7 September 2021

Vistry Group PLC - Half year results

Vistry Group PLC (the "Group") is today issuing its results for the six-month period ended 30 June 2021.

First half highlights

·    Strong H1 performance significantly ahead of our expectations supported by successful operational integration and positive customer demand

·    HBF Customer Satisfaction Rating maintained at 5-star, with further improvement in the latest quarterly data

·    Good progress across all areas of the Group's sustainability strategy including commitment to targets required to limit warming to 1.5°C

·    Group adjusted revenues¹ increased to £1,259.4m, 4.3% ahead of H1 19 proforma revenues

·    Step-up in Housebuilding adjusted gross margin²  to 21.8% (H1 20: 14.1%)

·    Rapid growth in Partnerships higher margin mixed tenure revenues to £163.9m (H1 20: £88.2m), with Partnerships adjusted operating margin³ increasing to 9.1% (H1 20: 4.0%), firmly on track for 10+% in FY 22

·    Group adjusted profit before tax⁴ increased to £166.1m (H1 20: £10.3m)

·    On a reported basis Group profit before tax increased to £156.2m (H1 20: £12.2m loss)

·    Growth in owned landbank size with the addition of 5,642 new plots in the period, combined with investment in 4,660 strategic land plots

·    Strong cash generation resulting in net cash position of £31.6m⁵ as at 30 June 2021 as compared to H1 20 net debt position of £357.3m

·    Group return on capital employed⁶ increased to 19.4% (FY 20: 14.4%) with Partnerships achieving a return on capital employed well in excess of 40%

·    Interim dividend of 20 pence per share (2020: nil)

Current trading and outlook

·    Customer interest and sales trends remain positive into the second half

·    Strong Group forward sales position of £3bn (September 2020: £2.7bn), with 96% of forecast FY 21 total Housebuilding units and Partnership mixed tenure units secured

·    House price inflation more than offsetting cost increases with supply chain issues being well managed

·    Group well positioned for the full year with our expectations for adjusted profit before tax increased to c. £345m⁴, 5% ahead of consensus market expectations⁷

·    Group month-end average net debt for FY 21 expected to be less than £125m, and improved targeted net cash position of c. £225m at year end

·    Board intends to accelerate the ordinary dividend to a two times cover ratio in respect of FY 21

·    With balance sheet strength, the Board is committed to prioritising investment in the business to support the Group's growth strategy, pursue a sustainable two times dividend cover policy, and return any further excess capital generated in the future to shareholders via either a share buyback or special dividend

Greg Fitzgerald, Chief Executive commented:

"Following an effective operational integration, Vistry is in great shape and delivered a step change in financial performance in the first half.  The Group holds a unique market position with strength and capability across all housing tenures, and we are firmly focused on maximising the opportunities this brings. Housebuilding delivered a significant improvement in margin in H1 and we expect this to continue, whilst Vistry Partnerships is firmly on track to deliver more than £1bn of revenue in FY 22 and a margin in excess of 10%, driven by the accelerated growth of its higher margin mixed tenure revenues.

"The Group ended the period with £31.6m net cash representing nearly £400m of cash inflow over the last 12 months, reflecting our financial performance and balance sheet strength.  Thanks to this performance and our ongoing confidence in the business and market outlook, the Board is delighted to announce a 20 pence per share dividend in respect of the first half and looking forwards intends to maintain a two times dividend cover, while committing to returning excess capital to shareholders.

"As always, the achievements of the Group reflect the outstanding commitment and skills of our people, and my thanks to them and to our supply chain partners for their sterling efforts."

A presentation for analysts and investors is available on our corporate website www.vistrygroup.co.uk

There will be a virtual Q&A session hosted by Greg Fitzgerald, Graham Prothero and Earl Sibley at 9:00am this morning.  To join this session please use the webcast link available on our corporate website www.vistrygroup.co.uk or https://us02web.zoom.us/webinar/register/WN_fXjjH7aaR2-3hzRW_v-2Gg

A playback facility will be available shortly after the Q&A session has finished at www.vistrygroup.co.uk

Vistry Group will also be holding an on-site Capital Markets Day on 9 November 2021, further details to follow.

Certain statements in this press release are, or may be deemed to be, forward looking statements.  Forward looking statements involve evaluating a number of risks, uncertainties or assumptions, many of which are beyond the Group's control, that could cause actual results to differ materially from those expressed or implied by those statements.  Forward looking statements regarding past trends, results or activities should not be taken as representation that such trends, results or activities will continue in the future.  Undue reliance should not be placed on forward looking statements.  Forward looking statements speak only as at the date of this document and the Group and its directors and officers expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forward looking statement herein.

For further information please contact:

Chief Executive's Review

First half review

It has been a strong first half for the Group with a significant step up in financial performance and further operational improvements.  We have seen positive demand across all business areas, with our average weekly private sales rate increasing to 0.76 in H1 21, up 10% on the pre-pandemic proforma H1 19 rate of 0.69¹⁰.  Alongside this strong demand, we have achieved sustained price increases across all of our geographies.

The Group achieved adjusted revenues in FY 21 of £1,259m¹, 4% ahead of the proforma H1 19 Group revenue of £1,208m.  Housebuilding revenues are back at their proforma H1 19 levels with Partnerships increasing revenues significantly since proforma H1 19, driven by a rapid increase in higher margin mixed tenure revenues to £164m (H1 19: £94m).

We have compared sales rates, volumes and revenues against proforma H1 19 due to the impact of Covid-19 on the Group's H1 20 performance.  Further comparatives to H1 19 are not considered appropriate due to the need to align accounting policies following the formation of Vistry Group.

We saw significant improvement in profitability in both businesses in the first half with Housebuilding  adjusted gross margin increasing to 21.8%² (H1 20: 14.1%) or 22.0% excluding land sales. Reflecting the strong growth in higher margin mixed tenure revenues, Partnerships adjusted operating margin³ improved by 510 basis points in H1 21 to 9.1% (H1 20: 4.0%).

Overall, the Group delivered adjusted profit before tax⁴ of £166.1m (H1 20: £10.3m), ahead of management's expectations, and adjusted earnings of 59.0⁸ pence per share (H1 20: 4.9).

Our sites have operated well during the period with no real impact from Covid-19 and our first half completions were delivered in a controlled manner with a firm focus on quality together with the wellbeing of customers and colleagues.  The significant step up in production across the industry has led to some pressure on the materials supply chain resulting in extended lead times and inflationary pressures on certain products.  Working in close partnership with our suppliers, we have actively managed this ongoing situation.  The supply agreements entered into at the formation of Vistry Group are delivering an enhanced service and providing some protection against cost inflation thanks to our enlarged scale and buying power.  Notably in our Partnerships business where we have greater exposure to market risk on costs without compensating house price inflation, we look to include suitable fixed price allowances to mitigate inflation as well as an appropriate level of contingency in our pre sale agreements.  The benefit from sales price increases has more than offset any cost inflation for the Group in the first half.

We continue to engage with all stakeholders including working with the Home Builders Federation regarding cladding and build safety and remain concerned by the plight of leaseholders facing potentially large and unaffordable costs for remediation.  We are supportive of Government initiatives for an industry levy to accelerate remediation work and the resolution of this issue.  The Group has undertaken a review of all of its current and legacy buildings where a potential liability has been identified and has provided for the expected costs of any remedial works that may be required. This has been reassessed in H1 21 and no further provisions have been deemed necessary.

The Group has reported a net cash position of £31.6m⁵ as at 30 June 2021, a significant turnaround from a net debt position of £357.3m as at 30 June 2020 and reflects the Group's strong first half performance and ongoing robust working capital management.

Group return on capital employed⁶ increased to 19.4% in the first half (FY 20: 14.4%), with Partnerships achieving a return on capital employed well in excess of 40%.

Sustainability

Vistry Group's purpose is to deliver sustainable homes and communities across all sectors of the UK housing market.  Key to this purpose is a successful and ambitious sustainability strategy, which was launched earlier this year and is focussed on three priority areas of People, Operations and Homes & Communities.  To ensure the successful implementation of the strategy we have made two new senior appointments this year, being a Group Sustainability Manager, leading our strategy implementation, and Group Design and Sustainability Manager, focusing on the technical improvement of our home designs.  Both new appointments bring significant relevant specialist experience with them and have operated in either housebuilding or the wider sector previously.  We continue to invest in the development and wellbeing our of people and a full update is provided on Page 8 in the Operational update.

Climate change is a key issue within the priority area of "Operations" and we are committing to carbon emission targets consistent with reductions required to keep warming to 1.5°C.  We are in the process of calculating and formalising our precise targets through approval by Science Based Targets Initiative (SBTI).  Vistry Group will adopt 2021 as its baseline being the first full operating year (setting aside the abnormal conditions in 2020) since the Group took its current form following the combination with Linden Homes and Galliford Try Partnerships in January 2020.  The details of these targets will be confirmed during 2022.¹¹

Building standards is a key issue within the "Homes & Communities" section of our strategy and preparing for implementing the Future Homes Standard is an important target on the roadmap to deliver net zero carbon homes.  This year we hand over the first of 54 homes achieving net zero regulated carbon emissions at Europa Way Triangle in Leamington Spa.  Learning from this development has helped us shape our roadmap to delivering net zero carbon homes. The roadmap has been developed using the UK Green Building Council (UKGBC) definition for net zero carbon, and the target dates are as follows:

1. Zero Carbon 'Ready' by 2025:  This will be the Future Homes Standard of 75-80% reduction in carbon emission (from 2013 Part L baseline)

2. Net Zero Carbon Homes (in-use) by 2030: The designed carbon emission rate is 'zero' for regulated energy with grid decarbonisation for unregulated energy

3. Net Zero Carbon Homes (Construction) from 2040: Carbon emissions associated with building homes are zero, including the emissions from the building's products and construction operations

This is consistent with our Sustainability update issued on 3 September which also included further detail.

Current trading and outlook

We have had a positive start to the second half with customer interest and sales remaining strong.  The Group's forward sales position has further strengthened with 96% of forecast FY 21 total Housebuilding units and Partnership mixed tenure units secured, significantly ahead of the forward sold position in prior years, and totalling £2.1bn. The Partner Delivery forward order book totals £890m with 96% of forecast FY 21 revenue secured.  With this strong forward sold position, the business is very focused on optimising prices in the second half.

We continue to work closely with our supply chain to best manage any ongoing pressures.  We have full visibility on our material requirements out to the end of FY 21 and an agreed supply programme in place.

The Group is well positioned for the full year and we have increased our expectations for adjusted profit before tax to c. £345m⁴, 5% ahead of current consensus expectations⁷.

Operational update

Trading performance

Looking at the performance versus proforma H1 19, the Group's adjusted revenues¹ increased 4% in FY 21 to £1,259m (H1 19 proforma: £1,208m).  Housebuilding revenues are back at their proforma H1 19 levels with Partnerships increasing revenues significantly from proforma H1 19, driven by a rapid increase in higher margin mixed tenure revenues.

We achieved a strong private sales rate of 0.76 average sales per site per week in H1 21 whilst successfully transitioning to the new Help to Buy scheme designed for first time buyers only in Q2 and importantly, have seen sustained demand for units scheduled to complete in Q4 2021, post the end of the Stamp Duty Holiday.  Alongside this we have seen sustained house price inflation in the period across all geographies.

Looking year on year, total Housebuilding completions increased to 3,126 (H1 20: 1,235) including 604 (H1 20: 169) JV units.  Of this 2,294 (H1 20: 975) completions were private units and 832 (H1 20: 260) affordable units.  Total Housebuilding average selling price was £301k (H1 20: £294k) with a private average selling price of £351k (H1 20: £332k).  Housebuilding sold from, on average, 145 sites in the first half and we expect this to remain stable for the full year.

Housebuilding delivered a strong improvement in gross margin with adjusted housebuilding gross margin² improving to 21.8% (H1 20: 14.1%) and to 22.0% excluding land sales.

Partnerships made excellent progress in the first half with its strategy of rapidly growing higher margin mixed tenure revenues, increasing to 895 units (H1 20: 489) including 463 (H1 20: 190) JV units.  Mixed tenure average selling price was £245k (H1 20: £222k).  The business has been growing the number of sales outlets all year and is currently selling on 35 sites with further growth expected to c. 40 at the full year.  Partner delivery saw a c.3 times increase in land led activity in the first half versus H1 20, with Partner delivery revenue of £227m (H1 20: £223m) in-line with our expectations.

Partnerships delivered a 5.1 percentage points improvement in adjusted operating margin³ to 9.1% (H1 20: 4.0%).

Quality and customer service

Delivering high quality homes and excellent customer service remains a key priority.  The Group maintained its 5-star HBF Customer Satisfaction Rating for 2020 and is pleased to see a further improvement in the latest quarterly data with our 12-month rolling score increasing to 92.6%.

More recently we are delighted to have been nominated as finalists in five categories for the Housebuilder Awards, the highest number of any housebuilder.

We launched our new single Vistry Customer Journey across all three of our brands, Bovis Homes, Linden Homes and Drew Smith in the period.  The journey has 16 key steps with multiple points of contact with the customer during the build phase, including Meet the Builder, Plot Visit, Home Demonstration and a six-month review.  All customer updates and communication are managed through a centralised web-based customer portal.
 

People

Investment in the development and training of our people to ensure a committed, motivated, and engaged workforce is a key priority and most recently we have introduced a mentoring programme to encourage personal development.  We continue to invest in our online training platform to ensure our training can be delivered as successfully virtually, with a key focus in the first half on safety, health and environment (SHE) training.

Our focus on jobs and training extends beyond improving learning and development for our people and aims to support both young people not in employment, education or training and the long term unemployed into employment in the construction sector through our on-site skills academies.  We have created 8 academies to date with a further 9 planned for 2022 and over 600 learners have completed and gained full work-ready qualifications.  In addition, we currently have a total of 130 apprentices across the Group and have a programme established to recruit c. 100 additional trainees, spread equally across our 23 business units during the second half.

We have an active charity partnership with Mind and this year we have trained an additional 30 mental health first aiders, taking the total up to 115 across the Group.  We have launched a Diversity and Inclusion ("D&I") Committee to lead the development and delivery of the agenda and to monitor key areas of performance.  A working group has also been established and has led several initiatives during the year.  A key step for the Group has been the introduction of the D&I module into our Peakon staff survey, which is providing invaluable insights into the make-up of our team, and the experience of working at Vistry from diverse perspectives.

Our most recent Peakon engagement survey in July 2021 reported a further improvement in the Group score to 8.1, up from 7.9 in January and compares to an industry benchmark of 7.6.

As previously announced, Ashley Steel joined the Board as a Non Executive Director in June of this year.  Ashley is a highly experienced non-executive director and committee chair across a range of sectors and has extensive experience of advising listed companies on strategy.  Additionally, Clare Bates was appointed General Counsel and Company Secretary during the period and Martin Palmer stepped down as Company Secretary in June.  Michael Stansfield has advised the Board that he wishes to resign as a Non-Executive Director of the Company with effect from 30 September 2021.

Land

The Group had a successful six months in the land market increasing the size of its overall landbank by 1,815 plots to a total of 42,033 plots.

In the half, we acquired our first site jointly between Housebuilding and Partnerships, leveraging the mix of business models to secure a 1,500 unit project south of Peterborough.  The deployment of the high return Partnerships approach, utilising efficient forward sales, alongside Housebuilding's traditional higher margin model, enables us to acquire and develop this 166 acre site, using three brands, without recourse to dilutive land sales to competitors.  Since the period end we have secured another similar project of 45 acres and 620 units in Kenilworth, which we will develop in joint venture with Warwick District Council, who are lending the majority of development funding.

Housebuilding secured 4,143 plots across 20 developments in the period and has excellent visibility on land, with 100% of land required for forecast FY 22 completions now secured.  Housebuilding has a 4.9 year land supply¹³, slightly above our long term target of a 3.5 to 4.0 year supply.

Partnerships has stepped up its land acquisition to support its strategy of delivering rapid growth in higher margin mixed tenure revenues and expects to invest at least £100m in mixed tenure land, WIP and joint ventures in both FY 21 and FY 22.  In the period, Partnerships secured 1,499 plots on 8 sites for mixed tenure development and has 98% of land required for forecast FY 22 mixed tenure completions secured.

Strategic land is a key source of land for both Housebuilding and Partnerships and with our combined business model we are in a unique position to maximise the benefits and returns from this valuable asset, particularly on larger strategic sites.  In the period, we secured options over 4,660 strategic land plots across 6 developments and have a strong pipeline.
 

Balance sheet and liquidity

The Group net cash position of £31.6m⁵ as at 30 June 2021 compares to a net debt position of £357.3m as at 30 June 2020 and reflects the strong first half trading and ongoing robust working capital management.

We expect Group month-end average net debt for FY 21 to be less than £125m and are targeting a net cash position of c. £225m at 31 December 2021 (31 December 2020: £38.0m net cash).

 

Group strategy

Key to our strategy is maximising the strengths and opportunities from our combination of Housebuilding and Partnerships assets.  The Group holds a unique market position with market reach and a strong capability across all housing tenures and is a leading provider of high demand, high growth affordable housing.

We have three clearly established housing brands; Bovis Homes and Linden Homes are national and used across the country whilst Drew Smith is focused on our developments in the South.  We are planning to launch a third national brand in the next 12 months.  Our product range allows us to match customers to the right product and brand for them, whilst achieving higher absorption rates.  This broad market reach and multi branded strategy provides a unique competitive position for Vistry to maximise returns on larger developments including higher margin strategically sourced land.

With Housebuilding and Partnerships focused on driving profitability and returns, the Group is targeting sector leading return on capital employed in the medium term.
 

Housebuilding

Following the successful operational integration of Bovis Homes and Linden Homes, the Housebuilding business is operating well across all areas and positioned to deliver increased returns.  We are still maximising the benefits of the combination through the ongoing development of common systems and processes to deliver best practice.

The operating structure is set to deliver controlled volume growth to c. 8,000 units in the medium term with the business also expecting to reduce the proportion of completions from JV developments.  The business is focused on increasing delivery from higher margin strategic land and is targeting at least 30% of completions from strategic land in the medium term.

Housebuilding is targeting an adjusted gross margin of 25% in the medium term with an improvement to c. 23% in FY 22.  With increased profitability and balance sheet efficiency, the business has a 25% medium term target for ROCE.
 

Partnerships

Partnerships is uniquely positioned to deliver its strategy of rapidly growing higher margin mixed tenure revenues.  The business is making excellent progress towards its targets for FY 22 of delivering revenues in excess of £1bn, an adjusted operating margin of 10%+ and a 40% return on capital employed.

The accelerated growth is supported by the division's 11 operating regions with new operating regions being planned for delivery from FY 23.  The Group's land capability, including strategic land, will support the growth in higher margin mixed tenure revenues.

Partnerships was delighted to have been selected recently as a strategic partner by Homes England for its Affordable Homes Programme (2021-2026), the only listed developer to be included in the programme.  Partnerships has been allocated a five-year grant programme totalling £83m to deliver 1,474 affordable homes across the country outside of London.  It is a great opportunity to accelerate the delivery of much-needed affordable homes and supports our ambitious medium term growth plans for higher margin mixed tenure revenues.

Medium term we believe the business and market opportunity could deliver revenue growth of 10 to 15% annually, with the potential for Partnerships to deliver annual revenue of c. £1.6bn in 5 years, alongside an adjusted operating margin of 12%+.
 

Capital allocation and dividends

The Group has a strong balance sheet.  Our priority remains investing in high returning land market opportunities in line with our land investment strategy and growth targets for both Housebuilding and the less capital intensive Partnerships business.

The Board has reviewed the Group's ordinary dividend policy and is pleased to announce an acceleration to a two times dividend cover for FY 21, reflecting the Group's balance sheet strength and its confidence in the Group's unique market position.

Looking ahead, the Board expects to sustain the ordinary dividend cover at two times.  Any surplus capital, following land investment and the payment of the ordinary dividend, is expected to be returned to the Group's shareholders through either a share buyback or special dividend.  The method will be determined by the Board considering all factors at that time.

Financial review

The successful operational integration of Linden Homes and the Partnerships business in 2020 has enabled the Group to take full advantage of strong market conditions in H1 21, delivering improved operating profit on both an adjusted and reported basis at £175.5m³ (H1 20: £21.2m profit) and £139.1m (H1 20: £9.7m loss), respectively. The Group remains in a net cash position at the half year of £31.6m⁵ and has delivered £388.9m of cash over the last 12 months.

In addition to more favourable market conditions in H1 21 compared to H1 20, when the full impact of the Covid-19 pandemic was first being realised, the Group is also seeing the benefits of the combined Housebuilding and Partnerships businesses helping to drive improved performance across key metrics against H2 2020.  The Housebuilding adjusted gross margin improved to 21.8%², or 22.0% excluding land sales, from 18.9% in H2 2020 and Partnerships adjusted operating margin improved to 9.1%³ from 8.7% in H2 2020 and 4.0% in H1 20.

Trading performance

Total completions

The Group delivered 5,351 completions¹² during the first half representing a 76.4% increase on the prior year.

Revenue

The increase in completions combined with an Average Selling Price (ASP) of £301k (H1 20: £294k) delivered a total adjusted revenue¹ of £1,259.4m, 90.6% higher than prior year (H1 20: £660.9m).  On a reported basis revenue was £1,102.7m, 81.8% higher than last year (H1 20: £606.4m).

Adjusted gross and operating profit

Adjusted gross profit² is £248.0m in H1 21 (adjusted gross margin²: 19.7%), which compares to £84.7m in H1 20 (adjusted gross margin: 12.8%). H1 20 margin was heavily impacted by Covid-19, including the impact of non-productive site overhead costs being expensed directly to the income statement and costs incurred relating to the closing and reopening of sites as a result of lockdown.

Adjusted operating profit³ was £175.5m (H1 20: £21.2m). Adjusted operating margin³ was 13.9% (H1 20: 3.2%).  Reported operating profit was £139.1m (H1 20: £9.7m loss).

The Group delivered an adjusted profit before tax⁴ of £166.1m (H1 20: £10.3m).

On a reported basis the Group generated profit before tax for H1 21 of £156.2m, comprising operating profit of £139.1m after amortisation of acquired intangibles of £7.1m and exceptional costs of £2.8m,  net financing income of £3.0m and share of JV profit of £14.1m. This compares to £12.2m of loss before tax in H1 20, which comprised £9.7m of operating loss after amortisation of acquired intangibles of £7.1m and exceptional costs of £15.4m, £5.2m of net financing costs and share of JV profit of £2.6m. Exceptional costs relate to post acquisition integration activity. 2021 will be the last year of exceptional costs relating to this activity.

Housebuilding

Housebuilding total completions (including 100% of JVs) included 832 affordable homes representing 27% of total completions.

Strong consumer demand has supported house prices to grow through the first half, with the average sales price for our private homes in Housebuilding having increased 5.7% to £351,000 (H1 20: £332,000) and overall average sales price having increased by 2.4% to £301,000 (H1 20: £294,000).

Included within Housebuilding revenue is £17.0m (H1 20: £5.2m) related to land sales and £0.2m (H1 20: £0.1m) related to the release of deferred income from joint ventures.

Housebuilding adjusted gross profit² of £189.0m and housing adjusted gross margin of 21.8%, reflects the improvement in completions and pricing from consumer demand compared to H1 20 which was heavily impacted by the Covid-19 pandemic, where additional costs to implement safe working practices reduced gross margin available on the smaller number of completions.

As demand has increased and supply chains have come under pressure there has been an increase in material prices towards the end of the first half.  The impact of these increases has been mitigated in part by a number of deals agreed in 2020 utilising the enhanced procurement power of the enlarged business that are fixed in the short term.  Overall, the impact of sales price increases has more than offset the cost increases in the year to date.  Our supply chains for both materials and labour remain a key area of focus for the second half to ensure the Group meets its production plans for the year and manages the cost base.

Housebuilding adjusted operating profit of £151.2m and adjusted operating profit margin of 17.4% takes full benefit of improved gross margin with overheads remaining broadly constant at £37.5m (H1 20: £40.4m).

Partnerships

Adjusted revenue from Partnerships in the period totalled £390.6m (H1 20: £311.4m) made up of £226.7m from Partner Delivery (H1 20: £223.2m) and £163.9m from mixed tenure operations (H1 20: £88.2m).

Partnerships sold a total of 895 units (H1 20: 489 units) from its mixed tenure operations, including JVs, with an average selling price of £251k (H1 20: £222k) and Partner Delivery revenue generated equivalent units of 1,330 (H1 20: 1,310 units).

Adjusted operating profit of £35.5m (H1 20: £12.4m) and adjusted operating profit margin of 9.1% (H1 20: 4.0%) reflects increased completions and overheads only increasing slightly compared to H1 20.

Exceptional and Group costs

The reported Group segment of the business includes the non-underlying exceptional costs of £2.8m related to the acquisition. The Group segment also reports direct PLC costs totalling £11.3m (H1 20: £6.1m), including the costs of the PLC Board, share based payments and related items. The key drivers of the increase in 2021 are increased share based payment charges of £2.2m in H1 21 (H1 20: £0.3m) and a bonus charge of £1.1m (H1 20: £nil).
 

Financing and Taxation

Net financing income during the first half was £3.0m (H1 20: £5.2m net charges).  Net bank interest and commitment fees were £4.5m (H1 20: £7.9m), as a result of lower net debt during 2021. We incurred a £2.6m charge (H1 20: £3.4m), reflecting the imputed interest on land bought on deferred terms.  Financial income of £11.5m (H1 20: £7.3m) is primarily generated on loans made to JVs.

The Group has recognised a tax expense of £34.8m representing 22.3% of the profit before tax (2020: tax credit of £0.5m at an effective rate of 4.7% loss before tax).  The tax rate is driven primarily by the impact of the corporate tax rate change in April 2023 that leads to a restatement of deferred tax which is expected to unwind at 25% rather than 19%, and a prior year adjustment. Whilst the Government are due to introduce the Residential Property Developer Tax, as this has not been enacted, no impact of these changes has been considered.  The Group has a current tax liability of £1.4m in its balance sheet as at 30 June 2021 (31 December 2020: asset of £14.4m).   
 

Related party transactions

All related party transactions are disclosed in Note 9 to the interim financial statements.
 

Dividends and earnings/loss per share

The Board determined on 7 September 2021 that an interim dividend of 20p will be paid for the first half of 2021.

Both basic EPS of 54.8p (H1 20 restated⁹: LPS of 5.3p) and basic EPS before exceptionals and amortisation of acquired intangibles of 59.0p (H1 20 restated⁹: LPS of 4.9p) have increased year on year, by 60.1p and 63.9p respectively.

Net Assets and Cash flow

As at 30 June 2021, net assets of £2,285.0m were £89.9m higher than at the start of the year. Net assets per share as at 30 June 2021 were 1,028p (31 December 2020: 988p).

Goodwill and intangibles totalled £684.1m at 30 June 2021 (31 December 2020: £691.1m).

Tangible net assets¹⁴ increased from £1,504.2m at 31 December 2020 to £1,600.9m at 30 June 2021.

Within tangible net assets, inventories increased during the half year by £121.7m to £1,958.3m, driven primarily by land acquisitions in the period.

Trade and other receivables increased by £19.5m.  Trade and other payables increased by £49.8m as a result of increased site related accruals and includes land creditors which increased by £52.8m to £376.0m (31 December 2020: £323.2m) due to the resumption of land acquisitions after a proactive decision in H1 20 to pause expenditure on new land in response to Covid-19.

As at 30 June 2021 the Group's net cash balance was £31.6m⁵.  Having started the year with net cash of £38.0m, the Group generated an operating cash inflow before land expenditure of £237.7m (2020: £1.5m). Net cash payments for land investment were increased at £171.3m (2020: £84.0m), again reflecting the Group's resumption of land acquisitions following a proactive decision in H1 20 to pause expenditure on new land as a response to Covid-19. Investing cash outflows totalling £12.0m includes investments in and loans made to Joint Ventures and acquisition of property, plant and equipment offset by distributions from Joint Ventures, financing cash outflows of £52.8m includes £44.3m of dividends paid in H1 21 and principal lease payments of £8.5m.

At 30 June 2021 the Group had borrowing facilities of £770m, including a 4 year committed revolving credit facility of £410m, a 2 year revolving credit facility of £40m, £150m of 2 year term loans, a £100m US Private Placement facility and £70m of additional facilities.  There is a further £8m facility which is fully drawn down with Homes England for one of the Group's subsidiaries.

Land Bank

Housebuilding Land Bank

The average selling price of all units within the consented land bank decreased over the year to £302,000, 3.5% lower than at 30 June 2020. The estimated embedded gross margin in the consented land bank as at 30 June 2021, based on prevailing sales prices and build costs is 24.5%.

The Housebuilding land bank including joint ventures of 31,896 plots as at 30 June 2021 represents 4.9 years of supply based on the short term completion volume of 6,500 per year.  The land bank reflects our strategy to deliver controlled volume growth to c. 8,000 Housebuilding completions per year in the medium term and is slightly ahead of our target land bank size of 3.5 to 4.0 year supply.

The 3,126 plots that legally completed in the half year were more than replaced by a combination of site acquisitions and conversions from our strategic land pipeline.  Based on our appraisal at the time of acquisition, the new additions, on average are expected to deliver a future gross margin and ROCE in excess of 25%.  In addition to the acquisitions and conversions, during the period a further 462 plots were conditionally contracted on 4 sites.

Partnerships Land Bank

The average selling price of all units within the consented land bank at the period end was £272,000.  The estimated embedded gross margin in the consented land bank as at 30 June 2021, based on prevailing sales prices and build costs is 19.1%.

The Partnerships land bank including joint ventures of 10,137 plots as at 30 June 2021 reflects our strategy to grow the level of mixed tenure development in the medium term.

The 895 mixed tenure plots that legally completed in the half year were replaced by acquisition of 846 plots and a further 653 plots were conditionally contracted on 4 sites. Based on our appraisal at the time of acquisition, the new additions, on average are expected to deliver a future gross margin in excess of 17% and ROCE of 40%.

Strategic Land

During the year 418 plots have been converted from the strategic land pipeline into the consented landbank.  A further 4,660 plots were contracted under options and planning consent gained on 310 over the period.

Risks and uncertainties

The Group is subject to a number of risks and uncertainties as part of its activities.  The Board regularly considers these and seeks to ensure that appropriate processes are in place to manage, monitor and mitigate these risks.

The directors consider that the principal risks and uncertainties facing the Group remain those as outlined in the 2020 annual report, pages 50 to 55, which were: economic and sales environment, materials and subcontract labour, project delivery, customer service, people, change and business continuity, health, safety and environmental, sustainability, liquidity and funding; and increased regulation.

Through companywide engagement as part of our risk oversight committee, four of these principal risks were assessed in greater detail to ensure the Group is well equipped to deal any potential increased risk during 2021:

·    Materials and subcontract labour: The first half of the year was challenging in terms of some material supplies, subcontractor availability and pricing pressures.   This risk was managed through existing group deals that provided certainty of supply, alongside a flexible approach to sourcing that ensured no significant issues in terms of production.  We expect the supply risk to reduce during the 2nd half of the year but will continue to work closely with our suppliers to ensure that stock levels are maintained and to monitor any potential supply risks and source alternatives where necessary. However, we do remain vulnerable to supply chain availability and a significant shortfall in one part of the supply chain could have a negative impact on the financial out turn for the year.

·    Project delivery: Whilst we achieved our build programme during the first half of the year, the challenges presented by material and subcontractor availability have been assessed in detail to ensure our future plan and contractual commitments can be fulfilled.  Careful monitoring will continue and proactive engagement with our partners to reduce any potential risk is underway.

·    Increased regulation: We are seeing an increase in the level of regulatory risk as the range of additional requirements required for the new Homes Ombudsmen, Quality Code and Future Homes Standard are set out. We continue to invest significantly in terms of preparedness and will continue to embed compliance through our processes, systems and into the homes we build.

·    Sustainability: We recognise the increased reputational risk in any failure to make progress on our wider sustainability and climate change strategy.   Our investment has continued with an internal awareness campaign, IT system and senior skilled resourcing in place to support better central coordination and ensure all parts of the group are delivering against the commitments we are making.   The detail set out in the wider announcement will be fully audited going forward to ensure adequate progress is being made.

The Executive Leadership Team continues to be focussed on managing the business through Covid-19 to protect the health and wellbeing of our employees, customers, suppliers and wider society, as well as balance the protection of profitability and preservation of operating cash flow with the long-term needs of the Group.
 

Group income statement

Comparative EPS figures have been restated to include the impact of the bonus share issues in 2020 in order that EPS is comparable year on year, in accordance with IAS 33. This is detailed in note 1 to the financial statements.

Group statement of comprehensive income

These condensed consolidated financial statements were approved by the Board of Directors on 7 September 2021.
 

Group statement of changes in equity

1 Basis of preparation

Vistry Group PLC (the “Company”) is a company domiciled in the United Kingdom. The consolidated financial statements of the Group for the six months ended 30 June 2021 comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in joint ventures.

The condensed consolidated interim financial statements were authorised for issue by the directors on 7 September 2021. The financial statements are unaudited but have been reviewed by PricewaterhouseCoopers LLP, the Company's auditors.

The condensed consolidated interim financial statements do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

The figures for the half years ended 30 June 2021 and 30 June 2020 are unaudited. The comparative figures for the financial year ended 31 December 2020 are an extract from the Group's statutory accounts for that financial year, which have been delivered to the Registrar of Companies. The report of the auditors of these statutory accounts was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

The Group consolidated financial statements include the financial statements of the Company and all of its subsidiary undertakings. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns though its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.  

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary are the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition costs are expensed as incurred as required by IFRS 3 "Business combinations".

The preparation of condensed financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The prior year EPS has been restated to include the impact of the bonus issue of 5.7m shares in January 2020 and 4.3m shares in July 2020 in order that EPS is comparable from period to period. This is in accordance with the requirements of IAS 33. Judgements and estimates made by management in the application of adopted International Financial Reporting Standards (IFRSs) that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in following years have been reviewed by the directors and remain those published in the Group's consolidated financial statements for the year ended 31 December 2020.

These condensed consolidated interim financial statements have been prepared on the basis of the policies set out in the 2020 Group Annual Report and Accounts and in accordance with UK adopted IAS 34 and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority. The condensed consolidated interim financial statements have been prepared by applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2020. The one exception is tax, which is calculated based on the estimated full year effective tax rate at the half year.

The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2020 which were prepared in accordance with IFRS in conformity with the requirements of the Companies Act 2006 and IFRS adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

For the year to 31 December 2021 the Group Annual Report and Accounts will be prepared in accordance with IFRS as adopted by the UK Endorsement Board - this change in basis of preparation is required by UK company law for the purposes of financial reporting as a result of the UK's exit from the EU on 31 January 2020 and the cessation of the transition period on 31 December 2020. This change does not constitute a change in accounting policy but rather a change in framework which is required to ground the use of IFRS in company law and there will be no impact on recognition, measurement or disclosure between the two frameworks in the period reported.

There are no new standards effective for the first time in the period beginning 1 January 2021 which will have a material impact on the Group's reported results.

Goodwill impairment

The acquisition of Linden Homes and the Partnerships business in 2020 resulted in the recognition of goodwill and acquired intangible assets for the Group.

In order to assess whether goodwill and intangible assets require an impairment, an estimate must be made for the value in use of the cash generating units ("CGUs") which have goodwill allocated to them. The estimate for the value in use requires the calculation of a discounted cash flow, reflecting the future expected cashflows from the relevant CGUs. Goodwill must be reviewed on at least an annual basis for impairment, or earlier in the event that there is an indication of possible impairment.

The goodwill recognised by the Group at 30 June 2021 reflects the goodwill on acquisition of Linden and Partnerships on 3 January 2020. Details of the Group's goodwill impairment review are disclosed on pages 177 to 178 of the 2020 Group Annual Report and Accounts.

No indicators of impairment have been identified at 30 June 2021; a full goodwill impairment review will be conducted during the second half of the year and the details will be disclosed in the 2021 Group Annual Report and Accounts.

Covid-19

In light of the continuation of the Covid-19 pandemic the Group has considered whether any impairment of goodwill, intangibles, receivables or inventories is appropriate, and has concluded that none is required. All developments have remained active in H1 21. The value in use of the CGUs is not expected to be significantly impacted by the pandemic as the Group's strategy at the time of the acquisition remains in place despite Covid-19 causing some short term delays to the plan and therefore no impairment of assets is required. No impairment indicators have been identified relating to Covid-19 or other factors.

Going concern

The Group has prepared a cashflow forecast to confirm the appropriateness of the going concern assumption in these interim financial statements. The forecast was prepared using a likely base case and a downside sensitivity scenario. In the downside scenario the Group have assumed decreased affordability, leading to reduced demand for housing and falling house prices. In both the base case and the downside sensitivity scenario, the forecasts indicated that there was sufficient headroom and liquidity for the business to continue based on the facilities available to the Group. In each of these scenarios the Group was also forecast to follow the required covenants on the aforementioned borrowing facilities. Consequently, the Directors have not identified any material uncertainties to the Company's ability to continue as a going concern over a period of at least twelve months from the date of the approval of the financial statements. As such, the Directors have concluded that using the going concern basis for the preparation of the financial statements is appropriate.

The Board continues to take prudent decisions to best support the business through this period of uncertainty, including measures to protect the Group's cash position, liquidity and maintain a robust balance sheet.

2 Seasonality

In common with the rest of the UK housebuilding industry, activity occurs year round, but there are typically two principal selling seasons: spring and autumn. As these fall into two separate half years, the seasonality of the business is not usually pronounced, although it is biased towards the second half of the year under normal trading conditions.

2020 did not reflect normal trading conditions and seasonality trends as a result of the Covid-19 outbreak during the first half of the year. The 2020 spring selling season was significantly impacted by the pandemic and increased the bias towards the second half of the year as a result of reduced trading in the first six months. In 2021 trading conditions and seasonality is back in line with expected trends.

3 Revenue

4 Segmental reporting

All revenue and profits disclosed relate to continuing activities of the Group and are derived from activities performed in the United Kingdom.

The Chief Operating Decision Maker (CODM), which is the Board, notes that the Group's main operation is that of a housebuilder and it operates entirely within the United Kingdom. The Board identifies two separate segments, having taken into consideration IFRS8 criteria - Housebuilding and Partnerships. Segmental reporting is presented in respect of the Group's business segments reflecting the Group's management and internal reporting structure and is the basis on which strategic operating decisions are made by the Group's CODM.

The Housebuilding segment develops sites across England, providing private and affordable housing on land owned by the Group or the Group's joint ventures. Housebuilding offers properties under both the Bovis and Linden brand names.

The Partnerships segment specialises in partnering with housing associations and other public sector businesses across England, including London, to deliver either the development of private and affordable housing on land owned by the Group or the Group's joint ventures, or to provide contracting services for development. The Partnerships segment operates under the Vistry Partnerships and Drew Smith brand names.

Segmental adjusted operating profit and segmental operating profit include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Central head office costs are allocated between the segments where possible, or otherwise reported within the separate column for Group items together with exceptional items.

Segmental tangible net asset value includes items directly attributable to the segment as well as those that can be allocated on a reasonable basis, with the exception of investments in joint ventures, goodwill and intangible assets, net cash or debt, retirement benefit assets/liabilities and tax balances payable/receivable.

During H1 21, two development sites were transferred from the Housebuilding to the Partnerships operating segment due to their closer alignment with the Partnerships commercial proposition and their build now being actively managed by Partnerships staff. The impact of the transfer on the adjusted gross margin for Housebuilding was to increase it by 10 bps and there was no impact on adjusted operating margin for Partnerships.

Adjusted financial results include share of joint ventures and adjusted gross profit is stated including other operating income.

(a)   Segmental financial performance

(b)   Segmental financial position

5 Exceptional items

Exceptional items are those which, in the opinion of the Board, are material by size and irregular in nature and therefore require separate disclosure within the Income Statement in order to assist the users of the financial statements in understanding the underlying business performance of the Group.

In 2020 the Group completed the acquisition of Linden and Partnerships from Galliford Try PLC. In 2020, exceptional expenses incurred in relation to this transaction included legal, financing and accounting advisory services, transaction insurance costs, as well as costs directly related to the integration and restructuring of the Group as a result of the Acquisition, including the cost of rebranding, redundancies and office closures. In the half year ended 30 June 2021, administrative expenses relating to acquisition include technology integration costs, legal expenses, procurement process and contract integration costs and rebranding expenses.  

In 2020, exceptional expenses were also incurred in relation to legacy property building safety which reflect estimated costs relating to finished developments in relation to potential build defects including building fire safety. The Group has undertaken a review of all of its current and legacy buildings where a potential liability has been identified and has provided for the expected costs of any remedial works that may be required. This has been reassessed in H1 21 and no further provisions have been deemed necessary.

Tax on exceptional items in H1 21 was £0.5m (H1 20: £2.4m, FY 20: £5.9m).

6 Earnings / (loss) per share

Profit / (loss) attributable to ordinary shareholders

Earnings per share

Weighted average number of ordinary shares

Basic earnings per share

Basic earnings per ordinary share for the six months ended 30 June 2021 is calculated on a profit attributable to equity holders of £121,382,000 (H1 20: loss after tax of £11,665,000; FY 20: profit after tax of £76,813,000) over the weighted average of 221,579,615 (H1 20 restated: 220,398,014; FY 20: 220,916,654) ordinary shares in issue during the period.

Diluted earnings per share

The calculation of diluted earnings per share at 30 June 2021 was based on the profit attributable to equity holders of £121,382,000 (H1 20: loss after tax of £11,665,000; FY 20: profit after tax of £76,813,000).

The Group's diluted weighted average ordinary shares potentially in issue during the six months ended 30 June 2021 was 222,507,940 (H1 20 restated: 220,551,432; FY 20: 221,142,212).

The average number of shares is increased by reference to the average number of potential ordinary shares held under option during the year. This reflects the number of ordinary shares which would be purchased using the aggregate difference in value between the market value of shares and the share option exercise price and fair value of future employee services. The market value of shares has been calculated using the average ordinary share price during the year. Only share options which are expected to meet their cumulative performance criteria have been included in the dilution calculation.
 

7 Dividends

The following dividends per qualifying ordinary share were settled by the Group:

The Board determined on 7 September 2021 that a dividend of 20 pence will be paid for the first half of 2021.

A final dividend of 20 pence per share was paid on 21 May 2021 in respect of 2020 following approval by shareholders at the AGM.

8 Financial Instruments

Fair values

There is no material difference between the carrying value of financial instruments shown in the balance sheet and their fair value.

Estimation of fair values

The following summarises the major methods and assumptions used in estimating the fair values of financial instruments:

Land purchased on extended payment terms

When land is purchased on extended payment terms, the Group initially records it at its fair value with a land creditor recorded for any outstanding monies based on this fair value assessment. Fair value is determined as the outstanding element of the price paid for the land discounted to present day. The difference between the nominal value and the initial fair value is amortised over the period of the extended credit term and charged to finance costs using the 'effective interest' rate method, increasing the value of the land creditor such that at the date of maturity the land creditor equals the payment required.

Bank and other loans

Fair value is calculated based on discounted expected future principal and interest flows.

The maturity date for the Group's £50m term loan was amended on 23 February 2021 from March 2021 to January 2023. As a result, this balance was shown as current at 31 December 2020 and is now presented as non-current at 30 June 2021.

Trade and other receivables / payables

Other than land creditors, the nominal value of trade receivables and payables is deemed to reflect the fair value. This is due to the fact that transactions which give rise to these trade receivables and payables arise in the normal course of trade with industry standard payment terms.

9 Related party transactions

Transactions between fellow subsidiaries, which are related parties, have been eliminated on consolidation, as have transactions between the Company and its subsidiaries during this year.

Transactions between the Group, Company and key management personnel in the half year ended 30 June 2021 were limited to those relating to remuneration, which will be disclosed in the directors' remuneration report published in the Group Annual Report and Accounts 2021.

Mr Greg Fitzgerald, Group Chief Executive, is non-executive Chairman of Ardent Hire Solutions ("Ardent"). The Group hires forklift trucks from Ardent.

Mr Graham Prothero, Chief Operating Officer, is non-executive Director and Chair of the Audit Committee of Marshalls PLC. The Group incurs costs with Marshalls PLC in relation to landscaping services.

Ms Katherine Innes Ker, Independent non-executive Director, is a Non-Executive Director of Forterra PLC and Vistry Group PLC. The Group incurs costs with Forterra PLC in relation to the supply of bricks.

Mr Ian Baker is the Managing Director of Baker Estates Ltd where Mr Greg Fitzgerald is a shareholder and Director. The Group received advisory services from Ian Baker's consultancy company IB (SW) in the prior year.

Mr Ian Tyler, Non-Executive Chairman, is the Chairman of Affinity Water Ltd and a Non-Executive Director of BAE Systems PLC. The Group received water services and incurred car parking charges with these companies, respectively, in the period.

The total net value of transactions with related parties were as follows:

Transactions between the Group and its joint ventures are disclosed as follows:

Sales to related parties, including joint ventures, are based on normal commercial terms available to unrelated third parties. The loans made to joint ventures are all on normal commercial terms, bear interest at rates of between 3.5% and 5.1%; all balances with related parties will be settled in cash.

There have been no other related party transactions in the half year which have materially affected the financial performance or position of the Group, and which have not been disclosed.

10 Reconciliation of net cash flow to net cash

11 Alternative performance measures

The Group uses alternative performance measures which are not defined within IFRS. The Directors use these alternative performance measures, along with IFRS measures, to assess the operational performance of the Group.

The definition and reconciliation of the financial alternative performance measures used to IFRS measures, are shown below:

Adjusted revenue

Adjusted revenue is defined as revenue including share of joint ventures' revenue:

Adjusted gross profit

Adjusted gross profit is defined as gross profit including share of joint ventures' gross profit, plus other operating income and before exceptional cost of sales:

Adjusted operating profit

Adjusted operating profit is defined as operating profit including share of joint ventures' operating profit, before exceptional expenses and amortisation of acquired intangibles:

12 Business combinations

On 3 January 2020, the Group acquired the Linden and Partnerships businesses from Galliford Try PLC for a consideration of £1,233.5m. This investment in subsidiaries has been reflected in the Company balance sheet shown on page 148 in the 2020 Group Annual Report and Accounts.

The acquisition has positioned the Group as a top five national housebuilder by volume, expanded the Group's presence across the UK and into Yorkshire and established the Group as one of the leaders in the highly attractive, high-growth partnerships business.

The acquisition was of 100% of the share capital and control of the holding companies Vistry (Jersey) Limited (formerly Goldfinch (Jersey) Limited) and Vistry Partnerships Limited (formerly Galliford Try Partnerships Limited) and all of their subsidiaries, which are identified in Note 5.16 of the 2020  Group Annual Report and Accounts.

Details of the purchase consideration, the net assets acquired and goodwill at 3 January 2020 are as follows:

The share consideration included 63,739,385 shares with nominal value of £0.50 per share. £823.5m has been recognised within the merger reserve in relation to these consideration shares issued, being the excess of the share price on the date of issue over nominal value of the shares.

In addition to the above cash and share consideration, the Group assumed a liability with fair value of £108.2m for notes payable in relation to the acquisition of Partnerships, included within borrowings in the table on the next page.

The assets and liabilities recognised as a result of the acquisition are as follows:

The acquired intangibles include the Linden Homes and Drew Smith brand names, the customer relationships within the Linden and Partnerships businesses, and the secured contracts of the Partnerships business. The acquired intangible assets have estimated useful lives of between 4 and 25 years.

The goodwill for Linden reflects intangible assets which do not qualify for separate recognition including relationships with private customers, and the assembled workforce, in addition to synergies that will be achieved as an enlarged business.

The goodwill for Partnerships reflects their strong position in the market and future prospects, as well as the assembled workforce and synergies that will be achieved as an enlarged business.

None of the goodwill is expected to be deductible for tax purposes.

13 Post balance sheet events

There were no significant post balance sheet events.

14 Further information

Further information on Vistry Group PLC can be found on the Group's corporate website www.vistrygroup.co.uk, including the analyst presentation document which will be presented at the Group's results meeting on 7 September 2021.

Statement of directors' responsibilities

The directors confirm that these condensed consolidated interim financial statements have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

·      an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.

The directors of Vistry Group PLC are listed in the Vistry Group PLC Annual Report for 31 December 2020, with the exception of the following changes in the period: Ashley Steel was appointed on 10 June 2021. A list of current directors is maintained on the Vistry Group PLC website: www.vistrygroup.co.uk

For and on behalf of the Board,

Greg Fitzgerald                                                                                              Earl Sibley

Chief Executive                                                                                             Chief Financial Officer

7 September 2021

Independent review report to Vistry Group PLC

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Vistry Group PLC's condensed consolidated interim financial statements (the "interim financial statements") in the Half year results of Vistry Group PLC for the 6 month period ended 30 June 2021 (the "period").

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

·     the Group balance sheet as at 30 June 2021;

·     the Group income statement and Group statement of comprehensive income for the period then ended;

·     the Group statement of cash flows for the period then ended;

·     the Group statement of changes in equity for the period then ended; and

·     the explanatory notes to the interim financial statements.

The interim financial statements included in the Half year results of Vistry Group PLC have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The Half year results, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Half year results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the Half year results based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the Half year results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements. 

PricewaterhouseCoopers LLP

Chartered Accountants

London

7 September 2021