24th Sep 2026 09:51
(Alliance News) - Vistry Group PLC on Thursday said it was streamlining the business but does need to raise equity, as it lowered profit guidance amid continued tough trading conditions.
In response, shares in the Kent, England-based housebuilder fell 8.9% to 244.20 pence each in London on Thursday. They have fallen 62% in the last 12 months.
Outlining the results of a strategic review, Chief Executive Adam Daniels said Vistry is being repositioned as a specialist mixed-tenure housebuilder.
To achieve this the group will need to be "smaller, more focused geographically and with increased discipline and control in operational delivery and allocation of capital," he stated.
Vistry will target around 12,000 completions per annum over the medium term with a tenure mix of around 60% partner funded and 40% open market. In 2025, completions totalled 15,658, down from 17,225 in 2024.
There will be a greater focus on regions and site profiles where the "mixed-tenure model performs best", with increased exposure to the North, Midlands and West.
South East operations will move to a fully pre-sold model to eliminate open market exposure.
Vistry will consolidate from 25 regions to 12 larger operating regions to reflect lower volume targets and to obtain cost efficiencies.
Owned land bank will be reshaped and reduced to 36,000 plots from 51,000, with a more selective approach to new land acquisition.
Overhead cost savings of GBP50 million a year have been identified, in addition to the GBP25 million previously identified. These savings are expected to be achieved within the next two years, with cost associated in FY26 anticipated to be GBP40 million.
Vistry is targeting an average daily net debt reduction to around GBP500 million in FY27 and below GBP400 million in FY28. Net debt at June 30 was GBP468.8 million versus GBP293.1 million the year prior.
The firm is targetting return on capital employed of more than 30% and 12% operating margin by FY31, with capital employed expected to reduce to around GBP1.5 billion over the same time frame.
Shareholder distributions will be "reconsidered" once sufficient progress has been made on deleveraging and capital reduction objectives.
"This is the right model for Vistry and one which gives it the potential to thrive, benefitting from structural demand for affordable and mixed-tenure housing," CEO Daniels said.
Daniels said the review confirms that Vistry has strong fundamentals and he does not anticipate any need to raise equity.
The strategic update came as Vistry announced half-year results.
It swung to a pretax loss of GBP661.3 million in the six months ended June 30 from a profit of GBP40.9 million a year earlier, as revenue fell 13% to GBP1.42 billion from GBP1.64 billion.
The reported loss reflected exceptional items including a GBP475.0 million goodwill impairment and an additional GBP73.2 million building safety provision.
On an adjusted basis, Vistry posted pretax loss of GBP83.3 million compared to profit of GBP80.6 million a year ago, worse than the GBP30 million loss projected in July.
Adjusted revenue fell 9.0% to GBP1.70 billion from GBP1.87 billion. Total completions declined 8.0% to 6,304 homes from 6,889.
Vistry said its GBP3.3 billion forward order book leaves it 91% forward sold for financial 2026, although it noted open-market conditions became more challenging over the summer amid lower customer confidence, affordability constraints and wider economic uncertainty.
It now expects a broadly neutral cash position at the end of 2026, below previous guidance, and said adjusted pretax profit would be around GBP165 million excluding strategic review-related items, which includes a GBP40 million downward revision from partner deals no longer targeted for this year.
In July, Vistry had forecast adjusted pretax profit in line with market consensus of GBP200 million.
Subject to market conditions remaining broadly stable, Vistry expects FY27 adjusted pretax profit to be around GBP185 million.
By Jeremy Cutler, Alliance News reporter
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