Taylor Wimpey's (TWODF) Trading Update Call Transcript

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Taylor Wimpey Plc (OTCPK:TWODF) Trading Update Call January 11, 2016 4:00 AM ET

Executives

Ryan Mangold - Group Finance Director

Analysts

Will Jones - Redburn

Clyde Lewis - Peel Hunt

Glynis Johnson - Deutsche Bank

Gregor Kuglitsch - UBS

Andy Murphy - Bank of America Merrill Lynch

Kevin Cammack - Cenkos

Operator

Good morning and welcome to the Taylor Wimpey Plc Trading Update Call. Today’s conference call will be hosted by Group Finance Director, Ryan Mangold, followed by a Q&A.

At this time, I’d like to turn the conference over to Mr. Ryan Mangold. Please go ahead, sir.

Ryan Mangold

All right. Thank you very much. Good morning, ladies and gentlemen. I’m running the call for Pete today. The poor man’s got severe laryngitis. He’s planning to be on the call, but he just can’t speak right now. The trading update for the year-end December 2016 and I will include some thoughts, booking commentary on the wider market as the well as the order book later in the call before the Q&A.

2016 for the Group is another record year for the business despite the result of the referendum and the resulting wider macroeconomic uncertainty in the middle of the year and we continue to make very good progress against our medium-term target that we set out in May 2016.

Looking at the results, we expect to deliver an operating profit at the upper-end consensus that we believe is £755 million and expect operating margins to be around 20.8% for the year versus the 20.3% achieved in the prior year.

In terms of housing demand, this has remained good for the year despite the wider macroeconomic backdrop as a result of the EU referendum, customer confidence combined with higher mortgage availability as well as interest rates that continue to improve during the course of 2016 resulted in the UK business delivering 13,881 homes, up 4% year-on-year and record closing order book by volume of over 7,500 homes. There is a slight reduction in joint ventures year-on-year in terms of number of completions and so principally the underlying early on subsidiaries of the Group produced more than 2.5% increase in volumes.

The order book value at £1.7 billion is slightly below 2015 and this is principally due to a lower order book in our Central London business as a result of a high level of completions at the higher price points in the month of December with the rest of the country continuing to benefit from a sustained good demand.

Private average selling prices were up 13% at £286,000 and the total average selling price for the business at £255,000 was up 11% in 2015 benefiting from both mix and market driven inflation. Sales rate for the year at 0.72 was marginally below 2015 of 0.73 and – with this continued low level of cancellations that we saw during the course of the year.

Looking at land, the short-term land market continue to be positive throughout 2016 and our landbank has remained broadly flat year-on-year at roughly 76,000 plus in the short-term landbank and remains at optimal scale and in line with the group strategy. We converted over 9,000 plus from our strategic pipeline into our short-term landbank in the year and this remains a key focus area of land supply into the future.

Mindful of the wider macroeconomic backdrop created by the outcome of the EU referendum and a high quality and optimal scale landbank, we remain selective in further land investments and expect this to largely remain in balance for 2017.

Our Spanish business has delivered a strong result in the period and is expected to report a significantly improved operating profit versus the £10 million delivered in 2015. The business also remains well positioned with a very strong order book at 293 homes for a decent – and a decent landbank for delivery into 2017 and beyond.

Our net cash position for the business at the end of the year was slightly ahead of prior guidance at £365 million and this is up £140 million in the prior year after paying off £356 million in dividends. The improved profitability and continued focus on balance sheet discipline has made that we expect to deliver a return on net operating assets of about 30% for 2016 versus the 27% achieved in 2015.

As we look forward, we think that the positive housing market trend we saw in the summer and through the autumn after the EU referendum has continued and we are not expecting any change to that in the short-term. And as noted in November 2016 in our trading update, we expect volume growth in 2017 of around 45% year-on-year and average selling price growth of around 3% for 2017. If we look at the change in build cost inflation and the build cost drivers, we expect the guidance to remain broadly the same with inflation running at around about 3% to 4% for this year.

So in summary, the strong order book, the high quality landbank position, as well as the strength and quality of the overall business positions us well for a continued progress against our medium-term target that we set out in May 2016, which just as a reminder is an operating margin of 22%, a return on net operating assets of over 30% and returning £1.3 billion to shareholders by way of dividends through 2016 to 2018.

Let me now handover to the callers for Q&A please.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And our first question comes from Will Jones in Redburn. Please go ahead.

Will Jones

Good morning, Ryan, guys. Three question, if I could, please. First, just going back to the volume guidance for 2017 of plus 4% to 5%. Clearly, you just start the year with outlet lower, and I doubt is it your thinking the sales rates change much versus last year. So is it – are you thinking that the order book at the end of the year could drop, I guess, you did say as a record level, so just wondering what you’d be happy to run that order book at more generally to deliver completions?

The second was just around margin, just to get an idea. When you talk about the margin progress this year, is that, I think, usually work on the basis of thinking that prices like-for-like stay flat from here forward, but you bake in your build cost guidance that you thinking through the year. Is that the case as you talk today?

And then the last one was just around London. Clearly in November, you flagged in your Central London business that you were moving on price, I just wondered to what extent that had worked in terms of gaining customer traction. Thanks.

Ryan Mangold

Sure, Will. On the volume guidance, that’s principally on OpEx as opposed to necessarily sales rates. As we said before, sales rates of about 0.72 to 0.75 for us would be sort of a normal healthy mortgage market sales rate and hence the volume growth and will be hanging what more of – out of that’s – than it does out of sales rates. There’s been a slight shift during the course of 2016 by the way that we sort of measure out this from a technical point of view. We still classify any place that you can buy home. What we have delayed is the business’s ability to launch an outlet to promote marketing until we are far more progressed on the infrastructure and installing – and dealing some of the technical complexities.

Will Jones

Yeah.

Ryan Mangold

As a consequence, we have reduced out the business [ph] slightly. So why the marketplace – what we are seeing on the ground from a customer interest point of view from a reservation perspective, we believe that they aren’t typically opening during the course of this year for sure should we continue to have the same level of demand as we’ve seen in the second half of last year and that is the underpin really of the volume guidance. There is not really an order book position from our perspective. There is a slight difference if you look at 2015 versus 2016.

Will Jones

Yeah, but it’s that you’ve kind of banking – the order book drops at December 2017 – on December 2016 particularly, it’s more the outlet position that should deliver the volume growth?

Ryan Mangold

Yeah, we are not expecting the order book to decline in the number of units arguably end of 2017 versus the end of 2016.

Will Jones

Great.

Ryan Mangold

And then on margin guidance, as we’ve indicated we expect sales prices, without any sort of market inflation to be up roughly about 2% to 3% year-on-year, so there is a small amount of mix build come through as well as capturing some of the pricing growth from a market perspective that we would have seen during the course of 2016 that sits in the order book. We are pretty certain on the build costs for this year. Basically relatively far, far ahead, so we don’t think that will necessarily be an influence on the margin.

Will Jones

So just to be clear, you are within the – when you are say margins, hopefully will rise this year, that’s with the expectation you see some gentle like-for-like inflation from here in the year?

Ryan Mangold

That’s great. If you kind of think from operations point of view, we generally are procuring relatively forwards, we’ve got a good understanding of what it’s going to cost us certainly for the sort of first six to nine months on average for delivery from a cost perspective and we have contemplated that sort of marginal build cost increases from an inflation perspective in our guidance for margin.

Will Jones

Thank you.

Ryan Mangold

Then you had a question on the London market, specifically, with regard to the order book, I think it was – we – as we flagged during the course of 2016, the London market, certainly, the prime London market, not the greater London market, but the prime London market was slightly slow during the course 2016 than it was for 2015. So we enter this year with a lower order book relatively speaking in a forward sold position, relatively speaking for London in 2017 versus 2016 and that’s contributing to some of that production.

Will Jones

And in terms of on the ground feedback from the sites around, I think, the price move that was made in the second half of the year and to a extent that’s generating additional interest or reservations, is it too early to tell or what’s the latest, I suppose, from that part?

Ryan Mangold

I think we saw sort of an increase in interest in that fourth quarter of last year where I think there’s bit more certainty on the exchange rate fundamentals. Because the prime London market where at least underpinned by the foreign buyers and I think that there was probably a little bit more comfort uncertainty on the exchange rate fundamentals, which I presume is making it and resulting it being a bit more attractive for the foreign buyer. But it’s probably slightly too early to call it, but the interest there does seem to have increased.

Will Jones

Thank you.

Operator

Next question is from Clyde Lewis in Peel Hunt.

Clyde Lewis

Morning, Ryan, and morning, Peter, and I suspect Debbie there as well. Just a couple on land if I may and also may be on sort of regional sort of plans. But Ryan, you referred to sort of landbank lend being optimal, but increasingly we are sort of hearing more and more moves from sort of central government define increase and speed up the planning system, how are you – how is sort of your thoughts, I suppose, about that landbank lends sort of evolved in sort of – certainly post Brexit and obviously sort of what you are seeing regionally in terms of sort of prices and margins? How things moved on that front? And second one really was on regional sort of plans, have you got any sort of current thought about whether or not you want to start opening anymore new regions in 2017?

Ryan Mangold

Sure. On the landbank being optimal scale, it’s sort of at 76,000 plus or so. We haven’t really shifted from our position, Clyde, on the length of a landbank for the execution of our business model being roughly about 5.25 years or so. So at 76,000 plus, it certainly gives us strong ability to deliver the growth aspiration that if you wanting to do and also to do them in the right way. There is no doubt that the government has continued support in trying to ease the planning process to make more land available and to expedite the planning process doesn’t mean that we in theory can’t get onto sites slightly faster. And that positive focus by government is meant to be more significant and continued to have a significant contribution of strategic land promotions into a short-term land market – sorry, short-term landbanks, we are not overly reliant on the short-term market for delivery of our requirements. So that’s why we kind of use the words of optimal scale in the landbank.

If you look at the prices and margins from an investment point of view, given that we have got a strong landbank generally and in great occasions that we want to operate from, it does give us a huge amount of optionality and clearly significantly underpinned by strategic landbank as a form of land supply into our delivery process. We still continue to remain selective. We indicated last year that nudged margin subtractions during the course of 2016 and we expect that to broadly stay. And where we are at today, we are not looking to push those margins much further than they are. We think that they are about the right level, but we will continue to pursue sites that are – that we think are right for our business from a delivery point of view.

So how does that then translates and back into land prices and actual land cost on to the balance sheet, I think, that sort of percentage land cost to substantial revenue should stay broadly static, which if you recall was roughly in our landbank at sort of 16% to 17%. Clearly, there is some mix variation on that as far as you get to London and the Southeast side, essentially the land cost of the total, that we are not looking to make any massive regional shift at all, open up any regional businesses for delivery of our strategy. I we have got the business in the right place, in the right shape, in the right locations for doing what we wanting to achieve, which translate to roughly sort of 4% to 5% volume growth year-on-year, which we think is about right for our business.

Clyde Lewis

Okay Thank you so much.

Ryan Mangold

Thanks, Clyde.

Operator

Your next question comes from Glynis Johnson in Deutsche Bank.

Glynis Johnson

Hello. Good morning, everybody. Two very simple one, if I may. First one, is there any update in terms of the timing of the housing white paper, do you have any update that perhaps you can give us? And then second of all, just in terms of your strategic land, the 9,000 conversions obviously a strong number. I’m just wondering is that just a great success necessarily you gave us in terms of the risk weighted number or is it some sort of a limiting timing in there that may have an impact for 2017 strategic land conversions? Thank you.

Ryan Mangold

I think our latest understanding on the white paper is that it comes out next week. It is our latest understanding, it has moved – last year lead up to Christmas Day, they have to change the date. It’s our understanding it’s published next week, Glynis. On strategic land, the 9,000 unit promotions, there’s probably – if you go back sort of three years, four years ago, it’s probably slightly ahead of where we thought that we might be able to get out of the strategic landbank. I mean if you go back to that analyst presentation we did in 2014, we’re looking to convert roughly about 77,500 units out of our strategic pipeline.

So it is slightly stronger than we originally set our stall out three years ago. And I think that probably points to the planning process being ever since slightly better and improving, which overall for housing supply purposes has got to be good for the wider UK and the business as a whole. So, on a look forward basis, we can expect a run rate now to be at about 9,000 every year. It certainly has been there for the last two year, but we can’t necessarily promise that’s going to continue, it very much depends on the planning environment at a very local level.

Glynis Johnson

Thank you.

Ryan Mangold

Okay.

Operator

Next question is from Gregor Kuglitsch in UBS.

Gregor Kuglitsch

Morning. Two questions. Can you just maybe summarize that you actually think the right pick will stay from your perspective, what’s your feel? And then secondly, this may be linked, can you update us what’s happening on the starter home while they seem to have bit of a relic I think policy perspective what’s your – what’s your thinking on that front for this year? Thank you.

Ryan Mangold

Yeah, I mean, I can’t really comment on the content of the white paper. My general sense of sentiment with those, clearly the government is massively focused on increasing housing delivery and housing supply given the imbalance between demand and supply fundamental that had existed for such a long period of time. And as a consequence being the pragmatist, I would expect it to be supportive of the industry as opposed to unsupportive. But I am not a politician and I cannot conclude on that. I can’t say much more.

On starter homes, there have been some recent announcements of the few schemes that have actually launched with the content of starter homes. And from our perspective, provided we’ve got an understanding of the shape of what’s the planning commission is going to look like and starter homes clearly hangs off the planning commission and the planning commission hangs off the price of the underlying land itself because that influences the growth development value in the cost of execution, interior that shouldn’t have a big influence either way to us, net-net you would expect it to be a positive, but clearly the table is going to be lot in detail in terms of how this is going to evolve and also most importantly being embraced and executed at a very local level when we go for planning and all of the committees around the country.

Gregor Kuglitsch

Okay. Thank you very much.

Ryan Mangold

Okay.

Operator

[Operator Instructions] Andy Murphy from Bank of America Merrill Lynch. Please go ahead.

Andy Murphy

Good morning, Ryan. Just two now, if I may. Just interested in the Redfern review. Obviously, as Redfern required closely linked to that. I noticed in reading it, sort of Help to Buy market was – so that – distorting impacting of the Help to Buy was highlighted. Just wondering with the white paper coming up, what your current reviews are as a firm around whether that might or might not be altered or become more focus in some respect? And the second question was around cancellation, just wondering what changes you’ve seen there, considering now running at about 12% in half one and 13% for the full year sort of simplistically applies 14% in the second half, I was wondering whether that increasing in the second half was all around sort of July, August time or whether there’s been some other change that you can perhaps highlight to us. Thanks.

Ryan Mangold

Yeah, it’s a pity the author of the Redfern review is unable to speak right now, but [indiscernible] answer that question, Andy. I think that – if you kind of go back to why was Help to Buy launched? Help to Buy was launched in order to fill in massive gap in the mortgage markets where the customer could acquire a mortgage at sensible interest rates with only a 5% deposit, which was the sort of long time average where people will be able to get on to the property ladder and arguably moving the first few ranks of the property ladder. And as a consequence, it was massive fill up for our customers who had access to the 5% deposit in more – from a mortgage lending point of view and hence I think it’s been positive for all customers, in excess of 40% of our sales – profit sales are, about 44%, 45% of profit sales are and it helps to buy certainly as a solution and a policy by government in supporting the customers to be able to get on to the property ladder and move within the property ladder.

Clearly what it does do though for a sector supplying new build housing thus create an environment which has got an over dependent potentially on the government sponsored scheme. And that is what we are a little bit more righteous in the longer term unless it can be continually underwritten for a long period of time and we don’t think that seven years is the right answer to help that – that constant underwriting. But for the time being, it is a very attractive tool for customers. The government have extended this to 2021. We are not necessarily expecting to see any change against that coming out of the white paper. And over time it should be adjusted as the mortgage market returns back to normality 95% loan to value at sensible interest rates is reasonable.

I think that second point probably hangs of a little bit about bank regulation and mortgage regulation and we can’t really go there, which just came as a consequence of the financial crisis and more regulated environment for both customers and lenders. So, I’m not too sure at what kind of influence that might will have on the decisions in the future. But that’s the only real other avenue for mortgage availability to be available at 95% loan to value as the bank regulation need to offer for first time buyers which is an unlikely outcome.

Andy Murphy

Yeah, okay. And on the cancellations?

Ryan Mangold

And on the cancellation rates running a fraction higher and half and half you are right in pointing out, there’s nothing really systemic that we’ve seen in that being fraction up. We did see a relatively increasing cancellations around just after immediately post Brexit, but nothing that we could really read into the numbers would indicate any issue in the wider market.

Andy Murphy

Okay, great. Thank you very much.

Ryan Mangold

Great.

Operator

Next question is from Charlie Campbell in Liberum. Please go ahead.

Charlie Campbell

I’ve got three, if I may, please, real quite quick. I just sort of land creditors, just wondering if there is any movement in there to speak about to help us understand the cash position. Secondly, on the margin in 2016 was up sort of 50 basis points, just wondering if you could help us with the sort of underlying build cost inflation and underlying selling price inflation through 2016, just to understand that because clearly we’ve got a few mix shifts going on there. And then lastly, just obviously sort of quite topical point, given sort of press today, but just if you could remind us some of the safeguards you have place about sort of build quality and year-end completions, just I guess it was a point of interest over the last few days, if you can help us with that. Thank you.

Ryan Mangold

Sure. Hi, Charlie. On land creditors, we are expecting to end this year a fraction down on land creditors versus 2015. I think 2015 ended at about sort of just over £630 million pounds with the land creditors. We’re expecting to end in £500 million for 2016. So there is nothing really in that. In terms of driving the cash dynamic, in terms of 2016 performance versus 2015, so broadly static with the gross land value that’s staying broadly static as well. There is no significant moves overall.

On the margin, in terms of margin reconciliation about how much of that average selling price and how much of that build cost, we will give a full update to that on the February 20 with the traditional table of reconciling margin year-on-year. Clearly, there are quite a number of moving factors and [indiscernible] that’s a charge that we took in the first half of the year for remedying some previously closed sites from a build perspective and that’s taken out about 0.3%, 0.4% of the margin year-on-year. So stripping that out, we’ve made about 0.8 percentage points growth and we just need – we do need to bear that in mind.

And then on – on build quality and build delivery and build timetabling, what – as I indicated, upfront, Charlie, what we’ve done during the course of 2016 is massively focused on customer services. That’s not only the quality of the home that we’re delivering, but it’s also the actual customer journey that the customer goes on from the moment of reservation all the way to final delivery and as a consequence, we’ve added approximately two weeks to our build program and that’s somewhere between the CML and final delivery of the keys where we can go back into the homes and do what we call hand quality inspection that sits outside of sales and sits outside of production to ensure that the units that we are delivering to the customers is authentic quality that we are trying to strive for as a business.

And on the point of the customer journey, what customers get quite frustrated about – quite frustrated on is not delivering on our promises in terms of time scales of delivery. And as a consequence to that, we’ve shifted to when we are willing the business to be able to go on to market the site and only under exceptional circumstances we will be marketing from a cabin or before we’ve got to at least oversight of the [indiscernible] all the technical challenges or any of the other kind of planning challenges or site challenges can be resolved before we make that promise early to our customers before we go on sale. And that second point probably also contribute a little bit to the order book being a fraction down year-on-year because we just simply aren’t marketing before we believe that the site is ready to market to ensure that we start the customer journey in the right way and deliver homes in a far more sensible and balanced fashion. We are not in the game of rushing this at the end because that is not what we are trying to achieve as a business.

Charlie Campbell

Thanks, Ryan. It’s very clear, thank you.

Operator

[Operator Instructions] And our next question comes from Kevin Cammack in Cenkos.

Kevin Cammack

Yeah, good morning.

Ryan Mangold

Hi, Kevin.

Kevin Cammack

I’m glad to see it takes [indiscernible] Mr. Redfern to be lost of words on this occasion. I just – just really a point of clarification for me, two of them. In relation to the comments you’ve made Ryan around the sort of reclassification of what [indiscernible] outlet or at least a timing of when you will take a sale or reservation on that outlet, could you just sort of talk me through again what exactly you changed? And in relation to the decline in what you declare as outlets, what would be on the new definition – what would be the like-for-like change, would it still be down, or would it be flat? This is the first point. Second point, again, clarification point, are you effectively saying that all or frankly more than all of the £100 million decline in the forward sold position, accountable for London?

Ryan Mangold

Sure. On the question of outlets, what would have traditionally happened in the past is – not in every circumstance, but in quite a few circumstance is that we would have established some kind of cabin to sell from whilst we would be trying to get on site to break ground and put in some of the infrastructure. And then once you got that cabin open, we’d pull the trigger, let’s just say, when you can start marketing on the expectation that we will be able to deliver against that forward sales position and the promise we are making to customer at that point in time. As I said, it’s only in exceptional circumstance now we are willing to actually be selling from a cabin in advance. And so as a consequence I think that there is approximately probably 12 – 12 to 15 outlets from 2015 wouldn’t be outlets on this new way of us doing the execution from delivery bearing in mind that the definition of an outlet is somewhere where you can go and buy home from us. So it’s open for you to be able to buy a home.

So that hasn’t changed from a technical point of view. It’s just the timing as to where we are on the delivery of the infrastructure and access the outlet that is changed. So it’s probably three to four months slightly behind from where we traditionally would have done in quite a few circumstances. And in fact to that point in the customer journey, if you’re coming to one of our outlets to buy a home and we are promising to give you the keys in six months and put a huge amount of dependence on somebody else doing, for example, 278 works where something is completely out of our control, something gets stuck in the final knocking of discharging planning obligations before we could go on – physically go on site and start breaking ground, if that’s out of our control, then it is pretty hard for us to make a promise to customer when we are going to give them the key if that’s out of our control. So what we are trying to do to address that client is to make it far more in our control when we are opening outlets, when we are marketing we are far more confident hitting the timescale of delivery of those keys to what’s generally an inspirational purchase for almost all of our customers.

Kevin Cammack

What would do you say to – I mean, in a sense, is the next step not simply to say well, we won’t take the reservation until we are at slab and then there is no – almost no question the delivery can’t happen?

Ryan Mangold

Well, that’s exactly where we are at. So, we generally are only playing onto market now when the show home complex is at least at slap. So when the show home complex at slab, we’ve got the basic infrastructure into the site, which means that we’ve addressed the technical challenges of doing that. We might be able to take a little bit of a view of risk balanced weighted basis and how far, for example, offsite 278 works on roads have been progressed, but we are trying to be far, far more sophisticated upfront on sites from a delivery point of view. Far, far more sophisticated. Because on that backed with customer journey, the biggest frustration is simply not delivering the home [indiscernible]. And the second point again which is not as equally important but it’s also clearly very, very important is that the quality of the home is much better. And so to the quality point, we’ve added two more week to our build program to ensure that we get it absolutely right and it’s an independent part of our business that’s going to check the quality to make sure that that meets our requirements and our standard and the upfront in terms of opening [indiscernible] infrastructure is in place and at least the show home complex is at slab level and we also remains valid – we have had circumstances actually, [indiscernible] that are being due, where we are far, far beyond that, where we actually haven’t launched our marketing. The show home complex is being completed, we’ve got the slab for about – and this is slightly smaller site that I’m talking about, we’ve got on to slab for about 50% of the site, we still haven’t classified that it’s an outlet simply because the 278 works haven’t been discharged [indiscernible] of our control, and so we are just not willing to take that risk in that circumstance. Because we weren’t that 278 works will be addressed at the timescale that we thought [indiscernible] market scheme.

Kevin Cammack

Okay, that’s brilliant. Understood. And the London…?

Ryan Mangold

In terms of the London order book, we started 2016 approximately 75% forward sold for 2016 delivery in London. We are starting 2017 with fraction lower than that, varying demand at London, and it does about 300 homes a year in terms of the Central London business. We are fraction lower than that, but the price point that we sell at in Central London is relatively high. And so, you do the math on a high price point – on a relatively high price point against a reasonable number of units, relatively large number from an order book perspective. Overall, we have to be not concerned about the London – London market [indiscernible] activity in the fourth quarter seem to improve. Just a matter fact that interest in activity and converting it to actual reservations and then onto completion [indiscernible] opportunity for us for 2017.

Kevin Cammack

And that will be the only region in which the order book into this year is lower?

Ryan Mangold

Yeah, I mean, in terms of overall price points, regionally there are some individual regions with order book that might be slightly lower. Our targets – our target generally is to start the year about 30% forward sold for the following year’s volumes. All three regions outside of Central London or about that threshold in London and in the Southeast is much above that threshold given it’s got a slightly high waiting towards apartments, but those that are more traditionally built homes in the North and Central and Southwest, they are above that entry point start of the year and that positions us well in that sort of a technical approach that we implemented about three years ago as part of being in a very strong position ahead of a spring selling seasons where we can drive for the best value for every home sale that we make.

Kevin Cammack

Thank you very much.

Operator

Thank you. Unfortunately, we have not run out of time for questions. I will now hand over back to Mr. Ryan Mangold, please go ahead.

Ryan Mangold

Great. Thanks very much. Well, as you can see from the trading update and from the active comments, I think that the business remains well-positioned for delivery of our medium-term targets that we set out back in May as well as the strong quarter order book and strong land position allows us greater level of flexibility during the course of 2017. And I look forward to catching up with you and Pete’s catching up with you most importantly on the February 28 with the full year results announcement. Thank you very much.

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