In a trading update today, Vistry said that full-life cost projections to complete nine out of the 46 developments in its South Division had been understated by approximately 10% of the total build costs.
The estimated impact of adjusting for the revised development cost assumptions reduces the board's expectations for adjusted profit before tax for the current financial year by around £80m, plus a further £30m in financial year 2025 (FY25), and £5m in FY26.
It appears that those responsible for the error are being dealt with.
“We believe the issues are confined to the South Division and changes to the management team in the division are under way,” the company said. “We are commencing an independent review to fully ascertain the causes.”
Vistry still expects to complete more than 18,000 units in FY24 and continues to target a net cash position as at 31st December 2024 (2023: net debt £88.8m).
“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 £800m adjusted operating profit, and £1bn of capital distributions to shareholders,” the company said.
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