Vistry to make £800m profit after subcontractor cost cuts

Vistry is hoping to generate £800m in operating profit and return £1bn to shareholders after asking subcontractors for a 10% discount on prices.

The house building giant asked its supply chain for cost reductions last October .

In a trading update this morning Vistry said it “will benefit from lower year on year building material costs in FY24 reflecting engagement with our supply chain throughout 2023.

“Our high level of visibility on forward sales and build programme enables us to work closely with our subcontractors to secure beneficial terms.”

It added: “We expect half year and full year profit to be ahead of last year and remain confident in achieving a 40% ROCE and £800m operating profit in the medium term. We remain committed to returning £1bn of capital to our shareholders over the next three years with our latest £100m share buyback programme commencing as planned in April, purchasing £18m of shares to date.”

Greg Fitzgerald, Chief Executive said: “The Group has had a good start to the year with our unique Partnerships model clearly demonstrating its market resilience.

“Working closely with our partners, we are seeing good demand in the Partner Funded market and accompanied by an improving trend for our open market sales, are on track to deliver more than 10% growth in completions in FY24, with half year and full year profit expected to be ahead of last year.

“This is underpinned by our strong forward sales position totalling £4.9bn, up 10% on the same position last year.  We remain confident in our differentiated strategy and are making good progress towards our medium-term targets.”

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