ousebuilder Vistry revealed today it will focus solely on social housing partnerships, cutting some jobs in the process, as skyrocketing interest rates hit its private sales arm while affordable sales were more resilient.
The builder, which merged with affordable housing specialist Countryside Partnerships last year, saw profit dip to £174 million, despite a 30% rise in completions.
Forward sales ticked up to £4.3 billion despite the interest rate environment, allowing Vistry to maintain its profit guidance of £450 million.
That was driven by affordable housing though, as private sales “slowed further” since June. As a result, the group announced a change of strategy to focus entirely on partnerships. It will merge the legacy Vistry and Countryside businesses into one segment and end private housing sales, which brought in £1.4 billion in first-half revenue.
Vistry said it would cut jobs as part of the strategy change. It already laid off 4% of its more than 3,000 staff when it combined with Countryside, but it now expects to reduce its headcount further. It has not yet conducted a review to determine how many jobs will be lost.
“Vistry intends to look, where possible, to reallocate staff from discontinued roles arising from the change in strategy to other appropriate new roles or growth-related new opportunities,” the business said.
The group also said it plans to return £1 billion to shareholders over the next three years.
CEO Greg Fitzgerald said: “The integration of Countryside has progressed well in the first half, firmly establishing Vistry as the leading provider of affordable mixed tenure housing in the UK.
“The Group delivered a robust half year performance despite the challenging macro-economic conditions with Partnerships continuing to see good demand, demonstrating its market resilience.
“The scale of the social need for affordable mixed tenure housing across the country continues to increase and it is clear that Vistry is uniquely positioned as the leader in partnerships housing.
“In this context and following our annual review of the Group’s strategy, the Board has concluded that focusing the group’s operations fully on partnerships by merging our housebuilding operations with our partnerships business best enables sustained growth in housing output, provides greater benefits to our partners, while maximising value and long term returns for shareholders with the Group targeting a 40% ROCE and the distribution of £1bn to shareholder over the next three years.
“Delivering on the acute social need for housing across the country and increasing the availability of affordable, sustainable homes is at the core of the Group’s social purpose and vision, and I look forward to delivering upon this exciting and unique opportunity for Vistry.”