Key facts
- Vistry Group anticipates a £30 million pre-tax loss for the first half of the year.
- The company is heavily discounting unsold private homes, with average discounts reaching 7.1%.
- Unsold private home inventory has decreased from £600 million to under £300 million.
- Finance director Tim Lawlor will leave Vistry Group in October.
- Vistry Group plans to reduce annual costs by £25 million through efficiency measures.
- Worsening market conditions in the second quarter have affected customer confidence and sales.
Vistry Group, a major UK housebuilder, has issued a profit warning, forecasting a £30 million pre-tax loss for the first half of the year due to significant price reductions on unsold properties. The company's shares fell sharply following the announcement and the news of finance director Tim Lawlor's departure in October.
Chief executive Adam Daniels, who took the helm three months ago, has implemented price cuts to clear inventory, reducing the value of unsold private homes from £600 million to under £300 million, with average discounts rising to 7.1% from 1.4% a year ago. The company cited deteriorating market conditions in the second quarter, including reduced customer confidence influenced by geopolitical events and rising mortgage rates, as reasons for the downturn.
Vistry is also pursuing cost-saving measures, aiming to reduce annual expenses by £25 million through voluntary redundancies and more selective hiring. The company directly employs 4,400 people.
Analysts expressed concerns about the company's outlook, with RBC Capital Markets questioning the guidance and the lack of explicit mention of potential future impacts. The company's share price has seen a significant decline over the past year, following previous profit warnings and a reorganisation. Vistry and its Countryside Partnerships division are also facing a class-action lawsuit regarding alleged price collusion.