Those of you I didn't get a chance to meet yet, I've been in the business since the third of April. Although I'm new to bricks and blocks and concrete products, I'm no stranger to the building materials and building manufacturer sector. In fact, I've worked in that industry for around about 27 years. Most of that time was split between two companies, the first one being Lafarge, and the second one being Etex. Etex is a Belgian privately owned business that turns over around about EUR 3.5 billion, and I headed up the Building Performance division, which is around about EUR 2.5 billion. That was operating on an international basis. Enough about me. I'm also joined today with Ben. Ben, who I'm sure you know well, is our CFO. We're pleased to share with you our half one results, which demonstrate resilient performance in what can only be described as challenging conditions. These results have been delivered by a dedicated team of people. I'd like to thank everyone in the business who played their part. We've delivered GBP 31 million of EBITDA in half one, with a PBT of GBP 19 million, which is broadly in line with our expectations. Despite the competitive market, we've managed to pass the necessary price increases to allow us to offset inflation. The slower market has allowed us to build stock and get service back to the level that our customers expect. The balance sheet remains in great shape. I think the one thing I would add to this list here is we've showed agility to deal with the changing market situations. We've not been afraid to mothball capacity. The example of Howley Park resonates here. We've also looked at reducing costs in our commercial side of the business and back office to make sure we right-size the business for the current market and the expectations of the market ahead. I'm going to pass over to Ben now, who's going to walk you through the financial numbers. Morning, everyone. Again, as Neil said, pleased to be here today reporting on a resilient set of results. As Neil also said, obviously, we've had challenging trading conditions to deal with. It's also pleasing to be here with a number of you in front of me. When we were originally going to do this, there were tube strikes planned, and I was worried I'd be presenting to an empty room, so that's a good start. The results we're presenting today, those are consistent with what we said in our trading update two weeks ago, although at that time, we did allow a little prudence just because our auditor's review was ongoing. It is worth highlighting that whilst we've seen challenging market conditions, these first half results are broadly in line with our expectations that we set at the beginning of the year. We've seen modest improvement in the market in May and June, although that was less pronounced than we were previously expecting at the beginning of the year, and that led us to reduce our H2 expectations when we released, our trading update two weeks ago. Before I get into these numbers in any detail, I'm just going to clarify that in this presentation, we're talking about adjusted numbers, and there are two forms of adjustment between the statutory numbers and these numbers. Firstly, consistent with the last half year, our auditors require us to prepare the statutory numbers using the assumption that we will utilize all of our free carbon credit allowances in the first half, which obviously creates a distortion between the half one, half two results. In addition to correcting for this, and that's only an issue at the half year, it doesn't actually affect the full year, and in addition to that, we've also stripped out a total of GBP 3 million of exceptional restructuring costs, such that we present the most meaningful measure of operating performance in the numbers I'm presenting to you now. Looking at the result, we reported an 18% reduction in revenue relative to the prior year, and that's driven by a volume drop, which is in the high 30% range, and that's offset by a pricing benefit, which kind of averages out in the region of 20%. This drives the resilient EBITDA performance that we've delivered of GBP 31 million, with a margin that's only 370 basis points behind the prior year, despite the marked reduction in volumes that we've seen. We've reported a trading cash outflow from operations of GBP 16 million, reflecting the investment in replenishing our inventories in the period. As Neil says, we've got a strong balance sheet. We closed the period with a net debt of GBP 50 million, which on a last 12 months basis, is less than 1x EBITDA. In accordance with our dividend policy of distributing 55% of earnings, we are now proposing an interim dividend of 2.4 pence per share. Move on to the profit and loss. I'm not going to spend too long on this slide, although I use this as an opportunity to provide a bit of clarification on a few technical aspects of the results. The 18% increase in depreciation we see is due to the commencement of depreciation on the new Desford factory, which began during the period. As a reminder, going forward, we expect the full year depreciation charge for Desford to be approximately GBP 4 million. Our finance expense has increased as a result of both increased borrowings and rising interest rates, and as a reminder, the group was actually in a net cash position during the first half of the comparative year. Our effective tax rate for 2023 has increased from 19.7% last year to 23.7% in 2023, with the principal driver for this increase being the 6% increase in the headline rate of corporation tax, which took effect in April 2023. This will have a 4.5% impact on a weighted basis on the 2023 effective tax rate. If we move on in a bit more detail and look at each of our segments, as always, it's the bricks and blocks segment, which is the primary driver of our group result, and here, driven by the market conditions, we're reporting a 21% fall in segmental revenue. Industry brick dispatches, as reported by the Department for Business and Trade, fell 32% relative to the prior year in the first five months to May. Our own dispatches are down a little bit more than this due to customer mix and our exposure to volume house building. Following the significant price increases we delivered during 2022, in response to rapidly rising costs, in order to protect margins, we needed to secure additional price increases in January 2023. Whilst negotiations were certainly more challenging than in 2022, brick pricing increased by around 5%, and aircrete block prices, which in many cases were held through 2022, increased by around 15% at the start of the year. year-on-year, we have a pricing benefit approaching 20%, and despite competitive market conditions, those selling prices remain firm. The commissioning and ramp-up of the new Desford brick factory is continuing, with the range of products the factory can make now increasing. Although we have faced some challenges in consistently replicating the product range, which we're now overcoming. Our EBITDA margin after overhead allocations has fallen from around 25% to what is still a creditable 19%. This is driven by the fall in sales volumes and the high fixed costs of our clay brick business in particular. Overhead allocations have decreased as a result of a reduction in variable remuneration charges of bonus and share-based payments. These happening as a consequence of reduced profitability, as well as our overall kind of application of strict cost control in the business. Looking at inflation. We have seen continued cost inflation, and that's what necessitated the price increases at the start of the year. Look, relative to what we've seen recently in previous years, this inflation is more contained. It's related to kind of specific areas and is in line with our expectations that were set at the start of the year. Energy costs, they're still expected to peak for us in 2023. We secured around 80% of our energy requirement for half two, although this does limit the benefit we can derive from the present lower prices on the spot market. Now moving on to our second segment, which is bespoke products, and look, it's really good to be standing here again, reporting another strong performance in this bespoke product segment. As a reminder, the Bison Flooring business is the largest component of this segment, and it's this business that's delivered the strong performance, providing a contribution to group EBITDA of almost GBP 6 million at a margin 230 basis points ahead of the corresponding prior year period. The revenue in the segment in the period was only around 5% behind the prior year, with pricing gains almost offsetting the volume drop. Through the period, we've seen demand levels here ahead of those that we've seen in bricks and blocks. Current activity is running at closer to 20% behind the prior year, and within this, we have seen strong demand for our hollowcore flooring, which is used in multi-family developments. That's offset some of the softness in the demand for the beam and block, which we see in the single family homes. What's also quite interesting about this is, whilst our wider markets remain uncertain, our floor beams are among the first products that we sell that goes into the building of a house. Obviously, you put the floor in of the house first. Historically, sales of floor beams have provided sort of a leading indicator as to where sales of bricks and blocks may go. I know there are lots of other factors at play, but that is a positive indicator that we see. Just talking a little bit more about management actions. Look, as an organization, we're experienced in managing our output during challenging times, and personally, I've been involved in making these decisions during the global financial crisis, after the Brexit referendum, and most recently during the COVID pandemic. What we're responding to now is something we're familiar with and something we're well practiced at. With weak demand and uncertain trading conditions, as a management team, it has been important that we again act quickly and decisively. Our focus in the first half of the year was always to rebuild our inventories. We've talked about this a lot before. Obviously, we'd run our inventories down to record low levels, to the point that it was affecting customer service. This process of rebuilding inventories is now broadly complete, and we have spent GBP 30 million on increasing inventories in the first half of the year. Now we've spent that money, it's our intention to limit further growth in our stocks. We need to recognize that efficiently flexing production in the brick business is more challenging than in the concrete business, where we have a higher proportion of variable costs. On that basis, we have to say, taken a decisive action, and as Neil said earlier, mothballed our Howley Park brick factory. That factory normally manufactured around 50 million bricks per annum, and on top of this, we've also made some production cuts at other factories so that together, that will reduce our production-related fixed costs by about GBP 10 million a year. Alongside this, we have also recently restructured our back office and commercial functions, right sizing these to the current market conditions, and that's going to save us a further GBP 3 million a year annually. The cost of delivering these items was the cost of the Howley Park, so we've recognized an exceptional redundancy cost in the period of GBP 2 million and a non-cash impairment charge of approximately GBP 1 million relating to the mothballing of Howley Park. We expect to recognize a further GBP 1 million restructuring cost in the second half of the year related to the commercial and back office restructuring that we've recently undertaken. Our strategy continues to be one of ramping up production at Desford till its full output. That's the way we're going to get the maximum efficiency benefits out of that factory. We will, if necessary, take further action elsewhere across our asset base to make sure that that does not lead to the building of significant inventory rather. We will actually maximize Desford, we'll take off less efficient capacity should we need to do so. Moving on and having a look at the balance sheet, taking a look at working capital first of all. The headline is we've seen a net increase in working capital of almost GBP 45 million since the last year end. This is split between the GBP 30 million inventory build, as I mentioned a minute ago, as we've replenished our inventories to longer term norms. It's worth highlighting that with the significant production cost increases we've seen over recent years, the carrying value of this inventory will be higher than we've kind of previously seen in the books, but the actual quantities, as I say, are back to kind of what we see as historical normal levels. The rebuilding of these inventories is critical to our strategy of ensuring that we provide the service levels our customers expect, with this being even more critical with the current market conditions where customers are afforded greater choice. Being able to demonstrate that we can meet customer demand is key to our strategy of substituting imports. Our own brick and inventory levels now, as I said a minute ago, are broadly consistent with industry norms, which have returned to around three-month sales if you look at kind of thre months of normal market sales. Just looking at the other key movement, which I mentioned at the start, is the increase in trade debtors. This GBP 17 million increase in trade debtors that we've seen since the end of last year, that is seasonal, and is in line with normal kind of trends that we'd see at this time of year. That's kind of you'd separate that from the sort of the one-off inventory build. To look at the kind of wider cash flow and the movements in our net debt. I know there are not a lot of numbers on this slide, so I'm going to try and focus on the key points. Net debt has increased by just under GBP 48 million in the period. Our cash flow from operations in the period or cash outflow, rather, from operations in the period totaled GBP 16 million, compared to a GBP 37 million inflow in the corresponding 2022 period. The primary drivers for this swing are a GBP 15 million reduction in the EBITDA, and then also the GBP 30 million investment in inventories that I talked about a minute ago. The operating exceptional cash outflow of GBP 2 million, as we said a minute ago, it relates to the termination costs related to Howley Park. The remainder of the GBP 3 million restructuring costs is a GBP 1 million non-cash impairment, obviously won't show in the cash flow. Capital spend totaled just over GBP 15 million in this period, that's explained in more detail in the next slide. The new lease liabilities we show primarily reflects the rolling replacement of our HGV fleet with new and more sustainable vehicles. Looking a little bit more closely at CapEx. As I said, we spent a total of GBP 15 million on CapEx in the first half, we anticipate a further spend of another GBP 27 million in H2. We presently currently have committed future spend of GBP 35 million on our three ongoing strategic projects, the phasing of this is obviously laid out in the table. We're still to spend a further GBP 5 million at Desford, which will take us to the GBP 95 million original budget. We are now demolishing the old factory ahead of starting the construction of an additional stockyard that will sit in its place. The project to completely redevelop the Wilnecote brick factory is continuing, but has been delayed for approximately six months by a combination of issues, including the ground conditions, where on removing the original kiln, the ground and the foundations underneath were not as we expected. That's created some engineering challenges that we need to overcome, sorry. Alongside this, we have some delays with suppliers and supply chains, with deadlines being missed. The project will still be on budget. We're still expecting to kind of stick to the current guidance of the GBP 30 million, so we're not going to have a material overspend, but it's just going to take us a little longer to get the factory commissioned. Aside from this, our CapEx spend expectations remain broadly unchanged from the numbers I gave you at the end of when we did the full year presentation. Although we do now see a bit of carryover by about GBP 4 million from 2023 into 2024 because of the delay on the Wilnecote project. Just my final slide before I hand back to Neil, is just to have a look at the kind of the balance sheet cash position. As I touched on earlier, we closed the period with a net debt of GBP 50 million before leases, and that's after investing the GBP 30 million on rebuilding inventories and also spending GBP 15 million of CapEx in the period. At the beginning of 2023, we completed the refinancing of our GBP 170 million revolving credit facility, extending it to January 2027, with a further 18 months extension option beyond that, subject to lender consent. The facility is now sustainability-linked, tied to our decarbonization, plastic reduction, and employee development targets that are now embedded in the facility, with the achievement of these being rewarded with a modest reduction in interest rate. Our margin grid, rather, is leverage driven, with a margin payable of SONIA plus 175 basis points when leverage sits between 0.5x and 1x EBITDA, and it's this margin that will apply in H2. Beyond this, should our leverage exceed 1x but remain below 1.5x, the margin will increase to 200 basis points. At the end of the period, borrowing stood at GBP 68 million on the facility, leaving GBP 102 million of headroom on the facility. On that note, I'll pass you over to Neil to talk a little bit more about the market. Thank you, Ben. Just before we talk about the markets, I think it's appropriate just to share with you some of my first observations after my 100 days in the business. Well, first of all, my beliefs are confirmed. I think Forterra is a fantastic business. And although we're going through a challenging bump in the road at the moment, I would say in terms of the market, you know, my belief that Forterra has a long and exciting future ahead of it is confirmed, and the underlying dynamics for the shortage of housing really makes that possible for the future. I found a group of talented people who are really passionate about what they do. Like with all businesses, things can always be better, things could always be improved. My focus areas for those improvement will be to kind of come back to really focusing on what is the core of our business and making that stronger. First of all, that starts with customers. You know, coming from a market where we've been able to basically sell everything we produce, to now being in a situation where we have to understand the customer's needs much more and expectations, I think we need to put the customer at the heart of the organization. Commercial experience is about how do we take and drive our sales organization to meet those needs of the customers, to drive efficiency and effectiveness of our sales organization, managing our customer mix, driving our share of a wallet, and achieving a more balanced portfolio of customers. Manufacturing excellence is something where we can always improve. I think there's a chance to develop a more CI culture within Forterra, and lean manufacturing and cost reduction should follow from that. The last one is innovation and sustainability. You might ask yourself the question: Why do I group those two together? What I'd like to see the business do is focus more on driving our innovation with sustainability in mind, thinking about the solutions and products the markets will need for the future, with the backdrop of sustainability. Ultimately, these actions will lead to a better performing, more efficient organization over time. The last part I would mention is, I have two uncompromising leadership principles. The first one is, everyone is safe, and the second one is, everyone knows the part they play and where to contribute. If we move on to the market now, you know, the U.K. housing market has always been cyclical. In the last cycle, in fact, we've seen that period of growth last a little bit longer than previous cycles that we've experienced. The CPA numbers are showing a drop of 23% in housing starts, which is 4% lower than their original forecast. We all know the U.K. needs to build more homes, and the ambition of 300,000 homes has been once again confirmed by both political parties. As I said earlier, the fundamentals for our business remain attractive. If we look at capacity now, the U.K. brick market has always flexed its capacity, and the example of that is our recent mothballing of Howley Park, and we see in reality, the competitors are doing similar moves. In reality, if you look at the 2022 demand, you can see that the installed capacity in the market looking ahead, is still not enough to meet that demand. We should bear in mind, in 2022, there were 205,000 homes built, which we know is well below that 300,000 home target. Taking a look at the current market, industry dispatches were 32% down from January to May versus the same period last year. As you can see, the year-on-year comparison has gotten better since March, and our own sales have confirmed that in June and July. Brick imports have fallen considerably, by 42% for the same period of January to May, although they're still a high percentage of total sales. This is predominantly due to the long supply chain for bricks. Those bricks which are manufactured for the U.K. are different sizes to those in Europe, and also the consistency of the site. You don't start building a site and then switch bricks halfway through, that's taken a little bit longer to wash through. However, the replacement of imports remains a clear commercial focus for our business. If we look at the strategic update, we've got some great exciting projects going on. Many of you would have seen Desford. The plant is operational, and it's still in the commissioning phase, and when it's up and running, we will be enjoying an improvement in EBITDA of GBP 25 million. Wilnecote, where we're installing a new factory within an existing building on an existing site, we will be building something that allows us to produce bricks, which are much more specification-driven, more of an aesthetic range. Whereas Desford was very much built with the house builder in mind, Wilnecote will be built more with the specified market, the aesthetic bricks market in mind, and should allow us to enter more things like commercial buildings, et cetera. Lastly, Accrington, which is a GBP 12 million investment in a brick slips factory. This will allow us to ensure that bricks remains a facade solution for the future. Offsite manufactured buildings and commercial buildings will be a key target for this type of solution. We have an exciting pipeline of additional projects to capitalize on market growth moving forward. Moving on to capital allocation, I believe we've got the right priorities in terms of our capital allocation. As I mentioned, we've got a pipeline of investment projects and some for the future. One example of something for the future is in our existing site at Swillington, we will probably end up building the first zero carbon brick plant, as long as carbon capture makes significant progress between that time. We also have other plans to invest in capacity in other product lines. We'll look for attractive bolt-on acquisitions in adjacent complementary markets, and we'll keep our attractive dividend payout of 55% of earnings. Let's not forget, GBP 35 million is already committed in the next 18 months for projects that we've already started. Looking at sustainability, there are some really exciting things happening in the business. We're 9 months away from the groundbreaking solar farm, providing us 70% of our electricity needs. We've completed successfully a blend of gas and hydrogen trials in our business, which will allow us to get ready to when hydrogen is available, to switch and understand the impact of firing bricks with hydrogen would create to us from a manufacturing point of view. We've got continued research going on with things like calcined clay to see how we can substitute cement. The Desford roof-mounted solar panel is almost complete, which will give us 16% of our plant's energy needs. The final part is around we're working on our Scope 3 emissions to make sure we can give you an update in our 2023 sustainability report. Moving on to the outlook now. You know, as we previously mentioned, the macroeconomic headwinds and high inflation and interest rates have created an uncertain market. While we experience improved trading conditions in the last few months, we don't believe those conditions will get us back to the level of our original H2 expectations. Our guidance, we've already issued a few weeks ago, remain that our Half 1 split will be more aligned with Half 2, and that remains unchanged. Looking ahead, some of the things we've done and some of the actions we've taken will bear fruit for the future. Desford will bring an upside as we move out of the commissioning phase and roll into full ramp-up. Energy costs are stabilizing, and we've managed to hedge around about 70% of our 2024 requirements. Customer destocking, it's washing through as we speak, but it will be washed through when we turn the corner to the year, and we will see a further reduction in brick imports. Those cost reductions that Ben mentioned that we've taken will provide a full year benefit next year. There's many actions which will provide value for next year and beyond. That concludes the presentation that we had for you this morning. We'd like to open the floor to any questions you may have. Just start at the front and work our way back, maybe with the microphone. Yeah. Morning, Priya Woolf here from Jefferies. I've just got three questions. Firstly, I suppose the difficult volume trajectory in the brick market is well known, but obviously, you're investing in brick slips in Accrington. I just wondered if you've got any sense of how that brick slip market is developing currently. Second question is just on pricing. You're saying this is still holding up quite well, but is there any sort of setup, you think, where actually you could see prices starting to fall? Would cost deflation tip you into having to do that, or actually just the weak demand environment continuing? Lastly, you've obviously mothballed Howley Park, but what would be the next capacity that you potentially do mothball? Are these older plants, smaller plants, ones with more specialized production processes? Okay, I'll take the first one. Ben, do you want to take the second one, and we'll discuss together. the third one? You know, brick slips, you know, you could look at that and be very, very concerned that, you know, one of the potential customers for that could have been, could have been Ilke Homes. The reality is more and more construction is being made in panels, and more and more of that construction is going into multi-residential buildings and non-housing solutions. That market remains very untapped for us. Even though the overall market might have some challenges, there's still some plenty of room for us to go in and build a position there. I believe that will become a more and more important market as time progresses. Do you want to take the price? Yeah, I mean, and just to pick up on Neil's point on the slips, I mean, we are dipping a toe into that market. It's a fairly modest investment. We always knew that it would be a fairly slow ramp-up, so although the factory we're going to build will be able to make 48 million slips a year, for it to wash its face financially, we probably only need to be selling 10 or 12 million. It's a investment in a future market. We appreciate that market's kind of as yet, kind of undeveloped and is likely to grow due to the sustainability benefits that slips offer. Yeah, very much we don't have to be selling an enormous amount of slips to make that investment work. The fact that we're using an existing factory with an existing kiln, is not like you've got a big fixed cost base there, sat there, making slips. We can kind of ease our way into the market and ramp production up over a number of years. Looking at the other dynamics around pricing, can prices fall? Look, they're not falling at the moment. We, as an industry, have a good track record of acting kind of sensibly and rationally. If you look at, I always use the example that brick prices didn't fall in the global financial crisis, when volumes fell by 40% and for a period of sort of four years. No, I mean, look, we've taken rational decision to take capacity off. I believe our competitors have announced a permanent site closure as well. No, look, we don't know, but at the moment, the kind of there are good signs that the market kind of will stay as it is. If you look at the derivatives for next year, I mean, we know a large chunk of the volume kind of shortfall that we're seeing at the moment relates to in destocking in our customer base. Even if the market was to remain broadly flat for the next year, with that easing of that destocking, we'd still like to think we'd see an increase in volumes anyway, which may improve the market dynamic. Look, I can't say there's never a risk, but at the moment it's not something we're seeing. Your final point around mothballing Howley Park. Look, we've mothballed Howley Park. We've also made some production reductions elsewhere. In the concrete side of the business, it is easier just to vary production. You just basically make less concrete, there's much less fixed cost. As we bring Desford up to speed, we've been clear that that's our strategy. We want to maximize the efficiency benefits of Desford, and if we need to look at taking off other factories, we will, but we're not in a position to start announcing which factory that might be at this stage. Maybe the only thing I would add, sorry, is just on the pricing. You know, we've seen you know, a lot of pressure in the first half of the year, where we've managed to keep our price position. I think, you know, although the second half of the year will be better and more in line, I don't see anything happening in the second half of the year, which is different to the first, really. The fact we've managed to keep our price position thus far, I think, is reassuring where we believe the performance will be for the second half. Who was next? Christian, do you want to go next? Thank you. Morning, Christian York from Numis. Three for me, mostly focusing on that 2024 dynamics that you touched on. Firstly, on destocking, have you managed to do sort of any work, maybe trying to triangulate what customers are saying versus, you know, the volume data, just to try and estimate what proportion of the decline in the first half was destocking? Secondly, for Desford, what sort of incremental EBITDA benefit should we expect next year? Is that a gross number, or should we sort of deduct, maybe sort of displacement if it's a flat market of other production? Just thirdly, you know, energy sounds like it will peak this year, but what about other areas of inflation? In that context, you know, should we think of, as we're standing here today, 2024 being a further inflationary year for the cost base or flat or deflationary? Just sort of initial thoughts around that. Thank you. Thanks. maybe I'll take the first one, and then, Ben, you follow up with the second ones. Look, destocking, it's. You know, believe you me, we've tried. We've tried to get a picture and an understanding from our customers in terms of how much stock they're holding. Very often, we've not been able to get the answer. In some cases, I think it's genuinely a belief that or generally a fact that they don't know. They've got a lot of stock in a lot of fields, in a lot of different places. Also, it's kind of quite commercially sensitive information because getting that picture from your supplier will probably be a way of, you know, putting us under a bit of pressure to see if we can come to the table commercially, which we're, of course, resisting. I think that we're seeing two things in destocking at the moment is one is, I describe this as, as loo rolls, and I never thought I would talk about toilet rolls in a, in a, in a meeting like this. You know, when we had COVID, everyone bought a lot of toilet rolls, didn't they? You know, I don't know how my wife did. I blame my wife. The reality is, we all, we all kind of bought a bit of stock of toilet rolls, and we kept them in the cupboard, thinking there wouldn't be toilet rolls in the future. Now, I think it's quite similar what happened with bricks. They all kind of stayed there, and then, you know, you didn't order any toilet rolls for a while, did you? You kind of destocked those toilet rolls through, and then that takes a time to happen, and that's what we're experiencing with bricks. The other thing is then you turn around and say: "Actually, there's no need to buy a lot of toilet rolls anymore, is there?" Because the availability is back to normal, okay? That's what customers are seeing now, is they're seeing that manufacturers have built stock, and there's no shortage of availability. Therefore, they're saying: "You know what? I'm not going to hold stock. I'm going to rely on the manufacturer to give me the products I need in time." Of course, if they give us too much visibility on their order book, they will turn around and start to say, "Well," it makes the discussion about price a little bit easier. The shorter they give us and the more hungry we kind of create the illusion of being, the more they might think we'd be inclined to react to price, and that's not going to be our position on that. That's kind of my view on the whole toilet roll and destocking of bricks example. Ben, do you want to take the other two? Yeah, moving on from toilet rolls. Not sure how. Desford commissioning. Obviously, Desford's in its sort of ramp-up phase now. A number of you came to the very successful opening event we did back in May. We put on a show then. I think the key thing to remember, it's still commissioning. In the moment, we're in the process of ramping up the product range, making more different products. We're trying to match the existing product specification. We're not designing a whole new product range. One of the benefits was, is that we continue with the product range that we've already built, we got a new super efficient factory, very different kiln, uses a lot less gas. You don't just chuck the bricks in, they come out identical to the old factory. It needs a bit of setting up. That's what we're doing at the moment. Looking at what we said previously, we always said that in 2025, which was effectively year three, Desford would make an incremental GBP 25 million of EBITDA. In year one, which is 2023, we were originally suggesting it might make GBP 10 million, and then in year two, somewhere between the two, so GBP 17-ish. What's actually happened is a few things. Look, we've got a market change, as you all know. The GBP 20 million-GBP 25 million, we probably need a normalized market or a decent market to be able to get to the GBP 25 million, because if we ramp-up the factory but then have to take up other factories, then you lose some of that benefit. The other sort of dynamic we've seen as well is that the commissioning is probably a little bit behind where we maybe envisioned it would be. We won't make GBP 10 million this year out of Desford. When you're talking about these numbers, they're kind of absolute and incremental because the old factory didn't make any money. This year, we'll probably make an incremental GBP 5 million or thereabouts. Next year, I'm still hoping for GBP 10 million, maybe close to GBP 15 million, but it really depends on the market. You kind of, you're looking at where the market is for 2025 in terms of getting to the full benefit. I think nothing's changed. There's just sort of. We always knew that estimating a timing of a commissioning process was going to be challenging. In the moment, we're making some good progress. We've now got more than half the product range commissioned. We've had a bit of progress on that in the last fortnight, which is good. Next year, if we make GBP 5 million of incremental this year, there's an opportunity of another GBP 5 million-GBP 10 million on next year's result, I guess. The final one is good question around other areas of inflation. As I mentioned earlier, we still are seeing inflation in the business, but it's not the crazy inflation that we saw last year. Look at the area. I mean, we agreed a wage settlement with our unionized workforce, I think it equates to 6.5%. Bearing in mind that they started asking for a much higher number than that, 6.5% is still a big wage settlement. That is still a big number. Despite the fact that everyone talks about energy, like our wage bill is a much bigger expense than our energy expense. What's wage inflation going to be next year? We don't know yet. If you look at all the kind of the macroeconomic high inflation, is the wage expectation going to be 0 at the end of next, this year, or is there still going to be kind of an inflationary pressure on wages? We don't know. Another area where we're still seeing continued inflation, I know Breedon were in here talking yesterday, cement prices are still going up. That's a sort of a challenge we face. In other areas I wouldn't say we're getting any deflation, but it's broadly kind of settling down. What we're seeing is what we expected at the start of the year, to be honest. Go, Aynsley. Thanks very much. Aynsley Lammin from Investec. I think I've got three as well, actually. First of all, on pricing, just explore a bit more. I think you said your volumes for bricks were down a bit more than the industry in the first half, and you kind of referred to the mix there. Is that purely mix, or is there some issue around maybe, you know, pricing, competition? Just interested a bit more color on that. Secondly, just again, exploring your comments around the recent kind of improvement you're seeing in trading. Is that because there's less, the destockings coming to an end, or are you actually a bit more bullish around, you know, house builders beginning to get a bit more optimistic, the RMI market? Just interested, a bit more color there. Obviously, particularly given what interest rates have been doing recently. thirdly, just on imports, again, update there on kind of energy cost, currency move, how that's affecting? Do you see that collapsing a bit more quickly in the second half and into next year? Thanks. Okay, maybe I'll take the first one, and the second, and Ben, you maybe finish off with the last one. You know, volume of bricks, what are we seeing at the moment? Yeah, our sales are slightly down more than the overall market, and the reason for that is our exposure to the house builders who have been more impacted by the slowdown that we're seeing. You know, we're with the big house builders, often in the first-time buyer market, so, you know, we felt that pain a little bit more. What we've done is we've found ways to pivot our business and look at other attractive segments and start to try and see what we can do to develop business and relationships there. Going back to my comment on kind of what commercial excellence is, that's very much an underlying fundamental of that. You know, the improvement in trading, yeah, we're seeing that coming through. Is that because house builders are building more houses? Yeah, it's a little bit better, but the reality is it's the element of that destocking that is washing through. As Ben mentioned in his slides, you know, the Bison business, which is very much the foundations of a home, has been upticking nicely, so that will pull through and lead to homes being built. Things are moving in the right direction from that point of view. From an RMI standpoint, you know, a big product for us for RMI is the Fletton business. That's pretty much at the same levels of decline as what we're seeing in the other range, which is probably more into house builders, et cetera. There's no, there's no good news story there from the RMI point of view. It's in a similar place to the, to the house building side of things and the other parts of the market. Ben, last one for you? I mean, just on the destocking, I mean, look, it's very hard to distinguish on the destocking between market and destocking. It's just very difficult. Where there is a bit of visibility is on the merchants, where we do get for the big merchants, we do know how much of our stock they're holding, and we do see, again, they've done some significant destocking as well, so that's affected the London Brick. Merchants generally buy more stock on a rising market and then try and reduce that stock on a falling market. We've seen kind of the destocking happen, not just with the house builders, but also in the merchants. Also imports, look, as I say, look, we're pleased by the 42% reduction year- to- date relative to the prior year. We've got to be a little bit careful. I think that some of the data on a monthly basis, it's government data, take it with a pinch of salt. I'm not, I wouldn't rely on it accurately, but it's a positive indicator. What we're seeing, we always said that they would be a bit sticky. As Neil touched on, you can't just change bricks halfway through a development. In the U.K., bricks are a standard size. That's different in Europe. The bricks that have been made in Europe, they still, if they've been made to a U.K. size, they're still going to come. There is sort of over time, the cost base is broadly the same in the U.K. as it will be in Europe. The transport cost is significant, the cost of getting stuff from kind of Europe to the U.K. is significant, and actually a good kind of benchmark for that is that the supplier who's been building the factory at Desford, they've been telling us about the extra cost they've incurred of getting all the equipment from Italy to Desford. Those costs are there for brick importers as well. On the other hand, we fixed our energy costs for this year. If you remember last year, a lot of the European manufacturers shutting down last winter because they hadn't forward-purchased energy. If those guys haven't forward-purchased energy now, they can buy it very cheaply on the spot market in the short- term. Not sure how that leaves them set longer term for the winter, but at the moment they may be able to capitalize on that. I think we're still confident that the imports will fall. They've made a good start, but we always knew that there would be a lag because of the reasons I've just talked about, that they can't just be replaced overnight. There will still kind of be imports in the system that need to come in. Jon, are you in the middle there? Sorry, sorry. Yeah, thanks. Jon Bell, Deutsche Bank. You touched on European-made bricks. I recall from six months ago, there was quite a lot of them knocking around at discount prices in the market. Has that kind of healed over time? Is it impacting pricing generally? Secondly, on Desford, costs came in at GBP 95 million. That was on budget. Obviously, since that was commissioned, inflation has spiked up very significantly. Do you have any sense for how much it would cost to build a Desford today if you were to go down that route again? Great questions there. Ben, could you do the first one? Because we're going back in time a little bit there. I'll do the second one. You can maybe support me a bit on that one. Okay. I mean, I think the imports one, as I said, it's a period of time it will wash through. Yeah, we've talked about the low-cost imports available at a discount. There's still some of that going on. The key question is whether they were made kind of back last year and are still in the process, or whether people are still making kind of imported bricks to bring into the U.K. to sell at no profit. That's the challenge. I mean, we'll see over time. I don't have any definitive information. At the moment, kind of selling something to get rid of something you've got that's costing you money to store is very different than going and making it especially to sell. We still maintain sort of the cost base should be broadly the same over the longer run in Europe. You've got a big transport cost. A lot of the imports involve a middleman who need to make a margin, and you go back to what do the customers want? They want kind of a stable supply chain, good provenance, nowhere to go if there's a problem. And by having stocks on our yard, and that's why it's so key that we've rebuilt our inventories. You can't blame customers for running off and buying inventories when we keep letting people down. If we've got big stockyard full of stock, Desford's gonna have a stockyard that will ultimately hold kind of up to 50 odd million bricks. Not saying we want to put that many bricks on it, we've got a buffer. That's to give customers comfort that they don't need to run off to import. It's an evolution. I can't give you a definitive answer as we sit here now. Thanks, Ben. Maybe on the second question, which is a good one 'cause we were discussing this in the office the other day. You know, what would Desford cost us if we were to build it now? We, we came up with a number of around about GBP 120 million, would be the cost, and it could even be higher, because inflation has gone through. I think, you know, what it demonstrates is we took the decision at the right time, and that's a considerable benefit. I mean, we're very lucky. I mean, we've agreed a fixed price contract for that factory. I think it'd be fair to say that the manufacturer is kind of giving us a sob story of how they've not made any money on it, but we agreed a fixed price contract, and we've basically seen inflation at the time. Yeah, we've always said it's kind of a bit fortuitous that we bought the factory at kind of old cost, and we're gonna get all the revenues at new cost. That's luck. We can't really claim credit for that. Yeah. So. Yeah. Just go to the left, yeah. Sorry. Hi, Robert Chantry at Berenberg. Just two questions, as opposed to the usual three. Just in terms of capacity, you have a great waterfall chart on, I guess, industry capacity. Is it possible to break that out for you guys? What was the productive capacity at kind of 31st December last year in terms of million bricks? What is it today, and what is the expectation for 31st December this year? Clearly there's lots of moving parts in terms of mothballing and taking capacity out, et cetera. Secondly, I just wondered, I guess in your first kind of 100 days in the business on energy, cost hedging in particular, have you thought about any more kind of different options with regard to the structured hedging for the medium term? You've clearly seen a big differential between the way certain businesses have approached this. Are you kind of backing the kind of existing strategy of the kind of variable hedging policy, or is there a kind of view to take a longer-term, more structured approach, just interested the kind of dynamics around that? Thanks. Okay. Maybe, Ben, do you want to take the first one, and I'll start on the second one, and you can maybe give me a help at the end. Yeah. I mean, look, I'm not, I'm not going to get into the absolute detail of our capacity. I think the first one, I mean, I think, I think we've quoted previously our capacity is in the region of 550 million bricks. That was pre-Desford. What we've done with Desford is added an incremental 90 million. By adding the old taking the old factory off that made 90 and replacing it with a new factory that made 180. We obviously, within that, we can still flex our output, so we've got to be careful that we don't mix up capacity and output. Howley Park is still capacity. It's still there, but we're not using it. I think kind of at the moment, kind of I wouldn't get too carried away with kind of capacity and utilization. Ibstock are in the process of bringing factories on, closing factories. There's a bit of fluidity there, but I'm sure that all manufacturers are gonna be doing the same as us and actually managing their asset base efficiently. With bricks, as I touched on earlier, brick factories are high fixed cost. It's often easier to mothball a factory rather than try and run two factories inefficiently because of the high fixed cost base. The second one around hedging. You know, look, hedging is always a challenging thing. I'm of the belief that, you know, you're not doing it to speculate, you're doing it to minimize and secure your price position and give kind of some kind of consistency to pricing for your customers and understanding for your business, and I think we get that balance quite right. Of course, you know, as the volume which you may or may not produce, evolves during the course of a year, you may find yourself in a position that you've got a higher percentage hedged as your volumes go backwards. I think, you know, no one knows what the next winter is gonna be like. If the winter is really cold, then we'll see a very big spike. I think we've got a good position in terms of where we are from a hedging point of view, and I don't see any urgent need to kind of change away from that. You know, it's kind of watch and make a balanced decision on where you think you can go and get good external advice, which is what we're also doing. Ben, I don't know if you want to add to that. Yeah, I mean, one other thing I'd say is just, look, kind of I entirely agree with what Neil says on gas. On electricity, we're already doing something slightly different with our solar farm. Our solar farm, which will start generating electricity April next year, we pay a market price for the first year, and then after that, we've agreed a 15-year PPA, which gives us a very competitive electricity price for the next 15 years with just an inflationary kind of uplift. That's kind of given us long-term certainty. On gas, look, we buy we're not trying to beat the market, but we obviously try to buy when we see value. We also looked at, we made some decisions to forward purchase kind of for this year. You can't win them all. The market price has fallen. Last winter, we kind of, we knew what our pricing was with our customers, so we decided to kind of de-risk that. As Neil says, we're not trying to beat the market, but where you can get long-term value, like we have with the solar farm, we'll obviously look to do that. Stephen, back there. I don't know where the microphone is. Sorry. Hi, Stephen Rawlinson, from Applied Value. I'm sorry, I'm going to go back to three. I think two is far too low. Can I just ask the question, firstly, in and around the second half cost position, you've talked about GBP 13 million annualized cost savings, but in the second half, you know, what should we expect that that would contribute? You know, it's not on a full year basis, but there might be some contribution in the second half. Plus, your per unit costs per brick should be a little bit lower if the proportion of the sales are higher from Desford than they are from some of the other high-cost plants. I'm just sort of questioning the second half and saying, well, are there some cost benefits coming through there which don't seem to be fully factored into the guidance? Can you just talk us through that a little bit? Secondly, with regard to inventories, should we expect inventory levels to get back to at the end of the year towards the levels they were at last year? Obviously, the per unit cost might have gone up during the course of the year, so the value might be greater, but the GBP 33 million of inventories at the back end of last year, is that what we should be seeing and thinking about? That would obviously have implications for the net debt position. Is there a comment you might want to make about the mix of the current inventories as to whether, you know, that they are appropriate to what the builders actually want at the moment? And finally, can I just ask a question in and around whether there is a trend towards more bricks going directly to the users rather than via merchants, and whether that trend is increasing? What we've got is some of the house builders saying that they don't expect cost increases on bricks, some of them actually going to concrete. Notwithstanding that, you know, is this a trend, and should that trend benefit you, and how should we see that play out? Do you want to do that last one, Neil? Yeah, I'll do the last one. You can pick up the first three. Absolutely, Ben. Go first. I'll do the last one first. Do the other. The thing around the route to market, you know, we have no major plans at the moment to seriously change the route to market. However, when we look at how we want to pivot and, you know, from a commercial excellence point of view, look at different customers, we may decide to reflect that in certain or change that in certain circumstances. We're not seeing a big change in terms of the route to market for our products. You've got to bear in mind that, you know, you have some customers, and you might look at them and say, My goodness, why don't we do that direct? However, those customers do also do a very, very good job of accessing the long tail for us. We've got to get the balance right, and I think we've largely done that. When we're looking at opportunities to, you know, to grow and develop our mix of market share, we may reflect on who we do that with or whether we do it direct. Okay, I'll try and pick up all these, Stephen. There's lots of points there. You might have to help me. First of all, kind of the cost benefits, the GBP 13 million annualized. First of all, let's look at the GBP 13 million. You need to break it into two parts. GBP 10 million of that is production cost related, and GBP 3 million is back office related. The production cost related is a bit more difficult because if you stop producing, you also don't get the stock. If I save GBP 10 million of production cost, that won't increase my profit by GBP 10 million because I won't have any inventory to show for it. I think if you look at the actual cost saving, it'll go straight to the P&L. The sales, commercial, and back office stuff does go straight to the P&L. You can affect that actually, there's half a million GBP, there's kind of 1.5 million GBP or so of benefit in that, potentially in the second half. Your unit cost point's a good one, but there's a counter to it. Yes, in theory, if we put more production out of the higher efficiency factories, you get a lower fixed cost, sorry, lower cost of production. That's right, but as we have built GBP 30 million of inventory in the first half of the year, we will cut production in the second half of the year, so we are not going to make as many bricks in the second half of the year as we have with the first half. That means that we will be absorbing our fixed cost less efficiently. Whereas we'll maximize the efficiency of Desford, some other factories, we will not be running as efficiently as we could do. That will counter that out, so you're not going to get an efficiency benefit in the second half. You effectively, as you cut production, you're going to lose some efficiency. On the concrete products side, although you've got a higher variable cost and you can reduce the volume more easily, then you've still got a fixed cost that you're going to be kind of leveraging less. That will cancel out, so I wouldn't see that as a major driver of the result in the second half. And then the think was the point around inventories, will they reduce back down? No. I mean, look, we've seen this GBP 30 million investment we've done as a kind of a midterm investment to keep inventories at levels where we can meet customer demand. The inventories that we ended last year were record lows, to the point that we were struggling with customer service. What we want to do is limit inventory growth in the second half of the year. I can't say that. You've got to look at it on a factory-by-factory basis. We might still build a little bit of inventory, depending on where the market is, but we're not looking to grow any more inventory. I would be looking in terms of where you're estimating net debt at the end of the year. I'd be looking at inventory staying broadly flat against where they are at the half year. I think the final point was the mix of inventories and are they what the customer wants? Yeah, we've got a process, what we call kind of customer demand management, where we're looking to make sure we make the right inventories. We're obviously making the stuff that the customers want. We don't want to make massive piles of inventory that customers don't want. Yeah, we are, we're doing our best to match production to demand, and that's fairly easy to do. I mean, kind of, we're quite lucky that we're not we're not M&S with a new range of kind of autumn kind of ladies wear or whatever. Basically, the bricks that we sell are kind of fairly standard year-on-year. The kind of the customer mix doesn't change that much, so that's probably not the hardest industry to kind of manage a demand planning with. Gentleman here? Morning, Sam Cullen from Peel Hunt. I've got two kind of pop follow-ups to Rob, really. Just on the energy costs, can you hazard a guess at the 70% you've secured for next year, where does that sit relative to the 80% you've kind of secured for this year in terms of 2023 peaking? Is it materially lower next year or very slightly lower given the layering of the hedges over the last year or so? The second one, on the question kind of you and the wider industry, I guess. Has the makeup of the capacity changed materially versus the GFC in terms of your, call it 650, for argument's sake, of million bricks of capacity, are you now materially more centralized in terms of 50%, 60% of that is over four or five sites, and therefore your ability to flex capacity down and mothball smaller sites more quickly is less than it was 15 years ago? Did you have a less centralized production base 15 years ago with more smaller areas you could take out, given you typically want to run your larger factories at fuller capacity utilization for more efficiency? Yeah. That's you and the industry, I guess. Yeah. Do you want me to pick both of those? You can do, Ben. Look, on the energy costs, look, I think we've always said this year is going to be a peak of energy costs. There is still 30% of kind of our energy requirement for next year is still subject to a market that can be quite volatile. When we say about 70%, about 80%, it's all driven on what we produce. I think we said publicly that this year is our peak of energy costs. That implies that there is a reduction next year. I think it's commercially sensitive. I'm sure my customers and my competitors would love to know exactly what my energy cost is going to be next year. I'm not going to kind of go into too much detail on that. Yeah, it will be a little bit lower next year. On the really good question on the historic kind of capacity and where we were pre and post-Global Financial Crisis, and it's a good job I've been here 17 years, and Neil's been here about three months, I'll pick this one up. When we started the Global Financial Crisis, we had a very different asset base than when we ended the Global Financial Crisis. We've currently got 9 brick factories, of which one is mothballed. When the Global Financial Crisis started, I think we had 17 or 18, and that went down to 9 or 10 during the Global Financial Crisis. During that, we also opened Measham. Up until we've recently opened Desford, kind of Measham was our centerpiece, most newest factory. That was opened about 10- 12 years ago, and many of you have been there. Measham replaced three old, obsolete factories with a much higher cost base, so we were doing that in the global financial crisis. Yes, we kind of took out. We were the industry leader in taking out the kind of oldest, most tired capacity. Heidelberg Cement had, who were our parent at the time, had lots of big challenges of their own, and they took a very unemotional view of bricks. They basically kind of took anything that wasn't making money at that point of time, got taken out. Look, Steve and I used to say, and it's kind of a cruel thing to say in some ways, but the global financial crisis was one of the best things that ever happened to this industry. Obviously, a lot of people suffered and lost their livelihoods, but the industry rationalized, not just us, but also our competitors. The oldest, kind of least efficient factories got taken out. An industry that was sat with 1 billion bricks in stock was able to reduce that stock, and then you get a much leaner, more modern, kind of more efficient industry that you see today, which the likes of ourselves and Ibstock have carried on investing in. I think, yes, we've got less factories, but we've still got enough factories where we can kind of play tunes. We obviously played tunes, we kind of took difficult decisions in the COVID pandemic. Even before that, as I mentioned earlier, we took capacity off after the Brexit referendum. Actually, that turned out to be a bit of an overreaction because we had a blip for a few months, then everything picked up again. No, we're pretty experienced in managing this. Yes, we've got kind of less factories, which maybe makes it a bit harder, but the factories we've have got are far more efficient and in a better place than they were in 2007. No, I wouldn't swap the asset base I've got now for the one I would have had in 2007. Yep, absolutely. Thanks. Hi. Morning, yeah. Harry Dow from Redburn. Just two questions, I think. Firstly, just on the bespoke business, obviously quite a good, I think, performance in the first half. Can you just remind us what you think sort of the long-term and, I guess, a more normal volume environment, what the margin or EBITDA contribution you think from the bespoke business could be now it's gone through that sort of transformation over the last two years? Secondly, just coming back to the energy costs, actually, just more for this year. I think you said you've hedged, I think, is it 80% for this year? Obviously, I know there's always a bit that's left unhedged. If spot prices sort of remain relatively benign, I know that's a big if, as we go into the winter, I know they probably go up a little bit, but relatively benign, is there some room there for some upside on the previous guidance you maybe gave on energy costs, and does that give you some room around pricing, but maintaining the margins, I suppose, as we go into winter? Thanks. Okay, maybe if I take the first one. Yeah. Then you take the second. The bespoke business, like you said, it's done incredibly well. I think one of the things when I look at what the bespoke business has done is they've really, really focused on what I call commercial excellence. It gives me the reassurance that the business has the ability to do it. So, you know, they've been very selective on the type of business they take. They've looked at the overall market and decided the type of customers they want to work with and grown and developed with them, and I think that's largely, how we can kind of put the testament to the performance we see. How far that can go and with an ambition set, we've not arrived at that yet. That's kind of the thing which can be demonstrated by when you really have that kind of rational approach to the market, a positioning, and then a clear commercial strategy to drive forward. I think that's probably, you know, we can see that going forward. How far, I can't comment on that at this stage, but we're certainly looking into that and seeing where we can go with it. We're going to focus on that to come. The other question, Ben, sorry? Yeah, I mean, I think the answer, Harry, is no, I don't think there's much upside. I mean, look, we're already 80% kind of fixed. As we said, that does depend exactly on how much we produce. I think the spot price is set fairly low to this kind of autumn. Beyond the autumn, no one's got a clue. If you get some cold weather in November, that spot price will go through the roof. No, I think our guidance kind of factors in our best estimate of kind of where the energy prices are gonna be for the rest of this year, and any movement on that isn't gonna be that material, 'cause of the 80% we've already fixed. Okay. Alastair, do you want to go to the next slide? Bit of a trick, that one. No worry. Gentleman by the door. Alastair Stewart from Progressive. I'm gonna continue the deflationary trend. I was going for two, but Steven nicked one of my questions. On the, you'll be aware, both of you, that there was a degree of what I call false starts in the industry in the run-up to Part L coming through, and a lot of foundations were put down. Are you getting any sort of anecdotal comment from the house builders that suggest that if things pick up, you know, since there's a slab there already, it'll be quicker to get bricks to them, and things could actually pick up fast earlier in the second half if there is an underlying market pickup? I'll take that one. Maybe you can build on it, Ben, if you've got something to add. Yeah, you're right, there has been this kind of putting of foundations in the ground to kind of preempt some changes in Part L. For sure, I mean, those foundations are there, you could start building out on those quite quickly. That could be a, you know, a potential kind of fast growth back for us, but we're not really. You know, the thing which isn't sure is all those foundations which have been built are gonna be the homes which they're gonna sell in the next three to six months. The market may well change. Inflation rates might mean that first-time buyers don't look for the same type of house or dimensions. They might have some challenges there, but I like your optimism, and I think there's something to come through from that, and let's hope so. We've not kind of bet the farm and staked our H2 on that. The other thing to maybe mention is, you know, in Bison, even though that deadline had passed for the Part L regulation, we still saw sales continue going forward, so that does give us more optimism that things can be, like we said, you know, a little bit better in half two, but not to the levels of expectations we originally thought so. Ben, I don't know if you want to add on that at all. I don't think. I think you've covered it now. Good. Any other questions in the room? No, I think we're good. Maybe online? I don't think so. Let me just double-check. No, nothing online. Look, let me just take this opportunity to thank you, for your interest and your questions, and, I'm sure you agree Forterra's got a great and exciting future ahead of it. Thank you. Thanks, everyone.