The Group formerly known as Bovis Homes is expected to deliver another year of record profits, slightly ahead of market expectations.
Vistry Group has issued a trading update for the business operating as Bovis Homes Group for the 12 months ended 31 December 2019, ahead of the publication of its full year results on 27 February 2020.
Highlights include:
- Significant step up in average weekly sales rate to 0.58 for 2019;
- Controlled period end with total completions up 3% to 3,867;
- Operating margin progression despite backdrop of market uncertainty;
- HBF Customer Satisfaction score of above 90% for Q3, equivalent to 5-star rating;
- Good progress to date for Vistry Group following transformational acquisition of Linden Homes and Partnerships & Regeneration businesses completed on 3 January 2020.
Greg Fitzgerald, Chief Executive said: “The Group has made further operational progress over the past 12 months and for 2019 expects to deliver another year of record profit. Building high quality new homes for our customers has been, and remains our priority, and I am confident we will finish the year as an HBF 5-star housebuilder.
“We completed the transformational acquisition of the Linden Homes and the renamed Vistry Partnerships at the start of this year; integration is well under way and we are fully focused on delivering the clear and significant benefits from this exciting combination as quickly as possible.”
The Group completed a total of 3,867 (2018: 3,759) new homes in the year including 58 (2018: nil) joint venture completions, an increase of 3% on the prior year. Private homes totalled 2,678 (2018: 2,567) units with 1,189 (2018: 1,192) affordable housing units.
Total average selling price on completions in the year was c. £279k (2018: £273.2k) with a private average selling price of c. £341k (2018: £337.4k). As previously reported, market uncertainty surrounding Brexit and the general election led to some increased pressure on pricing in the second half resulting in a c. 1-2% reduction in underlying sales prices for that period.
This was, in part, offset by a combination of the Group’s own build cost savings and a lack of cost inflation. As a result, the Group expects to deliver a further improvement in operating margin for 2019, with pre- exceptional profit before tax for the year expected to be slightly ahead of market consensus.
The Group expects to report exceptional costs relating to the acquisition of Linden Homes and Vistry Partnerships totalling c. £15m (2018: nil) in the year ended 31 December 2019.
The significant step up in the Group’s sales rate was maintained in the year with an average sales rate per outlet per week of 0.58 (2018: 0.5). We continue to see a strong level of demand for private units from housing associations. The Group operated from an average of 88 (2018: 87) active sites during 2019.
“We are delighted to have completed the transformational acquisition of the Linden Homes and Vistry Partnerships businesses at the start of the year,” said Fitzgerald. “Our focus is on successfully integrating these businesses and delivering the clear and significant benefits from the combination as quickly as possible.
“Whilst it is early in the year to comment on 2020 trading, we have a strong forward sales position and trading to date has been very positive, with consumer confidence returning and industry fundamentals remaining strong. We are excited about the prospects for the enlarged business and expect to report much progress in the year ahead.”
