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(Alliance News) - British housebuilding company Vistry Group PLC on Tuesday swung to a loss for the first half of 2020, but said that it has made a strong start to the second half supported by positive market trends, firm pricing, and a record forward sales position.
The West Malling, Kent-based company also said that adjusted pretax profit for 2020 is expected to be between GBP130 million and GBP140 million, down by at least 31% on GBP188.2 million posted a year ago.
Assuming stable pricing and current sales rates and productivity levels, the company, formerly known as Bovis Homes, expects to deliver at least GBP310 million in adjusted pretax profit for 2021.
Vistry is aiming to resume dividends with respect to 2021 with a progressive dividend policy thereafter, it said.
For the six months to June 30, the company suffered a pretax loss of GBP12.2 million compared with pretax profit of GBP72.5 million. On a adjusted basis, pretax profit slumped 86% to GBP10.3 million.
The first half loss was attributed to non-productive site overhead costs, expenses incurred relating to the closing and reopening of construction sites as a result of lockdown, and implementation of Covid-19 safe working procedures and health and safety precautions.
The company also booked exceptional costs in regards to the completed acquisition of the Linden Homes and Partnerships & Regeneration businesses from Galliford Try PLC.
First half group revenue surged 28% to GBP606.4 million from GBP472.3 million, as total completions rose 5% to 1,724 units.
Chief Executive Greg Fitzgerald said : "Housebuilding's first half performance was significantly impacted by the lockdown and resultant site closures. Vistry Partnerships demonstrated its market resilience and robust revenue model and led the group to an early successful return to site, with production levels across the group now back at near normal levels.
"We have seen positive sales trends since early May, with consumer interest higher than at any time in recent years. Our sales rate in the second half to date is running 20% ahead of last year at 0.73, and pricing remains robust."
The company's forward sales totalled GBP2.7 billion at June 30, up from GBP2.6 billion a year ago, including Housebuilding forward sales up 17% to GBP1.48 billion.
Shares in Vistry were down 4.5% at 606.86 pence each in London on Tuesday morning. Year-to-date the stock is down more than 50%.
By Tapan Panchal; tapanpanchal@alliancenews.com
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