Investors in Vistry (VTY) awoke on Christmas Eve to a stocking full of coal. The housebuilder had delivered a third profit warning, slashing its expected pre-tax profit by a further £50mn and sending the share price spiralling. The concern now is that problems highlighted in October might be more widespread than first thought.
The first two profit warnings focused on cost overruns in the Southern division. However, the most recent was attributed to some of its agreements with partners taking “longer to conclude”. The housebuilder added that it had "chosen not to proceed with a number of proposed transactions where the commercial terms on offer were not sufficiently attractive”. Vistry will provide another trading update on 15 January, with shareholders apprehensive.
Before the latest warning, Vistry had been targeting a net cash position by the end of the year, however it told investors that delays in partnership agreements and open market completions meant that it expected "closing net debt to be in the region of £200mn".