TIDMVTY
RNS Number : 0526F
Vistry Group PLC
12 November 2020
12 November 2020
Vistry Group PLC
Trading update
Vistry Group PLC (the "Group") is issuing a scheduled trading
update for the period from 1 July to 11 November 2020 ("the
period").
Highlights
-- On track to deliver FY20 profit before tax[1] at the top end
of expected range of GBP130m to GBP140m
-- Well positioned to deliver step-up in profit before tax([1])
to GBP310m in FY21 assuming stable market conditions
-- FY20 net debt to be significantly lower than expected
reflecting strong operational performance
-- Resumption of dividends in FY21 including interim dividend in November 2021
-- COVID-secure measures working well; no impact to operations from recent lockdowns
-- On track to retain maximum 5-star HBF customer satisfaction rating for 2020
Strong sales position
Demand for our new homes has remained consistently strong with
the Group achieving a private sales rate per outlet per week since
1 July 2020 of 0.67 (2019: 0.58[2]). The last couple of weeks have
remained robust despite the announcement of the second national
lockdown. Pricing has been firm, and we are fully sold for our
forecast total completions for FY20.
Over the past six months we have developed our online sales
capability including the option to reserve a home through a mobile
device. This channel is proving increasingly popular and more than
500 customers have already reserved their new home through our
'six-click' reservation process. We offer virtual tours and our
sales offices continue to be open and operate on an appointment
only, COVID-secure basis.
Customer satisfaction remains a key priority and we are pleased
to see our HBF Customer Satisfaction score for the year from 1
October 2019 trending above 90%. We remain confident of achieving
the maximum 5-star HBF customer satisfaction rating for 2020.
Vistry Partnerships
Vistry Partnerships has a clear strategy to deliver accelerated
profit growth with a revenue target of more than GBP1bn and an
operating profit margin target of 10% for FY22.
This growth will be driven through increasing our proportion of
higher margin, land led developments within the Vistry Partnerships
contracting business, and by a significant increase in our higher
margin mixed tenure completions, where we are targeting c. 3,000
units in FY22, up from 1,158 in FY19. The Group expects to report
progress towards this in FY20 with an increase in mixed tenure
completions and some margin progression.
There is a strong and resilient pipeline of demand from Local
Authorities, Housing Associations and other investors, driven by
high underlying demand and underpinned by resolute political
commitment to increasing the supply of much needed affordable
homes. With its expertise, relationships and geographical reach,
Vistry Partnerships is uniquely positioned to maximise this
opportunity.
Robust supply
Our supply chain has been resilient during the pandemic and we
highly value our close working relationships with our suppliers. We
have been in regular dialogue with them as we entered the second
national lockdown and continue to see a good supply of build
materials and labour with low levels of cost inflation.
COVID-secure operations
The health and safety of our employees, sub-contractors,
suppliers and customers is a key priority. The construction
industry has adapted well to working in a COVID-secure manner and
we have comprehensive, COVID-secure working practices embedded
across all areas of our business. There has been no requirement to
change our business operations with this second national lockdown
and all our sites remain open, with productivity at normal
levels.
Increased land activity
We continue to see attractive opportunities in the land market
and have increased our land activity in the second half to ensure a
good supply of high-quality developments in line with our
operational and financial targets.
In the year to date, Housebuilding has secured 3,237 plots
across 16 developments totalling GBP179.2m and has a strong land
pipeline, with 100% of land required for forecast FY21 completions
secured.
Partnerships is investing in its owned land bank to support its
targeted step-up in mixed tenure completions to 3,000 units by
2022. In the year to date, Partnerships has secured 2,157 plots on
9 sites for mixed tenure development and is well positioned for
2021, with 100% of the land required for forecast FY21 mixed-tenure
completions secured.
Strategic land remains a key component of the Group's land
supply and with a c. 150 to 300 basis point margin enhancement,
will drive margin growth in both Housebuilding and Partnerships'
mixed tenure. In the year to date, we are pleased to have secured
2,436 strategic land plots across 8 developments.
Funding and liquidity
We are on track to deliver a significantly greater reduction in
Group net debt at 31 December 2020 than previously expected (30
June 2020: GBP357.3m). This will be achieved through our strong
operational performance across the group.
The Group is operating with substantial funding headroom, with
committed banking facilities totalling GBP770m and well spread
maturities out to 2027.
Dividend
With the Group's strong performance including cash generation
and the expected reduction in net debt, combined with the positive
outlook supported by the Group's forward sales position, the Board
is pleased to confirm its intention to resume dividend payments
earlier than previously expected with an interim payment payable
next November in respect of FY21. The Board expects to commence
with a 2.5 times dividend cover and a progressive policy
thereafter.
Outlook
The Group is on track to deliver full year profit before tax(1)
for FY20 at the top end of our expected range of GBP130m to GBP140m
and a Group net debt significantly lower than previously
expected.
Looking to FY21, we expect to step-up completions in both
Housebuilding and Partnerships which is supported by our record
forward sales position and secured land supply. Assuming stable
market conditions, the Group remains confident it can increase
Group profit before tax(1) in FY21 to GBP310m. With strong cash
generation, we expect to reduce Group net debt by a further GBP100m
in FY21 and to resume dividend payments with a 2.5 times dividend
cover.
Housebuilding forward sales total 6,726 (June 2020: 5,729) units
(including 100% JVs) and GBP1,536m (June 2020: GBP1,264m) revenue.
Mixed tenure forward sales total 1,657 (June 2020: 1,604) units
(including 100% JVs) and GBP358m (June 2020: GBP357m) revenue.
Vistry Partnerships' contracting forward order book totals GBP811m
(30 June 2020: GBP920m).
Greg Fitzgerald, Chief Executive said:
"Demand for our new homes has remained strong and we are on
track to deliver profit for FY20 at the top end of our
expectations. We are well positioned for FY21 with a record forward
sales position and assuming stable market conditions, expect to see
a step-up in completions delivering Group profits of GBP310m.
"Our priority is reducing the Group's leverage while delivering
on our medium-term targets. Cash generation has been strong, and we
now expect our FY20 year-end net debt to be significantly lower
than our previous expectations.
"Given this robust business performance and outlook, the Board
is pleased to confirm its intention to resume dividends in FY21
including an interim dividend next November, earlier than
previously anticipated."
Forward sales (GBPm) 11 November 2020 30 June 2020
---------------------- ----------------- -------------
Housebuilding
* Private 762 660
* Affordable 369 330
* JVs (100%) 405 274
Total Housebuilding 1,536 1,264
Partnerships
* Mixed tenure 160 168
* JVs (100%) 198 189
Total mixed tenure 358 357
Total development 1,894 1,621
Total contracting 811 920
Total Group 2,705 2,541
---------------------- ----------------- -------------
For further information please contact:
Vistry Group PLC
Earl Sibley, Chief Financial
Officer
Susie Bell, Head of Investor
Relations 01675 437160
Powerscourt
Justin Griffiths
Nick Dibden
Victoria Heslop 020 7250 1446
[1] Pre-exceptional items and amortisation of acquired
intangible assets
[2] Proforma Vistry Group sales rate
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFFMESFESSEDF
(END) Dow Jones Newswires
November 12, 2020 02:00 ET (07:00 GMT)
Vistry (LSE:VTY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Vistry (LSE:VTY)
Historical Stock Chart
From Jul 2023 to Jul 2024