Vistry launches buyback as revenue boosted by affordable housing push

Vistry’s transition to an affordable housing provider has started to yield results for the housebuilder, according to its 2023 results, published this morning.

Last October, the London-listed firm stated it would focus solely on building affordable homes via its Partnerships business, which partners with local authorities and other social housing providers after a volatile housing market eroded demand for building in the private sector.  

This morning, the firm said revenue rose by 29 per cent to £4bn, while operating profit increased 8.2 per cent to £487m. 

It delivered a total of 16,118 new homes in 2023, down only 5.4 per cent on the prior year. 

The group said it would look to deliver as many as 17,500 new homes in 2024, up from 16,118 properties in 2023.

The company announced a new £100m share buyback following a £55m buyback programme launched in September. The share buybacks were “in lieu” of dividends.

Greg Fitzgerald, chief executive of Vistry said: “As a leading Partnerships business, the group is committed to creating quality new homes through the development of sustainable new communities and places people love.  

“We see high demand for mixed tenure housing and regeneration across the country and are uniquely placed to deliver on this market opportunity, helping address the country’s acute need for housing.”

He added: “It has been another busy year at Vistry and I am extremely grateful to all Vistry’s employees, the group’s suppliers, and our highly valued Partners for their hard work and commitment.”

“The business has started the year with a real passion and commitment to deliver on its strategy and medium-term financial targets, and we expect to make good progress during 2024.”

Yanmei Tang, analyst at Third Bridge, said:  “The UK housing market is gaining momentum again, thanks to lower interest rates. Our experts say that private developers may exploit this to increase profits.” 

“Nonetheless, the drop in interest rates could also drive demand for Vistry’s homes on the open market. Additionally, there could be a rise in demand for rental properties (PRS) as investor returns become more enticing.”

She added: “Partnerships tend to target complex brownfield sites, while private developers favour simpler greenfield land. Brownfield sites often come with contamination and remediation challenges, leading to delays. However, Vistry seems well-equipped to handle these risks.”