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Vistry Shares Tumble on Profit Warning, War Impact
13 May
Summary
- Vistry warns of lower annual profit due to economic impact.
- Building pace to slow as material costs and buyer interest dip.
- Company shares hit a more than 14-year low following warning.
The British house builder Vistry has cautioned of a significant drop in its annual profit, with shares reaching a new low not seen in over 14 years. This financial warning stems from the economic repercussions of the Iran War, which have increased material costs and decreased buyer interest.
In response, Vistry announced it will reduce its building pace. The company is also implementing measures to improve cash flow and reduce debt. These actions include halting share buybacks, delaying construction projects, and adopting more stringent land acquisition criteria. Additionally, Vistry is offering enhanced incentives to stimulate sales.
New CEO Adam Daniels is currently undertaking an operational review, with findings expected in September. Competitors like Persimmon and Taylor Wimpey have issued similar warnings. Vistry now forecasts its full-year adjusted profit before tax to be towards the middle of analyst predictions, a notable decrease from the 268.8 million pounds reported last year. The company noted a 32% year-to-date sales rate increase driven by incentives, though activity has since moderated.
