Vistry Group PLC expects margins to restore as market trends continue to improve
Vistry Partnerships’ mixed-tenure reservations are totalling £393mln and housebuilding reservations are currently £1.2bn
() has said its gross margin is expected to be restored in the second half of the year as market trends continue to improve after easing of the coronavirus pandemic lockdown restrictions.
The housebuilder said house prices have remained stable, while there is deflationary pressure in its supply chain and completions are returning to more normal levels.
READ: Vistry says sales rate improving as lockdown eases
During the crisis, the company has incurred additional costs and lower operating efficiency due to safety measures.
The FTSE 250-listed firm welcomed Wednesday’s statement by Chancellor of the Exchequer, Rishi Sunak raising the threshold for stamp duty to £500,000 until next March.
The group said Vistry Partnerships’ mixed-tenure reservations are totalling £393mln, for a forward order book of £920mln, while housebuilding reservations are currently sitting at £1.2bn.
In the six months to June 30, 2020, it noted that revenue in the Vistry Partnerships division slipped by 12% to £297mln due to the pandemic.
Housebuilding completions slumped 63% to 1,235, while revenue in the segment tanked 60% to £344mln.
“Vistry’s shares are down 44% year-to-date against a 23% decline for the sector,” analysts at Peel Hunt said.
“We suspect this weaker performance has been caused by worries over the balance sheet, but as today’s figures highlight, this position has improved ahead of expectations.”
Shares rose 2% to 726.13p on Thursday morning.
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