Crest Nicholson Holdings plc (CRST) Earnings Call Transcript & Summary

And before some of the chair of the company. I think I've actually been awarded a slide. I've been here 5 years I think today, I have a slide with the debt, and unfortunately, it's not showing. And it's for due to my inability to take -- here we are -- my name on this slide. we go the next with that, please. So I'm here really to interest there and talk just a little bit about the agenda. You will be aware that this is so spinal results session is our Chief Executive I'm going to say a little bit at detail at the end of this. But it is also something very special about today Peter -- it's that -- what I do need to choose to have the bursting is it what we to choose to have the results, which way around is an we're hoping on a very good day. So you're going to do an introduction and overview. Bill is going to tackle the numbers. And of course, we've had Bill now with us to provide what 9 months when you first arrived, I referred to as young Mr. Floyd I'm now referring to this bill to love. And then Peter will come back to the market overview, and then we'll have some Q&A, and I'll bring it to an end and I want to introduce you to Martin Parks you know, that we applied to the CEO will take over tomorrow. So again, thank you all for being here. I hope for a good session, and I think that's the pointed which I hand over to you, Peter.

Thank you very much, Ian, and let me start with the overview for theory. The toning conditions have presented a mixed picture, but within all narrow bands than was deflated this time last year, we haven't seen the extreme volatility around in 2023. And -- more so, it has at times felt like a race of once to get going, but they suffered a few false starts. Thirdly, sales were sluggish at the end of 2023 before we saw healthy rates start coming through in the first few months of 2024. However, this strength actually declined as the expected interest rate cuts failed to materialize and more only, of course, as a general action to come into focus. The Bank of England rate has remained stable at 5.25% for our period in strong contrast [indiscernible] series of [indiscernible] in 2023, but mortgage rates are [indiscernible] forward expectations, and the hopeful rate reductions are still for the future. The first cut psychologically is crucial in marking the start of a new and lower rate cycle. It will come and the market reaction will be positive when it does, but it didn't happen in our first half, and that has restricted our sales in the period. Overall, our [indiscernible] rates in the first half was 0.4 broadly as we expected. Pricing has remained firm and stable with no net loss or gain against our anticipated assumptions. [indiscernible] our land buying activity was undertaken this time last year, and we have become highly selective in our land acquisition in the first half, a period that has seen competition for spot market deals start become very competitive. The only additions to the land bank was 241-unit acquisition in [indiscernible]. Yorkshire. [indiscernible] active to the undertaken bias in 2022 and 2023 leaves us in a good position for the years ahead. Going forward, we'll mostly be acquiring land by drawing down options from our strategic land portfolio with only a few open market acquisitions needed mostly to serve our Gradorchard division or were an opportunity that presents outstanding value to realize. Our focus, therefore, will be both the strategic land conversions and, of course, obtaining implementable planning consent on these. As mentioned in our January AG trading update, following some unexpected cost overruns on legacy sites, we undertook in conjunction with the third-party specialist consulting [indiscernible] will review all of our portfolio of closed site liabilities that sit outside of [indiscernible] relation defects. This work has been completed and Bill will outline the findings and implications more fully in this section to follow. Paresh remains strong. We have moved from a positive cash position this time last year. a small debt position at the end of the first half, but the overall position has improved against our previous expectations with a lower net debt range also now projected for the full year. Our finances remain strong as a vote by much of the heavy lifting on land investment has been united in recent years. In summary, market conditions remained stable when compared to last year, and we've continued to work through our legacy issues and lower-margin sites. The operating platform going forward is far more sustainable, and we have a policy land portfolio. Strong focus and better processes that have been added in the period leave us with the confidence [indiscernible] the presenters Crest Nicholson can deliver strong results over the medium term. So let me now hand over to Bill Floydd, Finance [indiscernible].

Thanks, Peter. Good morning, everyone. This morning, I'll get to your financial summary at the half provides you with an update on our progress at [indiscernible] through the outcome of the completed sites are reviewed and conclude with the guidance for FY '24. [indiscernible] You can see the key lines from the income statement. At the back of the presentation is a full income statement as well as the balance sheet and the cash flow. Overall, it's a solid performance in our lesser-active market and as the business navigated through [indiscernible]. Revenue for the half was GBP 257.5 million, down 9% on last year, reflecting the weak forward order book as we came into the year. Adjusted gross margin fell from 17.9% to 13.6%, with the mix of sales being more heavily weighted to lower margin sites. I will give you more insights on our progress and working our way out to the low-margin site later in the presentation. Adjusted operating profit was GBP 6.2 million after charging GBP 5.9 million from the completed sites review. [indiscernible] before tax were GBP 33.5 million, and I will take you through these on a separate slide. [indiscernible] per share was GBP 0.7, [indiscernible], And on the dividend, we also declared an interim dividend of [ 1.0p. ] [indiscernible] We expect the average number of outlets for the year to end of [ 45%. ] The open market per rate was [ 0.47. ] After a slow start to the year with low rate in premium to [ 4.54 ] in February and March. Recent performance moderated, but we entered H2 with a forward order book to be delivered in the half of [ 450 ] open markets and [ 277 ] affordable homes and as such, are [ 80% ] covered for the year. We consider that our planning assumption for FY '24 of a slow rate of [ 0.45 ] is still appropriate. On completions, we achieved [ 788 ] in, of which [ 145 ] were the joint venture sites. Improved ASP improved by 2.3% to GBP 349,000 as a result of mix with the ASP and the individual categories marginally down, but again impacted by mix. We've made good progress working through the remaining deliverables upon them, progressing in line with our plan, albeit with the [indiscernible] as the modest cost creep due to scope as in rework. We've completed 1 of the 2 remaining apartment blocks and completion of the second remains on track for June as planned -- sorry, July as planned. The renovation of the [indiscernible] building is substantially complete, with minor works to finish over the remainder of the 2. We've been delaying in starting work on the road and pavement on the northern boundary of the sites, but this work is now underway and should complete in August. We're still awaiting final planning permission for the pedestrian bridge, but this work is now fully costed, which should not pose a material risk. As a result, with the exception of the pedestrian bridge, our build program is on track to be completed in August. On sales, we continue to make good progress with 55 of the total 239 apartments [indiscernible] I now expect those to be fully sold by the end of [ '25. ] Over the next couple of slides, I've got a few before and after pictures comparing what we showed to you at the FY '24 [indiscernible] and where we are now. The work on the [indiscernible] building is nearing completion. The extension to the left on the picture here is now fully built. That goes right away around the back of the building. The pictures on the right show you the interior of the building and this is now substantially complete and ready for handover to the tenants for them to commence the full [indiscernible]. In these pictures, you could see we completed all external building [indiscernible]. The real cinema is now open, and we've completed the external work on that last remaining apartment building. And finally, in this last picture, you can see the overall scheme. The remaining work on the sites is the fit out of this building here, the tater here and that we exit this way over the bridge and the work on the road is come up in the stockholder here. So as you can see, the sites now to actually build. Now turning to the complete sites were here. Initially, we intended to focus on the 4 sites previously identified and other complex sites completed prior to 2019. As a reminder, these are sites that are nonstandard housebuilding developments so that we are building today were complicated bespoke designs that were undertaken historically. We start currently decided to expand the scope of the review to cover all completed nonstandard types and a smaller number of standard sites for which the group maintains an outstanding obligation. In total, this is approximately [ 145 ]. External consultants have been working with our teams over an 8-week period to review our approach, challenge our estimates and make recommendations on process improvements going forward. Given the increase to the overall estimated cost increased to GBP 31.4 million. The accounting treatment for recording the charge [indiscernible] on a nonstandard and bespoke nature and predates the change in strategy to focus on housebuilding and the charge is [indiscernible] to exceptional. Costs related to standard housing developments are reported within adjusted operating profit. It is important to note that the cost of standard developments are almost all related to infrastructure, such as the roads and drainage rather than to individual homes. The most substantive work to be carried out on the is previously identified and the balances or more realistic estimates of previously known issues across a large number of sites. I expect the cash spend profile to be approximately over 3 years. And the next step is to set out a new road map of discipline so that we feel conclusively with all these matters. The details of the other exceptional items are as follows: the main change is on the combustible materials provision is an increase of GBP 8.9 million as a result of build cost inflation and scope changes, offset by recoveries of GBP 4.4 million from a third party in respect to effective design and [indiscernible]. There's also an interest -- [indiscernible] interest cost of GBP 3.2 million. There have been no substantial developments with respect to the legal claim made against the group relating to the fire at an apartment scheme in 2021. The tax rate on these exceptional charges is GBP 8.4 million. Moving on to the land portfolio. Since the end of the year, the reduction in [indiscernible] arises from some land reclassified that's most useful for commercial usage, some reduction as a result of planning decisions but mainly from sales achieved in the half. [indiscernible] balance to approximately half in FY '25 before unwinding in FY '26. The value of revenue from between 10% and 15% margin should be fairly consistent before unwinding in FY '27. This change in mix gives us good confidence that going to [ '25, ] gross margin will be on an upward trajectory. On the balance sheet, the key points to note [indiscernible] increased since the end of the year of GBP 17 million expected in preparation of back to market conditions. The group's long creditors are GBP [ 175.9 ] million, reflecting new commitments of GBP 32 million and payments of GBP 62 million. The chart on the right highlights our expected payment profile of the current commitments with GBP 82 million of spend expected in H2. Net assets reduced from GBP 876.6 million to GBP 803.1 million in large part due to the completed price costs and the dividend payment. The group's committed debt facilities are [indiscernible] GBP 250 million that matures in September 2026 and a GBP 100 million private placement, with GBP 15 million being replayed in August this year and the balancing tranches to FY '29. As such, I remain comfortable with the group's balance sheet and the availability of liquidity. The net cost outflow in the half was GBP 73.9 million, of which GBP 29.5 million is dividend. The balance of the cash outflow is substantially due to working capital. Improvements in our outlook on net debt for the year reflects that we have established a more disciplined approach to cash management in the business, some deferrable of the combustible payments and that we are less likely to commit further land payments in the financial year. As a result, I now expect the net debt at the end of the year to be between GBP 40 million and GBP [ 60 ] million, with the key dependencies being the endpoint on sales and whether the speed of planning impacts only landlord with payments. Turning to our guidance for the remainder of the year. [indiscernible] our latest planning assumptions. We expect sales volumes to continue to be impacted by the weak markets and until the election is over and interest rates do start to fall. As such, we are unlikely to see positive momentum from the market that will deliver benefits in this financial year. We expect [indiscernible] prices to remain stable and the build costs will continue to remain broadly stable as well on average, with lower material costs, offset by modest labor inflation. Our profitability, the key point to note, is the mix of site margins will be slightly worse than FY '23. Improvements in how we manage cash have reduced our estimate to finance costs to between GBP 8 million to GBP 9 million. [indiscernible] profitability is weighted towards the second half of the year given the way we [indiscernible] to FY '24. As such, we're now able to guide to an adjusted PBT range of GBP 22 million to GBP 29 million including the GBP 5.9 million one-off impact of the [indiscernible] review and the reduction in expected completions. On cash as I said previously, I'm expecting euro net debt position in the range of GBP [ 60 ] million with the key assumptions being committed land creditor payments of GBP 82 million, investments in which we are ready for a potential return to back to market conditions in FY '25, and an increase compared to H1 on the cash outflow for combustible remediation as the program starts to ramp up. Finally, moving on to my operational summary of the half. We've delivered a step change in operational discipline in the half, with further benefits to come as new processes are rolled out and become fully embedded in the DNA of the organization. It's [indiscernible] that both our safety and customer service metrics are trending positively. We've concluded a complete sites review, and I'm now comfortable that we're in a sensible position. The share of revenue from low-margin site is set to fall in FY '25. And importantly, we are substantially completing the build phase of these sites in FY '24 and early FY '25. [indiscernible] acquisition undertaken in FY '22 and FY '23 means that we have sufficient land in advanced stage of planning for FY '25 and into FY '26. We are increasing discipline on the balance sheet, which has improved the net debt position and will provide greater flexibility despite the additional costs we have identified. These measures will enable us to deliver stronger performance as the market conditions improve. With that, I'll hand it back to Peter.

Thanks very much, Bill, and I can now turn on to the market context and update on our operational performance and the environment that we've operated within over the last 6 to 9 months. Compared to some of the volatility that we saw through 2023, it's actually been relatively calm. One subject is dominated, of course, when are we going to see first intra-rate cut. This is 1 up and down over the period is the state has flowed in. And actually, the market has been quite sensitive to that news flow. I think this points to affordability still being the principal issue facing home buyers as well as [indiscernible], but to a lesser extent. These factors are, of course, elevated in the south of England where average selling prices are higher, and this is also, of course, where we have opened our own operations. Overall, pricing has remained stable as have volumes, albeit at lower levels than we would ideally like to see in a normal market. We really do want to see that first interest rate cut. Now we have the election. There's a clear favorite, of course, and usually an election result with a clear winner has seen confidence in the housing market return quickly. But in all likelihood, volumes will be challenged during the [indiscernible] period, and of course, we've seen a little [indiscernible]. [indiscernible] remain risks around Ukraine and the Middle East and potentially [indiscernible] surface, but supply chains have normalized out and the market is largely looking through these potential risks. And as I said, pricing is holding up, affordability is [indiscernible] still, but gradually as wage grow and outstrips inflation and mortgage rates reduce, this will lead. If this occurs, coupled with confidence return, and of course, given the supply side being so constrained concepts and cash pit inflation coming through in 2025. For costs, of course, also now stabilized with flat device inflation in the period and an expectation that this will continue through the rest of the year. The land supply side is very constrained. And regardless of which party wins election, this will not change quickly. Earning system operates at snails pace [indiscernible] blockers have to be done with and which party wins election. This will not change quickly. planning system operates at sales pace. [indiscernible] blockers have to be dealt with and the number of new talents planned or green belts are they grade rollback will produce homes for people to buy for many years ahead. So the most important thing any government can do is to reintroduce and enforce mandatory housing targets based on demand factors. And so the actual test of the demanding balance in recent years has been the resilience in the market. No matter what the economists predicted a simple fact is, in the end, huge demand driven by [indiscernible] in household formation when met with decades insufficient supply has kept pricing solid, albeit, of course, alongside lower transaction levels given the affordability challenge. And on to our operational update. At our preliminary presentation in [indiscernible], we see our key priorities for this financial year. So let me, therefore, update you on progress against these. [indiscernible], we need to regain our 5-star customer service rating. I'm pleased to report continued strong progress against this item. We have been tracking above 90% now since last February than the current measurement there, of course, are also ahead of [indiscernible] measure. There is still work to do, but we're in a very good place. We continue [indiscernible] our flexible multi-tenure platform. Although there are no deals to report in H1, we are working on a number of exciting opportunities that we would hope to close out in the second half of the year. Operationally, our main priority is getting planning consents through in order to increase outlets and to secure our land position for future years. We've had some success, but a lot of work remains. In particular, we had a number of our larger sites due to go to planning committees in the next few months. But I can't close out this particular point without mentioning the huge step forward in planning and our scheme of [indiscernible] in Surrey, which went to committee in May and now has a resolution to grant consent for up to 1,700 dwellings. We still have the Section 106 to close out, but this is a really significant step for us. We're making progress around building remediation, but [indiscernible] complexly equal requirements and a myriad of stakeholders to [indiscernible] with us progress inevitably a little bit slower than we would [indiscernible]. Of the buildings and scope, we have a good understanding of the risk profile of all of these and are able to properly prioritize the work stream in relation to the risk. Some work started on a total of 58 buildings in the period. Health and safety will always be our #1 priority. Whilst we must and will not be complacent, our scores around safety across a suite of measures are the strongest in the period since I've been leading Crest Nicholson and credit must go to our teams for their diligence in this area. Although market conditions remain stable, cyclical nature of the housing market in the U.K., the ongoing supply and demand imbalance, which over time, we will [indiscernible]. What differentiate Crest Nicholson where our long-term investment case is so strong is threefold. One, we have a large, well-located land portfolio to develop. Of course, we have a number of planning consents to secure to convert that land into outlets, but we will not need to participate meaningfully in the open market land -- in the open market plan in the few years ahead where, without doubt, demand [indiscernible]. Secondly, we now have a stable and efficient operating platform both on [indiscernible] standardized house designs focused on the family market. All of our sites going forward will be based upon low-rise standardized housing. We're at the late stages of deal their low-margin complex legacy sites, and these things placed by simplified higher-margin signs. And finally, we have a well-lined strategy and new leadership team with the very skills that are necessary to deliver this future plan, skills around control, discipline and strong processes. And as you can see from the chart, which has been updated from January, we have most of the land that we need to grow and deliver until 2027. [indiscernible] under our control or held under option. The main task now is to convert land colored brown from outlined full consent and to obtain 100% on the [indiscernible] plan, which is within local clients. It's worth reinforcing the most of the land helped in the strategic plan bag is as yet on price and can be acquired on a one-to-one basis at a discount to market value. [indiscernible] tougher market conditions to deal with, it will be very easy to dilute our responsibilities around climate change. I'm pleased to say this is far from the cadence that we remain well on track around the targets we set. Reducing Scope 1 and 2 emissions, utilizing renewable energy and reducing waste in the short term and also progressing to net zero in the medium to long term. Mitigating our impact on the environment will remain a key component of how we operate going forward. [indiscernible] sector in general have embraced the future homes agenda are well positioned for when this is mandated and currently, this is planned for some time between the end of 2025 and the end of 2026. However, I'm just cautioned that we do rely on other stakeholders to progress equally to this to be realized. In particular, we need government to finalize its requirements quickly so that the detailed design work for the type [indiscernible]. And to work with other bodies to ensure the availability of electricity and water capacity in all locations when [indiscernible] come. We just cannot have another situation like [indiscernible] that crept up on us and resulted in [indiscernible] country effectively closing down new housebuilding. Crest Nicholson across a multitude of [indiscernible], and this does provide external recognition of the strong progress that we've made and continue to make in this area. And to round up with a summary -- so to round up with the summary. There are, of course, ongoing challenges around the market, although there is [indiscernible] as I've mentioned [indiscernible]. In these uncertain times, the most important thing Crest Nicholson can do is to retain a strong balance sheet, and this has been achieved notwithstanding the very challenging times that we've seen in recent years. Our deposition year-end forecast improved over the period given the continued strong focus in this area. As the early signs of the improving macro environment merge, we're well positioned to participate in the [indiscernible] years ahead. I acknowledge in recent years, we have had a number of legacy issues to overcome on top of the difficult market conditions at all households faced. Historically, we have built a disproportionate quantity of complex and bespoke developments, which has led to large remediation costs and the distraction that this has caused, but, we have a clear path ahead now, a much better understanding of our portfolio than we did a year ago, and as I've explained, we do have a highly valuable land portfolio for us to develop [indiscernible] years as we move away from [indiscernible] margin sites, which have had a disproportionate impact on our P&L in recent years. And this land not only provides stronger margins, but equally a clear visible path to volume growth in a greater scale, and this will include [indiscernible] geographical footprint as our Yorkshire operation matures. [indiscernible] stepping way to enjoy my retirement, that business will now benefit from the leadership of [indiscernible], who is taking up the ranks and wishing him, bill and my other colleagues every success in the years ahead. So let me now move on to the Q&A session. If from we first take questions from the floor, and I'll just be go with people could just let me have your names [indiscernible] from to the benefit [indiscernible]. [indiscernible] finished into room will [indiscernible].

[indiscernible] Is it correct that [indiscernible] that 95% of that land portfolio is [indiscernible] you'd expect to be more like a sector average market. And [indiscernible]. And just on the provision of exactly did the third-party in to an [indiscernible].

Yes. Okay. So the first question, I think, aims me was around 5% on the low margin side, so therefore, it's [ 95% ] on the what called normal margin stuff yes. Correct.

[indiscernible]

Yes. Now in terms of the unwind of that remaining 5%, there'll be -- but this year is kind of the same as last year. It's going to half next year. So we've said [ 120 ], then you can down to [ 50, 60 ] next year. And then there's a bit less to go in FY '26, and FY '27 kind of [indiscernible].

Okay. So if I pick up the second 1 around the land market. And the land market is actually very interesting because there was still a market last year, but it was dominated mostly, I would have said by medium-sized house builders with a lot of the volume in the house build we expect to be out of the market. What we see now is continuation of the medium-sized house builders that's still very active. But I'd tell all of the volume [indiscernible] now back in the market. And it's probably more a regional basis. You wouldn't say anyone is strongly active in every market, but certainly regions of the large house builders are there and are being equally competitive with the [indiscernible] house builders. So it's a pretty strong market. Then I think the question was, what, comfort do we go from the third-party review. [indiscernible] the growth that they've been engaged in is to work through with the power teams over the course of 8 weeks, all the material sites, understanding what the challenges are and then reviewing our estimates and close on what we've done and how we've done it. My personal [indiscernible] is that I'm not a constant surveyor [indiscernible] and so they've been able to give me a view of, look, these are the ones we think of highest risk, [indiscernible] to go back and have to look at, and that's allowed us to refine those bigger sites as we go just to understand all the things that we need to think about. So this is now in an overall a sensible place. [indiscernible] sure, but overall, our sense is this is something we can work with. And the teams are [indiscernible] less. And we've got to now focus on getting that work done and getting off our plates.

3, please. First, term gross margin for the current year and I wonder that number of a range in where you think that lands within [indiscernible]. Just whether anything has changed against the moving parts of your expectation and first targeting for side mixed anything else there. And then just setting out to land bank. I think back at the half year review, [indiscernible] few numbers and charts around undergoing gross margins itself, [indiscernible] around 23% on 3 years where gross margin. Is that sort of a [indiscernible]? And then the last one [indiscernible] first half. Was that SP1 An active decision, was it about ability? And should we expect fire...

[indiscernible] I'll let Tom answer the first 2. just on bulk, look, it's always going to be happen stance. We've always been in the market, engaging with them with partners on on sites. -- when they come through, they're fairly lumpy, nothing came through in H1 working on some things. They might come through in H2. They might have an impact they might not. It's always going to be deal driven. It's never going to be desperation. And well, on a gross margin question, I'll give you the top given you the bottom. And if there's material movement in [indiscernible] so probably work out the rest. On the gross margin of the land bank overall, [ 23% ] that fill a sensible number to go with.

Christine from Duetsche. What the plans are there, perhaps detail as to our investments in the balance sheet. But also, could you consider third market sales there would you be profitable site on? Next one, really just partly sales is a data say no at the call in demand. I don't think got a sales rate in [indiscernible] a little bit of color around. And the final 1 really is just about Atlas. I mean, you've given this profile of like from '25, '26. I understand it's in independent, but would we expect outlet growth as we have over the last 2 years or more stable [indiscernible].

Okay. Thanks, Chris. I'll say for a couple of long [indiscernible]. The asset is held in joint venture with a financial institution. It's fully opened. So there's no [indiscernible] that are due on that. It is an equity share of that ownership and we have been in discussion some time about potentially buying a whole joint venture and [indiscernible]. I think let's get the planning through first. And then I think Martin [indiscernible] will look at the strategy around do we want to develop all 1,700 or want to do some [indiscernible]. I think that will be a decision for the future -- the future leadership team. But we have made significant, I think, on what you say good well-priced asset and probably the best market location [indiscernible].

So on the recent sales press, Chris, [indiscernible] the close between [ 0.4% and 0.45, but ] weaker at the beginning of that period. I suspect some of that might be our own ways of working. It's got over the last couple of weeks. So it's just kind of being out [indiscernible]. I think the number of sites we've got over a number of weeks, I can't would read too much into it at this point. On the number of outlets, that's something we've got to get into over the course of the balance of the half and what must can we actually pull in for next year, and we give good guidance on that, but I'm not expecting it to go down.

[indiscernible] from UBS. I got 2 questions. Just on the new shares you mentioned at times in the presentation, can you remind us how main -- sorry baton onto. Can you just remind us how out the sites are impacted buybacks. And then in terms of the bank creditors [indiscernible] GBO 100 million to year-end of reasonably?

[indiscernible] let Bill we'll be a couple of [indiscernible].

[indiscernible], it's around half a dozen [indiscernible] currently built up. One in particular, the the [indiscernible]. We have actually built the decision got a number of reserve matters applications already got out by then saying it was called in by the Secretary of State. We were quite hopeful, but of course, now with the election, that result has been delayed. [indiscernible] why we haven't got quite as many quite as much volume as we would have possibly expected.

On the land gross, it's 176 down by 80 to thing up, we might do something in Yorkshire, but there might be a size to the coupon, but we just act if we do start to something be massive my expectation.

[indiscernible] of the land sales, what's the population is comparable to [indiscernible]? Or is that due to increased what we see Second of all, in terms of [indiscernible]. Why are the still otitis to sites that you finish building out 5 years ago? Is it is the induction of roads. Is it something else that we need to be bearing of the pets. Thirdly, just in terms of the land bank, how much of the [indiscernible] owned, how much is controlled, I guess I think medical [indiscernible] lots. And then lastly, I listed recent you made for how many standard on types do you have how do you actually use, and is that where the more focused still on?

I can let me pick up a couple of that I'll ask Bill certainly pick up on the last bit points, and also the own versus controlled elements of the land bank. We might not have that data [indiscernible] to have that separately. I'll have a go at the the charges and the reasons but Bill will probably also expand upon that. And standard homes, I mean all of the homes [indiscernible] planning, I can understand outside major forward. We have just under 50 in the portfolio, but that does include one-off specials. Typically around 20 used commonly, maybe 80-20 will [indiscernible] about 20 of those being used [indiscernible]. On the old sites, I mean, this is not Crest Nicholson thing, this is everybody thing. We all have sites that closed and both service, open spaces waiting and pending adoption. I think we have a disproportionate number that have been slow to get over the line. I think some of the other distractions [indiscernible] part of reason for that. Most of those do [indiscernible] to things like [indiscernible]. But there are other issues, which of course [indiscernible] highlighted with all particular [indiscernible] buildings. But I don't know if Bill has [indiscernible].

On the land sales, margins in the teens. So kind of not really moved from the overall average. Can you remind me the other questions? Sorry, I scrub [indiscernible]. Sorry

The topline follow of [indiscernible].

We're going to have to come back to you on that one.

On the affordability [indiscernible] impacting numbers, what do you see in [indiscernible].

It's mostly the discretionary buyer, and it's more weighted towards the the south where portability is higher and the impact of higher interest rates is there. I think we saw that really good start of the year because the mortgage market reacting to swap rates had quite aggressively forward-priced mortgages. And I think buyers recognized that. But of course, as those rates started to go up, the number of people, if they're discretionary buyers, just [indiscernible] to see what happens first. That's why that first rate reduction is [indiscernible]. [indiscernible] necessarily whether we get 2, 3 or 4. It's the first one shows the shift in direction that will happen in [indiscernible]. Affordability is the other thing that also is gradually improving because it's not just about mortgage loans, it's also around wage inflation, [indiscernible] inflation that is just helping [indiscernible].

[indiscernible].

It is a more general thing. But the -- particularly with mortgages because of the higher ASP, there is more of an impact on the south of [indiscernible] [indiscernible] yesterday, they reinforce out a much bigger sample than we [indiscernible] produced.

[indiscernible] I think usually a set motion June results in January, should [indiscernible] Any early thoughts on [indiscernible].

[indiscernible] .

But we can't go through the summer something to say, we'll say.

Can we go to the phone questions?

[Operator Instructions].

[indiscernible]. We're going to pass the call back to Ian now. So thank you.

We do actually have a question that's just been registered if you're happy to take it.

Yes. sorry. Yes.

We have a question from Harry Goad from Bernberg.

I think in your earlier remarks, you talked about -- when you're talking about sort of possible planning changes you talked about the implementation of Manda 3 targets being the most important thing is future government could do. How easy do you think that is actually to implement? And if implemented, how long would it take for the act of that to actually flow through.

Thanks, Harry. Look, there are short-term, long-term things that any incoming government can do to increase supply it's important that we get short-term ones as well as long-term ones. And they've just manned [indiscernible] targets. As happened with the original version of the NPPF, we actually saw quite a rapid transformation in outline consents coming through. [indiscernible] became reserve [indiscernible] consent and all the technical approvals. There is 1 thing that's going to increase supply quickly, but I think enforcing the top-down targets will at least get that moving and start to see an impact in perhaps 2 to 3 years' time than into the next parliament, which I think few towns and rolling back the [indiscernible] and reforming the planning system holistically will take. Operator, any more questions, please?

operator, any more phone questions, please?

We have no further questions.

Thank you. We'll pass the call back to Ian now. Thank you.

I think the next slide is an instruction to me. So I will do in fairs. So what I do want to do at this stage is [indiscernible] say thank you to Peter. It's been quite a tough 5 years. I don't think you had any [indiscernible] producing 5-year [indiscernible] Chief Executive, Peter. I guess if we've known when we started together, we started more or less in the same day back in 2019. And we had known what we were facing into. I wonder what we might have done slightly differently. We will never know. But we've had COVID, pre-COVID and all the issues that the bank to COVID and what that's done to the financial sector, what that's done to the cost of debt. As we were just getting through that, and of course, we discovered that President Putin have got desires on some territory in Ukraine. So we've had all the issues of the Ukraine and what that has done. Then we've got Brexit because we tend to forget that the final piece of Brexit happened during this last 5 years. And very recently, we've got a conflict in Gaza. So there's been quite a lot happening internationally. But of course, there's been quite a lot of political turmoil as well in this country. We're on Prime Minister #3. And before [indiscernible], we're always certain it would be on Prime Minister #4. We've had 5 chancellors in that period, quite incredible when you actually look at it. Most people forget [indiscernible], but it was a [indiscernible] for 7 months, which is quite long in currently [indiscernible], but it didn't actually do anything we should probably release. I tried to find out how many housing ministers there [indiscernible], and I gave up, which is kept on finding that some of them have had 2 goes at it, which was interesting. And Peter has led Crest Nicholson through all of that period with great courage. It's tough doing this, great courage, great attitude and he has put in a huge amount of personal apatite into this. He id highly respected throughout the business. And through that period, and he's talked about it, we have a new very focused strategy as a housebuilder, standardized house types, new operating model, underlying systems have been sorted so that they're actually fit for purpose for the future. And there's been the creation of a great land bank. And I think 1 of the [indiscernible] for us is a fantastic line like a very high-quality portfolio sites. So Peter, thank you, huge thank you. Thank you for being a wonderful [indiscernible] as well. You get to know people really well [indiscernible], and we've had plenty of opportunities to get to know each other. And I have to say you have been little I like -- I absolutely [indiscernible] colleague throughout that. So I know I speak on behalf of all my colleagues and a huge thank you. Thank you very much. And all the very [indiscernible]. Now [indiscernible] the King [indiscernible] the king. So my next slide should say if it turns up here, we don't introduction to Martin [indiscernible]. Well, we're delighted to have you, Martin. Most people will know your fact that most recently from [indiscernible] before that from looms. A lot of experience in this industry. Your job is to turn that great land bank into that [indiscernible] facilities. But great great potential within the business into reality and create something with a growing opportunity to the future. We're delighted to have you. Do you want to stand up so you can see you?

Good morning all. so about a few months off, since ever person factories are fully recharged. And yes, I'm really looking forward to getting on with the job. I think that the company does have a massive [indiscernible] So perhaps that's [indiscernible].

Thank you, Martin. Right. That ends today. I think there's quite a lot of tee and coffee around. There are some pastries, et cetera, and we will be around and anybody wants to ask any questions please feel [indiscernible]. Again, thank you very much and people for coming. Thank you for your support, and we look forward to seeing what you're [indiscernible]. [indiscernible] keep capping water all the time. So we're going see what comes at a -- thank you all very much, indeed. [indiscernible]