Russ Mould, investment director at AJ Bell, said: “To build from the ground up you have to level expectations, and it feels like new Vistry boss Adam Daniels has done that with his first major update since taking charge at the housebuilder.
“Prioritising cash generation over profit looks a sensible decision for a company carrying a meaningful amount of debt.
“However, it does mean first-half earnings will be substantially lower year-on-year as the company sells its open market homes at a discount to clear inventory.
“There have also been delays on its affordable housing partnerships projects as the industry goes through a period of transition.
“The share buyback programme has been put on hold, meaning shareholders are not being compensated as much for their patience while they wait for a turnaround of the business to gain traction.
“Even getting profit towards the middle of forecast levels for the year, or in other words at the lower end, will require an improvement in the second half – a situation which can be a recipe for downgrades down the road.
“Rising costs associated with the inflationary pressures unleashed by the Iran conflict are a wildcard factor over which Vistry has little control.
“A lot might now ride on Daniels’ strategy update in September after he’s had a chance to fully review the group and its operations.”
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