Vistry reinstates dividend after strong trading

Shares in Vistry rose this morning after the housebuilder reinstated its dividend and said that profit for the year will come in at the top end of expectations.

The firm, formed from the merging of Bovis Homes with Galliford Try’s housebuilding and partnerships businesses at the turn of the year, said sales had remained “robust” over the last couple of weeks in the wake of the announcement of a second national covid lockdown.

Posting a trading update for the four months between July 1 and November 11, Vistry said it was now on track to deliver profit for the year at the top end of the expected range of between £130m-£140m.

In addition, it said it expected to more than double this to £310m in 2021, given stable trading conditions.

Vistry’s announcement comes as the Office for National Statistics released GDP data showing that the housebuilding sector fully recovered to its pre-pandemic level of output in the third quarter of the year, despite ongoing social distancing requirements on site.

It also following profit upgrades in recent days from Taylor Wimpey and Crest Nicholson, and a bullish trading update this week from Persimmon.

In September the firm reported a £12m loss for the half year to the end of June, as the pandemic forced it to close sites, cutting pro forma revenue to just over half its 2019 level.

Shares in Vistry rose initially as much as 4% in early trading before falling back slightly.

Vistry’s update said the firm had taken the decision to reinstate its dividend earlier than previously anticipated, given the strong trading, with an interim payment to be made in November next year. Strong trading also meant it now expected to deliver a “significantly” lower net debt by the end of the year than the £357m previously expected.

It said the firm is still aiming to ramp up delivery by its partnerships housing business to 3,000 homes per annum by 2022, nearly three times the level seen last year. Despite the spring hiatus in build activity, Vistry said it now expected that 2020 will also see an increase on the 1,158 partnerships completions made in 2019.