- Vistry now expects its adjusted pre-tax profits for 2024 to be c.£250m
- The firm said several deals with partners were taking ‘longer to conclude’
Vistry Group shares plunged on Tuesday after the firm issued its third profit warning in three months following delays to some home completions and transactions.
The Kent-based housebuilder now expects its adjusted pre-tax profits for 2024 to be approximately £250million, compared with previous guidance of around £300million.
It said several transactions with partners were taking ‘longer to conclude’ and are now set to close in 2025.
Vistry also revealed it had withdrawn from deals whose commercial terms were ‘not sufficiently attractive’ and observed a hold-up on some open market completions, although it said this had damaged profitability ‘to a lesser extent.’
Following this trading update, shares in Vistry Group plummeted on Tuesday morning by 16.2 per cent to 548p, taking their losses over the past six months to around 55 per cent.
Back in October, the FTSE 250 business warned of a £115million hit to future profits, including £80million this financial year, due to higher-than-projected build costs on some developments in its south division.
Downgrade: Vistry Group shares plunged on Tuesday after the firm issued its third profit warning in three months
A month later, Vistry said the earnings impact would be worse than anticipated at £165million, while adjusted pre-tax profit guidance for 2024 was cut to £300million.
Greg Fitzgerald, the company’s executive chairman and chief executive, reportedly considered resigning over the accounting blunder.
However, chief operating officer Earl Sibley agreed to step down instead after almost a decade working for the firm, and Vistry axed his COO position.
Greg Fitzgerald, chairman and chief executive of Vistry, acknowledged the latest reduced outlook was ‘disappointing.’
He added: ‘Our top priority for 2025 is to continue building and delivering high-quality mixed tenure new homes for our partners and private customers, and to do our part in addressing the country’s acute housing shortage.
‘We remain committed to our partnership housing strategy and are firmly focused on positioning the business to move forwards and rebuild profitability.’
Vistry expects to finish building about 17,500 units this year, having constructed 7,792 homes in the first six months, a 9 per cent year-on-year rise.
Since last year, the business has focused operations on a partnerships model aimed at providing more affordable mixed-tenure properties.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the revised profit downgrades are ‘a troubling trend driven by a string of poor management decisions and forecasting missteps that have left investors feeling far from jolly.’
He added: ‘As the year ends on a sour note, Vistry faces a long winter of rebuilding trust, leaving investors with little choice but to mull over their options.’
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