Chairman’s statement | Ian Tyler Synergies will total £44m, ahead of As part of our response to Covid we the initially expected £35m and the instigated a temporary salary reduction cost to deliver them will be c. £27m, for 3 months, for all employees other below the initial £35m expectation. than those whose salary was below a The Housebuilding business restructured certain threshold. This was later reversed quickly and with national coverage, the with salaries repaid. We are also pleased operating structure has the capacity to to have repaid all monies received deliver c. 8,000 Housebuilding units. by the Group from the Government’s Job Retention Scheme and have not Vistry Partnerships, a key driver for the benefitted from any Government schemes Acquisition, demonstrated its strong related to supporting businesses and market resilience in 2020, making employees during the Covid-19 pandemic. excellent progress towards delivering its targets of £1billion of revenue and at Covid-safe operating procedures are least a 10% operating margin in 2022. embedded across all areas of the business, productivity is back to normal levels, Our focus is on one Vistry and on A transformational year and we will continue to work with leveraging the capability and relationships There are many positives from Government guidance and protocol across the entire Group. With expertise going forwards. 2020 and despite the obvious in all segments of the housing market, challenges and impact on the Vistry Group is uniquely positioned, and Sustainability year’s financial performance from the combination of Vistry Partnerships We took the opportunity of the Covid-19, the Group has made and our two leading housing brands, merger to reinvigorate and relaunch Bovis Homes and Linden Homes offers an much progress across all areas of our focus on the sustainability of our exciting future. Fully aligned, the Group the business. operations, focusing on the social is set to maximise the significant growth and environmental elements of the As I commented on in the 2019 opportunities ahead. ESG agenda. Our increased scope, Annual Report and Accounts, ther and in particular the focus of our new rationale for the Acquisition(10) Response to Covid-19 Partnerships business on the affordable of Linden Homes and Vistry The health and safety of our employees, marketplace, reinforces and enhances Partnerships which completed on subcontractors, suppliers and customers the Group’s purpose of developing 3 January 2020 (the “Acquisition”), has been and remains our top priority sustainable new homes across all was strong, and one year on I am during the Covid-19 pandemic. I am segments of the UK housing market. pleased to report the benefits, both pleased to report the Group has delivered operational and financial, have a rapid and co-ordinated response During the year we have conducted a exceeded our expectations. to challenges and I wish to thank all full review of our risks and opportunities, our employees for their enormous consulting widely with stakeholders commitment, resilience and hard work (including our people, our customers during what has been a testing period. and our investors), in order to inform our priorities. We are refining our The Group took the decision to close all strategy for sustainability, which will construction sites and sales offices in launch in March, and which will set out late March, with our sales teams our aims and targets. remaining in contact with customers “The enlargement of on a remote basis. Vistry Partnerships Focusing on our people, our operations the Group enriches our demonstrated its strong market resilience and our homes and communities, this with its high proportion of secured will include a timetable to address the purpose of developing revenue from partner delivery and pre- challenge of Net-Zero, our aims for sustainable new homes sold developments, and led our early biodiversity on our projects and the return to site in late April. Site closures social value of our operations, both in and communities during March and April did however terms of the homes and places we across all sectors of significantly impact the production, create, and the economic and social mobility opportunities we generate the housing market” output and first half performance of the Group, and of our Housebuilding business through building. in particular. We have described our findings and proposals in the Strategic Review on (10) Acquisition by Vistry Group PLC of Linden Homes and pages 22 to 44 and Sustainability Partnerships & Regeneration businesses from Galliford Try, completed on 3 January 2020 (the “Acquisition”). Review on pages 66 to 73. 4 | Strategic report | Business overview Strategic report | Business overview Quality and service “ The benefits of the Acquisition, both High quality build and customer service has remained a top priority in 2020 operational and financial have exceeded and I am pleased to report further our expectations” improvements, with the Group increasing its HBF Customer Satisfaction score in 2020 and achieving the highest Dividends I would like to thank my colleagues on 5-Star rating. In light of the impact of the Covid-19 the Board for their support and guidance pandemic on the Group’s performance, to the leadership team and to me We continue to invest in our customer the Board took the decision not to pay personally in what has been another busy service platform and in the year saw the the Second Interim Dividend declared and significant year for the Group. roll-out of our bespoke customer service with the Acquisition in cash, but to return relationship platform, ‘Keys’ across the Looking ahead value to shareholders by way of a bonus enlarged housebuilding business. Our aim issue to shareholders, who were on the For 2021, our top priority remains the of changing the way we interact with our register on 27 December 2019. health and safety of our employees, customers to provide a seamless single all those that we work with, and our journey with Vistry has been accelerated Following the Group’s strong second half customers, and we are committed by the pandemic. performance, year-end net cash position to operating in a Covid-safe way and and strong forward sales position, supporting our people as best as we can. We have invested in digital content, the Board is pleased to confirm the digital processes and most recently, resumption of dividends with a 20 pence The market fundamentals remain have re-organised our sales teams into per share final dividend in respect of strong and whilst we see lots of great a regional hub structure. This allows FY20 which represents a pre-exceptional opportunity, we are alert to the wider us to best serve our customers whilst dividend cover of 2.8 times. market uncertainty. Housebuilding maximising the sales opportunities is committed to delivering controlled across the entire Vistry product range. Looking forwards, the Group is targeting volume growth and driving its margin This investment continues into in 2021. to maintain a strong balance sheet and towards the 24.2% gross margin reduce this dividend cover to a level embedded in its owned land bank, People towards 1.75 times. and Partnerships is on track to deliver Attracting and retaining high quality accelerated growth and profitability people within the business is a key The Board driven by a significant increase in higher priority and I am pleased to report our As set out in more detail in the margin mixed tenure completions. latest Peakon employee engagement Governance report, other than the very Above all, as one Vistry, the Group study reported a score of 7.9, an welcome addition of Graham Prothero looks to maximise its unique strengths improvement on the previous score to the Board following the Acquisition, and grasp the many exciting growth in August 2020 and ahead of the the Board took a conscious decision not opportunities ahead. I look forward to benchmark at 7.4. to change its composition during 2020 updating you with our progress. to more effectively provide continuity, Mental health has been a key focal support and challenge through the point for this year, with the leadership integration process and then through the team recognising the importance of impacts of Covid-19. One consequence of supporting our people and maintaining this decision has been that we have not good, open lines of communication. Ian Tyler been able to meet the minimum target Chairman Mental Health First Aiders have been for female representation on the Board trained up across the business and a as at the end of 2020 recommended number of new regular online employee by the Hampton Alexander Review. communications platforms have been We remain unequivocally supportive introduced including the weekly of both the recommendations of this ‘Time to Talk’, designed to specially review and its underlying philosophy. address the challenges of working during We are now in a strong position to review the pandemic. our Board composition so that it most effectively supports the enlarged Group I would also like to extend my thanks and we are committed to being fully to our subcontractors, suppliers and compliant with the Hampton Alexander partners who have supported us during recommendations by 31 December 2021. the year, and with the Acquisition, and are such an important and valued component of our business. Vistry Group PLCBovis | Homes vistrygroup.co.uk 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 Despite the economic uncertainty of These tenures include: In addition, as a short-term support for Brexit and the impacts of Covid-19, the impact of Covid-19, the government a. Social Rent the demand for housing of all tenures announced a stamp duty holiday ('SDLT') continue to increase.