Vistry Group (vtvyl) High Execution Hurdle in H2 but Valuation Reflects Downside Risk; Reiterate Buy

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Vistry Group (vtvyl) High Execution Hurdle in H2 but Valuation Reflects Downside Risk; Reiterate Buy

Goldman Sachs Vistry Group (VTYV.L)

Evaluating Financial Resilience

With average daily net debt averaging £799m - a figure that exceeds the Group’s current

market capitalisation - and management’s expectation of a loss before tax of £30m in

1H26, investors have likely become increasingly concerned about Vistry’s leverage.

Hence, below we conduct an analysis of Vistry’s balance sheet strength and covenant

headroom.

Base case requires operational execution and reduction in inventory

Vistry ended the period at 1H26 with £470m net debt, with a daily net debt position of

£799m. Vistry had £1.13bn of available financing facilities at FY25, with the USPP

maturing in February 2027 and the £900m revolving credit facility and term loan

maturing in April 2028. The remaining facilities are rolling. At the trading update,

management reaffirmed their target to achieve net cash in excess of £100m at year-end

and are targeting average daily debt of below £650m in 2H26 (vs £771m in 2H25). Vistry

highlighted the majority of the cash benefits will benefit the second half due to the lag

between action and cash realisation including a 15-week period between reservation

and completion for private sales, an average of six to eight weeks between WIP controls

and lower run rate of cash payments and the reduction of land acquisitions in 2H.

We reset our estimates lower resulting in -8% difference in PBT vs guidance

We reset our estimates for Vistry and assume a 2.5%y/y volume growth from FY26E

onwards (previously 8.5% in FY26E and 5% volume growth from FY27E-FY30E),

accompanied by a -0.4% (previous 1.5%) contraction in the blended Average Selling

Price (ASP).