Vistry shares plunge as cost overruns lead to profit warning

Vistry shares plunged by 13 per cent in early deals this morning after the company published the true extent of issues at its South Division.

Vistry shares plunged last month after it flagged a profit hit from costs being understated in its South division.

It’s now revealed the true extent of the losses.

In a trading update this morning the company said it anticipates a total impact on profit out to its 2026 financial year from the issues in the South division to be £165m, including an additional £25m for 2024.

In addition, in the trading update trading update for July through to early November, the company said verall activity has been hit by affordability issues, particularly for first-time buyers. It is using incentives of up to five per cent to support sales.

Vistry said it would also take a hit of £5m from the employers’ national insurance contribution hike in the Budget.

Vistry’s cost overruns

An independent review of the South Division, led by an external forensics team, found that issues were primarily linked to deficient cost controls, commercial forecasting, and poor divisional culture.

It said today that those issues are confined to that division “and can be attributed to insufficient management capability, non-compliant commercial forecasting processes and poor divisional culture.”

Despite these, no systemic problems were reported across its other divisions.