Housebuilder says it may end the year with more cash than debts
Shares in Vistry have risen by 5% this morning after the housebuilder said it had brought in more cash than expected and is considering reinstating a dividend for its 2020 financial year.
Vistry said it now expected net debt – cash in the bank minus all its debts – at the year-end to be no greater than £40m, and that the firm could even move into a net cash position.
As recently as June this year the firm was trading with a net debt of £357m. While it said in November that this figure was likely to reduce “significantly” more than expected, given strong trading, it did not put a figure on this.
The firm, formed at the start of the year from the merger of Bovis with Galliford Try’s housebuilding and partnerships businesses, said today that the reduction in debt was driven by “continued strong trading and low cancellations, good cash management at an individual business level, and the ongoing benefits from the successful combination and integration of the enlarged business”.
It said expected completions in December would be at a normal level.
The firm added: “Given the strong cash performance and accelerated deleverage, the board will consider reinstating a modest final dividend in respect of FY20.”
If Vistry does reinstate the dividend it will be a further unexpected boost for shareholders, following its strong trading statement last month.
Vistry said last month that it would reinstate the dividend – cancelled at the onset of the coronavirus pandemic – in November next year, which was already sooner than previously expected.
Vistry’s market update today comes after a string of strong trading updates from housebuilders over the past month following the rebound in the housing market in the wake of the spring lockdown.
Mortgage lender the Halifax this week said prices have now risen 7.5% in the past 12 months, with the increase over the past five months the strongest price run for more than 15 years.
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