Vistry’s stock price was upgraded this morning by Peel Hunt following the publication of its annual results, despite the housebuilder’s chief describing 2024 as a “challenging year”
The FTSE 250 firm managed to meet the weak forecasts expected by the markets in its annual results, with profit before tax falling 35 per cent to £264m due to Southern division cost issues.
Cost overruns in the firm’s South Division proved a major challenge last year, causing multiple profit warnings and costing the group around £105m.
“We have concluded a rigorous set of reviews and year end procedures with no further issues being identified, and much work has been done to ensure the group has the right people, structure, systems and controls in place to move forward with confidence,” said Vistry CEO Greg Fitzgerald.
Meanwhile, completions by the firm rose seven per cent in 2024 to 17,225, while revenue also jumped seven per cent to £4.3bn.
The firm’s order book slipped slightly from £4.6bn to £4.4bn, due to a quieter private sales market and funding issues on the partner-funded side.
Looking ahead, Vistry said it was focused on cutting its debt, targeting a £200m reduction in working capital throughout this year, as well as possibly making bulk sales of private units.
“The recent £2bn funding injection for affordable homes from the government is key for 2025/26 and boosts the group’s confidence for these years,” noted Peel Hunt analysts Clyde Lewis and Sam Cullen.
Vistry, which was already rated a ‘Buy’ by Peel Hunt,was upgraded from 630p to 715p following the results. It currently trades at 644p.
The housebuilder’s share price has rallied 12 per cent since the start of the year, after dropping 38 per cent in 2024.
Peel Hunt’s analysts noted that Vistry’s post-tax return on equity for next year is over 11 per cent, compared to a sector average of around eight per cent.