Vistry Group Sees 2025 Profit Rise, Strong H2 Margin Boost; Targets 17,000+ 2026 Completions

Core Viewpoint - Vistry Group reported results for 2025 that met market expectations, with a notable profit increase driven by a strong second-half performance despite subdued demand in private sales [5] Financial Performance - Group adjusted profit before tax for 2025 is expected to be around GBP 270 million, consistent with management guidance and consensus expectations [2] - The full-year operating margin improved to 8.4%, with a second-half margin of 9.6% compared to 6.7% in the first half, attributed to higher-margin developments and resolution of cost issues [3][7] - Revenue for 2025 was described as "pretty flat," supported by higher average selling prices and increased land sales revenue, with GBP 80 million of cash expected from land sales completed in 2025 [4] Strategic Initiatives - Vistry has been active in land acquisition, securing over 12,500 plots in the year, with a shift towards partnerships with housing associations, resulting in a 30% increase in second-half additionality units [6][11] - The company aims to target more than 17,000 completions in 2026, representing over 10% growth, and has a forward sales position of GBP 4 billion, with GBP 2.4–2.5 billion expected for 2026 [6][14][15] Market Positioning - Management emphasized that the business model is better suited for working with housing associations than private rented sector providers, highlighting improved payment profiles [7] - Vistry is aiming to become a "Strategic Plus" partner under the Social and Affordable Homes Programme, allowing bids of up to GBP 700 million, compared to GBP 350 million for a Strategic Partner [8] Cost Management - The company reported very little build cost inflation during the year, with expectations of low inflation of 1-2% externally, and is pushing for negative build inflation internally [12] Cash and Debt Management - Year-end net debt was around GBP 145 million, down from GBP 180 million year-on-year, with expectations of additional cash from delayed completions [13] - The company is targeting a return to net cash by the end of 2026, supported by expected deal completions and a broader capital release program [19]