technology that's going to help us drive productivity and efficiency at the front line on the projects we serve. I think this is a really exciting development for Balfour Beatty because the way that we connect people, data and technology into the future will be key to driving those productivity and efficiency gains that our customers need. And then finally, we've begun to assess priorities across the U.K. and the U.S. in terms of adjacencies that will help strengthen our market position. So overall, I think we're making great momentum. Evolve Energize and Explore has landed well and truly in our organization, but it's fundamentally all about creating long-term value for all of our stakeholders. So let me now summarize where we are. We have a really powerful platform for growth, demonstrated through the strong first half momentum we have in the business and the slightly upgraded guidance that we've given for the second half of the year, but well beyond that, I think, in terms of the momentum we have in the organization. Our order book is significant and of high quality, and we're really well positioned in the growing markets that we've chosen because of their long-term growth potential and the ability to bring our great depth of expertise to those customers. We've absolutely retained the disciplined governance processes that have enabled us and afforded us the opportunity to grow and our robust balance sheet, along with our consistent capital allocation framework can give you certainty about where the company is headed. And then finally, under Evolve, Energize and Explore, we really do have fantastic momentum into the future. So when I take all of those things together, I have a high degree of confidence in our ability to create long-term value and sustainable returns for all of our shareholders and stakeholders. So thank you very much. Myles and I now look forward to your questions.

[Operator Instructions]

[indiscernible] from Investec. Just 2 for me, please. Wondered if you could -- when we look at the kind of support service margin over 9%, is that sustainable from here on out? Is it -- the mix has improved and therefore, we should expect that for the full year and into next? And then secondly, with the U.S. monitorship kind of finished now, when you look at that U.S. ministry assets, it's quite a big chunk of the investment portfolio. What's your view on that? If you were to sell it, would you recycle it into more investments or any other options you'd think about there?

Yes, certainly. Perhaps I take the monitorship question first and come back to you on support services. So just in terms of the monitorship, I mean, ultimately, our main goal firstly was to end the monitorship. And so we're obviously pleased to have done that. I think where we are now, it's really important that we embed and sustain what we've done in terms of improving the quality of the business. And so our focus remains on delivering a great service for the American service men and women that live in those properties. So that's our immediate focus.

Okay. And on the Support Services margin, we're delighted with the strong start to the year. 9.1% is an excellent performance, which was actually margin increase in both the Power and the Transportation divisions within Support Services. Going forward, yes, I think the momentum we've got will continue. Whether we'll stay at 9.1% by the full year, I'm not so sure, but we'll get close to 9%.

Jonny Coubrough from Deutsche Numis. Can I ask a follow-up question on power? As you move from Part A to Part B on these contracts, how will the terms and conditions change and the risks that you take [indiscernible]

Yes, certainly. So I mean, obviously, this is a well-trodden path. And actually, one of the things that we're really keen on is this model because what happens during Part A is that we're absolutely an intrinsic part of the design and development of those projects. That means that by the time we come to submit the final price for those works, that's something we have a high degree of confidence in. So we really welcome the model and I guess, progressing with our clients on that.

And also on U.S. Civils, I think you said, Myles, that delivered a much reduced loss in the first half, so still loss-making. Can we take it that Buildings is doing a 2% management fee margin on a run rate basis?

I think between Civils and Buildings, we had a big step-up in performance from the first half of last year to first half of this year. You'll recall that the Texas Highway project has been a drag on profitability. So that's got us to where we are now. I think between the 2 divisions, we would expect a pickup in that margin as we approach the full year. And yes, U.S. buildings, long term, we talked about it before, 1.5% to 2% is where it should end up.

And last one for me is just on the 3 Es and exploring adjacencies. Could this mean adding an additional growth market to your existing ones? And can that be done organically? Or do you think that would involve acquisitions?

Yes. So I mean our absolute focus is on organic growth. And I think you've seen the momentum that we believe we can see in those markets and those chosen growth markets moving forward. So that's our priority.

Rob Clentry, Berenberg. Three questions for me, all on the U.S. I guess, firstly, following up from Johnny's question, could you just help us frame the longer-term margin dynamics in the U.S. after, I guess, moving away from Civils and towards buildings, principally in terms of, I guess, the risk taken on in that 1.5% to 2% building margin and how you manage that? Secondly, U.S. data center market, any indication on, I guess, the progress year-on-year and the percentage of a book that it is in the U.S. and any differences in economics you receive compared to more traditional areas? And thirdly, I'm not sure this is a correct phrasing to ask you, but in terms of capacity utilization in the U.S. in terms of the teams, is there a battle for talent given how buoyant the broader markets are there any bottlenecks given the 19% growth? Effectively, how busy are the team and how much more is it to go with the team you've got there in the U.S.

Okay. Great. I'll take all 3 of those. But if you want to chip in, Myles, please do. So I guess in terms of the longer-term dynamics of the market, and we've already talked about building margins being between 1.5% and 2%. And you can see, look, our overall mix is about 90-10. So 90% of our revenues from the buildings market and 10% from Civils. And that's broadly the mix that I'd like to maintain as we move forward, obviously, with some growth in there overall. From a U.K. data centers perspective, so if you look at our overall order book, 6% of our order book in the U.S. is in data centers. I do expect that to increase, and I expect that to get into probably a double-digit percentage in terms of how that looks moving forward. But I think the key thing about our U.S. business is the ability to remain agile. And so if I look back at our order book 5 years ago, we were at double digit and strongly double digits on commercial and residential, and we're not because the market changed. And so it's about being able to take our capability and flex that across the buildings market environment, which I think we are very adept at doing. And I guess just to be clear, it will be important not to be overweight on data centers, and we'll make sure that the balance remains in our business. And then finally, I think just a question on capacity. Well, look, talent is always a challenge. And our ability to attract and retain the best talent in the industry will be a constant challenge for us now and into the future. But I think we have a great employee value proposition, look at the incredible work that we're doing. And therefore, I think we remain an attractive brand for people to want to join.

Andrew Nussey from Peel Hunt. A couple of questions as well, please. First of all, when we look at working capital as a percentage of revenue increased to sort of -- or negative 19% versus negative 17%, which is obviously significantly higher than sort of the long-run average. You gave us a feel for the drivers behind that, but those drivers don't look like they're going to change anytime soon. So what are your thoughts over perhaps the medium term in terms of how that might shape? And secondly, in Support Services, the drop-through from that revenue increase was very significant. Again, you gave some reasons behind it. But I just -- were there any sort of one-offs in there that might impact the margin next year and going forward?

Thank you very much. Look, firstly, working capital. As you say, very strong performance, around about 19% of revenue. We've talked in the past about 15% to 18% being the sort of level we'd settle at. I think that's still the case. That's why we're holding our average cash, i.e. increasing our guidance. So our average cash is around about GBP 1.6 billion by the year-end. And you're also aware, these are down payment mobilization payments on our contracts. If the style of contract continues and the growth continues, then we are going to continue with that sort of 15% to 18% negative working capital. But that cash is needed to deliver the programs. So we will, yes, whilst we may see some further inflows given the growth that Philip set out, there will also be outflows to programs. Sorry, second question. The second question is about the drop [indiscernible] Support Services, it was a great first half, 9.1%. It's great performance by the teams. In the second half, we have got some of these early start contracts, which they drop through. We will see an increase in PFO in the second half. But I just -- I wouldn't say 9.1% is the new normal yet.