Glenveagh Properties PLC (GVR) Earnings Call Transcript & Summary

Hello, and welcome to the Glenveagh H1 results call. Please note, this conference is being recorded [Operator Instructions] I will now hand you over to your host, Jack Gorman, Head of IR, to begin today's conference. Please go ahead, sir.

Thank you, [indiscernible], and good morning to everyone on the call. My name is Jack Gorman, I'm Head of IR and Corporate Affairs here at Glenveagh. I'd like to thank you all for taking the time to join us for our conference call and webcast, which relates to our interim 2024 results statements that we released earlier this morning. I'm joined on the call today by our CEO, Stephen Garvey; and our CFO, Michael Rice. In a moment, I'll hand you over to Stephen to begin the presentation, and following that, we'll open up the call to Q&A. I'd also like to draw your attention to the forward-looking statements included at the end of today's presentation. Thank you. And with that, I'll pass it over to Stephen.

Thank you, Jack, and welcome, everyone, to Glenveagh's H1 2024 results call. We will proceed like previous presentations by focusing on the summary slides that are at the front of the deck up to Slide 10, allowing plenty of time for us to discuss them and then take any topics that you might have during the Q&A afterwards. Starting with Slide 4, that's reflecting the progress that we've made so far this year, that I believe sets us up for strong delivery in full year 2024 and beyond. From an operational [ and ] financial perspective, we completed over 800 units in H1, approaching 1/3 of our full year target of 2,700 units. We've benefited from an increased scale and greater integration of standardization and offsite manufacturing to drive 190 bps of improvement in overall gross margin, largely driven from our suburban portfolio. And we've successfully signed a third partnership agreement on our site adjacent to Balmoston as well as advancing several other transactions for a fourth partnerships agreement, forward transactions on 2 urban assets, and then -- and we are in final negotiations with the Land Development Agency on our Cork Docklands site. In addition, we noted in July that we have a unique opportunity to significantly expand our landbank. If completed, these deals will provide over 6,000 units in strategic locations complementary to our existing landbank, some of which we can deliver from next year. Importantly, these also provide us with scope to secure partnerships on adjacent sites for a further 2,000 units that will further enhance the growth and returns profile of the Partnerships segment of the overall group. The strong operational and financial position of the business also allows us to consider capital returns, and we have today announced our intention to commence a EUR 50 million buyback program from tomorrow, having already returned over EUR 300 million of capital to shareholders since 2021. Finally, we are on track to deliver full year 2024. Our confidence in this is driven by our closed and forward order book that now is over EUR 1.4 billion across the 3 segments. Operationally, we currently are active on 21 sites and have been focusing on larger sites with the capability and capacity to deliver units at scale over multiple years across various tenures. Increased standardization of our products and process as well as the positive impact from our manufacturing business is supporting a more scalable, repeatable and faster delivery across the business. And on this basis, our guidance of EPS of EUR 0.17 is reiterated alongside the return on equity target of approximately 15% by the end of the year. On Slide 5, let's review the performance across the 3 business segments, starting with Suburban, our largest business segment with EUR 102 million of revenue in H1. [ It will come as ] no surprise that the market demand backdrop remains extremely positive with strong private demand and supportive government initiatives that I will discuss in more detail later on. Reflecting on the timing of site commencements, our H1 completions of just under 300 units have accelerated strongly into the third quarter. We've increased our margin by a 100 bps to 19.7%, bringing the expansion over 2 years to 240 bps, which reflects the benefits of standardization, manufacturing and integration of scale. Sustainable operational excellence underpins our whole network of 21 active sites, generating efficiencies embedded in sustainability and how we run our business day-to-day, underpinned by our Net Zero biodiversity and circular economy strategies. 70% of our suburban product is priced below 400,000 and almost 80% with -- and almost 80% of it works within the First Home Scheme caps, ensuring that not only our homes are environmentally sustainable, but also affordable to home purchases. Moving into Partnerships. We are very pleased with how this segment is progressing as the year has evolved. We brought ground on 2 of the largest partnership sites in the country last year at Balmoston and Oscar Traynor Road, and these projects generated EUR 32 million of revenue and a 15% gross margin in the first half of the year. We are now on track to commence construction on the 1,300 homes this year on these 2 sites and in total will deliver over 2,000 A-rated high-quality homes over the lifetimes of the schemes. And then doing so, we are proving that public and private partnership entities can work successfully together to deliver sustainable mixed tenure developments. We have now signed and commenced the third partnership agreement for a site adjacent to Balmoston, which alongside a fourth agreement that is also advancing, has the potential to add a 1,000 units of pipeline this year. The experience from our Partnership segment is very -- a very useful template for future growth. We have identified a strong pipeline of medium to long-term opportunities for the business segment, which we can deliver with both local authorities and the Land Development Agency. We believe that similar partnership models could be the ideal mechanism through which the state can activate its own landbank, that is the largest in the country. Finally, on this slide, if I move on to Urban, the business generated about EUR 18 million of revenue in the period. Revenue comprised of the completion of the 2 forward fund projects at Citywest and Castleknock. These projects delivered over 500 units in the period. Our forward sale project at Cluain Mhuire and Blackrock is on track to complete in H2, and all revenue and profits will be recognized on completion. In addition, several other urban assets have commenced development, are in the final stages of negotiations. Our development under the Croi Conaithe scheme recently launched by the government in Eden and Blackrock in Cork is underway and first revenue and profits are expected in 2026. Forward transactions are being advanced in Brownsbarn and Tyrellstown, totaling 260 units. As I said earlier, we're in the final legal negotiations with the Land Development Agency to commence activation on our site in the Cork Docklands via a forward fund transaction. Let's now turn to Slide 6, stepping back for a moment. We continue to be highly focused on increasing the free cash generation, and we allocate capital in a disciplined, consistent and efficient manner to optimize shareholder value. Our capital allocation framework has worked very well, buying land efficiently, while at the same time investing in our manufacturing capability and returning over EUR 300 million of shareholder value through buybacks. Our scale and the anticipated cash flow catalyst in the coming quarters enables the business to continue to maintain an efficient balance sheet alongside delivering our growth agenda. On land, we continue to be strategic, disciplined and innovative in our approach to ensuring that the business has the land [ capable ] of supporting our future growth, while maintaining both a capital requirement -- and -- both the capital requirement and underlying land costs. Over the last 12 months, we have entered into 5 [indiscernible] subject to planning permission transactions, which will provide access to over 1,500 plus in a capital finish -- capital-efficient, low-cost manner. Furthermore, we have noted on Slide 4, we see the potential to accelerate our future land investment plans and significantly invest our landbank or -- in the near future, some of which could be delivered in 2025. These investments, should they all materialize, will provide more than 6,000 units across multiple tenures. This is a rare opportunity to secure unique assets that are well located, aligned with future National Planning Framework policy and with a scope for us to secure an additional 2,000 units for our Partnership business on adjacent sites. In addition, securing forward funding on -- for the partnership on urban sites presents significant potential working capital benefits, along with the opportunities to create synergies by sharing operational functions and services across adjacent sites. The returns profile is also very favorable, and we expect pricing per unit to be very attractive, at approximately 10% or lower than NDV pricing and lower still when you combine this with the adjacent partnership sites. Assuming we can transact on all the potential activity, we expect that our landbank value will be a little over EUR 500 million at the end of the year, but over the medium-term, we'll return back to EUR 400 million. And over time, this landbank will comprise of a balance of owned land, structured deals and partnership assets. Secondly, on capital returns, we remain committed to returning excess cash identified to shareholders in accordance with our capital allocation framework. Given our confidence in the future cash generation and the balance sheet strength of the business, we are pleased today to announce the intention to commence on the 6th of September, a EUR 50 million share buyback program, again, reflecting our focus on enhancing the ROE and optimizing shareholder returns. Turning to Slide 7, where I would like to provide some more context on the planning and policy we've seen recently. Strong planning momentum has continued for the business, and we have been granted permissions for approximately 1,500 units so far this year. This gives us a clear line of sight for the near-term deliveries and over 95% of our units are already through the system for 2025. We are also on track to lodge applications for a further 2,000 units this year, further underpinning delivery for next year and beyond. We are also playing our part in partnering with various state agencies and authorities to accelerated housing supply across [ tenures ], including with the local authorities and also in schemes such as Croi Conaithe and with the LDA as it accelerates its activity to deliver on state lands. In its own right, the scale and commitment of the government support to the housing market is substantial. Some of the key initiatives that have been included to underpin affordability for homebuyers such as they have to buy in the First Home Scheme. Over – under 50,000 applications have been approved for Help to Buy since its initiation, and while over 10,000 potential homebuyers have registered [ further ] interest in the First Home portal over the last 2 years. From a supply perspective, I would highlight the waiver and development contributions that was initiated and put in place in April 2023. This has helped the industry to mitigate ongoing inflationary environment and has also helped accelerate commencement levels over the course of the last 2 years. Maintaining this momentum requires comprehensive resourcing of all aspects of the design, planning and development life cycle and streamlined design standards across a national level. This, alongside effective partnering with local authorities and the Land Development Agency, will enable the industry and the private sector capital to work together with state agencies to accelerate supply of a -- in a sustainable manner. Moving on to Slide 8. Slide 8 outlines the key elements are now put in place to enable the next phase of output growth. Firstly, when we look at the housing market itself, 2024 is looking like a much more active year. Commencements on a rolling 12-month basis are running at 80% ahead of -- year-over-year or [ 80% ] up, which is a strong indicator of future output growth. Completions, which will always lag, again are rolling on a 12-month basis, 3% ahead of the previous year. Based on this data, it looks very much like completions are likely to surpass 2023's delivery of over 33,000 units. And in addition to the government's commitment to invest in demand and supply side schemes that I have already outlined, more officials have been appointed to the National Planning Authority, and it is expected through extra funding to be allocated to various infrastructure projects in the upcoming budget next month. Other clear indicators of this increased commitment in recent months include the state becoming increasingly active in the land market via the local authorities or the Land Development Agencies. There is also a move to make Croi Conaithe more accessible and viable by extending the scheme to the metropolitan areas as well as the cities. And of course, the National Planning Framework is being revised and consultation is currently underway. We expect this to provide a housing target that accurately reflects the current and future population requirements, and it is designed for viable and desirable homes in locations where there is demand. And that next phase of output growth will help address the last decade of structural undersupply that we have experienced and earned as well as catering to the ongoing demand growth from the strong economy and a rapidly growing population. Multiple independent estimates, including the Housing Commission and the ESRI have pointed to a significant increase in required annual supply well above the current levels, most of which are at least in line with the commitment by the [indiscernible] for over 250,000 units to be supplied over the next 5 years if that government is reelected to power, equivalent to 50,000 units per annum. With that, I'll pass it over to Michael to cover all the financial review.

Thanks, Stephen, and good morning, all. And just one slide from me, Slide 9. My focus is, I suppose, mainly going to be on the full year numbers, as highlighted in the slide, but we'll also kind of make obviously reference to the half year numbers as well. So overall, the revenue for the group in the first half of the year was EUR 152 million, spread across the 3 divisions, EUR 102 million from Suburban, EUR 32 million from Partnerships and EUR 18 million from Urban. As expected, and in line with prior years, the revenue in H1 is lower than in the second half, and we expect to deliver approximately EUR 950 million for the full year 2024, and [ I suppose ] very nicely with significant contributions for -- from all 3 divisions in '24. One of the highlights for me from H1 was the continued progression of the suburban margin, and we saw this increase to 19.7% for the period, which gives strong line of sight for delivering over 20% for the full year and compares very favorably to the 19.3% last year and 18.4% in 2022. This margin progression has been mainly driven by the business' ability to control costs and drive efficiencies throughout our supply chain, mainly coming from our standardized products, our designs, our manufacturing capabilities. So we're really starting to see the benefits coming from those initiatives that we've been working on over the last number of years. As we've consistently done over the last few announcements, we're reiterating our EUR 0.17 guidance for the full year. This will be over double the EUR 0.08 delivered in 2023 and emphasizes the level of growth that the business is experiencing in 2024. Looking at some of our key balance sheet items, and as Stephen has already talked about, we expect to invest in land in the second half of the year with our expected land value being close to EUR 500 million by year-end. As we have always -- as we've always done, we invest approximately EUR 60 million to EUR 70 million per year on land, and this is simply taking -- so the new investment is simply taking advantage of particularly strong land opportunities and probably bringing forward 2 to 3 years of land spend into a more condensed time frame in 2024. But I suppose, the important point is, and the ambition for the business is still to reduce our land investment on the balance sheet to below EUR 400 million over the medium-term. So that balance sheet efficiency point is still a strong ambition for the business. To assist in the significant growth in profitability, we've invested heavily in work-in-progress, totaling just over EUR 440 million at half year, and that compares to EUR 275 million at year-end. This incremental investment of EUR 165 million will unwind in line with the unit deliveries in H2. The work-in-progress also includes a combined investment of approximately EUR 90 million, representing our apartment scheme in Cluain Mhuire, which will close in Q4, and also our non-core office development in the Dublin Docklands. Due to our expected investment in land, our year-end net debt will be higher than previous years, but will return to below EUR 200 million by year-end. This increased level of debt is reflective of simply the larger business that we now have and it's still within our guidance range of between 15% and 25% of gross assets, and this is a new measure which now aligns with our current covenant metrics. This increased debt level also incorporates the new EUR 50 million share buyback program, which we announced this morning and Stephen has already referenced. This will be our fifth share buyback program and emphasizes our continued commitment to driving capital efficiency, but also demonstrates the strength of the business and the strong cash generation that we now have. Finally, and building on our commitment to capital efficiency, we are reiterating our return on equity target of approximately 15% by year-end, which again is over double the 6.9% that we saw in 2023. Thanks, everyone, for joining this morning. I look forward to speaking to most of you over the coming weeks, and I'll pass it back to Stephen for his concluding remarks. Thank you.

Thank you, Michael. So bringing it all together on Slide 10. [ For ] 2024, we've outlined that this is a milestone year for growth at Glenveagh, and we anticipate very strong increases in both revenue, profit, EPS and ROE. This operational and financial position is underpinned by several key strengths, namely our healthy land portfolio and our forward order book, our scale and our proven standardization manufacturing capabilities. And the combination of these factors create a real point of difference for Glenveagh. As already outlined, the market environment remains very positive for scale [ operators ] with integrated manufacturing and supply chain's capabilities. The key investor takeaway here is that the fundamentals of the Irish economy remain really, really strong. The customer is in a really good place with favorable labor market and employment conditions and the strength of our public finances as a country gives the government a firm commitment to invest in housing initiatives to support affordability. And in turn, the combination of all these factors also create a real point of difference for the Irish housing sector. Before I open the lines for any questions, I would like to take this opportunity to thank the entire Glenveagh team, all our partners and [ their ] industry partners across the supply chain for the commitment and hard work in 2024. On a personal note, today, obviously, Michael made his announcement. I would like him -- to thank him for the 7 years he has been with me, and it's been a long journey. Hard to believe when we come out with our first results, we started with 6 houses, and today, we're announcing 800 houses. I want to thank him for his support, his professionalism, and I wish him well in all his future endeavors. With that, I'd like to pass the call back for any questions.

[Operator Instructions] We will take our first question from Colin Sheridan from Davy.

Just a few for me, if I can. Just starting on build costs. Maybe talk a little bit about the environment there, how you're seeing things progress as the year goes on or whether there's any sort of new pressures as the output level generally in the market is increasing? Then on the gross margin side, particularly in relation to Suburban, you've seen a really positive increase kind of year-on-year for a few years in a row now. I just wonder, you've clearly had a lot of additions to that, and a lot of efficiencies gained from things like vertical integration and standardization. Where are we in that process? Is there more left to go? Are we coming towards the end of it in terms of the kind of internal things in Glenveagh that are helping that gross margin out over the last few years? And then finally, maybe just talk about the land market considering that the acquisition is going on. What's the land -- how is it behaving generally? And then with reference to those sites in particular that you're looking at, at the moment, how do you think the returns are holding up relative to your own hurdle rates? And what would the additional Partnerships add-ons to those sites [ do ] to enhance those returns?

Thanks, Colin. Build costs first. It's been a pretty steady year. Obviously -- there's been obviously a little bit of wage inflation on agreements that were agreed at the back end of the year and a little bit of volatility on materials, but nothing dramatic out there. You're probably seeing the benefits on the labor side from the fallout in the commercial market and the freeing up of labor there. Overall, pretty good in getting sites up and running as we've moved through the year, the availability of labor. It's probably running somewhere between 3% and 4% on a general basis where we kind of see things at this moment in time. And I suppose, on the more positive side, HPI or house price inflation, has probably been a bit stronger. The real benefits of where we're seeing it, and I suppose what's really operating out there this hour is, we're producing somewhere between 50 and 55 units from the 3 factories across the board. The benefits of that, the large sites, some sites are taking 10 houses a week, which is phenomenal production out there. And it's kind of the machine is really functioning phenomenal out there. So really happy where that's going. A lot of our ground works into this year and probably next year are already de-risked. So we know where we are on that. And I suppose we've good line of sight as we move into 2025. So pretty happy where we are with build costs and kind of comfortable position not just for this year, but also into 2025. And on the margin, yes, absolutely, expansion. And that's probably on 3 fronts. And the vertical integration is obviously playing a critical role. It's really driving that scale. Our own standardized products is really coming through the system. And I suppose where we're really benefiting, our standardized product is really focused to work under the government initiatives. It very much works all under the caps. It very much works under all the tenures and that's allowing us to drive more scale on that. Obviously, positive outturn for the first half of the year, but as we called in the July statement, we do expect it to well exceed 20% into the second half of the year. So happy where that is. The land market, yes, we're looking at a lot there at the moment. We're taking 3 things into account. All predominantly owned or suburban product is what we're looking at this moment in time as well as sites that would have joined Partnership opportunities. Competition limit is out there, but we are very conscious that the National Planning Framework is going to work its way through the system. There is going to be increased land opportunity, but it's going to be down the road -- Available land is going to be realistically '27/'28 by the time it feeds through the system because it has to go through the various mechanisms. So that is a bit away. So I suppose we're taking those opportunities down. We've identified strategic assets that we think are a huge opportunity. Y You've all saw in the midst of things, the wind down of [ Nama ] has to be done very soon as well, which is also forcing people out of the system and is that opportunity as well. Pricing pretty much is staying stable to flat. We aren't seeing any real spikes out there. If you were buying sites with planning permission ready to go, you are going to pay a premium from them because they are just not available. We don't need them, and we don't want them. We are very much at the stage where we just want to take the raw product, bring it through the system, put our product on it, and then that enhances the value. So, on the metrics of what we're buying, we're happy where we are. We're seeing really good returns in that across the assets. The real benefit of those assets that we're looking to take down is the opportunity to blend them in with partnerships. So if you took a site that you were taking down at EUR 35,000 a site, taken a 1,000 units, and you can blend 500 partnership sites to that, you're bringing your average site cost down, but you're also going to get the benefits of bringing working capital from the state entity to play as well, which is a big opportunity. And I suppose, it really allows you to drive big volumes through a site where you can amalgamate it together, bring those tenures and there's obviously real benefits to both return on capital employed as well as gross margin.

We're now taking the next questions from Carberry Shane from Goodbody Stockbrokers.

[ Best of luck ], Michael, in the future.

Thanks, Shane.

[indiscernible], if I may. First one just in terms of Suburban. Just thinking about the kind of SKU that is towards H2 from a volume perspective. Can you give us a little bit of color in terms of how Q3 actually evolved and thus how we should think about the full year? It sounds like quite a strong Q3. So just interested to know what that means for the kind of H2 SKU? Secondly then, in terms of kind of from a Partnerships perspective, I think last time we spoke, Stephen, you were kind of saying, potentially could juggle up to kind of 6 to 8 deals here. Obviously, momentum has been really strong over the course of the year from a Partnerships perspective. Is that still the case in terms of the number of deals that you think you could juggle because obviously, we're nearly halfway there at this point already? So yes, a little bit of color on that would be helpful. And then the last point is just in terms of net debt, and I know this is kind of a stranger year in terms of the land transactions that will come into that kind of net debt figure for this year. But just thinking of kind of leverage more generally in that new kind of 15% to 25% of gross assets, has anything changed in terms of how you're thinking about the amount of leverage that you could run the business with generally?

[ We'll take that leverage ] -- you go ahead.

Yes, I'll take the last one first, Shane. I think you're right in terms of the land acquisition. And as we said, it will be below, but probably close to EUR 200 million at year-end. But I think it's just -- it probably just demonstrates the size of the business we are now. The level of profitability that we have just allows us to run a slightly more leveraged position and kind of make decisions at a slightly higher level in terms of what we regard as being excess cash or not. So I think you will -- as you said, you will see probably for the first time a higher debt level at year-end. But I think certainly, as we go into next year, we're just more comfortable now as a business to carry a higher leverage position. So I'm not saying it's going to be at EUR 200 million every year-end, but I think you can take it from here on [ out ], it's going to be a higher debt level at year-end than you would have seen previously. And as I said, just with the level of cash flow, with the level of operations we have, the strength of the balance sheet, that just makes a lot of sense for the business.

On the Suburban, as I kind of outlined in July, it was really -- units just fell the wrong side of the line. That was all it was. We've seen really strong momentum into Q3. Stuff that we have for this year is all outstanding weather-type finishing now completing. The guys are doing finishing touches on site. So yes, a really strong momentum in that. As I said previously in one of the comments, the factory producing the 50 units a week really run through the system. So our stock is now well progressed. So happy where that is. On the Partnership side, yes, we're -- we've made significant ground, but I do think it is a huge opportunity. And I think the way to summarize this is we know the Suburban business is humming along now with 2,000 units. We can add a bit to that incrementally here and there. But the real growth is on the Partnership's opportunity. You don't have to make the land investment. You don't have to put the money upfront. Now the way the structure on the Partnerships is that they're bringing the working capital to play right up front, which is a real positive. And the one we've just signed [ we're ] being paid on stage payments. We've no euros in the ground, so that's a real positive. I think you just have to look at the fact shared, the state has the best part of 150,000 plus across the local authorities and the LDA. They're actively out there now in the market, particularly in urban locations. They have the firepower. I think you can see the government's commitment to putting further money into housing. I really think they're just going to drive on here. I think where we can really bring our skill sets to the table is our ability to properly plan developments, bring it through the planning system, procure properly, deliver in efficient manner and deliver it at speed. We're looking at our Partnership sites kind of getting to a maturity of delivering 300 units on an average size. So 6 to 8 units, you can work out the numbers you saw, I suppose that's the kind of opportunities out there. Certainly, the indications what we're seeing, that's the line of trajectory from here on [ those ], I think.

[Operator Instructions] We will take our next questions from [ Christian ] [ Josh ] from Deutsche Bank.

Just a couple of follow-up questions from me. First of all, just on the leverage piece, how do you think about leverage in the context of the level of forward funding or cash in advance at any given time? And the second one, just on the phasing. So I note the point that some things just sort of fell over the line in terms of H1. But is there anything you can do to drive a more even H1, H2 phasing going forward, particularly on the profit line, which is obviously stock this year and has been stock in previous years as well?

Yes. I think sometimes people always think we're a second half team. That's been the rhythm for a while. I think you have to take into account the journey the business [ has ] been on, we've been 7 years. We started from zero. [ You're ] up to 2,700 units this year across various tenures. You do have to remember we took in over 500 units in our Urban business that did complete. Obviously, revenue was recognized in the first half in previous years, but it shows where the business is starting to really move towards actually bringing product over the line. We're in a pretty -- we're pretty comfortable where it is. So I think as we've got to that maturity stage from probably here on out, there should be a better balance as we move through the next years. I think you have to look at the growth profile of the business as it moved up through the years. But as we move from here on out, I think you'll see a much, much better balance from H1 to H2. The other big factor that will come into play will be the Partnerships. They were very much only at the start, but now they're at full churn, and you'll see them -- their revenue and cash flows coming into the first half of the year as well.

Yes, on the leverage piece, I suppose how we view the forward funds is that they're obviously beneficial to the business from a balance sheet perspective and from a capital perspective. It's probably for -- going back to 2020. It's been our focus is to bring in as many forward funds as possible, both in the Urban business and the Partnership business. So if we can forward funds and utilize someone else's capital, we'll obviously do that. So I think any forward funds that we bring in won't massively impact our debt levels. And I suppose with or without the partnership business, we're comfortable at the debt levels we're talking about now. So it kind of gives us -- it gives us great flexibility to bring in as many partnership deals as we can because we know it's not going to affect the debt levels given the capital structure.

It appears there are no further questions in the queue. I'd like to turn the conference back to Jack for the e-mail questions.

Glynis Johnson from Jefferies has not been able to join the call, but has sent me through a couple of e-mail questions, so would just like to run through them as part of the Q&A session. Some of them have been already answered, but there are 3 that I want to just highlight for her on her behalf. Question one is around, one of the forward funds look like they've moved into a forward sale negotiation. Can you just elaborate on the process around that more generally? The second question is, can you provide a bit more color on build cost inflation, in particular? What are the greatest sensitivities in terms of trades and products that you would look at? And the third question is, can you update us on [ RZLT ]? When will you see it come in? And how meaningful could this be for Glenveagh?

I don't know, should I say Glynis or Jack. On the [ RZLT ], I very much would -- our view is this is a positive for the overall market. This is to incentivize production of housing. And obviously, there's been a bit of debate. The government have been thinking of not implementing it again this year. There's been a bit of pushback from other government parties. There's probably going to be some hybrid implemented at the back end of the year in the [ budgets ]. We view it as a positive because it incentivizes landowners who can't produce housing to give it to people who can produce housing. So I think very much, I would look at it as a stick and a carrot effect. Those who can't deliver move the land on. And I suppose the benefit of that is it stops [ landholding ], but it also pushes land into the system. So it keeps the land market very stable. It keeps a steady supply. So look, I view it as a very much a positive. Build cost inflation, as I said, pretty much very steady as the year has evolved, that was expected from higher rates back in '22 and the start to 2023, probably running somewhere between 3% and 4%. Not really seeing any pressure on the system on the labor side. We are seeing the benefits of the commercial market free up labor. Obviously, U.K. market is kind of just about coming back. So we've had seen availability of trades coming from the U.K. market, particularly subcontractors -- Eastern European subcontractors, bringing people from that market. So labor side, pretty confident where things is. As usual, we'll always expect wage agreements to move through the system as the year go on. So we've got to see how that's [ going on ]. But it's probably going to be around 3% on wage agreements as the year evolves. Material side, nothing huge on that. We do expect the suppliers to come back in and negotiate at the start of next year, but we're not seeing anything particularly out there that's causing us any indigestion at this moment in time. So happy where -- as I said, our view is 2024 is done. It's [ really looking ] 2025. We're well into that in the sense of procuring and things like that. So pretty happy where things are at this moment in time. Yes, on the forward -- fund forward commit, obviously, we evaluate every project at points in time. The one in question actually has been the counterparties on something else as well. I can't obviously reveal names. That counterparty actually, to get their timing, they asked us would we be able to do something in that. So we committed to a forward commitment, but they actually have funded us on a forward fund basis on another site. So we are actually not losing out [ with ]. So just to clear that up. Pretty happy where all the forward funding is. Obviously, the predominant player now we're seeing in the forward funding is actually the state themselves. So you're seeing the Land Development Agency and you're now seeing local authorities as well as who proved housing bodies really entering that market.

Thank you, Stephen. And maybe just for closing remarks, thank you to everyone who joined the call today. We hope to see many of you on the roadshow over the course of the coming weeks. And obviously, please don't hesitate to contact us if you have any questions or follow-up queries from today's call. So thanks again, and goodbye.

Thank you for joining today's call. You may now disconnect.