Vistry lifts profit outlook as strong demand offsets higher costs

Housebuilder Vistry said it has exceeded expectations over the first half of 2022 but warned that planning delays are causing longer lead times for new properties.

The company saw shares nudge higher after it said adjusted profit will be at the top of market expectations following strong demand.

Greg Fitzgerald, chief executive, said forward sales have continued to strengthen over the past six months despite rises in interest rates.

UK housebuilders have underscored robust demand despite house price growth coming under pressure from the cost-of-living crisis.

Vistry said housebuilding completions increased to 3,219 over the first six months of the year, from 3,126 in the same period in 2021.

The company highlighted there has been “continued strong and consistent demand across all areas of the business” with a rise in the private sales rate.

It added that the strong demand was also boosted by price increases of 5% to 8% in its private units over period, which more than offset cost increases over the period.

Vistry said it has seen jumps in the cost of some materials following a rise in energy prices and wages. It expects cost inflation of around 6% for the year.

The group also told shareholders that planning is “the single most significant constraint on the business, from continuing capacity issues within local planning authorities”.

It said it has therefore factored in longer lead times into its site forecasting but highlighted that its strong balance sheet has made it resilient to these issues.

Mr Fitzgerald said: “The group has delivered an excellent first-half performance, significantly exceeding our expectations at the start of the year.

“Demand has been strong across all areas of the business and our forward sales positions further strengthened.

“The business is in great shape and well positioned to maximise the broader market opportunities.

“With leading capability across all housing tenures and being one of the largest private sector providers of affordable housing, the group is uniquely positioned within the housebuilding sector, and we continue to drive the benefits from our Housebuilding and Partnerships combination.”