House builder Vistry issues third profit warning in three months
- Vistry now expects 2024 adjusted pre-tax profits to be around £250m
- The company said several deals with partners ‘took longer to close’
Vistry Group shares fell on Tuesday after the company issued its third profit warning in three months following delays in the completion of some homes and transactions.
The Kent-based housebuilder now expects adjusted pre-tax profits for 2024 to be around £250 million, compared to previous expectations of around £300 million.
It said several transactions with partners “took longer to complete” and will now close in 2025.
Vistry also revealed it had withdrawn from deals where commercial terms were “not attractive enough” and found some open market completions were being delayed, although it said this had hurt profitability “to a lesser extent”.
Following this trading update, Vistry Group shares tumbled 16.2 per cent to 548p on Tuesday morning, taking their losses over the past six months to around 55 per cent.
In October, the FTSE 250 company warned of £115 million in damage to future profits, including £80 million this financial year, due to higher-than-expected construction costs on some developments in its southern division.
Downgrade: Vistry Group shares tumbled on Tuesday after the company issued its third profit warning in three months
A month later, Vistry said the profit impact would be worse than expected at £165m, while its adjusted pre-tax profit forecast for 2024 was cut to £300m.
Greg Fitzgerald, the company’s executive chairman and CEO, has reportedly considered resigning over the accounting blunder.
However, chief operating officer Earl Sibley agreed to step down after nearly a decade working for the company, and Vistry resigned from his COO position.
Greg Fitzgerald, chairman and CEO of Vistry, acknowledged that the latest lowered outlook was “disappointing.”
He added: “Our top priority for 2025 is to continue building and delivering high-quality new mixed-use homes for our partners and private clients, and doing our part to tackle the country’s acute housing shortage.
“We remain committed to our housing strategy as a partnership and are firmly focused on positioning the company to move forward and rebuild profitability.”
Vistry expects to complete construction of about 17,500 units this year, after building 7,792 homes in the first six months, an increase of 9 percent year-on-year.
Since last year, the company has focused its activities on a partnership model aimed at offering more affordable mixed-use properties.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the revised earnings cuts are “a worrying trend driven by a series of poor management decisions and forecast errors that have left investors far from cheerful.”
He added: ‘As the year ends on a sour note, Vistry faces a long winter of rebuilding confidence, leaving investors with little choice but to consider their options.’
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