26th Mar 2025 09:08
(Alliance News) - Vistry Group PLC on Wednesday passed on paying a final dividend for 2024, after a tough year which saw profit slump and net debt more than double.
Chief Executive Greg Fitzgerald said: "2024 was a challenging year for the group resulting in a disappointing financial performance, despite strong growth in completions and revenue."
The Kent, England-based housebuilder said pretax profit fell 64% to GBP104.9 million in 2024 from a restated GBP293.0 million in 2023. Operating profit fell 25% to GBP358.2 million from GBP476.1 million and the operating profit margin narrowed to 8.3% from 11.8%.
Revenue grew 6.2% to GBP3.78 billion from a restated GBP3.56 billion.
Profitability was "significantly reduced" by previously disclosed cost forecasting issues in its South Division, with the impact on 2024 adjusted pretax profit totalling GBP91.5 million, Vistry said.
Adjusted pretax profit fell to GBP263.5 million in 2024 from a restated GBP407.3 million in 2023.
The financial performance also was hurt by delays to concluding agreements with partners and other commercial transactions at the end of the year, Vistry noted.
Results for 2023 were restated to "correct the prior year error that arose due to the cost forecasting issue in the South Division", the cost of which had a total impact of GBP165 million.
In response, shares in Vistry fell 5.6% to 612.00 pence in London on Wednesday morning. They hit an intraday low of 580.00p and have fallen 51% in the past 12 months.
Total completions totalled 17,225 units in 2024, up 6.9% from 16,118 units in 2023. Partner Funded completions rose 18%, while Open Market completions fell 15%.
In 2025 so far, Vistry said the group sales rate of 0.59 sale per site per week is down on 0.81 a year before, reflecting a low volume of Partner Funded transactions in the first quarter.
Its current 2025 forward order book stands at GBP4.4 billion, down from GBP4.6 billion the year before.
For 2025 as a whole, Vistry expects to make progress in profit, with more of a second-half weighting than in prior years.
Vistry continues to target a 40% return on capital employed, a 12% operating margin, and revenue growth of 5% to 8% per annum in the medium term.
Vistry increased its building safety provision by GBP117.1 million in 2024, largely due to additional buildings identified as needing remediation, it said. This has driven a net increase in the total provision as at December 31 to GBP324.4 million from GBP289.0 million in 2023.
Ensuring the group retains a strong financial position remains a key priority for 2025, Vistry said, noting net debt at the year-end more than doubled to GBP180.7 million from GBP88.8 million at the end of 2023.
Improved cash generation is expected to result in a steady reduction in average net borrowings through 2025 and a year-on-year reduction in debt. Vistry is targeting a GBP200 million reduction in excess working capital in 2025.
The company is looking at ways to accelerate the cash release from its former Housebuilding landbank, with options including bulk sales and discounting under consideration, it added.
Due to the weak financial results in 2024, Vistry is not proposing a final dividend. Future distributions will be made in accordance with the group's capital allocation policy, Vistry added.
In 2023, the firm paid a dividend of 32p per share.
In September, Vistry announced a GBP55 million share buyback in lieu of an interim dividend and a further special buyback of up to GBP75 million.
CEO Fitzgerald said: "Our focus is now firmly on the future and executing our differentiated partnerships strategy. We are pleased to see the government bring forward a further GBP2 billion of much-needed funding for affordable homes, and will be seeking to progress as quickly as possible with our partners to deliver quality new homes across the country. We continue to drive a capital light, high return model, with a targeted 40% return on capital employed in the medium term."
By Jeremy Cutler, Alliance News reporter
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