Vistry Group, one of Britain’s biggest housebuilders, has slashed its annual profit expectations after half-year losses ballooned as it grappled with a £600m pile of unsold homes.
asserted
it → slash → homes
Adam Daniel, the new chief executive of the Bovis Homes and Countryside owner, insisted that “the issues can be fixed”, as he set out a detailed turnaround plan that involves pulling out of private sales in south-east England and slimming operations to turn Vistry into a more focused, 12,000-homes-a-year builder.
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that → insist → builder
Further job losses loom, however, after Vistry announced new cost savings of £50m, on top of a £25m voluntary redundancy programme and hiring freeze earlier this year.
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Vistry → loom → programme
It said it reduced its workforce to 4,150 at the end of July, with 350 people leaving since the summer, according to PA.
uncertain
people → say → PA
The company is closing some regional offices, moving from 25 to 12 regions.
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company → close → regions
Vistry reported a loss before tax of £661.3m for the first six months of the year, versus a profit of £40.9m the year before, dragged back by a £475m writedown and a £73m provision for building safety works.
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Vistry → report → works
For the year as a whole, it now expects to post an adjusted profit before tax of £165m, after making an adjusted loss of £83.3m in the first half, far worse than expected.
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it → expect → half
The company completed 6,304 homes, down by 8% from a year earlier.
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company → complete → %
After resorting to steep discounts to sell a £600m pile of houses it is now left with £220m of unsold properties.
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it → resort → properties
In July, it said the average discount offered to homebuyers was 7.1%.
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discount → say → homebuyers
Half-year revenues fell by 9% to £1.7bn while Vistry’s debt jumped to £468.8m from £293.1m.
Vistry blamed “disappointing summer sales of private homes” and withdrawals or renegotiation of deals to build affordable homes.
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Vistry → fall → homes
It has also been hit by cost inflation of 3% to 4% as a result of the Iran war, which has driven fuel prices sharply higher.
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which → hit → prices
In August, the company received £350m funding from the government to construct 3,000 affordable homes, the largest slice awarded under the £39bn social and affordable homes programme, and is one of 33 strategic partners that take part.
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that → receive → part
Vistry said it had already started building those homes.
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it → say → homes
Daniels, who took the helm in April, laid out a measures such as reducing the land bank from 51,000 to 36,000 plots and a reorganisation of the business, simplification of product range, brands and operating processes, and greater exposure to the north, Midlands and west of England.
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who → take → England
Daniels said: “We have made substantial progress in refocusing the business and delivering on our immediate priority to improve cash generation.
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We → say → generation
In parallel, we have now completed an extensive review of our business and operating model including how best to position the group for future success.”
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we → complete → success
The Vistry share price plunged more than 8% in early trading.
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price → plunge → trading
Victoria Scholar, head of investment at interactive investor, said: “The housebuilder has been faced with macro headwinds from this year’s energy shock leading to cost pressures, weaker affordability and consumer confidence amid the higher-for-longer interest rate backdrop.
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housebuilder → say → backdrop
“Shares had already had a painful run lately, shedding close to 60% year-to-date before this morning’s further sharp slide, underscoring the challenges at hand for its boss and the need for a drastic turnaround.”
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Shares → have → turnaround
The Aporia
