Vistry – Housing Still Hot

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Vistry Group PLC (LON:VTY)’s full year underlying profit before tax is expected to be £345m, up from £143.9m in 2020 and in line with guidance. This was driven by strong demand and a 6% uptick in house price inflation.

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So far in 2022, the group’s had no significant Covid-related impact. Forward sales, as of 31 December are up 24% to £1.94bn, reflecting double-digit increases in both Housebuilding and Partnerships forward sales.

The shares were broadly flat following the announcement.

Vistry's Full Year Results

Laura Hoy, Equity Analyst at Hargreaves Lansdown:

“As expected, Vistry’s full year results look strong after a red-hot year in the UK’s housing market. However it’s the group’s future prospects that had our attention—forward sales are significantly ahead of where they were last year at this time. This suggests that despite economic concerns and the Bank of England’s rate hike, demand was still simmering heading into the new year.

Inflation continues to be a concern for Vistry and the sector as a whole—build costs are seen rising by 5% this year and wage costs will take another hefty bite out of profits. But the group clearly sees demand offsetting these headwinds, forecasting a “significant” uptick in profits this year.

Demand for housing in the UK is somewhat of a given due to the supply imbalance, but rising mortgage costs could put a damper on things if rates continue to rise. Vistry’s Partnerships arm, which focuses on mixed-tenure projects, adds a layer of security if the wider market starts to stagnate. It’s still just a small slice of overall revenue, but its robust growth over the past year is encouraging.”

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