Vistry Group, a UK housebuilder, has confirmed its full-year profit guidance and announced plans to revise its shareholder payout plan. The company is refocusing its business strategy to prioritize its high-return partnerships model.
In the first half of the year, Vistry’s pretax profit increased slightly to £114.2 million ($142.4 million) compared to £111.35 million in the same period last year. Revenue also saw a significant rise from £1.19 billion to £1.575 billion, driven by a 40% increase in legal unit completions. However, adjusted pretax profit, which excludes exceptional and one-off items, declined by 8.4% to £174.0 million.
Despite the decline in adjusted pretax profit, Vistry reiterated its full-year guidance of achieving an adjusted pretax profit above £450 million. The company has revised its business strategy and will now fully focus on its high-return partnerships division. This division collaborates with government and housing associations to deliver affordable and mixed tenure housing.
Vistry expects a substantial release of capital as assets from the housebuilding unit are redeployed into the partnerships division. The company believes that, as the demand for affordable housing continues to increase, it is uniquely positioned to meet this social need. The decision to refocus the business on partnerships is expected to drive sustained growth in housing output and provide better benefits to partners while maximizing long-term shareholder returns.
Vistry plans to merge its two divisions fully by the end of the year. Chief Executive Greg Fitzgerald highlighted the company’s commitment to addressing the social need for housing across the country and increasing the availability of affordable and sustainable homes.
To further benefit shareholders, Vistry will launch a share buyback program of £55 million starting in November. This buyback program will be completed before the release of full-year results in March. The company aims to achieve a total shareholder distribution of £1 billion over the next three years through the buyback program, replacing dividend payments.
Sources:
– Vistry Group: https://www.vistrygroup.co.uk/
– The Wall Street Journal article: *By Christian Moess Laursen and Joe Hoppe* (contact details provided in the original article)
– Adjusted pretax profit: Profit before tax that has been adjusted to exclude exceptional and one-off items
Note: The original article’s content has been paraphrased and expanded to provide additional context.