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Vistry Group

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Vistry Group plc
FormerlyBovis Homes
Company typePublic
IndustryHousebuilding
Founded1965
HeadquartersKings Hill, England
Key people
Greg Fitzgerald, Chairman and CEO
RevenueIncrease £3,564.2 million (2023)[1]
Increase £311.8 million (2023)[1]
Decrease £305.3 million (2023)[1]
Websitewww.vistrygroup.co.uk

Vistry Group, formerly Bovis Homes Group, is a British home construction company based in Kings Hill, England. Bovis Homes completed a deal to acquire Galliford Try's housing arm in January 2020, renaming the combined business Vistry. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It is one of the biggest housebuilders in the UK.

History

[edit]

Vistry Group was the result of a 2019 merger of Bovis Homes and Galliford Try's housing businesses.[2]

Bovis Homes

[edit]
A Bovis Homes development near Southampton

Bovis Homes’ origins lay in the early post-war housing operations of Bovis Holdings (see also Bovis Construction). Bovis had been acquiring housing land in the early 1950s but the level of housebuilding was modest until 1967 when it acquired Frank Sanderson’s Malcolm Sanderson Developments and the much larger RT Warren.[3] Frank Sanderson rapidly expanded Bovis’s housing through acquisition including the quoted Page-Johnson and Varney Holdings; by 1973 Bovis was probably the country’s second or third largest housebuilder, with sales of over 2,600.[4]

The secondary banking crisis adversely affected Bovis Holdings’ banking subsidiary and the Group had to be rescued by P&O in March 1974.[5] Frank Sanderson left Bovis in 1973 and Philip Warner was appointed managing director of Bovis Homes, a position he held for 25 years.[6] During the 1970s Bovis reduced its housing volumes as it concentrated on rebuilding profitability, but it began to expand again in the 1980s.[4] The company was demerged from P&O and was floated on the London Stock Exchange as Bovis Homes in 1997.[5]

On 9 January 2017, Bovis announced that its chief executive David Ritchie, who had been at the company for 18 years, had stepped down with immediate effect; he was quoted to have said that it was time for someone new to lead the group.[7][8] The company was subsequently subject to negative national press coverage around quality issues, was the target of two takeover bids[9] and saw its HBF customer survey rating - a benchmark for housebuilding quality and customer service - drop to two out of five stars.[10] Former Galliford Try CEO Greg Fitzgerald took over as chief executive on 18 April 2017.[11] In September 2017 he announced a strategic review of the business.[12] In March 2019 the company announced that it has returned to four star status in the annual HBF survey.[13]

Galliford Try housing operations

[edit]
A Linden Homes development in Bishop's Cleeve, Gloucestershire

Galliford Try was formed in 2000 through a merger of Try Group plc, founded in 1908 in London, and Galliford plc, founded in 1916.[14] Between 2005 and 2015 the company was led by Fitzgerald.[15][16] The company expanded its housing operations business acquiring Gerald Wood Homes in 2001,[14] Chartdale in January 2006,[17] Kendall Cross in November 2007,[18] Linden Homes in February 2008,[19] Rosemullion Homes in December 2009[20] and Shepherd Homes in May 2015.[21] All the individual house building divisions were rebranded as Linden Homes in 2011.[22]

Merger of Bovis Homes and Galliford Try's housing businesses

[edit]

On 24 May 2019, Galliford Try's board rejected a £950m offer from Bovis Homes for the Linden Homes and Partnerships & Regeneration businesses.[23] Talks reopened in September 2019,[24] with a preliminary deal, valued at £1.075bn, reportedly agreed.[25] On 7 November, it was reported that Bovis Homes had agreed a share and cash deal that valued Galliford Try's housing businesses at £1.1bn.[26] The deal was completed on 3 January 2020, with Bovis Homes - which had applied to be renamed Vistry Group - set to operate with both the Bovis Homes and Linden Homes brands, a combination that CEO Fitzgerald said "creates a top five housebuilder in the UK with the capacity to deliver over 12,000 homes per year in the medium term".[2]

Vistry Group

[edit]

Trading in the company's shares under the new name, Vistry Group plc, commenced on 6 January 2020.[27] Vistry Partnerships' first project wins included a £66m project on the Aylesbury Estate redevelopment at Elephant & Castle in south London,[28] and the first phase of Enfield Council's Meridian Water development.[29] Post-merger streamlining led to around 100 jobs being lost as Vistry reorganised 17 regional business units to 13.[30]

During the 2020 COVID-19 pandemic, Vistry initially furloughed the majority of its employees and suspended construction activities, before recommencing work on most of its sites in late April and early May.[31] On 20 May, Vistry said it was operating on 119 out of its 172 house-building developments, and on all 73 sites where it was building for other developers, including housing associations. Integration of the Linden and Bovis businesses continued and further headcount reduction was expected.[32] The company was criticised for exploiting the COVID-19 downturn by seeking discounts from subcontractors.[33][34]

In February 2022, Vistry was reported to be among the slowest payers of its subcontractors in a Build UK report based on government data, taking an average of 44 days to settle invoices, with 15% of its invoices still not settled after 60 days.[35]

In September 2022, Vistry was reported to be offering a £1.24 billion cash and shares deal to acquire competitor Countryside Partnerships.[36] The deal, backed by both boards and by five major shareholders at Countryside holding 39% of the company, will create one of the UK's biggest home builders with revenue of over £3bn. Countryside shareholders would receive 0.255 of a Vistry share for each of their shares plus 60p; if approved, the deal would be completed in early 2023.[37] Vistry CEO Greg Fitzgerald said the Countryside brand would be retained if the takeover was approved by shareholders.[38] The takeover was completed on 11 November 2022.[39]

In August 2023, shareholders were asked to approve a £2.2m pay rise for CEO Greg Fitzgerald,[40] and his remuneration package was only narrowly approved, with just 54.8% in favour.[41] In January 2024, it was announced that Fitzgerald would, in addition to being CEO, become executive chair of the company when Ralph Findlay steps down on 16 May 2024.[42] Some shareholders expressed unrest about Fitzgerald's combined role, a departure from the UK Corporate Governance Code, with one-in-five voting against his re-election in May 2024; Vistry also commissioned an evaluation to assess the combined role of CEO and chair, to be reported in March 2025.[43] Fitzgerald subsequently abolished the role of chief operating officer; Earl Sibley left the business in November 2024.[44]

In February 2024, Vistry was among eight UK house-builders targeted by the Competition and Markets Authority in an investigation into suspected breaches of competition law. The CMA said it had evidence that firms shared commercially sensitive information with competitors, influencing the build-out of sites and the prices of new homes.[45]

In September 2024, Vistry forecast it would deliver more than 18,000 homes (later revised downwards to 17,500),[46] surpassing Barratt (14,000) to become Britain's biggest house-builder (this was before finalisation of Barratt's merger with Redrow). It expected to complete one-in-six of the UK's affordable homes in 2024.[47]

On 8 October 2024, Vistry issued a £115m profit warning after under-estimating build costs on nine out of 46 schemes in its southern division by around 10%. The announcement caused Vistry shares to drop in value in early stock market trading,[48] falling 35% from 1273 pence to 829.5 pence before recovering to 963.5 pence - a 25% fall, knocking about £1bn off the company's value.[49] An additional £50m profit warning was issued on 8 November 2024 after further under-estimated build costs were identified in the same division, taking the total of affected sites to 18.[46][50]

Operations

[edit]

Prior to the Galliford Try deal which established Vistry, Bovis Homes operated seven regional businesses and built properties ranging from one-bedroom apartments to six-bedroom executive houses. It had offices in Kings Hill, Basingstoke, Reading, Exeter, Bishop's Cleeve, Stafford, Coleshill and Milton Keynes.[51]

In April 2018, Bovis launched its Phoenix Range of 28 house types for both private and affordable housing.[52]

In February 2019, the company announced that it was going to launch its Partnership Housing Division to work closely with housing associations seeking new ways to support the traditional affordable housing delivery and to facilitate a quicker delivery of larger housing association schemes.[53]

In September 2023, following falling private market sales, Vistry began to restructure the group to become a partnerships-only housing business, cutting regional business units from 32 to 27, split across six new operating regions.[54]

Reputation

[edit]

Bovis Homes

[edit]

Following the resignation of David Ritchie as CEO on 9 January 2017,[7][8] shortly after the company had issued a profit warning following a slow-down in sales in December 2016,[55] Bovis Homes faced controversy when newspapers reported it had offered cash incentives to customers to complete purchases and move into unfinished new homes.[56]

After a troubled period of increased press coverage of complaints from customers about perceived shortcuts of quality of homes built by the company as well as the formation of a Facebook group by unhappy customers called "Bovis Homes Victims Group", which also had a YouTube channel,[57][58] Bovis Homes interim CEO Earl Sibley acknowledged that their customer service levels had failed to meet the expected standards. He announced that the company would set aside £7m, to compensate customers who had been affected by finding problems with their new homes.[59][60]

On 9 December 2017, The Guardian reported that Bovis faced a potential class-action lawsuit by a group of homebuyers which had secured over 3,000 members.[61] On 19 April 2018 Bovis Homes were hit with fresh accusations of continued quality issues and poor customer service, misleading buyers, "deliberately" delaying essential repairs, failing adequately to repair defects and engaging in "underhand behaviour" to limit bad publicity. The Times reported that the previous year Bovis was forced to apologise to customers for poor workmanship after the newspaper revealed that hundreds of buyers had complained of bouncing and vibrating floors, leaks, missing insulation panels, poor drainage and unfinished gardens.[62]

The Times reported that the company set aside more than £10 million to deal with the complaints, but customers said service standards remained appalling. A whistleblower who worked as a customer service manager said he feared that construction problems were so common that the company might need to spend significantly more. The problems contributed to Bovis becoming the only national builder to be awarded a two-star rating out of five in the Home Builders Federation (HBF) annual customer satisfaction survey for the year ending September 2017. The newspaper reported that when The Times did a mystery shop on eight Bovis developments, all bar one claimed to have a star rating of three or above. Half claimed the company had four or five stars. The Times also reported that homebuyers were prevented from talking to the media by non-disclosure clauses.[62] On 10 May 2018, The Independent reported fresh allegations of home buyers being offered incentives including shopping vouchers for the positive feedback.[63]

Bovis Homes claims to have been focused on turning the business around and repairing its reputation for build quality and customer service. In March 2019 Bovis Homes were awarded four-star housebuilder status by the HBF following its annual customer satisfaction survey.[64]

Vistry Group

[edit]

In February 2023, Vistry was criticised by local residents for planning to fell more than 50 ancient trees in Wellingborough.[65] Local MP Peter Bone and North Northamptonshire Council both called for a pause to the works, but these calls were unsuccessful.[66]

References

[edit]
  1. ^ a b c "Preliminary Results 2023" (PDF). Visty Group. Retrieved 14 March 2024.
  2. ^ a b Morby, Aaron (3 January 2020). "Galliford Try completes housing arm sale". Construction Enquirer. Retrieved 3 January 2020.
  3. ^ The Times 25 February 1967
  4. ^ a b Wellings, Fred: Dictionary of British Housebuilders (2006) Troubador. ISBN 978-0-9552965-0-5.
  5. ^ a b Bovis Homes History Archived 1 April 2010 at the Wayback Machine Bovis Homes
  6. ^ Cooper, Peter, Building Relationships: The History of Bovis, Cassell, ISBN 0-297-82533-X
  7. ^ a b Sam Dean; Isabelle Fraser (9 January 2017). "Bovis Homes boss David Ritchie quits just days after house builder issues profit warning". The Daily Telegraph. Retrieved 11 January 2017.
  8. ^ a b "David Ritchie stepping down as chief executive of Bovis Homes". Belfast Telegraph. 9 January 2017. Retrieved 11 January 2017.
  9. ^ "Galliford Try abandons Bovis takeover". BBC News. 5 April 2017. Retrieved 30 October 2019.
  10. ^ "Customer Satisfaction Survey 2018". www.hbf.co.uk.
  11. ^ "Greg Fitzgerald: Meet the Bovis Homes boss who's anything but retiring about curbing fat cats". Evening Standard. 10 November 2017. Retrieved 20 March 2018.
  12. ^ Bovis promises higher dividend as part of wider strategic review Financial Times 7 September 2017
  13. ^ "Bovis, Redrow and Taylor Wimpey improve in customer rankings". The Construction Index. 27 March 2019. Retrieved 30 October 2019.
  14. ^ a b "Our Company History – Galliford Try Plc". gallifordtry.co.uk. Archived from the original on 26 March 2014. Retrieved 22 March 2015.
  15. ^ Lynch, Russell (10 November 2017). "Greg Fitzgerald: Meet the Bovis Homes boss who's anything but shy". Evening Standard. Retrieved 24 September 2018.
  16. ^ Schouten, Charlie (5 April 2017). "Ex-Galliford Try chief joins Bovis as CEO". Construction News. Retrieved 24 September 2018.
  17. ^ Galliford buys Chartdale for £67m[permanent dead link‍] Contract Journal, 19 January 2006
  18. ^ Galliford Try buys Kendall Cross for £9.3m Building 15 November 2007
  19. ^ Galliford Try buys Linden Homes for £244.5m Building, 8 February 2008
  20. ^ "Galliford Try buys Cornwall housebuilder for £200,000". BD online. 4 December 2009. Archived from the original on 18 March 2017. Retrieved 17 March 2017.
  21. ^ "Shepherd sells housing business". Yorkshire Post. 14 May 2015. Retrieved 24 June 2016.
  22. ^ "Galliford Try Homes acquires new land as part of expansion plans". smartnewhomes.com. 12 January 2010. Retrieved 19 March 2010.
  23. ^ Prior, Grant (28 May 2019). "Galliford Try rejects £950m Bovis bid for housing business". Construction Enquirer. Retrieved 28 May 2019.
  24. ^ Morby, Aaron (10 September 2019). "Bovis reopens talks to buy Galliford Try housing arm". Construction Enquirer. Retrieved 11 September 2019.
  25. ^ "Galliford Try warms to Bovis' £1bn offer". Construction Index. 10 September 2019. Retrieved 11 September 2019.
  26. ^ Morby, Aaron (7 November 2019). "Bovis Homes agrees £1.1bn deal for Galliford Try housing arm". Construction Enquirer. Retrieved 7 November 2019.
  27. ^ "Bovis Homes Group PLC (the "Company") - Change of Name to Vistry Group PLC". London Stock Exchange. 3 January 2020. Retrieved 6 January 2020.
  28. ^ Morby, Aaron (7 January 2020). "Newly-formed Vistry Partnerships wins first major contract". Construction Enquirer. Retrieved 8 January 2020.
  29. ^ "Deal agreed for £250m first phase of Meridian Water". The Construction Index. 8 January 2020. Retrieved 8 January 2020.
  30. ^ Morby, Aaron (27 February 2020). "Vistry plans 100 job cuts in post-merger streamlining". Construction Enquirer. Retrieved 28 February 2020.
  31. ^ Prior, Grant (23 April 2020). "Vistry to reopen sites next week". Construction Enquirer. Retrieved 24 April 2020.
  32. ^ "Vistry plans more job losses despite 'better than expected' progress". The Construction Index. 20 May 2020. Retrieved 20 May 2020.
  33. ^ Prior, Grant (28 May 2020). "Vistry asks subcontractors to cut rates". Construction Enquirer. Retrieved 1 June 2020.
  34. ^ Gardiner, Joey (29 May 2020). "Vistry stands by request for subbies to cut prices". Housing Today. Retrieved 1 June 2020.
  35. ^ Lowe, Tom (1 February 2022). "Booming Vistry still among industry's slowest payers, Build UK figures say". Building. Retrieved 1 February 2022.
  36. ^ Rogers, Dave (5 December 2022). "Vistry to buy Countryside for £1.2bn". Building. Retrieved 5 September 2022.
  37. ^ Morby, Aaron (5 September 2022). "Vistry to buy rival Countryside for £1.24bn". Construction Enquirer. Retrieved 5 September 2022.
  38. ^ Gardiner, Joey (8 September 2022). "Vistry to keep Countryside brand if £1.2bn merger goes ahead". Building. Retrieved 9 September 2022.
  39. ^ Gardiner, Joey (11 November 2022). "Vistry's £1.2bn takeover of Countryside completes". Housing Today. Retrieved 11 November 2022.
  40. ^ Brown, Carl (4 August 2023). "Vistry shareholders to vote on whether to approve £2.2m pay rise for firm's boss". Building. Retrieved 4 August 2023.
  41. ^ Gardiner, Joey (31 August 2023). "Vistry shareholders revolt over executive pay". Building. Retrieved 31 August 2023.
  42. ^ "Vistry chief takes chair as well". The Construction Index. 12 January 2024. Retrieved 12 January 2024.
  43. ^ "Vistry contacting shareholders to address concerns over joint CEO and chair role for Greg Fitzgerald". Housing Today. 18 November 2024. Retrieved 20 November 2024.
  44. ^ "Vistry's Fitzgerald dispenses with his COO". The Construction Index. 20 November 2024. Retrieved 20 November 2024.
  45. ^ Morby, Aaron (26 February 2024). "Competition probe launched into 8 major house builders". Construction Enquirer. Retrieved 26 February 2024.
  46. ^ a b "Vistry admits to additional costing errors". The Construction Index. 8 November 2024. Retrieved 8 November 2024.
  47. ^ Morby, Aaron (5 September 2024). "Vistry unseats Barratt as Britain's biggest house builder". Construction Enquirer. Retrieved 5 September 2024.
  48. ^ Morby, Aaron (8 October 2024). "Vistry issues profit warning over build out costs at southern division". Construction Enquirer. Retrieved 9 October 2024.
  49. ^ "Vistry costings cock-up knocks £1bn off company value". The Construction Index. 9 October 2024. Retrieved 9 October 2024.
  50. ^ Prior, Grant (8 November 2024). "Vistry takes another £50m hit on build cost blunders". Construction Enquirer. Retrieved 8 November 2024.
  51. ^ "Contact us". Bovis Homes. Retrieved 16 April 2017.
  52. ^ Crosland, Jonas (6 September 2019). "Bovis Homes bouncing back". Investors Chronicle. Retrieved 29 October 2019.
  53. ^ "National housebuilder launches housing association division". Inside Housing. 28 February 2019. Retrieved 29 October 2019.
  54. ^ Morby, Aaron (11 September 2023). "Vistry exits private market housing for Partnerships-only strategy". Construction Enquirer. Retrieved 11 September 2023.
  55. ^ Rhiannon Bury (28 December 2016). "House builder Bovis warns that December slowdown could hit profits". The Daily Telegraph. Retrieved 12 January 2017.
  56. ^ John Knowles (14 January 2017). "Pay deals 'behind Bovis house of horrors'". The Times. Retrieved 16 March 2019.
  57. ^ Vaish, Costas Pitas and Esha. "British builder Bovis faces further profit fall after complaints about quality". Reuters UK. Archived from the original on 20 February 2017. Retrieved 14 March 2017.
  58. ^ "Bovis and its houses of so many horrors". The Times. 11 January 2017. Retrieved 14 March 2017.
  59. ^ "Bovis Homes shares tumble as it says it will build fewer homes in 2017". The Daily Telegraph. Retrieved 14 March 2017.
  60. ^ "Poor customer service hits Bovis profit". BBC News. 20 February 2017. Retrieved 14 March 2017.
  61. ^ "Angry homebuyers plan class-action lawsuit against Bovis". The Guardian. 9 December 2017. Retrieved 19 April 2018.
  62. ^ a b "Buyers in despair at badly built new homes". The Times. 19 April 2018. Retrieved 19 April 2018.
  63. ^ "Bovis homebuyers offered 'cash in return for positive feedback', investigation reveals". The Independent. 10 May 2018. Retrieved 10 May 2018.
  64. ^ Charlie Taylor-Kroll and Jack Torrance (16 January 2019). "Bovis bounces back from faulty homes scandal". The Daily Telegraph. Retrieved 30 October 2019.
  65. ^ "Wellingborough: Protesters halt tree-felling plans". BBC News. 20 February 2023. Retrieved 28 February 2023.
  66. ^ West, Josh (22 February 2023). "Four arrested as felling of iconic Wellingborough Walks trees begins, leaving residents 'devastated'". Retrieved 28 February 2023.
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