Kent's Vistry Group announces strategy shift to social housing in H1 results

Kent-headquartered housing giant Vistry Group has told investors the firm is shifting its strategy to focus solely on social housing amid challenging conditions in the overall sector.

Last year, the house builder, formerly called Bovis Homes, announced the acquisition of Countryside Partnerships, which expanded its partnerships business, which specialises in partnering with housing associations, other public sector businesses and private rented sector (PRS) providers, to deliver private, affordable and PRS housing.

READ MORE: House-builder Vistry to provide 1,500 homes in South East

Vistry CEO Greg Fitzgerald said in a results statement for the first six months: "The integration of Countryside has progressed well in the first half, firmly establishing Vistry as the leading provider of affordable mixed tenure housing in the UK.

"The group delivered a robust half year performance despite the challenging macro-economic conditions with partnerships continuing to see good demand, demonstrating its market resilience.

"The scale of the social need for affordable mixed tenure housing across the country continues to increase and it is clear that Vistry is uniquely positioned as the leader in partnerships housing.

"In this context and following our annual review of the group’s strategy, the board has concluded that focusing the group’s operations fully on partnerships by merging our housebuilding operations with our partnerships business, best enables sustained growth in housing output, provides greater benefits to our partners, while maximising value and long term returns for shareholders with the group targeting a 40% ROCE and the distribution of £1bn to shareholder over the next three years," he added.

Partnerships saw "good" levels of demand in the first half, demonstrating its market resilience, with adjusted revenues increasing by 7.1% to £953.6 million compared to pro forma H1 22 at £890.4 million, the firm noted.

The integration of Countryside was expected to deliver synergy benefits of at least £35 million in full year 2023, ahead of targeted £25 million, it added.

Meanwhile, the group's housebuilding business has faced more challenging market conditions with the higher mortgage rate environment and broader macro-economic challenges, particularly impacting first time buyers, said Vistry.

For the first half of 2023, the company reported pre-tax profit of £174 million, down 8.4% from the £189.9 million seen in the first half of 2022.

The board repeated its guidance for adjusted profit before tax for full year 2023 of more than £450 million.

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