Bovis merger will generate £35m in annual savings

Vistry, the housebuilder formerly known as Bovis, said it 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, the group 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 reduced the number of its regional business units from 17 to 13.

The group, led by chief executive Greg Fitzgerald (pictured), 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 firm said the tie-up would create a top-five housebuilder capable of delivering 12,000 homes a year.

In Bovis’s last set of results before the merger was completed, turnover was up 6.5% to £1.13bn, while pre-tax profit rose 12% to £182m. 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.

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.

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