UK housebuilder Vistry has issued its third profit warning in three months, in a year-end blow to the construction company that sent its shares to a two-year low.
The business, which was relegated from the FTSE 100 share index on Monday, now expects annual adjusted pre-tax profit of just £250m, down from previous guidance of about £300m.
The group – previously known as Bovis Homes – said this is partly due to delays, with a number of developments having not yet been completed, and transactions with partners having been delayed until 2025.
Vistry also said it had also dropped a number of proposed deals “where the commercial terms on offer were not sufficiently attractive”. The company added that it expected better terms and options to open up next year.
The news weighed on Vistry’s shares, which plunged 17.5% at the start of trading to 539.5p, making it the worst performer on the FTSE 250 index of medium-sized companies. That was the lowest level for the company’s shares since October 2022.
Shares in other housebuilders also fell on Tuesday; Persimmon was down 1.4% and Barratt Redrow fell 1%.
Tuesday’s profit warning is the third from Vistry in as many months.
In October, Vistry launched an independent review of operations in its south division after revealing it had “understated” total build costs by about 10%. It estimated at the time that this would knock profits by £115m over the next two years, and ultimately cut annual profit for 2024 to £350m – well below the £419m reported last year. The news sent its shares plummeting, wiping £1bn off the company’s value.
A month later, in November, Vestry said it expected a bigger hit to profit of about £165m, and downgraded its 2024 profit expectations further to £300m.
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, said Vestry’s third profit downgrade was part of “a troubling trend driven by a string of poor management decisions and forecasting missteps that have left investors feeling far from jolly.
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“Even a late cash influx in December couldn’t light up the season, with net debt now expected to close the year at around £200m – a far cry from the neutral footing investors had hoped for. 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.”
The Vestry chair and chief executive, Greg Fitzgerald, admitted that it had been a “challenging past few months”.
“Today’s announcement and the financial outcome for FY24 is disappointing. 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,” Fitzgerald said.
“We remain committed to our partnership housing strategy and are firmly focused on positioning the business to move forwards and rebuild profitability.”
Data compiled by the Financial Times has found that the UK’s listed housebuilders – excluding Vistry – are on track to build the fewest new homes for sale in a decade, as the market is held back by planning rules and high mortgage rates.