Vistry Group had a tough start to 2025 as completions and profits sank amid a slow housing market that is yet to feel the impact of Labour’s efforts to boost activity.
Housebuilder Vistry Group delivered adjusted operating profit of £124.4 million for the six months to 30 June, down from £161.8 million in the same period last year but in line with expectations.
The company completed 6,889 homes, 12% fewer than the 7,792 units delivered in the first half of 2024, reflecting reduced partner demand.
Despite lower volumes, the average selling price rose 4% to £283,000, helping to offset the decline partially. Group revenues fell 6% to £1.85 billion.
These are pretty dismal figures and paint a picture of a company feeling the pressure of the slow implementation of government homebuilding policy.
“Vistry’s first-half results didn’t bring any nasty surprises as the housebuilder looks to rebuild investors’ confidence. In line with previous announcements, the group saw revenue decline and profits fall at double-digit rates as partner-funded activity came off the boil,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“Much more important than first-half numbers though was the outlook for the second half, and it didn’t disappoint. The UK government’s pledge to invest an unprecedented £39 billion in affordable housing over the next decade marks a significant step up in funding, and it’s already having the desired effect.
“The money has started to flow, and partner-funded activity is picking up again, which should drive growth in the order book in the near future. As these houses are built, that will convert into revenue and should help the top line return to growth territory.”
The firm is well-positioned to benefit from the government’s £39 billion Social and Affordable Homes Programme, announced in June. One would think that the expected future demand created by this scheme is playing a significant part in shares trading down only 5% on Wednesday.
Vistry has built a strong pipeline of transactions expected to be completed in the second half, with positive momentum heading into 2026.
The company remains 88% forward sold for the full year and guidance is unchanged, with management expecting year-on-year profit growth for 2025.
The weakness could be a buying opportunity for those confident in the long-term picture.