Centrica plc (CNA) Earnings Call Transcript & Summary

Thank you very much for joining. It's great to be here again today. And it's only 2 days since our last meeting for some of you. So I'm sure you're delighted to see a lot of us this week as usual. I'm joined on the stage by our CFO, Russell O'Brien. The leadership team is in the front row, and we've got our Chairman here as well, Kevin O'Byrne. The work we've done to improve our operations and pivot our infrastructure portfolio mean that our business is becoming more balanced and more resilient. And you can see that coming through in these results. We are increasingly able to offer our customers the solutions that will keep energy reliable, sustainable and affordable through the energy transition. We can look to the future with confidence. The external conditions have been challenging so far this year, and our results reflect that with earnings of 7p per share. Weather has cost us about GBP 50 million in the first half. Whilst we can't control the weather, we've been able to use technology and data to improve our response. We have developed new models for predicting demand, which resulted in better performance during the recent exceptionally warm weather than it would otherwise have been, and we've moved away from full seasonal nonhedging. This mitigated the weather impact by tens of millions of pounds. And although Centrica Energy has faced headwinds in gas and power trading, we were prudent about the way we traded in the first half, we were disciplined. We took risk capital off and we sat, and we watched the market. But we're not alone in seeing these external trends, but we're also not complacent. We remain focused on creating value. And the way that we're managing the business means there's no change to our outlook for this year or beyond. In fact, we're increasingly confident that we can deliver in the top half of our EBITDA range by 2028. And personally, I'll be very disappointed if we don't do much, much better than that. We remain in good shape to deliver growth, with our balance sheet in a very, very strong position. And that means we can also continue to recognize our owners, our shareholders through the ongoing buyback program and our intended 5.5p dividend this year. The energy transition continues to present massive opportunities for Centrica, opportunities to keep energy secure and affordable for customers while supporting the journey to net zero. We remain disciplined and pragmatic as we pursue these opportunities with the terms at the heart of everything that we do. And we're focused on our three strategic value drivers: number one, driving operational improvements across the group; number two, more commercial innovation; and number three, investing for value. And we've made progress across the board, but there's still much, much more that we can do, particularly on the commercial side and most notably in Services & Solutions. Profitability is growing. It's great to see, but we need to get customer numbers moving in the right direction. And we can further simplify how we do things. The good news is that the steps we've taken over the past few years, moving our data to the cloud, beefing up our capabilities; means that we can embrace the latest advances in AI and technology. There is a huge amount of value here for us, both in the top line and in our cost base. And that's why we're accelerating our transformation plans, and I'll expand on that later. So when we launched our strategy in 2023, we laid out how we would position Centrica to benefit from the energy transition. Disciplined investment to grow our infrastructure business is a key part of this strategy with a clear target to increase our share of stable, regulated earnings. And we've taken a significant step forward in that with Sizewell C. We're delighted to be a part of this project alongside the U.K. government, EDF, La Caisse and Amber. We could not have better partners to [ push ] this development forward at pace. And once built, Sizewell C will provide vital energy security for the U.K., generating affordable zero carbon baseload power for decades to come, creating 10,000 highly skilled jobs and 1,500 apprenticeships. Now developing nuclear plants is not easy. The government deserves huge credit for recognizing the need for this investment. And I'd like to reiterate my thanks to the U.K. government, to the Chancellor, Rachel Reeves, and our team at the Treasury and to the Secretary of State for Energy Security and Net Zero, Ed Miliband and his team by creating a stable long-term regulatory framework. They've addressed the key barriers to attracting private capital, allowing us to invest with confidence and delivering clear benefits for the country at the same time. Now we've set a high bar to commit our capital. The structure we've agreed delivered attractive returns, and it meets the requirements we laid out, phased investment, no preproductive capital and protection against delays and cost overruns. We've also secured valuable future options to potentially increase our stake and to provide route-to-market services. It's a long-term investment. It's backed by regulation, and this will make us far more predictable. We're doing what we said we'd do, and we've got more fantastic opportunities under review to deploy capital. That remains our focus, subject, of course, to delivering value. And as I've said before, we will be very disciplined. We like nuclear. It's the only truly reliable and sustainable source of energy. It's the backbone of the energy transition. And aside from Sizewell, we continue to study the case for even further life extensions at our 4 advanced gas-cooled reactors. Now any extension are pure -- it would be a pure value upside. There is limited or no additional investment required. Elsewhere, the meter asset provider continues to perform better than we expected. The team has done a fantastic job growing a business from scratch. It shows what we can do when we bring the right people together with the right focus. And as of last week, we've got over 1 million meters in the wall, and we expect to take that to 1.5 million meters by the end of this year. Our EBITDA target is well underpinned, and we're starting to think about broader commercial opportunities, exploring how we can grow this fantastic business even faster. In Ireland, we've got -- we now expect the commissioning of our 2 gas peakers around the end of this year. We're working really hard to get the plants up and running, and the case for reliable backup generation continues to grow. And that's why we're pleased to be building a third peaker in Galway, and that will take us to 1 gigawatt of capacity in Ireland by 2030, which is 20% of Ireland's current electricity demand, with returns underpinned by long-term capacity market contracts at all 4 Irish gas power stations. Our long-term pipeline remains strong, and we continue to review a broad range of opportunities. And at the same time, we've accelerated value by selling most of our share in the Cygnus gas field, and that continues our move away from gas production, and it increases our focus in Spirit Energy and the really exciting carbon storage opportunity at Morecambe Net Zero. If you look at Rough, we welcome the government's recently announced consultation on gas storage, and this will consider possible regulatory frameworks to unlock investment. Rough is a vital strategic asset for this country, but we've been clear that a loss of up to GBP 100 million this year is not sustainable. And we continue to produce the remaining gas just now, and we're ready to develop Rough as soon as we get the right framework in place. This will be another long-term project, delivering energy security for the country and value for our shareholders. Now we remain hopeful, but we can't keep this option open indefinitely. Without a positive outcome from consultation, the consultation is due to start in the autumn, it's hard to see Rough operating beyond the end of this winter. So we will be urging the government to move at speed. And that's enough from me. Russell is going to take you through the numbers, and then I'll come back and talk to you about the strategy later.

Thanks, Chris, and good morning, everyone. Before I dive into the numbers, I just want to echo Chris' sentiment that we continue to see good progress across the group. We've delivered strong operating metrics, and we remain focused on further improvements as we move forward. So for the first half, adjusted EBITDA was GBP 900 million, translating into earnings per share of 7p. Whilst resilient overall, certain elements of the first half have been challenging, and our financial results reflect that. We generated free cash flow of almost GBP 250 million, which includes CapEx of GBP 244 million. And our adjusted net cash closed at GBP 2.5 billion after returning GBP 0.5 billion to our shareholders through the share buyback and dividends. We've declared a dividend of 1.83p per share for the half. That's 22% year-on-year up, consistent with our intention to pay 5.5p per share for the full year. And at the end of June, we had about GBP 450 million remaining on our GBP 2 billion buyback. Group operating profit was GBP 549 million, a softer result compared to last year. And let me take you through the key elements of that. Retail and Optimization delivered GBP 354 million of operating profit for the half. Within that, our profits in Retail grew, a good result, given that backdrop. Services & Solutions saw an improved result of GBP 42 million, stronger operational performance, supported by top line growth of 4% and margins grew. There is still much more to come in Services, and we are building momentum. We remain confident we will hit our guidance range next year. Now despite the warmer-than-normal weather that Chris mentioned, British Gas Energy delivered GBP 179 million of operating profit, a year-on-year increase driven by a strong performance in small business. Centrica Energy was impacted by unusual market conditions with operating profit of GBP 65 million. Infrastructure output was broadly flat against last year, although profits were lower due to falling commodity prices, and that's partially offset by the hedging we do. We also saw a loss at Rough of GBP 26 million, principally driven by the high fixed cost base and lower gas price spreads, although we were able to accelerate delivery of some of the revenue and release working capital. So let me unpack a couple of the important dynamics behind the results. Weather is our single biggest risk, and there is very limited scope to hedge it out. A cold start to the year meant we were about GBP 50 million ahead of -- by the end of February. But from March, that reversed. So unseasonably warm temperatures meant volumes were 12% lower than normal through to June. So that cost us overall GBP 100 million. So overall, net-net, it was a GBP 50 million headwind from weather. And as is always the case with this business, there are timing differences between periods on revenues and costs, which influence the results. And we saw that this half, including a GBP 40 million benefit from the final reconciliation of the energy price guarantee scheme and the headwind from the shape of the commodity curves. In Centrica Energy, our LNG and renewable route-to-market businesses are performing well, but results were softer because of two important trends impacting gas and power trading. First, gas storage economics have been impacted by mandatory volume targets in Europe. That was a key driver of inverted summer/winter spreads, which significantly reduced the opportunities we saw to secure capacity this year. But the result is that European gas and storage currently lower than average, the risk to energy security is higher due to these measures. Secondly, we generate profit by optimizing based on market fundamentals and our diversified range of physical positions. And so far this year, volatility has been driven by geopolitics, tariff news flows, [ sound ] bites. The market saw short-cycle volatility driven by speculative capital disrupting the fundamental physical trades we focus on. And as a result of these trends, we remain very disciplined and deployed far less capital in storage and elsewhere than we normally would. Now we are beginning to see more rational behavior returning to the European gas markets. Fundamentals are reasserting themselves, storage targets have been eased, and more opportunities are emerging. And that gives us more confidence heading into the second half. Our LNG and renewable route-to-market businesses are performing well. And of course, we're not standing still either. We're continuing to grow our capabilities, including the recent opening of our first Centric Energy office in the U.S. So we see a path to the low end of our GBP 250 million to GBP 350 million guidance range this year, albeit that requires a further normalization in the markets to get there. Moving on to cash flow, including EBITDA and dividends received from our nuclear business, we generated over GBP 800 million. We paid cash tax of GBP 200 million. The net working capital movement was almost GBP 100 million out, but that masks a couple of offsetting movements in British Gas Energy and Rough, highlighting again the value of the balanced diversified portfolio. Disciplined investment to grow our sustainable earnings is a key part of the strategy, and delivering attractive returns remains much more important to us than investing quickly. We all welcome the progress we've made this year in the MAP and more recently on Sizewell C. So first-half investment included GBP 100 million in the MAP, and we expect CapEx to ramp up in the second half, including the initial spend on Sizewell C. We also continue to invest in technology, supporting the improvements we've already delivered across the operations; and the next phase of transformation, which will make Centrica a much leaner, more agile company. All of this led to free cash flow of GBP 244 million for the period. Our balance sheet remains strong even after accounting for pension and decommissioning liabilities. And following completion of our Cygnus disposal, decommissioning will fall by around GBP 100 million. You'll recall, we reached agreement on our triennial review with the pension trustees in February. The assumptions used in that review are now reflected in the IAS 19 accounting valuation, which led to a rise in the deficit in the period. There's no change to our technical provisions or deficit funding plans. There is no change to the guidance we gave in our trading statement in May. And due to the factors I just discussed, we expect residential energy and Centric Energy to come in towards the lower end of their profit ranges. Services & Solutions is expected to deliver a further improvement on last year's results, and we expect to be in the range next year. We're still comfortable with the range we laid out for Infrastructure. And within that, we continue to expect a loss of up to GBP 100 million at Rough and of course, as normal, group profitability is expected to be weighted to the first half. So to summarize, our performance in the first half was softer than we would have liked, but it has no impact on our ability to create long-term value. We've retained the guidance for the year and are focusing on significant opportunities across revenue and cost to maximize long-term earnings. Our balance sheet remains extremely strong, and our investment-grade credit rating is well underpinned. And with the announcement of our investment in Sizewell C earlier this week, almost 2/3 of our investment program is now committed, delivering attractive returns. And as our share of regulated earnings grows, we look forward to creating more balance sheet flexibility over time. And we are doing all of that while returning capital to shareholders, progressing the dividend and buying back shares consistently since 2022. Thanks for your time. Let me hand back to Chris.

Okay. Thanks, Russell. The situation that we faced 5 years ago was critical. We knew we needed to change, and I think that's exactly what we did. Our business today is far stronger as a result. We've got better relationships with our colleagues, better relationships with our customers. We've got a more focused portfolio, we've got a balance sheet that supports our ambitions rather than restricting them. But the best companies are constantly improving, and that's why we're looking at the next phase of transformation for Centrica. There are hundreds of millions of pounds of value at play, and I'm confident that we will secure every last penny. You can see the progress in our Energy Supply business, hard work over many years has transformed the operational foundations. We recently completed the migration of our U.K. residential customers to the Ignition platform, and moving 1/4 of the U.K.'s households makes it the largest utility platform migration globally. And we did that without any external help. Our team has done an incredible job. Ignition is a key part of our strategy, unlocking commercial flexibility and innovation, deeper customer insights and helping us lower our cost to serve. It's a key reason that we grew our customer base in the first half, helping us retain our existing customers and attract new customers. And that success gives us the confidence to accelerate the rollout of the [ Bord Gáis ] migration we will start soon. We've now got 40% of our U.K. SME customers in Ignition as well. Now in the past, we served all types of business customers, including very large industrial and commercial users, who have sophisticated and often complex needs. And we found these customers generated very low margins for the risks involved. So in 2022, we changed our focus, targeting smaller businesses, prioritizing value over volume. At the same time, we've been selling more through the Ignition platform. We've been using data to optimize pricing, delivering a better experience for customers and better returns for our business. The impact, as you can see, has been significant. Margins have almost doubled from where they were 5 years ago. We've added almost 100,000 new customer sites, including 11,000 in the first half of this year alone. The foundations are stronger. The commercial strategy is working, and we've got further growth opportunities there. If you look at services, profitability in Services has improved again in the first half. Better operational performance is now well embedded. Margins are growing. But the market continues to change around us. Consumers are moving away from protection products, and we're still losing customers. So we've had to think differently, fundamentally rethinking our go-to-market strategy. We started focusing on our on-demand offer a couple of years ago to make the most of the shift towards self-insurance. Now this continues to grow and is supported by more intelligent customer targeting and more dynamic pricing. I think we can still be much more commercial with our pricing. But we have created a gateway to bring in new customers, allowing us to demonstrate the value and peace of mind that we can provide. We're also building a portfolio, as you can see, of warranty partnerships with leading OEMs. We offer nationwide scale and an expert workforce. We address key constraints for our customers. And for Centrica, we increase [ engineer ] utilization, we improve profitability. We've already signed up several leading manufacturers that are more to come. Services can deliver those solutions independently, but the real value emerges when we connect our capabilities. Every boiler, every heat pump installation opens the door to other offerings, energy tariff, high thermostat, EV charger and membership. And our membership scheme gives us a customer insight and marketing channel to offer more of these integrated propositions, focusing on cross-selling opportunities, generating recurring revenue and building customer loyalty. So we're showing progress. But as you know and as my colleagues know, I'm always rather impatient for more. And the world is changing. Leaps forward in technology and AI are fueling huge growth in electricity demand. Complexity and intermittency is increasing. And as a result, so is demand for reliable, sustainable energy, just like that, which will come from Sizewell C. It is a fantastic time to be an energy supplier. It's a great opportunity to deliver excellence for our customers. We have to be ready. Now how are we going to do that? Firstly, we'll harness the full power of technology. Despite huge improvements in service quality, much of it driven by investing in our technology. Last year, we still had more than 18 million customer contacts in British Gas Energy alone. Now we've not made our processes easy enough. That creates unhappy customers that creates unnecessary contact. Our home move process is a good example of that. But we've recognized the problem. We've identified the pain points and we've streamlined the system for our colleagues, ensuring that they can deliver for our customers. We're now working to almost completely automate that process, making it as simple as possible for our customers to change their address without wasting any time at all on the phone. And that's just one example of incremental steps to improve our customer experience and to reduce incoming contact. By doing that, when our customers do need to contact us, we can handle the questions much more efficiently. And we think we're ahead of the pack adopting leading-edge technology here, and it's delivering significant benefits already. We've got fewer incoming contacts, we've got quicker resolution, we've got more satisfied customers. And ultimately, that gives you better customer retention, an improvement in cost and improvement in revenue. Secondly, we're accelerating commercial innovation. We're incentivizing our leaders to deliver the best outcome for the group rather than for the individual business, breaking down the barriers to delivering the coordinated products and services our customers want that only we can provide. And finally, we're creating an even simple Centrica. We have made great strides in efficiency, but we can't be complacent. What was efficient a few years ago is mediocre today, and soon, it will be lagging behind. I want us to be more focused to remove bureaucracy to promote faster decision-making to spend more of our time delivering for our customers. I think we've got the potential to fundamentally [ rebase ] our cost base here, which will make us much more competitive. And I've given a clear message to the business that this is about delivering a step-change in performance. We're not good to tinker around the edges. And that's why I'm confident that we can both narrow the 2028 EBITDA guidance range and deliver above the GBP 1.6 million -- GBP 1.6 billion, sorry, midpoint. But my ambition is far, far higher than that. So to recap, despite external headwinds in the first half, the team did the right things, and our underlying operations are performing well. The outlook for this year is unchanged. And we're staying focused on creating long-term value, taking a major step forward to Sizewell C alongside strong progress elsewhere. This underpins our longer-term trajectory, and the transformation program means we can do much, much better. I'm really proud of the progress that we've made, and the teams across Centrica deserve huge credit for that, led by the leadership team here. But I'm even more excited by what's to come. We've got incredibly strong foundations, and we remain laser focused on delivering. So that's enough for me. Thank you very much for listening Russell, the leadership team and maybe even our Chairman. And I will be delighted to take any questions that you've got.

We can, but the microphone is off. So those online won't be able to -- keep going.

Two questions. Firstly on Rough, can you please be explicit about closure? Is it fair to say that the government [indiscernible] against that and that there's a future for storage shut down [indiscernible] financials and what they might look like surrounding that? Secondly, Russell, just on [indiscernible] residential, you're still guiding to the bottom of that 150 to 250 range. Yes, you had a [indiscernible] but you had a GBP 40 million onetime credit from the closeout. So why is it still at the bottom of the range that? And then I guess just regarding the GBP 1.5 billion and the opportunities within that other than Rough, can you give us a flavor for what you're looking at? Is it more FlexGen? Will it be an acquisition of another generation asset? What is it that fits within your portfolio?

Perfect. Let me take the last and the first and then Russell will do the wizardry with the numbers on British Gas Residential. Look, we don't want to be any more specific on Rough. We've been very clear that we're not going to sustain losses on this. We'll see how the consultation goes. But you could also see a return to normality in the market, which I don't think is going to happen, which would -- which means that they could operate as a merchant business. But if we don't have a positive outcome from the consultation, then it's hard to see that Rough will be open beyond the end of this coming winter. So that takes you a little bit into the first half of next year. But we don't have unlimited patience on this. But there's been very positive statements from the Secretary of State at the Energy Security Summit in April about gas storage. The Chancellor, when she did the comprehensive spending review, specifically mentioned -- I can't remember what -- [ I'll ] paraphrase a side there something about the stupid decision of the last government to close Rough. And so I'm encouraged by what I see and then also the announcement of the consultation. So I think there's positive news there, but the government has got to make sure that they get what they consider to be value for money. We'll see. They did obviously very well. I think the Sizewell C. So I'm hoping they'll do very well with Rough as well. In terms of the remaining investment program, there are a bunch of things we're looking at. I like FlexGen, I like regulated assets. We are looking at opportunities to expand the meter asset provider as well. So as you know, we're agnostic in technology in this. And there's a number of things that we're looking at, but it will be within the bounds of what we laid out before, which is the returns will be good. Ideally, they will be contracted or regulated returns, and it will be more in the electricity space than any of the gas production space or anything. The other thing we've got is working net zero. And we were encouraged by the announcement by the National Wealth Fund of an investment in the front-end engineering and design for the pipeline from the peak cluster. And the reason we're really encouraged is because, firstly, that's -- those are the customers who signed up to put carbon into Morecambe. But it was the fact that the National Wealth Fund and the government announcement specifically mentioned the carbon would be stored in Morecambe. And so we feel there's quite some momentum there. So you've got a whole bunch of things, Rough will be a GBP 2 billion development over a number of years. Morecambe net zero, it's a bit earlier in the engineering stage. So the range, which I find incredibly frustrating from engineers, is between GBP 2 billion and GBP 4 billion, which is quite a substantial range. But you're probably looking at investment there 2030 and beyond. So it's probably outside the window to 2028. But there's a huge amount of opportunities. But what we're always very keen to do is to make sure that we have way more opportunities than we have capital, for two reasons. One is it means that you can be selective with your opportunities. The second thing is we're delighted with Sizewell C. But if Sizewell C hadn't happened, it wouldn't have been catastrophic for us because we've got other ideas in there. So we will always look to have far more ideas. And once we complete the program, we'll then turn our mind to recycling capital. So if we can get an idea that gives us a better return than something we've got, we'll sell what we've got and we'll buy more. So lots of ideas. Russell, British Gas Residential, are you holding out? And Mark, I think that was the question.

No, I'm not holding out. We're trying to give a balanced outlook. But -- so a couple of things on the residential energy business. The total result there, as reported, was GBP 179 million. But within that, it was GBP 133 million for residential energy and GBP 46 million for small business. And the small business number actually was up from GBP 3 million last year. So that had a big improvement. The residential energy business was actually slightly softer half-on-half. I discussed the sort of moving parts in there, the weather, a few one-offs. We've got GBP 13 billion worth a year of revenue and costs. So sometimes they don't always match in the same place. But your question was really about the second half of the year and why we're guiding to the bottom of the range. First main reason, there's just less colder months in the second half of the year. So seasonality drives the vast majority of that. We've got a little bit of a headwind continuing with the shape of the commodity curve just because of the way that's got priced in. And I think if you take all of that together, I'm thinking bottom half of the range is still the way to go.

[Operator Instructions]

It's Dominic Nash from Barclays. So I was is going to go two, but if Mark is going three and...

Please, don't go with four.

So well, I'm sure I can have sub parts. The first one, sort of a top-level question really on Rima. Clearly, you must be pleased that the zonal power pricing has been dropped. But is Rima now basically a dam scrip and should -- are there any concerns over what's left in it or reformed national pricing, the impacts of that on your company? Secondly, is your ambition in Sizewell C the end of new nuclear? And can you just remind me again, what's your view on potentially sort of getting involved with SMRs or other sort of the larger ones? And finally, just a quick one on Centrica Energy. I think there's a slight change in your guidance here, if I'm not mistaken, which was before it was at the bottom end of the range. Now it's at the bottom of the range, caveated to a normalization of market. Could you just give us sort of what we need to look out for what our key KPIs are to know what normalization is? And if it doesn't normalize and it is what we currently see, what would be the number materializing for the full year?

Thanks, I'll take the first two and then Russell to take the Centrica Energy one. Sizewell C, is it the end of new nuclear? No, it's not. So we don't think it with the Sizewell C and therefore, we're happy. We've looked at some of the SMRs. We've spoken Rolls-Royce about their technology. We looked at X-energy and advanced modular reactor business in the U.S., and we're talking to people who understand what's going on in the technology. We have a competitive advantage because I don't think SMRs are the solution to distributed energy. I don't think we'll see SMRs appearing all over the country because unless you've got a nuclear power station close to you, you're probably not going to be too keen to have one built near you. So those that have them close to them, they know that they're safe and they know that they bring really good well-paid jobs. And so we, along with EDF own most of the sites that would be suitable for the deployment of future nuclear technology. And so I think we're in quite a strong position there. So we'd be very happy to look at it, but you've got to -- if you're going to deploy first of a kind, then there has to be some risk here and there. You're not going to find that we're going to come out and say surprise, we're going to put the first Rolls-Royce small module reactor and we're going to do on a merchant basis, and we're going to keep our fingers crossed that everything is okay. So it would have to be some kind of partnership with the government in terms of risk sharing there, but we would be interested. But I think what you'll find is I think you'll find -- I think Rolls-Royce is a 470 [ MW ] reactor. I think you'll find 3, 4, 5, 6 of these in the one site rather than lots of them dotted around the country. On Rima, we were delighted that zonal pricing was dropped. Lots of people were against it because they thought it would harm the investment. We were actually against it because we thought it was daft for customers. And we think that the future energy market requires customer engagement. And if you've got an energy price, it changes every 30 minutes just now, it could change every 5 minutes. And if you've got 9 zone -- you got 12 local distribution zones, you get 9 pricing zones. It become a complete another nightmare. But I also thought that the benefits were quite theoretical. So we're delighted with how that's going. But look, in terms of Rima, I think we're going to learn over the next 2, 3, 4, 5 years as we try and deploy more flexible tariffs. We're going to learn what we need to do. So I don't think we know right now what the electricity market has to look like going forward. So I wouldn't say it was a dam scrip, but I think we're going to have to learn. And therefore, the regulators are going to have to be quicker and the government is going to have to be quicker in terms of how we change things. This is going to be an iterative process, I think. And that will require a complete fundamental reset of how we do things. We won't have 12 months for a consultation, 12 months for a response and then 12 months for an implementation. I think we're going to have to be far better at implementing change. So that will probably require some different kind of framework. But zonal pricing, we're comfortable that, that's been dropped. I think it's in the best interest of the customer.

On Centric Energy and where we expect that to go. we would just sort of step back first and just remind everybody, there's 3 business units there. So there's the LNG business. the renewable route-to-market and then the gas and power trading. LNG had a solid first half. We think it's going to be solid in the second half. Route-to-market actually gigawatts under management grew in the first half. So that's going in the right direction. So it's really gas and power trading that we're talking about. And the things that we're looking at in the first half that drove some of the results, so it was the gas storage economics of these mandatory volume targets that inverted the spreads. the volatility, the news flows that was challenging. But the third thing was there was no liquidity in the market, so people weren't trading. A lot of market participants got quite badly burned and stepped away from the market. And we're very happy with Cassim and his team. They didn't chase the market, they stepped back. We took risk capital off, and we ended up with a softer, but not a terribly bad position. So as you look forward then, it's really dependent on the market conditions in gas and power trading. So what are we looking for in terms of normalization and what we're seeing that's giving us a bit more confidence. So more rational behavior is returning to the market. So there is more liquidity, there's more people trading, there's more people on the screen to connect with. And that liquidity allows us to then step in behind that with taking positions, physical positions as well as options to support the trajectory going forward. And of course, storage spreads have returned to positive levels. So that's -- there's margin available for people to take. Just in the past couple of months, we've increased our gas storage capacity under management by 30%. So we're stepping back into the market. And so we'll continue that trend. You've got to remember that the -- most of the money you make in this gas and power trading business is over the winter season anyway. So we've got a bit of the year to go. And in the past, we've seen different market dynamics, and we'll wait and see how that plays out. But that's the things that we're looking at. And then just to reinforce, that's not the only games we're playing, trying to grow elsewhere. And of course, trading already started in the U.S. as a diversification.

We'll go to Jenny and then we go to Ahmed and come back to you.

Jenny Ping from Citi. Three questions also, please. Firstly, Chris, can I just confirm something you've said in your last couple of lines of your closing remarks talking about narrowing the range to GBP 1.6 billion in terms of EBITDA guidance? So we're really no longer looking at GBP 1.3 billion to GBP 1.9 billion and now is GBP 1.6 billion to GBP 1.9 billion. Can I just check that as the first point? And then secondly, Miliband talked to the prospect of a MAP -- sorry, a meter consultation or further announcement around the meter rollout in the coming weeks in the recent [ DESNZ ] session he hosted earlier this week. Can you just talk a little bit of what you're expecting from that announcement? And then thirdly, another policy-related question. I mean the U.K. government seems to want to get quite close to the EU with linking of [ ETS ], et cetera. Is there a risk that there's a full integration of the energy market that takes place? And if so, what does that mean in terms of the price cap that we currently have in the Retail business?

Well, so not on the range, I think we can shave the bottom off now. I think 1.6 to 1.9, I have to watch because Russell within reach and he's got quite a hard punch. So if I was to say, yes, that wouldn't be right. I'd get a punch in the face. The reality is we don't know, but we think that what we see in terms of the opportunities is that we can firm up that range. And I'm quite clear that if we only hit 1.6, I'd be quite disappointed, but rather than we're not ready at the moment to see what new range is. I think Ed was at the select committee when he mentioned about meter consultation. I don't know what he's planning, to be honest. I saw him Tuesday, [ he was ] talking about size. Well, he's pretty busy at the moment. So he's very engaged. I don't know, but what I hope we're going to talk about is compulsory installation of smart meters. And maybe a smarter thing, I mean unless everybody has a smart meter, it's kind of difficult for electricity. But then you can look and say smart meters for gas, do they actually give you anything? Probably not. They save you meter readers, but there's no -- you're not going to interact with the gas market in the way that you interact with the electricity market. So it's just a guess, but I would think if you really wanted this to go properly, you might drop the gas smart meter requirement because it just gives us an allowance to have meter readers and you might make smart meter deployment compulsory. And if you want to go one step further, what I've spoken to government before about is rather than have each supplier responsible for installing a smart meter in the customer, why don't you just carve the country up, give us -- let's go street by street? So our engineers go to #4 as a customer, they go to #17, and they go to #42. But if the engineer could just go door to door, then you get a quicker and a cheaper smart meter rollout. And obviously, we'd be delighted with that, given that we have the smart meter asset provision business. So we are even more interested. And then look, the [ road ] integration with the EU, is it a risk to the price cap? I'm not sure how I would see that necessarily following, unless you had a full harmonization and you didn't have, for example, NBP and TTF prices. If you had a full harmonization of prices across Europe, you still have the price cap. You just set it by reference to price that was less local. So harmonization, I'm sure there'll be some risks, there'll be some opportunities. Certainly, I think we prefer the Emission Trading Scheme to be more harmonized than you've got green certificates, et cetera. That would make our life easier administratively. And Cassim and the team are brilliant to find an opportunity. So if we stay deconsolidated, it will be fine. And if we harmonize, it will be fine as well. There might just be different opportunities. But I don't see it as being a major risk of a threat. Excellent. Ahmed?

Ahmed Farman, Jefferies. Chris, you talked about potential extension to existing nuclear power plants. I just wanted to ask if you could talk a little bit more about it. Is that something that we could see visibility this year? Is that something for 2026? What are the potential lifetime extension scenarios? Super helpful to sort of understand that better. I also wanted to ask you if you could talk a little bit about the sort of the residential supply business. What trends are you seeing in bad debts in terms of customer payment behavior? Is there anything significant to call out there for the first half?

Thank you. Let me take the first one and Russell will talk about the bad debts. Extension -- I'm looking at Dave -- perfect. So I mean, do you want to take, Dave? Dave Kirwan is the CEO of Power business. And Dave, I mean I'm hopeful we can see something this year, but I don't know, Dave, if you want to...

Sure. I mean the news on the AGR lifetimes that we shared late last year extended [ Haitian ], Hartlepool, Torness, according to those remit notices. The indications at the time was they're on watch. The AGR lifetime mechanisms are well understood. The EDF team continued their diligence and the preparation for safety case. So prospects for additional lifetimes is a watch with no new news. But in terms of any changes since the last remit notice, nothing untoward. So no negatives. And obviously, we'll await outcomes of more diligence before any further notice is issued. So it's a little bit of as you were, but nothing untoward since with the operation of the fleet.

I was cagey with man. That's even better, you see.

I'm cagier than my boss.

So what's happening in bad debt? So total charge for the first half year was GBP 231 million. If you drill down into that, GBP 159 million was in the residential energy business in the U.K. As a percentage of revenue, bad debts remained flat, about 3% of revenue. So revenues are down, the actual charge came down. That's -- the improvement in the bad debt picture is probably -- it's not going as quickly as we thought as we come out of the energy crisis. So many of our customers are still having challenges to pay the bills, and we're tracking that. So not material moves, but maybe the trend is not going down as quickly as possible. The important thing to remember, though, of course, in the residential business, the bad debt charge eventually gets covered by the price cap as an allowance. And so there's a phasing over time on that, but you get recovery there. That's the main message in bad debt.

I think -- I mean the thing I'd add, we hope to see the regulator taking some steps on this because if you look at the overall bad debt provision level just now, it's about 3x what it was a few years ago. And we can't continue with something whereby we can't tell who can't pay and who won't pay and the regulator not do much about it. So there really is something there. The people that don't pay are being subsidized by the people who do pay. And every time you add something to the don't-pay list, it becomes more painful for people. So I think we need to see a step-change here from the regulator in figuring out what to do. We don't cut people off. Prepayment meters are not particularly popular. And so the Chairman and I met with the regulator recently, and they're concerned about it. But the solution has to be in their hands and can't be -- if somebody refuses to pay, we're very limited in what we can do under the regulation. So this is a regulatory problem that needs to be fixed. Harry?

Thank you. Hopefully, that's working. So it's Harry Wyburd from BNP. So two from me, please. The first, can I come back to your GBP 1.3 billion to GBP 1.9 billion 2028 EBITDA range? So if I've understood correctly, the reason you're more excited about that is that you see more efficiency potential in the business. So is that fair? And what has led to that kind of epiphany? Because I think you've talked about a bit more today than you have done previously. Is it AI? Is it better achievements on your efficiency so far? And is there any way you could quantify for us what kind of metric you would target financially or otherwise on an efficiency program if you were to launch a more formal one in 6 months' time? And then secondly, on the balance sheet deployment, I guess one of your challenges is you're dependent on a lot of government decisions, right? And that was one of the issues with Sizewell C. It took a little longer to come than all of us might have hoped. But how long would you wait for -- I mean, we've covered Rough, but how long would you wait for Morecambe? And is there any bar that if that bar was cleared, you would do something instead of them, so you'd move faster? So if you saw a fantastic acquisition, would you go for that in the next 9 months and say, we'll leave Morecambe for another day? And then maybe a final addition to that, getting a high single-digit real return on Sizewell C, it's a lot better than we can get in index-linked bonds or premium bonds that anyone in this room can get. So why not put more in that? And would you wait around to put more into Sizewell C, which from my perspective, would be a fantastic deal? I wish I could, but I have to invest in your shares first and I'm not allowed to.

So look, Sizewell C, it's brilliant when you make an investment and somebody says, "why did you not take more?" We have the right of first offer on any future government sell-down along with Amber and La Caisse in proportion to our ownership. Could we be interested? Definitely. But it just depends on what else we got. And the question is, could we have done 20% rather than 15%? We could have, but we could also done 10%. So we're looking for a balance. Would we consider an acquisition? We are considering acquisition opportunities right now. And we're not -- but what we're not going to do is we're not going to sit and wait and keep our fingers crossed that something is going to happen. But we're also not going to back -- Russell got a face which you'd quite like, which is it's not going to be the first cab off the bank that we'll go for. Sizewell C took longer than any of us would have liked, but part of that was us shaping the investment with the government. So it wasn't just that we were like pushing and saying like let's get it sorted. We were pushing very hard to get the right terms. And if the terms hadn't been right, we wouldn't have invested. And so I'd far rather be patient and wait and get the right terms. But we weren't just working on that. We've been working on other things at the same time. So we'll always do that, and we'll push. Morecambe, there's a chance that Morecambe might be quicker than Rough. And the reason for that is that you've already got an existing commitment of GBP 20 billion over 20 years to carbon capture and storage, you've got an existing approval process. And so Track 1 track -- we didn't apply in Track 1 for Morecambe, applied in Track 2. But we're a bit late to the game, so we would have been amazed if we got it, but we thought it was worthwhile applying. But we think we're very, very well positioned for Track 3 when that comes out. And so Morecambe is about getting approval for an existing field in an existing framework. Rough's about applying an existing framework to something slightly different. So it's entirely possible that Morecambe approval could be in a slightly shorter term. And Morecambe, remember, is 2 reservoirs. So we could actually commence CO2 storage in Morecambe while still producing gas. So you've got North Morecambe and South Morecambe, they're rather imaginatively named. But I'm quite enthusiastic. But I would rather sit -- like I'd rather in February sit -- my first preference we'd be sitting, talking about great investments, but the second preference would be that we're sitting and saying, look, I know we still with too much cash in the balance sheet, but we're working things through. What I don't want to do is to get to 2028, so this is great, we've invested $4 billion or $5 billion, whatever the number is, and then spend the next 5 years regretting. I probably wouldn't get 5 years, Kevin would probably fire me. So I'd rather take time and make the right investment. So we'll be very patient and very disciplined, but also very challenging with the counterparts. And then look, on the efficiency metrics, so we see opportunity both for revenue and for cost. The metric I would look in cost, I think, is always where are your costs, so where is your OpEx and where is your cost of goods sold? And are they lower or higher? I don't like to get into all of this c*** about let's throw your waterfall, which will explain to you why the cost would have been lower if these five things didn't happen. So the way that we would measure is if our OpEx is lower. And then I think we've got efficiencies probably also in cost of sales. But the revenue opportunities might be just as interesting. And so if you look, for example, we've got 7.5 million residential energy customers and 2.8 million, I think, contract customers in Services. We don't know why we've got 7.5 million customers in services because even if they don't buy contracts, like boilers still break down, heat pumps break down, people need their electrics fixed. And so I think there's as much in the revenue line. I would expect that we will be able to give far more clarity in February about what targets would be on the cost side and how you would measure that.

Okay. And in terms of what's changed, is there something that's changed since AI? Is it -- so AI sort of changed versus 6 months ago when you work with...

One of our colleagues remain nameless. I was talking to them, I don't know if it 3 hours after we signed the Sizewell C thing, and I was [ manned ] about something that they said, can you not just take the day to be happy about Sizewell C.? So like I'm always impatient. And I'm always looking for more, and it drives a number of my colleagues nuts. So there's an element -- we can see more opportunity. We can see our operational performance is very, very strong. And something you just have to step back and look and say, okay, what can we do things differently? And the developments in technology are helping us to think about that. But there's also just something about it doesn't -- like I think if you ever come into the office and you think that's it, we're done, we're really good, I think you should leave because you're never done. The opportunity is always there. So I think the day I come in, I think this is it, I'm going to sit back and smoke a cigar, that's the day that the Chairman will come in and I'll go to the Chair and say, look, it's time for somebody else to come in, who that's got fresh ideas. So just a constant evolution. Pavan?

Pavan Mahbubani from JPMorgan. Chris, you mentioned there was a commercial opportunity in the meter asset program. And I was wondering if you could elaborate a bit more on where you see those opportunities and how those could materialize. And then on the transformation program, you've given a good bit of detail. Do you think that, that will require incremental CapEx? And does that feed into some of the uncommitted that's left to spend by 2028 within the budget? And then I have a couple of questions on Spirit. Russell, if you can help with the phasing of profitability in Spirit between H1 and H2 and help us in terms of how we should think about that, particularly with the disposal of the Cygnus? And finally, in your release this morning, there was an impairment in Spirit because of an assumed, I guess, earlier closure or shorter economic life. Can you give a bit more detail on what your expectations are now versus what they were before?

Those two half Spirit questions are clearly for Russell. I don't think I'd say -- remember an impairment, it depends on what you -- because these fields got a very short time horizon, you've got a liquid curve. So that could change every 6 months. You just have to take the observable prices. The commercial opportunities in the MAP, I think that we have the opportunity to do that for other people. I also think that -- so the MAP business in and of itself is a brilliant business. And Dan and Gareth, who runs the business, have done an incredible job in setting it up. But what it gives us is the opportunity to own, track and finance small assets. And we install best part of 100,000 boilers a year, probably about 5,000 heat pumps. So the biggest installer of heat pumps and boilers, 20,000 EV chargers, whatever the number is. So if we're able to own and track and finance the smart meter, well, we could extend that potentially to boilers, heat pumps, EV chargers. We're not ready yet to start to do that. But that's always been in my mind in terms of why -- I'd like to go into the smart meter business because if we do that, none of our competitors can do it, they don't have the balance sheet. And then Russell and the team will make sure that if we do embark on that, we have the ability, as we do with the MAP, to turn up and turn down the investment, so we see a better investment elsewhere, we bring in some third-party capital. So that's -- I think there's opportunities for other energy suppliers. There might be opportunities even in other countries that people will go through a smart rollout, but there's a lot of opportunity in our existing customer base just now and to differentiate ourselves commercially. Transformation, I wouldn't expect them to be major additional CapEx. But there will definitely be implementation costs, and that would mostly be OpEx. The technology costs will be mostly OpEx as you go through Software-as-a-Service. And as we lay out what we'll -- what we expect to achieve, we'll also lay out what it will cost. What we won't do is go back to what we used to do years ago when I was the CFO, I have to say I inherited the practice, is to separately identify in the middle column, all the transformation costs because we used to spend hundreds of millions a year on taking costs out. We maybe spent GBP 400 million, taking out GBP 200 million of costs, and we felt very good about this part of the financials. And this we won't separate it out, but we will -- we won't put in a different column, but we will tell people how much it costs because there will have to be investment. We can't deliver material cost synergies or revenue synergies without investing money. So we'll do that in February.

Good Spirit. So just to give you a couple of numbers, so of course, GBP 150 million of AOP for the first half of this year, that's down from [ 245 ] last year. So what you're seeing just generally across all the infrastructure businesses is reduced income. A lot of that was hedged, but -- and that will continue. The curves are in that dynamic. I think volumes, we expect to be roughly flat half 1, half 2. And there's sort of hedge price we've got for half 2, is about 111p per therm. So most of that's already in the bag. Now we've got this divestment of Cygnus. So most of Cygnus goes. It's an asset held for sale at the moment. We will book the revenue. We'll book the earnings right through to the close date, and then that will get unwound. I think overall, we're still okay with the guidance range for Spirit and the nuclear assets of 250 to 400. And then that implies full-year production of Spirit between [ 695 ] and [ 720 ]. So nothing really changed there. It would just be the phasing of the curve that will dictate most of it. And then on Morecambe, I think Chris answered most of the question. So it's -- that liquid period that has come down in the first 6 months of this year, what you do is you do an economic end of life for those facilities. And for Spirit, we were previously more towards the end of the decade, that's come back down to sort of '27 sort of time, maybe '28, but we'll keep watching it. We'll be driving efficiencies. And of course, the game plan for Morecambe is to try and make sure that we extend that asset as long as possible so that it sinks into the future development opportunities.

Yes. Remember, a few years ago, Morecambe was due to close in 2021. So we'll continue to eke out and see if it's tend to go on. The question -- and then Fraser, I don't know if we've got any online.

Charles Swabey, HSBC. Two questions for me. First is on British Gas Energy. When we think about the warmer weather we saw this year, could you remind us on your assumptions? Are they -- when you're guiding, is it based on historical averages? Or are we assuming a structurally warmer weather patterns? That's the first question. And the second one is on Centrica Storage and following on the comments about spreads improving. Depending on how that evolves in the second half of the year, could you see a situation where you get closer to the GBP 50 million rather than the GBP 100 million loss?

I think the second one should come from Russell, but I would say I would be extremely doubtful. I'm looking at Cassim sitting here. Cassim doesn't look particularly hopeful of trimming GBP 50 million off the losses. Look, in British Gas Energy, we don't assume the historic weather. We assume that we've got -- that we do see warming, but also that we see more volatility in the weather. And that's why developing a different way to hedge the weather, basically you look at the seasonal norm demand, you make adjustments for how climate change is occurring and about the extremes that we see. But remember, we were GBP 50 million -- when we sat here in February or whatever it was in February, we were delighted with GBP 50 million up. We thought we were having a party in now. We're GBP 50 million down 5 months later, so GBP 100 million reverse. So had we not changed the way that we hedged and forecast on the weather, that GBP 50 million would have been well over GBP 100 million, in my view. So we do adjust that as we go forward. We always learn from experience there. But Russell, what do you think what's the chance of the 50?

That's not very likely. So just to remind you sort of -- you give us sort of close to GBP 100 million cost base there. We do have some hedges this year from previous years that we're working through, that gave a bit of support in the first half. We've been taking out some of the indigenous production. So there's currently 16 Bcf in Rough as we sit today. Of that, 13 Bcf is the indigenous or the cushion gas. That was 14 at the beginning of the year. So we've taken out 1 Bcf of that cushion gas. We will continue to do some of that in the second half of the year that might support revenue a little bit. But I'm still very comfortable towards the top end of the 50 to 100.

Fraser, we got some online questions.

Yes.

Are these really online questions? Are these your questions?

They're certainly not my questions. Yes, the first one is from Ajay Patel at Goldman Sachs on gas storage. Can you please detail the path for gas storage? If no support is given, how much cushion gas can you extract? And what would be the cost of closure? Would you be interested in an interim measure, where you're paid an annuity to keep the facility open? And what could that look like?

Excellent. So Russell just mentioned about the gas that we take out. The cost of closure is about GBP 300 million. That's a decommissioning cost provision. And if AG is offering an annuity, I'd be delighted to take a bit. But you see this point, we have spoken to the government to say, look, do you want to open, for example, for this winter? And the discussions are that we won't inject subsidized gas this winter, but that does remain an opportunity. But you've got OpEx in that business of about GBP 80 million. And you've got to have a spread between your summer, winter gas price in order to cover the OpEx and then to make a bit of a profit as well. So we would absolutely be -- but we're not in the business of holding gun to anybody's head. We've had very constructive conversations with the government. They know the position. I think they would like to keep it open, but they've got to make sure that it passes the value for money to us. So we'll see.

The next one is from Pierre-Alexandre Ramondenc from AlphaValue. Following the divestment of your stake in Cygnus and your ambition to transition towards net zero operations, what's the rationale for retaining Spirit Energy? Could a full disposal be considered? Or is the business too integrated with your other operations? Any clarity would be appreciated.

So a full disposal of anything we've got can be considered. So we don't have anything that is so fully integrated that we can dispose. That applies across the group. Spirit, after the disposal of 46% and 46.25%, I think it was percent of Cygnus, has got 15% of Cygnus. It's got the Greater Markham area and it's got Morecambe, and it's got a bunch of decommissioning. And so if we were to dispose off Spirit, we'd be trusting that somebody who would take Spirit, would fund, pay for all the decommissioning rather than it's happened not that long ago, we take the money and run away. And so we'd have to have control over the decommissioning. We wouldn't want to sell Morecambe because we see that as a big opportunity. Greater Markham and Cygnus, the 2 remaining gas-producing fuels, Morecambe, for the right price, I would sell. And we sold -- the price that we got for our 46.25% stake in Cygnus was twice our hold value. So it was a value decision. And we'd do the same for the remaining part of Cygnus and for the Greater Markham area. But I'd like to keep Spirit. I'd like -- Spirit was at GBP 1.3 billion or something in the decommissioning liabilities. That would be an awful lot of trust you would place on somebody. So we will execute the decommissioning, and we will hopefully convert Morecambe into the U.K.'s largest and maybe even the world's largest carbon storage facility, which over a 40-year life, will take 25 megatons of carbon every year. So if we take 1 gigatonne of carbon, to put that into context, the U.K. wants to get to the point of storing just over 100 mega tonnes a year. So this would take 25% of the U.K.'s planned storage. So it's a huge opportunity.

Thank you. And then final question as it stands, although classically three-parter from Bartek Kubicki at Bernstein. Part one, could you confirm the trend of households moving away from regulated tariffs to fixed tariffs? What does that mean for margins and competitive pressure? Would it also mean lower protection against extraordinary costs such as higher bad debts as there will be less and less people on regulated tariffs? And I'll maybe pause there and let you answer that one first.

Russel, that one's for you.

Yes. So we are seeing a trend of people moving away from the price cap on to fixed rate tariffs that's going probably in the 25% to 30% sort of range now. We're seeing more churn. We're seeing more people moving [ towards ] suppliers. And for what we have to do is make sure that we're competitive in that space. We're trying to make sure we've got profitable tariffs out there that keep our customers for longer. So where that trend goes is hard to tell. But certainly, we're seeing a movement up in switching and movements to fixed rate tariffs over the past year as we come out of the crisis. So that's the main part of it.

Second part, what triggered the depreciation -- sorry, excuse me, the depletion of liquidity on markets in the first half of 2025? And what needs to happen for liquidity to come back?

Look, I think we've mentioned earlier on that it was, I think, geopolitical-driven volatility, something driven by comments from individuals, heads of state and the like, and you can't call that. So we sat on our hands a little bit. We took risk capital off other, people did as well. So just fewer people in the market. It's just a reaction to the events. So we saw that level of volatility, and it was fundamentally driven. If you'd have seen an increase in liquidity, more people would have been in the market.

Thank you. Third and final bit. Are earnings from route-to-market increasingly linear with the higher level of capacities contracted?

I wouldn't say they're increasingly linear, but the route-to-market services have always had a good substantive base of contracted revenues. And if you go back to the teach-in we did last December, you can see we unpick that a little bit in terms of the type of contracts, the type of PPAs that we write for customers across Europe. So I'd say, that's broadly the same, but still a very important part of the earnings mix for that business.

Fantastic. That's everything we have on the webcast.

One question, the last question if people can get. I know it's a busy day for people.

Martin from Citibank. Just a real quick question on the dual-run IT costs. I think you said it's GBP 9 per customer in the first half this year. You've moved over on 100% on Ignition platform now. Does that all come off? Is it as simple as just taking that and having the cost savings there? Or how should we think about it?

I mean, remember, so we had a monolithic SAP platform called ECC6, which was designed for utilities. So with all the energy customers on there, but we also put our services customers on there. It wasn't designed for that, but we thought that was efficient. So they are still on that. So the system won't close until, I think, the end of next year. End of 2026 is the aim, I think, for the ECC6. I see our Chief Technology Officer nodding there. So we still have those costs in there, but that will be turned off at the end of 2026. But Russell, I don't know if there's anything to add on the dual run in the energy business.

No, that's -- so total cost per customer was GBP 97. That's up slightly from the end of last year of that GBP 9 dual-running costs. So yes, you've answered it.

Yes. Excellent. Well, with that, thank you very much for your time. Thanks for your patience, and thanks for -- obviously, for those of you that attended on Tuesday as well at very, very short notice. So it's been a very busy week. We're happy with the operational performance. There's a lot more to go for commercial. We look forward to updating you on our results for the full year in February and also on our transformation program and what you can expect from that as we go forward. So thanks very much.