Vistry has reported “excellent progress across all areas of the business” and is looking confidently ahead to the coming year after more then trebling its 2021 pre-tax profit to £319.5m. This compared to pre-tax profit of £98.7m in 2020.
The figures were reported in the company’s full year results for the 12 month period ending 31 December 2021, and the group says it is well positioned to deliver a significant step up in profits and returns in 2022
The housebuilder increased total 2021 completions to 6,551 (2020: 4,652) units, with adjusted gross margin improving by 470 basis points to 22.3% (2020: 17.6%)
Year-end net cash position of £234.5m (2020: £37.9m) was significantly ahead of expectations at the start of the year, and the company had a forward order book as at 25 February totalling £860m (2021: £880m) with 85% of forecast 2022 revenue already secured.
Housebuilding remains on track to increase adjusted gross margin to 23% in 2022, and achieve targets of 25% adjusted gross margin and 25% return on capital employed target for 2025
Looking confidently ahead, Vistry Partnerships fully expects to deliver its 2022 targets of at least £1bn revenue, a 10% plus adjusted operating margin and return on capital employed in excess of 40%, and sees a clear trajectory to delivering c. £1.6bn revenues and a 12% plus operating margin in the medium term.
Within those forecasts Vistry, having already set aside £25.2m for known liabilities, also expects to incur possible additional remediation costs of cladding and fire safety somewhere in the range of £35m to £50m, with Vistry chief executive Greg Fitzgerald stressing that being a successful business was also about doing the right thing.
A company statement said: “Our strong view is that the remediation costs of cladding and fire safety should not be borne by leaseholders and are supportive of government seeking a proportionate solution. We support the recent HBF response to the department of levelling up, housing and communities. We have made provisions for known liabilities, and in the year we have taken an additional charge of £5.7m, with a total provision of £25.2m held at 31 December 2021. Given the uncertainties in this area we are unable to precisely estimate any additional costs in the event the HBF's proposed recommendations are implemented, but consider that these could be in the range of £35m to £50m.”
Announcing the full-year results, Vistry chief executive Greg Fitzgerald said: "Housebuilding and Partnerships both made excellent progress throughout the year, with strong demand across all areas of the business. This was consistent throughout the year and across the country, reflecting the huge efforts of all our people for which I am very grateful. Our impressive financial performance was once again matched by our delivery of high quality homes and customer service which has been recognised by our retention of the maximum five-star customer satisfaction rating from the Home Builders Federation (HBF).
"Being a successful business is also about doing the right thing. We are acutely aware of the anxiety faced by leaseholders in properties requiring cladding and fire safety remediation and we fully agree that the financial burden for this work should not rest with them. We remain committed to working with the government to fix this difficult issue for leaseholders.
"Notwithstanding the shocking events in Europe and the attendant political uncertainties, 2022 has got off to an incredibly positive start and the group is in great shape to deliver on its strategy of maximising the strengths and opportunities from the valuable combination of our housebuilding and partnerships businesses, and on achieving sector leading returns in the medium term."