22 March 2023
Full year results for the year ended 31 December 2022
Vistry Group PLC (the “Group”) announces full year results for the year ended 31 December 2022.
Greg Fitzgerald, Chief Executive commented:
“2022 was another landmark year for the Group as we delivered a step up in financial performance and made excellent progress across all areas despite the more challenging market conditions experienced in the fourth quarter. The combination with Countryside presents a unique opportunity and has created one of the country’s leading homebuilders, comprising a leading partnerships business and a high quality major housebuilder. It has accelerated the Group’s strategy of rapidly growing its more resilient partnerships revenues and of targeting sector leading return on capital employed.
“The businesses have come together extremely well with a good cultural fit, and the integration process is making excellent progress. As a result, we are confident of delivering annualised synergy benefits of c. £60m, ahead of our original target.
“We are focused on maximising the opportunities from our unique market position and increasing the supply of high quality housing across all tenures. The resilience of our Partnerships business is reflected in its strong forward order book which gives us the confidence that the business will deliver growth in FY 23 revenues in line with its strategy. Housebuilding is focused on operational excellence to maximise its sales opportunity and has the expertise, embedded controls and disciplines in place to succeed. Market conditions are improving and based on the assumption that private sales rates continue to trend towards levels seen in 2019, we expect Group adjusted profit before tax for FY23 to be in excess of £440m[1].
“Our people are key to the Group’s success, and I would like to thank all of our employees, subcontractors and supply chain for their continued hard work and dedication.”
Group financial highlights
| £m unless otherwise stated | FY22 | FY21 | Change |
| Adjusted basis[2] | |||
| Total completions | 11,951 | 11,080 | 7.9% |
| Revenue | 3,073.2 | 2,693.6 | 14.1% |
| Operating profit | 451.1 | 368.4 | 22.4% |
| Operating profit margin | 14.7% | 13.7% | 1.0ppts |
| Profit before tax | 418.4 | 346.0 | 20.9% |
| Basic earnings per share | 137.5p | 125.5p | 9.6% |
| Return on capital employed | 28.3% | 25.5% | 2.8ppts |
| Statutory basis | |||
| Revenue | 2,729.4 | 2,407.2 | 13.4% |
| Operating profit | 212.5 | 285.4 | (25.5)% |
| Profit before tax | 247.5 | 319.5 | (22.5)% |
| Basic earnings per share | 86.5p | 114.6p | (24.5)% |
| Final dividend per share | 32p | 40p | (20.0)% |
| Net cash | 118.2 | 234.5 | (49.6)% |
Highlights
· Completion of transformational acquisition of Countryside Partnerships (“Countryside”) on 11 November 2022
· Integration making excellent progress with annualised synergies from the combination now expected to be c.£60m (ahead of the £50m previously announced), with c.£25m expected in FY23
· Continued delivery of high quality build and customer service, with a step up in construction quality awards and sustained HBF 5-star customer satisfaction rating across the entire Group
· Vistry Partnerships continues to deliver rapid growth in higher margin mixed tenure completions, up 17.6%, with adjusted operating margin increasing to 10.7% (2021: 9.2%)
· Vistry Housebuilding delivered controlled volume growth of 3.4% and excellent progress on adjusted gross margin, increasing to 23.4% (2021: 22.3%) despite challenging market conditions in Q4 2022
· Countryside performed in-line with our expectations with a minimal contribution to 2022 in the 7 weeks it was part of the Group
· The Group delivered a 20.9% increase in Group adjusted profit before tax to £418.4m (2021: £346.0m)
· Reported profit before tax for FY22 of £247.5m (2021: £319.5m) after exceptional expenses of £153.9m (2021: £12.2m), including £97.0m fire safety provision and £56.9m transaction and integration related costs
· High quality land bank totalling 81,342 (2021: 42,770) owned and controlled plots (inc. JVs) as at 31 December 2022 and 65,813 (2021: 40,000) strategic land plots
· Year end net cash of £118.2m (2021: £234.5m), ahead of expectations and follows a net cash outflow of £95.2m for the acquisition of Countryside, £35.2m share buy-back and £138.9m of dividend distribution
· Group ROCE increased to 28.3% (2021: 25.5%), with Partnerships ROCE of 77.6% (2021: >100%) and Housebuilding ROCE increasing to 28.2% (2021: 21.3%)
Current trading and outlook
Our Partnerships business is seeing a good level of demand from Housing Associations and Local Authorities, with the PRS market also improving. In the year to date, Partnerships has secured a number of new development opportunities which at least meet our targets of 40%+ ROCE and 50% pre-sold revenues and has a good pipeline. The resilience of our Partnerships business is reflected in its strong forward order book totalling £2,840m (25 Feb 2022: £1,338m), with 68% of mixed tenure FY23 units and all of partner delivery revenues secured, providing us with the confidence it will deliver revenue growth in FY23, on pro forma FY22.
For the Group overall, we have seen an improving trend on private sales in the first 11 weeks of the year, with the Group’s average private sales rate per site per week for the year to date at 0.54, increasing to 0.62 in the last four weeks. We have seen increased consumer confidence from Q4 2022, particularly as mortgage rates have trended downwards and availability has improved.
Housebuilding is focused on delivering operational excellence in this more competitive marketplace, with top quality customer service and the highest build standard critical to success. The business has a very experienced management team, and with its focus on and investment in high quality site teams, is well positioned. Housebuilding’s forward order book totals £1,339m (25 Feb 2022: £1,324m) with 55% of FY23 units secured.
Net pricing has held relatively firm in the first 11 weeks supported by an increase in the use of incentives. The Group sees opportunity for cost reduction in the year, with some success achieved in the year to date. The expected year on year reduction in private sales rates is reflected in our current build rates, with a key focus on working capital management.
The integration of Countryside Partnerships is making excellent progress and we are now expecting to deliver c.£25m of synergies from the combination in FY23. We expect total synergies to be c.£60m, up from our previous target of £50m, with the full annual run rate achieved by the end of FY24.
Based on these assumptions, we expect the Group to deliver adjusted profit before tax for FY23 in excess of £440m1. As part of a disciplined approach to capital allocation, we will continue to ensure the Group has a healthy and resilient balance sheet and will continue to invest selectively in high quality land and development opportunities as they arise.
Forward sales
| (£m) | 20 March 2023 | 25 Feb 2022 |
| Housebuilding | ||
| – Private | 630 | 692 |
| – Private – Vistry share of JVs | 107 | 148 |
| – Affordable | 524 | 421 |
| – Affordable – Vistry share of JVs | 78 | 63 |
| Total Housebuilding | 1,339 | 1,324 |
| Partnerships | ||
| – Mixed tenure | 1,489 | 335 |
| – Mixed tenure – Vistry share of JVs | 381 | 143 |
| Total mixed tenure | 1,870 | 478 |
| Total partner delivery | 970 | 860 |
| Total Partnerships | 2,840 | 1,338 |
| Total Group | 4,179 | 2,662 |
Note: 25 February 2022 forward sales restated to include Vistry share of JVs (previously included 100% of JV forward sales)
| Dividend timetable | |
| Ex-dividend date | 20 April 2023 |
| Dividend record date | 21 April 2023 |
| Dividend payment date | 1 June 2023 |
There will be an investor and analyst presentation at 8:30am today, 22 March 2023 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://brrmedia.news/Vistry_Group_FY22 . A playback facility will be available shortly afterwards.
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 PLCTim Lawlor, Chief Financial OfficerSusie Bell, Group Investor Relations DirectorPowerscourtJustin Griffiths, Nick Dibden, Victoria Heslop | 07469 287335 020 7250 1446 |