Vistry Group has secured price cuts on all supply chain contracts now and in the future – amid the FTSE 250 company merging its Housebuilding and Partnerships operations.
“The group has proactively managed its costs during the year and, working with our key supply chain partners, agreed cost reductions for all existing and future contracts in the second half,” Vistry wrote in its latest trading update.
It concludes negotiations with subcontractors started in October last year for 10 per cent reductions on packages.
It added: “This reflects both improving market conditions on costs and the benefits to the group from its scale, its growth strategy, and the high level of visibility on forward sales and build programmes under the Partnerships model which offers greater continuity of work to our suppliers.”
It comes as chief executive Greg Fitzgerald prepares to take on the roles of chairman and CEO when incumbent chairman Ralph Findlay steps down in May.
Vistry reported adjusted revenues of £4 billion for the year ended 31 December 2023 (FY2022: £4.46 billion), with adjusted pre-tax profit expected to be £418.4 million, in line with the prior year. It is targeting revenue growth of 5 to 8 per cent per annum.
In December the group started a £55 million share buyback scheme, aiming to return £1 billion to shareholders over next three years.
Its forward sales position of £4.5 billion was up 12.4 per cent on the previous year, which it said positioned it to deliver a “step-up” in completions in FY2024.
The group had a year-end net debt position of £90 million (31 December 2022 net cash: £118.2 million), down from £328.7 million in June last year.
Its timber frame operation, Vistry Works, delivered 2,500 units in the period as planned; the group is now targeting 7,000 units from its three factories in future.
Full year results are expected 14 March 2024.
“We are seeing good levels of demand for homes from [registered providers] and [local authorities], with an increasing demand profile from the [private rented sector],” said Vistry. “We are making good progress with our strategy of focusing our operations fully on our high growth, asset-light Partnerships model. The group is operating as one Partnerships business with six operating divisions and 26 regional businesses.”
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