Vistry has seen its profits fall significantly for the last financial year which was severely impacted by cost reporting issues at its South division.
The trading update for the year ending 31 December 2024 saw the partnership homes specialist’s pre-tax profit decrease from £293million in 2023 to £105million in 2024.
Throughout the last financial year, Vistry issued three profit warnings, scaling down its original forecast of £430million. Vistry’s trading update says that the cost reporting issues at its South division had a total impact of £165million on the company, with a £91.5million impact on operating profit in 2024 and £53million in future years.
In January, the housebuilder announced that it had managed to avoid a fourth profit warning and had undergone an operational restructure which would allow CEO and executive chair, Greg Fitzgerald, to get closer to the business.
Greg Fitzgerald commented: “2024 was a challenging year for the Group resulting in a disappointing financial performance, despite strong growth in completions and revenue. We have concluded a rigorous set of reviews and year-end procedures with no further issues being identified, and much work has been done to ensure the Group has the right people, structure, systems and controls in place to move forward with confidence.
Despite the drop in profits, Vistry saw its total completions rise by 7% to 17,225 units in 2024 compared to 16,118 the previous year. Its partner-funded completions rose by 18% year-on-year while open-market completions fell by 15%.
The Group saw its building safety provision increase by £117million for the financial year, mainly as a result of further buildings being identified as needing remediation. This resulted in a net increase in the total provision to £324.4million, up from £289million in 2023.
Vistry’s net debt also increased by over 100% to £180.7million from £88.8 the previous year.
Greg Fitzgerald continued: “Our focus is now firmly on the future and executing our differentiated partnerships strategy. We are pleased to see the government bring forward a further £2billion of much-needed funding for affordable homes and will be seeking to progress as quickly as possible with our partners to deliver quality new homes across the country. We continue to drive a capital-light, high return model, with a targeted 40% return on capital employed in the medium term.”
“Finally, demonstrating that the Group retains a strong financial position remains a top priority for 2025 and we expect to deliver improved cash generation and reduce net debt through the year.”
