Hello, welcome to MJ Gleeson trading update. If you'd like to ask a question during the call, please press star one on your telephone keypad. I'd like to hand the call over to Graham. Please go ahead. Morning. This is Graham Prothero, Chief Executive, I'm joined by Stefan Allanson, our CFO. Thank you very much for joining us this morning, let me summarize what we've announced, then we'll be happy to take your questions. Firstly, on current trading, I'm pleased to say that we've seen resilient trading through the spring selling season, slightly surprisingly, I think. Sales rates have held up well despite dire headlines and some sharp increases in mortgage rates. We've noticed the degree of softening over the last two or three weeks. But net reservation re-reservation rates for the 11 weeks to the April 24th were 0.88 per site per week compared to 0.86 per site per week last year. That excludes, excluding bulk reservations, the rates over the same period were 0.59 compared with 0.64. We have seen modest build in cost inflation since the start of the year, while selling prices for both open market and partnership sales have been broadly stable. In Gleeson Land, you'll have seen that we're making good progress on the sales planned for the current year. Several of those will run into June. For the large sites that we've been telling you about, we were pleased to reach agreement with the highways authority on the technical solution, we now await the formal confirmation that will facilitate completion of the sale. We continue to expect that in the current year, obviously there remains a risk that this falls into the next financial year. Consequently, we expect that full-year profit before exceptional items, which we'll talk about, will be in line with current market consensus. Turning to the restructuring and the exceptional items we've announced. Once Project Transform has been successfully implemented, that of course doesn't mean that we stop looking for opportunities to further improve business efficiency, to reduce unnecessary overhead, and to ensure that investment is focused on those regions and locations where we see optimal prospects for controlled growth. Establishing one Yorkshire region and relocating certain Yorkshire East sites into the Midlands region will substantially improve the efficiency of both of those regions and generate annualized overhead savings of about GBP 0.9 million. Also, importantly, we want to rebalance our investment to include more faster-selling suburban areas. The related costs of approximately GBP 3.1 million, the majority of which are non-cash costs, will be recognized as an exceptional item in the full-year accounts. Our new management teams have identified an additional spend requirement in respect of older completed developments. These are basically issues preventing adoption of roads by the local authorities, which are likely to incur rectification costs over and above the amounts originally accrued. As we work through these issues, we're employing an experienced adoptions manager to manage the works. We expect to establish an exceptional provision in the current year, estimated between GBP 5 million-GBP 7 million, with the costs being incurred over a number of years. Of course, it's very frustrating that we need to do this work. I'm actually really pleased with the determination with which the new management teams have identified and are dealing with this. By making this provision and grasping an issue that should have been dealt with much earlier, Gleeson Homes can now look forward with confidence to capitalize on the significant growth opportunities we see when, of course, the market returns to growth. To summarize, we're pleased to confirm resilient trading performance in what remains an uncertain market environment. It's obviously too early to forecast the impact that events in the Middle East will have on customer confidence, on mortgage affordability, and build cost inflation over the coming months. Although there could be very obvious risks to the 2020- 2027 outturn, particularly if the crisis is prolonged. Naturally, we'll exercise even higher than usual caution in how we manage the business. As always, we'll maintain a sharp focus on operational efficiency and effectiveness to ensure that the business as a whole is in the best shape possible to manage through this period of uncertainty and capitalize on the significant opportunities we see ahead when the market returns to growth. Thanks very much for listening. Now Stefan and I will be happy to take your questions. Thank you very much, sir. Ladies and gentlemen, as a reminder, if you wish to ask questions, please press star one on your telephone keypad. Our very first question this morning is coming from Aynsley Lammin calling from Investec. Go ahead, your line is open. Thanks. Morning, Graham. Morning, Stefan. Sure you're there as well. Morning. Yeah. Morning. Yeah. Morning. Yeah, a couple from me. I guess maybe interested to just hear a bit more color on recent trading. I think, you've been pleased how it's held up, but just interested if you've seen any kind of softening in recent weeks. Have you been working harder in terms of sales incentives and on the pricing front to get that, you know, to maintain that higher, decent sales rate over recent weeks? Any color there would be quite helpful. Just on the kind of exceptional around the adoption issues and the legacy sites, I mean, what's the risk that there's more of that to come across other regions, other sites? Have you done a thorough review? You know, just a bit more color around, I guess, what's causing that and what, why you think that maybe just contained and limited to what you've announced today. Thanks. Thanks, Aynsley. Let's just on recent trading then, really interesting. I had thought, you know, the moment the first bombs dropped, I was, because we obsess over these things, you know, we expected the market to grind to a halt the next day. Of course, you process that a little bit and realize that it doesn't feed through to, if you like, the general consumer conversation quite so quickly. The market really held up pretty well through March and continues to do so. I'm pleasantly surprised each week with the sales that we're achieving. The nuance on that, I would say, April, to use your phrase, we were having to work a bit harder. We have seen, it's particularly in sort of in the middle of April, a softening in visitors and leads. Funnily enough, last week turned up a little bit again. It's absolutely not a buyer's strike, nothing like it. In terms of pricing and incentives, the guys tell me they're working hard, and they are. Actually, incentives still at a reasonable level. I think about 4.4% is what we're- Yeah. ... what we're currently giving away. That's pretty consistent across the year, Aynsley. I would characterize it as more positive than I would have thought, but I'm clearly alert to the risks that may not continue. On the legacy, to your question, I mean, when have we done a thorough review? Yes, we have. It's fortunate that you start with a full population because we know which sites we have where the bonds are still open. Of course, we take out a bond that we will construct that road to appropriate standards. We can't get that bond, we can't relieve that bond until we've handed it over to the local authority. We've got a full population. Typically, and I'm sure you're aware, you know, when you finish the site, you put in place an accrual because it doesn't get finished the day the last labor leaves site. Obviously, it runs on for months and in some cases years before you get that adopted. What has become clear, and it's become clear through the new management teams basically that we've got in place, you're aware that we've changed most of our RMDs and a good number of the teams as well in the regions. These guys have looked at this more objectively and basically reassessed. It's come to my attention really over the last handful of months that Scott said to me, "This is not right. There's a bigger problem here, Graham. The balance sheet provisions are not sufficient." At that point, we said, "Okay. Well, we need to know what the problem is." We have worked hard and scurried around. If you ask me, Aynsley, do I, can I guarantee it's this number? Of course, I can't, because the answer will be site by site, and this will be a project that's going to take us three or four years. It should have been grasped much, much earlier. I think it's, it, you, it's easy for a team to kick the can down the road, pardoning the pun, and sort of say, "Well, we think we can mostly cover that." When you look at it, no, it can't. There's remediation works to be done. There are requirements of the adoption engineer that need to be fulfilled. It needs proactively addressing. We've actually gone as far as hiring a professional, a guy who's made a career out of it. He's an adoptions engineer. He's joining us this month. This will take some years probably to work through. The, we have had the opportunity over the past, I'm gonna say eight weeks, the guys have had very clear instructions to get after this and tell us where they have the problems. I'm not, it's not a wet finger in the air. I've got a list. I know which sites these are. I know what the nature of the, of the problems is. I'm as sure as I can be that we're covered, Aynsley. No, no. Thank you very much. Bit of a long issue as well. Apologies. Yeah. No, thank you. Thank you for your question, sir. We'll now move to Greg Poulton, calling from Singer Capital Markets. Go ahead. Yeah, morning, guys. Good morning. Can you hear me as well, please? Sorry, what was that? Just say good morning, please. Oh, yeah. Sorry. Thanks. There's a second question. Yeah, there's a few questions from me. Just on Gleeson Land, could you talk a bit about what you're seeing in terms of pricing discussions there, please? Second, could you give a bit of color on the emerging picture for build cost inflation and what you're expecting over the next 12 months, please? Lastly, post the restructuring of the Yorkshire division, do you think that now represents a right size Gleeson Homes business, or could other divisions also be into it as? Yeah, that's it. Thanks. Thanks, Greg. Yeah, interesting. Gleeson Land pricing, that's, I mean that's a continuing perpetual discussion because it's evolving. I would say, right now, the last sort of shift you had in pricing was things that, was it when people started factoring in Future Homes and Building Safety Levy. That was more, that was, if you like, a quite a noticeable and specific shift that you would've expected. Gleeson Land, remember, only, I know you know this, only deals in high-quality prime sites. We're at the right end of the market. I would say what we're seeing is probably the caution that you've read in statements from several of our larger peers. We're seeing that in terms of numbers of people who bid for the sites. You know, in a stronger market, when people aren't being cautious, we might get five, six, seven, you know, really credible buyers knocking lumps out of each other to bid for a site. Now it's more likely to be one, two, three. You'll get a long list, but of the people that we focus on and say, "Yeah, they've got the credibility, they've got the checkbook," it won't be all the six, seven, eight normal suspects, as it were. What we're seeing probably slightly less competitive bidding lists. We're seeing a lot more caution and due diligence, which, you know, is the luxury of more of a buyer's market. And we're seeing so cautious and thoughtful pricing, but it's absolutely not a market where you'd say, you know, the land market's collapsed or capitulating. Absolutely not. Yeah. Okay. We know that obviously to our cost in Gleeson Homes. Good sites still very, very competitive. Does that answer your Gleeson Land question, Greg? Yeah, it does. Thanks. Build cost inflation. Well, let me, what I'm gonna do, I'm gonna talk about Yorkshire and then, because Stefan might want to come in on the inflation question, so rather than sort of playing table tennis here. Yorkshire, does that right size the organization? It right sizes the organization for today, Greg. If I'm honest with you, we're already thinking about our sort of strategic thinking is not about shrinking, it's about growing. We still see a good, we still see the underlying opportunity for this business is to grow. We're confident in the market and the commercial opportunity. This I think is about where we focused the business, and if I'm honest, the business had allowed itself to be pushed slightly to the rural margins, if I can put it like that. We will always have a good mix of rural and suburban sites because that is Gleeson heartlands. I think, if I step back over the last probably six, seven, eight years, the business had tended to fill its boots in more of that rural stuff and not focus sufficiently on some of our kind of heartland towns. Think of Nottingham, think of Mansfield, think of St Helens. We're trying to rebalance that focus. That means, you know, you therefore don't really want a strong operation in Hessle right there out on the, on the, on the east coast. It makes absolute sense for overhead control, but also for business focus. If I think, if you ask me about kind of 18 months, two years, you know, we are already thinking hard about where we need to grow. Please don't think we're gonna rush off and open three new offices in Cornwall and what have you. That's not how it works. Adjacencies, satellite offices are very much in contemplation. Great. Very clear. Thank you. On inflation, we have, yeah, modest to date. I think we've seen since the beginning of the year just over 1%. There are other discussions, as you won't be surprised in prospect, which we can see will push, will push up a bit, maybe 1.5%, maybe a bit higher. Stefan, I don't know if you want to put a bit more color on that. Yeah. We've seen very little on trade actually, so subcontractors. Labor rates are pretty flat on where they were, where they ended last calendar year. Almost nothing there. It's, we've seen a little bit on materials, a little bit on plastics particular. What we are seeing is that, there's attempts to put prices up that are being pretty well thwarted, I think, by most house builders, because there's reasonably good stocks and kind of less demand on those supplies. Actually it's been relatively modest. What we have seen as much as some increases on plastics, we've seen surcharges related to higher costs of delivery, which we would hope is temporary. That doesn't mean we're complacent. You know, we are very, very focused on ensuring that we don't suffer any further cost increases, but obviously that is somewhat out of our hands, depending on what happens to price of oil and that's somewhat a geopolitical point. Thank you very much. Thanks, Greg. Thank you so much sir. Next question will be coming from Harry Goad calling from Berenberg. Please go ahead. Hello, Harry. Yeah. Morning. Hi, good morning- Morning ... two questions, please. Firstly, with reference to the land sale, you said, you need to get completed for, to meet that full year 2026 guidance. Can you give any sort of indication of the, the quantum of that? Then the second one, I appreciate it's very early days, but if you're thinking to the year FY 2027 from July, as things currently stand, I mean, are you happy with where consensus numbers are? Do you think it's a year where you'll be able to deliver growth? I mean, I appreciate very early days, but some thoughts on that would be helpful. Thank you. Harry, FY 2027. What I'm going to do is I'm going to take FY 2027 and then I'm going to hand over to Stefan to talk about the quantum on the land sale 'cause I can't remember what I'm allowed to say. We deliberately abstained from trying to guide on 2027, Harry, and you won't be at all surprised on that because frankly, none of us know, and I'm not going to sort of repeat the obvious because as I said in the statement, there are so many potential impacts on demand, customer confidence, mortgage rates. I mean, the mortgage rates is just fascinating because obviously confidence moves more slowly. The mortgage rates seem to can move within a, within hours of a tweet from the president. It's, you know, because it's all futures and what have you, complicated stuff that I don't understand, but it goes straight through into the swap rates and straight. The next thing you know, there's a new mortgage product on the shelf at a corresponding price. That's been moving around. Then of course, the impact on inflation. We don't know how much is already in there and yet to hit us. Calling the impact on our business, both demand and costs is really, really difficult and that's why we are specifically not giving guidance on 2027. Am I happy? Well, I'm as happy as I can be, I'm not going to sit here and bless that number here and now. Sure. Thank you. In terms of the land sale, as we've said in the statement, we're just grinding through the technical approval, and it's that which once we get that unlocks the process through to completion. Stefan, what have we said about the numbers? That large land sale in Gleeson Land, it's not a case of if, it's a case of when. What we've said in previous statements is that the size of the site, it's roughly 50% of the total plots that we expect to sell on the sites we're selling this year. The read across that I think the market has taken from that is that represents roughly 50% of gross profit, and my understanding is your the market's estimate of our gross profit is GBP 12 million. Hence the assumption is it's about GBP 6 million gross profit on that transaction. Got it. That's, we're not unhappy with that read across. Okay. Thank you very much. Thank you so much, sir. We'll now move to Adrian Kearsey of Panmure Liberum Limited. Please go ahead. Your line is open. Morning, guys. Morning, Adrian. Morning. In terms of the Gleeson Homes and the sales, are you seeing any change in sort of product mix that's been bid for by your, acquired by people or in terms of geography, are there any particular areas in your patch that are sort of warmer than others? Are there any areas that are warmer? Not really that I would draw a theme from, Adrian. No, I'm just thinking 'cause obviously I, we obsess over this, so I'm trying to helicopter up from what I saw last week. Definitely, If you like Midlands has been pretty strong demand there. North East has been doing very well. Probably, actually, no, I'm not. It varies from week- to- week. Across the piece, it's been reasonably even, I would say, in terms of- Oh. ...in terms of that demand- Okay. ...has been. I'm just looking at Stefan, but I think we've been generally, we have over the period sold some slightly larger homes so that our, I think our average selling price in this period has been above GBP 210. That won't be the picture for the whole year, obviously, because I think we were GBP 198 at the half year, and I think we're about GBP 202 or something- Yeah. ... across the year. You can see that we have actually been selling, quite a richer product, during this, during this past, what, four months. Okay. Brilliant. You talked earlier about the looking to have more suburban sites within the mix. How quickly will you be evolving the portfolio of Gleeson Homes sites? Should we think of anything in terms of cash investment in the shorter term, or is this something that would evolve over the next two, three, four years? Definitely the latter, Adrian. As you know, it's part of, you know. Spending less on land than the average is very much part of the Gleeson model, and it's how we leverage our, it's how we leverage that working capital to get faster growth out of it. This is not something you shouldn't expect a stampede to Central Manchester. Far from it, this is more, it's definitely the evolution that you describe. As you know, nothing moves sort of, warp speed in house building anyway. It's more of guidance to our land buyers that we what we want them to be looking at. The East Yorkshire decision is quite specific that we had just acquired too many sites down the east coast of Yorkshire. They're lovely sites, and they sell. The problem is you don't want too much of the portfolio skewed to the kind of east coast of Lincoln and of Lincolnshire and Yorkshire. It has got a coast, hasn't it? Yeah. Cumbria. It's a rebalance, over two to three years, Adrian. Okay. Thank you very much. Thank you. That's your question, sir. We'll now move to Charlie Campbell of Stifel. Please go ahead. Yep. Good morning, everyone. Hey, Charlie. Just a question on outlets within homes. Just wondering where you are there, and whether there's any notable changes in planning affecting the pace of that in other direction. It may be too early, but Part Exchange, just wondered if there was anything to say on that and how that was progressing. Thank you. Let me just touch on the last two bits in a quick way on planning, and I'm gonna chip the ball to Stefan to take through the outlets. Part Ex, look, it's absolutely the right product for this market, and you don't need me to reiterate the 11-year high in homes for sale. Don't know if you saw the Savills piece in the FT this morning. A quarter of a million rental homes, ex-rental homes put on the market in the last 12 months. I mean, it, that's, it is quite a buyer's market out there in terms, in terms of homes. That being the case, Part Ex is a great, is a great product for us. We brought it in. Scott and Simon did really well to get that in, at the end of December for the Christmas and January selling season. It's worked well for us. We are being very cautious, Charlie, you don't need me to reassure you on that, about what we'll, what we'll take on, how long we'll hold it. It's worked very well for us. We are, actually, if I'm honest, just putting the brakes on it now because we haven't got this stuff. I, you know, I want to do well. You've sold it before it even hits your balance sheet. So far we've been pretty successful at that. We're just choking it back a little bit because I don't want it hitting my balance sheet, is the honest answer. On planning, I'll just give you one minute, and then I'll hand over to Stefan. The picture is, it's definitely evolving in that at the strategic level you are definitely seeing the effects of the NPPF, that is creating some strange dynamics in some local authorities, where they've effectively been told to increase their allocations. In some cases have actually kind of withdrawn their local plan because they can't get there, which then creates open season for planning applications. You've got some very distorting effects, where your risk actually becomes a surfeit of applications because the situation with the local authority is that They don't have a local plan, everybody's bunging in speculative applications and appeals and so on. That can actually saturate a market. That, gonna come back to, that's a sort of two and three year issue because that's the start of the process. Sadly, same broken record, for Gleeson Homes actually trying to get a planning permission to put a spade in the ground. That is still a resourcing issue in local authorities, and it is still as tough and as difficult as ever. Sorry, no change from me there. Stefan, outlets. We're building on 65 outlets at the moment, which is broadly where we were end of December. I think we were at 66. We have sales outlets of 53, or 53 sales outlets, which is where we were in December. We do expect that to probably reduce by a couple of outlets by the end of the year because we had a number of sites to close. We are opening new sales outlets over the next couple of months, but not as many as we're closing. You'll remember back in February we said that we were gonna be, our average sales outlets this year were gonna be slightly lower at 55. I think that's probably gonna be 56 at an average this year. We said that our average outlets next year would be lower still at about 55. I think we're still expecting to be roughly 55, might be a little lower than that, but that's where we expect to be. Yes. Thanks very much. Very clear. Thank you. Thank you very much, Charlie. Ladies and gentlemen, if you have any questions or follow-up questions, please press star one at this time. We'll now go to Alastair Stewart of Progressive Equity Research. Please go ahead. Morning, Graham and Stefan. A follow-on question actually from Greg's question on land. It's a bit subjective, but do you see any discernible pattern emerging from, you know, those five, six, seven bidders per site going down to one, two, three now? Is it a case of previously you'd get all of the top four or five national house builders bidding and they're just being a bit more cautious and maybe one or two of the regional or the private equity guys in the old mix, and now is it entirely a shortened version of the national house builders and the private equity and regional players have exited? Is there any, as I say, a discernible pattern there? A good question, Alastair. I don't know, sadly. I understand exactly what you're asking me. It is just, people are being a bit more cautious. It feels to me a little bit like just after I joined in the sort of Truss quartering period when, you know, and things went into spasm a little bit and the bidder lists thinned out. In general, you still had one or two of the majors, one or two of the PE players, and a couple of regionals, and it does obviously depend on the particular mix of sites that you're marketing at a particular time. I would, I've not seen, you don't need me to remind you, I've not seen a boom time since I've, since I've been here. In fact, I can't, I can't remember one. We've not been in that place whereby, as I say, you have three of the majors knocking lumps out of each other to grab a particular site, and we haven't had, we haven't had that joy. It's probably just, it's probably cooled back a little bit to we will get one, two, three of the majors, and again, a couple of PE and a couple of regionals. No, it's not a, it's not a particular constituency, it's just a general, generally a little bit more cautious and people are, you know, look at their portfolio and think, "Yeah. We've got that one 5 mi away, so actually, if we're generally looking to spend a bit less, then we won't bid for that one as well." Whereas in a stronger market, they just say, "Yeah. Give me, give me, give me the land. I need it, I need it." You'll end up with more bidders on the list. Great. That's very clear. Thank you so much. Thank you very much, sir. Ladies and gentlemen, as a final reminder, if you have any questions or follow-up questions, please press star one at this time. Okay. We don't appear to have any further questions. I'd like to hand call back over to Graham and the management team for any additional or closing remarks. Thank you. Very good. Thank you very much. Thanks for listening. Thanks for your questions. Slightly disappointed nobody's asked me about Crystal Palace. There we go. Have a great Friday and enjoy the sunshine. Thank you. Thank you very much, sir.