The spotlight turns to three prominent UK housebuilders next week when Persimmon, Vistry, and Berkeley publish their results.
House prices wobbled throughout 2023 and while they recovered in the new year, high interest and mortgage rates mean house sales have continued to lagged.
All three are also facing a competition watchdog probe into suspected anti-competitive behaviour.
12 March: Persimmon
Persimmon PLC (LSE:PSN) has guided to full-year sales falling 16% year on year, citing persistently high-interest rates and the removal of the Help-to-Buy scheme.
“These lower volumes, coupled with build-cost inflation, mean operating profit margins are set to roughly halve, to around 14%,” cautioned Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
In January, Persimmon disclosed that completions were 33% lower in 2023 compared to 2022.
14 March: Vistry
Vistry Group PLC (LSE:VTY) is expected to report full-year underlying revenue of around £4 billion, down from £4.5 billion in the prior year.
The housebuilder said in January that profit before tax should be in line with the prior year, in which it generated £418.4 million.
This was an upgrade to prior guidance suggesting a flat £410 million PBT.
"Investors hoping to hear more details on how the group’s transition away from traditional housebuilding to a partnerships-focused model has gone,” said Chiekrie.
“This new strategy means that the group’s partners foot most of the bill, which reduces Vistry’s risk and frees up cash to deploy elsewhere in the business.
“But it comes at a cost – the margins on this kind of work aren’t as juicy, and markets are expecting operating profits to fall around three percentage points, to 11.6%, as a result.”
15 March: Berkeley
“Berkeley’s London focus and higher-end product means it offers something different to the other large housebuilders,” said Chiekrie.
Berkeley’s investors “expect to hear that demand in the key London area has held up better than in most other parts of the country, thanks to both its domestic and international appeal”.
Berkeley Group Holdings PLC (LSE:BKG) is expected to post around £544 million in pre-tax profits for the year.
Last December, the group said it was on track to meet guidance for 2024 and 2025 despite softening market conditions.
But the housebuilder conceded that trading conditions and the operating environment remain “volatile and unsupportive of investment”, and it will focus on its existing sites instead of new investment.