Vistry Group PLC (LSE:VTY) shares fell 9% to 229.6p after it warned of an expected first-half loss as new chief executive Adam Daniels accelerated measures to cut debt, reduce stock and reshape the housebuilder's operations.
The partnerships-focused housebuilder said it expects a loss before tax of about £30 million for the six months to 30 June after taking a £50 million hit from actions including heavier discounts on slower-selling homes, asset sales and reductions to its landbank.
Excluding those measures, it would have made about £20 million profit before tax, which would still have been a huge drop from the £260 million-plus in the past two years.
The first half was also affected by fewer deals with housing association partners, delays to land sales and higher finance costs.
Full-year guidance was left unchanged for adjusted PBT of around £200 million as management are confident of a better weighting of completions in the second half, funds flowing from the Strategic Affordable Housing Programme, some delayed transactions from H1, a slower rate of actions to generate cash, a reduction in overheads, more land sale profits and improved margins from new sites. Reported full-year PBT will be affected by significant one-off items, however.
About 6,100 home sales were completed during the period, down from 6,889 a year earlier, while average discounts on private sales rose to 7.1% from 1.4%.
Vistry said it had more than halved the value of unsold private homes under construction to below £300 million and sharply reduced land buying during the second quarter.
Net debt stood at £470 million at the end of June, while average daily net debt during the half was £799 million.
Despite weaker open market conditions in the second quarter, which it attributed to lower consumer confidence following the Middle East conflict, Vistry said it still expects to end 2026 with net cash of more than £100 million, helped by pausing its share buyback programme.
Daniels, who was promoted in April, said: "We are treating 2026 as a transition year to reposition the business to operate with significantly and sustainably lower financial leverage and healthy profitability."
He is currently leading a review of the group's strategy and execution, with findings to be revealed in September.
"I remain absolutely committed to our differentiated partnerships strategy and I believe there is a significant opportunity to develop a more focused Vistry with improved profitability, a stronger balance sheet, higher returns on capital, and more consistent delivery," he said.
Alongside the trading update, Vistry notified that chief financial officer Tim Lawlor is leaving "to take up a CFO role in a large privately-owned business in a different sector".
He will remain with the company until October, following publication of the HY results and completion of Daniels' review.
Broker Stifel noted that the half year trading update had been brought forward from 16 July and characterised the profit warnings as resulting from "actions to generate cash, mainly from liquidating inventory, and some slippage of transactions from H1 to H2 [hitting] profitability more than originally expected".
"We had expected H1 PBT of around £40m, substantially less than 2025's level of £81m, but management now guides to a loss of £30m."
Analysts at Panmure Liberum said: "The new CEO clearly appreciates that the group needs to take on board a considerable amount of short-term pain (1) to address the indebted balance sheet, (2) to address the cost base, and finally (3) to address the terms of certain unfavourably structured Partnership contracts."
With full-year guidance maintained with a significant but unspecified level of one-off items, "the market is likely to initially respond negatively to this update".
** UPDATE: Adds more detail, share price, broker comments **
