Vistry confident of meeting FY expectations after solid first half
Housebuilder Vistry expressed confidence on Wednesday in meeting consensus market expectations for FY21 following a "significantly" better-than-expected first half, amid strong demand across all business areas.
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The company, which also backed its expectations for FY22, noted that consensus expectations are for FY21 adjusted pre-tax profit of £329m.
In the six months to 30 June, the housebuilding segment saw completions rise to 3,126 from 1,235 in the same period a year ago and is on track to deliver around 6,500 units in the year, versus 4,652 in 2020.
The average weekly private sales rate increased 10% from 2019 to 0.76, while the group forward sales position stood at £2.7bn, with 93% of forecast FY21 total housebuilding units and partnership mixed tenure units secured. Vistry said this was "a much higher level" than in previous years.
The group also increased its land bank, securing a total of 5,642 new plots, lifting the land bank by around 1,600 in the last 12 months.
Chief executive Greg Fitzgerald said: "The group has had a very strong first half with a step up in completions, price increases, improved profitability and strong cash generation, all ahead of our expectations at the start of the year.
"Market trends remain positive and we are seeing good demand for completions beyond the end of the Stamp Duty holiday. There is some pressure across the material supply chain in terms of price increases and extended lead times, but we are working well with our partners to ensure successful delivery of our build programme and expect this position to ease through the second half. House price inflation is more than offsetting any cost pressure."
William Ryder, equity analyst at Hargreaves Lansdown, said: "Vistry’s trading update shows how simple life can be for housebuilders when demand is strong. The first half was well ahead of management’s forecasts as completions and prices rose together.
"For the time being, house price increases are more than offsetting the impact of build cost inflation. As long as this remains the case, and demand remains strong, Vistry will enjoy an enviable tailwind. While there’s always a risk the market could turn, nothing in this update worries us unduly. Vistry still has a strong Housebuilding division and the Partnerships business offers something different to its peers."