Vistry – trying to rebuild investor confidence one brick at a time
Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Vistry’s first-half results didn’t bring any nasty surprises as the housebuilder looks to rebuild investors’ confidence. In line with previous announcements, the group saw revenue decline and profits fall at double-digit rates as partner-funded activity came off the boil.
Much more important than first-half numbers though was the outlook for the second half, and it didn’t disappoint. The UK government’s pledge to invest an unprecedented £39 billion in affordable housing over the next decade marks a significant step up in funding, and it’s already having the desired effect. The money has started to flow, and partner-funded activity is picking up again, which should drive growth in the order book in the near future. As these houses are built, that will convert into revenue and should help the top line return to growth territory.
Selling prices are on the rise, demand is outstripping supply, and build-cost inflation remains at manageable low single-digit levels, which should support a strong uplift in profitability in the second half. With its tilt towards affordable housing, Vistry looks better positioned than many of its peers to benefit from the government’s affordable housing scheme.”