By Aby Jose Koilparambil
(Reuters) -British housebuilder Vistry expects half-year profit to increase by about 7%, buoyed by resilient demand for its affordable homes from housing associations and the rental segment, it said on Tuesday.
Though delays to interest rate cuts have tempered hopes of a speedy recovery for the British housing market, the sector will be encouraged by the new Labour government’s pledge to overhaul planning rules as part of efforts to build 1.5 million new homes over the next five years.
“We look forward to working closely with the new government and are supportive of their plans to introduce mandatory housing targets, reform the national planning policy framework, add new planning officers and prioritise brownfield and ‘grey belt’ land,” the company said in a trading statement.
Shares in the FTSE 100 housebuilder reversed course to trade 1.6% lower at 1,272 pence as of 1328 GMT.
Investec analyst Aynsley Lammin said there are some concerns around average net debt being higher than expected in an otherwise solid update from the homebuilder.
Vistry said that the group net debt position was 323 million pounds ($413.80 million) at June 30, compared with 329 million pounds a year earlier.
Stephen Teagle, chief executive of Partnerships and Regeneration at Vistry told Reuters that the group is investing now for sales in the second-half period, and expects to have a decline in debt over the course of the next two to three years.
Britain’s finance minister Rachel Reeves on Monday pledged to tackle the chronic shortage of new homes, adding weight to previous comments by Vistry CEO Greg Fitzgerald.
In March, Fitzgerald said that the group expects to be able to build more homes under a Labour government.
Vistry on Tuesday forecast adjusted pretax profit of about 186 million pounds for the six months to June 30, and reiterated its 2024 target to build more than 18,000 homes with profit coming in above last year.
($1 = 0.7810 pounds)
(Reporting by Aby Jose Koilparambil in BengaluruEditing by Rashmi Aich, David Goodman and David Evans)
