Housing developer Vistry (VTY) dealt shareholders another body-blow last week when it revealed (8 November) that charges for its understatement of costs on some sites would be higher than originally forecast.

On 8 October, after an extensive internal review of its operations, the FTSE 100 firm warned earnings for this year, next year and 2026 would be impacted by erroneous build cost calculations on nine developments in its South Division, ‘including some large-scale schemes’.

The company initially cut its 2024 pre-tax profit forecast from £430 million to £350 million while shaving £30 million off its 2025 forecast and £5 million off its 2026 forecast for a total cost of £115 million.

It has now updated that guidance, reducing the current-year forecast by another £25 million and lowering its 2025 and 2026 forecasts by £20 million and £5 million respectively taking the total hit to £165 million.

Russ Mould, investment director at AJ Bell, commented: ‘It seems Vistry’s big pivot into affordable housing and regeneration over recent years caused some ruptures and the management in place for this problem child of the business, exclusively drawn from the traditional housebuilding operations, have dropped the ball in a big way.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Ian Conway) and the editor (Tom Sieber) own shares in AJ Bell.

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