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Vistry confident of enduring bounceback despite help-to-buy restrictions

The housebuilder expects adjusted pre-tax profits to double this year
Vistry confident of enduring bounceback despite help-to-buy restrictions
  • Dividends reinstated with a 20p a share final payment
  • The private sales rate has jumped higher over the last month

Vistry (VTY) has posted adjusted pre-tax profits ahead of guidance for 2020 and reported an acceleration in sales during the past four weeks. 

The housebuilder has forward sold 64 per cent of private and mixed tenure partnership units forecast for this year, as booming demand continued ahead of the stamp duty break deadline - which has since been extended to the end of June - and the restriction of the help-to-buy scheme. 

“We are not terribly concerned about either of those factors,” said group chief operating officer Graham Prothero. Of the sales made since the beginning of January, 87 per cent will be completed after the end of March, he said. 

The weekly private sales rate improved to 0.78  per active site over the past four weeks, compared with a rate of 0.64 during the first two months of last year. Ending the year with net cash of £38m - excluding lease liabilities - gave management further confidence to reinstate the dividend at 20p. Numis forecasts this year's dividend will rise to 45.52p. At a 7 per cent discount to forecast NAV at the end of December, there could still be value in the shares. Buy. 

Last IC view: Buy, 782p, 12 Nov 2020

VISTRY (VTY)    
ORD PRICE:943pMARKET VALUE:£ 2.10bn
TOUCH:943-944p12-MONTH HIGH:1,330pLOW: 504p
DIVIDEND YIELD:2.1%PE RATIO:27
NET ASSET VALUE:988p*NET DEBT:£4m
Year to 31 DecTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20161.0515590.145
20171.0311468.047.5
20181.0616810257
2019 (restated)1.1317494.661.5
20201.8198.734.820
% change+60-43-63-67
Ex-div:25 Mar   
Payment:21 May   
*Includes intangible assets of £691m, or 311p a share