Glenveagh Properties PLC (GVR) Earnings Call Transcript & Summary

Well, welcome, everyone, and thank you for joining us for this fireside chat with Glenveagh Properties. I'm Colin Sheridan, host and the analyst at Davy Research. I've been delighted to be joined today by Steve Garvey, CEO of Glenveagh and Michael Rice, the CFO. The session today, we're hoping we'll take no more than about 45 minutes just discussing the main themes on the stock. [ Just ] many of you submitted questions in advance and we'll address those as we go through the session. But if you feel any further for any questions that you'd like to ask towards the end there is the option as you can see in the top row of the screen to mail me. And I'll try to get to those towards the end. So if any of you see me checking the phone towards the end, it's so I can show you something [close forward].

Just maybe getting into it boys. Stephen, maybe a few reflections on 2023 off the back of your trading [day this morning].

[indiscernible]. I suppose we were here this time last year, it was a bit of a difficult -- that 12 months ago was a difficult day in the sense that we just come out with results at that point in time. We had to move down numbers due to any delays in the system. And I suppose to get where we [thought] the year would be, I suppose [to treat] big priorities for us as we turned into the year, was time permissions and getting through the system. That was the number one priority for us. I think we've had a huge success in that with 4,600 units, and we have a number of other applications that are coming through the system as we speak. So we're probably touching 5,000 units turn into the year. So that's a real positive. We've seen a big momentum in the new LRD system. So we transferred from [SHD] to LRD. We're seeing our schemes come through the system in about 16 weeks, which is really positive. We've seen some schemes come true quicker. So large-scale residential development in the new system is working really well. And the other things we're seeing on the planning side is planning policy. So the big change that we're seeing coming is the compact growth, urban design. Guidelines are coming out. They are expected to be -- they've already been in draft. They're been approved by cabinet. So we expect them to be published over the next 2 to 3 weeks. And pretty much what we have post-recovery. We believe they've come at about 90% of that, which is a positive. And what that will do is that will apply the same densities that we've been required, but will allow us to achieve more old [manor] housing, which is a big positive. So this really being positive towards that, particularly our suburban side and where we have developments that would trends from urban to suburban, so the likes of [indiscernible] and sites like that, that will be a real benefit. And other things that we're seeing in the planning system, so there's obviously a planning bill that's working its way through. And that's a 2024, that's going to come true. It's a massive document over 700 pages. And I suppose the key themes for us is planning is complicated, don't complicate it much more. And the key themes for us is just keep -- what we're seeing working at the moment is time is critical. So the big difference in 2023 is decisions were being made, whereas in 2022, they were just in [ enigma ] for too long. Time is critical. If we can keep that where we lodge an application to come out to the site, we know exactly our date then we know what we can do. And I think that's the most positive thing we've seen in 2023. What we hope planning will do is reinforce the statements in the sense of what Section 28 and things like that to make sure that just clear guidelines there between what you can and can't do. So we're watching that closely. Then the other big thing that's going to happen that's coming down the track is the government are reviewing the national planning framework. And this will probably set up somewhere between 40,000 and 50,000 units as being the minimum amount of units to be delivered a year that will align it to where the land should be available. So in [ EMRA ], which is the Eastern Seaboard and then the 4 other cities across the country. There's a lot of debate at the moment. I know there's numbers out there from 40,000 to 60,000 that have been rumored by the House of Commission but it set us somewhere between -- it's going to be a minimum of 40,000, we believe now, which will be a positive. The big thing we're looking for in that is that the headroom rate is much higher. So the amount of land that can -- you can apply for permission versus the amount of units commenced that's a broader scheme because some of the developments have become so big where you have 1,000 units in development, you're not going to commence out of them in a 12 rating a 24-month period. It just gives us a much bigger headroom because that's what's happening in some locations where you coming up against the caps, and that's an issue. So that's another positive coming out. I would definitely say we've seen a sea change in planning in the last 12 months. Certainly, I think policy is going in the right direction. So that's another positive. The other big factor first was our manufacturing. So we had our operation in [ Arco ]. We also bought the Arco facility and then [Parallel] was another acquisition. [Parallel] was no operational [ tiles ] get the operational run there. We're in place to be now turning into January that we have the capacity to do 2,000 timber frames on our own makes us the biggest flow in the country that this one time. All stock is for ourselves this one in time. As well as that we've got our light gauge steel operation that we're using for [ large ] apartments or [ taxes ]. So we've got a [ month ] traction where we want. We've invested well in that. We have it now in a position that can give ourself for the medium term. So we're very happy with that. And we're already starting to see the benefits across the business there. And the final thing and it was -- the other priority was partnerships. And this time last year, we didn't have planning on the partnership sites. We'd actually only signed one of the partnership sites turning into the year, both sites are now working. So we have about 1,300 units across the 2 partnership sites, just started. So that's another big positive, I suppose, they were the true milestones. And really, where we want to position ourselves was -- we knew 2023 was a difficult year because of the issues we had in planning. We really set the business up for 2024 until we really have -- we already got past that this point in time.

Great. And in terms of going back to the update then this morning, I mean, in terms of [power] numbers, Michael, it will be their [indiscernible] maybe what was the most pleasing aspects of those numbers.

Yes. I think as Stephen kind of said, coming off where we were early in the year to really go outcome for the overall year. I think when you look at the suburban business and it's always kind of been the solid bread and butter of Glenveagh, having increased suburban revenue having increased suburban margin. There's always a lot of focus on a that suburban margin. So coming out with a 20% overall number but even a 19.3% underlying housing and housing margin [restrict] the land component is really strong. We dialed approximately 19% and to be able to kind of push the far side of 19% as it's really, really positive. Such one of Stephen's point around manufacturing, it kind of goes to show that when we're starting to get our standardized house type into the suburban business where we're starting to get the factories operation correctly, there is margin progression. And I think go back 12 months again. There was probably some question marks as to how do we don't see that suburban margin progress. And it's great to see that coming through already in '23. And because we probably said 2024 was going to be the first year you saw immediately come through. So it's probably progressive a little bit there than we thought it would.

Maybe if we move on then a little bit to the broader housing picture in 2024 and what kind of trends you're seeing at the moment. You're calling out inflation, both in house prices and build costs that look like they're coming in roughly mid-single-digit client territory. What kind of pressures are going on within [indiscernible] build cost inflation as you think will be certain [ out first ] in the next few month?

I think if I recall this time last year that we expected new home market probably to move up and that because of [indiscernible] government issues that have been rolled out. So we obviously have the extension [indiscernible] the first ones being really gone into operation in 2023. And we've seen those outcomes, I suppose, for us, what's the real positive is a number of our locations where we're operating, particularly to the product that we're now supplying and its purpose is designed to work well under the caps. So we see that as a positive. I think the main line factor when you look into the commencement as commencement is moving up. [Rushing] homes or housing, which is a predominant product purchaser or first line buyer ones, is still at the same level, it's not actually increasing. And I think that's -- the supply side is going to be limited there going forward. So I think that's a positive for house price is. I think the other factor we're probably seeing is, as you move back into the back end of 2023, we start to notice a [indiscernible] to us. There was definitely where on the start to 2023, you might have only 1 or 2 parties tendering. That has moved up to 5 or 6 as we got to the back end of the year. So that's a positive. We're in a pretty good place now where we're locked in for 2024, what's becoming to the big benefit of the business is the manufacturing element. And we've actually seen a shift there as well in the sense of we would plan to have the role from that material was 40% annual to 60%. As we've evolved and as we've standardize the product and as we've moved to more manufacturing [indiscernible]. We are actually now close to maybe to the 50-50 mark, which has different dynamics as we move forward because you can hedge materials better. Your exposure to the live market is kind of more subdued. So yes, I think that's a positive. I don't think -- I don't think we want to look 12 months out, et cetera, stuff. I want to see surprises now and I don't see that out there at this point in time. Particularly for the volumes that we're rounding up. So I am in good place, I think.

The first to start there has been a noticeable uplift in the aggregate figure as we get closer to the end of the levy exemption period for starts, which is in April of this year. And it is realistic there could be a [indiscernible] Even if there is, is that likely to lead to a really material increase in supply that could track that built cost inflation picture?

No, we don't like -- yes, absolutely, has it moved up. It has probably upto 20-and-odd percent. But when you get into the higher delta of looking what is starting, there's an element of -- there's a lot of data partner schemes that are starting to receive the LDAs start a number of schemes. You've seen us working on number of schemes into the system as well. So I don't think, there's going to be a gross product that's obvious going to pull on the lever. The other thing you're obviously seeing is you're seeing other markets be it commercial market that's coming off. So that spring up [indiscernible] source as well. So I don't think that's going to be an issue. The trend is to be interesting where it is a goal because you're really looking at the planning data what's coming out. Now we've been very successful this year in the sense of for the last 12 months what we've got through with a good line of sight to where we want to be for the next 12 months. But we're not seeing the flow of other applications from [which is] a system. And that's really telling what we're starting to see is the smaller operator. They're more looking for a 50, 60 unit sites they're not for partnership. They can't find them at the -- that's not our market, but they're looking for them, and they're not finding them. That tells us they're not available there. So it's interesting they probably call us small operator. He had a site to tell you the system. He's just not and [indiscernible] side, he just has no more for his operations to go. So that's kind of a sign of what's happened there. I think you're seeing more big schemes are probably moving down at this moment in time.

You spoke that Page 24 guidance and your converge with that or certainly the current consensus number that's in the market at this point in time. It's always been the case that, that from last year was going to be a significant step up of inflation to the outs of [indiscernible] . Relative to the last time you had spoken to the market, what are you seeing in relation to the operation of the business that maybe given you or want to give investors more [ comfort ] around that stuff.

I think because we had -- if you go back to last year, people kind of raise [indiscernible] business. We warned [ 1,300 ] with an element of large partner schemes and that we are far from it. So we had a big operation at that point in time. I think the sea change, I'm starting to see Mike to mention the point, the standardization for [ engine system ]. It's not just the standardized product, it's a standardized process from start to finish from the planning system to the day we handle [ this process ], that's really coming to before. And I think that's the big difference to this here. The amount of the sites that we're starting where we have our own design product with our efficiencies found. We know how to manufacture. We know how to do it at speed. I think that's the difference. I'll just give an example of site we started in what it was April or May this year. We're already at our 200th units stand in that period of time, and that's simply down to the efficiencies of [indiscernible] . What has probably evolved more in the last number of months is how we're migrating more towards big sites. So our operations are now moving to much larger sites, as for general volume [ earn brands ] mean all these sites are moving bigger sites, we're moving much higher volumes. The underlying demand is there, which is the most positive like we're able to drive much bigger volumes out of sites, which is a benefit, and we're not affecting our underlying operation, underlying margin loss sites, which is a positive.

And with that profitability for 2024 in mind. I will -- how should we think about the cash flow cycle over the course of that year and how leverage might develop as the year goes on?

Yes, I think that was first and foremost. We're pretty happy with where we've ended the year, $51 million net debt. It's certainly below I think most people's expectations. So I think again, we've managed to manage the balance sheet pretty well at year-end. I think you'll see a very similar cycle to kind of exist or to previous years. You're going to see that significant cash spend in the first 2 quarters. You're going to see a different net debt number at half year. So obviously, what you see at year end. I think probably just as a growing business in terms of absolute numbers, you are going to see higher levels of net debt as we kind of go through the first half of the year. I think the big one that we want to get comfort on going into 2024 is around partnerships and getting our -- I suppose, the industry and the market is getting their head around what the partnership cash flows look like. We have large component that's going back to the stage. We've got a component that's going to go to approved housing bodies. We've got a private element in [indiscernible] stones. With a lot of different tenures and given that we're only starting off on these sites we're going to have to invest. In line with a large site we will have to invest at start of the site. And then we're probably going to see the actual cash flows kind of coming probably realistically towards half year then I see in the second half of the year, so more substantially. So I think, as I said, we're going to see that kind of arc throughout the year. We have finished the year, no doubt in a strong net debt position again, and you'll see a higher level of net debt half year, as I said, given we're a growing business, given we're investing in new segments, you're going to see a higher absolute number of net debt this half year.

I sense [ on our ], I suppose one of the features of the announcement today was that we haven't expected revenue to be generated from the partnerships business and so this coming year as opposed to 2023, so must be quite pleasing to see that come through or maybe you can walk us through the accounting policy that drives that revenue generation and what people should expect to see in the P&L going forward.

Yes. I suppose going back to my previous point, there's a lot of different tenures and kind of to -- it's probably not the time and place to get into too much complexity. So on a high level, because we're building on state land. We don't take title of the land. And it effectively falls into the focus of percentage of completion. So I suppose the reason we've been able to recognize in 2023 is because we've actually started construction in 2023. So we're -- round numbers were about 1% to 2% through the overall project. Therefore, we can recognize 1% to 2% of the overall revenue of the project. So as we get through the project and at the end of the year, if that moves on to 8% or 9%, again it will be 8% or 9% of the overall revenue of the project. So with the use of the partnerships and what we've always said is it will be relatively steady revenue and relatively steady margin as we kind of go through the overall life cycle of the developments. Now going back to my previous point around cash, there will I suppose, a slight disconnect between how we recognize revenue and the cash that's coming in. So again, you will see a higher trade receivable number coming on to our balance sheet than in previous years, but I suppose our task to the forward funding and through working with local authorities is to make sure that, that cash is coming on a regular basis. So it obviously benefits our cash flow, but our trade receivable balances doesn't grow in any sort of meaningful way.

Understood, understood. And maybe just getting into a little bit more of the nuance of the 2024, does likely moving parts there. A couple of questions involving margin in particular and what is going to be the bridge set in 2023 to 2024 in terms of margin business, and what might be the main points driving those? So the examples being inflation you've kind of covered post the development levies, the manufacturing that you've mentioned. And as somebody mentioned last session going forward 2025 [ and now ] 2024, how does that bridge spoke to you at this point in time?

I think on suburban, as we kind of talked on earlier, I think we start to see the first benefits of standardization in manufacturing. So I think that margin progression in kind of the underlying business continues in 2024. So we'd like to see further progression from the 19.3% that we saw last year. I think of the partnerships that was done, we're going to continually see that somewhere between 14% and 15% or even 15.5% margin on the partnership business, just depending on the different tenures that are going to go through, but it will be pretty consistent. And then the urban stuff, we've talked about that 10% to 15% range, certainly for last year, depending on new deals, et cetera. And we've obviously touched on the possibility of new deals in our statement. So I think very much any movement in the overall margin for the business is going to be driven by the mix of the 3 different segments. So as you can appreciate, partnership coming in, in a more meaningful way, approximately $100 million of revenue in '24 at 15% margin, it is going to launch a better phrase, drag the overall margin down slightly. Suburban will move on and urban will probably remain relatively flat versus 2023. So I think broadly in line with where we were this year on an overall basis, but the mix within that suburban slightly higher partnerships coming in, in a more meaningful way in urban in the middle of [ stock ].

I understand. I mean, pulling that all together then, what do you think that means for shareholder returns in 2024?

Listen, I think we've always been very -- always been very straight and say that this excess cash will returns. I think we're over the 10th, 11th of -- 10th of January. It's early in the year to kind of start talking about capital returns. But we'd like to think we've -- we've kind of built up our reputation or built up understanding that if we call out excess cash at a point in time. That's going to be it. I think going back to the cash flow point, we'd like to see a little bit more visibility on how partnership plays out. We'd like to see a little bit more visibility on the [ LGA deals ] that we're hoping to do. But as soon as we've visibility on that, as soon as we have excess cash, our policy hasn't changed, but if we don't intend to leave cash sitting on the balance sheet. If we're hitting our 3 capital allocation priorities and this cash is left over, our ambition is always to return it to shareholders. We just happy at the moment, we just need to see a little bit more clarity on a couple of elements before we take that [ decision ].

On the land market seen -- you done some deals, obviously, in 2023. How does that feel in terms of both value and liquidity at this point in time?

Happy with the value in the sense of it's hitting a few metrics between gross margin, higher return on capital employed. Obviously, some of the more structured deals as well in which 4 of them of the 6 such structured deals which also -- we're not paying for the assets so it's like a client permission. We're seeing more and more happening in the land market for ourselves. It's all owned or housing so it's really adding to the suburban side of the business. We kind of feel that the suburban owned or housing is somewhere range between 35,000 and 45,000 units for owned product and that's been in a very, every stable place for the last number of years. And the kind of overall sense that I kind of break the land market into 3 at this moment in time. And the biggest player in the landmark now is the state themselves, and we've seen them quite active. You've seen the [indiscernible] deal that the FDA did their just pre-Christmas when they bought over 2,000 assets [indiscernible] sites and these are all urban partner. So I think they're setting -- and I know John here come out and called us 20,000 sites where they took value that is going forward. So that's one element in the state I want to play their own. They're going to invest. I think the Minister has called out in a number of occasions that the state themselves will activate their own land, but also will go into the land market to buy. And I think that the number one problem is going to be running there. You have structured deals out there. I think that's something we were able to do because we've got the credibility of working with local party and get in client permission. We've got the LTR team, which is there in the background, which you know people have been -- have got that and they know it's coming. So that's making people focus their minds. And then you've got, I would say you've got the smaller rate for sites. I think they are the ones that are trading out of a good premium out there at the moment. For us, we're very happy like if we flip somewhere between 1,000, 1,500 suburban units in year, perfect. And if we could get structured deals out of that. There is opportunities out there. We're certainly seeing an element of larger sites that are probably an element with distressed in the sense that people are just getting out of it now at this stage. And the shortening slightly, if the wind down on [indiscernible] that's coming as well toward the middle of 2025. So there's different dynamics out there, our trades it's interesting. The one thing that really sticks out to also at the moment is the state now are probably the best part of 150,000 units of land, which is phenomenal. There -- it's when you lost some locations, you just see how much land they have it. And I think the real challenge what they're trying to do is how can they start to activate that land going forward. So I think for us, the big play is we've shown how we can work partnership [indiscernible] you can show, you can deliver the tenures. And it's getting into that opportunities where we are really focusing on now to expand that because I think that's just the state are there, they have the land, they have the need and they have the capital. It's just how you work with them, how you expand that going forward.

It's probably preempted my next question, solidly, but it was effectively looking at the 3 businesses land and bay and where the opportunities lie. Suburban will obviously clearly a backbone of the company that was there are elements of opportunities, certainly in partnerships, as we say, but actually, the division is now seeing a little bit of additional potential there too. So how do you see those in terms of the synergies in the next couple of years?

Yes. I certainly think as Michael claimed that the suburban side of the business is going to be bread and butter. And 2,000 units a year is painted a proof for space for us, we think that demand there. I think the partnership side, we plan, I think your urban and your partnerships are going to evolve and they're going to kind of come more closer together because I mean the buyer of urban out there at this moment in time is going to be land development agencies. It's going to be the improved side, it's going to be some of the local authorities. So there is an approved buyer at a time. And I think that the opportunity is it's going kind of come down to as the state have the land and the state don't have the skill set to get a turned into product. They don't have the planning resources in the sense of dealing with a planning application and bring it to the system. The reserves at this moment in time to [ adjudicate ] on but to actually put [indiscernible] to systems that they know they don't have the resources for that. And I think that's where they're going to turn to the likes of ourselves and of the major payers to do the entire process, take the land, master plan it, here's the mix we want, give it to us in a program and a cost. And I think that's where the big opportunity is. The stage probably will play the biggest role in urban apartments. And because that's where they see the greatest challenge and they see that's probably where we need to pick up, but there's going to be opportunities where you're going to have [ does ] where there's suburban owned or housing well because the state has land in so many locations. So ideally for us to think position us by the end of the year will be -- we have to manage our projects on the go. If we could get another or two, be at the LDA under the price [indiscernible] , what they're trying to do at the bring forward fully into the system and move on to their own sites, that would be brilliant as well as maybe looking at something which one of the agencies as well. And the [ sidelines ] the way I look forward is the opportunity is probably somewhere around 2,000 partnership units through the various 10 years ago, this is probably where the opportunity lies down the road. It's getting into the right type of sites are all of scale as well. And the average run rate, we think, on a [indiscernible] probably given 200 to 250 units a year. So if we got somewhere between -- over the long term, I'm thinking here in somewhere between 6 and 8, that will be guiding position going forward.

Thank you for that. Just coming on to the manufacturing facilities, you obviously touched on it on a couple of locations. I think some now more likely to rise from the current structure of [indiscernible] and thinking more into the medium term, what's next for [indiscernible] was that kind of a steady state that it's in the background? Or is it more that can be done on the integration process [indiscernible]?

I think, the ways we've positioned is and just to give dynamics is just 2 forms of construction going to go. We've got 2D, we can 3D. 3D is ultimately going forward by the metric where 85% of the product is complete. And we see a number of failures across the world in that, and people have invested huge [indiscernible] and money and unfortunately that failed. We've always believed internally again that the that the key is the design at the start. If you don't have the design right, you will fail because it all goes down to cross produce the product. Value metric is always more expensive than standard construction of the key was, as labor costs eventually moved up through the cycle that you could you catch off with yourself. I think where we've seen the real benefit is 2D. It's a panelized system. And I think the comp has done really well like our turn time from when we have infrastructure in the round and when the base of the house in place with the utilities, we can turn the unit in 10 to 12 weeks. We've reduced our higher lead time dramatically and that's finding efficiencies. And so we think at 2D, we're in a very happy place. We've got where cost needs to be. And to really squeeze it much more doesn't make sense to us. The real goal forward we're probably going is how we intertwine our heating systems going forward, what they look like because our house has to become more sustainable. Now we're already at [indiscernible] . So it's very little room for that. But in the sense of producing the house, that's where the efficiencies are going to be so. It's probably certain sectors of the unit as well as maybe the likes of how we lay our infrastructure and how we do our brand work, things like that. But that's probably the way we're looking at it to really because they are the high cost items. Like as I would all say it's 28 year of chase the 20% that are pulling 80% of the cost in the system. We've done a large on that. It's going after the next one, it's probably where we're looking at. The 2D system is very -- we're very happy where that is. It's now looking at the other components that we add into systems and see where we can look at them on what we can bring to the table there.

Yes. Understood. And I suppose pulling a lot of that together, I'm looking at 2024. Your estimate is to pretty much hit your return on equity targets over the course of this year. Taking some of those aspects which is starting to deliver on, whether that be manufacturing, the [ deferred ] land terms, increased amount of partnerships. Does it feel like there's more levers to be pulled to get the [indiscernible] of where are we?

Yes. I think, look, it's a big year for us in a sense of getting there. And I think that was obviously, we were a long way back now a number of years ago people never believe that we're certainly a lot closer to now, which is really positive. As I've always said, 15% is not where ceiling on the business. And of course, back to look, we need to see how more efficient we can get. And I do think there's probably another turn in our [indiscernible] in the sense of getting it into the right place. We've been bringing that from a, I think, $750 million a number of years but down to where it is. It's really going there. But there's still another element of a turn into it. We just want to get that turn right. So we see, as I've always said, it's not a saving. And I couldn't give you exactly where it is going to be, but there's certainly potential upside down the road. It's all about getting the right teams in place. Partnerships will definitely help to more of those transactions, the deferred land. I think land is kind of the way the government are positioning is they're trying to keep the landmark in a very stable low cost base because then it can be blend for warehouse price potentially going to go. I think they've set that trajectory out of out of number of years ago. I think they've put the tools in place in the sense of that they can cycle out the [ SLT ], potential for land sharing tax that's going to come in into the future. All of these elements are designed to keep land price at a circa. I think the LDA are kind of calling out where they want numbers. So and I don't think that's going to be. It's all going to come down to your pure cost of producing a construction, and that is was for us were with manufacturers. So yes, there's levers that we can pull. I think the biggest thing for this year is you're finally getting the flywheel to really spin properly. We've been trying and trying and it's been a long journey to get into the site. But you now have a size once you get the size you get [indiscernible] , of course, you squeeze now going forward.

Yes. Okay. Moving on more to audience questions now, which have been sent in from everybody listening in. So I don't take any responsibility [indiscernible]. There's a couple of obviously on political risk as potentially in general -- certainly general election on the way. We don't know where, it's going to be. And people wondering about how you perceive see the political risk of the shifting that government at this point in time?

For 15 months and at a max from [indiscernible] the from whatever we're looking to be formed. I think the one way I would look at this is, or whoever goes into power needs housing. I think every political party have now the future in house, so they need solutions. And I think this rumors that are flying around, which you can reduce the cost housing that have been led by certain people. It ain't reality and they know it. But in the end of the day, you can say anything before election to a certain degree. I think the challenge is going to be they going to need housing and they're going to need delivered. The other real benefit is the state have the capital at this point in time. So that's a positive. And I want to have -- as I have seen people talk and being engaged with them and stuff like that, I think their realization is politicians [indiscernible] in private sector. I think there's bigger components behind it there that they really see [indiscernible]. Our for example is some one is saying that house prices should be EUR 300,000, land development agency and many of [indiscernible] houses in a jurisdiction sector [indiscernible] vary [indiscernible] from 55 to 61. And they have no line cost, they have no margin fee. So that's -- you can't claim the private sector. So the reality what you are saying is the private sector probably the most efficient to deliver, it's just working with the property, put the right [indiscernible] in place, making sure the planning system today and stuff like that. Because the one thing that I don't think politicians do realize this every time you are delayed, the cost of housing has to move up. So speed is of the essence. And the quicker you can make the system from start to finish, the quickly, you can deliver more efficiency product [indiscernible].

So that covered the 300,000 questions, that was an excellent outcome. And somebody is talking about a high rate of under occupancy and hiring which I guess is true when you consider [indiscernible] things like that. It's a problem with the U.K [indiscernible] but concerned about future [indiscernible] supply, I mean is there anything there in relation to unlocking [indiscernible] supply?

I think the one that took out today was -- and it was actually interesting. Remember when the revenue commissions were being pushed into the vacant [ time ] we're bringing out. And those top that will find 40,000 to 50,000 units that were underdevelop. They're not there. Then you can find 3,000 units. The vacancy level and this is where I think the there is issue in the sense on what's going out there is, first of all, the senses coming in 5. -- just under 5.2 people -- 5.2 million people. The reality is the administration that is pointing to a much higher number. So the population is actually bigger than expected. I would wonder as a lot of the sentences started picking up actually up vacant stock. It's not actually vacant. Looking at the house, and there's windows of just front door, but the roof and the back is missing. It's not vacant, it's obsolete. And I think that's the challenge of really how much vacant stock is out there because I don't know many landlords that are leaving their units vacant. There's locations we are finding in certain maybe in nature, but the majority of locations to stock isn't vacant. We believe value. We certainly see just from ourselves, the pressure we see on our employees in the business trying to get a unit to the range is phenomenal. So I think it's something that needs to be example like there needs to be a proper database set up. I think the revenue commission [indiscernible] and didn't see a whole lot out there. There is issues with absolutely where you've got the [indiscernible] system and probate and all that where units are not [indiscernible]. But the Ministers already come off the mechanism to incentivize to rent that out. So yes, I'm not so sure there's that much out there.

Somebody asked me just in relation to the Urban division, more generally, whether there is a risk on that side around the office development, which also the only bit of commercial question media trials [indiscernible].

I think the way as I look at the office development is, first of all, it was in the broader context of what was in the docks. We've monetized about EUR 220 million to date in the docks. The office has to be built as part [indiscernible] the transaction. Both had to come together. And what I would point out is the office is noncore office, but there was a one-off transaction that we do. It won't be repeat again. It's a cash for cash flow transaction. So we're not worried about it. Just the most important point for us is we have the lowest cost in the sense that we have 0 land cost and that development is just construction cost. We're not too concerned about that. We absolutely understand how the commercial markets when we have that [indiscernible] worried at this point in time.

Okay. Understood. A question of buyback specifically on a company teams of age, say, IRR or buybacks by the terms [indiscernible] like make more sense.

Sorry, I think if we were having this conversation 2 months ago and we were at 95-odd, it should be different a different [indiscernible]. The share price has ticked up nicely. So we've always said we see a lot more value in the company than what currently has and I think it's fair to say, even at current share for [indiscernible] at that point. It comes back to the earlier conversation. At a point in time, what we see we have excess cash to the business really the right decision at that point in time. So if we access cash later in the year and the share prices, wherever it is, if you look at that, it's something we continually discuss at Board level, and we'd love to be in a position where share price is high enough that it's a real meaningful debate. And I think as the business matures, and we've been very clear with this. As the business matures and we see the steady state in some of our segments, that's the point in time where we really start talking about dividends. So when do we get to that steady state. When do we reinvest in the business with, in line with our 3 priorities. So listen, it's not a decision we have to make today, touch orders the position we have to make later in the year. And at that point in time, there's 3 or 4 or 5 different factors to weigh up between buyback and dividend, et cetera, et cetera. So listen, ultimately we will get to make that decision later in the year.

That's clear. And the final one then, which was made as well from, I think, a couple of people actually just talking about the capacity of the business, effectively what does the potential size of Glenveagh feel like now and somebody else asked in a different way, whilst what would it look like 3 to 5 years?

I think it's -- I think sometimes, look, it was a big journey. We started off with a big, huge land bank at start but allowed to build the exchanges, but [indiscernible] different it's substantial position we've ended up in. Next year, we've been the biggest provider at housing and the stage just more house than anyone else [indiscernible] in this quarter. I think that's a phenomena [indiscernible]. I think it's well done in the journey as well in a sense of that we stuck to France belief in manufacturing best for we believed in the long-term view of partnerships and working that kind of product was a place to go. And I think we've been improving [rate bit] all that. And I think the plenty of capacity into the system. I think it goes back to my point how much the stage can feed in into the system. And I think if you look at it this way, there's no more [indiscernible] the state we want to commit to somewhere between [ 10,000 and 20,000 units ] consumers probably likely to return to [indiscernible]. That's a huge opportunity, which is positioned. Particularly for the skill set we have. We're not a contractor. We have the skill set of master planning, getting through timing, working end customer, all of that stuff. That's a different concept all together. I think that's for [indiscernible]. And I suppose we always trying to [indiscernible] This morning was the state that have land, the state have the mechanics of the land development agents housing agents, the land authorities. They have in fairness put the policies in place they have to go to private too. The state are bit like us. If you're trying to push them, they go slow and once they start moving, they move. And I think that's where we've seen that really started to move. And I think the final thing is the skill set we are going to bring our own. I think that's where the big opportunity is. So I can see us certainly doing a lot more of that. And I think that's the opportunity we're seeing coming. Yes, of course, if we get out of [ recourse ] we will get more efficient. I think that's [indiscernible].

[indiscernible]. So gentlemen thank you very much joining us. So thanks, everyone, for listening in. If you need any more details or need to get in contact. Again, you have my e-mail on the top of the screen. Thanks a lot, we'll be seeing you soon.