Bellway p.l.c.

We had a good performance last year. Volume was up by over 14% to 8,749 homes. Operating margin increased to 10.9% and that drove a strong increase in operating profit to £303 million. And you can see that we are well positioned with land and outlets for FY26. Now, along with our usual financial and operational detail today, Shane will also set out our new capital allocation framework, which is central to our approach to drive assets harder in a more challenging environment. But firstly, I think it's important to provide some context with regard to recent training. Trading since the start of April has been slower and never really recovered from the levels that we enjoyed in Q1 of this calendar year. Sales rates over the past six months have tended to hover between 0.5 and 0.6 per outlet. That said, the order book is still in good shape. We're well placed to have both a decent half year and achieve our four-year guided volume of 9,200 homes. And to complement that growth, there is further opportunity for the business. We have a sharper focus on return on cattle employed and being more capital efficient. And regardless of that trading backdrop, given our well-invested land bank and WIPP position, Bellway have the ability to increase cash generation and returns to our shareholders. And our confidence is reflected in our announcement today to commence a share buyback starting with an initial £150 million. In summary, I would describe our business as being very robust and well placed. but we must be mindful of the softer market conditions. And if the government are serious about growth and delivering more homes in this Parliament, then that ambition needs to be reflected in the November budget. Now, I'll provide more detail on Ops and Outlook later, but first, our financial results and capital allocation framework with Shane.

Thank you, Jason, and good morning, everyone. I'll start with the finance review. As Jason said, we've delivered a good financial performance in FY25 despite ongoing challenges for our industry. The combination of our healthy order book at the start of the year and the improvement in reservation rates supported a 14.3% increase in volume output to 8,749 homes. That growth was driven predominantly by private output, which was up by 20.3% to 6,924 homes. Social output was 3.7% lower at 1,825 homes as the proportion of social completions reduced to a more normalised level at around 21%. The ASP was up by 2.8% to 316,000 and that was in line with expectations. The increase in ASP was driven by geographic and mixed changes with underlying pricing remaining broadly firm. Turning then to gross margin, there was some modest progress here, with a 40 basis point increase to 16.4%. Whilst we had the benefit of some higher margin land in the mix, this was partly offset by the absence of any HBI and ongoing low single-digit spot cost inflation. We also have higher embedded cost inflation in our WIP, which remains a headwind to margin in the nearer term. And this is reflected in our order book, and we currently expect gross margin progress in FY26 to be similar to that achieved in FY25. Looking further ahead with our planned volume output growth, we're working through our WIP balance and a growing proportion of output will benefit from new or higher margin land. With a stable market supported by a more favourable HBI-BCI dynamic as seen in previous cycles, we are well positioned to drive ongoing improvements in our margin in future years. The increase in volume output and revenue drove an improvement in overhead recovery of roughly 50 basis points. This, together with the higher gross margin, led to the improvement in underlying operating margin to 10.9%, which was in line with expectations. Underlying PVT was 27.9% higher at $289 million, which drove the strong increase in the proposed full-year dividend to 70p per share. This slide has covered the group's underlying performance. Adjusting items are shown in more detail in the income statement in Appendix 1. These include an adjusting item of 15.4 million through admin expenses relating to the previously announced CMA investigation, comprising both our voluntary contribution and legal expenses. The other adjusting items relate to bill safety, which I'll cover later in the presentation. Turning then to our balance sheet, we have a very well robust capitalised balance sheet and at its foundation we have a high quality land bank and a very strong whip position to support our plans for multi-year growth and increasing cash generation, which I will cover shortly as part of our capital allocation framework. To highlight the key balance sheet movements, firstly, the increase in fixed assets primarily relates to our investment in our new timber frame facility. Given that relatively stable market backdrop, our land investment has started to normalise from the lower levels in the previous two years. During FY25, our overall land balance has risen by roughly 3% to $2.5 billion. This increase in land activity is also reflected by the land creditor balance rising to $338 million, although this remains modest overall and represents only 13% of our overall land balance. Jason will cover that in more detail later when he talks about the land bank. The work-in-progress balance, which includes site whip, show homes and private exchange properties, rose by $52 million. roughly 2% to just over 2.3 billion. This slight increase was primarily due to spend on our ongoing strong outlet opening programme. And to finish on the balance sheet, as you'll see from the bottom of the slide, on our adjusted gearing, and I think this is particularly relevant when we talk about capital allocation later and how we utilise that, our gearing remains low at 8.3%, including land creditors, and critically our NAV per share has risen to 29.89%. Turning then to cash flow and you'll hear lots of this throughout this presentation this morning. We generated good operating cash flow and we ended the year with net cash of 42 million. The chart shows the small increase in site WIP I referenced earlier amounting to 41 million. In relation to land, the monetisation of land through cost of sales was 521 million. Whilst this was higher than the cash spend on land as part of our drive to drive a more efficient capital structure, our increased use of land creditors towards a more normal level, as shown on the previous slide, helped to fund the 70 million increase in the land balance in the year. After other working capital movements and tax, the operating cash generated before investment in land, bill safety spend and distribution to shareholders was 639 million. This represents a 50% increase in operating cash flow on FY24. Again, I think that's a theme that we will come back to when we talk to capital allocation. Strong year-on-year growth primarily driven by better discipline around WIP investment. When in FY24, there was a net cash outflow over the same period of $260 million. As a result, the conversion of operating profit to operating cash flow has risen from about 1.8x to 2.1x and I'll provide more detail on our ambitions in this area later. Adjusted operating cash flow is the fuel for future investment opportunities for the business and ultimately greater value creation and returns for shareholders. In this regard, we invest £472 million in land, including settlement of land creditors and dividend payments totalling £70 million. We also spent $45 million on bill safety, which I'll cover now. Overall, we've made good progress on bill safety during the year. With regards to movements in the provision, in addition to the $14 million adjusting finance expense, which was in line with previous guidance, there was a net increase of $37.4 million in the bill safety provision. I'll now cover the components of and the drivers behind the $37.4, starting with the SRT. In December 24, following a period of industry-wide delays in obtaining building access licences, House Builders and the Government committed to working together through a joint plan to accelerate assessments and remediation. We have now completed 100% of assessments in accordance with the joint plan for all of our legacy buildings in England and Wales. Following this accelerated and extensive survey programme, a higher proportion of legacy buildings was found to require works both externally and internally than was previously assumed. And this has led to a net increase in the SRT and associated review provision of 50.7 million through cost of sales. With regard to structural defects, there was a net credit through cost of sales of $13.3 million. This was largely due to a remediation strategy being finalised for a reinforced concrete frame issued identified at a high-rise apartment scheme in Greenwich, London in FY23. This strategy is less invasive than the remediation design applied in the previous year and has led to a reduction in the cost estimate for the Greenwich scheme of $19.3 million. This has been partly offset by a $6 million charge relating to a mid-rise building which was identified during the year with a similar issue to the Greenwich building. We have since carried out further reviews across all of our buildings over 11 metres in height constructed by or on behalf of Bellway where the same third party responsible for the design of the frame of these two developments have been involved. and to date, no other similar design issues with reinforced concrete frames have been identified. The provision at the 31st of July 25 is 516 million and I'm confident that we are well provided further remediation works required across the legacy portfolio. Following a year of delivery against our requirements of the joint plan, with a particular focus on completing build surveys and procuring works, we will now be accelerating the pace of remediation. The strengthened team at our dedicated bill safety division is focused on completing works as promptly and efficiently as possible. We have spent 191 million on legacy bill safety since the start of the programme, including 45 million in FY25. For FY26, we expect there will be a significant increase in spend to over 100 million, although I must caveat that this level of spend will be dependent on receiving requests for payment from the government for works carried out on our behalf by their built safety fund. To finish off this section now, I'd like to just cover a summary of guidance for FY26. We are targeting volumes of around 9,200 homes, of which 20% will be social. The average selling price will be around $320,000, with an increase of FY25 driven by mix predominantly. The admin overhead will increase to around £170 million and that's driven by underlying wage increases and the full year impact of employer NIC. Together, I think it's important to say, with important investments that we see for the efficiency and growth programme that we have over the next number of years, that includes areas like IT, timber frame facilities becoming fully operational. We currently expect the operating margin to be similar to the FY25 level at around 11%. I'd now like to turn to the capital allocation framework. This is my second update that I've given to the City and I think myself and Jason are very keen that we talk in detail today around our capital allocation framework and what that actually means for the business financially value creation and strategically for the business. And I think it's fair to say we've refreshed our approach to capital efficiency and it's very much embedded across the group. There's a number of senior leaders here today from Bellway who are very much part of this journey, so I'd encourage you to talk to them as well. It's just the finance people in relation to this, this is very much a living, breathing thing across the business. And this section of the presentation covers our refined capital allocation framework and the strategy that we have to drive better value for our shareholders. So first of all, I'd like to set out the clear priorities for capital allocation. We have a strong balance sheet and we have a well invested land bank and that will remain the bedrock of the business. And it supports our balanced approach for investing for growth. And it's very important that we don't lose sight that Bellway has a really strong track record of growth. And that's very much the bedrock of this kind of capital allocation framework as well, as well as delivering enhanced returns to our shareholders. We're going to run the business with an efficient capital structure, with low gearing, and we're going to continue to invest for growth. Whilst our financial strength provides flexibility and headroom to grow our land bank, I think it's fair to say with the current market backdrop, we expect our near-term land strategy to be largely replacement only. We are also sharply focused on driving better efficiencies and our WIP balance presents a significant opportunity for much greater cash generation. If the trading environment remains stable, we can deliver growth in volume and profit, and that will drive strong cash generation, particularly as our elevated levels of WIP start to unwind. Combined with the ordinary dividend underpin, we believe that the value creation opportunities are significant for our shareholders. And I think this is evidence today, as Jason said, with the launch of our £150 million share buyback programme. We're going to run that over the next 12 months. And I think it's important to emphasise we've got the capacity for this to be a multi-year programme. This slide has summarised our clear priorities for capital allocation. And I'll provide more details on the pillar of the framework in the following slides. Turning to our efficient capital structure. We're going to continue to run the business through the cycle with a strong balance sheet, but there are definitely opportunities to deliver greater efficiencies within the business. We're very well capitalised with total debt facilities of £530 million. That comprises of £400 million of bank facilities and £130 million of fully drawn USPP notes. Over the next few years, we expect to run the business with modest average net debt and low year-end financial gearing of up to 5%. As we referenced earlier, land investment has started to normalise and there will be a modest increase in the use of land creditors in the medium term. The range is expected to be between 15% and 20% of land value and that's similar to our historic norms. When taking land creditors into account, our adjusted gearing is expected to rise modestly into the mid-teens, and the chart illustrates that we've successfully run the business with a similar efficient capital structure and level of adjusted gearing in previous cycles that we've been involved in. I am confident that this strong and efficient capital structure will enable the Group to continue to invest in attractive land opportunities to drive the growth and improvement in returns. It will also ensure that efficiencies generated within the operational divisions as measured to return on capital employed will generate an ROE percentage at similar levels, which I think that's something that's really critical. We're driving to ensure that our return on equity and our return on capital employee percentages are as close as they can be. And this will help to ensure that the balance sheet structure doesn't dilute the returns capacity for shareholders from operational efficiencies that are generated within the business. Looking to improvements then in WIP turn, this is the key area of focus across all 20 of our operating divisions and it's a significant opportunity for the group. The chart shows our WIP turn fell by around 50% to 1.2x between FY22 and FY24. This was primarily driven by a sharp fall in volume output. Bellway stayed well invested in our WIP platform and our supply chain throughout the downturn. I think that's going to stand us, that strategic decision is going to stand us in really good terms now as we look to harvest that investment that we made in the downturn as hopefully market conditions improve into the longer term. We've made some early progress in FY25. The whip turn has increased slightly, but this is an area where our discipline will improve further. We're well positioned to deliver growth and volume over the next three years. And if you think about 10,000 homes in FY28, That would see our revenue increasing by 20% from FY25 levels, but it will also enable us to monetize our WIP. So that will allow us to target a significant net cash inflow on WIP. So you can juxtapose that 20% increase in revenue, and that should allow you to reduce your WIP balance by around 10% over that time frame. So that 10% reduction in WIP by growing your revenue will allow us to get a significant cash release over that time frame. And that would see our WIC turn grow into about 1.8x by FY28. And I think that's a ratio that we and I think a lot of people in this room would be comfortable with over that time frame. And that's going to be the key driver in increasing asset turn and cash generation to enhance our returns over that time frame. Turning then to capital efficiency and cash generation. As part of our plans to deliver higher volume output and asset turn, we've an increased focus on bulk sales. They represent roughly 10% for private reservations in FY25 and they will remain a part of our strategy going forward. We will remain selective. with our divisions working with our commercial finance teams and it'll be all around running scenarios and assess if a potential bulk sale is NPV positive compared to standard open market sales. So probably more of an NPV asset turn lens as opposed to just looking at maybe what the margin differential between both options are. And we think that gives more options to our business leaders then who are running the divisions as they trade their way through the cycles, the ups and downs within the cycle. Regarding land investment as we highlighted earlier, we expect a number of plots will be broadly in line with plots utilised in the year and that will be a largely replacement only strategy. So delivering volume growth enhanced by bulk sales will enable us to work through the top tier of the land bank more quickly which is lower embedded gross margin. These plots will be refreshed with higher margin plots and that will include from our strategic sites. Whilst 20% gross margin will remain a requirement for land acquisition, we'll be taking a more balanced approach to viability and the key underpin really will be more around higher levels of capital employed from those investment decisions. And we'll be looking for the return of capital employed on those to be 20% plus, underpinned by a 20% plus gross margin. I think if you live by that in terms of land acquisition, that will create a lot of value for us and our shareholders then over the coming years. The compounding effect of those initiatives and the drives to monetise or whip, that should deliver a material increase to the group's operating cash flow conversion and that's illustrated in the chart. If you take FY23 to 25, Bellway generated an aggregate underlying profit of around 1.1 billion. Our adjusted operating cash flow before land, bill safety spend and shareholder returns for that period was just over 1.7 billion. So that represented a conversion between operating profit and operating cash flow of around 1.6x. There was an improvement in each year through the period with that 1.3x rising to 2.1x in FY25 and we're expecting to maintain a conversion at greater than 2x over the next three years. And as an illustration, based on a similar level of aggregate underlying operating profit of around 1.1 billion between FY26 and 28 off getting to that 10,000 unit number, if we were to improve our cash flow conversion to 2.4x, this would generate an additional one million of cash compared to the previous three years. That will help cover the ramp up in bill safety disbursements that we have over the next number of years, further land investments and crucially providing returns capacity for our shareholders. So we think that's a very balanced scorecard as we think about capital allocation and fulfilling all the obligations that we have over the next number of years. And I've used that as an example and whilst it's ambitious, we think it's definitely achievable. I've been at Bellway now for almost a year and there's a clear focus across the group on delivering on all of these priorities. If the market remains stable, I'm confident that we can deliver greater cash generation and therefore returns for our shareholders. And I'll turn now to value creation for our shareholders. We are in a strong position to deliver growth in volume output and a significant increase in pre-tax ROE in the years ahead. These remain our strategic priorities. To deliver growth with a supportive market, we have a well invested land bank, outlet network and WIPP position. Within our divisions we have experienced teams with operational strength and their significant structural capacity to deliver organic growth. Combined with an efficient capital structure and our drive for greater cash flow conversion, I'm confident that we have an excellent platform to increase returns for shareholders. We will maintain our underlying dividend cover at 2.5x and this will be supplemented by returns of excess capital. We've started this today with an additional £150 million share buyback. And we have a clear intention of returning further excess capital in future years as it arises. Returning excess capital is a key component of our strategy to increase returns. And I think it's really important to say that our management incentives across the business are fully aligned with increasing cash generation and ROE and also profits and volume output that run commensurately with that. A new LTIP proposed for shareholder approval at this year's AGM includes a challenging FY28 underlying pre-ROE stretch target of 14%. And whilst this would require exceptional delivery and more supportive market conditions than we are currently experiencing, it clearly demonstrates the extent of our ambitions collectively in Belway. I now pass back to Jason who will cover the operation review and outlook. Thank you.

Thank you, Shane. Before I start, I think it's worth recognising the amount of hard work involved in pivoting the business to being more capital efficient and much credit goes to shane but also to our senior management teams across the uk who have embraced the new approach with so much energy and enthusiasm a deserved well done to all Now I'll start with last year's trading. We achieved a private sales rate of 0.52 per outlet with bulk sales contributing to a further 600 homes. Overall, the sales rate was 0.57, with cancellation rates steady at around 13%. Mortgage rates were relatively stable in the period. Affordability is still constrained for first-time buyers or for those without the benefit of a decent deposit. And those purchases are still exposed to rates of around 5%. Overall, I would describe customer demand as sensitive. Sensitive to mortgage rates and sensitive to the commentary around further tax increases. And that's clearly reflected in current trading. In the first 10 weeks since the 1st of August, we achieved a private sales rate of 0.51 per outlet, with bulk sales only making a very modest contribution in that period. Pricing has remained firm overall. The southeast and southwest areas are still slower, where we tend to deal harder and maximize the use of incentives. Our order book at the 5th of October consists of 5,300 homes with a value of 1.5 billion. And we are currently forward sold by around 65% for FY26. In general, the market appears to be in the same pattern as last year, where the autumn selling season is largely flat owing to the timing and noise around the budget. That said, you'll recall that we enjoyed a busy start to the calendar year as homebuyers had waited for the outcome of the budget before making a commitment. And we will likely or hopefully see that pattern re-emerge with a busy start into 2026. The next slide is about multi-year volume growth and the conditions required to create a path back to 10,000 homes by FY28. We have assumed a stable market and the following realistic assumptions. A private carry forward order book of around 40%. Modest outlet growth to around 260 outlets by FY28. An increased focus on bulk sales and the private sales rate moving towards 0.6 per outlet. With those conditions or similar, we can deliver 10,000 homes by FY28. Now, if I could take you to the next slide, land bank. We have a total of some 95,000 plots, nicely split between owned or controlled and strategic plots. Taking a look at gross margin within the land bank, The current margin for DPP plots is 18 to 19% and we expect progression through 27 and 28 as the new higher margin land comes through from both pipeline and strategic. In the period, we contracted or acquired just over 8,000 plots. So my short-term ambition, as Shane has said, is simply to maintain the land bank and continue with just replacement land. Today, a land bank length of around four and a half years feels about right, particularly with an improving planning environment. And based on DPP and pipeline plots with a volume of 10,000 homes per year, that allows me to grow into the land bank rather than invest further. Looking forward, our focus will be on strategic land with the aim to harvest more consented plots from that strat tier of the land bank, delivering better margins for 27 and 28. Turning now to outlets, we opened 56 new outlets during FY25 and plan to open a similar number during this financial year. Overall, I would expect average outlet numbers to be between 240 and 245 for this year with modest growth to around 250 for next year. Regarding planning, government progress remains positive. We do still experience some delays as local authorities take time to adopt local plans. And as you can imagine, some local authorities are more supportive and keen to deliver new homes, whereas others are less enthusiastic. Although I tend not to worry too much about outlets and planning as we are very fortunate to have good visibility on both and already have 85% of our plots with DPP for FY27. We are in good shape. regarding production and costs. Not much change over the past 12 months. Build cost inflation is still running around 1 or 2%. And it's still, while still at very modest levels, it's still a margin headwind for house builders. And earlier in the year, you may remember, I mentioned Bellway Home Space, our new timber frame facility in Mansfield. We are progressing to plan and due to open in FY26. Simon can offer a little more detail in Q&A if required, but our plans are very much part of our approach to drive WIP turn and return on capital employed. And finally, outlook. With the strength of our order book, we are well placed to meet our guided volume of 9,200 homes. And we'll hopefully benefit from a busier market at the start of the year to build that order book for FY27. Structurally, we are able to deliver more volume in the years ahead. We have the land, the planning, the people and the outlets, but we just need a supportive economy in which to do so. The key message from today is our focus on cash generation and our confidence to increase returns to our shareholders, which Shane has already set out. Thank you. We're now happy to take questions.

Amigala from Citi. A few questions from me. The first one was on the stretch pre-tax ROE targets in your LTIP. Can you give us some sort of building blocks or framework of the sort of scenario where we can see that reasonably coming through by FY28, i.e., what are the elements that we need to watch out to understand the moving parts there? The second one was on the Belway Home Space Facility. I think in the release you've mentioned it is one of the drivers of bill efficiency for the business over time. At what point into the ramp-up phase can we see that giving us more meaningful gains on the bill side as we think about your journey there? And the last one just on the land market. You know, you've kind of given us a reasonably strong framework of how you think about capital allocation. But in terms of the near-term sort of sentiment in the housing market, do you see any sort of near-term opportunities in the land? And, you know, how are land vendors really looking at this market today?

I'm going to give you a selection here. I'm going to get Shane to answer question one, Simon to do two, and then I'll close on three. So you get the full board.

You want to do the ROE first? Yeah. So I think if we're sitting up here talking about capital allocation, cash efficiency, and I see a lot of my colleagues sitting here beside me, which makes me very comfortable as we talk about this, it's really important that you've got an incentive scheme in place that mirrors it. So we've done a lot of work on both our short-term and our long-term incentive schemes. And it's not a case that the old incentive schemes didn't do their job. They did, but they were very much probably focused around the P&L and I think that works well in a rising market. But we all know that the market is a bit tougher now. So the underpins within our S-tip are around operating profit and operating cash flow. And then the L-tip is around return on equity, not returning capital employed, so return on equity, which means we have to return capital to shareholders as well. But we have to do that in a manner that allows us to grow as a business. So there's an EPS underpin within that as well. The 14% target is very much a stretch target. We've guided to 10,000 units today over three years. I think that's a number that we're pretty comfortable giving in the context of current market conditions. That's not going to deliver a 14% ROE. That probably delivers probably close to 12%. I think the thing that we're really keen, if there's one big message that I want to deliver today, I think what we're keen to emphasize is our strategy. It's nothing new or anything, but I think what we pride ourselves in Bellway is that we're very clear, we're very detailed, orientated around what we want to do, and we're all about staging, posting, where we think we can get to as a business. The sector has suffered a lot in terms of profitability loss and return on equity loss over the last number of years. So the 10,000 units, that will still deliver a lot of value for shareholders compared to where we are today in terms of cash returns and indeed the growth and profit that you would see coming off that. But to get to 14%, you'd probably need to get unit output probably closer to 11,000 units. But both of those scenarios would see a lot of potential capital being returned to shareholders. We've obviously announced a 150 million share buyback today, but clearly if you get to 10,000 units and you're growing your revenues by 20% plus, there will be a cash monetisation in that if you're being very disciplined around how you're doing land buying. I think it's fair to say in the context of the LTIP as well, the stretch component for management is very much between that 12% and 14%. So we're all very heavily incentivised to do obviously better than the 10,000 of the 12% plus, but that's not where we're guiding the market today because that's not where we see conditions.

Morning, everyone. So on HomeSpace and perhaps more Timberframe, We've no doubt it's going to drive capital efficiencies in the medium term. That's very much the strategy behind opening the new timber frame factory, which is forecast for early calendar year 26. We're currently at 10% timber frame production across the group. That's predominantly through our Scottish divisions and some other divisions. And we're going to ramp that up to around 30% of output by 2030. But we're going to do it in a very prudent fashion. careful manner. It's a new facility for us, so we want to make sure we get it right. So over the next two to three years, we'll introduce HomeSpace product into the group, initially through seven of our operating divisions. But we've also got a partnership with Donaldson's Timber Solutions, who are currently helping us across the rest of the group. And between DTS and Belway HomeSpace, we'll ramp it up towards a 30% point by FY30.

I'll be brief on land, Emi. Just at the moment, we've got a very full land bank and I described how we can grow into it. So I'm not in a position, I'm keen to over invest. I'm a little bit like our purchasers at the moment, you know, adopt a wait and see approach to see what happens towards the end of the year. We're still buying land, but we're selective. So in those bigger divisions in better selling areas, we're still investing. I guess that dynamic will change. If the market does pick up, then our appetite will probably increase. But just at the moment, we haven't stopped. We've just paused.

Thanks. It's Will Jones from Rothschild & Co. Redburn. Three, if I can, please. The first, if you could just update us on your thinking around bolt sales. There was a mention of it on an MPV basis in the presentation, but I think it was 0.03 of the sales rate last year and 0.1 or so the prior year. Where's normal, I suppose, if we continue with somewhat subdued conditions? for, say, the next six months to hit that flat sales rate for the year, would you be willing to up the bulk sales content or would you let the sales rate slip slightly? The second was, just coming back to the balance sheet content, you gave some helpful guidance on the whip of balance, potentially coming down 10%. How would you think about the land value balance? I think you plot broadly steady. Does the value go up a bit as you... replace a bit higher than you sell out at. And then the last, just a technical one on the finance bill, whether you had any comments on how we should think about that on a three-year view as you return more cash. Thanks. I'll do bulk, you do the other two.

Well, as usual, your figures are more detailed than mine on bulk sales. We did about 8% this year in terms of bulk sales, but as Shane alluded to, we've got a bigger appetite. And could do a little bit more this year. I don't think it's going to change the dial, but, you know, we'll probably do 10% plus. But sometimes it's dependent upon what's happening in the market, how busy it is. But if you talk to our RCs that are with us today, our regional chairs, there's certainly an appetite and some deals on the table that we're looking at. But if you said sort of 10% plus, I think that's about where we need to be, Will. Can I pound you for balance sheet and finance?

On the land side, I mean, we've got roughly two and a half billion in land. That might take up very slightly over the next three years, probably commensurate with our unit output, but it won't be a material movement. Probably the bigger piece there is that we're probably willing to take on more land creditors and we're happy to let that go as high as 20%. So net-net, well, that probably means the overall net land balance between land creditors and land won't increase that much. Probably the increase would be offset largely by land creditors. I'm sorry, I missed your third question. Would you mind repeating that, please? Yes. Yeah, I don't think that would be a material movement either because we have £130 million of PP money and when we set ourselves the kind of broad target of how do we actually make sure that return on equity and return on capital employed are broadly similar, Funny enough, when the PP money is kind of drawn fully at year end, that kind of gives you close to the answer. So I would say our net debt is probably at year end will probably only be kind of 100 to 150 million pounds, maybe slightly higher than that. So the finance costs themselves will not move significantly, I don't think, in relation to that.

Morning, Alison from Bank America. Just one question on the share buyback. So I was wondering if in the next few years, if you see a better investment opportunities, for example, while you're thinking maybe scale back $150 million or this is like the minimum you want to return per year in the future?

Yeah, I mean, I think I'm glad you asked that question because we're very keen to emphasise that the lens we look at through everything is long-term shareholder return. But long-term can't mean that people are waiting forever. So if you were to ask me to anticipate, I would say I think we will be, you know, as long as that cash is generated, I think we will be returning it to shareholders. But we look at everything now through it. an IR or MPV slash ROE land. So if there was an investment opportunity that we could undertake that made sense for us, we wouldn't be found wanting there. But we wouldn't just turn around and say we've decided to make that investment to shareholders, which I think in the sector we're guilty of doing sometimes, say we're going to invest that money. I think what we'd be saying is, We're investing that money because we actually see the IRR of that investment being greater than actually buying back the share at a certain price. And the payback period of it will be X over Y. I think that's the level of precision you have to get down to when you've seen the hit that the sector has taken over the last number of years. So we are going to take our responsibilities around that very seriously. But we are absolutely going to invest in growth where that opportunity exists.

I think I've got three as well, please. First of all, any kind of extra colour on price and incentives as we've gone through the autumn selling season? Second question, just on the kind of point you were just making, I guess, if you look at if the government does miraculously improve planning brilliantly and the sales rates do bounce back, is it right to assume that there is flexibility around that share buyback that you would open more outlets? I guess... You know, 260 outlets by FY28 doesn't look that ambitious in terms of what the government wants and how much flexibility is there. And the third question, Jason, just you mentioned, you know, this kind of hope the government recognises a supportive economy is needed. I mean, just what's your wish list for the November budget? Thoughts ahead of that would be interesting. Thanks.

OK, I might start all three of those and just get a bit of help. But, you know, pricing Ainslie is not, you know, flat all across the UK. Not everything's like the south-west and south-east. You know, there are some... pockets of buoyant markets. So we explore those as best we can. You know, at the moment, the southeast and southwest, you know, it's full fat incentive in those locations at the moment. We deal hard. So we try to balance the books across the UK. The new year may be different. You know, we look at it quite regularly. In terms of outlets, I wanted to get across today that our ambition is based on realistic assumptions and I've adopted the same approach with outlets and if you assume that we're just going to buy replacement land You know, for me to offer you, you know, ambitious outlet growth doesn't seem right. I think I can deliver realistically modest outlet growth with an improving planning system. And you're quite right, you know, it could get better. But I think what we've offered is deliverable. We need a slight tick up in sales rates. I think if you look at them in the round, the world doesn't end just with outlets from my point of view. And with government support, I look at things, they've done a reasonable job on planning, let's give some credit. You know, Bellway are in super healthy shape. We've got no debt. We've got the land, the people, the planning and the outlets. All I need is a supportive economy. And sentiment is most of it, Ainslie. You know, we need a lift. Sentiment's low in the market. And we've made two requests. to government, and that's not just me alone, that's the majors. Firstly, can we undo the stamp duty costs that were imposed on first-time buyers in April? And can we have a long-term deposit support scheme for first-time buyers? Not every young person has the benefit of the banker mum and dad or family financial help to support them. So we think that that's fair to give them some lift. And if we can have that support, which isn't big numbers at the bottom of the housing ladder, we think that will improve the sector and get the market moving.

Thank you, Clyde Lewis at Peel Hunt. Land creditors and large sites normally go hand in hand, but obviously large sites don't necessarily help that ROE drive, so I'm just sort of... looking for a little bit of help as to whether you are going to be more or less happy buying the larger sites, which will allow you to probably drive that land creditor position a little bit more. That was the first question. The second question around London, and it's become a fairly small part of the group at the moment, again, given part of the market going on, but Where does London sit within your sort of strategic thinking now again, given that ROE backdrop? Third one was on the announcement yesterday from BAT, Red Pro and Persimmon around the loan scheme. Are you tempted to get involved in that reside offering as well? But again, where does that sit? from a margin point of view, more than a capital point of view. I'd be interested on that. And I suppose the last one I had was around demand for PRS and bulk deals. And are you only thinking about vanilla-type deals that you've done in the past, or are you thinking actually we can maybe change the structure a little bit and look to pull capital from them earlier as part of the deals that you might do?

I'll do the first two, you do the second two. On large sites, you're quite right, that's where the use of land credit is, but we're not buying, Clyde, lots of large sites at the moment. There's two guys sitting directly behind you that we'd probably invest in. Two strong MDs run big businesses in East Midlands and Manchester, and we'd probably invest in those locations. Maybe Milton Keynes too. So strategically, you know, where we think there's long-term demand. But, you know, other parts of the UK, we're probably small to medium-sized sites at the moment. In terms of London, listen, I love London, but the percentage of our business now in London, Clyde, is 2% to 3%. You know, we come out a few years back, as you probably know, we was as high as 20% of our volume in London. And I didn't exit London because I predicted where we're going to be today. Certainly not. It was just that the commercial terms were too hard for us to do business and Bellway was sort of priced out of London. But you do need a function in London market to deliver meaningful improvement in housing supply. And it's not there yet. The viability concerns in London are significant and the housing numbers in London are dire. We will continue building in London, but on the fringes, on the outside.

On the help to buy, that is some conversation that we've been part of as well. We're keeping a watch and brief on it. I think it's helpful. I think it's going to be a niche product. I think the participants would say that themselves, but I think certainly a welcome addition. We would have similar type measures, obviously, in terms of deposit support and all that for our home buyers. So we'll absolutely keep an eye on that and see just how it stacks up. I think fundamentally what's required there is some kind of state support for first-time buyers. I think everyone in the room would acknowledge that. I mean, there's a £500 or £600 differentiator in terms of what your monthly mortgage or payment will be, depending on whether you're fortunate enough to have a 25% deposit or a 5% deposit. And I think the thing that gives me heart has been relatively new still to this sector, just having worked in another jurisdiction, is every division I visit, rental levels are consistently higher than what debt service costs are. So that tells us that the long-term fundamentals are strong. So we will absolutely keep an eye on that initiative and see if it's something that needs more extensive participation from us. On your other point around PRS, I think it's a really interesting question. And yes, it's the quick answer to all of that. We will look at all of those things in terms of forward fund transactions, all of those things, if it makes sense for us in terms of asset turn and having greater return capability for shareholders. I think it gives the people running the divisions more tools in their kit as well in a market where You know, the HPIs are pretty much non-existent. You have to look at every capital efficiency that you can. So we look at forward purchases, we look at forward funds, all of those things. And we've no hard target or how high or low that number will be. It all just depends on whether it stacks up compared to the private sales rate and the private ASPs that you can get.

A couple of questions, one operational, one financial. Mortgage availability, we're aware that banks are allowed to change stress tests and also have slightly higher availability of higher loan to income. Has that made any changes on the ground currently and will that in future? And then secondly, the financial question is just on the dividend and wonder sort of how you judge the balance between dividends and buybacks and whether there's a thought to maybe sort of cutting the dividend or widening the cover to do more buybacks. Just wonder how the debate came out on the answers that we got today. I'll start with mortgages.

Charlie, I think what the banks have done has been really helpful. It's not going to move the dial. It's just to help. It's a movement in the right direction. Mortgage rates for two- and five-year money haven't really changed around, I guess, 4.25%, something like that. But being able to loan more is a help for first-time buyers. It doesn't solve the deposit problem. But it's certainly a move in the right direction. So we welcome that. Can I hand?

Yeah, I mean, I think, again, an interesting question. I think where we've landed, I think, is a good balanced outcome. I think if we were sitting here saying that the cash generation wasn't going to be significant over the next number of years, I think we would have to have a hard look at our dividend policy in relation to that and maybe flip into a buyback. You know, I think you're going to see probably a two to one split between buyback and dividends roughly, you know, assuming that that excess capital gets generated. And I think that feels right as a balance because I think having a dividend yield underpin is a good discipline for the business as well. Just in terms of the growth ambitions that we have and just, you know, shareholders knowing that they'll get a cash return from the business every year as well.

Morning, Chris Mannington at Deutsche. Can I just ask about strategic land and how it kind of configures in your outlet opening plans, your margin plans? Perhaps you can also comment on the relative margins versus the DPP land bank so we can understand what benefit it can bring in the future. Next one. Just curious about recoveries on the reinforced concrete frame. We have the Barrett Court case there, which seemed to open up avenues for recoveries. I know you can't recognise them, but would you hope to get some? And then also, is there likely to be anything different in H1, H2 splits? You can see him getting to the back end of the question queue with a question like that at the end.

I'm going to be... If I do, I'll do land and can I ask you to do recoveries, Simon, just to keep Simon involved. If our DPP land bank had a gross margin of 18% to 19%, we think the strategic land is 23% plus. If we are currently delivering 10% of our volume through the STRAT tier of the land bank, we think, Simon, that we can double that to 20%. It's an ambition, and we might miss it a little bit, but 20% by FY28. So they're the sort of numbers where we are on STRAT. It also gives us flexibility in the market. It's not just margin accretive, Chris. It just gives us a few options. So we quite like that, and you know we've invested in that for probably five, six years now. So it's starting to bear fruit. Is it worth you just commenting, Simon, on recoveries?

Just picking up on the strat piece as well, just interesting but very helpful, Chris. We're aiming to have around 80 planning applications running this financial year on the strategic land portfolio to give you an idea of what we're throwing at this to get our conversion through into the DPP ultimately. So there's a lot of work going on there to try and drive the outlet piece. On recoveries, yes, as you can imagine, we've got a very active programme generally across our recoveries piece. It's only recently, of course, we've been able to quantify our liabilities properly with all of the assessments being done. So on the SRT side of things, we're now gearing up to go after subbies and suppliers, and we've already recovered around £80 million thus far on that. And so far as the structural defects are concerned, We've got good prospects of success against those who were involved in the two schemes, as Shane's alluded to, and we are heavily involved in litigation on those as well. So I'd expect to see some sort of recovery, decent recovery in the fullness of time. But it's complicated, and it will take years rather than months to get there. But I'm determined to do so.

Can I just quickly loop back to the strategic land? Let's say you're up at 260 outlets by... Is that assuming you get that full conversion of 10% to 20% of strategic?

It's a dark hour. I just couldn't be more specific. There's too many moving parts in it, but we think it's doable. We wouldn't give you the number if we didn't think we could achieve it.

I think your other one was a H1-H2 split. Is anything funny this year? No, not really. I mean, we were pretty well for it's all coming into this financial year. So it'll be, there won't be massive 50-50, give or take, I'd say.

Not 70-30. All good. Thank you very much for your time.