Expected losses confirmed but revenue and completions up in 2024
Troubled housebuilding giant Vistry avoided a fourth successive lowering of its expected profit, the firm said in a trading update this morning.
According to the trading update for the year ended 31 December 2024, the firm expects gross adjusted profit before tax to stand at £250m.
It marks a huge drop from £419.1m recorded last year and is 40% lower than the housebuilder’s original forecast of £430m.
However, it is in line with the prediction made on Christmas Eve, when Vistry issued its third profit warning in as many months.
The first two warnings concerned cost issues in the business’ southern division, which are now estimated to total £105m in 2024, £50m this year, and £10m beyond.
December’s announcement, however, cited delays to a number of partner agreements and a decision not to proceed with some anticipated land transactions.
Vistry’s troubles at the end of last year also saw the departure of chief operating officer Earl Sibley in November.
This morning, the company said it was “confident of rebuilding underperforming regions in the former Southern Division” this year and announced further changes to its operational structure as a result of a review.
Its divisional structure has been consolidated from six into three divisions, each led by an executive chair reporting directly to the chief executive.
All executive chairs are former divisional chairs and members of the executive leadership team.
They will be supported at the divisional level by newly appointed divisional commercial directors, divisional operational directors and divisional finance directors.
It said the changes were aimed at reducing reporting lines and enabling the chief executive to “get closer to the business”, the same reasons cited for axing Sibley’s role last year.
The interims also showed a 9% increase in adjusted revenue from £4bn to £4.4bn, and a 7% increase in completions, which now stand at 17,200.
This could make the business Britain’s largest housebuilder by number of homes built. Its closest competitor, Barratt, has said it is likely to build no more than 13,500 homes in FY24, although its merger with Redrow will add a few thousand homes to that tally.
Vistry said the partnership-led approach to housebuilding, which it turned to in 2023, “remains very attractive” and said it was “committed to its asset light, high returns” strategy.
It said demand was “good” in the partner funded market in 2024, “albeit with some slowdown in activity in Q3 ahead of the Autumn Budget”.
According to the interims, it struck more than 220 new partner deals with more than 70 partners in FY24.
Meanwhile, it said the open market had remained “constrained” due to mortgage affordability, forcing the firm to introduce incentives of up to 5% of open market sales price.
>>See also: How worried should the sector be about Vistry?
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The business warned of further uncertainty in the year ahead.
“Market conditions in FY25 for both partner-funded and open market sales remain uncertain, with the outcome of the government’s spending review and transition to a new affordable homes programme important for unlocking a step up in momentum in the Partner Funded market, and a recovery in consumer confidence key to open market sales growth,” it said.
Vistry has a pipeline of 16,500 mixed tenure units across 61 sites, up slightly from 15,288 last year.
It has a forward sales position of £4.4bn, slightly down on the £4.5bn recorded in FY 23.
The firm will publish its full year results on 26 March 2025.
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