Few people will have been happier to see the back of 2024 than Greg Fitzgerald, chief executive of affordable house builder Vistry Group (VTY).
After three profit warnings, the final one on Christmas Eve no less, and a set of results which missed expectations by a country mile, leading to the final dividend being scrapped, this year represents a reset with the firm focused on reducing its working capital and its net debt.
In addition, a government promise in March this year to inject £2 billion of affordable home grants, followed by a commitment in June’s spending review to channel £39 billion into social and affordable housing over the next decade should drive momentum in the company’s core market.
Having said that, Vistry’s May trading update, issued the day of its AGM (annual general meeting), revealed its forward order book was lower than at the same point in 2024 (£4.6 billion versus £4.9 billion), although it did say private reservations were picking up.
The firm guided for open market volumes, meaning those to private buyers, to match 2024’s level, while noting strengthening demand in the private rented sector and a growing amount of investment money being raised in the sector.
However, it also admitted it was seeing ‘some upward pressure’ on both building material and labour prices, which it said it was having some success mitigating through ‘proactive engagement’ with its sub-contractors and suppliers.
Therefore, all eyes will be on the firm’s first half trading update next Thursday 10 July and whether it tweaks its outlook up or down.
Hopefully, rather like Bellway (BWY)last month, Vistry will have enjoyed a further uptick in demand since May, meaning it can lift its outlook and afford to reinstate the dividend, although we aren’t holding our breath just yet.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
magazine
