Vistry Group, one of Britain's largest housebuilders, has announced it expects to post a pretax loss of £30 million for the first half of 2025, driven by heavy discounting on unsold homes and weakening market conditions. The company's shares fell 8% following the warning, which also revealed the departure of its finance director.
Discounting and Unsold Homes
Vistry, formerly known as Bovis, had £600 million worth of unsold private homes at the start of the year. Through aggressive price cuts, it has reduced that inventory to less than £300 million, with £190 million of the reduction expected to complete by December. The average discount offered to private buyers rose to 7.1%, up from 1.4% in the same period last year.
Adam Daniels, who became chief executive three months ago, has pushed through these price cuts to shift homes that are not selling despite Britain's housing crisis. The company has also slowed or delayed construction on some sites.
Market Conditions and Losses
Vistry's expected £30 million pretax loss for January to June is worse than its May forecast of a significantly reduced profit. The company attributed the decline to increased uncertainty and lower customer confidence caused by the Middle East war, as well as rising mortgage rates following higher inflation. "After a positive start to the year, market conditions worsened in the second quarter," Vistry said.
The housebuilder does not anticipate a short-term recovery: "Although we would welcome some demand-side stimulus, we are not anticipating a significant change in open market conditions in the second half, or in early 2027."
Cost-Cutting and Leadership Changes
To reduce costs, Vistry is seeking £25 million in annual savings through voluntary redundancies—less than 5% of the workforce have applied so far—and more selective hiring. The company directly employs 4,400 people, according to its last annual report.
Chief financial officer Tim Lawlor will leave in October after four years to take a similar role in a large privately owned business in a different sector.
Shift to Social Housing
In recent years, Vistry has shifted towards building social homes in partnership with housing associations, local authorities, and build-to-rent investors. It is negotiating new framework deals with 10 of its main partners. However, there are concerns over the timing of state funding under Labour's £39 billion social and affordable housing programme, for which Vistry's partners have applied. The grants are expected in the coming months.
Analyst Criticism
Anthony Codling, housing analyst at RBC Capital Markets, questioned Vistry's latest guidance. "Why not take the opportunity to suggest that changes at the top of their biggest client [the UK government] may slow the deployment of the social and affordable housing programme?" he said. "Why report that market conditions declined in the second quarter without suggesting this might have a negative knock-on impact on Q3 and Q4? This was his [Daniels'] opportunity to score a goal from the penalty spot whilst there was no goalkeeper between the posts. This was not just a missed goal, it was an own goal."
Past Challenges and Legal Issues
After a string of profit warnings in 2024, mainly due to losses at its south division, Vistry reorganized its operations to regain investor trust. However, its share price has fallen nearly two-thirds over the past year. The company rebranded from Bovis, which had been criticized for poorly built houses a decade ago. It acquired Galliford Try's housebuilding division in a £1.1 billion deal in 2020 and bought smaller rival Countryside for £1.3 billion two years later.
Vistry and its Countryside Partnerships division are among large housebuilders facing a multibillion-pound class action lawsuit over allegations of colluding to raise prices for homebuyers.
