I’ve just seen a list of the top-performing FTSE 100 shares over the past 12 months and two names completely blindsided me.
I knew the Rolls-Royce share price had smashed it, of course. It’s up 147% over one year. But the next two growth stars passed me by. Have I left it too late to buy them today?
Housebuilder Vistry Group (LSE: VTY) was the second-best blue-chip, rocketing 95.38%. A key reason it slipped my radar is that it was listed on the FTSE 250 until powering back into the FTSE 100 in June.
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Vistry Group’s back!
Recent years have been tough for housebuilders, as higher inflation drove labour and materials costs higher, while rising mortgage rates squeezed prices and demand. Most of the big housebuilders have completed fewer properties as a result, and the same goes for Vistry. It completed 16,118 homes last year, but that was only a modest 5.4% drop on 2022.
The board is “targeting in excess of 17,500 units” this year, and boasts a £4.6bn forward sales position of which £2.1bn is for 2024 delivery.
Vistry posted a full-year adjusted operating profit of £487.9m, up 8.2% on 2022. Operating margins narrowed though, from 14.5% to 12.1%.
Its 2022 net cash position of £118.2m turned negative last year, but today’s £88.8m net debt doesn’t worry me. The balance sheet looks strong. Vistry has a focus on affordable housing and regeneration. The sector’s expected to boom under Labour.
Inevitably, the shares are pricier than they were, trading at 15.28 times training earnings. The more promising outlook seems priced in. There are other rewards on the table though. The board recently competed to £55m share buyback, and is targeting £1bn of capital distribution to shareholders over the next three years.
Persimmon’s returned
The FTSE 100’s third-best-performer is another housebuilder Persimmon (LSE: PSN) also crashed into the FTSE 250 but bounced back in January this year. The Persimmon share price is up 72.62% in the last 12 months. Interestingly, it’s down almost 40% over three years, which shows how volatile it’s been.
I remember when the yield hit 20%, but that wasn’t sustainable. Today, it has a modest trailing yield of 3.55% but the fundamentals look solid.
Half-year results to 30 June showed new home completions up 5% to 4,445, putting it on track for 10,500 over the full year, at the top end of guidance.
Group revenues jumped 10.9% to £3.32bn, with average selling prices up 2.67% to £263,288. Persimmon has net cash of £350.2m. At 20.7 times trailing earnings, it’s notably pricier than Vistry, which I’d buy first.
Sadly, after such a strong run, I think I’ve left it too late to buy either. They surely can’t maintain this breakneck speed. Also, there’s a risk that hopes of a surge in housebuilding have been overdone as Labour may struggle to bulldoze through the necessary planning changes. Even if it does, there’s a shortfall of workers.
The clincher is that I already have exposure to the housing sector through Taylor Wimpey. Its shares are up 51.6% over 12 months. That’s not quite as good as Vistry and Persimmon, but I’ll content myself with that.
