Vistry Group announced significant downward revisions to its annual profit expectations following challenging results in the first half of the year. The company reported a loss before tax of £661.3m, a sharp reversal from the prior year’s profit of £40.9m. The deterioration was driven largely by a £475m writedown and a £73m provision related to building safety works, alongside a substantial pile of unsold inventory valued at £600m.
Chief Executive Adam Daniel, who assumed leadership in April, outlined a comprehensive restructuring strategy designed to stabilize the company’s operations. The plan includes withdrawing from private sales in south-east England and repositioning the business as a more streamlined operator focused on approximately 12,000 homes annually. The reorganization encompasses reducing the land bank from 51,000 to 36,000 plots, simplifying product lines and brands, and shifting operational focus toward the north, Midlands, and west of England. Daniel stated that the identified issues are addressable through these strategic adjustments.
The cost-reduction initiatives extended beyond operational changes. Vistry implemented a £50m cost savings program in addition to an earlier £25m voluntary redundancy program and hiring freeze. The company reduced its workforce to 4,150 employees by the end of July, with 350 departures occurring since summer. Organisational restructuring included consolidating regional operations from 25 to 12 regions, resulting in closures of some regional offices.
Operational metrics reflected significant headwinds facing the business. Home completions declined 8% to 6,304 units, while revenues dropped 9% to £1.7bn. To manage the inventory burden, Vistry implemented steep discounts averaging 7.1% on homes, leaving £220m of unsold properties remaining. Debt levels increased substantially from £293.1m to £468.8m. The company attributed performance challenges to weak private home sales during summer months, cancellations and renegotiations of affordable housing contracts, and cost inflation between 3% and 4% driven by fuel price increases.
On a positive note, Vistry secured £350m in government funding during August to construct 3,000 affordable homes under the £39bn social and affordable homes programme, representing the largest allocation to any single recipient. The company indicated construction on these units had commenced. However, market sentiment remained negative, with the share price declining more than 8% on announcement of the results, reflecting ongoing investor concerns about execution risks and macroeconomic conditions affecting housing demand and affordability.
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