Vistry Group Plc · LSE:VTY
Vistry — H1 2021 Earnings Presentation
47 slides from Vistry's earnings presentation, Sep 7, 2021
Slide 1: Vistry Group HY results 2021
Vistry Group HY results 2021 VG
Slide 2: Half year results 2021
HY results 2021 VG Half year results 2021 Greg Fitzgerald Earl Sibley Graham Prothero Chief Executive Officer Chief Financial Officer Chief Operating Officer 7 September 2021 2
Slide 3: Agenda
Agenda • H1 performance • Group strategy • Financial review • Operational update Bovis Homes, Pear Tree Walk, Drakes Broughton Bovis Homes and Linden Homes Trenant Garden, Wadebridge • Outlook • Q&A Vistry Partnerships, Gallions Place, London Linden Homes, Buckwood Leas, Houghton Regis 3
Slide 4: Excellent H1 performance
HY results 2021 VG Excellent H1 performance • H1 financial performance significantly ahead of expectations, supported by successful operational integration and positive customer demand • Group adjusted revenue increased to £1.3bn, 4% ahead of proforma H1 19 • Housebuilding delivered significant marg
Slide 5: Excellent H1 performance
HY results VG Excellent H1 performance 2021 • Business in great shape with further operational improvements in the year to date • HBF Quarterly 8-week Customer Satisfaction score increased to 92.6% (5-star) • Improvement in build quality metrics for Housebuilding and Partnerships in the period (RIs,
Slide 6: One Vistry - uniquely positioned for sector leading returns
HY results VG One Vistry - uniquely positioned for sector leading returns 2021 Maximising strengths and opportunities from combination of Housebuilding and Partnerships assets • Strong market position and capability across all housing tenures • Leading provider of high demand, high growth affordable
Slide 7: Vistry Housebuilding
HY results VG Vistry Housebuilding 2021 • Business is in great shape to deliver increased returns - Medium term operating well across all areas Completions c. 8,000 units(1) • All 13 regional businesses at 5-star HBF Customer Gross margin 25% Satisfaction rating ROCE 25% • Operating structure set to
Slide 8: Vistry Partnerships
HY results VG Vistry Partnerships 2021 • 5-star HBF Customer Satisfaction Rating FY 22 Medium term • Continued rapid growth in higher margin Adjusted revenues £1bn+ 10-15 % growth p.a. mixed tenure revenues Operating margin 10%+ 12%+ • Clear trajectory to deliver c. £1.6bn revenues ROCE 40%+ 40%+ fr
Slide 9: Sustainability
HY results VG Sustainability 2021 • Group’s purpose is to deliver sustainable homes and communities across all sectors of the UK housing market • Sustainability strategy, launched in 2021, focused on three priority areas: Operations, Homes & Communities and People • As a leading provider of affordab
Slide 10: Strong outlook
HY results VG Strong outlook 2021 • Customer interest and sales remain positive into the second half • Strong Group forward sales position of £3bn - 96% of forecast FY 21 Housebuilding and Partnerships mixed tenure units secured • Supply chain issues being well managed with cost increases being more
Slide 11: Financial review
HY results 2021 VG Financial review Earl Sibley Chief Financial Officer 11
Slide 12: Summary of Group results
HY results VG Summary of Group results 2021 Adjusted basis unless otherwise stated (£m)(1) H1 20 H1 21 Change Revenue 660.9 1,259.4 +91% Gross profit 84.7 248.0 +193% Operating profit 21.2 175.5 +728% Operating margin 3.2% 13.9% +10.7ppts Profit before tax 10.3 166.1 +1,513% Reported (loss)/profit b
Slide 13: Proforma results
HY results VG Proforma results Proforma(1) 2021 Adjusted basis unless otherwise stated (£m) H1 19 H1 21 Change Housebuilding completions(2) - Private 2,199 2,294 +4% - Affordable 1,172 832 -29% Total Housebuilding completions 3,371 3,126 -7% Housebuilding revenue £870m £869m - Partnerships completio
Slide 14: Housebuilding financials
HY results VG Housebuilding financials 2021 Adjusted basis unless otherwise stated (£m) H1 20 H1 21 Change Total completions(1) 1,235 3,126 +153% Revenue 349.4 868.7 +149% Gross profit 49.1 189.0 +285% Gross margin 14.1% 21.8% +7.7ppts Operating profit 8.5 151.2 1,679% Operating margin 2.5% 17.4% +1
Slide 15: Housebuilding metrics
HY results VG Housebuilding metrics 2021 Private completions Affordable completions Average active sites 2,294 inc JVs of 441 832 inc JVs of 163 145 H1 20: 975 inc JVs of 145 H1 20: 260 inc JVs of 24 H1 20: 171 Private ASP Affordable ASP Total ASP £351k inc JVs at £349k £161k inc JVs at £156k £301k
Slide 16: Partnerships financials
HY results VG Partnerships financials 2021 Adjusted basis unless otherwise stated (£m) H1 20 H1 21 Change Total mixed tenure completions(1) 489 895 +83% Revenue 311.4 390.6 +25% Operating profit 12.4 35.5 +186% Operating margin 4.0% 9.1% 5.1ppts TNAV(2) 64.1 65.9 +3% • Strong progression on adjusted
Slide 17: Partnerships metrics
HY results VG Partnerships metrics 2021 Mixed tenure completions Mixed tenure adjusted revenue Mixed tenure ASP 895 inc JVs of 463 £164m inc JVs at £67m £251k inc JVs at £293k H1 20: 489 inc JVs of 190 H1 20: £88m inc JVs at £27m H1 20: £222k inc JVs at £286k Partner delivery equivalent units Partne
Slide 18: Procurement
HY results VG Procurement 2021 • Significant service improvements and synergy being delivered from One Vistry approach • Centralised procurement delivering benefits of scale with c. 90% of materials procured / specified centrally • Strong strategic partnerships ensuring mitigation of current cost in
Slide 19: Land activity in year to date
HY results Whiteley Court VG Land activity in year to date Bishop Auckland 2021 Land acquired Sites Plots Housebuilding 16 3,681 Littleborough Hanging Heaton Partnerships 4 846 Louth Conditionally contracted Housebuilding 4 462 Ruddington Partnerships 4 653 Pendleford Oundle Great Haddon Wymondham H
Slide 20: Land bank
HY results VG Land bank 2021 Housebuilding Partnerships 30 June 2020 2021 2020 2021 Owned 20,942 20,950 3,281 5,715 Controlled - 1,993 - 971 Total owned and controlled 20,942 22,943 3,281 6,686 Joint venture owned 9,589 8,953 4,436 3,183 Joint venture controlled - - - 268 Total joint venture owned a
Slide 21: Strategic land
HY results VG Strategic land 2021 As at 30 June 2021 Total sites Total plots • Increased focus on maximising strategic land opportunity 0 - 150 plots 38 2,821 • Strong in-house strategic land capability 150 - 300 plots 46 10,258 • Housebuilding and Partnerships working together 300 - 500 plots 17 6,
Slide 22: Summary balance sheet
HY results VG Summary balance sheet 2021 (£m) 30 June 20 31 Dec 20 30 June 21 Goodwill 548.4 547.5 547.5 Intangible assets 151.8 143.6 136.6 Goodwill and Intangibles 700.2 691.1 684.1 Investment in joint ventures 158.4 145.2 152.0 Amounts due from joint ventures 346.0 323.6 328.4 WIP and Stock 895.6
Slide 23: Cashflow waterfall
HY results VG Cashflow waterfall 2021 1 Opening net cash (1 Jan 2021) £1,127.0m (£990.9m) 2 Development receipts 3 Construction and overheads expenditure 4 Land expenditure 5 Cashflows from JVs 6 Other trading inflows 7 Dividends paid (£171.3m) 8 Non-trading net outflows £76.4m (£44.3m) 9 Closing ne
Slide 24: Gearing and capital allocation
HY results VG Gearing and capital allocation 2021 • Targeting net cash of c. £225m as at 31 December 2021 and average Leverage month-end net debt of less than £125m for FY 21 • No capital constraints to invest in land delivering min. 25% ROCE for Housebuilding and min. 40% ROCE for Partnerships • Ma
Slide 25: Operational update
HY results 2021 VG Operational update Graham Prothero Chief Operating Officer 25
Slide 26: Vistry Housebuilding – in great shape to deliver increased returns
HY results VG Vistry Housebuilding – in great shape to deliver increased returns 2021 Housebuilding Target • Step change in sales rate driven by improved product Sales rate 0.69 - range and dual branding Customer satisfaction • 5-star Customer Satisfaction Rating across all - 8 weeks 93% 93% 13 Hous
Slide 27: Vistry Partnerships - delivering strong growth in revenues and margin
HY results VG Vistry Partnerships - delivering strong growth 2021 in revenues and margin • Operating structure set to deliver rapid growth in higher Operating margin(1) margin mixed tenure revenues • Currently active on 35 mixed tenure sites, up from 27 at end of FY 20, with 4 new sites to open in H
Slide 28: Sustainability is at the core of our business
HY results VG Sustainability is at the core of our business 2021 • Our purpose is to deliver sustainable homes and communities across all sectors of the UK housing market • Our strategy focuses on three key areas of Our People, Our Operations, and Our Homes & Communities Our Homes & Our People Our O
Slide 29: Sustainability - Our People
HY results VG Sustainability - Our People 2021 • Employee engagement further improved to 8.1, ahead of industry benchmark at 7.6 • Developing Employee Value Proposition - committed to attracting and retaining the best talent Tea with Teagle • Significant investment in people development - Leadership
Slide 30: Sustainability - Our Operations
HY results VG Sustainability - Our Operations 2021 • Committing to targets consistent with 1.5 degrees • Signed up to Science Based Targets Initiative • Precise reductions to be confirmed in 2022, with 2021 as our base year £ BONUS £ £ £ 30
Slide 31: Sustainability - Our Homes & Communities
HY results VG Sustainability - Our Homes & Communities 2021 • Using our social value toolkit to enhance regeneration projects • Biodiversity Working Group developing an action plan for net gain • Assessing climate risk with the University of Exeter • Completing 54 homes achieving net zero £ regulate
Slide 32: Sustainability - Project 2025
HY results VG Sustainability - Project 2025 2021 • Project 2025 will evolve the future Vistry group standard house type portfolio • Meeting the future needs and desires of our customers, responding to the climate emergency and enhancing quality • Commitment to the Government’s policy roadmap to net
Slide 33: One Vistry - land buying advantage
HY results VG One Vistry - land buying advantage 2021 Great Haddon Vistry Partnerships Vistry Housebuilding • A new sustainable urban extension to the south Mixed tenure units 507 Total units 992 west of Peterborough Affordable rent 50% Affordable 16% Private rented 25% Private ASP £297k • Collabora
Slide 34: One Vistry - Maximising benefits from multiple brands
HY results VG One Vistry - Maximising benefits from multiple brands 2021 • ‘Brand Book’ and guidelines clearly establish how our products and brands complement each other • Plan to launch third national brand in the next 12 months • Vistry’s Hub sales approach allows our sales advisors to match cust
Slide 35: One Vistry - One customer journey
HY results VG One Vistry - One customer journey Vistry Customer Journey 2021 • New single Vistry Customer Journey launched in Prospecting Reservation Exchange Completion Warranty H1 21 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 • Used across all Vistry brands and includes 16 Build clearly defined steps S
Slide 36: Outlook
HY results 2021 VG Outlook Greg Fitzgerald Chief Executive Officer 36
Slide 37: Market review
HY results VG Market review 2021 • Strong market trends in year to date • Housebuilding remains a top priority for - Sales rales consistently ahead of historic norms Government and 17% ahead of proforma 2019 (YTD) - Participating in trial of Government First - House price inflation across all geogra
Slide 38: Strong outlook
HY results VG Strong outlook 2021 • Customer interest and sales remain positive into the second half • Strong Group forward sales position of £3bn - 96% of forecast FY 21 Housebuilding and Partnerships mixed tenure units secured • Supply chain issues being well managed with cost increases being more
Slide 39: Q&A
Q&A HY results 2021 Vistry Group VG
Slide 40: Disclaimer - important notice
HY results VG Disclaimer - important notice 2021 • 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 41: Appendices
HY results 2021 VG Appendices 41
Slide 42: Forward sales
HY results VG Forward sales 2021 Forward sales (£m) 30 June 2021 3 Sept 2021 Housebuilding - Private 621 713 - Private JVs (100%) 239 276 - Affordable 485 456 - Affordable JVs (100%) 111 106 Total Housebuilding 1,456 1,551 Partnerships - Mixed tenure 200 221 - Mixed tenure JVs (100%) 191 306 Total m
Slide 43: Bridge between adjusted and reported results by Segment and Group
HY results Bridge between adjusted and reported results by Segment and Group 2021 VG Housebuilding Partnerships Group items Total Period ended 30 June 2021 £m £m £m £m Revenue 779.0 323.7 - 1,102.7 Share of joint venture revenue 89.8 66.9 - 156.7 Adjusted revenue 868.8 390.6 - 1,259.4 Gross profit 1
Slide 44: Net finance costs
HY results VG Net finance costs 2021 (£m) H1 20 H1 21 Net bank interest and commitment fees (7.9) (4.5) Issue cost amortisation (0.7) (0.9) Imputed interest on land (3.4) (2.6) Pension financing 0.1 0.1 IFRS 16 interest on leases (0.5) (0.5) Interest receivable on JV loans 7.2 11.4 Total (5.2) 3.0 4
Slide 45: Work in progress and other assets
HY results VG Work in progress and other assets 2021 (£m) 30 June 2020 31 Dec 2020 30 June 2021 Stock (including show homes) 57.6 44.2 57.5 Housing WIP infrastructure WIP 811.2 689.1 750.6 Part exchange 26.8 25.6 14.5 Total work in progress 895.6 759.0 822.6 Debtors - Help to Buy 5.1 7.3 3.9 - HA 63
Slide 46: Other liabilities
HY results VG Other liabilities 2021 (£m) 30 June 2020 31 Dec 2020 30 June 2021 Creditors 421.4 517.5 564.9 Contract liabilities 81.6 96.4 72.9 Deferred income 87.8 87.5 67.6 Other tax and social security 26.9 9.2 2.2 Lease liabilities 39.7 42.2 37.3 Corporation tax liability - - 1.4 Deferred tax li
Slide 47: Land creditor payment profile
HY results VG Land creditor payment profile 2021 400 At 30 June 2021 £378.7m At 31 Dec 2020 £329.5m 300 200 £m £211.2m £182.4m 100 £37.5m £100.6m £98.5m £17.2m £15.3m £17.1m £9.3m £6.8m £7.5m £4.8m 0 <1 year 1-2 years 2-3 years 3-4 years 4-5 years 5> years Total Note: The land creditor payments prof