Housebuilder Vistry expects to take a one-off hit of around £115m on its profit after understating build costs on several of its developments.
The group said it had discovered a build cost underestimation on nine of its developments in its South division of around 10%.
It said the one-off impact of adjusting for the revised development cost assumptions would reduce its full-year pretax expectations for 2024 by around £80m, by £30m in 2025 and £5m in 2026.
It now expects full-year pretax profit for 2024 to be around £350m.
The group said: “We believe the issues are confined to the South division and changes to the management team in the division are under way. We are commencing an independent review to fully ascertain the causes.”
Vistry added: “Notwithstanding the one-off adjustment announced today, we remain committed to delivering a strong increase in high-quality mixed-tenure housing, our medium-term target of £800m adjusted operating profit, and £1bn of capital distributions to shareholders.”
Vistry will update on trading on 8 November.
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