VTY Vistry Group Plc

the income statement as incurred, the overhead charge in the income statement 
for the first half of 2010 has, as anticipated, increased to 12.1% of revenue 
(2009: 10.3% of revenue).  The Group expects the benefit of this overhead 
investment to be realised in future years as the Group increases its output 
capacity. 
The Group achieved an operating profit margin of 4.2% in the first half of 2010 
as compared to an operating profit margin pre exceptional items of 5.9% 
(operating loss margin of -2.2% after exceptional items) in the first half of 
2009.  This reduction in operating margin reflects the effect of the JV income 
de-recognition and the write off of overheads associated with land acquisition. 
These effects are anticipated to have less of an impact on the full year results 
for 2010, allowing the operating margin to return to a level ahead of 2009's 
full year operating margin of 6.2%. 
The Group incurred net financing costs in the first half of 2010 of GBP1.3 
million compared to GBP6.0 million incurred in the first half of 2009.  This 
reduction in finance costs arose firstly, from the strong net cash position of 
the Group throughout the first half of 2010, and secondly, from the 
significantly more cost effective bank facilities agreed in January 2010.  As a 
result, interest charges, commitment fees and arrangement fee amortisation were 
all significantly lower in the first half of 2010.  Within its finance costs, 
the Group charged GBP1.0 million (2009: GBP0.7 million), reflecting the 
difference between the cost and the nominal price of land bought on deferred 
terms which is charged to the income statement over the life of the deferral of 
the consideration payable.  This reflects the increased land purchase activity 
of the Group. 
For the six months ended 30 June 2010 the Group achieved a pre tax profit of 
GBP3.5 million as compared to a pre-tax loss of GBP8.6 million in the first half 
of 2009 (pre tax profit of GBP1.2 million before exceptional items).  Basic 
earnings per share for the first half of 2010 was 1.8p as compared to a loss per 
share of 5.5p in the first half of 2009 (earnings per share of 0.4p before 
exceptional items). 
The Group has established a rental joint venture, with a private investor, in 
which it holds a 50% equity share.  Into this joint venture, in March 2010, the 
Group legally completed 215 homes, including the balance of stock on a number of 
apartment schemes in the north of England, at a modest discount to open market 
value.  This portfolio of homes is intended to be rented in the private market 
over a number of years with the view of generating both an acceptable investment 
income return and a capital profit.  The portfolio sale of these 215 homes 
generated revenue of GBP25.7 million.  By the end of July 2010, 98% of the 
portfolio was let on private open market rents.  The Group's equity investment 
in the joint venture is GBP4 million. 
Dividends 
Given the confidence the Board has in the medium term prospects of the Group 
arising from its investment in new land opportunities and the Group's strong net 
cash position, assuming the continuation of current market conditions in the new 
homes market, the Board intends to resume declaring dividends at the end of the 
current financial year. 
Cash flow 
As at 30 June 2010, the Group held net cash in hand of GBP78.7 million (31 
December 2009: net cash in hand of GBP112.3 million).  The Group generated GBP48 
million of cash inflow from current trading during the six month period 
confirming its ongoing cash generative operations.  The Group expended GBP82 
million on land during the first six months, part in payment of existing land 
creditors and part in payment for new land investments.  In total, there was a 
cash outflow in the first six months of GBP34 million, reflecting the first 
period of the Group's near term strategy of investment in consented land. 
Average net cash for the first half of 2010 was GBP114 million (2009: average 
net debt of GBP69 million).  In addition, the Group has substantial financial 
headroom against its existing committed loan facilities of GBP150 million signed 
in January 2010 and maturing in September 2013. 
The Group anticipates the second half of 2010 will be cash generative from 
current trading, before cash expenditure on land, as revenue will significantly 
exceed cash expenditure on construction, overheads, tax and interest.  On this 
basis, it is expected that the Group will have net cash in hand at 31 December 
2010, subject only to the extent of cash expenditure for consented land 
purchases in the second half of the year. 
 
 
Land 
The Group is pleased to report good progress with its near term strategy of 
acquiring land with residential planning consent.  This strategy will enable the 
Group to grow its output capacity over the coming years and deliver increased 
levels of revenue and improved profit margins, thereby generating shareholder 
value.  The Group has been active in the consented land market since its equity 
share placing in September 2009, using its considerable cash resources to agree 
land purchases which are expected to generate returns in line with the Group's 
hurdle rates for land investment. 
The Group held 13,113 plots in its consented land bank at 30 June 2010, an 
increase of 1,071 plots on the 12,042 plots at the start of the year.  The Group 
added 1,874 consented plots to its consented land bank in the first half of 
2010, 80% of which are located in the south of England, at a land cost of 
approximately GBP107 million.  In addition, the Group has agreed terms to 
acquire a further c3,000 plots with many at an advanced stage in the acquisition 
process.  New land has been acquired on deferred terms where appropriate, 
although the Group has taken advantage of opportunities where more cost 
effective land deals are achievable when supported by up front cash 
consideration. 
The Group believes its strategy of acquiring consented land at this point in the 
housing market cycle will add significant value to the medium term prospects of 
the Group for a number of reasons: strong demand for new homes given the ongoing 
shortage of homes being built in England and Wales; good development land supply 
for the Group during a challenging period for achieving residential planning 
consents in the near term as the Government's localism agenda is debated and 
implemented; and the current surplus of land vendors over land buyers which is 
keeping land prices attractive. 
At each period end, the Group is required to assess the carrying value of its 
inventory.  Based on current estimates of achievable sales prices in the market 
at normal sales rates, there has been no net land provision adjustment at the 
half year.  The Group land provision at 30 June 2010 stood at GBP48 million (31 
December 2009: GBP54 million), reflecting GBP6 million of provision utilisation 
during the first half year.  At 30 June 2010, 32% of the plots in the consented 
land bank were subject to a provision, 51% of the plots were held at acquisition 
cost and were acquired prior to the nadir in house prices in the recent housing 
market downturn, and the balancing 17%, held at acquisition cost, have been 
acquired since the nadir of house prices in the housing market downturn. 
The Group's existing consented land bank continues to show a robust quality, set 
against the current housing market conditions.  Of the 13,113 plots, 67% are 
located in the south of England, where the housing market has shown greater 
signs of recovery, and 55% of the land bank has been sourced through the 
conversion of strategic land at a discount to market value at the date of its 
acquisition. 
The strategic land bank at 30 June 2010 stood at 17,270 potential plots as 
compared to 16,363 potential plots held at the start of the year.  The Group has 
successfully converted 567 potential plots into consented land during the first 
half year.  The Group has secured a further c1,500 strategic plots, of which 
c1,050 plots already have a planning consent and will be converted to the 
consented land bank in a number of phases over the coming years. 
Net assets 
At 30 June 2010, the Group held net assets of GBP692.8 million, which equates to 
a net assets per share value of GBP5.20.  Of this net asset value, land held at 
the lower of cost and net realisable value amounted to GBP530.2 million (GBP3.98 
per share) and net cash was GBP78.7 million (GBP0.59 per share). 
As at 30 June 2010, the Group's actuary estimated that the Group's defined 
benefits pension scheme had moved from a deficit of GBP8.9 million at the end of 
2009 to a deficit of GBP12.2 million.  The main driver of this adverse movement 
has been the impact of assumption changes on the value of the scheme's 
liabilities, in particular assumptions relating to pension liability discount 
rates. 
Other key performance indicators 
The Group has continued to perform well in other key areas.  In respect of 
health & safety, the Group has achieved a strong level of performance as 
measured by independent inspection of all of its sites.  The Group was one of 
only two housebuilders to receive a Gold award for health & safety in the 2010 
National House-Building Council's health & safety awards and has for the 14th 
year running received a Gold Award from RoSPA. 
The Group's quality of build has been at the top of industry standards, with 
strong results achieved in independent quality inspections.  The Group has been 
ranked first of a large group of housebuilders in respect of these quality 
inspections in six of the last twelve months reported. 
In terms of customer service, the Group continues to receive strong levels of 
satisfaction from its customers.  In the Group's latest quarter results, 95% of 
customers stated they would 'Recommend to a friend or relative' and 93% of 
customers stated they were satisfied with the 'Overall quality of the new home', 
with only 1% stating they were not satisfied.  The Group achieved a four star 
rating in the 2010 HBF customer satisfaction survey which confirmed the high 

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