Welcome to the Oceania Healthcare Limited half-year result announcement for FY 2025. All participants are in listen-only mode. First, we will hear a presentation followed by a question-and-answer session. If you are participating in the teleconference, please ensure your webcast audio is muted to avoid an echo. You can mute the sound in the lower corner of the video player. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Suzanne Dvorak, Chief Executive Officer, and Kathryn Waugh, Chief Financial Officer. Please go ahead. Thank you. Hello, everyone. Today is my first investor presentation, and it's a pleasure to be here. I have met many of you over the past four months, and I look forward to meeting more of you in the days ahead. When you work in retirement and aged care in Australia, the New Zealand model of co-location is held up as being the best. With Oceania being the pioneer of the Care Suites model, it definitely feels like the right place for me to be. Over the past few years, Oceania has very much been in an expansionary phase focused on brownfield development. These developments are now completed or are nearing completion, and this has resulted in high levels of unsold stock. Going forward, our primary focus must be on these sales. Today, we're going to focus on the five key points outlined on this slide. Most specifically, I will be discussing the continued rebalancing of our portfolio to modernize our offering and to achieve a more equal balance between independent living and aged care. We will focus on the need to sell down stock and to reduce gearing and to execute on these things whilst right-sizing our operational model. From this financial summary slide, you will see the underlying earnings and cash flow have improved, and this has been driven by ORA receipts. Kathryn will speak to the detail of this slide a little bit later in the presentation. On the question of dividends, the board will look to revisit this in March. In summary, we continue to balance our portfolio with 106 units being delivered and four care sites divested during this period. Capital management is a key focus, and all banking covenants and requirements have been met. There is a significant amount. A number of years ago, a strategic decision was made to modernize the portfolio. As you can see from the chart on the left, there has been substantial growth in our total assets, and also, as you can see from the chart on the right, we are now much closer to having 50% of our assets being independent living units and 50% being either Care Suites or Care Beds. There's a significant amount of detail in this slide, but just to highlight, over the past five years, the business has been in an expansionary phase, and our total assets have almost doubled. However, sales have not kept up with this, and our gearing levels are too high. You probably know that I have worked in healthcare and aged care in particular for many years. I've seen care at its very worst. When I went to Bupa, it had 17 sanctions across its sites. At most places that I've worked, care is perfunctory at best. At Oceania, I can say with certainty that we provide the very best of care. I've been out to visit many of our sites, and when I do visit our sites, there are three things that stand out to me. Our homes are full of loved ones and visitors. You know, in Australia, many of our residents don't receive a visit at all. So they're full of loved ones and visitors. Our homes are also full of laughter, which is far too rare in care homes. Most importantly, there is no constant ringing of call bells because our residents' needs are being attended to. It is very clear that our sales volumes need to increase, and we are laser-focused on achieving this. We have created an executive sales and marketing position and have just appointed Stephen Lester to this role with an immediate start date. To assist Stephen to achieve sales momentum, we have also appointed an external firm, Marketability. They've been appointed on an at-risk basis for 12 months to help us get these sales away as quickly as possible. I have worked with Marketability before and was very happy when I arrived here in Auckland to find them operating. We, of course, are especially focused on sales at the Helier. This asset receives a lot of attention. It is a very beautiful environment with an exemplary service offering and the experiences that our residents have. We have a range of opportunities for potential residents at this site, and we want to focus our marketing on making sure potential residents are aware of all the access points available to them. On this slide, there are four main points. One, we clearly have a lot of stock that we need to sell. Two, we're aware that we have more stock coming online very soon, and we need to accelerate these sales to release the NZD 400 million of value in these assets, and by doing so, we will reduce debt. As I stated earlier, we have in this picture here at Elmwood, we have 106 Care Suites that have just come online. It was great that this happened just after I started. It was both a pleasure and a privilege to be on site to assist some of our residents moving into their new home. It's a lovely new building with very warm and friendly care. Some more photos for you here. You'll see our developments under construction at Awatere and Waterford and our new purpose-built dementia facility at Meadowbank. The dementia care at Meadowbank is based on the Montessori model, which allows residents to be able to move freely throughout the entire building and also to be able to walk in the gardens, which is very important to them. As well as what we've already got on the go, we have commenced development at Franklin, which is our first broadacre greenfield development. This type of building project provides control and optionality around the pace of delivery and the phasing of this development is very important as we already have a care building on site. We will continue to use this care building until all other building phases are complete, but we will construct the community center in phase one so that all residents, old and new, can enjoy this amenity. Our divestment program has been well known, and it has seen us sell off our older assets that have been specific to delivering care only. And as you can see from these photos, are not in keeping with a modernized portfolio. This slide is very brief, and it's truly constructed just to show you that while we have divested some of our sites, our portfolio remains roughly the same size. And for the rest of this year, as discussed over the next six months, there are a number of strategic areas that we need to be laser-focused on. We will have to focus on sales. We will have to ensure our operating platform is right-sized to accommodate both our divestments and our ongoing operations and to ensure that it's also cost-efficient. I will also personally ensure that the executive team are extremely clear and focused on executing against all of our priorities, and again, in closing, our focus must be on executing against our priorities, most particularly sales and delivering on that promise to our residents and to you, our shareholders. Thank you, and I'll now hand over to Kathryn. Thank you, Suzanne, and hello everyone online. Next, for the financial section, we've got the usual detail in the appendices, and we've obviously got the annual report at the moment. After my section, we'll have ample time for Q&A, and then Suzanne will come back online to wrap up. If you are submitting questions online and you wish to stay anonymous, please note this with your question. I'll talk you through the trading results in detail shortly, but before I do, let's have a look at the statutory measures. A note for our statutory financials in respect of comprehensive income for those that haven't followed Oceania before. Our Care Suites meet the definition of property, plant, and equipment for accounting purposes. This is different to some of our peers. What it means in practice is fair value movement increases are recognized in other comprehensive income, and our fair value impairments are recognized in P&L along with IP movements. As I say, this is different to some of our peers, and it means it's important to look at the total comprehensive income, not just impact given the fair value movement of Care Suites is running below the line. As you'll see, the fair value of property is down period on period. The main reason for this is the impact of our last care brownfield development coming online. Suzanne touched on this earlier, the 106 Care Suites that we've bought online at the Elmwood site. There's two impairments for the site. One is a permanent one. That's when we have decommissioned or partially decommissioned the old care building, and we also have a day-one impairment, which will subsequently unwind as we sell down the development. That day-one impairment comes from having such a large amount of stock come to market at one time and some of it being occupied by our grandfathered residents. Both of these impairments are recognized along with the IP movements in P&L. Along with the positives, which I'll come to shortly, there have also been increases in finance costs and operating expenses during this period. I'll touch on these on the next slides. Moving to trading results, our underlying earnings. Again, for those of you that haven't followed with us, we use the metric of underlying earnings. This measure provides comparability, and it essentially removes the fair value gains and losses in our accounts and replaces them with our actual recognized capital gains. There's a reconciliation of underlying earnings from our statutory reported total comprehensive income included in the appendices. Underlying EBITDA has increased 2.6% on the prior comparative period. So this is PCP. It's partly a result of the strong capital gains and strong occupancy that we have encountered. These are two real highlights for us in the period and an evidence of the transformation which Suzanne's talked to and the modernization of our portfolio. At an underlying NPAT level, over the next few periods, we will see increased interest expense. This increased interest expense is in relation to the completed developments. From an accounting perspective, while the interest in relation to our completed developments is excluded from our ICR calcs, it is recognized in NPAT for accounting at the point that the residents now occupy. As you'll see in our accounts, there's an amount of around NZD 4 million in the first half, which is included in our P&L, which is in relation to completed developments. When we come to March, we'll also restate that. From a corporate perspective, we have an uptick in the second half of last year, and that has continued for now. I say for now because, as Suzanne has touched on, there is a real focus on the underlying profitability of care and the underlying support costs. There are two things to raise to you at this point. One is a new cost in the period in relation to the share option scheme for the executive team. This scheme went live during the second half, so it isn't included in our prior comparative period. Ahead of March 25, we've also rolled out the scheme for the senior management team. This period has also seen a one-off cost in relation to the change of CEO, with Brent Pattison leaving Oceania and Suzanne Dvorak joining us. In our accounts on the very last page, past the audit report, you'll see details of the packages of both CEOs and the expenses that have been recognized in the period. Moving to our care segment. On the slide, if we start at the top right-hand side, we'll talk about occupancy. As I said, that is a highlight for us this period. We've historically given you two occupancy measures. The one in green is in relation to our total group occupancy. As you can see, that's been bouncing around the 90%-92% mark. The one in brown, that's our occupancy of sites not affected by development. As you can see, this period, we've hit the magic number of 94%. 94 is something I've talked to over the years as a marker that we wanted to get to, as from there on in, our cost base won't grow to the same extent as our revenue will, which means increased margins moving forward. Moving to the bottom right, we have a view of the EBITDA and the EBITDA margin. As you can see, that has been bouncing around, and there are continued pressures that we have seen through the periods. This year, worth noting, we have had some upfront spend in marketing. Suzanne touched on it. Sales is a really key focus for us. The level of unsold stock is too high, and we've had Care Suites product come into market. This upfront cost won't continue into the second half, but it has impacted the margins for the first half. Moving to the bottom left of the screen, we touch on our annualized EBITDA and resale gains per bed. Now, this is a new disclosure for this year and one we'll continue moving forward. Suzanne spoke around how in the transformation and modernization of the portfolio, we're moving towards a 50-50 split between ILU and care. Within the care, we've also moved towards a split of 50-50 between standard Care Beds and Care Suites. Because of this, and moving forward, starting from today, it's important that we include our resale gains when we're looking at the total profitability of the site. Development gains are excluded as they're a form of development cash recovery and one-off in nature. Resale gains, however, are an ongoing key cash generator of this model, and we continue to experience strong resales. Moving to slide 23, as you'll see in this pack, we've pulled some of the information from the appendices in previous years forward so that you have all information in one place. On this slide, we provide the P&L for the care business. There is a line in there which talks about the annualized Adjusted EBITDA per care bed. This has been adjusted or pro forma'd for the divestments in the period, and a reconciliation is included in the appendices. At that level, we have hit the NZD 10,000 per bed from an EBITDA perspective. Moving further down the slide, you'll see the annualized care relating to underlying EBITDA per bed, including our development margins and our resale gains, a level of just over NZD 20,000 per bed. A key point before I move on to the next segment is around our staff costs. Staff costs we have seen stabilize during the COVID years. There was obviously a lot of labor pressure that is now settling down. Having a stabilized workforce has meant that we are less reliant on agency or bureau. It means we have a lot more control over this line in our P&L. Moving to the retirement village segment, we have the key stats on the screen. On the right-hand side, we have our average sale prices, both for new sales and resales. We must note that it really depends on what product you're selling and what product you're bringing to market. Volumes, Suzanne touched on, and as you can see, improving period on period. Noting we do have a lot of stock to go through in the future periods. On this slide in the bottom left, we also include margins. As you can see, resale margin is holding strong at just over 20%. Development margins, however, will continue to bounce around and will be elevated as we sell down the Helier, with future stock being more of a broadacre and villa-style product. The next slide again, I've got the information at a granular P&L level for you, and there is more information in the appendices if you need it. These strong development margins, strong resale margins have been coming through to this segment. Expenses, as with care, includes upfront marketing spend. As I said, this level won't continue at this level into the second half. Suzanne has spoken to what we are doing in the sales space, and this will positively impact our second half results with our emphasis on sales, coupled with a discipline around spend. Moving to cash flow. Those of you that have had time to read the annual report and interim report and interim financial statements will see that we've made a voluntary change to our disclosure for cash flow. The reason for this is to provide comparability with peers and greater transparency to you, our stakeholders. You'll see it here on screen as well. There's two levels to what we've done. One is including additional lines so that we can split out the interest cash payments that we have made in relation to our general borrowings and the interest cash payments that we have made in relation to our developments. The second part of it is that interest payments on our development facility is now included within investing activities. Again, something that provides comparability with our peers and again, something that makes the statements easier to understand given their interest is investing in nature. We notice strong operating cash flow driven in the period by the increase in net cash from ORAs. In this period, we had a net cash inflow of NZD 97 million, and that compared to the net cash inflow of NZD 67 million in the comparative period. This strong cash inflow from an operating perspective, coupled with cash proceeds from divestments, has contributed to the circa 8 million reduction in our net debt since March. The next slide brings everything together about future cash recycling. We've talked about stock on the right-hand side. Added to the slide is the number of units that are currently in construction that will come online in the next period. Between now and March, we have 68 apartments at Awatere, and we have 50 apartments at Waterford. On the left-hand side, we provide our usual chart around the coverage of our development debt and our bond debt. On the left-hand side, that blue box, we include our development drawdown, our bonds, and also the interest. In that box on the left is included around NZD 60 million of interest, which has been capitalized to that development facility. It's adequately covered at a 1.1 times by what's on the right-hand side. So starting at the top, we have our unsold stock of the 305 that you also see on the slide. We have our WIP, and we have our undeveloped land. We'll continue to provide this disclosure moving forward. Moving to the balance sheet, we talked about the smaller than usual fair value movement, largely because of the offset of the impairment at Elmwood. This has resulted in a modest movement in our balance sheet of NZD 40 million. Coupled with the NZD 8 million reduction in cash, this has resulted in a positive decrease to our gearing level, our gearing level now being at 37.5%. All covenants have been met, and our ICR is at 4.2 times compared to our covenant of two times. Gearing, along with sales, will continue to be a focus of the group. Bringing it all together, we also have a net debt headroom now of just shy of NZD 100 million. The retail bonds continue to keep our overall cost of debt down with a blended interest rate of 2.7% and a blended cost of bank debt of 5.7%. As I've said, there is a sharp focus on gearing, and along with sales, this is a key marker for the board of directors for when dividends will be resumed. It won't be a roadshow presentation without a call out for what we are doing in the sustainability space. So for my last slide, we'll touch on some of those items. I won't read out what's on screen. You'll have a chance to have a read of that later, but I will point out some of the new things that we're doing. We now have three community partnerships in place around a Chip Packet project, a Deaf and Hard of Hearing initiative, and we're part of Fair Food New Zealand. We've designed and built to Homestar 6 for a while now, and with Franklin, we've increased our ambition in this space and will be building to Homestar 7 with a greater emphasis on emission reduction and energy efficiency at the same time as enhancing the health and well-being elements for our residents. When it comes to care at Franklin and the community centre, we will be designing to Green Star. It's really important with sustainability at Oceania that we also approach this with a critical eye for how it can help bring cost savings and efficiencies. Finally, we are pleased to share that Oceania has been selected as one of the three finalists in the Sustainability Leadership Award at the upcoming Deloitte Top 200 Awards next month. Thank you everyone for your time. I'll now hand back to the operator, and we'll start Q&A. Along with myself and Suzanne, we're joined by Ryan Bedolph, our Corporate Finance Manager. There's quite a few people queuing up online, so if I can ask that you keep your questions to three each to start with, we'll try and address as many as we can. Thank you. Thank you. A reminder that if you are participating in the teleconference, please ensure your webcast audio is muted to avoid an echo. You can mute the sound in the lower corner of the video player. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two, and if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Arie Dekker from Jarden. Please go ahead. Oh, good morning. Yeah, just first question, just a little bit more color on the sales. So it looks like the excess cash recycling expected has reduced a little bit from FY2024, and you've sort of talked to a review of unit pricing. Can you just give a little bit of color on what changes you've made on the pricing, how broad that's been, and whether you'll continue to adjust down if the feedback comes that way? And then just also related to that, a bit more color on Marketability's role and how that compensated. Sure. It's Suzanne here, Arie. With regards to the changes in pricing, we have done a full portfolio review of all prices across all sites. That includes care and also independent living. There is not a consistent approach necessarily across all of it. In some instances where there is demand, sometimes our prices will go up, and in others, our prices may stay the same or reduce slightly. This will all be published on the 13th of December, and we are using some external resources to assist us with doing that. With regards to Marketability, their role is really to make sure we can continue the momentum that we're currently experiencing. In September, we had the best sales result we had had in a 12-month period, and that has continued again in October. With a new sales and marketing chief coming on board, we don't want to stall that momentum in any way, shape, or form. So we're using Marketability really to make sure we continue that momentum and give Stephen the opportunity to get up to speed and learn what he needs to learn about the Oceania portfolio. We can talk about the details of Marketability's contract perhaps at a later date, but what I would say to it now is it's on a success basis rather than a retainer basis. Sure. Okay. Yeah. Okay. No, that's fine. I'll just move to development and divestment. I mean, you've been clear that you're coming to the end of a phase. There's a start at Franklin, sort of a small one sort of confirmed. Can you just sort of talk about, I guess, other quite significant components of the land bank, Lady Allum, Elmwood, and the Bayview? Have you made any decisions yet on kind of the ongoing redevelopment of those sites that you can share, or is that still ahead of you in terms of assessing what's best for those sites? And then just perhaps on Franklin too, where presumably a reasonable amount of the upfront sort of design and that preceded you. Have you had to make much changes to that given some of the issues that we have seen in development over the last sort of three, four years? Arie, it's Kathryn here. Thank you. I'll probably start and answer your first one about Lady Allum and Elmwood, and then I'll hand to Suzanne about her views of Franklin. Elmwood and Lady Allum, as you know, we've had kind of a view of those sites, and we have consent in place for what may be built, which was kind of set a number of years ago. We are in the process and have completed some ones more progress than the other, but around master planning and what that would look like. I think it's safe to say there is a change from what we would have thought we would have put at those sites from five years ago. The master planning's progressed. We've got a good view of what we'll do. The care buildings are in place at both of those sites now, so it's really up to us when we start. All I would say is there are obviously areas that would lend themselves more to apartments, particularly Lady Allum on the North Shore of Auckland. And because of that reason, there's a number of things we need to do before we would click go on them. But when we are ready to click go, we have done the groundwork and a large part of the master planning work to be able to kick off as soon as we can. I'll hand to Suzanne if she's got anything to add on those and then also her views on Franklin. I would only add that obviously the impact of doing brownfield development is obvious. It is very difficult to sell and redevelop an existing site at the same time, so we certainly won't be doing any more of that in the near future, and I think that's evident at Elmwood and its impact on the Franklin development. We have decided to stage it, as I have said, and we will continue to use the existing care facility until the rest of the development is completed so that we don't experience the same write-down at Franklin that we did at Elmwood, and I think that plus the phasing and being able to build and sell while you are developing are the main learnings that we will take into the Franklin development. Okay, and third and last question for now, just on the dividends, which you mentioned you'd revisit in March. Can you confirm that any resumption in dividend will be very clearly linked to cash earnings? I'll probably take that one, Arie, so as you know, that resumption of dividends is a view of the board. It's something we talk about a lot. We've noted it in the presentation, and we've noted it in the CEO and chair letter as well. The two key markers that will get us to a position of that is what happens with gearing and what happens with sales, so I'd be looking at a lens from what happens with our unsold stock and what does that mean for our gearing. They'll be the key things that we look at with the board. Yeah. I hadn't had a chance to read those yet. So yeah, so what you're saying is rather than the cash earnings of the business, it'll be the gearing and sales levels that will determine whether you resume dividends or when you resume dividends. Yeah. Correct. There's obviously a number of things that will go into it, but those two things are an absolute non-negotiable. Thank you. Thank you. Your next question comes from Bianca Flett from UBS. Please go ahead. Good morning, Kathryn and Suzanne. So first question for me is just on your key focus in the near future being improving your sales. And so you mentioned using Marketability. Just overall, I'm wondering what sort of year-on-year increase in sales and marketing expenses we can expect for the full year given those efforts. To Bianca, I'll probably start and then hand to Suzanne. I'd say, as you know, we tend to not give guidance with these kind of things. All I'd say is from a marketing perspective, the last few years there's been a lot of emphasis on building Oceania's brand. All of our teams have done an amazing job at getting the word out there of who Oceania is, and you see there's a number of our TVCs at the moment. Now that groundwork's done, it's very much about pointing the direction and allocating our spend and more focused on the individual sites. But we can't give guidance for it, unfortunately, Bianca. So obviously, I agree with Kathryn, and our emphasis will be on local area marketing and attracting people who live in areas very close to where our developments and existing sites are. With regards to marketability, I think that we would all agree that having in-house sales capacity is a much better long-term solution. But also looking at what we need to address here, it's important we put as much horsepower as we can behind getting those sales away. So marketability will be focused on selling at our highest value sites. And in doing that, we will also have some of our own team members working alongside of them to learn and work with them on improving our sales cadence. Okay. That's helpful. Thank you. And then second question, just moving to care. So you're Adjusted EBITDA per care bed of NZD 10K, excluding divested sites. Could you share what that number would have looked like, including those for all the non-core sites that you divested? And then also what sort of further improvement could we expect there, more medium term? Sorry. Just bear with me while I flip through the presentation because I think it's actually on that slide, Bianca. So on slide 23, the EBITDA per care bed's NZD 10K. If you look one line above, it shows you it's 8.5, including the divested sites. So that's the non-normalized number. Yep. Sorry, I missed that. Okay. Great. That's helpful. Thanks, Kathryn. That's all for me. Great. Thanks, Bianca. Thank you. Your next question comes from Aaron Ibbotson from Forsyth Barr. Please go ahead. Yes. Hi there. Good morning. So three questions for me then. So first, I'd just like to ask about the development debt versus assets and how that's changed over the last year. So a year ago, you had NZD 125 million excess assets. Then six months ago, you had 78. Now you have 43. So the development debt seems to be going up while the development assets are going down. So I think, at least I had in my mind that these two bar charts are going to behave roughly similar to some degree at least, but they don't seem to be. So is there any way you can sort of talk to is this your expectation that we're going to continue to sort of see NZD 40 million lost per six months? Or what is driving this significant reduction in development assets that's not reflected in a reduction in development debt? Yeah. Thanks, Aaron. It's Kathryn here. So when we were on slide 27, we touched on it. We have the bar chart there. You're correct in what you're saying. The coverage has been decreasing over time. A large reason for that is the interest that's on there as well. I think I touched on it when we were on that slide, or maybe I skipped over that piece. But on the left-hand side of that NZD 537 million development debt that we have, NZD 60 million of that is in relation to capitalized interest. And in that last six months that we've had, NZD 10 million of the NZD 60 million arose in the last 10 months. So it all becomes a little bit circular. The quicker we can sell down our stock, the less the holding cost is going to be on there. And then we'll get back to the times where the coverage is higher than it is now. Just to be clear then, Kathryn, when you capitalize interest, that is not added to work in progress? That's confusing for me. Yeah. No. And so it would. Or is it through the P&L? Yes, you're right. It is. But as we said, this period, it's only capitalised to the work in progress up to the point that it's still under development. So if we take the example of the Helier and Elmwood that we've talked about this period, so in the last six months, there's NZD 4 million of interest in relation to those development sites, but that is hitting the P&L. We can no longer capitalise that to the WIP. So what you're seeing is left-hand side, we still have that amount going to our development facility, but we're not going to the balance sheet. We are, as you say, going to the P&L. So you end up with a disconnect if there's still an amount owing on a development at the point that it is open for residents to move in. So that's part of the reason you're seeing this disconnect. That NZD 4 million seems quite small in relation to the over NZD 80 million change in difference, though. So the explanation's got to be something else. Yeah, and maybe something we need to take offline, Aaron, and go granular, but they're the two key reasons. A, development debt includes the capitalized interest. And B, from a point that a development is finished, that interest can be capitalized to the loan but cannot be capitalized to the balance sheet. We can take it offline later, Aaron. Well, I prefer, as you know, to take things online, but okay. Second question, what's your peak negative cash flow that you're expecting from the Franklin development, including capitalized interest, just to be clear? So I think if we look at it from a point of view of what committed spend do we have on the Franklin development at the moment. So we have a committed spend of NZD 70 million. That includes NZD 30 million for the villas, which we expect to be able to sell down in a fast period once they're completed. We have a track record of being able to pre-sell villas and sell them within that. So that we expect to be an in and an out. They're quite a short, as you know, build time as well. From a wider cost, though, that NZD 70 million also includes NZD 20 million of site works and includes the community centre. So that, as you know, will be a cost that will sit there for a while. And as we build around the site and as we do more and more stages of villas, that will be paid down as we go. So potentially look at it from the first 30 villas, NZD 30 million of spend on the villas. That will be there for the period that it takes us to sell down. But then you will have another NZD 20 million that will stay on the books a lot longer. So you've presumably spent on land as well and capitalized interest since you bought it. So you're talking about NZD 100 million negative peak cash flow, something like that? Correct. So the land, as you know, was around NZD 17-18 million. And then interest, as you say. And when do you expect to reach zero, according to your current plan, if at all? That we can't give you, unfortunately, Aaron, because there's a lot of factors that go into when we would start next stages. So at the moment, the only thing we've committed to is stage one of the villas. But Kathryn, given the sort of quite wide sort of divergence from the original communication around the Helier, don't you think investors sort of deserve to get a rough idea when you expect to get your cash back on Franklin before you start a new sort of NZD 200 million plus development? So what we can give investors clarity over is we've only committed to stage one of the villas, and we've committed to the community centre. From the care centre perspective, as you know, at March, we were looking at whether we start that. We've made the decision to put that on hold. So we can give the investors clarity that we won't be starting any other stages until we have a track record of being able to sell down those first 30 and other measures around freeing up our unsold stock to the NZD 305 million. But that's a hugely unprofitable village. If you just build stage one, that's not a proper village, and you would be massively loss-making, and you would pay a sort of NZD 60-NZD 70 million net cash position. So is that really true that you haven't only committed to one? I mean, you would have to build the rest as well, no? Otherwise, you have an extremely poor-performing village there, no? Aaron, Oceania tends to be very successful in the first stage of Franklin to be able to build a product that the community wants and that our residents are wanting to buy into. And certainly, we're hoping to get that away very quickly and very successfully. And that would, of course, lead to the second and third stages of development. So our intention is to be successful, not to create a half-finished village. Okay. Third question, your care revenues were down NZD 4 million from the second half, and staff and resident expenses were broadly flat. So can you give the absolutes that you got from these divested villages? You've given the EBITDA impact, which was roughly zero or 500 negative. So what were the revenues and cost implication? And if I assume that they were roughly the same since EBITDA was low, what happened to staff and resident expenses? Why did they go up so much on an underlying or like-for-like basis from the second half? So I'll answer the revenue question first. So we've sold seven sites now. I know they've all sold at various stages, and so there'll be various impact for all of them. In the appendices, as you said, we have the EBITDA impact. The EBITDA impact for this period was a loss of 500. The EBITDA in the previous period was a gain of about NZD 1.2 million. The revenue in relation to the total of those seven sites is just shy of NZD 10 million. One site in particular contributed NZD 7 million towards that. Presumably, since you've given the EBITDA, the cost would have also been roughly NZD 10 million. Why did costs not go down? Where have you added those NZD 10 million? Some of it we've spoken to. If we talk about costs overall, some of it we've spoken to are how we've upfronted our marketing spend in particular. We have a lot of unsold stock. Everyone knows that. It'd be no surprise that we're putting our sales and marketing efforts towards those unsold stock to move them. Whereas in previous years, we've kind of had flat across the whole 12 months, there is an upfront on those. There'll be some other support-type costs that have had that impact as well. Aaron, as we talked about. Overall, I'm just talking about the care costs. Presumably, there's not a huge amount of marketing in there, or do you put the marketing of Care Suites into the care cost? Correct. So the marketing of Care Suites is in the care segment. And that would have explained to this NZD 5 million or something there, or what? No, it wouldn't be the entire NZD 5 million, but it would be a chunk of it. Again, we can give you some more granular detail in our call later, Aaron, and we'll make sure we share that with all of the analysts. And investors, presumably. Okay. Thank you. Thank you. Your next question comes from Nick Mar from Macquarie. Please go ahead. Morning. Just on The Helier, could you just talk through a few things? Firstly, what the sort of repositioning you're talking about in terms of the sales strategy or the marketing strategy? And could you just talk about the previous cash neutral target by the end of FY2025 that you had on that? Thanks, Nick. So in terms of the sales strategy, obviously, The Helier has been promoted as an absolute premium product, and as such, many people have thought it is not accessible to them. So we just want to make sure that people know that we have a range of offers available at The Helier. We have the same amenity and service across all of The Helier, but there are different apartments available to people who may wish to come in. And we are also, as we touched on previously, talking about local area marketing. So rather than brand positioning, we're actually looking at local community, local community events, and making sure that people are aware of all that the Helier has to offer, most particularly around different types of apartments. That's what we're going to focus on. Does that answer your question, Nick? It did, but the second part of the question was just around that cash neutral target by end of the financial year, which you previously had, and you sort of said it'll be by May and sort of on a contracted basis. Just how are you looking on that front? Yeah. So yeah, and you're quite right. We did say it when we're here in May. I think if we look at it from where are we at today's position, net drawn down on the Helier is around NZD 60 million. You can kind of do the math for how many of the Helier we would need to sell between now and when we talk next to be able to cover that. It's a real stretch. It's something everyone's focused on with Marketability in town helping us. We're definitely all hands on deck. So yeah, we'll give regular updates and let you know when we do reach that cash neutral position. Okay. That's great. Just on the cost piece, you talked about the NZD 5 million of annualized cost savings from FY2026. Just assuming that that excludes some of the one-off costs that you've had this year around the CEO transition, marketing, and also LTIP grants. Yes, that's correct. Nick, it does. It also takes out the one-off costs involved with us getting our sustainability strategy and compliance activities up to speed. Yes, so it will be after all of those one-offs are taken out. We will look at both our support office costs and our operating costs at site. Okay. Just if we combine both those two buckets, how much cost delta should we see into FY2026? Sorry, I don't understand your question, Nick. The cost out will be. If we combine the NZD 5 million plus the one-offs, what sort of cost benefits to come in FY2026? Yeah. You're only true one-off this period because the LTIP will obviously be continuing cost. Your only true one-off is the transition of the CEO. I'll point you to the page at the back of the financial statements. All up, it's the best part of a million dollars. It's between about NZD 800,000 and NZD 1 million for that and one-off LTIP costs as well. Other LTIP will be ongoing. As Suzanne touched on, climate compliance with our CRD, that will be ongoing as well. So you're probably a five to six all up. The other thing I'd add is, obviously, the work that's going on. We've stayed silent on this in this presentation, but obviously, with the work we're doing on sales, the quicker we sell stuff, the quicker our interest cost comes down. So we are expecting a decrease in our interest cost in 2026 as well. Okay. Great. And then last question for me, just on land bank, what's your sort of strategy there? How many sites do you think you need to buy to get the sort of broad acre strategy working and have a diversified and flexible pipeline to grow in the future? Yeah. I'd say it's probably a bit early for us to put any guidance on how many pieces of land do we want to buy each year. What I would say is, although we talk about having done our brownfield care developments and then coming to an end, we are still sitting on quite a bit of land across New Zealand. So I already touched on Elmwood and Lady Allum. There's a number of sites across the country. If you, sorry, you may not have read the accounts yet, but when you do, you'll see in the subsequent events note, we've actually just purchased a piece of land that adjoins Gracelands in the Hawke's Bay that will lend itself to villa product. So we have more than enough land to be getting on with at the moment. And then when all of these other markers on the unsold stock are pointing in the right direction, that's when we'll start to look at what we need our future land bank to be. Okay. Thanks. We'll chat later. Thanks, Nick. Thank you. Your next question comes from Rob Morrison from Craigs Investment Partners. Please go ahead. Good morning. Can you guys hear me? Yes. Thanks, Rob. Cool. Very good. So the target of NZD 5 million cost out in FY2026, part one is where will that be localized? And then part two is in the longer term, you say you're maybe going to expand that cost cutting. What could it get up to? And just in terms of multiples of that, could it get up to say like 20 or 30 or 10 or? So at this stage, what we're focusing on is right-sizing our portfolio. So obviously, we have made a number of divestments. And as was pointed out earlier, there is still some work that needs to go ahead to make sure that we have reduced our regional support accordingly. We are also looking at doing different things, and we need to make sure that we right-size our support accordingly. So at this stage, we haven't necessarily put a full number on what the cost out program could look like or should look like over any period of time. But we believe the target that we've spoken to today, both outlined in the paper and that Kathryn has spoken to, of between NZD 5 million and NZD 7 million is appropriate at this stage. Okay. Cool. And net debt for the year, I won't ask you to give me a number, but roughly, are you expecting it to land above or below what you've reported today? Oh, I think if you kind of put everything that we've talked about today about focus on sales, a few more divestments that may happen, plus a right-sizing, we absolutely want it to be falling below where we are now. Okay. And how about on that basis, but excluding the divestments? I'd still have the same comment. So yeah, with sales, with the focus we have on sales, absolutely needs to be coming down. We're sitting on a lot of stock, as you know. We will have NZD 305 million now. We've got another NZD 100 million coming in. So we absolutely need to be focusing on that stock and bringing our net debt down. I guess it'll probably be a few things, but so what are the key changes that are going to bring that stock down? Because it's been pretty high for a little while. And obviously, so you've got the marketing, and fair enough. And presumably, the housing market will improve a little bit over the next, say, year. What other drivers are you thinking about? Yeah. So I think the things that we can publicly say we've already talked about. So Suzanne's talked about marketability. She's talked about how we've had an independent kind of price and review of it. We've talked about how our marketing cost is going to be kind of targeted and localised. And also, Stephen joined the team on Monday, so it's great to have him on board. We now have sales at the top table, and we've got a really strong sales team and developing every day. Okay. Okay. No, that sounds good. And then final question. So I see the total value of your unsold inventory; it decreased 9%, half on half, to about NZD 361 million. And you guys know more about it than I do, but I understand that if stock hasn't been sold, a discount is applied to the dollar value. So I guess I'm wondering that 9% half on half reduction, how much of that was due to a reduction in the valuation assumptions due to that discount for being unsold for a while as opposed to selling down? Yeah. So I don't have that to hand. You're right. The graph that we use, the two donuts, they are based on a kind of view of incoming price. So if either we've changed our view on that incoming price or if CBRE have changed their view on a discount, then it does alter it. But I don't have that information to hand. Sorry, Rob. We can talk to you about that offline. Yeah. Sorry, Rob. Just one thing for me. Typically, the unsold stock discount comes in as a one-off, and it doesn't typically change too much through the periods, but we can look at that and see what has changed for you specifically, but wouldn't expect it to be major. Excellent. Cool. Thank you very much, guys. Thanks, Rob. Thank you. You now have a follow-up question from Aaron Ibbotson from Forsyth Barr. Please go ahead. Yeah. Just a quick one on costs. It was asked to some degree, but in the release, you put out operational expenses increased, which have since been right-sized for the business going forward. That sounds slightly different from FY2026. The way I read that sentence, but maybe I misunderstood it, is that it has since 30th of September been right-sized, or what does that sentence mean, basically? Yeah. I'll let Suzanne add to this, Aaron, but just to start, so the intention of that sentence, and sorry if the wording isn't clear, is there are a number of projects that we've done. There's a number of things that we've put in place, a number of kind of changes that have been made. We won't see the full effect of those until next financial year, but we will see a partial effect of those between now and March. But when you say since, that means future plans, or does it mean since the end of the result, end of period end in September? So there'll be a mixture of a few, Aaron. So there's some things we absolutely have put in place. I'd just caveat that by saying that Suzanne only started it at the end of July, so you wouldn't have seen the impact of those in September, but there are some things that are now in place, and there are some things that the wheels are in motion for them to be in place from the 1st of April. Okay. And then maybe finally related, if you take your sort of costs that are not allocated to either the care or the village operations, so call it other or head office or whatever you refer to it, on a 12-month rolling basis, you're now close to NZD 40 million. That's higher than we have for Summerset and maybe half of what Ryman has. So on a relation to asset or residents or EBITDA or anything, it's quite large. Coming back to the previous question on upside, it seems surprising to me that NZD 5 million is sort of all you've identified as potential cost savings if you are now reducing development program and batten down the hatches a little bit. But maybe to be specific, is this NZD 5 million a net or a gross number? Aaron, the NZD 5 million that we've outlined here is a start. We are not suggesting that this is a finish. Much of the work that we are looking at, there are some of the spends that Kathryn has spoken to that we will realize the upside on that in coming periods, but has already been committed. We have started where we can absolutely see that it can be that costs can be diminished. We also don't want to cut out our muscle while we are focusing on sales and execution. As we progress and our sales cadence and our execution improves, we'll be in a better position to look at where we need to continue to invest and where we can potentially reduce costs again. And this NZD 5 million, is this a net or a gross number? Assuming that most of it relates to other or head office. So sorry, Aaron, what do you mean by a net or a gross number? Do you expect costs to go down by NZD 5 million, or do you expect costs to go down by NZD 5 million less cost increases, which could be anything? Oh, no. Sorry, I understand. Yeah. Absolutely, it's costs go down by NZD 5 million. Thank you. Your next question comes from Arie Dekker from Jarden. Please go ahead. Yeah. I just had a follow-up just on the embedded value. The resale embedded value increased pretty materially in the half, I think, from NZD 256 million to NZD 331 million. And obviously, there's not a heap of unit price growth in this environment, I suspect. So could you just give a little bit of color on what drove the large growth and embedded resale gains? And just give us a second on that one, Arie. So you're on appendix 6? Is that where you're getting those figures from? Yes. Yeah. So if you look at appendix 6, it's NZD 331 million. And if you look at the FY2024 presentation, the embedded value of resale gains was NZD 256 million. So yeah, like I said, quite large growth in this environment just after a bit of color on what were the factors there. Yeah. That's a good question. Thanks. We'd have to look at that in a bit more detail before we come back to you in full. But what I would say with the resale is obviously resale is going to be it's going to be directly linked to what stock's sitting there. The portfolio has obviously grown quite a bit in Care Suites in particular. We're now seeing the second, third, fourth churns of those. So that does have quite a large impact. But yeah, if you don't mind giving us a bit of time on that one, we'll come back to you later. Thank you. Thank you. Okay. Thank you. There are no further questions on the teleconference. I'll now hand back to Suzanne and Kathryn. Thank you very much, everyone, for your time and attention in focus. It's probably very clear to you that sales is going to be our major focus, as is rebalancing our portfolio and looking at our costs and focusing on execution. So thank you again, and I look forward to catching up with many of you, either in person or over Teams in the near future. Thank you.