Vistry prepares £130m buyback as housebuilder profits rise

Vistry Group has unveiled a further £130m share buyback after profits rose in the first half and the group built more homes.

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

It has already returned or announced £285m in distributions to shareholders as part of targets stated 12 months ago to deliver £1bn to them over three years.

At the time, Vistry also revealed plans to combine its housebuilding and partnership divisions to try to address the UK’s shortage of affordable and mixed-tenure housing.

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

It attributed the result to “good demand” for its partnership business, which works with local authorities and housing associations to deliver new homes.

Vistry properties sold for an average of £273,000, and partner-financed homes sold for an average of £241,000, up £27,000 on last year.

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

However, the company’s adjusted revenue closed 11.1 per cent higher at almost £2 billion and its pre-tax profit rose 7 per cent to £186.2 million.

Following continued strong demand during the traditionally quieter summer months, Vistry believes it will complete more than 18,000 homes in 2024, compared with 16,118 in 2023, with annual gains exceeding last year’s levels.

Greg Fitzgerald, Vistry’s chief executive, said: ‘The group has delivered a strong half-year performance with Vistry’s partnership model significantly outperforming the traditional housebuilding market.

‘The group’s growth strategy and increased supply of affordable housing are well aligned with the new Government’s ambitions to address the country’s housing crisis.’

During the general election campaign, Labour promised to build 1.5 million new properties over five years, partly by developing on lower-quality “grey belt” land and recruiting more planning officers.

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

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘In such an uncertain property market, Vistry looks set to meet the challenges of 2024 better than many of its peers.

“But when mortgage pressures ease and the housing market recovers, other names in the sector are likely to gain momentum.”

Vistry Group Shares rose 5.1 per cent to 13.85 pounds by late Thursday morning, making them one of the biggest gainers in the FTSE 250 index.