By Yamini Kalia and Prerna Bedi
(Reuters) -British homebuilder Vistry, hurt by delays to expected year-end transactions and completions, cut its 2024 profit estimate for the third time in three months on Tuesday, sending its shares down 20%.
British homebuilders, which have experienced subdued demand for most of this year, are now under pressure from concerns that interest rates will come down less than markets had earlier anticipated.
In its third profit warning since October, Vistry said it expected an adjusted profit before tax for the year ending Dec. 31 of 250 million pounds ($313.3 million), down from 300 million pounds forecast earlier.
Vistry shares fell to more than a two-year low to 523 pence apiece, making it the biggest loser on the FTSE midcap index.
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, called the profit downgrade “a troubling trend driven by a string of poor management decisions and forecasting missteps that have left investors feeling far from jolly.”
The Kent, England-based company, which was already struggling with cost overruns in one of its divisions, said a number of agreements with its partners, which were expected to be completed this year, got delayed until next year.
The delays, along with the company’s decision to drop some unattractive deals have contributed to the profit impact.
The company also said it now saw its net debt at about 200 million pounds at the end of the year, a far cry from the neutral footing investors had hoped for, according to Britzman.
Peel Hunt forecast Vistry’s year-end net debt at 50 million, while Citi had a 70 million pound estimate.
($1 = 0.7980 pounds)
(Reporting by Prerna Bedi and Yamini Kalia in Bengaluru; Editing by Savio D’Souza, Mrigank Dhaniwala and Tomasz Janowski)
