Housebuilder reports 139% increase in profit

Vistry Group has pledged to work with the government to find a ‘solution’ to cladding costs as it reveals its profit is in line with expectations for the year.

The housebuilder is the first major developer to publicly comment on the proposals announced at the start of the week.

In a trading update, the housebuilder said it was “supportive” of Michael Gove’s plan to force developers to pay £4bn to remediate tower blocks between 11 and 18 metres in height.

Vistry Perceval House Ealing

Vistry’s Perceval House scheme in Ealing, west London

It added: “We fully agree that the costs of remediation should not be borne by leaseholders and we will work directly with the Government as well as with the Home Builders Federation to deliver a solution.

“We will update on any implications for the Group as these suggestions evolve into clear proposals

The comments came as Vistry said its pre-tax profit for 2021 will be around £345m, a more than doubling on the £143.9m profit reported in 2020. This follows Vistry increasing its profit expectation in September, saying its profit would be 5% higher than the market consensus forecast of £329m.

See also>> Does Gove’s £4bn cladding levy mark the start of an anti-development era?

Vistry’s housebuilding division reported a 41% increase in completions from 4,652 last year to 6,551 in 2021, while it partnerships division similarly increased its mixed tenure completions from 1,479 to 2,088 units. Vistry’s overall landbank rose to 11,772 plots, up from 8,652 last year.

The group said it has seen supply chain pressures and inflationary price increases on certain products and skilled labour throughout the year, although these have eased recently.

It is forecasting build cost inflation of 5% in 2022.

Vistry was formed in January 2020 following the £1.1bn purchase by Bovis Homes of Galliford Try’s partnerships and Linden Homes businesses.

It will release its full 2021 results on 2 March.