Slide 1: Vistry Group HY results 2020
Vistry Group HY results 2020 VG
Slide 2: Half year results 2020
HY results 2020 VG Half year results 2020 Greg Fitzgerald Earl Sibley Graham Prothero Chief Executive Officer Chief Financial Officer Chief Operating Officer 8 September 2020 2
Slide 3: Agenda
Agenda • Key highlights • Group strategy • Financial review • Operational update Wixams Village, Bedford Emmbrook Place, Wokingham • Outlook • Q&A Blackmore Meadows, Stalbridge Haygate Fields, Wellington 3
Slide 4: Highlights - a transformational acquisition
HY results 2020 VG Highlights - a transformational acquisition • Transformational acquisition of Linden Homes and Vistry Partnerships completed in January - Successful business integration with synergies ahead of initial target - No major surprises from acquisition nine months on • Achieved and main
Slide 5: Highlights - a well controlled response
HY results 2020 VG Highlights - a well controlled response • Rapid and coordinated response to COVID-19 - Site closures significantly impacted Housebuilding’s first half output and performance - Partnerships demonstrated its market resilience and led Group’s early return to site - Half year net debt
Slide 6: Highlights - strong outlook
HY results VG Highlights - strong outlook 2020 • Strong pick-up in customer interest and sales - Prospects at highest level for many years - Sales rate since 1 July 20% ahead of prior year at 0.73 • Pricing remains firm • Record forward order book with total forward sales of £2.7bn • Stronger H2 per
Slide 7: Vistry Group strategy
HY results 2020 VG Vistry Group strategy 7
Slide 8: A uniquely positioned top 5 UK house builder
HY results VG A uniquely positioned top 5 UK house builder 2020 Housebuilding Partnerships • 5-star housing provider • Leading provider of partnership housing • Two leading housing brands • Excellent reputation and firmly established relationships • National scale and coverage • National scale and c
Slide 9: One Vistry Group
HY results VG One Vistry Group 2020 Housebuilding Partnerships Keith Carnegie Stephen Teagle CEO Housebuilding CEO Partnerships Darrell White Darren Maddox Michael Stirrop Stuart Munro Stuart Brodie James Warrington MD West MD South MD East MD Southern MD London MD Central & North • Mercia • South E
Slide 10: Housebuilding revenue drivers
HY results VG Housebuilding revenue drivers Construction and property 2020 Retail Volume growth • 13 business units Financial 22% Houses • C.550-625 Strategy and units per business unit p.a. business development 6% Apartments • Capacity People to deliver > 8,000 Housebuilding units p.a and culture A
Slide 11: Housebuilding gross margin improvement
HY results VG Housebuilding gross margin improvement 2020 Driver Impact Progress in 2020 • Land acquisition • Min gross margin acquisition hurdle • Housebuilding land bank gross margin rate of 25% of 24.2% as at 30 June 2020 • Strategic land pull through • Enhanced margin of c.150-300 bps • >32k str
Slide 12: Vistry Partnerships
HY results VG Vistry Partnerships 2020 A differentiated business positioned for growth and high returns • IntegratedHigh contractor/developer quality land bankskillset Resilient revenue stream and approach • Long term contracting projects • High % of pre-sold mixed tenure development • Providing end
Slide 13: Margin delta dependent on risk retained
HY results VG Margin delta dependent on risk retained 2020 Operating Proforma Target margin 2019 % of % of range Characteristics revenue revenue Contracting 3%-5% Low risk, cash generative predominantly two stage and negotiated contracts with repeat clients. London biased with Institutional PRS and
Slide 14: Vistry Partnerships' model in action
HY results VG Vistry Partnerships’ model in action 2020 Bovis Homes, Linden Homes Homes England relationship • Leveraging benefits of • Strong reputation for delivering two housebuild brands quality homes and places to live • Dual branding - increasing • Competitive tender process sales rates and pr
Slide 15: Vistry Partnerships – delivering accelerated profit
HY results VG Vistry Partnerships – delivering accelerated profit 2020 Units Revenue (£m) Margin (%) 6,000+ 1,000+ 10%+ 10000 8000 3,000 500 194.6 1,158 2,556 3,000 513.5 500 5.4% FY19 Target 2022 FY19 Target 2022 FY19 Target 2022 Contracting Development Partnerships 15
Slide 16: Investment proposition
HY results VG Investment proposition 2020 High quality land bank Revenue growth • Housebuilding volume capacity >8,000 units • Targeting Partnerships revenue >£1bn Valuable strategic land portfolio • Increasing % of market resilient revenue Significant margin improvement • Housebuilding land bank gr
Slide 17: Financial review
HY results 2020 VG Financial review Earl Sibley Chief Financial Officer 17
Slide 18: Summary of Group results
HY results VG Summary of Group results 2020 Adjusted basis unless otherwise stated (£m) HY19 HY20 Change Revenue 472.8 660.9 +40% Gross profit 101.9 84.7 -17% Operating profit 75.2 21.2 -72% Operating margin 16.0% 3.2% -12.8bps Profit before tax(2) 72.5 10.3 -86% Reported profit/(loss) before tax 72
Slide 19: Proforma results
HY results VG Proforma results HY19 HY20 2020 Housebuilding completions(1) - Private 2,199 975 - Affordable 1,172 260 Total Housebuilding completions 3,371 1,235 Housebuilding revenue(2) £854m £349m Partnerships completions(1) - Mixed tenure 574 489 - Contracting equivalent units 1,140 1,310 Total P
Slide 20: Housebuilding financials
HY results VG Housebuilding financials 2020 Adjusted basis unless otherwise stated (£m) HY19 HY20 Change Total completions(1) 1,647 1,235 -25% Revenue 472.8 349.4 -26% Gross profit 101.9 49.1 -52% Gross margin 21.6% 14.1% -7.5bps Operating profit 79.7 8.5 -89% Operating margin 16.9% 2.5% -14.4bps TN
Slide 21: Housebuilding metrics
HY results VG Housebuilding metrics 2020 975 260 169 Private completions(1) Affordable completions(1) JV completions H1 19: 1,031 H1 19: 616 H1 19: 3 £332k £158k £294k Private ASP(2) Affordable ASP(2) Total ASP(2) H1 19: £342k H1 19: £146k H1 19: £269k 10% 21% 30% PX as % of Affordable as % of HTB a
Slide 22: Partnerships financials
HY results VG Partnerships financials 2020 Adjusted basis unless otherwise stated (£m) HY20 Total mixed tenure completions(1) 489 489 1,310 Revenue 311.4 Mixed tenure Contracting completions(1) equivalent units(1) Operating profit 12.4 Operating margin 4.0% TNAV 64.1 £222k Mixed tenure ASP(2) (1) In
Slide 23: Net debt lower than forecast
HY results VG Net debt lower than forecast 2020 £763m (£853m) 1 Opening net cash (1 Jan 2020) 2 Development receipts 3 Construction and overheads expenditure 4 Land expenditure £362m 5 Acquisition of Linden Homes & Partnerships (£84m) (including net overdraft acquired) 2 (£401m) 3 6 Assumption of US
Slide 24: Liquidity
HY 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 25: Capital allocation - primary focus on deleverage
HY results VG Capital allocation - primary focus on deleverage 2020 Strong cash generation from significant revenue and profit growth Priority Target • Targeting gearing of 35%(1) as at Deleveraging 31 December 2021 • Maintain size of Housebuilding land bank to support controlled volume growth Inves
Slide 26: Land activity in year to date
HY results VG Land activity in year to date 2020 • Land market dynamics remain stable - Continued good supply of opportunities Sandymoor - Some scope to increase deferred payment terms • 3,406 plots acquired across 13 developments Stafford - 2,086 Housebuilding plots - 1,320 Partnerships mixed tenur
Slide 27: Land bank
HY results VG Land bank 2020 Housebuilding Partnerships 30 June 2019 2020 2020 Owned land bank plots 13,161 20,942 3,281 Joint venture plots 3,054 9,589 4,436 Total consented land bank 16,215 30,531 7,717 Land bank years(1) 3.7 yrs 4.0 yrs 6.1 yrs Average plots per site(2) 127 112 107 Average sales
Slide 28: Strategic land
HY results VG Strategic land 2020 As at 30 June 2020 Total sites Total plots • Well positioned with strategic land 0 - 150 plots 46 3,464 - 32,831 strategic land bank plots across the Group - Strong pipeline of high quality developments to be pulled 150 - 300 plots 41 9,061 through in the near term
Slide 29: Summary balance sheet
HY results VG Summary balance sheet 2020 (£m) 30 June 19 31 Dec 19 30 June 20 Goodwill - - 548.4 Intangible assets 2.1 4.3 151.8 Goodwill and Intangibles 2.1 4.3 700.2 Investment in joint ventures 61.4 85.1 158.4 Amounts due from joint ventures 0.7 5.2 346.0 Stock and WIP 499.8 491.4 895.6 Land 769.
Slide 30: Synergies
HY results VG Synergies 2020 Initial expectation Target Progress Geographic £15m £15m • 4 Housebuilding office closures • E xpecting total synergy overlap • Headcount reductions benefits of £44m, £9m • Establishment costs ahead of initial target Direct £15m £18m • c.125 product categories reviewed -
Slide 31: Operational update
HY results 2020 VG Operational update Graham Prothero Chief Operating Officer 31
Slide 32: Successful integration in first 6 months
HY results VG Successful integration in first 6 months 2020 Taking the best from each business, strengthening the overall Vistry Group position Key milestones Housebuilding re-organisation – 13 regions, 4 office closures Review of Bovis Homes and Linden Homes product range and market positioning Par
Slide 33: Response to COVID-19
HY results VG Response to COVID-19 2020 • Progress on integration enabled rapid, well coordinated response Property • Housebuilding sites closed for on average 7 weeks currently • Partnership demonstrated resilience of revenues and led the occupied Group’s return to site Please do not enter • New op
Slide 34: People
HY results VG People 2020 • Strong employee engagement with recent Peakon engagement score of 7.6 above benchmark • Harmonisation of employment and HR practices • Emphasis on Mental Health First Aid - Roll out of MHFA across entire Group including half-day awareness training for all line managers •
Slide 35: Supporting our communities during COVID-19
HY results VG Supporting our communities during COVID-19 2020 We are very proud of the huge number of Vistry employees who have supported their local communities during this pandemic • Donation of PPE equipment to local hospitals • Volunteer work for NHS and other services • Voluntary fire-fighting,
Slide 36: Quality product and customer service - maximising the sales opportunity
HY results VG Quality product and customer service - 2020 maximising the sales opportunity • HBF 5-star customer satisfaction rating for 2019 - Group continues to trend above 90% satisfaction • Significant improvement in Group’s 9-month HBF customer satisfaction score (up 13% year on year) • Latest
Slide 37: Investing in our sales and customer service capability
HY results VG Investing in our sales and customer service capability 2020 • Aim to empower our customers with an omnichannel, 6 clicks to reserve your home high quality, consistent and highly personalised service 1 Reservation 2 Plot details • Introducing regional sales centres with a centralised ‘b
Slide 38: Strategic projects
HY results VG Strategic projects 2020 • 8 major projects with over 11,000 units – all currently sit within our Housebuilding business • 8 outlets currently - expect this to increase to at least 20, with further opportunity • Share the same characteristics - Large and strategically sourced - Good mar
Slide 39: Operating sustainably
HY results VG Operating sustainably 2020 • Developing a new ESG strategy for Vistry • Reviewing our performance across the Group to set new and challenging targets • Stakeholder consultation to inform our priorities • Standardising and formalising data collection across the Group • Sustainability ch
Slide 40: Outlook
HY results 2020 VG Outlook Greg Fitzgerald Chief Executive 40
Slide 41: Market review
HY results VG Market review 2020 • Wider market uncertainty and increasing unemployment could impact consumer confidence • Housing market fundamentals remain positive - Supply demand imbalance persists - Housing remains high on Government’s agenda - Growing importance of mixed-use development - Dema
Slide 42: Current trading and outlook
HY results VG Current trading and outlook 2020 • Strong pick-up in customer interest and sales - Prospects at highest level for many years - Sales rate since 1 July 20% ahead of prior year at 0.73 • Pricing remains firm • Record forward order book with total forward sales of £2.7bn • Stronger H2 per
Slide 43: Q&A
HY results 2020 VG Q&A 43
Slide 44: Disclaimer - important notice
HY 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 45: Appendices
HY results 2020 VG Appendices 45
Slide 46: Forward sales
HY results VG Forward sales 2020 Forward sales (£m) 30 June 2020 4 Sept 2020 Housebuilding - Private 660 744 - Affordable 330 341 - JVs (100%) 274 393 Total Housebuilding 1,264 1,478 Partnerships - Mixed tenure 178 174 - JVs (100%) 215 205 Total mixed tenure 393 379 Contracting 920 815 Total Group 2
Slide 47: Work in progress and other assets
HY results VG Work in progress and other assets 2020 (£m) 30 June 2019 31 Dec 2019 30 June 2020 Stock (including show homes) 28.9 30.5 57.6 Housing WIP infrastructure WIP 453.4 445.0 811.2 Part exchange 17.5 15.9 26.8 Total work in progress 499.8 491.4 895.6 Debtors - Help to Buy 4.0 2.1 5.1 - HA 41
Slide 48: Net finance costs
HY results VG Net finance costs 2020 (£m) H1 19 H1 20 Net bank interest and commitment fees (0.9) (7.9) Issue cost amortisation (0.3) (0.7) Imputed interest on land (1.7) (3.4) Pension financing 0.1 0.1 IFRS 16 interest on leases (0.3) (0.5) Interest receivable on JV loans 0.3 7.2 Total (2.8) (5.2)
Slide 49: Other liabilities
HY results VG Other liabilities 2020 (£m) 30 June 2019 31 Dec 2019 30 June 2020 Creditors 187.8 196.6 421.4 HA deferred income 4.3 7.7 14.1 Contract liabilities - - 67.5 Deferred income 5.3 8.5 87.8 Other tax and social security 1.9 1.8 26.9 Lease liabilities 22.4 23.0 39.7 Corporation tax liability
Slide 50: Acquisition accounting
HY results VG Acquisition accounting 2020 Purchase consideration £m Cash 398.3 Shares in Vistry Group PLC (based on share price at agreement date) 675.0 Shares in Vistry Group PLC (movement in share price to completion date) 180.4 Total purchase consideration 1,253.7 Represented by: Novation of USPP
Slide 51: Strategic projects
HY results VG Strategic projects 2020 Total Remaining Site Location Partner units units Alphington – South LiveWest 678 678 Exeter Alphington - North (controlled under option) 590 590 Camborne Cambridge Metropolitan Thames Valley Housing 783 783 Collingtree Northampton Clarion 1,000 1,000 Comeytrowe