Vistry is on track to deliver more than 18,000 residential units in 2024, surpassing rival Barratt’s 14,000 total to become Britain’s largest housebuilder.
The company is also aiming to develop one in six of the UK’s new affordable homes this year.
The housebuilder announced a strong set of first-half results yesterday, which was well received by investors, and will no doubt please the government, given its ambitions to boost housebuilding levels.
Vistry’s chairman and chief executive, Greg Fitzgerald, said: “Vistry’s Partnerships model is significantly outperforming the traditional house building market.
“The group’s growth strategy and greater delivery of affordable housing is well aligned to the new Government’s ambitions to address the country’s housing crisis, and uniquely positions Vistry to play a key role in delivering the Government’s new housing targets.
“We have traded well over the summer months, and with positive momentum across the business are on track to deliver more than 18,000 completions in FY24, and a year-on-year increase in profits.
“We remain confident on delivering our medium-term targets of a 40% return on capital employed and £800m of adjusted operating profit.
“In addition, since the strategy update 12 months ago, I’m pleased that the group has now announced or returned £285m of the targeted £1bn capital return to shareholders over three years.”
Completions increased 9% to 7,792 homes in H1 2024 driving a corresponding lift in revenue to £1.7bn and pre-tax profit ahead 37% at £157m.
Around £600m of revenue came from open market sales and £1.1bn from partner funded sales. Adjusted operating margin at the business remained stable at 11.5%.
Fitzgerald added: “The group’s strong forward sales position totalling £5.1bn is up 19% on the prior year, with the group 91% forward sold for the full financial year in 2024.”
Commenting on Vistry’s half year results, Adrian Lunn, Director at Eddisons, said: “The road ahead for UK housebuilding looks more secure this morning, with Vistry’s half year results showing clear progress. The company reported a 19% increase in forward sales versus the same period last year, giving it a high level of visibility which many will be envious of.
“A reason for Vistry’s momentum is undoubtedly market sentiment. The interest rate cut in early August predicated a meaningful drop in mortgage rates that will go a long way to convincing doubters that the housing market is starting to recover.
“Importantly, our new Labour government is also promising to build 1.5 million homes over the next five years and it’s the housebuilders operating at the lower end of the market who should benefit most as many of the new properties will have to be the kind of reasonably priced developments which Vistry has leant into.
“There will be concerns about margins in this segment of the market and whether they can be sustained, but the outlook is highly supportive ahead of next month’s Autumn Statement.
“A further share buyback announced [yesterday] confirms the confidence this housebuilder now has. Recently promoted to the FTSE 100, Vistry has demonstrated its ability to deliver consistently, and it now looks set to accelerate its plans as conditions become more favourable.
“As long as it doesn’t overextend itself and keeps a lid on debt, Vistry shareholders should expect similar levels of outperformance for a while yet.”
