9th Jul 2020 11:04
(Alliance News) - Vistry Group PLC said Thursday its completions in the first half more than halved but has seen a week-on-week rise in sales over the past 10 weeks.
Vistry Group - formerly Bovis Homes - delivered 1,235 total unit completions in the first half ended June 30 compared to 3,371 the year before.
"With our integration ahead of plan and enormous commitment from our employees and supply chain, the business has successfully managed through the challenges since mid-March," Chief Executive Greg Fitzgerald said.
He continued: "Vistry Partnerships has demonstrated its market resilience and has been quick to accelerate productivity as lockdown restrictions have eased. This high growth, counter cyclical part of the business is a significant differentiator for the group."
The housebuilder also noted it has "managed" its liquidity position, with net debt "significantly lower" than expectations. The company's net debt ended June 30 at about GBP355 million. This was achieved, Vistry said, with "compromising" its planned investment for 2021.
"The wide-ranging effects of Covid-19 are expected to impact margin for the first half across the business. The business has incurred additional costs directly related to the period of lockdown, lower levels of operating efficiency from social distancing and the lengthening of development period expectations," Vistry said.
The company added: "Margin is also impacted by our policy of recognising the full sales and marketing costs across the financial year, similar to administrative expenses, rather than apportioning them by volume."
Vistry's forward sales ended the half at GBP1.26 billion.
The housebuilder said its discretionary land spend was paused at the end of March, but acquired 1,815 plots across eight 8 sites in the first half.
Vistry decided against an interim payout but has opted, instead, for a bond issue. The housebuilder said the issue will equate to placing 4.4 million shares, valued at GBP60 million, based on a price of GBP13.73 per share.
"The board recognises the value of dividends to shareholders and will consider this in its future dividend strategy," Vistry added.
Looking ahead, Vistry said: "We are pleased to report a continuing improvement in market trends over recent weeks in terms of increased consumer demand. House prices have remained stable and we currently see deflationary pressure in our supply chain. This, combined with completions returning to a more normal level and the flow-through of synergy benefits, will support an anticipated restoration of gross margin in the second half and retain the strong value from the margin in our future land bank."
Shares in Vistry Group were 2.1% higher in London on Thursday mid-morning at 726.50 pence each.
By Paul McGowan; [email protected]
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