Mike Kruger of MPK Partners presented his in-depth investment thesis on Vistry Group (UK: VTY) at Best Ideas 2025, held from January 9-24.
Thesis Summary
According to Mike, it easy to understand why Vistry Group is cheap: UK homebuilders are in a bear market, the partnerships business model not well understood, and the company has had three profit warnings in the last three months. Yet, despite recent cost overruns on the legacy homebuilding operations that are in runoff, management’s track record is otherwise great.
Vistry is a high-quality business — much less cyclical than a traditional homebuilder, much better returns on capital (ROIC should >= 28% in the next couple of years). Government policy remains very supportive.
Vistry shares are cheap: 2.7x EV to management’s target of GBP 800 million EBIT (2028E?); 84% price to tangible book value, even though lower-quality traditional homebuilders trade between 1-2x tangible book. For the recent price to make sense, one would have to believe that not only has the CEO suddenly lost his touch (at age 60), but that the mixed-tenure partnerships model is fundamentally broken. Neither is likely to be true.
Slides
Let’s listen to the full session and look over the transcript.
