Vistry Group Announces £1bn Shareholder Return and Shifts Focus to Partnership Business
UK housebuilder, Vistry Group, has revealed plans to return £1bn to shareholders over the course of the next three years. Additionally, the company intends to shift its focus towards its partnership business, which collaborates with the public sector and housing associations to construct owned and rented properties, specifically social housing.
To facilitate this strategic shift, Vistry will merge its housebuilding division with its partnerships division. The establishment of the partnerships division came as a result of the acquisition of rival firm, Countrywide Partnerships, last year. The cash-and-shares deal to acquire Countrywide Partnerships was valued at £1.25bn.
During the first half of 2023, revenues within Vistry’s partnerships division surged by 7 percent to reach £954mn. Furthermore, margins experienced a notable increase, rising to 11.5 percent compared to 10.2 percent from the prior year.
On the other hand, the housebuilding division faced tougher conditions, with revenues dropping by 28 percent to £824mn. Margin levels also declined to 19.8 percent, falling from last year’s 22.4 percent.
Following the announcement, Vistry shares saw a significant boost, rising by 13 percent in early trading.
The decision to return £1bn to shareholders demonstrates Vistry’s commitment to rewarding its investors while placing greater emphasis on its partnership business. By merging the housebuilding and partnerships divisions, the company aims to leverage the success of the latter to drive growth and increase profitability in the long term.
As Vistry shifts its focus towards partnering with the public sector and housing associations, it is expected to play an instrumental role in addressing the housing shortage issue and supporting the development of social housing.
Investors, encouraged by the company’s strategic realignment and positive performance of the partnerships division, responded favorably to the news of the £1bn shareholder return. The significant rise in Vistry shares early on indicates confidence in the company’s future prospects and its ability to deliver value for its shareholders.
With Vistry’s renewed focus on collaboration and its strong financial performance in the partnerships division, the company is well-positioned to navigate challenges in the housing market and continue providing much-needed properties to those in need.