Vistry to cut jobs and more than halve regional network after hefty losses
Housebuilder Vistry has warned over more job cuts as it looks to save another £50m after slumping to a half-year loss of over £660m and warning over full-year profits.
The group’s new boss Adam Daniels announced sweeping changes to turn around the troubled builder’s fortunes, including cutting its regional operations from 25 to 12 and leaving the private home sales market in the South East.
The overhaul will lead to further job losses among its workforce of around 4,150 as well as site closures, but the firm is not revealing how many will be affected.
Around 350 workers have already left the group since the summer including some departures under a recent voluntary redundancy programme, which delivered savings of £25m earlier this year.
The latest cost-cutting efforts come as Vistry reported pre-tax losses of £661.3m for the six months to June 30, against profits of £40.9m a year earlier after taking a £475m write-down and another £73.2m provision for building safety on high rise properties in the wake of the Grenfell Tower tragedy.
On an underlying basis, it reported pre-tax losses of £83.3m against profits of £80.6m a year earlier.
Vistry gave an alert over its full-year outlook, cutting its guidance to around £165m from a previous forecast of £200m, but this is excluding a £40m hit from delayed deals and some £470m in write-downs expected at the full-year stage.
The group looked to reassure that it did not expect to need to launch an investor cash-call and has the support of lenders, who have waived certain banking covenants due to the swingeing overhaul announced.
Mr Daniels said the actions will see the business become much smaller but more focused, slashing its new homes target to around 12,000 completions a year.
Speaking in a statement to the London Stock Exchange, Mr Daniels, said: “Since taking over as chief executive in April, we have made substantial progress in re-focusing the business and delivering on our immediate priority to improve cash generation. In parallel, we have now completed an extensive review of our business and operating model including how best to position the group for future success, the conclusions of which we are communicating today alongside our half year results.
"The review confirms that Vistry has strong fundamentals: a differentiated mixed-tenure model, deep partner relationships, a quality product, exposure to structurally attractive affordable and partner-backed housing markets and highly motivated people.
"Whilst the challenges we have experienced in the last couple of years have been exacerbated by market headwinds, the review has also made clear that our execution, regional discipline and capital allocation have not been consistent enough.”