Vistry Group PLC (LSE:VTY) issued an upbeat outlook on the current year after trading in the first half beat its expectations.
Adjusted pre-tax profit for the year is forecast to come in at the top end of market expectations, the housebuilder said in a trading statement.
"The group has delivered an excellent first-half performance, significantly exceeding our expectations at the start of the year. Demand has been strong across all areas of the business and our forward sales positions further strengthened,” said chief executive Greg Fitzgerald.
"Whilst mindful of the wider economic uncertainties, we are positive on the outlook for the group and expect to see significant margin progression in the full year, with adjusted profit before tax for FY22 to be at the top end of market forecasts."
The full-year adjusted gross margin is now expected to be ahead of the company’s 23% target.
Housebuilding completions increased to 3,219 units in the first six months to 30 June 2022 from 3,126 in the same period last year.
Vistry reported “good demand” across all areas of its business, with the average weekly private sales rate rising 11% to 0.84.
The strong demand was accompanied by price increases of 5%-8% on the group’s private units and price rises more than offset cost increases in the first half, it said.
It added that rising energy costs and increasing wages are putting upward pressure on the cost of materials and forecast build cost inflation of 6% for the full year.
Total Housebuilding and Partnerships saw a 16% increase in mixed tenure forward sales to £2.14bn, with 92% of total forecast units for the full year now secured.
“Growing need for housing across all tenures from local authorities, housing associations, the private rented sector and elderly accommodation providers is driving very high demand in our Partnerships business,” Vistry noted.
The Housebuilding division secured 3,360 plots in the first half (2021: 4,143), while Partnerships secured 2,166 plots (2021: 1,499).
The group’s net cash position increased to £115mln as at end-June 2022 from £31.6mln a year earlier, reflecting the strength of the first-half performance.