Vistry has become the latest housebuilder to reveal plummeting profits in the wake of the pandemic.
Its pre-tax profit fell 44% to £98.7m for the year ended 31 December 2020. It reported an adjusted profit before tax of £143.9m, down 23.5%, but said this will more than double next year to exceed £310m.
The housebuilder said a surge in the second half had seen adjusted profits ahead of the expected range. The drop compares with Taylor Wimpey’s 68.4% pre-tax profit drop in profits and Inland Homes falling 85.2% in the same period.
Completions more than doubled, rising to 8,954, boosted by rises in the partnership’s business. However, housebuilding saw a 32% drop to 4,652 homes. Chief executive Greg Fitzgerald said the group has capacity to deliver 14,000 completions next year, which would represent a 35% uplift.
Vistry reported total revenue of £2bn, 79.1% higher than the previous year. Housebuilding made up £1.3bn of this, down 27.9%, with the balance contributed from its partnerships business following the acquisition of Linden Homes and Galliford Try Partnerships from Galliford Try.
While the first full year from the new affordable housing and regeneration division saw revenue lifted, it also squeezed the housebuilder’s margin. Vistry’s adjusted operating margin dived to 8.4% against 17.1% a year earlier.
Vistry said it will invest around £100m to support growth plans for its partnerships business, where it is targeting £1bn in revenue with an operating margin of 10% by 2022, up from just 6.7% in 2020.
Fitzgerald said: “2021 has started well with strong demand across all areas. We have seen no impact from the national lockdown or changes to the Help to Buy scheme and the expected end to the stamp duty exemption.
“We have a strong forward sales position, with 64% of forecast units for 2021 already secured. Assuming stable market conditions, the group is confident it will more than double profits in the year, with a profit before tax of at least £310m.”
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