16 May 2024
On track to
deliver 10%+ growth in completions in FY24, demonstrating strength
of Partnerships model
Vistry Group (the Group) is providing an update
on trading in the period from 1 January 2024 to date, ahead of its
Annual General Meeting which is being held at 12:00 noon
today.
Greg
Fitzgerald, Chief Executive commented:
"The Group has had a good start to the year
with our unique Partnerships model clearly demonstrating its market
resilience. Working closely with our partners, we are seeing
good demand in the Partner Funded market and accompanied by an
improving trend for our open market sales, are on track to deliver
more than 10% growth in completions in FY24, with half year and
full year profit expected to be ahead of last year. This is
underpinned by our strong forward sales position totalling £4.9bn,
up 10% on the same position last year. We remain confident in
our differentiated strategy and are making good progress towards
our medium-term targets."
Current
trading
We continue to see attractive Partnership
opportunities that meet our requirements for a minimum of 50% of
units to be Partner Funded, a 40% return on capital employed and
over 12% operating margin. Working alongside a range of
partners, we are pleased to have secured new land and development
opportunities totalling 6,037 mixed tenure new homes across 19
developments in the year to date.
Demand from Registered Providers (RPs) for
affordable homes has remained robust, with For Profit Registered
Providers, a high growth sub-sector of this market, continuing to
demonstrate strong demand. We recognise the current need for
some traditional RPs to invest in the maintenance of their existing
housing stock and are working closely with them to ensure Vistry
remains their partner of choice for their new housing
investment.
We are focused on establishing new partnerships
with RPs and Local Authorities, and our unique centralised
Partnerships and Regeneration team supports our business units in
developing these important relationships. We also continue to
see strong interest from Private Rented Sector (PRS)
providers. Pricing across Partner Funded sales has remained
resilient in the period.
In the open market, we have seen an improving
trend in our open market sales rates since the start of the year.
Pricing on open market sales has remained relatively flat
with incentives running at c. 4% of the open market sales
price.
The Group's total sales rate1 has
averaged 0.96 (2023: 0.87) in the year to date, increasing to 1.23
(2023: 1.24) over the last 8-week period.
We are well positioned for FY24 with 95% of our
targeted completions on secured development opportunities and for
FY25, 75% of targeted completions on secured development
opportunities.
Outlook
The Group is on track to deliver more than
18,000 (FY23: 16,118) completions in FY24, an increase of more than
10% on prior year and up from our previous expectation of 17,500
units. This is underpinned by our strong forward sales
position which is up 10% on the prior year and totals £4.9bn (2023:
£4.5bn) as at 15 May 2024, of which £2.1bn is for delivery this
year. We expect the H1/H2 weighting of completions in FY24 to
be similar to FY23.
The Group will benefit from lower year on year
building material costs in FY24 reflecting engagement with our
supply chain throughout 2023. Our high level of visibility on
forward sales and build programme enables us to work closely with
our subcontractors to secure beneficial terms. The Group is
focused on driving operational and capital efficiency across all 26
business units and, with a series of initiatives in place, expects
to release capital in FY24. Our timber frame operations will
step up delivery in this year, with around 4,000 of our new homes
to use our timber frames and further significant growth planned in
2025.
We expect half year and full year profit to be
ahead of last year and remain confident in achieving a 40% ROCE and
£800m operating profit in the medium term. We remain
committed to returning £1bn of capital to our shareholders over the
next three years with our latest £100m share buyback programme
commencing as planned in April, purchasing £18m of shares to
date.
1.Sales rate includes Partner Funded sales
(excluding S106 units and 100% Partner Funded developments) and
open market sales
For further information please
contact:
Vistry Group
PLC
Tim Lawlor, Chief Financial Officer
Susie Bell, Group Investor Relations Director
FTI
Consulting
Richard Mountain / Susanne Yule
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07469 287335
020 3727 1340
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