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Vistry Group PLC on Wednesday said it has put the brakes on its buyback and warned of ‘significantly lower’ half-year profit. The housebuilder cautioned that the Middle East conflict has ‘started to create some upward pressure on material and, to a lesser extent, labour prices’. It expects this to continue into the second half. Vistry shares slumped 11% to 290.13 pence each in London on Wednesday morning, the worst FTSE 250 performer. ‘Whilst market conditions have become more challenging in Q2, we have continued to increase our focus on initiatives to enhance cash generation,’ the company said. Measures include reducing inventory through sales initiatives, having ‘higher hurdles’ for land purchases and pausing its current share buyback to ‘prioritise debt reduction’. Vistry said: ‘Average daily net debt in the first half is expected to be higher than the prior year, reflecting higher land payments in the early part of the year and slower than anticipated conversion of reservations to completions on Open Market homes, commonly due to delays within housing chains. However, the combined effect of the above actions is expected to deliver significantly lower average net debt levels in the second half and we are now expecting a net cash position in excess of £100 million at 31 December 2026.’ It expects first half profit to be ‘significantly lower than the prior year’. This is ‘primarily due to the up-front profit impact of the actions to accelerate cash generation’. ‘However, with the benefits of an improved margin mix on active sites and a step up in demand from our affordable housing partners we expect H2 2026 profit to be in line with H2 2025 profit,’ Vistry added. As a result, it expects adjusted pretax profit for 2026 in the middle of a £168 million to £283 million analyst forecast range. Adjusted pretax profit in 2025 amounted to £268.8 million. In the first half of last year, it totalled £80.6 million. Vistry said: ‘The events in the Middle East have started to create some upward pressure on material and, to a lesser extent, labour prices which we expect to continue into H2. We are mitigating these where possible, through proactive engagement with our sub-contractors and suppliers and we will continue to monitor overall build cost inflation for 2026 and into 2027 as macro-economic conditions evolve.’ It has seen a year-to-date increase in its sales rate to 1.20 from 0.91 a year prior. ‘The year-to-date Open Market sales rate remains around 30% higher than the prior year, despite some moderation in recent weeks reflecting uncertainty arising from the Middle East conflict. The use of increased incentives and discounts has been more significant on low margin sites and developments that are nearing completion, resulting in an earlier recognition of profit impacts and a higher weighting of the overall profit impact in the first half than previously anticipated. We expect the level of discounting and its effect on profit to reduce in the second half of the year,’ the company said. ‘As expected, transaction activity with partners has been relatively subdued as the industry transitions between social affordable housing programmes. We are encouraged that bidding for the SAHP 2026-2036 recently closed, with notification of grants and clarification of Partner status expected in Q3. This is expected to drive a step up in demand from our affordable housing partners towards the end of 2026 and into 2027, which will contribute to a greater second half weighting of partner revenues.’ SAHP stands for Social & Affordable Homes Programme. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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