# Vistry Group achieve strong second half performance with a sustained step up in demand - Link: https://www.directorstalkinterviews.com/vistry-group-achieve-strong-second-half-performance-with-a-sustained-step-up-in-demand/412965638 - Published: 2021-03-04T07:54:49+00:00 - Author: Amilia Stone **Vistry Group PLC **(LON:VTY) has issued its full year results for the 12-month period ended 31 December 2020. **Full year highlights** ·   Strong second half performance with adjusted full year profit before tax^((1)) of £143.9m ahead of our expected range ·   On a reported basis after exceptional items and amortisation the Group made a profit before tax of £98.7m (2019: £174.8m) ·    Significant deleverage resulting in a year-end net cash^((2)) position of £ 38m down from net debt of £357m as at 30 June 2020, having started the year with net cash of £362m prior to the acquisition ·    Sustained step up in demand with H2 2020 weekly private sales rate per outlet up 15% to 0.62 (H2 2019: 0.54) ·    Further improvement in quality and customer satisfaction and expect to be awarded the maximum 5-star HBF customer satisfaction rating for 2020 and started 2021 well ·   Completed full review and stakeholder consultation on strategy for [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news), defining a range of targets and commitment to set clear roadmap in 2021 for Group to achieve net zero carbon ·    Excellent progress at Vistry Partnerships with higher margin mixed tenure volumes up 70% in the second half on the prior year equivalent period, and an increase in adjusted operating margin in the year to 6.7% ·   Housebuilding delivered 4,652 (2019 proforma^((3)): 6,884) completions at an average selling price of £303k, with the H1 performance significantly impacted by Covid-19 ·    Firm pricing with 0.5% to 1.0% price increase and resilient supply chain with low-cost inflation ·   Active in the land market maintaining controlled land bank size at 40,218 plots whilst reducing land creditors since acquisition by £79m to £323.2m ·    Resumption of dividends with 20 pence per share final dividend proposed in respect of 2020 **Current trading and outlook** ·    Strong start to the year with private sales per active site per week of 0.66 in first 8 weeks (2020: 0.64) and the underlying sales rate ahead of the positive start to 2020 ·    Last 4 weeks particularly strong with private sales rate of 0.78 ·    Pricing remains firm and good supply of material and labour ·    Selling well for completions post 31 March 2021, with little impact from changes to HTB and previously expected end to stamp duty holiday ·   Strong forward sales position with 64% of total Housebuilding and Partnerships mixed tenure forecast units for 2021 already secured, totalling £1,747m ·    Partner delivery forward order book totalling £880m ·    Forecast increase in land and WIP investment in 2021 of c. £100m supporting Partnerships’ growth plans ·    On track to deliver full synergy run rate of £44m by end of 2021, 26% ahead of initial target and at a lower than expected cost ·    Assuming stable market conditions, the Group is positioned to more than double adjusted profit before tax^((1)) in 2021 to at least £310m with EPS in 2021 higher than 2019 ·    Group is targeting an improved net cash position for 31 December 2021 and an average month-end net debt for 2021 of less than £200m (2020: £350m) ·    Resumption of dividends with progressive dividend policy and a move towards 1.75x dividend cover over time > **Greg Fitzgerald, Chief Executive, commented:** > “The Group has achieved an enormous amount in 2020, and despite the challenges > I am in no doubt we start 2021 as a stronger business. > We had a strong second half performance with a sustained step up in demand, firm > pricing, and a robust supply chain.  Vistry Partnerships made excellent progress > against its growth targets of £1bn revenue and a 10% plus operating margin by > 2022, delivering a 70% increase in H2 2020 mixed tenure completions and adjusted > operating margin progression in the year to 6.7%. > Our firm focus on cash management resulted in a year end net cash position of > £38m.  As a result of these actions and our positive performance, the Board is > pleased to resume dividend payments with a proposed final dividend of 20 pence > in respect of 2020. > 2021 has started well with strong demand across all areas.  We have seen no impact > from the national lockdown or changes to the Help to Buy scheme and the expected > end to the Stamp Duty exemption. We have a strong forward sales position, with > 64% of forecast units for 2021 already secured.  Assuming stable market conditions, > the Group is confident it will more than double profits in the year, with a profit > before tax of at least £310m. > On behalf of myself and the rest of the Board, I would like to thank all our employees, > subcontractors and suppliers for their incredible hard work and commitment during > what has been a uniquely challenging period.” | **Key financials^((4)(5))**^((6)) | 2020 | 2019 | Change | | Total completions^((7)) | 8,954 | 3,867 | +>100% | | Adjusted revenue | £2,040.1m | £1,139.2m | +79.1% | | Adjusted operating profit | £171.0m | £194.4m | -12.0% | | Adjusted profit before tax | £143.9m | £188.2m | -23.5% | | Adjusted basic EPS | 52.6p | 104.3p | -49.6% | |   |   |   |   | | Reported results^((5)(6)) | 2020 | 2019 | Change | | Group revenue | £1,811.7m | £1,130.8m | +60.2% | | Operating profit | £91.7m | £179.7m | -49.0% | | Profit before tax | £98.7m | £174.8m | -43.5% | | Earnings per share | 34.8p | 94.6p | -63.2% | | Net cash^((2)) | £38m | £362m | -89.5% | | **Forward sales (£m)** | **1 March 2021** | | Housebuilding |   | | –      Private | 620 | | –      Private JVs (100%) | 215 | | –      Affordable | 434 | | –      Affordable JVs (100%) | 135 | | **Total Housebuilding** | **1,404** | |   |   | | Partnerships |   | | –      Mixed tenure | 151 | | –      Mixed tenure JVs (100%) | 192 | | **Total mixed tenure** | **343** | |   |   | | **Total development** | **1,747** | | **Total partner delivery** | **880** | | **Total Group** | **2,627** | There will be a virtual presentation for analysts and investors available on our corporate website from 7:00am this morning www.vistrygroup.co.uk or at https://webcasting.brrmedia.co.uk/broadcast/602d4fba1fc46330548fa366 Greg Fitzgerald, Graham Prothero and Earl Sibley will host a live Q&A session for analysts at 8:30am.  To watch the session please use the webcast link available on our corporate website at https://www.vistrygroup.co.uk/investors/reports-and- presentations/2020 or at https://webcasting.brrmedia.co.uk/broadcast/603fba571e24d464e23e659c A playback facility will be available shortly after the Q&A session has finished at [www.vistrygroup.co.uk](http://www.vistrygroup.co.uk/) Share on: