Vistry’s financial performance in 2024 was scarred by the revelation in the autumn that costing errors had been uncovered in its southern division, costing it £105m in the year and £165m over three years.
As a result, Vistry’s pre-tax profit for 2024 fell 64% to £104.9m (2023: £293.0m) on revenue up 6% at £3,779m (2023: £2,564m).
Having switched strategy in recent years to focus on partnerships – acting as a builder for third parties rather than a developer speculating on the open market – Vistry has yet to benefit from the slight improvements int eh housing market that are reportedly beginning to emerge.
The group sales rate of 0.59 (2024: 0.81) sales per site per week so far in 2025 is down on 2024, reflecting a low volume of partner funded transactions in the first quarter. Partner funded activity is expected to step up as the new £2bn of affordable housing funding from government is allocated. Partner funded volumes this year are expected to be similar to last, but with strong momentum going into 2026.
Vistry still has old Bovis developments being built out in the open market. “We have seen some uptick in our sales rate in the past four weeks and expect this to continue to improve,” the board said.
Over the past six months, Vistry’s management has re-evaluated the appropriate level of building safety provision, to meet its obligations under the developer remediation contract signed by Vistry in March 2023. As a result, the company has increased its building safety provision by £117.1m in 2024, with a total provision of £324.4m as at 31st December 2024 2023: £289.0m).
The increase reflects a rise in third party claims due to the implementation of regulatory changes, which has broadened the types of issues that are now considered a risk to occupant safety, as well as an increase in the historical time period for which the developer has a responsibility, the board said. Vistry has identified an additional 41 buildings requiring remediation. In addition, there has been an increase in the costs of remediating buildings resulting from increased scope of work and some cost inflation. The company continues to seek recoveries from third parties where possible and recovered £27.2m last year.
The net annual cash costs of building safety this year is expected to be around £65m.
Chief executive Greg Fitzgerald said: “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.
“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 £2bn 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.”
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