Galliford Try Holdings plc (GFRD) Earnings Call Transcript & Summary

Good morning all, and welcome to Galliford Try Holdings Half Year Results Presentation. I'm Bill Hocking, Chief Exec, and I'm here with Andrew Duxbury, Finance Director. We get to build some fantastic facilities for our clients, and this is one of my favorites. The photograph here is a sports science facility for Leeds Beckett University. The red cube on the top there is a 100-meter long running track, which runs the length of the building, and it's filled with all sorts of scientific instrumentation to monitor the performance of athletes. Here's the agenda. We'll speak for about 20 minutes and then take questions. So on to the highlights. We have made really good progress in the half year. We were fully operational across all of our sites for the period with productivity close to normal. My thanks and appreciation to all of our staff, supply chain and clients who have worked together very well to keep our projects on track through difficult circumstances. I'm very pleased to report a return to profitability with an operating margin of 1.6% and an interim dividend of 1.2p. The order book has increased to GBP 3.3 billion in the period, with high-quality risk-managed work in line with our strategy. Our balance sheet is strong, and coupled with our high-quality order book, gives confidence for the future. Over to Andrew.

Thanks, Bill. Good morning, everybody. So it's very pleasing to report our return to profitability. We said that 2020 was a transition year, and you can now see this coming through. So I'll go through the details in a moment. But importantly, the result has got no exceptional items. It's in line with expectations, and we're on track for our full year targets, which we set out in September and which are included later on in the presentation. Our operating profit before amortization was GBP 3.9 million and profit before tax, GBP 4.1 million, and the improvement in our result demonstrates the performance of our newer contract portfolio. We've been trading at near-normal levels since July, and the current lockdown didn't change that. Now as you know, we took some furlough payments in July and August as we came out of the furlough scheme, and we're now in the process of repaying these amounts. So that we won't have taken advantage of any government COVID support, whether furlough or tax deferrals during this financial year. Just coming back to the results for the period. The tax rate is low because of the losses that we recorded in the last couple of years. And that resulted in an earnings per share of 3.4p. And I'll come on to it later, but given the results and the strong cash performance, we have reinstated our dividend with a 1.2p interim dividend declared. So revenue was lower in both Building and Infrastructure, but it's bang in line with our expectations and our target for the year. The reduction reflects our business' focus on our core sectors and our selective bidding. And additionally, in Infrastructure, the environment business is at the point of transition into the new AMP7 programs, and that's slightly holding back our turnover this year, as we expected. We also expect revenue to begin to grow again next year in line with our medium-term targets. Both Building and Infrastructure have shown good progress in margin improvement, 100 basis points improvement in Building and 220 basis points in Infrastructure. And the combined divisional margin, 1.6% is in line with our target for this year and shows encouraging progress for our medium-term goals. And finally, on this slide, our central costs are nearly halved on the equivalent period last year and on track for this year's target. We remain very well capitalized with a strong balance sheet, and this continues to be a differentiator for us in the market. Our average month end cash increased from GBP 141 million to GBP 158 million in the period. And we continue to have no debt, no pension liabilities and no supply financing arrangements. The value of our PPP portfolio has increased slightly to GBP 44 million using an 8% discount rate, which is still towards the conservative end of the range of fair values. This slide shows the normal cash bridge, but I've added the line for month end average into the movements. I focus on month end average cash rather than year-end because it's far more illustrative of the real position. And underpinning that, our daily cash position remains very strong, with the low point in the period at GBP 92 million. I will just highlight a couple of details. Firstly, the operating cash inflow in the period was GBP 28 million, driven by trading and an improvement in our collections performance. And secondly, the discontinued payment to the right-hand side that largely relates to the agreed working capital adjustment paid to Wilshere in the autumn. So engagement with our supply chain is really important. And working with our teams, they responded excellently through the disruption of COVID. We run a program called Advantage Through Alignment, and that's designed to bring our supply chain closer to the business. And this really helps us with cultural alignment between the supply chain and Galliford Try, it provides access to our pipeline for our supply chain, it provides access to our trading programs and so on. And of course, our supply chain wants to work with companies with strong balance sheets. And equally important to them is our payment practices. And we've already published the data on this slide, and this shows good improvement in our payment performance against all 3 metrics shown, and I expect this to improve further during 2021. So pulling all these trends together, we are well placed with a strong balance sheet, good financial performance and a quality order book and outlook, which Bill will come on to. And this means, as I said at the start, that we're well placed and on track for our full year targets. And all of this provides the Board the confidence to reinstate dividends with an enhanced policy. Under our new policy, we have reduced the cover to a range of 2 to 2.5x with a view to reducing that further when appropriate to do so. And as a result, we've declared today an interim dividend of 1.2p. Bill?

Great. Thanks, Andrew. Okay. So here's a reminder of what we're about. Our purpose is to improve people's lives by safely and sustainably, constructing the social and economic infrastructure that communities and indeed the country need. We aspire to be a people-orientated, progressive, values-driven business that predictably delivers for our clients and our stakeholders. This is our business model. We have our purpose on the left and we approach the market with the philosophy of safety in construction and safety in use, delivering quality products to repeat clients with a strong focus on risk management, commercial management and modern methods of construction. We focused on building and infrastructure with 90% of our revenue through public and regulated sector frameworks and the remainder with blue-chip private clients. We generate cash and margin to fund growth, return value to shareholders and contribute to society through the social value that we generate. We have a very straightforward strategy. We look to attract, develop and retain the best people. Our regional structure plays to this as people like to work within the striking distance of home and so it aids employee retention. It also provides national coverage with the advantages of local relationships with clients, subcontractors and suppliers and long-term continuity through our excellent position on the frameworks. In the middle column there, we always look to improve our operations and drive efficiency. We continue to focus on our diversity and believe we help to achieve this by being truly inclusive where everyone feels comfortable in our offices and on our sites. We look to reduce our own scope 1 and 2 carbon emissions and accelerate our scope free capabilities, and I'll come back to that a bit later. And all of this helps to drive strong, predictable performance. Sustainability runs through all we do. Our code of conduct simply called doing the right thing, provides guidance and [ devise ] to all staff. The safety of everyone on our sites is paramount, and we're pleased to see our AFR, accident frequency rate, improve again to 0.06, which is a very good performance in the industry. We, of course, aspire to have an AFR 0 and work very hard in pursuit of that goal. We measure our scope 1 and 2 carbon emissions, which are those emissions, which we can directly control. Scope 3 emissions, which are embedded in whole life carbon are more complex, and we're working on a comprehensive strategy on sustainability, which we'll publish later this year. So here are 2 case studies and what we're doing on reducing carbon. Our company fleet is a large source of scope 1 and 2 emissions. We've been proactively reducing those emissions and more than 1/3 of our fleet is our pure electric or hybrid with pure electric vehicles fast becoming the norm. The feed efficiency is now an average of 86 grams of carbon per kilometer driven, down from 133 grams a few years ago. And we are on track to achieve our target of 35 grams per kilometer in 2025, as well as saving a great many tonnes of carbon per annum, we're also saving hundreds of thousands of pounds of fuel costs per annum. On the right-hand side, that covers scope 3 emissions, which is embedded in whole life carbon. So we regularly build low carbon and 0 net carbon projects for our clients. In Scotland, we have recently built 2 identical nursery schools. 1 was built to Passive House standards and other was built conventionally with a view towards measuring the real-life performance of those buildings to identify actual whole life carbon savings that are achievable and to identify areas to improve, obviously. And in England, we are also measuring the in-use energy performance of the school we completed recently using our optimum schools model to corroborate the design and again, identify areas for further improvement. Moving on to our market. Our markets remain resilient. And as I said earlier, have held up well through the pandemic. We expect the governments leveling up and 0 net carbon objectives to underpin growth in the construction sector over the medium term. The recently published construction playbook is, in essence, a far more mature, sustainable approach to public sector procurement, which we welcome and, again, plays well to our strengths. Our building order book, as you can see here, is GBP 2 billion and the constituent parts of it are there on the list. All of these sectors continue to provide a robust pipeline of work with ESFA, education, DIO, defense and obviously, NHS, our biggest clients. And our order book has also grown organically in the period. The infrastructure sector is also very resilient. The order book, as you can see here, stands at GBP 1.3 billion, and we have excellent framework positions with Highways England and various local authorities. We're very pleased to have just been awarded a GBP 48 million contract for road improvements in Grantham by Lincolnshire County Council, following the successful opening of the Lincoln Eastern Bypass for the same client before Christmas. In environment, we won 2 further frameworks of Thames Water in the period and anticipate further awards in the sector by the full year. Moving on to the order book. These markets provide an order book, which stands at GBP 3.3 billion, up GBP 100 million on the previous period. 87% is in frameworks in the public and regulated sectors, broadly similar to the previous period. The private sector is predominantly PRS, student residents, and some commercial offices. Our disciplined approach to project selection and risk management is reflected through the order book in terms of its blue-chip client base, sensible terms and conditions, embedded margins, risk profile and cash profile. And the order book quantum and the duration of that order book underpins our strategy and highlights the importance of our framework positions. Most of this is revenue secured, and we have about 76% of next year already in hand, which is a really good position. Here's more details in the risk management process, which underlies our excellent book. Our business unit MDs review potential tenders using a defined process to identify any onerous contract conditions or risks. If any conditions arise and if the BUs still wants to proceed, the project will be brought to the Exec Board at a monthly approvals meeting to decide whether or not the bid can proceed. They Exec will either stop the bid or allow it to proceed based on strict risk mitigating parameters. I'm really pleased that the culture of the business has evolved to the point where actually very few projects are brought to Exec as they are rejected early in the period if they are not suitable for our risk profile. On the second row there, once we're in contract, we have robust project controls to manage an overview project forecasts. In addition to that, we have, what we call, commercial health checks where operational, commercial directors from other parts of the business will come and spend a couple of days on another region's project to review the forecast and risk register and give their view on the likely outcome. Again, I'm pleased that the culture of the business means that these health checks are welcomed by the receiving site and the recommendations or observations are taken seriously and acted upon. So on to our medium-term targets, which are unchanged, apart from the increase to our divisional operating margin target to more than 2.5% based on our current performance. Our medium-term revenue range remains GBP 1.2 billion to GBP 1.5 billion as we continue to focus on bottom line quality of earnings over top line revenue growth. And as Andrew said a minute ago, we're on track to reduce our central costs as planned. In summary, then, we've made really good progress in the half year, which gives us confidence in the longer-term performance of the business. We have a very strong balance sheet, no debt, no pension fund liability and an excellent order book with all the attributes for success across the portfolio in terms of risk profile and quantum. We're very pleased to return to profitability and return to the dividend list with a new more generous dividend policy. Market conditions are supportive, and we're on track to meet our full year targets and confident for the future. So that concludes the presentation for today. Thank you for listening, and I'll hand back to the operator now to take any questions. Thank you.

[Operator Instructions] We'll now take our first question from Andrew Nussey of Peel Hunt.

A couple of questions for me, if I may. First of all, Bill, I wonder if you could just give us a little bit of insight in terms of what you're experiencing in the commercial sector and whether opportunities which are coming your way can still meet your strict bidding criteria. And sort of slightly allied to that, but in the public sector, can you give any insight to -- is there any change of pace in terms of the drawdown on work on some of your existing frameworks? And probably thirdly for Andrew. In terms of public sector customers paying, has there been any change from the more favorable aspects which were seen during the sort of the peak of COVID?

Andy, thank you. In the private sector, I feel personally surprised that how resilient it's remained. We picked up a number of commercial projects in the period. And then I think in a nutshell, a number of developers are sort of looking to the current circumstances into what life may be like in a couple of years and continuing. So we still have a number of PRS schemes and quite a few commercial office opportunities actually that were kicking around. And we see it as reasonably constant, I suppose, in a nutshell. In the public sector, there's not been a change in pace that is notable. Our order looks held up well, the pipeline looks robust. There's been a little bit of slippage, I suppose, to the writing just in terms of awarding final award of contracts. But apart from that, it's been pretty consistent actually. Andrew?

Yes, Andrew, so in terms of payments, I mean, you're right, back in the spring last year, in COVID -- COVID factor actually did a really good job of encouraging payments, and that came through really well. And actually, we've seen payment performance continue to be very good for our clients and across the piece, and actually our collections, of course, feel very good. So no concerns there.

[Operator Instructions] We will now take our next question from Kevin Cammack of Cenkos.

I think I've got 3. Firstly, just picking up the point on the dividend, is it possible just to sort of comment as to why you're adopting what appears to be somewhat more generous attitude towards dividend paying, certainly on a cover ratio? And I think when you were presenting, I think I heard you say that there will be circumstances in which you may actually lower the cover below the sort of bottom end of the 2% to 2.5% range that was in print. I just wondered if you could perhaps highlight what might those circumstances be in which you would go below that cover ratio? Secondly, just -- I guess it's slightly aligned to a previous -- one of the previous points. Just on the new work environment. I mean one is rate quite a bit recently about Tier 2 contractors, be somewhat more aggressive in their bidding to the time sort of, I guess, to the gap in the near-term order book as a direct result of the sort of first lockdown. So I suppose my question is, has it become harder or easier or nothing to no different to secure the sort of win rate that you want on the margins that you desire in the shorter term? And the last question I had is on risk management. And I noted it on the presentation piece. There was a line that said, whether any bid for work of the value of over GBP 25 million went to Board for approval. I just wonder if you can expand slightly on that in the sense that you obviously run quite a small Executive Board. I just wondered, in effect, is it sort of just 1 or 2 people that sign it off or are you referring when it says moves forward approval -- are you talking more about the Divisional Board level?

Do you want to take the question, Andy?

Yes. So in terms of dividend. So what we've done, Kevin, we've looked the trading over the last 12 months, we've got to the outlook. We've looked at the balance sheet and the strength of the balance sheet. And in particular, how resilient that's been. So -- and we feel that putting all that together actually gives us the ability and it's right to bring the dividend cover down. So when we said the -- when we did the demerger, and we set a 3x cover, I think it was right to be relatively cautious at that point. And I think it's right now to reflect the position that we're in and the resilience of the business. And you're right, and we say in the statement, by the way, that the -- we'll continue to review opportunities to further reduce that cover in the future, and that will be based again on trading, on outlook, on the resilience of the balance sheet and the resilience of our trading performance, Kevin. So we keep that under review.

I'll take the second, Kevin. We've not really seen any difference in the attitude of the Tier 1 contracting fraternity, I don't think. We operate this initiative we call Advantage Through Alignment where we remain very close to our key subcontractors, Tier 2 suppliers and so on. And often, most of our work in building actually is well in a 2-stage scenario, whereby we actually negotiate the price along with the clients and the key supply chain. So it doesn't affect our win rate to our margins at all. So I don't recognize that. We're not seeing any particular difference in the Tier 2 starts, I suppose. On the risk management, yes, so any job lower than GBP 25 million and that has any risk conditions comes up to the Exec Board, if it's lower than GBP 25 million, and it's -- [indiscernible] then obviously the local divisional managing directors can know that too. The full exec team meet once a month. And I'd say, generally, we have 3 or 4 projects that we'll review that are over GBP 25 million. And that's just a risk management tool around size more than risk profile. So again, in terms of culture, what you find is all of the jobs coming through above that size, I can't think of the last one that we pushed back on because by the time they get to us, this process has really worked. So I guess, the whole Exec Board, we look at it from a size perspective and a resource perspective, more than risk perspective [indiscernible].

We'll take our next question from Alex O'Hanlon of Liberum.

Just 1 question for me. With the budget yesterday announcing the new super deduction for investments over the next 2 years, do you expect to buy more PPE to take advantage of the new release, tax release?

Yes. So Alex, honestly, we don't own a huge amount of plant or machinery directly ourselves. So -- but that will be encouraging for our supply chain in order for them replenishing and upgrading their own fleets. I also think it's encouraging actually across the piece in terms of just the signal that sends to the wider community in terms of investment. And again, that will be helpful for us in the broader sense. But we don't have a huge amount of our own plants and machinery, which we'll be looking to purchase through the scheme.

We'll take our next question from Alastair Stewart of Shore Capital.

Couple of questions. First of all, follow-on the budget commentary. I presume a lot of the stuff is positive for the sector, if not directly, indirectly such as industrial investment. But drilling down more to one particular factor in the budget yesterday, modern methods of construction. You mentioned it in the presentation earlier on. How do you -- do you think the measure, I can't remember how much they were investing, but will that boost your MNC activities even more? That's the first question. And the second question was in terms of payment times, you now go up to 92% within 60 days. Where do you see that going forward? And are you seeing any tangible benefit from subcontractors and supply chain, either in sharpening their pencils on the bid costs or for instance, putting the best people on the job, just a 1 or 2 tangible benefits, if you could?

Maybe I'll take the first one, Alastair, and Andy will pick up the second one. Modern methods construction, we do a lot of that already. And what we do is we incorporate basically the products of suppliers to the industry. We don't have our own factories per se. But we've done a number of module schemes where we incorporate these products. I think from my perspective, it's an industry issue. So we don't intend to go and will own factory to become a manufacturer, but we will certainly encourage the supply chain in terms of developing new products because more and more construction will move over the years to site assembly or the site construction with more and more products being constructed in the factory and just a sample on the site. So that's definitely a direction of travel, and we'll fully support it. We lead the industry or certainly one of the leaders in the industry in terms of proven digital approach to construction. And that's also a key attribute, of course, to modern methods and talk about things like digital twins and long-term maintenance and energy monitoring of buildings in use. So we're certainly up to speed on that side of it. But we will be encouraging the supply chain who need to develop further products for modules.

And Alastair, just on payment practices, I mean, really good improvement over the last 12 months, in fact, over the last 24 months, but there is more improvement to come, and we will improve further across all of those 3 measures through 2021. We've got a whole series of actions that we're working through in order to drive that improved performance because we do recognize the importance of payment practices for our supply chain. And in terms of pricing and supply chain, we do look to procure earliest. So we've got -- we make sure that we've got the pricing aligned in our bids to our clients. And I would say the other thing I just mentioned for both our supply chain and our clients, is our strong balance sheet is really important. It shows the resilience of the company, and I think that is a real differentiator for us.

Sure. And I mean, is there a sort of natural ceiling in terms of where you just -- I presume you'll never get to 100%, but is sort of 95% a reasonable ceiling, given that there's always differences in opinion on final invoices?

Yes. So I think 95% is entirely achievable. I wouldn't like to say that's the ceiling. I mean, there's all sorts of technology that that's helping us, Alastair, so things like electronic invoicing where we've now got 90% of our invoices get delivered to us electronically so they get straight through the system. If there's issues on those invoices, maybe the wrong company name, the wrong address and things like that, they get blocked at the gateway, you immediately return and they get reissued as opposed to that taking time in the process. So things like using that technology is that automation really helps us to actually take out some of the inefficiency of the processing in the invoicing. So -- and that's the kind of thing that we're looking at. And so I wouldn't say 95% is the ceiling. I mean I appreciate 100%. There'll always be some invoices with some issues or some challenges, but we're absolutely working through the process to improve that performance.

We'll take our next question from Stephen Rawlinson of Applied Value.

Can I ask just in 2 areas, a few questions. Firstly, on the margin expectations. I mean, some of the peer group are pointing to higher margins than you're indicating, particularly in infrastructure. Could you just talk us through your thinking in and around your thought process of 2.5%, whereas other say a little bit higher? And secondly, a number of questions on the order book, just quite clearly at 2x -- more than 2x revenue, it's higher than the normal and in a good position. But just set me right, firstly, was the increase in part due to delays in work processes due to COVID on existing orders? That's just 1 element of it. And secondly, with regard to the sort of future order book, where do you believe you're up to in the regulatory cycles with some of your main customers such that it might be that the order book would decline, but actually doesn't really actually mean very much in terms of day-to-day workload? And secondly, in the awarding of contracts, was there any hiatus in that, which delayed orders due possibly to the pandemic? So a number of unrelated questions there around the order book, but it's in and around the issue of order books don't grow to the sky. So at some point, I'm just trying to understand whether a fall in the order book might be a meaningful indication to us or just something that actually has happened because of regulatory cycles, delays in awards and delays in contract workload.

Okay. Thanks, Stephen. On the margin expectations, my view is that you said a sense of an achievable target and once you approach it to go further. So we've said more than 2%, if you look on that presentation, and that's what we mean. Let's get there. Now the current trading absolutely supports that goal, and that's where we aim to be. So don't -- we certainly aspire to more. And as time goes by, I expect we'll be able to be more bullish on that one.

And Stephen, one just on the order book, I mean, sorry, we said in September, actually, the order book is likely to increase in the regulated sector, the water sector because of the appointments onto the new separate frameworks, and that has come through. So there is some of that increase is because of that increase in the regulated sector. And all over the 5 years, some of that will get whittled away. And so we're very relaxed about an order book will ebb and flow a little bit. It doesn't absolutely have to increase period on period on period. It's about the quality in the order book. And there will also be -- always be something around the timing. So we're happy about that. But -- and in terms of delay, we've seen actually, good -- I'm thinking about the private sector, you have good contracts awards coming through throughout calendar 2020 and into this year in the private sector. A lot of our clients are sort of looking through the COVID disruption and looking to when those buildings will be available operational. And again, in the public sector, we've seen good awards coming through across all our sectors, on the public sector side. So I think we're happy that the pipeline is still very strong and it's coming into the order book and starting on site.

We'll take our next question from Adrian Kearsey of Panmure Gordon.

Two sort of questions slightly related to Stephen's. One, on the margin target. You talked about sort of putting out an achievable target and then taking it from there. In order to achieve that margin, that 2.5%, do you think you're going to need to change the shape and the proportions of the end markets in terms of revenues in order to deliver that? And then a second question, looking at AMP7, I was talking to a developer last night who thinks that the order companies themselves are still slightly scratching their heads in terms of how to deliver the kind of promises and investments that they've committed to under AMP7, and feels that the workloads are probably going to be really quite back-end loaded within AMP7. Just like your thoughts on that, please.

Yes, sure. I suppose, firstly, the margin targets, as I said, we set more than 2.5%, and our current trading lets us achieve that. And going forward, no, we don't need to change our shape to achieve that. I think that as we go forward, some of the older frameworks that we just in the last knockings on, which have slightly lower and better margins or fall off development replaced by better ones. And I think that overall, the sort of government's approach, bearing in mind that 90-odd percent of our revenues in government regulated. The government's overall approach to construction has matured quite dramatically, I think, in terms of the construction -- the publication of the construction playbook, which overall aims for a far more sustainable construction industry. And the government we're looking at not just our track record and our people and reputation on the balance sheet and things like that. And the play book is really about a far more mature attitude to procuring construction. And I think that will reflect too to better margins in the fullness of time. On AMP7, I agree, we have seen some slippage in terms of workload going backwards in AMP7, we sort of, what, a year or so in now to the first one, I suppose. But I'd say so far, so good. And the workloads coming through are starting to pick up. So I do agree it's going to be a bit back-end loaded, but it's starting to pick up now.

We'll take our next question from John Fraser-Andrews of HSBC.

A couple for me around the margin. You got sort of close to your initial target of 2% in the half year. So just looking to see really sort of what prevented it from getting to 2%? Is -- was there any COVID costs that you're still carrying that might fall away? So yes, that's what I was just wondering. The other one, Andrew, was whether there's any legacy issues that are still dragging on it slightly?

Yes, fine. So thanks, John. So 1.6% operating margin, I mean, that is by in line with where we said we'd be this year, we said it would be at 1.4% to 1.6%. So that's good progress, and progress towards the 2%. Of course, when we set that target for the current year in September, we set that in full knowledge of the cost of COVID on our sites. So would that be increased current facilities and so on and so forth. So there's a little bit of that in there. There's also -- as the order book, there's no real legacy contracts left in there, John, but there are a few jobs which were signed probably on -- with margin profiles, a little bit lower than we would be signing contracts on today, so still turning a margin, but perhaps not with quite a level of margin that we would expect in kind of 12, 18 months' time. So those 2 factors will help us drive that margin above that 2% and up of our greater than 2%, 2.5% target that we've talked about.

And then below that, so on central costs, the GBP 10 million that you're flagging, do you see potential for that to reduce? And is COVID pushing that number up or down in any way?

That's not particularly driven by COVID. John. What we've said is that this year, we'll bring that number down to around GBP 10 million, and then we look to have that number below GBP 10 million going forward. So -- and we're on track to do that.

We'll take a follow-up question from Kevin Cammack of Cenkos.

Yes, sorry, there's another 1 I had and I forgot to ask it, but it's very much for Andrew. Just looking at that, the tax rate that you provided and the discontinued payments that went out, I assume that that's all done and dusted now. There's no further adjustment to be made in that respect. And consequently, would it be reasonable to assume, therefore, that the cash position going forward through the second half on balance is more likely to improve than deteriorate?

So yes. So in terms of the discontinued costs, P&L costs, Kevin, then that should be that -- we're not expecting anything else. In terms of cash, there is -- there was an agreed formula effort for working capital adjustment with Wilshere, there is, as of now, this 14 -- just under GBP 14 million of further adjustment, which will flow out, but that's all factored into our cash forecasts and cash expectations, Kevin.

Okay. And that finishes after that GBP 14 million.

Yes. That's correct.

And there are no further questions at this time. I would like to hand the conference back to our hosts.

Okay. Well, thanks, everybody, for joining. Some good questions there. And just to reiterate, overall, we're pleased with our progress. We're in good shape, and we look forward to the future with confidence. Thanks for joining, and take care. Bye-bye.

Thank you.

Thank you. That concludes the call. Thank you for your participation. You may now disconnect.