Vistry Group, a UK-based housebuilder, has experienced a significant decline in profits, decreasing by over a third in a year described by the company as “disappointing.” Despite this, the company remains hopeful for a recovery, thanks to the government’s commitment to invest £2 billion in affordable housing.
In response to the disappointing results, Virsty has suspended dividend payments to its shareholders. The company’s stock saw a considerable drop, initially decreasing by as much as 8% before somewhat recovering to a 5.5% decline.
Greg Fitzgerald, Virsty’s CEO, admitted that 2024 was a challenging year but expressed optimism about the government’s pledges to fund 18,000 affordable and social homes. The company aims to capitalize on this initiative to rapidly build quality homes across the UK in collaboration with its partners.
Virsty, which was previously known as Bovis Homes, has shifted its focus towards constructing affordable homes in partnership with housing associations. The company’s adjusted profit before tax decreased by 35% to £263.5 million in the last year, despite the total number of completed properties increasing by 7% to 17,225. However, the number of homes sold on the open market dropped by 15% to 4,592.
The company faces ongoing challenges, including an accounting scandal from November, when it disclosed that cost overruns on building projects were worse than initially thought. Virsty has initiated an operational review in its south division after underestimating total build costs by approximately 10%, resulting in a £165 million write-down that diminished 2024 profits by £91.5 million.
In an effort to prevent future issues, Virsty has conducted a comprehensive review of its procedures and made changes, reduced its workforce by 200 jobs, and paid fewer bonuses after profit targets went unmet. Additionally, the company spent more on building safety repairs, allocating £114.7 million compared to £19.3 million in the previous year, following the government’s directive in the wake of the Grenfell Tower fire in 2017.
Source: https://www.theguardian.com/business/2025/mar/26/uk-housebuilder-vistry-treasury-injection-profits-plummet
