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Highlights
- Vistry boss Greg Fitzgerald called on the government to not pick on easy targets such as housebuilders to address the cladding crisis.
- UK’s Secretary of housing, levelling up, and communities had ordered housebuilding firms to contribute £4 billion to fix the cladding crisis.
The CEO of housebuilding firm Vistry, Greg Fitzgerald, called on the government to not pick on easy targets such as housebuilders in order to address the cladding crisis
Fitzgerald added that the government ought to consider the entire industry, which also includes cladding insulation, material suppliers.
This comes just days after Michael Gove, the UK’s Secretary of housing, levelling up and communities ordered housebuilding firms to contribute about £4 billion in order to fix unsafe buildings (which have a height in the range of 11 to 18 metres).
What is the cladding crisis?
The cladding process is when some materials are added to the outer layer of a building in order to help with insulation and other factors.
The cladding scandal occurred in 2017 when the Grenfell Tower fire caused over 70 deaths. This subsequently led to a call for removing cladding material due to safety reasons.
Let us look at 2 FTSE 250 index listed stocks in the housebuilding sector and see how they reacted to the news:
- Vistry Group PLC (LON: VTY)
Vistry Group is a UK based housebuilding company. The group released its trading update on Wednesday, for the year ended on 31 December 2021.
Its FY 2021 adjusted profit before tax (PBT) is expected to be consistent with earlier guidance at around £345 million. Its FY 2020 PBT was at £143.9 million.
Its FY 2021 housebuilding completions rose to 6,551 units from 4,652 units in FY 2020. Its gross margin is expected to be above 22 per cent, compared to 17.6 per cent in FY 2020.
Moreover, its net cash position as at 31 December 2021 was around £234 million compared to £38.0 million in the year before, highlighting the group’s higher profits and also robust working capital management.
It is set to release its FY 2021 results on 2 March.
© 2022 Kalkine Media®
Vistry’s shares were trading at GBX 1,102.00, down by 1.21 per cent on 13 January at 10:32 hrs BST. The FTSE 250 index was at 23,011.72, down by 0.18 per cent.
Vistry’s market cap stood at £2,480.86 million, and its one-year return was at 16.72 per cent as of date.
- Countryside Properties PLC (New) (LON: CSP)
Countryside Properties is a UK-based urban regeneration and housebuilding group.
Its FY 2021 completions rose by 33 per cent to 5,385 units, from 4,053 units in FY 2020. And its FY 2021 adjusted revenue rose sharply by 54 per cent to £1,526.2 million, from £988.8 million in FY 2020.
The group estimates its adjusted operating profit for the year to 30 September 2022 will be between £200 million and £210 million. This will be inclusive of its legacy housebuilding operation contribution amounting to about £40 million.
© 2022 Kalkine Media®
Countryside Properties’ shares were trading at GBX 305.60, lower by 25.79 per cent on 13 January at 10:36 hrs BST.
The group’s market cap stood at £2,108.39 million as of date.
