Vistry Group PLC (VTY) Earnings Call Transcript & Summary

Hello, and welcome to the Vistry Group Trading Update for the year ended 31st December 2024. [Operator Instructions] I will now hand over to Chief Executive, Greg Fitzgerald. Greg, go ahead.

Thank you, Sam. Good morning, everyone, and I'm delighted to be joined today by Tim and Susie. So hopefully, you've all had a chance to read this morning's update. I'll give a brief overview of the update, and then we'll open it up, as Sam said, to questions. So first of all, let me start by saying that, obviously, the second half of '24 was challenging for the group and resulted in a disappointing financial outcome for the year. As you know, this was principally due to the significant cost issues identified in the South Division, the details of which we covered in detail back in November. Despite the disappointing performance, however, I and the rest of the PLC Board are absolutely convinced that we have the right strategy. We have a differentiated business model ready to help address the chronic housing shortage of the country, particularly in the areas of affordable housing. There have been some execution issues in the last few months, but none of these have been strategic in nature. We have already taken the necessary steps to get back on track in 2025, and I'm pleased with how the business has responded and how -- and this has been everyone, has put the issues of 2024 behind us. So let me summarize the key points of today's update. Our final adjusted profit before tax for 2024 is expected to be in line with the revised guidance of GBP 250 million, as communicated in December. In our December update, we reduced our expectations on profits by around GBP 50 million, driven by a combination of factors: a delay to some partner agreements which moved into this year, and that is a delay, there were no issues, as I'll continue to say, with our partners. The decision not to proceed with a number of business unit land transactions with other housebuilders and developments where the terms have become unattractive. I actually made a decision early on in December that if we were chipped on the price, I would rather have a profit warning than do the wrong thing just to get through the year. None of these are expected to get better terms agreed this year. And like others, we will look at alternative options for the land. Also to a lesser extent, there were some delays to some open market completions. So in summary, the majority of that profit warning -- profit went from 2024 into 2025 and onwards. We delivered a decent top line growth in 2024. Completions were up 7% to 17,200 units and adjusted revenues up 9% to GBP 4.4 billion. Partner-funded completions were up 18% and represented 73% of total completions, again, reiterating our strategy, I think. We concluded more than 220 new partner agreements with over 70 partners in 2024. And whilst we saw some delays at the back of the year, we concluded more than 70 deals in quarter 4 when we started with the unfortunate run that we had of profit warning, reiterating again our relationship with our partners remains strong. The open market remained constrained in the year with a number of interest rate cuts forecast at the start of the year not materializing, unfortunately. Open market completions were down 15% to 4,600 units. Open market ASP, however, remained stable at just under GBP 390,000, with the usual incentives up to around 5% supporting the open market sales rate. We secured the volume of new land and development opportunities we were looking for at the start of the year with a total of 16,500 mixed tenure units across 61 sites, and that's up from 15,300 units in the prior year. In the last few weeks, we signed a number of great new opportunities with partners, including Homes England, Bromford Housing, Notting Hill Genesis, Clarion and Sigma Capital, and have a great pipeline coming forward. And a lot of those deals, by the way, were actually signed on the day before or actually on Christmas Eve for those cynics amongst you who think partners aren't doing deals with us. We completed the review during October, November and drew a line under the cost impact of GBP 105 million. Our review of the other divisions resulted in a quite encouraging, actually, GBP 8 million profit reduction with no evidence of systemic issues elsewhere in the business. We've restructured the divisions with the objective of shortening reporting lines and getting me closer to the operations. We've consolidated from 6 divisions into 3 larger divisions, each led by an Executive Chair or a Chief Strategic Officer. All 3 of these guys have partnership backgrounds with extensive partnership experience. They sit on the ELT and are supported at the divisional level by 2 divisional chairmen as well as some new commercial directors, operational directors and financial directors. We are now in the process of finalizing our budgets under the new structure. And over the first few weeks of the year, the ELT and me are meeting each regional business management team to run through our expectations of how the business should be operated going forward. Net debt at year-end was GBP 20 million, I'm pleased to say, lower than guidance at around GBP 180 million. Working capital levels are higher than we would like to have seen at the year-end, and this reflects a slower open market sales rate and forecast resulting in a buildup in stock on some sites. And if I'm brutally honest, I think we've missed a few work in progress guidelines, and we've got too much stock, and that will be a major focus, particularly in the first half of this year. And just putting that into numbers, I think we've got in excess of GBP 100 million worth of stock more than we should have as a business of our size. And I will be very much laser-focused on that, stopping work on some sites and generating that cash to reduce our debt levels. So one of our messages to the regional teams has been to target a significant reduction in stock and work in progress levels, and we will adjust build rates accordingly. On some sites, that may mean we actually stop for a period as we clear excess stock. And last year, we didn't stop, we slowed down, and we should have stopped. As we work through this, I am absolutely prioritizing cash generation over the growth in some areas where we have too much capital employed. Our market outlook, we're working well with our partners and progressing a good range of opportunities. The government spending review and a transition to a new affordable housing program is important for unlocking a step into the partner-funded market. So the government keep reiterating their commitment to 1.5 million homes, their commitment to an increase in affordable housing. We need to talk to stock and some actions put in place, which we are expecting to be done around the middle of this year. So the outlook for open market remains uncertain. We're assuming a demand at similar levels to 2024, and we'll work hard to maximize opportunities. A recovery in consumer confidence and further rate cuts is key to open market sales growth, which is still, let's not forget, an important part of our Partnerships business. We expect to see progress on profit and cash in the full year '25. And as I said, we will provide much more detail on our medium-term targets when we report our full year results on the 26th of March. So on that Sam, I'm very happy to stop and open it up to questions.

[Operator Instructions] Our first question will come from Clyde Lewis.

I think I've got 3, if I may, apologies. Just I suppose around the partner deals that you flagged, the 220 that you did last year, I mean you've indicated volumes you're looking to sort of keep those sort of fairly flat this year. To sort of achieve that, do you need to do a similar number of sort of partner deals? Or is that sort of higher or lower just to sort of be able to meet that sort of flat volume number for this year? That was the first one.

No. Yes, we don't need to do anything like that number of volume for 2025, because we're in a strong position with an order book and carryforward position. However, we will need to do that kind of number and more for the growth that we're anticipating as we go through 2026. So just putting that into context, Clyde, as you know, ever since we announced the strategy change, we've been coming to the end of the '21-'26 affordable housing program. Most of the funds are either spent or allocated. We're doing exceptionally well getting some deals through with relationships that we've got, our strong relationships we've got with housing associations. But the affordable housing program will be updated during the course of this year. Unfortunately, we were hoping it would be updated in March, April. We are lobbying for them to actually bring forward some of that funding, so that there is a step between the existing program and the new one, but we're expecting the new program to be kind of launched in June, July of this year. So we expect an awful lot of deals to be done in the second half of this year once that funding and the new program has been actually finalized. Encouragingly, particularly through Stephen Teagle, we are dealing with a number of the larger housing associations who are obviously in contact, as much as we are, with Homes England and the government, who are gearing themselves up for the new program, and they're talking to us where their areas of main concern are, where their priority areas are, and we're already starting to look at that.

Okay. Second one I had was around seasonality of the business. And obviously, you were expecting to do a lot of activity in the final sort of quarter, if not sort of last couple of months. I mean, given obviously the volatility and the issues last year, are you going to try and, if you like, sort of, I suppose, spread that activity more over the year? I mean, historically, there's always been an issue in the industry, month 6 peak and month 12, obviously, an even bigger peak can cause issues.

Yes. We obviously will be trying very much to do that with regards to private completions. But I...

Tim and Greg, you've muted yourself. If you could re-unmute yourself and re-answer the question.

Yes. Sorry, I'm not sure how far I got in my reply. But with the private side, private completions, yes, we'll be trying like we've tried for a number of years to spread that out, and we'll see how we go. But June and December do correspond with the 2 strong selling periods, spring and autumn. But definitely, on the partner-funded side, there is an absolute renewed emphasis, and that's one of the things we're talking to the business units as an ELT and we're halfway through doing it now to the Board that these deals that we're doing now, they need to be far more spread through the year. So there is a renewed focus and razor-like focus, I would say, on why haven't you done a deal in January, February, because we expect every business unit to do a deal or buy a piece of land every couple of months, and there will be consequences and reviewed vigor on that as we go through the year. So one of the whole points of -- and it's one of the major deciding factors of going down this new strategy is, one, you take out the seasonality. But two, we also spread the profits rather than being Christmas card companies and making all our money in December, but spreading it around more on a monthly basis. There was some evidence that we succeeded on that during the year, but not enough.

The third one was around land and I think it's the 16,500 plots that you've sort of secured in the year. Has anything sort of changed in terms of the return metrics? Clearly, you're now focusing on thinking very much where the partnerships are and lower margins and higher asset turn. But within the last couple of months, anything changed?

No. All of those have been acquired in line with our new strategy as a partnerships business. And there's plenty of appetite with our partners to do that and coming in at scratch. What I would say is in the last 2 or 3 months, just like we -- as I said in my opening statement, we're looking to sell 3 or 4 or 5 sites or parts of sites and household. It's not our partners came in and chipped us at the last minute, maybe trying to take advantage of our predicament, but I just stopped that short. I would say the market -- the land market in the last 2 or 3 months is incredibly soft, and I do not see a catalyst to that changing. So I would expect land prices to fall as we go through 2025, and I definitely expect land creditors to rise because one of the things that we're definitely getting traction on is better payment terms.

Our next question comes from Joe Spooner.

Just a couple of questions, if I can. Just on the delayed deals that you saw at the end of last year, do you have visibility yet of those kind of landing? And when do you expect those to land? And then can you just talk a little bit about the forward sales position that kind of moved up and down through the course of last year. Can you just give a little bit of a narrative of how that developed?

Yes. The delayed partner deals, I would expect 90% of the ones that slipped to -- some of them already happened to take place in January, at the latest February. Some of the open market completions, again, that's January and February, but there's no sign of any of those open market completions going away. Definitely on the partner funded, there's no signs whatsoever of them going away. And as I say, a number of them are already being done. With regards to the forward sales position, do you want to say that, Tim?

Yes. So the forward sales position overall is still a very healthy one with GBP 4.4 billion, which is a lot of revenue coverage going forward. The reason why it's down from last year is because we don't have the same quantum from the large portfolio deals that we did. So we did large portfolio deals at the end of '23 and in the first half of '24, which we're working way through so coming out of the order book. And what we haven't done, as you'll have seen, is we haven't announced another large portfolio deal of a similar size.

And just you talked about the government spending review as kind of the trigger to unlock the partner market. Is there anything specific that you're kind of looking for from that process?

No. I mean the main thing is we want the new program to be announced. That's the first thing. The second thing we're looking for is it to be greater than the GBP 11.5 billion funding that was around for 2021-'26 program. Stephen Teagle and others are lobbying in the government to actually introduce a step between the 2 programs, because it is affecting build rates completions. And what would be wrong with the government bringing forward a couple of billion of what they know they're going to spend on affordable housing and the affordable housing program going forward and bringing it into place as early as they can during the course of next year. Housing Associations. Against that, you've also got some very good conversations going on at the moment regarding potentially even a 10-year rent review, all of which will be helpful. So everything is kind of moving in the right direction. And from a strategic perspective, I'm very, very happy that with all the rhetoric and talk, our strategic move is very well timed and it's absolutely the right thing to do. But I do also have to say, the government absolutely needs to start putting their money where the mouth is, for want of a better word, and they do need to start listening to us, local authorities and housing associations saying, guys, if you want these number of units, you are going to have to give us some visibility and some funds to get cracking on that now rather than waiting until June and July, by which, if historically things are right, that will then take a quarter to be settled through programs to be submitted, including by us. And I don't think we'll actually start seeing the actual -- the grant and the funding coming through, i.e., with deals until the last quarter of this calendar or financial year, whatever you want to term it. So we are lobbying to see if the '26-'31 program is there a way of a step being introduced during the course of this year, which any amounts that get put to that can be taken off the overall amount that comes through in that final program when it's released June, July of this year. And that's desperately needed to get housing associations and the likes of ourselves speeding up our delivery.

Our next question comes from Gregor Kuglitsch.

So a couple of questions or maybe actually more than a couple, but anyway, so firstly, on land creditors, can you just tell us where you ended? And I think you mentioned in one of the answers, you expect that to sort of go up from here on better land terms, I think, in terms of future acquisitions. The second question is sort of -- just give us sort of a -- I know you're not guiding specifically for '25, but the sort of building blocks that we should be thinking about. So obviously, lower provisions, perhaps a tailwind. You've got the deals kind of flowing into this year, perhaps some offset. So can you just give us sort of an idea of what you're thinking in terms of the profit direction? Maybe a third question sort of going back to your point of sort of taking whip down. I guess it's the issue here that I think previously, you were kind of giving your supply chain a lot of visibility and now all of a sudden you're basically telling them, well, actually, we're going to stop certain sites. So how does that impact sort of the whole supply chain situation that obviously you've been quite vocal about earlier last year?

Just on that one, Gregor, there is no change to that visibility. So what we're talking about there is on the partner delivery where we've entered into a contract. The subcontractors love it, have really sharpened their pencil. There is no change there. On our ex, because this is all on housebuilding sites, the legacy, which we're driving through, we never said anything to the subcontractors. We said we will be no different than a Barratt or Persimmon. Where the sales rate is good, we'll be cracking on; and where it's slow, we won't, hands up. I believe, eyes have been taken off the ball. And as I said in the opening remarks there, there is in excess of GBP 100 million worth of revenue that will be generated quite quickly without being spent, because we have too much work in progress around, again, predominantly the housebuilding businesses. Do you want to take the other 2 questions, Tim?

If you've finished your question, Gregory, I'll take the first 2. Land creditors, so yes, as we said, with the improved payment terms, land creditors would have gone up at the year-end. The precise number is still being worked through, but it would be at least GBP 100 million higher than last year's land creditor position. So last year finished, if I recall, at about GBP 660 million at the end of last year. So it will be at least GBP 100 million higher than that. In terms of the building blocks for '25, so the first tailwind is that the South Division issues have had GBP 105 million impact -- or the cost reviews had GBP 105 million impact in '24. We'd expect the impact to be around GBP 50 million for '25. So less of a one-off type item in '25 from that. The other piece is that we had some other cost review items that came out in the review in other divisions. We talked about GBP 8 million. And general adjustments that should be lesser in '25. So some tailwind from that. As we've indicated, we're not expecting significant volume growth in '25. We need to look at volumes as part of closing out our budget and balance that with cash. So that will either be a small headwind or a small tailwind going into '25. And then there is some cost pressure. Now the build costs are largely -- the build cost inflation, which we've talked about being low single digits, is taken account of in our partner deals already. So that is already reflected in our margin expectations for next year. But some of the more surprise things are that labor inflation is slightly higher in terms of overhead increases, and more significantly, the NI, the Employers' NI issue, which we flagged as a GBP 5 million issue in 2025. So those are the main sort of drivers. So from all of that, we're expecting profit growth, but we want to give ourselves some time under the new divisional structure to really dig into the budget, dig into those sites that got slow-moving stock before we go knock on a number, and we'll provide some more guidance on that in March.

Maybe one final question. Have you ever disclosed your covenants? I'm guessing you're well away from them, but to sort of remind us what they are?

I haven't talked about what the covenants are. So we have 3. We have a gearing, which is net debt divided by tangible net worth. We've got a tangible net worth covenant, which is measured on the balance sheet value equity less excluding goodwill and intangibles. And we have an interest cover, which is EBITDA divided by interest cost, and interest cost excludes the accounting type stuff, it's really the bank interest costs. So we've got a significant amount of headroom against all 3 of those, all year-end metrics and a significant amount of headroom at year-end.

[Operator Instructions] I will now go to Aynsley Lammin.

Just 2 questions for me, actually. First of all, just going back to the update on the 24th of December, where you'd put the fact that group had chosen not to proceed with a number of proposed transactions where the commercial terms weren't sufficiently attractive. Given what you said today, is that right to understand that's kind of predominantly land deals? I mean that's not you at that point saying that some of the partnership deals or the financial metrics weren't as attractive?

No, no, no. The partnership deals are strong, consistent, and we have a great relationship. So it's nothing to do with that. All of that was me stepping in saying, I'm not selling that piece of land with that chip. So just go back to whoever it might be, and I won't name, but it was 3 housebuilders and just we won't be doing it. On a couple of instances, they even came back and tried to increase the price, and I said, no, we'll carry on without you. So nothing to do with partnerships, all to do with ex housebuilding sites at the prices that were originally offered, that would have made some sense to do it. But with chips coming through, we pulled it.

Okay. Very clear. And then just obviously, you're going to update further in March some of the results on the kind of medium-term targets. But just reading through the update today, is it fair to kind of interpret it as being you still see the operational capacity within the business under the new divisional structure to get to the GBP 800 million type number, it's just a question of timing? You're obviously flagging that you're going to be focusing on kind of cash generation this year, not growth. You haven't, it seems, walked away from the special dividend of GBP 75 million. So am I right in interpreting that as still when you look at and revise those medium-term targets, it's more around the timing as opposed to the quantum of the GBP 1 billion kind of return to shareholder capital and the GBP 800 million profit? Or actually, should we expect both of those things to be under review and could change materially?

Yes, absolutely. Aynsley, this is a timing question. We've got to recognize that to get to those numbers by 2028 would be to put too much stress on the business given what's happened in '24 and the lower expectations for '25. So it's a question of when we can get to the numbers and the debate -- we can have a couple of debates. One is that the explicitness of the targets we put out for 2028, or do we just stick with a longer period for our medium term. So it's a question about timing primarily. I mean I think we're not going to be stepping away from our return on capital target of 40%. We believe that our margins of 12% are still reasonably achievable. So it's more around when we can get to the profit numbers and what that means for distributions over the next few years.

So just adding to that, obviously 100% agree with Tim on that. If you say when we originally announced the strategy in September '23, where we've been caught out on in '24 is -- and I'll continue to say it, if we hadn't changed the strategy, every single loss that we've reported through '24 would have come through. It might have been a week later, a week earlier, but they were all in housebuilding and they'd all been around for some time. Nothing whatsoever to do with the strategy. At our starting point, if we were aware of those costs, would have been lower as we went into announcing the strategy going into 2024. On the plus side, we had a conservative government. Affordable housing spend was being kicked down the lane. So from a strategic perspective, the move to Partnerships is better today than it was in September 2023, because of everything the Labor government are talking about. What's happened is, operationally, on the predominantly 3 business units, ex housebuilding business units, the cost of building out some very, very large schemes was greater than we had. So strategically, I'm in a better place at what a good move bringing that in with the Labor government coming in and talking about what they want to do. They now need to, as I said earlier, convert some of that rhetoric into actions, but I'm confident they will do that, albeit they might be a month or 2 later than we had hoped. But the issues in the South Division and 3 business units, predominantly 1, were on some very, very, very large housebuilding sites, as we continue to say, and those cost issues have been around for some time. So that's the hit. It's never a straight road. But strategically, if we were hoping Labor would get in -- if we were hoping Labor will want to go forward with affordable housing with the rhetoric that they're talking about, we're in a better place. So on a lot of days, if I try to turn these things on its head, if we didn't have the cost issues on those ex housebuilding sites and let's just say a government came into power and said, we're not worried about housing and all the rest of it, we'd be more looking at reviewing our strategy than we would have been now. The strategy is absolutely right. We've just got to get over and we are. We're moving into '25 positively. We just got to get over the issues that happened in the last quarter, which didn't actually -- they happened in the last quarter, they became apparent, but they've actually been around for a long, long time.

Our next question comes from Harry Goad.

I've got 2, please. So firstly, actually, just to follow up, I think, on the answer you just gave to Aynsley. I think I just want to be clear what you're saying. Were you saying that most of that delta from the 24 December, the sort of GBP 50 million was attributable to 3 land sales that didn't occur? And is that where you have like a large site and you were selling off parcels or proposed sale of parcels to other housebuilders? And then the second one is just a separate one, just in terms of selling incentives in the private market. I think you said it was running about 5% in 2024. Do you expect to be able to sort of rein that in and how much in 2025?

So let me answer the first one, Greg will take the second one. So the first, in terms of the movements in December, just to be clear what that GBP 50 million consisted of. There are 4 buckets of relatively equal size. The first bucket was the deals that we withdrew from because the commercial terms weren't attractive. So those are the things that Greg was just talking about. They were transactions primarily on selling land to other housebuilders or in one case to a real estate fund. And there was some chipping or some final review of terms and we said, no, they don't work. It may come back this year. But at this stage, we haven't reengaged with those counterparties. That's the first bucket. The second bucket was the open market sales delays where stuff has slipped into this year. So we expect those sales in the main to complete in the first quarter of this year, albeit that there may be a general shift to the right of stuff that might have been expected in Q1 is now in Q2, et cetera. The third bucket, probably the biggest bucket, actually was deals delayed and just slippage on stuff. So this is more of the partner funded stuff, but there was an element of land sales within that as well, where there are some land sales to non-partners that we expect to complete in the first quarter of this year. And then the final was just general other buckets of final year-end judgment movements, business unit cost adjustments, those sorts of things that came through. So those are the buckets that gave us the GBP 50 million reduction.

With regards to the 5%, yes, generally, I would expect -- I see no reason why that won't continue at those sorts of levels because we're not assuming any improvement in the housing market with our budget assumptions. What I would say, and you can all take away from this, on some sites, I suspect it will be greater than that because we have a laser focus on generating this in excess of GBP 100 million from too much stock around about the place as quickly as possible.

Our next question will come from Will Jones.

A couple from me, please. First, just, I guess, stepping back and thinking about the interplay of the cost issues last year and just generally winning work. I think based on your comments, the answer to this is no. But just to check, are you seeing any evidence that the teams generally across the business are being more prudent in their assumptions now versus previously? And if so, would it have any effect on, I guess, viability to win work at the kind of quantum that you were previously?

No, the answer to that is no, Will. This is cost issues historically on ex housebuilding sites, somewhere between 10 and 15 sites. So take it from me, if you went to 23 of our 26 business units, they would all go, "Greg, [ why are you having to go with us ]? What's the problem?" So there is no issue. It is to do with 12 jobs, big jobs and the price has been wrong for years. The cost has been wrong for years.

Great. And then second is just around, I guess, cash generation year ahead. That GBP 100 million stock number has been clear on, but whether there are other levers to have in mind for the next 12 months and whether you think whatever reduction in year-end net debt you deliver will also be mirrored in the change in average net debt?

Yes. So it's too early to give a precise number. Greg referred already to the GBP 100 million of excess stock that we've got. So that will be a prime focus as we run through our finance, our budgets over the next few weeks. In terms of average net debt, we will be looking to reduce that during the course of the year. It's too early to commit to what sort of level. But we ended up above GBP 500 million, and we certainly expect it to be below GBP 500 million for the full year in terms of average net debt. But in terms of closing net debt, too early to say, but we're looking for cash generation in the year.

Yes. And there's a huge emphasis with the business units and the ERT now on this is the year we want some cash generation.

And maybe while I'm here, just if there's anything to be aware of on outlets, please?

I don't think there's anything particularly to be aware of than sales outlets have dropped below 200, partly because we're migrating away from some of the former housebuilding sites and closing some of those sites down where we've had low volumes, and we'd expect a reduction with the change in mix of the business to a higher partner-funded mix. So yes, sales outlets below 200 and significantly higher number of build outlets, because we obviously are building on sites where we don't necessarily need sales outlets anymore, because we've presold or they're 100% partner funded.

Our next question comes from Alastair Stewart.

Just a quick question really on an update on the planning system. A number of your peers have remarked on changes since Labor got in. Can you give us an update, please, some color?

Yes. We're having more positive surprises than negative surprises. So there are still the odd council who are rolling up their sleeves and want to have a battle with the government, but there's a greater number of councils that are listening to the government, listening to their housing numbers in greater detail. And we are, without any shadow of a doubt, finding planning is still difficult. It never will be easy, but it's more straightforward than it's been for a period of time. And that is particularly the case on our huge strategic land bank where we are bringing forward some of our strategic land because we think with the new emphasis on building the numbers of houses and affordable, we think we can bring forward some of our strategic land in some instances, 3 or 4 years ahead of when we were originally planning. So a more encouraging environment. But that's mainly at the moment based on rhetoric. And if you're a NIMBY, if you're standing up now -- if you stood up a year ago, there wouldn't have been anyone looking at you. Everyone knows now if you're a NIMBY and you're standing up, there's probably a YIMBY just around the corner and there's arguments either way. And we are seeing a difference in sentiment of certain -- within certain councils, but not all. We would hope that the new planning document, which is we're fully behind, comes into law in the first half of this year, and that will not just help with rhetoric, it will actually give some real teeth behind what we can and can't do. And if they can speed up even more the appeal process, that will be very helpful. But Alastair, overall, better than we were. The new planning framework being adopted and becoming legal will further help that.

Our next question comes from Allison Sun.

I apologize I joined in halfway, so if the questions were asked before, I apologize again. Two from my side. So first of all, you are saying 2025, the key will be reducing the [ completed ] stocks. So should we expect some downward pressure on the pricing, number one. Number two is, I know you mentioned you expect the full year partner demand will be at a similar level as 2024, but let's say, if we unfortunately lose 1 or 2 of them, how fast do you expect to line up the new partners?

First question -- sorry, Allison, I think there's a noisy neighbor there in your office. I think the 2 questions, first one was about full year pricing and the second, full year demand?

Yes.

On the pricing, there is a focus on, as I say, generating in excess of GBP 100 million of excess stock. There might be some pricing pressure on that. But the main thing is we've stopped building. So that will come through during the course of the next 12 months, it's how quickly we can bring that through. With regards to overall demand, we're in a very, very strong place on our partner delivery. So I think overall demand on the partner delivery for this year is -- I don't have any issues with that. And on the private side, we're not expecting a better market than 2024. So I don't actually have a problem with that. Where we should all be focusing in on is how quickly the new program comes through and how quickly that comes through will translate into how many opportunities we can get over the line in the second half, last quarter of this financial year, which will mean how much growth can we start getting into as we go into 2026. So at some point, the program is going to come through. The earlier it comes through or the visibility of it comes through will mean greater growth as we go into 2026. And we have a capacity within our business units to do far more than we're doing at this precise moment in time.

That was our final question. So I'm going to hand back to Greg for his closing remarks.

Thanks, Sam. I think there's over 200 on the call. I hope you all found that interesting. Thanks very much for the questions, and we look forward to seeing you on March 26 with our final year results. Thanks very much. Thank you.