Vistry Group PLC: Profits Hold Firm, but a Margin Warning Spooks the Market

Full-year results for the year ended 31 December 2025

Vistry Group PLC published its full-year results for the year ended 31 December 2025 on 4 March 2026. The figures themselves were broadly in line with the company's own guidance, with adjusted profit edging higher despite lower volumes — but the market reaction was sharply negative. Shares fell more than 17% on the day, driven not by the 2025 numbers but by a warning that 2026 margins would be lower as the group leans on pricing incentives to drive open-market sales.

It was a results day defined as much by what comes next as by what just happened, and it also confirmed a leadership transition: long-serving Chair and Chief Executive Greg Fitzgerald is to retire.

Headline numbers

Vistry presents its results on two bases, and the gap between them is wide. The "adjusted" figures include the group's proportional share of joint ventures and strip out amortisation of acquired intangibles and exceptional items; the "reported" (statutory) figures do not. Both deserve attention.

On an adjusted basis, revenue fell 4% to £4,155.3 million from £4,329.2 million, while adjusted profit before tax rose 2% to £268.8 million from £263.5 million — in line with guidance. Adjusted operating profit was £353.8 million, down 1%, but the operating margin actually nudged up 20 basis points to 8.5%. Adjusted basic earnings per share rose 6% to 59.3 pence.

On a statutory (reported) basis, the optics were far more dramatic. Reported revenue fell 4% to £3,613.7 million, but reported profit before tax surged 87% to £196.2 million from £104.9 million, and reported basic EPS jumped 92% to 42.2 pence. That outsized statutory improvement largely reflects the absence of the heavy exceptional charges that had depressed the prior year, rather than a step-change in underlying trading.

A summary of the key metrics:

Metric (£m unless stated)FY25FY24ChangeAdjusted basisRevenue4,155.34,329.2−4%Operating profit353.8358.2−1%Operating profit margin8.5%8.3%+20 bpsProfit before tax268.8263.5+2%Basic EPS59.3p55.9p+6%Return on capital employed13.9%14.6%−70 bpsReported basisRevenue3,613.73,779.3−4%Operating profit222.6167.0+33%Profit before tax196.2104.9+87%Basic EPS42.2p22.0p+92%Net debt(144.2)(180.7)−20%

Volumes, prices and the partnerships model

Total completions fell 9% to 15,658 homes from 17,225, reflecting continued weakness in the open market and the timing disruption caused by the delayed November Budget, which pushed some partner-funded deals out of the year. That volume drop was partly cushioned by a 3% rise in average selling price to £282,000, helped by geographic mix and a slight shift towards larger open-market homes.

The shape of Vistry's business remains distinctive among the major UK housebuilders. Partner-funded units — bulk sales to housing associations, local authorities and institutional landlords — accounted for 74% of completions, with open-market sales making up the remaining 26%. The group's overall sales rate averaged 0.96 per site per week, down from 1.07 in 2024.

This partnerships-led model is central to the investment case. Vistry says it delivered around one in seven of the country's affordable homes in 2025, and management positions the group as a natural beneficiary of the government's £39 billion Social and Affordable Homes Programme (SAHP) running from 2026 to 2036. The flip side, well understood by the market, is that partnership work typically carries lower margins than traditional private development.

Balance sheet and capital allocation

Net debt reduced 20% to £144.2 million at year-end, from £180.7 million. However, average daily debt during the year was £733.7 million — higher than targeted, reflecting the late-year delay of partner-funded deals and slower-than-hoped inventory reduction in the open market. The group continued to invest through the downturn, securing roughly 12,599 plots across the year and taking advantage of a subdued land market.

On shareholder returns, Vistry struck a notably cautious note. It will complete the remaining £29 million of its existing £130 million share buyback programme during 2026, but proposed no further capital distribution on the back of the 2025 results, choosing instead to prioritise debt reduction. Any future distributions are to be reviewed at the half year.

Why the shares fell: the 2026 margin warning

The share-price reaction — down more than 17% — came despite the in-line profit. The trigger was the outlook. Vistry guided to good year-on-year revenue and volume growth and an improvement in adjusted profit before tax in 2026, but explicitly flagged a lower overall margin, reflecting the pricing initiatives and incentives it is using to revive open-market sales.

That matters because consensus had been looking for a much steeper profit recovery. Analysts had pencilled in adjusted pre-tax profit of roughly £312–317 million for 2026, implying mid-teens growth; the incentive-led strategy made those forecasts look stretched. In effect, Vistry signalled it would buy volume and cash generation at the expense of margin — a sensible move operationally, but one that forced the market to trim its profit expectations.

There was an encouraging current-trading data point, however: the year-to-date sales rate had jumped to 1.42 per site per week, well ahead of the prior year, with open-market sales rates running more than 40% higher — early evidence that the incentives are working. The forward order book stood at £4.5 billion as at 3 March 2026, up £500 million since December, with 67% of forecast 2026 units secured.

Leadership change

In a separate announcement on the same day, Vistry confirmed that Greg Fitzgerald will retire as Chair at the May 2026 AGM and step down as Chief Executive by March 2027, with a search for his successor underway. The move ends the combined chair-and-chief-executive structure that had drawn governance scrutiny, particularly after a series of profit downgrades in late 2024 that damaged investor confidence.

The takeaway

Vistry's 2025 results were a stabilisation story: profits held in line with guidance, the balance sheet improved, and the heavy exceptional charges of the prior year fell away, flattering the statutory comparison. After a first half in which adjusted profit fell about a third, the second-half recovery did its job.

But the market's verdict was driven by the road ahead. The decision to chase open-market volume with incentives will compress 2026 margins and has reset profit expectations lower, even as it should accelerate the return to a net cash position (targeted at around £100 million by year-end). For longer-term investors, the bull case rests on the partnerships model and alignment with a decade-long, £39 billion affordable-housing programme; the watch-items are margin recovery, the durability of the open-market sales pick-up, and a smooth leadership handover.

This article is based on Vistry Group plc's published full-year results announcement for the year ended 31 December 2025 and is provided for general information only. It does not constitute investment advice. Figures are taken from the company's results statement; the full annual report and accounts are available on the Vistry corporate website.