Vistry expects strong rebound after £12m first-half loss

Aaron Morby 2 years ago
Share

A strong performance by Vistry’s Partnerships business helped to buoy up the house building group’s revenue during lockdown bringing debt in below expectations.

Fitzgerald anticipates a strong second half of the year
Fitzgerald anticipates a strong second half of the year

Vistry Group reported a £12m loss in the first-half of 2020 from revenue up 28% to £661m, supported by the addition of Galliford Try’s housing operation acquired at the start of the year.

Chief executive Greg Fitzgerald said Vistry had incurred £10.2m in extra site costs due to Covid-19 and received £6.9m in Government support, which would now be repaid this year.

He said: “House building’s first-half performance was significantly impacted by the lockdown 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.”

Group net debt improved to £357m from £476m in May, much lower than management expected at the start of the Covid-19 pandemic.

Fitzgerald said this reflected the earlier return to site within Partnerships, including their contracting business, and improved completion levels, putting the group in a financially strong position.

Vistry trading divisons
Op. profit change Revenue change
House building £8.5m -89% £349m -26%
Partnerships £12m n/a £311m n/a

He said all the signs pointed to a strong recovery in housing demand post-national lockdown.

“We have 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.”

Assuming stable pricing and current sales rates and productivity levels being maintained, Vistry expects to deliver a significant step up in house building completions for 2021, with all land secured for forecast 2021 house building units.

The Partnerships business is focussed on growing high-margin mixed tenure revenues, with a target of an operating margin of at least 10% in 2022.

This arm of the business is targeted to hit £1bn revenue in 2022, driven by a rapid increase in higher margin mixed tenure revenues to 50% of total Partnerships revenues.

The operating margin for mixed tenure development ranges from 11% to 18%.

Fitzgerald said combined, Vistry had the ability to deliver at least £310m of profit before tax in 2021.

He said: “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.”

Latest news

Materials giant CRH looks to sell contractor Farrans

More than 550 staff set to get new owner
1 day ago

West Yorkshire transport projects delayed to save £270m

Over 30 transport schemes to be placed on hold due to cost inflation budget pressure
11 hours ago

Decision on A1 Costain dualling job delayed for third time

Development consent decision for £260m Northumberland scheme put back a further 9 months
12 hours ago

Colas wins £140m Cheshire highways upkeep deal

Incumbent contractor Ringway will handover to Colas in April
12 hours ago

Skanska to lend staff cash

Contractor links-up with finance firm to offer affordable loans to employees
12 hours ago

Ilke Homes pulls off £100m record-breaking fund raise

Largest-ever capital raise by a UK modular house builder to fund expansion
1 day ago

Construction buyers fear for year ahead

"Construction companies now have a tightrope to walk in terms of being ready for recovery and cautious around investment"
1 day ago

Gove calls for competition probe into house building

Levelling Up and Regeneration Bill 'strengthened' with new measures
1 day ago

Schools get £500m for energy upgrades this winter

Extra cash found for better heating controls, insulation and energy efficient lighting
1 day ago

1,000-home North London scheme approved

Developer Hill will start work in the Spring on South Tottenham site
1 day ago

Bid race for £500m Suffolk construction framework

Construction and building services firms called up for East of England four year deal
1 day ago

Mace employs robot dog to avoid slip and trips in tunnel

Robot working in dark and hazardous conditions under Heathrow Airport
1 day ago

Administrator details confirmed at Southampton M&E firm

Begbies Traynor now in charge at Working Environments as suppliers face large losses
2 days ago

Former Galliard chief takes helm at Inland Homes

New CEO Don O'Sullivan sets out to return south east house builder to profitability
1 day ago

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
2 days ago

Industry veteran to head Henry Bros northern arm

Peter Commins, former Kier and Balfour Beatty northern chief, to spearhead growth drive
1 day ago

Housing association shuts in-house modular factories

Swan closes loss-making steel frame and cross-laminate timber factories
2 days ago

350-homes approved around iconic London Tube station

Housing blocks to be built around Grade II-listed Hounslow West Tube station
2 days ago

Domis set for £195m Boddingtons Brewery scheme

Developer Salboy buys Manchester site to kickstart long-awaited 556 homes project
2 days ago

John Lewis £500m funding deal to build 1,000 rental homes

Deal to advance BTR flats at store sites in Bromley, West Ealing and Reading
3 days ago

Esh launches new housing retrofit division

Esh Retrofit Solutions will target market to improve the energy performance of social rented homes
2 days ago

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
5 days ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
5 days ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
5 days ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
5 days ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
6 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
6 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
6 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
6 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
6 days ago

Contractor services