British housebuilder Vistry has issued its third profit warning in three months, in a year-end blow to the builder that has seen its share price fall to a two-year low.
The business, which was removed from the FTSE 100 share index on Monday, is expected to make an adjusted pre-tax profit of just £250m for the year, down from its previous forecast of around £300m.
The group, formerly known as Bovis Homes, said delays were partly the result of a number of developments still being completed and deals with partners postponed until 2025.
Vistry said it had also withdrawn a number of proposed transactions for which “the commercial terms offered were not sufficiently attractive”. The company added that it expects better terms and options to be available next year.
The news weighed on Vistry shares, which plummeted 16.2% in short Christmas Eve trading to close at 547.5p, the worst performance in the FTSE 250 index of mid-sized companies. This was the lowest level for the company's stock since October 2022.
Shares of other homebuilders also fell on Tuesday. Persimmon fell 2.4% and Barratt Redrow fell 0.5%.
Tuesday's profit warning is Vistry's third in recent months.
In October, Vistry launched an independent review of its southern division's operations after revealing it had “underestimated” total construction costs by about 10%. The company estimated at the time that this would reduce profits by £115m over the next two years, ultimately reducing annual profits to £350m in 2024, compared to the £419m reported last year. was significantly lower. The news sent the company's share price plummeting, wiping out £1bn from its value.
A month later, in November, Vestry expected profits to be around £165m and revised down its 2024 profit forecast further to £300m.
Matt Blitzman, senior equity analyst at Hargreaves Lansdown, said Vestry's third earnings downgrade was “part of a troubling trend caused by a series of poor management decisions and faulty forecasts. Investors are far from happy.”
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“December's slow capital inflows have not brightened up the season and it is now expected to end the year with net debt of around £200m, far from the neutral position investors had hoped for. Investors have little choice but to weigh their options as Vistry faces a long winter of rebuilding confidence as the year ends on a difficult note.
Vestry Chairman and CEO Greg Fitzgerald acknowledged that “the last few months have been challenging.”
“We are disappointed with today’s announcement and our financial results for 2024. Our top priorities in 2025 are to continue to build and deliver high-quality mixed ownership new homes for our partners and private customers, and to support our national to do our part to address the country's severe housing shortage,'' Mr Fitzgerald said.
“We remain committed to our partnership housing strategy and remain firmly focused on taking the business forward and rebuilding its profitability.”
According to data compiled by the Financial Times, Britain's listed housebuilders, excluding Vistry, say they are building new homes for sale at the slowest pace in a decade as the market is held back by planning rules and high mortgage rates.
