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Vistry Group PLC (LSE:VTY) has delivered a robust set of financial results for the first half of 2024, marked by significant growth in completions and operating profit. The Group has also announced a further £130 million share buyback, underscoring its commitment to returning £1 billion to shareholders over the next three years.
Key Highlights
- Increased Completions: Total housing completions surged by 9% in H1 2024, with 7,792 units completed compared to 7,143 in the same period last year. This growth was driven by strong demand in the Partner Funded markets.
- Improved Profitability: Adjusted operating profit grew by 10% to £227.3 million, up from £206.7 million in H1 2023. Despite a slight dip in operating margins from 11.6% to 11.5%, the overall profit growth reflects solid operational performance.
- New Land Opportunities: Vistry secured 8,225 mixed tenure plots across 32 developments, in line with its high-growth strategy. This represents a notable increase from the 6,866 plots secured in H1 2023, positioning the company for future growth.
- Investment in Growth: The Group continues to invest in key areas such as land acquisition, skilled labor, timber frame manufacturing, and cost efficiency measures, capitalizing on its scale to drive further operational improvements.
- Debt Position: As of 30 June 2024, Vistry's net debt stood at £322.0 million, a slight reduction from £328.6 million at the same point in 2023, despite a higher year-end debt position of £207 million.
Current Trading and Outlook
Vistry has reported positive trading results through the typically quieter summer months, and it remains on track to deliver strong growth for the full year:
- Completions Target: The Group is set to exceed 18,000 completions for FY24, a notable increase from 16,118 completions in FY23.
- Forward Sales: Vistry’s forward sales position is strong, standing at £5.1 billion, a 19% increase compared to £4.3 billion in 2023. The company has secured 91% of its projected sales for FY24, providing a solid foundation for meeting profit expectations.
- Profit Growth: Full-year profits are expected to surpass last year’s figures, driven by continued demand and strong forward sales momentum.
- Net Cash Position: Vistry is targeting a net cash position by the end of the year, further enhancing its financial stability.
Capital Allocation and Shareholder Returns
Vistry remains committed to its goal of returning £1 billion to shareholders within three years through a combination of ordinary and special distributions:
- Further Buyback: A £55 million ordinary share buyback, reflecting H1 2024 adjusted earnings, has been announced.
- Special Distribution: A first special distribution of £75 million, also via share buyback, has been announced, bringing the total buyback to £130 million. This program is expected to be completed by the AGM in May 2025.
- Capital Returns: Since the strategy update 12 months ago, the Group has returned or announced £285 million of the targeted £1 billion capital return to shareholders.
