The profits at the UK housebuilder visitor group have fallen by more than a third in what is described as a “disappointing year,” but this week it has pinned its turnaround hopes to the government's promise to inject £2 billion into affordable homes.
After three profit warnings last year, Vistry suspended its dividend payments to shareholders on Wednesday, with its shares falling by 8% before returning to 5.5%.
Vistry CEO Greg Fitzgerald said that 2024 was challenging but welcomed the government's affordable housing pledge, adding that builders will “try to make progress as quickly as possible to deliver quality new homes across the country.”
The Treasury said this week it would fund 18,000 affordable social homes as part of its goal to build a 1.5m home in the course of Congress.
Previously known as Bovis Holmes, Vijolie has been working with the Housing Association in recent years to focus on building affordable homes. Adjusted pre-tax profit fell 35% last year to £263.5 million, with the total number of completed properties increasing 7% to 17,225. Completions made in collaboration with the Housing Association increased by 18% to 12,633 people, while homes sold in the open market fell 15% to 4,592.
It is trying to attract the line under a harmful accounting scandal after admitting in November that the cost of a building project was worse than previously thought. It began reviewing independent operations in its southern part a month before, after it revealed that it had a “conservative” total build cost of about 10%.
This means Vistry has hit £165 million, reducing its profits in 2024 by £91.5 million, with the rest affecting future years. There were also some delays to signing a conclusion with our partners at the end of the year.
HouseBuilder said it had performed a “route and branch review” procedure and made some changes to prevent further errors in the cost report. After simplifying the business in late 2023, it cut 200 jobs and paid less with bonuses last year as profit targets were not met.
Vistry also spent more on building safety repairs compared to £19.3 million in 2023. The government ordered that the failed cladding be replaced after the Grenfell Tower fire in 2017 and other repairs be performed on the high-rise blocks.
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Investec analyst Aynsley Lammin said the results were “no major progressive negative surprises.” He added: “Demand for Partnership Holmes is clearly a softer and hasn't been helped by the lack of funding, but the news of government funding injections should be useful later this year.”
