Vistry: Housebuilder avoids fourth profit downgrade but warns of market uncertainty
Vistry has warned of uncertain market conditions as it reaffirmed previously downgraded profit guidance for the year ahead.
The UK’s largest housebuilder by output said the outcome of the government’s spending review and a “recovery in consumer confidence” would prove pivotal in determining performance in 2025.
Group adjusted pre-tax profit is forecast to be around £250m following a profit warning in December. That total would be not far off half of the £419.1m Vistry reported the year prior.
However, shares rose nearly five per cent in early trading amid investor relief that another profit warning had been avoided.
Total completions also rose around seven per cent to 17,200, leading to revenues of £4.4bn, up around nine per cent.
“After delivering three consecutive profit downgrades in the three months prior, Vistry has finally broken its streak of bad news,” Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said.
“The trading update wraps up a truly disastrous 2024 for the group, where despite new home completions and revenue rising, profits have been on a downward spiral.”
Cost overruns in the FTSE group’s South Division proved a major challenge at the tail-end of 2024, with the impact to profit totalling around £105m last year.
Vistry said it had implemented a “series of control enhancements” across the group during the fourth quarter, including monthly site cost reviews.
“Whilst these control enhancements have been applied group-wide, the Board remains confident that the significant issues identified in the South Division have not existed elsewhere in the group,” it said on Wednesday.
For full-year 2025, Vistry said it expected “low single digit build cost inflation,” while the increased cost from the National Insurance hikes in the Autumn Budget would knock around £5m off the bottom line.