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Vistry has delivered improved revenue and pre-tax profit as it continues its transition to a partnerships-focused business. 

In its results for last year, Vistry posted revenue of 拢3.56bn, up 28.6% on the year prior, while profit before tax of 拢305m up 23% on the 拢248m it made in 2022. 

It comes after the housebuilder announced a major strategic rejig last September, merging its traditional housebuilding arm into its partnerships business and subsequently announcing a series of large 鈥減ortfolio deals鈥�. 

In 2023, 67% of total completions were partner funded 鈥� meaning they were pre-sold to a registered provider, local authority or private landlord 鈥� and 33% sold directly on the open market. 

Vistry executives believe the partnerships model, in which developers work to build homes for long-term investors, often in the public sector, will allow eventually allow it to build 25,000 homes per year. 

The business delivered 16,118 new homes in the year, which was down 5.4% on the prior year. By contrast, fellow housebuilding giant Persimmon鈥檚 completions dropped by a third last year. 

The group, which asked its supply chain for 10% price cuts last year, says it is on track to deliver strong growth in completions this year, targeting more than 17,500 units. 

This is underpinned by a forward sales position totalling 拢4.6bn, of which 拢2.1bn is for delivery this year. 

Demand from registered providers was 鈥渞obust鈥� last year, according to Vistry, while demand from PRS was 鈥渕ore restrained鈥�, reflecting the sector鈥檚 greater sensitivity to higher interest rates. 

However, the business has noted a pick-up in demand from PRS providers in recent months, supporting an increase in the group鈥檚 sales rate since the start of the year to 0.72 (2023: 0.61) sales per week per site. 

It said easing of mortgage rates at the start of the year had a positive impact on open market demand and expressed optimism that this trend will continue during 2024 

At 31 December 2023, Vistry鈥檚 fire safety provision totalled 拢289m and last year the business incurred an expense of 拢19.3m on satisfying new second staircase requirements. 

Greg Fitzgerald, chief executive of the business, said: 鈥淲e see high demand for mixed tenure housing and regeneration across the country and are uniquely placed to deliver on this market opportunity, helping address the country鈥檚 acute need for housing.鈥� 

Andy Murphy, director of financials and industrials at Edison Group, said the group鈥檚 results 鈥渞eflect a robust financial performance amidst challenging market conditions鈥�. 

He continued: 鈥淒espite headwinds, such as tougher market conditions and inflationary pressures, the group delivered a total of 16,118 new homes during the fiscal year, marking a slight decline of only 5.4% compared to the prior year, demonstrating the resilience of its operations.  

鈥淚mportantly, excluding the former Housebuilding business, the Partnerships segment achieved year-on-year revenue growth, reaffirming its strategic focus on a high-growth, capital-light model.  

鈥淲hile Vistry鈥檚 return on capital employed (ROCE) experienced a slight decline compared to 21.3%, it remains above industry averages, underscoring Vistry鈥檚 strong financial discipline and operational efficiency.鈥�

At the end of 2023, the group held a net debt position of 拢88.8m, having held net cash of 拢118.2m the year prior.  

It said it was 鈥渢argeting a year end net cash position as at 31 December 2024 and the elimination of average net debt in the medium term鈥�. 

The group鈥檚 medium-term targets are for revenue growth of between 5% and 8% and an operating profit of 拢800m.