Vistry profits take a hit as it slashes prices to offset a slump in demand
Vistry expects its first-half profit to be ‘significantly’ lower than last year as it ramped up discounts to boost sales.
The group said it had seen a ‘moderation’ in sales in recent weeks ‘reflecting uncertainty’ arising from the Middle East conflict.
The housebuilder said it had increased incentives and discounts to accelerate sales and improve cash generation.
Vistry shares fell 11.23 per cent, or 36.30p, to 289.20p on Wednesday morning, plunging to their lowest level in 14 years.
War across the Middle East has started to create ‘some upward pressure’ on material and, to a lesser extent, labour prices.
The FTSE 250 firm, which had struggled even before the conflict began in late February, said it was delaying or slowing the building of some of its sites, too.
Expectations: Vistry expects its first half profit to come in ‘significantly’ lower than last year
Vistry said it had paused share buybacks to prioritise debt reduction. Average daily net debt in the first half is expected to be higher than the previous year, reflecting higher land payments and delays within housing chains.
It expects a net cash position in excess of £100million by the end of the year.
It expects the level of discounting used and its effect on profit to fall in the second half of the year, with its sales rate increasing by 32 per cent in the year-to-date.
Vistry said: ‘With the benefits of an improved margin mix on active sites and a step up in demand from our affordable housing partners we expect H2 2026 profit to be in line with H2 2025 profit.
‘The Board expects adjusted profit before tax for FY 2026 to be towards the middle of the range of analysts’ forecasts.’
Analysts at Peel Hunt said: ‘Market conditions remain challenging but focus on improving the debt position remains key in the near term.’
It slashed its target price from 525p to 495p on the lower forecasts but maintained its Buy recommendation.
This week, data from Hamptons showed that the share of new-build homes being sold before they are completed dropped to a 12-year low in 2025.
Thirty-three per cent of new homes in England and Wales were sold before construction was finished last year, down from 36 per cent in 2024.
Fewer off-plan sales, combined with higher interest rates, meant housebuilders in England and Wales incurred an estimated £264.5million in additional financing costs last year, Hamptons said.
This equated to an additional £3,125 per new home sold, up from £2,934 in 2024.
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