The Vistry Group PLC (LON: VTY) share price rallied 19.08% after releasing its half-year results for the six months to 30 June 2023 and providing an update on the group’s strategy. The company’s revenues increased 31.4%, reaching £1,777.1 million compared to £1,352.5 million in H1 2022.
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The home building company recorded a 32.1% increase in total completions to 7,143 homes, compared to H1 2022, when it completed 5,409. However, the company’s profits barely edged higher as they only rose 4.3% to £206.7 million from £198.2 million. The company reiterated its guidance of over £450 million adjusted profit before tax for FY23.
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Vistry also highlighted its changed strategy as it has firmly established itself as the leading provider of affordable mixed-tenure housing. The company has revised its strategy to focus exclusively on high-return Partnerships. Vistry is keen to address the UK’s chronic shortage of affordable mixed-tenure housing.
The company’s board expects to release a significant amount of capital as assets from the housebuilding division are reallocated into Partnerships, and the Group adopts a model of preselling about 65% of plots on future schemes.
Vistry’s medium-term goal is to achieve a 40% return on capital employed while growing revenues by between 5% and 8% annually. The company plans to generate £800 million in operating profits based on a 12%+ operating margin.
The company’s board plans to return up to £1 billion to shareholders over the next three years via ordinary and extraordinary distributions while eliminating debt simultaneously. The company intends to launch a £55 million share buyback programme in November 2023.
Greg Fitzgerald, Vistry’s Chief Executive, commented: “The integration of Countryside has progressed well in the first half, firmly establishing Vistry as the leading provider of affordable mixed-tenure housing in the UK. The Group delivered a robust half-year performance despite the challenging macroeconomic conditions, with Partnerships continuing to see good demand, demonstrating its market resilience. The scale of the social need for affordable mixed tenure housing across the country continues to increase, and it is clear that Vistry is uniquely positioned as the leader in partnerships housing.”
Vistry share price.
The Vistry share price rallied 19.08% to trade at 947.6p, from Friday’s closing price of 795.8p.
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