Vistry reiterates guidance despite drop in house sales

(Sharecast News) - Housebuilder Vistry Group reiterated full-year guidance on Wednesday, despite Budget uncertainty weighing on private house sales in the second half. Updating on trading in the year to December end, Vistry confirmed adjusted pre-tax profits were on track to come in around £270m, up from last year's £263.5m and in line with expectations.

Revenues, however, were broadly unchanged at £4.2bn, after the total average selling price rose 3% to £282,000 but completions fell 9% to 15,700.

Vistry builds and sells both private homes and affordable housing, through its partnership business. Partner-funded units fell 8%, to around 11,600, while open market units decreased 11% to 4,100.

The overall sales rate averaged 0.96 sales per week, down from last year's 1.07.

Vistry said the slowdown in sales reflected "uncertainty driven by the Budget, causing a more subdued market in the third quarter and the first half of the fourth quarter".

Funding uncertainty in the first half also weighed on the affordable housing unit in the first half.

However, Vistry also flagged "strong" operating margin progression during the second half, boosted by new, higher-margin developments and increased operating leverage.

Greg Fitzgerald, chief executive, said: "I am pleased that we delivered on our full-year guidance, with a particularly strong second-half performance despite continued challenges in the open market and the uncertainty related to the Budget.

"Strong margins enabled us to mitigate top line headwinds and reflect the focus on driving improved site mix and cost management over the last 12 months."

Looking to the current year, Vistry said the forward sales position stood at £4bn as at 31 December, down modestly on 2024's £4.4bn.

However, Fitzgerald said: "While market conditions remain uncertain in the near term, further benefits of our cost, productivity and mix enhancement initiatives will support the delivery of good year-on-year financial and strategic progress."

By 0945 GMT the stock - which has put on 22% over the last year - had fallen sharply, down 8% at 629p.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "While Vistry is better-positioned than most to benefit from the government's pledge to invest £39bn in affordable housing over the next decade, it's likely to be a slow-burning opportunity rather than a quick win.

"The balance sheet isn't in the best of shape, so dividend payments and share buybacks aren't a priority for now.

"Potential investors will need a lot of patience if they want to back this horse, and there looks to be better ways to play the UK housing market as things stand."

Jefferies, which has a 'hold' rating on the stock, said: "From 2026, we believe Vistry should be well-placed to benefit from government efforts to support affordable housing.

"However, with another second-half skew to profits in 2026, investors may still need to gain greater comfort on near-term forecasts and balance sheet before they can progress to considering the group's potential growth trajectory."