Vistry Group (VTY) H2 2025 earnings summary

Executive summary

• Profit before tax for 2025 was in line with expectations, supported by a strong second half despite challenging market conditions and no external market support.

• The group is now leaner and more efficient following a major reorganization, with a stable platform and strong positioning for future growth, focusing on capital allocation and inventory reduction.

• The business is highly aligned with government affordable housing initiatives, delivering 1 in 7 affordable homes in the UK and maintaining long-term relationships with major housing associations and Homes England.

• CEO Greg Fitzgerald announced his planned retirement, with succession processes underway and business continuity assured.

Financial highlights

• Revenue declined 4% year-over-year to £4,155.3m, with completions down 9%, but average selling price (ASP) increased slightly due to mix.

• Adjusted EPS grew 6% year-over-year to 59.3p, outpacing profit before tax growth, reflecting benefits from the share buyback program.

• Net debt reduced to £144.2 million at year-end, though average daily net debt increased to £734 million; total net cash inflow of £36.5m versus £91.9m outflow in FY24.

• Gross margin improved by 100 basis points to 13.9%, driven by new higher-margin sites and improved site mix.

• Net finance costs fell 9.7% year-over-year, with average cost of debt reduced from 7% to 6.3%.

Outlook and guidance

• On track for volume and revenue growth in 2026, with a forward order book of £4.5bn and 67% of 2026 units secured.

• Expecting increased profit in 2026 despite lower margins due to sales incentives; confident in generating over £100 million in cash by year-end.

• Margin expected to tighten in the first half due to aggressive sales push, but underlying margin to improve as efficiencies and economies of scale are realized.

• Cautious outlook for 2026 due to geopolitical uncertainty and potential cost inflation from Middle East events.

• Prioritizing cash generation, inventory reduction, and scaling Partner Funded activity.