Vistry takes £500m hit as new boss downsizes housebuilder

Vistry, a housebuilder, has suffered a massive £500 million hit to its value following the appointment of new CEO Adam Daniels. Daniels revealed that the assets of the FTSE 250 housebuilder are worth £475 million less than previously estimated, resulting in a significant write-down. This write-down, combined with delays in housebuilding projects and the cost of a building safety tax, pushed Vistry into a £661 million pre-tax loss for the six months leading up to June.

This loss is a stark contrast to the £41 million profit recorded during the same period last year. The once-popular housebuilder has seen its share price plummet by nearly 60% this year. In March, the previous chief executive, Greg Fitzgerald, unexpectedly retired, prompting Daniels to announce drastic measures to downsize the firm and simplify its operations.

Daniels emphasized that Vistry needs to "resize, simplify and reposition" to deliver lower leverage, stronger cash conversion, and more sustainable returns. The company's revenue declined by 9% year-on-year to £1.7 billion, with 6,304 homes built, eight percent fewer than the previous year. Daniels identified a "proportion" of the housebuilder's land bank that would not be repurchased, expecting this revaluation to dent full-year profits by £250 million, reducing the adjusted profit target by £40 million to £165 million.

Despite the challenges, Daniels noted that a £350 million affordable housing grant from the government provides hope, with work already underway on these 3,000 homes.