Morning Note: Market news and an update from housebuilder Vistry.

Market News

Geopolitical risk remains elevated after Israel’s strike in Qatar and Poland scrambled military jets to engage Russian strike drones that violated its airspace.

Donald Trump told European officials he’s willing to impose new tariffs on India and China to pressure Vladimir Putin — but only if the EU joins him, people familiar said. The FT reported he urged the bloc to impose levies of up to 100%. The Supreme Court will review Trump’s tariffs on a fast-track schedule, with arguments taking place in early November. A judge temporarily blocked Trump from firing Lisa Cook over alleged mortgage fraud, allowing her to likely attend the Federal Reserve meeting next week.

Sebastien Lecornu will become France’s fifth PM in two years, taking on the daunting task of trying to push through unpopular budget reforms. Grassroots protests scheduled for today may affect schools, regional trains, and flights.

US job growth was far less robust in the year through March than previously reported, adding to mounting pressure on the Fed to lower rates. The 911k overstatement (or 0.6%) was the largest on record, albeit as expected. Treasuries gave back some of their recent gains – the 10-year currently yields 4.09% – while gold trades at $3,645 an ounce. Brent Crude continued to recover from recent lows to trade at $67 a barrel.

US equities rose last night – S&P 500 (+0.3%); Nasdaq (+0.4%) – with Alphabet (Google) and Meta Platforms (Facebook) gaining, while Apple dipped on its product event. Oracle soared 30% after hours following an aggressive outlook for its cloud business. In Asia this morning, the yen strengthened on hawkish Bank of Japan headlines, and equities rose: Nikkei 225 (+0.9%); Hang Seng (+1.2%); Shanghai Composite (+0.2%). The FTSE 100 is currently 0.2% higher at 9,262, while Sterling trades at $1.3535 and €1.1560.

Source: Bloomberg

Company News

Vistry Group has today released results for the first half of 2025. Profitability declined during the period, although full-year guidance remains unchanged. In response, the shares have been marked down by 5% in early trading this morning.

Vistry is a UK-based housebuilder formed following the 2020 merger of Bovis Homes Group and Galliford Try. The company is the UK’s leading provider of affordable mixed tenure homes, operating across 26 regions, through three brands: Bovis Homes, Linden Homes, and Countryside Homes.

2024 was a very challenging year for the group resulting in a disappointing financial performance and three profit warnings. Issues relating to the forecasting of costs in the South Division were identified, while performance was also impacted by delays to concluding agreements with partners and other commercial transactions at the end of the year. After a rigorous set of reviews, no further issues were identified, and much work has been done to improve the group’s structure, systems, and controls.

During the first half of 2025, Housebuilding completions fell 12% to 6,889, driven by the expected lower level of partner demand (-14% to 5,055) reflecting uncertainty ahead of the June Spending Review. Open Market completions were down by 4% to 1,834 units due to softer market conditions in the second quarter.

Average selling prices increased by 4% to £283k, reflecting changes in mix to leave adjusted revenue down 6% to £1,853m. Overall, the availability of building materials remains strong, helping to ease inflationary pressures in the near term, and for the full year, the group continues to expect low single digit build cost inflation.

Adjusted operating profit fell by 23% to £124.4m, resulting in the margin falling from 8.2% to 6.7%. Return on capital employed declined from 12.8% to 9.6%.

Net debt fell by 9% to £293m, better than forecast, and the company still expects a year-on-year reduction at the end of 2025. During the period, the group successfully completed a refinancing, with £900m facilities extended to April 2028 on unchanged terms. At 30 June, the group had a total of 76,919 strategic land plots.

In September 2024, the group announced a total capital distribution of £130m comprising a £55m ordinary distribution and a £75m special distribution via share buyback, with £16m completed to date.

The forward order book totals £4.3bn, with 88% of forecast 2025 units secured. Of this 89% of the Partner Funded sales are forward sold, with more than 100% of the balance of Partner Funded units for the full year covered in the deal pipeline. The company is looking to drive an improved Open Market sales rate in H2 through sales and marketing initiatives, albeit demand will continue to be influenced by macroeconomic uncertainties.

Full year guidance remains unchanged, with the group still expecting to deliver a year-on-year increase in profits in 2025.

Source: Bloomberg