Vistry: cash generation and a strategic reset
Vistry’s update on 5 November will carry greater significance because the group is attempting to rebuild investor confidence after a difficult first half and a substantial strategic overhaul.
Its September results revealed an adjusted pre-tax loss of £83.3 million for the six months to 30 June, compared with a profit of £80.6 million a year earlier. Adjusted revenue fell 9% to £1.70 billion, while completions declined 8% to 6,304 homes. The loss reflected discounting to release cash from unsold private homes and around £50 million of early costs associated with the chief executive’s review.
The reported pre-tax loss was considerably larger, at £661.3 million, after a £475 million goodwill impairment and an additional £73.2 million building-safety provision. Net debt rose to £468.8 million at the end of June, from £293.1 million a year earlier.
Chief executive Adam Daniels is repositioning Vistry as a smaller, more geographically focused specialist in mixed-tenure housing, combining private sales with homes delivered to affordable-housing providers and private rented-sector partners.
The plan includes reducing the group’s operating regions from 25 to 12, cutting its owned land bank from 51,000 to 36,000 plots and targeting approximately 12,000 annual completions over the medium term. Vistry has identified £50 million of additional annual overhead savings, on top of £25 million previously identified, with the combined savings expected to be achieved within two years.
The November update must demonstrate that this restructuring is translating into better cash generation and more disciplined trading.
Vistry reported that open-market conditions deteriorated during the summer as customer confidence weakened and affordability constraints persisted. Its open-market sales rate slowed to 0.3 reservations per outlet per week. The company expects affordable and partner-funded activity to support the second half, but investors will need evidence that these transactions are progressing as planned.
Management expects adjusted pre-tax profit of approximately £165 million for FY2026, excluding strategic review-related items, and around £185 million for FY2027, subject to broadly stable market conditions. It also expects to finish 2026 with a broadly neutral cash position, weaker than previously anticipated.
Investors will therefore be watching closely for progress on the disposal of assets, reductions in work in progress, lower debt and the conversion of Vistry’s forward order book into completed homes.
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