Housebuilder expects full year profit to be higher than in 2023

Vistry is on track to deliver nearly 2,000 more homes than last year, with “robust” demand for affordable homes seemingly vindicating the firm’s recent pivot to partnership work. 

According to a trading update published this morning, the group is on track for more than 18,000 completions in FY24, an increase of more than 10% on the 16,118 finished in 2023 and up from the business’ previous expectation of 17,500 units. 

greg fitzgerald

Vistry chief executive Greg Fitzgerald

It predicted half-year and full-year profit would be ahead of last year, when it recorded pre-tax profit of £305m, and said it remained confident in achieving £800m operating profit in the medium term.  Building 18,000 homes would see Vistry exceed the 17,200 figure completed by Britain’s largest housebuilder Barratt last year.

Vistry last September announced a major strategic pivot, merging its traditional housebuilding arm into its partnerships business and subsequently announcing a series of large “portfolio deals”.  

“The group has had a good start to the year with our unique Partnerships model clearly demonstrating its market resilience,” said Greg Fitzgerald, chief executive of Vistry. 

He noted that the anticipated growth in profit and completions was “underpinned by our strong forward sales position”, which totals £4.9bn, up 10% on the same position last year.   

“We remain confident in our differentiated strategy and are making good progress towards our medium-term targets,” he added. 

Vistry executives believe the partnerships model, in which developers work to build homes for long-term investors, often in the public sector, will eventually allow it to build 25,000 homes per year.  

>>See also: ‘I’m extremely demanding’: Greg Fitzgerald on delivering the Vistry growth plan

>> See also: Profit and revenue up as partnerships shift continues at Vistry

>> See  also: Vistry announces new board appointments  

The trading update said Vistry was continuing to see “attractive partnership opportunities” that meet its requirements for a minimum of 50% of units to be partner-funded, with a 40% return on capital and more than 12% operating margin.  

The group has secured new land and development opportunities totalling 6,037 mixed-tenure new homes across 19 developments in the year to date. 

In the open market, Vistry said its sales rate had been improving since the start of the year, while pricing has remained relatively flat. 

The Group’s total sales rate has averaged 0.96 (2023: 0.87) in the year to date, increasing to 1.23 (2023: 1.24) over the last 8-week period. 

It said demand from registered providers (RPs) for affordable homes “remained robust”, noting particularly that for-profit RPs were continuing to demonstrate strong demand. 

The trading update comes ahead of Vistry’s annual general meeting, which is being held at 12pm today.