Pete Redfern - Chief Executive Ryan Mangold - Group Finance Director Jennie Daly - Land Director

Glynis Johnson - Deutsche Bank Will Jones - Redburn Gregor Kuglitsch - UBS Gavin Jago - Peel Chris Millington - Numis Andy Murphy - Bank of America/Merrill Lynch

Good morning. I’m bit more of a sort of time pressure to get started, because I’m very conscious this morning.

We’ve got three presenters, as you may have already spotted from the slides Jennie is here with us. So my main goal for today is to get through my bit quickly, so that we don’t compress our time and make you frustrated at the end.

It’s fairly normal structure apart from sorts of Jennie speaking, we originally expected Jennie to come and talk about our land position, a bit about the political environments of the half year, but with the referendum results only a few weeks before we decided that the conversation is almost inevitably going to be about current trading, so that’s why we put off until today and we plan over the course of the next sort of 12, 18, 24 months to also have have divisional chairman, because we’ve had some change through natural retirement and through Peter Truscott moving on, some change in that divisional chairman [Indiscernible] I think you’ve met all of that new divisional chairman but we’d like to give them the chance to speak here as well as Jennie today. I’m going to cover a brief overview of 2016 and some operational sort of questions and then at the end I’ll come back and talk a bit more about current trading.

And probably where I’d like to focus you know sort of my time is on sort of the medium term outlook as well as 2017 performance. But as I said, first of all 2016 sort of overview and the three -- three kind of headline medium term targets clearly improvements in all three areas during the course of 2016.

I just pull out the one that’s there at the bottom on cash conversion, wouldn’t want anybody to feel that we’ve had a target and then sort of carefully hidden it that was originally a target that we had for this year but the performance of 81% in 2016 was both ahead of our expectations and your expectations and meant that the three year target in that area that we set three years ago, we comfortably exceeded the 65% sort of cash conversion. Just picking out some operating highlights, slightly unusually the particular one on this slide I would like to pull out is the employee turnover number.

It’s not that the 2016 number stands out relative to 2015 or the last two or three years. It’s staying around 13% during the course of sort of sorts of stacked pressures that the whole industry has faced in subcontractors and in employees over the course over the last four or five years, I think is a phenomenal performance, yeah it’s through the previous cycle at this point when the pressure on people was nothing like as great as in this cycle.

We’re used to that number being more in the low 20s and I suspect if you look through that page, you’ll see levels of that, but that’s sort of level today. Just keep it in those low teens levels I think is a real testament to the work that we’ve done on people’s development on packages, not just paid, but actually how we [Indiscernible] and it’s a huge difference to the consistency that we’re able to deliver in other parts of the business.

I think the other number just be a sort of -- is the order book slightly down at the end of the year or last year but we’ll come back and talk about that when we come onto 2017 trading the $1.7 billion we finished 2016 and that was a pretty comfortable level for us, so no particular concerns. I’m not going to spend very long on this slide, because it looks back at market performance and I will come at the end and talk about 2017 and put on the column that I think is more interesting for you about trading over the last seven or eight weeks, but a pretty solid year overall, and really when you stand back and look at the year and split into half you can’t particularly say impact of the referendum and economic uncertainty, you will know we had a slightly quite summer.

I would say by the end of the year the sort of slight reduction in the statistics in sort of July and August have been more than caught up and the second half of the year overall looks very solid. Cancellation rate was slightly higher as you’ll see for the period over the last seven or eight weeks, the cancellation rate has fallen below last year, so certainly nothing there that concerns us, and certainly with outlets our outlet numbers you know sorts of remained in that kind of just under 300 level that I see slightly higher today but again something we monitor but aren’t particularly concerned about.

Probably sort of more interesting I’ll talk about London in a second and the 2016 statistics there. And just like – and this is a slide that we always have in the appendix that normally performance [ph] its presentation, but just like to highlight a couple of things from the customer segmentation.

The first is the level of investors, 7% sorry in 2015 was lower than we used to seeing, it’s being gradually falling over the last six or seven years. We paid to -- some of you will remember in the low 20s in 2006 and 2007 and we’ve seen as a longer term lower risk environment to move strong into its owner’s occupiers, but you can see in 2016 our dependence on investors was very very low.

And we continue to target and occupies -- as the key and the sort of buying group. The other piece is and if you look over these stats over the course of the last four or five years, we’ve seen a gradual but meaningful underlying growth for our business and first time buyers.

We say that’s a core part of the business to really looking for a even split between first time buyers and move up customers and you see in 2016 partly through how to buy but also just through the underlying level of interest rates that first time buyers are paying even without her [ph] effort helped by mortgage, you see a healthy growth in that first time buyer group. And I’ll say, I’ve come back to the Central London market performance [ph], I’m not particularly going to pick up the last seven or eight weeks at the end sort of on Central London so I’ll switch on that now and you can clearly see particularly actually in the first half of 2016, we saw a lower private sales rate particularly a stamp duty kicks in.

It actually recovered in the second half of the year, I mean you know we saw as we talked about during the course of the year some price movements from around 5% or 6% on average for us in those central London sites in the second half of the year, but we ended the year with what’s felt like a far more stable reverse market with prices at the level where we were generating good levels of interest. And I think and it’s the bottom bullet point on the slide which is a forward-looking measure, what the [Indiscernible] in that Central London business where we have six outlets probably seven in total over the course of the year.

What we are looking for in terms of overall sales for the completion this year is an average of 20 sales per site. So we have no sites where we are looking for high sales rise and why the business is particularly dependant on those.

So we are seeing fairly steady, stable sort of traction in that business clearly at a lower level than we’ve seen in the past but certainly not something that’s giving us concern in terms of our overall guidance for 2017 as a whole. Moving on from trading and from 2016 to areas of operational improvements and we said we will pick out in each presentation a couple of areas, first of all just and this is really just to remind you where our sort of management team sits, cause as I touched on earlier there have been some changes.

The main change in the year is that Fergus McConnell was hired at the end of 2016 which is a long time fund and Daniel McGowan who is in the room and who has been with us for many years has taken that role which you know sort of certainly hasn’t caused any surprise within the business, but you know we continue to have a very stable operating team. You are aware of the change that we made 18 months ago now to split certain business into two halves which are run by Chris Carney and Nigel Holland.

And as I said, we’ll have Daniel and Nigel and Chris come to talk to us about that businesses at different points during our presentations over the next year or two. But on some of the operating changes, we talked a lot over the last two years, I think earlier than anybody else about customer service and some of the challenges of getting really right when production in the business is under pressure, probably the toughest ploy for us was just over 12 months ago, so we failed with the changes that we made over the last two years have really started to pay dividends, all our businesses by the end of a transition of a transition for our new customer service approach, all of them are running a new home quality inspection by the end of 2016, all of them have got a restructured head of customer service.

We had a primary role on customer service before that, but we’ve upgraded it about – changing quite a lot of the people I mean changing the pace structure from where it reported and all of them have supporting customer relationship managers certainly as their customers have got an independent point of contact separate from the sales and production roles and I really do believe that we got full buying from all our staff and some improvements to go from end to end of the business. And you can see that come through the statistics, it’s a slow shift to turn because it take nine months from our first real contact with the customer to get in the statistics at the end, so it doesn’t happen overnight.

But even in the year-to-date schools which take even longer to turn, you see a step up from 86% to 87% and I think we’ll continue to see that grow. I think in the bit that concerns us the most I think is you know sort of the month-on-month movements and there you saw our low point was December 2015 84, December 2016 and December is always going to be the most treasured month in our environment, a very material movement upto 88% and that was the first month we have those new processes working in all of our business, so a really significant turnaround.

I think, if you look in to the surface, we are seeing some major benefits from those changes. You can see a measurably better standard of finish and a decrease in defects and we think there for longer term, decays cost of sorting those defects as well as a much more positive result for customers.

We are seeing that come through in our positive feedback from customers as well as in the statistics but it continues to be an ongoing process particularly to engage our subcontractors and make sure we deliver consistently a 100% of the time. On a different issue that we see as being customer service related I thought, I’d just touch on leasehold, which I think is a question that one or two have asked our competitors and we’ve had one or two questions in the background, because there’s been some consumer press coverage.

Really two areas that sort of are under question just wants to highlight, first of leasehold houses as the whole industry sells some house leasehold. That’s been true for 30 years or 40 years in the Northwest and Taylor it’s only really a northwest that we’ve ever sold leasehold houses.

We and I don’t think anybody else has taken this decision or taken this decision not to sell houses leasehold in the future, unless and this is an exceptional that we brought the sites in the first place in a freehold – on a leasehold basis tends to be if you are buying on a country state or a you know just from a local authority where there are particular reasons. We don’t see that as a big financial decision, it’s never been a particularly significant income stream for us and doesn’t change forecast, but we do see that they are more aligned to our overall approach to customer service.

We think we are giving our customers a simplier and easier better products. The other question that’s been raised is on some legacy ground rent terms and we are reviewing that quite closely.

This particular class of lease where ground rents increased more quickly than for some of the more standard leases in the market. We use some of those leases on sites that start between 2007 and 2011 and whilst the lease is clear and customers had independent legal advice we do recognize there is a more expensive product for customers and so we are reviewing that quite carefully.

Just moving onto production and our project 2020. These seasons [ph] are full and final update.

The project is not yet complete although it’s nearing its end, but I do think it was worse just giving a bit of an update on some of the sorts of conclusions that we are reaching. Not surprisingly we don’t believe this is single silver bullets to production constraints and the government political drive towards modern methods of construction is off to naive, we talked of many different methods over the long term and particularly in detail over the last 18 months and existing modular and offsite construction methods tends still to be more expensive, less flexible and they only really work as well on a few developments in suburban and certain major suburban locations and are heavily weighted towards apartments, but we do believe that there is real value over the course of the next five years in bringing more options, more choices into the way that we built.

Yeah, we are sort of very heavily weighted towards traditional double scheme [ph] construction and so we are looking at an increased use of timber frame on a more strategic basis. It tends to be a side by side business unit by business unit decision and we are looking to grow that material over the course of the next two to three years.

We are looking at further testing beyond that of what I would call beyond timber frame or enhanced timber frame with such panels, don’t think that’s going to impact significantly over the course of the next 18 months that will be some it will continue to review and we are looking an increased focus on bringing labor and skills in-house on key trades. Not across the board, and I don’t think in any trade will ever reach sort of 80% or 90% of that total requirements.

They are looking to supplement self [ph] contracts on a local basis where we are struggling to find a consistency of high quality trade I think is the right move to make over the next two to three years. And that lets us make an increased investment in training developments and new production skills it’s very hard to increase that where we are today without actually employing more people directly because we just don’t get the return on that investment.

And we’ll continue to maintain the focus that we’ve built up over the last 18 months on new methods and I suppose you know not giving up on modular and offsite construction methods because that position may change, but also actually continuing to improve and continuously improve our production methods. In a world where land is easier for us and particularly with the scale and landbank that we have, our ability to drive both flexibility cost efficiency and to deliver changing levels of production more effectively is becoming more and more important to us as we look forward.

So this is more of a strategic area of land for 2017 and 2018 but certainly an area we continue to say is very important.

Good morning. So to get started, a quick review of the land market.

In overall terms we are seeing continuing in the land market. Land pricing remains good with good quality opportunities across a range of site sizes and geographies.

And we are really seeing price pressures in the best locations. There is little disruptive behaviour in the market at the moment, although we are seeing an increase in the activity of housing associations and build and buy recent mergers and access to ready capital and this is most notable in the London and Southeast area.

In terms of the London market, more specifically, land pricing remains competitive and particularly in the subprime areas below £800 a square foot and less so in the prime areas. As a result, we are seeing increasing activity on bidders moving out into the autozones [ph] that we have previously and that’s likely to affect competition going forward.

Our specific land search criteria in London is focussed around a good quality locations and deal structures such as utilizing joint ventures in partnerships that represent good opportunities and additional growth in returns. During the last few months, the Mayor has been consulting on affordable housing and viability and guidance and this will seek to increase the overall provision of affordable housing and also introduce a existing use value approach to planning viability.

Both these factors are likely to put pressure on land prices going forward and naming that alternative use values become more attractive for vendors, particularly in certain locations. It’s also likely to drive more bidders to conditional data structures.

And moving on to the strategic land market, opportunities remain plentiful but there is increasing activity with promoters and this is particularly but not exclusively noticeable in the southeast area. Our longevity and reputation continue I think to differentiators in the market and we can consider to see a reasonable level of one-to-one deals in this part of the market.

So looking now at our U.K. land pipeline, we’ve continued to operate broadly on a replacements basis in our short term landbank.

This has allowed us to specifically maintain a measured and disciplined focus on new opportunities and focus on quality. And I think this is demonstrated by the addition of over 6000 plots and to the short term landbank with circa 26% contribution margin and circa 31% return on capital employed.

So we closed the year with a landbank of just over 76,000 plots representing a five and a half-year landbank based on U.K. completions.

As an overview, and the planning environment I think remains broadly positive and albeit the planning process can be sticky at times. And the visibility and the timing of draw time [ph] or and planning consents I think remains the most challenging elements to our teams on the ground.

But in this environment, we had a very strong performance in transferring to the short-term landbank from our strategic land pipeline of over nine and a half thousand plots. And despite the competition and the strategic land market, we added 10,800 net strategic plots to the landbank overall.

I think it’s been previously indicated in all the presentations, we did have a considered pause after the referendum vote and in land activity and this did reduce some of our overall land acquisition in the year, but not materially, and expectation is that this will drift upwards in the coming year. So looking at this slide, and we’ve drawn this together and really to help frame a response against the sort of political pressure and the continuing criticism that we’ve seen over the year on the size of landbanks and the lack of implementation of planning consents.

And the left hand graph, simply looks at our completions and the detailed planning permissions and granted in the corresponding years. And as you can see, it’s fairly variable which is to be expected.

And it can only ever be a snapshot, but over a reasonable period of time and this instance from 2008 to 2016 and it shows I think what one would expect to see from an efficient development business and efficient to development process, which is that there is a very close correlation between our output that’s the planning commissions that we implement and our and intake, that’s the planning commissions that we’ve rode on from the process. So we consume what we had rode on.

The right-hand graph looks at our sites with implementable planning commission, which by our definition means sites that have detailed planning commission where we have achieved a discharge of pre commencement conditions and where other unknown planning related regulatory consents have been achieved. And this pie-chart indicates that we have 387 sites and that represents thirty eight and a half thousand plots and what he choose is of those 387 sites which some will call shovel ready and there only 0.5% which we are not planning to start by quarter two of 2017.

[Indiscernible] sites represent 276 plots and they are – management and I am confident that we are in conversations with the local authorities within these areas those operate. So moving on and looking at capital allocation.

For the 2016 capital allocation process, we reviewed the way in which we allocate lands and WIP spend to reshape our business behaviours and this is a process that will evolve over a three-year budget I believe. Historically, land and WIP spend was business derived, sort of a predict and provide approach if you will, where the regions predicted their needs and to a greater extent grip met those requirements.

On release this approach had led to a number of regions having a disproportionate level of investment and unlocking of capital and somewhat and efficiently. So in its place, we introduced a more centrally led strategy accessing overall returns on investment, looking at the land positions within each business and also the opportunities for growth within each business.

And once our intention is always to maintain sustainable businesses in the short, medium and long term that our locations where there are opportunities and where investment is more desirable, and equally, there are those areas of our business where businesses can operate within their existing land assets much more efficiently. So there is more structured, and internally challenging approach seeks to optimize the investment opportunity and its capital efficiency was also considering the structure, capability and capacity of each business, and particularly those where we intend to extend additional investment.

And just looking at the numbers was we would tend to initiate against allocation. Overall, the capital allocation process delivered fairly well against the allocations made and we have ruled it forward for the year in 2017.

So not surprisingly, a key driver for our business going forward is return on capital employed. So hand in hand with the capital allocation process, we also increased the business focus on capital investment and that they need to work harder and increasing overall returns was maintaining margin.

So as a result, we’ve been communicating across all parts of the business, the importance of return on capital. And from a land perspective, this is meant to sharper focus on assessment and efficient processing and then showing that we have the right skills in place to deliver against those expectations along purchase process and has more focus on return on capital measures and reviews are on going through and from the process of acquisitions through to outlet opening.

In addition, we’ve been continuing to focus on capital light structures and we’ve looked at and sort of infrastructure delivery and building in Lee [ph] and one such example was at Central London and undertook with workspace and delivered back and some commercial space and leave on land payment obviously joint ventures and you’ll all be familiar with the manner and in the 2016 period our East London business also made sale through fizzy living for PRS and purposes and within their [Indiscernible] and scheme. These structures and deliver significant benefits to return on capital and they reduce market risk and generally there are non competitive to our remaining sales.

Generally what we are looking for is a balance scorecard and so accessing a project risk, but also operational risk cumatively. So whilst we are seeking better market opportunities, always a critical eye on market absorption rates and ensuring that we have the optimum product mix and range, particularly given the change in market segmentation that Pete mentioned, and that land payment and what profiles are particularly well-managed for large-scale investments and for large scale sites and infrastructure investment and of course getting on site on time.

Capital allocation process and the continued embedding of behaviours and a rolling capital efficiency, and I think are demonstrated really well in this slide, which shows that the businesses are selecting opportunities with continuing improved margins and a very pleasing improvement in return on capital employed. It’s fair to say that the uncertainty over the referendum did enable us to push a little bit harder and in some markets and I think that those are likely to be a much significant growth in margins and looking forward, but I think there ought to be some improvement in return on capital measures.

And finally from me this morning, a quick look at the Housing White Paper. And so in the minister’s own words in the morning of launch, and vision of silver bullet, it’s a social [ph] paper, certainly not radical as we may have had some concerns, but there is a definite change in tone and to that of the previous administration.

There is a new housing target and a number of initiatives to help us speed its delivery. |We finally have some clarity around starter homes, and there will be no compulsory and minimum requirement introduced and the discount repayment period has been extended to 15 years.

And both these elements I think operate to significantly reduce any concern we would have had around market distortion particularly in certain segments of the market. And the government is now consulting on a minimum affordable housing and home ownership have policy but it will be a matter of negotiation between the local authority and the developer and as to what the level of starter homes will be.

As I mentioned a raft of initiatives across the three things that I have identified here and it was I will go into all of them, I think you will be pleased to know and there’s a number of positives and I’ll draw it for example the standardized method for calculating housing need which will be introduced by April 2018. This calculation of housing need is one of the major factors in local plants and it’s a very well measure and local plants will be in place across all areas, reviewed every five years with shrewd assist and driving certainty within the strategic planned process, and increase in nationally set planning fees for reinvestment in skills and resources within planning authorities which is very welcome and that adds to that and unlocking that sticky part of the planning process and that I mentioned earlier and that local authorities would only use pre commencement conditions by agreement with applicants.

On the counter points, major developers and would lead to aggregate their build out rates and publish them and there is consultation ongoing that planning consents could be reduced from three years to two years. All-in-all my view is that the paper significantly reduces potential or the risk for a high risk [ph] for the sector and advocates a number of incremental improvements to the process.

And despite the number of consultations about green and of the white paper that are ongoing, I think that gives us some certainty in the medium term going forward. On balance, therefore a net positive paper with the benefits such as a speedier and simpler look on process and improve resources into the planning departments and to process planning applications, if introduced in concert then I think that they will outweigh any potential negatives such as the reduction of the timing of planning consents from three years to two years and all in all, none of the measures should really present major concern to [Indiscernible].

So thank you and I’ll pass over to Ryan.

All right thanks Jennie and good morning ladies and gentlemen. I am going to talk through the financial performance in the period which I have sustainable financial performance this year.

And given that it’s another very strong year of delivery by the group, four financial KPIs positive in making good progress and the business is well placed for sustainable delivery of a medium term target that we set in May of last year. If you look at the group results, the group revenue up by 17% year-on-year, this was driven by both basic quality sites, positively contributing to pricing, but it’s market pricing that we may have to capture as well as higher volumes in both our Spanish business as well as the U.K.

business. Spend a little bit of time talking about Spain and then -- the rest of the presentation on operational, financial matters, it will be on the U.K.

Spain delivered a very positive result for the year at just over £20 million worth of profitability, that’s double that of 2015 and a margin of 22% which is just a tad higher than the U.K. delivered in total.

The Spanish order book and quality of the landbank acquisitions positions at business world to continue to deliver at these kind of levels into 2017 and 2018. From a group operating profits at £764 million is up 20% year-on-year and with a more efficient debt structure resulting in a lower finance cost has made the property before tax at £733 million is up 21.5% year-on-year This has resulted in EPS also up 21.5%.

Profitability in the year offset by dividend payments has meant that the net assets value per share has grown by 6.1% year-on-year, and we are very very pleased with the progress we have made on return on capital employed by 3.6 percentage points at 30.7% which is inline with our medium term targets that we’ve set out in May. And this is driven off much more enhanced profitability of a balance sheet that hasn’t’ grown by quite the same pace.

If you look at the U.K. performance from a summary point of view, the U.K.

volume increased 4.5% year-on-year or 589 homes which is in line with the guidance that we set out during the course of 2016. Pricing up at 12.6% for the private housing, but flat for affordable housing and the private volumes delivered on better quality locations, so we benefited slightly from mix during the course of 2016 as well as capturing some market growth.

Gross profit percentage at 25.6% is up 0.4 percentage points in the year. If you recall in the first half, we booked a £10 million charge relating to some remedial costs incurred on some legacy sites that we have underlying , it means that we have grown the gross profits by about 0.7 percentage points year-on-year.

And with gross profits were plus at 65.5 thousand pounds is up 10% on 2015 and we’ll explore some of the drivers in the following slides. This is a margin reconciliation for the U.K.

housing business. It’s a slide that we have used consistently over the last few years.

And just to remind you this is an indicative an indication of where our margins have gone trying to reconcile the 0.5 percentage point growth year-on-year. We believe that we’ve captured about 3.9 percentage points in margin on pricing growth year-on-year , low cost inflation for the markets we’ve estimated as being about 3.5%.

There is no reasonable or indices [ph] that we can use to be able to benchmark that, but that’s our sense and we think that that’s impacted our margin by about 1.9 percentage points on the year. The landbank change, which is trading on for more recently acquired sites as opposed to sites acquired in 2012, 13 and 14, it would have benefited from a more significant pricing uplift given how positive the sales market was in that period.

We think that that mix has taken us a small amount of margin resulting in a net impact from the market perspective of roughly 1.2 percentage points. The increase in specification and the quality of the homes that we are delivering in 2016, we think has impacted margins ever so slightly, slight changes well on the build delivery point of view.

The point that Pete is making on the customer journey for example has been that he will committing a little bit momentum to the sites of friends which hope you will translate into some longer term gains. Affordable pricing last you saw on the previous chart was flat year-on-year.

The overall size of the affordable units is just a fraction down which is meant that it positively contributes to margins. The lower profitability from joint ventures in the year, principally driven by the timing of delivery of completions in our East London business has meant that the margins are a fractions softer year-on-year.

We are expecting the delivery for 2017 and 18 to be much better from those joint ventures and hence a slightly contribution to profitability. Overhead recovery in the U.K.

added 0.3% to margins with us being able to deliver a far greater topline from not as big a growth in overhead costs. And as I mentioned before, the £10 remedial costs we booked in the first half of the year took us about 0.3% for margin.

This resulted in the overall movement from a U.K. point of view of 0.5 percentage points.

If you look at taxation, the tax rates that we’ve got for the business largely reflects the statutory rate, which is 19% to 2020, after which it reduces to 17% from 2021 onwards. We starting paying cash tax in anger from the third quarter of 2016, so as a consequence the P&L charge on a go-forward basis will largely reflect the cash tax that we would be paying for 2017 and beyond.

The deferred tax asset, we do carry on the balance sheet is mainly as a result of the pension dips that we’ve got in the U.K. as well as a small amount of deferred tax assets we’ve recognized on in Spain on the temporary differences.

There’s approximately £70 million of unrecognized losses in Spain that we’ll bring onto the balance sheet in due course as every year evolves and the business continues to generate profitability which will soften the tax rate just a fraction, but it’s worth just noting that. From the group balance sheet perspectives, the net asset growth before the dividends in 2016 was 19.6%.

As you will the land creditors are below £600 million at the end of the year and they are down 4.8 percentage points year-on-year and we’ll continue to use land creditors on a selected basis to fund schemes, but principally to drive a better commercial return as opposed to simply make the scheme work. Just worth highlighting the land creditors does include £150 million worth of average accrual on sites, and this compares to £109 million in the previous year.

The land creditor balance £286 million is expected to be paid in 2017 and if you combine the land creditors with a net cash position at the end of the year-end, the overall hearing on an investor basis is 8.1% which the first time I think has been in single digits versus 14.9% the previous year. This further strengthens the well capitalized balance sheet despite us returning £355 million of dividends during 2016.

Jennie has spoken about the U.K. landbank in terms of the scale and the point that I am trying to draw out here is that the overall quality of the landbank has continued to improve year-on-year with the average flat [ph] cost ratio to every selling price down to 15.4% versus 16.3% in the previous year.

The approvals that we have made in the paid rents slightly higher than this at 18.7% is principally driven by the mix and the southeast focus that Jennie pointed out earlier on the capital allocation slide. The average contribution in 2016 of sites acquired since 2009, if you go back to the chart that Jennie presented in terms of the collection of dots, the average contribution margin that we delivered in 2016 was 2.5 percentage points higher than the investment thesis.

And this gives us a sort of robustness and reinforcing our belief in terms of the quality and the inherent profitability that’s inherent in the landbank. The revenue in the landbank is now upto £42 billion of which the short term landbank is upto £19 billion.

And just as a reminder in terms of the balance sheet likes, land holding, our strategic landbank despite being a significant proportion of our future potential revenues is only on the balance sheet of £195 million and the strategic land is well known, is a significant underpin for our future delivery at very attractive end margins. If you look to managing our working capital, and we look at build cost that have been occurred in the period, the build cost per square foot year-on-year is at 12.5% to £135,that remains broadly in line with the 2015 and historical trends of being roughly 54% of average selling prices.

The build cost increases are driven by a number of things, one of them clearly is build cost inflation and which we guided to being about 3% to 4% and we expect that to be consistent going into 2017. But it’s also impacted by a more significant contribution from strategic land size, which are far more infrastructure heavy.

So in terms of allocation of gross development value, lowering to land and slightly more into working progress as a consequence. The overall work in progress levels have increased year-on-year you know due to this build cost comments I have made before as well as the fact that we’ve added about two weeks to our build programs and that two weeks added to our build programs is to ensure that the quality of the homes that we are delivering is far greater and better and when our customers, we believe our customers actually want and deserve The cash spend as you can see from the chart is a fraction higher than our P&L recovery and the percentage forward build and year on year continues to increase as slightly as we prepared to have a far more structured delivery to customers on a go forward basis.

I think we’re spending just little bit of time on pensions, the accounting deficit increased to £233 million year on year has principally driven by actuarial assumptions notably they are material low at discount rates in the period as well as slightly higher inflation assumption. And this is being significantly mitigated by the hedging program that put in place during the course of 2015 and 2016, which softens the blow large amounts and the scheme is approximately 75% head – hedge both in nominal terms and real terms against interest and inflation movements.

And we continue to work very positively with the trustees both on liability management as well as asset allocation and expect returns. 2016 is the year that we got the triennial valuation and we’ll be working with the trustees on in the coming months and we expect to conclude on the funding requirements during the course of the year in the second half.

If you look at managing cash through the cycle, and we look at little bit on the P&L contribution on a plot basis and as you can see the cost per plot for land has got an marginal increase over the six year period despite of selling from much better quality locations. In 2011, the land recovery was roughly about 20%.

In 2016, at 17.8% average selling price over that period we contribute an additional 2.2 percentage points to margins. The closing own short-term landbank we spoke about before and has got an average plot cost of around about £40,000 which is significantly lower than the P&L recovery albeit at some of that underpin for some of the large strategic sites, so we’d always expect to see a slight differential between P&L charge versus balance sheet.

And accounting, the average recovery on the plot cost basis in the P&L in 2016 was £45,000 as a comparative. As noted before we got slightly higher portion of our costs is in build now as opposed in land, particularly on the infrastructure and there’s some -- clearly some cost inflation in the analysis.

Selling and expenses over the period have stayed broadly static and the cost recovery have contribute to some improvement on the period relative to revenues and my famous acronym first hitting huge amount of traction EBITLA and remains roughly about 40%. But that total actually give you what EBITLA number is and as oppose to just percentage and that was over £1.4 billion in 2016 which compared with £1.2 million in 2015.

And with the balance sheets and landbank operating at broadly optimal scale from new divestment perspective at roughly about 75,000 to 77,000 plus, great portion of our profitability that we generate in the prepared is converted to cash. Clearly there’s going to be some investment into work in process for both growth as well as some of the build cost inflation and then strategic land dynamic that I mentioned before, and taxes for 2017 onwards it’s going to be a slightly greater proportion given that we’ll be paying a full year worth of taxes.

However, the surplus cash following our strategy is increasing, which means that a great proportion of profitability generated is available for return shareholders by way of dividends. The total dividend payments for 2017 are £450 million subject to shareholder approval of the forthcoming AGM.

This consists of an ordinary dividend of the £150 million to be played equally in May and November, so £75 million in May which is 2.29 pence for share £75 million in November. The special dividends for the year is 9.2 pence which will be paid in the first week in July totalling £300 million, which means that the total dividend expected to be paid in 2017 are £450 million is up by 26.5% versus the 15.6% increase in 2016.

So in summary, we made good progress against all of our medium term targets, the operating margin remains the more challenging target that we set at and that was well communicated back in May, but that something that we are very focused on. We are very pleased with return on net operating assets and we delivered in the period, and the strength and the quality of the landbank and means of our medium term targets remain something that we are firmly focused on.

The strong financial performance, the business quality provides us with great confidence and the strong cash generation coming out of the business to support the dividends target into 2018 and beyond. And I’ll hand over to Pete to talk about current trading and strategy.

Thanks, Ryan. It’s a final stray I promise.

And I will hopefully not lay the things too much, as there is plenty of time for questions. I said we’ll come back to the slide with our state performance.

So I think that number that probably jumps out the most paper [ph] from the statements and from the presentation is that private sales rate over the last seven weeks of .91 which is 18% ahead of last year. We've not been actively driving a sales rate, that’s been materially high in the past, so that has happened naturally.

There’s no price action in that. There is no major marketing drive, and there’s no major regional difference either.

If you look at London and Southeast business it shows a material step-up on last year. We've never been of the view that the first quarter 2015 was particularly tough comparative.

We’ve seen people mentioned that both peer and the medium – in the first quarter of 2016. First quarter of 2016 was pretty normal quarter, but still that’s a very strong performance and we think it comes to very good quality demand, good mortgage availability and the fact that we believe we got an excellent portfolio sites out there that are setup well for sale, and so we think it's happening very naturally.

And as I touched on earlier, yes, this is also a very low cancellation rate in that period. But nothing really in that certainly gives us any concern.

I don’t think we should then draw major medium or long term conclusions from it. But I do think there’s a medium and long term conclusions we should talk about which will come on to.

I’ll just flash this up. And it’s sort of various stats.

We’ve given you over the course of the last couple of years showing underlying customer interest. All of them show positive performance, just flag that brochure request number isn’t quite comparative year-on-year, but overall strong and consistent demand across all of our main market.

I touched on Central London which is the only outline earlier on. And what I do think interesting and we also sent part of our mortgage lending slide, but then rate through.

I do think in the next slides are interesting, because we spend quite lot of time on it in the last few months is really looking at what we think is going to happen in the market over the next two, three, four years rather than just what’s happening right now. And you know me pretty well.

I tend to be the more cautious and of expectations and you got to be careful with that and I got to be careful with that. But actually I worried about how low interest rates are fallen because of this sustainability and you look at those January 2017 sort of numbers particularly for first-time buyers who paying some 2% interest rates, normally would give me a concern.

But we’ve really step sort of into the detail of that and got behind that. What’s been very interesting is the strength of appetites of lenders in 2017.

And particularly when you look at lack of volume in the second-hand market how much of that business they need to take from new build and actually we find it hard to constructs in the economy sort of we say ahead, which will be uncertain through the Brexit process, find it hard to construct significant increases in interest rates either at the base right level or for lenders over the course of the next two to three years. If you’d vested 12 months ago we were concerned about the end of 2016 maybe into 2017.

Actually I really think that timeline is pushed out, that's not certain, but I think I base case has moved over the course of the last six months to being a much more stable environment. That stable environment may well have quarters where demand is weaker because people are lesser certain, but the risk of a major house price decline we think it’s actually proceeded over the course of the last six months rather than grown.

And it doesn't change our underlying strategy, but it may change of tactics within that strategy. I think one of the things that underpins that is, and we've been positive about the mortgage market review and the associated controls on lending since their inception, but again when you get under the skin of them you really start to see how they’re operation now we’re instability.

The 3% stress that the people have to undergo is actually working. Affordability on a monthly basis for people is very good.

We haven’t got a comparison between rental and sort of homeownership here today, but actually that balance has continue to improve in the sense of homeownership has got – yes, sort of cheapest still over the course of the last six months, and we wouldn’t anticipated that. And when you look at it from a lender's point of view, this graph shows the average of lenders loan to income ratios and it focus particularly on the red line, it’s now -- shows a percentage of new mortgages with loan to income ratios that are greater than 4.5.

Under the test that’s not allowed to grow over 5%. You can say it’s kind of hovering around the 10% level at the moment.

There’s a bit of growth in that, but it’s a combination of that stress test and this got a limitation on individual lenders. That mean we think price rises in the market will probably stay in the low single digits now .We don't think this sort of environment we’ve seen over the last few years of 6%, 7%, 8% is coming back, but we think is a great place to be.

We've always wanted a half price inflation environment that was in the kind of between 1% and 3% and it feels like we got the dynamics but that's far more likely over the course of the next three years or so than we have seen ever before. And I think it's given is a bit more confidence about the medium-term and I'm planning for the medium term and it just shifts the focus a little bit.

So against that backdrop what our strategic priorities? It remains for steady sustainable growth for measure of quality over quantity has not changed.

About 14K just goes back to where we were May, that where we have larger size particularly the gains we’ve made on strategic land sites. Its right for those individual sites who produced slightly high levels than they have done historically and so we say our volumes going above that 14K level.

We’re not setting a new target and we’re not driving for dramatic volume growth, but actually volume growth per annum that’s in that sort of 3% to 5% range and a 5% last year maybe focus on this year we’re quite comfortable with that in this kind of environment and think we have to Landbank to achieve that. We still monitoring that cyclical risk very carefully, and as say, we tend to be more cautious and, but we think environment is slightly different from that which we’d expected.

And against that our land strategy continues to be to maintain the scale of short term landbank in the sort of 75,000 to 80,000 plot range. As Jennie said we won’t be surprise if land buying this year is slightly ahead of last year or slightly ahead of usage.

Last year we were slightly under we still don’t see a changing dramatically because we think there's huge virtue in both managing the cycle of being able to focus on the quality of each purchase, but that will exclude what we call land light holdings where we’re not taking a material sort of risk on land environment were effectively where originated [ph] from prices. And over the course of the next two or three years with that backdrop a bit more volume growth, but not driving the landbank hard to backup long, long term growth than we expect the landbank years to shorten slightly.

And the efficiency and we talk about this either last two or three years, the capital efficiency of the business to improve. The other key thing in that environment and I touched on it earlier, sort of where the land environment is easier the short-term operational performance, operational excellence and continued improvement become more okay.

So that investments in R&D, making sure that our people strategies are working that we’re retaining the high quality people that we got that help us with consistency, that we’re getting customer service and product quality right and that we start to more our product forward strongly particularly important. So finally 2017 been a great start to the year.

I don’t read too much into that, that sales rate won’t continue at that level because we won't have the production capacity to meet it, but it gives a sense of the demand and the quality of our sites, which I think is important. Without a major change in interest rates or lending we expect positive but low house price inflation for the year in the kind of 2% sort of range.

Our best case is now for more prolonged period of low house price growth, but actually reasonable stability on our kind of annual basis. The build cost pressures remain.

We’re still guiding to about 3% or 4%, so ahead of inflation but certainly at a manageable level. We’ll continue to invest and see real value improvements in the customer service and getting the build capability right and flexible and we remain disciplined on landbank scale and the dividend policy now announcement on the dividend day we’re still on the program that you understand I think for our dividends, but the value case continued disciplined growth and improving return on capital and very strong cash generation.

Can I open up for questions, please? We’ll start with Glynis and we’ll move it back.

Now, before you start with questions, Glynis, I have no problem with unlike others with three or four questions, but if you ask more than two, ask them slowly so I can run down.

I may have too with lots of little bit to touch to them. Glynis Johnson of Deutsche Bank.

The first one is in terms of margin guidance, looking at per cost of ASP what went through 2016 suggested there should be upside compared to your landbank per cost of ASP, but I notice the approval to 2016 per cost of ASP was too much higher. So I’m wondering if you can just put little bit of context in terms of future profitability given that per cost of ASP movements that we’ve seen?

Second one, in terms of strategic land your slide 18 gives us nice example of the strategic conversions you’ve taken each year, given the lumpiness what should we anticipate for 2017 in terms of what might be seen converted through. And perhaps even 2018 if we could be step out.

And then lastly, surplus cash, it’s a nebulous phrase that we throw around regularly. You talked about surplus cash increasing yet your dividend indication for 2018, the implication is that you’re not going to be returning any more cash, how do I tie those two bits together?

Okay. If I take the margin guidance and probably this surplus cash and then Jennie if you can take this strategic land in the middle and Ryan you may going to add some like on the surplus cash and dividend as well.

So, on the margin guidance, don’t place too much sort of direct correlation between land cost and the margin. Clearly, directionally the two were connected, but as the strategic land number and the north/south mix changes they can’t be quite volatile, so clearly if the plot cost is falling overtime than the margin should be going out.

But neither place too much concern and the fact that it’s slightly higher in 2016 if you look over the course for the last three or four years that’s been consistently the case. And as Jennie touched I think there’s certain mix – I’m sorry, as Ryan touched on the certain mix, slightly greater in that, sort of you have to – there are so many small moving parts within the margin guidance as we start sort of plateau off, I think taking one of them and that must give 1.5% movement just is putting too much store in one number.

I think our margin guidance is best focused on our 22% operating margin target over the three years. And we’re of the same view that we were when we announced in May last year.

That it’s a sensible target for us to go for, but it's not easy and it spends a bit on the environment and we have to grind out the improvements. We have a slight headwind from Central London against what we were in May and do not size on other things, so that’s our headwind is probably order of magnitude sort of .6 to .75 just goes in the price movements since Central London since May, and sort of at the group level impact.

I think without that we would be standing here today guiding you toward that sort of number, it’s a bit tough to do that. It still achievable but we’ve got make sure that we capture any upsided market don’t have any sort of slippage on cost sides, it’s in our grasp but it’s not easy.

Jennie, do you want to pick up a strategic land question, and question is really on can we give guidance on the sort of level of 2017 and 2018 strategic land conversions against 2016 target.

Yes. I think for 2017 it’s lot bit easier, and the 2016 performance was particularly strong and we have a number of strategic land sites of scale that are in the planning system at the moment.

I mentioned earlier that the process is sticky and the thing that we have most difficulty with this the timing of the draw down rather than the acceptability of the principal in itself. And I would expect some easing off of the 2016 numbers in 2017.

2018 is more difficult for us to see and I don’t expect that potentially to drop a little bit again, but with and each of the future beyond that if those provisions in the Housing White Paper and do come in concert and we see its speeding through the local plan process. Our teams are very active in site allocation promotion through the local plan and I’d expect to see that coming out 2018 fairly strong.

And going back to the dividend question, as we’ve said before we’ll announce the 2018 dividend for July and July 2017 and nothing is changed about that. I just pick two sort of bit [ph] from what was in your question.

We haven’t given guidance for 2018. We have given a three-year target which people have not – and reasonably you have sort of taken this guidance, but we are obviously probably won’t want to come in underneath that, sort of that’s a choice to take latter in the year when we see how the next few months goes.

But I would go back and I think this is most important thing. Yes, we don’t intent to stay with surplus cash on the balance sheet structure in the medium term.

We’re not particularly focused on what it is on any particular sort of period end, but we’re not expecting to see that build-up and -- that doesn’t fit with the strategy that we have. So, if we see long-term or medium term sustainable addition levels of cash then dividends will go up.

If we don’t than they won’t.

Yes. If you look around net cash or debt holding for 2016, it was just marginally net debt and to the point of these makings that we’ve done over a period of time plan to hold substantial quantum of cash for month or the period end at this more substantial quantum of cash given the phasing of completion to be more second half weighted, but on average we’d expect to run probably zero through the course of the year over a period of time.

So, we should assess surplus cash as the cash – the net cash average over the year is a surplus cash that on an average you’d like to run at a zero level through the year?

Now, I think you should look two to three year view where cash is not expected to be building significantly, yes.

That’s the point.

We’ll just hand it to Will and then we’ll move backward.

Yes. Thanks.

Will Jones of Redburn. One if I could please.

First is just on the land buying date you gave around intake margins, I think in the statement it also 6000 open market plus, it’s about 26% contribution margin is pretty much the same figure I think is the all in land buying, so you should be uncertain that, but for the year, also the open market strategic were pretty much the same. And I think within that, I think Hart [ph] has also talked about open market at 24 and therefore if it’s just 26 the full year.

Was it 28 in the second half or how much is getting to in terms of the numbers there. And then second one just generally around Central London with land buying, you -- limited competition a day, prices don’t stabilize in the last six months and added competition announced London.

To what extent do you thinking that now is a time to start waking and look again opportunities back in the more primary and potentially? And then last one just around cash conversion, the 81% ratio last year, when you think about the demand on the business this year particularly around London, would you be thinking of a similar ratio or could be high potentially?

Thanks.

Just picking out the second question sort of 24 in the first half, 28 in the second, I think yes, you know it sort of mathematically its correct. The second half of the year was definitely stronger.

I won’t sort of then say, that’s the normal as Jennie touched on it was particularly sort of purple-batch [ph] and we were particular cautious as well, so I never took when you’re cautiously you pick out the smaller number of the high sort of value opportunities. And I think on sort of strategy land and short-term land.

the margins, the acquisitions are closer than they’ve been historically, but there’s still a gap and sort of more periods they are closer still that’s probably also slightly distorting but they are closer as the ordinary short term margins of increase, but what we still find is that as we then deliver on those sites, the strategic sites do better because the competition is less and the plots that we got tend to be exactly what we want, so we still get the uplift from that. And on Central London, we’re still looking.

We haven’t bought the sites giving this sort of Prime Central London business in the last two years, I think it’s just over two years, and we’re still looking, but I don't think as a high likelihood we will do no normal land acquisitions and that prime central London business over the course of the next six or eight months, because I don’t think the land environment is yet come in live with the balance on market risk and return. I wouldn't rule out answers if we can, you know sorts of land light tight deals where actually it’s more of a joint venture where we’re using our skill base and taking less of a land risk because there is more opportunity to do that, and we've always been in review that our Central London Landbank is shorter than we will choose it today, but the only way to sensibly grow with the right balance with risk and reward is through those kind of they will structures, we’re not into putting hundreds of millions into a small number of sites in that environment, it just didn’t see our overall strategy, so it’s an opportunity to do those sorts of deal in Central London and grow it strategic present without taking people on risk, then we’ll take, but that may come up, but they tend to be very localize, so there might be two or there might be zero in that slide.

So any you just touch on those land questions.

No. I think I would agree certainly on Central London, I mean, the teams are engaged and considering opportunities on a specific basis and there is land light structure have exactly been leading a number of the activities that they’ve had over the last few months.

From a margin point of view I think I would be just reiterate and post Brexit and there was an opportunity in the market to drive margin on this, as Pete mentioned we were very selective besides that we drood on, our ability to maintain that is always going to be reflection of the competition.

And Ryan do you want to take on cash conversion.

And on cash conversion I mean it was a pleasingly strong year for us into the 80s and is that a benchmark on a go forward basis, I think that’s going to be logic predicated on maybe there for work in progress and maybe there with land. I’m not expecting to necessarily enhancement on that, but exactly we should be somewhere in that range 65% to 80% is broad way what we set for the moment.

Pass the microphone backward.

Gregor Kuglitsch from UBS. I got three questions.

Just kind of follow-up on margin, I think your 22 percentage average of a three years and obviously you’ve done little bit of under 21, mathematically you should be at some point running at 23, so I just want to be clear what you’re saying is it challenging to reach 22 or the 23 maybe I’m studying here. Same question is on ASP, can you give us any indication if anything left on makes or whether you’re seeing sort of things have plateued now?

And then finally and this is a small point, now the Spain back to sort of reasonable return, is it the time to sort of move on and then sell it.

Is it time to move on from Spain?

Right. Okay.

On the margin, yes, it is the averaging sort of makes it difficult, we said it was for target, we felt slightly different to sort of 23% in the third year and we understand how the math works, it not makes it tough, so sort of if we’re going to hit 22% as an average then we will be into 22% this year and still seeing growth. I still see as target we should go for, but its slightly ahead of where our guidance is, but given all the previous targets that we said, we’ve hit in the first year or a three year periods, I’m not feeling still uncomfortable with this two of them that where either hit or on target for this long tie, that was like a right balance and you need some tension within the business driving for that and I’m not going throw itself of a bridge if we don’t quite get there as long as we doing the right things.

In terms of mix as we said before it’s always going to be a reducing sort of balance in each year's it’s been a bit more than we expected. I think if you look at 2017 we see probably a little bit 2% that year or next 2018 sort of tactical [ph], because it’s sort of the way that we look at the numbers in detail which plus come through, that potential up to the same sort of level and then I would be assuming sort of flatten off from there, so that more but not sort of numbers that we’ve seen over the last three or four years.

And with Spain, I don’t think anything has changed, it is a better environment, but it still not an environment where you see, you know sorts of meaningful new capital will come in and so our business continues to trade well, but we’re still of the view that if there was the right offer for the business then it’s not a long term strategy to bench line. I just want to pass that along the line and we’ll keep looking back.

Good morning. It’s Gavin Jago from Peel.

Just a couple from me please. First one is for you Pete, it’s still commence around bringing some labor in house.

I just wonder if you can give us a feel for kind of what you’ve kind of got in house at the moment where do you think that you go to and whether there’s e regional differences, is there from a north east side across the monitory answer to expenses? And second it’s probably for Jennie, just around the strategic land and now when you’re kind of quoting the number of plots strategy; it’s kind of on a percentage of pro-relative getting through planning.

If you hold much in terms of pure freehold land and does that contribute each year I just wondering how that sort of moving through and support your margins going forward?

Okay. With labour in-house we have something in the order of 1200 paid employees at the moment who are yet pretty mature site based that as you can imagine it’s pretty heavily, geographically focused in the Midlands and New York, there’s been more traditional dynamic for a long period of time.

We have a couple of prototypes going on at site level where we’re testing in all the markets had to do that, doing it probably we think is our long term thing going out and stealing sort of under people firm. Your sub contracts, the local basis doesn’t really change anything strategically, so it a mix of findings some key individuals and then investing behind it, so it’s a five-year plus game, but actually over time could be seen in certain trades in-house labor going up to a 30% or 40% of sort of overall with all results space that we need yes definitely but that's a longer term, extra balance.

Jennie.

Yes. In terms of the strategy land, we hold about 25% of our strategic land plots as freehold.

And I think as Ryan mentioned in his slide deck we’re kind of fairly light 195 million, the expectation always and the freehold land will margin enhancing. And in terms of the timing, it really is on a sort of project by project basis, and we have a fairly active position management position on our freehold position.

Gavin, you can pass that along and then we’ll go back to [Indiscernible].

Good morning, Chris Millington of Numis. I also got free here.

I just want to search on firstly just a follow on from Gavin’s there about the freehold strategy London and just how much its contributing to the P&L now and when that once grown going proposition going forward. The second one I’ve got really is just any thoughts about how this is as wise expansion and at what point would see that we have to slowdown investment if there wasn’t uncertainty beyond 2021.

And then the final one of course this really on the legacy ground rent sales and just really how big a potential issue could this be?

Do you take that on land question and I’ll then pick up the other two.

Yes. I really don’t have the granular detail around some of the freehold margins and that represents the landbank, but I would consider them to be sort of broadly consistent.

Yes. Sorry, just rephrase the freehold question is really about how much those contributing to the P&L at the moment.

Is it disproportionate to this 25% in the landbank, because it is broadly so, just wanted to see growing balance.

I think it would be more than consistent benefit to kind of, Chris, and the freehold strategic land is significantly higher margin and an option land given effect that ratio works the point of acquisition if you are in the freehold than you get all the uplift, it’s an auction and some of that uplift goes to existing landholder, but its relative percentage, I think it’s e probably at a fairly consistent level in terms churn rate of strategic land through the P&L. So it’s marginally enhancing but it sort of really consistent level.

Yes. And if its new to control…

It’s not changing. On the helped by extension, I think what we pick up from government a lot of support and almost an expectance they have twice part of the market for the foreseeable future, I think there was no serious conversation that I picked up through the while paper process about changes it.

I think and I think this is helpful and its bit likely the mortgage market review in terms of managing risk. You know there’s a sense of starting to think about how you would taper it off, but it’s how you would taper it off.

And I think and this is sort of reading between the lines. I think but with a acceptance that it’s probably going to their long, long term in a form and you know I'm sort of always been concerned about this long-term aspects and I think actually if they taper it down but then have it their long term, that’s probably be a little, but with compromise.

So, I think that the market risk that is removed or meaningfully reduce over the course of the next three, four years before the program sort of announcement date is pretty low and then beyond on that there’s probably a greater acceptance that this has to be a sensible longer-term exit route. And against that backdrop some kind of extension is therefore likely, but I would not be surprised or unhappy if that extension came with.

We’re extending it but we’re slightly reducing it, so it impacting sort of on 2021 onwards. And on lease out, we not lot to add from what was on the site, I mean, sort of go forward position doesn't concern is particularly.

I think we’re looking at those next releases and we’ll give you better update when we kind of gone through the review that we’re doing at the moment.

[Indiscernible] from Canaccord. Just looking at the forward sold position, I think 50% forward sold for completion this year, sales rates obviously very high.

Just wondered how tempted you are and how much scope there is to push price in a bit harder or you happy with that kind of big order book, the balance there? And then secondly, I'm just thinking about the landbank, in terms of the years, short term landbank, you said that naturally will reduces completions obviously increased.

Just given the favorable kind of content you express in the white paper on plan, I just wondered if you can structure you could actually operate with the maybe a full year landbank quality structurally lower, any opportunity or scope there? Thanks.

I think, I mean, sort of taking the 50% forward sold, it’s always the balance between sales rates and price. We haven’t been giving up price to get sales rates that we got, but clearly it opposes in a strong position and there are two things you can do that strong position.

You either move price bit more later in the year or you protect yourself if we had softer patch and the second of the quarter. So that clearly will be our strategy.

I think the one thing I would say as they goes back to those mortgage comments we’re not seeing and this is both positive and negative. We’re not saying anything like as tighter relationship between sales rates and prices.

We are used to over the longer term. So, customers are getting good affordability on a monthly basis, but I can’t stretch that much further from our mortgage lending point of view and so its way we think so prices would be somewhat hidebound by that.

But at the same time, the level of demand, and the number of people are able to get a mortgage in and afforded is very good. So that both underpins assets of stable growth and more stable market, but it also means it’s not much process [ph], doesn’t mean this non, because across of any environment if you got the right sites and the right strategy you can squeeze out a bit more, but it doesn’t mean that the moves are probably not as great and the risks aren’t just great as they’ve been historically.

So on landbank is I think that is what we’re saying. In this environment we don’t need to hold, and it’s a balance, we still view having a long landbank having a lot of strategic land, thus being a huge asset and the choices will come from that, just if the land environment is easier to balance between balance sheet deficiency and the length of the landbank shift slightly.

I don't think he gets as lows four years. I mean, we have state you towards five and a quarter is sort of what we saw is the optimum balance between the length of landbank and the sort of efficiency that gave us and the choices that gave us outside starting here today that’s a bit low, but it’s not as low as thought.

But it just means as more capital efficiency to come and a bit more growth to come off the same asset base. But I still see as in that environment staying at a longer landbank and the capacity base, and there’s an element of once you have that and the choices that gives you also great that actually giving you, it does not feel strategically right, because environment where it feels like it set for a while but it would necessarily be here through under the cycle in the future and history is tended to say it’s the key thing to maintain control, so you have choice.

So it not a change of strategy but it is a flex on the numbers and I don't think it is a short term flex otherwise you won’t be rising it. Just passing in the right.

All the questions seem to be from this portion.

Good morning. Andy Murphy from Bank of America/Merrill Lynch.

Just two questions. I wondered you paste this, obviously you taken the few things in the house in terms of production facilities, I just wondering what you view was on that and whether you are tempted to go down their route at all.

And just secondly on sort of the advance build service had recently what pressure that puts on your planning department. What is it main that you end that with sort of an easier second half or easier period of a next 12 months?

I mean just picking up the second one. We couldn't increase build in a properly managed and cost-effective way to match the sales rate at the moment.

So by definition that will start to reduce as we go certainly into the second half and probably into the second quarter even in a strong environment. So, it doesn't particularly put pressure on our sort of on our planning departments through our production departments in that way, but what it does do is give us good choices.

If you’re slightly tied, if you’re aiming for .7 sales right now is exactly where you are you always have some plots on some sites and some size that are lacking in that. So it means that it is actually all of our sites are in good place and gives you good choices.

It gives you the ability as we touched to manage price. So it's a very important to have, but you should absolutely not extrapolated to the volume growth over the course of the year.

I mean, in terms of in house production I think someone some. We know what we’re good at and actually the product component part of that cost base are not material enough for us to fill the day, adds an awful lot of strategic value, to stretch massively sort of into vertical integration.

There are some areas and if we go down a material, timber frame for instance we’re actually -- there is not a huge amount of cost relative to those scale of business but enough of an interaction within that process and how we build an delivery schedules and the like, so that potentially tell we have the benefit. But those manufacturing the individual components feel like we’re trying to stretch our skill base to somewhere it shouldn’t go.

So it would be very, very targeted if we did it and it would have to be things that we felt were really going to make a meaningful long-term impact on the business. I mean, we had a timber frame business in-house such as that we shot about three or four years ago which was – and I’ll tell would drove business compressed to that we shot at knowing, but it's quite possible we come back to timber frame because we were running about 5% of its customer base because it wasn't set up in the right way.

So, if we went down that we have to stay very targeted on supplying, the core of what we do and very connected into a our long-term production strategy rather than just a short term cost base.

Thank you.

Thank you. It looks we’ve covered all the questions.

Thank you very much. Hopefully I'm having Jennie here, who will give you a bit more depth from the political environment.

Thanks very much for the time today.