Vistry shares fell on Wednesday after it said it expects a first-half loss of around £30m, as new chief executive Adam Daniels takes decisive action to cut debt and reposition the housebuilder, with 2026 now framed as a transition year.
Some may view a transition year as a painful one.
The departure of the CFO would also have ruffled investors’ feathers in a company that has been dogged by poor practises and a soggy housing market.
“Vistry’s shares fell on a gloomy trading update and news that chief financial officer Tim Lawlor was jumping ship,” said Dan Coatsworth, head of markets at AJ Bell.
“Investors have been getting jumpy about the state of the housebuilding and broader construction industry. Raw material and labour cost pressures have haunted the sector of late, and the prospect of possible interest rate hikes is bad news for mortgage affordability and housing sales.”
Results weren’t that bad, but they weren’t great either. The group completed around 6,100 homes in the six months to 30 June, down from 6,889 a year earlier, with more than half for affordable housing.
Underlying profit before tax was a modest £20m, but cash generation measures such as enhanced pricing discounts, accelerated asset sales, changes to site mix and build rates knocked around £50m off the bottom line, including one-off impairments on low-margin sites.
Profit was also hit by fewer partner deals amid the hiatus between government funding programmes and by higher financing costs.
Daniels, three months into the role, said the initiatives are well progressed and position the business for a significantly stronger second half. Unsold private homes in build have been more than halved from around £600m to under £300m, with £190m of that reduction due in cash on completion in H2. Net debt stood at £470m at the end of June, with the group still targeting net cash in excess of £100m by year end.
The company has also renegotiated several partner deals that fell short of its commercial requirements, delaying completions, with a number concluding in early July and the balance expected on improved terms during the third quarter. It has substantially exited its Part Exchange position, which had tied up an average of £50m of debt in recent years.
With a £3.9bn forward book and 80% of this year’s sales secured, the board expects full-year adjusted profit before tax in line with the consensus of £200m.
Investors will hope these expectations are met.