Good day, and thank you for standing by. Welcome to the Summerset Group First Half 2021 Results Announcement Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to the speaker today, Mr. Scott Scoullar. Thank you. Please go ahead. Welcome, everyone, to our 2021 half-year results call. My name is Scott Scoullar. For those of you who don't know me, I'm Summerset CEO. Today, you'll be hearing from me, Will Wright, our new CFO, and Tania Smith, our head of finance. Will started with us on the seventh of July. Will was previously the CFO for the Building Products division at Fletcher's. He was also spending time as CFO in their residential housing division as well. Will obviously brings a lot of good relevant development and construction knowledge in pride of Fletcher's. Will is an associate director of Bancorp. Tania, you will know pretty well. She's been acting CFO for the last six months. In her day job, she is our head of finance as well. Before we talk about our half-year results, I'd just like to talk about the current COVID situation. You'll see this is the very first slide that we've got in the presentation. Really it's the fact that our key focus is really on keeping the residents safe, so we make that right to the start. In terms of where we're sort of at, look, Summerset was pretty well-placed when we entered the lockdown late last week, or earlier last week, I should say. Our care facility staff were actually already wearing face masks across New Zealand for the two weeks prior to that. We've got over 80% of our staff in our care residents who are fully vaccinated. We have over another 5% who've had their first dose as well. Look, some of those stats are probably a little bit out of date as they're moving daily. Our non-vaccinated staff are wearing full PPE. All of our Auckland village staff are wearing the higher grade N95 masks. In terms of PPE stocks, just in general, really well-placed. Got over 100,000 ordinary masks, over 60,000 N95 masks, and over 250,000 gloves in stock. We've had no cases in any of our care facilities, and we haven't been taking any care admissions since government-mandated lockdown. A lot of other industry players are still taking admissions, but our focus at the moment is on existing residents and not introducing any new people into those sort of environments. We've got a range of normal protocols in place as well. Things like hand cleaning protocols, staff screening at shift changes, staff change protocols around their clothing. Agency staff are restricted only to work for one provider as well. We're doing roaming sort of random COVID testing programs. It's also important at the same time just to touch on some of the cool things we've been doing. Some of the things I hear about are things like virtual quiz nights, virtual concerts, recipe sharing, poem readings, live wine tastings, and celebrity speakers. Those things are other things that we've done or got underway. Our sales team are also taking the time to ring up and check on elderly people in our community. Look, the last thing I'd sort of touch on in relation to COVID would be the financial position for the company feels is very strong. You'll obviously see an extension to our debt facilities, which give us circa NZD 850 million unutilized capacity, relative to just under NZD 700 million worth of drawn debt. I'd expect this to be the strongest position in the sector. Just move on to slide five, the first half summary. For over the last six months, we've taken a real step up in terms of performance. A number of key highlights for me are things like underlying profit. For that six-month period, you'll see NZD 75 million, up 67%, and we know that's volume related and relates to people purchasing new homes and resale homes as well. In terms of net profit after tax, NZD 264 million. Obviously, significantly up on the first half of last year, but also ahead of our full year 2022 result. The key contributor to that was the continued house price buoyancy, and we've lifted prices in our villages over the last 12 months by just over 8%, relative to 29% across New Zealand for residential median house prices. Operating cash flows at NZD 230 million was more than double that achieved in the first half of 2020. Pleasingly, our core operating business cash flows, which exclude new sales, are higher than for the whole of last year. Again, reflecting really the continued strength of the core operations of the business. Gearing ratios reduced to 28.5% from 35.8% a year ago. In the first half of the year, we saw record people purchasing and moving into a Summerset home, with settlements of 545 homes. At the same time, we delivered 347 homes, which is pretty close to what we achieved for the whole of 2020. In terms of slide seven, looking back for the first half, I just wanted to touch on a couple of personal highlights for me. It was great to see Ellerslie as a village being completed. I went there, just over probably six weeks ago now, and you see the beautiful bowling green in the middle of the lake. Really, what more can you ask for, honestly? There's no construction activity on-site anymore. This is sort of reflected really in the fact that we've sold close to 60 homes this year there. I got to experience my first main building opening as CEO in Richmond, and it's amazing to see what it means to residents. I think we would've had probably a completely full village turn out there, and it really just demonstrated how those facilities are a key driver as to why people come into a village. We're underway with our Lower Hutt village. As everyone, Tania and I get asked a lot, when are we getting started on that? We're underway with building on that, and we've got over 500 people on the database, which is twice the amount of people that that village actually will house. Just moving to slide 10, bringing the best of life. I just want to take a moment here to acknowledge a few more successes we've had this year. Our people and culture team won the Talent Acquisition Award at the NZ HR Awards. Last year at its peak, the team took a six-week campaign to hire an additional 161 staff. I think they went through something like 1,100 applicants. Our internal design team also won Gold at the New Zealand Commercial Project Awards for our Duke House renovation at our Hobsonville site, and that's a colonial cottage we did up. The amount of passion and pride our construction team put into that was pretty incredible. We've also done a lot of work recognizing and promoting diversity and inclusion across the business. We formally surveyed and interviewed staff about their views just recently. We're currently doing a lot of great work around medication optimization that just looks at the huge volume of medication our elderly residents are on. Often, they've built it up over a long period of time, 10 years+, and make sure these medications remain fit for purpose. We've now got around 650 staff who have become owners of free Summerset shares following the three-year vesting period that we have. Staff who joined in 2016, who own those shares now have about NZD 5,700 in value in a nice little nest egg, I reckon. For our residents, one thing COVID has taught us is the importance of technology bringing people together. Kenepuru residents are trialing a new resident portal on tablets in their villages. This idea is really to just improve communication between staff, residents, between residents and their families and residents and their friends. It enables real-time communication, provides sort of basically a whole lot of information at their fingertips, including any announcements within the village, any activities or events that are on a book. Actually, just late last week during COVID, I was watching the trial site. We had a virtual piano player and singer doing a show to residents. That was pretty cool to see residents watching that, some of the people I work with. That's slide 10. Look, slide 11 continues to take really good steps to improve sustainability. Summerset is still New Zealand's first and only carbon zero certified retirement village operator, or at least that I'm aware of. We've seen our carbon emissions reduced by around 31% from our base year in 2017. We're sort of essentially halfway towards that 62% reduction target that we've got for 2022. In terms of sort of practical things that we've been doing to sort of improve sustainability. We're incorporating a pellet boiler into our new St Johns village to replace the gas systems that we were originally going to put in there. We're stopping the future implementations of gas boilers into our villages. All our future villages, we're looking at centralized electric vehicle charging stations. We're also just in the process of doing some work to retrofit some of our existing sites with vehicle charging stations. We've hit waste division targets for our construction teams. Yeah, those are some of the highlights we've done. In terms of slide 12, developments in Australia. Look, despite the extensive lockdowns in Victoria, we feel like we're continuing to make some pretty good progress there. Actually, just last night, and it's too late for us to put in this presentation, but we received our confirmation from the City of Casey that they've approved our Craigieburn North site planning permit, or as those people in New Zealand know it, our resource consent for that site. We'll be straight to earthworks now. We'll welcome our first residents essentially in 2022. Today, you'll see we announced our fourth site in the northern suburb of Craigieburn. That's, look, a really well-positioned site, and actually a state government approved growth corridor. There's about 7,000 people in that catchment. It lists about 10,000 by 2026. Got one other operator within a 5 km radius for us, median house prices over NZD 600,000. Looking at some of the other growth corridors and suburbs nearby, their median house price is lifting up quite drastically. One of the neighboring suburbs went from NZD 600,000 to about NZD 800,000 median house price in the last 12 to 18 months. Look, feel like we're delivering on that intention to build our Australian land bank quite well. In slide 14 to 19, the New Zealand development and consenting sort of stuff. Look, couple of things. We obviously talked about that record program of first half deliveries of 347 homes. Our completion of the main building in Richmond was a great achievement. The final apartment block in Ellerslie was completed. The first of the two apartment blocks we're doing in Kenepuru was completed, and then we're doing sort of homes at 10 other villages or 10 of our villages in nine different regions. There's a real good diversification across the country there. We also gained resource consent for our Prebbleton village, where earthworks were actually already got underway. As I mentioned earlier, we've started Lower Hutt, and just last week, we got resource consent for our [audio distortion] village as well. It's another green light for another village. Look, in terms of how well we're placed for the future, in terms of consents, we think we're really well-placed. We've got 100% of our resource consents in place for 2021, 100% in place for 2022, and 90% for 2023. Essentially, we've sort of secured all three years' worth of consents, and the only two sites in 2023 that remain are Blenheim and Waikanae. Blenheim's been to mediation recently. We're quite confident that that will go well for us and we have a positive outcome pretty quickly. Waikanae's going through that fast track process. The Minister for the Environment, David Parker, referred that to Environmental Protection Authority and has judged that that project does meet the requirements for the fast track process. I think that's viewed in a pretty positive light as well. You'll note that we also have announced today that we've purchased another site in Palmerston North. That's at the northern part of the city where all the new housing development's going. The median house price for Palmerston North now is actually at NZD 670,000, and that part of the town is actually up at NZD 750,000. Our existing village in Palmerston's always got a big wait list, so we think that village will go really well for us. In terms of slide 20, the residential market summary. Look, just two points I'd make there, really. I'd just reinforce that that 8% uplift in pricing over 12 months versus the market uplift of 29% places us in a really good position in case we need to come up to downturns. Obviously, we'll benefit from having a lot of regional New Zealand locations. In the event of a future regionalized lockdown, that will support continued selling from the vast majority of our sites and obviously have a small weighting of our portfolio selling down currently in Auckland's really just the remaining apartments in Ellerslie. We will, later this year, release some of the first of those little last units to be built in Hobsonville. Slide 21, retirement unit deliveries. Look, I've just touched on, opened our first site in Whangārei, that site's gone extremely well. We've got 75% of the initial 50 units already pre-sold. Look, that's my update. I'll now look to hand over to Will Wright. Thank you, Scott, and good morning, everyone. Turning to slide 22. Development margin for first half 2021 was 22%, up from the 18% achieved across the second half of 2020 and within our target range of approximately 20%-25%. The gross realized development margins for the half was 40.7%, which was up from 17.4% in our first half 2020, a great result in which we achieved a total of 302 new sales, a record number of new sales in a six-month period. The margins were influenced by similar factors as in the second half of FY2020. Strong early sales meant that almost 60% of units settled in first half 2021 were sold in FY2020. Therefore, they only captured a portion of the residential market uplift seen in the last 12 months. The mix of units of our delivery program has ramped up, and the number of main buildings we're now delivering, with two delivered in FY2020 and another one in Richmond delivered in first half 2021. This brings with it the settlement of a higher number of serviced apartments, memory care apartments, and care suites, up 81% on first half 2020. These generally attract lower upfront margins but strong whole-of-life returns for the business. The locations of settlements, with only 15% of all settlements in our Auckland villages, compared to 31% in first half 2020. Finally, continued strong villa margins, where we had continued to have good margins across all villa stages across all sites, achieving above 25%. Turning to Slide 23, new sale of occupation rights. We settled 302 units in first half 2021, which is a six-month record and a substantial increase on previous years, up 136 from first half 2020 and 122% from first half 2019. We also reached a milestone in the period, with the 12 months to June 30th being the first time we had sold over 1,000 homes in a calendar year. Seven regions secured more than 20 settlements each, and almost 60% of the settlements came from villages outside of Auckland and Christchurch, reinforcing the strategy to diversify across the regions. This also highlights the benefit of having a broad number of sites. Therefore, we only require a relatively small number of sales per site. Across first half 2021, our top-selling villages were Casebrook, Rototuna, Ellerslie, and Te Awa. The age of stock continues to improve, with 90% of uncontracted stock available for less than 12 months. As quick, we want to touch on pre-sales. We are seeing strong pre-sales across our developing villages and have a good pipeline for new sales looking ahead to second half 2021. Total pre-sale contracts are in line with FY2020 and still around 2.5x higher than previous periods. As an example, we have only 30 pre-sale villas available for the rest of the year across 14 sites. This is less than three per village. Our wait list numbers continue to climb, up almost 43% on first half 2020. Our wait lists now average over 40 contracts per village. Lastly, whilst it is early in the period, we have seen similar trading conditions in July and August for the last quarter and have maintained the level of contracted stock that we saw at FY2020, with around 220 new units available to settle in FY2021, either contracted or pre-sold. We have another 30 units due for delivery early next year, which are also pre-sold. I now turn to slide 24, new sales stock. New sales stock as at 30 June totaled 315 units, with 222 units uncontracted. This is up from total stock of 296 in December 2020, but down from 355 at June 2020. Overall, the 222 uncontracted stock, 73 were delivered as part of Richmond's main building that opened in May. If these units were excluded from our uncontracted stock, uncontracted stock as a percentage of total portfolio would be at the lowest level in four years at 3.1% of total stock. We are pleased with the rates that our service department stock is selling down. Casebrook, the first of our new main buildings, opened during the nationwide COVID-19 lockdown last year and sold down within 12 months. Both Richmond and Rototuna are demonstrating similar sell-down rates, Richmond slightly faster, having sold 35% of its service departments in two months. We continue to see very high demand for our villages, with only 24 delivered units uncontracted across all villages as at 30 June. Turning now to slide 25, new sales performance. A couple of things to point out on this slide. The two charts on the right maintain the step-up in sales momentums that we saw in the second half of 2020. Bottom right chart highlights contracts on stock available to settle in financial year 2021. Slightly less than overall contracts at 30 June, reflecting a higher weighting of stock being serviced in memory care apartments and care suites. Overall, we remain well-positioned as we move into the second half of the year. Moving to slide 26, resale on occupation rights. Resale volumes were 243, up 79% on first half 2020 and 71% on first half 2019. For context, this is the same amount of total settlements we achieved across FY 2015 and FY2016 combined. We see this sort of volume as more of a new normal for us, with the number of residents vacating units in first half 2021, the same as we saw on both halves of 2020. The business achieved record gross proceeds for the six months at NZD 127 million, 10% up on the previous high of NZD 115 million in second half 2020. Settlements in first half 2021 were also in line with the second half of 2020, which had 245 resales, the record for the most resale settlements in a six-month period. Realized resale gain was NZD 29.4 million or 23% realized margin. This compares to 25% in first half 2020 and 26% achieved across FY 2020. The slight drop results from a couple of key drivers. The mix of villages, with a higher proportion of resales in developing villages and overall shorter tenures on resales, particularly for villas and service apartments. In absolute terms, while realized margin% decreased slightly, realized margin per unit increased from NZD 115,000 in first half 2020 to NZD 121,000 in first half 2021. At slide 27, embedded value. The embedded value within the portfolio now exceeds NZD 1.1 billion, having increased NZD 765 million from June 2020. This is a 49% uplift that will positively impact realized gain and recurring earnings into second half 2021 and beyond. Embedded value per unit is now NZD 240,000. This includes NZD 164,000 of unrealized resale gain, which is almost NZD 45,000 above the resale settlements in the first half of this year. Moving to slide 28, resale stock. Resale stock of 149 units compares to 178 at December 2020. This equates to less than four months' stock at our current settlement rate. Uncontracted stock has decreased from 73 units at December 2020 to 62 at June 2021. This is the lowest level of uncontracted stock in two years, and there was only 20 vacant resale villas and apartments across all Summerset villages as at 30 June. As a proportion of our total portfolio, available resale stock is 1.3%, which is at the low end of what it has consistently been over the last five years. Slide 29, resale performance. I won't talk too much about this slide. The trends are consistent with the new sales trends on the previous, earlier slide. Moving to slide 31, our first profit. We've reported a net profit after tax of NZD 263.8 million for the first half 2021, up from NZD 1 million in first half 2020 or a loss of NZD 7.6 million when normalized to the government wage subsidy. The key driver of the movement in revenue between first half 2020 and first half 2021 was care and village service fees and DMFs related to the opening of three new villages in the second half of 2020 in Napier, New Plymouth and Pāpāmoa Beach, along with the continued sell-down of our developing sites. If you back it out, the repayment of the government wage subsidy and the additional COVID-19 spend from second half 2020 and expenses have remained broadly flat over the past six months. Turning to slide 32, fair value movement. Fair value moved NZD 260.2 million for the half, which is a record across all prior half and full-year reporting periods. Importantly, this is a result of the growth in our portfolio rather than any reversal in value of assumptions. Here we benefited from delivering new units, strong sales rates and positive house price inflation. The four main drivers of this were unit pricing at NZD 168 million. Our valuers have lifted nominal ORA prices by around 8% across the portfolio in the last 12 months. This compares to national median residential house prices that were up by 28.7% year-on-year and 25% when you exclude Auckland. The value of new retirement units built increased roughly NZD 69 million. The uplift in value in first half 2021 is driven by deliveries across 10 sites. The reversal of unsold stock discounts accounts for NZD 20.6 million. This is a reversal of previous discounts applied to stock delivered in previous periods but settled in first half 2021. The level of discounting applied was around 18%-23% in the previous year, meaning this reversal resulted in quite a large fair value movement for the period. Finally, discount rate assumptions of 6.9%. This just represents a softening of the discount rate within the discounted cash flows of our villages. Two parts to this, a general improvement in market conditions across the country, and main building deliveries, notably in Richmond. The valuers normally adjust discount rates when a main building is delivered to a site to reflect the increased amenity and service offered at the site. Turning to slide 33, underlying profit. Our first half 2021 underlying profit was NZD 75.5 million, a six-month record and up 68% on first half 2020. Recurring earnings from our core business functions continue to be a standout, highlights the sustained interest and growth in our business. Recurring income increased by NZD 26.6 million to NZD 124.3 in the first half. Recurring earnings were underpinned by double-digit growth across care fees and village services, up 12%, deferred management fees up 23%, and realized gain on resales up 87%. If we can please turn now to slide 34, cash flows. Net operating business cash flows have increased to NZD 16.5 million in first half 2020. Have increased from NZD 16.5 million in first half 2020 to NZD 42.5 million in first half 2021. This is also a jump from FY2020 of NZD 29.8, remembering this included COVID-19 costs, so normalized would have been closer to NZD 40 million. Investing cash flows of NZD 192.4 were up both on first half 2020 and first half 2019, in line with construction progress on a number of key projects, namely civil expenditure on our new sites, including Whangārei, St Johns and Lower Hutt, main building spend in Avonhead, Kenepuru, Richmond and Te Awa. Both Richmond and Avonhead delivering across FY2021 and various source stages across 10 sites. Refurb costs for first half 2021 are in line with the increase in terminations. Net financing cash flows increased 252% from our first half 2020, largely due to the net repayment of bank borrowings in line with increased new sales. Moving on to the balance sheet. Our balance sheet continues to grow, with total assets now NZD 4.4 billion as at 30 June. Since listing in 2011, our balance sheet has grown more than seven times. We've added NZD 3.8 billion to assets over 10 years. Retained earnings are now NZD 1.3 billion, up 56% from first half 2020. The retained earnings continues to help strengthen our balance sheet and maintain gearing ratios. It is encouraging that there has been a continued strengthening of the property market beyond what CBRE and JLL have factored in at this point, and another strong year of fair value gains would continue to benefit our gearing ratios. Slide 36, net tangible assets. Our NTA per share is now NZD 7.07 compared to listing in 2011 when it was NZD 1.09. NTA growth from first half 2020 was 44%. If we move to slide 37, gearing ratio. Net debt has decreased from NZD 56.8 in December to NZD 643.3 as at 30 June, with the primary driver for this being the increased level of new sales and settlements. At June 30, we had NZD 455 million of funding available to draw on. Post the refinance announced today, headroom has increased to NZD 850 million. Moving to slide 38, funding. Post the half year, we have successfully increased our bank facility to approximately NZD 1.2 billion to complement our existing NZD 375 million of retail bonds. The refinance was approximately NZD 700 million. NZD 315 is a rollover of debt due to mature in March 2022. In addition, we've added NZD 50 million in New Zealand dollars and additional NZD 315 million in new lending in Australia. The facility has a mix of four and five-year tenures with an average tenure of 4.2 years. This provides us with sufficient headroom to fund growth in Australia in light of our previously signaled plans to build a strong land bank over there. We continue to target the buying of additional sites in Australia this year, having already announced the purchase of [Chirnside Park] in March and Craigieburn today. As part of our new facility, we are also proud to be New Zealand's first retirement village operator to link sustainability to its funding arrangements. This commits us to set sustainability targets over the tenure of our refinance banking facilities. These targets are construction waste diversion from landfill, the rollout of memory care suites, and the continuation of dementia-friendly accreditation, and an emissions reduction target that will align with and encompass other initiatives across the business, including the update of our Toitū target in 2022 and a wider science-aligned targeting process. These targets are externally audited and linked to our underlying sustainability objectives. Finally, moving to slide 40, interim dividend. We will be paying an interim dividend of NZD 0.099 per share unimputed. This compares to an interim dividend of NZD 0.06 per share in 2020. This represents a first half payout of approximately NZD 22.7 million. The dividend policy remains 30%-50% of underlying profits for the full year period. As previously indicated, given the growth opportunities in front of the business, at this time, dividend payments are likely to remain at the bottom end of this range. The DRP scheme will be available for shareholders with a 2% discount to be applied. The interim dividend will be paid on Monday the 20th of September. Thanks. Moving to questions. Thanks, Will. Operator, we're happy to take questions now. Your first question comes from Andrew Steele, your line is open. Good morning, guys. The first one for me is just on your OpEx profile in lockdown. Could you give us a steer as to what you think the level of incremental cost will be on a weekly basis while we remain in current level four restrictions? Yeah, look, I could pass a couple of comments to Andrew, and then I'll maybe pass to Will if he wants to add anything. Look, essentially, I don't think you will see a great difference in terms of OpEx costing. Essentially what you're seeing at the moment is mainly use of PPE stock, which we already have in stock. There's a little bit of retention and cost attached to that, but I wouldn't say it's materially going to impact anything from an operational sort of cost sense at a macro level. Yeah, thanks, Scott. Thanks, Andrew. Look, I'd agree with that. I think there may be a small impact from some additional staffing levels, but remember, we were already in a semi state of lockdown due to the RSV virus, so some of those were already in place. Great. Thanks, guys. Excuse me. Just the next one for me is on your new development build rate guidance. Can you just highlight the project, which is pulling forward into this year? I guess as well, given the certainty related to the length of potential lockdowns and the disruption it might have on developments, are there any projects which are sort of in the later part of this financial year, which could slip out into the FY2022 year that are worth highlighting? Sure, Andrew. A couple of things there. The first one is, in terms of main infrastructure projects that we're going to deliver this year, you've sort of already got the second main building that we intended to deliver, which is Avonhead. That's actually complete now and actually ready to be handed over and to start filling with occupants. No risk around that. The remainder of the villages in terms of build rate profile are really predominantly villa delivery. We do have the second block of Kenepuru, which is pretty well advanced. I don't think you carry any risk that that wouldn't deliver this year. Obviously, extreme circumstances sort of aside. In terms of what that lift up in build rate was to go from that 500 to 550 build rate to the 550 to 600, it's not one particular project that we're pulling forward. Essentially what we're doing is lifting our build rate across all those sites. Obviously regional broadacre Village is quite short lead times to be able to, in fact, and sort of basically lift that villa delivery program right across all those villages. Again, not a lot of risk attached to that because ultimately, you're delivering a small number of extra volume across a large number of sites, if that makes sense. Yeah, that's very clear. Thanks, Scott. Just related to that, I just noticed the comment on expectations for development margin. You've removed the comment that you expect to be at the lower end of the range. Could you elaborate on that or where you think development margin might land on a full year basis? Look, I don't think any changed expectation from the initial sort of guidance given, obviously, that first half of the year, you've seen quite a stable development margin for us. No reason to expect that to deteriorate in the second half of the year. Obviously, I'm sort of talking about any sort of profound impact attached to COVID-19 aside. That's sort of our view. Will, I don't know if you had anything else you would like to add to that. I think, obviously, there'll be some change in mix as we move into the second half, Andrew, that will obviously flow into development margin with a higher mix of apartments and our service department delivery. Yeah, essentially, Andrew, you see a little bit of a lower product profitability from that product, but we're pretty confident equally in what we're seeing coming through on those second half villas, where essentially they're benefiting from the pre-selling on those obviously being later than what we had in the first half of the year. You're actually capturing a bit more of that gain that we've actually put in play in the last six months. Most of those price increases have been in the last six months, which really don't benefit you until we actually start delivering the product and selling it down in the second half of the year. Great. Thanks, guys. Just one on earnings seasonality. You typically have more of a second half weighting to earnings. You're looking at your mix of stock and development plans for the second half of the year, is it reasonable to expect that actually this first half period will have a modestly greater weighting to earnings than the second half? Yeah, exactly. Really reflective of the fact that traditionally, we've actually delivered quite high volumes of deliveries late in the years, therefore you've seen that second half skewed. This year it's almost completely opposite. That's great. Just one last one from me. Can you just give an update on the pricing increases that you've put through on units on a like-to-like basis in this financial year and any more that are planned at this stage for the remainder of the year? Look, I'll just make a comment on that and then I'll hand over to Tania to comment on that. I think, look, just obviously second half of the year really sort of watch environment, so we'll be pretty responsive to just the situation we're in at the moment. I think no pre-determined outcome in terms of where we'll price in the second half of the year at this point in time. I think from the first half of the year, Andrew, sorry. I was just going to add, Andrew, I think from the first half of the year, we've been pretty conservative on our price increases. By no means have we increased as much as the market. I think I spoke to sort of circa the 8% half-on-half versus the market of, yes, closer to 25%. Great. That's all from me. Thanks, guys. Your next question comes from Stephen Ridgewell. Your line is open. Good morning, great result, guys. Just wanted to follow up on Andrew's question around price increases and the 21% gap that seems to have opened up in the last 12 months. Accepting that obviously there's some challenges in the second half for obvious reasons. I guess over time, should we be expecting that you'll be able to close that gap? I guess from a sort of a helicopter view, broadly over what kind of time period would be reasonable for that gap to close? Are we talking a couple of years would be reasonable as a starting point to close that gap? Yes. Thanks, Stephen. Look, fair question, I think. My take on it is, you probably won't see us look to close that gap in the immediate future, but there'd be sort of a progressive sort of view to that over a couple of years. We would sort of watch that. Obviously, that gap is good in that it maintains an ability for our people to be able to afford to continue to come into a village. And at the moment, like in the environment we've lived in the last 12 or 18 months, we have obviously taken a bias towards making sure that we've got good and appropriate stock levels and don't have aged stock. Look, you won't see us sort of pushing up radical price movements and that's reflective of, I guess that analogy we gave for about the 8% versus the 29% for the market. I think the other thing I'll just sort of call out a little bit is, there is always that lag between, which I sort of mentioned before in the conversation with Andrew Steele, that there's always that lag between when we pre-sell products. Probably people might have had a higher expectation of margins in the first half. Remembering that often the product we sold in the first half of the year was actually purchased by someone potentially back in late last year. You sort of see that lags dynamic. In terms of pricing, we'll be pretty consistent and steady and probably continue to err certainly in the short to medium term upon our low stock levels as opposed to pushing prices up towards the median. That makes sense. Just while we're on the topic of price rises, some development margin, I mean, there's been plenty of news about the rising raw material prices and labor costs. Yeah. It sounds like you're pretty confident that you can recruit those costs through price increases. Are you able to just elaborate on how you see the business and how you imagine managing those increases? Yeah. That's right. Look, what we're seeing at the moment is a lot of the literature, things such as the announcement last week and talking 3%-5%, RLB, who's one of the sort of the market competitors we talk to most and provide the most guidance around that sort of talking 5%. We are sort of seeing probably more close to that 5%. We're seeing some erratic pricing in things like steel, timber at the moment, but it bounces all over the place. You'll see an uptick come in, you're looking at 10%. You'll see other tenders coming through at 1% or 2%. Watching that, I mean, that's always a balancing game. As you sort of rightfully mentioned, we're still looking at the development margin, and we are pretty confident at the moment that we can stay at those levels. That guidance still stands, we can balance off that balance between construction cost increases and the residential house pricing that we sort of choose to do to keep that margin at an appropriate level. That's great. Just one more from me. Just on Melbourne. We sort of think the only real indication was that there might be pre-sites acquired, and it looks like the company's on track. Just interested with the increased debt capacity out today, is there potential here to see an acceleration in the rate of land acquisition in Melbourne, or perhaps is there more appetite to pull those sites that have been more inner-city, perhaps, and with a little bit more CapEx associated with them? Obviously, it's been more of a broadacre product so far, just seeing how much you can go for on that end with Melbourne. Yeah. Look, it does give us the ability, I guess, to buy the odd mid-ring site if we wanted to choose to buy that. Not to say we'll rush out and buy a truckload of mid-ring sites, really what it does is sort of secure that kind of growth path into Australia for quite some period of time, which gives us a lot of confidence. Obviously, also gives us a strong financial position now to manage any sort of untoward impacts attached to the current outbreak. Look, one step at a time for us, really, like we sort of said back six months ago, let's start with building up our land bank and getting a real strength to the land bank and then getting consented. We're sort of not looking ahead at that point in time, Stephen, but it does give us a really great platform to be able to continue to grow in Australia. That's helpful. Thank you very much. That's all from me. Your next question comes from Aaron. Your line is open. Was that Aaron? Let's assume it was me. Good morning, and congratulations on being the first HC company for a long time to report reduced net debt. Very impressive, and encouraging. I've got a few questions, if I may. First of all, just I guess of general interest, but you mentioned 80% fully vaccinated of staff and residents. I'm actually quite curious to know why that isn't higher. Is that because of vaccine hesitancy, lack of access, or is it just your rollout plan was targeting this sort of level by now? Secondly, just on your sort of delivery outlook, I noticed that you had 50 care beds, or 52 to be precise, that wasn't on ORA. That mix was slightly higher than I had in my mind. I just wanted to know, sort of going forward over the next few years, is that a level you expect to continue to have, with sort of 50 or plus care beds that are not going under ORA? I have a couple of more, but maybe I'll start with that. Oh, hi, Aaron. Hey. Look, yeah, that first question around vaccination rates. Look, the 80%, it's not like we have 20% of our staff who are not prepared to be vaccinated. I think the actual opt-out rates at the moment only ranged around about 4%-5% across our sites. What you're sort of seeing in New Zealand is sort of like that recent fast ramp-up in the last couple of months of vaccinations happen. That's happened across our villages at various sort of like time frames, dependent upon when availability existed for, and when DHBs have sort of allowed us to have people on site to kind of vaccinate. What you're seeing is the sort of first wave of people come through their vaccination process. We could have got a proportion of people who are probably either slightly curious about seeing what the impact is for the people who have been vaccinated or are still questioning the virus vaccination effectiveness, or you're more often, I think, probably most likely just seeing people who are a little unorganized and not booking it, which I suspect you're probably seeing nationwide at the moment where people are rushing in and all of a sudden you're waiting for a three to four-week wait. Look, I think it is moving quite rapidly, quite quickly up, and we've even seen it in the last couple of weeks in our stats. Yeah, predominantly just reflective of a lot of those access to vaccinations at scale for us has only happened over the last sort of four to six weeks. Yeah, it's in the mid of vaccine rollout in New Zealand has probably principally driven it. Just on your question around beds versus ORAs and licensing splits of those. Probably my point would be around that is we're not predetermined on those splits. When we are looking to do the initial sell downs in our facilities, we've been quite flexible around that in the speed of sell down, people's desire to which model they want to run underneath. We're probably not at a point yet where we're saying, "Hey, we've got a fixed ratio." I'm not sure that we'll probably move to that in shorter term because I think actually it's better to get people living in our facilities and then potentially look to sort of optimize that for a period of time, if that makes any sense. Absolutely. Secondly, or thirdly, just on the sort of medium to longer term outlook for resale margins. Obviously on the new tail, we have an offset a little bit between higher construction costs and higher prices realized. On the resale, presumably that effect shouldn't really come into play. I appreciate what you said about shorter deals having been closed last year and also shorter tenures likely. If I look out into, say, FY2022, FY2023 type situation, and we continue to clock 6%, 7%, 8% increases, is there any obvious reason why we shouldn't put in, that's 35% resale margins or something in two years' time? What would be the dynamics that would stop that from happening if it's there? Yeah, look, a couple of things there. Obviously, even on the resale side of things, you'll look at kind of stock levels on a site by site basis, and depending on Homes become vacant, that may change our pricing on, and you can often get large fluctuations in that over various periods of time. Probably one of the things to sort of point out is some of our original villages down the lower North Island, previously has always been more sort of lower socio-economic or lower median house price suburbs. We will have taken a choice there to bring those relativities to median house prices back and potentially leave them back permanently as well. Creating that sort of increased buffer. Aaron, I don't necessarily think you'll sort of see 35%, only for us. We will take some choices around backing some of that stuff off in some of those particular suburbs. You'll also see a little bit of fluctuation sometimes, like I think you saw in the first half when we were talking about, and I think also we talked a little bit about in the results presentation about that being probably slightly lower than what we'd expect, but it really was just driven by the mix of units that had resold in that first half of the year. It was sort of nothing sort of systemic in that slightly lower resale margin other than it was just a mix thing at that point in time. I think you're right, you definitely see more stability on that resale side. You definitely see probably more opportunity to push that up over time. Will it necessarily go up by any effect as you sort of talked about? No, as I said, we've taken a constructive choice to bring back some of those residential median house price relativities. It's particularly for areas like Te Puke and Whanganui, where we might have been up priced like 110% of the median house price, and you're picking that sort of upper quartile of people who can sort of come into your villages, backing that off and permanently leaving that sort of backed off, if that makes sense. That makes sense. Thank you. Finally, just on your cash recovery of new CapEx. Do you have anything you can say about the CapEx outlook? Obviously, it was a fantastic first half with new sales covering your entire CapEx. How do you see that over the next six months or next year? Specifically maybe on sort of land banking. You talked a lot about Australia, but do you feel like your New Zealand land bank is big enough and maybe even willing to shrink it a little bit? Yeah. A couple of questions in there actually. Land bank in New Zealand, look, it has been about 18 months since, I think probably since we bought a bit of land in New Zealand. I'm just trying to think back. Look, we're pretty comfortable to buy a couple of bits of land in New Zealand each year just to sort of maintain that land bank at that level. We'll obviously sort of jump at any opportunities around great sites that we see. Look, you'll probably see us continue to buy two sites a year. From a CapEx perspective, Will and Tania might have some other comments to add. Look, I don't think you'll see any sort of radical investment cash flows. What you're probably seeing is the finishing of Ellerslie in the last sort of six months. The wind-back of Kenepuru Apartments in the last sort of six months. We've seen a couple of main buildings complete, but we're developing a couple of main buildings going forward, so that's sort of a bit same. You're seeing a bit of takeaway from Ellerslie, takeaway from Kenepuru apartment blocks, investing into sort of St Johns, from a cash flow sort of perspective. Obviously you've got a bit of civil works underway. Guys, I don't really got anything in sort of further comments or views on that, but I wouldn't say construction cash flows would be horrendously different. Tania, you might have a comment on that. No, Scott, I definitely agree with that. I'd be on the area. We'll be ramping up of course in Australia, but New Zealand is status quo. Yeah. Okay. Very well. Thank you. Your next question comes from Nick. Your line is open. Morning, guys. A lot of my questions have already been asked. Just in terms of resale margins again, excluding some of those mix impacts, you mentioned the absolute movement in kind of margins. Do you know what, say the kind of the resale margins did over that period? Are you talking about a normalized one? Yeah. Sort of without the variation in the mix. I couldn't probably tell you that offhand. It's probably too early. We can have a look at that, Nick. I want to try and pull some of that mix spot out. I can kind of let you know that offline afterwards, if that's helpful. Okay. No, that's great. Just on the kind of the capacity. Is there much of a cost for you to hold that kind of capacity? It's just hard to imagine what scenario in the next couple of years you'd need anything near that kind of deep drawn. Yeah, sure. Look, absolutely. I mean, you guys can probably do the simple sort of math on that around additional annualized capacity and probably give some margin relatively quickly on that. There is definitely an implicit cost in that. I think the world we live in at the moment, it's very unusual times, isn't it, in the last 12 or 18 months, and I think to have that secured for us, it's a great insurance policy in place for the business. As I said, it really does for us secure that growth path in Australia. Look, probably at the moment, happy to live with that insurance cost, much like insuring our NZD 3 billion worth of assets. Okay. Just in New Zealand, any kind of view on the long-term build rate? You're still kind of holding that 600 [target]. Does that review for over this year, obviously include beds, depending on how you kind of cut the [villas versus care beds]? Yeah, look, don't really want to get in front of ourselves too much on that, sort of get to the 600. Stabilize at that level for a year or two. There's definitely opportunity potentially to build at a faster rate than that still. I'm not saying we will, Nick, but you definitely can look across the portfolio and you can look at how many villages we've got and the land banking we've got, and you can concede that we could build at a build rate slightly higher than that. First step, get to 600, consolidate, and then take a look from there. That's it from my end. Thanks. Your next question comes from Bianca Fledder of UBS. Hi. Good morning, guys. Well, first of all, congrats. Great result. Yeah, just the first question from me is just around land acquisitions going forward. I'm just wondering if you've seen any changes recently in the environment. Like, for example, do you find it harder to find high-quality parcels of land to buy with quite a few other development companies looking to buy land as well? Do you see that you have to pay higher prices for high-quality lands? Typically, I don't think we see an incredibly different environment. I don't think we see much difference across the country. I think you definitely see the most compression and contention in Auckland, though. In Auckland, the types of factors you're talking about, you do see that. You see crazy prices, and you walk away, and you just go, "I'm not going to buy in those particular instances." Across the rest of the country, meaning like, as I said, the great thing about our model is regional diversity is really, really strong. In a lot of parts of New Zealand, there's not quite the same contention around land, but in Auckland, there absolutely is. In terms of Melbourne, we're seeing a good volume of land options being available. Equally, most of those situations go to tender. You're paying sort of a market price. It's not so much that you're building relationships over a number of years and working with someone to purchase their land. I'd say Australia, good availability of land, but they are market priced. In New Zealand, you're sort of seeing that low availability of land in Auckland, often high prices paid, rest of the country under your normal conditions. Yep. Okay. Great. Thanks. Secondly, what's sort of your outlook on net debt and gearing? Yeah, great to see gearing below 30%, but with an increase in strong build rates looking forward, do you believe you can sort of stay below 30%, or what's your expectation there, please? Look, we'll look to continue to run a conservative level of gearing going forward. I don't expect anything other than what we've looked to maintain historically, which is sort of between 30% and 35%. I think it's probably a reasonable level going forward. Okay. Great. Lastly, do you see any other operational cost pressures at the moment? For example, with a shortage of hospitality staff. Some of your peers, I believe, increased wages for nurses recently with the new COVID outbreak. Do you see any increased operating expenses in the second half? In terms of operating costs, as I mentioned before, COVID-related, not really anything terribly material, but generally with nursing, that's the biggest challenge the industry faces. Obviously, 70% of the industry is not-for-profit or individual owner operator. Obviously, you're seeing the DHBs undertaking that pay equity settlement or trying to achieve a pay equity settlement with public nurses and looking at increasing those to NZD 2.78. A big pressure there between them funding that sector and not funding our sector, and I think a real call for our sector too, for government to take a stand and actually fund the sector appropriately from an aged care perspective and fund their nurses. A lot of, I think, operators in that sector are really struggling outside of the large listed operators who can often cross-subsidize some of these costs. A real challenge for the sector, I think, around registered nurse costs and availability and access to registered nurses from overseas. Just a real challenge in getting paperwork processed from government authorities and getting dedicated access to people and to MIQ facilities would be the real challenges in the sector. Okay. Great. Thanks. That's all for me. Once again, if you wish to ask a question, please press star one on your telephone. To ask a question, you will need to press star one on your telephone. There are no further questions at this time. Please continue, presenters. Look, I'll just say thanks to everyone for participating. Stay safe and take care. Thank you. Bye. This concludes today's conference call. Thank you for participating. You may now disconnect.