REG - Vistry Group PLC - Trading Update

VistryAnnouncement

16/05/2024 07:00

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RNS Number : 6270O  Vistry Group PLC  16 May 2024

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 rate(1) 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             07469 287335

 Susie Bell, Group Investor Relations Director

 FTI Consulting

 Richard Mountain / Susanne Yule                 020 3727 1340

 

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