Vistry says lockdown performance better than expected

(Sharecast News) - Housebuilder Vistry said on Wednesday that its performance during lockdown has been better than initially expected in terms of reservations, completions and cash management.
Over the past eight weeks, the company has taken 447 gross private reservations, resulting in 300 reservations net of cancellations. In addition, the sales rate has improved, with a rate of 0.26 over the past three weeks.

Vistry said it has exchanged on 310 homes and legally completed a total of 257 private sales in the eight-week period, with pricing broadly in-line with its forecasts.

"In addition, levels of website traffic and prospects have been strong, and in recent weeks have returned to the levels we saw in January and February, indicating continued strong demand," it said.

The company said its Partnerships division, which is now back to more than 70% of normal production capacity, is the most resilient part of its business in the current market conditions given the high proportion of revenue from contracting and pre-sold developments, which provides high levels of cash realisation.

Chief executive Greg Fitzgerald said: "The continued strength of Vistry Partnerships throughout the past two months has proven our rationale for the acquisition, which has given us a highly resilient business underpinned by significant demand for affordable homes."

At 0920 BST, the shares were down 2% at 744.50p.

William Ryder, equity analyst at Hargreaves Lansdown, said: "Work's now well underway again at Vistry's sites, but 70% efficiency still leaves a lot to be desired. We expect efficiency will improve, but social distancing measures are likely to prevent the group getting back to full operational capacity for some time. We suspect this will be a pattern across large swathes of the economy, which will be held back from firing on all cylinders by the need to keep everyone safe.

"Vistry's focussing on getting its Partnerships business back up and running first as the cash flows are more predictable there than at the housebuilding sites. The steady trickle of optimistic news on house prices from the sector has continued, although given the very low sales numbers it's still too early to say what will happen over the next six months as lockdowns ease."