Henry Boot Stock

Yes. So morning, everybody. We're going to have the normal running order. I'll start off with an introduction and then an overview of performance. Then Darren is going to go through financial and land promotion, then I'll come back and do development and Stonebridge and finish off with outlook.

So our focus on high-quality land, prime developments and premium homes has helped us to achieve total land and property sales of over GBP 350 million or our share GBP 193 million. Demand from housebuilders has been particularly strong for our prime residential land, even though the housing market has been slow. I'm pleased to say we've seen a significantly better planning environment since changes were made to the NPPF and our early investment in Hallam back in 2024 has already started to pay off, allowing us to nearly triple the amount of planning applications made last year to 11,000 plots. Planning has also been secured for Golden Valley and our industrial-focused JV Origin is performing well with the initial schemes completing on time and budget, and we're committing more. So we're managing to grow our development program.

We completed on both the first tranche of the Stonebridge acquisition, becoming the majority owner and on the sale of Henry Boot Construction. We continue, therefore, to simplify the group structure and increase our focus on our core activities. Clearly, Stonebridge hasn't performed very well. However, we've taken action and believe fundamentally, it's a business that will contribute to the growth -- the group's growth and return in the future.

Throughout this period, our balance sheet remained rock solid. Our NAV is just over GBP 3 per share. And as you all know, it's very conservatively assessed because all our land and developments are held at cost.

So going through the operational performance. I'm pleased to say that last year, as a whole, we delivered a performance in line with market expectations against at times a challenging backdrop. There have been some great achievements in the year and some areas where we know, I know we need to have a plan, we've got a plan, but also we need to do better. Hallam did exceptionally well, selling a record of nearly 4,000 plots, exceeding its budget by 13%. We also replenished our consented sites ready for sale by achieving planning on nearly 4,200 plots. And as I said, we submitted applications for 11,000 plots and our aim is to achieve a similar amount this year.

Our land portfolio has increased to 106,000 plots and our consented stock now stands at just over 9,000. As I said last time, we continue to grow more or put more emphasis on securing planning consents and increasing plot sales because we think that the portfolio is big enough, it's got scale and it's got balance.

Turning to development. In the current environment, we've been very disciplined and selective over new projects, so we've completed on GBP 33 million of development. Origin is performing well with over 700,000 square feet of industrial, either recently completed or committed. Lettings are being achieved ahead of business plan. The investment portfolio generated a great total return of just over 11%. And again, that's well ahead of the index.

Looking at home building. Stonebridge completed on 185 homes, materially below our expectations, which isn't good enough. While selling prices were in line with budget, we experienced soft trading conditions with delays in securing detailed planning permissions impacting the opening of new sites. We also saw some cost overruns. However, we see great potential in this business and to support this, we've added nearly 1,000 plots to the land bank. We've also started to reset towards the end of 2025 and expect to return to a small profit this year. And where does that mean we all got to? It means once you add in construction and deduct central operating costs, group operating profit was GBP 33 million.

I just want to spend a minute on the medium-term targets. Although progress has been made against some of those objectives, persistent economic and political uncertainty has made it difficult to achieve them in the original time frame. Also, as Darren is going to explain, there's been a reclassification of the group's main borrowing facility, meaning the capital employed measurement has increased. This, together with simplifying the group structure, plus the improved outlook for Hallam means we're going to look to refresh these targets during 2026. In particular, we need to look at the capital employed and return targets. On returns, I would add that as the vast majority of our sites are held in promotion and development agreements, options or discounted freehold, all of which is held at cost. I remain confident that when normal levels of volume return to our markets, we can generate attractive gross margins.

Also, we will look to increase the land promotion plot sales targets that we expect to achieve in the medium term. Looking at HBD, with the start of Phase 1 of Golden Valley late this summer and other industrial projects, we anticipate committed developments rising to around GBP 150 million our share. Much of that profit will flow into next year and beyond. The investment portfolio, as I've already alluded to, is one of Henry Boot's successes. We continue to be patient in growing it with the emphasis on performance, not size, but it's still expected to grow from the GBP 120 million as we complete on Origin developments.

If you look at Stonebridge, if you exclude 2025, over 10 years, output has increased by an average of 24% per annum. We still believe it is a growth business. We're still clear that operating in 3 regions and in a stable market, we can get to 600 homes per annum. As we change the group, we also need to change the way we work. In anticipation of the sale of HBC, the integration of Stonebridge and our ambition to create a more agile and robust organization, we started our future ways of working program in March of last year. The program is designed to drive efficiency, improve collaboration and the sharing of expertise and resources across all of our 3 core businesses.

This includes reshaping teams within the group to result in a leaner central function where we've reduced heads by 23%, and we've also reformed our Executive Committee. We've also implemented for the first time the first phase of Dynamics 365, bringing all our data together to be used more effectively for decision-making. The program has already delivered a reduction in central overheads of 20% in 2025 with further savings anticipated in 2026.

So Darren, over to you.

Thank you, Tim, and good morning, everyone. So this year, we are presenting our financial results, including discontinued operations. Hopefully, this will give a clearer picture of performance over the period. Discontinued operations are Henry Boot Construction, which we sold on the final day of last year. We performed well in a challenging environment, although revenue reduced by 6% to GBP 307 million as a result of lower new home sales, which were partially offset by higher strategic land disposals. The reduction in admin expenses was offset by lower gains on property sales and revaluations, resulting in operating profit being marginally lower at GBP 33 million with underlying profit of GBP 28 million, and that excludes valuation movements on completed investment properties.

Our return on capital employed was 7.5% before the revised classification of the group's main borrowing facility that Tim mentioned. That is reconciled on a slide in the appendix for anybody looking for the detail on that. As Tim has already also mentioned, we have significant opportunities across our portfolio. And through the cycle, we continue to believe we can deliver attractive returns. Earnings per share increased by 1% to 17.6p, and we have increased the dividend by 2% with our decision to hold the final dividend at last year's level, consistent with our policy to invest selectively while acknowledging the importance of delivering an income return to our shareholders.

Looking to the balance sheet. Investment property, including our share of joint ventures has increased to GBP 119 million, and that's after more than GBP 15 million of profitable sales during the period. We've seen further strong rental growth for our industrial assets and made good progress growing our Origin joint venture. Inventories increased by GBP 35 million as we added to our consented land bank within Stonebridge Homes. We anticipate our investment will be more limited this year as we look to recycle capital from both work in progress and via selective land sales to optimize site size and increase outlet numbers over the medium term.

Following investment in land and developments and the sale of Henry Boot Construction, net debt increased to GBP 108 million with 20% gearing slightly above our target range of 10% to 20%. We expect gearing to move back towards the top end of our target range this year as we look to complete several disposals across the group, although again, this will be largely H2 weighted.

In January '25, we completed the acquisition of 12.5% of Stonebridge Homes, taking our ownership to 62.5%. As a result of this and the distribution of dividends, our underlying net asset value per share, excluding the pension surplus was flat at 312p.

Looking at the cash flow, the cash flow bridge here shows how cash from operations, investment property sales and debt funding have allowed us to continue to invest in homebuilding and property development within our Origin joint venture. Cash inflows from operations totaled GBP 9 million as returns in the period comfortably covered payments for interest, tax and dividends. Along with this, profitable sales of investment property generated GBP 15 million, and this cash generation has been recycled into GBP 37 million of investment in inventories to grow land and work in progress in Stonebridge.

Investment in our development program and funding of planning costs within Hallam to bring forward sites for sale has been broadly self-funded from disposals, recycling capital back into inventory, which is broadly flat over the year for those businesses. As previously mentioned, we purchased a further 12.5% of Stonebridge. That was for a fixed sum of GBP 10 million with future fixed payments and importantly, final performance-related adjustments expected to conclude in 2031, following us taking full control at the end of 2029.

Whilst we continue to grow our Origin joint venture, this is actually largely funded from returns on land disposals into the joint venture itself with net cash generated of GBP 1 million. Other working capital increased by GBP 22 million following land sales to housebuilders on deferred payment terms and the sale of Henry Boot Construction. As such, we ended the period with net debt of GBP 108 million.

So if I can move on now into the operational review and starting with land promotion. Hallam sold a record 3,957 plots in the period, and this demonstrates strong demand for our prime deliverable sites from housebuilders. At an average gross profit per plot of GBP 11,400, we achieved an operating profit of GBP 32.9 million, an absolutely amazing result, 34% up on the previous year. This result was achieved from sites sold, which took an average of 13 years to deliver, but which achieved an average ungeared IRR of 27%, again, an absolutely fantastic result.

Over the term, our land promotion business has delivered significant returns with the return on capital employed averaging 17% over the last 10 years and above the group's target range. Whilst we have been -- whilst there have been annual variations, even during the initial COVID period, the business achieved double-digit returns. The scale of the portfolio allows us to mitigate site-specific risks. And whilst we are clearly correlated to demand in the housing market, this can be mitigated to some extent through forward sales. As we move forward, our focus is on continuing to secure planning permissions and increasing sales, whilst continuing to grow the portfolio at a modest level.

Following the government's revision to the NPPF, we have seen positive changes to the planning system, which have significantly increased our ability to secure outline consents. The planning environment has been positive for securing outline consents. And during 2025, we achieved planning for nearly 4,200 plots, a 39% increase on the previous year. This is also a significant increase when compared to the 3-year average of around 600 plots to the end of 2023, given we saw the positive impact of planning changes start to come through in late 2024.

We've been successful in utilizing the appeal system to unlock more sites, and we've won appeals on nearly 3,000 plots across 7 sites in 2025. This included 1,000 plots in Ashford in Kent in December, which is currently under offer. And then we made good progress on our target of submitting 10,000 plots into planning last year with just over 11,000 plots submitted, and we expect to submit a similar level this year. Plots we're planning increased to over 9,000 and with a further 19,000 plots awaiting determination, in this supportive environment, we expect our stock of plots with planning to increase over time.

We continue to manage one of the largest strategic land portfolios in the country with over 105,000 plots, of which 76% is in the Midlands and South, where values tend to be higher. With the balance of freehold and promotion agreements, we're able to manage capital investment appropriately between risk and reward, taking advantage of the right time in the cycle when acquiring freehold land, which is more capital intensive. Our use of planning promotion agreements provides a capital-light investment structure and gives us our USP against housebuilders by marketing the sites to drive best value for our landowners. Our 5-year average plot sales are running at almost 3,100 plots per annum, and we anticipate plot sales of over 4,000 this year, which will increase our rolling average closer to our medium-term target of the 3,500 plots.

Sales in the period delivered an average of GBP 11,000 gross profit per plot, driven by a particularly profitable freehold sale in Ambrosden, bringing the 5-year average back up to GBP 10,000 per plot, a level that we believe remains achievable over the medium term. Whilst we anticipate volume of plots in 2026 will increase, the anticipated sales mix with a higher percentage of promotion agreements and a lower share of freeholds is likely to result in profit per plot being lower than our typical rate of GBP 10,000 per plot with a corresponding impact on operating profit.

With our portfolio all held at cost with no gain on securing planning recognized until the land is sold, this continues to reflect a significant uplift in value not recognized in our balance sheet. As shown in the table at the top, based on the recently achieved gross profit per plot of GBP 10,000, the 9,000 plots that we have with planning have the potential to deliver gross profit of GBP 90 million over the short term. In addition to this, we have almost 20,000 plots awaiting determination. This significantly derisks 27% of our total land bank and has the potential to deliver a further GBP 196 million of gross profit.

The full portfolio over time has the potential to deliver over GBP 1 billion of gross profit. And as we did for the first time at the interim results in September, we're presenting an illustrative net present value for the total portfolio, which can be seen in the table down at the bottom. These figures are based on a range of gross profit per plot, but using average hold periods and making adjustments for overheads and tax. The matrix also includes a range of discount rates. If we use GBP 10,000 per plot, this shows a potential discounted profit after tax to come of GBP 181 million to GBP 256 million, which is equivalent to an overall NAV uplift of between 43% and 61%. Whilst there are, of course, risks to unlock this value, the business has a strong track record of mitigating these and with a portfolio of over 200 sites is not reliant on a few large schemes to deliver returns.

And on that, I shall hand you back to Tim.

Thank you, Darren. So I'm going to turn to property investment and development. We completed on GBP 119 million of development, our share GBP 33 million, with 32% of the schemes having been pre-let or presold. Understandably, we've been selective in starting developments with the majority of our completions coming from Origin, which I'm going to provide more details on the next slide. Our committed schemes now total GBP 66 million, our share, GBP 18 million. Our share of the estimated total profit is GBP 4 million or 28% profit on cost, of which only 30% has been taken to date. In the case of Origin schemes, this doesn't include the profit achieved in transferring the land to the joint venture nor the potential to earn promote fees. We'll remain selective in building up our committed program. But as I'll explain, we've got significant near-term opportunity from our GBP 1.4 billion pipeline.

Now in terms of Origin, the initial JV was seeded with 3 sites with a combined total of GBP 100 million GDV or nearly 450,000 square feet of industrial. All the schemes recently completed on time and budget. In line with the ambition to scale up Origin, at the end of 2025, we added a further 3 schemes totaling around 260,000 square feet with a GDV of GBP 56 million. So that total is GBP 156 million. Our share is GBP 39 million. Out of the total of 700,000 square feet, I'm pleased to say 134,000 square feet is let or under offer and lettings, as I've said already, are ahead of business plan.

Now I've talked about the strong pipeline, and that puts us in a good position to respond quickly to market conditions. And I'll talk you through these 3 schemes, starting off with Golden Valley. We're working with our partner, the Cheltenham Borough Council, we expect to obtain detailed consent shortly on Phase 1. We've agreed terms with the anchor tenant and other occupiers in the cybersecurity field, and the scheme is fully funded by the public sector. We're aiming to start on site late summer.

Then last year, we secured planning to develop FREEPORT 36, a 5.5 million square feet industrial and manufacturing park with buildings ranging from 40,000 to 1 million square feet in size. This is in partnership with the landowner, St. John's College, Cambridge. We've already got occupier interest. And again, we're aiming to start on site later this year.

And then finally, as we pivot our urban development to more specialized cyber and tech subsector, in conjunction with the Imperial War Museum, we've submitted planning to develop AvTech, Duxford, a 430,000 square feet campus close to Cambridge dedicated to developing low and zero carbon aircraft technology. As I said, the investment portfolio is being one of our successes. Our total return was 11.1% in 2025, again, ahead of the index at 7.1%. The line graph, as I usually show, shows that our total return compared with the index since the start of 2020 is 7.8% versus the index at 3.8%. So we're outperforming the index by over 100%.

During the period, we secured GBP 17.7 million worth of sales at an average 12% premium to book. The largest scale sale was Skelmersdale, where we secured planning for a new 245,000 square feet industrial. The property was sold for GBP 9.5 million, achieving an IRR of 25% per annum. Post period, we completed the sale of a supermarket that we previously developed in Warminster for GBP 8.6 million at a 7% premium to valuation.

Looking at Stonebridge. Stonebridge completed on 185 homes in 2025 at an average private selling price of GBP 403,000. The majority of the operating loss was due to completions being materially below our expectations of 240 to 250 homes. Completions were lower due to several reasons. As you know, the housing market was subdued last year, and our net private reservation rate was also affected by trading from outlets where towards the -- where we were towards the end of our sales program.

So in essence, we weren't offering the full range of homes on those sites. Delays in securing detailed planning also reduced the opening of new sales outlets. We operated from an average of 9 outlets compared to the budget of 12. In addition, around 30 completions moved into 2026 as build schedules were delayed by utility connections and changes in planning conditions. The remainder was caused by cost overruns related to unusual ground conditions and additional costs associated with extended site durations. Again, those extended site durations are caused by slower sales rates. In response, we've increased contingency within schemes to better reflect project delivery time.

Since becoming the majority owner, we've identified key priorities to improve and professionalize the business. This includes making major changes to the senior management team, in particular. We've replaced the Managing Director with the interim appointment of Ed Hutchinson, our MD of HBD. Ed has got extensive experience in building and construction processes as well as land acquisition and planning. He's already making an impact on the business. We've also replaced the FD with an experienced senior member of Henry Boot's finance team.

Supported by our group functions, we're investing in our Stonebridge people and systems to strengthen our capability and customer experience. We're also focusing on enhancing operational efficiency to create stronger links between teams. And then using Hallam Land, we've reviewed the land portfolio to better align scale and location with our premium home strategy. Whilst it's still early in the year, we've seen an improvement in trading with the sales rate for the 11 weeks to the 15th of March at 0.43. That's up 25% year-on-year. This week, which has just ended, and that wasn't in the sales figures, guess what, one of the best weeks we've ever had, and that would increase the sales rate year-to-date to 0.5. Our guidance for 2026 is completions of between 200 and 220 homes.

So finishing off with outlook. As we consider our markets at the start of this year, we've been encouraged by the continued demand for our high-quality land, early signs of letting activity in HBD and sales rates improving at Stonebridge. However, we'll need to see how the prolonged -- how prolonged the conflict is in Iran to gauge the extent, if any, on the effect of the outlook for 2026. Regardless, we continue to make good strategic progress by focusing on quality projects within land, promotion, development and homebuilding. Hallam remains a core driver of value where we are growing its store of worth. We expect to have another good year, although we anticipate a sales mix with a higher percentage of promotion agreements and less freeholds. So our profit per plot is likely to be lower.

HBD is preparing to commit to more of its near-term developments with industrial remaining a key focus through Origin alongside nationally significant schemes like Golden Valley. We anticipate Stonebridge Homes will begin to recover during 2026, as I've said, making a small profit. With a clear reset plan, we believe we'll get back on track to achieve our medium-term growth targets. As in previous years, we expect our performance to be half 2 weighted. However, there are significant opportunities across our portfolio, plus the benefits of a rock-solid balance sheet, leaving us well positioned to not only deliver against market expectations for 2026, but also to get back on track to hitting our growth and return targets in the medium term.

So we've got some questions, and I think we'll wait for the mic. And I feel as though Tom just be edging to the draw.

It's Tom Musson at Berenberg. Maybe if I ask one first on Hallam land sales in 2026. It sounds like from what you're saying, you might have some visibility on gross profitability levels just given the mix of land types that you're talking about. Are you able to perhaps quantify how far below that GBP 10,000 profit per plot average you might expect to transact on this year?

Well, we've got -- first of all, we've got pretty good visibility. So we've got 15 sites that we anticipate that we will sell this year. And the majority of those sites have either exchanged or under offer and then a minority of them are either in the market or about to go to the market. And if you think about it, that makes sense, isn't it, because selling big bits of land takes some time. So we're getting our ducks in a row.

So we do know the mix of the likely profit per plot so long as, of course, we achieve the prices that we are anticipating. And I've got to say, so far, this year, we've had a good run, and you saw the demand that we had for our residential land last year, the housebuilders want to buy land. So yes, we've got a view on what the profit will be, and it's likely to be about 20% below the long-term average. Anything you want to add?

Yes. So the chart on Slide 13, where we showed the 5-year kind of profit per plot returns. If you go back to '21, '22, those were years when we were kind of heavily weighted to the promotion agreements, and they were kind of GBP 6,000 to GBP 8,000 gross profit per plot. I don't think we'll be down at the GBP 6,000. So to Tim's point, we're probably going to be at kind of around the GBP 8, 000 mark.

Very helpful. And maybe just one on the balance sheet. I appreciate you're targeting the top end of the 10% to 20% range by the year-end. Just wondering what the pro forma is on gearing today, just given that we've had the Warminster Waitrose sale, but also the additional tranche paid for Stonebridge in February. And maybe just then given capital commitments, should we expect that gearing moves still a bit higher at the half year before coming down again in the second half?

Yes. So it's very much going to be dependent on the transactions we get through between now and the half year. Clearly, we are a transaction-led business and some of those certainly in Hallam Land, land sales are quite significant in terms of cash. So where they land either side of the half year can make quite a bit of difference to where our gearing might be. As we've said, we're H2 weighted. So I'd certainly like to think we're targeting gearing back down towards that top end at the end of the year. And through the midpoint, I'd like to think we can keep it stable from where we started, but it will be very much dependent on where the Hallam Land disposals, in particular, fall either side of the half year.

Yes. And Tom, sometimes there's a mismatch isn't there between investing in the business. And you can see today that we've continued to invest in the business and then getting cash back as we sell. So we're just trying to manage that cash flow.

A couple of questions, if I may, on Stonebridge. Average number of sites in '25 was 9. You were targeting 12. Could you perhaps give an indication of where you'd like average number of sites to be, a good start to the year in terms of sales rate. Is that skewed to any particular sites? Or is it sort of a relatively even spread of sales rates across all of the sites? And then the last one, you talked about ground conditions hindering activity in '25. Was that weather related? Or was that geology?

Yes. Right. So I'll have a go at that. So in terms of sites, as I said, we traded from 9 on average last year against a budget of 12. We're looking to trade from 14 this year, but 3 of those will already be close to closing. So it depends on how you work out the average, but probably we're going to be over 11. So we are -- we will end up trading on average on more sites in 2026. And then obviously, what we're trying to do in '27 and '28 through building up the land bank, which we've done last year, but we were doing it the year before as well, trying to grow those outlets like all housebuilders are doing at the moment. And then in terms of the good start to the year, if you looked at the weekend, we had sales on every single site.

So you always have some sites that you think are better than others. That's the natural way of a portfolio. But in our budget, we are not relying on certain sites to knock out the stars to achieve it. It's been -- but bearing in mind what we went through last year and bearing in mind that Henry Boot now has the majority ownership, we're trying to be pretty balanced in the assessment of our budget. So we're not going to be relying on just 1 or 2 sites. And then you asked about the site conditions. They were peculiar to the sites. It wasn't about the weather.

Yes. It was 2 elements. One element was the geology and the other element was a change in building regulations that meant we had to do more work in the ground to meet those regulations.

Christen Hjorth from Deutsche Bank. Two from me, please. We'll maybe stick with Stonebridge to start. I mean I suppose Tim, looking back, you sort of pointed to the strong growth up until 2024 in Stonebridge and then the various things that went wrong in 2025. So what do you think is the catalyst? Was that just a lot of bad luck? Was it -- have there been some management changes? Has there been some strategy changes, seeing a reflection, why it was '25 when it happened? And what is sort of changing? Obviously, you touched on the management, but in terms of strategy going forward?

And the second one is, obviously, you guys are trading on a reasonably decent discount to book and the ROCE is lower than you'd want it to be. If I look at Hallam, fantastic ROCE. So obviously, it's very poor in some of the other parts of the business. And I was just wondering if there's anything you can do there, for example, reducing capital employed, selling assets, et cetera, just to return or to improve ROCE in some of those other parts of the business.

Okay. So I think with Stonebridge, it's often the way isn't it, that there are a range of things that affect performance. And I talked through those. I was open in the presentation. I think that, first of all, in hindsight, we set a pretty challenging budget. And in setting that budget, probably there was just a bit of the market is going back to normal. And it didn't. It was an awkward market for everybody. And actually, if you look at the stats, if you're selling premium homes, it was just a bit harder.

So the market definitely didn't help. And when I kind of like look at a mental bridge between the operating profit and the loss that we made, the majority of it was about completions and then the big part of that majority was about the market. And then also in terms of completions, I've talked about the fact that we had 30 plots that went over to the next year and some of the outlets we didn't trade from enough outlets. And that's a planning issue. We're good at planning, aren't we? And the planning sometimes in terms of getting detailed planning consent is very hard. So that's the big part.

Then if you look at it, again, in terms of performance, we had some cost overruns, which I've talked about. And then also because we've gone into the business and looked in detail at the delivery programs, we also want some extra contingency, and that then becomes a cost on you. So that's partly bad luck on some of the costs, partly as Darren has explained, changes in building regulations, you can't do anything about that. But then I think that also what we can do is we can be more thoughtful about how we plan and build out schemes. And also, I think we can be more thoughtful how we promote the sites and train and develop the sales team. And that then goes to was the business being run the way that we wanted to run the business going forward? No, it wasn't. So part of that is management. And as you know, we've materially changed the senior management team.

So the MD -- we're in the process of changing the MD. We've got a fantastic interim MD, Ed Hutchinson. Darren, we've changed the FD, and we've also decided that we don't need an overall operations director. So we will change the SMT. We'll reduce it from 11 people to 7 people. And that's not about cutting costs. That's actually about increasing efficiency so that the MD knows who they're managing, has got a reasonable team to manage and that they're collaborating.

So I think that we've recognized that it wasn't going to plan, started to really, really get to the bottom of it in the summer, started to act on it in the early autumn. And then we've got what we're calling a fresh start plan in the business because we want it to be positive. We don't want to be negative. We've got something called a fresh start plan where we're really, really clear about what the priorities are. And also, this is definitely a Henry Boot. Henry Boot, everybody is in it together. And everybody is aware of what we're trying to achieve and everybody is motivated and partly responsible for the success. And we're definitely bringing that into Stonebridge. And I think as a result, the team will be better.

I've spent quite a lot of time in Stonebridge as has Darren. And considering being an open day, and I'm responsible, so I'm not saying it's just them. But bearing in mind, they've not had a good year and bearing in mind there's been a lot of change, they're up for it. What I think is good is that we've gone around and we've agonized over the homes. I've actually gone and seen customers and I've asked them about the homes. And you know what, people like our houses. People like the layout. They like the locations, they like the size of it, they like the quality. So fundamentally, it's good. And what we've got to do is you've got to be slicker at building and selling and keep our customers happy, and we can do that. So I think you talked about what's happened, management change. And then what was your final question on Stonebridge?

It wasn't Stonebridge. It was more around the return on capital employed. Capital, I suppose, in general, whether you can release it.

Well, look, I'm going to let Darren talk in a bit of detail. And by the time I finish, you'll have been able to write a dissertation, won't you, in great detail. So I'll let Darren talk about it. But look, I mean, first of all, Christen, you've been following Henry Boot for quite a long time. The reason why we have more than one business is that we all know that businesses have good moments and not so good moments. So we like the diversity that the 3 businesses have. And they are not mathematically absolutely diversified, but they definitely have some differences. So if you look at Hallam, Hallam, that will be the best year they've ever had, right? And then with HBD, I think, HBD has done very well. So their return on capital employed will not be sparkling. It will be about 4%.

But they're a commercial development business and commercial development has been in a subdued market. The values haven't been falling, but the levels of activity even in the industrial market, which is the standout market, have not been high once you've taken out the big lettings to the Amazons of the world and the big investment deals where Blackstone have been buying up platforms. The day-to-day market, it's an okay market, but there's not a lot of activity. And as a developer, we rely on activity. We've got to do lettings and then we want to sell buildings and recycle capital. So I think that HBD in the circumstance have had a good year and the investment portfolio speaks for itself.

So this year, really, Stonebridge has made a significant difference, doesn't it? You can do the math. If Stonebridge had performed in line with its budget, our return on capital employed would have been very, very decent. And then, yes, we have to keep on thinking about how we can boost our return on capital employed. And I said it in the presentation, the one thing that gives me confidence is if you look at our portfolio, it's rich with opportunity.

So we've got our land portfolio, and you can tell we've got -- our CFO models that to within each of his life. And then we've got a development pipeline. And we know all those projects on that development pipeline and most of them, so the capital employed in the development pipeline is about GBP 60 million. So we've got GBP 1.4 billion of potential development for GBP 60 million. That is not bad. And we have appraisals on all of those, and they all make money. But what we've got to do is we've got to have a degree of active market so that we can develop and we can let and we can sell on.

So I think that the development business will restore its return on capital employed. And then again, with Stonebridge, Stonebridge, I think, still got to get a bit bigger before it starts helping us materially with the return on capital employed. But I think that we can achieve that. I haven't -- just because of a bad year, I'm not dismissing it, but just because of a bad year, I don't think that will knock us off what we can achieve in the medium term. So therefore, I get to the place where I look at the returns on capital employed that we have historically achieved. And I think there's no reason why we can't do that in the future. But we'll have to get through a period where there's uncertainty, there's some cost in the system and also there's some low levels of trading.

Now Darren can think of anything, but you will -- he will give a more financial answer to it for me.

I think Tim makes a valid point and the returns are a big part of our return on capital employed, clearly, and we need to get back to our markets being in a place where they're really delivering what we know they can deliver to drive that metric. I think you're absolutely right, though, in terms of self-help and what we can do to look at the balance sheet ourselves and where we're deploying capital, which I think is probably a mix.

So if you take Hallam at the moment, we've just said they've never had such a good run at obtaining outline planning permissions. We've increased submissions fourfold over the last 1.5 years of what we are putting into planning and the planning application is not a cheap exercise. They've done really well at recycling returns to maintain their capital employed broadly flat, but we definitely don't want to be pulling back on their activities at the moment whilst the environment for them is so good. So hopefully, we'll keep capital employed flat, but definitely don't want to see that actually coming down in any way.

I think on property development, the business knows the market that it's in. And as Tim has pointed out, it's definitely a very capital-light model for the pipeline of opportunities we've got. But at the same time, that doesn't mean they won't look at what is in the investment portfolio, what is in the opportunity pipeline to see whether or not they can return capital to the group. So Warminster, for example, great example of a sale that they've looked at in the investment portfolio, looked at when might be the best time to actually exit that asset in an environment we're in, absolutely great result to be able to sell that now.

I think Stonebridge then is the final one where given the results and returns of last year and given the reduction in volume, what they actually were incredibly good at last year is obtaining land. So we've invested a huge amount in that business in land. The capital employed is therefore now, I'd say, at the limit of where we want to go with that business at this current time. And as we move forward, the focus will be on getting the outlet numbers up. And if some of the larger sites that we've acquired over the last year, we're able to sell some of the future phases that don't impact short-term delivery. And either return funds into reduce capital employed or actually recycle those into other smaller sites where we can then look to start increasing outlet numbers. I think that's the one where it's a bit of a balancing game for us as we move forward.

So I am surprised, you've got energy left after that long-winded answer from management, but go on.

Really just to follow up on the last answer from Darren actually. In that context of not putting more capital into Stonebridge materially more going forward, what's the right length of land bank for that business? And assuming you still want to eventually reach 600 plots per annum?

Well, we definitely want to reach 600 homes per annum, but that ambition hasn't reduced.

So we're growing from a smaller level, aren't we? And we've been building the land bank up as we go. I think an ideal for us is probably going to be 4 or 5 years in the land bank that's coming forward. But where we're at now with the volumes that we've achieved and the way the land bank has grown, we've definitely pushed beyond that. So it's twofold isn't it, so if we can get the outlets, get the actual volumes back up, all of a sudden, the land bank perversely resets itself to where you want to be.

So Richard.

Conscious of time, just a few questions on here. So I'll just go through them in no particular order. Could you discuss the pension scheme and when the next valuation will take place and whether you expect to remain in surplus?

That's definitely coming my way. So we've just signed off on the last valuation, which is effectively at the end of the previous year. So we've got 2 years until we're into the next valuation process. The end of last year, we got a GBP 9 million surplus. That's come down given the economic environment, we're into GBP 3 million surplus at the moment. But 90% of the liabilities in that scheme are now hedged. And therefore, the actual impact on the scheme of those global movements is a lot less than it ever used to be.

Therefore, I would hope -- never say never, but I hope that we stay in surplus now on the valuation methodology. The valuations follow different standards. And what we are looking at is the long-term game of being able to exit the scheme. On an exit valuation, we do still have a deficit. We're probably at GBP 89 million, which means, for me, I'd like to think in the next 4 or 5 years, maybe, we'll be able to look to get out of that scheme.

Great. Okay. So next question. grateful if you could help us understand the decision to substantially increase the land bank at Stonebridge in 2025. When you could see the soft trading and delays in opening new outlets and now subsequent decision to dispose of land at Stonebridge? And secondly, does the management believe that the transaction structure to acquire the 50% of Stonebridge based on 1.6x tangible gross asset value and not linked to profitability was the right structure?

Yes. Okay. Yes. So I think that in terms of carrying on buying land in 2025, it was the right thing to do because we want to get into a position where we've got enough land so that we can get to 600 homes per annum. And also sometimes you have opportunities to buy land that fits into your regional network and you have to take them. And to be absolutely clear, and I believe Darren has in both the presentation and in answering questions about Stonebridge, we bought some land and some of those sites are large. And it's a pretty well-known tactic to look to either partner or to sell off some of the parcels of that land to other housebuilders. So we're not doing anything unusual there. In fact, it's the right thing to do.

Then in terms of the transaction, at a strategic level, absolutely the right thing for us to do. So I talked about the growth that we've seen in Stonebridge, and we firmly believe that we'll continue to see growth in Stonebridge. And that growth going forward, even off the 270 homes that we did in 2024 would be between 15% and 16% per annum. There are not many growth businesses that you can take control of. So at a strategic level, it fits well into us. And we haven't really talked about it today, but don't forget, we -- Road Link is running off, and we don't have HBC anymore. So we do have to look for parts of the business to grow in order to cover that cost.

And then in terms of the price, the absolute right thing in terms of the price was it was performance led. And if we look at what we thought we would pay through modeling when the deal was agreed in December 2024 and what we think that we will pay today, it is materially lower. So that performance does bite, yes.

And then I think the other thing that we did and we were trying to take control of something, and there's always a premium to take control of something. What we did was we were very, very thoughtful about the phasing. And we will have control of that business, but we will not pay the final phase of -- the final tranche of the payment until 2031. And that will help our return on capital employed. So am I disappointed that we didn't have a good year last year? Yes, I am. And that's right for me to say that, isn't it? Have we got a plan for growing and recovering Stonebridge? Yes, we have. Is it the right thing strategically for Henry Boot in the medium term? Yes, it is.

I'll just quickly go through these. Should interest rates climb during '26, what impact do you think this will have on completions at Hallam and Stonebridge Homes? And do you expect the trend of securing planning via appeal to continue as high as a high proportion of planning wins during '26?

Okay. Well, look, I'll do the planning one. You do the interest rate one. In terms of planning, we believe that the environment to get outline planning consent, not detailed consent, outline planning consent, and that is what Hallam does. We think that, that is as favorable as it's been in many generations. And then do we think that, that means that the route to get planning through appeal will continue to be successful. And I want to say we did 7 sites last year on appeal, yes. And you know Henry Boot, we generally work with authorities.

We do not often go to appeal. But the reason why we're going to appeal is that we're assessing it. We're being logical aren't we? We're assessing it and we're thinking, yes, we can win these appeals. And if necessary, we will go again and we will appeal. And one of the reasons why planning authorities have responded pretty quickly to the changes in the planning policy is because they know that if they don't, they'll have people like us taking them to appeal. And the chances are they will lose those appeals, yes. So a $64,000 question, interest rates.

So clearly, our markets are interlinked to interest rates, particularly around the mortgage products and the sale of homes in Stonebridge. I think if you look at commentators at the moment, whether interest rates are set to go up or come down is a bit of a mixed view at the moment and to some degree, anybody's guess with what goes on from here. I think the initial reaction that we've seen the market starting to increase mortgage product rates on the long-term forecast debt cost, particularly in response to what is happening in the Middle East has had no immediate impact from what we've seen.

In fact, as Tim has just said, we've had our best-selling weekend ever in Stonebridge Homes just gone. And it feels like where rates are currently at is manageable for most households. We'll have to see how the Middle East continues and unfolds. And if that is prolonged, then we could start seeing an impact clearly. I think from the Hallam side of things, however, most of the housebuilders are, I think, in a similar position to us, currently seeing good kind of upticks in activity levels. And I think what a lot of them are suffering from at the moment similar to what we've been speaking about is the number of outlets they can secure and get open, which I think is why we are continuing to see good levels of interest for Hallam land sites. And I think as we move forward, that will, therefore, be less impacted by any movement on interest rates unless there's a significant shift in the market.

And I know you've got an eye on time, Richard. But everything that I read says that monetary policy is still restrictive. So look, who knows with war in Iran, inflation could go up and the bank could adjust because of that. But still, it feels based on the slow growth of the economy, the fact that the interest rates are likely over a medium term to be restrictive, still feels as though interest rates in the medium term will -- might adjust for events, but they should still come down a bit. And look, who knows? But if that does happen, that will be very, very good for our markets.

Okay. Had quite a few questions today, didn't we? Thank you very much. Good to see you all.

Morning, everybody. In a slightly different setting this morning, which is all very, very relaxed and everybody is having croissants and bacon sandwiches and looking very, very smiley, so it's good to see you all. So to the interim results, it's going to be the normal running order. I'll start off with an introduction and a review of performance. Then you've got Darren, our CFO, who's going to do the Finance and the Land Promotion, then I'll come back and talk about Development and Stonebridge, and I'll finish off with outlook.

So first of all, I just want to say a few words of introduction. Our focus is on high-quality land, prime developments and premium homes and that's helped us to achieve total land and property sales of nearly GBP 160 million or our share, GBP 100 million. This is a time when markets are uncertain, and I think it shows the resilience of demand in property -- prime property. I'm pleased to say we've also seen a significantly better planning environment since the changes to the NPPF at the beginning of the year. And you'll remember, we anticipated this, and we increased resources into Hallam last year, and that's already bearing fruit in that we've secured a fourfold increase in consented plots, and Darren will talk you through that.

At HBD, planning has also been secured for the government-backed Golden Valley development, a GBP 1 billion mixed-use campus. And then on our industrial-focused joint venture, Origin, it's performing well. And because it's performing well, it's set to grow in the second half. Together with the increase in Stonebridge's land bank, we've got ample opportunity within the portfolio to hit all of our targets. And you'll also see this morning, we've agreed a sale of Henry Boot Construction for GBP 4 million, and that's important in that we are simplifying the group's structure, and we're increasing more and more of our attention on our core activities.

And throughout this period, and I know I'm going to get smart from you all, as you would expect, legendary Henry Boot balance sheet remains rock solid. Our NAV at just over GBP 3 a share, as you all know, is very conservatively assessed because we hold our land and developments at cost. And the decision to increase our half year dividend by 5% is a sign that we continue to have conviction in our 3 key markets. And we're also confident of hitting our medium-term targets, both in terms of growth and return. So I'm going to turn now to some of the operational highlights. And as you will know, we've been clear that this year was always going to be half 2 weighted. And it follows a similar pattern to last year, and we're confident of achieving our full year performance in line with expectations.

And looking at the operational highlights, first of all, you've got land promotion. We sold 1,222 plots and have got another 2,369 plots exchanged or under offer. Changes to the NPPF mean year-to-date, we've achieved planning on nearly 2,800 plots. Our aim of submitting 10,000 plots is on track. And so far this year, in round terms, we've already submitted 5,000 plots. Our land portfolio has increased to 107,000 plots. And as I said last time, really, the emphasis now is on winning planning consent and selling plots and less on growth because we believe that the portfolio has got the scale and the balance and the quality already.

Turning to development. Origin is performing well with all schemes on time and budget and the first pre-let agreed. The investment portfolio generated a total return of 5.7%, which yet again is well ahead of the index. And in the first half of this year, we sold nearly GBP 18 million of investments at an average 12% premium as we continue to look to recycle our capital into higher returning opportunities. Looking at home building, Stonebridge has had a slower first half, completing on 85 homes. The net private reservation rate was 0.45 in the half. However, we still see great potential in this business. And now we're the majority owner, we've added 846 plots to the land bank.

On Construction, the segment remains profitable with both Banner and Road Link performing in line with expectations. And HBC has secured 94% of its 2025 order book, and it's on track to have a far better year than in 2024. And to be frank, that's since we changed the management and the new management came into post in January of this year. And then when you look at operating profit after deducting central operating costs, it's GBP 10.2 million.

Now again, I always spend a bit of time just running through the medium-term objectives. The main ones are capital employed is at GBP 427 million and is still set to grow to GBP 500 million. Our 12-month rolling ROCE is 9.1%, and we're going to maintain our financial discipline because we're absolutely determined to restore our ROCE to within the target range. We remain on target to sell over 3,500 plots this year in Hallum. So we're absolutely focused on that medium-term target of 3,500 per annum.

In the current environment, it's no surprise we have reduced our committed development with our share of completed development falling to GBP 42 million, but I will outline later on in the presentation that we've got a clear plan to build this back up during 2026. Reflecting delays to opening new outlets as well as a slower market, Stonebridge is aiming to complete on between 240 and 250 homes this year. However, due to our expanded land bank, we believe we're going to be in a position to sell more -- to sell from more outlets in all 3 regions in 2026.

So we're going to be firmly back into the growth of this business. Now I talked at the beginning about our confidence in hitting year-end expectations. And this is based on 80% of the budgeted land and property sales already having been completed, exchanged or secured. Now to be clear, this is not turnover, it's property sales, and we believe that this gives you and us good visibility on our full year performance. So this slide shows that in detail. If you look, you've got light blue, which is Hallam; green, which is HBD and dark blue is Stonebridge. And you can see out of a budget of GBP 221 million, which is on your left-hand side, we've completed on GBP 98 million to date, but this rises to GBP 139 million if you include exchanged, and then it goes up to GBP 176 million, including sales that we've got reserved.

You can see by the dark blue slug that the majority of reserve sales are in Stonebridge, and that's not unusual for this time of year. To get us to GBP 221 million, we need another GBP 45 million of sales. And again, you can see that sales under negotiation for completion in half 2 2025. And you can see that around half of that is in Hallam. And if they exchange and complete on the 1,800 plots that they've got under offer, they will hit that target. Then GBP 5 million is in HBD, and that's about land sales that we're doing to the Origin joint venture. So we've got a degree of control over that and one site at York, which is under offer to a national developer. And then the rest of the sales is about GBP 19 million is in Stonebridge.

And what we've done there is we've taken the mid of our range. We've assumed that Stonebridge will sell 245 homes. And to be clear, that means based on this, they've got GBP 19 million to do and 53 homes to sell. And then also, there are other deals going on. And we can and might be able to use those for cover in the event that these things don't happen. And actually, Darren, that's what we did last year.

So just turning to HBC. We announced an MBO of Henryboot Construction for GBP 4 million this morning. The transaction simplifies the group's equity story as well as improving the prospects for long-term growth by us having more focus on the core activities, creating synergies and as I say, being disciplined about also achieving returns. And also it's going to reduce the risk profile of the group. The vendor loan is repayable over 5 years and personal guarantees have been given by the management team, so they've got skin in the game. And we'll also retain oversight of the business because we have 2 Henryboot representatives on the HBC Board until the vendor loan is paid. The deal is set to complete no later than January 2026, and we expect a profit on the disposal. Over to Darren.

Thank you, Tim, and good morning, everyone. So turning to our financial summary. We've performed well in the first half of this year with revenue in the period increasing by 19% to GBP 126 million, really driven as a result of several significant transactions within both Land Promotion and the Property Development businesses. Gross profit increased by 30% to GBP 32 million with the gross profit margin improving from 23% to 25%. Underlying profit, which excludes valuation movements on completed investment properties, is up 79% to GBP 6.5 million. And with operating profit of GBP 10 million, our rolling 12-month return on capital employed was 9.1%. Through the cycle, we continue to believe that our target range of 10% to 15% remains appropriate for the business.

Earnings per share increased to 4.8p in the period, and we've increased the dividend by 5%, reflecting our progressive dividend policy, the confidence we have in achieving our full year expectations. And as Tim mentioned, the confidence we also have in achieving our medium-term targets. If we turn over to the balance sheet, investment property, which includes our share of joint ventures and investment property in the course of construction has reduced to GBP 107 million. This is following more than GBP 14 million worth of profitable sales during the period.

We've seen further rental growth for our industrial assets, and we've made good progress on developments within our Origin joint venture. Following investment in land and developments, net debt increased to GBP 88 million with 21.4% gearing marginally above our optimal range of 10% to 20%. We expect gearing to be towards the top of our range at the year-end as we continue to invest across the business ahead of disposals next year. In January, we also completed the acquisition of a further 12.5% of Stonebridge Homes, taking our ownership now to 62.5%. As a result of this, our underlying net asset value per share, excluding the pension surplus, reduced by 2.6% to 304p.

If we look at the cash flow, this largely demonstrates how investment property sales and debt funding have allowed us to continue to invest in strategic land, Stonebridge Homes as Land Bank and Property Development. Cash outflows from operations totaled GBP 3.1 million, being returns in the period, largely covering payments for interest, tax and dividends. The profitable sales I mentioned on investment property generated GBP 13.1 million, which has been recycled into investments of GBP 10.7 million in inventories to grow land and work in progress in Stonebridge Homes, deliver our committed development pipeline and fund planning costs within Hallum to bring sites forward for sale.

As previously mentioned, we purchased a further 12.5% of Stonebridge for GBP 10 million, and we continue to grow the Origin joint venture, investing GBP 4.1 million in the period. Other working capital increased by GBP 10.5 million following land sales to housebuilders on deferred payment terms. And as such, we ended the period with net debt of GBP 88.1 million.

So if we can move on now to the operational review and starting with land promotion. Hallam Land sold 1,222 plots in the period with a further 2,369 plots exchanged or under offer. Having started the year well, we are on target to exceed 3,500 plot sales this year. Sites exited during the period generated an average ungeared IRR of 23%, which we're clearly very pleased with. The planning environment has been positive for securing outline consents. And during the first half, we achieved planning for 1,237 plots, a fourfold increase from the prior period. Plots with planning marginally increased to 8,837 with over 14,000 plots awaiting determination in what we see as a very supportive environment, we expect our stock of plots with planning to increase. We're making good progress on our target for submitting 10,000 plots into planning this year. We've got nearly 5,000 plots already submitted. These take time to build up and submit, but others are well progressed to achieve that target, submitting them in Q4 this year.

And with our portfolio all held at cost, there's no valuation gain on securing planning recognized until the land is actually sold, and this continues to reflect a significant uplift in value not recognized within our balance sheet, and I'll go into a bit more detail on that in a couple of slides on. We continue to manage one of the largest strategic land banks in the country. We've now got over 107,000 plots and 77% of the portfolio is in the Midlands or in the South where values tend to be higher.

With a balance of freehold and promotion agreements, we're able to manage capital investment appropriately between risk and reward, taking advantage of the right time in the cycle when acquiring freehold land. Our tendency to use planning promotion agreements provides a capital-light investment structure and gives us our USP against housebuilders by marketing the sites to drive best value for our landowners. Our 5-year average plot sales are running at 3,000 plots per annum. And as we've said, we anticipate plot sales of around 3,500 this year, in line with our medium-term target. Sales in the period were at an average GBP 16,000 gross profit per plot, and that's been driven by a particularly profitable freehold sale in Ambrosden. We do expect this figure to revert back in line with the 5-year average of around GBP 10,000 per plot at the full year.

Moving on in terms of the planning environment and following the government's revision to the NPPF, we have seen positive changes to the planning system, which have significantly increased our ability to secure outline consents. As you can see, since 2024, we've secured more planning consents. And year-to-date, we've achieved consents on 2,782 plots across 11 sites. This is a significant increase compared to a 3-year average of around 600 plots to the end of 2023, and it takes plots with planning permission to nearly 10,000 now.

We've been successful in utilizing the planning appeal system as well to unlock more sites, and we've won appeals on nearly 2,000 plots across 5 sites so far this year. This includes 300 plots in Sutton-in-Ashfield, which is a site exchanged for completion next year and a significant site in Fareham for 1,200 plots, which we are currently marketing for sale. As we move forward, the focus is to convert our store of consents into sales and secure more planning permissions in this supportive environment as we build a sustainable high level of value in our portfolio.

And moving on in this regard, our land promotion business has delivered consistently strong and stable returns over the long term. Sales over the last 5 years have delivered an average gross profit of GBP 10,000 per plot. And these disposals have achieved an ungeared IRR of 23% per annum, which for us is absolutely fantastic. As I mentioned on previous slides, we've built up a considerable store of value and with almost 9,000 plots at the half year with planning in the table on the top right here, based on recently achieved gross profit per plot, sites currently with planning have the potential to deliver gross profit of GBP 88 million over the short term.

In addition to this, we've got over 14,000 plots in planning awaiting determination. This significantly derisks 22% of our land bank, and that has the potential to deliver a further GBP 146 million of gross profit. The full portfolio over time has the potential to deliver over GBP 1 billion of gross profit. And for the first time, we're presenting an illustrative net present value for the total portfolio, which can be seen in the table on the bottom right. These figures are based on a range of gross profit per plot using average hold periods and making adjustments for overheads and tax.

The matrix also includes a range of discount rates. But if we take an average GBP 10,000 gross profit per plot, this shows a potential discounted profit after tax to come of GBP 180 million to GBP 256 million, equivalent to an NAV uplift of 44% to 62% whilst there are, of course, risks to unlock this value, the business has got a really strong track record of mitigating these. And with a portfolio of over 200 sites, we are not reliant on a few large schemes to actually deliver these returns.

And on that note, I will hand you back to Tim.

Yes. Thank you very much, Darren. So looking at development, our committed development over half 1 has marginally grown to GBP 128 million or our share GBP 37 million and 40% of the schemes are pre-let or presold. Understandably, we've been selective on starting development, and we've targeted industrial with the vast majority by value in origin. And I've set out the normal details of the development program in the appendix. Total profit on all the committed schemes is GBP 8 million or 38% profit on cost of which only 16% has been taken to date.

In the case of Origin, this does not include the sale profit when we transferred the land to the JV, and it doesn't also include the potential for us to earn promote fees. Now a lot of focus this year, rightly so, has been spent on building up our near-term development pipeline. And in this respect, we're set to grow Origin by a further GBP 56 million in the short term. And also at our Golden Valley mixed-use campus with a GDV of GBP 1 billion, we've achieved planning. We've also got a strong GBP 1.3 billion development pipeline that will give us further optionality to grow back our committed program. I just want to spend a bit of time on Origin and also a bit of a recap. And you'll remember that it was a 25-75 JV that was formed at the end of last year with Feldberg Capital, and we believe it allows us to accelerate the development of industrial sites. We earn development management fees and also promote over an 8% geared return.

The JV was seeded with 3 sites from our development pipeline, and that's shown on the slide as current. You can see it totals GBP 100 million. And in selling the sites to the joint venture last year, we realized a profit of GBP 5.5 million. Work on all sites commenced in quarter 1 of this year. And I'm pleased to say that, that work is progressing well, and we've secured our first unit pre-let at Markham Vale. Another unit is under offer at Welwyn and there's good interest -- occupier interest at Spark. And then the joint venture is set to grow by an additional GBP 56 million, which is shown as future. We there got second phases in Markham Vale and Walsall. And then we're also, again, from our pipeline, selling Preston into it.

Once these land sales are completed, together with the car park site at York that I've already mentioned, HBD will be done in terms of its sales and budget for the year. The other significant thing that we've done is we've got planning on Golden Valley. And that's a flagship mixed-use campus. It will provide up to 2,500 new homes and 1.25 million square feet of space.

And the first phase will include IDEA, the new 160,000 square feet National Cyber Innovation Center, and you can see an image of it here. And that's been identified in the government's industrial strategy. It's the old gag, it's next door to GCHQ, guess who's going to anchor it. Let's hope they're not monitoring what I'm saying because I've been told I can't say that. Plus, we've got 576 residential units. And we've got a funding package secured from government and the local authority because it's of national significance. And once we signed up the anchor tenant, we'll commit to the first phase, and we expect to commit to the first phase during the Q1 of next year.

Turning to investment. Our total return at 5.7% for the first half was once again ahead of the index at 4.2% and I show on the line graph, our total return compared with the index since the start of 2020. And you can see with the dark blue line, we're at 7.5% and then the pale blue line is the index lagging behind at 3.6%. Total value of the investment portfolio is GBP 96 million. And during the period, we secured 4 sales at a 12% premium to book value, 2 of those will complete post period end.

And the largest sale was Skelmersdale, where we've secured planning for 245,000 square feet building, and that's 66% bigger than the existing building on site. And we sold that property to a German fund in June at GBP 9.5 million, and that achieved an ungeared IRR of 25% per annum, a bit better than the Hallam ones at 23%, but still good money, isn't it?

Then turning to Stonebridge. In January, we became the majority owner of Stonebridge. We've initiated an integration plan. We've identified several quick wins and those quick wins have already been implemented. Looking at the operational performance, Stonebridge completed on 85 homes in the first half with an average private sales price increasing by 3% to GBP 391,000. Many of our customers took longer to commit to buying homes in an environment for them, felt a bit more uncertain. And our net private reservation rate was 0.45 in the first half.

Reservation levels have also been impacted by delays in securing detailed planning, reducing the opening of new sales outlets. We currently operate from 9, and we planned to operate from 12. During the summer, we've seen softer trading conditions with our sales rates also affected by several of our sites nearing completion and not offering the full range of products. The sales rate for the 6 weeks to 14 September was 0.38. As a result, current year completions are now anticipated to be lower with a revised target range of 240 to 250 this year. Now despite that, visitors numbers and interest in our homes still remains, and we're actually getting more people visiting site by a significant amount, up to 50% more people. So we still absolutely believe in this product.

And we think that if we get the full offering, and we've got a plan for that and more outlets, then we can scale this business up. So you can see growing the land bank is absolutely crucial. And I'm pleased to say that we've added 846 plots to our land bank in the last 6 months or so. And we've acquired 3 sites in the period, and we've just shown you 2 here. There's Kingston Village, Newcastle-upon-Tyne capable of delivering 360 units. And then there's Whitby in Yorkshire, where we can deliver 223.

And by showing you the location of the land banks, the new sites and the active outlets, you can see that Stonebridge really has got the potential for being a significant multiregional premium housebuilder. And we do believe that there remains a long-term structural undersupply of housing in these target regions. So therefore, we're confident that we can hit our medium-term growth target of 600 homes per annum.

And then finishing off on outlook. Whilst we operate in an uncertain environment, we continue to make good strategic progress by focusing on quality projects within land promotion, development and homebuilding. I'm not on the slide, am I? Thank you, Darren.

Significant steps include the sale of HBC and the agreed route to full ownership of Stonebridge. Now with the majority owner of Stonebridge, we can increase and improve its land bank and drive sales. We expect, as I said, to be back on our growth path next year. The outlook for Hallam is particularly bright with 3,500 plots sold or under offer and also planning policy, which, in effect, has a presumption in favor of development. Consequently, the portfolio of planning consents will build up. And as Darren said, that's building up a store of profit for the future.

Similarly, HBD is preparing to commit to more of its near-term development through smart JVs like Origin or nationally significant schemes like Golden Valley. So I believe this is a clear path of growth, which is a well-funded long-term business we're able to pursue. In the meantime, we do expect to meet our earnings expectations for this year. Our balance sheet remains rock solid, and that all puts us into a sound position to increase the dividend by 5%.

Thank you very much. So questions?

Christen Hjorth from Deutsche Bank. Three questions for me, please. The first one is just on Hallam. I know the target is 3,500 plots per annum. It looks like you're going to do better than that this year. Is 3,500 still the right number, I suppose, for the next 3 to 4 years? Or could you get meaningfully higher than that?

The second one, just as we look at Stonebridge, how should we think about EBIT margins and returns trending from here? And I suppose implicit in that is you mentioned investments in more land, but what sort of scale should we think about there as well? And then just finally, with Golden Valley, et cetera, how should we think about GDV in terms of the committed pipeline evolving over the next 12 to 18 months?

Okay, right. So I'll have a go at the first one and the third one. Darren, you have a go at the second. So first of all, Hallam will achieve, we believe, 3,500 this year. That will then get us on to a rolling average of 5-year average of 3,000 plots sold. Has Hallam got the opportunity to sell more than 3,500 plots? Yes, it has. I've spoken to you before. We have a business model. It's a classic portfolio that you can model, isn't it, because you've got so much data over how long it's likely to get planning, what the success rate is, how much it will cost. And we think that we can grow it materially more than 3,500.

But Christen, we think that what we will have to do at some stage is reset the medium-term growth targets rather than do it piecemeal. And whether we do that next year or the year after, we will do it at some stage. But to be clear, I think that Hallam will be selling more than 3,500 plots per annum over, let's say, the next 5 years. In terms of Golden Valley, the commitment will be to start Phase 1, and that's around GBP 100 million. And that will take certainly '26 and '27 to complete, and we expect it to be fully funded and to be materially pre-let. So it won't be a high-risk venture, but it is the start of a bigger scheme.

And then we will expect to sell some land to housebuilders. We -- as part of the first planning consent, we had just under 600 homes granted. And then we expect to, on the heels of that, get another 400 homes. So we will get profit from the development, and then we will take equivalent to a promoter's profit on selling the homes. And I would imagine that we will sell the first batch just under 600 next year and probably the next batch the following year.

In terms of Stonebridge?

So in terms of Stonebridge, look, this year has been challenging, as Tim has said, I think we've had a few sites we would have liked to have been delivering from that have suffered from the complexities of obtaining detailed planning permission. We've also had the challenge of 5 sites closing and 4 sites opening, which means, as Tim had also said, kind of the product choice on the closing sites is limited. When you're opening sites, you're selling off plan. But I think what they've done really, really well this year is actually bolstering that land bank, Christen. So as you mentioned, we're getting on for 2,500 plots now within the land bank. We're getting on for 1,000 plots that have actually got permission that we can start on site and look to deliver.

So I think as we move into next year, we are pretty confident that we can get the sales outlets up and we can start returning to that drive for growth. Now as we are in that phase, I think our margins will not be where they might be for a stabilized business. And what does stabilize mean? I think in a good market, a stabilized housebuilding business is probably doing 20% gross, 10% net. I think given we've got the challenges of growing, investing for the future and the fact that the market at the moment is a little subdued, we're probably looking at more around the 7% to 8% net as we move forward into the future years.

Adrian Kearsey, Panmure Liberum. On Stonebridge, there was a difference in the reservation rates Q2 versus Q1, which is very encouraging. Could you perhaps sort of give some detail or granular detail in terms of were there any particular types of property that we're moving more quickly in Q2? Were there any particular sites that were benefiting within the mix? And then how is that Q2 trend moved into Q3?

Yes. Okay. Right. So you're right. Q2 was at a higher sales rate, but there was not material characteristics either in terms of the sites or the houses that we sold. I'm afraid we just like, a, the industry and then particularly the North got off to a slow start. And it sounds a bit weak, blaming the weather, doesn't it? But up in Yorkshire, we would have had sites closed during the snow. And in Q1, we just never ever caught up from that slow start.

And then on Q2, that picked up. But over the summer, as I alluded to during my presentation, I'm afraid the summer has been slower again. So we've started slow, picked up and then we were ahead of our budget at 0.45. So we were nearly at 0.5 in Q2. But then the trading up to the middle of September from the end of the first half has been just below 0.4. So it slowed again. And part of that, we think, is some of the uncertainty in the market. Part of that is the summer. And over the last couple of weeks, it feels as though it's improved yet again. So to be honest, Adrian, it's been reasonably volatile.

Just one more question. With Hallam obviously, there's a portfolio of different size schemes, different locations that you made a reference to sort of Southeast, South Midlands. Could you perhaps give an indication in terms of the level of interest you're getting from the market at different size schemes?

Yes, yes. I mean the range of schemes that we've been selling has been significant. So we've been selling -- and typically, we would be selling schemes of between 200 and 400. That's typical for Hallam. But we've also sold some smaller sites of around 100, and we've got a very large one under offer at the moment of 1,200. And what's [ plus ]? And I've got to say what is consistent, Adrian, is that there is strong demand. And we're seeing this from the national housebuilders. And we're also seeing it from regional housebuilders.

And typically, we will be getting between 4 to 8 bids on sites. Now we know that the national house builders will be saying that they're keeping their discipline in buying sites, and I'm sure they are. But I think that this is also a reflection of what Hallam has to offer. And certainly, in terms of some of the bigger sites, so between 400 and the 1,200 that I've mentioned, we believe that they are often significant sites of strategic interest in different regions.

And if you're a housebuilder and you want to maintain your outlets, then you do have to be prepared to buy a significant site at a time when it is available. So we have been getting good levels of demand. And I know that there is a lot of chat about the market in the Southeast, and it is definitely harder from a housebuilding perspective in the Southeast, but we're still seeing demand from housebuilders for sites in the Southeast as well. There's not a rush to the Midlands or the North.

Andrew Edmond at Equity Development. Just a couple of things. Post-period, but you finished with your outlook and a nice picture of Duxford. And I wondered if you could just say a little bit more about what looks to be a very exciting project, how competitive it was to -- and what your expectations are?

Yes. So for those of you that didn't catch the press statement that went out a few days ago, basically, it's just under 450,000 square feet AvTech just in Duxford on the edge of Cambridge City. And we've entered into a development agreement with the Imperial War Museum, and we will promote that through the planning and then look to develop it. As you can imagine, the demand for technology space generally in and around Cambridge is strong. There's a very strong aviation sector. And in the event -- and the planning is centered towards that area, and we think that there's good demand in that area.

But in the event that there isn't the occupier demand to meet the full 450,000 square feet, then there will be some flexibility to sell it to other tech occupiers. So very, very pleased that we got it. The competition was strong. But I think that what Henry Boot does well is it has got a great reputation with, in particular, the public sector. We always say -- always do what we say we're going to do. And then I also think that some of the work that we've been doing on Golden Valley has put us in good stead because there is no doubt on Golden Valley. We are in a market where we are attracting not just cybersecurity, but other technically related businesses, and we're getting a lot of information from that. And that information will put us in a good place to help the Duxford scheme.

Just to add on Golden Valley and Duxford, they are both in what is very traditional contractual arrangements for Henry Boot developments, which is what we term land drawdown opportunities. So whilst we're responsible for getting the planning permission, we don't buy the land. We're not heavily capital invested in these schemes, and we only actually invest when we know the opportunity is there to actually deliver.

And then just a little bit on regionality. You just talked about the Southeast. In terms of planning permission, it's certainly a much more encouraging picture overall, are you seeing any variation on a localized regional basis or some local authorities not following quite the path that's prescribed by central government? Or is it now reasonably uniform?

It's generally better full stop. And then there will always be some planning authorities that are either more restrictive or more conservative in their approach. But the thing is if you've got at a high level, a planning policy that favors development, what we will do is we will negotiate with the planning authority, and then we'll get to a point where we will say if they are indicating that they're going to grant consent, we will go to appeal. And we've done -- we're on 5 appeals at the moment. And Henry Boot is quite a consensual -- we want to work in partnership with people. So we don't likely go to appeal.

But we're going to appeal more and the chances of winning an appeal now have increased because of the changes to the planning policy. So because of that, the conservative planning authorities are more likely to grant consent. And even if they don't, you've still then got a proper chance of getting a consent because you will go to appeal. So net-net, there will be more planning consents granted as a result of the changes to the planning policy framework. And then the only problem, as we've alluded to during the presentation, is that there will be some planning authorities, not all of them, some planning authorities that aren't properly resourced and they are taking a lot of time to grant the detail of the planning consent.

And we've had a situation recently where we've actually appealed for nondetermination of a detailed planning application, and that is almost unheard of because all you're doing is you're arguing over the color of the bricks, yes. And that's basically because the planning policy just didn't have the resources to put it through the system. And that's what's holding us up in Stonebridge. That will be what's holding up some of the national house builders in terms of some of the sites that they want to be promoting and developing houses on.

Direction of travel is good.

Yes.

And lastly, very quickly, Darren, lots of good KPIs moving in the right direction, just the 2 percentage points up in gross margin. Can we expect that every half going forward? Or would you like to get a little bit prospective of how it may move?

Look, it's good that it's moved in the right direction at the half year. I'm not saying that we're going to continue to see that come in. And actually, what we've not touched on is, we are seeing a little bit of inflation coming back into particularly House Building, probably easing off actually on the Construction side of life. It's manageable at the level it's at. But I don't think it's going to help push those gross margins forward as we move on.

Yes. Clyde, I just see your hand up.

Clyde Lewis, Peel Hunt. I think I've got one on Hallam, one on Stonebridge and one on Property and Development, if you don't mind. On Hallam, I'd be interesting to know of the 11,000, nearly 200 plots you've got, that are owned, what -- how many of those have got planned permission? And because I'm trying to -- I'm trying to get a feel for ultimately that GBP 11,500 you were making per plot, how does that move? You're talking it back to GBP 10 million? I mean, obviously, it will depend a lot on how much is freehold, how quickly that comes through. But I suppose away from that, do you think there is pressure on margins from Hallam, given the pressure on the industry right now probably to buy more sites versus probably the increased supply that's coming through, as you've alluded to, the extra planning is helping the overall supply of land at the moment. I'll start with that one.

Right. Go through the other 2.

Okay. So the other 2, on Stonebridge, it'd be useful to understand where you are with regards to the sort of management structure now, what you've got set up in terms of how you're running the business? And I suppose how you think you're going to have to invest in that over the next couple of years? And the third one was really on Property Investment and Development, I suppose when you've been very much focused on logistics and industrial in the last on -- I'd have to go back a long, long time before you were doing offices, but -- or anything else, but you have done the sort of student schemes and some bigger resi. Where are your thoughts, I suppose, in terms of end markets as to are you starting to see more attractive areas? Obviously, you've just announced Duxford. So you still see a lot of activity and interest in the industrial/tech areas. But are you starting to see improving opportunities elsewhere outside of logistics and industrial?

I'll start off with the Property Investment and Development question. Absolute core of our business going forward will be industrial. And if you look at industrial over decades, and the bad news is that I've been involved with it for decades, it's pretty sound, reliable and actually, the volatility of the returns over the last 40 years is not high. So it's a good business. The returns are decent. And if the volatility is low, the risk is low. So that's absolutely what we want as a developer. And as you know, 75% -- just under 75% of the investment portfolio is also industrial. So that will be at the heart of development and the investment portfolio.

What we are doing with the investment portfolio, though, is we are keeping it smaller than our target. And Clyde, that might be another reason why at some stage, we've got to change our targets because we are trying to get our returns on capital employed into that range. And it's hard to do that if you've got too much in the investment portfolio. So we've been basically recycling some of the investment portfolio into development, and we'll carry on doing that. And the investment portfolio will probably end up having quite a few investments that really are developments. And Skelmersdale is a classic example. We bought that to get planning and then develop it.

And the reason why we didn't develop it was a German fund would pay us not only what we thought it was worth, but also our future development profit. But then also, we have done urban development. And we will carry on doing urban development, but urban development, as you all know, is very, very hard at the moment because of viability, first and foremost, but then also the Building Safety Act. So we will do less urban development and probably the urban development that we will do in the future will be neighborhood, the build-to-rent scheme.

And there, we've got planning and we're going through the process of getting a grant. And I'm afraid that's what you need now, even a prime site like that, where rents have grown probably 20% since we bought it, you still need some sort of help from regional grants to make it go. And we're in that process to try and make that development work, and we think we will achieve that. So I think our urban development will morph a bit, and it will go into things like Golden Valley, which is mixed-use development. And there, to Darren's prompt, a lot of it will be where we're doing development agreements with landowners so that we're not using our capital on the land. We are using our capital to promote and the promotion costs of Golden Valley have been significant, but it's still not the same as owning acres and acres of land.

And we do think that there's an area of specialism that we have not cracked, but we're trying to. And that is where you've got more specialist occupiers, whether that's cyber, technology, aviation. And we're trying to do that because then we can go to landowners, we can say really good at master planning, really good at delivering a scheme, really know our onions in terms of these specialized occupiers. So I think 70% of what we do will be industrial and then 30% will be that specialized. We call it urban development, but it's probably edge of city development at the moment.

In terms of Stonebridge, the management structure is pretty good. And the reason why the management structure is pretty good is that we've obviously been a 50-50 joint venture partner. And I've always been open with people, haven't I that it's our intention to buy the business. So we've wanted the management to be good, the structure to be good and it to be on a growth footing. So it's got some capacity to grow. And we've got that.

But a couple of things. One, I think that there was a pause in thinking about the structure and the capacity as we got into quite a long winded debate over terms. And then also, there became a bit of a pause when we realized that we had got a deal agreed and we got to document it because we did know there'd be integration, plans and changes and synergies. And we didn't want to hire somebody and then find that we might not need them because of somebody at Henry Boot that could do a similar job. So we're well underway in terms of integration. We have not got a free hand. We've still got a significant minority shareholder. But we've got a pretty good hand.

So we can shape the management. We have been integrating. So classic, we've got one HR department now. We've got one technology department. We've got one marketing department. And all of that has either absolutely happened or is on the eve of happening. And then really, Clyde, you look at it and you think, well, if we want to be building 500, 600 homes quite quickly, we have got to think about greater regional presence, and we've already opened an office in Newcastle. We will open an office in the North Midlands, it might actually be in Sheffield. So we've got to think about how we spread the team and the managers across the regions.

But I don't think any of that is rocket science. The Managing Director that some of you have met, Steve Errington has done it before. We're based on a regional business model as well. And a lot of what they're doing is very, very similar to Hallam and HBD. They're going and getting planning, dealing with local and regional authorities and then dealing with local suppliers to build things. So I think it's all doable. I'm hoping by the time I've given you that really long-winded reply that Darren knows everything on Hallam freeholds.

So going back to your first question, look, we quote the gross profit per plot. And I've always said, over time, as an average, GBP 10,000 per plot probably feels like about where we ought to be. However, as you rightly interrogate, that is very much a blended return from freehold and promotion agreements. And I think if we look at the portfolio, we've got about 11,000 plots that are freehold out of the 107,000. So kind of broadly, we run about 10% freehold in the mix. I think if you go back a few years, our gross profit per plot was under GBP 10,000. And the argument was we were very heavy on promotion agreements that were coming through at that time.

I think what we're seeing now getting back to the GBP 10,000 average indeed at the half year being at GBP 16,000, it's because we've got a freehold weighting. And Ambrosden was one of the sites that I mentioned that was freehold sale in the first half, real driving that. I think we are slightly freehold. I don't want to say heavy, but we're probably about 20% in terms of the 10,000 plots we've got with permission, which if there's 10% in the portfolio, 20% is clearly quite a weighting on the freehold side at the moment.

And I think we're seeing that coming through in sales, which is supporting that GBP 10,000-plus gross profit per plot. And I think for the next couple of years, hopefully, that is what we will continue to see. And I think in part, that is actually driven by the environment we're in, which we always speak to, which is it's easier to gain and develop freehold in an uncertain market because the landowner, particularly concerned about capital taxes, particularly concerned about budgets coming through at the end of November, not the end of October, is actually more willing to transact, and we find good freehold opportunities in that environment.

And I think the uncertainty we've had over the last couple of years has continued that for us. So I think that's been really positive. Then to answer your point on the market, the housebuilders and their appetite for acquiring land, I think a lot of what Tim said is pointing to we've got a slightly softer end market. Challenges on getting detailed planning permission are really continuing to be very difficult. And therefore, I think what we're hearing is the way that you keep momentum going is by opening more outlets by buying more land. And I think we're seeing that in the competition for sites that Tim has discussed and the kind of returns and ability Hallam is currently seeing to sell plots into the marketplace. So whilst that uncertainty remains, I think, to some extent, that is our friend.

Yes. And we're definitely selling land ahead of our budget, both in terms of volume and the price.

Yes, pricing is probably arguably stable. But in real terms, I think what we're starting to see is warehouse builders on large sites were paying over 3 or 4 years. They're paying over 1 or 2 years. So the discounted effect of that is the reality is we're doing a bit better. Also, if you go back 12 months, we wouldn't have sold anything on outline. All the housebuilders would want 12 months to get their detail through before they transact. People are now buying on outline planning again.

Richard, do you have your own microphone?

Alastair Stewart from Progressive. Three questions, one on Hallam, one on Stonebridge and one on Construction. Hallam, you've referred to strong demand from both the national and the regional housebuilders. In terms of national, is that kind of steady month-by-month steady-ish? And the regional guys, are they mainly private equity owned. And are any names popping up more than others. And Stonebridge, do you have a comparative for the 0.38 for the 6 weeks the previous year?

And finally, Construction, how much of your total work -- well, be the development work really is done in-houses as it were by HBC?

Okay. Right. Okay. So a few things there. So -- and both Alastair and Darren help me out on the questions, if I don't -- haven't got all of the questions. In terms of Hallam, it's pretty steady, isn't it? I mean we've got a range of housebuilders. And we will have transacted with all the major housebuilders this year. And most of the national housebuilders will be bidding for land, not all of them on specific sites, but you'll have a situation where one of the national housebuilders won't bid on one site, but then they'll bid on another. So it feels as though they're all in the market.

We said already, we think that it's because they want outlets. We feel like that at Stonebridge. We've definitely got to buy more land than we're comfortable buying because we can't run the risk of not having enough outlets, and I think the housebuilders like that. In terms of the regional ones, yes, some of them are private equity backed. There will be some family-backed housebuilders -- national housebuilders as well. And they are pretty competitive. When you are selling on their local patch, they will be very interested in buying it.

And we're a bit like that with Stonebridge, if there was a really good site in Yorkshire, and there was a really good site in Yorkshire called Whitby, we did not like the idea of anybody else buying it. And you keep your discipline in term -- you're not giving your margin away. But what you will do is you will make sure that you're up to that margin and you researched it, and you'll probably know a bit more than some of the competitors. And you hope that, that makes you competitive. I am 99% sure, [ Chris ], that we have not got the 0.38 comparator for 2024 because I can't remember us quoting that last year.

We didn't provide a post period end figure...

I think that it will be worse.

[indiscernible]

Yes. So the comparator over the period is 0.5 in 2024 and 0.45 in 2025, yes. And I can't -- I don't think we had a slow.

I think the summer was better last year than the summer has been this year, yes.

And then in terms of HBC, really the in-house development that we're doing at the moment, is around Markham Vale and the construction of that will probably represents 20% of the turnover of HBC. And that would be typical. But there are some years where HBC don't do anything for HBD.

Well, HBC is a very northern-based Construction business. HBD is U.K. wide. So there is a defined geographical patch that they can actually operate between them. And I think going forward, we will still have good relationship with HBC.

Darren, God blessing will remain on the Board. And got to be clear. I can say this now -- we sold them, can't I? They are a really, really good contractor. If you look at Origin, where we are a minority shareholder our partner, Feldberg, cannot believe how good they are because they're on time they are constantly looking at ways to improve efficiencies and they don't just take all that efficiency themselves, they will share that -- those ideas with the client. So we will keep on using them.

And then also, we'll keep on supplying them. Banner will -- Banner's not reliant on HBC, in a really good year they will probably get 10% of their work from HBC, but they will keep on working with HBC. And this is a lovely anecdote for Henry Boot isn't it?.

People like working with Henry Boot, people like working with the Construction business, people like working with the Plant business. So HBC will still use Banner for nearly all of its plant not because we've told them they've got to as a function of us giving them the vendor loan, it is because they want to. Yes.

I think that it was, yes, good, okay, fine.

Anyone else? Any calls online or questions on line?

We've got one, Tim.

That's why you've got your own mic.

Exactly. Didn't just want it for nothing. It's from or [ Will Regis ] at Peel Hunt, who just wants to know, are you using promotions or incentives to help deliver Stonebridge sales targets?

Yes, we are, but not out of kilter with what we budgeted for. So the running incentive at the moment will be 5%, and the budget actually is 5%. Yes.

Right. Thank you very much. Yes.