TIDMVTY
RNS Number : 6924Y
Vistry Group PLC
08 September 2022
8 September 2022
Vistry Group PLC - Half year results
Vistry Group PLC (the "Group") is issuing its results for the
six-month period ended 30 June 2022.
Greg Fitzgerald, Chief Executive commented:
"The Group has delivered an excellent performance in the first
half, significantly exceeding our expectations at the start of the
year. Operationally we are in great shape, and with our leading
capability across all housing tenures, are very well positioned to
maximise the broader market opportunity in the coming period.
We have made a solid start to the second half and are well
positioned for the full year with our Housebuilding and
Partnerships mixed tenure forward sales position up 10% on prior
year and 96% of our forecast completions for FY 22 secured. Whilst
mindful of the impact of wider economic uncertainties including
rising energy costs, we continue to expect to see a significant
step-up in profitability in both Housebuilding and Partnerships in
FY 22, with adjusted Group profit before tax to be in-line with our
previously upgraded expectations."
First half highlights
-- Excellent H1 performance, ahead of our expectations at the
start of the year and significantly ahead of a strong performance
in H1 21, supported by positive market trends
-- Housebuilding completions 1 increased to 3,219 (H1 21: 3,126)
units with adjusted gross margin 2 improving to 23.0% (H1 21:
21.8%) and return on capital employed 3 increasing to 21.7% (H1 21:
17.4%)
-- Vistry Partnerships continues to realise its strategy of
delivering rapid growth in higher margin mixed tenure revenues, up
33.7% in the period resulting in an improved H1 adjusted operating
margin(1) of 10.2% (H1 21: 9.1%) whilst retaining a return on
capital employed in excess of 40%
-- Group adjusted profit before tax 4 increased by 14.3% to
GBP189.9m (H1 21: GBP166.1m) and on a reported basis 5 was
GBP111.3m (H1 21: GBP156.2m)
-- As expected, the Group has taken an additional fire safety
provision of GBP71.4m in the first half to meet the liabilities
covered by the Pledge and the project management costs
-- Successful period in the land market growing the size of our
owned and controlled landbank through the addition of 5,526 (H1 21:
5,642) plots at an average gross margin and return on capital
employed above 25% for Housebuilding, and land intake margins for
Partnerships at the upper end of our target range
-- Another period of strong cash generation with the Group net
cash 6 position increasing to GBP115.0m as at 30 June 2022 (30 June
2021: GBP31.6m), reflecting the strength of the first half
performance, and Group month-end average net debt for the rolling
12 months to 30 June 2022 reducing to GBP73m (30 June 2021:
GBP239m)
-- Group return on capital employed 7 increased to 24.0% (H1 21: 19.1%)
-- Group GBP35m share buyback programme announced on 27 May
2022, successfully completed on 20 July 2022
-- Board is pleased to announce an Interim dividend of 23 pence
per share (2021: 20 pence per share)
Current trading and outlook
-- The Group's average private weekly sales rate for the year to
date remains ahead of last year at 0.78 (2021: 0.75) with demand in
the second half reflecting the more typical seasonal trends seen
prior to 2020
-- We continue to see a good level of prospects and pricing
remains firm. Our Partnerships business is extremely well
positioned to meet the very high level of counter-cyclical demand
across all tenures
-- We are seeing some early signs that the land market is
settling after a more heightened period of demand
-- Forward sales position further strengthened with total
Housebuilding and Partnerships' mixed tenure forward sales up 10%
on the prior year position at GBP2,287m (3 Sept 2021: GBP2,078m),
representing 96% of total forecast units for FY 22 secured. The
Partner Delivery forward order book totals GBP827m (3 Sept 2021:
GBP890m) with 96% of forecast FY 22 revenue secured
-- Our total costs were up on average 6% in the first half, and
reflecting increasing energy prices, cost inflation is now running
at c. 8%. Selling price increases have offset cost increases in the
year to date
-- We continue to expect to deliver a significant improvement in
year on year profitability in both our Housebuilding and
Partnerships in FY 22, ahead of our expectations at the start of
the year
-- Whilst we are mindful of the wider economic uncertainties, we
remain positive on our outlook and continue to expect adjusted
profit before tax for FY 22 to be c. GBP417m
Recommended cash and share combination of Vistry Group PLC and
Countryside Partnerships PLC
We announced on 5 September 2022 that the boards of directors of
Vistry Group PLC and Countryside Partnerships PLC have reached
agreement on the terms of a recommended cash and share combination
pursuant to which Vistry will acquire the entire issued and to be
issued ordinary share capital of Countryside Partnerships PLC (the
"Combination"). The Combination is to be effected by means of a
scheme of arrangement under Part 26 of the Companies Act.
The Combination would create one of the country's leading
homebuilders, comprising a top tier housebuilder and leading
partnerships business, with capability across all housing tenures,
and delivering much needed affordable housing. The Combination has
a strong strategic rationale and the potential for material value
creation for shareholders in the Combined Group.
It is expected that the Scheme Document, Vistry Circular and
Vistry Prospectus will be published in early October 2022 and that
the Court Meeting, the Countryside Partnerships PLC General Meeting
and the Vistry General Meeting will be held on or around the same
time during late October 2022 or early November 2022. Subject to
the satisfaction or (where applicable) waiver of the Conditions,
the Combination is expected to become Effective by the end of the
first quarter of 2023.
1 Including 100% of JVs
(2) Group financials are shown on an adjusted basis to include
the proportional contribution of the joint ventures. Figures are
shown excluding exceptional expenses of GBP71.4m (H1 21: GBP2.8m)
and amortisation of acquired intangibles of GBP7.1m (H1 21:
GBP7.1m)
3 Return on capital employed is calculated as adjusted operating
profit as divided by TNAV (excluding fire safety provision) for 12
months to 30 June 2022
(4) Adjusted profit before tax is stated excluding exceptional
items and amortisation of acquired intangibles
(5) Includes exceptional cost of GBP71.4m in H1 22 related to
the provision for estimated costs in relation to legacy property
cladding and fire safety
(6) Net cash includes GBP106.0m (H1 21: GBP106.9m) related to
USPP notes payable, which is inclusive of GBP6.0m (H1 21: GBP6.9m)
fair value of future interest payments
(7) Return on capital employed calculated as adjusted rolling 12
month operating profit to 30 June 2022 divided by average capital
employed (excluding goodwill, intangible assets, net cash, fire
safety provision and pension surplus)
There will be an investor and analyst presentation at 9:00 a.m.
today, 8 September 2022 at Numis, 45 Gresham St, London EC2V 7BF.
There will also be a live webcast of this event available on our
corporate website at www.vistrygroup.co.uk or via the following
link
https://stream.brrmedia.co.uk/broadcast/62f1061e2c785a4107c35e51
A playback facility will be available shortly afterwards at
www.vistrygroup.co.uk .
Certain statements in this press release are, or may be deemed
to be, forward looking statements. Forward looking statements
involve evaluating a number of risks, uncertainties or assumptions,
many of which are beyond the Group's control, 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. Forward looking statements speak only as at the date of
this document and the Group and its directors and officers
expressly disclaim any obligation or undertaking to release any
update of, or revisions to, any forward looking statement
herein.
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
Key financials H1 22 H1 21 Change
------------------------------ ------------ ------------ --------
Total completions(1) 5,409 5,151 +5.0%
Adjusted revenue(2) GBP1,328.3m GBP1,259.4m +5.5%
Adjusted operating profit(2) GBP198.2m GBP175.5m +12.9%
Adjusted profit before
tax(4) GBP189.9m GBP166.1m +14.3%
Adjusted earnings per
share8 67.4p 59.0p +14.2%
Reported results H1 22 H1 21 Change
------------------------------ ------------ ------------ --------
Group revenue9 GBP1,163.0m GBP1,129.4m +3.0%
Operating profit/(loss) GBP89.3m GBP139.1m -35.8%
Profit/(loss) before
tax GBP111.3m GBP156.2m -28.7%
Earnings/(loss) per share 39.1p 54.8p -28.6%
Net cash(6) GBP115.0m GBP31.6m +263.9%
Forward sales (GBPm) 3 Sept 2022 30 June 2022
-------------------------------- ------------ -------------
Housebuilding
* Private 811 718
* Private JVs (100%) 251 230
* Affordable 473 450
* Affordable JVs (100%) 105 108
Total Housebuilding 1,640 1,506
Partnerships
* Mixed tenure 347 342
* Mixed tenure JVs (100%) 300 296
Total Mixed tenure 647 638
Total Development 2,287 2,144
Total Partner delivery 827 835
Total Group 3,114 2,979
-------------------------------- ------------ -------------
Dividend timetable
---------------------- -----------------
Ex-dividend date 6 October 2022
Dividend record date 7 October 2022
Dividend payment date 18 November 2022
---------------------- -----------------
(8) Adjusted EPS is calculated based on profit after tax
attributable to equity shareholders before exceptional items,
amortisation of acquired intangibles and tax thereon, over the
weighted average number of ordinary shares in issue during the
period
(9) Revenue for comparative period has been restated in relation
to trading with our joint ventures (see note 1 in our Financial
Statements)
Chief Executive's Review
First half review
It has been an excellent first half for the Group characterised
by a strong financial performance and further operational
improvements. I would like to thank all our people for their hard
work and commitment in delivering this performance.
We have seen positive demand across all business areas, with the
Group's average weekly private sales rate increasing to 0.84 (H1
21: 0.76) in H1 22, up 11% on what was a strong performance in the
prior year. Alongside this strong demand, we have achieved
sustained price increases across all of our geographies.
Growing need for housing across all tenures from local
authorities, housing associations, the private rented sector and
elderly accommodation providers is driving very high demand in our
Partnerships business. With our established relationships, leading
capability and extensive track record, Vistry Partnerships is
extremely well positioned to maximise the benefit of this demand
across the cycle.
The Group achieved adjusted revenues of GBP1,328.3m (H1 21:
GBP1,259m), 5.5% ahead of the prior year. Housebuilding adjusted
revenues increased by 3.9% to GBP902.4m (H1 21: GBP868.7m), in-line
with the business's strategy of controlled volume growth.
Partnerships delivered a 9.0% increase in H1 adjusted revenues to
GBP425.9m (H1 21: GBP390.6m), driven by a further step up in higher
margin mixed tenure revenues to GBP219.3m (H1 21: GBP164.0m).
Housebuilding is making excellent progress towards achieving its
targets of 25% gross margin and 25% return on capital employed by
2025, with adjusted gross margin in the first half increasing to
23.0% (H1 21: 21.8%), ahead of our expectations at the start of the
year. The business has benefited from strong house price inflation
more than offsetting cost inflation in the period, and is seeing
the benefits from higher margin land, dual branding and on-going
improvements in build processes.
Partnerships increased its adjusted operating margin to 10.2%
(H1 21: 9.1%) in the period, again ahead of our expectations at the
start of the year. This has been driven by an increased proportion
of higher margin mixed tenure revenues, now 52% (H1 21: 42%) of
total Partnerships revenues.
Overall, the Group delivered adjusted profit before tax of
GBP189.9m (H1 21: GBP166.1m), ahead of management's expectations,
and adjusted earnings of 67.4 pence per share (H1 21: 59.0).
In the period the Group has taken an exceptional expense of
GBP71.4m related to the provision for estimated costs in relation
to property cladding and fire safety, and on a reported basis,
delivered profit before tax of GBP111.3m (H1 21: GBP156.2m) and
earnings of 39.1 pence per share (H1 21: 54.8).
Our sites are operating well, with good labour availability, and
have benefitted in the period from improvements in the supply of
materials and the strong partnerships we have across our supply
chain. This year the Group received its highest number of NHBC
Pride in the Job Quality Awards winners with 29 site managers
receiving the accolade, and a further two Premier Guarantee
Excellence awards. Our Construction Quality Review and Reportable
Item scores, independent measurements of build quality, remain
ahead of industry benchmarks.
Wider industry cost pressures, specifically rising energy costs
and increasing wages, are resulting in higher costs across the
business. In Partnerships, where we have a higher element of fixed
revenue, we manage our risk in the pre-procurement phases through
passing elements of cost risk to our sub-contractors, include a
sensible level of cost contingency or fixed price allowances to
cover some level of inflation, and for long duration contracts,
seek to link the pre-sold revenue to a build cost inflation index.
On larger sites, we release phases and reprice at the commencement
of each phase. Our total costs were up on average 6% in the first
half, and reflecting increasing energy prices, cost inflation is
now running at c. 8%.
Planning remains the single most significant constraint on the
business, from continuing capacity issues within local planning
authorities, to the increasingly challenging political and
regulatory environment around issues such as nutrient neutrality.
We are responding proactively by factoring longer lead times into
our site forecasting and increasing our expertise in these areas.
Our strong balance sheet and breadth of operations provide
confidence and resilience to cope with any specific issues.
The Group had a net cash position of GBP115.0m as at 30 June
2022, up from GBP31.6m in the prior year, reflecting the Group's
strong first half performance and ongoing robust working capital
management.
Group return on capital employed increased to 24.0% (H1 21:
19.1%), with Housebuilding increasing its return on capital
employed to 21.7% (H1 21: 17.4%) and Partnerships maintaining a
return on capital employed well in excess of 40%.
Fire safety
We continue to support Government's ambition to deliver a
lasting industry solution to fire safety, with the Group signing
the Pledge in April 2022. An additional provision of GBP71.4m has
been taken in the period to meet additional liabilities covered by
the Pledge of GBP49.9m, and GBP21.5m of project management costs as
previously guided. Negotiations are ongoing with the Government in
respect of the contractual agreement that would codify the specific
legal obligation that parties signing the pledge will have to
honour. Without any legal obligation to fulfil the Government's
view, no provision is being made for any additional remedial
charges. However, this could be in the range of GBP10m-GBP15m
should the Government's position prevail.
Sustainability
We continue to make progress with our sustainability strategy.
Our strategy is split into three priority areas of people,
operations and homes and communities and includes nine key
sustainability issues.
People: We are targeting 550 learners to pass through our
academies by 2025 and during H1 22, are pleased to report that 105
learners passed through our on-site skills academies. The academies
are designed to encourage people who are no longer in the education
system and who are not working, to be trained back into work
through offering work placements, apprenticeships and full-time
employment.
Operations: A key focus of our strategy is reducing our carbon
emissions and during H1 22 we submitted our carbon reduction
targets to the Science Based Targets Initiative for approval. We
are committed to reducing absolute scope 1 and 2 greenhouse gas
emissions by 37.8% by 2030, from a 2021 base year, and reducing
scope 3 emissions by 48% per m2 of completed housing by 2030, also
from a 2021 base year.
To ensure we meet these targets, we are developing a carbon
reduction plan to be published in the second half of this year,
focussed on our scope 1 and 2 emissions. This plan is based on
trials of carbon reduction technologies, such as hybrid generators,
eco cabins, remote energy monitoring and hydrotreated vegetable oil
fuel. Our plan complements our existing roadmap to net zero carbon
homes.
We have commenced a process of limited assurance of our
sustainability data using a third party, applying the International
Standard on Assurance Engagements 3000. We expect to achieve an
assurance statement during H2 22.
Homes and communities: Last year we set our roadmap to zero
carbon homes and are well underway, with the first step change of a
31% reduction on all new homes being planned. The Future Homes
Standard is bringing a 75-80% reduction and a move away from gas
fired fossil-fuel heating, making our homes zero carbon ready. We
are gearing up to this and trialling technology that will ensure we
meet these requirements. We are also trialling full zero carbon
developments which is the business plan for 2030, and are carefully
reviewing materials and completing whole life carbon assessments,
with our aim to be completely carbon zero by 2040.
A key focus area for us this year is to address changes in
Building Regulations relating to energy efficiency and other areas,
such as ventilation, and new areas such as the risk of overheating,
and providing EV charging points to our homes.
We are designing new house type ranges to meet future
requirements for energy efficiency and many other elements to make
our homes fit for the future. We are ensuring our homes have
adequate space requirements for low-carbon technologies such as air
source heat pumps with our housetype ranges designed to complement
low carbon technology, rather than trying to fit it into existing
designs.
Current trading and outlook
The Group's average private weekly sales rate for the year to
date remains ahead of last year at 0.78 (2021: 0.75) with demand in
the second half reflecting the more typical seasonal trends seen
prior to 2020. We continue to see a good level of prospects and
pricing remains firm. Our Partnerships business is extremely well
positioned to meet the very high level of counter-cyclical demand
across all tenures. In the land market, we are seeing some early
signs of settling, after a more heightened period of demand.
We have further strengthened our forward sales position with
total Housebuilding and Partnerships' mixed tenure forward sales up
10% on last year at GBP2,287m (3 Sept 2022: GBP2,078m) representing
96% of total forecast units for FY 22 secured. The Partner Delivery
forward order book totals GBP827m (3 Sept 21: GBP890m) with 96% of
forecast FY 22 revenue secured.
Our total costs were up on average 6% in the first half, and
reflecting increasing energy prices, cost inflation is now running
at c. 8%. Price increases have offset cost increases in the year to
date.
We continue to expect to deliver a significant improvement in
year on year profitability in both our Housebuilding and
Partnerships in FY 22, ahead of our expectations at the start of
the year. Whilst we are mindful of the wider economic
uncertainties, we remain positive on our outlook and continue to
expect adjusted profit before tax for FY 22 to be c. GBP417m
Operational update
Trading performance
In the period, good progress was made across all areas of the
business with the significant benefits and opportunities of the
Group's unique market positioning and capability being realised.
The strong business performance was consistent throughout the first
half and across all of our geographies. In line with this strong
demand, our private units saw prices increase by 5% to 8% during
the period. The Group delivered a total of 5,409 (H1 21: 5,351)
completions in the period.
Our Housebuilding business is pursuing a strategy of controlled
volume growth, and in the period increased completions by 3% to
3,219 units (H1 21: 3,126) with an average selling price of GBP317k
(H1 21: GBP301k) and a private average selling price of GBP369k (H1
21: GBP351k), up 5% on prior year. On average, in the period, the
business sold from 143 (H1 21: 145) sites. I am delighted to report
that Housebuilding delivered a strong improvement in adjusted gross
margin to 23.0% (H1 21: 21.8%), ahead of our expectations at the
start of the year and in line with the business' target for the
full year.
Partnerships continues to make excellent progress with its
strategy of rapidly growing higher margin mixed tenure revenues,
with mixed tenure completions increasing by 24% in H1 to 1,106 (H1
21: 895) and an average selling price of GBP251k (H1 21: GBP251k).
The business operated from an average of 29 (H1 21: 32) mixed
tenure sites in the period with good sales rates leading to outlets
closing earlier than expected and specific planning delays
impacting the timing of new openings. The level of mixed tenure
outlets is expected to grow through the second half. Partner
delivery performance was in-line with our expectations delivering
revenue of GBP204m (H1 21: GBP227m). Partnerships also continues to
drive forward profitability with adjusted operating margin
increasing to 10.2% (H1 21: 9.1%), ahead of our 10.0% target for
the full year.
Group adjusted revenues increased by 6% to GBP1,328.3m (H1 21:
GBP1,259.4m) driven by both volume and price increases.
H1 22 H1 21 Change
Housebuilding completions
10
* Private 1,816 1,853 -2.0%
639 441 44.9%
643 669 -3.9%
* Private JVs (100%) 121 163 -25.8%
3,219 3,126 3.0%
GBP902.4m GBP868.7m 3.9%
* Affordable
* Affordable JVs (100%)
Total Housebuilding completions
Housebuilding adjusted
revenue
------------ ------------ ---------
Partnerships completions
(1) (0)
* Mixed tenure 643 432 48.8%
463 463 0.0%
1,106 895 23.6%
* Mixed tenure JVs (100%)
Total mixed tenure
------------ ------------ ---------
GBP222m GBP164m 35.7%
* Mixed tenure GBP204m GBP227m -10.1%
GBP425.9m GBP390.6m 9.0%
* Partner delivery
Total Partnerships adjusted
revenue
------------ ------------ ---------
Total Group adjusted revenue GBP1,328.3m GBP1,259.4m 5.5%
------------ ------------ ---------
(10) Completions include 100% of JVs
Quality and customer service
Delivering high quality new homes and excellent customer
satisfaction remain our key priorities and we were pleased to be
awarded the maximum 5-star HBF customer satisfaction rating in the
most recent annual review for the third consecutive year, with our
score at 92% in the most recently published HBF 12-month rolling
customer satisfaction data. We remain focused on improving our
score for the HBF customer satisfaction survey which is sent out
nine months after completion and are very encouraged to see our
current score increasing to 79.0%, in-line with the industry
benchmark and up from 73.5% in the prior year equivalent
period.
The Group welcomes the New Home Quality Code and has reviewed
our current processes and policies to ensure our alignment with it.
Our 'Vistry Customer Journey' introduced in 2021 places us in a
very good position, and we have introduced new elements to our
customer relationship management system, Keys, including a new
complaints process, appointed a dedicated project manager to manage
the implementation of the Code, and are providing training across
the business.
People
Our people make Vistry and are critical to the on-going success
of the Group, and we are delighted to report a further improvement
in employee engagement score, with our most recent Peakon
engagement survey (July 2022) achieving a score of 8.6, up from 8.5
in January and firmly in the top 10% of companies completing this
survey. We introduced a cost of living wage adjustment across the
business in the first half, weighted most strongly toward our lower
earners, and are pleased to report that the level of voluntary
staff turnover is down despite a tight labour market.
The three main themes of our people strategy are attracting the
right people and making Vistry an employer of choice, developing
our employees through giving them a career and not just a job, and
retaining our employees by making Vistry a great place to work.
In the current climate, attracting excellent people is key and
following feedback from our employees and focus groups we have
developed the Vistry Employee Value Proposition to highlight all
the great things we do as an employer. In addition, we have
introduced a number of initiatives to promote recruitment through
direct channels, and these are working well, with over 70% of new
starters in H1 coming to us this way.
Investment in the development and training of our people remains
a key priority, with our focus on learning, leadership, and
management development. As part of the appraisal process this year
we launched Career Development Plans for all employees, the
increasing opportunities on our Vistry Learn online learning
platform continue to support our employees with an extensive range
of training and personal development, c. 50 employees will complete
our leadership programme delivered in conjunction with Cranfield
School of Management during 2022, and we have trained more than 50
mentors across various disciplines for our Vistry Mentoring
Programme with more training planned.
Land
The Group had a successful six months in the land market
securing a total of 5,526 plots and increasing the size of its
overall landbank to 42,869 (30 June 2021: 42,033) plots.
Housebuilding secured 3,360 (2021: 4,143) plots across 16 (2021:
20) developments and has 100% of the land it requires for FY 23
completions secured and a 4.6 year land supply. Land has been
acquired on average above the minimum hurdle rates of 25% gross
margin and 25% return on capital employed.
Partnerships continues to invest in its owned land bank to
support its rapid growth in mixed tenure with 2,166 (2021: 1,499)
plots on 12 (2021: 8) sites secured in the first half, well in
excess of completion volume. Margins on new developments secured in
the period have been at the upper end of our targeted range across
Partnerships, supporting our medium term operating margin target of
at least 12% and return on capital in excess of 40%. This growing
business is well positioned with 90% of the land required for FY 23
mixed tenure completions secured.
In addition, the unique combination of Housebuilding and
Partnerships has enabled us to acquire a number of larger sites,
supporting the accelerated delivery of new homes as we utilise the
multi-tenure capabilities and differentiated brands within the
business.
With our strong strategic land capability, we remain focused on
strategically sourced land and are targeting 30% of total
completions to be delivered from higher margin strategic land in
the medium term. In the first half, we secured 2,518 (2021: 4,660)
plots on 6 (2021: 6) strategic land sites and pulled through 1,852
strategic land plots across 5 sites into the owned land bank.
Balance sheet and liquidity
It has been another period of strong cash generation with the
year on year Group net cash position increasing to GBP115.0m as at
30 June 2022 (30 June 2021: GBP31.6m), reflecting the strength of
the first half performance. Our month-end average net debt for the
rolling 12 months to 30 June 2022 reduced significantly to GBP73m
(30 June 2021: GBP239m).
Group strategy
One Vistry
Vistry Group exists to develop sustainable new homes and
communities across all sectors of the UK housing market and is
targeting sector leading return on capital employed in the medium
term.
We are a top five national housebuilder with a leading
partnerships business. We have a strong market position and
capability across all housing tenures making us uniquely positioned
to take advantage of the strong, under supplied housing market in
England. With our combination of Housebuilding and Partnerships, we
are the leading private sector provider of high demand, high growth
affordable housing.
The Group has a high quality, deliverable consented land bank
combined with an excellent strategic land capability, and as One
Vistry we are especially focused on maximising the returns from
larger multi tenure developments. In the first half of 2022 , our
Housebuilding and Partnerships businesses together continued to
secure new, high quality development opportunities, while working
successfully alongside each other on a number of existing sites,
with this joint approach delivering enhanced overall returns.
Housebuilding
Housebuilding is focused on delivering controlled volume growth
and significant margin progression from its existing operating
structure and is making excellent progress towards its medium-term
targets of 25% adjusted gross margin and 25% return on capital
employed by 2025 ('25x25x25').
The business has national coverage through its 13 operating
regions with each targeting annual output of between 550 to 625
units including JV's, giving an overall volume capacity for
Housebuilding of more than 8,000 units (2021 total Housebuilding
completions including JVs: 6,551) in the medium term. The business
is targeting controlled volume growth from this existing business
structure.
Housebuilding delivered a step up in adjusted gross margin in
the period to 23.0%, progressing towards its target of 25% by 2025
and increased its return on capital employed to 21.7%. Key to
driving returns are:
Land buying: leveraging the 'One Vistry' proposition and
relationships including joint bids with Vistry Partnerships on
larger developments
Strategic land: maximising our strong in-house capability,
targeting 30% of completions from strategic land
Operating structure: increasing volumes through business'
existing infrastructure, with a highly experienced leadership team
in place
Future Homes Standard: continual review of build product and
processes, no 'Green Premium' factored in to date
Multiple branding: increasing proportion of multiple branded
developments on Housebuilding sites
Extras: our improving offering and customer proposition is
delivery strong growth in profitable 'Extras' revenues
Partnerships
Vistry Partnerships holds a leading position within the
partnerships market, with its established relationships, key
capability and extensive track record, its key competitive
advantages.
The business delivers across the full range of housing tenures
including affordable rent, extra care, elderly accommodation, PRS,
shared ownership and open market sales. Its broad and
differentiated client base including Local Authorities, Housing
Associations and investment companies want a 'trusted one-stop
shop' that is able to meet its needs across all housing tenures and
products.
Vistry Partnerships' business model has a robust and
counter-cyclical revenue stream reflecting the very high level of
demand for affordable housing, cross party government support for
affordable housing, and a large, well-funded and diverse, client
base. Partnerships requires a minimum of 50% pre-sold revenues on
all its developments, with a large number having a significantly
higher proportion.
The business is making excellent progress with its strategy of
driving rapid growth in mixed tenure revenue and is firmly on track
to deliver on its 2022 targets of GBP1bn revenue, an adjusted
operating margin of at least 10% whilst maintaining a return on
capital employed in excess of 40%.
In the medium term, Partnerships is targeting average revenue
growth of 12% p.a. and GBP1.6bn of revenue, an operating margin of
at least 12% whilst maintaining return on capital employed in
excess of 40%.
Key to delivering this strategy is maximising the benefits of
One Vistry, including access to capital, land buying expertise and
strategic land capability, retail brand strength, and procurement
savings and buying power.
Board of Directors
As previously announced, Ian Tyler stepped down as Chairman of
the Company at the Group Annual General Meeting on 18 May 2022
after eight and a half years in the role, with Ralph Findlay
succeeding him as Chairman effective from that date. Ralph Findlay
had served as a Non-Executive Director of the Company since April
2015, had chaired the Audit Committee and was Senior Independent
Director. Ashley Steel who joined the Board in June 2021 has been
appointed as Senior Independent Director.
At the AGM on 18 May 2022, the Board was delighted to appoint
Rowan Baker as a Non-Executive Director of the Company, as Chair of
the Audit Committee and a member of the Nomination Committee and
the Remuneration Committee. Rowan is a highly experienced Chief
Financial Officer in construction and development and her financial
expertise and sector experience further strengthens the Board.
Capital allocation and dividends
With balance sheet strength, our priority remains investing in
the business to support the Group's growth strategy. The
Housebuilding business remains focused on controlled volume growth,
driving margins and return on capital employed, while Partnerships
continues to drive rapid growth in its higher margin mixed tenure
revenues whilst retaining its higher return on capital
employed.
The Group stated that surplus capital, following investment in
the business to support the Group's growth strategy and the payment
of ordinary dividend, would be returned to shareholders.
On 27 May 2022 the Group announced the commencement of a share
buyback programme to repurchase up to GBP35m of ordinary shares.
This was completed on 20 July 2022. The Board considers that it
returned a prudent level of cash to shareholders, which reflected
the robust trading of the Group, while also retaining a strong
balance sheet.
Financial review
Trading performance
Trading in the first six months of the year has been positive
and we experienced strong demand across all areas of the business
with a sales rate of 0.84 (2021: 0.76) and the cancellation rate
remaining stable. We are cognisant of the potential headwinds
facing the sector as interest rates rise and cost of living
increases continue to impact consumer confidence although we have
yet to see these headwinds adversely impact the business.
Total completions
During the first half the Group delivered 5,409 (H1 21: 5,351)
legal completions, including 100% of JV completions, representing a
1.1% increase to the prior year. This growth was driven primarily
by Partnerships and reflects the investment we have made in mixed
tenure in 2021 and 2022 as part of our growth strategy for this
segment.
Housebuilding H2 22 H1 21 Change
-------------------------- ------ ------ -------
Private 1,816 1,853 -2.0%
Affordable 643 669 -3.9%
JV's (100%) Private 639 441 +44.9%
JV's (100%) Affordable 121 163 -25.8%
Total Housebuilding 3,219 3,126 +3.0%
Partnerships
-------------------------- ------ ------ -------
Mixed tenure 643 432 48.8%
JV's (100%) Mixed tenure 463 463 0.0%
Total mixed tenure 1,106 895 +23.6%
Total completions (10) 4,325 4,021 +7.6%
Partner delivery units 1,084 1,330 -18.5%
Revenue
Total adjusted revenue(2) , including share of JV revenue of
GBP1,328.4m, was 5.5% higher than the same period last year (H1 21:
GBP1,259.4m). On a reported basis(5) revenue was GBP1,163.0m, 3.0%
higher than prior year (H1 21: GBP1,129.4m).
Reported revenue and cost of sales for H1 21 comparative period
has been restated in relation to trading with our Joint ventures
(11) .
Adjusted gross and operating profit
Adjusted gross profit(2) was GBP280.5m in H1 22 (adjusted gross
margin(2) : 21.1%), which compares to GBP248.0m in H1 21 (adjusted
gross margin(2) : 19.7%). The first six months continued to benefit
from a strong housing market with house price inflation of between
5% and 8% on private units more than offsetting build inflation of
c6%.
Overall, we have seen build cost inflation of c6% during the
period with higher energy prices impacting materials production and
a continued tight labour market.
Adjusted operating profit(2) is GBP198.2m (H1 21: GBP175.5m)
with the increase coming through from higher levels of gross
margin(1) , offsetting a small increase in overheads. Adjusting
operating margin(11) was 14.9% (H1 21: 13.9%).
The Group delivered an adjusted profit before tax(4) of
GBP189.9m (H1 21: GBP166.1m).
(11) Refer to Note 1 - Basis of Preparation for further
explanation on the prior period restatement
Adjusted Performance Measures
The Group manages the business by focussing on non GAAP
measures, which we refer to as adjusted measures, as we believe
they provide a better comparison of underlying performance measures
from one period to the next as GAAP measures can include one-off,
non-recurring items and recurring items that relate to earlier
acquisitions.
The adjusted performance measures, including those costs
classified as exceptional, are categorised in 3 areas: the
amortisation of acquired intangible assets (H1 22: GBP7.1m, H1 21:
GBP7.1m); an incremental fire safety provision (H1 22: GBP71.4m, H1
21: GBP2.8m, acquisition related costs), and; share of JV operating
results. The Group no longer takes any small, residual integration
costs relating to the Linden and Partnerships acquisition to
exceptional items.
For further details see Note 13.
Reported profit
On a reported basis(5) , the Group delivered a profit before tax
of GBP111.3m (H1 21: GBP156.2m), comprising operating profit of
GBP89.3m (H1 21: GBP139.1m) after exceptional costs of GBP71.4m (H1
21: GBP2.8m), net financing income of GBP1.0m (H1 21: GBP3.0m) and
share of JV profit of GBP21.0m (H1 21: GBP14.1m).
Fire safety provision
Subsequent to our reporting of the FY21 results in March 2022,
on 7 April 2022 the Group signed up to the Government's Developer
Pledge for fire safety remedial work required on developments over
11 metres high. The signing of the pledge increased the Group's
exposure to remedial work from the previous legal requirement
significantly and we signalled that the extra charge would be in
the range of GBP35m to GBP50m on top of the GBP25.2m provision that
was recorded in the accounts as at 31 December 2021. The provision
of GBP25.2m was after amounts used of GBP1.4m with a total charge
recognised to the end of 2021 of GBP26.6m.
Vistry Partnerships, predominantly in its role as contractor but
also as developer, has reviewed over 100 developments that are over
11 metres high and has for the past four years worked with clients
to remediate fire safety issues on 18 buildings. Under the pledge,
the constructive obligation falls more heavily on the developer
than any associated contractor. The review of all potential
developments with remedial fire safety issues has now been
completed. The total charge for the period of GBP5m relates to the
inclusion of project management fees for the program of works and
this has meant the provision at the 30 June 2022 stands at GBP12m,
post spend of cGBP0.1m in the period.
Vistry Housebuilding primarily acts as a developer with the
majority of the exposure to developments over 11 metres high coming
from the Linden Homes legacy business. The Bovis legacy business
does not have any significant exposure as the company rarely
developed buildings taller than 11 metres high with only 2 being
identified to date for review, where no remedial works are
required. At the 31 December 2021 the provision held for the
Housebuilding remedial works was GBP18.1m.
The Group has concluded its review of potential Vistry
Housebuilding developments requiring remedial fire safety works and
this was achieved by 44 developments being reviewed in detail since
the year end - 23 buildings 11 to 18 metres high, 21 buildings
taller than 18 metres. The review was based on the new obligations
set out in the developer's pledge. The estimated total cost to
remediate these developments totals GBP84.5m including the GBP18.1m
that had already been provided for at 31 December 2021. The charge
in the period of GBP66.4m includes a provision for 5 years of
project management fees of GBP16.5m and an increase to the
underlying remedial works required of GBP49.9m. Following spend in
the period of GBP2.3m the provision held at 30 June 2022 stands at
GBP82.2m. As at the balance sheet date the total Group provision
was GBP94.2m for the expected costs of remedial works that may be
required for fire safety.
The estimated cost to remediate both Vistry Partnerships and
Vistry Housebuilding developments is made on an uninflated basis.
The estimation has been made using best available information and
assumes industry sector views as to the level of mandated remedial
work required and that VAT can be recovered on any works
completed.
Negotiations are ongoing with the Government in respect of the
contractual agreement that would codify the specific legal
obligation that parties signing the pledge will have to honour. The
current position from Government differs from the industry's view
by taking liabilities beyond the scope of the April pledge. Without
any legal obligation to fulfil the Government's view, no provision
is being made for any additional remedial charges. However, this
could be in the range of GBP10m-GBP15m should the Government's
position prevail. Additionally, there has been no determination of
the VAT treatment of remedial works and whether this can be wholly
or substantially recovered. Should either of these positions change
then we will need to review our liabilities appropriately.
We remain committed to the proper consideration of any relevant
case and are in the process of actively reaching out to each of the
developments that we have reviewed and have assessed as requiring
remedial works.
Housebuilding
Housebuilding H1 22 H1 21 Change
------------------------------ ------------ ------------ ---------
Total completions incl.
100% JVs(1) 3,219 3,126 +3.0%
Adjusted revenue(2) GBP902.4m GBP868.7m +3.9%
Adjusted gross profit(2) GBP207.7m GBP189.0m +9.9%
Adjusted gross margin(2) 23.0% 21.8% +1.2ppts
Adjusted operating profit(2) GBP170.0m GBP151.2m +12.4%
Adjusted operating margin(2) 18.8% 17.4% +1.4ppts
TNAV(12) GBP1,385.2m GBP1,504.8m -7.9%
Housebuilding delivered a small increase in total completions
including 100% of JVs at 3,219 units which included 764 affordable
homes representing 24% of total completions (H1 21: 832 affordable
homes, 27% of total completions). Underlying adjusted revenue(1) ,
excluding land sales of H1 22 GBP0.8m and H1 21 GBP17.0m, has
increased to GBP901.6m from GBP851.7m in H1 21, an increase of
5.9%.
Housebuilding pricing has remained strong in the year given
increased customer demand with the average sales price for our
private homes in housebuilding having increased 5.1% to GBP369,000
(H1 21: GBP351,000). The total average sales price increased by
5.3% to GBP317,000 (H1 21: GBP301,000).
Housebuilding adjusted gross(2) profit of GBP207.7m and
Housebuilding adjusted gross margin(2) of 23.0% continues to grow
from 2021 (H1 21: adjusted gross profit(2) : GBP189.0m, adjusted
gross margin(2) : 21.8%). 2022 adjusted gross margin(12) continues
to benefit from moving upwards towards the average embedded margin
in the land bank with a greater proportion of completions coming
from high margin strategically sourced land. There has been no
material impact from one-off events such as land sales. Progress on
Housebuilding gross margin(1) is still expected for the remainder
of 2022, as the business moves towards a target of 25% gross
margin(1) supported in part by the current embedded land bank
margin of 25.3%.
Housebuilding adjusted operating profit(2) of GBP170.0m has
risen by 12.4% from the same period last year (H1 21: GBP151.2m)
with adjusted operating margin(1) also growing to 18.8% (H1 21:
17.4%). The Housebuilding segment has a stable operating structure,
with 13 regional business units, which enables good management of
overheads and there is capacity within this structure to support
volume growth in 2022 and beyond.
(12) Tangible net asset value is calculated as total net assets
less acquired intangible assets and goodwill
Partnerships
Partnerships H1 22 H1 21 Change
------------------------------ ---------- ---------- ---------
Total completions incl.
100% JVs 1,106 895 +23.6%
Adjusted revenue(1) GBP425.9m GBP390.6m +9.0%
Adjusted operating profit(2) GBP43.6m GBP35.5m +23.0%
Adjusted operating margin(1) 10.2% 9.1% +1.1ppts
TNAV(12) GBP106.2m GBP65.9m +61.2%
Adjusted revenue(1) from Partnerships for the period totalled
GBP425.9m, made up of GBP203.7m (35.7%) from partner delivery and
GBP222.2m (10.1%) from mixed tenure operations. (H1 21: GBP390.6m,
partner delivery: GBP226.7m (58.0%), mixed tenure: GBP163.9m
(42.0%)).
Partnerships sold a total of 1,106 units (H1 21: 895 units) from
its mixed tenure operations, including JVs, with an average selling
price of GBP251,000 (H1 21: GBP251,000) and partner delivery
revenue generated equivalent units of 1,084 (H1 21: 1,330). The
partnerships business operated from an average of 29 active mixed
tenure sites in H1 22 with this number expected to increase for the
remainder of 2022.
Partnerships continues to grow both volume and value with an
increase in adjusted operating profit(2) to GBP43.6m (H1 21:
GBP35.5m) and adjusted operating margin(1) increasing to 10.2% (H1
21: 9.1%), largely due to the increase in mixed tenure.
The Partnerships business has been, and will be, impacted by the
same build cost inflation as Housebuilding but the aggressive
growth in mixed tenure completions as planned has seen the
Partnerships adjusted operating profit2 continue to grow in both
absolute and margin terms.
This growth is further supported by management of the cost base
through having an appropriate level of contingency in our pre-sale
agreements, as well as in longer term deals seeking to link future
revenues to a build cost index.
Group costs
The Group segment reported a rise in direct PLC costs totalling
GBP15.5m (H1 21: GBP11.3m). Direct PLC costs include the costs of
the PLC board, share based payment and related items. The step up
in the year reflects the strong performance of the Group coming
through in shared based payments and annual incentive awards.
Financing and taxation
Net financing income during the period was GBP1.0m (H1 21:
GBP3.0m) and net bank interest and commitment fees increased to
GBP6.0m (H1 21: GBP4.5m).
The Group also incurred a GBP2.3m charge (H1 21: GBP2.6m),
reflecting the imputed interest on land bought on deferred terms.
JVs which are funded through loans are charged interest by the
Group, and this generated the majority of the GBP9.5m of finance
income recognised (H1 21: GBP11.5m).
The Group has recognised a tax charge of GBP24.7m at an
effective tax rate of 22.2% (H1 21: GBP34.8m at an effective rate
of 22.3%). The effective tax rate is driven by the introduction of
the Residential Property Developer Tax (RPDT) which has directly
led to a charge for the period of GBP3.3m.
The Group has a current tax asset of GBP12.0m on its balance
sheet as at 30 June 2022 (30 June 2021 current tax liability of
GBP1.4m). This increase is due to adjustments in relation to prior
periods, and payments made during the first half of 2022 in
anticipation of profits generated in the second half of the
year.
Dividends and earnings per share
During the period a final dividend of 40 pence per share for the
2021 financial year was paid on 24 May 2022 to holders of ordinary
shares on the register at the close of business on 7 April 2022.
Total ordinary dividends for the year are expected to be 70 pence
per share (2021: 60 pence) in line with our capital allocation
policy of a sustainable 2x cover.
Net assets and cash flow
As at 30 June 2022, net assets of GBP2,366.0m were GBP24.6m
lower than at the start of the year as the Group continues to
invest in land and work in progress. Net assets per share were
1,067p (31 December 2021: 1,075p).
Goodwill and intangibles totalled GBP669.1m at 30 June 2022 (31
December 2021: GBP675.3m) with the decrease resulting from the
amortisation of intangibles.
Tangible net assets(11) increased from GBP1,480.6m at 31
December 2021 to GBP1,581.9m at 30 June 2022 driven by the
continued investment in land and work in progress which increased
by GBP136.9m to GBP2,099.0m.
Trade and other receivables increased by GBP10.2m to GBP252.1m.
Trade and other payables decreased by GBP34.7m to GBP1,142.7m and
includes land creditors which decreased by GBP9.1m to GBP405.2m (31
December 2021: GBP414.3m).
As at 30 June 2022 the Group's net cash(6) balance was
GBP115.0m. Having started the year with GBP234.5m the Group
generated an operating cash inflow before land expenditure of
GBP291.4m (H1 21: GBP237.7m). Net cash(6) payments for land
investment were increased at GBP291.6m (H1 21: GBP171.3m).
Investing cash inflows totalling GBP45.8m (H1 21: GBP12.0m)
relates to dividends received from joint ventures and loan
repayments from joint ventures offset by investments made in JVs
and acquisitions of intangibles and property, plant, and
equipment.
Financing cash flows of GBP30.8m (H1 21: GBP52.8m) is
predominantly made up of GBP88.7m (H1 21: GBP44.3m) of dividends
paid in the period, share buyback programme of GBP12.8m (H1 21:
GBPnil), cancellation of owned shares of GBP9.3m (H1 21: GBPnil)
and net movements on the revolving credit facility with drawdowns
and repayments of GBP370.0m (HY21: GBP80.0m) and GBP221.0m (H1 21:
GBP80.0m) respectively.
The Group's financing facilities comprise of a GBP500m revolving
credit facility, a GBP100m US Private Placement facility, a
retained GBP50m bilateral term loan, an overdraft of GBP5m and a
Homes England loan facility of GBP10.7m, bringing the Group's
external funding facilities to GBP665.7m (31 December 2021:
GBP665.7m ).
Land bank
Housebuilding land bank
H1 22 H1 21
-------------------------- ----------- -----------
Consented plots added 2,852 3,681
Sites added 12 16
Sites owned at period
end 191 206
Sites controlled at
period end 13 11
Total plots in land
bank at period end incl
share of joint ventures 30,555 31,896
ASP including share GBP333,000 GBP302,000
of joint ventures
The average selling price of all units within the consented land
bank increased over the period to GBP333,000 (H1 21: GBP302,000).
The estimated embedded gross margin(1) in the consented land bank
as at 30 June 2022, based on prevailing sales prices and build
costs is 25.3% (31 December 2021: 24.5%). This margin continues to
improve with additions to the land bank exceeding usage and good
terms achieved on acquisition whilst older, less valuable, sites
are traded out.
In addition, we have increased the cost base in the land bank,
impacting the embedded gross margin(1) to include our current
estimates of costs for both Part L and F of the Future Homes
Standards.
The housebuilding land bank including JVs of 30,555 plots as at
30 June 2022 represents c 4.4 years of supply based on H1 22
completion volumes (30 June 2021: 31,896 plots and 4.9 years).
The land bank reflects our 25 x 25 x 25 Housebuilding strategy
to deliver controlled growth in the medium term using existing
operating structures and improving both gross margin(1) and return
on capital employed(3) to 25% by the year 2025.
The 3,219 plots that legally completed in the period were
replaced by a total of 2,852 plots from a combination of site
acquisitions representing 1,232 plots and conversion of 1,620 plots
from our strategic land pipeline and a further 508 plots secured on
a conditional basis across 4 sites.
Partnerships land bank
H1 22 H1 21
-------------------------- ----------- -----------
Consented plots added 552 846
Sites added 4 4
Sites owned at period
end 57 56
Sites controlled at
period end 16 7
Total plots in land
bank at period end incl
share of joint ventures 12,314 10,137
ASP including share GBP280,000 GBP272,000
of joint ventures
Average consented land GBP35,000 GBP23,000
plot ASP
The average selling price of all units within the consented land
bank increased over the period to GBP280,000 (H1 21: GBP272,000).
The estimated embedded gross margin(1) in the land bank as at 30
June 2022, based on prevailing sales prices and build costs is
19.5%.
The Partnerships land bank including JVs of 12,314 plots as at
30 June 2022 reflects our strategy to grow the level of mixed
tenure development to contribute to the delivery of completions and
partner units in support of the Partnership strategy, Project
Pace.
The 1,106 mixed tenure plots that legally completed in the year
were replaced by the acquisition of 552 plots on 4 sites and a
further 1,614 plots were conditionally contracted on 8 sites. All
sites acquired for Partnerships will support future returns on
capital employed for the segment in excess of 40%.
Strategic land
As at 30 June 2022 Total sites Total plots
---------------------- ------------ ------------
0 - 150 plots 37 2,934
150 - 300 plots 39 8,024
300 - 500 plots 22 7,610
500 - 1,000 plots 16 9,675
1,000 + plots 8 12,300
Total 122 40,543
Planning agreed 7 3,698
Planning application 10 2,397
Ongoing application 105 34,448
Total 122 40,543
30 June 2021 123 38,164
Strategic land continues to be an important source of supply
and, during the year, 1,852 plots have been converted from the
strategic land pipeline into the consented land bank. A further
2,518 plots were contracted under options.
Strategic land remains well positioned to deliver high quality
developments in the near to medium term with good progress on a
number of significant projects.
Risks and uncertainties
The Group is subject to a number of risks and uncertainties as
part of its activities. The Board regularly considers these and
seeks to ensure that appropriate processes are in place to manage,
monitor and mitigate these risks.
The directors consider that the principal risks and
uncertainties facing the Group remain those as outlined in the 2021
Group Annual Report and Accounts on pages 60 to 65.
Group income statement
Six months Six months Year ended
ended ended 31 Dec 2021
30 June 30 June GBP000
2022 2021
GBP000 GBP000 (audited)
(unaudited) (unaudited)
Revenue (note 3)* 1,162,988 1,129,446 2,407,158
================================================= ============= ============= =============
Cost of sales* (1,009,852) (927,789) (1,967,886)
================================================= ============= ============= =============
Gross profit 153,136 201,657 439,272
Analysed as:
================================================= ============= ============= =============
Adjusted gross profit 280,505 247,990 542,965
================================================= ============= ============= =============
Other operating income (25,051) (19,614) (40,659)
================================================= ============= ============= =============
Exceptional cost of sales (note 5) (71,429) - (5,744)
================================================= ============= ============= =============
Share of joint ventures' gross profit (30,889) (26,719) (57,290)
================================================= ============= ============= =============
Gross profit 153,136 201,657 439,272
================================================= ============= ============= =============
Administrative expenses including exceptional
items (note 5) (88,854) (82,158) (194,517)
================================================= ============= ============= =============
Other operating income 25,051 19,614 40,659
================================================= ============= ============= =============
Operating profit 89,333 139,113 285,414
Analysed as:
================================================= ============= ============= =============
Adjusted operating profit 198,167 175,460 368,368
================================================= ============= ============= =============
Exceptional expenses (note 5) (71,429) (2,798) (12,225)
================================================= ============= ============= =============
Amortisation of acquired intangibles (7,120) (7,120) (14,240)
================================================= ============= ============= =============
Share of joint ventures' operating profit (30,285) (26,429) (56,489)
================================================= ============= ============= =============
Operating profit 89,333 139,113 285,414
================================================= ============= ============= =============
Financial income 9,479 11,470 23,062
================================================= ============= ============= =============
Financial expenses (8,463) (8,463) (18,931)
================================================= ============= ============= =============
Net financing income 1,016 3,007 4,131
================================================= ============= ============= =============
Share of profit of joint ventures 20,996 14,093 29,991
================================================= ============= ============= =============
Profit before tax 111,345 156,213 319,536
Analysed as:
Adjusted profit before tax 189,894 166,131 346,001
================================================= ============= ============= =============
Exceptional expenses (71,429) (2,798) (12,225)
================================================= ============= ============= =============
Amortisation of acquired intangibles (7,120) (7,120) (14,240)
Profit before tax 111,345 156,213 319,536
================================================= ============= ============= =============
Income tax expense (note 9) (24,719) (34,831) (65,411)
================================================= ============= ============= =============
Profit for the period / year attributable to
ordinary shareholders 86,626 121,382 254,125
Earnings per share
================================================= ============= ============= =============
Basic 39.1p 54.8p 114.6p
================================================= ============= ============= =============
Diluted 38.9p 54.6p 114.1p
================================================= ============= ============= =============
Basic earnings per share (before exceptional
items and amortisation of acquired intangibles) 67.4p 59.0p 125.5p
================================================= ============= ============= =============
Diluted earnings per share (before exceptional
items and amortisation of acquired intangibles) 67.2p 58.8p 124.9p
================================================= ============= ============= =============
The above group income statement should be read in conjunction
with the accompanying notes.
* Revenue and cost of sales for both comparative periods have
been restated in relation to trading with our joint ventures (see
note 1)
Group statement of comprehensive income
Six months Six months Year ended
ended ended 31 Dec
2021
30 June 30 June GBP000
2022 2021
GBP000 GBP000 (audited)
(unaudited) (unaudited)
Profit for the period / year attributable to ordinary
shareholders 86,626 121,382 254,125
====================================================== ============= ============= ===========
Other comprehensive (expense) / income
====================================================== ============= ============= ===========
Items that will not be reclassified to the income
statement
====================================================== ============= ============= ===========
Remeasurements on defined benefit pension scheme (4,123) 13,307 33,838
====================================================== ============= ============= ===========
Deferred tax on remeasurements on defined benefit
pension scheme 2,973 (2,761) (9,148)
====================================================== ============= ============= ===========
Total other comprehensive (expense) / income (1,150) 10,546 24,690
====================================================== ============= ============= ===========
Total comprehensive income for the period / year
attributable to ordinary shareholders 85,476 131,928 278,815
====================================================== ============= ============= ===========
The above group statement of comprehensive income should be read
in conjunction with the accompanying notes.
Group balance sheet
Six months Six months Year ended
ended ended 31 Dec 2021
30 June 2022 30 June 2021 GBP000
GBP000 GBP000 (audited)
(unaudited) (unaudited)
Assets
============================================ ============== ============== =============
Goodwill 547,509 547,509 547,509
============================================ ============== ============== =============
Intangible fixed assets 121,600 136,553 127,809
============================================ ============== ============== =============
Property, plant and equipment 4,695 5,299 4,742
============================================ ============== ============== =============
Right-of-use assets 25,828 34,293 31,069
============================================ ============== ============== =============
Investments 187,415 151,962 175,064
============================================ ============== ============== =============
Amounts recoverable from joint ventures 274,334 328,413 308,217
============================================ ============== ============== =============
Trade and other receivables 677 854 454
============================================ ============== ============== =============
Restricted cash 526 846 778
============================================ ============== ============== =============
Retirement benefit asset 44,435 23,796 45,318
============================================ ============== ============== =============
Total non-current assets 1,207,019 1,229,525 1,240,960
============================================ ============== ============== =============
Inventories 2,099,005 1,958,259 1,962,155
============================================ ============== ============== =============
Trade and other receivables 251,423 245,203 241,420
============================================ ============== ============== =============
Cash and cash equivalents 427,949 342,598 398,714
============================================ ============== ============== =============
Current tax asset 12,015 - -
============================================ ============== ============== =============
Total current assets 2,790,392 2,546,060 2,602,289
============================================ ============== ============== =============
Total assets 3,997,411 3,775,585 3,843,249
============================================ ============== ============== =============
Equity
============================================ ============== ============== =============
Issued capital 110,598 111,147 111,154
============================================ ============== ============== =============
Share premium and capital redemption 361,700 360,972 361,081
============================================ ============== ============== =============
Merger reserve 823,513 823,513 823,513
============================================ ============== ============== =============
Retained earnings 1,070,164 989,334 1,094,833
============================================ ============== ============== =============
Total equity attributable to equity holders
of the parent 2,365,975 2,284,966 2,390,581
============================================ ============== ============== =============
Liabilities
============================================ ============== ============== =============
Bank and other loans 112,981 311,035 164,260
============================================ ============== ============== =============
Trade and other payables 150,928 164,838 211,296
============================================ ============== ============== =============
Lease liabilities 17,317 22,911 18,836
============================================ ============== ============== =============
Provisions (note 11) 85,681 33,617 30,928
============================================ ============== ============== =============
Deferred tax liabilities 39,441 23,701 38,444
============================================ ============== ============== =============
Total non-current liabilities 406,348 556,102 463,764
============================================ ============== ============== =============
Bank and other loans 200,000 - -
============================================ ============== ============== =============
Trade and other payables 991,741 918,738 966,127
============================================ ============== ============== =============
Lease liabilities 10,248 14,369 14,215
============================================ ============== ============== =============
Provisions (note 11) 23,099 - 8,455
============================================ ============== ============== =============
Current tax liabilities - 1,410 107
============================================ ============== ============== =============
Total current liabilities 1,225,088 934,517 988,904
============================================ ============== ============== =============
Total liabilities 1,631,436 1,490,619 1,452,668
============================================ ============== ============== =============
Total equity and liabilities 3,997,411 3,775,585 3,843,249
============================================ ============== ============== =============
The above group balance sheet should be read in conjunction with
the accompanying notes.
These condensed consolidated financial statements were approved
by the Board of Directors on 8 September 2022.
Group statement of changes in equity
Share
Own Other Total premium
shares retained retained Issued and capital Merger
held earnings earnings capital redemption reserve Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January 2022 (3,372) 1,098,205 1,094,833 111,154 361,081 823,513 2,390,581
==================================== ======== ========= ========= ======== ============ ======== =========
Profit for the period - 86,626 86,626 - - - 86,626
==================================== ======== ========= ========= ======== ============ ======== =========
Total other comprehensive expense - (1,150) (1,150) - - - (1,150)
==================================== ======== ========= ========= ======== ============ ======== =========
Total comprehensive income - 85,476 85,476 - - - 85,476
==================================== ======== ========= ========= ======== ============ ======== =========
Issue of share capital - - - 4 59 - 63
==================================== ======== ========= ========= ======== ============ ======== =========
Purchase of own shares (12,832) - (12,832) - - - (12,832)
==================================== ======== ========= ========= ======== ============ ======== =========
Share-based payments - 1,873 1,873 - - - 1,873
==================================== ======== ========= ========= ======== ============ ======== =========
Dividend paid - (88,748) (88,748) - - - (88,748)
==================================== ======== ========= ========= ======== ============ ======== =========
Deferred tax on share-based
payments - (1,129) (1,129) - - - (1,129)
==================================== ======== ========= ========= ======== ============ ======== =========
Cancellation of shares - (9,309) (9,309) (560) 560 - (9,309)
==================================== ======== ========= ========= ======== ============ ======== =========
Total transactions with owners
recognised directly in equity (12,832) (97,313) (110,145) (556) 619 - (110,082)
==================================== ======== ========= ========= ======== ============ ======== =========
Balance at 30 June 2022 (unaudited) (16,204) 1,086,368 1,070,164 110,598 361,700 823,513 2,365,975
==================================== ======== ========= ========= ======== ============ ======== =========
Balance at 1 January 2021 (6,956) 906,741 899,785 111,127 360,657 823,513 2,195,082
==================================== ======== ========= ========= ======== ============ ======== =========
Profit for the period - 121,382 121,382 - - - 121,382
==================================== ======== ========= ========= ======== ============ ======== =========
Total other comprehensive income - 10,546 10,546 - - - 10,546
==================================== ======== ========= ========= ======== ============ ======== =========
Total comprehensive income - 131,928 131,928 - - - 131,928
==================================== ======== ========= ========= ======== ============ ======== =========
Issue of share capital - - - 20 315 - 335
==================================== ======== ========= ========= ======== ============ ======== =========
LTIP shares exercised 3,009 (3,009) - - - - -
==================================== ======== ========= ========= ======== ============ ======== =========
Share-based payments - 2,191 2,191 - - - 2,191
==================================== ======== ========= ========= ======== ============ ======== =========
Dividend paid - (44,340) (44,340) - - - (44,340)
==================================== ======== ========= ========= ======== ============ ======== =========
Deferred tax on share-based
payments - (230) (230) - - - (230)
==================================== ======== ========= ========= ======== ============ ======== =========
Total transactions with owners
recognised directly in equity 3,009 (45,388) (42,379) 20 315 - (42,044)
==================================== ======== ========= ========= ======== ============ ======== =========
Balance at 30 June 2021 (unaudited) (3,947) 993,281 989,334 111,147 360,972 823,513 2,284,966
==================================== ======== ========= ========= ======== ============ ======== =========
Balance at 1 January 2021 (6,956) 906,741 899,785 111,127 360,657 823,513 2,195,082
==================================== ======== ========= ========= ======== ============ ======== =========
Profit for the year - 254,125 254,125 - - - 254,125
==================================== ======== ========= ========= ======== ============ ======== =========
Total other comprehensive income - 24,690 24,690 - - - 24,690
==================================== ======== ========= ========= ======== ============ ======== =========
Total comprehensive income - 278,815 278,815 - - - 278,815
==================================== ======== ========= ========= ======== ============ ======== =========
Issue of share capital - - - 27 424 - 451
==================================== ======== ========= ========= ======== ============ ======== =========
LTIP shares exercised 3,584 (3,584) - - - - -
==================================== ======== ========= ========= ======== ============ ======== =========
Share-based payments - 4,543 4,543 - - - 4,543
==================================== ======== ========= ========= ======== ============ ======== =========
Dividend paid - (88,709) (88,709) - - - (88,709)
==================================== ======== ========= ========= ======== ============ ======== =========
Deferred tax on share-based
payments - 399 399 - - - 399
==================================== ======== ========= ========= ======== ============ ======== =========
Total transactions with owners
recognised directly in equity 3,584 (87,351) (83,767) 27 424 - (83,316)
==================================== ======== ========= ========= ======== ============ ======== =========
Balance at 31 December 2021
(audited) (3,372) 1,098,205 1,094,833 111,154 361,081 823,513 2,390,581
==================================== ======== ========= ========= ======== ============ ======== =========
The above condensed consolidated statement of changes in equity
should be read in conjunction with the accompanying notes.
Group statement of cash flows
Six months Six months
ended ended Year ended
30 June 30 June 31 Dec
2022 2021 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Cash flows from operating activities
========================================================= ============= ============= ===========
Profit for the period / year 86,626 121,382 254,125
========================================================= ============= ============= ===========
Depreciation and amortisation 15,347 16,248 32,524
========================================================= ============= ============= ===========
Financial income (9,479) (11,470) (23,062)
========================================================= ============= ============= ===========
Financial expense 8,463 8,463 18,931
========================================================= ============= ============= ===========
Loss on disposal of property, plant and equipment - - 1
========================================================= ============= ============= ===========
Share-based payments 1,873 2,191 4,543
========================================================= ============= ============= ===========
Income tax expense 24,719 34,831 65,411
========================================================= ============= ============= ===========
Share of profit of joint ventures (20,996) (14,093) (29,991)
========================================================= ============= ============= ===========
Profit released on sale of assets from joint ventures - (78) (265)
========================================================= ============= ============= ===========
Increase in trade and other receivables (10,226) (3,432) (15,308)
========================================================= ============= ============= ===========
Increase in inventories (136,850) (122,932) (125,634)
========================================================= ============= ============= ===========
(Decrease) / increase in trade and other payables (34,755) 68,669 143,604
========================================================= ============= ============= ===========
Increase / (decrease) in provisions 66,158 (10,246) (1,018)
========================================================= ============= ============= ===========
Cash (used in) / generated from operations (9,120) 89,533 323,861
========================================================= ============= ============= ===========
Interest paid (4,271) (7,138) (17,835)
========================================================= ============= ============= ===========
Income taxes paid (34,000) (16,000) (39,000)
========================================================= ============= ============= ===========
Net cash (used in) / generated from operating activities (47,391) 66,395 267,026
========================================================= ============= ============= ===========
Cash flows from investing activities
========================================================= ============= ============= ===========
Bank interest received - 2 12
========================================================= ============= ============= ===========
Acquisition of intangible fixed assets (1,096) (759) (1,516)
========================================================= ============= ============= ===========
Acquisition of property, plant and equipment (865) (4,707) (1,546)
========================================================= ============= ============= ===========
Loans made to joint ventures (107,386) (106,481) (126,423)
========================================================= ============= ============= ===========
Interest received on loans to joint ventures 5,814 6,837 32,730
========================================================= ============= ============= ===========
Loan repayments from joint ventures 147,884 79,180 124,947
========================================================= ============= ============= ===========
Distributions from joint ventures 1,176 13,599 16,989
========================================================= ============= ============= ===========
Decrease in restricted cash 252 347 415
========================================================= ============= ============= ===========
Net cash generated from / (used in) investing activities 45,779 (11,982) 45,608
========================================================= ============= ============= ===========
Cash flows from financing activities
========================================================= ============= ============= ===========
Dividends paid (88,748) (44,340) (88,709)
========================================================= ============= ============= ===========
Interest paid on lease payments (363) - (905)
========================================================= ============= ============= ===========
Principal elements of lease payments (7,012) (8,463) (15,745)
========================================================= ============= ============= ===========
Net proceeds from the issue of share capital 63 - 451
========================================================= ============= ============= ===========
Purchase of own shares (12,832) - -
========================================================= ============= ============= ===========
Cancellation of own shares (9,309) -
========================================================= ============= ============= ===========
Drawdown of bank and other loans 370,000 80,000 220,000
========================================================= ============= ============= ===========
Repayment of bank and other loans (220,952) (80,000) (370,000)
========================================================= ============= ============= ===========
Net cash generated from / (used in) financing activities 30,847 (52,803) (254,908)
========================================================= ============= ============= ===========
Net increase in cash and cash equivalents 29,235 1,610 57,726
========================================================= ============= ============= ===========
Cash and cash equivalents at 1 January 398,714 340,988 340,988
========================================================= ============= ============= ===========
Cash and cash equivalents at the end of the period
/ year 427,949 342,598 398,714
========================================================= ============= ============= ===========
The above group statement of cash flows should be read in
conjunction with the accompanying notes.
1 Basis of preparation
Vistry Group PLC (the "Company") is a company domiciled in the
United Kingdom. The condensed consolidated interim financial
statements (the "Group financial statements") of the Group comprise
the Company and its subsidiaries (together referred to as the
"Group") and the Group's interest in joint ventures.
The Group financial statements were authorised for issue by the
directors on 8 September 2022. These financial statements are
unaudited but have been reviewed by PricewaterhouseCoopers LLP, the
Company's auditors.
The Group financial statements do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006.
The figures for the half years ended 30 June 2022 and 30 June
2021 are unaudited. The comparative figures for the financial year
ended 31 December 2021 are an extract from the Group's statutory
accounts for that financial year, which have been delivered to the
Registrar of Companies. The report of the auditors of these
statutory accounts was (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under Section 498 (2) or (3) of the Companies
Act 2006.
The Group financial statements include the financial statements
of the Company and all of its subsidiary undertakings. Subsidiaries
are all entities over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date
that control ceases.
The preparation of Group financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amount of assets, liabilities, income and expenses. Actual results
may differ from these estimates. In preparing these Group financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended 31 December
2021.
These Group financial statements have been prepared on the basis
of the policies set out in the 2021 Group Annual Report and
Accounts and in accordance with UK adopted IAS 34 and the
Disclosure Guidance and Transparency Rules sourcebook of the UK's
Financial Conduct Authority. The condensed consolidated interim
financial statements have been prepared by applying the accounting
policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the
year ended 31 December 2021. There is one exception, tax, which is
calculated based on the estimated full year effective tax rate at
the half year.
The Group financial statements do not include all of the notes
of the type normally included in an annual financial report. The
condensed consolidated interim financial statements should be read
in conjunction with the annual consolidated financial statements
for the year ended 31 December 2021 which were prepared in
accordance with UK-adopted International Accounting Standards and
with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards. This constitutes a
change in the basis of preparation, as required by UK company law
for the purposes of financial reporting as a result of the UK's
exit from the EU on 31 January 2020 and the cessation of the
transition period on 31 December 2020.
The change in basis of preparation is relevant given that the
2021 half year comparatives were prepared on a basis consistent
with the annual consolidated financial statements for the year
ended 31 December 2020, which were prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applied in the European Union.
There are no new standards effective for the first time in the
period beginning 1 January 2022 which will have a material impact
on the Group's reported results.
Goodwill impairment
The acquisition of Linden Homes and the Partnerships business in
2020 resulted in the recognition of goodwill and acquired
intangible assets for the Group.
In order to assess whether goodwill and intangible assets
require an impairment, an estimate must be made for the value in
use of the cash generating units ("CGUs") which have goodwill
allocated to them. The estimate for the value in use requires the
calculation of a discounted cash flow, reflecting the future
expected cash flows from the relevant CGUs. Goodwill must be
reviewed on at least an annual basis for impairment, or earlier in
the event that there is an indication of possible impairment.
The goodwill recognised by the Group at 30 June 2022 reflects
the goodwill on acquisition of Linden and Partnerships on 3 January
2020. Details of the Group's goodwill impairment review are
disclosed on pages 218 to 219 of the 2021 Group Annual Report and
Accounts.
During the period, the market capitalisation of the Company fell
below the net assets value of the Company. Whilst this could be
considered an impairment trigger under IAS36, management have
concluded that the macro economic environment that impacted all
market valuations did not specifically reflect on the underlying
value of the business, and as a result this was not considered an
impairment trigger. A full goodwill impairment review will be
conducted during the second half of the year and the details will
be disclosed in the 2022 Group Annual Report and Accounts.
Going concern
In the light of the committed business combination between the
Company and Countryside Partnerships PLC announced on 5 September
2022, the Group has prepared a cash flow forecast for the combined
business (the Enlarged Group) to confirm the appropriateness of the
going concern assumption in these interim financial statements. The
forecast was prepared using a likely base case and a severe but
plausible downside sensitivity scenario. In the downside scenario
the Company has assumed decreased affordability, leading to reduced
demand for housing and falling house prices. We continue to see
build cost inflation with higher energy prices impacting materials
production and a continued tight labour market. In both the base
case and the downside sensitivity scenario, the forecasts indicated
that there was sufficient headroom and liquidity for the business
to continue based on new facilities for the Enlarged Group signed
up ahead of the 5 September 2022 announcement. In each of these
scenarios the Enlarged Group was also forecast to comply with the
required covenants on the aforementioned borrowing facilities.
Consequently, the Directors have not identified any material
uncertainties to the Company's ability to continue as a going
concern over a period of at least twelve months from the date of
the approval of the financial statements. As such, the Directors
have concluded that using the going concern basis for the
preparation of the financial statements is appropriate. In the
event that the business combination does not go ahead a review has
also been made of the business continuing on a stand alone basis,
including the absorption of aborted transaction fees, and this
review has concluded that the business will also continue as a
going concern.
In the downside sensitivity scenario, the following assumptions
have been applied:
- A 15-20% reduction in private sales volumes, with a
corresponding reduction in development spend
- A 5-10% reduction in private sales prices
- A rise in interest cost of 100bps
The impact of these downsides is then mitigated by:
- Cessation of uncommitted land spend
- Reduction in overheads to reflect reduction in bonuses,
temporary employee costs, etc.
The Board continues to take prudent decisions to best support
the business, including measures to protect the Group's cash
position, liquidity and maintain a robust balance sheet.
Fire safety cladding
Management have reviewed all current legal and constructive
obligations with regards to remedial work to rectify legacy fire
safety issues. Where known obligations exist, these have been
evaluated for the likely cost to complete and an appropriate
provision has been created.
On 7 April 2022 the Group signed up to the government's
Developer Pledge for fire safety remedial work required on
developments over 11 metres high. The signing of the pledge did
crystalise the scope and therefore the additional costs of the
Group's obligation to perform additional remedial work, and whilst
there is still uncertainty as to the precise standard that remedial
works must be completed to and and the VAT treatment of remedial
works and whether this is wholly or substantially recoverable, the
Group has been able to assess all known developments that may
require remedial work and through the use of third party and in
house technical expertise has been able to quantify the current
liability to the Group and record a suitable provision as a result.
The provision has been calculated in line with IAS 37 - Provisions,
Contingent Liabilities and Contingent Assets.
The potential additional obligations on the sector and the Group
are being resolved through discussions with Government. The current
status of negotiations suggests a potential further charge of
between GBP10m-GBP15m. However, these negotiations are not
concluded, and at this time the Group does not have a constructive
or legal obligation and therefore no additional provision has been
booked. See note 11 for more detail.
Restatement of Vistry Group PLC 2021 financial statements and
notes
Reported revenue and cost of sales have been restated in the six
months ended June 2021 (increasing Partner delivery revenue and
cost of sales by GBP26.7m) and the year ended 31 December 2021
(increasing Partner delivery revenue and cost of sales by GBP48.1m)
to correct a prior period error in calculating the revenue and
associated cost of sales that can be recognised in relation to
assets previously sold by the Group to joint ventures that have
subsequently been sold by these joint ventures to external parties.
The gross profit element of this error is de minimis, and as a
result no adjustment to gross profit has been made in the
restatement.
2 Seasonality
In common with the rest of the UK housebuilding industry,
activity occurs year round, but there are typically two principal
selling seasons: spring and autumn. As these fall into two separate
half years, the seasonality of the business is not usually
pronounced, although it is biased towards the second half of the
year under normal trading conditions.
3 Revenue
Reported revenue by type:
30 June 2022 30 June 2021 31 Dec 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Private housing 795,880 711,106 1,599,616
======================================= ============= ============= ===========
Affordable housing 127,832 144,825 261,894
======================================= ============= ============= ===========
Partner delivery revenue* 236,212 253,452 516,769
======================================= ============= ============= ===========
Land sales 844 17,025 22,727
======================================= ============= ============= ===========
Release of deferred revenue from joint
ventures - 186 243
======================================= ============= ============= ===========
Other 2,220 2,852 5,909
======================================= ============= ============= ===========
Total 1,162,988 1,129,446 2,407,158
======================================= ============= ============= ===========
* Revenue and cost of sales for both comparative periods have
been restated in relation to trading with our joint ventures (see
note 1)
4 Segmental reporting
All revenue and profits disclosed relate to continuing
activities of the Group and are derived from activities performed
in the United Kingdom.
The Chief Operating Decision Maker (CODM), which is the Board,
notes that the Group's main operation is that of a housebuilder and
it operates entirely within the United Kingdom. The Board have
identified two separate segments having taken into consideration
IFRS 8: "Operating Segments" criteria - Housebuilding and
Partnerships.
Segmental reporting is presented in respect of the Group's
business segments reflecting the Group's management and internal
reporting structure and is the basis on which strategic operating
decisions are made by the Group's CODM.
The Housebuilding segment develops sites across England,
providing private and affordable housing on land owned by the Group
or the Group's joint ventures. Housebuilding offers properties
under both the Bovis and Linden brand names.
The Partnerships segment specialises in partnering with housing
associations and other public sector businesses across England,
including London, to deliver either the development of private and
affordable housing on land owned by the Group or the Group's joint
ventures, or to provide contracting services for development. The
Partnerships segment operates under the Vistry Partnerships and
Drew Smith brand names.
Segmental adjusted operating profit and segmental operating
profit include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Central head
office costs are allocated between the segments where possible, or
otherwise reported within the separate column for Group items
together with acquisition related exceptional items and
amortisation of acquired intangibles.
Segmental tangible net asset value (TNAV) includes items
directly attributable to the segment as well as those that can be
allocated on a reasonable basis, with the exception of net cash or
debt, retirement benefit assets / liabilities and tax balances
payable / receivable.
Adjusted financial results include share of joint ventures and
exclude exceptional items. Adjusted gross profit is stated
including other operating income.
Adjusted financial results include share of joint ventures and
adjusted gross profit is stated including other operating
income.
Segmental financial performance Housebuilding Partnerships Group items Total
Period ended 30 June 2022 (unaudited) GBP000 GBP000 GBP000 GBP000
Revenue 775,826 387,162 - 1,162,988
====================================== ============= ============ =========== =========
Share of joint ventures' revenue 126,592 71,242 - 197,834
====================================== ============= ============ =========== =========
Non GAAP joint ventures' revenue
adjustment - (32,472) - (32,472)
====================================== ============= ============ =========== =========
Adjusted revenue 902,418 425,932 - 1,328,350
====================================== ============= ============ =========== =========
Gross profit 104,331 48,805 - 153,136
====================================== ============= ============ =========== =========
Share of joint ventures' gross
profit 22,945 7,944 - 30,889
====================================== ============= ============ =========== =========
Exceptional cost of sales 66,439 4,990 - 71,429
====================================== ============= ============ =========== =========
Other operating income 13,993 11,058 - 25,051
====================================== ============= ============ =========== =========
Adjusted gross profit 207,708 72,797 - 280,505
====================================== ============= ============ =========== =========
Operating profit / (loss) 79,788 25,038 (15,493) 89,333
====================================== ============= ============ =========== =========
Share of joint ventures' operating
profit 22,419 7,866 - 30,285
====================================== ============= ============ =========== =========
Exceptional items 66,439 4,990 - 71,429
====================================== ============= ============ =========== =========
Amortisation of acquired intangibles 1,380 5,740 - 7,120
====================================== ============= ============ =========== =========
Adjusted operating profit / (loss) 170,026 43,634 (15,493) 198,167
====================================== ============= ============ =========== =========
Adjusted gross margin 23.0% 17.1% - 21.1%
====================================== ============= ============ =========== =========
Adjusted operating margin 18.8% 10.2% - 14.9%
====================================== ============= ============ =========== =========
Housebuilding Partnerships Group items Total
Period ended 30 June 2021 (unaudited) GBP000 GBP000 GBP000 GBP000
Revenue* 778,963 350,483 - 1,129,446
====================================== ============= ============ =========== =========
Share of joint ventures' revenue 89,771 66,888 - 156,659
====================================== ============= ============ =========== =========
Non GAAP joint ventures' revenue
adjustment* - (26,743) - (26,743)
====================================== ============= ============ =========== =========
Adjusted revenue 868,734 390,628 - 1,259,362
====================================== ============= ============ =========== =========
Gross profit 159,291 42,366 - 201,657
====================================== ============= ============ =========== =========
Share of joint ventures' gross
profit 16,489 10,230 - 26,719
====================================== ============= ============ =========== =========
Other operating income 13,194 6,420 - 19,614
====================================== ============= ============ =========== =========
Adjusted gross profit 188,974 59,016 - 247,990
====================================== ============= ============ =========== =========
Operating profit / (loss) 133,588 19,595 (14,070) 139,113
====================================== ============= ============ =========== =========
Share of joint ventures' operating
profit 16,277 10,152 - 26,429
====================================== ============= ============ =========== =========
Exceptional items - - 2,798 2,798
====================================== ============= ============ =========== =========
Amortisation of acquired intangibles 1,380 5,740 - 7,120
====================================== ============= ============ =========== =========
Adjusted operating profit / (loss) 151,245 35,487 (11,272) 175,460
====================================== ============= ============ =========== =========
Adjusted gross margin 21.8% 15.1% - 19.7%
====================================== ============= ============ =========== =========
Adjusted operating margin 17.4% 9.1% - 13.9%
====================================== ============= ============ =========== =========
Housebuilding Partnerships Group items Total
Year ended 31 December 2021 GBP000 GBP000 GBP000 GBP000
(audited)
Revenue* 1,621,692 785,466 - 2,407,158
===================================== ============= ============ =========== =========
Share of joint ventures' revenue 207,614 126,977 - 334,591
===================================== ============= ============ =========== =========
Non GAAP joint ventures' revenue
adjustment* - (48,116) - (48,116)
===================================== ============= ============ =========== =========
Adjusted revenue 1,829,306 864,327 - 2,693,633
===================================== ============= ============ =========== =========
Gross profit 337,449 101,823 - 439,272
===================================== ============= ============ =========== =========
Share of joint ventures' gross
profit 39,348 17,942 - 57,290
===================================== ============= ============ =========== =========
Exceptional cost of sales 3,174 2,570 - 5,744
===================================== ============= ============ =========== =========
Other operating income 27,154 13,505 - 40,659
===================================== ============= ============ =========== =========
Adjusted gross profit 407,125 135,840 - 542,965
===================================== ============= ============ =========== =========
Operating profit / (loss) 260,734 47,827 (23,147) 285,414
===================================== ============= ============ =========== =========
Share of joint ventures' operating
profit 38,689 17,800 - 56,489
===================================== ============= ============ =========== =========
Exceptional items 3,174 2,570 6,481 12,225
===================================== ============= ============ =========== =========
Amortisation of acquired intangibles 2,760 11,480 - 14,240
===================================== ============= ============ =========== =========
Adjusted operating profit / (loss) 305,357 79,677 (16,666) 368,368
===================================== ============= ============ =========== =========
Adjusted gross margin 22.3% 15.7% - 20.2%
===================================== ============= ============ =========== =========
Adjusted operating margin 16.7% 9.2% - 13.7%
===================================== ============= ============ =========== =========
* Revenue and cost of sales for both comparative periods have
been restated in relation to trading with our joint ventures (see
note 1)
(a) Segmental financial position
Housebuilding Partnerships Group items Total
Period ended 30 June 2022 (unaudited) GBP000 GBP000 GBP000 GBP000
Goodwill and intangibles 277,924 391,185 - 669,109
====================================== ============= ============ =========== =========
Tangible net assets / (liabilities)
excluding investments in joint
ventures 1,227,127 76,919 90,437 1,394,483
====================================== ============= ============ =========== =========
Investments in joint ventures 158,107 29,308 - 187,415
====================================== ============= ============ =========== =========
Net cash - - 114,968 114,968
====================================== ============= ============ =========== =========
Housebuilding Partnerships Group items Total
Period ended 30 June 2021 (unaudited) GBP000 GBP000 GBP000 GBP000
Goodwill and intangibles 281,391 402,671 - 684,062
====================================== ============= ============ =========== =========
Tangible net assets / (liabilities)
excluding investments in joint
ventures 1,374,293 44,401 (1,315) 1,417,379
====================================== ============= ============ =========== =========
Investments in joint ventures 130,471 21,491 - 151,962
====================================== ============= ============ =========== =========
Net cash - - 31,563 31,563
====================================== ============= ============ =========== =========
Housebuilding Partnerships Group items Total
Period ended 31 December 2021 GBP000 GBP000 GBP000 GBP000
(audited)
Goodwill and intangibles 278,381 396,937 - 675,318
====================================== ============= ============ =========== =========
Tangible net assets / (liabilities)
excluding investments in joint
ventures 1,222,002 54,782 28,786 1,305,570
====================================== ============= ============ =========== =========
Investments in joint ventures 151,080 23,984 - 175,064
====================================== ============= ============ =========== =========
Net cash - - 234,454 234,454
====================================== ============= ============ =========== =========
5 Exceptional items
Exceptional items are those which, in the opinion of the Board,
are material by size and irregular in nature and therefore require
separate disclosure within the income statement in order to assist
the users of the financial statements in understanding the
underlying business performance of the Group.
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Administrative expenses relating to the
Acquisition - 2,798 6,481
========================================== ============= ============= =============
Cost of sales relating to legacy property
fire safety 71,429 - 5,744
========================================== ============= ============= =============
Total exceptional expenses 71,429 2,798 12,225
========================================== ============= ============= =============
Exceptional expenses relating to legacy property fire safety
result from ongoing investigations into properties developed where
remediation works may be required. The amount of the provision
reflects our best estimate to carry out these remediation works
(note 11).
Tax on exceptional items in H1 22 was GBP15.7m (H1 21: GBP0.5m,
FY 21: GBP2.3m).
6 Earnings per share
Profit attributable to ordinary shareholders
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Profit for the period / year attributable
to equity holders of the parent 86,626 121,382 254,125
============================================ ============= ============= =============
Profit for the period / year attributable
to equity holders of the parent
(before exceptional items and amortisation
of acquired intangibles) 149,461 130,768 278,267
============================================ ============= ============= =============
Earnings per share
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Basic earnings per share 39.1p 54.8p 114.6p
================================================= ============= ============= =============
Diluted earnings per share 38.9p 54.6p 114.1p
================================================= ============= ============= =============
Basic earnings per share (before exceptional
items and amortisation of acquired intangibles) 67.4p 59.0p 125.5p
================================================= ============= ============= =============
Diluted earnings per share (before exceptional
items and amortisation of acquired intangibles) 67.2p 58.8p 124.9p
================================================= ============= ============= =============
Weighted average number of ordinary shares
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Weighted average number of ordinary shares 221,655,600 221,579,615 221,788,132
=========================================== ============= ============= =============
Basic earnings per share
Basic earnings per ordinary share for the six months ended 30
June 2022 is calculated on a profit attributable to equity holders
of GBP86,626,000 (H1 21: profit after tax of GBP121,382,000; FY 21:
profit after tax of GBP254,125,000) over the weighted average of
221,655,600 (H1 21: 221,579,615; FY 21: 221,788,132) ordinary
shares in issue during the period.
Diluted earnings per share
The calculation of diluted earnings per share at 30 June 2022
was based on the profit attributable to equity holders of
GBP86,626,000 (H1 21: profit after tax of GBP121,382,000; FY 21:
profit after tax of GBP254,125,000).
The Group's diluted weighted average ordinary shares potentially
in issue during the six months ended 30 June 2022 was 222,412,583
(H1 21: 222,507,940; FY 21: 222,787,131).
The average number of shares is increased by reference to the
average number of potential ordinary shares held under option
during the year. This reflects the number of ordinary shares which
would be purchased using the aggregate difference in value between
the market value of shares and the share option exercise price and
fair value of future employee services. The market value of shares
has been calculated using the average ordinary share price during
the year. Only share options which are expected to meet their
cumulative performance criteria have been included in the dilution
calculation.
7 Dividends
The following dividends per qualifying ordinary share were
settled by the Group:
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
May 2022: 40p (H1 21: 20p) 88,748 44,340 88,709
=========================== ============= ============= =============
88,748 44,340 88,709
=========================== ============= ============= =============
A final dividend of 40 pence per share was paid on 24 May 2022
in respect of 2021 following approval by shareholders at the
AGM.
8 Financial Instruments
Fair values
There is no material difference between the carrying value of
financial instruments shown in the balance sheet and their fair
value.
Maturities of financial instruments
30 June 2022 (unaudited) Less than Total
6 Between 1-2 Between 2-5 contractual Carrying
months 6-12 months years years Over 5 years cash flows amount
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-derivative financial
assets
========================= ========= =========== =========== =========== ============ ============ ===========
Restricted cash 188 - - - 338 526 526
========================= ========= =========== =========== =========== ============ ============ ===========
Trade and other
receivables 251,423 - - - 677 252,100 252,100
========================= ========= =========== =========== =========== ============ ============ ===========
Cash and cash equivalents 427,949 - - - - 427,949 427,949
========================= ========= =========== =========== =========== ============ ============ ===========
Non-derivative financial
liabilities
========================= ========= =========== =========== =========== ============ ============ ===========
Bank and other loans (151,238) (50,885) - - - (202,123) (200,000)
========================= ========= =========== =========== =========== ============ ============ ===========
Long-term loans (2,015) (2,015) (4,030) (112,090) (7,145) (127,295) (112,981)
========================= ========= =========== =========== =========== ============ ============ ===========
Trade and other payables (858,811) (136,877) (98,632) (45,109) (9,024) (1,148,453) (1,142,669)
========================= ========= =========== =========== =========== ============ ============ ===========
Lease liabilities (5,439) (5,439) (5,598) (9,991) (2,569) (29,036) (27,565)
========================= ========= =========== =========== =========== ============ ============ ===========
Total net financial
liabilities (337,943) (195,216) (108,260) (167,190) (17,723) (826,332) (802,640)
========================= ========= =========== =========== =========== ============ ============ ===========
30 June 2021 (unaudited) Less than Total
6 Between 1-2 Between 2-5 contractual Carrying
months 6-12 months years years Over 5 years cash flows amount
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-derivative financial
assets
========================= ========= =========== =========== =========== ============ ============ ===========
Restricted cash - 251 251 - 344 846 846
========================= ========= =========== =========== =========== ============ ============ ===========
Trade and other
receivables 245,204 - - - 853 246,057 246,057
========================= ========= =========== =========== =========== ============ ============ ===========
Cash and cash equivalents 342,598 - - - - 342,598 342,598
========================= ========= =========== =========== =========== ============ ============ ===========
Non-derivative financial
liabilities
========================= ========= =========== =========== =========== ============ ============ ===========
Long-term loans (4,561) (4,561) (209,122) (12,090) (112,030) (342,364) (311,035)
========================= ========= =========== =========== =========== ============ ============ ===========
Trade and other payables (813,124) (105,594) (100,565) (51,622) (15,407) (1,086,312) (1,083,576)
========================= ========= =========== =========== =========== ============ ============ ===========
Lease liabilities (8,849) (6,449) (8,974) (9,767) (4,656) (38,695) (37,280)
========================= ========= =========== =========== =========== ============ ============ ===========
Total net financial
liabilities (238,732) (116,353) (318,410) (73,479) (130,896) (877,870) (842,390)
========================= ========= =========== =========== =========== ============ ============ ===========
31 December 2021 Less than Total
(audited) 6 Between 1-2 Between 2-5 contractual Carrying
months 6-12 months years years Over 5 years cash flows amount
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-derivative financial
assets
========================= ========= =========== =========== =========== ============ ============ ===========
Restricted cash 217 217 - - 344 778 778
========================= ========= =========== =========== =========== ============ ============ ===========
Trade and other
receivables 241,420 - - - 454 241,874 241,874
========================= ========= =========== =========== =========== ============ ============ ===========
Cash and cash equivalents 398,714 - - - - 398,714 398,714
========================= ========= =========== =========== =========== ============ ============ ===========
Non-derivative financial
liabilities
========================= ========= =========== =========== =========== ============ ============ ===========
Bank and other loans (725) (725) (50,725) - - (52,175) (50,000)
========================= ========= =========== =========== =========== ============ ============ ===========
Long term loans (2,015) (2,015) (4,030) (114,105) (8,097) (130,262) (114,260)
========================= ========= =========== =========== =========== ============ ============ ===========
Trade and other payables (880,491) (89,674) (149,647) (53,222) (12,691) (1,185,725) (1,177,423)
========================= ========= =========== =========== =========== ============ ============ ===========
Lease liabilities (7,936) (6,958) (6,165) (10,105) (3,631) (34,795) (33,051)
========================= ========= =========== =========== =========== ============ ============ ===========
Total net financial
liabilities (250,816) (99,155) (210,567) (177,432) (23,621) (761,591) (733,368)
========================= ========= =========== =========== =========== ============ ============ ===========
Estimation of fair values
The following summarises the major methods and assumptions used
in estimating the fair values of financial instruments:
Land purchased on extended payment terms
When land is purchased on extended payment terms, the Group
initially records it at its fair value with a land creditor
recorded for any outstanding monies based on this fair value
assessment. Fair value is determined as the outstanding element of
the price paid for the land discounted to present day. The
difference between the nominal value and the initial fair value is
amortised over the period of the extended credit term and charged
to finance costs using the 'effective interest' rate method,
increasing the value of the land creditor such that at the date of
maturity the land creditor equals the payment required.
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Balance at period / year end 405,226 375,952 414,254
============================== ============= ============= =============
Total contracted cash payment 411,011 378,708 422,555
============================== ============= ============= =============
Due within 1 year 254,751 211,187 205,546
============================== ============= ============= =============
Due within 1-2 years 102,169 100,565 149,490
============================== ============= ============= =============
Due within 2-3 years 27,295 37,517 25,335
============================== ============= ============= =============
Due within 3-4 years 11,545 9,279 18,926
============================== ============= ============= =============
Due within 4-5 years 6,269 4,826 9,945
============================== ============= ============= =============
Due in more than 5 years 8,982 15,334 13,313
============================== ============= ============= =============
Bank and other loans
Fair value is calculated based on discounted expected future
principal and interest flows.
The maturity date for the Group's GBP50m term loan was amended
on 23 February 2021 from March 2021 to March 2023. As this loan is
repayable within 12 months of the 30 June 2022, this amount is now
shown as a current liability (whereas it was shown as a non-current
liability at 30 June 2021 and 31 December 2021).
Trade and other receivables / payables
Other than land creditors, the nominal value of trade
receivables and payables is deemed to reflect the fair value. This
is due to the fact that transactions which give rise to these trade
receivables and payables arise in the normal course of trade with
industry standard payment terms.
9 Tax
As part of the Government's Building Safety Package to bring an
end to unsafe cladding, they have introduced a new tax payable on
profits of Developers on 2 February 2022. This Residential Property
Developer Tax (RPDT) is payable by the largest residential property
developers in order that they make a fair contribution in order to
fund cladding remediation works. This has been implemented with
effect from 1 April 2022 at a rate of 4% and therefore we are
disclosing the amount of RPDT charged on our profits separately in
our financial statements.
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Income tax expense excluding residential
property developer tax 21,383 34,831 65,411
========================================= ============= ============= =============
Residential property developer tax 3,336 - -
========================================= ============= ============= =============
Total tax expense 24,719 34,831 65,411
========================================= ============= ============= =============
10 Related party transactions
Transactions between fellow subsidiaries, which are related
parties, have been eliminated on consolidation, as have
transactions between the Company and its subsidiaries during this
year.
Transactions between the Group, Company and key management
personnel in the half year ended 30 June 2022 were limited to those
relating to remuneration, which will be disclosed in the directors'
remuneration report published in the Group Annual Report and
Accounts 2022.
Mr. Greg Fitzgerald, Group Chief Executive, is Non-Executive
Chairman of Ardent Hire Solutions Limited ("Ardent"). The Group
hires forklift trucks from Ardent.
Mr. Graham Prothero, is Non-Executive Director and Chair of the
Audit Committee of Marshalls PLC. The Group incurred costs with
Marshalls PLC in relation to landscaping services.
Ms. Katherine Innes Ker, is a Non-Executive Director of Forterra
PLC. The Group incurred costs with Forterra PLC in relation to the
supply of bricks.
Mr. Ian Tyler, Non-Executive Chairman, is the Chairman of
Affinity Water Limited and a Non-Executive Director of BAE Systems
PLC. The Group received water services and incurred car parking
charges with these companies, respectively, in the period. Ian
Tyler resigned as the Non-Executive Chairman in May 2022 and
therefore all related party transactions disclosed are up to the
resignation date.
The total net value of transactions with related parties
excluding joint ventures have been made at arms length and were as
follows:
Expenses paid to Amounts payable Amounts owed by
related parties to related parties related parties
============================================= ============================================= =============================================
Six months Six months Six months Six months Six months Six months
ended ended Year ended ended ended Year ended ended ended Year ended
30 June 2022 30 June 2021 31 Dec 2021 30 June 2022 30 June 2021 31 Dec 2021 30 June 2022 30 June 2021 31 Dec 2021
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
Trading
transactions
============= ============== ============== ============= ============== ============== ============= ============== ============== =============
Ardent 2,937 2,646 5,598 716 534 426 - - -
================= ============== ============== ============= ============== ============== ============= ============== ============== =============
Marshalls PLC 1 14 16 1 - - - - -
================= ============== ============== ============= ============== ============== ============= ============== ============== =============
Forterra PLC 67 396 579 49 16 115 - - -
================= ============== ============== ============= ============== ============== ============= ============== ============== =============
Affinity Water
Limited 4 18 31 1 2 - - - 1
================= ============== ============== ============= ============== ============== ============= ============== ============== =============
BAE Systems PLC - 1 1 - 4 - - - -
================= ============== ============== ============= ============== ============== ============= ============== ============== =============
Transactions between the Group and its joint ventures are
disclosed as follows:
Interest income and dividend
distributions from related
Sales to related parties parties
============================================= =============================================
Six months Six months Year ended Six months Six months Year ended
ended ended 31 Dec 2021 ended ended 31 Dec 2021
30 June 2022 30 June 2021 GBP000 30 June 2022 30 June 2021 GBP000
GBP000 GBP000 (audited) GBP000 GBP000 (audited)
(unaudited) (unaudited) (unaudited) (unaudited)
Trading
transactions** 55,971 70,957 142,606 - - -
===================== ============== ============== ============= ============== ============== =============
Non-trading
transactions - - - 10,904 24,778 40,183
===================== ============== ============== ============= ============== ============== =============
** Trading transactions with joint ventures in the year ended 31
December 2021 has been restated within this note to include
GBP100.6m of sales to Gallions LLP, Opal Silvertown LLP and Enfield
LLP
Amounts owed by related Amounts owed to related
parties parties
============================================= =============================================
Six months Six months Year ended Six months Six months Year ended
ended ended 31 Dec 2021 ended ended 31 Dec 2021
30 June 2022 30 June 2021 GBP000 30 June 2022 30 June 2021 GBP000
GBP000 GBP000 (audited) GBP000 GBP000 (audited)
(unaudited) (unaudited) (unaudited) (unaudited)
Balances with joint
ventures 274,334 328,413 308,217 47,467 33,282 46,010
===================== ============== ============== ============= ============== ============== =============
Sales to related parties, including joint ventures, are based on
normal commercial terms available to unrelated third parties. The
loans made to joint ventures are all on normal commercial terms,
bear interest at rates of between 3.5% and 5.1%; all balances with
related parties will be settled in cash.
There have been no other related party transactions in the half
year which have materially affected the financial performance or
position of the Group, and which have not been disclosed.
11 Provisions
Legacy properties Site-related
fire safety costs Other Total
GBP000 GBP000 GBP000 GBP000
As at 1 January 2022 25,212 7,162 7,009 39,383
================================= ================= ============ ======= =======
Additional provisions made 71,429 - 3,216 74,645
================================= ================= ============ ======= =======
Amounts used (2,423) (65) (2,001) (4,489)
================================= ================= ============ ======= =======
Unused provisions reversed - - (759) (759)
================================= ================= ============ ======= =======
As at 30 June 2022 (unaudited) 94,218 7,097 7,465 108,780
================================= ================= ============ ======= =======
Legacy properties Site-related
fire safety costs Other Total
GBP000 GBP000 GBP000 GBP000
As at 1 January 2021 20,885 13,437 6,079 40,401
================================= ================= ============ ======= =======
Additional provisions made 589 186 299 1,074
================================= ================= ============ ======= =======
Amounts used (444) (6,839) - (7,283)
================================= ================= ============ ======= =======
Unused provisions reversed - (575) - (575)
================================= ================= ============ ======= =======
As at 30 June 2021 (unaudited) 21,030 6,209 6,378 33,617
================================= ================= ============ ======= =======
Legacy properties Site-related
fire safety costs Other Total
GBP000 GBP000 GBP000 GBP000
As at 1 January 2021 20,885 13,437 6,079 40,401
================================= ================= ============ ======= =======
Additional provisions made 5,744 380 1,837 7,961
================================= ================= ============ ======= =======
Amounts used (1,417) (6,080) - (7,497)
================================= ================= ============ ======= =======
Unused provisions reversed - (575) (907) (1,482)
================================= ================= ============ ======= =======
As at 31 December 2021 (audited) 25,212 7,162 7,009 39,383
================================= ================= ============ ======= =======
Of the total provisions detailed in the table above
GBP23,099,000 is expected to be utilised within the next year (HY
21: GBP1,013,000, FY 21: GBP8,455,000).
The legacy property fire safety provision includes estimated
costs to remediate fire safety issues for finished developments.
The Group has undertaken a review of all of its current and legacy
buildings where a potential liability has been identified based on
both legal and constructive obligations. As at the balance sheet
date the Group has provided GBP94,218,000 for the expected costs of
remedial works that may be required. During the period,
GBP2,423,000 was spent. This review, performed by in house teams,
involved a physical inspection of potentially impacted developments
along with an assessment of the cost to remediate based on external
cost estimates where available and in part on experiences of
similar remedial work undertaken. The individual developments and
associated cost to remediate were then reviewed by management. We
expect the majority of this provision to be utilised over the next
five years.
12 Reconciliation of net cash flow to net cash
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Cash and cash equivalents 427,949 342,598 398,714
================================= ============= ============= =============
Non-current bank and other loans (112,981) (311,035) (164,260)
================================= ============= ============= =============
Current bank and other loans (200,000) - -
================================= ============= ============= =============
Net cash 114,968 31,563 234,454
================================= ============= ============= =============
Analysis of net cash:
Six months Six months
ended ended Year ended
30 June 30 June
2022 2021 31 Dec 2021
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Net cash at 1 January 234,454 37,885 37,885
============================================== ============= ============= =============
Cash flow per cash flow statement 29,235 1,610 57,726
============================================== ============= ============= =============
Loan repayments 220,952 80,000 370,000
============================================== ============= ============= =============
Loan drawdowns (370,000) (80,000) (220,000)
============================================== ============= ============= =============
Imputed interest on USPP loan 451 439 884
============================================== ============= ============= =============
Prepaid facility fees capitalised - - 500
============================================== ============= ============= =============
Prepaid facility fees amortised (124) (372) (4,444)
============================================== ============= ============= =============
Reclassification of Homes England development
loan - (7,999) (8,097)
============================================== ============= ============= =============
Net cash at the end of the period / year 114,968 31,563 234,454
============================================== ============= ============= =============
13 Alternative performance measures
The Group uses alternative performance measures which are not
defined within UK-adopted International Accounting Standards. The
Directors use these alternative performance measures, along with
UK-adopted International Accounting Standards measures, to assess
the operational performance of the Group.
The definition and reconciliation of financial alternative
performance measures used to UK-adopted International Accounting
Standards measures are shown below:
Adjusted revenue
Adjusted revenue is defined as revenue including share of joint
ventures' revenue:
Six months Six months Year ended
ended ended 31 Dec
2021
30 June 30 June GBP000
2022 2021
GBP000 GBP000 (audited)
(unaudited) (unaudited)
Revenue per Group income statement* 1,162,988 1,129,446 2,407,158
============================================= ============= ============= ===========
Non GAAP joint ventures' revenue adjustment* (32,472) (26,743) (48,116)
============================================= ============= ============= ===========
Share of joint ventures' revenue 197,834 156,659 334,591
============================================= ============= ============= ===========
Adjusted revenue 1,328,350 1,259,362 2,693,633
============================================= ============= ============= ===========
* Revenue and cost of sales for both comparative periods have
been restated in relation to trading with our joint ventures (see
note 1)
Adjusted gross profit
Adjusted gross profit is defined as gross profit including share
of joint ventures' gross profit, plus other operating income and
before exceptional cost of sales:
Six months Six months Year ended
ended ended 31 Dec 2021
30 June 30 June GBP000
2022 2021
GBP000 GBP000 (audited)
(unaudited) (unaudited)
Gross profit per Group income statement 153,136 201,657 439,272
======================================== ============= ============= =============
Other operating income 25,051 19,614 40,659
======================================== ============= ============= =============
Exceptional cost of sales 71,429 - 5,744
======================================== ============= ============= =============
Share of joint ventures' gross profit 30,889 26,719 57,290
======================================== ============= ============= =============
Adjusted gross profit 280,505 247,990 542,965
======================================== ============= ============= =============
Adjusted operating profit
Adjusted operating profit is defined as operating profit
including share of joint ventures' operating profit, before
exceptional expenses and amortisation of acquired intangibles:
Six months Six months Year ended
ended ended 31 Dec 2021
30 June 30 June GBP000
2022 2021
GBP000 GBP000 (audited)
(unaudited) (unaudited)
Operating profit per Group income statement 89,333 139,113 285,414
============================================ ============= ============= =============
Exceptional expenses 71,429 2,798 12,225
============================================ ============= ============= =============
Amortisation of acquired intangibles 7,120 7,120 14,240
============================================ ============= ============= =============
Share of joint ventures' operating profit 30,285 26,429 56,489
============================================ ============= ============= =============
Adjusted operating profit 198,167 175,460 368,368
============================================ ============= ============= =============
Adjusted profit before tax
Adjusted profit before tax is defined as profit before tax
before exceptional expenses and amortisation of acquired
intangibles:
Six months Six months Year ended
ended ended 31 Dec 2021
30 June 30 June GBP000
2022 2021
GBP000 GBP000 (audited)
(unaudited) (unaudited)
Profit before tax per Group income statement 111,345 156,213 319,536
============================================= ============= ============= =============
Exceptional expenses 71,429 2,798 12,225
============================================= ============= ============= =============
Amortisation of acquired intangibles 7,120 7,120 14,240
============================================= ============= ============= =============
Adjusted profit before tax 189,894 166,131 346,001
============================================= ============= ============= =============
14 Share buy back
During the period ended 30th June 2022, the Group repurchased
2,620,180 shares at a cost of GBP22.1m of which 1,120,180 shares at
a total cost of GBP9.3m were cancelled. GBP0.6m relates to capital
redemption and is held in share premium and capital redemption on
the balance sheet. As at 30th June 2022, the balance of the own
shares held reserve increased by 1,500,000 to 1,937,133 (HY 21:
437,133 and FY 21: 437,133).
15 Post balance sheet events
Since 30 June 2022, the Group has settled GBP150m of revolving
credit facility drawdown (GBP100m on 18 July 2022 and GBP50m on 20
July 2022).
On 5 September 2022, the Company announced a recommended
combination of Vistry Group PLC and Countryside Partnerships PLC.
The completion of the combination is subject to various regulatory
and investor approvals and is expected to take place during the
fourth quarter of 2022 and the first quarter of 2023. The
assessment of going concern for the Group has been done on both a
standalone and a combined business basis.
16 Further information
Further information on Vistry Group PLC can be found on the
Group's corporate www.vistrygroup.co.uk including the analyst
presentation document which will be presented at the Group's
results meeting on 8 September 2022.
Statement of directors' responsibilities
The directors confirm that these condensed consolidated interim
financial statements have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and
that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
The directors of Vistry Group PLC are listed in the Vistry Group
PLC Annual Report for 31 December 2021, with the exception of the
following changes in the period:
-- Rowan Baker was appointed on 18 May 2022; and
-- Ian Tyler resigned from the Board on 18 May 2022.
A list of current directors is maintained on the Vistry Group
PLC website: www.vistrygroup.co.uk
By order of the Board,
Greg Fitzgerald Earl Sibley
Chief Executive Chief Financial Officer
8 September 2022
Independent review report to Vistry Group PLC
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Vistry Group PLC's condensed consolidated
interim financial statements (the "interim financial statements")
in the Half year results of Vistry Group PLC for the 6 month period
ended 30 June 2022 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the Group balance sheet as at 30 June 2022;
-- the Group income statement and Group statement of
comprehensive income for the period then ended;
-- the Group statement of cash flows for the period then ended;
-- the Group statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Half year
results of Vistry Group PLC have been prepared in accordance with
UK adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Half year
results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with this ISRE.
However, future events or conditions may cause the group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Half year results, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the Half
year results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Half year results, including
the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Half year results based on our review.
Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
8 September 2022
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