Slide 1: Vistry Group
Vistry Group
Slide 2: Full year results 2019
Full year results 2019 Greg Fitzgerald Earl Sibley Graham Prothero Chief Executive Officer Chief Financial Officer Chief Operating Officer 27 February 2020
Slide 3: Agenda
Agenda ● Full year highlights ● Financial review ● Vistry Group - Strategy - Operational priorities ● Outlook ● Q&A
Slide 4: Bovis Homes full year highlights
Bovis Homes full year highlights ● Another year of record profits with profit before tax increasing by 12% to £188.2m ● Operating margin progression to 17.0% despite backdrop of market uncertainty ● Sustained step up in average sales rate to 0.58 per outlet per week, up from 0.50 ● Controlled and di
Slide 5: Vistry Group - a leading UK housebuilder
Vistry Group - a leading UK housebuilder ● Transformational acquisition of Linden Homes and renamed Vistry Partnerships ● Firmly positions Group as a top five UK housebuilder ● Market leading position in attractive, high growth partnerships sector ● Focus for 2020 is on successful integration and co
Slide 6: Financial review
Financial review Earl Sibley Chief Financial Officer
Slide 7: Income statement
Income statement (£m) FY18 FY19 Change Revenue 1,061.4 1,130.8 7% Adjusted gross profit(1) 230.9 253.4 10% Administrative expenses (56.7) (60.8) 7% Operating profit before exceptional items 174.2 192.6 11% Finance cost before exceptional items (6.1) (6.1) 0% Share of profit of equity accounted entri
Slide 8: Development revenue analysis
Development revenue analysis FY18 FY19 Change Volume ● JVs in FY19 are gross completions Private 2,567 2,625 2% at Stanton Cross and Sherford Affordable 1,192 1,184 (1%) ● Proportion of affordable 31%, JVs - 58 - following natural construction routes Total inc. JVs 3,759 3,867 3% ● 23% of total comp
Slide 9: Analysis of profit
Analysis of profit FY18 FY19 Development Land Total Development Land Total £m unless otherwise stated sales sales Revenue 1,047.3 14.1 1,061.4 1,124.0 6.8 1,130.8 Adjusted gross profit(1) 229.7 1.2 230.9 253.4 0.1 253.4 Administrative expenses (56.7) (60.8) Operating profit pre exceptional items 174
Slide 10: Sales prices and construction costs
Sales prices and construction costs FY18 FY19 Change Sales price per home (£000’s) 273.2 280.2 3% Sales price per sq ft (£’s) 261.5 264.4 1% Private sales price (£000’s) 337.4 341.7 1% Private sales price per sq ft (£’s) 287.9 290.5 1% Construction cost per home (£000’s)(1) 135.2 134.8 0% Constructi
Slide 11: Cash generation
Cash generation (£m) FY18 FY19 ● Cash expenditure on land Development receipts 1,054.8 1,094.4 relates to the settlement of Construction expenditure (708.5) (753.1) creditors in the 12 months Overheads (55.1) (59.9) of £105.4m (2018: £126.9m) and new land investment of Operating cash flow 291.2 281.
Slide 12: Land activity in the year
Land activity in the year ● Continue to see good opportunities in the land market ● 4,531 plots acquired across 18 developments Shrewsbury - Only 7 units with an ASP >£600k Wombourne ● High quality conversion from valuable strategic Kidderminster Beaconside Warwick Thurston Cambourne land bank total
Slide 13: Net assets
Net assets (£m) 31 Dec 2018 30 June 2019 31 Dec 2019 ● Land creditors at 36% of gross land Land 858.7 769.8 716.3 ● WIP includes investment in a Land creditors (293.3) (249.4) (260.7) number of our large strategically Land net of creditors 565.4 520.4 455.6 sourced developments, including Wokingham,
Slide 14: Vistry Group strategy
Vistry Group strategy Greg Fitzgerald Chief Executive
Slide 15: A uniquely positioned top 5 UK house builder
A uniquely positioned top 5 UK house builder Housebuilding Partnerships • High quality housing provider • Leading provider of partnership housing • Two leading housing brands • Excellent reputation and firmly established relationships • National scale and coverage • National scale and coverage • Val
Slide 16: Vistry Group's strategic priorities
Vistry Group’s strategic priorities People satisfaction Customer satisfaction • Committed, motivated and engaged workforce • Increasing the supply of new homes in England • Culture of ‘doing the right thing’ across all housing tenures • Hands-on leadership • Delivering high quality homes and custome
Slide 17: Highly experienced operational management team
Highly experienced operational management team Housebuilding Partnerships Stephen Teagle Darrell White Andrew Hammond CEO Partnerships Divisional Chairman Divisional Chairman North division South division Stuart Brodie Stuart Munro James Warrington Regional MD Regional MD Regional MD London & South
Slide 18: Housebuilding - strategic priorities
Housebuilding - strategic priorities ● Maximise output through controlled volume growth - 13 business units - c. 550 - 625 units per business unit p.a. - Capacity to deliver more than 8,000 housebuilding units p.a. ● Maximise benefits from dual branding - Leverage opportunities from two housing rang
Slide 19: Vistry Partnerships - strategic priorities
2000 400 2,100 431 Vistry Partnerships - strategic priorities 1000 200 0 0 FY19 Potential FY19 ● Accelerate revenue growth - potential to deliver 6,000 units p.a Revenue (£m) Operating margin Units - Increase development revenues 5000 to 50% of 1000 1,000+ 10 total Partnerships’ revenues 5,000+ 10%+
Slide 20: High quality land supply
High quality land supply ● Total proforma owned plots as at 31 Dec 2019 of 40,135 Bovis Linden Vistry ● Continuing to target 3.5 to 4.0 year owned As at 31 Dec 2019 Homes Homes Partnerships land bank for house building Owned land plots 13,541 9,768 3,392 Joint Venture plots ● Increase land supply fo
Slide 21: Significant opportunity from strategic land
Significant opportunity from strategic land ● Well positioned with strategic land Total Total As at 31 Dec 2019 sites plots - 31,965 strategic land bank plots across the Group Planning agreed 13 5,287 - Good progress on a number of significant land projects Planning application 14 3,588 during 2019
Slide 22: Operational priorities
Operational priorities Graham Prothero Chief Operating Officer
Slide 23: Integration process well underway
Integration process well underway ● Housebuilding reorganised ● Vistry Partnerships rebranded and already bolstered with additional developments ● Divisional Chairs and MDs oppointed; majority of business unit Boards confirmed ● Consultations under way and will be concluded by early March ● Procurem
Slide 24: Regional map - Housebuilding
Regional map - Housebuilding 1 Yorkshire ● 13 regions, closing 4 offices 2 Mercia 3 East Midlands ● Divisional Chairs and MDs appointed 4 West Midlands 5 Cotswolds 6 Northern Home Counties 1 ● Majority of business unit Boards confirmed 7 Eastern ● BU team structures confirmed and 8 Kent 9 South East
Slide 25: Regional map - Partnerships
Regional map - Partnerships 1 1 North East ● No change to Regional MDs 2 Yorkshire 3 North West 2 ● Business unit MDs and teams largely 4 East Midlands 3 continuing; some teams expanding 5 West Midlands 6 London Contracting ● Mixed tenure developments 7 London Development 4 transferred into Partners
Slide 26: Customer service
Customer service ● Delivering high quality homes and excellent customer service remains at the core of the business ● Vistry Group is trending at a 5-star HBF customer satisfaction rating - Increased focus internally on HBF 9-month survey ● Roll-out of ‘Keys’ CRM platform across Linden Homes - Furth
Slide 27: House types and dual branding
Linden Homes - Rainham House types and dual branding ● Brand and marketing reporting to a single Group Director ● Two excellent ranges in Phoenix and Linden Collection ● Optimise breadth and depth of product Bovis Homes - Chinnor offering to best meet consumer demand ● Each housebuilding regional of
Slide 28: Key principles
Key principles ● Best of both businesses ● Decide quickly and execute efficiently ● Adherence to Group principles ● Genuine sense of one team
Slide 29: Outlook
Outlook Greg Fitzgerald Chief Executive
Slide 30: Market environment
Market environment ● Increased market certainty ● Strong demand in YTD - Political stability - Increased consumer interest - Progress on Brexit - Strengthened sales rates ● Strong market fundamentals ● Sustained demand from Housing - Historic low interest rate Associations environment - Private bulk
Slide 31: Outlook
Outlook ● Integration progressing well - Confident of delivering significant benefit from exciting combination ● Good start to the year - Underlying average sales rate per week up 15% - Positive momentum on underlying pricing ● Strong forward sales position - 48% of consensus housebuilding revenues
Slide 32: Q&A
Q&A
Slide 33: 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
Slide 34: Appendices
Appendices
Slide 35: Key metrics
Key metrics Revenue (£m) Operating profit margin (%)(1) Profit before tax (£m)(1) 1,130.8m 17.0% 188.2m 1130.80 17.300 188.20 17.3 188.2 1,130.8 17.0 16.4 1,061.4 1,054.8 1,028.2 168.1 15.2 904.64 160.1 946.5 12.975 141.15 154.7 12.5 678.48 114.0 8.650 94.10 452.32 4.325 47.05 226.16 0.00 0.000 0.00
Slide 36: Land bank
Land bank 31 Dec 2018 2019 Owned land bank plots 17,328 17,328 Joint venture plots 1,496 3,787 Total consented land bank 15,832 13,541 Land bank years(1) 4.0 yrs 3.9 yrs Average plots per site(2) 135 133 Average sales price(2) £305k £299k Average land cost per plot £55k £46k Plot cost / ASP 18% 16%
Slide 37: Work in progress and other assets
Work in progress and other assets (£m) 31 Dec 2018 30 June 2019 31 Dec 2019 Stock (including show homes) 28.6 28.9 30.5 Housing WIP infrastructure 416.6 453.4 445.0 Part exchange 16.3 17.5 15.9 Total work in progress 461.5 499.8 491.4 Debtors - Help to Buy 1.2 4.0 2.1 - HA 24.2 41.4 42.8 - Other rec
Slide 38: Net finance costs
Net finance costs (£m) FY18 FY19 Net bank interest and commitment fees (1.9) (1.9) Issue cost amortisation (0.8) (0.9) Imputed interest on land (3.6) (3.4) Pension financing 0.2 0.1 IFRS 16 interest on leases - (0.6) Interest receivable on JV loans - 0.6 Total before exceptional items (6.1) (6.1) Ex
Slide 39: Other liabilities
Other liabilities (£m) 31 Dec 2018 30 June 2019 31 Dec 2019 Creditors 169.2 199.3 214.6 Lease liabilities - 22.4 23.0 Corporation tax liability 18.1 14.3 20.9 Deferred tax liability 0.7 2.2 - Provisions 4.8 3.8 4.0 Other liabilities 192.8 242.0 262.5
Slide 40: Vistry Group
Vistry Group