A clutch of the UK’s top housebuilders step up next week in a big week for UK PLC generally.
Vistry, Taylor Wimpey and Persimmon all release updates and with housebuilding one of the key planks of this government’s industrial strategy, how they viewed the Budget will be worth noting.
Comments from the building sector thus far have welcomed the plan to build 1.5 million new homes over the next five years and to relax planning laws.
Detail on execution however has been thin, particularly how the listed builders will be involved, so any comments on here will be keenly watched.
Vistry in the doghouse
Vistry Group PLC (LSE:VTY) is in the doghouse after a profit warning due to self-inflicted injuries and the market will want reassurance that it has got a handle on the cost overruns and that indeed they were a one-off, one-region issue.
Costs were said to have been understated by £115 million across nine developments within its southern division, with Vistry noting this would deal an £80 million blow to profit this year, before £30 million in 2025 and £5 million in 2026.
UBS, a seller, said the risks are if further cost issues are identified, or additional funding is needed.
“In that respect, we think ensuring confidence in the balance sheet strength is critical and investors may have been surprised that the £1bn shareholder return programme was reiterated by the company.
“The upside risk is the issues are truly one-off and Vistry can return to executing its growth and profit ambition (£800m EBIT by 2028).”
Persimmon and Taylor Wimpey eyeing recovery
At its half-year announcement in August, Persimmon PLC (LSE:PSN) said that consumer confidence had improved with a strong pick up in enquiries and visitor levels since the general election in early July.
Adjusted profit before tax of £149 million for the first half of the year was down 5% a year ago, which was 13% better than the consensus estimate of just under £132 million.
Jefferies is pencilling full-year profits of £382 million, some way above consensus.
Taylor Wimpey PLC (LSE:TW.) saw half year UK completions excluding joint ventures at 4,512, down 7% on a year ago, with average selling prices of £317,000.
This led to group sales of £1.5 billion, in line with City analysts forecasts.
Profit before tax and exceptional items of £188 million was up 21%, well above consensus forecasts.
Management guided to full-year volumes towards the upper end of the previous guidance range of 9,500-10,000 home completions, expects to meet current consensus for operating profit of £416 million and have net cash of around £550 million at year-end.
Jefferies' estimate is for full-year profits of £432 million.