UK's Vistry warns on profit, to slow house building in blow to shares
Vistry's Profit Warning and Strategic Response
May 13 (Reuters) - Vistry warned of lower annual profit on Wednesday and said it will slow building as the economic impact of the Iran War piled further pressure on the British house builder, knocking its shares to a more than 14-year low.
Measures to Boost Cash Flow and Cut Debt
It expects steps to boost cash flow to cut debt, including pausing share buybacks, delaying construction, adopting stricter land-buying criteria and offering deeper incentives to drag first-half profit "significantly" below previous years.
Operational Review Under New CEO
Adam Daniels, who became CEO last month, is conducting an operational review, Vistry added in a statement, with the findings to be shared with its interim results in September.
Impact of Iran War on Construction Sector
The Iran war is driving up costs of construction materials and dampening buyer interest, prompting similar warnings from Vistry's competitors Persimmon and Taylor Wimpey.
Profit Forecasts and Market Performance
Vistry, which has faced months of subdued demand and doubts over its partner-funded model, now expects full-year adjusted profit before tax toward the middle of analysts' forecasts of 168 million to 283 million pounds ($383.07 million).
It posted a profit of 268.8 million pounds last year.
Sales Rate and Incentives
Vistry said its overall sales rate jumped 32% year-to-date through aggressive incentives, although activity has moderated.
Outlook for Construction Costs
"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," it said.
Additional Information
($1 = 0.7388 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Rashmi Aich and Alexander Smith)
