UK builder Vistry has issued its third profit warning in three months, in a blow for the construction company, which has sent its shares to a two-year low.
The business, which was relegated from the FTSE 100 share index on Monday, now expects an annual pre-tax profit of just £250m, up from previous guidance of around £300m.
The group – previously called Bovis Homes – said this was partly due to delays, with some developments not yet completed, and transactions with partners delayed until 2025.
Vistry also said that a number of proposals were dropped “where the commercial conditions in the offer were not favorable enough”. The company added that it expects better conditions and options to open next year.
The news weighed on shares in Vistry, which plunged 17.5% in early trading to 539.5p, the worst performer in the FTSE 250 index of mid-sized companies. That was the lowest level for the companies since October 2022.
It also takes part in other buildings on Tuesday; Persimmon was down 1.4% and Barratt Redrow fell 1%.
Tuesday’s profit was the third from Vistry in as many months.
In October, Vistry released an independent review of operations in the southern division showing that “understated” total construction costs by around 10%. It is estimated at the time that this profit will knock from 115m in the next two years, and will finally cut the annual profit in 2024 to 350 pounds – well below the 419m pounds reported last year. The news sent its shares into the lead, wiping £1bn off the value of the company.
After November, Vestry said she was expected a major hit to profits of around £165mand its expected 2024 profit of £300m.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said Vestry’s third-quarter profit margin was part of “a downward trend emanating from a string of management and forecasting mistakes that have left investors feeling a bit queasy.”
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“Even the recent influx of cash failed to brighten the season in December, with net debt now expected to close year-on-year at around £200m – a far cry from what investors had hoped for. As the year ends on a rosy note, Vistry faces a long winter of confidence-building, leaving investors with little choice, but to discuss well”.
Vestiry chair and chief executive Greg Fitzgerald admitted it had been a “challenging few months”.
“Today’s announcement and financial results for FY24 are disappointing. Our top priority for 2025 is to build and continue to build high quality mixed tenure new homes for our partners and private clients, and to play our part in addressing the country’s acute housing shortage,” Fitzgerald said.
“We remain committed to our company’s housing strategy and are firmly focused on growing the business and building profits.”
Data found compiled by the Financial Times UK builders are listed – excluding Vistry – on track to build new homes for sale in a decade, as the market is held back by regulations and high mortgage rates.