Vistry looks to ‘transformative’ government investment as profit drops
Housebuilder Vistry has reported a sharp drop in profit but expects activity to pick up later in the year as the government’s affordable homes investment filters into the market.
Vistry, which unseated Barratt as the UK’s biggest housebuilder last September, told markets that it expects adjusted operating profit to be £125m in the first half of the year, down 25 per cent from £161.8m last year.
It completed 6,800 homes during the first half of the year, down from 7,792 last year.
However, the housebuilder expects to deliver a year-on-year increase in profit, with affordable homes funding “expected to underpin a step-up in volumes” in the second half of the year.
The government announced £39bn of funding for the UK’s Affordable Homes Programme in its June spending review.
Housebuilders like Vistry have largely welcomed the investment, although some have warned it still doesn’t go far enough towards fixing the UK’s housing market.
Vistry said it was “uniquely aligned” with the government’s housing ambitions.
“We expect to play a major role in the delivery of the new Affordable Housing Programme… [it] will enhance our delivery capability and flexibility,” the FTSE250 company said.
Property analyst Oli Creasey at Quilter Cheviot agreed: “The newly announced Affordable Homes Programme and other policy initiatives are expected to stimulate demand in the second half of 2025 and beyond… Vistry’s partnership model positions the business well to benefit from this anticipated uplift.”
Details of the 2026-2036 programme will be available in August, and early allocations will be made in the first half of 2026.
However, £2bn of ‘top-up’ funding – still part of the £39bn investment – will be made available by the existing 2021-2026 programme in the second half of this year.
Vistry said that its net debt was “significantly better than expectations” at £295m. Its debt has fallen from £322.0m last June, despite a £92m higher opening balance at the start of the year.
During the half, Vistry secured 3,113 plots of land across 14 developments, down from 8,225 plots across 14 developments last year. The housebuilder has targeted a reduction in its landbank as part of its capital strategy.