Forterra plc (F0T.F) Earnings Call Transcript & Summary

Good morning, and thank you for joining us, and welcome to Forterra's 2025 Half Year Results. My name is Neil Ash, and I'm the CEO of Forterra, and I'm joined today by Ben Guyatt, who is our CFO. 2025 has started well, and I'm pleased to announce a strong set of H1 results that give us the confidence to increase our full year expectations. I'd like to take a brief moment to thank our employees whose hard work underpins these strong results. Our revenue increased by just over 20%, driven by volume growth and modest selling price progression. The U.K. brick market grew by 14% year-to-date to the end of May. And the recovery in the market demand has primarily come from house building with RM&I activity remaining subdued. Our exposure to volume housebuilder has led to market share recovery, though our share remains below 2022 levels. Profitability was strong with EBITDA growth outpacing revenue and reaching just under GBP 30 million. Operating cash flow exceeded expectations, supported -- supporting better-than-expected debt reduction. Net debt before leases reduced to GBP 69.4 million, equivalent to 1.4x adjusted EBITDA. Our interim dividend will increase to 1.9p per share, reflecting both improved trading and the strong reduction in debt. I will now hand over to Ben, who will present the financial review.

Thanks, Neil. Good morning, everyone. It's good to see you all here again. I'm delighted to be here for our first time actually at Investec, delivering a strong set of H1 results that reflect the benefit of improved demand for our products, particularly from the housebuilding sector. Firstly, as always, just to clarify that unless otherwise stated, I'm talking about adjusted financials. So these adjustments are made to give the fairest and most comparable assessment of our underlying trading performance. There's a slide in the deck while I'll explain the adjustments to the statutory numbers. So turning on to the performance. So we have seen improved demand across our product range and are reporting a 20% increase in revenue in the period. We're reporting a 23% increase in H1 adjusted EBITDA at GBP 29.9 million with a 30 bps improvement in our EBITDA margin. We have a broadly fixed depreciation charge and falling borrowing costs. This drops through to an adjusted profit before tax of GBP 16.6 million, a healthy 82% increase on the prior period, with our EPS also showing a similar level of increase. We've delivered a strong adjusted operating cash flow of GBP 30 million in the period, with this driven not only by our strong trading performance, but also continued disciplined management of working capital. Encouragingly, we have reported a further meaningful reduction in our net debt before leases with this falling to GBP 69.4 million from the year-end figure of GBP 84.9 million, countering the normal H1 seasonal trend. This performance, along with our expectations for the remainder of the year allows us to declare an interim dividend of 1.9p per share, which is an increase of 90%. So moving on to the P&L. As always, this slide gives me the opportunity to provide a clarification on a few of the more technical aspects of our numbers. Depreciation will increase a little in H2 as we begin depreciating the new assets at Wilnecote and Accrington, with an expected full year charge of GBP 21 million. Finance expense of GBP 3.4 million has fallen from GBP 4.9 million in the prior period due to reduction in both the level of borrowing and the rate of interest paid. Our finance expense is stated after capitalizing borrowing costs of GBP 1.4 million attributed to our projects at Wilnecote and Accrington. Whilst the capitalization of borrowing costs will cease in H2 '25 as the 2 factories are fully commissioned, reduced debt levels, a lower margin payable on our facility as the leverage reduces and expected future reductions in interest rates are all expected to lead to an H2 borrowing cost, which is close to or slightly above the H1 figure. Our effective rate of corporation tax was 26.1%, which, as expected and in line with our normal trends, is slightly above the statutory rate of corporation tax of 25%. So moving on to the adjustments to statutory results. This slide clarifies these adjustments in getting to the adjusted financials that we're presenting today. As you can see, the net upward adjustment to the statutory result in the period is GBP 6.7 million, with the adjusted result being higher by this amount. We've added back GBP 4 million of exceptional costs associated with our cash and margin accretive proposals to close the loss-making noncore businesses of Bison Bespoke Precast and Formpave, which manufactures block paving. Together, these businesses contribute less than 5% of group revenue, and neither has been profitable in recent years. Closing Formpave removes the requirement to invest over GBP 2 million of capital expenditure with no certainty of return and the exit from Bison Bespoke Precast creates the opportunity to realize material land value. In addition to the mainly noncash closure costs recognized to date, we expect to recognize cash redundancy payments of approximately GBP 1.7 million in the second half. As previously discussed, the energy adjustments removed the volatility of fair valuing energy derivatives where reduced output dictated that we had contracted for more energy than we subsequently needed. So in essence, that's simply a timing adjustment. As always, at the half year, we have an adjustment to spread the benefit of our free carbon allowances across the full year, in line with our production, whereas the statutory results account for all of the free carbon allowances in H1, creating a somewhat false imbalance in our result. So now looking at our operating segments. So if we look in more detail at the trading performance, where, as always, bricks and blocks is the primary driver of the group's performance. We've seen a significant improvement in trading during the period with demand for all of our core products increasing relative to the prior year. As we said earlier, the improved demand is driven by housebuilding with RM&I remaining subdued. U.K. brick industry dispatches to the end of May increased by 14% relative to the prior year, although they still remain 27% behind '22 levels. Mechanically, through our greater exposure to housebuilding, Forterra has outperformed the wider brick market in the period, reversing the pattern seen in 2023 although our market share remains below 2022 levels as we maintain our pricing discipline. Despite continued competitive market conditions, we've implemented necessary price increases across our product range to broadly offset cost inflation. Price increases have, to some extent, vary by product with aircrete block where supply and demand dynamics are most favorable seeing the greatest level of increase. Whereas we often talk most about brick, it is worth highlighting the strength of the aircrete performance in the period. Brick pricing in the period is subject to a customer and product mix effect, with increased demand for cheaper extruded bricks favored by our large housebuilding customers. With extruded or wirecut bricks as they're also known, representing around 2/3 of our production capacity and with government support for increased housebuilding, focusing on the affordable end of the market, we are well positioned to meet future demand. Our cost base remains consistent with our previous expectations with underlying low single-digit cost inflation, coupled with the increase in employer's national insurance contributions. Energy prices remain stable, with the group now accessing the full financial benefits of the 15-year solar power purchase agreement from the 1st of April '25. Energy markets have generally stabilized, and we have taken advantage of this in securing good coverage of our gas requirements for the next 3 years, and we have recently extended our contractual arrangements, providing us with the optionality to secure gas out to 2030 as market opportunities allow. We increased the production of aircrete blocks in the period, and with brick output to increase in H2. Our H1 results show the early benefits of our operating leverage, but our cost base does include a degree of inefficiency in ramping up production, including the training of new members of staff. In addition to this, we do have some additional cost in 2025 as we postponed some non-time-critical spend in 2023 and '24. With current demand varying significantly by market sector, until demand improves across our entire product range, including our RM&I-focused London brick range, our ability to fully benefit from operating -- from our operating leverage will remain partially constrained. So we move on to Bespoke products. So our precast flooring business comprises the bulk of this segment, and that business sells almost exclusively into new build housing. So therefore, has also seen a significant uplift in demand during the period. Floor beam sales benefit from the strongest volume recovery in our whole product range with the improvement in demand for hollow core flooring also. Floor beams are not generally stockpiled. So this provides some comfort that the brick demand we see is supported by construction rather than just a restocking of housebuilder inventories. Again, we have implemented modest selling price increases on a customer-by-customer basis during the period and like bricks and blocks, the cost base in this segment has remained broadly stable. In response to improved demand in the period, we have increased our production output, allowing us to do increased dispatches as we move into H2. Bison Bespoke Precast revenue in the period was GBP 6.2 million and despite increasing revenue by 18%, the business remained loss-making. The proposed exit of this business will add around 2% to the segmental EBITDA margin before overhead allocations. So moving on to working capital. As I said previously, we maintained our disciplined management of our working capital during the period. Improved demand for our products has allowed us to reduce our brick stocks in particular, driving a reduction in total inventories in the period of GBP 5.9 million. This helped us offset the normal seasonal pattern of increasing working capital in H1, leaving us with a broadly static working capital position relative to the previous year-end. Moving on to CapEx. So investing through the cycle and addressing our brick capacity constraint, we have spent around GBP 140 million of capital on strategic projects since 2019. With these projects now being completed, we are seeing a marked reduction in our current levels of capital spend. We spent a total of GBP 7.3 million of CapEx in the first half, and of this spend, GBP 5 million related to our strategic projects. Our maintenance CapEx remains carefully controlled with GBP 2.3 million spent in the period with a greater spend of around GBP 5 million expected in H2, driven by the timing of factory shutdowns. We envisage spending a total of approximately GBP 17 million of CapEx in 2025, leaving just over GBP 9 million to spend in the second half. We expect around GBP 9.5 million of our total 2025 CapEx spend to be directed to the completion of our 3 strategic projects at Desford, Wilnecote and Accrington, although there remains some uncertainty regarding the timing of these final payments. In future, we expect our maintenance capital spend to be a maximum of GBP 14 million per annum, although this will vary significantly year-on-year. At this stage, we've not committed to further strategic spend, although organic investment remains a key lever in our strategy. By virtue of the timing of projects, we expect future capital spend to be lumpy in its nature. However, we do not anticipate the same level of elevated capital spend that we have seen in recent years. So we look at our cash flow performance and the strength of our first half performance is further emphasized by our cash flow. Adjusted operating cash flow increased to GBP 30 million, an increase of 126% on the prior period, demonstrating 100% conversion to adjusted EBITDA in the period. We see a net cash inflow from adjusting items being the sale of surplus energy. In the second half, we expect the cash outflow of around GBP 1.7 million in respect of the proposals to exit the noncore businesses. Ultimately, both exits will be cash positive, either through freeing up land for potential disposal or through avoidance of CapEx. Interest paid relative to the prior period is adversely influenced by the timing of payments, although it does benefit from lower borrowings, lower margins driven by reduced leverage and also falling interest rates. Whilst we only paid a net GBP 600,000 of corporation tax in the first half, this is due to the receipt of a GBP 2.3 million prior year tax refund. We expect a tax outflow of around GBP 4 million in the second half, bringing the full year net outflow to just around GBP 6 million. This adds up to a GBP 15.5 million decrease in net debt before leases in the period at a time when recent seasonal patterns would have suggested a smaller reduction. Looking at the balance sheet. So as we said previously, we ended the period with net debt before leases of GBP 69.4 million, and that's reduced from GBP 84.9 million at the last year-end. Our borrowing stood at GBP 85 million, which is GBP 15 million lower than December 2024. Exactly half of our facility drawn at the period end, this lease facility headroom of GBP 85 million against our GBP 170 million RCF. Supported by our lending banks, we exercised a 17-month extension option in the period taking our committed facility to the end of June 2028. Closing leverage, as stated on a pre-IFRS 16 banking basis was 1.4x, down from 1.9x at the last year-end. We expect to continue our deleveraging in the second half with leverage expected to fall to just above 1x adjusted EBITDA on a banking basis by the end of the year. So this now concludes the financial section of this presentation, and I'll hand you back to Neil as he takes you for our markets, our continued strategic delivery and then the outlook for the rest of the year.

Thank you, Ben. So moving on to our markets. Now we all know that the U.K. needs to build more homes. And based on the CPA forecast, housing starts are expected to increase continually over the years to come. It's encouraging to see the year-to-date increase in activity, which is mainly coming from medium and large housebuilders. According to NHBC data, June year-to-date housing starts are up 12% versus the same period last year. And if you exclude flats and apartments and look at homes with their own front door, so to speak, they are up 26% compared to the same period last year. As I mentioned, brick volumes are up 14% year-on-year with extruded brick seeing even stronger growth. The table on the right shows that imported brick volumes have remained stable as a percentage of the total market on an MAT level. However, if you compare May year-to-date 2025 with the same period in 2024, imports have only risen by 9%, which is lower than the 14% growth in domestic brick sales. So pleasingly, imports have lost their share in the last 5 months. Right. Taking a look at brick capacity now. If I first draw your attention to the chart on the left, you can see how domestic brick capacity has evolved since 2007. U.K. installed capacity reached a low of 2 billion bricks before a round of investments that has seen in installed capacity increased to 2.2 billion bricks. You can see on this chart, 2 dotted lines. The blue line shows the demand in 2022, which is when we built just over 200,000 homes, and the black line shows the estimated number of bricks if we were to build a target of, let's say, 300,000 homes per year. So it's clear domestic capacity will be more than saturated by the time we get back to 2022 levels. Now if we move to the other chart, we have Forterra's capacity evolution since 2021. Due to the slowdown, we currently have 66% active capacity. And as the market continues to recover, the first step will be to run our active capacity at 100%, which includes saturating Desford before bringing back Claughton, our mothballed brickworks. The other important message on this slide is as a result of the Desford and Wilnecote investments, we have increased our installed capacity by 15%. No other U.K. brick manufacturer comes close to this level of additional capacity, and this puts us in pole position for when the market recovers. If we take a look at strategic imperatives now, so our strategic imperatives are twofold. And the first one is all around strengthening the core. We have a fantastic business, but all businesses can be even better. We've made key capital investments to strengthen the core. We've also looked at different parts of our business and decided to consider closing [ Coleford ] and [Indiscernible]. But it doesn't stop there. We're also making progress in our commercial excellence and operational excellence programs. The second driver of growth is beyond the core. Here, we're trying to think of the products and solutions for the buildings of tomorrow. To achieve our growth plans, we also have what we call strategic enablers. And I'm pleased to say our safety and engagement results continue to improve. And we're also making good progress on sustainability, and we will update you on that during the full year results presentation. So as already announced, we are preparing to increase the output of Desford by running both kilns at the same time. This is expected to start from September this year, and having already run both kilns individually, we're confident in achieving this next important milestone. This will be a key step in Desford's ramp-up on its way to produce 180 million bricks. But to be clear, due to market demand in 2025 and '26, we will not need all of that capacity just yet. At Wilnecote, I'm delighted to say we've let the kiln and started commissioning the extruded side of the factory, and we expect to be producing salable product in Q4 of this year. At Accrington, the slip line commissioning went incredibly well. Activity is currently focused on range design with the initial launch of 14 slips expected in the second half of this year. We will also be launching Omnia, our new brick rail system which will complete its external testing certification in the coming weeks. Omnia offers improved speed of installation versus our previous SureBrick product. If we take a look at capital allocation now, with an improving balance sheet, capital will be allocated to the following priorities: strategic organic capital investments that deliver compelling returns, and I would point out that our brick business is now very well invested. However, our current pipeline of projects includes a potential aircrete factory, and we are continuing to explore opportunities in calcined clay. We'll talk more about our dividend policy at full year results, and we remain fully committed to ensure it stays attractive for investors. We will also consider bolt-on acquisitions where suitable opportunities arise in adjacent or complementary markets and supplementary shareholder returns as appropriate. So looking ahead, we're encouraged by the group's year-to-date performance and pleased to see the demand of all products ahead of most -- almost all products ahead of both the prior year and previous expectations. We expect H2 adjusted EBITDA will be modestly ahead of the H1 figure. And therefore, full year 2025 adjusted EBITDA to be exceeding our previous expectations. This will translate to adjusted PBT being significantly ahead of the previous expectations due to the broadly flat depreciation and amortization and reducing financial costs. While we currently anticipate the present demand pattern to continue in the coming months, we remain cautious as to the fragility of the U.K. economy and the impact it may have on the new housing market. Looking beyond the current financial year, the Board remains confident that our recent investments in new production capacity leave the group in an excellent position to benefit from the market recovery in the key markets we operate in. We'd now like to move questions and answers.

[Operator Instructions]

Lewis Roxburgh, Goodbody. Just on your expectations of H2 being ahead of H1. I was just wondering what the key drivers of that? Is it a further volume acceleration in new build or is an improvement in the efficiency capacity ramp-up? And then just a second part to that and needing out those sort of operational efficiencies, just kind of see what's your thoughts on what an optimum margin can look like given normalized level of demand. And secondly, just you note more volume growth being helped by the volume housebuilders. So I just wondered if you've noticed the kind of shift in your customer mix and what that kind of feeds through to in terms of pricing.

So I'll take the one around kind of the cash capacity half and assumptions and maybe you cover off the margin, and I'll come back to customer mix, Ben. So look, the market has started very, very well and we are very exposed to the large- and medium-sized housebuilders and our strong position is in extruded brick. And as I mentioned earlier, that is ahead more than the overall brick market. And we expect that to continue for the rest of the year. We don't expect further increases, okay, but we expect the current levels to carry forward for the remainder of the year. Not everything is absolutely perfect. As we mentioned, the RM&I market, where we have our iconic London Brick is still quite depressed. And overall, from a pricing point of view, although we've increased prices of products to cover price over cost, we haven't achieved our overall price because of the change in mix of the profitability of products. So that kind of touches on your third question a little bit. I'll pass it over to Ben who maybe wants to talk about operational margin and drop-through.

Yes, of course. So look, what we're seeing so far is just the start of our operational leverage. So most of the extra volume we've sold this year was a product that was made previously at higher cost of production. So we've started ramping up production. So in the period, we ramped up aircrete in 2 stages. We also increased production of concrete floor beams right at the end of the period. And then the brick business, we get the big uplift at Desford in September. So this is going to take a while for this operational leverage to come through. So in terms of optimal margins, I'd sort of refer you back to 2022 levels and then add a little bit for Desford on top of that. But we're a long way away from that. But yes, you will see further kind of operational leverage through this year and into next year as we increase production and gain efficiency.

And just on customer mix, I kind of touched on it earlier, we don't have the kind of the highly profitable high-priced London Brick sales that we would like because of the depressed market. And also soft mud isn't performing in the same way as extruded brick. So as we're quite strong in extruded brick, we do have a soft mud business as well, and that's where pricing has been a little bit more challenging because the type of housebuilders who are building more homes at the moment are generally looking at cost, and they're choosing to use an extruded brick rather than a soft mud is a bit of a pattern we're starting to see.

Which is to our advantage, because 2/3 of our production capacity is extruded. So if you look going forward, obviously, the government want to build more houses, where they apply support it's going to be at the affordable end of the market. So I think kind of we're well placed to meet that demand with our extruded footprint going forward.

Aynsley, I think you are next and then we'll go to...

Aynsley Lammin from Investec. Just 2 for me. Just on the import spin displays. Is that just kind of the economics, they're not particularly favorable or imports more soft mud? Any color on the kind of dynamic there? And then I think you previously spoken about Desford at an incremental GBP 25 million of EBITDA. Is that still what you would expect as the kind of recovery comes through and matures?

Okay. I'll take the imports. Then you take the Desford question. So yes, the imports, a lot of the imports coming in are soft mud. As I mentioned, just now that's been quite a competitive part of the market. And it's not where the volume growth has really been coming from. So we're seeing that growth, like I said, in extruded brick. And that's where imports probably from a price point, probably struggle to get to. And that's not because it's a low price. It's just a domestically produced product in a cost-effective way. So yes, we're putting that down to it. Also, as we move through the cycle, a lot of the imported products were going into not only housing high end but also some commercial buildings. And the commercial side of things is probably a little bit behind the housing in terms of a recovery as well. But we're not that massively exposed to that market from a brick point of view. So I think that's all the noise within the imports. And ultimately, our volume customers don't want the complexity of dealing with imports. They want assurancy of supply. They want a reliable supplier who can give them the volume they need as their business grows and develops. And that's absolutely what our business can do because of its round of capital investment that it's made.

Yes. And just to add to that. Yes, just to add to what Neil was saying as well. So we previously talked about where kind of major housebuilders generally don't want that extra complication of imports. It was the merchanting sector who were maybe willing to kind of invest in imports and buy bricks kind of more speculatively. But we've talked about through this presentation, it's the merchanting sector that's really struggling at the moment, so that's probably weighing on that as well. And yes, to your second question of the GBP 25 million at Desford. So yes, Desford our target is that basically, we think Desford will add an incremental GBP 25 million to our business. Obviously, the timing of that has been delayed since we've kind of opened the factory driven by the market. But notwithstanding the fact that we have had a few teething problems and challenges, we did a detailed kind of exercise sort of earlier this year. And we still maintain all of the challenges and complications we've seen. We're working through them and none of them changed that the actual kind of end goal will be that we still believe that factory will add GBP 25 million to EBITDA. The unknown bit is when because we need the supportive market to warrant that level of production. And as Neil said, we're going to increase production. We're going to run 2 kilns simultaneously for the first time, but we still won't need 180 million bricks a year. So there'll still be some latent inefficiency in operating, but it's a good step in the right direction. I want to go to Ami next to Aynsley just to pass it.

Ami Galla from Citi. A few from me. The first one was just as we think about the sort of medium-term recovery, at least back to 2022 levels of brick demand for the industry, I wonder if you could give us some sort of color in terms of how much potentially is the risk of say, mainstream bricks being dislodged because housebuilders will use more timber frame? Is that at all a risk that we need to consider? And also, as we think about the current consumption, how much inroads has concrete bricks made in the market to date? My second question was just on energy costs. Now that we've got the visibility. Can you give us some guideline or color to how should we think about the energy cost line over the next 2 to 3 years? And the last one was on brick slips and the new product that you've been launching in the system, the system side of it. How is the actual process of specification or marketing that product? Is there a separate channel that you're pursuing to kind of get that specified more intensively as you think about the market ahead?

Right. So I'll talk about 1 and 2, and then do you want to take 3, and I'll come back to me for 4. So look, the midterm recovery 2022 we don't really see any kind of change around what people are using to build homes. You're absolutely right to say timber frame is increasing its penetration. And that gives us a slight challenge for aircrete, but we should consider a lot of aircrete is used below ground and timber frame buildings or homes still have aircrete in the foundations below ground. We spent a lot of time talking to the housebuilders and trying to get involved with their innovation plans and what they're looking to try and see how they build the homes of tomorrow. It's part of our Beyond the core strategy. And we're comfortable today that we don't see a massive swing or change away from traditional brick. You could say what would drive a change. It could be cost, it could be labor. But many of the housebuilders are very convinced that we can get back to the 2022 levels without having to address too much the labor challenge. People have moved away from the industry and they'll move back in. Concrete bricks. They found a little bit of a place in the market. There are some housebuilders who believe in them. We've done some in-depth studies from our side that see the complexity required in terms of building with concrete bricks, is not impossible, but it's more challenging than clay bricks, expansion, joints, all those types of things. There are some questions about ongoing longevity of the facade, the color and all those types of things. And I think what we see is many customers actually sticking with traditional clay brick, even with Marshall's recent announcements, they touched on that a little bit. And we've also had one housebuilder switch away from concrete brick to go back to a clay brick product because they want to go back that pleasing aesthetic. And we really believe in the merits and the value of concrete bricks from that point of view. Ben, do you want to pick up the third one?

Yes. So as we said in the sort of my script, so energy prices have broadly stabilized. So we see kind of -- we don't see a return in the short term to the spikes that we've seen over the last few years, and we've got good energy coverage looking forward. So on the electricity side, effectively, the solar farm derisks that for the next 15 years. So we've got good certainty on our electricity. And on gas, we've got the sort of the forward contract. So we've forward purchased. We're pretty much fully covered for this year. We're about 75% covered for next year and then about 60% covered for the year after. And then that takes us into 2028. And as I said, we've literally just extended our contract, and we're looking at the opportunity to buy gas for '28 and '29 now because you can buy it at pretty competitive prices, which, if you strip out the inflation element kind of take you back to kind of pre-COVID prices. So yes, where we've always benefited from kind of forward purchasing, where we've been able to forward purchase a long way in advance, we've generally done pretty well and you can eliminate a lot of risk. Where we got caught along with a lot of other people was the kind of post-COVID into Ukraine, where we didn't have the forward coverage. So yes, we kind of see energy being relatively stable as long as you manage it well and forward purchase, then we don't see a repeat of the challenges we've had over the last couple of years.

So just to comment on the last question around brick slips and how we take them to market. So our first range will be relatively narrow, 12 or 14 slips. And predominantly, we'll sell those to the EWI providers, so the external wall insulation type companies. So think of K Rend who were recently bought by Saint-Gobain Weber, which is a Saint-Gobain company, those types of businesses where they're relevant in the outside of the existing buildings to improve the thermal performance and they're stuck on. So we will sell directly to those EWI providers. But we will also specify and try and get slips into probably new build rather than renovation, multi-residential high-rise buildings. And you're absolutely right, we will need to develop and build a specification muscle because today, we push bricks to a customer base who are very, very used to buying bricks and know and understand how to install them and how to specify them. So we've already recruited a team of specification people. They've been in the business for the last 6 months building the pipeline, and starting to generate sales from a specification point of view. But that's where we'll need Omnia, which is the rail system. So the high-rise buildings because of certain fire requirements, you can't use stuck on bricks generally. So you have to use a rail system. And that's where that system performance and testing is very, very important. So we'll have accreditation for that in the next couple of weeks, and then we can really push forward with driving the specification side. And specification slips will be extruded from Accrington or there may also be in some occasions, cut slips, which we will also have the ability to supply from our range.

Alastair Stewart from Progressive. Only 1 question. What was the drag on RM&I during the period? Was it mainly interest rates or wider economic uncertainty? And what do you think could be the -- what could kickstart a revived demand there, particularly for your higher-margin London Brick products?

Yes. Maybe I'll take that 1 together, Ben and you can contribute to anything you feel I miss. I think the thing which is holding back the RM&I side of things for us is we're mainly in the extension market, which is quite an expensive investment for homeowners. And I think consumer confidence has been a challenge around there, all the uncertainty we hear when we turn on the news and also very often those extensions are funded by maybe taking a little bit of equity out of your home to increase your mortgage and interest rates have been a little bit higher of late. So people are probably watching and stepping back and saying, do I want to invest in that right now? And I think those are the things which somehow will have to start to change for us to see a pickup in our side of RM&I. Ben, I don't know if you want to add anything to that or...

No.

Okay. Good stuff. Christen at the front.

Christen Hjorth from Deutsche Bank. 3 questions for me. First of all, just on sort of housebuilding, getting mixed messages, new outlets seem to be a bit of a challenge, but brick sales are up significantly. What are your housebuilder customers saying to you in terms of volumes as you look forward? And are you slightly worried about an air pocket at some stage with lack of new outlets opening? The second one, just quickly just touch on current trading, which would be quite helpful given the guidance. And then finally, just on the aircrete markets, just a bit more detail in terms of what's going on there and perhaps moving into -- you touched on a bit of a negative for aircrete from timber frame, but you also touched on new capacity. So just squaring that circle as well would be super helpful.