Vistry Group has announced the loss of 200 jobs as part of a business restructure – amid talks with its supply chain about price reductions on contracts.
“We appreciate the productive discussions we have had in recent weeks with our key supply chain partners to agree cost reductions for all our existing and future contracts,” Vistry wrote in its latest trading update.
Adding: “With a high level of visibility on forward sales, build programmes and revenues in the Partnerships model, we can offer greater continuity of work to our suppliers and, working with them, can increase the overall rate of delivery on our sites and supply of much needed affordable mixed tenure homes.”
It follows reports the FTSE 250 housebuilding company recently opened negotiations with subcontractors on existing contracts – amid expectations of a £40 million hit to its profits.
In a dramatic restructure revealed in September, Group chief executive, Greg Fitzgerald, said merging Vistry’s Housebuilding and Partnerships operations was the best scenario for sustained growth in housebuilding and to meet the Group’s aim for returning £1 billion to shareholders over three years.
Around 200 staff will be let go as part of the restructure, in which Vistry will reduce its regional business units from 32 to 27.
This approach, under six new operating regions, will deliver £25 million in cost savings, it said.
In its Q3 Trading Update, Vistry said it is targeting adjusted profit before tax of £450 million for FY2023, excluding the impact of becoming a ‘partnerships-only’ business.
Group average net debt is expected to be higher than previously expected at £450 million. “We continue to expect net debt to reduce to c. £100m as at 31 December 2023,” said Vistry.
The Group will begin an initial ordinary share buyback scheme of up to £55 million this year, to be completed ahead of its full year results in March 2024.
The Group continues to see demand for mixed-tenure affordable homes – adding a slowdown in private sales during the summer has persisted.
Vistry’s forward order book is valued at £4.3 billion.
“The ongoing acute need for affordable mixed tenure housing across all areas of the country continues to drive demand and we have received positive endorsement of our strategy from a wide range of our partners,” said Vistry.
“Increasing the supply of affordable and sustainable homes through our Partnerships model is at the core of Vistry’s purpose and gives us confidence in delivering on our medium‐term targets.”
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