8th Nov 2024 08:51
(Alliance News) - Vistry Group PLC on Friday reported the results from an internal review of its South Division issues earlier this year, and cut its full-year profit guidance further as a result.
In early October, shares in the Kent, England-based housebuilder fell nearly 30% after the company reduced profit guidance. This was driven by its understatement of development costs for the South Division by around 10%.
Vistry shares fell 15% to 745.00 pence each in London on Friday morning. The stock is down 41% over the past six months.
The review covered all six divisions and 26 regional business units, and found no systemic issues outside of the South Division.
However, Vistry now expects the impact to adjusted pretax profit to be greater than reported in October, and cut its forecast by a further 15% to around GBP300 million from GBP350 million. This would represent a 33% fall from GBP419.1 million last year.
Vistry also projects a GBP50 million impact to 2025 profit, and a GBP10 million impact to the years beyond that.
"A total of 18 sites in the South Division have adjusted full-life costs by greater than GBP1.0 million, with 5 large, multi-phase sites accounting for around 60% of the total cost movements", the company explained.
Vistry also on Friday said its average weekly sales rate for the year to date was 1.02 per outlet, up 34% from 0.72 last year. Since July 1, the rate has been 0.73 per outlet per week, 30% higher than 0.54 a year prior.
The company now expects to deliver total completions of around 17,500 units for the full year, reduced from previous guidance of 18,000, though it would represent a 8.2% increase from 16,118 in 2023.
Vistry said: "Having seen a year of neutral build-cost inflation in 2024, the group is expecting to see some overall pressure on build costs in 2025. We will look to mitigate these where possible through our benefits of scale and visibility of revenues, and through efficiency gains. We are assessing the impact of the Autumn Budget and note that the direct impact to the group of the April 2025 increase in Employer National Insurance contributions will be around GBP5 million in 2025, with the rate increase also impacting our supply chain.
"The scale of the need for affordable housing across the country is undisputed, and the government is committed to a sharp increase in the delivery of affordable housing over the next five years. Vistry remains uniquely positioned and committed to playing a key role in supporting the government to deliver its plans."
By Emily Parsons, Alliance News reporter
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