Housebuilder Vistry today revealed it expects a £40 million hit to its profits and the loss of 200 jobs as it shuts down its struggling private housebuilding arm to focus solely on affordable housing partnerships.
The FTSE 250 firm revealed plans to close down its private housebuilding arm last month, which was hit by skyrocketing interest rates. It will merge the legacy Vistry and Countryside businesses into one segment and end private housing sales, which brought in £1.4 billion in first-half revenue.
Today, it revealed the slowdown in private sales has continued.
“We have not seen the seasonal increase in private sales since September that we had expected", Vistry said
The builder has now revealed the impact of the transition in strategy on its profits and workforce. Its profits are set to be £40 million lower because of the change, as its houses will be sold at lower prices, and it will cut 200 jobs, having already laid off 4% of its more than 3,000 staff when it merged with Countryside.
Vistry also opened negotiations with its suppliers to cut costs.
“We appreciate the productive discussions we have had in recent weeks with our key supply chain partners to agree cost reductions for all our existing and future contracts,” Vestry said. “With a high level of visibility on forward sales, build programmes and revenues in the partnerships model, we can offer greater continuity of work to our suppliers and, working with them, can increase the overall rate of delivery on our sites and supply of much needed affordable mixed tenure homes.”
Investec Analyst Aynsley Lammin said there were "no big surprises" in the announcement, but that the tone was "more cautious".
Shares lost 4.1% to 695.3p early this morning.
