Housebuilder expects £40m hit to profit amid “continued slowdown” in private market
Vistry has announced it will cut around 200 jobs as a result of its restructuring to focus on affordable housing partnerships.
The housebuilder also said its plan, which will see it close five regional business divisions, will mean a £40m hit to its profit.
In an update today, Vistry said it now expects to make £410m in adjusted pre-tax profit in 2023, rather than £450m as originally stated. Vistry said integrating its housebuilding division into its partnerships arm is expected to save £25m a year, on top of £60m annual savings due to the acquisition of Countryside in 2022.
Vistry also said that the summer’s slowdown in open market private sales, which it put down to higher interest rates and cost inflation, has continued into the autumn.
It said: “This trend has continued and we have not seen the seasonal increase in private sales since September that we had expected.” The group’s average weekly sales rate since 1 July has been 0.60 units, compared to 0.64 the previous year.
It said however that it has seen continuing demand for mixed-tenure affordable housing from housing associations and councils.
Vistry has previously said it is targeting 25,000 homes a year under its new strategy, which would be a doubling of its current build rate. It built 6,050 homes in the first six months of 2023.
Vistry said it appreciated the “productive” discussions it has had with supply chain partners, in which it has sought to agree cost reductions for all existing and future contracts.
It said: “With a high level of visibility on forward sales, build programmes and revenues in the partnerships model, we can offer greater continuity of work to our suppliers and, working with them, can increase the overall rate of delivery on our sites and supply of much needed affordable mixed tenure homes.”
Vistry said its average net debt for the 2023 calendar year is now forecast to be higher than previously expected at £450m. But said net debt should reduce to £100m by the year end.