Persimmon PLC

LSE:PSN

Earnings Call Transcript 2018-Q3

[Operator]

Hello, and welcome to the Persimmon Trading Update Analyst Conference Call. [Operator Instructions] Today, I am pleased to present Roger Devlin, Chairman of Persimmon Homes. Please begin your meeting.

[Roger William Devlin, Chairman]

Good morning, ladies and gentlemen, and thank you for joining the call. We've got Jeff, Mike and Dave Jenkinson on this call, but I feel it's incumbent on me to make a short opening statement. In a moment, Jeff and Mike will take you through the trading update as usual, but before that, I just wish to address the change in leadership.You will have seen that alongside the trading update, we've made a separate announcement about Jeff leaving the business at the end of the year to be succeeded by Dave as interim CEO. As you will be aware, although the operating performance of the business has been strong for many years, this performance has led to very significant rewards for Jeff under the 2012 LTIP, which have been controversial across the company's stakeholders. Jeff had hoped that outlining his plans to set up a charitable trust and waiving a proportion of the award would enable the company to put this issue behind it. However, this has not come to pass, and after some very open conversations with Jeff, the board has decided that, with regret, it is in the best interest of Persimmon that Jeff should stand down.Jeff has been a hard-working, dedicated and highly successful Chief Executive of the business, and I want to place on record the board's appreciation for the work he's done not just in producing consistently strong operating results but positioning the business well for the future and developing the exceptional talent we have throughout the company. I'd also like to thank him personally for the exceptionally professional way he has conducted himself throughout this process.Most of you will know that Dave, who has been with the business for over 20 years, has worked very closely with Jeff on delivering the strategy that was set out in 2012. He knows every inch of the business, and I'm confident that, together with Mike, we won't skip a beat in this handover period.But this call is all about a good trading update, so please could I ask you that we keep questions today focused on that. And with that, Jeff, I'm handing over to you.

[Jeffrey Fairburn, Group CEO & Executive Director]

Thank you, Chairman, and good morning, everybody. Welcome to the Persimmon Third Quarter Trading Statement. I'm very pleased to say that the autumn season has got underway, and in the traditional way, we've seen a strengthening in the market with good sales rates across our network.We've got around about 370 sites across the U.K. at the moment, which actually is 5% stronger through the course of the same period last year. And trading has been incredibly resilient with total private sales up 3% over the same period. That's backed up by good mortgage support, and approvals are showing positive growth. We've got good levels of continued affordability and very good competitive mortgage products available to our buyers. As you know, we continue to be focused on first-time buyers and first-time movers. And in that marketplace, we're seeing very good demand for our products at the right price points across the U.K.Total forward sales are up by 9% so very strong picture there, deduced under GBP 1 billion, and we continue to show good growth in the business. Over the last 3.5 years, we've opened 6 new operating companies, and I'm very pleased today to announce that we will open a further operating company, taking us to 31 total operating companies around the U.K. That new office will be in South Yorkshire and will commence from January next year. And that's made possible through continued investment in very good opportunities for land and sites throughout the area, which has meant that we're in a very strong position to continue to move the business forward. And actually, I think the key issue there is particularly in relation to the shape of our land bank and the ability for us to have confidence and sustainability over the long term.The office will be located at our site in Harworth, which is where we set to power our manufacturing hub. So we're currently building the office on that site at the moment. And as you're aware, we've already opened a roof -- a brick manufacturing plant there, which is up to full operating capacity, and I'm pleased to say that we're delivering over 1 million bricks a week from that facility. And we're currently on track to construct our roof tile factory, which is underway and will be producing product in the second half of next year.I think it's right to recognize that housebuilding is a very large employer; and at Persimmon, we're supporting over 20,000 construction jobs and a further 29,000 jobs in the supply network. But we continue to look for further opportunities and investment. And one initiative that we've identified and again, are announcing today is the investment in the fourth utility, ultrafast broadband.Our customers' demand for fast Internet speeds and reliable service are clear. We understand that the market is not particularly well served in that regard, and we're very pleased now to be able to offer our own high-quality ultrafast speed broadband to customers on our sites. The company name is Fibrenest and is already supplying customers on 15 of our new developments across the U.K., and this will be rolled out across the whole of the site network as we open new sites going forward. Early feedback is very encouraging with excellent service and the price guarantee to give people confidence about the product. But it really is to recognize the demands on customers going forward in terms of providing a platform for them to receive high-quality Fiber-to-the-Home Internet service.Separately, we're very pleased with the announcement from government of a 2-year extension to Help to Buy. This underpins our strategy of continued investment in land, and in the period, we've invested a further GBP 180 million on nearly 5,000 plots. So for this year, 23% of the new plots that we have purchased have come via our strategic land bank. So that is operating very well.Ladies and gentlemen, Persimmon is in excellent -- an extremely strong position for the future, and we're very pleased with the progress that we've made over recent times. With that, I would now like to pass to questions and answers. And Mike, Dave, myself will take questions from anybody on any aspect of the business. Thank you.

[Operator]

[Operator Instructions] Our first question comes from the line of Aynsley Lammin of Canaccord.

[Aynsley Lammin, Analyst]

Just 2 questions actually. Wondered if you could give a number for the sales rate per site per week. I think in the first half, it was 0.78, so I just wondered what it's been kind of year-to-date. And secondly, I think that you mentioned cash in the statement. Just any kind of guidance as to where cash might be at the year-end. And I guess, just a quick third one. Could you just let -- tell us what percentage of your Help to Buy use has been sold to first-time buyers?

[Jeffrey Fairburn, Group CEO & Executive Director]

Thanks, Aynsley.

[Michael Hugh Killoran, Group Finance Director & Director]

Yes, the Help to Buy -- the first-time buyer comps, Aynsley, within the Help to Buy volume is just a tad over 80%. It's about 82%, and I think that's more or less in line with the average for the industry. And on the sales rates side, Aynsley, I think what we've seen, as Jeff said earlier, we've seen a pickup into autumn. And interestingly, the fact that we have delivered 3% more volume this year over last, or 5% more out, that means that our sales rate per site per week for the last 11 weeks from the interims, the 21st of August, is around about 2% lower than last year. But if you remember, when we talked at the interims in August, we did point out that the outreach sales rate for the year-to-date booked to that point was tracking around 2% well within the prior year, recognizing that the prior year presented quite strong comparatives as well. So we -- as Jeff said, we've seen a normal pickup into autumn, if anything, slightly stronger pickup this year than last year. And I think that speaks to last year's profile, which was pretty strong through summer, if you remember, whereas this summer, we have a number of distractions. People could plan for barbecues and obviously, the World Cup, et cetera, was happening. So I think that this summer was perhaps a little bit more subdued because people have other things that they wanted to do, and that has lent to a position where we're seeing maybe a slightly stronger pickup into autumn because of the slightly different shape this year compared with last. Is that okay, Aynsley?

[Aynsley Lammin, Analyst]

Yes. And just on the cash, any comment now?

[Jeffrey Fairburn, Group CEO & Executive Director]

Well, I think on the cash, obviously, we have so far had a very good year's trading and -- but we would point to land where we've continued to invest strongly. So there's still a lot to do before the end of the year.

[Michael Hugh Killoran, Group Finance Director & Director]

Yes. I mean, I think in terms of year-end sort of position, Aynsley, if that's what you're trying to get a feel for, as Jeff said, I think, there's -- as always, there's an interesting land pipeline that we've got to see the clear timing on. And as you know, those deals will drop, and they will drop. And it -- we just need to see how those progress from now to the end of December and beyond. But there's also quite a lot of completions to take as well. So there's quite a lot of build to complete, so -- and product to finish off as we would like them to hand over. So I think there's many moving parts still, but it's a positive prognosis. I think the year-end cash position is going to be a positive position and will place us in a strong position to review any proposals for the capital return that will come to market in February next year as we normally do subject to our annual review. So I think the -- it's quite a positive backdrop, we would say, in terms of giving us choices, if you will, in terms of the liquidity that the business enjoys.

[Operator]

Our next question comes from the line of Gregor Kuglitsch of UBS.

[Gregor Kuglitsch]

So one question on trading, if you can just kind of -- margins, obviously, weren't mentioned in the statement, if you can kind of give us some kind of steer. I think when you last spoke in August, you were still talking about sequential improvements vis-à-vis the first half, I want to just kind of have confirmation that, that hasn't changed for any reason. And to the extent that you can, I think, at the time, you were also talking about -- I think the exact words was something like a couple of years of further margin expansion, albeit at a slower pace. I think may not be quite what you said, but I think that was the gist of it. If you could kind of give us some assurance around that. And then, sorry if I'm breaking protocol with regards to the management change. I'd be interested to know, one, what the kind of the time frame is with the search for a new Chief Executive; and then secondly, to the extent that Dave and Mike, obviously, who are in a similar position as regards to the LTIP, any kind of comment they would like to make as to their commitment to staying with Persimmon.

[Roger William Devlin, Chairman]

I'll just address the search element. Headhunters will be appointed, really, to sort of benchmark Dave, who we have massive confidence in him as interim, and I don't think you should expect any announcements on this much before Easter time. I will allow Dave and Mike to speak for themselves in this, but clearly, I've had conversations with them about their ongoing commitment to the company, and it is absolutely total. They are significantly invested in the business. They've worked here for a long time, and I believe it's their intention to be here for some time to come.

[David Jenkinson, Group MD & Executive Director]

Yes, Roger, as far as I'm concerned, that's right. We're here to do the right thing for the company and see it through this period of time, and we'll commit this as long as we're needed.

[Michael Hugh Killoran, Group Finance Director & Director]

Yes. And I think the key thing here is that the business is in a very strong position. I think as Roger commented earlier, Dave has been instrumental in working with Jeff hand in glove in placing the business in such a strong position. And I think that the quality and depth of the team that we have working alongside us across the company will ensure that Dave and myself are very well supported in continuing to deliver continued success for the business moving forward. So I think we've got a lot of talented people in this business that are hungry for success. They want to achieve their own personal objectives as well as the objectives that we've set strategically for the business. And I think that what -- both Dave and I are looking forward to enjoying working with that team over the long term to continue to deliver benefits for our shareholders but as Jeff points to the wider stakeholder groups that have an active interest in our business. So I think that Dave and myself -- I'm not here to speak for Dave. But Dave and myself have remained very excited about the opportunities that are ahead of us, and that pays testimony to the hard work that Jeff has put in to leading this team to position the business so well in the markets with the challenges that we've got ahead of us, which we remain very mindful of. I mean, just moving on to the margin point, Gregor, if I may, yes, I mean, we have pointed to further progress on margins moving forward. That is still the case. There's no reason to believe that we can't continue to deliver on that ambition. We've got all the moving parts that we need to deliver on that. Now the only caveat on that is circumstances outside our control, which I'm sure you would acknowledge that with the prospect of quite a significant structural change for the U.K. economy with exiting the EU and the challenges with respect to global trade wars and the like, then as you know and the audience knows, there's a lot of uncertainty out there. So we have to do what we can with the things that we can control, and we will be working 24/7 as always to deliver the best outcomes for the business.

[Operator]

Our next question comes from the line Will Jones of Redburn.

[William Jones]

Yes, 3 for me if I could please. The first just, I guess, I think in the statement, you talked about being fully sold up for the year, which, I guess, we'd expect in November. But perhaps you could help us with your views there for what it means for, I guess, at least the top line with regard to volumes and price for the P&L in 2018, obviously, assuming that completions all happen on schedule through to year-end, please. The second was maybe just perhaps you could update us on any anecdotes really around the customer care side of things. Clearly, I think the data we see externally is only really once a year, in the early part of the calendar year. So anything you, I guess, know of on -- at the midpoint of that time frame? And just to update us on, would be great, around Persimmon's performance to the customers. And then the last one, really just, I guess, expanding on the Help to Buy news last week but I guess, particularly digging into the price caps that -- how you saw those, particularly on the more northern regions and I guess, just whether it has any implication as to how you think you might operate strategically either between now and '21 or now and 2023, obviously, as the various changes look to come in.

[Jeffrey Fairburn, Group CEO & Executive Director]

Thanks, Will. Well, I'll just take the last question first, if I may, on Help to Buy. Yes, it was interesting to see the revised process that was announced for '21 through to '23. And as you can imagine, that plays pretty well to our focus on the business, and I think we're extremely well positioned on that. And we've done a little bit of work in terms of analyzing the sales that we've taken in the first half of this year, and roundabout 85% of the sales do fall within those price cap levels as outlined by the government across the U.K. So I think it's a very positive picture for us, and we're well positioned for the future in that regard. But we've -- by design, we, as you know, are very keen on ensuring affordability, and people's ability to buy is still very good at the lower price points. And we'll continue to focus on that. In terms of customer care, we've continued to make good progress on that, Will. We have seen a step forward in all of them almost over the last few years, and this year continues that trend. But there have been some challenges around issues such as whether the earlier part of the year, which I think, for the industry set that construction takes back in that regard, so there was a catch-up area there, really, in order to ensure that we could get more work in progress on the ground to achieve handover dates, which are satisfactory from the customer's perspective. But we still got more to do. So we've got lots of initiatives. We've got an excellent process in place, which is providing good results, and we continue to see the benefit of that. So there's more work to do. I think one thing I'm very clear about is the quality of our houses at handover is excellent. We verify that, and we'll continue to do so. But we need continued focus on both the period of moving a customer into a property and managing that process and also the after move-in date of ensuring that works are completed on time in terms of various minor snagging works and so forth. So there's still challenges there, but I think we've made excellent progress.

[Michael Hugh Killoran, Group Finance Director & Director]

Just on the top line, Will, obviously, we're not in the business of giving forecasts. You know that, so nice try. But I'll tell you where the consensus is. You probably got your own view on that, but something around GBP 3.5 billion to GBP 3.6 billion of sales, which will be maybe 16,400 or maybe a few more units this year, which we think will be a great outturn given the challenges. But it does demonstrate the, as Jeff said earlier, the resilience of the demand with respect to our positioning in the market with respect to having a greater weighting, if you will, within our mix of offer on each of our sites, which is obviously trying to support first-time buyers and first-time movers, albeit we always do try and provide a good brand and choice on all of our sites for customers that would like to buy in the locations where we're building.

[Operator]

Our next question comes from the line of Jon Bell of Barclays.

[Jonathan Matthew Bell, Director]

I was going to ask you about the Help to Buy caps as well, but Will's taken that one. I've got a couple of others, though. Firstly on bricks, could you just remind us of your external brick needs in the New World? And anything you can give us on the annual brick price negotiations? And then secondly, just wondering how Charles Church has traded over the period, whether there's any interesting trends in that?

[Jeffrey Fairburn, Group CEO & Executive Director]

Yes. Thanks, Jon. Yes, bricks, we have said that our new facility can and is providing about 2/3 of our requirement overall. So we've still got a substantial external requirement, and we've got good relationships on a number of channels in that respect, which we work very well with those suppliers, and I believe we'll continue to do so. I think as we've said before, in terms of these materials, particularly for our sector, there are shortages, and therefore, that does lead to some price pressure. And I think we'll continue to see that. But we have obviously put ourselves in a good position to ensure that we can negotiate well in that respect, so we don't anticipate significant increases to our own supply in that regard.

[Michael Hugh Killoran, Group Finance Director & Director]

I mean, on Charles Church, Jon, obviously everybody appreciates Charles Church is a more aspirational purchase for the customer in perhaps more price locations with greater amenity value. As you know, we've been repositioning both the Persimmon but more importantly the Charles Church brand over recent times, whereby Charles Church has a greater focus on that premium offering. It's not luxury, but it is a more aspirational purchase, as you know, has an average price of around about GBP 340,000, GBP 350,000 traditionally, depending on the mix. So we're finding that Charles Church is still attracting good levels of interest in its markets. We are pretty selective in terms of where we offer Charles Church having done the market research and understanding the housing need in those particular areas. So I think that we're happy with how Charles Church is performing. More recently, you've seen the quality of the earnings delivered by the Charles Church business has moved forward, albeit the number of units sold has come back a little bit because of that repositioning. But we feel that the Charles Church position -- business is positioned very strongly in the locations where there is good demand for that type of product. And I think those are the typical ingredients, as you know, Jon, to make sure that any part of your business has -- is on a robust footing to do pretty well in its market.

[Jonathan Matthew Bell, Director]

Can I just ask one follow-up really on the brick side? So the 1/3 of your requirement that is coming externally, is that all clay bricks? Or are you still purchasing some concrete bricks from outside?

[Jeffrey Fairburn, Group CEO & Executive Director]

Yes, it's a mixture actually, Jon. So we've got 2 main suppliers: 1 brick -- 1 clay and 1 concrete, but we've got with a more localized suppliers as well. So it's a mixture, but there's 2 main suppliers, 1 of each.

[Operator]

Our next question comes from the line of Ami Galla of Citi.

[Michael Hugh Killoran, Group Finance Director & Director]

Ami?

[Ami Galla, Senior Associate]

Can you hear me?

[Jeffrey Fairburn, Group CEO & Executive Director]

We can hear you now, yes. There you are. Yes.

[Ami Galla, Senior Associate]

Sorry for that. So I just have 2 questions here. Firstly, if you could give us some color on the -- across your regional businesses, the differences in trends that you've seen in the autumn selling season so far. And the second one on the land market, could you give us some commentary around the intake margins that you see in the land market today? And how has the backdrop evolved over the last 6 to 12 months?

[Jeffrey Fairburn, Group CEO & Executive Director]

Thanks, Ami. Well, sales, I'm pleased to say that, again, as is usually the case, we see good trends right across the U.K. And I think that's really borne out of the fact that we've got a very good mix of house types at the right price point. So we're not seeing any signs of particular strength or weakness anywhere, which is good, and all of our regional operating companies are doing very well in that regard. What was the second question, sorry, Ami?

[Ami Galla, Senior Associate]

The second one was in the land intake margins, if you could give us some sense of how that has evolved over the last 1 year.

[Jeffrey Fairburn, Group CEO & Executive Director]

Well, again, it's pretty similar to what we've seen over recent times. So each site is, each potential opportunity's looked at on its own merits. And given the fact that the group is in such a strong position in terms of its land bank, each of the 31 businesses, as will be, has a sustainable supply of land. So we're not exposed in terms of having to buy sites to maintain an individual company. So we could be pretty selective in that regard, and we tend to judge the circumstances as they occur. So if a site comes forward, if it's a particularly large site, obviously, we're concerned with the payment terms but also because of the longevity of it. We may well expect to get higher margins. So there aren't any particular hurdle rates that we aim for, but what I can tell you is that our intake margins that we have seen or continue to see are in line with what we have been achieving previously. So I think that's positive, which means that we can certainly maintain our position and given the strength of value in the land bank, as Mike said earlier, then we expect that to show and come through as we continue to move the business forward.

[Operator]

Our next question comes from the line of Charlie Campbell of Liberum.

[Charlie Campbell, Housebuilding Analyst]

I think just 2 questions really. The forward sales you've given up -- given is up 9%. I just wonder if you could split that between volume and price. And I mean, if not, maybe just give us an idea of what you're seeing underlying house price inflation through the year. And then second question just on valuations. You talked about the mortgage market being pretty supportive, competitive. But are you seeing any down valuations anywhere across the group at the moment?

[Jeffrey Fairburn, Group CEO & Executive Director]

Thanks, Charlie. Well, I'll deal with the second point, if I may, because I think it is interesting. But in terms of valuations, there's no real change in behavior that we've seen. Obviously, we are keen to make sure that we get the best price that is available in the market. So certainly when we get on to a new site, that is the opportunity, particularly if it is outside of a normal settlement area to ensure that we get the strongest possible price on the first release. So you tend to see a little bit of tension around valuation on -- in that regard. But generally, in the marketplace, prices are firm, and we're seeing valuations holding up on the sales that we're taking. So that's very positive for us. Mike, do you want to deal with...

[Michael Hugh Killoran, Group Finance Director & Director]

Yes. I mean, on the forward sales, Charlie, the balance within the book, we -- the PD order book is more or less in line in terms of pricing, but obviously, that will be influenced by mix to a degree. The strength is in the affordable business, which is really delivering that 9% increase where we've got about -- around about 650 additional booked orders within our affordable -- the affordable elements of the forward sales book. So that's great to have. We're very keen to deliver low housing for lower income families through our housing association partners. It is a bit lumpy in terms of when those contracts come through, but I guess, it's a good reflection of the fact that we've got quite an interesting pipeline of new outlets coming through into the New Year, which gives us confidence that we'll have a strong platform for sales moving into next year with some new sites opening up and delivering these units as we move through the next year. So we're pleased with the position we've got, but the strength in the forward order book compared with last year, that sort of 9% number, is coming out of the affordable end of the book, PD more or less in line.

[Operator]

Our next question comes from the line of Chris Millington of Numis.

[Christopher James Millington, Analyst]

Just a couple for me please. Jeff, you just mentioned that pricing's firm. I just wondered if I could you push on that any more, whether there's been any material change on what you're speaking about at the interims. So that's the first one. Second one's just about overall cost growth feeding through the business. And then my final one is just talk about management changes outside of the exec team level. I just wondered if there's been any kind of notable departures, either kind of regional or senior level throughout the organization.

[Jeffrey Fairburn, Group CEO & Executive Director]

Thanks, Chris. Yes, I think, I mean, on the pricing issue, it's pretty much in line with what we reported before, Chris, so no real change in that. I think that, I mean, cost inflation, we said before that there is pressure in that respect. But for the full year, we would probably -- so for a 12-month period, it was probably, say, 3.5% to 4%. So it is at a manageable level, but it does vary from product to product. And of course, we've got a bit of mitigation in any effect in that regard. I think in terms of the management team, it's a strong picture. As the Chairman said earlier, we've got real strength and depth in the management team, and we've got a good structure in place, which gives excellent opportunity for people to come through the business. We've got a great record of that. There has been a few changes lower down the management structure, but nothing more than we anticipated, a handful of people in that regard. But I think that's positive. What we've got to recognize is that, as I mentioned earlier, we've -- this will be our seventh new office in -- within 4 years, and that has created great opportunity for people that we manage to move into new positions created. But of course, going forward, we've got a very strong platform now across the U.K. and we need to keep creating opportunity for the very good talent coming through the business. So it's natural and very healthy for us to see people coming through and people retiring. And that's the normal sequence of events. So nothing really to be concerned with but a positive picture.

[Operator]

And we have one further question in the queue, and that's from Kevin Cammack of Cenkos.

[Kevin Malcolm Cammack, Building and Construction Analyst]

Actually, is the Chairman still with you? I've got one for him. Or he may have departed the quorum.

[Roger William Devlin, Chairman]

Yes. No, I'm here.

[Kevin Malcolm Cammack, Building and Construction Analyst]

Well, let's start with that one then. I mean, obviously, you've done a fair whole round of counseling shareholders, I guess, first and foremost, on the LTIP scheme. But I'm just wondering if there was anything else that cropped up in those discussions, general discussions that you've been having that might be on your agenda to consider over the next 6 to 12 months. And the one -- just a bit of an odd one, I know, but just a question I've got on this Fibrenest thing. Just for me to understand, is this your own scheme that people would subscribe and pay a monthly charge to you? Or is it -- or are people free to sort of use any system? I'm just slightly unclear on it.

[Jeffrey Fairburn, Group CEO & Executive Director]

Yes. I'll deal with that point first, Kevin, if I may. So Fibrenest is incredibly our own scheme, and it is end to end from our own service to the customer's home providing ultrafast speed, broadband, and it is really borne out of this issue, as I mentioned, to provide an excellent service for the customer. And we've seen customers disappointed with the availability and products that are on the market, and the speeds, in some respects, are absolutely dreadful. And like many things that we believe there's an opportunity for us to provide a better facility, a better service to the customer, and that is what this is about. So it's about excellent service for the customer at a good price. And we've got a price guarantee in that regard to give the customer confidence that it's good value. As with any location, any sites, there are opportunities for other providers to come in to provide customers. However, we install the infrastructure. We install infrastructure for BT on older sites. And in that regard, we're installing infrastructure for ourselves on our new sites. So that is really the -- what the scheme looks like as we've announced today.

[Kevin Malcolm Cammack, Building and Construction Analyst]

Okay. Can I just ask then, who actually -- do you administer the scheme as such? So if I opted for your systems and then 2 weeks in or whatever, I suddenly can't get Sky Sports on a Sunday afternoon, do I phone -- who's admin do I -- effectively, do you have to send someone around to solve it and everything? Or is it...

[Jeffrey Fairburn, Group CEO & Executive Director]

I think the first thing, Kevin, it's not a scheme. It's a service, so it is just like any other Internet provider. It is exactly the same, but it is a high-quality service. And we have engineers who install the service. We have engineers to provide any detailed issues and repairs that are required. We've also got -- we've got partners that we're working with in that regard, and we've got a customer service department who deal with orders being placed and also any issues that may occur. So it's a full end-to-end comprehensive service. And Chairman, would you like to deal with the first point?

[Roger William Devlin, Chairman]

Yes, yes, yes. I mean, Kevin, look, I mean, the conversations, which I hold are essentially private, and it's important that I respect that. As you've learned from this call, I mean, you all know the track record of this business is first class. The current trading is in good shape, and we're positive about the future. But I was very clear that as I went around the shareholders, the noise and distraction around Jeff's remuneration was defining broader stakeholder views of Persimmon, and by broader, I mean, shareholders, customers, politicians, whatever. And this was sadly damaging the company's reputation, and we had to take the action that we have taken. And I guess, if there is any learning from this, it is that financial outperformance, which this company has achieved in spades, doesn't trump absolutely everything, and that's kind of where we are.

[Operator]

Thank you. That now concludes the question-and-answer session. I'll now hand back to our speakers for the closing comments.

[Jeffrey Fairburn, Group CEO & Executive Director]

Well, thanks very much for your questions. Together with our senior management team, the board looks forward to hosting our Capital Market Day both this evening and tomorrow, and all of the contents of that will be available on the website for everybody to review. We will welcome our guests to hear of, firsthand, how Persimmon continues to perform so strongly and how we show innovation and differentiation in our sector.So thank you for joining us on this call. We look forward to continued success as we work through to a positive conclusion to the full year 2018. The business is in excellent shape, and it is our intention to update the market in relation to full year trading in the New Year. Thank you very much. Good day.

[Operator]

This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.