Slide 1: Vistry Group FY results 2020
Vistry Group FY results 2020 VG
Slide 2: Full year results 2020
FY results 2020 VG Full year results 2020 Greg Fitzgerald Earl Sibley Graham Prothero Chief Executive Officer Chief Financial Officer Chief Operating Officer 4 March 2021
Slide 3: Agenda
Agenda • Key highlights • Group strategy • Financial review • Operational update Furrowfields, Bishops Itchington Whitehouse Park, Milton Keynes • Outlook • Q&A Silk Mill, East Hanney White Rock, Paignton
Slide 4: Key highlights 2020
FY results VG Key highlights 2020 • Strong second half performance with FY profit before tax of £144m(1), ahead of our expected range • Significant deleverage resulting in £38m year-end net cash position • Further improvement in quality and customer satisfaction - HBF 5-star customer satisfaction ra
Slide 5: Key highlights 2020
FY results VG Key highlights 2020 • Excellent progress at Vistry Partnerships - Higher margin mixed tenure volumes up 70% in H2 and 28% for FY - Adjusted operating margin increased to 6.7% in FY and 8.7% in H2 • Sustained step-up in demand with a 15% increase in H2 private sales rate to 0.62 - Ahead
Slide 6: Delivering the strategic benefits of the acquisition
FY results 2020 VG Delivering the strategic benefits of the acquisition • Two leading differentiated brands 4 Top 5 national housebuilder • Sustained step up in private sales rate • Vistry Partnerships working more closely with Housebuilding • Progress against plan in FY20 with significant increase
Slide 7: One Vistry - a stronger business
FY results VG One Vistry - a stronger business 2020 • One housebuilder, two leading housebuilding brands - Complete review of product range, brand positioning, technical specification and best practice - Dual branding delivering increased overall sales • Vistry Partnerships, strengthened unique mark
Slide 8: Well positioned to deliver in 2021
FY results VG Well positioned to deliver in 2021 2020 • Covid-safe operating environment - fully operational • Private sales rate of 0.66 in first 8 weeks of FY21, with underlying rate ahead of strong start to FY20 • Last 4 weeks private sales rate of 0.78 • No impact from changes to Help to Buy and
Slide 9: Financial review
FY results 2020 VG Financial review Earl Sibley Chief Financial Officer
Slide 10: Summary of Group results
FY results VG Summary of Group results 2020 Adjusted basis unless otherwise stated (£m) FY19 FY20 Change Revenue 1,139.2 2,040.1 79% Gross profit 255.3 318.8 25% Operating profit 194.4 171.0 (12%) Operating margin 17.1% 8.4% (8.7pps) Profit before tax(1) 188.2 143.9 (24%) Reported profit before tax
Slide 11: Proforma results
FY results VG Proforma results FY19 FY20 Change 2020 Housebuilding completions(1) - Private 4,775 3,668 (23)% - Affordable 2,109 984 (53)% Total Housebuilding completions 6,884 4,652 (32)% Housebuilding revenue(2) £1,821m £1,312m (28)% Partnerships completions(1) - Mixed tenure 1,158 1,479 28% - Par
Slide 12: Housebuilding financials
FY results VG Housebuilding financials 2020 Adjusted basis unless otherwise stated (£m) FY19 FY20 Change Total completions(1) 3,867 4,652 20.3% Revenue 1,139.2 1,311.8 15.2% Gross profit 255.3 231.2 (9.4%) Gross margin 22.4% 17.6% (4.8pps) Operating profit 207.1 139.4 (32.7%) Operating margin 18.2%
Slide 13: Completions
FY results VG Housebuilding metrics 2020 658 Private Completions 3,668 984 162 Affordable Private completions(1) Affordable completions(1) JV completions(1) FY19: 2,625 FY19: 1,184 FY19: 58 £343k £152k £303k Private ASP(2) Affordable ASP(2) Total ASP(2) Pricing FY19: £342k FY19: £144k FY19: £280k 8%
Slide 14: Partnerships financials
FY results VG Partnerships financials 2020 Adjusted basis unless otherwise stated (£m) FY20 Total mixed tenure completions(1) 1,479 1,479 608 Revenue 728.3 Mixed tenure Mixed tenure completions(1) JV completions(1) Operating profit 48.6 Operating margin 6.7% TNAV (30) £204k £238m Mixed tenure Mixed
Slide 15: Deleverage post acquisition
FY results VG Deleverage post acquisition 2020 1 Opening net cash (1 Jan 2020) £2,167m (£1,689m) 2 Development receipts 3 Construction expenditure & overheads 4 Land expenditure 5 Other Trading Outflows 6 Acquisition of Linden Homes & Partnerships 7 Fair value of Pricoa USPP 8 Other non-trading outf
Slide 16: Capital allocation
FY results VG Capital allocation 2020 Strong cash generation from revenue and profit growth • Targeting improved net cash position for 31 Dec 2021 Leverage • Average month-end net debt targeted at less than £200m in FY21 • Maintain 3.5 - 4.0 years Housebuilding land bank to support controlled volume
Slide 17: Land activity
FY results VG Land activity 2020 • Land market dynamics remain stable • 4,700 plots acquired across 22 developments Sandymoor - 3,195 Housebuilding plots Chesterfield Brimington - 1,505 Partnerships mixed tenure plots Stockley Edwalton • Further 3,952 plots conditionally contracted Stafford Fradley
Slide 18: Land bank
FY results VG Land bank 2020 Housebuilding Partnerships 30 June 2020 31 Dec 2020 30 June 2020 31 Dec 2020 Owned and controlled land bank plots 20,942 23,541 3,281 5,088 Joint venture plots 9,589 8,453 4,436 3,136 Total controlled land bank 30,531 31,994 7,717 8,224 Land bank years(1) 4.0 yrs 4.3yrs
Slide 19: Strategic land
FY results VG Strategic land 2020 As at 31 Dec 2020 Total sites Total plots • Well positioned with strategic land 0 - 150 plots 42 3,253 - 34,053 strategic land bank plots across the Group - Strong pipeline of high quality developments to be pulled 150 - 300 plots 46 10,362 through in the near term
Slide 20: Summary balance sheet
FY results VG Summary balance sheet 2020 (£m) 31 Dec 19 30 June 20 31 Dec 20 Goodwill - 548.4 547.5 Intangible assets 4.3 151.8 143.6 Goodwill and Intangibles 4.3 700.2 691.1 Investment in joint ventures 85.1 158.4 145.2 Amounts due from joint ventures 5.2 346.0 323.6 Stock and WIP 491.4 895.6 759.0
Slide 21: Operational update
FY results 2020 VG Operational update Graham Prothero Chief Operating Officer
Slide 22: Successful integration
FY results VG Successful integration 2020 Key milestones Housebuilding re-organisation – 13 regions, 4 office closures Rebranding of Bovis Homes, Linden Homes and Vistry Partnerships Review of all product range and market positioning Technical specification aligned across our product range Shared ce
Slide 23: Time to talk
FY results VG People 2020 • Massive push to improve employee communication channels • Emphasis on mental health support - Trained 70 mental health first aiders - ‘Time to Talk’ sessions Time to talk • Training in 2020 focused on Safety, Health Mental health matters and Environment - Digitised conten
Slide 24: Response to Covid-19
FY results VG Response to Covid-19 2020 • Safety of our employees, sub-contractors, suppliers and customers is our first priority • Progress on integration enabled a rapid and well coordinated response • Partnerships’ business model enabled quick return to sites, benefiting from high level of forwar
Slide 25: Sustainability
FY results VG Sustainability 2020 • Conducted full review of risks and opportunities, including stakeholder consultation, with recommendations accepted by the Board in January • Strategy to be launched in March • Targets established covering our People, our Operations, and our Homes and Communities
Slide 26: Enhanced operating targets
FY results VG Enhanced operating targets 2020 Aligned to our vision and strategic framework, our 2021 targets are set out below which are aligned to UN Sustainable Development Goals (UNSDGs). The SDGs, set in 2015 by the United Nations General Assembly are intended to be achieved by the year 2030, t
Slide 27: Targets embedded within our purpose
FY results VG Targets embedded within our purpose 2020 Priorities Issue Target UNSDG Use the Vistry social value toolkit to implement placemaking strategies on at least one mixed- Placemaking tenure development in all Vistry Partnerships business units in 2021. Invest equivalent of 0.1% of PBIT with
Slide 28: Housebuilding - driving performance
FY results VG Housebuilding - driving performance Construction and property 2020 Retail £ Financial £ % Volume growth • Sustained improvement in sales rates, maximising dual22% Strategy and • Step-up business branding opportunityHouses in FY21 volumes to c.6,300 with controlled growth development 6%
Slide 29: Partnerships - delivering accelerated growth
FY results VG Partnerships - delivering accelerated growth 2020 Drive margin improvement Grow national footprint Improved returns through focus on mixed Optimise operating though continued through leveraging tenure and land led platform across business expansion into new partner investment partner d
Slide 30: Strengthened sales offering
FY results VG Strengthened sales offering 2020 • Working within guidelines, sales has remained open throughout • Sustained step-up in sales rate since May 2020 • Brand refresh for Bovis Homes and Linden Homes - Site branding and uniforms 6 clicks to reserve your home • Virtual site visits with immer
Slide 31: Customer service remains our key priority
FY results VG Customer service remains our key priority 2020 • Customer centric approach across the business • Focus on delivering a seamless, transparent end to end experience • HBF 5-star customer satisfaction rating for 2020 and a great start to 2021 • HBF 9-month survey score now included in ann
Slide 32: Outlook
HY results 2020 VG Outlook Greg Fitzgerald Chief Executive
Slide 33: Market review
FY results VG Market review 2020 • Strong market trends despite Covid-19 pandemic • Sustained level of demand since May 2020 when sites reopened - Minimal impact from Nov and current lockdown - Changes to HTB and expected end to Stamp Duty exemption not affecting sales since Dec • New build providin
Slide 34: Outlook
FY results VG Outlook 2020 • Strong start to the year with positive sales trends across the business - 0.78 sales rate in last 4 weeks • 64% of Housebuilding and mixed tenure units for FY21 secured and including partner delivery, forward sales total £880m • Housebuilding to step-up completions in FY
Slide 35: Q&A
HY results 2020 VG Q&A
Slide 36: Disclaimer - important notice
FY results VG Disclaimer - important notice 2020 • 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 impl
Slide 37: Appendices
FY results 2020 VG Appendices
Slide 38: Forward sales
FY results VG Forward sales 2020 Forward sales (£m) 31 Dec 2020 1 Mar 2020 Housebuilding - Private 533 620 - Private JVs (100%) 176 215 - Affordable 389 434 - Affordable JVs (100%) 119 135 Total Housebuilding 1,217 1,404 Partnerships - Mixed tenure 145 151 - JVs (100%) 200 192 Total mixed tenure 345
Slide 39: Proforma financials
FY results VG Proforma financials 2020 H119 H219 FY19 H120 H220 FY20 Housebuilding completions Private - wholly owned 1,854 2,234 4,088 830 2,180 3,010 Private - JVs 345 342 687 145 513 658 Affordable - wholly owned 1,016 834 1,850 236 586 822 Affordable - JVs 156 103 259 24 138 162 Total Housebuild
Slide 40: Liquidity
FY results VG Liquidity Banking facilities 2020 Type Amount Expiry • Total of £770m banking facilities RCF £410m Jan 2025 - Well spread maturities out to 2027 RCF £40m Jan 2023 • Group eligible to increase liquidity RCF £20m Mar 2022 through the Covid Corporate Finance Term loans £150m Jan 2023 Faci
Slide 41: Net finance costs
FY results VG Net finance costs 2020 (£m) FY19 FY20 Net bank interest and commitment fees (1.9) (18.5) Issue cost amortisation (0.9) (1.8) Imputed interest on land (3.4) (4.6) Pension financing 0.1 0.3 IFRS 16 interest on leases (0.6) (1.2) Interest receivable on JV loans 0.6 17.9 Total (6.1) (7.9)
Slide 42: Work in progress and other assets
FY results VG Work in progress and other assets 2020 (£m) 31 Dec 2019 30 June 2020 31 Dec 2020 Stock (including show homes) 30.5 57.6 44.2 Housing WIP infrastructure WIP 445.0 811.2 689.1 Part exchange 15.9 26.8 25.6 Total work in progress 491.4 895.6 759.0 Debtors - Help to Buy 2.1 5.1 7.3 - HA 42.
Slide 43: Other liabilities
FY results VG Other liabilities 2020 (£m) 31 Dec 2019 30 June 2020 31 Dec 2020 Creditors 196.6 421.4 517.5 HA deferred income 7.7 14.1 28.5 Contract liabilities - 67.5 67.9 Deferred income 8.5 87.8 87.5 Other tax and social security 1.8 26.9 9.2 Lease liabilities 23.0 39.7 42.2 Corporation tax liabi
Slide 44: Acquisition accounting
FY results VG Acquisition accounting 2020 Purchase consideration £m Cash consideration 378.1 Shares consideration (based on share price at time of agreement) 675.0 Shares consideration (driven by movement in share price through to completion date) 180.4 Total purchase consideration 1,233.5 Reflectin
Slide 45: Synergies
FY results VG Synergies 2020 Initial expectation Target Progress Geographic £15m £15m • 4 Housebuilding office closures • Expecting total synergy overlap • Headcount reductions benefits of £44m, £9m ahead of initial target • Establishment costs - £25m in 2020 and full run Direct £15m £18m • c.125 pr