Housebuilder Vistry has launched a £35.0m share buyback programme as part of an effort to return surplus capital to investors and reduce the group’s overall share capital.
Vistry said on Friday that the share buyback comes after a “strong start to the year” that has led the company to expect full-year margins in both housebuilding and partnerships to be ahead of previous 2022 targets, with adjusted pre-tax profits expected to be at the top end of market forecasts.
The FTSE 250-listed firm said the aggregate purchase price of all ordinary shares acquired under the programme would be no more than £35.0m, excluding stamp duty and expenses, with up to 1.5m ordinary shares purchased under the programme to be held in treasury and the remaining shares to be cancelled.
Vistry’s share purchases will take place in open market transactions and may be made from time to time – depending on market conditions, share price and trading volume. Purchases of the company’s shares under the programme will commence on 27 May and end no later than 31 December.
“With balance sheet strength, the priority remains investing in the business to support the group’s growth strategy. The housebuilding business remains focused on controlled volume growth, driving margins and return on capital employed, while Partnerships continues to drive rapid growth in its higher-margin mixed tenure revenues,” said Vistry.
“In 2021, the board accelerated the dividend payout to a two-times cover reflecting the strength of the balance sheet and its confidence in the group’s unique market position. The group stated that surplus capital, following investment in the business to support the group’s growth strategy and the payment of the ordinary dividend, would be returned to the group’s shareholders. Consistent with this capital allocation policy, the board considers that it is returning a prudent level of cash to shareholders, which reflects the robust trading of the group, while also retaining a strong balance sheet.”
Reporting by Iain Gilbert at Sharecast.com