10 September 2025

Vistry Group PLC

Half year results for the period ended 30 June 2025

Vistry uniquely positioned to support delivery of new Social and Affordable Homes Programme

Full year guidance unchanged

Greg Fitzgerald, Chief Executive commented:

"The Group's first half performance was in line with expectations and we are well positioned to deliver for the full year.  Working with our partners, we have a strong pipeline of development opportunities which will drive our second half performance, with an expected significant step-up in completions and profits.

The Group also made good progress with its target of reducing debt levels, with net debt as at 30 June of £293m significantly better than expectations.

The new Social Affordable Homes Programme provides an unprecedented level of funding for affordable housing over the next 10 years.  Through our Partnership model and commitment to mixed tenure development, Vistry is uniquely placed to maximise this opportunity and play a key role in delivering high-quality affordable homes across the country."

¹As disclosed in the FY 24 results, the H1 24 figures have been restated to reflect cost forecasting issue in the South Division.  This adjustment reduced both adjusted and reported profit before tax for H1 24 by £65.5m.

2Adjusted measures are defined and reconciled to the nearest statutory measure in note 19 of the condensed financial statements.

Highlights

·    Group delivered adjusted operating profit of £124.4m (H1 24: £161.8m) and adjusted profit before tax of £80.6m (H1 24: £120.7m), in line with expectations

·    Reported operating profit was £58.1m (H1 24: £114.1m) and reported profit before tax was £40.9m (H1 24: £91.2m)

·    Total completions of 6,889 (H1 24: 7,792) units, 12% down on the prior year, reflecting the expected lower level of partner demand in the first half

·    Total average selling price increased by 4% to £283k (H1 24: £273k) reflecting changes in mix with Group adjusted revenues of £1,853.2m (H1 24: £1,974.5m), down 6% on prior year

·    Net debt as at 30 June 2025 of £293.1m (30 June 2024: £322.0) significantly lower than expectations and down on the prior year despite a £91.9m higher year-on-year opening position

·    Successful completion of refinancing, with £900m facilities extended to April 2028 on unchanged terms and with strong support from our lending group

New Social and Affordable Homes Programme

·    Government announced an unprecedented £39 billion, 10-year Social and Affordable Homes Programme in June, together with a 10-year social rent settlement and consultation on social rent convergence

·    Vistry's unrivalled capability and proven track record in partnerships housing delivery, uniquely positions us to play a key role in delivering the new Social and Affordable Homes Programme

·    The Group has been working closely with its affordable housing partners to identify development opportunities and has built a strong pipeline of transactions that are expected to complete in the second half, with positive momentum going into 2026

·    Group's recently announced long-term joint venture with Homes England will accelerate the development of large-scale residential sites across the country

Current trading and outlook

·    Group's forward order book totals £4.3bn (5 Sept 2024: £5.1bn) with the Group 88% forward sold for FY 25.  Of this 89% of the Partner Funded sales are forward sold, with more than 100% of the balance of Partner Funded units for the full year covered in our deal pipeline

·    Looking to drive an improvement in our Open Market sales rate in H2 through our sales and marketing initiatives, albeit we remain mindful that demand will continue to be influenced by macroeconomic uncertainties

·    Group's focus on cash performance, including the management of work in progress, is expected to result in a year-on-year reduction in the Group's net debt position as at 31 December 2025

·    Guidance for the full year remains unchanged with the Group expecting to deliver a year-on-year increase in profits in FY 25

There will be an investor and analyst presentation at 8:30am today at Deutsche Numis, 45 Gresham St, London EC2V 7BF.  There will also be a live webcast of this event available on our corporate website at www.vistrygroup.co.uk or via the following link https://brrmedia.news/VTY_HY25

A playback facility will be available shortly afterwards.

For further information please contact:

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.

Chief Executive Review

H1 25 overview

Vistry's first half performance was in line with expectations and the Group is well positioned to deliver for the full year.

After a challenging second half in 2024, the Group's focus has been on stabilisation and ensuring the fundamentals are in place to capitalise on its strategy and remain best positioned to maximise the significant market opportunity we see over the medium term.

The Government's commitment to housing in the June Spending Review, including the £39 billion Social and Affordable Home Programme ("SAHP"), a 10-year social rent settlement and a consultation on rent convergence, was significantly greater than anticipated.  This transformational package injects funding capacity back into the affordable housing sector and will support the delivery of a significant step up in much needed new affordable housing over the next 10 years.  Vistry is uniquely positioned to play a key role in the delivery of this new SAHP and is ready to do so.

As expected, the first half of the year saw lower levels of demand from our affordable housing partners reflecting uncertainty ahead of the June Spending Review, and transitional funding constraints as we move to a new SAHP.  During the period we have been working closely with our partners in developing a strong pipeline of new development opportunities, with a significant step-up in the level of partner transactions expected in the second half of 2025.

In the Open Market, whilst we reported some positive momentum in the first quarter, market conditions softened somewhat in Q2, reflecting increased macro concerns and ongoing affordability challenges, particularly for first time buyers, with expected interest rate cuts being pushed further out.  Ensuring the Group's Open Market offering remains compelling and competitive is a top priority and sales and marketing initiatives include the launch of our new standard product range across our three brands, and the investment in coaching and training for our sales and customer service teams.

The Group made good progress with its target of reducing debt levels in H1 25, with net debt as at 30 June 2025 of £293.1m (30 June 2024: £322.0m) significantly lower than expectations.  Alongside this, we successfully completed our refinancing on 1 July, with facilities extended out to April 2028 on unchanged terms and with strong support from our lending group.

H1 trading performance

The Group delivered a total of 6,889 (H1 24: 7,792) completions in the first half, 12% down on the prior year.  Partner Funded units represented 73% (H1 24: 76%) of total completions with Open Market at 27% (H1 24: 24%).  The Group's sales rate averaged 1.02³(H1 24: 1.21) with total average selling price increasing by 4% to £283k (H1 24: £273k) reflecting changes in mix.  Group revenues totalled £1,853.2m (H1 24: £1,974.5m), down 6% on prior year.

Partner Funded units were down in the first half by 14% to 5,055 (H1 24: 5,884) units.  This decline reflects the expected lower level of demand in the first half from our affordable housing partners due to uncertainty ahead of the June Spending Review and transitional funding constraints.  We have also seen a year-on-year reduction in PRS unit delivery which reflects less opportunity for larger portfolio transactions in H1 25 than in the prior year.

Open Market units were down in the first half by 4% to 1,834 (H1 24: 1,908), the decline reflecting a reduction in average sales outlets in the period to 186 (H1 24: 210), with the Group's open market sales rate in line with the prior year.  There has been some variation in sales performance by region, with the London market continuing to be the most challenging geography.

3Sales rate includes Partner Funded sales (excluding S106 units and 100% Partner Funded developments) and Open Market sales as a proportion of the number of sales outlets across the Group on an average weekly basis

New Social and Affordable Homes Programme

In the June 2025 Spending Review, the Government announced its new Social and Affordable Homes programme totalling £39 billion of funding over a 10-year period.  This represents a significant step up from the £11.5 billion, 5-year programme in place from 2021 to 2026.

Prior to this, the Government announced £2bn of 'top-up' funding in March to support the ongoing investment in new affordable homes during the transitionary period to the new SAHP.  This £2 billion funding forms part of the £39 billion new SAHP, however it is being delivered under the existing affordable homes programme structure so as to maintain build momentum, with the funding requiring start on site by March 2027 and completion by March 2029.

We expect the prospectus for the new SAHP to be launched in October, with funding allocations confirmed in March 2026.  We continue to work closely with Homes England and our affordable housing partners to ensure we are best positioned to maximise delivery and returns under this programme.

The Government also announced a 10-year social rent settlement at CPI +1%, providing certainty of income to Registered Providers from their existing affordable housing stock.  The Government's commitment to implementing social rent convergence is a significant positive, providing a mechanism that allows social rents below the formula rent to increase at a higher rate than the standard CPI +1% cap until they reach the target rent level.  The previous social rent convergence policy came to an end in 2015.

Both of these Government initiatives are extremely significant and give the affordable housing providers a step-change in financial capacity combined with the visibility to plan long term investment in new affordable housing.

In addition, in June, affordable housing providers were given equal access to funding from the Building Safety Fund for buildings over 18 metres.  Importantly, this will facilitate remediation and will increase affordable housing providers' funding capacity for investment in new affordable homes.

Homes England joint venture

The Group is pleased to have recently entered into a long-term investment joint venture with Homes England, the Government's housing and regeneration agency, to accelerate the development of large-scale residential sites across England.  The joint venture, named Hestia, is backed by £150 million of capital investment and is designed to deliver high-quality, mixed-tenure communities at pace and scale. Hestia will play a key role in supporting the Government's ambition to deliver 1.5 million homes within this Parliament.

Hestia will focus on the acquisition and development of strategic sites, each ranging from 400 to 3,000 homes, and will incorporate vital new infrastructure to support thriving communities. In addition, the joint venture will seek to sell parcels of land on our larger sites to SME developers, reflecting both organisations' commitment to supporting the wider housing sector and enabling greater market participation. This partnership marks a significant step forward in delivering sustainable housing growth and unlocking the potential of large-scale sites across the country.

Securing high quality Partnership opportunities

In the first half, the Group secured land and development opportunities totalling 3,113 (H1 24: 8,225) plots across 14 (H1 24: 32) sites.  Since July, our activity in the land market has increased, and we have secured c. 3,000 plots in the second half to date.  Securing large mixed tenure sites, which form the backbone of delivery for a region over a number of years, is a key area of focus.  We were pleased to have secured the Rugeley Power Station site in August for the delivery of 2,300 new homes, with more than 50% being affordable homes and all homes to be timber frame sourced from Vistry Works.  Land acquisitions with a 100% pre-sale agreement are increasingly attractive given the market backdrop, with the margin on such development opportunities enhanced through the land procurement activity.

We are positive on the Government's planning reform with policy and legal changes being implemented to enable the delivery of much-needed new homes across the country.  Green Belt schemes are a focus of applications, with the new grey belt definition effectively fast forwarding a long-awaited wholesale assessment of the Green Belt and enabling development on the land which is contributing least to the Green Belt.

Planning Reforms have yet to filter down through to local decision-making at Planning Committee level or the resourcing of local planning departments, and as a consequence, we remain reliant on the ability to appeal for timely conclusions to our planning applications.  The Planning & Infrastructure Bill will hopefully bridge the gap with strategic level solutions, however, will not be an overnight solution.

Strategic land is an important part of our land supply with the Group targeting c. 20% of completions to be developed on strategically sourced land in the medium term.  The Group had a total of 76,919 (30 June 2024: 75,006) strategic land plots as at 30 June 2025.

Our strategic land team is active across the country with a focus on large, multi-phased sites where we can leverage our proven large projects expertise.  We will look to collaborate with our partners, including strategic partnerships with organisations like Homes England, to access high-volume sites where we can scale quickly and effectively.  In the year to date, we have secured new options over 1,065 strategic land plots with a strong pipeline of opportunities expected to be secured in the near term.

In FY 25 we expect to transfer c. 2,500 plots from our strategic landbank into our owned and controlled landbank and have a further 15,000+ plots currently at a relatively advanced stage on planning which are expected to transfer in the near future.

High quality housing and customer service

Delivering high quality new homes and excellent customer service is paramount, and in March we were pleased to have been awarded a 5-star HBF Customer Satisfaction rating for the sixth consecutive year.  The Group's HBF 8-week Customer Satisfaction score for H1 25 was 93.0% (H1 24: 95.4%), with a 9-month score of 83.4% (H1 24: 80.4%).

We are committed to ensuring our Open Market sales teams provide a high quality experience for our customers, and to driving best practice and efficiency in sales across all areas of our business.  In July, we launched our 'Sales Excellence programme', with all sales directors and managers receiving tailored coaching sessions, and sales consultants attending training days throughout Q3.  More than 350 sales team members will participate in the training representing 3,000 training hours.  The recent release of the new Vistry Sales Manual underpins this training, and quarterly mystery shopping continues to assess and enhance performance.

The Group's Sales Contact Centre, which was established at the start of the year and operated by a team of c. 25 sales consultants, is now fully embedded across our business units.  Its focus is to collect information from our prospects and progress this to making an in-person appointment, with the Contact Centre team working closely with our regional sales teams.  We are seeing some good results around the speed in which we engage with customers on first contact, and have seen an improvement in our conversion rate of first contact to appointment on site.

Build and Vistry Works

The Group operated from an average of 350 (H1 24: 364) build outlets during H1 25 which included 186 (H1 24: 210) active sales outlets.  Build outlets includes sites which are not currently selling to the Open Market either because Open Market sales are yet to commence or have already been completed, and sites which are 100% Partner Funded and therefore have no Open Market sales.

Overall, the availability of building materials remains strong, helping to ease inflationary pressures in the near term, and for FY 25, we continue to expect low single digit build cost inflation.

Vistry's timber frame operations, Vistry Works, are at the core of the Group's operational and sustainability strategy.  Timber frame use drives efficiency with a faster build time of c. six weeks compared to traditional brick and block construction and is shown to reduce embodied carbon by c. 30% over a 60-year timeframe.  Increased use of timber frame will also reduce the Group's dependency on labour over the medium term.

In the first half, Vistry Works manufactured 1,650 timber frame units, up c. 20% on the prior year and expects to deliver c. 4,500 units in FY 25 (FY24: 2,900).  Investment in our three production facilities is now complete, with the final production line at our East Midlands facility coming online in the second half.  The Group will have the capacity to manufacture up to 10,000 timber frame units from its three manufacturing facilities, in addition to floor joists and cassettes, and roof trusses.  We are focused on increasing output to drive efficiency across the new lines, with output forecast to step up again in FY 26 and beyond. 

The Group has successfully completed the factory trial of the Mauer brick cladding system.  This alternative cladding system which has c. 50% less embodied carbon than bricks, will support and complement our timber frame construction, will enable significantly faster build speed, and will reduce our dependency on skilled labour.  In May, we launched our Future Works project at Vistry Works East Midlands where we are trialling the system on two houses, with the next step to implement the system on a select number of plots on a live site in October 2025.  We expect to launch a minimum of 10 new sites utilising the system in FY 26.

As part of our ongoing commitment to sustainable construction and future skills development, we are proud to be launching our new Timber Frame Installer Programme this month, welcoming 15 trainees into the business.  This initiative directly supports the Government's housing targets and addresses a critical skills gap in modern methods of construction.  Through a combination of classroom-based learning and hands-on site experience, the programme will equip new entrants with the technical and safety expertise needed to deliver high-quality timber frame homes at scale.  By building a strong pipeline of skilled talent, we are not only future-proofing our business but also contributing to the long-term resilience of the wider industry.

Technology and innovation

The Group is investing in technology for the future and ensuring we are on track to be building to the Future Homes Standard on all of our developments by January 2028 following a transitional period.  Some of the key highlights from the first half of the year are included below:

-       Vistry Innovation Centre ("VIC") - the VIC highlights key technologies the Group has installed in Part L 2021 homes, and technologies we are currently trialling ahead of the Future Homes Standard.  It has served our exploration stage of transitioning to lower carbon homes well, and we are now focused on the implementation stage of the products, with several live site trials underway.  The VIC continues to be popular with industry bodies, partners, internal teams, suppliers, local authorities and colleges.

-       Octopus Energy 'Zero Bills' - We are delighted to have partnered with Octopus Energy to deliver 'Zero Bills' homes.  This initiative guarantees the occupants of our new homes no energy bills for 10 years through the installation of an air source heat pump, a significant PV array and storage battery, as well as a smarter EV charger.  In the second half of the year we will be delivering the initiative alongside our partner, Citra/Lloyds Living, on our developments at Great Haddon and Langley Park.

Our People

At Vistry, we remain firmly focused on attracting, retaining, and developing the very best talent.  In January 2025, we were proud to be certified as a Top Employer by the Top Employer Institute for the third consecutive year, achieving an impressive score of 94.6%, an increase from the previous year and c. 10% above the TEI benchmark.  We were also honoured to be named one of the Top 50 Inspiring Workplaces in the UK and Ireland for the second year running.

Voluntary turnover increased slightly to 18.1% (H1 24: 15.9%) in the first half, however encouragingly, our stability index improved to 81.6% (H1 24: 78.5%), indicating stronger retention of our valued employees.

Following the launch of our new Culture Framework at the end of 2024, we continue to embed behaviours aligned with our core values of Integrity, Caring and Quality, into every aspect of how we recruit, develop, and retain talent.  Listening to our people remains central to our culture, and we actively foster open, two-way communication through our Regional and Divisional Engagement Forums, as well as our Group-wide People Forum.

Our commitment to diversity and inclusion remains strong.  We have continued our involvement with the HBF Women into Home Building initiative which introduces more women to careers in site management.  We also maintain our partnership with Fertility Matters at Work, supporting employees through fertility-related challenges and reinforcing our inclusive workplace culture.

Social value

We are continually looking at ways to increase our social value offerings and the measurement and reporting of them, ensuring that we meet the demands of our partners and are delivering value for the communities we are creating and working within.

In the year-to-date, the Group has delivered over £60m of local and social economic value.  We are delighted to have already achieved our on-site Skills Academy target for the year, with eight live academies, 432 unique learners completing courses and 1,156 pre-employment training weeks delivered.  Our Class of 2025 Work Experience Week at our Brandon Hall Skills Academy was a key highlight in the first half, with the students immersing themselves in a variety of construction trades, and some of our of Academy learners benefiting from the opportunity to step into leadership roles.

Health and safety

Our Safety, Health and Environmental performance continues to deliver strong results across the business. As at 30 June 2025, our Accident Incident Rate was 213 (30 June 2024: 170), significantly below the HSE industry benchmark of 361, reflecting our ongoing commitment to safe operations.

We remain focused on addressing occupational health risks, particularly those associated with respirable crystalline silica. Over the next 12 months, we will strengthen our efforts through close collaboration with our supply chain, raising awareness, showcasing emerging technologies, and ensuring compliance with the robust control measures we've put in place.

Our site performance metrics, which assess compliance against minimum safety standards, continue to exceed the targets set in the Group Annual Business Plan. This achievement highlights our dedication to maintaining safe working environments and attracting reputable, conscientious supply chain partners.

While damage to buried utility services remains a challenge across the industry, we've made notable progress. Thanks to the adoption of new technologies and a strong safety culture embedded within our build teams and supply chain, we've successfully reduced our service strike incident rate from 342 to 306 over the past year.

Building safety

The Group's building safety provision recognises the Group's commitment to playing its part in delivering a lasting industry solution to building safety and the Group's obligations under the Developer Remediation Contract signed by Vistry in March 2023.  The Group Building safety provision stood at £313.8m (31 December 2024: £324.4m) as at 30 June 2025.

We continue to make good progress with remediation works with 95% of the buildings included in the provision now fully assessed and the completion of remediation work on 20 buildings during the period.

Competition and Market Authority

The Group has proactively engaged with the UK Competition and Market Authority ("CMA") throughout its housebuilding investigation.  In July, the Group confirmed its voluntary commitments offered in response to the potential concerns raised by the CMA.  Vistry will contribute £12.8m of the overall £100m contribution to support the construction of affordable homes across the United Kingdom offered by Vistry and the six other UK housebuilders.

Balance sheet

Cash generation in the period improved with the Group's net debt as at 30 June 2025 at £293.1m (30 June 2024: £322.0m), down on prior year despite a £91.9m higher year on year opening net debt position at the start of the year.  We saw a trend of a steadily improving daily net debt position versus prior year, with average daily debt in Q2 25 lower than in Q2 24.

Shareholder distributions

The Group announced a £75m special distribution to shareholders via share buyback in September 2024 and continues to execute this programme with £16m completed to date.  It is expected this will be concluded in H1 26.  In line with previous guidance, the Board is not proposing any capital distribution in respect of H1 25 earnings.  In the medium term, we expect further shareholder distributions to be announced as we realise the significant market opportunity ahead.

Current trading and FY 25 outlook

The Group's forward order book totals £4.3bn (5 Sept 2024: £5.1bn) with the Group 88% forward sold for FY 25.  Of this 89% of the Partner Funded sales are forward sold, with more than 100% of the balance of Partner Funded units for the full year covered in our deal pipeline.

We are looking to drive an improvement in our Open Market sales rate in the second half through our sales and marketing initiatives albeit we remain mindful that demand will continue to be influenced by macroeconomic uncertainties.

The Group's ongoing focus on cash performance, including the management of work in progress is expected to result in a year-on-year reduction in the Group's net debt position as at 31 December 2025.

Guidance for the full year remains unchanged with the Group expecting to deliver a year-on-year increase in profits in FY 25.

Finance review

As disclosed in the 2024 full-year results, the H1 24 figures have been restated to reflect cost forecasting issues in the Group's former South Division. This adjustment reduced both adjusted and reported profit before tax for H1 24 by £65.5m. Further detail is included in note 2 to the condensed financial statements.

Revenue and completions

Adjusted total revenue decreased by 6% to £1,853.2m (H1 24: £1,974.5m), with total completions 12% lower at 6,889 homes (H1 24: 7,792). On a reported basis, total revenue decreased by 5% to £1,635.6m (H1 24: £1,723.5m). Partner Funded homes accounted for 73% of completions, slightly below H1 24 (76%) but consistent with the full-year 2024. Open Market sales made up the remaining 27%.

Adjusted Partner Funded sales revenue reduced by 10% to £1,123.0m (H1 24: £1,254.3m), reflecting subdued demand from our affordable housing partners ahead of the June Spending Review and the transitional funding constraints. Unit volumes were down by 14% to 5,055 homes (H1 24: 5,884) and build outlets were 4% lower at 350 (H1 24: 364). Despite these headwinds, the Group's strong relationships with partners enabled us to secure new opportunities and maintain operational momentum. The additional funding recently announced for the sector is expected to lead to a substantial increase in volumes in H2.

Within Partner Funded sales, Private Rented Sector (PRS) units were down, with the prior year figures boosted by a significant portfolio transaction with Leaf Living. We are experiencing a more subdued PRS market in the second half of 2025 than we had expected earlier in the year.

Open Market sales experienced some periods of improved demand; however, affordability challenges persisted throughout the first half of the year, with the slower than anticipated cuts to interest rates further impacting buyer confidence. Sales rates were flat year-on-year, with a 2% decline in adjusted revenue to £597.8m (H1 24: £608.0m) and 4% reduction in completions to 1,834 homes (H1 24: 1,908), primarily due to a reduction in the average number of active sales outlets to 186 (H1 24: 210) but partially offset by a higher average selling price.

The Group's overall average selling price rose by 4% to £283k (H1 24: £273k), comprising an increase of 3% for Open Market homes to £389k (H1 24: £376k) and 2% for Partner Funded homes to £247k (H1 24: £241k). The Open Market average selling price uplift was primarily driven by a shift toward larger homes and increased sales in higher-value regions. Sales incentives remained unchanged at up to 5% of the Open Market sales price. The increase in the average selling price for Partner Funded homes was driven by changes in product and geographic mix.

4Where the Group receives Government grant income under the Group's direct grant programmes with funders, this income is included in the average selling price as it is a contribution towards the purchase price of specific affordable plots. No adjustment is needed where our partners receive grant funding under their own programmes as it has no impact on the price paid to the Group. While a significant portion of grant was received in prior periods when milestones were achieved, the income is recognised over time in line with the revenue for delivering the homes. Grant income reduced in the period as fewer direct-funded units were delivered, with partners funding an increased proportion of units under their own programmes.

5 Other non-housing revenue is excluded from the calculation of the average selling price. This comprised revenue from land sales of £74.4m (H1 24: £51.0m), the re-sale of homes taken in part exchange of £47.3m (H1 24: £42.7m) and other sources of £10.7m (H1 24: £18.5m). While this represents a small portion of the Group's total revenue, a further increase in revenue from land sales is expected in the second half of the year (c. £230m for H2 25) as the Group continues to optimise its land bank to enable it to deliver market leading returns on capital.

Adjusted operating profit and margin

As anticipated, margins in the first half reflected a higher proportion of delivery from lower margin sites, including those impacted by the South division issues reported in 2024, than we expect moving forward.  The Group continued to manage build costs effectively through proactive engagement with subcontractors and suppliers with low single-digit inflation across the cost base as a whole. Subdued market conditions limited the ability to offset rising input costs with price growth, which remained broadly flat. We expect margin recovery in the second half from the commencement of new higher margin developments, increased activity in the affordable housing market and operating leverage from higher second half volumes. 

The increase in overheads includes a higher investment in assurance activity and resources, as well as the impact of pay rises and the increase in employer's national insurance contributions.

Adjusted operating profit reduced by 23% to £124.4m (H1 24: £161.8m), resulting in an adjusted operating margin of 6.7% (H1 24: 8.2%). Due to higher exceptional costs and an increased contribution from joint ventures in H1 25, reported operating profit fell more sharply than adjusted operating profit, down 49% to £58.1m (H1 24: £114.1m).

Exceptional items

Exceptional items increased to £19.6m (H1 24: £9.1m), primarily due to the £12.8m voluntary binding commitment made by the Group, alongside six other UK housebuilders, in response to the potential concerns investigated by the UK Competition and Markets Authority (CMA). Other exceptional items included a net expense of £3.5m (H1 24: £3.9m) relating to building safety and £3.3m (H1 24: £5.2m) of restructuring, integration and other costs.

Building safety

The net expense of £3.5m (H1 24: £3.9m), which is included within exceptional items, is stated net of recoveries from third parties of £6.7m (H1 24: £16.8m). The increase to the building safety provision comprised £4.9m for seven further buildings which were identified in the period and a finance expense of £5.3m (H1 24: £3.9m) as the total provision is calculated on a discounted basis. The overall cost estimate across previously identified buildings remained broadly unchanged.

The Group continues to make good progress with remediation. The total amount utilised in the period was £20.8m, with remediation fully completed on 20 buildings and work ongoing on a further 50 buildings. As at 30 June 2025, we were engaged in the pre-start phase of the remediation process for 177 buildings.

As at 30 June 25, the number of buildings where work was ongoing or yet to commence on site was 227 (FY 24: 240).

Net finance expense

Adjusted net finance expense increased 7% to £43.8m (H1 24: £41.1m). While the Group reduced its average daily net debt in Q2, the H1 average was 5% higher year-on-year at £695m (H1 24: £659m). The blended average interest rate on drawings fell to 6.3% (H1 24: 7.2%), driven by a decline in the SONIA rate. Together, these changes resulted in a 12% reduction in net bank interest payable to £25.0m.

The interest expense due to the unwind of land creditor discounting increased by 50% to £11.4m. Land creditors are discounted on initial recognition based on the prevailing discount rate at the time. The rate is reflected in the interest expense as the discount unwinds over the duration of the land creditor. Over the second half of 2024 and into the first half of 2025, the increase in the finance expense was disproportionate to the total land creditors as the proportion of older land creditors, which were discounted at lower rates, is reducing as they are settled.

The increase of 65% in net joint venture interest payable to £5.6m (H1 24: £3.4m) was also principally due to a rise in land creditor discount unwind. 

Profit before tax

Adjusted profit before tax was down 33% to £80.6m (H1 24: £120.7m). Reported profit before tax, which includes exceptional items of £19.6m (H1 24: £9.1m), the amortisation of acquired intangible assets of £19.8m (H1 24: £19.4m) and tax on joint venture profits of £0.3m (H1 24: £1.0m), was down 55% to £40.9m (H1 24: £91.2m). Reported profit before tax fell more sharply than adjusted profit before tax due to higher exceptional items in H1 25.

Tax

The adjusted effective tax rate was 27.9%, resulting in an adjusted tax charge of £22.5m (H1 24: 28.7%, £34.6m). This was lower than the rate of 29.0% that would be derived by applying the statutory tax rate of 25% and Residential Property Development Tax (RPDT) of 4% as RPDT only applies to certain of the Group's profits. The reported effective tax rate was 23.5%, with a reported tax charge of £9.6m (H1 24: £21.8m). The reported rate was lower than the adjusted rate due to the presentation of joint venture tax and the effect of prior period adjustments.

Earnings per share

Adjusted profit after tax reduced by 33% to £58.1m (H1 24: £86.1m). The reduction in adjusted earnings per share to 17.6p (H1 24: 25.2p), was lower, at 30%, due to the benefit of there being fewer shares in issue as a result of the ongoing buyback programme. Reported earnings per share declined by 53% to 9.5p (H1 24: 20.3p), reflecting the impact of exceptional items. 

Capital employed and ROCE

Capital employed increased to £2,645.4m, a rise of 5% on FY 24 but broadly flat compared to H1 24 (FY 24: £2,512.9m, H1 24: £2,630.1m). Average capital employed of £2,579.2m was up 5% compared to FY 24 and 2% on H1 24 (FY 24: £2,461.8m, H1 24: £2,520.4m). The increase in the closing position was driven by growth in work in progress and investment in joint ventures.

While the increase in work in progress in the first half of £99.5m was not dissimilar to our typical seasonal trend, it was less pronounced than would be expected given the rise in activity and unusually high second half revenue weighting expected in 2025. This reflects tighter controls on work in progress at sites and a particular focus on reducing the levels of completed stock. Excluding London, which is typically apartment led and requires large blocks of homes to be completed simultaneously, the Group has achieved a net reduction in finished stock of £46m in H1 25 with continued reductions expected in the second half.

Land decreased by 2% to £1,834.8m (FY 24: £1,875.0m), consistent with the 3% reduction in the owned land bank. While the Group continued to purchase new sites selectively and transferred over 3,000 existing controlled plots into the owned land bank, the utilisation of land for the units delivered in the period, as well as the disposal of a small number of sites that do not suit the Partnerships model, resulted in a lower closing balance. The majority of new sites were acquired on deferred payment terms, with the Group's land creditor balance of £719.7m down 3% on FY 24. The Group has made good progress towards resizing its owned and controlled land bank to c. 4 years of supply.

Net investment in joint ventures increased by 7% in the period to £666.5m to support home completions in H2 and reflecting a slower than anticipated sales rate at our London specific joint ventures.

Other assets and other liabilities both reduced due to the reduction in sales and completion volumes in Q2 2025 compared to Q4 2024.

As a result of the lower adjusted operating profit and higher average capital employed, ROCE reduced by 3.2ppts to 9.6% (H1 24: 12.8%). 

Net debt and cash flow

The Group began the year with net debt of £180.7m, £91.9m higher than at the beginning of the prior year (H1 24 opening net debt £88.8m). Despite lower adjusted profit before tax, the net cash flow for the half year improved by £120.8m versus last year, with a net cash outflow of £112.4m in the period (H1 24: outflow of £233.2m).

As described above, the net investment into work in progress was £99.5m, broadly consistent with the outflow in the prior year of £94.3m. The cash impact of the net reduction in the Group's owned land bank of £40.2m was partially offset by a net reduction in land creditors of £20.2m, leaving a net cash inflow from land activity of £20.0m (H1 24: net outflow of £20.7m). The net outflow from other working capital (receivables and payables) was reduced compared to the prior year due to lower Partner Funded activity in June 25 than in June 24. The prior year cash flow also included the effect of a receivable on a partner deal which completed in H1 24 but was not settled until August 24. The total working capital outflow was £90.4m (H1 24: outflow of £194.4m).

The Group made a further net investment of £32.9m into its joint ventures. This was principally through loans made by the Group, alongside its partners, to fund work in progress in the joint ventures.

The exceptional net cash outflow related to building safety increased to £18.3m (H1 24: £12.2m), with gross spend of £25.0m (H1 24: £29.0m) offset by recoveries of £6.7m (H1 24: £16.8m). The exceptional cash outflow on integration and restructuring was £8.8m (H1 24: £7.1m). The exceptional cash flows differ from the profit or loss statement due to movements in accrued income and expenses. Net spend on building safety is expected to increase to c. £40m in H2 (H2 24: £24.6m).

Tax paid was £10.0m, lower than the prior year and aligned with reduced taxable profits.

Shareholder distributions of £33.1m related to the Group's ongoing share buyback programme.

As at 30 June 2025, total available facilities were £1,130.0m (H1 24: £1,015.7m), with £750.0m (FY 24: £645.7m) drawn. The Group secured an additional £50.0m uncommitted facility during the period with flexible borrowing tenors to support the Group's short-term, in-month, borrowing requirements. On 1 July 2025, the Group completed the refinancing of the term loan and RCF which were due to expire in September 2026 and December 2026 respectively. These have both been extended to 30 April 2028 on the same terms. The trade loan and money market facilities are both uncommitted facilities.

6The carrying value of the USPP loan includes the fair value of future interest payments of £3.2m (H1 24: £4.1m) as the loan was acquired through a historical acquisition. The drawings of £100.0m (H1 24: £100.0m) are equal to the total available facility. 

7 The Homes England development loan is no longer included in the consolidated Group accounts as the borrower, Linden Homes (Sherford) LLP, is no longer a subsidiary undertaking. 

Shareholder distributions and capital allocation policy

The Group maintained its capital allocation policy. An interim ordinary distribution in the form of a share buyback of up to £55m and a special buyback of up to £75m were announced in September 2024. The Group has completed c. £71m to date, with the remaining c. £59m expected to be completed by H1 2026.

Forward order book

The forward order book was broadly stable at £4.3bn (FY 24: £4.4bn). The Partner Funded component reduced by 6% due to the lower levels of activity resulting from the uncertainty around future funding for the affordable housing sector that existed for much of the period.

Land bank

The land bank represents 4.2 years of supply (FY 24: 4.4 years), consistent with the Group's Partnerships model. Over the medium term, we expect the length of the land bank to reduce to less than 4.0 years of supply. The Group added 2,866 plots across 10 sites, with 30% (FY 24: 31%) of plots controlled rather than owned. Over the medium term, the Group expects around one-third of its land bank to be controlled rather than owned.

Strategic land

Strategic land remains an important supply source. As at 30 June 2025, the Group held 76,919 plots across 186 sites, a 1% increase from year-end.

Principal risks and uncertainties

The Group continues to manage a range of risks and uncertainties which could have a material adverse impact on the Group. Risk management controls operate at all levels of the organisation, with the Executive Leadership Team accountable for identifying, evaluating and managing principal risks, supported by the Risk Oversight Committee.

The Board has completed its assessment of the Group's principal and emerging risks, including those that could threaten its business model, future performance, solvency or liquidity. The Directors do not consider the process of risk management and the principal risks and uncertainties, as outlined on pages 69 to 75 of the 2024 Annual Report and Accounts, to have changed since that document was published. The principal risks are summarised below.

Project delivery and contractual exposure

Failure to achieve our build construction and build cost targets leading to either a reduced margin, contractual penalties, or disputes with our partners. Failure to continue or restart operations due to a major unexpected incident or event out of our control, such as a natural disaster, global pandemic or UK epidemic, or disruption to national infrastructure.

Economic and sales environment

A failure to anticipate and respond to any UK economic decline brought about by uncertainty, loss of consumer confidence, higher interest rates and increasing unemployment, leading to decreased affordability, reduced demand for housing and falling house prices.

Supply chain

A failure to adequately respond to shortages or increased costs of materials and skilled labour, or the failure of a key supplier in the current economic environment, may lead to increased costs and delays in construction services.

Land and planning

Lack of development opportunities due to difficulties in sourcing land or obtaining planning approval. In addition, churn of Government policy changes that distract Councils from delivering local plans and planning permissions.  A failure to bring through a sufficient pipeline of strategic and consented land could also affect future growth.

People and talent

An inability to attract, develop or retain good people. In addition, a failure to understand and respond to new skills required to meet our unique Partnerships strategy, or to meet the requirements of the changing pace of technology and customer expectations.

ESG

A failure to actively demonstrate to our partners and stakeholders the already significant ESG contribution the Group is making to society.  This would include a failure to achieve our pathway to Net Zero carbon targets, a failure to promote the contribution we are making to the UK housing crisis, and a failure the meet the levels of interest and reporting requirements from Government, Investors, customers and clients.

Liquidity and funding

A failure to generate enough liquidity to manage short term and long-term funding or investment requirements. A failure to manage liquidity requirements impacts preparedness for potential changes in economic environment and ability to take advantage of appropriate land buying or investment opportunities to help deliver improved financial performance.

Customer service

A failure to deliver product quality and service standards that meet our customers' expectations (both private customers and large-scale partners) or fall short of the standards expected from supervisory bodies.

Legislation and building safety

An inability to fulfil regulatory planning, building, environmental and technical requirements for new homes and communities. In addition, the threat of new unquantified liabilities from past developments becoming material.

Technology resilience and future change

An inability to protect our IT estate, systems and infrastructure and people from hostile or fraudulent attacks. An inability to adapt to the pace of technological change by failing to embrace new intelligence or capability, or adapt our systems and processes to fully deliver expected improvements across our Group.

Safety, health and environment

A loss of trust in the Group's ability to build communities safely and in an environmentally responsible way. Preventable accidents that harm people, communities, or the environment.