Vistry Share Price Dropped 6.19% After Its Latest Trading Update

The Vistry Group PLC (LON: VTY) share price dropped 6.19% after releasing a trading update for the period from 1 July 2023 to the present date. The house-building company revealed that it expects to generate an adjusted profit before tax of £450 million for the fiscal year 2023.

The profit target excludes the financial impact of transitioning the Housebuilding business to the Partnerships model, a transition that had been previously communicated. The transition is expected to cost the company about £40 million in the current year, leading to an adjusted profit before tax of £410 million. 

Vistry also reported that it continues to experience robust demand for mixed-tenure affordable homes from various entities, including Registered Providers, Local Authorities, and the Private Rented Sector. The demand underlines the company's success in differentiating its business model.

The group noted a slowdown in private sales as the usual pickup in sales that starts in September did not occur, and sales remained muted. The company observed a slowdown in open-market private sales during the summer months, primarily due to the higher interest rate environment and inflationary pressures on household incomes. 

Vistry Group introduced the Home Stepper shared equity product in partnership with Sage Homes in June, with an initial portfolio of around 800 shared ownership homes nationwide. The company has reported over 270 reservations for this product to date.

Since July 1, 2023, the company's average weekly sales rate is 0.60 compared to 0.64 in 2022 and 0.76 year-to-date compared to 0.77 in 2022. The forward order book for the Group totals £4.3 billion, with 100% of private units for the fiscal year 2023 already forward sold.

Vistry Group has been engaged in constructive discussions with its key supply chain partners to agree on cost reductions for existing and future contracts. The company's extensive visibility into forward sales, build programs, and revenues in the Partnerships model enables a higher level of work continuity for suppliers. 

The Group continues its work on fire safety remediation and is confident its fire safety provision will cover the associated costs per its obligations. As announced in September, Vistry Group plans to initiate an initial ordinary share buyback program valued at up to £55 million. 

Vistry share price. 

The Vistry share price dropped 6.19% to trade at 680.6p, from Friday’s closing price of 725.5p.