Housebuilder maintains raised profit expectations and says build cost inflation being outpaced by growing house prices

Housebuilder Vistry said it is on track to deliver profits against significantly raised expectations for the year, despite warning over a growing threat from materials shortages.

In a half year trading update the housebuilder, formed from the merger of Bovis Homes with the housing businesses of Galliford Try at the start of last year, said it had built 3,126 homes in its housebuilding business and 895 in its partnerships operation in the six months to June 30.

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Vistry said timber supplies were being affected by the shortages

The firm said its private sales rate had increase to 0.76 homes per site per week, not only above the covid-hit 0.45 figure recorded in the same period in 2020, but also above the 0.69 seen in 2019.

Vistry said the results displayed a first half performance 鈥渟ignificantly ahead of expectations at the start of the year鈥�.

But, amid growing industry concern over the supply of construction materials, particularly timber, the firm warned it was seeing 鈥減ressure on the materials supply chain resulting in extended lead times and inflationary pressures on certain products鈥�.

It said it was managing the challenges and had 鈥渇ull visibility鈥� on its material requirements out to the end of the financial year, with 鈥渁n agreed supply programme in place鈥�.

While the business did not say what impact the shortages were having on the cost of prices, it said the benefit from sales price increases was 鈥渕ore than offsetting any cost inflation for the group鈥�.

Earlier this year , while mortgage lender the Halifax this morning reported that prices had risen 8.8% in the last 12 months.

Chief executive Greg Fitzgerald said: 鈥淭here is some pressure across the material supply chain in terms of price increases and extended lead times, but we are working well with our partners to ensure successful delivery of our build programme and expect this position to ease through the second half. House price inflation is more than offsetting any cost pressure.鈥�

In May , up from the previous analyst consensus of 拢310m. Today it said it was confident it will deliver consensus market expectations for FY21 and maintains its expectations for FY22.