Full Year 2026 MJ Gleeson PLC Earnings Call

September 15, 2026

Graham Prothero: Morning. Welcome to MJ Gleeson's annual results presentation for the year to June 2026. I have hotfooted it here from my Radio 4 breakfast show, which I hope you are all listening. It was very exciting because Mark actually got me to go to the studio, so I sat there with Nick and Justin and my headphones, all very exciting. But then, even more excitingly, following on from me, Johnny Marr walks in. So there is me and Johnny, recognizing two aging rock stars. But the best bit was the text from my great old friend, Andrew Duxbury, who said, "What a classic BBC link to go from the housing market to The Smiths, because heaven knows we are all bloody miserable now." It is certainly not the most propitious of economic backdrops against which to be presenting our results.

Speaker #1: Today, welcome to MJ Gleeson's annual results presentation for the year to June 2026. I've hot-footed it here from my radio breakfast show, which I hope you're all—I hope you're all listening.

Speaker #1: It was very exciting because Mark actually got me to go to the studio, so I sat there with Nick and Justin in my headphones— all very exciting.

Speaker #1: But then, even more excitingly, following on from me, Johnny Marr walks in. So there's me and Johnny, you know, recognizing two aging rock stars.

Speaker #1: And—but the best bit was the text from my great old friend Andrew Duxbury, who said, "What a classic BBC link to go from the housing market to the Smiths," because heaven knows we're all bloody miserable now.

Speaker #1: It is certainly not the most propitious of economic backdrops against which to be presenting our results. But, on the other hand, I'm actually really pleased and really excited with the changes and the improvements that we've made in Gleeson Homes this year.

Graham Prothero: On the other hand, I am actually really pleased and really excited with the changes and the improvements that we have made in Gleeson Homes this year. We can only affect what we can affect, but I will talk to you about that this morning. There is a bit to get through, so please bear with me, but I think it is worth sharing with the market and with the changes we have made, it is worth sharing that with you. So I will try and take it at some pace, but bear with me. So I characterize the outturn as a robust performance against a challenging backdrop, and that was underpinned by good performance from Gleeson Homes selling 10% more homes than the previous year. Pleased that that figure was augmented by. The net reservation rate was poor at 0.51. Nobody is writing home about that. But that figure was augmented by our first partnerships completions.

Speaker #1: We can only affect what we can affect, but there’s— I will talk to you about that this morning. There’s a bit to get through, so please bear with me, but I think it’s worth sharing with the market and with the changes we’ve made; it’s worth sharing that with you.

Speaker #1: So I'll try and take it at some pace, but bear with me. So, I characterize the outturn as a robust performance against a challenging backdrop, and that was underpinned by good performance from Gleeson Homes, selling 10% more homes than the previous year.

Speaker #1: Pleased that that figure was augmented by—the net reservation rate was poor at 0.51, you know, nobody's writing home about that. But that figure was augmented by our first partnerships completions, and of course, that's a journey we began about two, two and a half years ago.

Graham Prothero: Of course, that is a journey we began about 2 and a half years ago. So great work by the team to actually get those first scores chalked on the board. We will be looking to build on that. We did have some bulk sales as well, about 300 units. That was at an average discount of just under 16%, which is actually not bad. Nobody likes being forced into bulk sales. But I think the relatively low numbers that we are looking to put in that market and also the work that Scott and the team put in to get after that early so that we are doing our business through the year in smaller quantities rather than getting caught in the period end carnage and some of the egregious discounts that we read about. Site openings, bit disappointing, still constrained by slow planning. I will talk about that.

Speaker #1: So, great work by the team to actually get those first scores chalked on the board, and we will be looking to build on that.

Speaker #1: We also did have some bulk sales as well—about 300 units. That was at an average discount of just under 16%, which is actually not bad.

Speaker #1: Nobody likes being forced into bulk sales. But I think the relatively low numbers that we're looking to put into that market, and also the work that Scott and the team put in to get after that early, so that we're doing our business through the year in smaller quantities, rather than getting caught in the period-end carnage and some of the egregious discounts that we read about.

Speaker #1: Site openings have been a bit disappointing—still constrained by slow planning; I will talk about that. But as I said, we have completed that operational restructure, and I'll give you some detail on that.

Graham Prothero: But as I said, we have completed that operational restructure, and I will give you some detail on that. Gleeson Land's year was really. The number was really defined by that continuing the slippage of the single large sale that we have talked to you about. I will update you on that this morning. There were 2 other smaller sales which we had hoped to complete in June, and they really ran into the developer caution that we are all well aware of that you are reading about in all the majors' statements. But happily, both of those sales are expected to proceed in the current year, one to the same buyer, and one to a different buyer. But all is not lost in that market. We have, as you know, a strong business. We have a great portfolio, and when we are taking our high-quality sites to market, we are still seeing good interest.

Speaker #1: Gleeson Land’s year was really—the number was really defined by that continuing slippage of the single large sale that we’ve talked to you about.

Speaker #1: I'll update you on that this morning. There were two other smaller sales which we'd hoped to complete in June, and they really ran into the developer caution that we're all well aware of, that you're reading about in all the majors' statements.

Speaker #1: But happily, both of those sales are expected to proceed in the current year: one to the same buyer, and one to a different buyer.

Speaker #1: But all is not lost in that market. We have—as you know—a strong business. We have a great portfolio, and when we're taking our high-quality sites to market, we are still seeing good interest.

Speaker #1: So, very happy that we strengthened our pipeline even further with some 13 new promotion agreements and submitting 18 planning applications when we were there.

Graham Prothero: So very happy that we strengthened our pipeline even further with some 30 new promotion agreements, and submitting 18 planning applications while he was there. That is, as I say, strengthening the pipeline, which we are very pleased with. And pleased that we also maintained our strong balance sheet with negligible net debt at the period end and continuing low land creditors. It really was a year of intense business improvement activity in Gleeson Homes. It has been hard work. And I do want to recognize upfront the response and the support we have had from the team. They have shown real resilience. They have embraced that change. And happily, in the people survey that we completed just in the last few weeks, our engagement score, which was already strong last year, actually improved over the year and improved against the benchmark. So that is a real tribute to the team.

Speaker #1: Which was—so that's, as I say, strengthening the pipeline, which we're very pleased with, and pleased that we also maintained our strong balance sheet, with negligible net debt at the period end and continuing low land creditors.

Speaker #1: It really was a year of intense business improvement activity in Gleeson Homes. It's been hard work, and I do want to recognize up front the response and the support we've had from the team.

Speaker #1: They've shown real resilience. They've embraced that change. And happily, in the people survey that we completed just in the last few weeks, our engagement score—which was already strong last year—actually improved over the year and improved against the benchmark.

Speaker #1: So that's a real tribute to the team, and a strong thank you from me to the team and to the leaders that have led them through that.

Graham Prothero: A strong thank you from me to the team and to the leaders that have led them through that. So very pleased with that. But we have absolutely restructured Gleeson Homes. We have massively strengthened our leadership team. We have changed process. We have significantly reformed our land buying process. We have rationalized the portfolio. And I will give you some detail on all of that. Very pleased that we successfully completed the transition to the new, or new for us, NHBC, HBF customer scoring system. You shouldn't underestimate the achievement that was for the team, particularly against the rest of the change we were bringing through. It is very different. The quality of the product is still good, but it is a very different way of collecting the data and a lot of different things for the team to concentrate on.

Speaker #1: So, very pleased with that. But we've absolutely restructured Gleeson Homes. We've massively strengthened our leadership team. We've changed processes. We've significantly reformed our land buying—our land buying process.

Speaker #1: We've rationalized the portfolio, and I'll give you some detail on all of that. Very pleased that we successfully completed the transition to our – new for us – NHBC, HBF customer scoring system.

Speaker #1: You shouldn't underestimate the achievement that was for the team, particularly against the rest of the change we were bringing through. It is very different—the quality of the product is still good, but it's a very different way of collecting the data and a lot of different things for the team to concentrate on.

Speaker #1: So we were—I think in calendar '25, which is our first year under that system—we achieved what I would class as a satisfactory four-star outcome.

Graham Prothero: So we were, I think in calendar 2025, which was our first year under that system, we achieved what I would class as a satisfactory four-star outcome. And that is quite an achievement with that transition. Obviously, what we want to be, what we need to be is five star. We are not settling for anything less. In the current year, which is calendar FY26, we are currently trading at five star, but of course, there are a lot of surveys to pass under the bridge before that is closed out. We have grasped the nettle on legacy site adoptions. I will give you a little bit of detail on that. And now looking forward, having with transform complete, we are looking at how we know we can continue to improve, and we are proactively looking at our market engagement, product brand, et cetera, and I will talk to you a little bit about that.

Speaker #1: And that is quite an achievement with that transition. Obviously, what we want to be—what we need to be—is five-star; we're not settling for anything less.

Speaker #1: In the current year, which is calendar FY26, we are currently trading at 5-star. But of course, there are a lot of surveys to pass under the bridge before that's closed out.

Speaker #1: We've grasped the nettle on legacy site adoptions. I'll give you a little bit of detail on that. And now, looking forward, with Transform complete, we are looking at how—we know there we can continue to improve.

Speaker #1: And we're proactively looking at our market engagement, product, brand, etc., and I'll talk to you a little bit about that. We're also looking to build on the success of our partnerships, which is particularly timely given the government's recent commitment—re-commitment—to that mode of delivery.

Graham Prothero: We are also looking to build on our success in partnerships, which is particularly timely given the government's recent recommitment to that mode of delivery. How are we seeing that market in Gleeson Homes? Subdued? It definitely is. I have picked out three reasons here. Rightmove tell us continually and have been telling us for many months now that the total available properties for sale in the UK and England remains very high, an 11 or 12 year high, and that is clearly absorbing a lot of the demand. Mortgage rates are increasing and likely to go higher, and the cost of living challenge is rearing their head again.

Speaker #1: So how are we seeing that market in Gleeson Homes? Subdued, it definitely is. I've picked out three reasons here. I mean, Rightmove tell us continually, and have been telling us for many months now, that the total available properties for sale in the UK and England remains very high—an 11- or 12-year high.

Speaker #1: And that is clearly absorbing a lot of the demand. Mortgage rates are increasing and likely to go higher. And the cost of living challenge is rearing its head again.

Speaker #1: We're already seeing it in fuel and energy, and it's widely expected that we're going to get some sort of spike in food inflation. That's a particular worry for Gleeson customers at the lower end of the income band, as you've heard me say before.

Graham Prothero: We are already seeing it in fuel and energy, and widely expected that we are going to get some sort of spike in food inflation, and that is a particular worry for Gleeson customers at the lower end of the income band, as you have heard me say before. The bulk market is active, but pricing, as I have alluded to, is very keen. Partnership opportunities, we are seeing them. It is a competitive marketplace, but we were really pleased to see the recent announcement of the strategic partner funding, and the phone has started to ring off the back of that. Excited for what we can achieve there. Selling price inflation, it is anemic. We got a bit last year. Currently, Stefan has done a bit of an exercise, so it is a low sample size, but we currently think we are running at about 1% annualized, which is very poor.

Speaker #1: The bulk market is active, but pricing, as I've alluded to, is very keen and partnership opportunities— we are seeing them. It's a competitive marketplace, but we were really pleased to see the recent announcement of the strategic partner funding, and we have— the phone has started to ring off the back of that.

Speaker #1: So excited for what we can achieve there. Selling price inflation—I mean, it is anemic. We got a bit last year. Currently, Stefan's done a bit of an exercise, so it's a low sample size, but we'd currently think we're running at about 1% annualized, which is, you know, very poor.

Speaker #1: Obviously, the bigger story is around incentives. Happily, incentives still average just below 5% last year, so we are keeping that fairly tight. In fact, Scott and I found ourselves in the place of kicking them and saying, "Push the incentives a bit harder." It's a balance, but as I say, we achieved what we achieved at sub-5% incentives.

Graham Prothero: Obviously, the bigger story is around incentives. Happily, incentives still average just below 5% last year. So we are keeping that fairly tight. In fact, Scott and I find ourselves in the place of kicking and saying, "Push the incentives a bit harder." It is a balance. But as I say, we achieved what we achieved at sub 5% incentives. Build cost inflation continues to go forward. We saw about 4.5% over the year. It is currently running, we think, at about 3% to 4%. Because the market is weak, we are able to resist the more aggressive requests for 7%, 8%, 9% increases, but there is a residual level of, say, we think about 3% to 4% below which we will not be able to resist. And so, sadly difficult for us to rebuild margins into that environment. Current trading. Well, it is on the slide, really poor. August was very weak.

Speaker #1: Build cost inflation continues to move forward. We saw about 4.5% over the year. It's currently running—we think—at about 3 to 4%. Because the market is weak, we're able to resist the more aggressive requests for 7%, 8%, 9% increases.

Speaker #1: But there's a residual level—let's say we think about 3% to 4%—below which we won't be able to resist. And so, sadly, you know, it's difficult for us to rebuild margins in that environment.

Speaker #1: Current trading—well, it's on the slide. Really poor. August was very weak. So, 0.44 in the 9 weeks to last weekend. We've seen a bit of a tentative pickup.

Graham Prothero: So 0.44 in the 9 weeks to last weekend. We have seen a bit of a tentative pickup. You would expect that once people come back from their holidays. The last couple of weeks have been better than that 0.44. We do need it to be better again. And who knows how well that holds as we run into increasing mortgage interest rates and now the looming budget. At that point, I am going to hand you over to Stefan to run through the numbers, and then I will come back and talk about the good things we have been up to in Homes and Land. Stefan.

Speaker #1: You'd expect that, since people come back from their holidays. So, the last couple of weeks have been better than that 0.44. We do need it to be better again.

Speaker #1: And, you know, who knows how well that holds as we run into—as increasing mortgage interest rates and now the looming budget. But so at that point, I'm going to hand you over to Stefan to run through the numbers, and then I'll come back and talk about the good things we've been up to in Homes and Land.

Speaker #1: Stefan.

Speaker #2: Okay. Thank you, Graham. And as Graham said, for the year to June 26, it was a robust performance by the group. We grew revenue by 12.1% to £410 million.

Stefan Allanson: Okay, thank you, Graham. As Graham said, the year to June 2026, it was a robust performance by the group. We grew revenue by 12.1% to GBP 410 million. But we did deliver lower group operating profit, and that was principally due to 2 things. The significant site delays in Gleeson Land, with one particularly large site sale, and margin compression in Gleeson Homes. I will take you through the divisional performance on the next few slides just to highlight a couple of group items here. Group overheads reduced by GBP 0.5 million. That was due to tight cost controls, lower remuneration, and the unwind of a legacy construction provision. And interest costs increased by GBP 1.7 million to GBP 5.2 million, and that was due to higher average borrowings, so higher interest costs on those borrowings. And also higher discounting charges under IFRS 9 for long-term payables.

Speaker #2: But we did deliver lower group operating profit, and that was due principally to two things. So, there were significant site delays in Gleeson Land, with one particularly large site sale.

Speaker #2: And margin compression in Gleeson Homes. I'll take you through the divisional performance on the next few slides, just to highlight a couple of group items here.

Speaker #2: Group overheads reduced by half a million pounds. That was due to tight cost controls, lower remuneration, and the unwind of a legacy construction provision.

Speaker #2: Interest costs increased by £1.7 million to £5.2 million, and that was due to higher average borrowings—so higher interest costs on those borrowings.

Speaker #2: And also higher discounting charges under IFRS 9 for long-term payables. As a result, group adjusted PBT reduced to £10.8 million and adjusted earnings per share were 14.1 pence.

Stefan Allanson: As a result, group adjusted PBT reduced to GBP 10.8 million, and adjusted earnings per share were 14.1 pence. Turning to the divisional results. Gleeson Homes volumes increased by almost 10% to 1,968 homes, and that was driven by the 320 homes that we sold to partners, our first full year of partnership delivery. That represented about 16% of total volume. We increased the number of homes that we sold to multi-unit buyers. That was 301 homes, about 15% of full-year volume. Selling prices were up 3.8%, and that was driven by 3.0% increase in underlying selling prices. A stronger house type and regional mix with a higher average number of beds, and that was partly offset by the impact of the lower prices that you get from selling to multi-unit buyers. Incentives remained high. They were about 4.8% of open market selling prices.

Speaker #2: So, turning to the divisional results, Gleeson Homes volumes increased by almost 10% to 1,968 homes. That was driven by the 320 homes that we sold to partners—our first full year of partnership delivery.

Speaker #2: That represented about 16% of total volume. And we increased the number of homes that we sold to multi-unit buyers. That was 301 homes, about 15% of full-year volume.

Speaker #2: Selling prices were up 3.8%, and that was driven by about a 3.0% increase in underlying selling prices, a stronger house type and regional mix, with a higher average number of beds.

Speaker #2: And that was partly offset by the impact of the lower prices that you get from selling to multi-unit buyers. Now, incentives remained high; they were about 4.8% of open market selling prices.

Speaker #2: And including two land sales during the year, Gleeson Homes— Gleeson Homes totaling 4.4 million pounds— Gleeson Homes revenue was up almost 15% to 400 million pounds.

Stefan Allanson: Including two land sales during the year, Gleeson Homes totaling GBP 4.4 million. Gleeson Homes revenue was up almost 15% to GBP 400 million. Gross profit increased by 3.3% to GBP 74.5 million, but the margin benefit from higher volume and higher selling prices was significantly mitigated by those lower gross margins. On other income, you will notice there we introduced our own part exchange program in the second half of the year, and that has been very successful. We were break-even, and that helped deliver 58 additional sales during the year. We continue to improve overhead efficiency, and whilst costs increased by GBP 4.5 million, which was a 9% increase, that compares to a 15% increase in turnover. Those cost increases, that was driven by pay increases, the full-year impact of higher national insurance rates, increased IT spend, and higher recruitment costs.

Speaker #2: Now, gross profit increased by 3.3% to £74.5 million. But the benefit from higher volume and higher selling prices was significantly mitigated by those lower gross margins.

Speaker #2: On other income, you'll notice that we introduced our own part exchange program in the second half of the year, and that's been very successful.

Speaker #2: We were break even. And that helped deliver 58 additional sales during the year. Now, we continue to improve overhead efficiency. And whilst cost increased by 4.5 million pounds, which was a 9% increase compared— that compares to a 15% increase in turnover.

Speaker #2: Those cost increases—that was driven by pay increases—the impact of the full-year impact of higher National Insurance rates, increased IT spend, and higher recruitment costs.

Speaker #2: The percentage of revenue that fell to overhead costs decreased by 80 basis points to 13.6%. Operating margins were 140 basis points lower at 5.0%.

Stefan Allanson: As a percentage of revenue, overhead costs fell by 80 basis points to 13.6%. Operating margins were 140 basis points lower at 5.0%, and really that was driven by three things. Significant build cost inflation, which was running at 4.5%, exceeded underlying selling price increases on reservations during the year to 2.2%. The increase in multi-unit sales, which chipped away at margin. We were able to mitigate about a third of that impact through overhead efficiencies. Just touching on the exceptional items. We recognized GBP 13.6 million worth of exceptional items in the year, and those are listed out in the appendices, but just to set them out briefly here. GBP 2 million comes from the cash costs from the restructuring activities during the year. In particular, restructuring of Greater Manchester, Merseyside region, and the East Yorkshire region.

Speaker #2: And really, that was driven by three things: significant build cost inflation, which is running at 4.5%, exceeded underlying selling price increases on reservations during the year, which were 2.2%.

Speaker #2: And the increase in multi-unit sales, which chipped away at margin. Now, we were able to mitigate about a third of that impact through overhead efficiencies.

Speaker #2: Now, just touching on the exceptional items. We recognized £13.6 million worth of exceptional items in the year, and those are listed out in the appendices.

Speaker #2: But just to set them out briefly here, £2 million comes from the cash costs from the restructuring activities during the year, in particular, restructuring of the Greater Manchester Merseyside region and the East Yorkshire region.

Speaker #2: 4.5 million non-cash impairment from the impairment of 12 conditionally purchased sites and one owned site. That we haven't developed. We won't develop. We will be selling, but we expect to sell at a loss to the purchase cost.

Stefan Allanson: GBP 4.5 million non-cash impairment from the impairment of 12 conditionally purchased sites and one own site that we have not developed, we will not develop. We will be selling, but we expect to sell at a loss to the purchase cost. Then GBP 7.1 million, which is a provision we booked for the legacy site adoption costs that we expect to incur over the next three to four years. That is on 81 legacy sites. Those legacy sites date back, some of them, 10 years. Looking at the forward order book. Despite a weaker market, we maintained our forward order book. In fact, it was up three plots. Open market orders were flat, exactly the same as last year at 402 forward orders.

Speaker #2: And then £7.1 million, which is a provision we booked for the legacy site adoption costs that we expect to incur over the next three to four years.

Speaker #2: And that's on 81 legacy sites, and those legacy sites date back—some of them—10 years. So, looking at the forward order book: despite a weaker market, we maintained our forward order book.

Speaker #2: In fact, it was up three plots. Open market orders were flat, exactly the same as last year, at 402 forward orders. The eight additional partnership agreements we signed during the year increased our forward order book at the end of the year.

Stefan Allanson: The eight additional partnership agreements we signed during the year increased our forward order book at the end of the year, and that offset a reduced multi-unit forward order book. Turning to Gleeson Land, the division recorded five site sales during the year. As we said, three sales were delayed to this year. One of those particularly material. Those five site sales generated GBP 4.8 million of gross profit. We booked additional provisions against the portfolio of GBP 1.4 million, meaning that we reported GBP 3.4 million of gross profit for the year. Overheads were in line with last year's overheads at GBP 4.1 million. As a result, that division reported a loss for the year of GBP 700,000. Looking at the balance sheet, inventories increased by GBP 35.4 million year on year. That was largely driven by three items.

Speaker #2: And that offset a reduced multi-unit forward order book. Now, turning to Gleeson Land, the division recorded five site sales during the year, as we said. Three sales were delayed to this year—one of those particularly material.

Speaker #2: The business generated—those five site sales generated £4.8 million of gross profit. And we booked additional provisions against the portfolio of £1.4 million—meaning that we reported £3.4 million of gross profit.

Speaker #2: For the year, overheads were in line with last year's overheads at £4.1 million. As a result, that division reported a loss for the year of £700,000.

Speaker #2: Now, looking at the balance sheet, inventories increased by £35.4 million year on year. That was largely driven by three items. So, build WIP in Gleeson Homes was £18.8 million higher due to build cost inflation and some significant infrastructure investment on some large sites.

Stefan Allanson: Build WIP in Gleeson Homes was GBP 18.8 million higher due to build cost inflation and some significant infrastructure investment on some large sites. We have GBP 7.1 million of part exchange assets on the balance sheet within the limit that we internally had set ourselves. That is 46 properties that we own, and that contributed to completions, particularly in June of the year. We are quite confident that those, like in the first half, that those will continue to be sold at profits that mean that our part exchange activity remains breakeven. Gleeson Land inventories increased by GBP 8.3 million, and that reflects the cost of securing those 13 additional promotion agreements during the year. Significant spend on planning applications. We had a very strong year in submitting planning applications.

Speaker #2: We have £7.1 million of part-exchange assets on the balance sheet, within the limit that we internally had set ourselves. That's 46 properties that we own.

Speaker #2: And that contributed to completions—particularly in June of the year—and we're quite confident that those, like the—in the first half—that those will continue to be sold at profits that mean that our part exchange activity remains break even.

Speaker #2: And Gleeson Land inventories increased by £8.3 million, and that reflects the cost of securing those 13 additional promotion agreements during the year. Significant spend on planning applications.

Speaker #2: We had a very strong year in submitting planning applications, but also the lower charge to cost of sales for the site sales that didn't happen during the year—the ones that were delayed.

Stefan Allanson: Also the lower charge to cost of sales for the site sales that did not happen during the year, the ones that were delayed. Land creditors remain low at GBP 15.5 million. Other liabilities increased by GBP 36.7 million. There are a number of reasons for that. GBP 7.1 million legacy site adoptions provision being one of them. We did have higher accruals at GBP 11 million. Trade payables were GBP 17 million higher, reflecting the timing of payments, and in particular, very busy June build activity. With net assets of approximately GBP 300 million, and net borrowings of only GBP 2.6 million and low land creditors, we continue to focus on the strength of our balance sheet. Forgive me, I think I skipped a slide a little prematurely there. Just on cash flow, the group generated GBP 16.9 million of operating cash flow. That was entirely driven in Gleeson Homes.

Speaker #2: Land creditors remain low at £15.5 million, and other liabilities increased by £36.7 million. There are a number of reasons for that, with a £7.1 million legacy site adoptions provision being one of them.

Speaker #2: We did have higher accruals, about £11 million. Trade payables were £17 million higher, reflecting the timing of payments and, in particular, a very busy June build activity.

Speaker #2: Now, with net assets of approximately £300 million, and net borrowings of only £2.6 million and low land creditors, we continue to focus on the strength of our balance sheet.

Speaker #2: Forgive me, I think I skipped a slide a little prematurely there. Just on cash flow, the group generated £16.9 million of operating cash flow.

Speaker #2: That was entirely driven in Gleeson Homes. £22 million of operating cash flow in Gleeson Homes, offsetting a small outflow in Gleeson Land, essentially driven by the delay to those land sales.

Stefan Allanson: GBP 22 million of operating cash flow in Gleeson Homes, offsetting a small outflow in Gleeson Land, essentially driven by the delay to those land sales and the cash flows on group overhead costs. Cash interest increased by GBP 1.1 million. That reflects the higher borrowings and a higher interest cost. CapEx was GBP 2.3 million higher. That reflects quite low spend in the previous two years. Also a step up in investment and show homes, sales arenas, compounds, and equipment on site. To the dividend, we are proposing a final dividend of one pence per share. That is reduced on last year's final dividend.

Speaker #2: And the cash flows on group overhead costs. Cash interest increased by £1.1 million. That reflects the higher borrowings and the higher interest cost. And capex was £2.3 million higher.

Speaker #2: That reflects quite low spend in the previous two years, but also a step up in investments in show homes, sales arenas, compounds, and equipment on site.

Speaker #2: Now, to the dividend. We are proposing a final dividend of 1 pence per share. That is reduced on last year's final dividend. That brings to 5 pence the total dividend for the year.

Stefan Allanson: That brings to 5p the total dividend for the year, which the board believes is prudent in this less certain market environment and is consistent with our determination to maintain a strong balance sheet, and is also more in line with our dividend cover policy, which is that earnings will cover dividends by between 3 times and 5 times. A 5p total dividend for the year will be covered 2.8 times. So close. Thank you very much and I shall hand you back to Graham.

Speaker #2: which the Board believes is prudent in this less certain market environment, and is consistent with our determination to maintain a strong balance sheet. It is also more in line with our dividend cover policy, which is that earnings will cover dividends by between three times and five times.

Speaker #2: A 5p total dividend for the year will be covered 2.8 times. So close. Thank you very much. And I shall hand you back to Graham.

Graham Prothero: Thanks, Stefan. Operations and strategy. Looking first at Gleeson Homes then and a couple of minutes on Project Transform. We have done a huge amount of work on this. We significantly strengthened the leadership in the team. As you know, Scott joined us as divisional chair on 1 July last year. Scott is now responsible for running the whole of the Gleeson Homes business. As you are aware, we have restructured into 4 principal operating regions. We have 3 new regional managing directors supporting Scott. So 2 of those are experienced external hires, one is an internal promotion. And we have made multiple experienced recruitments at regional divisional director level. It really is a strengthened team. And this is really about moving away from that overly centralized, overly dependent structure that we had in the group before that really is not effective for a volume home builder.

Speaker #2: Thanks, Stefan. Okay, operations and strategy. Looking first at Gleeson Homes, then a couple of minutes on Project Transform. We have done a huge amount of work on this.

Speaker #2: We've significantly strengthened the leadership in the team. As you know, Scott joined us as Divisional Chair on the 1st of July last year. Scott is now responsible for running the whole of the Gleeson Homes business.

Speaker #2: As you're aware, we've restructured into four principal operating regions. We have three new regional managing directors supporting Scott—two of those are experienced external hires, and one is an internal promotion.

Speaker #2: And we've made multiple experienced recruitments at the regional and divisional director level. It really is a strengthened team. And this is really about moving away from that overly centralized, overly dependent structure that we had in the group before.

Speaker #2: That really isn't effective at— for a volume home builder. So what we've done then is to empower our regions so that those guys are very much owners of their— owners of their budgets, owners of their profit and loss account.

Graham Prothero: What we have done then is to empower our regions so that those guys are very much owners of their budgets, owners of their profit and loss account. They have the ability to make decisions, to be entrepreneurial in their local environment. Quite clearly remaining very short reporting line to Scott, who is very close with all of them. And they are working to very clear targets, KPIs, and regular reporting, et cetera. We also reinvigorated but clarified the role of our group central functions, which are absolutely vital. So we have slightly reduced the center, but as I say, reinvigorated it. And the role of those guys, they are functional leaders, and their role is providing expertise and setting the standards by which our regions operate and that is how we maintain control, that is how we maintain quality. So significantly improving the integration between center and the regions. We have completely reformed our land buying.

Speaker #2: They have the ability to make decisions, to be entrepreneurial in their local environment. Quite clearly, they have a very short reporting line to Scott, who's very close with all of them.

Speaker #2: And they're working to very clear targets, KPIs, and regular reporting, etc. We've also reinvigorated but clarified the role of our group central functions, which are absolutely vital.

Speaker #2: So we've slightly reduced the center, but as I say, reinvigorated it. And the role of those guys—they're functional leaders. Their role is providing expertise and setting the standards by which our regions operate.

Speaker #2: And that's how we maintain control; that's how we maintain quality—so, significantly improving the integration between the center and the regions. We've completely reformed our land buying.

Speaker #2: So we've moved land buying away from a centrally controlled operation and embedded that in the regions. And the critical thing there is that the regional management teams—you're getting full buy-in to every bid at bid stage.

Graham Prothero: We have moved land buying away from a centrally controlled operation and embedded that in the regions. And the critical thing there is that the regional management teams, you are getting full buy-in to every bid at bid stage. Before, as I say, it was too centrally directed. We have also, importantly refocused our land buyers onto more chimney pot areas, as we call them, more densely populated areas, suburban areas, reversing that trend, that drift that the group had seen, I think, over the past 5 or 6 years into buying, frankly, in too many rural and coastal locations. So we have definitely sharpened that focus. We have also strengthened the process around our land buying. So we said that we have been much more specific on our requirements on the appraisal, on layouts, on planning the actual development itself, and on planning our completion and exit.

Speaker #2: Before— as I say, it was too centrally directed. We've also refocused— importantly refocused— our land buyers onto areas of more chimney pot areas, as we call them, more densely populated areas, suburban areas.

Speaker #2: Reversing that trend, that drift that we'd—that the group had seen, I think, over the past five or six years into buying—frankly, too many rural and coastal—too many rural and coastal locations.

Speaker #2: So we've definitely sharpened that focus. We've also strengthened the process around our land buying, so we're set— we've been much more specific on our requirements: on the appraisal, on layouts, on planning the actual development itself, and on planning our completion and exit.

Speaker #2: And that's all about really sharpening the technical control of the land bidding and buying process. And that's aimed at mitigating that kind of disappointing situation whereby you commit to the site at one margin.

Graham Prothero: That is all about really sharpening the technical control of the land bidding and buying process. That is aimed at mitigating that kind of disappointing situation whereby you commit to the site at one margin. By the time you are bringing it to commencement budget, the margin has dropped, and then it drops again through development. That is just not a way for the business to prosper. I am very pleased with what we have achieved in land buying. As you are aware, we have rationalized the regions, as I mentioned, into 4 principal regions. We have taken the opportunity to rationalize the land portfolio as well. We are walking away from about 13 sites in the northwest and on the east coast of Yorkshire that just no longer fit with our criteria or our hurdle rates. So a huge amount of work, and that really is a very short summary of what we have done.

Speaker #2: By the time you're bringing it to commencement budget, the margins drop, and then they drop again through development. And that's just not something that we can— that's not a way for the business to prosper.

Speaker #2: So, very pleased with what we've achieved in land buying. We've also taken—as you're aware, we've rationalized the regions, as I mentioned, into four principal regions.

Speaker #2: We've taken the opportunity to rationalize the land portfolio as well. So we're walking away from about 13 sites in the Northwest and on the East Coast of Yorkshire that just no longer fit with our criteria or our hurdle rates.

Speaker #2: So, a huge amount of work—and that really is a very short summary of what we've done. I'm convinced that the business is in much better shape than it was when I stood here 12 months ago.

Graham Prothero: I am convinced that the business is in much better shape than it was when I stood here 12 months ago. I am excited for how we can take that forward. That is really expediting that process that I have talked to you about before of changing Gleeson from an overly large small business into a well-controlled and efficient volume house builder. Legacy sites. I talked to you briefly about this before, but this is basically an issue that frankly should have been dealt with before. We are looking at something like 80 sites completed variously over the last 10 years. One or 2 even older than that in parts of the country we do not even work in. These are sites where we have not secured the adoption. Why? Because in most cases, they require some sort of rectification. The most common example is actually where we have installed gravel drives.

Speaker #2: And I'm convinced—I'm excited for how we can take that forward. And it really—that is really expediting that process that I've talked to you about before, of changing Gleeson from an overly large small business into a well-controlled and efficient volume housebuilder.

Speaker #2: Legacy sites. So, I talked to you briefly about this before, but this is basically an issue that, frankly, should have been dealt with before.

Speaker #2: We're looking at something like 80 sites completed variously over the last 10 years—some, one or two, even older than that—in parts of the country we don't even work in.

Speaker #2: These are sites where we haven't secured the adoption. Why? Because, in most cases, they require some sort of rectification. I'll give you the most common example, which is actually where we've installed gravel drives.

Speaker #2: Actually, in line with our planning permission and meeting with regulations, but the highways engineers don't like them. Why? Because the gravel spills onto the road.

Graham Prothero: Actually in line with our planning permission and meeting with regulations, but the highways engineers do not like them. Why? Because the gravel spills onto the road. That means the road gets more damaged. It has to be maintained more, costs them more. The highways engineer looks at you and says, "I cannot adopt that. It is not to standard." We could have the fight. We have been advised it is not worth it. We need to get on, get these roads into a state where they can be adopted. It is interesting, actually, just last week, the HBF has brought out our latest sort of protest on behalf of the industry, which is around the transparency and objectivity and the time taken to get roads adopted. I thought that is very timely, but I cannot whinge about it. We have got to get on and deal with it.

Speaker #2: That means the road gets more damaged. It has to be maintained more; costs and more. So the highways engineer looks at you and says, "I can't adopt that."

Speaker #2: It's not to standard. We could have the fight. We've been advised it's not worth it. We need to get on, get these roads into a state where they can be adopted.

Speaker #2: It's interesting—actually, just last week, the HBF brought out our latest sort of protest on behalf of the industry, which is around the transparency, objectivity, and the time taken to get roads adopted.

Speaker #2: And I thought, that's very timely. But we haven't— I can't whinge about it. We've got to get on and deal with it. I'm not going to make the 'we can't kick the gravel down the road' joke.

Graham Prothero: I am not going to make the we cannot kick the gravel down the road joke. It is going to take us 3 or 4 years. We have hired kind of best guy in the business, really, an adoptions engineer to lead a small team. It will take us 3 or 4 years to deal with that. During the year, we were operating from an average of 67 build sites and 56 sales outlets. As we have said, both of those will be slightly lower this year. Our prospective site numbers are frustratingly lower than I would like, and that is for 3 reasons. One, the continuing challenge of slow planning. It is the same story. The government, I think, is absolutely doing the right things at national policy level, but that is not feeding through for various reasons. That is not feeding through to pace and reliability of decisions at local level.

Speaker #2: And so that's going to— it's going to take us three or four years. We've hired kind of the best guy in the business, really—an adoptions engineer—to lead a small team.

Speaker #2: It'll take us three or four years to deal with that. During the year, we were operating from an average of 67 build sites and 56 sales outlets.

Speaker #2: As we've said, both of those will be slightly, though, lower this year. Our prospective site numbers are frustratingly lower than I would like, and that's for three reasons.

Speaker #2: One, the continuing challenge of slow planning. So this— and it's the same story. The government, I think, is absolutely doing the right things at the national policy level, but that is not feeding through for various reasons.

Speaker #2: That is not feeding through to pace and reliability of decisions at the local level, so planning is very much still an issue. In addition, we've rationalized the portfolio, as I say.

Graham Prothero: Planning, very much still an issue. In addition, we have rationalized the portfolio. As I say, we have taken the proactive decision to walk away from a number of sites that no longer fit our criteria. The third thing is that I suppose like others, I think very sensibly, we are managing our balance sheet. This is a market where it pays us to be cautious. We absolutely want to protect the integrity of the balance sheet. So we are upping our risk aversion, if you like, in the appraisals we are bringing through. That is not to say we have stopped buying land. I have just talked to you about what we have done with that process, and we are still very much in the market, but we are being more cautious in the approach we are taking.

Speaker #2: We have taken the proactive decision to walk away from a number of sites that no longer fit our criteria. And the third thing is that, I suppose, like others, and very— I think very sensibly—we're managing our balance sheet.

Speaker #2: This is a market where it pays us to be cautious. We absolutely want to protect the integrity of the balance sheet, so we're upping our risk aversion, if you like, in the appraisals we're bringing through.

Speaker #2: That's not to say we've stopped buying land. I've just talked to you about what we've done with that process, and we are still very much in the market, but we're being more cautious in the approach we're taking.

Speaker #2: And so, combining those three reasons—those three reasons—our site opening profile is going to be slower than I would like, certainly this year, and almost certainly into FY28.

Graham Prothero: Combining those three reasons, our site opening profile is going to be slower than I would like certainly this year and almost certainly into FY28. So it is a difficult market, but we are absolutely convinced that there are things that we can do better, and it is vital that both in a weak market now and into any upturn, we are the best that we can be. So we have got the people and process fixed. I was talking to you, I spoke about that just now, and I kind of see that as fixing the factory. What we are getting after now is the way we engage with the market, so our product, and our customer experience. We absolutely want to build on the success of our partnership strategy, and I will talk about that in a moment.

Speaker #2: So it is a difficult market, but we're absolutely convinced that there are things we can do better. And it's vital that, both in a weak market now and into any upturn, we're the best that we can be.

Speaker #2: So with the— we've got the people and process fixed I was talking to you about. I spoke about that just now. And I kind of see that as fixing the factory.

Speaker #2: What we're getting after now is the way we engage with the market—so, our product and our customer experience. We're going to—we absolutely want to build on the success of our partnership strategy.

Speaker #2: And I'll talk about that in a moment. I've talked about refocusing our land buying to make sure we're getting the right sites. And now we're looking proactively and at pace at our product.

Graham Prothero: I have talked about refocusing our land buying to make sure we are getting the right sites. Now we are looking proactively and at pace at our product, at our customer experience, and at our brand and brand perception. We are trying to be absolutely rigorous, absolutely objective, and make this data back. So we have got handpicked teams from around the organization looking at each of those, each of those teams led by a member of the ELT. We are actually using an AI data scrape of every piece of customer feedback that we have had because if you aggregate that, we will pick up the themes and we will pick up some good ideas, I am absolutely convinced. We are also commissioning focus groups from our website users, both those who have gone on and bought a Gleeson home and those who have not, so that we are getting the best information that we can to combine with our own expertise.

Speaker #2: On our customer experience, and on our brand and brand perception, we're trying to be absolutely rigorous, absolutely objective, and make this data-backed.

Speaker #2: So, we've got handpicked teams from around the organization looking at each of those. Each of those teams is led by a member of the ELT.

Speaker #2: We're actually using an AI data scrape of every piece of customer feedback that we've had, because if you aggregate that, we'll pick up the themes and we'll pick up some good ideas.

Speaker #2: I'm absolutely convinced. And we're also commissioning focus groups from our website users, both those who've gone on and bought a Gleeson home and those who haven't, so that we're getting the best information that we can to combine with our own expertise, Scott, and the team.

Graham Prothero: Scott and the team, as I say, that strengthening has brought in a lot of experience as well from elsewhere. On product, we want to make absolutely sure that we are delivering the product that our customers want, our open market customers. We have also taken the decision to design a specific partnerships range. We are working on that right now. That should be available to us in the second half. That is avoiding that compromise because partners do have certain slightly different requirements for the units. They are looking for a long-term rental product, and it is always a compromise if you are trying to use the same units for the open market. So no, we will have a separate range, effectively making it easier for partners to select Gleeson to work with.

Speaker #2: We've, as I say, that's strengthening us—brought in a lot of experience as well from elsewhere. And so, on product, we just want to make absolutely sure that we're delivering the product that our customers want—our open market customers.

Speaker #2: We've also taken the decision to design a specific partnerships range, and so that—and I think that's—we're working on that right now. That should be available to us in the second half.

Speaker #2: And that's avoiding that compromise because partners do have certain slightly different requirements for the units. They're looking for a long-term rental product, and it's always a compromise if you're trying to use the same units for the open market.

Speaker #2: So, no, we'll have a separate range, effectively making it easier for partners to select Gleeson to work with. On the customer experience, we're looking at that right through from marketing, through the customer journey, through sale, and also looking at the way that we're providing after-sales service.

Graham Prothero: On the customer experience, we are looking at that right through from marketing, through the customer journey, through sale, and also looking at the way that we are providing after-sale service. We know that we can improve in all of those areas. Quite exciting to see those ideas coming through. On brand, we know what it is, you know what it is that we do. We build a high-quality product that is affordable to customers at the lower end of the income spectrum. We listen, we get feedback, we bump into people in the market. We do not think people are very clear on that, particularly that point that we build a high-quality product. It is really important that all of our stakeholders understand what it is Gleeson does today. That includes the market, so land agents, for instance, recruiters, prospective partners. It includes our own people.

Speaker #2: And we know that we can improve in all of those areas, so it's quite exciting to see those ideas coming through. And on brand, we know what it is.

Speaker #2: You know what it is that we do. We build a high-quality product that's affordable to customers at the lower end of the income spectrum. But we get—we list and we get feedback.

Speaker #2: We bump into people in the market. We don't think people are very clear on that—particularly the point that we build a high-quality product.

Speaker #2: And so it's really important that all of our stakeholders understand what it is we—Gleeson does today, and that includes the market. So land agents, for instance, recruiters, prospective partners—it includes our own people.

Speaker #2: That's absolutely, absolutely vital. And of course, critically, it includes our customers. It's vital that we're listening to what the market's telling us and that we're led by the customers we serve.

Graham Prothero: That is absolutely vital, and of course, critically, it includes our customers. It is vital that we are listening to what the market is telling us and that we are led by the customers we serve. Yes, it is a difficult market, but there are absolutely things we know we can do to improve our performance, and we are working hard at that. Just to touch on partnerships, as I say, really pleasing to see those first units, first completions coming through. For me, the pleasing thing, we have established our credibility in the partnership space now. Just pausing on that is not a gimme, that is not a no-brainer.

Speaker #2: So yes, it is a difficult market, but there are absolutely things we know we can do to improve our performance, and we're working hard at that.

Speaker #2: Just to touch on partnerships, I say really pleasing to see those first units at first completions coming through. For me, the pleasing thing— we've established our credibility in the partnership space now.

Speaker #2: And just pausing on that, that's not a gimme. That's not a no-brainer. If you put yourself in the shoes, it's not just a question of turning up at the conference and putting up your stand and saying, "Come and sign here for deals." If you put yourself in the shoes of the investor, he's got quite a bit of due diligence to do on a new firm offering themselves as a development partner.

Graham Prothero: If you put yourself in the shoe, it is not just a question of turning up at the conference and putting up your stand and saying, "Come and sign here for deals." If you put yourselves in the shoes of the investor, he has got quite a bit of due diligence to do on a new firm offering themselves as a development partner. Who are these guys? What is the quality of their product? How will it stand up as a long-term rental product? Can they actually build at the pace and to the quality that I need? Will they do what they say? Do I trust them? All of that is, you have to build that. We accept that.

Speaker #2: Who are these guys? What's the quality of their product? How will it stand up as a long-term rental product? Can they actually build at the pace and to the quality that I need?

Speaker #2: Will they do what they say? Do I trust them? All of that is— you have to build that. We accept that. And so I'm really pleased with those first completions.

Graham Prothero: I am really pleased that with those first completions and the feedback that we are receiving from our partners, I think we have established our credibility, and certainly, that seems to be how it is playing for us. The market appetite is certainly continuing. It was great to hear Matthew Pennycook at the conference in Liverpool last week absolutely endorsing that this mode of delivery is and will continue to be important for the UK home building market. As I say, very much encouraged by the announcements under the SAHP last week. What we need to do now, what we are focused on, if you like, within, is to evolve to the next generation of partnership deals. Coming back to that establishing your credibility, they might get to the point where they will take the units from you, but will they trust you with the cash up front?

Speaker #2: And the feedback that we're receiving from our partners—I think we've established our credibility. And certainly, that seems to be how it's playing for us.

Speaker #2: The market appetite is certainly continuing. It was great to hear Matthew Pennycook at the conference in Liverpool last week, absolutely endorsing that this mode of delivery is and will continue to be important for the UK homebuilding market.

Speaker #2: As I say, very much encouraged by the announcements under the SAHP last week. So what we need to do now—what we're focused on, if you like—is to evolve to the next generation of partnership deals.

Speaker #2: So, coming back to that—establishing your credibility—they might get to the point where they'll take their units from you. But will they trust you with cash upfront?

Speaker #2: Well, you need to prove a little bit more before they'll do that. So, the first deals that we did, effectively, yes, you're sacrificing a bit of margin, but the benefit—and the only benefit we were getting—was diversifying our market risk.

Graham Prothero: Well, you need to prove a little bit more before they will do that. The first deals that we did, effectively, yes, you are sacrificing a bit of margin, but the benefit and the only benefit we were getting was the diversifying our market risk. So it was a forward sale. You are certain that those 40 units are going to go to that partner, tick. But they are paying for them when you deliver them. We have now evolved that model, so within that 320 units was our first 60 odd under the golden brick model. That is better because that is when you are getting started to get paid during the construction period, so that you are then getting the benefit not just of the forward sale, but now it is starting to improve your return because you are getting paid sooner.

Speaker #2: So it was a forward sale. You're certain that those 40 units are going to go to that partner tick. But they're paying them for you when you're paying for them when you deliver them.

Speaker #2: We've now evolved that model, so within that 320 units was our first 60-odd under the Golden Brick model. Now, that's better, because that's when you're starting to get paid during the construction period.

Speaker #2: So, you're then getting the benefit not just of the forward sale, but now it's starting to improve your return because you're getting paid sooner.

Speaker #2: The next evolution, where we're really mature, is when we increase the proportion of forward funding. So, we start to work with partner cash at the implementation of infrastructure.

Graham Prothero: The next evolution where we are really mature is when we increase the proportion of forward funding. So we start to work with partner cash at the implementation of infrastructure. And you can immediately see that starts to really sing from a return perspective. And of course, the absolute maturity is when they will join you at the land acquisition point. So pleased to see those are the kinds of conversations we are now having and the real opportunity for us. And you can tell, I think we are excited about the progress that we have made in that area. So turning to Gleeson Land then. I will start with the market headwinds. No secrets here, but probably two elements that I would bring out. So planning is a constant story, is not it? There is always something slightly different.

Speaker #2: And you can immediately see that that starts to really sing from a returns perspective. And, of course, the absolute maturity is when they'll join you at the land acquisition point.

Speaker #2: So pleased to sit—those are the kinds of conversations we're now having, and a real opportunity for us. And you can tell, I think we're excited about the progress that we've made in that area.

Speaker #2: So, turning to Gleeson Land, then. I'll start with the market headwinds—no secrets here, but probably two elements that I would bring out. So, planning—planning is a constant story, isn't it?

Speaker #2: There's always something slightly different. So, following the specific point that I'm referring to here—following the local elections—obviously, the biggest shift was away from Labour control.

Graham Prothero: Following the specific that I am referring to here, following the local elections, obviously the biggest shift was away from labor control. So a number of authorities where it either moved away from labor completely or it has moved to no overall control. What that does is creates a fracture between national policy and the local implementation of that policy. The committee less willing to embrace because you have now reopened that sort of democratic competition of I can win votes by resisting a national planning policy. So, not moving the local plan through at pace or, and trying to resist the NPPF direction on the numbers or for instance, resisting grey belt, et cetera. So the effect of that is that where we had previously hoped that we might get a committee decision, now there is a good chance that it will be filibustered. We will not get the local decision.

Speaker #2: So, a number of authorities where Labour—where it’s either moved away from Labour completely, or it’s moved to no overall control. What that does is create a fracture between national policy and the local implementation of that policy.

Speaker #2: They're no longer—the committee less willing to embrace, because you've now reopened that sort of democratic competition of, "I can win votes by resisting national planning policy."

Speaker #2: So not moving the local plan through at pace and trying to resist the NPPF direction on the numbers, or, for instance, resisting grey belt, et cetera, et cetera, et cetera.

Speaker #2: So the effect of that is that we're— is that, where we had previously hoped that we might get a committee decision, now there's a good chance that it'll be filibustered.

Speaker #2: We won't get the local decision. What do we have to— it doesn't mean we can't get it, because in the end, nine times out of ten, national policy will prevail. But it means you've got to go to appeal.

Graham Prothero: What do we have to— It does not mean we cannot get it because in the end, nine times out of 10, national policy will prevail, but it means you have got to go to appeal. It takes longer, and it is more expensive. So that is the planning drag that I am referring to. The developer caution, I have mentioned it already. You are all well aware of that. All of the majors are referring to it, and that is restricting appetite for some bids. I do not want to give you the impression that the market is dead. It is absolutely not. As you know, we have a high-quality portfolio, and when we put those sites out to the market, we are still getting good interest, and we are seeing bids. The pricing is definitely moderated a bit. The technical due diligence process is being elongated, always will in a buyer's market.

Speaker #2: It takes longer and it's more expensive. So that's the planning, too. The developer caution—I’ve mentioned it already, you're all well aware of that.

Speaker #2: All of the majors are referring to it, and that is restricting appetite for some bids. I don't want to give you the impression that the market's dead.

Speaker #2: It's absolutely not. As you know, we have a high-quality portfolio, and when we put those sites out to the market, we're still getting good interest.

Speaker #2: And we are seeing bids. The pricing is definitely moderated a bit. The technical due diligence process is being elongated, as it always will in a buyer's market.

Speaker #2: We're seeing a lot of bids that are conditional on registered provider partner participation. And that's all to do with the hiatus in the Section 106 market.

Graham Prothero: We are seeing a lot of bids conditional on registered provider partner participation, and that is all to do with the hiatus in the Section 106 market, and obviously people asking for deferred payment terms. What is the impact on Gleeson Land? Well, I have said not if, but when, and that really is that we are still seeing the demand. Predicting the actual timing of completions is difficult. To touch on FY26, the biggest single impact was the deferral of the large deal, which I have talked about in just one minute on that. We are, you should not see this as, well, it is a big standoff and the local authority just do not want this. That is not the situation we are in. We are working very closely with the prospective buyer of the site and actually alongside the local authority and their advisors.

Speaker #2: And, obviously, people are asking for deferred payment terms. So, what's the impact on Gleeson Land? Well, I've said not if, but when. And that really means that we are still seeing the demand, but predicting the actual timing of completions is difficult.

Speaker #2: Just to touch on FY26, obviously the biggest single impact was the deferral of the large deal, which I've talked about, and I'll just spend one minute on that.

Speaker #2: So we are— you shouldn't see this as— well, it's a big standoff. And the local authorities just don't want this. That's not the situation we're in.

Speaker #2: We are working very closely with the prospective buyer of the site, and actually alongside the local authority and their advisors. But it is a massively complex technical resolution that we need. The number of sort of open items gets ever smaller.

Graham Prothero: It is a massively complex technical resolution that we need. The number of open items gets ever smaller. I think I have said to you before, it is a bit like when your phone updates and that bar goes across and you think, "Blimey, it must be finished now." Well, it is a bit like that with this technical consent. We fully expect, I am looking at Guy, that we will get that technical consent this calendar year, and that should trigger the, well, that does trigger the terms in the option. You remember we sold an option to the buyer of the site in June 2025. They have got about six to eight weeks post that technical resolution to exercise that option. I am hopeful that we will, let us say, get that technical resolution before the year end.

Speaker #2: I think I've said to you before, it's a bit like when your phone updates and that bar goes across and you think, blimey, it must be finished now.

Speaker #2: Well, it's a bit like that with this technical consent. We fully expect—I'm looking at Guy—that we will get that technical consent this calendar year.

Speaker #2: And that should trigger the— well, that does trigger the terms in the option. You remember we sold an option to the buyer of the site in June '25.

Speaker #2: They've got about six to eight weeks post that technical resolution to exercise that option. So I'm hopeful that we will, let's say, get that technical resolution before the year-end.

Speaker #2: I've certainly learned more about roads, signs, drains, and what-have-you than I ever imagined I would need to learn about. So, as I've said, both planning and transactions are taking longer.

Graham Prothero: I have certainly learned more about roads, signs, drains, and what have you, than I ever imagined I would need to learn about. As I have said, both planning and transactions are taking longer. What that does, it makes the effect for us sitting here scratching our heads is it makes calling the timing of completions even more difficult than normal in that business. It is just the way it is. As I stand here this morning, we have got over nine months of the year still to go. We do this regularly. We have been through every site. No reason to say to you, we are not going to make our numbers in Gleeson Land. We are standing by the numbers that you have, but it has to come with a heavy note of caution.

Speaker #2: And what that does—it makes the effect for us, sitting here scratching our heads, is it makes the timing, calling the timing of completions, even more difficult than normal in that business.

Speaker #2: It's just the way—it’s just the way it is. So, as I stand here this morning, we've got over nine months of the year still to go.

Speaker #2: We've been— we do this regularly. We've been through every site. No reason to say to you we're not going to make our numbers in Gleeson land.

Speaker #2: So we're standing by the numbers that you have, but it has to come with that heavy note of caution, given that, as I say, there is very much still a market.

Graham Prothero: Given that, as I say, there is very much still a market, and having said what I have said about planning, the National Planning Policy Framework remains favorable. They have done the right things, and so we are working very hard to take advantage of that. Steam coming out of the planning team, and they did really well. That is a record number of applications. It is a small team. That was a hell of a lot of work to get those 18 applications in. We have got 24 sites currently awaiting a decision. As I say, all towards strengthening that portfolio. To the same point, we were delighted to exchange some 15 new promotion agreements in the year. Two of those are conditional. To stress, that absolutely does not come from relaxing our standards.

Speaker #2: And having said what I've said about planning, the National Planning Policy Framework remains favourable. They have done the right things, and so we are working very hard to take advantage of that.

Speaker #2: Steam coming out of the planning team, and they've got—they did really well. That's a record number of applications. It's a small team. That was a hell of a lot of work to get those 18 applications in.

Speaker #2: We've got 24 sites currently awaiting a decision, all aimed at strengthening that portfolio. And to the same point, we were delighted to exchange some 15 new promotion agreements in the year; two of those are conditional.

Speaker #2: And so—and just to stress, that absolutely does not come from relaxing our standards—in fact, in this market, we're probably pushing up our risk aversion, as you would expect.

Graham Prothero: In fact, in this market, we're probably pushing up our risk aversion, as you would expect. This comes from the effectiveness of the local team, the local structure that Guy put in place that really has upped our game. Also backed by our fantastic market leading data research and analysis team, which really does strengthen the bid and also strengthens our ability to get the planning permission as well in front of the local authority. We're not relaxing our standards. We're still only bidding kind of. We're rejecting 95% of the sites that we see, that we're shown. They go straight in the bin. Because of the quality of the team and the data research, we are winning about a third of the bids that we actually make. We're really pleased to see that portfolio strengthening.

Speaker #2: But this comes from the effectiveness of the local team, the local structure that Guy's put in place, that really has upped our game.

Speaker #2: And also backed by our fantastic, market-leading data research and analysis team, which really does strengthen the bid and also strengthens our ability to get the planning permission as well in front of the local authority.

Speaker #2: So not relaxing our standards. We're still only bidding, kind of—we're rejecting 95% of the sites that we see, that we're shown. They go straight in the bin.

Speaker #2: But because of the quality of the team and the data research, we are winning about a third of the bids that we actually make.

Speaker #2: So, really pleased to see that portfolio strengthening. So, in terms of characterising, we are absolutely confident for the medium-term future of the Gleeson Land business—just have to put caution on there for what you're expecting in each six-month period, as we always do.

Graham Prothero: In terms of characterizing, we are absolutely confident for the medium term future of the Gleeson Land business. We just have to put caution on there what you're expecting in each six-month period as we always do. So summary and outlook. We delivered a robust performance in the year. Project Transform has overhauled Gleeson Homes into a much improved business. We've got a dual focus now on managing the business as efficiently as we can in anticipation of that continuing subdued market. We're pursuing a number of strategic initiatives to enhance our own performance, and so far as we can, mitigate that margin attrition. Gleeson Land continues to face a more cautious land market, so the timing of land sales lacks the visibility we'd hoped for.

Speaker #2: So, summary and outlook: we delivered a robust performance in the year. Project Transform has overhauled Gleeson Homes into a much improved business. We have a dual focus now on managing the business as efficiently as we can, in anticipation of that continuing subdued market.

Speaker #2: But we're pursuing a number of strategic initiatives to enhance our own performance and, so far as we can, mitigate that marginal attrition. Gleeson Land continues to face a more cautious land market.

Speaker #2: So, the timing of land sales lacks the visibility we'd hoped for, but the quality of the portfolio continues to attract strong interest. The Board, therefore, expects to deliver an overall result in FY27 in line with current market expectations.

Graham Prothero: The quality of the portfolio continues to attract strong interest, and the board therefore expects to deliver an overall result in FY27 in line with current market expectations. I'll read you the quote because I think it's fair. "Following a year of intense activity implementing fundamental business change, we now have a homes business that's operationally much stronger and a land business well-placed to meet the needs of developers for high-quality consented sites. With the focused and disciplined approach we're now taking, we're confident for the future prospects of the group." Thank you for bearing with me on that, and we'll now be pleased to take your questions. Go ahead.

Speaker #2: I'll read you the quote because I think it's fair: "Following a year of intense activity, implementing fundamental business change, we now have a Homes business that's operationally much stronger."

Speaker #2: And a land business well placed to meet the needs of developers for high-quality consented sites, with a focused and disciplined approach. We're now taking— we're confident for the future prospects of the group.

Speaker #2: Thank you for bearing with me on that. We'll now be pleased to take your questions. Good morning. Yeah, Greg from C&C Capital Markets.

[Analyst] (Cenkos Capital Markets): Good morning. Greg from Cenkos Capital Markets. A few from me, please. Firstly, on the land rationalization, obviously, you've moved away from 13 sites in the northwest and Yorkshire. Did you also do a wider land review in the other divisions? If not, is that likely to be extended this year?

Greg Poulton: Good morning. Greg from Cenkos Capital Markets. A few from me, please. Firstly, on the land rationalization, obviously, you've moved away from 13 sites in the northwest and Yorkshire. Did you also do a wider land review in the other divisions? If not, is that likely to be extended this year?

Speaker #2: A few for me, please. Firstly, on the land rationalisation—obviously, you've moved away from 13 sites in the north-western Yorkshire. Did you also do a wider land review in the other divisions?

Speaker #2: Or, if not, is that likely to be extended this year?

Speaker #1: No. So we will, in any year, we'll always— we keep an eye on every site, every month. So I think the total was about 25, about 25.

Graham Prothero: No. So in any year, we keep an eye on every site every month. So I think the total was about 25. So 13 specifically in those two regions. To your question, we probably have walked away from more this year, a few more this year than we normally would, and that is as a consequence of the shifting into regional control and Scott's had an opportunity to give it a good comb.

Speaker #1: But so 13 specifically in those two regions. We probably have— to your question, we probably have walked away from more this year, a few more this year than we normally would.

Speaker #1: And that's as a consequence of the shifting into regional control and Scott's having an opportunity to give it a good go.

Speaker #2: And then on land, could you just talk about concentration within the numbers for this year? Obviously, you had one large land transaction delayed last year.

[Analyst] (Cenkos Capital Markets): On land, could you just talk about concentration within the numbers for this year? Obviously, you had one large land transaction delayed last year. Are there any larger deals in the numbers for the rest of the year?

Greg Poulton: On land, could you just talk about concentration within the numbers for this year? Obviously, you had one large land transaction delayed last year. Are there any larger deals in the numbers for the rest of the year?

Speaker #2: Are there any larger deals in the numbers for the rest of the year?

Graham Prothero: There is one. It is not as large, but it is bigger than the average. So, Guy's gravy is always a bit lumpy.

Speaker #1: There is one. It's not as large, but it's bigger than the average. So, yeah, I mean, Guy's gravy is always a bit lumpy.

Speaker #1: But yeah.

[Analyst] (Cenkos Capital Markets): Lastly, just on partnerships. Obviously, you have made good progress last year on that strategy. Can you talk about access to funding from affordable housing providers and how that has improved? Linked to that, with the dedicated product that you are bringing to market, is the intention to utilize that product in dedicated partnership sites, or will it be utilized alongside your open market offering?

Speaker #2: And then lastly, just on partnerships, obviously you've made good progress last year on that strategy. Could you talk about access to funding from affordable housing providers and how that's improved?

Greg Poulton: Lastly, just on partnerships. Obviously, you have made good progress last year on that strategy. Can you talk about access to funding from affordable housing providers and how that has improved? Linked to that, with the dedicated product that you are bringing to market, is the intention to utilize that product in dedicated partnership sites, or will it be utilized alongside your open market offering?

Speaker #2: And then linked to that, with the dedicated product that you bring into the market, is the intention to utilise that product in dedicated partnership sites, or will it be utilised alongside your open market offering?

Speaker #1: Great questions. So, the access to funding—that's the $64,000, isn't it? I can't— and the answer is, they took ages to announce the funding, the £39 billion.

Graham Prothero: Great questions. The access to funding, that is the GBP 64,000, is not it? The answer is they took ages to announce the funding, the GBP 39 billion. Then they sat on that announcement, then they put out the statement sometime in the summer saying, "We just need people to push there. We cannot spend it too soon," all defense and what have you. Then last week, three weeks ago, they came out with the announcement of the strategic partner funding. I cannot say to you, and somebody asked me this earlier this morning, I cannot say that I have got a check that has come out of the GBP 39 billion. I cannot. But it was only three weeks ago. What I can say is that we are receiving much enhanced and live interest from a good number of prospective partners, both before the announcement and certainly since the announcement.

Speaker #1: Then they sat on that announcement. Then they put out the statement sometime in the summer saying, well, we just need people to push their— we can't spend it too soon.

Speaker #1: All defence and what have you. And then last week, three weeks ago, they came out with the announcements of the strategic partner funding. I can't say to you—and somebody asked me this earlier this morning—so I can't say that I've got a cheque that's come out of the £39 billion.

Speaker #1: I can't. But it was only three weeks ago, so what I can say is that we are receiving much enhanced and live interest from a good number of prospective partners.

Speaker #1: Since both before the announcement and certainly since the announcement. But it's too soon, because you simply couldn't agree a deal and get the cash flowing.

Graham Prothero: But it is too soon because you simply could not agree a deal and get the cash flowing. It is too soon to say, are they actually going to get the folding stuff in their pocket and start handing it over to us? I hope so. I think it would be very odd, very disingenuous to have that big announcement, but then still hold the funding back. But I cannot confirm it. That visibility will come over the next few months. On the partnerships range, the range of homes means that we can offer to partners homes that absolutely work for them. We do not have to modify, have the spec that they need. The slightly different aspect to your question is, will that be for dedicated partnership sites? In the main, no. We would not rule that out. As I have said to you before, every deal is quite specific.

Speaker #1: It's too soon to say. Are they actually going to get the folding stuff in their pocket and start handing it over to us? I hope so.

Speaker #1: I think it would be very odd, very disingenuous, to have that big announcement but then still hold the funding back. But I can't confirm it.

Speaker #1: That visibility will come over the next few months. And on the partnerships range, so we're looking—so the range of homes is to—means that we can offer them—offer to partners homes that absolutely work for them.

Speaker #1: We don't have to modify or have the spec that they need. The slightly different aspect to your question is, will that be for dedicated partnership sites in the main?

Speaker #1: No, we're not looking to do— we wouldn't rule that out. And as I've said to you before, every deal is— every deal is quite specific.

Speaker #1: So you might do that in a particular area. If you've got a cluster of sites, it might— and the partner says, do you know, I'd like all of that site.

Graham Prothero: You might do that in a particular area. If you have got a cluster of sites, and the partner says, "Do you know what? I would like all of that site," you might do that. We are not setting out to be partnership contractors, but it is all within the context of a relationship, if you see what I mean.

Speaker #1: You might do that. We're not setting out to be partnership contractors, but it's all within the context of a relationship, if you see what I mean.

Graham Prothero: Sam.

Speaker #2: Yeah. Morning, Sam, Kellan. Two from me as well, please. On your point about the evolution of the partnerships business and moving towards more of a forward-funded model in time, what's the gestation period of that?

Sam Cullen: Yeah, morning. Sam Cullen. Two from me as well, please. On your point about the evolution of the partnerships business and moving towards more of a forward-funded model in time, what is the gestation period of that? Is that a two, three-year story? Is that a five-year story?

Speaker #2: Is that a two- or three-year story? Is that a five-year story?

Graham Prothero: We are talking about it now, Sam, but I would be a fool to say to you, "Right, I am going to be announcing the first one by Christmas," but I might be, and that depends. There are a couple where on the existing sites, we have got people talking to us. Obviously, these conversations proceed over a number of months, and then they accelerate, and they slow down. We have some deals in prospect. I will be honest with you. In July, I said to Scott, "Are you going to have anything I can announce in September?" And he said, "Maybe." We have not. Will we by Christmas? Maybe. But there are deals being negotiated. Kind of goes to Greg's last question as well. But would I be disappointed if I was not sitting here next year with a couple to tell you about? I would be really disappointed.

Speaker #1: We're talking about it now, Sam. But I'd be a fool to say to you, right, I'm going to be announcing the first one by Christmas.

Speaker #1: But I might be, and that depends. So, there are a couple where, on existing sites, we've got people talking to us. Obviously, these conversations proceed over a number of months.

Speaker #1: And then they accelerate, and they slow down. So we have some deals in prospect. I'm not going to say to you— I mean, I'll be realist.

Speaker #1: I'll be honest with you. In July, I said to Scott, "Are you going to have anything I can announce in September?" And he said, "Maybe."

Speaker #1: We haven't. Will we by Christmas? Maybe. But there are deals being negotiated. Kind of goes to Greg's last question as well. But would I be disappointed if I wasn't sitting here next year with a couple to tell you about?

Speaker #1: I'd be really disappointed.

Speaker #2: Okay, thanks. The second one: given your decision to protect the balance sheet and slow down net new openings, do you think the other kind of partner in this relationship—meaning the government—is listening to what you're doing?

Sam Cullen: Okay, thanks. The second one is, given your decision to protect the balance sheet and slow down net new openings, do you think the other partner in this relationship is listening to what you are doing in terms of the government? Are they taking heed of what you are telling them?

Speaker #2: Are they taking heed of what you are telling them?

Speaker #1: Do you know, I'd really like to think so. I don't know whether you're pulling me onto the punch of a helter-skelter question there. I think that—so there's an onus on us to make the business the best that we can be.

Graham Prothero: Do you know, I would really like to think so. I do not know whether you are pulling me onto the pun of a help to buy question there. There is an onus on us to make the business the best that we can be, and we are absolutely on with that. The more specific request I would have of government would be stop adding your threepences and sixpences into the viability challenge, and by that, I am referring to Building Safety Levy. I am referring to the full implementation of Future Homes. Both of those, it is still in their gift to alleviate that pressure because you are just adding to viability pressures in an already viability-challenged market. So that would be a specific request. Whether or not they choose to put in place some form of buyer support is really a decision for them.

Speaker #1: And we are absolutely on board with that. The more specific request I would have of government would be: stop adding your sort of six months into the viability challenge.

Speaker #1: And by that, I am referring to the building safety levy. I am referring to the full implementation of Future Homes—both of those are still in their gift to alleviate that pressure.

Speaker #1: Because you're just adding to viability pressures in an already viability-challenged market. So that would be a specific request. Whether or not they choose to put in place some form of buyer support is really a decision for them.

Speaker #1: What we're focused on is what we can do, because we think we can improve our sales rate with the work that we're doing. I'm not going to manage to move a natural rate of 0.5 to 0.8 by polishing up my product.

Graham Prothero: What we are focused on is what we can do because we think we can improve our sales rate with the work that we are doing. I am not going to manage to move a natural rate of 0.5 to 0.8 by polishing up my product. I can certainly do better than I am.

Speaker #1: But I can certainly do better than I am.

Speaker #2: Thanks.

Sam Cullen: Thank you.

Speaker #1: Alice there.

Graham Prothero: Alasdair

Speaker #3: Thank you, Alice. Stewart, Progressive. I have a couple of questions—one on homes and one on land. On homes, you mentioned less activity in the coastal and country rural settings.

[Analyst] (Progressive): Thank you, Alistair. Stuart at Progressive. I have a couple of questions, one on homes and one on land. On homes, you mentioned less activity in the coastal and country rural settings, and more of a focus on urban. What is the thinking behind that? I presume on coastal and country, you have probably got higher selling prices, but lower densities of potential buyers, and those buyers are probably more discretionary, whereas it might be different for urban. That is question one. On the land business, you mentioned technical due diligence stretching out. Is that a delaying tactic or is it preempting reductions in pricing from the buyers?

Alastair Stewart: Thank you, Alistair. Stuart at Progressive. I have a couple of questions, one on homes and one on land. On homes, you mentioned less activity in the coastal and country rural settings, and more of a focus on urban. What is the thinking behind that? I presume on coastal and country, you have probably got higher selling prices, but lower densities of potential buyers, and those buyers are probably more discretionary, whereas it might be different for urban. That is question one. On the land business, you mentioned technical due diligence stretching out. Is that a delaying tactic or is it preempting reductions in pricing from the buyers?

Speaker #3: And more of a focus on urban. What's the thinking behind that? I presume in coastal and country, you've probably got higher selling prices, but lower densities of potential buyers.

Speaker #3: And those buyers are probably more discretionary, whereas it might be different for urban. So that's question one. And on the land business, you mentioned technical due diligence stretching out.

Speaker #3: Is that a delaying tactic, or is it preempting reductions in pricing from the buyers?

Speaker #1: Okay, so taking the first one then. I don't want you to see this as Gleeson Land, Gleeson Homes turning away from what it does.

Graham Prothero: Well, taking the first one then. I do not want you to see this as Gleeson Homes turning away from what it does. If you step back and look at the portfolio that effectively Scott inherited, there is absolutely a place for less densely populated areas. We have a good business in Cumbria. What had happened, for various reasons I would not bore you with, there had been a drift. We had too high a concentration of those sites which tend to sell slower, for all the reasons that you have set out. They are also just less densely populated, so just the churn in those markets is slower. We needed to rebalance to get back to some more chimney pot areas to have a good balance of faster selling sites. I am not being picky. We are not going urban. It is definitely suburban.

Speaker #1: But if you step back and look at the portfolio that, effectively, Scott inherited, we had—so there's absolutely a place for less densely populated areas.

Speaker #1: We have a good business in Cumbria. But what had happened, for various reasons—I won't bore you with them—there had been a drift. So we had two higher concentrations of those sites, which tend to sell slower, for all the reasons that you've set out.

Speaker #1: And yeah, and also they’re just less densely populated. So just the pace, the churn in those markets is slower. And we needed to rebalance, to get back to some more chimney-pot areas, to have a good balance of faster-selling sites.

Speaker #1: Can I just— I'm not being picky. We're not going urban; it is definitely suburban. And I make that point because Gleeson doesn't do city centre.

Graham Prothero: I make that point because Gleeson does not do city center, and we will not. There are definitely plenty of suburban areas where we need to rebuild our pipeline, and it is to get that right balance in the portfolio. On the technical due diligence, all I would say is you would expect there to be an absolute level of technical due diligence which every developer would do on every site they ever buy. The reality is it is a marketplace, and in a strong land market, you have to be quick and move, otherwise the guy has trampled over you and bought the site already.

Speaker #1: And we won't. But definitely, there are plenty of suburban areas where we need to rebuild our pipeline. And it's about getting that right balance in the portfolio.

Speaker #1: On the technical due diligence, well, all I would say is you would expect there to be an absolute level of technical due diligence, which every developer would do on every site they ever buy.

Speaker #1: But the reality is, it's a marketplace. And in a strong land market, you have to be damn quick and move, otherwise the guy has trampled over you and bought the site already.

Speaker #1: In a weaker market, you can afford to take your time. So you can afford to say to a guy, look, here's my bid, but I need six weeks to look through all of this lot.

Graham Prothero: In a weaker market, you can afford to take your time, so you can afford to say to a guy, "Look, here's my bid, but I need 6 weeks to look through all of this lot." Then in that 6 weeks, is he going to find something that's going to buy him another 3 months? Well, yeah, he will. That's the difference between a buyer's and a seller's market.

Speaker #1: And then in that six weeks, is he going to find something that's going to buy him another three months? Well, yeah, he will. And that's the difference between a buyer's and a seller's market.

Speaker #3: And specifically, in sites that have been stretched because of the due diligence, how is price going down, or are you standing your ground?

[Analyst] (Progressive): Specifically in sites that have been stretched because of the due diligence, have prices been going down or are you standing your ground?

Alastair Stewart: Specifically in sites that have been stretched because of the due diligence, have prices been going down or are you standing your ground?

Speaker #1: No, as I said, prices have come off a bit. But they've come off a bit because people are forecasting a more difficult sales market.

Graham Prothero: No. As I said, prices have come off of it, but they've come off of it because people are forecasting a more difficult sales market. They're not halving in value. They are taking the froth out of their own selling price inflation expectations, and they're looking at the same cost inflation that Gleeson Homes is. So you're not seeing the hope value in their onward selling price expectations, which all feeds back to a lower land value. But it's not capitulated. I don't want you to think of that. Think of, what are we saying, Guy? 5% to 10% sort of off the bids that we would be getting. But these are still good sites, so if you come in with a 20% discount, someone's going to beat you.

Speaker #1: But it's not—they're not halving in value. They're just—they are taking the froth out of their own inflation, selling price inflation expectations. And they're looking at the same cost inflation that Gleeson Homes is.

Speaker #1: So you're not getting people— you're not seeing the hope value in their selling onward selling price expectations, which all feeds back to— all feeds back to a lower land value.

Speaker #1: But it's not capitulated. I don't want you to think of that. Think of, what would we say, guys? Five to ten percent off the bids that we would be getting.

Speaker #1: But these are still good sites. So if you come in with a 20 percent discount, someone’s going to beat you.

Speaker #2: Thanks.

Speaker #1: Hey, Charlie.

Stefan Allanson: Hey, Charlie.

Graham Prothero: Hey, Charlie.

Speaker #2: I'm Charlie Kabel at Stifel. Two questions—both pretty quick, I think. So, your comments on sites: FY27 into FY28. You've said it sort of continues into FY28.

Stefan Allanson: Charlie Cubbitt, Stifel. Two questions. They are both pretty quick, I think. Your comments on sites, FY27 into FY28. You have said it continues into FY28. Does that mean they fall again, 2028 against 2027? Or they stay at that lower 2027 level in 2028? If you see what I mean. If you follow the question.

Charlie Campbell: Charlie Cubbitt, Stifel. Two questions. They are both pretty quick, I think. Your comments on sites, FY27 into FY28. You have said it continues into FY28. Does that mean they fall again, 2028 against 2027? Or they stay at that lower 2027 level in 2028? If you see what I mean. If you follow the question.

Speaker #2: So does that mean they get— they fall again, 28 against 27, or do they stay at that lower 27 level in 2028, if you see what I mean?

Speaker #2: If you follow the question.

Speaker #1: Well, Stefan, do you want to take that? I will caveat that we're still in the window. FY28 is not yet set in stone, so be gentle with us on making forecasts for '28.

Graham Prothero: Well, Stefan, do you want to take that? I will caveat.

Stefan Allanson: Yeah

Graham Prothero: We are still in the window. FY28 is not yet set in stone. Be gentle with us on making forecasts for 2028. But Stefan, do you want to.

Speaker #1: But, Stefan—yeah, yeah, yeah—Pat could have been clearer. It was intended to indicate that we expected to open the same number of sites as we closed.

Stefan Allanson: It is just understanding the wording, really.

Graham Prothero: Yeah.

Stefan Allanson: Yeah.

Graham Prothero: Yeah.

Stefan Allanson: Perhaps could've been clearer. It was intended to indicate that we expected to open the same number of sites as we closed, roughly, and therefore we would anticipate the average number of sites we're selling on in FY28 is the same as FY27. But as Graham says, that feels a long way away at the moment. But that's what we were intending to communicate.

Speaker #1: Roughly. And therefore, we would anticipate the average number of sites we’re selling on in FY28 is the same as FY27. But as Graham says, that feels a long way away at the moment.

Speaker #1: But that's what we're intending to communicate.

Speaker #2: And again, I mean, with the same caveat, I guess. Thinking about the percentage of bulk and partnership units at '27, '28, I think you're guiding us to the same sort of number.

Charlie Cubbitt: Again, with the same caveat, I guess, thinking about the percentage of bulk and partnership units at 2027, 2028. I think you're guiding us to the same sort of number. Partnerships is eventually 20, 16 now. It maybe drifts up a bit. Is that the right way of thinking about that?

Charlie Campbell: Again, with the same caveat, I guess, thinking about the percentage of bulk and partnership units at 2027, 2028. I think you're guiding us to the same sort of number. Partnerships is eventually 20, 16 now. It maybe drifts up a bit. Is that the right way of thinking about that?

Speaker #2: I mean, partnerships is eventually 20, 16 now, maybe drifts up a bit. Is that the right way of thinking about that?

Speaker #1: So on partnerships, I would very much hope so. On bulk, I'd very much hope not, but expect so, if that makes sense. Yeah, on bulk, nobody wants to do it.

Graham Prothero: On partnerships, I would very much hope so. On bulk, I very much hope not, but I expect so.

Stefan Allanson: Did that make sense? Yeah, bulk, nobody wants to do it. But yes, we are planning that there will be a level of bulk this year. And yes, similar. But partnerships, we are looking to push that harder.

Graham Prothero: Did that make sense? Yeah, bulk, nobody wants to do it. But yes, we are planning that there will be a level of bulk this year. And yes, similar. But partnerships, we are looking to push that harder.

Speaker #1: But yes, we are planning that there will be a level of bulk this year. And yes, similarly, with partnerships, we're looking to push that harder.

Speaker #2: Yeah. And sorry, one other question. In terms of mortgage rates, it looks as if mortgage rates have probably gone up again in the last month.

Charlie Cubbitt: Yeah. Sorry, one other question. In terms of mortgage rates, it looks as if mortgage rates probably have gone up again in the last month. What is the sort of sensitivity you are hearing from customers around mortgage rates at the moment? Just to try and, yeah, figure that out and think about the answer.

Charlie Campbell: Yeah. Sorry, one other question. In terms of mortgage rates, it looks as if mortgage rates probably have gone up again in the last month. What is the sort of sensitivity you are hearing from customers around mortgage rates at the moment? Just to try and, yeah, figure that out and think about the answer.

Speaker #2: What's the sort of sensitivity you're hearing from customers around mortgage rates at the moment? Just trying to figure that out and think about the answer.

Stefan Allanson: Yeah. I am glad you asked that question because it prompts me to remind everyone about the lack of a problem on affordability in the housing market in the North and Midlands, even at higher mortgage rates. The proportion of a first time buyer's take home pay that is spent on mortgage payments is the same now, today, at these current mortgage rates if you were to borrow today, as it has averaged over the last 40 years. There was no bubble in prices. There is no unaffordability problem. There is a confidence issue, and there are some challenges on deposits. Back to the question. Those slightly high mortgage rates at the moment, so in the appendices, you will see I always have a slide on what are the weekly mortgage payments compared to weekly rents, demonstrating that it is cheaper to buy than rent.

Speaker #1: Yeah, well, so I'm glad you asked that question because it prompts me to remind everyone about the lack of a problem on affordability in the housing market in the North and Midlands, even at higher mortgage rates.

Speaker #1: So, the proportion of a first-time buyer's take-home pay that is spent on mortgage payments is the same now, today, at these current mortgage rates.

Speaker #1: If you were to borrow today, as it is averaged over the last 40 years, there was no bubble in prices. There's no unaffordability problem.

Speaker #1: There's a confidence issue, and there are some challenges on deposits. Back to the question—so those slightly higher mortgage rates at the moment, I mean, they add... So in the appendices, you'll see I always have a slide on what are the weekly mortgage payments compared to weekly rents, demonstrating that it is cheaper to buy than rent.

Speaker #1: The impact, actually, is not that significant—about three pounds a week in terms of additional mortgage costs to the costs in here. In terms of what we're seeing in cancellations and the reasons for cancellations, it's a mixture.

Stefan Allanson: The impact actually is not that significant. It is about GBP 3 a week in terms of additional mortgage costs to the costs in here. In terms of what we are seeing in cancellations and the reasons for cancellations, it is a mixture. We are not really seeing mortgage costs or rate rises as an issue. Not yet. That may well come, but we are not really seeing that at the moment. All of that I absolutely agree with and endorse. What you have heard me say before, and my issue is less with the pounds per week that the mortgage. And it is absolutely right. It is the conversation in the pub that hurts us, and that right now that conversation is about mortgage rates have gone up and they are going up, and it is about food price inflation coming.

Speaker #1: We're not really seeing mortgage costs or rate rises as an issue—not yet. That may well come, but we're not really seeing that at the moment.

Speaker #1: All of that I absolutely agree with and endorse. You've heard me say that before. My issue is less with the pounds per week that the mortgage— and that's absolutely right.

Graham Prothero: All of that I absolutely agree with and endorse. What you have heard me say before, and my issue is less with the pounds per week that the mortgage. And it is absolutely right. It is the conversation in the pub that hurts us, and that right now that conversation is about mortgage rates have gone up and they are going up, and it is about food price inflation coming.

Speaker #1: It's the conversation in the pub that hurts us. And right now, that conversation is about mortgage rates—they've gone up, and they're going up.

Speaker #1: And it’s about food price inflation coming. So I think, at the moment, the mood out there in market land is weakening because of the conversation, even if what Stefan says is true.

Stefan Allanson: I think at the moment, the mood out there in market land is weakening because of the conversation, even if what Stefan says is true. Yeah, it is not what we are hearing, Scott, in the sales offices, is it? We got no one pulling out because of mortgage increases.

Graham Prothero: I think at the moment, the mood out there in market land is weakening because of the conversation, even if what Stefan says is true. Yeah, it is not what we are hearing, Scott, in the sales offices, is it? We got no one pulling out because of mortgage increases.

Speaker #1: But yeah, it's not what we're hearing, Scott, across the— in the sales offices, is it? We've got no one sort of pulling out because of mortgage increases.

Scott Robinson: The cancellation rates are pretty in line from where they have been previously. The slide that we showed was slightly less. We monitor cancellations every week in detail, and there is not so much noise about mortgage rates at the moment.

Scott Stothard: The cancellation rates are pretty in line from where they have been previously. The slide that we showed was slightly less. We monitor cancellations every week in detail, and there is not so much noise about mortgage rates at the moment.

Speaker #3: We monitor cancellations every week in detail, and there's not so much noise about mortgage rates.

Speaker #1: No.

Stefan Allanson: No.

Graham Prothero: No.

Scott Robinson: There is some noise, but it is pretty balanced I would say in terms of the reasons as to why people are canceling.

Scott Stothard: There is some noise, but it is pretty balanced I would say in terms of the reasons as to why people are canceling.

Speaker #3: There is some noise, but it's pretty balanced, I would say, in terms of the reasons as to why people are cancelling.

Speaker #1: Yeah. Yeah.

Stefan Allanson: Yeah. I do not think there are any more questions in the room. Tilly, do we have any questions online? No. Sam, I thought you were going to ask a question then. There would have been a row. Very good. Thank you very much for bearing with us. A lot of content there. Thanks for your time. Great to see you all. I hope we manage to deliver on all of this. Thank you.

Graham Prothero: Yeah. I do not think there are any more questions in the room. Tilly, do we have any questions online? No. Sam, I thought you were going to ask a question then. There would have been a row. Very good. Thank you very much for bearing with us. A lot of content there. Thanks for your time. Great to see you all. I hope we manage to deliver on all of this. Thank you.

Speaker #2: Carol, any?

Speaker #1: I don't think there are any more questions in the room. Tilly, do we have any questions online? Sam, I thought you were going to ask a question then.

Speaker #1: There’d have been a row. Very good. Thank you very much for bearing with us. There’s a lot of content there. Thanks for your time.

Speaker #1: Great to see you all. And yeah, I hope we managed to deliver on all of this. Thank you.

Speaker #3: Thank you.

Charlie Cubbitt: Cheers.

Stefan Allanson: Cheers.

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