Vistry saw operating margins slide to 6.7% from 8.2% in the first half as a weaker mix of sites and lower affordable housing demand weighed on profits.
The partnerships house builder saw adjusted pre-tax profit fall a third to £81m on revenues down 6% at £1.85bn in the first half to June 2025.
Reported figures were hit harder by exceptionals, with pre-tax profit more than halving to £41m.
Margins were squeezed as more completions came from lower-return schemes, including legacy sites in the South division, while affordable housing partners slowed activity ahead of June’s Spending Review.
Partner Funded homes dropped 14% in the half and private rented sector volumes were well down on last year’s big portfolio deals.
Despite the margin hit, Vistry kept full-year guidance unchanged.
Chief executive Greg Fitzgerald said the group expected “a significant step-up in completions and profits” in the second half, underpinned by a strong pipeline and new government support for affordable housing.
“The group also made good progress with its target of reducing debt levels, with net debt as at 30 June of £293m significantly better than expectations.
“The new Social Affordable Homes Programme provides an unprecedented level of funding for affordable housing over the next 10 years.
“Through our Partnership model and commitment to mixed tenure development, Vistry is uniquely placed to maximise this opportunity and play a key role in delivering high-quality affordable homes across the country.”
The order book stands at £4.3bn with 88% of this year’s revenue already forward sold.
Management expects margins to recover in the second half as higher-return sites start to flow and affordable housing partners ramp back up under the new £39bn, ten-year Social and Affordable Homes Programme.
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