Posted By Global Banking and Finance Review
Posted on January 15, 2025
By Aby Jose Koilparambil
(Reuters) -Vistry, Britain's largest homebuilder by output, said on Wednesday market conditions remain uncertain this year as the housing sector grapples with affordability and broader economic woes, while maintaining its 2024 earnings forecast.
The FTSE 100 builder, which generates most of its sales through partnerships with local authorities, housing associations and government providers, said the outcome of a government spending review and the transition to a new affordable programme would be crucial in driving the market.
Vistry, which has issued three profit warnings since last October, reaffirmed its forecast for 2024 adjusted pre-tax profit at about 250 million pounds ($305.1 million).
The Kent, England-based company, which issues full-year results on March 26, said it built 17,200 homes in 2024, up 7%, and expects annual revenue of around 4.4 billion pounds, ahead of market expectations of 4.05 billion pounds.
The pace of recovery in the British housing sector is under scrutiny as a slower-than-expected reduction in interest rates hampers affordability, while tax hikes, an impending rise in labour costs and fears the UK government could reduce spending have dampened the economic outlook.
However, the unexpected fall in UK inflation data last month and sharp declines in core measures of price growth tracked by the Bank of England soothed some nerves in the financial markets, reassuring investors that the central bank can continue with its gradual easing cycle.
Vistry shares were up 5.4% at 542.50 pence by 0830 GMT on Wednesday, as housebuilders benefited broadly from the inflation data.
Peel Hunt analysts slashed their profit view for 2025 and 2026 by about 15%, saying that the volume growth forecast could be limited this year and modest in the next.
The company said its year-end net debt position stood at 180 million pounds, 20 million pounds lower than its forecast, but more than doubled compared with the prior year, reflecting higher-than-expected finished stock and work in progress.
On Tuesday, Vistry's FTSE 100 peer Persimmon forecast its 2024 earnings at around the upper end of market view, buoyed by improved sales and pricing strength.
($1 = 0.8212 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips and Jan Harvey)
