Vistry Group Plc – Half year results

Vistry Group PLC – Half year results

Vistry Group PLC (the “Group”) is today issuing its half year results for the six-month period ended 30 June 2020.

First half key highlights

• Transformational acquisition of Linden Homes and Vistry Partnerships completed in January
• Successful business integration with £44m synergies now expected, £9m ahead of initial target
• 5-star HBF customer satisfaction rating awarded for 2019 and we have continued to trend at a score above 90% through 2020
• Net debt of £357.3m¹ at 30 June 2020 (18 May Trading Update 2020: £476m), ahead of our expectations at the start of the pandemic, reflecting resilience of Vistry Partnerships' revenue model
• Site closures significantly impacted Housebuilding production in H1, output and performance
• Vistry Partnerships led an early return to site, underpinned by the certainty of pre-sold developments and contracting revenues
• Production capacity returned to near normal levels from 1 July

Current trading and outlook

• Strong start to the second half supported by positive market trends
• Sales rate 20% ahead of prior year since 1 July, at 0.73 (2019: 0.61) sales per active site per week including Vistry Partnerships
• Pricing remains firm
• Record forward sales position with Group forward sales totalling £2.7bn² (30 June 2020: £2.6bn) including Housebuilding forward sales up 17% to £1,478m (30 June 2020: £1,264m
• Minimal cost inflation with Group to realise cost savings in the second half and into 2021 from flow-through of procurement synergy benefits
• £20m of synergies expected in 2020 and the full run rate of £44m to be achieved by end 2021
• Full year profit before tax³ for 2020 expected to be in the range of £130m to £140m
• Assuming stable pricing and current sales rates and productivity levels, the Group has the ability to deliver at least £310m of profit before tax³ in 2021
• The balance sheet is strong, supported by significant and well-spread funding facilities
• Priority for capital allocation remains deleveraging, targeting gearing of 35%⁴ including land creditors for December 2021
• Aiming to resume dividends in respect of 2021 with a progressive dividend policy thereafter

Greg Fitzgerald, Chief Executive, commented:

“We moved quickly to integrate Linden Homes and Vistry Partnerships at the start of the year.  It has been a successful process bringing together the best from each business, with the benefits from the combination expected to be ahead of our initial target.  We have achieved this whilst maintaining our focus on delivering excellent service to our customers.

“Housebuilding's first half performance was significantly impacted by the lockdown and resultant site closures.  Vistry Partnerships demonstrated its market resilience and robust revenue model and led the group to an early successful return to site, with production levels across the Group now back at near normal levels.

“We have seen positive sales trends since early May, with consumer interest higher than at any time in recent years.  Our sales rate in the second half to date is running 20% ahead of last year at 0.73, and pricing remains robust.  The Group is well positioned to capitalise on the opportunities available in the second half and into 2021 when we expect to deliver a step-up in completions and profitability, a reduction in gearing and a return to dividend payments.”