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Vistry has overhauled its management structure and tightened its cost controls after a series of profit warnings tied to underestimated building costs that have tanked the housebuilder’s shares.
The housebuilder said it would tighten its processes for monitoring costs at its building sites and managing contractors as it faces a £165mn hit over three years following overspending in one of its divisions. Shares have fallen nearly 60 per cent since the issues were first disclosed in October.
In a trading update on Wednesday, the group said it would also merge its six regional divisions into three “with the objective of reducing reporting lines and enabling the CEO to get closer to the business”.
Chief executive Greg Fitzgerald, who is also chair of the company, has been under pressure to steady the ship after Vistry, one of the UK’s largest housebuilders with a focus on affordable homes, endured a difficult 2024.
It was relegated from the FTSE 100 to the FTSE 250, issuing three profit warnings in the final quarter of 2024 after disclosing the accounting issue in October.
The third profit warning came on Christmas Eve, with the company blaming delays to closing transactions before the end of the year. Vistry said at the time that it had also called off “a number of proposed transactions where the commercial terms on offer were not sufficiently attractive”.
An external review into accounting issues found in November that the problems were isolated in one regional division.
On Wednesday it said it had built 17,200 homes in 2024, up 7 per cent but just short of its guidance.
The broadly as-expected results reported on Wednesday may give investors some reassurance. Shares rose 5.5 per cent in early trading on Wednesday.
“There were no further surprises for 2024 in this update,” said Peel Hunt analyst Clyde Lewis.
Unlike other listed housebuilders, Vistry builds the large majority of its homes under contracts with rental and affordable housing providers — including housing associations and major investors such as Blackstone.
On Wednesday, it said it would deliver its reduced forecast of £250mn in 2024 adjusted profit before tax and end the year with £180mn of debt, £20mn less than expected.
