Vistry on course to hit raised profit expectations

Housebuilder Vistry has said it is fully sold for the year and remains on course to hit twice-upgraded profit expectations when it announces results for 2021.

Vistry, formed last year from the merger of Bovis Homes with the housebuilding operations of Galliford Try, said in a trading update for the period from July to yesterday that it is also continuing to seeing reservation rates rise.

The £2bn-turnover housebuilder said it was “firmly” on track to meet “adjusted” pre-tax profit targets of £345m for the 2021 calendar year, following profit upgrades in May and September.

The adjusted profit before tax figure excludes exceptional items and some amortisation effects.

The business said its average weekly sales rate per site ticked up to 0.77 in the period, from 0.76 in the first half of the year – well above both the 0.58 proforma score reported in the equivalent 2019 update and the 0.67 seen last year.

This contrasts with today’s update from Persimmon, in which it said average sales rates had dropped since the immediate post-covid period last year. Shares in Persimmon dropped more than 3% in early trading, while Vistry’s value fell by just over 1%.

Greg Fitzgerald, chief executive (pictured), said the 9,000 homes a year firm was “making great progress” towards its targets in both its traditional housebuilding and partnerships operations.

Fitzgerald has targeted the delivery of 8,000 homes per year from its traditional housebuilding business in the “medium term”, at the same time as raising annual revenue from the partnerships business, currently around £1bn, to £1.6bn within five years.

The update said the business was currently experiencing build cost inflation of 4-5%, compared to 5% cited by Persimmon. Fitzgerald added: “We continue to see strong demand across all our business areas and working in close partnership with our supply chain, we are actively mitigating any supply chain pressures. As a result, we are firmly on track to deliver a significant improvement in profits this year.

“The outlook is positive, and we are confident we will see a further step up in performance in FY22 as we drive towards achieving our medium term targets.”