Vistry prepares £130m buyback as housebuilder profits rise

Vistry Group has announced an additional £130m share buyback programme after profits rose in the first half of the year and the group built more homes.

The FTSE 250 housebuilder, formerly Bovis Homes Group, plans to begin the buyback this month and complete it before its annual general meeting in May 2025.

The company has already announced or repaid £285m in distributions to shareholders as part of targets announced 12 months ago to provide them with £1bn over three years.

Vistry also announced plans at the time to merge its housing and partnerships divisions, in a bid to address the shortage of affordable mixed-tenure housing in the UK.

The Kent-based company completed construction of 7,792 homes in the first six months of 2024, a 9 per cent increase on the same period last year.

The company attributed the result to “good demand” at its partner company, which works with local authorities and housing associations to build new homes.

The properties in Vistry sold for an average of £273,000, while the partner-financed properties sold for an average of £241,000, an increase of £27,000 on last year.

By comparison, the average selling price of houses on the open market fell by £13,000 to £376,000 due to high interest rates and economic uncertainty.

Despite this, the company’s adjusted revenue rose 11.1 percent to almost £2 billion and pre-tax profit rose 7 percent to £186.2 million.

Given continued strong demand during the traditionally quieter summer months, Vistry expects to deliver more than 18,000 homes in 2024, compared to 16,118 in 2023, with annual profits to exceed last year’s levels.

Greg Fitzgerald, CEO of Vistry, said: ‘The group delivered a strong half year result, with Vistry’s partnership model significantly outperforming the traditional housebuilding market.

‘The group’s growth strategy and drive for more affordable housing align well with the new government’s ambitions to tackle the country’s housing crisis.’

During the general election campaign, the Labour Party pledged to build 1.5 million new homes over five years. This would be done partly by building on poorer quality land, known as ‘grey belt’, and by appointing more planning officers.

According to recent figures from the Office for National Statistics, just 183,610 new homes were completed in the UK in the 12 months to March.

Aarin Chiekrie, analyst at Hargreaves Lansdown, said: ‘In a housing market like this, Vistry looks set to weather the challenges of 2024 better than many of its peers.

‘But if the pressure on mortgage affordability eases and the housing market picks up again, there is a good chance that other names in the sector will see more wind in their sails.’

Vistry Group shares rose 5.1 percent to £13.85 late on Thursday morning, making them among the biggest gainers in the FTSE 250 index.