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

Aaron Morby 1 year ago

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

Massive Stewart Milne development goes into administration

Countesswells new town now in hands of administrators
11 hours ago

Ex-Laing O’Rourke boss to head rejigged BAM UK business

BAM names new chief for combined UK and Ireland businesses in growth push
17 hours ago

Robertson submits £150m Cardiff Arena plan

Arena work to start next Autumn with wider Atlantic Wharf regen scheme to follow
1 day ago

HS2 pioneers first ‘box-slide’ bridge over motorway

BBV will start initial site preparation over the Christmas holiday period
1 day ago

Rocks smash site huts as quarry blast goes wrong

Breedon Trading Ltd fined £300,000 after court hears worker was forced to run for cover
17 hours ago

Sellafield names £250m HVAC key delivery partners

Balfour Beatty Kilpatrick and EJ Parker Technical Services take first integrated team deal
2 days ago

Cut-price home builds quadruple maintenance cost

Mount Anvil study attempts to quantify link between Capex and Opex costs
18 hours ago

Ray O’Rourke to step down from Group Chief Executive role

New CEO Seamus French to join from mining giant Anglo American
2 days ago

TClarke on track for £500m revenue target

Orders surge to £525m setting fresh record for M&E specialist
2 days ago

Northern contractors still reeling from rail cancellations

Firms fear "economic black hole which will have a huge impact on regional SME contractors"
2 days ago

Go-ahead for McAlpine’s £43m Edinburgh concert hall job

Work to start next year on first concert venue in Edinburgh for over 100 years
2 days ago

Miller Homes fined £200,000 for polluting dyke

Court hears details of second incident at same Huddersfield site
2 days ago

Plans in for £60m Stoke goods yard quarter

Bowmer & Kirkland are working on the scheme under a pre-construction agreement
2 days ago

Quinn Infrastructure goes into administration

Rail M&E specialist contractor stops work on sites
3 days ago

Farrans to build £30m rotating Glasgow footbridge

Steel price rises blamed for 40% jump in rotating bridge cost
3 days ago

Brickability buys renewable energy specialist

Materials distributor buys new housing green energy specialist
3 days ago

RSK swoops for Yorkshire surveying specialist

Infrastructure surveying specialist Centara employs 60 staff
3 days ago

Former Amey director takes reins at renamed SSE Contracting

Zak Houlahan to lead Enerveo from December
3 days ago

Bouygues wins £30m Swansea zero carbon office

Firm to break ground in coming weeks on The Kingsway project
3 days ago

Sisk names new UK framework director

Rebecca Hartshorn to take on Scape framework development
3 days ago

Expanded starts work on giant HS2 station box

Construction will see 690,000 cubic metres of clay removed
4 days ago

Builders slam plans for electric car chargers in all new homes

Construction firms will foot the bill while electricity companies make the profits
4 days ago

Kier set for £32m Bournemouth council flats job

Work to start next year on four blocks of flats rising to 10 storeys
4 days ago

Severfield rises with record orders after strong first half

Orders soar to nearly £400m after Everton stadium award, shed and HS2 wins
4 days ago

Plans in for Manchester Red Bank enabling works

Council plans to spend £51m preparing way for up to 5,500 homes on old railway sidings
4 days ago

Triton bags biggest shed job yet

Firm eyes big shed delivery market after Stakehill 185 wins
4 days ago

Driver crushed between vehicles at builder’s merchant

Company fined £180,000 after court hears banksman had left yard area
4 days ago

£610m finance deal for Moda build-to-rent housing

£1.7bn Moda project pipeline targets Birmingham, Brighton & Hove and London
5 days ago

GMI names head for new North East business

GMI completes build-up of new north east team for regional expansion drive
4 days ago

National Highways halts first Smart motorway job

Balfour Beatty's £140m M3 smart motorway job put on hold
5 days ago

Contractor services