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Hello and welcome to the Persimmon Trading Update Analyst Conference Call. [Operator Instructions] Just to remind you, this conference call is being recorded. Today, I am pleased to present David Jenkinson, Group CEO; and Mike Killoran, Group Finance Director. Gentlemen, please go ahead.
Good morning, everyone. We've got me here, Dave Jenkinson, and Mike. What I thought we'd do is open one of quick updates or a quick summary of 2 or 3 key points. And then as usual, we'll look to some questions and answers. The first thing I'd like to point out is that in the second half, we will be continuing to put customers before volume. However, we expect the Half 2 impact to be less than the 6% volume drop we experienced in Half 1. We're delighted with the progress we've made on our customer care improvement plan, especially when a number of elements are still in the process of taking effect or about to be implemented. We're delighted that for the first time since 2012 in the HBF quarterly review, we've achieved a 4-star rating, and we're currently trending well above the threshold for a 4-star rating. And we're also delighted that the business is producing fundamentally sound financial results, even though we've been able to improve our customer care performance. Now as usual, I do open for any questions that anybody may want.
[Operator Instructions] We have a first question from Arnaud Lehmann from Bank of America. Just a second. And I think Arnaud just left the call. I'm very sorry for this. We have a next caller from -- a question from Greg Hawkey (sic) [ Kuglitsch ] from UBS.
So a couple of questions, please. Just can you clarify on the volume point? I think in the statement you actually kind of say that -- maybe I misread it, that you expect a kind of similar decline in H2 in terms of volumes. But I think in your statement there, you were kind of saying maybe it's a bit less. So if you could just give us a little bit more comfort around how the volume delivery is shaping up in the second half. I guess, you're pretty much sold now. And then secondly, if you could just confirm to us that nothing has changed on the margins. I think the last message was a bit of a sequential decline, but maybe the average for the year kind of flat year-over-year or maybe down a little bit. That's kind of ballpark. And then the third question is a little bit more longer term, which is now that you've kind of cycled through the slowdown of the build release or sales release on -- and then the WIP build, you're clearly scoring 80% plus, I guess you're implying maybe quite comfortably ahead of 80%. Do you think you can set the business up to return to some volume growth next year? Or is it too early to call that? Obviously, assuming kind of similar market conditions.
Okay, Mike, if you want to do the first 2, and I'll answer the third one.
Okay. Yes, I mean the sales prognosis for this second half I think is still influenced by the focused measures we're taking on supporting improvement in delivery dates, quality and service that we're delivering to customers. But I think the impact will be a little lighter than we saw in the first half. So I think we'll see an increase of the first half being delivered in the second half, which we say in the statement. So the usual seasonal pattern, which is influenced by the better seasonal sales period in spring, which obviously influences the forward orders that we deliver through into the second half, given that we're on a calendar period, if you will, in terms of January to December. So I think the -- yes, a little bit down on the comparative for the second half, where we did from memory of around just between 8,300, 8,400 in the second half of last year. So we'll be a bit down on that, but we're not expecting to be down by 6%. So maybe, I don't know, 4%, 5% perhaps against the comparative, but obviously, ahead of what we've delivered in the first half. I think on the margin prognosis, as we said at the prelims, we're expecting a bit of drift on the margins. Obviously, the cost inflation is starting to become a little less challenging. We talked at the prelims about we're seeing increased visibility of available trades, particularly at the front end of development process in terms of groundworker skills and perhaps brick laying availability, and we continue to see that develop a bit more. So I think we're starting today looking 12 months ahead, perhaps our cost inflation prognosis is a little lighter than the sort of 3.5%, 4% we're talking about at the start of this year, and perhaps that would be maybe 2%, 3%, 12 months out. But obviously, there were some headwinds there in terms of obviously the exit from Europe impact on sterling to a degree and other influences that could materialize in pushing that cost inflation a little bit forward. So we need to watch how the market develops from here. But indeed, at the higher price points, we're seeing a bit of a more challenging market, a bit more incentivization. PX utilization for ourselves is pretty modest still. And maybe in the second half of last year, it was running around 10%. We may get maybe 11%, 12% support through the second half of this year by way of a comparative. So a little bit more incentivization, which obviously nibbles away at the margin a little bit. So nothing significant, but maybe a little bit of a drift in margins as we move forward, which we'll see for the second half this year and into next year, but nothing substantial. And just a point on the late sales release, so moving on to future sales prognosis. I think obviously sales outlets are important. Part of the measures that Dave has been leading in terms of more disciplined sales release has meant that there has been a reduction in our active outlet numbers. And you can see in the statement that we're up about 350 active outlets. In the first half of this year, we're actually up 345. So we're hoping that come the turn of the year, as those comparatives were[Audio Gap] we'll see a bit more strength in the outlet numbers on a like-for-like basis, if you will, because we'll be running against that 345 active outlet comparative come the first half of next year. So that should provide a bit more support to sales outturns, obviously depending on the overall market backdrop. David?
I just think in terms of margin, obviously, we're pretty confident in our gross margin, which is underpinned by our land bank, which has been well rehearsed before. But we are making further investments in the business in terms of IT, in terms of group support facilities, et cetera. The margin, we're pretty confident on gross number. We may have taken back a little bit. In terms of volume for full year 2020, obviously, and we're not going to give guidance. But what I would say that the market is very resilient. We've made a really good progress in restocking our shelves and if there were investments there, then we would see an opportunity for volume to take a look. But this isn't something that we're going to put before customers, our priority we focus customers before volume. However, if the market conditions are there, we believe we have the outlets and players and we'll continue to take advantage of that.
Our next question is from Jon Bell from Deutsche Bank.
Just one question really around -- that might have 2 parts, but around HBF star ratings, you'll be pleased to hear. Could you tell us -- this is the first part. Could you tell us the kind of current run rates, not the trailing quarterly rates, but what you're seeing from the very latest data in front of you? And then the second part of that question is in terms of the trends that you've seen as part of the improvement, what can you tell us Persimmon versus Charles Church, North versus South? Any granularity you can give us there?
I think the first thing is the star rating, what I can tell you is we believe we've got over 90% of our responses in now. And what I can tell you, as we've alluded to, is that we're currently trending well above the 80% threshold. And what I can tell you as well as the year's progress, that performance has improved quite comfortably, markedly. So we're very confident that we'll be a 4-star builder in this important year, and we're pleased with improvement we've seen specifically from January to year-to-date. The trend, as we've always said, the area where we've had the biggest problem with our star rating has been areas with the highest demand, which is why we took the view to hold back sites in those areas. And what we are seeing that's really, really worked well. So some of them are problem businesses that we've talked about before, we've seen marked improvement over the last 6, 7 months, which we're delighted with. And it gives me confidence that the strategy we've got is working. So I hope that answers the question, Jon, that I think we're pretty comfortable where we are.
Our next question is from Ami Galla from Citigroup.
Just a couple of questions from me. Firstly, if you could give us some regional color as to the strength that you're seeing across your regional businesses in terms of pricing and demand. And second, you've touched upon a bit more caution on the land market and that's driven the sort of spend that we've seen so far. My question is really around as we look forward to next year, is this the sort of level that we should be expecting going forward? And lastly, on the sort of deferral of sales releases. I mean could you talk about the sort of units that you are at an advanced build stage as we stand today, which could potentially come into sales release next year?
I'll deal with the first 2, if you want to deal with the advanced builds.
Yes.
Yes so in terms of regional color, I think it's been pretty consistent over the last 2 to 3 years. What we're seeing is Southeast has been a little bit more difficult. However, what we find is the real driving point is the product choice and this larger 4, 5 bed product is a bit more difficult. What we know is in our core market areas, even in the Southeast where we have the right product at the right price, the market has been incredibly resilient. So I don't think it's a regional issue. It's more of a product issue and product choice, which is driving demand. The second point you raised is the land market. We've got a very, very strong land market, land bank, which we're very proud about, and that gives us optionalities of when we go and buy land and when we do it. And what we've seen over the next -- last 6, 7 months, the land market has become more difficult. And as I've said previously, are more than comfortable for -- see land bank drift back to a more normal period, normal size. We are still seeing opportunities out there, and we still are acquiring land. We're not seeing as many opportunities as what we've seen maybe 2, 3 year ago, but we are seeing enough in our hurdle rate to make us comfortable what we've got. Looking into 2020, I think a lot will depend upon what happens to the land market. As I've said, if the opportunities are there and they make sense for the company to buy them, we'll buy them. If they're not there, then I'm happy to see the land market drift back, land bank drift back. Do you want to take the third one, Mike?
I will say the stock position, the work in progress position, I mean, I think as we said at prelims, we are keen to support the measures with respect to improving quality, delivery dates and service with greater investment in the work in progress. We are reminded by the improvements we've seen over recent months that, that is the key driver of improvement in these areas, and obviously, puts us in a good position in terms of availability to support future sales as well. So I think that we're -- as Dave's already touched on, we're still very keen to invest in work in progress. I think at the prelims, we were talking about our equivalent units of build being 19% ahead at that point year-on-year, and we want to continue to develop that. So I think we would hope to be in a slightly stronger position than that come December, and I think that, that means that perhaps some of the cash that is released because of a slightly lower land invested position that Dave just touched on will be reinvested within work in progress to the maybe tune of another, I don't know, GBP 30 million, GBP 40 million, GBP 50 million. It's hard to predict exactly, but that sort of level that we would expect come December. So the direction of travel is one of continuing to strengthen the platform moving into the spring season next year.
Our next question is from Aynsley Lammin from Canaccord.
This might have been asked actually but just on the land spend. Obviously, you mentioned you find it a bit more challenging to find opportunities. Does any of the kind of low land spend reflect a bit more caution just ahead of the election? Obviously, sales rates are holding up, but you're just feeling a little bit more cautious as you head into next year as to how kind of resilient the market remains. And then just on given the comments you just made about WIP and cash, I mean any extra guidance around net cash? I think roughly GBP 800 million, I think you'd kind of said you're okay with it. The half year, is that still looks like the case?
Aynsley, I think, just to jump in, I think that's about right still. I don't think it'd be pointing to a significantly different number on the cash side. And I think on the land spend, I think, yes, we are being a bit more cautious. Dave, if you...
I think we're being more cautious but we still come to fill, follow our rules in terms of what we require from a land deal, and that NIM rule effectively means there's 1 or 2 less opportunities around at the moment. What we are confident about is the land deals we are actually doing are the right deals. There may not be quite as many of them, but I've got that luxury to pick and choose to what's going to be spent in the land bank. So a lot will depend on what the market is like in 2020. If it has good and compelling land deals there, obviously, we'll buy them. If it's not the deals that meet my criteria, then we'll have to see the land bank drift back. It's as simple as that really.
Our next question is from Andy Murphy from Whitman Howard.
Dave, Mike, I've got a couple of questions, if I may, really around customer service. So could you just flesh out the investment of GBP 15 million that you're talking about? Can you perhaps tell us how far that's going to go, what incremental investment may be required next year? Or does it drop away if volumes drop away? And could you perhaps talk a little bit about the milestones that you're looking for? Because I know it's in the statement, you're saying that there's possibly some incremental investment. So just a little bit of color around the magnitude of that and whether that's going to be sort of just incremental cost that stays or whether it's a more of a got more of a temporary nature. I think I'll leave it there. Yes, those 2 questions please.
Yes. Andy. I'll take both. And I think the GBP 15 million is an annualized estimate of costs for investing in the customer care side and quality assurance in terms of site, additional [ site to provision ].And just to sort of provide a bit more color on that. I think prehandover measures are critically important, as we all know. And I think that we look to process and what we decided to do was put an additional layer of assurance into the prehandover process in terms of construction. And that's involved establishing a new independent quality built -- construction quality inspection team, whereby we're going -- or we have now almost fully recruited across the business one skilled and experienced inspector that will be eyes and ears -- additional eyes and ears on site, helping to train and manage process on-site in tandem with our existing site management teams. So part of the investment is going into that prehandover construction quality assurance process. And then similarly, as the other part is going into the posthandover customer support, maintenance, customer care service team, where we have invested in 4 to 5 additional heads within each of our 31 businesses to ensure that customers receive the level of service that we would want to deliver in terms of providing a better quality overall service level together with dealing with any snagging issues. And it's important to link this to the retention that we've introduced as well. The retention is fundamental to changing behaviors in our business. It's going to be very visible for us. So for example, a site manager that's trying to be helpful, hand on heart dealing with customer query, but perhaps is dealing with best intentions and what have you, then the retention is going to be very visible. He will be able to manage that.
I think the important point here is, Andy, we set out quite clearly our customer care improvement plan we have 3 moving parts: The first moving part is reduced volume; the second moving part will be an investment; and the third moving part met with. But that's just not -- it's more fluid than that. We believe improving customer care is not just about the quality of the house. We've invested in other things, for example, the retention. We believe it's very important that we empower our customers and improve customer rates. We're delighted we were able to reduce that in the 1st of July. That's empowered our customers. Another example, we believe it's very important that our customers have a right to modern technology when they move into a house. We believe -- and that is a fourth utility. We believe that when they are moving in that room, they should have access to full fiber. And we're delighted we've been able to introduce that as part of our customer care improvement. We're in the process of introducing a portal, for example, which means customers can go online not just up to the point of completion but after completion. So there's a lot of moving parts of our customer care improvement plan. And we're delighted with how that's been implemented and it's working, especially when somebody's only been [indiscernible] effect. Is that clear, Andy?
Yes. Just to clarify, the GBP 15 million, is that kind of a fully loaded cost? Because you're talking about investments. Is next year going to be 15-plus just inflation or plus another...
GBP 15 million is our best estimate of cost at this point for those measures.
Our next question is from Gavin Jago from Peel Hunt.
Just one from me. It's on the HBF ratings, again, I'm afraid. I think last month, Bellway were quite candid. So obviously they're kind of tracking to 5-star build, but said there's obviously a 9-month report which comes out on customers, and they were tracking at somewhere like 79%, and they're obviously looking to close that gap. It's obviously not just about how the customer feels in the first week, but obviously once they've been in the house for some time. Are you -- where are you in terms of that gap in terms of the 9-month survey? And how comfortable are you that you can close that gap to ultimately have be a 4 or 5-star builder, people moving into the house and obviously after a long period as well?
I think it's a fair point. And one of the things I've introduced and are in the process is looking at how we engage with our customers, not just after the HBF survey but after that. And what our portal will do is enable customers to contact us in the whole 2-year period. And we've actually been more positive about our points of contact with customers. I think it's a fair point herewith. Just like our peers, our rating for the 9-month period is less than what it is at the [ FB ] period. It's something we are focusing on, which is why we're introducing these extra contact points after the whole 2-year period.
We have a next question from John Fraser-Andrews from HSBC.
Two for me, please. The first is clear, Mike, on the GBP 15 million that, that's cap as additional investment in customer care. I didn't quite understand on the GBP 140 million WIP, is this a sunk cost and you mentioned it might increase? Or are you going to release some of this WIP as you get more confident and that will feed into volume growth? That's question one. Second question, in the regions, if I can just pick up on one of the previous questions. I hear what you say. You may not have had a chance to have heard about conference call this morning from a deal that was just announced in the sector. But the comment there was, and this is -- these are southern-orientated builders. The comment was there's been a bit of price weakness in the south, not a lot, but a bit, but also they're now tracking at lower build costs in current trading since the half year. So if you could share a bit more granularity on those measures in the south, please?
Well, I'll deal with the second point and Mike will deal with the first one. We've been consistent for some time in the South. A lot depends on what product you've got. Obviously, I don't know what my peers have been seeing. We -- what we are experiencing is if we've got the right product, which we place into the marketplace with where the gross demand is, the price have been incredibly resilient. If you've got larger 4, 5 bed product, which we had -- don't have a lot of, the independents are doing a lot more pressure price-wise. In terms of build costs, I think that we felt that price inflation eased. Whether it's actually coming backwards or not, I would tend to suggest maybe the cost may be higher at the starting point. But from what our starting point of our build cost, we believe that inflation, post-inflation is going to be a lot less than what it was last year. We think about 1.5%, 2%, maybe a bit more than that as a push about -- has more delta built costs starting to ease a bit, specifically around the labor element.
And is that regional, Dave, or...
It's across the world for me. Yes.
On the WIP side, John. I think, as we said earlier, we're not looking to release cash from WIP at this point. We would expect a bit of further absorption of cash into work in progress come December, maybe sort of GBP 30 million, GBP 40 million, GBP 50 million, around that sort of range.
And does that have potential to be released into next year?
Yes we hope to continue to support our customers with greater build. So I think a higher carried level of work in progress will be more of a permanent feature. If you look back at history, we've been sort of 30% to -- somewhere between 30%, 33% of sales on a look back at sales with respect to current WIP is where we would have been. I think since -- certainly in -- over the last sort of 3 to 4 years, we've been a bit thinner than that, and we have talked from time to time about not being able to get enough work in progress invested. And obviously, that's tied to the sales release approach that we've already touched on. So I think it will be more of a permanent feature in terms of carried investment in work in progress moving forward.
And the nice thing about that is we believe that we've got to protect this cash on the balance sheet, and we think that's the best investment to do that to improve our customer care. But the point is if the market was to turn, and obviously, that cash would come avail after volumes drop, I think the moving part on that would be volumes rather than just looking to reduce the WIP. I think that's a long-term commitment from the company. We want to be running 33% in the future.
We have a next question from Arnaud Lehmann from Bank of America.
Three questions, if I may. Firstly, I'm afraid another follow-up on the HBF rating. So you said you're trending at a solid 4-star. I would assume that's somewhere between a low 80s, mid-80s. Is that the end of the road for you? Once you get a full year 4-star rating, are you happy with that? Or conceptually, would you keep investing in the business and try to -- and customer care to try to get toward 5 stars? I'm not saying that 89% or 91% will make a big difference. But will you continue beyond 2019 to invest in customer care? That's my first question. My 2 other questions are more, let's say, top down. And firstly, on the combination that was announced this morning between Bovis and Linden Homes, I'm assuming there'd be some competitors for you in some regions. Do you see that as an opportunity, maybe they’re going to be focused on the integration, maybe a bit less competition on the land market? I mean what's your reaction to this announcement? And lastly, a very -- very high level, but if we were to get after the election some sort of coalition government led by labor, what would you expect would be the impact on Persimmon and the industry, maybe a bit more social housing unit in the mix, maybe some changes to help to buy? Do you have any views on that?
I'll deal with the 3. On the HBF rating, of course, we want to continue to improve. And as we sit here at the moment, what is encouraging, we've made these strides and made these improvements already. And we have been trending very much higher than the thresholds in the last 6 months. And the good thing for us, a lot of our initiatives hasn't even taken effect at the moment. For example, the retentions only came in on the 1st of July. For example, FibreNest is only just starting to take effect. For example, [our customer poll is about to be introduced. There's a number of initiatives that's in the process of happening. For example, our 2-year contact tier, which we talked about previously, hasn't taken effect, just about to take effect. So I'm pretty confident that we've got the right infrastructure and implementation plan in place to see improvement and that we will see further improvement next year. In terms of Bovis, I don't know a lot about the business. It's not simply doing then operating our core areas to that extent. I wouldn't say they're a major competitor. I tend to focus more on what we do and do what they do. And in terms of government policy, obviously, I think whichever party is in power, I think both are very, very supportive of new housing. I think it will be a fair comment to say that the Labor Party would be encouraging more social housing and encouraging more housing in general. So I think it would create new opportunities forward, which we look to work with the government to try and implement. But I don't see it as a particular threat because I think both political parties are supporters of new housing.
We have the next question from Will Jones from Redburn.
I think I've got actually 4, sorry, if I can. Hopefully quite quick. The first just...
Four?
Apologies. The first just on the sales rate. Obviously, back in the year till August, you've been down about 5% like-for-like per site. Your comments for the second half imply you've been slightly up, I guess, since that period. So really a big change in the year-on-year. What do you think is behind that? Is it the comparative easing? Is it the company getting beyond, I guess, the worst of the PR issues maybe? Or is it the market itself? But just perhaps exploring what's quite useful change for you there? The second was just, I guess, digging a bit further on the price side of things. I think you referenced somewhere around 1% to 1.5% is where you thought your kind of like-for-like pricing was in terms of year-on-year a couple of months back. How would you see that equivalent change today? I appreciate we're talking small numbers, but perhaps the reference to the private order book selling price might be helpful in that context. And then the last 2, just a quick one. Just to confirm, I guess, on the retention program. It seems from what you're saying but that's been fairly smoothly adopted thus far. Is that correct? And the last one was just to double check around your cavity barrier checks that you were doing obviously through the middle of the year. Where are you on that in terms of that process getting complete?
If you deal with the first 2, I'll deal with the next ones?
Yes, on sales rate, Will, yes, I mean for the 18 weeks from the 1st of July, if you look at our overall period, so private sales rate site per week is more or less in line with what we achieved last year. So the comps were a little bit easier. And you're right, up until that point, we were tracking maybe roundabout 4% behind. So what's behind that slight improvement, it's hard to tell. I think that obviously, it's positioning the market, the products that we offer, et cetera. But it just demonstrates that the market is pretty resilient.Pricing-wise, I think your 1.5% full year expectation is still around about the right position. If you look at the forward position, for example at November, it's telling us the same sort of story in terms of pricing progression. So I think that is a similar sort of position. I mean retention wise...
Sorry, Mike, just to jump in there. Sorry, Mike. Is that 1.5% is kind of pure, is it, rather than much in there in the way of mix would you say?
Yes, I mean I'm just talking about private sales there, so that doesn't include any payout on the [indiscernible]. Yes there's no real -- I mean, we've not been doing any large bulk deals on PRS or investor sales or anything like that. So yes, there's no real major changes to the mix within that, no.
And in terms of the retention, yes, it's been rolled out on the 1st of July. Had -- obviously it takes a bit of time for some investigations from the 1st of July so not that many completions have come through yet. And what we did, we rolled out very comfortably. So yes, we're making good progress and we're really proud to be leading the industry in what we believe is empowered customers. And in terms of the cavity barriers, the inspections are going on, we've carried out over 14,000 now, and we'll continue to carry out to we're confident that any potential people being captured that [ mean where they may be missing. ]
We have a new question from Glynis Johnson from Jefferies.
Forgive me if you've already been asked this question. Normally, I start from the very beginning. Your order book. One, if you can break out private and affordable for us, just so we can see how things have been progressing.
Would you get that Mike?
Yes, I mean I think looking -- I mean, obviously, what we're saying is that we've got about GBP 950 million of sales still forward into -- beyond the current year. Within that, our volumes are around about 5,900 units in total and that compares with about 6,000 or so this time last year. The mix is slightly different. On the private, we've got about 2,150, within that sort of 5 -- 5,900 as against just shy of 2,600 on the private this time last year. So the private sales are a bit lower, but sort of as a counterbalance, we do carry a bit more affordable sales in that forward order book. Obviously, that's the missing number there to get you back up to the -- around about 5,900. So more strength in the social side, a little lower on the PD, the private sales side. And pricing within that PD is running sort of 2%, 2.5% ahead of this time last year, albeit, obviously, it's been a population show. So I would reiterate comments earlier around 1%, 1.5% as a guide for the future, perhaps. And on the HA side, again, sort of 3%, maybe 3%, 3.5% stronger price year-on-year in the forward sales. So a bit of a mix change, but not too dramatic in terms of absolute numbers. And still a bit of firmness in pricing in terms of outlook. So yes, it's a continuation of what we're seeing through sort of the second half trading so far really.
And just as a follow-up. The strength in terms of the so short and affordable element, is that about you changing how far ahead you contract with some of these sites? Or is it more about new site openings? Does that affordable element tend to be reflective of when you open sites?
I think it's more the second factor. It's more to do when we open sites. Because obviously, we leased a lot of -- as a lot of states we're building on where we lease HA sales, but we haven't actually leased them for private. So I think it's more of that factor than it's announced. So if I'm not leasing certain states till they get to 50%, we're contracting with the HA, but we haven't actually leased the privates. So that's probably distorting the picture as much as anything.
Thank you. We have no additional questions for the moment. [Operator Instructions] So we had a question from Charlie Campbell from Liberum.
This is Charlie Campbell. Just one more question really, just on the retentions. And just wondering what you're hearing from sales teams on the ground as to whether this is something that customers are interested in or not and whether it's kind of a sales advantage that you have the scheme in place and others don't. Just kind of what's been on the ground reaction from salespeople.
I don't think it's been a sales advantage. I think it's more fundamental about having the right product at the right price. But of course, we've been pleasantly surprised when the North is available. I don't think it's a driver if some people reserve our houses committed compared with our peers. But when the new were actually offered, are pleasantly surprised, and I think it's a real benefit. And I think what the [indiscernible] that have been empowered.
Thank you. We have no other questions for the moment.
Well, kids, just to quickly wrap it up, thanks for all the questions. Just to be clear, the fundamentals of the business are incredibly sound, but especially the strength of our land bank, and that in conjunction with our customer care improvement plan where we're getting real traction and where additional initiatives that was introduced in hope of reducing the relations and the retention, FibreNest and our customer poll, it gives me great confidence for the future of the business, not just in terms of our financial performance, but making more further improvement in customer care. Thank you.
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.