Vistry expects 2022 profit at “top end” of forecasts

Vistry Group expects its profit for 2022 to be at the top end of forecasts.  Providing an update on the period from January 1 2022 to the present day, the housebuilder said that with the continuing strong demand for its homes, profit expectations for its first half had “moved forward”. For the full year, it anticipates adjusted pre-tax profit at the top end of the previously given range of £396.3 million to £415 million.

During the calendar year so far, Vistry has seen an average weekly private sales rate of 0.86 against the 0.75 of the equivalent period last year.

It said that it was operating well from its sites, with the company set to deliver construction output in H1 2022 at a similar level to last year’s first half.

Vistry pointed to its “very strong” forward sales position. Total Housebuilding and Partnerships’ mixed tenure forward sales were up to £2,498 million (May 14 2021: £1,938 million). It has secured 83% of total forecasted units for 2022.

Alongside the robust demand for its homes, in the year to date, Vistry has seen price increases of 5% to 8% on its private units.

These price increases were continuing to “more than” offset build cost inflation, Vistry noted.

It now expects 2022 margins in both the Housebuilding and Partnerships divisions to also be ahead of previous targets.

At the same time, Vistry noted higher than anticipated energy costs within the supply chain, translating into higher costs for certain materials.

After signing the government’s building safety pledge in April, Vistry said it continued to expect that its implied further remediation costs would be in the range of £35 million to £50 million. This is in addition to the group’s existing fire safety provision of £25.2 million as of December 31 2021.

From its added commitments to fire safety, it also expects an increase in group administrative expenses of around £1.5 million to £3 million per annum.

As previously announced, Vistry’s chairman Ian Tyler will step down today after eight-and-a-half years in the role. Ralph Findlay is his successor, who has served as non-executive director since April 2015. Findlay, who will take up his role in July, has amassed much experience at FTSE businesses, Vistry said, having been ceo of brewing and pub retailing business Marston’s for 20 years.

Greg Fitzgerald, Vistry’s ceo, said: “Despite the macro uncertainties, Vistry’s very strong start to the year has continued. Our sales rate is at 0.86, up 15% on prior year, with positive momentum on pricing and all our sites operating well.

“We are trading ahead of expectations and expect our margins for both Housebuilding and Partnerships in 2022 to exceed our previous targets.”