Vistry Grp Share News (VTY)

(Sharecast News) - Vistry Group reported a 40% improvement in its first-half revenue on Tuesday, to £660.9m, but said its adjusted operating profit was 72% lower year-on-year at £21.2m, as Covid-19 restrictions had an impact on both sales and construction.
The FTSE 250 housebuilder - formerly Bovis Homes - said that its partnerships division led an early return to sites, however, with production capacity across the group returning to "near normal" levels from 1 July.

Net debt stood at £357.3m at period end on 30 June, narrowing from the £476m it reported in May, which was ahead of the board's expectations and put down to "resilience" in the revenue model of Vistry Partnerships.

For the first six months of the year, the group swung to a loss per share of 5.4p, from earnings of 41.9p a year earlier.

Looking at its current trading, the firm said it had made a "strong start" to the second half supported by positive market trends.

Its sales rate was 20% ahead of the prior year since 1 July, at 0.73 sales per active site per week, including Vistry Partnerships, while pricing was described as remaining "firm".

The company said it was in a record forward sales position, with group forward sales totalling £2.7bn - up from £2.6bn year-on-year - including housebuilding forward sales, which were up 17% to £1.48bn.

It said it was experiencing "minimal" cost inflation, with the group set to realise cost savings in the second half and into 2021 from the flow-through of procurement synergy benefits following the acquisition and integration of Linden Homes and Vistry Partnerships.

A total of £20m of synergies were expected in 2020, with the full run rate of £44m to be achieved by the end of 2021.

Vistry said its full-year profit before tax for 2020 was expected to be in the range of £130m to £140m.

Assuming stable pricing and current sales rates and productivity levels, the group said it had the ability to deliver at least £310m of profit before tax in 2021.

The board said the balance sheet was strong, supported by "significant" and "well-spread" funding facilities.

Its priority for capital allocation remained deleveraging, targeting gearing of 35% including land creditors for December 2021.

The directors said they were aiming to resume dividends in 2021, with a progressive dividend policy thereafter.

"We moved quickly to integrate Linden Homes and Vistry Partnerships at the start of the year," said chief executive officer Greg Fitzgerald.

"It has been a successful process bringing together the best from each business, with the benefits from the combination expected to be ahead of our initial target.

"We have achieved this whilst maintaining our focus on delivering excellent service to our customers."

Fitzgerald said the first half performance of housebuilding was "significantly impacted" by the Covid-19 lockdown across the UK, and resultant site closures.

"Vistry Partnerships demonstrated its market resilience and robust revenue model and led the group to an early successful return to site, with production levels across the group now back at near normal levels."

He added that the company had seen positive sales trends since early May, with consumer interest higher than at any time in recent years.

"Our sales rate in the second half to date is running 20% ahead of last year at 0.73, and pricing remains robust.

"The group is well positioned to capitalise on the opportunities available in the second half and into 2021 when we expect to deliver a step-up in completions and profitability, a reduction in gearing and a return to dividend payments."

At 0845 BST, shares in Vistry Group were down 1.1% at 628.5p.