viewVistry Group PLC

Vistry says sales rate improving as lockdown eases

The group’s total reservations total £1.5bn, including joint ventures

Vistry Group PLC -

Vistry Group PLC (LON:VTY) said it has exchanged contracts on 310 homes and legally completed 257 private sales over the past eight weeks of the coronavirus lockdown. 

The housebuilder has also taken a net 300 private reservations for its homes over the past eight weeks, with 447 gross private reservations and almost 150 cancellations.

This compared to 193 private sales and 80 cancellations reported on 23 April.

There has been an improving trend on the rate of sales, the FTE 250 group said, with a sales rate of 0.26 over the past three weeks. 

For comparison, FTSE 100 rival Taylor Wimpey said last week that it had sold a net 408 homes during lockdown, averaging a net private sales rate of 0.30.

Vistry's housebuilding arm is currently operating on 119 out of a total 172 building sites and this is expected to continue increasing in coming weeks.

The housing partnerships division, which was acquired from Galliford Try in the first quarter, is currently working on all 73 of its contracting sites and 31 out of 34 development sites.

Partnerships has a contracting forward order book of £827mln, with the group’s total reservations totalling £1.5bn, including joint ventures.

With integration continuing after the acquisition, management now plans to make further headcount reductions to produce annual equivalent savings of almost £10mln, increasing anticipated total synergy savings to around £44mln. 

Net debt had risen to £476mln from £440mln on 21 April, while the group said that on top of banking facilities of £770mln it also has access to the state Covid Corporate Financing Facility if it is required. 

After suspending the interim dividend, management has decided on an alternative means of returning capital to investors by allocating 4.37mln shares to shareholders who were on the register as of 27 December, with the issue valued at £60mln using the closing share price on that date of 1,373p. This remains dependent on shareholder approval.

Shares in the company fell 3% on Wednesday morning to 736.5p, down 45% since the start of the year.

Analysts at broker Peel Hunt said: “Clearly, it is still early days but consumer confidence remains key for the sector over the next 6-12 months. 

“Vistry has underperformed the sector by circa 15% [in the year to date] which is harsh and with the shares trading on an 11% discount to the last TNAV we see the shares as offering some of the best value in the sector.”

Analysts at Hargreaves Lansdown said 70% efficiency still leaves a lot to be desired and while efficiency is expected to improve, social distancing measures are likely to prevent the group getting back to full operational capacity for some time.

“We suspect this will be a pattern across large swathes of the economy, which will be held back from firing on all cylinders by the need to keep everyone safe.

“Vistry’s focussing on getting its Partnerships business back up and running first as the cash flows are more predictable there than at the housebuilding sites. The steady trickle of optimistic news on house prices from the sector has continued, although given the very low sales numbers it’s still too early to say what will happen over the next six months as lockdowns ease.”

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Price: 1225 GBX

Market Cap: £2.72 billion

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