Vistry Group PLC (VTY) Earnings Call Transcript & Summary

Good day, and welcome to the Vistry Group Trading Update Conference Call. At this time, I would like to turn the conference over to Greg Fitzgerald, Chief Executive. Please go ahead.

Thank you, Cecilia. Right. Good morning, everyone, and thank you for joining us. Earl and Graham are also with me. So let me just give a short introduction, and then we can open up to Q&A. It's been an incredibly positive start to the year, where we have seen consistently strong demand across all our areas of business. The transition to the new Help to Buy scheme has gone down well, and we are seeing good demand for the new product design for first-time buyers only. Our average weekly private sales rate has stepped up to 0.75. The last 4 weeks, it's been 0.82. And that's way higher than the historical levels for Bovis or Linden, and 21% ahead of pro forma rate of 0.62 for the group during the same period in 2019. Obviously, 2020 is not really relevant. We've also seen some improvement in pricing across and all of our business units. And as you would expect, we are now actively managing the balance between sales rate and selling price. Our sites are operating well with production at least running at pre-pandemic levels. We have seen some modest increase in build costs, that have been relatively well protected, as we said before, and this as a result of the new supply agreements negotiated with the formation of Vistry Group, many of which are 18 months plus deals. We're very focused on strong supply chain relationships and well-controlled procurement, and this is benefiting us during this period of high demand. The land market is attractive, and we continue to secure new development opportunities that at least meet our minimum hurdle rates. There is, as we said before, less competition for larger sites and as an enlarged group with 2 Housebuilding brands and a fast-growing partnerships business, we are well positioned to maximize this opportunity to the higher value we can now achieve from these larger sites, and we've got 2 or 3 examples of that in the first 3, 4 months of this year. Strategic land remains a key land source, and the team has made good progress in year-to-date with a very strong pipeline of opportunities soon to be agreed. As planned, Partnerships have stepped up its land investment, deliver on its strong growth targets for its high-margin mixed tenure business. The positive performance is mirrored in an improved cash position. We are now expecting average month-end debt for '21 to be less than GBP 150 million, and that's down from our previous target of less than GBP 200 million. And we expect to deliver stronger -- much stronger year-on-year net cash position as of December, which was GBP 38 million, if you remember, net cash in December 2020. So at the moment, we're looking at broadly kind of a breakeven for the half year, which is way up on what we expected at the start of the year, and we're expecting to be somewhere between GBP 150 million and GBP [ 200 ] million in cash depending on a number of things, maybe even a little more at the year-end in December, again, way up on what we expected. On dividends, we are delighted to resume payments with a 20p final dividend for the year. Looking forward, we will maintain a strong balance, whilst adopting a progressive dividend policy, strong balance sheet that is side, whilst adopting a progressive dividend policy moving towards a 1.75x dividend cover over time. So in terms of the outlook, we have further strengthened the forward sales position. Housebuilding forward sales totaled GBP 1.5 billion and the mixed tenure are up to GBP 444 million. And that equates to 81% of our forecast Housebuilding and mixed tenure for the year now secured, which is probably stronger than I have ever known. Partner delivery has more than GBP 800 million of forward sales with 92% of this year's revenue secured. Again, I've not been in that position before. Partnership is firmly on track to deliver a significant step-up in completions to around 6,500 units and that's 200 more than our previous guidance, and we continue to expect to see an improvement in gross margin to around 22%. Vistry Partnerships is making excellent progress and is very much on track to deliver its targets of GBP 1 billion of revenue and and OPEBITA margin of at least 10% in the full year '22. Delivering high-quality homes and excellent customer service remains a top priority for the Group, and we see that we maintained our 5-star status and continue to make good progress with the Group now achieving scores ahead of the levels we achieved in 2020. And every -- all 4 of our divisions, Partnerships and the 3 Housebuilding divisions are all growing at 5% currently. Putting it all together, we previously guided to an adjusted profit before tax for the year of at least GBP 310 million. With the strong trading to date, our increased expectations for the Housebuilding completions in the year, we are now expecting adjusted profit before tax for the full year to be around GBP 325 million, whilst importantly, maintaining our expectations for full year '22. That's it. Thank you. And we'll now take any questions.

[Operator Instructions] We will now take our first question from Will Jones from Redburn.

A couple from me, please. First, just maybe around the price and cost equation. Perhaps you could just give us some numbers around the comments of modestly higher in both cases? And within the build cost side of the equation, are you starting to see labor move as well? Or is that more concentrated around the world of materials?

Yes. Let me answer that first and then -- we're seeing a range of prices between 2% and 5% rises, so the average would be between 3% and 4% since the 1st of January. On Build, we would agree with the other housebuilders that we've [ led ] with interest over the last month or so. Inflation is running between 3% and 4% of Build costs. We, as I spread out there because of the arrangements we put in place with our supply chain back in January, February, March last year, which in a lot of instances were for 2 years, but let's say on average, 18 months, we're seeing about 2.5% to 3% Build inflation and that is across the board. And yes, some of that is materials, with the biggest movement in materials being timber and steel and plastic. But yes, we are starting to see some movement in labor. Basically, if you just go back even probably 2 months, imagine that all housebuilders were happily building away. And then with the strength of the market, I think we've all - as we have -- we're trying [ to build ] more houses than we first expected. And that undoubtedly has put a little bit of pressure, not that we can't deal with it, but a little bit more pressure on everything with regards to Build. So today, it's not about sales. It's about building and your build teams, technical teams, procurement teams and commercial teams need to be on the top of their game to ensure smooth deliveries of all materials, putting us higher [indiscernible]. If you're not at the top of your game, and you leave something out that will cause you issues, which at the moment, we're getting around, but then we don't want too many of those. And there was another one, Will?

Yes. The other one was just around sales rates. I get maybe a few sub questions within it. But just I guess, firstly, is there any difference in that 0.75, there's notable difference between housebuilding and mixed tenure. And just, I guess, more generally, whether it changes your view of what you think you can do either this year or sustainably in terms of how you're delivering that? I think going back to the old guidance, if I remember, it was set more at around the 0.6 mark as an expectation for '21. I guess if you end up doing something more like 0.7, which looks like it's on the cards, do you come back with other upgrade? Or is it maybe something for the order book? And just how that all comes together, I suppose?

Yes. I would, first of all, say that sales at 0.75, which is from the 1st of January, which takes into account the first couple of weeks which are always slow. For instance, the last 4 weeks have been 0.82. That's across the board. So Southeast, West Midland and Partnerships are all selling particularly well. So there's no star performer as it were, no lag or that everybody is performing well. If anything, at the moment, I am trying to -- for instance, are now getting an analysis of all the reservations, and I'm going into it in an awful lot of detail. If I see anybody, why are you giving away a discount? Why are you giving all incentives? Why are you selling a unit that's not going to be complete until Christmas? If all of those questions are being asked because I think the market is there not to give too much away. So you're right, 0.6, 0.75, I would be disappointed if we achieve the guidance that we've set out today. So we are in the game, as you know well, under promise, over deliver. So we said [ 3.10 ]. We're now [ 3.25 ]. We'll be coming back to the market in the first week of July. And then we'll be coming back to the market again in September with the full year -- sorry, with the half year results. So the intention is little and often. And yes, we're happy with where -- what we've said today. But I think from a personal perspective, I would be disappointed if that's where we ended up.

We will take our next question from Chris Millington from Numis.

Wanted to just focus a little bit from Will, and really the rates at which you can build against these very strong sales rates. And you did mention before, Greg, you hope for that step-up. What do you think a sustainable rate is relative to the level of build you're able to manage at the moment? That's the first one. I don't know if you want me to take them one...

Yes. I'll answer that. I would say we can build ahead of the 0.75. But I think, at 0.82, which is what we've seen in the last month, I would say that's about where we're at. And I think that will be -- it's only going to get harder, I believe, to build as we go through the rest of this year.

But are you paving any good place on both at the moment by...

We're definitely in a good place on build. I mean we've got -- we pay the site managers. We've got some great teams. If you've been out on site for the last 2, 3 weeks as I have been constantly -- there's good morale on site. But as I say, gone are the days where I should have ordered 12 rather than 11. I just need to get an extra 1. That extra 1 is now a problem. So you've got to be correct. You've got to give huge visibility. So we're now actually with our supply chain planning out to Christmas and then we need materials to come through. You've got to have good relationships with your supply chain. So we are -- for the moment in time, we are experiencing things at a local level, but nothing really is coming through to me and my group. So we are in a good place. But I think we're in a good place because we're well organized. I think the point I'm trying to make is, if you're not well organized, you're going to start to struggle.

Understood. Very clear. Next one was just quickly about outlet numbers again. It does look like you've been quite busy in the land market. I mean do you think you can hold outlets at these sort of sales rates? Or what's the trajectory likely to be over this year and next?

The outlet numbers, we're in the 170s at the present moment month. We think that will go up 3% or 4% in the second half of the year. So Partnerships outlet numbers runs, as you would expect it to go into 2022. So Partnerships numbers start rising in the second half of this year. And Housing, we're in the 140s at the present moment time, and so that rises slightly. But not huge. But we do have more outlets in the second half of the year, which will again -- is one of the reasons why we're expecting a couple more. So if you like, Householding currently is 145; Partnerships, 34; so total 179. And we would expect the average in the second half of the year on housebuilding to go to 148; Partnerships, which is a big leap to 45; so the total goes to 193 from 179 where we are today.

That's great. Really clear. And the final one I wanted to ask is just on dividends. What needs to happen to get you down to that 1.75x number? Is it just a passage of time and getting over the hump of investment what you're doing at the moment? Or is it based on a year-end cash basis? Just wondering where you're thinking is...

Well, I would like to -- I mean there's other things in the mix as well. So we've got a strategic meeting coming up in September. On the agenda will be on share buybacks, on the agenda for dividends as well as a number of other things. All I know is that the cash is -- situation at the present moment in time held by things like part exchange. I mean we as a group now, I've got 7 less units going through today and Bovis had an isolation in 2019. We've only got 1 unit over 3 months old. So the cash is -- for a much larger group, is less than it was for Bovis. Wherever you look at it, cash is being managed incredibly well. The land market, and particularly for larger sites, remains pretty good. I think there's the odd outcast. But generally, it remains pretty good. And the deferred payments that we've enjoyed for a number of years now continue to come. So all of that is helping our cash position. So I've said it in the opening remarks, cash position of GBP 150 million to GBP 200 million, it could be above GBP 200 million. We're just trying to temporary run expectations. But -- so I would say on dividend, Chris, all I can say is the quicker we can get to as a shareholder myself, 1.75, the better. And it will rely on the outlook, how we think the market is going to perform? What's the land market? And of course, as you said, the cash position at the period end and the cash position at the half year. We can see that already is against our budget, well over GBP 100 million better than we were expected. And we are looking pretty good. We're looking at numbers that I just checked myself, and I'm relatively optimistic for the full year. Long answer, sorry, there you go. So cash outlook on sales and the land market with regards to deferred terms, but the quicker we can go to 1.75, we've never put a time on it, the better.

Our next question from Dean Grant from Bank of America.

Congratulations on the results. I've just got 2 questions I think from my side. The first one is on the Partnerships business. And obviously, the target for FY '22 is to get to a 50-50 split in terms of the -- for revenue. I just want to understand, maybe going into 2021, what is the outlook for the year in terms of mixed tenure versus partner delivery, the split there? And then maybe a little bit of color looking at the partner delivery business in terms of the split between your land-led and contracting?

Okay. On the -- first of all, I would expect partner delivery to be kind of 60% this year, 40% mixed tenure, as you say, rising to 50-50 next year. And I would expect margin in Partnerships, which we've said 10% plus for 2022, we had 8.7% in the second half of 2020, if you remember. So I would be disappointed if we weren't over 9% margin for this year. And on the land-led, I think the contracting part of the land-led is probably 60% to 70% of what we're doing at the moment with 30% to 40% -- sorry, contracting having clear pricing, 60% to 70% with land-led; partner delivery, 30% to 40%. And we've got -- just for everyone on the call, we've got Partnerships are presenting again to [ -- particularly as relates to commerce a week to month. ] So that will [ mean more land ] on that.

Perfect. Very clear. And then the second one is just on the land market. I was just wondering if you could give a little bit more color there. I know you've had GBP 145 million in land acquisitions in the Housebuilding business. Just maybe going into the end of the year, I mean how much more do you have to go there? And perhaps just what the outlook would be there?

Do you want to take that one, Earl?

Happily. Yes. So look, in terms of the land investment so far this year, very pleased [to secure more than that ] were completed. Very active in the land market. And as Greg mentioned, upfront, particularly on those larger sites where we definitely feel we have a more unique position now as Vistry Group, so looking to continue that through the second half. And look, it's a very strong market at the minute. So looking to keep that investment coming through. And certainly, one of the things that will potentially influence the cash number at the end of the year is the amount of that land investment. So that's coming through. We're very happily buying on deferred terms still. And particularly on those larger sites, some of those land creditors that come with it are out somewhere between 3 and 6 years, hence. So good way of funding our land investment.

Yes. And just on the land, I would also say, we are definitely not just looking and buying larger sites now. But Linden wouldn't have been able to do it because of the balance sheet within Galliford Try. Bovis wouldn't have been able to do it because we wouldn't have made the return on -- could have got there on the margin, but we wouldn't have made the return on capital with the 1 outlet. So not only are we looking at larger sites, which are definitely less competitive, I mean only on Thursday of last week, and this is my point, we bought a site between Reading and [Sunderland]. Prime, prime, prime area, just under 300 units, over 20% -- 26%, sorry, gross margin and the return on capital, again, over 25% on minimum hurdle rate, purely because we were able to brand the site. So we've got Bovis, Phoenix range and the Linden collection on the site. That is the key for us, and it's great. That was one of the strategic rationales of putting the deal together. And it's absolutely coming through in stage. So we can see our sales rate. We can see that we're selling Bovis and Linden on the same site in the same company as opposed to it being Bovis and Linden 2 or 3 years ago as a different company, and our plan is actually coming together and it's working better -- much better than we thought. Even the sales advisers absolutely love the differential, they're busier and they're making more money. On top of that, we've also now got our Partnerships business working with the Housebuilding business in Bovis and Linden. We've already bought a huge site at Great [ Hammond ] for 1,500 plots, and that was with Partnerships, taking 500 and the Housebuilding business taking 1,000 signature brands, Linden and Bovis. We're investing in another absolute prime site where we expect to exchange contracts in the month. Again, that's Partnerships and Housebuilding. And on that, the local authority that we're going to go into joint venture -- are Partnerships going to go into joint venture with -- are actually going to fund the entire land acquisition, which is nearly GBP 160 million. We won't be putting -- so the return on capital, for instance, on something like that is about 90%. So it's absolutely phenomenal. So the land market for us, there are some hotspots around that, but the culmination of being able to dual-brand and the culmination of Housebuilding and Partnerships and working together, and that's the big thing, working together. And that's probably taken us 6 or 7 months during last year for Partnerships and Housing to be working together at the grassroot level, open and honestly and transparently. But we're there now, really are starting to pay dividends. And we would expect the land creditor position at the half year to be kind of around GBP 375 million with that at the same sort of level at the full year. And as Earl said, some of these creditors are not just the 12 months. A big chunk of this is 3 to 6 years out. So it's a very good way of doing business.

Next question from Anastasia Solonitsyna from UBS.

You mentioned unchanged expectations for the next year. So on Partnerships, you gave pretty clear guidance. But could you please remind us what you expect in terms of units and margins maybe in Housebuilding? And what makes you cautious in terms of not upgrading it at this stage? Where do you have maybe less confidence for next year in terms of directional demand or margin progression? And could you remind us if hurdle rate on land purchases is still 24.2%? And yes, that's all my questions.

Okay. On the 24.2%, I'd say that is our embedded land bank margin, that takes into account legacy land as well as land that we've been buying over the last couple of years. So that's the current forecast on the 40-odd thousand plots within the land bank. So that's that. We have been buying and continue to buy with a minimum hurdle rate of 25%, but we are more often achieving a 26% gross margin. With regards to margin progression, we're expecting a 22% gross margin in Housebuilding this year, and we will be expecting in excess of 23% in Housebuilding in 2022, rising to in excess of 24% in 2023. And in Partnerships, as I said, but just to be clear, we're expecting just over 9% operating margin that is in -- gross margin has been not quoted and 9% in excess of operating margin in Partnerships for this year. And just to reiterate how well that's going, Partnerships as part of Galliford Try in the year to June 2019, the margin was 5.7%. So we are well on the way to doubling that with -- and it's been well publicized, it being in excess of 10% for 2022. And I think the medium-term margin that we can achieve as we go forward in Partnerships is between 12% and 13% operating margin. So that's why we're saying a minimum of 10%. And that comes from less pure contracting, but the partner delivery being the majority being land-led and then mixed tenure as one of the previous cause, representing about 50% of what Partnerships does.

Okay. And in terms of units of Housebuilding, how much do you expect -- how many you expect next year and in the near term?

Yes. So we're looking in Housebuilding around 6,500, which is 200 up on where we were at the start of the year. And we are looking for Housebuilding to be modestly at, call it, around 6,600 in 6,700 in in 2022. And for Partnerships, we are looking for revenues of around about GBP 900 million this year, just over GBP 1 billion next year.

We will now take our next question from Andy Murphy from Edison Research.

I got only one at a time if that helps. Can you just talk a little bit about demand on the ground with the changes -- forthcoming changes to stamp duty? Can you talk about buyer behavior? And what are those changes are being seen in the ground?

Yes. So I think the whole of the Housebuilding sector, including Vistry, have got an interesting dilemma as we come to, whether it's a half year as for Vistry, full year for Vistry as it is for some others as we come to end of June, because you will be getting an awful lot of our purchasers looking to capitalize on the full stamp duty gain. So everyone will be looking to complete on June 30 or 31st, whatever it is, as opposed to it slipping into as a purchase of quite often doesn't mind the Friday of that week, which might be July 2 or 3. So I think we've got an interesting time ahead of us, making sure we keep on top of that whilst maintaining our -- at all costs, our strong customer satisfaction scores. So that's the first thing that's Vistry and the sector. I would say over the last month, 90% to 95% of our sales have been for completions post the end of June. So -- and 50% of those have been post the end of September. So just putting that a bit more detail on that. So nearly all of the reservations we've taken with the sales rate increasing to 0.82 over the last month have been beyond June, so that's the full stamp duty holiday. And half of them-ish have been beyond September, where there's no stamp duty benefit or holiday benefit at all. So I think we've been pretty consistent. So the stamp duty holiday has definitely helped, but maybe not as much as the headlines would say. So we're currently selling -- we've got the HALO scheme, which is 50 other housebuilders as well, which is probably up to 41% of our overall Housebuilding sales, which are private, 26% is affordable, about 26% is Help to Buy and 5% -- only 5% is part exchange, which shows you how strong the market is of that 41%; and about 17% is HALO, which is another incentive for -- not just first-time buyers, but another incentive for people to get on to the market who previously weren't there before.

The second question was about shortages. I was wondering to what extent any shortages you're seeing is sort of disruption caused by the pandemic as opposed to any difficulties getting products into the country that is Brexit-related?

Okay. Earl, do you want to take that, you always want to talk procurement?

Yes, happily. Truth is, Andy, not -- we're not really seeing impact of pandemic or Brexit really through our supply chain. I mean other than the well-publicized prices in terms of steel and plastic. But otherwise, in fact, an awful lot is actually U.K. sourced in the first instance. And as Greg mentioned, we're working very closely with our supply chain, and our suppliers is paying dividends. We are having to order and call off and looking farther in advance in terms of, yes, there have been movements in lead times. But we're not seeing a significant impact of those, I suppose, external things of COVID and Brexit.

So I mean just putting a bit more on that, the top 3 pricing challenges are timber, steel and PVC. And the top 5 problematic materials that we're struggling with at the present moment in time, but getting around our internal doors, roof tiles, ready-mix motor, beds and lintels, which all comes back to the demand for steel. So we're -- we got around it, but they are the top 5...

And the final question was sort of quality-related. Obviously, your sales rate were very high at 0.82. I was wondering what stresses that puts on sort of the quality of the output? And how you're coping or dealing with any issues that are raised there?

Yes. Well, we're currently running -- we are -- because of what happened, we -- because of what happened in 2014, '15, '16, going into '17 with Bovis, everyone on the call can absolutely be rest assured, every single day, our customer satisfaction scores across the group come out. They're published. They go across the group, league tables, et cetera, et cetera. For instance, on -- there's an e-mail going out from me today or tomorrow to all of the 23 business unit managing directors basically saying that any unit that hasn't got a CML certificate or a completion certificate by the 11th of June, which is the second Friday of June, has to be personally inspected by the business unit managing director. And all of the business unit managing directors know that if we get a note, for whatever reason, when those surveys go out, I should be going through the file and saying Mr. MD, you signed that off, what's going on here? So we have an instance where it just cannot happen. And unlike at Bovis, this -- I'm not putting too much pressure on the guys to get to where we need to get to for the half year. The half year is from where I'm setting here today is looking relatively comfortable that we're not putting enormous pressure that you've got to get this in, and you've got to get these numbers in. We don't want to go back to the bad old days that we had at Bovis. But it's looking pretty orderly. But we're -- with the Partnerships and Linden teams coming in, they are now fully embedded into the Bovis culture on customer satisfaction, which Bovis -- and it's just you have to go through what Bovis went through. And there'll be repercussions of it to -- you just don't want to go back there. So you become in all these things.

We will now take our next question from Clyde Lewis from Peel Hunt.

A couple, if I may. One, I suppose, on regional differences. I'm just wondering if you are seeing any at the moment, whether sort of urban or semi-urban versus sort of more rural locations or Southeast versus the Midlands versus more...

Yes. We're not really seeing too much. But you're definitely seeing a market whereby any big city, whether it's the Midlands, whether it's Manchester, whether it's London, it's definitely starting to come through with feedback we're getting from our sales teams, "Hey, I only have to go into the office once or twice a week, so do I want to live in London, for instance, or do I need to live in London?" And the need has to be there. If you go back 2 years, we have to go into the office every day. Today, so you don't need to. And some people are saying, yes, I still want to live in London or Manchester or Birmingham. And some are definitely saying, "Actually, I don't. I'd rather have a different life." So if I was pushed to the best example I can give you, that is I would say within Vistry, which is nearly national, and it's not Wales, it's not Scotland, but not quite, I would say that the strongest market which underlines on what I've just said is probably the Southwest. The Southwest is strong because it's turning out to be [indiscernible]. That is a place where people want to live, and they can -- with new agile working, which will be done by Vistry as well. But I think that's coming through with most employees. That's a place where people want to live. So we're back to where do you want to live as opposed to where you need to live currently.

Okay. And in terms of sort of product size, would again there be a difference between smaller versus bigger?

No. We have a strategy as Linden independently, as you know, of increasing the numbers of 2 and 3-bedroom houses. We thought it was a thought, still do think it's a safer market in the long run. But there is absolutely no doubt that any of the lingering 4 and 5 bedroom houses we've had coming into the end of 2020, coming into this year are gone. So 4 beds, if you were to speak to our managing directors, who, in some instances, might be thinking about here and now, they'd rather have 4 beds than 2 and 3-bedroom houses because the demand for them, we need an office, et cetera, et cetera, is greater than it's been for some time. Now that said, we think that's interesting, and we're taking advantage of it as we speak, but we still think the long-term trend would be better for us to be building very few 5-bedroom houses, but 2, 3 and finally 4-bedroom houses are where we want to be.

Okay. Okay. The other one...

There is no doubt [ those are the ones that have done well ] in the last 12 months.

Okay. The other one I have was around, I suppose, discussions with the central government. What are they talking to you about? I'm sure they've drawn a sort of push the agenda on in terms of volumes. I mean are they trying to push you in any particular direction at the moment or encouraging to do certain things?

No. We were having -- Graham, Earl and I, separately and together, we're having phone calls leading up to Christmas pretty regularly with the Housing Minister and then indirectly through the HBF very regularly. That over the last few months has gone pretty quiet. So we're not getting any push from the government at the current moment in time directly for too many things. The main things -- they are liaising with the industry -- would be on cutting and the consulting, as we speak, having tall buildings, et cetera, as you know about.

Okay. And the last one again, sort of government this time, but local government. I mean how more engaged do the local councils with you and the Partnerships business, in particular, I suppose, sort of looking to drive their own output as opposed to going through the HAs?

Yes. But on the Housebuilding side, it's no different to how it's been for some time. The biggest issue with us on the Housebuilding side and planning has been just having enough planning offices to deal with the volume of work that they have to do. On Partnerships, yes, local authorities are definitely becoming more proactive, not just relying on RPs or housing associations, as I used to call them. And we've got a great example of that without naming, but it's in the Midlands. But we've got Partnerships and Housebuilding bid for a site -- a prime site, 600-odd -- 620 actually units. And we were talking generally to the local authority about it, you have a strong housing need. And I would hope that in the next month, we will contract on that site, which is GBP 57 million to GBP 60 million. And the cash outlay for the entire group will be about -- and only for 3 months, and this is sometime down the line, and it's on a deferred basis as well, the land payments is about GBP 2.5 million because the council, because of their need and want for additionality and units over and above the section 106 requirements, are putting in about GBP 60 million. So we're -- again, we were competitive. We would have bought it without that. We were competitive because of the Partnerships and Housebuilding: Bovis, Linden, Branding coming together. And again, this is a really sweet spot in the Midlands. So it's not -- we're buying something in the [lumberyard] where you're only 1 to sell so many and amongst this prime land at the local authority who were talking to us have come in and said we will pretty much fund the lot. Hence, it was the example I gave earlier, Clyde, the return on capital is in excess of 90%. So we're seeing the local authorities becoming much more proactive, particularly in Partnerships, as you rightly said, Clyde, to deal with the -- in some instances, chronic [indiscernible] that they have. Cecilia, I'm afraid we have to -- it's the end of the call. It's 4:59, and Earl, Graham and I have to go on to a board meeting, which is just prior to the AGM. So can you bring the meeting to a close, please? I'm sorry if there's anyone who's got any questions. And if you want to direct those questions through to Earl or Susie Bell, we will definitely come back to you within the next 48 hours with any answers to those questions.

Thank you, sir. That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.