Vistry Group Warns of Cooling U.K. Housing Market Despite Posting H1 Profit Beat
2022.09.08 08:20
By Scott Kanowsky
Investing.com — U.K. homebuilder Vistry Group PLC (LON:VTYV) has reported a better-than-expected rise in first-half income, but warned of “early signs” that Britain’s housing market may be beginning to slow.
Total adjusted pre-tax profit grew to £189.9 million, a jump of 14.3% compared to the same six-month period last year and ahead of company-provided estimates. Strength at the firm’s partnerships unit – in which it works with housing associations to construct affordable homes – helped drive the uptick, with the division’s higher margin mixed tenure revenues increasing by 33.7%.
Shares in Vistry traded in the green on Thursday.
But the group, which will become the U.K.’s third-biggest homebuilder once a merger with rival Countryside (LON:CSPC) is completed, flagged that demand in the country’s land market is “settling” after a period of heightened demand.
Concerns around a cooling in Britain’s housing sector have begun to mount in recent months, with surveyors reporting lower new-buyer inquiries. Analysts at HSBC have also predicted a “significant fall” in demand and prices for housing from the fourth quarter into 2023, citing a deteriorating macroeconomic outlook and a recent rise in mortgage rates to their highest level in six years.
Vistry chief executive officer Greg Fitzgerald said: “Whilst mindful of the impact of wider economic uncertainties including rising energy costs, we continue to expect to see a significant step-up in profitability in both Housebuilding and Partnerships in FY 22, with adjusted Group profit before tax to be in-line with our previously upgraded expectations.”
