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RNS Number : 7213R
Vistry Group PLC
09 November 2021
9 November 2021
Vistry Group PLC
Trading update
Vistry Group PLC (the "Group") is issuing a scheduled trading
update ahead of its Capital Markets Day to be held later today for
the period from 1 July to 8 November 2021 ("the Period").
Highlights
-- Strong demand continues with the average weekly private sales
rate for the year to date increasing to 0.77
-- Fully sold for FY21 and strengthened forward sales position for FY22
-- Continued investment in land with addition of 9,101 new plots in the year to date
-- Firmly on track to deliver full year profit before tax[1] for
FY21 of c. GBP345m and target of c. GBP225m net cash at year
end
-- Positive outlook for FY22 with the Group making good progress towards its medium term targets
Greg Fitzgerald, Chief Executive said:
"We are making great progress towards our targets in both
Housebuilding and Partnerships, with a firm focus on maximising the
strengths and opportunities from our unique combination.
We continue to see strong demand across all our business areas
and working in close partnership with our supply chain, we are
actively mitigating any supply chain pressures. As a result, we are
firmly on track to deliver a significant improvement in profits
this year.
The outlook is positive, and we are confident we will see a
further step up in performance in FY22 as we drive towards
achieving our medium term targets. Delivering high quality,
sustainable homes and communities, providing excellent customer
service and investing in our people are all at the core of how we
operate and are key to our ongoing success."
Trading
We continue to see strong demand across all business areas with
our average weekly private sales rate increasing to 0.77 for the
year to date, slightly ahead of the 0.76 reported in the first
half. With this strong demand, pricing has continued to move
forward across all areas, although more modestly in the period.
The Group's forward sales position has strengthened to GBP3bn
and we are fully sold for FY21. Housebuilding forward sales total
GBP1.6bn, Partnerships' mixed tenure forward sales total GBP511m
and the Partner Delivery forward order book totals GBP855m.
Customer satisfaction remains a key priority and our HBF
Customer Satisfaction score for the year from 1 October 2020
continues to trend above 90%. We remain confident of achieving the
maximum 5-star HBF customer satisfaction rating for 2021.
We continue to see some pressure across the building materials
supply chain resulting in extended lead times and inflationary
price increases on certain products, although there are now some
signs of improvement. Working in close partnership with our
suppliers we are actively managing this and have full visibility on
our material requirements for FY21 completions. We expect
construction output in the first half of 2022 to be similar to that
achieved in the first half of 2021. The supply agreements entered
into on the formation of Vistry Group are delivering an enhanced
service and have provided some protection in respect of cost
inflation. We currently expect our build cost inflation to run at
c. 4-5% for the next 12 months with materials pressure reducing and
labour inflation continuing. Overall, we have seen the benefit from
sales price increases more than offset cost inflation.
Land
We continue to see a good supply of high-quality land
opportunities that at least meet our minimum hurdle rates.
Housebuilding has secured 2,230 plots across 11 developments in the
period resulting in a total of 6,373 plots across 31 development
secured in the year to date. Housebuilding has excellent visibility
with 100% of land required for FY22 completions secured and 81% of
land for forecast FY23 completions secured.
Partnerships is acquiring land to support its strong growth in
mixed tenure completions with 1,229 mixed tenure plots across six
developments acquired in the period resulting in a total of 2,728
plots across 14 developments acquired in the year to date.
Partnerships is well positioned to deliver on its planned growth
with 100% of land required for forecast FY22 mixed tenure
completions secured, and 73% of land for forecast FY23 completions
secured.
Sustainability
In September, we announced our formal commitment through the
Science Based Targets initiative that our carbon reduction targets
will be aligned with action that is required to limit global
warming to 1.5degC. Further to that announcement, we have now
formally committed to the Business Ambition for 1.5degC campaign,
joining the Race to Zero. A key enabler for us to achieve our
sustainability ambitions is to ensure our people have the relevant
sustainability skills. Vistry Group is now a corporate partner and
approved training centre of the Institute of Environmental
Management and Assessment (IEMA). As a registered training centre
Vistry can provide high standards of quality assurance along with
training on environmental management and sustainability. Our people
will benefit as we commit to environmental best practice by being
the first in the industry to establish this corporate
partnership.
Outlook
The Group is firmly on track to deliver management's
expectations of full year adjusted profit before tax(1) for FY21 of
c. GBP345m. Our expectations for FY21 month-end net debt of less
than GBP125m and year-end net cash of c. GBP225m also remain on
track.
Looking to FY22, our Housebuilding business is in great shape to
deliver increased returns driven by controlled volume growth and a
further improvement in gross margin to c. 23%.
Vistry Partnerships is making excellent progress with its
strategy of rapidly growing higher margin mixed tenure revenues and
fully expects to deliver on its FY22 targets of at least GBP1bn
revenue, a 10% plus operating margin, and a return on capital
employed in excess of 40%. Over the medium term, the business sees
a clear trajectory to deliver revenues of c. GBP1.6bn and an
operating margin in excess of 12%.
With regard to capital allocation, the Board is committed to
prioritising investment in the business to support the Group's
growth strategy, pursuing a sustainable two times dividend cover
policy, and to returning any excess capital generated in the future
to shareholders via either a share buyback or special dividend.
Capital Markets Day
Vistry Group is holding a Capital Markets Day at its development
at North Whiteley near Southampton today for financial analysts and
institutional investors. There will be no further new disclosures
on current trading. Copies of the presentation materials will be
available on Vistry's corporate website www.vistrygroup.co.uk
following the event.
Forward sales (GBPm) 8 Nov 2021 3 Sept 2021
-------------------------------- ----------- ------------
Housebuilding
* Private 790 713
* Private JVs (100%) 295 276
* Affordable 452 456
* Affordable JVs (100%) 105 106
Total Housebuilding 1,642 1,551
Partnerships
* Mixed tenure 216 221
* Mixed tenure JVs (100%) 295 306
Total Mixed tenure 511 527
Total Development 2,153 2,078
Total Partner delivery 855 890
Total Group 3,008 2,968
-------------------------------- ----------- ------------
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) Adjusted profit before tax is stated excluding exceptional
items and amortisation of acquired intangibles
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END
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