Vistry has revealed that its profits in H1 are expected to be “significantly lower” than last year as the housing developer blamed increased macroeconomic uncertainty.

The firm said an ongoing focus on cash generation and reducing debt levels would allow its H2 profit to recover slightly and be in line with its H2 period last year, however.

Vistry was providing a market update for its trading so far in 2026 ahead of holding its annual general meeting today. The FTSE 250 group said that events in the Middle East had started to “create upward pressure on material” and to a lesser extent labour prices, which it expects to continue into H2.

Despite this, Vistry still reported that its open market sales rate in the year-to-date remains around 30% higher than the prior year, despite some moderation in recent weeks reflecting uncertainty arising from the Middle East conflict.

A statement from Vistry said: “Since we reported our FY 2025 results two months ago, the level of macroeconomic uncertainty has increased, and with it the range of potential outcomes for the current year.

“Primarily due to the up-front profit impact of the actions to accelerate cash generation, we expect H1 profit to be significantly lower than the prior year.

“However, with the benefits of an improved margin mix on active sites and a step up in demand from our affordable housing partners we expect H2 2026 profit to be in line with H2 2025 profit.”

The housing developer had already outlined plans to improve its cash generation in its 2025 full-year results, before the conflict in the Middle East escalated earlier this year. Vistry today acknowledged that market conditions had become more challenging in Q2, but that it is continuing to increase focus on initiatives to enhance cash generation.

These include to reduce its levels of finished or nearly finished open market homes, delaying or slowing the building of some sites, as well as adopting higher hurdles for land buying while conditions remain volatile.

Vistry has also paused its current share buyback programme to prioritise debt reduction.

“Prioritising cash generation to pay down debt may be sensible but comes at a cost,” commented head of property research at Quilter Cheviot, Oli Creasey.

“The company has accelerated its sales rate by 30% year-to-date but is doing so by increasing price discount and buyer incentives on low margin sites, impacting the profit generation. The company has confirmed that profit for H1 26 is expected to be ‘significantly lower’ than the prior year.

“Profit before tax in H1 25 was just £81m, a 33% reduction in the prior year, and a further significant drop will be painful for investors to bear. However, management do expect a turnaround in H2 26 and believe that H2 26 profits will be in-line with the second half of last year.”

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