12th Jan 2022 10:04
(Alliance News) - Vistry Group PLC on Wednesday said it expects to report a sharp rise in profit for 2021, fostering confidence for a significant step up in earnings and returns in 2022.
For the year, the FTSE 250 housebuilder said it expects adjusted pretax profit to reach around GBP345 million, more than doubled from GBP143.9 million the year before.
For 2021, Vistry delivered a total of 6,551 home completions, a 41% rise from 4,652 in 2020, with an increase in affordable homes allowing the average selling price to edge upwards to GBP304,000 from GBP303,000.
Meanwhile, in the group's Partnerships division, mixed tenure completions rose 41% year-on-year to 2,088 units from 1,479 units, with a 12% increase in the average selling price to GBP229,000 from GBP204,000.
Looking ahead, Vistry noted the letter from Housing Secretary Michael Gove on Monday that developers in the UK must agree a GBP4 billion plan to fix dangerous cladding on low-rise flats by early March or risk new laws forcing them to act.
"We fully agree that the costs of remediation should not be borne by leaseholders and we will work directly with the Government as well as with the Home Builders Federation to deliver a solution," the group stated.
In terms of operations, Vistry said it has started 2022 in a strong position, with total group forward sales at the end of December up 14% at GBP2.68 billion from GBP2.36 billion the same date a year before, with 54% of the forecast units for 2022 already secured.
Housebuilding is on-track to deliver an improvement in profitability in 2022 with a gross margin target of 22%, while Partnership remains on-target of an operating margin of least 10% and revenue of no less than GBP1 billion.
"We are focused on leveraging the group's unique combination of Housebuilding and Partnerships assets as well as our strength and capability across all housing tenures, with our target of delivering sector leading returns in the medium term. I'm delighted with the progress in the year - our Housebuilding and Partnerships businesses are together securing new, high quality development opportunities, while working successfully alongside each other on a number of existing sites. This successful joint approach is delivering enhanced overall returns," said Chief Executive Greg Fitzgerald.
Vistry will publish its annual results on March 2.
Shares in Vistry were down 1.6% at 1,144.50 pence on Wednesday in London.
By Dayo Laniyan; [email protected]
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