Housebuilder Vistry has warned it expects to slump to a half-year loss amid an overhaul and said difficult market conditions are not set to improve until next year.
The group saw shares tumble as much as 12% in early trading on Wednesday after it forecast a loss of around £30 million in the first half of the year, compared with profits of £40.9 million a year ago.
It said this follows tough trading and the impact of “cash generation actions” being taken by new chief executive Adam Daniels, such as incentives and discounts and ramping up asset sales.
Vistry has also recently completed a voluntary redundancy programme, which saw less than 5% of its 4,500 directly-employed workforce leave.
This delivered savings of £25 million, according to the firm, with more cost cuts on the way under the overhaul led by Mr Daniels.
It said: “In addition, we expect to identify and achieve further efficiencies as we conclude the balance of the CEO review and organise the business in the right structure to achieve our future goals.
“The cost savings that are implemented this year will generate a full-year benefit in 2027.”
Vistry also announced the departure of its chief financial officer, Tim Lawlor, who will leave in October to join a “large privately-owned business in a different sector”.
The builder said market conditions had worsened between April and June due to “increased uncertainty and lower customer confidence triggered by the Middle East conflict”.
It cautioned: “Although we would welcome some demand-side stimulus, we are not anticipating a significant change in open market conditions in the second half, or in early 2027.”
Despite the first-half loss, Vistry said it remained on track with expectations for underlying pre-tax profits of £200 million – but this is excluding any impacts from the chief executive’s review, which it has said is set to lead to “further one-off profit impacts”.
Mr Daniels will outline the results of the review at half-year results in September.
He said: “In the three months I have been in the role, I am encouraged by the progress we have made, and continue to make, on re-focusing the business.
“We are taking the necessary decisions to position Vistry for future success.”
Vistry’s update showed it completed around 6,100 homes in the first six months, down from 6,889 a year earlier.
Mr Daniels replaced former executive chairman Greg Fitzgerald, who left in March.
The group announced in March that Mr Fitzgerald was retiring and that it was splitting his executive chairman role, with the former boss leaving with immediate effect “by mutual agreement”.
Mr Daniels was previously executive chairman of one of Vistry’s two largest operating divisions.
Dan Coatsworth, head of markets at AJ Bell, said: “Investors have been getting jumpy about the state of the housebuilding and broader construction industry.
“Raw material and labour cost pressures have haunted the sector of late.
“New boss Adam Daniels strikes an optimistic tone, but he’s putting on a brave face in what’s clearly a tough market.”