Vistry has ‘no plans’ to raise equity through rights issue, says executive

Housebuilding giant Vistry is not planning to raise more equity from its existing shareholders, a senior executive at the firm has said.

Listed partnerships housebuilder Vistry in May issued a warning on its first half profits and has since seen its share price fall.

The group is discounting some market homes as part of a strategy to boost cash generation, along with other measures including delaying or slowing the building of some sites.

Last week it emerged it is also offering voluntary exits to staff on enhanced terms.

This has led to speculation in the sector and in the City that the firm could raise cash by launching a “rights issue”, under which it would seek to raise more money from existing shareholders by offering discounted shares.

But Stephen Teagle, chief executive of partnerships and regeneration at Vistry, told Building: “There are no plans to undertake a rights issue within the business.”

Analysts Investec last week said Vistry’s new chief executive Adam Daniels could “choose to get ahead of events” and raise equity but noted a rights issue would dilute the value of existing shares.

Vistry sold 17,225 homes last year, the highest total in the housebuilding sector, according to Building’s Top 150 Contractors & Housebuilders list.

Teagle said he could not put a number on how many homes he expects Vistry to be building in two years time.

He said: “I think we will continue to be the country’s leading partnerships business going forward […] I think we will continue to deliver significant numbers of affordable homes, significant placemaking, significant regeneration.”

Vistry in May said it expects the impact of discounting on profit to reduce in the second half of the year, and this - coupled an expected pick up in affordable housing demand - will mean its full-year profit will be in line with last year’s. It has given a guidance for adjusted pre-tax profit of between £168m and £283m.

A full in-depth analysis of the situation at Vistry, including more from Teagle, will be published on Building tomorrow.