Vistry chief executive Greg Fitzgerald said that the combination of local authorities unable to expedite planning applications efficiently and growing environmental challenges were preventing the company put up as many houses as it could.
The target set out in the 2019 Conservative manifesto is for 300,000 homes a year by the mid-2020s in England. The industry has yet to deliver more than 250,00 in any year and in 2020/21 it was just 216,490, although the covid pandemic had a lot to do with that.
In the first half of 2022 Vistry completed 3,219 housing units, a 3% increase on the 3,126 completed in the first half of 2021.
“Planning remains the single most significant constraint on the business, from continuing capacity issues within local planning authorities, to the increasingly challenging political and regulatory environment around issues such as nutrient neutrality,” Fitzgerald said.
“We are responding proactively by factoring longer lead times into our site forecasting, which enhances our control, and increasing our senior expertise in these areas.”
Despite this and other headwinds, such as build inflation, Vistry appears to be in great shape. It issued a positive trading statement today declaring that business was well ahead of expectations.
Greg Fitzgerald said: ““The group has delivered an excellent first half performance, significantly exceeding our expectations at the start of the year. Demand has been strong across all areas of the business and our forward sales positions further strengthened.
“The business is in great shape and well positioned to maximise the broader market opportunities. With leading capability across all housing tenures and being one of the largest private sector providers of affordable housing, the group is uniquely positioned within the housebuilding sector, and we continue to drive the benefits from our Housebuilding and Partnerships combination.
“Whilst mindful of the wider economic uncertainties, we are positive on the outlook for the group and expect to see significant margin progression in the full year, with adjusted profit before tax for FY22 to be at the top end of market forecasts.”
That last sentence implies a pre-tax profit for the year heading towards £420m.
Despite build cost inflation running at 6% this year for Vistry, Fitzgerald said “our focused commercial controls and strong client relationships have enabled us to effectively manage input-cost pressures in respect of our pre sold volume”.
Clearly shortages are now last year’s story: “Our sites are operating well, with good labour availability, and are benefitting from improvements in the supply of materials, reflecting increased stock levels for most products and the strong partnerships we have developed across our supply chain.”
And the balance sheet has been considerably strengthened, with the year on year group net cash position increasing to £115m, up from £31.6m a year ago, and average net debt for the past 12 months at £73m, compared to £239m a year ago.