Vistry Group (VTY) H2 2024 earnings summary

Executive summary

• Total completions rose 7% to 17,225 units, maintaining the largest housebuilder status by volume, driven by an 18% increase in Partner Funded homes, while Open Market completions fell 15%.

• Adjusted revenues grew 7% to £4.3bn; average selling prices held firm, supported by incentives.

• Rigorous audit and review processes addressed legacy issues, especially in the South Division, with new controls and leadership changes.

• Transition to a partnerships-focused strategy continues, with a leaner leadership structure and enhanced controls; 16,508 new plots secured and over 70 quality awards earned.

• South Division cost forecasting issues led to a £165m profit impact, with £91.5m recognized in FY24.

Financial highlights

• Adjusted profit before tax was £263.5m, down 35% year-on-year, but above previous guidance.

• Operating margin declined to 8.3% from 11.8%, mainly due to South Division issues and the shift to partnerships.

• Net debt ended at £180.7m, with average daily debt at £698m, up from £586m in 2023.

• ROI dropped to 14.6%, reflecting a 25% fall in operating profits and higher capital employed.

• Overhead costs fell by £44.9m due to absence of bonuses and activity cuts; expected to rise in 2025.

Outlook and guidance

• Forward order book stands at £4.4bn, covering 65% of 2025 forecast units.

• Partner Funded volumes expected to match 2024, with a second-half weighting due to new government funding; Open Market volumes to remain stable.

• Low single-digit build cost inflation anticipated in 2025; profit and margin improvements expected in H2.

• Committed to Partnerships strategy and leveraging government support for affordable housing.

• Medium-term targets: 5-8% revenue growth, 65/35 tenure mix, <5% overhead/revenue, 40% ROCE, 12% operating margin.