Vistry Group Sees 2025 Profit Rise, Strong H2 Margin Boost; Targets 17,000+ 2026 Completions
Vistry Group LON: VTY said it delivered results in 2025 in line with market expectations, with profit ahead of 2024, driven by a “particularly strong” second-half performance despite subdued demand in private sales. Chief Executive Greg Fitzgerald and Chief Financial Officer Tim Lawlor told investors the company enters 2026 “in fundamentally better shape than a year ago” following business stabilization and reorganization work completed in the first half of 2025.
2025 performance: flat revenue, stronger margins
Fitzgerald said 2025 revenue was “pretty flat” despite lower completions, helped by higher average selling prices and increased land sales revenue from the sale of “surplus house building land.” He noted there is “circa GBP 80 million of cash to be received” from land sales completed in 2025, predominantly over the next couple of years.
The group’s margin improved meaningfully during the year. Fitzgerald reported a full-year operating margin of 8.4%, with a second-half margin of 9.6% compared with 6.7% in the first half. Management attributed the improvement to a new higher-margin development coming on stream, a better tenure mix, and resolution of cost issues in the South division.
Group adjusted profit before tax for 2025 is expected to be around GBP 270 million, which management said was consistent with its guidance and consensus expectations.
Partnerships mix shifts toward housing associations
Vistry highlighted changes within its partnerships channels. Fitzgerald said weaker private rented sector (PRS) demand in 2025 reflected some partners pausing delivery while refinancing, but this was offset by a 30% increase in second-half “additionality” units from housing associations. He said he expects that trend to continue and described renewed momentum in affordable housing, citing recent discussions with national housing associations regarding joint venture opportunities.
Management repeatedly emphasized that the business model is “more suited to working with housing associations than PRS providers,” pointing to better payment profiles and the ability to deal with one counterparty for both Section 106 and additionality volumes.
On PRS pricing, Fitzgerald said some PRS deals in 2024 and 2025 were at discounts “in excess of 15%,” while newer deals were “anywhere between 5% and 11%,” alongside more cash paid upfront.
Affordable housing funding cycle and key dates
Fitzgerald said Homes England’s guidance for bidding under the Social and Affordable Homes Programme (SAHP) 2026–2036 confirms bids will be invited from February, and Vistry expects to submit its bid in February or early March. He said the group is aiming to become a “Strategic Plus” partner, a category that would allow bids of up to GBP 700 million versus GBP 350 million for a Strategic Partner. He contrasted this with Vistry’s initial bid for the 2021–2026 program of GBP 83 million, which has since increased to an allocation of GBP 253 million after additions.
Fitzgerald outlined timing milestones for the new funding cycle, including:
- Rent convergence expected “this month,” which management said would increase partners’ funding capacity.
- National Housing Bank (a Homes England subsidiary) expected to become operational with investment announcements by “end of March going into early April.”
- Vistry’s SAHP bid submission in February/early March, with expectations of funding visibility in April and May, ahead of a broader government announcement planned for September.
Vistry also said its Placepoint joint venture with Homes England completed its first site acquisition in December.
Land buying, land sales, and build costs
Unlike many peers, management said Vistry was active in the land market during the second half, taking advantage of what it described as an “incredibly soft land market.” Fitzgerald said the group secured 9,500 plots in the second half and “over 12,500 plots in the year,” including GBP 25 million of opportunistic spend on November 26, the day before the government budget. He highlighted three large sites purchased in the second half: Worcester, Roseley, and Bury St Edmunds. Fitzgerald also said the group entered the year with “well in excess of 10,000 plots with terms agreed and solicitors instructed.”
On land sales, Lawlor said the revenue primarily relates to selling parcels of land from larger acquired sites and that margins are consistent with blended site margins. He estimated GBP 30 million to GBP 40 million of profit associated with the GBP 200 million of land sale revenue referenced during the call. Fitzgerald added that at least two land sales were loss-making but were done to “clean the book” and improve the land bank’s quality.
On build costs, Fitzgerald said Vistry has seen “very little, if any” build cost inflation during the year, and externally the group expects “very low 1–2%” inflation. He added that internally the company is pushing for negative build inflation, citing subcontractor appetite for certainty from Vistry’s pre-sold model and upcoming supplier contract renewals.
Cash, net debt, forward sales, and 2026 outlook
Vistry said year-end net debt closed at around £145 million, down year-on-year from £180 million. Fitzgerald said net debt was marginally above consensus due partly to higher-than-expected land purchases and partly to delayed completion timing on partner deals. He said those delays could have generated “over GBP 150 million” of additional year-end cash, now expected to complete in the first half of 2026, noting GBP 15 million had already been received in the first week of the year.
The group reported a £4 billion forward sales position, which Fitzgerald described as higher than expected for this point in the affordable funding cycle. He estimated around GBP 2.4–2.5 billion of that relates to 2026 delivery, with some large London schemes extending over more than 10 years.
On volumes, management said it expects completions to exceed 17,000 units in 2026 and indicated this would represent growth of “over 10%.” Management also said it is budgeting for a broadly flat private sales market, with incentives unchanged at up to 6%, though it hopes incentives may decline if uncertainty eases and interest rates fall.
On margin, Lawlor said Vistry expects some progression in 2026 from the 2025 full-year level of 8.4% as lower-margin legacy sites roll off and the impact of South division issues diminishes. Lawlor also quantified South division impacts as roughly a £40 million hit in 2025 and an estimated GBP 10–15 million in 2026.
Regarding fire safety, management said there was no change to the provision and reiterated guidance for ongoing cash outflow of around net £80 million in 2026, while noting higher-than-expected recoveries from third parties. The company also said it believes it is in the “upper quartile” of developers in meeting building safety responsibilities.
Looking ahead, management said it expects the first half of 2026 to be better than the first half of 2025, with a more normalized seasonal weighting than the sharp second-half skew seen in 2025. Management said it is targeting a return to net cash by the end of 2026, supported by expected deal completions and a broader capital release program, with additional guidance expected at results in March.
About Vistry Group LON: VTY
Vistry Group is one of the UK's leading homebuilders with a top tier housebuilder and leading Partnerships business. Our purpose is to develop sustainable new homes and communities across all sectors of the housing market through our leading brands, Bovis Homes, Linden Homes, Vistry Partnerships and Drew Smith. Our housebuilding division operates across 13 business units, each with a regional office, which are developing hundreds of sites across England. The design and construction of our housing ranges blend tradition and innovation, creating homes and developments with contemporary living standards. Following the acquisition of Countryside Partnerships, Vistry's Partnerships division is a market leader in the high-growth partnerships business.
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