Vistry chief executive sacked after accounting blunder that led to £165bn profit hit and share price halving
Controversial housebuilder Vistry has ousted a top executive after suffering an accounting blunder.
The developer yesterday abolished the role of Chief Operating Officer to ‘ensure a closer proximity of the Chief Executive to the company’.
But the move is unlikely to reassure investors concerned about the powerful role of director Greg Fitzgerald, who effectively holds both the positions of chairman and CEO.
Concerns: Vistry has ousted its Chief Operating Officer Earl Sibley (left). But investors remained concerned about boss Greg Fitzgerald (right) in the powerful role of executive chairman
And it follows a major accounting blunder that will cut profits by £165m and saw the FTSE 100 company’s share price more than halve in just over a month.
Fitzgerald reportedly offered to resign over the issue, revealed in a trading update in October, but the board rejected his proposal.
However, in a management shake-up, Bovis Homes owner Vistry yesterday announced that chief operating officer Earl Sibley will step down as director.
Following a transfer, Sibley, who has worked for Vistry for almost a decade, will leave at the end of the year.
The company said eliminating his role will “shorten the length of reporting lines” and give the 60-year-old Fitzgerald more direct oversight of the company.
But it comes amid shareholder concerns that Fitzgerald, who oversaw the £1.25 billion merger with Countryside in 2022, already has too much control.
Shares in Vistry fell a further 5.4 per cent, or 36.5p, to 634p yesterday after the announcement.
Dan Coatsworth, investment analyst at AJ Bell, said the accounting blunder, which saw Vistry issue two profit warnings in quick succession, was “embarrassing”.
“It appears to have prompted CEO Greg Fitzgerald to change the reporting structure so he is closer to the engine room,” he said.
‘Fitzgerald watching his every move suggests that no more mistakes will be tolerated and that it is now his job if things do not improve.
Eliminating the Chief Operating Officer role is not uncommon when there are other senior staff members embedded in the operational strategy, but you have to wonder if this is just a temporary measure to steady the ship.
“It’s not like Fitzgerald doesn’t already have enough on his plate with a joint position as CEO and chairman.”
Crisis: An accounting blunder will hit Vistry’s profits by £165m and has seen the FTSE 100 company’s share price more than halved in just over a month
Oli Creasey, property analyst at Quilter Cheviot, said: ‘Although the CEO is known as a shrewd entrepreneur, it is worth noting that he is not universally popular: recently around 20 per cent of shareholders voted against his reappointment.’
He added: ‘It will be interesting to see if this change allows him to better manage the local divisions and improve overall performance.’
The shake-up comes after Vistry said in October it had underestimated development costs at nine sites in the southern division by around 10 per cent, and that profits would fall by £115m over three years.
And this month the company issued a second £50 million profit warning, taking the total to £165 million.
An independent investigation found that “the pressure felt by organizational change” was a key factor in Vistry’s southern division, The Sunday Times newspaper reported.
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