Vistry Group Plc · LSE:VTY
Vistry — Investor Presentation (November 2020)
50 slides from Vistry's investor presentation, Nov 24, 2020
Slide 1: Partnerships Briefing
The Tors, Tavistock Partnerships Briefing BU to provide best image 24th November 2020 relevant to BU
Slide 2: Agenda
Agenda • The Partnerships Asset • Market Opportunity • Future Strategy • Partnerships in Action • Questions 2
Slide 3: Your hosts today
Your hosts today Stephen Teagle Mark Farnham Stuart Munro Stuart Brodie James Warrington Marc Thompson – Earl Sibley Chief Executive Finance Director Divisional MD Divisional MD Divisional MD Strategy & Projects Group Chief Financial (South) (London & South (Central & North) Director Officer 30 year
Slide 4: The Partnerships Asset
The Partnerships Asset BU to provide best image relevant to BU Blackberry Hill, Bristol
Slide 5: A 21st Century Partnerships Business
Assets A 21st Century Partnerships Business A differentiated partnerships business with sector expertise • Optimum market facing model – Mixed Tenure and Partner Delivery • Provides land, development and funding solutions and retail expertise £110m • Experience and capacity across all tenure product
Slide 6: Our Business
Our Business 1100 employees 115 sites 11 businesses x2 6
Slide 7: Proven Growth
Vistry 3€ Proven Growth Partnerships Homes Revenue (£m) Operating Margin 4200+ 7508 ON 6+% ae 475,77" FE 5.0%, -- hy) 27. A < 45% _ o 2 % 2006 -- YAS 330_-- ’ 6 - GN 0 Fay A YN ° oY a 7 FY1I6 FY18 FY20* FYI6 FYI8 FY20* FY16. FYI8 FY20* *Target Performance
Slide 8: Capacity for Growth
Capacity for Growth • Delivering output growth across all regions • Leverage existing operating platform for further growth • Visibility of circa £3bn of work • Formation of Vistry unlocks growth through: ✓ Capital ✓ Shared land buying expertise ✓ Retail brands ✓ Procurement savings and buying power
Slide 9: Business differentiation – Market focus
Business differentiation – Market focus Social Rent Affordable Rent Extra Care Supported Housing Rent to Buy PRS Shared Ownership Discount Sale First Homes Help to Buy Open Market Sale 9
Slide 10: Business differentiation – Embedded ESG
Business differentiation – Embedded ESG • Strong ESG credentials - generates economic activity, supports jobs and supplies affordable housing 10 Example of social value capture – Romney House JV with Goram Homes, Bristol
Slide 11: Our Business Model
Vistry 3€ Our Business Model Partnerships Vistry 3 Partnerships A
Slide 12: Mixed Tenure Development
Mixed Tenure Development • Development model with margins reflecting balance of open market sales risk - target 50%+ presold positions • Partners share build and market risk, pursuit costs and capital investment • Open market sales focused on affordability and smaller products • Linden, Bovis and Dr
Slide 13: Partner Delivery Programmes
Partner Delivery Programmes • The solution for delivery of our partners’ programmes through land introductions, negotiated contracts and carefully managing build risk • Cash engine for the business delivering low/intermediate profit margin • Low risk build solution, improving margin performance • St
Slide 14: Applying the Model
. V, Vistry 3< Partnerships Applying the Model REPEAT BUSINESS } MIXED TENURE PARTNER Oo DEVELOPMENT DELIVERY
Slide 15: What We Build
What We Build . V, Vistry 3< Partnerships MEDIUM/HIGH RISE REPEAT RESIDENTIAL BUSINESS RESIDENTIAL ILE. EXTRA CARE VILLAGES
Slide 16: Unrivalled Scale
Unrivalled Scale Joint Venture Portfolio • Sector leading platform of Joint Ventures with Housing Association and Local Authorities of c. £6bn turnover and 20,000 homes • Delivering circa £400m profit for reinvestment by clients into their programmes £6bn • In contract with Homes England on 19 sites
Slide 17: Unrivalled Scale
Unrivalled Scale • In frameworks or regular repeat business with over 75 Housing Associations Vistry Housebuilding • Actively working with 25 local Affordable Contracts authorities £700m of new Vistry Partnerships Presold • Strong relationships with and anticipated Mixed Tenure and Partner instituti
Slide 18: Client Testimonies
H We Client Testimonies Vistry 3s Partnerships “We set out to find a partner that we “They've worked with “We found working with Vistry felt we could work with long term and us every step of the way absolutely excellent and not we found that in Vistry. What they are helping to bring forward only did
Slide 19: Market Opportunity
Market Opportunity Sherford, Plymouth
Slide 20: Market Opportunity
Market Opportunity • Strong fundamentals remain unchanged: 1. Continued undersupply of new homes across all tenures 2. Continued public investment and cross-party political support 3. Financially robust purchasing sector with long term planning horizon 4. Reliance on private sector for supply • Dema
Slide 21: Government Funding Commitment
Government Funding Commitment • Enduring state aid programme supporting UK housing economy since 1945 • Continued Government support to deliver affordable homes programme • Increased focus on shared ownership • Introduction of discounted market sale product as First Homes • Distribution is a politic
Slide 22: Robust and Active Purchasing Sector
Robust and Active Purchasing Sector • Housing Associations have strong balance sheets: • £107.1 billion debt facilities, £82.4 billion drawn = £24.7bn headroom • + £6.4 billion cash balances • And aggressive business plans for growth • £11.1bn investment in new housing supply (June 19 – June 20) • £
Slide 23: Client supply models
Client supply models Strong forward demand 23
Slide 24: Competitor Analysis
Competitor Analysis Vistry Partnerships Countryside Kier Living Lovell Keepmoat Crest Mixed Tenure Partner Delivery National Housebuilding brand 24
Slide 25: Our Strategy
The Greens, Atherstone Our Strategy
Slide 26: Project 6000
Project 6000 Four key financial metrics When combined with Housebuilding, Vistry Group is the largest private sector provider of affordable housing in the UK 26
Slide 27: Delivering Accelerated Growth
Delivering Accelerated Growth 1 3 2 4 Drive margin Grow national footprint Optimise operating Improved returns through improvement through though continued platform across business leveraging partner focus on mixed tenure and expansion into new investment land led partner delivery geographies 27 * E
Slide 28: 1. Margin Progression
1. Margin Progression Continued reshaping of business model with greater proportion of higher margin work 28
Slide 29: Controlled Increase in Open Market Sales
Controlled Increase in Open Market Sales 25 sales outlets c.32 sales outlets c.40 sales outlets 29
Slide 30: Future Mixed Tenure Land Secured
Future Mixed Tenure Land Secured Site Owned with Planning Site Owned Without Detailed Planning Sites Not Yet Acquired 30
Slide 31: Strong Visibility of Future Years
Strong Visibility of Future Years 31
Slide 32: 2. Optimisation of Business Platform
2. Optimisation of Business Platform Doing what we already do but better – an optimised Partnerships business Formation of Vistry unlocks growth through: ✓ Capital ✓ Shared land buying expertise ✓ Retail brands ✓ Procurement savings and buying power 32 32
Slide 33: 3. Geographical Growth
3. Geographical Growth Doing what we already do in more geographies – a national Partnerships business 33
Slide 34: 4. Improved Returns
4. Improved Returns Making our own and our partners' money work harder to improve our return on capital Using our partners’ capital to fund our mixed tenure growth Leverage relationships with a wide range of partners and align investment plans Provide a clear route to market 34
Slide 35: Partnerships in Action
Brunel Street Works, London Partnerships in Action BU to provide best image relevant to BU
Slide 36: Partnerships in Action – Live Examples
Partnerships in Action – Live Examples 36
Slide 37: Pembers Joint Venture
244 40% £82m Pembers Joint Venture New Homes Presold GDV Project Name: Pembers Hill Park, Eastleigh Project Partner: Joint Venture with Eastleigh Borough Council Background: Structure of Deal: Outcomes: • Strategic land controlled • Land sold into Joint Venture between Vistry • Vistry Gross Margin 2
Slide 38: Meridian Mixed Tenure
725 65% £248m Meridian Mixed Tenure New Homes Presold GDV Project Name: Meridian Phase 1, Enfield Project Client: London Borough of Enfield Background: Structure of Deal: Outcomes: • Site secured via London • Land to be developed with London Borough of Enfield • Vistry Gross Margin 16.7% Development
Slide 39: Lea Castle Joint Venture
600 40% £131m Lea Castle Joint Venture New Homes Presold GDV Project Name: Lea Castle, Kidderminster Project Partner: Joint Venture with Citizen Housing Association Start on site Summer 2020, 8 year programme Background: Structure of Deal: Outcomes: • Former hospital site for 600 • Open Market Homes
Slide 40: Partnerships in Action – Our Options
Partnerships in Action – Our Options 40
Slide 41: Summary
Summary Perranporth, Cornwall
Slide 42: Outlook
Assets Outlook A differentiated partnerships business with sector expertise • Clear strategy through a differentiated returns-based model • Partnerships uniquely well placed to capture market growth • Strong visibility of pipeline £110m • Hedged exposure through alignment with client programmes • We
Slide 43: Questions
We </)\y Vistry Partnerships Questions
Slide 44: Appendix
Vistry3* Appendix Partnerships
Slide 45: Glossary of Key Terms – Key Stakeholders
Glossary of Key Terms – Key Stakeholders • Homes England – Government Agency with mission to accelerate housing delivery in England through the following interventions; Help to Buy, Affordable Housing and Housing Infrastructure Funding, Public Land disposals and other investment programmes. • Housin
Slide 46: Glossary of Key Terms – Affordable Housing
Glossary of Key Terms – Affordable Housing • Affordable Housing – Housing for sale or rent for those whose needs are not met by the market. Often termed sub-market housing and includes the following tenures below: • Social Rent – Affordable Housing rented at subsidised levels of rents (below Afforda
Slide 47: Glossary of Key Terms – Other Housing Tenures
Glossary of Key Terms – Other Housing Tenures • Extra Care – Housing which comprises of self-contained homes with design features and support services which enable self care and independent living. • Supported Housing – Housing where support and care services are provided to people. • PRS (Private R
Slide 48: Glossary of Key Terms – Partner Delivery Terms
Glossary of Key Terms – Partner Delivery Terms • Single Stage Tenders – Competitive bidding process for build contracts with a single bidding stage where bids are submitted to a client who selects the best bid (often the lowest cost). • Two Stage Tenders – Vistry Partnerships are appointed following
Slide 49: Glossary of Key Terms – Other Terms
Glossary of Key Terms – Other Terms • NHBC 5 Star Home Builder – Ranking system for customer service scores within the housebuilding industry with 5 being the top score. • S106 Affordable Housing – Level of Affordable Housing required by planning policy on a site. • Additional Affordable Housing – I
Slide 50: Disclaimer – Important Notice
Disclaimer – Important Notice • Certain statements in this presentation are forward looking statements. • Forward looking statements involve evaluating a number of risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by those statem