Revenue at Vistry’s Partnerships business is on course to top £1bn next year after a strong recovery from 2020.
The Partnerships arm of the group, which delivers projects alongside local authorities, housing associations and private investors, reported a jump in adjusted operating margin to 9.1 per cent in the six months to 30 June, compared to a 4.0 per cent margin for the same period last year.
Revenue for Partnerships rose from £338m in the previous year to £391m for the first half of 2021.
The company is now forecasting revenue for the division will top £1bn next year thanks to strong demand. It forecasted that Partnerships would deliver an annual revenue of around £1.6bn in five years, alongside an adjusted operating margin of more than 12 per cent.
Vistry chief executive Greg Fitzgerald said: “The group holds a unique market position with strength and capability across all housing tenures, and we are firmly focused on maximising the opportunities this brings. Housebuilding delivered a significant improvement in margin in H1 and we expect this to continue, whilst Vistry Partnerships is firmly on track to deliver more than £1bn of revenue in FY22 and a margin in excess of 10 per cent, driven by the accelerated growth of its higher-margin mixed-tenure revenues.”
In terms of the pipeline ahead, Partnerships noted that significant work would come from its recent appointment as a strategic partner for Homes England’s Affordable Homes Programme (2021-26). The group said: “Partnerships has been allocated a five-year grant programme totalling £83m to deliver 1,474 affordable homes across the country outside of London. It is a great opportunity to accelerate the delivery of much-needed affordable homes and supports our ambitious medium-term growth plans for higher-margin mixed-tenure revenues.”
The housebuilding and partnerships divisions together reported a £166.1m profit before tax, setting the UK housebuilder and contractor up for a stronger year end than expected. A revenue of £1.1bn for the six months ending on 30 June 2021, marked an 82 per cent jump from the £607m revenue for the same period in the previous year.
The group said that they were on track for a year end with adjusted profits before tax forecasted at £345m, which was slightly ahead of consensus market expectation.