Fitzgerald: Bovis merger to create £35m savings a year

Vistry, the housebuilder formerly known as Bovis, expects to generate savings of around £35m a year once its £1.1bn merger with Galliford Try’s housing operations is fully bedded in.

Announcing its results for the year to 31 December 2019 today, chief executive Greg Fitzgerald said of the £35m annual savings, at least £20m a year is expected to come from streamlining the group’s regional and operational models.

It has already cut the number of its housebuilding regional business units from 17 to 13.

The group also expected to cut around 8% of its headcount across the business, including its central services operation.

Bovis announced plans to buy Galliford Try’s Linden Homes and partnerships and regeneration businesses in September last year, with the deal completing last month.

The newly-merged operation saw turnover up 6.5% to £1.13bn, while pre-tax profit rose 12% to £182m.

Vistry’s operating margin rose 60 basis points to 17%.

The group completed 3,867 homes last year, up 3%, while the average selling price also grew by 3% to £280,200. Help to Buy, the government’s financial support programme for new home buyers, accounted for 23% of sales, versus 27% in 2018.

Vistry announced it had signed a £63m deal with Newham council’s newly-formed development arm, Red Door Ventures, to build 182 homes in Plaistow, and an agreement with housing association Citizen Housing Group to build 360 homes worth £95m on the site of a former hospital in Kidderminster.

It expects to grow its housebuilding operation’s delivery of new homes to more than 8,000 homes a year, and increase the partnerships arm to 6,000 units annually.

Net cash at the end of last year was £362m, up from £127m in 2018.

Greg Fitzgerald said the group had completed the acquisition of Linden Homes and Vistry Partnerships from a position of strength and was making “excellent progress with integration” which he said would deliver “clear and significant benefits”.