Vistry shares plunge on profit warning, citing deal delays and rising net debt

Investing.com — Shares of Vistry Group (LON:) tumbled more than 16% on Tuesday following the company’s trading update in which it said that its adjusted profit before tax for the fiscal year 2024 is now expected to be about £250 million, marking a downgrade from the earlier forecast of around £300 million.

The profit warning stems primarily from delays in concluding key year-end transactions and completions, according to a statement released by the company.

Vistry said that several agreements with partners, initially slated to be finalized within FY24, have faced delays and are now expected to close in FY25. 

The company also decided against proceeding with certain proposed transactions, citing unfavorable commercial terms. 

Vistry stated that it anticipates more attractive opportunities to emerge in the coming year. “We have also seen a delay to some open market completions expected in FY24 which has, to a lesser extent, contributed to the profit impact,” the company said in a statement.

Despite the setbacks, Vistry emphasized ongoing demand from its partners, flagging that over 70 Partner Funded transactions were completed in the fourth quarter alone, involving 35 partners such as Registered Providers, Local Authorities, and Private Rented Sector providers.

The financial impact of the delays is also evident in the company’s net debt position, which is now expected to close the year at around £200 million. 

While Vistry said there was a significant cash inflow in the final weeks of the year, the postponed income has left the group with a heavier debt load than previously anticipated.

“Today’s announcement and the financial outcome for FY24 is disappointing.  Our top priority for 2025 is to continue building and delivering high quality mixed tenure new homes for our partners and private customers, and to do our part in addressing the country’s acute housing shortage,” said Greg Fitzgerald, executive chairman and chief executive at Vistry in a statement.