British housebuilder Vistry expects a 7% rise in half-year profit due to strong demand for affordable homes from housing associations and the rental market. Despite delays in interest rate cuts affecting the housing market's recovery, the sector is hopeful about the new Labour government's commitment to building 1.5 million homes over five years and reforming planning regulations. Vistry supports the government's plans and anticipates an adjusted pretax profit of 186 million GBP for the first half of 2024. The company aims to build over 18,000 homes by 2024 and reduce its net debt, which stood at 323 million GBP as of June 30.
British housebuilder Vistry anticipates a 7% increase in half-year profit, driven by strong demand for its affordable homes from housing associations and the rental market, the company announced on Tuesday. Despite delays in interest rate cuts that have dampened hopes for a swift recovery in the British housing market, the sector is optimistic about the new Labour government's promise to overhaul planning regulations to facilitate the construction of 1.5 million new homes over the next five years.
In a trading update, the company expressed its support for the new government's plans to introduce mandatory housing targets, reform the national planning policy framework, add new planning officers, and prioritise brownfield and 'grey belt' land. They look forward to working closely with the government on these initiatives.
Shares in the FTSE 100 housebuilder initially fell, trading 1.6% lower at 1,272 pence as of 1328 GMT. Investec analyst Aynsley Lammin noted some concerns about the average net debt being higher than expected in an otherwise positive update from the homebuilder.
Vistry reported that its group net debt stood at 323 million GBP as of June 30, compared to 329 million GBP a year earlier. Stephen Teagle, chief executive of Partnerships and Regeneration at Vistry, told Reuters that the company is currently investing for sales in the second half of the year and expects a reduction in debt over the next two to three years.
Last week, Britain's finance minister Rachel Reeves committed to addressing the chronic shortage of new homes, reinforcing earlier comments by Vistry CEO Greg Fitzgerald. In March, Fitzgerald expressed confidence that the group would be able to build more homes under a Labour government.
Vistry forecasted an adjusted pretax profit of approximately 186 million GBP for the six months ending June 30 and reiterated its 2024 goal to construct more than 18,000 homes, with profits exceeding last year's figures. The company remains focused on its strategy of providing affordable housing and is encouraged by the government's supportive stance on housing development and planning reforms.
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