Vistry Group PLC
Trading update
Vistry Group PLC (“Vistry” or the “Group”) announces a scheduled trading update for the year ended 31 December 2021, ahead of the publication of its full year results on 2 March 2022.
Highlights
- Excellent performance throughout the year across all business areas, with the Group expected to deliver FY21 adjusted profit before tax1 of c. £345m (FY20: £143.9m), in line with previous guidance
- Strong balance sheet with net cash position as at 31 December 2021 of c. £234m (31 December 2020: £38.0m), reflecting both increased profits and good working capital management
- Continued improvement in Housebuilding with completions2 increasing to 6,551 units (FY20: 4,652), and gross margin3 anticipated in excess of 22% (FY20: 17.6%)
- 41% increase in higher margin mixed tenure completions2 at Vistry Partnerships, with operating margin3 increasing to over 9% (FY20: 6.7%) as expected
- Continued quality and customer service delivery with step up in construction quality awards and sustained HBF 5-star customer satisfaction rating
- Significant progress with sustainability strategy demonstrated through our commitment to setting science-based targets and our sign up to 'Business Ambition for 1.5°c'
- Success in the land market with the Group securing a total of 11,772 plots in FY21 (FY20: 8,652), ensuring growth in the land bank as well as having all land required for FY22 completions in place
- Strong forward sales position with total Housebuilding and Partnership mixed tenure forward sales as at 31 December up 24% to £1.94bn (31 December 2020: £1.56bn) with 54% of total forecast units for FY22 already secured
- Our sites have returned to work efficiently following the break, with no significant impact from Covid-related absence to date
- Group expects to deliver a significant step up in profits and returns in FY22
Greg Fitzgerald, Chief Executive, commented:
“2021 has been an excellent year for Vistry Group with progress and success achieved across all areas of the business. I am extremely proud of and grateful to our people who have shown huge talent, passion, and commitment to get us to where we are today. I am delighted this dedication has been recognised with Vistry being awarded Large Housebuilder of the year for 2021 at the recent Housebuilder Awards, less than two years since we formed the enlarged group.
We are focused on leveraging the Group's unique combination of Housebuilding and Partnerships assets as well as our strength and capability across all housing tenures, with our target of delivering sector leading returns in the medium term. I'm delighted with the progress in the year – our Housebuilding and Partnerships businesses are together securing new, high quality development opportunities, while working successfully alongside each other on a number of existing sites. This successful joint approach is delivering enhanced overall returns.”
Operational update
It has been a very positive year with progress made across all areas of the business and the significant benefits and opportunities of the enlarged Group's unique market positioning and capability being realised. We were delighted with Vistry Group being awarded the Large Housebuilder of the year award at the recent Housebuilder Awards.
We have seen strong demand across all areas of our business during 2021, with the Group's average weekly private sales rate per outlet increasing to 0.76 (FY20: 0.53). The business performance has been consistent throughout the year and across all of our geographies. Aligned with this strong demand, we have seen c. 6% house price inflation in the year.
We have extended our work with client housing providers through increased land-led partner delivery and are the only listed developer to have been awarded Strategic Partner status by Homes England, further recognising the benefits of Vistry's unique delivery model and track record in the affordable and mixed tenure markets.
Delivering high quality new homes and excellent customer satisfaction remained our top priority in 2021 and we are confident of maintaining the maximum 5-star HBF customer satisfaction rating for 2021.
We have continued to see some pressure across the supply chain resulting in extended lead times on building materials and inflationary price increases on certain products and skilled labour. There was some easing towards the end of the year and, working in close partnership with our material suppliers, we continue to actively manage this challenge and are well positioned at the start of the new financial year. We expect construction output in the first half to be similar to that achieved in H1 21 and overall, expect our build cost inflation to run at c. 5% for FY22, with wage inflation likely to run ahead of materials cost inflation as we progress through the year.
Cladding and build safety
Following the recent public letter to developers from the Department for Levelling Up, Housing & Communities, we can confirm that we are supportive of the Government's ambition to derive a solution. We fully agree that the costs of remediation should not be borne by leaseholders and we will work directly with the Government as well as with the Home Builders Federation to deliver a solution. We will update on any implications for the Group as these suggestions evolve into clear proposals.
We continue to consider all relevant cases and are committed to meeting any liability which we identify. In addition, we are committed to offering appropriate support in circumstances where building owners do not meet their obligations.