Vistry Group Shares Tumble Following Profit Downgrade

Investing.com — Shares of Vistry Group (LON:VTYV) tumbled more than 16% on Tuesday after the company issued a trading update. Vistry announced its adjusted profit before tax for the fiscal year 2024 is now expected to be about £250 million, a downgrade from a previous estimate of around £300 million.

Reasons for the Downgrade

The profit warning is largely attributed to delays in concluding key year-end transactions and completions. Several agreements with partners that were supposed to finalize in FY24 will now extend into FY25. Additionally, Vistry opted to forgo certain proposed transactions due to unfavorable commercial terms.

Future Outlook

Vistry anticipates more favorable opportunities emerging in the coming year. The company noted, "We have also seen a delay to some open market completions expected in FY24 which has, to a lesser extent, contributed to the profit impact."

Despite these setbacks, Vistry highlighted continued demand from its partners, with over 70 Partner Funded transactions completed in the fourth quarter, involving 35 partners such as Registered Providers, Local Authorities, and Private Rented Sector providers.

Financial Position

The impact of the delays is reflected in Vistry's net debt position, which is expected to reach approximately £200 million by the year's end. Although there was a significant cash inflow in the final weeks of the year, the deferred income has resulted in a heavier debt load than initially anticipated.

CEO's Statement

Greg Fitzgerald, executive chairman and chief executive at Vistry, remarked, "Today's announcement and the financial outcome for FY24 is disappointing. Our top priority for 2025 is to continue building and delivering high quality mixed tenure new homes for our partners and private customers, and to do our part in addressing the country's acute housing shortage."