Vistry is to slash its operating regions from 25 to 12 and shrink annual housing output to around 12,000 homes in a radical reset to salvage the struggling business.
The drastic downsizing will also see Vistry pull out of open-market housing across the South East to concentrate any future investment in the North, Midlands and West.
Chief executive Adam Daniels unveiled the sweeping rescue plan as Vistry crashed to a £661m statutory pre-tax loss for the first half, compared with a £41m profit last time.
The loss included a £475m goodwill impairment and a further £73m building safety charge.
Even on an adjusted basis, Vistry swung to an £83m pre-tax loss from an £81m profit a year earlier.
That was also far worse than the roughly £30m first-half deficit flagged in July as the first costs of Daniels’ business review began to surface.
Under the new structure, Vistry will operate through 10 larger regions outside London and two in the capital, concentrating management and site teams where it believes its mixed-tenure model can deliver the strongest returns.
The shake-up has identified a further £50m of annual overhead savings through fewer regions, flatter management and lower housing volumes.
That comes on top of £25m already targeted through the voluntary exit programme and recruitment freeze.
Vistry expects restructuring to cost around £40m this year as staff leave and offices close.
The biggest geographic retreat will come in the South East, where Vistry plans to stop taking open-market housing risk.
Private-heavy sites will either be switched towards partner-funded delivery or run down, with future work focused on fully pre-sold schemes backed by affordable housing partners.
The change is expected to wipe around £200m from 2026 profit through write-downs, heavier discounting and lower site margins.
A wider landbank clear-out will cost another £250m as Vistry sells, restructures or changes course on sites that no longer fit its new model.
The group ultimately plans to cut its owned landbank from around 51,000 plots to 36,000 and reduce annual output from the 17,000-home peak in 2024.
Around 60% of future production is expected to be partner-funded, with 40% sold on the open market.
Daniels’ review found patchy regional performance, inconsistent commercial terms and too much cash locked into land and work in progress.
He said: “While 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.”
First-half completions fell 8% to 6,304 homes while adjusted revenue dropped 9% to £1.7bn.
Average daily net debt remained a heavy £799m, with period-end net debt at £469m.
Vistry has now ditched its previous target to finish 2026 with more than £100m of net cash and instead expects to end the year broadly debt neutral.
The downgrade reflects weaker summer private sales and Vistry walking away from or renegotiating partner deals that no longer meet its tougher return criteria.
Its banks have waived interest-cover covenants for 2026 and the first half of 2027.
Vistry will also open talks later this year over refinancing £900m of facilities due to mature in April 2028.
Daniels said the group did not expect to need an equity raise as the reset gathers pace.
Average daily debt is targeted to fall to around £500m next year, below £400m in 2028 and around £300m from 2029.
Source: Constructionenquirer.com