TIDMVTY
RNS Number : 8816Q
Vistry Group PLC
23 October 2023
23 October 2023
Vistry Group PLC - Q3 Trading Update
Vistry Group is today providing a scheduled update on trading
for the period from 1 July 2023 to date.
-- Group is targeting adjusted profit before tax of GBP450m for
FY23, excluding the impact of transitioning the Housebuilding
business to Partnerships, as previously advised
-- Good progress with implementation of strategy to fully focus on Partnerships model
-- Continue to benefit from demand for mixed tenure affordable homes
-- Private sales activity remains subdued, without the normal
seasonal pickup since early September and increased use of
incentives
-- Productive discussions with our supply chain to agree cost reductions
Current trading and Outlook
The Group is targeting adjusted profit before tax of GBP450m for
FY23, excluding the impact of transitioning the Housebuilding
business to Partnerships. As previously described, this impact is
created by the re-evaluation of the full life margin of the Group's
Housebuilding sites to reflect the increased pre-sale elements and
the associated discount in price. We estimate the FY23 impact of
the reduction in full year site margins to be in the region of
GBP40m and as a result, the Group's targeted FY23 adjusted profit
before tax, including this impact, is GBP410m.
Working with our partners we are seeing continuing demand for
mixed tenure affordable homes from Registered Providers, Local
Authorities and the Private Rented Sector, demonstrating the
differentiation of our business model. We continue to make good
progress on the remaining multi-unit transactions expected to be
completed in the year.
As previously reported, we saw a slowdown in open market private
sales during the summer months due to the higher interest rate
environment and inflationary cost pressures on household income.
This trend has continued and we have not seen the seasonal increase
in private sales since September that we had expected. Open market
demand continues to be supported by incentives of c. 5%.
The Group continues to see good demand for the Home Stepper
shared equity product launched in partnership with Sage Homes in
June. The initial portfolio is for c. 800 shared ownership homes
nationally, and we are pleased to report more than 270 reservations
to date.
The Group's average weekly sales rate since 1 July has been 0.60
(2022: 0.64) and 0.76 (2022: 0.77) for the year to date. The
Group's forward order book totals GBP4.3bn with 100% of private
units for FY23 forward sold.
We appreciate the productive discussions we have had in recent
weeks with our key supply chain partners to agree cost reductions
for all our existing and future contracts. With a high level of
visibility on forward sales, build programmes and revenues in the
Partnerships model, we can offer greater continuity of work to our
suppliers and, working with them, can increase the overall rate of
delivery on our sites and supply of much needed affordable mixed
tenure homes.
The Group continues to progress fire safety remediation work and
remains confident that the Group's fire safety provision will cover
the cost of this work in accordance with the Group's
obligations.
Reflecting the timing profile of completions, Group average net
debt for the full year is expected to be higher than previously
expected at c. GBP450m. We continue to expect net debt to reduce to
c. GBP100m as at 31 December 2023.
As announced in September, the Group expects to commence an
initial ordinary share buyback programme of up to GBP55m this year,
to be completed ahead of the announcement of the Group's Full Year
results in March 2024.
Strategy update
In September, the Group announced its updated strategy to fully
focus its operations on its high growth Partnerships model,
increasing its delivery of much needed affordable mixed tenure
housing across the country.
The implementation is making good progress with the revised
operating structure and senior appointments confirmed, and the
employee consultation process concluded. The Group will operate as
a single business with 27 regional business units, a reduction from
32, and the Group's overall headcount will reduce by c. 200 as a
result of this restructuring(1) . The Group has the capacity within
this infrastructure to deliver upon its medium-term growth targets,
with greater use of standardisation and timber frame
manufacturing.
The Group expects to deliver c. GBP25m of annualised cost
savings from this integration of Partnerships and Housebuilding, in
addition to the GBP60m of synergies from the Countryside
acquisition.
The ongoing acute need for affordable mixed tenure housing
across all areas of the country continues to drive demand and we
have received positive endorsement of our strategy from a wide
range of our partners. Increasing the supply of affordable and
sustainable homes through our Partnerships model is at the core of
Vistry's purpose and gives us confidence in delivering on our
medium-term targets.
(1) Redundancies are separate to the approximate 4% reduction in
the total number of roles (on a full-time basis) that has been
implemented in connection with the Countryside acquisition.
For further information please contact:
Vistry Group PLC
Tim Lawlor, Chief Financial Officer
Susie Bell, Group Investor Relations 07469 287335
Director
FTI Consulting
Richard Mountain / Susanne Yule 020 3727 1340
Forward sales
(GBPm) 2 0 October 03 September
2023 2023
Housebuilding
- Private 699 670
- Private - Vistry share of JVs 95 107
- Affordable 422 444
- Affordable - Vistry share of
JVs 82 74
Total Housebuilding 1,298 1,295
Partnerships
- Mixed tenure 1,503 1,482
- Mixed tenure - Vistry share of
JVs 382 401
Total mixed tenure 1,885 1,883
Total partner delivery 1,095 1,106
Total Partnerships 2,980 2,989
Total Group 4,278 4,284
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END
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