January 15, 2020 / 8:02 AM / a month ago

Turnaround effort propels homebuilder Vistry forecast above market view

(Reuters) - Vistry Group (VTYV.L), formerly known as Bovis Homes Group, said on Wednesday it expects annual profit to be slightly above market expectations, as it sold more private and affordable homes and benefited from lower costs.

The company, as part of its turnaround plan, has raised cash by selling non-performing assets and increased use of part exchange deals to return to profitability. Such deals allow buyers to trade in their homes as part payment for a new property.

Vistry, which also sold homes at slightly higher prices on average, said it expects to post an improvement in operating margin in 2019.

“Whilst it is early in the year to comment on 2020 trading, we have a strong forward sales position and trading to date has been very positive, with consumer confidence returning,” the company said in a statement.

Larger rival Taylor Wimpey (TW.L) on Tuesday also said it saw positive signs in 2020 with a “bit of pent-up demand” as it reports a jump in its order book.

Vistry, which recently closed a deal to buy Galliford Try’s (GFRD.L) residential units, said it completed a total of 3,867 new homes in the year, up 3% from a year earlier.

Costs related to the acquisition is expected to total about 15 million pounds in the year ended 2019, it said.

Reporting by Indranil Sarkar and Yadarisa Shabong in Bengaluru; Editing by Anil D'Silva and Shailesh Kuber

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