The housebuilder's new boss is shrinking the business after a brutal half-year that saw goodwill written down and debt balloon.
Vistry Group (LSE: VTY) tumbled to a pre-tax loss of £661.3m in the first half, reversing a small profit a year earlier, as the housebuilder took a £475m goodwill write-down and a £73m building-safety charge while shares continued to languish near multi-year lows.
Even stripping out one-off items, Vistry swung to an £83.3m adjusted loss, having discounted homes to raise cash and absorbed the initial costs of a strategic overhaul launched by new chief executive Adam Daniels. Completions fell 8% over the period and net debt jumped to £468.8m from £293.1m, underlining the scale of the pressure facing the group.
Daniels, who took charge in April, said a review had confirmed the group's mixed-tenure model of affordable, partner-funded and open-market housing remained sound, but that execution and capital discipline had slipped. In response, Vistry is cutting its annual completions target to around 12,000 homes, consolidating from 25 operating regions to 12, shrinking its land bank and pulling out of open-market housebuilding in the South East.
The company has identified £50m of fresh annual cost savings on top of £25m already flagged, as it battles a broader industry slowdown; open-market conditions worsened over the summer with sales rates slowing across the sector. Vistry did point to one bright spot, securing the largest single grant under a new government affordable-housing programme, worth £350m, to deliver more than 3,000 homes.
Looking ahead, Vistry guided to adjusted pre-tax profit of around £165m for the full year and about £185m in the next, figures that would look attractive if delivered, though the group's recent record of disappointing the market means investors are likely to treat the targets with caution until proven.
This report is based on Vistry Group’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Ernie Journeys on Unsplash.
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