Vistry Group’s forward sales boom following first-half loss
Vistry Group swung to a pre-tax loss in the first half of the year but said it expected sales to bounce back in the aftermath of the coronavirus lockdown.
The figures
Vistry Group posted revenue of £606.4m in the six months to the end of June, up 28 per cent on the same period last year.
But the firm reported a pre-tax loss of £12.2m, compared to a pre-tax profit of £72.5m.
The company posted a loss per shares of 5.4p, compared to earnings per share of 41.9p.
Net debt was £357.3m at the end of the period, down from a cash position of £102m.
Why it’s interesting
Vistry Group has demonstrated robust trading in the face of the coronavirus crisis, which brought the construction industry almost to a standstill.
The housebuilder reported higher revenue in the first half of the year, boosted in part by its acquisition of Galliford Try’s Linden Homes.
However, site closures took their toll on production, and the company swung to a pre-tax loss of £12.2m over the period.
The firm said it incurred £10.2m in site costs directly related to Covid-19 and had received £6.3m from the government furlough scheme, which it said it would repay.
But Vistry struck an upbeat tone for the remainder of the year, stating its sales rate was 20 per cent ahead of last year since 1 July.
In addition, forward sales hit a record level of £2.7bn, including a 17 per cent rise in housebuilding forward sales to £1.5bn.
Vistry said pricing remained firm and cost inflation was minimal.
The construction giant said its integration of Bovis Homes and Linden Homes was ahead of schedule, with expected cost savings increasing to £44m. It said £20m of this was due to be achieved in 2020.
Vistry said it was on track to deliver a stronger performance in the second half of the year with full-year profit before tax forecast between £130m and £140m.
What Vistry Group said
“We moved quickly to integrate Linden Homes and Vistry Partnerships at the start of the year,” said chief executive Greg Fitzgerald.
“It has been a successful process bringing together the best from each business, with the benefits from the combination expected to be ahead of our initial target. We have achieved this whilst maintaining our focus on delivering excellent service to our customers.
“Housebuilding’s first half performance was significantly impacted by the lockdown and resultant site closures. Vistry Partnerships demonstrated its market resilience and robust revenue model and led the group to an early successful return to site, with production levels across the group now back at near normal levels.”