7th Sep 2021 09:22
(Alliance News) - British housebuilder Vistry Group PLC on Tuesday raised its full-year guidance and noted plans to sustain its dividend cover policy after its first half exceeded expectations.
Shares in Vistry were trading up 5.1% at 1,286.00 pence each in London on Tuesday morning as the firm swung to interim profit on higher revenues.
Revenue surged to GBP1.10 billion in the six months ended June 30, up 82% from GBP606.4 million a year prior.
Revenue remained significantly above the GBP472.3 million reported in the first half of 2019, so before the pandemic.
FTSE-250 listed Vistry swung to a pretax profit of GBP156.2 million in its first half from a GBP12.2 million loss the previous year. At the same point in 2019, the company reported pretax profit of GBP72.5 million.
Following a strong first half, the company raised its annual outlook. It now expects adjusted pretax profit of GBP345 million, around 5% ahead of consensus estimates.
The company also proposed an interim dividend of 20p per share, having not declared one this time a year earlier.
"Looking ahead, the board expects to sustain the ordinary dividend cover at two times. Any surplus capital, following land investment and the payment of the ordinary dividend, is expected to be returned to the group's shareholders through either a share buyback or special dividend," the company added.
Completions surged 76% to 5,351 during the half, from 3,034 a year ago, with the 2020 comparison period lapping a time which saw the UK housing sector shuttered due to Covid-19 containment measures.
Excluding partnerships, total housebuilding figures rose sharply to 3,126 from 1,235 a year earlier. However, housebuilding levels remained 7.3% below the same period in 2019 when the company completed 3,371 homes.
Sales trends have remained positive into the second half, Vistry added.
To date, forward sales total GBP3 billion, slightly above the GBP2.7 billion noted in September 2020.
Meanwhile, the company said it has secured 96% of total housebuilding units and partnership mixed tenure units forecast for 2021.
So far, any concerns regarding increased costs have been offset by house price inflation, the company added.
"Housebuilding delivered a significant improvement in margin in [the first half] and we expect this to continue, whilst Vistry Partnerships is firmly on track to deliver more than GBP1 billion of revenue in [2022] and a margin in excess of 10%, driven by the accelerated growth of its higher margin mixed tenure revenues," said Chief Executive Greg Fitzgerald.
Vistry's half-year earnings came as Halifax reported that, while momentum continues to slow, UK house prices still notched another record high in August.
The average UK house price rose 0.7% monthly in August to GBP262,954. The annual growth was 7.1%, slowing from 7.6% in July.
Growth still topped market expectations, however. According to consensus cited by FXStreet, UK house prices were expected to register monthly growth of 0.4% in August, and an annual rise of 5.5%.
By Scarlett Butler; [email protected]
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