Vistry faces major test to hit profit targets as shares stumble

Britain’s largest housebuilder, Vistry, is holding firm to its profit forecast for 2025, despite mounting scepticism in the stock market following a tough first half to the year. The group, which owns the Bovis and Linden Homes brands, maintained its pledge to deliver a year on year increase in adjusted pre tax profits. Last year, Vistry achieved £264 million in profits and is targeting about £273 million for 2025, according to industry analysts.

However, the journey has not been smooth. Vistry’s adjusted pre tax profit dropped to £80.6 million for the first six months of 2025, down a third from £120.7 million a year earlier. Reaching the annual profit goal now necessitates generating 70 per cent of profits between July and December, a tall order in a sector where a typical second half delivers just over half of annual earnings. The market reacted sharply, with Vistry shares falling 5.7 per cent to 569¼p, continuing a year long downward trend that has seen the share price halve.

Vistry built over 17000 homes in 2024, making it the industry’s largest player. The developer’s strategic shift towards providing most of its homes for housing associations and institutional landlords, rather than the private for sale market, brought initial praise. However, last autumn’s underestimation of costs on nine southern English sites to the tune of £165 million damaged investor confidence. Fixed price contracts with housing associations and major build to rent operators have left Vistry with less margin for error than traditional open market sales, exposing them to profitability challenges when costs escalate.

The company’s leadership ascribes the lacklustre first half of 2025 to a focus on stabilisation after a series of profit warnings at the end of last year. Completions, sales rates, order book, site numbers, land purchases and overall profits were all down on a year ago. Statutory pre tax profits, which included significant charges such as a Competition and Markets Authority fine, slumped by more than half to £40.9 million. Meanwhile, the order book shrank by 16 per cent to £4.3 billion, and home completions fell by 12 per cent to 6889 in the first six months, compared with 7792 in 2024. Three quarters of these homes were delivered to partners in the affordable or rental housing sector.

Greg Fitzgerald, Vistry’s chief executive and executive chairman, claims that the performance was in line with expectations, citing delays in affordable housing funding and a shift in behaviour from large rental landlords, who are favouring established portfolios over new properties. He remains “very confident” of an upturn in the second half of the year, highlighting stronger than necessary demand from affordable housing providers since July.

Vistry’s position as a bellwether for the UK housing market is now under scrutiny. The stakes are high as it works to deliver on its promises, regain market confidence and fully realise the benefits of its partnerships model. Whether it can translate second half optimism into concrete profits will be watched closely by investors and rivals alike.