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RNS Number : 3166L
Vistry Group PLC
12 January 2021
12 January 2021
Vistry Group PLC
Trading update
Vistry Group PLC (the "Group") is issuing a scheduled trading
update for the year ended 31 December 2020, ahead of the
publication of its full year results on 25 February 2021.
Highlights
-- Strong second half performance with FY20 profit before tax(1)
expected to be at the top end of the range at c. GBP140m
-- Excellent progress at Vistry Partnerships with higher margin
mixed tenure volumes up 28% in the year and 70% in the second
half
-- Strong sales revenue and tight management of working capital,
achieving debt reduction ahead of expectations, with a net cash(2)
position of c. GBP38m as at 31 December 2020, from a net debt(2)
position of GBP357.3m as at 30 June 2020
-- Active in good land market maintaining total controlled land
bank plots whilst reducing the land creditor balance
-- Group expects to be awarded 5-star HBF customer satisfaction rating for 2020
-- Strong forward sales position with 55% of total Housebuilding
and Partnership mixed tenure forecast units for FY21 already
secured
-- Assuming stable market conditions, the Group is well
positioned to deliver a step-up in profit before tax(1) to GBP310m
in FY21
-- Resumption of dividends with Board's intention to pay a
modest final dividend in respect of FY20
Greg Fitzgerald, Chief Executive, commented:
"I am incredibly proud of all that the Group has achieved in
2020 and I would like to thank our employees for their effort and
commitment. At the start of the year our priority was to
successfully integrate the housing businesses and maximise the very
significant benefits from the exciting new combination. We expect
to deliver the full run rate of synergies of GBP44m by the end of
FY21, 27% greater than initially expected and achieved at a lower
cost.
Customer satisfaction has remained a key priority during 2020.
The Group's HBF customer satisfaction score has been consistently
above 90% and we expect to be awarded the maximum 5-star rating for
2020.
Vistry Partnerships has made excellent progress against its
ambitious growth strategy in 2020 with a near 30% increase in mixed
tenure completions. The Group has strong forward sales and is well
positioned to deliver a significant step-up in profitability in
2021.
I am delighted to report a net cash position of GBP38m as at 31
December 2020, reflecting our strong second half performance and
firm focus on cash management. Given the robust balance sheet
position, the Board now expects to resume dividend payments with a
modest final dividend in respect of FY20."
Strong demand
We have seen strong demand for our homes during 2020 with the
Group's private sales rate per outlet per week increasing by 15% in
the second half to 0.62 (H2 19: 0.54). Encouragingly, customers
continued to reserve homes during the second national lockdown in
November, and throughout December, with our underlying sales rate
up c. 20% in the last 6 weeks of the year compared to the prior
year equivalent period.
The Group has delivered completions in 2020 at the top end of
expectations reflecting a strong second half performance. Pricing
remained firm through the year and overall, we saw a modest
increase in underlying prices.
For FY21 we have secured 40% of Housebuilding's forecast private
units and 53% of Partnerships' forecast private mixed tenure units.
Importantly, this includes a significant number of units for
completion in Q2 2021, reserved by customers despite the changes to
Help to Buy and the expected end to the Stamp Duty holiday at the
end of Q1. In total we have 55% of total Housebuilding and
Partnership mixed tenure forecast units for FY21 already
secured.
Housebuilding has entered into a new agreement with Heylo
Housing for 1,000 private units to be delivered in FY21 and FY22
(33 units included in Housebuilding forward sales). Our customers
will utilise Heylo's shared ownership scheme, Home Reach, which has
been selling well.
Vistry Partnerships' partner delivery (contracting) business has
80% of FY21 forecast revenue secured with a forward order book
totalling GBP800m.
Operational update
Building high quality new homes and providing our customers with
excellent service has remained a top priority during 2020. Our HBF
Customer Satisfaction score for the year from 1 October 2019 is
ahead of the prior year and we are confident the Group will be
awarded the maximum 5-star HBF customer satisfaction rating for
2020. In addition, the new survey year has started well.
Our supply chain has remained resilient despite the challenges
of both the pandemic and Brexit. We value our close working
relationships with our suppliers and maintain regular dialogue with
them to ensure we see a good supply of build materials and labour.
In 2020, we saw low levels of cost inflation and expect this to
continue into 2021.
The health and safety of our employees, sub-contractors,
suppliers and customers remains a key priority. The construction
industry has adapted well to working in a COVID-secure manner and
we have comprehensive, COVID-secure working practices embedded
across all areas of our business. There has been no requirement to
change our business operations with this third national lockdown
and all our sites remain open, with productivity at normal
levels.
Vistry Housebuilding
Housebuilding delivered a total of 4,652 (FY19 proforma: 6,884)
completions, including 820 (FY19 proforma: 946) from JVs. Private
units in the year totalled 3,668 (FY19 proforma: 4,775) with 984
(FY19 proforma: 2,109) affordable units.
Total Housebuilding average selling price for FY20 was c.
GBP302k with a private average selling price of c. GBP344k.
Housebuilding is currently operating from 146 active sites and we
expect the average for FY21 to be c. 150 sites.
Vistry Partnerships
Vistry Partnerships made excellent progress in the year
demonstrating its high growth and robust operating model.
Mixed tenure completions increased by 28% in FY20 to 1,479 (pro
forma FY19: 1,158) units, with completions in the second half up
70% year on year to 990 (pro forma H2 2019: 584) units. The average
selling price of mixed tenure units in the year was GBP218k.
Partner delivery(3) equivalent units increased by c. 10% in the
year. There is continuing demand amongst housing associations and
local authorities to participate in joint ventures.
As at 31 December 2020 Vistry Partnerships was selling on 27
mixed tenure active sites and we expect this to increase to an
average of c. 32 for FY21.
Increased land activity
We have been active in the land market during 2020 and have
maintained the size of our controlled landbank at a total of c.
40,100 plots (31 Dec 2019 pro forma: 40,135).
In the year, Housebuilding secured 6,281 plots across 31
developments and has a strong land pipeline, with 100% of land
required for forecast FY21 completions secured.
Partnerships is investing in its owned land bank to support its
targeted step-up in mixed tenure and in the year secured 2,371
plots on 11 sites for mixed tenure development. It is also well
positioned with 100% of the land required for forecast FY21 mixed
tenure completions secured.
Strategic land is a key component of the Group's land supply and
as at 31 December 2020 the Group had a total of c. 34,050 (31 Dec
2019 pro forma: 31,965) strategic plots. In the year, we are
pleased to have secured options over 2,856 strategic land plots
across 10 developments.
Balance sheet
The Group had a net cash position of c. GBP38m as at 31 December
2020 (30 June 2020: net debt of GBP357.3m). This has been driven by
continued strong trading, good working capital management at an
individual business level, and the ongoing benefits from the
combination of the enlarged business.
The Group expects to carry an average net debt position in FY21
as we build for FY21 completions and deliver a stronger net cash
position at 31 December 2021.
The Group is operating with substantial funding headroom, with
committed banking facilities totalling GBP770m and well spread
maturities out to 2027.
While the scale of the land bank has been maintained, the Group
land creditor position as at 31 December 2020 is expected to be
lower than the GBP372.3m as at 30 June 2020.
Dividend
With the Group's strong second half performance, the year-end
net cash position and record forward sales, the Board is pleased to
confirm its intention to resume dividend payments with a modest
final dividend in respect of FY20.
Sustainability
During the year the Group has also prioritised a review of both
performance and reporting around the broad scope of sustainability,
including not only climate change, but also wider considerations of
the environmental and social aspects of the way we operate. We will
update on our achievements and importantly our targets when we
report in February.
Outlook
Looking to FY21 we are alert to the wider market uncertainty,
including the potential implications of the most recent lockdown,
as well as for housebuilding specifically the changes from an end
to the stamp duty holiday and existing Help to Buy scheme at the
end of Q1. We are encouraged by the strength of the market in 2020
and the levels of demand during the second national lockdown in
November, and whilst very early, we have seen no impact from this
third national lockdown. Assuming stable market conditions, the
Group remains confident it can deliver a step-up in completions for
both Housebuilding and Partnerships in FY21 and increase Group
profit before tax(1) to GBP310m.
There will be a conference call for analysts at 8:30am this
morning. To join the call please dial: +44 (0)330 336 9411,
confirmation code: 3607308. A replay facility will be available on
our corporate website shortly after: www.vistrygroup.co.uk
Forward sales (GBPm) 31 December
2020
--------------------------------- ------------
Housebuilding
* Private 533
* Private JVs (100%) 176
* Affordable 389
* A ffordable JVs (100%) 119
Total Housebuilding 1,217
Partnerships
* Mixed tenure 145
* M ixed tenure JVs (100%) 200
Total mixed tenure 345
Total development 1,562
Total contracting 800
Total Group 2,362
--------------------------------- ------------
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is being
released on behalf of Vistry Group PLC by Earl Sibley, Chief
Financial Officer.
Certain statements in this press release are forward looking
statements. Forward looking statements involve evaluating a number
of risks, uncertainties or assumptions that could cause actual
results to differ materially from those expressed or implied by
those statements. Forward looking statements regarding past trends,
results or activities should not be taken as representation that
such trends, results or activities will continue in the future.
Undue reliance should not be placed on forward looking
statements.
For further information please contact:
Vistry Group PLC
Earl Sibley, Chief Financial
Officer
Susie Bell, Head of Investor
Relations 01675 437160
Powerscourt
Justin Griffiths
Nick Dibden
Victoria Heslop 020 7250 1446
[1] Pre-exceptional items and amortisation of acquired
intangible assets
[2] Net cash / debt is quoted excluding IFRS16 lease liabilities
and includes GBP7.4m (HY20: GBP7.8m) impact from the fair value of
future interest payments on US Private Placement notes
[3] Formerly classified as Vistry Partnerships contracting
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END
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