Vistry set to more than double profits this year but reveals cladding bill

Housebuilder Vistry has said it will more than double profits in 2021, but became the latest to reveal a further hit for cladding safety works in the wake of the Grenfell Tower tragedy.

The group is putting aside £20.9 million after uncovering another 10 buildings more than 59ft (18m) high where it acted as developer and remediation work on cladding may be needed.

This comes after it has already been working for the past three years with clients on a “small number” of tower blocks to ensure all cladding meets safety requirements.

Details of the impact came as full-year results showed pre-tax profits dropping 43.5% to £98.7 million after the spring lockdown affected its first half.

Underlying profits fell 23.5% to £143.9 million.

But it cheered a strong second-half performance and said profits will bounce back sharply in 2021, with at least £310 million expected on an underlying basis.

The group also resumed dividend payouts with a 20p final divi for 2020.

The results came after Chancellor Rishi Sunak further bolstered the property sector outlook in the Budget on Wednesday, extending the stamp duty holiday from March 31 until June and unveiling a mortgage guarantee scheme.

Shares in the group rose another 4% after the results, following gains on Wednesday amid wider gains in the sector on the Budget boost.

Vistry chief executive Greg Fitzgerald said: “2021 has started well with strong demand across all areas.

“We have seen no impact from the national lockdown or changes to the Help to Buy scheme and the expected end to the stamp duty exemption.

“We have a strong forward sales position, with 64% of forecast units for 2021 already secured.

“Assuming stable market conditions, the group is confident it will more than double profits in the year.”

Its bill for cladding comes after a raft of firms across the sector have recently announced similar charges.

Taylor Wimpey revealed on Tuesday it will pay out £125 million to fund cladding replacement and other fire safety work on all its developments built in the past 20 years.

Ministers set aside £3.5 billion in funding last month to help repair or replace cladding more than three years on from the Grenfell Tower fire, which killed 72 people.

But it is also proposing an industry levy to ramp up work to resolve the issue for hard-hit tower block tenants.

Vistry said it is “supportive” of the Government’s levy proposal.

The company was formed in January last year, after Bovis Homes merged with Linden Homes, which it had bought from Galliford Try alongside its Partnerships and Regeneration units for £1.1 billion.