FTSE 250 housebuilder Vistry has announced a pre-tax loss of £661m for the six months ending June, a significant shift from the £41m profit reported in the previous year. This loss follows a review by new chief executive Adam Daniels, which revealed that the company's assets were worth £475m less than previously thought.
Mr Daniels informed shareholders on Thursday that the asset write-down, combined with delays in housebuilding projects and the cost of a building safety tax, contributed to the financial reversal. The company also cited significant discounting on its open-market homes to clear stock and an additional £73m set aside for the building safety levy as factors.
In response to these challenges, Mr Daniels stated that Vistry must immediately change course by drastically reducing its output and simplifying operations. He indicated that the business needs to be "resized, simplified and repositioned to deliver lower leverage, stronger cash conversion and more sustainable returns."
Vistry built 6,304 homes in the six months to June, an eight per cent decrease year-on-year, with revenue falling by nine per cent to £1.7bn. The company also expects a revaluation of its land bank to reduce full-year profits by £250m, leading to a revised full-year adjusted profit target of £165m, down £40m.