Ryman Healthcare Limited (RYM) Earnings Call Transcript & Summary

Thank you for standing by and welcome to the Ryman Healthcare Half Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Ryman Healthcare's Chairman, Dean Hamilton. Please go ahead.

Welcome, everybody. I'm Dean Hamilton, Executive Chair of Ryman. We appreciate you dialing in today. There's a lot to cover today. But just before we get into the presentation, I'd like to take the opportunity to acknowledge the passing, sadly, this year of 1 of our 2 founders, Kevin Hickman. Kevin, along with John Ryder founded Ryman 40 years ago and essentially pioneered integrated retirement living and aged care as we know it today. It literally didn't exist before both John and Kevin. Along with others, I was fortunate to attend the service of Kevin at the Christchurch Town Halls, certainly humbling to hear of his contribution not only to our sector, but also to athletics, and to his other real passion and that was horseracing. A great pioneer was an enormous legacy, certainly, Kevin, a life well lived. With me today in the room is our new CEO, Naomi James and Rob Woodgate, our CFO. Naomi started with us on the 4th of November. We've purposely left Naomi free in November to travel around the business to meet our team members, to meet residents, to meet with a number of our stakeholders. As of tomorrow, I will step back to a nonexecutive Chair role, and Naomi will lead the organization. Given Naomi's recent arrival, Rob and I will present today's result. Naomi will make a few comments at the end and we'll all be open for Q&A. We've got an hour, we'll present for around 40 minutes, and then move to Q&A. I'm also conscious we've got meetings with a number of you over the next week. In terms of the agenda, Rob will cover financials and capital management, and I will present the balance. A brief snapshot at 30 September. We had 49 open and operating villages, 9 of those of which also had a construction element at them, included in that 49. We now have over 9,500 retirement village units, over 4,600 aged care beds, and combined we've now got over 2,000 units and beds in Victoria, some 14% of our overall portfolio. We've got a further 4,700 units and beds in our land bank. Just recently tip passed 15,000 residents and over 7,700 team members. Stepping back, we own over 15% of all independent retirement units in New Zealand and over 10% of all aged care beds in New Zealand. And interestingly, we provide as many patient bed nights annually in New Zealand as the entire hospital system. Whilst we're going to talk a lot about numbers today, at the heart of Ryman, we are care and resident experience. We provide care good enough for mom and dad. Importantly, as we move through this transition, our residents remain at the center of everything we do. This year in New Zealand, we're proud to be acknowledged for the first time across 3 separate cohorts as best-in-class. We remain a highly trusted brand, thanks to the hard work and compassion provided by our over 7,500 team members. On to a review of the 6 months to 30 September. Whilst the period hasn't been without challenges, I think we've achieved a lot. I'd like to take you back briefly to March 2023. The company was in discussions with both James Miller and myself to join the Board. From the outside, we could see a number of the issues, but we asked the Board as part of our due diligence to retain a third party to solicit feedback from investors and analysts, many of you on the call today, on the views of the company. There were 3 quite confronting common themes. One, there was a loss of confidence in the Board. Secondly, there was a loss of confidence in the management team. And thirdly, there was a loss of confidence in the numbers, including the non-GAAP measures. With the support of the whole Board, we've set about rebuilding that confidence. In terms of governance and leadership, we've completed the Board renewal process, and that will be with Claire retiring at the end of the year, will be set at the 31st of December. We have a new executive team, including Naomi and all are on a new remuneration structure. In terms of financials, once James and I joined the Board, the Audit and Risk Committee commission an independent review by PwC of our financial reporting, both relative to the sector, relative to best practice and also how directors were exercising judgment. This led to a list of key actions we needed to undertake. Unfortunately, these changes take time and energy and capacity of the team and in the short term, create a lot of noise in the numbers. We saw this at the full year result, and we're seeing it again today. I'm pleased to say we're nearer to the end than the start of this process. You will notice a significant impact on our numbers today also through lower capitalization, and Rob will step through that later. In terms of the highlights, net profit before tax and fair value movements was a loss of $79.8 million, down $17.8 million on the prior half. Cash flow from existing operations was minus $7.8 million, down $24.8 million on the first half '24 and cash flow from developments, whilst negative at $44.7 million was a significant $132 million better than the comparable period in first half '24. On the consumer and resident reputation front, we talked about the recognitions. It's important to note we've had positive and stable resident NPS across care, serviced and independent living throughout the year. Our NPS for all of those residents remains above 40. In terms of our business improvement, we've done what we said we'd do in our September update. We have new RV unit pricing structure implemented on the 1st of October and our new services and support structure is in an advanced stage. Obviously, more on that later. In aged care, our occupancy in mature care centers stayed high at 96%. There has been movement in the regulatory front, proposed new legislation in Australia is positive for us. However, the impact will take time as it has been grandfathered at 1st of July 2025 for existing residents. In New Zealand, where the majority of our care beds are Health New Zealand Te Whatu Ora, the review of aged care funding continues, whilst the sector has limited visibility on that review we understand there's a potential framework for consultation coming out in coming months. In terms of sales and stock, a key part of today is -- covering this topic. In -- what is a relatively tough market, we have had record settlements achieved in the period of 827 ORAs and $651 million of gross receipts, our highest level in the last 3 years. Positively, we achieved that whilst we maintained our pricing. Despite this progress with strong first half new deliveries, our stock built up to 12% unoccupied units at the half, albeit 45% of these are under contract. On development, we had a good first 6 months. We've delivered 667 retirement units and aged care beds. We opened 3 new buildings at James Wattie, Miriam Corban and Keith Park in New Zealand. These are all fabulous facilities for our residents. In terms of capital management, our debt ended up $50 million higher at the half year relative to March 2024 at $2.56 billion. And as we've previously advised, we had amendments to our financial covenants for testing periods through to March 2026. We've touched on a number of our metrics for the first half. In terms of our retirement unit occupancy, we averaged 87.9% for the period. It slipped slightly as we brought new stock on. Our aged care occupancy across the portfolio was 91.7%, down slightly. The mature was steady at 96% and the developing was at 59%. Our gross resale margin at 26.6% was 3 points lower than what we achieved last year. Whilst we maintained our pricing, our cash resale margin did compress. With 2 years of flat pricing, mathematically, margins per unit and as a percentage will compress. More so on service departments given the shorter tenure. And independent units, 2 of the 9 years are now relatively flat. We're looking forward to markets improving and being able to stop that compression. In terms of total sales of RV units, of the 827, 224 were new and 603 were resales. Turning to governance and leadership. It's been a period of significant change with 5 new directors commencing since June 2023. I'm really pleased with the caliber of Director we've been able to attract across Australasia. The latest addition of Scott Pritchard, known to many of you. He is an experienced public company CEO. He's also an experienced developer, who I'm sure will make a positive contribution as we transition from a construction mindset to a developer's mindset, where we will partner a lot of our design and construction. As previously advised, I'm returning to a nonexecutive role tomorrow. At that point, all of the Board will be considered independent. I'd also like to take the opportunity to thank Claire for her 10 years on the Board and stepping into the interim Chair role in 2022. In terms of the executive team, we have a new structure. We have a new team. We have a new CEO Naomi, and we have new remuneration structure. I'm delighted to welcome Naomi as our CEO. Naomi brings a proven track record and transformation and as a successful public company CEO. I'm confident we've got the makings of a high-performance leadership team. In terms of business improvement, we've had a big focus on over the last 6 months. We talked to you about it at a high level in May, and we provided an update in September. For us, it's been about how do we find the right balance between great care for our residents and great returns for our shareholders. They need to comfortably coexist. Our opportunity overview covered 5 areas. Our revenue settings, both in retirement and in care, our services and support structure and new development processes, our existing village performance, our culture and change capability. We then move to prioritize our efforts more recently into 2 areas. Firstly, resetting our DMF and weekly fee structures to reflect not only residents staying longer, but also to reflect the fact that the operating costs of our villages had escalated substantially over the last 4 years through COVID and beyond, whether that's in rates, insurance, electricity or labor. Secondly, we're focused on reorganizing our non-village overhead. Our support and services team and our non-village expenditure. Our cost per resident had grown materially over time. I'll touch more on these now. In terms of our new pricing structure, you're all well aware of our changes we introduced at the 1st of October. It's very early days, but so far, approximately 75% of new sales contracts entered into are at 30%, and they've all been achieved at the price list. The majority of the balance of new sales have been at 25%, and we have consistently achieved at least a 5% premium to our price list. In terms of the weekly fees of those new sales, half -- roughly half are electing the fixed weekly option and approximately half are electing on indexed. Whilst these changes aren't going to have a material impact on our cash over the next couple of years, they will create significant long-term value for shareholders. In terms of new services and support. As we've shared previously, the move to the regional model was in hindsight, premature for Ryman. With our historical underinvestment in systems, we simply replicated overhead in New Zealand, Australia and the group. We actually got diseconomies of scale per resident as we expanded. We've now moved to One Ryman model. We've disbanded the regional overhead. We've reduced layers, and we are setting out new ways of working. We've had a heightened focus on costs, whether that's IT, whether it's our leasing, whether it's our travel or the like. At the same time, we've been downsizing our in-house DDC function as we complete existing projects and get ready to transition to an outsourced delivery model for new villages. The reorganization has been significant and has been challenging for everybody involved. I'd like to express my thanks to all the team as to how they've worked through the process and supported each other. While some have left, a number have taken on new or more senior roles. In terms of financial impact, we've achieved $18 million of annualized savings to date and our gross non-village operating expenses. And that's across employee costs and other costs. One-off costs to date are approximately $10 million, including $6.5 million expensed in the first half. On to the financials, and I'll now hand over to Rob.

Thanks, Dean. As Dean mentioned earlier, we introduced a number of accounting changes in response to the review. On the changes that we've made to the statements, I acknowledge that they're somewhat tricky to work through. We've tried our best to lay out the changes, and we don't expect this to be the norm. However, to get through the changes, we do need to show a number of restatements. We've made a number of these changes in the past 6 months, and these are all significant changes with the aim of improving our reporting and transparency, and I'll cover these off in the next few slides. The key changes identified earlier on were the recognition of ORAs with a change in the sale being based on the occupation and recognizing available units on the base that they are practically complete. And the changes Dean highlighted on the business improvement program has led us to revise other areas, including resident tenure and changes to the valuation where positions have been reviewed after making changes to our pricing model. In the period, we appointed PwC as our new auditor. And whilst the accounts are not formally reviewed or audited, we have been in active discussions with the partner on positions we've taken in today's presentation. Just moving to the metrics. On the cash flow from existing operations, we saw a cash outflow of $7.8 million, down from a $17.1 million inflow last year. This was largely down to changes made to interest capitalization which saw an increase to the net cash interest. Capitalization has been updated to align with active developments and where we have less activity, it will result in more interest remaining in the operating cash flow. I'll come back to this point later. Cash flow from development activity was an outflow of $44.7 million and an improvement on the first half of '24 of an outflow of $177.3 million, with lower levels of land acquisitions and lower cost capitalized to development activity. Net debt remained steady at $2.56 billion. IFRS profit before tax and fair value was a loss of $79.8 million from a reported first half loss last year of $17.8 million. And whilst care and village fees increased by 11% and DMF increased by 9%, through increases in operating expenses and interest costs, and with changes in the rate of capitalization seeing more costs in total expenses. Moving on to the changes in financial reporting. We've detailed in the financial statements where we've made restatements to prior periods. And on Pages 12 to 15 of those interim accounts, we have detailed the restatements and map these to this chart -- this table. First point is operator's interest in the IP -- sorry, investment property valuation, which included an adjustment to the accrued DMF, which applied a time-based discount factor. On reviewing this, the position does not get adjusted and should be shown at face value and not be discounted. This change saw us decrease investment property by $235 million and restate prior periods. The recognition of occupancy advances has changed to the point when the resident moves in. It was previously on the signing date of the ORA. This is a key change underlying revenue recognition to the sector. The adjustment sees a $91 million decrease in the fair value movement with the change in the timing of the recognition and sign being the earlier occupation, and also removes the ORA debtor and corresponding liability. With the occupation date now being the triggering event and settlement normally taking place at the same time, we do not see the ORA resulting in a debtor in the accounts. The treatment of the debtor and lower liability sees a $515.8 million decrease in both positions, and this will be adjusted -- or has been adjusted in prior periods. The debtors that do remain now are either where residents have transferred internally and the units have not cash settled, or residents who have been granted possession prior to cash receipt. In this case, there are health related issues supporting this. On the third point, development land. This has been classified going forward as investment property. In the past, it was property, plant and equipment. Land is held at fair value as determined by an independent valuation and capitalized work in progress is held at cost and tested for impairment. The change has the accounts reclassifying the land held for development, $466.4 million and historically, impairments of $147.5 million, transferring from investment property and fair value movements. And in the period, we saw a $28 million decrease through fair value movements with adjustments made to work in progress booked on development sites. Similarly, with land -- with development land, assets held for sale mirror the same criteria as for investment property and are held at fair value. Historical expenses relating to assets held for sale are reflected in fair value movements and adjusted by $63 million. Finally, the expected tenure of residents in both independent and serviced units have increased to 9 and 4 years. Previously, these were 7 and 3 years. The change sees us extend the DMF revenue recognition period to align with the average resident tenure across both unit types. In the period, we saw a -- sorry, a reduction in DMF of $1.8 million in the revenue applying the change on residents who took up occupation from 1 April. Moving on to the statutory profit and loss. The profit before tax and fair value movements was a loss of $79.8 million, from a reported loss in first half '24 of $17.8 million. As I mentioned earlier, we saw revenue improvements in village and care fees up, 11% and DMF up 14% as we open more facilities through the period. Total expenses lifted by 27% with the underlying changes in operating expenses and finance costs linked to changes we've made in our approach to capitalization. We no longer take marketing and establishment costs through to the project and the point we commence capitalization of costs to the site is when we deem it to be an active development. Working through to net profit after tax. The first half position was a net profit of -- sorry, $94.4 million, down 50%, from $187.1 million. There are 2 variances in play here, on the fair value movements, these came in at $254.6 million, up on the first half '24 by $113.2 million, reflecting underlying movements in the valuation and some of the changes I highlighted earlier. I'll come back to these when we go through the investment property slide details. Deferred taxes expense of $80.4 million versus tax credit in the prior period of $63.5 million. This was reflecting 2 elements: a higher expected future taxable DMF following the new price changes and also changes in New Zealand and Australia, resulting in a lower recognition of tax losses. Jumping across the revenue. On aged care and occupancy, our mature villages, we saw occupancy remaining steady at 96.4%, up marginally on last year. When looking at all 43 care centers, we experienced good occupancy within the first half at 91.7%, marginally lower than the same period last year. This difference compared to the mature care performance reflects the opening of 3 care centers, Dean mentioned, Miriam Corban, James Wattie, and Keith Park. Revenue on aged care. This was up 13% to $240.7 million, with revenue per occupied bed up 10% to $2,244 per week. On the retired room village side, we saw growth in village fees in both serviced departments, up 15% and independent units, up 21%. The change came from repricing of fixed weekly fees, which have lifted over previous years and prior to the business improvements that Dean mentioned. And this also coincided with us, opening of the main buildings and the removal of discounts we applied when the facilities were not available to residents. Occupied unit days improved by 5% on both unit types. And on the revenue per occupied unit week, we saw a 2% increase in service departments to $827 per week, a 10% increase in independent units to $494 per week. Moving through to the expenses. On operating expenses, we've experienced a 12% increase in employee cost to $247.3 million, up $26 million in the prior period. This aligns with the additional staff supporting the opening of the main buildings and also including here a general wage increases and one-off costs right into the share scheme. Buildings and ground expenses have lifted also linked to the increase in units in the main buildings, and we're experiencing an ongoing inflation on rates and insurance. So in total, increasing by 24%. Direct selling expenses were up as was marketing both by 28%, underpinning recent sales campaign activities and sales incentives to residents. Expenses that were capitalized to projects was down $13.8 million or 29%. This reflecting a change made not to capitalize operating costs associated with the start-up of the village and with the non-village expenses as a result of less development activity and associated overhead capitalization. Our capitalization policies remain under review as we work through the organizational restructure and through the changes to the build program. Finally, several one-offs are documented totaling $9.9 million, with costs linked to the closing out of previous employee share schemes, restructuring costs associated through to September and write-downs to inventory. Moving across to the next slide, finance costs. Our interest costs increased by $10.8 million, to $92.9 million, reflecting the increase in the debt balance with borrowings lifting to $2.5 billion and underlying interest rates with an average cost of debt of 6.5%. As I mentioned earlier, changes to the capitalization of interest with a move to capitalizing active developments, resulting in $21.9 million less capitalized borrowings. The combination of both the interest cost and the capitalization, so the net finance cost on borrowings jumped, from $16.4 million to $48.8 million between the 2 comparative periods. Capitalization to sites under construction decreased to $25 million, a drop of 29%, reflecting lower work in progress as in-flight sites moved to completion, including the 3 main buildings. Capitalization on land bank sites decreased too, dropping to $6.4 million, with no capitalization taken on the 6 of the 10 greenfield sites and the village extension landholdings. And previously, we capitalized interest on all land bank sites. As mentioned earlier, debt increased by 3% to $2.59 billion. Moving through to the cash flow from existing operations, one of our key metrics, whilst this decreased by $24.8 million to negative $7.8 million we did see some solid results from the village operations. Cash from village operations lifted by $24.2 million to $16.6 million, reflecting the growth in care and village fees. And this was closely matched to the change in payments to suppliers and employees up $29.6 million. We did see a decrease in the amounts of village and technology CapEx, decreasing $5.7 million and $7.2 million, respectively. Net cash flow from the resales of ORAs decreased by $7.5 million to $69.6 million, driven by lower gross margin on resales. Margins were compressed through the period, and these are largely dependent on unit price inflation. You can find more details on our retail volumes in the appendices. The resale units were up 9% across both countries and average unit price on resale units remained flat. Non-village cash flow was down $14 million, also impacted by payments to suppliers and employees. And as we mentioned above with the lower capitalization of interest, we saw cash interest expense coming through the cash flow from existing operations and interest paid increasing from $20 million to $47.7 million. Moving through to the cash flow from development activity. This improved by $132.6 million to negative $44.7 million on the half. The cash from resident funding dropped by $10.1 million to $250.9 million. Within this, the new sales settlements of ORAs dropped by $5.6 billion. New sales ORAs were down 5% with units sold in the second half of '25 being 224 units versus 236 in the prior period. As I mentioned before, with the slide in the appendices, Slide 49, I think it is, it goes into more detail on the volumes of ORAs with the decrease coming through largely in the Australian market. This was partially offset with average unit prices having moved marginally higher on new sales units. And the net position on RADs in aged care beds decreased by $3 million. The significant moves on the development CapEx. There was a combined improvement of $44 million, with lower land acquisitions and also having completed the settlement on Newtown. We also saw a slowdown in spend year-on-year on the in-flight projects as we made progress through the main village centers. This resulted in a decrease year-on-year of $67.3 million to $220 million. Capitalized interest was lower than the year-on-year position. As I mentioned before, we reviewed the capitalization of projects with the criteria being under active development. And this has seen less capitalized costs in the development cash flow with the offset in interest costs in existing operations. Finally, on cash flow, moving to free cash flow. Combining both these positions, we saw free cash flow coming at negative $52.5 million, an improvement on first half '24 of $107.7 million. Moving through to capital management. We made a series of restatements to the positions from the 5 changes I highlighted earlier in the presentation, and we've shown the restated positions for the prior periods shown on the slide here. There is a transfer of development land from property, plant and equipment to investment property and restatements to investment property with accrued DMF being adjusted for the time discount factor I mentioned earlier. There's reclassifications on assets held for sale, moving these to investment property, adjustments made to the deferred tax asset on the accrued DMF adjustment and changes to the ORAs and the debt and liability reflected in the trade and other receivables and net occupancy advances. Total equity is up by $74 million to $4.3 billion, and the NTA per share has increased by $0.223 to $5.897 per share. Net interest-bearing debt has increased marginally in the half with total debt at $2.56 billion, and gearing remains above 37%, which is outside of our target range of 30% to 35%. On the bank covenants, the interest coverage ratio for September '24 was reported at 1.7x. This is now reflected in the sales based on occupation and we'll do so going forward. We continue to operate under the revised ratios that we shared with you in September, with the ratio of 1.5x for this half and also for the full year at 31 March '25, and then stepping up to 1.75x in September next year and 2x in March '26. And in line with previous statements, we've made, the company is intending to review the dividend policy in FY '26. And as such, there has been no dividend declared for this period. Moving on to investment property. With the changes to accounting treatments, we felt it was necessary to show the restated investment property position. The March '24 position was reported at $10.04 billion. In the restated positions, we've reclassified land from property, plant and equipment to investment property, increasing the balance by $466 million. In parallel, we reclassified held-for-sale property and also apply the adjustment to the accrued DMF being the time-based discount. This resulted in a restated position of $10.26 billion. In the half, we increased the investment property balance with additions of $259.5 million. The fair value movements in the period were a net -- sorry, $280.6 million based on independent value appraisals. The reported position for September '24 after the restatement and the valuation was $10.79 billion. Moving on to the investment property valuation. As we outlined in the full year, the independent valuation now underpins most of the positions with some of the previous judgments being eliminated from the investment property position. The table on the left-hand side takes you through the March to September movements. In March and under our previous recognition policy, we relied on units being subject to an occupancy -- occupancy agreement, sorry, or contract. This worked on the concept of near-complete units. In September, we're using the occupancy as a recognition point and valuations are included on completed not yet occupied units or stock that can be occupied. And development land and land bank transfers are being held at cost now being at fair value and subject to the value of assessment. On the right-hand side of the slide, we show that the valuers' assumptions, highlighting that the valuers have adjusted the unit price inflation in the earlier years and also the discount rates to accommodate their assessment of how the new DMF pricing impacts the investment property evaluation. And the units, including the fair value evaluation totaled 9,575 with available new sales stock based on a practical completion test. Finally, jumping across the funding & treasury. Debt funding remains largely unchanged in its quantum of $3 billion, with drawn debt up $30 million. Post the balance sheet date, we have rolled forward $147 million of facilities with 2 of the domestic banks. We have no near-term maturing facilities maturing and all lines are noncurrent at the end of the year. Our bank group remains very supportive of the actions we've taken over the last 3 months. We reported a weighted average tenor of 2.7 years, and we'll be looking to work through our annual refinance program prior to the end of full year, and we expect to resource some tenor at this point. Finally, the fixed rate debt has increased slightly in dollar terms to $1.65 billion, being 64% of the drawn debt. The weighted average cost of drawn debt is standing at 6.5% the same as last year. At this point, I'd like to hand you back to Dean.

Thanks, Rob. We need to acknowledge there's been a lot of noise in these numbers as we work hard to improve our financial reporting. I'm confident we're getting near the end of these changes. Let me dive a little deeper into sales and stock. As Rob talked about, we are now recognizing our ORAs on occupation. This is a substantial change for us and brings us in line with the sector. All of our non-GAAP metrics now are based on this, whether that's sales volumes, gross margins, all recognized on occupation. Why have we done that much stronger alignment with cash, strong alignment with our revenue recognition because weekly fees and DMF start accruing on occupation, reduces our volatility created by canceled contracts where we would book a sale than have to back it back out through a cancellation and also removes the direct judgment on near-complete units. In terms of impact in the half, we've had to restate with the new method, we have sold 827 occupation rights. Our previous method, it would have been 843. So we're 16 less. In terms of gross margin, it's slightly the other way. Our new method is $11 million higher than the period would have been if we had booked -- done it on booked sales. In terms of the bottom part of that right-hand chart, there is a bigger cumulative impact on the non-GAAP metrics as we need to remove the historical recognition of a sale that had not been settled at 31 March, in essence, backing out 596 units that have been recognized as a sale but had not been completed at that point. It's important to recognize these are non-GAAP measures and no impact on our financial statements. There's a little alternative to them to go through this process as we achieve the transition to cash. We're much more comfortable now that we're recognizing our ORAs on a cash basis. In terms of new sales of ORAs, in the half, we achieved a 2% growth in independent units and we only sold 55 on the service side, were down 23% in part, that reflects what's become available. Average unit prices independents were flat and service were up with reasonable pricing performance on our new stock. In terms of resales of ORAs, as you can see on the chart, this is predominantly a New Zealand story given the younger age of the Australian portfolio. We'd expect to see over time the orange bars here increase as that portfolio matures. In terms of volumes, we delivered a strong half, independent units were up 2%, serviced were up 16% as the portfolio matures. Average unit prices were flat despite the challenging market, as I talked about before. However, whilst we are achieving flat prices in this tough environment, that does compress margins and you're seeing at minus 15% there, that compression has accelerated into the serviced area given the shorter tenors. In terms of where are we with stock. We delivered 388 new RV stock in the period. We ended up at the end of the period with 182 more unoccupied. Of that, some 164 are new units. All of the growth in our unsold stock is a new serviced apartments. In the top right chart, you will see the impact of delivering the BO1 at Miriam Corban, James Wattie and Keith Park, as you're aware, the serviced departments take 2 to 3 years to sell down in these new villages given we have fewer health issues amongst our initial IA occupants. As you'll see in the resales later -- earlier, sorry, once the village is full, that product sits comfortably in our continuum of care. Outside of this category, opening and closing stocks are pretty similar. Albeit overall higher than we'd like to be at 12% vacancy, even though 5.5% of that is contracted. We see a real opportunity to turn this into cash as we improve occupancy. Additionally, of the 1,156 available, or unoccupied, 166 of those, we also own given early payouts. So the gross cash release will be greater. In terms of our development, a quick update. We delivered 667 retirement villages and aged care beds in the first half. 79% of those delivery were the 3 main buildings and 142 independent units. We do need to mark here that we have achieved some significant milestones in the first half. We opened those 3 main buildings of themselves are significant exercises and staffing up in the occupational readiness and testing. The Hubert Opperman Village in Mulgrave opened to its first residents in August. And a Miriam Corban village was completed and has been removed from our development pipeline. So we now have 9 sites under active construction, with 2 more expected to be completed in the second half, both at Bert Newton and at James Wattie. We'll update our capital recycling projection on an annual basis, and we'll be doing that again at March. Just want to point out that is an unusual delivery mix that we've had in the 6 months. We've got 95% in New Zealand and 80% in serviced and care. In terms of the New Zealand pipeline, most of that's been covered. As Rob mentioned, Newtown land settled in September. We're still holding Kohi and Karori sites for sale and we are in discussions on Karori. On the Australian side, post balance date, delighted to say that Bert Newton opened the BO1 building and the village is now completed, a fabulous asset in the portfolio. Quickly over the sites themselves that we had over the course of the year, all 10, Miriam Corban as I touched on, is completed. Keith Park, the key facility is filling up well and we've pushed a button on stages 8 and 9. In terms of Patrick Hogan, the townhouses are filling up, albeit fair to say that it is a competitive environment with 2 other offers nearby. James Wattie, we opened a BO1, which is a great building. We will finish the site and be off it by the end of the financial year. Again, a great facility in the Bay. In terms of in Christchurch, the key unlock for us for this village is to deliver the much delayed BO1 in April, May 2026. In terms of Northwood, we've continued to build our townhouses. We've got concrete on the ground for the main building, which will be 2 years in construction. Turning to Australia. You'll see the big Stage 4, sitting there at Nellie Melba. We expect to complete that in the middle of calendar next year. That will complete that site. We had some surplus land to the side. You can't quite set us down the bottom right of that picture, we've now gone unconditional at $9 million after balance date. At Bert Newton that's a picture of it at 30 September. That's now complete. You can see some diggers, et cetera, that's now complete and opened on the 18th -- the care center opened on the 18th of November. Hubert Opperman, which is our name given to our new Mulgrave village over there that we've welcomed our first residents. You can see the townhouses in that picture. We expect to get 5 and 6 done by the middle of next year. And then we'll be pausing in terms of delivery as we move into the IA towers, which will take some time to bring to market. On Deborah Cheetham, it's predominantly a townhouse village as you'll see down the Bellarine, Peninsula. It's a tough sales market down there right now, second home land tax is occurring in Victoria and there's also a pending Airbnb tax, both of which are having a normal impact on this Peninsula and the Mornington, Peninsula, seeing a wave of houses in both markets, which is challenging for people looking to settle on their houses and move in. That will take some time to clear. But in the meantime, the village is slowly filling. Finally, in terms of outlook. The current environment does remain challenging. Interest rate reductions announced yesterday in New Zealand are positive, but unlikely to have an immediate impact on residential liquidity and pricing. We had been expecting higher second half '25 settlements of new ORAs . But with the market staying tougher for longer, we now believe it's more likely that a number of these will roll into FY '26 deferring cash. In terms of positive progress being made. We continued on a number of fronts. We have implemented the business improvement changes in 2 of those 5 focus areas, which will lower costs now and improve our revenue materially over time. As I mentioned, we have $18 million of annualized savings achieved to date in gross non-village operating expenses on an annualized basis. We're targeting a similar level of savings across the group by the end of FY '26. We are delivering our program of main builds. Three in the first half and one in the second half. It's critical that we deliver these. It meets our commitments to our residents. It creates continuum of care, which helps sustain our occupancy and overall add significant value to our villages. In terms of the guidance, in terms of cash flow, we now expect to be negative free cash flow between $50 million to $100 million as new settlements are deferred into FY '26. The previous guidance had been targeted positive free cash flow. So obviously, from a timing perspective, that's disappointing, but ultimately, the stock is sitting there. In terms of capital expenditure, we expect to spend now $625 million to $675 million on total capital expenditure. This is down from the previous $700 million to $820 million. As we look to delay some of our final stages at in-flight projects as we look to manage stock and capital investment. Our build rate, we expect to deliver at the top end of the previously indicated 850 to 950 retirement village units and aged care beds given the strong delivery in the first half. Before I open to Q&A, I'll hand over to Naomi for a few comments.

Thanks, Dean. It's great to be here in time for our half year results and have the opportunity to hear from our investors right at the start of my time with Ryman. Over the last 3 weeks, I've been visiting a number of our villages and offices in New Zealand and Victoria, and have been able to see firsthand the passion and commitment our team members have to providing exceptional care for Ryman residents and the very special communities, our staff and residents together create at each of our villages. As Dean has talked to, we are in a period of change for Ryman and a challenging external environment for the property market. I do believe that there is no better time for us to make Ryman a strong, efficient and competitive business, that's resilient through the bottom of the cycle and can grow sustainably to meet the future demand that we know is coming as our older population grows. While at the same time, keeping what's special and unique to our business, which is putting our residents at the center of everything we do. And I'm looking forward to working with all of our team and our residents, investors and other stakeholders as we take Ryman forward and continue to build a strong future together.

Great. Thanks, Naomi. Maybe I'll hand over to the operator for questions on the phone, and then we'll ultimately go to online questions. So back to you.

[Operator Instructions] Your first question today comes from Arie Dekker from Jarden.

First, just thanks for the significant openness and transparency that you guys are showing as you adjust a large number of the approaches from the past. And I'd also just sort of say it's really good to see the benefits coming through from cash flow from existing operations, which are clearly showing some of the challenges in the business that we previously had in with the underlying profit focus. I'll just start on NTA and a question about the balance sheet and value. I mean, obviously, we've seen you need to restate it down again this year. So first, just a question of clarity. The fair value movement that did come through on the restated basis for the half. Are you essentially saying this pretty much will arose from the benefits of increasing DMF from 20% to 25% to 30%, albeit with the value of making some negative adjustments for discount rate unit pricing as you show it?

I'm happy to have a go at that, Rob, you can follow up. In terms of that Arie, no. In terms of that increase in valuation, there were a number of things. Obviously, part of it -- they put the -- both put the 30% in. They then moderated discount rates and growth rates. It was -- we had visibility on the New Zealand side and the net impact from those changes just on the DMF is about $90 million. And given the size of the Australian portfolio was the value didn't lay it out in that way for us, it will be obviously a much smaller part than the $90 million. So out of the $280 million, there's a significant amount of just new valuation building into the portfolio as we walk forward.

Yes. And so I mean, clearly, in the past, you would have -- and I'm really glad to see you move away from this would have highlighted, realized fair value movement went to development margin, it looks like development was negative. But to your point on that Australian visibility, can you just give a bit of a view on how the company and directors would characterize the valuation of managers' interest? And in particular, is it -- is it a black box? Or is it something that you're pretty comfortable that you've got both transparency and granularity on what's driving the value changes?

Yes. So we get the value represents to the Audit and Risk Committee. And so we have time to -- they present the valuations, comprehensive reports. We see it per village. It's a detailed by resident calculation Arie as you're probably aware. And so yes, we have a robust discussion with them. So yes, but ultimately, it's the evaluation. I think. In the past, we could be accused of reaching in. We'd be purposely saying that as an independent valuation now. And ultimately, we need to trust that.

Just on the interest, and you've been clear, I think, on the changes you've made, but I just want to check my understanding of a few things. So the expensed interest was -- I'll use round numbers, about $50 million, so $100 million annualized. You're saying the capitalized interest now is much more aligned with active development. So if I use that -- if I used say, 6% interest cost on the $100 million of annualized expense, that would give me circa $1.7 billion of debt on which interest is being expensed. There's about 600 units of new stock that's $500 million, circa $500 million land for development, circa $500 million, both of those, I understand, interest is being expensed on. So would I be right then assuming that the remaining $700 million of debt is essentially not backed by either active development, new stock or land held for development?

There a lot of numbers you just rolled off their Arie. Can we come back to you on that? I can see where you're going, but I don't want to answer that on the fly.

Yes, okay. That would be good because I guess on my math there, then the circa, like I said, $700 million of nondevelopment, bad debt or inventory on the new sales side. Now I appreciate you also have buyback stock and some other things. But I mean, do you have a view yet in terms of the capital structure on what sort of level of debt you think you'd be happy to hold bearing in mind also that there's probably some further negative recycling that will be added to that $700 million?

Well, I think we're at a bit over [ 2.5 ] now. I think as we've said previously, we've got a plan to, a, make sure going forward that the cash flow from existing operations is positive. So we're not building that whole bigger, Arie. And I think we've got some positive signs there in the result, preinterest in terms of the villages are creating positive cash. We think about the changes in DMF and weekly that will only help that over time. So we think we can start paying down some debt ourselves. We know we need to recycle what is the in-flights, and we believe there is significant opportunity to release cash there. Can you see a path to under $2 billion, over the next 2 to 3 years? We believe we can. So I think that makes us feel a lot more comfortable and under that level. And then we need to think about how we fund new development.

Okay. And then final question just on the recycling. And I think I understand why you're going to do an annual update on that. But can you just give any directional guidance on whether the recycling outlook is traveling better or worse? And I guess I'm just sort of pointing to the impact of -- it looks like you're sort of indicating new sales is slower, clearly, and also suggesting though that the lower CapEx is largely timing or deferral related?

Yes. And I think it's the -- kept recycling is a pretty simplified number. There's no time value in that. It's not like it's an NPV. We had signaled we thought the projects were going to be about $500 million still over their life they're $600 million to come. But we're looking at also at overheads and our reorganization. So it's kind of premature to see where that will fall, but we'll give an update at the full year.

Your next question comes from Bianca Fledderus from UBS.

Firstly, just following up on Arie's question on the restatements, so in terms of your accounting changes and as a result, some restatements, would you say all of these changes now happened? Or are there any other line items you're looking at or changes we could potentially expect in the future?

Yes. Look, I think you can never say you're kind of done. We've got a new auditor coming in. So we'll have to work through that with them. I think as Rob signaled, the capitalization piece is obviously a work in progress. We're taking overhead down. We're slowing our development, but then we're looking to bring development back up. How do we think about capitalization of overhead in particular. So that's a work in progress piece. So in terms of the main outstanding pieces, I would say that's probably the key one for us to land at the full year. But as I say, there's been a lot of change Bianca as you said. We apologize for the kind of noise in the results, but you can't go from A to B without that occurring. So I do think we're near the end than the start.

Okay. Yes, that's fair enough. That's helpful. And then a couple of questions on Australia. So you mentioned the impact in Victoria and settlements because of the new taxes there. Could you talk a bit about the impact from construction cost inflation in Victoria as it doesn't sound like it is stabilizing in the same way we see in New Zealand. So just wondering if you expect any sort of potential impact from that on your current projects and margins?

Yes. I think the land tax piece feels -- it's more impactful in those regions where people have their second home, so whether you're going down the Mornington side, where we don't have an active development or down the [indiscernible] side where we had the Bellarine. So I think that's really -- that impact is quite focused in on Deborah Cheetham. So I don't think it's a broad-based Victorian issue for us. In terms of construction, yes, it's a fair observation being the steam coming out on the New Zealand side, but Australia, whilst it's definitely moderated from the COVID period. We're still seeing construction inflation.

Okay. And then on a different note, it does seem like capital partners are becoming more common in the retirement village and net lease space in Australia. Is that something that has come up in conversation at all for your Australian developments?

No. No.

Okay. And then last question from me. With the Board refresh, has the topic of dual listing in Australia come up recently?

No, no. I think that we're very focused on the here and now. We've got a big transformation underway. We've got new directors. We've got a new CEO. We've got a new leadership team. So I think we've got -- as James would say, we've got plenty of wood to chop and a lot of opportunity. I wouldn't discount that in the longer term as our portfolio rebalances over time, I expect. But I don't see that Bianca in the immediate future.

Your next question comes from Aaron Ibbotson from Forsyth Barr.

Thanks for the increased transparency just to reiterate what Arie said. A couple of small questions for me. Firstly, actually, just on maintenance capital or maintenance CapEx guidance. I think you put out $85 million to $95 million. That was a bit lower than I had in mind and also what you've done sort of historically, as we look at the trend. Is this sort of a one-off for this year with lower IT systems? Or is this more of a sort of broad-based review of you sort of see steady state or whatever inflation adjusted maintenance CapEx coming in going forward?

Yes. I think there's a couple of buckets here, Aaron. I think in terms of IT, that always tends to be a bit lumpy. If we look back, the prior year, there had been a fair few things coming through in terms of the myRyman app, et cetera, and some investment in a software package to support our home care business in Australia. But in terms of our -- the village side, I kind of have broadly $55 million, $60 million in my mind. We know the refurbishment side is averaging $30 million, $32 million, which is around $30,000 a site on a resale piece. So some years are going to be slightly under. Some years you're going to be slightly over and it probably be dictated more by when we have our next IT project to hand Aaron. So we're kind of dealing with 5s and 10s there, which I don't think we're doing anything directionally different at this stage.

Okay. And then just on your cost out, I appreciate you said you've done $18 million sort of on a run rate basis now, I guess, and then targeting another $18 million for the end of FY '26. I must admit that I thought if this is gross numbers, which I assume you're talking to, I thought there potentially could be more. So is this -- is this something you or Naomi is going to look at? Or do you think this is a relatively definite sort of end result and that there's not much more to cut?

Now I'll hand over to Naomi.

I think Aaron, it reflects the work to date, which Dean and the team kicked off obviously, earlier in the year. So clearly, that work's ongoing. And our view is going to progress as it develops. So I'd expect that selling that we'll be saying a bit more on at the full year.

Okay. And then don't take this the wrong way. But if I look at the management team now, the refresh, obviously, a lot of corporate experience and finance experience. If I look at care specifically, what -- do you think Dean or Naomi, you have people in place that can review the operational efficiency of the care operations more diligently? Is there anything to do there on the costs to get EBITDA margins back to where they were? Or are we just waiting for the New Zealand government to pay more? Or is there any work ongoing to sort of improve the efficiency of the care operations specifically in village?

And I think of care in a couple of ways, Aaron, in terms of the whole compliance, governance piece, that has always really set one level below that [ SET ]. So we have a very competent person leading a large clinical management team across both countries, and that's largely unchanged. And they've all been in large hospital environments either in New Zealand and Australia. So I don't think from that perspective, the quality governance risk piece has changed in the reorg because it's always primarily set one level down. In terms of efficiency, I think ultimately, the answer to expanding our per bed per day margins will be a combination of revenue. And as you'll see in those New Zealand numbers, we're working hard on care premiums. It's around $25 million for the half, $50 million for the full. So we would have the largest premium book in New Zealand. We think there's continued opportunities there. But we also I think the industry without premiums is struggling. And so I think I will watch with interest, and I'm sure Naomi and the team will -- in terms of Te Whatu Ora review. But ultimately, I think that's going to move to what we did in -- what you're seeing in Australia, which is more user pays rather than government allocating significantly more to it. So that's on the revenue side. I am optimistic on that, but it will take time. Otherwise, you will see big closures in New Zealand, particularly in the not-for-profit area, and that's not what the government want to see. So I think there is some tension there. But they do want to see expansion in standard beds, and we're primarily in a larger bed base than that. But I do think we'll benefit from just general funding improvement. And thirdly, in terms of our cost side, yes, that's definitely something we need to look at. Again, that's balance between great care and great financial performance. I'm expecting Naomi will have a close and hard look at that with the team. So I think ultimately, it will be a combination of the 2, revenue up and hopefully more efficiency Aaron.

Just final very brief question from me. I appreciate you said that it would take or should take 2 to 3 years to sell down newly opened service apartment buildings. I'm just curious with occupancy being very high in your mature villages, how -- what's the early indications of your newly opened care centers? Is there -- how are they filling up relative to expectations? And how long do you think it will take to get the recently open care centers to reach near or full occupancy?

Yes. No, good question. They're all improving on a monthly basis. There's a range. Keith Park's filling faster than what we thought. So we invariably progressively open blocks of those, we don't just immediately open 80, so whatever the number is, we'll progressively do it. So we're opening up faster than what we thought there. Miriam Corban is going well as well. slower at Deborah Cheetham. Again, it's a tough environment down there. It's a competing market. So I think have work to do on the care center there. But if you think of it from a portfolio perspective, the mature stuff sitting at 96. A number of our villages sitting at 99, 100. So I'm kind of quite comfortable with that piece. And there's really no worrying signs that we'll get the balance of this stuff to 90%.

Your next question comes from Stephen Ridgewell from Craigs Investment Partners.

It was good to see pretty solid settlements during the half against a tough backdrop. I'm just wondering with the change in the fee structure from October 1? Do you think you saw a pull forward in demand during the period, particularly late in the period as residents are rushed to beat the price rise that might have benefited trading performance in the first half?

No. I think if anything, we pulled forward probably some sales Stephen, but all the accounts now are on settlement. So we didn't pull forward a settlement. We would have pulled forward some sales. So the financial cash settlements in the first half won't have been influenced by that. They were things signed up months and months before. We saw some sales contracts pulled earlier as kind of the lead turned into a contract maybe quicker than what it would normally. But yes, I don't think we benefited -- well, I know we didn't benefit on a cash settle basis in the first half.

Got it. That's clear. And I think the data you provided earlier that you're achieving that you DMF structure without discounting prices is encouraging. I guess I just also wanted to check in, though, whether you've -- the team -- the sales team have had to offer an increase in nonprice incentives to help get sales over the line since the new fee structure has come in? And then just, I guess, some commentary around sales run rates? Are they holding up post the price changes, the price seems to be holding up, but are you seeing sales run rates hold up at this point? I'm just conscious of the downgrade we're seeing obviously the second half expectations [ today ]

On the incentive side, it's fair to say and you'd know this as well, I suspect anecdotally, there are a lot of incentives in the market at the moment. The industry has brought on stock in New Zealand, in particular, a lot of it at the same time, whether that's in Auckland, whether that's at Orewa whether it's at Cambridge. So we are seeing people wanting to tune stock into cash. So there are definitely incentives around settlements, whether that's dollars, whether that's moving packages, et cetera. So that has stayed high. So it's a bit hard to unbundle. I don't think we've changed materially. We had those anyway. We've still got those now. Certainly, our incentives are very much focused on selected stock and turning that into a settlement. I think that's the first point. So it was there anyway that just the markets like that at the moment, Stephen, at this point in the cycle. In terms of our sales run rate, October is invariably quiet for us. It's been building back up. That, in part, led us to lower our full year cash flow guidance. But by and large, we've got the stock to achieve most of that already and the sales commitments already to achieve that. So it's more that we're just seeing it's harder for longer, Stephen, I think, so people just are struggling to sell their own houses. And if you dial back 4 or 5 months, to say that we thought it would still be like this December, January, February, March. I think there were a lot of commentators who thought things would be starting to improve by then. And I think in really, things have probably got tougher since then. So I think it's -- we've got the stock. I just think it's on that kind of demand, settlement side. We've just got a bit more sanguine. So it's a pity it's rolling through the financial year-end, but we have got the stock, it will turn up FY '26. I just think it's stayed harder for longer.

No, that's fair. And maybe just one last one, just one of clarification. As you said, there's all of your information out there today for the market to digest. But just on the cash, free cash you get a $50 million to $100 million. That's the updated number for the year. I'm just trying to reconcile just that you've downgraded sort of CapEx to $625 million to $675 million, but you also upgraded deliveries to the top end of the $850 million to $950 million range. I'm just trying to reconcile those changes. Are there some projects that we're going to fall over the -- just the -- over there into the FY '26, which you can actually complete before the year-end? Is that what's going on? And maybe slowing some of the front -- the earlier projects as interested understand that dynamic?

It's a very good question, Steve, because we ourselves look at there's almost conflicts. It looks at the primary face like the 3 guidance points are conflicting with each other. So you're kind of going to -- we've got to peel that back. So in terms of the cash flow reduction, that's primarily pulling down the second half settlements. From where we thought we would be to where we're now expecting to be. That's primarily driven the 50-plus more down in free cash flow, which we're hoping will just -- well, we'll still have the stock at year-end. It will roll into the next year. In terms of the build, they've achieved it, and we think a little risk in achieving that full year forecast now given where we are. And so well, how does that coincide we're spending less money. I think you've got to look down below that BO1 building stuff, which we're completing into what's happening everywhere else outside of our BO1. And it's fair to say we're slowing some of those pieces as we do want to get this new stock down and sold. We just need to balance that capital expenditure, Stephen, with the stock. So it's that layer of stuff that wasn't BO1. We're effectively just slowing down and particularly in places where we've got some stock, for example, in Deborah Cheetham.

Your next question comes from Nick Mar from Macquarie.

Just following on from that. The previous sort of target of deliveries for '26 and '27 combined, will that change given that slowdown? Or is it just more back half weighted?

Yes. No, that's a logical next question, Nick. And I think we continue to look at that build rate. We'll give you an update at the full year. We've certainly slowed some of that development, which I think will likely see -- unless the markets change, we're all optimistic they change for the better. We're probably going to see some completions move from '26 to '27 and potentially '27 to '28. If markets improve, we may well bring some of those back faster. But at this stage, we're just being cautious. I think we'll probably see some deferrals.

That's clear. And then in terms of the buybacks that's still lifting. So one of the discussion was the sort of HUD reviews now being pushed out, which would have possibly kind of mandated time frame around that. Are you thinking of reviewing your sort of 6 months buying back in New Zealand? And if so, do you have an idea of what you might be [indiscernible]

Yes, that's certainly a topic of conversation, which we'd held off pending that HUD review. But as you've seen, Nick, effectively pushed that down the road because we were going to be guided by that and see what everyone else is going to do. So it's now going to come back on the table what do we want to do as of our own right. We have the right to not pay the capital but to pay interest. And ultimately, the 6 months is self-imposed. It's not a contractual term. It's a kind of a customer practice terms. So I think it's definitely something we'll look at. It's about $166 million of stock. We now -- we've always owned but we effectively hold the ORA ourselves. So when it comes to new sales, we're very focused on those because the cash impact is the same as a new sale, effectively gross into us. So we're watching that, it went up about $12 million year-on-year. So it's creeping up. It's not drowning us. But yes, I think we will watch that. It's -- at the end of the day, we'd probably rather pay interest and pay out the capital some. So yes, it is certainly back on the table now that HUD hasn't kind of resolved for the sector.

Yes. That's helpful. And then are you looking at land at all at the moment? Or are you sort of pretty reluctant to put any more money in the ground?

Yes. It's -- we've got 10 in the bank now. We've got 3 held for sale, where we're down to 2 held for sale, being Kohi in that. It's -- so it's not like we're short of land at the moment. I think if we had 5 in the land bank, we'd probably be more active. But 10 in the land bank, ultimately, I think we'll probably have to recycle some of that if we wanted to buy some new land and go longer. If we start rebuilding back up the pace is to be determined, but under a lot of that modeling, we've got enough land if we're going to use all those sites to the end of this decade. So I suspect as Naomi gets under the -- have been under the table, they're beginning to look at is do you want to recycle some of that 10? Are there better opportunities? Unfortunately, you're buying and selling in the same market, and it's tough to move $20 million, $30 million blocks of land.

No, that's good. And then one last 1 just in terms of the stock you have across both the sales and resales outside of obviously the service departments that have just come online. Are there any particular buildups of IOUs or as [indiscernible]?

No. There's a couple of villages. We've got a better buildup at Deborah Cheetham, which when we started that these taxes weren't on the table. So we've just got a -- it's 1 out of 49 villages. We'll just need to steer at that. It's filling, but it's just filling slowly. It's not like it's going backwards. It's just going to be more patient across the portfolio. We've got little pockets here and there, but there's not big, big blocks Nick that concern us when you take a portfolio-wide view.

Unfortunately, that does conclude our time for phone questions. I'll hand back to Mr. Hamilton to address any online questions.

And there are no online questions, thank you. I'm conscious we've covered a lot today, everybody. You look through this pack of 60-odd pages is just an enormous amount of disclosure. So hopefully, that's useful to you all. Obviously, any follow-ups, you can come back to any of us. Probably Hayden in the first instance, there's a couple of follow-ups we need to take up. But we do appreciate your time. And look forward to meeting with the number of you over the next couple of days. Thank you very much. Have a good day.