Vistry ahead of expectations amid sales boom

Vistry is on track to exceed its profit margin targets after a better-than-expected start to the year, it has said in a trading update this morning.,

The housebuilder, in an update for the six months to June 2022, said good demand has led to an 11% increase in its average weekly private sales rate to 0.84 units.

It now expects its adjusted profit before tax to be at the ‘top end’ of market forecasts at around £417m.

The group’s housebuilding division completed 3,219 homes, up slightly on the 3,126 achieved in the same period last year, with its adjusted gross margin now set to exceed its initial target of 23%. Meanwhile. Vistry’s partnerships arm completed 1,106 homes in the half-year, a 24% increase year-on-year. It now expects its partnerships operating margin to be ahead of its 10% target.

The firm said strong demand has been accompanied by house price increases of 5% to 8%, offsetting cost increases in the period, with build cost inflation around 6%.

It said planning remains a barrier and added: “Planning remains the single most significant constraint on the business, from continuing capacity issues within local planning authorities, to the increasingly challenging political and regulatory environment around issues such as nutrient neutrality.

“We are responding proactively by factoring longer lead times into our site forecasting, which enhances our control, and increasing our senior expertise in these areas.”

Vistry, which is due to release interim results in September, last week announced it is backing Building’s sister title Housing Today’s A Fair Deal for Housing campaign calling on the government to properly commit to its 300,000-home development target (see more below).