On January 15, UK housebuilder Vistry maintained its 2024 earnings forecast despite issuing three profit warnings since October. The company announced operational restructuring, reducing divisions from six to three following cost challenges in the previous year. Market conditions were highlighted as uncertain amidst affordability and economic concerns within the housing sector.
Concerns lingered regarding the British housing sector's recovery pace due to various factors. However, a sudden decline in December inflation and expected mortgage rate hikes by banks were seen as potential benefits. Vistry's shares surged by 10% to 566.50 pence on Wednesday as housing stocks rallied due to improved inflation figures and positive perceptions of the company's restructuring efforts.
Vistry's stock had dropped about 38% in 2024. The company clarified its financial outlook, anticipating adjusted pre-tax profit of approximately £250 million and revenue around £4.4 billion, surpassing market estimates. Vistry's year-end net debt was £180 million, £20 million less than predicted. Home completions increased by 7% to 17,200.
Investec's Aynsley Lammin referred to the stock surge as a "relief rally" for Vistry, attributing it to better inflation data and improved decision-making from the restructuring process. Vistry had issued profit warnings due to cost overruns in its South Division, projecting a £165 million impact. Peer company Persimmon reported 2024 earnings at the upper end of market expectations on Tuesday, driven by enhanced sales and pricing power.