Our shareholders

Type 2020 2019
Adjusted profit before tax £143.9m £188.2m
Return on capital employed 14.4% 22.1%
Total shareholder return (28.2%) 71.2%

Note: For calculation of ROCE, see table on page 186, note 5.12 to the financial statements. 2019 Return on capital employed restated based on revised ROCE definition in 2020 to reflect the enlarged Group contribution of joint ventures as well as excluding for exceptional costs.

Our approach

The Group’s clear focus at the start of 2020 was to successfully integrate Linden Homes and Vistry Partnerships, maximising the significant benefits from the combination with Bovis Homes, and to deliver upon the strategic rationale for the Acquisition.

Our approach was to bring together the best from each business creating a stronger Vistry Group.

As an enlarged group, the Housebuilding business has the capacity to increase output to more than 8,000 units and with controlled volume growth, the business focus is to increase gross margin up to the 24.2% gross margin embedded in the owned land bank.

Vistry Partnerships has a clear strategy to deliver significant growth in higher margin mixed tenure completions, targeting more than £1 billion revenue in 2022 and an operating margin of 10%+.

Deleveraging the Group was a clear priority for the first two years post acquisition to best deliver enhanced returns to shareholders.

Progress in 2020

The Group was quick to progress with the integration and largely completed the re-organisation of the Housebuilding business by the end of March, enabling the Group to deliver a rapid and co-ordinated response to the Covid-19 pandemic.

The synergy benefits to be realised are ahead of plan with the full synergy run rate of £44m, 26% ahead of the initial expectations, with the c. £27m cost of delivery below the expected cost of £35m.

The strong strategic rationale for the Acquisition can be seen within the enlarged Vistry Group. As a top 5 national housebuilder with a leading Partnerships business, Vistry has capability across all segments of the housing market and the two leading brands, Bovis Homes and Linden Homes have been re-positioned and re-branded to maximise the benefits from dual branding.

The Covid-19 pandemic had a wideranging impact on all aspects of the business in 2020 resulting in a significant decline in completions for Housebuilding and revised expectations for Group profits.

The Group has been firmly focused on deleverage, with the gearing as a result of the Acquisition weighing heavily on the share price in 2020. Significant progress was made in H2 20 resulting in a net cash position of £38m as at 31 December 2020.

With the high level of market uncertainty and to best support the business, the Board took the decision to suspend all cash dividend payments in March 2020. Following the strong second half performance, significant deleverage and with a strong forward sales position going into FY 2021, the Board was pleased to announce the resumption of dividends with a 20p final dividend in respect of 2020.

Priorities for 2021

Following the significant disruption to our business from Covid-19, the Group’s focus in 2021 is on delivering a step up in Housebuilding completions and driving improved profitability. Vistry Partnerships operates in a high growth, counter cyclical market and is targeting revenue growth and margin expansion, delivering increasing returns.

The Group will continue to invest in attractive land opportunities to support the growth plans of both Housebuilding and Partnerships.

The Group is targeting to maintain a strong balance sheet and reduce dividend cover towards 1.75 times.