As housebuilder Vistry announces more potential job cuts after slumping to a half-year loss, Dan Coatsworth, head of markets at AJ Bell, believes that a recent award of funds from the UK government’s affordable housing scheme represents a show of faith in the business.
He said: “News of a strategic review would have been ringing alarm bells for beleaguered Vistry shareholders and, sure enough, one of the outcomes of said review is a chunky profit warning.
“Having posted a hefty first-half loss, the company has lowered full-year profit expectations as it plans to substantially downsize the business and makes significant provisions for the costs of restructuring.
“The positive news is that recently appointed boss Adam Daniels is grasping the nettle with both hands as he looks to right a business which has been suffering badly from stock market subsidence in recent years. Vistry has been hit by cracks in the foundations of its regeneration and social housing focused model and due to accounting failures in its Southern division. Balance sheet concerns have added to the mix of late, too.
“The problem for Daniels is that he is not fixing the roof while the sun is shining but instead when it is pouring with rain, thanks to rising costs and a struggling property market affected by rising borrowing costs.
“One bright spot amid the gloom is the recent award of funds under the UK government’s affordable housing scheme, which represented a show of faith in the business.”
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