- Adjusted pre-tax profit expected to grow 5% in 2023 supported by regeneration arm
- Rising costs and fire safety provisions hit 2022 profit
- Improving sales trend in recent weeks
Housebuilder and regeneration specialist Vistry (VTY) demonstrated the benefits of a diversified approach as it delivered a surprisingly positive assessment of its outlook for 2023 alongside 2022 results.
The company has a significant footprint in regeneration work and affordable housing through its Partnerships arm.
This is largely thanks to its £1.3 billion acquisition of Countryside Properties last year and a 2020 merger with relevant businesses previously owned by construction firm Galliford Try (GFRD) in 2020.
This marks it out from the rest of the housebuilding peer group and helps underpin guidance for a 5% increase in profit this year despite a softening housing market. Investors responded positively, marking the shares 3.8% higher to 760p.
The company is not immune to the challenges facing the rest of the industry, while revenue was up 13% to £2.73 billion in 2022, rising costs meant pre-tax profit fell 23% to £247.5 million.
This fed into a reduced final dividend, down 20% to 32p, with total dividends for the year down 8.3% to 55p.
So far this year the company says its Partnerships division is seeing a good level of demand from housing associations and local authorities as well as the private rental sector.
AN IMPROVING SALES TREND
The group as a whole saw an improving trend in private sales in the first 11 weeks of the year with an average private sales rate per site of 0.54, rising to 0.62 in the last four weeks. It seems an increase in the availability and affordability of mortgages post the mini-Budget shock in September 2022 has been a key driver.
Vistry expects an adjusted pre-tax profit of £440 million up at least 5% from the adjusted figure for 2022, which included provisions linked to fire safety upgrades, pushed for by the Government in the wake of the Grenfell disaster.
The company also unveiled a robust balance sheet with net cash of £118.2 million despite a £95.2 million cash outflow related to the Countryside deal.
