REG - Vistry Group PLC - H1 2025 Trading Update

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RNS Number : 4474Q  Vistry Group PLC  10 July 2025

10 July 2025

H1 2025 Trading Update

Vistry Group PLC (Vistry or the Group) is providing an update on trading in
the period from 1 January 2025 to 30 June 2025 ("the period").

 

Greg Fitzgerald, Chief Executive commented:

"I am pleased to report that the Group has delivered first half profits in
line with expectations which underpin the Board's confidence in its full-year
outlook.

We have also made good progress with our target of reducing debt levels in
2025, with net debt as at 30 June of c. £295m, significantly better than
expectations.  The Group has also successfully completed its refinancing,
with facilities extended out to April 2028 and no changes to either the
lending group or the terms of the facilities.

The Government's recently announced £39 billion Affordable Homes Programme is
hugely welcome, and this unprecedented funding, together with a 10-year rent
settlement and the expected reintroduction of rent convergence measures, will
drive the delivery of the high-quality affordable homes the country so badly
needs.  Vistry's Partnerships strategy is firmly aligned with the
Government's plans and we are looking forward to playing a key role in the
delivery of this new Affordable Homes Programme and, in doing so, supporting
the Board's long-term value creation strategy.

The Group has a strong forward order book totalling £4.3bn, excluding any
benefit from the new Affordable Homes Programme funding, which will start to
have a positive impact in the second half.  Working with our partners, we
have good momentum and a strong deal pipeline which support our second half
delivery and medium-term targets."

Highlights

·    Group H1 profits in line with expectations, with adjusted operating
profit expected to be c. £125m (H1 24: £161.8m(1)), and adjusted profit
before tax c. £80m (H1 24: £120.7m(1))

·    Net debt as at 30 June 2025 is significantly better than expectations
at c. £295m and lower than last year (30 June 2024: £322.0m) despite a £92m
higher opening balance as at 31 December 2024

·    Successfully extended our £500m Revolving Credit Facility and £400m
Term Loan to April 2028, with full support from our existing eight lenders and
on unchanged terms

·    Awarded 31 NHBC Pride in the Job Quality Awards, demonstrating
continued excellence in site management and build quality

·    The Group remains on track to deliver a year-on-year increase in
profits in FY25, supported by a forward order book totalling £4.3bn and a
strong pipeline of development opportunities, with affordable homes funding
expected to underpin a step-up in volumes with our affordable housing partners
in H2 2025

 

(1)Adjusted operating profit and adjusted profit before tax for H1 2024 have
been restated by £(65.5)m to correct the prior year error that arose due to
cost forecasting issues in the South Division

 

H1 Performance

During the first half, the Group delivered c. 6,800 completions (H1 24:
7,792), with c. 73% (H1 24: 76%) Partner Funded and c. 27% (H1 24: 24%) Open
Market.  The Group's sales rate averaged 1.02(2) (H1 24: 1.21) with average
selling prices remaining firm.  The Group operated from an average of 350 (H1
24: 364) build outlets in the period which included 186 (H1 24: 210) active
sales outlets.  Group revenue in the first half is expected to be c. £1.8bn
(H1 24: £2.0bn).

As expected, Partner Funded demand from our affordable housing partners
remained at lower levels in the first half due to uncertainty ahead of the
June Spending Review and transitional funding constraints.  Our partners have
invested their funding selectively during this period and we have benefitted
from our established relationships, securing new opportunities and maintaining
momentum.  Demand from Private Rented Sector (PRS) providers remained
resilient, supported by new market entrants and increased investment activity.
 Whilst we have seen some periods of improvement in Open Market demand,
affordability challenges, particularly for first-time buyers, have persisted
with expected interest rate cuts being pushed further out.

We continue to manage build cost inflation effectively through proactive
engagement with our subcontractors and suppliers and continue to expect low
single digit build cost inflation for FY25.

The Group secured attractive land and development opportunities in the period
totalling 3,113 (2024: 8,225) plots, across 14 (2024: 32) developments.
Whilst we expect the rate of land acquisition to increase in the second half,
we are targeting a reduction in the length of our owned landbank in the medium
term in line with our capital light Partnerships strategy.

The divisional structure put in place at the start of the year, led by a
highly experienced Partnerships management team with a flatter reporting
structure, is operating well.  We have continued to make good progress with
embedding standardised processes and systems across the business, supported by
increased investment in controls and assurance activities.

(2)Sales rate includes Partner Funded sales (excluding S106 units and 100%
Partner funded developments) and open market sales as a proportion of the
number of sales outlets across the Group on an average weekly basis

 

Affordable Homes Programme

In the June 2025 Spending Review, the Government announced an unprecedented
£39 billion new Affordable Homes Programme over a 10-year period.  This
transformative, long-term programme compares to the previous £11.5 billion
programme in place from 2021 to 2026 and provides a significant step-up in
funding and long-term commitment to the affordable housing sector.  We expect
the details of the new 2026 Affordable Homes Programme to become available
during the autumn, with allocations of funding under the new programme made in
H1 2026.

The £2 billion of 'top-up' funding announced in March forms part of this £39
billion and is being distributed in H2 2025 under the existing Affordable
Homes Programme to expedite allocation and build, with starts on site required
by March 2027 and completions required by March 2029.

In addition, the Government also announced a 10-year social rent settlement
(CPI +1% from 2026) and a consultation on social rent convergence.  The
greater certainty on rental income that this gives to affordable housing
providers enables greater access to funding for investment in new affordable
homes and will be a key driver of increased demand from H2 2025.

We have worked closely with our partners, identifying a strong pipeline of
development opportunities, and expect the funding and other important
initiatives to support a significant step up in new contracts with our
affordable housing partners in H2 2025, with strong momentum going into 2026.

Vistry uniquely positioned to deliver

As the country's leading Partnerships business and largest housebuilder,
Vistry is uniquely aligned with the Government's housing ambitions, and we
expect to play a major role in the delivery of the new Affordable Housing
Programme.  The 10-year funding commitment aligns with Vistry's long term
business model which is focused on strategic partnerships, regeneration and
urban renewal schemes, strategic land opportunities, and driving
sustainability and efficiency through build manufacturing innovation.

As a strategic partner of Homes England, and with a strong track record of
delivery, Vistry's direct allocation of grant funding under the Affordable
Homes Programme will enhance our delivery capability and flexibility.  In
London, we benefit from long-standing partnerships with the Greater London
Authority, local authorities and housing associations, which support our
delivery of important residential-led regeneration across the capital.

Balance sheet

Cash generation in the period improved with the Group's net debt as at 30 June
at c. £295m (30 June 2024: £322.0m), c. £27m lower than the prior year
level, despite a £92m higher opening net debt position as at 31 December
2024.

With our renewed emphasis on cash management, we have seen a trend of a
steadily improving daily net debt position versus the prior year.  Although
the average daily net debt in the first half of the year of £695m was higher
than prior year (H1 24: £659m) due to the higher opening position, the
average daily net debt in Q2 25 was lower than in Q2 24.  The Group's share
buyback programme continues, and to date we have completed £57m of the £130m
current programme.

The Group completed the refinancing of its £500m Revolving Credit Facility
and £400m Term Loan on 1 July 2025.  Both the Revolving Credit Facility and
the Term Loan, which were due to expire in December 2026 and September 2026
respectively, have been extended out to 30 April 2028.  The facilities are
provided through a pool of eight lenders and have been extended on existing
terms, with all eight retaining existing hold levels.  This refinancing,
which was a key objective for 2025, provides the Group with a strong financial
underpin and reflects the excellent relationships we have with our lending
group.

Competition and Market Authority

The Group has engaged proactively with the UK Competition and Market Authority
("CMA") throughout its housebuilding investigation.  In a separate statement
released yesterday, the Group confirmed its voluntary commitments offered in
response to the potential concerns raised by the CMA; and that Vistry will
contribute £12.8m of the overall £100m contribution to support the
construction of affordable homes across the United Kingdom offered by Vistry
and the six other UK housebuilders.

Outlook

The Group's forward order book totals £4.3bn (30 June 2024: £5.1bn), with
the Group 79% forward sold for FY25.  Of this, 83% of the Partner Funded
sales are secured, with more than 100% of the balance of Partner Funded units
for the full year covered in our deal pipeline.  We are hopeful that further
rate cuts will provide additional stimulus to Open Market sales in the second
half.

A first half performance in line with expectations, together with the recent
landmark Government support for affordable housing, reinforces the Board's
conviction in Vistry's Partnerships model and long-term prospects.  In the
near term, the Group remains focused on executing the strategic and cash
generation initiatives laid out in March and is on track to deliver a
year-on-year increase in profits in FY25.

 

For further information please contact:

 Vistry Group PLC

 Tim Lawlor, Chief Financial Officer             020 3048 3393

 Susie Bell, Group Investor Relations Director

 FTI Consulting

 Richard Mountain / Susanne Yule                 020 3727 1340

 

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