Vistry Group PLC, 11 Tower View
Kings Hill, West Malling, Kent ME19 4UY
vistrygroup.co.uk
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Annual report
and accounts
2020
Vistry Group PLC
vistrygroup.co.uk
The Lime | 5 bedroom home
Whitehouse Park, Milton Keynes
Principal offices
West Division
East Division
1 Mercia region
Dunston Hall, Dunston,
Stafford, Staffordshire ST18 9AB
Tel: 01785 714 412
2 West Midlands region
Bromwich Court, Highway Point
Gorsey Lane, Coleshill
Birmingham B46 1JU
Tel: 01675 437 000
3 Cotswolds region
Cleeve Hall, Cheltenham Road
Bishops Cleeve, Cheltenham
Gloucestershire GL52 8GD
Tel: 01242 388 500
4 Western region
Linden House, The Jacobs Building
Berkeley Place, Clifton
Bristol BS8 1EH
Tel: 01179 304 949
5 South West region
Heron Road
Sowton Industrial Estate
Exeter, Devon EX2 7LL
Tel: 01392 344 700
6 Yorkshire region
East Yorkshire
2nd Floor Spinner Point
South Quay, Lakeside Boulevard
Doncaster DN4 5PL
Tel: 01302 347 130
West Yorkshire
Suite 2/3 Ground Floor
1175 Thorpe Park, Century Way
Leeds LS15 8ZB
Tel: 01132 044 400
7 East Midlands region
Ashurst, Southgate Park
Bakewell Road, Peterborough PE2 6YS
Tel: 01733 396 600
8 Northern Home Counties region
St Annes House, Caldecotte Lake
Business Park, Milton Keynes
Buckinghamshire MK7 8JU
Tel: 01908 088 500
9 Eastern region
Eastwood House, Glebe Road
Chelmsford, Essex CM1 1QW
Tel: 01245 343 000
South Division
10 Thames Valley region
Central 40
Lime Tree Way
Chineham Park
Basingstoke RG24 8GU
Tel: 0845 812 7777
11 Southern region
1A Guildford Business Park
Guildford
Surrey GU2 8XG
Tel: 01483 705 100
12 South East region
Linden House
Guards Avenue
Caterham
Surrey CR3 5XL
Tel: 01883 334 400
13 Kent region
11 Tower View
Kings Hill, West Malling
Kent ME19 4UY
Tel: 01732 280 400
Partnerships
1 North East
2 Esh Plaza
Sir Bobby Robson Way
Great Park
Newcastle Upon Tyne
NE13 9BA
Tel: 01912 271 000
2 Yorkshire
Thunderhead Ridge
Glasshoughton
West Yorkshire
WF10 4UA
Tel: 01977 555 550
6 East England &
7 London
Broadway Chambers
2 Broadway
Stratford
London E15 4QS
Tel: 020 8221 5000
8 Drew Smith
Drew Smith House
7-9 Mill Court
The Sawmills, Durley
Southampton SO32 2EJ
Tel: 01489 861 400
3 North West
9 West
Unit 2, West Point Row
Great Park Road
Bradley Stoke
Bristol BS32 4QG
Tel: 01454 270 600
10 South West
Killerton House,
4 Park 5 Harrier Way
Exeter, Devon EX2 7HU
Tel: 01392 880 380
Innovation House
Kelburn Court
Birchwood
Warrington WA3 6UT
Tel: 01925 885 700
4 East Midlands
3 Smith Way,
Grove Park, Enderby
Leicester LE19 1SX
Tel: 01162 821 100
5 West Midlands
2 Bromwich Court
Gorsey Lane, Coleshill
West Midlands B46 1JU
Tel: 01675 469 290
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Strategic report
A review of our business
model, strategy and
summary financial and
Business overview
2 2020 highlights
4 Chairman’s statement
6 Housing market overview
Contents
Page
4
Our business and strategy
10 Chief Executive’s report
16 Our business model
22 Strategic priorities
48 Risk management
50 Principal risks and uncertainties
58 Stakeholder Engagement
Sustainability
66 Sustainability report
Chairman’s statement
Page
10
Our financial performance
Chief Executive’s report
76 Financial review
Our governance
Detailed discussion of our
governance framework and
remuneration policy
Financial
statements
Financial statements
and notes
82 Directors and officers
84 Corporate governance report
104 Remuneration report
124 Audit Committee report
128 Nomination Committee report
132 Directors’ report
136 Auditors’ report
147 Group income statement
147 Group statement of
comprehensive income
148 Balance sheets -
Group and Company
149 Statement of changes in equity -
Group and Company
150 Statements of cash flows -
Group and Company
151 Notes to the financial statements
Supplementary
information
192 Five year record
193 2021 AGM Notice
197 Explanatory notes to the
AGM Notice
200 Shareholder information
201 Principal offices
Page
76
Financial review
Vistry Group PLC | 1
Vistry Group PLC | vistrygroup.co.uk | 1
Vistry Group PLC highlights
Financial highlights
Adjusted
revenue (2)
79% Up
Reported revenue
60% Up
Adjusted
profit before tax (1)
23% Down
Reported profit before tax
48% Down
Ordinary
dividend(3)
67% Down
Notes: (1) Adjusted operating profit margin, profit before tax and EPS are calculated prior to exceptional costs and amortisation of acquired intangibles.
(2) Adjusted revenue includes share of joint venture revenue
(3) Ordinary dividends of 61.5 pence per share in 2019 were paid in the form of shares in 2020, in light of the need to conserve cash as a result of the Covid-19 pandemic. All other
ordinary dividends shown were or will be paid in cash.
(4) Return on capital employed is calculated as adjusted operating profit prior to exceptional costs and amortisation of acquired intangibles, divided by the average opening and closing
shareholders’ funds plus net cash/debt. See section 5.12 on page 186 for the full reconciliation.
2 | Strategic report | Business overview
RevenueReported revenueAdjusted revenueAdjusted operatingprofit marginROCE Ordinary dividend(4)(3)(1)(2)201620172018201920202016201720182019202020162017201820192020201620172018201920201,054.81,028.212.515.217.013.745.947.51,061.41,130.861.521.117.18.41,811.71,054.81,028.21,061.41,137.22,040.120.014.416.419.357.0Profit before taxReported profit before tax Adjusted profit before tax(1)20162017201820192020154.7114.0168.1188.298.7154.7120.8168.1193.8143.9Adjusted earnings per share(1)90.168.0107.552.6101.6201620172018201920200.010054.520109.030163.540218.00756251512502268753025000.0000002043.6666674087.3333336131.0000000.0000.2350.470Housebuildingaverage sales price£302,500Legal completions6,131Strategic land34,053 plotsControlled land40,218 plotsHBF customer satisfaction5NHBC reportable items0.28 (5)(8)(7)(6)(9)272,400254,9003,9773,64525,49420,75618,70417,0960.380.4732273,2003,75919,27817,3280.310.23420162017201820192020201620172018201920202016201720182019202020162017201820192020201620172018201920202016201720182019202017,3283,867518,358280,2000.2840,2186,131534,053302,500
Strategic report | Business overview
Operational highlights
Legal
completions (8)
58.6% Up
HBF customer
satisfaction (5)
5
Housebuilding
average sales price (9)
8% Up
Notes: (5) Based on responses from customers who legally completed between 1 October 2019 to 30 September 2020. Star rating awarded according to the proportion responding ‘yes’
to the question ‘would you recommend your builder to a friend?’: 5-Star rating 90% and above.
(6) Based on owned and controlled land including joint ventures and joint arrangements.
(7) This shows the average number of reportable items found for each NHBC inspection.
(8) Includes joint venture completions and excludes partner delivery equivalent units.
(9) Average selling price shown on an adjusted basis to include the proportional contribution of joint ventures.
Vistry Group PLC | vistrygroup.co.uk | 3
RevenueReported revenueAdjusted revenueAdjusted operatingprofit marginROCE Ordinary dividend(4)(3)(1)(2)201620172018201920202016201720182019202020162017201820192020201620172018201920201,054.81,028.212.515.217.013.745.947.51,061.41,130.861.521.117.18.41,811.71,054.81,028.21,061.41,137.22,040.120.014.416.419.357.0Profit before taxReported profit before tax Adjusted profit before tax(1)20162017201820192020154.7114.0168.1188.298.7154.7120.8168.1193.8143.9Adjusted earnings per share(1)90.168.0107.552.6101.6201620172018201920200.010054.520109.030163.540218.00756251512502268753025000.0000002043.6666674087.3333336131.0000000.0000.2350.470Housebuildingaverage sales price£302,500Legal completions6,131Strategic land34,053 plotsControlled land40,218 plotsHBF customer satisfaction5NHBC reportable items0.28 (5)(8)(7)(6)(9)272,400254,9003,9773,64525,49420,75618,70417,0960.380.4732273,2003,75919,27817,3280.310.23420162017201820192020201620172018201920202016201720182019202020162017201820192020201620172018201920202016201720182019202017,3283,867518,358280,2000.2840,2186,131534,053302,500
Chairman’s statement | Ian Tyler
Synergies will total £44m, ahead of
the initially expected £35m and the
cost to deliver them will be c. £27m,
below the initial £35m expectation.
The Housebuilding business restructured
quickly and with national coverage, the
operating structure has the capacity to
deliver c. 8,000 Housebuilding units.
Vistry Partnerships, a key driver for the
Acquisition, demonstrated its strong
market resilience in 2020, making
excellent progress towards delivering
its targets of £1billion of revenue and at
least a 10% operating margin in 2022.
Our focus is on one Vistry and on
leveraging the capability and relationships
across the entire Group. With expertise
in all segments of the housing market,
Vistry Group is uniquely positioned, and
the combination of Vistry Partnerships
and our two leading housing brands,
Bovis Homes and Linden Homes offers an
exciting future. Fully aligned, the Group
is set to maximise the significant growth
opportunities ahead.
Response to Covid-19
The health and safety of our employees,
subcontractors, suppliers and customers
has been and remains our top priority
during the Covid-19 pandemic. I am
pleased to report the Group has delivered
a rapid and co-ordinated response
to challenges and I wish to thank all
our employees for their enormous
commitment, resilience and hard work
during what has been a testing period.
The Group took the decision to close all
construction sites and sales offices in
late March, with our sales teams
remaining in contact with customers
on a remote basis. Vistry Partnerships
demonstrated its strong market resilience
with its high proportion of secured
revenue from partner delivery and pre-
sold developments, and led our early
return to site in late April. Site closures
during March and April did however
significantly impact the production,
output and first half performance of the
Group, and of our Housebuilding business
in particular.
As part of our response to Covid-19 we
instigated a temporary salary reduction
for 3 months, for all employees other
than those whose salary was below a
certain threshold. This was later reversed
with salaries repaid. We are also pleased
to have repaid all monies received
by the Group from the Government’s
Job Retention Scheme and have not
benefitted from any Government schemes
related to supporting businesses and
employees during the Covid-19 pandemic.
Covid-safe operating procedures are
embedded across all areas of the business,
productivity is back to normal levels,
and we will continue to work with
Government guidance and protocol
going forwards.
Sustainability
We took the opportunity of the
merger to reinvigorate and relaunch
our focus on the sustainability of our
operations, focusing on the social
and environmental elements of the
ESG agenda. Our increased scope,
and in particular the focus of our new
Partnerships business on the affordable
marketplace, reinforces and enhances
the Group’s purpose of developing
sustainable new homes across all
segments of the UK housing market.
During the year we have conducted a
full review of our risks and opportunities,
consulting widely with stakeholders
(including our people, our customers
and our investors), in order to inform
our priorities. We are refining our
strategy for sustainability, which will
launch in March, and which will set out
our aims and targets.
Focusing on our people, our operations
and our homes and communities, this
will include a timetable to address the
challenge of Net-Zero, our aims for
biodiversity on our projects and the
social value of our operations, both in
terms of the homes and places we
create, and the economic and social
mobility opportunities we generate
through building.
We have described our findings and
proposals in the Strategic Review on
pages 22 to 44 and Sustainability
Review on pages 66 to 73.
A transformational year
There are many positives from
2020 and despite the obvious
challenges and impact on the
year’s financial performance from
Covid-19, the Group has made
much progress across all areas of
the business.
As I commented on in the 2019
Annual Report and Accounts, the
rationale for the Acquisition(10)
of Linden Homes and Vistry
Partnerships which completed on
3 January 2020 (the “Acquisition”),
was strong, and one year on I am
pleased to report the benefits, both
operational and financial, have
exceeded our expectations.
“The enlargement of
the Group enriches our
purpose of developing
sustainable new homes
and communities
across all sectors of
the housing market”
(10) Acquisition by Vistry Group PLC of Linden Homes and
Partnerships & Regeneration businesses from Galliford
Try, completed on 3 January 2020 (the “Acquisition”).
4 | Strategic report | Business overview
Strategic report | Business overview
Quality and service
High quality build and customer service
has remained a top priority in 2020
and I am pleased to report further
improvements, with the Group increasing
its HBF Customer Satisfaction score
in 2020 and achieving the highest
5-Star rating.
We continue to invest in our customer
service platform and in the year saw the
roll-out of our bespoke customer service
relationship platform, ‘Keys’ across the
enlarged housebuilding business. Our aim
of changing the way we interact with our
customers to provide a seamless single
journey with Vistry has been accelerated
by the pandemic.
We have invested in digital content,
digital processes and most recently,
have re-organised our sales teams into
a regional hub structure. This allows
us to best serve our customers whilst
maximising the sales opportunities
across the entire Vistry product range.
This investment continues into in 2021.
People
Attracting and retaining high quality
people within the business is a key
priority and I am pleased to report our
latest Peakon employee engagement
study reported a score of 7.9, an
improvement on the previous score
in August 2020 and ahead of the
benchmark at 7.4.
Mental health has been a key focal
point for this year, with the leadership
team recognising the importance of
supporting our people and maintaining
good, open lines of communication.
Mental Health First Aiders have been
trained up across the business and a
number of new regular online employee
communications platforms have been
introduced including the weekly
‘Time to Talk’, designed to specially
address the challenges of working during
the pandemic.
I would also like to extend my thanks
to our subcontractors, suppliers and
partners who have supported us during
the year, and with the Acquisition,
and are such an important and valued
component of our business.
“ The benefits of the Acquisition, both
operational and financial have exceeded
our expectations”
I would like to thank my colleagues on
the Board for their support and guidance
to the leadership team and to me
personally in what has been another busy
and significant year for the Group.
Looking ahead
For 2021, our top priority remains the
health and safety of our employees,
all those that we work with, and our
customers, and we are committed
to operating in a Covid-safe way and
supporting our people as best as we can.
The market fundamentals remain
strong and whilst we see lots of great
opportunity, we are alert to the wider
market uncertainty. Housebuilding
is committed to delivering controlled
volume growth and driving its margin
towards the 24.2% gross margin
embedded in its owned land bank,
and Partnerships is on track to deliver
accelerated growth and profitability
driven by a significant increase in higher
margin mixed tenure completions.
Above all, as one Vistry, the Group
looks to maximise its unique strengths
and grasp the many exciting growth
opportunities ahead. I look forward to
updating you with our progress.
Ian Tyler
Chairman
Dividends
In light of the impact of the Covid-19
pandemic on the Group’s performance,
the Board took the decision not to pay
the Second Interim Dividend declared
with the Acquisition in cash, but to return
value to shareholders by way of a bonus
issue to shareholders, who were on the
register on 27 December 2019.
Following the Group’s strong second half
performance, year-end net cash position
and strong forward sales position,
the Board is pleased to confirm the
resumption of dividends with a 20 pence
per share final dividend in respect of
FY20 which represents a pre-exceptional
dividend cover of 2.8 times.
Looking forwards, the Group is targeting
to maintain a strong balance sheet and
reduce this dividend cover to a level
towards 1.75 times.
The Board
As set out in more detail in the
Governance report, other than the very
welcome addition of Graham Prothero
to the Board following the Acquisition,
the Board took a conscious decision not
to change its composition during 2020
to more effectively provide continuity,
support and challenge through the
integration process and then through the
impacts of Covid-19. One consequence of
this decision has been that we have not
been able to meet the minimum target
for female representation on the Board
as at the end of 2020 recommended
by the Hampton Alexander Review.
We remain unequivocally supportive
of both the recommendations of this
review and its underlying philosophy.
We are now in a strong position to review
our Board composition so that it most
effectively supports the enlarged Group
and we are committed to being fully
compliant with the Hampton Alexander
recommendations by 31 December 2021.
Vistry Group PLC | vistrygroup.co.uk | 5
Bovis Homes Group PLC | 5
Housing market overview
Despite the economic uncertainty of Brexit and the impacts of
Covid-19, the demand for housing of all tenures continue to increase
These tenures include:
a. Social Rent
b. Affordable Rent
c. Intermediate Rent
d. Private Rented Sector
e. Right to Shared Ownership
f. Right to Buy
g. Rent to Buy
h. Shared Ownership
i. First Homes/Discount Market Sale
j. Help to Buy
Vistry operates across each of these
tenures and enables us to access all parts
of the growing housing market directly
and through our partners.
Government Intervention
and Investment
For a number of years there has been
cross party consensus and support for
new housing across government which
has been driving funding and policy
support for new housing in England.
In the last 12 months, we have seen
some significant policy announcements
which support the delivery of new homes:
• £11.5bn Affordable Housing Funding
Programme to build 180,000 new
homes (of which 50% will be for shared
ownership) between 2021 and 2026.
This represents annual funding of
£2.3bn per annum which is the highest
annual amount for 10 years.
• Introduction of a new First Homes
tenure to support First Time Buyers
access home ownership.
• £10bn Housing Infrastructure funding
for local authorities to accelerate
housing delivery.
• £400m for Combined Authorities to
develop out brownfield sites.
In addition, as a short-term support for
the impact of Covid-19, the government
announced a stamp duty holiday ('SDLT')
for transactions up to £500,000 until
31 March 2021 and extended the
timetable for completion of properties
funded through Help to Buy until
28 February 2021. This followed the
general support for construction sites
and the housing market to remain open
following the initial shut down in March
and April last year.
These interventions demonstrate a
strong government commitment to
support the housing market and meets
Boris Johnson’s call to ‘build, build, build’.
This, coupled with the extension of the
Help to Buy scheme to March 2023,
demonstrates a strong political focus
on assisting young and lower income
households into home ownership.
Vistry continue to have a direct
relationship with government through
MHCLG and Homes England, to influence
government interventions to where
they are most impactful.
Open market purchaser appetite
2020 represented a strong sale year
across England despite the impacts
of Covid-19 and supported by the
government support on SDLT and Help
to Buy. Enquiries remain strong and
reservations continue at pre-Covid-19
levels including for homes to be built
post March 2021. Despite the economic
uncertainty of 2020, lender appetite
remains strong and whilst there has a
been a reduction in high loan to value
mortgage for first time buyers, we have
not seen this as having a material impact.
Partner capacity and appetite
There remains continued demand from
the purchasing sector to buy housing
for affordable housing, private rented
sector (PRS) and housing for the elderly.
This is a strong, active and financially
group of segments who want to
participate in housing delivery for
value driven and commercially
driven outcomes.
Despite the economic uncertainty of
Brexit and the impacts of Covid-19,
the demand for housing of all tenures
continue to increase. Last year, 243,770
net additional dwellings were added to
the housing stock from April 2019 to
March 2020 of which 220,600 were
new build homes. Although this was
the highest number since 1987, this
falls short of the UK government’s
longstanding target for 300,000 new
homes each year. The impact of Covid-
19 has inevitably had an impact on the
number of starts in 2020 across the UK
and the resultant short-term impact of
reduced number of completions will only
increase the latent demand for housing.
Focus of the demand for new homes
Whilst the demand for new homes is
evident across all aspects of the housing
market, affordability remains a key
concern with average house prices
being c. 6x average incomes raising to
10x in London. As a result, there is a
particular focus of the unmet demand/
supply deficit on sub-market (affordable
and intermediate) housing tenures.
Savills estimate that current sub-market
housing delivery is 50,000 homes per
annum against an annual demand of
100,000 homes.
The UK Housing Market has become
more multi-layered than ever before and
has moved away from the traditional
three housing options of ‘1. Council
Housing 2. Private Rent 3.Private Sale’.
Now there are a variety of tenures which
sit alongside private sale and support
those who cannot access outright sale
which is particularly prevalent in the
younger generations.
6 | Strategic report | Business overview
Strategic report | Business overview
Housing Associations continue to
participate in the new supply of housing
through purchasing S106 affordable
housing and progressing their own
developments both for affordable housing
and for open market sale. For the 12
months to September 2020, Housing
Associations invested £10.6bn on new
supply of housing which was impacted by
Covid-19 in March and April. Whilst the
funding of new supply is being balanced
against fire safety and sustainability work
on existing stock, the new government
funding programme will ensure this
is a sector which consistently invests a
minimum of £12bn per annum in
new supply and relies heavily on the
private sector for development and
construction skills.
We are also increasingly seeing new
entrants into the affordable housing
market through ‘for profit’ Housing
Associations. An example would be Sage
(who are funded by Blackstone) who
invested in c. £400m of new affordable
housing in 2020 with a target of owning
20,000 homes.
Local Authorities continue to grow
their development programmes to
build affordable, PRS and open
market housing. Further growth is
forecast with 78% of local authorities
having local housing companies and
57% of councils operating in a housing
delivery joint venture. Although it is still
a long way to grow to get to the levels
of local authority housing delivery in the
1960s and 1970s, this is an active and
growing source of supply.
The combination of a financially strong
purchasing sector combined with
business models which operate and
support housing delivery across the
economic cycles and a reliance on the
private sector for development and
construction expertise places Vistry
Group in a strong position to benefit
from this demand.
Land availability for new homes
Land availability remains good and is
supported by the overall planning regime
across the country, with land vendors
remaining incentivised to bring land
forward as a result of a large number
of local authorities still failing tests
set by the National Planning Policy
Framework (‘NPPF’). The planning
system continue to be complex, time
consuming and expensive and the
timescales for planning applications
being determined has been impacted by
Covid-19 in 2020 although we anticipate
this returning to normal in 2021.
We support the announcement of the
government’s intention to radically
reform the planning system in July
2020 and we would welcome clarity on
how and when this will be introduced
to ensure that it does not create
an environment of uncertainty for
landowners and planning authorities.
Public land remains a key part of our
land supply and we are Homes
England's leading partner on their land
having been successful on 25% of all
land releases under the Delivery
Partner Panel.
The size and strength of the Vistry
Group enables us to target larger sites
where we can develop using both
Housebuilding and Partnerships.
Supply chain and
employment market
Following the initial lockdown, our
supply chains have returned to normal
service with efficiency on site close to
pre Covid-19 levels. We will continue to
monitor the short-term impact of Brexit
on the construction labour market with
our subcontractors, and the medium-
term impact of the skills shortage
within the construction industry.
We are supporting new entrants to
the construction industry directly
through our apprenticeship and trainee
programmes as well as supporting
our subcontractor and local authority
partners through our skills academies to
enable them to invest in new employees.
We recognise that investing in bringing
new people into the industry at all levels
is essential for the sustainability of UK
construction.
Summary
Despite the uncertainties due to
Covid-19 and Brexit, the UK Housing
market continues to support the delivery
of new homes across all tenures with a
strong tail wind of the continued years
of undersupply which supports both our
Housebuilding and Partnerships business
models who operate across all of
these tenures.
The Pavillions,
Kenilworth
Vistry Group PLC | vistrygroup.co.uk | 7
Building
sustainable
communities
8 | Strategic report | Our business and strategy
Strategic report | Business overview
Sherford streetscene
Vistry Group PLC | vistrygroup.co.uk | 9
Chief Executive’s report | Greg Fitzgerald
“I am incredibly proud of all the Group has
achieved in 2020”
At the start of the year, our clear focus
was the successful integration of Linden
Homes and Vistry Partnerships, ensuring
we maximised the significant benefits
from the combination and delivered
upon the compelling strategic rationale
for the Acquisition(10). With our aim of
bringing together the best from each
business we hit the ground running,
and the re-organisation of the enlarged
Housebuilding business was largely
completed by the end of March.
This positioned us well to deliver a rapid
and co-ordinated response to the first
national lockdown in late March, with
the safety, health and wellbeing of our
employees, subcontractors, suppliers, and
customers our top priority. On average,
our Housebuilding sites were closed for
seven weeks which had a significant
impact on our first half performance.
Vistry Partnerships demonstrated its
strong market resilience and led the
industry in an early return to site,
underpinned by the certainty of pre-
sold developments and partner delivery
revenues, with its strong cash flow profile
giving good support to the Group during
these months.
With Covid-safe operating procedures in
place across the business, productivity
returned to normal levels in the second
half, and the Group delivered a strong
performance with a sustained step up
in demand, firm pricing, and a resilient
supply chain.
Vistry Partnerships made excellent
progress against its ambitious growth
strategy in 2020 with mixed tenure units
up nearly 30% in the year and 70% in
the second half, driving an improved
operating margin.
Following the completion of the
Acquisition, we entered the year with net
debt of £136.3m. We have been firmly
focused on deleveraging throughout the
year, and I am very pleased to report
a net cash position of £38.0m as at
31 December 2020, a step change from
our £357.3m net debt position as at
30 June 2020. This performance was
driven by continued strong trading,
good working capital management at an
individual business level, and the ongoing
benefits from the combination of the
enlarged business. With a robust balance
sheet and strong forward sales position
going into 2021, the Board is pleased
to resume the payment of dividends
with a 20 pence per share final dividend
proposed in respect of 2020.
One Vistry – a stronger business
At the start of the year, our focus was
on maximising the benefits from the
combination and delivering on the
compelling strategic rationale for
the Acquisition.
The integration has been successful
with the benefits ahead of plan. The full
synergy run rate of £44m to be delivered
by the end of 2021 is 26% greater than
initially expected and will be achieved at a
lower than expected cost
We are a top 5 national housebuilder
set to deliver significant growth in
revenue and profits in 2021. The Group
operating structure has the capacity
to deliver c. 14,000 completions from
both Housebuilding and Partnerships,
representing an additional c. 35%
capacity on the 8,954 completions
delivered in 2020.
Vistry Partnerships, a key driver of the
Acquisition rationale, has strengthened
its unique market leading position during
2020, delivering growth in profits and
margin progression. We expect further
significant growth in 2021 with the
business on track to meet its 2022
targets of £1 bn revenue and a 10% plus
adjusted operating margin.
2020 review
I am incredibly proud of all the
Group has achieved in 2020 and
would like to thank our employees,
subcontractors and suppliers for
their effort and commitment.
Despite the obvious challenges
of 2020, I firmly believe we
finished the year as a much
stronger business.
Building high quality homes and
providing our customers with
excellent service has remained a
key priority and I am delighted this
is reflected in our HBF customer
satisfaction score, with the Group
again set to achieve the highest
5-Star rating for 2020.
“The safety, health
and wellbeing of
our employees,
subcontractors,
suppliers and
customers is our
top priority”
10 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
Vistry Group has capability across all
segments of the housing market and
is in a unique position to maximise
development opportunities across
multiple housing tenures, using both
its leading housing brands, Bovis
Homes and Linden Homes, alongside
Vistry Partnerships. We are seeing more
and more attractive opportunities like
this where the business works as one
to maximise output and returns.
Sustainability
At the same time as restructuring and
integrating our operations, we set
ourselves the challenge to review our
priorities and enhance our focus on
the sustainability of our operations.
The enlargement of the Group, and
the addition of the Vistry Partnerships
business presents exciting opportunities
to enrich our purpose of developing
sustainable new homes and
communities across all sectors of
the UK housing market.
We consulted widely with stakeholders,
and reviewed our objectives for our
people, our operations and our homes
and communities. We have established
a range of targets for the current year,
set out in detail in this report, and
including our commitment to establish
our timetable and plans to achieve
Net- Zero Carbon, on which we intend
to conclude by the time of our half year
announcement in September 2021.
The nature of our business offers
many key areas where we can make
a difference, from minimising the
environmental impact of our operations,
and enhancing biodiversity on our sites,
to enhancing the communities which
we serve, both by creating high quality
homes and great places to live, and by
the opportunities generated for local
people and businesses.
We are also actively addressing diversity
and inclusion. We have consulted with
our people on how we might improve in
this area and are now in the process of
identifying our priorities and an action
plan for the year.
I have been greatly impressed by the
passion with which our team has
embraced these challenges and look
forward to the formal launch of our
strategy in the Spring, and to reporting
our progress over the coming year.
“Assuming stable market conditions the
Group remains confident it can deliver a
step-up in completions in FY21”
Cladding and building safety
The Group is closely monitoring the issue
of building safety. Recent changes to
regulations and guidance, made in light of
the Grenfell tragedy in 2017, are causing
some buildings constructed in compliance
with regulations at the time to now be
deemed non-compliant, in some cases
resulting in significant rectification
costs. We are concerned by the plight
of leaseholders facing potentially large
and unaffordable costs for remediation
and are working with the Home Builders
Federation in order to derive an industry
solution that is both practical and fair
to all parties. We are supportive of the
Government’s proposal for an industry
levy to accelerate remediation works and
the resolution of this issue.
In the aftermath of events at Grenfell,
potentially relevant buildings were
identified, and clients contacted, in
order to carry out investigations and
consider solutions where necessary.
Vistry Partnerships has over the past
three years worked with clients to
rectify the position on a small number
of buildings over 18 metres and
continues to liaise closely with clients
where improvements to meet current
regulations are required.
The Group has also identified ten projects
where it has acted as developer, which
are occupied by leaseholders, and where
remediation works may be required.
Whilst the Group is not aware of liability
in any of these cases, we are committed
to proper consideration of any relevant
case and to meeting any liability which
we identify, and, in addition, to offering
appropriate support in circumstances
where building owners do not meet
their obligations. We anticipate that this
will give rise to financial liabilities, which
we have estimated to be between £10m
and £25m.
We have brought forward provisions in
the balance sheet of £9.9m, and have
now increased this to £20.9m, by way of
an exceptional charge to the Profit and
Loss account of £11m.
Current trading and outlook
We have seen a strong start to the year
with a private sales rate per active site
per week of 0.66 in first 8 weeks
(2020: 0.64), and the underlying sales
rate ahead of the positive start to 2020.
The last 4 weeks have been particularly
strong with a private sales rate of 0.78.
Pricing remains firm and we see a good
supply of materials and labour with
minimal cost inflation. We have a strong
forward sales position with 64% of total
Housebuilding and mixed tenure units
for 2021 secured and the partner delivery
forward order book totals £880m.
We are alert to the wider market
uncertainty and the changes for
Housebuilding from an end to the
existing Help to Buy scheme at the
end of Q1 and the end to stamp duty
holiday now in Q4. We have seen no
impact from this to date, with good
levels of sales under the new Help to Buy
scheme and the majority of reservations
taken since December last year for
completions post March 2021 when the
stamp duty holiday had been expected
to end.
Assuming stable market conditions
we expect to deliver a step-up in
Housebuilding completions in 2021 to
c. 6,300 units and an improvement
in adjusted gross margin to c. 22%.
Partnerships expects to deliver significant
growth in higher margin mixed tenure
completions in 2021 and is on track to
meet its 2022 targets of £1bn revenue
and an adjusted operating margin of
10% plus. The Group remains confident
it can deliver more than double profit
before tax(11) to at least £310m with EPS in
2021 higher than in 2019.
(11) Key financials are on an adjusted basis to include the
proportional contribution of the joint ventures and before
exceptional expenses of £31.0m and amortisation of
acquired intangibles of £14.2m in 2020
Vistry Group PLC | vistrygroup.co.uk | 11
Bovis Homes Group PLC | 11
Chief Executive’s report | Greg Fitzgerald
Operational update
Trading performance
There was a strong start to 2020 with
a step up in our private sales rates and
positive price momentum, however
from the third week in March we started
to see a significant impact, particularly
on our Housebuilding business, from
Covid-19. Our developments temporarily
shut down from the end of March with a
return to site commencing in late April.
Sales trends picked up from the start of
May and we saw a return to more normal
levels by the end of May.
In the second half we saw sustained
strong demand with the Group’s private
sales rate per outlet per week increasing
by 15% in the period to 0.62 (proforma
H2 19: 0.54). Encouragingly, customers
continued to reserve homes during the
second national lockdown in November
and December, with our underlying sales
rate up c. 20% in the last 6 weeks of
the year.
The Group delivered completions in
2020 at the top end of our revised
expectations reflecting a strong second
half performance. Pricing remained firm
through the year and overall, we saw a
modest increase in underlying prices.
Help to Buy remained important with
36% (2019: 23%) of our Housebuilding
completions in the year utilising the
scheme, albeit this is lower than the
industry average. Our land bank is well
positioned for the future following our
strategy, over the last two years, to
purchase land for the development of
smaller homes and with lower average
selling prices. In the year, 8% (2019: 7%)
of Housebuilding completions utilised
part exchange.
Vistry Housebuilding (11,12,13)
Vistry Partnerships (11,12,13)
Housebuilding delivered a total of 4,652
(2019 proforma: 6,884) completions,
including 820 (2019 proforma: 946)
from JVs. Private completions in the
year totalled 3,668 (2019 proforma:
4,775) with 984 (2019 proforma: 2,109)
affordable units. Total Housebuilding
average selling price was £302.5k with
adjusted revenue from Housebuilding
activities in the year totalling
£1,312m (2019 proforma: £1,821m).
Housebuilding is currently selling on
149 active sites and we expect the
average for 2021 to be c. 150 sites.
Housebuilding adjusted gross margin
declined to 17.6% (2019: 22.4%)
reflecting the wide-ranging impact
of Covid-19. The business incurred
additional costs directly related to
the period of lockdown, lower levels
of operating efficiency from social
distancing and the lengthening of
development period expectations.
A total of £10.2m of non-productive
direct costs were identified as impacting
the first lockdown period, all of which
were recognised in the first half.
Margin was also impacted by our
policy of recognising the full sales and
marketing costs incurred during the
year, similar to administrative expenses,
rather than apportioning them into
work in progress. Our Housebuilding
business is well positioned going
forwards and we expect a step up in
housing adjusted gross margin for 2021
to c. 22% as we move towards the
24.2% gross margin embedded in the
land bank.
Vistry Partnerships made good progress
in the year, pursuing its strategy of
accelerating growth in higher margin
mixed tenure development revenues.
With its high level of pre-sold units
and contracting revenues, Vistry
Partnerships demonstrated its strong
market resilience in the first half of the
year and led an early return to site in
late April.
Mixed tenure completions increased
by 28% in 2020 to 1,479 (proforma
2019: 1,158) units including 608
(2019 proforma: 530) JV units, with
completions in the second half up
70% year on year to 990 (proforma
H2 19: 584). The average selling price
of mixed tenure units in the year was
£204k resulting in mixed tenure
revenue of £238m (2019 proforma:
£195m) for 2020. Vistry Partnerships
is currently selling on 30 mixed tenure
sites and we expect this to increase to
an average of c. 32 for 2021 with
further growth into 2022
Partner delivery(14) revenue for 2020 was
£490m (2019 proforma: £513m), with
equivalent units increasing to 2,823
(2019 proforma: 2,556).
Total adjusted revenues from Vistry
Partnerships increased by 3% to
£728m (proforma 2019: £708m) with
adjusted operating margin increasing
to 6.7%. This margin improvement has
been driven by the strong increase in
higher margin mixed tenure revenues
and is in-line with the business’ target
of achieving at least a 10% adjusted
operating margin in 2022.
“Our strategic focus
for our customers
remains the delivery
of a seamless,
transparent end to
end experience”
Integration and synergies
Following completion of the Acquisition
on 3 January 2020, the Group set out
to integrate the two housebuilding
businesses of Bovis Homes and Linden
Homes as efficiently as possible, taking
the best from each business to strengthen
the overall Group position. This was
delivered ahead of plan and positioned
us well to effectively respond to the
challenges of Covid-19 from late March.
Housebuilding was re-organised into
13 operating regions with four regional
office closures. To maximise the benefit
from two brands, there has been a
complete review of both the Bovis Homes
and Linden Homes product range to
ensure product differentiation and clear
market positioning. We also refreshed
both the Bovis Homes and Linden
Homes brand identities, with Vistry
Partnerships being successfully
rebranded on acquisition.
12 | Strategic report | Our business and strategy
The technical specification has been
aligned across our product range to
maximise best practice and efficiency, and
all our Group procurement agreements
have been renegotiated. We have strong
central services teams to support the
operational businesses including sales,
marketing, land, health & safety, HR,
and IT. There has been a significant
investment in IT to deliver high quality
and consistent business processes and
systems across the business including
the implementation of COINS across
the enlarged Housebuilding business
and Vistry Partnerships. Third party
dependencies for the acquired business
were all removed by the end of 2020,
ahead of our initial expectations.
Synergies are expected to be 26%
greater than initially expected at £44m
p.a. with the full run rate to be achieved
by the end of 2021. The expected cost
to achieve this is c. £27m, which is lower
than the initial target cost of £35m.
The synergies impacting 2020 are
estimated at £25m, flowing through
both the Group’s cost of sales and
administrative costs. Exceptional
integration costs of £20m have been
recorded in 2020 with a further c. £7m
expected in 2021 as we complete the final
integration of systems and processes.
Quality and customer service
Building high quality new homes and
providing our customers with excellent
service has remained a top priority
during 2020 and we are set to achieve
an improved HBF Customer satisfaction
score for 2020 and the maximum
5-Star rating. It is particularly pleasing
to note that all three divisions within
the Housebuilding business, as well as
the Partnerships business, will achieve
a 5-Star rating. The new HBF year has
started well, and we are continuously
striving to deliver further improvement.
We are also very focused on improving
our score for the HBF customer
satisfaction survey which is sent out
9 months after completion and this
metric has been added to our annual
bonus criteria and targets.
Our strategic focus for our customers
remains the delivery of a seamless,
transparent end to end experience which
makes us easier to do business with.
Strategic report | Our business and strategy
“Uniquely positioned to take advantage of
the strong, under supplied housing market”
We have rolled out our customer
relationship management platform,
Keys, across the enlarged Housebuilding
business during 2020, which provides
a single platform to deliver ongoing
improvements in our selling and service
capabilities and facilitates improved
customer communications. We have
plans to adopt the same system across
Partnerships in the near future.
People
Our people are key to the success of
our business and we are thankful to
all our employees for the enormous
commitment and hard work they have
given this year. We are conscious that
it has been a period of unprecedented
change and are very pleased that
our latest Peakon engagement study
reported a score of 7.9, an improvement
on the 7.6 in August last year and ahead
of the benchmark at 7.4. We have also
seen a reduction in our unplanned staff
turnover to 15%.
There has been a big effort to improve
employee communication channels
this year which has proved successful
and well received. We have placed a
significant emphasis on mental health
and during 2020 have trained up over
70 mental health first aiders across the
business and run half-day awareness
training for all line-managers. We have
introduced weekly ‘Time to Talk’ drop-in
sessions specifically designed to address
some of the challenges brought on by the
pandemic and working from home.
Our primary focus for training and
development during 2020 has been
on safety, health and environment
with content being digitised and
delivered virtually. Looking ahead, a
key area of focus will be leadership
training and succession planning in
the enlarged group.
Land
The Group remained active in the
land market throughout the year,
maintaining the size of our controlled
land bank at 40,218 plots (31 Dec 2019
proforma: 40,135). We continue to
see a good supply of attractive
opportunities that at least meet our
minimum hurdle rates.
In the year, Housebuilding secured
6,281 plots across 31 developments
and has a strong land pipeline, with
100% of land required for forecast 2021
completions secured.
Partnerships is investing in its owned
land bank to support its targeted
step-up in mixed tenure and in the
year secured 2,371 plots on 11 sites for
mixed tenure development. It is also
well positioned with 100% of the land
required for forecast 2021 mixed tenure
completions secured.
Strategic land is a key component of
the Group’s land supply and as at
31 December 2020 the Group had
a total of 34,053 (31 Dec 2019 proforma:
31,965) strategic plots. In the year, we
are pleased to have secured options
over 2,856 strategic land plots across
10 developments.
“Vistry Partnerships
demonstrated its
strong market
resilience during
the year”
(12) Proforma completions and revenue are calculated using
published data for Linden Homes and Vistry Partnerships
and represent the Vistry Group period of 1 January 2019
to 31 December 2019
(13) Completions include 100% of joint venture completions
(14) Formerly classified as Vistry Partnerships contracting
Vistry Group PLC | vistrygroup.co.uk | 13
Chief Executive’s report | Greg Fitzgerald
Vistry Housebuilding
Vistry Partnerships
Vistry Partnerships holds a strong and
unique position within the partnerships
market, combining higher margin
mixed tenure development and
market resilient cash generative
partner delivery.
The business has a clear and ambitious
growth strategy targeting the delivery
of £1bn of revenue, an adjusted
operating margin of at least 10%,
and a 40% return on capital employed
in 2022. This growth will be driven by
a rapid increase in higher margin mixed
tenure completions with mixed tenure
revenues to increase from 33% of total
partnerships revenues in 2020 to 50%
in 2022. The adjusted operating margin
for mixed tenure development ranges
from c. 11% to 18% as compared to
partner delivery with a c. 3% to
11% adjusted operating margin.
The accelerated growth is supported
by the division’s 11 operating regions
and continued expansion into
new geographies. The Group’s land
investment and supply, and its strategic
land capability will support the
growth in higher margin mixed tenure
development revenues.
The Housebuilding business is
focused on driving revenue growth
and delivering significant margin
improvement from its existing
operating structure. The business
has national coverage through its
13 operating regions with each
targeting annual output of between
550 to 625 units including JV’s,
giving an overall volume capacity for
Housebuilding of more than 8,000
units (2020 Housebuilding total
completions incl. JVs: 4,652).
The business has a high quality land
bank of c. 32,000 controlled plots
including JV’s located in desirable
edge or out of town location with
minimal exposure to London or
other city centres. Our focus is on
increasing the proportion of two and
three-bedroom homes where we
see the most resilient demand. With
two leading housing brands, Bovis
Homes and Linden Homes we are
focused on maximising the benefits
of dual branding supported by our
brand differentiation. Bovis Homes
is positioned to feature larger, more
distinctive homes with enhanced
design features and Linden Homes to
offer well designed, more competitively
priced homes.
The Housebuilding business is focused
on driving margins towards the
embedded gross margin of 24.2% as
at 31 December 2020 in the owned
and controlled land bank. This margin
improvement will be driven by a
combination of the acquisition of new
land with a minimum gross margin
hurdle rate of 25%, the pull-through
of strategic land which delivers an
enhancement to margin of c. 150 to
300 basis points, maximising sales rates
and driving improved efficiency through
high quality build and cost efficient
product, processes and output.
Balance sheet
The Group started the year with a net cash
position of £362.0m prior to the Acquisition.
As at the 30 June 2020 the Group reported
net debt of £357.3m. There was significant
deleverage in the second half resulting in a
net cash position as at 31 December 2020
of £38.0m. This was driven by continued
strong trading, good working capital
management at an individual business
level, and the ongoing benefits from the
combination of the enlarged business.
Looking forwards, the Group is targeting
a month-end average net debt position in
2021 of less than £200m as we build for
2021 completions and deliver a stronger net
cash position at 31 December 2021.
The Group is operating with substantial
funding headroom, with committed banking
facilities totalling £770m and well spread
maturities out to 2027.
While the scale of the land bank has been
maintained, the Group land creditor position
has reduced since Acquisition by £79m to
£323.2m as at 31 December 2020.
Group strategy
Vistry Group exists to develop sustainable
new homes and communities across all
sectors of the UK housing market with
‘Doing the right thing’ at the core of our
strategic focus and operations.
Following the formation of Vistry Group and
successful integration in 2020, we are a top
five national housebuilder with a leading
Partnerships business, uniquely positioned
us to take advantage of the strong, under
supplied housing market.
Dividend policy
With the Group’s strong second half
performance, the year-end net cash position
and solid forward sales, the Board is pleased
to confirm the resumption of dividend
payments with a 20 pence per share final
dividend proposed in respect of 2020. Going
forward the group is targeting to maintain
a strong balance sheet while operating with
a progressive dividend policy which allows
the Group to move towards a 1.75x dividend
cover over time.
Greg Fitzgerald
Chief Executive
14 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
The Aspen | 4 bedroom home
The Tors, Tavistock
The Aspen | 4 bedroom home
Whiteley Meadows, Whiteley
A top UK
housebuilder
and leader in
partnership
housing
Vistry Group PLC | vistrygroup.co.uk | 15
Our business model
Driving value across the cycle...
Vistry Group exists to develop sustainable new homes and communities across
all sectors of the UK housing market. That is our purpose and we have core
expertise and competitive advantage across all the areas we operate, with our
business model set up to deliver a strong performance across the cycle
Acquisition of
prime location
consented
land
Successful
conversion of
strategic
land
Delivering
across all
segments of
the housing
market
National
coverage
with local
expertise
Deliverable,
high quality
land supply
Maximising
opportunities
with partners
d
n
a
L
A
pproach
Delivering
excellent customer
service - High
quality customer
first business
First
class sales
advisors
Transparent
end to end
customer
journey
l
s
e
a
S
Do the
right
thing...
Build
n
si g
e
D
l
P
a
n
n
n
g
i
Working
with local
communities
to meet
their needs
Sustainable
and responsible
approach to all
that we do
In-house
planning
expertise
Excellent
reputation with
delivery
partners
High build
standards -
safely delivering
to programme
Well designed,
contemporary
housing ranges
Creating
places where
people aspire
to live
Construction
approach
tailored to
delivery
Common
specification
driving
value across
developments
16 | Strategic report | Our business and strategy
E
V I C
T
A
R
G
A
P
P
R
E
S
R
O
E
D
E
T
A
C
H
Do the
right thing
N
I
N
A
L
P
G
Working with
local communities
to meet their
needs
Creating
places where
people aspire
to live
Well
designed,
contemporary
housing
ranges
Delivering
excellent customer
service
First
class sales
advisors
S
A
L
E
S
Transparent
end to end
customer
journey
High quality
customer first
business
Excellent
reputation with
delivery
partners
High
build
standards
In-house
planning
expertise
N
S I G
E
D
Sustainable and
responsible
approach to all
that we do
Creating
places where
people aspire
to live
Well
designed,
contemporary
housing
ranges
Construction
approach
tailored to
delivery
Safely
delivering to
programme
Strategic report | Our business and strategy
...From our portfolio of brands
What we do
Vistry Group is a powerhouse of a business,
uniquely positioned to lead the way in the
UK housing market with a countercyclical
business model featuring Vistry Housebuilding
and Vistry Partnerships.
Our key asset is our people and they have risen
to the challenge magnificently during the first
year of the industry’s biggest integration for
more than a decade – while in the midst of the
harshest pandemic for a century.
It is our people – around 3,000 of them across
England – who have come together to live our
values of Integrity, Caring and Quality.
They have carried out their work according to
our ethos of Doing the right thing.
And they have delivered on our purpose
of developing sustainable new homes and
communities across all sectors of the UK
housing market.
Our 5 areas
of strategic
themes
Our
shareholders
£
Create best
return for our
shareholders
Our
customers
Putting our
customers
first
Doing the
Doing the
right thing
right thing
for…
for...
Our people
Putting people
at the heart of
what we do
Create quality
homes and
lasting
communities
Our
homes &
communities
Our
operations
Deliver safe
and efficient
operations
Vistry Group PLC | vistrygroup.co.uk | 17
Our business model
We have an unmatched portfolio
of brands – including Bovis Homes
and Linden Homes – with rich
histories and strong reputations,
and through this challenging year
we have retained a 5-Star HBF
Customer Satisfaction Rating as we
delivered high quality homes for our
customers and clients.
Vistry Housebuilding
Led by Keith Carnegie, the Housebuilding
business operates across 13 business units,
each with a regional office, which are
developing around 200 sites across England.
Our housing ranges, The Phoenix Collection, developed
by Bovis Homes, and the Linden Collection are designed
to meet today’s consumers’ needs. The design and
construction blend tradition and innovation, creating homes
and developments with contemporary living standards.
Our product range includes one-bedroom apartments
through to larger five-bedroom family homes.
1 Yorkshire
2 Mercia
3 East Midlands
4 West Midlands
5 Cotswolds
7 Eastern
8 Kent
9 South East
10 Thames Valley
11 Southern
12 Western
6 Northern Home Counties
13 South West
18 | Strategic report | Our business and strategy
12374651213101198 Strategic report | Our business and strategy
The foundations of our ongoing
success come with our high-quality
land bank featuring 40,218 plots,
and a valuable pipeline of strategic
land plots totalling 34,053.
We are the fifth largest housebuilder
in the UK by volume and even though
Vistry has a short history, it is already
one of which to be proud, and one that
will build on over the years to come…
Vistry Partnerships
Vistry Partnerships is a market leader in
the high-growth partnerships business and
continues to flourish under the leadership
of Stephen Teagle.
It combines both partner delivery and development-led
capabilities and has a hard-earned reputation for delivery,
quality and sector knowledge across all housing tenures.
The business works closely with Governmental bodies,
housing associations and local authorities through its 10
operating business units, each with its own regional office.
1 North East
2 Yorkshire
6 East England
7 London
3 North West
8 Drew Smith
4 East Midlands
9 West
5 West Midlands
10 South West
Vistry Group PLC | vistrygroup.co.uk | 19
1294356,7810 Driving
value across
the cycle
20 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
The Aspen | 4 bedroom home
Shinfield Meadows, Shinfield
Vistry Group PLC | vistrygroup.co.uk | 21
Strategic priorities
Strategic priorities
Risks involved
Measuring success
Our people
1
See page 24
Investment in the development
and training of our people to
ensure a committed, motivated
and engaged workforce
• People capability and change
• Unplanned staff turnover
• Diversity and inclusion
• Employee engagement score
• Mental health
£
£
BONUS
£
Our customers
2
£
Delivering our customers quality
new homes and a high level of
customer service that meets
their expectations throughout
their entire journey with Bovis
Homes and Linden Homes
• Quality of product and
customer experience
• Ability to serve customers
during Covid-19 pandemic
See page 32
• HBF Customer Satisfaction
• NHBC reportable items
See page 34
• Accident frequency rates
• Environmental measures
See page 40
£
£
BONUS
£
£
Our operations
3
BONUS
£
Ensuring the health and
safety of our people and
subcontractors whilst
minimising our impact on
the environment
£
• Health and safety
performance
• Delivery of waste, climate
change and environmental
improvements
Our homes and communities
4
BONUS
£
£
Developing sustainable new
homes and communities
• Protecting wildlife, green
space and bio diversity
• Delivery of social and
affordable homes
• Delivering social value
£
• Green space and bio
diversity net gain
• Planning and community
BONUS
£
£
£
£
See page 44
• Profitability
• ROCE
• TSR
• Economic downturn
• Prolonged pandemic
£
restrictions
• Cash generation
Our shareholders
5
£
Driving enhanced returns for
our shareholders through
increased profitability, return
on capital employed and total
shareholder returns
£
22 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
Greg Fitzgerald | Chief Executive
Strategic
priorities
We have a clear set of strategic priorities
which underpin how we operate across
all aspects of our business and will support
driving towards our medium term targets
Vistry Group PLC | vistrygroup.co.uk | 23
BONUS
£
£
£
Strategic priorities
1
Our people
KPIs
Employee engagement survey
2020
2019
7.9
7.9
Unplanned staff turnover
15%
17%
As part of our response to Covid-19:
• Following consultation, we instigated
a temporary salary reduction.
We protected the lowest paid
employees (below £20k per annum)
to ensure that those who would be
most impacted by a decrease were
not affected. We were able to stop
salary reductions after two months
and were very pleased to have repaid
these in December to our colleagues
who were impacted.
• We furloughed a proportion of our
people at the time of peak uncertainty,
when we needed to close our
construction sites and the market for
housing transactions was impacted
most (24 March –27 April 2020).
During this period, we encouraged
those furloughed to actively volunteer
in their communities and all
salaries were topped up to full pay
by the Company. The volunteering
was a success and we are proud of the
contributions made by our employees
including support for the elderly, help
with distributing medicines and PPE,
landscaping and community services.
In the light of the recovery in our
markets and positive trading in the
second half, Vistry Group repaid the
monies received from the Coronavirus
Job Retention Scheme.
• With the ever-increasing prevalence
of mental health issues in the home
building and wider construction
industry, the other key focal point
in 2020 for the Learning and
Development ('L&D') team has been
the continued rollout of Mental Health
Training and support to the entire
Vistry Group.
Our business as usual approach to people
is guided by a robust framework of Group
policies and procedures and a team of
HR professionals.
As at 31 December 2020, the Group
directly employed 3,001 people
(2019: 1,360 within Bovis Homes).
This year the total employee turnover
rate increased to 33% (2019: 24%) due
in part to the number of redundancies
made during our integration period.
Pleasingly unplanned staff turnover
reduced to 15% (2019: 17%) which
is reflected in our overall people
engagement score of 7.9 (0.5 above
benchmark) from our Peakon staff
survey. Undoubtedly this stability and
pride in the Group contributed to our
strong Customer Satisfaction Score.
Communication and engagement
We recognise the importance of keeping
employees informed of operational,
financial and strategic business matters
and do this in a number of ways, including:
Vistry Voice
A weekly podcast from the Chief
Executive or other ELT member provides
regular light-hearted updates on a range
of topics including business priorities,
performance and an opportunity
to provide individual and collective
recognition across the business.
CEO briefings
Our respective CEOs of the Housebuilding
and Partnerships businesses engaged
their teams directly with further light-
hearted 2-way sessions - Keeping up
with Keith (Keith Carnegie, CEO Vistry
Housebuilding) and Tea with Teagle
(Stephen Teagle CEO Vistry Partnerships).
We work hard to understand
our employee views and ensure
that we provide a supportive
environment they can thrive in,
as we recognise that not being
able to attract and retain good
people is a principal risk to
our business.
£
2020 was a particularly testing period
for our employees and we pay tribute
to their resilience and capability in
delivering an excellent performance.
At the start of the year our priority
was to successfully integrate the
Housebuilding business and maximise
the very significant benefits from the
exciting Vistry Partnerships business.
This was a major piece of work,
which was then compounded by the
Covid-19 pandemic. Our operational
and financial performance against this
backdrop demonstrates the capability
and talent of the people we have within
our organisation, and throughout
the year we have sought to both
communicate and listen to understand
how our colleagues were feeling and
ensure we maximise the support we
could offer.
24 | Strategic report | Our business and strategy
?
v ice
v ice
Strategic report | Our business and strategy
Callum | Facility Manager
Putting
the focus
on people
Vistry Group PLC | vistrygroup.co.uk | 25
Strategic priorities | Our people
Vistry Roadshow and Q&A
Our whole ELT travelled across our
Group’s geographical locations at
the beginning of the year to deliver a
bespoke presentation to both site and
office staff to welcome everyone to
our new Vistry Group and set out the
corporate identity and business strategy.
During Q4, a virtual event was held
by our CEO, COO and CFO to provide
an update on progress made against
our strategy and dedicated 11.5 hours
so that 1,130 questions could be
responded to directly.
Employee representatives
Each business unit meets regularly with
employee representatives to discuss
matters that concern our people.
Intranet
Two-way communication is encouraged
across all employee engagement platforms
and specific exercises to understand
employee viewpoints are conducted.
People Forum
As standard, we run a People Forum
periodically throughout the year.
The inaugural session as Vistry Group
was hosted by one of our Non-Executive
Directors Nigel Keen and attended by
employee representatives from each of
our business units. Feedback from these
forums is directly fed back to the Board
by the Non-Executive Director and any
actions that are needed as a result are
followed through.
Engagement Survey
In addition, a confidential Peakon
employee engagement survey is sent
to all employees every quarter covering
a number of topics that are assessed
regularly by the senior leadership team.
Following the challenges of integration,
and the tough first few months of the
pandemic, in August we were very
pleased to achieve a high engagement
score of 7.6 (against an industry
benchmark of 7.2), with a participation
rate of 70% and delighted to improve
on that in January 2021 with a score of
7.9 (against a benchmark of 7.4), with a
participation rate of 81%.
26 | Strategic report | Our business and strategy
Engagement Survey
August 2020:
Participation rate of 70%
January 2021:
Participation rate of 81%
We will also continue to develop this
platform to measure progress in respect
of our diversity and inclusivity objectives
throughout 2021.
Culture Audit
During the year the Board also sponsored
a Culture Internal Audit, supported by
an independent third party overseen by
our Internal Audit Team. The purpose
was to understand the mood of our team
and how well the culture of the newly
merged businesses was settling and
developing, given both the pandemic and
the impact of the integration, further
demonstrating a strong commitment to
maintain the people agenda at the heart
of our organisational priorities.
The broad findings of this review reflect
improvements made during the year
to galvanise our business and there is
strong positivity within the business and
a real affection amongst our people for
who we are as Vistry Group. The report
shows that our teams have bought
into the enlarged business and the
sustainable communities and homes we
now create are a source of real pride and
the engagement levels are very strong.
A key learning arising from this work was
a pause on discretionary new process and
system development, allowing the major
changes to settle before pressing on
with further planned improvements.
Other recommendations from this
report are being reviewed by our Audit
Committee and will be addressed with
the ongoing and new initiatives due
in 2021.
Diversity and inclusion
We recognise that our existing diversity
is a strength, as evidenced from our
recent employee engagement survey.
However we are keen to expand the
agenda and take a more proactive
approach, identifying key priorities and
ways in which we can continue to enrich
the Vistry proposition for both our
people and the communities we serve,
and to contribute towards greater social
mobility by creating opportunity.
The Group passionately believes in
equality and diversity for all and does
not discriminate between employees,
or potential employees, on the grounds
of gender, sexual orientation, age,
colour, creed, ethnic origin or religious
belief. To that end, we have a Diversity
and Inclusion policy which is rigorously
enforced and promoted.
It is also Group policy to give full and
fair consideration to the employment
needs of disabled persons (and persons
who become disabled whilst employed
by the Group) where requirements
may be adequately covered by these
persons and to comply with any current
legislation with regard to disabled
persons. The Group’s policies are
supported by the Group’s Dignity at
Work policy which prohibits bullying,
harassment or victimisation.
During 2020, Vistry set up a Diversity
and Inclusivity (D&I) ‘working group’
comprising various members of staff
from across the business to reflect on our
current experiences and share insight.
We recognise that our existing diversity
is a strength, but that there are further
opportunities to ensure we are reflective
of the communities in which we work,
and to contribute towards greater
social mobility.
Strategic report | Our business and strategy
Elouise & Joel | Sales Consultants
Putting people into the
heart of what we do
Vistry Group PLC | vistrygroup.co.uk | 27
£
Investing
in our
people
£
BONUS
£
£
Strategic priorities | Our people
Initial recommendations were presented
to the Executive Leadership Team in
December and we are progressing a plan
to embed these ideas into our culture
and operations, with sponsorship from
the ELT. The outputs of the working
group identified opportunities for a
stronger and more consistent ‘Vistry’
voice in respect of D&I matters, with
the aims of both the Housebuilding and
Partnerships businesses aligning.
We are currently identifying priorities in
this regard and will propose our targets
to the Board in April.
In parallel we have sought to improve
our baseline data in terms of diversity
within the Group and have included
questions linked to the D&I agenda in
recent staff surveys to understand a
wider cross section of attitudes in this
area. We consider we are well placed to
use existing communication channels
to explore and celebrate all aspects of
diversity with our teams during 2021.
Headcount Analysis by role and gender
Role
Female
Male
Total
Non-executive directors
Executive directors
Senior managers
Managers
2
1
31
186
4
6
130
361
6
7
161
547
Site based staff
37
964
1,001
Support staff
Apprentices
Total
Analysis by age
Age
<21 years
21 – 30 years
31 – 40 years
41 – 50 years
51 – 60 years
>60 years
Total
705
524
1,229
5
45
50
967 2,034
3,001
No. of
employees
69
550
753
752
698
179
%
2.3
18.3
25.1
25.1
23.2
6.0
3,001
100%
Jobs and Training
The Covid-19 pandemic has brought
challenges for all and the key focus
for L&D in 2020 has been on Safety,
Health and Environment and mandatory
related subjects to ensure a safe building
environment and support the business
through the pandemic.
To facilitate this the L&D team have
digitised learning content, developed and
rolled out virtual training delivery and
continued the expansion and evolution
of the digital training booking systems
and online learning platforms, to ensure
availability and support to all Vistry Group
staff whether they be at home, in the
office or working on site.
Working closely with the CITB and
NHBC the L&D team have developed
the training curriculum to reach a 98%
virtual delivery including Site Supervisors
Safety Training Scheme ('SSSTS'), Lifting
Operations and Lifting Equipment
Regulations ('LOLER'), Train the Trainer
and Temporary Works, allowing Vistry
Group to continue its operations and
to train and develop employees during
the pandemic; ensuring compliance on
our sites. The switch to virtual learning
has allowed the team to reach a broader
geographical cross section of the
business, showcased in the delivery
of over 312 days of Site Management
Safety Training up 10% from 2019.
The option of virtual delivery has
been very well embraced and is
proving popular with delegates and the
business by reducing the impact of
travel and accommodation.
“Web based learning if done like this,
can be just as good as being physically
in the classroom”
Vistry Group Site Manager
The blended development portfolio of
virtual (via platforms such as Teams),
bespoke eLearning and webinars has
been particularly well received in the build
community, enabling them to take less
time away from site but still get the same,
if not better, quality training they require
(as showcased in the recent feedback).
Apprenticeships and Trainee
Programmes
L&D have worked closely with the
Government Apprenticeship Service
and apprenticeship providers across the
country to ensure that our apprentices
have access to learning and the support
that they require to continue working
through their programmes.
However, Covid-19 has created the
need to place the usual approach to
the recruitment of apprentices on hold,
with recruitment only aligned to specific
contractual development obligations.
Our Group apprentices are taking
subjects from Civil Engineering, Quantity
Surveying, Accounting and Contracting
to Carpentry and Joinery, Bricklaying and
Site Supervision.
Project Support – Site Management
Safety Training Scheme ('SMSTS')
Working with Subject Matter Experts
(SMEs) across the Vistry Group the
L&D team have quickly redesigned and
adapted the Train the Trainer programme
to focus on virtual training delivery,
allowing the team to better support the
current needs of the business and the
SME community. For many this is the first
time they have delivered training virtually
and the L&D team are now running
weekly virtual training sessions to
upskill the community to assist in the
transfer of knowledge and skills into
the business and support successful
project implementation.
Practical
Time well spent
Good material Refreshing
Highly recommended
Professional
Well presented
Motivating
Valuable
Fulfilling
Helpful
Challenging
Stimulating
Thorough
Exceptional
28 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
Health and wellbeing
Respect for employee rights
Mental Health Training
With the ever-increasing prevalence of
mental health issues in the home building
and wider construction industry the other
key focal point in 2020 for the L&D team
has been the continued rollout of mental
health training to the entire Vistry Group.
Led and delivered by our two accredited
Mental Health England First Aid
Instructors, the team have redesigned
all training to be delivered in a virtual
environment and to date have trained
over 70 Mental Health First Aiders
throughout the business to raise
awareness of the issues and support
our people.
As part of our commitment to the mental
health and wellbeing of our employees,
our accredited instructors have also set
up regular community meetings with the
Mental Health First Aiders to support
their mental health and discuss and share
best practice.
In our continued effort to support the
home building and wider construction
industries our two Mental Health First Aid
Instructors delivered a training session for
the HBF Directors and Managers
at their headquarters in London in
February 2020. Mental Health First Aid
training has continued to be delivered
virtually to our people throughout 2020.
The Group operates solely in the UK
and complies with all relevant legislation
and regulations. As a result, human
rights issues are not deemed as a
significant risk to the business and the
Group does not operate a stand-alone
human rights policy.
In addition, the Group believes that it
has a key role to play in ensuring
that employees have an appropriate
work life balance. We seek to minimise
weekend and late night working
and allow the purchase and sale of
holiday days. We also encourage flexible
working, which significantly increased
during the pandemic, and offer enhanced
maternity, paternity, adoption and shared
parental leave. During the pandemic we
have encouraged our employees working
remotely to spend time outside and to
increase their use of flexible working.
We have also implemented a range of
events and support material covering
home-schooling, remote working, stress
relief and mental health.
At Vistry Group, we also recognise
that modern slavery occurs in the
construction industry and that it is a
risk to our business. We operate an
Anti-Slavery and Human Trafficking
Policy which outlines our zero-tolerance
approach to modern slavery and human
trafficking and supports our efforts to
combat modern slavery.
Our Modern Slavery Act working group
oversees the Group’s approach to
eliminating modern slavery from the
business. It comprises a collaborative
cross-functional team which meets on an
at least quarterly basis to drive forward
our work against modern slavery.
Vistry Group partners with Supply Chain
Sustainability School and is a member
of the Modern Slavery Engagement
Programme which aims to increase
awareness and provide guidance and
training to our supply chain.
In respect of the supply chain, our
onboarding process ensures that our
suppliers and subcontractors have
an awareness of our modern slavery
commitments along with our expectations.
Our Group suppliers have all confirmed
and provided copies of their own modern
slavery policies which is a pre-requisite to
supply the Group.
We have also pledged our commitment
to the Gangmasters and Labour Abuse
Authority Construction Protocol.
During 2020, we have ensured that our
people have access to a dedicated Modern
Slavery Awareness training page, which
provides guidance on understanding
modern slavery in the construction
industry, how to spot the signs of modern
slavery, contact details for relevant
agencies and details of our SpeakUp
whistleblowing hotline.
Our Speak Up hotline is operated by
EthicsPoint and can be used to report any
concerns of modern slavery. There were
no reports of modern slavery in the Vistry
Group made to EthicsPoint in 2020.
More detailed information can be
found in the Group’s statement, made
in line with the provisions of the Modern
Slavery Act 2015, on our website at
vistrygroup.co.uk/responsibilities/
csr-reports/2020.
Vistry Group PLC | vistrygroup.co.uk | 29
Strategic priorities | Our people
Vistry Group continues to lead
the way in mental health support
The Group is proud to have signed
up to the Building Mental Health
Charter, an industry initiative
being driven by the Home Builders
Federation and the Lighthouse
Construction Industry Charity.
Vistry’s culture promotes the view that
its workplace environment should
enrich mental and physical wellbeing
for everyone who works for us, or on
our behalf. This has become all the more
important during the Covid-19 pandemic
and the Group has undertaken a number
of initiatives aimed at supporting our
people through the challenges that the
current situation poses. This has included
implementing agile working hours to
support parents who need to home
school their children, setting up weekly
‘time to talk’ sessions to prevent isolation
and encourage employees to share their
lockdown solutions to supporting health
and wellbeing. In addition all employees
are being encouraged to undertake
outside exercise in daylight hours in line
with our agile working policy and the ELT
and business unit executives are leading
by example and regularly communicating
the importance of exercise in maintaining
good physical and mental health.
Time to talk
Mental health matters
30 | Strategic report | Our business and strategy
Reach out
You don’t have to suffer in silence...
World Suicide
Prevention Day
10th September 2020
Support is available from these charities...
In 2021 the Group will develop an
employee health and wellbeing
programme and through consultation
with employees through its regular
Peakon Surveys will further develop
its workplace practices and employee
benefits to encourage better health and
wellbeing amongst its workforce.
We will monitor the success of our
approach by targeting improvements in
absenteeism, retention and productivity
and use these metrics to target
investment in areas that generate the
greatest benefits for our employees.
We are also very proud of our charitable
partnership with Mind Mental Health.
We continue to support this important
charity as part of our agreed charitable
contribution and through employee
fundraising activities. In October 2020
Vistry Group were involved in the
‘Vistry Velo’ a charitable event to
promote World Mental Health Day.
The Vistry Partnerships Vistry Velo took
place over 10 days at the start of
October 2020. The aim of the event was
for employees across Partnerships to get
out on their bikes and together cycle
the virtual distance between each of the
regional offices.
Staff were encouraged to involve their
friends and family, where possible, as
the overall mission was to give people
motivation to be outside and do some
exercise, which both have very positive
effects on mental health. The charity
team leading the event worked closely
with Dom, Vistry’s Mind account
manager, who ensured the mental health
benefits were shared as one of the top
objectives from the event. The Vistry
Velo ended on World Mental Health Day,
allowing everyone to reflect on how
the week went and reinforcing the
Mind message. Overall, the fundraising
event was a huge success, raising over
£30k for Mind and seeing each Business
Unit across the UK, getting fully involved
in the activities.
Helpful links
Construction
industry helpline
0345 605 1956
lighthouseclub.org
Mind helpline
0300 123 3393
mind.org.uk
Samaritans helpline
116 123
samaritans.org
CALM (Campaign Against Living Miserably)
0800 58 58 58
thecalmzone.net
Strategic report | Our business and strategy
Vistry Group
backs industry’s
mental health
campaign
£
BONUS
£
£
£
Vistry Group PLC | vistrygroup.co.uk | 31
Strategic report | Business overview Strategic priorities
Strategic priorities
Strategic priorities
2
Our approach
Our ethos and shared values ensure
we continue to do the right thing
for our customers, putting them at
BONUS
the core of everything we do.
Progress in 2020
During 2020 we have remained very
focused on service delivery, despite
the challenging wider operating
environment, and are very pleased to
have achieved a 5-Star rating for the
HBF independent benchmark Customer
Satisfaction Survey. This means that over
90% of our customers would recommend
us to their family and friends.
We are also pleased to report that
our NHBC Reportable Item score for
2020 of 0.28 is in-line with the
industry benchmark.
Throughout 2020 the safety of our
employees and customers has been the
top priority and we have evolved our sales
and customer services processes in line
with Government guidelines. We have
kept our customers fully informed of
these changes with our websites and
email communications clearly explaining
the required safety precautions and
changes put in place to safeguard our
customers and our people. Our aftercare
provision has remained available
throughout, supporting our customers
with essential emergency issues during
the lockdown periods.
Customer journey
Our strategic focus remains on the
delivery of a seamless, transparent end
to end experience for our customers,
making us easier to do business with.
32 | Strategic report | Our business and strategy
£
£
Our customers
Delivering quality service and homes for our customers
remains a key strategic commitment
KPIs
2020
2019
HBF Customer Satisfaction Survey
5
5
NHBC Reportable Items
0.28
0.23
£
A priority in the year has been the roll-
out of our bespoke ‘Keys’ customer
relationship management platform across
the enlarged housebuilding business,
building upon the digital capabilities
previously deployed at Bovis Homes.
Keys provides a single platform to deliver
our on-going improvements in selling
and service capabilities and ensures the
visibility to our people, enabling improved
communications with our customers.
With their online account, our customers
can reserve their new home with
only 6 clicks on their mobiles, and we
have already taken more than 1,400
reservations this way.
We are introducing immersive 3D
experiences that enable a full digital site
visit where customers can walk through
the development, enter and explore the
homes and gardens, and make options
to tailor and personalise their experience.
These choices can then be provided
in truly personal and individual digital
brochures. Initiatives to date have been
very well received and we are looking to
roll-out this content across a wider range
of developments in 2020.
We highly value feedback from our
customers and proactively use it to
identify where and how we can improve
on our communication channels.
The launch of a new Bovis Homes Website
and the introduction of a trial of web chat
is a great example of how we strive to
provide our customers with what they
want and a greater choice of channels
with which they can interact with us.
Our stable of well recognised and
carefully positioned brands, Bovis Homes,
Linden Homes, Drew Smith and Vistry
Partnerships and product ranges, the
Phoenix range and Linden Collection,
ensure we have a breadth of offering that
meets our customers’ needs.
Further positioning and brand refresh
work has been completed this year with
the introduction of new uniforms and
site branding.
The implementation and evolution of our
business systems and processes during
this year has enabled us to develop and
deliver more on-line training content
than ever before. Subject matter experts
have produced tutorials sharing their
knowledge and providing insights, hints
and tips to the wider workforce. We have
continued to work with the Institute of
Customer Service to ensure best practice
insight is provided from both within and
outside of industry.
Priorities for 2021
£
Our customer centric approach will
continue. We will continue to deploy
capabilities from our digital roadmap
including the final migration of our
marketing and prospect management
platforms onto the Dynamics platform
within Keys. This will complete the
single customer journey on one single
platform, from looking at buying a new
home to the end of the customer’s
warranty period. We will continue to roll
out the 3D site capabilities across more
new developments and explore how
these capabilities can be used to further
improve customer experience. The Keys
CRM will be rolled-out across Vistry
Partnerships in 2021.
We are supportive of the Government’s
planned New Homes Ombudsman
and welcome its aim of further
raising standards of new homes
across the country whilst providing
customers an independent channel
to resolve complaints.
Strategic report | Our business and strategy
Olivia and Edward:
Pavillions, Kenilworth
Keys
Delivering
for our
customers
Vistry Group PLC | vistrygroup.co.uk | 33
Strategic priorities
3
Health and Safety
The safety of our people, and those
who work with us, is our top priority.
Our purpose is to prevent work-
related death, injury and ill health,
and we comply with a framework of
management systems to ensure the
health and safety of our people.
£
Health and safety is one of the first topics
to be covered in executive meetings, and
is highlighted early in our new starter
induction, with clear linkage to our values
and ethos. We influence and engage
stakeholders, create knowledge and
awareness of health and safety risks, and
encourage positive behaviour change via
a dedicated programme linked to our new
starter induction. This year more than
ever, looking after our people’s health and
safety was a priority for our ELT and we
moved fast to enact changes and invest in
improvements to protect employees and
subcontractors during the pandemic.
£
A new SHE Management System
was introduced in March 2020 which
incorporates the existing Safety,
Health & Environmental compliance
visits, and introduces an average rating
per inspection. The inspection evidences
compliance with safety standards across
our sites, and highlights areas requiring
more focus.
34 | Strategic report | Our business and strategy
Our operations
KPIs
Accident Incident Rate (AIR)
SHE
2020
2019
361
302
Lost Time Incident Rate (LTIR)
0.32
0.33
Accident Frequency Rate (AFR)
0.15
0.13
Service Strike Frequency Rate (SSFR)
24.59
73.97
Response to Covid-19
Committed to Safety and Health
The challenges we faced in 2020 were
overshadowed by the Covid-19 pandemic.
With very little notice, we acted to safely
shutdown our operations. This was
followed by intense planning incorporating
BONUS
government guidance and via consultation
with our stakeholders, to restart our
operations with enhanced safe systems
of work including additional procedures
and protocols.
We have urged our people to work from
home wherever possible, ensuring that
appropriate equipment and support is
available; implemented social distancing
measures throughout our sites and
regional offices; provided training and
instruction to our workforce through
a series of online tutorial videos and
webinars; and, continue to monitor these
procedures on a regular basis, updating
them in line with new government
information. We recognise that working
from home, home-schooling, health
and mental health stresses are a real
risk and we have invested in additional
communication and support mechanisms
and allow flexible working wherever it is
feasibly possible.
£
Our SHE department is led by a Group
SHE Director, with a large team of skilled
SHE professionals to provide support
and guidance to our stakeholders and
workforce whilst monitoring our
systems and activities to mitigate risk.
Compliance with our SHE management
system is verified through internal and
external site inspections. Between March
2020 (when we began recording internal
compliance scores) and December 2020 we
carried out 2,560 SHE Site Inspections and
achieved 91% compliance; we will aim to
improve on this figure in 2021.
During the year we established a new
Safety, Health and Environmental
Leadership Team (SHELT), as a sub-
committee of the ELT, chaired by the COO,
responsible to the ELT for matters of policy
and group performance. Health and safety
are one of the first topics to be covered in
executive meetings, and it is highlighted
early in our new starter induction, with
clear linkage to our values and ethos.
Whilst it is difficult to completely mitigate
risk, we believe injuries are avoidable
and we shall work tirelessly to improve
performance and ensure our Accident
Incident Rate (AIR) reduces from its current
position of 361 to below that of the HSE
benchmark for 2021 (Calculations based on
number of reportable accidents divided by
number of people on site x 100,000).
£
Strategic report | Our business and strategy
Committed
to health
and safety
Comprehensive health
and safety training
for all employees
Vistry Group PLC | vistrygroup.co.uk | 35
Strategic priorities | Our operations
The 2020 Group AIR finished on 361 per
100,000 persons employed (including
subcontractors). This is an increase from
December 2019 (302) however, whilst in
no way taken lightly, some increase was
perhaps to be expected when we merged
three businesses and two systems.
Overall, we were pleased that we remain
below the Health and Safety Executive
Construction Industry Average, but we will
not be complacent and are committed
to improving.
We are also fully committed to enhancing
our existing mental health awareness
arrangements and providing necessary
support to our employees when they
need it. We have over 70 directly employed
trained Mental Health First Aiders on hand
to provide essential emotional support;
and we have developed a Mental Health
Committee dedicated to raising awareness
through various campaigns in conjunction
with our Mental Health partners MHFA
England and Mind.
Priorities for 2021
We aim to deliver best in class health
and safety through the regulatory SHE
framework in place that is regularly
monitored and reviewed. We look to
enhance our proactive and visible SHE
management culture led by a team of
executive directors, regional directors
and managers that addresses mental
health and work-related stress among
other priority issues.
We are targeting zero harm and significant
incidents by minimising the risk of low-
frequency, high impact catastrophic
incidents to our workforce by the strict
application of ‘Set to Work Protocols’
We are supporting the ‘Building a
Safety Future Charter’; a Building
Safety Programme implemented by the
government to ensure that existing
buildings and those built in the future
are safe for residents. Vistry Group are
among a few companies selected to
participate in the framework pilot.
Waste and resources
We are passionate about reducing our
waste and maximising efficiency and
recycling. We identify, manage and
mitigate all environmental impacts through
our ISO 14001 certified management
system, supported by a dedicated team of
internal auditors and SHE professionals.
We make our people aware of our
environmental standards and policies that
are integrated into the system through
training, instruction and via our intranet.
Use of our Standard Operating Procedure’s
ensures consistency, governance and
control and effective risk management by
mitigating issues at source.
Our waste recycling data for 2020
is as follows:
Division
Year
2020
Recycle
%
Vistry Group
Q1
Q2
Q3
91.19%
94.12%
96.12%
Q4
96.97%
Annual total
95.0%
Governing the way we work
We monitor environmental performance
improvement using key indicators
(e.g. carbon and waste), which are
regularly reviewed and reported to the
ELT and Board. We have a dedicated team
embedded within our SHE functions to
manage our environmental performance.
All environment incidents, performance
indicators and improvements are fully
investigated to identify root cause and
improvements required and are also
reviewed and reported to our ELT
and board. During the year we took steps
to enhance our control and monitoring
of pumping stations on sites, mandating
strict and uniform requirements across all
relevant sites, including reducing maximum
response times for reported incidents.
Priorities for 2021
Our ultimate priority for 2021 is to
achieve a 5% reduction in waste intensity
tonnes/unit whilst retaining recycling
rate of over 95%.
By delivering a year on year reduction of
waste, increased re-cycling and a reduction
of material to landfill we will continue to
reduce the impact on the environment.
This objective will be complemented by
procuring only FSC/PEFC certified timber,
and supporting schemes such as the
National Community Wood Recycling
Project, where in 2020, 686 tonnes of our
timber waste was rescued which led to the
creation of 7 paid jobs and training for over
16 people.
Climate Change
A key focus for the newly enlarged Group
has been a review of our risks and our
progress in the area of climate change,
and to define our agenda and targets,
in order to ensure that we minimise the
environmental impact and carbon footprint
of our operations. We are addressing
the imperative to improve the long-term
sustainability of the homes we build, and
thereby improve both the resilience
and the performance of our business in
this area. With the Climate Change
Committee (CCC) setting out the
requirement to reduce UK emissions
by almost 80% by 2035 to limit global
warming in line with the Paris Agreement,
the Board and Executive Leadership
Team (ELT) are clear in their commitment
to managing environmental risks and
opportunities across the Group.
We have set out our initial approach within
the Sustainability Report (see page 62)
including our initial risk assessment
against the TCFD requirements (Task Force
on Climate Related Disclosures) alongside
how we intend to resource our business
to deliver these improvements. We are
continually reviewing ways to reduce the
amount of carbon dioxide released into the
atmosphere as a result of our activities and
those of our suppliers.
36 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
John Firth: Site Manager
Keeping
our sites
safe
£
Committed to protecting
BONUS
the public and our people
£
Vistry Group PLC | vistrygroup.co.uk | 37
£
£
Strategic priorities | Our operations
We work with the Supply Chain Sustainability
School and hold a Gold membership status
which is the highest level.
Utility & scope
2020 UK
Consumption
(kWh)
2020 UK
Consumption
(tCO2e)
Streamlined Energy and Carbon
Reporting (SECR)
The following figures make up the baseline
reporting for Vistry Group PLC, as 2020 is
the first year that the Company is required
to make this disclosure.
Scope 1 - consumption and emissions
relating to direct combustion of natural
gas, and fuels utilised for transportation
operations, such as company vehicle fleets,
and grey fleet.
Scope 2 - consumption and emissions
relating to indirect emissions arising from
to the consumption of purchased electricity
in day to day business operations.
Scope 1 total
25,315,757
5,970.22
Scope 2 total
11,083,714
1,904.717
Total
36,399,471
7,874.94
As the Vistry Group PLC’s energy usage
is solely UK based the Group’s global
emissions are included in the UK figures.
Year
2020
Year
2019
tCO2e per plot built
1.22
1.61
tCO2e per 1000 sq ft
1.20
1.55
The reduction in tC02e output is due to
the increased size of Vistry group when
compared to 2019, alongside the reduction
of output whilst sites were closed or
operating at reduced capacity during
the pandemic.
The methodology and scope for reporting
carbon emissions is in line with the
Mandatory Carbon Reporting requirements
of the Companies Act 2006 (Strategic
and Directors’ Reports) Regulations 2013,
and with Streamlined Energy and Carbon
Reporting Regulations (SECR) 2019 can be
found on our website.
We are acting to merge all of our gas and
electricity usage to one energy broker, who
will provide 100% renewable energy across
all of our offices and sites.
Priorities for 2021
A key and critical element of the work
we have committed to following the
review is to produce a roadmap towards
a science based approach to achieving
Net-Zero Carbon emissions in advance of
government requirements.
We plan to announce our targets no
later than our half year results in
September 2021. More information is
available within our sustainability report
(see page 62)
Leading the charge in sustainable timber usage
We ensure that
our timber from
our supply chain
provides us
with either FSC,
PEFC certified
or from a legal
and sustainable
source, where
we are in 100%
compliance with
this metric.
We also work
with Community
Wood Recycling
to minimise waste.
This partnership is
another innovative
way we work to
reduce our impact
on the environment.
In partnership with
Community
Wood
Recycling
Working together to
✓ save resources
✓change lives
January 2020 - December 2020
Community Wood Recycling is a network of social
enterprises collecting and reusing waste wood in the most
training for disadvantaged people.
Our service is based on the principles of the circular economy;
by saving wood we are building a more sustainable society.
We promote community reuse, one of the most powerful tools
This labour-intensive activity provides a wide range of
disadvantaged people - including those recovering from
substance abuse or from mental health issues, people with
Impact estimates are calculated based on the volume of wood collected
and the total network social outcomes during the year of collection.
38 | Strategic report | Our business and strategy
SOCIAL AND ENVIRONMENTAL IMPACT REPORT
VISTRY GROUP
686.1 tonnes
rescued from the
waste stream
341.7
tonnes
saved
With Community Wood Recycling, EVERYTHING we
collect is reused or recycled - nothing is returned to the
waste stream.
Reusing wood is 10X
milling, and transporting virgin wood.
6.7
paid jobs
created
16.9
people
trained
Even our collection methodology saves carbon! Our 3.5
tonne collection trucks use less than half the fuel of a skip
lorry, greatly reducing CO2 emissions, pollution, and the
impact on the road.
With every tonne of wood we collect from your site,
we are creating work and training opportunities for
disadvantaged people - CHANGING LIVES for the better.
96.5 tonnes
reused
14% was pushed up the waste hierarchy
into REUSE; used by the community for
DIY/building projects, or made into a whole
range of beautiful products from bird boxes
to dining tables.
196.4 tonnes
firewood
29% was processed into FIREWOOD
and KINDLING, helping to displace
fossil-fuels, reduce carbon emissions,
and create paid work.
393.2 tonnes
recycled
57% was sent for RECYCLING into
woodchip, used in the manufacture of
particleboard, animal bedding, or as
carbon-neutral fuel in power stations.
info@communitywoodrecycling.org.uk
01273 20 30 40
www.communitywoodrecycling.org.uk
Strategic report | Our business and strategy
Blackmore Meadows,
Stalbridge
Protect and
enhance the
environment
£
BONUS
£
Vistry Group PLC | vistrygroup.co.uk | 39
£
£
BONUS
£
£
Strategic priorities
4
Our approach
£
We take our social responsibilities
very seriously. We create spaces
where communities will thrive,
provide affordable housing, support
Force's personnel and contribute to
the economy and charitable causes.
Creating thriving communities
The purpose of the Group is to
develop sustainable new homes and
communities across all sectors of
the UK housing market. Each of our
23 businesses tries to optimise the
inherent social value of our principal
activity, of providing sustainable new
homes and communities, enhancing the
physical places where we build and the
opportunities for the communities
we serve.
We are proud that during 2020 we were
able to build 1,306 affordable homes
and invest over £50m in community and
infrastructure projects as part of our
s106 contribution.
40 | Strategic report | Our business and strategy
Our homes and communities
KPIs
Affordable housing completions
2020
2019
1,306
1,189
Planning obligations spend
£50.5m
£37m
Placemaking
Creating sustainable communities for
all sectors of the UK housing market
is as much about the spaces between
our homes as it is about providing high
quality housing. Whether we are building
a new community on greenfield sites
or regenerating existing communities
our approach to placemaking is
designed to improve people’s quality
of life and support our customers health
and wellbeing.
Our master planning approach aims
to provide a clear hierarchy of public,
private, and semi-private spaces that
encourage neighbours to interact with
each other and build strong communities.
Providing our customers with access to
high quality amenities that support local
economies is a key consideration when
selecting and designing our sites and in
addition to section 106 and community
infrastructure contributions, we work
closely with local authorities, community
organisations and local businesses to
ensure that Vistry communities are
great places to live, work and play.
£
The Vistry Social Value toolkit
provides a framework for ensuring
that our regeneration projects
deliver social cohesion, economic
inclusion, health and wellbeing and
environmental wellbeing. Using
the National Themes Outcomes
and Measurements (TOMs) the
toolkit provides a framework for our
development teams to work with local
authorities, our supply chain and local
community organisations to create
jobs, grow local economies and
help communities to live happy and
healthy lives. This framework was
developed by the Social Value Portal in
collaboration with the Cabinet Office and
Local Government Authority.
As an example, Vistry Partnerships is
working with London Borough of
Enfield to deliver a brand new mixed-
use, multitenure community at
Meridian Water.
This is a first phase of a 10,000 home
regeneration project which will create
over 900 new homes and 2,235m2 of
employment space, alongside green
parkland and open space which includes
a nature trail to help the Council deliver
its vision of Parklife on the Doorstep.
We are also building a community
garden that will offer the local
community and pupils at Meridian Angle
primary school the chance to grow
their own food. We are working with
the Council to design a volunteering
programme that will use the community
garden for social prescribing initiatives
to improve mental and physical health in
line with NHS England’s guidelines.
Vistry Partnerships has pioneered Skills
Academies on all large site, and the
Meridian Water Skills Academy will
provide apprenticeship and training
opportunities for Enfield residents
to access jobs on site and secure
careers across construction and built
environment professions.
We are passionate about supporting
the industry and bridging the skills
shortage across the UK. Across our
8 academies, nearly 500 learners have
completed our bespoke course, with
more than 2,500 community members
benefiting from bespoke workshops
and work placements. This has
resulted in 75 learners gaining full-time
employment and 38 into employment
via nonconstruction related jobs.
Strategic report | Our business and strategy
Creating
new homes and
long lasting
communities
Supporting our
customers on their
new home adventure
Vistry Group PLC | vistrygroup.co.uk | 41
Strategic priorities | Our homes and communities
Regeneration project
Meridian Water, Enfield
Creating Over 900 new homes
First phase of 10,000 home
regeneration project
Affordable housing
We are the leading private sector
provider of affordable housing creating
1,306 affordable homes during 2020,
helping to address the country’s housing
supply challenge. We work collaboratively
with local authorities and registered
providers (RPs) to provide affordable
housing across a range of different
tenure types. The Government’s Help to
Buy Scheme, alongside both our discount
schemes for Key Workers and Armed
Forces personnel are offered on all
our developments. The combination of
our Homes and Partnerships businesses
offers a unique business model that
ensures Vistry delivers more affordable
housing than other volume housebuilders.
Our Partnerships business is a specialist in
delivering mixed-tenure communities that
offer affordable housing alongside purpose
built to rent homes and our Linden Homes
and Bovis Homes brands. From 2021
Partnerships will be working towards
building 6,000 homes per annum by 2025
with revenue of £1bn, 60% of which will be
delivered through its own mixed-tenure
developments. As part of this project we
have set a target for 2021 to build more
additional affordable homes year-on-year
over and above section 106 requirements.
42 | Strategic report | Our business and strategy
Biodiversity and Green issues
Our approach to development design
focusses on the principles of Green
Infrastructure (GI) - networks of multi-
functional green space which includes parks,
open spaces, playing fields, woodlands,
street trees, allotments, private gardens,
sustainable drainage systems and soils.
This holistic approach supports peoples’
mental and physical health, encourages
active travel, improves drainage and
improves carbon storage. This year
we have been working closely with
landscape and ecology consultants to
deliver improvements to our GI design
and delivery.
Biodiversity is a major consideration of the
schemes we deliver at Vistry. We ensure
where we can, we retain valued flora
and fauna and incorporate it within our
developments and we carefully consider
new green infrastructure strategies to
provide wider net gains for biodiversity.
Ahead of a 10% biodiversity net gain
being mandated by the emerging
Environment Bill, we are seeking to assess
and future-proof our schemes in that
regard. On relevant schemes we are now
contributing towards, and in some
instances delivering on-site Strategic
Alternative Natural Greenspace (SANG)
to reduce recreational pressure on
protected sites.
We are developing relationships with
several carefully selected specialist partners,
in order to benefit and further their work
and to deepen our understanding of
the risks and opportunities in our
development approach.
We are engaging with The Bat Conservation
Trust (BCT), a leading non-governmental
organisation in the United Kingdom solely
devoted to the conservation of bats and
the landscapes on which they rely.
Meridian Water, Enfield
We are exploring how a strategic
relationship between our organisations
can result in better outcomes for bats and
the surrounding communities within which
they live and forage, as well in our own
staff understanding more about salient
planning and environmental issues.
This follows the success of our relationship
with the Hedgehog Preservation
Society, which saw us mandate the use
of Hedgehog Highways on all of our
developments to ensure a network of safe
routes allowing this endangered mammal
to travel between important habitats.
Vistry Partnerships are now business
supporters of the Bumblebee Conservation
Trust (BBCT). The aim of this sponsorship is
to ensure our sites across the country are
helping to support bumblebees and other
wildlife with our planting.
Building Standards
The Vistry Group continue to work
alongside government and industry
to support the policy landscape of
the Future Homes Standard and net
zero commitments.
Our roadmap has identified the challenges
that need to be developed, which we
will work through, through research and
engagement with all relevant stakeholders.
We believe that a collaborated industry
led approach, ensures holistic ownership
with all delivery partners working together
towards a common goal, with our
customers right at the heart of our decision
making process.
Importantly our approach is not only
around energy, but also the wider
government commitments in creating a
sustainable future.
Strategic report | Our business and strategy
Vistry Group piloting a unique
collaboration with Eden Project
We are operating a pilot project with Eden Project (an educational
charity exploring how we can work towards a better future) to look
at improving open space within our developments.
We are seeking to provide more
aesthetically pleasing play areas by
replacing multi-use games area with
natural more environmentally friendly
objects and help establish communal
gardening and sensory areas for
residents with disabilities.
The multi-use games area is being
repositioned to keep an existing
hedgerow and ditch to safeguard water
flow to one of the existing ponds and
will be replaced with a community
orchard and hedgerow features to
encourage interactive play.
This will take place at our Redhill
development in Telford to deliver
natural play areas, nature-focussed
green spaces and optimise the land
we are building on to help create a
regenerative, sustainable and long-
lasting approach to the environment.
The development sits next door to
the Granville County Park, which is
managed by the local Wildlife Trust,
and part of a green infrastructure
corridor in Telford. By enhancing the
green spaces at Redhill, we hope to
create a better environment for new
homeowners and the wider community.
Working in conjunction with
Eden Project, we have taken the
original landscape design layouts
and revisited them with enhanced
strategies to put placemaking
and nature at the forefront.
Rather than focusing the play
spaces in a single area we have
created a range of different spaces
across the whole development
including community corners and
woodlands and made the most of
the existing ponds on site.
Each area of the site will have its own
character based on the planting in that
area; some of which will attract birds,
butterflies and other wildlife. There will
be a central community green at the
heart of the development with access
from all homes and a kick-about area,
bike tracks and performance corner.
There are two drainage attenuation
ponds being built in an area of the
development with badger setts and
great crested newts; to support this
wildlife one pond will be a relatively
inaccessible habitat in order to protect
these populations, but a wildlife hide is
planned from which to view the activity
in this area. The second pond will be
accessible and planted with wetland
plants, shrubs and trees to attract
wildlife into the site.
The community corners will be
positioned around the development and
will be equipped with small children’s
play equipment, buggy holders and
seating as well as wildflower planting
to encourage young and old to use the
spaces around them. The community
orchard will encourage homeowners
engage with their greenspace and
each home buyer will be invited to
‘plant their next chapter’ in the newly
formed woodland areas, which in
turn promotes placemaking and helps
support biodiversity net gain.
This pilot project is being delivered by
Eden Project’s International Design
and Creative Team and the National
Wildflower Centre (also based at the
Eden Project), which will use nature
to encourage imaginative and physical
play and foster community connection.
The site will aim to use construction
site waste in the creations of these new
spaces in order to reduce our carbon
and ecological footprints.
Vistry Group PLC | vistrygroup.co.uk | 43
£
£
Strategic priorities
BONUS
£
5
£
Our approach
The Group’s clear focus at the
start of 2020 was to successfully
integrate Linden Homes and
Vistry Partnerships, maximising
the significant benefits from the
combination with Bovis Homes,
and to deliver upon the strategic
rationale for the Acquisition.
Our approach was to bring together
the best from each business creating a
stronger Vistry Group.
As an enlarged group, the Housebuilding
business has the capacity to increase
output to more than 8,000 units and with
controlled volume growth, the business
focus is to increase gross margin up to
the 24.2% gross margin embedded in the
owned land bank.
Vistry Partnerships has a clear strategy
to deliver significant growth in higher
margin mixed tenure completions,
targeting more than £1 billion revenue in
2022 and an operating margin of 10%+.
Deleveraging the Group was a clear
priority for the first two years post
acquisition to best deliver enhanced
returns to shareholders.
44 | Strategic report | Our business and strategy
Our shareholders
Driving enhanced returns for our shareholders through
increased profitability, return on capital and total
shareholder returns
Type
2020
2019
Adjusted profit before tax
£143.9m
£188.2m
Return on capital employed
14.4%
22.1%
Total shareholder return
(28.2%)
71.2%
Note: For calculation of ROCE, see table on page 186, note 5.12 to the financial statements.
2019 Return on capital employed restated based on revised ROCE definition in 2020 to reflect
the enlarged Group contribution of joint ventures as well as excluding for exceptional costs.
With the high level of market uncertainty
and to best support the business, the
Board took the decision to suspend
all cash dividend payments in March
2020. Following the strong second half
performance, significant deleverage and
with a strong forward sales position going
into FY 2021, the Board was pleased to
announce the resumption of dividends
with a 20p final dividend in respect
of 2020.
Priorities for 2021
Following the significant disruption to
our business from Covid-19, the Group’s
focus in 2021 is on delivering a step up in
Housebuilding completions and driving
improved profitability. Vistry Partnerships
operates in a high growth, counter
cyclical market and is targeting revenue
growth and margin expansion, delivering
increasing returns.
The Group will continue to invest in
attractive land opportunities to support
the growth plans of both Housebuilding
and Partnerships.
The Group is targeting to maintain a
strong balance sheet and reduce dividend
cover towards 1.75 times.
Progress in 2020
The Group was quick to progress
with the integration and largely
completed the re-organisation of the
Housebuilding business by the end of
March, enabling the Group to deliver
a rapid and co-ordinated response to
the Covid-19 pandemic.
The synergy benefits to be realised are
ahead of plan with the full synergy run
rate of £44m, 26% ahead of the initial
expectations, with the c. £27m cost of
delivery below the expected cost of £35m.
The strong strategic rationale for the
Acquisition can be seen within the
enlarged Vistry Group. As a top 5 national
housebuilder with a leading Partnerships
business, Vistry has capability across all
segments of the housing market and the
two leading brands, Bovis Homes and
Linden Homes have been re-positioned
and re-branded to maximise the benefits
from dual branding.
The Covid-19 pandemic had a wide-
ranging impact on all aspects of the
business in 2020 resulting in a
significant decline in completions for
Housebuilding and revised expectations
for Group profits.
The Group has been firmly focused
on deleverage, with the gearing as a
result of the Acquisition weighing
heavily on the share price in 2020.
Significant progress was made in
H2 20 resulting in a net cash position
of £38m as at 31 December 2020.
Strategic report | Our business and strategy
The Eaton | 3 bedroom home
Kingsmere, Bicester
Focus
on better
returns
Increased profitability,
return on capital and total
shareholder returns
Vistry Group PLC | vistrygroup.co.uk | 45
46 | Financial statements
46 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
Well designed,
contemporary
housing ranges
Vistry Group PLC | vistrygroup.co.uk | 47
Risk management
The Board is required to assess the prospects of the Group, taking account
of its current position and principal risks, and to explain how this has been
done, over what period and why that period is considered appropriate.
The assessment context
The Board has considered the longer-term
viability of the Group, reviewing this
over a 5 year period based on the strategy
as outlined on pages 22 to 44 to the
current performance of the Group and its
principal risks.
The average life cycle of our developments
falls within a 5 year time period and this
aligns with the timeframe focused on
for the annual strategic review exercise
conducted within the business and
reviewed by the Board.
The Group’s strategy was communicated
in detail at the beginning of 2020 and then
recommunicated at the half-year, detailing
the rapid and coordinated response to
Covid-19 with the anticipated full
year impact. This immediate Covid-19
trading risk assessment included:
• The impact site closures would have on
our output and performance
• Anticipated liquidity and borrowing
requirements
Assessment process and assumptions
A Risk Oversight Committee operates with
representation from all parts of our business
to identify and monitor the threats identified
from within the Group.
This is coupled with a robust assessment
carried out by the Board to formally agree
and assess the principal risks facing the Group,
including those that would threaten the
execution of its strategy, future performance
and liquidity
Management and mitigation of these principal
risks, as set out on pages 50 to 55 have been
taken into consideration when considering the
future viability of the Group.
As part of its annual strategic review
the Board also considered the Group’s 5
year financial plan, the core assumptions
underpinning this plan and how the current
economic and regulatory environment may
impact this plan. The early years of the
financial plan are prepared in detail with the
basis being the development of our existing
land bank.
There is inherently more uncertainty in the
later years of the plan as these incorporate a
higher level of assumed housing completions
from land owned currently without planning
or land not currently owned by the Group.
48 | Strategic report | Our business and strategy
These assessments considered a range
of outcomes including the most severe
and prolonged lockdown and economic
downturn scenarios. As a consequence,
the Group was in a strong position when
lockdown measures eased.
As a group we continue to monitor closely
the impact of Covid-19 and all our principal
risks consider the range of scenarios
and potential mitigations to ensure our
immediate and future viability. We are
continuing to refine our contingency
plans based on assumed local or national
lockdowns and will ensure our business
remains agile so that we are well
placed to adapt to changing conditions.
These include:
• Onsite safe working procedures in
accordance with government guidelines
and there has been no requirement to
change our business operations and sites
are currently open with productivity at
normal levels.
• We have robust processes to sell and
serve customers and residents during
periods of lockdown
The Group’s financial plan has been
reviewed in the context of its operational
performance during 2020 and stress
tested against scenarios to assess the
future viability of the Group.
These scenarios include the following:
• A 15-20% reduction in private sales
volumes, with a corresponding
reduction in development spend
• A 5-10% reduction in private sales prices
• Cessation of uncommitted land spend
• Reduction in overheads to reflect
reduction in bonuses, temporary
employee costs, etc.
The potentially highest impact risks,
from a Group viability point of view, are
seen as those which arise from either a
downturn in the economic environment
or fundamental changes in government
policy, leading to decreased affordability,
reduced demand for housing and falling
house prices. Further information on
the risk and internal control processes is
outlined on pages 50 to 55.
Viability statement
Based on the results of this analysis, the
Board has a reasonable expectation that
the Company will be able to continue in
operation and meet its liabilities as they fall
due over the 5 year period reviewed.
• Strong business continuity processes and
IT capability so that our people can work
from home where required
• Over the longer term, the Board has
highlighted the following elements of
the strategy as key considerations in our
long-term viability:
• Strong housebuilding brands that allow
us to offer differing propositions based on
affordability. Our housebuilding business
continues to focus on high quality housing
developments targeting the edge of town
and large village “chimney pot” locations.
• Partnership programmes include
contracting, land-led solutions and
mixed tenure housing delivery which
are better structured, including pre
sales and forward funding, to be more
robust through changes in UK economic
environment supported by a focus on the
provision of social housing.
• Strong balance sheet with cash delivery
and debt reduction ahead of expectations
and substantial funding headroom in
place, with committed banking facilities
totalling £770m and well spread
maturities out to 2027.
• A strong land bank with in excess of
40,000 plots.
Going concern
The Directors also considered it appropriate
to prepare the financial statements on the
going concern basis, as explained in the basis
of preparation paragraph in note 1.3 to the
accounts. In forming this view, the Group
has prepared a cash flow forecast using two
scenarios – a likely base case including the
expected impact of Covid-19 and a severe but
plausible downside scenario. In the severe but
plausible downside scenario the Group has
assumed decreased affordability, leading to
reduced demand for housing and falling house
prices. In each of these scenarios, the forecasts
indicated that there was sufficient headroom
and liquidity for the business to continue
based on the facilities available to the Group.
In each of these scenarios the Group was
also forecast to be in compliance with the
required covenants on the aforementioned
borrowing facilities. These assumptions are
shown in the box left to this paragraph.
The Group has £770m in committed
banking facilities with well spread
maturities out to 2027, including a £470m
revolving credit facility, £200m of term
borrowings and a £100m US Private
Placement facility. The Group regards its
current banking arrangements as adequate
for its needs in term of flexibility and liquidity.
As at 31 December 2020, the Group had
£303m drawing under facilities and had net
cash of £38.0m.
Strategic report | Our business and strategy
Principal
risks and
uncertainties
More details on the
Group’s approach to
financial risk management
are laid out in note 4.5
Vistry Group PLC | vistrygroup.co.uk | 49
Principal risks and uncertainties
Link to strategic priorities
£
£
BONUS
£
Our
people
£
Our
customers
BONUS
Our
£
£
operations
Our
£
£
shareholders
BONUS
BONUS
BONUS
£
Our
£
homes and
communities
Annual change
£
Increase
No change
Decrease
£
£
Description
£
£
£
Potential impact
£
£
Link to strategic
priorities
Annual
change
£
£
k
s
i
r
t
e
k
r
a
M
k
s
i
r
l
a
n
o
i
t
a
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e
p
O
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m
n
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l
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m
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u
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a
l
t
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a
r
t
n
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u
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a
s
l
a
i
r
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t
a
M
Adverse effects on
consumer confidence and
demand for new homes,
with consequential
impact on revenues, profits
and potentially asset
carrying values. Potential
for increased restrictions
on mortgages granted
could reduce demand for
new homes.
Our partners are unable or
unwilling to invest in social
housing due to restricted
capital or reluctance
to invest until market
certainty returns.
The Group’s ability to build
is constrained and may
impact profitability if
costs rise. Inability to
source raw materials or
unplanned delays in our
supply chain. Delays or
issues resulting from failed
Vistry Group activity.
1
Deterioration of the health
of the UK economy, brought
about by uncertainty, loss
of consumer confidence,
higher interest rates and
increasing unemployment,
leading to decreased
affordability, reducing
demand for housing and
falling house prices.
2
Increasing production
across the industry may
lead to shortages of both
materials and subcontract
labour. Pressures on supply
chain brought about by
integration activity or
Brexit could impact the
supply of materials or
subcontractor services.
Availability of labour due
to the use of the furlough
scheme or requirements
of isolation.
50 | Strategic report | Our business and strategy
BONUS
£
BONUS
£
£
£
£
£
£
£
£
£
BONUS
£
£
What's changed in the last year and direct
impact from Covid-19
How we are mitigating the risks?
Continued impact of
The government's Help to
• Diversification of our business
• Maintaining a rigorous risk
Covid-19 variably affecting
Buy is changing from April
the risk and likely to
2021, being restricted
distort the assessment -
to first time buyers
interest rates remain low,
and subject to regional
increasing demand for
property price caps
more rural locations and
outdoor space, though
this is offset against
uncertainty through
rising unemployment, the
temporary nature of the
stamp duty holiday and the
economic impact of leaving
the EU, which may lead to
a reduction in demand.
We have also seen a rise
in savings amongst those
that remain employed
and so far the sales rate
generated by Vistry
Group and the wider
market remained strong
during 2020, despite
the pandemic
through the Acquisition of
Vistry Partnerships with a
broader portfolio that includes
partnership and regeneration
activity. In addition to private
housing, programmes now
mixed tenure housing delivery
to better weather changes in
UK economic environment.
• Close monitoring of lead indicators
in the housing market, notably
visitors to sales outlets, sales rates
and price achieved.
based approach to land
acquisition and portfolio of
partnership and regeneration
with senior board scrutiny
where required.
post-acquisition synergy saving
to further strengthen our
financial resilience.
include partner led solutions and
• A focus on cash generation and
• There continues to
be pressure on the
impact on our London
• Maintain clear visibility of
• Our suppliers have provided
Partnership's business
future production requirements
their assessment on the effect of
availability of building
which has a greater
and its impact on suppliers
Brexit to date, and continue to
materials within the
exposure to the labour
and subcontractors.
construction industry,
market from overseas.
• Centralised processes to monitor
provide updates should current
arrangements impact material
supply and labour availability.
but so far during the
pandemic this has not
impacted our build
programmes.
Labour availability has
life of site costs across all our
remained strong during
active sites, providing early
the pandemic, with
warning and trend analysis.
government support and
• We continue to assess
furlough schemes typically
whether there will be any
being taken by smaller sole
shortage of subcontract
traders rather than large
as a consequence of the
subcontractors.
• A quarterly supplier survey process
established to better understand
Vistry Group strengths and areas
for improvement in managing our
supply-chain relationships.
deal between the EU and
the UK, in particular the
Principal risks and uncertainties
Strategic report | Our business and strategy
Description
Potential impact
Link to strategic
priorities
Annual
change
What's changed in the last year and direct
impact from Covid-19
How we are mitigating the risks?
Adverse effects on
consumer confidence and
Deterioration of the health
demand for new homes,
of the UK economy, brought
with consequential
about by uncertainty, loss
of consumer confidence,
higher interest rates and
increasing unemployment,
leading to decreased
affordability, reducing
impact on revenues, profits
and potentially asset
carrying values. Potential
for increased restrictions
on mortgages granted
could reduce demand for
demand for housing and
new homes.
falling house prices.
1
2
k
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r
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k
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O
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a
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a
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t
n
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b
u
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d
n
a
s
l
a
i
r
e
t
a
M
Increasing production
across the industry may
lead to shortages of both
materials and subcontract
labour. Pressures on supply
chain brought about by
integration activity or
Brexit could impact the
supply of materials or
subcontractor services.
Availability of labour due
to the use of the furlough
scheme or requirements
of isolation.
Our partners are unable or
unwilling to invest in social
housing due to restricted
capital or reluctance
to invest until market
certainty returns.
The Group’s ability to build
is constrained and may
impact profitability if
costs rise. Inability to
source raw materials or
unplanned delays in our
supply chain. Delays or
issues resulting from failed
Vistry Group activity.
Continued impact of
Covid-19 variably affecting
the risk and likely to
distort the assessment -
interest rates remain low,
increasing demand for
more rural locations and
outdoor space, though
this is offset against
uncertainty through
rising unemployment, the
temporary nature of the
stamp duty holiday and the
economic impact of leaving
the EU, which may lead to
a reduction in demand.
The government's Help to
Buy is changing from April
2021, being restricted
to first time buyers
and subject to regional
property price caps
We have also seen a rise
in savings amongst those
that remain employed
and so far the sales rate
generated by Vistry
Group and the wider
market remained strong
during 2020, despite
the pandemic
• Diversification of our business
through the Acquisition of
Vistry Partnerships with a
broader portfolio that includes
partnership and regeneration
activity. In addition to private
housing, programmes now
include partner led solutions and
mixed tenure housing delivery
to better weather changes in
UK economic environment.
• Close monitoring of lead indicators
in the housing market, notably
visitors to sales outlets, sales rates
and price achieved.
• Maintaining a rigorous risk
based approach to land
acquisition and portfolio of
partnership and regeneration
with senior board scrutiny
where required.
• A focus on cash generation and
post-acquisition synergy saving
to further strengthen our
financial resilience.
• There continues to
be pressure on the
availability of building
materials within the
construction industry,
but so far during the
pandemic this has not
impacted our build
programmes.
• We continue to assess
whether there will be any
shortage of subcontract
as a consequence of the
deal between the EU and
the UK, in particular the
impact on our London
Partnership's business
which has a greater
exposure to the labour
market from overseas.
Labour availability has
remained strong during
the pandemic, with
government support and
furlough schemes typically
being taken by smaller sole
traders rather than large
subcontractors.
• Maintain clear visibility of
• Our suppliers have provided
their assessment on the effect of
Brexit to date, and continue to
provide updates should current
arrangements impact material
supply and labour availability.
future production requirements
and its impact on suppliers
and subcontractors.
• Centralised processes to monitor
life of site costs across all our
active sites, providing early
warning and trend analysis.
• A quarterly supplier survey process
established to better understand
Vistry Group strengths and areas
for improvement in managing our
supply-chain relationships.
Vistry Group PLC | vistrygroup.co.uk | 51
Principal risks and uncertainties
Description
Potential impact
Link to strategic
priorities
Annual
change
What's changed in the last year and direct
impact from Covid-19
How we are mitigating the risks?
3
Inability to convert land
assets to support required
housing development.
A failure to achieve our
operational targets due
to new programme
complexity within our
Vistry Partnership
business, an inability to
execute our homebuilding
programme, or a failure
to control our life of
site costs.
4
Product quality and
service standards
that do not meet our
customers’ expectations
or fall short of the
standards expected from
supervisory bodies.
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v
i
l
e
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C
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n
o
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t
a
r
e
p
O
5
An inability to attract,
develop or retain good
people alongside the
impact resulting from
the Acquisition. Major IT
failure or cyber-attack
disabling critical systems.
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t
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,
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e
p
o
e
P
6
Unsafe practices in our
construction activities
causing injury or death
to our stakeholders and
damage to communities.
d
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y
t
e
f
a
s
,
h
t
l
a
e
H
l
a
t
n
e
m
n
o
r
i
v
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e
52 | Strategic report | Our business and strategy
planning incorporating
government guidance and
via consultation with our
stakeholders, to restart
our operations with
enhanced safe systems of
work including additional
procedures and protocols.
The increased use of joint
standardise Group processes
ventures and consortia
to ensure conformity
arrangements continue to
be challenging, resource
intensive with additional
complexity that requires
careful management.
• Close monitoring of build
performance and delivery
against plan through regular
onsite visits from the
leadership community.
BONUS
£
Unable to deliver sufficient
shareholder returns from
current developments or
a failure to achieve our
anticipated completions.
Cost overruns that have
a material impact over
financial performance.
£
£
• The challenges we faced in
• This initially impacted our
• Monthly build and cost
A new leadership structure
2020 were overshadowed
ability to deliver anticipated
forecasting processes with
that is common across both
by the Covid-19 pandemic.
build rates, although
regular group oversight of
Partnerships and Housebuilding,
With very little notice early in
good progress was made
regional performances.
overseen by the Group Chief
£
the year, we acted to safely
during the year and we
shutdown our operations.
are now back to near
This was followed by intense
normal capacity.
Our COINs ERP system
provides build programming
capability and we continue to
Commercial Officer.
BONUS
£
£
£
BONUS
£
The reputation of the Vistry
Group brands is diminished
with an adverse effect on
sales volumes and returns.
Excessive time and expense
rectifying and compensating
customer, impacting planned
£
business operations.
BONUS
£
£
£
£
£
The loss of retained knowledge
or skill may inhibit the Group’s
ability to achieve both its
integration strategy and/or
financial performance targets.
The loss of IT capability or
significant data loss.
£
£
£
£
£
BONUS
£
BONUS
£
£
A loss of trust in the ability
of Vistry Group to build
homes safely and in an
environmentally responsible
way, affecting the reputation
and financial health of
the business.
BONUS
£
£
£
£
£
£
£
£
£
BONUS
£
BONUS
£
£
£
£
• Quality standards remain
• Covid-19 has impacted
• All homes built are subject
CRM system that puts customers
at the heart of the enlarged
our ability to undertake
to NHBC building control
in control when raising issues
business with improvements
remedial work and can on
inspections.
and communicating with
customer care teams.
• Quality inspections completed
by build staff, sales staff and
• We are increasing the
regional directors.
standardisation of the
customer journey across
our Group.
beginning to filter through
occasion slow the move
from both Linden Homes
and Partnerships. We are
pleased to announce that
in process, but our sales
and customer care teams
have been able to manage
we are a 5-Star accredited
the impact through
builder across all parts of
strong communication.
Vistry Group.
Introduction and uptake
of digital experiences for
customers are strong with
continued rollout planned
throughout 2021.
• Employment t&c's are more
Whilst the rollout of
• New staff policies and
aligned following integration
integrated IT capabilities to
of the 3 businesses, with
new & existing employees
satisfaction supported
was accelerated to adapt
through regular employee
to the shift in working
engagement surveying.
environments, security of
Our employee satisfaction
the IT environment
score of 7.9 demonstrates
remained a high priority
as the Group seeks Cyber
Essential certification.
processes to improve employee
experience with a particular
focus on family friendly benefits.
• A working group overseeing
all project and programme
change, with heavy internal
promotion to ensure change is
managed effectively.
• Engagement strategy with
continued refinement of
internal communications
supported by employee survey
to create a strong framework of
twoway communication.
IT Governance Committee
oversees all cyber and continuity
risks, including data security.
strong engagement.
The net effect of both the
pandemic and the integration
of our organisation has put our
people under greater strain.
Whilst physical safety
requirements were quickly
adapted across all group sites
and offices to adhere to social
distancing rules, the impact of
increased homeworking and
social isolation on our peoples'
mental wellbeing has yet to be
fully understood and remains
a significant concern.
New Group wide standard
operating procedures in
A single SHE director
has been appointed with
operation across the entirety of
business partners serving
our organisation.
our organisation based upon
regional location covering both
housebuilding and partnerships.
ISO 45001 and 14001 certificates
are in place for our Partnership
business with best practice
shared across the whole Group.
Principal risks and uncertainties
Strategic report | Our business and strategy
Description
Potential impact
Link to strategic
priorities
Annual
change
What's changed in the last year and direct
impact from Covid-19
How we are mitigating the risks?
• This initially impacted our
• Monthly build and cost
3
4
5
6
Unable to deliver sufficient
shareholder returns from
current developments or
a failure to achieve our
anticipated completions.
Cost overruns that have
a material impact over
financial performance.
The reputation of the Vistry
Group brands is diminished
with an adverse effect on
sales volumes and returns.
Excessive time and expense
rectifying and compensating
customer, impacting planned
business operations.
Inability to convert land
assets to support required
housing development.
A failure to achieve our
operational targets due
to new programme
complexity within our
Vistry Partnership
business, an inability to
execute our homebuilding
programme, or a failure
to control our life of
site costs.
Product quality and
service standards
that do not meet our
customers’ expectations
or fall short of the
standards expected from
supervisory bodies.
The loss of retained knowledge
or skill may inhibit the Group’s
ability to achieve both its
integration strategy and/or
financial performance targets.
The loss of IT capability or
significant data loss.
An inability to attract,
develop or retain good
people alongside the
impact resulting from
the Acquisition. Major IT
failure or cyber-attack
disabling critical systems.
Unsafe practices in our
construction activities
causing injury or death
to our stakeholders and
damage to communities.
A loss of trust in the ability
of Vistry Group to build
homes safely and in an
environmentally responsible
way, affecting the reputation
and financial health of
the business.
k
s
i
r
l
a
n
o
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t
a
r
e
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e
v
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e
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t
n
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s
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n
a
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f
a
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H
l
a
t
n
e
m
n
o
r
i
v
n
e
• The challenges we faced in
2020 were overshadowed
by the Covid-19 pandemic.
With very little notice early in
the year, we acted to safely
shutdown our operations.
This was followed by intense
planning incorporating
government guidance and
via consultation with our
stakeholders, to restart
our operations with
enhanced safe systems of
work including additional
procedures and protocols.
• Quality standards remain
at the heart of the enlarged
business with improvements
beginning to filter through
from both Linden Homes
and Partnerships. We are
pleased to announce that
we are a 5-Star accredited
builder across all parts of
Vistry Group.
• Employment t&c's are more
aligned following integration
of the 3 businesses, with
satisfaction supported
through regular employee
engagement surveying.
Our employee satisfaction
score of 7.9 demonstrates
strong engagement.
The net effect of both the
pandemic and the integration
of our organisation has put our
people under greater strain.
Whilst physical safety
requirements were quickly
adapted across all group sites
and offices to adhere to social
distancing rules, the impact of
increased homeworking and
social isolation on our peoples'
mental wellbeing has yet to be
fully understood and remains
a significant concern.
ability to deliver anticipated
build rates, although
good progress was made
during the year and we
are now back to near
normal capacity.
The increased use of joint
ventures and consortia
arrangements continue to
be challenging, resource
intensive with additional
complexity that requires
careful management.
• Covid-19 has impacted
our ability to undertake
remedial work and can on
occasion slow the move
in process, but our sales
and customer care teams
have been able to manage
the impact through
strong communication.
Introduction and uptake
of digital experiences for
customers are strong with
continued rollout planned
throughout 2021.
Whilst the rollout of
integrated IT capabilities to
new & existing employees
was accelerated to adapt
to the shift in working
environments, security of
the IT environment
remained a high priority
as the Group seeks Cyber
Essential certification.
forecasting processes with
regular group oversight of
regional performances.
Our COINs ERP system
provides build programming
capability and we continue to
standardise Group processes
to ensure conformity
• Close monitoring of build
performance and delivery
against plan through regular
onsite visits from the
leadership community.
• All homes built are subject
to NHBC building control
inspections.
• Quality inspections completed
by build staff, sales staff and
regional directors.
A new leadership structure
that is common across both
Partnerships and Housebuilding,
overseen by the Group Chief
Commercial Officer.
CRM system that puts customers
in control when raising issues
and communicating with
customer care teams.
• We are increasing the
standardisation of the
customer journey across
our Group.
• New staff policies and
processes to improve employee
experience with a particular
focus on family friendly benefits.
• A working group overseeing
all project and programme
change, with heavy internal
promotion to ensure change is
managed effectively.
• Engagement strategy with
continued refinement of
internal communications
supported by employee survey
to create a strong framework of
twoway communication.
IT Governance Committee
oversees all cyber and continuity
risks, including data security.
New Group wide standard
operating procedures in
operation across the entirety of
our organisation.
A single SHE director
has been appointed with
business partners serving
our organisation based upon
regional location covering both
housebuilding and partnerships.
ISO 45001 and 14001 certificates
are in place for our Partnership
business with best practice
shared across the whole Group.
Vistry Group PLC | vistrygroup.co.uk | 53
Principal risks and uncertainties
Description
Potential impact
Link to strategic
priorities
Annual
change
What's changed in the last year and direct
impact from Covid-19
How we are mitigating the risks?
£
BONUS
Inability to demonstrate action
on climate related matters
may have repercussions on the
group brand and reputation.
Moreover, a failure to
demonstrate improvement
may impact our financial
performance through increased
costs of construction, or as
consequence of fines, or
due to failure to easily
secure investment.
£
£
£
BONUS
£
£
£
Failure to service debt, comply
with borrowing covenants
or generate sufficient cash
to meet working capital
requirements. A failure to
manage liquidity requirements
impacts preparedness for
potential changes in economic
environment and take
advantage of appropriate
land buying or investment
opportunities to help deliver
improved financial performance.
Increased costs, disruption and
reputational damage.
y
t
i
l
i
i
b
a
n
a
t
s
u
S
7
Failure to articulate our
pathway to carbon net
zero targets and consider
the impact of climate
change on regional
developments (e.g.
flooding) may disrupt
programme delivery.
Failure to keep up with
the increasing levels of
interests and reporting
requirements from
government, investors,
customers and civil
society to build in
more environmentally
considerate and
sustainable ways could
result in penalties and
negative attention.
8
A failure to generate
enough liquidity to
manage short-term and
long-term funding or
investment requirements.
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9
Inability to adhere to an
increasingly stringent
regulatory planning and
technical requirements
affecting the market.
Continued pressure
from the government to
ensure sufficient homes
are built, and built in a
sustainable way.
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54 | Strategic report | Our business and strategy
BONUS
£
£
Under Sustainable Finance
They were developed by
A new central department is
A sustainability forum exists
Disclosures Regulations
the international Financial
being created consisting of two
representing all disciplines and
(SFDR) as of March 2021, asset
Stability Board with the aim
new additional sustainability
business areas to ensure two way
managers will be required to
of improving how companies
roles to ensure absolute focus
flow of information.
disclose policies and process
communicate on climate
across our Group.
around ESG integration as well
change to investors and
as a basic level of disclosure at
other stakeholders.
a portfolio level.
A risk based assessment of
sustainability priorities has
Task Force on Climate-
out their roadmap to net
approved by our Board.
More businesses have set
been agreed and set out and
Related Disclosures has set
carbon zero and pressure
recommendations regarding
is building for all listed
the information that
businesses to have detailed
companies should publicly
their own commitment.
disclose on climate change.
authority to ensure our
sustainability agenda is
executed and remains priority
for our ELT.
New company wide mechanism
for capture and analysis of key
reporting metrics.
We have undertaken an initial
risk assessment on the TCFD
plans within this report.
Our COO has full delegated
requirements and set out our
Strong trading, good cash
The organisation quickly
• The Group is operating with
We continue to improve our cash
management and the benefits
responded to the pandemic
of integration drove a strong
by stress testing cash and
year end position with modest
borrowing requirements
net cash position.
based on the range
of scenarios.
substantial funding headroom,
and working capital processes
with committed banking
and procedures to ensure
facilities totalling £770m and
ongoing scrutiny of our liquidity
well spread maturities out
and funding position.
to 2027.
• The Government continues
• A future homes standard
• Our Group Technical Director
• Policies, procedures and
to pledge its support to
the construction industry
as a whole, reiterating its
report published setting
out an ambitious uplift in
provides oversight of home
build standards ensuring a
an onboarding process for
employees includes regulatory
the energy efficiency of new
standardised approach where
compliance and the standards
commitment to the provision
homes through changes to
appropriate. All our homes are
of business conduct expected.
of new homes.
Part L (Conservation of fuel
designed to be compliant to
and power) of the Building
Building Standards.
Increasing scrutiny on
building safety, in particular
on fire safety impacts all
developments. Further safety
requirements on Partnerships
high rise construction may be
expected impacting new and
legacy sites.
Regulations. The second
stage also sets out Future
Buildings Standard.
We are ISO 9001 (Quality
Assurance) compliant for our
Partnership business and use
best practice across our
entire Group.
BONUS
£
£
£
£
£
£
£
£
£
£
£
£
£
£
£
£
BONUS
BONUS
£
£
£
£
BONUS
£
BONUS
BONUS
£
£
BONUS
£
£
£
£
£
£
£
£
Principal risks and uncertainties
Strategic report | Our business and strategy
Description
Potential impact
Link to strategic
priorities
Annual
change
What's changed in the last year and direct
impact from Covid-19
How we are mitigating the risks?
Inability to demonstrate action
on climate related matters
may have repercussions on the
group brand and reputation.
Moreover, a failure to
demonstrate improvement
may impact our financial
performance through increased
costs of construction, or as
consequence of fines, or
due to failure to easily
secure investment.
Failure to service debt, comply
with borrowing covenants
or generate sufficient cash
to meet working capital
requirements. A failure to
manage liquidity requirements
impacts preparedness for
potential changes in economic
environment and take
advantage of appropriate
land buying or investment
opportunities to help deliver
improved financial performance.
Increased costs, disruption and
reputational damage.
7
Failure to articulate our
pathway to carbon net
zero targets and consider
the impact of climate
change on regional
developments (e.g.
flooding) may disrupt
programme delivery.
Failure to keep up with
the increasing levels of
interests and reporting
requirements from
government, investors,
customers and civil
society to build in
more environmentally
considerate and
sustainable ways could
result in penalties and
negative attention.
A failure to generate
enough liquidity to
manage short-term and
long-term funding or
investment requirements.
8
9
Inability to adhere to an
increasingly stringent
regulatory planning and
technical requirements
affecting the market.
Continued pressure
from the government to
ensure sufficient homes
are built, and built in a
sustainable way.
k
s
i
r
l
a
n
o
i
t
a
r
e
p
O
k
s
i
r
l
a
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n
a
n
i
F
k
s
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y
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o
t
a
l
u
g
e
R
y
t
i
l
i
b
a
n
i
a
t
s
u
S
g
n
i
d
n
u
F
d
n
a
y
t
d
i
u
q
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o
i
t
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e
R
d
e
s
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e
r
c
n
I
Under Sustainable Finance
Disclosures Regulations
(SFDR) as of March 2021, asset
managers will be required to
disclose policies and process
around ESG integration as well
as a basic level of disclosure at
a portfolio level.
Task Force on Climate-
Related Disclosures has set
recommendations regarding
the information that
companies should publicly
disclose on climate change.
They were developed by
the international Financial
Stability Board with the aim
of improving how companies
communicate on climate
change to investors and
other stakeholders.
More businesses have set
out their roadmap to net
carbon zero and pressure
is building for all listed
businesses to have detailed
their own commitment.
A new central department is
being created consisting of two
new additional sustainability
roles to ensure absolute focus
across our Group.
A risk based assessment of
sustainability priorities has
been agreed and set out and
approved by our Board.
Our COO has full delegated
authority to ensure our
sustainability agenda is
executed and remains priority
for our ELT.
A sustainability forum exists
representing all disciplines and
business areas to ensure two way
flow of information.
New company wide mechanism
for capture and analysis of key
reporting metrics.
We have undertaken an initial
risk assessment on the TCFD
requirements and set out our
plans within this report.
Strong trading, good cash
management and the benefits
of integration drove a strong
year end position with modest
net cash position.
The organisation quickly
responded to the pandemic
by stress testing cash and
borrowing requirements
based on the range
of scenarios.
• The Group is operating with
substantial funding headroom,
with committed banking
facilities totalling £770m and
well spread maturities out
to 2027.
We continue to improve our cash
and working capital processes
and procedures to ensure
ongoing scrutiny of our liquidity
and funding position.
• The Government continues
to pledge its support to
the construction industry
as a whole, reiterating its
commitment to the provision
of new homes.
Increasing scrutiny on
building safety, in particular
on fire safety impacts all
developments. Further safety
requirements on Partnerships
high rise construction may be
expected impacting new and
legacy sites.
• A future homes standard
report published setting
out an ambitious uplift in
the energy efficiency of new
homes through changes to
Part L (Conservation of fuel
and power) of the Building
Regulations. The second
stage also sets out Future
Buildings Standard.
• Our Group Technical Director
provides oversight of home
build standards ensuring a
standardised approach where
appropriate. All our homes are
designed to be compliant to
Building Standards.
We are ISO 9001 (Quality
Assurance) compliant for our
Partnership business and use
best practice across our
entire Group.
• Policies, procedures and
an onboarding process for
employees includes regulatory
compliance and the standards
of business conduct expected.
Vistry Group PLC | vistrygroup.co.uk | 55
56 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
Creating
places where
people aspire
to live
White Rock, Paignton
Vistry Group PLC | vistrygroup.co.uk | 57
Non-financial Information statement
In accordance with The Companies
(Miscellaneous Reporting) Regulations
2018 a summary of the Vistry Group
non-financial policies are detailed opposite.
Copies of these can be found on
our website at: vistrygroup.co.uk/
responsibilities/csr-reports/2020.
For details of our business model please
see page 16.
Do the right thing
and speak up...
If you (as an individual working
here) believe someone is putting
our business at risk by theft,
dishonesty, unethical or unsafe
behaviour then:
• Speak to the your manager
or HR representative or
• Speak to one of the trained
call handlers from EthicsPoint
- an independent company
who can be contacted in
confidence 24/7
0800 069 8071
EthicsPoint is an independent company
providing a confidential service 24/7
Report your concerns via the EthicsPoint secure website
vistrygroup.ethicspoint.com
GD51203/01.21
Reporting
requirement
Company
employees
Group principal risk
Relevant policies
• People change and
business continuity
• Health, safety and
environmental
• Health, Safety and Welfare Policy
• Diversity and Inclusion Policy
• Ethical Code of Conduct Policy
• “Speak Up” Policy
Social matters
• Sustainability
• Increased regulation
We do not operate a Group policy
because social issues are assessed,
managed and mitigated at a local level.
Regardless, any concerns can still be
raised via our “Speak Up” Policy.
Human rights
• People change and
business continuity
• Anti-Slavery and Human
Trafficking Policy
• Increased regulation
• Diversity and Inclusion Policy
• “Speak Up” Policy
Anti-corruption
and bribery
• Increased regulation
• Anti-Bribery and Corruption Policy
• Anti-Money Laundering Policy
• Anti-Fraud Policy
• "Speak Up” Policy
• Environment Policy
• “Speak Up” Policy
Environment
• Health, safety and
environmental
• Sustainability
• Increased regulation
Stakeholder engagement
Key priorities
The opinions and perspectives of
our stakeholders are a priority.
During 2020, we ensured that
we continuously engaged with our
stakeholders, taking the time
to actively listen and respond to
their views. Our Section 172(1)
Statement below sets out a
summary of our key engagements.
In line with the requirements of s.172
Companies Act 2006, our Directors have
regard to: the long-term consequences
of decisions; the interests of the Group’s
employees; the need to foster the Group’s
business relationships with suppliers,
customers and others; the impact of the
Group’s operations on the community
and the environment; the desirability of
the Group maintaining a reputation for
high standards of business conduct; and
the need to act fairly between members.
These factors are used to shape the Group’s
strategic approach.
£
Our key stakeholder groups are our
people, customers, investors, communities,
regulators and our supply chain.
£
BONUS
Throughout the year we conduct a
series of planned engagements at a
Group and local level, as well as informal
and ad hoc meetings. Engagements are
conducted by employees at different
levels of the organisation. The Board
directly participates in some of these
engagements and also has visibility of the
other engagements through the Board
reporting process.
£
£
£
Our people
£
£
£
£
£
BONUS
£
Our investors
£
BONUS
BONUS
£
Our customers
BONUS
£
Our regulators
£
£
£
£
£
£
Further detailed information about our
stakeholder engagements can be found in
our Sustainability Report on pages 66 to
73 and our Corporate Governance Report
on pages 84 to 101.
£
BONUS
Our
£
communities
Our
supply chain
58 | Strategic report | Our business and strategy
£
£
Non-financial Information statement
£
£
Strategic report | Our business and strategy
Our people - The people who are directly employed by us
Key engagements
Outcomes
Covid-19
Covid-19
Our people looked for reassurance in respect of how
the Covid-19 guidance applies to our business and
required additional mental health and wellbeing
support. To further increase communications, employee
roadshows (physical at the beginning of 2020 and
virtual later in the year) were hosted by the CEO, COO
and CFO. These had high participation and were well-
received across the business. These are supplemented
by regular online team meetings hosted by the CEOs of
Housebuilding and Partnerships.
Our leadership provided clear multi-channel guidance
and updates to keep our people safe during the Covid-
19 pandemic, alongside our employee representatives.
We are reviewing working practices across the Group
and we will be launching an agile working policy in
Spring 2021.
BONUS
£
Director involvement
• Employee roadshows
• People Forum
• Culture review
• Speak Up reports
• Share Scheme invitations
Director visibility
£
• Employee surveys
via Peakon
• Sustainability survey
• Diversity and Inclusion
Forum
• Employee representatives
Other engagements
• Vistry Voice and our
intranet, DUG
• Health and wellbeing
training
Sustainability
Sustainability
Our approach to sustainability should give our people
the opportunity to develop their careers in a fair and
inclusive workplace which supports their health
and wellbeing. Employees have asked for more regular
communication on sustainability, so they are able to
showcase the benefits of our homes and communities
to our customers and partners.
As part of our materiality review to develop the Group’s
sustainability strategy, a Group wide employee survey
was carried out. The responses to the survey helped to
identify which issues our strategy should focus on and
has shaped the way in which we will manage these risks
and opportunities across the Group. This will include
the implementation of a diversity and inclusion strategy
and employee wellbeing programme, as well as more
regular communications on our approach
to sustainability.
Employee Representatives
Employee Representatives
During 2020, we continued to seek views and gather
opinions of our employees by engaging with the
employee representatives. We recognise the important
role the employee representatives play in continued
communication and engagement with our employees.
Employee Representatives continue to help us to
engage with our employees. We continue to hold
regular Employee Representative meetings not only
on matters that require formal consultation but more
regularly on any issues or changes affecting
our employees.
Peakon Survey Outcomes
Mental health and wellbeing
Our Vistry Views Peakon survey in January 2021
received a great response (7.9 engagement score being
0.4 above the benchmark) and provided feedback
that is helping shape the way we move forward on a
number of agendas including diversity and inclusion,
mental health and wellbeing, sustainability, career
development, agile working and communication.
We have set up a Mental Health Committee that
meets monthly to discuss how we can better support
colleagues and promote mental health and wellbeing.
Mental health and wellbeing information and
training dates are provided on a dedicated section
of the Group’s intranet and all our people have the
opportunity to join health and wellbeing sessions
and can train to become a Mental Health First Aider.
Approximately 70 employees became Mental Health
First Aiders during 2020 and provide support to
colleagues across the Group. We also provide external
support services should our people wish to receive
advice or support independently.
Diversity & Inclusion
Career development pathway
A D&I group was formed in October 2020 to explore
our colleagues’ experiences and consider. Based on
these findings we are currently working on a structured
approach, with sponsorship from the ELT, to agree
our aims, identify our priorities, and set targets for
measurable progress during 2021 and beyond.
We worked towards the harmonization of pay and
benefits across the Group following the Acquisition
and have plans to implement a structured career
development pathway for our people, to ensure their
long-term growth in the Group.
Share schemes
The Group’s ShareSave invitation in September 2020
received great engagement from the business with
approximately 750 participants (around one quarter of
our colleagues) being granted over 1.5 million options
for 3 and 5-year terms, providing the opportunity for
our people to participate in the success of the Group
and encourage retention.
Vistry Group PLC | vistrygroup.co.uk | 59
Stakeholder engagement
£
£
Director involvement
• Engagement with
BONUS
Housing Associations
and Registered Providers
Director visibility
• HBF Customer
Satisfaction Surveys
(8-week & 9-month)
• Findings from direct
engagement with
customers, such as first
user feedback, user
videos and user stats
Other engagements
• Digital engagement via
KEYS (our CRM system)
• Monitoring of social
channels
• Direct feedback from
our people
Our customers - The people who purchase our homes
Key engagements
Outcomes
Sustainability
Sustainability
Sustainability is of growing importance amongst
customers and the Group needs to better showcase the
environmental benefits of its homes and offer choice
to customers wanting additional sustainability features
such as EV charging.
£
HBF Customer Satisfaction Surveys
We continuously and consistently monitor customer
feedback through the HBF Customer Satisfaction
8-week and 9-month surveys, which has evidenced
our strong performance continuing with rolling annual
12-month scores publicised for 2020 at Q1 90.9%,
Q2 91.2% and Q3 91.3% and our annual performance
continues to track in line. Expectations are in line with
reaching another HBF 5-Star performance year.
£
HBF, NHBC and Zoopla customer surveys were used
to inform the development of our new sustainability
strategy (see Sustainability report page 66 to 73).
As part of our product review in 2021 we will be
establishing a roadmap to Net-Zero Carbon homes.
We will also develop a number of sustainable optional
extras for our customers to purchase and test their
uptake on pilot sites.
HBF Customer Satisfaction Surveys
The HBF 9-month Customer Satisfaction Score has
been included as an element of our 2021 annual
bonus scheme, to ensure that we sustain the focus on
continuous quality improvement and delivery of high
standards of aftercare.
Customer journey and digital engagement
Customer journey and digital engagement
We have enhanced our customer journey and provided
further digital capabilities, which we will continue to
improve upon in 2021.
User prompts
Live data filtering
We have implemented a CRM system across both
brands to provide consistent information to better
serve the needs of our customers in the long-term.
We have continued to trial the provision of more
channels for our customers to do business with us,
including introduction of webchat functionality.
We have built on the digital engagement with
our customers. Customers are now able to have digital
fully immersive site tours, with the ability to complete
a full site and home tour using 3D visualization.
Customers can also complete a reservation in “6 clicks”
on their mobile, log and monitor snags, have access
to digital information on their home and an on-line
accounts system. This provides us with insight into the
digital engagement which enables us to continuously
monitor and improve our product and service offer.
We have improved the options that our customers
have to personalise their homes through our Select and
Enhance options.
Covid-19
Covid-19
Our customers needed alternative ways to
communicate with us during the Covid-19 pandemic
and also need greater assistance with home moves
and emergencies.
Customers were provided with multi-channel
updates on their customer journey in light of the
Covid-19 pandemic, including confirmation of the
safety precautions in place to protect them and
our people, and support with essential works
and emergencies. We also introduced appointment
only viewings.
60 | Strategic report | Our business and strategy
Director involvement
• Annual General Meeting
and other shareholder
meetings
• Covid-19 Trading Updates
• Investor meetings
• Investor feedback results
• Partnerships virtual
seminar
Other engagements
• Website shareholder
information
• Direct responses to
shareholder information
requests
• Responses to voting
agencies including IVIS,
ISS and PRIC
Strategic report | Our business and strategy
Our investors - Institutions and people who are shareholders of our business
BONUS
£
£
Key engagements
Outcomes
Covid-19
Covid-19
£
Covid-19 updates were provided to our investors
and comments received, with the views of our
investors taken into account in our response to the
Covid-19 pandemic.
£
As part of the Group’s response to the Covid-19
pandemic, the full amount of funds received from the
Government’s Job Retention Scheme earlier in 2020,
were repaid, totaling £7.1 million and the Group has
not drawn on the Covid Corporate Financing Facility.
The Group did not pay an interim dividend during
2020 due to the Covid-19 pandemic, it was able to
grant a bonus issue of shares in July 2020, providing a
return on investment to our investors. A final dividend
for 2020 is also proposed to be paid.
Sustainability Strategy
Sustainability Strategy
Our investors have placed greater scrutiny on
our sustainability strategy, including steps to
improve the measurement and reporting of key
performance criteria. Through direct meetings with
our investors, specifically on how our business can
make a difference to the sustainability agenda, we
learned that our investors are focused on Net-Zero
Carbon emissions, science-based targets, links to
directors’ remuneration, as well as our commitments
to regeneration and affordable housing provision.
Interviews where held with some of the Group’s largest
investors to understand how they think sustainability
will generate long-term shareholder value.
These interviews provided valuable insights and ideas
which have informed our work on our new strategy.
Through its Homebuilding and Partnerships businesses,
the Group builds more affordable homes than other
UK homebuilders, helping to alleviate the shortage of
housing and providing bespoke products that target
a broad customer base. In 2021 we are committing
to building even more affordable homes, targeting a
year-on-year increase in additional affordable homes
build beyond section 106 requirements.
We are also responding to other key sustainability
risks raised by investors, including setting a science-
based pathway to become a Net-Zero Carbon business
and carrying out a risk review to ensure we comply
with the TCFD from 2022. We have also set targets
that reflect the objectives set in several of the UN’s
Sustainable Develop Goals (SDGs) and will use the SDGs
as part of our reporting framework.
Investor feedback
Investor feedback
The Board reviews feedback from investor relations
meetings, visits and presentations, including
commentary on the matters discussed.
The overall feedback received during 2020 continued
to be extremely helpful to the Board, particularly
regarding the strategic direction of the Group, the
Group’s approach to sustainability and the actions
taken in response to the pandemic.
Vistry Group PLC | vistrygroup.co.uk | 61
Stakeholder engagement
£
£
Our regulators (government and agencies) - Government departments that shape the
legislation and rules around which we operate and local planning departments
£
BONUS
Key engagements
Outcomes
Covid-19
Covid-19
£
We gained clarity around the measures to be put
in place during the Covid-19 pandemic from our
early discussions with Government departments
and Homes England. During the early months of
the pandemic these formal consultations were
frequent and diverse, and highly constructive,
enabling us both to inform Government around
specific operating challenges and to understand
the policy response.
Enhanced Standard Operating Procedures were
implemented and appropriate risk assessments were carried
out in accordance with our discussions with Homes England
and our Housing Association partners.
Sustainability Strategy
Sustainability Strategy
A range of legislative and planning risk was
noted following the completion of a risk review,
highlighting that our planning authorities want
to see a proactive approach to sustainability.
Our new sustainability strategy is designed to ensure
we meet new legislative requirements well ahead of
policy changes. In 2021 we will develop a group wide action
plan to ensure we deliver bio-diversity net gain across our
developments, as well as product review to ensure full
compliance with the Future Homes Standard and to set a
pathway and target for all our homes to be designed to a
Net-Zero Carbon standard. We will engage with a number of
industry groups including Supply Chain Sustainability School,
UK Green Building Council and HBF as part of this work.
Diversity and Inclusion
Diversity and Inclusion
We engaged with the Hampton-Alexander
Review and a positive tone from our progress in
this area was noted.
During the year, Debbie Hulme, our Group Customer
Experience Director, was appointed to the ELT.
A D&I committee, sponsored by the COO is being
set up during Spring of 2021 to drive forward our
D&I agenda .
Director involvement
• Direct discussions with
Government departments
and Homes England
• HBF engagement
(including emerging
change - Ombudsman,
Future Homes and
First Homes)
Director visibility
• Board reports and
updates, including
preparatory actions
Other engagements
• Responding to
Government consultations
(e.g. ‘Planning for the
Future’ White Paper and
‘Changes to the Current
Planning System’)
• Pre-application
engagement with Local
Planning Authorities,
Town & Parish Councils
and local communities
(via online system)
62 | Strategic report | Our business and strategy
Strategic report | Our business and strategy
Our communities - The communities local to our offices and sites
Key engagements
Outcomes
Sustainability Strategy
Sustainability Strategy
BONUS
£
£
Director involvement
£
• Sustainability Forum
(with ELT sponsorship)
• Formal meetings
with our Registered
Provider & Housing
Association Partners
• Housing Forum meetings
• Formal meetings with
the HBF
• Group-level charitable
donations
Director visibility
• Housing Association
Questionnaires
• Partnerships with
conservation trusts
(BHPS and BCT)
• Armed Forces Covenant
Other engagements
• Social Mobility Pledge
(taking actions to reduce
the opportunity gap)
• Social Media & Local News
• Public consultations
(planning)
• Skills Academies
The Group would benefit from a renewed
sustainability strategy, including steps to
improve the measurement and reporting of
key performance criteria.
£
Our core purpose is to develop sustainable new homes and
communities across all sectors of the housing market.
During 2020 we took the opportunity of the newly merged
Group to define a revised strategy, following consultation
with a range of stakeholders. A working group chaired by
the COO conducted a wide-ranging risk review and
research with key stakeholders, to identify our opportunities
and risks. The resulting recommendations were approved by
the Board in January and are described on pages 66 to 73.
To identify which sustainability issues that matter most to
our stakeholders, we undertook a series of interviews with
key stakeholder groups. This included interviews with eight
local authorities, Registered Providers and build to rent
investor partners, to understand how they are managing
sustainability within their organisations and the priorities of
their residents. In addition, we reviewed the Local Plan policy
on sustainability for key local authorities who have declared
a Climate Emergency.
The findings of this research have informed the targets
we have set this year to improve the sustainability of the
homes and communities we create (please see page 70).
This includes investing more in social value initiatives on our
regeneration projects, establishing a roadmap to Net-Zero
Carbon homes and increasing the number of affordable
homes we build beyond section 106 requirements in 2021.
As part of this a Sustainability Forum was established,
drawn from all levels and disciplines across our businesses
and sponsored by the COO, with the purpose of overseeing
and influencing our sustainability strategy, and acting as
ambassadors throughout the Group.
Charitable Giving and Partnerships
Charitable Giving and Partnerships
Great charitable work has been carried out
by our Business Units at local level and our
focus should also be on a dedicated charitable
sponsorship at Group-level.
Mental health and wellbeing is a key priority and it is for this
reason that the Group has worked with MIND and MHFA
England during 2020.
We have also continued our partnerships with the British
Hedgehog Preservation Society and have formed a new
partnership with the Bat Conservation Trust, to help
protect these important species, which both enhances our
understanding of biodiversity issues and opportunities for
our development activity, and supports the important work
done by these charities in respect of these important species.
Our people now receive two paid volunteer days during the
year so they can dedicate their time to their chosen charity.
Social Mobility Pledge
Social Mobility Pledge
Recommendations arising from our D&I
review, include the commitment to the Social
Mobility Pledge.
We believe our core purpose of providing sustainable new
homes and communities across all sectors of the market is
perfectly aligned to the aims of the Pledge, bringing social
value and opportunity to the regions in which we operate,
both through the places we create and the economic activity
we generate.
Our Partnerships business has developed a successful
training opportunity with eight academies to date creating
over £10M worth of Social Value and seven more academies
starting in 2021 across the UK.
Vistry Group PLC | vistrygroup.co.uk | 63
£
£
Stakeholder engagement
Our supply chain - Our supply chain consists of material suppliers and subcontractors.
Relationships with material suppliers are coordinated at a Group level and complemented by local
business units. Relationships with subcontractors are driven by the local business unit.
£
BONUS
Director Involvement
• CEO & CFO maintain
relationships with directors
of the Group’s key suppliers
Director Visibility
• Supplier 360 feedback
survey results are shared
with the Risk Oversight
Committee and Board
Other Engagements
• Dedicated account reviews
by Group Commercial team
and local Business Unit
engagement
• Targeted Continued
Professional Development
(CDP) events
• Supplier website hosting
technical specifications
• Project development
forums
• Pre-start and site project
meetings, together with
project pipeline volume
forecast updates
Key engagements
Outcomes
Covid-19
Covid-19
£
Good communications were maintained during
the pandemic to understand the impact of
Covid-19 on our supply chain, including the monitoring
of lead times and managing the upturn in demand
on the reopening of sites. Supply chain partnerships
are critical to the success of the business and we
understand that visibility of product and labour
requirements need to be accurate and consistent to
maintain build programmes.
We have supported our supply chain during the
Covid-19 pandemic by ensuring that invoices were
processed diligently and maintaining close contact to
understand any difficulties faced by our supply chain.
We increased our level of communication of current
and future volume requirements.
Modern Slavery Awareness
Modern Slavery Awareness
We recognised the need to enhance modern
slavery awareness training for our people and our
supply chain.
We are partnered with the Supply Chain
Sustainability School to provide training and support
to our supply chain. All of our contractors are subject
to due diligence which incorporates modern slavery
awareness. During 2020, we also pledged our
commitment to the Gangmasters & Labour Abuse
Authority Protocol.
360 Supplier Feedback
360 Supplier Feedback
The insight gained from the 360 supplier feedback
survey has been actioned to drive improvement
and efficiency. We have increased the overall
breadth of engagement with the supply chain
around product development
Supply chain involvement through product
development and specification drives quality and
reduces site and supply issues.
Research and product development with the Supply
chain, addressing the changing requirements of
up coming building regulations working towards
the future homes standard has enabled increased
collaborative engagement with the supply chain
to identify the most efficient solutions and
emerging technologies.
As part of our ongoing sustainability agenda, we
have worked with the supply chain to track KPI’s and
metrics in relation to our timber procurement, waste
management and carbon emissions. We continue
to develop sustainable build innovations in
collaboration with the supply chain through our on
going product review.
As part of the renegotiation of the Vistry Group
agreements, we have engaged with our supply chain
to ensure that their circular economy, sustainability
credentials and carbon reduction aspirations align
with that of the Vistry Group.
64 | Strategic report | Our business and strategy
Company policy statementModern slavery actExecutive Leadership TeamELTGD 55596/05.2020Modern Slavery Act Transparency Statement – 2019IntroductionThis statement has been prepared in accordance with the Modern Slavery Act 2015 and has been made in respect of 2019. At Vistry Group, we recognise that modern slavery can occur in the construction industry and it is a risk to our business. We operate an Anti-Slavery and Human Trafficking Policy (‘Policy’) which outlines our zero-tolerance approach to modern slavery and human trafficking and supports our efforts to combat modern slavery.Our business and supply chainVistry Group is a top five national housebuilder incorporating the operations of Bovis Homes, Linden Homes and Vistry Partnerships. The housebuilding business operates across 13 business units and involves the design, build and sale of new homes ranging from two-bedroom starter homes to larger four and five-bedroom family homes. Our partnerships business operates through 10 business units, combining both contracting and development led capabilities across all housing tenures, working closely with Government bodies, housing associations and local authorities.Vistry Group partners with Supply Chain Sustainability School and is a member of the Modern Slavery Engagement Programme which aims to increase awareness and provide guidance and training to our supply chain. Our supply chain involves local, national and international companies. Each region is responsible for the sourcing and supply of goods and services to each of their development sites. We maintain a number of Group-wide deals with national suppliers whose products or services are required to be used across our developments. Vistry Group complies with all relevant employment laws and require our sub-contractors, suppliers and wider supply chain to also confirm compliance.PoliciesOur Policy applies to all staff and is incorporated into our agreements with both sub-contractors and suppliers.The Policy outlines our zero-tolerance approach to slavery and human trafficking. It also sets out what actions individuals should take if they are concerned that slavery or human trafficking is taking place in our business or supply chain. To ensure that the risk of slavery or trafficking is eliminated, we will engage with sub-contractors and suppliers to require that they improve their practices where concerns are identified.The Policy is complimented by our:• “Speak Up” whistleblowing policy;• Anti-bribery and corruption policy;• Anti-fraud policy;• Ethical code of conduct policy; and• Health, safety and welfare policyOur policies are reviewed on an annual basis.Copies of our policies are available on our website at: vistrygroup.co.uk/responsibilities/csr-reports/2020.There were no whistleblowing reports of modern slavery received in Vistry Group during 2019.Due diligenceAll of our contractors are subject to due diligence via our adjudication process. Part of this process includes a review of sustainability matters. Our adjudication process and contract conditions incorporate awareness notes relating to modern slavery.The adjudication process involves a face to face meeting between our Site teams, Commercial teams and the relevant contractor to discuss contract orders and Vistry Group policies, and how they are best implemented. If any concerns are raised, then further clarification may be sought. Where contractors are unaware of the risk of modern slavery, they will be provided with information on where to find guidance relevant to their business.We meet regularly with our suppliers to review their performance and, if necessary, raise matters of concern.High risk areasThe construction industry generally can include areas of high risk, with a number of job roles which have a low skill requirement and provide potential opportunities for the exploitation of individuals. The materials and goods that make up our homes may include raw materials from, or may be assembled in, countries that are at high risk of slavery and/or human trafficking.Each business unit is responsible for procuring goods and services for the developments in their area. This often means working with local businesses which may not be aware of the potential for slavery and human trafficking. We have sought to address the areas of high risk in our training and in our actions, as set out in the review of 2019, below.TrainingThe Group’s induction programme includes an overview of sustainability matters, including modern slavery awareness.Review of 2019In 2019 we:• Added Modern Slavery as a standing agenda item to the quarterly Build Quality Forum to better align on-site standards and controls;• Refreshed our renamed “Speak Up” whistleblowing policy to enhance employee visibility and understanding, which was rolled out in January 2020;• Commenced consideration of the introduction of biometric systems throughout our construction sites;• Adopted agreed KPIs to measure, throughout 2020, how effective we have been in ensuring that slavery or human trafficking is not taking place in our business or supply chain; and• Reviewed the training needs for our staff and worked with the Supply Chain Sustainability School to develop training opportunities for our suppliers and sub-contractors.Further stepsDuring 2020 we intend to:• Ensure the effective integration of our Policy throughout our enlarged Vistry Group following the acquisition of Linden Homes and Vistry Partnerships in January 2020;• Develop our training opportunities for suppliers and sub-contractors through our partnership with Supply Chain Sustainability School;• Review induction training for all our staff (including the potential for e-learning);• Sign up to the Gangmasters and Labour Abuse Authority Construction Protocol; and • Monitor how effective we have been in ensuring that slavery or human trafficking is not taking place in our business or supply chain by measuring against our adopted KPIs.Approved by the Board and authorised for issue by: Greg Fitzgerald Chief Executive 20 May 20202020 Strategic report | Our business and strategy
The Aspen | 4 bedroom home
The Tors, Tavistock
Sustainability
Report
We focus our efforts in sustainability
across all aspects of our strategy,
with a particular focus on three
key areas – our people, our
operations, and our homes
and communities
Vistry Group PLC | vistrygroup.co.uk | 65
Sustainability report
Vistry has taken the opportunity of
the Acquisition and creation of the
new Group to reinvigorate and relaunch
our focus on the sustainability of
our operations. We are proud therefore
to have formulated a new sustainability
strategy sponsored by our Chief
Operating Officer with full support
from the Board.
We conducted a review focusing in
particular on the Environmental and
Social elements of the ESG agenda,
considering our performance, our risks
and our opportunities, consulting with
our stakeholders, and deriving a series
of key actions to drive our performance
in these areas. Further details of the
Group's sustainability materiality review
and matrix are set out below. This work
has been carried out by a team drawn
from across the Group, ensuring that
our plans are relevant to our business,
inspiring to our teams and owned by our
operating businesses. Our key targets for
2021, which are aligned to UN Sustainable
Development Goals (UNSDGs) are also set
out below. This will be an absolute focus
and priority for 2021 and beyond and will
be announced in detail during the spring.
This activity is not considered to have
had any material impact on our financial
statements of 2020, or our forecast
2021 activity.
We focus our efforts in sustainability
across all aspects of our strategy,
with a particular focus on three key
areas – our people, our operations,
and our homes and communities.
Our new sustainability strategy has been
created using a risk-based approach taking
inputs from key stakeholder groups:
Our sustainability priorities are therefore
focussed on issues that are important
both to our stakeholders, and to our
business, be it addressing a business risk
or opportunity, or strategy delivery.
This was formulated through a materiality
review that evaluated all sustainability
matters using a balanced scorecard from
these stakeholder groups (see page 67)
Excitingly, during 2021 we have
committed to setting out a roadmap
and investment requirements to
achieve Net-Zero Carbon using a
science-based approach. This will be
supported by a dedicated sustainability
team who will be fully empowered to
coordinate and control current and
future performance across the Group.
During 2021 we will also set out in
more detail how we intend to meet
the recommendations regarding Task
Force on Climate-Related Disclosures
(TCFD) thereby improving our
communication regarding our climate
change performance to investors and
other stakeholders.
disciplines and levels of experience,
to act as both a sounding board for
our proposals, and as enthusiastic
ambassadors throughout the business.
Key to our plans going forward are
two new senior roles, being a Group
Sustainability Manager and Group
Sustainability Technical Manager, which
we are in the process of recruiting for
appointment in early 2021.
For each of our sustainability priorities,
which are aligned to our strategic
priorities, we operate a framework
of Group policies and procedures, all
underpinned by our values of Integrity,
Caring and Quality. These policies are
introduced to employees in our induction
process, are available on our intranet, and
are shared with our suppliers.
Compliance is monitored quarterly, with
all Group and regional leaders required to
confirm that they, and their teams, have
abided by the policies.
An FW: ARA amends y suspected policy
non-conformities can be raised in
accordance with our “Speak Up” Policy.
This policy continues to evolve and not
only details the whistleblowing process
but reflects the company’s commitment to
openness and proactively raising concerns.
As part of our sustainability review, we
have engaged with all our key stakeholder
groups to shape our long-term approach
and share details of our engagements in
our Section 172(1) Statement on page
58 to 64.
In November we convened our first
Sustainability Forum, drawn from
across the business, and including all
Priorities for 2021
Our priority for 2021 is to lay the
foundations of a sustainability strategy
that reflects our position as one of the
UK’s leading homebuilders and our
strategic priorities will deliver our
purpose of building sustainable new
homes and communities across all
sections of the housing market.
1
Risk review
Review legislative and
planning risks across
Group’s markets
2
Peer
benchmarking
3
Stakeholder
engagement
4
ELT & PLC
Board Workshops
Benchmarking against
homebuilders
Investor, customer, client,
employee and supplier
feedback and priorities
Set level of ambition
and integrate with
corporate strategy
Materiality assessment to identify principal risks and opportunities to drive value
Group sustainability strategy
Purpose and strategic
framework
Governance and reporting
structure
Targets and KPls
Divisional action
plans and budget
66 | Strategic report | Our business and strategy
Strategic report | Sustainability report
Materiality Review Prioritisation Exercise
The Group materiality review assessed the impact
of our business activities on 37 environmental,
social and governance issues to identify which
issues matter most for our stakeholders and
present long-term value creation risks and
opportunities for our investors.
16
14
12
10
Health and Wellbeing
Customer satisfaction
y
r
t
s
i
V
o
t
e
c
n
a
t
r
o
p
m
I
Job creation
Diversity and inclusion
Training and development
8
Community investment
6
Transparent reporting
Bribery and corruption
Accounting systems
Living wage, Human rights
Supply chain management
Labour standards
Management systems
4
Indirect economic impact
Conflict resources
Local procurement
Tax
2
0
0
9
7
6
4
3
2
2
Water
MMC
11
10
7
6
5
3
2
4
Affordability
15
Ecology
15
Placemaking
13
Environmental
building standards
10
8
Materials
8
Renewable Energy
Energy and GHG emissions
Climate change adaptation
Health and Safety
Building safety
Waste
11
10
9
Sustainable lifestyles
Risk management
Corporate governance
Technology
Sustainable transport
Air quality
3
6
8
10
12
Importance to stakeholder
Our materiality review identified 11 material issues that are managed under the Group’s core strategic focus areas:
Vistry Group exists to develop
sustainable new homes and
communities accross all sectors
of the UK housing market
Our 5 areas
of strategic
themes
Our
shareholders
£
Create best
return for our
shareholders
Putting our
• Customer satisfaction
customers
• Placemaking
first
Our
customers
Doing the
Doing the
right thing
right thing
for…
for...
Our people
Putting people
• Jobs and training
at the heart of
• Diversity
what we do
• Health and wellbeing
Create quality
• Ecology and Green infrastructure
homes and
• Building standards
lasting
• Affordable housing
communities
Our
homes &
communities
Our
operations
Deliver safe
• Waste and materials
and efficient
• Climate change
operations
• Health and safety
Vistry Group PLC | vistrygroup.co.uk | 67
Sustainability report
These 11 issues form the foundation of
our Sustainability Strategy and will be
managed across both our Homebuilding
and Partnerships businesses. We have set
targets for each of these issues for 2021,
which reflect the objectives of the UN
Sustainable Development Goals (UNSDGs)
that are material to our business activities.
In addition Vistry is committed to
upholding the highest standards of
corporate governance, human rights and
labour standards and our approach to
these essential compliance issues are set
out in detail in our corporate policies
and throughout this report.
For information about how we manage
the risk of modern slavery please see
page 29. A light touch review of material
issues and strategic objectives will be
undertaken annually as part of our
corporate reporting process, with a more
detailed materially review to be carried
out every three years.
To help us implement this strategy we will be investing in the following areas in 2021:
Environmental
Social
Governance
If you are concerned about
a hedgehog please contact
The British Hedgehog
Preservation Society
for guidance or advice
www.britishhedgehogs.org.uk
When you have finished with this leaflet please recycle it.
Produced by the Bovis Homes Graphic Design Department.
GDD52373/12.19
Hedgehog highway
At Bovis Homes we’re proud to contribute to the
welfare and future of these declining creatures.
52373 N Hedgehog Highway A5 lft 09.19.indd 1-2
52373 N Hedgehog Highway A5 lft 09.19.indd 1-2
17/01/2020 12:25
17/01/2020 12:25
1
2
3
4
Organisational structure
and governance:
Appointing two new senior roles to
bolster our strategy execution and to
oversee the design of sustainability
in our homes and infrastructure.
To ensure we have appropriate focus
across the breadth of our Group,
we will continue to further embed
sustainability champions across all
our business units.
Skills and mindset:
New training and policies to raise
internal awareness, including a new
induction programme and a graduate
scheme that will be at the centre of
the new focus on sustainability.
Collaboration & partnerships:
Enter into strategic conservation and
environmental partnerships to help
achieve bio-diversity net gain and
our roadmap to net carbon zero. In
addition, we will continue to leverage
expertise with the Supply Chain
Sustainability School.
Communications:
We will invest in our external website
to include improved visibility of our
strategy, targets and performance
indicators. Our sales materials and
brochures will promote green space,
placemaking and sustainable benefits
of our homes. Internally we will
ensure our people receive updates
on the strategy and our performance
throughout the year.
v ice
68 | Strategic report | Our business and strategy
?
v ice
Strategic report | Sustainability report
Vistry is committed to
upholding the highest
standards of corporate
governance, human rights
and labour standards
Vistry Group PLC | vistrygroup.co.uk | 69
Sustainability report
Aligned to our vision and strategic framework, our 2021
targets are set out below which are aligned to UN Sustainable
Development Goals (UNSDGs). The SDGs, set in 2015 by
the United Nations General Assembly are intended to be achieved
by the year 2030, for which Vistry Group is fully committed.
£
£
Priorities
Issue
Target
UNSDG
Our people
Jobs and
training
Page 28
Design and implement a new strategy for people development
Extend skills academy concept to every new large
regeneration site
Implement a Learning Management system (LMS) that
maximises employee learning opportunities
BONUS
£
Health and
wellbeing
Page 29
Develop and implement an employee wellbeing programme
Deliver year-on-year improvement in employee retention
Deliver a year-on-year reduction in absenteeism
Establish a national charity partnership with MIND
£
Diversity and
inclusion
Page 29
Develop and implement a diversity and inclusion strategy
Our
operations
Waste and
resources
Page 36
Achieve an annual 5% reduction in waste intensity
tonnes/unit
Retain recycling rate of over 95%
Climate
change
Page 38
Deliver a 5% reduction of in GHG emissions intensity in
2021 (tCO2e/m2)
Set a science based target for delivering Net-Zero Carbon
across the Group’s operations
£
BONUS
£
Our
homes and
communities
£
Placemaking
Page 40
Use the Vistry social value toolkit to implement placemaking
strategies on at least one mixed-tenure development in all
Vistry Partnerships business units in 2021
£
Invest equivalent of 0.1% of PBIT with charities and
community organisations.
BONUS
£
£
£
Ecology
Page 42
Building
Standards
Page 42
£
Affordable
housing
Page 42
Implement an action plan during the year to achieve 10%
bio-diversity net-gain across the Group
Develop a roadmap and set a target for all Vistry homes to
be designed to Net-Zero Carbon standards
As part of Project 6,000, deliver a year-on-year increase
in additional affordable homes delivered beyond
policy compliance
70 | Strategic report | Our business and strategy
Strategic report | Sustainability report
Revised plans see new part of Cam community
taking shape around Roman villa remains...
The new homes being built around
Roman villa remains in Cam are proving
popular with house buyers as a new part
of the community starts taking shape
around the historic find. The remains,
at Bovis Homes’ Millfields location in
Cam, survived unprotected for almost
2,000 years before being uncovered
during archaeological work ahead of the
construction of new homes.
Artefacts have now been taken away
from the site and the foundations
of the villa extensively recorded
before being carefully backfilled with
specialist sand, in accordance with
Historic England requirements, to ensure
continued preservation. The development
has since been redesigned by the Group
so no homes are built on top of the villa
site, and the new location that is taking
shape near Cam and Dursley railway
station is now proving popular with
those looking to discover a modern
property gem. Sharon Nash, regional
marketing manager at Vistry Cotswolds,
said: “Bovis Homes’ Millfields location
is proving very popular with home
buyers, we’ve been so impressed with
the high levels of demand and sense
of community here in Cam.
“The Roman villa remains are a wonderful
part of our Millfields development
and we’re delighted to preserve these
finds and celebrate them with the local
community.” Following the discovery of
the villa foundations and other materials,
including pottery, last year, two public
events were held to showcase the findings,
with tours led by the housebuilder’s
consultant Thames Valley Archaeological
Services (TVAS). To view a video of the
remains, including an explanation of the
findings and their historical context, visit
Bovis Homes’ YouTube channel. Nigel
Lush, Cotswold regional technical director
at Bovis Homes, said: “Bovis Homes is
very proud to preserve a valuable part of
Cam’s history and an information board,
at the location of the remains, has been
placed for the community. We’d also like
to thank TVAS for their commitment
and support throughout the findings
and preservation process. “We’ve been
working closely with the local community
and local councillors, to work through
a coordinated approach to maintaining
the villa and we’re delighted to preserve
these historical artefacts. “We redesigned
our development after discovering the
remains, so that no homes are built on top
and have done all we can, with TVAS, to
ensure these findings last forever.”
Among the uncovered stonework is a
bath house annexe, with a cold pool and a
hypocaust – which would have heated the
bath house – plus, some personal items
including coins, pins, broaches and spoons.
There are also fragments of pottery and
animal bones. Agata Socha-Paszkiewicz,
regional office manager at TVAS (South
West) in Taunton, said: “With the condition
of the walls and the setting within the
site, the best action was to rebury the
remains. They have been reburied by the
specification provided by Historic England,
using the proper method and record of
the findings and their location is stored
for everyone to see and for future works.
“Bovis Homes decided to go much further
than it is legally obliged to. We have full
excavation and preservation by record and
in situ, which Bovis Homes agreed to do
and pay for, and agreed to redesign
their development.”
“The Roman villa remains are
a wonderful part of our Millfields
development and we’re delighted to
preserve these finds and celebrate
them with the local community.”
Sharon Nash, Regional Marketing Manager
at Vistry Cotswolds
Vistry Group PLC | vistrygroup.co.uk | 71
Sustainability report
Climate change
Vistry acknowledge we have a key part to play in minimising
our environmental impact and carbon footprint of our operations
to ensure the long-term sustainability of the homes we build.
A key and critical element of the work we have committed
to following the review is to produce a roadmap towards
a science-based approach to achieving Net-Zero Carbon
emissions in advance of government requirements.
We plan to announce our targets no later than our half year
results in September 2021.
We will comply with TCFD requirements (Task Force on Climate
Related Disclosures) and in readiness are undertaking
a comprehensive climate change and risk assessment, which
is summarised below:
Climate change and risk assessment
Governance
Strategy
Risk management
Metrics and targets
Vistry Group’s processes for
identifying and assessing
climate-related risks.
Climate related risks were
assessed as part of the
materiality review undertaken
in 2020. This included:
• Review of legislative risks
up to 2050
• Review of planning policy in
key local authority areas for
the Group
• Consultation with RP and
investor clients
• Consultation with
shareholders to understand
their priorities
A detailed risk assessment of
climate related risks will be
carried out in 2021 as part of
approach to Net-Zero Carbon.
The metrics and targets
used by Vistry Group to
assess and manage relevant
climate related risks and
opportunities where such
information is material.
• KPIs are currently being
formulated as part of our
risk assessment and will
form part of our science
based approach to Net-
Zero Carbon.
CO2
Net-Zero
Carbon
Visty Group’s board’s
oversight of climate-related
risks and opportunities:
Responsibility for managing
climate related risks and
opportunities resides with
the ELT and our COO is the
executive sponsor.
Homes and Partnerships CEOs
are responsible for managing
climate related risks in their
respective businesses and
reporting performance to
the ELT and PLC board.
These responsibilities are
cascaded down to business
unit MDs who report at their
respective boards to
divisional CEOs.
A central sustainability team is
responsible for implementing
our strategy to reduce the
impact of our operations on
the climate.
Our COO chairs a quarterly
sustainability forum which
is attended by 25 champions
with representatives from
all business units and business
functions. The management
of physical and transitional
climate risks are an agenda
item for all meetings.
Mandatory standards will be
embedded in to our control
framework with each business
unity entity self-assessing
their compliance quarterly.
Results will be presented to
our Audit Committee.
The climate-related risks and
opportunities Vistry Group
has identified over the short,
medium and long-term.
Following the Acquisition
of Linden Homes and our
Partnerships business a
carbon footprint baseline
was undertaken in 2020.
This included standardising
our data collection processes
across our Homes and
Partnerships businesses.
We also undertook a review of
our energy providers as part
of our Group buying practices
and we are acting to merge all
of our gas and electricity usage
to one energy broker, who
will provide 100% renewable
energy across all of our offices
and sites.
Group Commercial and
Technical teams have teams
have undertaken a product
review to identify the costs
associated with meeting the
future homes standards and
the Group took the decision
to allow for the additional
cost of meeting new Part L
Building Standards in all land
acquisitions during the year.
Further work will be
undertaken in 2021 to
mitigate the impact of
changes to existing sites
where homes will be subject
to the new regulations.
72 | Strategic report | Our business and strategy
Strategic report | Sustainability report
Governance
Strategy
Risk management
Metrics and targets
Management’s role in
assessing and managing
climate-related risks
and opportunities:
The impact of climate-
related risks and opportunities
on Vistry Group’s businesses,
strategy and financial planning.
At the end of 2020 the
Group CEO directed a
refreshed board report for
the Homes and Partnerships
Executives which requires
monthly reporting of
performance against
climate change targets.
A full risk assessment of physical
and transitional climate related
risks will be undertaken in 2021.
This will include:
• Setting a science based target to
deliver Net-Zero Carbon business
operations – this will include
indicative costs and plans for
utilizing green finance
• Establishing a roadmap for
ensuring all Vistry homes are
designed to a zero-carbon
standard – this will include
different cost scenarios
• Undertaking a flood risk
assessment of the Vistry Group
land bank based on different
climate change scenarios
• Undertaking a product review
of the impact of overheating on
our standard house types for
different climate scenarios
The role of Vistry
Group's management in
assessing and managing
climate-related risks
and opportunities.
During 2021 and as part of
our work to develop a
Net-Zero Carbon strategy
the ELT will oversee a
detailed risk review into the
physical and transitional
climate related risks in line
with TCFD guidelines and
will report in 2022.
The impact of climate-related
risks and opportunities on Vistry
Group’s businesses, strategy and
financial planning.
Vistry Group continues to work
alongside government and industry
to support the policy landscape of
the Future Homes Standard and Net
-Zero commitments. Our roadmap
has identified the challenges that
need to be developed, which we will
work through during 2021 through
research and engagement with all
relevant stakeholders.
Vistry Group’s processes for
identifying and assessing
climate-related risks.
Risk assessment activities to
be undertaken in 2021
• Carbon footprinting of
scope 1 and 2 emissions
to re-baseline following
Covid-19
• Scope 3 emissions
footprinting – third
party assessment of
embodied carbon
The metrics used by Vistry
Group to assess climate-related
risks and opportunities in
line with its strategy and risk
management process.
• Electricity site & office kWh
• Diesel kWh
• Gas kWh
• Renewables kWh
• Scope 1 GHG emissions
• Scope 2 GHG emissions
• Renewable energy capacity
• Product review to test
installed (GW)
• SAP calculation & EPCs
resilience and efficiency to
deliver zero carbon homes
that can be designed to
different climate scenarios
• Flood risk assessment of
land bank for different
climate scenarios
Vistry Group’s processes
for managing climate-
related risks.
Update to be provided
in 2022 following
risk assessment.
Scope 1, Scope 2 and, if
appropriate, Score 3 greenhouse
gas (GHG) emissions and the
related risks.
Reported annually and available
within Our operations section
(pages 34 to38)
The impact of Vistry Group's
climate related risks and
opportunities on the organisation's
businesses, strategy and
financial planning.
We have reviewed our assumed
land viabilities and value to
adjust for climate related risks
and opportunities. This will
be reviewed continuously as our
risk assessment details further
risks and opportunities.
Vistry Group's processes
for identifying, assessing
and managing climate-
related risks are integrated
into the organisation's
overall risk management.
Update to be provided
in 2022 following
risk assessment.
The targets used by Vistry
Group to manage climate related
risk and opportunities and
performance against targets.
• Deliver a 5% reduction of in
GHG emissions intensity in
2021 (tCO2e/m2)
• Set a science based target for
delivering Net-Zero Carbon
across the Group’s operations
• Develop a roadmap and set a
target for all Vistry homes
to be designed to Net-Zero
Carbon standards.
Vistry Group PLC | vistrygroup.co.uk | 73
Bovis Homes Group PLC | 73
The Group
delivered
controlled growth
during 2020
74 | Strategic report | Our financial performance
Strategic report | Financial review
The Silk Mill, East Hanney
Vistry Group PLC | vistrygroup.co.uk | 75
Financial review | Earl Sibley
Total completions
During the year the Group delivered 6,131 (2019: 3,867) legal completions(13), including
100% of JV completions, representing a 58.6% increase on the prior year. This was
driven by the Acquisition which completed on 3 January 2020, however was lower
than expectations as a result of the Covid-19 pandemic and the temporary closure of
developments during the first nationwide lockdown.
Housebuilding
- Private
- Affordable
- JV’s (100%) Private
- JV’s (100%) Affordable
Total housebuilding
Partnerships
- Mixed tenure
- JV’s (100%) Private
- JV’s (100%) Affordable
Total mixed tenure
2020
2019
% Change
3,010
822
658
162
2,625
1,184
53
5
+14.7%
-30.6%
+>100%
+>100%
4,652
3,867
+20.3%
871
397
211
1,479
-
-
-
-
n/a
n/a
n/a
n/a
Total completions
6,131
3,867
+58.6%
Partner delivery units
2,823
-
n/a
Proforma completions analysis
During the same period in 2019 on a proforma basis (15) the Group delivered 8,042 legal
completions representing a decrease of 23.8% in 2020.
Housebuilding
- Private
- Affordable
- JV’s (100%) Private
- JV’s (100%) Affordable
Total housebuilding
Partnerships
- Mixed tenure
- JV’s (100%) Private
- JV’s (100%) Affordable
Total mixed tenure
2020
2019
% Change
3,010
822
658
162
4,088
1,850
687
259
-26.4%
-55.6%
-4.2%
-37.5%
4,652
6,884
-32.4%
871
397
211
628
260
270
+38.7%
+52.7%
-21.9%
1,479
1,158
+27.7%
Total completions
6,131
8,042
-23.8%
Partner delivery units
2,823
2,556
+10.4%
Trading performance
The Group delivered a solid
financial performance in
light of the challenges from
Covid-19. In particular,
the strong performance of
the Partnerships business
growing revenue and
margin, demonstrating
its robust characteristics
despite the market pressure.
In line with the strategy at the
time of the Acquisition, the Group
integrated the Housebuilding
businesses of Linden Homes and
Bovis Homes swiftly to deliver
synergies ahead of expectations and
at a lower cost. Delivering across
these key areas contributed to the
strong cash delivery in the year
resulting in a net cash balance and
enabling the Group to return to
paying dividends.
(15) Prior year divisional completions and revenue
represent proforma 2019 divisional completions and
revenues calculated using published data for Linden
Homes and Vistry Partnerships for the period from
1 January 2019 to 31 December 2019. No further
proforma information is provided as the previously
published data is not considered to be comparable due
to the need to align accounting policies.
76 | Strategic report | Our financial performance
Strategic report | Our financial performance
On a reported basis the Group saw a
profit before tax for the year ended
31 December 2020 of £98.7m,
comprising operating profit of £91.7m
after exceptional costs of £31.0m, net
financing charges of £7.9m and share
of JV profit of £14.9m. This compares
to £174.7m of profit before tax in 2019,
which comprised £179.7m of operating
profit, £6.8m of net financing charges
and share of JV profit of £1.8m.
Housebuilding
Housebuilding total completions including
100% of JVs at 4,652 included 984
affordable homes representing 21.1% of
total completions (2019: 1,189 affordable
homes, 30.7% of total completions).
Housebuilding pricing remained firm
through the year and overall we saw a
modest increase in underlying prices,
with the average sales price for our
private homes in housebuilding
having increased 0.4% to £343,200
(2019: £341,700). The total average sales
price increased by 8.0% to £302,500
(2019: £280,200) driven by a lower
proportion of affordable.
Included within Housebuilding revenue is
£17.2m revenue (2019: £49.2m including
partnership land sales) related to land
sales, including the sale of a parcel of
land on our large scale development
at Twigworth.
Housebuilding (11, 13)
Total completions incl. 100% JVs
Adjusted revenue
Adjusted gross profit
Housebuilding adjusted gross profit(16)
of £231.2m and housing adjusted
gross margin of 17.6%, were impacted
by Covid-19 direct costs in the year
totalling £8.6m which had a 0.7% impact
on housing adjusted gross margin.
Additional costs relating to implementing
safe working practises and the reduced
operating efficiency on site are
estimated to have a further 0.9% impact
on adjusted gross margin.
Housebuilding gross margin is also
impacted by our policy of recognising
direct sales and marketing costs in the
year they arise, similar to administrative
expenses, rather than apportioning
them by volume. The impact of this,
on margin, due to the lower than
expected volume was c. 0.7% in
the year. The Group also recognised costs
relating to the impairment of inventory
totalling £5.7m in the year (2019: £0.3m).
In addition, the mix of homes completed
in the year included a higher proportion
of completions from sites that had been
largely built out at the beginning of
the year which had, on average, a
lower margin.
The housing gross margin saw a step up
in the second half and a further step up is
expected in 2021 as the business moves
towards delivering a gross margin in line
with the embedded land bank margin of
24.2% in the future. This must include
an estimate for the additional costs of
implementing future building regulations
(Part L) for all appropriate plots.
2020
4,652
2019
% Change
3,867
+20.3%
£1,311.8m
£1,139.2m
+15.2%
£231.2m
£255.3m
-9.4%
Adjusted gross margin
17.6%
22.4%
-4.8pps
Adjusted operating profit
£139.4m
£207.1m
-32.7%
Adjusted operating margin
10.6%
18.2%
-7.6pps
TNAV(17)
£1,491m
£922m
+61.9%
Vistry Group PLC | vistrygroup.co.uk | 77
Revenue
Total adjusted revenue(11), including share
of JV revenue, was £2,040.1m, 79.1%
higher than prior year (2019: £1,139.2m)
and 21.3% lower on a proforma basis
(2019: £2,592m). On a reported basis
revenue was £1,811.7m, 60.2% higher
than last year (2019: £1,130.8m).
Adjusted gross and operating profit
Adjusted gross profit(16) was £318.8m
in 2020 (adjusted gross margin: 15.6%),
which compares to £255.3m in 2019
(adjusted gross margin: 22.4%).
The margin was impacted by sites closing
during the first national lockdown due
to Covid-19, including the impact of
non-productive site overhead costs
being expensed directly to the income
statement which under normal productive
circumstances would be capitalised into
inventory and recognised in the income
statement as homes complete. There were
also costs incurred relating to the closing
and reopening of sites as a result of
lockdown, and implementation of Covid-
19 safe working procedures and health
and safety precautions. The direct costs
identified relating to Covid-19 recognised
in the income statement totalled £10.2m;
these costs were all incurred in the first
half of the year. In December 2020 Vistry
repaid a total of £7.1m of furlough claim
income received from the Government’s
Job Retention Scheme. This included
£6.3m which was received during
HY20, positively impacting profit in the
first half of the year. The repayment in
the second half of the year meant the
income was reversed.
Adjusted operating profit(11) is £171.0m
(2019: £194.4m). This includes the
increased overhead costs of the enlarged
Group following the Acquisition, primarily
resulting from higher employee numbers
and additional establishment costs.
Adjusted operating margin(11) was 8.4%
(2019: 17.1%). Reported operating profit
was £91.7m (2019: £179.7m profit).
The Group delivered an adjusted profit
before tax(11) of £143.9m (2019: £188.2m)
(16) Adjusted gross profit includes contribution of
joint ventures and other operating income, before
exceptional items
(17) TNAV represents tangible net assets excluding net
cash or debt
Financial review | Earl Sibley
In 2020 the Group saw low levels of cost
inflation and expects this to continue
into 2021 with benefit coming through
of supplier agreements re-negotiated
as a consequence of the Acquisition.
The Group also benefitted from material
supply synergies in the full year.
Housebuilding adjusted operating
profit of £139.4m and adjusted operating
profit margin of 10.6%. Whilst the
Group has restructured to realise
synergies and ensure Housebuilding
has an efficient overhead going forwards
the adjusted operating margin
reflects the increased overhead from
the enlarged group spread across
lower than expected volumes.
Partnerships (11)
Adjusted revenue from Partnerships
in the year totalled £728.3m, made
up of £489.5m from partner delivery
(contracting) and £238.7m from mixed
tenure operations.
Partnerships sold a total of 1,479 units
from its mixed tenure operations,
including JVs, with an average selling
price of £203,900k and partner delivery
revenue generated equivalent units
of 2,823.
Adjusted operating profit(11) of £48.6m
and adjusted operating profit margin(11)
of 6.7% are impacted by Covid-19 as well
as a full overhead cost being incurred
despite reduced volumes.
The adjusted operating margin reflects
an improvement to the proforma
operating margin reported by the
Partnerships business for the
full year to the 30 June 2019 of 5.6%.
Partnerships(11, 13)
Total completions incl. 100% JVs
Adjusted revenue
Adjusted operating profit
Adjusted operating margin
TNAV(17)
78 | Strategic report | Our financial performance
This improvement reflects the strong
counter cyclical nature of the business
including a high proportion of pre-sold
homes and a strategy of aggressively
growing the mixed tenure element of
the business and administrative costs
benefiting from synergies in the
enlarged group.
Non-underlying and group costs
The reported Group segment of the
business includes the non-underlying
exceptional restructuring costs of
£20.0m (2019: £13.6m), related to
the Acquisition.
In addition, the Group has recognised an
exceptional charge of £11.0m in relation
to the potential financial liabilities for
legacy property building safety.
The Group segment reported direct PLC
costs totalling £17.0m (2019: £12.7m),
including the costs of the PLC Board,
share based payments and related items.
Financing and Taxation
Net financing charges during the year
were £7.9m (2019: £6.8m). Net bank
interest and commitment fees were
£18.5m (2019: £1.9m), as a result of
higher net debt during 2020 following
the Acquisition and supporting the
enlarged Group. We incurred a £4.6m
charge (2019: £3.4m), reflecting the
imputed interest on land bought on
deferred terms. JVs which are funded
through loans are charged interest by
the Group, which generated the majority
of the £18.2m of finance income
recognised (2019: £0.8m).The significant
increase on prior year is driven by
the additional loans to JVs with the
acquired businesses.
2020
1,479
£728.3m
£48.6m
6.7%
(£30m)
The Group has recognised a tax charge
of £21.9m at an effective tax rate of
22.1% (2019: £36.4m at an effective rate
of 20.8%). The effective tax rate is driven
by non-deductible exceptional costs.
The Group has a current tax asset
of £14.4m in its balance sheet as
at 31 December 2020 tax liability at
31 December 2019: £20.9m.
Dividends and earnings per share
During a period of significant uncertainty
in late March the Board focused on
protecting the Group’s cash position,
liquidity and maintaining a robust
balance sheet. The decision was taken
that no interim dividend would be paid
in respect of H1 2020. A final dividend
of 20 pence per share (2019: 41.9 pence)
has been declared and, subject to
shareholder approval at the AGM, will
be paid on 21 May 2021 to holders of
ordinary shares on the register at the
close of business on 26 March 2021.
Total ordinary dividends for the year
are therefore 20 pence per share
(2019: 61.5 pence).
Both adjusted basic EPS before
exceptional expenses and amortisation
of acquired intangibles of 52.6p
(2019: 104.3p) and basic EPS of 34.8p
(2019: 94.6p) have decreased year on
year, by 49.6% and 63.2%, respectively.
Acquisition and Integration
The Group completed the Acquisition on
3 January 2020, at a cost of £1,233.5m
including £378.1m in cash and £855.4m
in shares. The novation of £108.2m in
USPP Notes Payable is classified as an
acquired liability and not consideration.
As shown in the table below, the
Acquisition resulted in the recognition of
£155.0m of intangible assets related to
the Linden Homes and Drew Smith brand
names, as well as customer relationships
and secured contracts held by the
acquired businesses. Goodwill of £547.5m
has been recognised, reflecting intangible
assets which do not qualify for separate
recognition including relationships with
private customers and the assembled
workforce, in addition to future prospects
and the synergies that will be achieved as
an enlarged business going forwards.
Strategic report | Our financial performance
Purchase consideration
Cash
Linden
Homes
Partnerships
Total
76,300
301,800
378,100
Shares consideration
815,698
39,685
855,383
Total purchase consideration
891,998
341,485
1,233,483
Reflecting:
USPP notes payable
Intangible assets
Net tangible assets
Goodwill
-
(108,219)
(108,219)
54,800
100,224
155,024
608,870
228,328
30,299
639,169
319,181
547,509
Total net assets recognised
891,998
341,485
1,233,483
Exceptional costs of £20.0m have been
recognised in the income statement
relating to the Acquisition, primarily
driven by redundancy costs, integration
costs from moving the enlarged business
onto consistent processes and systems,
closed office costs, and rebranding.
The initial expectation for the costs to
achieve synergies and integration were
£35m, the current estimate is c. £27m in
total, with c. £7m expected in 2021.
At the time of the Acquisition the
integration of the new businesses into
the Vistry Group was expected to achieve
synergies of c. £35m. The Group is now
targeting synergies of c. £44m on an
annualised basis from 2022 onwards with
synergies of c. £25m arising in 2020.
The full impact of synergies from 2022
onwards is expected to come through
cost of sales at a rate of c. £25m per
annum and administrative expenses of
c. £19m per annum.
Net assets and cash flow
As at 31 December 2020 net assets of
£2,195m were £923m higher than at
the start of the year, primarily resulting
from the Acquisition. Net assets per
share as at 31 December 2020 were
988p (2019: 857p).
Goodwill and intangibles totalled
£691.1m at 31 December 2020
(2019: £4.3m), directly resulting from
the Acquisition.
Tangible net assets increased from
£905.6m at 31 December 2019 to
£1,466.1m at 31 December 2020, again
primarily driven by the addition of the
acquired balances in January 2020.
Within tangible net assets, inventories
increased during the year by £628.8m
to £1,836.5m. This balance reflects the
slow down in land acquisition early in
the year.
Trade and other receivables increased
by £126.3m. Trade and other payables
increased by £558.5m and includes land
creditors which increased by £64.4m to
£323.2m (2019: £258.8m).
As at 31 December 2020 the Group’s
net cash balance was £38.0m.
Having started the year with net cash
of £362.0m, the Group generated
an operating cash inflow before land
expenditure of £440.9m (2019: £281.4m).
Net cash payments for land investment
were increased at £259.0m (2019:
£184.7m). During the second half the
group has continued to achieve good
deferred terms on new land investment
as well as securing a number of new sites
on a conditional basis. This has typically
been on a subject to detailed planning
basis, delaying the initial land payments
closer to the time when development
on site will commence and supporting
return on capital employed. Investing
cash outflows totalling £383.8m includes
the £394.6m cash consideration for the
Acquisition net of overdraft acquired,
as well as loans made to and
investments made in joint ventures and
dividends received from joint ventures.
Financing cash inflows of £181.2m
include £200m of loan drawdowns net of
repayments, no dividends were paid
in the year.
At 31 December 2020 the Group has
borrowing facilities of £770m, including a
5 year committed revolving credit facility
of £410m, a 3 year revolving credit facility
of £40m, £150m of 3 year term loans, a
£100m US Private Placement facility and
£70m of additional facilities. In addition,
Vistry Group have been confirmed as
eligible for the CCFF, for borrowing of
up to £300m although the Group has no
expectation of using this facility.
Vistry Group PLC | vistrygroup.co.uk | 79
Partnerships land bank
The average selling price of all units within
the consented land bank at the year end
was £282,000. The estimated embedded
gross margin in the consented land bank as
at 31 December 2020, based on prevailing
sales prices and build costs is 18.1%.
The Partnerships land bank including joint
ventures of 8,224 plots as at 31 December
2020 reflects our strategy to grow the level
of mixed tenure development to contribute
to the delivery of completions and partner
delivery units in aggregate of c. 6,000
per year.
The 1,479 mixed tenure plots that legally
completed in the year were replaced by
acquisition of 1,505 plots on 5 sites and
a further 866 plots were conditionally
contracted on 6 sites. Based on our
appraisal at the time of acquisition, the
new additions, on average are expected
to deliver a future gross margin of 17%
and ROCE of 40%. The margin and
ROCE on each new development will to
some extent, reflect the risk and reward
trade off that comes from the proportion
of pre-sold volume specific to the
development opportunity.
Public sector land continues to be a strong
source of opportunities for Partnerships and
in the year, we exchanged contracts with
Homes England on five sites. In addition,
we have obtained detailed planning on two
Homes England sites - Sandymoor, Runcorn
and Lea Castle, Kidderminster, which will
provide over 900 new homes.
Financial review | Earl Sibley
Land bank
Housebuilding land bank
The average selling price of all units within
the consented land bank increased over the
year to £306,000, 2.3% higher than at
31 December 2019. The estimated
embedded gross margin in the consented
land bank as at 31 December 2020, based
on prevailing sales prices and build costs is
24.2% (June 2020: 24.2%). This embedded
margin includes new acquisitions estimated
to deliver on average 25% gross margin
based on the appraisal at the time of
acquisition and trading out of older sites
with lower margins all of which have been
impacted to a greater or lesser extent by
Covid-19 in the year.
In addition we have increased the cost base
in the land bank to include our current
estimate of costs for elements of the Future
Homes Standards (Part L).
The Housebuilding land bank
including joint ventures of 31,994
plots as at 31 December 2020
represents c. 4.3 years of supply
based on the 2020 completion volume.
Housebuilding land bank
As at 31 December 2020
Consented plots added
Sites added
Sites owned at year end
Sites controlled at year end
The land bank reflects our strategy to
deliver controlled growth in Housebuilding
completions year on year in the medium
term and maintain an optimal land bank at
3.5 to 4.0 times.
The Housebuilding business has the capacity
from its existing operating structure to
deliver up to 8,000 homes in the long term.
The 4,652 plots that legally completed in
the year were replaced by a total of 3,195
plots from a combination of site acquisitions
representing 2,022 plots and conversion
of 1,173 plots from our strategic land
pipeline and a further 3,086 plots
secured on a conditional basis across
14 sites.
Investment in the land bank was paused
during the first half of the year in response
to Covid-19 however during the second
half the Group has been active in a good
land market and has maintained its total
controlled land bank plots whilst reducing
the land creditor balance.
2020
6,281
31
199
14
2019
4,531
18
116
-
Total plots in land bank at year end incl. joint ventures
31,994
17,328
ASP including share of joint ventures
Average consented land plot ASP
£306,000
£299,000
£46,000
£46,411
Partnerships Land Bank
As at 31 December 2020
Consented plots added
Sites added
Sites owned at year end
Sites controlled at year end
Total plots in land bank at year end including joint ventures
Average consented land plot ASP
Average consented land plot cost
2020
2,371
11
50
6
8,224
£282,000
£31,000
80 | Strategic report | Our financial performance
Strategic report | Our financial performance
Strategic land
As at 31 December 2020
0 – 150 plots
150 – 300 plots
300 – 500 plots
500 – 1,000 plots
1,000 + plots
Total
Planning agreed
Planning application
Ongoing promotion
Total
Total sites
Total plots
42
46
14
16
4
3,253
10,362
5,610
9,995
4,833
122
34,053
16
8
98
122
6,416
2,221
25,416
34,053
Strategic land
Strategic land continues to be an important
source of supply and during the year,
1,173 plots have been converted from the
strategic land pipeline into the consented
land bank. A further 2,856 plots were
contracted under options and planning
consent gained on 848 plots over the year.
Strategic land remains well positioned to
deliver high quality developments in the
near to medium term with good progress
on a number of significant projects.
Risks and uncertainties
The Group is subject to a number of risks
and uncertainties as part of its activities.
The Board regularly considers these and
seeks to ensure that appropriate processes
are in place to manage, monitor and
mitigate these risks.
Following the Acquisition and Covid-19
pandemic the Board have considered
additional risks to the Group presented by
the Partnerships business.
In particular the risks in respect of the
partner delivery element of the business,
understanding the process for tendering
new work, ongoing management oversight
of contracts and the commercial controls
in place.
The outbreak of Covid-19 in 2020 required
the Group to respond quickly and carefully
to protect the health and wellbeing of our
employees, customers, suppliers and
wider society. The Executive Leadership
Team has been, and continues to be,
focussed on managing the business to
balance the protection of profitability
and preservation of operating cash
flow with the long-term needs of the
Group, and conserving cash in a time of
great uncertainty.
Other than the above, the directors
consider that the principal risks and
uncertainties facing the Group remain
those that are outlined on pages 50 to 55
of the Annual Report and Accounts 2020,
which is available from vistrygroup.co.uk.
Earl Sibley
Chief Financial Officer
Strategic report approval
The strategic report outlined on pages 2 to 81, incorporates the financial highlights, the
Chairman’s statement, the strategic review, the Chief Executive’s report, the financial review,
the principal risks and uncertainties review and corporate social responsibility review.
“Vistry Partnerships
demonstrated
its strong market
resilience during
the year”
By Order of the Board
Earl Sibley, Chief Financial Officer
4 March 2021
Vistry Group PLC | vistrygroup.co.uk | 81
Directors and officers
1 Ian Tyler
2 Ralph Findlay
3 Chris Browne
4 Nigel Keen
5 Katherine Innes Ker
6 Mike Stansfield
Board skillset
(Number of directors)
9
8
5
5
5
3
Greg Fitzgerald
7
ELT
2
8
1
Construction and
property
Retail
Financial
Strategy and
business development
People and culture
Health and safety
and regulation
Public sector
Graham Prothero ELT
Environment and
sustainability
9
Tenure
(Number of directors)
Diversity
(Number of directors)
1
5
3
2
7
Board skillset
(Number of directors)
9
8
5
5
5
3
Earl Sibley
ELT
1
Tenure
(Number of directors)
1
5
3
0-2 years
2-4 years
Male
Female
10
4+ years
Martin Palmer ELT
0-2 years
2-4 years
4+ years
11
Keith Carnegie
ELT
12
Stephen Teagle
ELT
13 Debbie Hulme
ELT
Vistry Group PLC
Executive Leadership Team
Company Secretary
Vistry Housebuilding
Vistry Partnerships
Board skillset
(Number of directors)
9
8
5
5
5
3
2
1
Construction and
property
Retail
Financial
Strategy and
business development
People and culture
Health and safety
and regulation
Public sector
Environment and
sustainability
82 | Our governance | Directors and Officers
Tenure
(Number of directors)
Diversity
(Number of directors)
1
5
3
2
7
0-2 years
2-4 years
Male
Female
4+ years
1 Ian Tyler
Non-executive Chairman
Committee membership: Nomination Committee
Date appointed: 29 November 2013
Experience: Ian is Chairman of Affinity Water Limited,
AWE Management LTD and Amey PLC. He was Chief
Executive of Balfour Beatty plc from 2005 to March 2013,
having joined the company in 1996 as Finance Director
and becoming Chief Operating Officer in 2002. He is a
Chartered Accountant and prior to 1996 was Financial
Comptroller of Hanson and Finance Director of ARC Ltd,
one of its principal subsidiaries, and held financial roles at
Storehouse plc. He was Chair of Cairn Energy PLC until
December 2020, a Non-Executive Director of Mediclinic
International plc until February 2017 and Cable & Wireless
Communications Plc until September 2015, where he was
also Chairman of its audit committee, and a Non-Executive
Director of VT Group plc until 2010.
What he brings to the Board: Board leadership and
debate, construction health and safety matters, familiarity
with dealing with international shareholders, business
growth and value creation.
External directorships: Listed: Non-Executive Director
of BAE Systems plc. Non-listed: Chair of Affinity Water
Limited, Chair of Amey PLC, a subsidiary of Ferrovial S.A.,
Chair of AWE Management Ltd (a joint venture company
between Lockheed Martin, Jacobs Engineering and Serco).
2 Ralph Findlay
Independent Non-executive Director and
Senior Independent Director
Construction and
property
Retail
Financial
Committee membership: Chairman of the Audit
Strategy and
Committee and member of the Nomination and
business development
Remuneration Committees
People and culture
Date appointed: 07 April 2015
Health and safety
and regulation
2
Public sector
Environment and
sustainability
Experience: Ralph is a Chartered Accountant and is Chief
Executive Officer of Marston’s PLC, a position he has held
since 2001, having been Finance Director from 1996 to
2001 and Group Financial Controller from 1994 to 1996.
He previously held roles with Geest plc as Group Chief
Accountant, Bass plc as Treasury Manager and qualified
and worked with Price Waterhouse as a specialist in
financial services.
2
Diversity
(Number of directors)
What he brings to the Board: Commercial, financial
and general management experience in a consumer facing
industry. Land acquisition and business growth experience.
7
External directorships: Listed: Chief Executive of
Marston’s PLC. Non-listed: Chair of Carlsberg Marston’s
Brewing Company and director of the British Beer &
Pub Association.
Female
Male
3 Chris Browne OBE
Independent, Non-executive Director
Committee membership: Nomination, Remuneration
and Audit Committees
Date appointed: 01 September 2014
Experience: Chris was appointed as a Director of
Norwegian Air Shuttle ASA, a company listed in Oslo,
on 30 June 2020. Chris was Chief Operating Officer
of easyJet plc until June 2019 and also served as a
Non-Executive Director from January to September 2016.
She was Chief Operating Officer, Aviation, of TUI Travel
plc until September 2015 and was Managing Director
of Thomson Airways from 2007 to May 2014 and
Managing Director First Choice Airways from 2002
to 2007. She has a Doctorate of Science (Honorary) for
Leadership in Management and was awarded an OBE in
2013 for services to aviation.
What she brings to the Board: Commercial and general
management experience in a consumer facing and highly
regulated industry, plus leadership and operational skills.
External directorships: Non-listed: Independent board
member of Norwegian Air Shuttle ASA.
4 Nigel Keen
Independent Non-executive Director
What he brings to the Board: House building and
residential construction industry, strategy and
business development
10
Martin Palmer
FCIS, Group Company Secretary
Our governance
Committee membership: Chairman of the
Remuneration Committee, member of the Nomination
and Audit Committees
Date appointed: 15 November 2016
External directorships: Non-listed: Chair of
Braidwater Limited, Non-Executive Director of
Moulded Foams Limited, and Partner of MJS
Development Consultancy LLP.
Experience: Nigel is a Non-Executive Director at
PPHE Hotel Group Limited. He was Property and
Development Director of the John Lewis Partnership
until January 2018, where he was responsible for
the property strategy and portfolio across both John
Lewis and Waitrose, including stores, supermarkets,
distribution centres and manufacturing sites. He joined
the John Lewis Partnership in 1999, having previously
held roles with Tesco plc from 1989 to 1999, including
as Construction Director, and with John Evers &
Partners from 1985 to 1989, having trained as a
Quantity Surveyor.
What he brings to the Board: Property,
construction and customer experience in a consumer
facing industry. Property strategy, land acquisition
and development.
External directorships: Listed: Non-Executive
Director of PPHE Hotel Group Limited. Non-listed:
Non-Executive Director of RG Carter Construction and
Trustee of Maudsley mental health charity.
5 Katherine Innes Ker
Independent Non-executive Director
Committee membership: Nomination, Remuneration
and Audit Committees
Date appointed: 09 October 2018
Experience: Katherine is a Non-Executive Director at
Go-Ahead Group PLC, Chair of the Mortgage Advice
Bureau (Holdings) plc, and Senior Independent Director
and Chair of the Remuneration Committee of building
products company Forterra plc. Katherine was a
Non-Executive Director of Taylor Wimpey plc
from 2001 to 2011 and Chair of the Remuneration
Committee from 2004 to 2011 and non-executive
director of Bryant Group plc prior to the acquisition by
Taylor Woodrow. She was Non-Executive Director at
St Modwen Properties PLC from 2010 -2013, and other
appointments include Gigaclear Limited until 2018 and
Colt Telecom Group SA until 2015. Katherine has a
degree in Chemistry and a PhD in Molecular Biophysics
from Oxford University.
What she brings to the Board: Strong Board and
broad commercial experience, corporate finance,
mortgage lending, house building and residential
construction industry.
External directorships: Listed: Go-Ahead Group PLC,
Chair of the Mortgage Advice Bureau (Holdings) plc,
Forterra PLC. Non-listed: Independent Chair of the
Remuneration Committee of Balliol College, Oxford and
member of the Management Board of the Bonavero
Institute of Human Rights, Oxford University.
6 Mike Stansfield
Independent Non-executive Director
Committee membership: Nomination, Remuneration
and Audit Committees
Date appointed: 28 November 2017
Experience: Mike is Non-Executive Chairman of
Braidwater Limited and a Non-Executive Director of
Moulded Foams Limited, both private equity backed
companies. During his executive career he was Chief
Executive of David Wilson Homes from 1997 until
2005, having been appointed a Director of Wilson
Bowden plc in 1994 and holding positions with David
Wilson Homes, including Divisional Chairman and
Managing Director. He was also Chairman of WBD City
Homes Limited from 2003 to 2005, a board member
of the Housing Forum from 2002 to 2011, and a
Non-Executive Director of NHBC Building Services
from 2005 to 2014.
7
Greg Fitzgerald
Chief Executive
Committee membership: None
Date appointed: 18 April 2017
Experience: Greg was Chief Executive of Galliford
Try Plc from 2005 to 2015, having previously been
Managing Director of its house building division
from 2003. Prior to this he was a founder and
later Managing Director of Midas Homes, which
was acquired by Galliford Try Plc in 1997. As Chief
Executive, he transformed Galliford Try Plc from
a building contractor into a well-respected house
building and construction business, which included
the acquisition of Linden Homes in 2007. Greg was
Executive Chairman of Galliford Try Plc during 2015
before becoming non-executive Chairman from
January to November 2016. He was a Non-Executive
Director of the National House Building Council from
2010 until July 2016.
What he brings to the Board: Leadership and
strategic focus in house building and construction
industry, business growth and value creation.
External directorships: Non-listed: Chair of Ardent
Hire Solutions Limited and Baker Estates Limited.
8
Graham Prothero
Chief Operating Officer
Committee membership: None
Date appointed: 03 January 2020
Experience: Graham was appointed as COO of Vistry
Group PLC on completion of the acquisition of the
Linden Homes and Partnerships & Regeneration
businesses of Galliford Try Plc. Graham was Chief
Executive of Galliford Try Plc from March 2019, having
previously served as Finance Director since 2013.
From 2008 to 2013, he was Finance Director of
Development Securities plc (now U&I Group plc).
He is a Fellow of the Institute of Chartered
Accountants in England and Wales and was previously
a partner at Ernst & Young LLP.
What he brings to the Board: Leadership, strategic
focus, financial and accounting expertise.
External directorships: Listed: Non-Executive
Director and Chair of the Audit Committee of Marshalls
plc. Non-listed: Trustee and Vice Chair of the Jigsaw
Trust (a charitable trust).
9
Earl Sibley
BA (Hons) ACA, Chief Financial Officer
Committee membership: None
Date appointed: 16 April 2015
Experience: Earl is a chartered accountant and
re-joined the Company as Group Finance Director
in April 2015 having worked as Group Financial
Controller from 2006 to 2008. Earl served as Interim
Chief Executive from January to April 2017. He held
a number of senior finance and operational positions
with Barratt Developments plc from 2008 to 2015,
including Regional Finance Director and previously
worked for Ernst & Young LLP.
What he brings to the Board: Leadership, strategic
focus, financial and accounting expertise.
External directorships: None.
Committee membership: Secretary to the Board and
Board committees
Date appointed: 01 December 2001
Experience: Martin is a Fellow of the Institute of
Chartered Secretaries and Administrators. He has
nineteen years of experience with the Company and
was previously Group Company Secretary of London
Forfaiting Company PLC from 1997 to 2001.
What he brings to the Board: Governance,
regulation and compliance.
External directorships: None
Executive officers
11
Keith Carnegie
Chief Executive - Housebuilding Division
Experience: Keith is a qualified solicitor
(non-practising) and joined the Company in 1999 as
a Regional Legal Director, having been a partner in
private practice. He has held a number of senior
roles within the Group, including Regional
Managing Director, Division Chairman and Chief
Operating Officer.
12
Stephen Teagle
Chief Executive - Partnerships Division
Experience: Stephen was appointed as Chief Executive
of Vistry Partnerships on completion of the acquisition
of the Linden Homes and Partnerships & Regeneration
businesses of Galliford Try Plc. Stephen joined Galliford
Try in 2006 and was appointed Chief Executive of
its Partnerships business in 2016. He is a chartered
surveyor and has more than 25 years’ experience in
the regeneration and affordable housing sectors, with
time spent both commissioning schemes as well as
working in the private sector, giving him a unique
perspective on joint ventures, regeneration and mixed-
tenure delivery. Stephen is also Chair of the Housing
Forum, a cross-sector membership network of 150
organisations and businesses that collaborates to
promote improved supply and better quality homes.
13 Debbie Hulme
Group Customer Experience Director
Experience: Debbie joined the Company in 2017 and
was appointed to the Vistry Executive Leadership
Team in July 2020. She previously held the role of Vice
President of Customer Experience at Virgin Atlantic
and also worked at Thames Water and British Airways
where she held senior roles in Brand, Customer
Experience and Change Management.
Vistry Group PLC | vistrygroup.co.uk | 83
Full year report 2017 | Performance | 83
Corporate governance report
2020 saw challenges crystallise that could not have been foreseen.
Following the Acquisition, focus in the initial months was on integration
and the delivery of synergies. However, this was soon coupled with the
need to anticipate and manage the impacts of the pandemic, creating a
defining moment for our leadership teams and governance structures.
The outcomes have been positive and I am delighted with the
determination, innovation and drive with which our talented employees
have persevered to deliver the best possible results in 2020 for all
our stakeholders.
Ian Tyler | Chairman
Business performance
During any crisis it is important that an
organisation stays true to its purpose,
values and culture, with uncharted waters
demanding a rapid response, agility and
innovation. The newly formed Group,
under the leadership of our CEO and the
other members of the Executive Leadership
Team (ELT) already faced a year of
challenge and uncertainty with the level
of change inherent in the integration
process and in the delivery of synergies.
It is testament to the strength of the
Group’s culture and the capability of
the leadership team that it has withstood
significant change and prevailed, with
values intact and employees supportive of
the difficult decisions that were necessary
during the year. The progress of the Group
in the past several years is underlined by
the fact that it has, at the same time,
been able to successfully navigate and
mitigate the impacts of the pandemic
to deliver successful outcomes for all
our stakeholders. The strength that has
been shown gives me great optimism
that the Group can open up significant
opportunity in the years ahead and deliver
improved returns for shareholders.
One area that has seen added
impetus as a result of the pandemic
has been the enhancement of our
sales processes, as we accelerated a
move to a new digital platform,
providing seamless interaction for our
customers, from first contact to digital
viewings and the ability to reserve
a home with “six clicks” on a device.
Our sales processes were also quickly
adapted for social distancing, with all
face to face contact and viewings by
appointment only. Thanks to our dedicated
sales teams, these innovations been
extremely successful and feedback from
our customers has been very positive.
The Group achieved a 5-Star rating for
the 2018/19 HBF year and the clear
expectation is that this will be maintained
for the 2019/20 HBF year, when the
results are announced.
As this is written, we are enduring our
third National lockdown and I would
like to thank all our employees, at
work on our development sites, in our
offices and working from home, and
our subcontractors and suppliers for
their determination and perseverance in
positioning the Group for success in 2021.
Our thanks also go to our customers for
their patience and understanding as we
deliver their new homes in accordance with
Government guidance and social distancing
measures and to our shareholders, who
have shown keen interest in our revised
operating methods and the progress we
have made during 2020, providing strong
support and allowing us to understand
their key concerns and perspectives.
In December 2020, we repaid all
funds received from the Government’s
Coronavirus Job Retention Scheme and
the Group has not drawn on the Covid
Corporate Financing Facility (‘CCFF’),
despite being eligible, meaning that no
Government support was retained by the
Group at the end of 2020.
Following the conclusion
of the Acquisition,
transforming the Group into
a top five housebuilder, the
Board focussed on delivery
of a successful integration
and realisation of the
expected synergies.
With our competitive position
and capability transformed, the
expectation was for 2020 to be a
year of consolidation, aligning
governance structures and internal
controls and adopting standard
operating systems and methods
across the enlarged Group. To be
able to report that all this has been
achieved and that some expectations
have been exceeded, in the most
difficult of years, is a great pleasure.
There are, of course, areas of work in
progress and more to be done, but
the Board’s expectations at the start
of 2020 have very largely been met,
dented only by the need to close our
development sites for approaching
five weeks as a result of the March
2020 lockdown.
84 | Our governance
The Group achieved a 5-Star rating for the 2018/19
HBF year and the clear expectation is that this will be
maintained for the 2019/20 HBF year, when the
results are announced.
The Board is delighted with the progress
made by the Group in difficult
circumstances. As we move through
2021, with the ongoing uncertainty of the
pandemic but opportunity ahead, we will
continue to invest in supporting our people
and developing our systems to deliver
sustainable success and will continue to
maintain our focus on customer service and
the consistent delivery of quality homes to
our customers that meet their expectations.
Our people, our culture and our
supply chain
The Board continues to believe that the
right culture and values play a pivotal role
in delivering long term sustainable success
and this requires a continuous focus.
The right standards and behaviours
enable the Board to function effectively
in supporting and overseeing senior
management as they reinforce the
Group’s culture and values. We have a
redesigned induction process for our
new colleagues, and the CEO’s weekly
podcast, ELT communications, staff
presentations, and training sessions all
contain repeat messaging, including the
publicising of mental health support and
our whistleblowing reporting line
“Speak Up”, designed to promote
transparency and accountability.
There has been a significant focus in the
year on diversity and inclusion within our
Group. In an industry which has, in many
senses, traditionally lacked diversity,
I am pleased to report on real progress
being made by the Group with senior
appointments going to women and
individuals in ethnic minority groups.
A working group was set up during the year
to take a temperature check on the status
of diversity and inclusion within the Group,
which sought the views of employees
and put forward a report proposing new
initiatives and how those in progress could
be developed, reshaped or expanded.
Further detail is given in the Nomination
Committee report.
Control environment
An effective control environment has
been maintained throughout all the
challenges 2020 has delivered and the
strength of our corporate governance
framework has served us well. With the
March 2020 lockdown, it was evident that
clear leadership, strong governance and
effective decision making was needed and,
following the initial Board meetings of the
year, which took place as usual, the Board
moved to the use of Microsoft Teams and
occasional hybrid meetings. Three of our
non-executive directors were required
to shield to protect loved ones, meaning
that they were not available for physical
meetings or site visits. Open discussion
with the right level of challenge and
quality of decision making were maintained
in the virtual environment, with the
Board quickly adapting to the use of
technology, all meetings being effective
and achieving objectives, and all directors
contributing strongly. The ELT delivered
strong operational control, information
flows to the Board were maintained and
there was no disruption to internal controls.
Having placed the initial focus on
the integration and the delivery of
synergies for the benefit of shareholders,
Housebuilding continues with its
strategy to maximise output through
controlled volume growth in the
medium term, whilst maintaining
high quality delivery and Partnerships is
accelerating revenue growth, increasing
output from land-led and mixed
tenure development. Meanwhile,
strong leadership has continued to
reap rewards, with our Chief Executive
providing a driven “hands on”
operational focus and maintaining his
communications across the business,
with regular calls and virtual Microsoft
Teams meetings to assess performance,
talk about the challenges faced, and
reinforcing our culture and values.
Our governance
The ELT has ensured that this focus
continues to be cascaded through the
governance structure, supported by
divisional staff in monitoring business
units as they work to meet expectations
and deliver in the right way for all
our stakeholders.
Ongoing change projects delivered
significant operational improvements and
benefits in 2020, continuing our focus on
investing in our people and in systems to
allow them to work more effectively. It has
been noticeable and is highly positive that
the Group is an organisation that quality
people actively want to join.
The Board
The Board has ultimate responsibility for
the success of the Company and my task
focuses on ensuring that it provides strong
strategic leadership, monitors the delivery
of strategic priorities and objectives and
rises to challenges along the way, whilst
keeping an eye on emerging and principal
risks. In doing so, the Board must ensure
that it upholds the highest standards
of integrity and promotes effective
relationships, communication, openness
and accountability in the boardroom,
throughout the business and externally
with stakeholders.
The main activities of the Board during
2020 are provided in detail in this report
and, in addition to regular activities,
included an in-depth review of strategy
at the annual strategy day, monitoring
the integration and delivery of synergies,
a review of succession planning, and
receiving reviews and presentations on a
range of topics from advisors and senior
management. Details of actions taken in
response to the pandemic are also provided.
The Board completed an external
independent evaluation of its 2020
performance at the end of 2020 /
beginning of 2021.
Vistry Group PLC | vistrygroup.co.uk | 85
Corporate governance report
One consequence of the decision not to
change our Board composition in 2020
has been that we have not been able
to meet the minimum target for 33%
women’s representation on the Board
at the end of 2020 recommended by
the Hampton-Alexander Review.
We remain completely supportive of
both this recommendation and the
philosophy which lies behind it and that
of the Parker Review, including the need
for our ELT and wider management and
workforce to represent the full diversity
of the communities we serve. We expect
the review of Board composition and
the recruitment of a new non-executive
director to provide the basis for greater
Board diversity and we are committed
to being fully compliant with the
Hampton Alexander recommendation
by 31 December 2021.
I would like to thank my colleagues on
the Board for their collective support and
strong individual contributions during
a highly challenging but, ultimately
successful, year in 2020. The Board has
functioned well despite being unable to
meet in person for much of the year and
held a number of additional meetings.
The non-executive directors continued
to make a significant contribution
and utilised their collective skills and
experience in challenging and testing
views, assumptions and proposals put
forward by the executive directors
and advisors.
Dialogue with shareholders
We value dialogue with all our
shareholders, institutional and
retail, and have maintained ongoing
engagement with our major shareholders
during 2020. The Board is very cognizant
of the vote on the Remuneration
Report at the General Meeting held on
20 May 2020. The Remuneration
Committee engaged with shareholders,
institutions and proxy advisors ahead
of the vote and has done so since,
responding to the concerns of those
shareholders who voted against
the Report.
Looking forward, our 2021 AGM will be
held on 17 May 2021 and you will find the
Notice at the end of this Annual Report.
This report has been approved by
the Board and I can confirm that
your Company was compliant with
the provisions of the UK Corporate
Governance Code during 2020.
Ian Tyler
Chairman
The overall process adopted has allowed
the Board to assess performance in 2020
and the progress with the action plan
from the 2019 internal evaluation, whilst
looking forward to the challenges and
opportunities ahead in 2021 and beyond.
The external evaluation has confirmed
that the Board is performing effectively
and that many areas of Board
responsibility have been well handled
through 2020, with an appropriate
balance of agenda items through
the Covid pandemic. Several areas of
strength were identified in the feedback
and included oversight of governance
and compliance in the business, risk,
Boardroom culture and strategy.
Feedback confirmed that a transparent
executive and a supportive Board
have worked together well through a
challenging year. The Board has reached
consensus on complex decisions and
shown adaptability in a year which was
in no way business as usual. The action
plan for 2021 has been designed to
progress succession planning and the
review of Board composition, to focus
on diversity and inclusion, and to build
on the development of the Group’s
sustainability strategy.
With the Acquisition on 3 January
2020, we welcomed Graham Prothero
to the Board. As well as broad sector
and corporate experience, Graham
brought a deep knowledge of the
acquired businesses which has been a
great asset to the Board over the year.
Other than Graham’s arrival, the Board
took a conscious decision not to change
its composition through the integration
process and through the turbulence of
the pandemic. As a result, over the year,
the Board has been extremely effective in
both supporting and challenging the
executive team to deliver all the intended
benefits of Acquisition and to steer the
Group through the impacts of Covid-19.
We are now in a strong position to
look at how the composition of the
Board should evolve to support the
enlarged business and to ensure that it
fully reflects our culture and values as
we look to the future. This will include
the recruitment of a further non-executive
director, the search for which is
currently underway.
86 | Our governance
Our governance
The Mayfield | 3 bedroom home
Furrowfields, Bishops Itchington
Corporate
governance
report
Introduction
This report sets out the Company’s
compliance with the UK Corporate
Governance Code “the Code” issued
by the Financial Reporting Council
(publicly available at frc.org.uk) and also
describes how the governance framework,
explained in our corporate governance
policy guidelines, available on the Company’s
website (vistrygroup.co.uk/investors/
corporate-governance), is applied.
The Board is pleased to report that the
Company has, throughout 2020, complied
with and applied the provisions of the Code.
Vistry Group PLC | vistrygroup.co.uk | 87
Corporate governance report
Our purpose, culture and values
As a housebuilder, Vistry Group exists
to develop sustainable new homes and
communities across all sectors of the
UK housing market. We achieve this by
operating in a sustainable way, sourcing
the materials that go into our homes
responsibly, and ensuring that our
house-type designs are fit for ease of
construction, the needs of our customers,
and efficiency during their operating
life cycle, including energy usage.
The Board maintains oversight of the
Group’s purpose through reports,
feedback from the executive directors,
other members of the ELT and senior
management, engagement with staff
and other stakeholders, and through
monitoring KPIs. Further, the Board
ensures that the Group’s purpose, values
and strategy are aligned with culture.
The Group’s values are defined as
Integrity, Caring and Quality (ICQ).
Our ICQ values were originally distilled in
consultation with employees and other
stakeholders and this has ensured a
natural fit with the progression of Vistry
Group during 2020. The Acquisition
saw the immediate promotion of our
culture and values to ensure that this
fit was established across the Group.
The clear cultural similarities already
existing between the businesses allowed
us to do this from a position of strength.
Linden Homes and Vistry Partnerships
had, for some time, operated under the
ethos “Doing the right thing”, which
aligned to the Group’s ethos “Do the
right thing”.
These similarities have been built on to
strengthen our culture. Early in 2020,
roadshow presentations, meetings and
visits from the CEO, the ELT and the
wider leadership team were used to
communicate and reinforce our purpose,
culture and values. With the March 2020
lockdown, communications leveraged
the strengths of our IT platform and
largely comprised of regular emails and
broadcasts to keep staff informed on
the steps and measures the Group was
taking in anticipating and mitigating
the impacts of the pandemic, whilst
reminding employees of our strategy,
our values, and the Group’s ethos
“Do the right thing”.
88 | Our governance
This was illustrated as particularly
important in engagement with
stakeholders, such as meeting our
customers’ expectations, paying our
subcontractors and suppliers promptly,
providing support to our people across
the Group, particularly their mental
health, alongside listening to and
responding to feedback. Health and
safety communications and updates were
given prominence, as the Group put in
place and evolved measures prioritising
the safety, health and wellbeing of our
people, customers, suppliers and wider
society. Distancing operating measures
were rapidly implemented, in many
cases evidencing the ingenuity and
innovation of our site staff and allowing
the majority of our development sites to
re-open on 27 April 2020, having been
decommissioned on 24 March 2020,
after a period of just under five weeks.
Our culture was further reinforced by
presentations and weekly podcasts
delivered by the CEO and available to all
staff on the Group’s intranet. Later in the
year, nine virtual roadshow sessions took
place, comprising presentations from
the CEO, COO and CFO setting out the
progress that the Group had made during
the year, each of which were followed by
a Q&A session during which staff were
encouraged to ask questions. Our people
had the opportunity to attend one of
the nine events, making participation
manageable and allowing them to
attend an alternative session if unable to
attend that allocated to their function.
A comprehensive summary of the Q&A
was added to the Group’s intranet to be
accessed afterwards. As a result of this
interaction, the ELT took the decision to
pay the general staff bonus (equal to a
20% pay-out) in December rather than
January and £50 gift vouchers were sent
to all our employees prior to Christmas
as a thank you for their support and
commitment during the year.
In addition to the other measures
designed to monitor and assess culture,
a culture audit was completed, using
external resource and support, during
the second half of the year, which was
seen as a brave decision and was
the subject of debate by the ELT,
given the operating environment.
The process comprised of interviews
and workshops across the Group.
The output was reassuring, contained
no significant surprises and showed
strong positivity across the Group with
high levels of engagement, in addition to
opportunities for improvement.
The main issues identified, such as
the further progress needed with
diversity and inclusion, are already
being addressed with a strong level of
awareness amongst the wider leadership
team and actions being developed and
followed through.
All new joiners now receive a virtual
induction which explains the importance
of culture, how our values feed into
the best behaviours, and set out our
expectations for our people as they
go about their daily working lives.
Our leadership teams know the
importance of modelling our values in
all contact with employees, suppliers
and other stakeholders. Our internal
messaging to our employees is tailored
to reflect them and all employee
presentations and events carry reminders
of who we are and how we go about
what we do. We listen to our people’s
feedback, provide support to underpin
the right behaviours, which includes
an open and accessible management
style and people functions that provide
the right advice when needed. All of
this is supported by “Speak Up”, our
independent whistleblowing reporting
line, which allows concerns to be raised
in confidence.
We regard our culture as a key
contributor to long-term sustainable
business success. It links to our purpose
and underpins our strategy, prioritising
people in our operations, both in the
delivery of satisfaction for our staff and
our customers and in the provision of
quality service. The same is true in
ensuring a healthy and safe working
environment for all our employees, with
the aim that everyone safely reaches the
end of their working day. Our culture
supports the range of our activities in
meeting our purpose and it is through
our focus on long-term sustainable
success that we will deliver positive
outcomes for all our stakeholders.
Title The Board maintains a clear focus on
culture and, in a normal year, uses
discussion inside and outside Board
meetings to hear the views of senior
management on how well our values are
embedded and the further work needed
to maintain and improve this position.
Again, in a normal year, this activity is
coupled with visits to business units and
sites, allowing the directors to talk to
staff at all levels and hear their views.
In this way, the Board has the
opportunity to get a real sense of
how our culture is working and the
underlying behaviours and attitudes
being portrayed. During 2020, these
opportunities were much reduced,
but feedback was maintained on staff
interactions, communication and feedback
via the executive directors and senior
management attendance at virtual and
hybrid Board meetings, together with a
reduced number of individual site visits on
which feedback was provided.
Together with KPIs and other data,
this engagement allows the Board to
periodically assess whether purpose,
culture, values and strategy are aligned
and reflect the expectations of the Board,
leaving it to influence where necessary.
The Board reviewed workforce related
policies and practices during the year and
how they are implemented throughout
the Group, particularly in light of the
pandemic and the adaptations required,
such as flexibility needed for home
working and child care, and concluded
that they remain fit for purpose and
consistent with the Group’s culture and
values and can be expected to support
long term sustainable success.
Our leadership structure
The Board is responsible to the Company’s
shareholders for the long-term success of
the Group and its purpose, values, strategy,
culture, business model and governance.
It sets and embeds the Group’s culture,
provides leadership and direction, and
determines the strategy and strategic
objectives. The implementation of
strategy by the executives is monitored
and business plans, budgets and forecasts
are reviewed and challenged, together
with outcomes, with independent
judgement being applied by the non-
executive directors.
The monitoring of overall performance and
progress with operations against business
plans, using KPIs and, in a normal year,
coupled with numerous development site
and business unit office visits, allows the
Board to test the individual and collective
capabilities of the Group and its ability
to deliver quality sustainable homes,
on time and on budget, to customers,
meeting their expectations. These activities
are carried out within an approved risk
appetite and with regular monitoring of
internal controls and risk management.
The Board has a schedule of matters
reserved for its decision, which is reviewed
and approved on an annual basis.
A copy is available on the Company’s
website (vistrygroup.co.uk/investors/
corporate-governance). This schedule
dovetails with delegation of authority
documents which operate across the
Group’s activities and down through the
governance structure. These delegations
have recently been reviewed to ensure
that they are consistent in purpose and
design, provide appropriate controls, and
are understood by those responsible for
their effective operation.
The structure of the business was
reorganised following the Acquisition,
as reported in our 2019 Annual Report
and Accounts. Below the Board, the
ELT is responsible for the day to day
operations of the Group, comprising the
CEO, COO, CFO, CEO of Housebuilding,
CEO of Partnerships, the Group Customer
Experience Director and Group
Company Secretary.
Our governance
The CEO, COO and CFO report to the
Board as executive directors and the CEO
of Housebuilding, CEO of Partnerships,
and the Group Customer Experience
Director regularly attend Board meetings
to report on operations, projects and
initiatives within their remit.
The leadership structure served us well
during 2020, delivering the integration,
the realisation of synergies, the response
to the pandemic, and an excellent
operational performance whilst facing
significant challenges. A reorganisation
of Housebuilding took place in July 2020,
designed to balance operations within an
optimised structure. Housebuilding is
now managed across three Divisions,
South, East and West, which are
responsible for the collective management
of the business units within their
operating areas. Divisional staff provide
leadership, operational direction and
finance support. The Divisions report
through the Divisional Managing Directors
to the CEO of Housebuilding who, in turn,
reports to the COO.
The Group currently has 23 business
units, with Housebuilding having 13 and
Partnerships comprising 10.
Each business unit operates within an
allocated geography and is run by a board
comprising directors responsible for
specific disciplines. Standardised operating
procedures and systems have been rolled
out across the Group during 2020 as
part of the integration process and their
implementation and application is being
monitored to ensure a consistent and
effective method of operating is achieved,
reducing risk and supporting the delivery
of longer term business objectives.
Vistry Group PLC | vistrygroup.co.uk | 89
Vistry Group currently has 23
business units, comprising of
Vistry Housebuilding 13 business units
Vistry Partnerships 10 business units
Corporate governance report
The business unit MDs report into the Divisional Managing Directors.
Group functions provide support to the Board, the executive
directors, the ELT, the Divisions and the business units. In total, the
leadership team comprises approximately 50 members of staff.
The leadership and governance structure expanded significantly in
2020 as a result of the Acquisition and is shown below for 2021.
Organisation structure chart
Vistry Group PLC Board
Responsible for leadership, strategy,
values and governance
ELT
Executive Leadership Team
Vistry Homes Limited Board
Responsible for the operations of the Group
West Division Board
Responsible for the operational
management of the West Division
1 Mercia
2 West Midlands
3 Cotswolds
4 Western
5 South West
East Division Board
Responsible for the operational
management of the East Division
6 Yorkshire
7 East Midlands
8 Northern Home Counties
9 Eastern
South Division Board
Responsible for the operational
management of the South Division
10 Thames Valley
11 Southern
12 South East
13 Kent
90 | Our governance
Audit Committee
• Oversees financial
Remuneration
Committee
statements and reporting
• Sets and reviews
• Monitors internal controls
and risk management
• Monitors reporting and
effectiveness of external
and internal auditors
remuneration policy
• Determines remuneration
and incentives of the
executive directors and
the Chairman
• Sets performance criteria
for incentive plans
Nomination Committee
• Reviews balance and
composition of the Board
• Maintains focus on
succession planning
• Leads recruitment process
for the Board
• Recommends appointment
of directors
• Sets diversity policy
Partnerships Board
Responsible for the operational
management of Partnerships
1 North East
2 Yorkshire
3 North West
4 East Midlands
5 West Midlands
6 East England
7 London
8 Drew Smith
9 West
10 South West
1
2
6
3
1
9
4
4
7
8
5
2
3
9
10
6,7
11
8
12
13
5
10
Chief Executive’s review
Our governance
The Lime | 5 bedroom home
Whitehouse Park, Milton Keynes
Vistry Group PLC | vistrygroup.co.uk | 91
Strategic report | Business overview Corporate governance report
Tenure in
current role
Attendance
at scheduled
meetings
Attendance
at additional
meetings
Current role
Name
Ian Tyler
Chris Browne
Date of
appointment
29/11/13
01/09/14
Chairman
7.1 years
Non-executive
6.3 years
Ralph Findlay
07/04/15
Non-executive
5.75 years
Nigel Keen
15/11/16
Non-executive
4.1 years
Mike Stansfield
28/11/17
Non-executive
3.1 years
Katherine Innes Ker
09/10/18
Non-executive 2.25 years
Greg Fitzgerald
18/04/17
Chief Executive
3.75 years
Graham Prothero
03/01/20 Chief Operating Officer
1.0 year
Earl Sibley
16/04/15
Chief Financial Officer
5.75 years
8/8
8/8
8/8
8/8
8/8
7/8
8/8
8/8
8/8
3/3
3/3
3/3
3/3
3/3
3/3
3/3
3/3
3/3
The Board maintains a broad range of
expertise and experience and a strong
blend of skills, which has allowed it to
perform effectively during a period of
significant change and challenge for the
business, which included the integration,
delivery of synergies, and responding
to the pandemic. The non-executive
Chairman brings a strong track record of
commercial experience in construction
and infrastructure related industries,
which benefit the Group in the delivery
of its strategy and oversight of its
business plans and performance and
were invaluable during the integration
process and in steering the Group
through the pandemic in 2020. Ralph
Findlay, Senior Independent Director, has
strong commercial, financial and general
management expertise from a consumer
facing industry and Chris Browne brings
a strong commercial and operational
background, again from a consumer
facing industry.
Nigel Keen has an in-depth construction
and property background and experience
of running property strategy and
portfolios, once again from a consumer
facing industry, while Mike Stansfield
brings a strong housebuilding industry
background, spanning three decades.
Katherine Innes Ker is an experienced
non-executive director across a range
of sectors and has extensive experience
of the City, in addition to housebuilding
experience. All the non-executive
directors contributed strongly during the
year, bringing their previous experience
to bear in debate and challenging the
executive directors and advisors.
The five non-executive directors have
been determined by the Board to be
independent in character and judgement
with no relationships or circumstances
likely to affect, or that could appear to
affect, their judgement.
All the directors will be offering
themselves for re-election at the
forthcoming AGM, in accordance with
the Code. The Board strongly supports
all the individual director’s re-elections,
taking account of the balance of skills
and expertise and the performance of
the Board as a whole. The directors’
biographies on pages 82 to 83 and the
notes to the AGM Notice on pages 193 to
199 together provide details explaining
why their individual contributions are
and continue to be important for the
Group’s long-term sustainable success.
The Board
During 2020, the membership of the
Board comprised the non-executive
Chairman, five independent non-
executive and three executive directors.
Graham Prothero was appointed to the
Board as an executive director and as
COO on 3 January 2020, increasing
the number of executive directors from
two to three. The Board made a conscious
decision not to change its composition
through the integration process following
the Acquisition. The Board supports
the recommendations of the Hampton-
Alexander Review and, whilst it did
not meet the minimum target for 33%
women’s representation on the Board
at the end of 2020, it is now in a strong
position to review how the composition
of the Board should evolve and
recruitment of a further non-executive
director is currently underway. The Board
is committed to being fully compliant with
the Hampton Alexander recommendation
by 31 December 2021.
Biographical details for the directors are
provided on pages 82 to 83. Their dates
of appointment, length of service to
the end of 2020 and attendance at
Board meetings are all shown above.
The Board maintained its schedule for
the year and held eight main board
meetings and all members attended
the strategy day. In addition, the Board
held three meetings in connection with
the Acquisition and the pandemic as
it progressed through various stages
during the year. Katherine Innes Ker was
unable to attend one scheduled meeting
as a result of illness. The AGM in May
2020 was held as a “closed” meeting, in
accordance with Government guidance
and, recognising the importance of
maintaining engagement, shareholders
were given the opportunity to put
questions beforehand, in addition to
having access to a Q&A on our corporate
website before and after the meeting.
A General Meeting was held on 14 July
2020 in connection with the bonus issue
of shares admitted to dealing on 15 July
2020, again as a “closed” meeting with
the same opportunities for engagement
as were provided for the AGM.
92 | Our governance
Board meetings
and main activities
There were eight scheduled Board
meetings in 2020 and an additional
three meetings in connection with
the Acquisition and the pandemic.
The Board maintains and reviews
a scheduled agenda plan, which
ensures that all key issues and
matters reserved to the Board are
discussed at the appropriate time in
the year, and any requirement for
additional meetings is identified
by the Chairman, in conjunction
with the CEO, COO, CFO and
Company Secretary.
The Chairman reviews meeting
agendas with the CEO and
Company Secretary, who maintains
a rolling schedule of matters
arising, which tracks progress
with actions and is reviewed at
each meeting.
The Board receives a
comprehensive electronic
meeting pack a week in advance
of each meeting, plus other
information required to enable
it to discharge its duties.
Meetings are conducted in an
atmosphere of open and free
flowing discussion and debate,
with a questioning approach
which enables the non-executive
directors to challenge and test
the strategy, progress made with
implementation and delivery,
and proposals put forward by
the executive directors.
Members of the ELT attended a
number of meetings during 2020.
This widens perspective and
debate and increases the range of
views and input available to the
non-executive directors.
Visit our website for details
vistrygroup.co.uk
/investors/corporate-governance
Our governance
The main activities at Board meetings in 2020 were as follows:
• the Chief Executive provided reports and
updates spanning the Group’s activities,
including progress with implementation
of the strategy, the integration, delivery
of synergies, customer satisfaction,
health and safety, HR matters, investor
feedback, trading performance, land
acquisitions / sales, affordable housing,
part-exchange, and progress with key
projects, including joint ventures.
• the Chief Financial Officer presented the
2020 Budget for approval and provided
a regular finance report. The finance
report includes, at various times, rolling
forecasts, cash flow forecasting, Group
KPIs, budgets, results, projections,
leading market indicators, analyst
consensus data, an analysis of share
price valuation and movements, as
well as progress reports from several
disciplines reporting to the Chief
Financial Officer and project updates.
• the Chief Operating Officer provided
operational reports and updates
spanning Housebuilding and
Partnerships, as well as progress
reports from several disciplines
reporting to the Chief Operating
Officer and project updates.
• the Budget for 2021 was the subject
of debate, challenge and detailed
consideration and included review of
individual Budgets for Housebuilding
and Partnerships.
• the CEO of Housebuilding, CEO of
Partnerships and the Partnerships
London Divisional MD presented on
the performance of their Divisions and
explained the progress made across the
range of their operations and activities,
taking questions on the challenges
experienced and those lying ahead.
• the Board received regular reports
covering health and safety and
discussed performance against KPIs,
areas for improvement and monitored
actions taken, including service strikes
and the effectiveness of training and
engagement with site teams and
subcontractors.
• the Board monitored customer
satisfaction performance and rolling HBF
survey results.
• the Board reviewed and approved
revised Delegated Authority limits for
the enlarged Group
• the Board received feedback from the
non-executive director responsible
for leading workforce engagement,
following a People Forum meeting held
during the year, and discussed employee
views regarding the Acquisition,
integration and actions taken in
response to the pandemic.
• post investment appraisals
were reviewed.
• the outcome of the transfer of
circa 85 sites between business
units was reviewed.
• development of the Group’s approach to
ESG and sustainability was reviewed.
• the 2019 full-year results and the
2020 interim results were reviewed
and approved, including release to the
London Stock Exchange.
• actions arising from the 2019 Board
performance evaluation were progressed
and monitored and the approach to
the external formal evaluation for
2020 was approved and the evaluation
process commenced.
• following the Acquisition, progress
with the integration and the delivery
of synergies was monitored at each
meeting, with enhancing or corrective
actions being proposed as necessary to
ensure momentum was maintained.
• the Acquisition draft closing statement
was reviewed.
• the Board considered how best
to demonstrate the value within
Partnerships, resulting in a presentation
to analysts and investors in
November 2020.
• consideration and review of
dividend strategy.
• the Board continued to assess the
possible impact of Brexit on the
Group’s activities.
The Board also reviewed emerging and
principal risks and their mitigation,
regulatory announcements, major
shareholdings, litigation, the process for
the longer-term viability statement, plans
for the 2020 strategy day, and actions and
contingency planning in connection with
the pandemic.
Vistry Group PLC | vistrygroup.co.uk | 93
Corporate governance report
Main actions taken in response to the pandemic in 2020:
Following the Prime Minister’s
lockdown announcement on 23 March
2020, the Board closely monitored
progress with actions taken to
mitigate the impact of Covid-19 and
ensure the health and safety of
our employees, subcontractors,
suppliers, customers and wider society.
Actions were implemented by the ELT
and regular reporting was provided to
the Board, including weekly updates
from the Chief Executive.
• Land buying activity refocused on
short term options and a freeze
placed on recruitment activity
• Active management of cash flows
maintained to ensure business
resilience and position monitored
so that our subcontractors and
suppliers were supported and
paid promptly
• Regular communications with the
supply chain maintained
• Immediate measures included the
decommissioning of development
sites, with the closure period
lasting from 24 March until 27 April
2020 (sites reopened with social
distancing measures implemented)
• Sales offices temporarily closed and
remote contact maintained with
existing and prospective customers,
providing virtual tours of homes,
before moving to appointment only
viewings (with social distancing
measures in place)
• Support measures for staff put in
place and the importance of
office staff working from home
regularly communicated
• Circa 56% of staff furloughed on
full pay as at the beginning of
April 2020, with a peak of 67% in
mid-April
• Training opportunities provided for
furloughed staff and volunteering
and community support encouraged
• Regular staff communication on
matters affecting them maintained
and mental health support and
resource reminders provided
• Staff communications on business
performance regularly provided
• Market updates released and
regular communications with major
shareholders maintained
• Temporary pay-cuts of 20% of
salary for the executive directors,
remainder of the ELT and other
senior management put in place for
the months of April to July 2020
(repaid in December 2020)
• Temporary pay reductions of
between 2.5% and 7.5% during
June and July 2020 put in place for
all general staff earning above £20k
(repaid in December 2020)
• Reduction in non-executive
directors’ fees of 20% put in place
for the months of April to July 2020
(repaid in December 2020)
• Conversion of second interim
dividend to a bonus issue with
a General Meeting held on
14 July 2020
• Application to Covid Corporate
Financing Facility (CCFF) and
eligibility confirmed
• Repayment of Coronavirus Job
Retention Scheme monies and no
recourse to the CCFF (meaning that
no Government support was in
place as at the end of 2020)
• No staff furloughed during
the second and third National
lockdowns
94 | Our governance
Two of eight scheduled Board meetings
were held in Reading and London before
the March lockdown commenced.
The remaining six were held by telephone
conference call (1); using Microsoft Teams
(3); or as hybrid meetings in Reading,
with some directors on Microsoft
Teams (2). Three of our non-executive
directors were required to shield to
protect loved ones and the Board was
not able to consider making collective
site visits during 2020; something that,
in any case, would have been kept
under close review, in accordance with
Government guidance. Feedback to the
Board was maintained through reporting
on staff interactions, communication
via the executive directors, and senior
management attendance at virtual and
hybrid Board meetings, together with a
reduced number of individual site visits.
The Board considers all stakeholders in
its deliberations and takes the views and
feedback from shareholders, employees,
subcontractors, suppliers, and customers
into account in its decision making,
considering their interests and the
impact of certain decisions upon them.
This was particularly the case with the
Acquisition and it has continued as the
integration, the delivery of synergies,
and the pandemic progressed through
various stages during the year.
Further information on stakeholder
engagement can be found in the section
172(1) statement on pages 58 to 64.
Prior to and following the vote on the
Remuneration Report at the 2020
General Meeting, the Board engaged
with major shareholders, with the
objective of understanding their
concerns, taking their views into
account, and providing explanation
of the Group’s position in relation
to the necessity of the salary increase
for the Chief Financial Officer.
The Board selected a non-executive
director, Nigel Keen, for workforce
engagement from the beginning of
2019, as the most effective approach
for the Group, which method operates
alongside other feedback channels.
Title With the integration and all the challenges
to be addressed during 2020, one People
Forum meeting was held towards the
end of the year and Nigel Keen attended
to hear the views of employees and,
subsequently, feedback was provided
to the Board. The alternative feedback
channels, such as reporting via the ELT
and the HR function on communication
and the support measures provided to
staff, including regarding mental health,
and whistleblowing operated throughout
the year. The feedback was informative
and helpful to the Board and included
employee views on the difference between
H1 and H2 2020, with all recognising
that it had been a difficult year, and that
further progress was needed regarding
One Vistry. Initiatives on mental health
had been well received and there was
encouragement to do more in terms of
support and training for line managers.
The IT function had been praised for their
role in system change and the support
provided. Recognition had been raised,
with all staff working hard, and the
importance of appreciation and a thank
you from line managers was noted.
The reach of feedback and follow through
regarding the Peakon staff survey was
highlighted, together with BU and local
area communication of actions that
would and would not be taken. The Board
concluded that many positives had come
out of the meeting against the backdrop
of a difficult year, which should be
celebrated, and that the meeting had been
very open. Following the meeting, mental
health support is being supplemented, all
staff received a bonus payment and £50
voucher during December, and feedback
channels used for the staff survey are
being enhanced.
Engagement with suppliers is considered
by the Board in discussions on build
activity, supply chain relationship
management, and procurement and the
views of the Group Commercial Director
are taken into account in decision making.
Our 360° supply chain survey continues
to provide fantastic feedback and
engagement with our supply chain
leading to positive discussions over future
initiatives aligning the supply chain with
our own objectives and key focus areas
around sustainability, carbon reduction
and efficiency.
Regular supply chain engagement
meetings are held with wide reaching
discussions on product development,
initiatives, performance, current
supply and global issues such as climate
change, Brexit and forthcoming
regulatory changes. This keeps both
Vistry and the supply chain aligned and
engaged allowing us to be dynamic and
agile with decision making over our
product and specification.
Engagement with our supply chain in
respect of visibility of our requirements via
our project pipeline process ensures the
supply chain has visibility over all aspects
of our construction activity reducing our
exposure to stock issues and delays.
Engagement with our subcontractors on
our product and development continues
and has helped shape our new Vistry
Group specifications and construction
details for our brands, enhancing our
quality and specification. Our subcontract
base continue to be engaged by our
regional businesses via regular pre-
start and project meetings at business
unit offices and sites and continual
involvement in health and safety and
other matters which affect the wellbeing
of the employees on site.
KPIs remain under consideration
to monitor relationships and service
charters, portal websites and
supplier visits. Supply chain events
are continually being developed to
maintain this key area of engagement
and independent feedback also comes
from the NHBC on the overall
Group’s performance.
Customer feedback is continuously
and consistently monitored through
the HBF customer satisfaction Eight
week and Nine Month Survey.
Dynamics CRM capability has been
deployed across both brands which
continues to build on the digital
engagement with our customers.
This enables customers to complete
a reservation on their mobile, log and
monitor snags and have access to
digital information on their home.
This provides us with insight into the
digital engagement which enables us
to continuously monitor and improve
our product and service offer.
Our governance
The annual strategy day held in
July 2020 provided the Board with the
opportunity for an in-depth review of the
strategy for the Group and progress with
implementation. Discussion included the
competitive and political landscapes, a
review of Vistry Partnerships strategy
with the CEO of Metropolitan Thames
Valley in attendance, the move to a new
digital platform for our sales processes,
development of the Group’s approach
to ESG and sustainability, people and IT
strategy, and a risk assessment update.
The sustainability review centred on the
development of the Group’s sustainability
strategy including setting a science
based pathway to become a Net-Zero
Carbon business and setting targets that
reflect the objectives set in several of the
UN’s Sustainable Develop Goals (SDGs)
and will use the SDGs as part of our
reporting framework.
The programme of informal non-executive
visits to the business units was necessarily
truncated during 2020, with three of
our non-executive directors shielding to
protect loved ones. The visits will resume
as soon as permissible, given that they
allow the non-executives to increase
their knowledge of the Group’s activities
and hear a range of views directly
from our employees at all levels on the
Group’s progress. Importantly, the visits
allow the non-executives to establish a
relationship with local management, test
our culture, reassure themselves that
our values and the right behaviours are
embedded, and hear any concerns from
our people. A total of four non-executive
director visits took place across our sites
and offices following the end of the first
National lockdown.
As required by the Code, the Chairman
held meetings with the non-executive
directors, without the executive directors
present, and the Senior Independent
Director held a meeting with the non-
executives, without the Chairman present.
Vistry Group PLC | vistrygroup.co.uk | 95
Corporate governance report
Board performance evaluation
2020 action plan
Succession planning
Succession planning for the leadership of the enlarged Group to be developed,
with increased focus on executive director succession, Board composition
and the skill sets required. Succession planning for the role of Chairman also to
be considered.
Stakeholders engagement
Relationships and visibility with shareholders and proxy advisors to be
developed from a corporate governance perspective, particularly in respect
of remuneration.
Competitor performance
Board to regularly review external data on the performance of competitors to
supplement actions already taken to provide increased visibility and assurance
regarding the market/industry.
Investment review
Progress with the periodic review of investment decisions to be maintained,
focusing on investments made since January 2017.
Technology as a determinant of future strategy
Board to give focus to emerging areas, such as the development of a digital
offering as an integral part of determining future strategy.
Integration and delivery of synergies
Board to monitor the integration process and progress with the delivery of
synergies at each meeting.
1
2
3
4
5
6
2020 saw a leap in capability with regard
to technology, with the advent of a new
digital platform providing the ability to
reserve a home with six clicks on a device,
which was successfully introduced during
the pandemic and is already informing
strategy discussions. The Board continues
to monitor and review the integration
process and to complete periodic
review of investment decisions.
Following the Board’s discussion, and in
consideration of the recommendations
made by IBE, the Board agreed an action
plan for 2021 which will be used as the
basis for the next internal review of 2021.
It also considered progress against the
action plan of 2020.
Good progress has been made against
the 2020 Action Plan. Elements of
stakeholder engagement received
very positive feedback during the 2020
external review (notably customers
and employees) and the Board has
focused on maintaining communication
with proxy advisors and shareholders
with respect to remuneration. It reviews
market data with regard to customer
service and as part of its strategy
and ESG planning discussions.
The Board carried out an internal formal
evaluation of its 2019 performance at the
beginning of 2020 using a questionnaire
designed to assess the performance
of the Board during the year, capture
feedback on implementation of the
2018 evaluation action plan, and to look
forward to areas for development and
action in 2020, recognising the challenges,
risks and opportunities ahead as an
enlarged Group. An action plan was
put in place and specified actions were
completed during the year, recognising
that succession planning remains an
ongoing topic requiring the Board’s
attention, particularly in respect of CEO
and Board succession.
Following the internal review of 2019,
the Board carried out an external review
for 2020 and appointed Lisa Thomas
of Independent Board Evaluation (IBE).
Lisa conducted the external review in 2017.
She does not have any connection with
the Board or the Company. The review
was conducted according to the guidance
in the UK Corporate Governance Code.
A comprehensive brief was given to IBE by
the Company Secretary and Chairman, in
November 2020.
IBE observed main Board and Committee
meetings in December 2020 and January
2021, and support materials for briefing
purposes were provided by the Company.
In December, detailed interviews were
conducted with every Board member.
In addition, IBE interviewed members
of the senior management team, the
auditors and the remuneration advisors.
Conclusions were discussed with the
Chairman and subsequently discussed
with the whole Board at its meeting
on 23 February 2021 with IBE present.
The conclusions of that discussion are
recorded in the minutes of the meeting.
IBE gave feedback to Committee chairs
on the performance of each Committee
and discussed the Board’s feedback on the
Chairman with the SID. In addition, the
Chairman received a report with feedback
on individual director performance as an
input to the regular annual performance
review process and development plans the
Chairman undertakes with the Board.
96 | Our governance
2021 action plan
Succession planning
1
2
3
4
Further development of the work carried out in 2020 to progress succession
planning for the senior team and the executive directors, taking into account
the future strategy of the Vistry Group post integration. The skill set required
for optimal Board composition will also be considered on a more-long term
basis and will take into account the need to achieve a better balance of
gender and ethnicity on the Board which may result in a change in size.
Further planning discussions will take place for the succession of the Chairman.
Nomination Committee
In addition to the above, the Nomination Committee will deep dive on diversity
in the business, to progress the executives’ work on developing a diverse
pipeline of talent in the team and to understand progress across different parts
of the Group, given the different profiles of Partnerships and Housebuilding,
with the aim of achieving consistent results across both, and to support the
work of the D&I Group. The Nomination Committee will also discuss whether
additional education beyond that already in place is needed for Board members
on various topics that the Board needs to consider, and how best to engage
with those whilst visits remain out of bounds.
Board meetings
Whilst Board meetings remain virtual and the Board cannot visit sites nor meet
with each other, the Board will ensure a return to and sufficient opportunity for
informal time/discussions and private sessions to maintain Boardroom culture
and deep challenge. Using regular update calls as necessary with the CEO
outside of the Board meeting schedule to stay connected will facilitate
this also. Once Board life returns to normal, the Board plans to return to
the use of private sessions and informal time around the Board meetings
more regularly. It will also return to and make greater use of splitting its all-
day Board and Committee meetings over two days to give more time for the
agenda of the larger Group.
ESG/Strategy
The Board will be focusing on development of the ESG strategy throughout
2021, to build on the work that has commenced in 2020 on Environmental
reporting and the Social agenda and what these mean for Vistry as an
integrated Group. This will include a more thematic approach to some topics
in the Boardroom, allowing the Board to oversee a strategic approach to our
people, and strengthening the Board’s governance of the culture of the Group,
as the integration progresses. These discussions will be supported by more
non-financial data in the boardroom.
Our governance
More broadly, feedback from the process
confirmed that many areas of Board
responsibility have been well handled
through 2020, with an appropriate
balance of agenda items through
the Covid pandemic. Several areas of
strength were identified in the feedback
and included oversight of governance
and compliance in the business, risk,
Boardroom culture and strategy.
Feedback confirmed that a transparent
executive and a supportive Board
have worked together well through a
challenging year. The Board has reached
consensus on complex decisions and
shown adaptability in a year which was
in no way business as usual.
The pandemic has affected the Board’s
work, making board meetings more
transactional and removing the
opportunity to visit sites and meet staff.
Nonetheless relations between the Board
and senior management remain open and
positive, and the Board is looking forward
to resuming its visits to the operations,
especially in the Partnerships business,
which is relatively new to the Group.
The key areas for the Board to focus on in
2021 are detailed in the 2021 action plan.
Feedback on the Chairman was presented
to him by the SID, following consultation
with NED colleagues. Having steered the
Board well through its agenda in 2020,
he has kept in touch with members of
management and been in close contact
with the executive, as was demanded by
the pandemic. He runs meetings well,
asks good questions on the Board and
at Committees. During 2021, one of the
key areas of focus for him will be the
Nomination Committee agenda and
Board composition.
Details of the Committee reviews are
included in the Committee reports.
Vistry Group PLC | vistrygroup.co.uk | 97
Corporate governance report
The control framework is subject to
Board review. The Group has a defined
set of delegated authorities, procedures
and controls across the range of its
activities, which have been documented
and are available to all staff via the
Group’s intranet, including the authorities
and decision making delegated by the
Board to management in respect of the
operational control of the Group.
They are regularly and formally
assessed both by internal and external
audit, in addition to being subject to
a quarterly self-assessment process
established in 2017. These delegated
authorities were reviewed early in 2020
and at later points in the year to ensure
that the appropriate controls are in place
for the enlarged Group.
The Group’s leadership structure provides
the framework for governance control,
reporting and risk management and is set
out on page 90.
The advice and services of the Group
Company Secretary are available to
the directors. All directors have access to
the Company’s professional advisers and
can seek independent professional advice
at the Company’s expense. There was no
advice sought during the year.
Training is made available to directors
at induction and as required to develop
and maintain knowledge. The Chairman
is responsible for ensuring that directors
continually update and refresh their
knowledge and skills appropriate to their
role on the Board and Board Committees.
Directors are also required to maintain
their awareness of the culture and
operations of the Group. During 2020,
the directors received regular updates on
regulatory developments.
The Company has an insurance policy
in place which insures directors against
certain liabilities, including legal costs.
Matters reserved for the Board include
the overall leadership of the Group,
setting the Group’s values and standards,
approval of strategy and budgets,
oversight of operations and performance,
structure and capital, financial reporting,
internal controls, corporate governance,
delegation of authority, and approval of
major expenditure and transactions.
The Board has approved a written
division of responsibilities between
the non-executive Chairman and the
Chief Executive and the role of the
Senior Independent Director has been
similarly defined.
The Chairman
is primarily responsible for:
• the effective working of the Board,
• taking a leading role in determining
the Board’s composition and
structure, and
• ensuring that effective
communications are maintained
with shareholders.
The Chief Executive
is responsible for:
• the operational management
of the Group,
• developing strategic operating
plans and presenting them to the
Board, and
• the implementation of strategy
agreed by the Board.
The Senior
Independent Director:
• supports the Chairman in
ensuring that the Board is effective
and constructive relations are
maintained,
• leads the annual performance
evaluation of the Chairman, and
• provides an additional point of
contact for shareholders.
Board committees
The Board is supported by standing Audit,
Nomination and Remuneration Committees.
Membership, roles and activities are
set out in separate reports. The Audit
Committee report is on pages 124 to 127,
the Nomination Committee report is on
pages 128 to 130, and the Remuneration
Committee report is on pages 104 to 122.
Each Committee reports to and has terms
of reference approved by the Board and
the minutes of Committee meetings are
circulated to the Board.
The Audit Committee is chaired by
Ralph Findlay, the Remuneration
Committee is chaired by Nigel Keen,
and the Nomination Committee is
chaired by Ian Tyler.
The external formal Board evaluation
included performance evaluations of the
Committees and all were identified as
having areas where performance could
be improved. Further detail is given in the
individual Committee reports.
Governance as a business enabler
The Board aims to meet governance
best practice taking account of the
business model, organisation structure,
processes and internal controls that are
right for the Group. The Group’s approach
to governance best practice is set out
below and designed to enable and
support the sustainable long-term
success of the business.
The Group currently complies with
and applies the provisions of the UK
Corporate Governance Code 2018 and has
continued to develop measures to enable
greater engagement with the workforce,
strengthening the role of the Nomination
Committee, and widening the role of the
Remuneration Committee.
Information on share capital
is provided on pages
133 to 134
98 | Our governance
Title Our governance
Shareholder engagement
The Company has a regular
comprehensive investor relations
programme, which allows our major
shareholders to engage with the Chief
Executive and Chief Financial Officer at
various points in the year.
In addition to one-to-one meetings
through the year, the Company
holds a series of presentations and
meetings following the announcement of
the final and half-yearly results.
These presentations are made publicly
available so that all shareholders can
access them on the Group’s website at
vistrygroup.co.uk/investors/corporate-
governance. In 2020, the presentations
relating to the final results proceeded in
the normal way, whereas those for the
half-yearly results were delivered on-line,
with analysts and investors able to join
and ask questions.
An increased level of shareholders
engagement was seen in connection with
the pandemic, with the Chairman and
CEO seeking views on various aspects and
receiving strong expressions of support
for the actions being taken. The feedback
received was extremely helpful, providing
a strong basis for the re-opening of
sites at the end of April 2020 and
subsequent actions.
Engagement took place with shareholders
and proxy advisors prior to the Annual
General Meeting held on 20 May 2020
and prior to the General Meeting held
on 14 July 2020. Following the vote on
the Remuneration Report at the AGM,
engagement continued with the
objective of understanding shareholders’
concerns and communicating the
Company’s position in relation to the
necessity of the salary increase for the
Chief Financial Officer.
The Board reviews feedback from
investor relations meetings, visits and
presentations, including commentary
on the matters discussed. The overall
feedback received during 2020 continued
to be extremely helpful to the Board,
particularly regarding the strategic
direction of the Group, the Group’s
approach to sustainability and the actions
taken in response to the pandemic.
The Vistry Partnerships presentation,
designed to provide clarity on the
business model, customer base, and
strategic objectives, was extremely well
received and the feedback positive.
The Board also values other channels
to obtain shareholders’ views.
The Chairman is responsible for ensuring
that all directors are aware of any issues
or concerns raised by major shareholders.
In addition, the Senior Independent
Director is accessible to shareholders.
All shareholders are invited to attend
the Company’s AGM, which this year will
be held on 17 May 2021 via a webcast.
Subject to Government guidance
relating to the pandemic, the full Board,
including all Committee Chairmen, attend
and value this meeting as a means of
communicating with private investors,
encouraging their participation.
All shareholders have the opportunity
to exercise their right to vote and can
appoint proxies. To increase ease of voting
an electronic voting facility is provided.
Shareholders attending the AGM, again
subject to Government guidance, have the
opportunity to ask questions relevant to
the business of the meeting and hear the
views of other shareholders before casting
their vote. After the meeting the results of
voting on all resolutions are published on
the Group’s website.
Vistry Group PLC | vistrygroup.co.uk | 99
Corporate governance report
The Oak | 5 bedroom home
The Pavillions, Kenilworth
Risk management and
internal control
The Board has responsibility for
maintaining and monitoring sound
risk management and internal
control systems.
The Board’s role includes responsibility
for the risk appetite and the
identification, management and
mitigation of risk, including emerging
risk. Risk is a regular discussion item,
which allows the directors to review
the risk appetite and principal and
emerging risks and assess the quality
of risk identification, risk management
processes, and risk mitigation.
Risk is a theme that runs naturally
through Board discussions on a range
of topics and adopting this approach
ensures that risk identification and
consideration of emerging risk feature
regularly in the Board’s deliberations.
In setting its approach to risk, the
Board aims to ensure that the
Company is neither prevented from
taking opportunities nor exposed to
unreasonable risk.
100 | Our governance
Monitoring and review forms part
of the work undertaken by the Audit
Committee and is based principally on
the review and interrogation of reports
from the Internal Audit function and
from management. It covers all material
controls, including financial, operational
and compliance controls and compliance
with risk management processes.
In addition, the Risk Oversight Committee
(previously the Risk Governance
Committee) has representation from
the business units to support the
monitoring of principal risks and the
effectiveness of controls and mitigation,
alongside the identification of emerging
risk across the Group.
Since integration we have widened
our assurance processes so they are
appropriate for the enlarged Group.
Our Risk Oversight Committee has
representatives from all aspects of our
business, and the principal risks and
supporting risk registers include all
threats from across both Housebuilding
and Partnerships, alongside all their
respective brands and operations.
Our internal audit plan reaches across
all 23 business units and our self-
assessment controls that test compliance
have been aligned so that all these
entities follow the same mandatory
standards, procedures and policies.
In reviewing the effectiveness of the
Company’s system of internal control and
risk management systems during 2020,
the Board (i) considered the risk appetite
and (ii) reviewed changes in the nature,
likelihood and impact of emerging and
principal risks, their mitigation, the
controls placed against them and the
Company’s ability to respond to changes
and (iii) received reports from the
Audit Committee on the operation and
effectiveness of the risk management
and internal controls systems and
their integration with strategy and the
business model.
The Board also reviewed the minutes
of Audit Committee meetings and
the minutes of Risk Oversight
Committee meetings.
Recommendations for improvements to
internal controls were made during the
year and corrective action was taken, but
they did not represent significant control
failings or weaknesses.
Title Our governance
A self-assessment process supports
our internal control framework,
where all directors across the Group
report business unit performance in
control adherence.
The Board has complied with provision
28 of the Code by completing a robust
assessment of the emerging and principal
risks facing the Company.
It has established a continuous process
for identifying emerging risk and
evaluating and managing the principal
risks, in accordance with the FRC’s
“Guidance on Risk Management,
Internal Control and Related Financial
and Business Reporting”.
This process has been in place for the
period under review and up to the date
of approval of the Annual Report and
Accounts and includes compliance with
provision 29.
It is designed to manage rather than
eliminate risk and can only provide
reasonable and not absolute assurance
against material misstatement or loss.
Control framework
The Company maintains a comprehensive
control framework, which is regularly
reviewed by the Board.
The principal elements of the control
environment include regular board
meetings, the Division and business
unit structure, defined operating
controls and delegated authorisation
limits, the Internal Audit function,
the Risk Oversight Committee,
and a comprehensive financial
reporting system.
There are a number of elements of the
Company’s internal control and risk
management systems that are specifically
related to the Company’s financial
reporting process:
• there is a well understood
management structure which
allows for clear accountability and
an appropriately granular level of
financial control.
• supported by a dedicated Head of
Tax, we monitor our compliance
with UK taxation laws and standards
and ensure we follow the strictest
adherence through robust processes
and controls.
• the structure is underpinned by
documented delegated authority levels
for business transactions, for which
limits and approvals are automated
within our ERP system.
• the process is supported by process
documents and systems for both
internal management reporting and
external reporting which stipulates,
amongst other things, reporting
timetables and the contents of key
management reports.
• best practice processes and
procedures are mapped for all core
and support activities.
• a quarterly self-assessment for all
director level employees operates
to confirm adherence to mandatory
controls and non-conformities are
reported to the ELT for discussion
and remediation.
• Internal Audit plays a key role in
monitoring the control environment
and in identifying and supporting the
mitigation of threats to the business.
• Reviewed the controls that
support our commercial and cost
valuation processes. This included
a deep-dive on our more complex
multi-phase sites that account for an
increasing proportion of our overall
activity across the Group.
During 2020 we reviewed our
approach to commercial life of site
controls, in particular those with
added complexity of large multi-
phase operations. A formal audit
report was produced which is leading
to improvements in terms of system,
control and reporting. During 2021
we will also undertake dedicated
commercial auditing across our group
to ensure commercial controls are
being complied to.
The Company operates software systems
that record financial transactions and
whose effectiveness is reviewed by the
Internal Audit function on a regular basis.
Findings arising from these exercises
are reported to the Audit Committee
and action is taken, as appropriate.
Control over cash expenditure is a
key component of the financial
control framework.
The Company maintains tight control
in this area through a centralised
treasury function, business unit
payment functions, three-way
matching of payments, authorisation
documentation, and the segregation of
authorisation accountability.
The Company maintains a regular weekly
and monthly financial reporting cycle
and an alternate monthly cost valuation
process, allowing management to assess
financial progress against objectives.
Reporting is supported by a formal
budget and monthly rolling forecasting
which ensures that there is a recent
financial forecast in place at all times
against which to assess performance.
Together with this financial reporting,
Division and business unit management
teams report key business issues
promptly and as part of a standard
monthly regional operational
reporting pack.
Finally, there is a process of accounts
preparation, which ensures that there
is an audit trail between the output
from the Company’s financial reporting
systems and the preparation of the
financial statements.
Vistry Group PLC | vistrygroup.co.uk | 101
Incentive schemes
are closely aligned
to the execution
of our strategy
102 | Our governance
Our governance
The Oak | 5 bedroom home
Kingsmere, Bicester
Vistry Group PLC | vistrygroup.co.uk | 103
Directors’ remuneration report
On behalf of the Board, I am pleased to present the Directors’
Remuneration Report for the financial year ended 31 December
2020. It provides details on the link between remuneration and
the Company’s performance, how directors were paid in 2020,
and how we propose to pay directors in 2021. The Report is
subject to an advisory shareholder vote at the 2021 AGM.
Nigel Keen | Chairman of the Remuneration Committee
• Sustained step-up in demand, with
the H2 2020 weekly private sales
rate per outlet up 15% to 0.62, firm
pricing, with a 0.5% to 1.0% price
increase, and a resilient supply chain
with low-cost inflation.
• On track to deliver full synergy run
rate of £44m by end of FY21, 26%
ahead of initial target and at a lower
than expected cost.
• Financial performance
Given the significant impact of the
pandemic on our operations including
the decommissioning of our sites which
commenced on 24 March 2020, we
are enormously proud of the positive
performance of the Group through 2020
and our ability to deliver financial results
which were ahead of expectations.
Our key financial highlights include:
• Strong second half performance with full
year profit before tax (pre-exceptionals
and amortisation of acquired intangibles)
of £143.9m.
• Significant deleverage resulting in £38m
year-end net cash position.
• Revenue and margin growth in
Partnership business despite impact of
Covid-19.
Stakeholder experience
• Our shareholders
The Board recognise the difficult shareholder
experience over the course of 2020 with
our announcement in March 2020 of the
implementation of our cash-saving measures
and decision to suspend the FY19 dividend.
We are also aware of the fall in the Group’s
share price as a result of the impact of
Covid-19; a decline that was also experienced
more generally across the UK housebuilding
sector. However we were delighted that we
were able to return value to shareholders in
July 2020 by way of a bonus issue and were
pleased that we are able to propose a final
FY20 dividend of 20 pence.
• Our employees
Whilst ensuring the safety, health and
wellbeing of our employees remained our
number one priority throughout 2020, we
were happy to be able to support them
financially too:
• All Board, ELT members and highest paid
senior management agreed to voluntary
temporary pay cuts of 20% of basic annual
salary with effect from 1 April 2020, which
was followed with voluntary pay cuts for
our people earning over £20k per annum
with effect from 1 June 2020. However,
following the positive performance of
the Group, it was agreed to return all
employees to full pay with effect from
1 August 2020 and we refunded all salary
and fee reductions to all employees, the
executive and the non-executive directors
in December 2020.
• To reward the outstanding efforts of staff
during a challenging year, there was a
discretionary general employee bonus
of 1.5% against a maximum 7.5% paid
in December 2020, and the payment of
bonuses (at 20% of max) for business unit
MDs, directors and CST Heads.
• For 2021, staff earning £20k or below will
receive a flat £250 salary increase, with
a further review to take place with effect
from 1 April 2021. As mentioned below, it
is also intended to pay an additional bonus
to lower earning staff at the end of 2021
equivalent to the reduction in value of LTIP
awards to be granted in 2021.
• We are also delighted to report that an
engagement score of 7.6 (against an
industry benchmark of 7.2) was achieved
in August 2020 through our Peakon
employee survey, with a participation rate
of 70% with a further improvement
in January 2021 with a score of 7.9
(against a benchmark of 7.4), with a
participation rate of 81%.
The Remuneration Policy table is
set out on pages 120 to 122.
The Remuneration Policy, which
was approved at a General
Meeting in December 2019, can
be found on the Company’s
website in its entirety.
Remuneration in context
2020 was an unprecedented year;
as the first full year for the enlarged
Group and with the impact of Covid-19
on our operations, the management
team showed outstanding leadership,
agility and innovation in balancing the
interests of all stakeholders in a rapidly
changing environment.
In determining the executive
directors’ remuneration outcomes
for the financial year, the Committee
maintained a clear and rigorous focus
on aligning pay with performance but
was equally focused on taking into
consideration the experience of all our
key stakeholders.
We have outlined below the key
drivers of our decisions in the context
of a very challenging year:
Corporate performance
• Strategic priorities
Throughout 2020 we have made
significant strategic progress in
integrating the enlarged Group despite
the impact of Covid-19. Key strategic
achievements include:
• Quality and customer satisfaction
further improved, with the
expectation of being awarded the
maximum 5-Star HBF Customer
Satisfaction Rating for 2020.
104 | Our governance
• Government support
Whilst we were deeply appreciative to be able
to make use of the Government’s Job Retention
Scheme when, as an immediate response to the
crisis, the decision was made to furlough 56%
of our people on full pay, we were delighted to
be able to repay all furlough amounts received
from the Government, totalling £7.1 million on
4 December 2020. We have not accessed
any other Government funding.
2020 remuneration
Taking the context set out above into account,
the Committee made the following decisions in
respect of remuneration in 2020:
Bonus
The 2020 Bonus Scheme set for executive
directors in respect of performance in 2020
was based on achievement of stretching targets
against three metrics of EBIT (55%), Period-End
Capital Employed (25%) and Synergies (20%)
together with a Customer Service underpin.
Results in respect of both financial metrics were
ahead of expectations but below target given
the mixed economic and market headwinds.
However, both the Customer Satisfaction
underpin and the Synergies targets were met.
• Customer Satisfaction (HBF Survey Score)
for completions between 1 October 2019 and
30 September 2020 was at the 5-Star level
compared with Threshold performance of at
least 4-Star.
• Total synergies from overheads and supply
chain cost reductions of £25m were
delivered in 2020 as compared to the Target
performance level of £12m.
The formulaic outcome given the above
performance was 20% of maximum for the
executive directors.
The Committee has not adjusted this outcome.
Given this is the first full year of the combined
Group, the Committee determined that
the strategic importance of performance
against the Synergies targets merited such
a payment. Moreover, the Committee is
comfortable that this outcome is both fair
and appropriate given the wider stakeholder
experience outlined above. However, being
mindful that this performance has not
yet been fully reflected in the share price,
the Executive Directors proposed to the
Committee that they should defer the full
amount of their bonuses for this year into
shares (above the prior requirement to defer
one third of bonus paid). The Committee was
pleased to accept the proposal and believes
this will further strengthen alignment
with shareholders.
Long-term incentives
The 2018 LTIP award was subject to Customer
Satisfaction (25%), TSR (25%), EPS (25%) and
ROCE (25%) targets measured over three
financial years.
Only the Customer Satisfaction targets were
met over the period resulting in a formulaic
vesting of 25% of maximum.
The Committee has not adjusted this
outcome. Given the context set out above,
the Committee concluded that the above
outcome was a fair reflection of both corporate
performance and stakeholder experience over
the period and did not consider it necessary
to exercise discretion to adjust the formulaic
vesting level.
Full details on the targets set and performance
against them can be found on page 109 in
respect of the 2020 Bonus Scheme and page
111 for the 2018 LTIP award.
2021 remuneration
Again, being mindful of the challenging
environment and the stakeholder experience
set out above, the Committee has made
the following decisions in respect of the
implementation of the policy for 2021:
Base pay
The Remuneration Committee determined not
to review executive salary levels as at 1 January
2021 (the practice in prior years). Consistent
with the approach for employees generally, the
Committee may consider a review in April 2021.
If any adjustments are considered appropriate
at that time, it is intended that they will be
no more than applicable for the wider
employee population. The Chairman and non-
executive director fees were also not increased
for 2021 in line with the above approach.
Pension
During the year the Committee agreed a
gradual phasing down of executive director
pensions to the 7% workforce level by
January 2023. The approach agreed requires
that pension benefits be frozen at 1 January
2020 levels and then reduced in steps
downwards in 2021 and 2022, until being
reduced to the rate applicable to the wider
workforce from 1 January 2023.
Bonus
The Committee has decided to operate a
simplified Bonus Scheme for 2021 and to
remove the prior focus on synergy targets
that were required for the first full year of
the combined Group. Instead, the weighting
of both the Profit and Capital Employed metrics
has been increased. As such, the
2021 Bonus Scheme will be based on Profit,
Capital Employed, and Customer Satisfaction.
Further detail can be found on page 115 to 116.
The Committee is mindful of the increasing
investor focus on ESG related metrics and
acknowledge that these metrics support
the Group’s sustainability strategy, which
is being embedded across its operations.
The Committee will review the possible
incorporation of meaningful and measurable
sustainability related metrics during 2021.
Our governance
LTIP
For the 2021 LTIP, in line with the previous
year, the vesting criteria will be based on
TSR (33%), ROCE (33%), and EPS (33%).
The targets for these awards can be found
on page 117. Whilst the target relating to
EPS is lower than the 2020 LTIP scheme,
the Committee is comfortable that it
continues to be stretching in the current
challenging environment.
Both the Executive Directors and the
Committee were mindful of the fall in the
Group’s share price over past year as a result
of the impact of the Covid-19 pandemic. As a
consequence, the Committee has determined
that a 10% reduction in the face value of LTIP
awards to Executive Directors should be applied
in 2021. The level of award to the Executive
Directors will therefore be 180% of salary
instead of 200%.
At the request of the Executive Directors, the
Committee intends to make a cash bonus
payment equal to 10% of the Executive
Directors’ normal LTIP opportunity valued
at the share price on the day of grant to the
lowest paid employees of the Group at the
end of 2021 to recognise their significant
contribution and commitment to the business
in the most difficult period.
Shareholder engagement
Following the 2020 AGM, I reached out to
our principle shareholders to understand
the reasons for their opposition to the
remuneration report. Whilst the majority of
those I spoke to were generally supportive of
our current approach, it was clear that many
were concerned about the increase in the
CFO’s base salary from 1 January 2020. The
Remuneration Committee acknowledges this
and wishes to take the opportunity to highlight
that the repositioning of CFO pay was a one-
off adjustment to bring the level into line with
market and to emphasise that we do not expect
to make material changes to executive director
salary levels in the short to medium term
future. The Committee is wholly committed to
ongoing engagement with our shareholders
and we will continue in our dialogue with
shareholders to throughout the year.
I hope you find that this report clearly explains
the remuneration approach we have taken and
how we will implement the Policy in 2021. I
look forward to your support at the 2021 AGM
in respect of this report.
Sincerely,
Nigel Keen
Chair of the Remuneration Committee
Vistry Group PLC | vistrygroup.co.uk | 105
Remuneration report
Introduction
This annual remuneration report explains how the remuneration policy has been implemented in the year ended 31 December 2020 and
how it will be implemented for 2021. Details of remuneration in 2020 are set out first, followed by the approach for 2021.
At a glance summary
Component and where to find
Greg Fitzgerald - CEO
Graham Prothero* - COO
Earl Sibley - CFO
Single figure totals for 2020 (page 108)
£1,342k
£695k
£673k
Annual bonus payments for 2020 (page 109)
30% of maximum
30% of maximum
30% of maximum
LTIP awards vesting in respect of 2020 (page 111)
25%
n/a
25%
LTIP awards granted in 2020 (page 110)
200% of basic salary
200% of basic salary
200% of basic salary
Salaries for 2021 (page 115)**
£696k (+0%)
£500k (+0%)
£395k (+0%)
Shareholding as % of salary (page 112) Guideline
in 2020: 200% of salary
697%
137%
39%
Changes to the Remuneration Policy for 2021
None
Annual bonus for 2021 (pages 115 and 116)
Bonus opportunity up to 150% of basic salary.
Profit before tax (pre-exceptionals and
amortisation): 60% weighting
Period end capital employed: 40% weighting
Profit before tax acts as a gateway to
earning bonus and customer satisfaction
acts as threshold
Profit remains the most important element in terms of performance.
The profit element of the bonus scheme will naturally incentivise the delivery
of improved margin and the synergies identified as part of the Acquisition.
Period end capital remains as a primary objective to have a robust balance
sheet with an appropriate level of gearing
A profit gateway to bonus has been introduced and the customer satisfaction
measure continues to act as a threshold, below which a stepped reduction in
total bonus earned
LTIP awards for 2021 (page 117)
180% of basic salary
180% of basic salary
180% of basic salary
TSR: 33.3% weighting
ROCE: 33.3% weighting
EPS: 33.3% weighting
TSR, EPS and ROCE remain equally weighted, each applying to one third
of awards.
*Graham Prothero, was appointed as Chief Operating Officer with effect from 3 January 2020.
** The salary review as at 1 January 2021 resulted in no increase. A further salary review is expected to take place in April 2021. Should there be any increase in the
basic salaries of the executive directors at that point, it will be no greater than that awarded to the general workforce.
106 | Our governance
Our governance
The link between remuneration and strategy
As set out in the Strategic Report, the enlarged Group has a clear set of strategic priorities designed to move the business forward,
allow it to compete effectively across the housing and regeneration markets as a top five housebuilder, and deliver the best
outcomes for our stakeholders, including enhancing shareholder value. These priorities include doing the right thing for our people,
our customers, our operations, our homes and communities and our shareholders. Significant progress has been made with the
integration during 2020, including delivery of synergies ahead of target. The integration process will be concluded during 2021,
as system, process, and benefits harmonisation is finalised. The result is a combined Housebuilding and Partnerships business with
complementary models and strengths, adding counter cyclical resilience. The Housebuilding business now has national scale and an
expanded geographic reach and the strategy is to increase output through controlled volume growth in the medium term, whilst
maintaining high quality delivery. The opportunities inherent in being a dual branded housebuilder are also being maximised, coupled
with a digital experience for our customers, ensuring we provide a quality product choice best suited to their needs. The Partnerships
business holds a strong and unique position within the partnerships market and a strategy to accelerate revenue growth through
increased output from the existing operating structure is being implemented, coupled with expansion into new geographies.
The enlarged Group’s land acquisition and strategic land capabilities are being leveraged and are already supporting the growth of
housebuilding and mixed tenure development and land-led revenues.
The Remuneration Policy, approved by shareholders in December 2019, was designed to ensure a strong link between remuneration,
the strategic priorities, and delivery of objectives. Incentive scheme targets are carefully considered by the Committee to ensure
they reward performance and are correctly calibrated. This includes the importance of driving behaviours that underpin the culture
of the business and support the sustainable success of the enlarged Group. Targets used in the Group’s incentive schemes are then
monitored and progress measured by reference to many of the Group’s reported KPIs, which include pre-tax profit, operating margin,
net cash, ROCE, earnings per share, private and affordable completions, the HBF Customer Satisfaction Score, plots added to the land
bank, and involuntary staff turnover. Although not included for 2021, with development of the Group’s new approach to sustainability
and Net-Zero Carbon ongoing, for 2022, appropriate consideration will be given to ESG factors in setting performance measures.
Annual bonus arrangements link to the Group’s near-term strategic priorities and, for 2020, the Committee selected period end
capital employed and synergy delivery measures to sit alongside the profit before tax and customer satisfaction performance
measures. Period end capital employed drives a disciplined balance sheet and supports the management of capital and an appropriate
level of gearing. Monitoring measures are in place to ensure that nothing beyond normal period end behaviours and actions occur
in arriving at the outcome. For 2021, the performance measures are replicated, with the exception of the synergy delivery measure,
which performed as hoped in 2020 in maximising acquisition benefits for shareholders on a full year basis and is removed.
The LTIP takes a longer-term perspective and for the 2020 awards focus continued on the financial and share price performance
measures of relative total shareholder return, earnings per share and ROCE, equally weighted, at one third of awards. The same
performance measures are expected for the 2021 awards. Although customer satisfaction was removed as an LTIP performance
measure in 2019, high levels of customer satisfaction will continue to be incentivised in 2020 via the near-term annual bonus
arrangements, as explained above.
Key remuneration decisions during 2020
During 2020, the Committee determined the performance measures and set targets for the 2020 annual bonus (shown on page 109)
and approved 2019 bonus payments. It also determined the performance measures and set targets for and approved LTIP awards
made in 2020 and confirmed the partial vesting of the 2017 LTIP awards. Malus and clawback provisions for incentive awards and a
two year post vesting holding period for LTIP awards continued to be applied in 2020.
As described in the introduction, during the year the Committee considered and monitored the impact of the Covid-19 pandemic.
In March, all executive directors, the remainder of the ELT and members of the wider senior leadership team, the Chairman and the
Non-Executive Directors volunteered a 20% reduction in base salary and fees, effective from 1 April 2020 and which ran until
1 August 2020. Having considered alignment with the experience of the Group’s wider stakeholders, including employees and
shareholders, given the strong second half performance delivered by the Group, all voluntary salary reductions were repaid in
December 2020.
Towards the end of the year, the Committee considered the structure for the 2021 annual bonus and completed the 2021
remuneration review, which included consideration of the economic environment, alignment with the experience of stakeholders,
the link between executive remuneration and pay, and employment conditions throughout the Group (including oversight of the
general proposals for staff for 2021). The conclusion of the review was that there would be no increase to basic annual salaries with
effect from 1 January 2021 and that a further review take place with effect from 1 April 2021. The Chairman’s fee was also reviewed
without increase.
Vistry Group PLC | vistrygroup.co.uk | 107
Remuneration report
Implementation of remuneration policy for the year ended 31 December 2020
Single figure of executive directors’ remuneration (audited)
Greg Fitzgerald
(appointed CEO 18 April 2017)
Graham Prothero
(appointed COO 3 January 2020)
Earl Sibley
(appointed GFD (now CFO) 16 April 2015)
2020
£000
696
31
-
139
866
209
(5) 267
476
1,342
2019
£000
680
16
-
136
832
680
(6) 663
1,343
2,175
2020
£000
500
10
-
35
545
150
-
150
695
2019
£000
-
-
-
-
-
-
-
-
-
2020
£000
395
20
-
59
474
118
(5) 81
199
673
2019
£000
335
11
20
30
396
335
(6) 292
627
1,023
Base salary
Benefits (1)
Pension (3)
Other – pension salary supplement (4)
Sub-total (fixed pay)
Annual bonus
Long Term Incentives (2)
Sub-total (variable pay)
Total remuneration
Notes:
(1)
(2)
(3)
Taxable benefits include medical insurance, provision of a leased vehicle, payment of car allowance and for 2019, a loan account balancing payment relating to
membership of the Bovis Homes Regulated Car Scheme, plus income tax and national insurance due on this payment.
The 2018 LTIP measured over the three-year period to 31 December 2020 vested to the extent of 25% on 5 March 2021. The share price on grant of this award
was £10.83 and at the end of the three-year performance period was £9.395.
For 2019, the single figure for Earl Sibley has been calculated as the employer’s cash contribution, 60% of which is taken as a pension salary supplement. Greg
Fitzgerald, Graham Prothero and Earl Sibley were not members of a pension scheme during 2020.
(4)
Greg Fitzgerald, Graham Prothero and Earl Sibley receive a non-bonusable and non-pensionable pension salary supplement.
(5)
(6)
This is an estimated value based on the average share price over the last quarter of 2020 of £7.0845 for the 2018 LTIP awards which vest on
5 March 2021.
This is the actual value derived under the 2017 LTIP calculated using the share price on the vesting date (600.0 pence on 25 September 2020) and includes
notional dividend shares. Last year’s report included an estimate based on the average share price over the last quarter of 2019 of £11.82125 as the award had
not vested at the date of the report.
Greg Fitzgerald is non-executive Chairman of Baker Estates Limited, for which his personal service company received a fee of £15,000
during the year, and non-executive Chairman of Ardent Hire Solutions Limited, for which his personal service company receives fees of
£110,000 per annum. Graham Prothero is a non-executive Director and Audit Committee Chair of Marshalls plc, for which he received
a fee of £55,422 during the year. He also received a bonus of £64,189 for the period July - December 2019 in respect of his prior
employment with Galliford Try Plc, together with an sundry underpayment reimbursed of £2,836. Earl Sibley does not currently hold
any external directorships.
The following table shows the remuneration for the non-executive directors who served during the 2020 financial year:
Non-executive directors
Ian Tyler
Chris Browne
Ralph Findlay
Katherine Innes Ker
Nigel Keen
Mike Stansfield
Total
108 | Our governance
Salary / fees £000
2020
190
54
74
54
64
54
2019
185
53
73
53
63
53
490
480
Our governance
Annual bonus payment in respect of 2020
The maximum opportunity for the Chief Executive, the Chief Operating Officer and Chief Financial Officer for the year ended 31 December
2020 was 150% of salary. Provisions that enable the recovery of sums paid (clawback) continue to apply, as set out in the policy table.
A breakdown of the performance against the measurement criteria is shown below. All targets were set in February 2020.
Measure
Financial measures (100%)
Profit before tax
(pre-exceptionals and amortisation)
Synergy delivery
Weighting
(as a % of maximum)
Threshold
On target
Stretch and
maximum
Outcome and
award achieved
(% of maximum)
55%
20%
0% of
maximum
£333.3m
0% of
maximum
£10m
60% of
maximum
£343.3m
100% of
maximum
£360m
£143.9m (0%)
£25m (100%)
50% of
maximum
£12m
£14m
(90%)of
maximum
£16m
(100%)
Period end capital employed
25%
Threshold 0%: 2.5% below Budget
Below Budget
On target: In line with Budget
(0%)
Maximum100%: 2.5% above Budget
Non-financial measures (0%)
Customer Satisfaction (HBF Survey Score)
(completions between 1 October 2019 and
30 September 2020 to reach at least 70%
before any measure can pay out)
Total bonus (% salary)
Acts as threshold
n/a
n/a
n/a
Threshold met
(HBF survey
score: 5-Star)
20%
Executive director
Greg Fitzgerald
Graham Prothero
Earl Sibley
Maximum bonus
% of salary
Target bonus
% of salary
Actual bonus
% of salary
Total 2020
bonus £000
150%
150%
150%
75%
75%
75%
30%
30%
30%
209
150
118
In determining the executive directors’ 2020 annual bonus outcome, the Committee maintained a clear and rigorous focus on aligning
pay with performance, coupled with consideration of the experience of all our stakeholders during 2020. Performance was considered
against the background context of the Acquisition, the integration process, and the need to manage the impacts of the pandemic and
balance the interests of all stakeholders in a rapidly changing environment. The Committee looked at the measures taken during the
year affecting our people and their feedback, the experience of shareholders given the fall in the share price and the decision to suspend
dividends, and the experience of our supply chain and customers. Stretching targets were set in February 2020, before the first National
lockdown and the decision to close our developments sites, against three metrics of profit before tax, period end capital employed, and
synergy delivery, with a customer satisfaction underpin. The results for profit before tax and period end capital employed financial metrics
were ahead of expectations, but below target as a result of the impacts of the pandemic and the need to close our development sites for
five weeks. The customer satisfaction underpin, requiring an HBF survey score of 4-Star (80% to 89%) was met for completions between
1 October 2019 and 30 September 2020 with actual performance maintained at 5-Star (91.5%). The synergy delivery target was also
met, with total synergies from overhead and supply chain cost reductions of £25 million being delivered in 2020, compared to target
performance of £12 million and maximum performance of £16 million. The formulaic outcome for the executive directors was, therefore,
20% of a maximum bonus opportunity of 150% of basic annual salary and the Committee has not adjusted this outcome. The Committee
determined that the strategic importance of performance against the synergy delivery target in the first full year of the enlarged Group
merited such a payment and is satisfied that it is both fair and appropriate given the wider stakeholder experience. However, being
mindful that this performance has not yet been fully reflected in the share price, the Executive Directors proposed to the Committee that
they should defer the full amount of their bonuses for this year into shares (above the prior requirement to defer one third of bonus paid).
The Committee was pleased to accept the proposal and believes this will further strengthen alignment with shareholders.
Vistry Group PLC | vistrygroup.co.uk | 109
Remuneration report
Vistry Group Long Term Incentive Plan
Long term incentive awards are made in the form of performance shares or nil-cost options under the Vistry Group Long Term
Incentive Plan, which was approved by shareholders at the General Meeting held on 2 December 2019. All awards prior to 2020 were
granted under the rules approved at the 2010 Annual General Meeting. Each award is made subject to the achievement of performance
criteria as explained below and will ordinarily vest after three years. A two-year holding period following vesting was introduced for
2017 awards onwards, which provides a period of five years between the time awards being granted and when they can be exercised.
Provisions that enable the withholding of payment or the recovery of sums paid (malus and clawback) were further strengthened with
the adoption of the LTIP rules.
Discretions available to the Committee contained in the LTIP rules are set out in the policy table on page 121 and also in the exit
payments policy in the full Remuneration Policy, available on our website: vistrygroup.co.uk/investors/corporate-governance.
Awards granted during 2020 (audited)
For the 2020 awards, the Committee continued to utilise financial and share price performance measures, with relative total
shareholder return, earnings per share and ROCE, equally weighted at one third of awards.
An award of 108,923 shares was made to Greg Fitzgerald at 200% of basic salary on 2 March 2020, calculated based on a share price
of £12.79 on 28 February 2020. The award is subject to a three-year performance period ending on 31 December 2022 and exercisable
in 2025, following a two-year holding period, as follows:
Executive director
Greg Fitzgerald
Type of award
Number
of shares
awarded
Performance share award
108,923
Face value
of award
£000
1,393
% of face value
that would vest
at threshold
25.0*
An award of 78,186 shares was made to Graham Prothero at 200% of basic salary on 2 March 2020, calculated based on a share price
of £12.79 on 28 February 2020. The award is subject to a three-year performance period ending on 31 December 2022 and exercisable
in 2025, following a two-year holding period, as follows:
Executive director
Graham Prothero
Type of award
Performance share award
Number
of shares
awarded
78,186
Face value
of award
£000
1,000
% of face value
that would vest
at threshold
25.0*
An award of 61,767 shares was made to Earl Sibley at 200% of basic salary on 2 March 2020, calculated based on a share price of
£12.79 on 28 February 2020. The award is subject to a three-year performance period ending on 31 December 2022 and exercisable in
2025, following a two-year holding period, as follows:
Executive director
Earl Sibley
Type of award
Performance share award
Number
of shares
awarded
61,767
Face value
of award
£000
% of face value
that would vest
at threshold
790
25.0*
* Threshold vesting for the proportion of the awards measured against each of the EPS, TSR and ROCE performance conditions was set at 8.3% of the maximum for
each measure or 25.0% of the shares in the total award.
The performance measures for all 2020 awards are TSR (33.3%), EPS (33.3%) and ROCE (33.3%). Achieving threshold performance for the
financial and share price performance measures would result in 25.0% of the total award vesting.
The performance targets are:
• TSR – threshold performance equal to the annualised median of the index (as set out below) and maximum performance equal to
the annualised upper quartile of the index, using a relative ranking approach.
• EPS – threshold performance at cumulative EPS of 395 pence and maximum performance at cumulative EPS of 446 pence.
• ROCE – threshold performance at 20.8% and maximum performance at 22.6%, both as measured in the third year of the
performance period (2021).
The 2020 constituents of the TSR index, which may be subject to change, are as listed below:
TSR comparator group
Barratt Developments plc
Bellway plc
The Berkeley Group plc
Countryside Properties PLC
Crest Nicholson Holdings plc
Persimmon plc
Redrow plc
Taylor Wimpey plc
110 | Our governance
Our governance
Awards vesting in respect of 2020
The LTIP awards made in 2018 were measured over the three-year period to 31 December 2020 and will vest to the extent of 25.0% on
5 March 2021.
One quarter of the award was measured against Customer Satisfaction, with the remainder measured using EPS performance (25%),
TSR performance against an index of the UK’s leading housebuilders (25%), and ROCE performance (25%).
The Customer Satisfaction performance measure (using the HBF Customer Satisfaction Rating for the period October 2019 to
September 2020) required the achievement of at least 4-Star status (80% to 89.9%). The Group is expected to achieve 5-Star status
for the period and 100% of this element of the award will vest.
The threshold EPS target was 300p and the maximum target was 343p measured on a cumulative three-year basis. Absolute cumulative
EPS over the three-year performance period was 266.3p and this element of the award will lapse.
The threshold TSR target was performance equal to the annualised median of the index and the maximum target was performance equal
to the annualised median of the index, plus 7.5%. Actual TSR was -7.2% compared to an index median of -0.4% and this element of the
award will lapse.
The threshold ROCE target was 21.8% and the maximum target was 25% measured in the third year of the performance period (2020).
Actual ROCE in 2020 was 14.1% and this element of the award will also lapse.
Historical LTIP awards
The table below summarises the historical long-term incentive awards made to the executive directors.
Award size (% salary)
Performance criteria
Year of grant
Performance period
(CEO)
(COO)
(CFO)
Customer
Satisfaction
TSR
EPS
ROCE
Percentage of
award vesting
2017
2017
2018
2019
01/01/2017 – 31/12/2019
*200%
04/04/2017 – 31/12/2018
**100%
01/01/2018 – 31/12/2020
†200%
01/01/2019 – 31/12/2021
150%
-
-
-
-
2020
01/01/2020 – 31/12/2022
200%
200%
200%
125%
33.3%
22.2%
22.2%
22.2%
81.6%
-
-
100%
-
-
100%
125%
25%
25%
25%
25%
25%
125%
-
-
33.3%
33.3%
33.3%
Ongoing
33.3%
33.3%
33.3%
Ongoing
* As explained in the 2017 Directors’ Remuneration Report, this level of award was granted on an exceptional basis.
** G P Fitzgerald’s Recruitment Award which vested with effect from 31 December 2018, as explained in the 2018 Directors’ Remuneration Report.
† As explained in the 2018 Directors’ Remuneration Report, this level of award was granted on an exceptional basis.
Pensions
During the year the Committee agreed a gradual phasing down of executive director pensions to the workforce level (currently 7% of
base salary) by January 2023, with a series of stepped reductions applying from 1 January 2021, 2022 and 2023.
Greg Fitzgerald was not a member of a pension scheme during the year and received a pension salary supplement of 20% of
his base salary.
Graham Prothero was not a member of a pension scheme during the year and received a pension salary supplement of 7% of his
base salary.
Earl Sibley was not a member of a pension scheme during the year and received a pension supplement of 15% of his base salary.
There are no special early retirement or early termination provisions for executive directors, except as noted in the exit payments
policy in the Remuneration Policy, available on our website at vistrygroup.co.uk/investors/corporate-governance.
Any new appointments include eligibility for membership of the Group’s DC pension arrangement.
Vistry Group PLC | vistrygroup.co.uk | 111
Remuneration report
Payments for loss of office and to past directors (audited)
There were no payments for loss of office made during the year. There were also no payments to past directors.
Directors’ shareholdings and share interests
Directors’ beneficial share interests (audited)
The directors’ interests in the share capital of the Company are shown below. All interests are beneficial.
31 Dec 2020
Shares under
the LTIP
(shares subject
to performance
conditions)
Ordinary shares
SAYE options
(options subject
to continuous
employment)
Ordinary shares
31 Dec 2019
Shares under
the LTIP
(shares subject
to performance
conditions)
SAYE options
(options subject
to continuous
employment)
Executive directors
Greg Fitzgerald
Graham Prothero
Earl Sibley
Non-executive directors
Ian Tyler
Chris Browne
Ralph Findlay
Nigel Keen
Mike Stansfield
Katherine Innes Ker
544,327
567,430
-
428,480
479,110
54,974
19,102
78,186
176,702
3,849
4,213
-
-
9,935
124,014
4,213
-
-
6,234
9,832
2,868
-
-
850
-
-
-
-
-
-
-
-
-
-
-
-
2,616
1,026
2,687
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
There were no changes in the holdings of ordinary shares of any of the directors between 31 December 2020 and 4 March 2021 other
than the normal monthly investment in partnership shares through the Vistry Group PLC Share Incentive Plan.
The directors’ interests in share options and awards under the Long Term Incentive Plan are detailed above. There were no changes in
the holdings of share options and awards under the Long Term Incentive Plan between 31 December 2020 and 4 March 2021.
Shareholding guidelines
Guidelines have been approved for executive directors in respect of ownership of Vistry Group shares. During 2020, the Board
expected executive directors to retain 100% of the net value derived from the exercise of Long Term Incentive Plan awards as shares,
after settling all costs and income tax due, until such time as executive directors hold shares with an historical cost equal to 200% of
basic annual salary. Shares no longer subject to performance conditions but subject to deferral or a holding period count towards the
guideline (on a net of tax basis).
Executive director
Greg Fitzgerald
Graham Prothero
Earl Sibley
Shareholding
at 31 Dec 2020
Historical
acquisition
cost
Salary at
1 Jan 2021
%
shareholding
achieved
Shareholding
guideline
544,327
£4,856,257
£696,565
54,974
£686,495
£500,000
19,102
£153,872
£395,000
697%
137%
39%
200%
200%
200%
Greg Fitzgerald continued to meet the shareholding guidelines during 2020 and, having made further acquisitions during the year,
now holds shares with a historical cost equal to almost seven times basic annual salary. Graham Prothero acquired shares during the
year and has made good progress towards meeting the shareholding guidelines. Earl Sibley also acquired shares during the year and
continued to increase his holding during 2020.
112 | Our governance
Our governance
Directors’ interests in Long Term Incentive Plan shares (audited)
Executive director
Award date
Vesting date
Interest
as at
31 Dec
2019
Interest
as at
31 Dec
2020
Value of
shares at
date of award
(£000)
Vesting and
exercised
in year
Greg Fitzgerald
*02/05/17
31/12/17
76,786
76,786
*02/05/17
31/12/18
76,786
76,786
650
650
08/09/17
08/09/20
111,972
91,369
**1,300
05/03/18
05/03/21
123,037
123,037
04/03/19
04/03/22
90,529
90,529
02/03/20
02/03/23
Graham Prothero 02/03/20
02/03/23
-
-
108,923
78,186
1,332
1,019
1,393
1,000
Earl Sibley
08/09/17
08/09/20
49,342
40,263
**375
05/03/18
05/03/21
37,511
37,511
04/03/19
04/03/22
37,161
37,161
02/03/20
02/03/23
-
61,767
650
418
790
-
-
-
-
-
-
-
-
-
-
-
Lapsed
in year
-
-
Expiry date
18/04/20
18/04/20
20,603
08/09/27
-
-
-
-
05/03/28
04/03/29
02/03/30
02/03/30
9,079
08/09/27
-
-
-
05/03/28
04/03/29
02/03/30
Market
value at
vesting
(£000)
Gain on
exercise
(£000)
Shares
retained
on
exercise
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* 2017 Bonus award and Recruitment Award granted to Greg Fitzgerald following approval at a General Meeting held on 2 May 2017.
** As explained in the 2017 Directors’ Remuneration Report, the award was calculated based on the closing middle market share price on 21 February 2017, which
was £7.60 per share.
Directors’ interests in share options (audited)
Executive director
Date of grant
Scheme
Interest as at
31 Dec 2020
Granted
in year
Lapsed
in year
Exercised
in year
Interest as at
31 Dec 2019
Exercise price
per share (£)
Option exercise
period
Graham Prothero
3/10/2020
SAYE
-
3,849
Earl Sibley
24/03/2016
SAYE
4,213
-
-
-
-
-
-
4.676
12/23 - 05/24
4,213
7.12
06/21 – 12/21
The Save As You Earn (SAYE) options were granted at a 20% discount to the prevailing market price on the date of grant. There was
no payment required to secure the grant of any share options. There was no change in the terms and conditions of any outstanding
options granted under the SAYE Scheme during the financial year. Share options held in the SAYE Scheme, which are not subject to
performance conditions, may under normal circumstances be exercised during the six months after maturity of the savings contract.
Total Shareholder Return performance graph (1)
e
c
n
a
m
r
o
f
r
e
P
R
S
T
£800
£700
£600
£500
£400
£300
£200
£100
£0
656
468
580
374
383
495
340
259
190
222
210
240
612
305
225
FTSE 350 Home Construction Companies
Bespoke home construction index (2)
Vistry Group PLC
FTSE 250 index
FTSE 250 index
Vistry Group PLC
(1) This graph illustrates ten-year TSR performance and
therefore does not represent the period under which
the Long Term Incentive Plan is measured
(2) Median TSR growth of the constituents of the
bespoke index. Index consists of FTSE 350 home
construction companies as at 31 December 2010
(Barratt Developments, Bellway, The Berkeley Group,
Persimmon, Redrow, Taylor Wimpey)
418
297
178
251
220
152
289
244
157
100
125
94
165
116
Dec 2010
Dec 2011
Dec 2012
Dec 2013
Dec 2014
Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019
Dec 2020
Source - S&P CIQ
As required by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended), the above
graph shows the Total Shareholder Return of an ordinary share held in Vistry Group PLC (Bovis Homes Group PLC as was) over the last
ten financial years, compared to the FTSE 250 index and the median of the FTSE 350 home construction companies (as listed at
31 December 2009) over the same period. As a constituent of the FTSE 250 operating in the home construction sector, the Committee
considers both these indices to be relevant benchmarks for comparison purposes.
Vistry Group PLC | vistrygroup.co.uk | 113
Remuneration report
The middle market price of the Company’s shares at 31 December 2020 was £9.395 (2019: £13.08). During the year ended
31 December 2020 the share price recorded a middle market low of £5.10 and a high of £14.78. As at the date of this report the
share price stood at £9.43.
Total CEO remuneration
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Single figure total £000
836
1,315
1,440
1,596
1,505
1,029
1,376
2,180
2,175
1,342
Annual bonus against maximum %
82.4
84.2
97.8
88.7
59.8
10
100
89
100
Long Term Incentive Plan vesting
against maximum %
0
50
50
66.7
66.7
35.9
0
0
81.6
30
25
Recruitment award vesting against maximum
n/a
n/a
n/a
n/a
n/a
n/a
n/a
100
n/a
n/a
Note: Columns for 2011 to 2016 relate to David Ritchie and those for 2017 to 2020 relate to Greg Fitzgerald
Annual Percentage Change of Each Director’s Remuneration
The following table summarises the annual percentage change of each director’s remuneration compared to the annual percentage
change of the average remuneration of the Company’s employees, calculated on a full-time equivalent basis.
2020
Executive Directors
Greg Fitzgerald
Graham Prothero (appointed 03/01/20)
Earl Sibley
Non-Executive Directors
Ian Tyler
Chris Browne
Ralph Findlay
Nigel Keen
Mike Stansfield
Katherine Innes Ker
Average pay of employees
Salary / fees
Benefits
Annual
bonus
2.5%
94%
-69%
-
-
-
18.0%
82%
-65%
2.75%
2.75%
2.0%
2.3%
2.75%
2.75%
6.14%
n/a
n/a
n/a
n/a
n/a
n/a
1%
n/a
n/a
n/a
n/a
n/a
n/a
*3%
* Bonus earned 2020 - paid March 2021, not finalised at the date of this Report
CEO pay ratio
Our CEO pay ratio has been calculated using “option A”, which uses total full-time equivalent total remuneration for all UK
employees for the relevant financial year to rank the data and identify employees whose remuneration places them at median,
25th and 75th percentile. This option has been selected in place of “option B” used for the prior year as gender pay data had not been
processed in time to complete the calculation and because “option A” reflects the purest approach. The Committee has reviewed
the results of the calculations and is satisfied that they are representative of the respective quartiles and that there would be little
difference if calculated on any other basis.
Year
2020
Option A
£1,342
Method
CEO Single Figure £000
All UK Employees
Lower Quartile
Ratio
Total pay
Salary
Ratio
Total pay
Salary
44.7:1
£30,000
£25,000
78:1
£36,091
£29,863
Median
30.9:1
£43,882
£38,880
56:1
£49,792
£46,500
Upper Quartile
20.5:1
£65,586
£61,500
43:1
£64,500
£58,500
2019
Option B
£2,804
114 | Our governance
Our governance
Relative importance of spend on pay
The graph below details Group wide expenditure on pay for all employees (including variable pay, social security, pensions and share
based payments) as reported in the audited financial statements for the last two financial years, compared with profit before tax and
dividends paid to shareholders.
Notes:
• Total spend on pay in 2019 was £93.0 million and in 2020
was £259.1 million, represents an increase of 178.4%.
• Adjusted profit before tax in 2019 was £186.7 million and in
2020 was £143.9 million, a reduction of 22.9%.
• Cash dividends paid to shareholders totalled £78.6 million in
2019 and £0 in 2020, representing a decrease of 100%.
A bonus issue of 4,369,992 ordinary shares valued at £60
million was made on 16 July 2020, replacing the second
interim dividend.
Implementation of remuneration policy for the year ending 31 December 2021
The remuneration policy was approved at the General Meeting held on 2 December 2019, effective from 3 January 2020. The key
changes in the way that the remuneration policy will be implemented in 2021 versus 2020 are as follows:
• Following a 2021 salary review, it was determined that there should be no general increase, with the exception of staff earning
£20k or below who would receive a flat £250 increase, and that a further review take place with effect from 1 April 2021.
• The Chairman and non-executive director fees were also reviewed and were not increased, in line with the above.
• The Committee decided to approve a simplified Bonus Scheme for 2021 compared to 2020. The main change has been to remove the
focus on synergy delivery and absorb this allocation into profit and capital employed metrics. As such, the 2021 Bonus Scheme will be
based on Profit, Capital Employed, and Customer Satisfaction.
• The 2021 LTIP, in line with the previous scheme, will have the vesting criteria based on TSR, ROCE, and EPS. Whilst the EPS target
is marginally lower than that for the 2020 LTIP scheme it reflects the impact of the pandemic, with 2023 in line with the second
year target at the time of the Acquisition end. The Committee is comfortable that it continues to be stretching. The Remuneration
Committee is mindful of the fall in share price over the past year in connection with the Covid-19 pandemic. In order to reflect the
shareholder experience and to avoid a potential windfall when the share price recovers, the Committee has determined that a 10%
reduction in the face value of LTIP awards to Executive Directors should be applied in 2021. The level of award to the Executive
Directors will therefore be 180% of salary.
Executive directors’ base salaries and benefits
The salaries of the executive directors with effect from 1 January 2021 were as follows:
Executive directors
Greg Fitzgerald
Graham Prothero (appointed 03/01/20)
Earl Sibley
Position
2021 base salary
% increase
from 2019
CEO
COO
CFO
£696,565
£500,000
£395,000
0%
0%
0%
When reviewing base salary, the Committee took account of increases awarded to the workforce, in addition to the individual
performance of executive directors and the impact on their total compensation.
There were no salary increases for Greg Fitzgerald, Graham Prothero and Earl Sibley or the wider employee population, except for
employees earning under £20k per annum.
Benefits will continue on the same basis as for 2020.
Approach to annual bonus
The Committee remains of the view that it is important for the Group’s incentive arrangements to reflect the enlarged Group’s
positioning in the sector and to support capability to recruit and retain the talent required to ensure a successful and sustainable
business, delivering positive outcomes for all stakeholders. Having increased incentive multiples to a competitive level in 2020, the
bonus multiple for 2021 will be retained at 150% of basic annual salary, with the last third of any bonus award being paid in shares,
deferred for two years.
Vistry Group PLC | vistrygroup.co.uk | 115
05010015020025030020192020186.778.693.0Total spendon payAdjusted profit before taxDividendspaid143.90259.1£m
Remuneration report
Following the regular annual review of bonus structure and the underlying success, despite all the challenges seen in 2020, of the
emphasis on operational delivery linked to customer satisfaction, the Committee determined that the annual bonus scheme for 2021
should maintain the focus on financial metrics, introducing a profit gateway to the earning of bonus whilst continuing to prioritise
high levels of customer satisfaction by retaining it, but with an increased threshold. Having delivered ahead of expectations, the
measure for the delivery of synergies has been removed, with the 20% allocation being redistributed to the financial metrics, so
that the weighting for the profit before tax performance measure and for the period end capital employed performance measure
is increased. The weighting for financial metrics is, therefore, maintained at 100%.
As stated, the profit before tax measure will have a gateway, which must be achieved before bonus can be earned, and has weighting
increased to 60%. Period end capital employed is subject to an underpin designed to ensure that appropriate actions and behaviours
are employed in meeting this measure, with the weighting increased to 40%. The period end capital employed measure is designed to
deliver operating efficiencies and maintain a strong and robust balance sheet and appropriate level of gearing. As before, the customer
satisfaction measure continues to act as a threshold, below which total bonus earned is reduced. The threshold has been increased
from 80% to 90% customer satisfaction in the Home Builders Federation (HBF) survey and at this level bonus earned on the financial
metrics is triggered without reduction. A customer satisfaction score of 87.5% leads to a reduction of 5% of bonus earned and scores
of 85%, 80% and 75% lead to further 2.5% reductions, until no bonus is earned at a score of 70%. Should the Group’s customer
satisfaction score fall below 80%, the Committee has agreed that it will review the circumstances surrounding the fall in performance
and may apply downward discretion to the level of bonus earned over and above the automatic threshold reduction.
Measure
2020 Weighting
(as a % of maximum)
2021 Weighting
(as a % of maximum)
Profit before tax (pre-exceptional items and amortisation)
(acts as a gateway to bonus earned for 2021)
Period end capital employed
Synergy delivery (2020)
Financial measures
55%
25%
20%
100%
60%
40%
n/a
100%
Customer Satisfaction (HBF Survey Score)
Acts as threshold
Acts as threshold
Non-financial measures
0%
0%
Provisions that enable the withholding of payment or the recovery of sums paid (malus and clawback) apply to the annual bonus
in circumstances of (i) a material misstatement of results; (ii) an error in assessing a performance condition or in the information on
which the award was granted; (iii) serious misconduct; (iv) a material failure of risk management; (v) circumstances of corporate
failure (vi) serious reputational damage; or (vii) any other circumstances that the Committee considers to be similar in nature or effect.
Malus can apply prior to the bonus payment date and clawback can apply for a two-year period thereafter.
The Committee has decided not to disclose the detail of performance targets in advance as they are considered commercially sensitive,
being closely indicative of the Group’s strategy, but will disclose them retrospectively in the 2021 annual Remuneration Report.
The 2021 performance measures and weightings are described below.
Measure
Rationale / link to strategy
% weighting
Financial measures (100%)
Profit before tax (pre-exceptional
items and amortisation) (acts as a
gateway to bonus earned for 2021)
Period end capital employed
116 | Our governance
Incentivise the achievement of profit targets, with the objective of
sustainably increasing shareholder value.
Incentivise management of the level of capital employed within the
business, aligning with shareholder interests in progressively and
sustainably increasing returns, subject to an underpin designed to ensure
that appropriate actions and behaviours are maintained.
60%
40%
Our governance
Non-financial measure
Customer satisfaction
Maintaining our focus on quality of service is seen as key to reputation and
future success, both in terms of customer demand and achieved selling
prices. Measured by the HBF survey score for legal completions between
1 October 2020 and 30 September 2021. Should a customer satisfaction
score of 90% not be achieved, total bonus earned from the financial
measures starts to reduce.
Total opportunity
Approach for Long Term Incentive Plan awards
Acts as
threshold
100%
The key features of the long-term incentive arrangements (as outlined on page 110) are expected to remain the same as those
for 2020. The Remuneration Committee is mindful of the fall in share price over past year in connection with the Covid-19 pandemic.
In order to reflect the shareholder experience and to avoid a potential windfall when the share price recovers, the Committee has
determined that a 10% reduction in the face value of LTIP awards to Executive Directors should be applied in 2021. The level of award
to the Executive Directors will therefore be 180% of salary.
At the request of the executive directors, the Committee intends to make a cash bonus equal to 10% of the executive directors normal
LTIP opportunity (valued at the share price on the day of grant) to the Group’s lowest paid employees at the end of 2021 to recognise
their significant contribution and commitment to the business during this difficult period.
Provisions that enable the withholding of payment or the recovery of sums paid (malus and clawback) can apply to LTIP awards in
certain circumstances, consistent with those that apply to the bonus, disclosed on the previous page. Malus can apply prior to the
award vesting date and clawback can apply for a two-year period thereafter. A two-year holding period following vesting extends to
five years the time between awards being granted and when they can be exercised.
Performance measures and targets for 2021 LTIP awards
The performance measures for all 2021 awards will be TSR (33.3%), EPS (33.3%) and ROCE (33.3%) and threshold vesting will be set at
25% for each financial measure. The performance targets are:
• TSR – threshold performance equal to the median of the comparator group and maximum performance equal to the upper quartile
of the comparator group, using a relative ranking approach.
• EPS – threshold performance at cumulative EPS of 320 pence and maximum performance at cumulative EPS of 392 pence.
• ROCE – threshold performance at 20.8% and maximum performance at 23%, both as measured in the third year of the performance
period (2023).
The EPS target was set based on earnings excluding amortisation and exceptional items, with threshold performance at 320 pence
to recognise economic uncertainty and difficulties in the operating environment. Maximum EPS performance was set at 392 pence,
with 2023 in line with the second year target at the time of the Acquisition, reflecting continued controlled growth in Housebuilding,
aligned with strategy, and more aggressive growth in Partnerships. Despite the significant impacts of the pandemic in 2020 and the
ongoing uncertainty, threshold performance for ROCE has been maintained 20.8% set for the 2020 LTIP awards, with maximum
moved forward from 22.6% to 23.0%.
The Committee is satisfied that these targets are suitably stretching.
Pensions
Pension arrangements (as outlined on page 111) are subject to the introduction of a stepped reduction arrangement designed to equalise
executive director pensions with the rate applicable to the wider workforce on or before 1 January 2023. The pension rates applicable
from 1 January 2021 are 17% of base salary for Greg Fitzgerald and 13% for Earl Sibley. The pension rate for Graham Prothero from
1 January 2021 remains at 7%, in line with the wider workforce.
Post-employment shareholding guidelines
Guidelines have been approved for executive directors in respect of post-employment ownership of shares in Vistry Group PLC.
The Board expects executive directors to retain the lower of one times the shareholding guideline (200% of salary) and the actual
shareholding at cessation for two years post cessation. The shares to be held only include vested shares from incentive schemes and
exclude shares purchased by executive directors.
Vistry Group PLC | vistrygroup.co.uk | 117
Remuneration report
Non-executive directors’ remuneration
The fees for the non-executive director positions for 2021 are unchanged and are set out below:
Role
Chairman fee
Senior Independent Director fee
Non-executive director base fee
Additional fees:
Audit Committee Chair
Remuneration Committee Chair
2020
2021
£190,100
£190,100
£10,000
£10,000
£54,460
£54,460
£10,000
£10,000
£10,000
£10,000
The fees for the Chairman and the other non-executive directors were reviewed with no increase, following a review which took
into account the economic environment, alignment with the experience of stakeholders, competitive positioning, responsibilities,
time commitment for the roles and the size and complexity of the Company. The Chairman’s fee was last reviewed with effect from
1 January 2020. The non-executive director base fee was also last reviewed with effect from 1 January 2020.
Remuneration of senior management and other below board employees
In addition to responsibility for executive directors, the Committee is also involved in consideration of the remuneration arrangements
for the Executive Leadership Team below the Board, in conjunction with the Chief Executive. Alignment is delivered by ensuring
that senior management and executive directors participate in the same bonus and incentive schemes as far as possible, with similar
performance measures and targets. The Committee has visibility of the remuneration of management teams below the Executive
Leadership Team and has oversight of payment and employment conditions throughout the Group and takes these into account when
setting executive pay.
Engagement with the workforce took place during the year in connection with the communication of bonus arrangements across the
Group and their alignment, through a staff engagement survey containing questions on remuneration, and through a consultation
required in connection with voluntary temporary reductions for all our people with effect from 1 June 2020, which followed the
temporary pay cuts volunteered by the ELT and other members of senior management with effect from 1 April 2020, before all staff
were returned to full pay from 1 August 2020. Following the positive performance of the Group in the second half of the financial year,
all pay reductions were refunded in December 2020.
The Committee is mindful of the new UK Corporate Governance Code provision regarding the alignment of pension provisions with the
broader workforce and a stepped arrangement is in the course of implementation as described on page 117.
The Remuneration Committee
Committee membership and meetings
All members of the Committee are independent non-executive directors who have no personal financial interest, other than as
shareholders, in the matters to be decided. Biographical details are provided on pages 82 to 83.
Name
Nigel Keen (appointed Chairman 23/05/18)
Chris Browne
Ralph Findlay
Mike Stansfield
Katherine Innes Ker
Date of
appointment
Role
Attendance
at meetings
15/11/2016
Chairman
01/09/2014
Member
07/04/2015
Member
28/11/2017
Member
9/10/2018
Member
5/5
5/5
5/5
5/5
4/5
The Committee met five times in 2020. Katherine Innes Ker was unable to attend one meeting due to illness. In addition to the key activities
and decisions mentioned in the introduction to this report, the Committee approved the directors’ remuneration report for inclusion in the
2019 Annual Report, approved the 2020 offer of the SAYE scheme, reviewed remuneration related workforce policies and practices in the
light of the pandemic, and considered and responded to shareholder feedback in connection with the remuneration policy adopted at the
December 2019 General Meeting. It received a 2020 AGM season review and a pandemic market update.
118 | Our governance
Our governance
A review of the performance of the Committee was carried out by IBE as part of the external Board evaluation for 2020 and was completed
in early 2021. Feedback was collected from Committee members, those who attend, and the remuneration advisors, Willis Towers Watson.
The feedback was positive about how the Committee has operated through the pandemic. Composition works well, debate is good, and the
relationship between management and the Committee is robust and appropriate with push back on both sides. The Committee continues to
reflect on recent voting history and challenges itself on ensuring that its shareholder consultation is as fulsome as possible.
For 2021 the Committee will be focusing on ensuring that its discussions take into account the wider Social agenda and will be reviewing the
use of non-financial metrics on diversity and ESG criteria in the scorecard.
The Committee starts its meetings without executive management present when it wishes to do so. During 2020, the Committee asked
Ian Tyler (Chairman), Greg Fitzgerald (Chief Executive) and Earl Sibley (Chief Financial Officer) to attend meetings and assist its discussions.
This excluded matters connected to their own remuneration, service agreements or terms and conditions of employment. The Committee
takes care to recognise and manage conflicts of interest when receiving views from executive directors or senior management and no
director or senior executive is involved in any decisions regarding their own remuneration.
The Group Company Secretary acts as secretary to the Committee.
Advisers to the Committee
Willis Towers Watson were appointed advisors to the Committee in December 2018, following a selection and interview process.
Willis Towers Watson provide independent advice on all aspects of executive remuneration and attend Remuneration Committee meetings
when invited by the Chairman of the Committee. The Committee reviews the advice, challenges conclusions and assesses responses from its
advisors to ensure objectivity and independence. Willis Towers Watson also provide actuarial consultancy and administration services to the
Trustee of the Bovis Homes Pension Scheme. They also provide consultancy services to the Company in respect of pensions. Willis Towers
Watson is a founder member of the Remuneration Consultants Group and have signed the voluntary Code of Conduct for remuneration
consultants. The fees paid to Willis Towers Watson for services provided in 2020 were £176,635 (2019: £172,917).
Shareholder voting at the 2020 AGM
At the Annual General Meeting held on 20 May 2020, shareholder proxy voting on the directors’ remuneration report for the year ended
31 December 2019 was as follows:
Resolution
For
%
Against
%
Total votes
Withheld (1)
Directors’ remuneration report 2019
91,729,684
56.35
71,056,516
43.65
162,786,200
46,561
Shareholder voting at the 2019 GM
At the General Meeting held on 2 December 2019, shareholder proxy voting on the directors’ remuneration policy was as follows:
Resolution
For
%
Against
%
Total votes
Withheld (1)
Directors’ remuneration policy
73,854,103
65.46
38,973,302
34.54
112,827,405
17,584
(1) A vote withheld is not a vote in law and is not counted in the calculation of votes for and against.
The Board recognises that a significant minority opposed the resolution on the 2019 directors’ remuneration report. Our initial
engagement with shareholders opposed indicated that their principle concern was the increase in the CFO’s base salary from
1 January 2020, the repositioning of which was notified to shareholders in the Circular dated November 2019, which set out the
basis of the Acquisition and which reflected his base salary’s pre-existing and material shortfall to the market. Before the pandemic
related reductions (repaid in December 2020), both his new base salary and total compensation package were almost exactly in line
with the median of UK listed housebuilders. The Board does not anticipate the necessity to award an increase of this magnitude in the
foreseeable future.
By order of the Board
Nigel Keen
Chairman of the Remuneration Committee
4 March 2021
Note: This Directors’ Remuneration Report has been prepared in accordance with the requirements of Schedule 8 to the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008 (as amended). The report also meets the relevant requirements of the Listing Rules of the Financial Conduct
Authority, and describes how the Board has complied with the principles and provisions of the UK Corporate Governance Code relating to remuneration matters.
Remuneration tables subject to audit in accordance with the relevant statutory requirements are contained in the annual remuneration report.
Vistry Group PLC | vistrygroup.co.uk | 119
Remuneration Policy
The table below sets out key elements of the Remuneration Policy,
which was approved by shareholders at a General Meeting on
2 December 2019. The full remuneration policy is available at
vistrygroup.co.uk/investors/corporate-governance.
Components of the remuneration framework
for executive directors
The policy table below summarises the main components of the
remuneration framework, a large proportion of which is
performance related.
Fixed pay
Opportunity
Performance metrics
Purpose and link
to strategy
Operation
Base salary
Ordinarily reviewed annually.
The review typically considers
competitive positioning, the individual’s
role, experience and performance,
business performance and salary
increases throughout the Group.
Market benchmarking exercises are
undertaken periodically and judgement
is used in their application.
BONUS
£
To attract and retain
high performing talent
required to deliver
the business strategy,
providing core reward
for the role.
£
£
Benefits
To provide market
competitive benefits
consistent with role.
£
Benefits typically include medical
insurance, life assurance, membership
of the Bovis Homes Regulated Car
Scheme for Employees or cash car
allowance, annual leave, occupational
sick pay, health screening, personal
accident insurance, and participation
in all employee share schemes
(SAYE and SIP).
In line with business requirements,
other expenses may be paid, such as
relocation expenses, together with
related tax liabilities.
Pension
To attract and retain
talent by enabling long
term pension saving.
Executives joining the Group since
January 2002 can choose to
participate in a defined contribution
arrangement, or may receive a
cash equivalent. A salary supplement
may also be paid as part of a pension
allowance arrangement.
BONUS
£
£
£
£
£
BONUS
£
£
120 | Our governance
Not applicable.
Whilst we do not consider it appropriate
to set a maximum base salary level, any
increases will take into account
the individual’s skills, experience,
performance, the external environment and
the pay of employees throughout the Group.
Whilst generally the intention is to
maintain a link with general employee pay
and conditions, in circumstances such as
significant changes in responsibility or size
and scope of role or progression in a role,
higher increases may be awarded.
Thus, where a new director is appointed at
a salary below market competitive levels to
reflect initial experience, it may be increased
over time subject to satisfactory performance
and market conditions.
This will be fully disclosed in advance
on appointment.
£
We do not consider it appropriate to set
a maximum benefits value as this may
change periodically.
Not applicable.
Not applicable.
A pension allowance of up to 20% of base
salary may be paid for current incumbents.
For new incumbents, the contribution rate
is set at 7% of base salary, to be maintained
in line with changes in the rate applicable to
the workforce.
This may be taken as a contribution to the
Group Personal Pension Plan, as a cash
supplement, or a combination of the two.
Salary increases awarded after the first
year of the Policy are not pensionable for
directors who receive pension contributions
at a rate above that applicable to
the workforce.
From January 2023 or earlier, all directors
pension contributions shall be maintained in
line with the rate set for the workforce.
Purpose and link
to strategy
Operation
Opportunity
Performance metrics
Variable pay
Our governance
Annual bonus
To incentivise and
reward the delivery
of near-term business
targets and objectives.
The annual bonus scheme is a discretionary
scheme and is reviewed prior to the start
of each financial year to ensure that it
appropriately supports the business strategy.
Performance measures and stretching targets
are set by the Committee.
BONUS
Bonuses are normally paid in cash and any
amounts awarded over 100% of base
salary can be deferred in cash or shares for
two years.
£
It is the intention for the default treatment
for deferred awards to be in shares. In any
year in which no dividend is proposed
discretion may be exercised to pay part,
or all, of the bonus in ordinary shares,
consistent with the deferral profile above.
Actual bonus amounts are determined by
assessing performance against the agreed
targets after the year end. The results are
then reviewed to ensure that any bonus
paid accurately reflects the underlying
performance of the business.
£
Clawback provisions apply (for a period of
two years from the bonus payment date).
Circumstances include: a material
misstatement, serious misconduct, a
material failure of risk management,
restatement of prior year results, corporate
failure, or serious reputational damage to
any Group company.
Long Term
Incentive Plan
(LTIP)
Typically, annual awards are made under
the LTIP. Awards can be granted in the
form of nil- cost options, forfeitable shares
or conditional share awards.
To incentivise, reward
and retain executives
over the longer term
and align the interests
of management and
shareholders.
BONUS
Performance is measured over a
performance period of not less than three
years. LTIP awards do not normally vest
until the third anniversary of the date of
the grant.
Vested awards are then subject to a two-
year holding period.
For nil-cost options this will be a
prohibition on exercise until the end of the
holding period.
£
Awards may be granted with the benefit of
dividend equivalents, so that vested shares
are increased by the number of shares
equal to dividends paid from the date of
grant to the date of exercise.
£
Malus provisions can be applied to awards
prior to the vesting date and clawback
provisions can be applied for two years
thereafter in certain circumstances,
including a material misstatement,
serious misconduct, a material failure of
risk management or serious reputational
damage to any Group company. Malus can
also be applied for any other reason which
the Committee considers appropriate.
£
£
£
£
The annual bonus
scheme offers a
maximum opportunity
of up to 150% of
base salary.
Achievement of
stretching performance
targets is required to
earn the maximum.
Performance measures are selected to
focus executives on strategic priorities,
providing alignment with shareholder
interests and are reviewed annually.
Weightings and targets are reviewed and
set at the start of each financial year.
Financial metrics will comprise at least 50%
of the bonus and are likely to include one
or more of:
• a profit-based measure
• a cash-based measure
• a capital return measure
Non-financial metrics, key to business
performance, will be used for any balance.
These may include measures relating to
build quality and customer service.
Overall, quantifiable metrics will comprise
at least 70% of the bonus.
Below threshold performance delivers no
bonus and target performance achieves a
bonus of 75% of base salary.
The maximum
annual award, under
normal circumstances
is 200% of base salary
for executive directors.
The performance measures applied to
LTIP awards are reviewed annually to
ensure they remain relevant to
strategic priorities and aligned to
shareholder interests.
Weightings and targets are reviewed and
set prior to each award.
Performance measures will include long
term performance targets, of which
financial and / or share price-based
metrics will comprise at least two thirds
of the award. Quantifiable non-financial
metrics, key to business performance, will
be used for any balance.
Any material changes to the performance
measures from year to year would be
subject to prior consultation with the
Company’s major shareholders.
Below threshold performance realises 0%
of the total award, threshold performance
realises 25% and maximum performance
realises 100%. The Committee may adjust
downwards the number of shares realised
if it considers such adjustment is justified
based on: (a) the performance of the
Company, any business area or team; (b)
the conduct, capability or performance of
the participant; or (c) the occurrence of
unforeseen events or of events outside of
the participant’s control.
Vistry Group PLC | vistrygroup.co.uk | 121
Remuneration Policy
Purpose and link to
strategy
Operation
Opportunity
Performance metrics
Variable pay
The guideline for executive directors is
200% of base salary.
Not applicable.
Shareholding
guideline
To encourage
executives to build
up a meaningful
shareholding over time
and align the interests
of management and
shareholders.
Executive directors benefitting from
the exercise or release of LTIP awards
are expected to retain 100% of the net
value derived as shares, after settling
all costs and income tax due, until such
time as the guideline is met. The post-
employment shareholding guideline
is the lower of 1x the shareholding
guideline (200% of salary) and the actual
shareholding at cessation. Shares to be
held for two years post-cessation. Shares
to be held only includes vested shares
from incentive plans and excludes shares
purchased by executives.
£
Notes to the policy table
The Committee may make minor amendments to the Policy set out above
(for regulatory, exchange control, tax or administrative purposes, or to take
account of a change in legislation) without obtaining shareholder approval, for
that amendment.
The executive directors may request, and the Company may grant salary
and bonus sacrifice arrangements. The LTIP rules permit the substitution or
variance of performance conditions to produce a fairer measure of performance
as a result of an unforeseen event or transaction. They include discretions
for upwards adjustment to the number of shares to be realised in the event of a
takeover, and scheme of arrangement or voluntary winding up. Non-significant
changes to the performance metrics may be made by use of discretion under
the performance conditions. Awards are normally satisfied in shares, although
there is flexibility to settle in cash.
The Committee reserves the right to make remuneration payments and
payments for loss of office (including exercising any discretions available to it
in connection with such payments) that are not in line with the Policy table set
out above where the terms of the payment were set out:
(i) before 16 May 2014 (the date the Company’s first remuneration policy
came into effect);
(ii) under the Company’s previous shareholder-approved remuneration policies,
provided that the terms of payment were consistent with the relevant
remuneration policy in force at the time they were set out; or
(iii) at a time when the relevant individual was not a director of the Company
and, in the opinion of the Committee, the payment was not in consideration
for the individual becoming a director of the Company.
For these purposes, “payments” includes the Committee determining and
paying short-term and long-term incentive awards of variable remuneration.
BONUS
£
£
£
122 | Our governance
Our governance
Leading
the charge in
sustainable
timber usage
We ensure that timber from our
supply chain is either FSC, PEFC certified
or from a legal and sustainable source
Vistry Group PLC | vistrygroup.co.uk | 123
Audit committee report
During a year of challenge and change, the Audit Committee continued
to play a fundamental role in protecting stakeholders’ interests.
The Committee reviewed the Group’s financial reporting, internal
control systems and risk management and maintained oversight of
external and Internal Audit. It also monitored development of the
control environment following the Acquisition and reviewed accounting
policy alignment and acquisition accounting. I am pleased to introduce
the Committee’s report for 2020.
Ralph Findlay | Committee Chairman
The Risk Governance Committee was
renamed the Risk Oversight Committee
with a refreshed membership and its
role in reviewing risk management
and emerging and principal risks
expanding to cover the activities of the
enlarged Group. The Committee will
continue to contribute to the monitoring
of emerging and principal risks and
the understanding and mitigation of
evolving risk facing the enlarged business.
Committee membership
and meetings
During 2020, the Committee comprised
five independent non-executive directors
and had no changes in membership.
The non-executive directors have,
between them, the recent and relevant
experience required by the UK Corporate
Governance Code. As a whole, they
have competence relevant to the
sector in which the Company operates.
Biographical details and information on
skillsets are provided on pages 82 and 83.
Committee membership is determined
by the Board following recommendation
from the Nomination Committee and
is kept under review as part of the
Committee’s performance evaluation.
The Company Chairman, Chief
Executive, Chief Operating Officer, and
Chief Financial Officer were present
at all meetings in 2020 by invitation.
PricewaterhouseCoopers LLP, the external
auditors, the Head of Internal Audit &
Risk, and the Head of Financial Reporting
attended all meetings.
The Committee met four times in 2020.
Detailed papers and information were
circulated sufficiently in advance of
meetings to allow full and proper
consideration of the matters for
discussion. Following one meeting, the
Committee met with the external auditors
and the Head of Internal Audit & Risk,
without executive management present.
Ralph Findlay, Committee Chair, also met
privately with the audit engagement
partner of the external auditors during
the year. The Group Company Secretary
acts as secretary to the Committee.
An overview of the main activities during
2020 is provided on the next pages.
Name
Date of
appointment
Role
Attendance
at meetings
Ralph Findlay (appointed Chairman 15/05/15)
07/04/2015 Chairman
Chris Browne
01/09/2014
Member
Katherine Innes Ker
09/10/2018 Member
Nigel Keen
Mike Stansfield
15/11/2016 Member
28/11/2017 Member
4/4
4/4
4/4
4/4
4/4
Overview
During 2020, the Committee
reviewed the integrity of the Group’s
financial statements, monitored
operating, financial and accounting
practices, and carefully reviewed
significant areas of judgement and
the viability statement. Following
the Acquisition, the development
and expansion of the control
environment was monitored to
ensure that it was consistently
applied and embedded across
the Group. In addition, accounting
policy alignment was assessed,
acquisition accounting was reviewed,
and Covid-19 cost accounting and
disclosure was considered.
With the expansion of the Group,
the Committee monitored the
system for internal control, financial
reporting and risk management,
with the effectiveness of this system
being reviewed in the context of
the Group’s strategic priorities,
the more complicated business
environment following the Acquisition,
and operational performance.
Reporting was received from the
external auditor, Internal Audit and
management and was openly debated
in free-flowing discussions, which
served to test conclusions, audit
outcomes and judgements.
The effectiveness of the Group’s
Internal Audit function continues
to develop. Resource was subject to
a temporary reduction in early 2020,
before this was reversed and approval
was given later in the year to recruit
two new team members.
124 | Our governance
Responsibilities and terms
of reference
Key responsibilities of the Committee are:
• Monitoring the integrity of the
financial statements, the accompanying
reports to shareholders and corporate
governance statements, including
reviewing and testing the findings of
the external auditor.
• Reviewing and monitoring the
effectiveness of systems for internal
control, financial reporting and
risk management.
• Overseeing and reviewing the
effectiveness of the Group’s Internal
Audit function.
• Making recommendations to the Board
in relation to the appointment and
removal of the external auditor and
approving their remuneration and
terms of engagement.
• Reviewing and monitoring the external
audit process and the independence
and objectivity of the auditor, as well
as the nature and scope of the external
audit and its effectiveness.
• The pre-approval of all audit related
and non-audit services proposed to
be undertaken, taking into account
relevant ethical guidance.
The Committee’s terms of reference
are available on the Company’s website
(vistrygroup.co.uk/investors/
corporate-governance).
Main activities during the year
The Committee followed a programme
structured around the annual reporting
cycle, with an additional meeting being
held to monitor the expansion and
effectiveness of the control environment
designed to deliver one set of controls
across the enlarged Group and to
commence a review of accounting policy
alignment and acquisition accounting.
It received reports from Internal Audit,
the external auditor and management.
The key activities undertaken were:
• Discussed the key accounting
considerations and judgements
reflected in the Group’s results for the
year ended 31 December 2019 with the
external auditor.
Our governance
• Reviewed the 2019 annual report and
accounts and recommended to the
Board that, taken as a whole, it was
fair, balanced and understandable.
• Completed a goodwill impairment
assessment, determining that no
impairment was deemed necessary in
the period.
• Assessed the results and effectiveness
• Completed an assessment of
of the 2019 final audit.
• Reviewed and discussed the key
accounting considerations and
judgements reflected in the Group’s
results for the six months ended 30
June 2020 with the external auditor.
• Evaluated and agreed the external
auditor’s audit strategy memorandum
in advance of the 2020 year-end audit.
• Received reports from Internal Audit
(further detail is provided below).
• Reviewed and assessed the Group’s risk
appetite and monitored the effective
mitigation of principle risks.
• Reviewed continued progress with the
review of risk management and the
work completed by the Risk Oversight
Committee, including having sight
of minutes.
• Monitored the expansion of the control
environment aimed at achieving one
set of controls across the enlarged
Group and its ongoing effectiveness,
including delegated authorities,
procurement limits within COINS,
and updated commercial and cost
valuation controls, with alignment
to the quarterly self-assessment
process covering key controls and
policy adherence.
• Reviewed the effectiveness of the
system of internal control and risk
management systems and
continued to monitor progress
with the implementation of key
new software systems to ensure
the expected improvements in the
control environment are delivered
in a consistent way across the
enlarged Group.
• Considered and interrogated a report
from the external auditor covering
acquisition accounting, including
an accounting policy alignment
review and a fair value exercise,
plus Covid-19 considerations.
anti-bribery, fraud risk and anti-fraud
measures.
• Reviewed management’s going
concern assessment at each reporting
period end, considering detailed
financial forecasts, future cash flow
projections and the resources
available to the Group, including the
current banking facility and forecast
covenant compliance.
• Reviewed management’s viability
assessment for the year end reporting
period covering strategic planning,
principle risks, detailed financial
forecasts, resources available to
the Group, scenario testing,
qualifications and assumptions and
the period chosen.
• Reviewed the Company’s Speak Up
whistleblowing policy, arrangements
for reporting concerns, and general
nature of the cases reported.
• Reviewed the Committee’s terms
of reference.
• Agreed actions arising from
the Committee’s 2019 informal
performance evaluation and monitored
their completion.
The Audit Committee was provided with
summarised findings and action plans
from all internal audits throughout the
year. These were based on a rolling work
plan to provide greater flexibility during a
period of change for the Group, covering
business assurance, thematic reviews and
process reviews, with initial focus on the
Partnerships business to assess control
and compliance arrangements, before
moving to Housebuilding following
the initial reorganisation. In addition,
commercial auditing was undertaken
with support from the Group
Commercial function, including a cost
valuation review with the objective of
examining and challenging cost risk and
forecasting and a review focussing on
large complex multi-phase sites.
Vistry Group PLC | vistrygroup.co.uk | 125
Audit committee report
A full cultural assurance review was also
undertaken, with external support, and
a desktop review over remote working
controls completed.
Whistleblowing was also discussed and
saw a continuation in the level of
reported cases and investigations in
2020 as the prior year. The Group operates
a confidential reporting service called
Speak Up, run by an external provider
and investigations are completed by
independent resource within the Group.
22 cases were raised during 2020 from
across the Group, demonstrating that
efforts to publicise and develop awareness
of whistleblowing, with a positive tone from
the top, were effective. The Committee and
executive management remain committed
to ensuring that the whistleblowing facility
is well publicised throughout the enlarged
Group during 2021 and will continue
to monitor reporting and investigations
to ensure that appropriate action is
taken, with cases being closed out on a
timely basis.
At its meeting in February 2021, the
Committee discussed with the external
auditor the key accounting considerations
and judgements reflected in the Group’s
results for the year ended 31 December
2020 and reviewed the 2020 Annual
Report and Accounts, to be able to
recommend to the Board that, taken
as a whole, it was fair, balanced and
understandable and provided the
information necessary for shareholders
to assess the Company’s performance,
business model and strategy.
The approach taken was to analyse key
areas of progress and challenge during
the year, followed by review of the 2020
Annual Report and Accounts to ensure
that all key areas had been reported upon
in a balanced and fair way.
Significant areas
The key sources of estimation
uncertainty for the Group considered
by the Committee and discussed
with the external auditors, in relation
to the 2020 accounts, were:
• Inventory provisioning - the level
of inventory provisioning impacts the
carrying value of the most significant
balance on the balance sheet.
The Company carries a provision to
write down the value of the land held
within inventories to the lower of cost
and net realisable value, less costs to
sell, where this is less than the historical
cost and reviews this provision annually.
126 | Our governance
The assessment of the level of provision
required necessitates the exercise of
judgement by management. At this
year end the provision had increased
to £5.7m and had been audited and
reported on by the external auditors.
The utilisation in the period and
adjustments proposed were discussed
and justified by management and the
land write down provision remaining at
the period end was reviewed.
Following discussion, the Committee
was satisfied that the judgements
exercised were appropriate and that the
provision was appropriately stated at
the year end. Details of the movements
in the provision are provided in note 3.1
to the accounts on pages 159 and 160.
• Margin Forecasting - The gross margin
from development revenue generated
on each of the Group’s individual sites
within the year is recognised based
on the latest forecast for the gross
margin expected to be generated
over the remaining life of that site.
The remaining life gross margin is
calculated using forecasts for selling
prices and all land, build, infrastructure
and overhead costs associated with
that site. There is inherent uncertainty
and sensitivity to external forces
(predominantly house prices and
labour costs) in these forecasts, which
are reviewed regularly throughout the
year by management and are addressed
on pages 50 to 55.
In order to calculate partner delivery
revenue, the Group estimates the total
revenue and total costs for the contract
and derives the expected margin.
Revenue recognised is then calculated
by taking the costs incurred in the
period, plus the expected margin, for
each contract. The assessment of
total costs to complete the contract
requires estimation. The Group has
robust internal controls to review future
revenue and cost estimates.
External auditor
PricewaterhouseCoopers LLP (PwC)
were appointed as external auditor at
the 2015 AGM, following the completion
of a competitive audit tender process
supervised by the Committee. In doing
so, the Committee complied with
the provisions of the Competition &
Markets Authority Order, including the
appointment of the auditor to audit
and non-audit services.
The lead audit engagement partner
rotated in 2020, with the audit for
the 2020 financial year being led by a
new partner.
Our 2021 AGM Notice contains a
resolution for the re-appointment of PwC
as auditors to the Company. In making
this recommendation, the Committee took
into account, amongst other matters, the
independence and objectivity of PwC, the
ongoing effectiveness of the external audit
process and cost.
There are no contractual restrictions on
the choice of external auditor. The AGM
Notice also contains a resolution to give
the directors authority to determine the
auditor’s remuneration, which provides a
practical flexibility to the Committee.
During the year, the Committee reviewed
the independence and objectivity of the
external auditor, which was confirmed
in an independence letter containing
information on procedures providing
safeguards established by the external
auditor. Regulation, professional
requirements and ethical standards
were taken into account, together with
consideration of all relationships between
the Company and PwC and their staff.
Relations with the external auditors
are managed through a series of
meetings and regular discussions and
the Committee ensures a high quality
audit by challenging the key areas of the
external auditor’s work.
At its meeting in early March 2021, the
Committee reviewed the effectiveness of
the external audit process as part of its
consideration of the 2020 final audit.
This involved assessing delivery and
content against the audit plan for
the 2020 year end audit, including
determination of audit risks and key
sources of estimation uncertainty,
consideration of the performance and
communication of the audit team, and
the quality of reporting, observations,
recommendations and insight.
The Committee also considered
the circumstances leading to the
postponement of the publication of the
Group’s final results for the full year ended
31 December 2020 from 25 February
2021 until 4 March 2021, following a
request from the external auditor, in
light of practical resource constraints
resulting from the third national
lockdown, that flexibility be applied to
the year end timetable.
This short delay allowed sufficient time for
the external auditor to complete the audit
of the results and ensure the quality of
its reporting.
The review included consideration of
progress with areas of particular focus
agreed for the 2020 audit and the
comprehensive papers received from
the external auditor, discussing and
challenging their conclusions and audit
judgements and assessing responses from
the external auditor. Continuity has been
maintained within the audit team, business
knowledge has improved year on year,
and communication has been generally
constructive and timely.
The Committee keeps under review its
policy which requires the Committee to
approve all audit related and non-audit
services proposed to be undertaken by
the external auditors, with the exception
of compliance work undertaken in the
ordinary course of business, which is
treated as pre-approved.
When a request for approval is made, the
Committee has due regard to the nature
of the audit related or non-audit service,
whether the external auditor is a suitable
supplier, and whether there is likely to be
any threat to independence and objectivity
in the conduct of the audit. The related fee
level, both separately and relative to the
audit fee is also considered.
The Committee reviewed the performance
of the external auditor, including
circumstances leading to a request from
the external auditor, in light of practical
resource constraints resulting from the
third National lockdown, that flexibility
be applied to the year end timetable, and
the subsequent postponement of the
publication of the Group’s final results for
the full year ended 31 December 2020
from 25 February 2021 until 4 March 2021.
This short delay allowed sufficient time for
the external auditor to complete the audit
of the results and ensure the quality of
its reporting. Taking account of the
additional flexibility required, the
Committee considers PwC to have been
effective and to have carried out a high
quality audit in the sixth year since
appointment, having continued to
develop a good understanding of the
enlarged Group. PwC did not provide
any non-audit services during 2020.
The Committee is satisfied that they
continued to demonstrate independence
as auditor of the Group.
Internal Audit
There was a small reduction in Internal
Audit resourcing during 2020 through
a single redundancy and a short period
when a member of the team was
furloughed whilst sites and back office
functions were unavailable. This did not
impact the assurance provided through
the year and the team worked hard to
ensure the audit plan was completed
as agreed. Approval was provided to
bolster the department with two new
additional members joining the team in
early 2021, continuing progress towards
improved internal capability required
in the context of the enlarged Group,
led by the Head of Internal Audit
& Risk. Focus will be placed on
improving the commercial auditing
skillset, with support from Group
Commercial and increased use of virtual
resource from within the business.
For an analysis of fees paid to PwC for
audit services see note 2.1 on page 156.
There were no non-assurance services
provided by PwC during the year, beyond
a de-minimis technical accounting
subscription service.
Performance evaluation
An evaluation of the performance of the
Committee was undertaken as part of the
external Board evaluation exercise carried
out by IBE in 2020 and completed at the
beginning of 2021. The process was entirely
interview based, and included Committee
members, Board members who attend, key
members of the senior team, and the lead
audit partner from PWC.
The review considered Committee
composition, quality of meetings,
effectiveness in meeting its objectives, the
focus and quality of discussions, the quality
of the external auditor, and the role and
performance of internal audit.
Overall, the feedback was positive.
The Committee was considered to have
performed well over 2020 and to fulfil
its remit effectively. The balance of the
agenda was appropriate, and the
culture of the meetings was described as
challenging and supportive. The Committee
was described as highly engaged in
its discussions.
Our governance
The incorporation of the
Partnerships Quality Team into
Internal Audit is intended to follow,
increasing resource, and supporting
the improvements required to align
controls and improve compliance
across the enlarged Group.
Overall, the Committee is pleased
with the ongoing progress and has
approved a separate commercial
audit plan for 2021, in addition to
the end to end process reviews,
thematic process reviews and
other activity comprising the usual
audit plan. This return to more
traditional Internal Audit activity
in 2021 includes opportunities for
Internal Audit to act as a driver
of performance and compliance
throughout the business.
Action points for the Committee to consider
in 2021 were as follows:
• to work with the Nomination Committee
to plan for a future chair of Audit in
due course
• to keep under review the strength of
the finance team and the resource
allocated to Internal Audit to ensure
that both remain fit for purpose as the
Group integrates
• to ensure that the risk profile of
the Partnerships business is well
understood and scrutinised by the
Committee, differing as it does from the
Housebuilding division
• to keep under review whether Internal
Audit and Risk should be split into two
separate functions
• to keep challenging the status of the
control environment across the whole
Group and to support the executive in
implementing centralised controls across
the Group and
• to continue to direct its questions
at management, and to bring more
members of management into the
meetings to answer questions if necessary
Ralph Findlay
Chairman of the Audit Committee
4 March 2021
Vistry Group PLC | vistrygroup.co.uk | 127
Nomination Committee report
In 2020 the main focus of the Committee remained on
executive director succession planning and Board composition,
with longer term considerations coming into view following
the Acquisition.
Ian Tyler | Committee Chairman
Name
Ian Tyler
Chris Browne
Ralph Findlay
Nigel Keen
Mike Stansfield
Katherine Innes Ker
Date of
appointment
Role
Attendance
at meetings
29/11/2013
Chairman
01/09/2014
07/04/2015
15/11/2016
28/11/2017
09/10/2018
Member
Member
Member
Member
Member
5/5
5/5
5/5
5/5
5/5
5/5
We passionately believe in diversity and
inclusion and that it is vital to business
success. Both gender and ethnic diversity
throughout the Group has seen significant
progress, with a high proportion of senior
appointments during the year going
to women, including the appointment
of Debbie Hulme, our Group Customer
Experience Director, to the ELT and
board of Vistry Homes Limited and the
appointment of Dawnet McLaughlin as a
business unit MD.
Data submitted to the Hampton-Alexander
Review as at the end of October 2020
showed that of a total of 30 direct reports
to the ELT eleven were women and this
remained the position at the end of the
year. In addition, two senior promotions
to business unit MD, one male and one
female (noted above) went to individuals in
ethnic minority groups and we support the
findings of the Parker Review.
The Committee also continued to review
the composition of the Board more
generally in 2020 and the knowledge,
skills and experience available to the Board
amongst the non-executive directors.
During 2021, the Committee will continue
to develop longer term succession
planning, promote diversity and inclusion,
and monitor Board composition in light of
the challenges and opportunities ahead
in delivering the Group’s strategy as a top
five housebuilder.
Committee membership
and meetings
All members of the Committee are
independent non-executive directors,
with the exception of the Chairman of the
Company. Ian Tyler chaired the Committee
during the year and the other members
were Chris Browne, Ralph Findlay,
Nigel Keen, Mike Stansfield and Katherine
Innes Ker.The Committee met five times
in 2020.
Early in the year more routine business
was addressed, before attention moved
to long term succession planning for the
executive directors and consideration of
Board composition. These discussions
evolved and continue to be developed,
with Board composition considering
options for meeting the Hampton
Alexander minimum target for 33%
women’s representation on the Board.
The Group’s diversity and inclusion
policy was reviewed and consideration
was given to the best way to widen and
drive initiatives forward, resulting in the
formation of a working group whose
initial task was to gather employee
views and feed back to the ELT,
with progress being monitored by
the Committee. The outcomes are set
out later in this report.
Overview
Following the Acquisition and the
appointment of Graham Prothero as
Chief Operating Officer at the start
of 2020, the Committee allowed
time for the integration to progress
before turning its attention in
the second half of the year to
longer term Board succession
and succession planning for the
executive directors, reviewing the
strength and depth of the talent
pool available to the Group.
Diversity and inclusion also came to
the fore, with review of the Group’s
policy and the formation of a working
group designed to gather employee
views and inform and widen the
scope of initiatives being undertaken
to deliver benefits for the Group.
The Committee supports the
recommendations of the Hampton-
Alexander Review. Although the
Board was not able to take steps
to meet the minimum target for
33% women’s representation on
the Board at the end of 2020.
Following a conscious decision not
to change the Board composition
through the integration process
following the Acquisition, it is now
in a strong position to review how
its composition should evolve.
Recruitment of a further non-
executive director is currently
underway and, together with a
review of Board composition, will be
concluded before the end of 2021.
128 | Our governance
For all meetings, papers and supporting
documentation were circulated in
advance, allowing proper consideration
of matters for discussion. The Chief
Executive attended five meetings and
the Chief Financial Officer attended one
meeting, both by invitation. The Group
Company Secretary acts as secretary to
the Committee.
Responsibilities and terms
of reference
The key responsibilities of the Committee:
• Reviewing the structure, size and
composition of the Board (including
skills, knowledge, experience and
diversity) and making recommendations
to the Board.
• Considering succession planning
for directors and senior executives,
taking account of the challenges and
opportunities facing the Company and
the skills and expertise needed in
the future.
• Monitoring the leadership needs of the
Company and leading the process for
Board appointments, ensuring they are
conducted on merit, against objective
criteria, including diversity and inclusion,
using the services of an appropriate
external search consultant.
• Making recommendations to the
Board, including on the re-appointment
of non-executive directors, the
re-election of directors at the AGM,
and membership of the Audit and
Remuneration Committees.
• Keeping the Group’s diversity and
inclusion policy and initiatives and
progress under review.
The Committee also reviews the results of
the Board performance evaluation relating
to the composition of the Board. External
legal or other independent professional
advice can be obtained at the Company’s
expense and this facility was not utilised
during the year. The Committee’s terms of
reference are available on the Company’s
website (vistrygroup.co.uk/investors/
corporate-governance).
Our governance
A summary of the Committee’s activities during 2020 follows:
• Keeping the structure, size and
composition of the Board under
review, including in the context of the
enlarged Group.
• Assessing the talent available to the
Group and developing succession
planning for the executive directors,
particularly the CEO, with specific
consideration of future requirements,
challenges and opportunities.
• Completing rigorous reviews leading
to recommendations regarding the
renewal of directors’ service contracts
for M C Browne and M J Stansfield.
• Considering the overall composition
and length of service of the Board and
the need to refresh its membership at
the appropriate time.
• Recommending the directors to stand
for re-election at the 2020 AGM in
accordance with the UK Corporate
Governance Code.
• Reviewing the Group’s diversity and
inclusion policy and the actions being
taken to progress and widen initiatives.
• Concluding on the Committee’s 2019
informal performance evaluation and
following through on the outcomes
and actions
• Starting the Committee’s 2020 formal
performance evaluation
• Approving the Nomination Committee
report for the 2019 Annual Report.
• Reviewing the Committee’s terms
of reference.
Main activities during the year
The main activities during the early part
of 2020 comprised more routine business,
including nominations for appointment at
the 2020 AGM, approval of the Committee
report for inclusion in the 2019 Annual
Report, and discussion of the outcomes
and determination of the actions coming
out of the Committee’s 2019 informal
performance evaluation.
In the second half, attention moved to long
term succession planning for the executive
directors and particularly the CEO, coupled
with consideration of Board composition
with the objective of ensuring that, longer
term, the Board has the knowledge, skills
and experience required to ensure the
long-term sustainable success of the Group.
These discussions evolved and included
use of an independent external consultant,
with no connection to the Group, to garner
views from Board members, the ELT, and
senior management on key requirements
in an individual for the future leadership of
the Group. This process is ongoing and a
presentation to the Committee to inform
discussion will take place in early 2021.
Board composition also considered, as an
ongoing process, options for meeting the
Hampton Alexander minimum target for
33% women’s representation on the Board.
Having taken a conscious decision to
maintain stability in Board membership
through 2020, the key stages of the
integration process following the
Acquisition and the challenges of the
pandemic, a conclusion was reached
in early 2021 to recruit a further non-
executive director and review the shape
of the Board, given the size, scale and
complexity of the Group with both
processes to be complete by the end
of 2021. The Board, therefore, expects to
be compliant with the recommendations
of the Hampton Alexander review by the
end of 2021.
The Nomination Committee reviewed and
approved a diversity and inclusion policy
in December 2018, which is designed to
promote and support the development of
a diverse and inclusive culture, both in the
boardroom and across the Group.
The policy sets out how the Board seeks
a mix of talented people with a range of
experience, skills, vision and independence,
recognising the importance of a blend
of abilities, views and social and ethnic
backgrounds to enable it, as the objective
of the policy, to function effectively.
In implementing the policy, a high
emphasis is being placed on ensuring
the development of diversity in senior
management roles across the Group
by strengthening the talent pipeline
and through internal promotion
and recruitment. The policy is implemented
by circulation throughout the Group,
regular communication, and publication
on the Group’s intranet and website.
Vistry Group PLC | vistrygroup.co.uk | 129
Nomination Committee report
In common with the construction industry
as whole, the majority of our workforce is
male (2020: 67.7%; 2019 64.8%). While a
lower proportion of senior management
and directors are female, the Group made
progress during 2020, increasing the
number of women in senior leadership
positions. Debbie Hulme, our Group
Customer Experience Director, was
appointed to the ELT on 21 July 2020 (and
to the board of Vistry Homes Limited) and
Dawnet McLaughlin was appointed MD of
our Caterham business unit on 1 July 2020.
In addition, Sally Drew was appointed
Group Health & Safety Director on 1 July
2020 and Danica McLean was appointed
HR Director of our Housebuilding Division
and Central Services on 15 December 2020.
We support the findings of the Parker
Review and have undertaken a number
of measures to promote an inclusive
environment, including raising the profile
of our diverse leaders and reflecting
diversity in our communication materials,
and we are proud to be signatories to the
Government’s Social Mobility Pledge which
facilitates employment of people from
disadvantaged backgrounds. Our latest
Peakon employee survey affirmed our
inclusive culture with an engagement
score of 8.1 in response to the diversity and
inclusion question.
During 2020 a working group was put
together to take a temperature check on
the status of diversity and inclusion within
the Group and to test the functioning
of the policy, seeking the views of
employees and putting forward a report
for ELT consideration, proposing new
initiatives and how those in progress could
be developed, reshaped or expanded.
It was concluded that there was no
single approach being taken across the
Group, that the agenda was being led
by motivated individuals engaging with
external groups and bodies, and that
communication could be improved.
The recommendations were approved for
implementation with overview from the
Committee and the Board and include:
• Establishing a more widely representative
permanent D&I working group
• Preparing a framework action plan for
the Social Mobility Pledge for launch and
implementation during 2021
• Partnering with external organisations
• Embedding D&I in the sustainability
agenda, with people and communities
at its heart
• D&I data collection, a diversity survey,
and implementing training for senior
management
Other actions and events in support of
the diversity and inclusion policy during
2020 included:
• Trainee Assistant Site Manager
Programme; Partnerships Management
Trainee Scheme; Apprenticeships;
Gender Pay Gap reporting; flexible
working in response to Covid-19;
enhanced maternity and paternity
pay; Partnerships focus on social value;
training of Mental Health First Aiders
(we now have over 70 across the
Group); advertisement of a broad range
of vacancies on workingmums.co.uk;
and engagement with external
D&I groups.
Non-executive directors’ service contracts
are renewed on a three-year basis, with
rigorous scrutiny being applied prior to
approval of a third three year term, subject
to satisfactory performance and there
being no need to re-balance the Board.
The third year of the third term extends
until the subsequent AGM.
Having served for six years, the Committee
considered the skills, knowledge and
expertise that Chris Browne brings
to the Board and examined their
ongoing relevance and her contribution,
performance and commitment,
following which a recommendation was
made to the Board that her service
contract be renewed for a third term.
Having served for three years, the
Committee considered the skills,
knowledge and expertise that Mike
Stansfield brings to the Board, together
with his contribution, performance and
commitment, and a recommendation
was made to the Board that his service
contract be renewed for a second term.
These recommendations were made in
light of the composition of the Board
as a whole.
Performance evaluation
An evaluation of the performance of the
Committee was undertaken by IBE as
part of the external board evaluation
for 2020, which was completed in
early 2021. As noted on page 127 the
operation of the Nomination Committee
will be one of the key areas of focus for
the Board in 2021. Feedback indicated that
participants would like more time given to
Committee meetings and that during 2021
it would look in more depth at:
• Board composition - this will include
the gender and ethnic make up of the
Board, in light of the requirements
of the Hampton Alexander and the
Parker Reviews. The skills and size
of Board most appropriate for the
expanded Group in light of the
strategy post integration will also
be under review.
• Succession Planning - the Committee
will review senior talent and
development thereof regularly and
oversee the desired progress on
diversity and inclusion at the Committee,
thus ensuring that it is fulfilling its
obligation to develop a diverse pipeline
of talent for the business. Succession
planning will also focus on Board
appointments - for executive directors,
and for the Chairman, where discussions
are ongoing.
Ian Tyler
Chairman of the Nomination Committee
4 March 2021
130 | Strategic report | Our business and strategy
Our governance
The Aspen | 5 bedroom home
Whitehouse Park, Milton Keynes
Delivering
high quality
homes
Vistry Group PLC | vistrygroup.co.uk | 131
Directors’ report
The directors have pleasure in
submitting their annual
report for the year ended
31 December 2020.
Other disclosures made in the
Annual Report
The Company is required to disclose
certain information in its directors’ report
which the directors have chosen to
disclose elsewhere in the Annual Report
and is incorporated by reference.
Details of where this information can
be found are set out below:
Research and development
We continue to undertake research and
development to improve the processes,
materials and products used in the
construction of our developments and
to enhance the energy efficiency of our
range of homes.
We have formed several internal Planning
and Technical steering groups which
are attended by our internal subject
matter experts and external partners
which shape process, share learning and
continuously develop the Vistry business.
Details of directors’ pay, pension
rights, service contracts and directors’
interests in the ordinary shares of the
Company are included in the Directors’
Remuneration Report on pages
104 to 122.
Dividends
Pursuant to the Acquisition, the
Company returned value to its
shareholders by way of a bonus issue
through the issuance of 5,665,723.
Shareholders received 0.03819 bonus
issue shares for every 1 share held on
2 January 2020.
10 to14
Annual General Meeting
Likely future developments in the business
Important events since the year end
Going concern statement
Financial risk management
Directors’ interests
Stakeholder engagement
Employee involvement / employment of disabled persons
188
48
164
112
58 to 64
24 to 31
Greenhouse gas emissions, energy consumption and energy efficiency action
38
Corporate governance report
Directors’ remuneration
Subsidiaries and associated undertakings
84 to 101
104 to 122
189 to 191
Directors’ names and
functions are listed on
pages 82 and 83
Notice of the 2020 Annual
General Meeting pages
193 to 199
132 | Our governance
Our focus in 2021 is to develop our
roadmap towards Net-Zero with our
industry partners and the interim step
changes to be at the forefront and to
reduce our climate impact at scale.
Disclosure of information under
Listing Rule 9.8.4R
There is no further information to be
disclosed in accordance with Listing
Rule 9.8.4R.
Directors
Details of the directors and their
biographies are shown on pages
82 to 83.
Graham Prothero was appointed
as an executive director and the
Company’s Chief Operating Officer
on 3 January 2020.
In accordance with the UK Corporate
Governance Code, all the directors
will retire at the 2021 Annual General
Meeting and, being eligible, offer
themselves for re-appointment.
Our 2021 AGM will be held on
Monday, 17 May 2021. We are
closely monitoring the ongoing
impact of Covid-19 and any
developments in UK regulation
which may affect the arrangements
for the AGM. Further details about
the AGM is provided in the Notice
of AGM on pages 193 to 199.
Members wishing to vote should
return forms of proxy to the
Company’s Registrar not less than
48 hours, (excluding non-working
days), before the time for holding
the meeting.
The directors believe that all the
resolutions to be considered at
the Annual General Meeting are in
the best interests of the Company
and its shareholders as a whole.
The directors unanimously
recommend that all shareholders
vote in favour of the resolutions, as
the directors intend to do in respect
of their own shares in the Company.
The Board postponed all dividend
payments for 2020 due to the
uncertainty surrounding the impact of
Covid-19. The Board returned value to
its shareholders via a bonus issue of
4,369,992 ordinary shares valued at £60
million based on a share price of £13.73
to shareholders on the register as at the
close of business on 27 December 2019.
The bonus issue was made on 15 July
2020 and each qualifying shareholder
received 0.02945974 bonus issue share
for each existing share.
The Board proposes to pay, subject to
shareholder approval at the 2021, a final
dividend of 20p (2019: 61.5p) per share
in respect of the 2020 financial year on
17 May 2021 to shareholders on the
register at the close of business on
26 March 2021.
The Company operates a dividend
reinvestment plan which gives
shareholders the opportunity to
reinvest dividends.
Section 172 statement
The directors have an obligation to act
in accordance with the duties set out in
section 172 of the Companies Act 2006,
which provide that they must act in the
way they consider, in good faith, would
be most likely to promote the success
of the Company for the benefit of its
shareholders as a whole and, in doing so,
have regard (amongst other matters) to:
• the likely consequences of any
decisions in the long term
• the interests of the Company’s
employees
• the need to foster the Company’s
business relationships with suppliers,
customers and others
• the impact of the Company’s
operations on the community
and environment
• the desirability of the Company
maintaining a reputation for high
standards of business conduct
• the need to act fairly as between
shareholders of the Company
The directors consider that they have
acted in accordance with their duties
under s.172 in the decisions taken during
the year ended 31 December 2020.
The s.172 Statement at pages 58 to 64
identifies the key steps we have taken to
engage with our stakeholders and the
outcomes of our engagement.
Directors’ indemnities
During the financial year and as at the
date of this report, indemnities were
in force under which the Company has
agreed to indemnify the directors, to
the extent permitted by law and the
Company’s Articles of Association, in
respect of all losses arising out of, or in
connection with, the execution of their
powers, duties and responsibilities, as
directors of the Company or any of
its subsidiaries.
The Company’s subsidiary, Vistry Homes
Limited, has granted a qualifying pension
scheme indemnity to the directors of the
Pension Trustee to the extent permitted
by law in respect of all losses arising out
of, or in connection with, the execution of
their powers, duties and responsibilities
as directors of the Pension Trustee.
Powers of the directors
Subject to the Company’s Articles
of Association, UK legislation and
any directions given by special
resolution, the business of the
Company is managed by the Board,
which may exercise all the powers
of the Company. The directors
have been authorised to allot and
issue ordinary shares and to make
market purchases of the Company’s
ordinary shares and these powers
may be exercised under authority of
resolutions of the Company passed
at its Annual General Meeting.
The rules in relation to the
appointment and replacement
of directors are set out in the
Company’s Articles of Association.
Articles of Association
Unless expressly specified to the contrary
in the Articles of Association, they may
only be amended by a special resolution
of the Company’s shareholders at a
general meeting.
Share capital
The Company has a premium listing
on the London Stock Exchange.
As at 4 March 2021, its share capital
comprised 222,255,324 fully paid
Ordinary Shares of 50 pence each.
Our governance
At the Company’s 2020 AGM, the
directors were authorised to:
• allot shares in the Company or grant
rights to subscribe for, or convert, any
security into shares up to an aggregate
nominal amount of £36,254,373;
• allot shares up to an aggregate
nominal amount of £72,508,746 for
the purpose of a rights issue; and
• make market purchases up to
21,774,398 shares in the Company
(representing approximately 10% of
the Company’s issued share capital at
the time).
Shareholders will be asked to renew
similar authorities at the 2021 AGM.
During the year the Company allotted
73,914,827 shares in connection with
the following:
• the bonus and consideration shares
issued pursuant to the Acquisition of
the Linden Homes and Partnerships
& Regeneration businesses of
Galliford Try;
• the bonus shares issued in place of
the postponed dividend to
shareholders; and
• the exercise of options under the
Company’s employee share plans.
The Employee Benefit Trust purchased
509,136 shares and received 24,890
bonus shares during the year.
The Company has not held any shares in
treasury during the period under review.
All issued shares are fully paid and free
from any restrictions on their transfer,
except where required by law, such as
insider trading rules. The rights and
obligations attaching to the Company’s
ordinary shares are set out in the
Company’s Articles of Association,
copies of which can be obtained from
Companies House in the UK or by writing
to the Group Company Secretary.
Shareholders are entitled to attend,
speak and vote at general meetings of
the Company, to appoint one or more
proxies and, if they are corporations, to
appoint corporate representatives.
Vistry Group PLC | vistrygroup.co.uk | 133
Directors’ report
On a show of hands at a general meeting
of the Company every shareholder
present in person or by proxy and
entitled to vote has one vote and on a
poll every shareholder present in
person or by proxy and entitled to
vote has one vote for every ordinary
share held. Further details regarding
voting, including the deadlines for voting,
at the Annual General Meeting can be
found in the notes to the Notice of the
Annual General Meeting at the back
of this Annual Report and Accounts.
No shareholder is, unless the Board
decides otherwise, entitled to attend or
vote either personally or by proxy at a
general meeting or to exercise any other
shareholder rights if he or any person
with an interest in shares has been
sent a notice under section 793 of the
Companies Act 2006 and has failed to
supply the Company with the requisite
information within the prescribed period.
Shareholders may receive a dividend and,
on a liquidation, may share in the assets
of the Company. None of the ordinary
shares of the Company, including those
held by the Company’s share schemes,
carry any special rights with regard to
control of the Company.
Substantial shareholdings
Employees participating in the Vistry
Group Share Incentive Plan may direct
the trustee to exercise voting rights on
their behalf at any general meeting but
are not required to do so.
The instrument of transfer of a
certificated share may be in any usual
form or in any other form which the
Board may approve.
The Board may refuse to register any
instrument of transfer of a certificated
share which is not fully paid, provided
that the refusal does not prevent
dealings in shares in the Company
from taking place on an open and
proper basis. Certain employees and
officers of the Company must conform
to the Company’s share dealing rules;
these restrict the ability to deal in the
Company’s shares at certain times and
require permission to deal. The Board
may also refuse to register a transfer of a
certificated share unless the instrument
of transfer: (i) is lodged, duly stamped (if
stampable), at the registered office of the
Company or any other place decided by
the Board accompanied by the certificate
for the share to which it relates and
such other evidence as the Board may
reasonably require to show the right of
the transferor to make the transfer;
(ii) is in respect of only one class of
shares; and (iii) is in favour of not more
than four transferees. Transfers of
uncertificated shares must be carried
out using the relevant system and the
Board can refuse to register a transfer
of an uncertificated share in accordance
with the regulations governing the
operation of the relevant system and
with UK legislation. There are no other
limitations on the holding of ordinary
shares in the Company and the Company
is not aware of any agreements between
holders of securities that may result in
restrictions on the transfer of securities
or on voting rights.
Political donations
No political donations were made during
the year ended 31 December 2020
(2019: nil). The Group has a policy of not
making donations to political parties or
incurring political expenditure.
As at 31 December 2020, the following interests of 3% or more in the Company’s issued share capital had been notified to the Company:
Ordinary shares of 50p each
BlackRock, Inc.
Dimensional Fund Advisors
Schroders plc
Prudential plc group of companies
Royal London Asset Management Limited
Norges Bank
Standard Life Aberdeen plc group of companies
% direct
holding
% indirect
holding
% financial
instruments
Total number of
shares held
-
-
-
-
4.14
3.45
-
5.57
4.98
4.96
4.73
-
-
< 5%
0.16
12,747,675
-
-
11,069,044
6,680,423
0.20
6,644,963
-
5,567,004
0.05
-
7,615,514
< 5%
% of voting
rights of
the issued
share capital
5.73
4.98
4.96
4.93
4.14
3.50
< 5%
The percentage interests stated above are as disclosed at the date on which the interests were notified to the Company.
Between 1 January and 4 March 2021, the following interests in the Company’s issued share capital were notified to the Company:
Ordinary shares of 50p each
Norges Bank
% direct
holding
2.83
% indirect
holding
% financial
instruments
Total number of
shares held
% of voting
rights of
the issued
share capital
-
-
6,305,221
2.83
134 | Our governance
Takeover directive
On a change of control, provisions in
the Group’s syndicated banking facility
agreements (described in note 4.2 to
the accounts) would allow lenders to
withdraw the facility.
All of the Group’s share schemes
contain provisions relating to a change
of control. Under these provisions, a
change of control would be a vesting
event, allowing exercise of outstanding
options and awards, subject to
satisfaction of performance conditions,
as required.
There are a number of commercial
contracts that could alter in the
event of a change of control. None is
considered to be material in terms of
their potential impact on the Group in
this event.
Auditors
Each person who is a director at the date
of approval of this report confirms that:
• so far as the director is aware, there is
no relevant audit information of
which the Company’s auditors are
unaware; and
• each director has taken all the steps that
they ought to have taken as a director to
make themselves aware of any relevant
audit information and to establish that
the Company’s auditors are aware of
that information.
This confirmation is given and should
be interpreted in accordance with the
provisions of section 418 of the Companies
Act 2006.
Following an audit tender process
conducted at the end of 2014,
PricewaterhouseCoopers LLP were
appointed as auditor at the 2015 AGM.
In accordance with the provisions of
the Companies Act 2006, resolutions
concerning the re-appointment of
PricewaterhouseCoopers LLP and their
remuneration will be placed before the
2021 Annual General Meeting.
Statement of directors’ responsibilities
The directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
law and regulation. Company law
requires the directors to prepare financial
statements for each financial year.
Under that law the directors have
prepared the Group and Company
financial statements in accordance with
international accounting standards in
conformity with the requirements of the
Companies Act 2006. Additionally, the
Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules require
the directors to prepare the Group
financial statements in accordance with
international financial reporting standards
adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the
European Union.
Under company law, directors must not
approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and Company and of the profit or loss of
the Group for that period. In preparing
the financial statements, the directors are
required to:
• select suitable accounting policies and
then apply them consistently;
• state whether, for the Group and
Company, international accounting
standards in conformity with the
requirements of the Companies Act
2006 and, for the Group, International
Financial Reporting Standards adopted
pursuant to Regulation (EC) No
1606/2002 as it applies in the European
Union have been followed, subject to
any material departures disclosed and
explained in the financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and Company will continue in business.
The directors are also responsible for
safeguarding the assets of the Group
and Company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group’s
and Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Group and
Company and enable them to ensure
that the financial statements and the
Directors’ Remuneration Report comply
with the Companies Act 2006.
Our governance
The directors are responsible for the
maintenance and integrity of the
Company’s website. Legislation in
the United Kingdom governing the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.
Directors’ confirmations
The directors consider that the Annual
Report, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the Group’s and Company’s
position and performance, business model
and strategy.
Each of the directors, whose names and
functions are listed in pages 82 to 83 of
the Annual Report confirm that, to the best
of their knowledge:
• the Group and Company financial
statements, which have been
prepared in accordance with IFRSs
as adopted by the European Union,
give a true and fair view of the assets,
liabilities, financial position and
profit of the Group and profit of the
Company; and
• the Strategic Report includes a fair
review of the development and
performance of the business and the
position of the Group and Company,
together with a description of the
principal risks and uncertainties
that it faces.
In the case of each director in office at the
date the directors’ report is approved:
• so far as the director is aware, there is
no relevant audit information of which
the Group’s and Company’s auditors are
unaware; and
• they have taken all the steps that they
ought to have taken as a director in
order to make themselves aware of
any relevant audit information and
to establish that the Group’s and
Company’s auditors are aware of
that information.
By Order of the Board
M T D Palmer
Group Company Secretary
4 March 2021
Vistry Group PLC
Registered number 306718
Vistry Group PLC | vistrygroup.co.uk | 135
Auditors’ report
Independent auditors’ report to the members of Vistry Group PLC
Report on the audit of the financial statements
Opinion
In our opinion, Vistry Group PLC’s Group financial statements and Company financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2020 and of the Group’s and
Company’s profit and the Group’s and Company’s cash flows for the year then ended;
• have been properly prepared in accordance with international accounting standards in conformity with the requirements of the
Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual report and accounts (the “Annual Report”), which comprise: the
Group and Company Balance sheets as at 31 December 2020; the Group income statement and Group statement of comprehensive
income, the Group and Company Statements of cash flows, and the Group and Company statements of changes in equity for the year
then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to international financial reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union
As explained in note 1.2 to the Group financial statements, the Group, in addition to applying international accounting standards in
conformity with the requirements of the Companies Act 2006, has also applied international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
In our opinion, the Group financial statements have been properly prepared in accordance with international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the Group.
Other than those disclosed in note 2.1 to the financial statements, we have provided no non-audit services to the Group in the period
under audit.
Our audit approach
Context
During the year, the Group completed a significant acquisition, purchasing the housebuilding and partnership development businesses
from Galliford Try PLC, which significantly increased the size of the Group. This has principally impacted our audit in respect of the
determination of materiality and the work performed over revenue within the Partnerships division, as detailed within the ‘Long-term
contract accounting’ key audit matter below.
Overview
Audit scope
• The Group principally operates through two trading divisions, being Housebuilding (made up of 13 regions) and Partnerships
(made up of 10 regions). We have performed a full scope audit of each division, which together account for 100% of the revenue
of the Group.
• At the parent entity level, we audited the Company and tested the consolidation process.
136 | Our governance
Our governance
Key audit matters
• Margin forecasting and recognition (Group)
• Long-term contract accounting (Group)
• Carrying value of inventory (Group)
• Impact of the Covid-19 pandemic (Group and Company)
Materiality
• Overall Group materiality: £13,500,000 (2019: £9,400,000) based on professional judgement considering a number of potential
benchmarks, including 5% of a three year average pro-forma profit before tax and exceptional items, based on publicly
available information for the businesses that comprise the enlarged Group.
• Overall Company materiality: £15,000,000 (2019: £6,500,000) based on 1% of total assets.
• Performance materiality: £10,125,000 (Group) and £11,250,000 (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to health and safety regulation (including the requirements of The Health and Safety at Work etc Act 1974), NHBC
standards and other building regulations, employment law and regulation, UK tax legislation, pensions legislation and the Listing Rules,
and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered
those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue
or reduce expenditure and management bias within accounting estimates, in particular the potential manipulation of the margin to be
recognised on a particular site or contract. Audit procedures performed by the engagement team included:
• Discussions with management, internal audit and the Group’s legal team, including discussions in respect of known or suspected
instances of non-compliance with laws and regulation and fraud, and review of board minutes and internal audit reports;
• Evaluation and testing of the operating effectiveness of management’s key controls around the forecasting of costs and margin estimation;
• Challenging assumptions and judgements made by management in their significant accounting estimates, in particular those that
involve the assessment of future events, which are inherently uncertain – the key estimates determined in this respect are those
relating to the forecasting of costs and margin estimation; and
• Identifying and testing journal entries, in particular testing a sample of journal entries posted with unusual account combinations,
such as those with unusual or unexpected journal postings to the income statement, or those which are re-allocating costs between
sites which may be indicative of costs being transferred to more profitable sites so as to avoid potential impairments or issues
being identified.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Long-term contract accounting and Impact of the Covid-19 pandemic are new key audit matters this year. Otherwise, the key audit
matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Margin forecasting and recognition (Group)
Refer to page 126 of the Audit committee report
(‘Significant areas’) and note 1.6 of the financial statements
(‘Critical accounting judgements and key sources of
estimation uncertainty’).
The Group’s margin forecasting and recognition system is based
on a number of key assumptions including:
• Build costs, allocated to each plot based on the Group’s site
wide margin model;
• Land costs and central site costs, including infrastructure
costs, allocated to each plot based on the Group’s site wide
margin model; and
• Sales price, based on an expected sales price for the type and
size of property.
Periodic surveyor and financial appraisals are performed to
determine the costs to date and work in progress, based upon
the stage of completion of each unit, with the accounting
records updated accordingly.
If the overall site is loss-making then management consider this
as part of the land write down provisioning process.
There is estimation uncertainty within the above assumptions
from potential changes in the market conditions or unforeseen
circumstances, in particular given that these assumptions
involve the assessment of future events, which are inherently
uncertain. As a result, the forecast assumptions could be
inaccurate and thus an incorrect margin may be recognised on
a given site.
We assessed the basis of revenue recognition to ensure it is in
line with applicable accounting standards.
At a regional level, we tested the design and operating
effectiveness of management’s key forecasting and monitoring
controls. This included observation of all year end site review
meetings attended by senior management, including those
from the Commercial and Finance teams, in order to obtain
evidence regarding the accuracy and completeness of forecast
costs and the consistency of the operation of this control
across the regions.
We compared the actual revenue and costs for completed sites
against the original forecast for that site. Where significant
differences were identified, we sought to understand the
nature of the event that caused this difference to arise, such
as due to a change in the plan for the site or an error within
management’s forecast. This procedure was performed to
gain assurance in respect of the accuracy of management’s
estimation methodology.
We attended surveyor valuation assessments at a sample of
sites to obtain evidence over the existence of inventory, as
well as the basis for the valuation of costs incurred used within
margin forecasting.
We tested a sample of actual costs incurred to third party
evidence and tested a sample of forecast costs to either third
party evidence or other appropriate support.
We read the minutes from a sample of surveyor meetings
held in January 2021 to check the completeness of site costs
recognised at 31 December 2020.
We tested a sample of forecast sales prices to the actual sales
prices attained to support the validity of these sales prices.
We tested that the system correctly recalculated site margins
to reflect the latest forecast revenue and costs.
We performed testing over journals that moved costs
between projects.
Based on the procedures performed, we did not identify any
material misstatements within the revenue and costs, and
therefore margin, recognised.
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Our governance
Key audit matter
How our audit addressed the key audit matter
Long-term contract accounting (Group)
Refer to page 126 of the Audit committee report
(‘Significant areas’) and note 1.6 of the financial statements
(‘Critical accounting judgements and key sources of
estimation uncertainty’).
Following the acquisition, the Group has a large number of
contracts which span multiple periods and are accounted for on
a percentage of completion basis, in accordance with IFRS 15.
Long term contracting accounting requires a number of
judgements and management estimates to be made,
including to:
• estimate total contract costs;
• estimate the stage of completion of the contract;
• forecast the profit margin;
• consider contract variations and the outcome of claims to the
extent that it is highly probable that a significant reversal of
revenue will not occur; and
• appropriately provide for loss making contracts, with
judgement required to determine the magnitude of any
provision required.
There is estimation uncertainty within the above assumptions
from potential changes in the market conditions or
unforeseen circumstances, in particular given that these
assumptions involve the assessment of future events, which
are inherently uncertain. As a result, the forecast assumptions
could be inaccurate and thus an incorrect revenue or profit
may be recognised on a given contract.
We assessed the basis of revenue recognition to ensure it is in
line with applicable accounting standards.
We evaluated the design and operating effectiveness of
key controls in place over long-term contracts, including
observation of all year end site review meetings attended by
senior management, including those from the Commercial
and Finance teams, in order to obtain evidence regarding the
accuracy and completeness of forecast costs.
We performed risk assessment procedures over the
contracts in place in order to determine those considered
to be higher risk, with these being subject to the following
testing procedures:
• We reviewed the movements in revenue and cost (and
therefore margin) across all projects during the year, as well
as the movement in margin recognised on those contracts
that had completed during the year. Where significant
differences were identified, we sought to understand the
nature of the event that caused this difference to arise,
such as due to a change in the plan for the project or an
error within management’s forecast. This procedure was
performed to gain assurance in respect of the accuracy of
management’s estimation methodology.
• We agreed overall anticipated revenue to a combination
of the underlying contract and agreed variations, with
corroborative evidence obtained to support the fact that
any variations, claims or liquidated damages were highly
probable to not reverse.
• We obtained evidence to corroborate management
estimates and judgements, particularly around forecast
costs for which a sample of such costs (focused on those
categories of cost we considered to be higher risk, due to a
combination of their quantum and the level of judgement
required by management) were agreed to appropriate
supporting evidence.
• We recalculated revenue recognised and agreed both
revenue and costs to the underlying general ledger.
• We validated costs incurred and allocated to contracts
during the year to third party supplier invoices and
performed testing over journals that moved costs
between projects.
For the remaining untested lower risk contracts, we performed
analytical procedures at both a regional and contract level in
order to identify any movements that differed significantly
to our expectation. We also performed testing over a sample
of revenue and costs, obtaining third party evidence for the
amounts recognised.
We agreed contract loss provisions recorded based on the
overall outcome anticipated on the contract through a
combination of the procedures above.
Based on the procedures performed, we did not identify
any material misstatements within the revenue and
costs recognised.
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Key audit matter
How our audit addressed the key audit matter
Carrying value of inventory (Group)
Refer to page 126 of the Audit committee report
(‘Significant areas’) and note 1.6 of the financial statements
(‘Critical accounting judgements and key sources of
estimation uncertainty’).
As set out in note 3.1, the inventory balance at 31 December
2020 was £1,836,521,000. Inventory is comprised of land held
for development, work in progress (WIP), raw materials and
consumables, completed plots and part exchange properties.
Land held for development and raw materials are held at cost.
WIP is made up of the cost of the land being built on, direct
materials, direct labour costs and those overheads that have
been incurred in bringing the inventories to their present
location and condition. Completed plots are held at build cost
and part exchange properties are held at the market value
determined at the time of legal completion.
Inventories are stated at the lower of cost and net realisable
value, where net realisable value is the estimated net selling
price less costs to sell and estimated total costs of completion
based on management’s forecast.
As the most significant balance on the Group Balance sheet,
there is an increased risk of material misstatement in the cost
of inventory. In addition, due to the cyclical nature of the
housing industry or issues experienced during the build
programme, there is a risk that the net realisable value of the
inventory is lower than cost and therefore inventory is held at
the incorrect value.
The procedures set out above for the ‘Margin forecasting and
recognition’ key audit matter are also relevant to auditing the
carrying value of inventory.
In addition to those procedures outlined above, we have also
examined margins for all major sites to identify those with
low or eroding margins, for example due to specific issues or
under performance. We discussed the identified sites with
management, including considering the level of provisions
held against these sites and, if material, corroborated the
explanations to support the carrying value of inventory.
We evaluated the quantum and ageing of part exchange
properties and challenged the recoverability of these assets.
We checked that appropriate site acquisition approvals
had been obtained for significant sites, with this including
consideration of site profitability.
Based on the procedures performed we did not identify
any sites where the carrying value of inventory was
materially misstated.
Impact of the Covid-19 pandemic (Group and Company)
Refer to page 126 of the Audit committee report
(‘Significant areas’) and note 1.6 of the financial statements
(‘Critical accounting judgements and key sources of
estimation uncertainty’).
Since the outbreak of Covid-19, the Group and Company have
continued to operate and trade, albeit there was a period when
construction stopped for five weeks during March 2020 and
April 2020, with the pandemic therefore impacting the financial
results of the Group for the year.
Management has considered the impact of Covid-19 on the
financial statements, with these considerations principally
relating to the ability of the Group and Company to continue as
a going concern, the potential impairment of intangible assets,
including goodwill, and the impact on forecast revenue and costs
at an individual site or contract level.
Disclosure of the risk to the Group and Company of the impact
of Covid-19, and management’s conclusions on going concern
and viability, have been included within the relevant sections of
the financial statements.
In advance of the year end, and throughout the course of our
audit procedures, we assessed the risks arising from Covid-19.
We focused on areas where significant additional audit effort
might be required, as well as those areas that we considered
might be susceptible to a material financial impact on the
performance and position of the Group and Company for the
year ended 31 December 2020.
We assessed the base case going concern model prepared by
management which includes the anticipated future impacts of
Covid-19, as well as the downside scenarios which have been
used to sensitise the base case model.
In relation to the base case model, we have agreed the key
inputs back to Board approved budgets and have considered
the historical accuracy of the budgeting process to assess the
reliability of the data.
Specifically, in relation to the potential future impact of Covid-
19 and the severe but plausible downside modelling conducted
by management, we have obtained management’s forecasts.
We have assessed the underlying assumptions within these
forecasts, which principally focused on reduced affordability
of housing and therefore reduced demand or house prices,
including the use of sensitivity analysis to consider the impact
of changes in these assumptions on the forecasts.
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Our governance
Key audit matter
How our audit addressed the key audit matter
Impact of the Covid-19 pandemic (Group and Company) (continued)
In conjunction with the above, we have reviewed
management’s analysis of both liquidity and covenant
compliance to obtain sufficient comfort that the Group has
sufficient liquidity and that there are no covenant breaches
anticipated over the period of the assessment in either the
base case or the downside scenarios prepared.
We similarly considered the cash flow projections used
within the goodwill impairment model, in the context of the
potential impact of Covid-19 and analysis of management’s
historic forecasting accuracy, ensuring the consistency of
these projections to those reviewed through the procedures
performed over going concern.
We determined the extent to which a reduction in the cash
flow projections would result in an impairment of goodwill and
considered the likelihood of such events occurring and we did
not consider the likelihood of a material misstatement to be
reasonably possible.
We considered any potential impairment indicators to the
carrying value of other assets and the broader impact to the
Group and Company’s financial statements and did not identify
any material misstatements.
As part of the procedures outlined within the ‘Margin
forecasting and recognition’ and ‘Long-term contract
accounting’ key audit matters above, we also considered
whether the forecast margins across each site and contract
sampled so as to ensure that these appropriately reflected the
impact of Covid-19 (on both forecast revenue and costs).
We assessed the Covid-19 disclosures included in the financial
statements, and the appropriate classification of Covid-19
related costs, and consider them to be appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in
which they operate.
We have determined that the Group is made up of two components, being the Housebuilding division (made up of 13 regions) and the
Partnerships division (made up of 10 regions), which is consistent with both the determination of operating segments by the Board of
Directors and the way in which the business is managed, monitored and reported upon by management. Whilst these components
have different business models and different revenue recognition policies, each component operates with its own common control
framework across its respective regions. As a result, each component was allocated a separate materiality level, as outlined below,
and having validated the design, effectiveness and consistency of the controls in each component, was treated as an individually
homogenous population, with each financial statement line item being substantively tested in aggregate for the component in line with
the allocated materiality levels.
In respect of the joint ventures held by the Group, we performed full scope procedures in respect of two joint ventures and performed
procedures over certain financial statement line items within a further 11 joint ventures so as to obtain sufficient and appropriate
coverage over each such line item disclosed within note 5.8.
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These procedures, together with those performed at a Group level, including the audit of the consolidation and financial statement
disclosures, acquisition accounting, taxation, pension scheme balances and asset impairment assessments, provide us with the evidence
required for the purposes of our opinion on the financial statements as a whole.
All of the audit procedures performed were undertaken by the same (Group) engagement team.
The Company is principally a holding company and there are no branches or other locations to be considered when scoping the audit of
this entity.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
£13,500,000 (2019: £9,400,000).
£15,000,000 (2019: £6,500,000).
Financial statements – Group
Financial statements – Company
How we determined it
Rationale for benchmark applied
Based on 1% of total assets.
We believe that total assets is an
appropriate metric as it is the primary
measure used by the shareholders
in assessing the performance of
the Company and is a generally
accepted auditing benchmark for
non-trading entities. This materiality
relates to the audit for the statutory
entity only, as the Company was not
in scope for the Group audit.
Based on professional judgement considering a
number of potential benchmarks, including 5%
of a three year average pro-forma profit before
tax and exceptional items, based on publicly
available information for the businesses that
comprise the enlarged Group
We consider that the income statement
remains the principal measure used by the
shareholders in assessing the underlying
performance of the Group and therefore an
approach to materiality based on profit before
tax and exceptional items has been applied.
The use of current year profit before tax to
determine materiality is not considered to be
appropriate given that this measure has been
impacted by Covid-19 and does therefore
not reflect the earning capacity of the Group
or its asset base, particularly given the
significant acquisition that completed on
3 January 2020.
In our professional judgement, we have
therefore concluded that £13,500,000 is the
appropriate level at which to set materiality
based on a number of potential benchmarks,
such as revenue, total assets, current year
profit before tax and exceptional items and
principally the three year average pro-forma
profit before tax and exceptional items.
In particular, we consider that any
misstatements identified that are lower than
£13,500,000 in magnitude would not be
expected to influence the decisions made by
the users of the financial statements.
In the previous year, a benchmark set at 5%
of profit before tax and exceptional items was
used to determine materiality.
142 | Our governance
Our governance
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The materiality allocated to each component was £12,150,000.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit
and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% of overall materiality, amounting to £10,125,000 for the Group financial statements
and £11,250,000 for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls - and concluded that an amount in the middle of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £675,000
(Group audit) (2019: £470,000) and £750,000 (Company audit) (2019: £320,000) as well as misstatements below those amounts that,
in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis of
accounting included:
• assessing the inputs and underlying assumptions of the base case going concern model prepared by management which includes the
anticipated future impacts of Covid-19.
• assessing the downside scenarios which have been used to sensitise the base case model, including consideration of the underlying
assumptions within each of these forecasts (such as the affordability of housing and therefore reduced demand or house prices).
• reviewing management’s analysis of both liquidity and covenant compliance to ensure there is sufficient liquidity and no forecast
covenant breaches over the course of the going concern period.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the
Company’s ability to continue as a going concern.
In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any
form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement
of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
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Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors’ report for the year ended 31 December 2020 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement, included within the Corporate governance report is materially consistent with the financial statements and our knowledge
obtained during the audit, and we have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual report and accounts that describe those principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue
to do so over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers and why
the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an audit and
only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is
in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent
with the financial statements and our knowledge and understanding of the Group and Company and their environment obtained in the
course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for the members to assess the Group’s and Company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules
for review by the auditors.
144 | Our governance
Chief Executive’s review Our governance
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are
also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the
accounting records and returns; or
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 15 May 2015 to audit the financial
statements for the year ended 31 December 2015 and subsequent financial periods. The period of total uninterrupted engagement is 6
years, covering the years ended 31 December 2015 to 31 December 2020.
Matthew Mullins (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
4 March 2021
Vistry Group PLC | vistrygroup.co.uk | 145
Strategic report | Business overview Financial
statements
and notes
146 | Financial statements
Group income statement
For the year ended 31 December
Revenue
Cost of sales
Gross profit
Analysed as:
Adjusted gross profit
Other operating income
Exceptional cost of sales
Share of joint ventures’ gross profit
Gross profit
Administrative expenses including exceptional items
Other operating income
Operating profit
Analysed as:
Adjusted operating profit
Exceptional expenses
Amortisation of acquired intangibles
Share of joint ventures’ operating profit
Operating profit
Financial income
Financial expenses including exceptional items
Net financing costs including exceptional items
Share of profit of joint ventures
Profit before tax
Income tax expense including exceptional items
Profit for the year attributable to ordinary shareholders
Earnings per share
Basic
Diluted
Basic earnings per share (before exceptional items and amortisation of acquired intangibles)
Diluted earnings per share (before exceptional items and amortisation of acquired intangibles)
The restatement of 2019 earnings per share is explained in note 2.4.
Group statement of comprehensive income
For the year ended 31 December
Profit for the year
Other comprehensive expense
Items that will not be reclassified to the income statement
Remeasurements on defined benefit pension scheme
Deferred tax on remeasurements on defined benefit pension scheme
Total other comprehensive expense
Total comprehensive income for the year attributable to ordinary shareholders
Note
2.0
5.13
2.1
2.1
5.8
2.1
2.1
2.1
5.13
2.1
5.6
5.8
2.1
4.3
4.3
4.3
5.8
5.1
2.4
2.4
2.4
2.4
Note
5.10
5.1
2020
£000
2019
£000
1,811,727
1,130,768
(1,564,831)
(888,012)
246,896
242,756
318,765
(26,422)
(10,975)
(34,472)
246,896
(181,595)
26,422
91,723
171,023
(30,984)
(14,240)
(34,076)
91,723
18,232
(26,158)
(7,926)
14,867
98,664
(21,851)
76,813
2020
34.8p
34.7p
52.6p
52.5p
255,316
(10,675)
-
(1,885)
242,756
(73,710)
10,675
179,721
194,355
(12,846)
-
(1,788)
179,721
813
(7,569)
(6,756)
1,788
174,753
(36,374)
138,379
2019
(restated)
94.6p
94.5p
104.3p
104.2p
2020
£000
2019
£000
76,813
138,379
(11,654)
2,124
(9,530)
67,283
(2,116)
464
(1,652)
136,727
Vistry Group PLC | vistrygroup.co.uk | 147
Balance sheets
As at 31 December
Assets
Goodwill
Intangible fixed assets
Property, plant and equipment
Right-of-use assets
Investments
Amounts recoverable from joint ventures
Trade and other receivables
Restricted cash
Deferred tax assets
Retirement benefit asset
Total non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current tax asset
Total current assets
Total assets
Equity
Issued capital
Share premium
Merger reserve
Retained earnings
Total equity attributable to equity holders of the parent
Liabilities
Bank and other loans
Trade and other payables
Lease liabilities
Provisions
Deferred tax liability
Total non-current liabilities
Bank and other loans
Trade and other payables
Lease liabilities
Provisions
Current tax liabilities
Total current liabilities
Total liabilities
Note
5.7
5.6
5.4
5.5
5.8
5.11
3.2
4.1
5.2
5.10
3.1
3.2
4.1
5.2
4.4
4.4
4.2
3.3
5.5
5.9
5.2
4.2
3.3
5.5
5.9
5.2
Group
2020
£000
547,509
143,585
5,091
38,511
145,153
323,650
1,544
1,193
-
9,077
Company
2020
£000
-
-
-
-
2019
£000
-
-
-
1,250,378
14,153
-
-
-
-
-
-
-
-
-
-
2019
£000
-
4,336
1,845
21,347
85,129
6,232
1,090
1,748
184
4,506
1,215,313
126,417
1,250,378
14,153
1,836,521
1,207,667
-
-
225,022
340,988
14,350
2,416,881
3,632,194
111,127
360,657
823,513
899,785
2,195,082
253,103
139,316
26,848
33,786
17,637
99,142
361,962
-
1,668,771
1,795,188
74,169
359,857
-
837,940
1,271,966
-
122,940
16,686
-
-
470,690
139,626
50,000
894,503
15,304
6,615
-
966,422
1,437,112
-
352,359
6,309
3,989
20,939
383,596
523,222
276,048
642,380
344
-
276,392
1,526,770
111,127
360,657
823,513
227,890
1,523,187
-
781
-
-
-
781
-
-
-
-
2,802
2,802
3,583
344
-
642,724
656,877
74,169
359,857
-
220,115
654,141
-
781
-
-
-
781
-
-
-
-
1,955
1,955
2,736
Total equity and liabilities
3,632,194
1,795,188
1,526,770
656,877
The Company made a profit for the year of £10,052,000 (2019: £118,332,000). These financial statements on pages 147 to 192 were approved by
the Board of directors on 4 March 2021 and were signed on its behalf: Earl Sibley, Director.
148 | Financial statements
Group statement of changes in equity
For the year ended 31 December 2019
Note
Own
shares
held
£000
Other
retained
earnings
£000
Total
retained
earnings
£000
Issued
capital
£000
Share
premium
£000
Merger
reserve
£000
Balance at 1 January 2019
Profit for the year
Total other comprehensive expense
Total comprehensive income
IFRS16 opening adjustment
Issue of share capital
Deferred tax on share-based payments
Share-based payments
Dividends paid to shareholders
Total transactions with owners
recognised directly in equity
Balance at 31 December 2019
Balance at 1 January 2020
Profit for the year
Total other comprehensive expense
Total comprehensive income
Issue of share capital
Shares issued as consideration
Bonus issue
LTIP shares exercised
Purchase of own shares
Share-based payments
Deferred tax on share-based payments
Total transactions with owners
recognised directly in equity
Balance at 31 December 2020
4.4
5.1
5.3
2.3
4.4
4.4
4.4
5.3
5.1
(3,620)
780,382
776,762
67,398
216,907
-
-
-
-
-
-
-
-
-
138,379
138,379
(1,652)
(1,652)
136,727
136,727
65
-
140
65
-
140
2,891
2,891
(78,645)
(78,645)
-
-
-
-
-
-
-
-
6,771
142,950
-
-
-
-
-
-
(75,549)
(75,549)
6,771
142,950
(3,620)
841,560
837,940
74,169
359,857
-
-
-
-
-
-
-
-
-
-
-
Total
£000
1,061,067
138,379
(1,652)
136,727
65
149,721
140
2,891
(78,645)
74,172
1,271,966
(3,620)
841,560
837,940
74,169
359,857
-
1,271,966
76,813
76,813
(9,530)
(9,530)
67,283
67,283
-
-
-
-
-
-
-
-
-
-
70
800
31,870
-
-
-
-
-
-
(5,018)
(5,018)
5,018
164
(164)
-
(3,500)
-
(3,500)
-
-
2,741
339
2,741
339
-
-
-
-
-
-
-
-
76,813
(9,530)
67,283
870
823,513
855,383
-
-
-
-
-
-
-
(3,500)
2,741
339
-
-
-
-
-
-
(3,336)
(2,102)
(5,438)
36,958
800
823,513
855,833
(6,956)
906,741
899,785
111,127
360,657
823,513
2,195,082
Company statement of changes in equity
For the year ended 31 December 2020
Balance at 1 January 2019
Total comprehensive income
Issue of share capital
Share-based payments
Dividends paid to shareholders
Balance at 31 December 2019
Balance at 1 January 2020
Total comprehensive income
Issue of share capital
Shares issued as consideration
Bonus issues
Share-based payments
Balance at 31 December 2020
Attributable to equity holders of the parent
Total
retained
earnings
£000
Issued
capital
£000
Share
premium
£000
Merger
reserve
£000
177,537
67,398
216,907
118,332
-
-
-
6,771
142,950
2,891
(78,645)
-
-
-
-
220,115
74,169
359,857
220,115
74,169
359,857
10,052
-
-
-
70
31,870
(5,018)
5,018
2,741
-
-
800
-
-
-
Total
£000
461,842
118,332
149,721
2,891
(78,645)
654,141
654,141
10,052
870
-
-
-
-
-
-
-
-
-
823,513
855,383
-
-
-
2,741
227,890
111,127
360,657
823,513
1,523,187
Vistry Group PLC | vistrygroup.co.uk | 149
Statements of cash flows
For the year ended 31 December
Note
Cash flows from operating activities
Profit for the year
Depreciation and amortisation
Financial income
Financial expense
Loss on disposal of property, plant and equipment
Equity-settled share-based payment expense
Income tax expense
Share of results of joint ventures
Profit released on sale of assets from joint ventures
5.4, 5.5, 5.6
4.3
4.3
5.1
5.8
Group
2020
£000
2019
£000
Company
2020
£000
2019
£000
76,813
31,710
(18,232)
26,158
15
2,741
21,851
(14,867)
(234)
138,379
10,052
118,332
6,253
(813)
6,939
3
2,891
36,374
(1,788)
(972)
-
-
(14,745)
(10,287)
-
-
-
-
-
-
2,800
1,955
-
-
-
-
Decrease / (increase) in trade and other receivables
17,894
(58,234)
(12,852)
(191,363)
Decrease in inventories
(Decrease) / increase in trade and other payables
Increase / (decrease) in provisions and retirement benefit assets
168,580
(97,208)
15,821
115,170
16,716
(8,629)
-
-
-
-
-
-
Cash generated from / (used in) operations
231,042
252,289
(14,745)
(81,363)
Interest paid
Income taxes paid
(14,661)
(34,712)
(2,093)
(33,804)
-
-
-
-
Net cash generated from / (used in) from operating activities
181,669
216,392
(14,745)
(81,363)
Cash flows from investing activities
Bank interest received
Acquisition of intangible fixed assets
Acquisition of property, plant and equipment
Acquisition of Linden and Partnerships net of overdraft acquired
Loans made to joint ventures
Loan repayments from joint ventures
Investments in joint ventures
Distributions from joint ventures
Decrease / (increase) in restricted cash
5.6
5.4
5.14
5.8
5.8
5.8
5.8
90
(109)
(2,632)
(394,578)
(17,869)
3,682
131
(3,706)
(565)
-
-
-
-
(58,511)
27,043
555
5,135
(368)
14,745
10,287
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net cash (used in) / generated from investing activities
(383,818)
(57,884)
14,745
10,287
Cash flows from financing activities
Dividends paid
Principal elements of lease payments
Net proceeds from the issue of share capital
Purchase of own shares
Drawdown of bank and other loans
Repayment of bank and other loans
Net cash generated from financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
150 | Financial statements
2.3
4.4
4.2
4.2
4.1
4.1
-
(78,645)
(15,325)
-
(3,500)
475,000
(275,000)
181,175
(20,974)
361,962
340,988
5,562
149,721
-
-
(36,401)
40,237
198,745
163,217
361,962
-
-
-
-
-
-
-
-
344
344
(78,645)
-
149,721
-
-
-
71,076
-
344
344
Notes to the financial statements
The notes have been grouped into sections under five key categories:
1. Basis of preparation
2. Result for the year
3. Land bank and other operating assets and liabilities
4. Financing
5. Other disclosures
The key accounting policies have been incorporated throughout the notes to the financial statements adjacent to the disclosure to which
they relate. All accounting policies are included within an outlined box.
1.0 Basis of preparation
1.1 General information
Vistry Group PLC (the “Company”) is a public company, limited by shares, domiciled in England, United Kingdom. The consolidated financial
statements of the Company for the year ended 31 December 2020 comprise the Company and its subsidiaries (together referred to as the
“Group”) and the Group’s interest in joint ventures. The financial statements were authorised for issue by the directors on 4 March 2021.
The registered office for Vistry Group PLC is 11 Tower View, West Malling, Kent, ME19 4UY.
1.2 Basis of accounting
The financial statements of the Company and the consolidated financial statements of the Group have been prepared in accordance with the
international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 to not present the Company income statement
and statement of comprehensive income.
The Group has applied the following standards for the first time for its annual reporting year commencing 1 January 2020:
• Amendment to IAS 1 ‘Presentation of financial statements’, effective 1 January 2020.
• Amendment to IAS 8 ‘Accounting policies, changes in accounting estimates and errors’, effective 1 January 2020.
• Amendment to IFRS3, ‘Definition of a business’, effective 1 January 2020.
These changes have not had a material impact on the Group’s financial statements.
In accordance with section 612 of the Companies Act 2006, advantage is taken of the relief from the requirement to create a share premium
account to record the excess over the nominal value of shares issued in a share for share transaction. Where the relevant requirements of section
612 of the Companies Act 2006 are met, the excess of any nominal value is credited to a merger reserve which is distributable.
All other accounting policies have been applied consistently to the Company and the Group.
The income statement has been represented in order to more clearly present the financial results for the year ended 31 December 2020 and
comparative periods. This representation has had no impact on the underlying financial results.
The prior year EPS has been restated to include the impact of the bonus issue of 5.7m shares in January 2020 and 4.3m shares in July 2020.
The financial statements are prepared on the historical cost basis unless otherwise stated.
1.3 Going concern
In light of the Covid-19 pandemic, a revised cashflow forecast has been completed for the Group to confirm the appropriateness of the going
concern assumption in these accounts. The forecast was prepared using two scenarios – a likely base case including the expected impact of
Covid-19 and a severe but plausible downside sensitivity scenario.
In the severe but plausible downside sensitivity scenario the following assumptions have been applied:
• A 15-20% reduction in private sales volumes, with a corresponding reduction in development spend
• A 5-10% reduction in private sales prices
The impact of these severe but plausible downsides are then mitigated by:
• Cessation of uncommitted land spend
• Reduction in overheads to reflect reduction in bonuses, temporary employee costs, etc.
In a severe but plausible downside scenario the delivery of affordable housing is not expected to be impacted as it will typically have been
contracted for delivery in advance to a Registered Social Landlord or similar entity. As such the volumes and prices for affordable housing are not
sensitised in the severe but plausible downside scenario.
In both the base and the severe but plausible downside sensitivity scenario, the forecasts indicated that there was sufficient headroom and
liquidity for the business to continue based on the facilities available to the Group as discussed in Note 4.2 to the financial statements. In each
of these scenarios the Group was also forecast to be in compliance with the required covenants on the aforementioned borrowing facilities.
Consequently, the Directors have concluded that using the going concern basis for the preparation of the financial statements is appropriate.
Vistry Group PLC | vistrygroup.co.uk | 151
Notes to the financial statements continued
The Board continues to take prudent decisions to best support the business through this period of uncertainty, including measures to protect
the Group’s cash position, liquidity and maintain a robust balance sheet. This includes the decision to postpone the second interim dividend
payment totalling c.£60m, to tightly manage working capital and to implement other specific measures to increase cash generation and reduce
cash outflow.
Having started the year with net cash of £362.0m, the Group generated a strong operating cash flow during 2020 and paid a net of £394.6m in
cash consideration for the Acquisition, as well as funded £14.1m into joint ventures.
As at 31 December 2020, the Group held cash and cash equivalents of £341.0m and had borrowings of £303.1m.
At 31 December 2020 the Group has borrowing facilities of £770m, including a 5 year committed revolving credit facility of £410m, a 3 year
revolving credit facility of £40m, £150m of 3 year term loans, a £100m US Private Placement facility and £70m of additional facilities. In addition,
Vistry Group has been confirmed as eligible for the CCFF, for borrowing of up to £300m.
1.4 Covid-19
In light of the Covid-19 outbreak in the year ended 31 December 2020 the Group has considered whether any impairment of goodwill, intangibles
or inventories is appropriate, and has concluded that none is required. Non-productive costs in the period driven by Covid-19 have been expensed
directly to the income statement and are not capitalised into WIP. The impact of Covid-19 on future profitability of sites has been reflected in the
net realisable value assessment of inventories and margins recognised at 31 December 2020.
1.5 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity.
In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date
on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases.
A joint arrangement is an arrangement over which the Group and one or more third parties have joint control. These joint arrangements are in
turn classified as:
• Joint ventures whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its
liabilities; and
• Joint operations whereby the Group has rights to the assets and obligations for the liabilities relating to the arrangement.
The consolidated financial statements include the Group’s share of the comprehensive income and expenses of its joint ventures on an equity
accounted basis and its share of income and expenses of its joint operation within the corresponding lines of the income statement, from the
date that joint control commenced.
1.6 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with adopted IFRSs requires management to make estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the
basis of carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
No individual judgements have been made that have a significant impact on the financial statements, other than those involving estimates, which
are outlined below.
Key sources of estimation uncertainty for the Group
Land held for development and housing work in progress
The Group holds inventories which are stated at the lower of cost and net realisable value. To assess the net realisable value of land held for
development and housing work in progress, the Group completes a financial appraisal of the likely revenue which will be generated when these
inventories are combined as residential properties for sale and sold. Where the financial appraisal demonstrates that the revenue will exceed
the costs of the inventories and other associated costs of constructing the residential properties, the inventories are stated at cost. Where the
assessed revenue is lower, the extent to which there is a shortfall is written off through the income statement leaving the inventories stated at a
realisable value.
152 | Financial statements
Notes to the financial statements continued
To the extent that the revenues which can be generated change, or the final cost to complete for the site varies from estimates, the net realisable
value of the inventories may be different. A review taking into account estimated achievable net revenues, actual inventory and costs to complete
as at 31 December 2020 has been carried out, and appropriate adjustments have been made to the carrying value of the provision.
These estimates were made by local management having regard to actual sales prices, together with competitor and marketplace evidence, and
were further reviewed by Group management. Should there be a future significant decline in UK house pricing, then further write-downs of land
and work in progress may be necessary. Further detail on the carrying value of inventories is laid out in note 3.1.
Management have performed a sensitivity analysis to assess the impact of a 3% decrease in estimated gross margin for all developments which
are expected to generate future revenues as this is considered to be a plausible downside scenario. This movement in margin would result in the
need to recognise an additional £3m of land write down provision, reducing the value of inventories on the balance sheet, and a corresponding
impact to gross profit, which would equate to a 20bps decrease in gross margin in 2020.
Margin recognition
The gross margin from revenue generated on each of the Group’s individual sites within the year is recognised based on the latest forecast for the
gross margin expected to be generated over the remaining life of that site. The remaining life gross margin is calculated using forecasts for selling
prices and all land, build, infrastructure and overhead costs associated with that site. There is inherent uncertainty and sensitivity to external
forces (predominantly house prices and labour costs) in these forecasts, which are reviewed regularly throughout the year by management and
are addressed on pages 48 to 55.
In order to calculate partner delivery revenue, the Group estimates the total revenue and total costs for the contract and derives the expected
margin. Revenue recognised is then calculated by taking the costs incurred in the period, plus the expected margin, for each contract.
The assessment of total costs to complete the contract requires estimation.
The Group has robust internal controls to review future revenue and cost estimates.
Management have performed a sensitivity analysis to assess the impact of a 3% increase in estimated costs for all active developments and a 1%
increase for all contracting sites which have recognised revenue in 2020, as this is considered to be a plausible downside scenario. This movement
in costs would result in an increase in cost of sales and therefore a decrease in gross profit of £33.1m and £4.4m for development and contracting,
respectively, in 2020, which would equate to a 210bps decrease in gross margin. Work in progress on the balance sheet would also decrease
by £33.1m.
Defined benefit pension scheme
The Group has three defined benefit pension schemes, all closed to future accrual, which are subject to estimation uncertainty. Note 5.10 outlines
the way in which these Schemes are recognised in the Group’s Financial Statements, the associated risks and sensitivity analysis showing the
impact of a change in key variables on the defined benefit assets/obligations.
1.7 Impact of standards and interpretations in issue but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2020 reporting periods and
have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
Vistry Group PLC | vistrygroup.co.uk | 153
Notes to the financial statements continued
2.0 Result for the year
Revenue
Development revenue
Revenue is recognised in the income statement when control of each home has passed to the purchaser, which is when legal title is
transferred. Revenue in respect of the sale of residential properties is recognised at the fair value of the consideration received or receivable,
net of value added tax and discounts, on legal completion. In certain instances, property may be accepted in part consideration for a sale of a
residential property.
The fair value of part exchange properties is established by independent surveyors, reduced for costs to sell. Net sale proceeds generated
from the subsequent sale of part exchange properties are recorded as an adjustment to cost of sales. The original sale is recorded in the
normal way, with the fair value of the exchanged property replacing cash receipts. Cash incentives are considered to be a discount from the
purchase price offered to the acquirer and are therefore accounted for as a reduction to revenue.
The Group applies its policy on contract accounting when recognising revenue and profit on contracts. Revenue and costs are recognised by
reference to the stage of completion of contract activity at the balance sheet date. This is normally measured by surveys of work performed
to date. When it is probable that the total costs on a construction contract will exceed total contract revenue, the expected loss is recognised
as an expense in the Income Statement immediately. The application of this policy requires estimates to be made in respect of the total
expected costs to complete for each site. The Group has in place established internal control processes to ensure that the evaluation of costs
and revenues is based upon appropriate estimates.
Where the Group provides design, construction and mobilisation activities on a development across multiple units simultaneously, this is
considered to represent one performance obligation. Where these services are provided across multiple development sites, each site is
typically considered to represent a distinct performance obligation.
Partner delivery revenue
Partner delivery revenue is recognised over time, as the value of the services are transferred to the customer during the period. For all
contracts, costs are expensed in the income statement as incurred.
In fixed price contracts, revenue is recognised based on the costs incurred as a percentage of total estimated costs to complete the contract.
In contracts where revenue is directly related to the costs incurred, revenue is recognised based on the costs incurred to date plus any
agreed fee or mark-up.
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time
value of money.
Sales to joint ventures
When the Group makes sales to joint ventures in which it owns an interest, it will only recognise revenue and profit in the period of the initial
transaction to the extent of third parties’ interests in the joint venture. The unrecognised element of revenue and profit will be deferred and
released to the income statement when the joint venture has sold the assets to which the original transaction with the Group related.
Land and other revenue
Revenue is recognised on land sales and commercial property sales from the point of unconditional exchange of contracts as long as there
are no significant obligations remaining. Where the Group still has significant obligations to perform under the terms of the contract,
revenue is recognised when the obligations are performed.
Partnership land transactions revenue is generated on land sales to housing associations where the Group will develop the sites in
partnership with the housing association.
154 | Financial statements
Notes to the financial statements continued
Revenue by type
Private housing
Affordable housing
Partner delivery revenue
Partnership land transactions
Land sales
Release of deferred revenue from joint ventures
Other
Total
Timing of revenue recognition
At a point in time
Over time
Total
2020
£000
1,152,281
146,972
489,507
2019
£000
897,017
170,379
-
-
42,432
17,243
187
5,537
6,811
7,766
6,363
1,811,727
1,130,768
1,094,377
717,350
930,986
199,782
1,811,727
1,130,768
The Group’s total revenue recognised in relation to contract liabilities shown in the table above is included within affordable housing revenue and
partner delivery revenue.
At 31 December 2020 the aggregate amount of the transaction price allocated to unsatisfied performance obligations on contracts was £788.0m
(2019: £311.5m), of which approximately £538.0m is expected to be recognised as revenue during 2021.
Assets and liabilities related to contracts with customers
The Group has recognised the following assets and liabilities relating to its existing contracts with customers:
Amounts recoverable on contracts
Payments on account
2020
£000
141,404
(96,414)
2019
£000
(restated)
42,829
(7,731)
Contract assets are represented by amounts recoverable on contracts in the above table. Amounts recoverable on contracts arise where the
revenue recognised on a long-term contract exceeds the value of stage payments that have been invoiced on that contract. Contract liabilities are
represented by payments on account where stage payments exceed revenue recognised on long term contracts. Materially all of the payments on
account as at 31 December 2019 have been recognised as revenue in the current year.
Significant changes in contract assets and liabilities
Contract assets and contract liabilities have increased in the year as a result of the Acquisition and the enlarged Group. In particular, payments on
account have increased by £88.7m as a result of the payments received in relation to partner delivery contracting which were nil at 31 December 2019.
2.1 Operating profit
Operating profit before exceptionals is stated after charging/(crediting):
Depreciation of tangible fixed assets (see note 5.4)
Amortisation of intangible fixed assets (see note 5.6)
Depreciation of right-of-use assets (see note 5.5)
Personnel expenses (not capitalised into work in progress)
Rental income (included in revenue)
Other operating income includes:
Joint arrangement management fees income
Profit on disposal of investment
Release of joint venture deferred income
2020
£000
1,449
15,418
14,843
77,206
(468)
2020
£000
15,172
113
11,137
2019
£000
(restated)
898
449
4,875
29,288
(101)
2019
£000
2,064
8,611
-
Vistry Group PLC | vistrygroup.co.uk | 155
Notes to the financial statements continued
Exceptional expenses
Exceptional items are those which, in the opinion of the Board, are material by size and irregular in nature and therefore require separate
disclosure within the Income Statement in order to assist the users of the financial statements in understanding the underlying business
performance of the Group.
2019 exceptional expenses related wholly to the Acquisition. 2020 exceptional expenses relate to the Acquisition (£20.0m) and the
recognition of a provision for legacy property building safety (£11.0m).
Administrative expenses relating to the Acquisition
Finance expenses relating to the Acquisition
Exceptional expenses relating to the Acquisition
Cost of sales relating to legacy property building safety
Exceptional expenses relating to legacy property building safety
Total exceptional expenses
2020
£000
20,009
-
20,009
10,975
10,975
30,984
2019
£000
12,846
630
13,476
-
-
13,476
On 3 January 2020, the Group completed the acquisition of Linden and Partnerships from Galliford Try PLC. The administrative fees incurred in
the year ended 31 December 2019 in relation to this transaction include legal, financing and accounting advisory services, transaction insurance
costs and other expenses. In the year ended 31 December 2020, exceptional administrative expenses include legal fees incurred in relation to
the completion and completion statement, as well as costs directly related to the integration and restructuring of the Group as a result of the
Acquisition, including the cost of redundancies and office closures.
The exceptional interest costs incurred in the year ended 31 December 2019 related to the accelerated amortisation of capitalised facility
arrangement fees on the 2015 revolving credit facility; this results from the early termination of this facility in January 2020 triggered by the
refinancing for the Acquisition.
Exceptional expenses relating to legacy property building safety reflect estimated costs relating to finished developments in relation to potential
build defects including building fire safety. The Group has undertaken a review of all of its current and legacy buildings where a potential liability
has been identified and has provided for the expected costs of any remedial works that may be required.
Tax on exceptional items in 2020 was £5.9m (2019: £0.1m)
Auditors’ remuneration
Fees payable to the Company’s auditors for the audit of the Company and Group’s annual accounts
Fees payable to the Company’s auditor and its associates for other services:
Audit of the accounts of subsidiaries
Audit-related assurance services
Other assurance services
Non-audit fees
Fees charged to operating profit
2.2 Segmental reporting
2020
£000
183
565
50
-
1
799
2019
£000
35
215
30
865
-
1,145
All revenue and profits disclosed relate to continuing activities of the Group and are derived from activities performed in the United Kingdom.
The Chief Operating Decision Maker (CODM), which is the Board, notes that the Group’s main operation is that of a housebuilder and it
operates entirely within the United Kingdom. Following the Acquisition the Board have identified two separate segments having taken into
consideration IFRS8 criteria – Housebuilding and Partnerships.
Segmental reporting is presented in respect of the Group’s business segments reflecting the Group’s management and internal reporting
structure and is the basis on which strategic operating decisions are made by the Group’s CODM.
The Housebuilding segment develops sites across England, providing private and affordable housing on land owned by the Group or the
Group’s joint ventures. Housebuilding offers properties under both the Bovis and Linden brand names.
The Partnerships segment specialises in partnering with housing associations and other public sector businesses across England, including
London, to deliver either the development of private and affordable housing on land owned by the Group or the Group’s joint ventures, or to
provide contracting services for development. The Partnerships segment operates under the Vistry Partnerships and Drew Smith brand names.
Segmental adjusted operating profit and segmental operating profit include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis. Central head office costs are allocated between the segments where possible, or otherwise reported within
the separate column for Group items together with acquisition related exceptional items and amortisation of acquired intangibles.
156 | Financial statements
Notes to the financial statements continued
Segmental tangible net asset value (TNAV) includes items directly attributable to the segment as well as those that can be allocated on a
reasonable basis, with the exception of net cash or debt, retirement benefit assets/liabilities and tax balances payable/receivable.
Adjusted financial results include share of joint ventures and exclude exceptional items. Adjusted gross profit is stated including other operating
income. The Partnerships business was acquired on 3 January 2020 therefore the financial performance for period ended 31 December 2019 was nil.
Segmental financial performance
Year ended 31 December 2020
Revenue
Share of joint venture revenue
Adjusted revenue
Gross Profit
Share of joint venture gross profit
Exceptional cost of sales
Other operating income
Adjusted gross profit
Operating Profit
Share of joint venture operating profit / (loss)
Exceptional items
Amortisation of acquired intangibles
Adjusted operating profit / (loss)
Adjusted gross margin
Adjusted operating margin
Year ended 31 December 2019
Revenue
Share of joint venture revenue
Adjusted revenue
Gross Profit
Share of joint venture gross profit
Other operating income
Adjusted gross profit
Operating Profit
Share of joint venture operating profit / (loss)
Exceptional items
Adjusted operating profit / (loss)
Adjusted gross margin
Adjusted operating margin
Housebuilding
£000
Partnerships
£000
Group items
£000
Total
£000
1,170,936
640,791
140,904
87,483
1,311,840
728,274
180,681
22,038
10,650
17,810
66,215
12,434
325
8,612
231,179
87,586
-
-
-
-
-
-
-
-
1,811,727
228,387
2,040,114
246,896
34,472
10,975
26,422
318,765
104,295
24,456
(37,028)
91,723
21,714
10,650
2,760
12,362
-
34,076
325
20,009
30,984
11,480
-
14,240
139,419
48,623
(17,019)
171,023
17.6%
10.6%
12.0%
6.7%
-
-
15.6%
8.4%
Housebuilding
£000
Partnerships
£000
Group items
£000
Total
£000
1,130,768
8,479
1,139,247
242,756
1,885
10,675
255,316
205,279
1,788
-
207,067
22.4%
18.2%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,130,768
8,479
1,139,247
242,756
1,885
10,675
255,316
(25,558)
179,721
-
1,788
12,846
12,846
(12,712)
194,355
-
-
22.4%
17.1%
Vistry Group PLC | vistrygroup.co.uk | 157
Notes to the financial statements continued
Segmental financial position
Year ended 31 December 2020
Goodwill and intangibles
Housebuilding
£000
Partnerships
£000
Group items
£000
Total
£000
283,428
407,666
-
691,094
Tangible net assets / (liabilities) excluding investments in joint ventures
1,361,786
(46,626)
5,791
1,320,951
Investments in joint ventures
Net cash
Year ended 31 December 2019
Goodwill and intangibles
Tangible net assets / (liabilities) excluding investments in joint ventures
Investments in joint ventures
Net cash
2.3 Dividends
The following dividends were paid by the Group:
Prior year final dividend per share of nil (2019: 38.0p)
Current year interim dividend per share of nil (2019:20.5p)
128,826
16,327
-
145,153
-
-
37,885
37,885
Housebuilding
£000
Partnerships
£000
Group items
£000
Total
£000
4,336
836,788
85,129
-
-
-
-
-
-
4,336
(16,249)
820,539
-
85,129
361,962
361,962
2020
£000
-
-
-
2019
£000
51,078
27,567
78,645
The 2019 Special dividend was paid by way of a bonus issue of 5,665,723 shares in January 2020 with a total value of £66.0m.
Following shareholder approval on 14 July 2020 and admission to Main Market of the London Stock Exchange on 15 July 2020, the second interim
dividend in respect to 2019 with a value of £60.0m was paid in the form of a bonus issue. 4,369,992 ordinary shares of £0.50 each were issued to
shareholders as a bonus issue on the Company’s register of members as at 6.00 p.m. on 27 December 2019.
The Board determined on 8 September 2020 that no interim dividend was to be paid for the first half of 2020.
A final dividend of 20 pence per share has been declared and, subject to shareholder approval at the AGM, will be paid on 21 May 2021 in respect
of 2020.
2.4 Earnings per share
Profit attributable to ordinary shareholders
Profit for the year attributable to equity holders of the parent
2020
£000
2019
£000
76,813
138,379
Profit for the year attributable to equity holders of the parent (before exceptional items and amortisation of acquired intangibles)
116,109
152,568
The prior year EPS has been restated to include the impact of the bonus issues in January and July 2020, of 5,665,723 and 4,369,992 shares, respectively.
Earnings per share
Basic earnings per share
Diluted earnings per share
Basic earnings per share (before exceptional items and amortisation of acquired intangibles)
Diluted earnings per share (before exceptional items and amortisation of acquired intangibles)
2020
34.8p
34.7p
52.6p
52.5p
2019
(restated)
94.6p
94.5p
104.3p
104.2p
158 | Financial statements
Notes to the financial statements continued
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares at 31 December
Adjustments for calculation of diluted earnings per share:
Options
Weighted average number of ordinary shares and potential ordinary shares
used as a denominator in calculating diluted earnings per share
2020
2019
(restated)
220,916,654
146,300,079
225,558
140,622
221,142,212
146,440,701
The prior year number of shares has been restated to include the impact of the bonus issues in January and July 2020, of 5,665,723 and 4,369,992
shares, respectively.
Basic earnings per share
Basic earnings per ordinary share for the year ended 31 December 2020 is calculated on a profit attributable to ordinary shareholders of £76,813,000
(2019: £138,379,000) over the weighted average of 220,916,654 (2019 restated: 146,300,079) ordinary shares in issue during the period.
Diluted earnings per share
The calculation of diluted earnings per share for the year ended 31 December 2020 was based on the profit attributable to ordinary shareholders
of £76,813,000 (2019: £138,379,000).
The Group’s diluted weighted average ordinary shares potentially in issue for the year ended 31 December 2020 was 221,142,212
(2019 restated: 146,440,701).
The average number of shares is increased by reference to the average number of potential ordinary shares held under option during the year.
This reflects the number of ordinary shares which would be purchased using the aggregate difference in value between the market value of
shares and the share option exercise price and fair value of future employee services. The market value of shares has been calculated using the
average ordinary share price during the year. Only share options which are expected to meet their cumulative performance criteria have been
included in the dilution calculation.
3.0 Land bank and other operating assets and liabilities
This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a result. Liabilities relating to the
Group’s financing activities are addressed in section 4. Deferred tax assets and liabilities are shown in section 5.2.
3.1 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour
costs and those overheads, not including any general administrative overheads, that have been incurred in bringing the inventories to their
present location and condition. Net realisable value represents the estimated net selling price less estimated total costs of completion of the
finished units.
Land held for development, including land in the course of development until legal completion of the sale of the asset, is initially recorded
at cost along with any expected overage, or recognised acquisition value. An overage being the amount a land owner may be entitled to
receive when completing the sale of a piece of land, provided specific conditions stipulated in the contract are met. Where, through deferred
purchase credit terms, cost differs from the nominal amount which will actually be paid in settling the deferred purchase terms liability, an
adjustment is made to the cost of the land, the difference being charged as a finance cost.
Options purchased in respect of land are capitalised initially at cost and written down on a straight-line basis over the life of the option.
Should planning permission be granted and the option be exercised, the option is not amortised during that year and its carrying value is
included within the cost of land purchased.
Options which were obtained as part of the Acquisition have been recognised at acquisition value and subsequently reviewed for impairment
at each reporting date.
Investments in land without the benefit of planning consent, either through purchase of freehold land or non-refundable deposits paid on
land purchase contracts subject to residential planning consent, are capitalised initially at cost. Regular reviews are completed for impairment
in the value of these investments, and provision made to reflect any irrecoverable element. The impairment reviews consider the existing use
value of the land and assesses the likelihood of achieving residential planning consent and the value thereof.
Part exchange properties are held at the lower of cost and net realisable value and include a carrying value provision to cover the costs
of management and resale. Any profit or loss on the disposal of part exchange properties is recognised within cost of sales in the Group
Income Statement.
Vistry Group PLC | vistrygroup.co.uk | 159
Notes to the financial statements continued
Group
Raw materials and consumables
Work in progress
Part exchange properties
Land held for development (net of provision)
Inventories
2020
£000
5,843
727,471
25,645
2019
£000
4,690
470,760
15,917
1,077,562
716,300
1,836,521
1,207,667
Inventories to the value of £1,121.3m were recognised as expenses in the year (2019: £886.4m).
Part exchange properties of £96.2m (2019: £80.5m) were disposed of during the year for proceeds of £96.5m (2019: £79.9m).
Movement on inventory provision
Balance at 1 January
- Utilisation in the year
- Unutilised and released in the year
New provisions recognised on sites still held
New provisions recognised on sites identified for disposal outside of core operating area
Balance at 31 December
£10.8m (2019: £4.5m) of inventories were valued at net realisable value rather than at historic cost.
3.2 Trade and other receivables
2020
£000
2,230
(1,727)
(498)
5
5,730
-
5,735
2019
£000
3,439
(2,041)
-
1,398
282
550
2,230
Trade and other receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts. The Group applies the IFRS9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade and other receivables have
been grouped based on shared credit risk characteristics and the age of the outstanding amounts. The contract assets relate to unbilled
work in progress on contracts described in note 2.0 and have a historically low level of default, similar to the Group’s low default levels on
trade receivables.
Other debtors include amounts receivable from the Government in relation to the Help to Buy scheme.
Trade receivables (current and non-current)
Amounts recoverable on contracts
Amounts due from subsidiary undertakings
Other debtors
Prepayments
Other accrued income
Total trade and other receivables
Group
Company
2020
£000
2019
£000
2020
£000
2019
£000
14,335
25,421
141,404
42,829
-
-
-
-
-
- 276,048
642,380
36,097
9,307
14,637
7,654
20,093
15,021
-
-
-
-
-
-
226,566
100,232
276,048
642,380
The above trade and other receivables are shown net of their expected credit loss allowances, which total £1.7m (2019: £2.0m). The Group’s
standard invoice payment terms are 30 days.
The carrying value of amounts due from subsidiary undertakings represents the Company’s maximum credit risk. Interest is charged on these
amounts at a rate of 2.3% per annum. The Directors consider that any expected credit loss allowance would be immaterial on these balances.
Receivables which are past due but not impaired are not material in either period.
The Directors consider that the carrying amount of trade receivables approximates to their fair value.
160 | Financial statements
Notes to the financial statements continued
3.3 Trade and other payables
Trade payables
Trade payables on normal terms are not interest bearing and are stated at their nominal value.
Trade payables on extended terms, particularly in respect of land, are recorded at their fair value at the date of acquisition of the asset to
which they relate. The discount to nominal value which will be paid in settling the deferred purchase terms liability is recognised over the
period of the credit term and charged to finance costs using the effective interest rate method.
Non-current liabilities
Trade payables
Other creditors
Total non-current liabilities
Current liabilities
Trade payables
Payments on account
Taxation and social security
Amounts payable to joint ventures
Other creditors
Accruals
Deferred income
Total current liabilities
Total trade and other payables
Group
2020
£000
Company
2019
£000
2020
£000
2019
£000
139,229
122,819
87
121
139,316
122,940
-
781
781
447,660 259,328
96,414
9,185
20,157
71,625
7,731
1,750
205
1,941
161,942
72,924
87,520
8,480
894,503
352,359
-
-
-
-
-
-
-
-
-
781
781
-
-
-
-
-
-
-
-
1,033,819
475,299
781
781
The Group’s non-current liabilities largely relate to land purchased on extended payment terms. An ageing of land creditor repayments is provided
in note 4.6.
4.0 Financing
This section outlines how the Group manages its capital and related financing activities.
4.1 Cash and cash equivalents
Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part
of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Bank balances
Call deposits
Cash and cash equivalents in the balance sheet and cash flows
Group
Company
2020
£000
2019
£000
338,799
11,743
2,189
350,219
340,988
361,962
2020
£000
344
-
344
2019
£000
344
-
344
Restricted cash on the balance sheet primarily relates to amounts that the Group paid into indemnity funds as part of the NewBuy housing
scheme which have not yet been released and is not included in the amounts above.
Vistry Group PLC | vistrygroup.co.uk | 161
Notes to the financial statements continued
4.2 Bank and other loans
Bank borrowings
Interest-bearing bank loans and overdrafts are initially recorded at fair value, net of direct issue costs, and subsequently at amortised cost.
Finance charges are accounted for on an accruals basis to the income statement using the effective interest method and are added to the
carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
-
-
-
-
-
-
-
-
-
-
Interest rate profile of bank and other loans
At 31 December
Revolving credit facility*
Revolving credit facility*
Term Loan*
USPP Loan**
Available
facility
£000
Rate
LIBOR +165-255bps
410,000
LIBOR +165-255bps
40,000
Facility
maturity
2025
2023
-
-
Carrying
value 2020
£000
Carrying
value 2019
£000
LIBOR +165-255bps
150,000
2023
150,000
403 bps
100,000
2027
107,359
Revolving credit facility (commenced 27 March 2020)
LIBOR +155-245bps
20,000
2022
-
Prepaid facility fee
Total non-current borrowings
n/a
n/a
n/a
(4,256)
720,000
253,103
Term Loan (commenced 17 March 2020)***
LIBOR +265bps
50,000
2021
50,000
Total current borrowings
Total
50,000
770,000
50,000
303,103
* These facilities commenced on 3 January 2020 and were subsequently amended on 24 January 2020.
** Carrying value is quoted including impact from the fair value of future interest payments.
*** The maturity date for this facility was amended on 23 February 2021 to January 2023.
The combined £450.0 million revolving credit facility syndicate comprises eight banks. The revolving credit facilities, USPP Loan and Term Loan all
include a covenant package, covering interest cover, gearing and tangible net worth requirements, which are tested semi-annually. The overall
financing cost of the new arrangements are marginally more expensive than the previous facility.
Net cash is calculated as follows:
Cash and cash equivalents
Non-current bank and other loans
Current bank and other loans
Net cash
The movement in net cash during the year was as follows:
Net cash at 1 January
Cash flow per cash flow statement
Loan repayments
Loan drawdowns
USPP borrowings acquired (note 5.14)
Imputed interest on USPP loan
Prepaid facility fees capitalised
Prepaid facility fees amortised
Net cash at 31 December
162 | Financial statements
2020
£000
2019
£000
340,988
361,962
(253,103)
(50,000)
-
-
37,885
361,962
2020
£000
2019
£000
361,962
126,816
(20,974)
198,745
275,000
36,401
(475,000)
(108,218)
859
6,000
(1,744)
-
-
-
-
-
37,885
361,962
Notes to the financial statements continued
4.3 Net financing costs
Finance income relates to interest income earned on loans made to joint ventures and pension finance credit.
Finance costs are included in the measurement of borrowings at their amortised cost to the extent that they are not settled in the period in
which they arise.
Finance costs predominantly relate to interest charges on external borrowings, lease liabilities and deferred land creditors.
The Group is required to capitalise borrowing costs directly attributable to the acquisition, construction and production of a qualifying asset,
as part of the costs of that asset. Inventories which are produced in large quantities on a repetitive basis over a short period of time are not
qualifying assets. The Group does not generally produce qualifying assets.
Net financing costs recognised in the Group Income Statement
Interest income
Net pension finance credit
Finance income
Imputed interest on deferred term land payables
Interest on lease liabilities
Bank and other interest
Exceptional finance expenses (see note 2.1)
Finance expenses
Net financing costs
4.4 Capital and reserves
Equity instruments
Note
5.10
5.5
2020
£000
17,941
291
18,232
(6,299)
(1,179)
(18,680)
-
(26,158)
(7,926)
2019
£000
707
106
813
(3,452)
(558)
(2,929)
(630)
(7,569)
(6,756)
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Where there is a bonus share
issue the nominal value of the shares are deducted from reserves and recognised within share capital.
Own shares held by ESOP trust
Transactions of the Group-sponsored ESOP trust are included in the Group financial statements. In particular, the trust’s purchases of shares
in the Company are debited directly to equity through an own shares held reserve.
Share capital
Ordinary shares
In issue at 1 January
Issued for cash
Bonus share issue
Shares issued as consideration
Costs of issuing equity
2020
Number of
shares
2020
Issued capital
£000
2020
Share premium
£000
2019
Number of
shares
2019
Issued capital
£000
2019
Share premium
£000
148,338,257
74,169
359,857
134,796,633
67,398
139,766
10,035,715
63,739,385
-
70
5,018
31,870
-
800
13,541,624
6,771
-
-
-
-
-
-
-
-
-
216,907
146,003
-
-
(3,053)
In issue at 31 December – fully paid
222,253,123
111,127
360,657
148,338,257
74,169
359,857
The holders of ordinary shares (nominal value 50p) are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company. The cost of issuing equity in the prior year relates to the placing of new ordinary shares in 2019.
Reserve for own shares held
The cost of the Company’s shares held in the ESOP trust by the Group is recorded as a reserve in equity. During the year ended 31 December
2020, the Group purchased 534,026 shares (2019: nil shares purchase at a total cost of £nil). There were 17,530 shares awarded under the Group’s
long-term incentive plan that vested during 2020 (2019: nil) and accordingly the balance of the own shares held reserve has reduced by £164,000
in 2020 (2019: £nil). At 31 December 2020, the Group held 901,933 of its own shares (2019: 385,437), with a value on reserve of £6,956,000
(2019: £3,620,000). The Group has suspended all rights on shares held by the Group in the Company.
Vistry Group PLC | vistrygroup.co.uk | 163
Notes to the financial statements continued
4.5 Financial risk management
Group
The Group seeks to manage its capital in such a manner that the Group safeguards its ability to continue as a going concern and to fund its future
development. In continuing as a going concern, it seeks to provide returns for shareholders over the housing market cycle as well as enabling
repayment of its liabilities as a trading business.
The Group’s capital comprises its shareholders’ equity, added together with its net borrowings, or less its net cash, stated before issue costs.
A five year record of its capital employed is displayed on page 192.
Whilst the blended cost of capital is a factor in the Group’s decision making in assessing the right blend of shareholders’ equity and debt financing,
the Group has typically preferred to operate within a framework that features relatively low gearing or cash in hand. This is because the Group
recognises that housebuilding can be cyclical, and higher levels of gearing can create profound liquidity risks. The Group would seek to manage
its capital base through control over expenditure, maintenance of adequate banking facilities, control over dividend payments and in the longer
term through adjustments to its capital structure. In 2020 the Group has operated at a higher gearing level as a result of the Acquisition at the
beginning of the year and at 31 December 2020 has returned to a net cash position.
An important part of capital management for the Group is its financial instruments, which comprise cash, bank and other loans and overdrafts.
The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group also utilises financial assets and liabilities
such as trade payables or receivables that arise directly from operations.
The use of these carries risk: interest rate risk, credit risk and liquidity risk. Given that the Group trades exclusively in the UK, there is no material
currency risk.
Company
The Company only trades with other Group entities and is only exposed to credit risk on those intercompany balances.
a. Interest rate risk
Exposure to interest rate risk arises in the normal course of the Group’s business. The Group has no exposure to currency risk as all its financial
assets and liabilities are denominated in sterling. Throughout the year, the Group’s policy has been that no trading in financial instruments shall
be undertaken.
Effective interest rates and repricing analysis
The interest rate profile of the Group’s interest bearing financial instruments is set out in note 4.2.
Sensitivity analysis
In managing interest rates, the Group aims to reduce the impact of short-term fluctuations in the Group’s earnings, given that Group borrowings
are variable in terms of interest rate. Over the longer-term, however, permanent changes in interest rates would have an impact on consolidated
earnings. For the year ended 31 December 2020, a general increase of one percentage point in interest rates applying for the full year would not
have a material impact on the financial statements.
b. Credit risk
The Group’s exposure to credit risk is limited by the fact that the Group generally receives cash at the point of legal completion of its sales of
private houses or land. There are certain categories of revenue where this is not the case: for instance, partner delivery contracting revenues and
housing association revenues. For partner delivery contracting and housing association revenues, the Group collects cash at regular intervals in
line with build progress in order to minimise its credit risk. The largest single amount outstanding at the year end was £14.4 million (2019: £20.2
million), which is payable by the end of December 2021. The Group retains these outstanding balances as trade and other receivables. The carrying
value of trade and other receivables equates to the Group’s exposure to credit risk. This is set out in note 3.2.
The Group’s trade and other receivables are secured against the following:
Second charge against property
Unsecured
2020
£000
1,544
225,022
226,566
2019
£000
1,090
105,374
106,464
In managing risk the Group assesses the credit risk of its counterparties before entering into a transaction. This assessment is based upon
management knowledge and experience. In the event that land is disposed of the Group seeks to mitigate any credit risk by retaining a charge
over the asset disposed of, so that in the event of default, the Group is able to seek to recover its outstanding asset.
164 | Financial statements
Notes to the financial statements continued
Company
The Company’s exposure to credit risk is limited as a result of all outstanding balances relating to companies within the Group.
c. Liquidity risk
The Group’s banking arrangements outlined in note 4.2 are considered to be adequate in terms of flexibility and liquidity for the enlarged Group’s
medium term cash flow needs, thus mitigating its liquidity risk. The Group’s approach to assessment of liquidity risk is outlined in the going
concern sub-section in the risk management section on page 48.
d. Housing market price risk
The performance of the UK housing market affects the valuation of certain of the Group’s non-financial assets and liabilities and the critical
judgements applied by management in these financial statements, including the valuation of land and work in progress.
Maturities of financial instruments
31 December 2020
Non-derivative financial assets
Restricted cash
Trade and other receivables
Cash and cash equivalents
Non-derivative financial liabilities
Bank and other loans
Long term loans
Less than 6
months
£’000
6-12 months
£’000
Between 1-2
years
£’000
Between 2-5
years
£’000
Over 5 years
£’000
Total
contractual
cash flows
£’000
Carrying
amount
£’000
212
212
425
225,022
340,988
(50,000)
-
-
-
-
-
-
-
-
-
-
-
-
344
1,193
1,193
1,544
226,566
226,566
-
-
340,988
340,988
(50,000)
(50,000)
(20,000)
(130,000)
(100,000)
(250,000)
(253,103)
Trade and other payables
(822,605)
(70,436)
(98,577)
(31,712)
(17,446)
(1,040,776)
(1,033,819)
Lease liabilities
(8,176)
(7,494)
(13,127)
(11,594)
(5,815)
(46,206)
(42,151)
Total net financial liabilities
(314,559)
(77,718)
(131,279)
(173,306)
(121,373)
(818,235)
(810,326)
Of the above financial assets and liabilities at 31 December 2020, £1.5m is linked to the UK housing market, and £808.8m is not linked to the UK
housing market.
31 December 2019
Non-derivative financial assets
Restricted cash
Trade and other receivables
Cash and cash equivalents
Non-derivative financial liabilities
Bank and other loans
Less than 6
months
£’000
6-12 months
£’000
Between 1-2
years
£’000
Between 2-5
years
£’000
Over 5 years
£’000
Total
contractual
cash flows
£’000
Carrying
amount
£’000
1,404
99,142
361,962
-
-
-
-
-
-
-
-
-
-
-
-
-
344
1,748
1,748
1,090
100,232
100,232
-
-
361,962
361,962
-
-
Trade and other payables
(283,196)
(85,366)
(78,308)
(46,305)
(118)
(493,293)
(475,299)
Lease liabilities
(3,334)
(3,058)
(5,197)
(7,873)
(5,805)
(25,267)
(22,995)
Total net financial assets / (liabilities)
175,978
(88,424)
(83,505)
(54,178)
(4,489)
(54,618)
(34,352)
Of the above financial assets and liabilities at 31 December 2019, £1.1m is linked to the UK housing market, and £33.3m is not linked to the UK
housing market.
Vistry Group PLC | vistrygroup.co.uk | 165
Notes to the financial statements continued
4.6 Financial instruments
Fair values
There is no material difference between the carrying value of financial instruments shown in the balance sheet and their fair value.
Estimation of fair values
The following summarises the major methods and assumptions used in estimating the fair values of financial instruments:
Land purchased on extended payment terms
When land is purchased on extended payment terms, the Group initially records it at its fair value with a land creditor recorded for any
outstanding monies based on this fair value assessment. Fair value is determined as the outstanding element of the price paid for the land
discounted to present day. The difference between the nominal value and the initial fair value is amortised over the period of the extended credit
term and charged to finance costs using the ‘effective interest’ rate method, increasing the value of the land creditor such that at the date of
maturity the land creditor equals the payment required.
Land creditor
(estimated ageing)
2020
2019
Bank and other loans
Balance at
31 Dec
£000
Total contracted
cash payment
£000
Due within
1 year
£000
Between
1-2 years
£000
Between
2-3 years
£000
323,167
258,758
329,514
182,388
98,455
17,050
262,489
137,758
78,308
39,943
Between
3-4 years
£000
6,807
6,348
Between
4-5 years
£000
Due beyond
5 years
£000
7,490
17,324
14
118
Fair value is calculated based on discounted expected future principal and interest flows. See note 4.2 for further details.
Trade and other receivables / payables
Other than land creditors, the nominal value of trade receivables and payables is deemed to reflect the fair value. This is due to the fact that
transactions which give rise to these trade receivables and payables arise in the normal course of trade with industry standard payment terms.
5.0 Other disclosures
This section includes all disclosures which are required by IFRS or the Companies Act which have not been included elsewhere in the
financial statements.
5.1 Income tax expense including exceptional items
Income tax comprises the sum of the tax currently payable or receivable and deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Note
2020
£000
2019
£000
1,407
(1,215)
192
21,673
(14)
35,424
1,260
36,684
(331)
21
21,851
36,374
5.2
5.2
Recognised in the income statement
Current tax
Current year
Adjustments for prior years
Deferred tax
Origination and reversal of temporary differences
Adjustments for prior year
Total income tax in income statement
166 | Financial statements
Notes to the financial statements continued
Reconciliation of effective tax rate
Profit before tax
Income tax using the domestic corporation tax rate
Non-deductible expenses and disposal of ineligible assets
Other non-taxable income/deductable expense
Other
Change in tax rate
Adjustments to the tax charge in respect to the prior year
2020
%
2020
£000
2019
%
2019
£000
98,664
18,746
4,447
-
-
(113)
(1,229)
19.0
4.5
-
-
(0.1)
(1.3)
174,753
33,203
2,441
(724)
173
-
1,281
19.0
1.4
(0.4)
0.1
-
0.7
Total tax expense
22.1
21,851
20.8
36,374
The Group’s effective tax rate of 22.1% (2019: 20.8%) is higher than the current rate of 19.0% (2019: 19.0%) as a result of a proportion of the
exceptional costs and other costs being non-deductible for tax purposes. The Group does not have any open corporation tax enquiries with the
tax authorities.
On 3 March 2021 the Chancellor of the Exchequer announced a proposed increase to the UK corporation tax rate from 19% to 25% as from
April 2023. The impact of this increase will be taken into account once the change in rate has been enacted.
Recognised directly in Group statement of changes in equity or in the Group statement of comprehensive income
Relating to actuarial movements on pension scheme (Group statement of comprehensive income)
Relating to share-based payments (Group statement of changes in equity)
Deferred tax recognised directly in Group statement of changes in equity or the Group
statement of comprehensive income
5.2 Tax assets and liabilities
Note
5.2
5.2
2020
£000
2,124
339
2,463
2019
£000
464
140
604
The tax currently payable or receivable is based on taxable profit or loss for the year and any adjustment to tax payable or receivable in
respect of previous years. Taxable profit or loss differs from net profit or loss as reported in the income statement because it excludes items
of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
The Group’s liability or asset for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises from non-tax deductible goodwill, from the initial recognition of
assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit, and from differences relating to investments
in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates
that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
income statement, except when it relates to items charged or credited directly to reserves, in which case the deferred tax is also dealt with
in reserves.
Vistry Group PLC | vistrygroup.co.uk | 167
Notes to the financial statements continued
Current tax assets and liabilities
The current tax asset of £14.4m (2019: liability of £20.9m) arose as a result of the timing of when tax payments became due for that financial year.
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities
Net
Group
Property, plant and equipment
Non-current trade payables
Available for sale financial assets
Employee benefits - pensions
2020
£000
2019
£000
-
-
-
-
-
-
-
-
Employee benefits - share-based payments
841
1,495
2020
£000
(17)
(15)
(399)
(1,724)
-
2020
£000
(17)
(15)
(399)
(1,724)
2019
£000
(41)
(17)
(446)
(766)
841
1,495
2019
£000
(41)
(17)
(446)
(766)
-
-
Provisions
Inventories
Profit on sale of assets to joint ventures
-
-
2
149
(7,059)
(7,059)
-
4
(9,266)
(194)
(9,266)
-
-
2
Tax assets / (liabilities)
843
1,648
(18,480)
(1,464)
(17,637)
Movement in temporary differences during the year
149
(194)
4
184
Balance
31 Dec 2020
£000
(17)
(15)
(399)
(1,724)
841
(7,059)
(9,266)
2
Balance
1 Jan 2020
£000
Recognised
from Acquisition
£000
Recognised
in income
£000
(12)
-
-
36
2
47
(1,073)
(2,009)
-
(6,400)
(993)
(808)
8,860
(17,932)
-
(2)
(41)
(17)
(446)
(766)
1,495
149
(194)
4
184
Recognised
in equity
and other
comprehensive
income
£000
-
-
-
2,124
339
-
-
-
1,375
(21,659)
2,463
(17,637)
Group
Property, plant and equipment
Trade payables
Available for sale financial assets
Employee benefits - pensions
Employee benefits - share-based payments
Provisions
Inventories
Profit on sale of assets to joint ventures
Movement in temporary differences
168 | Financial statements
Notes to the financial statements continued
Group
Property, plant and equipment
Trade payables
Available for sale financial assets
Employee benefits - pensions
Employee benefits - share-based payments
Provisions
Inventories
Profit on sale of assets to joint ventures
Movement in temporary differences
Factors affecting future tax charge
Balance
1 Jan 2019
£000
Recognised
in income
£000
Recognised
in equity
£000
Balance
31 Dec 2019
£000
(126)
(21)
(536)
(214)
297
149
(447)
168
(730)
85
4
90
(1,016)
1,058
-
253
(164)
310
-
-
-
464
140
-
-
-
604
(41)
(17)
(446)
(766)
1,495
149
(194)
4
184
The UK corporation tax rate is 19% (effective from 1 April 2017) and the proposed reduction to 17% (effective 1 April 2020) that was substantively
enacted on 6 September 2016 has been reversed. The deferred tax at 31 December 2019 was calculated based on the rate of 17% however the
deferred tax at 31 December 2020 has been calculated based on the rate of 19%.
Employee benefits
The Group recognises the deficit or surplus on its defined benefits pension scheme under the requirements of IAS19 (Revised): ‘Employee benefits’.
This has generated a surplus of £9.1m (2019: surplus of £4.5m). As at 31 December 2020, a deferred tax liability of £1.7m (2019 tax liability: £0.8m)
was recognised.
5.3 Directors and employees
The weekly average number of employees of the Group, all of whom were engaged in the United Kingdom on the Group’s principal activity,
together with personnel expenses, are set out below.
Average staff numbers - Group
Average staff numbers
The Company had no employees during 2020 (2019: nil).
A breakdown of staff numbers split by type of role is included on page 28.
Personnel expenses - Group
Wages and salaries
Social security costs
Contributions to defined contribution plans
Expenses related to defined benefit plans
Equity-settled share-based payments
Personnel expenses
2020
3,152
2019
1,340
2020
£000
179,681
20,386
8,936
1,299
2,741
2019
£000
77,888
9,056
2,602
577
2,891
213,043
93,014
The aggregate remuneration for the Group’s Directors during 2020 was £3.2m, which is shown in further detail on pages 104 to 119 of the
remuneration report (2019: £3.6m). The Company had no personnel expenses during 2020 (2019: nil).
Vistry Group PLC | vistrygroup.co.uk | 169
Notes to the financial statements continued
Share-based payments
The Group has applied the requirements of IFRS2: “Share-based payments”.
The Group issues equity-settled share-based payments to certain employees in the form of share options over shares in the Parent Company.
Equity-settled share-based payments are measured at fair value at the date of grant calculated using an independent option valuation
model, taking into account the terms and conditions upon which the options were granted. The fair value is expensed on a straight-line basis
over the vesting period, based on the Group’s estimate of shares that will eventually vest, with a corresponding credit to equity except when
the share- based payment is cancelled where the charge will be accelerated.
Movements in the number of share options outstanding and their related weighted average exercise prices
Long Term Incentive Plan
At 1 January
Granted
Lapsed
Exercised
At 31 December
Executive and other share options
At 1 January
Granted
Lapsed
Exercised
At 31 December
Save As You Earn
At 1 January
Granted
Lapsed
Cancelled
Exercised
At 31 December
2020
2019
Average
exercise price
in £ per share
option
-
-
-
-
-
Share
options
000
1,435
764
-
-
2,199
Average
exercise price
in £ per share
option
-
-
-
-
-
2020
2019
Average
exercise price
in £ per share
option
Share
options
000
Average
exercise price
in £ per share
option
8.37
-
7.74
-
8.53
25
-
(5)
-
20
7.56
-
-
5.02
8.37
2020
2019
Average
exercise price
in £ per share
option
7.73
4.68
8.12
8.01
6.21
5.03
Share
options
000
486
1,523
(30)
(175)
(140)
1,664
Average
exercise price
in £ per share
option
7.15
9.30
7.31
7.97
7.15
7.73
Share
options
000
1,144
317
(26)
-
1,435
Share
options
000
33
-
-
(8)
25
Share
options
000
464
143
(35)
(25)
(61)
486
Out of the 3,884,000 outstanding options (2019: 1,946,000), 830,000 options (2019: 314,000) were exercisable. Options exercised in 2020
resulted in 140,000 shares (2019: 69,000) being issued at a weighted average share price of £6.21 each (2019: £6.90 each).
170 | Financial statements
Notes to the financial statements continued
Expiry date and exercise price of share options outstanding at the end of the year
Long Term Incentive Plan
Grant vest
2011-14
2012-15
2013-16
2013-16
2014-17
2016-19
2017-18
2017-20
2018-21
2019-22
2020-23
Executive and other share options
Grant vest
2013-16
2014-17
Save As You Earn
Grant vest
2015-20
2016-21
2017-20
2017-22
2018-21
2018-23
2019-22
2019-24
2020-23
2020-25
Expiry date
15/03/2021
28/02/2022
26/02/2023
20/08/2023
25/02/2024
15/08/2026
02/05/2027
08/09/2027
05/03/2028
04/03/2029
02/03/2030
Expiry date
21/08/2020
20/08/2021
Expiry date
24/09/2020
24/09/2021
24/09/2020
24/09/2022
23/09/2021
23/09/2023
01/12/2022
01/12/2024
01/06/2024
01/06/2026
Exercise price in
£ per share
option
2020
Share options
000
2019
Share options
000
-
-
-
-
-
-
-
-
-
-
-
14
16
23
8
19
209
154
368
321
303
764
14
16
23
8
19
209
154
368
321
303
-
2,199
1,435
Exercise price in
£ per share
option
2020
Share options
000
2019
Share options
000
7.73
8.53
-
20
20
5
20
25
Exercise price in
£ per share
option
2020
Share options
000
2019
Share options
000
7.66
7.12
6.12
6.12
9.06
9.06
9.30
9.30
4.68
4.68
-
10
1
20
40
11
58
8
1,165
351
1,664
11
15
181
34
93
20
114
18
-
-
486
Vistry Group PLC | vistrygroup.co.uk | 171
Notes to the financial statements continued
The weighted average fair value of the options granted during the period determined using the Monte Carlo model was £6.23 per option
(2019: £6.87). The significant inputs into the model were a weighted average share price of £12.71 (2019: £11.42) at the grant date, the exercise
price shown in the table on the previous page, volatility of 34% (2019: 37.25%), an expected option life of 5 years (2019: 5 years) and an annual
risk-free rate of 0.28% (2019: 0.81%). The volatility is measured at the standard deviation of continuously compounded share returns, based on
statistical analysis of daily share prices over the last 3 years.
Share-based payments expense in the income statement
Long Term Incentive Plan
Executive and other share options
Save As You Earn share options
Total expense recognised as personnel expenses
Information relating to the remuneration of directors appears in the directors’ remuneration report on pages 104 to 119.
The executive leadership team as shown on page 82 are considered to be the only key management personnel.
A summary of key management remuneration is as follows:
Wages and salaries
Compulsory social security contributions
Contributions to defined contribution plans
Share-based payment expenses
Key management remuneration
2020
£000
2,402
-
339
2,741
2020
£000
2,640
713
21
1,198
4,572
2019
£000
2,489
6
395
2,890
2019
£000
2,083
286
19
1,884
4,272
Details of the equity settled share-based schemes are set out below.
Long Term Incentive Plan
A long term incentive plan for executive directors and senior executives was approved by shareholders at a General Meeting in December 2019.
The first grant of awards under this plan was made in 2020. Details of the vesting conditions of these awards are laid out in the directors’
remuneration report on pages 104 to 119.
Project 200 Incentive plan
The Project 200 incentive plan was implemented for members of the executive management team during 2017, and is designed to support the
Group’s programme of balance sheet optimisation and reduction in capital in order to facilitate the potential return of capital to shareholders
through special dividends.
Save As You Earn share options
The Vistry Group PLC Save As You Earn Option Scheme was established in 2007 and renewed in 2017. Share options held in the Save As You Earn
Option Scheme are not subject to performance conditions and may under normal circumstances be exercised during the six months after maturity
of the agreement. Save As You Earn share options are generally exercisable at an exercise price which includes a 20% discount to the market price
of the shares at the date of grant.
5.4 Property, plant and equipment
Plant, property and equipment (PPE) is recorded at prime cost less accumulated depreciation.
The sub-categories of PPE are depreciated as follows:
• Freehold buildings on a 2% straight line basis;
• Plant, machinery and vehicles on a 33.3% reducing balance basis; and
• Furniture, fittings and equipment on a 25% reducing basis, other than computer equipment which is depreciated on a straight-line basis
over 3 years.
172 | Financial statements
Notes to the financial statements continued
Cost
Year ended 31 December 2020
Opening balance
Additions acquired as a result of the Acquisition
Additions
Disposals
Closing
Accumulated depreciation
Opening
Charge for the year
Disposals
Closing
Net book value at 31 December
2020
Cost
Year ended 31 December 2019
Opening balance
Additions
Disposals
Closing
Accumulated depreciation
Opening
Charge for the year
Disposals
Closing
Net book value at 31 December
2019
Freehold
buildings
£000
Furniture,
fittings and
equipment
£000
Plant,
machinery
and vehicles
£000
3,028
953
2,596
1,176
445
36
-
680
-
-
Total
£000
4,204
2,078
2,632
(12)
(4)
(16)
680
6,565
1,653
8,898
-
7
-
7
1,801
1,212
-
3,013
558
230
(1)
2,359
1,449
(1)
787
3,807
673
3,552
866
5,091
Freehold
buildings
£000
Furniture,
fittings and
equipment
£000
Plant,
machinery
and vehicles
£000
Total
£000
-
-
-
-
-
-
-
-
-
2,552
1,103
3,655
492
(16)
73
-
565
(16)
3,028
1,176
4,204
1,149
665
(13)
1,801
325
233
-
558
1,474
898
(13)
2,359
1,227
618
1,845
Vistry Group PLC | vistrygroup.co.uk | 173
Notes to the financial statements continued
5.5 Leases
The Group leases various offices, site cabins, office equipment, cars and show homes. Rental contracts are typically made for fixed periods of
1 to 4 years but may be for longer or include extension options. Lease terms are negotiated on an individual basis and contain a wide range
of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for
borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by
the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset
is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the
following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payments that are based on an index or a fixed annual rate increase
The lease payments are discounted using the Group’s incremental borrowing rate, being the rate that the Group would have to pay to
borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
The weighted average Group’s incremental borrowing rate applied to the lease liabilities is 2.5%.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or
loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise site equipment and other items less
than £3,000 in total lease costs.
The amounts recognised in the Group Balance Sheet were:
Right-of-use assets cost
Year ended 31 December 2020
Opening balance
Additions acquired as a result of the Acquisition
13,540
52
2,931
Office
properties
£000
Show home
properties
£000
Site cabins
£000
Office
equipment
£000
Motor
vehicles
£000
Total
£000
13,574
3,965
5,632
1,540
1,346
-
2,003
(2,533)
(12)
8,566
(208)
100
500
-
241
2,533
26,204
4,441
20,964
5,130
5,913
(413)
(1,073)
-
25,708
4,278
17,129
1,597
4,415
1,051
1,408
1,924
5,238
(413)
(1,073)
-
-
533
62
197
-
(334)
(1,820)
8,743
56,391
739
4,857
3,069
14,843
(334)
(1,820)
5,599
1,902
6,646
259
3,474
17,880
20,109
2,376
10,483
274
5,269
38,511
Additions
Modifications
Disposals
Closing
Accumulated depreciation
Opening balance
Charge for the year
Disposals
Closing
Net book value at 31 December
2020
174 | Financial statements
Notes to the financial statements continued
Right-of-use assets cost
Year ended 31 December 2019
Office
properties
£000
Show home
properties
£000
Site cabins
£000
Office
equipment
£000
Motor
vehicles
£000
Total
£000
Opening balance (on implementation of IFRS16)
13,574
1,796
5,632
Additions
Closing
Accumulated depreciation
Opening balance
Charge for the year
Closing
Net book value at 31 December
2019
Lease liabilities
Current
Non-current
Total lease liabilities
Leasing arrangements
Minimum lease payments payable on the Group’s leases are as follows:
Within 1 year
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Later than 5 years
-
2,169
-
13,574
3,965
5,632
-
1,597
1,597
-
1,051
1,051
-
1,408
1,408
205
295
500
-
62
62
1,794
23,001
739
3,203
2,533
26,204
-
739
739
-
4,857
4,857
11,977
2,914
4,224
438
1,794
21,347
31 Dec 2020
£000
31 Dec 2019
£000
15,304
6,309
26,848
16,686
42,152
22,995
31 Dec 2020
£000
31 Dec 2019
£000
15,670
13,127
5,335
3,380
2,878
5,815
6,392
5,197
3,933
2,211
1,730
5,805
Extension and termination options are included in a number of leases across the Group. These are used to maximise operational flexibility in terms
of managing the assets used in the Group’s operations. The majority of extension and termination options held are exercisable only by the Group
and not by the respective lessor.
The amounts recognised in the Group Income Statement were:
Depreciation of right-of-use assets
Interest expense
Expense relating to short-term leases*
Expense relating to leases of low-value assets
*Includes lease expenses related to plant and machinery.
The total cash outflow for leases including plant and machinery in 2020 was £15,669,711 (2019: £8,827,000).
31 Dec 2020
£000
31 Dec 2019
£000
14,843
4,857
1,179
7,655
5
558
9,955
14
Vistry Group PLC | vistrygroup.co.uk | 175
Notes to the financial statements continued
5.6 Intangible Fixed Assets
Intangible fixed assets are recorded at cost or acquisition fair value, less accumulated amortisation.
Separately acquired IT software is initially capitalised at cost. Costs associated with maintaining software are recognised as an expense
as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by
the Group are recognised as intangible assets where IAS 38 criteria are satisfied. Capitalised development costs are initially recorded
within assets under construction, and are then transferred to IT software and amortised from the point at which the asset is ready for use.
IT software is amortised on a straight-line basis over a period of 3 – 5 years.
Brand names and customer relationships and contracts acquired in a business combination are recognised at fair value at the
acquisition date. Brand names are amortised on a straight-line basis over a 25 year period. Customer relationships and contracts are
amortised on a straight-line basis over a period of 4-15 years.
All amortisation is recorded within the administrative expenses line of the income statement.
Cost
Year ended 31 December 2020
Opening balance
Additions acquired as a result of the Acquisition
Additions
Transferred in the period
Disposals
Closing
Accumulated amortisation
Opening
Charge for the year
Disposals
Closing
Net book value at 31 December
2020
Cost
Year ended 31 December 2019
Opening balance
Additions
Closing
Accumulated amortisation
Opening
Charge for the year
Closing
Net book value at 31 December
2019
176 | Financial statements
Assets under
construction
£000
IT Software
£000
Brand names
£000
Customer
relationships and
contracts
£000
Total
£000
344
-
67
(149)
(195)
67
-
-
-
-
4,575
-
-
4,919
-
42
149
(272)
37,600
117,424
155,024
-
-
-
-
-
-
109
-
(467)
4,494
37,600
117,424
159,585
583
1,178
(1)
-
-
1,500
12,740
583
15,418
-
-
(1)
1,760
1,500
12,740
16,000
67
2,734
36,100
104,684
143,585
Assets under
construction
£000
IT Software
£000
-
344
344
-
-
-
1,213
3,362
4,575
134
449
583
Total
£000
1,213
3,706
4,919
134
449
583
344
3,992
4,336
Notes to the financial statements continued
5.7 Goodwill
Goodwill represents the excess of the consideration paid for the Linden and Partnerships businesses in 2020 over the fair value of the assets
and liabilities acquired, including intangible assets recognised on acquisition. Goodwill was allocated to the Group’s two groups of CGUs at
the time of the acquisition based on the proportionate consideration and fair valued assets and liabilities.
The goodwill for each CGU group is reviewed annually for impairment, or more regularly where there is a triggering event. If the carrying
value of the goodwill was found to exceed the value in use calculated for either CGU group, an impairment would be required. In the
event of an impairment, the goodwill of the appropriate CGU group would be impaired first and then to the other assets proportionately.
Any impairment loss is recognised in the income statement and is not subsequently reversed.
Goodwill is monitored by management at the level of the two operating segments identified in note 2.2.
A segment-level summary of the goodwill allocation is presented below:
As at 31 December 2020 (Group)
Housebuilding
£’000
Partnerships
£’000
Total
£’000
Goodwill recognised on acquisition of Linden and Partnerships
228,328
319,181
547,509
Key assumptions used for value-in-use calculations
The Group tests whether goodwill has suffered any impairment on an annual basis, or more regularly where there are indicators of impairment.
For the 2020 reporting period, the recoverable amount of the two groups of cash-generating units (CGUs) was determined based on value-
in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial forecasts approved by
management covering a five-year period from 31 December 2020.
The first year of cashflows were determined using the Group’s 2021 approved budget and the cashflows for the second to fifth years were
determined by using the Group’s internal forecasts based on expected volumes, sales prices, gross margins and land investment. Cash flows
beyond the five-year period are extrapolated using a terminal growth rate of 1%. These growth rates are consistent with the UK long term
industry growth rate. The Group’s forecasted cashflows reflect the expected impact of Covid-19.
Management has determined the key assumptions as follows:
Assumption
Approach used to determining values
Sales volume
Sales price
Gross margin
Reflecting historic experience and expected volume growth for the respective CGU groups based on
business strategy and expected market demand.
Reflecting management’s expectation for property pricing based on local market conditions, demand and
product mix.
Based on historic experience and expected gross margin of the respective CGU groups, partly driven by the
embedded land bank margin.
Land and inventory
investment
Expected cash investment in land and inventories to fund the future growth of the CGU groups. This is
based on the historical experience of management and committed future land spend in addition to the
planned strategy and growth of the businesses.
Pre-tax discount rates
Reflect specific risks relating to the relevant CGU groups and nature of their income streams based on
an estimated weighted average cost of capital for each segment. The pre-tax rate reflects the market
participant levels of gearing as well as current market assessments of the time value of money. A rate of
11.4% for Housebuilding and 9.2% for Partnerships is considered appropriate by the directors.
Recoverable amounts and impairment charges
The recoverable value of both CGU groups exceeds the carrying value of each CGU group’s respective net assets and therefore no impairment
charge was necessary in the period. At 31 December 2020 the value in use of the housebuilding CGU exceeds net assets by £672.0m and for
partnership CGU the value in use exceeds net assets by £411.0m.
Vistry Group PLC | vistrygroup.co.uk | 177
Notes to the financial statements continued
Impact of possible changes in key assumptions
Management have sensitised the forecast to apply a downside scenario which reflects decreased affordability, leading to reduced demand for
private housing and falling house prices. In a downside scenario, it has been assumed that management would tightly manage working capital
and reduce uncommitted land investment. This is consistent with the downside scenario used in the Group’s going concern assessment (note 1.3).
Even in a downside scenario no impairment of goodwill is required for either CGU.
The value in use amount of the CGU would equal its net asset value if the key assumptions were to change as follows from the un-sensitised
value-in-use assumptions:
Year ended 31 December 2020
Sales Volume
Sales Price
Pre-tax discount rate
5.8 Investments
Fixed asset investments
Housebuilding
50% reduction
14% reduction
6.5% increase
Partnerships
100% reduction
100% reduction
17.5% increase
The Group’s share of joint venture results shown in the income statement reflect the above group share of joint venture results which are
then adjusted for fair value releases, unrealised losses and other accounting entries required to equity account for the Group’s joint ventures.
Investments in subsidiaries are carried at cost less impairment. The Parent Company accounts for the share-based payments granted to
subsidiary employees as an increase in the cost of its investment in subsidiaries and the value of this investment is supported by net assets
and future profit generation. Joint ventures are those arrangements in which the Group has rights to the net assets of the arrangements and
treated on an equity accounted basis in the Group’s financial statements.
In January 2020, the Group entered into a joint venture at Collingtree, near Northampton, with Latimer Developments Limited. As part of the
initial transaction, land owned by the Group was sold into the joint venture, Vistry Latimer Collingtree LLP. The Group acquired a number or joint
venture investments as part of the Acquisition, which have also been fair valued as shown in note 5.14.
Group
Company
2020
£000
2019
£000
2020
£000
2019
£000
Subsidiary undertakings
Interest in subsidiary undertakings’ shares at cost (100% ownership of ordinary shares)
-
-
1,250,378
14,153
Investments accounted for using the equity method
Interest in joint ventures – equity
Interest in joint ventures - loan
Other investments
Total investments
105,205
39,926
145,131
61,135
23,972
-
-
-
-
85,107
1,250,378
14,153
22
22
-
-
145,153
85,129
1,250,378
14,153
The movement in Company investments in the period relates primarily to the acquisition of Linden and Partnerships, as discussed in Note 5.14.
The movement in investments accounted for using the equity method during the year is as follows:
Beginning of the period
Acquired with Linden and Partnerships
Additions
Loans made and net interest charged
Profit for the period
Distributions paid
End of the period
Group
Company
2020
£000
2019
£000
2020
£000
2019
£000
85,129
28,992
14,153
11,262
56,034
-
1,233,483
-
-
59,387
2,742
2,891
16,166
14,867
(27,043)
97
1,788
(5,135)
-
-
-
-
-
-
145,153
85,129
1,250,378
14,153
At 31 December 2020 the Group held interests in joint ventures, all of which are incorporated in Great Britain, as set out in note 5.16.
Details of related party transactions with joint ventures are given in note 5.11.
178 | Financial statements
Notes to the financial statements continued
In relation to the Group’s interest in joint ventures, the assets, liabilities, income and expenses are shown below:
Current assets excluding cash
Cash and cash equivalents
Current liabilities
Non-current liabilities
Net assets of joint ventures
Group share of net assets
Revenue
Gross profit
Operating profit
Finance costs
Income tax expense
Profit for the year
Other comprehensive income
Total comprehensive income
Group share of results for the year for joint ventures in a net asset position
Group share of results for the year for joint ventures in a net liability position
2020
£000
1,233,201
35,917
(405,928)
(736,383)
126,807
63,404
464,698
59,539
58,659
(38,316)
(792)
19,551
-
19,551
16,208
(6,534)
2019
£000
173,703
5,392
(24,771)
(72,628)
81,696
40,848
16,959
3,771
3,545
-
-
3,545
-
3,545
1,788
-
The Group’s share of joint venture results shown in the income statement reflect the above group share of joint venture results which are then
adjusted for fair value releases, unrealised losses and other accounting entries required to equity account for the Group’s joint ventures.
Details of material joint ventures are as follows:
Stanton Cross
Developments
LLP
Opal
(Silvertown)
LLP
Bovis Latimer
(Sherford)
LLP
Vistry Latimer
Collingtree
LLP
DR 4
Developments
LLP
2020
£000
2019
£000
2020
£000
2019
£000
2020
£000
2019
£000
2020
£000
2019
£000
2020
£000
2019
£000
Carrying value of Group’s investment
39,955
56,069
6,105
-
18,484
20,205
13,625
-
2,006
-
Stanton Cross Developments LLP develops and sells residential property at Stanton Cross, Wellingborough.
Opal (Silvertown) LLP is developing and selling apartments at Brunel Street works at a large development site at Canning Town, London.
The development also includes the construction of a hotel and commercial units.
Bovis Latimer (Sherford) LLP develops and sells residential property at Sherford, Plymouth.
Vistry Latimer Collingtree LLP develops and sells residential property at Collingtree, Northampton.
DR 4 Developments LLP developed and sold apartments at a development known as Lime Quarter at Bromley-on-Bow, London near Devons Road DLR.
All of the Group’s material joint ventures are strategic investments which utilise the Group’s knowledge and expertise in the development of
residential property but also limit the Group’s exposure on large sites through a reduced equity holding.
Vistry Group PLC | vistrygroup.co.uk | 179
Notes to the financial statements continued
Income statements – continuing operations
Stanton Cross
Developments
LLP
Opal
(Silvertown)
LLP
Bovis Latimer
(Sherford)
LLP
Vistry Latimer
Collingtree
LLP
DR 4
Developments
LLP
2020
£000
2019
£000
2020
£000
2019
£000
2020
£000
2019
£000
2020
£000
2019
£000
Revenue
Gross profit
Overheads
33,446
15,845
64,190
5,156
3,514
7,218
(11)
-
-
Operating profit
5,145
3,514
7,218
Income tax expense
Interest expense
Profit before tax
-
-
-
-
-
(3,492)
5,145
3,514
3,726
Other comprehensive income
-
-
-
Total comprehensive income
5,145
3,514
3,726
Joint venture result
5,145
3,514
3,726
Group’s share of profit / (loss) and
total comprehensive profit / (loss)
2,573
1,757
1,863
Distributions received by the
Group during the year
18,897
-
-
Balance sheet
Cash and cash equivalents
3,055
4,107
8,189
Inventories
136,287
134,147
138,714
Other current assets
8,403
2,089
6,327
Current assets
147,745
153,230
Current external borrowings
-
-
(55,019)
Other current liabilities
(22,227)
(21,319)
(48,874)
Current liabilities
(22,227)
(21,319)
(103,893)
Non-current external borrowings *(38,681) *(37,752)
-
Other non-current liabilities
-
-
(37,200)
Non-current liabilities
(38,681)
(37,752)
(37,200)
Net assets / (liabilities) (100%)
86,837
81,272
12,137
Group share of net assets
43,419
40,636
6,069
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2020
£000
9,837
1,563
2019
£000
1,113
257
-
(195)
1,563
-
62
-
-
(72)
-
(72)
-
(2,179)
(559)
(2,077)
(616)
(497)
(2,149)
-
(616)
(616)
-
-
(497)
(2,149)
(497)
(2,149)
(308)
(249)
(1,075)
-
-
773
1,285
-
-
60,551
36,337
58,840
-
1,130
-
61,324
38,752
58,840
(1,100)
-
-
(31,754)
(3,452)
(55,989)
(32,854)
(3,452)
(55,989)
*(7,863)
*(9,379)
(21,160)
(25,497)
(29,023)
(34,876)
-
-
-
(553)
(277)
424
212
2,851
(1,075)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
46,781
7,072
(13)
7,059
-
(1,180)
5,879
-
5,879
5,879
2,940
-
195
7,582
-
7,777
-
(3,177)
(3,177)
-
-
-
4,600
2,300
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Group’s joint ventures have no significant contingent liabilities or commitments to which the Group is exposed, and the Group has no
significant contingent liabilities in relation to its interest in the joint ventures.
* Bovis Latimer (Sherford) LLP and Stanton Cross Developments LLP external borrowings reflect amounts due to Homes England.
In addition to the interests in joint ventures disclosures above, the Group also has interests in a number of individually immaterial joint ventures
that are accounted for using the equity method.
Aggregate carrying value of individually immaterial joint ventures
Aggregate amounts of the Group’s share of:
Profit from continuing operations
Other comprehensive income
Total comprehensive income
180 | Financial statements
2020
£000
2019
£000
64,956
8,832
9,815
-
9,815
-
-
-
Notes to the financial statements continued
5.9 Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and
it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined
by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
As at 1 January 2020
Additions acquired as a result of the Acquisition
Additional provisions made
Amounts used
Unused provisions reversed
As at 31 December 2020
Legacy properties
– building safety
£000
Site-related
costs
£000
-
10,741
10,975
(831)
-
2,364
9,615
2,819
(861)
(500)
Other
£000
1,625
2,100
Total
£000
3,989
22,456
2,354
16,148
-
-
(1,692)
(500)
20,885
13,437
6,079
40,401
Of the total provisions detailed above, £6,615,000 within site related provisions are expected to be utilised within the next year (2019: £400,000).
Legacy property building safety provision includes estimated costs related to finished developments in relation to potential build defects including
building fire safety. The Group has undertaken a review of all of its current and legacy buildings where a potential liability has been identified
and has provided for the expected costs of any remedial works that may be required. We expect the majority of this provision to be utilised or
released over the next three years. We highlight that this is an evolving area including recent initial government guidance, we will review the
need and scale of these provisions as guidance and further detail emerges.
Site related cost provisions includes estimated costs in relation to specific site related items including litigation.
Other provisions primarily relate to estimated costs in relation to insurance claims and other potential obligations.
5.10 Employee benefits
The Group accounts for pensions and similar benefits under IAS 19 (Revised): “Employee benefits”. In respect of defined benefit schemes, the
net obligation is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current
and prior periods, such benefits measured at discounted present value, less the fair value of the scheme assets. The discount rate used to
discount the benefits accrued is the yield at the balance sheet date on AA credit rated bonds that have maturity dates approximating to
the terms of the Group’s obligations. The calculation is performed by a qualified actuary using the Projected Unit Method. The operating
and financing costs of such plans are recognised separately in the income statement; service costs are spread systematically over the lives
of employees and financing costs and credits are recognised in the periods in which they arise. All actuarial gains and losses are recognised
immediately in the Group statement of comprehensive income.
Payments to defined contribution schemes are charged as an expense as they fall due.
Pension cost note
The Company operates three UK registered trust based pensions schemes of which two were acquired during the year.
Bovis Homes Pension Scheme is a pension scheme that provides defined benefits. Pension benefits are linked to the members’ final pensionable
salaries and service at their retirement (or date of leaving if earlier). This scheme is closed to new members and future accrual.
The Galliford Try Final Salary Pension Scheme and The Kendall Cross (Holdings) Limited Pension & Life Assurance Scheme were both acquired
during the year as part of the Acquisition. Both provide defined benefits and both are closed to new members and future accrual.
The Trustees of each scheme are responsible for running their scheme in accordance with their scheme’s Trust Deed and Rules, which sets out
their powers. The Trustees of each scheme are required to act in the best interests of the beneficiaries of their scheme.
There are two categories of pension scheme members:
• Deferred members: former active members of the Scheme, not yet in receipt of pension
• Pensioner members: in receipt of pension
The Group is ultimately responsible for making up any shortfall in the scheme over a period of time agreed with the trustee of each scheme.
To the extent that actual experience is different to that assumed, the Group’s contribution could vary in the future. The defined benefit obligation
has been calculated by approximately adjusting the results of the most recent triennial valuation performed by the Scheme Actuaries.
The defined benefit obligation is valued by projecting the best estimate of future benefit outgoings, (allowing for revaluation to retirement for
deferred members and annual pension increases for all members) and then discounting to the balance sheet date. The majority of benefits receive
increases linked to inflation (subject to a cap of no more than 5% pa). The valuation method used is known as the Projected Unit Method.
The Trustee board for each Scheme is made up of member appointed, Company appointed and independent trustees.
The approximate overall duration of the Schemes’ defined benefit obligation as at 31 December 2020 was between 15 and 20 years.
Vistry Group PLC | vistrygroup.co.uk | 181
Notes to the financial statements continued
Risks
Through the Schemes, the Company is exposed to a number of risks:
• Asset volatility: The Schemes defined benefit obligation is calculated using a discount rate set with reference to corporate bond yields, however
each Scheme invests significantly in equities and other growth assets. These assets are expected to outperform corporate bonds in the long
term but provide volatility and risk in the short term.
• Changes in bond yields: a decrease in corporate bond yields would increase the Schemes’ defined benefit obligation, however this would be
partially offset by an increase in the value of the Schemes’ bond, insured annuity and LDI holdings.
• Inflation risk: a significant proportion of the Schemes defined benefit obligation is linked to inflation; therefore, higher inflation will result in a
higher defined benefit obligation (subject to the appropriate caps in place). Through LDI and annuities a proportion of the assets are linked to
inflation, therefore an increase in inflation would also increase the assets.
• Life expectancy: if Scheme members live longer than expected, the Schemes benefits will need to be paid for longer, increasing the Scheme’s
defined benefit obligations. This would be offset to some extent by the annuity policies held.
• Liquidity: The Bovis Scheme holds a small direct property investment with low liquidity. However, the majority of the Schemes assets are liquid.
The Trustees and Group manage risks in the Schemes through the following strategies:
• Diversification: investments are well diversified, such that the failure of any single investment would not have a material impact on the overall
level of assets.
• Investment strategy: the Trustees are required to review their investment strategy on a regular basis.
• LDI: The Schemes invest in LDI assets, whose investment returns are expected to partially hedge interest rates and inflation movements.
The Company is recognising a surplus as the rules of each scheme state that it will be entitled to any surplus remaining if the Schemes are run on
until the last members exit the Schemes.
Retirement benefit obligations
The Group makes contributions to three defined benefit schemes that provide pension benefits for employees upon retirement.
Fair value of plan scheme assets
Present value of funded obligations
Recognised asset for defined benefit obligations
Movements in the net asset for defined benefit obligations recognised in the balance sheet
Net asset for defined benefit obligations at 1 January
Acquired with the Acquisition
Contributions received
Expense recognised in the income statement
Loss recognised in equity
Net asset for defined benefit obligations at 31 December
Reconciliation to statement of comprehensive income
Actuarial losses: changes in financial assumptions
Actuarial (gains) / losses: changes in demographic assumptions
Actuarial losses: experience different from assumed
Total actuarial gains
Actual return on assets, less interest
Total charge to equity
The cumulative loss recognised in equity to date is £32.6million (2019: £20.9 million).
182 | Financial statements
2020
£000
2019
£000
(429,185)
(132,271)
420,108
9,077
127,765
4,506
2020
£000
(4,506)
(5,646)
(11,588)
1,009
11,654
(9,077)
2020
£000
53,507
(291)
400
2019
£000
(1,381)
-
(5,712)
471
2,116
(4,506)
2019
£000
14,170
376
872
53,616
15,418
(41,962)
(13,302)
11,654
2,116
Notes to the financial statements continued
Change in defined benefit obligation over the year
Defined benefit obligation at beginning of year
Acquired with the Acquisition
Net interest cost
Actual benefit payments by the scheme
Loss/(gain) on change of assumptions:
Actuarial loss: experience differing from that assumed
Actuarial (gain)/loss: changes in demographic assumptions
Actuarial loss: changes in financial assumptions
Defined benefit obligation at end of year
Change in scheme assets over the year
Fair value of scheme assets at beginning of year
Acquired with the Acquisition
Interest income
Actual benefit payments by the scheme
Actual Group contributions
Gain on assets
Administration costs
2020
£000
127,765
247,523
6,981
(15,777)
400
(291)
53,507
420,108
2020
£000
132,271
253,169
7,271
(15,777)
11,588
41,962
(1,299)
2019
£000
115,215
-
3,032
(5,903)
875
376
14,170
127,765
2019
£000
116,596
-
3,138
(5,903)
5,712
13,305
(577)
Fair value of scheme assets at end of year
429,185
132,271
The major categories of scheme assets are as follows:
Return seeking
Equities
Other
Bonds
Property
Cash
Insured annuities
Liability driven instruments
Total market value of assets
2020
£000
2019
£000
141,301
63,317
71,159
3,415
13,145
89,402
110,763
429,185
19,500
3,530
7,578
-
38,346
132,271
All pension scheme assets have a quoted market price in an active market, apart from property investments, which are directly held.
The Schemes’ assets were invested in cash, bonds, equities, insured annuities and liability driven instruments (“LDIs”). The value of liabilities of a
defined benefit pension scheme is particularly sensitive to changes in the discount rate applied to future liabilities (which is determined by the
long-term yield on investment grade corporate bonds or gilts) and the level of inflation (see sensitivity analysis table below). The schemes hold
matching assets (bonds, insured annuities and LDIs) which aim to hedge changes in the value of the schemes’ liabilities. Changes in the discount
rate and inflation would therefore be partially offset by a change in the value of assets.
Vistry Group PLC | vistrygroup.co.uk | 183
Notes to the financial statements continued
Expense recognised in the income statement
Administration expenses
Net interest credit
Expense recognised in the income statement
Assumptions
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
Group
Discount rate at 31 December
Inflation - RPI
- CPI
The above assumptions for the year ended 31 December 2020 are in respect of all three Schemes.
Sensitivity analysis
Assumption
Discount rate
RPI and CPI inflation
Assumed life expectancy
Remaining years of life
Men
Women
2020
£000
1,299
(290)
1,009
2020
%
1.3
3.0
2.5
2019
%
1.9
3.0
2.0
2019
£000
577
(106)
471
2018
%
2.7
3.2
2.2
Change in
assumption
Change in defined
benefit obligation
+0.5%pa / -0.5%pa
-£33.6m / +£42.0m
+0.5%pa / -0.5%pa
+£25.2m / -£25.2m
+1 year
+£16.8m
Current age at 43
Current age at 63
26.8
28.9
25.0
27.1
Limitations of the sensitivity analysis
These calculations provide an approximate guide to the sensitivity of results and may not be as accurate as a full valuation carried out on these
assumptions. Each assumption change is considered in isolation, which in practice is unlikely to occur, as changes in some of the assumptions are
correlated. The Schemes invest in matching assets (LDI, insured annuities and bonds) which aim to hedge changes in the value of the Schemes’
liabilities. Changes in the discount rate and inflation would therefore be partially offset by a change in the value of the Schemes’ assets.
2020
£000
2019
£000
2018
£000
2017
£000
2016
£000
Fair value of scheme assets
429,185
132,271
116,596
126,355
119,004
Present value of defined benefit obligations
420,108
127,765
115,215
124,244
125,594
Surplus/(deficit) in the scheme
9,077
4,506
1,381
2,111
(6,590)
The trustees of each scheme are required to carry out actuarial valuations every 3 years.
The most recent actuarial valuation for the Bovis Homes Pension Scheme was carried out as at 30 June 2019. The results have highlighted a
funding deficit of £10.5m. To eliminate the deficit, the Group have paid a contribution of £5.5m in January 2020 and have agreed to pay further
contributions of £2.0m before 31 January 2022 and £1.0m before 31 January 2023. Additionally, the Group have agreed to pay £0.2m per annum
to cover administrative expenses.
The most recent actuarial valuation for the Galliford Try Final Salary Pension Scheme was at 30 June 2018 and was carried out by LCP, the
Scheme Actuary. The valuation highlighted a funding shortfall of £5.5m. Following the acquisition, a Schedule of Contributions was agreed in
January 2020, which sets out that the Group will pay £6.7m by 31 January 2021 and £4.7m between February 2021 and September 2022.
The most recent actuarial valuation for the Kendall Cross (Holdings) Limited Pension & Life Assurance Scheme was as at 13 November 2017
and was carried out by the Scheme Actuary. The valuation highlighted a funding shortfall of £0.9m. To eliminate the deficit, a Schedule of
Contributions was agreed in February 2019 which sets out that the Group will pay £0.9m by 30 November 2023.
All three schemes are closed to accrual and therefore no further contributions are required to cover the cost of future service accrual.
Alongside the latest valuation and the recovery plan the Company has also agreed the principles of a longer-term plan to de-risk the pension
scheme assets and liabilities position.
Expected contributions to post-employment benefit plans for the year ending 31 December 2021 are £3.1m.
184 | Financial statements
Notes to the financial statements continued
5.11 Related party transactions
Transactions between fellow subsidiaries, which are related parties, have been eliminated on consolidation, as have transactions between the
Company and its subsidiaries during this year.
Transactions between the Group, Company and key management personnel in the year ended 31 December 2020 were limited to those relating
to remuneration, which are disclosed on pages 104 to 119 in the remuneration report.
Mr. Greg Fitzgerald, Group Chief Executive, is non-executive Chairman of Ardent Hire Solutions (“Ardent”). The Group hires forklift trucks
from Ardent.
Mr. Ian Baker, is the Managing Director of Baker Estates Ltd where Mr Greg Fitzgerald is a majority shareholder. The Group receives advisory
services from Ian Baker’s consultancy company IB (SW).
Mr. Graham Prothero, appointed as Chief Operating Officer on 3 January 2020, is non-executive Director and Chair of the Audit Committee of
Marshalls PLC. The Group incurred costs with Marshalls PLC in relation to landscaping services.
Ms. Katherine Innes Ker, is a non-executive director of Forterra PLC and Vistry Group PLC. The Group incurred costs with Forterra PLC in relation
to the supply of bricks.
The total net value of transactions with related parties excluding joint ventures were as follows:
Trading transactions
Ardent
IB (SW)
Marshalls PLC
Forterra PLC
Expenses paid to related parties
Amounts payable to related parties
Amounts owed by related parties
Year ended
31 Dec 2020
£000
Year ended
31 Dec 2019
£000
31 Dec 2020
£000
31 Dec 2019
£000
31 Dec 2020
£000
31 Dec 2019
£000
2,498
56
21
1,321
2,736
20
19
545
632
-
-
115
274
67
-
98
-
-
-
-
-
-
-
-
Transactions between the Group and its joint ventures are disclosed as follows:
Trading transactions
Non-trading transactions
Balances with joint ventures
Sales to related parties
Interest income and dividend
distributions from related parties
Year ended
31 Dec 2020
£000
129,663
-
Year ended
31 Dec 2019
£000
6,257
-
Year ended
31 Dec 2020
£000
-
45,014
Year ended
31 Dec 2019
£000
-
77
Amounts owed by related parties
Amounts owed to related parties
31 Dec 2020
£000
323,650
31 Dec 2019
£000
6,232
31 Dec 2020
£000
20,157
31 Dec 2019
£000
205
Sales to related parties including joint ventures are based on normal commercial terms available to unrelated third parties. The loans made to
joint ventures bear interest at rates of between 3.5% and 5.1%; all balances with related parties will be settled in cash.
There have been no other related party transactions in the financial year which have materially affected the financial performance or position of
the Group, and which have not been disclosed.
Vistry Group PLC | vistrygroup.co.uk | 185
Notes to the financial statements continued
5.12 Reconciliation of Return on Capital Employed performance measure
The definition of return on capital employed (ROCE) has been amended in the period in order to reflect the enlarged Group and specifically the
contribution of joint ventures to the Group’s financial position and performance. The exclusion of exceptional costs and amortisation of acquired
intangible assets in the adjusted operating profit measure allows the assessment of the underlying operational performance of the Group.
2019 has been restated on this basis. The terms of existing share based payment arrangements have not been amended for this change in definition.
Adjusted operating profit (see note 2.2)
Opening total equity
Deduct: intangible assets
Deduct: net cash
Opening capital employed
Closing total equity
Deduct: goodwill
Deduct: intangible assets
Deduct: net cash
Closing capital employed
Average capital employed (note 1)
ROCE including share of joint ventures
Note 1: Average of opening and closing capital employed for the year.
5.13 Alternative performance measures
2020
£000
2019
£000
(restated)
171,023
194,355
1,271,966
1,061,068
4,336
361,962
905,668
1,079
126,816
933,173
2,195,082
1,271,966
547,509
143,585
37,885
1,466,103
1,185,885
14.4%
-
4,336
361,962
905,668
919,421
21.1%
The Group uses alternative performance measures which are not defined within IFRS. The Directors use these alternative performance measures,
along with IFRS measures, to assess the operational performance of the Group. New alternative performance measures have been implemented
in 2020 in order to reflect the enlarged Group, specifically the contribution of the joint venture investments now held and the impact of
amortisation of intangibles which were recognised on acquisition of Linden and Partnerships (refer to note 5.14).
The definition and reconciliation of financial alternative performance measures used to IFRS measures are shown below:
Adjusted revenue
Adjusted revenue is defined as revenue including share of joint ventures’ revenue:
Revenue per Group Income Statement
Share of joint ventures’ revenue
Adjusted revenue
Adjusted gross profit
2020
£000
2019
£000
1,811,727
1,130,768
228,387
8,479
2,040,114
1,139,247
The definition of adjusted gross margin has been amended in the period to reflect the enlarged Group and the contribution of joint ventures to
the Group’s financial results. The exclusion of exceptional costs included within gross margin allows the assessment of the underlying performance
of the Group at gross margin:
Gross Profit per Group Income Statement
Other operating income
Exceptional cost of sales
Share of joint ventures’ gross profit
Adjusted gross profit
186 | Financial statements
2020
£000
2019
£000
246,896
242,756
26,422
10,975
34,472
10,675
-
1,885
318,765
255,316
Notes to the financial statements continued
Adjusted operating profit
Adjusted operating profit is defined as operating profit including share of joint ventures’ operating profit, before exceptional expenses and
amortisation of acquired intangibles:
Operating profit per Group Income Statement
Exceptional expenses
Amortisation of acquired intangibles
Share of joint ventures’ operating profit
Adjusted operating profit
Adjusted profit before tax
2020
£000
91,723
30,984
14,240
34,076
2019
£000
179,721
12,846
-
1,788
171,023
194,355
Adjusted profit before tax is defined as profit before tax before exceptional expenses and amortisation of acquired intangibles:
Profit before tax per Consolidated Income Statement
Exceptional expenses
Amortisation of acquired intangibles
Adjusted profit before tax
5.14 Business combinations
2020
£000
98,664
30,984
14,240
2019
£000
174,753
13,476
-
143,888
188,229
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a
subsidiary, are the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests
issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. Acquisition costs are expensed as incurred as required by IFRS 3 “Business combinations”.
On 3 January 2020, the Group acquired the Linden and Partnerships and Regeneration businesses from Galliford Try PLC for a consideration of
£1,233.5m. This investment in subsidiaries has been reflected in the Company balance sheet shown on page 148. The acquisition positions the
Group as a top five national housebuilder by volume, has expanded the Group’s presence across the UK and into Yorkshire and established the
Group as one of the leaders in the highly attractive, high-growth partnerships business.
Linden Homes is a top UK housebuilder, and Vistry Partnerships is a market leading partnerships business. The combination of these businesses
with the existing Vistry business will create the capacity to deliver more than 14,000 new units per year over the medium term, deliver an
enhanced customer proposition, enhance the Group’s geographical footprint, realise synergies and strengthen the senior management team.
The acquisition was of 100% of the share capital and control of the holding companies Vistry (Jersey) Limited (formerly Goldfinch (Jersey) Limited)
and Vistry Partnerships Limited (formerly Galliford Try Partnerships Limited) and all of their subsidiaries, which are identified in Note 5.16.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration
Cash consideration (iv)
Shares in Vistry Group PLC issued
Total purchase consideration
76,300
815,698
891,998
301,800
39,685
341,485
1,233,483
Attributable to
the acquisition
of Linden
£’000
Attributable to
the acquisition of
Partnerships
£’000
Total
£’000
378,100
855,383
The share consideration included 63,739,385 shares with nominal value of £0.50 per share. £823.5m has been recognised within the merger
reserve in relation to these consideration shares issued, being the excess of the share price on the date of issue over nominal value of the shares.
In addition to the above cash and share consideration, the Group assumed a liability with fair value of £108.2m for notes payable in relation to the
acquisition of Partnerships, included within borrowings in the table on the next page.
Vistry Group PLC | vistrygroup.co.uk | 187
Notes to the financial statements continued
The assets and liabilities recognised as a result of the acquisition are as follows:
(Bank overdraft)/Cash and cash equivalents
Property, plant and equipment
Right-of-use assets
Intangible assets
Investments
Retirement benefit asset
Inventories
Amounts owed by joint ventures
Trade and other receivables
Trade and other payables
Borrowings
Lease liabilities
Provisions
Net deferred tax asset / (liability)
Net identifiable assets acquired
Goodwill
Linden Fair value
3 January 2020
£’000
Partnerships Fair value
3 January 2020
£’000
(35,368)
295
10,757
54,800
49,527
5,646
606,371
208,034
98,983
(322,797)
-
(10,758)
(17,706)
15,886
663,670
228,328
891,998
32,367
1,783
10,207
100,224
6,507
-
103,401
74,439
157,928
(326,865)
(108,219)
(10,207)
(4,750)
(14,511)
22,304
319,181
341,485
Total Fair value
3 January 2020
£’000
(restated)
(3,001)
2,078
20,964
155,024
56,034
5,646
709,772
282,473
256,911
(649,662)
(108,219)
(20,965)
(22,456)
1,375
685,974
547,509
1,233,483
The acquired intangibles include the Linden Homes and Drew Smith brand names, the customer relationships within the Linden and Partnerships
businesses, and the secured contracts of the Partnerships business. The acquired intangible assets have estimated useful lives of between 4 and
25 years.
The goodwill for Linden reflects intangible assets which do not qualify for separate recognition including relationships with private customers, and
the assembled workforce, in addition to synergies that will be achieved as an enlarged business.
The goodwill for Partnerships reflects their strong position in the market and future prospects, as well as the assembled workforce and synergies
that will be achieved as an enlarged business.
None of the goodwill is expected to be deductible for tax purposes.
Current period
(i) Acquisition-related costs
Acquisition-related costs of £20.0m are included within exceptional administrative expenses in the Group Income Statement.
(ii) Acquired receivables
The fair value of trade and other receivables in Linden is £99.0m and includes trade receivables with a fair value of £89.4m. The gross contractual
amount for trade receivables due is £104.5m, of which £0.6m is expected to be uncollectible.
The fair value of trade and other receivables in Partnerships is £157.9m and includes trade receivables with a fair value of £150.7m. The gross
contractual amount for trade receivables due is £155.7m, of which £0.1m is expected to be uncollectible.
(iii) Revenue and profit contribution
The 100% owned development sites acquired with the Linden business contributed reported revenues of £395.4m to the Group for the period
from 3 January 2020 to 31 December 2020. There would be no material difference in the contribution to revenues nor operating profit if the
acquisition had occurred on 1 January 2020. Due to the full integration of the Linden business within the first half of the year it is not possible to
calculate the impact of the Linden business to the operating profit of the Group for the period from 3 January 2020 to 31 December 2020.
The acquired Partnerships business contributed revenues of £640.8m and operating profit of £24.1m to the group for the period from 3 January
2020 to 31 December 2020. There would be no material difference in the contribution to revenues nor operating profit if the acquisition had
occurred on 1 January 2020.
(iv) Consideration
At the balance sheet date, £13.5m was receivable by the Group in relation to reimbursement of cash consideration previously paid.
5.15 Post balance sheet events
On 23 February 2021, an amendment to the HSBC term loan facility was agreed to extend the maturity to January 2023.
There were no other post balance sheet events.
5.16 Group undertakings
The subsidiary and joint ventures in which the Group has interests are incorporated in Great Britain. In each case their principal activity is related
to housebuilding and estate development. As at 31 December 2020, the Group had 120 subsidiaries, which are listed on the next page (with the
company names as at 4 March 2021).
188 | Financial statements
Notes to the financial statements continued
Registered
office
Country of
incorporation
Ownership interest in
ordinary shares
2020 %
2019 %
Registered
office
Country of
incorporation
Ownership interest in
ordinary shares
2020 %
2019 %
Bovis Country Homes Limited
Blythe Park LLP
Bovis Homes (Broadbridge Heath) Limited
Bovis Homes (Quest) Company Limited
Bovis Homes BVC Limited
Bovis Homes Cornwall Limited
Bovis Homes Developments Limited
Bovis Homes Eastern Limited
Bovis Homes Freeholds Limited
Bovis Homes Insulation Limited
Bovis Homes Limited
Bovis Homes Midlands & Northern Limited
Bovis Homes North Whiteley LLP
Bovis Homes Pension Scheme Trustee Limited
Bovis Homes Projects Limited
Bovis Homes South East Limited
Bovis Homes Southern Limited
Bovis Homes Wessex Limited
Brunel Street Works Energy
Chartdale Limited*
Drew Smith Homes Limited*
Drew Smith Limited*
Elite Homes (North West) Limited
Elite Homes (Yorkshire) Limited
Elite Homes Group Limited
Emerald (Ealing) LLP*
Enhance Interiors Limited*
Fairfield Redevelopments Limited*
Gigg Lane Limited
Graylingwell Energy Services Limited*
Greyhound Regeneration LLP*
H.Newbury & Son (Builders) Limited
Hall Green JV LLP*
Hill Place Farm Developments Limited*
Kendall Cross Limited*
Kilbride Tavistock Limited
Lea Castle JV LLP*
Linden (Ashlar Court) Limited*
Linden (Beverley 2) LLP*
Linden (Beverley 3) LLP*
Linden (Beverley 4) LLP*
Linden (Beverley 5) LLP*
Linden (Beverley) LLP*
Linden (Cawston) LLP*
Linden (Highfields Caldecote) LLP*
Linden (Houghton) LLP*
Linden (St Bernard's) Limited*
Linden (Summerstown) LLP*
Linden (Thurston) LLP*
Linden Barnet LLP*
Linden Cornwall Limited*
Linden Devon Limited*
Linden First Limited*
Linden Guildford Limited*
Linden Holdings Limited*
Linden Homes (Bath Road) LLP*
Linden Homes (Blackberry Hill) LLP*
Linden Homes (Marksbury) LLP*
Linden Homes (Sherford) LLP*
Linden Homes Chiltern Limited*
Linden Homes Eastern LLP*
*Acquired on 3 January 2020.
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
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1
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1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
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1
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United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
100
100
100
-
-
-
100
-
-
100
-
-
-
100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Linden Homes South-East Limited*
Linden Homes Southern Limited*
Linden Homes Western Limited*
Linden JV No12 LLP*
Linden JV No17 LLP*
Linden JV No18 LLP*
Linden JV No19 LLP*
Linden JV No20 LLP*
Linden JVCo No5 Limited*
Linden JVCo No6 Limited*
Linden JVCo No8 Limited*
Linden JVCo No9 Limited*
Linden Limited*
Linden London (Hammersmith) Limited*
Linden London Developments Limited*
Linden London LLP*
Linden Midlands Limited*
Linden North Limited*
Linden Partnerships Limited*
Linden Properties Western Limited*
Linden South West Limited*
Linden St Albans LLP*
Linden Wates (Hungerford) Limited*
Linden Wates (Kempshott) Limited*
Linden Wates (Lovedean) Limited*
Mountsorrel JV LLP*
Nether Hall Park Open Space Management
Company Limited
Olive Farm LLP*
Orchard Homes (Pitt Manor) Limited
Oxford Land Limited
Page Johnson Properties Limited
R.T.Warren (Builders, St.Albans) Limited
Rasen Estates Limited*
Redplay Limited*
Redplay Partnerships Limited*
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Rissington Management Company Limited*
3
United Kingdom
Rosemullion Homes Limited*
The Ricardo Community Foundation*
Unitpage Limited
Vista Portsmouth Limited*
Vistry Affordable Homes Limited*
Vistry Homes Central Limited*
Vistry Homes Limited
Vistry Limited
Vistry Linden Homes Limited*
Vistry Linden Limited*
Vistry Partnerships (Wolverhampton) Limited*
Vistry Partnerships Investments Limited*
Vistry Partnerships JV NO16 LLP*
Vistry Partnerships JV NO17 LLP*
Vistry Partnerships Limited*
Vistry Partnerships North Limited*
Vistry Partnerships Yorkshire
Holdings Limited*
Vistry Partnerships Yorkshire Limited*
Vistry Pension Trustee Ltd*
Westcountry Land (Perranporth) Ltd*
Bovis Homes Scotland Limited
Knights Mount Management
Vistry (Jersey) Limited
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
9
10
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
67
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100
-
100
67
100
100
-
-
-
50
-
-
100
-
-
-
100
100
-
-
-
-
-
-
-
-
-
-
-
-
100
100
-
Vistry Group PLC | vistrygroup.co.uk | 189
Notes to the financial statements continued
At 31 December 2020 the Group had an interest in the following 72 joint ventures which have been equity accounted to 31 December and are registered
and operate in England and Wales. A number of joint ventures were acquired on 3 January 2020 as part of the Acquisition, these are marked with an
asterisk in the table below and the principal activities of these joint ventures is also housebuilding and estate development.
The directors have concluded that the group controlled IIH Oak Investors LLP, Shoo 22 Limited and Gateshead Regeneration LLP during 2020, despite
holding only 26%, 38% and 25% of the voting rights, respectively. For IIH Oak Investors LLP this is because the group is one of two partners in the entity
and a unanimous vote is required in respect of all key matters relating to the entity and to change this agreement. For Shoo 22 Limited and Gateshead
Regeneration LLP this is because the shareholding agreements in place provide joint control and rights to the net assets of the entities.
Registered
office
Country of
incorporation
Ownership interest in
ordinary shares
2020 %
2019 %
Registered
office
Country of
incorporation
Ownership interest in
ordinary shares
2020 %
2019 %
Beverley South Developments Limited*
Bishops Park Limited
Boorley Green LLP*
Bovis Homes Cambourne West LLP
Bovis Latimer (Sherford) LLP
Bovis Peer LLP
D R 4 Developments LLP*
Europa Way JV LLP*
Evolution (Saffron Walden) LLP*
Evolution (Shinfield) LLP*
Evolution Gateshead Developments LLP*
Evolution Morpeth LLP*
Evolution Newhall LLP*
Glen Parva JV LLP*
Grange Walk LLP*
Heath Farm Lane LLP*
Kilnwood Vale LLP*
Linden (Avery Hill) LLP*
Linden (Basingstoke) Limited*
Linden (Battersea Bridge Road) LLP*
Linden (Biddenham) LLP*
Linden (Brampton) LLP*
Linden (Enfield) LLP*
Linden (Hartfield Road) LLP*
Linden (Manse Farm) LLP*
Linden (Mowbray View 2) LLP*
Linden (Northstowe) LLP*
Linden (Rainham) LLP*
Linden (Sayers Common) LLP*
Linden (Vencourt) LLP*
Linden (York Road) LLP*
Linden and Dorchester Limited*
Linden and Dorchester Portsmouth Limited*
Linden Wates (Barrow Gurney) Limited*
Linden Wates (Bricket Wood) Limited*
Linden Wates (Cranleigh) Limited*
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
-
50
-
50
50
50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Linden Wates (Dorking) Limited*
Linden Wates (Horsham) LLP*
Linden Wates (Ravenscourt Park) Limited*
Linden Wates (Ridgewood) Limited*
Linden Wates (Ringwood) LLP*
Linden Wates (Royston) LLP*
Linden Wates (Salisbury) LLP*
Linden Wates (The Frythe) Limited*
Linden Wates (Walberton) LLP*
Linden Wates (West Hampstead) Limited*
Linden Wates (Westbury) Limited*
Linden Wates Developments
(Chichester) Limited*
Linden Wates Developments
(Folders Meadow) Limited*
Linden/Downland Graylingwell LLP*
One Lockleaze LLP*
Opal (Earlsfield) LLP*
Opal (Silvertown) LLP*
Opal (St Bernard's) LLP*
Opal Land LLP*
Pembers LLP*
Ramsden Regeneration LLP*
Sandymoor JV LLP*
Stanton Cross Developments LLP
Vistry Latimer Collingtree LLP
West Bridgford JV LLP*
White Rock Land LLP*
Wilmington Regeneration LLP*
Gateshead Regeneration LLP*
IIH Oak Investors LLP
Gallions 2A Developments LLP*
Shoo 22 Limited*
The Piper Building Limited*
Cedar House Securities Limited*
Crest/Vistry (Epsom) LLP*
Linden Homes Westinghouse LLP*
Linden Sovereign Brockworth LLP*
*Acquired on 3 January 2020.
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
4
11
12
3
13
14
15
15
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
25
26
50
38
50
50
50
50
50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50
100
-
-
-
-
26
-
-
-
-
-
-
-
190 | Financial statements
Notes to the financial statements continued
Significant holdings in undertakings other than subsidiary and joint venture undertakings
Berkshire Land Limited
Bishop's Stortford North Consortium Limited
C.C.B.(Stevenage) Limited
Haydon Development Company Limited
Oxfordshire Land Limited
Registered office
Registered
office
Country of
incorporation
Ownership interest in ordinary shares
2020 %
2019 %
1
5
6
7
8
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
33
33
33
39
25
33
25
33
39
25
1.
2.
3.
11 Tower View, Kings Hill, West Malling, Kent, ME19 4UY
C/o Gilliespie MacAndrew LLP, 5 Atholl Crescent, Edinburgh, Scotland, EH3 8EJ, United Kingdom
Cowley Business Park, Cowley, Uxbridge, Middlesex, UB8 2AL
4. New Zealand House 15th Floor, 80 Haymarket, London, United Kingdom, SW1Y 4TE
5.
6.
7.
8.
9.
St Bride’s House, 10 Salisbury Square, London, EC4Y 8EH
Croudace House, Tupwood Lane, Caterham, Surrey, CR3 6XQ
6 Drakes Meadow, Penny Lane, Swindon, Wiltshire, SN3 3LL
Persimmon House, Fulford, York, YO19 4FE
Gateway House, 10 Coopers Way, Southend On Sea, Essex, SS2 5TE
10.
47 Esplanade, St Helier, Jersey, JE1 0BD, Jersey
11.
12.
13.
14.
15.
Bruce Kenrick House, 2 Kellick Street, London, United Kingdom, N1 9FL
Duncan House Clipston Road, Sibbertoft, Market Harborough, Leics, LE16 9UB
8 Gleneagles Court, Brighton Road, Crawley, West Sussex, RH10 6AD
Crest House, Pyrcroft Road, Chertsey, Surrey, KT16 9GN
Sovereign House, Basing View, Basingstoke, Hampshire, England, RG21 4FA
Vistry Group PLC | vistrygroup.co.uk | 191
Five year record - unaudited
All financial information below is presented on the basis of the IFRS in place at the time and have not been restated for the impact IFRS16, IFRS15
or IFRS9 prior to the date at which these standards became effective.
Years ended 31 December
Reported results
Revenue and profit
Revenue
Operating profit
Net financing costs
Share of result of joint ventures
Profit before tax
Tax
Profit after tax
Adjusted results
Revenue and profit
Adjusted revenue
Adjusted operating profit
Adjusted profit before tax
Balance sheet
Equity shareholders’ funds
Net cash
Capital employed
Returns
Adjusted operating margin before exceptional items (note 1)
Reported operating margin (note 2)
Return on shareholders’ funds (note 3)
Return on capital employed (note 4)
Homes (including units sold on third party owned land)
Number of Housebuilding unit completions (note 5)
Number of Partnership unit completions (note 5)
Number of partner delivery equivalent units
Housebuilding average sales price (£’000)
Mixed tenure average sales price (£’000)
Adjusted EPS before exceptional items
Earnings per share (p) before exceptional items
Earnings per share (p) after exceptional items
Dividends per share
Paid (p)
Interim paid and final proposed (p) (note 6)
2020
£m
2019
£m
2018
£m
2017
£m
2016
£m
1,811.7
1,130.8
1,061.4
1,028.2
1,054.8
91.7
(7.9)
14.9
98.7
(21.9)
76.8
179.7
174.2
(6.8)
1.8
174.8
(36.4)
138.4
(6.1)
-
168.1
(31.5)
136.6
121.2
(7.2)
-
114.0
(22.7)
91.3
160.0
(5.6)
0.3
154.7
(33.9)
120.8
2,040.1
1,139.3
1,061.4
1,028.2
1,054.8
171.0
143.9
194.4
188.2
174.2
168.1
121.2
120.8
160.0
154.7
2,195.1
1,272.0
1,061.1
1,056.6
1,015.9
(37.9)
(362.0)
(126.8)
(144.9)
2,157.2
910.0
934.3
911.7
(38.6)
977.3
8%
5%
6%
14%
4,652
1,479
2,823
302.5
203.9
57.9
34.8
-
20.0
17%
16%
11%
21%
16%
16%
13%
19%
12%
12%
9%
13%
15%
15%
13%
17%
3,867
3,759
3,645
3,977
-
-
-
-
-
-
-
-
280.2
273.2
272.4
254.9
-
-
-
-
104.3
94.6
101.6
101.6
58.5
61.5
96.5
57.0
73.1
68.0
45.0
47.5
90.1
90.1
41.3
45.0
Note 1: Adjusted operating margin has been calculated as adjusted operating profit over adjusted revenue.
Note 2: Reported operating margin has been calculated as operating profit over revenue.
Note 3: Return on shareholders’ funds has been calculated as profit after tax over opening shareholders’ funds.
Note 4: Return on capital employed has been calculated as adjusted operating profit over the average of opening and closing shareholders’ funds plus net debt or less net cash,
less goodwill and intangibles. 2016 to 2019 ROCE has been restated on this basis.
Note 5: Completions are shown including 100% of joint venture completions.
Note 6: In 2019 a second interim dividend was declared, not a final dividend. 61.5p includes this second interim dividend.
192 | Financial statements
Notice of meeting
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should seek your
own advice from a stockbroker, solicitor, accountant or other professional adviser authorised under the Financial Services and Markets Act
2000 immediately.
If you have sold or otherwise transferred all of your shares, please pass this document together with the accompanying documents to the
purchaser or transferee, or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds
the shares.
Impact of Covid-19 on the 2021 Annual General Meeting
In light of the current UK Government Covid-19 restrictions in respect of public gatherings and non-essential travel, the Board has determined
that the Annual General Meeting (‘AGM’) will be convened with a minimum number of Shareholders physically present in order to conduct the
business of the meeting. In the interests of protecting the health and safety of our Shareholders, colleagues and the wider public, Shareholders
will not be admitted to the AGM. Our advisers and other guests have also been asked not to attend.
While physical attendance at the AGM will not be permitted, Shareholders are invited to attend the AGM electronically via a live webcast.
The webcast is not interactive, and it will not be possible for Shareholders watching the virtual meeting to vote or ask questions remotely.
Shareholders will instead be able to vote on the Resolutions by proxy in advance of the meeting. The webcast will be broadcast live at 12 noon on
Monday 17th May 2021, the day of the AGM. A guide on how Shareholders can watch the AGM webcast can be found on page 195 and details on
how Shareholders can submit their proxy vote by post, online or through CREST are set out below in the notes to this notice on page 195. As third
party proxies will not be allowed to physically attend the AGM, Shareholders are strongly encouraged to appoint the Chairman of the AGM to act
as their proxy and provide voting instructions in advance of the AGM. The appointment of any person other than the Chairman of the AGM will
result in that member’s votes not being cast.
The Board recognises the ongoing importance of engagement with Shareholders at this time. Shareholders are invited to submit any questions to
the Board in advance of the AGM by email to investor.relations@vistrygroup.co.uk or by post to the Group Company Secretary at 11 Tower View,
Kings Hill, West Malling, Kent ME19 4UY. We will consider all questions received and provide a written response. Responses to questions will be
provided on our website at vistrygroup.co.uk/investors/shareholders/agm/2021.
The Company continues to closely monitor the situation in relation to Covid-19. Should any changes to the arrangements be required, updates
will be communicated to Shareholders before the AGM through the Company’s website at vistrygroup.co.uk/investors/shareholders/agm/2021
and, where appropriate, by Regulatory Information Service announcement.
NOTICE IS HEREBY GIVEN that the 2021 Annual General Meeting of Vistry Group PLC (the “Company”) will be held at 11 Tower View, Kings Hill,
West Malling, Kent ME19 4UY on Monday, 17 May 2021 at 12.00 noon for the following purposes:
Ordinary resolutions
Reports and accounts
1. To receive the audited accounts of the Company for the year ended 31 December 2020 and the reports of the directors and auditors.
Remuneration report
2. To approve the directors’ remuneration report in the form set out in the Company’s annual report and accounts for the year ended
31 December 2020 in accordance with section 439 of the Companies Act 2006.
Dividend
3. To declare the final dividend recommended by the directors.
Directors
4. To re-appoint Ian Paul Tyler as a director of the Company.
5. To re-appoint Margaret Christine Browne as a director of the Company.
6. To re-appoint Ralph Graham Findlay as a director of the Company.
7. To re-appoint Nigel Keen as a director of the Company.
8. To re-appoint Michael John Stansfield as a director of the Company.
9. To re-appoint Katherine Innes Ker as a director of the Company.
10. To re-appoint Gregory Paul Fitzgerald as a director of the Company.
11. To re-appoint Earl Sibley as a director of the Company.
12. To re-appoint Graham Prothero as a director of the Company.
Auditors
13. To re-appoint PricewaterhouseCoopers LLP as auditors of the Company.
14. To authorise the directors to determine the remuneration of the auditors.
Vistry Group PLC | vistrygroup.co.uk | 193
Notice of meeting continued
Authority to allot shares
15. That the directors be generally and unconditionally authorised to allot shares in the Company and to grant rights to subscribe for or to convert
any security into shares in the Company pursuant to and in accordance with section 551 of the Companies Act 2006 (‘the 2006 Act’):
(a) up to an aggregate nominal amount of £37,005,511; and
(b) comprising equity securities (as defined in the 2006 Act) up to an aggregate nominal amount of £74,011,022 (including within such
limit any shares issued or rights granted under paragraph (a) (above) in connection with an offer by way of a rights issue to holders of
ordinary shares in proportion (as nearly as may be practicable) to their existing holdings and so that the directors may impose any limits or
restrictions and make any arrangements which they consider necessary or appropriate to deal with fractional entitlements, record dates,
legal, regulatory or practical problems in, or under the laws of, any territory or any other matter.
Such authorities to apply (unless previously renewed, varied or revoked by the Company in a general meeting) until the conclusion of the
Annual General Meeting of the Company in 2022 or fifteen months from the date of this resolution, whichever is the earlier, but in each case
so that the Company may make offers and enter into agreements during the relevant period which would, or might, require shares to be
allotted, or rights to subscribe for or convert any security into shares to be granted, after the authority ends and the directors may allot shares
and grant rights under any such offer or agreement as if the authority had not ended.
Special resolutions
Notice of general meetings
16. That a general meeting other than an Annual General Meeting may be called on not less than 14 clear days’ notice.
Authority to disapply pre-emption rights
17. That if resolution 15 is passed, and in place of all existing powers, the directors be authorised pursuant to section 570 and 573 of the 2006 Act
to allot equity securities (as defined in the 2006 Act) wholly for cash under the authority given by that resolution as if section 561 of the 2006
Act did not apply to any such allotment or sale, such power:
(a) to expire (unless previously renewed, varied or revoked by the Company in a general meeting) at the conclusion of the Annual General
Meeting of the Company in 2022 or fifteen months from the date of this resolution, whichever is the earlier, but, in each case during this
period the directors may make an offer or agreement which would or might require equity securities to be allotted after the power ends
and the directors may allot equity securities under any such offer or agreement as if the power had not ended;
(b) to be limited to the allotment of equity securities in connection with an offer of equity securities (but in the case of the authority granted under
resolution 15(b) by way of a rights issue only) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings
and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate
to deal with fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other
matter; and
(c) to be limited, in the case of the authority granted under resolution 15(a), to the allotment of equity securities for cash otherwise than
pursuant to paragraph (b) up to an aggregate nominal amount of £5,556,383.
This power applies in relation to a sale of shares which is an allotment of equity securities by virtue of section 560(3) of the 2006 Act as if in
the first paragraph of this resolution the words ‘under the authority given by that resolution’ were omitted.
Authority to purchase own shares
18. That the Company be and is hereby granted general and unconditional authority, for the purposes of section 701 of the 2006 Act, to make
market purchases (within the meaning of section 693(4) of the 2006 Act) of the ordinary shares of 50 pence each in its capital PROVIDED
THAT:
(a) this authority shall be limited so that the number of ordinary shares of 50 pence each which may be acquired pursuant to this authority
does not exceed an aggregate of 22,225,532 ordinary shares and shall expire at the conclusion of the next Annual General Meeting of the
Company in 2022 (except in relation to the purchase of ordinary shares the contract for which was concluded before such time and which
is executed wholly or partly after such time);
(b) the maximum (exclusive of expenses) price which may be paid for each ordinary share shall be the higher of: (i) an amount equal to 105 per
cent of the average of the middle market quotations for an ordinary share of the Company as derived from the London Stock Exchange
Daily Official List for the five business days immediately preceding the day on which the Company agrees to buy the ordinary shares; and (ii)
an amount equal to the higher of the price of the last independent trade of an ordinary share and the highest current independent bid for
an ordinary share as derived from the London Stock Exchange Trading System (SETS); and
(c) the minimum price (exclusive of expenses) which may be paid for an ordinary share shall be 50 pence.
Vistry Group PLC
11 Tower View
Kings Hill
West Malling
Kent ME19 4UY
194 | Supplementary information
By Order of the Board
M T D Palmer
Group Company Secretary
19 March 2021
Notice of meeting continued
Notes:
Attending electronically
(i)
In light of the current UK Government Covid-19 restrictions in respect of public gatherings and non-essential travel, members should
not attempt to physically attend the AGM. Members are instead requested to log-in to the meeting here: https://brrmedia.news/
Vistry_AGM2021 using their unique shareholder reference and PIN. The webcast will be made live at 12 noon on Monday 17th May 2021,
the day of the AGM. Members should note that accessing any such webcast will be for information purposes only and will not be regarded
as being formally present at the meeting. No arrangements will be made for members to vote or ask questions remotely during the AGM,
so members should ensure that all votes and questions are submitted in the appropriate manner in advance of the meeting. For further
information, please refer to our website at vistrygroup.co.uk/investors/shareholders/agm/2021.
(ii)
Please note that an active internet connection is required in order to access the AGM. It will be the members’ responsibility to ensure
connectivity for the duration of the meeting, and the Chairman has full discretion to treat the AGM as continuing despite any technological
issues that may arise in each individual case.
Voting
(iii)
Voting on all substantive resolutions will be by way of a poll. When announcing the results of the poll vote, the Company will disclose the
total number of votes in favour and against as well as the number of abstentions on the Company website (vistrygroup.co.uk) and through
a RIS announcement. If a member returns both paper and electronic proxy instructions, those received last by the Registrar before the latest
time for receipt of proxies will take precedence. Members are advised to read the website terms and conditions of use carefully.
Appointment of proxies
(iv)
(v)
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 and section 360B(2) of the 2006 Act, the Company gives notice
that only holders of ordinary shares entered on the register of members no later than 8.00pm on 13 May 2021 (or, in the event of any
adjournment, 8.00pm on the day which is two days before the adjourned meeting) will be entitled to attend and vote at the meeting.
A member may vote in respect of the number of ordinary shares registered in the member’s name at that time. Changes to entries on the
register after the relevant deadline shall be disregarded in determining the rights of any person to attend or vote at the meeting.
A member is entitled to appoint another person as his or her proxy to exercise all or any of his or her rights to attend and to speak and vote
at the AGM. In view of the UK Government’s latest guidance, members should not attempt to physically attend the AGM and are strongly
encouraged to appoint the Chairman of the meeting as their proxy and provide voting instructions to the proxy in advance of the AGM.
Appointment of any person other than Chairman of the AGM would result in a member’s votes not being cast, as third party proxies will
not be permitted entry to the AGM unless the UK Government’s guidance and legislation in respect of Covid-19 change prior to the date of
the AGM.
(vi)
Participants of the Vistry Group Share Incentive Plan may instruct the trustee to vote on their behalf on a poll.
(vii)
A proxy form which may be used to make such appointment and give the proxy instructions accompanies this Notice. If you do not have a
proxy form and believe that you should have one, or if you require additional forms, please contact the Company’s Registrar, Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY.
(viii)
The proxy form must be executed by or on behalf of the member making the appointment. Any corporation which is a member can appoint
one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in
relation to the same shares. A corporation may execute the form(s) of proxy either under its common seal or under the hand of a duly
authorised officer, attorney or other authorised person.
(ix)
(x)
(xi)
The proxy form and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power or
authority must be received at the office of the Company’s Registrar, Computershare Investor Services PLC, The Pavilions, Bridgwater Road,
Bristol BS99 6ZY or received via the Computershare website, (investorcentre.co.uk/eproxy) (full details of the procedures are given in the
notes to the proxy form enclosed with the report and accounts and on the website) not less than 48 hours (excluding non-working days)
before the time for holding the meeting.
If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been
agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io.
Your proxy must be lodged by 12 noon on 13 May 2021 in order to be considered valid. Before you can appoint a proxy via this process
you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be
bound by them and they will govern the electronic appointment of your proxy.
To appoint one or more proxies or to give an instruction to a proxy (whether previously appointed or otherwise) via the CREST system,
CREST messages must be received by the issuer’s agent (ID number 3RA50) not later than 48 hours (excluding non-working days) before the
time appointed for holding the meeting (and any adjournment of the meeting) in accordance with the procedures described in the CREST
Manual. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp generated by the CREST system)
from which the issuer’s agent is able to retrieve the message. After this time any change of instructions to a proxy appointed through CREST
should be communicated to the proxy by other means. CREST personal members or other CREST sponsored members, and those CREST
members who have appointed voting service provider(s) should contact their CREST sponsor or voting service provider(s) for assistance
with appointing proxies via CREST. For further information on CREST procedures, limitations and system timings please refer to the
CREST manual. The Company may treat as invalid a proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
Vistry Group PLC | vistrygroup.co.uk | 195
Notice of meeting continued
(xii)
CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited
does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply
in relation to the input of CREST proxy instructions and the appropriate CREST message must be properly, authenticated in accordance with
Euroclear’s specifications and must contain the information required for such instructions and described in the CREST Manual (available
via euroclear.com CREST). It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal
member, or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s)
take(s) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time.
In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to
those sections of the CREST manual concerning practical limitations of the CREST system and timings.
(xiii)
Any person to whom this Notice is sent who is a person nominated under section 146 of the 2006 Act to enjoy information rights
(a “Nominated Person”) may have a right, under an agreement between him and the member by whom he was nominated, to be
appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy appointment right or
does not wish to exercise it, they may, under any such agreement, have a right to give instructions to the member as to the exercise of
voting rights. The statement of the rights of members in relation to the appointment of proxies in paragraph (v) above does not apply to
Nominated Persons. The rights described in these paragraphs can only be exercised by members of the Company.
(xiv)
As at 19 March 2021 (being the last practicable date prior to the publication of this Notice) the Company’s issued share capital consists
of 222,255,324 ordinary shares, carrying one vote each on a poll. Therefore, the total voting rights in the Company as at 19 March 2021
are 222,255,324.
Audit concerns
(xv)
Under section 527 of the 2006 Act, members meeting the relevant threshold requirements set out in that section may require the Company
to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s accounts (including the auditor’s report
and the conduct of the audit) that are to be laid before the AGM; or (ii) any circumstance connected with an auditor of the Company ceasing
to hold office since the last AGM for the financial year beginning 1 January 2020 that the members propose to raise at the AGM. The Company
may not require the members requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the
2006 Act. Where the Company is required to place a statement on a website under section 527 or 528 (requirements as to website availability)
of the 2006 Act, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on
the website. The business which may be dealt with at the AGM includes any statement that the Company has been required under section 527
of the 2006 Act to publish on a website.
Shareholder requisition rights
(xvi)
Under sections 338 and 338A of the Companies Act 2006, members meeting the threshold requirements in those sections have the right
to require the Company: (a) to give, to members of the Company entitled to receive notice of the meeting, notice of a resolution which
may properly be moved and is intended to be moved at the meeting; and/or (b) to include in the business to be dealt with at the meeting
any matter (other than a proposed resolution) which may be properly included in the business unless (i) (in the case of a resolution only) it
would, if passed, be ineffective whether by reason of inconsistency with any enactment or the Company’s constitution or otherwise, (ii) it is
defamatory of any person, or (iii) it is frivolous or vexatious. Such a request may be in hard copy form or in electronic form, must identify the
resolution of which notice is to be given or the matter to be included in the business, must be authorised by the person or persons making
it, must be received by the Company not later than 5 April 2021, being the date six clear weeks before the meeting, and (in the case of a
matter to be included on the business only) must be accompanied by a statement setting out the grounds for the request.
Questions
(xvii) Shareholders are invited to submit any questions prior to the AGM by contacting the Company by email at investor.relations@vistrygroup.
co.uk or by post to the Group Company Secretary at 11 Tower View, Kings Hill, West Malling, Kent ME19 4UY by 12 noon on 14 May 2021.
Responses to questions will be provided on our website at vistrygroup.co.uk/investors/shareholders/agm/2021. No other methods of
communication will be accepted. In particular you may not use any electronic address provided either in this Notice of meeting or in any
related documents (including the Chairman’s Statement, the Annual Report 2020 and the proxy form) to communicate with the Company
for any purposes other than those expressly stated.
(xviii) The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such
answer need be given if: (i) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential
information; (ii) the answer has already been given on a website in the form of an answer to a question; or (iii) it is undesirable in the
interests of the Company or the good order of the meeting that the question be answered.
Website information
(xix)
A copy of this Notice and other information required to be published in accordance with section 311A of the 2006 Act in advance of the
AGM can be found at vistrygroup.co.uk.
Documents available for inspection
(xx)
The following documents will be available for inspection at the Company’s registered office, during normal business hours, on any weekday
(excluding public holidays) from the date of this Notice until the date of the AGM and on that date they will be available for inspection at the
place of the meeting from 11.30am until the conclusion of the meeting:
(a) copies of the directors’ service contracts;
(b) copies of the terms and conditions of appointment for each non-executive director; and
(c) the register of directors’ interests.
In view of the ongoing Covid-19 pandemic and the attendance arrangements for this year’s Annual General Meeting, we would ask you to
contact us by email at investor.relations@vistrygroup.co.uk if you would like to inspect any documents.
196 | Supplementary information
Notice of meeting continued
(xxi)
The results of the voting at the AGM will be announced through a RIS announcement and will appear on the Company’s website,
vistrygroup.co.uk, as soon as reasonably practicable following the conclusion of the AGM.
Data Protection
(xxii) Data protection statement: your personal data includes all data provided by you, or on your behalf, which relates to you as a shareholder,
including your name and contact details, the votes you cast and your Reference Number (attributed to you by the Company). The Company
determines the purposes for which and the manner in which your personal data is to be processed. The Company and any third party to
which it discloses the data (including the Company’s Registrar) may process your personal data for the purposes of compiling and updating
the Company’s records, fulfilling its legal obligations and processing the shareholder rights you exercise.
Explanatory notes to the notice of meeting
Resolutions 1 to 15 are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the votes
cast must be in favour of the resolution.
Resolutions 16 to 18 are proposed as special resolutions. This means that for each of those resolutions to be passed, at least three-quarters of the
votes cast must be in favour of the resolution.
Item 1: Reports and accounts
The directors are required to present to shareholders at the AGM the report of the directors, the strategic report and the accounts of the
Company for the year ended 31 December 2020. The report of the directors, the strategic report, the accounts and the report of the Company’s
auditors on the accounts and on those parts of the directors’ remuneration report that are capable of being audited are contained within the
Company’s annual report and accounts for the year ended 31 December 2020 (the “2020 Annual Report and Accounts”).
Item 2: Directors’ annual remuneration report
Under section 439 of the 2006 Act, the directors are required to present the directors’ remuneration report prepared in accordance with
Schedule 8 of the Large and Medium-sized Companies and Group’s (Accounts and Reports) Regulations 2008 (as amended), for the approval of
shareholders by way of an advisory vote. The directors’ remuneration report, the relevant pages of which can be found on pages 104 to 122 of
the 2020 Annual Report and Accounts, gives details of the directors’ remuneration for the year ended 31 December 2020 and sets out the way in
which the Company will implement its policy on directors’ remuneration during 2021. The Company’s auditors, PricewaterhouseCoopers LLP, have
audited those parts of the directors’ remuneration report capable of being audited and their report may be found on pages 136 to 145 of the 2020
Annual Report and Accounts.
The vote on the directors’ remuneration report is advisory in nature in that payments made or promised to directors will not have to be repaid,
reduced or withheld in the event that this resolution is not passed. However, if the vote on the directors’ remuneration report is not passed, the
directors’ remuneration policy will be presented to shareholders for approval at the next Annual General Meeting.
A copy of the directors’ remuneration policy, which was approved at the December 2019 General Meeting, is available on the website at
vistrygroup.co.uk or in hard copy on request from the Group Company Secretary.
Items 3: Final dividend
Subject to the declaration of the final dividend at the meeting, the dividend will be paid on 21 May 2021 to shareholders on the register at the
close of business on 26 March 2021.
Items 4 to 12: Re-appointment of directors
The UK Corporate Governance Code (the “Code”) requires FTSE 350 companies to put all directors forward for re-appointment by shareholders on
an annual basis. The purpose of this requirement is to increase accountability to shareholders. Accordingly, all the directors of the Company will
retire at the AGM and offer themselves for re-appointment.
The Code contains provisions dealing with the re-appointment of non-executive directors. In relation to the re-appointment of Chris Browne,
Ralph Findlay, Nigel Keen, Mike Stansfield and Katherine Innes Ker as non-executive directors, the Chairman has confirmed following the formal
performance evaluation conducted during early 2021 that they continue to be effective in and demonstrate commitment to their roles, including
commitment of time for Board and committee meetings. In reaching its recommendations, the Board also considered the individual skills and
experience brought by each director, their relevance to the Company and its particular circumstances, and the overall skill set of the Board.
Chris Browne provides a strong commercial and operational background in a consumer facing industry. Ralph Findlay adds strong commercial,
financial and general management expertise, again from a consumer facing industry. Nigel Keen brings an in-depth construction and property
background and experience of managing property strategy and portfolios, once again from a consumer facing industry. Mike Stansfield brings
considerable housing developer experience. Katherine Innes Ker brings a broad range of business knowledge and skills to the Board. Ian Tyler,
non-executive Chairman, has considerable construction industry knowledge and international business experience.
The Board believes that the directors’ combined experience and contribution is a great asset to the Board and the Company and continues to be
important to the Company’s long-term sustainable success. The Board, therefore, strongly supports and recommends the re-appointment of the
directors to shareholders.
Biographical details of all the directors can be found on pages 82 to 83 of the 2020 Annual Report and Accounts.
Items 13 and 14: Appointment of auditors and auditors’ remuneration
The auditors of a company must be appointed at each general meeting at which accounts are presented. Resolution 13 proposes the re-appointment
of the Company’s existing auditors, PricewaterhouseCoopers LLP, as the Company’s auditors, for a further year. PricewaterhouseCoopers LLP were
first appointed at the 2015 Annual General Meeting. Resolution 14 gives authority to the directors to determine the auditors’ remuneration.
Vistry Group PLC | vistrygroup.co.uk | 197
Explanatory notes to the notice of meeting continued
Item 15: Authority to allot shares
The authority given to your directors at last year’s AGM under section 551 of the 2006 Act to allot shares expires on the date of the forthcoming
Annual General Meeting. Accordingly, this resolution seeks to grant a new authority under section 551 to authorise the directors to allot shares
in the Company or grant rights to subscribe for, or convert any security into, shares in the Company up to an aggregate nominal amount of
£37,005,511 and also gives the Board authority to allot, in addition to these shares, further of the Company’s shares up to an aggregate nominal
amount of £74,011,022 in connection with a pre-emptive offer to existing members by way of a rights issue (with exclusions to deal with fractional
entitlements to shares and overseas shareholders to whom the rights issue cannot be made due to legal and practical problems). This is in
accordance with the latest institutional guidelines published by the Investment Association. This authority will expire at the conclusion of the
next Annual General Meeting (or, if earlier, 15 months from the date of the resolution). The directors intend to seek renewal of this authority at
subsequent Annual General Meetings.
The amount of £37,005,511 represents less than 33.3 per cent of the Company’s total ordinary share capital in issue as at 19 March 2021
(being the latest practicable date prior to publication of this Notice). The amount of £74,011,022 represents less than 66.6 per cent of the
Company’s total ordinary share capital in issue as at 19 March 2021 (being the latest practicable date prior to publication of this Notice).
The Company did not hold any shares in treasury as at 19 March 2021.
The Board has no present intention to exercise this authority other than in connection with employee share schemes. It wishes to obtain the
necessary authority from shareholders so that allotments can be made (should it be desirable and should suitable market conditions arise) at
short notice and without the need to convene a general meeting of the Company which would be both costly and time consuming.
If the Board takes advantage of the additional authority to issue shares or grant rights to subscribe for, or convert any security into, shares in the
Company representing more than 33.3 per cent of the Company’s total ordinary share capital in issue or for a rights issue where the monetary
proceeds exceed 33.3 per cent of the Company’s pre-issue market capitalisation, all members of the Board wishing to remain in office will stand
for re-election at the next Annual General Meeting following the decision to make the relevant share issue.
Item 16: Notice of general meetings
This resolution is required as a result of the implementation in 2009 of the Shareholder Rights Directive. The regulation implementing this
Directive increased the notice period for general meetings under the 2006 Act to 21 days. The Company will be able to continue to call general
meetings (other than an Annual General Meeting) on 14 clear days’ notice as long as shareholders have approved the calling of meetings on
14 days’ notice. Resolution 16 seeks such approval. The approval will be effective until the Company’s next Annual General Meeting, where it
is intended that a similar resolution will be proposed. The Company will also need to meet the requirements for electronic voting under the
Directive before it can call a general meeting on 14 days’ notice. It is confirmed that the ability to call a general meeting on 14 clear days’ notice
would only be utilised in limited circumstances and where the shorter notice period will be to the advantage of shareholders as a whole.
Item 17: Disapplication of pre-emption rights
Resolution 17 seeks authority for the directors to issue equity securities (as defined in the 2006 Act) in the Company for cash as if the pre-emption
provisions of section 561 of the 2006 Act did not apply. Other than in connection with a rights issue or any other pre-emptive offers concerning
equity securities, the authority contained in this resolution will be limited to the issue of equity securities for cash up to an aggregate nominal
value of £5,556,383 which represents approximately 5 per cent of the Company’s total ordinary share capital in issue as at 19 March 2021
(being the latest practicable date prior to publication of this Notice). In accordance with the Pre-emption Group’s Statement of Principles, the
directors confirm their intention that no more than 7.5 per cent of the issued share capital (excluding treasury shares) will be issued for cash on a
non-pre-emptive basis during any rolling three-year period.
This resolution seeks a disapplication of the pre-emption rights on a rights issue so as to allow the directors to make exclusions or such other
arrangements as may be appropriate to resolve legal or practical problems which, for example, might arise with overseas members. There are
presently no plans to allot ordinary shares wholly for cash other than in connection with employee share schemes. Shares allotted under an
employee share scheme are not subject to statutory pre-emption rights.
The authority sought by resolution 17 will last until the conclusion of the next Annual General Meeting (or, if earlier, 15 months from the date
of the resolution). The directors intend to seek renewal of this power at subsequent Annual General Meetings.
198 | Supplementary information
Explanatory notes to the notice of meeting continued
Item 18: Authority to purchase own shares
This resolution renews the authority granted at last year’s Annual General Meeting to enable the Company to make market purchases
of up to 22,225,532 of its own shares, representing approximately 10 per cent of the Company’s total ordinary share capital in issue as at
19 March 2021 (being the latest practicable date prior to publication of this Notice). Before exercising such authority, the directors would
ensure that the Company was complying with the current relevant UK Listing Authority rules and Investment Association guidelines.
No purchases would be made unless the directors believe that the effect would be to increase the earnings per share of the remaining
shareholders and the directors consider the purchases to promote the success of the Company for the benefit of its shareholders as a whole.
Any shares so purchased would be cancelled. The directors have no present intention of exercising the authority to purchase the Company’s
ordinary shares but would like to have the flexibility of considering such purchases in the future.
Any purchases of ordinary shares would be by means of market purchases through the London Stock Exchange. The maximum price (exclusive
of expenses) which may be paid for each ordinary share shall be the higher of: (a) an amount equal to 105 per cent of the average of the middle
market quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days immediately
preceding the day on which the Company agrees to buy the ordinary shares; and (b) an amount equal to the higher of the price of the last
independent trade of an ordinary share and the highest current independent bid for an ordinary share as derived from the London Stock
Exchange Trading System (SETS). The minimum price (exclusive of expenses) would be 50 pence, being the nominal value of each ordinary share.
The authority will only be valid until the conclusion of the next Annual General Meeting in 2022.
As at 19 March 2021 there were options over 1,663,519 ordinary shares in the capital of the Company which represent 0.78 per cent of the
Company’s issued ordinary share capital at that date. If the authority to purchase the Company’s ordinary shares was exercised in full, these
options would represent 0.83 per cent of the Company’s issued ordinary share capital.
The directors consider that all the resolutions to be put to the meeting promote the success of the Company for the benefit of its
shareholders as a whole. Your Board will be voting in favour of them and unanimously recommends that you do so as well.
Vistry Group PLC | vistrygroup.co.uk | 199
Shareholder information
Registered office
11 Tower View, Kings Hill, West Malling, Kent ME19 4UY. Registered number 306718 registered in England.
Financial calendar
Annual report posted
Annual General Meeting
Payment of 2020 final dividend
Announcement of 2021 interim results
Announcement of 2021 final results
Analysis of shareholdings - at 31 December 2020
1 - 5,000
5,001 - 50,000
50,001 - 250,000
250,001 - 500,000
500,001 - 1,000,000
1,000,001 - and over
Total
6 April 2021
17 May 2021
21 May 2021
7 September 2021
February 2022
Number of
shareholders
%
Number of
ordinary shares
5,130
358
154
55
46
48
88.59
3,401,455
6.18
2.66
0.95
0.79
0.83
5,855,522
18,640,980
19,709,087
32,626,116
142,019,419
5,791
100.0
222,252,579
%
1.53
2.63
8.39
8.87
14.68
63.90
100.0
Share price (middle market) - year to 31 December 2020
At end of year: 939.50p Lowest: 510.00p Highest: 1,478.00p
Advisers
Auditors
Principal bankers
Stockbrokers
PricewaterhouseCoopers LLP
Bank of China Limited
Numis Securities Limited
Solicitors
Linklaters LLP
Peel Hunt LLP
HSBC Bank plc
Barclays Bank PLC
Handelsbanken plc
HSBC UK Bank plc
First Commercial Bank
Lloyds Bank plc
National Westminster Bank plc
Qatar National Bank
Santander UK plc
Insurance brokers
Arthur J Gallagher
Registrars
Computershare Investor
Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Registrar
Shareholder enquiries regarding change of address, dividend payment
or lost certificates should be directed to: Computershare Investor
Services PLC, The Pavilions, Bridgewater Road, Bristol BS99 6ZZ.
Vistry Group Shareholder Helpline: 03708 893 236.
Please note that due to the regulations in the UK, Computershare
are required to check that you have read and accepted the terms and
conditions before being able to trade, which could delay your first
telephone trade. If you wish to trade quickly, we suggest visiting their
website and registering online first at computershare.trade.
Investor Centre: the easy way to manage your shareholdings online:
Many shareholders want to manage their shareholding online and do so
using Investor Centre, Computershare’s secure website. With Investor
Centre you can view shares balances, history and update your details.
Visit investorcentre.co.uk for more information.
Internet and telephone share dealing is available via Investor Centre:
Internet dealing - The fee for this service is 1% of the value of each sale
or purchase of shares (subject to a minimum of £30). Stamp duty of
0.5% is payable on purchases. Before you trade you will need to register
for this service. This can be done by going online at computershare.trade.
Telephone dealing - The fee for this service will be 1% of the value
of the transaction (plus £50). To use this service please call
0370 703 0084 with your SRN to hand.
Note: The provision of these services is not a recommendation to buy,
sell or hold shares in Vistry Group PLC
Dividend Reinvestment Plan (DRIP)
The DRIP gives shareholders the opportunity to reinvest their
dividends to buy ordinary shares in the Company through a special
dealing arrangement. For further information please contact the
Vistry Group Shareholder Helpline: 0370 889 3236.
Electronic communications
Instead of receiving printed documents through the post many
shareholders now receive their annual report and other shareholder
documents electronically, as soon as they are published. Shareholders
that would like to sign up for electronic communications should go to
investorcentre.co.uk/ecomms where they can register.
200 | Supplementary Information