Persimmon Plc

Hello and welcome to the Persimmon 2021 half year results presentation. My name is Jess and I'll be your coordinator for today's event. For the duration of the call, your lines will be on listen only. However, there will be the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero on your telephone keypad and you will be connected to an operator. I will now hand you over to your host, Dean Finch, Chief Executive, to begin today's call. Thank you.

Thanks, Jess. Good morning, everybody. As usual, I'm joined by Mike and I'm also joined by Martin Clark. So hopefully we're prepared for anything you're going to ask us. Can I just say I'm sorry if you had difficulty accessing the webcast first thing this morning. We're still looking into the reasons why. Hopefully you now have had chance to have a look at it. However, maybe if I just start by picking out one or two key highlights and then we can throw it open as usual to questions. So with that, I mean, what I would point to is I think, look, it was a good first half. We were pleased with the performance. You know, we have delivered, I think, a robust performance against the backdrop of COVID and Brexit. We saw completions of 7406. But within that, we saw private completions of 6104, which is about 2%, 2.5% up on 2019. You know, the order book is strong. Again, we'll reference back to 2019 given all the to-ings and fro-ings of 2020, which makes it a difficult year to compare to, but order book up 9% on 2019. sales rates up 20% on 2019. There's real strength in the market we saw in the first half of the year and I would point to the fact we're continuing to see that strength in the market. Obviously we're beginning to see a more return to a more normal season pattern but nevertheless I think we would all say that we're seeing maybe a stronger August in terms of sales rates than than we would normally expect to see, which is obviously very pleasing, and I think reflects that there is still strength in the demand, even though we're seeing some government stimulus coming out of the market. Particularly pleased to see the quality of the build in the first half, and I think we'll rightly expect that these are hygiene factors, but we are now delivering these, and I'm really pleased and grateful to the team for their hard work and delivering what I believe is a good quality product. We've made very good progress in terms of additions to our land holdings in the first half of the year. And this really is across the breadth of the country from Scotland down to the south, east to west. strategic and spot, you know, where Persimmon is able to continue to buy land well. We have a great team now strengthened by a group land team and those disciplines remain very focused within Persimmon. As you'll maybe have picked up from Mike's presentation this morning, you know, we've now got nearly 90,000 plots at cost to revenue of 11.9%. compared to 12.4% at December 20. So, you know, really strong embedded margins there in the business, which continues to improve. And we're obviously delighted with that. And on top of that, you know, look, we've got 25,500 plots under option and proceeding through planning, and a further 13,700 plots controlled and allocated in local plans. So we're in very good shape. The strength of demand has seen that we're something of a, I think, a victim of our own success, and so outlet numbers are a bit below average at the moment. In the first half, we saw outlet numbers of about 285, but as you've seen from the press release, we're opening 85 new outlets subject to planning in the second half of this year, and a further 85 new outlets are planned to be opened in the first half of next year. So that will take our average up. We'll be getting a bit ahead of 300 in the first half of next year, maybe 310. And that will continue to proceed during the course of next year on a fairly gentle glide path and then continuing into 2023. So there's really good momentum, I think, in the business. Much talk, of course, about bill cost inflation. And of course, we're seeing that, but I think we're managing that very well. Pricing is positive, net positive to the business. And on top of that, we're seeing that we're continuing to buy land well. And indeed, we've done some great deals in the first half, which puts us in a really good shape. In terms of completions, For the full year, we're expecting broadly a second half that will be similar, maybe slightly better to the first half. And then next year, we're looking towards targeting back towards 2019 levels of performance. Again, subject to planning. But the strength of the market is there for us and we just need to get after the build and deliver it. Pleased to see an improvement in gross margin from H2 of last year. at 30.8% to 30.9% in the first half of this year. And we'll continue to see improvements there as we look ahead. So overall, I think the business is in very solid shape. So with that, I'll open up to any questions for Mike and I. Thank you.

If you would like to ask a question, please press star 1 on your telephone keypad. Please ensure the line is unmuted locally, as you will be advised when to ask your question. So once again, that's star one if you would like to ask a question. And the first question comes from the line of Rajesh Pataki from JP Morgan. Please go ahead.