Vistry Group PLC

LSE:VTY

Earnings Call Transcript 2021-Q4

[Greg Paul Fitzgerald]

Good morning, everyone, and welcome to Vistry Group's Full Year Results for 2021. Delighted to be joined today by Earl Sibley, our Chief Financial Officer; and Graham Prothero, the Chief Operating Officer. So the agenda, I'll run through our performance through the year and the strategy going forward. Earl will then step in, as you'd expect, with a financial review, handover to Graham with an operational review. And then I'll finish things off with an outlook. And then at 10:00 this morning, we will take your questions. And that will be after, of course, [indiscernible] (00:00:32) I've have had a good [ph] grilling (00:00:34) by you all hopefully at 8:30.

So we had an excellent performance during 2021, with great progress across all areas of the business. The private sales rate increased by an incredible 43% to 0.76, reflecting a sustainable sales rate driven by our land strategy, which we puts put in place four or five years ago. Housebuilding completions had a great year. Completions up to 6,551, well up on last year, with gross margin increasing to 22.3%, again, well up on last year. Partnerships continues to deliver rapid growth from their mixed tenure business, with revenues up 66% and their operating margin increasing to 9.2%, all as we said at the time of the acquisition. We've been very successful in the land market and ended the year with a greater land bank than we had started having bought 11,798 plots, at least at our hurdle rate of 25% and our 25% return on capital rate.

Our strategic land team continues to impress and they also acquired 7,721 plots during the year. Net cash was at £234 million, and that's way up on initial expectations. And that's after taking into account an increase in the land bank. Return on capital increased to 25.5%, well up on 2020 with the Partnerships' return on capital remaining well in excess of their 40% medium-term target. Taking all of that into consideration, it wasn't a difficult decision for the group to accelerate our dividend to two times cover for this year, reflecting the board's confidence in our future prospects.

So moving on to some of the softer issues which underpin those great financial results. From an NHBC perspective, our reportable items are under the benchmark of our peer group. We won just under 10% of the Pride in the Job Seals awards last year with 12 from just under 150 awarded around the country. We won the equivalent of another two Seals from Premier Guarantee. Really, really pleased. And I don't think this should be underestimated with a company that's going through a huge integration over the last couple of years that our Peakon score, which is an independent company which surveys our staff, gave an overall satisfaction rate of 8.5, which is in the top 10% of all manufacturing companies that they survey.

Also great to see that our company charity, Mind, got the benefit of £215,000 raised in [ph] the Mind (00:03:09) by our great employees. From an HBF customer satisfaction perspective, I'll eat my hat if we don't get announced in the next few weeks as retaining our 5-star status for the year 2021. And behind that, it's even better than just being a 5-star because all 13 of our housing business units were 5-star as well as Partnerships and not one [ph] off laid (00:03:31) the other, which is really pleasing. And we started the 2021/2022 year in great fashion with this score up again at 93.6%. So great stuff, and Graham will update you all later on our Science Based Targets, which we've made great progress as well.

So one Vistry, we're uniquely positioned for sector leading returns. And let's be clear, when we bought the Galliford Try housing businesses, I think we got it right, we didn't underestimate what the combined housing business would do or the Partnerships business would do, and they're both performing at least in line with what we expected. What we did underestimate was the power of Partnerships and the enlarged housing business working together, and working together well. That was being underestimated, and it's starting to show some real serious dividends, whether it be on land acquisitions, which I'll talk about in a minute, as well as generating quicker returns from our huge strategic land bank. All-in-all, bringing the two together, we are targeting sector leading return on capital employed in the medium term. And I think the 25.5% that I've just stated is nearly there already.

So making Vistry. I talked about working together, Partnerships and housing, working together, let's talk about a case study called Kenilworth. So it's a development of 620 new homes, which we're doing in a joint venture with a subsidiary of Warwick District Council called Milverton Homes. It was a rare opportunity to acquire such a site. So Kenilworth is a great area to sell houses. And this site is a prime site within Kenilworth. So every single housebuilder in the country was looking to buy the site, but we bought it. Our existing relationship came from Partnerships' relationship with Warwick District Council on their great scheme zero-carbon and homes at Europa Way in the Midlands, and Milverton Homes is fully funding the scheme to the tune of in excess of £60 million, which gives us an infinity return on capital. So, that's an infinity and beyond return on capital. So there's my impersonation [indiscernible] (00:05:36) for those who follow that sort of thing.

Both Bovis and Linden will be on site. Vistry Homes will sell all of the Bovis units and our Partnerships business will do all of the PRS affordable and the Linden Homes sales, and it's a 50/50 split. So open market is 50%, pre-sold is 50%. But it's a great, great opportunity there, and you can see the margin – adjusted margin is 24%, infinity return on capital, a great example of Partnerships and Housebuilding working together.

Looking at our strategy going forward. On Housebuilding, it slips off the tongue, very, very straightforward 25% gross margin, 25% return on capital by the year 2025 with 8,000 completions expected. And on Partnerships we call it Project Pace and we're looking for revenues to grow to £1.6 billion, operating margin of plus 12% and a return on capital of plus 40%. And that's medium-term targets, which you could interpret to be 2026.

So the outlook. We started the year in incredible fashion. So we've still got the pandemic and over the last four or five weeks, of course, we've got talk of an invasion and then the actual invasion of Ukraine by Russia. So we've seen the sales rate in the – so far this year up 20% to 0.79, and that's risen to an incredible 0.92 over the last five weeks when Ukraine has been very much in the headlines. We continue to see price increases. We are increasing our prices every time pretty much we release units on any particular scheme. And about four weeks ago, we increased our prices across the board by at least 2.5%, in some places more. I'm pleased to say that after all the trials and tribulations of last year, our sites are operating well in a much calmer environment, with materials being much less of an issue than they were during the course of 2021. Although we still see labor inflation this year, and we expect to see, as I'll talk about later, a 6% inflation on build cost, but that will be labor as opposed to materials.

Housebuilding and Partnerships mixed tenure forward sales are up 23% to £2.2 billion and we've already secured 64% of this year's sales. Partner delivery forward order booking Partnerships totals £860 million. That's a very healthy number and that's 85% of this year's revenue already secured. Housebuilding are well on track to deliver at least 23% gross margin for the year, which is what we said at the time of the acquisition. Vistry Partnerships are on track to deliver at least £1 billion of revenues, with a margin of at least 10% for this year, again, as we said at the time of the acquisition. So the group is in absolutely great shape to deliver significant step up in profits for the year.

We absolutely, finishing before we move on, support the comprehensive solution to cladding, fire safety. What I would say is Graham and Earl will about it in more detail, but from where I'm sat and at a chief execs level, this is not the end of the world from a Vistry perspective. The moneys that we're talking about here, after taking tax, will not impact in any way our dividend policy going forward nor our growth strategy in Housebuilding nor our aggressive growth strategy in Partnerships. So all very, very controllable.

With that, I'll pass over to Earl.

[Earl Sibley]

Thank you, Greg. I can now take you through those great results Greg highlighted. As normal, the results are presented on both an adjusted and reported basis. The adjusted basis means we're including our share of the results of our joint ventures down to the operating profit level on a proportional basis.

The group result was driven by our strong operating performance across both Housebuilding and Partnerships, supported by good housing market, whilst, at the same time, proactively managing materials constraints in our supply chain. It is good to see the results reflect the real potential of the Vistry Group. You can see all metrics moving strongly ahead and we've given a lot of guidance throughout 2021 in terms of profit margins in both Housebuilding and Partnerships as well as on cash. And you will see, as we go through, that we've delivered ahead of this guidance on all those measures. In terms of overall scale of the business, the revenue at £2.694 billion is 32% up on 2020 and importantly, 7% up on the pro forma turnover from 2019, showing just how well the enlarged group has come together and how well it has been dealing with the pandemic.

Gross profit delivered was £543 million, and this translated to an operating profit of £368 million. Profit before tax, excluding the exceptional costs and amortization, was £346 million, up 140% and slightly ahead of the previous guidance we set, having moved expectations forward a few times during 2021. The exceptional items of £12.2 million. This includes £6.5 million, as expected, for the final cost of integration, taking the total integration costs to around £30 million, which is £5 million lower than the £35 million expectation at the time of the deal, and there will be no further exceptional costs relating to integration. In addition, we've recognized a further £5.7 million of costs in respect of legacy fire safety, meaning we hold a provision of £25.2 million at the end of December, and Graham will comment more on this in a moment.

Amortization in the period was £14 million and we expect a similar level in 2023. And therefore, overall, the adjusted earnings per share for the period was £1.255, well ahead of 2020, and 20% ahead of 2019, when we were just Bovis. The slide also shows the strong position of net cash at the end of December, £234 million, ahead of guidance and I'll come back to this in a few slides time. The combination of strong profit delivery and capital management means our return on capital was moved forward 11 percentage points to 25.5% for the year.

So turning to the Housebuilding financials, and these show the first true combination of Bovis and Linden, gross profit and notably, the gross profit margin have moved forward significantly with the Housebuilding gross margin at 22.3%, ahead of our target of 22%. And if you look at the pattern of six months on six months, our gross margin has been moving forward for a number of periods with the second half of 2021 showing a housing gross margin of 22.7%, giving us confidence on the guidance we have provided of being over 23% for the current year, when the focus will continue to be on that margin growth with controlled volume growth.

Factors impacting margin include the strength of the margin embedded in the land bank now at the targeted 25%, a continued contribution from higher margin strategic land, the quality of delivery and operations on site as well as house price improvements alongside dealing with increasing costs in our materials. The TNAV was lower than 2020, reflects a good position, although our work in progress level was a little lower than planned following supply constraints during the year, so we expect a reversal of that investment during this year and an increase in TNAV. The return on capital for the business was 22.2%, and we can see this progressing along with the margin to 25% in the medium term.

Key metrics for Housebuilding, just pick out a few, whilst we continue to follow a strategy, reducing the average size of our completions, the private ASP has moved forward 4%, reflecting the strong demand across all geographies and all product mix. PX of 4%, very low and not really a selling tool that we're using. The affordable at 25% is as expected and a good guide still going forwards. And whilst Help to Buy at 21% remains an important tool for us, it is significantly lower than in previous periods following the changes to the scheme and much lower usage than others in the sector. Average outlets were as expected in 2021, with a nice problem to have occasionally of selling out slightly earlier than we expected. The FY 2020 number actually was slightly high, with a number of sites remaining open for longer than expected due to the pandemic, and therefore 2022 will see a similar level to 2021, growing towards the end of the year.

Our Partnerships business also ahead of the target set. The focus on mixed tenure coming through, with volume up 41% and reflecting 46% now of total Partnerships' revenue. And this increase in proportion has really driven that revenue up to £864 million, up 19%, as we continue to look for 12% compound growth each year. Operating profit up 64% year-on-year. And as with Housebuilding, a focus on margin coming through with the second half operating margin being 9.3%, a period where we also recognize a higher proportion of incentive costs for the year.

The margin improvement was supported by a higher margin land led contracting, making up a higher proportion of partner delivery than in 2021. In fact, it was nearly twice as much as it was in the previous year, and we expect a bigger proportion of land-led in 2022 to help those margins. However, of course, the biggest impact on margin comes from the increasing level of mixed tenure. And overall, operating margin up 2.5 percentage points in the year, again, meaning we are confident of achieving the 10% margin for 2022 as we continue to grow that mixed tenure business.

With the investment in that mixed tenure, the TNAV now has moved around £100 million from investment as planned and we are planning a similar level of investment in the current year. And whilst the return on capital might come down a little bit in the next couple of years, as we invest in mixed tenure, it will remain well ahead of the targeted 40%. As we continue to improve mixed tenure schemes, hurdle rates of 40%, and still have that ongoing benefit from partner delivery of somewhere between £50 million and £70 million of cash in the business at any point in time.

Partnership metrics, each of these shown with its share of JV, really does show the growth in mixed tenure and also the growth in outlets during the year. So, as we move into 2022, we expect to see that go up to around 40 outlets per year for 2022. And as planned, partners delivery remains an important part of the Partnerships business, delivering a stable contribution in 2021 and similar expected for 2022.

So, a specific mention for our procurement and supply chain. Most importantly, a big thank you to all our supply chain partners for their contribution last year in the face of numerous challenges in the market following the step up in demand. We managed this really effectively, with 90% of our materials procured centrally, complemented by our local teams, ducking and diving to make things happened. We're currently operating in a much calmer environment with teams that are even better equipped and ready to deal with any challenge that arises. Many of the agreements we put in place at the beginning of 2020 that gave us some protection from cost increases in 2021 were renegotiated at the beginning of this year. And these increases will impact various states during the first half, but they're all accounted for in our forecasts and guidance.

We've also taken the opportunity from that renegotiation to bring in additional suppliers for certain materials to give a greater surety over the supply and ensure that negotiation was truly competitive. So overall, last year we saw build cost inflation around 5%. And whilst the material supply has improved, there will be some further cost increases driven by energy prices. However, we see the cost of living, wage inflation being the key driver of cost increases and overall, expect to see build inflation for 2022 around 6%.

The map here shows another active year in the land market, dots on the map show all the acquisitions during the year, so the purple being the Housebuilding, the green the Partnerships, and the new red ones are strategic land options. It really does show our nationwide coverage. As Greg said, with over 11,700 plots secured, which ensured we've added to our controlled land bank in the period. We are still seeing good opportunities to buy land and we have a real competitive advantage on those larger sites. We have seen the land market get a bit more competitive in recent months, which is impacting the level of deferred terms we can achieve in the open market. But importantly, we continue to buy those Housebuilding plots at an average gross margin and return on capital in excess of 25% on average.

A little bit more on our land bank. As at the end of December here, the controlled land bank Housebuilding, including joint ventures, over 31,000 plots for Housebuilding, where we are trying to maintain a 3.5- to 4-year land bank. Also aligned with strategy, you can see the number of plots per site going up, reflecting that competitive advantage on larger sites, so with dual branding or even three brands, as well as the ability for Housebuilding and Partnerships to work together as Greg described. Land cost per plot and as a proportion of ASP remaining consistent, indicating we are still buying land very well and the average future gross margin now at that target level of 25%.

In terms of Partnerships, including joint ventures, we have over 11,700 plots, which will support the aggressive growth plans for mixed tenure development towards 300 homes per annum. And again, the embedded land bank margin has moved forward as expected and will support future margins for Partnerships to beyond 10%. Our strategic land has grown again with exactly 40,000 potential plots. And I have challenged that number a few times, but apparently it really is exactly 40,000 potential plots. I'm complete – pleased to confirm in this area, we further strengthened our excellent strategic land team, both recruiting externally but also promoting from within the team. We are able to deliver a comprehensive planning strategy for local authorities, which is helping pull this land portfolio through in a difficult period for planning.

Our strategic land is now feeding all parts of the business on a multi-brand basis, and we can see how we can get 4,000 plots per year to come from our strategic land and in turn, deliver 30% of our total completions each year, which is good news when I can confirm that the vast majority of our highest margin sites in Housebuilding have come historically from that strategic land bank.

The summary of the balance sheet reflects a really strong position, in fact, stronger than any of the scenarios we ran at the time of the acquisition. As a reminder, that investment in joint ventures and amounts due from joint ventures really reflects further work in progress and land, which has increased over the year. Although we would have liked it slightly more at the end of 2021, it represents a really good position for the current year. As I mentioned earlier, land bank in total is growing. And as expected, land creditors represent a higher proportion of land, so 36% this year. And we're happy at this level. [ph] Not leased (00:22:29) around £70 million of those land creditors are not due any time in the next two years. And given the overall balance sheet strength, we're happy at that level.

Other assets and liabilities in that really reflect the increased activity in the business during the year, as well as an increase in our pension surplus on our three defined benefit schemes. Overall, £1.7 billion of tangible net assets, £2.4 billion of total assets. So cash closed better than expected, ahead of our already improved expectations in the year. And overall, net gearing was – including our land creditors, was 10.5%, driven by that great operating performance, good cash conversion and good management of working capital and if anything, a little less work in progress.

So finally just a reminder of our capital allocation strategy, strong balance sheet and we are targeting slightly improved month-end net debt this year around £100 million and we expect to invest during the year a £100 million in Partnerships, as I mentioned earlier, as we drive the mixed tenure element of the business as we did in 2021. In addition, we expect to invest in Housebuilding to ensure we have the right level of work in progress and land to deliver growth into 2023 and onwards. And that for Partnerships, we continue to see that compound growth of around 12% per annum and the investment will be required to support this. And then Housebuilding, whilst 2022 will be focused again on driving the margin up with controlled growth, we will be looking for more growth beyond that.

We accelerated our dividend strategy during 2021 and we'll maintain a two times cover going forwards. And we have achieved the total gearing close to 10% at the end of 2021 a little earlier than expected, so we do expect a modest cash outflow during 2022 and I would expect that gearing to go up a little as a result. And as I noted, all that investment is to deliver the 25% and 40% targeted returns in Housebuilding and Partnerships respectively. And in the longer term, it does remain our clear intention to return surplus capital in the future and we will update you further on this later in the year.

With that, I will hand you over to Graham.

[Graham Prothero]

Many thanks, Earl, and good morning, everybody. As Greg said, we're really pleased not only with some excellent results in a good market, but with the strength of the business and operations. In Vistry Housebuilding, the sales rate of 0.69 is a stepped increase from where both Bovis and Linden used to be, which reflects the deliberate shift of – to a higher proportion of mid-range housing, successful deployment of two – the two brands, the quality of both of those ranges, a rigorous focus on brand promotion and discipline, and the excellent program on digital selling and on our hub approach.

We regard 5-star quality as a prerequisite and are pleased to be at this level in every one of our Housebuilding businesses, and we're now focusing hard on improving the important nine-month score. We were delighted with our Peakon score in February, which I'll come onto in a moment. And we have an excellent land bank in strong locations and are focusing on increasing the contribution from strategic land and improving the regional coverage of that team.

Partnerships continues to make excellent progress against this strategy. We're really pleased that we've covered Stuart Munro's retirement as a Divisional Managing Director with internal promotions, with Sean Egan, who very successfully led our North East business, now stepping into a DMD role. The three nascent businesses are thriving, with Thames Valley and South East being relatively new areas of operation for Partnerships, and North Midlands, an expansion of our existing West and East Midlands businesses, just to keep control as we respond to that burgeoning demand in that region. We're focusing hard on procuring the land we need to support this growth and expect to operate an average of 40 mixed tenure sites during 2022.

Greg's talked about the excellent project at Kenilworth, and we have a number of these large sites in the pipeline where our integrated model really flies, optimizing our competitiveness, profitability and returns. The Partnerships' model continues to grow a rich portfolio of strong partners with huge appetite for products across multiple tenures. We have regular programs with some 25 registered providers and individual projects with many more, and we're working with more than 20 local authorities.

Now turning to the current issue of fire safety, it goes without saying that we believe that leaseholders should not bear the cost of making buildings safe and shouldn't be faced with the anxiety of that uncertainty. And hence, we're fully supportive of the government's attempt to find a better solution than the previous proposals for buildings between 11 meters and 18 meters. In order to achieve that we do need government to deliver on its commitments to a proportional solution. We can't be in a situation where necessary fire safety works are extended to include building refurbishments. We also need other market participants to align their requirements so that people can readily secure mortgages on buildings which are demonstrably safe in accordance with agreed standards. We've actively engaged with the department on the issue and, of course, with the HBF, which has done a great job of leading and articulating a highly constructive industry response to the aggressive demands from the Secretary of State.

As Earl said, we've increased our provision in the period in line with our known obligations as they stand today. That includes engaging with our partners in Partnerships where we were the contractor. The recommendations from the HBF would increase that liability, but hopefully also start to bring some clarity to the commitments that we're making. And hence, we've also given an indication of our estimate of the additional costs which might arise depending on the uncertain outcome of these negotiations with government and we assess that to be in a range of £35 million to £50 million.

Now those of you who joined our Capital Markets Day in the autumn hopefully got some excellent insights into the way we're structuring and measuring our approach to sustainability in our operations, which we group in these three areas, our people, our operations, and our homes and communities. We've been really proactive in addressing the perennial challenge of attracting and retaining the bright people that we need, and we have a wide range of ideas and initiatives to differentiate Vistry as a great employer. And I'd pick out, in particular, our agile working policy, which is working brilliantly for our people and the business, and several key actions around coaching and training our people for their personal development and for the enrichment of the group's talent and succession.

I'm also really proud of the expansion of our Skills Academies program, which offers the opportunity of training and qualification to local unemployed people on our larger sites and the group wide commitment to foster and support this fantastic initiative. And reflecting our progress on all of this, as I said earlier, we're delighted with our group Peakon score of 8.5, which puts us in the top 10% of our industry grouping. Our framework of communications and feedback with our people seems to be working really well.

Health and safety, of course, is a critical priority and we were pleased with an improvement in our accident incident rate remaining below the industry benchmark. Of course, even one accident is one too many, and we continue to focus on improving our culture and our process, including deployment of new technology in respect of safety around moving plant. We're rolling out a new data platform to improve our data around waste and carbon so that we can better calibrate our performance and measure improvements. We're pleased to sign up to the business ambition for 1.5 degrees, and we're in the process of verifying our carbon reduction targets through the Science Based Targets Initiative. And importantly, we've introduced some targets around sustainability measures into our – into the group's bonus system.

As you know, the supply of affordable housing is a key focus for Vistry and a core metric in particular for our Partnerships business. And we're committing to deliver year-on-year increases in affordable home delivery over and above our section 106 requirements. Our social value proposition is increasingly a key element of major land bids and regeneration opportunities. And we're enhancing the way we can capture and demonstrate this by subscribing to the independent – to independent verification through the social value portal. We're also well on with understanding and addressing the challenge of biodiversity net gain, which is another significant planning and development hurdle to be negotiated and in some local authorities already and nationally from next year.

During the year, we finalized and rolled out our new standard customer journey, which is a key element of enhancing our customer experience and our readiness for the demands of the New Homes Quality Board and the Ombudsman Service. We've registered to join the board with our first business units commencing participation in the next couple of months. We're continuing to enhance our digital sales capabilities, all aimed at making the decision to buy a Vistry home easier and more compelling for today's customer.

And we're making great progress towards the future home standards and the interim changes on Part L, electric vehicle charging, space standards and accessibility. We're redesigning our Linden and Bovis ranges and bringing forward the new third brand to accommodate these and ensure we remain as efficient as we can in that complex transition. All of this work is greatly assisted, of course, by our learnings from several partner delivery projects in Partnerships where the forward-looking mindset of some registered provider and local authority partners requires us to test new technology and designs as they seek to future proof their stock.

And with that, I'll hand you back to Greg for the outlook.

[Greg Paul Fitzgerald]

So moving on to the market review, we continue to see strong consumer demand across all areas of our business, whether it's – be prospect levels, pricing or in actual fact sales rates and we're selling now well into quarter three, quarter four of this year. As Earl said earlier, we expect to see build inflation of around 6% this year and that will predominantly become – come from, sorry, labor, and material situation is much better than it was in 2021 and our building sites are performing much better than it did in 2021 because the availability of materials is much better.

On the bigger picture, planning remains good on a historical basis, but at a local level, we continue to see delays because of two things, the political climate on planning and labor resource within planning departments within local authorities is just not good enough. Interest rate rises will continue, but we haven't seen that impact sales as yet and we, of course, are fully expecting more interest [ph] raises – rises (00:34:39) as we go through the year.

Help to Buy level 17% in the last quarter of 2021, remain at sensible levels. And I really do feel we and, for that matter, the rest of the industry are pretty well equipped now when Help to Buy finishes during the early part of 2021. The market for affordable housing and PRS continues unabated and we continue to see as we did at the time of the acquisition, very, very strong growth opportunities for our partnership's business. And finally, the solution to fire safety really does need to be sorted sooner rather than later.

So in outlook then, as I said earlier excellent start to the year with the sales rate up 20% to 0.79 and in actual fact 0.92 in the last five weeks, Who would have thought Bovis let alone Linden would have been saying having a sales rate of 0.92, that's completely new territory for us. And that's against the background of a month ago where we put up prices across the board of about 2.5% minimum, but we continue to nudge up prices every time we release houses at the present moment in time.

Sites are running very, very well, although we do expect to see some build inflation. Housebuilding and Partnerships mixed tenure forward sales are up 23% to a very healthy £2.2 billion and that's 64% of this year's forecast already in the bag. Our partner delivery forward order book is around £860 million. That's a solid number and that again represents 85% of this year's revenue already secured. Housebuilding well on track to deliver in excess of a 23% gross margin. Partnerships well on track to deliver at least £1 billion in revenue and 10%-plus operating margin for the year.

As Graham and Earl have both touched on, we fully support the comprehensive solution to fire safety that the HBF had just put forward. And again I would reiterate, the costs of that will no way impact our dividend and in fact, our growth aspirations for both housing and the aggressive growth aspirations for Partnerships. So all in all, the group is in fantastic shape and is in a great place to deliver another step up in profits for this year. And it would be wrong of me not to finish, of course, on the Housebuilder Awards last year. So less than two years after the formation of Vistry, delighted there to pick up the award for Large Housebuilder of the Year. Very, very proud night for all of us and great for me to get a picture of a guy wearing a skirt.