The UK’s largest housebuilder, Vistry, has reported a significant increase in half-year profits, bucking the trend in a challenging market. The company’s decision to focus on affordable homes appears to be yielding positive results, with adjusted pre-tax profit rising 7% to £186.2 million in the first six months of the year. Vistry’s chief executive, Greg Fitzgerald, has hailed the company’s strategy as potentially “inspired” in light of the current political climate.
The shift towards building homes predominantly for local authorities, housing associations, and institutional landlords has set Vistry apart from its competitors, many of whom are grappling with reduced demand due to higher mortgage rates. The company’s statutory pre-tax profit saw an even more impressive jump of 37% to £156.7 million, up from £114.2 million in the same period last year. This growth comes at a time when other housebuilders are cutting shareholder payouts, while Vistry has committed to returning £130 million to investors through share buybacks in the coming months. Fitzgerald, 60, believes that the government, regardless of political affiliation, will need to address the UK’s “housing disaster” by increasing the supply of affordable homes.
He pointed out the unsustainable costs of temporary housing solutions, stating, “It’s probably going to cost the government £3 billion this year putting families into Holiday Inns this week and Premier Inns the next.” Vistry’s production increased by 9% in the first half of 2024, with 7,792 flats and houses built. The company expects to construct more than 18,000 homes this year, with over half destined for local authorities and housing associations. However, concerns have been raised about the financial health of these partners, particularly in light of cladding repair costs and the need for stock improvements. Despite these challenges, Fitzgerald remains optimistic about the future, especially with the potential for government support.
“We think those concerns are going to start to be alleviated by the Labour government as we go towards the budget,” he said. Investors have responded positively to Vistry’s performance, with shares rising 6.5% to £14.04 in afternoon trading. The company’s stock has already seen a remarkable increase of over 70% since last summer, reflecting growing confidence in its affordable homes strategy.
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