Persimmon H2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
March 11, 2025

There are 12 speakers on the call.

Operator

Thank you for being prompt, and Thank you for being here. I gather there's some event outside of Cheltenham, which we must be prompt this morning because I'm sure our Chairman will be keen to get there. Maybe speak to him afterwards for some tips. Anyway, thank you for joining Andrew and I this morning. I'm really pleased with these results and achieving our ambition of a rapid return to growth.

Operator

As you'll see in the presentation, we're well positioned for more to come. I'm joined by members of the team today, including our new UK Managing Director, Ian MacPherson. So please do take the time to speak to the team afterwards. First, let me turn to some of the key highlights of our results. They demonstrate our performance and our return to growth.

Operator

As you can see, we've grown underlying PBT by 10% to GBP $395,000,000. We've delivered a 7% growth in completions to GBP 10,664. Our sales rate in 2024 of 0.7 is also up markedly compared to the previous year's 0.5 out. We've grown our owned land bank by 4% to 69,000 and our total number of plots in our short term land bank is over 82,000 giving us excellent visibility for the year ahead. Build quality and customer service is at a record high with the HBF eight week score at 96%.

Operator

Added to which, our current forward order book is up 12% to billion and our private forward order book is up 27%. And finally, our underlying EPS is 92.1p, up 12% on the previous year. I want to turn to our strategy before handing over to Andrew to take you through the results in more detail. Although there'll be bumps in the road including the building safety levy and future home standards and of course, volatile macroeconomic and geopolitical risks, we're optimistic about our growth prospects over the medium term. Our high quality land bank and strong pipeline of outlets will ensure we continue to grow.

Operator

A greater emphasis on our three distinct well positioned brands will provide diversification for the business and give us opportunities to leverage our sites for additional growth. Our significant progress on build quality and customer service means we're better able to compete for customers, drive value and pricing in the market and target further improvements in our sales rates. Innovation and our vertical integration is critical to our strategy. As I'll cover later, we're investing to enhance and expand our unique capabilities that will deliver real benefits to the bottom line. And finally, we remain resolute in maintaining a strong balance sheet, which we will expect will strengthen following the conclusion of the majority of the building safety works at the end of next year.

Operator

These five fundamental qualities delivered by our experienced teams across the group will contribute to both an improving operating margin and return on capital and will underpin increasingly stronger shareholder returns. What's more, they're supported by strong market fundamentals and a very pro house building government. Our ambition is to target a margin on ROCE of over 20% over the medium term. In all the areas mentioned, we've well developed and stretching plans for further improvement. I'll say more on them when I return, but first, Andrew.

Speaker 1

Thanks, Dean. Good morning, everyone. And it's a pleasure to be here presenting my first set of full year results for Persimmon. So I'm really pleased to be able to report a strong financial performance in 2024. Thanks to the hard work of our colleagues up and down the country, we've delivered a return to growth.

Speaker 1

And this was against the backdrop of some uncertainty at the start of last year, so it is an excellent performance. So to draw out a few highlights, we delivered 10,664 new homes, that's up 7%. Our blended average selling price increased 5% to $268,500 and I'll come back to the components of that on the next slide. The combination of volume and pricing drove housing revenue up 13% and gross profit up 12%. Pleasingly, our adjusted operating profit increased million to million And despite the challenging backdrop, our underlying operating margin increased to 14.1% ahead of consensus expectations.

Speaker 1

The margin is still held back by the inflation that we saw in 2022 and 2023, but it's worth noting that build cost inflation was much lower last year. Operating margin remains industry leading and I'll come back later to how we plan to grow it further. Underlying profit before tax is up 10%. This includes a million increase in interest costs because of the lower cash balances entirely as expected. And PBT here is stated before exceptional items, which I'll touch on later.

Speaker 1

So taken together, underlying EPS has increased 12% to 92.1 p. We generated cash of $89,000,000 before file remediation works and dividends and have continued to invest in new land for the future. Our return on capital employed has increased to 11.1% that reflects the improved profitability and our balance sheet discipline. So I'll now come back to the sales mix and ASP in more detail. So of the total new homes delivered 9,075 were private, that's 18% higher than last year, driven by sales rates, by outlet numbers and bulk sales.

Speaker 1

31% of these were to first time buyers and that is an important market for us. Private sales included over 1,400 investor bulk sales across a number of sites and that's more than twenty twenty three and in line with our strategic approach. Partnership's output fell to 15% of total completions, but from a particularly high point in 2023. And I think 15% to 20% of completions going forward is about right. So overall, you can see completions were balanced well balanced between the North and the South.

Speaker 1

Private ASP increased a small amount and bear in mind that's after allowing for more bulk sales. Overall pricing has been robust and we've pushed it where we can particularly in the second half year. Our product remains affordable with our Persimmon homes average selling price 20% below the new build national average and with over 60% of completions below Across the period, average incentives on completions were around 4.5%, that's similar to the second half of twenty twenty three, but of course it's off more robust pricing. Our blended ASP was up 5% and in combination with the increased volume that drove revenue up 13%. So this slide provides a normal bridge showing underlying operating profit movement and you can see the positive effect of increased volumes, increased average selling prices and the mix of more private units.

Speaker 1

The movement in the cost line is small and it's driven by the build cost inflation in the year. And we're very focused on our commercial disciplines and managing these costs closely. Net operating expenses have increased million. That's a 7% increase, so less than the 13% housing revenue increase. So it shows improved overhead leverage.

Speaker 1

And it also includes some investment to drive future sales, for example, in our sales and marketing capabilities. The bridge here is on an underlying basis. There are net exceptional items of million in the year. This is the million impairment of our investment in the Top Hat modular business that we announced at the first half year. There's a net million adjustment to our building safety provision and the GBP 7,500,000.0 of other one off project costs.

Speaker 1

So I'll now turn to the balance sheet. A strong balance sheet is a platform that allows us to invest in the future growth of the business. Land and WIB have increased million over the year as we've invested in more land than we've utilized. We held GBP 154,000,000 of PX stock at the end of the year and this is an important sales tool for us and we continue to turn these properties quickly into cash. Land creditors have increased showing that we're still able to agree favorable terms in the land market.

Speaker 1

We settled million in the year and I'd expect to settle a similar amount in 2025. We reported net cash at December of GBP $259,000,000 and even together with our land creditors that means our gearing remains below 5%. Our building safety provision stands at GBP $235,000,000 down from $283,000,000 at the start of the year. And I'll come back to this in a moment. Net assets are 2.5% higher and net assets per share 26p higher than this time last year.

Speaker 1

So this is a strong balance sheet and it's something I've been really encouraged by since joining the business. So I said I'd come back to building safety provisions. The most important thing is that we are getting on with the remediation work and we're making good progress. We are on-site or completed at over 70% of known developments and that's over 80% of buildings and just one additional development came into scope last year. And importantly, we have assessed all loan developments.

Speaker 1

During the year, we spent million and that brings our total spend to date to around million. And I expect us to spend around million again in 2025. The provision at thirty first December was GBP $235,000,000. So you can see that the bulk of the remaining spend will be made over the next two years or so. Getting on with this is the right thing to do and it also creates capital allocation opportunities for us in the future.

Speaker 1

So this is the normal cash bridge. We told you this time last year that we expected cash to reduce in 2024 and you can see that the year end position is very strong, even though we've invested substantially in new land over the last three years. Cash inflow from operations was £420,000,000 In the year, we invested million into new land and the net cash flow into new land after utilization of and movement in land creditors was million, and that's about investing in future growth. WIP and other working capital movements of GBP 61,000,000 includes the increased PX Holdings. We spent GBP 102,000,000 on interest and tax.

Speaker 1

And so before building safety remediation and dividends, we had net cash generation of GBP 89,000,000. And this was a net cash inflow of GBP $2.00 2,000,000 before the GBP 113,000,000 net investment into new land. In other words, our model is cash generative and sustainable even at the bottom of the cycle and we will generate strong cash as we grow. So we spent million on our safety remediation program and million on dividends in the year. As I said earlier, it's important to bear in mind that in a couple of years' time that building remediation work will be largely completed.

Speaker 1

And so the additional capital allocation opportunities are there to grow the business or to increase shareholder returns. So let me now come back to the investment into land. Disciplined investment into land is key to our growth ambitions and we've continued to invest in 2024. And it's this investment that has allowed us to grow our outlet base and return to growth. We've also had significant number of planning successes benefiting from the improved approach to planning applications that we've introduced.

Speaker 1

We obtained detailed planning consents in the year on over 13,000 plots, so about 120% of last year's completions. At December 31, we had over 40,000 plots owned with detailed planning consent, 5% more than last year. Together with those proceeding to planning, we've over 69,000 owned plots, up 4%, providing good visibility for our pipeline of future site openings. It's also worth drawing attention to the cost to assumed revenue in the owned and controlled land bank of 11.7% in the bottom right hand corner of the table. This is very good and is an important indicator of future margin potential.

Speaker 1

So I'll now spend a little bit more time on our embedded margin and on our margin potential. Our land holdings are very high quality. The average embedded site margin within our owned land holdings is still 29%. Within this 92% of our plots will deliver a site margin in excess of 2076% of our plots will deliver a margin in excess of 25%. This is site margin, so there's some other costs within statutory gross margins such as maintenance spend and our fixed selling and construction cost base, but this is shown on a consistent basis to previous years.

Speaker 1

It's also pleasing that the land cost to assumed revenue ratio has stayed very stable over the last few years, demonstrating the benefit of us having continued to buy land during the downturn. So taken together, this provides confidence that we've got the land in place for our growth ambitions. And I want to explain how this feeds into our margin progression. So we said in the summer that we expect medium term margins to grow back towards 20%, assuming stable external market conditions. So I'll spend a few moments just talking through the key building blocks, which are illustrated on the graph.

Speaker 1

We've retained the operational capabilities, the geographic footprint of the business, even though our volumes are a third lower than in 2022. As we recover these volumes, which we've begun to do, that will drive improved leverage of our overhead base. And you can see that as item one on the chart. Secondly, we'll draw a higher margin Charles Church brand quicker. In 2024, Charles Church delivered nine forty seven units, so less than 9% of our total delivery, but generated a gross margin four percentage points higher than our Persimmon brand, demonstrating the value that we can get.

Speaker 1

The third item there we can see, we will also continue to drive efficiency through our vertical integration. And Dean will come back to both of these two points shortly. The embedded inflation from 2022 and 2023 will reduce an impact as our newer acquired land comes through to production. And on the right hand side of the chart over the medium term, we expect house price inflation and build cost inflation to track more closely together. But coming back to points five and six, it's important to say that this won't be a straight line progression.

Speaker 1

Regulatory changes, including the building safety levy will come into play and dampen the short term growth trajectory until those items are fully factored into land prices going forward. And of course, beyond this, our margin progression will be accelerated or held back by macroeconomic drivers, but we're confident with the elements that we are controlling. Our operating margin is already higher than our direct peers and we have a clear plan for future margin progression and increased return on capital as a result. The structure of our capital allocation policy will be familiar to you. We will maintain our strong balance sheet with low leverage through the cycle.

Speaker 1

Alongside this, we're prioritizing dealing with our building safety remediation. And for context in 2024, the cash spend on remediation works equated to about 18p per share. Secondly, we'll continue to invest to grow our number of outlets driving organic growth opportunities. And we've deliberately continued to invest in land at the bottom of the cycle over GBP 1,500,000,000.0 in the last three years. This has reduced our current cash position, but provides a platform for growth.

Speaker 1

And we'll pay a sustainable dividend, well covered by profits through the cycle. To be sustainable, we won't over distribute as we need to continue to invest in growth. Given the strong performance in 2024 and the good outlook, I'm pleased that today we've declared a final dividend of 40p, which represents a full year dividend of 60p with underlying dividend cover increasing from 1.37 to 1.54 times. And as we deliver our growth plans and progress our fire remediation works, I'm confident that the dividend will grow as a result. So to summarize, 2024 was a very strong financial performance and we're anticipating further growth in 2025, assuming that the macro conditions remain stable.

Speaker 1

Key elements of twenty twenty five's guidance are on the slide. I'm not expecting any significant change to current consensus today. Key points to draw out on the slide are volume growth to over 11,000 units, further operating margin improvement to around 14.2% to 14.5%. And you can also see our continued planned investment into new land. So I'm looking forward to the new financial year with confidence.

Speaker 1

And with that, I'll hand back to Dean.

Operator

Thank you, Andrew. I said in 2023 that I wanted us to rapidly return to growth. I'm therefore delighted we achieved this in 2024. I'll now turn to our strategy in more detail and our optimism for the future. It's great to see the business growing again.

Operator

In the rest of the presentation, I'll show you why our strategy provides us with optimism in the future. Our strong balance sheet and land bank combined with our improved planning performance is driving growing pipeline of outlets. Our record quality and service scores are enhancing our reputation and helping us to sell more houses. Our investment in sales and marketing is generating more inquiries and improved sales rates. Our three diversified brands provide the opportunity to drive volume, margins and returns.

Operator

Our investment in both innovation and vertical integration capabilities will drive greater volumes and further enhance margin. And while none of us can predict the macroeconomic dynamics, the government's broader pro house building agenda and welcome planning reforms could provide a tailwind adding further outlet growth given our strategic land bank. Our strategy delivered a turning point in 2024 and 2025 has so far started well. We believe we are very well placed to deliver further growth ahead. I'll now say more about specific areas in turn, and I'll start with our proactive and disciplined approach to land and planning.

Operator

Over the last three years, we've invested over billion in new high quality land opportunities. I personally visited them all and I'm very excited by them. We did this at the right point in the cycle. During a period of relative price stability, we maintained our investment. In fact, Sevels recorded a 9% fall in greenfield land prices between September 22 and March 24.

Operator

Combined with our planning commission success, this is driving outlet growth. As Andrew has shown, our embedded margins remain strong and our land buying now incorporates the various new regulations and levies the government has either introduced or is planning to. While the planning backdrop has been challenging in recent years, we focused on how we could better help ourselves. By improving our applications and proactively engaging with local authorities, we've seen a real step change. Against a flat industry trend, our 21% increase in full or RM permissions is stark.

Operator

We secured over 13,000 approvals last year. That represents over 120% of our completions, giving us excellent visibility for the year ahead. We started this year even stronger with a number of successful full or I'm permissions more than doubling over the first two months of last year. We've also innovated rather than wait for government schemes or policy to address challenges. Take nutrient neutrality.

Operator

Our Anglia team secured a wetland solution that's not only unlocked 1,000 plots, it's done so in a much more cost effective manner than the alternatives. So our proactive and disciplined approach has built a platform for growth. Put it all together and we've grown our outlets in 2024 by 5% against an industry decline of around 5%. And we have a strong pipeline of openings for '25, where we're targeting around 100 new openings. We're on track to deliver our target of 300 outlets possibly within the next two years.

Operator

This has been achieved before any real impact has been felt from the government's welcome planning reforms. In the coming years, they could add to further growth. Our strategic land bank will of course play an important role in our growth and it's to that I'll now turn. Our high quality and large strategic land bank is a source of strength for us. It contains 70,000 plots across The UK at excellent margins, typically 3% to 5% higher than open market values.

Operator

Strategic land provided 42% of completions in 2024. Most significantly, as you can see, we're broadly converting and replenishing at the same rate, while maintaining our disciplined hurdle rates. As you'd expect, we're looking at our land holdings to take advantage of the government's new planning policies. This exercise has identified 38 sites with around 7,500 plots so far. We're constantly reviewing our portfolio to assess whether circumstances mean we should add further to this.

Operator

Our large strategic outlets also provide opportunities for multi branding sites, driving volume, returns and operational leverage. Taking all this together, our strong strategic plan pipeline will continue to provide a platform for growth over the next decade. I'll now turn to build quality and customer service. As you can see from the slides, Persimmon is now delivering its best ever customer satisfaction and build quality. We're building well designed homes in attractive communities.

Operator

We're doing this with a consistent quality and high level of service. Our HBF eight week survey score is at a record 96%. Over the last five years, we've gone from bottom to third amongst our industry peers. And our Trustpilot score has improved to 4.5 stars. NHBC reportable items, a key measure of build quality, improved 7% in the year.

Operator

They're now 60% better than they were in 2019. Our CQR compliance scores have improved over 27% since we joined to 90%. We achieved our best result in over a decade by winning 19 NHBC Pride in the Job Awards. It's a real credit to each of our successful site managers and their teams, and I know the teams are striving for even more this year. I was also delighted that Dame Judith Hackett, author of the government's Building Safety Report after the Grenfell disaster, recently commended our industry leadership on building safety.

Operator

In short, we have a strong and growing reputation for quality and service. Build right, first time, every time is an ingrained feature of Persimmon today. I've no doubt that this improvement in quality and service is helping us drive growth. I'll now turn to sales and marketing. The data clearly shows that with improved reputation for quality and service, customers are increasingly considering Persimmon.

Operator

Both consideration of and trust in the Persimmon brand has grown significantly in recent years, up 2614% respectively since 2022. From this improved position, we've invested in new teams and systems to generate more interest in our homes. So far this year, the year on year growth is particularly strong with a 51% increase in website visitors and a 20% increase in inquiries. As the graph shows, this has been a consistent improvement since 2022. Our campaigns are better and our marketing materials and approach are more sophisticated.

Operator

We'll launch new enhanced interactive customer websites this year. We'll also start using marketing cloud later this year, allowing granular targeting of customers, customized information to support them through the sales process and much greater insight to inform our campaigns. Last year's sales rate was up 21% on year. While that shows progress, we focused on converting even more of the increased interest into additional sales. We've invested in our sales teams and now have a regular mystery shopping exercise to ensure we're implementing best practice consistently.

Operator

And we'll add sales force next year, significantly upgrading our CRM. Combined with marketing cloud, this will provide a further step change in our personalized marketing to potential customers as well as improving our conversion rates. We're also looking to grow the presence of all three brands to drive volume growth, margins and returns. And I'll turn to this now. We have two strong brands focused on the private customer.

Operator

At 20% below the market average selling price, Persimmon Home remains incredibly well positioned. It has simple and standardized house types that are quick to build, often using materials that we produce ourselves cost efficiently. Charles Church is clearly a distinct product compared to Persimmon Homes. It is also a highly valued brand with customers willing to pay more for it. As a result, it delivers higher margins, over 400 basis points above Persimmon Homes in twenty twenty four.

Operator

Our sales of Charter Church are also growing. We grew private completions in 2024 by 30% compared to the previous year. And we believe there's an opportunity to grow its contribution further. Charles Church is positioned to a distinct market segment that while cost conscious is prepared to consider a premium for a higher value product. Our research shows there are these premium, but cost conscious markets in all regions of The UK.

Operator

We've analyzed our nationwide land portfolio to identify where we have new opportunities to capture these premium but cost conscious markets on existing sites. We're also adding new land opportunities to further strengthen our Charles Church pipeline. We've reinvigorated the brand, launching a new product range of house types, as well as a thorough revision of the specification to enhance Charles Church's appeal to its target customer segment. You can see the recent launch at Halston in Northamptonshire in the photo. Our ambition is to double Charles Church's contribution to the group.

Operator

And when used as part of a multi branding approach on sites, it will also grow volume, returns and operational leverage. I'm excited as to what more we can do with this brand. But it's not only Charles Church. I believe our third brand Westbury is ideally placed for both the BTR and the Section 1 Hundred And 6 housing markets. The BTR and affordable homes markets look set to grow.

Operator

As this Savills data shows, last year a record billion of investment into the build to rent sector. This has more than doubled over the last decade. Within that figure, the dynamics are also interesting. Rather than flats and apartments, the majority of deals were outside of London and around half in single family housing. Both those are strong markets for Persimmon.

Operator

We targeted this growing market and doubled our sales year on year. Affordable housing is also set to be a growing feature of the market as a result of the government's ambitions. The fact nearly GBP 1,000,000,000 has already been added to the affordable homes program this year demonstrates its priority. We await the outcome of June's spending review, but expectations are for an increase. We expect to deliver more Section 106 homes this year than last.

Operator

And while there are clearly some challenges with RP financing, I'm really pleased that we've secured nearly all of our 25 delivery at this stage. Just as with land and planning, we're being proactive in building relationships of partnership and trust. With our improved reputation, we're driving growth in these growing segments, and the opportunity provided by build innovation and our vertical integration is also particularly relevant to the needs of the BTR and affordable markets. And it's to our innovation and vertical integration that I'll now turn. We focused our investment and efforts on areas of innovation where we can secure tangible returns.

Operator

A good example is how our construction teams are digitizing our on-site processes, which is giving us a transparency at site level that we've never had before. With the closer monitoring of activity, we've seen quality, health and safety and customer service benefits. And while this might sound very sad, it's also opening a really exciting opportunity to digitally track materials and reduce costs. Our vertical integration capabilities have been a real strength for Persimmon and we continue to invest in them. They provide security of supply for key high quality materials and real cost efficiency benefits.

Operator

Our teams continue to increase their use of our products and today we manufacture over half of the bricks and 85% of the tiles we use. Combined with our bricks, tiles and timber frame kits provide a per plot cost saving of around GBP 5,500. This has helped us mitigate some of the recent build cost inflation supporting our margin improvement. And we've invested further in these key assets. As the photos show, we're upgrading our existing Space four factory with a new state of the art automated line.

Operator

Installation will be completed in the summer and it's a real step up. The new equipment will allow large frames to be manufactured and enable more of the on-site assembly work to be done in the factory. We'll also now be able to produce roof trusses. The automated production line will improve in factory efficiency and the finished product's consistency of quality. But these products will also improve on-site efficiency with faster assembly.

Operator

Our planned second Space four factory near Loughborough will provide a further step change. It will have a similar state of the art automated production lines and allow us to broaden the range of timber frames, products we manufacture across both factories. We continue to work with the Maurer team as they develop the industrialization process for their brick facade product. As well as the trial house we erected combining our timber frames and the facade last year at a Space four factory, we're now planning an on-site trial this year. I've spoken before about the significant opportunity here.

Operator

With our frames combined with the now facade in the new factory, the superstructure including a tiled roof could be erected on-site within five days. This will be a step change given it typically takes twelve weeks to reach the same stage on traditionally built houses. Being weatherproof so quickly will also give us much greater control over our build program. And all the products used to get to that stage could be manufactured in our own factories, giving us security of supply and cost benefits. But the really exciting part is that the combined timber frame and mild product provides the opportunity to double our output of timber frame homes, while using the same amount of on-site labor.

Operator

This could mean an additional output of 2,000 to 3,500 homes per year by the end of the decade. It could also double the cost saving achieved from our vertical integration from around 5,000 to 10,000 a plot. This product with its factory shield quality and increased certainty of delivery time fits very well with the requirements of the growing BTR and affordable housing sectors. It's a real opportunity to drive build rates and returns on these sites, plus mitigating some skill shortages such as bricklayers. This innovation and investment are therefore again strengthening our platform for future growth.

Operator

It's driving greater build speed and efficiency. It's providing greater security of supply. It helps mitigate our exposure to build cost inflation, supporting our margin improvement ambitions, and it could enable a step change in volume growth. Before concluding, let me take you through our good start to the year. I'm really pleased with our sales since the start of the year.

Operator

Our private forward order book is up 27% against last year. This includes a 23% increase in the number of homes sold and the ASPs up by 3%. As you can see from the slide, private sales are good in the first nine weeks of the year. Including bulk, our sales rate is up 19% compared to last year at 179 sales a week. Excluding bulk, it's up 8% to 158 sales a week.

Operator

Cash incentives on gross reservation so far this year are down on last year, even though pricing is stronger. As I said, it's a good start to the year. And it gives us further confidence in the guidance we're giving today. So finally, let me come back to a previous slide that sums up what we're doing and what we hope to achieve. I'm really pleased with the results we presented today.

Operator

What I've also set out today are the reasons to invest in Persimmon. And whilst none of us can foretell the macroeconomic uncertainties and geopolitical risks, our strengths are clear. We have a strong land bank and growing pipeline of outlets with three distinct brands well positioned in their markets. We're delivering record build quality and customer service. Our deepening investment in vertical integration could drive a step change in volume.

Operator

And our commitment to a strong balance sheet is resolute. Importantly, our principal liabilities inspect in respect to fire safety remediation are known and controlled. Put simply, we're a growing business capable of delivering even stronger returns to shareholders in the years to come. The strength of our 2024 performance and our platform for growth both support our optimism in the future. It's a future I'm excited by.

Operator

Thank you. Take any questions? First hand up. I'm just going to get a mic. Sorry.

Speaker 2

Thank you. Ami Galla from Citi. A few questions from me. First one was on the margin. Thanks.

Speaker 2

You've given us some helpful color on the 2024 margin moves. The exceptional that you flagged, is that going to be a tailwind next year? Or are there any one offs in the pipeline in 'twenty five as well that we need to acknowledge? On the sales and marketing investments that you've made, you touched upon further initiatives that you're talking about into 2025. Can you quantify how much of that would be an investment in our in the margin moves in 'twenty five?

Speaker 2

And connected to that on the margin point, can you give us some color as to how have the bulk sales contributed to the margin impact? And, you know, should we consider that to be in the in the numbers now or the incremental mix on bulk sales, I. E, should be broadly stable from here? Another question, if I may, is just on the investment that you've talked about. When we think about the balance sheet and the land investments, is there a level of gearing that you would expect to be in in the future years?

Speaker 2

What's kind of the optimal level of gearing including land creditors as a range? Thank you.

Operator

Thank you.

Speaker 1

Now you're interested in all those? Okay. Morning, Ami. Thank you. Yes, so exceptional costs.

Speaker 1

So they are, by definition, one offs. So the biggest one there was the top hat write off. That's clearly not going to recur. So as we stand here, I'm not expecting exceptional items in 2025. I mean, clearly, we're two months into the year.

Speaker 1

So if something happens, then we'll treat them. But those are one off items through 2024. And then in terms of so two questions on margin. So we are investing. So that's why our overhead cost you can see is a little bit higher.

Speaker 1

Of course, the leverage is better, but we are investing. And so some of the overhead increase that you've seen over the last few years is about investing for the future. So our sales and marketing platform, other projects that we've done to improve the quality of the underlying business. So what that means is that's all factored into our margin guidance for '25 already, of course. And as I look into the future margin progression, that's off a cost base, which is a little higher than it probably was five or ten years ago, but it's because we live in a different world now where we need different capabilities to be able to drive the volumes that we need across the business and the quality that we need.

Speaker 1

I think bulk sales, that will be a recurring feature. I mean, Dean put the slide up around the size of that market and that market in particular half of that market is now family accommodation outside of London. It's exactly the kind of accommodation that you would expect Persimmon to be building. So it was to my mind, it's entirely sensible that we engage with that market. I'd expect it to stay around about 10% of the volume of something.

Speaker 1

I mean, it will ebb and flow, but that sort of order of magnitude. And of course, the way that we're now engaging with that market and doing it strategically on relationships helps us make sure that we are making sure we can get best returns on that, making sure we can maximize the value of that part of the market as well. But that's an important market going forward. So it'd be odd if we didn't want to continue to play there, I think. And then going forward, so on that in terms of medium term guidance, I mean, I've not given specific gearing guidance, but you can see even today, the December, our gearing including land credits was less than 5%.

Speaker 1

So I would expect that to come back to being negative gearing as we go forward through the cycle. But that's a but there's I think that balance sheet position is very strong and saving at the bottom of the cycle, we're still got a very, very strong balance sheet.

Speaker 2

If I can have a follow-up to that. I mean, maybe on the gearing point, what's the threshold that you typically would have in mind, I. E. If you've got land opportunities and you really want to go, what's the sort of optimal range that you would probably push that gearing to?

Speaker 1

Well, I think we look at it in the round. So I'm not expecting our gearing to increase substantially. So we're kind of at the bottom and I'm at 5% gearing including land creditors. So but I'm looking at that in the round. So we're still land credits is an important part of the tool for us to I mean it's not land credits aren't like debts.

Speaker 1

There's an important way for us to invest in future growth and that's the way that we treat them.

Operator

Glenys down the front here please. Sorry, you take it. Sorry, I didn't see you take it.

Speaker 3

Marcus Cole, UBS. I've got three questions. In terms of the volume guidance for 2025, what are the underlying sales outlets and sales rate assumptions? The second question is just on can you bridge the 29% land bank gross margin and the 20% medium term EBIT target? And the final one is just on what's the underlying asset turn assumption in the 20% medium term ROCE assumption?

Speaker 1

Do you want me to say those, Dean? Fine. So yes, in terms of so we're saying volume growth is 11,000 to 11,500. We don't give guidance on net outlets because, of course so as Dean said, we're expecting to open around 100 gross new outlets in the year. Of course, the net outlets is partly is a function of timing how quickly you sell as well.

Speaker 1

So there's a little bit you're kind of victim of your own success. The faster you sell, the faster you close them out. So that's why I think the net number is we don't give explicit guidance on, but clearly, we're looking to grow that. And as Dean said, we're hoping to get to that 300 number of potential over the next couple of years. So but I think if you when you work the maths back in terms of the sales that we're delivering per week at the moment, Actually, if that continues through the year, then by the time you add in the bulk sales and the affordable, then you get to that $11,000 11 thousand 5 hundred dollars So I think that's entirely consistent with the kind of run rate, which we're reporting for the first nine weeks.

Speaker 1

In terms of asset turn, so in 2024, our asset turn was about 0.8, zero point eight five something in that order. I would expect that to recover back towards the sort of one times, which is why you end up with the 20% margin and the 20% ROCE coming back into line. So that's so there will be an improvement there as we grow back through the cycle. And then in terms of the bridge, so the 29% going forward, so obviously that is to say that's a site gross margin. So there are some other gross margin costs which come off that.

Speaker 1

So let's say maintenance, we have some fixed sales and marketing, fixed construction cost base, which comes off that into the gross margin line as well as the overhead. So I would expect as we track through the medium term, our overhead rate to come back towards 5%, a bit closer to where it was. It was 6.5% last year. So that will come down. And so that's kind of the way that that bridge works through.

Operator

I'm making you wait, Linus. Go on. You go first.

Speaker 4

Will Jones, Redburn Atlantic.

Operator

We are doing this time, you know.

Speaker 4

A few, please. Mostly relate to the margin slide in terms of the medium term growth. Firstly, in that category one, roughly how much volume growth are you assuming in that height of bar? Secondly, the new land feeding through, when do you think the benefit starts of that in terms of it kind of hitting production and sales and benefiting margin? And then third is what you're assuming the building safety levy costs per plot within the downside?

Speaker 1

Sorry, did you have another one as well? And then

Speaker 4

it's really just I guess wrapping all the pricing. I I think you've mentioned 3%, three point five % cash incentive separately. There was a 4.5%, I think, for last year. How do you reconcile those? And I suppose overall, when you balance off that 50 bps better year to date on the cash incentives gross progress, where are you on kind of like

Speaker 1

So that's what I'd be able to take those as well. So well, let me start at the end, Will. So on that incentives piece, so typically, we have ourselves the 4.5% last year is typically kind of two thirds, one third between cash and non cash. The 3% which Dean was referring to was the cash incentive piece. So but I should say that on the reservations in the first nine weeks, our incentives are down on both the cash on a total level compared to the first nine weeks of 2024.

Speaker 1

So exactly as Dean said, but that's why the gap is a little bit bigger than perhaps you thought. So, yes, so look, on the margin and the margin graph, you don't get your rules out. It's deliberately it's not designed for you to try and it's not sort of financial guidance, if you like. And the reason there's a range there, well, is really there's two moving parts in that volume column. So one is how much the volumes grow.

Speaker 1

And clearly, we're looking to grow volumes in the first of our third layer at the moment than we were in 2022. So you see us recovering there. And I'd like to think that as a business, we'll grow beyond there as well. And then of course, there's also the piece of how much overhead leverage do I get, because clearly my overhead aren't going to stay at absolutely flat over the medium term. So those are the two moving parts and that's why that particular column on the graphic, has quite a wide range.

Speaker 1

But I'm pretty comfortable that the midpoint of that both in terms of the overhead growth and the volume growth are entirely achievable within our plans. In terms of new land coming through, I mean, interestingly in the 60,000 owned plots, somewhere close to half of those have been bought since the beginning of twenty twenty two. So, yes, I think that point is the new land coming through production and starting to really drive the margin. It's unlikely to be 2025, but I think as we go through into 2026 and beyond then you'll start to see that balance starting to start to shift. I mean, clearly, it's not a light switch.

Speaker 1

It's going to be over a period of time. And then building safety levy, of course, we don't have the details yet. So we're making assumptions. I mean, the government has talked about aggregate amounts that they're looking to raise. They've talked about which parts of the market are in scope or out, but that is going to be linked to pricing.

Speaker 1

It's going to be linked to so it'll be regionalized. So we are making assumptions at the moment, but clearly we await further details on that. I don't know, Dean, if you want to say anything else on building safety levy or that's probably not right. So we wait and see what the guidance is when it comes out

Speaker 4

in more detail. Just pricing more generally in terms, I think you've made the point about constrained affordability rightly so in previous meetings. You find use a little bit more scope to get be it the incentive or the growth. Is the market changing slightly in your favor, would you say?

Operator

Overall, the market is undoubtedly better than it was a year ago. There's still a North South divide. It's stronger in the North than it is in the South, but we're also seeing recovery now in the South, which is encouraging. Affordability is the key constraint. It is getting that deposit together and that remains the key obstacle and is why the market isn't we've had a great year.

Operator

As Andrew said, go back two years, we were at one sell per outlet per week. We are now at 0.7 outlet per week. So we're still 30% down from where we were. So there's a hell of a lot more growth to come through still before we get back there. But and I think it is getting that deposit together that is the key obstacle to it.

Operator

The Bank of Mom and Dad is strong and it's been incredibly supportive over the last two or three years, but there's still an impediment to getting back, which is improving and we've seen with wage growth coming through over that period. I think with the price correction we've seen in the market over the last couple of years with flat or fall in pricing and the wage growth, that is clearly now feeding through along with sentiment to the stronger position we're now seeing.

Speaker 5

Thank you. Glenys Johnson, Jefferies. Rather unoriginally, I've got a few follow ups already actually. Just in terms of following from Ami's question about the strength of the balance sheet, what's the right land bank? We've had lots of your peers talk about much shorter land banks that should be able to be done with predictability in a planning system.

Speaker 5

So what is the right answer for Persimmon? Second of all, in terms of the regulation piece in that bridge, is that builds safe? Is that the building levy, infrastructure levy and future home standard? I noticed the planning and infrastructure bill has been introduced to parliament today. Is that what we should hear about the levy?

Speaker 5

Is that are we that close? Then just in terms of looking to double Charles Church, lovely to see Ian McPherson in the audience. We heard last year about bringing forward some of the longer term sites to maybe some more sort of partnership build to rent opportunity. How should we be thinking about the selling rate? Is it the Persimmon selling rate plus Charles Church plus whatever is done in terms of partnerships build to rent on top of that?

Speaker 5

And then one for Andrew at the end. The selling price on the land bank February, can you talk about just mix impact for '25, '20 '6? When do you get to that February?

Operator

I think these debates on land bank, for the point for me is we're growing and we're growing now. We're not talking about growing in the future. So it's the size the right size of the land bank is that size that will enable us to grow. I can definitely see the argument that should we see the planning reform that is being discussed, then that could lead to lower capital employed over time. Call me an old cynic, I'll believe it when I see it.

Operator

And we need to deliver growth. And so we're quite content with where we are at the moment. Some of the reforms, I haven't had a chance to look at the detail we were briefed over the weekend. I don't know whether the levy is in there or not. I suspect I'm not going to speculate.

Operator

There's still a lot of work that the government needs to do on the levy in my opinion. But some of the reforms being announced today will be quite radical actually. If detailed is going to be delegated, That could be quite significant over the coming years. I imagine it means quite a bonfire at Outline. So we look forward to that.

Operator

And of course, we'll need to improve the work we do at Outline. But we're up for that. So that all could be very significant and could give a tailwind to the future. But details of building safety levy, I certainly haven't seen there in the bill today, but we haven't had a chance to look at it in detail. In terms of in the bridges, yes, there is an assumption in there for building safety and delivery and future home standards.

Operator

So that's what that negative block represents. As we said, we over the course of the next few years, our ambition is to double Charles Church. So over time that should be additive to the persimmon sales rate, core persimmon sales rate, which of itself is improving anyway. And I think as we discussed in January, we also see the growing BTR market as helpful addition to the core persimmon sales rate. So over time, we should see the sales rate all being strengthened by those factors.

Operator

Do you want to come back to the last question?

Speaker 1

Yes. Just last one, Glynis, on selling prices. Yes. So obviously last year we were at $268,000,000 within that assumption it's at $276,000,000 Those are on current pricing. Of course, in a particular year, the mix will vary within that.

Speaker 1

Of course, it will. So but that's based on revenues and build costs as we see them today.

Speaker 5

When do you get to the $2.76? Is that a number we should be thinking about in the 2026 or is the mix benefits that you're making 2025 to?

Speaker 1

Well, the mix will make a difference, but that's not as safe. I mean, that's not far off where we'll be for '25 on the basis that we're, you know, we're really, really, really, what, $8 shy of that in 2024. So, yes, it's there or thereabouts, but those are all on current pricing is the key thing.

Operator

Let's go this way. I'll have my back to this side of the room. Sorry.

Speaker 6

Morning. Sita Ekblom from Morgan Stanley. I just wanted to ask on the Charles Church strategy. Just to confirm, you've had a peer also talk about sort of a multi brand portfolio, different price points for the potential buyer. When you're thinking about growing Charles Church, are you thinking about growing that in isolation on sites that are specifically targeted towards that premium offering?

Speaker 6

Or are you also talking about trying to have more of a multi brand approach to large potential strategic sites? And the reason why I asked is I think the latter has bigger implications for asset turn and potential speed of development of these large strategic sites. So it'd just be helpful to hear how you're thinking about what growth in your premium offering actually looks like. Thank you.

Operator

Okay. Thank you. I think what we've seen and what we're seeing in the business is a clear distinction between our brands and it's growing as well. So between the core Persimmon brand and what we're now planning with the Charles Church brand and more than planning we're now introducing. And the short answer to your question is both.

Operator

But I guess the site that sticks in mind or one of the sites that sticks in my head is our site at down just down the hill in West Beyond Trim in Bristol. So there you've got it's a great site. You just come off the motorway. We've got the right side of the road. I'm very pleased.

Operator

And the entrance looks great. And it is a core it is a core persimmon house type site and that's what we've used it for. However, there is also a clear gap for a more premium product, still a cost conscious product, but still nevertheless a differentiated product from Persimmon. And frankly, it is for those people. Some of them are downsizers.

Operator

Some of them are upsizers, but doctors, teachers, nurses, others who are looking to get out of their drafty flats up in Henley's, which are expensive to maintain and really like that premium but cost conscious product that we're able to provide. And they're selling our hot gates and the margin is really, really good. So that was a kind of test case for us. It's delivered great results for us. And as we're rolling that out across the business to mostly at the moment the multi brand strategic sites you talked about, we're also seeing similar success.

Operator

So we're very excited by that. But I think that's also the success we've seen where the market's right is in emboldening us also to look at isolated sites where it is the right solution. But that's a long answer to say it should improve asset turn. I think there's one over here.

Speaker 7

Thanks. Yes, it's Harry Gode from Berenberg. Let's go back to the point on cash incentives, which you're saying now down at 3%. So first question would be, what would be the normal number on that? Because I appreciate perhaps it never goes to zero.

Speaker 7

Is it one? Is it two? Secondly, is it right to think that every basis point of saving there does just on the cash side drop straight through to the margin? And then thirdly, how do you think about the sort of tactical trade off between that number and sales rates? And I appreciate it's probably a bit of both, but what's the priority for the year?

Speaker 7

Thank you.

Operator

Thank you for that. I don't think we know what the normal number is. Three years ago, it was zero and it had been zero for as a result of zero interest rates and helped buy for many, many years. So for the business to have to start trading, it came as a bit of a shock. But everybody had to do it and every customer that was walking in the door was looking for their 5% white goods and carpets.

Operator

What we are now seeing now is that's tightening up a little bit. And yes, it should drop down to margin. And it requires us to do what our teams are really good at day in day out, which is using their judgment, using their know how, using their skills to judge that fine line. There's no at least if there is an algorithm or a spreadsheet, I haven't seen it. I have no doubt that somebody in this room could probably produce one, but we haven't.

Operator

It is about judgment and is that balance between what volume you want to achieve and where you think you can maximize your return. And that's what our teams are doing day in day out and I think they're doing it very well.

Speaker 8

Hi there. Clyde Lewis from Peel Hunt. I think I've got three if I may. First one was really around timber frame. Is it fair to assume that you've probably now discounted volumetric activity and you're very much sort of behind the modular panel systems and and hope to very much sort of drive that improvement through the malware system that you're looking at.

Speaker 8

And I suppose 1A attached to that is how quickly do you think you can develop that malware system? And other savings is going to be a mixture presumably of costs and working capital. Sorry, that was the first one, only three bits in there. The second one was on Help to Buy. Obviously, there's no real discussion at the moment from the government, but do you think there's a decent chance we might get version two of that coming back in the not too distant future?

Speaker 8

And the third one was really around sort of regional businesses and whether your growth aspirations need extra offices and whether within those regional aspirations you'd ever start to look at London again in any seriousness?

Operator

Not yet. Okay. Timberframe, I don't think The UK market is quite ready for volumetric, although there is an opportunity for it, it does require a supportive government and we haven't we didn't have that in the previous five years. Other countries use it extremely successfully. The UK has got somewhere to go.

Operator

But you're right, our focus is on panels and combining it with the malware system. I mean, this could develop quite quickly over the coming years. It's still work in progress for us. We still need to perfect its attachment to the closed panel. And I think you've also got to we have got to work out what market is right for it.

Operator

I think the private market is some way off probably yet being ready to accept it. But I think it is probably the solution for affordable and also BTR. And there I think it could have, as as I tried to allude to in my speech, quite dramatic implications for both cost and for working capital improvement. I mean, the more it costs us on-site £30 an hour for skilled labor, costs us in the factory £15 an hour. So the more we can do in the factory, and by the way, you're probably going to end up with a more perfect perfectly built or manufactured product.

Operator

The sooner we can do that, the sooner it's going to improve both our costs and our working capital, because this if we can achieve this twelve weeks in five days, I mean, that's just going to be amazing and it's a step change in what the industry can be able to deliver. Of course, it's not ever going to be linear because it solves one bunch of trades. You still got the other trades you've got to work through. So we peg back in the numbers I gave you today at that 2,500 to 5,000 to 3,500 increase in output by the end of the decade. Actually the numbers could be bigger than that, but we're just seeing that there could be a bit of bunching up of trades that are going to need to be worked through.

Operator

But lo and behold, we might get our roofs on in by September. And wow, what a game changer that would be. So we're hugely excited about it. And I think it's got a big opportunity for the business. I think there's a big debate going on in government at the moment about supporting demand.

Operator

The planning reforms that they've announced and continuing to announce are hugely significant and very welcome even what they've announced in the sidelines yesterday or today whenever it was, I lost track of consultees. I mean, my goal just that could be dramatic in terms of what we see. But I can't call yet where that debate is going to get to. My own view is that if they want to achieve their 1,500,000.0 or 300,000 a year in the lifetime of this Parliament, at some point they'll have to tackle a demand stimulant. It's the first time in sixty years there's been no support for first time buyers.

Operator

So in my view, planning reform alone won't get there. It's they've got it 100% right for 50% of the question so far. And on regional businesses, yes, look, there are gaps. We've got we were careful in the downturn to be very surgical about reducing costs because I wanted to keep the capability in place to grow back quickly and I feel today vindicated in that decision. So I think it's now about growth.

Operator

There's a lot of capacity in the business to absorb growth from the existing infrastructure. So we certainly have got no plans at the moment to increase the number of regional businesses. Do you want to pass that one?

Speaker 9

Mark Haslam from Dowgate. Just obviously just working those numbers through, I would guess your asset churn should go through one times rather than just stick it one times. But just could you just remind us We

Operator

are prudent. We are prudent.

Speaker 1

Yes, yes. It's very prudent. I think

Operator

it's prudent.

Speaker 9

So just could you give us a feel for one on the Westbury products, obviously affordable housing and so comprehensive spending review and everything else and uplift will hopefully come through. Can you just remind us of how much of that or the Westbury product is timber frame? And can you just remind us where you are in terms of your overall expectations of volume from timber frame from existing site and when Loughborough will be fully on or done?

Operator

The proportion of Westbury that is timber frame at the moment will depend very much on where it is because we've there's also a regional battle to be had in terms of the skills to build in timber frame. It's not universal. It's strong in Scotland. It's strong in the Southwest. But most of the Midlands and the North Of England have yet to learn how to build in timber frame.

Operator

And then you go into the huge debate about the cost. Is it the same? Is it not the same? Actually, in our case, our best businesses are able to erect timber frame for the same like for like cost and then obviously eight weeks faster to build. So over time though, we want to morph our business more towards timber frame.

Operator

We want to get we want to nail that cost neutrality and then we want to strongly increase the output to support our growth ambitions. I think the new factory running at full Pelt can add 7,000 to our additional ability to produce timber frame. So it could be we could be a very substantial proportion of the business by then could be at timber frame. So this opportunity is really exciting.

Speaker 10

Zane Bickau with JPMorgan. Thank you for taking my questions. Just to follow-up on vertical integration. Is there a sense of how much your strategy here has helped offset the build cost inflation in 'twenty four and what you see for 'twenty five? And then on the Stratland, I think it was 42% of completions in 'twenty four.

Speaker 10

Is there a percentage you'd like to see this in the coming years? Could this be higher?

Operator

So

Speaker 1

yes, so I think the Stratland forty two percent, that's very, very good. Actually, I think probably for me the even more important statistic on that slide, by the way, was that we are replenishing the Stratland give or take as quickly as we're using it. So in other words, I'd say that is a long term source of good quality land for us. So year on year on year, it's difficult to say because clearly it comes down to mix, it comes down to the different geographies. But I think that will continue to be a strong source of delivery this year, next year and beyond.

Speaker 1

And then because of that replenishment rate, which for me is the most important piece, that demonstrates it will be a strong source into the medium term as well. So I think that was a that is a very strong piece of kit for us is our Stratland Bank and probably something which we haven't talked about enough in the past actually in terms of how strong that is. And then coming back to inflation, there is no doubt that our vertical integration model mitigates supply chain pressures, whether that be inflation or whether that be supply constraints elsewhere. So you can see more than half our bricks, 56% of our bricks are self manufactured. So that means we are we don't need to worry for that whole portion of our delivery around the brick prices coming out from the main clay brick manufacturers.

Speaker 1

Similarly, if demand were to increase, if the market starts to grow more generally, then again, we've got a source of supply which takes away those pinch points. So I think it undoubtedly helps insulators from inflation. And as we look into 2025, we've said we think we'll manage inflation down to low single digits. That's a combination of good commercial practice across the business. It's also, by the way, the strength of being a growing business.

Speaker 1

So there's numerous examples that Dean and I have spoken to around the country of managed directors who are having good pricing conversations with their supply chain because they've got a pipeline of new sites which are coming down the road as well. And so they're able to use that as part of the negotiation. So undoubtedly the fact that we're a growing business is helping us to manage our cost base as well. Just to

Operator

put some color on that, if I may, directly is that the supplier can remain nameless, but we went to market for certain brick and we were facing a 7.5% cost increase. And we were able to switch it to our own brick. Because of the improvements we've made in our own brick, it was accepted as an acceptable alternative product, and it saved us all of that 7.5%. Any more questions?

Speaker 11

Hi. Morning. Allison from Bank of America. Just two questions. First is on the Charles Church.

Speaker 11

If we expect the contribution to double, how should we think about the margin contribution from this product line? And second is when do you expect the planning reform to materially start to affect your PBT? Thank you.

Operator

Do you want to cover margin and I'll do planning reform? Yes.

Speaker 1

Yes. So Charles Church was that second bar I was still on the graphic ratio I showed. So I would expect that that will continue to deliver a greater gross margin than Pacific Homes more broadly does. So as we double the volume there, then that's why we start to see that coming through in terms of driving additional margin opportunity for us over the medium term. So I'd expect us to continue to drive that differential, because we're able to capture the value that the customers in that premium part of the market are willing to pay.

Speaker 1

Do you want to cover the PBT point on the planning point?

Operator

Yes, I'll cover. Thanks, Andrew. It's not going to be immediate, although just a point that we didn't bring out in the presentation is actually the 21% you saw in terms of the planning approvals increase year on year. Most of that came in Q4 of last year. And then we doubled again, as I said in my speech, in the first eight or nine weeks of this year in terms of planning consents against the previous year.

Operator

So you can see there's a building momentum there, which I think is important and will provide tailwind for the business. There's clearly a time. You then got to get through building control and everything else. I think really it's tail end to 'twenty six and into 'twenty seven before you really start to see the true benefits of the planning reform coming through, but it could be quite strong momentum. However, to bring you back down to earth, we can only build what we can sell.

Operator

Any more questions? Okay. Thank you very much for your time this morning. What if I can just remind you really of what we said today. I think as a result of the challenging decisions that we had to make three or four years ago in terms of protecting the balance sheet, We took that pain, shareholders took that pain, but it gave us what you're seeing today, which is the headroom for the business to invest in land, to invest in brands, to invest in sales and marketing, to improve service quality, service and quality to its best ever, and as well to invest in our factories.

Operator

So I believe the business is extremely well placed. It also enabled us to get on with our clouding responsibilities. And whilst there's a lot of money to be spent in 'twenty five and 'twenty six, being able to see the light at the end of that tunnel, I think is a game changer for Persimmon. Okay. Thank you very much.

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Earnings Conference Call
Persimmon H2 2024
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