Good morning. I'm going to say a few words, Kelly will then sort of go through all the details, and then I'll say a few more words, and then we'll have questions and answers if we may.

Look, we've had a really good first half, in fact, a record first half. Perhaps more importantly, it's the 11th consecutive record first halves if you exclude the COVID year.

Now really I want to thank all the teams of people we have in all of our businesses who've spent the last decade just making our businesses better and better, and then better again for all our stakeholders. That's what our game is all about: how can we be better?

Being better is more important than being bigger. I'm pleased we had two unscheduled profit upgrades in the first 6 months, and the key thing for us is markets that we're in, some have been good, some not so good, but it's the diverse nature of our business, which has enabled us to have a growth of 21% even with housing market being weak and because other markets have taken over.

I'm also pleased that we're increasing today the medium-term targets in two of our divisions: Fit Out and Construction. I'll hand over to Kelly.

Good morning, everybody. These first half year set of results really do continue to reinforce our consistent track record of delivering strong, profitable, cash-backed growth.

Now I'll give you a couple of key financial highlights in respect of the last 6 months, and as usual, towards the back of your own packs, you will find the more detailed financial statements. In the period, our revenues increased by 8% to £2.6 billion, and that's been followed by our operating profits increasing by 21% up to £112 million, delivering a margin of 4.4%, up 50 basis points compared to this time last year, a real testament to the high quality of earnings coming through our businesses.

Net interest income was also up to £4.6 million in the period, and that's led the way to a profit before tax of £116 million, also up 21% in the period, delivering a margin of 4.5%, also up 50 basis points in the period. Earnings per share grew by 22% as our effective tax rate continues to track in line with the UK statutory tax rate.

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

Importantly, it's consistently providing us with an incredibly strong platform to deliver our revenues in future periods to come. Our average daily net cash grew in the period by £69 million to £423 million, really underpinning our balance sheet strength, and our Fit Out, Construction, and Infrastructure businesses have continued to convert their profits to cash, some of which we are reinvesting into our Partnership businesses.

As a result, at the end of June on a rolling 12-month basis, our cash conversion was 83%, marginally higher than this time last year. On the back of these really excellent results, we today have announced a 10% increase to our interim dividend, rising to 55 pence per share.

A little bit more about the performance split by division, but in a short while I'll add a little bit more color and context. In the period, Construction, Infrastructure, and Fit Out combined collectively have delivered a significant proportion of the group's profits in the period, and there are a couple of themes that are driving that: firstly, the management of risk.

It's taken years to nurture our approach to risk management. The phasing and timing of project completions weighted to the first half, and excellent contract execution.

In our Partnership businesses, they've faced more economic headwinds, resulting in a weaker housing market, together with near-term viability challenges, which has in places impacted the timing of project starts. Despite that, Partnership Housing has still delivered a resilient performance in the first half, and for Mixed Use Partnerships, its performance, once again, has included expended investment costs to support those projects we are planning still to start on site throughout the whole of this year.

Overall, combined an operating profit of £112 million, up 21%, delivering a margin of 4.4%. Just a brief overview of our net cash movements in the period.

Firstly, the profile of these movements is very much in line with this time last year, but just a few points to draw out: an operating cash outflow in the period of £10 million, that compares to an outflow this time last year of £17 million, very much driven by the seasonal working capital movements we see with Construction, Infrastructure, and Fit Out. If you just looked at what that was on a rolling 12, it's an inflow of £202 million, very much what we would typically see at the end of the year.

The operating cash outflow in the period also includes a net cash investment in our Partnership businesses of £122 million, again, not dissimilar to what we saw last year of £127 million, reflecting this year the slower pace of sales activity. The other key notable movement aligned to our capital allocation hierarchy is the dividend payment for 2025 being the final dividend payment of £51 million.

If we take all of the movements into account, at the end of the period, we finished with a strong cash position of £418 million, £28 million up on this time last year. Now our continued focus on cash discipline has continued all throughout the period, resulting in a daily average net cash position of £423 million, up £69 million.

If we look at the highest points of the year, and it was pretty much all throughout January actually, which peaked at £599 million, and for most of January, interestingly, we were higher than what we closed at last year, which for reference was £531 million. The lowest point once again was May, and that's very typical actually, purely because of the timing of when the final dividend payment goes out, but also the VAT quarterly payment, which is a sizable payment for us every quarter.

The key point to note once again is actually the swing or the movement of the cash between those points, and actually how significant it can be of a business of our size. Stressing again the importance of not just looking at the period-end cash, but looking at the cash balance at the lowest point during that period.

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

Let's take now a little bit more of a look at each of the divisions. In Partnership Housing, despite some of the near-term economic headwinds, the division has continued to evolve and develop its long-term partnerships with the public sector.

Earlier this year, I talked about the division being appointed as preferred developer on Birmingham City Council's Druids Heath regeneration program. I'm pleased to say that in the period it has converted that into a signed development agreement.

As a reminder, this is about delivering 3,500 homes over the next couple of decades. Now that's also been followed in the period with a signed partnership development agreement with North Yorkshire Council to build out an initial 500 homes over a term of 4 years.

Now Contracting still represents two-thirds of the division's overall revenues. In the period, Contracting revenues fell by 21% to £247 million, in part due to the timing of delays as a result of the elections in the run-up and post, but also in part due to the type and mix and therefore volume of homes delivered to our partners.

More positively, on mixed-tenure activities, their revenues increased by 6% in the period to £100 million. Now despite the number of open-market completions being down in the period, the average sales price was up 11% year-on-year.

Overall, despite the revenue decline for the division of 14% to £347 million, the division delivered a resilient performance in the year, with an operating profit of £13.2 million, in line with this time last year, delivering an expanded margin of 3.8%. Its average capital employed increased in the period as we've continued to deploy our strategy around opening more sites, larger sites, as well as acknowledging the fact that we do still have a couple of schemes based in London and the capital we've invested in those schemes continues to turn slowly, although it's moving.

The visibility of our workload in this division has positively increased in the period. If we just take a look at our secured order book compared to the end of 2025, it's increased by 6% up to £2.5 billion, and for our preferred bidder work, on the same basis, that's increased by 10% to £3 billion, which collectively forms the basis of our confidence in delivering against our ambitions over the medium and long term for this division.

As we look out towards the end of 2026, when it comes to our average capital employed, the range is now between £500 million and £580 million, and that's really a function of where our existing development schemes are in terms of their various stages, the sales pace that we are seeing currently, together with our strategy around opening new sites. In Mixed Use Partnerships, the division has continued to prioritize the number of projects starting on site throughout this year whilst balancing near-term viability challenges, which in some places has impacted the timing of those starts.

I'm really pleased to say that in the first half of this year, we have successfully started five projects on site. Now just as a note, typically in this division, you would see four starts on site on average per year.

To do five in the first 6 months is a really positive milestone for us. In the second half of the year, we expect to start a further eight, and by the end of 2026, we expect to have 15 projects operationally on site.

At the end of the first half, however, this division reported a small operating loss of £1.1 million as it's continued to expend the investment costs to support importantly these starts on site this year. Its average capital employed also increased in the period, a function of the starts on site, which do require a little bit of investment, and similar to Partnership Housing, this division also has a couple of schemes in London.

The capital invested is taking its time to turn; it's turning slowly, but it's moving. At the end of June, its development secured order book stood at £4.6 billion, followed by a further £2 billion of work at preferred bidder stage where we are one of one, and it's represented today by nine sizable development schemes.

As we look out towards the end of this year, our average capital employed is expected to be in a range between £135 million and £165 million. Fit Out has, once again, delivered an outstanding market-leading performance in the period.

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

Now despite the short-term visibility that is so often associated with Fit Out, we increasingly are confident over the market fundamentals over the medium term. They remain strong.

What we are seeing increasingly more is users of office space and tenants favoring refurbish programs today over expansion, but purely because of the limited supply of new build stock. At some point in the medium term, new build stock will come onto the market, and it will present another opportunity for this division.

At the end of June, we had a secured order book of £1.3 billion, followed by £400 million of work at preferred bidder stage, and a further billion pounds of tendering opportunities at various stages. Construction delivered a significant performance in the first half as it's continued to exercise a strong disciplined approach around risk management right from the bidding selection stage right through delivery and handover, and it continues to align itself to sectors and markets that it works well and best in.

Its operating profits in the period grew materially by 47% to £24.4 million, delivering a margin of 3.3%, with 98% of its work delivered through frameworks that it's represented on nationally through two-stage tendering processes, together with directly negotiated works. The division has continued to enjoy a strong work-winning momentum.

At the end of June, its secured order book was £1.9 billion, with a further £1.3 billion at preferred bidder stage. Now Education still is the strongest sector that generates revenue for this division, but Healthcare shows increasing potential.

In the period, the division was announced as an alliance partner on the government's New Hospital Programme, which in totality as a program represents £37 billion. Finally, in Infrastructure, this division has continued in the deployment of its early planning and design activities across a number of frameworks that it's been awarded over the last few years.

Notably in the period, that relates to work we've started with ScottishPower Energy Networks and Sellafield, but importantly, we've now started to move into the delivery phase for some capital schemes on the Great Grid Partnership. Elsewhere, the division has continued with a high quality level of operational delivery across the remainder of its existing contract portfolio.

In the period, it delivered an operating profit of £18.3 million, virtually in line with this time last year, with an operating margin of 3.9%. Now it finished the period strong, with a secured order book of nearly £2 billion, followed by preferred bidder work of £600 million.

Now its entire order book and preferred bidder work consists of frameworks. If we look at those frameworks to their full length, the visible workload now totals £5.8 billion, which will support revenue delivery not only over this medium-term horizon, but into the next one, too.

Thank you. I'd like to talk about medium-term targets and outlook.

Our medium-term targets are unchanged in Partnership Housing, Mixed Use Partnerships, and Infrastructure. In Fit Out, we're increasing the medium-term target from £100-- to £100 million to £130 million, which is up from £80 million to £100 million.

Now this is because we are increasingly confident about the fundamentals of the market and our position in the market. As the market's been fairly disrupted by ISG, our biggest competitor, who went bust, but we're now seeing sort of a more normalized market going forward, which gives us confidence to lift that medium-term target.

Construction is a business that we've been improving year by year over the last 10 years, really understanding risk, really understanding what jobs we as a company are best at and just concentrating on those, and happy to increase the operating margin half a percent to-- just check I got this dead right, yes, to 3.5% to 4%, which is up half a percent. Now if we look at the medium-term outlook, Partnership Housing, we're making great progress in building the brand, winning long-term schemes, but life is a little tough at the moment with viability, and the housing market as we all know is not doing so good.

The profits there will be slightly down on last year. Mixed Use Partnerships, again, we are winning huge amounts of work.

The brand is really strong, even much stronger than it was this time last year yet again. Again, we've got headwinds with viability.

Fit Out is doing really well, and we would expect to be slightly ahead of the new medium-term target. With Construction, we'd expect the margin to be at the bottom end of the new medium-term target this year, and turnover increase to about 1.4, which is not far off our medium-term target of 1.5.

In Infrastructure, we'd expect the margin to be at the top end of the range, and turnover just under a billion. If I could sort of summarize, following two unscheduled profit upgrades, we remain confident that our full-year performance will be in line with our current expectations.

Now that strong balance sheet we have and substantial cash is absolutely fundamental to our business. The graph that Kelly showed earlier showing what our daily cash is on the daily basis, we've now been doing for over 5 years.

That is really, really helpful when we're winning contracts because we put it in front of clients. Clients, particularly in Fit Out, want to know that we got a strong balance sheet, we're going to pay our bills quicker than anybody else.

Anybody giving us long-term contracts wants to know we're going to be around for the long term and we can spend money on those contracts now, even if our return comes later. This is absolutely fundamental to us, and that graph really is a very, very powerful tool for us as a company, particularly now we've been doing it for 5 years, anybody who wants to can see what our daily cash position has been every day in the last 5 years.

Really powerful in the marketplace. Now our decentralized and empowered culture is our real differentiator.

This enables us to really attract really talented people, retain those people, and have those people making the decisions where decisions need to be made. Now we are just the opposite to an oil tanker.

Think of us as a whole load of speedboats. Those speedboats have to be well maintained, the engine has to be good, the guy looking at it has to look at all the risks involved when planting his course, he has to have his life jacket on, his flares, but more importantly, he's got to be listening to that shipping forecast and looking around the bay to see where the markets are moving, and he can then change that speedboat very quickly and move the business faster.

This is where we benefit with our culture, and that is another fundamental: it's our culture and our cash. Now the other thing that's fundamental is our organic growth strategy remains unchanged.

We have a lot to do with what we've got, just making what we've got bigger and better. I think, any questions?

Thanks. Aynsley Lammin from Investec.

Just two from me, please. Just on Fit Out, if you could just provide a bit more color in terms of kind of how that's expected to flow through to FY 2027, the trajectory there.

Have you got the organizational capability already in the business to deliver that level of profit? Do you have to invest more, grow that kind of division in it?

First question.

Maybe if I start and John you can add. Absolutely, we do have the organizational capability.

We've been growing our resources and our management teams from a very, very early stage. I think we always have a fantastic statistic we share that 75% of the management team have been with us for over a couple of decades.

This is people who have been embedded in our culture. I think what's changing particularly with Fit Out increasingly is, yes, the order book remains strong, but the visibility will always be short, but the prospects for major projects, we can see what's coming up.

We've got to win that work, but that's giving us the increasing confidence over the strength of the market fundamentals.

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

Then

just second question on Partnerships. Kind of any impact from obviously a big competitor out there and looking a bit shakier than others, any benefits or risks there?

With the new government, any expectation that this big council housing program could benefit you, or how that may impact you?

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

That I think bodes very well. If we're talking about regeneration of scale, our Partnership business, our Mixed Use business, and our Construction and Infrastructure businesses gives us an opportunity that I don't think anybody else has.

Exciting prospects. The first question, you mentioned a competitor, I don't know who you mean, but we are increasing our market share significantly.

Jonny Coubrough from Deutsche Bank. Thanks for the presentation.

Can I ask firstly on Fit Out, looking through to the medium term, do you expect your mix between major projects and your more typical work to change? Does that matter for margins?

One,

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

I think that's fair to say. I think we've all seen a shift following the completion of some rather large projects.

It will still have a permanent place within the overall portfolio in terms of major projects.

Thank you. On Partnerships, you mentioned that within Muse viability had impacted timing of starts, but you didn't say it had impacted project returns necessarily through the life.

Could you remind us what the mechanisms are to offset those viability challenges when they happen?

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

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

Thanks. Just last one would be on Infrastructure.

Thanks for the end-market split. I think you said in the past that of the £6 billion pipeline about £4 billion is energy and power, hope I've got that right.

Should we expect that should be the revenue mix, or is it just different lengths of--

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

The answer to your question is it won't be that percentage of turnover, it'll be a lower percentage.

That's right.

Thank you.

Good morning, Andrew Nussey from Peel Hunt. Again, a few questions, do each one in turn.

I guess first of all in terms of Partnership Housing, and appreciate there's a few uncertainties out there, but at the moment as you stand there, do you think this year's capital employed will be the peak level, and we should start to see it come back down in '27?

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

It's just a matter of timing.

Okay. Second question in Fit Out, you've sort of mentioned previously some caution around the smaller projects, the regional projects, particularly in terms of price competition as others try to build share.

What's your read of the situation at the moment?

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

Last question on Construction. Education is obviously the key end market.

There's obviously been speculation that they might have to wear some budget cuts to help fund other areas. Are you seeing any hesitancy from that client in terms of awarding work from frameworks?

No, but we are expecting a shift because obviously there's going to be more spending on defense. In fact, we are pricing a lot of defense work at the moment across not just Construction, but Partnership Housing and Infrastructure, we do see a shift.

We are assuming that perhaps there's going to be less money spent on things like schools, but we don't know.

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

Okay. Thank you.

Morning, it's Edward Prest from Berenberg. Two from me, please.

Firstly, in relation to Construction, you've obviously increased your margin target for the medium term. Is that reflective of your own confidence in delivering and in getting it right first time, therefore seeing margin creep up, or is there more of a broader market, actually margins on contracts being tendered, procured are increasing?

I think it's a bit of both.

Cool. Thank you.

It is as simple as that.

Yes.

Yes,

no, it is.

Secondly, Partnerships, again, another margin question. 8% EBIT margin is the medium-term target.

Bridging from where you are now up to 8%, is that from your perspective very simply a case of improving consumer confidence, increasing the private sales and therefore getting higher margins there, or is there a bit more to it, is there some more internal improvements still to come? Look,

it's a combination of a couple of factors. The revenue split today is two-thirds Contracting.

We will always need Contracting, but we will almost need to see that shift towards seeing a greater proportion come through mixed-tenure, which of course includes open-market sales, which will drive margin improvement. I think what we will start to also see is the benefit of the investment that we have put in to this division effectively achieves the economies of scale which we have yet to see.

I think it'll be a combination of a bit of operational gearing, a change in the weighting of the revenue profile to deliver the 8% target over the medium term.

Great. Thank you.

Hi, Stephen Rawlinson from Applied Value. If you look across at the housebuilders, they're talking of build cost rises of 3% to 4%, principally materials, some labor.

Could you give us your thoughts about your observation on what you're seeing in build costs, but also in and around the willingness of clients to accept uplifts to price within your contracts and whether there'll be a bigger pushback perhaps if budgets come under pressure because of other calls on government budgets in particular that we're seeing?

I think you can ask that question, it applies to not just Housing, but Construction and Infrastructure as well. Yes, because these jobs are costing more, there is a little bit of delay, either the jobs are made a bit smaller, or in fact they have to get some more funding.

I think it applies across the whole range and it does slow things down.

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

The good thing is because what we do is two-stage, we actually are not taking the risk on that inflation very often. Therefore if they've got the money, great.

If they haven't got the money, it'll go somewhere else. Look, but we don't know where the government's going to want to spend their money.

Stephen, what I would add is we have been in a hyper-inflationary environment before, albeit different circumstances, and we have always found ways to manage that. Whether we take some of that risk or whether we're able to pass it on, whether it's the supply chain, we will work with the parties that we are in relationships and partnerships with.

I think there's not one route to that answer.

Always the biggest risk for us is if a subcontractor goes bust and we've got to bring another subcontractor and it'll cost us more.

Alastair Stewart, Progressive Equity Research. A couple of questions based on two themes that popped up at the beginning: viability and management of risk.

On viability, I presume it's largely London-based-- No, no, it's across the--

Maybe I answer that one quickly first. Viability is national, and it doesn't necessarily mean that the schemes can't go ahead.

It's just a process that we're going through to unlock that funding. It will be different from scheme to scheme.

In some cases, it will mean a longer delay, but in others, it's a matter of months. It's near-term, as we see it, and it is what Mixed Use Partnerships does well.

It has a deep understanding of working with viability gaps.

That was taking me on to a supplementary question about are there any quickish fixes? Is it a case of with your construction background, you possibly have more scope for value engineering than, say, a typical housebuilder?

Given I know it's early days with the new administration, including Angela Rayner returning to housing, are you pushing more at an open door in terms of addressing some of those issues? That's the first question, risk in a second.

Look, I think the more general response to that isn't about yes, sometimes we might have to resequence or do a bit of value engineering, but it's also down to our relationships that we have with local and central government to an extent of accessing grants because ultimately all these parties share the same objective of placemaking and regeneration. It's about how can we get there, and it's Muse or Mixed Use Partnerships relationships across the piece that help us unlock it, but it takes time sometimes.

Then

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

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

Are there any other questions? Thank you very much indeed, everyone.

Thank you.