Vistry says operating profit ‘exceeded expectations’ as it announces board changes

Vistry has announced its operating profit for the year has exceeded its expectations.

The partnerships housebuilder, in a trading update this morning, said it is on course to post adjusted pre-tax profit of around £418.4m for the year to 31 December, ahead of the £410m guidance stated three months ago.

This means its adjusted pre-tax profit is in line with last year’s performance. This is despite previously saying its merging of its housebuilding arm into its partnerships business and cutting five regional will hit its adjusted profit in 2023 by £40m.

Vistry completed 16,124 units in the year, down by 5.4% year-on-year. The firm last year announced an ambition to ramp up development to 25,000 homes a year under its new partnerships strategy and said it can build 20,000 homes a year in the short-term.

The firm also today said it has successfully agreed cost reductions with suppliers on all its existing and future contracts.

It said: “This reflects both improving market conditions on costs and the benefits to the group from its scale, its growth strategy, and the high level of visibility on forward sales and build programmes under the Partnerships model which offers greater continuity of work to our suppliers.

Vistry last year hit the headlines for writing to contractors to ask for a 10% price cut. Vistry boss Stephen Teagle later defended the move, telling Building it would lead to greater efficiency and more work in the longer term for contractors.

The housebuilder also announced a series of changes to its non-executive team today. Ralph Findlay is standing down as chair after nine years, and will be replaced by Vistry boss Greg Fitzgerald, who will serve as both chief executive and executive chair.

Jeff Ubben is standing down from the board while Usman Nabi, managing partner and chief investment officer at Los Angeles-based investment firm and Vistry shareholder Browning West, will join.

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Chris Browne has also informed Vistry he will step down from the board in May.The group is seeking to recruit two further board members.

Vistry said its forward sales position has increased 12.4% year-on-year, standing at £4.5bn. It said its transition of its former speculative housebuilding landbank to the partnerships model is making good progress and new partnerships and pre-sale agreements are ‘progressing well’. Vistry in November announced an £819m deal to pre-sell nearly 3,000 homes to Leaf Living and Sage Homes.

However, Vistry’s adjusted revenues are down year-on-year from £4.46bn in 2022 to £4bn in 2023, while its average selling price has fallen from £289,000 to £277,000.

The housebuilder said its timber frame business delivered 2,500 units in the year and it expects this to double in 2024 as it moves towards a target of producing 7,000 units a year from its three factories.