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Olivia Garfield: Good morning, and welcome to the Severn Trent Results Presentation Half Year Q&A session. We've got myself, Helen and the entire senior team here. And of course, the new Chief Executive of Severn Trent, James Jesic, is also with us. And obviously, this is my final results presentation. So we'll be trying to get lots of questions on the business topics and on the results. We're pleased with our performance over the last 6 months, and we look forward to taking questions on them. So Sarah, over to you first. Sarah Lester: Good morning. Well, we knew the day would come Liv. To simply say thank you feels way too small given everything you've done. But until I think of something better, I'll just leave it with thank you. James, a much deserving successor, super thrilled, super excited for you for the team and for everything that lies ahead. But I guess it is on with the show. So a couple of questions from me, please, on the results today. Firstly, on that ODI guidance upgrade, I mean, you could have waited until deeper into winter to upgrade, but you didn't. Wondering what gives you conviction to upgrade that guidance today? Then a cheeky half question, please, on the AMP8 total ODI guide. Do we get to increase that by GBP 15 million today, too? I suspect the answer is no on that. And then the final one, please, and while we're on the outperformance topic, about parking ODIs, wondering what other tools are in the Severn Trent toolkit that can contribute to sustained strong total outperformance in the next few years. And I promise I'm not asking numbers, just more initiatives and areas of opportunity. Olivia Garfield: Brilliant. Okay. So first of all, thank you very much. There are 11,000 Severn Trent's that work their stocks off every day to land out performance, and they will be really pleased that we started strongly. So let's go for the half question first. We're not giving you more of an upgrade than the at least GBP 300 million. So it is a strong first 6 months, and we still got 4.5 years to go, but we will keep that under review, and we'll share more news at the right point in time. In terms of why we're so confident, I'm going to answer that. But I mean, fundamentally, you'll have seen -- we're saying 3 things. The first thing we're saying is that about 90% of measures are green, and that means we're doing very well across the entire basket of ODIs, and that's what gives us confidence because you will always have some ups and downs over the winter period, as you said. The second thing is quite a lot of measures, they do close off at the calendar year-end. So there are, remember, a number of measures where we're actually 10.5 months through the performance and that gives us a chance to give some indication of those. So that's also helpful. Pollution, spills are good examples there, where they're almost complete for the year, which helps us give clearer guidance now at this stage and maybe later in the year. And the third thing is that we're just really getting into our mojo operationally. It's a brand-new 5-year period. We felt confident that now that the measures were against the sector, they're like-for-like, against everybody else, we always saw that our overwhelming strong performance would come through, and that's beginning to come through. So Steph, which are the measures you're excited about on the ODIs? Stephanie Cawley: Yes. So we're doing really well across the piece, but it's the big 3 that we're really excited about, so it's spills, pollutions and leakage. I've just talked briefly about leakage. You know it's a 3-year roll-in measure. So we've got 2 strong years in the bag already. We're on track to deliver our eighth year hitting the leakage target. We're finding and fixing more leaks than ever. We recovered really quickly after the summer despite the fact that we had 1/3 more burst than we'd normally see during that period. doing some great work with Pegasus units to reduce pressure, which also means we see less leakage. So we think we're set up really well for the rest of the AMP. Olivia Garfield: Now going on to your second question, which is just wider, what gives us confidence for the future over the next 5 to 10 years? I think there's a couple of areas I'll go to. So I'm going to hand to Helen first of all, because financing is important in the sector. We do own that financing outperformance. And we've had a very strong last couple of years actually on financing. So I'll get to Helen talk about financing. I don't think it's worth getting into totex and I'll get to James to talk about partly why the PCDs are an upside for us. Remember, we're guiding to up to GBP 50 million on PCDs, but also on totex overall and give some sense of it. And the part of it there, I think he'll talk through is some of the innovation we're putting in place and some of the kind of the strategic decisions we've made on in-sourcing and plug and play. And then I think I'll just get Shane to mention, when you look at the future, there is going to be more opportunity for RCV growth. That stores it locks in long-term stored value. I'll get Shane maybe to talk through what we think is going to come next in the RCV growth opportunity above and beyond the current locked in pricing. So Helen? Helen Miles: Yes. So Sarah, thanks for the question. I think we talked about in the results about our financial strength. And I believe that underpins our ability to continue to outperform on financing. We've -- I'm really pleased we've been able to guide today to 60% to 65% gearing by the end of the AMP. And I think that demonstrates our commitment to maintaining that financial strength as we go into the next AMP. But if you look at our financing specifically, our structure has worked for us in terms of we've got one of the lowest index-linked financing in the proportion in the sector. That's really worked for us certainly over the last 5 years and is continuing to now. But we've also had a very specific program about diversification. And we've -- over the last 6 months, we've hugely diversified our sources of finance in terms of geographic. And we've recently welcomed another 5 banks into our into our financing as well. So there's so much positivity out there in the market, so much demand for our financing with the tighter spreads in the sector, I'm extremely confident that as we go out to the market, we'll continue to raise financing significantly lower than the cost that the regulator allows. Olivia Garfield: Very good, James. James Jesic: Sarah, first of all, thank you for your kind words, hugely appreciated. I guess when you look at the size of the plan that we've got for AMP8, gives us loads of opportunities to actually deliver more for our customers, more for the environment and, of course, more for our shareholders. I think what we're really focused on and what I've been focused on is how do we innovate, how do we create more efficiency into our program to not only deliver a bigger bang for our book, but also ensure that we have plenty of choices. Now some things that I've shared with you previously are around things like innovation we're doing around AI and how we improve our design. So that will create a lot more efficiency in that space, but also our plug-and-play program where we're using far more modular solutions to increase efficiency in our capital delivery. So there's lots of things that we're doing. And of course, we're always happy to share. Olivia Garfield: Very good. And I guess what's going to come next year in terms of that performance, plus performance on totex and RCV growth? Unknown Executive: Yes. And we focus on RCV growth at the moment. So whilst we have 60% nominal RCV growth, there's an opportunity to get -- put forward additional cases to Ofwat. These are called the reopeners. It's quite similar to green recovery, where we got GBP 500 million. That was additional LCV growth. And there is a high bar though for this. I should just be clear. It's not super easy. So you've got to be on track with your capital program. You're going to be able to demonstrate that your supply chain has capacity and you've got capacity to deliver more. And they are a large business cases. As you've seen in PR19, green recovery, PR24, you're going to submit quite a lot of evidence to Ofwat to get these approved, and you've got to have strength in the balance sheet. So there is a high bar, but Ofwat will be publishing further guidance in December, and we'll be responding to that. So you probably have 2 -- we think there's 2 streams. There's a fast track route, which will be funding next year or there's a slow track route, which runs over 2 years. So I guess you can work out which one we're going to go for Sarah. But in terms of the quantum, until we have the final methodology from Ofwat in December, we probably can't comment any more on that. Olivia Garfield: Very good. Fantastic. You can come back later with any more questions. I'm going to hand to Dominic now. Dominic? Dominic Nash: I think you're going to be getting quite a lot of recurring comments this morning, Liv. So first of all, clearly, congratulations on your next adventure and also your decision and also clearly, I think that will continue to be a poor place in your absence. I look forward to hearing what you're going to be getting up to next, maybe I don't know, sumo wrestling training might be something we can hear about. And James, clearly, you're also going to be sitting there thinking, oh my word, I've got big shoes to fill. So I'm sure you'd be reiterating, so sure it will be fine. A couple of questions for me, please, actually. 1 actually, Liv, on your decision to step down. Could you give us some words as to -- in your experience, what do you think has happened to the role of CEO in the water sector? And do you think the special measures bill that came through has had any impact in your decision to step down? And do you think that it's having a decision -- having an impact on the ability to attract, retain sort of senior staff? The second question I've got is on your 13% RoRE that you're guiding for '25 -- '26. You're basically saying, look, it's going to be 13% because we've got higher inflation. But on the normalization, the ODIs look like they're going to be nothing out of the ordinary this year versus the 5-year guidance. The totex looks like you're guiding to potentially more outperformance to come or efficiency, which I guess might be reinvested. And financing is financing. So if we normalize for inflation, is it fair to say that 13% ROE isn't going to be materially different to what we now expect for the full AMP. And third question, apologies on something that I've been sort of thinking about, which is on your low rainfall I think the Met office is suggesting we're going to have a very dry winter as well following the dry summer, where it doesn't look like it today. Are you concerned at all about your water resources in your region? And what can you do to give sort of long-term resilience? Olivia Garfield: Really, what a full range of questions. There's nothing left, I think, after Dominic's done those 3. So the first thing is, no, the special measures is totally fine. So let's be really clear on that. And the record there were thousands of people that internally that would love to be Chief Executive Severn Trent, never mind you get externally. So we are an absolutely lovely company that employs beautifully cheerful people that does an amazing mission based in the fab part of the country. So no, I fundamentally disagree that the special measures would have any impact on the Seven Trent will being anything other than highly, highly attractive and it's totally unrelated. I've been here nearly 12 years. And I used to believe that chief execs, I guess, you kind of like you go through the first wave 5, 6 years, and then you got to unravel your first wave of bad decisions. And then you go through another wave of it, you've got to unravel your second wave of bad decisions. And then eventually, you wake up and you realize you've got amazing successes internally. And the job actually at a certain point in time is you've got to hand over to the next generation. They're going to be the perfect answer to the next wave, and that's what we've got. I know James is going to be a rock star. I know the senior team are fab, and I think this is the right time. So I'm not going for another job. I always said I'd never apply for another job whilst was at Severn Trent. So I will eventually take another job. I'm not going to sit in my like of walk the dog every day. But there is no plan. The plan is for the next few months to be sat on James' shoulder, helping him out as he picks up the role. So that's the first one is that it's a brilliant job and company lucky to have James and James is lucky to have the job. Now on the second, I don't actually quite make the same math as you on the RoRE. So I hear your point on the 13% for this year that a whole chunk of it is either financing or inflation. Yes. But if we add up for the 5 years, not the same. So we've got GBP 300 million worth of outperformance. That's chunky. That's decent in anybody's percentage RoRE number. We've got the outstanding status as well, which is 30 basis points. That's chunky in anybody's number. And we've always said that there will be more outperformance across other areas, right? We'll be looking to land that. Financing is part of it. We've guided to at least 0 on totex. We said that there are some areas like Bioresources where we are a sector leader. It's likely that outperformance might come down the line, just not ready to call it yet. And then, of course, we're having a very strong start. So we're calling at least 300 now. Every single member of the Severn Trent family will be looking to try and improve that over the next couple of years. So for others, they might need to rely solely on financing and on inflation. The Seven Trent, not true. And if you look at our history, what you tend to find is when you look at the bars over a 5-year period, all of them begin to look good and you begin to see some really good performance in a whole range of areas. So that was that one. Now low rainfall again. So I hear it because the EA have published a whole lot of drought situation messages, and they're right to do that across the country. But if you actually look at our reservoirs, and that's what's interesting, is we have -- I'm going to pass to Bob now to give an update and he's going to take you through 3 things. 1 is don't forget the sources of water we have. 2 is we're going to give you some news in terms of latest levels. And the third thing is just to remind you of our track record of the last time we did actually have a host-pipe ban. So Bob, on to those 3. Bob Stear: Yes, great. So 1995 was the last time we had a host-pipe ban, of course. And as you know, Dominic, we've got -- our water comes from 3 main sources: underground in our boreholes from rivers and from reservoirs. So I guess the thing that people really noticed, of course, over the summer is the low reservoir levels. And this summer was a hard summer for us. We work really, really hard to avoid having to put a temporary use ban on again, which we managed brilliantly, a combination of asset-related interventions and great customer comms. But the great news is actually, we've actually had a really wet autumn so far. So we're in good shape. In fact, our biggest reservoirs around the Derwent area and Elan Valley, each went up by more than 10% over this last weekend. So they're all in really good shape as it happens. So I understand the question, but we're in good order. Thank you. Olivia Garfield: You always send the interesting question is to go back to what was the performance in 2022, which was the last dry year, and we're like 15%, 17% ahead of where we were on exactly the same day in 2022. So we feel confident and in good shape. Okay. And then we go to Julius, next. Julius Nickelsen: Congratulations to the strong results. And obviously, very sad to see you Liv. So thank you also from my side and all the best to you, James. Just 2 questions from me. The first one on the 60% and 65% gearing. Just wondering, does that hold also if that additional topics through the reopeners comes in? Or do you need to wait to assess how big that potentially could be? And then the second one on CEO succession, maybe to give you a little bit of an off [indiscernible] here, but what makes you think or like what convinces you that Severn Trent even without you Liv, can continue to be like the highest quality company in the sector and continue to outperform on the ODIs like it has done in the past would be interesting to hear your thoughts. Olivia Garfield: I'll do the first -- the second one first, and then I'll hand to Helen and probably Shane just to talk through the gearing and the reopeners. I mean, so I am just one person. So I know I'm a big personality, and I know I'm noisy, but I am literally just one person. And I don't actually deliver any individual ODI, do I? So I guess we could argue I'm not the person who's going to fix the leaks, I'm not the person who's going to fix the fills. And I'm definitely not the person who's going to stop pollution over the course of the next few hours. So that is the team. And what we've done this whole team and also the 50 [ FT ] is created a culture, where our people love performance and every single in our body culturally loves the fact that we are a leader in our sector, and that will make absolutely no difference that I'm not going to be here. It is ingrained in our DNA is the desire to do brilliant for our customers and to make sure that we perform every day. And if you go to any communication cell or any depot or any team meeting, then you'll see that, that's how we're set up, how we thrive is on that level of personal competition between teams, county place county, the ability to kind of add value and find new ideas, and I know I will continue. And don't forget as well, James was part of all that success. He did run operations in the transformational areas where we went from not doing so well in ops to doing brilliantly. So I guess you could argue James might have been involved in that. And then he's run capital during the era that we've gone from kind of like GBP 0.5 billion up to a GBP 2 billion. You could argue we probably added some value in that space as well. So James has been a core part of that entire journey. So the only difference now is he's going to be in a different chair, but he'll still be bringing that same value and that same value add. So I've got no qualms at all this performance will continue. Helen? Helen Miles: Yes. Julius, thanks for the question. Yes, really pleased we've been able to give gearing guidance today. 60% to 65% at the end of the AMP. And from my perspective, that's our path what we're committing to. We've said repeatedly, we're fully equity financed for the AMP, and that obviously remains true with that gearing. And we've also said we're committed to our stable credit ratings. So there's plenty of headroom in there for that. In terms of reopeners, still lots of unknowns, but my expectation is even with reopeners, we intend to meet that gearing level. So it shouldn't make any difference. But obviously, as Shane said earlier, we're waiting to see the financing rules to determine what that allows us to do. I think the other thing to note is I talked about in the presentation about GBP 500 million capital efficiencies. And obviously, one of the things that, that will allow us to do is invest more. We want to invest as much as we can. And that's why we're constantly driving for those capital efficiencies. Olivia Garfield: Brilliant. I think that answers the question, because effectively, as Helen said, we've got the GBP 500 million of targeted efficiencies. That gives us the chance to invest in the open. And Ofwat we're also very clear that in the rules for the reopeners, there's a lot of companies in the sector that will need to make sure that wherever the rules are set, they can afford to do it. A lot of companies are heavily geared. They'll need to make sure there's some kind of like in-period revenue and also some level of shadow RCV, I would imagine. So we'll expect to see those come through. Very good. Thank you, Julius. Over to Pat. Unknown Analyst: And before I start, I'd like to echo congratulations on your successful leadership at Severn Trent and wish you all the best, James, in your role as CEO. Sorry, I'm getting choked up. Olivia Garfield: I love it. Feel free to cry. I'm okay. If you want to cry, you need tissues. Unknown Analyst: I'm good. I'm good. I think I'll be able to get through it. My 2 questions, please. Firstly, it would be great to hear the team's thoughts on the CMA provisional determinations. I appreciate you haven't appealed, and I'm sure you don't regret that, but would be good to hear what your thoughts on the determinations were and what you'd be feeding back to the CMA here? And finally, on that topic, how you think we should be reading these decisions into what will feed into eventually AMP9? And then my second question is your conversations with the government and the new Secretary of State. I guess, I think our conversations with investors, what they want to see from the government is almost a pivot from, "hey, we're holding the sector to account to actually saying we're working with the sector to deliver better outcomes." I guess my question is, are you seeing that change in the government? Do you foresee a change in that messaging coming? Or do we need to see more delivery before we can start seeing the government sort of maybe being more cheerleading the sector as opposed to the current messaging? Unknown Executive: So I'll start with the second one first. I mean I'd rather you saw Emma Hardy's speech from the British Water Conference, but it is available on public record from last week. And I think that actually gives really good evidence that the message is changing. I though it was a very adult speech, I though it was very engaging, and it did highlight that actually there was shared desire to see the sector succeed. So I think there is absolute desire by both Emma Hardy and Emma Reynolds for the sector to do well. Now equally, though, your second point is true, the sector does need to deliver. So -- and we're really conscious of that. It's why we did the transition spend. It's why we're going early with our capital is that customers have seen pretty reasonably high bill increases after a period of clearly underinvestment, you could argue across the entire sector and then we've played catch-up. And I think what's come out of that, though is that there is clearly -- you have to evidence to customers that by the time they pay that bill, they're getting really, really great value, and we're very conscious that's an imperative. So I think the government is definitely changing its style and manner, but it has got to hold us to account and every company has got to step up and make sure they deliver their capital program and deliver their performance targets. So I think it's a 2-way contract, and we're confident of our part of it, and we think that will be -- that will come across. The other thing to note, I think, for investors is that I think government has been fair on calling out amazing performance. So we've seen quite a few clauses where government has called out the fact that we've had 6 years of 4-star status. No one have mentioned it yet, so I can't get it in. Since we have had 6 years of 4-star status, government has gone record and praised that excellent performance. That wouldn't have happened prior to this. We had 3, 4, 5 years of 4-star status, and it never got mentioned as a public record. We have seen that change as well. So I believe the moment has come when the rhetoric is moving. Now Shane, CMA please. Shane Anderson: So I guess from an investor or non-impellent company perspective, there's probably 2 positives to call out. So the first is the cost of capital is 30 basis points higher. So that is helpful given I think it was a Recommendation 23 government said the CMA should be setting a methodology for cost of capital. So that's good, which is also equivalent to our 30 basis points for outstanding that no one has mentioned yet, so I'll just keep bringing that up. And the other one is the frontier shift. So this has been a big debate amongst the regulators is what's the ongoing efficiency challenge each company should be delivering. Regulators have been saying it's 1%. The economy has been delivering much less and the CMA came out at 0.7%. So that's a useful precedent going forward. I think the other interesting thing from the CMA case is base costs. So none of the appellant companies raised base costs, but the CMA does a whole redetermination. So they've created their own models, which actually gives the sector less funding. So I wouldn't be worried about this in terms of the precedent setting because it goes against everything [indiscernible] has said, everything against the NAO has said because it's statistics led rather than engineering led. But it's still an interesting point, which is the companies are getting less money generally on base spending. But from an investor perspective, I think it's good for the PR29, higher WACC and a lower frontier shift. Olivia Garfield: Mark over to you. Mark Freshney: Wishing you all the best for the future Liv and looking forward to seeing what you're going to do next. Just 2 questions. Firstly, if there's 1 regret that you've got over the last 12 years at Severn Trent Liv, what would it be? And secondly, if there's one piece of advice that you would give James as you hand over the reins to him, what would that be? Olivia Garfield: All good questions. So there's one thing I've never done that I would have loved to have done. We've got the most amazing asset that brings water gravity fed from right up in the beautiful Welsh mid pop of Wales down into Birmingham. And it's the called Dee and [indiscernible] it's absolutely gorgeous. And back in the day, if I've been the Chief Exec 40 years ago, I could have just popped down it, gone and seen it. We closed it once or twice a year to do cleans, and I could have walked along it and seen it, and it's got beautiful, beautiful tiling right the way throughout it. I mean no one ever sees it. Unfortunately, health and safety means I've got to do a 2-week confined space course to actually be able to go down it. So I would have loved to have gone down it, but I've never found 2 weeks to just confined space training to go down it. So I guess that is my one physical asset regret that I've never seen. Other than that, the one unfinished business is clearly our performance on customer. So none of us remain happy that our CMEC scores are only mid-table. We'd like them still to be podium. So we've got good plotting plans to get there. And I know James will see those through, and he'll be able to then say, I knew I'd fix it now that Garfield is out of the way. So yes, so that is, I guess, the thing that we as a team still look at ourselves and say, how can we not be podium on that metric. So that will be that one. In terms of piece of advice, I get the same piece of advice to every new Chief Exec. So I'll give the same to James, which is never go to bed without having done every single piece of work that is in your to-do list because you've no idea what tomorrow brings. And sometimes you think tomorrow might be easier, might be lighter, there might be no issues. And it's amazing how often the next day has something totally different that you couldn't have foreseen. So never go to bed without a clean inbox, never go to bed all your documents marks up, you can sleep less, but you can't make up time again. So that is my piece of advice to every Chief Exec. Thank you, Mark. Good thoughtful questions. Alex, over to you. Alexander Wheeler: Echoing previous comments, congrats, Liv, on a successful tenure at Severn Trent and all the best in future endeavors. Many congrats to you as well, James. 2 from me, please. Just firstly, on the at least GBP 500 million capital efficiency. Just interested in how much of this is visible now? I'd assume buckets like procurement, I guess, you'd have pretty strong visibility on already. And then also, which of those 4 areas you noted in the presentation give the most upside opportunity given the at least GBP 500 million guidance point? And then just on spills, where does the 27% year-on-year weather-adjusted reduction compared to your planned run rate? And does this bring the target forward for when you expect to hit the 2030 number? Olivia Garfield: Very good. So Helen, do you want to talk first about at least GBP 500 million... Helen Miles: Yes. As I say in the presentation, Alex, we are always driving for efficiency. So -- and you know plug and play, we talked about that first in 2023. So we've been on this road for a long, long time. So we're really confident about the GBP 500 million. We've been planning it for a while. We're well advanced on most of it. And so we're in really good shape on it. And that's why we're sharing it with you today because we are really confident about it. In terms of the split, obviously, plug and play is a big part of it. But actually, it's quite evenly balanced across all of those areas, which is good. But with any of these things, as the program moves through, things become more prominent than others. So -- but it's pretty even split, and we're well advanced with all of those areas that I talked about. And I guess if there's any upside opportunity, I guess it would come from stuff like, if we did get capital reopeners and we could do more of that plug and play, that would yield an upside. So I think at the moment, we think about GBP 500 million is the right number. But I guess for it to increase, then you'd have to believe other growth was happening. So at the moment, that's the right number based on 60% RCV growth nominal. If we ended up with more capital reopeners, we'd, of course, look to deliver more efficiently. In terms of spills, good point. So just to remind you, I guess, of our spills ambitions, always good to rebase the target. So we said we wanted to get to around 14 by the end of the AMP, so under 14 by the end of the AMP, and we're expecting to do that this year, which would be excellent. Now that's one of our conditions for outstanding status. So that will be quite neat to tick that off in the first year of the AMP as well. In terms of what we said we were going to do this year is we said we'd do about a 25% year-on-year reduction. So that would have taken us down to 18.8%. So we are ahead of that. Now we are clear though that if weather was equalized for last year's abnormally biblically wet year, then we'd be about a couple of percent ahead of our run rate. And last year was particularly wet. It's not a normal year last year. This year it looks like it will end up normal. So I've had people say to me it's going to end up dry year. We don't believe that. We think it will end up about normal. So we think this year's performance will end up in about a normal year, and that means we're kind of like 40% ahead of a wet year, 27% ahead of a normal year. So marginally ahead of track. We've got a lot of solutions that go live in the next few months. So that will give us a very strong start again to next year's number. So next year's number we'll have the benefit of all the solutions now in the next few months, and they'll get a full year benefit. Obviously, we didn't get a full year benefit for lots of solutions this year. Hopefully, that all makes sense. Olivia Garfield: Very good. Okay. A.J., over to you. Unknown Analyst: I'd like to echo the thoughts. Thank you Liv for everything you've done for the sector and I wish you the best in your next endeavors. And congratulations, James. I guess my question is more around the infrastructure services, the doubling of EBITDA. And just to maybe get a little bit more understanding of the components that drive the growth and any sharing arrangements that we need to think about and maybe if possible, the profile of the step-up? Olivia Garfield: So we're definitely not going to give you the profile of the step-up, but nice try. And thank you for the nice comments at the start. So I guess -- and do you want to bring to life a bit of that, I guess, Helen, do you want to start? And maybe James might jump in. Helen Miles: Yes, I'll start. Yes. I love it, A.J. It doesn't matter what we give you, you always want more. You're insatiable. But yes, really pleased today to be able to share that we're expecting to double the EBITDA in Infrastructure Services. And it's a combination of all of the businesses within that. So obviously, we're -- in Green Power, we've continued to grow Green Power. We've got a big solar scheme that's just in progress at the moment. In services, we've got opportunities to win new contracts. So that's a key focus for us as well. And of course, property, we committed by 2032 to deliver GBP 150 million of profit, and we've got some great stuff coming through. It's been tough in property over the last couple of years, as I'm sure you'll know, but we're starting to see that turn a corner now. So that's in there as well. And we're really pleased to share today the 2 acquisitions we've made, one in water and one in waste. And the opportunity we see here is for Infrastructure Services to really benefit from the growth that's happening in the water sector, specifically Severn Trent Water, but it also helps us secure that supply chain as well. So the opportunity is there, and we're really, really excited about it. Olivia Garfield: And I guess it's worth bringing out how we think this actually underpins and helps to deliver the capital program because one of the other key parts is it's very nice to have an upside, isn't it, nice dividend cover, nice growth. But actually, it also helps lock in and secure our supply chain. James Jesic: Absolutely. I mean, Helen has covered the bulk of the business really well there. But this was a strategic play on our part. We identified across the sector there were definitely going to be pinch points in certain aspects of the delivery. So for instance, if you look at the major renewal program, most companies have doubled what they did in AMP7. We see that as a particular pinch point. So identifying that early allowed us to get on the front foot and hence, create and acquire these businesses. So in the first instance, we really see this as an opportunity to really help ensure that Severn Trent from a water perspective, really delivers its capital program and not only delivers it, but delivers it efficiently. Of course, then in the future, we can look at how we expand those particular businesses. Olivia Garfield: Ahmed? Ahmed Farman: Liv thank you from my side as well. And Congratulations to James. I just have sort of a couple of sort of questions. I wanted to go back to the reopener. Could you just sort of tell us a little bit about -- more about the process as to where we are? What are the next milestones and when you expect to get clarity on it? And then secondly, again, can you talk about the areas of focus within sort of this program? Because obviously, you have a huge capital delivery program already underway. So that's already a huge amount of work, et cetera. So I'm just trying to understand what areas could be of focus that could come through the reopeners. Olivia Garfield: Very good. So I'll get Shane to take you through the process. I mean, in terms of delivery, we've definitely got capacity later in the AMP. So let's be really clear on that. So if you look at our current run rate, we're calling GBP 1.7 billion to GBP 1.9 billion this year. But if you look at the in-sourcing we've done on some big areas, let's take mainslay. So we've in-sourced the workforce now of mainslay. We do minimal volumes this year internally, but that really grows in year 2 and year 3. So again, we have the capacity to do more with that workforce later in the AMP. So -- and I guess when you look at some of the acquisitions we just brought in as well, all of that just bolsters the fact that we've got a very, very large setup internally. And don't forget as well that the delay often for others on their capital spend is the design part. They haven't got the time to design it because we've got an in-house design team, and that means we were doing a lot of our design actually as part of transition spend in the latter part of the last AMP, we've actually fully -- we have fully designed by the end of year 3, this AMP. Again, that gives us the capacity for that team to move on to preplanning for AMP9 or to do more work on reopeners. So I think that's where the capacity comes from in our mind for the reopeners. Shane, how is the process work? Shane Anderson: So in December, we expect the update to the methodology. Then for the fast track process, you'd submit your business cases in May, you'd have a draft determination in July and then the final determination in December, so you can then flow the numbers through the charge setting process. And then in terms of the areas, so Ofwat's identified 10 priority asset classes from an asset health perspective, the big one being on gravity sewers and then there's also assets at the water and wastewater treatment works and various tanks. You've also got assets relating to growth. So whether that's building more water resource capacity, for example, boreholes or whether you're expanding wastewater treatment capacity to support new and faster growth in your regions. And then you've also got any new risk. So for example, if new legislation comes in relation to cyber or PFAS, then there's an opportunity there. So that will exist all AMP around. Olivia Garfield: Very good. Dominic, come back in for seconds. Dominic Nash: A couple of questions from me, please. Firstly, on the EPA. So congratulations getting your 4 star again. The environment agency is clearly going through consultation at the moment, I think it completed consultation with a 5 star. I just wanted to know that if we're going to run under the new regime, would you be a 5-star company or a 4-star company? Secondly, I was actually a follow-up on the PFAS question actually. You mentioned that the new regulations coming potentially or the new risk on PFAS. I think your area is one of the PFAS heavy areas of the U.K. I don't think you've got much in your totex for AMP8. Is it possible to sort of like give us sort of some color on the quantum of the potential PFAS expectation and how much we might be able to see in AMP8, please. Olivia Garfield: Very good. So 3 questions there. I mean, so annoyingly, as 5 star doesn't come in for a few years yet. So the consultation is out there, but it doesn't arrive until 2028. So we'll all have to satisfy ourselves with 4 stars for the next few years, I'm afraid. Dominic Nash: Sorry, does that mean that James might actually be a 5-star CEO. Olivia Garfield: You know what, I've had the same thought. And Dominic, it breaks my soul more than it breaks yours. So equally, as a top 100 shareholder in Severn Trent, you better be a 5-star company CEO. Otherwise, I'm going to be coming and having more conversations. So yes, so we only have only have 4 stars in the next 2 years. We're 10.5 months into the financial year at this stage and we're looking in good shape. Obviously, a long way to go, 6 weeks to go. It's never done until it's done, but we're working our socks off to try and cross the line on 4-star for this year. Then I think next year is a 4-star and another 4-star and then you get to a 5-star. So it is actually quite a while away until we get to 5 star. And we've been looking at all the metrics possible for a long period of time. We've been shadowing them. We've been getting ready and every around this table has every intention of moving to be a 5-star company when that goes live. Now that's the first question. But yes, you're right, James, will be the first 5-star Chief Exec and I won't be. On PFAS, I guess, just on the budgets, Shane, do you want to mention how much money we had to put aside. We actually have quite a nice bit of money actually, Dominic. Shane Anderson: It was over $100 million in relation to PFAS, plus additional $300 million in water quality. Olivia Garfield: Exactly. So we've got a few best GBP 0.5 billion in that water arena, just, I guess, to bring that to life. And typically, you're talking about tens of million pounds, tens of millions of pounds for a PFAS solution, not hundreds of millions of pounds per site, again, just to contextualize it, that was that. And then Bob, do you want to bring to life. I think sometimes it's interesting to context ourselves against us versus France, say, when you listen to PFAS, do you want to bring to life any thoughts on? Bob Stear: Well, perhaps one of the key things is Marcus Rink, the Chief Inspector from the drinking water inspector, actually gave a speech at the British Water Conference the other week. And he was talking about compare and contrast to Europe and the U.K. and he put the U.K. quite a way ahead in terms of -- we've been looking at PFAS for a long while, actually since Bruntsfield in 2005, when we had obviously the firefighting phones going to that system. So we're in really good shape. And for us, in our region, we've got our Witches Oak site up in Nottingham this year that we know exactly the process we're going to put in place to take out the PFAS. So it's actually -- it's all good news. Lots of research going into clever ways because it's easy to take it out. It's not so easy to deal with the stuff that you then do end up with. And there's a lot of research going on to make sure we find really efficient ways of dealing with that. So we're in good shape. Olivia Garfield: Very good. Bartek, over to you. Bartlomiej Kubicki: Thank you very much. And I would like to join all the congratulations, and thank you for all the great work. Just 3 questions, if I may ask, please. First of all, if we think about ODIs in AMP8 and you compare it to ODIs in AMP7 in terms of how much does it cost to earn additional GBP 10 million of ODIs. I just wonder, is AMP8 from this perspective much more challenging, meaning do you need to invest more to get the same result as in AMP7 in terms of ODIs? That will be the first question. Second question on this GBP 500 million of capital efficiencies. Maybe it was already discussed, maybe I didn't capture it, sorry for that. But what are you going to do with those efficiencies? Is it going to be reinvested into your network? And consequently, could it boost your ODI guidance or ODIs achievements in AMP8? And the last question on leakage as you spent some time on your presentation on leakage. I can imagine it's becoming more and more expensive to get additional 1 percentage point of leakage reduction. And I just -- I would like to ask you whether you think Ofwat is ready to pay more for reducing leakage by additional percentage points, meaning in AMP8, in AMP9, when it periodically should become much more challenging to reduce leakage, whether they are happy to grant you higher allowances to do so? Olivia Garfield: Very good. 3 very thoughtful questions. So I mean, you can't really work out like GBP 1 of ODI cost you X because it's very different per ODI. So each individual ODI is quite a different metric. And it depends on the weather conditions that happen in that particular year because that makes it harder or easier. And it depends on your start point on the targets. So it's not as easy to kind of say in AMP7 used to cost us X and AMP8 it cost us Y. That's not true. What we can say, though, is that if you look at AMP7 versus AMP8, we've got less measures to go after. That's better for us. We have 21 metrics now. We used to have 43 back in the day. Keeping 43 metrics green is harder than keeping 21 metrics green. That's one thing. And the second thing is we have a much larger base budget. So when you look across the piece, we're growing our RCV by 60%, aren't we this time around, and it was about 11% last time around. So we do have more generic investment. And so what you can do is invest more in capital solutions. So rather than investing in OpEx heavy solutions every year, you can actually fix the source of the problem. And so if you look at some of the big earners, like, for example, leakage or like, for example, spills, if you can fix that site permanently, you're going to earn reward on that site every year for the next number of years. So it is a very different dynamic, this AMP versus last AMP, I would say, on ODIs. So that's one. On the efficiencies, so what we've said is that we're going to make the efficiencies and then you should assume we're investing them as it currently stands. And whether we're investing them to land additional performance, like, for example, the EPA metrics, there are now more metrics and that will require more investment to hit those. It might be we're putting some of the metrics in to land force our status. It might be that we're saving some money for the capital reopeners, and we might do that, put some money aside because those reopeners are really good, so we might save some money on that, but that keeps the guidance on gearing 60% to 65% in shape. And it might be that you have a long hot dry summer, or like this one, and you have to spend a bit more money on moving the water around and creating more water. So it's just good prudent management to identify efficiencies early on. So you shouldn't currently assume more totex than plus 0. We've said that at the time, but you should feel very confident in our ability even in an inflation-heavy environment to still deliver our totex budgets. That's what we're currently saying. But we haven't been as clear as that. So I guess that's what we're saying is at least 0. And then on leakage, it's an interesting question. I'm not sure I'm in quite the same place. I think Ofwat does accept that leakage is more expensive to deliver, and that's why they've given us all the money for mainslay. So if you look at the money they have funded, they have funded GBP 0.5 billion worth of mainslay investment. That's new. That's fair. And then I guess for us, interest to talk about stuff we're doing on pressure management because that is funded by ourselves. There's just a better way to run the company. Helen Miles: Yes. So I think we've got to innovate on both find and fixed to keep the costs down. So from a fixed point of view, I've talked about Pegasus, so pressure control in valves across the network that we can automate, which reduce burst and leakage. But we're also -- we've gone really big in the last 6 months on Origin, which is a solution which we push into the pipes to seal the leaks, which means that we don't have to pay for expensive road closures or use our crews for 2 days when they can do a job in 20 minutes. So I think it's about innovation as well. Olivia Garfield: Very good. Thank you very much. So I think we have no further questions. I can't see any on the screen either. So in which case, I'm going to call it. So a massive thank you for anyone that dialed in for the half year subject Q&A. Much appreciate it. And thank you once again for all the support for the many questions, the guidance, the counsel over the years and well done to the team for a very strong first half to the year.
Operator: Good day, and thank you for standing by. Welcome to Kiwi Property FY '26 Interim Results. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Clive Mackenzie, Chief Executive Officer; and Steve Penney, CFO from Kiwi Property. Please go ahead. Clive Mackenzie: Thank you, Maggie. Kia ora, and good morning, everyone. Thank you for joining us for Kiwi Property's interim results announcement for the 6 months ended 30 September 2025. I'm Clive Mackenzie, the CEO of Kiwi Property. And today, I'm joined by Steve Penney, our CFO; and Fraser Gunn, our Head of Investor Relations. I assume you have a copy of our presentation in front of you. If not, you can access one from the Investors section of our website at kp.co.nz. A quick reminder that as usual, we have included detailed financial and property information in appendices to the interim financial presentation. Turning now to Slide 4 to look at our progress on key priorities over the last 6 months. Kiwi Property is focused on increasing long-term returns for its investors. We do this through the ownership, development and management of a portfolio of high-quality real estate. At the core of our strategy is an ambition to be New Zealand's leading creator and curator of retail-led mixed-use communities. We believe our strategic mixed-use assets located in metropolitan areas with great transport access such as Sylvia Park, LynnMall, Drury and The Base will continue to grow and that by prioritizing them, we will create the greatest value for our shareholders in the years ahead. We are pleased with our achievements in the first half of FY '26, making strong progress against each of our strategic priorities. The first priority we identified at our annual results earlier this year was to efficiently manage the balance sheet and free up additional investment capacity. As at the 30th of September, gearing remained relatively flat at 38.5% with the operation of the dividend reinvestment plan funding our CapEx requirements. Since balance date, we have agreed the sale of Sylvia Park Lifestyle to a large-format retail fund managed by Mackersy Property. The proceeds from this sale is approximately $53 million, with some of the proceeds to be reinvested into growth opportunities. The pro forma impact of the sale reduces gearing to 37.5%. The second priority was to continue to drive rent growth. Despite a weak economy and a challenging leasing market, during the first half of the financial year, we have delivered strong leasing outcomes across the portfolio with total rental movements, including new leasing and rent reviews up 3.5%. Office leasing spreads were up 3.4%, supported by the ASB lease extension and encouraging tenant demand for premium office space within the Vero Centre. Mixed-use leasing spreads were up 3.2%. Now turning to Slide 5. The third priority was to maintain strong discipline on costs. Through controlled management and a culture of continuous improvement, our employment and administrative expenses were down by 5% when compared to the same period last year and adjusted for one-off costs. The fourth priority was to progress the sell-down of Drury large-format retail sites. Around 77% of the large-format retail land intended to be sold at the development is now under contract with settlement and profit recognition expected from FY '27 to FY '29. I'll talk through the conditional sales of land in further detail later in this presentation. Drury land sales will help to fund the project's capital expenditure with minimal net gearing impact on the Kiwi Property balance sheet expected from the development. Now turning to Slide 6. As well as strong progress on our key priorities, a number of other business highlights over the last 6 months are worth noting. Strong leasing momentum was seen in a number of our assets. ASB's lease at their North Wharf headquarters was extended through to 2040, which was a significant milestone and provides long-term certainty of tenure at the asset. Resido, our build-to-rent asset adjacent to Sylvia Park, was 99% leased at the end of the period, and Vero Centre's leasing is progressing well with occupancy now at 94.3%, up from 92.4%. Sales and foot traffic were marginally up at our mixed-use centers over the last 12 months. Positively, sales are showing signs of improvement, up 1% in the last 6 months compared to the prior 6 months. Catalysts for further sales growth are expected through improving customer spend conditions following interest rate cuts and IKEA's first New Zealand store opening adjacent to Sylvia Park in early December. In November last year, we provided a convertible loan to Mackersy Property with the intention that this would convert to equity. With the earnings milestone in the loan agreement now met, we can confirm that this loan will convert to a 50% equity stake in early December, unlocking an additional source of capital and potential earnings growth over time. Mackersy has launched a new large-format retail fund with Sylvia Park Lifestyle as a cornerstone asset and is currently seeking investor interest. I'll talk through the new LFR proposition in further detail later in the presentation. Over now to Slide 7. With New Zealand's first IKEA opening next week adjacent to Sylvia Park, it would be remiss not to mention its significance for the Sylvia Park Precinct today. IKEA is one of the most highly anticipated retail openings in recent years. And once open, it is expected to act as a significant draw card to the Precinct. To ensure the seamless integration of the 2 sites, we have completed a pedestrian walkway between IKEA and Sylvia Park to encourage cross-shopping. This walkway entry point on Level 1 will be beneficial in driving foot traffic to Sylvia Park's upper floor retail. We anticipate that the opening of IKEA will drive additional customer activity and reinforce the long-term value proposition of Sylvia Park. Now turning to Slide 8. Among others in the property industry, Kiwi Property discussed the country's seismic regulations with government ministers and raised whether the mitigation costs associated with appropriately sized compared to the risk. We are pleased to see the proposed changes announced in September by Minister Chris Penk, which are expected to provide greater clarity regarding seismic strengthening obligations. Proposed legislation will remove the new building standards ratings. Instead, the legislation will target buildings posing substantive risk to life in medium or higher seismic zones. Auckland is set to be removed from the earthquake-prone building regime altogether due to low seismic risk, meaning seismic strengthening would not be mandatory for Auckland buildings. Kiwi Property's portfolio is predominantly Auckland-based with 86% of our assets based there when excluding held-for-sale assets. In the valuations of Kiwi Property's Auckland's assets, we currently have a combined present value of $83 million in seismic CapEx assumed to be spent over time. Across our portfolio, including held-for-sale assets, the total seismic CapEx provision have a present value of $116 million, which could significantly reduce once this legislation is passed and implemented. Kiwi Property's valuations currently remain unchanged and any potential CapEx savings from the reduced seismic upgrade requirements will depend on a variety of factors, including market reaction, tenant commitments and lender expectations. Over now to Slide 9. We're pleased to have continued to maximize the day-to-day operational performance of our assets. Despite the challenging leasing market, we have continued to grow rents and increased both our weighted average lease term and occupancy. As you can see on this slide, total rental growth from mixed-use office and retail leasing activity was up 3.5% for the half year. Driven by the renewal of ASB's lease at North Wharf, over 28% of our office space was re-leased or renewed with a spread of 3.4%. At the half year, 68% of our total portfolio of our income was subject to either a fixed or CPI-based review, allowing for future rental growth. Overall portfolio occupancy has increased 96.9% to 97.9% over the period. This increase was primarily due to the lease-up of Resido, which had 293 of 295 apartments leased as at 30 September and positive leasing momentum in the Vero Centre and Sylvia Park adjoining properties. Our weighted average lease expiry increased from 3.8 years to 4.3 years over the period, primarily due to the lease extension at North Wharf for a further 9 years. Turning now to Slide 10. Sales across our total portfolio were margin lower, down by 0.6% over the last 12 months. However, sales and foot traffic at our mixed-use assets were marginally up by 0.2% and 1.1%, respectively, compared to the previous period. Stronger mixed-use sales in the second half, up by 1%, shows there's momentum heading into the Christmas shopping period. Total occupancy costs were up to 15.5% from 14.5% across the mixed-use assets with a target TOC of 17% to 18%. This provides further scope for rental growth. Overall, sales appear to be recovering, and our hope is that this theme continues over the coming months. On now to Slide 11. Kiwi Property's asset values were marginally lower over the year with a fair value movement for the total portfolio down by 0.9% or $30.3 million over the last 6 months. Values look to have stabilized as interest rates continue to decrease with the investment portfolio capitalization rate broadly flat versus the prior year. The base valuation increased by 1.9%, thanks to continued strong leasing activity with a spread of 5.8% and occupancy at more than 99%. On the other hand, our Drury landholding valuation has seen a small decrease of $4.3 million or down 2.6%. This is primarily due to ongoing development investment. These capital works are expected to enhance the site's long-term value with short-term valuation movements expected during active project phases. I'll now pass over to Steve to talk through our FY '26 interim financial results on Slide 13. Steve Penney: Thanks, Clive, and good morning, everyone. Kiwi Property has delivered a strong overall rental performance in the last 6 months with net operating income up 5.7% across our portfolio compared to the prior period. Our focus on mixed-use assets has delivered through cycle net operating income growth of 6.9%. At Sylvia Park, the lease up of Resido has contributed to an additional $3.8 million in income compared with September 2024, while the ASB lease deal at Geneva House added $900,000. The Base continues to perform well with Te Awa's new medical and entertainment tenancies in Level 1 driving higher income up $0.5 million. These results reflect our ongoing commitment to optimizing portfolio performance even when market conditions are challenging. Turning now to Slide 14. Adjusted funds from operations, or AFFO, increased by $3.5 million or 7.2%. This was driven by higher net rental income and stable finance expenses over the period. Employment and administration expenses when normalized for one-off costs associated with the ASB lease extension and other transaction costs were lower by $600,000 or 5.1%, reflecting our continued focus on controlling costs and delivering operational efficiency. Although our half year dividend of $0.028 per share reflects an 88% AFFO payout ratio, we expect the final FY '26 dividend payout ratio to be at the lower end of our 90% to 100% AFFO target range. Turning over to Slide 15. Our total property assets, including our investment properties and Drury land classified under inventories was $3.3 billion as at 30 September 2025. Gearing remains relatively flat at 38.5% with proactive capital spend reduction and the dividend reinvestment plan supporting the stability. Pro forma gearing is expected to reduce to 37.5% following the completion of the LFR fund transaction. Net tangible assets per share were marginally lower at $1.12, down by 2% from $1.14. The interest cover ratio was 3.1x, up from 2.9x in March. Now over to Slide 16. Kiwi Property continues to be well supported by our banking group. In August, we increased our bank facilities by $35 million with headroom of $248 million as at 30 September. Our weighted average term to debt maturity was flat at 3.1 years. During the period, Kiwi Property took advantage of lower cost facilities during the refinance while still ensuring a healthy term to maturity was retained. To take advantage of lower relative interest costs after balance date, we refinanced the recently matured $100 million KPG040 green bond series with bank debt. Moving now to Slide 17. As a result of declining interest rates and lower cost bank facilities in our recent refinance, our weighted average cost of debt reduced by 41 basis points to 4.89% over the last 6 months. In this half year period, we entered into $95 million of new interest rate swaps. The proportion of fixed rate debt has decreased from 88% to 76% with an anticipated reduction in debt levels after completing proposed asset sales. We will continue to actively manage our hedging profile to provide greater certainty around interest costs. I'll now hand back to Clive who will resume on Slide 19. Clive Mackenzie: Thanks, Steve. We're pleased that our investment in Mackersy Property is progressing to the next phase, creating value for KPG shareholders. The strategy behind our investment in Mackersy was to support the growth of Kiwi Property by providing us with a potential new source of capital and delivering earnings growth from a scalable business. The original loan arrangement supported the growth of Mackersy's business before our investor converted from debt to equity. Mackersy has made strong progress over the last 12 months, and the equity criteria for conversion of loan has been met as expected. This will result in the conversion of our original $6.5 million loan to equity in early December. We look forward to becoming a 50% shareholder in the Mackersy Investment Management business, which currently has over $2.2 billion in assets under management. Over now to Slide 20. We are pleased to announce that Mackersy launched a new large-format retail fund, also known as the Mackersy LFR Fund in early November. The new LFR seed asset will be Sylvia Park Lifestyle, which is our LFR property adjacent to Sylvia Park. The fund will be managed by Mackersy with Kiwi Property retaining property management and leasing of its contributed assets. Kiwi Property intends to maintain a long-term interest of between 25% and 50% in the fund with the fund intended to grow over time. This transaction highlights the benefit of our investment in Mackersy, which can provide us with new sources of capital to support our strategic objectives. The LFR fund structure will enable us to release approximately $53 million in capital upfront, maintain control of key land holdings within the Sylvia Park precinct and partner on any future potential LFR developments at existing Kiwi Property sites. Turning now to Slide 21. With asset sales providing some capital for reinvestment, we expect to commence several key development projects in the near term, subject to Board approvals and final designs. These projects include an Asian supermarket, a new pedestrian plaza at Sylvia Park as well as an expansion of available retail space at The Base. These initiatives will diversify our tenant mix, revitalize key precincts and create additional retail space to meet growing demand. The estimated spend for these projects is approximately $32 million. Moving now to Slide 22. At Drury, we are pleased to be able to announce 3 further sales of large-format retail land following the unconditional sale of 1.2 hectares to Foodstuffs in April. Earlier this month, we confirmed the conditional sale of 6.4 hectares to Costco Wholesale, a major international retailer. This significant agreement will serve as a catalyst for further development and growth at the site. This sale, along with conditional sales to the Briscoes Group and Harvey Norman, will provide capital for reinvestment. Together with the recent Stage 2 Fast-track approval, this validates the strategic vision for Drury as Auckland's next major metropolitan center. Proceeds from all sales to date totaled $115 million with settlement and profit recognition expected in FY '27 to FY '29. Stage 1 civil works and power connections for the large-format retail sections are underway, and Stage 2 has now been granted consent under the Fast-track Approvals Act 2024, increasing the consented developable area to around 140,000 square meters. Turning now to Slide 23. Our Drury development covers a gross land area of 53.3 hectares with total acquisition and development costs to date of $141.4 million. The current market value at September 2025 is $162 million with a salable land area of 39 hectares. CapEx remaining post 30 September is estimated around $161 million with an estimated completed value of around $387 million. And our capital allocation framework, the Drury project, is classified as opportunistic with a target IRR of 15% to 20%, supporting our long-term value creation strategy. And finally, over to Slide 25 for our priorities and guidance for the remainder of the financial year. Kiwi Property delivered a robust operating result in the first 6 months of FY '26 and delivered on our key strategic priorities. Heading into the remainder of FY '26, we will continue to focus on our 4 key priorities, which we know will make an impact. First, we will continue to efficiently manage the balance sheet. Asset sale proceeds will allow us to enhance our existing high-quality assets and progress other investment opportunities as market conditions allow, in line with our capital allocation framework. Secondly, we will continue to drive rental growth with a focus on maximizing the operational performance of our high-quality assets. Thirdly, we look to maintain strong discipline on costs and great progress made to date in this area. And finally, we will look to progress the Drury Stage 1 civil works, which will bring land sales closer to settlement. This follows the 4 large-format retail land sales we have achieved at Drury over the last few months. As a business, our goal is to deliver sustainable earnings and dividend growth for our shareholders. I'm pleased to reconfirm the FY '26 full year dividend guidance of $0.056 per share. This represents a 3.7% increase on the prior year, in line with our intention to continue to deliver dividend growth over time. Kiwi Property has made great strategic progress over the last 6 months, and we will continue to look for ways to add shareholder value over the rest of the financial year. Thank you for joining us today. That concludes our overview of Kiwi Property's interim financial results for the 6 months to 30 September 2025. Today's presentation, along with our FY '26 interim report, is available on the Kiwi Property website. I'll now pass over to the moderator who will open the phone lines for questions. Operator: [Operator Instructions] First question comes from Nicholas Hill from Craigs Investment Partners. Nicholas Hill: I'd like to kick things off with a couple of questions on the performance of your retail and mixed-use assets. Would it be possible to talk to what was behind the decrease in specialty sales per square meter? Clive Mackenzie: Yes, there's probably a couple of things that are driving that. The first one, obviously, the economic climate would be the obvious one. But the other thing is we've seen, especially at Sylvia Park and The Base, a lot of our previously categorized specialty stores go up to many majors as they've increased their store size. And so those sales have gone out of the specialty store sales numbers. Nicholas Hill: Okay. And then just looking at Centre Place North, I believe, was the Kmart lease renewal the main driver increasing income? Or has there also been a change in occupancy? Clive Mackenzie: Sorry. Are you talking about The Plaza or Centre Place? Nicholas Hill: Sorry, I got my wires crossed. What's the one with the Kmart renewal? Clive Mackenzie: We did the Kmart renewal at The Plaza. Sorry, what was the question? Nicholas Hill: Was that the main driver in the increase in rental income? Or has there been a change in occupancy? Clive Mackenzie: That was the main driver, yes. Nicholas Hill: Okay. And then I guess just to clarify something for me. You've announced that you're selling effectively a 50% interest in the Sylvia Park lifestyle asset to Mackersy Fund for $90 million. That equates to about $45 million, but you say that it will release $53 million from capital. Where does the other $8 million come from? Steve Penney: So the gearing in the fund is slightly higher. So that's -- we get proceeds from the sell-down, and then we [indiscernible] gearing [indiscernible]. Nicholas Hill: Okay. And then last one for me before I let someone else have a go. How is the inquiry going for the last 2,000 square meters of the Vero Centre? Clive Mackenzie: Great question. In fact, we're very close to securing another 1,200 square meters of space. We're just getting the lease signed at the moment, which will take us down to effectively just under a floor. Operator: Next, we have Bianca Murphy from UBS. Bianca Fledderus: First question for me is just on Drury. So given the conditional nature of the land sales, are you able to share what specific conditions remain outstanding and what the key risks are to settlement timing there? Clive Mackenzie: Thanks, Bianca. Obviously, with [ fall ] sales, there's a number of conditions that need to play out. Firstly, we obviously have to do all the earthworks in terms of putting in the roads and the infrastructure so we can get a title. And for some of the international tenants, they require OIO as well. So those will be the main conditions across those tenants here -- or buyer, sorry. Bianca Fledderus: Yes. Yes. Okay. That's helpful. And then just on the Mackersy Fund, could you talk about which other assets in your portfolio you see as suitable to be transferred to the LFR funds at some point? Clive Mackenzie: In terms of the assets that we have in our portfolio, there's probably potential new developments. So for example, at Drury, there is still some LFR land that we haven't sold that could potentially end up in the Mackersy LFR fund. Also, there's an LFR site adjacent to the IKEA development, which also -- one develop could also be sold into that fund as well. So those are some of the more immediate ones, yes. Operator: Next, we have Nick Mar from Macquarie. Nick Mar: Just in terms of valuations, sort of intriguing you've executed the lease renewal at ASB, but the valuation is sort of flat despite cap rates. Can you just talk what else has sort of gone on there? What it would [ imply ] is what you're spending is in line or more than what the value of the issued [indiscernible]. Clive Mackenzie: I'll kick off, and then I'll hand over to Steve. Effectively, the valuers haven't moved the valuation. They've looked at market evidence out in the market. And I don't believe that the current market evidence justifies movement in the valuation. So that's probably the first point. I don't know, Steve, if there's anything else you want to add to that? Steve Penney: It's probably market reads as well, Nick. Sort of a soft listing office market in the moment. Nick Mar: But I guess you've just reset the rent on -- and the value [ has moved ] the cap rate, which would suggest that they have viewed it as a more attractive asset than it was prior to the lease renewal, so it's just a little bit intriguing, but no, that's fine. And then with the sort of where you've kind of cut up the portfolio between core and noncore. What is the sort of process around the balance of the noncore assets and how you want to sort of exit these over time? Clive Mackenzie: Yes. So for some time now, we've obviously called out which assets we regard as noncore. Obviously, our intention is -- and again, as we have called out before, we want to focus on mixed-use assets in the Golden Triangle, which is obviously part of the [ capital ] sort of area where we see there's the most opportunity for growth. And so that will mean, over time, we'll move out of those regional retail assets and CBD retail, which is -- sorry, CBD office, which is not [ over ] core to our strategy. So we'll continue that process. Obviously, we've got [ The Base ] held for sale so that sort of signals our intent in that direction as well. Nick Mar: Okay. And the office assets, is that something that might be likely to help you with? Or those sort of [ outweigh ] sales? And particularly with ASB following the lease renewal, have you had much sort of unsourced interest in that? And are you going to progress that? Clive Mackenzie: In answer to the first part of your question, yes, obviously, Mackersy is open to office assets as well as they have a number of office assets within their portfolio. Given the size of our offices, it's most likely they will be to the broader market. And yes, we have had some initial interest in ASB, but still early days in terms of progressing that. Nick Mar: No, that's great. And then just on sort of the rent was down or the total rent went down. Can you just talk through that and talk to what the leasing spreads [indiscernible]? Clive Mackenzie: Okay. Our leasing spreads at Sylvia Park were actually slightly up. So I'm not sure which number you're looking at in terms of that. I'll just turn to the right number. So our overall rent reviews were sort of 4.1%, and leasing spreads were sitting at around 3.2%. Steve Penney: You're looking at Slide 27 at the rental income? Nick Mar: Yes, yes. There's a $1.9 million surrender fee last year, so you've got to adjust it and normalize it for that. Operator: Next, we have Rohan Smit from Forsyth Barr. Rohan Koreman-Smit: Can I ask a couple of quick ones? Just on the second half guidance, it implies a bit of a weaker half. I believe there's a bunch of maintenance CapEx that kind of looks pretty seasonal and incentives. I think last time we spoke, you said there was going to be a reasonable number this year, and it's obviously not in the first half. Can you just give us some color on those 2 lines? Steve Penney: Yes. Maintenance CapEx will probably tick up a little bit. And the challenge for the second half of the year from a leasing perspective is you lose 2 months to do deals. So kind of running out of time to put those deals and to do the debt upside. So that's probably what we're seeing at the moment. In terms of debtor things like that, that's really stable. The provision for debt review slightly what -- [indiscernible] slightly but everything else looks [indiscernible] So it's more about it's a timing issue with leasing. Rohan Koreman-Smit: Sorry. You're saying the whole movement is a timing issue with leasing? Is that how I should read that because you typically... Steve Penney: [indiscernible] Rohan Koreman-Smit: Do you have some color on that? And also the incentives as well? I get -- I feel like maybe there's something that you provided ASB given earlier comments on the building valuation that -- are you capitalizing incentives there? Or are you running them through your P&L? Steve Penney: Capitalized [indiscernible]. Rohan Koreman-Smit: And sorry, maintenance CapEx? Steve Penney: Sorry, maintenance CapEx. That's generally second half of the year as soon we expect to do that and spend a bit more. So it will be pretty consistent with last year, maintenance CapEx. Rohan Koreman-Smit: Okay. And then just on the seismic disclosures, looking at your financial reports, when you go to last year's one, you had $42.8 million as a net present value of the provisions in the valuations. But today, you're telling us it's $116 million. What happened between FY '25 and now in terms of more than doubling your seismic provisions? Steve Penney: You're talking about different numbers. One is the movements last year, and then we reported the total number. We've never reported the total number before. Rohan Koreman-Smit: Okay. So these movements for the last -- so '25, you added $40 million, and then '24, you added another 40-ish. So that's a cumulative number, not the total? Steve Penney: It's the change in the period -- over the period. Rohan Koreman-Smit: Yes. Yes. Okay. And then just thinking about gearing because you've got a bunch of asset sales and it's going to take a while for you to sell down this Drury land. Where is your kind of target for gearing? Are we still kind of in that 25% to 35% range? Is that where we should think about you're gearing long term? Steve Penney: Yes. So we can see with the CapEx we've got in front of us and the asset sales that we were targeting at the moment, we can see it [indiscernible] pro forma gearing [indiscernible]. Keeping in mind that the expenditure Drury is over quite a long period of time. Clive Mackenzie: Yes. And any additional asset sales over time would reduce that amount down for the year. Rohan Koreman-Smit: Yes, cool. And then just last one, and I know we probably agree and disagree on this all the time, but you comment multiple times that the Drury land sales will be used to fund project CapEx, yet you're running the profit through AFFO. Are you going to be running a lower payout ratio in the medium term to retain those earnings, so to speak? Otherwise, whilst the Drury land sales will fund the project CapEx, your dividend will be part funded by debt. Steve Penney: Yes, we expect the payout ratio to be lower if you included the jury earnings in that. Yes, that's correct. Closer to the time, we'll provide the market an update. Operator: [Operator Instructions] Next question comes from Arie Dekker from Jarden. Arie Dekker: Just starting with Resido, net rental income was $3.6 million for the half, and your effective occupancy was pretty high given starting point was, I think, 82%. Can you just give an update on where your sort of outlook is now that it's fully leased and the starting rents have come in for year 3 stabilized income, which, I think, last year, you sort of sized at about $11.2 million. Steve Penney: Yes, it's probably a little bit over double what it is now, closer to $8 million, I'd say. Arie Dekker: And in terms of year [ 3 ]? Clive Mackenzie: Well, that's in terms of this financial year, yes. This financial year. Yes. Arie Dekker: Yes. Yes. So in terms of like with the rental growth that you'd sort of be expecting, does that mean sort of your outlook now, say, in 18 months or so time at the 3-year point would be sort of closer to $10 million? Steve Penney: Yes. It's come back a bit. Yes, rental is a softer market, but we expect it to pick up again [indiscernible] [ the market cycle. ] Arie Dekker: Okay. And then just in terms of the ASB, which has sort of come up in a couple of other threads of questions. I see in the commitments that there's a $22 million commitment -- future commitment for ASB North Wharf. Can you just sort of talk a little bit about the nature of that and over what time period that $22 million will be incurred? Clive Mackenzie: It's over the next couple of years, and it's -- there's some tenant fit out in there. There's some baseball works as well for additional space. There's a little bit of spend on green. Yes, there's bathrooms. Yes, it's basically -- it's a refresh of the tenancy for the next lease term, yes. Arie Dekker: Okay. And then just in terms of Vero, which is also going, I guess, through a bit of a partial renewal cycle, commitments there, $12 million. Is that sort of over a similar period as well, sort of next 12, 18 months and sort of associated with CapEx and also some incentives or CapEx only? Clive Mackenzie: That's sort of over the next 12 to 18 months, as you call out. And that's -- there's a combination of upgrading works as well sort of the entry lobbies in the trip and some CapEx as well. There's no incentives in that number. Arie Dekker: Great. And then just the last one for me. I mean I know it's a relatively small asset. I think you sort of paid $27.5 million for it 4 years or so ago. But the site that the city Impact Church used to occupy, what's sort of the future for that site now that you've sort of sold down an interest in the lifestyle asset? Clive Mackenzie: We're actually very close -- we're very close to finalizing a lease for the office space in that tenancy. So that vacant space will come out. But it's an asset which, over time, we may look to down weight our ownership of with regards to Mackersy into the LFR fund potentially as well, yes. Arie Dekker: All right. Kind of go down the way of the lifestyle asset. That's good. Operator: Thank you. Thank you for all the questions. This concludes today's Q&A session and the conference call. Thank you for participating. You may now disconnect. Have a great day.
Operator: Good day, ladies and gentlemen, and welcome to the Old Mutual Q3 Voluntary Update [Operator Instructions] Please note that this event is being recorded. I will now hand you over to the Head of Investor Relations, Langa. Please go ahead. Langa Manqele: Thank you very much, and good afternoon to everyone who's joining us, and good morning to those who may be dialing in from the space. My name is Langa Manqele, as introduced. I head up Investor Relations. On the call with me is Jurie, our CEO. He will be leading the call, and Jurie will be assisted during the Q&A and comment session by Casparus, our CFO; as well as Ranen Thakurdin, who is presently our Chief Accounting Officer. I will now turn over the call over to Jurie. Thank you. Johann Strydom: Thanks, Langa. Good afternoon, everybody, or good morning [indiscernible] good to be with you. I think I'm sure you have in front of you the operating update that we put out on the 18th of November. So maybe just by intro from my side, it's been -- I think we had our Capital Markets Day towards the end of October, where we put out the important metrics that we're measuring ourselves on and be reporting on going forward in our medium-term targets. We're not reporting on those metrics in this operating update. But as we put -- as we made clearly the update that from next year onwards, from sort of Q1 numbers onwards, we will be reporting on those. I think internally, since the Capital Markets Day and as we head towards the end of the year, the focus has moved, I think, about as we spoke around taking those targets and operationalizing them into the business planning process. We've managed to catch the planning cycle to be able to do that as well as the scorecarding process. So very much moving from sort of strategy into execution. And so that's the focus, internally, as we ahead towards end of the year. I think just a couple of comments on the operating update we put out. And I think you will have noticed that there's not major changes from the trends that we reported at the half year. So the Life APE sales continuing to, fall by 1% and gross flows flat. A decline in net planned client cash flow for, again the reasons that we reported half year, particularly in the low margin outflows and investments and single big outflow had an impact there. Gross written premiums on the noncovered side are at 5% on the P&C side. And loans and advances also 1% down impacted, there of course, there was a sale of underperforming loan book impact on that. So those are the metrics that we put out there. I think Langa, I'm happy to go to questions for the conversation. Langa Manqele: Thank you very much, Jurie. Judith, kindly open up the call. I do not see yet the queues on the Q&A. Please confirm on your side if you do. But otherwise, if you could just remind the participants on how to put in their questions through. Operator: [Operator Instructions] Our first question comes from Baron Nkomo of JPMorgan. Baron Nkomo: Just 2 questions. Firstly, are you able to give some color on the evolution of your CSM since June 2025? And then secondly, can you comment on Old Mutual Insure's underwriting performance so far in H2 relative to the strong first half performance we saw. Langa Manqele: Thanks. Thank you. Over to you. Casper Troskie: So on the CSM, unfortunately, I'm not able to give you more color on the evolution of CSM since the half year. We'll obviously be able to give you full reconciliation at the year-end. I was trying to assure underwriting margin, we haven't seen any material impacts that still show positive margin, but we obviously reported a very high number at the half year. So I would expect that to normalize more to within our updated range or at the top end of our updated range. Operator: The next question comes from Harry Botha of Bank of America Securities. Harry Botha: Can you comment on the Life APE sales that you're seeing in Personal Finance, excluding guaranteed annuity sales? And you also noted strong growth in retail gross written premium in Old Mutual Insure, if I understood correctly. H1 was up 5%. So it sounds like growth has increased. Can you comment on what's driving that increase? Casper Troskie: Well, your comments specific to -- I'll just deal with it. I guess if do you look at the Personal Finance sales, guaranteed annuities were down close to 40%. So it's the majority of the reduction -- overall reduction [ in 9% ] that you're seeing period-on-period. So that's what's driving that. We are seeing -- we saw a slight uptick in the recurring premium sales. So the biggest move there is guaranteed annuities [indiscernible] pulling the piece of [indiscernible] your second question? Harry Botha: Just regarding the gross written premium in retail segment within Old Mutual Insure, it sounded like it was up more than 5% at June. Casper Troskie: I'll just check on that and come back to you. We can go to the next questions. Operator: Our next question comes from Bradley Moorcroft of Peregrine Capital [Operator Instructions] Our next question comes from Francois Du Toit of Anchor Stockbrokers. Francois Du Toit: Can you hear me? Johann Strydom: Yes. We can. Francois Du Toit: Can you maybe comment on your solvency level, maybe just directionality in the quarter and maybe factoring in buybacks as well. I know you don't like telling us whether you're buying back or not and whether you like the price to buy back or not. But maybe if you can just give a sense of how much you executed in the last quarter on your buybacks? That's the first question. Obviously, that's the solvency level will be a function of that, I guess, as well. Your -- second question, your gross flows, I think, was quite a bit stronger at the half year in terms of percentage growth. Maybe just comment on the reasons for the slowdown. I think you've mentioned the annuity sales, but it seems like there's a further slowdown there since the half year. But nonetheless, the net flows improved from the half year to outflows, but it's not as big outflows level as we had at the half year. So maybe can you just comment on your persistency or client retention in the light of better net flows and whether you're seeing positive lapse experience variances or improved levels compared with the half year. Just a sense of what's behind the improved net flows and weaker gross flows. Casper Troskie: Okay. Let me go to solvency levels first. So Francois, what we -- last I looked, we had done just over 10% of the buyback, and we are obliged to on a regular basis publish what we've done. So that's in the market. So if you just look out for those, you'll see that. And then in the quarter, in terms of solvency ratios, I would expect most insurers have seen a decline in their solvency ratios given the fact that the pre-strike equity shock increased in that quarter. I think it is increased by about 4%, 5%, which means your capital requirements for any equities that you are holding on -- whether they will have gone up. So -- and at an all-time high, I think that the 1% away from the top level of stress that there can be. So I would have expected and we correspondingly, we've seen a reduction in [indiscernible]. Ranen Thakurdin: Just to add to Casper's comments, the share buyback was fully allowed for in the -- as a reduction to funds in our interim numbers. So as we execute the buyback, it won't affect our solvency ratios. Casper Troskie: Okay. On the second -- on gross flows, the second point actually you're right. So the -- the Old Mutual investments had a higher base in quarter 3, 2024. So this year, we are -- so comparing against the higher base that's impacted from the current year growth. And then as we said earlier, we had much lower fee from inflows to the points earlier we made. But we also had muted inflows in wealth, whereas wealth was a really strong performer last year. So we've seen muted inflows in wealth. Hopefully that helps. So overall, [indiscernible] savings were down 1% from a gross flow perspective, and that's the main reason in Old's Mutual investments down 18% from the prior year. Unknown Executive: And just to confirm earlier question, the 5% gross written premium growth of Old Insurance the retail growth rate was quite similar to the total. Operator: Next question comes from Marius Strydom of Austin Lawrence Gidon. Marius Strydom: My question is about OM Bank. At the open day or the Capital Markets Day, you mentioned you had 145,000 clients and you were adding 5,000 a day. So could you please give us some indication of whether you've seen that kind of daily addition maintained since the Capital Markets Day or whether it slowed markedly or any other information you could provide us around your traction? Casper Troskie: So Marius, I think on the weekend, I think to note that we were about 200,000 and that run rate is going at about 300 accounts a day. Operator: Our next question comes from Bradley Moorcroft of Peregrine Capital. Bradley Moorcroft: Can you hear me now? Casper Troskie: Yes.We can. Bradley Moorcroft: Sorry about the issue earlier. Also a question on Old Mutual Insure top line. I noticed that the growth has slowed from 9% at interims to 7%. I mean any further color you can give there in terms of the slowdown, persistency challenges, increased competition would be very helpful. Langa Manqele: Over to you, Casparus. Casper Troskie: I'm trying get a performance [indiscernible] . Langa Manqele: I will come back to you with that detail. Judith, may I check are there still any questions? I can see anyone who is on the queue at the moment. Operator: No, sir. At this point, there are no further questions in the question queue. Langa Manqele: Okay. Thank you very much. I will hand back over to you, Jurie, just to -- I think there's one question that I see. Judith, please check, I think it's right. Operator: Yes, correct [indiscernible] of HSBC. Unknown Analyst: I just had a question probably not related to Q3, but are you planning to take any restructuring charges in relation to your cost program? And will any of that be allocated to full year '25? Casper Troskie: Just to understand correctly. You asked whether we are going to be adding any further restructuring provisions. Is that the question? Unknown Analyst: Correct. Casper Troskie: To the extent that you have to meet quite a lot of conditions to have a restructuring provision. So if you've met all the conditions that are required at year-end for a restructure, i.e. you've identified people, you've made the announcements, then it can be accrued for the year-end. If you're not in that position, you have to incur the cost when you actually do that restructure. So there will be additional costs in the second half relating to headcount reduction, but those have largely been dealt with. So I'm not expecting a large provision outstanding at 31 December, i.e., a restructuring provision for future costs. We'll see the one-off costs coming through in the second half. I hope that helps. Langa Manqele: Thanks, Casper. Could you please just do a final round and check if we have any questions left and let's take those. Operator: [Operator Instructions] We have a follow-up question from Harry Botha of Bank of America Securities. Harry Botha: Just a follow-up around the loan growth issue. I think you noted the sale that had an impact on growth. What is your outlook for growth? How quickly do you see loan growth in Old Mutual Finance improving? Langa Manqele: Than you. Over to you Casper. Ranen Thakurdin: Yes. So Harry, as we mentioned earlier, part of the reason that the loan balances are flat as we were exiting specific pieces of the book. We are expecting to see better growth rates coming out of our loan book as we still very responsibly improve our lending. So we are maintaining tight credit criteria, but we do expect that book to grow going forward. Langa Manqele: Operator, kindly check if we have any outstanding questions. Operator: Our next question comes from Jarred Houston of All Weather. Jarred Houston: Just checking you can hear me? Casper Troskie: Loud and clear [indiscernible]. Jarred Houston: Thanks for the update. Just a question on your investment result, your shareholder investment return. Obviously, in the first half saw a very strong number. Is it fair to assume just given what's happened with markets both locally and in the rest of Africa as well as bond yields, it's fair to assume current run rate is a continuation of that strong trend. Casper Troskie: Yes. I think it's fair to assume. Investors should just recall that we do have collars around -- so we have a protected equity structure. So upside is limited, but we do try and roll those collars on a regular basis in tranches to manage the position over time. But, yes, you should still see strong investment performance coming through in line with the markets... Langa Manqele: [indiscernible] it sounded like you're going to ask a follow-up? Jarred Houston: Yes. Langa, just the comment earlier about the progress on the buyback. I just want to clarify did Casper say only 10% of the buyback has been completed. And then just a question mark on -- we've obviously seen quite a big step-up in market volume as a result of an index outflow. Is the group participating in the higher level of market volume? Or is it just slowly ticking away over time. Langa Manqele: Casper, would like to comment? Casper Troskie: Yes. So obviously, we would participate in the higher market volume, if that's consistently happening. We set -- we have to work within the limits. As an issuer, there are limits around -- so we can't move the market [indiscernible]. So we have to work within those limits. And then we have -- we're doing this buyback with this mandate with 1 or 2 of the large banks. So they have specific parameters to work with them. The 10% was a few weeks ago that might have gone up in the last week or 2. Ranen Thakurdin: Just over ZAR 400 million at the moment. Langa Manqele: Thank you, Casper and Ranen. Operator, I'm comfortable that we round up and maybe take 1 last question. Operator: Final question comes from Marius Strydom of ALG. Marius Strydom: Firstly, your South African Asset Management performance in the third quarter versus the first half. Considering higher AUMs at 30 June and continuing strong market performance, should we expect a decent acceleration in your earnings run rate since the half year? And then the second question, considering the lapse assumption changes that you made and the management actions that you've taken, have you seen some improvements in your lapse experience at MFC? Johann Strydom: Marius, just to remember, very small part of that base is equity half. So really, you're looking at sort of a balanced mandate. The assets that you have, for example, like, we're seeing pressure on credit spreads. So the origination targets are quite there might but on the flows. And then the alternatives, you're looking at much longer valuation cycle. So I would expect the force to increase in the third quarter, but there are quite a few moving parts. Ranen Thakurdin: So Marius, just remember that most of our IFRS 17 products on BFA, we get value in the equity market that goes to the CSM that, it doesn't drop through to earnings. So you will see that largely coming through in the CSM. Marius Strydom: My question is really related to the asset management businesses. So those that are not -- don't form part of the CSM. Langa Manqele: Thank you, Casper. And thank you, Ranen. Marius Strydom: Sorry, Langa, there was 1 more question. Johann Strydom: Sorry, Langa, there was a question from Marius, on MFC persistency. I mean we obviously are progressing with the management actions, but I think it's too early to call a material improvement yet. Langa Manqele: Operator, I don't see any questions I'm comfortable to wrap up here and hand back to you, just to wrap up the call for us. Thank you. Johann Strydom: Okay. Well, thanks for being with us, everybody. Yes, I think there were 1 or 2 questions which we're happy Langa to get back to the individual. But for the rest, thanks for the conversation. Yes, I suspect our next conversation will be in the new year. Langa Manqele: Thank you very much. Operator: Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us, and you may now disconnect your lines.
Matias Cardarelli: Good morning, everyone. It is a pleasure to share PPC's progress at the halfway point of our FY '26. Results to date reflect not only continued progress, but also building on the foundations cemented last year, driving sustainable growth and operational improvement. I want to extend a warm welcome to all of our investors, our Board, employees and members of the media as well as other stakeholders who have joined us today. Your ongoing support and confidence in PPC remain critical as we advance our turnaround journey. Brenda Berlin, our CFO, and I will share the first half FY '26 financial results, key highlights of the year and progress on our strategy implementation. I will start with the business highlight, followed by Brenda's review of the financials. Then I will return for the business review and outlook. We will have time for your questions at the end of the presentation. Last year, we presented a new direction for PPC, a fundamental shift in the group's strategy, culture and focus areas. Steadily and consistently, we have been rebuilding PPC. FY '25 marked the beginning of this pivotal chapter for PPC in which we implemented structural improvements and delivered a strong recovery in our financial performance. This strong momentum has continued into FY '26. Central to this transformation is our turnaround strategy, Awaken the Giant. It is ambitious by design and grounded in the confidence that our success would come from internal drivers regardless of macroeconomic or competitive pressures. By unlocking internal value and sharpening our competitiveness, we have laid the foundations for growth and sustainable value creation, which is reflected in the numbers over the last 18 months. I believe our message might have been difficult to grab at first, but we believe it has led to a better understanding of our industry and business drivers. Clarity matters to both understand what is driving our current results, but also the PPC potential. PPC was struggling for relevance and stuck in a negative and confusing narrative. This remains, to some extent, in the sector today. Our results are becoming a reference point in the sector as a consequence of our focus on profitability and value to shareholders. We got off to a strong start in FY '25. And now in the first month of FY '26, we continue to deliver ahead of our FY '25, FY '30 strategic plan. This progress is evident in profitability, margin and cash flow generation. It is also clear in the significant increase in return on invested capital, reflecting a clear shift towards shareholder return and growth. Importantly, the quality of our earnings. This means that our performance is underpinned by solid fundamentals, sustainable margins and prudent capital allocation. This guarantees that the growth is achieved responsibly and maintained over the long term. This is PPC today, delivering ahead of plan with quality earnings and definitely more to come. Let me make a moment to highlight what truly sets PPC apart in our markets. Why is PPC delivering the best in sector results? From the beginning, we stated that our focus was on the quality of revenue, ensuring margins that they are both leading and sustainable. A purely revenue-driven approach might deliver short-term gains. But in a competitive context, it becomes a race to the bottom that erodes margins, value and risk the sustainability of the sector. Instead, we leverage our competitive advantages to deliver value to customers through high-quality products rather than only competing on price. We can also leverage our unique footprint, capacity availability and asset flexibility to allow access to key regions and markets. On top of this advantage, our focus has been on optimizing our production and distribution model. This enables us to plan and realize more effective contribution margins, ensuring that every sale brings the most value. Continued capital investment in our assets is another clear differentiator, one that sets us apart now and will have an even greater impact in the future. In a competitive market, we know that technology, asset age and maintenance are critical for margin enhancement. We continue to invest in and maintain our assets to enhance capacity and efficiency. Well-maintained assets and the newest technology position us strongly for growth and further competitive advantage. When it comes to product offering, I want to address an important aspect of our business related to our competitive position in our markets. Firstly, PPC operates in all cement segments across most regions. This allows us to stand out in the marketplace and attract a full range of customers. We are a premium brand because we are a premium quality. Our premium quality is matched by our ability to scale, guaranteeing supply and consistency to meet the diverse needs of our customers across all segments. Finally, our management team brings over 100 years of combined cement industry experience, both locally and internationally. This depth of expertise in our first and second line of management allow us to execute effectively on our strategy. Looking at the results for the 6 months ended in September 2025. You can clearly see the positive impact of the turnaround in all key metrics. When we launched the Awake in the Giant strategy, we set out clear metrics to define sustainable success and unlock future growth. Those were EBITDA, EBITDA margin, free cash flow and ROIC. The combination of these indicators determines quality earnings and shareholders' returns. We keep progressing in all of them. EBITDA has grown 24% to ZAR 983 million. EBITDA margin expanded by 2.6 percentage points to 18.3%. Free cash flow from operations surged 32% to ZAR 661 million. Record dividends declared for Zimbabwe, reaching USD 20 million from USD 4 million last period. And lastly, ROIC improved significantly to 13.4% from 7.1% last period. What is driving these results is the cumulative effect of multiple initiatives, building on the momentum established over the past 18 months. These continuous improvement efforts are already delivering and importantly, are expected to have an even greater impact going forward. The growth in the first half results is especially noteworthy because it was largely driven by our South African cement business, which expanded EBITDA by over 30% with an EBITDA margin of 17.5% -- in Zimbabwe, a very high demand boosted volumes, revenues and EBITDA. However, the planned kiln maintenance shutdown in Q1 increased our reliance on imported clinker, which temporarily impacted our margins. Overall, the business generated record cash flows, driving higher dividends. In summary, we delivered quality earnings growth, strong cash generation and improved returns. I will hand over to Brenda now to cover the financial review. After that, I will deal with the business review and outlook. Brenda Berlin: Thank you, Matias, and good morning, ladies and gentlemen. Matias has already touched on some of the key metrics. But as usual, I will start with reemphasizing some of the key features of the consolidated group, followed by some more detail on the SA & Botswana Group and then Zimbabwe. I will then close on capital allocation, capital expenditure and returns to shareholders. Moving to the consolidated group key features. Group revenue increased by 6.2% to ZAR 5.4 billion. I will go into a little bit more detail later as to the split of this increase across the SA & Botswana cement, materials and Zimbabwe. The increase in revenue, combined with continued cost control resulted in the expansion of the EBITDA margin by 2.6 percentage points to 18.3%. The increase in EBITDA by 23.5% to ZAR 983 million is also reflected in the 32% increase in adjusted headline earnings per share. The pro forma adjustment relates to adding back the unrealized foreign exchange losses on hedging instruments taken out to derisk PPC's balance sheet from rand weakness in constructing RK3. The group continued investing in equipment and spent ZAR 225 million on CapEx during the 6 months, almost all of which was maintenance expenditure. No expenditure was capitalized for RK3, but there were advanced payments totaling ZAR 317 million in the period, which are reflected in working capital. Adding back the ZAR 317 million paid to RK3, net cash inflows from operations increased significantly from ZAR 500 million in the comparable period to ZAR 661 million in the current period, an increase of some 32%. The ROIC of the group expanded by 6.3 percentage points to 13.4%, which is well ahead of the plan. Before going into the income statements of the respective businesses, this slide just sets out some key points to contextualize the results. The SA operations had a strong performance with EBITDA increasing by 36%. The Zimbabwean operations had an extended planned shutdown of the kiln in Q1 of the current period. Matias will go into more detail on these 2 points in the business review. Notwithstanding the Q1 shutdown, PPC Zimbabwe generated strong cash flows and declared $20 million in dividends during the 6 months. This compares to ZAR 4 million in the prior period. As mentioned already, we paid ZAR 317 million in advanced payments for RK3. The unrealized foreign exchange losses that are adjusted for in the pro forma HEPS amounts to ZAR 54 million after tax. The SA & Botswana Group ended the period at a gearing ratio of net debt to EBITDA of 0.1x, well below the target range of 1.3 to 1.5x. This slide sets out the key line items on the consolidated group income statement. Before going through the numbers, an overall point is that it is worth noting how clear and simple the income statement is now. It is significantly less confusing to go from EBITDA to profit after tax. A few years ago, there were no less than 9 line items below trading profit compared to the current 4. It is much easier to manage and understand a clean income statement. As mentioned, I'll cover both the SA & Botswana Group and Zimbabwe in a bit at the EBITDA level. The absolute increase in EBITDA of ZAR 187 million is reflected in an increase in trading profit as depreciation was almost flat over the 2 periods. Moving on to some relevant items below the trading profit line. The fair value and foreign exchange losses in the current period include ZAR 74 billion pretax unrealized foreign exchange losses that I've already talked about regarding the pro forma HEPS adjustments, ZAR 34 billion in realized FX losses on the advanced payments made for RK3 and ZAR 15 million loss on translation of foreign currency-denominated monetary items for PPC Zimbabwe and PPC Botswana. Net finance costs reduced by ZAR 15 million. Finance costs themselves reduced as we had both lower borrowings and lower interest rates compared to the prior period. Investment income or interest received also reduced due to lower average cash balances. The cash proceeds received on the sale of the Rwandan operation were held for almost the entire period before a special dividend was paid out in September 2024. Closing this slide with the effective cash tax rate of 33%. This is in line with the prior period and previous guidance. The single biggest item in the current period that increased the effective rate from the statutory rate of 27% is withholding taxes paid on dividends declared by PPC Zimbabwe. This is the final slide of the consolidated group. As usual, it depicts the contribution to both revenue and EBITDA by the SA & Botswana Group and PPC Zimbabwe, respectively. The numbers inside the wheel depict the current half year percentages with the prior period shown on the outside. As can be seen, the relative contribution from the SA & Bots Group at a revenue level declined by 5% from 70% to 65% and increased by 6% at the EBITDA level. I will now move on to give an overview of the SA & Botswana Group, followed by Zimbabwe. The SA & Botswana Group is an aggregation of 3 components, with the main driver being SA & Bots Cement. The materials businesses comprise ready-mix, ash and aggregates with PPC Limited and other being essentially listed company overhead. Matias will go deeper in the business review, so I will just touch on a few key features on this slide. Regarding South Africa and Botswana Cement, strong growth in Q2 followed a weather disrupted Q1. The focus remained on contribution margin and cost efficiencies, resulting in a very sound 31% EBITDA growth. The Materials segment shows a significant but not material decline in EBITDA. The EBITDA for the aggregates and ready-mix businesses were more or less flat compared to the prior period with the ash business responsible for the overall decline. Volumes in the ash business declined by 42% compared to the prior period. Dealing with PPC Limited and other, in the prior period, all of the centralized group services costs were in the segment. As of 1 October 2024, all group services staff were transferred to SA Cement being the main reason for the improvement in cost in the segment. On the next slide, I will deal with the cash flow bridge for the SA & Bots Bo Group, but the gearing being net debt to EBITDA remains very low at 0.1x. To remind you, it is expected to peak for 1 year in FY '27 when the construction of RK3 is largely completed. In this peak funding year, we expect to be below 2x when the required net debt-to-EBITDA covenant is 2.5x. Dealing now with the SA & Botswana Group cash flow. What is shown on the slide is the waterfall for the current period up to in the first instance, net cash generated by the core business of ZAR 256 million. Dealing with this section first. What you can see is strong operating cash flow before working capital changes of ZAR 584 million, a small working capital release of ZAR 11 million, bearing in mind the ZAR 410 million reduction in working capital for the year ended 31 March 2025. Taxes, CapEx and other core operational business activities are then depicted to arrive at the net cash generated. What is shown after net cash generated are nonoperational items with the material items being essentially, the investment in RK3 is showed at ZAR 351 million, being both the advanced payments and realized ForEx losses. Dividends received from PPC Zimbabwe of ZAR 211 million versus PPC share of the USD 12 million paid in the current period with a further $8 million being declared, but only paid subsequent to 30 September. Distributions to shareholders in the current period of ZAR 274 million being the ZAR 0.176 per share declared in June 2025. Overall, net cash decreased by ZAR 193 million in the current period, leaving gross cash at ZAR 543 million at 30 September 2025. Drawn long-term facilities remain at ZAR 500 million, plus ZAR 2 million in accrued interest, which leaves net cash at ZAR 41 million at half year-end. The reason for the small gearing ratio on the previous slide is that capitalized leases have to be deducted as debt for the gearing covenant. Set out on this slide are the key metrics for Zimbabwe. We keep this slide in U.S. dollars so that you can see the numbers in PPC Zimbabwe's functional currency. There was a strong increase in sales revenue of some 25%, which is in line with volume increases as demand remained high. Q1 margins were affected by the need to import clinker during the planned shutdown, but exceeded the prior period margin in Q2. CapEx increased by $2.3 million due to the extended Q1 shutdown compared to a much shorter stop in the comparable period. Record dividends declared of $20 million. As I mentioned on the previous slide, $12 million was actually paid in the current period with PPC share of the remaining $8 million received in November 2025. Repatriation of dividends remains consistent. Cash balances at the end of the period was strong at $14.4 million, 96% of which is in hard currencies. We are progressing steadily on the conditions precedent to the sale of the Arlington property transaction. Moving on to the last slide on capital allocation now. On the left-hand side of the slide, you can see the actual CapEx spend for the group over the last 2 years. The forecast spend for FY '26 is also shown. The budgeted ZAR 450 million for the group in FY '26 includes some catch-up on value accretive and reprioritized projects deferred from FY '25. This increase on the actual FY '25 spend is almost all attributable to the SA & Bots Bulks Group. The spend on RK3 has commenced. The previous forecast spend for this FY '26 was ZAR 1.18 billion. And as you can see, this has reduced to ZAR 920 million due to timing adjustments. Return on invested capital, or ROIC, remains a key focus, and all expansion capital has to meet stringent criteria. The ROIC for H1 FY '26 is set out on the top right and has consistently improved since 30 September 2024 when it was 7.1% and 10.6% at 31 March 2025. We expect ROIC to weaken in the short term being H2 FY '26 and FY '27 as CapEx is spent on RK3 with no associated return. Thank you. I will now hand you back to Matias for the business review. Matias Cardarelli: Thank you, Brenda. Before we dive into the business review of the period, I want to take a moment to reflect on what has enabled us to deliver these results. From the very beginning, our top priority was to build a strong foundation for PPC. This meant a fundamental change to the core of the organization. I was very frank about the scale and gaps we found from the organizational culture to governance, controls, management information, people skills and importantly, leadership from the top to the various level in the company. Difficult decisions were necessary and were indeed taken. It was the only way to turn around PPC. In my view of leadership, bridging the gap between words and actions is essential. Authenticity and accountability are not buzzwords. They underpin trust. PPC's leadership team is committed to transparency and delivery. In this context, we act quickly and decisively. We address long-standing issues, brought in critical expertise, strengthened processes and controls and realign priorities to ensure a focus where it matters most. These actions had an immediate impact in all areas of the organization and meaningfully improved the financials. While this process is far from being completed, we have made good progress. This year, we conducted a pulse survey on employee engagement. The survey was designed to capture the voice of employees, providing a clear understanding on how the turnaround is being experienced across the organization. In the context of change, it was vital to understand the general sentiment. Participation was very high at 93% and feedback was extremely positive regarding the need for the turnaround, belief in the strategy and confidence in leadership. This alignment between management and our teams ensures the sustainability of the turnaround process. On the back of the positive trajectory established in the last financial year, in FY '26, we needed to deliver consistent and sustainable progress across the business. I am pleased to report that our group results reflect this. As I mentioned before, the key highlights of the current results is the sustained growth trajectory with expansion across all the key financial indicators. In the first half of FY '26, the main driver was the solid performance of our South African cement business. The second leg of our performance was in Zimbabwe, with EBITDA increasing and EBITDA margin recovering strongly in Q2. As we presented before, the Awaken the Giant turnaround is anchored by 4 key pillars and 8 supporting commitments. We track performance of these initiatives, both at operational level and at [ESCO] level to embed these priorities into our company DNA. While we have made progress across all 4 areas, there is still room for improvement. Two areas have developed faster and continue to gain traction. Regarding the Less is More pillar, simplification and standardization are delivering value and a new wave of initiatives will bring additional gains as we further optimize our production and sales mix. The cost mindset pillar has had a radical impact from the beginning with strict control over noncore expenses, overheads reduction and supply contracts renegotiation. Importantly, this cost discipline is expanding and will have a compound effect in the periods ahead. The operational turnaround, even with a well-maintained asset base takes more time. We are progressing and taking firm steps. We are now in the first year of our 3-years plant performance improvement plan, which has established benchmark metrics, clear targets and robust actions plans. The supply chain area is more advanced and continues to drive results. The in-source new logistics area continues to deliver material savings. The centralization of procurement last year, coupled with streamlined processes is transforming procurement from a reactive function to a proactive driver of cost savings and working capital efficiency. On the commercial pillar, as I mentioned before, the progress will go hand-in-hand with our competitiveness evolution. As our competitiveness improves, we are increasingly able to roll out our commercial strategy. We have started to combine higher revenue with growing margins. Market share at all costs has never been and will never be our strategy. The giant is moving, powered by productivity and efficiency gains, disciplined product mix with savings being realized throughout our cost base. Let me take you through the results per segment and introduce the operational metrics driving our business performance. Turning now to the South African cement business that delivered remarkable positive numbers. In the context of a low growth market and intense competition, our performance marks a material improvement driven by consistent execution and clear focus. EBITDA growth of 31% period-on-period and EBITDA margin expansion to 17.5% are particularly noteworthy. When it comes to revenue, we must clearly separate the 2 quarters of the period. In Q1, the abnormal and persistent rainfall affected both sales and production in our Slurry and Dwaalboom plants. In the second quarter, we saw a strong rebound of our sales across key regions, such as Mpumalanga, Limpopo and the Western Cape. Overall, cement sales grew by 2% due to a strong 10% increase in the second quarter. This growth not only reflects pockets of higher demand, but also demonstrates our improved competitive position and ability to recover market share profitability. Our operational discipline is evident in the 5% reduction in cash cost per ton. To secure contribution margin per ton and gross margin growth, the cost management in place was critical and marked by tight control of variable and fixed costs, outperforming inflation, significant logistics savings after in-sourcing the function and continued overhead savings. Following the quick wins achieved in outbound logistics with a rand per ton per kilometer cost reduction of 14% in FY '25, in H1 FY '26, we delivered a further reduction of 13% comparing to the previous period. It is noteworthy that we have more logistic initiatives planned to benefit FY '27. On the operational front, we have seen real progress, driving both lower variable cost and carbon emissions, including higher production levels of clinker and cement in our integrated plants, lower clinker incorporation and a 3 percentage point improvement in the kilns OEE. In short, a very positive performance and trajectory in South Africa. Turning to our South African material business. Overall, revenue declined by 7% to ZAR 494 million. EBITDA was ZAR 14 million down from ZAR 28 million in the same period last year. The reduction in EBITDA was driven by the ash segment. The ash segment with volumes down by 42% period-on-period continues being impacted by some of our customers moving to low-quality unclassified ash. In ready-mix, period-on-period, volumes fell by 8%, mainly due to adverse weather condition in Q1. We are seeing projects ramping up towards the end of the second quarter. Aggregates, on the other hand, delivered positively with volumes up 11% period-on-period. However, the cost improvement were offset by an increase in a noncash rehabilitation provision, leaving EBITDA flat comparing to the prior period. Turning to Zimbabwe. In the first half of the year, we continue to deliver EBITDA growth and record level of cash generation, underscoring the strength of our business and the potential of the market. Revenue for the first half surged by 25% to USD 106 million, reflecting a robust market demand. The demand for cement is high, and PPC is uniquely positioned to supply into this growing market. With our premium brand, national footprint and the full range of product, we are able to deliver consistently to our growing customer base. EBITDA grew by 13.6% to USD 25 million with an EBITDA margin of 23.6%. EBITDA and EBITDA margin strengthened considerably in Q2 and have remained strong. The previous year assessment of root causes of the operational inefficiency and unplanned stoppages led to a target 3 years plan to improve equipment reliability at our Colleen Bawn plant. These root causes do not need to be addressed only with CapEx, but with planned maintenance and the right expertise. To this point, PPC Zimbabwe has entered into a technical agreement with Sinoma overseas to strengthen our local capabilities. The Q1 Colleen Bawn plant stoppage was the commencement of this 3 years plan. This stoppage in a context of a very high demand lead to a higher consumption of imported clinker and consequently, higher cash cost per ton of cement. Since then, operations have normalized, and we are operating at our expected margins. The recent introduction of slag-based product is also already having a positive impact. The reduction of clinker content by 5% to 10%, depending on the product support cost efficiency, brings additional cement production capacity and reduce CO2 emission. In summary, Zimbabwe remains a strong contributor to the group, and we are well positioned to continue benefiting from a high demand context. Again, I will share my confidence in our turnaround process. This early delivery in FY '25, combined with compound momentum in H1 FY '26 has only strengthened that confidence. As we look ahead of FY '26, our message remains unchanged. We started this year with a strong foundation, and we are determined to build on that success. The Awaken the Giant strategy remains solid. In South Africa, relative to the prior period, we expect EBITDA to maintain a growth trajectory in the second half of FY '26. This is particularly significant given that we will compare against an outstanding H2 in FY '25, which we saw over 80% growth period-on-period. Our commitment to cost discipline and quality revenue growth will sustain this positive trend. In Zimbabwe, we anticipate another record year with EBITDA expected to surpass last year's high and additional dividends are projected in the second half of FY '26. As I mentioned, the market is very active, and we are focused on capturing this demand. Importantly, certain key projects will also go live in FY '26 and further progress will be made on our strategic initiatives. These investments are designed to unlock new value, drive efficiency and position us for both short-term gains and sustainable growth well into the future. As Brenda highlighted, the discipline in capital allocation will remain, ensuring a solid balance sheet and financial resilience. In summary, both group EBITDA and EBITDA margins are expected to increase in FY '26 from FY '25 levels. The giant is not just a wake, it's moving with a clear direction. As I mentioned, we are also getting real traction on strategic projects. These are not longer just plans for the future. They are becoming the reality of a more efficient, environmental-friendly and sustainable PPC. Alongside our turnaround initiatives, we have been diligently implementing structural projects that are reshaping PPC. Let me start with our new solar project, which perfectly align returns and environmental sustainability. In South Africa, we have rolled out the installation of solar facilities at our 2 main plants, Dwaalboom and Slurry. Each site has a peak capacity of 10 megawatts. Both plants are already generating electricity. And once fully operational, this solar installation will supply approximately 30% of each plant annual electricity needs. The financial impact in FY '27 will be substantial. In Zimbabwe, the solar project is advancing with our partners to install a 20-megawatt solar plant with battery backup at our Colleen Bawn. Since currently after logistics, electricity is our main cost there, the impact is expected to be significant. This project is planned to go live in FY '28 as defined in our strategic plan and will be a step change for PPC. This investment will not only improve our cost base and strengthen our energy security, but also demonstrates our commitment to environmentally sustainable operations. In the middle section, we have the new Western Cape plant. I am pleased to report an update on the RK3 project, a game changer for PPC and the South African cement industry. The project remains on schedule and within the approved budget. We have made progress in several fronts. Engineering and design are nearly complete. Manufacturing of key equipment has started with the first delivery already on site and civil works are advancing as planned. Importantly, our project governance, cost control and reporting structures remain robust and effective. Overall, the RK3 project is progressing, and we remain confident in our ability to deliver this critical investment on time and within budget. Turning to the last image, the calcined clay testing. We are proud to have conducted industrial trials of calcined clay in the Western Cape. Calcined clay, a new extender could be a true innovation in the cement space in Southern Africa. As we align our carbon emission targets with our business performance targets, this innovative technology is a sustainable cementitious product alternative, potentially at a considerably lower cement production cost. We are in early stages of the trial, but we are excited about its potential. This slide has not changed since we presented in our last Capital Market Day. The plan and goals for FY '30 remain in place. This image tells a simple but powerful story. We set out a clear and ambitious plan, and we are already ahead. We started by rebuilding PPC's foundations and driving significant improvement step by step. The Awaken the Giant strategy is our guide, and the results are visible. Stronger EBITDA and EBITDA margin, rising ROIC and consistent growth in cash generation. We are delivering. And as we look ahead, our plan remains unchanged. We will consolidate the gains in FY '26 and FY '27 to set the stage for the next step change in FY '28 with the RK3 plant fully operational. Our targets are ambitious and achievable, sustainable EBITDA margins above 21% and ROIC well ahead of our cost of capital by FY '28. This is not about short-term wins or changing direction with every headwind. It's about building for the long term, staying the course and proving that we do what we say. The foundations are now strong. The momentum is real, and we have a track record of delivery. The present and future of PPC are exciting, not just because of the results we have delivered this past 18 months, but because we have proven what is possible when an aligned and experienced team execute the right strategy with discipline and a clear understanding of our business. Our strategy remains to continue making PPC a stronger and more competitive business on that, consistently delivering improved financial performance and generating real cash back profits. This journey has already begun, and the results are concrete and tangible. Yet, as proud as I am of these achievements, the future holds even more exciting chapters for PPC. Thank you for your support and for being part of this Awaken the Giant journey. Now we will have time for some Q&A. Unknown Executive: Good morning. We have a number of questions here, and I'll just take them in order as they've come in. Matias Cardarelli: Okay. That's good. Unknown Executive: The first 3 questions are all from Titanium Capital, Charles Boles. On Slide 5, you talk about the importance of a strong asset base. Is there an issue in Zimbabwe with the age/efficiency of the plant? Is PPC at risk if Dangote proceeds to build capacity in Zim as speculated in the press? Matias Cardarelli: Okay. First of all, Charles, thank you very much for your question. I don't know exactly when you made that question, but probably that address the main things about your question about Zimbabwe. Yes. Of course, we are updating the technology in Zimbabwe, and we are improving our maintenance there. That is why we commented today that we have put in place a 3 years plan that started this year with the first shutdown in Q1 of FY '26 in our Colleen Bawn plant. The second thing that we are doing in Zimbabwe, as you have seen in the presentation, is we are starting our solar project, which is going to bring a significant savings and also is going to improve significantly our CO2 emissions. The third thing that we commented today is that we have signed an agreement with Sinoma Overseas recently to be able to have the support of the biggest and most important engineering cement company in the world to upskill our talent in Zimbabwe to make all this process faster and more sustainable. On the other hand, please remember that we have the newest plant in Zimbabwe in Harare. And overall, we have good assets there. But yes, it's very important to update and to well maintain our assets to run there. In the case of Dangote, allow me to say this respectfully. I think it's very important to differentiate between announcement and reality. We all read that announcement when Aliko Dangote visited the President in Zimbabwe last week. We don't have any indication that, that project is going to materialize anytime soon. We monitor all of those news. So we don't see that something that is at least for the moment, real. I think I will take advantage of this question also to comment something also in the direction of trying to differentiate between announcement and reality. It's probably that in the following weeks, we are going to see an important announcement in the South African cement industry with probably the arrival or the change in some shareholders of one of the cement companies. I'm sure that, that situation when it's going to be announced, is going to come with a lot of announcement of a big investment, et cetera. I think it's very important for investors nowadays to be able to clearly differentiate between what people say and what people really do. This will help, I think, investors to take the right investment decisions. The second one... Unknown Executive: The second question also from Charles. We understand there is a dispute with Cashbuild. Could you give us some understanding what this dispute relates to? Matias Cardarelli: Well, Charles, I'm not aware of any dispute with Cashbuild. Honestly, Cashbuild is an important customer for us. We have a proactive working relationship with them. Yes, what is true is that Cashbuild approach, generally speaking, is mostly about price. They are looking for the lowest price cement price that they can get. And for us, it's very clear, our driver is contribution margin. We are not in the game of dropping prices to protect volumes or to gain market share like many other cement producers do in South Africa. So we don't have any dispute that really as far as I know, with Cashbuild. We have good working relationship with them. And Cashbuild and any other customer have the right to decide if they would like to buy our product or they prefer to buy product for another cement company. We believe that PPC put in place the best value proposition, which is not only price but also quality and services. So this is our proposal. No, I'm not aware of any dispute with Cashbuild that we have. Unknown Executive: Thanks, Matias. Last question from Charles. Afrimat has increased output from the Lafarge facilities. There is also more capacity coming online in Mozambique plus growing imports. Do you expect this will put cement pricing under pressure going forward? Matias Cardarelli: Well, it's a strange question because that Afrimat is bringing more capacity to the market. That is the question? Unknown Executive: From the Lafarge facilities. Matias Cardarelli: Because this is the public information. Afrimat had 2 major breakdowns in the past 6 months in both kilns, particularly one of them, a very serious one that prevented them for supplying cement to the market. Actually, there was a kind of shortage of cement at the moment and some Afrimat customers were looking for other supply sources. And Afrimat also needed to go to buy clinker that was also not easy for them because there is not a lot of extra capacity clinker in the market. So I'm not sure what do you mean by Afrimat increasing output. What we have read and listened from Afrimat is that Afrimat is saying that it's going to increase their presence in the 32.5% market in the inland region, meaning South Thimphu, Malanga and Limpopo, which is important to clarify that, that is a market that is the red ocean of the red ocean in the country. It is the low-strength market where operates all the blenders, all the importers, all the integrated plants. So that announcement from Afrimat probably indicates that, yes, there is going to be an increased price pressure on that particular segment, which is a segment that -- for us is not very relevant. We don't -- that is just a small percentage of our sales, it's not a market that for us is relevant. So probably, if AfriSam tried to get some market share in that red ocean market, we might see some price pressure, but in that particular market, the low strength 32.5 market in the inland region. Unknown Executive: Thank you. Moving on to [Marco Rus from OIG Invest]. Given the material USD exposure from RK3 and your current [FEC] position, what is management's outlook for the ZAR USD over the next 12 to 24 months? And how do you plan to manage or hedge your ongoing dollar exposure going forward? And Brenda, before you answer that question, there is a second question, which is related from [Clifford Wrye], which is also asking what are the expected future exchange losses if the rand to the USD remains as is? And what was the hedge price on the USD and what considerations were taken to come up with the hedge option? So perhaps you can answer all of those, I think, at the same time. Brenda Berlin: Of course. So just to break it up into maybe bite-sized chunks. So first of all, we took a decision to hedge the full U.S. dollar exposure for RK3. We averaged at a rate at $18.50. It was the rate that the Board -- when the Board contemplated the business case, it was based on that exchange rate for the CapEx. So the full U.S. dollar exposure is hedged. On the unrealized losses, it's a little bit -- it's a question of timing. So we've realized -- we've got unrealized losses now as we mark-to-market of the hedges. Had we raised the creditor, there would have been matching gains. So what's going to happen in our income statement over the next 18 months is there will be a match. There will just be timing differences. So overall, gains on the creditors will offset losses on the hedge. In terms of hedging instruments, I think that was the last one. We looked at a range, a big range and ultimately decided on sort of quite clean, simple forward exchange contracts taken out over the period in which we expect to spend the CapEx. Unknown Executive: I have a few questions here from Warren Riley of Bateleur Capital. I'm going to take them one at a time, just I think it's easier to ask. Can you talk to outlook for fixed capital investment in South Africa? Have you begun to see any larger projects coming to tender? And is this majority private sector investment? Matias Cardarelli: Paulo can take this one. Paulo Marques: Thank you for the question. Well, at the moment, we are still seeing fixed gross capital formation at a depressed level. But on a more positive note, we see some movement on those tenders process. We know that those tenders process are long given that are public entities. And in terms of the dynamics and the movement, it's positive. In terms of works on the ground, no, we haven't still started seeing some of -- all of those projects coming to a start. Unknown Executive: Thanks, Paulo. The second question from [Warren] is what are the SA Botswana cement volumes growing at in Q3 to date? Matias Cardarelli: Sorry, we don't share that information. About. Unknown Executive: Sorry, Warren, well, can't give you an update on that. The third question is, can you provide the exit run rate for Zimbabwe EBITDA margin in Q2? And can this be sustained into the second half of FY '26? And then I think combined because I also talked to Zimbabwe, what impact is the 30% import surcharge having on demand and domestic pricing? Matias Cardarelli: The run rate for EBITDA margins in the second half of FY '26, that is the question, is it? Unknown Executive: Yes. So basically... Matias Cardarelli: We expect a range between 25% to 30% EBITDA margin there and definitely could be sustained. I mean this year probably has been -- not probably as we shared, has been impacted because when we were in the long shutdown of our kiln in Colleen Bawn was when the demand started to surge. So we needed to import more clinker, and that is why that EBITDA growth, cash flow growth, dividend growth, but EBITDA margin was temporarily impacted. So the run rate for the second half would be an EBITDA margin between 25% to 30% and sustainable. Unknown Executive: And the other question, is that what the impact of the 30% import surcharge, so that's irrespective of... Matias Cardarelli: Yes. I mean it has been important. But I mean, not because we have particularly gained a lot of market share because our position there is very solid. And actually, we sell everything we produce. So I think it's important in terms of giving the industry, the support you expect from government to make big investment. As you all know, we are a capital-intensive industry, which requires big investment. And this kind of decision from government in Zimbabwe gives the industry the encouragement to invest in the long term. That is... Unknown Executive: Thanks Matias. And expecting there are no further questions. Matias Cardarelli: Okay. Thank you very much. Have a nice day.
Operator: Good afternoon, and welcome to the Manolete Partners Plc Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Mena Halton. Good afternoon to you. Philomena Halton: Thank you. Good afternoon. I'm Mena Halton, CEO. I was appointed as CEO in August of this year, but I'm not new to the company. I joined Manolete in 2014, and I've always been and remain very close to the operation of the business. I'm joined today by our Head of Finance with Rachel Lindley-Janes. In terms of agenda, Rachel will take you through our financial highlights for the half year. I will then go through a company overview, KPIs and some case studies. Following that, Rachel will take you through our financial results in more detail, and we will finish with current trading strategy and investment case, followed by Q&A. Over to you, Rachel. Rachel Janes: Thank you, and thank you all for joining us today. We're just going to have a brief look at the financial highlights of this interim results presentation. So total revenue is down at 12.7%. So that is down 12% year-on-year -- year on half year on half year. Realized revenue is up GBP 14 million, which is down 7% on the same period last year. Gross profit of GBP 4 million, down 10% on the same period for the prior financial year. Gross profit margin is up at 31%, fairly stable at 30% from the last half year. Overheads has stayed generally flat, but we will go into those in more detail at GBP 3.9 million versus GBP 3.7 million. EBIT is at GBP 0.1 million profit. Same period last year was GBP 0.7 million profit, and there is some one-off effects in there, which you need to take into account, which will be considered later on as well. Net cash generated from completed cases is actually up 3% at GBP 7.8 million. Our cash balance was up 67% at GBP 1.1 million, and our net debt has decreased by 9% to GBP 10.8 million. As Mena mentioned, we'll talk about the financials in more detail later on in this presentation. But for now, back to Mena. Philomena Halton: Thanks, Rachel. So starting with the basics. What is Manolete and what do we do? So we're the U.K.'s leading insolvency litigation financing company. We're often referred to as a litigation funder, but that actually is a misnomer as we purchase claims for the most part. And we have a unique business model, which is not offered by competitors. So we purchase claims from insolvent U.K. companies, taking assignments from the liquidator or the administrator. And those liquidators or administrators are office holders and they are insolvency practitioners and they are licensed. So purchasing the claim gives us full control over the conduct of the claim, settlement, costs and management. And insolvency is the only area of law where this is possible. Outside of insolvency, it's not possible to assign a course of action. So on assignment, we are the claimant. So we are in the driving seat. We fully control litigation. And importantly, we can draw a line if needed. And this contrasts with litigation funding where the funder is effectively a checkbook only and cannot control the litigation. So in terms of our track record, we financed over 1,700 claims. We've completed more than 1,300, and we've delivered in excess of GBP 175 million. And we have a consistently high return achieved across the 16-year trading history, as you'll see from a later slide. So we provide a solution to a problem faced by the insolvency market. Office holders routinely uncover actionable claims in insolvency, such as breach of duty against the former directors, antecedent transaction claims, overdrawn director loan accounts and claims against advisers or banks. But the insolvent estate will typically lack funds to pursue litigation. And if there are funds in the estate, the office holder may be reluctant to risk those funds on litigation. If it's a company claim, it will be immediately met with a security for cost challenge. If it's an officeholder claim, the IP is personally liable with an adverse cost. So he really is between a rock and a hard place. So we provide the solution to that problem. We purchased the claims by way of assignment. That gives the insolvent estate immediate value with an upfront payment, so that helps the IP with his WIP. We assume all risk, cost and management of litigation, and we provide the IP and the estate with an indemnity in respect of adverse costs. So we completely derisk the estate and we derisk the IP. On realization, the net award is divided between Manolete and the estate and agreed shares. And the rising volume of U.K. insolvencies continues to expand the pool of claims available to us. So the market, there are 3 types of corporate insolvency, which give rise to claims that we can take assignment of. So the first is the creditors voluntary liquidation. This is the bulk of the insolvency market. The word creditors in the title is slightly misleading because a resolution for winding up an appointment of a liquidator is actually passed by the members of the company. And in most SMEs, the members and the directors are one and the same. So actually, these are director to instigated liquidations. And these typically give rise to lower and mid-value claims such as overdrawn directors loan account, breach of duty and antecedent transactions. As you see from the graph, there is a steady rise in the number of CVLs. So that is a really good source of claim referrals for us. And then we come on to compulsory liquidations. This involves a winding up petition issued in the court and is usually presented by a creditor. And post-COVID, compulsory liquidations have increased year-on-year, as you can see from the chart. And what's particularly interesting about compulsory liquidations is that HMRC is a major petitioning creditor. And that's good for Manolete because claims arising in compulsory liquidations on HMRC petitions can frequently give rise to high-value claims against directors and connected parties in relation to areas such as tax avoidance, VAT fraud and payroll fraud. And we have particular expertise and good track record in these areas, and these claims tend to be high value. And then the third form of insolvency, which gives rise to claims within purchase is administrations. Now this is the more common insolvency path for larger U.K. companies and administrations have taken longer to return to pre-pandemic levels of activity. Primarily in administration, the focus is restructuring and rescue, perhaps a trading administration or a sale of the business is a going concern. But in addition to those aspects, there will be claims. An administrator is under a duty to investigate and realize claims just as a liquidator is. And these claims tend to be higher value. So the administrations tend to give rise to higher value breach of duty and antecedent transaction claims. And also claims against banks and claims in professional negligence, such as claims as against auditors and solicitors. And again, these tend to be high-value claims and more importantly, they are insured claims. Moving on to the next slide. We are the dominant third-party funder in the insolvency market. We are the 5-time winner of the industry's TRI award for litigation funding, and we're the only firm to be ranked band 1 for insolvency litigation funding in the Chambers guide every year from '21 to '25. I know there are a lot of awards and lots of talk about awards, but this award is very much a recognized badge of honor in the legal and insolvency world. The category for insolvency litigation funding as opposed to mainstream funding was introduced in 2021, and Manolete has been ranked band 1 every year. So no other funder has ever been ranked band 1, and we hope that, that continues. In terms of top market positioning, we have full U.K. nationwide coverage, ensuring engagement with insolvency practitioners and insolvency solicitors across the country. So sometimes claims come to us direct from the IP. Sometimes claim is referred by solicitor on the IP's behalf. So it's really important that we maintain good relationships with both the IPs and external insolvency lawyers. We have a fantastic in-house legal team, and they are the engine room of the business. They source the work, they generate the cash realizations and they grow the business. So as the legal team grows, the business grows. When I joined Manolete in 2014, there was a legal team of 1, and that was me. It is now 18 very experienced and very talented insolvency litigation experts. We maintain good relationships with these key stakeholders in the insolvency business. So that's [ R3, ] ICAEW and the IPA. And these partnerships confirm our position at the center of the insolvency profession and support our exceptional referral network. We regularly present insolvency industry events, and we also produce our own series of webinars, podcasts and presentations. We are very visible and very active in the market. So the next slide is business mix. And insolvency claims fall into 2 categories. There's the company claims so their claims that existed before they went into an insolvency process, the claims vest in the company. And then there are the office holder claims which arise on the insolvency. But importantly, both categories of claim can be assigned. So typical company claims include breach of duty and overdrawn director loan account. Office holder claims include claims such as transactions undervalue and preference. To give you an example, a director gifts GBP 100,000 to his wife 6 months prior to CVL at the time when the company is insolvent. That's a transaction at undervalue and the wife must repay. If the GBP 100,000 was repayment of the loan, that's a preference. And again, the wife must repay. And there is an overlap between claims. So in the example, there is a completing claim against the director in damages for breach of duty because he's the party who caused the company to make the payment, which was either a transaction at undervalue or a preference. There's a pie chart there showing the percentages of case types we deal with. As you'll see, we do a lot of directors' loan accounts, which I've referred to previously. Most SMEs will operate a DLA, nothing wrong with that. But of course, it's a debt and it must be repaid. In certain circumstances, the DLA may also be breach of duty. A director may be liable for the overdrawn DLA of his co-director in breach of duty and a Co-Director may also be liable under Section 213 of the Companies Act if the DLA hasn't been approved under Section 197 of the Companies Act. Then we have unlawful dividends. If the company declares a dividend without sufficient distributable reserves or without complying with Part 23 of the Companies Act, and that dividend is unlawful and it's repayable by the shareholder. Again, there's a corresponding breach of duty claim against the director because he's the party that's procured the company to pay to declare the unlawful dividend. Breach of duty, there's a lot of overlap with the other claims, but you can have stand-alone breach of duty. A good example of that would be the director who files full VAT returns that incurs the company in a large penalty imposed by HMRC. The director is then liable in damages to the extent of the penalty imposed as a result of his making the false filings. Preference transaction at undervalue already covered. Wrongful trading, this is where a director continues to trade beyond the point where he knew or ought to have known there was no reasonable prospect of the company avoiding insolvent liquidation. And in those circumstances is liable to contribute to the assets of the company. And then we have miscellaneous other. So this can be claims such as professional negligence or claims against banks. Just to give you an example of a bank claim, one we've got ongoing at the moment. The director was regularly withdrawing very large sums of cash from the bank. This quite properly raised a red flag with the bank. So the cashier asked the director to explain why he was extracting these extremely large sums of cash and taking them home in a carrier bag to which the director applied, well, it's to pay the wages, and the cashier said, okay, that's fine off you go. But having asked the correct question, the cashier then took the wrong action because this is a company that did maintain a proper payroll and the employees were paid by bank transfer from that bank account. So obviously, his answer that the cash was to pay wages was completely wrong. So that gives a rise to the claim against the bank in negligence or breach of duty. And so hopefully, that gives you some flavor of the sort of cases that we regularly deal with. Next slide is our route to market. So first of all, the company enters into the insolvency process, which can be one of the three types which we've just looked at. The IP is appointed. He then has a duty to investigate the dealings and affairs of the company and to identify assets. And of course, the claim is an asset of the company, just as the stock or the plant and machinery and the IP has a duty to realize that asset to realize that claim for value. Where there are insufficient monies in the estate to pursue the claim, the IP refers the claim to us and we take it forward. We have a very rigorous selection process, and that's based on ability to pay and merits. And actually, ability to pay is the matter we look at first because you could have the best claim in the world, but if the guy isn't good for the money, there is absolutely no point. So when we reject a claim, it tends to be for lack of assets concerns on recoverability rather than lack of legal merit. And the next slide is an overview of the funnel. So it's the life cycle of Manolete's cases. So we're getting a new case inquiry that can be from the IP or from his solicitor and that comes into the legal team. We then make an offer if we like the case and the net worth stacks up, we make an offer, it's signed. And 29% of inquiries are progressed signed cases. As I mentioned, our most frequent reason for rejection of a case is concerns on recoverability. When we do make an offer, they tend to be accepted. It's quite unusual for an offer of ours not to be accepted. Then we complete the case, and that's usually by settlement. And then the cash is collected, and when the cash comes in, we are reimbursed our upfront payment, our initial consideration to the IP, and we are reimbursed our legal costs. This takes us to the net realization, which is divided between Manolete and the estate in the agreed shares. And those agreed shares are usually 50-50. But on larger cases, there is a ratchet in favor of the estate. So as the numbers get into the higher echelons, then the estate share increases. So to try and bring all that to life, there's a couple of case studies. So the first one is a case study of the completed case. So here, the company was wound up. IPs were appointed liquidators. The liquidators carried out investigations and they identified that very significant amounts of company money have been applied towards the building and refurbishment of a property owned by the wife of the director. So that clearly gave rise to claims against the director and breach of duty, but he had been made bankrupt on the petition of HMRC, so he couldn't be pursued. So we then -- well, the liquidator then looked at claims against the director's wife, who was the owner of the property. His solicitors advanced those claims in pre-action correspondence, but the claims were denied. He was met with a brick wall and he had no funds in the estate to take the claim further. So at that point, the claim was assigned to us. We paid an initial consideration of GBP 10,000 and agreed a split of net realization. So we purchased the claim in May 2024. We settled it in January 2025 at GBP 850,000 and that GBP 850,000 cash settlement was paid to us in full in October 2025. So from that GBP 850,000, we repaid our initial consideration of GBP 10,000. We repaid our legal costs of GBP 42,905. And I think that's a good illustration of the very tight control we exercise over costs. Costs of GBP 42,000-odd and a recovery of GBP 850,000 is very good cost control. So our share of the net realization was GBP 393,837. So good cash result in a short period of time, and we took assignment of claim in May 2024, all cash received just over -- just over 1.5 years later. The next case study is an example of an ongoing case, and it's an example of a high-value case arising in a compulsory liquidation on an HMRC petition. So here, the company was wound up on petition of HMRC, IP's appointed liquidators. And they carried out an investigation and identified claims against the former directors in relation to a very large-scale VAT fraud. Now urgent action was needed to prevent dissipation of assets. An application was needed for a freezing order, which is a very expensive procedure, but there were no monies in the estate. So the liquidators referred the claim to Manolete. We took assignment for initial consideration of GBP 10,000 in an agreed split of net realization. We purchased the claims in September 2025, and we very swiftly obtained freezing orders to preserve the assets and issued proceedings. So that's a good example of a case which needed expensive but urgent action. The IP just didn't have the funds. So we step in, we provide the solution. We take assignment of the claim. We issue proceedings and we obtain a freezing order all very, very quickly. Now we come on to KPIs. So the first chart shows you our new case inquiries for this half year. As you'll see, there have been a steady rise in the number of cases referred to us. 505 cases were referred in the first half of the current financial year, and that's the highest half year number ever. The next graph shows new signed cases. Again, strong case signings. More cases have been signed in the first 6 months of the current financial year than in H1 2025. Then we come on to expected gross settlement values. Now there's been a lot of emphasis on the numbers of cases signed. And of course, that is very important, but the values of those signed cases is perhaps even more important. And I'm very pleased to say that the gross settlement values are on an upward trajectory, as you can see from the graph. Then we come on to our completed cases. The numbers of cases completed is on an upward trend. And there is a pattern that realized revenue is better in the second half of the financial year, and we expect that to be repeated in FY '26. Then we come on to net cash receipts from completed cases. And again, you can see a pattern of receipts being better in the second half of the financial year. And again, we hope that pattern to be repeated in FY '26. Then we come on to the detailed graph, which I mentioned earlier, and I hope this is particularly helpful as it tracks our performance since 2010. There's a lot of information here, and it will be put on our website. So I will leave you to look at that. But I would just like to highlight the key points, which are that 1,335 cases have been completed, generating a total aggregate value of GBP 175 million. Only one small case from 2020 remains in progress, and that demonstrates the highly efficient and effective Manolete model in the world of litigation. Litigation can obviously be very -- often be very lengthy. We get through litigation quickly. Of the 1,335 completed cases, we have recovered GBP 129 million of net retained proceeds. IRR, 130%; ROI, 111% and a consistent performance over 16 years across many hundreds of granular cases. Next slide is cartel cases. And these arise from the 2016 European Commission decision as to the involvement of various truck manufacturers in a price fixing cartel. We've purchased 22 antitrust claims from insolvent companies impacted by that 2016 decision. And the 2016 European Commission decision resulted in a cartel record-breaking fine. These antitrust claims are very different to our core insolvency business and are unlikely to be repeated. And in this litigation, liability is usually not the main issue, and the focus shifts to causation and loss, along with the truck manufacturers actively relying on the pass on defense, i.e., we may have -- you may have been overcharged, but you pass that on to your customer. In early 2023, the Competition Appeal Tribunal in the U.K. delivered a landmark judgment in the BT Royal Mail claim, establishing key principles for damages in these cases. A broad approach was adopted for the overcharge caused by the cartel at 5%, which supports our current net book value. And because this is such a specialist area, we have retained Fideres LLP who are retained -- who are specialist valuation experts, and they have provided input into the total claim value to support our net book value. As to the current position, the trial window for the second wave of truck cartel proceedings in the competition appeal tribunal is scheduled to commence in September 2026. Our claims are currently stayed pending the outcome of the second wave truck proceedings. We have settled one claim and we are in ongoing settlement negotiations with a view to hopefully settling the remaining claims. Now back to Rachel for some more detail on the financial results. Rachel Janes: Thank you, Mena. So you've already had a brief look at our financial results in the opening slide, but this is just going to give you some more detail and some more idea of what has been happening in the 6 months of this year so far. So as mentioned, our gross total revenue was down to 12.7%. This is from GBP 14 million of realized revenue, a decrease from GBP 15 million, which is down to part of the cartel claim being settled. And we have had a lower-than-average completion -- lower-than-average realized revenue of completed cases in the year. We don't know why this is. It's just to litigation, unfortunately, just the timing of items, but it is something that we are looking into for the second half of the year. Unrealized revenue was negative GBP 1.3 million versus negative GBP 0.6 million for the same period last year. This does, however, include the conversion of the first part of the settlement with the Cartel from unrealized revenue to realized revenue. It also then has the GBP 0.8 million fair value write-off of the first settlement and the GBP 1.1 million negative impact of the fair value write-down of the remaining portfolio following the settlement with a singular manufacturer. Gross margin stayed relatively steady at 31%, same period last year at 30%. But as we expect to see larger cases complete, then hopefully, our gross margins will continue to increase as the amount of work and costs associated with large cases are often mirroring those of the smaller cases, but with a higher return. Overheads of GBP 3.9 million have increased by GBP 132,000. So this is mainly due to the increase in bad debt charge. There is another slide that I will talk through in a moment, specifically around admin and overhead costs. All our overheads have remained relatively flat with a small decrease in staff costs, offsetting minor increases in professional fees. EBIT of GBP 0.1 million compared to GBP 0.7 million for the same period last year. But if you exclude the adjustment to the first cartel settlement and subsequent revaluation of the remaining portfolio of GBP 1.9 million, which was communicated in July to the market, the adjusted EBIT would be GBP 2 million, which is a significant improvement on last year when you remove the one-off trading updates that have happened this year in terms of cartel. EBIT margin has decreased to 1% from 5%. But again, if you exclude that GBP 1.9 million of the cartel revaluation and write-off, the EBIT margin will be at 14%, which highlights the good cost control on completed cases and our steady overheads, endorsing management's year-end comments on the scalability of the business. Loss before tax was GBP 0.7 million. Same period last year was GBP 0.2 million loss. Net of finance charges of GBP 0.7 million versus GBP 0.8 million last year. We benefited slightly in interest and finance charges from the improved rate of SONIA which was negotiated with the RCF that was signed in March 2025. As mentioned, we've gone into a bit more flavor on admin expenses this year, just so people can see where the value of our flat structure really is. So as mentioned, overheads have increased by GBP 132,000 or 4% from the same half year last year. This clearly -- this table clearly highlights that staff costs have remained stable. They have decreased year-on-year, but we have seen 2 new hires in the last few months of the financial -- of the half year. We've hired a new legal head who starts in October, and we do have the incoming CEO (sic) [ CFO ] In December 2025, which then should normalize the staff costs. Bad debt has increased by 43%. As already mentioned at our trading statement for the AGM, we have seen a small number of larger debtors default recently. Although action is being taken by the legal team, there is unfortunately going to be some fallout from some of those, and therefore, the company has provided for them as needed. This is a key area of control and review by the Board and everyone within Manolete at the moment who has an ongoing kind of role within that individual debtor. Professional fees increased by 14% compared to the same period last year. This is due to an increased use of advisers due to everything that has happened in the company and on the Board in the last 6 months as well as some inflationary measures as well in there. Marketing costs have stayed fairly flat, and these are closely monitored by our [ Andrew Cockerill, ] who prepares the budget and monitors everything along these lines on a regular monthly basis. If you exclude bad debt from our admin expenses, they're actually 2% lower than last year. So you have 3,184 versus 3,256, which then, like I said, it just shows that the business structure is moving forward. And hopefully, in the future, that will help to bring in more revenue going forward. So then we go to our balance sheet. So our investment in live cases stood at GBP 40 million at the 30th of September 2025, compared to GBP 39.5 million at the same period prior. This is net of the conversion of the singular cartel, and this helps to show that the case that we have signed in these 6 months really bring future value to the business because although we have had a large settlement for the cartel, our value of our investments has not decreased year-on-year. We have trade receivables of GBP 30 million as of the 30th September 2025 compared to GBP 29.3 million at the same period prior, including a GBP 6.6 million concentration in a singular large debtor who will be paying over the next 7 years. Debtors after -- as we've already discussed and communicated, there has been some more defaults. And so this is a key monitor for the Board in the future months. Cash was held at GBP 1.1 million. Our debt drawdown on our RCF remained the same at GBP 12.5 million. It's worth noting that the long-term loans in the balance sheet for 30th September 2025 includes the capitalization of fees that will be amortized over the life of the loan in relation to obtaining the new RCF. We were hoping that some of the money from the cartel settlement would help to reduce our overall loan drawdown; however, because of the small number of debtors that have defaulted, we have used this money instead to continue investing in live cases. Just to give you a bit of an idea of our trade receivables, yes, we have had some large defaults come through. But as you can see, 58% of our trade debtors are not yet due. So this is future cash in the business that has not yet hit the terms of the settlement agreement. On top of that, 9% is due within 6 months overdue. And those that are more than 6 months overdue mainly relate to judgments. So with judgments, we try to settle with debtors in mediation, and it's a signed settlement agreement where the debtor will agree to pay a certain amount over a certain period of time. When mediation can't -- when a settlement can't be reached, we will then take it to the court and obtain judgment. So judgments are the court ordering a debtor to pay us a certain amount of money rather than them agreeing to do it. And therefore, it takes longer for us to enforce these judgments as it sometimes means that we need to take out charge in orders over assets and therefore, the rest of the chain to try and realize the actual cash in total. On the cash flow statement, we are at GBP 14.5 million of first cash receipts up from GBP 14.3 million in the same period last year. This does include the receipt from a singular cartel case. I will provide some more detail on the cartel case in a couple of slides; however, we cannot, for confidentiality reasons, disclose the number of the gross settlement. Net cash generated from completed cases was up 4% at GBP 7.9 million, and our cash flow from operating activity was 1% (sic) [ GBP 1 million ] versus GBP 1.2 million. So it shows that during the half year, the company has managed to generate enough cash to fund all its overheads, investment in new cases and investment in ongoing live cases. Sorry, just to note as well, the overheads have gone up slightly on this because we did have a one-off payment earlier in this 6-month period in relation to the RCF fees. So cartel settlement. Unfortunately, I know there was a lot that people would want to ask, but we cannot go above what has been mentioned already in our July RNS. It's under strict confidentiality agreement, and therefore, I can't share anything further than what's already in the market. But just to remind you, we said we're a single manufacturer on our cartel portfolio. It resulted in a fairly quick cash turnaround with cash being paid at the end of July and Manolete retaining approximately GBP 3.2 million of that cash, which represented full reimbursement of any costs associated with that manufacturer of the cartel and our share of the profits. So as mentioned, the settlement resulted in a noncash write-down of GBP 0.8 million as a write-off with a singular manufacturer. And then when reviewing our cartel -- remaining cartel portfolio in light of this, we then took a GBP 1.1 million further write-down on the remaining portfolio. Therefore, combined with the above-mentioned cash write-down of GBP 0.8 million, the GBP 1.1 million, the total effect on unrealized revenue is GBP 1.9 million, as you've seen how it affects our numbers when we talk through the P&L. The net asset value of the remaining unsettled cartel portfolio as of the 30th of September 2025 was GBP 10.1 million. And then thank you for listening, and I will hand you back over to Mena to talk about current trading strategy and investment case. Philomena Halton: Thank you, Rachel. So current trading, we've had a strong start to the second half of the financial year. As of the 10th of November, we had already signed 38 new case investments. During the same period, we completed 23 cases. Therefore, the number of live cases in progress as of the 10th of November was 469. New case referrals remain buoyant at close to record levels, and we have a new CFO joining in December. So overall, the Board remains confident in the prospects for the business, expecting a return to higher average settlement values in the second half of the year and total realized revenues, excluding the cartel settlement being weighted towards the second half as it has been in previous years. In terms of strategy, no big changes here. Our focus remains firmly centered on U.K. insolvency claims. That's our area of expertise, and it's the largest and most established market for assignments. Opportunities in other jurisdictions arise, and we do consider them, but these will be exceptional rather than core. We have financed some litigation in the Channel Islands we're often offered litigation in places such as the Cayman Islands and BVI. But so far, we haven't financed anything there. Really, we like to stick to U.K. insolvency claims. That's where we have our expertise, where we control what's happening. And we are experts in the law and the practice and the procedure of that litigation. In terms of portfolio construction and capital allocation, we aim to increase the volume of high-quality new case investments while maintaining a balanced risk-adjusted portfolio. And that's across small claims, which are up to GBP 100,000, mid-market claims which are between GBP 100,000 and GBP 1 million and large claims which are GBP 1 million plus. And as I've mentioned previously, we have seen an increase in higher value claims, which is good news because whilst we can make smaller claims work, obviously, the capacity to make higher profits is better with higher value claims. So this balanced portfolio approach enables disciplined deployment of capital while preserving liquidity, diversification and market resilience. Looking at market dynamics and strategic positioning, since the withdrawal of the COVID era restrictions, which ended in April 2022, the U.K. insolvency landscape has normalized with a steady resurgence of larger -- arising particularly from administrations and compulsory liquidations in particular, where they are -- where HMRC is the petitioning creditor. So these market conditions continue to support our strategy of targeting a robust pipeline of higher value, higher impact claims, strengthening long-term returns and market leadership. So our investment case, as set out at the beginning, we are -- we remain the U.K.'s leading insolvency litigation financing company. We're the only listed funder whose model is based on buying the claims rather than simply funding them, and that is a key differential. This structure is unique to the U.K. insolvency regime enabled by the Insolvency Act 1986, as amended by the Small Business Enterprise Employment Act 2015. And it's this legislation that enables us to purchase both the company claims and the office holder claims. We have a strong expertise and nationwide reach. We have national coverage supported by a highly experienced in-house legal team drawn from partner and senior associate level across leading insolvency practices. Strong market drivers, a record number of U.K. insolvencies, rising CVLs and HMRC petition activity create sustained opportunity. We're the dominant third-party funder in the sector, and we take on only cases meeting strict quality and recovery criteria. Compelling economics, short case duration, average time to completion is 13.7 months. Highly cash generative, demonstrating consistent growth in operating cash flow, high operational leverage, profitability scales materially as average case values continue to arise, proven returns. Long-term performance includes ROI 111%, IRR 130% and a 2.1x MoM. So that concludes our presentation, but we have had some questions. Philomena Halton: So thank you very much for your questions. So to start with, we have received a couple of questions regarding capital allocation with the main question being whether we should consider the time is right to commence a share buyback program, i.e., obviously, the share price is low. So in answer to that, our priority continues to be investment in cases where we can see very strong returns. Whilst we wouldn't rule out considering a share buyback when the time is right, that course of action is not a priority at the current time. And the Board agrees that cash is much better spent on investing in new cases and growing the company. And it's important to emphasize that capital has been reinvested in claims with higher values than last year. So we think that is the best deployment of our capital. The next question is, you have recently taken over as CEO from the company's founder, Steven Cooklin. As the new CEO, do you intend to do things differently? And what is the strategy going forward? Well, I should say I was delighted to be appointed CEO of Manolete in August of this year to build on the work of Steven. And during this first -- in the first half saw the settlement of our first cartel claim that saw a record number of completions, albeit at a lower-than-normal average value. So going forward, the strategy is to continue our focus on adding and completing more higher-value claims, realizing revenues and expanding our talent pool for the future. So we will be recruiting more lawyers into the in-house legal team. The next question is, do you plan to make any changes to the company's approach to fair value accounting and the satisfaction of IFRS 9? I think that's probably best answered by Rachel. Rachel Janes: Yes. It's a question we get a lot. We've looked into it many times as a company. We have looked into detail in various different approaches to satisfying IFRS 9 -- IFRS 9 even, sorry, while complying with the accounting standards. And the approach is currently working well, and it's agreed with the auditors. Separately, I should point out that we do have a new CFO, Will Sawyer, he will be joining on the 15th of December. So I'm sure it will be something that he can look into on a separate note as well when he wants to come in and have a look at under the skin of how Manolete runs. Thank you, Mena. Philomena Halton: Thank you for answering that one, Rachel. Next question, the change of CEO came almost immediately after U.S. private equity firm, Brightlight Capital acquired a 10% stake in the company, a clear signal that it sees significant value to be unlocked relative to the current share price. Are these 2 events connected in any way? Well, there was a very short answer to quite a long question. And the very short answer is that these 2 events are entirely unrelated. Then the next question asks if we can give a little more color around current trading, what we are seeing in the market and the outlook for Manolete? So the most significant factors in the first half of the financial year was the first truck cartel settlement. But that has been combined with a lower-than-average case settlement during a quiet summer. Trading in September showed a marked improvement, and I'm pleased to say this has continued in October. New case referrals remain buoyant at close to record levels, in fact. And we expect a return to higher average settlement values in the second half of the year and total realized revenues, excluding cartel, being weighted towards the second half. There's another question here. Could you explain why there was a sudden spate of low-value settlements in the first 6 months of the year? I wish I did have an answer for this, but actually, there is no specific explanation. It's simply the nature of the business that we're in. The process is not linear. As we've mentioned, most cases settle at mediation, and that requires consensus where there are opponent on the timing of that mediation. For example, I'm dealing with a large claim against the bank. This isn't the cash in the carrier bag one, this is another one. And in this case, the bank indicated earlier in the year that it would mediate yet, we'll come and talk to you. But then the bank pulled back and said it wanted to mediate at a later point. It now wants to defer the mediation until after the next directions hearing. So I'm as confident as I can be that the bank will mediate, but I can't say precisely when. Another example, a colleague has been running a large breach of duty claim and the other side did mediate. But on the day, they weren't prepared to settle at a sensible level. So we can't settle cases at any cost. So I told my colleague to withdraw from negotiations and issue the claim. So I suspect there will be a second mediation in the future. But again, I don't know when. But we have to make the right litigation decisions to maximize realizations. Then we've also been asked about the bounce back loan opportunity, which is something that has been mentioned previously. So we are continuing to pursue breach of duty claims in relation to director misuse of bounce back monies as part of our ordinary business. Nearly every case refers includes a claim relating to bounce back loans. There was widespread misuse of this scheme, as you know, a lot of directors just viewed it as free company money to spend on cars or holidays or on a house. In fact, anything apart from proper purposes of the company. We also worked on a pilot with Barclays Bank, and we achieved very good results. We're currently, again, achieving good results on a second pilot with the official receiver, but it's not on a large scale. So although we have achieved very good results and we've been given the opportunity to take on this work, so far, there has been no wider take-up on our offering on bounce back loans. So no further progress at the moment. There are some more questions here. Yes. What progress is Manolete making in increasing the share of the insolvency market that it handles? Yes, we're making a lot of progress. It's hard to measure it in exact terms, but the case numbers -- the numbers of cases referred is going up and up and up since you've seen from the charts. We do have competitors, but they haven't been able to get anything like the grip on the market that we have. And of course, they don't offer the same model that we do. What we offer is unique to us. So again, it comes back to the legal team. As the legal team grows, they bring with them their contact books and they get out in the market flying the flag from Manolete amongst those contacts and making new contacts. So that's how we grow the business and grow our market share of the insolvency market. Rachel Janes: Are you seeing an uptick in large company administration? Philomena Halton: Yes. Sorry, I can't see the question or just finding the question. Yes. Thank you, John, for your question, which I've now managed to read. Are you seeing an uptick in large company administrations? Yes, they are recovering slowly post-COVID, and we are seeing more large value claims and administrations are a good source of those large value claims. But this is very much a market that we are targeting and aiming to get more of moving forward. That is a real focus for the legal team. So in a nutshell, yes. And then there's a question from Richard. Thank you, Richard. Are you considering entering adjacent litigation finance segments? I'm not sure if that mean is -- question is whether we are considering venturing into areas beyond insolvency litigation. If that is the question, then the answer is no. And a nutshell, we'll stick to what we know and what we're good at. And of course, where we can buy the claims as opposed to simply funding them. If that wasn't the question, then I'm sorry, and perhaps do please follow up afterwards. And if, in fact, it's a different question, I'll give you a different answer. What else have we got? Rachel Janes: I've got one about corporation tax, which I can cover what you have... Philomena Halton: Yes, please, Rachel. Rachel Janes: Thank you. So there's a question saying when we expect to restart paying corporation tax. So as most of you know, we made a loss a few years ago. And therefore, we converted that into a deferred tax asset to offset against future profits. This is now second year, third year of that. So once that's now, I think we have about [ GBP 0.2 million ] in relation to corporation tax, our deferred tax asset at the moment. So maybe this year, who knows? That's the forward-looking plan, hopeful. So yes, thank you. Operator: Perfect. That's great. Mena, Rachel, if I may just jump back in there. Thank you for addressing those questions from investors today. And of course, the company can view all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. But Mena, before I redirect investors to provide you with their feedback, which is particularly important to the company, could I please ask you for a few closing comments? Philomena Halton: Yes. I'd just like to thank those who are listening this afternoon and those who may be listening at a later time, thank you for your interest in the company, and thank you for your questions. I hope we've answered some of them. If there are any questions outstanding that we haven't answered, then do please follow up. But thank you for your interest in the company. Operator: Fantastic. Mena, Rachel, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Manolete Partners Plc, we would like to thank you for attending today's presentation, and good afternoon.