In its latest trading statement, the group said that it has recently become aware that within one of its six divisions, the South Division, the total full-life cost projections to complete nine out of its 46 developments, including some large-scale schemes, have been understated by around 10% of the total build costs.
Vistry said: “The estimated one-off impact of adjusting for the revised development cost assumptions reduces the board's expectations for adjusted profit before tax for FY24 by around £80m, for FY25 by around £30m, and FY26 by around £5m. The reduction in expectations in these three years relates to overall cost estimates across the full life of the developments. As a result, the board now expects group adjusted profit before tax in FY24 to be around £350m.
“We believe the issues are confined to the South Division and changes to the management team in the division are underway. We are commencing an independent review to fully ascertain the causes.”
However, the group says that it still expects to deliver more than 18,000 total completions in the year FY24 and has adopted a new partnerships strategy which has seen completions and profits rising in recent times.
It says: “The group is confident in its unique partnerships strategy. Notwithstanding the one-off adjustment announced today, we remain committed to delivering a strong increase in high-quality mixed tenure housing, our medium-term target of £800 million adjusted operating profit, and £1 billion of capital distributions to shareholders.”
