- Vistry Group
- 09 October 2024 10:17:38
Source: Sharecast
After underestimating build costs on nine schemes in its Southern Division, Vistry said it now expects FY24 adjusted pre-tax profit to be £80m lower at around £350m, a hit of about 20%. FY25 forecasts have also been downgraded by £30m.
Berenberg said that the profit warning doesn't challenge the fundamentals of the partnership business model, but raises questions about what is an achievable and sustainable mid-term profit margin, "which in turn also has an impact on ROCE outcomes", said analyst Harry Goad.
"Secondly, we think this issue raises a traditional industry concern about the risks faced by any housebuilder that is growing volumes at pace given the associated challenge of achieving acceptable and well-balanced outcomes across matters such as build quality, customer service and profitability," Goad said.
The broker cut its target price for the stock from 1,380p to 1,000p and kept a 'hold' rating.
Shares were up 0.3% at 966p by 1015 after tumbling 24% the previous session.