Vistry plans to build more homes in 2024 after annual profit beat

Vistry expands construction: British home construction firm Vistry announced plans to increase its homebuilding activities in 2024 following a successful financial year in 2023, surpassing market expectations.

Encouraged by steady demand for its affordable housing options, particularly from the private rental sector, the company aims to capitalise on the stable housing market conditions, which have benefited from reduced borrowing costs compared to the previous year's challenges with high inflation and increasing interest rates. 

Despite a slight setback due to the Bank of England delaying rate cuts, Vistry remains optimistic about the sector's recovery.

Share buyback plan

Trading slightly higher, Vistry disclosed its plan to initiate a share buyback program worth £100 million in April. The company targets the construction of over 17,500 homes in 2024, an increase from the 16,118 units built in the previous year. Notably, Vistry now holds the distinction of being the leading homebuilder in the UK based on annual home construction.

CEO Greg Fitzgerald revealed plans for the medium term, aiming for an annual output of approximately 23,000 to 24,000 units. Moreover, Vistry anticipates that only 30-35 per cent of its revenue this year will be generated from traditional real estate markets, with the majority coming from collaborations with local authorities, housing associations, and government entities.

Analysts applaud strategy

Having shifted its focus towards affordable housing following the acquisition of Countryside in 2022, Vistry's strategic realignment is viewed favourably by analysts such as Aarin Chiekrie from Hargreaves Lansdown, who believes this approach will position the company advantageously amidst housing market challenges.

Vistry's financial results for 2023 surpassed market expectations, with an adjusted pre-tax profit of £419.1 million, exceeding the average analyst estimate of £405.9 million. This contrasts with rival Persimmon's recent announcement of subdued market conditions and a 52 per cent drop in annual profit.

(With Reuters Inputs)