Vistry Group repositions business for lower debt and sustainable growth

Vistry Group PLC (LON:VTY) has announced its half year results for the period ended 30 June 2026

Strengthening the platform: Repositioning Vistry for Sustainable Success

Adam Daniels, Chief Executive commented:

“Since taking over as Chief Executive in April, we have made substantial progress in re-focusing the business and delivering on our immediate priority to improve cash generation. In parallel, we have now completed an extensive review of our business and operating model including how best to position the Group for future success, the conclusions of which we are communicating today alongside our half year results. The review confirms that Vistry has strong fundamentals: a differentiated mixed-tenure model, deep partner relationships, a quality product, exposure to structurally attractive affordable and partner-backed housing markets and highly motivated people. Whilst the challenges we have experienced in the last couple of years have been exacerbated by market headwinds, the review has also made clear that our execution, regional discipline and capital allocation have not been consistent enough. 

These issues can be fixed, and we are taking the necessary steps to ensure the strong performance we have seen across many of our sites is replicated across the Group as a whole. Achieving this has necessitated an urgent focus on increasing operational control, releasing cash, reducing complexity and establishing a base from which we can deliver more consistently. We are committed to entering 2027 on the right footing and following the actions taken, do not anticipate any need to raise equity.  I am pleased to say that we expect to announce the appointment of a high-quality new CFO imminently who will support me with the delivery of our strategy.

We are repositioning Vistry as a specialist mixed-tenure housebuilder that will deliver consistent, cash-backed growth in earnings alongside highly attractive returns on capital. To achieve this the Group will need to be smaller, more focused geographically and with increased discipline and control in operational delivery and allocation of capital. Managed realisation of value from our asset base will support further de-leveraging, ensuring the Group has a robust platform from which to operate.  I am confident Vistry will continue to be the UK’s leading specialist mixed-tenure housebuilder, delivering high-quality Open Market, Affordable and Private Rented Sector homes where they are needed most.

This is the right model for Vistry and one which gives it the potential to thrive, benefitting from structural demand for affordable and mixed-tenure housing. Our product and differentiated offering continue to be valued by customers and partners, reinforcing our leadership in the sector. We are pleased that the recent announcement of the first wave of the Social and Affordable Housing Programme (2026-2036) has given confirmation of future funding totalling £9.58bn to 33 Strategic Partners, 29 of which we currently work with.  Vistry was named as a Strategic Partner and secured a significant direct grant award of £350m, the largest award given in this phase. This is significantly in excess of the first award received under the previous programme and will enable us to directly deliver over 3,000 affordable homes.  The process of building these homes has already started.

The CEO Review has provided strategic clarity with a deliverable plan and clear commitments across capital, operations and culture. This gives me great confidence that we can return Vistry to a business that consistently creates value for shareholders and delivers exceptional outcomes for all stakeholders.”

Results highlights

• Group delivered an adjusted loss before tax of £83.3m (H1 25: £80.6m profit), reflecting both discounting of Open Market stock to generate cash and approximately £50m in relation to the early impacts of the CEO review process
• Reported loss before tax was £661.3m (H1 25: £40.9m profit), reflecting, in addition to the above, exceptional items including a £475.0m impairment of goodwill and an additional £73.2m building safety provision
• Total completions of 6,304 (H1 25: 6,889) units, 8% down on the prior year, reflecting the expected lower level of partner demand in the first half, with Group adjusted revenues of £1,703.3m (H1 25: £1,869.1m), down 9% on prior year
• Net debt as at 30 June 2026 of £468.8m (30 June 2025: £293.1m) was higher than the prior year primarily due to a deterioration in trading and net investment in infrastructure within WIP 

CEO Review highlights

The CEO Review confirms that Vistry’s mixed-tenure strategy is the right one, but that the Group must operate with greater focus, discipline and control. The business will therefore be resized, simplified and repositioned to deliver lower leverage, stronger cash conversion and more sustainable returns

Operational

• Transition to a smaller, more focused business targeting approximately 12,000 completions per annum over the medium term
• Target tenure mix of approximately 60% Partner Funded and 40% Open Market
• Greater focus on regions and site profiles where the mixed-tenure model performs best, with increased exposure to the North, Midlands and West
• South East operations to move to a fully pre-sold model to eliminate Open Market exposure. It is expected that schemes being delivered through joint ventures will continue to sell into the Open Market while the sites complete
• Consolidation from 25 regions to 12 larger operating regions to focus responsibility on highest performing teams, reflect lower volume targets and to obtain cost efficiencies
• Simplification of product range, brands and operating processes to improve consistency and standardisation
• Owned land bank will be reshaped and reduced (from 51k to 36k plots) with a more selective approach to new land acquisition; increased discipline around capital allocation; and a sustainable management of margins. Target three years owned land and at least 18 months controlled in land bank
• Operational delivery to be improved through consistent adherence to the mixed-tenure model across regions, rationalised house types and the “Golden Rules” which will guide capital investment and allocation

Financial

• Overhead cost savings of £50m p.a. have been identified as a result of fewer regions, flatter structures and lower volumes, in addition to the £25m p.a. previously identified from the Voluntary Exit Scheme and recruitment freeze. These run-rate savings are expected to be achieved within the next two years, with the combined cost associated with these actions in FY26 anticipated to be c. £40m
• Tightening of up-front controls, monitoring and accountabilities to reduce risk and protect downside
• The Group will operate with a significantly reduced balance sheet; targeting average daily net debt reduction to c. £500m in FY27 and below £400m in FY28

Five-year targets

• Target ROCE of more than 30% and 12% operating margin by FY31
• Capital employed expected to reduce to approximately £1.5bn
• Average daily net debt targeted to reduce to c. £300m by FY29, stabilising thereafter
• Shareholder distributions to be reconsidered once sufficient progress has been made on deleveraging and capital reduction objectives

Current trading and outlook

• The Group has refined its forward order book definition to comprise only exchanged or otherwise legally contracted orders and to exclude contracts which have progressed to agreed terms but not yet exchanged and future contracts on existing sites where formal exchange has not yet taken place. On this revised basis, the Group’s forward order book totals £3.3bn (September 25: £3.7bn) with the Group 91% forward sold for FY26.  Of this 90% of the Partner Funded sales are secured
• Open Market conditions became more challenging over the summer months, reflecting lower customer confidence, affordability constraints and broader macroeconomic uncertainty, resulting in our Open Market sales rate slowing over the period to 0.3 reservations per outlet per week
• The first wave of Social and Affordable Housing Programme (2026 – 2036) (“SAHP”) funding allocations, both to our partners and directly to Vistry, supports our expected deal flow through the remainder of the second half
• The Group’s H2 performance will therefore benefit from a higher weighting of Partner Funded and Open Market volumes and improved margins from a richer mix of higher margin sites
• Furthermore, as noted in July, H2 will see the conclusion of certain transactions delayed from H1, profit driven from land sales as we start to reshape the land bank, lower overheads and there will be a reduction in profit headwinds in H2 related to our cash generation actions
• The Group’s focus on cash performance, including the management of work in progress, is expected to result in a broadly neutral cash position as at 31 December 2026, lower than previous guidance due to selective withdrawals or renegotiation of proposed partner deals in light of our revised contracting criteria and disappointing summer sales of private homes
• We are in the process of finalising the classification and quantification of items related to the exit from the South East of England, changing site strategies in the land bank and other strategic actions.  We anticipate that the impact of these items in full year will be around £470m.
• In addition, there has been a £40m downward revision of year-end profit to reflect partner deals that, following the CEO Review, are no longer targeted for this year to allow time for renegotiation to meet our revised criteria
• Excluding the items above, we would expect APBT to be in the region of £165m
• Our banking group has demonstrated their support for the Group by providing waivers for the interest cover covenants for FY26 and HY27 that were subject to impact from the sizeable charges being taken in connection with the CEO Review
• Subject to market conditions remaining broadly stable, we expect FY27 APBT to be c. £185m