Vistry has revealed that build cost increases on schemes in its South Division are set to adversely impact its expected profit for the year by about 18%.
In a trading statement released today (October 8), the group says it has recently become aware that within one of its six divisions, the South Division, the total full-life cost projections to complete nine out of its 46 developments, including some large-scale schemes, have been understated by around 10% of the total build costs.
“The estimated one-off impact of adjusting for the revised development cost assumptions reduces the board's expectations for adjusted profit before tax for FY24 by around £80 million, for FY25 by around £30 million, and FY26 by around £5 million. The reduction in expectations in these three years relates to overall cost estimates across the full life of the developments. As a result, the board now expects group adjusted profit before tax in FY24 to be around £350 million.
“We believe the issues are confined to the South Division and changes to the management team in the division are underway. We are commencing an independent review to fully ascertain the causes.”
Vistry still expects to deliver more …
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