British housebuilder Vistry on Thursday said it would build more homes this year, encouraged by resilient demand for its affordable homes from the private rented sector, after posting 2023 profit ahead of market expectations.
Britain's house building market has seen some signs of stability, partly driven by an easing in borrowing costs at the start of this year, after high inflation and rising interest rates crimped demand in 2023.
But a delay in the Bank of England's cutting rates has tempered hopes of a robust recovery in the property sector.
Shares in the FTSE midcap company were trading about 1.0 per cent higher as at 0847 GMT.
The developer said it would start a further share buyback worth 100 million pounds in April.
Vistry said it was aiming to build more than 17,500 homes in 2024, compared with 16,118 built a year ago.
Vistry said it has now built more homes on an annual fiscal basis than any other housebuilder in the UK.
CEO Greg Fitzgerald told Reuters the company would aim to build around 23,000-24,000 units per annum in the medium term, and the group expects only 30-35 per cent of its revenue this year to come from the open (real estate) market.
The CEO said the bigger share of the sales would flow in from its business partnering with local authorities, housing associations and government providers.
Vistry shifted its focus last year to fully building affordable homes after strengthening this business with the acquisition of Countryside in 2022.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said the strategy shift is likely to put Vistry in a better position than its peers to weather housing market challenges.
Vistry posted 2023 adjusted pre-tax profit of 419.1 million pounds, beating LSEG average analysts' estimates of 405.9 million pounds.
In contrast, rival Persimmon this week warned of subdued market conditions this year, after reporting a bigger-than-expected 52 per cent slump in annual profit. (US$1 = 0.7815 pounds)