Vistry shares were up 2% to 830.2p in early morning trading on Friday, after the group reported an expected FY 2022 adjusted pre-tax profit at the high range of market forecasts.
The company highlighted strong HY1 performance, supported by on-going positive market trends, and positive demand across all business sectors with an 11% rise in HY1 average weekly private sales rates to 0.84 against 0.76 the last year.
Vistry confirmed its housebuilding completions climbed to 3,219 units from 3,126 year-on-year, with FY 2022 adjusted gross margins anticipated at 23% ahead of target.
The firm added its partnerships continued to deliver growth, including a 24% increase in higher margin mixed-tenure completions to 1,106 units against 895 units in HY1 2021, alongside an overall partnerships adjusted operating margin for the FY expected at 10% over target and a return on capital employed in excess of 40%.
Its partnerships also secured 2,166 plots over the period from 1,499 plots the year before, and margins on new land at the upper end of its target range consistent with Vistry’s partnership medium term targets of over 12% operating margin and above a 40% return on capital employed.
Vistry further announced a promising forward sales position, with total housebuilding and partnerships’ mixed tenure forward sales growing 16% to £2.1 billion from £1.8 billion in the previous year and 92% of total forecast units for FY 2022 secured.
The group added it had experienced a successful term in the land market with housebuilding replenishing its land bank, securing a lower number of 3,360 plots compared to 4,143 the last year, at an average gross margin and return on capital employed both in excess of 25%.
Vistry drew attention to another positive HY term of cash generation, with net cash climbing to £115 million on 30 June 2022 against £31.6 million year-on-year, reflecting its high performance in the period. Its month-end average net debt for the rolling 12 months to 30 June was £73 million compared to £239 million in HY1 2021.
“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,” said Vistry CEO Greg Fitzgerald.
“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.”
“Whilst mindful of the wider economic uncertainties, we are positive on the outlook for the Group and expect to see significant margin progression in the full year, with adjusted profit before tax for FY 22 to be at the top end of market forecasts.”
