Vistry Group PLC - Market Update

9 December 2020

Vistry Group PLC

("Vistry" or "the Group")

Strong cash generation drives significant reduction in leverage

Board to consider reinstating FY20 dividend

As stated in our trading update of 12 November 2020, the Group expects to deliver FY20 profit before tax[1] at the top end of the range of £130m to £140m, reflecting the strong operational performance across the Group.

The Group now confirms that it expects to have a net debt position, as at 31 December 2020, of no greater than £40m with the possibility of a modest net cash position.  This has been driven by continued strong trading and low cancellations, good cash management at an individual business level, and the ongoing benefits from the successful combination and integration of the enlarged business.

The number of completions scheduled for December is at a normal level, with our usual strong focus on quality, and there are no individually significant transactions within the revised forecast.  The Group continues to buy land in-line with its strategy of retaining a 3.5 to 4.0-year land bank for the Housebuilding business and delivering accelerated growth for Vistry Partnerships' mixed tenure business.  All land for forecast FY21 completions across the Group is secured and we are in a strong position for FY22.  The Group utilises land creditors where appropriate and will secure land conditional on detailed planning.  Land creditors as at 31 December 2020 are expected to be at a similar level to 30 June 2020.

Capital allocation and FY20 dividend

As stated in September, the Group's primary focus has been on deleveraging whilst positioning the business to deliver a step up in performance in FY21 and profit before tax⁽¹⁾ of £310m.  Looking forward, the Group expects to carry an average net debt position in FY21 as we build for FY21 completions and will target a net cash position for 31 December 2021.

The Group will continue to invest in its land bank to deliver against its strategy for both Housebuilding and Partnerships.

In November, the Board confirmed its intention to resume dividend payments earlier than previously expected with an interim payment payable next November in respect of FY21 with a 2.5 times dividend cover and a progressive policy thereafter.  Given the strong cash performance and accelerated deleverage, the Board will consider reinstating a modest final dividend in respect of FY20.

The Group has repaid furlough monies received earlier in the year.  Apart from this, the Group has not benefitted from any Government schemes related to supporting businesses and employees during the COVID-19 pandemic.

The Group will issue a trading update for the 12 months ended 31 December 2020 on 12 January 2021, ahead of the publication of its full year results on 25 February 2021.

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