Partnership housing group Vistry (LON:VTY) announced it expected to make a loss in H1 and would take further one-off profit impacts this FY. The news sent shares in the Bovis, Linden and Countryside Homes owner down 6% to 236p.
H1 volumes and prices down
In its H1 trading update, Vistry reported 6,100 completions, down 11.5% on H1 2025. Average selling prices were discounted by 7.1% against 1.4% the previous year.
The firm said it expected to post a ‘modest’ pre-tax profit of £20 million, before one-off items, against £80 million in H1 2025. It put the decline down to lower volumes of partner deals, the timing of land sales and higher finance costs.
However, actions to generate cash, including accelerated asset sales and higher discounts, will result in a £50 million impairment. Therefore, the actual result before tax is expected to be a £30 million loss.
Moreover, the firm warned the new CEO’s review process will lead to further one-off profit impacts. The scale and timing of these has yet to be determined, and an update is expected in September.
‘Material’ improvement in H2
Vistry insisted the near-term prospects for the partnership market remained ‘very attractive’ and it would see a ‘materially improved H2 profit performance’. It expects an increase in volumes in both the open market and partner market as well as the conclusion of some delayed H1 deals.
The company also said profit from land bank sales would help drive earnings, along with improved margins from site mix and new sites. It therefore expects pre-tax profit before charges to meet current market expectations of £200 million.
Meanwhile, CFO Tim Lawler has tendered his resignation and will leave in October. Lawler is taking up the CFO role in a large privately-owned business in a different sector to Vistry.
We’ve been cautious on the housebuilders for some time, and this update hasn’t changed our view. The sector is still beset by weak confidence, planning delays, rising input costs and a poor outlook.
Vistry warned in May that H1 profit would be ‘significantly’ lower than last year, but it didn’t forecast a loss. Clearly it has had problems, starting with the 2024 review which found costs in some divisions had been understated. Its main issue now though seems to be the need to generate cash and reduce its working capital.
To that end it has cut back its work in progress, having started FY26 with £600 million of unsold private homes in build. That figure is now down to around £300 million, with £190 million due to be received in H2 assuming the properties sell.
We don’t mind a self-help/turnaround story, but we would leave the housebuilders alone for the time being. Vistry is currently the most-shorted UK stock, and we suspect it will stay that way after today’s news.
Read the press release here: https://www.vistry.co.uk/investors/results-reports-presentations
