Vistry starts cutting jobs as planned restructuring begins

Vistry said it has started cutting jobs as part of its plan to become a smaller business after making a £660m loss in the first half of the year.

The housebuilding giant, in a brief update today, said: “We have also started the difficult but necessary process of reducing headcount and restructuring the operating regions from 25 to 12.

“The MDs and their management teams have been confirmed, and the new structure will be in place and operational from January.”

Adam Daniels, chief executive of Vistry, said the firm’s priorities include generating cash, lowering leverage, improving operational control and “reducing complexity while maintaining tight commercial discipline.”

This follows Daniels’ review of the business which was published in September. Last month Daniels told Building a 45 day consultation would finish by the middle of the month.

Vistry said it is reducing open market work in progress, realising value from its land bank and improving the term of ‘partner-funded’ transactions, which refers to homes funded by housing associations, local authorities, or build-to-rent investors

In the summer, Vistry said it will focus more on regions where the mixed-tenure model works best, with increased exposure in the North, Midlands and West. In the south east it will move to a fully partner-funded model to reduce open market exposure.

The group said today that its average net daily debt in the second half of the year is likely to be around £800m, similar to the figure in the first half. It added this reflects “the current market backdrop and the movement of a limited number of partner funded transactions to later in Q4”.

The group is refinancing its £900m loan and revolving credit facility and is targeting a stronger balance sheet and “more disciplined operating system” to reduce average daily net debt.

New management teams for the 12 operating regions have been formed, and it said it is making good progress in delivering £50m of savings next year.

The housebuilder said open market conditions remain difficult “reflecting affordability constraints, cautious consumer sentiment and wider macroeconomic uncertainty”. It said it is managing pricing and incentives on a site-specific basis, while tightly aligning build rates with demand.

Vistry also said it is “encouraged” by the government’s Your First Home equity loan scheme for first-time buyers.

But it added: “In the near term, we expect some first-time buyer uncertainty as customers await further details and implementation of the scheme.”