Housebuilder Vistry declares third profit warning in three months

Vistry Group Shares plunged Tuesday after the company issued its third profit warning in three months following delays in some home transactions and completions.

The Kent-based housebuilder now expects its adjusted pre-tax profits for 2024 to be around £250m, compared with a previous forecast of around £300m.

He said several transactions with partners were taking “longer to conclude” and will now close in 2025.

Vistry also revealed it had pulled out of deals whose commercial terms were “not attractive enough” and noted a delay in some completions on the open market, although it said this had hurt profitability “to a lesser extent”.

Following this trading update, Vistry Group shares plunged 16.2 per cent to 548 pence on Tuesday morning, taking its losses over the past six months to around 55 per cent.

In October, the FTSE 250 company warned of a £115m hit to its future profits, including £80m this financial year, due to higher than projected construction costs on some developments in its southern division.

A month later, Vistry said the impact on profits would be worse than expected at £165m, while adjusted pre-tax profit guidance for 2024 was cut to £300m.

Greg Fitzgerald, the company’s executive chairman and CEO, reportedly considered resigning over the accounting error.

However, COO Earl Sibley agreed to resign after nearly a decade working for the company, and Vistry eliminated his COO position.

Greg Fitzgerald, Vistry’s president and CEO, acknowledged the latest reduced outlook was “disappointing.”

He added: ‘Our top priority for 2025 is to continue building and delivering new high-quality mixed tenure homes for our partners and private clients, and to do our part to address the country’s severe housing shortage.

“We remain committed to our housing association strategy and are firmly focused on positioning the business to move forward and rebuild profitability.”

Vistry expects to finish building around 17,500 units this year, having built 7,792 homes in the first six months, a year-on-year increase of 9 per cent.

Since last year, the company has focused its operations on a partnership model aimed at providing more affordable mixed tenure properties.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the revised earnings downgrades are “a worrying trend driven by a series of poor management decisions and forecast errors that have left investors feeling less than cheerful.”

He added: “As the year ends on a sour note, Vistry faces a long winter of rebuilding confidence, leaving investors with no choice but to ponder their options.”