British housebuilder Vistry announces plans to increase homebuilding efforts, driven by demand for affordable housing units in the private rental sector. Despite market stabilisation, tempered by Bank of England rate delays, Vistry aims to surpass previous homebuilding targets and initiate a GBP 100 million share buyback program. With a focus on affordable homes, Vistry's strategic shift strengthens its position in the housing market, paving the way for sustained growth and success.
In a recent announcement, British housebuilder Vistry announced that it would be increasing its homebuilding efforts this year, highlighting the steady demand for its affordable housing units from the private rental sector. This decision comes on the heels of the company surpassing profit expectations for the fiscal year 2023.
The housebuilding market in Britain has shown signs of stabilisation, partly attributed to a reduction in borrowing costs earlier this year. This improvement follows a period of subdued demand in 2023, marked by high inflation and escalating interest rates. However, the delay in the Bank of England's rate cut has tempered expectations for a robust property sector recovery.
Vistry aims to exceed its homebuilding targets for 2024, with plans to construct more than 17,500 homes compared to the 16,118 units built the previous year. Notably, the company now boasts the highest annual homebuilding rate among UK housebuilders.
Additionally, the company revealed plans to initiate a share buyback program worth GBP 100 million in April, further signalling its confidence in its future prospects.
CEO Greg Fitzgerald outlined the company's medium-term goal of constructing approximately 23,000-24,000 units per annum. Moreover, Vistry anticipates that only 30-35% of its revenue for the current year will come from the open real estate market, with the majority of sales expected to come from partnerships with local authorities, housing associations, and government providers.
The shift in Vistry's strategic focus towards building affordable homes was solidified last year with the acquisition of Countryside in 2022. This move has positioned the company favourably to navigate challenges within the housing market.
Vistry's robust performance for the fiscal year 2023 underscores its resilience and adaptability in the face of market fluctuations. The company reported an adjusted pre-tax profit of GBP 419.1 million, surpassing the average analysts' estimates of GBP 405.9 million.
In contrast, rival Persimmon issued a cautionary statement regarding subdued market conditions for the current year, following a larger-than-expected 52% decline in annual profit.
As Vistry continues to expand its homebuilding efforts and solidify its position in the affordable housing market, the company remains on track for sustained growth and success in the evolving property landscape.
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