LONDON (ShareCast) - (Sharecast News) - House builder Vistry reported a slump in profits after "disappointing" year amid challenging market conditions, abandoned projects and cost overruns that forced it to suspend its dividend.
Pre-tax profit for 2024 fell 64% to £105.5m despite a 7% rise in completions. Vistry added that its forward order book totalled £4.4bn in the year to date, compared with £4.6bn last year, while the group sales rate was down to 0.59 per site per week from 0.81, reflecting a low volume of partner-funded transactions in the first quarter.

The company, which pivoted to building affordable homes in partnership with local authorities and housing associations, issued three profit warnings in the last quarter of the year and halved its operating divisions to three as a result of its problems.

On an adjusted basis profits fell by 35% to £263.5m. Completions done in partnership with housing associations rose 18% to 12,633, while homes sold on the open market were down 15% to 4,592.

"Following the government's recent announcement of an additional £2bn of affordable housing funding to the existing affordable homes programme, we expect partner funded activity to step-up during the year, resulting in a greater H2 weighting of delivery for the group in 2025," the company said on Wednesday.

"Overall, we are expecting our partner funded volumes in 2025 to be at a similar level to 2024, with strong momentum going into 2026."

The government this week said it would fund 18,000 affordable and social homes, as part of the target to build 1.5 million houses over the course of the current parliament.

Vistry, formerly Bovis Homes, said it had seen "some uptick" in open market sales in the past four weeks and expected this to continue to improve.

The company was rocked by an accounting scandal last year when it emerged that cost overruns on building projects were bigger than previously estimated. This resulted in Vistry taking a £165m hit on its 2024 accounts, which cut profit by £91.5m with the remainder affecting future years.

"With profits falling and debt levels rising, it looks like Vistry's getting nervous and in a bid to shore up the balance sheet, this year's final dividend has been halted. Further dividend payments will be subject to improved financial performance, with an uplift in cash generation and lowering debt levels seen as higher priorities for now," said Hargreaves Lansdown analyst Aarin Chiekrie.

"2025 hasn't got off to the best of starts either, with sales rates down significantly year-to-date as partner-funded transactions have pulled back. "

He added that the new government proposals offered "a glimmer of respite from the bad news".

"This aligns well with Vistry's strategy, which focuses on increasing volumes of affordable housing for UK buyers. Performance is expected to improve as the year progresses, but given its recent series of missteps, management will have to start delivering more good news if they want to rebuild investors' confidence."

Reporting by Frank Prenesti for Sharecast.com

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