MARKET REPORT: Construction firm Vistry slumps as cost issues hit profits

Housebuilders have been in a positive light since the Bank of England began cutting interest rates and the Labor government pledged to increase housing spending.

However, conditions in the sector appear to be more uncertain for some, with a second profit warning in a month from a blue-chip builder. Vistry Group providing a wholesome story.

Last month, the developer surprised investors by revealing a black hole in its accounts related to understated construction costs at its South housebuilding division.

Vistry followed up yesterday by revealing that he expects the issues to hit profits of £165m in the coming years.

This includes a £25m profit in the current financial year, which will also be affected by reduced sales completion expectations in the period.

Vistry said its average weekly sales rate had risen 42 per cent to 1.02 so far this year, up from 0.72 at the same time last year.

However, the company said conditions in September and October were slower than expected, with buyers nervous about the UK budget.

The fresh batch of bad news sent Vistry shares down 15.5 per cent, or 135.5p, to 738p.

After a busy time with corporate updates, interest rate decisions and the US presidential election results, the mood in the City was subdued at the end of the week.

The FTSE 100 index closed down 0.8 per cent, or 68.35 points, at 8,072.39, while the FTSE 250 index fell 0.6 per cent, or 117.45 points, to 20,517.92. .

Following a recent rally, blue-chip miners were hit as copper and iron ore prices retreated after latest attempts to shore up its struggling economy by top metals consumer China failed.

Among the casualties of the heavy sector, antofagasta lost 6.6 per cent, or 119.5 pence, to 1,689 pence, Rio Tinto lost 4.9 per cent, or 255 pence, to 4,946 pence, and Glencore fell 5 per cent, or 20.6 pence, up to 394.8 pence.

Scottish Mortgage Investment Trust fell 0.6 per cent, or 5.2p, to 905.6p after announcing a change of chairman and revealing a half-year rise in net asset value (NAV) that missed its benchmarks.

But on the positive side of the FTSE 100, pharmaceutical giant AstraZeneca gained 1.8 per cent, or 178 pence, to 9,903 pence, as it revealed positive high-profile results from a phase III study of its Tezspire treatment for nasal polyps .

And car maker TI Fluid Systems rose 2.7 per cent, or 4.4 pence, to 169.4 pence after announcing that the deadline by which ABC Technologies must make a firm offer for the company had been passed. expanded to allow the group to finalize its remaining confirmatory due diligence and financing.

On the second line, the High Street bakery chain. Greggs fell 6 per cent, or 168 pence, to 2,638 pence after analysts at Deutsche Bank cut its rating to “sell” due to Budget changes to the company’s national insurance obligations.

Analysts at the German bank also cut their stance on Mitchells & Butlers to hold for the same reason, with the pub operator down 7.7 per cent, or 19.5p, to 233p.