Tuesday, February 20, 2024
HomeftseVistry lowers profit forecast and announces job cuts as part of restructuring

Vistry lowers profit forecast and announces job cuts as part of restructuring

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British home builder Vistry has announced a revision to its annual profit forecast, citing a decrease in site margins. The company also revealed plans to cut approximately 200 jobs as part of a restructuring effort. Vistry, which is listed on the FTSE 250 index, has shifted its focus towards working with local government authorities and housing associations to construct affordable homes through its Partnerships business, moving away from its traditional Housebuilding segment.

The decision to offer price discounts and pre-sale offers for its Housebuilding sites prompted Vistry to reassess the margins of its sites, resulting in a revision of its profit forecast. The company now expects its adjusted pre-tax profit for the year ending December 31 to be £410 million ($498.2 million), compared to its original target of over £450 million.

Vistry, known for being one of the largest British house builders in terms of the number of homes built, has experienced a slowdown in sales during the summer months. This has been attributed to higher interest rates and inflationary cost pressures on household incomes. The company’s efforts to focus on its Partnerships business and integrate it with its Housebuilding operations have led to the decision to cut jobs. Vistry expects that the restructuring will result in annual savings of £25 million.

The announcement by Vistry reflects the challenges faced by the UK housing market in recent years. Rising interest rates and inflationary pressures have put strain on consumers’ finances, leading to a slowdown in sales. Additionally, the company’s decision to shift its focus towards affordable housing demonstrates its commitment to addressing the country’s housing crisis.

Vistry’s revised profit forecast and job cuts may cause concern for investors, as the company faces challenges in maintaining profitability. However, the decision to realign its business towards affordable housing could be seen as a positive step, given the pressing need for more affordable homes in the UK.

It remains to be seen how Vistry’s restructuring efforts will impact its operations and future financial performance. As the company navigates through the challenges of the housing market, the focus on building affordable homes in partnership with local authorities and housing associations could potentially position Vistry as a key player in addressing the nation’s housing needs.

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