Many thanks. Good afternoon, everybody.

Thank you for joining me this afternoon. Delighted to welcome you all to the the retail presentation call, which is I always think it's wonderful to have on the same day as the actual results have been released.

If I I was just going to start with a bit of an overview. I'm sure there'll be lots of you on the call who know the business very, very well indeed.

Apologies if there's a little bit of repetition here before we get into sort of the the the main subject of of the call this afternoon. We are essentially Michelmersh Brick Holdings.

We are a premium brick and prefabricated brick manufacturer. You can see on the right to the side there our area of operations, but we've got five brick sites, four in the UK, one in Belgium.

Then we've got four prefabricated operations, most of which do actually overlap with those those brick sites. We've got ostensibly four lifetime source of revenue.

Clearly, manufacturing bricks, prefabricated bricks, landfill operations, which are are all paused for the moment, but they tend to get enacted when we've got spare space in the quarries, which at the moment we don't. Then once we've consumed the minerals in the brick manufacturing process, we then convert the land to investment land and look to sell that on and monetize the assets.

We've got about 480 acres of land. All of that land, or certainly all bar 20 acres of that land, is valued as a brick manufacturing site, land is not carried separately.

Across our portfolio, in normalized manufacturing cadence, and you'll hear me using that phrase a few times during the call today, we've got capacity for about 120 million bricks, and capacity to support offsite construction for about 3,000 houses, which is really focused around chimneys and arches that go above windows and doors, as well as brick specials. The portfolio is split about 60% wire cut and 40% soft mud.

Again, they're two phrases you'll hear me talking about through the presentation. Turning over the slide now to our commercial strategy, and another word you'll hear me talk about a lot this afternoon is the word resilience.

Our commercial strategy is very much focused around our strong core markets. Thinking of the way to think about the business is that we try and address the full spectrum of brick and pre-fabrication, which we see very much around RMI, repairs, maintenance, improvements; new build activity; commercial; urban; and specification.

Then again, in normalized conditions, we try to deliver our products broadly speaking roughly about a third, a third, a third into each of those end channels. That's really deliberate as we look to try and give ourselves the best resilience, as some of those markets can have different peaks and troughs.

We tend to really only sell through distribution, and again, that's a unique proposition in the marketplace. As a result of that, we have very deep relationships with our own customers, and really that loyalty is a has been a really key factor over the last 3 years of quite undulating conditions in our own markets.

Premium, very much the thing to think about us and our portfolio. Premium both in actual product itself, but also as we like to talk about in terms of service as well.

We focus very much on our core assets of about 180 bricks, and we have about another 120 which we term as non-core, we don't sell as much of those or as regularly seeing sales of those. Again, that 180 bricks really does allow us to to really address the fullest extent of the market as we possibly can.

The the key elements for for you all to really think think about and focus on is that we've developed this strategy to really focus on earnings progression, and the really important part for for all of you on the call, shareholder returns. Very much the strategy we've looked to deliver that on is is premium product.

We we drive that premium product through all of those addressable end markets to support as good a demand as we possibly can, keeping full diversification, and then as I say, really focusing on distribution to minimize the commercial teams by using third parties as well to support the product sales. On the right-hand side of the slide here, maintaining a strong balance sheet is really key, because we then have three areas that we look to allocate our capital capital to, which I'll talk about on the next slide.

Really the thing to think about us is earnings progression and regular returns to shareholders. The next slide, capital allocation framework, we've really tried to put a lot more clarity around this in the first time we we did this and launched this slide was in September 2024.

That was really because our strategy prior to that had really sort of developed over time, and we wanted to really give a a crystal a crystal-clear way to really think about our business. I've talked about the strength of the balance sheet, and really that's underpinned by then operational cash flow.

The way to think about that is, when we talk about adjusted EBITDA, we look to convert about 90% of that plus, over 90% of that into operational cash flow. We then really use that cash flow to reinvest in our facilities to where maintain well-invested and safe facilities for our people, and that's really focused on sustainable operations, safe operations, and efficient operations.

Then clearly very important, we are we are very, very aware how important this is, is then regular returns to shareholders. Those regular returns are very focused around free cash flow.

What we've sort of said is, dividends is is is the most important, and you can see our track record of dividend returns even during these last 3 years when our end markets have been much more challenging. Then anything above that in terms of excess cash, we would look to run buyback programs and announce those separately.

Again, I'll come on to talk about that when we get into the year that's just been in in FY '25. The really important point of today is to talk about what's happened during the year, and I'll come on to talk about the outlook looking at 2026 shortly.

The overall way to think about 2025 is it's a resilient performance, but that's performance has been impacted by the broader market conditions, a focus on operational improvements, albeit that's come with a bit of destabilization through our financial returns, but also, and as I say, most importantly really emphasizing this point, continuing to commit to our capital allocation strategy. Group revenue down about 1.7%, and again, sort of under the under the skin of that is is three areas I really want to focus on.

Broader UK market conditions have seen a sort of improvements around about 5% or 6%, and actually we broadly track those metrics in UK brick sales. What's sort of dragged that number back slightly is Floren, our Belgian operations.

The Belgian markets have been particularly difficult. We track the Belgian market by planning approvals, and they've been about 40% below where they were in 2022.

The reason we use 2022 is in both Northern Europe and in the UK, 2022 was the recent high point that everyone talks about with within the construction industry. Then the other part of that is then our prefabricated operations under our FabSpeed brand.

What we've really done this year is really focusing on trying to drive those operations through our freehold sites. We acquired some sites under leasehold terms, one of which was Whatlington, and it's Whatlington which we closed during FY '25 and then relocated those operations north into our Charnwood facility, which is just by Loughborough, if thinking back to the map on the previous slides, and then south into Michelmersh, which is our site in Hampshire.

That did create a little bit of destabilization in terms of training, bringing new employees into those sites, and then getting those operations up and running. Just moving then down into the second bullet points on the page then, our adjusted operating profit of £8.4 million, down 16.8% on the prior period.

The element here which I haven't talked about was the timing of our capital improvement works. We previously were an acquirer of assets.

The last site we acquired was in Belgium in 2019, and then shortly before that, the other asset I wanted to talk to you about was at Carlton, up by Barnsley in 2017. Those two sites were acquired really while we were running those facilities as much as we possibly could because demand was so high in our end markets.

In 2024, traversing into 2025 as well, we really had the first opportunity where we'd worked hard to put inventory on the ground so we could manage minimum interruption for our end customers. We could really then look at improving those assets.

What that meant was we opened the year with Michelmersh, Carlton, and Floren all paused for manufacturing operations, and that then had an inevitable impact on normalized rhythm. The important point, which you may not have had an opportunity to look at, but if you look at our H1 results from September and then the H2 results, if you split those two, you'll see that, as we said in in the interims in September, we expected, and and of course those of you who joined that call, we expected normal cadence to to then happen for the next 6 months, which we're very pleased to say today we have seen.

Therefore, we expect some of those margins to continue that normal cadence as we look into 2026. As a result, as you'd expect, adjusted EBITDA 12.4% and our EBITDA margin have also been below those expectations from the prior year.

Strength of the balance sheet, we are in a a modest net debt position at at £0.7 million at the at at the year-end date, and we do have our £20 million borrowing facility, which we just renewed in August. When we talk about a strong balance sheet, it's really about continuing to to see an ability to continue to deliver against our capital allocation strategy, which is importantly the next bullet which I want to talk to you about.

I I said I'd mention this earlier. Any excess cash, which we did have during the year, we said we would look to distribute back to shareholders through buybacks running alongside the dividend.

The dividend is on our cash flow financial statement later on the deck, but £4.4 million went out in in cash during the year for the interim and the full-year dividend, but also we returned £2 million through the form of buybacks. If you look over the last 3 years, thinking about my phrase of earnings progression, that's about a 7% reduction and improvement in EPS dilution over the last 3 years.

Again, really setting out and delivering against the capital allocation strategy, which we really provided that clarity on starting in 2024. Then really importantly, with what is really now a very attractive dividend yield, we're very pleased to propose a 3p per share final dividend for the year, taking it to 4.6p, which was in line with 2024.

Again, if you think about where those markets have been challenged, that was a 4.5p dividend in 2024—sorry, 4.5p dividend in 2023, 4.6p in 2024, and 4.6p again in 2025. I really hope you can see there that's demonstrating the board's confidence in our strategic ability to really operate the business even during what are very challenging end market conditions.

Turning the page, and and and some of this, I'll I'll sort of scoot over the points that I've I've mentioned in the overall highlights, but just looking at the operational highlights, you can see that low single-digit increase I talked about earlier, that was in line with our expectations. Importantly, what that means is in the UK, the market share that we grew in 2023 we've ostensibly held onto, and that's a really important part of of the narrative and the note today.

One of the huge elements that we look at in terms of a key performance indicator for us as a business is how orders are converting, and order intake is really how we monitor that. It's it's a big indicator of the attraction of our portfolio for our end customers.

Again, pleased to say that that did run even ahead of those normalized manufacturing volumes during the year. The slight caveat, which we put in the statement this morning, was that there has been more inconsistency in the call-off rate.

While you've got an order in your order book, what you don't have an absolute idealized view of is at what point that will get called off. What the call-off essentially means is when the developer, when the builder, when the merchant or stockist, when they call in and say, "I'm ready to take that delivery," that's what we really reference as a call-off.

That has become slightly more slightly uncertain, and really that's about a consumer sentiment-driven that caution that we're seeing coming through. Just just talking about the the overall sort of brick volumes as a as a UK capacity.

There is a slide later in the deck, actually, which covers this in a bit more detail. There was a double-digit increase in in UK brick production.

It's running just about just under 10% where production is running ahead of of naturalized demand as we've seen it during the year. That is something we're watching very, very closely because what that does is indicates pricing pressure, which again we have seen throughout 2025, and our expectation is that continues into 2026 without the manufacturers really responding in terms of manufacturing volumes.

I've talked about Belgium specifically, and our hope there is that we've seen a bit of improvement at the start of 2026 and we hope that continues, but that's an important market for us because Floren is such a flexible site. It's almost our most flexible site.

It can manufacture UK sizes, Continental sizes. It's also got differing widths and lengths of bricks, and we really do use it as a a real chameleon within our portfolio.

It's important for us that we really do get that back up and running in in in the sort of the volumes and performances we'd like it to. As I say, early signs, not getting back to where it was in 2022, but certainly in Q1, an improvement on where we were in 2025.

That stability in UK market conditions is again indicators, and all indicators are important to us, does still tell us that our our product is is is in demand from our own customers. The question I'm sure lots of you will have, given what we've we're sadly seeing in Iran and the Middle East at the moment, management of input costs, the big three for us really are our people, obviously; other raw materials other than clay, because we largely dig that out of the ground very near to our facility doors; but energy.

Energy, we've got hedging in and around 75% for for the year ahead. We've got 50% in in for next year.

The way we really run energy is we look to have 75% in for any 12-month period. You always have to be very careful, because if you go above sort of 80%, 90%, that does take away flexibility.

Given our end markets have remained fluctuating, we're always quite cautious at the moment ensuring that we don't have too much hedging. Clearly, that has opened us up to a little bit of risk, where last year that was a little bit of opportunity.

With regards to the operational reorganization, I've talked to you about Whatlington, but the real focus for us is, given our end markets, we're looking to really control our controllables. We want to drive as much revenue and as much profit through our freehold sites, and therefore, that really is what drove our relocation of our prefabricated operations out of Whatlington and into our own sites.

We also, very sadly actually, because the Hathern Terra Cotta brand was a they made a beautiful product, it was very niche in terms of what it contributed for the group, but we loved having it in the portfolio. Sadly, its end markets became so challenged during the last 2 years really, we had to take a very difficult decision to to close that operation.

That closure, of course, did enable us to give us give us a bit more square footage at Charnwood to be able to relocate those those prefabricated operations. As I said, we did start the year with with Carlton, Michelmersh, and Floren.

We did close Floren again in the summer. We we always run a 3-year sort of outlook with our capital program.

Maintenance is always ongoing at the site, do see capital as an enhancement activity rather than a maintenance type activity. We closed Floren again in the summer, and that sort of £5.5 million to go with the £5.6 million in 2024 really is ahead of run rate at £3 million, £3.5 million.

Our expectations are, having now done that work, that we will really return to that £3.5 million, £3 million over the the short and medium term. Again, we're delighted to have completed that work, given the timing of those assets in 2017 and 2019 when they were acquired.

Sustainability, it's it fluctuates in the media, it fluctuates in the importance, it does not fluctuate with us. We know it's important.

We know that we've got to continue our progress. We've got clear decarbonization objectives we must keep delivery against, and we continue to work very hard, and it's a real cornerstone of what we do as a business.

We are innovative. We we we innovate through our prefabricated operations.

We see whilst when we bought FabSpeed, that was a almost the worst time to buy it, but almost the best time because we saw the strategic importance of having offsite fabricated operations. We continue to innovate through our FabSpeed brand, but we've also constructed an innovation lab down at our Hampshire site.

Really that's to accelerate testing, research, development, decarbonization, raw material changes, recycled material changes, to really keep us at the forefront of innovation through how we manufacture bricks. In the middle of the slide there, compliance.

The compliance landscape for us, the business, is ever changing. The compliance that we've really got on the page here are compliance obligations which have been delivered ahead, not behind, and that's that's a really important point again here.

We don't want to be reactive with our compliance; we want to be compliant ahead of time. Really the work we've done this year with is there's an awful lot of acronyms, by the way, in the in the ESG world, ESG being one of them, but double materiality assessment is really a sort of an assessment of our own sustainability strategy and how it's delivering, and how we're monitoring our own ESG key performance indicators.

Likewise, Scope 1, 2, and 3 emissions, and and again, getting the right visibility on that ahead of time is so important for us how we make decisions around how we allocate our capital. One we're very pleased to get, albeit the circumstance of how it came through clearly hugely challenging for the construction industry, the Code for Construction Product Information was a a new code really trying to give more clarity for consumers off the back of of the Grenfell tragedy.

Whilst we never like tragedies bringing change through our through our industry, we were very pleased to get that code so that, we think it's so important to give simple guidance on our products to our to our customers. Again, that was another important milestone for us to have delivered during the year.

Then almost underpinning all of that with our sustainability sort of journey is measuring our own decarbonization progress, and we do that against our 17 17 KPI targets, which will be published in the annual report and accounts, which I'm always delighted how tight that is to our prelim announcement, so that will be going out on the 2nd of April. Your shareholders, investors don't have to wait long to to see just how important sustainability is to us as a group.

I'm going to skip through the income statement, the balance sheet, and and the cash flow statement, really because I think I've covered most of those elements. Probably the only one I I will sort of want to focus on is is the net working capital.

The operational cash flow, which is over the slide, really looking at tightly controlling inventory, really tightly working with our customers in terms of our receivables book, and then being very fair to our suppliers, all within sort of keeping a a tight control working working capital cycle really does underpin our ability to generate and operate free cash flow. Again, even even during what have been undulating and fluctuating end markets, very important for us that we've then been able to, just over the slide there, sort of turn just under 90% of our of our EBITDA into operational cash flows.

Again, that really does underpin the importance of of of the capital allocation strategy for us. You can see there actually on the slide there, I've talked about the £5.5 million going into property, plant, and equipment, but you can see as well the dividend on the page there, as well as the purchase of own shares, which was the share buyback program.

You can see that operational cash flow has really been put to work during FY '25. The really important one then, turning to market outlook, I've mentioned this already, but you can see it very starkly on the graph here on the left.

This what this graph is really saying to you is looking at dispatches versus production, and then those big gray bars are the turn in inventory. There is no surprise there that the lead-up to the budget in the United Kingdom, that change in sentiment, and I I really can't emphasize it enough, we are really in a sentiment-driven world in terms of the confidence of consumers to commit to projects, to think about projects.

You can see there the impact of production being brought on stream. My peer group have have have invested very heavily in what will be, I'm sure, very efficient facilities, but they're also very big facilities with with very high levels of output.

Given where we've oscillated at around 1.4, 1.5 billion against a normalized capacity of about 1.9, 1.95 billion, bringing new assets to market has a big impact in terms of those inventory numbers. You can see there, historic 5-year sort of average at around sort of 500 million.

By the way, even when we were at absolute peaks of just-in-time delivery, that number was about 250 million. In my view, think about inventory at about sort of 300 million at the moment.

Actually, you can see if the market does turn with a very sort of half-full positive glass, you can see that actually the supply with the the sort of the available on-hand stock, given we've still got to bring capacity back even across all of us, you can see that that there is real potential of that inventory being used up quite quickly. At the moment, we're clearly watching that very cautiously.

As you can see on that second bullet point there, as I mentioned earlier, production did run ahead of dispatches there at about 7.5%. The point I really emphasize, and and certainly Michelmersh has always emphasized, European imports are and have been an important part of the UK market.

Whenever we as a business talk about the market, we always talk about it in terms of UK plus Benelux. Really, that's Benny, Luxembourg.

They don't really have a huge a huge brick production. Think about that as a whole.

Certainly with the lower cost of utilities on the Continent, which has very well been publicized, those those exports, imports into the UK have really continued. That's really a a result of the UK continuing to favor wire cut and closing soft mud facilities.

Again, as I said earlier, we as a business think it's important that we continue to address the full spectrum of the market through continuing to run our marquee soft mud sites alongside what we we see as premium wire cut facilities as well. The actual market structure has not changed hugely, aside from the point I mentioned earlier where we've really maintained that market share.

It's been very difficult really looking through the market. We always talk about the sort of the old days of 2006, 2007 when there were 89 brick sites in the UK.

You can see on the page that's been dramatically reduced to sort of 45, 46. Over the last 3 years, there have been various oscillations between mothballed, developed, paused for manufacture, which has very much been our approach.

This is a a bit of a sort of look-through rather than an absolute state of the union given, as in today. All I can say is we're all working very hard to try to look through the market, to navigate this all, which which has not been easy.

Our flexibility of our operations has has, we've approached that quite differently in terms of pausing for manufacturing for 2 or 3 months, making sure we've got the inventory on the ground, and then trying to reopen those assets, which we've done very successfully. I think the key point here on the slide is just in that sort of middle orange box, full UK brick consumption, including 300 million of imports, 1.5 billion.

You can see just how far we are below those 2022 numbers. That pick-up has been quite slow over the last 3 years.

As you can see in the statement, I'm not expecting that to change certainly in FY '26. I I can talk an awful long time about just how supportive my end market conditions are.

All of you on the call will know and read, I'm sure every day, we're short of housing. There's a rise of single dwellers in in their households.

We've got a a north-south move in terms of population movements. The UK is still a highly attractive place for people to live, move to, have families, and and try and build careers.

All of that has manifested itself in a critical, chronic undersupply and under-construction of of housing over really what has been probably now approaching a 60-year timespan. Underneath that, I've used the word balance here.

It's a balanced mortgage availability. I think if you look back over a sort of 40, 50-year period, rates of 3.75% to sort of 5% would not be out of the norm.

Actually, if you look at the sort of last 4 or 5 years, house price house prices have have sort of actually tracked below inflation. We are seeing some steadying there, albeit that's caveated against wage inflation.

The interest rate outlook was looking like we're expecting a steady, steady, gentle decline. Clearly we've got a what we hope is a short-term shock with Iran and the Middle East conflict, we watch that clearly very closely.

I think what I would say is I I still stand by the fact that sentiment is our biggest challenge. The lack of the lack of Help to Buy, caution within the UK households in terms of decision making, there's been an awful lot of change, whether that's budget-driven through through changing government policy, whether that is outside macro factors as well.

It really is we would love to see just moments of stability to to underpin some of that sentiment and that to allow UK householders to to make sensible decisions. Inflation does remain ahead of ahead of the Bank of England target.

It seems amazing, actually, November seems a long time ago already, where the where the budget was really very targeted at aiding inflation. Look, I think medium term, and I am talking medium term here, I I do think, yeah, clearly there is an awful lot of impetus for inflation to come within Bank of England targets.

UK government itself hugely supportive of house building, whether that manifests itself through planning, whether that's purely an articulation of enthusiasm to support house builders, a big narrative around social housing, but also social housing with quality external facades as well. I think that's absolutely right, because for too long social housing has been poor quality.

Actually, the best way I think over the long term is the price differential between a premium brick and a non-premium brick is very, very small. Actually, demonstrating over the long term, a strong and attractive facade is the best way for an area to feel just simply better about itself and actually have a lower lifetime cost as well.

Hugely supportive of a government narrative when they're talking about sort of higher quality social housing. Just at the bottom there, RMI, there's a huge volume of houses which were built across the Georgian, Victorian, and Edwardian era.

They are aging. They require maintenance, but also in many circumstances, they can be extended or improved.

Our portfolio, we make no apology for it, has been focused on copying. Every town and and city used to have, and indeed village used to have their own brick sites.

For for a long time now, Michelmersh has targeted where sites have been closed, providing an excellent copy for products that no longer are in the marketplace. Really, that is hugely focused at this RMI space, which we've always seen as massively important to us as a business.

I could wax lyrical about how good brick is. I I I sort of winced slightly earlier on the call when I said "brick is best."

I'm now going to say that phrase again. It's best for lifetime cost, it's thermally efficient, it simply, in my view, looks the best.

If a good brick has been used, you'll drive past something which has been there for 100 years, 200 years, 500 years in some of the wonderful castle examples. The minimal cost of looking after that facade is, I think, a huge asset to why brick is such a good building material of choice.

Look, there are substitute products you could use, but in my view, because of many things, and I absolutely start at the top of that, which is cost for the homeowner, brick is, in my view, superior. Just pausing to really wrap up actually before I I open up to to questions.

Just summing up the outlook, and I always try and do this in two ways. Returning to some of those key points around the industry, I know there are lots of short-term macro factors, but longer term, we have a critical shortage of housing.

I don't really need to say any more than that. The government is supportive of of of really improving the volume of house building.

I I really to always emphasize this point, the government have put a sort of 300,000 target. We don't need that.

If I go back to 2022, our recent high point, that was 220,000 houses. Getting anywhere near 200,000 and above, and so the government can miss that target by sort of 30%, we would still be exceptionally busy.

Do keep those sort of statistics in mind. I've just talked about brick continuing to be the facade material of choice.

Whilst construction remains 20% below those recent highs, as I say, we know there is demand, and it's about trying to support the consumer in in in really sort of unlocking that decision making. We are watchful of broader UK production capacity, as I said, and we will respond accordingly ourselves in terms of where that capacity gets to.

Just on the bottom again, medium and long term again, the the capital intensiveness of our industry and the barriers to entry are enormous. There has been no new virgin site since the '90s.

Even my peer group who rebuild their assets, they are on sites that already had clay reserves, and they are rebuilding those existing footprints. There has been no new site for that long a period.

Should we get back to the days of 2022, which I absolutely expect us to at some point, and even going beyond that if the government is successful against its targets, you can really see we as a brick business are not going to be able to address those needs, there's there is huge opportunity for us over that longer term. For us as a business, just returning to some of the key things I opened with, order intake volumes, we have we've got good momentum, but as I said, my caution against that is the predictability of the draw down of that order book is not where it was, and I just want to be really transparent about that.

As a result of of of where we are as a as a sector with UK production, we are anticipating pricing remaining challenging, albeit we've delivered that stability because in our view, giving prices and pricing certainty to our customer base has really helped engender and support that long and deep relationship. Our view and our target this year is to maintain stable pricing and continue to work with customers in that regard.

We always do watch our our cost base, as you can see with some of the the the site closures that we we've had to act on. It's not just about energy, it's about really looking at the operational cadence of our business, responding accordingly.

Clearly energy is is the one, and you can see that I've just re-emphasized that point on the slide about the 75% point. Look, if if this continues, in my view, the the Ukraine situation, we had an absolute problem when Ukraine hit Europe and the UK in the Gazprom, which is the the Russian arm of of UK of of gas production, I'm sorry.

Europe received 20% of its gas supplies through Gazprom, through coming through the fabled Nord Stream pipelines. We aren't in that situation now.

About 2% of Russian gas is still coming into Europe, and that's really largely coming down into Hungary and some of the the sort of the more supportive states of of Russia. Most of our LNG substitution has happened, and that's been supplanted by Norway, the US, and and North Africa.

Qatar has has, of course, yes, supplied some, but really the Qatari the Qatari sort of gas is going into Asia. The problem we face really in in in regards to the spike in pricing is competition, not necessarily supply.

Now clearly LNG, the boats can turn and and go to those areas, we are hoping we do get swift resolution. As I say, the the supplies are there with regards to LNG, and more and more has come online over the last 3 years.

We ourselves are watching very, very closely, as you'd imagine, and we will look to put other levers if that continues over the longer term. Always focused on the strong balance sheet, that resilient platform that we've so harshly tested over the last 3 years.

Really it's about operational cash flow, which is, as you can see I've mentioned many, many times, we are very, very focused on ensuring we we we protect that. Just returning on those two bottom bullets on the slide there, our medium-term fundamentals are encouraging.

Look, we are constantly working incredibly hard to make sure that we are so well positioned. I'm trying to position us well for these undulating conditions to continue.

I hope your takeaway from that point is we are therefore very well positioned for when the market does recover on that trajectory of getting back towards those levels that I've talked about in 2022. Whilst we have got headwinds and they're there with us now, they are they're with us now on a day-to-day basis, you can see with the proposal of our 3p dividend that we are confident as a as a board, and I'm a representative of the board today, that we see progress continuing within this group.

Therefore, I'm delighted to to pause there and and open for questions.

A good question. Look, it's really about the points that I talked about, certainly if I compare year on year.

We started the year, and we were disappointed not to get our facilities up and running as quickly as we'd hoped. That was a big impact of H1, so that's going back to the Carlton point.

Both Floren and Michelmersh also closed, and we also had all the reorganization coming through with our prefabricated operations. I'd really put that front and center.

When we launched our capital allocation, we talked about EBITDA margin of plus 20%. Certainly if you look at H2 versus H1, you'll see those numbers starting to come through.

I think it's really about us looking to make improvements, not getting the timing absolutely right, I've got to be honest and clear on that, and that's really the biggest part because certainly in my view, trying to drive that pricing stability, looking longer term through the order book, is something we are very, very focused on. It's really been through the operational cadence more than anything else.

Yes, potentially, sadly. That's really about where we are literally today with what has been another macro uncertainty which we're now facing.

We did start the year with Michelmersh paused again. Michelmersh this time was paused to really focus on the innovation lab.

We've also done some work on the dryers there. It is one of our smaller sites, and again, we had lots of inventory on hand, we're not expecting destabilization at all in the manner I've just answered the previous question.

I think flexibility has been our strength, and look, I think I've said this a few times during the presentation, we will respond if the market stays where it is. Clearly we are faced with another major, unsettling sort of global condition, and we as a business must respond to those if they stay for longer term.

Look, I'm not expecting anything at the moment again. I want to keep everything open, and our people have been brilliant actually over the last 2 years and we've done a lot of the work ourselves, by the way.

I should have said that point earlier on. I think flexibility and adaptability are the two words that I would always use with regards to answering that question.

That's a great question. The reason I'm smiling is, if I'm going to answer it, I'd say they've announced price increases.

Sorry to be so specific on the sort of the words there, landing those price increases with customers is a very different proposition. Our view is I would much rather have stability, be clearer around stability with our customers, rather than announcing and then looking to row back on those price increases.

Look, I wish them the best of luck. I am only 6% of the market, as you can see on one of the previous slides.

I need the rest of the market to be responsible on pricing, because it's been very, very competitive. I really do exercise caution over their ability to land those prices when they actually get to customer agreement.

Yes, that's another good question. I think again earlier when I said that we try and look all ways actually in terms of addressing the full spectrum of the market, it's exactly for that question.

Any opportunities we see, we try to move on. I think the big one for us where we've got most potential is London and the Southeast.

The Gateway 2, Gateway 3 legislation, which again was very sadly as a result of the Grenfell tragedy, we see that as a real opportunity for us because we've operated, and really that's Freshfield Lane and Floren, by the way, just in terms of those two key sites that looked to address that sort of market particularly. If we can get that sort of up and running again, I think we'll be in a good condition.

I think there are pockets that we pick up in other areas. I'm in London at the moment.

There's an awful lot of scaffolding around. A lot of that is retrofit, it's glass, it's sort of, they are commercial premises.

The areas that we need unlocking, as I say, which have really been on hold, are the sort of the high rise, which you see if you leave the Paddington Basin particularly, where you see a lot of that brick construct going in that sort of 18 meters plus. That's the area that we're excited about the potential.

As I say, whilst there was a moment last year of what we hope is a one-off delay with Gateway, we are now being impacted again by some of that uncertainty with regards to the Iran conflict. We just need to try and get through some of these moments.

You can see, that ability to address the full market has underpinned that sort of market share stability, but we've got to work very hard to continue it.

That's good. I like positive questions as we look to improving markets.

I think at the moment, being really honest, you can see when I've talked about trying to expand our prefabricated operations, I would very much like to get those operations into Freshfield Lane. I'd be so excited to do that because, as you can see, that's a brilliant—I used the word gateway earlier, gateway into London, but it's poor use of words, but it's an excellent launch into London and the Southeast to have prefabricated operations on site there.

If I could have put a pin in a sort of timetable or sort of chronology, acquiring that asset in November 2022 probably would have been the worst time to have made that acquisition. Caveated that against my predecessors buying Carlton and Floren in great times.

No, I think we've got enough opportunity for us at the moment organically. We stay close to the market.

We stay close to what certainly what the Europeans are doing with regards to a lot of the family businesses, we know them very well. I think at the moment, given all of the uncertainty, we've got the right asset base for us at the moment that we can still improve.

Another very good question. There is no hard-and-fast look-through really because, as you can sort of say really in the statement and where I've talked about where we paused operations at various times in the year, if I do a general look-through, I'd probably say we're about 10% below our sort of normalized cadence of operations.

That's really as a result of, Carlton was paused for operations between November '24 and January '25, Floren was paused for Jan and Feb and then over the summer of 2025, and Michelmersh paused in January, Feb, and now it's again paused for January and February at the start of 2026. Wrapping all of that up, it's about 10%.

We've also got very strong stocks on the ground. Again, the theme, if you've joined me on previous presentations or read any of our previous materials we've released, we also do have very strong inventory on the ground.

If you take that 10% plus what is probably 20%, 25% of inventory on the ground, there is a lot there in terms of a tailwind that we could utilize. At the moment, the strong balance sheet has allowed us to invest in those inventory stocks.

Again, we've always thought that's the right thing to do, albeit viewed in the lens of could we and should we pull forward that sort of 3-year rolling program of capital enhancements that I've talked to you about. Yeah.

Okay. Thank you for the question, though.

Another good question, another excellent positive question. Thank you for asking it.

"Immediately" is almost the shortest answer I can give you. Immediately, because we've got stock on the ground, and stock on the ground gives my commercial teams absolute flexibility.

If I can take you back to the heady days of 2022 and just up to the summer of '23, having no stock, you can't then take advantage of near-term orders because what you're essentially doing is running an order book and then using your sort of manufacturing cadence to fulfill that order book. That can often mean you've got sort of 10, 11, 12-week lead times.

With stock on the ground, you can then with the phone call that comes in and says, "I need bricks tomorrow," you can say, "Of course," and deliver it. That is your very, very best price.

I can dream of going back to those days, but we're there and we're absolutely ready to do that because the stock's on the ground, we've invested in that stock, and the facilities are in good condition. They're in the right condition, given all that I've said.

Carlton, we hadn't been able to pause since '17; Floren, we hadn't been able to pause since '19. We've tactically been looking at Freshfield Lane.

I've talked to you about Michelmersh as well, and Blockleys is almost our newer site with regards to its sort of plant and equipment. That we've done all we can within our own sort of controllables.

Absolutely, immediately I could have answered that question much more shortly actually, looking back at it, finishing with the word immediately.

Good question. It really does depend on what you take as fixed.

If you think about what we're digging out of our ground, our biggest raw material is our clay. The elements of the fixed costs within that is when we do what's called a clay win.

I know it always sounds quite strange because it sort of attaches a lottery to that number using the word win. It suggests you can lose clay as well, but that's not the case.

We, depending on the site, we'd sort of do that every 6 months, sometimes further afield than that and for longer term. The first cost would be raw material.

We tend to get our other raw materials we use, you can imagine things like sand, they tend to be on a regular cadence. Then of course, we have our people on sites, as well as then our energy.

The energy point is a really key one. You've got to be careful on your fixing of those costs because you're then committed to buying that gas whether you use it or not.

Sorry, I should have said electricity as well within that regard. They are our key fixed costs.

Then of course, we have our overheads as well that reside in those sort of back-office functions. Where can we cut?

I would say where can we look to drive efficiency? You can see we've looked at, as I said earlier, very sadly closing our Hathern operations.

We've got one more lease site left, but it's a much smaller lease site than our Whatlington operation. It's in a part of the country which is good, and it makes an excellent sort of niche product.

It'll be about things that I've talked about earlier. We would look at manufacturing cadence, maybe looking at slowdowns.

Those sort of things would be the element that we would look at, as I say, all within the confines of those elements of costs which should to agree are fixed, and as I said, the key one there is really people and energy.

No, it's a good question. It's funny because whenever I'm asked this question, I always cognizant of the fact we ourselves look to export into the UK with our Floren product.

That's really soft mud, so that is our Freshfield Lane and Michelmersh sites which compete against an excellent product actually coming out of Europe. London, a lot of London has been based and used that over many years, actually.

We compete by really going back to our core basics of premium product, premium service. I can't really emphasize that premium service point enough really, because that's the biggest demarcation, if you like, that we have as our gift is that we know our end customers, we stay very close to our end customers.

We're reliable, we do what we say, we deliver when we say we'll deliver, and we make a good-quality product. Those are the sort of really key elements.

We've also got to be proud of our product. It is different.

The Freshfield Lane, the actual product itself, there's hardly anything left now that really looks like it and feels like it. Likewise, Michelmersh, with its very distinctive, absolutely gorgeous orange, if you look through the presentation, you'll see some pictures of it, very unique sort of appearance and facade.

Very proudly taking those products out to market, commercially fighting, and we are fighting, but really being proud of that sort of customer service element. As I say, that starts at the factory gate when the clay materials arrive and making a great-quality product.

Look, it's hard work. They are being very aggressive on price, but we are delighted to take them on and we'll continue to take them on.

That is a very good question. When you see where the yields going to, we as a board are clearly mindful of what shareholders are telling us, given where our share price is.

I think, if we really got to the point where this was going into its fourth, fifth year, potentially if we look into 2027, and operational cash flow despite all of that resilience over a really long period of time, I think we would have to have a hard look at the dividend at that point, because operational cash flows could come under more pressure. As I said, we had a unique window with regards to the 2 years of significant investment through our plant and equipment.

We're not expecting that to return, and equally, the buyback is almost the flexible element of our shareholder returns, which we are committed to, but as I said, at that point when we're cash positive again. Look, we watch it very, very closely, and as I say, it's really about the strength of the operational cash flows.

You can see that window is there again with the proposal for our shareholders, which the AGM window is the right window for that to be voted on. We watch it carefully, but we do believe in the fundamentals of the business.

That's a good question. The most surprising thing, I don't know.

I could answer that hugely positively, given everything that we wrote in the statement this morning. We get an absolute vault turn.

We get Help to Buy from the government. We get stability in our macro markets.

We get no more shocks. That would be my most surprising element because I think the demand is absolutely there.

The consumers want to move house, they want to improve their homes. We know there's so much pent-up demand in terms of even government-supporting social housing, we want to help build good-quality housing.

I think sadly my answer would be a very swift resolution to all of those sort of macro uncertainties, and just steady state. I think that sadly that would be my answer to that question.

Just following up from that, I really do want to emphasize the fact that we are operating this business in uncertainty, and we're operating this business with a resilient mindset. The way I've sort of answered that question is really just reminding you our expectation is uncertainty continues.

I don't know when that question came through, but I hope that I've answered that, but I'll try and give a sort of a summary again. I think it's about timescales now for the conflict.

I think we're watching this with the lens of short, medium, and long term, and therefore then have plans in place to adapt and adjust based on each of those elements whatever comes to pass. I think you'll all I'm sure watch news events and narratives unfolding as closely as I do.

It is a hard navigation in terms of looking at the interpretation of political announcements with regards to planning through this. As I said, my two words of adaptability and flexibility are really the ones again I would finish and re-emphasize.

That is a very good question. I suppose that the best way of thinking about normalized is sort of almost looking back at history.

We've talked about EBITDA margin, and we used to be at sort of 24% EBITDA margin. We always talk quite openly about that being diluted off the back of our prefabricated operations, and therefore, that new number became plus 20%.

I think what I'd say at the moment is think about the world in that sort of plus 20% world. Then, with regards to revenue, I hope I've been open and honest with regards to where we are in terms of our manufacturing cadence, and you can see that with regards to trying to match supply and demand as well with regards to, as I say, trying to sell what we're making.

I would sort of think about it in those sort of terms with regards to plus 10%, 15%, 20% in terms of revenue, and thinking about that in terms of those EBITDA margins. As I say, that is a very sort of idealized view.

What I would really point you back to is those highs in 2022. Look at what the business has tried to do in '23, '24, and '25, and even how I've talked to you about in terms of '26, in terms of looking to deliver growth in the statements and the prelim today.

That is in amongst a tremendously uncertain and changing world in those last 3 years. What I'd really try and point you to is even in those circumstances, I think we've got a strong track record of financial performance.

I can't necessarily give you those heady days. What I can give you is, as I hope, us trying to deliver that capital allocation policy as we have done over the last 3 years, given all of that uncertainty.

I love that. That's a great last bit of that last bit of that question.

There's there's nothing quite like damn lies and statistics with regards to houses or homes. That's the one I'd I'd almost point you to see first and foremost.

Always look for houses and homes as two distinctions. Whenever I'm talking about this statistic, I always talk about houses.

Homes, lots more gets gets sort of put into that categorization. I think houses is is about 130 to 140,000 houses.

By the way, the comparable number in in Belgium, I think it's around about 40, 41, 42,000. Against what I talked about in terms of '22, '23, that was about 220,000 houses.

The 200,000, what do we need to do to get back there? There's there's a myriad, really.

I think, it is it starts with the consumer. It starts with consumer confidence.

It starts with stable government policy. I think it starts with stable wage inflation and salary inflation.

I think it starts with more stable macro, just a reduction in shocks in the end markets. The one element I'd really look at is planning.

That's the one that at the end the government, I know, are working very hard on. Really getting through, I've talked to you about Gateway 2 and Gateway 3, simplifying the planning process, simplifying some of the hurdles that planners and developers have to go through, being fair and balanced on on the portion of the site which is which needs to be termed as affordable.

Certainly in London where where we are today is a big part of that. Interest rates is an interesting one in terms of the psychology.

I I think that's probably a slightly different answer for everybody depending on on on where you are age-wise. I I think I said this earlier.

Where we are at the moment, 3.75% to to 5% depending on where you are with LTVs and and and those sort of those sort of impacting factors. I think if you look at the the sort of the long-term interest rate environment, that is not unusual at those levels.

I I think if you've bought a house in the last 5 to 10 years, I think something probably in a low 3 maybe a number that you are more used to. I think there is no sort of one size fits all to that answer.

As I said, and I think I said this earlier, consumer confidence, the narrative, how we talk ourselves about ourselves as a country, how we describe ourselves politically, all of us, all of us on the call as well have got a have got a duty to try and think about talking more positively about the country, because all of that underpins all of you on the call and your enthusiasm to commit to RMI improvements, or or moving house, or committing to to to a new build, whatever whatever stage in your your housing evolution you're in. I think it's a slightly nuanced answer there, but I hope that gives you a a flare of how I'm I'm feeling about that.

It's a good it's a good question. I I think, certainly short term I've talked about capacity, I've talked about inventory.

Certainly there's enough there to to to keep us to keep us busy over a sort of 1 to 3-year timeline. Look, I think the the the offsite construction is an area that I think has got tremendous potential.

As I said, it's it's been gummed up really by lots of the planning constraints. They tend to be it does get used in lower rise as well, don't get me wrong, but it does get tends to use in high rise, it's been held up by by a lot of the Gateway 2 and 3 legislation.

I, I am I still maintain the strategic sort of rationale behind that was a was a really good strategic investment. Over and above that, I I think we're we're back into the world of of potentially thinking about additional capacity again.

If I if I take that 1 to 3 given where we are now in in 2026, that takes us out to 2029 and that's 7 years on. I think we really do need to see what is steady state in the United Kingdom, what is steady state in Northern Europe, because I I just don't think we've got that view yet.

As I say, our own sort of UK production capacity has been so fluctuating, undulating, we've all been doing so much to it. I think we've got to see what that all looks like.

I think one thing that is clear, we do not have enough current capacity in the UK should demand get back to and over and above those levels we saw in 2022 that we would be absolutely reliant on imports again, and clearly that is an opportunity.

Yes. Yes, we are.

The RMI space actually has been okay for us. I'm sorry if you'll forgive me for using those two letters together, but it's been okay for us at the start of the year.

Developer-led is very susceptible to some of that uncertainty, but again, that's been okay. Actually, there's a sort of a regional split in terms of how that's looking.

Likewise with regards to commercial specification. I think you can see that sort of market share dynamic.

You can see that we've stayed competitive. I think the only consistency we've had is that it is inconsistent.

Yes, different behaviors, they change regionally, and it does change as well through wire cut and soft mud as well with regards to how our end customers are sort of behaving. What I would say is we stay close to them, and it's a really important part of how we operate the business.

Good question, and I like that link, actually. We think we'll be back to sort of normalized levels, which we always term at about that £3 million level.

That's really the right way to think about us now, that we've sort of looked to complete and bring forward. Again, how we articulated '24 and '25 is bringing forward to sit alongside planned capital enhancements.

Normalizing as we look out into the short to medium term.

Yeah. Good question.

I think, look, we are a listed business. I hope some of you are shareholders on the call.

By virtue of the fact that we are listed on the London Stock Exchange, my view is we are always for sale. My job is to be as clear as I can with investors, with shareholders about how I see the outlook for the business.

Look, the volume of questions here, I take that as hugely encouraging that there's a great deal of interest in the business's performance and the mechanics of how it operates. Look, my job is I'm here to maximize shareholder both returns and value.

Should that be an opportunity for someone else that thinks there's a great opportunity to buy the business, that means we're attractive. In the absence of that, my job is to carry on running the business.

I've got a great team around me, a very good board, very good leadership team, and talent throughout the organization. We are here to run the business to the best of our ability and to be clear with how we see the business in the short, medium, and long term.

What is our NAV? Quite literally, it's 102.6 pence per share.

That gets derived from dividing the number of shareholders excluding treasury shares by the net asset values on the balance sheet. That's how that mechanically works.

To the previous question, you can see where the shares are trading at the moment, we are quite a significant discount to net asset value of the business.

I can see the link. That's an absolute fair conclusion to draw.

I think what I would say is that the utilization of the RCF was really about just the significance and the conflation of sort of the year, really. I would say that's much more about the capital activities, as well as, look, we were near 90% conversion of adjusted EBITDA.

Going back to the point that I sort of really said earlier, we wanted a better H1 and we expected a better H1. I would say that's really more about the timing of the operational changes we made.

Clearly had some one-off exceptional costs as well that we laid out in the business. Again, we had a pretty significant year in terms of pulling forward capital activity.

I can see the link. In the round, I'm sure part of that was a reason for it.

As I say, I think there are other reasons that were more integral to the utilization of the RCF.

No, I don't think so. I think what it screams to me is that we've got a inconsistent improvement, and I'm deliberately using the word improvement rather than recovery.

Any of you who follow the sort of 10, 11 major UK house builders will see that they all ticked up where they are with regards to their own volumes. Looking through all of them, you're probably looking at sort of 5%, 6%, 7% in terms of volume improvement.

I think a lot of that, given they're listed, given their volume, tends to utilize wire cut product. I think it's just an element of where that sort of better market conditions have been.

The sort of the regional house builders, London markets, there is still a need to build that sort of matches the local sort of vernacular in the environment of where those houses and development opportunities are being constructed. I think it's just time more than anything else.

Because look, going back to my previous point, I believe that the UK population want to live in attractive properties. I still think there's a space for it.

Whilst there absolutely is a space for wire cut facilities, and we've clearly got three of our own, I do think the market needs soft mud products as well, just because of all those points I've mentioned just now.

Yes. Just to be really clear on that answer, actually, the beauty about bricks is you can store them outside.

Anytime you drive past your local sort of Travis Perkins or Jewson's branch, you'll see bricks outside. The way to answer that question is, do we have brickyard capacity?

Look, across the group, yes, we do largely. Look, I think we're always monitoring it, and you can see there are lots of inputs into the decision making around pausing or slowing down if we need to, and one of those factors is of course our own brick storage that we've got on site.

Some are tighter sites than others. That comes back to my point, which is flexibility and adaptability.

Operational cadence is very important for us as a business, and you can see when you do destabilize that, as I hopefully have been really clear about today, the repercussions come through all lines of your sort of earnings statement. Look, we watch, we are cautious, and we respond accordingly.

Yes, we've got some space, but we do absolutely take decisions that we think are the right decisions, and we watch all of those very, very carefully over the short, medium, and long term.

Thank you very much indeed, and thank you for fielding what were an excellent array of questions. Mostly thank you for listening to me for now a very long call.

Look, I think I'd really like to leave you with the fact that we as a business are doing all we can to focus inwardly, making improvements during difficult and unpredictable end markets. We have stayed resilient.

We've stayed resilient through holding market share, working close to our customers, hold price, making the right product, investing in inventory, taking the right decisions within that regard. Look, as I said earlier, we absolutely believe that brick is best.

We've got another short-term shock with Iran, but as I said, I think the right way to think about this is that our adaptability, our flexibility has been a strength, and we've proved that over the last 3, 4 years. Whilst we do have headwinds, I hope I've been very clear about the challenges that we face.

We are very, very focused on earnings progression, and very focused on continuing to look to return value to shareholders. As I say, just finishing, thank you ever so much for your attention.

I know it's not always easy listening to one voice for so long. Thank you ever so much for your time this afternoon.