Vistry Group PLC

Good morning all and good to see you all. Welcome to the half year results presentation for 2026 for Vistri. Thanks to all those who are attending in the room and online. Today we'll talk you through our half year results but also cover the conclusions of our CEO review that we've carried out through the summer. I'm Adam Daniels. I was appointed as Chief Executive on the 13th of April of this year. I started my career in pure house building then moved into contracting housing before I joined the business in 2016 when I joined Countryside who were already doing partnerships at that time so I've got deep expertise in mixed tenure and partnerships house building I became part of history in 2022 when they acquired Countryside at that time a little bit what we're going to talk about today so I'll have a brief introduction into What we might go through and some of the early observations I've had during my time as Chief Exec. We'll then go across to Tim who'll talk about our half year results before we cover the CEO review. After that we'll look at current market conditions and outlook and then conclusions and clearly a Q&A. So just to open and set the scene a little bit, we started a review of the business in May which is a detailed work stream with external support, so an internal team working alongside an external team to really look at the business in a root and branch way, building up from the quality of the sites into the way we operate and looking at what we're doing well and what we're not doing so well. We acknowledge that the execution of our model since 2023 is not all gone as we planned, but there is very good reassurance in the work we've done that the model's worked excellently in some areas despite the difficult market conditions we've had during that time. We've made very good progress on deleveraging the business and improving that cash generation and we're continuing to see the outcomes of that work. And there's early actions being taken to resize the land bank and look at where we're reinvesting in new land to make sure we've got those suitable land positions for our mixed penny model. We talked as a last statement about half-won profit being impacted by cash actions and we'll talk about that and summarise that shortly. In very, very good news, the SAHP grant allocation was announced in August That was a £9.6 billion award across the affordable housing sector, going to 33 partners, 29 of which we're already in contract with up and down the country. We received £350 million of direct grants award, the top allocation in that award, clearly showing the market's confidence in history as a key deliverer of affordable housing. So a really good piece of news in August. Our refinance process is due to start in October as planned and we'll be aiming for less borrowing in the medium term as we bring down the size of the balance sheet and make the business less capital intensive. In summary, we are taking the necessary action to make this business less capital intensive, more profitable and more reliable. A little bit of progress on deleveraging. Just first as a bit of a headline, peak debt lower in FY26 than it was in FY25. despite poorer market conditions, despite the continued delay of the SHP until the end of August, you know, peak debt did not reach the levels in FY26, it did in FY25, good reassurance, and we're past our peak debt point for this year, so won't return to that peak again between now and the end of the year. In relation to overall leverage, good progress on land creditors, so we reduced land creditors by another £100 million since half one, and we expect to further reduce that by 17 million pounds by the year end. So paying down those land credit is reducing that overall leverage. Overall in 2026, expect a reduction of circa 300 million pounds during this year. We've started some work around reshaping the land bank. We made some good progress for how we reshape that to be more suitable to our model in the right areas, the right source of sites. And we've reduced land buying in H2 following that CEO review to ensure that we're really focused on the schemes that work best for us. In relation to private WIP, Morgan Progress, so unsold stock continues to fall. We talked in the July statement that we've made £300 million of progress in the year already, and we've made a further £80 million of progress since the half year. And as we talked about in July, we've exited our part exchange position, which brought in another £20 million of cash in quarter three. So good progress around Private Whip. What these things have allowed us to do is really look at the quality of the deals that we're doing with our partners. This is a business all about the quality of deals, the quality of land deals, the quality of partner deals that feed into those. So it's allowed us to step away and renegotiate some of those deals to improve returns and improve the quality of the underlying deals that are being fed into the business. Because of these self-help measures that we're making very good progress with, no expectations for an equity raise and we're very confident these self-help measures will deleverage the business as we work through the balance of 26 and into A few of Vistri's fundamentals I wanted to cover just at the start. Firstly, Vistri is an excellent business. Underlying some of the challenges that we'll talk through today, we've got excellent people, excellent quality, comfortably maintaining our five-star HBS status, great feedback from our partners, and that is giving us fantastic reassurance that the business remains in very good shape. We've got lots of highly motivated people with deep delivery expertise in what we do. What we do is different to the rest of the market and our people understand it and know it and operate it well. Clearly the segments of the housing market we work in have high structural demand. There is lots of need for affordable housing, mixed-tenure housing all across the country and therefore we're in a good place to deliver in that. We can prove through some of the work I'll talk you through today that when executed effectively this model delivers those low upfront capital requirements, really good flexibility between the partner demands and open market channels. And we've got a wide customer base between all of our private customers, our housing associations and our PRS investors that we can sell into. In summary, we are market leaders in what we do and we generate great value for our partners. The focus now is to increase the operational control, release cash and reduce complexity. There's an opportunity to really simplify Vistri and make it more reliable as we go forwards. So a bit of a snapshot of what I'll talk about later. So what is the vision as we move forward? We'll be industry-leading capital light, a specialist mixed-tenure house builder focused on that balance between partner-backed demand and open market. And clearly we'll prioritise cash conversion and returns over volume. The conclusion of the CEO review shows that we need to tweak the tenure mix to 60% partnerships and 40% open market and use that tenure mix in the right areas of our geography. We want a more focused and agile platform. 12,000 units is the medium-term target. of the business to realise that balance between volume and quality. We'll reduce the balance sheet targeting a much smaller owned land bank position of 36,000 homes and we'll make sure there's consistent adherence to that mixed tenure model all across the geography with an overall target of 30% plus low key by the median term. As we reshape the land bank, really focusing our land teams on the quality of opportunity rather than the quantity of sites bought and tweaking the regional structure to move from 25 to 12, really focusing around the quality of our site teams and project-led focus, something that I'll cover a little bit later on. Hopefully that's a little bit of a snapshot of what I'll take you through the detail with later on. Before I do that, I'll hand to Tim for the finance review. This is Tim's last action with us before Tim leaves the business very shortly. Just want to thank Tim for his work over the last few years and also thank him for his time with me over the last few months. I'm very pleased that we've made very good progress with Tim's replacement and we expect to announce a new CFO imminently. Thanks Tim.

Thanks Adam. Morning everybody. So we'll start, I'll talk now about the half year position, I'll come back later for a bit of a recap on the financial implications of the strategy after Adam's taken you through the strategic changes. So half year, we had an extensive July trading update and we had a conference call. So I'll try and avoid being too duplicative of stuff we've said before. I'm trying to race through the old news, if you like, on half year. So in terms of the group result at the half year, back in July we said our first half year was a £30 million loss excluding the impact of CEO review items. So that was clearly adverse to last year. Two principal reasons for that. One is that we took a lot of Discounting action the first half year to clear our stock down to generate cash The impact of that discount was around 50 million pounds of profits in the first half of the year And the other thing we saw in the first half of the year was that partner volumes were subdued there was a period of hiatus as partners waited for confirmation of what the new grant program is going to offer them and so there are less deals in the first half of the year than would normally have been expected The other thing we reported at half-year was that net debt was higher than last year, again impacted by the lower volume of partner deals. So that's the old news. The new news for the half-year is that we've now completed the C-year review process. We're still in the process of working through the details of the exact financial quantification of all of those items and also working out whether there are exceptional or otherwise, and also whether they should be booked in H1 or H2. Now that last bit, the H1, H2 piece, is complicated by the fact that the CA reviews started back in April, effectively, when Adam took the reins. So what we've done is identified 50 million pounds of charges, and I'll go through the charges in a bit more detail later, but 50 million pounds of charges that should be booked in H1. So this was because the actions were fairly well progressed. They were the lower hanging fruits, if you like, of the CEO review change. So these were things like accelerating closure of sites that we knew we weren't going to proceed with on the basis of the new strategy. They were things like the part exchange decision to take write-downs in part exchange, in a clear part exchange. So that's the 50 consults, the 30 we talked about before and the 83.3 that you can see on the slide for profits. The other two things that have been booked in the half year that we haven't talked about before are exceptional items. One around goodwill impairment, which I'll tell you about later, and also an additional charge on building safety. Right, so back to H1 trading. So as we've discussed before, the units were down 8% year on year and revenue down by a similar amount. That was largely with down to the partner volumes coming down. The open market volumes were actually up because of the discounting action, but overall net-net we were down 8%. In terms of pricing, despite that discounting action, actually pricing didn't drop. The average sales price went up by about 3%. And the reason for that is because a lot of the discounting action that we took was to more expensive products. So the stuff that tend to be slower moving were the four- and five-bedroom houses and probably more in the south than the north. and hence the actual ASP of our sales went up despite the fact that we were doing this discounting. A couple of other things to call out here. One is that land sales got in the first half of the year. It's something that we were evaluating. I think one of the things we've been doing over the course of the summer is pausing some activity while we identify the criteria that's appropriate for the new strategy. So I'll come back to some of the impacts of that later. So there were low land sales in the first half of the year. We expect further land sales in the second half. So land sales will be higher and not as high as the full year last year, but it will be higher in the second half of the year. And then finally, gross margin sales. The gross margin is adverse this year. If you add back the £50 million of cash generating actions and you add back the £50 million of CEO actions, our gross margin is a little above 10%. Working our way down the rest of the P&L. Overheads were down, so this is before the impact of the voluntary exit scheme and the further restructuring that Adam will describe later. Overheads were down because the headcount was lower from previous action. We took steps around the voluntary exit scheme back in June, which has resulted in a large chunk of the exceptional charge within the £10 million that you see there. The benefits of that will start flowing through towards the end of the year. And then quickly, net finance costs is up overall. There's a few movements within there. Average daily net debt was higher in the first half than the previous year. Land creditors, the average land creditor balance was also higher in the first half than the first half of the previous year, which both drove finance costs up. It's slightly offset by the fact that our average cost of borrowings was down to closer to 6% from being around 6.5% last year. And finally, to mention tax. So the big charges that we'll talk about later will generate tax credits and hence taxes and add back to profitability. So building safety. We took an overall charge in the first half of the year of £79 million, which is obviously higher than we expected. There was a surge in new buildings coming through assessment in the first half of the year. principally these were contracting business contracting projects where we've done the work back in the 1990s so we don't have any records of some of these developments that were put together by companies that were former incarnations of part of our business last year there was a pledge signed by developers which accelerated the need for assessments that acceleration led to more claims coming through in the first part of this year for the buildings where we have contractors, and hence an increase in the provision related to that. So that's the main part. 31 of the additional 40 buildings are contractor buildings. We would expect that we're not going to see a surge like that again. Sure, there may be some other buildings that come out out of the woodwork over the next few years, but we think that the volume should be significantly smaller because this should have come out by now. In terms of cash, about £27 million of net cash outflow on building safety in the first half of the year. That's net of recoveries that we received, and we received about £6 million of recoveries in the period. So Goodwill, I've got 10 slides of Goodwill, because I thought you'd all be fascinated to know about Goodwill. I haven't really. So where's Goodwill come from? Goodwill's come from the acquisition of three parts of the business, from Countryside, from Gallifrey Tri and from Linton Homes. all goes into one big bucket and it gets assessed when there's an indicator of impairment and clearly a lot has happened in the first six months of the year that has indicated that we needed to look at it so the market environment being difficult all of the noise that's created with the Iranian conflict our market capitalization has dropped and all the actions of the CEO review so all of that meant we needed to test it and we needed to test on the basis of a discounted cash flow based on our revised model so Again, I don't want to jump the gun, but we've got a different outlook for our five years, which got factored into the Group Will calculation. What gets spat out at the end of all of that is that more than half of our Group Will is impaired, so an impairment charge of £475 million. It's non-cash, it doesn't impact our covenants, it doesn't impact our ROKI, but in terms of headline profit, it's a big number. But let's walk through the half-run cash flow quickly. So we opened the year with an exit of £144 million. We made losses of £83 million. A lot of those CEO review costs are non-cash and effectively reduce inventories. So while inventories increased slightly and there's cash outflow in the first half of the year, the underlying inventory build-up was slightly higher than that. and where we're seeing that inventory build up net is in infrastructure on some of the larger sites. So that's where the inventory is trapped and that's fed into our thinking in the CEO review. More significantly, we've reduced our land creditor balance by over £100 million in the first half of the year. We expect further reduction in land creditors in the second half of the year. I'll pick up one more point in there which is around the net investment in JVs. Our investment in JVs picked up by £30 million. A large chunk of that was the funding that we put into the JVs to pay down the debt within the joint ventures. So joint venture debt and land creditors, our share has dropped by £23 million in the first half of the year. And then in terms of capital employed, so we always see capital employed jump up in the first half of the year. It's relatively seasonal. There's more activity in the second half. in the first half, and hence there's more capital employed generally in the first half. The impact was bigger than normal because the reduction in land creditors was abnormal. We don't normally see a land creditor reduction of the scale that we saw in the first half of the year. And so as land creditors goes up or land creditors comes down, capital employed goes up. So work in progress, we're making good progress in terms of getting rid of the unsold, getting rid of our stock, and we'll see more of that in the second half of the year, but as I mentioned before, it's the infrastructure investment that is offsetting that. So finally, giving a little bit more colour in the presentation to covenants, because we've been asked about it a lot, and there's no reason to hide from what is actually a pretty good covenant story, the significant headroom for all our covenants at half year you'll see the interest cover which gets a lot of focus was actually way above the minimum requirements and that's because that the way it's calculated with some of the ad backs to interest costs so significant headroom for the half year covenant tests one of the things we did though in anticipation of the impact of the CEO review was we engaged with our banks to say look these CEO review items that are coming out are going to impact our profitability we can't be sure about the treatment of exceptional or otherwise so let's be prudent let's talk about these covenants in advance so we're talking about the covenants at the end of this year and at the half year point next year and we've had a very active engagement with our banks many people in the room here today from our banks it's been a very supportive process and the banks have waived the interest cover covenants for the end of this year and the half year next year, recognising that these charges are one-off and the right thing to do for the business. So, you know, grateful for the banks for taking that area of uncertainty away. And I think what that demonstrates is the support that our banks have for fishery. And then in terms of growing concern, again, we've provided a lot of disclosure in our R&S to enable you to spend some time poring through the assumptions and assessing them. But we've looked at a severe but plausible downside case and concluded there was no material uncertainty on our going concern. That's been supported by obviously by the Board of Directors but also by the auditors and a clean opinion again for going concern. And I'll come back to the refinancing activity that we expect to commence in October later on. Good, that will do me for now.

So as I touched on earlier, I'll pause while I sort out some technical issues. Thank you very much. So as I talked about earlier, we did a root and branch review of the business. This is a very detailed piece of work with external support, working alongside our internal teams. And so we looked across all the sites in the portfolio, all the live sites, site by site review, and we did a detailed review of how we're operating, what's going well, what's not going so well. So the objectives were, how do we get this business performing rather than disappointing? That's a key driver. I've got real faith that this business can perform well, and how do we get it into that shape? We want to understand where the model works and where it's letting us down. What scale of business do we want to create that gives us the requisite quality of returns that we want? We identify how those best performing sites succeed and therefore how we replicate that and see where those worst performing sites are and how we avoid that in the future. And then following that, we shape the overhead to ensure we've got those high quality teams delivering on the plan. So the review assessed our geographic footprint. It looked at margin quality, capital intensity, risk profile, all across those schemes. It looked at a detailed review of the market demand for the 10 years across our footprint. And it looked at the implementation challenges since we started moving to all partnerships in 2023. And I'll talk through in detail what we found in those sites. We clearly looked at capital intensity and scale of the balance sheet. And we talked to our stakeholders, including our partners, about how we may improve as we move forwards. So key findings. Firstly, Vistri rapidly evolved through M&A. And that day was a differentiated mixed 10-year model at the end of that. History remains a high quality business. We have got the best relationships in the sector with partners, local authorities, landowners and our supply chain. And that transition from all the businesses we brought together into partnerships clearly offered some challenges. And the operating controls, culture and model didn't keep pace with that shift across to partnerships. And even though we had external market headwinds, that hasn't explained all of the underperformance in some areas of the business. And there was lots of site by site variability. There's been a big focus on short-term targets, short-term growth, and that's compounded a misalignment between profit and cash. And that significant variation in site form, as I mentioned earlier, involved inconsistent commercial terms, operating processes, and discipline around capital deployment, particularly into land and WIP. The product remains very strong, so excellent product for our partners, very good private product with very good quality. But all of the sites that we looked at that were performing well had a consistent set of site characteristics, which I'll talk you through. The summary is that a mixed tenure model is the right model for Listerine. There are attractive structural economics and great demands for the type of sites that we all bring forward. So how did we get here? In 2020, BOVIS acquired Galliford Tri Partnerships and Linden. That was the first step to add partnerships into the wider group in 2020. That was followed up in 2022 by the acquisition of Countryside, where they added more partnerships expertise into the business and from that point for a couple of years ran the business as a house builder and the partnerships business sitting alongside each other. In 2024 we shifted the strategy to all partnerships by discerning all the regions we've got into developing all the sites on a partnerships basis to try and maximise our capital efficiency and the 2024 step has shown some very good signs but wasn't executed exactly in the way that we should have done and caused us a few issues during that period of time. What it did give us, this rapid evolution in M&A, is great reach, very, very good people, really good capability in various areas of mixed tenure development, including partnerships and regen and mixed tenure. And so some great positives by this piece of work. And since 2024, I can evidence some really good sites since then. I can also evidence some missteps. The goal of the CEO review is to simplify the platform. This business is quite complex. has come from lots of different areas and we can make it a lot simpler. So I'm not telling you anything new on this slide. We've had market challenges since 2023. We've had high bill cost inflation, high interest rates. The RPs have come under pressure with funding and how funding has flowed. And we've had fluctuating consumer confidence. But I do want to talk about how a majority of our sites have performed well despite these market conditions and this weakness in the market. Just to talk briefly about the the mixed tenure model. So on this side, we've got how a house builder operates. They buy land, they don't bring any cash up front in land. Then they spend money building their plots. They bring a small amount of cash in through their RPs, through Section 106 units. And at the end, they bring all their cash back in when they sell their homes and hand them over to customers. They clearly want a higher gross margin, but there's more risk here and cash takes longer to come back into the business. From our perspective, we've got immediate recovery of cash up front. We buy our land and then we bring in cash from our partners straight away. 10% to 25% of the cash potential of the site arrives right up front. Following that, we build our units. Partners acquire circa 60% and therefore 25% to 35% of the cash comes forward as we build the site out, lowering the overall capital exposure. And at the end, we have a number of open market units and they recover cash, but far less than our house building counterparts. So we'll look for a lower overall margin. but clearly easier cash conversion and that cash converting more earlier on in the process. And this graph, I think, shows very clearly the advantages to that. So if you take the purple line, this is a house builder. Buys land that's spent a lot of cash, invests in WIP, and gradually over time, as they sell their houses, comes back to this break-even point. You know, we've seen that, and we see that in that model, you want a high margin because of the risk you're taking, and you'll deliver a lower row key. history sits between this pink line and the blue line in this shaded area in the middle. The pink line at the bottom is a mixed tenure site more balanced towards private so it's got a small amount of upfront capital because we pay our land payment the same as a house builder but we recover this element from our partners giving us a capital like start to site. On a mixed tenure basis we then do invest in the site with some WIP but that recovers more quickly as partners pay us on a monthly basis alongside at first completions. We get to this break-even point much earlier in the process. The blue line is our all-partner, what you may describe as contracting schemes, all-partner delivery schemes. So in these examples, we buy the land, but on the same day, we transact with a partner, they become cash-positive straight away, they're always very high road key, and they're always cash-positive through to the end. Lower margins in the blue line, because road key is extremely high and there's no cash investment, and better margins between 12% and 30%, depending on where on that scale we sit on the pink line. So I think a really good graphic to show exactly why mixed tenure should make us lower risk, more reliable, and more consistent. So short, such shallow troughs, 60% of the model funded from our own partners, and earlier break-even points versus house builders, which require greater capital investment. So when we reviewed the sites, they ended up in two areas. Good sites on the left, and underperforming sites on the right. And the good sites had three consistent things we wanted to see. Low peak fund requirements, greater than 40% ROKI, and a margin best than 12%, all the way up to 30% plus margins in some of the sites. In underperforming sites, we had schemes that exhibited weak performance, mainly around balance sheet drag, so money going out the door without quick enough recovery, challenges related to tenure mix, so how does the open market play alongside the additionality affordable and the PRS, and poor commercial terms on transactions. And we could sort these into those areas and create a clear and concise list of the sites that we've got in our portfolio. What the CRO review has done is converted these site level lessons into mandatory investment criteria, which will drive the future quality of our land, meaning we get more repeatable cash, margin and returns. And I think this pie chart is really interesting. If you look at the partnerships model, what our findings said is that 59% of our business, as it is today across all of our active sites, are performing well. 18.5% gross margin average in the 59%. That's a really reassuring stat. So despite all those market headwinds that I gave you at the start, despite the fact we've had those inflationary environments, low consumer confidence, et cetera, gap in funding, 60% of the business almost is doing exactly what we expect it to do. And this is a picture of what this business can achieve when executed effectively. So a really, really reassuring pie chart that shows the purple is a great underlying business. The light blue shows some sites that have underperformed. And you're always going to get an element of the light blue. We're a developer. We take some risk. Sometimes things don't go quite as you planned. So you're always going to get an element of the light blue that holds back your performance. And in the grey at the top, that's the part of the business that really isn't performing, really is an area that's holding us back and not allowing us to show off the benefits of this 59%. So you can see here by the detailed work we've done, the reason why we're recommitting to mixed tenure is because we have evidence that it works. It works in the right geographies with the right tenure mixers. And with this average gross margin of 18.5%, with an estimated operating cost of around 5%, that 12% target that I've talked about in the future in the R&S this morning is very, very achievable. So I'm going to take you through a couple of sites, a few really good performers and a few that are holding us back. This site is in the Northeast. It started in February 2020 and finished in September 2025. So it went through that process. It went through COVID. It went through high inflation. It went through poor consumer confidence. 375 units, a good scale, and a very, very strong gross margin. 25% on a mixed 10-year basis, a 45% open market, and 55% additionality through PRS, affordable, and Section 106. an extremely strong ROKI and low cash tie-up at any point through the job. So land payment went out, land monies came in from our partners, made us zero cash at the start and through that, the cash generative partner work paid for our WIP investment on the private. So no cash tie-up, extremely high ROKI, fantastic margin. And you can see this is a finished site in difficult market conditions. So face those market headwinds and yet achieve some very, very good returns. a fantastic example of what is achievable even in difficult times. Here's a second example in the North West and I want to talk about this site because it shows how our 10-year flexibility should allow us to follow the market and that's what a partnership business should do. Our business should follow the market conditions and not speculate. Householders speculate, they buy land, they hope that they're going to get the private price that they want, they make better margins. We should adjust our plans to follow the market. So we bought this site in November 2024 and When we first bought the site of 250 plots, we were expecting to do 50% additionality affordable and 50% private. As we got through the market conditions we'd been in, we said, you know, is private as reliable as we want in this market? Do we think we're going to sell at the rate we expect? And so we went out and we got an offer for taking 50% of the site as PRS. So we decided that in the market conditions we're in, making this lower risk all pre-sold would be a better outcome. the margin reduced slightly from 23 to 20 to allow for that discounting to bring in the POS but as you can see the Roki went through the roof to 311 and we still maintain a very strong margin percentage with a max cash tie up of 4.1 million so a very well structured partnership arrangement cash positive very early in the process very low cash upfront investment and an attractive scale of circa 250 plots but this is the benefit of the model if you're in a better time on private and you approach this site, you'd sell your 50% private, you make a bit more margin, and it will still keep a low footprint on your balance sheet. If you're going into a market where private is less reliable, you can move it into partnerships and tie down your risk and keep your cash investment lower and drive your return on capital employed. So a really good example of following the market with our model rather than speculating. So what are the themes of those successful sites? And I'll allow you to read these in the packs in detail. But I'll call a few of these out. So where we've got that strong regional demand, something I'll come back to a little bit later on, concluding our land deals back to back with the partners. We've got to make sure that when we expense our capital and capital flows out, the partner is ready to give us that capital back and make sure those sites fit in a capital-like fashion on the balance sheet. The locations and the proximity to infrastructure that our partners want, clearly very important. And standard house sites clear to any strategy and manageable complexity of infrastructure. We don't want to be spending millions of pounds on infrastructure going out unless the partners there are working with us to deliver those sites. So a key set of site characteristics that are now embedded into the investment committee decisions that we make and in our controls of new site delivery. So an example of a weaker site. This site's in southern England. It was bought in April 21. When we converted to partnership, there was an attempt to convert this site into a partnerships-type scheme. You can see how the tenures were adjusted. So this would originally have been an open market site with Section 106. When we flipped into partnerships, there was an attempt to try and move this into a partnerships-tenure mix. The challenges in this part of the country are very, very high open market average selling prices, which do not sit as well alongside additionality affordable and Section 106. The second issue, we're making very substantial land payments, £66.3 million of cash drive on this site at one time, and that cash is going out without income coming from our partners. And so you've got a big tie-up on the balance sheet, and that's taking longer to recover. And as you've seen through those market conditions, because the way the partner deal was structured, because the land payment terms didn't match the outflows, and because the exposure to that high value open market sales price margin has declined quite rapidly, through that three-year period. And this is one of those sites in that grey section of the pie chart that I talked about earlier that is holding us back and really not letting us show off the quality returns that this business can make. So inconsistent site-level execution. Implementing the model effectively, getting the right commercial returns of our partners and making the operating model more efficient. And one I'll draw your attention to is this over-speculative land positions. We will follow the market and not speculate will buy land that's in the right locations and that's got the right amount of partner and open market interest. So just an example of what that over-speculation on land can lead to. So this is a site we bought previously. It's 2,000 plus units, purchase price of over £100 million and large infrastructure costs. So a big investment for the business. It's a cracking site. Very high quality site, great location, very good price paid. But we've paid £30 million in land payments out in the first period of time before we secured our partner deal. So we speculated that we'll buy this site and a partner will be there to take a portion of it for us and we'll be able to back off some of that investment into a partner, which we eventually have been able to. But the gap between that investment and the income has been too long. So we've had £30 million investment and balance sheet drag before the time at which we've been able to bring the partner income in. So we do this site exactly the same in the future in relation to this type of site that quality of the scheme etc but we would pair these land payments to stages at which we would receive capital so you would not conclude this site until your partner has contracted on their side and that you're a guarantee of inflow and then you'd match your partner payments to your land payments out to keep that capital line much smoother you'd still have money invested here which is fine but not to the scale or the values that we've seen in this example so