ii view: Vistry shares crash to lowest since 2008

AGM trading update from 1 January to 12 May

• Year-to-date sales up 32% from 2025
• Forward order book of £4.5 billion, down from 2025’s £4.6 billion

Guidance:

• Expects full-year profit toward the middle of analyst estimates of £168 million to £268 million
• Expecting a net cash position more than £100 million as of 31 December 2026

ii round-up:

Vistry Group today pointed to lower annual profits as the affordable homes builder paused share buybacks as part of management efforts to target cash generation and reduce group debt.

The scale of incentives needed to increase sales by almost a third so far in 2026 are now expected to leave first-half profit significantly lower than last year. However, an improved margin mix on active sites and increased demand from its affordable housing partners should see second-half profits similar to H2 2025.

As such, annual profit is now expected to be around the middle (£218 million) of City forecasts of between £168 million and £268 million. That compares with £269 million last year.

Shares in the FTSE 250 housebuilder fell 12% having come into this latest news having already nearly halved in 2026. That’s similar to mid-sized housebuilding rival Crest Nicholson Holdings. The FTSE 250 index is up by less than 1% year-to-date.

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Vistry partners with organisations such as local authorities and housing associations to develop mixed tenure homes like shared ownership as part of a focus to build more affordable homes.

A 2026 sales rate per week per site of 1.20 compares to 0.91 last year, although the operator of brands from Bovis to Linden and Countryside Homes flagged some moderation in recent weeks following the war in the Middle East.

A forward order book valued at £4.5 billion is down from £4.6 billion last year, although £2.3 billion is set for delivery in the current financial year versus a forecast of £2.1 billion this time last year.

Management initiatives to increase cash generation include slowing some site builds towards the appropriate sales rate and adopting higher hurdles for land buying. Such actions support the board’s forecast for year-end net cash of more than £100 million, an expected improvement from net debt of £144 million as of late December 2025.  

Vistry reiterated its focus on partnerships and its differentiated business model, although relatively new head Adam Daniels is leading an operational review with findings expected no later than half-year results due on 24 September.

ii view:

Started in 1965 and formerly Bovis Homes, Vistry today partners more than 90 organisations like local authorities and housing associations in developing mixed tenure affordable homes such as rent-to-buy. Vistry operates via six divisions across England, supported by three factories producing items such as timber frame panels and roof trusses.

For investors, a war in the Middle East and high energy price now cast a shadow over inflation and interest rate expectations. Higher energy prices may well feed through to increased material costs, potentially hurting profits. The remaining £29 million of an original £130 million share buyback programme has been paused, while a prospective dividend yield of 1% is comfortably below 5% plus forecast at rivals Persimmon and Taylor Wimpey.  

• eyeQ: the macro view for Vistry shares
• Stockwatch: a FTSE 250 company in buying territory
• The Income Investor: prospects for Taylor Wimpey and Persimmon

On the upside, a focus on cash is expected to see the group turn net cash positive come late December. Government support for affordable housing and partners continues to be seen. A review of operations is now underway via the relatively new CEO, while previous sector M&A activity including Barratt’s acquisition of Redrow should not be forgotten.

In all, a differentiated business model, focus on affordable housing and much lower share price will undoubtedly attract speculators. However, a series of previous operational challenges and this latest caution on profits will likely keep more cautious investors on the sidelines. 

Positives:

• Differentiated business model
• Focusing on reducing group debt

Negatives:

• Concerns for inflation and interest rates
• Increased employer tax costs

The average rating of stock market analysts:

Hold