Morgan Sindall Stock

Good morning. I'm going to say a few words. Kelly will then sort of go through all the detail, and then I'll say a few more words, and then we'll have questions and answers, if we may. Look, we've had a really good first half. In fact, a record first half. Perhaps more importantly, it's the 11th consecutive record first half if you exclude the COVID year.

Now really, I want to thank all the teams of people we have in all of our businesses who spent the last decade just making our businesses better and better and then better again for all our stakeholders. And that's what our game is all about. How can we be better and being better is more important than being bigger. I'm pleased we had 2 unscheduled profit upgrades in the first 6 months.

And the key thing for us is markets that we're in, some have been good, some not so good. But it's the diverse nature of our business, which has enabled us to have a growth of 21%, even with the housing market being weak because other markets have taken over. I'm also pleased that we're increasing today the medium-term targets in 2 of our divisions, Fit Out and Construction.

I'll hand over to Kelly.

So good morning, everybody. So the first half year set of results really do continue to reinforce our consistent track record of delivering strong, profitable cash-backed growth. Now I'll give you a couple of key financial highlights in respect of the last 6 months. And as usual, towards the back of your own pack, you will find the more detailed financial statements.

So in the period, our revenues increased by 8% to GBP 2.6 billion, and that's been followed by our operating profit increasing by 21%, up to GBP 112 million, delivering a margin of 4.4%, up 50 basis points compared to this time last year, a real testament to the high quality of earnings coming through our businesses. Net interest income was also up to GBP 4.6 million in the period, and that's led the way to a profit before tax of GBP 116 million, also up 21% in the period, delivering a margin of 4.5%, also up 50 basis points in the period. Earnings per share grew by 22% as our effective tax rate continues to track in line with the U.K. statutory tax rate.

The visibility of our workload has also increased in the period, growing by 3%, up to GBP 19.5 billion. It consists of not only our secured order book, but our preferred bidder work, and it's represented by framework contracts that we hold nationally with public and regulated sectors that work in the private sector, particularly with the Fit Out clients, together with long-term partnership agreements with local councils, local authorities and housing associations.

But importantly, it's consistently providing us with an incredibly strong platform to deliver our revenues in future periods to come. Our average daily net cash grew in the period by GBP 69 million to GBP 423 million, really underpinning our balance sheet strength. And our Fit Out, Construction and Infrastructure businesses have continued to convert their profits to cash, some of which we are reinvesting into our partnership businesses. As a result, at the end of June, on a rolling 12-month basis, our cash conversion was 83%, marginally higher than this time last year. On the back of these really excellent results, we today have announced a 10% increase to our interim dividend, rising to 55p a share.

So a little bit more about the performance split by division, but in a short while, I'll add a little bit more color on context. In the period, Construction, Infrastructure and Fit Out combined collectively have delivered a significant proportion of the group's profits in the period, and there are a couple of themes that are driving that. Firstly, the management of risk. It's taken years to nurture our approach to risk management. The phasing and timing of project completions weighted to the first half and excellent contract execution.

In our Partnership businesses, they face more economic headwinds, resulting in a weaker housing market together with near-term viability challenges, which has in places impacted the timing of project starts. But despite that, Partnership Housing has still delivered a resilient performance in the first half. And for Mixed Use Partnerships, its performance once again has included expanded investment costs to support those projects we are planning still to start on site throughout the whole of this year. So overall, combined and operating profit of GBP 112 million, up 21%, delivering a margin of 4.4%.

So just a brief overview of our net cash movements in the period. So firstly, the profile of these movements is very much in line with this time last year. But just a few points to draw out. An operating cash outflow in the period of GBP 10 million, that compares to an outflow this time last year of GBP 17 million, very much driven by the seasonal working capital movements we see with Construction, Infrastructure and Fit Out. If you just looked at what that was on a rolling 12, it's an inflow of GBP 202 million, very much what we would typically see at the end of the year. The operating cash outflow in the period also includes a net cash investment in our partnership businesses of GBP 122 million, again, not dissimilar to what we saw last year of GBP 127 million, reflecting this year the slower pace of sales activity.

The other key notable movement aligned to our capital allocation hierarchy is the dividend payment for 2025 being the final dividend payment of GBP 51 million. If we take all of the movements into account, at the end of the period, we finished with a strong cash position of GBP 418 million, GBP 28 million up on this time last year.

Now our continued focus on cash discipline has continued all throughout the period, resulting in a daily average net cash position of GBP 423 million, up GBP 69 million. But if we look at the highest point of the year, and it was pretty much all throughout January actually, which peaked at GBP 599 million. And for most of January, interestingly, we were higher than what we closed at last year, which the reference of GBP 531 million. The lowest point once again was May, and that's very typical actually, purely because of the timing of when the final dividend payment goes out, but also the VAT quarterly payment, which is a sizable payment for us every quarter. But the key point to note once again is actually the swing or the movement of the cash between those points and actually how significant it can be of a business of our size. So stressing again the importance of not just looking at the period end cash, but looking at the cash balance at the lowest point during that period.

So as we look forward to the end of the year, our guidance when it comes to our average daily net cash remains unchanged. We still expect it to be in excess of GBP 400 million as we plan to invest in our partnership businesses, particularly in those schemes where the returns are aligned to the medium-term target for those respective businesses.

So let's take now a little bit more of a look at each of the divisions. So in Partnership Housing, despite some of the near-term economic headwinds, the division has continued to evolve and develop its long-term partnerships with the public sector. Earlier this year, I talked about the division being appointed as preferred developer on Birmingham City Council's Druids Heath regeneration program. I'm pleased to say that in the period, it has converted that into a signed development agreement. As a reminder, this is about delivering 3,500 homes over the next couple of decades. Now that's also been followed in the period with a signed partnership development agreement with North Yorkshire Council to build out an initial 500 homes over a term of 4 years.

Now Contracting still represents 2/3 of the division's overall revenues. In the period, Contracting revenues fell by 21% to GBP 247 million, in part due to the timing of delays as a result of the elections in the run-up and post, but also in part due to the type of mix and therefore, volume of homes delivered to our partners. But more positively, our mixed tenure activities, their revenues increased by 6% in the period to GBP 100 million. Now despite the number of open market completions being down in the period, the average sales price was up 11% year-on-year. So overall, despite the revenue decline for the division of 14% to GBP 347 million, the division delivered a resilient performance in the year with an operating profit of GBP 13.2 million, in line with this time last year, delivering an expanded margin of 3.8%.

Its average capital employed increased in the period as we've continued to deploy our strategy around opening more sites, larger sites as well as acknowledging the fact that we do still have a couple of schemes based in London and the capital we've invested in those schemes continues to turn slowly, although it's smoothing. The visibility of our workload in this division has positively increased in the period. If we just take a look at our secured order book compared to the end of 2025, it's increased by 6% up to GBP 2.5 billion.

And for our preferred bidder work, on the same basis, that's increased by 10% to GBP 3 billion, which collectively forms the basis of our confidence in delivering against our ambitions over the medium and long term for this division. So as we look out towards the end of 2026, when it comes to our average capital employed, the range is now between GBP 500 million and GBP 580 million. And that's really a function of where our existing development schemes are in terms of their various stages, the sales pace that we are seeing currently together with our strategy around opening new sites.

In Mixed Use Partnerships, the division has continued to prioritize the number of projects starting on site throughout this year whilst balancing near-term viability challenges, which in some places have impacted the timing of those starts. But I'm really pleased to say that in the first half of this year, we successfully started 5 projects on site. Now just as a note, typically, in this division, you would see 4 starts on site on average per year. So to do 5 in the first 6 months is a really positive milestone for us. In the second half of the year, we expect to start a further 8. And by the end of 2026, we expect to have 15 projects operationally on site. At the end of the first half, however, this division reported a small operating loss of GBP 1.1 million as it's continued to expand investment cost to support, importantly, the starts on site this year. Its average capital employed also increased in the period, a function of the starts on site which do require a little bit of investment. And similar to Partnership Housing, this division also has a couple of schemes in London. The capital invested is taking its time to turn. It's turning slowly, but it's moving. At the end of June, its development secured order book stood at GBP 4.6 billion, followed by a further GBP 2 billion of work at preferred bidder stage, where we are one of one. And it's represented today by 9 sizable development schemes. As we look out towards the end of this year, our average capital employed is expected to be in a range between GBP 135 million and GBP 165 million.

Fit Out has once again delivered an outstanding market-leading performance in the period. Its revenues and its operating profit both up 19% each. Revenues at GBP 996 million, delivering an operating profit of GBP 69.1 million supported by the delivery of strong continuing volumes and revenues, excellent contract execution, the weighting of project completions in the first half and the continuation of operational gearing and leverage, which we've seen in previous periods. The combination of all of those factors delivering an operating margin of 6.9% in the period, in line with this time last year.

Now despite the short-term visibility that is so often associated with Fit Out, we increasingly are confident over the market fundamentals over the medium term. They remain strong. What we are seeing increasingly more is users of office space and tenants favoring refurbished programs today over expansion, but purely because of the limited supply of new build stock. At some point in the medium term, new build stock will come on to the market, and it will present another opportunity for this division. At the end of June, we had a secured order book of GBP 1.3 billion, followed by GBP 400 million of work at preferred bidder stage and a further GBP 1 billion of tendering opportunities at various stages.

Construction delivered a significant performance in the first half as it's continued to exercise a strong disciplined approach around risk management right from the bidding selection stage, right through delivery and handover. And it continues to align itself to sectors and markets that it works well and best in. Its operating profits in the period grew materially by 47% to GBP 24.4 million, delivering a margin of 3.3% with 98% of its work delivered through frameworks that is represented on nationally through 2-stage tendering processes together with directly negotiated works. The division has continued to enjoy a strong work winning momentum.

At the end of June, its secured order book was GBP 1.9 billion with a further GBP 1.3 billion at preferred bidder stage. Now education still is the strongest sector that generates revenue for this division, but health care shows increasing potential. In the period, the division was announced as an alliance partner on the government's new hospital program, which in totality as a program represents GBP 37 billion.

And finally, in Infrastructure, this division has continued in the deployment of its early planning and design activities across a number of frameworks that it's been awarded over the last few years. But notably in the period, that relates to work we've started with Scottish Power Energy Networks and Sellafield. But importantly, we've now started to move into the delivery phase for some capital schemes on the Great Grid partnership.

Elsewhere, the division has continued with a high-quality level of operational delivery across the remainder of its existing contract portfolio. In the period, it delivered an operating profit of GBP 18.3 million, virtually in line with this time last year with an operating margin of 3.9%. Now it finished the period strong with a secured order book of nearly GBP 2 billion, followed by preferred bidder work of GBP 600 million. Now its entire order book and preferred bidder work consists of frameworks. If we look at those frameworks to their full length, the visible workload now totals GBP 5.8 billion, which will support revenue delivery not only over this medium-term horizon, but into the next one, too.

Thank you. I'd like to talk about medium-term targets and outlook. Our medium-term targets are unchanged in Partnership Housing, Mixed Use Partnerships and Infrastructure. In Fit Out, we're increasing the medium-term target from GBP 100 million to GBP 100 million to GBP 130 million, which is up from GBP 80 million to GBP 100 million. Now this is because we are increasingly confident about the fundamentals of the market and our position in the market. And as you know, the market has been fairly disrupted by ISG, our biggest competitor who went bust. But we're now seeing sort of a more normalized market going forward, which gives us confidence to lift that medium-term target.

Construction is a business that we've been improving year-by-year over the last 10 years, really understanding risk, really understanding what jobs we as a company are best at and just concentrating on those and happy to increase the operating margin 0.5% to -- just check, I've got this dead right, yes, to 3.5% to 4%, which is up 0.5%.

If we look at the medium-term outlook, Partnership Housing, we are making great progress in building the brand, winning long-term schemes, but life is a little tough at the moment with viability and the housing market, as we all know, is not doing so good. So we actually -- the profits there will be slightly down on last year.

Mixed Use Partnerships, again, we are winning huge amounts of work. The brand is really strong, even much stronger than it was this time last year, yet again. But again, we got headwinds with viability.

Fit Out is doing really well, and we would expect to be slightly ahead of the new medium-term target.

With Construction, we would expect the margin to be at the bottom end of the new medium-term target this year and turnover increased to about GBP 1.4 billion, which is not far off our medium-term target of GBP 1.5 billion.

In Infrastructure, we expect the margin to be at the top end of the range and turnover just under GBP 1 billion.

So if I could sort of summarize, following 2 unscheduled profit upgrades, we remain confident that our full year performance will be in line with our current expectation. Now that strong balance sheet we have and substantial cash is absolutely fundamental to our business. The graph that Kelly showed earlier showing what our daily cash is on a daily basis, we've now been doing for over 5 years. That is really, really helpful when we're winning contracts because we put it in front of clients. Clients, particularly in Fit Out, want to know that we've got a strong balance sheet, we're going to pay our bills quicker than anybody else. Anybody giving us long-term contracts wants to know we're going to be around for the long term and we can spend money on those contracts now even if our return comes later.

This is absolutely fundamental to us, and that graph really is a very, very powerful tool for us as a company, particularly now we've been doing it for 5 years. So anybody who wants to can see what our daily cash position has been every day in the last 5 years, really powerful in the marketplace.

Now our decentralized and empowered culture is our real differentiator. This enables us to really attract really talented people, retain those people and those people making the decisions where decisions need to be made. Now we are just the opposite to an oil tanker. Think of us as a whole load of speedboats. But those speedboats have to be well maintained, the engine has to be good, the guy looking at it has to look at all the risks involved when plotting his course. He has to have his life jacket on, his flares. But more importantly, he's got to be listening to that shipping forecast and looking around the bay to see where the markets are moving, and he can then change that speedboat very quickly and move the business faster. This is where we benefit with our culture, and that is another fundamental. It's our culture and our cash. Now the other thing that's fundamental is, our organic growth strategy remains unchanged. We have a lot to do with what we've got, just making what we've got bigger and better.

I think any questions?

Aynsley Lammin from Investec. Just two for me, please. Just on Fit Out, if you could provide a bit more color in terms of kind of how that's expected to flow through to FY '27, the trajectory there? And have you got the organization or the capability already in the business to deliver that level of profit? Do you have to invest more, grow that kind of division? First question.

So maybe if I start, and John, you can add. So absolutely, we do have the organizational capability. We've been growing our resources and our management teams from a very, very early stage. I think we always have a fantastic statistic. We share that 75% of the management team have been with us for over a couple of decades. So this is people who have been embedded in our culture.

I think what's changing particularly with Fit Out increasingly is, yes, the order book remains strong, but the visibility will always be short. But the prospects for major projects, we can see what's coming up. We've got to win that work, but that's giving us the increasing confidence over the strength of the market fundamentals.

But let's not run away with ourselves. Our medium-term guidance is for less profit than this year.

And then just second question on partnerships, kind of any impact from obviously, a big competitor out there and looking a bit shaky than others. So any benefits or risk there? And with the new government, any expectation that this big council housing program could benefit you or how that may impact you?

Well, I think, it's really interesting actually with the new government because we have both a Prime Minister and the Chancellor who really understand the need for regeneration to improve areas economically and socially. But not only do they understand that, they both have had huge experience of it. So that, I think, bodes very well.

And if we're talking about regeneration of scale, our Partnership business, our Mixed Use business and our Construction and Infrastructure businesses give us an opportunity that I don't think anybody else has. So exciting prospects. And the first question, you mentioned a competitor, I don't know who you mean, but we are increasing our market share significantly.

Jonny Coubrough from Deutsche Bank. Can I ask firstly on Fit Out? Looking through to the medium term, do you expect your mix between major projects and your more typical work to change? And does that matter for margins?

One, it doesn't matter for margins. And two, we have no reason to think it's going to change, albeit we have seen over the last 3 or 4 years, more larger jobs than perhaps we saw before then.

I think that's fair to say. I think we will see a shift following the completion of some rather large projects that it will still have a prominent place within the overall portfolio in terms of the major projects.

And on partnerships, you mentioned that within Mixed Use, viability has impacted timing of starts, but you didn't say it impacted project returns necessarily through the life. So could you remind us what the mechanisms are to offset those viability challenges when they happen?

So look, fundamentally, no, it doesn't affect today the returns that we expect because we strive to really -- these schemes consist of multiphases, and they in themselves will have different returns. And of course, we will look to see how we can resequence and catch up the return deficit that we might have lost in the earlier phase because of the delayed start.

But of course, the overheads still have to be paid. So although the gross margins haven't changed, we do need the higher turnover to make the higher net margins.

And just last one would be on Infrastructure. Thanks for the division -- sorry, the end market split. I think you said in the past that the GBP 6 billion pipeline, about GBP 4 billion is Energy & Power. I hope I've got that right. So should we expect that, that should be the revenue mix? Or is it just different length?

So you're absolutely right when you look at that split from a visibility of workload, but that will take time to come through because that sector has a particularly long tail to it. So it will be a very gradual transition.

But the answer to your question is it will be -- it won't be that percentage of turnover. It will be a lower percentage.

Andrew Nussey from Peel Hunt. Again, a few questions to each one in turn. I guess, first of all, in terms of Partnership Housing, I appreciate there's a few uncertainties out there. But at the moment, as you stand there, do you think this year's capital employed will be at the peak level, and we should start to see it come back down in '27?

I think it probably will be. I think the reality is that whilst we're opening new sites, a lot of the work that we've been winning through partnerships will require perhaps an initial level -- lower level of investment. And at some point, we do expect some return in the housing demand. It's just a matter of timing.

Okay. And second question in Fit Out. You've sort of mentioned previously some caution around the smaller projects, the regional projects, particularly in terms of price competition as others try to build share. What's your read of the situation at the moment?

We probably held on to -- or we have held on to more market share than we expected.

And last question on Construction. Education is obviously the key end market. There's obviously been speculation that they might have to bear some budget cuts to help fund other areas. Are you seeing any hesitancy from that client in terms of awarding work from frameworks?

No, but we are expecting a shift because obviously, there's going to be more spending on, you can imagine, defense. In fact, we are pricing a lot of defense work at the moment across not just Construction, but Partnership Housing and Infrastructure. So we do see a shift. And we are assuming that perhaps there's going to be less money spent on things like schools, but we don't know.

I think the reality is -- Andrew, we expect to be net beneficiaries at some point, but the reality is the budget is going to have to be lost somewhere to pay for something else.

It's Ed Prest from Berenberg. Two from me, please. Firstly, in relation to construction, you've obviously increased your margin target for the medium term. Is that reflective of your own confidence in delivering and getting it right first time and therefore, seeing margin creep up? Or is there more of a broader market, actually margins on contracts being tendered, procured are increasing?

I think it's a bit of both. It is as simple as that.

Yes. Yes, it is.

And secondly, partnerships, again, another margin question. 8% EBIT margin is the medium-term target. Bridging from where you are now up to 8%, is that, from your perspective, very simply a case of improving consumer confidence, increasing the private sales and therefore, getting higher margins there? Or is there a bit more to it? Is there some more internal improvement still to come?

So look, it's a combination of a couple of factors. The revenue split today is 2/3 Contracting. We will always need Contracting, but we will almost need to see that shift towards seeing a greater proportion come through mixed tenure, which would, of course, include open market sales, which will drive margin improvement.

I think what we will start to also see is the benefit of the investment that we have put into this division to effectively achieve the economies of scale, which we have yet to see. So I think it will be a combination of a bit of operational gearing, a change in the weighting of the revenue profile to deliver the 8% target over the medium term.

Stephen Rawlinson from Applied Value. If you look across the housebuilders, they're talking of build cost rises of 3% to 4%, principally materials, some labor. Could you give us your thoughts about -- your observation on what you're seeing in build costs, but also in and around the willingness of clients to accept uplifts to price within your contracts, and whether there'll be a bigger pushback perhaps if budgets come under pressure because of other calls on government budgets in particular that we're seeing.

I think, in answering that question, it applies to not just housing, but Construction and Infrastructure as well. And yes, because these jobs are costing more, there is a little bit of delay, either the jobs are made a bit smaller or in fact, they have to get some more funding. So I think it applies across the whole range, and it does slow things down.

And then currently, you're able to pass those on. But if there is a bigger pressure, for example, to sustain the welfare budget, but build council houses, put more money into defense, will there be a bigger pushback from your government clients on accommodating build cost increases? Is that an observation? Or is that something you think you'd be able to mitigate?

Well, the good thing is because what we do is two-stage. We actually are not taking the risk on that inflation very often. And therefore, if they've got the money, great. If they haven't got the money, it will go somewhere else. But we don't know where the government is going to want to spend their money.

Stephen, what I would add is we have been in a hyperinflationary environment before, albeit different circumstances, and we have always found ways to manage that. Whether we take some of that risk or whether we're able to pass it on, whether it's a supply chain, we will work with the parties that we are in relationships and partnerships with. And I think there's not one route to that answer.

And always the biggest risk for us is if a subcontractor goes bust and we got to bring another subcontractor and it will cost us more.

Alastair Stewart, Progressive Equity Research. A couple of questions based on 2 themes that popped up at the beginning, viability and management of risk. On viability, I presume it's largely London-based. No, it's across...

Maybe I'll answer that one quickly first. So viability is national and it doesn't necessarily mean that the schemes can't go ahead. It's just the process that we're going to unlock that funding. It will be different from scheme to scheme. In some cases, it will mean a longer delay. But in others, it's a matter of months. But it's near term as we see it. And it is what Mixed Use Partnerships does well. It has a deep understanding of working with viability gaps.

That was taking me on to a supplementary question about are there any quick-ish fixes? Is it a case of -- with your construction background, you possibly have more scope for value engineering than, say, a typical house builder. And given the -- I know it's early days with the new administration, including Angela Rayner returning to Housing. Are you pushing more at an open door in terms of addressing some of those issues? So that's the first question, risk in a second.

So look, I think the more general response to that is, is it about -- I mean, yes, sometimes we might have to resequence or do the value engineering. But it's also down to our relationships that we have with local and central government to an extent of accessing grants. Because ultimately, all these parties share the same objective of placemaking and regeneration. So it's about how can we get there. And it's Mi Use or Mixed Use Partnerships, relationships across the piece that help us unlock it, but it takes time sometimes.

And then more briefly on risk, Ardmore and Torsion went into administration. When each biggish private company goes down, do you find you're getting more incoming calls from clients on the basis of your financial strength?

Yes, very much so. And we do need [indiscernible]. Of course, we don't need people to go out of business, but there is a side benefit for us that people do look closely at our balance sheet when somebody goes in, bust in the sector we're in, and very much so.

Is there any other questions? No? Thank you very much indeed, everyone.

Thank you.

Thank you.

I will say a few words and then Kelly will say a few more words again. And then I'll come back and talk about the medium-term strategy and outlook, and then we'll move on to sort of some questions if we may. Brilliant. So look, we've had a good year and a better year than we expected this time last year. In fact, actually, we've had 10 good years. So we've had 10 years where we've had record profits every year, except for the COVID year. So in that 10-year period, we've had a PBTA CAGR of 18% and a dividend CAGR of 16%.

I think the other thing that has been good in the year that our secured order book and preferred bidder work is up to about GBP 19.1 billion, but that's not the whole story. If we take into account the work that we have on frameworks where we've been allocated all the work on that particular framework, or the work that we expect to come from future phases of our development programs, that would actually take the sort of line of sight, if you like, up to about GBP 30 billion.

Now clearly, that is a huge amount of work, and we need a very strong balance sheet to do that. We need a strong balance sheet with a lot of cash. We need that so we can win the work, so we can really execute that work perfectly in good times and bad. And we also need the cash to drive our future organic growth at pace. We're increasing today on the back of the sight that we have a work, the medium-term targets of 2 of our divisions, Muse and Infrastructure. I'll now hand you over to Kelly.

Following strong and robust earnings growth over the last decade, this is a great segue into the group's significant trading performance for 2025. Now here are just a couple of our key financial highlights, a more detailed income statement you'll find at the back of the presentation pack within the appendices. Revenues increased by 10% to just over GBP 5 billion in the year, and that's been followed by our operating profit increasing by 39%, delivering an operating margin of 4.5%.

Following the lowering of interest rates during last year on our strong cash balances, our adjusted profit before tax and amortization increased by 35%, delivering a PBTA margin of 4.6%. That's 80 basis points up on this time last year. Adjusted EPS increased by 33% to 370p per share. Our effective tax rate continued to track in line with the U.K. statutory tax rate. Our net cash improved by GBP 39 million in the year, closing at GBP 531 million, also supporting our profit to cash conversion rate to 87%. That's 4 points higher than this time last year.

Our order book at the end of last year increased by 5% to GBP 12 billion, and that's been followed by a further GBP 7.1 billion of work at preferred bidder stage, totaling GBP 19.1 billion of future work, 17% up on this time last year and placing the group in a fantastic position to deliver its revenues over the medium term. Underpinning this all, underpinning the significant trading performance, the group has announced a 20% increase to its full year dividend rising to 158p per share. So I'm going to just give you a few headlines on the divisional performance. We'll go through each of the divisions in a short while. Once again, following a strong work winning year, together with excellent contract execution, Fit Out delivered a significant contribution to the group's results. Its profits increasing by 41% in the year.

But that's been followed by equally strong contributions from Construction, Infrastructure and Partnership Housing despite the latter being impacted by a weaker housing market. In Mixed Use Partnerships, the division reported an expected loss impacted by costs, which we've invested in schemes yet to start on site but planned for 2026. And in Property Services, it reported a modest profit in line with our expectations. So overall, totaling an operating profit of GBP 226 million, delivering a margin of 4.5%, 90 basis points up on this time last year, high-quality earnings supporting that delivery.

Now you heard me say a few moments ago, during the year, our net cash improved by GBP 39 million, closing at GBP 531 million. There's a couple of noteworthy points I really do want to draw to your attention. Some of them a bit obvious. Firstly, a strong operating cash inflow in the year of GBP 196 million. That's GBP 60 million up on this time last year, and that's after the net investment in our partnership activities of GBP 125 million. It's also facilitated and supported the delivery of that profit to cash conversion rate of 87%.

Secondly, when it comes to our capital allocation framework, we've continued to apply the principles, the key one being investing in our partnership businesses. For us, that's predominantly Partnership Housing. And here, we've continued to invest and support the development of not only our existing schemes, but the expansion of our sales outlets. At the end of 2025, Partnership Housing had increased its active open sites to 70. Thirdly, during the year, there have been strong returns to our shareholders amounting to GBP 66 million, comprising of not only the 2024 final dividend payment, but the 2025 interim dividend. And finally, when you look at the closing net cash as a proportion of our revenues, that's about 10%. That's massively key in supporting the delivery of our future workload of about GBP 19 billion plus.

So let's just touch briefly on the capital allocation framework. And the hierarchy remains unchanged as does the principle of holding significant cash at all times. Not only does that give us that competitive advantage in terms of work winning across all of our divisions, but it allows us to make the right choices, the right decisions around our regeneration activities. So let's put a little bit of color and context behind that. If we just look at last year alone, the future workload for those 2 businesses, and by that, what I mean is the secured and the preferred bidder work, that increased by 29% to GBP 11.5 billion.

That growth in that year alone is supported by the returns that we've set out in the medium-term targets for those 2 businesses. So a much more familiar chart. So the blue line sets out our daily cash profile all throughout 2025, and the gray line does exactly the same, but for the previous year being 2024. Another rather obvious statement or observation here is how closely those lines have tracked with each other all throughout the year. But I wouldn't want you to think that, that's what 2026 is going to look like because receipts and payments will ebb and flow and investment decisions will take place at different times of the year.

But overall, the average daily net cash landed at GBP 368 million, slightly lower than this time last year, but the second half was at GBP 381 million and actually slightly higher than the second half of 2024. So I think that just reinforces this point about the timing of the receipts and payments and when investment decisions are made. When we look at the highs and lows during the year, the lowest point once again was in May at GBP 270 million. The highest was almost just a day or 2 before the end of the financial year closed at GBP 564 million. And those of you that can really see it, there's a little dip right at the end of the year, and that's a payment run that happens pretty much every year.

So a few thoughts here. Even at the lowest point, there's good headroom because of the unutilized facilities. But I think what's more interesting is just in that period between the highest and the lowest, how significant the cash swing movements can be, particularly now for a business of our size where we're delivering around GBP 5 billion of revenues. So I think it's important to look at our cash, not only at the end of the year, not only during the year, but at the lowest point of the year. As we look forward to 2026, we expect our average cash to be in excess of GBP 400 million.

And that's really because we want to continue to take advantage of those opportunities within our partnership businesses where the returns will be in line with the targets we have set out for the medium term. ESG continues to be integral to us operating as a responsible business. And whilst the legislative environment has continued to change and continues to change in the forthcoming period, we expect that, that's going to start to settle in the second half of this year. But we forged ahead with our commitments in this space.

And here are just a couple of the highlights to chart the progress that we've made. When it comes to leadership in climate for the fifth year running, we've been awarded the AAA rating by MSCI and A- rating by CDP. We're on track with the medium-term target set out for Scope 1 and 2 emissions. So as a reminder, what we said was by 2030, we would achieve a 60% reduction in those emissions. By the end of 2025, we are at 55%. When it comes to protecting our people and safety, once again, over 90% of our projects remain injury-free. And finally, in 2025, we created GBP 2 billion of social value, bringing the cumulative to date position to GBP 6.5 billion. And that can range anything from helping generate local employment to supporting local regional businesses to helping communities develop their infrastructure to becoming healthier and safer.

So let's now take a slightly more deeper dive into each of the divisional performances and much of my narrative will be looking back. The looking forward element, I will leave John to provide that overview. So in Partnership Housing, the division has continued to expand and forge ahead with delivering long-term partnerships with the public sector. And during the year, it had notable sizable awards with that public sector, including partnership schemes with Cardiff and Vale of Glamorgan Councils and Barnet Council, where for these 2 partnerships alone, we expect to deliver around 3,000 homes over the next decade.

But more recently, the division has been appointed preferred developer with Birmingham City Council on the Druids Heath Regeneration scheme, where it expects to deliver around 3,500 homes over the next 2 decades. But over the last year, its revenues increased by 5% to GBP 903 million. And it once again has been supported by strong growth from its contracting activities where those revenues have increased by 13% to GBP 638 million at a time when the housing market has remained subdued. But overall, the division delivered a strong and resilient performance in the year with its operating profits increasing by 16% to GBP 42 million, delivering a margin of 4.7%, 50 basis points up on this time last year.

Its average capital employed increased in the year by about GBP 108 million, up to GBP 446 million, and it's been influenced by a couple of factors here. We've got a couple of schemes in the London region, where the capital has been higher for longer, largely impacted by the weaker demand in the London area, particularly around apartments. But despite that, the division has progressed with its sales expansion of opening new sites and outlets, and that requires investment. With a secured order book of GBP 2.3 billion, preferred bidder work at GBP 2.8 billion, a strong pipeline of future development phases, we remain confident in the division's ability to deliver against its targets and ambitions, recognizing the need for a recovery not only in market conditions, but also returning consumer sentiment and demand.

As we look forward, though, to 2026, we expect the average capital employed to be in a range somewhere between GBP 490 million and GBP 550 million, recognizing the growing increasing scale of this business and the stage of where its developments and schemes are for the forthcoming year. Moving on to Mixed Use Partnerships. Now as I said earlier, this division reported a loss of GBP 5.3 million. It's an expected loss largely impacted by the costs that it's invested in schemes yet to start on site but planned for this year as well as supporting those schemes that represent future opportunities for this division in years to come.

To put a little bit of context around that, at the end of last year, we had 7 schemes on site. By the end of this year, we expect that to more than double to around 19. During the year, the average capital employed for this division increased by about GBP 38 million to GBP 125 million, slightly similar themes to Partnership Housing. We've invested capital in one London residential scheme. The capital is higher for a little bit longer, but it will turn, again, driven by the weaker demand within the London region.

But 2025 has been a significant work winning year for this division. It's continued to build upon its prior year successes, converting 8 schemes from preferred bidder stage through to signed development agreements, and that's been followed by the appointment of preferred bidder on 8 sizable schemes during the year. At the end of the year, it had a secured development order book of GBP 4.6 billion. That's 13% up on this time last year and a further GBP 1.7 billion of work at preferred bidder stage.

As we look forward to the end of -- or during 2026, we expect the average capital employed for this division to be in a range of GBP 125 million to GBP 140 million. Now as I said earlier, Fit Out has delivered a significant result for the year, contributing to the group's overall results. Its revenues were up 37% to GBP 1.8 billion. Its profits rose by 41% to a record-breaking GBP 140 million, delivering a high-quality margin of 7.8% but this outcome hasn't been solely driven by the exceptional volume growth. We've had excellent operational contract execution with real precision and the ongoing continued benefit of operating leverage.

But all the while, the division has placed increased focus on delivering the very best high-quality outcomes for its customers and ultimately, the end user. And that represents everything that this brand has been known for, for the last number of decades. It closed the year strong with a secured order book of GBP 1.3 billion and a further GBP 0.5 billion of work at preferred bidder stage, highlighting the short-term visibility we always see in this business. So totaling GBP 1.8 billion of future work.

In Construction, this division has continued with the strong discipline it exercises around risk management, right from the selection stage through to project management and delivery right through to handover. And it's this consistent approach, it applies to the large volume of projects, it's delivered all throughout 2025 that has led to the revenue growth of 11% to GBP 1.2 billion, the significant growth in profits by 20% to GBP 37 million, delivering a margin of 3.2%, right in the middle of those medium-term target ranges for margin.

Now the public sector continues to represent a significant proportion of the revenues delivered in the year, around 85% and education continues to be the largest sector we serve around 46%. And pleasingly, the division was reappointed on the Department for Education's framework late last year. But all throughout last year, this division experienced strong work winning momentum. It finished the year strong with a secured order book of GBP 1.1 billion with a further GBP 1.5 billion of work at preferred bidder stage, totaling GBP 2.6 billion of work for the future, and that's a 20% year-on-year improvement.

Property Services, following the successful remediation program that we concluded on in late 2024, delivered an expected modest profit of GBP 2 million in the year. But more importantly, from the 1st of January 2026, this division has now successfully integrated into our Construction division. That's where the work is so much more aligned, and that's what we shared at the half year. And so this is the last time that we will report on Property Services as a stand-alone division.

And finally, turning to Infrastructure. Very similar to Construction in terms of its approach to risk management, particularly in respect of those long-term framework contracts. And this is where it carefully balances the profile of risk and reward right from the selection stage through to delivery. Most of you will remember, 2024 was a fairly significant work winning year for this division. It won around over GBP 2.5 billion of work. That theme, that trend has continued in 2025. It's won over GBP 2 billion of new work, largely in the energy and the nuclear space.

The long-term framework contracts that's been awarded will include examples like Sellafield IDP, where that framework will last anywhere between 9 to 13 years. And National Grid electricity transmission partnership framework. So as a result of these frameworks, these large frameworks that it's won over the last 2 years, the division plan to commence a high volume of early planning and design activities during 2025. And so as a result, there was an expected decline in revenues, which we also highlighted at the half year, where revenues have now declined 11% to GBP 935 million.

The operating profit, however, marginally declined by 3% to GBP 37.2 million with its margin at 4%. That's 30 basis points up on this time last year and again, right in the middle of its medium-term target range. And finally, this division finished the year strong with a secured order book of GBP 1.9 billion, a further GBP 700 million at preferred bidder stage and only including the visible work from those long-term frameworks, which I've just talked about. So John, over to you.

Thank you, Kelly. So I think the big message on Partnership Housing is we've been winning enough work to give us confidence about our medium-term targets. And if we look at the visibility on the left, over the 2-year period from the end of '23 to the end of '25, we've doubled the visibility of what we can see. Obviously, the dark blue are secured orders, which actually haven't changed a great deal. Then we have the light blue, which is the preferred bidder. And then the gray is what we'd expect to get from further schemes in the same development agreements.

Now they wouldn't be a preferred bidder yet because perhaps they've got to get planning permission or some funding or something like that. We have now a line of sight of GBP 7.1 billion. And to give you some idea, that's about 33,000 homes. I think the other big message in Partnership Housing is that contracting is broadly 50% of the turnover at the moment. But as we go forward and these partnership schemes come on site, the contracting turnover, which is the dark blue on the right, is not really going to increase, but what does increase is the mixed tenure, and that's what we need to get to our medium-term targets.

If we talk about Muse, now here, again, significant wins in the year gives us confidence to increase the medium-term target ROCE towards 30%. But we'd expect that to be at the end of the medium term because it's going to take us time to get there. Now the order book here is an interesting one because the GBP 6.3 billion is our equity share of the partnerships. But because we run the whole thing, a big part of our income comes from the development fees that we charge. And the development fees would be on the figure in excess of twice that.

So that's actually quite a significant thing that I think people can miss quite easily. And to give you some idea of scale, again, that's about 6 million square feet of nonresidential mixed use and about 22,000 homes. So if you add the number of homes with mixed-use and partnerships, that's about 55,000 homes in the pipeline, which is quite an increase on where we would have been this time last year. Now this is a business that we've been in for about 20 years. We've learned a lot. We now know a lot more about what makes the scheme successful, and that gives us confidence that the ROCE are going to be higher going forward as indeed with turnover because we have 7 projects on site at the end of '25. And by the end of 2030, with what we can see, there's going to be 31 projects on site.

So quite a change in this business over the medium term. The graph on the right shows what the turnover of our share of the equity is likely to be over the next few years up to 2030. Now Fit Out is very interesting because Fit Out in many ways is similar to Muse. Both businesses are the market leaders in a very specific market. We have spent 20 years in Muse and nearly 50 years in Fit Out, one, building up the track record, and two, the knowledge that we need to be market leaders. There is a fundamental difference between the 2, though, inasmuch as Mixed Use has more work in the second half of this century than Fit Out has for next year.

So that is a very different thing completely. Now the landscape has changed significantly in Fit Out because I'm sure most of you are aware, ISG went out of business a year or 2 back, and we certainly picked up quite a lot of work on the back of that, particularly with the strength of our balance sheet, which is obviously fundamental for people having Fit Out work, having done for them. But we're still keeping the medium-term target between GBP 80 million to GBP 100 million because we do expect it to come back shortly.

Now the other thing we've got to remember about this business is compared to perhaps a contracting business, it has a higher gross margin, but also a much higher overhead. So it's much more operationally geared. So when the turnover goes up in a bit of a rush, we do very well. But of course, reverse could happen when the turnover comes down. But having said that, it's a really good business and the markets that we're in are still strong and supporting it, but we do have sort of competitors looking to get some market share, but it's still a great business.

If we move on to Construction, this is a business that we've been growing carefully and very successfully, particularly over the last 10 years, looking at how do we reduce risk. Our orders come from 2-stage tender. In fact, our order book is up very dramatically at the moment, which is great. And it's all about high-quality delivery. Our average contracts are smaller than most. Here, we are talking over GBP 1 billion turnover, but the average job is still only GBP 15 million to GBP 20 million.

And we can see from the order book profile on the right-hand side, we're pretty well set up for this year, and we've got a good start for next year and indeed a good base for the year after. So we feel really confident about this business going forward. Now Infrastructure is a very interesting situation where we've actually tripled our line of sight of work over the last 2 years. Again, the order book on firm orders hasn't really changed. Our preferred bidder has gone up a bit, but the work that we would expect to get from the frameworks where we're the only people allocated on the frameworks has gone up dramatically.

So our line of sight is 3x what we could see 2 years ago, quite a significant change and bodes really well for the future. So if we look at the medium-term targets, we put them here really for record, but the only 2 we're changing this time are Mixed Use Partnerships and Infrastructure. And I think I've gone through the reasons why we've upped both of those, both because of extra work coming in.

So if we look at the outlook for '26. Partnerships, we see solid profit growth expected with a ROCE similar to '25. Of course, the final outcome will depend to quite a large extent on what happens to the housing market for the rest of this year. At Mixed Use Partnerships, we see a lot of projects getting on site, a lot of work that we're winning. So we're probably only going to make a very modest profit and a low ROCE. Fit Out, we've already said that profits are going to be significantly ahead of our medium-term target range for '26. With Construction, we see the margin being right in the middle of the range with revenues towards GBP 1.3 billion. And Infrastructure, again, margins to be in the middle of the range with revenue towards GBP 1 billion.

So if I sort of summarize, look, our long-term organic growth strategy remains unchanged. We're in the markets we want to be in, and we see real growth in those markets. So there's still a huge amount for us to go for. The biggest differentiator for our group is our decentralized and empowered operating model. This really allows great people in the businesses to really drive those businesses hard at pace and to be really flexible and get there before the competition. That really is our differentiator.

I talked about our strong balance sheet, obviously, Fit Out profits being higher than expected and the medium-term increase in targets in Muse and Infrastructure. And I would summarize by saying we're on track to deliver an outcome for 2026, in line with our revised expectations set out in the trading update released on the 12th of February this year.

It's Rob Chantry at Berenberg. Three questions from me. Firstly, on Muse, you've obviously increased the return on capital profile from 20% to 25%, now 25% to 30%. Could you just give some more color around the kind of confidence so early in the kind of build-out to give those return on capital increases? And also comment, I guess, on the EBIT contribution relative to the timing of the preferred bidder chart that you had? Secondly, on Fit Out, again, obviously, exceptional performance. Is there much color you can provide on the shape and concentration of the EBIT profile in the year versus history weighting to large projects of note?

And then thirdly, Infrastructure, interesting to see an increase in target to GBP 1.5 billion. Could you just talk about the even longer-term ambition in that space, given the real strong structural drivers in areas like energy, nuclear, water? I mean, do you believe Morgan Sindall could be an even larger player in that infrastructure dynamic on a 10-, 20-year view?

I think when we talk about our medium-term targets, they're never the limit of our ambition, but what we think we can do in the medium term. If we look at Muse, it's the reason we've upped the target is because we can see that the ROCE is that we're likely to be winning on the schemes that we have won, and that's significantly better than we've had in the past. You might like to touch on Fit Out.

So I think, look, on Fit Out, what we have already signaled is we've been in a rather exceptional window driven not only by the changing competitive landscape, but also the mix of work we've been delivering. And we do see that normalizing in a strong marketplace. So the guidance we've already shared with you still solid and robust.

And I think with Infrastructure, we've upped it to what we -- where we think we're going to be in the medium term. But again, that would not be the limit of our ambition. But we wouldn't -- but we're more concerned about quality of earnings than we are about volume.

But having said that, the spaces where there is growth around energy and nuclear and even to some degree, water are all spaces that we are very active and present in.

Aynsley Lammin from Investec. Just 2 for me, please. On Partnerships, obviously, last year, site numbers going up, margins going up, which is in contrast to kind of what we're hearing from others in the sector, there's margin pressures and plan is difficult to get. So just interested to maybe hear a bit more explanation and color how you've been so successful opening sites and increasing the margin and your view on '26 for that area?

And then secondly, just, I guess, following on from previous questions, just on the Muse outlook, you're going to be active on more sites this year, clearly, and you had the loss of GBP 5 million. Maybe if you could give us some help on what turnover and operating profit would be this year on a more short-term basis.

Maybe I'll take those. So I think perhaps just on the Partnership Housing, you're absolutely right, Aynsley, we have expanded the number of active sites that are open to 70. Look, we're a national business. And yes, overall, the market is somewhat subdued. But there are regions and pockets of the U.K., which we operate in, which have very good sales rates. So we've been pivoting towards forging ahead in those areas. And fundamentally, we believe that the market will return. So we are still forging ahead with our plans, but being smart and cute about the areas which are softer than others.

But we shouldn't forget that housing for sale probably represents less than 25% of the turnover of that division. So we will do better than a normal housebuilder in a bad time, but perhaps a normal housebuilder will probably do better than us in a good time.

Just even with the kind of issues around social, the funding for affordable social homes, you're navigating that quite well, I guess.

Look, I mean the reality is when we go into partnership, we're working closely in understanding the financial health and well-being of those associations or partners as do they with us, by the way, because it's a long-term partnership, and they need to be sure we're going to be there for the end of that partnership, whether it's 10 years or 20 years.

Our balance sheet and track record is enabling us to win more than our fair share of the big partnerships.

So just returning, I think, finally to the question on Muse. Yes, there's -- we had 7 schemes on site end of last year, that's more than doubling by the end of this year. We shouldn't get too carried away, though, with the size of the revenue profile and indeed, the profit because the spend will gradually build up and the profile, therefore, of revenue and profit will become more meaningful towards the middle of the medium term. And certainly, the returns will be yielded, as John has signaled towards 2030. But this is a ramp-up.

It's also important to understand that when we win a scheme in Mixed Use, it's likely to take 3 years before we get on site and probably another year before we start to make any money. So it's a very long-term business. And as I said, we've got work going into the second half of the century, which is pretty unusual.

Sorry, if I can squeeze in one question, sorry. So following up on the Muse, if I can about the capital expenditure involvement you guys are expecting? Because I think you mentioned GBP 125 million to GBP 140 million expected. So how should this evolve from 2026 and onwards? And also how about the Partnership Housing CapEx expectation as well?

So if we start with Muse, we've guided that it's going to be in a range between GBP 125 million to GBP 140 million for this forthcoming year. I think as you look over the medium term, it will ebb and flow a little bit. I think one of the charts in the presentation showed the range. In the middle of the medium term, it will come down a little bit because there's an expectation some of the capital invested will start to turn and be realized. And then incrementally, it will grow. We have highlighted previously. This is one partnership business where it will be modest incremental growth in the capital invested. It won't be significant.

That is in the short term.

Yes. Yes. We're talking about this medium-term horizon, you're absolutely right. With Partnership Housing, we've guided between GBP 490 million and GBP 550 million just because of where we are with the stage of developments and the market in general. But I think over the medium term, again, one of the charts does show that, that starts to normalize very much in line with what we've always said over the medium term, sort of around the GBP 450 million to GBP 500 million, very much in line with the medium-term targets.

Alastair Stewart, Progressive. A couple of questions, please. London housing featured -- London housing in apartments in particular featured in the Partnership Housing and Mixed Use divisions. Presumably, it can't get much worse than it is -- London housing can't get much worse than it is just now. Are you seeing any signs of improvement perhaps through the emergency measures announced recently in that division? And then in Fit Out, the total order book went down slightly, but the -- if I understand it right, the 12 months ahead orders went up. Is there any strange difference in the dynamics between previous years? And are your gross margin expectations for that division in the 12 months ahead, any different to usual?

I think we would expect the turnover and the gross margin in the Fit Out division to be lower this year.

And I think the reality is it's just the mix of projects we're delivering, Alastair. I think just going back to your initial question though on the London market, I think we're no different in terms of the trends we're seeing to anybody else. It does ebb and flow. It is moving, but we're no different to anybody else in that space.

Visitor numbers are marginally up.

Andrew Nussey from Peel Hunt. Again, a couple of questions. I might ask each in turn. First of all, on Infra, where the revenue target has been increased to sort of GBP 1.5 billion. Is that really driven by the nuclear and energy sectors? Or is there other elements within that? And arguably, given that level of mix, it might have been an opportunity to review the margin target as well.

We reviewed the margin targets not that long ago, and we can't sort of increase them every 6 months, as you can probably appreciate. But you're right, a big chunk of that growth has come from particularly the energy sector.

And secondly, Property Services is now part of Construction. Given that focus on planned maintenance and decarbonization, should we expect that to help or drive an element of underlying margin improvement there? Or should it continue to be a drag on that divisional margin for some time?

So I think the way you should look at it is it's going to be a very, very small part of Construction. It will be careful growth, which construction will lead upon. So I think you should look at the guidance we've given on Construction and assume that's the guidance that remains.

And last question on the cash balances. I think you alluded to feeling comfortable with 10% of revenues as spot cash at the end of the year. Can we read into that as 5% of revenues as being the minimum point that you feel comfortable with?

I think I actually said it's key to the delivery of the GBP 19.1 billion workload as opposed to comfortable. So I think that's probably the important statement here. It's key.

As you can imagine, it's something that the Board review on a regular basis. But it's not -- I think to just say a percentage of turnover is too crude a way to look at it. It's what do we think the partnership needs are going to be over the next 4, 5 years and a lot of other things.

Jonny Coubrough from Deutsche Numis. Could I ask firstly on the Fit Out market? You mentioned some competitors are trying to get market share. Do you think the overall market has the capacity to deliver the amount of work they've taken on over the past year?

The Fit Out market has been strong, and it's still good. But I doubt it's going to grow significantly over the next 2 or 3 years. So this is why we are sort of flagging up that we would expect our turnover and our profit to reduce in Fit Out. It's probably not reduced as quickly as we might have expected.

And going back to Muse. In the presentation, it pulled out, I think, GBP 14 million of overheads relating to upcoming schemes. Is that a run rate? Were some of those one-offs? And will that amount of overheads be covered by revenues this year?

There will be an element of that, that starts to get covered because there will be some profit contributions through development management fees. But I think the guidance on the overall profitability is still quite modest because of the level of spend that is going to be quite gradual in terms of the stage of those schemes on site.

And you can imagine, we spend a lot of our overhead getting a job on site before we actually start earning any money. So a lot of that overhead will actually transfer from working on the schemes before they're on site to being on site.

And let's not forget that, that isn't entirely down to getting a scheme on site. It's also about keeping the machine running on winning new work, which is quite important.

And the last one would be on the GDV. You gave in the slides what the GDV should be going forward. And John, you pointed out that the development fees are on double that amount. Are you able to tell us roughly what a typical development fee as a percentage of GDV is across the portfolio?

Probably be unhelpful because what we do on each one is slightly different.

And finally, is development risk changing much in the schemes you're taking on across sales risk, for example?

We're doing much more forward selling.

Stephen Rawlinson. Just a quick one on the working capital lock-up on housing in London. Could you just give us an idea of whether that's in completed units? Is it sort of -- are we ready to roll should the market pick up? Do you have an amount of flexibility over pricing on that, which should enable you to reduce that capital employed?

And you probably won't be able to -- would be willing to tell me what it is that you've got locked up in London, but it'd be interesting to know what proportion is of the total or some figure that helps us understand better what's going on in London and how quickly you might be able to reduce that capital employed? And furthermore, what -- you've mentioned your plans to look at the other geographies. Would it be the case also that longer term, you'll be looking outside London as well?

So maybe if I start on that one. I think, look, the reality is it's a combination of in progress and completed stock. They are selling. We are getting a lot of inquiries. It's just taking longer. It's just -- it's higher for longer. But we're not worried. The capital will turn in the near medium term. The range of how much we've got invested is somewhere between about GBP 100 million to GBP 150 million.

I think one of the advantages of having a good balance sheet is we can make the right long-term decision, and we're not forced into doing a fire sale or anything like that. And the profit we're making on them is the profit that we would expect. It's just selling less of them per month than we would like.

So I think you mentioned short term that you're looking away from London. Is that a longer-term position that you would hold as well that you'll be seeking to move out with some sort of level of concern around about London's commitment to housing?

No, we're not against London. I think we probably recognize that building large residential schemes with sales risk, particularly flatted apartments is probably not for us. Any more questions, anyone? Well, thank you very much indeed for your time today. Thank you.

Thank you.