Good morning, everyone. Welcome to the presentation of our half year results for the six months ending 31 December 2022. Presenting with me today is our Group CFO, Bevan McKenzie. The topics we plan to cover are shown in the agenda on slide 3. I'll provide an overview of the half year results. Bevan will provide a bit more detail on the financial performance and the outlook for the second half. I'll then sum up with how we're planning and thinking about FY23 and beyond. Finally, we'll run through your questions at the end. Turning to slide 4. A summary of the half year results. We had a solid first half. EBIT increased year-on-year to NZD 360 million. This was underpinned by good growth in margins and material in our materials and distribution businesses, offsetting softer residential house sale volumes. Net earnings, however, were NZD 92 million, and this follows the impacts of the Convention Centre provisions we communicated in December. Return on Funds Employed was at 17.8%, was ahead of target, and our balance sheet remained strong. Against this backdrop, the board has declared a fully imputed interim dividend of NZD 0.18 per share. We continue to make good progress on around NZD 700 million of committed growth investments, and will now start to see earnings from these drop to the bottom line. This will add around NZD 25 million of run rate EBIT in FY 2024 and grow from there until fully mature in about 3 years' time. Despite the strong performance of our business through the first half, we have modified our full year EBIT guidance to a range of NZD 800 million-NZD 855 million. While we continue to target the top end of this range, the trading impacts from the extreme wet weather events in New Zealand through January and February have necessitated a more conservative guidance position. Finally, we remain very focused on being prepared for a softer FY 2024, and I'll cover this in a bit more detail at the end of the presentation. Overall, group revenue, profit, and profit margins grew over the comparative six months as shown on slide 5. The performance of our materials and distribution businesses on both sides of the Tasman was one of the key features of the half year. Combined, these businesses produced an NZD 83 million profit improvement on the prior half and saw margins expand from 7.4% to 8.9%. Meanwhile, after two years of very strong growth, New Zealand house sales were softer as expected, and industrial development earnings returned to a more typical run rate. In total, this resulted in EBIT being NZD 63 million lower than the prior half for our residential and development businesses. The construction division returned to first half profitability, albeit it was impacted by the additional provision on the Convention Centre project. As mentioned, group return on funds eased slightly to 17.8% as we invested through the half, but it continues to remain in line with our intent to keep it above 15%. Moving to slide 6 and onto cash and leverage. Cash flows from the material and distribution divisions were strong at just over NZD 200 million. This was offset by outflows to rebuild our land and housing stock following the significant drawdowns that occurred through FY 2021 and 2022. The net result of this and the growth CapEx investments we made through the half is that net debt increased as flagged to NZD 1.4 billion and leverage ratios moved to 1.25 times. All this maintains our strong balance sheet position with available liquidity at the end of the half year sitting at NZD 1.1 billion. On slide 7, after adjusting for the construction provisions, we show that net earnings for the half were NZD 92 million. Earnings per share before significant items, which is the basis upon which we pay our dividend, remained solid at NZD 0.259 per share. Against this backdrop, the board declared a fully imputed interim dividend of NZD 0.18 per share to be paid in April. Our ongoing good progress on making our workplace safer and in reducing our carbon emissions is shown on slide 8. Protect, our multi-year safety program, continues to drive improvements. At the half year, we recorded injury frequency rates of 3.16. This is a 24% reduction from the comparative period. Pleasingly, 94% of our sites remained injury-free through the half. We continue to make very good progress on reducing our carbon emissions, getting more of our products sustainable, and sub-substituting the fuels we use with sustainable options. These efforts are being independently recognized, and during the half, we received an improved rating in our most recent climate change assessment by the CDP and were again included in the Australian Dow Jones Sustainability Australia Index. Fletcher Building was also selected as a member of the 2023 Sustainability Yearbook for the first time, acknowledging our sustainability performance in the top 15% of companies worldwide in our industry. Slide 9 highlights our performance through the half across all of our divisions. The uplift in profits and margins across all of our materials and distribution businesses was a highlight. This was delivered through an ongoing focus on good operational basics as well as the benefits from the various growth initiatives starting to flow through to the bottom line. The performance in Australia is worth a particular mention, with the division now achieving sustainable EBIT margins above 5%. While down half on half, our residential development division performed well in the face of a softer New Zealand housing market. The combination of the quality of the communities and product we develop, with a skew towards a lower average unit price, has meant we continue to sell reasonable volumes at good margins. As I've mentioned in the past, while the market remains softer, we'll adjust our capital envelope and sale volume expectations to suit the market, and only return to a growth focus when the market conditions allow. In construction, it was nice to return to an underlying profit in the first half. This was despite the unusually wet weather and ongoing constrained labor market. The order book remains strong, and only two legacy projects now remain to be completed. There are more details on the division in the appendix to this presentation, as well as in our interim report published today. I'll now hand over to Bevan, who will take you through the details of our financial results for the half year. Thanks, Ross. Kia ora koutou. Good morning, everyone. Turning to slide 11 on the income statement, a couple of things I'd point to here. Input cost inflation has remained a feature throughout the half year and has averaged around 10% per annum compared to half year 2022. The ongoing focus on cost recovery through pricing, though, has been effective. This can be seen in gross margins in the materials and distribution divisions lifting by 180 basis points. Funding costs of NZD 39 million have risen on higher borrowings and variable interest rates as flagged, and we remain in line with our prior guidance for full year FY2023 funding costs of NZD 85 million-NZD 90 million. The significant items charges here of NZD 154 million relate almost entirely to the additional provision on the NZICC project, which I'll touch on more shortly. Finally here, tax expense was lower due to the significant items charges, but excluding these, the effective tax rate was in line with the expectations at 26.5%. Turning to cash flows on slide 12. Ross has mentioned, pleasingly, the materials and distribution divisions delivered robust cash flows of NZD 206 million. The key feature of the cash flow result in the half was the expected rebuild of land and housing stocks after a material drawdown of these in FY21 and 22. Given the softer housing market, we have paused work on some housing developments, and we've entered into very few new land commitments through calendar 2022. We expect this focus on working capital management will mean a material cash inflow in the residential and development division in the second half. Cash tax payments in the half were NZD 154 million. We continue to expect that for the full year, these cash tax payments will be around NZD 190 million. Slide 13 provides some more detail on the working capital movements. In residential and development, approximately NZD 200 million of the movement was from prior land commitments brought on balance sheet. About NZD 100 million was from the rebuild of housing inventories. As at December, we had around 75 completed houses in stock, which is about the right level for the business. Which is up from virtually nil completed houses that we saw through the past 2 years. In our materials and distribution divisions, debt to days were up only slightly and bad debt levels have remained low, though our credit teams remain very focused on this as we anticipate a softening market into FY 2024. On inventory, we have the usual seasonal uplift in the half year, which we expect to unwind in the second half of FY 2023, and we then expect further inventory reductions in FY 2024 and therefore working capital inflows in these divisions. Finally here, the creditor movement in the half was from the higher balances at June, returning to more normal levels in December, with underlying supplier credit terms remaining unchanged. Turning to the NZICC project on slide 14. As we announced in December, construction progress on site continues to be good. Key program milestones are being met. We remain on track for our target completion in late calendar 2024. The complexity of the rebuild, and particularly the repair of water damage to steel coatings, means that total remediation costs for the project are now expected to exceed our insurance limits. A greater number of project resources to complete the works, combined with the underlying inflation of labor, trade, and material costs, has led to the provision. In terms of the cash flow impact, we expect this to be around 20% in the second half of FY23, around 50% in FY24, and the balance in FY25. The provision is tax deductible. The impact on cash tax payments follows broadly the same cash profile as just described. On slide 15, our base CapEx of NZD 200 million-NZD 250 million per year remains well controlled. As Ross has highlighted, we're also making strong progress on our program of above base growth investments. For the full year FY 2023, and inclusive of both the Tumu and Waipapa acquisitions, we expect this growth CapEx to be around NZD 400 million, with the additional NZD 300 million to flow across the FY 2024-2026 years. This total growth CapEx is up from our previous guidance of around NZD 500 million, that's mainly due to the addition of the Waipapa timber acquisition, plus a small increment on the other projects as we've refined our plans in those areas. We do continue to expect ROFEs at or above 15% on all these growth investments. Finally, the Winstone Wallboards plant remains on time and on budget and on track to open in late FY 2023 as planned. We will keep our current Auckland plant open for a few months, and then this well-located site will be repurposed through 2024 for our distribution operations. Slide 16, closing net debt for the half was NZD 1.4 billion, with the increase in the period due to the expected investments in land and housing stocks, CapEx, and the tax and dividend payments. On slide 17, as previously guided, this has resulted in the leverage ratio for the group of 1.25 times at the end of the half. For the full year, we continue to expect the leverage ratio to remain at the lower end of our target range. This is from strong second half trading cash flows and the growth CapEx investments being the 2 key drivers. Slide 18 shows that the group's funding profile remains strong, with around NZD 2.5 billion of total credit facilities. During the half year, we extended our syndicate bank facility by around NZD 700 million, which means the group's total liquidity remains healthy at NZD 1.1 billion. Our average interest rate is 5.2%. Currently 53% of all borrowings are at fixed interest rates. On slide 19, our returns to shareholders remain strong. The board has declared a fully imputed interim dividend of NZD 0.18 per share, which equates to a 69% payout ratio and reflects the ongoing confidence into the underlying performance of the business. On slide 20, we provide more detail on our approach to managing the residential and development business. As Ross has highlighted, in a much softer New Zealand housing market, the business continues to deliver decent margins, sales volumes and returns. Despite prices being down around 10%-15% versus the peak, our housing margins are still at around the 20% level. In terms of volume, the left-hand chart here shows that so far in FY23, we've sold or contracted a total of around 400 units. This comprises the 189 units that we took to profit in the first half, plus an additional 200 contracts we have in hand today. This reflects the quality of the division's product offering and also that we are pointed into the deepest part of the housing market. In particular, the business has good stocks and price points below NZD 1 million in Auckland, which has been the most resilient market segment and has represented around two-thirds of our sales year to date. For the full year, we're targeting around 800 unit sales. While the market remains softer, we will adjust our capital envelope and our sales volume expectations accordingly. We therefore expect funds invested in the division to reduce to around NZD 800 million at the full year, which will produce a material cash inflow in the second half and will mean that our ROFEs for this division remain well north of 15%. Finally, on land, we are entering into very few new commitments. We're in a good position to do so as we have a land pipeline in place that we can draw down on. These prior land commitments have been contracted at good rates. This is demonstrated by the refreshed independent valuation of our land on balance sheet. Consistent with the position we talked to at our Investor Day in June, this land continues to be valued at around NZD 350 million higher than our book value and will support our margin levels even in a softer market. In summary, the group's results in this period demonstrate good ongoing levels of performance, particularly at the margin line, as well as an ability to adapt to the market reality, especially in the housing business. For the full year, our group earnings guidance is a range of NZD 800 million-NZD 855 million. As we announced on Monday, the previous upside above NZD 855 million is now unlikely due to the trading impact of the adverse weather events in the North Island of New Zealand through January and February. We continue to target the top end of this range, and we've laid out here on the slide the key assumptions behind that target. The two key drivers of the result will be market conditions. Firstly, in the materials and distribution divisions, we've assumed trading volumes for the balance of the year in line with the first half, which would result in a roughly 48%, 52% first half/second half EBIT split, which is broadly in line with the typical weighting for these divisions. The second key driver, as we've highlighted, is house sales levels, with the top end of the guidance range, assuming we get to roughly 800 sales. Finally, we expect strong second half cash flows due to the timing of earnings and the unwind of inventories in both the residential and development and the materials and distribution divisions. I'll now hand back to Ross to cover off the longer term outlook. Thanks, Bevan. Our overarching theme in today's presentation is that we have Fletcher Building well positioned to perform through what will be a more uncertain market. I cover the key points on this on slide 23. Firstly, we expect EBIT for the full year to be in the range of NZD 800 million-NZD 855 million. Secondly, it's likely that the softer housing market will finally flow through to lower volumes in our materials and distribution businesses in FY 2024. As such, we are moving now to ensure we set our cost base for this, with our aim being to hold margins close to the present FY 2023 levels despite this softening. Finally, we continue to look through the cycle, and our growth investments will remain a key area of focus. EBIT run rate benefits are now starting to drop to the bottom line and will continue to grow in the years ahead. I think slide 24 sums up this overall position nicely across five key areas. As mentioned, we expect to see solid profit growth in FY 2023. We are well positioned for a soft FY 2024 with well-established cost control and operational disciplines across the group. We have an established pipeline of growth opportunities that are starting to mature in bottom line profit increases and will grow progressively over the coming years and be in higher margin areas. Off the back of this, we are confident we'll soon have the business positioned to deliver sustainable through the cycle margins of 9%-10%. Our financial position is strong, and we intend to keep it that way. With that, I'll now hand back to the operator to run through your questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your first question comes from Daniel Kang from CLSA. Please go ahead. , everyone. Ross, I just wanted to ask your thoughts on channel inventories. I guess some industry peers recently indicated that the ANZ or Australian New Zealand markets saw some significant channel destocking over the first half. Just your thoughts on that and whether you feel that has played out. Yeah, look, we. Same thing. Broadly, I think there's a few areas, but it's broadly played out through the last half and the first half of the year. There's still a few areas. Most of our inventory where it's a bit toppy is really due to more normal seasonal fluctuations, which we think will sort themselves out as we get into the second half, which is what we flagged. I think we're just about through the destocking in most areas. All right. In terms of inflationary pressures, are you seeing much signs of any easing in any particular areas you'd like to highlight? I think it will ease, but I can't really point to. Yeah, we're sort of about, I think, across the board through the last 12 months, sort of about 10% in the building product space. And I think it will start to ease and some of the commodity cycles are moving around a bit, but I can't really point to a lot of it yet. It's more of an expectation than. We'll have to sort of let the next 6-12 months run to see that visibly occur. My expectation would be to start to ease. Thank you, Ross. I'll pass around. Thank you. Your next question comes from Lisa Huynh from J.P. Morgan. Please go ahead. Hi. Morning, guys. Just on that FY24 volume guidance is down 10%-15% next year. Can you just walk us through what you're assuming for, say, consents and how confident you are around that number, given FY24 hasn't even started yet? Yeah, okay. I mean, well, look, might come back to the confidence, but I'll come back to that at the end. In the breadth, the broad, and this applies pretty well in both New Zealand and Australia. Infrastructure looks pretty solid, and so does the non-res or commercial space. Solid may be off a little bit, so they're give or take a wash, sort of is the way I'd characterize them. You get into residential, and what we're really saying with where we think it'll go, it's been running at around in New Zealand, around Yeah, the volume or work put in place around We've always talked about the 37-ish sort of thousand houses per annum. We expect that to come back to more, what I call mid-cycle levels of 30,000-31,000. The consents are a little bit confusing. I mean, we did see them drop off a little bit in the December on December, but they're just not all going to get built. It's a bit hard to work out the New Zealand consents because we've got the code changes coming up and How much of that's being rushed through to get ahead of some of those code changes is again a question. But the thing we're looking at to give us a sense of confidence, whatever you wanna call it, of those residential consents is we just look at our own residential business. We thought we'd do 1,100 this year. We're doing about 800. That's about 20%-30% down. We're seeing it in our customer base. We're seeing it in our frame and truss orders. That's sort of what we're seeing in what I call our lead indicators. It'll I think it'll be there or thereabouts. That is what when you blend all that up, it gets to the 10,000-20,000, Sorry, let me say that again. That gets us to the 10%-15% down overall because it is a blend, and it's a similar dynamic in Australia. If you sort of say Australia has been above the 2,000s, it'll probably get back to the 180, and in terms of consents, that is how we're thinking of the volumes as well. Overall, we can sort of see that. When you talk to confidence, it's our best guess. You know, what we're trying to do is to be pretty authentic in our own thinking with it, so we make sure we're positioned for it and not sort of kid ourselves it's going to be more of the same. That's how I'd characterize it. No, I appreciate the answer, and, you know, I understand it's still a best guess at the moment. I guess in terms of the flexibility of the cost base in a downturn, you know, when we spoke last, spoke at the Investor Day, you had that chart of EBITDA margins across the businesses where, you know, the majority of the businesses, their EBITDA margins were above the industry median. Can you just make a comment around, you know, fixed and variable costs, how that kind of compares, and how that kind of plays out in a downturn as well? Yeah, sure. Lisa, good morning. Yeah, this has been one of the really strong areas of the business performance, getting that fixed cost base in really good shape. There's probably a little bit more there, Lisa, that we can do, but what you're gonna see principally is the flexing of the variable cost base. If you look at the four big divisions, there's sort of 76% variable, 24%, 25%-ish fixed. You've got quite a big variable base there. Within that base, particularly in your operating labor base, you've got about 10% of your total labor, which is either contract, temp, or overtime. What the teams are doing is they're making sure, you know, in a couple of our businesses, we're already doing this, we are moving to flex that operating labor base, your shift patterns, et cetera, to adapt to the volumes that you need for the market environment. That's where, you know, the team is really well. Set out. As I say, a little bit in the fixed base and the discretionary, but it's mainly about adapting on the, on the variable line. That's just the fruits of the work that the team has done over the past few years. Okay. No, that sounds good. That's a helpful color. Thanks, Bevan. Thanks, guys. Thank you. Your next question comes from Simon Thackray from Jefferies. Please go ahead. Morning, Ross. Morning, Bevan. I've got a couple of questions. If we just dig into the resi, I just wanted a couple of points of clarification. 189 unit sales, which was, which is down 32% year-on-year. You said in the release, 300 were contracted the first half of 2023. Then you note in your report 388 sales agreements at the end of January. Then, Bevan, I think you just said 400. I don't know if you were rounding or you were implying that you'd sold an extra 12 in February. I'll just start there. I haven't been out this morning and sold 12, Simon. No, that was rounding. We've done 388 at the end of January. You know. Okay, cool. I think where you go then, you know, gross margins in Stephen's world, he's doing gross margins of NZD 200-NZD 250. Kane, obviously in the EBIT per house that your numbers will give you in the first half is a little bit lower. That's just, you know, you got slightly lower leverage in that first half on the units taken to profit. Yeah, to get to that full year number, if you're doing NZD 200-NZD 250 of gross margin with the balance. We need to sell, Simon, about 20-22 a week from here, and we've been doing slightly less than that year to date. You've got to get a little bit of an uptick. You know, it's certainly, it's certainly achievable. Okay. That's, that's helpful. Then just if we, if we talk about the underlying interest in the resi, I know we've got 'cause we've got a net contracted year-to-date number of 388, but how does the cancellation rate look now, say, versus the long run average or even versus three months ago? Oh, it's been very steady. You know, you get the odd dropout, but they're quite rare. You might get one a week on average that drops out. Obviously, there's been a, you know, a few more being signed up on a conditional basis, particularly on finance. Again, it goes to the quality of the product and the part of the market that Steve has pointed in. The odd one, Simon, it certainly hasn't picked up. Generally, when people get committed with a conditional agreement on Steve's homes, they complete. Okay. If, if I just take the top line, the revenue, whether Ross or Bevan, you can talk to this, the contribution of volume versus price in the first half 2023. With the observed inflation, what further sort of key price rises are in the market for this year? The final wrap on that pricing question is with the severe weather disruptions in Auckland, does that have any impact on your expected price realization? Do you need to repoint capacity for repair and rebuild away from the existing pipeline or do you think it will have any impact whatsoever? Again, in Steve's division, prices, we're very much following the market, Simon. Our prices are down just north of 10%. The 12%, 13% versus the peak, which was late 2022. Oh, sorry, Bevan. I was talking more across the broader materials, portfolio and distribution portfolio. Apologies, Simon. Both of us- Apology getting enthusiastic on resi. what you've seen on, what you've seen on price is, you know, we've more than recovered that inflation. The average price increases across the materials and distribution businesses have been in that 10%, just above 10% per annum. What we're very focused on is flexing that to the input cost line coming through. As Ross said before, we expect to have a bit more inflation, so you can expect to see more price, I think, coming into those business. I don't think you'll be at double-digit levels. I think you're probably gonna be more in your mid-single digits, Simon. And you're obviously, you know, as the market comes off, making sure you adapt that to the demand profile that is there. In terms of the impact of the weather events, I don't think it's gonna have much of an impact on price. Look, the teams have done an outstanding job, both in late Jan and in recent days. The impact has been significant across the North Island of New Zealand. The teams have scrambled really well. That will create some work, but our expectation is that that's probably gonna take some time to come through, and it won't be, it won't be overly significant in the, in the grand scheme. It'll probably smooth volumes heading into FY 2024. Again, a bit of time before it, before it flows. Okay, that's great. The final question is just on Australia, which was strong sequential improvement in the EBIT margin. Back in the Investor Day, we talked to 200 to 300 basis points of improvement over the medium term. Just digging into the confidence on that target against the market backdrop. Between the good work that's already been done with insulation, where will the heavy lifting come from across sort of plumbing, Iplex, Stramit, and Laminex going forward. Yeah to get to that, margin target? I'll answer that to prove I'm still here, I will make the comment it was good to see Bevan get caught with rounding. That's usually my space. It was very satisfying, I'll move on and answer the question and stop filibustering. The way I think of the margins in the overall Australian business now is I'm confident that we've got them above 5% sustainably. As we look through the sort of market outlook, that's what we're thinking. You know, we'll be five or above as we think about the coming FY 2024 year. We're also still Focused on going the next leg. The way I think about the Australian business has been, you know, a good job by the team. We've been focused on getting to this first milestone. We're there. We wanna keep them there, even if this market softens a little bit, but then we're really actively doing things that'll allows us to then take it that next leg and go after that 200-300 basis points. It broadly, I think it's good to call out insulation. I think they've done a great job and there's probably a bit more there. The heavy lifting of where it goes from here will be in the Tradelink and the Laminex further improvements and obviously Stramit. It hasn't really moved in terms of what we talked about the investment day. You know? There's more we can get in Laminex as we think about profit segments and where we grow it. Tradelink, we've got that goal in the plumbing distribution to add, you know, 5 to 100 basis points each year as we improve from here, and that's still the plan, and it's still the trajectory we're looking at. And Stramit again and again, there's improvement opportunities just as we, you know, focus on those higher margin categories around just the basic steel roofing products. There's no real change, and the only thing that will happen through the 2024 year, if it's a bit softer, is the focus on just that variable cost element and making sure we hold onto those margin improvements we've made today. That's great, gentlemen. Thank you. I'll hand it on. Thank you. Your next question comes from Keith Chau from MST Marquee. Please go ahead. Good morning, Ross. Good morning, Bevan. First question, just on guidance. I think your NZD $700 million of EBIT expected for the materials and distribution businesses implies a seasonality of about 48%-52% for the full year at the EBIT level. I'm just keen to understand, given the discussion around a declining profile of demand going into FY2024, but perhaps more significantly already the weakening seen through your residential home sales, and also given the weather that was seen at the start of this year, what are your assumptions in that business actually still being able to do a normal seasonal skew to FY2023 from an earnings perspective? If you can give us some color around that. Yeah. First off the bat, that would be good. Thank you. Well, look, the way I'd characterize it is, you know, the weather is a little bit of a headwind, fundamentally the dynamic of the capacity constraints still playing out in what I call the volume of work being put in place is still real. Not that I really. You know, as Bevan mentioned, when you think of the, there'll be a bit of elongation of that probably as we get into the April/May/June as some of the repair work sort of actually gets into the channel. You can't predict this precisely, but and that's why we've put the range out there. Our expectation is in the volumetric part of our business, that backlog and that bit of extra work will most likely hold the volumes up there or thereabouts. That's what gives us the confidence, even despite the we-weather, that give or take, we should still see the 48, 52 split. The reason then we're sort of pointing to that can't keep going on because the volume of housing is going down, and we're seeing it in our own residential business, but we're also seeing it in where we provide product into civil works for subdivisions. We're. As I said, the frame and truss. You can actually see the future activity coming off, back to what I call those mid-cycle levels of around 30,000-31,000. That's why it's hard to pick exactly which month that plays out. I mean, I wish my crystal ball was that good, hence why we've ended up at a range. I think we'll be okay, for the balance of the second half before we start to see it. Okay. Thanks, Ross. Understood. Just to follow up on that and, you know, this is a discussion point we had in December, but the fourth quarter visibility, any improvement in that given we're now in February? I know we talked about it back in December, but any update on fourth quarter visibility given the significance of that quarter to earnings would be good. Thank you. Look, the work pipelines look solid. You talk to your customers out there, Keith, and the work is there. That, that's what underpins that top of the guidance range assumption of volumes in line with the first half, and we get there. The work is there. If it gets drawn down on and... You know, when you're looking at your splits, the other factor to consider is that the first half of the year, not just Jan, Feb, the first half has been very wet. You think of the delay to the roading season in New Zealand, it really didn't get going. There's a lot of work to be done. Your customers' orders books are there. Sitting here today, we've got, you know, reasonable confidence around that. We just need to see it get drawn down on and play out. We need the, candidly, heavens to stop opening. We'll be able to get some more work done. Okay. Thanks, Bevan. Perhaps just to follow up while you've got the mic. Just on the cash generation from the resi business, it looks like from the slide, the net change in cash is NZD 100 million. Sorry, the net change in funds employed is about NZD 100 million half on half for that residential division, I'm rounding there also. Are there any revaluations assumed in that half on half movement, which means that that NZD 100 million change in capital employed is not a good proxy for cash movement? No. There's a very small amount in our Vivid Living business, but it's not material. We'll both be in our rounding there, Keith Chau. Yeah, if you're taking earnings plus your net change in working capital, you'll get to a good proxy for the cash in the second half. That, you know, you've definitely had a build in the first. You'll see unwind in the second, so it'll be a good cash from Stephen Hudson in the second half. The unwind of working capital in FY 2024, any inkling on that? Sitting here today, we've got about 80 days of stock across the four material and distribution divisions. We'll probably exit this year more at a 75 type level. You see some of it coming through there, which I referred to earlier. I would expect the business to be getting back to our normalized total working capital more like a 70 working day. You're gonna be taking, I would say, probably, you know, a few more days out of it, and then you'll obviously have as the revenues come off, you'll get that natural flow down. We've always said about this business, when you enter into that softening period, the working capital unwind in those four big divisions is one of the key things that you see. We're confident that you'll get that. You know, we built stock during COVID. We did so for supply chain resilience. The disciplines have remained very strong. We see every reason why that'll flow in 2024. Okay, that's great. Thanks very much. Thank you. Your next question comes from Grant Swanepoel from Jarden. Please go ahead. Good morning, team. Just some quick questions. Ross, I know it's a belaying point, a blaring point, but you indicate that you expect NZ's housing starts to perform just 16% from 37,000 to 31. Can you just link that up with your comment that you expected 1,100 houses this year and just 800 to be built, was down 30%? Why only half the fall for next year? I'm just giving you an indication. I mean, it's not that precise. Some of those volumes we deliberately just stopped, you know, for various reasons. I was just making the point there, Grant, that, you know, you can see as we look at all those data points, that's just how we start to think about it. We can sort of see where our own volumes are settling now at around give or take 800, and that feels like what it will be in the next year as well. As, as I think Steve and I both mentioned, then you just look at our frame and truss estimates and some of those other lead indicators and how the percentage they're off, and they sort of lead to that more going from the 37 down to the 30,000-31,000. You know, they're not precise numbers because I'm not even sure was it 37 exactly getting built, but that's sort of the delta we're seeing as we just cross-reference the things we can and, you know. It's part what we see, part anecdotal. Yeah. Thanks. And then land development in your second half, are you still forecasting NZD 25 million in your guidance or just NZD 9 million in the second half? Look, it might be We're sort of pointing to the normal run rate, but it might be a little bit higher than that. Okay. My final question, I know the NZICC thing you've now accounted for. Looking for data points in the industry, we're getting a lot of feedback that there's something odd with the Puhoi to Warkworth contract. Can you give some color that that is still on track to be done on budget, and that we're not gonna get an update in the next month or so? Lord knows what you mean by on budget. The point I'd make is that in saying that, you know, the costs on the project are higher because of the COVID delays that we've experienced, which is subject to a claim, and we've talked about that in disclosures. Our expectation is that claim will make us whole because of the confidence we have in its veracity and the substance of it. You know, they paid the first one in the first COVID lockdown, and then we've got to work through and negotiate the second one. We've got a good precedent there, and we've just got to work through it. If I go to the forecast cost, which is the key thing, we have a lot of confidence on that because broadly, the physical works on the road are complete. What we're in mostly up there now is just the QA handover process. As a fun fact, through the first flood event, you know, the police commandeered the road and we opened it and we had traffic going up and down it. You can drive the full length of the road. It's got line markings, barriers there. We really are in a QA process to hand it over, give or take. So confidence on the forecast cost is high. Yes, we have a claim to negotiate with Waka kotahi, which we've flagged and which we believe and are confident is within the provisions we've talked about in the round. That's how I'd characterize it. Well, that's very helpful. Thanks so much for that. It does clear it up. That's my question. Thank you. Thank you. Your next question comes from Stephen Hudson from Macquarie Securities. Please go ahead. Hi, Ross and Bev. Just three from me. Just on the residential business, you've updated the market value there. Just wondered if you can give us some reason for, you know, why that unrealized profit has stayed constant at NZD 350, in spite of obviously, you know, changing market dynamics. Whether or not the off-balance sheet assets, if you call it that, you know, we might sort of see a similar kind of dollar to unit unrealized profit on the off-balance sheet items. Second question on residential, just wondering about the 190 or the 189, 388 split between settled sales and contracted but unsettled sales. Is that a normal sort of split for this time of year? Then the third question is just on energy costs. Can you give us a feel for your sort of coal, electricity, gas costs across the business, given the volatility in those segments, and what, if any, hedge position, benefits you've gained this period? Sure, Steve, good morning. Resi, the market values you sell the delta between market and book is unchanged at NZD 350 million. You get in your helicopter, the way you look at that, it means that despite obviously the market coming back, you know, 10%-15% on house prices, land's probably done that as well. It means that the land that Steve and the team have contracted have broadly been brought on in the first half at market value. Land price is back. The team has done a good job of buying in the right areas at good value, therefore, we've held that gain. It speaks to... Again, it speaks to the model that Steve and the team run and the efficacy of it. We don't value the off-balance sheet. I can't comment on that. My expectation would be, at the very least, it's at book was gonna equal market. As we bring it on, we'll continue to update through the results at the full year. Yes, the split of contracted versus what we have in the bank in terms of sold volumes and resi is about normal. The key thing, again, as I mentioned to Simon's question, is that you gotta believe we sell about 20 more per week for the rest of the year, and we've been running at about 16. That's the level of uplift you've gotta believe there. In terms of energy costs, year-on-year, Steven, energy costs are slightly favorable in the electricity space. You've obviously seen spot rates come down quite materially year-to-date. We had hedge positions in place. On average, we're paying in New Zealand about 170 a megawatt hour pre-our line fee, which is, as I say, slightly down on last year. In Nick's world, coal is obviously increased material. I think coal costs globally are about up 40%. What Nick's been able to do is move to a lower calorific value coal, and he's been able to do that because of our tire, our fuel from tire substitution, which means you can blend them. It again points to, you know, when you get these projects up and running, it's meant that the cost impulse from coal has actually been quite low. It's been a couple of million NZD year-on-year for Nick. In Australia, it's been pretty steady year-on-year. We've had slightly favorable movements in our electricity costs. Gas has gone slightly the other way. Broadly, those two net each other out. The reason we're in that position in Australia is that the work that Matt and the team over there did to secure forwards, this is going back a couple of years, meant that we haven't been exposed to those big spikes in electricity that some others have. I hope I covered all of your questions. You did. Thanks, Ben. Thank you. Your next question comes from Brooke Campbell-Crawford from Barrenjoey. Please go ahead. Morning. Thanks for taking my question. Just one for the core materials and distribution business. What are you expecting seasonality between the March and June quarters in the second half of this financial year? I think in the past, you've talked about usually the June quarter being 65%. Just keen to understand where you think that number might land this year. You might as well take that one. I guess 2 points there, Brooke. Firstly, obviously, the 3rd quarter, the March quarter is gonna be impacted by the weather events. That's an obvious point. That 55% is the group historical earnings and EBIT. You've got to remember that a big chunk of that seasonality historically has been driven by the residential and development businesses as we've been weighted there. We would expect a normal seasonality for the materials and distribution business as Q4, which is not as high as the figure you give there. The main impacts you get in materials and distribution in Q4, you get two. One is that you get your rebate flowing in the distribution division, which means we have a big June. That April, May, June is just big trading because of how trades are doing work ahead of the winter period. That's in volume terms, why that quarter tends to be higher. Again, it's not, it's certainly not 55% of those divisions' earnings through the year. Sounds good. Just back on, residential, might be able to figure this out from the disclosure anyway, but I'll just ask. How many homes were sort of built and completed in your residential business in the first half? How many do you expect to build and complete in the second half? Well, I think the answer, if you look at what's been contracted and settled and we've got a stock of 75, that sort of adds, you add that up, and then effectively, if you say we hold the 75, we've got to actually build and complete the 400 plus the ones that are contracted. You know, so it's gonna be about 500, 550, 600, something like that. 'Cause we'd actually want to, you know, the plan isn't to destock to 0 by the time we get to July. That sort of gives you the back of the envelope. You can sort of see it from the numbers we've disclosed on that slide in our half-year results. Make that sense. Thank you. Your next question comes from Peter Wilson from Credit Suisse. Please go ahead. Thanks. Morning. I've got a further one on the resi development. Into FY 2024, I'm a little bit surprised that your guidance is for flat sales at NZD 800, given the past discussion around growing into apartments and retirement. Just maybe some comment on that and which projects in which of those segments have you paused? Yes. There's a couple of There's a macro comment I'll make. There's just no way we're going to, yeah, we were going to build the volumes, particularly in apartments, through this year and get on with all that. There's no way, that's just fanciful until the market's there. I, Look, we can debate when it is, but I assume it's back in 2025, 2026 starts growing again. Look, we'll make that call when we see that actually occurring. The main thing that we've slowed down is just the apartments, to be honest. And we've got a good pipeline and projects we can get on with, but there's just no point getting out there and building stuff until we're confident there'll be an end market for it. The rest of it's been just tweaks, you know. So when you blend it up, it'll be about the 800. As I said, we've got an ability to do a bit more than that or a bit less than that, and we'll make those calls 'cause we get a pretty quick feedback loop. If we're starting to see a bit more buoyancy than we expect, then we can ramp it up. You can easily ±10%, 15% around that 800 target if the market's there or not there. That's sort of the way we'll move into it. You know, we have that sort of flex, and we watch it very closely. As I said, Steve and the team get a very quick feedback loop, so we can flex it that way. The reason we think 800's about the right thing, we're sort of confident that's sort of the volume, give or take, we'll get through the business this year. I do think that, you know, the cycle's been factored in, the banks are lending on that basis, you know. We're sort of in that price point, when you look at where it is below the average is solid, so just feels that's where it'll be. We've got flex up or down around that. Good. Okay. I take that means effectively zero retirement and zero apartments- I'll say. in 2024. Well, on the retirement, we've got Red Beach, the first product out there. Well, there will be some retirement in that, but it'll be the 25-ish, 30, 40, depending on what we build. But because we're actually out there making sure the product is well received and works, so we're, you know, we've got the first product there. We We now need to sell it and then get a good sense of the depth of that market. Again, then we can start going faster or slower on it. Then in apartments, I think there's around about 150 this year, and then there might be a little bit left next year to sell. Then we won't start the next ones until after that. They'll be then a feature of 2025, 2026, depending on the market. It'll be predominantly a little bit of retirement, a little bit of apartments and mostly residential. How do I think about that in the context of first half? You've disclosed that Vivid Living Apartments and Clever Core combined lost NZD 5 million. Is FY 2024, should we expect a similar combined loss, or should that, you know, that little volume? Mm-hmm Actually result in a, in a profit next year? Yeah. A couple of things is that we clumped it just because you just way too much detail. Vivid Living should not be a loss in the coming years 'cause we're assuming there'll be enough product throughput that it'll actually make product. Yeah. That'd be normal. On Clever Core, you know, as we get into the higher volumes, it just depends what we push through the business, the trajectory's looking pretty solid. We've got good plans. It's just hard to predict. I think the volumes will be at least 150, if that's the case, we'll probably lose a little bit. If we get a bit more volume, depending what the end market does, then we'll start to break even and move to profit. We're certainly getting that business at a much better understanding on how to do it, and we've actually made a lot of improvements there. I'm bullish about its outlook. I just, it's a bit hard to exactly guess the volumes through it. I'd expect Clever Core to be more normal next year and not be in that camp. The Vivid Living and then Clever Core might be a little bit still. Okay, good. One last one, if I could. Ross, in your prepared remarks, you mentioned that you expect EBIT margins to grow. I wasn't sure whether that's a comment with regards to the medium term or whether you actually expect EBIT margins to grow in FY 2024. If you could just clarify. What we're saying is our aim is we've sort of put our peg out there, we think it'll be softer and our goal is to hold at or around the FY23 margins. You know, might be a little bit off those, but that's sort of the intent. When I talk about the 9%-10% through the cycle, we need a bit of that growth stuff to fall to the bottom line 'cause that is actually accretive margins. That 9%-10% mid-cycle target for the business is a peg out there which, you know, hold at or close to the FY23 margins and FY22 through the softness. As the growth stuff comes in at accretive margins, and as the capital investment matures and it starts falling through, then you'd expect that to then lift it and get us confidently positioned mid-cycle in the 9%-10%. Obviously, with upside beyond that, when we have a bit more of a buoyant market, if it starts to grow again in the, 2026, 2027 years. Got it. Okay. Thank you. Thank you. Your next question comes from Rohan Koreman-Smit from Forsyth Barr. Please go ahead. Hi, guys. Just a couple of quick questions from me. Just back on resi. You're probably sick of talking about it, that NZD 200 million increase in land, can you talk through the mix? Is it sections or is it, I guess, developable land that you've acquired there? First one. Then second of the, I guess, contingent liability of 2,200 lots under contract, can you just talk about what they are as well? You know, is that sections that are, you know, serviced and ready to build on, or are we talking kind of developable land as well? In the kind of contract terms, is that unconditional? Can you give us some color on when some of that could potentially come on? You know, just even though, you know, you flagged it on Monday, I think that the amount of increase in the resi division, particularly around land acquisitions, which look like they were contracted, but the timing was, I guess, maybe not well communicated, has caught, well, myself anyway, by surprise. I'll talk about the land bank and then let Bevan talk about that. I'm not sure I quite understood what took you by surprise, so we may have to go around the paddock on that again, just so I understand the question. If I look at the 5,000 plus lots that we've got under control, there's quite a variable amount. There's the bit that, you know, you have some are sectioned and some are actually zoned but not sectioned. Then we have things which we don't put in into a whole lot of lots where we actually have got unzoned land, which we put it in as one or two lots, but it has a potential to be a lot more than that as and when we get it sectioned. When it's zoned, we put a conservative estimate on what we think the sections are. When it's obviously sectioned, you can actually identify it quite clearly. If I look at the zoned and so it's probably 50/50, you know, in terms of what's sectioned and what's zoned and ready to go. Then when you look at the stuff that's come on this year, we've bought what I call very few new things. What Steve and the team have done really well historically, and they've been very disciplined, and we didn't chase the market up to the top anyway. We, we've done deals on land where we progressively bring it onto the balance sheet, and it's really done that way to time it with when the development is actually done. We actually try and marry up bringing the land on as close as we can to the development program. Because of that discipline, as we've been bringing that on, and it goes back to Stephen's question earlier, we've bought it well enough that, you know, we've obviously, if we go back to invest today, the NZD 350 just happens to be the same number now because we've actually sold through a lot of that. The stuff that we then bought on has still been bought well enough that it's maintained that buffer to what land values now are. Looking forward, we'd expect that to continue because I'm confident we've bought well. I don't see nor expect a diminution in that buffer as we cycle through this next batch of land and bring the next lot on. That's important because that's what gives us the confidence in as we look forward and talk to the margin outlook of the business being in the 15%-20%, because we think we've bought land well. We think the product we're offering is well. You see it running at about just over 20% now, we think the long run average of this business should be 15%-20%. We're comfortable the land purchases and what comes on will support that. That's what I'd call the macro. I'll let Bevan answer the other one. I think the only point to add, Rowan, is that in terms of the timing of that, you know, this is land that's gonna support the business over the next four years. You naturally have more of it coming on in sort of the next couple of years because you're replenishing your pipeline to deliver sales during that period. It's weighted to 2024 and 2025. We've been quite clear that we were gonna rebuild stocks in the business, the housing stocks, and also that there was land coming on. I think if you go to note nine of the fin stats, you'll see at the full year we disclosed there, I think it was about NZD 730 million of total land in the off-balance sheet piece that was gonna come on. We've drawn down on that per the profile that we thought. You know, we've been quite clear about how much and also that it's gonna be coming on a chunk of it in FY 2023. Thanks. Bevan, maybe just extend on that. Of the other part that's under contract, can you give us a flavor for your ability to slow down your purchases if you have to, if you see sales not meet your targets? You know, you talked about some coming on in FY 2024 and then more in 25. Is that kind of set in stone? Are you unconditional there? The way we run the business is, yes, the lion's share of it is unconditional, but we obviously, across the portfolio, have the ability to flex. I think you get in your helicopter, and the point is we will meet the market in terms of the number of houses that we sell. That might mean we have to hold a little bit more land at certain periods, but you're going to do that to maintain your performance over time. You've seen us do this, that this year, right? We're gonna sell probably 300 houses less. We're gonna keep funds overall at about that NZD 800 million level. We'll do that because we'll keep our prices and margins where we think they need to be. That's the way Steve runs the business, and we'll keep the funds tight. Again, the returns remain very healthy even in the current year. Sorry. Thank you. I think that finishes all the questions. No further questions. Thank you. Sorry, I talked over you, moderator. Apologies. Look, we're up to the hour as well. Look, thank you, everybody, for attending and participating. I know we'll see many of you over the coming couple of days, so look forward to meeting you all in person again. Talk soon.