Vistry, the housebuilder formed from the merger of Bovis, Linden and Countryside, has cut its annual housebuilding target from 20,000 to 12,000 homes as part of a recovery plan under new chief executive Adam Daniels. The company, once favoured by the Labour government for its focus on affordable mixed-tenure housing, has seen its share price fall to 262p, down from almost £14 in August 2024.
Partnership model under pressure
Three years ago, Vistry aimed to build 20,000 houses a year, betting on a “capital light” approach of pre-selling homes through partnerships with councils, housing associations and institutional landlords. Former executive chair Greg Fitzgerald promised the model would generate significant cash, and the share price doubled between October 2023 and August 2024.
Fitzgerald departed in May after repeated profit warnings. Daniels, his successor, has now reviewed what went wrong. He said the pace of change meant the operating model, controls and culture did not scale consistently with the group’s construction volumes. He also acknowledged that a proportion of the land bank would not be acquired under the investment approval criteria to be applied in the future, effectively admitting Vistry overpaid for some plots.
Recovery plan and reduced ambitions
The company does not require fresh equity, but the recovery plan involves shrinking operations and reducing ambitions. The target is now 12,000 houses a year, with a greater proportion in the north of England. The return on capital employed target has been cut from 40% to 30%, with the new level expected only by 2031.
Vistry remains in favour with the government, having received a £350m direct grant last month to build 3,000 affordable homes under the £39bn social and affordable homes programme. At 35, Daniels has time to deliver on his promise of better execution.
Wider housing market concerns
The news is discouraging for the government’s target to build 1.5m homes in England during this parliament. Vistry is an extreme example, but most housebuilders are reducing ambitions in the name of financial discipline and cash generation. Barratt Redrow, the largest, said in April it would scale back land purchases. Housing secretary Angela Rayner has called the 1.5m figure a “stretch target”. The only real question is by how much it will be missed.
