Vistry Group: Will Bovis housebuilder show signs of a rebound amid shareholder revolt?
Investors will turn their focus to Vistry Group’s half year results on Thursday to see if the housebuilder has shown signs of rebounding amid a tussle between shareholders over its chief’s hefty pay rise.
At its general meeting last week, some 45 per cent of shareholders voted against plans to double the annual bonus given to its chief executive, Greg Fitzgerald.
The move, which passed with a slim majority, will see Fitzgerald’s pay grow by 5.9 per cent while his maximum annual bonus will now increase to 300 per cent of his annual salary instead of 150 per cent.
Vistry, which was formed in 2019 following a merger between Bovis Homes and Galliford Try, has said it is engaging with shareholders to understand their views.
A statement read: “The company remains committed to ongoing shareholder engagement and will continue to do so to ensure that the company understands shareholders’ views and is able to consider feedback, as well as to provide clarity on the company’s approach to remuneration going forward.”
It comes as the business has been bruised financially following a tricky period for the UK’s housing sector, with its adjusted revenue falling to £810m in the year to June down from £902m the previous year.
Vistry Group also said the number of homes it completed during the year was down 22 per cent on last year’s figures, as buyer confidence has been weakened by the tough economic climate.
“The real trick for housebuilders is, in many ways, is buying land cheaply at the bottom of the cycle as that sets them up nicely for the next upswing, although whether they will feel brave enough right now is not clear, especially as many builders continue to rail against planning red tape,” Russ Mould, investment director at AJ Bell, told City PM
As the summer lull comes to a close, Vistry is not the only housebuilder set to publish results next week – with rival Barratt Developments also posting its annual results on Wednesday.
The residential building company has also suffered recently, revealing its net private reservation rate – the number of people putting their names down for a new home – slid 32.1 per cent for the year ending June.
“Analysts will look for comments on completions and pricing and – as forward-looking indicators – they will also look for an indication on the trends in forward order book and especially any commentary on average sales per outlet per week,” Mould said.
He added: “Vistry is still expected to pay a lower dividend in 2023 than it did in 2022, which seems prudent given the circumstances, and the same applies to Barratt, where a further cut is expected in fiscal 2024.”