Half Year 2026 Persimmon PLC Earnings Call

Speaker #1: With Chris, unfortunately, Chris is on holiday. Well, fortunately, Chris is on holiday for Chris, so he's a happy boy. But you can catch up with Liam and the rest of us later.

Speaker #1: So, I'm pleased to be presenting a strong first-half performance. These results, again, confirm that Persimmon is delivering growth today while building a larger stronger and higher return business for the future.

Speaker #1: We've increased volumes, grown market share, and strengthened our operational platform. And we've done that whilst also continuing to invest in land, outlets, and capabilities that will support long-term value creation.

Speaker #1: Although the market remains challenging, we're responding from a position of strength. Including with our typical self-help and we remain confident in our medium-term ambitions.

Speaker #1: So let me start with the strategic context, and highlights from the first half, before handing over to Andrew. You've seen this slide before. Our strategy remains consistent and it's clearly delivering.

Speaker #1: At its core, this is about building a business, a differentiated business that can grow sustainably through the cycle. We have a high-quality land bank and a growing outlet platform, giving us the visibility and the ability to increase volumes over time.

Speaker #1: We have three strong and growing brands, each serving distinct customer segments, and giving us more routes to more markets. And we've made significant progress on build quality and customer service, strengthening our reputation and supporting sales.

Speaker #1: We continue to invest in innovation and our vertical integration. That improves efficiency, resilience, and cost control. Importantly, we're doing all of this with a strong balance sheet.

Speaker #1: That allows us to invest where and when returns are attractive, while continuing to support sustainable shareholder returns. These strategic priorities are increasingly powerful in combination, they're deriving performance today and they position us well for further growth.

Speaker #1: Indeed, they're designed to produce a 20% operating margin and rocky in the medium term, and underpin our focus on progressively improving returns over time.

Speaker #1: Now I'll turn to our first-half performance. Which has been strong in what has been a challenging market. The first half has shown clear operational progress.

Speaker #1: Our underlying PBT was up 3% to 170 million pounds, reflecting a margin impact from housing association mix. Build cost inflation and an interest charge from our investment in growth.

Speaker #1: Average outlets in the period were 273, up from 272 last year, and I'll say more on this later. Net private weekly sales were 205, up 7%, with the net private sales rate including bulk improving to 0.75.

Speaker #1: I'm really pleased that growth in outlets and sales rate have driven completions to 5189, up 13%. As we say more about later, an increase in first-time buyers demonstrates the strength of our affordability.

Speaker #1: Importantly, we've maintained our five-star status for five years. We secured detailed planning permission on over 6,100 plots, 118% of completions, which further strengthens our outlet pipeline.

Speaker #1: The Persimmon Land Bank remains a key asset, we've nearly 81,000 owned and controlled plots, in addition our strategic land bank stands at around 82,000 plots.

Speaker #1: Our forward order book is 1.9 billion pounds, with our private forward order book up 5%. I think that taken together, this is a very strong relative performance in the period.

Speaker #1: I'll now hand over to Andrew to take you through the numbers in detail, and which are delivering growth.

Speaker #2: Thank you, Dean. Morning everyone. So my key message for the first half year is simple. We've delivered volume-led profit growth in a challenging market while maintaining balance sheet discipline, and making appropriate investments to support future returns.

Speaker #2: We've delivered strong growth in both volumes and operating profit. Building on the period on period growth we've delivered since the beginning of 2024. New home completions are up 13%, and they're up 22% over the last three years.

Speaker #2: Housing revenue is up to nearly 1.5 billion, and gross profit is up to 267 million pounds. Gross margin was lower at 18%, and that reflects the product mix, including a higher proportion of affordable homes, some higher incentives, and cost pressures.

Speaker #2: And I expect continued margin pressure in the second half year and 2027, but the medium-term opportunities remain clear. Underlying operating profit increased 10% to 189 million pounds, driven by higher volumes and overhead discipline.

Speaker #2: With operating margin at 12.8%. Underlying PBT is up 3%, and as we flagged in March this includes increased interest costs because of lower cash balances and higher land creditors.

Speaker #2: And underlying EPS has increased 3% to 38p. So overall this growth is driven by our strategy. Higher volumes, cost disciplines are supporting profit growth despite increased build costs and mix effects.

Speaker #2: Return on capital has also increased, up 10% to 11.3%, with net assets per share up 3%. So I'll now explain the sales mix and the pricing that sit behind this performance.

Speaker #2: Really pleasingly, all three of our brands grew in the first half year. And this reflects a strong sales rate, and an increased average number of outlets.

Speaker #2: Our total sales per week, including bulk, increased to 205. Of the new homes delivered, 4,261 were private, up 7% higher than last year. The split between Persimmon and Charles Church is shown on the slide, and there was particularly strong growth in Charles Church.

Speaker #2: Private completions, included 548 bulk sales, that's fewer than in the first half of last year. We said previously bill-to-rent market slowed, in Q4 last year, and you can see the effect of that flowing through into first half year completions.

Speaker #2: But today, the bill-to-rent market is open. We remain very engaged with it, and I expect bulk completions to increase in H2, assuming that that market remains stable.

Speaker #2: 36% of private sales were to first-time buyers, and that's actually becomes 41% of open market private sales. This is a really important market for us.

Speaker #2: Our homes are well positioned for first-time buyers, because they are designed to be affordable. And I think it's particularly to first-time buyers have grown 14% compared to H1 2025, at a time that Connell's research suggests the overall first-time buyer market has only grown by 1%.

Speaker #2: Finally, partnerships output to registered providers grew very strongly, by 50% to 928 units, and that is 18% of total completions. And that's within the typical range.

Speaker #2: It was a bit lower in the first half last year. So as I said at the start, all three brands grew their volume in the first half, and the fact that the brands are all at affordable prices is a strength in the current market.

Speaker #2: The blended ASP on completions in the period was up 1%, and private ASP increased 3%. Pricing has been robust, particularly in the north of England and in Scotland, and we've increased average prices in both Persimmon and Charles Church.

Speaker #2: Our brands are deliberately focused at the value end of their respective markets, with our Persimmon homes average selling price still well below the new build national average, and over half of completions below 300,000 pounds.

Speaker #2: Incentives on completions are around the 5% mark, similar to the second half of last year, and a bit higher than the 4.5% we had in H1 2025.

Speaker #2: So let me show you now how our volume increase has driven up operating profit. You'll be aware that in the current market, margins have been coming under pressure across the industry, and we flagged this in March.

Speaker #2: Our strategy has driven volume growth, and has increased operating profit. On a margin basis, the reduction from 13.1% to 12.8% includes the effect of more HA units in the mix, which diluted margin by about 40 bips.

Speaker #2: Beyond that, the benefits of volume leverage have helped offset cost pressures and increased incentives. Net operating expenses improved by 12.5 million pounds, and that includes lower admin costs, despite the increased volume, and some additional land sale profits.

Speaker #2: So our volume growth, tight overhead control, has helped mitigate the impact of cost increases in the period, and has enabled us to report an increase in operating profit.

Speaker #2: And this also provides confidence for the future, that we can deliver our medium-term margin and return ambitions, and we'll do this by continuing to drive volume leverage, while progressing our other operational priorities, trading out of older, lower margin sites, acquiring quality land to improve gross margin, improving the mix of delivery across our brands, and strengthening vertical integration.

Speaker #1: They were, but in the current market, margins have been coming under pressure. And 0.1%, 12.8%, includes the effects of more HA units in the mix, which diluted margin by about 40 bips.

Speaker #2: As well as volume, another key driver of growth is our balance sheet. Our balance sheet continues to provide a strong platform to invest in growth.

Speaker #1: Beyond that, the benefits of volume leverage have helped offset cost pressures and increased incentives. Net operating expenses improved by £12.5 million, and that includes lower admin costs despite the increased volume, and some additional land sale profits.

Speaker #2: As we announced in March, we now have 1 billion pounds of committed bank facilities, very important in providing both resilience and growth opportunities. We had gearing at the end of June, due to the payment of land creditors and investment in WIP for delivery in H2.

Speaker #1: So, our volume growth and tight overhead control have helped mitigate the impact of cost increases in the period and have enabled us to report an increase in operating profit.

Speaker #2: Adjusted gearing including land creditors is 18%, and that's in the range that we indicated earlier in the year. We held 168 million pounds of PX stock at the end of June, that is lower than at the start of the year, and almost exactly the same as this time last year.

Speaker #1: And this also provides confidence for the future—that we can deliver our medium-term margin and return ambitions. We'll do this by continuing to drive volume leverage, while progressing our other operational priorities: trading out of older, lower-margin sites; acquiring quality land to improve gross margin; improving the mix of delivery across our brands; and strengthening vertical integration.

Speaker #2: Net debt is 165 million pounds, and I expect our year-end net cash to be in line with our previous guidance. Net assets are up 4% since this time last year, and net assets per share are 37p higher than this time last year, and I'm pleased that return on capital is also higher than this time last year.

Speaker #1: In addition to volume, another key driver of growth is our balance sheet. Our balance sheet continues to provide a strong platform to invest in growth.

Speaker #2: And net assets are up partly, as I say, because of the repayment of our land creditors, so I'll now cover our investment in land in a bit more detail.

Speaker #1: As we announced in March, we now have £1 billion of committed bank facilities—very important in providing both resilience and growth opportunities. We had gearing at the end of June due to the payment of land creditors and investment in WIP for delivery in H2.

Speaker #2: There are two key points. Firstly, our strong balance sheet and our clear strategy is allowing us to continue to pursue land opportunities in a disciplined way.

Speaker #1: Adjusted gearing—including land creditors—is 18%, and that's in the range that we indicated earlier in the year. We held £168 million of PX stock at the end of June.

Speaker #2: And secondly, our land bank will provide the opportunity for us to continue to grow outlets and grow the business. In the period, the owned and controlled land bank reduced by 4,000 units, with fewer new sites acquired in Q2, but taken together with the increased plots in the strategic land bank, we've gone forward in the period overall.

Speaker #1: That is lower than at the start of the year and almost exactly the same as this time last year. Net debt is £165 million, and I expect our year-end net cash to be in line with our previous guidance.

Speaker #2: Land cost to anticipated revenue has stayed similar to last year. The embedded site margin is slightly down due to the increased build costs that we're factoring in, but as Dean will come on to, we are working hard to mitigate this.

Speaker #1: Net assets are up 4% since this time last year, and net assets per share are 37p higher than this time last year. I'm pleased that return on capital is also higher than this time last year.

Speaker #1: And net assets are up partly, as I say, because of the repayment of our land creditors. So, I'll now cover our investment in land in a bit more detail.

Speaker #2: We're on site at most of the schemes in the lower margin categories, and over 60% of our sites are above the 27% embedded margin, which is why our margin will begin to recover as we trade through the older lower margin sites.

Speaker #1: There are two key points. Firstly, our strong balance sheet and our clear strategy are allowing us to continue to pursue land opportunities in a disciplined way.

Speaker #2: I'll now cover our progress on building remediation. This work is important, and we're continuing to make progress. At 30th of June, we were on site or completed at 79% of known developments, we've assessed all our known developments, and 95% of these are now tendered.

Speaker #1: And secondly, our land bank will provide the opportunity for us to continue to grow outlets and grow the business. In the period the owned and controlled land bank reduced by 4,000 units, with fewer new sites acquired in Q2, but taken together with the increased plots in the strategic land bank, we've gone forward in the period overall.

Speaker #2: We continue to make progress, we've completed about 24 million pounds worth of work in the period, bringing total work to date to over 200 million pounds.

Speaker #1: Land cost to anticipated revenue has stayed similar to last year. The embedded site margin is slightly down due to the increased build costs that we're factoring in, but as Dean will come on to, we are working hard to mitigate this.

Speaker #2: We'll spend as close to 100 million pounds as we can this year, and we're continuing to actively pursue recoveries from the supply chain. Our closing provision is 206 million pounds, and that's 20 million lower than at the start of the year.

Speaker #1: We're on site at most of the schemes in the lower-margin categories, and over 60% of our sites are above the 27% embedded margin, which is why our margin will begin to recover as we trade through the older, lower-margin sites.

Speaker #2: But this remains complex work, and as I've always said, there remains cost risk on all of these sites, until they are completed. But as this work concludes, we'll generate more free cash for the business, and capital allocations for the group, and you can see that on our cash flow bridge.

Speaker #1: I'll now cover our progress on building remediation. This work is important, and we're continuing to make progress. At 30 June, we were on site or had completed at 79% of known developments. We've assessed all our known developments and 95% of these are now tendered.

Speaker #2: Net debt at 30th of June was 165 million pounds. We're continuing to invest where we see attractive returns, while maintaining a strong balance sheet and significant liquidity.

Speaker #1: We continue to make progress. We've completed about £24 million worth of work in the period, bringing total work to date to over £200 million.

Speaker #2: The movement in cash since December reflects disciplined investment to support growth in 2026 and in 2027, including investment in WIP for H2 delivery. Land creditors have reduced 132 million pounds, and that reflects the deferred payment terms that we entered into over the last year or so, and interest costs have increased as I've already referred to.

Speaker #1: We'll spend as close to 100 million pounds as we can this year, and we're continuing to actively pursue recoveries from the supply chain. Our closing provision is 206 million pounds, and that's 20 million lower than at the start of the year.

Speaker #2: And to the right-hand side, is our capital allocation choice, and we've spent 24 million pounds on building remediation, as I've just said, and in H1, our new land commitment was actually lower than our land extra discipline in the second quarter.

Speaker #1: But this remains complex work, and as I've always said, there remains cost risk on all of these sites until they are completed. But as this work concludes, we'll generate more free cash for the business and capital allocations for the group, and you can see that on our cash flow bridge.

Speaker #2: I expect us to continue to invest in new land through the second half year, and I expect year-end cash to be in line with previous guidance.

Speaker #1: Net debt at 30 June was £165 million. We're continuing to invest where we see attractive returns, while maintaining a strong balance sheet and significant liquidity.

Speaker #2: Our capital allocation policy is designed to create shareholder value. We generate returns greater than our cost of capital, and we are typically trading at a premium to or around net asset value.

Speaker #1: The movement in cash since December reflects disciplined investment to support growth in 2026 and 2027, including investment in WIP for H2 delivery. Land creditors have reduced by £132 million, and that reflects the deferred payment terms that we entered into over the last year or so, and interest costs have increased as I've already referred to.

Speaker #2: This creates an opportunity to drive value by investing for growth. The structure of our capital allocation policy is largely unchanged. Firstly, we're maintaining a strong balance sheet while prioritizing dealing with building safety remediation.

Speaker #1: And to the right-hand side, is our capital allocation choice, and we've spent 24 million pounds on building remediation, as I've just said. And in H1, our new land commitment was actually lower than our land utilization, partly reflecting that extra discipline in the second quarter.

Speaker #2: Secondly, we're investing in the business to deliver our growth objectives, and we assume disciplined replenishment of land with additional land investment where market conditions support it.

Speaker #2: Thirdly, we're paying a sustainable dividend, well covered by profits, today we've declared an interim dividend at 20p, and we've set our annual capital returns at a minimum 60p, which is currently all paid as dividends.

Speaker #1: I expect us to continue to invest in new land through the second half year, and I expect year-end cash to be in line with previous guidance.

Speaker #2: And fourthly, we think that in the medium term, as growth is delivered and remediation spend reduces, we will generate excess cash, and we retain the flexibility to deploy this excess cash depending on market conditions at the time.

Speaker #1: Our capital allocation policy is designed to create shareholder value. We generate returns greater than our cost of capital, and we are typically trading at a premium to or at around net asset value.

Speaker #2: By investing into more growth, where returns are attractive, or into additional shareholder returns, or a combination of both. And those additional shareholder returns might be a share buyback rather than as dividend.

Speaker #1: This creates an opportunity to drive value by investing for growth. The structure of our capital allocation policy is largely unchanged. Firstly, we're maintaining a strong balance sheet while prioritizing dealing with building safety remediation.

Speaker #2: We've delivered a strong first half performance in challenging market conditions, with volume growth, profit growth, and disciplined investment. Assuming that conditions remain stable, our full-year guidance is similar to what we have said previously.

Speaker #1: Secondly, we're investing in the business to deliver our growth objectives, and we assume disciplined replenishment of land, with additional land investment where market conditions support it.

Speaker #2: We now expect to deliver growth in the full year to around 12 and a half thousand units, that's the top end of our previous guidance.

Speaker #1: Thirdly, we're paying a sustainable dividend well covered by profits. Today, we've declared an interim dividend at 20p, and we've set our annual capital returns at a minimum 60p, which is currently all paid as dividends.

Speaker #2: Inflation, of course, remains embedded in build costs on older sites, and because average sites last 4 or 5 years, this will continue to influence margins until those sites unwind from the portfolio.

Speaker #1: And fourthly, we think that, in the medium term, as growth is delivered and remediation spend reduces, we will generate excess cash, and we retain the flexibility to deploy this excess cash depending on market conditions at the time.

Speaker #2: And that cost pressure is now also affected by the Middle East conflict, and as Dean will come to, we are taking action to mitigate that impact.

Speaker #2: Assuming that we achieve our volume guidance, I expect underlying profit before tax to be in line with current expectations. And I'm reiterating our previous guidance on net cash, which means that adjusted gearing at year-end could still be around 20%.

Speaker #1: By investing in more growth where returns are attractive, or into additional shareholder returns, or a combination of both. And those additional shareholder returns might be a share buyback rather than a dividend.

Speaker #2: The rest of the guidance on the slide is similar to what we gave in March. So to summarize, Persimmon is growing volumes and profits, we're mitigating near-term margin headwinds, we're maintaining balance sheet discipline, and we are investing in land that supports medium-term returns.

Speaker #1: We've delivered a strong first-half performance in challenging market conditions, with volume growth, profit growth, and disciplined investment. Assuming that conditions remain stable, our full-year guidance is similar to what we have said previously.

Speaker #1: We now expect to deliver growth in the full year to around 12,500 units. That's the top end of our previous guidance. Inflation, of course, remains embedded in build costs on older sites, and because average sites last four or five years, this will continue to influence margins until those sites unwind from the portfolio.

Speaker #2: Thank you. I'll hand back to Dean.

Speaker #1: Thank you, Andre. The financial performance Andre has taken you through, reinforces the core investment message. Growth is being delivered now, and the drivers of future value creation are becoming increasingly visible.

Speaker #1: And that cost pressure is now also affected by the Middle East conflict, and as Dean will come to, we are taking action to mitigate that impact.

Speaker #1: This slide brings our story together, and it will show why we're confident in the medium-term growth opportunity for Persimmon. As you can see, our strategy is delivering growth, with completions up 13% in the first half.

Speaker #1: Assuming that we achieve our volume guidance, I expect underlying profit before tax to be in line with current expectations. And I'm reiterating our previous guidance on net cash, which means that adjusted gearing at year-end could still be around 20%.

Speaker #1: Having significantly invested in our strategy over recent years, our focus is increasingly on converting those investments into improved returns. Our land and planning pipeline gives us visibility of outlet growth and margin improvement.

Speaker #1: The rest of the guidance on the slide is similar to what we gave in March. So to summarize, Persimmon is growing volumes and profits.

Speaker #1: We're mitigating near-term margin headwinds. We're maintaining balance sheet discipline, and we are investing in land that supports medium-term returns. Thank you. I'll hand back to Dean.

Speaker #1: Our three brands are giving us more routes to market and better use of land, thereby improving returns. Our quality and customer service improvements support sustainable sales momentum.

Speaker #2: Thank you, Andrew. The financial performance Andrew has taken you through reinforces the core investment message. Growth is being delivered now, and the drivers of future value creation are becoming increasingly visible.

Speaker #1: And our vertical integration and innovation continues to give us a structural advantage on efficiency and cost control, again underpinning margins. Plus, our carefully managed balance sheet enables this disciplined investment whilst also supporting returns to shareholders.

Speaker #2: This slide brings our story together, and it will show why we're confident in the medium-term growth opportunity for Persimmon. As you can see, our strategy is delivering growth, with completions up 13% in the first half.

Speaker #1: Taken together, these five value drivers support our confidence in Persimmon's ability to grow volumes, and improve both margins and returns. Our land investment and planning performance are clear examples of this platform delivering, so I'll turn to them now.

Speaker #2: Having significantly invested in our strategy over recent years, our focus is increasingly on converting those investments into improved returns. Our land and planning pipeline gives us visibility of outlet growth and margin improvement.

Speaker #1: Inevitably, market conditions have affected industry-wide land investment in the period. But we've pursued attractive opportunities by focusing on value, cost discipline, and improved payment terms.

Speaker #2: Our three brands are giving us more routes to market and better use of land, thereby improving returns. Our quality and customer service improvements support sustainable sales momentum.

Speaker #1: The strength of our land position remains the most important driver of future growth. We continue to replenish and improve the quality of our pipeline, supporting our visibility of outlet growth, and margins and capital returns for years ahead.

Speaker #2: And our vertical integration and innovation continue to give us a structural advantage on efficiency and cost control, again underpinning margins. Plus, our carefully managed balance sheet enables this disciplined investment while also supporting returns to shareholders.

Speaker #1: Our strategy has been working as we've driven growth in both completions and outlets in recent years. When combined with our improving sales rates, this has helped us gain market share.

Speaker #2: Taken together, these five value drivers support our confidence in Persimmon's ability to grow volumes, and improve both margins and returns. Our land investment and planning performance are clear examples of this platform delivering, so I'll turn to them now.

Speaker #1: Our expanding outlet network continues. We're on track to open 100 outlets this year, and we remain on course to achieve our short-term target of at least 300 outlets.

Speaker #1: Our planning performance continues to support this growth, and improved outlet visibility. In the period, we secured detailed planning on 6,123 plots, 118% of completions, which is 21% more than last year.

Speaker #2: Inevitably, market conditions have affected industry-wide land investment in the period. But we've pursued attractive opportunities by focusing on value, cost discipline, and improved payment terms.

Speaker #1: As the graph shows, detailed planning permissions have consistently outpaced completions over the last three years. Our strategic land bank remains a crucial asset because it provides optionality, supports future outlet growth, and typically delivers higher margins.

Speaker #2: The strength of our land position remains the most important driver of future growth. We continue to replenish and improve the quality of our pipeline, supporting our visibility of outlet growth, margins, and capital returns for years ahead.

Speaker #2: Our strategy has been working as we've driven growth in both completions and outlets in recent years. When combined with our improving sales rates, this has helped us gain market share.

Speaker #1: So I'm really pleased that we've added around 6,000 potential plots in the period right across the country. We've also strengthened our capabilities, including through the acquisition of the promoter endurance estates in June.

Speaker #2: Our expanding outlet network continues. We're on track to open 100 outlets this year, and we remain on course to achieve our short-term target of at least 300 outlets.

Speaker #1: Focused in the east of England, this complements our previous Lone Star acquisition. Including these two promoters, our strategic land bank has around 93,000 plots.

Speaker #2: Our planning performance continues to support this growth and improved outlet visibility. In the period, we secured detailed planning on 6,123 plots, 118% of completions, which is 21% more than last year.

Speaker #1: I'll now turn to our three brand strategy, which is an increasingly important driver of growth and resilience. I want to show how our three brand strategy strengthens returns by giving us broader market reach, better use of land, and more resilience through the cycle.

Speaker #2: As the graph shows, detailed planning permissions have consistently outpaced completions over the last three years. Our strategic land bank remains a crucial asset because it provides optionality, supports future outlet growth, and typically delivers higher margins.

Speaker #1: Each brand has a clear market position. Persimmon remains our core growth engine. Efficient to build and affordable to own. Charles Church gives us a premium proposition, supporting margin expansion.

Speaker #1: And Westbury adds a capital-efficient route to driving volume and returns growth. These complementary market positions are translating into market share gains, with completions growing across all three brands.

Speaker #2: So I'm really pleased that we've added around 6,000 potential plots in the period right across the country. We've also strengthened our capabilities including through the acquisition of the promoter endurance estates in June.

Speaker #2: Focused in the east of England, this complements our previous Lone Star acquisition. Including these two promoters, our strategic land bank has around 93,000 plots.

Speaker #1: Persimmon is up 7%, Charles Church up 26%, and Westbury up 22% in the period. The key point is that this isn't just about having more brands.

Speaker #1: It's about using complementary brands to access more routes to market. Charles Church is building momentum through more operating and dual-brand sites, whilst Westbury expands our reach into additional RP and BTR partnerships.

Speaker #2: I'll now turn to our three brand strategy, which is an increasingly important driver of growth and resilience. I want to show how our three brand strategy strengthens returns by giving us broader market reach, better use of land, and more resilience through the cycle.

Speaker #1: Collectively, the three brands increase land efficiency, broaden customer reach, improve sales resilience, and support stronger returns. Which is why they're central to our medium-term ambitions for margin increase, rocky improvement, and sustainable value creation.

Speaker #2: Each brand has a clear market position. Persimmon remains our core growth engine: efficient to build and affordable to own. Charles Church gives us a premium proposition, supporting margin expansion.

Speaker #2: And Westbury adds a capital-efficient route to driving volume and returns growth. These complementary market positions are translating into market share gains, with completions growing across all three brands.

Speaker #1: The same discipline applies to quality and service. As you'll see, sustained standards are essential to customer trust, pricing resilience, and the delivery of our growth ambitions.

Speaker #2: Persimmon is up 7%, Charles Church up 26%, and Westbury up 22% in the period. The key point is that this isn't just about having more brands.

Speaker #1: Quality and service are now firmly embedded in the group and have seen sustained improvement. We've made a commitment to this, and we've delivered. We maintained our five-star HBF rating for the fifth year running, and both Persimmon Homes and Charles Church remain rated excellent on trust partner at 4.6 stars.

Speaker #2: It's about using complementary brands to access more routes to market. Charles Church is building momentum through more operating and dual-brand sites, whilst Westbury expands our reach into additional RP and BTR partnerships.

Speaker #1: Our construction quality review score has improved further. As the slide shows, our trust partner CQR and reported item scores have all improved significantly over recent years.

Speaker #2: Collectively, the three brands increase land efficiency, broaden customer reach, improve sales resilience, and support stronger returns. Which is why they're central to our medium-term ambitions for margin increase, ongoing improvement, and sustainable value creation.

Speaker #1: The really important point is that we're growing volumes whilst also maintaining high standards. We're investing to embed this further, the Charles Church way, and the Westbury way, have been developed to embed our excellence processes.

Speaker #2: The same discipline applies to quality and service. As you'll see, sustained standards are essential to customer trust, pricing resilience, and the delivery of our growth ambitions.

Speaker #1: The tailored to the specific needs of the relevant segments, and build on the clear success of the Persimmon way. Sales and customer care training, alongside frequent mystery shopping, is also driving up standards.

Speaker #2: Quality and service are now firmly embedded in the Group and have shown sustained improvement. We've made a commitment to this, and we've delivered. We maintained our five-star HBF rating for the fifth year running, and both Persimmon Homes and Charles Church remain rated excellent on Trustpilot at 4.6 stars.

Speaker #1: Quality and service are central to the customer proposition, and as our consistently said, they also support efficiency through build right, first time, every time.

Speaker #1: That brings me to build efficiency. Vertical integration remains a key differentiator for Persimmon, as you can see from the chart. It supports our leading build cost efficiency, as highlighted in the recent Phoenix analysis.

Speaker #2: Our construction quality review score has improved further. As the slide shows, our Trust Partner CQR and reported item scores have all improved significantly over recent years.

Speaker #1: Our deepening vertical integration provides supply and margin resilience. All particularly important in the current market. In the first half, Brickworks delivered 31 million bricks, up 13% on the year.

Speaker #2: The really important point is that we're growing volumes while also maintaining high standards. We're investing to embed this further—the Charles Church way and the Westbury way have been developed to embed our excellence processes.

Speaker #1: Tarworks delivered 5.6 million tiles. And Space Forge delivered a 30% increase in timber frame products. With roof trust delivery now commenced. We're prioritising AI investment where we where it can make the biggest difference to operational efficiency and performance.

Speaker #2: They're tailored to the specific needs of the relevant segment and build on the clear success of the Persimmon way. Sales and customer care training alongside frequent mystery shopping is also driving up standards.

Speaker #2: Quality and service are central to the customer proposition, and as we have consistently said, they also support efficiency through building it right the first time, every time. That brings me to build efficiency.

Speaker #1: Early areas of focus are land appraisal, a new CRM system, and commercial cost controls. Persimmon has always been an early adopter of innovation, and this is another example of that.

Speaker #2: Vertical integration remains a key differentiator for Persimmon, as you can see from the chart. It supports our leading build cost efficiency, as highlighted in the recent Phoenix analysis.

Speaker #1: Innovation and vertical integration are helping us build faster, improve consistency, reduce cost, and strengthen resilience. That combination's central to protecting margins while we grow volumes.

Speaker #2: Our deepening vertical integration provides supply and margin resilience, all particularly important in the current market. In the first half, Brickworks delivered 31 million bricks, up 13% on the year.

Speaker #1: And it provides a platform for sustained competitive advantage. As does, I believe, our self-help strategy. You'll be very familiar with the principal market challenges the industry is facing.

Speaker #2: Tarworks delivered 5.6 million tiles, and Space 4 delivered a 30% increase in timber frame products, with roof truss delivery now commenced. We're prioritizing AI investment where it can make the biggest difference to operational efficiency and performance.

Speaker #1: I want to take you through how we're managing them proactively, taking very positive actions to protect margins, and cash and continue our growth. As ever, our self-help strategy.

Speaker #1: The first action is on cost inflation. As we've highlighted today, we estimated we estimate a cost wind of approximately 40 to 50 million pounds over the next 18 months, principally from the Middle East conflict.

Speaker #2: Early areas of focus are land appraisal and new CRM system and commercial cost controls. Persimmon has always been an early adopter of innovation, and this is another example of that.

Speaker #1: But we're not standing still. We have comprehensive reviews underway across house types, procurement, overheads, value engineering, and build programs. And we're leveraging our scale and vertical integration to offset these pressures wherever possible.

Speaker #2: Innovation and vertical integration are helping us build faster, improve consistency, reduce costs, and strengthen resilience. That combination is central to protecting margins while we grow volumes.

Speaker #2: And it provides a platform for sustained competitive advantage— as does, I believe, our self-help strategy. You'll be very familiar with the principal market challenges the industry is facing.

Speaker #1: We estimate we've already identified savings to mitigate at least half of the impact, with further work ongoing. By 2028, we believe we can offset the costs enhancing Persimmon's relative affordability and cost efficiency.

Speaker #2: I want to take you through how we're managing them proactively, taking very positive actions to protect margins and cash, and continue our growth. As ever, our self-help strategy.

Speaker #1: Whilst mortgage affordability remains a challenge for some customers, demand for well-priced, high-quality homes remains resilient. Our affordable price points sales and marketing investment, disciplined incentive use, and innovative first-time buyer support has helped drive demand.

Speaker #2: The first action is on cost inflation. As we've highlighted today, we estimate a cost headwind of approximately £40 to £50 million over the next 18 months, principally from the Middle East conflict.

Speaker #1: A 14% growth in first-time buyer sales in the period shows the strength of our approach. Our strong land position and nationwide footprint, diversified customer base through our three brand strategy, and flexible operating model means we're able to respond nimbly to ongoing market constraints.

Speaker #2: But we're not standing still. We have comprehensive reviews underway across house types, procurement, overheads, value engineering, and build programs. And we're leveraging our scale and vertical integration to offset these pressures wherever possible.

Speaker #1: Our strong forward order book is evidence of that. As is the fact we've delivered a 22% increase in completions, and a 24% growth in underlying operating profit over the last three years.

Speaker #2: We estimate we've already identified savings to mitigate at least half of the impact, with further work ongoing. By 2028, we believe we can offset the costs enhancing Persimmon's relative affordability and cost efficiency.

Speaker #1: Our strategy is working. Maintaining our momentum in planning and outlet growth expands our nationwide sustained planning approval success helps underpin future outlet growth, overcoming planning barriers.

Speaker #2: Whilst mortgage affordability remains a challenge for some customers, demand for well-priced, high-quality homes remains resilient. Our affordable price points sales and marketing investment, disciplined incentive use, and innovative first-time buyer support has helped drive demand.

Speaker #1: We've increased outlets by 6% over the last two and a half years, against an industry-wide decline, and whilst we've been increasing completions. The strength of our land bank, strategic land holdings, and planning performance provides us with confidence in the long-term growth trajectory of the business.

Speaker #2: A 14% growth in first-time buyer sales in the period shows the strength of our approach. Our strong land position and nationwide footprint, diversified customer base through our three-brand strategy, and flexibility allow us to respond nimbly to ongoing market constraints.

Speaker #1: Building safety remains a priority, as Andrew has shown. We've continued to make good progress, with the vast majority of known developments now tendered and a significant proportion either on-site or completed.

Speaker #2: Our strong forward order book is evidence of that, as is the fact we've delivered a 22% increase in completions and a 24% growth in underlying operating profit over the last three years.

Speaker #1: At the same time, we continue to pursue opportunities to recover costs. Finally, as we grow, maintaining quality and customer service standards in non-negotiable. The improvements we've made over recent years are now embedded within the business, and we remain committed to ensuring that growth, efficiency, and value creation are delivered without compromising customer experience.

Speaker #2: Our strategy is working. Maintaining our momentum in planning and outlet growth expands our nationwide platform. Our sustained planning approval success helps underpin future outlet growth, overcoming planning barriers.

Speaker #2: We’ve increased outlets by 6% over the last two and a half years, against an industry-wide decline, and whilst we’ve been increasing completions. The strength of our land bank, strategic land holdings, and planning performance provides us with confidence in the long-term growth trajectory of the business.

Speaker #1: Whilst these risks are real, and require active management, we're responding to them from a position of strength. We have a strong balance sheet, a high-quality land pipeline, growing outlets, three complementary brands, and increasingly differentiated operational capabilities.

Speaker #1: Whilst external factors may influence the pace of progress from time to time, they do not change our confidence in the strategy or our medium-term ambitions of 20% operating margin and rocky.

Speaker #2: Building safety remains a priority, as Andrew has shown. We've continued to make good progress, with the vast majority of known developments now tendered and a significant proportion either on site or completed.

Speaker #1: Once again, Persimmon is recognising a problem, and proactively addressing it. Our self-help strategy positions us well to both mitigate risk and capture opportunities. And this is reflected in our current trading position.

Speaker #2: At the same time, we continue to pursue opportunities to recover costs. Finally, as we grow, maintaining quality and customer service standards is non-negotiable. The improvements we've made over recent years are now embedded within the business, and we remain committed to ensuring that growth, efficiency, and value creation are delivered without compromising customer experience.

Speaker #1: Our total forward order book is strong, at 1.9 billion pounds, up 3% by value. Our private sales rate including bulk in the last five weeks is up 6% to 0.72.

Speaker #2: Whilst these risks are real and require active management, we're responding to them from a position of strength. We have a strong balance sheet, a high-quality land pipeline, growing outlets, three complementary brands, and increasingly differentiated operational capabilities.

Speaker #1: Reflecting a slight softening in the market, the private sales rate excluding bulk over the last five weeks is down 0.2, 0.59. But we've responded to this, both through our recently launched summer marketing campaign and with an uptick in BTR sales.

Speaker #2: While external factors may influence the pace of progress from time to time, they do not change our confidence in the strategy or our medium-term ambitions of a 20% operating margin and Rocky.

Speaker #1: Taken together, this means our private forward order book is up 5% by value to 1.3 billion pounds. ASP in the private order book is up 3%.

Speaker #2: Once again, Persimmon is recognizing a problem and proactively addressing it. Our self-help strategy positions us well to both mitigate risk and capture opportunities, and this is reflected in our current trading position.

Speaker #1: The private book is now around 8% sold for the year. And our affordable order book is 600 million pounds, fully secured for the year.

Speaker #1: This strong position means that assuming no material change in market conditions, we expect to deliver 12 and a half thousand homes this year. This is the top end of our previous guidance.

Speaker #2: Our total forward order book is strong, at 1.9 billion pounds, up 3% by value. Our private sales rate, including bulk in the last five weeks, is up 6% to 0.72.

Speaker #1: Turning to now turning now to the conclusion. Today's results demonstrate that we're delivering growth in a challenging market while continuing to strengthen our differentiated platform.

Speaker #2: Reflecting a slight softening in the market, the private sales rate excluding bulk over the last three five weeks is down 0.2, 0.59. But we've responded to this, both through our recently launched summer marketing campaign and with an uptick in BTR sales.

Speaker #1: And that's really encouraging. We've improved volumes, grown market share, and increased profit, whilst continuing to invest in the foundations of future value creation. Assuming no material changes to market conditions, we expect to deliver an underlying profit before tax in line with consensus.

Speaker #2: Taken together, this means our private forward order book is up 5% by value to 1.3 billion pounds. ASP in the private order book is up 3%.

Speaker #1: We're clear-eyed about the challenges ahead, working through embedded land bank inflation, affordability pressures, industry cost inflation, and regulatory demands will continue to require disciplined management.

Speaker #2: The private book is now around 8% sold for the year. And our affordable order book is 600 million pounds, fully secured for the year.

Speaker #2: This strong position means that, assuming no material change in market conditions, we expect to deliver 12,500 homes this year. This is the top end of our previous guidance.

Speaker #1: But as I've said, we're responding proactively and from a position of strength. Our sustained focus on self-help and medium-term strategic drivers of growth is delivery.

Speaker #2: Turning now to the conclusion. Today's results demonstrate that we're delivering growth in a challenging market while continuing to strengthen our differentiated platform.

Speaker #1: Replenishing our land pipeline at high margins, planning momentum, growing outlet base, three complementary brands, and differentiated vertical integration capabilities provide us with competitive advantages that are difficult to replicate.

Speaker #2: And that's really encouraging. We've improved volumes, grown market share, and increased profit, whilst continuing to invest in the foundations of future value creation. Assuming no material changes to market conditions, we expect to deliver an underlying profit before tax in line with consensus.

Speaker #1: Our efficiency program, including our review of house types, will help mitigate the current cost pressures as much as possible in the short term, while extending our affordability and efficiency advantages in the medium term.

Speaker #1: While the pace of progress may vary, our direction of travel is unchanged. We remain focused on disciplined execution, sustainable growth, improving returns, and delivering on our medium-term ambition of 20% operating margin and rocky.

Speaker #2: We're clear-eyed about the challenges ahead. Working through embedded land bank inflation, affordability pressures, industry cost inflation, and regulatory demands will continue to require disciplined management.

Speaker #2: But as I've said, we're responding proactively and from a position of strength. Our sustained focus on self-help and medium-term strategic drivers of growth is delivery.

Speaker #1: Our identifiable and improving operational drivers underpin our confidence, better gross margins, increasing scale, and faster asset turns, volume growth, and overhead leverage, better sales mix, capital-efficient growth, and vertical integration strengthening cost competitiveness.

Speaker #2: Replenishing our land pipeline at high margins, planning momentum, growing outlet base, three complementary brands, and differentiated vertical integration capabilities provide us with competitive advantages that are difficult to replicate.

Speaker #1: In short, we're managing today's risks, investing in tomorrow's growth platform, and remaining disciplined on returns. That combination underpins our confidence in creating a strong framework for medium-term value creation.

Speaker #2: Our efficiency program, including our review of house types, will help mitigate the current cost pressures as much as possible in the short term, while extending our affordability and efficiency advantages in the medium term.

Speaker #1: So you'll be pleased to hear that's the end of the formal script. But I thought before I hand over to Q&A, I'd just offer some of my unscripted personal reflections on the results for the half year.

Speaker #2: While the pace of progress may vary, our direction of travel is unchanged. We remain focused on disciplined execution, sustainable growth, improving returns, and delivering on our medium-term ambition of a 20% operating margin and ROCE.

Speaker #1: So I'm really pleased we've contained 210 bits of hit to gross margin caused by a mix, incentives and bill cost inflation, to less than the impact of the HA mix, because of operational leverage.

Speaker #2: Our identifiable and improving operational drivers underpin our confidence: better gross margins, increasing scale, faster asset turns, volume growth, and overhead leverage. Better sales mix, capital-efficient growth, and vertical integration are strengthening cost competitiveness.

Speaker #1: Our strat then coupled with our promoters now stands at 93,000 high-quality blocks. We explicitly acknowledge our cost hit from the Middle East in 2027, but we're looking to solve it.

Speaker #2: In short, we're managing today's risks, investing in tomorrow's growth platform, and remaining disciplined on returns. That combination underpins our confidence in creating a strong framework for medium-term value creation.

Speaker #1: Our route to higher margins and returns isn't about improving market assumptions alone. It's a combination of outlet growth, stronger mix, planning conversions, capital efficiency, and structural cost advantages.

Speaker #1: All of which I believe we've delivered on in H1. We cannot control the market, but we can control the quality of the platform we're building and that gives us confidence in the direction of travel.

Speaker #2: So, you'll be pleased to hear that's the end of the formal script. But I thought, before I hand over to Q&A, I'd just offer some of my unscripted personal reflections on the results for the half year.

Speaker #1: So I think we're delivering today as a result of the decisions we have taken in recent years. We're about self-help, not help to buy.

Speaker #2: So I'm really pleased we've contained 210 basis points of hit to gross margin caused by inflation to less than the impact of the HA mix, because of operational leverage.

Speaker #1: And I think the strategy is working. Thank you. At the front, please.

Speaker #2: Our strat, then, coupled with our promoters, now stands at 93,000 high-quality plots. We explicitly acknowledge our cost hit from the Middle East in 2022–2027, but we're looking to solve it.

Speaker #2: Thank you. Hi, morning. Allison from Bank of America. Just one question from my side. So I think you mentioned there are some weaker inquiries in July and the sales rate.

Speaker #2: Our route to higher margins and returns isn't about improving market-assumed assumptions alone. It's a combination of outlet growth, stronger mix, planned conversions, capital efficiency, and structural cost advantages.

Speaker #2: Soften a little bit. Is it mostly due to seasonality or something else? Should we be concerned about that? Thank you.

Speaker #2: All of which, I believe, we've delivered on in H1. We cannot control the market, but we can control the quality of the platform we're building and that gives us confidence in the direction of travel.

Speaker #3: So I think there's a combination of things going on in July. Some of which, for us, are macro, some of which are a bit micro.

Speaker #3: So was it the heat? Was it the football? Is it mortgage rates? Was sentiment impacted by politics? I think maybe all of the above.

Speaker #2: So I think we're delivering today as a result of the decisions we have taken in recent years. We're about self-help, not Help to Buy.

Speaker #2: And I think the strategy's working. Thank you. At the front, please.

Speaker #3: The micro point, for us, is that we're in transition in outlets at the moment. If you sell at the pace we've been selling, inevitably summer closing and summer opening, so that slows sales rates a bit.

Speaker #1: Okay, thank you. Hi, morning. Alison from Bank of America. Just one question from my side. So, I think you mentioned there are some weaker inquiries in July and the sales rate.

Speaker #3: Look, I think the July slowdown was small. I don't think it's anything to get rattled about. And as you can see from the results, actually, the platform book is up at the end of it.

Speaker #1: Softened a little bit. Is it mostly due to seasonality or something else? Should we be concerned about that? Thank you.

Speaker #3: So I wouldn't read too much into it at this point in time.

Speaker #2: So I think there's a combination of things going on in July, some of which, for us, are macro, and some of which are a bit micro.

Speaker #4: Zain Beekawa, JP Morgan. Thanks for taking my questions. I've got three. The first is just on the bill cost inflation expectations. I presume a lot of the price increases that have come through have been in the form of fuel surcharges.

Speaker #2: So, was it the heat? Was it the football? Is it mortgage rates? Was sentiment impacted by politics? I think maybe all of the above.

Speaker #4: So if we are to paint a bit of a more optimistic picture on the conflict and that falls away, what do you think that number falls down to?

Speaker #4: Secondly, on AI, I think you mentioned the use cases there. Would you have a number in mind in terms of the financial impact you could see or expect to see?

Speaker #2: The micro point for us is that we're in transition on outlets at the moment. If you sell at the pace we've been selling, inevitably summer closing and summer opening slows sales rates a bit.

Speaker #4: And then thirdly, just on the Charles Church gross margins, I think we can see an appendix three. It's come down about 340 bits, maybe just some explanations to why that is.

Speaker #2: Look, you know, I think the July slowdown was small. I don't think it's anything to get rattled about. And as you can see from the results, actually, platform book is up at the end of it.

Speaker #4: Thank you.

Speaker #3: Okay. Thank you. The action we're taking on embedded inflation I mean, look, there is already a degree of embedded inflation in built stock, right?

Speaker #2: So I wouldn't read too much into it at this point in time.

Speaker #3: So that is happening. That is coming through. But as I said in the presentation, we're taking a lot of action to deal with it.

Speaker #3: Zion Becao, JP Morgan. Thanks for taking my questions. I've got three. The first is just on the build cost inflation expectations. I presume a lot of the price increases that have come through have been in the form of fuel surcharges.

Speaker #3: If it all goes away, happy days. Right? Because we're in the best possible place. I think necessity is the mother of all inventions. And it's caused us to take a really hard look at what we're doing.

Speaker #3: So you know, if we are to paint a bit of a more optimistic picture on the conflict and that falls away, what do you think that number falls down to?

Speaker #3: And there's a lot of work going on. And I'm excited by the opportunity. My point about it being not as it currently stands, we don't know whether it's going to be fully offset with the work we're doing yet in 2027.

Speaker #3: secondly, on AI, I think you, you, you mentioned the, the use cases there. Would you have a number in mind in terms of the financial impact you could see or expect to see?

Speaker #3: And then thirdly, just on the Charles Church gross margins, I think we can see in appendix 3 it's come down about 340 bps. Maybe just some explanations as to why that is.

Speaker #3: But the reason why we point to 2028 is because we're working on a new house type range for Persimmon, which is really driving optimal performance.

Speaker #3: Thank you.

Speaker #2: Okay, thank you. the action we're taking on embedded inflation, I mean, look, there is already a degree of embedded inflation in built stock, right?

Speaker #3: Inevitably, that won't be fully implemented by next year because we've got to work it through the cycle of the planning cycle. But I think there's opportunity there.

Speaker #3: So could it be beaten? Yes. You tell me whether the war's over or not. I think there's one man who certainly doesn't know. He's not sat on this side of the earth, I don't think.

Speaker #2: So that is happening. That is coming through. And, as I said in the presentation, we're taking a lot of action to deal with it.

Speaker #2: If it all goes away, happy days, right? Because we're in the best possible place. I think necessity is the mother of all inventions, and it's caused us to take a really hard look at what we're doing.

Speaker #3: But look, we're recognizing it. And we're dealing with it. And I think what it does do because you're right, we are dealing with it like others, I think, as surcharges.

Speaker #2: And there's a lot of work going on, and I'm excited by the opportunity. My point about it being, as it currently stands, we don't know whether it's going to be fully offset with the work we're doing yet in 2027.

Speaker #3: We're just getting ahead of it. So if it does fall if and when it does fall away, I think we'll be in the even stronger position.

Speaker #3: I think that's really important for our brands because it is so much about affordability at our price point. I don't see that changing anytime soon.

Speaker #2: But the reason why we point to 2028 is because we're working on a new house type range for Simon, which is really driving optimal performance.

Speaker #3: So ultimately, in a perverse way, I think I can see Persimmon benefiting from this unforeseen set of consequences this year. So I am quite excited by that.

Speaker #2: Inevitably, that won't be fully implemented by next year, because we've got to work it through the cycle—the planning cycle. But I think there's opportunity there.

Speaker #2: So, could it—could it be beaten? Yes. You tell me whether the war's over or not. I think there's one man who certainly doesn't know.

Speaker #3: I was too early to call the AI impact yet. What I suppose I really do think I mean, there's obviously the back office stuff.

Speaker #2: He's not sat on this side of the... I don't think. But look, you know, we're recognizing it, and we're dealing with it. And I think what it does do—because you're right, we are dealing with it like others, I think—as surcharges.

Speaker #3: Finance will be doing. But I think it will improve the quality of our performance, whether that's in production in land buying, in marketing. There will be efficiencies there.

Speaker #3: I think we already employ some of those efficiencies certainly on the marketing side. Can't quantify it yet, but as I said in my presentation, we do want to be leaders in that area.

Speaker #2: we're just getting ahead of it. So if it does fall if and when it does fall away, I think we'll be in the even stronger position.

Speaker #3: We do want to be early adopters on Charles Church mix. I wouldn't read its mix. I wouldn't read too much into it. And also, look, it's a game of small numbers, isn't it?

Speaker #2: I think that's really important for our brands, because it is so much about affordability at our price point. I don't see that changing anytime soon.

Speaker #3: So I just wouldn't read too much into it. The point remains, it's a better margin than Persimmon. I'm one at the front here. Thank you.

Speaker #2: So, you know, ultimately, in a perverse way, I think I can see Persimmon benefiting from, you know, this unforeseen set of consequences this year.

Speaker #4: Thanks. Will Jones from Rothschild and Co. Redburn. Three if I can, please. First, just around price. I think you mentioned incentives up 50 bits year on year in the first half.

Speaker #2: So, I am quite excited by that. I think it's too early to call the AI impact yet. What I suppose I really do think is that there's obviously the back office stuff.

Speaker #4: Could you help us understand within the plus three of the private ASP in the order, but whether there's a net gain for overall pricing within that?

Speaker #2: Finance will be doing, but I think it will improve the quality of our performance, whether that's in production, in land buying, or in marketing. There will be efficiencies there.

Speaker #4: And just your thoughts on how you might need to approach pricing into the thoughts on how you might need to approach pricing into autumn, just as you see the market.

Speaker #2: I think we already employ some of those efficiencies, certainly on the marketing side. I can't quantify it yet, but, you know, as I said in my presentation, we do want to be leaders in that area.

Speaker #4: The second was just if you could help us understand overheads maybe. I think even ex the land sale gains, they look like they were down quite a bit year on year in H1.

Speaker #2: We do want to be early adopters on Charles Church mix. I wouldn't read its mix. I wouldn't read too much into it. and also, look, it's a game of small numbers, isn't it?

Speaker #4: How should we think about the full year? And then you did, I think, reference the potential for overhead savings and yet you're still looking to grow quite strongly.

Speaker #4: So how we marry that up. And perhaps the last one for 27, you have talked about the potential for some margin pressure, understandable, but can we still assume your base case would be for volume growth off this higher level you exit 26?

Speaker #2: So, you know, I just wouldn't read too much into it. The point remains: it's a better margin than Persimmon.

Speaker #4: There was.

Speaker #2: One at the front here. Thank you.

Speaker #3: Thanks. We'll join from Rothschild, and three, if I may. First, just around price—I think you mentioned incentives up 50 bps year-on-year in the first half.

Speaker #4: With thanks.

Speaker #5: Wait, so Will, could you just repeat the third one again? Sorry on the volume.

Speaker #4: Volume thoughts for next year.

Speaker #3: Could you help us understand, within the plus three of the private ASP and the order, whether there's a net gain overall for pricing within that?

Speaker #5: For next year. Thank you. Okay. So pricing and incentives. So yes, in 2025, we saw a tick up of incentives, as I said. So it was 4.5% in the first half year.

Speaker #3: And just your thoughts on how you might need to approach pricing into all s the thoughts on how you might need to approach approach pricing into autumn, just as you see the market.

Speaker #5: And I think we were about 4.8% across the year as a whole. So you can see that ticked up. And then we've seen that 5% come through in the first half.

Speaker #3: The second was just if you could help us understand overheads. Maybe, I think even excluding the land sale gains, they looked like they were down quite a bit year on year in H1.

Speaker #5: That is all reflected in the audit book, though. So the audit book ASPs that you see there, that is net of incentives. So you can see the year that we are seeing good overall robust pricing, I think, across the piece.

Speaker #3: How should we think about the full year? And then, you did, I think, reference the potential for overhead savings, and yet you’re still looking to grow quite strongly.

Speaker #5: But incentives are an important part of the market at the moment. It's a market, as Dean has said, a few times, which is governed by affordability.

Speaker #3: So, how do we marry that up? And perhaps, for the last one—the '27 you have talked about—the potential for some margin pressure. Understandable, but can we still assume your base case would be for volume growth off this higher level you exit '26?

Speaker #5: It's a market where we're having to work to drive sales. And we are that's part and parcel. But yeah, I don't think there's anything particularly unusual, particularly significant in that.

Speaker #3: With thanks.

Speaker #1: Wait, say that, Steve. So Will, could you just repeat the third one again? Sorry, I had an issue with the volume. Oh, for next year.

Speaker #5: In terms of overheads, you're right. So our admin costs have come down. If you're looking at on the face of the P&L, don't forget the prior year includes the exceptional costs and the CMA settlement.

Speaker #3: Yeah. Sorry. Thank you.

Speaker #1: Okay, so pricing and incentives. So, yeah. Look, in 2025 we saw a tick up of incentives, as I said. So it was 4.5% in the first half of the year.

Speaker #5: But even if you strip that out, just the underlying overheads have also come down by a couple of million pounds in H1 compared to H1 last year.

Speaker #1: And I think we were about 4.8% across the year as a whole, so you can see that ticked up. And then we've seen that 5% come through in the first half.

Speaker #5: And we're very focused on keeping that as flat as we can as we go through the full year compared to last year as well.

Speaker #1: That is all reflected in the audit book, though. So the in the audit book ASPs that you see there, that is net of incentives.

Speaker #5: So I think it comes again back to the strategy of driving volume, but driving that operating leverage is a really important part of what we're trying to do.

Speaker #1: So you can see that we are seeing good, overall, robust pricing, I think, across the piece. But, you know, incentives are an important part of the market at the moment.

Speaker #5: We haven't given volume guidance yet for 2027. It's a little bit early. We'll see whether how the market is and coming out of the summer.

Speaker #1: You know, it's a market, as Dean has said, you know, a few times, which is governed by affordability. It's a market where we're having to, you know, work to, to drive sales.

Speaker #5: I suppose what I would say is, though, that our strategy is one of driving outlet growth, driving volume growth through the three brands and that is designed to drive the growth dropping through to profits and to returns.

Speaker #1: And we are, you know, that's part and parcel. But yeah, I don't think there's anything particularly unusual or particularly significant in that. In terms of overheads, you're right.

Speaker #1: So, our admin costs have come down. If you're looking at it on the face of the P&L, don't forget the prior year includes the exceptional costs and the CMA settlement.

Speaker #5: So that is what we're focused on. But we haven't given any explicit guidance yet for 27.

Speaker #1: But even if you strip that out, just the underlying overheads have also come down by a couple of million pounds in H1 compared to H1 last year.

Speaker #3: Now, we'll move over to that side in a moment.

Speaker #4: Thanks. Ainsley Lammin from Investec. Just two for me, actually, on the land market. Just wondered, if you could give us an update on how much easier the plan in and land kind of sides become.

Speaker #1: And, you know, we're very focused on keeping that as flat as we can. You know, as we go through this the, the full year compared to compared to last year as well.

Speaker #4: Obviously, planning bills have been can you repeat that? On the planning, has it become easier? You've had the planning bill passed, local elections out the way.

Speaker #1: So, I think it comes again back to the strategy of driving volume, but driving that operating leverage is a really important part of what we're trying to do.

Speaker #4: Just interested to hear your view on that side of things. And then secondly, again, on the land market, are you more active? Have you increased your hurdle rates?

Speaker #1: We haven't given volume guidance yet for 2027. It's, you know, it's a little bit early. We'll see whether, you know, how the market is and, you know, coming out of the summer.

Speaker #4: Obviously, lots of peers have backed off in the land market. Just your view on that.

Speaker #1: I suppose what I would say is those that our strategy is one of driving outlet growth, driving volume growth through the three brands, you know, and that is designed to drive the growth and the growth dropping through to, to profits and to return.

Speaker #3: So look, I mean, what we would say for sure is that what the government has done at national planning level is incredibly helpful. However, the system on the ground is still gummed up for a host of reasons.

Speaker #1: So that is what we're focused on. But we haven't given any explicit guidance yet for '27.

Speaker #3: What I would say is I think that the penny has dropped. In government, and that is a good thing. The creation of the accelerator sites now looking at smaller sites is going to help the whole industry.

Speaker #2: We'll move over to that side in a moment.

Speaker #3: Thanks. Ainsley Lammon from Investec. Just two from me actually on the land market. Just wondered if you could give us an update on how much easier the planning and land kind of side has become.

Speaker #3: Obviously, planning bill's been.

Speaker #2: More than debt. What? Can you repeat that?

Speaker #3: And it's very much focused on the here and now. I think when the government a few years back embarked on this, it was very much focused on thinking in terms of a 10-year horizon.

Speaker #3: J, on the planning side, has it become easier? You've had the planning bill pass, local elections out of the way—just interested to hear your view on that side of things.

Speaker #3: And then secondly, again on the land market, are you more active? Have you increased your hurdle rates? Obviously, lots of peers have backed off in the land market.

Speaker #3: So they create policy now and would be happy that maybe in the next parliament, it would deliver benefits in the next parliament. I don't think they think that now.

Speaker #3: Just your view on that.

Speaker #2: So, look, I mean, what we would say for sure is that what the government has done at the national planning level is incredibly helpful. However, the system on the ground is still gummed up for a host of reasons.

Speaker #3: And as a result of that, the creation of these new task force, these focus groups on accelerator sites I believe will begin to build momentum.

Speaker #3: And it's quite amusing for us to watch, to be honest with you, because with MLCG really for the first time, themselves having to deal with local planning committees I think they're finding that a revelation.

Speaker #2: what I would say is I think that, the penny has dropped. In government, and that is a good thing. the creation of the accelerator sites now, looking at smaller sites is gonna help the whole industry.

Speaker #3: So we can only gain from that experience. So I think that's a good thing. As I said in my speech, inevitably, the land market slowed.

Speaker #3: In the first half, we absolutely were focused on getting costs right. And where we bought, I believe we have so that's margin enhancing. So we've been very disciplined.

Speaker #2: and it's very much focused on the here and now. I think when the government a few years back embarked on this, it was very much focused on thinking in terms of a 10-year horizon.

Speaker #2: So they create policy now and would be happy that, you know, maybe in the next parliament, it would deliver benefits in the next parliament.

Speaker #3: We've negotiated hard. Some we won, some we haven't won yet. So where we said no, we're seeing some landowners say, well, goodbye. Or au revoir.

Speaker #2: I don’t think they think that now. And as a result of that, the creation of these new task forces, these focus groups on accelerator sites, I believe will begin to build momentum.

Speaker #3: And some have said goodbye and come back the next day. So let's in the land market. It is quiet. But there's still plenty of interesting opportunities out there.

Speaker #2: It and it's quite amusing for us to watch, to be honest with you, because with MLCSG, really for the first time, themselves having to deal with local planning committees, I think they're finding that a revelation.

Speaker #2: Should we turn over to this side now?

Speaker #4: Yeah. Thanks very much. Yeah, Charlie Campbell, it's T4. Just a couple of questions. On the other income line, which is land sales, clearly a move half to half.

Speaker #2: So we can only gain from that experience, so I think that's a good thing. As I said in my speech, inevitably, the land market slowed.

Speaker #4: Should we expect to move year to year as well or not? And then secondly, offsetting sort of half the bill cost inflation, how should we think of that splitting out between savings in cost of goods and overheads?

Speaker #2: In the first half, we absolutely were focused on getting costs right, and where we bought, I believe we have. So that's margin enhancing. We've been very disciplined.

Speaker #4: Are you doing is that evenly split or is it more on one than the other? Just to help us think about kind of margin structure.

Speaker #2: We've negotiated hard—some we've won, some we haven't won yet. So, where we said no, we're seeing some landowners say, "Well, goodbye," or, "Au revoir." And some have said goodbye and come back the next day.

Speaker #5: Can we say those? Yeah. So on the other income line, yes, that increased 10 million from 6 to 16. I think last full year, it was 21, 22 million total.

Speaker #5: I'd expect it to be in the 20 to 30 for the full year think we have the opportunity because we've been active in the land market to trade pieces of land where it's the right thing and it's the right deal to do.

Speaker #2: So, let's see. We will continue to engage in the land market. It is quiet, but there are still plenty of interesting opportunities out there.

Speaker #3: Should we turn over to this side now?

Speaker #5: And we've been doing that. And that's very helpful that we can do that. But ultimately, the numbers are not that significant. The overall result.

Speaker #1: Yeah, thanks, thanks very much. Yeah, Charlie Campbell at Stifel. Just a couple of questions. On the other income line, which is land sales, clearly a move half to half.

Speaker #1: Should we expect to move year to year as well, or not? And then secondly, offsetting sort of half the bill cost inflation.

Speaker #5: In terms of the mitigations, I think it's probably a bit early to tell you exactly where they'll come. I mean, clearly, there's a lot of it, Charlie will come through gross margin through the cost, whether that's around design, house type, specifications, and so on.

Speaker #1: How should we think of that splitting out between savings in cost of goods and overheads? Are you doing it evenly split, or is it more on one than the other?

Speaker #5: Clearly, we're looking hard those Dean said across the whole business. And that's quite right. We should do. So we will see savings and efficiencies, I think, across the piece.

Speaker #1: Just to help us think about the kind of margin structure.

Speaker #3: Can we say those?

Speaker #2: Exactly.

Speaker #1: Yeah. So, on the other income line, yes, that increased by £10 million, from £6 million to £16 million. I think last full year it was £21–22 million total.

Speaker #5: But we'll come back with more detail on that later in the year and obviously with the full year when we've done that work. But I think for me, the key thing as Dean said is it's almost irrespective of what happens to the inflation, these are the right things to do.

Speaker #1: I'd expect it to be in the 20 to 30 for the full year again. So yeah, I think, you know, we have the opportunity because we've been active in the land market to trade pieces of land where it's the right thing and it's the right deal to do.

Speaker #5: So either they are helping to protect margin or they help to give us opportunity if cost pressures reduce. So these are good kind of no regrets actions that we'll be looking to take.

Speaker #1: And, and we've, you know, and we've been doing that, and that's yeah, that's very helpful that we can we can do that. But ul-ultimately, the numbers are, you know, are not that significant to the overall, overall result.

Speaker #2: Glynis?

Speaker #4: Thank you. Gwyneth Johnson, Jefferies. Four quite big picture ones, actually. Probably. Firstly, the new housing type. Can you give us any sort of granularity how much more profitable they could be or even just colour?

Speaker #1: In terms of the mitigations, I think it's probably a bit early to tell you exactly where they'll come. I mean, clearly, a lot of it, Charlie, will come through gross margin, through the cost around design, house type, specifications, and so on.

Speaker #4: Are they smaller? Are they more designed for what might be coming any future government program? Is it about the palette of raw materials? What makes them more profitable?

Speaker #1: You know, clearly we're looking hard, so as Dean said, across the whole business. And, you know, that's quite right that we should do so. You know, we will see savings and efficiencies, I think, across the piece.

Speaker #4: Second of all, you termed your 300 outlook count for next year as short term. What's the medium term? 0.3 or question 3. Outgrowing the first time by a market.

Speaker #1: But we'll come back with more detail on that later in the year and, you know, obviously with the full year when we've done that work.

Speaker #1: But I think, for me, the key thing—as Dean said—is it's almost irrespective of what happens to the inflation, these are the right things to do.

Speaker #4: It's quite a big percentage outperformance. Why? Are you underpricing? Throw that one in just to get you riled up and answering the question. And lastly, your very first slide said pro-housing government.

Speaker #1: So either they are helping to protect margin, or they help to give us opportunity if, you know, if cost pressure is reduced.

Speaker #1: So these are good, kind of 'no regrets' actions that we'll be looking to take.

Speaker #4: Why do you view that to be the case at this point?

Speaker #3: Glenis.

Speaker #4: Thank you. Glenis Johnson Jeffries. Four quite big picture ones, actually, probably. Firstly, the new housing type—can you give us any sort of granularity on how much more profitable they could be, or even just color? You know, are they smaller?

Speaker #3: I'm not sure I caught all of your first question about house types, but I'm not going to give you much away because you'll see it when it comes.

Speaker #3: And I'm certainly not telling the competition. But I do think it will give it will reinforce Persimmon's edge. Which I guess I think also explains your third question on first-time buyers.

Speaker #4: Are they more designed for what might come in any future government program? Is it about the palette of raw materials? What makes them more profitable?

Speaker #3: I don't think we're underpricing. I think we have got a highly attractive position point in that market. You can see we're earning increased in ASPs.

Speaker #4: Second of all, you termed your 300 outlook count for next year as short term. What's the medium term? Number three: outgrowing the first-time buyer market.

Speaker #4: It's quite a big percentage outperformance. Why? Are you underpricing? I'll throw that one in just to get you riled up and answering the question.

Speaker #3: And we're commanding good margins. So I don't think we are underpricing. I think that it's a highly attractive proposition for a first-time buyer. And Persimmon has got that dead right.

Speaker #4: And lastly, your very first slide said 'pro-housing government.' Why do you view that to be the case at this point?

Speaker #2: I'm not sure I caught all of your first question about house types, but I'm not going to give you much away because it's not telling the competition.

Speaker #3: In terms of your second point, I'll answer that by saying that our target is probably in a couple of years to try and get to 300.

Speaker #2: But I do think it will give— you know, it will reinforce Persimmon's edge. Which, I guess, also explains your third question, on first-time buyers.

Speaker #3: That's where we're aiming for. That as Andrew said to me the other day, that depends when you measure it because we might hit it one day and the next day we've sold out and something else.

Speaker #3: So the multiple measurement points on outlets will determine all sorts of things. But the trajectory of travel is up. And we'd like to get there within the space of a couple of years.

Speaker #2: I don't think we're underpricing. I think we've got a highly attractive position point in that market. You can see we're earning increases in ASPs.

Speaker #3: So I think that answers the short-term question. I do believe on the supply side, the government remains committed to its policy. And we do, as I said earlier, see MHCLG continuing to drive the supply side.

Speaker #2: And we're commanding good margins, so I don't think we are underpricing. I think it's a highly attractive proposition for a first-time buyer, and Persimmon has got that dead right.

Speaker #2: In terms of your second point, I'll answer that by saying that our target is probably, in a couple of years, to try and get to 300.

Speaker #3: And improving planning and with Matthew Pennycook now giving us a cabinet, I think that reinforces that point of view. I guess what lies behind your question is what about the demand side?

Speaker #2: That's where we're aiming for. As Andrew said to me the other day, that depends on when you measure it, because we might hit it one day and the next day we've sold out of something else.

Speaker #2: So, you know, the multiple measurement points on outlets will determine, you know, all sorts of things. But the trajectory of travel is up, and we'd like to get there within the space of a couple of years.

Speaker #3: Who knows? We're not, as I said, focused on help to buy or focused on self-help. Shall we carry on?

Speaker #4: Yeah. Cheers. Sam Cullen from Pearl. I've just got one. You mentioned when you talked about outlets earlier, being in a bit of a transition year in terms of the last stages of some, the very early stages of others.

Speaker #2: So I think that answers the short-term question. I do believe, on the supply side, the government remains committed to its policy, and we do, as I said earlier, see MHCLG continuing to drive the supply side.

Speaker #4: Can you give us an idea of what the distribution of that is currently and what kind of good looks like? I what would a Nirvana be in terms of where you are in the distribution of your outlets?

Speaker #3: Well, I've turned 60 a few weeks ago. And I realized I've never hit Nirvana. So I guess this is it, isn't it? I don't know what Nirvana is.

Speaker #2: And improving planning, and with Matthew Pennycook now giving us a cabinet, I think that reinforces that point of view. I guess what lies behind your question is, what about the demand side?

Speaker #3: And when we get there, I'll tell you. What I can tell you is we opened 41 outlets so far this year. And we're on track to open at least another 60 in the second half.

Speaker #3: And look, with the best will in the world, you try and manage these things. It's market-driven. And what sells and what doesn't sell. You might think you know what's going to happen.

Speaker #2: Who knows? We're not, as I said, focused on Help to Buy. We're focused on self-help. Sherry, carry on.

Speaker #3: And then you find out you don't. So that inevitably creates peaks and troughs in when outlets open and close. Added to that, planning complexity, it's just the day-to-day grind of what we do.

Speaker #3: Yeah, cheers. Sam Cullum from Peel. I've just got one. You mentioned, when you talked about outlets earlier, being in a bit of a transition year—in terms of at the last stages of some, the very early stages of others.

Speaker #3: Can you give us an idea of what the distribution of that is currently and what kind of ‘good’ looks like? What would a Nirvana be in terms of where you are in the distribution of your outlets?

Speaker #3: I do think that impacted us in July. As we got to the tail end, because we sold out faster than we were expecting on some outlets and some outlets were delayed as we were trying to get the 106 agreed or whatever.

Speaker #2: Well, I turned 60 a few weeks ago, and I realized I've never hit Nirvana. So I guess this is it, isn't it? I don't know what Nirvana is.

Speaker #3: But I don't think it's alters at all our picture of long-term momentum.

Speaker #2: And when we get there, I'll tell you. What I can tell you is we opened 41 outlets so far this year. We're on track to open at least another 60 in the second half.

Speaker #5: Morning. Chris Millington at Deutsche. I just want to ask you a question about the 20% margin targets. Is that purely about landbank evolution or does it require volume growth lower incentives?

Speaker #2: And look, you know, with the best will in the world, you try and manage these things. It’s market-driven, and what sells and what doesn’t sell—you might think you know what’s going to happen, and then you find out you don’t.

Speaker #5: Do you want me to go one at a time?

Speaker #3: So I mean, look, where are we on that target? Yeah, look, you're dead right. Really implicitly from where we are, it's a big leap from where we are today.

Speaker #2: So that inevitably creates peaks and troughs in when outlets open and close. Added to that planning complexity, you know, it's just the day-to-day grind of what we do.

Speaker #3: I totally recognize that. And indeed, we've been very transparent today about we expect more cost inflation to come through tail end of this year and into next.

Speaker #2: I do think that impacted us in July as we got to the tail end, 'cause we sold out faster than we were expecting on some outlets, and some outlets were delayed as we were trying to get the 106, 106 agreed, or whatever.

Speaker #3: But I do think I think there's two aspects to this. I think the strategy we're delivering is working. It's delivering growth. And I think Persimmon 2,500 is delivering well below its optimum scale.

Speaker #2: But I don't think it alters at all our picture of long-term momentum.

Speaker #3: So I think operational leverage will continue to come through. And then you add to that getting your costs right in buying land. That will help the margin.

Speaker #3: morning. Chris

Speaker #5: Millington at Deutsche. I just wanted to ask you a question about the 20% margin targets. Is that purely about land bank evolution, or does it require volume growth and/or lower incentives?

Speaker #5: Do you want me to go one at a time?

Speaker #3: And then as we grow the business, we drive Charles Church. So our high margin, we drive capital returns in Westbury. We drive vertical integration.

Speaker #2: So, I mean, look, where are we on that target? Yeah, look, you're dead right, really, implicitly, from where we are, it's a big leap from where we are today.

Speaker #2: I totally recognize that. And, indeed, we've been very transparent today about the fact that we expect more cost inflation to come through the tail end of this year and into next.

Speaker #3: That will, in my view, we're confident in the long run. That will deliver. Will it deliver tomorrow? Will we get blown off course by something else that agent Orange or somebody else does?

Speaker #2: but I do think, there's you know, I think there's two aspects of this. I think there's the, the strategy we're delivering is working. It's delivering growth.

Speaker #3: Yeah, probably. But I think what's really key, and I think you see this in our results because this is the second side of what I was trying to address here, which is I do think that nevertheless, what we've done and you see it from our results in the first half, we've got the benefit of 200 bips of overhead leverage coming through.

Speaker #2: And I think Persimmon at two and a half thousand is delivering well below its optimum scale. So I think operational leverage will continue to come through.

Speaker #2: And then you add to that, getting your costs right in buying land—that will help the margin. And then, as we grow the business, we drive Charles Church, so our high margin; we drive capital returns in Westbury; we drive vertical integration.

Speaker #3: So it's giving us resilience even in a really challenging market. So I think might events delay the end destination. Yeah, probably will. Will it, though, what we're doing give us an opportunity to outperform the market?

Speaker #3: Yes, it does. So I think it's right for us to set the strategy and it's right for us to set those targets. And Andrew and I are confident that we will get there.

Speaker #2: That will, in my view—we're confident in the long run—that will deliver. Will it deliver tomorrow? Will we get blown off course by something else that, you know, Agent Orange or somebody else does?

Speaker #5: Thank you for that. Quick check-in question. The 27% site growth margin, how can we look at that relative to the report? You may have mentioned this before, but can you just bridge that for us?

Speaker #2: Yeah, probably. But I think what's really key—and I think you see this in our results, because this is the second side of what I was trying to address here—is that I do think that nevertheless, what we've done (and you see it from our results in the first half), we've got the benefit of 200 bps of overhead leverage coming through.

Speaker #2: So we have some of cost of our commercial teams and some of the customer care costs and so on that we sit below the site margin.

Speaker #2: So you can see as we get to as we get towards the 20% target, I'd expect us to be at an overhead leverage of overheads at the sort of 4% position.

Speaker #2: The gap from embedded margin to statutory gross margin is to be another 4%, something like that. So that embedded gross margin, as I said in the presentation, has come off a little bit because we factored in the additional build costs.

Speaker #2: So it's giving us resilience, even in a really challenging market. So, I think, you know, might events delay the end destination? Yeah, probably will.

Speaker #2: Will it, though, what we're doing, give us an opportunity to outperform the market? Yes, it does. So I think it's right for us to set the strategy, and it's right for us to set those targets.

Speaker #2: And then, of course, actually what we're now looking to do is to find ways to mitigate those and drive those through. And of course, importantly as well, it's also dragged by some of the sites that have been in there since pre-2024.

Speaker #2: So sites that were hit by the inflation in '22 and '23, which again, we're trading our way

Speaker #2: And Andrew and I are confident that we will get there.

Speaker #5: Thank you for that. Quick check-in question: the 27% site gross margin—how can we look at that relative to the report? You may have mentioned this before, but can you just bridge that for us?

Speaker #5: Sorry, the last one. It's about you mentioned about pricing differentials in the North versus the South. Are you seeing a big difference in sales rate as well or does the affordable product keep that a little bit more consistent?

Speaker #6: Yeah. So, we have some of the cost of our commercial teams and some of the, you know, customer care costs and so on that we sit below the site margin.

Speaker #3: It is selling slightly faster up north. Clearly, but also there is an affordability element of that for sure. But I think there's also a capital allocation decision that we've made internally.

Speaker #6: So you can see, you know, as we get to, you know, as we get towards the, the, the 20% target, I would expect us to be at an overhead leverage of, you know, overheads at the sort of 4% position.

Speaker #3: I mean, Persimmon has always been slightly biased to the North, but investment in recent years has driven us to do even more of that.

Speaker #6: The gap from embedded margin to statutory gross margin is to be, you know, to be another 4%, something like that. So that embedded gross margin, as I said in the presentation, has come off a little bit because we factored in the additional build costs.

Speaker #3: So I think that has also impacted and is impacting our performance.

Speaker #6: And then, of course, actually what we're now looking to do is to find ways to mitigate those and drive those through. And, of course, importantly as well, it's also dragged by some of the sites that have been in there since pre-2024—so sites that were hit by the inflation in '22 and '23, which, again, we're trading our way through.

Speaker #5: Thank you.

Speaker #6: Morning, Peter. I just added, I'm going to add Morgan Stanley. Two questions for me. First one is just around 2026 volumes. So with 80% of private completions now secured and I think you said all of HA, do you see at all any execution risk for 2026 in H2 just around a build mortgage availability cancellations or quite confident on that?

Speaker #5: Sorry, the last one. It's about—you mentioned pricing differentials in the North versus the South. Are you seeing a big difference in sales rate as well, or does the affordable product keep that a little bit more consistent?

Speaker #6: And then second, just on you mentioned on capital returns, you said surplus cash could potentially be deployed maybe via buybacks. What balance sheet or cash conversion threshold would make buybacks more likely?

Speaker #2: It's selling slightly faster up north, clearly. But also, there is an affordability element to that for sure. But I think there's also a capital allocation decision that we've made internally.

Speaker #6: Thank you.

Speaker #2: Yeah, I'll pick those up. So look, on the 2026 volume, we're confident in the 12 and a half. That's why we've given that guidance on that improved guidance today.

Speaker #2: I mean, Persimmon has always been, you know, slightly biased to the North, but investment in recent years has driven us to do even more of that.

Speaker #2: So I think that has also impacted, and is impacting, our performance.

Speaker #2: I mean, of course, there is always execution risk until you've finished. So whether that's if the market changed or if there's always execution risk on finalizing bills.

Speaker #5: Thank you.

Speaker #3: Morning, Peter. I just added—I'm gonna—Morgan Stanley. Two questions for me. First one is just around 2026 volumes. So, with 80% of private completions now secured, and I think you said all of HA, do you see at all any execution risk for 2026 in H2, just around build, mortgage availability, cancellations, or are you quite confident on that?

Speaker #2: So of course, there is work to be done. But we are confident in that number. And you can see both as you just called out from that sales perspective, we are well covered on the private side, fully covered on the HA side.

Speaker #2: Our build is ahead of we're about we're ahead of last year's delivery build at this stage of last year. So we're in a good place.

Speaker #3: And then second, just on—you mentioned on capital return, you said surplus cash could potentially be deployed, maybe via buybacks. What balance sheet or cash conversion threshold would make buybacks more likely?

Speaker #2: We're driving it hard. But I'm afraid there is always there's always some execution risk until you get to the end of the year, of course, there is.

Speaker #2: But we're confident in that number, Peter, which is why we've given it. In terms of capital returns, so what I've tried to do, as I said, is to articulate that we keep that flexibility in looking at the market at the time in terms of where we are.

Speaker #3: Thank you.

Speaker #6: Yeah, I'll pick those up. So, so look, on the on the 2026 volume, we're confident in the 12 and a half. That's why we've given that guidance and that improved guidance today.

Speaker #2: So even obviously today, we're trading above net assets, not by much on the first to admit, but we need to look at it in the context of the share register, in the context of where we are in terms of share price and returns and see what is best value.

Speaker #6: I mean, of course, there is always execution risk until you've until you've finished. So whether that's, you know, if the market changed or if, you know, there's always execution risk on finalizing bills.

Speaker #6: So of c of course, the, you know, there is work to be done. but we are confident in that number. And you can see both as, as, as you just called out, from that sales perspective, we are well covered on the private side, fully covered on the HA side.

Speaker #2: So we will look at that as we go forward. What I wanted to do is to be very clear that we are flexible in the way that we will look at that as we go forwards.

Speaker #6: Our build is ahead of where—where about, you know, we're ahead of last year's delivery build at this stage of last year. So we're in a good place.

Speaker #1: Thank you.

Speaker #6: We're driving it hard. But I'm a I'm afraid there is always there's always some execution risk until until you get to the end of the year, of course, of course there is.

Speaker #7: Morning, Adrian Kersey, PAMU Liberal. Just one question for me. On slide 9 on the bottom right-hand side, you show the embedded margin across the owned sites, putting them into the four different buckets.

Speaker #6: but we're confident in that number, Peter, which is why we which is why we've given it. in terms of capital returns, so what I've tried to do is, as I said to you, is to articulate that we keep that flexibility in ha in, in looking at the market at the time in terms of where we are.

Speaker #7: How quickly do you think your work through the majority of the lower margin buckets?

Speaker #2: Well, some of the sites in the low margin are large sites and they will take time. So I mean, I think our average site size Adrian is around 170, 180 units.

Speaker #6: So you know, even you know, obviously today, we're trading above net assets, not by much on the first to admit, but, you know, but we need to look at it in the context of, you know, the share register, in the context of where we are in terms of, share price and returns and see what is what is best value.

Speaker #2: It's been steady on that for a while. But of course, within that, there is a tail of quite long sites. So that will take time.

Speaker #2: I think what we said in March, which is still the case, is that half of our delivery in '27 will be on those sites that were acquired pre-2023.

Speaker #6: So, we will look at that as we go forward. What I wanted to do is to be very clear that we are flexible in the way that we will look at that as we go forwards.

Speaker #2: So that is still a big feature of 2026 delivery and 2027 delivery. And then it starts to unwind. But there will be a tail there, which is a longer tail, which goes beyond.

Speaker #7: Thank you.

Speaker #3: Morning, Adrian Kersey, PAMU Liberal. Just one question from me. On slide nine, on the bottom right-hand side, you show the embedded margin across the owned sites, putting them into the four different buckets.

Speaker #8: Hi, Rebecca Parker from Goldman Sachs. Just two from me. You've made it quite clear that you're focusing on self-help, but there has been, I guess, speculation around the potential for helped by under the new Prime Minister.

Speaker #3: How quickly do you think you'll work through the majority of the lower-margin buckets?

Speaker #6: Well, some of the sites in the low margin are large sites, and they will take time. So, I mean, I think our average site size, Adrian, is around 170 to 180 units.

Speaker #8: Just wondering if you've had any discussions with government and what format you think are helped by scheme could come in.

Speaker #6: It's been steady on that for a while. But of course, within that, there is a tail of quite long sites, so that will take time.

Speaker #3: Well, look, I'll just reiterate what I said, which is we are focused on self-help. Clearly, if helped by or some sort of first-time buyer support words come in, that would be helpful.

Speaker #6: I think what we said in March, which is still the case, is that, you know, half of our delivery in 2027 will be on those sites that were acquired pre-2023.

Speaker #3: Certainly, I think MHCLG are very actively looking at options at the moment, but it's just too soon to say whether Treasury is in favor or not.

Speaker #6: So that is still a big feature of 2026 delivery and 2027 delivery, and then it starts to unwind. But there will be a tail there—which is a longer tail—which goes beyond.

Speaker #3: I can't give you any color on that.

Speaker #8: Sure. And then just on the levers for your net cash target, what would move you towards the top and bottom end of that range?

Speaker #4: Hi, Rebecca Parker from Goldman Sachs. Just two from me. You've made it quite clear that you're focusing on self-help, but there has been, I guess, speculation around the potential for Help to Buy under the new Prime Minister.

Speaker #8: Just any moving parts there.

Speaker #2: Yeah. So I mean, broadly speaking, I mean, we'll deliver the second half year 1,500 more units than we delivered in the first half. So that gives me round numbers, Rebecca, 400 million of additional revenue by build and the land spend is broadly flat.

Speaker #4: Just wondering if you've had any discussions with government, and what format you think a Help to Buy scheme could come in?

Speaker #2: Well, look, I'll just reiterate what I said, which is we are focused on self-help. Clearly, if Help to Buy or some sort of first-time buyer support were to come in...

Speaker #2: I'll spend 200 million quid on dividends in the second half. So you can see that it's that additional volume because we're H2 weighted would drive the cash generation into the and then, of course, within the range, then it depends on where we are on land spend.

Speaker #2: That would be helpful. Certainly, I think MHCLG are very actively looking at options at the moment, but it's just too soon to say whether Treasury is in favor or not.

Speaker #2: It depends where we are on forward build. It depends exactly where we are on revenue mix. So it's all those things which then within the range will determine where we get to.

Speaker #8: One more. You mentioned some potential restructuring costs with the cost app program. Just wondering if you can provide any more color on those.

Speaker #2: I can't give you any color on that.

Speaker #4: Sure. And then just on the levers for your net cash target, what would move you towards the top or bottom end of that range?

Speaker #2: Yeah. So what we've tried to do on the cost piece is be very clear around the breadth of the work that we are doing to look to how we can mitigate the cost pressures that are coming to the business.

Speaker #4: Just any moving parts there.

Speaker #6: Yeah. So, I mean, broadly speaking, we'll deliver in the second half of the year 1,500 more units than we delivered in the first half.

Speaker #2: And that is a full-sale look across how we do things across the piece. So what the reason I put that line into my financial report was just to say, look, as we go through that program, if there is some restructuring, then we will face into that and deal with it.

Speaker #6: So that gives me, you know, round numbers, Rebecca, £400 million of additional revenue. My build and the land spend is broadly flat.

Speaker #6: I'll spend 200 million quid on dividends in the second half. So you can see that, you know, it's like additional volume because we're H2 weighted would drive the would drive the cash generation into the and then, of course, within the range, then it depends on where we are on land spend.

Speaker #2: But there might not be. It depends on that work is ongoing. We are in the middle of that at the moment, and we will see where that gets to.

Speaker #2: So I wanted to be I guess open and clear that there could be something come the end of the year, but there might not be as well.

Speaker #6: It depends where we are on forward build. It depends exactly where we are on revenue mix. So it's all those things, which then, within the range, will determine where we get to.

Speaker #2: We'll work through the exercise and we'll see what comes through.

Speaker #4: One more. You mentioned some potential restructuring costs with the Cost Pro program. Just wondering if you can provide any more color on those.

Speaker #1: No more questions? Okay. Thank you very much. I suppose just some summary points for me. Very quickly, I think the decisions that we've taken is delivering growth now and does give us confidence for the future.

Speaker #6: Yeah. So, so what I've what we've tried to do on the on, on the cost piece is be very clear around the breadth of the work that we are doing to look to how we can mitigate the cost pressures, that are coming, to the business.

Speaker #1: But we recognize it's very challenging out there and we're clear-eyed about it. However, we are addressing it and the work we're doing can only help us in the longer term.

Speaker #6: And that is a is a full-sale look across how we do things across the piece. So what the reason I, I, I put that line into my, my financial report was, was just to say, look, as we go through that program, if there is some restructuring, then we will face into that and deal with it.

Speaker #6: But there might not be. It depends on, you know, the work—that work is ongoing. You know, we are in the middle of that at the moment, and we will see where that gets to.

Speaker #6: So I wanted to be, I guess, open and clear that there could be something from the end of the year, but there’s some—you know—but there might not be as well.

Speaker #6: Well, we'll work through the exercise and we'll see what comes through.

Speaker #3: No more questions? Okay. Thank you very much. I suppose just some summary points from me. Very quickly, I think the decisions that we've taken are delivering growth now, and do give us confidence for the future.

Speaker #3: But, you know, we recognize it's very challenging out there, and we're clear-eyed about it. However, we are addressing it, and the work we're doing can only help us in the longer term.

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