Vistry Group PLC (LON:VTY) have told shareholders on Wednesday that they expect to deliver record full year profit.
The firm, who is formerly known as Bovis Homes as mentioned the political and economic uncertainties as a stagnating factor on the British property market.
Despite these complications, it seems that Vistry have managed to shake off the storm and continue to successfully trade.
“As previously reported, market uncertainty surrounding Brexit and the general election led to some increased pressure on pricing in the second half resulting in a c. 1-2% reduction in underlying sales prices for that period. This was, in part, offset by a combination of the Group’s own build cost savings and a lack of cost inflation. “
The firm told shareholders on Wednesday that full year profit before exceptional items is expected to rise above market forecasts of £181.6 million.
This is an impressive expectation, and shows growth from 2018 figure of £168.1 million with operating profit before exceptional items at £174.2 million.
The company has only recently changed its name following two acquisitions from Galliford Try PLC (LON:GFRD).
Looking at 2019 trading figures, the firm said that it had completed 3,867 new homes, 2.9% more than 3,759 in 2018 which would have pleased shareholders.
Notably, the average selling price was £279,000, up 2.1% from £273,200 the year before.
Vistry give shareholders confidence
Greg Fitzgerald, Chief Executive commented:
“The Group has made further operational progress over the past 12 months and for 2019 expects to deliver another year of record profit. Building high quality new homes for our customers has been, and remains our priority, and I am confident we will finish the year as an HBF 5-star housebuilder.
“We completed the transformational acquisition of the Linden Homes and the renamed Vistry Partnerships at the start of this year; integration is well under way and we are fully focused on delivering the clear and significant benefits from this exciting combination as quickly as possible.”
Vistry Outlook
The company said “We are delighted to have completed the transformational acquisition of the Linden Homes and Vistry Partnerships businesses at the start of the year. Our focus is on successfully integrating these businesses and delivering the clear and significant benefits from the combination as quickly as possible.”
“Whilst it is early in the year to comment on 2020 trading, we have a strong forward sales position and trading to date has been very positive, with consumer confidence returning and industry fundamentals remaining strong. We are excited about the prospects for the enlarged business and expect to report much progress in the year ahead.”
Galliford Try and Vistry Deal
Vistry at the start of November, agreed a substantial home building deal with Galliford Try in a for Bovis to takeover the two Galliford housebuilding business units.
The deal was announced on November 7 and was valued at £1.14 Billion, which sends out a huge statement of intent for competitors.
The agreement comes after Galliford rejected a £1.05 billion bid from rival Bovis for its Linden Homes and Partnerships & Regeneration businesses back in May.
In September the two confirmed they had resumed talks. Bovis was to issue shares worth £675 million and pay £300 million in cash, combined with £100 million of Galliford debt.
The two firms announced that the terms from the September agreement were unchanged, and will see will see Bovis issue 63.8 million new shares to Galliford, valued at £675 million, pay £300 million in cash, and take over Galliford’s £100 million debt.
Bovis also added that they will carry out a “bonus issue” of 5.7 million shares to existing shareholders
Rivals in the market
This morning, rival Persimmon (LON:PSN) told shareholders that it expects a decline in full year revenue, however profit will meet expectations.
Across the annual period, the firm said that revenue is expected to total £3.65 billion, a 2.4% fall from £3.74 billion last year.
Notably, new housing revenue dropped 3.5% year-on-year to £3.42 billion with new legal completion volumes down 3.6% to 15,885 from 16,449.
The firm said that average selling prices remained consistent with 2018, in a year of political uncertainty which has hampered the property development market.
Persimmon added that they have 365 developments in construction, which remains flat year on year and plans to open 80 new sites in the first half of 2020.
Shareholders of Vistry will remain optimistic, however there is no denying that the shroud of Brexit is still overhauling the British Property market.
Shares in Vistry trade at 1,326p (-1.19%). 15/1/20 14:35BST.
