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Vistry profits set to beat expectations as housing market boom continues

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Bosses at housebuilder Vistry have revealed they expect profits this year to be ahead of expectations as a boom in the housing market shows no signs of slowing down.

The company said average weekly sales were up 70% on last year and 21% up on pre-pandemic levels.

It is now on track to complete 6,500 units, compared with 4,652 last year – ahead of expectations.

Coronavirus – Thu May 21, 2020
Construction continues unabated despite Covid-19 restrictions (Brian Lawless/PA)

Vistry, formerly known as Bovis Homes, explained that as a result, underlying pre-tax profits will hit around £325 million, compared with previous estimates of £310 million for the year.

A transition to the new Help to Buy scheme, which came into force during the period, is also seeing “good demand”, the company added.

Forward sales for the group hit £2.7 billion, with 83% of forecast units secured, and a target of £1 billion revenues by next year remains on track.

But the company did warn signs of inflation were creeping into the housebuilding market, with economic data from the sector showing raw materials are getting more expensive.

Vistry said: “We are… seeing modest levels of build cost inflation across both our labour and material supplies, with the agreements entered into on the formation of Vistry Group providing some protection in respect of our material procurement.

“Our focus on strong supply chain relationships and well-controlled procurement is benefiting us during a period of high demand.”

But cost pressures are not stopping the firm, which confirmed its housebuilding division secured 3,230 plots across 13 developments for £145 million so far this year.

Its partnerships division, which builds mixed use sites, secured 1,177 plots of five sites so far.

Chief executive Greg Fitzgerald said: “As we approach the end of our first half, we anticipate results for the six months will be well ahead of our previous expectations.

“Vistry Housebuilding is firmly on track to deliver a significant step up in completions in 2021 and remains firmly focused on driving profitability to deliver the expected improvement in gross margin.”

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