Last updated 19 April 2023
Vistry Group Plc
Vistry Group is a leading quoted housebuilder with a long land bank and a strong market position in the south of England. The group was formerly known as Bovis, which was founded in 1885 and Bovis Homes was floated in 1997. The company changed its name to Vistry after buying the partnerships business at Galliford Try for £1.1 billion. In November 2022, Vistry completed a merger with Countryside Partnerships to create an enlarged business that sells 12,000 homes a year and has annual turnover of nearly £3 billion.
Financials
In the 2022 calendar year, revenue at Vistry rose 13% to £2,729.4 million (2021: £2,407.2 million) but profitability suffered. At an operating level, profits slumped 22% to £212.5 million (2021: £285.4 million) and before tax profits fell 25% to £247.5 million (2021: £319.5 million).
To view the financials for Vistry Group, visit Companies House and use Company ID 00306718.
Operations
Vistry has its headquarters at West Malling in Kent and operates Bovis Homes, Linden Homes, Vistry Ventures and Countryside Homes. These brands are delivered through three operational businesses: Vistry Housebuilding, Countryside Partnerships and Vistry Works.
Housebuilding
The housebuilding division operates from 13 regions across England covering: Yorkshire, Mercia, East Midlands, West Midlands, Cotswolds, Northern Home Counties, Eastern, Kent, South East, Thames Valley, Southern, Western and the South West.
In 2023, housebuilding completions increased 3% to 6,774 units (2021: 6,551 units) and adjusted revenue rose to £1,982.4 million (2021: £1,829.3 million). Adjusted operating profits increased to £464.5 million (2021: £407.1 million).
Partnerships
Bovis had started its own partnerships operation before the Galliford Try acquisition. This was launched in February 2019 and secured a place on the Homes & Communities Agency’s £4 billion affordable homes framework on lot 1 in England (Project ID 11304236). Vistry Partnerships has since been merged with Countryside Partnerships.
Partnerships is working on major schemes from the development of 200 homes at Uffington Road at Stamford in Lincolnshire (Project ID: 17075726) to 1,000 homes in the Upton Park development in Northamptonshire (Project ID: 11339065).
In 2022, completions increased to 2,455 units (2021: 2,088 units) and adjusted revenue leapt 74% to £938.4 million (2021: £864.3 million). Adjusted operating profits rose 21% to £100.8 million (2021: £79.7 million).
Glenigan Data
In the 2022 calendar year, the enlarged Vistry Group submitted 36 detailed planning applications to build a total of 5,007 units, ranked Vistry in sixth place in Glenigan’s ranking of the leading housebuilders by planning activity. The combined total for the then two separate groups was 69 applications to build 14,538 homes.
In the 12 months to Q1 2023, Vistry’s won £205.5 million-worth of construction contracts for external clients and was ranked in 43rd position in Glenigan’s annual ranking of the construction industry’s top 50 contractors. In the previous 12 month period, the combined order book for both then separate companies was £682.5 million.
Conclusion: Merger makes sense but reductions ahead?
The merger has created a contractor that looks likely to remain a regular member of Glenigan’s Top 50, but reductions in cost are likely to have an impact. Annual savings form synergies are now expected to be around £60 million compared to an initial estimate of £50 million with £25 million-worth of savings in 2023.
However, the current contract order book of the enlarged business is two third the size of the totals for the then separate companies 12 months earlier. The risk profile also looks to be reduced with an average contract award in the 12 months to Q1 2023 of £10.3 million compared for a combined average at then then separate businesses a year earlier of £35.9 million.
Around 100 jobs are expected to be cut from the workforce, while Glenigan’s data also shows a massive reduction in the group’s planning activities. The combined planning programme of the newly enlarged business is only a third of the totals for the two separate businesses in 2021.
The enlarged group is spending less on land with 3,213 plots added to the partnerships landbank (2021: 4,131 plots). Following the Countryside deal, Partnerships has a landbank of 44,258 plots (2021: 11,756) but fewer plots were added to the housebuilding landbank with 5,334 plots added (2021: 7,667 plots). However, with plots transferred from Countryside the housebuilding landbank now totals 37,084 plots (2021: 31,014).
Neither group had much exposure to the apartment markets in their respective planning programmes and this remains the case. Going forward, building some form of house appears to be the priority but forward sales at February 2023 are virtually static at £1,339 million (2022: £1,324 million).
Provisions for fire safety are now £309.2 million after taking on board a provision of £191.8 million from Countryside and work has been completed on 59 of the 304 building identified. Net cash has dropped to £118.2 million (2021: £234.5 million) following a net cash outflow of £95.2 million from the acquisition of Countryside, £35.2 million from a share buy-back and £138.9 million dividend distribution.
Going forward, Vistry is likely to become one of the housebuilding industry’s biggest players with a foot in the contracting camp through the successful Partnerships operation, but the merger may take time to settle down as synergies are pursued. This allied to the rise in interest rates may dampen growth in the short term.
Winning work with Vistry Group
Vistry aims to use local labour, material suppliers and other resources where possible. The group seeks to enhance the environment where it builds, use land efficiently and protect biodiversity. It puts an emphasis on sustainable development across all its operations from land identification to after-sales services and the running of its offices.
The company has a corporate social responsibility policy and framework managed by a group executive committee. It looks at proposals from a range of viewpoints and it delivers consistent standards through regional disciplines and site teams.
In 2017, Bovis opened a national training centre in Reading to improve engagement with its supply chain. Details on the supply chain can be found here. Vistry Partnerships works with the Supply Chain Sustainability School and details can be found here.
The group’s website has policy documents on ethical codes; business continuity policy; anti-money laundering; anti-bribery and corruption; anti-fraud; whistle blowing and equal opportunities.
Key Procurement Contacts at Vistry Group:
Group procurement director – Peter Robinson, tel: 01732-280400
Peter.robinson@vistrygroup.co.uk
Land & partnerships director at Vistry Partnerships – Pete Hayes, tel: 020-8221-5000
Pete.hayes@vistrypartnerships.co.uk
Supply chain manager at Vistry Partnerships – Simon Bell, tel: 0191-227-1000