Vistry Group PLC and Countryside Properties PLC’s partnerships business set to

Profits for housebuilders’ partnerships business, which team up with local authorities and housing associations, are forecast by Barclays to outstrip those of the wider sector.

The bank upgraded its recommendation for () to ‘overweight’ from ‘equal weight’ after upping its share price target 23%, with a 15% target hike for PLC (LONLCSP), which was kept on its ‘overweight’ rating.

“Countryside and Vistry are leading players in Partnerships – a growth area within the UK housing market with increasing government support for development of all types of tenure,” Barclays said in its note.

Tracking weekly sales rates across each company has shown robust trading in both Partnerships and Housebuilding divisions.

This had led to the upgraded price targets of both companies, based on the strong fundamentals and new sum-of-the-parts valuations.

“Overall, we forecast profit growth in the Partnerships divisions to outstrip that of the wider sector, while the relatively low capital requirements and improving margins drive high [return on capital employed],” analysts said in the note on Friday, while also noting that the housebuilding divisions also continue to trade well, “with a solid outlook for growth”.

Countryside is in the process of splitting off its partnerships business into a separate company.